This article is a travel topic
Timeshared accommodation ranges from villas, condominiums, apartments, chalets, lodges and even boats. Ownership within a timeshare accommodation can be allocated through a partial ownership, lease or a “right to own” basis where the allocation of a timeshare “week” is divided into the 52 week timeshare calendar which runs almost in tandem with the standard annual calendar. Usage rights of a timeshare property normally occur annually but can also occur on a bi-annual basis. Timeshare products known as “points” are another variation whereby the owner has a quantity of points which can be used to book holiday accommodation with greater flexibility (see below).
Timesharing came about in the early 1960's as a result of vacation home sharing where four European families would each buy into a jointly owned holiday cottage to share. They would divide the usage over each of the four seasons and rotate annually to ensure that each part-owner would benefit from each seperate season equally. However, this never fully caught on as people generally didn't holiday for whole seasons at a time, leaving the property vacant for much of the year.
Timeshare ownership on a week basis has its origins back in France and Switzerland where the first vacation ownership packages were created by the French (Société des Grands Travaux de Marseille) and Swiss (Hapimag) travel companies in 1963 and 1964 respectively. A year later the concept of timesharing reached the USA with the Hilton Hale Kaanapali offering timeshared holiday ownership at the Pioneer Mill Plantation on Maui, Hawaii in 1965.
In the mid-1970's vacation exchange companies RCI (1974) and Interval International (1976) were started and created a platform for timesharers to exchange their weeks for more choice allowing owners to swap the timeshare they had the right to occupy for that of another owners timeshare week on the exchange market. Exchange companies now offer over 7000 resorts worldwide.
Timesharing grew massively in the boom years of the 1980's and led to the increasing number of resorts and brands operating worldwide today.
The 1990's saw the introduction of big name brands such as: Marriott, Sheraton and Hilton enter the timeshare industry adding big, trusted names to the timeshare industry and they still operate worldwide today.
Fixed week ownership
Refers to a specific week i.e. “Week 14” which would generally tend to fall as the first week in April. The timeshare owner would be granted the exclusive right to occupy that particular week at the specific resort in which the specific timeshare accommodation unit was located.
Floating week ownership
There is no fixed week period associated with this form of ownership but instead the owner can use an allotted length of time (usually 7 nights) within a particular period of the year. i.e. A single week to be used in the summer period. The owner of a floating week would be granted use of a particular sized unit i.e. 2 Bedroom but would not be guaranteed the same apartment each year.
There are many variations of timeshare points although all follow a similar theme whereby the owner is allocated a set amount of points each year. These points can then be redeemed for holiday accommodation either directly through an exchange organisation or through a network of resorts owned by the same developer or part of a small affiliation. Rather than the owner having to use all their points on one holiday, points can be used to book multiple holidays in different sized accommodation and at different times of year. For example, an owner may use 50,000 points to book 7 nights in a 2 bedroom apartment in the high season one year and then have three separate holidays in 1 bedroom units in the low season the next year.
Methods of use
Depending upon the specific product owned, usage rights will vary although generally will provide the following options to owners;
--Occupy the owned timeshare week(s)
--Rent out the week(s) to a third party
--Exchange the week(s) internally within the same resort group
--Exchange the week(s) externally via an affiliated exchange organisation to visit another resort
--Sell the week(s) to another party either back through the developer, through a resale company or by way of private sale
--Convert the week(s) into timeshare points
--Bequeath the ownership to whomever they wish
There are multiple options available when buying a timeshare and there are many groups who will sell a timeshared week but be aware that prices will vary dependent on which form of seller is used.
Professional resale companies can offer timeshare accommodation at a lower price than what the resort developers will offer it for and this is because they will not have to accommodate for the marketing and construction costs of the property. However, they are subject to availability and will only have in stock what is available to them from private vendors.
The management companies on-site at a resort will offer timeshare accommodation for sale in a similar way to a professional resaler with the added bonus of being able to view the property in person whilst at the resort. However, they will charge a higher price and the buyer will be restricted to that resort alone only being able to benefit if present at the particular resort where the management company is.
