There are various differences in customers’ needs for timeshare units compared to hotel rooms. Timeshare houses are sought for their exotic locales, ideally suited to tourists and vacationers wanting to enjoy nature in its pristine form. Hotel rooms, on the other hand, are used for far broader range of purposes. These purposes could either be pleasure trips, business engagements, professional conferences, temporary stops en route to another destination, etc. Hence, the target consumers for these two markets are different.
The concept of timeshare residences have been around for more than three decades now:
“Timesharing, the idea of buying a portion of a property and the right to stay there for a corresponding number of days every year, was born in the 1970s at ski lodges in the French Alps. People who were interested in a vacation house but didn’t want to fork out a huge amount of capital went in on the transaction with friends and family and divided up weeks on a calendar.” (Trends in Timeshare Development)
While people on vacation and nature tourism also use hotels, it is usually quite expensive for two reasons. First, the more remote the hotel is from major cities and towns (as nature interest spots tend to be), the more expensive accommodation will be due to the compounded logistics and management costs involved. Secondly, hotel rooms may be alright for short stays of one or two day duration. But staying weeks on end at a hotel room can prove unaffordable. Hotel rooms also differ from timeshare units, in that they cater to a mass of people as opposed to a select group. Hence it may not appeal to vacationers and nature enthusiasts who are looking for tranquil and less crowded abodes. Timeshare products are especially designed with this customer base in mind. What makes timeshare units attractive is how they make resort ownership affordable for a vast swathe of upper middle income social class. This consumer base may otherwise not be able to enjoy such facilities or enjoy them only in a limited manner if hiring hotel rooms were the only choice. (Timesharing 101)
By offering a timeshare of a residential building, vacationers can retreat for rest and rejuvenation several times a year, while also enjoying fractional ownership of the property. This is to the advantage of the customer because owning such a property outright can be forbidding cost-wise. By sharing the expense with other likeminded customers, the cost of ownership is reduced while the benefit and advantage of a vacation home remains all the same. Hence, in this arrangement, a mutually beneficial relationship between timeshare unit promoters and customers is struck. While hiring out a hotel room is a straight forward business, timeshare ownership comes in a variety of options. These include Fixed, Floating and Rotating Weeks, Deeded and right to use, Vacation Clubs, etc. Points Programs are also offered by some promoters the way airline operators offer loyalty points.
Article 1: Timesharing 101: Introduction to Timesharing by Stephen J. Nelson.
Article 2: Trends in Timeshare Development