Navigating the timeshare landscape in 2023

The past few years have been marked by constant and rapid change – from a global pandemic to a sluggish economy exasperated by loadshedding, torrential rainstorms and beach closures. Despite adversity, the timeshare industry remains resilient and owners / club members continue to want to holiday. At the start of the new year, it was already abundantly clear that 2023 had arrived with its own set of challenges and opportunities.

Post-Covid Emerging Benefits
Timeshare by its very nature is a product built for times of uncertainty and high levels of inflation. The concept of ‘locking in your price’ is exactly what appeals to families looking to experience quality holidays year after year without concern for market pricing and other macroeconomic fluctuations. Recent inflationary headwinds have helped highlight the value proposition of timeshares. We’ve seen hotels increase their daily rates to offset increased costs. Conversely, timeshare accommodations are prepaid, thus making the cost to owners relatively predictable versus renting two hotel rooms with similar accommodations in this period of high inflation.

Member Concerns On The Impact Of Continued Load Shedding
Fears of mass power outages looms large on the national agenda and the declaration of a third State of Disaster – in as many years – is yet another disrupter for the timeshare industry. Of particular concern is the impact unscheduled and unrestricted load shedding has on resort operations and a lack of reserves to absorb these unforeseen costs.
Instead of 2023 being a year to take a breath after reacting to a pandemic, resorts have had to go back to the drawing board to navigate inflationary pressure on operational costs, timeshare owners’ discretionary income and hiked interest rates fueled by the rising costs of an unreliable energy supply.

Costly solutions
Load shedding stages beyond levels four, five and six were not expected and with the bleak outlook from Eskom, resorts are faced with the steep cost of larger or additional generators and/or renewable energy sources in order to keep the lights on.

Direct costs
Already, the immediate costs incurred during the December peak holiday season – such surge protectors, diesel to run the generators, rechargeable emergency lighting, additional back-up batteries for security systems and purchasing extra linen for quick turn-around times – have taken their toll on resorts’ budgets.

Indirect costs
Consideration also needs to be given to the indirect costs as a result of low productivity levels, staff arriving late due to traffic congestion and having to pay staff who are unable to work during loadshedding, etc. These costs have come at an inopportune time as the industry was starting to get back on its feet post-Covid.
Staff morale, productivity and job security
As almost all staff are reliant on electricity to perform their daily tasks, loadshedding means having to do everything manually where possible. In many instances these are labour intensive tasks, which can create the risk of low staff morale and productivity. The overall sustainability of the resorts has a direct impact on the livelihoods of its employees, most of whom are from local rural communities.

Green considerations
Not only are generators noisy – which dampers the guest experience in tranquil resort settings – they do not align with the green operating principles of timeshare resorts. However, with the imminent implementation of stage 8 by June, the reliance on them will unfortunately increase for the foreseeable future.

Service levels
Unavailable services during loadshedding – such as air conditioning, lighting, internet, cooking and refrigeration and cold showers – do not create a desirable holiday experience, and may even be regarded as substandard which tarnishes the reputation of resorts and the industry as a whole.

Safety and security
The safety of owners while on holiday is a top priority for resorts. However the increased frequency and duration of power outages results in the malfunctioning of the backup batteries of security and alarm systems due to insufficient time to recharge. Sufficient battery backups and charging capacity comes at an additional cost, however it is not ideal for any battery to be faced with continuing bouts of power cuts – whether they are planned or unplanned, according to Fidelity ADT.

Embracing The Disruption
Once again, the timeshare industry will need to look beyond the disruption and adopt a forward looking response which accepts that load shedding is part-and-parcel of timeshare in South Africa. The advantage timeshare has over other traditional holiday accommodations is that there’s plenty to do at resorts that does not require electricity. Many coastal resorts are located within walking distance of the beach. A large variety of ‘off-the grid’ activities include nature trails, cycling, horse riding, golf, game drives, daily entertainment programmes for kids and adults, tennis courts, outdoor putt-putt, swimming pools and entertainment centres where you will find board games, table tennis, pool tables and more.

Consensus for 2023
Each new year is a great yard marker to see how well we were able to align our efforts against the goals we set. Despite the challenges that lie ahead, 2023 will not be a year that the industry rests on its laurels. This doesn’t mean we don’t see the macroeconomic issues in front of us, but that we rather move forward based on the things we can control. Timeshare has proven itself to be an innovative product that has adapted to meet the ever-changing needs of owners and club members – and this year will be no different.

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