Quote:
Originally Posted by Theo
I am not disputing the statement, but I am curious to know how/where you have come to obtain and cite "50% or more of the original purchase cost to marketing and other lost expenses".
You might very well be correct and I am not (and do not claim to be) in any position to dispute the statement. I would just like to know where the claim originates and/or what backs it up.......
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That number has been pulled from financial reports of some publicly traded companies where timeshare sales info can be extracted from the financial. You will probably also get a similar number if you take a unit at a typical timeshare project, project what the developers gross revenue would be for selling the units, then compare that with what the unit would sell for if it were whole ownership.
For example, consider a developer building ocean front condos in Hawaii that would sell for $1,000,000 each average in whole ownership. If a developer markets that as timeshare, the developer will sell 50 slices of each condo for about $40,000 each, grossing about twice as much as if the project proceeded as whole ownership. The end returns on the project aren't that different - if they returns were significantly greater in TS developers would build more timeshares instead of whole ownerships. So much of the difference goes to marketing and lost costs.
There are also some timeshare projects that have eschewed the traditional marketing practices, and their sales prices have been about one-third to one-half of developer pricing for similar units in the area.
Obviously a developer who can sell timeshares for less cost is going to find the market much more profitable. Conversely, a developer who looks at the timeshare market but doesn't know how to set up and run a TS marketing organization will take a beating.
