Withum’s Annual Timeshare Benchmarking Study
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The findings conclude that:
Delinquencies are still a reality. There has not been a noticeable change in a positive direction for collection rates. In fact, collection percentages still appear to remain at historically high levels.
Associations are still experiencing deficiencies and as a result, they continue to borrow from the reserve fund as indicated by 39% of associations having liabilities from the operating fund to the reserve fund. Additionally, the report suggests that a large portion of subsequent year assessments are being spent on current year expenses.
There was a decrease in special assessments levied by number of resorts, suggesting a decreased need for unbudgeted operations funding or unanticipated capital projects. The presence of special assessments could also be a contributing factor for the discrepancy between budgeted and actual bad debt, as there is always a bad debt component of a special assessment which is, by its nature, unbudgeted.
Replacement fund expenditures continue to increase indicating the need for continued and realistic funding of reserves as properties age. In fact, replacement fund expenditures have historically been in excess of assessments.
Overall, the changes are modest but are hopefully indicative of positive trends that we will continue to see. Collections and actions to halt further declines, the accessibility of resale and other secondary market resources, rental and another ancillary income potential, and aging resorts with an aging owner base continue to be the issues to focus on for long-term improvement.
For further information about Withum’s Timeshare Practice and the findings included in this report, please contact Lena Combs ([email protected]) or Tom Durkee ([email protected]) at (407) 849 1569.
