Timeshare Consumer Guide

What is Timeshare ?

What is Timeshare?
It is a firmly established concept which allows you to buy the use of a holiday home for the same weeks or weeks every year, at a fraction of the price of owning it all year round and without the exorbitant cost and worry of year round maintenance. In effect you are pre-buying holiday time, which you can use yourself, rent out, give away, sell or bequeath as you wish. Timeshare has many different variations with the same basic concept. It is also called vacation ownership, holiday ownership and club time It is one of the fastest growing sectors of the holiday industry and with the arrival of large hotel groups that saw the benefits of Timeshare such as Marriott's Hilton, Hyatt etc. the image of Timeshare has changed.

How did Timeshare start?
The French re-invented Timeshare in 1966 at a French resort - some say it was a sky resorts, others luxury villas in the South of France - (although the genuinely earliest known Timesharing in Europe was when the Albert Hall in London was built in the late 19th Century, when those subscribing to the building fund received in return a right to a specific seat and tickets at specific intervals). Timeshare was quickly seen to be a way of providing holiday homes in areas of beauty where housing was in short supply and at exorbitant prices. During the recession the luxury homes were not selling but sold in shares they become affordable to many.

The concept was simple and economic and soon spread to Switzerland, Japan and the United States. The Americans are firm believers in Timeshare and many are multi-week owners. The first project in Britain opened in 1973 and it is estimated that there are now about 550,000 British Timeshare owners in the UK and abroad.

Is it a good investment?
Timeshare should not be considered as a form of property speculation. It is an excellent investment in leisure however, assuring you of the highest standards of holiday accommodation and amenities for many years to come.

What are the advantages of Timeshare if any?
Firstly your holiday accommodation is paid once and for all at today's prices, thereby ensuring that a major part of your holiday costs are cushioned against rising costs in future years. Compare, for example, the cost of a weeks stay each year in a top class hotel, add the minimum amount of RPI and you will see that in only a few years, it will far exceed the cost of a weeks ownership. Remember, you will also be the owner of an asset that you can let, sell or bequeath. Because the purchase of your holiday home is shared between several people, you can enjoy a high level of design, furnishings and amenities, at a fraction of the cost of purchasing outright. The same applies to maintenance costs, which being shared, are kept to a minimum.

The property is looked after by a resident management team all year round, so you have none of the security or damage problems associated with single owner holiday homes. There is of course the very real pleasure of returning each year at the time of residence and meeting old friends and entertaining guests in familiar surroundings.

Another very attractive reason for owning timeshare is the opportunity to exchange your week for a week at any of more than 5,700 other timeshare resorts in over 101 countries worldwide. For this you must become a member of an exchange organisation. You may choose to return to your home resort year after year, trade it for any of the thousands of affiliated resorts throughout the world, or alternate back and forth between the two! It is this kind of owner flexibility that brought the timeshare industry from nothing more than a great idea 30 years ago to the multi-billion dollar industry it is today.

What is a management fee and why should I pay it?
Maintenance fees are established and collected by the Resort Management Company to maintain the property, pay insurance, utilities, refurbishing and taxes. These fees vary from resort to resort and with the type and size of the unit purchased. , typically ranging from £200 to £350 for a occupancy 4 unit. If you fail to pay the maintenance fee due, you will risking loosing your timeshare and possibly having the debt marked against your credit records, or in a worst case scenario, being chased through court by the management company to recover the monies.

What can I do with my Timeshare and can I bequeath it to my next of kin or a friend?
Your timeshare is part of your estate so you can bequeath it to whomever you wish. You can use it yourself, lend it to friends and family, rent it, save it for two years or borrow from future years. You can sell it and of course you can exchange it for other luxury resorts around the world through R.C.I. and I.I., or Dial and Exchange.

Can I exchange my Timeshare weeks for another place?
Most reputable Timeshares sold are exchangeable around the world through RCI, II, DAE or other exchange organisations.

