Membership to holiday clubs is increasing to the detriment of conventional timeshare sales. The best holiday clubs have the accommodation, but at prices which are rarely good value taking into account the money paid for the membership. It appears that only a small percentage of the purchase price goes to delivering the service.
The general view is that holiday clubs with memberships for a period of less than three years were created to circumvent the timeshare laws – mainly the laws banning the taking of a deposit and the requirement to offer a cooling off period. Many timeshare developers use holiday club members to fill empty accommodation and to provide leads for their sales people, but at the same time developers claim that the clubs are “taking their business away “. We believe this to be the case if not in the short term, most likely in the long term.
There are over 100 holiday clubs in Europe with over 250,000 members. Less than 50% are able to take the promised holidays as clubs have no inventory to serve all members.
The largest club operator is possibly Timelinx SA in Spain with over 20,000 members, according to their promotional material over 225,000 weeks are available for their members to holiday in but we have no means of verifying this.
- Schemes set up for a duration of less than 3 years (usually 35 months).
- Schemes set up involving intervals of less than 7 days (usually 6 days).
- Renewable purchase packs (where a scheme is sold for a period of less than 3 years but this is extendable by mean of renewal options, often up to 50 or more years).
- Points packs with sufficient underlying inventory to support the points issued.
- Points packs without sufficient underlying inventory to support the points issued.
- Exit packs which are sold according to legal requirements.
- Exit packs which are sold by some marketers in contravention of the Timeshare Directive requirements.
The holiday Packages are being sold for duration of less than 36 months, which are either outside the provisions of the Timeshare Directive and of the various national Laws, especially the Spanish Law, or circumventing these Laws. In itself, a Holiday Package can be a legitimate holiday product, offering a reservation facility for future holidays up to 35 months. The Holiday Packs are based on timeshare accommodation and are sold according to availability.
However, the RDO believes that Holiday Packs should only be sold if sufficient inventory to support them is under the control of the vendor, preferably by ownership rights or that other financial mechanisms are in place to secure the provision of the accommodation originally represented. The economics of 3-5 weeks holidays dictate that the prices of these packs should be proportional to holiday time sold with a long term purchase of the same inventory. The Holiday Packs can be sold as separate products provided that the length is restricted to purely 35 months without the possibility of renewal for a longer period of time and without being sold with mainstream timeshare products.
Financially, the high cost of a holiday package now selling between £1,500 to £4,000 for a three year duration does not justify the uncertainty of the product. Some clubs you are entitled to take two or four weeks in a year, others unlimited number of weeks. We understand members do not have to pay an annual fee, only pay when booking a holiday. Figures vary between £100 to £500 or more per holiday booking. If the purpose of purchasing a Holiday Club package is to “taste the product” why not to invest in a resale week which will save you money and be yours for a larger number of years and using the exchange network your holiday choice will be over thousands of resorts rather than only a few.
According to the RDO, holiday packs are unlikely to represent value for money but do not give rise to objections provided that the following applies:
- No possibility of extending beyond 36 month duration
- The price is economically balanced in relation to long term inventory
- The inventory is sufficient to support the packs sold and is under control of the vendor other financial mechanisms are in place to secure the provision of the accommodation originally represented
- The packs are not sold in a manner to cause confusion with mainstream timeshare products for the purpose of circumventing the Law
- Full disclosure on the product is provided in the contract
- RDO would expect the consumer to be granted a cooling off period
Whenever the above provisions are not met, the product could be in contradiction with the Law or could be regarded as a form of timeshare and should therefore comply with the requirements of the Timeshare Directive or national Timeshare Law.
RDO members are required to follow the above provisions when selling Holiday Packs.
If you are determined to purchase a holiday package, it would be safer to purchase it from an RDO member.