What's wrong with Timeshares and can the industry survive these issues?

[rapmarks]

I have purchased all of my timeshares resale and all of mine have been purchased in areas that the resale market for these timeshares keeps going up not down. I purchase all of my timeshares to use in the winter months...

Take a look at calini on siesta key. I think some day it will be bought for developer if high priced condos and you will make some money.

 

[Sugarcubesea]

Take a look at calini on siesta key. I think some day it will be bought for developer if high priced condos and you will make some money.

@rapmarks , thanks I will

 

[jp10558]

It’s interesting to me that we are debating something like this and think we all might be missing the point.

The fractional model has several options at several different price points and has existing for many years inside of family networks with the communal family cabin the woods.

Honestly for most people real estate vacation homes historically have been a huge money drain. In more recently with low interest rates and huge appreciation this has turned into an asset class and appreciated, so the mast is not quite as clearly negative. We could blame the Boomers for their retirement flight out of citied to the hills, beaches, and warm locals for much of this, but that’s not my point.

Here’s how I see the industry:
Timeshare replaces hotels- pure consumption

This is important and something in these discussions I've been struggling to express. I don't believe any vacation plan is a financial investment, and people looking at it via that lens always throw me for a loop. As soon as you make it "work", even if maybe you get some appreciation from a vacation home, I feel like it stops being a vacation. Just my definitions. And houses always need something. I want that leaky faucet to be "somebody else's problem" when I'm travelling.

The make money part of timeshares seems mostly dead now, so that leaves saving money as the main motivation.

Were timeshares ever supposed to be about making money? I always thought that was sales peoples lies.

Personally, I think we spend more on timeshares than our standard camping trips in the past, but I must admit the accommodations are quite pleasant and to replace the timeshare with an STR or Hotel would not be any less expensive and would probably be 50%+ higher.

THIS remains the other important point. I honestly believe the mass market of travel, even at the TS $75k annual income average, is not financially buying fractional ownership forget about extra vacation homes where they want to go. Especially as most people seem to indicate they absolutely DO NOT WANT a single destination for future trips. So you're comparing Hotels, or AirB&B sorts of things.

Third Home, Airbnb, etc. have disrupted timeshares growth potential and now are cannibalizing aspects of what the developer brought to the table. Developers/Management Companies responded with pushing points and flexibility in their systems to fight this and seem be holding their own now.

AirB&B to me seems like way more widely applicable than Third Home (I heard Third Home exchange fee is ~$1k). The reason I think ABnB isn't eating TS like rideshare did Taxis is a couple things.

1) As a user, my risk in a rideshare is more limited. If I get a sketchy looking car pulling up, I'm out maybe $23 on average, and I'm 10 minutes at most from hailing a different one in most locations. I'm also only looking for a sub 1 hour (usually sub 20 minutes) trip, and I don't need to sleep or shower or go to the bathroom there. So even if it's sketch, I'm only dealing with it for a very short time. I can also actually call an official taxi, take a bus, etc as easy and near seamless alternatives in many many situations.

None of this is true with an AirB&B - so bigger risk, bigger issue potentially replacing lodging(are they likely at all to have a different "unit"?)... So getting someone over the hump to "give it a shot" is a higher bar to clear, at least for me and my family.

2) AirB&B "got expensive". Because they also are competing against Hotel's - they often are posting $2k+ for a week, whereas in many locations that's more like $1k in the TS if I plan right. For me, even if the TS is == to AirB&B, TS then wins because it feels like the "safer" choice.

3) Familiarity - TS are more similar IMO to a Hotel than an AirB&B is. The amount of expected cleaning is mostly taking out trash and running a dishwasher at a TS. AirB&Bs really run the gamut from what I can tell, and then also charge extra cleaning fees much of the time anyway. Driving up to a "lobby" and "checking in" is far more comforting IMO on a dark night in a strange place (when we often arrive) vs hoping to find an empty house on a "random street" in a residential neighborhood and then ... IDK using a keypad? It's not horrible necessarily - if it all goes "right", but there's a fear level from news stories and such "if it goes wrong" that is another makes me not sure I want to bother.

4) TS have the zoning correct for the locality. AirB&B do not, and some are being shut down because of that. Far more people complaining to representatives and voting care about investors buying up houses and apartments for AirB&B vs Developers buying expensive property and building TS in the zoned locations. Not saying NO ONE is complaining about hotels and resorts, but just that I expect that the developers are way less affecting houses and apartments.

