Like touch-tone telephones, zip codes and soda can pull tabs, it’s hard to remember a time when timeshares didn’t exist. However, timeshares are actually a fairly new concept that revolutionized the vacation ownership industry.
Let’s delve into the fascinating history of timeshares.
The first timeshare was built in 1963 (as were the other three inventions). It was a 13-room ski resort in the Swiss Alps. But not until the 1970s did the idea really catch hold in the U.S. And if truth be told, it started a bit by accident.
The robust economy of post-World War II America stimulated the massive construction of vacation homes and condominiums at popular national tourist destinations.
As the economy slowed in the 1970s and a real estate recession set in, banks had to deal with overbuilt condominium projects. Rather than sell one condo to one person, savvy businesspeople decided to make them more affordable to cash conscious Americans. They broke the condos into one week units and sold each condo 52 times to 52 different owners.
Yahtzee! The U.S. timeshare business was born.
The infant industry was unregulated at the time and had real growing pains. For instance, there were widespread marketing abuses that emphasized sales, not vacation experience. These unethical practices marred the industry’s reputation with both consumers and reputable developers. Still, the timeshare model grew like gangbusters. The number of resorts increased in the 1970s from 45 to 350, and the number of timeshare owners rose from 10,000 to 200,000.
Innovation was one reason for the massive growth. In 1974, RCI, the world’s first exchange company, opened for business. Two years later, Interval International, the other mega exchange company, began. Today, these two exchange companies give owners access to more than 7,000 resorts, according to Wikipedia.
In the early 1980s, developers began constructing purpose-built timeshares. Before that, all U.S. timeshares were condo conversions. These properties often met or exceeded the standards of four-star hotels in terms of quality, space, and service. The first of the purpose-built timeshares was on Hilton Head Island in SC. It was so well thought out and so attractive that in 1984, Marriott Corporation bought it, thus becoming the first hospitality brand to enter the vacation ownership industry.
In the early 1980s, developers also introduced the floating-time concept. This freed owners from getting locked into a specific week and unit. Soon after came the points system, adding even more flexibility for owners with wanderlust. This system allowed owners to redeem points for resort locations, amenities and other travel services.
At the same time, regulators established rescission, disclosure, and escrow requirements, safeguarding consumers from unsavory developers. And the timeshare industry itself developed a code of conduct called The Model Timeshare Act.
By the end of the 80s, the timeshare industry had matured into a formidable market, there were more than one million timeshare owners. The number of resorts had increased by 400 percent and sales by 500 percent.
Today, the timeshare industry continues to thrive, offering unparalleled vacation experiences to millions of owners globally. You can read more about how timeshares work here.
Discover more about the intriguing journey of timeshares in our next post, The Rise and Fall of the Timeshare Resale Market.
Timeshares were first developed in 1963 at a 13-room ski resort in the Swiss Alps. The concept gained traction in the U.S. during the 1970s when condominiums were sold in one-week increments.
Timeshares originated in Europe in the 1960s and expanded to the U.S. in the 1970s. Innovations like floating weeks and point systems, along with regulation, shaped the industry into a global vacation ownership model.
In the US, the timeshare industry began when developers in the 1970s split unsold condominiums into weekly ownerships, offering an affordable solution during a real estate recession.
Timeshares revolutionized vacation ownership by making it affordable, but early unregulated practices tarnished their reputation. Modern timeshares now offer flexibility and adhere to consumer protections.
Key innovations include the creation of exchange networks in the 1970s, floating-time models in the 1980s, and the introduction of points systems for flexibility.
Purpose-built resorts, exchange networks, and regulatory safeguards drove the industry’s growth, with the number of timeshare owners exceeding one million by the end of the decade.
When it comes to vacation property ownership, timeshares and fractional ownership are popular choices, but they cater to different needs and budgets. Check out the pros and cons of each to find out if a timeshare, fractional ownership, or hybrid option is the right fit for you.
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