What’s An HOA and Why Should I Care?

Notice: Please consider participating in Holiday’s upcoming webinar, “What Is a Home Owners Association and Why Should You Care?” The free virtual seminar will take place on Thursday July 30th from 5:30 to 6:00 pm PDT. Special guests will include Lisa Ann Schreirer and others. There will be a question and answer session afterwards in which viewers can participate. Please visit https://www1.gotomeeting.com/register/147286120 for information on registration, or email to webinars@holidaygroup.com.

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Timeshare  Home Owners Associations are one of the most misunderstood and perhaps one of the most mysterious aspects of timesharing in the United States.

Whether you purchase from the developer or on the secondary market, the odds are greatly against you that anyone will enlighten you as to what an HOA is and why you should (and you absolutely should) care.

I interviewed two HOA professionals (Cindy Thomas and Mike Weber) for this article and urge all owners to read it carefully and become more involved in your ownership. Contact information for all three follows at the end.

Lisa: What exactly does your HOA do?

Cindy: A Homeowners Association is meant to maintain the integrity of the association from a fiscal and fiduciary point of view on behalf of its members and in the best interests of its members.

Mike: We meet 9 months of the year at the resort, no meetings in June, July, or August.  We represent the owners.  We discuss, vote on and oversee major improvements and expenditures of funds, as well as resolve any issues brought up by the owners or the management team.

Lisa: How much of what the HOA does or oversees is impacted by the owners? 

Cindy: Everything that the homeowners association does is by and for the owners. 

Mike: We investigate any issues or complaints brought up by the owners. Usually there are very few.

Lisa:  Are all owners at your resort automatically part of the HOA, or is it something that they have to join?

Cindy: Automatic.

Mike: All owners are automatically a part of the HOA.

Lisa: Can any owner become the HOA President or Director, and if so, how? 

Cindy: Yes, the board is elected by the members and the board selects its directors from the elected board.

Mike: Yes, any owner can run for a board position. We ask for nominations in the spring and the annual election is held at the May meeting.

Lisa: What is the biggest issue facing your HOA today?

Cindy: I believe the biggest issue is that of resale and viability of the timeshare product. In my opinion, the timeshare product needs to remain a timeshare product.

Mike: Some owners are walking away from their units by not paying their annual taxes and maintenance fees. 

Lisa: How has that changed in the past 10 years?

Cindy: I am seriously concerned about the dilution of the timeshare product in the exchange world. My question back to the group would be – How are resorts handling the issue of owners at the end of their timeshare ownership? Deed in Lieu of Foreclosure, etcetera. Does anyone believe that the postcard companies or relief companies are thriving, in part due to the resale industry and resorts’ stances on getting out from one’s timeshare week, along with the dilution of the timeshare product, whether perceived or true? If so, how do we think-tank a solution to this? Who, on a management level, wants to spearhead this subject?

Mike: Not sure. I have only been on the board for 2 years.

Lisa: Do you wish that more owners participated in your HOA?

Cindy: We have good participation. What I wish for our owners is a more effective way for them to fully understand the timeshare product and what it can do for their vacation experience. When I meet an owner who has not used their timeshare week in years or doesn’t understand the exchange world, I see that as an opportunity to re-educate them, excite them about what they own and invite them, in some cases, to bring along their next generation to an educational session with our staff so that they may transfer that week to their kids in a way that their kids not only understand what they are getting but appreciate the value. Timeshare never sold itself, and passing it along to the next generation takes almost the same educational program.

With that said, we have run such a program for quite some time and there are still issues in getting people to take action to come to such free educational sessions. Maybe I have it all wrong; maybe if you charge for it, it will have value?  What do you all think about that?

Mike: Yes, I would like to see more owners attend the meetings to express their concerns in person.

Lisa: What’s the one question that prospective timeshare owners should ask about a resort’s HOA?

Cindy: Sorry Lisa, one question? I could go on and on! Here are the top questions:

-How does my timeshare trade in the exchange world?
-How are reserves funded?
-Who is in control of the association?
-What percentage of the board is controlled by the developers as compared to the association, and what is the succession plan for association control?
-Where and how are the reserve funds invested?
-How are the easements surrounding the resort?
-Are there any implied contracts that might not stand up over time, and if so, will they affect the membership?

Mike:  What is the HOA’s financial reserves position?

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About Lisa Ann Schreier
Lisa Ann Schreier, “The Timeshare Crusader,” is the founder of the consumer consulting company Timeshare Insights. A timeshare thought leader, Lisa is the author of both Surviving A Timeshare Presentation and Timeshare Vacations For Dummies, and is also a frequent blogger and speaker. She can be reached at lisa@timehareinsights.com.

