Why do people buy timeshares?

[Philliefan33]

DH and I just returned from Myrtle Beach, where we spent three nights in a nice Hilton Grand Vacation resort for $150 + two hours of our time listening to a timeshare sales pitch.

We've never been through one of these, but we were interested enough in the pitch to sacrifice our time in return for the cheap beach getaway. The reason we were interested was not for ourselves, but because my parents have recently been hoodwinked into a timeshare (oops, did I write that? ). I meant to write "my parents recently bought a timeshare".

We went through the presentation and tour with our personal tour guide. It was almost comical how he tried to build rapport and give us the reasons he thought would sway us. I really just wanted to see the numbers but it was hard to get him to lay it all out until the end. After two hours and fifteen minutes I declared that I wasn't interested and was ready to leave and get on with our day at the beach. To his credit, and the manager that had to sign off on our form, there wasn't a high-pressure sell once we said that we weren't interested at any price.

What I recall from the numbers they were showing us: $25,000 bought us 3400 points / year, which was good for about one week in a suite during shoulder season. There is also a HOA of about $850/year.
So over the next ten years we would spend at least $35 K (the HOA is subject to increase) for a week of lodging per year. Of course the numbers get a little lower if you use a twenty year time frame.

Either way, the math doesn't make sense to me and I doubt it makes sense to many of the LBYM crowd that hangs out here.

So why do people buy timeshares? Is it to be part of the "club"? (HGV salesmen always referred to their product as club membership, not a timeshare). Is it to have access to nicer resorts? To force a reluctant spouse to take time for a yearly vacation?

I don't want to bash anyone who owns a timeshare-- it's your money and you can spend however you wish. But if you own a timeshare, what were the factors that swayed you to buy?

 

[Blue Collar Guy]

My niece got one for a buck ($ 1) in Tennessee. The maintenance is
$700ish a year. I told her she got a great deal, about 2 years ago she wanted to know If I wanted the timeshare, she wanted to unload the maintenance fee.

 

[hesperus]

I don't go for partial ownership of anything, but my hunch is that it offers people, who can't otherwise afford a second home, a chance to have one for a week or two.

 

[CaliKid]

Way cheaper, and way more flexible, to rent on redweek.com or other sites.

 

[audreyh1]

DH and I just returned from Myrtle Beach, where we spent three nights in a nice Hilton Grand Vacation resort for $150 + two hours of our time listening to a timeshare sales pitch.

We've never been through one of these, but we were interested enough in the pitch to sacrifice our time in return for the cheap beach getaway. The reason we were interested was not for ourselves, but because my parents have recently been hoodwinked into a timeshare (oops, did I write that? ). I meant to write "my parents recently bought a timeshare".

We went through the presentation and tour with our personal tour guide. It was almost comical how he tried to build rapport and give us the reasons he thought would sway us. I really just wanted to see the numbers but it was hard to get him to lay it all out until the end. After two hours and fifteen minutes I declared that I wasn't interested and was ready to leave and get on with our day at the beach. To his credit, and the manager that had to sign off on our form, there wasn't a high-pressure sell once we said that we weren't interested at any price.

What I recall from the numbers they were showing us: $25,000 bought us 3400 points / year, which was good for about one week in a suite during shoulder season. There is also a HOA of about $850/year.
So over the next ten years we would spend at least $35 K (the HOA is subject to increase) for a week of lodging per year. Of course the numbers get a little lower if you use a twenty year time frame.

Either way, the math doesn't make sense to me and I doubt it makes sense to many of the LBYM crowd that hangs out here.

So why do people buy timeshares? Is it to be part of the "club"? (HGV salesmen always referred to their product as club membership, not a timeshare). Is it to have access to nicer resorts? To force a reluctant spouse to take time for a yearly vacation?

I don't want to bash anyone who owns a timeshare-- it's your money and you can spend however you wish. But if you own a timeshare, what were the factors that swayed you to buy?

