How Timeshares Work.
A Consumers Guide to Vacation Ownership
By Island Consulting Realty
TIMESHARE 101THE BASICS
Started some 30 years ago in the French Alps, vacation ownership
started out with the idea of being able to exchange ones vacation
accommodations with someone elses. While not everyone could
afford that second home at the beach, by owning just a segment of
that home, or condo, it now came within most peoples reach.
Add an exchange organization to implement trading your beach for
someones mountain and bingo, youve got an industry!
By locking in the purchase price of accommodations, vacation ownership
(time sharing) helps to ensure future vacations at todays prices
at luxurious resorts with amenities, service and ambiance that rival
any of the worlds top-rated vacation destinations. The reasons
for purchasing most frequently cited by current timeshare
owners are the high standards of quality accommodations and service
at the resorts at which they own and exchange, followed by the flexibility
offered through the vacation exchange opportunities and the cost
effectiveness of vacation ownership. Nearly one-third of vacation
owners purchase additional intervals after experiencing ownership.
This trend is even stronger among long-time owners; 41.2 percent
of those who have owned eight years or longer have purchased additional
intervals within that time.
Vacation ownership offers consumers the opportunity to purchase
fully-furnished vacation accommodations for only a percentage of
the cost of full ownership. For a one-time purchase price and payment
of a yearly maintenance fee, purchasers own their vacation either
in perpetuity or for a predetermined number of years. Owners share
both the use and costs of upkeep of their unit and the common grounds
of the resort property.
Each condominium, or unit, of a vacation ownership resort is divided
into weeks which are sold separately. The weeks are priced according
to a variety of factors, including size of the unit, resort amenities,
location and season.
Unlike a hotel room or rental cottage, which require payment for
each use with rates that usually increase each year, ownership at
a timeshare property enables vacationers to enjoy a resort, year
after year, for the lifetime of their ownership. Timeshare ownership
offers vacationers an opportunity to save on the escalating cost
of vacation accommodations over the long term while enjoying all
the comforts of home in a resort setting.
Truly a home away from home, vacation ownership provides the space
and flexibility to suit the needs of any size family or group. While
most vacation ownership condominiums have two bedrooms and two baths,
unit sizes range from studios to three or more bedrooms. Unlike hotel
rooms, there are no charges for additional guests. Also, unlike hotels,
most units include a fully equipped kitchen with dining area, washer
and dryer, linens, stereo, televisions, VCR and more.
Timeshare resort amenities rival those of other top-rated resort
properties and may include swimming pools, tennis, Jacuzzi, golf,
bicycles and exercise facilities. Others feature boating, ski lifts,
restaurants and equestrian facilities. Most timeshare resorts offer
a full schedule of on-site or nearby sporting, recreational and social
activities for adults and children. The resorts are staffed with
well-trained hospitality professionals, with many resorts offering
concierge services for assistance with visiting area attractions.
So who benefits from owning a timeshare? Well, lets start
with you. Do you like to vacation? Do you wish you could someday
go on that
dream vacation, just once in your life? Have you ever
had to tell your family that this year it just was not in the budget?
Ever find yourself so immersed in your work that the years tend to
slip by, always saying, Next year well take a nice vacation?
And how about that second honeymoon, just the two of you, every
year? Or how bout those kids, how quick theyve grown!
How often do you all get to take off and make those special memories
that will last a lifetime? Hey! How about just getting the heck out
of Dodge by yourself! A little personal R&R! And
finally, would you like to be able to take any vacation you want,
go anywhere you want, stay in super luxurious accommodations, and
not have to worry about the money? Guess what! This is what timesharing
is all about!! And if you answered yes to any of the above, you need
to read on.
JUST THE FACTS, PLEASE
So heres how it works. (Finer points coming up). You purchase
your week of timeshare. You may use your own resort each year, or
you may use a different resort in a different location each year.
Your choice, each year. Go to Disney World this summer, take off
skiing in Colorado next winter, see Paris the following spring, and
watch the leaves turn in New England in the fall. Whoaaaa
a minute! You thought you had to use the same week each and every
year? Thats one of the biggest misconceptions about timeshares.
