Top 8 Reasons Not to Buy a Timeshare
Coalition to Reform Timeshare Staff | July 24, 2019
You Don’t Need to Buy A Timeshare to Enjoy One
Thirty years ago, when timeshare developers controlled the information flow about their products, average travelers were often sitting ducks, pressured by aggressive sales agents who would say and promise just about anything to get consumers to sign a lifetime purchase contract.
Today, that’s all changed thanks to the global information explosion that was caused by the adoption of the Internet and wireless technology. Savvy consumers can do research online about virtually any subject to inform themselves about products before they buy.
According to a recent travel industry study, more than 50 percent of all consumers make ALL of their travel arrangements online by using their cell phone. Because third-party reviews and travel websites are readily accessible, timeshare companies no longer control the dialog though they still use many of their traditional high-pressure sales tactics to close a deal.
In today’s global marketplace consumers are now better equipped than ever to make well-informed travel decisions. However, timeshares are still a puzzle to many who buy, then regret, their purchases. To help solve some of the puzzle, the Coalition offers consumers…
The Top 8 Reasons NOT to Buy a Timeshare:
- You don’t have to buy a timeshare to use one. Timeshares are easy to rent, either directly through a timeshare company or, for those looking to save money, through third-party online travel agencies such as TripAdvisor, Expedia and Booking.com. Savvy travelers can also rent (or buy) timeshares directly from owners on sites like RedWeek.com, an online listing service that has 2.6 million subscribers. So instead of buying, just rent a luxurious timeshare villa and enjoy the savings.
“The reality is, you don’t have to be an owner to access timeshare inventory,” says Coalition Founder Brandon Reed. “Oftentimes, you have better access as a non-owner, because the timeshare companies frequently sell weeks to online travel agencies who rent them out as hotels. So why take on the liability?”
- Timeshares are still far too expensive. The average price for a single timeshare week, sold by developers at sales presentations, was $21,455 in 2018. At higher-end resorts, such as the Hilton Elara in Las Vegas, a typical points package is $60,000. No one needs to pay that upfront cost to use a timeshare. Resale values for that same Hilton timeshare range from $2,000 to $27,000 on RedWeek.
- Timeshare maintenance fees are a huge burden, every year, whether you use your timeshare or not. In addition to the upfront purchase price, owners have to pay annual maintenance fees that, on average, are $1,000 per year and may increase annually with no cap. And, in high-value destinations at brand-name resorts, the annual maintenance fees range between $2,500 and $3,500.
- Timeshares come with lifetime contracts that trap owners and, in some cases, their heirs, “in perpetuity.” The contracts are one-sided (because they were written by and for developers) and include NO cancellation clauses for buyers who might have medical or financial hardships in the future (which is extremely common). Renters, in contrast, pay less money up front to use a timeshare and have NO long-term obligations to the timeshare developer.
- Timeshare companies will do almost anything to prevent an owner from getting out of their timeshare. Brand-name timeshare companies, with some exceptions (e.g., DISNEY and Marriott) aggressively undercut the resale market by imposing restrictions on usage by resale buyers. They also impose arbitrary transfer fees on these transactions to drive up the price of the resale. Further, several of the major timeshare companies also actively punish and/or threaten owners who try to rent their units to offset soaring maintenance fees.
“Once you are in, you’re never out,” Reed said. “We talk to lots of owners who pay maintenance fees every year but cannot get reservations at their resorts. So, then they use Travelocity to book reservations to travel. It’s crazy.”
- A number of timeshare developers have mounted an insidious legal campaign to eliminate attorneys and third-party exit companies that help people get out of their contracts. This is the ultimate act of bad faith in customer relations. Developers, going back to the 50-year beginnings of timeshare, oversold timeshares as prudent investments — an outright lie — saddled consumers with contracts that became more expensive every year, frequently made it difficult for everyday owners to get reservations, then tried their best to prevent owners — including happy owners — from getting out of straitjacket lifetime contracts.
“The timeshare companies already enforce anti-consumer contracts, but now they are fighting to make them even more anti-consumer,” Reed said. “Any reasonable person would ask, why is there an entire industry devoted to help people find legitimate exits from timeshares?”
- A timeshare purchase should never be considered a financial investment since they have little to no resale value or prospective buyers. If you can sell a $50,000 two bedroom, two-bath oceanfront brand-name timeshare week in Maui for more than $5,000, you are a lucky timeshare seller. Why? Because thousands of owners are desperate to sell their intervals while hundreds, if that, may be interested in buying.
- The resale market for legacy resorts, which represent 70 percent of the 1,580 timeshare resorts in the US, is even worse. Older, independent timeshare resorts, even in prime-area destinations such as Lake Tahoe and Scottsdale, will offer resales for $1,000 to $2,500 — and be happy to get it. In Hawaii, those oceanfront condos will sell for $2,500 or so — maybe.
The Coalition to Reform Timeshare is advocating for effective reform and real standards in the timeshare industry to help those negatively affected by timeshare. Help make a difference. Join the movement and sign the petition to #ReformTimeshare.