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News Article

US timeshare industry worth $92 billion: report

Economic impact grows

The timeshare industry used to have an image problem; it was notorious for high-pressure sales tactics, and visitors to many southern European destinations couldn't walk along the seafront without being constantly hassled by sales agents. But those days are largely gone, and a report by PricewaterhouseCooper estimates that the US timeshare industry contributed an estimated $92 billion to the national economy in 2005.

This finding was unveiled during the annual convention of the American Resort Development Association (ARDA), held last month in Orlando. Combined direct, indirect and fiscal impacts in 2005 by the US timeshare industry totaled an estimated $92 billion, including $62 billion in consumer and business spending, 565,300 full- and part-time jobs, $21.5 billion in salaries and wages, and $8.5 billion in tax revenue. There are over 1,600 timeshare resorts in the U.S., attracting 4.1 million households to vacation ownership, 5 percent up from 2005.

Also in 2005, some 154,000 timeshare units created 91,300 jobs and $2.4 billion in wages. Resort occupancy rose to 78.7 percent with timeshare owners and guests spending $10 billion in vacations, generating 99,700 in indirect jobs through visitor spending at other businesses, and $3.0 billion in wages and salaries. Total direct and indirect jobs created in 2005 total 377,700 and $13.3 billion which confirm the significant impact of timeshares to the overall economy.

Florida led the American timeshare market, with a total of 378 time share resorts in Florida, made up of 47,400 units, or 30.7 percent of the total. In Florida, 161,000 people were supported by the industry, with wages and salaries of $5.4 billion and $2.1 billion in tax revenue.

"With nearly one third of U.S. timeshare units as well as the headquarters and central offices of many of North America's large and mid-size timeshare development companies, the timeshare industry has proven a boon to Florida," said Howard C. Nusbaum, RRP, president and chief executive officer of ARDA. "The areas with timeshare resorts, such as Central Florida, continue to benefit from the generation of loyal repeat visitors, new jobs, and consumer expenditures, as well as the industry's elevated occupancy rates and overall stability."

"The economic benefits the timeshare industry conveys to communities surrounding resorts and the nation as a whole are documented and substantial. This study underscores, once again, the vibrancy of timeshare and our position as a serious, stable, and growing economic catalyst," said ARDA chairman Raymond L. "Rip" Gellein, Jr.

Nationally, time share owners took about 5.7 million time share vacations, spending an average of $1,768 each trip, totaling $10 billion, with 90 percent of a time share party's spending occurring at local businesses away from the time share resort.

Trends in 2006 showed a lot of optimism for the future ahead. "Sales in 2006 went up by 91 percent to $10.5 billion. Resort-type that ticks includes beaches, country lakes and golf and ski resorts," said Joe Callender, manager with the Quantitative Economics and Statistics (QUEST) group, Ernst & Young.

A Special Issue of the International Journal of Hospitality Management in 2002 explored issues in the timeshare industry in the USA and other countries. Upchurch and Gruber described the evolution of the timeshare industry in the USA over around 30 years, and its gain in consumer acceptance. Crotts and Ragatz presented an analysis of recent US timeshare purchasers, showing that they were affluent, well educated members of the baby boom generation. They were often repeat purchasers of timeshare and are purchasing intervals for exchange opportunities and to save money on future holidays. Rezak (2002) also reports consumer research on the demographics of timeshare purchasers, together with information on the sales process and behaviour. Pryce reported on the structure of the timeshare industry, showing that the industry is 'polarizing' between a few large publicly quoted multi-site branded operators and a multitude of small, independent single-site firms.

A number of papers referenced on the Leisuretourism database describe how the timeshare product has evolved from a fixed week system to a more robust vacation club product where the consumer can purchase products or services based on a point allocation system, therefore giving the consumer more flexibility in how the product is utilized (Upchurch and Rompf, 2006). Moule (2002) also described the emergence of 'points clubs' (a timeshare system where 'owners' hold points which entitle them to use a period varying from a few days to a few weeks every year from a choice of resorts) which were reported as a potential vehicle for taking the timeshare industry to a new level in its evolution. Milburn et al. (2005) describe on timeshare derivatives in Europe such as fractional ownership, Private Residence Clubs and points clubs.

For an overview of the worldwide timeshare industry, see Peisley (2002). A free-text search for 'timeshare' on the Leisuretourism database currently finds 82 bibliographic records.

Article details

  • Author(s)
  • David Simpson
  • Date
  • 12 April 2007
  • Subject(s)
  • Tourism