Unless you are one of the roughly 2% of timeshare owners who wish
to return to the same location each year, at the exact same time
each year, youll find yourself making
your own plans each year according to your own schedule.
So youve got your week of timeshare in say, the islands. You
own a week in March and decide you want to go someplace closer to
home this year, lets say a week down at the beach in the summer.
All you do is call your exchange company (more on that in a minute)
and tell them what youd like to do! But what are your chances
of getting that vacation youre asking for? Probably everyone
else gets it but you, right? Well, not actually. For the past eight
or nine years, the exchange companies have been able to fulfill properly
processed requests 97 to 98 percent of the time!
PATRIOTISM AND TRAFFIC LIGHTS
Aha! Whats that properly processed stuff? Well,
its really nothing special, just some common sense. (Youre
going to get the feeling in just a second that all this stuff is
really pretty simple, no rocket science here). There are two major
exchange companies, Resort Condominiums International (RCI); and
Interval International (II). Both companies link timeshare resorts
together world-wide. When you want to make an exchange, you do not
have to find someone who owns that beach resort and ask them if they
want to use your ski resort. You simply call your exchange company,
RCI or II, and make a request. Think of them as a bank, youre going to make a deposit (give them your timeshare
for someone elses use this year) and make a withdrawal (take
out a different timeshare for your own use this year). If someone
takes out your timeshare later, so be it. If not, you are under no
obligation. You still go on your vacation and yours just goes unused
that year. This process occurs millions of times each year, so you
can see how the rates of confirmation stay so high.
So that means I can take my off-season week at my beach resort and
move it to Christmas in Maui? No. Heres where that common sense
comes in. There are certain parameters involved to ensure that the
system is fair. If you own an off-season week somewhere, expect to
exchange it for other off-season weeks, not the most prime time of
year at any location you choose. To help you make smart decisions,
the exchange systems publish full-color catalogs showing the various
timeshare resorts world-wide. They then color code the various weeks
of the year for each resort. RCI uses red, white and blue (very patriotic).
II uses red, yellow and green. Same designations, just different
colors of the rainbow. A red week with either RCI or II designates
a week that is highly demanded. This might be winter at a ski resort
or summer at a beach resort. A blue, or green, time is the off-season.
This would be the opposite of the above example: summer at the ski
resort and winter at the beach resort. White or yellow weeks are
in between; not really prime season and not really the dead season.
Obviously off-season weeks cost less to purchase. Prime season more.
Now heres that common sense. The exchange system works on
whats known as a value for value system. Want the best weeks
at the nicest resorts in the most sought after locations? Own something
similar to exchange. Think this way: off-season gets off-season,
prime season (red weeks) get you the best.
LOCATION, LOCATION, LOCATION
Youve heard the phrase that us real estate people use. There
are only three things that matter in real estate
and location. The same is true in timeshares. Now pay attention cause
this ones important. If theres one mistake we see people
make its this one: Many first-time purchasers purchase a red
week thinking that they can now exchange for any red week in the
system. WRONG. In
addition to the color of the week you own (lets cut to the
chase, buy red time and forget the rest), theres another factor
that makes the system fair. You not only will exchange red for red,
but also the location you own will determine the location you get.
Own a nice red week, but its in the middle of nowhere? Dont
expect to be getting London or the Caribbean. The best locations
get the best locations. Otherwise, why would anyone in their right
mind spend the bigger bucks for the really nice places when they
could buy something of lesser quality and exchange into the better
ones?! See, told you this wasnt rocket science.
TO DEED OR NOT TO DEED
THAT IS THE QUESTION
O.K., youve got the color stuff down pat. You know you want
to purchase a good location. Now-- what am I buying? Well, in a lot
of cases your timeshare will be deeded to you, similar to your home.
You may also purchase a timeshare that is a long term lease that
you will have for a fixed number of years. Each has its good
points and neither one has an outright advantage over the other.
