From our friends at One Mile at a time:
I recently wrote about how Solaz Los Cabos (which is a property with both a hotel and timeshares) suddenly and mysteriously closed down last week. An interesting discussion emerged in the comments section about timeshares. Several readers asked why I never write about timeshare deals, or what a great value they can be.
In this post I wanted to share my take on why I’d never consider buying a timeshare. It’s just my opinion, and I invite readers to help me understand what I’m missing.
In this post:
What is a timeshare?
To start, I wanted to briefly share the concept of a timeshare. While the exact details vary significantly, the idea is that you purchase fractional ownership for accommodation at a resort:
You typically buy a certain type of unit (one bedroom, two bedroom, etc.) for a minimum of one stay per year
At some properties you purchase a specific week, and in other cases you have more flexibility
Some properties exclusively have timeshares, while some properties have a combination of timeshares, residences, and/or hotel rooms
Timeshares are typically valid for extended periods of time — some might be valid for 20 years, while others are valid “forever”
You usually pay a large amount upfront (which can be financed), and then you pay an annual maintenance fee
For many timeshare programs, there are opportunities to “trade” your timeshare for a stay at a different resorts; fees and opportunities for doing this vary
Those are the very basics, though hopefully that’s a useful summary for those who aren’t familiar with the concept.
My childhood timeshare guilt
I have a confession to make, because to this day I have timeshare related guilt. I grew up in Tampa, and when I was a young kid I managed to convince my parents that we needed to get a timeshare.
More specifically, we got one of those deals where you could go to Orlando for a long weekend for a small amount of money, and just had to attend a timeshare presentation. Of course the presentation made the concept sound amazing.
A week in Orlando every year for the rest of our lives, all at an affordable cost? What could possibly go wrong? We were told what a fantastic investment timeshares are. We were told how we could trade our week for destinations around the world. We were told how hot the timeshare market is, and that if we ever wanted to sell our timeshare, we could probably do so at a profit. We were told that the timeshare could be handed down forever, and that this would be the greatest gift we could ever give children and grandchildren.
Well, fast forward a few years. As it turns out, while 10 year old me thought vacationing in Orlando every year for a week would be the funnest thing ever, that feeling didn’t last. Exchange options were extremely difficult, and my dad spent 10 years trying to get rid of the timeshare. He couldn’t even give it away for free, and just have someone take over the maintenance fees.
Eventually he paid a company to take it off his hands and transfer it to someone else. To this day I feel guilty about that, and have committed to never even considering a timeshare.
The argument in favor of timeshares
A reader left the following comment on my post about Solaz Los Cabos, which I think basically sums up the argument in favor of timeshares:
Timeshares are a phenomenal investment. Even if you hate the idea you can’t argue that the room cost is way way way cheaper in comparison to inflation. I have yet to meet someone who owns a timeshare who USES it who doesn’t love it.
And I think that statement is mostly fair. A timeshare can represent a great deal if:
You want to vacation in the same place for the same week every year for the rest of your life, and for the rest of your ancestors’ lives (for those timeshares that are valid “forever”)
You have 100% faith in the owners of the timeshare, including that they’ll stay in business, that they’ll continue to maintain the property in its current condition, that they won’t increase maintenance fees disproportionately, etc.
Why I don’t think timeshares are worth it
There are a variety of reasons I’d personally never consider buying a timeshare, which I’ll outline below. Let me acknowledge that everyone is entitled to their own opinion, and I’d welcome timeshare owners to correct me on any points I’m wrong on.
It’s also worth mentioning that not all timeshares are created equal, and I’m sure some do business more ethically than others. However, I think the below points are generally true.
The sales process is ridiculously sleazy
The only timeshare presentation I’ve attended as an adult was at Solaz earlier this year, and I was basically forced into it. To be clear, I didn’t book a special timeshare rate or anything, but rather had redeemed points. During check-in I was directed to a room (allegedly an “art museum” that they show all guests while checking in), but then they badgered me and wouldn’t let me leave until I agreed to attend a presentation.
I find everything about the process of selling a timeshare to be sleazy at best, and predatory at worst. They use very pushy sales technique out there to get you to agree to a commitment that will last 20+ years (or in some cases forever):
They try to get you to drink alcohol
They’re outrageously pushy, and use the “good cop” and “bad cop” approach
They try to pressure you to make a decision right away, and claim you’ll never get this deal again, and you can’t get it once you leave the presentation
Some staff pose as guests to pretend that they’ve just made a purchase, to get other people to do the same
The whole pricing model has no transparency — when you say no to the price for one week, they offer to throw in a second week at no extra cost, then offer to lower the cost even further, etc.
