In 1988, Marcia Elam-Moore responded to an offer by a marketing agency for a week’s vacation at Disney World and Vero Beach, Florida. After she investigated the offer and found it to be legitimate, she purchased a time-share. “My family and I have traveled the entire eastern seaboard and [to the] Caribbean, Arizona, [and] California,” says the 52-year-old paralegal from Teaneck, New Jersey. “For me and my family, the [advantage] of owning a time-share is being able to travel and stay in five-star resorts. We could not afford the luxury that the time-share resorts offer otherwise.”
The time-share concept, which originated in the French Alps in the late 1960s, became a popular U.S. vacation option in the 1980s. A time-share, also called vacation ownership, offers its owners lodging in furnished condominiums or resort units, usually three star or better, for a specific amount of time each year (usually a week). In the United States, time-shares sell for an average of $14,500, which can be paid off with mortgage-like monthly payments. The yearly maintenance fee covers property costs, insurance, refurbishing, and taxes for approximately $370 per week of annual use. Many consumers find this a more attractive option than paying varying hotel fees each time they travel.
But not all offers are legitimate. Collette Williams, an accounting manager from Brooklyn, New York, who visited
a time-share last summer after responding to an offer for a “free weekend” in Atlantic City, was disappointed to learn her lodging was not a time-share by the beach, but a motel that was 15 minutes away. She also felt pressured to make a commitment on the spot.“You were only given that day to make a decision [and] couldn’t change your mind,” she says. However, a small paragraph in the contract stated that the prospective buyer had three business days to cancel and would receive 100% of the down payment. “This was a sign to me of how dishonest these people [were], so I cancelled,” she says.
Yet statistics show that many people, after being subjected to aggressive sales pitches, do purchase time-shares. Despite recent economic woes, time-share resorts have sprung up across the United States at a growth rate of more than 5% per year since 1997. They grew in double digits during the 1990s and by 7% in 2001. According to a recent survey by the American Resort Development Association (ARDA), as many as 85% of U.S. time-share owners indicate satisfaction with their purchase.
“Vacation ownership products (including time-shares) are a great
vehicle to get more experiences for your dollar,” says Howard Nusbaum, president and CEO of ARDA, a Washington, D.C.-based trade association representing the time-share industry. “Some time-share resorts offer clubs and point programs that allow you to stay in different resorts and different-sized units each year. [They] allow you to trade your time-share interest for a cruise or airplane tickets—even hotel stays,” says Nusbaum.Purchasing a time-share should not be a hasty decision. ARDA offers some tips for consumers interested in making a purchase.
Do your homework. Before you go on a time-share tour, research the product and company so you can ask important questions like: Is this a lifetime ownership? Can I pass it down to my children? What are the terms of the sale? What if I want out of my contract? Is there the possibility of vacation exchange?
Know your options. There’s deeded interest, or time-share ownership, which can be rented, sold, or willed. It is not, however, a property investment but an investment in future vacations. Some time-shares restrict the renter to a specific time frame and a specific vacation time. It is best to buy a time-share that you know you will use, as many of them have very lengthy commitment terms (for example, 50 years to life).
Check out the product. Take advantage of the many discounted mini-vacation packages and touring gifts that time-share resorts offer. Also, talk to owners when touring the premises.
Before you buy. Read all documents carefully. And check out the American Resort Development Association’s Website (www.arda.org), which offers tips for buying a time-share, and the Association’s Resort Owners Coalition site (www.arda-roc.org), where owners discuss their experiences.