When timeshare came about and during the heady days of the seventies and eighties it was a simple product. You purchased a fixed week at your favourite resort and in your favourite apartment or villa. You knew exactly where and when you were going every year and also for a very fair annual maintenance fee. Three seasons were created, Red (high season), White (shoulder season) and Blue (low season) denoting the time of year of ownership. Then it all changed.
Floating Weeks
Resorts often thought that the fixed week was inflexible to owners so they invented floating weeks. This allowed owners to change their dates within their seasons. Blue could only use blue weeks, white could use blue as well and red could use the whole year. For the most part this worked but subject to availability it was not always possible to get your exact date and you may not get your designated apartment or villa. Maintenance fees of course are still payable.
Points
This is where it all started to go wrong. With the prominence that exchange companies were now gaining, it was decided that an exchange currency was needed, enter points and also a massive problem. With fixed weeks the maths are easy, one apartment has 50 available weeks to sell (two are always kept by the resort for refurbishment etc). So with 50 weeks you could have a maximum of 50 owners owning one week each, not so with points. The same apartment may be sold hundreds of times over; the points are pertinent to the resort or developer not an individual property. This is where availability became, and still is a serious issue. Maintenance fees are still payable but now based on each point so the more points you own, the greater the cost.
Fractional Ownership
In essence this is timeshare in a different wrapper with the major difference being the timeshare is simply the use of time, whereas fractional ownership is normally a deeded ownership meaning that you own a fraction of the properties bricks and mortar. Usually retailed with fewer owners than conventional fixed weeks and at the end of the term the theory is that the owners may sell the entire property. Often deemed to be an investment but many resorts clearly state in their contracts the main purpose of the purchase is for holidays and should not be deemed to be an investment because it simply isn’t. The EU Timeshare Directive also outlaws the selling of any form of timeshare as an investment. Maintenance fees are still payable.
Availability
Apart from fixed weeks and Fractional ownership, availability has become a significant problem especially in high season. Even the exchange companies often fail to satisfy requirements. Factor in the online booking platforms that appear to offer virtually all timeshare resorts then even getting into your home resort may prove a difficult task. Whilst it may be possible to make a reservation for the dates you require, the trade off might well be a much inferior destination or resort.
As if to add proof to the supposition that points don’t work, the Timeshare Advice Centre ran a poll (now closed) for owners to say whether or not they were satisfied with their ability to book the accommodation they have paid for. Participants could select between the main European developers affected (Club La Costa, Azure, Marriott, Silverpoint, Diamond, MGM and “other”.)
They were then given six options ranging from “I always find availability” to “I’ve given up trying to request availability”
Below we publish the results
- I always find availability: 0.48%
- I sometimes find availability: 2.12%
- I rarely find availability: 61.10%
- I never find availability: 30.56%
- I´ve given up trying to request availability: 5.74%
An overwhelming majority 91.66% of timeshare owners who responded reported that they rarely or never get the availability they want. A small but significant amount, 5.74%, gave up even trying to make the system work, we rest our case.
Maintenance Fees
Given the problems with getting the holidays you paid for, the situation is exacerbated by the fact that maintenance fees are increasing like a runaway train. In general maintenance fees only rise and have really become an open chequebook for the resorts and developers to make money. It should also be noted that against popular understanding, maintenance fees do not pay for holidays, they pay for, as it says on the tin, maintenance.
Going backwards
Timeshare resorts were once the domain of exclusively owners or club members, not anymore. Globally virtually every timeshare resort is open and bookable by members of the general public. By way of example, the once exclusive Club la Costa resorts have now jumped into bed with Wyndham Hotels to “mop up” excess availability. Those who book through Wyndham simply pay for the period of their stay, for this they can use all the resorts facilities but haven’t had to pay any large upfront fee and certainly won’t have to continue paying for resort maintenance once their holiday is over; we can see CLC owners loving that….. not!
Many timeshare owners at resorts where the public are allowed in have reported a general lowering of standards. Little things like free towels at the swimming pools have gone and although sounding snobby, a deterioration in the both the quality and behaviour of non owner guests.
So we have gone from holiday resort to private owners resort back to holiday resort, if this isn’t a retrograde step then what is?
Our thoughts
Taking all the above into account and when you factor in that points or weeks have little or no asset value, it would appear that a gloomy picture is emerging. Fractional ownership hasn’t been around long enough to prove its worth but indicators are that the concept will fair no better than traditional timeshare.
In general products evolve but in the case of timeshare it appears to have arrived in an enlightened age, offered an innovative product and now has taken giant steps back into the dark ages.
We often wonder how current timeshare owners feel about the backward evolution of what they once paid a considerable sum for and are still paying a small fortune in annual maintenance fees. The once top notch exclusive resorts are losing their lustre and exclusivity at the same time. To survive, whatever the product is, it has to evolve, so why have timeshare developers decided to go in the opposite direction, we believe the answer is simple, money.
The volume of sales has fallen; owners are leaving, the younger traveller is just not interested so to fill the financial gap remove exclusivity. Let the world and his wife pay for, and use the facilities and hey presto, gap filled. Gap filled certainly but at the expense of loyal owners.
If this story rings bells and you are a now unhappy timeshare owner, we would love to hear your story. This is a follow up article to one we published recently, should you wish to, you can read it here.
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