How Timeshares Can Thrive in an Unstable Time
Unlike disco, timeshares managed to survive the 1970s. But with time, advances in technology and an overall cultural shift, the timeshare industry now faces many new obstacles.
The primary problem facing timeshares is the generational differences between baby boomers and millennials. In the ‘70s, the idea of owning a piece of a vacation property seemed like a very lucrative investment. This attracted middle and working class baby boomers, turning timeshares into a billion dollar industry.
Despite vast amounts of success, this did not impede the competition. In addition to the competitive forces brought on by hotels and resorts, yet another force has been thrown into the mix: Airbnb. This innovative application connects travelers and vacationers to locals willing to rent out their property for a fraction of the cost of a hotel.
Airbnb has redefined the way people view vacationing, and its cost effectiveness has made it very attractive to millennial consumers. Thus, the timeshare industry and the world of owning vacation property is being forced to adapt.
The Current State of the Timeshare Industry
Despite the growing competition, the timeshare industry as a whole is doing quite well. With many baby boomers in retirement, a lot of their buying power has been invested into vacation property. Timeshare companies, such as Wyndham, have seen an influx in revenue and a near 400% stock increase over the last few years.
The idea of owning property is a deeply ingrained value within boomers. Having a tangible asset that can be passed down from generation to generation holds a lot of weight in the hearts of this generation.
At the end of the day, they just want to leave their legacy.
Short-term Success, Long-term Problems
The success of the timeshare industry is attributed to the personal sell. An attractive, charismatic salesperson could often close a sale through a hyperbolic pitch, making a timeshare property seem more pragmatic than it actually is. Millennials have become well accustomed to this kind of technique because they grew up being consistently targeted by advertisers, and can see through the silver lining of sales pitches. Instead, they seek affirmation from social media platforms, such as Facebook, when purchasing a product.
The most difficult part is that the next generation simply doesn’t care that much about owning property. Fewer and fewer millennials are owning houses, getting married and having kids. Many values that baby boomers possess have not been passed down to their millennial counterparts. Unfortunately, this does not bode well for the timeshare industry and the classic personal sell is not going to keep the next generation invested unless something changes.
Adapting to Survive
In the short term, the timeshare industry will continue to thrive as the second largest generation is still very responsive to their marketing tactics. But how long will they be able to ride this wave?
The best way for this industry to begin evolving is by making timeshares both affordable and resalable. Both generations would agree that having the ability to resell their property at cost or for a small profit makes this investment opportunity exponentially more attractive.
Millennials like convenience and simple processes. If a timeshare company were to create a phone app or a website that connects with potential buyers without having to go through an arduous sales pitch, it would be an incremental step in getting ahead of the competition. What attracts many travelers to apps, like Airbnb, is the fact that it’s cheap, easy to use and you can book a place to stay on the fly.
Putting timeshares in an open market would not only drive down prices, but will also increase their resale ability. If this billion dollar industry wants to remain afloat, they need cater to the needs of both baby boomers and millennials alike.