The Sky isn't Falling
As we prepared our July 2026 Resort Trades edition, “The Money Issue,” we were inspired to dig deeper into researching how the industry is handling today’s economy. If you spend much time following the financial news, you might think consumers are curled up in the fetal position, clutching their wallets, and refusing to spend money on anything more extravagant than a loaf of bread and a tank of gas.
One headline after another seems designed to raise blood pressure and give you indigestion!
In late April, The Wall Street Journal ran a story titled “Timeshares Hint at Consumer Angst.” In late May of this year, Advisor Perspectives wrote, “The final reading for the University of Michigan Consumer Sentiment Index registered at 44.8. This marked a significant decline from the previous month and a prolonged period of suppressed economic confidence.”
Other publications continue to focus on inflation concerns, consumer sentiment surveys, stock market volatility, tariffs, recession fears, and uncertainty surrounding interest rates.
Certainly, these concerns are real. Consumers are paying attention to their finances, and vacation ownership companies would be foolish to ignore economic headwinds when it comes to consumer spending.
But before you conclude that the sky is falling, consider this:
You’re looking at consumer confidence from a universal perspective, not from inside the industry. Drawing on contacts from Resort Trades’ Member Directory, we asked a group of highly-engaged professionals what they are seeing in real-time. Here are some of our questions:
Question #1: We saw timeshare resort owners/members were using their pre-paid vacations throughout Covid while hotels were virtually empty. Given the current economic pressure, are occupancy rates slowing or accelerating?
Question #2: When the economy gets rough, are loan and maintenance fee portfolios holding their own, suffering a moderate decline, or taking a hard hit?
Question #3: Has your company explored any special initiatives to ease the burden at this time?
Question #4: We’d appreciate hearing anything you’d like to add, particularly as you’re looking forward to the remainder of the year.
That’s why Resort Trades decided to go directly to professionals who have a front-row seat to consumer behavior.
The goal isn’t to predict the future. It’s to find out what’s happening right now from people who interact daily with owners, renters, lenders, developers, resort managers, and HOA boards. Here’s who we asked, along with their description from our directory.
Contact: Lena Combs
Withum is a forward-thinking, technology-driven advisory and accounting firm, committed to helping clients in the hospitality industry be more profitable, efficient, and productive. With office locations in major cities across the country, and as an independent member of HLB, the global advisory and accounting network, Withum serves businesses and individuals on a local-to-global scale. Our professionals provide the expert advice and innovative solutions you need to Be in a Position of Strength.
“Today’s timeshare associations are navigating a complex environment shaped by economic uncertainty, aging resort infrastructure, rising insurance and construction costs, and increasing owner delinquencies. Many resorts developed decades ago are now entering a period where meaningful capital investment is necessary to maintain the quality and experience owners expect and reserve studies are revealing funding needs that were underestimated in prior years.
At the same time, delinquencies can place added financial pressure on paying owners because the costs of operating and maintaining a resort must still be funded as those operating costs do not disappear when owners top paying their assessments. Boards have to be vigilant in balancing responsible financial stewardship with preserving the owner experience. Despite these challenges, many owners who actively use their ownership continue to see significant value in the product through access to quality accommodations, planned vacation opportunities, and memorable experiences with family and friends.”
Contact: Gregory B. Sheperd RRP
Meridian Financial Services, Inc. is a sophisticated third-party collection agency able to provide service to the whole and partial portfolios. Meridian understands the impact of bad debt, as well as the importance of keeping your owners’ accounts current, and preserving their confidence in the purchase decision. Services include third-party collections for domestic and international clients, no-cost-to-client recovery programs, customized industry collection strategies, credit reporting, skip tracing, online services, and credit and collection consulting.
According to Meridian Compliance Officer Sara Disher Ratliff, “From our perspective as a third-party collection agency serving the timeshare industry, we are still seeing that many owners value their ownership and want to continue using what they have already committed to. Economic pressure is certainly affecting households, but that does not always translate into owners walking away from their timeshare obligations.
