A better way to sell timeshare (by developers)

[Carolinian]

This thread is not about resales, but about initial developer sales.  We all know the usual routine.  Touts, or sometimes mail pieces or emails get you signed up for a timeshare tour.  Often they do not tell you that it is a sales presentation.  One angle is to say that they just want you to see their property so maybe when you some back you will want to stay there.  You are offered a free gift for attending the tour and usually free transporation to the timeshare and back.  When you get there, it is high pressure, with ''deals'' that you can only have if you buy that day.  Marketing costs in the industry for this approach amount to 60% of what a buyer pays for their timeshare.  The actual product, developer profit, etc. totals only 40%.

With the usual approach, too many buyers are goaded into buying a product that does not really fit their needs, which is sad because there may well be another timeshare product out there that would work well for them.  Or they may be better off vacationing in a different way altogether.

What I want to look at in this thread is the developers who do things in a more customer-friendly and efficient manner.

Two resorts that have developed a much better approach are The Crane in Barbados and One Napali Way in Hawaii.  I have actually gone on site and experienced the sales approach of The Crane (I mostly did so because I wanted to see the resort), and I have read accounts of the way it is done at One Napali Way, which is essentially the same as The Crane.

The Crane has several sections, the oldest part being an old colonial manor house divided into apartments, and then a newer purpose built set of buildings, and finally the newest, Residences at The Crane which is very luxurious.  I had exchanged into a different timeshare in Barbados through RCI, and it was really the old colonial manor house part of The Crane that fascinated me, since I love historic buildings.  I saw their advertising in some tourist oriented publications, and their approach was different from the usual.  They said openly that they had previusly sold with the usual tours based on gifts, and had changed.  BY cutting that out, they had cut their sales expenses in half, and so had cut their prices in half.  Indeed they were about half of the going developer price for similar timeshares around the island.  They gave no gift to come look them over, just a better price, and no pressure on the sale.  I went and had a look and it was just as they said.  I got a chance to see what they had with no pressure to buy.  They were perfectly happy to let me leave and think about it, with absolutely no pressure or incentive to have to decide right then.  They followed up by email and telephone after I had returned home, but again with no pressure,  just inquiring if I had any more questions they could answer.  I did ask about availibility during certain seasons while I was onsite, and the sales rep opened up the sales book while I was there to look, and from the number of weeks already marked sold, it was clear this method worked.  From people who have toured One Napali Way, they operate the same way andseemed to have had good success with it.

The other timeshare developer I want to commend about part of their sales approach is Hapimag.  While I was tempted the last time I was in Budapest to go to their resort on Castle Hill and inquire about purchasing, I have not been through their sales process and do not know if they use gifts, pressure, etc.  What I am aware of, however, is their exit program, which is probably the best in the industry.  Since Hapimag was the originator of timeshare, it is a shame that others have not followed their lead here. Since its incepttion, Hapimag has offered to buy back the timeshares of its members after they have owned a requisite number of years for a set percentage of the then developer price for the same timeshare plan.  Charlie1 mentioned one UK timeshare that takes a similar approach, but I know of no other timeshares that do.

[charlie1]

This is a good thread, developers and Resorts wishing to sell might find some useful areas that they need to take note.

The UK resort I mentioned was Tresco it’s expensive but there is a guaranteed buy back for what you paid. This has been working successfully for years.

I stayed up on the Island of Arran in Scotland last year and the Island sells itself and so does the timeshare Auchrannie This is a great resort certainly one of the best in the UK in terms of standards and catering for all ages.

There is no pressure and you ask to be shown around and they are quite happy to show you there own private resale’s as well as there own weeks for sale.

I have read of other resorts that are not now knocking doors or pestering owners and guests for meetings. They make this a pleasurable holiday and some offer an open morning so they can show you an apartment. However you have to book this!

There have been a few resorts that I don’t have the details to hand but do offer an incentive to talk to them, but you again have to make the approach. This has been done via a return slip within the apartments.

If I owned a resort but this is what I would work towards If I owned a resort, apart from making this a holiday to remember with places to go and things to do. I would start this with a genuine Welcome meeting and not to turn this into a ruse to get you there so you end up in a sales presentation! Get people to enjoy the experience.

1)   This is vital I would ensure that I maintained good contact with my owners and followed this up involving them where I could, as my owners would be sharing pool time with new potential owners and meeting them around the resort restaurant and bar for example. I got to get my owners happy, as they are the best ambassadors of my resort.

2)   There would be contact with my guests before arrival and see if there was anything we could do to make their experience more pleasurable. What interests they may have places to go things to see. I would refer them to our website that ideally should have a list of popular places to go and see.

3)   We would determine any special needs or single people arriving to see how we could make this a special holiday for them.

4)   the apartments would have a DVD or a channel dedicated to my resorts unique selling points and perhaps how their needs could be serviced as an owner. How we have great customer relations and how we can help steer them to an appropriate exchange company based on their holiday style. I would explain how we involve our owners as its all our club and we can all endeavour to make this a real stress free holiday experience.

