Whilst we write this article in early September we do so because in a couple of months “maintenance fee” season starts. It has always baffled us why so many developers have chosen December as the month to send out their annual maintenance fee bills.
One of the most expensive times for many households is the Christmas period so the last thing you really want is a thumping great bill to drop on the mat from your timeshare company but whether you want it or not it will arrive and will have to be paid.
What are maintenance fees for?
The simple answer is in the name, these fees are for the maintenance of resorts which includes resort staff, gardening, pool cleaning, laundry, apartment furnishing and upkeep plus a myriad of other costs, the question must be, are these annual fees fair? When drilling down the answer appears to point to the fact that in many cases owners are overcharged by considerable amounts. How do we arrive at this conclusion? Let us explain.
Maintenance fee maths
In order to try to fathom out cost versus value we need some workable statistics, fortunately from a recent enquirer who owns points with Diamond resorts we have some hard and fast figures to work with. Our enquirer has 54,000 points with Diamond Europe and her last maintenance bill was £5,500 for 2021. As points are not a real currency we needed something more to allow us to do the maths, fortunately Diamond publish a points chart covering all their resorts. Below we took an example of Santa Barbara Golf and Ocean Club by Diamond Resorts, a popular Tenerife resort, below is the 2021/22 points chart:
So looking at a peak season week in a 2 bed family apartment the points value is 8,000 per week meaning our enquirer could spend 6 weeks and five days with her 54,000 points which when taking what she pays in maintenance this equates to a weekly cost of £814.
For direct comparison, we will look at a studio in week 36 (first week September). Here the cost is 4,500 points meaning that our enquirer could spend 9 weeks and six days for her 54,000 points which when taking what she pays in maintenance this equates to a weekly cost of £557.
There must be something wrong as the same week on Booking.com is selling for €438 (£377). So an effective charge of £557 for an owner but only £377 for a non owner: See below:
We have no idea what our enquirer paid in total for her ownership but we do know her last upgrade cost £26,000.These are just the simple maths. We will now look deeper on the subject.
Deeper look
To obtain an average we added all the weekly point costs together then divided by the 27 possible availabilities including the quality of accommodation and seasonal costs this produced an average points value per week of 6,759. Using the points and annual maintenance fee we are in possession of (54,000 points £5,500 annual maintenance) we can conclude that each point bears a maintenance fee of £0.11. So the average charge of 6,759 points per week brings with it £734 annual maintenance fee.
Now this is where it gets really interesting. There are 52 weeks in a year; most resorts hold two weeks back for maintenance of apartments. If the average cost is 6,759 points then we can multiply this by 50 meaning the total annual points cost is 337,950. We have already established that the cost per point in maintenance is 11 pence so let’s crunch the numbers:
337,950 X 0.11p = £37,174
Now ask yourself the question, does it really cost the resort £37,154 per apartment every year to cover costs? According to our research Santa Barbara Golf and Ocean Club have 279 apartments so the annual maintenance fees collected, if all apartments are sold, could be as high as £10,365,968 which equates to £199,345 per week or nearly £28,000 per day. Can it really cost this much to run a resort?
In order of fairness, it’s unlikely any Diamond resort is fully sold otherwise there would be no presence on the online platforms but even if only 50% were sold the figures are still telephone numbers.
Do maintenance fees pay for my holiday?
A popular misconception, the simple answer is no, as we said earlier the clue is in the name. However if you are someone who equates their maintenance fee as paying for a holiday, remember this cost is exclusive of air fares, car hire, food and entertainment etc.
In the last two summers the Covid pandemic has been devastating as far as holidays are concerned but as owners know only too well this hasn’t stopped the requirement to pay annual maintenance. We are all hoping that 2022 will see overall easing of restrictions and red tape for the holiday industry but nothing is certain.
In a few short weeks those maintenance bills will start to arrive and whether or not you agree you will have to pay them.
Although we have cited Diamond Resorts this was only because we had workable data. We have no reason not to believe that similar equations will apply to most developers and resorts.
We are all too aware that maintenance fees only go one way, up. The total cost of maintenance fees over the years is rarely taken into account but even after a short period the overall expense can be staggering. Put it to the test yourself, we have a forward looking calculator that will allow you to see just how much you may be paying in the future. The calculator may be found here.
As we continually state, maintenance fees are a contractual liability that, come hell or high water, need to be paid. We think the figures above point out that timeshare ownership be it weeks, points or fractional are an expensive way to holiday when comparing what else is available in today’s holiday market. Just to add insult to injury if you think it’s time to jump ship, timeshares are famously difficult or in some cases impossible to get out of.
We leave you to draw your own conclusions.
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