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What is Vacation Ownership?
Vacation Ownership "Timesharing" is the right
to use specific weeks of a resort during a specific time period.
Simply put, it is the pre-purchase of future vacation weeks.
Timeshares are more deluxe than simple hotel rooms. Condominium-style
units usually feature fully-furnished kitchens, generous living
areas, and ample sleeping options for family or friends. Ownership
of a timeshare is very similar to ownership of a condominium
except that your rights are limited to a certain week (or
weeks, if you purchase multiple intervals) during the year.
The form of ownership can be deeded, leased or licensed. The
license is somewhat different, in that it is most commonly
a membership in a club. Providing you are a member in good
standing, you have the right to use the club and all its amenities.
Be sure to read and understand all the terms and conditions
of your club membership before you make the decision to buy.
Most vacation ownerships consist of either a deeded interest
or a leased interest for a specific number of years. A deeded
interest is owned outright forever. It is an absolute right
that can be sold, leased, or even willed to your heirs. The
less common leased interest is much like an apartment lease
except right to use it is restricted to a specific week during
the year. Upon the expiration of the lease term your right
to use it will generally terminate and return to the resort.
With a leased interest you should know the terms and conditions
of the lease prior to making the decision to buy. The time
of your use can be either Fixed or Floating. Fixed time is
a specific week during the year usually defined by a number.
Generally the week will begin on a Friday, Saturday or Sunday
and is given a number starting with the first week in January
and continuing through the end of December. (Example - week
14 might be April 7 through April 13.) Floating time means
you have the right to select any available week within a certain
season of the year. Therefore, if you own a summer season
week you could pick any week that falls within the defined
summer months. However, competition between existing owners
for prime weeks in very desirable locations can impact availability.
It is important to find which type of use best fits your specific
travel needs. Each resort is different and offers various
benefits to its owners. Many resorts give special reduced
rental rates for extra nights or use of other resorts that
are owned by the developer. This can add to your flexibility
and provide substantial savings on vacation costs. Also, consider
how and where you normally vacation. This is very important
in making your decision about where you should buy and what
you will have to trade. We welcome your comments and appreciate
your feedback.
The History of Vacation Ownership
The vacation ownership (timesharing) industry can be traced
back to its European origin in the 1960s. Superdevoluy, a
ski resort in the French Alps, is the first known vacation
ownership program in the world. The ownership of individual
weeks guaranteed reservations for those who wanted to ski
the area every year. It was an immediate success. By the 1970s,
some faltering condominium projects on St. Thomas and in Fort
Lauderdale and Puerto Rico were converted over to vacation
ownership. Thereafter, timesharing became an increasingly
popular vacation alternative. Once the United States embraced
the concept of vacation ownership, it began to gain wide acceptance
worldwide. Sales jumped to over 50 million by the mid- 1970s
and have climbed to 6 billion annually today. Vacation ownership
has enjoyed substantial growth over the years with approximately
5 million timeshares sold since 1980. Currently, there are
over 5,000 vacation ownership resorts in 90 countries around
the world. Exchanging a vacation ownership week in one resort
for that of another resort was introduced in 1974 and brought
new elements of variety and flexibility to the vacation experience.
Although there are many exchange companies available that
provide excellent service, the two major players are Resort
Condominiums International (RCI), which has approximately
3,500 member resorts, and Interval International (II) with
approximately 1,800 member resorts. Combined, these two companies
provided over 1,600,000 exchanges last year. During a 30-year
span, the industry has grown from small (15-20 unit) hotel
conversions to the high-quality condominium resorts of today.
The evolution of the industry from scattered entrepreneurs
to well managed professional development companies has brought
with it a noticeable change for the better. Definitive leaders
have emerged and created standards and ethics for management,
marketing and sales practices. One such organization is the
American Resort Development Association (ARDA) whose members
are required to comply with an established "Code of Ethics."
The recent entrance into the marketplace by major hospitality
chains such as Disney, Hilton, Ramada, and Marriott has greatly
enhanced the quality and image of the industry. Vacation ownership
resorts today are luxurious, have a wide array of amenities,
and are well located. With the advent of these stronger and
more professional development and management companies, and
with the weeding-out the less desirable developers and marketers,
the industry is now experiencing a very positive public image.
One of the industry's leading analysts (Ragatz and Associates)
concluded that the majority of timeshare owners are pleased
with their purchase and, in fact, many now own multiple weeks.
The future of vacation ownership is very bright and has tremendous
potential.
How to Buy a Vacation Ownership
Interest Is Buying a Timeshare Right for You?
