Description

A bad apple of the

timeshare industry

Introduction

Since its early beginnings, the timeshare industry has seen its share of unethical and illegal

practices by some unscrupulous developers. Therefore, despite the initial success of the

timeshare concept, many predicted that it would fade away and eventually disappear. The

timely intervention of state legislators not only saved the industry but also enhanced its image.

The reputation of the industry was further improved by the entrance of well-known brands

such as Disney, Hilton, Hyatt, and Marriott, and large independent companies in the market.

ARDA and other industry organizations likewise enhanced its reputation by developing ethics

codes or codes of conduct to regulate unethical and/or illegal practices. All of these actions

nurtured a new type of business making timeshare one of the most successful sectors of the

hospitality industry. The timeshare industry continues to expand at a steady rate even in times

of economic recession, and many expect further growth in the future.

Indeed, recent research indicates that younger generations find the timeshare concept

appealing and are willing to purchase a timeshare. Some of the potential customers, however,

remain skeptical about the industry and thus refrain from purchasing a timeshare product. The

skepticism of these customers may be caused by unethical and/or illegal practices of some

developers and/or service providers or the so-call “bad apples” of the industry. Although rare,

the mere existence of such practices undermines the reputation of the industry and provides

negative media exposure to well-known brands and other companies that worked hard to earn

their credibility. Therefore, the industry continues to work to overcome the ‘bad reputation’

cliché.

The “bad apples” of the timeshare industry may engage in various practices that somehow

violate ethical standards established by the industry organizations or local laws, but some of

these practices are more common than others. The case study will follow a story of a

hypothetical company named Tropical Resorts to demonstrate these common violations. The

company engages in unethical and at times illegal practices, and the case study provides

information that will aid in identifying some of these practices. It then concludes with the

discussion of strategies that may foster organizational ethics and manage the unethical

behavior of employees.