What are Timeshares and Vacation Ownership?
A timeshare is a form of vacation ownership in which multiple parties hold rights to use accommodations for a fixed period of time each year. Typically, buyers purchase a deed to access a unit at a specific resort for the same week every year in perpetuity. Common incremental ownerships are one week or points that can be used for various lengths of stays and unit sizes.
Timeshare resorts often consist of multi-unit condominiums with amenities like pools, restaurants and activities. Some may be part of major hotel chains while others are run by independent management companies. They are found in popular vacation destinations around the world.
Vacation Ownership is a broader term that encompasses both traditional deeded timeshares as well as points-based programs, private residence clubs, and vacation clubs. These programs provide specified access to various resort destinations annually, but may not involve actual real estate ownership.
Already a timeshare owner? Please take this brief survey for a chance to win a prize in the HelloVacay Leap Year drawing on February 29, 2024 at Noon PST.
Pros of Timeshare Ownership:
- Guaranteed lodging for vacation trips at predictable costs
- Comfort of staying in residential-style condo with home amenities
- Resale potential through timeshare exchange marketplaces
- Trading timeshares for stays in other locations through exchange networks
- High-end amenities and service from branded properties
Cons of Ownership:
- Significant initial purchase costs plus recurring yearly maintenance fees
- Limited choice for vacation times and destinations each year
- Potential hassles selling if you want to exit ownership
- Possibility to outgrow property as your family and needs change
- Risk of vacation interruptions if home resort sustains damage
Timeshares vs. Vacation Clubs vs. Fractional Ownership
Timeshares
- Involve deeded ownership of real property, typically for a designated week at a specific resort
- Timeshare units may also be traded for stays at affiliated resorts within certain exchange networks
Vacation Clubs
- Typically do not involve deeded property ownership; buy into a membership program
- Use points to gain access to various resort destinations in the brand's collection for specified time frames
- Examples: Disney Vacation Club, Diamond Resorts International Club
Fractionals
- Purchase partial ownership and corresponding usage time in a shared luxury vacation property
- Popular with high-end condos, beach homes, ski resorts; may be sold in 1/4 to 1/12 increments
- Owners pay annual dues and often have more flexibility for reservations
The key distinctions come down to whether there is a deeded real estate interest, how usage rights are structured (fixed weeks vs flexible points), levels of luxury/service, and flexibility of vacation options from year to year. Important to understand these models when assessing vacation ownership opportunities.
While timeshares offer guaranteed return to the same property annually, there is some limitation in changing reservations. Club membership and fractionals offer more variety in destinations from year-to-year in exchange for higher buy-in costs and less predictable availability.
Costs of Timeshare Ownership
The purchase price, closing costs and fees associated with timeshares can vary greatly based on factors like:
- Size of ownership interest (studio vs. 3-bedroom unit; 1 week vs 4 weeks)
- Demand for season/week (peak times command far higher prices)
- Location and quality level of resort
- Timeshare developer/brand
Purchase Prices:
- Entry-level pricing from a few thousand dollars for an shoulder season studio
- Over $100,000+ for several prime weeks in a multi-bedroom unit or penthouse at a luxury resort
Closing Costs:
- Typical real estate transaction fees for title search, document prep, recording deed, etc.
- Often additional charges rolled into loan financing
Maintenance Fees:
- Covers property upkeep, taxes, management company; paid annually
- Generally range $400 – $1000 per week of ownership
Making the Most of Ownership
To maximize enjoyment, timeshare experts recommend:
- Banking time for future vacations during years when you need to miss
- Renting out unused/banked timeshares via online marketplaces
- Enrolling in external exchange networks to diversity resort destinations
- Comparing costs of exchange options to determine best value
Common Timeshare Scams to Avoid
Unfortunately the timeshare industry has long been plagued by high pressure and deceptive sales tactics. Common problematic approaches include:
- Misrepresenting offerings as free informational presentations then pushing sales
- Making false claims about investment potential or ease of reselling
- Not clearly disclosing total costs with hidden or understated fees
- High pressure tactics to sign same-day often involving hours of negotiations
- “Limited time offers” when same deal recurs or better ones emerge
Many states now offer rescission periods allowing buyers to cancel a timeshare purchase. But best to avoid by researching offerings thoroughly beforehand.
Alternatives to Timeshare Ownership
Those looking for vacation variety and value may want to consider:
- Vacation Rentals—More flexibility in destinations, accommodation types, trip lengths. Easy to book online through platforms like AirBnB, VRBO, rentals sites. No upfront costs to own, pay only for nights booked.
- Cruises—All-inclusive trips with meals, activities. Allow you to see multiple destinations in one vacation. Scales well for solo to large group travel.
- Escorted Tour Vacations—Guide-led small group excursions. Features planned activities balanced with free time. Handles logistics like transport, lodging.
- Luxury Camping/”Glamping” Resorts—Outdoor resorts with premium cabins, amenities services. Closer to nature than hotels. May be more budget-friendly.
Major Timeshare Companies
The timeshare industry features brands affiliated with major hotel chains as well as independent resort operators. Top companies include:
Marriott Vacation Club
- Over 100 resorts globally, from Costa Rica to Spain to China
- Various villa and suite sizes, focus on luxury accommodations
Hilton Grand Vacations
- 50+ properties in desirable locations like Hawaii, Las Vegas, Orlando, NYC
- Apartment-style units with full kitchens and space for large families
Disney Vacation Club
- Custom Disney resorts near theme parks in Florida, California, Hawaii
- 1-3 bedroom villas sleep families of 4-12 with premium amenities
Wyndham Destinations
- Largest network – over 220 resorts on 4 continents
- Range of price points from budget to luxury
- Popular Timeshare Destinations
Top timeshare spots attract vacationers year-round with amusement parks, beaches, casinos and natural beauty. Hot locations include:
- Orlando, FL – Theme park capital of the world and top family destination
- Las Vegas, NV – World-renown casinos and lively nightlife entertainment
- Hawaii – Tropical oasis with island culture and outdoor activities
- Cancun/Cabo, Mexico – Beaches, all-inclusive resorts, Mayan history
- Caribbean Islands – Idyllic white sand beaches and azure waters
Timeshare Unit Mix and Amenities
Accommodations span hotel rooms to multi-bedroom villas:
- Studios to 3-bedroom floor plans, some multi-story units
- Fully equipped kitchens, separate living rooms, balconies
- Resort pools, restaurants, kids clubs, spas fitness centers