5)   This would include a few genuine testimonials
 
6)   There would be displayed a percentage of how many of my owners did not exchange last year and what percentage of my owners went abroad and give an example of countries visited. This would illustrate happy owners and good trading for my resort.

7)   I would do my own promotion of my resort and find markets that would be suitable to holiday here, all discussed on past threads. This would target the ideal clients and reduce my costs.

  There would be adequate training of all staff from the maintenance lady to the resort manager to ensure that our guests were welcomed and catered for with a warm smile and a great attitude.

9)  Local attractions including golf courses, boat trips for example would be contacted to see if I could obtain a special discount for my guests while on holiday or perhaps a free soft drink whatever it was. I want my guests to feel that we have gone the extra mile. I want them back again and I want them as owners.

[charlie1]

If you have no personal experiences of a Developer acting in a customer friendly and efficient manner when selling as requested by Carolinian does anyone have any suggestions based upon what you would like to see or change at a Developer resort?

[Carolinian]

Some interesting statistics on developer costs at Wyndham, which were extracted from their financial reports, were posted on another site.

The average receipts for Wyndham for timeshare they sell at US$17K for weeks sold to new buyers and $22K for weeks sold to existing members.  Wyndham sells both every year timeshare weeks and every other year weeks, and the difference in average sale prices may be that new buyers are more likely to  buy every other year weeks than are current members.

More interesting is the breakdown of where the receipts go.  For sales to new buyers, they are:
Construction cost of unit  20%
marketing cost    58%
bad debts    16%
profit   6%

For weeks sold to existing owners, the numbers are a bit different:
Construction cost of unit  20%
marketing cost    32%
bad debts     12%
profit    36%

It looks like even current members often do not follow through on their purchases, given the bad debt numbers.

With the current methods of developer sales, the huge marketing costs mean that there is no possible way the product could hold value at or near its sales price.

 

[charlie1]

Marketing Costs could be reduced if we work with our owners educating them how to use timeshare. Introduce other Independent exchange companies to your membership with an effective learning process. Show them examples and the advantages of bonus weeks and how this could reduce their overall maintenance cost with the savings you can make in holiday accommodation. (especially in the country of your residency) We need happy owners to make this work.

The next step is to get the owners involved and how they can support their resort. This is not about just putting out information its creating a connection and getting members involved. Those that respond with a little enthusiasm, why not see if you can create a sub committee reporting to the chairman or whoever is responsible. They don't need to even physically get together in this day and age they can skpe. Determine who is the natural leader and get them to head this up. Pilot this say for six months only and see what changes you need to consider and change the group or set a new focus.

The most undervalued resource that a resort has is the experience of your membership not utilised! A well co-ordinated group with experience and a sense of purpose can bring about a number of ideas that could provide a solution to most resort problems. Where theres a will theres a way

Your owners are your best ambassadors if we have happy owners that are incentivised to introduce family and friends to stay at your resort at preferential rates than you will introduce new members at lower marketing costs.

Some interesting statistics on developer costs at Wyndham, which were extracted from their financial reports, were posted on another site.

The average receipts for Wyndham for timeshare they sell at US$17K for weeks sold to new buyers and $22K for weeks sold to existing members.  Wyndham sells both every year timeshare weeks and every other year weeks, and the difference in average sale prices may be that new buyers are more likely to  buy every other year weeks than are current members.

More interesting is the breakdown of where the receipts go.  For sales to new buyers, they are:
Construction cost of unit  20%
marketing cost    58%
bad debts    16%
profit   6%

For weeks sold to existing owners, the numbers are a bit different:
Construction cost of unit  20%
marketing cost    32%
bad debts     12%
profit    36%

It looks like even current members often do not follow through on their purchases, given the bad debt numbers.

With the current methods of developer sales, the huge marketing costs mean that there is no possible way the product could hold value at or near its sales price.

[charlie1]

Hi Carolinian

Was there a breakdown in the marketing costs?

Some interesting statistics on developer costs at Wyndham, which were extracted from their financial reports, were posted on another site.

The average receipts for Wyndham for timeshare they sell at US$17K for weeks sold to new buyers and $22K for weeks sold to existing members.  Wyndham sells both every year timeshare weeks and every other year weeks, and the difference in average sale prices may be that new buyers are more likely to  buy every other year weeks than are current members.

More interesting is the breakdown of where the receipts go.  For sales to new buyers, they are:
Construction cost of unit  20%
marketing cost    58%
bad debts    16%
profit   6%

For weeks sold to existing owners, the numbers are a bit different:
Construction cost of unit  20%
marketing cost    32%
bad debts     12%
profit    36%

It looks like even current members often do not follow through on their purchases, given the bad debt numbers.

With the current methods of developer sales, the huge marketing costs mean that there is no possible way the product could hold value at or near its sales price.

[Carolinian]

Hi Carolinian

Was there a breakdown in the marketing costs?

There may well have been in the original documents, but not in the numbers extracted and published at TUG.