In many instances, the local custom or laws will dictate which way
you purchase. With both, you will have lots of options. Lets
say for instance that a year comes along and you just cant
use your timeshare. Now what? Well, not to worry. You can: A) Let
a friend use it B) Get greedy and rent it to your friend,
or whomever. C) Call up the exchange system and do half of
an exchange (give them the week for someone else to use, but do not
request something in return. Youll have two years to call back
and get that vacation at a more convenient time. This means you can
save up, or stack vacations). Other types of plans involve floating
time vs fixed time, and fractional membership and points. Were
going to skip these last ones for now. Theyre more minor points
and were going to keep it simple here. Call us with any questions.
So what happens when my life style changes and I dont want
to vacation anymore? HUH?? Are you nuts? No more vacations? O.K.,
it can happen. Now heres one of the beautiful things about
timeshares. Youve had it for years. That one time purchase
you made so long ago has paid you back over and over again (were
talking money here, not memories and fun times. Moolah, dinero, the
green stuff). Now you have something you can leave to your kids.
They now can continue enjoying the timeshare you bought years ago.
And they can leave it to their kids, and on and on. You wanna
go back and figure how much money you saved over the years? Its
mind boggling. But, you say, Let the kids fend
for themselves. I want the money". IF, IF, you bought it right
in the beginning (more on that in a minute), you now have an asset
that you have owned for years that you now can resell. So youve
had all these vacations through the years, stayed in accommodations
fit for a king, and now you get your money back?? What was that
IF, IF up there? And didnt I hear somewhere that
these things were hard to resell.
MOMMA DIDNT RAISE NO DUMMYS
Just as with everything else in life, there are all sorts of ways
to do things. Buying timeshares is no exception. There are two different
ways to purchase a timeshare. Direct from a resort, and a resale
or close-out. And were going to tell you the pros and cons
First, the majority of people who purchase their first timeshare
buy it at a resort. Why? Because they got this letter in the mail
Come look at our timeshare resort and get a free ___________
(fill in the blank). Greed drives them to get the free whatever.
They promise each other on the way to the resort that they wont
buy a thing. And then they meet
.THE SALESMAN. And this is not
just any salesman or saleswoman, this is THE salesman. He knows hes
got just 90 minutes with you and hes gonna make it count. He
does this three or four times a day, five days a week, 50 weeks a
year. You dont.
Now, lets be fair. There are very many good and professional
sales people working at resorts. They can be very hard working folks
who are decent and trying to earn a good living. We dont fault
them for that and we salute them as a necessary part of the timeshare
industry. We know many of them ourselves personally.
But heres the down and dirty of it. The average timeshare
resort has a marketing overhead of 50 to 60%. In laymans terms
that means this: All those free gifts are going to be paid for by
someone. You. All that staff you see, all those salespeople, all
the office personnel have to be paid by someone. Thats right,
you again. So you purchase a timeshare for
lets say $15,000.
(You know you got a deal cause the price was much higher. But
when you couldnt afford it, they were nice enough to find you
a foreclosure. ahem). 50% marketing overhead means that
$7,500 of that $15,000 went to pay nothing but the cost of getting
all those people together to sell you that timeshare. So whats
the true value of the property? (math quiz here). Thats right!
$7,500! So! What happens when you go to resell that property later
on? Can you sell the cost of the marketing you paid for? NO! So what
can you expect to get for your timeshare? Assuming no appreciation
(dont assume it, its rare
unless you truly bought
a steal), $7,500.
YOUR NEW TOY
So you get home with your brand new shiny timeshare. Youre
proud as a peacock with a wax job and you go over to your neighbor
to show it off. What a coincidence!! Your neighbor just bought a
timeshare as well!! You show him yours and she shows you hers. (??)
Anyway, you compare notes. PeggySue now owns a timeshare at a really
luxury resort with all the trimmings.
You must have spent some really big bucks for that!,
you exclaim. (You enjoy exclaiming, as opposed to just
talking) PeggySue then tells you how she found a resale for only
$6,000. The original price from the resort had been $14,000. She
also shows you her one-year guarantee that she will love her timeshare
or not keep it. She asks you why youre crying.
