History of Timeshares
The Timeshare History spans the last 50 years, starting in the early 1960's during an era of exponential growth and development in the tourism industry. Commercial air travel was becoming more and more a necessity and timeshare was conceived at the height of this travel boom, with France and Switzerland hosting the first two companies to offer a vacation ownership program.
The Swiss company considered responsible for the birth of timeshare was Hapimag; they were founded in September, 1963 in Baar, Switzerland by Alexander Nette and his associate Guido Fenngli. Shortly after the company's formation, Nette and Fenngli began buying resort properties in Spain, Italy and Switzerland. Hapimag offered a membership instead of an ownership, through an extensive resort network on a right-to-use basis instead of deeded ownership. Hapimag is still successful today and has retained its independence from the larger branded hospitality companies.
A French company, The Société des Grands Travaux de Marseille, began to offer a timeshare program between 1964-1968 at SuperDevoluy, their ski resort based in the French Alps. Paul Doumier was creator of their famous slogan, "No need to rent the room; buy the hotel, it's cheaper!", and customers were drawn in by the thousands. Business was good.
Timeshare Begins In The U.S.
Parallel to what was happening in Europe was the development of the first timeshare in the United States, a hotel-condo complex known as the Hilton Hale Kaanapali on the island of Maui, Hawaii. Groundbreaking took place in October, 1965, four years before the first non-hotel timeshare was introduced by Vacation Internationale.
That was in 1969, when Vacation Internationale founders Bob Burns and Bob Ringenburg began selling timeshare weeks in forty year increments on a leasehold basis at Kauai Kailani on the Hawaiian island of Kauai. Vacation Internationale also introduced the first points program in the U.S. in 1974. This program was a breakthrough at the time which offered vacationers tremendous flexibility and choices, and garnered great publicity for the industry.
Innisfree Companies of California was the first proprietor of deeded ownership timeshares in the United States. Working with the Hyatt company, Innisfree's first development was opened in 1973 at Brockway Springs in Lake Tahoe, California. This was the first resort which reportedly used the word 'timeshare' to describe vacation time purchased from a resort. A group of developers including Carl Berry, Greg Bright, Paul Grey, Dave Irmer, and Doug Murdock, are credited with originating the term "timeshare". Prior to its usage in the vacation industry, 'timeshare' was used to describe the shared usage of a mainframe computer among many people. The developers believed this term would paint a better picture, allowing buyers to more easily grasp the vacation ownership concept and buy more timeshare. The word timeshare was used with many bankers already familiar with the term; it was filed on the paperwork submitted to the California Department of Real Estate which made it popular on a state level, and used in various promotional materials. Timeshare was now a household name.
Florida was on California's heels and, in 1974, entered the timeshare industry with the creation of Hawk's Nest of Marathon in the Florida Keys and Sanibel Beach Club on Sanibel Island, Florida. These resorts established the development model which has been used for nearly 40 years, as they were the first resorts to be marketed, sold out and turned over by the developers to their owners' associations. Sanibel Beach Club was considered the first purpose-built timeshare ownership resort in North America, without a component of a converted condominium, hotel or motel.
Timeshare Exchange Is Introduced
The concept of timeshare exchange was introduced in 1974 when Resorts Condominiums International (RCI) was founded in Indianapolis, Indiana. Since its creation, it has become the largest timeshare exchange company in the world, with nearly four million members worldwide. RCI offers exchanges in over 100 countries, with an office on almost every continent in the world. The exchange power offered by RCI was never before seen in the industry and truly made timeshare a global vacation option, with owners able to stay in accommodation beyond their ownership network.
RCI's success was followed by the launch of Interval International (II) in 1976, with II growing to nearly two million members. The two companies continue to be the predominant exchange companies in the world, followed closely by Australia-based Dial An Exchange and its 500,000 members.
The 1980's bore witness to increased development and sales of timeshare programs. Marketing for these properties went up ten-fold and timeshare was advertised to consumers ranging from the budget-oriented to the affluent. Consumers saw the promise of more vacations in more exotic locations than ever before, and the budget-oriented traveler saw an opportunity for more affordable vacations at destinations to which they were already traveling.
Still, the industry primarily consisted of smaller, independent operators who would often develop resorts in an ad-hoc manner. Many resorts at this time were built by real estate developers who were not as in tune with the nuances of the hospitality industry as their traditional hotel counterparts.
Here Come The Brands
Marriott saw this as an opportunity to not only tap into the growing demand for timeshare products but also inject a level of credibility that hadn't existed prior to their entry into the industry. Always a trusted and quality hotel brand, Marriott established Marriott Ownership Resorts, Inc. in 1984 and instantly established a great deal of credibility to the industry.
