Inheriting a Timeshare: The Generational Shift

During my time in sales at Hilton Club in New York City, I began to see a certain situation occurring more and more often: An older couple who had purchased a timeshare years ago were planning to bequeath it to their grown children, or even transfer ownership duties to the next generation while they were still alive. Straightforward enough. But whether the children wanted the timeshare was another story.

I refer to this as “the generational shift,” and as Baby Boomers age, it’s occurring more frequently than ever. I believe that understanding this shift is critical to the future of our industry. Why? As with any product, if churn is greater than adoption, your business is in serious trouble. The difference with timeshare is that the churn rates can only be examined over a period of many years, making it harder to adjust in real-time. So it’s important to understand why sometimes the shift succeeds, and other times it fails.

In my experience, many children gladly embraced timeshare ownership and its benefits. These tended to be more active timeshare users, to begin with — the ones who would use their parents’ points without them, attend owner’s updates to learn tips, and even get added to the deed while their parents were still using the timeshare.

Related – Yes, Timeshares Are Actually Cool

But value is in the eye of the beholder, and other children were more skeptical or straight-up opposed. They often reached out to me with questions about what to do with the timeshare their parents left them. Or the parents themselves would ask how to sell their timeshare because the children decidedly didn’t want it.

For families that find timeshare appealing, the idea of legacy is a dominant buying motive — bequeathing the timeshare and its travel perks to future generations as a sort of “vacation trust.” But it doesn’t just pass down the benefits of vacation ownership — it passes down the responsibilities, too. Those can be substantial, particularly for a generation that favors collecting experiences over ownership (whoops — didn’t see that one coming!). I’m talking about things like annual maintenance fees, usage fees, navigating the “rules” of the timeshare, and committing to annual usage.

Most important — because it sets the attitude for the others — is acceptance of the concept of timeshare itself. Some people see massive value when a $1,500 maintenance fee is easily leveraged for a $3,000 vacation. They simply equate a commitment to the timeshare with a commitment to travel itself. But to someone who perceives timeshare as something nebulous or “less cool than an Airbnb,” those are all liabilities. And because values differ from generation to generation, it’s imperative that we iterate the product for tomorrow’s consumers.

Here are four ways the Generational Shift often leads to failure:

1. Acceptance of the Concept. The new owners don’t think timeshares offer the travel experiences, flexibility, or financial freedom they desire. The timeshare product has evolved immensely, but negative perceptions prevail.
2. The Cool Factor. In an Instagram- and TikTok-driven world, trends and influence are key. People want to go where they see others going on social media. Despite successful campaigns like ARDA’s #LoveMyTimeshare, the trend-setting influencer culture has yet to fully embrace the timeshare industry (and arguably vice versa).
3. The Process. Children don’t understand how the timeshare works: In an internet-driven culture, they favor products and apps that reduce or eliminate friction. When they’re used to booking a vacation in a couple of clicks, timeshare exchange programs may feel archaic.
4. The Financials. This is a big one. In many families, the next generation is not yet financially secure enough to assume the ongoing costs of ownership. I’m confident that young timeshare naysayers will easily become timeshare enthusiasts once their own financial situations stabilize.

Sharing economy sites like KOALA resonate with younger generations that have Airbnb and Uber hardwired into their DNA. They recognize the financial and sustainability advantages of letting someone else pay them to use their unused…anything really. KOALA can also offer a stopgap solution for the original owners, letting them defray their fees until their children are prepared to take over ownership. Future-proofing the product will make it more appealing not just to the kids who inherit the timeshare, but to their peers, who may well become the next generation of owners. This will provide a larger window of opportunity for the next generations of vacationers to become the next owners.

Mike Kennedy is CEO and co-founder of KOALA, a new timeshare rental marketplace. Before co-founding KOALA, Mike spent over ten years as a top sales executive for Hilton Grand Vacations, where he first envisioned a secure, easy, and ethical way for timeshare owners to rent their unused time. His long-term mission: to transform the way people take vacations.

Watch Mike Kennedy YouTube Interview – The Importance of a Strong #Timeshare Secondary Market – Rentals