TIMESHARE & VACATION OWNERSHIP

Meaning of Time Share

  • Timeshare hotels involve individuals who purchase the ownership of accommodation for a specific period of time usually one or two weeks a year for specific number of years and has to pay nominal annual fee for the maintenance of the property.

  • Also known as vacation ownership.

 

Meaning of Condominium

  • Also called as condo units are purchased, out right and owned by the guest as second homes.

  • Condominium hotels have single owners instead of multiple owners sharing the hotel. The owner informs the management company when they would like to occupy the unit. The management company is free to rent out the unit for remainder year.

 

Meaning of Referral

  • It consists of independent hotel which have grouped together for some common purpose

  • Properties may be different from each other but there is sufficient consistency in quality of service to satisfy the guest.

Important features of Timeshare

  • Properties normally found in resort areas.

  • Involves people who purchase the accommodation for a specific duration in a year and for set number of years. Eg; 25, 30, 40, 50 years

  • Typically following colour code is used

  1. Purple: peak season

  2. Red: best season, vacation time

  3. White: mid-season (shoulder period)

  4. Blue: off-season

  • The owners occupy the unit or complex during the slotted time

  • Owners who do not wish to occupy the unit in slotted time may rent it out

  • Possibility of trading ownership time is there

  • Vacation options:

  1. Fixed week ownership

  2. Floating ownership

  3. Rotating ownership

  4. Vacation club

  • Sharing maintenance:

Owners have to pay annual maintenance fee

  • Flexibility to Family size

Time share units are usually resorts with more of recreational facilities or with cottage type rooms

 

EXAMPLES OF HOTELS

INTERNATIONAL BRANDS ON TIMESHARE

  • Starwood

  • Accor

  • Hyatt

  • Hilton

  • Disney

  • Marriott’s

  • Ritz Carlton

 

DOMESTIC BRANDS ON TIME SHARE

  • Club Mahindra

  • Sterling Resort

  • Kamat Group

  • Toshali Resorts

 

FACILITIES OFFERED IN TIMESHARE

  • Fully equipped kitchen

  • Living room & dining room

  • Television with DVD

  • Utensils

  • Electronic appliances

  • Studio room unit (rooms for two or more-bedroom unit with bathroom)

 

TYPES OF TIMESHARE

  1. Fixed Week Option

  2. Floating Week Option

  3. Rotating Week Option

  4. Vacation Club

  5. Points Programme

 

1. FIXED WEEK OWNERSHIP

  • The owner may own a deed to use a unit for a single specified week.

  • Owner may choose any calendar week like fourth week of July

  • Owner could use that week every year

  • Concept is outdated in 1980s as customers were not flexible with the concept.

 

2. ROTATING WEEK OWNERSHIP

  • Weeks are rotated forward or backward in the calendar to give owners a chance for the best week.

  • One-year owner may use 1st week of January then 2nd week the week year

  • Gives owner an opportunity for prime weeks

3. FLOATING WEEK OWNERSHIP

  • In this ownership it allows a guest to buy a week within a specific period.

  • 15 days in January and 10 in some other month

  • Plan suitable where there are no seasonal variations

 

4. VACATION CLUBS

  • It allows the guest to buy share of the hotel or property

  • The profit of the shares is given to the guest in terms of accommodation in the hotel

  • Major international chains like Hilton group and Marriott’s are using this concept

 

5. POINTS PROGRAMME

  • In this option an owner gets an amount of points equal to the level of ownership

  • The owner in a point programme can then use these points to make travel arrangements within the resort group, offering a large section of options for destination.

  • The number of points required to stay at a destination will vary based on a “point chart”

 

Point chart would have factors such as:

  • Popularity of resort

  • Size of accommodation

  • The no. of nights

  • The popularity of season

  • Specific nights requested

  • Eg; Hilton Grand Resorts

 

METHODS OF USE

1. OWNERS USE

  • Use their usage time themselves

  • Rent out

  • Give it as a gift

  • Exchange internally within the same resort

  • Externally into thousands of other resorts

  • Sell it through advertising, online or by a broker

 

2. EXCHANGE THROUGH AGENCIES

  • These are international agencies

  • Owners can exchange their week through agencies like Resort Condominium International (RCI) and Interval International (II)

  • Resorts are affiliated to these agencies where only members can exchange

  • Charge yearly membership fee and fee for an exchange.