 

[austdav]

First came timeshare weeks but were unable to sell these garbage weeks. I know lets do floating weeks. Hey that worked somewhat but we still got a lot of garbage weeks left. Better yet lets go to a points system. Winner, winner now I can sell winter weeks in antarctica. Even so we have a lot of inventory in off weeks and weeks are being given away to cheep in the trading company's. I KNOW lets charge them resort fees and parking fees on top of everything else even though they purchased a resort where this was already free. We will just donate to a politician and it will be OK. And if they try to give there week back we will charge thousands of dollars to do that. Also if they try to use an outside company to get rid of there week we'll sue them and get millions of dollars and still not let people out of there weeks without paying us. Hey let's keep thinking of other ways to keep raising fees till the next big move comes along. Let them just try to fix this. IMPOSIBLE.

 

[ScoopKona]

then it would be easier to buy are Retail knowing the possible resale price.

There are people buying at Ka'anapali and paying full-freight developer prices because there are no resales.

The numbers still work. If every timeshare was built in a place like that, we wouldn't have these problems. But timeshares in general attract "the cheap elite." That includes me. I want the best. I just dislike paying one-percenter prices for it. (Carmel, Napa, Aspen, Paris, etc.)

 

[CalGalTraveler]

The numbers are starting not to work in Ka'anapali because the MF are approaching $4k - more than double a few years ago.

 

[rickandcindy23]

We own at a resort that was built about 1982 or 1983, we bought developer, and it's not really a "resort" but more of a townhouse with a hot tub and garage. It's near Breck in Frisco. We have so many bad debt weeks (not getting MF's) at this point that we are going to combine owners from one unit to other units, and we will sell it outright as a whole townhouse. There is one in the building of 7 units that is already wholly owned. That one was sold by the developer to one person way back when.

We know we can net quite a bit by selling the one unit. We can put money into reserves and take care of some big updates we wanted to make on the other five units. Yes, this one has only six units now. We own 7 weeks.

 

[wrk2travelalot]

Here are four things that I believe are wrong with timeshares that if fixed could change things. There are other issues but if any one of these could be fixed, the industry might enjoy new life.

• Purchase price – Over and above a great return on investment for developers, buyers pay commissions for high pressure salespeople that are not exactly cheap. This is compounded by the unrealistic expectations of new owners.
• Maintenance Fees – In all fairness, MF is a function of use, so seasons are not considered when making the assessment, however when an owner is unable to use their week the seasonal difference becomes evident in terms of ease of exchange or rental.
• Divestment – When change of circumstance or need, occurs and the TS owner must sell, they are left to absorb an unfair portion of development cost. This dynamic is the main reason that TS’s now have a poor reputation.
• Resales – Overdevelopment in the most popular TS markets is a problem. These weeks now turn up everywhere and sometimes drive prices below MF. Of all the issues with timeshares, this one is probably the most difficult to fix.

I posted an idea a week ago that I thought would be helpful, I realized from the responses that we have some really knowledgeable owners. So why not think bigger, if we can come up with a fix to the issues there would be a blueprint to build TS that work equally for the developer and owner.

 

[wrk2travelalot]

I have had my timeshares for many years. I think the comments by Boyblue sum up about everything. A nice hotel room in Chicago right now costs over 300+ for night and the amenities are not as good as my TS trades. I hate the almost yearly MF increases but then my HOA fees are going up to. If you realize TS create generational memories--you cannot put a price on that and is not a monetary investment to make money. I do wish there was a better re-sale option for life changes.

 

[4TimeAway]

That includes me. I want the best. I just dislike paying one-percenter prices for it. (Carmel, Napa, Aspen, Paris, etc.)

I think that goes for 99.99% of TUG members.

Your homebase in paradise could become a Timeshare...

Hope the project is on schedule and reasonably close to budget... I know the later always depends on the specifics.

 

[LannyPC]

Are we talking rent rate 20% above MF? 30%?

That's a good start. So if the MFs are about $1000 per week, being able to easily rent it out for $1300 per week would be good. That extra $300 would cover Pay Pal fees, advertising fees, and compensate you for your time and effort communicating with the tenant. But the key is it would have to be easily rented out for at least 30% greater than the MFs to make it worthwhile. When I say "Easily", I mean that I could advertise it for rent at least some six months before check-in date and, shortly after the ad is posted, have a number of genuine inquiries without people trying to haggle and lowball offer. If, say about one month before check-in I haven't received any bona fide inquiries, then I do not consider that to be "easily" rentable.

The other side of the coin is, if I want to use a week, is it worth it for me to own and pay $1000? Or what would I have to pay if I wanted to just rent it (and save the headaches of ownership)? If rentals for that week can easily be found for less than 30% above the MFs (so in this case $1300 or less), then it probably is not worth it for me to own. I would just rent. But if they are hard to come by and weeks there routinely garner at least 30% more than the MFs, then it is probably worth it for me to own.

