John and JoAnn Belczak vacation in Hawaii every year.
That’s in addition to trips the Yorba Linda couple have taken to Tahoe, Boston and the Carolinas. They’ve strolled the scenic beaches of Aruba and St. Kitts and been on a cruise to Alaska. Every three years, they spend a week in a 2,000-square-foot penthouse in Nuevo Vallarta on Mexico’s west coast.
Timeshares make all that travel possible for the peripatetic Belczaks and their three now-grown children. After buying their first timeshare in Kauai 10 years ago, they upped their points a few years later, then bought a second timeshare in Mexico.
“Never regretted it,” said JoAnn Belczak, 59. “It’s not cheap. We know that. But so long as you know how to work the system and you use it, it’s great.”
William Dorman has a different take on the Las Vegas timeshare he got talked into buying at a sales presentation 15 years ago. Yes, he has exchanged his parcel for trips to places like Palm Springs and Arizona, but nothing exotic. Those were always booked. He had to pay out of pocket for accommodations in New York because the timeshare there also was booked.
Now he wants to get rid of it.
“Nothing’s available, and you have to book two years ahead of time,” said Dorman, 56, of Dana Point. “People are giving them away … or they’re listed for $5 or $100 because people want to get out of them.”
Some people are happy with their timeshares, saying they give them a chance to see the world in homey, spacious accommodations that cost less than an equivalent hotel. Others deeply regret them, saying maintenance fees keep rising, they can never book the times they want and they’re stuck paying for something they can’t use.
Regardless of whether timeshares are good or bad, the industry is booming.
Sales revenue by timeshare developers and operators rose 32 percent – to $8.6 billion a year – in the five years ending in 2015, according to the most recent estimate by the American Resort Development Association, or ARDA. Association figures show there were 411,880 transactions in 2015, with prices averaging $22,240, up 21 percent in five years.
But secondary market sales by private owners have been flat and represent a tiny fraction of the timeshare market, said Bob Schmidt, data officer for Sharket.com, a timeshare resale data firm. The resale market averages 25,000 to 26,000 transactions per year, with an average price of $5,000, a fourth the value of a typical retail unit.
“There certainly are a lot of people who are interested in selling their timeshares,” Schmidt said.
The timeshare concept, which dates to the 1960s, allows multiple owners to share one property or to gain access to resorts around the world by cashing in points they’ve accumulated or through an exchange system.
People who love their timeshares say they are motivated to take regular vacations, and they get better accommodations for less money, with kitchens and, in most cases, two or more bedrooms.
An ARDA survey found timeshare owners are more likely to take annual vacations.
ARDA President and CEO Howard Nusbaum said that over a 10-year span, the typical timeshare saves a family almost $14,000 compared with renting two hotel rooms for a week each year.
“You save money, plus you get all the comforts of home,” Nusbaum said. “It’s a better way to vacation.”
But it’s not for everyone, he concedes. People who are happy sharing a hotel room with the kids or who don’t mind sleeping on Grandma’s sofa don’t buy timeshares. But for those who want to stay in a nice hotel and take a vacation each year, he said, “it works out.”
Discipline and advance planning are a must in the timeshare world, owners say.
Jeff Weir, owner of three timeshares and chief correspondent for Redweek.com, a leading timeshare resale site, said bookings can get competitive. For example, he has to call a year in advance to reserve a week at the Marriott Newport Coast Villas, where he’s an owner.
“Wait two days later, those weeks are gone,” he said. “There are some practice issues for owning a timeshare that people have to deal with.”
Most of the unhappy owners are people who own a timeshare in a “legacy resort,” or an older, single-site property not affiliated with a large club, ARDA’s Nusbaum said.
“Those are the owners who have more pent-up demand to sell,” he said.
A glut of resales
Almost half of the 614 timeshares selling on eBay the weekend of Jan. 14-15 had starting bids of $1 or less, with 37 of them going for a penny.
“There’s a glut,” says a representative of Vacation Ownership Consultants, a company specializing in timeshare contract cancellation.
Hard-sell tactics are a key reason owners end up buying a timeshare they can’t use over the long run.
Buyers are lured into sales presentations by free dinners, theater tickets or discounts on hotel bills. The presentations last hours, lubricated by free food and drinks. Then, the buyers are presented a stack of papers to sign.
“They are zombies when they sign the contract. We have realtors, we have clerks, we have doctors. They all come to us. We’re getting people out of these contracts that are burdensome and oppressive because at the time they signed them they really weren’t in their right mind.”
Recently a series of lawsuits were filed accusing Las Vegas-based Diamond Resorts International sales people of falsely telling buyers their timeshares appreciate in value and are easily sold and the property could be used by their heirs when they die. A retired Oceanside couple with no income paid $150,000 for timeshare contracts with Diamond, a recent Orange County lawsuit said.
“You’re told it’s an investment. … It’s not, it’s a liability … because of the maintenance fees you have to pay every year if you go on vacation every year or not.”
The lawsuit “is without merit,” a company statement issued last week said.
In December, Diamond agreed to pay Arizona $800,000 and take back timeshares after the state alleged it had received hundreds of complaints of false statements and misrepresentations made during sales presentations, the state Attorney General’s Office said.
A Diamond statement said the firm will launch nationwide reforms this month, dubbed Diamond Clarity, “to enhance the overall customer experience” during sales presentations.
Virginia Pelton of Laguna Hills sold timeshares in the early 1990s and ended up buying four of them in Las Vegas, Palm Springs, Dana Point and Cabo San Lucas.
“I used them several times a year,” said Pelton, 88, a former model. “A lot of people say, ‘If I want to go somewhere, I’ll get a hotel.’ But they don’t travel that much. If you have a timeshare, you use it. I did.”
But then maintenance fees started going up. Her total bill is $6,000 a year, and she’s taking steps to shed her timeshares.
“I was really into it until (the maintenance fees) went out of sight,” she said. “I can’t afford it anymore.”
Anaheim bakery owner Asem Abusir, 55, tried going to court to get rid of the Las Vegas timeshare he bought for $12,000 in 2008. He said he hasn’t been able to get a reservation since he refused to upgrade to a $35,000 plan. His annual maintenance fees are $1,400.
“They said, ‘Eventually you have to upgrade, so think about it,’” Abusir said. “It’s like I have no option.”
Eventually, he was able to shed his obligation by paying a $2,500 fee.
“I didn’t want to pay for something forever that I wasn’t using,” he said. “They said, ‘Even if you die, your kids will have to pay.’”
For more information on how you can safely eliminate an unwanted, unsellable timeshare, please contact us today. Our consultants are standing by to assist you. Call 1-800-614-5288