The following article was written by Syed Sarmad, the Principal Real Estate Broker for Advantage Vacation and has been published in the May/June edition of TimeSharing Today magazine as a Special Report on the Hawaii Timeshare Market. We reprint it in its entirety.
“Hawaii continues to experience large growth in the new timeshare retail sales segment. The large companies and developers of Hilton, Hyatt, Disney, Westin-Starwood, Marriott and Wyndham are continuing to build and in some cases, expand their timeshare resorts in Hawaii. They are making these investments in their timeshare properties because they can get a return on their investment quicker by selling timeshare interests versus selling hotel rooms. There are currently no stand alone hotel project plans on the drawing board in Hawaii, as the future of the Hawaii hospitality industry clearly indicates it will continue to grow through timeshare and mixed use projects.
As the large developers continue to build and expand their properties they are also helping other sectors of the Hawaiian economy by providing more jobs and increasing tax based revenues. In addition, there is an overall increase in occupancy numbers, which in turn generates an increase in spending in all the areas and activities visitors and tourists enjoy when vacationing in Hawaii – dining, entertainment, shopping, tours, etc.
What’s happening?
Why are these major hospitality corporations and developers building new timeshare resorts and expanding their existing timeshare resorts and not building stand alone hotels? Because, as hotel occupancy numbers have been steadily declining in the past number of years, demand and occupancy in other segments of the vacation industry have been increasing, most notably timeshares.
In Hawaii for example, the only new tourist oriented construction in the last few years has been timeshare developments. Hilton announced in November that it was adding its seventh Hilton timeshare resort in Hawaii on Oahu – Hokulani Waikiki by Hilton Grand Vacations Club. The resort is expected to open later this year. In addition, Hilton has been adding new buildings and expanding its Hilton Hawaiian Village complex on Oahu.
Hyatt is currently building a 131-unit “Residence Club” resort on Ka’anapali Beach which is expected to open in 2014. The approximately $40 million vacation ownership resort will be located near the Hyatt Regency Maui and consists of 19 one bedroom units, 100 two bedroom units and 12 three bedroom units. this will be the first Residence Club in Hawaii.
Disney Aulani timeshare sales have been going strong on Oahu as Disney continues to build and expand onsite amenities and services.
The newest addition to the Marriott Vacation Club Collection in Hawaii is the Marriott Kauai Lagoons.
What’s selling and why?
While retail timeshare sales continue to grow in Hawaii, the secondary market of timeshare resales has been steadily increasing in the last two years as well. This is due in large part to current owners of timeshare seeing the value in purchasing resales at discounted prices to add to their current vacation portfolio. Thus, timeshare resales are continuing to do very well throughout the State of Hawaii and reflecting good sales revenues.
With the high retail prices of timeshares, more and more people are finding out the advantages of buying the same name brand timeshare on the secondary market at discounted prices. Although in some cases not all the benefits are transferrable on a timeshare resale, the consumer can save (in many cases) more than half of the original purchase price when purchasing a timeshare resale versus purchasing direct from the developer.
In some cases, name brand developers are exercising their “right of first refusal” option which has created a stabilization of timeshare resale prices. By exercising their option they are in turn creating additional inventory for themselves.
Taxes
Taxes continue to be an issue for timeshare owners in Hawaii. Timeshare owners generate a lot of revenue yearly and even though timeshares bring in a lot of tourist dollars, officials continue to raise property taxes and the Transient Accommodation Taxes. Timeshare owners are pretty much guaranteed to be return visitors each year, as they own a piece of Hawaii real estate and they bought it to use it!
Unfortunately, in Hawaii, County and State level officials are empowered to raise taxes and continue to target timeshares as an easy source of tax dollar revenues. The officials fail to see how timeshare owners bring in large amounts of revenue year after year through car rentals, dining and entertainment, shopping in grocery stores, playing golf, etc. In almost every sector of daily life, Hawaii timeshare owners contribute to the local economy and yet are paying some of the highest timeshare taxes in the United States.
As an example, in May, 2012, the Maui County Council Budget and Finance Committee voted to increase the timeshare property tax rate and while it was lower than the requested rate increase, it marked the second year in a row where the largest tax increase on Maui fell on timeshare owners.
Challenges in the timeshare market
With an aging population of timeshare owners, rising delinquencies in maintenance fees is affecting not only Hawaii but the entire timeshare industry. The older timeshare resorts (25 – 30 yrs old) are beginning to experience serious delinquencies in their maintenance fees. The original purchasers of these timeshares were in their 50’s or 60’s when they first purchased and are now in their 80’s. The timeshare owners may not be able to travel and enjoy their timeshare any longer and their family members aren’t interested in assuming the annual fee obligations, so the owners stop paying their maintenance fees.
One of the solutions is for the Associations to work with a licensed real estate agent who can provide onsite resale services and educate timeshare owners on the various options available to them for utilizing their timeshares.”
Advantage Vacation is a licensed timeshare resale brokerage located at the Lahaina Cannery Mall in Lahaina, Maui. We specialize in Maui timeshare resales and Hawaii timeshare resales of name brand timeshares.
We can assist you in purchasing Hilton timeshare resales on the Big Island or the island of Oahu. We also have Marriott timeshare resale listings on Maui and several of the other Hawaiian Islands. If you are a fan of Westin, we would be happy to assist you with the purchase of a Westin timeshare resale. Advantage Vacation is a member of the American Resort Development Association (ARDA) and offers the best buys on the timeshare resales market today. We never charge an upfront fee for clients who want to sell a timeshare and only receive a commission, paid from escrow, when the transaction is closed.
We are leaders in the timeshare resale secondary market, have been in the timeshare industry for over 30 years and are Accredited Members of the BBB with an A+ Rating. Advantage Vacation is using Twitter and Facebook to help educate people on the changes in the timeshare industry along with current timeshare tips, up to date timeshare news and timeshare FAQ’s.
We hope you will follow us and our blog, Timeshare Blogging by Advantage Vacation for the latest timeshare news and reviews. If our site does not answer your question or questions, please email us your question and we will answer it and add it to our library. Make your voice heard – what questions do you have?
At Advantage Vacation you can be assured you are working with professionals who believe that honesty and integrity are the most important aspects of the business they are in – timeshare resales. Our business has been built on relationships and we pride ourselves on providing excellent service to our clients.
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