History And Concept Of Timeshare
The multiple ownership of individual weeks brought with it the guarantee of reservations for those who wanted to ski in the area. It was an immediate success. By the 1970’s some faltering condominium projects in St. Thomas, Fort Lauderdale and Puerto Rico were converted over to vacation ownership and thereafter timesharing became a viable vacation alternative.
Once the concept of vacation ownership was embraced by the United States it began to gain wide acceptance by the public. Sales jumped to over 50 million by the mid 1970’s and has climbed to more than 2 billion annually today. Vacation ownership has enjoyed substantial growth over the years with approximately 3.3 million timeshares sold since 1980. Currently there are over 5,000 vacation ownership resorts in over 75 countries around the world.
Exchanging a vacation ownership week in one resort for that of another resort was introduced in 1974 and thereafter timesharing offered variety and flexibility in the vacation experience. Although there are many exchange companies available which provide excellent service, the two major forces are Resort Condominiums International (RCI) which has approximately 3,250 member resorts and Interval International (II) with approximately 1,600 member resorts. Combined, these two companies provided over 1,600,000 exchanges last year.
During a 30 year span, the industry has grown from small (15-20 unit ) hotel conversions to the high quality condominium resorts of today. The evolution of the industry from scattered entrepreneurs to well managed professional development companies has brought with it a noticeable change for the better. Definitive leaders have emerged and created standards and ethics for management, marketing and sales practices. One such organization is the American Resort Development Association (ARDA) who’s members are required to comply with the established “Code of Ethics.” The recent entrance into the marketplace by major hospitality chains such as Disney, Hilton, Ramada, and Marriott has greatly enhanced the quality and image of the industry. Vacation ownership resorts of today are luxurious, spacious and well located.
By the advent of these stronger and more professional development and management companies along with the weeding out the less desirable developers and marketers, the industry is experiencing a noticeable swing from a historically negative to a very positive public image. One of the industry’s leading analysts (Ragatz and Associates) concluded that the majority of timeshare owners are very satisfied with their purchase and in fact, many own multiple weeks. The future of vacation ownership is very optimistic and has tremendous potential.
What Is Vacation Ownership ?
Vacation Ownership “Timesharing” is the right to use specific weeks of a resort during a specific time period. Simply put, it is the pre-purchase of a vacation. It is important to understand that vacation ownership is a commodity which is purchased to be enjoyed and used over the years. One should never purchase a timeshare with the intent of reselling it for a profit. Vacations are holidays for which we spend money to relax and rejuvenate; they are not investments.
Ownership of a timeshare is very similar to ownership of a condominium except that your rights are limited to a certain week during the year. The form of ownership can be Deeded, Leased or a License.
The License is somewhat different in that it is most commonly a membership in a club. Providing you are a member in good standing, you have the right to use the club and all it’s amenities. Be sure to read and understand all the terms and conditions of your club membership before you make the decision to buy. Most vacation ownership consists of either a deeded interest or a leased interest for a specific number of years.
A Deeded interest is owned outright forever. It an absolute right which can be sold, leased, or even willed to your heirs. Most timeshares which exist today are deeded ownership.
The Leased interest is much like an apartment lease except right to use it is restricted to a specific week during the year. Upon the expiration of the lease term your right to use will generally terminate and return to the resort. With a leased interest you should know the terms and conditions of the lease prior to making the decision to buy.
The time of your use can be either Fixed or Floating. Fixed time is a specific week during the year usually defined by a number. Generally the week will begin on a Friday, Saturday or Sunday and is given a number starting with the first week in January an run through the end of December. (Example – week 14 might be April 7 through April 13.)
Floating time means you have the right to select any available week within a certain season of the year. Therefore, if you own a summer season week you could pick any week which falls within the
defined summer months. However, competition between existing owners for prime weeks in very desirable location can impact availability. It is important to find which type of use best fits your specific travel needs.
Each resort is different and you should ask if there are other benefits which are available to its owners. Many resorts offer special reduced rental rates for extra nights or us of other resorts which are owned by the developer. This can add to you flexibility and provide substantial saving on vacation costs. Additionally, consider carefully how and where you normally vacation. This is very important in making your decision about where you should buy and what you will be trading.
Important Facts About Vacation Ownership
– Timeshare is one of the fastest growing areas of the travel and tourism industry.
– Timeshare owners live in more than 200 countries around the world.
– Major brands now involved in timeshare internationally include Hilton, Hyatt, Four Seasons, Sheraton, Ramada and De Vere.
– On a worldwide basis, more than 12 million people took a timeshare vacation in 1999
– There are around 5,500 timeshare resorts throughout the world in more than 90 countries.
– The industry is worth in excess of $6 billion annually. The top 10 timeshare companies alone reported combined sales in excess of $2.64 billion in 1999.
– During 1999 each of the top 10 performing timeshare companies worldwide recorded sales in excess of $100 million.
– RCI, the world’s leading timeshare exchange organization, arranged vacations for seven million people worldwide in 2000, making it one of the world’s largest travel companies.
Timeshare Today And In The Future
The modern timeshare industry continues to expand at a rapid rate, with new markets opening up in Asia and Eastern Europe and consolidation prevalent in the established markets of Western Europe and North America.
Firmly established as a key sector of the mainstream vacation market, the multi-billion dollar timeshare industry now embraces modest entrepreneurs and mighty corporations. Its global reach with close to 6,000 resorts in more than 90 countries extends from Spain to China, Mexico to South Africa.
Some of the world’s biggest names in the hospitality and leisure sector now have timeshare interests – Hilton, Sheraton, Disney, Ramada, Four Seasons, Hyatt, Westin, Ritz-Carlton and Radisson. At the same time, the list of well-known European companies with timeshare interests continues to grow – RIU Hotels (50% owned by TUI – Touristik Union International, Europe’s largest tour operator), Sol Melia, De Vere, Macdonald Hotels in partnership with Barratts (the UK’s Number One house builder), Mondi Ferienclub in Germany.
Quality developments around the world are enjoyed by millions of owners, their families and friends, making the phenomenon of timeshare a success story without equal. In 1999 over 12 million people took a timeshare vacation.
Timeshare owners come from over 190 countries but more of them live in the United States than anywhere else in the world – 47%! In fact the US has the lion’s share of timeshare resorts – over 1,500. And that accounts for more than 37% of the total worldwide. In the western world, timeshare is now a highly organized and regulated industry. Trade bodies such as the American Resort Development Association (ARDA) and the Organisation for Timeshare in Europe (OTE) work to apply codes of conduct and ensure that expansion is based on sound commercial practice and ethical standards.
There is also considerable regional, national and international legislation in place which aims to help protect the rights of potential purchasers and discourage the use of high-pressure sales tactics.
Timeshare in the future The worldwide timeshare industry looks set to grow in popularity and log record sales in the months and years ahead. Social trends mean more people have more time and money to devote to travel and the concept of vacation ownership. In many parts of the world, regulation has given timeshare a firm footing, helping to reassure and protect purchasers with a series of consumer protection measures.
Since its inception, timeshare has undergone a metamorphosis, according to Timeshare: Coming of Age, an independent report published in October, 1999. With the advent of the points-based system, the original real estate concept has been transformed into “a flexible, pre-paid vacation membership concept, placing timeshare where it belongs – in the mainstream of travel, tourism, hospitality and leisure”.
In 10 years time who knows where the next development will be?