What is an Exchange Company and how does it work?
There are several timeshare exchange companies. The most known are Resort Condominiums International (RCI) and Interval International (II). These exchange companies are affiliated with over 5,000 resorts across the globe. The concept is really quite simple. Timeshare exchanging means to trade your week at your resort with another timeshare owner's week at another resort. There is now another exchange company, Dial an Exchange (DAE), which although much smaller, offers an efficient and friendly service at much lower rates. Obviously the choice of resorts is more limited.

See exchange companies for more information.

What is the Difference Between Freehold, Leased, and Licensed Timeshare?
Most timeshare ownerships are either freehold or leased for a specific number of years. A freehold timeshare is like any house purchase in that you own the timeshare outright forever. The freehold property can be sold, rented or even willed to your heirs. A leased timeshare property gives you the right to use a specific week at the property for a specific number of years typically ranging from 20 to 80 years.

When the lease expires, the right to use the property terminates and normally returns to the selling resort. Although gaining in popularity, probably the least common form of timeshare ownership is licensing. The licensing arrangement normally involves membership in a vacation club. As a member in good standing, you have the right to use the club and all of its amenities.

What is a Fixed Timeshare Week?
A fixed week is a specific week during the calendar year usually identified by a number. Different resorts use different calendars. Ownership of a fixed week allows you the use of the unit for that specific week annually for as long as you own it.

What is a Floating Week?
A floating week is a week that may be used anytime during the year subject to resort availability. It is usually related to seasons - high, medium and low. Every year you will book with the resort your desired holiday period within the season you own or lower graded season. Due to competition among existing owners for prime weeks, availability may vary. High and low seasons vary from resort to resort. Be sure to investigate this before purchasing to avoid disappointment.

What are Points?
The points system is a relatively new form of timeshare ownership. This system allows the owner to purchase points to be used for travel during specific seasons of the year. The more points purchased, the more flexibility offered when wishing to travel during high season. More points will entitle you to larger units or a higher standard resort. Another advantage to the point system is that it provides you with the flexibility to use a certain number of your points towards a one-night stay or up to the maximum number of weeks purchased.

Flexibility is a major advantage to the point system, although everything is based upon availability. Nowadays points are a very popular system. However, if you need school holiday time, you cannot beat owning your own week in August, guaranteed occupancy for you year after year.

What is a Holiday Club?
It is a very recent Timeshare format which has its pitfalls. Click here for full details.

What Does it Mean to Spacebank a Week?
Spacebanking means to “deposit” your timeshare week with an exchange company to be saved for use at a later time in a different resort.

What is the difference between Red, White, Blue or High, Mid, Low?
Each color serves as a rating of the overall desirability of a particular week at a timeshare resort. Super Red is Peak season and the most desirable time of year to own, Red is considered high season, and is followed by white and yellow, and then blue and green, which are considered off-season.

What is an even years or odd years Timeshare?
Alternative years ownership allows the owner to use of the resort every other year.

What is a Gold Crown or Five Star resort?
A Gold Crown Resort is the equivalent of a Five Star rating in the RCI (Resort Condominium International) system. II (Interval International) uses Five Star to identify the most prestigious resorts, such as the rating for hotel groups.

What if I need to sell my Timeshare in the future?
Some resorts will handle the resale of your Timeshare, others will not as they need to sell their own stock. It is imperative to keep up with the payment of your maintenance fees to avoid repossession of your Timeshare through arrears in the maintenance charge. There are various Resale Companies in the UK and the continent and in the US offering different selling packages at different cost to the seller.

Please bear in mind Timeshare is not easy to re-sell, you should not buy it with a view to make a profit or to get rid of if you do not like it much.

For more information on selling timeshare, see our information on selling pages.

Why are Prices so low on the Timeshare resale market?
It is no secret that upwards of 50% of the resort developer costs are sales and marketing related. When you purchase directly from the resort, unfortunately you are paying an inflated price to absorb all of the administrative and marketing costs associated with the sale of the property. When buying on the resale market, you only pay for the true fair market value of the property!

As a timeshare resale buyer, you not only benefit from the use of the property, but you also enjoy savings of 30-50% or more! Obviously you may not have such a wider choice, but the resale market has matured and the resale inventory is nowadays very attractive to buyers.


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© Timeshare Consumer Guide 2009