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Does Timeshare Need A New Act To Attract Millennial Buyers?

Jul. 26, 2016 9:53 PM ETHLT, VAC, WYN, DRII8 Comments
Robert Shaw profile picture
Robert Shaw


  • Timeshare companies have made a dramatic rebound since the recession.
  • However, much of this post-recession growth has been on the backs of existing owners.
  • To sustain growth, timeshare companies need to look to new, younger buyers.
  • Attracting new buyers may require changing how the product is sold and lowering the price of the product.
  • Investors should look for companies focused on reducing marketing and selling costs and introducing innovation.

A number of companies in the timeshare industry are celebrating over three decades of operations and Wyndham Worldwide (NYSE: WYN) recently announced it was celebrating 50 years in the industry.

During that time, the industry, with the exception of 2008 and 2009, has shown consistent year-over-year revenue growth. The industry has clearly had its ups and downs and definitely has its share of likes and dislikes, but no one can argue with the upward growth over an extended period of time.

Source: AIF, State of the Vacation Timeshare Industry-Shared Vacation Ownership, 2016 edition

Since the rescission, the timeshare industry has made a strong rebound and has almost regained its pre-recession revenue levels. However, if you look closely at recent public filings, it appears that this growth may have been largely on the backs of the respective company's existing owner base.

For 2015, Wyndham Worldwide Corporation reported that 68% of its sales were to existing owners. Diamond Resorts International, Inc. (NYSE: DRII) reported that 69% of its sales were to existing owners. Marriott Vacations Worldwide Corporation (NYSE: VAC) reported that 64% were to existing owners and even, soon to be public, Hilton Grand Vacations, currently a part of Hilton Worldwide Holdings (NYSE: HLT), reported that 40% of sales on average over the last 5 years were to existing owners. The American Resort Development Association (ARDA) notes that the average timeshare owner is 51 years of age with the majority in the "baby boomer" generation.

ARDA regularly points out that there are tens of millions of potential timeshare buyers out there. So, if that is the case, then why are the major timeshare companies pressing their existing owner base and not exploring this much broader prospect pool?

Actually, the answer is not surprising, especially for public timeshare companies needing to protect quarterly profit margins.

This article was written by

Robert Shaw profile picture
Robert Shaw is a Senior Finance Executive and licensed Certified Public Accountant (CPA) with experience in a wide variety of business sectors including real estate, hospitality, property management, food service, financial services, health care and insurance with over 30 years of experience in public accounting and private industry. For over 18 years, Robert severed as a finance executive with two large real estate development and hospitality companies in the resort interval ownership industry. Robert is also a Chartered Global Management Accountant (CGMA) and a Fellow of the Life Management Association (FLMI). Robert is also a member of the American Institute of CPAs, the Florida Institute of CPAs and the North Carolina Association of CPAs.

Analyst’s Disclosure: I am/we are long HLT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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