Direct From The Owner
Instead of using a broker, buyers can look to buy direct from the seller themselves, however this is the least trustworthy approach as an individual seller may not have a certified accreditation or be backed by a major company, so there is risk involved. However, commission to a broker will not have to be paid and an agreement may be concluded much quicker this way.
Direct From The Developer
Buying direct from the developer can allow for a buyer to be the first to own a particular week and offer them the greatest choice within the market. However, the developers market charges a premium as they have to cover their construction and marketing costs and so this is usually the most expensive route into timeshare.
When it comes to selling a timeshare the resort group will be able to help find a buyer, especially if they are part of a large group such as Pestana or Hilton. Similarly the resale marketplace is another option for selling timeshare and many reputable companies exist to provide support for those wanting out of a timeshare agreement. Sellers must first garner an idea of how much their timeshare is worth but this is not easy and will depend upon the following criteria:
--How Much A Buyer Will Spend
--When Does The Week Fall
Traditionally timeshare ownership restricted owners to their specified owned “week” and did not allow any room for manoeuvre, however, after the introduction of RCI and Interval International (II) in the mid-1970's, exchanging became a much more viable option to owners. Exchanging a timeshared week via RCI or II creates a choice of over 7000 resorts and there are many supporting companies who are affiliated to the two main bodies that provide a service of exchange. Similarly, Dial-an-Exchange offer an exchanging service to timeshare owners looking to exchange their weeks for alternatives. Ownership of a timeshare week can also be exchanged into a points based system, notably attributed to RCI, where the “points” are used as a form of holiday currency allowing timesharers to exchange their week for points and book holidays in any of the affiliated resorts that accept such method of payment. What is not clearly stated by many companies is that weeks all hold a different value and when it comes to the exchange market “spending power” varies greatly on a whole host of variables such as:
--Time of year
In order for timeshare properties to maintain the standard of accommodation they provide maintenance fees need to be paid by the timeshare owners, these fees go towards the general up keep of the resort and pay for any damages incurred during a stay. Maintenance fee levels will vary depending upon the resort and the property itself. Madeira in particular has low maintenance fees as a result of the fees only being able to rise in line with the rate of inflation for Madeira and being capped from rising at a higher rate.
Once timeshare ownership could be sold on, the 1990's saw the emergence of a timeshare resale market. Unlike other forms of property however, timeshares do not tend to increase in value and so timeshare resales generally cost much less than the same product purchased directly from the developer or marketing agent. This is because the very high costs of sale incurred by the developer mean the tangible value of timeshares is often substantially lower than the original prices paid. The two largest timeshare resale companies are believed to be Timeshare Resales USA (North America) and WorldWide Timeshare Hypermarket (Europe).
An owner may rent their week to a third party in exchange for payment to the owner. Third parties or brokers may be used in order to find a renter for a property if the owner does not want to use their week for that time period, the broker will receive a fee or commission for doing this. Finding a renter has the same problems as finding a buyer for a resale property and the liabilities remain the same but instead of buying the property the renter simply rents the week for that year.
Exact timeshare legislation varies all over the world and will be different across each nation but every timeshared accommodation is regulated by independent bodies. Every timeshare agreement must come, legally, with a cooling-off period but this will vary across nations and is usually between 5 to 14 days dependent on which country the timeshare is located.
All timeshares in Europe are regulated by the European Directive 2008/122/EC and the Timeshare Regulations 2010 (The Timeshare, Holiday Products, Resale and Exchange Regulations 2010) which also includes a 14 day cooling-off period allowing a contract to be terminated within 14 days of the agreement being signed.
Timesharers in Europe are protected by TATOC and RDO when they sign up and become affiliated members of these consumer and trade organisations as well as the laws and regulations set out by European Law.
In North America, timeshare is regulated by ARDA who monitor national legislation for timeshare agreements and disputes. As with the USA, individual states have individual laws regarding timeshare and rules and regulations vary state-wise. The main regulatory authority for timeshare in each state is the Real Estate Commission in the state where the timeshare property is located.
Within Australia The Australian Timeshare and Holiday Ownership Council Ltd (ATHOC) is the representative body for timeshare owners and they are regulated by The Australian Securities and Investments Commission (ASIC). However, it is worth pointing out that timeshare is not a financial investment but sometimes is called a holiday investment.