Start the Week: Timeshare How it Has Changed and What is the Future?

Welcome to the start of this week with Inside Timeshare, last week we had a look at “Finance Agreements” for timeshare purchases, all brokered by the very staff with a vested interest in securing the sale. An interest that can only be described as an “Unfair Relationship detrimental to the consumer”, a very valid point that was clearly shown in the article. (Links at the end). Today we begin to look at how timeshare has changed over the years, from a system that at the start proved to be quite popular, to one that has created many disgruntled owners/members. We also ask what is the future of timeshare considering how it has developed into the discredited system we have today?

The history of timeshare is rather vague with many claims as to where and who developed the first “timeshare resort”. Inside Timeshare first looked at this back in 2016, in A Short History of Timeshare, this was updated at the end of 2020, in A Brief History of Timeshare. The links to both articles are at the end along with the story of Anfi, as it does show very well how timeshare has changed.

When timeshare was first being developed in Europe during the 1980s, it was promoted as being very exclusive, you were buying a “share” in an apartment on a stunning resort. This share was for a number of weeks, from just one week to several, these were specific weeks with week numbers assigned. There was a choice of apartments from studios sleeping 2 to penthouse apartments.

Selling the “Dream” your own holiday home.

These weeks were divided into “seasons” High, Medium and Low, some companies used colours such as “Red Week” for 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 and now 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 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, 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, 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 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 have to pay the maintenance fees!

There were more schemes all of a similar 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 the law and ratified by rulings from the Supreme Court.

With the problems of availability, there was also another problem faced by many owners/members, that is getting out of it.

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 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!”).

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 down the sales companies. Silverpoint has folded, albeit for more serious problems than just the sale of illegal contracts, and now the news of two Anfi companies involved with sales 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 today 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 we have today. 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 mainly, 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, we doubt that it will end completely but a massive revamp is definitely required. This is not just in the running of it, but, more importantly how it is sold. What do you the readers think, answers on a postcard, please!

If you would like further information on the legal rights of timeshare owners who purchased in Spain and if your contract is illegal, please use our contact page and Inside Timeshare will get back to you.

Links to the mentioned articles

https://insidetimeshare.com/short-history-timeshare/

https://insidetimeshare.com/a-brief-history-of-timeshare/

https://insidetimeshare.com/?s=anfi+the+story+behind+the+news

https://insidetimeshare.com/timeshare-loan-agreements/

https://insidetimeshare.com/timeshare-sales-and-finance-agreements/

https://insidetimeshare.com/?s=anfi+the+story+behind+the+news


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