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ARDA World Report: Timeshare Sales Growing

ARDA World Report: Timeshare Sales Growing

Five years after the economic crash, the timeshare industry posted another year of upbeat sales in 2012, defying naysayers who predicted the business would fade in the wake of the economic crash.

Timeshare_Pool_1_Lifestyle-Holidays-Vacation-Club.jpgTotal timeshare sales increased to $7 billion for 2012, up 7.6 percent from 2011, according to preliminary data from Ernst & Young, presented this week at ARDA World, the annual trade show for the industry. While still far below the $9.7 billion in sales in 2008, industry executives are proudly boasting of the resilience of the shared-ownership market.

"Some of the things we had to give up, we learned we could do without," said Don Harrill, chief executive of Holiday Inn Club Vacations and chairman of the American Resort Development Association. "We had to readjust strategies and maybe lose our egos."

The news from ARDA World wasn't as good for the fractional and destination club industry, which focuses on selling shares in vacation homes. Sales volumes continued to fall, hitting $497 million in 2012, compared to $552 million in 2011, according to data compiled by Ragatz Associates.

Paradisus-Palma-Real.jpgAt the peak in 2007, fractionals and clubs--which allow the customer to buy a slice of ownership in a property, instead of a set block of time--generated $2.3 billion in sales.

With the prices for vacation homes depressed around the world, the value proposition to buy a share of a unit is a tougher sell, said Richard Ragatz, president of Ragatz Associates.

"It's been an awful five years," Mr. Ragatz said, emphasizing that he believes the model will take hold when prices for vacation homes rise again.

"I feel there is a lot of pent up demand," he said. "People continue to appreciate the concept."

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