Timeshare
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A vacation timeshare is a form of vacation property. Instead of purchasing a vacation home that you cannot use for most of the year, timeshare allows families to purchase a fractional share in a vacation property. This share could be one week per year (i.e. 1/52 share) or more; some resorts offering one week every other year (1/104 share) or four weeks per year (1/13 share). Some timeshares are sold as fractional ownership in a trust that owns one or several resorts.
The notion of a timeshare was originally created in Europe in the 1960s. A ski resort developer in the French Alps innovatively marketed his resort by encouraging guests to "stop renting a room" and instead "buy the hotel". The developer was successful in increasing occupancy and the idea spread worldwide.
Timeshare properties tend to be apartment-style units ranging in size from studio units (with room for two) to three and four-bedroom units that can comfortably house large families.
Timeshare owners can elect to stay at their resort during the prescribed period, which varies depending on the nature of their ownership. They can rent out their week or give it as a gift to friends and family.
Most significantly, timeshare offers owners the possibility to exchange their week, either independently or through several exchange agencies, to stay at one of the thousands of other resorts worldwide.
Today's timeshare industry includes nearly 6,000 resorts worldwide, for a total of 11 million timeshare "intervals" that have been individually sold to nearly 7 million families around the world. There are timeshare resorts around the world. Global timeshare sales total over $9 billion annually, with a projected growth rate that is twice that of world tourism. 75% of timeshare intervals are sold by major players in the hospitality industry (i.e. Trendwest, Marriott, Disney and the world's bestselling timeshare company Resort Properties). Recent surveys conducted by the American Resort Developer's Association and the Organization for Timeshare in Europe indicate that virtually all timeshare owners are satisfied with their purchase.
The concept of vacation timeshare has also been extended to luxury items such as planes and luxury cars.
Pros and Cons of timeshares
The timeshare industry has been widely criticized and even sometimes likened to a travel scam. Unlike the customary renting arrangement, where the customer decides every year on the quality and price of accommodations, timeshare requires to make a major payment up front. However, this payment guarantees the highest quality of holiday accommodation for life. There exist grave doubts as to whether the timeshare buyers ever recover the money spent, but the vast majority of timeshare owners have no desire to exit the system and find the high quality of their holiday accommodation makes their financial outlay a logical expenditure and excellent value for money.
There are also some complaints that owners have to return to the same resort every year, but there now exist a couple of companies - the best known being RCI - that enable timeshare owners to exchange their weeks into literally thousands of high quality resorts around the world.
Other complaints include issues surrounding the yearly maintainence fee. Some critics talk of ever escalating fees that mean owners cannot afford to keep their weeks due to financial pressure.
One of the major benefits of the product is the fact that vacation timeshare is real property. Resort developers purchase land in a location and develop a timeshare resort. They are actually selling consumers deeded weeks of real property at a specific location, meaning customers can do what they wish with the weeks they own. This flexibility includes the opportunity to rent out weeks that are not used or indeed to lend them to friends or family.
Like any other product, timeshare exchange is subject to the law of supply and demand making the exchange mechanism a fair and meritocratic system. For example if you own a studio apartment in low season you are unlikely to be able to exchange into a villa during a country's high season. These restrictions are logical and a pure example of the "you get what you pay for" maxim.
Timeshares were made fun of in an episode of South Park.