“From a collections standpoint, we continue to monitor payment activity closely, especially as it relates to maintenance fees, loans, and association receivables. We are not seeing a broad, across-the-board contraction. It is more selective than that. Some owners continue to pay without hesitation. Some need additional communication or follow-up. Others are making decisions based on their overall household cash flow.
“We are also seeing consumers become more cautious with discretionary spending. However, timeshare obligations are different from a one-time discretionary purchase. There is already a contractual and financial commitment in place, and many owners continue to make payment decisions based on the value they believe they are receiving from the product.
“As we look toward the second half of 2026, we are watching inflation, interest rates, consumer confidence, and how those factors may impact owner payment behavior, collection activity, and receivables.
“The biggest point I would make is that what we see at the collection level does not always match the headlines. Yes, consumers are cautious. However, many are still paying, still using their ownership, and still making practical financial decisions based on their individual circumstances.”
Contact: Evan Green
Prosum Servicing brings 50+ years of combined, hands-on installment receivables servicing experience—exclusively within the vacation ownership industry. Founded by seasoned industry operators, Prosum pairs deep domain expertise with modern, proprietary technology and a highly collaborative service model. We partner closely with developers, HOAs, and lenders to deliver flexible servicing, billing, customer care, and collections solutions—built to reduce friction, control costs, and strengthen long-term owner relationships.
Evan writes: Economic uncertainty is real, but I believe it’s important to distinguish between an owner’s ability to pay and their willingness to continue investing in something they perceive as valuable. In my experience, servicing plays a much larger role in that equation than many people realize. Every interaction—whether through an online portal, a payment process, a customer service representative, or a collections conversation—either reinforces or diminishes an owner’s confidence in their ownership experience and their perception of the value of their purchase. Clear and consistent communication, convenient self-service tools, responsive support, and meaningful reporting help owners stay engaged while giving developers, lenders, and resort operators better visibility into changing customer behaviors. Economic cycles will always come and go, but organizations that consistently deliver a positive ownership experience are generally better positioned to preserve customer relationships and navigate those cycles successfully.
Contacts: Odilia Guiant and Jeff Healy
In 2018, we opened our doors with a combined 70 years of experience in delivering world-class service, particularly in Mexico and the Caribbean. Trinity Resort Services provides a comprehensive range of world-class services to the vacation ownership industry, including financial, reservations, and contact center services. Trinity is home to an experienced team of multi-lingual, energetic customer service professionals who understand the complexity of the vacation ownership/timeshare industry. Trinity Resort Services eases your workload so you can concentrate on quality vacation experiences for your members. Offices in Las Vegas and Mexico City.
Question #1: We saw timeshare resort owners/members were using their pre-paid vacations throughout Covid while hotels were virtually empty. Given the current economic pressure, are occupancy rates slowing or accelerating?
You are right about COVID, and we also saw this during the 2008 financial crisis and after of 9/11. Timeshare owners are devoted to their resorts and are the last people to stop traveling. While we have seen a small downturn in occupancy among the resorts we handle reservations for, their members are still keeping current on their maintenance fees and mortgage payments, so we expect to see them visit soon. – Jeff Healy, Chairman, Trinity Service Enterprises
Question #2: When the economy gets rough, are loan and maintenance fee portfolios holding their own, suffering a moderate decline, or taking a hard hit?
