Timeshare Industry Consolidation, Negative Cash Flows, and Access to External Financing

摘要

This article proposes remedies to a problem unique to the time share industry. Although these projects are frequently profitable in the long term, in the near term sales produce negative cash flow. The length of the project's sales cycle, the substantial marketing costs, and the considerable use of expensive forms of financing all combine to produce several years of negative cash flows even for the most profitable resorts. The article examines industry trends, then proceeds to an in-depth analysis of the relationship between sales, release fees, and negative cash flows. Financing arrangements commonly used in the timeshare industry are examined next, followed by suggested innovations which may solve the cashflow dilemma, especially for the small-scale independent time share developer.