What is a Holiday Club? Explained
It is not simple to fully explain what a Holiday Club is other than a complex area of contractual holidaying (vacationing).
A short explanation is that a company acquires resort complexes at various locations throughout the world and divide those resorts into saleable units. Each unit being the apartment, room, cabin, liveable quarters, etc.
Once the number of units has been established the unit is divided by the number of saleable weeks occupiable by holiday traffic.
As each and every week varies in respect to its saleability, value and desirability a particular week will be allocated a number of points, therefore identifying the value that the holiday company believes that an individual unit is valued at in respect to selling that unit. (An alignment of currency)
For example, a well designed apartment in a good location which is desired by a lot of vacationers will attract a high allocation of points, opposed to the same resort in a poor location in a week which vacationers find it difficult to attend.
At this point there is a selection of units (in a resort) with identifiable values. The consumer is then sold points valued accommodation for their personal use. At the point of entering into the arrangement and into any future defined arrangement, the consumer and the resort enter into a contractual agreement as to how the arrangement will operate. Noteworthy is that each arrangement is private to that consumer and the resort. Each contract will contain their own set of terms and conditions and each will vary dependant on the holiday company and the resort itself. In essence though they all have the same purpose, however each are dressed in different ways.
The points sold to the consumers are then entered onto the holiday company system and the consumers can visit the resort of their choice or visit other resorts within the company’s portfolio of properties.
The consumer enters a booking system and with their points trade in a selection of points in exchange for the right to stay in the particular resort of their choice. In the event their choice is not available the consumer then chooses another resort and week until the consumer is accommodated.
This method allows the consumer to vary their weeks holidaying, from week to week and season to season. In the event that the consumer has visited a resort and apartment which is valued (by the company) less than the points the consumer holds, the remainder of the points will be banked to be used by the consumer at a later date.
The entire system on the face of it sounds beneficial to the consumer affording flexibility and longevity of holidays and at the choice of the consumer.
However the resorts within a portfolio of the holiday company has a finite number of weeks and an equal amount of consumers who have bought into that point system club. Some will decide to holiday every year, others will holiday every two years and in truth the connotations are too varied to put on to paper. This being so, a consumer could have difficulty in booking weeks as they are continually “booked up” leaving little availability.
This situation could drag on for years and the consumer is deprived from holidaying when they choose to do so, due to lack of availability. This appears to be a very real complaint.
In respect to transparency.
The club is controlled by the resort and/or the holiday company and they could sell holiday points which are not allocated to available weeks (double and triple booking) or sell units explaining that the unit is in a poor week, and a bad location but it can be transferred to high valued weeks. This will reduce the number of high value weeks available when booking your preference.
The point system and the value of the points sold are not controlled at an arm’s length and can be subject to exploitation by the sellers.
The actual system can be altered, inflated, adapted, modified and over sold without any real or just examination of the process.
In respect to maintenance fees
The maintenance fees applied under most contracts is a proportion of the applied maintenance fee allocated to each point the consumer has acquired.
Therefore, say the consumer has acquired 10,000 points and the maintenance fee is £0.10 per point the consumer will pay a fee of £1,000 and so on.
As I have said there is no arms length regulation of the resorts and holiday companies in the matter of point system currency and therefore the application of unit maintenance fees have to be viewed with the same cynicism.
This said, a cost calculation has to exist, the point computations have to be done so as to calculate the maintenance fees. These however are enshrined in secrecy and are not available to the consumer or this association to verify whether or not the holiday’s companies have complied with their own contractual obligations.
So a maintenance fee arrives at the consumers door and the demand states maintenance fees are due, please pay by xxx date. The consumer has no idea of how the fees have been calculated and those fees could be subject to errors and misrepresentations. But should a reasonable person determine that there must be something owed? If that is so, then if the consumer withholds the entire fee and the holiday company issues proceedings, will the court find that there must be some liability? Not rightly so for the reasons explained below.
In respect to the holiday company.
I appreciate the holiday companies have sold weeks and those weeks have been recalibrated into the holiday company’s own currency (points), however in the event that an entire company is full and all the points have been sold, you have a maximum number of divisible currency units and it’s those units which are used to apply the maintenance fee calculation. In the event that certain points become delinquent or the consumers (holding points) rebut liability and the company takes those points back then until they are resold the resort cannot discharge the maintenance costs in full as there is a shortfall. So what happened to that shortfall? Who pays it? Is it the consumers? If it is and the maintenance fees are recalibrated, then the maintenance fee will rise to cover the costs of the delinquent points. If that is the case then the point’s currency which the delinquent timeshare consumers held should be redistributed amongst the existing timeshare consumers paying the maintenance of the facility which the points are secured in. This is a real situation in timeshare and we all know that people give up timeshare, instigate proceedings and exploit exits yet never has a consumer had his points increase to reflect the increase maintenance costs.
This action is very questionable.
Holiday clubs come in various forms like “Vacation Clubs”, “Travel Clubs” & “Travel Discount Clubs”). Almost all “Holiday Clubs” should be given special consideration as there are countless examples of Consumers having problems with them.
In short the initial ingoing cash contributions from the consumer is a currency transaction, in short you are exchanging your currency (£ sterling) for resort points without regulation.
Assume that you are being asked to exchange your homeland money for another currency which you know will go down and you have to support that currency for the rest of your life by yearly contributions, would you do it? Would you class it as an investment, would you consider signing a contract passing the commitment into your estate after death? In the event you try and spend your currency and you are refused an exchange, would you have confidence in the currency? The Holiday Club, after a real analysis of the situation, has to be investigated so as to properly assess whether or not it is a scam and consumers are being exploited.
I will retract this view in the event that anyone can provide me with any evidence to the contrary. However I have tried to locate any justification as to the mechanics of this type of selling I have been denied any information. I think that in itself says a lot about the process.
If any consumer wishes to obtain all these documents and needs assistance in forensically analysing the documents please contact us for assistance.
David
For and on behalf of the Timeshare Consumer Association
29th May 2014
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk