January 27, 2017 — In the Resort Owners Coalition (ROC) section of the American Resort Development Association (ARDA) website it states that in 2015 the timeshare industry concluded “six straight years of growth with sales up nine percent” bringing that year’s sales volume in the U.S. to $8.6 Billion. That is fantastic news and the U.S. timeshare industry is to be applauded. On the other hand I’ve been crunching some unpublished numbers that lead me to question the overall general well being of the U.S. timeshare industry.
So Here’s The Scoop: In the ROC section ARDA has a link to an ‘infographic’ that claims the average sales price that year was “$22,240” and though I didn’t find any closing ratios (CR) published therein, recent PR’s from some timeshare developers seem to indicate the average U.S. net CR might be around 16.5% (+ -).
If those CR’s are correct then in 2015 a whopping 2,343,575 “qualified” sales guests attended a timeshare presentation somewhere in the USA and among those attendees about 386,690 of them became owners/members in 2015.
And if the reported numbers from ARDA are correct that also suggests that in the U.S.A. the average VPG (value per guest) was about $3,670; which I find a tad hard to accept. Notwithstanding my opinion those numbers also reveal that among the total number of costly “qualified” sales guests who attended a full timeshare sales presentation about 1,956,886 (million) of them said – NO THANKS!
Which begs at least one question about the ‘Not Today’ crowd and that is as an industry did we not collectively miss a couple of deals among them and if we did and if that was only 10% of those ‘No Thank You’ peeps – would that not equal nearly 200,000 missed ‘deals’ representing a contract (loss) value of $4,350,000,000 (Billion)?
As always, check my ciphering, but using that 10% factor would not that same loss have occurred during the previous 3 years and did not the loss repeat in 2016 and perhaps again in 2017 and 2018, bringing the total loss incurred during those 7 brief years by U.S. developers to around $31,000,000,000 (Billion)?
Plus when you add to the mix all the additional losses in interest payments, closing costs, annual maintenance fees, etc. and all the future (e.g.) upgrades that would have resulted down the road had that ‘10%’ been sold – I’m guessing here – but wouldn’t the total loss during that period more likely be in the $35 Billion neighborhood?
Of course that’s a collective loss. And if I’ve learned anything over the past few decades it’s that the only thing that really matters, the one thing that trumps all else in the Land of Time and does so on a daily basis is each individual developer’s ‘how’d we do today’ report?
And that is okay as developers are surely happy little campers but while patting themselves on the back and using that “$8.6 Billion” in sales reported by ARDA for 2015 – combined with the 7 year collective loss I presented – U.S. developers’ may have sold around $60 (+ -) Billion during those 7 years – but they surely could have sold another $35 Billion (+ -) without one additional dime in upfront marketing costs.
Now I don’t want this to get around but I’ve never believed many of the reported numbers from ARDA (and others). And I question the STATS because, IMO, they are ambiguous and often leave more questions than the published findings’ answers.
That and other than publicly held TS companies that are required by law to file and report their STATS most other developers try to keep that kind of info hidden from prying eyes and should they release their confidential statistics it is often privately to (e.g.) secure funding, etc. and done so on a need-to-know basis only.
Otherwise, most developers usually hold their STATS close to their chest. Sort of like they would if playing the last high-stakes hand in a winner take all poker game with a stranger only known as ‘Slick’ — an unshaven cigar-chewing whiskey-guzzling foul-mouthed hombre with a poorly healed scar running down his face to his jugular and wearing a blood stained patch to cover a recent injury to his left eye from a recent late Sunday night bar fight during his last vacation in Bangkok.
As for any cause and effect creating those massive losses and the general well being of the U.S. timeshare industry, either individually or collectively including any possible antidote to immediately reduce the trouncing while increasing net sales, I’ll leave that for others far more enlightened and qualified than I to unravel.
What I will say though is if any developer’s team is meeting/greeting (e.g.) 20 “qualified” sales guests each day & yielding at or below a net 20% closing ratio – and if said developer doesn’t think they missed a deal or two out of the remaining 16 sales guests who said ‘No-No’ (every single day) then that developer is either blissfully uninformed – or flat out sadly mistaken.
Or, maybe increased revenue and lower marketing costs is meaningless to them and besides its only money anyway. Perhaps they simply follow the business marketing and selling principle of – Oh well, to bad, so bad – NEXT!
Good Luck Out There
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