What Is Timeshare?
Timeshare can come in many different forms, shapes and sizes yet can be universally described as holiday accommodation shared by multiple owners.
The concept of timesharing is thought to have came about in early 20th century Europe when families would group together to purchase holiday a home in which they each had a share. Those families would then be given an equal amount of time to holiday in the property each year with each contributing toward the cost of upkeep. Typically, there may have been four families with each having 3 months to enjoy the property every year.
Clearly, before the age of cheap air-fairs families would have had very different holiday needs and were much more likely to visit the same destination each year. Since some families would have spent months away from their full-time residence at anyone time, there would have been a compelling case for some that owning a share in a holiday home was far better value than renting hotel accommodation and gave a better standard of accommodation than could generally be achieved with what little short-term rentals were available.
Sometime in the 1960’s the idea was then developed into what could now be considered to the traditional timeshare model where families purchased a “week”. Here the developer of a resort will have split all or just some of the apartments or villas at a resort into weeklong periods that could be purchased giving the owner the right to occupy that apartment every year on a specific week number. Week 1 generally being the first full week of January and week 52 covering New Year.
Depending on the resort, timeshare owners may have a purchased leasehold, freehold or timeshare “in perpetuity”. Sometimes owners would actually be purchasing the land and bricks and mortar for just one week and sometimes they were buying simply the right to occupy an apartment and becoming members of a “Club”.
The style of properties began to include apartments, villas and townhouse with sizes typically ranging from studio apartments to 4 bedroom units.
After the initial up-front purchase price, owners would then pay towards the upkeep of their resorts facilities and services by way of an annual maintenance fee.
Exchange & Growth
As the industry grew, the ability for timeshare owners to “Exchange” from his or her own resort to that of another timeshare owner was introduced. The services of the two main exchange organisations, RCI (Resort Condominiums International) and II (Interval International) meant timeshare became real alternative to package holidays which were often poor value for consumers.
This was the catalyst for a period of sustained, rapid growth since timeshare ownership coupled with exchange membership was a very compelling proposition for families taking regular holidays.
Lack of Legislation
It was during this period of rapid growth that an almost complete lack of legislation meant the industry attracted many dubious characters and resulted in widespread misselling and a high degree of fraudulent transactions.
Consumers were subjected to high-pressure sales techniques and offered very little protection with no cooling-off periods and sometimes hefty deposits were taken on projects that never materialised.
Salespeople often greatly exaggerated the abilities of exchange companies and timeshares were sometimes sold as financial investments all of which saw the timeshare develop a stigma and eventually led to various UK and European laws in an effort to clean up the industry.
Today the timeshare industry is much better regulated and generally high levels of customer satisfaction are reported from industry and consumers bodies. However, there are still a number of legacy issues such as the lack of exit routes for those who are unable to sell their timeshare or find a willing recipient to take on the responsibility.
There are now many big-names in timeshare such as Hilton, DeVere, Marriotts, MacDonalds and Westgate and the number of owners has peaked. According to Wikipedia, RCI now has almost 4 million members worldwide with over 6,000 affiliated resorts spanning more than 100 countries from around the world.
Types of Timeshare
There are now many different variations of timeshare although most can be categorised into one of following types;
Fixed Week – This being the most traditional form of timeshare, here the owner has a particular week in which they can occupy a specific apartment at their resort each year. For example, week 14 generally commences at the beginning of April.
Floating Week – Here the owner has the right to occupy a certain sized unit (either at just one resort at numerous resorts) for one week every year. Floating weeks give the owner more flexibility as to what time of year they can holiday but this is subject to availability.
Points – Here instead of owning any set week, apartment or slice of any resort, members of own “timeshare points” which can be used like a currency to book various sizes of accommodation throughout the year. In the same way that owners of fixed and floating weeks have the right to use their timeshare every year, points owners receive new points to use each year too. So, for example, an owner of 50,000 points would receive 50,000 points to use to book holidays each year.
There are now many different names that have been coined by some timeshare operators and developers in an attempt to avoid any stigma caused by previous malpractice. Terms such as “Vacation Ownership” “Holiday Ownership” or “Fractional Ownership” maybe used whilst “Holiday Clubs” or “Destination Clubs” are also common but can often describe systems designed to evade the jurisdiction of timeshare law.