They lie through their teeth — once you’ve made it crystal clear that you’re not interested, they pretend that something just became available that minute that’s cheaper, and when you say no again you’re directed to someone else who claims to be soliciting feedback on the presentation, but then tries to sell you again
Why would anyone voluntarily want to do business with such jerks? A timeshare presentation makes me yearn for interaction with a cable or cell phone company.
Below is a real timeshare sales staff meeting clip — this isn’t a parody. The strategy is to convince people selling timeshares that they’re saving lives, because people who vacation more are less likely to have a heart attack. Therefore timeshare salespeople are like doctors, nurses, and firefighters. Right.
Contracts are ridiculously one-sided
Airline contracts of carriage are extremely one-sided. Airlines hold all the control, and consumers have very little control. But the sad reality is that you don’t have an alternative, because all airline contracts are that way, and there are many situations where you can’t avoid flying.
Timeshare contracts are equally one-sided, except they’re a much bigger commitment, and they’re easier to avoid. Generally speaking:
Timeshare contracts don’t guarantee how much your annual maintenance fee will increase
Timeshare contracts don’t guarantee in what condition the complex will be kept
Timeshare contracts don’t give you an “out,” so you’re stuck paying maintenance fees for as long as you own your timeshare (whether that’s 20 years or “forever”)
If there are financial issues with the timeshare company, you’re in big trouble
While you own something when you buy a timeshare (a theoretical week every year, or whatever), in reality you don’t really own anything
Timeshare properties are solely motivated by hoping to sell more timeshares to more people, since there’s no incentive to take care of existing clients, since they’re already on the hook and don’t have an out.
I think the current situation at Solaz Los Cabos is the perfect example of how shady timeshares are:
Solaz has mysteriously closed, yet isn’t communicating honestly to owners about what’s going on
Solaz is offering either to refund the maintenance fee for the upcoming year (which in no way addresses what you paid to buy the timeshare to begin with), or to put you up at a significantly inferior “sister” property — neither of those offers are acceptable
Timeshare owners are truly powerless in these situations, and it seems to me like any financial problems at a resort will only be exacerbated when there’s a timeshare involved, given the complicated ownership structure
Your travel options are highly restrictive
In theory I can see the draw of buying a timeshare if you plan to go to the same property year after year. Personally I don’t know where I want to live in five years, let alone where I want to vacation then, since life circumstances are constantly changing. We all evolve over time, and I’d think that also applies to travel preferences.
One thing I often see promoted about timeshares is how you can “trade” your week for a stay at another property. However:
For many of the places people really want to travel to, this can be harder than finding the most sought after first class mileage award ticket
There’s typically a further exchange fee, sometimes even greater than the annual maintenance fee
Committing yourself to play this unnecessary game for decades to come just seems silly to me.
The math doesn’t add up to me
For those who talk about what a great “investment” timeshares are, I’d say that:
This generally doesn’t factor in time value of money, since you’re pre-paying for your vacation two decades from now — how much could the initial amount be worth in 20 years if invested properly?
You’re not really factoring in the risk — the risk of maintenance fees going up, the risk of financial problems for the developers, the risk of your lifestyle or preferences changing, etc.
Timeshare properties often also sell stays by the week to fill rooms, and that pricing is often similar to the maintenance fees you’d otherwise pay; after we attended the Solaz timeshare presentation and they knew we weren’t interested, we were asked if we wanted to return for a week to “experience” the timeshare for a greatly reduced cost
If you’re maximizing miles & points correctly, there are plenty of ways to get awesome deals on hotels
Where there might be value with timeshares
I do think there are timeshare opportunities on the secondhand market. There are lots of people who have success picking up timeshares for next to nothing as others try to drop them, and in those cases I believe there could sometimes be value for timeshares for some types of travelers.
Of course that’s not how most people buy timeshares — rather they buy them directly from the developers during a high-pressure sales pitch. But for those who invest a lot of time into researching, I suspect there are some opportunities.
While I absolutely believe that some people get a good value out of timeshares, it’s simply something I’d never consider. Perhaps it’s partly because of the guilt I feel from my childhood of convincing my parents that an Orlando timeshare was a good idea.
But personally I find timeshares to be the least appealing accommodation concept out there, and everything about it feels slimy to me — the sales process is sleazy, you’re entering a one-sided contract often valid for the rest of your life, and the only motive of timeshare properties is to sell more units, rather than take care of existing owners.
While I’m all for getting a deal, to me timeshares are the wrong kind of deal-chasing — you’re paying a lot of money upfront for a lot of uncertainty. Maybe there are some opportunities on the secondhand market, but otherwise…
Where do you stand on timeshares?