I was admiring a gorgeous resort under construction in Maui* and curious enough to sit through a presentation just to get a tour of the suites - which were indeed stunning. My first ever exposure to to timeshare sales and pricing.

It seemed to be more appropriate to families with working parents who tended to take one or two major vacations each year at fancy locations, and likely to return to the same place or or occasionally trade resorts.

Personally, way too rigid for us as retirees, and you and your heirs are stuck with those annual maintenance charges! Couldn't get past that. Nor the scheduling.

I suspect we can always buy temp access if we ever really want it. Plenty of resorts in Hawaii are timeshares but rent out the suites. Sometimes the report does it, sometimes the owners through another venue.

Maybe it seems so affordable up front for "ownership", and the locations are lovely (lots of glamour), but once you face the handcuffs of those fees it sours quickly. They add up!

*It was the The Westin Ka'anapali Ocean Resort Villas - or perhaps the newer Nanea Ocean Resort Villas. We were touring their latest construction.

 

[wolf]

"WHY DO PEOPLE BUY TIMESHARES"

1. Great Marketing people. They create a program/plan to draw people in.

2. Must work. Because even after all these years, These "free" dinners
continue to be offered.

 

[FIREd]

We have friends with timeshares in Tahoe and Hawaii. It is clearly a source of pride for them - not as an investment, but more as a consumption item like a nice car or a luxury watch.

 

[RockyMtn]

Never quite figured out the whole time share thing. Looked at a couple but could never make the numbers work out and the maintenance fee thing is scary.

Did find this site though where you can take advantage of other folks trying to unload their unused "time". Can't charge you more than $100 per night or $700 per week although many are much less.

Timeshare Rentals Offered | Timeshare Users Group Online Discussion Forums

 

[Bamaman]

A lot of people don't realize that many hotels and resorts have rooms that are owned by individuals or are time share owned. The hotel may just be managing and marketing the property in total. Many Marriott properties are like that.

 

[Nemo2]

Not only are you 'sucked in' when you buy one, you're pretty much 'locked in' also, since you're (well, not me) kinda obligated to go there now that you 'own' it.....thus, you miss out on a myriad of other places you can visit.

 

[omni550]

No idea...makes them feel rich and special, perhaps?

---

On a separate but related note...the furnishings must get worn out after 52 weeks/year of heavy usage (even possibly abusive? as people are sometimes a bit more careless with things that aren't theirs). Does anyone know how often the interiors and furnishings are redone? How is that handled, how often and how is it paid for? Any idea?

omni

 

[audreyh1]

Good question.

It was a lovely place on Maui. But that time share comes with several commitments. One is using it - which mains flying to Maui annually. Not trivial. Another is schedule - the same week in the calendar each year - little flexibility. Another is those darn maintenance fees.

So then you play all the games to explore alternatives - exchange with another timeshare resort, etc. Figure out how to get credit for unused time. Blah, blah, blah. And that "deed" means your heirs have to keep paying for maintenance after you pass.

 

[brucethebroker]

Sat through a presentation in Daytona Beach 17 years ago. Salesman showed us a price of a beachfront unit 2BR/2Ba for $12,500 plus $500 yearly fee. "I said no, we have two kids in college and can't do it." When we got up to leave, the manager came over and immediately cut the price to $8,500. We still walked out, but I thought about what a sleazy operation it was.

 

[Jerry1]

I've wondered myself, but I know two people who are happy with theirs. One has some time in Mexico (not sure where) and she says she loves it. She likes the aspect of ensuring that every year she has a place to go and she enjoys it. The other seems to play the points game to go to other places on the cheap. I've talked to them a bit about this and they are both intelligent people who know exactly what they're getting. In my discussions with them, I've been interested, but never enough to take the plunge on a free vacation for the cost of listening to a sales pitch. Oh well, to each their own.

