The Key to Understanding the Timeshare Resale Market: Demand
by Doug Milbrath, CEO

In my experience, very few timeshare owners who want to sell are aware of the single most important factor affecting their ability to do so: demand. Without demand for the specific timeshare ownership you are selling, the supply of available resales is irrelevant. More to the point, the demand must be pre-existing: desire on the part of a buyer to own what you have is an absolute prerequisite for the sale of your timeshare to occur. Given how important demand is to the process, potential sellers should understand where the demand for resales originates, and how to independently assess demand for their specific timeshare property. Armed with this information, consumers will be able to make a smart choice when deciding whether or not to enter the resale market.

You Didn't Wake Up Wanting One

Timeshare, at least as it currently exists, is sold in a very specific way. If you own a timeshare, you did not wake up on the day of your first purchase wanting one. Whether your preconceptions about the concept were positive, negative, or neutral, it was the timeshare presentation itself that formally introduced you to timeshare ownership and created a desire on your part to become an owner. Attending the tour created the desire to buy, as it does for about 20% of the families who take one. How many of those families actually do buy that day is largely a function of how effective the resort's sales team is. It is a well-known fact in the industry that some percentage of those families who want to buy end up leaving without doing so, for myriad reasons.

Unpacking some of the information in the last paragraph, there are a few conclusions that can be easily drawn:

1. If your resort is still conducting timeshare presentations and selling ownerships similar to yours, some percentage of those in attendance will leave the resort with a desire to buy the timeshare you want to sell. Furthermore, those consumers who bought from the resort on tour have a strong financial incentive to shop online for a better price while still able to cancel their initial purchase.

2. If your resort is no longer conducting timeshare presentations and selling ownerships similar to yours, there is unlikely to be any demand for your timeshare on the resale market. While there are exceptions to every rule, most owners in this situation are better off working with their HOA to determine an exit strategy.

3. At the present time, all of the demand for timeshares is created by, and at the expense of, the resort developer. If you succeed in selling your timeshare on the resale market, you will do so, at least in part, at the expense of your resort.

4. Timeshare Resale Companies have no role in creating demand for the timeshares they advertise for sale. (Any company claiming otherwise should be a real red flag to consumers.) When effective, timeshare resale companies like Bay Tree Solutions provide your timeshare property with exposure to those consumers who have already been convinced to purchase by your resort and are now shopping online.

The Goldilocks Effect

Given the dynamics of the marketplace, too much demand for timeshare resales would be destructive, as your resort cannot afford to lose very many buyers to the resale market without shutting down its sales line. Too little demand is likewise a problem for owners who want to sell their timeshares in a timely fashion. Just like Goldilocks wanted the porridge temperature just right, demand for timeshare resales must exist at just the right level for the market to function. Fortunately, our data shows that only a very small percentage of timeshare owners (like low single digits) are motivated enough to sell to take action. As it happens, this is just about enough supply to meet the demand from price-conscious buyers who would have never paid retail at the resort anyway. Miriam-Webster defines Win-Win as a situation "advantageous or satisfactory to all parties involved;" making present levels of supply and demand on the resale market a "textbook" example.