Disney Poised To Open 4 More Timeshare Properties This Year Despite Global Recession

Jason Garcia of the Orlando Sentinel writes in a recent article that Walt Disney will be opening 3 timeshare properties in Central Florida and one in California this year.  While this is not new news, the article contains some note-worthy facts:

– The launches of all the time-share properties “constitute the most ambitious expansion yet for Disney Vacation Club, Disney’s 17-year-old time-share unit

– Sales at the Celebration-based time-share business fell during the three months that ended March 28 — the first quarterly decline Disney has recorded at its time-share arm in at least 3 ½ years.

– The time-share unit generated roughly 10 percent of Walt Disney Parks and Resorts’ total operating profit during the company’s most recent fiscal year, or an estimated $190 million.

The last stat is on the one side rather surprising given that Disney revenue comes from so many sources, like their theme parks, movies (including Pixar), retail items and stores, and licensing agreements.  But when you consider the profitability of timeshares, it’s not surprising that timeshares contribute a significant share to the bottom line of the multi-billion-dollar corporation.

The continuation of the opening of four properties this year emphasizes the profitability of timeshares for developers.  Prices for the Disney timeshare units will START at $18,000 with a monthly maintenance fee.

For the entire article, click here.

Is the Timeshare Industry a Cash Cow Worth Protecting?

Mark Matthews and the Orlando Sentinel recently released an article titled,”The Time-share Industry is Safe Under Grayson’s Watch” that describes how freshman Congressman Alan Grayson successfully received an exemption for the timeshare industry in a recent bill designed to curb predatory lending practices in the mortgage industry.

The exemption essentially allows the time share industry to dodge proposed regulations on same-day purchases and lengthy escape clauses that would allow consumers to leave some contracts if they find themselves in over their heads.

The reasoning for this from Congressman Grayson stems from the fact that Central Florida (his district) is so heavily economically dependent upon the timeshare industry.  The Congressman makes the analogy that timeshares are to Florida like oil is to Texas and corn is to Iowa.

But who ultimately finances the timeshare industry?  Why do development companies, hotel chain and state & local governments love timeshares?  It’s a cash cow for all of them.  Per unit built, timeshare units are among the most profitable vacation accomodations for hotel chains.  Hence, developers can charge more and governments can increase their tax base, especially if timeshare owners come from out of state.  It’s a great way to increase tax revenues without taxing the majority of your constituency.

For timeshare owners, the vacations are lovely and the time spent with family is precious.  But know that your dollars spent in the purchase, maintenance and other fees are funding some major developments and lobbyists.  Just keep your eyes open.