What's a Developer?
A developer is a person, company, or corporation that buys a piece of land with the intention of building upon it. For your purposes in understanding how timeshares work, the developer is the person or company that is building and selling the units that you are considering for purchase.
The developer also tends to own at least a share in the restaurants, shops, spas, golf courses, and other money-making services that are built alongside the timeshares on the resort properties, which means that the developer has a stake in making sure the resort runs well even after all of the timeshare units are sold. Developers also earn profits on the high interest rates you and other timeshare buyers pay should you choose to finance your purchase over a five- to ten-year period.
Developers come in all shapes and sizes, from single, wealthy individuals to massive worldwide conglomerates such as Marriott, Hilton, and Disney. By some estimates, timeshare development divisions account for as much as 10 percent of profits at some major global companies — meaning it is as important to those companies as it is to you that timeshares are developed properly. They do not want to see a major portion of their revenue curtailed by bad timeshare developments any more than you want to see your money put into a lousy resort project.
FAST FACT
Timeshare developers — after surviving an initial few years with negative cash flow — can see anywhere from a 20 percent to a 50 percent profit on their investments, depending on their overhead, marketing, and other costs, according to one industry research firm.
For companies whose brand names you know, customer loyalty is also a huge factor in their decision to become timeshare developers. Once you are, for instance, a member of the Hyatt Vacation Club, you will likely be entitled to discounts and services at Hyatt hotels, as well. This means the company not only is getting a timeshare customer for the next decade or more, but also a more reliable hotel customer.
Timeshare developers have to follow the laws of the state or nation in which they are developing their resort. A good place to start when researching the developer of your timeshare unit, no matter where it is located, is the American Resort Development Association. ARDA is a Washington, D.C.-based trade association that has existed since 1969. Its primary purpose is to represent the vacation ownership and resort development industries.
TRAVEL TIP
Before purchasing a timeshare unit, check to see if its developer is a member of the American Resort Development Association. The group's Web site,
No matter how big your developer is or where its timeshare resort is being built, you — the buyer — will face a specific set of pros and cons when choosing to buy direct instead of on the resale market. Here is a look at some of the most important factors that you should keep in mind when buying a timeshare unit straight from the developer.
