In the current issue of Sharetime Magazine, industry veteran Ron Haylock shares his views on what he calls the 'Timeshare Demographic Time Bomb'.
Ron Haylock was managing director of RCI Europe from 1984 to 1994 and again from 1996 to 1998.
After a long career in the travel and tourism industry, he acted as a non-executive director of Holiday Autos, Kirker Holidays and Hoseasons Holidays.
He is currently a non-executive director of South Africa’s largest timeshare company – the Club Leisure Group.
He is also vice chairman of much of the timeshare industry’s charity of choice, Christel House, which educates children from very deprived backgrounds in South Africa India, Mexico and Venezuela.
"Long-term economic forecasting is a notoriously hazardous activity. Indeed, it is said that an economic forecaster is someone who will explain to you tomorrow why what they forecast yesterday didn’t happen today!
However, in the world of timeshare ownership it is my view that certain trends can be forecast which will affect thousands of owners in hundreds of resorts throughout Europe.
These trends are what I call the “timeshare demographic time bomb.”
During the timeshare sales boom of the 1980s and 1990s many developers and marketers operating in resorts throughout Europe were structured in the tried and tested ‘club/trustee’ system. They sold a timeshare product ‘in perpetuity’ (or sometimes with an 80 year limit).
In other words the right-to-use a timeshare week was available forever, or certainly well beyond the buyer’s lifetime.
Indeed, the conventional wisdom at the time was that it was near impossible to sell a timeshare with a limited life. (Actually, a few developers did sell a 25/30 year product – surely a lifetime of holidays for most families?).
Most buyers were couples in their late 30s or 40s with young children and they purchased a lifetime of holidays for themselves and after their demise, their children.
There are hundreds of thousand of buyers who acquired their timeshare in this way in resorts that have long been ‘sold out’ and currently under the control of a democratically elected home owners association (HOA). Many of these are of members of TATOC.
Now 25/30 years on these buyers are in their 60s and 70s and their lives are somewhat different.
Circumstances have changed. Typically, their children are now grown up with kids of their own. Health issues begin to emerge. For many, travelling abroad to use their timeshare becomes an onerous if not impossible prospect. (Post 80 it becomes almost impossible to secure travel insurance).
Exchanging into a U.K.-based resort is not easy. When they purchased their timeshare, a typical couple had full-time jobs. Now retired, income is a fraction of what it was – yet annual maintenance fees inexorably rise….
But the biggest change of all is likely to be the outlook of their children. After 20/30 years of wonderful family holidays, grown up children with families of their own tend to have a very different attitude to holiday-taking.
The ‘conventional’ timeshare resort holiday purchased by their parents is not so attractive to them. Their tastes and aspirations are different.
While timeshare buyers were acquiring an ‘asset’ in perpetuity which they could pass on to their children, there is an increasing number of documented cases where children do not wish to accept a timeshare week as a legacy.
They regard it as an ‘old fashioned’ product and unavoidably tied to an ever-increasing maintenance fee.
Under English Law, the recipient of a substantial legacy from a will cannot easily pick and choose. In other words, a beneficiary could specifically refuse to accept a timeshare week but not if he or she wishes to accept the main legacy included in the will.
If as a result a will’s executor is left with a timeshare week and its associated annual financial obligation, he is obliged to continue to meet that obligation until he can sell the week to another.
Again, the number of documented cases of this kind is increasing markedly."
You can read the full article in the Spring issue of Sharetime Magazine. This can be viewed online HERE
 | |