 

[LannyPC]

I think the comments by Boyblue sum up about everything. A nice hotel room in Chicago right now costs over 300+ for night and the amenities are not as good as my TS trades.

That definitely can be good. OTOH, here are some arguments in favour of hotels and/or AirBNB over TSs.

1) There are a few exceptions but, for the most part, TSs are one week. With hotels, you can choose however many days you want starting whatever day of the week you want.
2) For some people, the amenities of a TS (kitchen, full bedroom, full living room, washer and dryer, etc.) as nice as they are to have, are redundant. some travelers just need a place to lay their head at night and shower in the morning. They don't spend their vacation time in their room. They're out and about all day.
3) Most motel/hotel rooms come with a daily breakfast. Many travelers don't want to be spending their vacation time cooking and cleaning. Besides, if they're out all day for attractions and activities, they're rarely at the accommodation place for lunch and/or dinner.
4) Some travelers like the daily maid service. They don't want to be spending vacation time cleaning such as making their beds.
5) As for "amenities are not as good as....TS trades", some travelers do not spend the daytime at the resort using amenities. They are usually out and about at nearby attractions and activities such a theme parks or beaches.

Of course, this is all a matter of to each his own and different stroke for different folks. Again, I'm not arguing that TSs are bad or inferior to hotels. I'm just pointing out what many other travelers feel.

 

[jp10558]

The other side of the coin is, if I want to use a week, is it worth it for me to own and pay $1000? Or what would I have to pay if I wanted to just rent it (and save the headaches of ownership)? If rentals for that week can easily be found for less than 30% above the MFs (so in this case $1300 or less), then it probably is not worth it for me to own. I would just rent. But if they are hard to come by and weeks there routinely garner at least 30% more than the MFs, then it is probably worth it for me to own.

I'm honestly not clear where these "I can just rent a TS week" places are. There's some on eBay that seem to be Wyndham, which as far as I know are illegitimate - Wyndham doesn't allow rentals like that, so that pushes me into the AirB&B or more risk territory. On TUG and Redweek, I both see much higher asking than 30% IMO, and not a lot of listed availability anyway.

Is there a "secret" to this renting I don't know? Or what's an example rental you feel is the "don't own" type, assuming you don't have access to RCI/II for cash rentals?

 

[jp10558]

That definitely can be good. OTOH, here are some arguments in favour of hotels and/or AirBNB over TSs.

1) There are a few exceptions but, for the most part, TSs are one week.

More than you might think - both points and my one rental let me do less than one week, though I don't know that one night stays are very common. There's a LOT of points systems now.

2) For some people, the amenities of a TS (kitchen, full bedroom, full living room, washer and dryer, etc.) as nice as they are to have, are redundant. some travelers just need a place to lay their head at night and shower in the morning. They don't spend their vacation time in their room. They're out and about all day.

This very much depends on the person. And you're right - if you can do one hotel room, and you're going to do less than a week, and you're always eating out - hotels can make a lot of sense. Hotels are also way more likely to be near a specific location or city - timeshares are kind of part of the destination too. The big thing is if it's one or two people traveling a hotel room is "fine". If it's 3 or more, then while in some situations you can make one hotel room work, much of the time you're going to need more than one.

3) Most motel/hotel rooms come with a daily breakfast.

That ends way too early lol. I often would struggle to get to food before noon(there must be some other night owls on this forum). I've also found the quality of that breakfast has gone downhill even as more places offer it. To the point that I'm not sure I'd want to eat it more than once TBH in a trip. I also think that if you're a person looking for cheap accommodations where breakfast included mattered to you, you might be someone who'd prefer $15 off their nightly rate to the breakfast, IDK.

5) As for "amenities are not as good as....TS trades", some travelers do not spend the daytime at the resort using amenities. They are usually out and about at nearby attractions and activities such a theme parks or beaches.

Of course, this is all a matter of to each his own and different stroke for different folks. Again, I'm not arguing that TSs are bad or inferior to hotels. I'm just pointing out what many other travelers feel.

I think we all agree TS are for a specific type of person - so I don't disagree with all this. I will say, as I get older I have more and more people I travel with or talk to with dietary restrictions that make eating out darn near impossible. You'd think there's enough people out there with dairy, gluten, etc that more restaurants would take sensitivities into account with some offerings, but that doesn't seem to be the case.

I maintain, the less you care about a hot tub, and the less you need more than one bed room, the less sense a TS will make for you.

 

[dioxide45]

That ends way too early lol. I often would struggle to get to food before noon(there must be some other night owls on this forum). I've also found the quality of that breakfast has gone downhill even as more places offer it. To the point that I'm not sure I'd want to eat it more than once TBH in a trip. I also think that if you're a person looking for cheap accommodations where breakfast included mattered to you, you might be someone who'd prefer $15 off their nightly rate to the breakfast, IDK.