Looking across the vacation spectrum, we find those who enjoy
returning each year to a familiar spot as well as those who
look to visit a new destination every year. Many fall somewhere
in between. No matter where you are on the spectrum, timesharing
can meet your travel desires. When you buy a timeshare, you
are making a commitment--to yourself. This commitment involves
your desire to vacation every year. While you often may choose
to go to the same resort, you can also use an exchange network
to go elsewhere when the mood strikes. Certain features
may be extraneous if your only purpose is to use the resort
for your own enjoyment. If you plan to trade your interval,
however, for other timeshares throughout the world, a resort
unit with more features will fetch a better trade, or a higher
price, should you decide to sell the interval down the road.
Keep in mind that you do get what you pay for. Although there
are bargains out there to be found, this is still an emerging
market. As a prospective buyer, you must also ask yourself,
"What are my vacation criteria?" Some primary considerations
are family, airfare, recreation, meals, etc. "Do I want
to guarantee a certain week every year? Can I only travel
when the kids are out of school?" Find a resort that
fits your vacation style. The Dollar Value Consideration Above
all else, take into account the ever-present effect of inflation.
Since the 1950s, the travel industry has noticed an approximate
5% annual increase in dollars spent on vacations. With the
acquisition of a timeshare unit, you can start to curtail
those costs. An annual maintenance fee of $250 to $450 ensures
a week of vacation that has a fixed accommodation price per
visit. I'm Ready to Buy a Timeshare After all the initial
considerations and deciding to purchase, it is time to start
looking for a resort that fits your criteria. To start narrowing
down your resort choices, take a look at our online listings
or at a timeshare catalogue. Everyone who is a member of an
exchange organization gets a catalogue each year. It holds
up to 3,500 developments throughout the world. Unfortunately
these catalogues are not available in your local library.
You must borrow one from someone who is already a timeshare
owner. Our ResortBase.com index of listings, however, is always
available for review. Let's say you've gotten to the point
where you have two or three really attractive resorts in mind.
They all have the features you're looking for, they are in
your price range and you can see yourself committing at least
10 years of vacationing there. If at all possible, visit the
sites. Start getting some feedback from unit owners and other
sources; see what they say about the resort and the price
you've been quoted. If your chosen site is still under development,
there are sure to be on-site sales people who will enthusiastically
give you a one- to two-hour tour of the whole facility. Be
aware! They are there to give you a thorough sales pitch.
If you have low sales resistance, it may be better for you
to look around on your own and ask questions on your own terms.
Be sure and pick up all available literature and to get all
terms and conditions before finalizing a sale or rental. The
Cost of Ownership When comparing the cost of a timeshare to
that of a condominium, it is misleading to see that the condo
costs thousands less than the timeshare. You'll find that
timeshares sold in off-peak seasons are much less costly and
that the condos often are developed on land of inferior value.
Condos are usually located in a residential surrounding while
a timeshare resort may be nestled in a forested valley or
along a private beach. Where would you rather be? Check to
see if the resorts that interest you have resale programs,
instead of purchasing directly from the developer. This is
the best route for the thrift-minded buyer who can purchase
a choice unit with discounts of up to half of a developer's
asking price. The third way to buy is through a private purchase.
Any of these methods deal with the underlying factors of interest
on your original purchase price and with the loss of capital
after the purchase through a lower resale price. Two pointers
when dealing with agents: first, they are agents of the vendor
(a resort or owner) and are obligated to maximize the vendor's
return of investment. Second, never be afraid to submit a
lower asking price than what the agent recommends. The seller
may agree to the lower price anyway. In some circumstances,
your resort of choice maybe so new that there are no resale
units yet. It is possible that the developer's asking price
is still within your budget. In that case, go for it! It is
within your right to submit a lower bid for a new unit to
the developer. They may accept as well. As for the private
purchase, although going through the process of contact and
final negotiations may be much more informal, you must still
deal with all the problems of legally "closing"
a sale. We recommend using a qualified resale agent or attorney
who can expedite the whole affair. Other Costs After a deal
is made, the buyer incurs certain "closing costs"
($300 to $500 for escrow, title, insurance and recording fees).
These are not included in the selling price and are a one-time
expenditure for the buyer. In addition to the resort's annual
maintenance fee, also figure on about $60 a year for membership
with an exchange company, and $90 to $125 for each exchange
you do, depending whether you trade a domestic or international
timeshare. Good luck in finding just the right vacation ownership!
Exchanging Your Vacation Ownership
Now that you have become the owner of a vacation interval
you can start enjoying the use of it. You may find that using
your home resort is very convenient but don't forget about
the endless opportunities of the exchange system. Chances
are, your resort is affiliated with one or maybe two exchange
companies. You can become a member of your home resort exchange
company or use any of the another independent exchange companies
which may provide special services to meet your travel needs.
Either way, exchanging is one of the major reasons many people
purchase a timeshare.
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