Yes, my friends, there are bargains and then there are bargains.
Our strong advice: buy a resale or a developer close-out. Same stuff,
Now we did say there were pros and cons to each. Here they are.
First, buying at a resort will give you a few niceties. You will
be able to view the resort first hand. Youll make new friends
with THE SALESMAN. You will learn what the term high pressure means.
(Remember when your mom used to cook with that pot called a pressure
cooker? Well, youre the meat.) You will receive a gift of some
nature for your troubles. On the down side, if you succumbed, you
will have bought a timeshare via the most expensive way known to
mankind, and possibly the entire universe.
By buying a timeshare as a resale or a developer close-out, there
are also pros and cons. Lets be negative first. A professional
resale company will have a large variety of timeshares for you to
choose from. Thats good. They can take the time with you and
discuss your vacationing habits and what your needs are and all the
different ways timeshares can benefit you. They can make suggestions
as to which timeshare resort would be best suited to you.
Did you catch something subtle here? THE SALESMAN has only one product
to sell you, his. Its going to fit you whether you like it
or not. Hell MAKE it fit! The resale company has no such pressure.
So wheres that negativity? Here it is: The only downside is
that you are probably not going to have the benefit of walking the
resort before purchasing it. Youre here, the resale company
is there, the resort is way, way over there. Yep, I know what youre
thinking (We work on the side for the Friends Physic Network). Youll
just take a ride down to that little ole resort and check it
out for yourself. Doesnt work. By the time you get back, if
it was any kind of a good bargain at all, its long gone. What
was that? Then youll just wait for the next one? Ever watch
a dog chase its tail?
Now lets discuss for a moment why the above doesnt matter
anyway. Remember early on we talked about how only 2% of timeshare
owners go back to their home resort each year? That means 98% of
timeshare owners are using the exchange system each year. Meaning:
the only time they may have seen the resort they bought was when
they were holding hands with THE SALESMAN. The resort itself is nothing
more than a vehicle to use the exchange system and let them go where
they want each year! In fact, ask your friend or co-worker who owns
that timeshare how often they actually go back to their own resort!
Go ahead. Well wait
. See! Told ya!
A COMMERCIAL ANNOUNCEMENT
O.K., weve been good. But now for the first time were
going to just slightly mention our own particular company, Island
Consulting Realty. In over 14 years in this business, we have very,
very many of our customers who use their timeshare worldwide and
have a blast with it each year. Yet they have never ever seen the
actual resort they bought! Blind faith? Nope, we help them do their
homework, give them tons on info on the resort they are interested
in, and then give them a one year guarantee. Its a no-brainer.
They take no risk.
NOW BACK TO THE SHOW ALREADY IN PROGRESS
So we told you the negative of buying a resale. Not all that bad
really. Now the positive: YOU SAVE MONEY!! Lots of it! Youll
need a wheel barrow just to get it home! But wait, theres more!
Remember when we touched on the subject of reselling the timeshare
you bought? Thought we forgot didnt you? Heres where
buying a resale from a professional resale broker comes back to help
you even more later. You may have heard that reselling a timeshare
is a tough thing to do. Yes and no. If you own junk (off-season weeks,
a resort in a poor location, etc.) there is not much of a market
for it. It is a tough thing to sell. Quality sells. A professional
resale broker with your best interest in mind will keep you away
from the junk. A good red week, in a prime location thats high
in demand and properly priced will sell, and sell, and sell. (If
not, our company would have been out of business long ago). Buy quality.
Buy quality. Buy quality. Youll get the exchanges you want,
youll have pride of owning a wonderful resort, and youll
have an easily salable timeshare if you ever decide to sell it.
WHATS IT COST FOR ALL THIS ?
