October 23, 2015 — Unbeknownst to most readers of my weekly column in InsideTheGate.Com (ITG) during the past 6 + years, for more than a decade I’ve written articles for other publications including timeshare-related websites and blogs. And in those forums, like here, I’m often scoffed at by those working within the timeshare industry even though my perspectives are based on objective evidence. As such, this week I’m updating what I’ve been cautioning our fantastic industry about for a few years now – and how sales will once again likely plummet dramatically at most timeshare sales centers worldwide.
So Here’s The Scoop: First, in August of 2005 under one of my nom de plumes and writing for a widely circulated vacation ownership publication with millions of readers I wrote, in part: “And how will timeshare developers, their management, marketing and sales people including ancillary businesses as well as TS owners be affected by, or adjust to, the looming burst of the real estate bubble that many notable economists are predicting is imminent?”
OMG, the responses I received back then to my column and the follow up posts from actual timeshares developers, executive mananagment and a lot of ‘closers’ was that I was insane, that I had surely lost my mind! My favorite ones were “…and besides, the timeshare industry is not susceptible to economic problems. Even when the economy gets tough and inflation rears its head we always have and will continue to excel.”
In that column back in 2005 I added that “Many economists are suggesting that what happened during the Dot Com (high tech) crash in the 1990’s is going to happen again, but this time it will happen to real estate markets.”
More comments and e-mails poured in telling me what a bad person I was for trying to scare the bejeezus out of timeshare owners and the industry in general, adding that I was writing for a “rag” and that my opinions could not be trusted so I should “…do us all a favor and keep your ignorant radical thoughts to yourself and just go away.”
Now remember, I wrote all that back in August of 2005 and included warnings of widespread mortgage fraud, how speculators had jumped into the ‘market’ and by flipping homes they were driving real estate prices up to unsustainable levels.
I also noted that those very speculators were quickly divesting themselves of their own real estate assets and were setting up ‘vulture funds’ so when the crash arrived they’d then be set to swoop in and buy low at very depressed prices.
Even developers who I had participated with in various business ventures back then thought I was nuts and other developers who were advertising clients of that ‘rag’ called for my head while others pulled their advertising campaigns because of my ramblings in that article.
It was vicious, to put it mildly.
And indeed, that ‘rag’ decided they no longer wanted my services. Then late 2007 rolled around and the proverbial you know what hit the fan and sales in our industry dropped almost overnight from an estimated $10.6 Billion annually that year to an estimated (by ‘some’) $5 Billion annually soon thereafter.
Thousands of timeshare reps (marketing/sales) lost their livelihoods and careers, including management and those at the executive level; many who had those cushy well paying gigs and were living the ‘good life’ off the fat of the land, so to speak, found themselves scrambling for a new income source.
Back then many independent developers forever closed their marketing and sales centers around the world and some sold out their companies to the ‘Big’ developers who had the resources to ride out the worst worldwide financial calamity since the Great Depression hit when Wall Street crashed on “Black Tuesday”, October 29th, 1929.
During that recent crash it was so bad within our own industry that a group of timeshare developers actually sought relief from the U.S. Federal Government, pleading for their own “bailout” perhaps thinking, they, too, were “too big to fail”.
Their request, however, fell on deaf ears and to date (2015), based on facts, I could make the case that the 2007 ‘crash’ has collectively cost developers around the world well over $50 Billion in lost revenue they would have otherwise generated had the global financial crisis not occurred in the first place.
So here we are today with sales volume slowing increasing each year, which is fantastic and I’m all down with that. However I’m here today to caution developers everywhere that there is another crisis in the works and it has already begun. Yet, unlike the 1929 or 2007 crash this newest one is eating away like a slow and lethal cancer of which its totality will likely not be seen until it is way too late.
And when that hits full on, IMPO, that famous large lady known for singing will have bellowed out her final tune and the vacation timeshare ownership/membership industry as we know it today will be all but a faint memory forever buried in the dark annals of history.
So what is this crisis that very well may create the demise of our 50 + year history and industry you ask? And no, it’s not the ‘resale’ issue, it’s not the ‘scammers’, it’s not all the negative publicity easily available online nor is it antiquated marketing and selling tactics, etc.
It’s none of the known ‘stuff’ but I will tell all readers today that with 30 plus years under my belt in all aspects of timeshare management, training, sales and marketing – this crisis is and will continue to be on those magical little round tables.
And even though it’s happening today in most sales centers around the world the best managers and closers out there don’t see it and aren’t prepared for it – and quite honestly, developers aren’t training them to handle this crisis as it grows exponentially over the coming years.
So check back often and maybe, before it is too late, I’ll publish another article on this crisis and reveal the culprit behind the ‘cancer’ – and maybe, just maybe, as I did back in August of 2005, I’ll demonstrate how any developer can prepare for the inevitable and avoid total annihilation.
Good Luck Out There
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