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Frank Chapman’s and even Barratt’s business model was sound; you were, effectively, buying a share in a property and you will have the exclusive rights to use that property during the time that was stated on your share certificate. The clubs worked well for many years and even the recycling of fractional weeks through resale as an exit strategy was both efficient and effective. In the early years of the 21st-century, these successful business model started to break down for three main reasons:

The Problems

The operators and developers stuck rigidly to the proven ways of running the business and they ignored market developments. Let us not forget that when Frank Chapman started in this business the idea of personal computing was a myth from the pages of science-fiction novels; there were no such thing as mobile telephones; and the Internet was a military secret! Nowadays, in the technological world in which we live, prices have fallen and choice has expanded massively. The lack of investment and the unwillingness of operators to move with the times is truly astounding!  Any business in any other industry that are not adapted in the manner that the timeshare industry has not adapted, would have gone bankrupt. So why didn’t timeshare companies go bust? Well, some of the weaker clubs did collapse, but the stronger ones survived because they were able to milk the cash cows of their loyal owners!
When any successful industry starts to show its age and cracks appear, from those cracks emerge the sharks and the charlatans who are only too willing, like cancer to invade and infect the once strong body until it is killed off, and then pick the bones dry. This has certainly been the case with timeshare. Businesses that offer to broker timeshare resale’s and those that offer to cancel the liability for maintenance costs in exchange for a large fee; finance companies who are prepared to fund the purchase of timeshare at exorbitant interest rates; debt collectors who uncompromisingly pursue defaulters even beyond the grave; operators who want to asset strip clubs; pyramid or network marketing sales organisations using aggressive marketing techniques; fraudsters; convicted criminals,  the list of these rogues is endless.
The global financial crisis certainly did not help the industry that was already showing signs of old age as discretionary spending on holidays collapsed and the mainstream tour operators had to start aggressively cutting prices to fill their resorts. The clubs that had solid foundations survived the crisis because they had sufficient members to cover those that were forced to default on their maintenance fee obligations. It did mean, however, that for the surviving owners fees increased to cover the shortfall and the debt liability of even the successful clubs, increased. Many operators ignored the plight of the clubs and continued to exact their “pound of flesh” and this, often, pushed the clubs closer towards insolvency.
There is no doubt whatsoever that in order to survive in the future the industry does need to change, but it needs to change in a manner that protects all of the stakeholders that have invested in timeshare - particularly the owners!




Exploring Alternative “Ways Forward”