Let us start with asking a question, why would any multi million pound company at the cutting edge of the timeshare industry stop selling timeshare and close all sales outlets? We might venture that the whole resort or resorts have been sold out so they have no more stock left, probably unlikely. Could it be that the current pandemic has removed their potential customers? For sure there are literally no customers available to present the product to, after all no one can travel, right? All that said, maybe there is a second more sinister reason.
The penny has dropped
In the first of our articles on this subject we went to lengths to explain our reasoning behind the lack of value, apart from holidays, that the timeshare product offers, maybe this is a reason why one of Europe’s largest timeshare resort owners and seller of various timeshare related products has not only closed its entire sales division but have gone to the extraordinary length of placing their sales related companies into liquidation, who de we refer to? Club la Costa World.
2020 was a damaging year for most global industries, including timeshare, as probably 2021 will be, that said, why was such an enormous step taken to cut off the life blood of new sales? The answer is probably clearer than at first seems, there has been a seed change in the opinion of the consumer as to the overall validity of the product.
An entry level fractional ownership contract at CLC will retail currently at around 20 to £30,000 for a 15 year term product. With this it will bring with it about £1,000 per annum in maintenance fees, rising of course. Answer honestly; is this the normal sort of money that holiday makers have laying around to secure a small slice of holiday paradise? We think not, not to worry you can always take out a long term expensive finance contract to secure your future holidays.
A recent finance contract we have seen sight of (Download below) quotes an interest rate of 11.2% but the reality is the Annual Percentage Rate (APR) is in fact 18.9%. For a sum of £19,049 borrowed over 10 years the total payback is £40,362 so the £20,000 fractional purchase has in fact over doubled in cost from the price quoted on the day.
Do the maths, the monthly loan repayments are £336 so over 12 months that equates to £4,032. Add back in the £1,000 or so of annual maintenance and suddenly the cost of the annual holiday rises to £5,032, by the way that figure does not include flights or food. We believe that a sum such as that would, on average, buy a lot more holiday than most timeshare could even dream of offering.
Presented with the facts above one can understand that prospective purchasers of timeshare are running away from this sort of commitment in droves, hence no prospects, no business. Timeshare resorts including CLC have been rumbled, finally the penny has dropped.
Adding insult to injury
If the above were not bad enough, add in the facts from our last article confirming there would little or no return in the event of wishing to sell or exit your ownership. Just to compound the issue, getting rid of the ownership is not the end of the problem. Even if you struck some sort of deal and escaped the contract, getting rid of the ownership would not extinguish the loan so you could be paying considerable annual sums for something you have had no capital return from and have lost all future holidays.
Where will £5,000 get you?
We don’t have all day to ask Mr Google where you can holiday for the equivalent of the annual timeshare cost but one thing is for certain, there are plenty of great holiday deals out there. How about a family of four going to the fabulous Caribbean island of St Lucia including breakfast and flights? Well for a high season 2 week holiday for four, 2 adults and 2 kids it will set you back £4,702, don’t believe us, have a look at this:
Ok, long haul may not be your idea for a family holiday, in which case think where you could get in Europe for the same budget. We think this just goes to reinforce why timeshare has not only lost its value but has rapidly gone out of favour with the holidaying public.
Maybe CLC are the sensible company and many others will follow suit. We don’t have a crystal ball but the facts do sort of speak for themselves.
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