Boy, theres a loaded question. Timeshares will cost
anywhere from $500 to $40,000 for one week. The industry average
for all timeshares sold direct from the resorts (keep in mind: all
timeshares sold means blue weeks as well as red weeks, studio
units as well as two bedroom units) is $10,080. O.K., heres
the scoop. The junk usually hangs out in the real low end of the
price range, just hoping for someone to come along and not know any
better. The $40,000 stuff is usually something really special like
the Christmas/New Years time frame in Vail, Colorado. And, of course,
you bought it right at the resort. A professional resale broker will
be able to find the bargains for you. But as a rule of thumb, $4000
to $8,000 for a red week will generally buy you a really nice place
thats easy to exchange around for other places. Prices go up
and down, but thats the general range. Certain very prime locations
and certain resorts may command a little higher price, of course.
Youll have a maintenance fee each year. Maintenance fees cover
you for: maintenance of the grounds and common areas, interior housekeeping
such as maid service, insurance for storm damage or liability, utilities,
management, replacing furnishings and appliances every few years,
replacing broken items, and a reserve fund set up to cover the time
when its time for a new roof, etc. All of these things are
necessary to ensure your investment stays up to par. Then, if and
when you go to resell it, you have a good looking, well maintained
property. One note on maintenance fees: Some people say that this
is one disadvantage of owning a timeshare. Not so. Lets say
you rent your vacation by staying at a hotel or renting a vacation
home. Are you paying for the cost of maintaining that hotel or vacation
home? Youd better believe it. Its all built into the
rent. Think of maintenance fees the same way as money you spend to
maintain your own home. Its money well spent that will come
back to you. Maintenance fees will generally run from $400 to $600
once a year, depending on the resort you own, the amenities there
and the size of the unit you are purchasing. Also, keep in mind that
with timesharing, there are no hidden hotel taxes
or occupancy taxes. These taxes alone can add $150 to
$250 to the cost of your hotel bill.
If you want to belong to one of the major exchange companies, RCI
or II, theres an annual membership fee (about $100) and a fee
if you want them to make an exchange for you (about $125).
And thats it.
HOW BIG IS THIS TIMESHARE BUSINESS, ANYWAY?
Big, really big. The timeshare industry is the fastest growing segment
of the travel industry world-wide. More than three million households
own vacation intervals at nearly 4,500 resorts located in 81 countries.
Vacationers around the world are turning to vacation ownership resorts
as their preferred travel destination, with timeshare owners hailing
from 174 countries. North America remains the global leader with
nearly half of all the resorts and approximately two million owners.
Europe is the second most dominant region for vacation ownership,
with approximately 22 percent of owners worldwide and more than 1,000
The growth rate has been explosive. For the past nine years, the
number of timeshare owners has increased an average of 16% per year.
And look whos involved: Disney, Marriott, Hyatt, Ramada Suites,
Fairfield Properties, Carnival Cruise Line, Royal Caribbean Cruise
Line (yes, you may now trade your timeshare for a cruise!). And the
list goes on and on.
Timeshare resorts are everywhere. From all over the Caribbean, the
U.S., Mexico, Europe, The Far East, China
everywhere you can
AND WHO SHOULD I DO BUSINESS WITH?
Well now you know weve got to recommend ourselves, right?
But before we pat ourselves on the back, were going to give
you the general info you need to know to pick the right people to
do business with.
First, I think you now know that you can do business with the resort
directly or you can purchase a resale. Unless you enjoy burning money,
buying a resale or resort closeout is definitely the smart way to
You might find an individual selling his or her timeshare. In fact,
for people wanting to sell their timeshares, we not only offer full
service brokerage services for them but also offer them a plan where
help them sell it; providing the necessary advertisement
and promotion. If buying from an individual, enlist the help of a
title agency or attorney for safety.
Pick a resale broker. Now heres where you also want to be
careful. Make sure that the agent you are doing business with is
licensed. In almost all states, to sell timeshares you must have
a real estate license. You would think that any resale company would
only use licensed agents, but they dont. Working with a licensed agent
is for your protection. Call the appropriate Better Business
Bureau in that state and ask if there have been complaints.
