Timeshare Giants predict future of the industry
You may have heard that some of the largest timeshare companies are making moves to protect the industry and lead the way in the future of hospitality. Forging on through the Coronavirus Pandemic and looking to secure the market for growth and future sales, Hilton Grand Vacations has purchased Diamond Resorts. The $1.4 billion deal means Hilton has acquired an additional 92 leisure resorts in 20 new markets.
HGV’s portfolio currently consists of 62 luxury resorts with over 350,000 owners. After the acquisition, the portfolio will include 152 resorts with roughly 731,000 owners. What is interesting and noteworthy about the transaction is that it clearly displays HGV’s move to corner the market and diversify into new price ranges. Currently there is a sharp price difference between Diamond and HGV’s buy in costs for customers. HGV’s average prices are around £50,000 whilst Diamond starts at around £25,000. It means HGV will have a portfolio of new members from a wider variety of price ranges. Up until now HGV has mainly focused on high-end holiday offerings so by offering lower price memberships, they will be able to attract more customers to their membership programs.
Whys is this interesting? Well just when you might have been forgiven for thinking the timeshare industry is dying away quietly, it shows that these big resorts are putting their money where their mouths are and investing in the future. And these decisions are not made lightly, it will come after extensive market analysis which provides them with a good indication of where the hospitality industry is heading. HGV have clearly shown their confidence in the recovery of the industry in emerging from the aftermath of a global pandemic and are looking to secure their future as the number one holiday club membership provider. They have also taken into consideration the changing face of holidaymakers and the changing trends in travel. Looking at the demographics of it all the vast majority of travellers for the past several decades has been made up of baby boomers and Generation x, whereas now the younger generations financially mature the industry needs to adapt and to attract the next generation of travellers looking to spend their vacation time somewhere new and interesting. Because of this we have seen many of the industry leaders make similar moves to expand their portfolio and change the way memberships work. Timeshare seems to be a thing of the past, but the concept is very much alive. It has just evolved into membership programs, which as just as expensive and just as legally binding.
It is a smart move for the industry to move away from the word Timeshare altogether but what they have replaced it with may be even worse for the consumer. Existing owners will be moved onto points-based schemes, whether they like it or not. This gives the resort another opportunity to sell more points. Once they buy the points they are locked in, just like a timeshare. The resort gets that money year after year in the way of maintenance fees. So, although the industry is moving away from the label timeshare, the concept is very much the same.
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