The early 1990's saw ownership grow to four million timeshare owners worldwide, at over 2,300 time-sharing facilities across the globe. Timeshare was still expanding into new regions by leaps and bounds, and growing even at already popular timeshare destinations. Major hotel brands besides Marriott became interested in the lucrative potential of the timeshare industry and decided to enter into timeshare. Sheraton, Ramada, Hilton, Disney, Four Seasons, Ritz-Carlton, Radisson and Westin all began offering timeshare properties during the 1990s. This solidified the credibility Marriott had already created and boosted consumer confidence, with timeshare sales reaching new record highs.
By 2000, timeshare had entered its fourth decade of sales in the United States, and owners had issues with trying to sell their ownership stakes after years of enjoyment. Timeshare resales had been discouraged by the majority of the resorts, many of whom were still in active sales and saw the resale market as a threat to their sales figures. The secondary market primarily consisted of smaller, local real estate brokers who would use traditional real estate techniques to sell timeshare. The problem was that most timeshare buyers didn't purchase the product through real estate channels as they were still being introduced to the product by resort marketing programs.
The Internet, and Google, Came Along
It was at this time that the Internet began to change the way consumers researched information, and Google was in the midst of completely revolutionizing global commerce. Against this backdrop, BuyATimeshare.com opened its doors, offering owners the opportunity to find a buyer or renter for a timeshare they no longer wanted or needed. At the same time, the company helped to create a resale market based on the market forces of supply and demand - with a more affordable timeshare product on offer than the primary retail market available through the resorts. The transparency of the Internet made valuable information available for first-time buyers or renters, and helped buyers and sellers alike reach an informed and educated decision regarding their current or future property.
The Internet also provided more marketing opportunities for resorts, as they began to migrate away from traditional marketing techniques such as direct mail to embrace web and email marketing. The implementation of federal Do Not Call laws in 2004 created significant issues for telemarketing outreach, which also impacted timeshare companies. However, timeshare is a very resourceful industry and programs were created to allow for continued phone marketing of the product.
The new millennium saw sales and resort growth never before seen in the timeshare industry, with new brands such as Wyndham Vacation Ownership becoming major players. Nearly every leading hospitality company in the world was building new resorts and growing their membership base, with the expanded use of points products (made popular by Disney Vacation Club in the 1990s) taking hold in one form or another throughout the industry. Hospitality brands were linking their hotel rewards programs to timeshare products, allowing timeshare owners the ability to travel globally throughout a brand's hotel network, plus tapping into cruises and other vacation products. The late 2000s were heady days for the industry, with the industry generating $10.6 billion in new sales in the U.S. during 2007 with 8,000 new units added to existing inventory. Then came 2008.
The timeshare industry was well on its way to another record year for growth when the economic collapse hit in October, 2008. As with just about every industry, jobs were lost, sales dropped and companies went into freeze-mode. 2008 U.S. sales were $9.7 billion but the majority of those sales were made in the first three quarters of the year. With the credit markets locked up, resorts ceased building and many intentionally scaled back sales because resorts could not offer loans to potential buyers for the product.
U.S. sales fell to $6.3 billion in 2009 as the industry braced for the lack of travelers due to the effects of the recession. Gradually, those travelers started taking vacations again as tourism rebounded quicker than most industries - with many tourism destinations reporting solid growth numbers by 2011.
The economic downturn forced the industry to tighten its collective belt, streamlining processes and coming up with new ways to grow the bottom line. One of these methods was introduced by Wyndham in 2010 as a Fee for Service sales model - allowing Wyndham to take over the sales and marketing activities of Reunion Resort in Orlando in exchange for a revenue share agreement and inclusion of the resort into the Wyndham network as a rebranded Wyndham resort. Bluegreen would later adopt this method, which allows for growth within the brands but without the cost of new construction.
Another effect of the recession could be seen in the growth of the timeshare resale market. With consumers more budget conscious than ever, online timeshare resale companies provided transparency to the industry and allowed buyers the option to save money by buying on the secondary market. According to the figures from the American Resort Development Association, the timeshare industry trade association, resales grew from 17 percent of new timeshare sales in 2010 to 32 percent in 2012 - an impressive growth of market share and proof that the resale market is now a legitimate sector of the industry.
The industry has now rebounded to stronger footing, with U.S. sales in 2012 standing at $6.9 billion and up six percent from the previous year. The global timeshare industry now consists of 5,300 resorts in 108 countries with an estimated 20 million families owning at least one timeshare product. About 1,400 new timeshare units are planned to be built in the U.S. in 2013, but the real growth is expected in 2014 as an estimated 7,900 new units are scheduled to open in places such as Hawaii and Las Vegas â€¦ two tried and true markets of the timeshare industry.
See the History of Timeshare Resorts
The History of Timeshares
Marriott Timeshare History
Disney Timeshare History
Divi Timeshare History
Hyatt Timeshare History
Hilton Timeshare History
Worldmark Timeshare History
Wyndham Timeshare History
Westgate Timeshare History