Getting To Grips With Timeshare Products

Timeshare or shared vacation ownership products are inherently complex and bewildering to the average consumer. Understanding it will help you avoid pitfalls when buying timeshare and ensure that you reap all the benefits of this vacation lifestyle by making the best possible use of your timeshare.

Spokesman for the Vacation Ownership Association of Southern Africa (VOASA), Alex Bosch, explains that it’s often easier to understand shared vacation ownership when you compare it to other timesharing examples as it is not unique to the vacation industry. “This concept is used every day across many business sectors such as the timesharing of private jets instead of buying the whole plane,” he points out.

“Or, consider the vast majority of golfers who cannot afford to own a championship course, but are still able to play golf and enjoy the benefits of the course by becoming a member of the golf club. The course is owned by the club, which is funded by the member’s joining fee and annual subscriptions to cover the running costs and maintenance each year. In the same way, Holiday Club members don’t need to own a luxury holiday home with an ocean view or a rustic log cabin in the mountains to be able to enjoy these benefits,” Bosch elaborates.

The truth of the matter is that if your idea of a vacation means sleeping on a relative’s couch, then timeshare is most likely not right for you. But, if you are an avid vacationer who invests time and money in creating memorable holidays in sought-after destinations then timeshare offers a variety of products that will fit your combination of lifestyle, usage and ownership requirements.

However, VOASA cautions consumers to be sure that the type of vacation product they choose is best suited to their individual needs before signing on the dotted line.

“This is like the principals of buying a car. You must decide whether your lifestyle calls for a convertible, bakkie, sedan or SUV. Do you want an entry level model or are you looking for a higher level of comfort with more features that comes with an extra cost?

“Remember that timeshare is a ‘use product’, so to be happy you need to be getting the most out of it because it comes with a cost whether you use it or not – the same as a gym contract. The price of your shared vacation ownership is established at the time of your purchase, which means you are safeguarding your future holiday accommodation costs against inflation and peak season rates. Most importantly, it is advisable to have an envisaged long-term usage plan and to know what your exit options are should you wish to exercise them,” explains Bosch.

Conventional Timeshare vs Holiday Clubs

 Conventional timeshare ownership entails the payment of an upfront sum for a fully furnished accommodation plus yearly maintenance fees. Depending on the agreement, owners either own the rights to a specific, fixed week (for example from the 1st to the 7th of January each year) or the rights to a floating arrangement where you can visit for a week within a period each year (for example a week between the months June and August every year).

Holiday Clubs are a newer variation of the conventional timeshare model and presented an opportunity to invigorate the product offering. Instead of purchasing the rights to a specific unit, holiday club members pay an upfront sum to purchase a specific number of points, which can be redeemed for different vacations each year. Annual resort maintenance fees still apply but are not subject to any profit. The number of points translate to different types of vacations based on the desirability of the resort’s location and the time of the year.

Product Types

Fixed week ownership allows you to use an accommodation unit for a specific ‘fixed’ week annually for the duration of your vacation ownership. Weeks are identified by a unique number starting with the first full week of the year (week 1) and continue to the end of December. A fixed week will typically start on a Friday, Saturday or Sunday depending on the resort.

Floating week ownership is a little more flexible. Depending on the resort’s availability, you may use your week at any point during the year.

Flexi week ownership is like floating week ownership; however, you need to choose from a predetermined set of weeks within a particular ‘season’. Seasons are commonly designated by demand due to the competition among existing owners for prime weeks.

The points system is one of the newer forms for vacation usage. This module enables the owner to acquire an allotted number of annual points that can be used for vacations. The more points purchased, the more flexibility offered when wishing to travel during high season. Likewise, more points equate to a larger accommodation unit or a more desirable destination or resort.

Fractional Ownership is real estate sold in modules of more than one week, but less than whole ownership. It is usually associated with the luxury vacation ownership segment of the market and offers extravagant collections of five-star accommodation situated in opulent resort hot spots.

Private Residence Clubs are maintained by 5-star hospitality giants. This is like renting the largest suite at a 5-star resort, then adding a full kitchen and a few more bedrooms and bathrooms. Membership into these clubs can vary from fractional ownership, whole ownership and points-based programmes.

Rental and Exchanges

Through an exchange company you have access to thousands of resorts worldwide, thereby vastly increasing your vacation options. Internal exchange within some of the holiday clubs can also be a useful way to mix up your yearly trip. And, when you are unable to use your timeshare, you have the option to rent it out and recover some of your costs or give it to your family and friends to enjoy as the perfect vacation gift.

If you missed Part 1 of VOASA’s Understanding Timeshare series, you can read it at: https://voasa.co.za/#blog

For more information, visit: www.voasa.co.za

 

Image: The Peninsula Balcon
Image: The Peninsula Balcon

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