We mostly think that American timeshare is alive and well and that resorts are still selling inventory and life is a bowl of roses but that may not be the case.
We recently had sight of an article published by a respected American online publication called Communal News the report is generally about the travel and hospitality industry and the current problems being experienced by the global pandemic. Needless to say timeshare ownership was not exempt. Here we publish the relevant section:
“The need for consumers to cancel their timeshare contracts is more relevant than ever before.
Sadly, many prominent timeshare companies, including Holiday Inn Club Vacations, Wyndham, and Hilton Grand Vacations, have found new deceptive ways of earning money.
The way these companies are treating their valuable customers during these challenging times is downright strange and cruel.
In a situation, where many businesses are putting their revenues aside just to help out those who need financial help, it’s sad to see how these timeshare companies have refused to reimburse consumers who’re not able to travel and utilize accommodations because of the pandemic.
The comments of the chair of the American Resort Development Association-resort Owners Coalition have been highlighted in the recently -issued Forbes article in which he said, “The best thing we can do with exit (is) judicial foreclosure, ruin the credit and enforce the contract.”
“Each developer should have an exit strategy office with (their) call centre, also can be an opportunity to up sell. Only 40-50% (of owners) actually exit after reaching the office of exit.”
But most of these companies have failed to keep their promises, and consumers have suffered massively because of this irresponsible behaviour during the pandemic.”
These are quite scathing comments, especially the suggestion of foreclosure. To explain this mostly American used term, it is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan. Not really surprising that this course of action will ruin any credit reputation of the timeshare owner to whom this applies.
With most American timeshares costing a purchase price of around $30,000, it is hardly surprising that many purchasers have to use finance, much of which is handled in-house by the developers. This is primarily because most banks are unwilling to lend on long term holiday products. According to information published by Diamond Resorts, we quote:
“Approximately 75% to 80% (depending on the quarter) of our North American VOI sales have been to customers who utilize financing provided by the Company. During the last four years, we have consistently received a down-payment on financed transactions which averages 20% of the purchase price of the VOI.”
FYI, VOI means Vacation Ownership Interests.
Diamond do indeed publish information on exiting timeshare via their “Transitions” programme, however as the article insinuates this also provide Diamond with an ideal opportunity to up-sell. This would appear to be borne out by the statement at the bottom of the Transitions web page, which clearly states:
So on a site that purports to assist with exiting ownerships, there is a clear message that the ulterior motive could well be to sell more of the same.
Again we quote:
“Each developer should have an exit strategy office with (their) call centre, also can be an opportunity to up sell. Only 40-50% (of owners) actually exit after reaching the office of exit.”
Factor in the love of the “perpetual” (never ending) contracts being issued by most American resorts, the future looks anything but rosy for owners who; for whatever reason, change their minds and wish to get out of these long term commitments.
To use some American jargon, these owners are caught between a rock and a hard place with resorts and developers really playing hard ball.
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