Today’s Timeshare Outlook

The timeshare business doesn’t enjoy a favorable reputation. Tainted by overly aggressive salespersons and buyers not fully understanding the product they’ve purchased, timeshare companies regularly show up on lists of industries drawing consumer complaints. As a result, it’s negatively impacted their status with vacationers. In addition, many folks forgo the ongoing costs of timeshare properties as the popularity of home-sharing blossoms.

“It has less to do with the sharing economy and more to do with changing demographics,” stated Christopher Henry, a member of the International Society of Hospitality Consultants. “While the model is still popular with baby boomers, the concept struggles to sell with millennials. who prefer to spend their money on unique and authentic experiences while not being tied down to commitments. Timeshares provide the exact opposite of this mindset.”

Home sharing is fairly new to the vacation industry, but that hasn’t hindered the astronomic growth of Airbnb, valued by Forbes in 2018 at $38 billion with five million daily listings. Timeshares have been conventional vacation stops for generations, appealing to the aging baby boomer market. But no one is giving up on them as they remain a $10 billion retail player in this industry, with ownership in more than 10 million U.S. households. However, timeshare companies understand they must offer more diverse opportunities to attract new owners and upsell current ones.

Timeshares can be broken into four basic groups. In a Fixed Week, owners purchase the right of staying in a property located at popular vacation destinations such as Florida, Hawaii and more for a set week each year. In Floating agreements, owners have the ability to bank their property for another location or take their week at another time. In Right-to-Use, the buyer leases the property for a set amount of time for a determined number of years. As the timeshare concept has evolved, many companies have moved to a process giving owners “points,” allowing the ability to exchange them for resorts across the nation or the world, thereby increasing flexibility to meet the changing needs of customers.

“Points-based timeshares are the most flexible. You can change location or unit size as well as the time of your vacation,” noted Sara Strock, a long-time timeshare owner and owner advocate. “However, you compete with other owners for prime locations and times.”

Other disadvantages of possessing a timeshare include ongoing expenses. Not only are owners on the hook for the initial cost of obtaining their points or property week, many also get caught in mortgages with steep interest rates. However, some can switch to personal loans while others have the price covered with cash. Probably the biggest headache for owners is that maintenance expenses are ongoing while you have the timeshare. Usually, the fees are based on a percentage of the value of the property you own. Industry sources report the average cost at $660 per year, but that amount can go up, and you have no control over its growth.

If you’re thinking timeshares are a solid investment, think again. Normally, they decrease in value. You don’t own property; you simply own the right to stay in that property. In fact, some owners wind up giving away their timeshare to get out from paying the maintenance fees. But their loss is great news for buyers who can find bargains on timeshare resale websites.

“If you’re a planner, and can plan vacations a year in advance, a points-system purchased resale can cut your vacation costs in half. In addition, you get a condo, instead of a hotel room, that has a kitchen so you can reduce costs by eating in,” noted Sara. “A lot of resorts can be very high end. However, a lot are not. Timesharing is not for everyone. Last-minute travelers and those looking for high-end accommodations and services won’t really enjoy timesharing or get the value out of it.”

Many timeshare owners embrace the ability of planning vacations at award-winning getaways or accommodations and not worrying about the actual costs of paying for a five-star resort. Also, you might enjoy gifting your friends or family your timeshare or donating it to a nonprofit. Some use them for family gatherings. But if you’re contemplating a purchase, don’t make your decision based on impulse. Do your homework; this is a purchase that will be with you for the rest of your life.

“Research, research, research,” stated Sara. “Use the internet, sources like Facebook groups, TUG2.com and others to determine if a timeshare is right for you. Then, consider resale first if you’re interested.”

Many owners point to the fact a timeshare forces a family or couple to actually plan a vacation and take it. Whether you’re looking to try a home-sharing option or buying into the timeshare industry, the important thing to remember is to actually take your vacation, something many hard-working Americans forget to do. ■

Sources: travelandleisure.com, usatoday.com and tripadvisor.com.