Timeshare Companies – On Uncertain Ground
Over our years of Branson real estate we’ve seen a lot of timeshare companies come and go. In this market it’s an especially valid concern so be sure to research any timeshare companies very carefully, or alternatively, go with a full real estate purchase like those at Thousand Hills.
Due to the current credit crisis, many Wall Street companies, major banks and finance companies like GE Capital and Textron that formerly offered to purchase or hypothecate the receivable contracts/promissory notes (“Timeshare Notes”) of the Timeshare company Developer are no longer in the market.
This has opened up an opportunity for many new timeshare companies to present borrowing opportunities that will allow Time Share Developers to maintain the operations of their resorts which are heavily dependent on being able to finance Timeshare Notes to generate much needed working capital.You can read more on what has happened in the February 2009 issue of Hotel Magazine which will give you an insight into the “crippling” effect of the credit shortfall on the timeshare industry.
According top ARDA Foundation statistics timeshare sales have continued to grow in the double digits since 2003. United States timeshare sales have increased rapidly from $6.5 billion in 2003, to $10.6 billion in 2007, an increase of 64$ over the 5 year period. The average sales price per interval in 2003 was $15,095 and has increased to $19,216 in 2007. The sales and marketing process used by the timeshare industry is unique as the dollars spent to sell a timeshare interval are significantly more on a percentage basis that those spent to market other large ticket items, for example a new home or car.
According to the 2005 statistics, timeshare companies reported 72.9% of timeshare sales were financed with the remainder of the sales being cashed out within the first ninety days. Of the financed contracts, on the average, the timeshare purchaser made a 15% down payment, financing the balance over an average of 8.7 years at 13.9% interest.
If you’ve decided a timeshare company isn’t the best choice for your Branson real estate, contact Thousand Hills to find out how you can get a hassle free property of your own.