 

[omni550]

What I recall from the numbers they were showing us: $25,000 bought us 3400 points / year, which was good for about one week in a suite during shoulder season. There is also a HOA of about $850/year.
So over the next ten years we would spend at least $35 K (the HOA is subject to increase) for a week of lodging per year. Of course the numbers get a little lower if you use a twenty year time frame.

I may have part of my answer here.

$25,000 purchase price x 52 member-owners per unit = $1.3 million PER UNIT!

$850/yr HOA X 52 weeks/yr =$10,200/yr PER UNIT!

Assuming that these are large complexes containing many units....you're talking about some big bux in purchase fees and HOA fees. Plenty of money to purchase the property, market the timeshares, pay the sales staff, and refurbish the units before they become rundown and shabby.

omni

 

[Philliefan33]

No idea...makes them feel rich and special, perhaps?

---

On a separate but related note...the furnishings must get worn out after 52 weeks/year of heavy usage (even possibly abusive? as people are sometimes a bit more careless with things that aren't theirs). Does anyone know how often the interiors and furnishings are redone? How is that handled, how often and how is it paid for? Any idea?

omni

At the Hilton resort we just toured, they "redo" each unit every three years. I guess that's covered by the HOA.

 

[RobbieB]

I dunno. Take the $850/yr HMO fee. Amazing.

I can rent a top end deluxe room in a first class hotel in Monterey Bay, CA (cannery row) right on the water (spit in the water) waves slosh on the rocks to lull you to sleep with a balcony where you just sit and watch sea otters frolic along with tons of other marine activity and included room service breakfast for $350/night.

And three nights is all I can stand before I want to move on.

 

[Philliefan33]

Good question.

It was a lovely place on Maui. But that time share comes with several commitments. One is using it - which mains flying to Maui annually. Not trivial. Another is schedule - the same week in the calendar each year - little flexibility. Another is those darn maintenance fees.

So then you play all the games to explore alternatives - exchange with another timeshare resort, etc. Figure out how to get credit for unused time. Blah, blah, blah. And that "deed" means your heirs have to keep paying for maintenance after you pass.

Since my parents recently bought a timeshare in Ft. Lauderdale, I was a little concerned about any responsibilities if we inherit. I looked it up on Google, and from what I can gather we can decline to inherit. As long as we don't use it, even once, we can fill out some form and not be responsible for any fees.

 

[athena53]

My niece got one for a buck ($ 1) in Tennessee. The maintenance is
$700ish a year. I told her she got a great deal, about 2 years ago she wanted to know If I wanted the timeshare, she wanted to unload the maintenance fee.

I have a friend from college who bought 2 timeshares in Myrtle Beach as foreclosures. They live in DC, so not a bad drive, and he seemed happy with them. At least, like your niece, they paid distress-sale prices instead of a big front-end sales load.

I'm not a fan of Disney but I think it's sensible that their timeshares, from what I've read, have expiration dates.

They're definitely not for me, especially with Airbnb being an option now. No front-end or ongoing costs, more flexibility.

 

[Texas Proud]

I've wondered myself, but I know two people who are happy with theirs. One has some time in Mexico (not sure where) and she says she loves it. She likes the aspect of ensuring that every year she has a place to go and she enjoys it. The other seems to play the points game to go to other places on the cheap. I've talked to them a bit about this and they are both intelligent people who know exactly what they're getting. In my discussions with them, I've been interested, but never enough to take the plunge on a free vacation for the cost of listening to a sales pitch. Oh well, to each their own.

I knew someone when I was working in NY who had a few and also loved his... but he did say that most are not worth it..

He had one that was a major holiday week somewhere 'upstate' and it was hard to get a room... said the timeshare had saved him many thousands of dollars as they 'always' went, even before the timeshare...

The others I think were the points based, or the color based where you could trade them for different locations.... said what he got was 'valuable' for trade and could sometimes get two weeks for his one...

I never did discuss numbers with him, but he was in finance so knew how to figure things out...

 

[Texas Proud]

I may have part of my answer here.

$25,000 purchase price x 52 member-owners per unit = $1.3 million PER UNIT!

