Now a booming industry, timesharing offers many rewards and alternatives
NEW YORK (CNNfn) - Sit down and balance your checkbook this month and chances are you'll spend less time crunching numbers than Brian McKerchar spends figuring out where to vacation.|
The Toronto resident, in his mid-fifties, is one of the millions who have embraced timeshares as a vacationing alternative.
Now a reinvigorated industry with a cleaner, healthier image, more vacation seekers are choosing to own timeshares opting for privacy, a lifetime guarantee and other bonuses, including swapping one timeshare for another.
McKerchar, owner of a publishing business, purchased his first timeshare in Fort Lauderdale, Fla., 10 years ago and now owns three timeshares, giving him a total of six vacation weeks.
"Owning a timeshare forces me to take a holiday," said McKerchar, who notes its tough to let a prepaid vacation go unused. "Timeshares are nice because there is a certain comfort factor; they are like a home away from home."
Owning a timeshare means having a home, a condominium or even a hotel room at a resort for certain weeks every year. They can either be purchased as deeded, which means buying ownership of a property, or non-deeded, which means buying a lease.
The price can range anywhere from $1,000 for an older, less luxurious resale unit to $35,000 for a top-of-the-line unit, plus a yearly maintenance fee that varies based on different timeshare variables but is usually in the $300 to $600 range.
One of the biggest mistakes people tend to make is in thinking of a share as a financial investment. "They should be considered investments in a vacation lifestyle", said Bill Rogers, founder of the Timeshare Users Group (TUG).
Like cars, he notes, their value depreciates through time and usage but you will get a roomier, more attractive place that you can call home forever.
Three important tips
But like any vacation, you need to keep in mind three factors in order to make the perfect recipe: the season, the quality of the accommodations, and the location. These factors are what comprise the value of your timeshare on a resale or exchange market.
First, the prices will vary widely depending on the season. Vacationing in a Colorado ski resort in the summer, for example, costs a lot less than it would in the winter.
Second, quality of timeshares ranges from the luxurious to the old converted motel variety. "You can buy a used car for practically nothing, or you can spend some money and buy a Mercedes," said Rogers. "They both provide transportation. Likewise, timeshares provide a vacation, its just a matter of how nice a vacation."
Third: location, location, location. A share in the Cayman Islands has more value than something on the North Carolina coast. Greater value will make your timeshare easier to unload if and when you decide you're ready for a change.
A combination of these three ingredients, a good quality share in a vacation hot spot during a desirable season, is ideal.
Important timeshare and resale tips can be found on the Federal Trade Commission's Web site at www.ftc.gov.
A booming industry
Over the last 10 years, the timeshare industry has taken off, fueled by the red-hot U.S. economy, record high consumer confidence levels, and the wealth effect left in its wake.
Today, nearly five million families own vacation timeshare properties at over 5,000 resorts in the United States. On a worldwide basis, the number of timeshare projects grew 24 percent between 1994 and 1998.
And data from the American Resort Development Association (ARDA) reveal that timeshare sales reached $6.1 billion worldwide in 1998, the most recent year for which data is available. The group estimates sales in 1999 grew to $6.7 billion.
Clearly, the whopping numbers indicate an increasing growth in a market that, at one time, was plagued by high-pressure sales tactics and a lack of information.
Beware of scam artists
Even so, insiders say it is important to keep in mind there are plenty of scam artists out there ready to take your money with the promise of a beautiful vacation. Failing to do your homework in advance could cost you big bucks.
Rogers got hoodwinked into trading his luxury condo for a shabby, World War II-era motel with the original furniture still in it. After being shown pictures of what seemed like a beautiful and promising resort that even had tennis courts, Rogers was sorely disappointed. One of the many flaws included dilapidated tennis courts without any nets.
"We've learned how to interpret manuals now," said Rogers. "If they show you certain types of pictures, usually without details, be skeptical."
"The secret to not getting scammed and successfully getting a timeshare is all in the educational process prior to purchasing," Rogers said. "It eliminates about 90 percent of the problems with timesharing."
The Internet has helped the timeshare industry explode by being a primary resource for researching everything from finding a location, to getting educated on timeshares, to chatting with actual owners.
Because of his experiences, Rogers has dedicated his life to educating people about timeshares and started a Web site for timeshare owners called www.Tug2.net. The site has everything from message boards to articles about the latest trends in the industry.
Timeshares at major resorts also have lent to the industry's credibility. Marriott, Hyatt, Hilton, Disney, and Starwood are some of the biggest names in the business offering a rainbow of different timeshare programs, rates, and locations. "Branding is becoming extremely important in the industry, thus enforcing the acceptance of the product," said Paul Rishell, president for the Americas for Interval International.
Another timeshare option
The reasons consumers purchase timeshares are as varied as the properties themselves.
Some buy timeshares as a way to open up the door to multiple different destinations. They'll swap their own timeshare for one in a place they want to visit or they will collect points that can equal to a world vacation in a timeshare anywhere in the world, including free airfare.
For example, Spencer Childs, a stockbroker who lives in Las Vegas, owns three timeshares in South Africa that he's never seen. But those properties have allowed him to visit San Diego, Snowbird, Utah, and Cabo San Lucas in Mexico. Next year, he'll add London and Hawaii to the list.
"Timeshares are vacations of a lifetime," Childs said.
Having done his homework thoroughly he purchased his deeded timeshares, two of which cost $1,100 each with a yearly $125 maintenance fee, strictly for trading purposes. The exchange fee costs Childs $132.
Chris Wells, the director of public relations for Interval International, said, "the exchange component has been a very important concept in the positive evolution of the industry because one of the original concerns was the lack of flexibility; people would return to the same resort forever. But now people can exchange resorts."
Exchanges usually occur on a like-for-like basis. "You can't trade a beat up Volkswagon for a brand new Lexus," said Rogers.
Interval International and Resort Condominiums International (RCI) are the most widely used and extensive exchange resources. And with almost five million timeshare owners out there, exchanging can make owning a timeshare like running your own personal business and the business is your vacation and therefore always rewarding.
McKerchar is a fan of the Marriott Rewards Plan in which he collects enough points to travel to and stay at a Marriott share location anywhere in the world.
"The points program is very important for me", said McKerchar. Marriott share owners can gain points by passing up their share for the year.
McKerchar's next trip to Australia includes free airfare, which is part of Marriott's program.
Happy timeshare owners see and take advantage of the range of opportunities that timesharing presents. But like with any other type of research, staying well informed can be time-consuming. Careful planning and a commitment to educating yourself on the many different aspects of the industry are the key factors to being a happy timeshare owner.