Timeshare Presentations: Is Purchasing a Timeshare a Smart Thing?

A typical timeshare arrangement is entitlement to stay at a resort (usually one week) or another resort in the timeshare family in exchange for a negotiated price. The sales justification made by the resort is to provide frequent travelers luxury accommodations at a reduced cost. In addition, since it’s considered a second home, it’s possibly a tax deduction. But is buying a good idea?

In Janet Wickell’s article Time-Share Ownership Variations on About.com, she explains the various types of timeshares:

  • Fixed Unit, Fixed Week, with deed
  • Floating Time Agreement
  • Right-to-use (basically a lease with an ownership end date)
  • Vacation Club, points based program

Timeshare Pitch

According to a couple who recently took advantage of an offer at an Arizona resort, their 90-minute timeshare presentation stretched to a three hour pitch session. The resort offers timeshare memberships through Interval International, and allows a timeshare destination exchange to another resort in the Interval International family.

The couple stayed one night in one of the resort’s master suites which had a jetted tub and full kitchen. They received gift certificates for $75 worth of spa services, $25 to Target and were promised a free dinner, which they never actually got. (The resort was still under development, so there were no restaurants on site.) They enjoyed the stay, the weather was beautiful, but they didn’t purchase.

Timeshare Negotiations

For this couple, the negotiations for the timeshare started at $20,000 for one week in the Junior, one bedroom suite. The final offer was $10,000 for the Penthouse Master, one bedroom suite, or a purchase of both suites (the Penthouse Master and Junior are adjacent) for an additional $6995, which would mean two suites for $16,995.

The timeshare ownership came with additional costs. There was an annual HOA fee of $746.00 (for the two units), subject to change at the resort’s discretion. And, in order for them to be able to exchange their week’s stay in Arizona for say, Hawaii or London, they would have to pay an additional annual fee of $50.00 and a trade fee of $140.00 – $160.00, amount dependant on exchange destination.

Using the Timeshare

At this interval timeshare, members may use their week according to an availability calendar, and have the option to rent out their week if desired. They are eligible for discounts on stays at any of the resorts in the timeshare network.

Timeshare Purchase Declined

The couple interviewed explained that they decided against purchasing because they:

  • Worried what might happen if the resort went bankrupt
  • Wondered what price current timeshare units might be reselling for
  • Wanted to compare purchase costs against renting a timeshare
  • Didn’t want to have a mandatory vacation expense and feel forced to go on vacation, even if they had personal cash flow issues or health problems.
  • Learned that financing the timeshare was at a high interest rate.

In conclusion, the couple decided to do more research to determine how to best use the timeshare concept to their advantage, not to add to their expenses. They discovered timeshare ownership alternatives on numerous websites. One such website is Timeshare Adventures which has timeshare listings for sale or rent. The couple compared the costs of buying vs.staying at a resort or renting another timeshare. Both options seemed better for them than this particular timeshare offer.

In times such as these, any new debt should be seriously contemplated and all alternative options considered. Luxury resort stays beckon to the weary, but could end up being a financial noose around the member’s neck.