$850/yr HOA X 52 weeks/yr =$10,200/yr PER UNIT!

Assuming that these are large complexes containing many units....you're talking about some big bux in purchase fees and HOA fees. Plenty of money to purchase the property, market the timeshares, pay the sales staff, and refurbish the units before they become rundown and shabby.

omni

But some of these are in high rise buildings and a unit might cost $750K anyhow... and $10K per unit is probably not bad as long as that covers the utilities, insurance and taxes...

 

[Philliefan33]

I may have part of my answer here.

$25,000 purchase price x 52 member-owners per unit = $1.3 million PER UNIT!

$850/yr HOA X 52 weeks/yr =$10,200/yr PER UNIT!

Assuming that these are large complexes containing many units....you're talking about some big bux in purchase fees and HOA fees. Plenty of money to purchase the property, market the timeshares, pay the sales staff, and refurbish the units before they become rundown and shabby.

omni

It gets even better-- the numbers I quoted were the entry point for an efficiency suite. Purchase price and HOA fees went up for a one, two, or three bedroom unit.

Roughly 25 floors with ~10'units per floor...it will add up quickly!

Another set of numbers I remember from the beginning: (this was supposedly to assure us that Hilton gets most of its money from the hotel room "renters" vs vacation club "owners". The salesman drew a pie chart and wrote in that 85% of Hilton's annual profit comes from the 60 million renters (i.e. hotel rooms). Only 15% of the annual profit comes from the 300,000 owners. See? Only 15% of the profit comes from their owners. They really don't make much money off the vacation club owners

I did some quick mental math and tucked those numbers away to use as ammo to get out of there if they turned up the pressure. Hilton has 200 times more renters than owners, yet makes less than six times the amount of profit from the renters. Tell me again which population is the cash cow?

 

[lwp2017]

I bought into a timeshare at Disneyworld.

My wife loves going to Walt Disney World so we go twice a year. Been doing it for many years. Always stay at a premium hotel adjacent to the theme park. Spring for the flower & garden show, Fall for the Food & Wine festival.

I did the math ( NPV) of renting rooms, versus assumed capital return of 4%. Ten nights a year, a time share was much cheaper than Disney hotel rates, even with annual maintenance fee. We were using a very savvy travel agent who often got us very good deals & free upgrades.

Did my research, I bought aftermarket, about half the cost of new one from Disney Vacation Club.
Also the value of a timeshare at a premium level hotel at WDW has not been decreasing like a typical timeshare. Also very easy to sell if you get one adjacent to the theme parks. Disney has first right to repurchase if you value the timeshare too low, they have been buying back 15 to 20%.

Primary hotel we bought into is the one closest to Epcot so very convenient to the festivals she likes going to. It has been sold out for years so aftermarket was the only option to buy into it.

Wife was very happy, so I am too. She has been a great partner for 32 years so I like spoiling her, WDW is her only indulgence.

We'll be at the Food & Wine festival next month.

 

[Sunset]

I'll point out the calculation was off: $850/yr HOA X 52 weeks/yr =$44,200/yr PER UNIT!

I bought one on E-bay for $1,100 we used it for years, it was really nice, an actual 3 bedroom, 2 bath house. Really too big for us.

The cost of the replacing furnishings is covered within the yearly maintenance fee (if the place is well run).

I had a lot of trouble trying to sell it off, finally paid the timeshare company $250 to take it back.

I now tell folks, buying a timeshare really means you are buying the obligation to pay a yearly maintenance fee.

 

[kcowan]

But some of these are in high rise buildings and a unit might cost $750K anyhow... and $10K per unit is probably not bad as long as that covers the utilities, insurance and taxes...

We went to our last pitch in the 80s and figured the TS price was 3x what a comparable property would sell for. Big leverage for high pressure sales tactics.

Our first experience was a lot in Coral Gables FL in the 60s. It was swampland at the time. We were there on our honeymoon.