Differentiating Right to Use Timeshares, Travel Clubs and Fractional Ownership

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Thousands of travelers across the country are continuously searching for riveting, cost effective vacation packages to explore. In today’s online marketplace, there are numerous options for them to choose from. But when you’re searching for the best deal, nearly every advertisement claims to provide the best escape for you. While the nomadic culture might be able to navigate these options effectively, people new to the travel landscape can easily become overwhelmed. Over promises, deceiving prices and enticing offers can eventually place many aspiring travelers in a financial hole that detours their travel plans. Fractional ownership, point certificates, travel clubs and right to use timeshares all have their flaws.

After talking to thousands of fractional owners about their financial burden, we’ve realized that many of them never even knew what their contract entailed. Instead of asking an experienced voyager for guidance, they allowed a salesman with commission breath to persuade them on an option that isn’t mutually beneficial. Blaming the buyer may seem fair, but a lack of disclosure plays a big role in their inability to make an informed decision. People deserve the right to know  what they’re buying.

Since fraud is a normality in the timeshare industry, educating people on the terminology behind fractional ownership is really the only way to address the problem. When you think about it, most people that attend a timeshare presentation have no intention of buying. They simply show up for the free stuff. But it’s hard for some to say no when a “can’t miss deal” is right in front of them. Especially when traveling hasn’t been a big part of their lifestyle.

Because of this, we’ve shifted our focus to helping aspiring travelers navigate the vacation arena. Even though our cancellation company is funded by bad decisions, we want to play a bigger role in eliminating hardship and regret. You can’t count on the timeshare company to point you towards the best vacation package. Getting you locked into an agreement is their only concern. Each of our clients wish they would have taken the time to consider their choices before committing to something they knew little about. Regardless, helping you understand the differences between right to use timeshares and other travel packages will hopefully help you make informed decisions moving forward. Today we’re going to talk about travel clubs.

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Travel Clubs – Discounts Without Much Obligation.

This form of travel derives from an established consortium of corporations and individuals that work together to develop an affiliation of wholesale travel packages. The stakeholders running the show typically come from the travel and customer service industries. Because of this, it’s easy for them to market to their ideal customers. It also gives their sales teams quite a bit of ammunition when it comes to signing people up. While new acquisition strategies sometimes mirror those of the timeshare industry, the product itself is quite different.

Travel clubs provide their members with access to discounted travel packages in exchange for a fee. The payment obligation normally includes a one-time enrollment fee along with a monthly or annual renewal. The extent of travel club discounts vary and are largely based on availability, capability (vendors) and exchange programs. If you travel a lot, rewards or loyalty programs can easily turn a nominal investment into a worthwhile return. But members aren’t the only groups of people that benefit from the travel clubs.

Unlike fractional ownership, travel clubs have two types of customers: users and vendors. Travel agents, resorts, hotels and even airlines use the platform to market an array of travel products and deals to a pool of travel-eager customers. Although retail prices will always be more attractive to vendors, travel clubs allow them to position discounts to frequent, in-market travelers. This gives them a higher probability of selling last minute deals.

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The more users a travel club has, the more appealing it is to potential vendors. In order to attract members, travels clubs typically target a specific demographic. A majority of travel clubs have some sort of theme and members usually have certain preferences that their club caters to. Although the coordination of professional travel (speakers, CEO’s, teachers, doctors, athletes, etc..) is one of the main reasons travel clubs exist, there are other partialities that certain travelers value. Golfers, disabled travelers, veterans, skiers, singles, families and even women’s groups can join travel clubs tailored to their interests.

The main benefit of a travel club is that memberships aren’t forever binding (perpetual). If at any point you’re dissatisfied with the service, you’re not obligated to renew. You’ll never own a timeshare deed like fractional ownership does. If you’re told otherwise, then you’re probably invested into a timeshare point certificates program. These are basically travel club memberships with perpetual contracts.

Similar to fractional ownership, you have to be careful who you’re giving your money to. The travel industry is riddled with scams, especially when internet and phone transactions are involved. If you’re considering a travel club, make sure it’s right for you. There are plenty of options for you to choose from. If you’re able to find something cheap and memberships grow over time, you could be in for some amazing offers.

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Right to Use Contracts – Timesharing Without Perpetuity.

If there’s one thing you should remember about true (deeded) timeshare ownership, it’s that your obligation lasts forever. It’s important that you truly understand what perpetual means. No matter how much you pay towards the property, the ceasing of payments is not on the horizon. Those that shy away from perpetuity commonly view “right to use” (RTU) timeshares as a more favorable option. But for the most part, they’re pretty much the same. Just because buyers aren’t locked into a lifetime of payments doesn’t necessarily make the experience that much better.

When a consumer chooses “right to use” over fractional ownership, they’re basically saying they need a way to get out of the contract if something were to go wrong. It’s essentially the timeshare industry’s solution to combating skepticism. This travel option essentially gives travelers the “right to use” a timeshare during an agreed-to period of time. The length of the contract can be anywhere from 15-99 years and normally involves a local property management company or resort development firm. The main difference between a deeded purchase and an RTU is the lessor never actually owns the property. The property manager or developer retains deeded ownership. Instead of paying on a mortgage, buyers lease the timeshare with the same responsibilities fractional owners have. Taxes, maintenance fees and assessments are still their obligation.

But not every detail is the same. There do happen to be a few perks. Accelerated programs allow RTU timeshares to be a little more flexible. Because these agreements assign a specific number of usage units, lessors don’t have to be limited to annual or bi-annual trips. They can book three vacations per year, every three years if they want to. Also, during their “right to use” period, buyers can transfer, rent or dump the remaining years of their lease. Some users also have an option to make exchanges.

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RTU agreements typically give buyers access to exclusive resorts in destinations that frown on deeded ownership. In other words, not many global hospitality chains invest their time and money into temporary agreements that users can terminate. This can be a blessing and a curse at the same time. While RTU contracts may help you avoid the harassing sales tactics of major travel corporations, you still might be left wanting more. Even if you really want to experience timeshare travel without the perpetual commitment, don’t force the decision until you’re confident in it. Like any other travel option, scams are lurking with persuasive sales pitches. Twenty years may not be a lifetime, but it can still do some financial damage.

Get Out of Timeshares and Travel How You Want To.

Although right to use timeshares can be appealing, limited travel options aren’t for everyone. While travel clubs have their perks, some people can find amazing deals on their own. Either way, don’t let some salesman sway your choice. If you’re considering one of these travel options but realize you’re a part of an aggressive sales pitch, it’s always best that you walk away. Like we mentioned before, the travel industry is full of bad decisions waiting to be made. Plenty of things will catch your eye or seem “good enough.” You know that you don’t want to throw away your hard-earned money. Take the time to make an informed decision and ensure your vacations are worthwhile.

In the meantime, if you or someone you know has an unwanted timeshare contract, we’d love to point them in the right direction. Far too many people spend far too much money trying to sell or get out of a timeshare agreement. Over time, it can be difficult to trust any relief program, let alone a 3rd party cancellation service. At the same time, we’re committed to helping you find a free and clear way to escape your contract. We even created a checklist to help you avoid the deceit of the industry. At the end of the day, you can always expect to speak with someone that genuinely cares at VOC.

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Written by the top Real Estate Litigators in the Timeshare Industry.