10 Wildcards to Watch Over the Next Year: What Could Shake Up the Timeshare Industry?

As much as we’d all love a crystal ball that accurately predicts the future, the truth is, some events come out of nowhere and change everything. These are the “wildcards”—those unpredictable events or shifts that can throw the timeshare industry, and the world at large, off course. Although many of these have some historical precedence, the fact remains that history tends to repeat itself. The best we can do is stay informed, watch the signs, and prepare.

Here’s a rundown of the top 10 wildcards that could dramatically influence the timeshare industry over the next 12 months.

1. Economic Fluctuations: Will the Economy Play Nice?

Remember the 2008 financial crisis? It sent shockwaves through the global economy, and discretionary spending took a nosedive. Timeshare companies had to slash prices, offer flexible payment plans, and sweeten the deal to keep sales going. A similar downturn could happen again if economic indicators like GDP growth, unemployment rates, or consumer confidence take a hit.

So, keep an eye on the Federal Reserve and interest rates. If they crank up rates to combat inflation, it could lead to higher loan costs, potentially discouraging consumers from making big purchases like timeshares. The takeaway here? Stay agile, and be ready to adapt your offerings to the economic climate.

2. Travel Restrictions and Health Crises: A Pandemic Déjà Vu?

The COVID-19 pandemic was a massive wake-up call. Travel bans and lockdowns took a toll on timeshare usage, with major players like Marriott Vacations Worldwide experiencing a decline in occupancy rates. If we learned anything, it’s that health crises can put the brakes on travel in a heartbeat.

The wildcard now is new COVID-19 variants or any other emerging health threats. Track vaccination rates, new variants, and government travel advisories. Another wave of travel restrictions could hit the industry hard, making contingency planning a necessity, not just a nice-to-have.

3. Technological Disruptions: Will Virtual Tours Replace Reality?

Virtual reality (VR) isn’t just for gamers anymore. It’s shaking up the real estate and travel industries, offering a way to explore timeshare properties without leaving your living room. Companies like RCI are already taking advantage of VR to enhance the buying experience, but what happens if VR technology suddenly leaps forward?

Keep an eye on advancements in VR, augmented reality (AR), and blockchain, as they could change how timeshares are marketed, sold, and even managed. A breakthrough that makes VR more affordable and realistic could mean fewer physical visits to properties—and a very different sales process.

4. Regulatory Changes: Will New Laws Catch You Off Guard?

Legislation can shift the playing field overnight. Take Spain’s mid-1990s timeshare laws, which introduced clearer contracts and a cooling-off period for buyers. These changes forced companies to adapt quickly. The potential for regulatory shifts is always present, whether it’s new consumer protection laws, changes in tax policies, or updated property ownership regulations.

To stay ahead, monitor legislative developments in key markets like the U.S., Europe, and Asia. For example, emerging data privacy laws could impose new rules on how you handle customer information, making compliance a top priority.

5. Climate Change and Natural Disasters: Is Your Property Prepared?

It’s not just hurricanes that can upend your business, but they are certainly a prime example. Hurricane Irma in 2017 wreaked havoc on the Caribbean, causing massive damage to timeshare properties and resulting in costly repairs and operational disruptions for companies like Wyndham Destinations. We recently felt the wrath of hurricanes Helene and Milton. We can expect more events like this.

Regularly reviewing climate reports and forecasts can give you a heads-up on potential risks. It may also be time to rethink infrastructure and disaster response plans. With predictions for more frequent and severe weather events, investing in more resilient properties could become a matter of survival.

6. Shifts in Consumer Preferences: Are You Aligned with What Travelers Want?

Consumer preferences are as unpredictable as ever. Take the rise of remote work during the pandemic, which sparked an increased demand for longer stays in properties that offer reliable internet and office amenities. Forward-thinking companies like Hyatt Residence Club have already adapted with extended stay packages.

To stay competitive, keep a close watch on social media, travel forums, and market research to spot trends early. For example, if wellness tourism continues to gain traction, offering health and fitness amenities could be a wise move to attract that crowd.

7. Competitive Landscape: Is Your Market Position Secure?

The vacation rental scene is more crowded than ever, and timeshares are feeling the heat. Platforms like Airbnb have introduced flexible and often cheaper alternatives to traditional timeshare models, shaking up the market. What if Airbnb took it a step further and rolled out a timeshare-like product? That would certainly force traditional timeshare companies to rethink their strategies.

Stay informed about what your competitors are doing and watch for new entrants in the vacation ownership space. Don’t wait to innovate—being proactive could make all the difference.

8. Geopolitical Events: How Stable Are Your Key Markets?

Geopolitics can disrupt even the most carefully laid plans. The aftermath of Brexit, for instance, left timeshare operators in Europe grappling with new travel restrictions and currency fluctuations. Any political upheaval could have far-reaching consequences for the travel and vacation ownership industry.

Pay close attention to international news and developments in visa regulations, tariffs, and diplomatic relations. Increased tensions between major destinations or sudden changes in travel policies could significantly affect international travel patterns.

9. Energy Prices: Could Rising Costs Clip Traveler Wings?

Remember the oil shocks of the 1970s? Skyrocketing fuel prices led to more expensive travel, making vacations—and timeshares—less affordable. If global energy prices were to surge again, it could drive up airfare, transportation, and even operational costs, putting a strain on travelers and operators alike.

Keep track of OPEC decisions and trends in the global energy market. If fuel costs soar, expect higher maintenance and transportation expenses to impact your bottom line. The current unrest in the Middle East is a very real threat to energy costs for timeshare companies.

10. Consumer Trust and Legal Challenges: Is Your Reputation at Risk?

Trust is hard to earn and easy to lose. Several national timeshare companies have faced legal challenges over aggressive sales tactics and misleading contracts, damaging their reputations and inviting regulatory scrutiny. A single high-profile lawsuit could spark stricter industry-wide regulations, forcing companies to change how they do business.

To avoid becoming the next cautionary tale, keep a pulse on legal news and consumer protection agency reports. Proactively address customer complaints and be transparent in your practices—it’s much better to be ahead of the curve than caught off guard.

The Bottom Line: Stay Vigilant and Adapt Quickly

The next year could bring a range of unpredictable events that affect the timeshare industry. While no one can foresee every wildcard, being informed and agile can help you navigate the challenges and seize new opportunities. Stay alert, keep an ear to the ground, and be ready to pivot at a moment’s notice—because in this industry, adaptability isn’t just an advantage, it’s a necessity

Simon Crawford Welch, Ph.D, RRP has held multiple executive roles in the vacation ownership industry ranging from President & COO, Diamond Resorts International; President & Partner, Envie Holdings; Chief Sales & Marketing Officer, Royal Resorts; Executive VP, Shell Vacations Club; to President, Tesoro Resorts. He currently acts as an advisor to several companies.