Interestingly, we have been hitting new records for maintenance fee and mortgage payment compliance. In new portfolios we have assumed, we are bringing more of the accounts current by working the accounts. This means calling the member right away if a payment is missed. In addition, we are moving more accounts to automatic ACH payments, so they never have to even think about making the payment. It’s another great way to impact and improve portfolio performance. – Jeff Healy, Chairman, Trinity Service Enterprises
Contacts: Stacy Dyer and Matthew Engblom
Western Alliance Bancorporation (NYSE:WAL) is one of the country’s top-performing banking companies and has ranked as a top U.S. bank by American Banker and Bank Director since 2016. Its primary subsidiary, Western Alliance Bank, is a leading national bank for business that puts customers first, delivering tailored business banking solutions and consumer products backed by outstanding, personalized service and specific expertise in more than 30 industries and sectors. With billion in assets and offices nationwide, Western Alliance excels at helping businesses of all sizes capitalize on their opportunities to solve today and succeed tomorrow. For more information on our offerings, subsidiaries and affiliates, visit westernalliancebank.com, Member FDIC, or follow us on LinkedIn @western-alliance-bank.
When a timeshare property faces a major expense, such as capital projects, deferred maintenance, or unexpected damage, the next question is: how and when should your association finance it?
The decision to begin or postpone a major upgrade or repair is a daunting one for timeshare management companies, owners and governance boards alike. In the short term, deferring the expense might seem easier on the budget. But with insurance and construction costs rising, savvy boards know postponement carries hidden costs.
When reserve funds are insufficient or already earmarked for another project, you have more options than you may realize. That includes seeking out a trusted financial partner with timeshare expertise.
Many board members may not know that timeshare association lending exists. Boards either special assess owners or turn to lenders that may charge rates up to 15%, because few banks understand how associations work. Partnering with a financial institution that understands the timeshare space – an even more niche area than a standard HOA – makes all the difference.
Postponed projects have hidden costs that must be factored into the equation. Unaddressed problems exert downward pressure on your organization’s financial health. That’s when borrowing can make a lot of sense. It eliminates the need to choose between an upgrade or repair and a robust cash reserve.
One significant advantage of working with a lender familiar with associations: you can consolidate multiple projects into a single loan. If a property needs roofing, siding and pool repairs, tackling them together may allow a contractor to reduce overall costs by 10%-15%.
Beyond direct project savings, infrastructure improvements like a new roof or updated siding often reduce insurance premiums, which ultimately lowers maintenance fees for every owner. And owners (and prospective buyers) get more use and enjoyment from a property that is updated and well-maintained. That emotional investment is part of the equation, too.
Associations have three ways to repay borrowed funds:
The special assessment path also typically carries no prepayment penalty. If owners want to pay off their balances before maturity, they can do so without penalty.
Not every financing need calls for the same structure. Associations should understand these three primary loan types:
Contact: Bill Ryczek
Colebrook Financial has specialized in timeshare lending since 2003. It offers hypothecation, HOA, repurposing, and other loan types designed for unique situations. Colebrook is large enough to handle sizable requests, but not so large to be hamstrung by policies and procedures. Its principals have decades of timeshare lending experience and are happy to talk about potential opportunities. Colebrook not only answers the phone—an anomaly in this era—but you’ll always talk to a principal.
Bill writes, “Portfolio performance has been slipping for the past couple of years. At the present time, it’s not getting better but it’s not getting any worse. Another development receiving far less attention is the drop in prepayments. Since consumers have less available funds, they’re not only more likely to default, they’re less likely to prepay. Our current prepayments are roughly half of historical levels, which means that portfolio equity grows more slowly. We have one developer that has experienced significant improvement in portfolio performance in recent months by hiring two skilled, energetic managers to oversee customer service. They explain the product offering, encourage owners to travel, and answer questions. I always say that delinquency consists of people who can’t pay and people who don’t want to pay. It’s hard to get money from people who don’t have any; the best opportunity is to change the minds of people who don’t want to pay because they don’t think they’re receiving value from their purchase.”
Contacts: Shawn Brydge
Wellington Financial has financed the timeshare industry without interruption since 1981. Specializing in receivables hypothecation, inventory and development loans of ,000,000 and up, we’ve funded over Billion with our group of lenders. Focused solely on lending to resort developers, we are the exclusive Resort Finance correspondent for Liberty Bank. With over 40 years of expertise in the vacation ownership industry, we arrange financing to credit-worthy borrowers at attractive bank rates.
