By: Kevin Co
The “hard” sales techniques, unexplainable price drops, and low-quality resorts are generally disappearing. That means many vacationers now view timesharing as a viable and economical option for future vacations. But they need to know much more to make an intelligent purchase.
With the entrance of companies like Disney, Marriott, and Hilton into the field, the timeshare market is exploding. In the past two years, almost 500,000 households have purchased a total of more than 700,000 week-long units at timeshare resorts. That means there are more than 2 million owners at more than 2,000 resorts worldwide. Contrary to popular belief, a recent study by leisure survey experts Ragatz Associates showed that more than 80% of these owners are happy with their purchases.
“It is clear that timesharing is gaining in popularity, not only here in the U.S., but also across Europe, Mexico, and in South America,” says Tom Franks, president of the American Resort Development Association, the timeshare industry body, based in Washington, D.C.
In timesharing, consumers typically buy one or more weeks at a specific resort and can return to that resort every year or “trade” it for a week at another resort with an exchange company. Prices currently average about $9,000, with annual maintenance fees of around $300.
Vacation timesharing generally takes one of two forms: “Fee” timesharing gives the purchaser permanent rights–in the form of a deed–to the property. About 85% of timeshare resorts sell under fee-ownership agreements. “Right-to-use” timesharing grants the purchaser the rights to the use of the property for an established period of time, such as 30 years. Under this type of timesharing, the purchaser does not receive a deed.
Rather than return to their home resort every year, many owners opt to exchange their week for a week at one of the thousands of other timeshare properties worldwide. For a fee (usually less than $100), companies like Resorts Condominiums International (317/876-1692) or Interval International (305/666-1861) perform these exchange services for member resorts and owners.
Many owners say this exchange privilege was a key reason for buying and have had much success with the exchanges. The keys to successful exchangers are: buying at a popular resort (this increases exchange power); “depositing” the week with an exchange company as early as possible (this gives the exchange company more time to find a user for the week being exchanged); and being flexible on the desired destination, resort, and dates of travel.
The Orlando, Florida area serves as an ideal example of what’s available. It’s a huge market for vacationers from throughout the world in search of a piece of that Orlando “magic.” There are dozens of options available and the area is a great place to own for one or more weeks if you know where to go.
Well-established possibilities include Island One (407/859-8900); Marriott (813/688-7700); Orange Lake (407/239-1082); and Vistana (407/239-3008). At these and other resorts, you’ll find a full host of amenities, often including kitchens, decks, pools, restaurants, golf courses, tennis courts, and much more. These timeshare resorts are more like fully-equipped apartments or suites, rather than standard hotel rooms.
Walt Disney World recently opened its first timeshare resort, the Disney Vacation Club (407/939-3100). As would be expected, they have developed some unique features for their timeshare concept.
Disney tackled two of the major issues in the timeshare industry today: flexibility and aggressive sales techniques. Along with many other timeshare properties, Disney has moved to improve these two areas and the early reviews give them high marks.
By purchasing a real estate interest in Disney Vacation Club Resort, guests automatically become members of Disney Vacation Club and are entitled to a variety of exclusive benefits and privileges. Members also receive an annual allotment of vacation points, which may be used on vacations at the resort or at more than 100 worldwide resorts currently offered through a “Member Getaways” program with RCI.
“The flexibility of choosing among several different vacation experiences is what sets the Disney Vacation Club apart from many similar plans,” says General Manager Mark Pacala. “The vacation point system allows members to select the type of vacation best suited to their needs, particularly as those needs change from year to year.”
Disney has also attacked the overly-aggressive sales techniques that used to plague the industry. They don’t provide any incentives or awards for prospects attending the sales presentation and their sales force mostly receives a fixed salary, rather than high commissions for high volume.
For a one-time purchase price, guests may purchase a real estate interest in the resort, which expires after 50 years. Prices currently run from $11,730 to around $16,000.
The points system, which is becoming much more popular in the timeshare industry, is much easier to understand than it first appears. Let’s say that with your Disney Vacation Club ownership interest you have 270 points to use each year. You could reserve a two-bedroom home for a week’s stay in June or enjoy a five-day family reunion in July in a three-bedroom Grand Villa. Other options would be to reserve a two-bedroom home for a nine-day stay in September or an incredible stay of several weeks in a studio unit.
Disney’s timeshare operation is typical of the exciting future for the industry and astute timeshare buyers. There are timesharing options throughout the U.S., with huge multi-site options like Hilton Grand Vacations (813/482-7766); Fairfield Communities (800/251-8736); and the Lawrence Welk Resort Group (619/485-5556); as well as small and intimate single-resort operations. You’ll find apartment-like accommodations in a resort-like atmosphere.
Timesharing is not limited to the U.S. at all. This worldwide industry is very popular in Mexico, South America, Europe, and several other parts of the world.
More than 100,000 weeks were sold in Mexico last year at more than 100 different resorts. Prices tend to be lower than the average $9,000 purchase price in the U.S.
Potential buyers should consider Cancun and Cozumel; Puerto Vallarta; Acapulco; Ixtapa; and Manzanillo, a regional resort area for Mexico City, which is favored by Mexicans and generally features even lower prices (less than $5,000). To get started in Mexico, contact reputable multi-resort operator COSTAMEX at 305/267-7855.
South America is a relatively new hot-spot for timesharing, but the industry there is growing quickly. The Argentinian coast and mountains (skiing during the U.S. summer) is currently the most popular spots for development. Visitors to Argentina should explore the options in Buenas Aires, Mar del Plata, Miramar, and the Cerro Catedral ski area. The Uruguay coast resort area of Punta del Este is also becoming a timeshare hub.
Timesharing actually started in Europe, before blossoming in the U.S. There are hundreds of options throughout Western Europe, the Mediterranean, and Scandinavia. As can be expected, resorts are most prevalent along the coasts and in the Alps.
Southern Spain is probably the leader in sunny European timesharing. Dozens of timeshare resorts dot the Costa del Sol area. It’s easy to comparison shop along the coast, but definitely check out several of Club Riviera’s options (011-34-52-831252). Other timeshare hotspots include the Canary Islands, Portugal, the French Riviera, Greece, and Turkey.
The Alps appeal to many timeshare buyers and for good reason. A timeshare unit can save lots of money on ski trips or summer vacations in the mountains. There are several options in the French Alps, Switzerland, and Germany’s Bavaria, but Austria seems to have the best overall bets. Timesharing Ferienclub Jausern in Sallbach-Hinterglemm (011-43-65-41-503) is typical of Austria’s club-like mountain resorts.
Timesharing isn’t for everyone. It’s not a true real estate “investment” and the resale market is tight. Simply put, plan to buy it, keep it, and enjoy it.
The industry body ARDA (see below) has many excellent publications about timeshare purchases. Their office is a great starting point for interested buyers.
Kevin Co writes for www.timesharemadness.com where you can find out more about timeshare and other topics.
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