Ask how the resale company operates. Is timesharing their only business,
or just something on the side? Do they actively participate in the
industry or watch from the sidelines? If you request information,
what will they send you? How about just general info, such as a pamphlet
like the one you are reading now? And finally, what assurances do
you have that you are making the right choice in your timeshare purchase?
Is there a guarantee? If not, why not?
THE END IS NEAR
We hope you have benefited from our work. An informed consumer
you know. If you permit us just one last little bit of your time,
wed like to tell you a little about ourselves and why we think
were the only logical choice for your timeshare purchase. PLUS!
Remember those developer close-outs we mentioned a few
times? Were going to tell you about them as well.
Island Consulting Realty is a full service real estate brokerage
dealing only in the timeshare industry. We handle resales
of timeshares for individuals as well as handle developer close-outs.
So whats a developer close-out? From time to time we are in
the unique position to handle blocks of timeshares directly from
a resorts inventory. This may be a resort that is almost sold
out, and the salespeople have moved on. Or it may be a brand new
resort that wants to get the word out fast. It may be a resort in
the middle of its sales phase that wants more exposure. Whatever
the reason, we may be able to negotiate wholesale prices for blocks
of weeks. The resort has no overhead, marketing expenses or commissions
on these weeks. We can then pass on very significant savings to you,
For these developer close-outs, we are very picky as to which resorts
we choose to work with. We only handle high quality resorts. We only
handle red weeks. We only market them if we can sell them at absolute
steal prices. We have had ten resorts we have helped in this
manner through the years, and are currently marketing three, one
in Mexico and two in the Caribbean. All of these can be viewed on
our web site at www.TimesharesToGo.com.
For individuals, we offer a full service brokerage that is one of
the largest legitimate time share resale companies in the U.S.
Our marketing is extensive. We advertise in major newspapers, billboards,
telemarketing, direct mail, travel shows and through our own monthly
newsletter, The Timeshare Times, which is available either by mail
We have been interviewed on radio and TV talk shows for our expertise
in the field of timeshares. We have given speeches to resort developer
think tanks in Washington as to the complexities of off-site marketing.
We are well known in our industry as a leader and one whos
word is gold.
We want all of our customers
to be completely comfortable doing business with us. To
this end, with few exceptions, we offer the industrys
ONE YEAR satisfaction guarantee.
You must be completely satisfied with your purchase of you
dont keep it.
THATS ALL, FOLKS!! Porky
Please feel free to call us at 1-800-809-6020 with
any questions you may have. Were going to leave you with
some of the best advertising we have
Island Consulting Inc.
10351 Saddlebow Lane, Sarasota, FL 34241
1405 Wesley Drive, Salisbury, MD 21804
Other websites: Timeshares
Florida Better Business Bureau
Copyright © 1999 by Island
All rights reserved. No part of the contents of this publication
may be reproduced or transmitted in any form or by any means without
the written permission of the publisher. And we mean it!
responsive to questions and very honest in representing the property
and value for the price. I have always gotten the exchanges I
have wanted when I wanted them.
Annette Dayton, Annandale, VA --- has purchased 8
Good prices, good service,
like dealing with friends
Michael Barker and Annette Hatley, Colonial Beach,
VA --- has purchased 4 weeks
Every time weve had
a question, Tom has personally called back and answered to our
Dennis and Anna Klein,
Without timeshare, we would
not make time in our busy schedules for vacations - Thanks for
making us stop and enjoy life! Rick
and Pam Fisher, Chesapeake, VA
Island Consulting people
have proven themselves to be honest and reliable. I would not
recommend friends or relatives to anyone who might not treat
them right. The trust and confidence that has grown from my dealing
with Island Consulting makes them a natural referral .
Bob Buck, Endicott,
NY --- has purchased 5 weeks
I have had several friends
ask how we got such a good deal in our purchase and have offered
Island Consultings address to any and all interested. I
would recommend Island Consulting to anyone interested Melanie Jones, Pittsburgh, PA
"Island Consulting uses a "soft" sales
approach and a remarkable one-year money-back guarantee that
has helped inspire greater consumer confidence."
Developments Magazine, March 1999