May 11, 2012 — Most industry professionals would argue the exchange companies are not archaic, that their services are a critical component to the timeshare sales presentation and that their member benefits enhance the timeshare owner’s vacation experience.
For the most part I would agree. But I would add that the hospitality industry has entered a new era whereby explaining (‘selling’) the exchange aspect of timeshare ownership during the initial sales presentation may be an exercise in futility. Why? Because a diminished value and signature benefit once attributed exclusively to ‘exchanging’ no longer exists.
Before I illustrate my proposition let us briefly look back in time. The historical reality of the hospitality industry, long before timesharing was first introduced, clearly demonstrates that the accommodations available to the general traveling (vacationing) public was pretty much limited to a small cramped hotel/motel room for two with no ‘frills’ (amenities) whatsoever.
For the most part only the affluent could afford larger ‘deluxe suites’ for their travel needs. It stayed that way until the 60’s when the risk-taking timeshare developers came along and began developing properties with fully furnished ‘villas’ that included all the bells & whistles that provided a truly unique vacation lifestyle and travel experience for the vacationing public.
As more timeshare developers and resorts came online the middle class traveling folks and other working stiffs clearly and distinctly embraced vacation ownership including, in time, their ability to exchange their ‘vacation home’ for like accommodations around the world.
The success of timeshare developers during this era did not go without notice by the hotel and motel folks and other hospitality companies, including the ‘Brands’. Some companies joined the timeshare revolution while others simply improved the amenities in their rooms by adding coffee makers, am/fm radios, remote control TV’s, mini-frig, toasters, irons/boards, microwave ovens, etc.
Next the extended stay (vacation) properties, the Corporate Suites properties, the availability of private vacation homes, etc. came to the market the world over and they, too, provided the vacationing public fully furnished accommodations with kitchens, modern amenities, swimming pools, etc. on a daily, weekly or longer basis.
And today, in 2012, vacationers have the ability to rent these accommodations at bargain rates directly from traditional or online travel agencies such as Expedia, Orbitz, etc. as well as from timeshare developers, HOA’s, the exchange companies, private parties and a plethora of online timeshare resale/rental companies.
Which brings me back to my question, primarily from an exchange perspective: Are RCI, II (and the others, too) functionally obsolete and should their programs still be introduced during the initial timeshare sales presentation?
The short answer is the exchange companies’ programs and their associated products, benefits and services, etc. should be ‘presented’ but, in many instances, only on an ‘as-needed’ basis instead of the long-standing practice of telling every single sales guest who attends the presentation about the merits of the exchange company.
And why do I dare say this? Allow me to answer this way. Our industry might well consider, first and foremost, returning to our basic fundamental roots and formula of presenting (selling) the ‘sizzle’, the ‘Dream’ and the pride of ‘vacation home’ ownership, without all the costs associated with full 2nd home ownership!
That approach was obviously successful prior to the introduction of exchanging in the mid 1970’s and in the USA, today, full ownership vacation home sales are brisk. And, unlike prices in the stagnant timeshare and general real estate market, selling prices for vacation-homes are, as are other ‘luxury’ items, products and services, rising, along with their demand!
Let’s face a simple truth that is as factual today as it was generations ago: If money were no object, who wouldn’t want to own a really nice family vacation home in a fine location such as Lake Tahoe, Scottsdale, Maui, Cabo, San Francisco, Bermuda, Spain, Switzerland, Cozumel, France, Italy, Greece, New York, British Columbia, Palm Springs, Aspen, New Orleans and so forth?
In most instances the answer is a lot of people would love to own a vacation home somewhere they really enjoy visiting. And with the exception of Bubba, whose idea of such a luxury is a tent pitched along a river, everyone else would swell with pride letting their friends, family, neighbors and co-workers know that “Yep, we’re off to our vacation home next month in Puerto Vallarta; want to join us Bill and Mary?”
Another issue about ‘pitching’ the Exchange companies during the initial presentation is that reps are also introducing additional costs, responsibilities, obligations and requirements, etc. associated with timeshares.
Doing that violates the old time-tested sales rule to keep it simple during the initial sales presentation and things can become real complicated when the rep has also covered the ‘home’ resort internal exchange policies, ‘sister’ resort programs, etc.
And from a sales guest’s perspective, during the initial presentation the exchange program can be overwhelming and possibly stir in the minds of many prospects the dreaded ‘too good to be true’ syndrome.
For example while the sales rep proudly boasts, “Why Bob and Jane we have thousands of resorts in hundred of countries around the world and all you have to do to make a reservation is…”, many prospects may ultimately come to question, along with the costs and maintenance fees of owning an ‘interval’, what in the world they would do with ‘thousands’ of locations when in reality they’ll only take one or two vacations each year for 10-15 years.
Then there is that percentage of sales guests who are fully aware of the available vacation rental market whereby they can reserve their fully furnished slices of paradise on an as-needed basis without any financial or contractual obligations such as depositing and withdrawing ‘time’, annual dues or advanced exchange fees paid to an ‘exchange’ company.
That awareness and the readily available inventory worldwide is why I assert that, to those sales guests, ‘exchanging’ is a diminished value and a signature benefit once attributed exclusively to ‘trading’ time that no longer exists.
Depending on the resort and its location the elimination of the exchange program from the initial presentation has another benefit and dimension for the reps and developers. By waiting (holding back) and seeing if alternate destination choices are truly important to the prospect, the introduction of the exchange system can be reserved as one of those proverbial silver bullets.
One such projectile would be as a closing tool when, for example, the sales guest asserts they like (aka: are sold on) the idea of owning a family vacation home but having just one place won’t work for them because they have plans to travel to many other places, experience other cultures and want to cruise the Seven Seas, etc.
Those words and comments would be (if handled correctly) music to a seasoned closer’s ears and like a great sports enthusiast who enjoys fishing they’d easily real in their big ‘catch’ of the day!
All I am suggesting is that the ‘cookie cutter’ days and methods of the sales presentation, including the exchange program, is as obsolete as telling (selling) every prospect that when they aren’t vacationing they have options such as:
- You can rent it out and make money;
- You can sell it and get your money back (or more) when you are done traveling;
- And you can pass along your interest to your heirs, who will surely love inheriting the binding and financial contractual obligations and commitments for the rest of their natural lives…
This is the 21st century. Perhaps we need to reassess our sales presentations to fit the realities of today’s market and the traveling public.
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