Timeshare is not what it used to be, is a phrase we have heard often, from a system that in the beginning proved to be quite popular, to one that has created many disgruntled owners/members. We now look at the future of timeshare, especially considering how it has developed into the discredited system we have today.
The history of timeshare is a rather vague one. with many legends as to where and who developed the first timeshare resort. But that is another story.
When timeshare was first developed on a large scale in Europe starting in the 1980s, it was promoted as being very exclusive, you were buying a “share” in an apartment on a stunning resort. This share consisted of assigned weeks and an apartment. You could purchase just one week or several, these were specific weeks with week and apartment numbers assigned. They were guaranteed.
Your “Dream” Resort
These weeks were divided into Seasons, High, Medium and Low, some companies used colours such as Red Week for the high season. Obviously, the most popular times would be the high season, these tend to follow the major holidays such as Easter, Summer, Christmas and The New Year. These were also major school holidays, so they were very much in demand by families.
At the time the cost was considered high, with price dependent on season and apartment size. but it was marketed as a cheap alternative to owning your own apartment outright. Among those who could afford it, the idea was proving to be popular. Most “couples” started with a studio, upgrading as the family grew.
The medium and low weeks tended to be favoured by the more elderly, either the retired or those whose families had now grown with their own kids. Ideal, child-free resorts, time to relax and wind down, couldn’t be more perfect.
The cost of the annual maintenance fees depended on the number of weeks and the seasons owned along with the type of apartment. But it must be said, most people agreed that they were fair and relatively low, but that was all to change.
For many years these “owners” enjoyed year after year at their home resorts, sometimes using the exchange systems for a visit elsewhere. Great friendships were created, there was a sense of community, you met the same people year after year, and you also got to know the staff very well. It should be mentioned that the staff you all have come to know so well, have nothing to do with your membership. They are purely employed to look after your needs and run the resort on a day-to-day basis.
All appeared hunky-dory until the sales of weeks slowed down or ground to a halt, the main reason, they had run out of inventory they could sell, after all, they could only sell 51 weeks of each apartment. The sales of timeshare were too lucrative, there was a lot of money to be made, and more sales would also increase the amount of revenue from the annual maintenance fees, (more members).
Enter one of the first and most profound changes to timeshare that has created many of the problems we see today.
Somewhere along the line, some bright spark came up with “points”, instead of selling a fixed week in a fixed apartment, transfer all owners to the points system, (at a cost I might add), making them “members” of a vacation club and not “owners”.
At first, this system was marketed very positively, removing the problem of being “tied” to a specific week or resort and the problem of exchanging if you were unable to travel on your specific weeks.
Sounds great, flexibility and an increase in the number of resorts and types of apartments available. The more points you owned, the more choice you have, well, so they said.
More members than weeks, simple.
The one downside which was not envisaged at the time by those owners transferring to the points system was the problem of “availability”. The more members that join the club, the more of a problem getting what you want. It’s a simple problem, more members than weeks available, and you still must pay the maintenance fees!
There were more schemes all similar in nature, floating weeks and then fractional, the latter being a points-based product under the illusion that you “part-owned” an apartment. But you had no rights of use to the “purchased” apartment.
This was one of the main “investment” pitches of timeshare sales, the illusion of “investing in property”. Resort Properties, later known as Silverpoint took this to a whole new level.
All of these schemes and their associated contracts have been deemed illegal by Spanish law and ratified by rulings from the Supreme Court. They are also in breach of EU Timeshare Directives.
With the problems of availability, there was also another problem faced by many owners/members, it no longer worked for them, but there was no way of getting out of the “perpetuity” contracts.
There comes a point when it is no longer viable to have the timeshare and the associated annual costs, but as we have seen handing back your membership was not as simple as you were told when you purchased. The most common was “we will buy it back for what you paid” as if that would really happen!
All this has come to a head over the past 10 years or so, especially in Spain where most European timeshares were sold, the enactment of the timeshare laws in 1999, which the developers ignored, gave consumers a way out and many have used it to great effect.
But this isn’t the only nail in the coffin of timeshare as we know it.
With all the bad publicity, along with the changing ways in which we now book our vacations, timeshare sales began to slump drastically. The number of sales reps was reduced, in some cases the “cold lines” (“punters or UPs” brought in from the street by OPCs which was traditionally the largest source of new members) were closed, leaving only “in-house” reps. The OPCs were struggling to get new people to the presentations, those that did go, tended to be what the reps called “gift hunters” or just plain “time wasters”, (well, for the rep, no sale, no pay!”). Some OPCs even paid the “Ups” to attend.
Even before the restrictions caused by Covid, we watched as sales decks were closed and the reps laid off, one of the largest was Diamond Resorts Europe, making all but a handful of sales reps redundant. Club la Costa also ended their sales, making redundant many workers and closing the sales companies, now in liquidation. Silverpoint has folded, albeit for more serious problems than just the sale of illegal contracts, and then the news of two Anfi sales companies being placed under “Administration”.
So where is timeshare going in Europe?
That is a question only the developers can answer, we can only hazard a guess.
Timeshare, as we know it today is gone or on the way out, the schemes we have are no longer viable, and in Spain are mostly illegal. We may see a return to the old system of fixed weeks, fixed apartments, restricted by numbers and not the free-for-all that has developed. Timeshare may just become once again the mark of vacation luxury, attracting a smaller clientele who want a certain standard of vacation, rather than the mass market of package holidays.
There are some small independent resorts that have remained true to the original idea, with a very good and loyal client base. In many cases the children of the original owners who now have their own families have taken over the “ownership”, keeping it in the family so to speak.
The idea of timeshare is a good one, the biggest problem with it has been the greed of the main large developers, turning it from an exclusive more luxurious way to holiday into a massive money-making conveyor belt.
It is going to be very interesting over the next few years to see where timeshare in Europe and especially Spain ends up. The US is a different kettle of fish, timeshare is still the “free for all” when it comes to sales and consumer protection. We doubt timeshare will end completely but a massive revamp is required, to give it once again, credibility. What do you the readers think, answers on a postcard, please?