Ask RedWeek / November, 2020

Time to travel again, or take a different kind of vacation?

I'm a timeshare owner experiencing pandemic fatigue, anxious to resume travel. I have friends who are flying to their timeshare in the Caribbean, but I'm not sure I'm ready for that yet. Are people really traveling to timeshares again? Are there other alternatives that could work for family adventures into next year?

Yes, pandemic fatigue is a real thing, and most people would admit they are very anxious to resume normal activities and travel. And yes, travel is on the rise again, but not back to "normal" levels, and there are shifts in the way people are traveling now.

Looking at rental booking trends at RedWeek, combined with research and interviews with travel industry leaders, here is what we're seeing:

Timeshare Owners and Pre-Paid Accommodations

Timeshare owners are one of the most resilient and determined groups of travelers in the country. Thanks to having prepaid their 2020 trips through maintenance fees, they are eager to travel and book trips to warm weather destinations for the holidays. Bookings are up across the board in the continental US, particularly for drive-to destinations, and have recently surged in Hawaii after implemented mandatory pre-flight COVID testing as an alternative to its 14-day quarantine requirement that had been the only option for more than six months. Timeshare rentals tracked by RedWeek are also rebounding as renters book holiday vacations in Aruba, Florida, California, and Hawaii.

"Reservations are picking up, but there's still a portion of our base that does not have the means, the desire or finances to travel," said Jason Gamel, CEO of the American Resort Development Association, a Washington DC-based trade association that represents the US timeshare industry.

"We've been able to manage ourselves through this crisis. With timeshare, with prepaid expenses (covered by maintenance fees), the money is there for your resort to operate," said Gamel, who remains cautiously optimistic about a near-term rebound in timeshare travel. "Year after year, the timeshare industry has always come through the other side (of challenges) very well."

Timeshare owners who own the more exotic locations, or don't feel it's wise for them to travel are either banking their weeks or renting out their units until a safe vaccine is available.

Air Travel Still Hasn't Recovered

Airlines, with trips down 70 percent from 2019, are actively seeking another $25 billion bailout from Congress to avoid laying off workers through next March. American and United Airlines have already announced 32,000 workers will be furloughed unless Congress comes up with more money. At the same time, airlines and hotel companies, and some timeshare developers, are offering unprecedented discounts to get people back on the road.

Cruises Are Dead for Now, RV Industry Booming

The $114 billion recreational vehicle industry is booming, while the cruise industry, in contrast, is dead in the water for the foreseeable future. RV users, whose demographic profile strongly resembles the core ownership of timeshares, are hitting the road in record numbers so they can maintain control of their environments and create "safer" vacations for their families. RV manufacturers, meanwhile, are scrambling to restock their lots — and loading up new rigs with the latest technology to enable buyers to work on the road and, if applicable, enable their kids to do schoolwork, virtually, from their RV. Rentals for RVs are also surging. Campgrounds were running at max capacity in the summer and fall, so plan ahead if that's in your future for 2021.

Timeshares and RV Trips Can Coexist During the Pandemic

Timeshare companies have previously investigated the possibility of providing RV options for owners, but for many reasons, the economics did not pan out. Now, with COVID changing all the financial equations for companies, the possibility of an RV-Timeshare industry partnership is back on table. Wyndham is the only company that already provides RV exchanges for owners, but it only applies to Club Wyndham South Pacific, which offers motorhome vacations in Australia and New Zealand.

In the U.S., timeshare companies are watching current and potential customers buy or rent RVs as traditional owners shun airline trips for closer-to-home vacations. Florida, which is the center of the timeshare universe and No. 2 in RV activity (California is No. 1). Easy to imagine an RV owner steering through a road trip that takes the family from one Florida or California timeshare resort to another, with stops at Walmart to replenish supplies. Walmart, a major partner for the RV industry for years, also offers free parking for RVs, saving owners $40 per night in campground fees.

RVs come in all shapes and sizes, with 13 different segments ranging in price from a $5,000 entry-level trailer to a $1 million motorized bus-home. Nearly 90 percent of all RV sales go for towable trailers that can be parked, and unhitched, at the owner's convenience.

"We shut down for six to eight weeks in the spring, but as soon as the states started reopening, people flocked to RV dealerships to buy RVs so they could get out of the house," said Monika Geraci, spokeswoman for the Recreational Vehicle Industry Association, based in Reston, VA. "Now in the fall, we're seeing a second wave of travelers, including professionals, who are working remotely, doing it from an RV. Some of those people have children who are also doing school remotely."

The industry's economics are compelling.

The RVIA represents 400 manufacturers and suppliers who make 98 percent of all RVs in the US and 60 percent worldwide. Eleven million households own RVs, compared to 10 million that own timeshares. The typical owner is a married man, 48, who makes $62,000 per year, owns his home and spends 3-4 weeks on the road in his RV. New sales are being driven by a surge of Millennials who are first-time buyers. More than 11 percent of all US households headed by adults ages 35 to 54 own an RV, the RVIA says. Shipments in August surpassed 2019 sales by 17.3 percent. Year-to-year shipments are expected to rise to 424,400 units in 2020, a 4.5 percent increase from 2019. The forecast for 2021 is even better, with shipments reaching an estimated 507,200 RVs in 2021 — a whopping 19.5 percent increase.

The timeshare industry, in contrast, is on the verge of suffering its worst year in a decade, thanks to a COVID-shutdown that has shuttered resorts and curtailed sales operations — with more interruptions possibly to come. And it can no longer offer popular cruises to owners, at least for the time being.

To be sure, RVs don't offer the same kind of trip as an all-inclusive timeshare cruise where meals, lodging, and entertainment are provided. With an RV, someone has to drive it, gas it, and do maintenance on the fly, plus deal with all of the parental issues involved in a free-wheeling outdoor family camping experience. Bottom line, timeshares are different. If a timeshare company offered an RV with a driver and a cook for a week's worth of points, it might be comparable to a cruise experience.

"We've looked at this idea, the sharing experience with RVs and cruises, because it's an amazing 'other option' for people who have not given it that consideration over the years," said Ed Kinney, vice president of corporate affairs at Marriott Vacation Club International. "We see that the drive-to-market [vacation] continues to bulge, and we see that pattern continuing as people hesitate to get on a plane."

Gamel, the industry's top advocate, said he could envision several developers — companies with regional resort networks — offering RV trips as an exchange or trade option. What no one knows, however, is how big that market would be. But he acknowledges that it might appeal to some timeshare owners seeking a different kind of trip.

"I met a couple from Iowa that owned 5 million (timeshare) points and they traveled 52 weeks a year, driving an RV from place to place around the country. They paid $25,000 in maintenance fees, and it all seemed to work," Gamel said.

Have your travel considerations changed during the pandemic? Do you like the concept of RVing, or different types of travel? Leave a comment below.

About the author

This answer was provided by RedWeek contributor, Jeff Weir. Jeff is a California-based journalist who has covered California, Congress, and the White House. He also has roots in Silicon Valley, where he directed public relations and marketing programs for high-tech companies. He is also a timeshare owner and member of RedWeek.com.

2 Comments

  • Avatar for cliftonb16
    cliftonb16
    Nov 14, 2020 (2 weeks ago)

    Can your make an offer on a timeshare rental lower than the asking price?

  • Avatar for phyl21
    phyl21
    RedWeek Team
    Nov 14, 2020 (2 weeks ago)

    Yes, you can certainly make offers.

    • Deleted message
    This message was deleted.