If you didn’t fall prey to the scam of the timeshare industry yet, keep reading. You may get something out of my story. I suspect that one way or another we all have been exposed to timeshare ads or approached by some intrusive salesmen trying to draw us in.
Let’s face it, traveling is not cheap and especially finding a decent hotel room at an affordable price is a real challenge. Owning a piece of paradise in a hotspot vacation property like Florida, Hawaii, or Colorado seems great and the promise of a clean and well maintained condo at the price of a hotel room seems even better. In this article I will share with you my 14 years experience as a timeshare owner.
Back in the summer of 1998 while vacationing in Hawaii, my husband and I have been approached by a salesman from Shell Vacations Club and lured into a timeshare presentation. Although the Internet era had already begun, the information on hand about this issue was scarce. The sales presentation was pleasant and informative and seemed to make perfect sense. Newly immigrated from Europe with a young son and not much money on our hands, we knew we couldn’t afford to buy property in Hawaii or somewhere else. On the other hand, with hotel prices always on the rise it seemed that a timeshare investment would always keep us ahead of the game. Oh, did I say “investment”? I guess I did but little did we know at the time that it would rather be a money pit. So two months and a $18,000 later, we were the proud owners of a timeshare on the Big Island of Hawaii. Lucky us!
Most timeshare purchases are deeded (or “fee simple“) timeshares. This means that the purchaser is buying an actual share of ownership in the resort. Non-deeded timeshares, also known as right-to-use, certificate or vacation-interval timeshares, are more like a club membership. But no matter what shape or form, all timeshare resorts charge an annual fee for maintenance, utilities and taxes. Resorts can increase the fees each year — the initial fees at the time you buy are not locked in and that’s where the big catch is. We had a two-week share of ownership for which our annual fee was around $1,400. At the time of the presentation we addressed our concerns regarding the yearly increase in this fee but have been assured that, as owners, we will always have a say in it.
The first few years into our ownership we were pretty happy with our deal. Every year we kept coming to Hawaii bringing family and with us and even going on different islands. But from the very beginning we noticed that the beautiful nice units on the top floor or facing the ocean that we saw on the presentation day were never available. They always seem to have been snatched from under our nose by somebody who arrived earlier. Even more, the only units available on our arrival were always on the ground floor and facing the garage, the noisy swimming pool area, or the trash collecting area. I can’t remember a single time in almost 14 years when we did not have to change units at least two times before receiving something barely decent. So our vacations were always starting with arguments, complaints and repeated trips to the reception desk. All those nice, smiling, and helpful selling agents that roamed the resort grounds on our presentation day seemed to have mysteriously vanished.
As time went by we grew less and less fond of our timeshare deal. Not only had we not purchased a piece of paradise, but our “deal” was turning into a liability. More and more fees seem to appear every year: if we could not use our time on a certain year we had to pay a $25 fee to bank it for the following one, or loose it; if we made more than one reservation a year we had to pay a $25 reservation fee for the subsequent ones; for the first week in a resort we received a free cleaning, for the second one we had to pay a cleaning fee of $50; other fees included: resort fee ($100-$150), air conditioning/heating fee (depending on the usage), parking fee ($10-$20/night), exchange fee ($150-$170).
Once we got bored of going to Hawaii two times a year and decided to exchange the timeshare for other places, we were confronted with the cruel reality of “unavailability”. Whatever resorts we asked for were always unavailable. No matter how flexible we tried to be, it still didn’t work. We were either too early or too late, but never on time in requesting a resort in big demand. In exchange, we were always offered alternative vacation spots in the middle of nowhere, in places never heard of. And to make things even worse, our maintenance fees were growing rampantly, to the point where 10 years down the road they almost doubled. Just the yearly fee itself would have covered a 5 star hotel room for two weeks in Hawaii or anywhere else (forget the $18,000 invested in the purchase price!)
After our son went off to college, we started traveling at less busy times of the year hoping to have a better chance at nicer units, but that didn’t turn out any better. After some research, we learned that resorts save their best units for cash rentals (not foolish timeshare owners, like us!) And to add insult to injury, they even rent them for less than our yearly maintenance fees, for the same period of time.
Last year we finally decided that it was time to get rid of our beloved timeshare, even at a loss. But to our dismay we found out that nobody wants to buy it. Even worse, nobody wants it even gifted! And why would they? It’s a liability. We even tried to donate it to some non-profit organizations that could use it for fund-raisings, but they also said “thank you, but NO, thank you!”
Considering the struggling economy in the past years and ever increasing maintenance fees, sellers outnumber buyers by a huge margin. This has driven the prices of resales down to levels never before seen in this industry. Some timeshares have depreciated over 99%, and it is more and more common for individuals to actually list their timeshares for a single dollar in hopes that someone will take them! There are hundreds of timeshares for sale from owners who are just looking to get out of their annual maintenance fees! Unfortunately, the demand side for resales is just as bad. Most people don’t even know there is a resales market available until after they buy from the developer. Why else would anyone buy new from the developer if they could get the exact same week at the exact same resort for a fraction of the price from an existing owner?
In most cases a contract rescission is not even an option, and if you stop paying your maintenance fees you can be sued, or your credit ruined. Fortunately for us, our contract included a provision for cancellation (written in fine print), which is extremely rare in the industry. In the end, we forfeited out certificate of title and all our points and got out of the deal without having to hire an attorney. I guess we were lucky after all, but I have to admit that we learned a good lesson for the price of $18,000.
Did you have a similar experience?