Important issues for a growing timeshare industry

Timeshares—which involve the purchase of the use of resort accommodations for an interval of time—have become a relatively common way for people to vacation. Even so, the industry still has achieved just a 3-percent penetration of U.S. households with incomes over $50,000. A survey of 127 timeshare executives in the United States found that the industry's greatest challenges come from issues involving marketing and the industry's image (e.g., many potential clients still remember the high-pressure tactics that brought the industry into question 20 to 30 years ago). Timeshare developers have formed a trade association to address some of those image issues, but not all companies subscribe to that group. Other marketing issues include the overall cost of sales and marketing—in particular, the cost of developing leads. The process of finding customers is complicated by the fact that the individual states regulate timeshare sales, and a company must be registered in a state to offer timeshares to residents of that state. This matter impedes the use of the internet for timeshare sales. A final important issue is human resources: finding, retaining, and training employees and managers is difficult for timeshare companies (as it is for hotels), partly because they operate in resort areas where labor resources generally are already spread thin.