The concept of timesharing goes back to a ski resort in the French Alps. In the mid-’60s the owners began to sell individual shares to those who wanted to ski the area on specific weeks each year.
In the early 1970s, a few condominiums in St. Thomas, Fort Lauderdale and Puerto Rico followed suit. By 1975 there were 45 resorts in the United States with about 10,000 members; today the numbers are astronomical — more than 4,000 resorts in over 80 countries, with sales running about $6 billion annually. When the concept first took shape, buyers had to take fixed weeks that were not exchangeable. Now there are floating time, split weeks, quarter-shares, points and myriad exchange possibilities.
And most timeshare resorts are linked to an organization that offers to arrange exchanges with owners in other resorts, normally for a fee.
Basically, timesharing offers the buyer the ability to use resort accommodations for a certain period each year without the responsibility of ownership. The monthly maintenance fee is divided among the “owners” based on the number of weeks they have purchased. The two ways of timesharing are: “Ownership Interest,” offering a title to the property, and title insurance and the ability to lease, sell or mortgage as with home ownership; or “Right to Use,” allowing occupancy rights for a specified number of years with no equity position.
Hidden Traps
For the uninitiated, the road to timesharing is often littered with hidden traps. One Pinehurst couple recently changed banks because the nearby one they had always used closed. An ad from a bank down the street offered a free three-day vacation if they would open an account there. They figured “why not,” and changed over their account, receiving a handsome color brochure describing the many wonderful places they could go for free. They chose a resort in Daytona Beach, but when they arrived were told they would not be staying at the glamorous hotel described in the brochure, but in a small motel down the road apiece. They were invited, however, to tour the resort and listen to a “short presentation” about the facilities.
As they sat down with several other families, “Dick,” the sales manager, said, “We’re going to have some fun today. I’m not going to beat you up. All I ask of you is an open mind.” Four hours later, after being exposed to stories about his losing a son, his wife’s cancer, his bout with alcoholism and miraculous recovery, they were asked to sign on the dotted line for, you guessed it, a timeshare for a high five-figure amount. When the couple said “no,” they were offered another free gift, which turned out to be an opportunity to invest $1,800 in a limited number of “points” good for stays at the company’s worldwide list of timeshares, with no maintenance fees. After accepting the offer and returning to Pinehurst, they found that most of the units offered were second-rate motels and that, in fact, the timeshare company itself owned few world-class opportunities anywhere. Because the short grace period by which they could have legally cancelled the contract had passed, they were told they could not negate the contract they had signed. Only through the intercession of the bank that had provided the offer, was the couple able to void the agreement and recoup their investment.
Another horror story was related by Jonni Ryon. She took a free vacation offered in Myrtle Beach years ago. She agreed to listen to the presentation in the sure knowledge that she would not buy.
“The salesman was smooth, handsome and persuasive,” Ryon said, “and the most compelling selling point was that he would always be available to me, that I could call him direct and he would help me to achieve whatever vacation I wanted. I bought 154,000 points that supposedly guaranteed me either one week in prime time or two weeks in less-than-prime. It was an absolute, outright lie. When I called a few weeks later, I was told he was no longer with the company.”
Since then, she has never been able to get the time or place she wanted.
“One time,” she says, “I asked them six months in advance for any place in Florida any time in January, February or March. I was informed that nothing was available. I’ve now spent over $2,000 trying to sell my shares on the Internet and with ads in various publications. And the price I’m asking is only half what I paid for it.”
Positive Side
But let’s look at the positive. Ann Brechtelsbauer of Pinehurst currently owns nine timeshares. She and her husband (now deceased) started years ago when they were planning their retirement. A friend referred them to Myrtle Beach, and that was their first purchase.
“It’s important to realize,” she says, “that as in everything, there are different levels of timeshares. My advice is to buy top quality or don’t buy at all. There are two companies, Interval and RCI, that classify the offerings by number of stars. If you try to buy cheap, you’re going to run into problems.”
She says that she has never had any trouble getting exactly the place she wanted at the most convenient time, whether it’s two weeks at The Manhattan Club across from Carnegie Hall in New York City or The Heritage Club in Harbour Town in Hilton Head in high season, with golf thrown in.
“I can make reservations up to 13 months in advance, “ she said, “and I know the place is going to be spotless, beautifully decorated, and loaded with amenities.”