Yeah, too early and too short. The last Townplace Suites we stayed at had breakfast from 7:30 to 9:00. A whole hour and a half for a shitty breakfast.

 

[jeffox]

I'm honestly not clear where these "I can just rent a TS week" places are.

Check out Armed Forces Vacation Club AFVC for military and veterans, maybe first responders.

 

[Ralph Sir Edward]

In between the two ends (TS and Hotel) there is what I call "timeshare light". Suite hotels.

The disadvantages are fewer locations, and less amenities. They are not always available in the choicest locations, either.

The advantages are - no continuing MFs. You only pay for what you use, when you use it. Of course you have to plan well in advance to get the best rooms where you want them, but then again you have the same problem with TS's (especially with the point systems).

Just another viewpoint.

 

[LannyPC]

I'm honestly not clear where these "I can just rent a TS week" places are.

Have you checked out TUG's Last Minute Rentals section?

 

[jp10558]

Have you checked out TUG's Last Minute Rentals section?

Sure, but the issue is very few could work for me because they're too close to the travel date to get flights and make all those plans. I'm not saying they wouldn't work for anyone - but it can be hard to work just like the RCI Last Calls. I guess for me - that's not a replacement for owning where I can plan it out months in advance.

 

[dioxide45]

In between the two ends (TS and Hotel) there is what I call "timeshare light". Suite hotels.

The disadvantages are fewer locations, and less amenities. They are not always available in the choicest locations, either.

The advantages are - no continuing MFs. You only pay for what you use, when you use it. Of course you have to plan well in advance to get the best rooms where you want them, but then again you have the same problem with TS's (especially with the point systems).

Just another viewpoint.

The problem with all suites or extended stay hotels is, as you mentioned, they aren't in ideal locations. Many are located off the interstate and they have nowhere near the amenities you will find at most timeshare resorts. These are nowhere near a replacement for any of the major hotel timeshare systems.

 

[LannyPC]

A nice hotel room in Chicago right now costs over 300+ for night and the amenities are not as good as my TS trades.

The other thing with this statement is this. How many families vacation in Chicago? Is it a tourist destination for fun like Orlando, Arizona, or Mexico? I'm guessing these $300/night hotel rooms in Chicago are aimed at business travelers who can write these off as business expenses. Or they might be for people who need an overnight to catch connecting flights seeing how busy ORD is.

Does Chicago have any major TS resorts?

 

[Snazzylass]

The other thing with this statement is this. How many families vacation in Chicago? Is it a tourist destination for fun like Orlando, Arizona, or Mexico? I'm guessing these $300/night hotel rooms in Chicago are aimed at business travelers who can write these off as business expenses. Or they might be for people who need an overnight to catch connecting flights seeing how busy ORD is.

Does Chicago have any major TS resorts?

awe, come on, you've been around long enough to know that it's not typical for T/S to be in major cities, though I've seen a lot of requests for Chicago over the years.

ORD is a different hotel market than downtown Chicago, though both are popular in their own ways. I've had business overnights at both, along with seminars near ORD, and put up by the airline, too.

Downtown Chicago is a popular with both families and couples. Theatre, fine dining, museums, baseball, loads to do! It's more accessible and walkable than NYC. A very popular Midwest destination. So, yes! very much a tourist destination. I've run into foreign travelers there to see Frank Lloyd Wright's home, and families from my neighborhood on school breaks - same as Orlando. Yeah, you might think fall break would be a good time to run up there and then you realize everyone else decided to do that, too.

 

[ScoopKona]

Theatre, fine dining, museums, baseball, loads to do!

There are usually more foreign visitors at the Art Institute of Chicago than there are residents. It is one of the most magnificent collections on the planet.

 

[Sugarcubesea]

You never mentioned the problems caused when the developer maintains a seat on the board. My last timeshare was independent (not part of a chain), and the board (elected only from the owners) ran the show. Yes, they made some mistakes and should have had more oversight, but the properties were well-maintained, the maintenance fees were reasonable, and they never nickel-and-dimed you with add-on fees for every little thing.

All of the timeshares I own are independently owned except one and that one will be up for sale in 2025. Each of these are run well and I agree they BOD can make mistakes, but sometimes in that snapshot in time you have to make the decision that is best available and then after you can see that another option is better...

 

[rapmarks]

I can’t believe it now, but when I was 12 and up, I would borrow my aunts train pass and take the train into downtown Chicago all alone and go to the library, the stores, and the museums on a Saturday.