What the Timeshare Industry Can Learn From The Travel Industry

Attention: Join Lisa on Thursday, July 30 for a free live online Webinar from 5:30 pm to 6:00 pm PDT. The topic will be, “What Is A Home Owners Association and Why Should You Care?” A Q&A session will follow the Webinar allowing you to ask questions of Lisa and her guest speakers. Please visit this page for registration information.

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Last year, I wrote a piece about what the timeshare industry can learn from the cruise industry. Today I’m reporting on how the traditional timeshare industry is going to have to learn from the travel industry if it wants to thrive in the coming years.

According to Peter Yesawich, chairman and CEO of Ypartnership, the two biggest influences on American travelers are technology and social values.

Yesawich reports that 61% of active travelers use the Internet and ONLY the Internet for their travel research, and just 7% use travel agencies exclusively.

So what can the traditional timeshare industry learn from this? There is a dearth of information about traditional timeshares on the Internet. We all seem to forget that the Internet does not operate without people. Someone is–well, many people, are responsible for getting the information onto the Internet. The traditional timeshare industry has done little in this regard. The vast majority of timeshare-related information on the Internet is from sources OTHER than the timeshare resorts.

Yesawich also reported that 1 out of 5 American travelers actively visit one or more travel blog sites, and 1 out of 3 of them have written a travel review online. Those blogs and reviews are where Americans are getting their travel information.

You can equate a traditional travel agent to a timeshare developer. While you can purchase your travel needs directly from a travel agent, fewer and fewer people are doing that. Just like fewer and fewer people are relying on the information they obtain at a timeshare presentation to then make the purchase.

Consumers are also price driven. It should come as no surprise to anyone that 87% of travelers reported that the ability to check the lowest prices is THE MOST IMPORTANT FEATURE of a travel Web site.

Consumers also look for ease of purchasing, with 74% of travelers saying that this was a key feature in travel sites.

Can a consumer compare prices online with traditional timeshare resorts? Of course not. The prices seem to be not only a closely guarded “secret,” but vary immensely depending on how many times the consumer says “No” during a timeshare presentation.

Can a consumer easily purchase a timeshare online from a resort? We know the answer to this is “No.” I don’t know any resort that lets consumers purchase online.

Hotels and motels and other non-timeshare travel services have been forced to become price transparent . . . as has just about every other product or service available to consumers. Yet still, the timeshare industry won’t budge on this because it clings to the concept that timeshares are not a sought-after product.

Perhaps this is so because they won’t let it be sought after. Consumer research study after study continues to point to the fact that consumers want to buy things, as opposed to being sold things

Other details from Yesawich’s study showed that 50% of respondent said that they had no preference between a legacy and low-fair air carrier. Consumers care more about the price of the air ticket than the carrier.

Translate this to the timeshare industry and it becomes obvious that price is what matters. If a consumer can purchase a timeshare from a developer for $20,000 or a similar product on the resale market for $5,000 or $6,000, why wouldn’t they purchase resale? Especially when the developer charging $20,000 doesn’t clearly demonstrate and publicize the rationalization for the price difference. Maybe there is a clear-cut reason “why.” If so, the timeshare developers have yet to tell their story in a convincing manner.

If they did explain the reason, perhaps people would be more willing to pay the higher price. Another study showed that 38% of Internet users would be willing to pay more for customized products. This clearly demonstrates that there is a subsection of the traveling public that will pay more if you give them exactly what they want.

The good news for the timeshare-owning public, and people who may be interested in purchasing a timeshare, is that more and more people are traveling with their children: 43% reported one or more trips with their children over the past 12 months vs. only 26% back in 2000.

Grandparents also report taking more vacations with grandchildren than before, with 28% of them taking at least one vacation with their grandchildren.

As more and more family and extended families travel, there should be more demand for generally larger timeshare units.

For too long, the traditional timeshare industry has thought acted like a maverick, often to its detriment. A timeshare is an alternative to a hotel or motel. Period. It’s a travel service. Period. There is no sense clinging to outdated marketing and communications tools. There is no need to try and re-invent the wheel. The travel industry changes as consumers demand those changes. If the timeshare industry doesn’t adapt to these demanded changes, I predict that it will go the way of the travel agents–people will still purchase timeshares, but not from the developer.

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Lisa Ann Schreier, “The Timeshare Crusader,” is the founder of the consumer consulting company Timeshare Insights. A timeshare thought leader, Lisa is the author of both Surviving A Timeshare Presentation and Timeshare Vacations For Dummies, and is also a frequent blogger and speaker. She can be reached at lisa@timehareinsights.com.