“The goal is to get the owner back on vacation as soon as possible, so they can fall in love with timeshare all over again.”


90% of Delinquent Timeshare Owners Can Afford Their Maintenance Fees, But How to Motivate Them to Pay?

It’s that time of year again. Your yearly statements are out, maintenance fees are streaming in, and—oh, yeah—you have that little problem of what to do with delinquent owners, the ones who haven’t paid.

If you’re like most timeshare HOAs, your delinquency rates hover around 10% (or higher) and present a major threat to the financial health of your resort. When an owner doesn’t pay, you send them to a third-party collections agency and hope it works so you’re not stuck with another foreclosed interval.

But delinquency is more than a financial drain. It’s a sign that an owner has lost sight of the value of timeshare. The truth is the vast majority of owners who stop paying their maintenance fees do so because they don’t understand how timeshare works or fits into their lives. In fact, experts estimate that 90% of delinquent owners have the financial resources to pay, but don’t do so because they don’t understand the value and flexibility of what they have purchased.

For example, consider the owner who no longer wants to fly to her home resort. The owner could exchange into another resort within a short drive of her home, but perhaps she’s never been educated on how to use an exchange program or tried it once unsuccessfully. This owner would still benefit greatly from her ownership—and continue to pay her maintenance fees for years to come—if only someone explained how to use it rather than sending her to collections a few months after she falls behind.

Resorts need to consider this when dealing with delinquent owners. Instead of sending them to a third-party collections agency right away, what if you start a conversation to discover why the owner is not paying and how you can help? What if you offer classes to educate owners about their options even before they fall into delinquency?

Whatever you do, the goal is to get the owner back on vacation as soon as possible, so they can fall in love with timeshare all over again.

This strategy, which we call “reengagement,” benefits everyone. Owners appreciate it because it’s much nicer getting a phone call from owner services rather than a collections agency. Resorts appreciate it because it preserves their owner relationships and ultimately results in less non-performing inventory, which is defined as intervals that don’t have maintenance fees paid against them.

With billing season upon us, it’s time to think deeply about your reengagement strategy. Are you sending delinquent accounts to third-party collections straightaway? Or are you seeing this as an opportunity to better serve your owners?