Betty Rossi echoes Brechtelsbauer’s experience. She started in 1983 when she and her husband were visiting Hilton Head for a medical convention. It happened to be in May, a gorgeous time on the Island, and they thought how wonderful it would be to return at that time each year from Vail, where they were living at the time. Since then, delighted with their experience, they have purchased timeshares in Beaver Creek, on the Panhandle in Florida, on the water in West Palm Beach, and yet another in Hilton Head. With their exchange program, Rossi has traveled to France, the Costa del Sol in Spain, in addition to England, Scotland, Germany and Italy on points, and a cruise to Alaska as well. With her five ownerships, she uses a consultant in Salt Lake City who starts early to secure the times and places she wants.
Ed and Jean Ely offer a slightly different read. Years ago, after a presentation, they purchased a week in Mexico. When they arrived, they were shocked to see a rundown, not-very-clean place they never would have chosen. As they were sitting on the beach one day, a man approached and asked if they would like to see the most beautiful resort in Mexico. They figured that, even if it was a con, they would like to check it out, so made an appointment to take a look. It turned out that the man wasn’t exaggerating, and they bought a timeshare on the spot. Since then they have returned every year and consider it one of their most enjoyable vacations. Going back to the drawing board on their original decision, they realized that their purchase of the minimum number of points was not giving them the kind of quality or service they wanted. Instead of trying to get rid of their investment, they upgraded by buying extra points for much better quality resorts than the shoddy Mexican motel.
It’s obvious that many people who have bought timeshares have enjoyed using them. The fact is, however, that buyers should not view their purchase as an investment, because the resale value is usually far less than the original payment. Because of this, buyers with limited funds might do well to go into the Internet and check for resales. On the plus side, this precludes having to sit through interminable, high-pressure presentations.
Bill Rogers, founder of the Timeshare User’s Group (www.tug2net) says “Resale prices are often 50 percent lower than new.” Those who have been “tricked” into attending a presentation by the offer of a vacation or free gift might do well to remember that the presenters are more experienced in persuading people to buy than the potential buyers are in resisting a hard sell.
How Does It Work?
Once you have purchased a timeshare, you decide whether you want to spend your vacation in the resort you “own” or want to trade those points with another owner in a different area of the country — or world. These are called “fixed” or “floating.” When you place an exchange request, the company compares the week you’re asking for to the weeks that have been given to them by other members, to find a suitable match. If the resort week you want is available at the time of your request, an exchange will be confirmed instantly. Many timeshare owners have found that it’s difficult to get through by phone, so they try to make bookings via the online exchange, which often shows full-motion tours of selected resorts. Interval.com, which is part of Marriott Vacation Club International, will give you the alternative of depositing your time first so the company can use your time to answer another member’s request, or requesting first, to retain your week until you receive an exchange confirmation. They say that using the former method improves your opportunities for exchange confirmation. The more flexible you can be with the resorts you request and the dates you can travel, the easier it will be to get an exchange confirmation.
Their “Interval Gold” membership, which Brechtelsbauer has, allows her to trade toward the purchase of a cruise, golf or spa vacation. She can save on airline reservations, dining, or car rentals. Concierge services include having someone else shop, make dinner reservations or research vacation activities. Regular members may upgrade to Gold Standard by purchasing more points. The Marriott plan works well for those with the leisure to travel and the income to enjoy it. Indeed, the company reported $1.2 billion in timeshare sales last year, with 50 percent coming from owners buying additional weeks or referring friends.
Working couples with kids in school usually require a specific vacation time, so they would probably want to buy the “fixed” week in a place they like. After the original payment, there is an annual maintenance fee that is determined by the number of points purchased. However, those who are retired and want to have many venue options, may prefer to select the highest quality resort with the most features, thus making the “home” resort most attractive to potential traders.
Several conclusions may be drawn:
There is no free lunch. When you see that offer for a wonderful vacation, you are going to sit through a sales pitch that will be hard to resist.
If you do buy, don’t do it with the intention of saving money on your vacations, but for the knowledge that you will be going to a clean, attractive resort with many amenities and excellent service.
Don’t buy the least number of points unless you intend to visit the same place every year.
If you are on a tight budget, but like the idea of timesharing, by all means explore the savings potential of a resale.
If you can afford it, the name of the game is quality...quality...quality.
If you are thinking of buying a resale, visit the resort first. Compare the cost of just staying in a condo each high season with alternative cost of owning a timeshare over a five or ten-year period.
One thing is certain, if you go the quality route, you’re probably more likely to wind up a happy camper than if you take the low road. But remember, if you have little resistance to sales pitches, stay away from those free vacations!
B.J. Dunn is a Pinehurst freelance writer.
