Timeshare Sales
Hit Record High

Net timeshare sales soared in 2003 as the industry continued to improve its product and shake off years of bad reputation, according to two studies.

A record three million Americans owned timeshares last year, nearly double the number who owned them seven years ago, according to the studies. Net sales of timeshares hit a record $5.5 billion in the U.S. in 2003, up 34% from $4.1 billion in 2002.

"That's a function of having more quality developments, more inventory and more pricing points for people with different-sized wallets," said Scott Berman, a partner in the hospitality consulting group at PricewaterhouseCoopers, which conducted the studies.

The studies, commissioned by the American Resort Development Association, a timeshare trade group, show the industry has become dominated by large companies. Companies with more than $25 million in annual sales account for 94% of all timeshare sales, and public companies account for 20% of sales.

The increasing presence of large companies in the industry -- which has famously had a bad reputation for aggressive sales techniques and the perception that timeshares could cost a lot of money and have low resale values -- has helped it become more efficient with better-quality products, the survey found. A number of big companies have major timeshare interests, including large travel-industry players such as Cendant Corp., Marriott International Inc. and Starwood Hotels & Resorts Worldwide Inc. Even Four Seasons Hotels Inc. has entered the timeshare business.

Despite an ARDA survey finding that timeshares still have a negative reputation -- 31% of people with incomes of $25,000 or more viewed the industry negatively, compared with 27% who viewed it positively -- sales have boomed in the past decade. Since 1996, net timeshare sales have more than doubled -- from $2.2 billion in that year to $5.5 billion in 2003 -- far exceeding the rate of growth in other parts of the travel business.

"It's a sector that has been reborn," Mr. Berman said. "I think we'll continue to see double-digit growth in sales volume."

A timeshare week sold for an average $14,500 in the U.S. in 2003, from about $10,000 a week in 1996, and the average maintenance fee was $385 for each week of use in 2003.

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