Shawn replied:
The average American consumer is under increasing financial pressure. Years of persistent inflation across nearly every category of consumer goods have eroded real wage growth for many households, while the wealth gap continues to widen. Americans under the age of 40 increasingly question whether homeownership will ever be attainable and whether Social Security will provide meaningful retirement benefits when they reach retirement age. At the same time, many in this demographic are balancing student loan repayment with the need to build emergency savings and accumulate funds for a down payment, leaving relatively few with meaningful investment assets to benefit from the exceptional stock market returns of the past decade.
These challenges extend well beyond younger generations. Approximately 46% of Americans have no dedicated retirement savings, while 41% of retirees report that their spending is higher today than when they first entered retirement. Rising consumer debt balances, increasing loan delinquencies, declining confidence in government institutions, geopolitical uncertainty, and signs of a softening labor market have all contributed to historically low levels of consumer confidence.
Despite these economic headwinds, one characteristic remains deeply ingrained in the American consumer: the desire—and, for many, the expectation—to take a vacation. The vacation ownership industry has weathered recessions, terrorist attacks, the Global Financial Crisis, and the COVID-19 pandemic, yet its long-term growth trajectory has remained positive. History has consistently demonstrated that Americans prioritize travel, even when economic conditions require adjustments. During periods of financial stress, vacations may become shorter, closer to home, or more value-oriented. During stronger economic periods, consumers are more willing to travel farther and spend more on premium destinations. Regardless of the economic cycle, demand for leisure travel has proven remarkably resilient. The vacation ownership industry is well positioned to serve this demand by offering a broad range of vacation experiences across multiple price points, making ownership accessible to a diverse customer base.
Over the past two years, performance across consumer receivables portfolios has generally softened, with moderate increases in timeshare loan delinquencies and defaults. Importantly, however, these increases have been less severe than those experienced in broader consumer credit categories such as credit cards and auto loans. Timeshare consumer loan portfolios also benefit from significant diversification across FICO score ranges, geographic markets, and socioeconomic demographics, providing a natural hedge against concentrated sources of credit risk.
From the developer perspective, many operators are experiencing lower average transaction values, reduced sales closing rates, and modest declines in occupancy. While these trends are not ideal, they reflect a market that is adjusting rationally to evolving consumer preferences and economic conditions. Rather than resisting change or relying on unsustainable growth assumptions, both consumers and developers appear to be establishing a new market equilibrium—one characterized by more disciplined purchasing decisions, realistic pricing, and a healthier long-term balance between supply and demand.
Contact: Robert M. Nordlund
Association Reserves is a trusted authority in Reserve Studies for vacation ownership resorts and communities worldwide. For nearly four decades, thousands of boards and managers have relied on our independent, customized funding plans to protect common area assets, support long-term financial stability, and ensure timely repairs and replacements—without surprises.
Mother Nature and Father Time don’t care about state lines, owner financial concerns, or economic uncertainties. Mother Nature and Father Time continue to deteriorate everything on the surface of the earth, and associations need to put up a good defense. That is adequate and responsible Reserve Funding. If you delay, you get behind. And catching up is harder than keeping up.
“Owning and maintaining Real Estate is fundamentally expensive, and the costs keep going up. As such, among our clients Reserve Funding appears to be slipping, falling behind the pace of ongoing deterioration. Communicate to owners that Reserves are not “for the future”. Make it personal, make it their problem: Reserve funding offsets current deterioration, much like a “usage fee”.
As we gather insights from these industry professionals, we get something often missing from financial headlines: real-world observations from people who spend every day helping families vacation, financing ownership purchases, managing resorts, and supporting the businesses that keep the industry moving.
So yes, read the news.
Just don’t let it give you indigestion.
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