By Sherri Weeks Rivera

It doesn’t matter where you’re located or how modern your amenities are. Every timeshare resort has delinquencies and association-owned weeks. Unfortunately, these room nights often sit empty without generating any income, and the association is left to foot the bill.

Resorts have tried a number of fixes, including resales to new interval owners, leasing or selling blocks to vacation clubs, and selling whole units to single owners. In the process, many resorts overlook one of the easiest paths to immediate results—rental programs. A robust rental program offers long-term self-sufficiency and financial health in addition to attracting potential new owners to your resort.

Pulse Check

The primary goal is always to find new owners. Ironically, the first step toward a successful resale program is to create a rental program. Rentals help the association financially in the short term while attracting potential new owners to your resort as part of a long-term strategy. An important component to this strategy involves making an honest assessment of where you’re at and where you need to be. In other words, how much money do you stand to lose on delinquencies and association-owned intervals, also referred to as “non-performing inventory”? How many room nights do you need to rent in order to make up the difference?

Let’s consider the average 50-unit resort, which needs to collect $700 per year in maintenance fees for each of its 2,550 intervals. Assuming that the resort has an eight percent delinquency rate and five percent of its weeks are association-owned, the resort will lose $231,700 in maintenance fee income per year on 331 weeks. This shortfall equals $104 in additional expense for each of the 2,219 paying owners.

The next thing the resort needs to do is calculate the number of available nights, which it can then leverage as rentals to offset the lost maintenance fees. In our example, the resort has 2,317 unused nights from delinquencies and association-owned intervals. The resort can also reasonably estimate “no shows” (typically around five percent, or 889 nights in our example), late check-ins (around three percent, or 76.5 nights) and early check-outs (also around three percent). By adding all of these figures together, the resort can conclude that it has 3,359 nights to put on the rental market.

The resort will need to establish several rental rates based on demand, unit size, and other variable factors. It will also experience seasonal fluctuations in occupancy. If we conservatively project 60 percent occupancy at an average daily rate (ADR) of $127, the resort can expect to generate $256,000 in rental revenue per year. A percentage of this will go toward commissions and other rental expenses, but the resort will still cover the majority of the lost maintenance fees. With a more robust approach, the resort could increase occupancy and ADR, offsetting all unpaid maintenance fees and possibly generating a surplus.

Marketingcommon myths sidebar

Now that you know how much income you need to generate, you need to market your rentals to the public. According to a 2014 Google study, sixty-five percent of travelers research trips online before choosing where to go, how to get there, and who to purchase from. Your online presence matters now more than ever.

Timeshare accommodations have much more to offer than hotels.  Showcase your square footage, floor plans, and in-room amenities to differentiate your resort from competitors.  It’s also important to set expectations regarding the frequency of housekeeping. Don’t assume renters understand the differences between timeshare resorts and traditional hotels.

You’ll need a website with an advanced booking engine to establish your resort as credible and facilitate direct rentals. You’ll also need to merchandize inventory with online travel agencies and vacation rental websites, which will charge a subscription fee or collect a percentage of your bookings to cover their own operating costs. Take these fees into account when setting your rates.

Your rental rates may change daily based on availability and your competition. Given the added value of timeshare, you should be able to drive higher rates than a hotel. You’ll need a full-time staff overseeing your strategy in order to achieve your rental goals. There is no such thing as “set it and forget it” when it comes to rates.

Professional photography and videography go a long way toward attracting renters and pay for themselves in increased bookings. Are you using photography from fifteen years ago? Does your photography predate your recent renovation? Does the lighting make your resort look dark, dingy, or simply uninspiring? Your “best guest” will pay a little more for a better vacation experience.

Managing your online reputation is essential to your long-term rental marketing strategy. It’s not uncommon to have one or two negative reviews on websites like TripAdvisor. But a pattern of negative reviews will scare off renters. Address these trends right away. You should also have a manager personally respond to every review, positive or negative.

From Renter to Owner

Every resort wants to attract new owners. One of the benefits of a rental program is that some renters will want to buy intervals. We have found that the longer renters stay, the more likely this is to happen. We offer regular specials such as “buy three nights, get the fourth free,” which encourage renters to extend their vacations long enough to fall in love with the resort.

It’s also important to ensure every guest has an incredible stay by monitoring arrivals and making yourself available to rental guests. Perhaps consider a full-time, on-site concierge. Heartfelt service creates a connection with your rental guests. As they discover what they have been missing, they will want to make timeshare ownership a lifestyle.

Make it Work for You

Non-performing inventory doesn’t have to drain your association. A successful rental program will actually support owner engagement and make your resort more appealing to the next generation. As your association becomes financially healthy, you’ll be able to make upgrades and service enhancements, which increase the value of your resort and support a long-term, resale solution.  Through a well thought out rental program, you can preserve your resort’s unique personality and increase owner satisfaction in a self-sustaining cycle of improvement.

Sherri Weeks Rivera is vice president of business development for Grand Pacific Resorts and the creator of ResorTime, one of the first industry-wide timeshare rental websites. Her email is

This article originally published in September 2015 Developments, ©ARDA.