 

3. INDEPENDENT EXCHANGE COMPANIES

  • These are national agencies

  • Owners may arrange a direct exchange mutually without needing the resort to have an affiliation with the company.

  • Saves money on exchange fee

  • Eg; Redweek and Timiex

 

ADVANTAGES OF TIMESHARE

1. Spacious accommodations

2. Easy vacation planning

3. No need to eat out

4. Unlimited resort amenities

5. Known commodity

6. No additional charges for friends

7. Convenient laundry

8. Long term savings over hotel

9. Ability to exchange

 

1. SPACIOUS ACCOMMODATION

  • One of the advantages that timeshares have over hotels when going on vacation is the space that they provide.

  • Guestrooms

  • Living and dining areas

  • Bathroom

  • Fully equipped kitchen

  • Laundry

 

2. EASY VACATION PLANNING

  • Where to go, when to go, where to stay, how much to spend?

  • No need to search online for the stay

  • No need to spend time or stress about a vacation accommodation

 

3. NO NEED TO EAT OUT

  • One of the most expensive aspects of travelling is the food cost.

  • Most timeshare comes with equipped kitchen. It may be advantages to those on dietary needs with kids.

  • Options to eat out or cook meals yourself

4. UNLIMITED RESORT AMENITIES

  • Use on the hotel amenities and facilities of the hotel like pool, tennis court to own sauna, etc.

  • It can be less expensive than to pay for a tennis membership or a golf membership.

 

5. KNOWN COMMODITIES

  • When you go to the same timeshare resort every year, you know exactly what you will be getting on your vacation.

  • You can be confident that you will get exactly what you have come to expect from your previous visits.

 

6. NO ADDITIONAL CHARGES FOR FRIENDS

  • Able to invite additional people on vacations with no charges.

  • Timeshares have less limitations then hotels to the number of people who are allowed to stay as timeshare has larger accommodation units.

 

7. CONVENIENT LAUNDRY

  • Most timeshare units provide washers and dryers in rooms

  • No need to find local laundromats or go for expensive hotel laundry

 

8. LONG TERM SAVINGS OVER HOTEL

  • You pay one-time purchase fee and entitles you to week every year.

  • You own the vacation for that time duration.

  • Future vacations at current cost.

 

9. ABILITY TO EXCHANGE

  • Prime reason for getting a time share membership

  • Owners have ability to exchange their ownership to other resorts in same chain or outside also through agencies

 

DIFFERENCE BETWEEN TIMESHARE AND CONDOMINIUM

Timeshare will have multiple ownership whereas condominium will have only one owner.

 

HOW ARE TIMESHARE DIFFERENT FROM HOTEL?

  • Location

  • Ensure future vacation at current prices

  • They run on exchange concept program

  • Vacation options/ interval

  • Sharing of maintenance

  • Flexibility to meet the need of family size

  • More recreational facilities

  • Safety factors

 

TYPES OF TIMESHARE CONTRACTS

  • There are two types of timeshare contracts:

  1. Deeded Timeshare (or leaseholds)

  2. Right to use

 

1. DEEDED TIMESHARE

  • These are indefinite commitments

  • That is: you are responsible for your portion of the property until you transfer the deed to someone else.

  • The owner may do what is desired: use it, rent it, give it away, leave it to heir or sell it.

  • Also liable for an equal portion of real estate taxes

  • The owner can deduct some property related expenses such as real estate taxes from the taxable income

  • Complex and follow rules of local property ownership

  • Many deeds do not convey ownership of land but merely the apartment or the accommodation.

 

2. RIGHT TO USE TIMESHARE

  • Exactly as they sound, you have the right to use the time share under the terms of the contract and agreement you sign, but you do not own any portion of the property.

  • These agreements have an expiration date

  • Far more restrictions on when and how to use the property than deeded.

 

OTHER TWO TYPES OF CONTRACTS FOUND ARE:

  • Fee Simple: Here the purchasers jointly invest in a property, allocate interests to each owner and employ a manager to run the unit which has amenities, services and recreational facilities.

  • Club Agreement: This involves the ownership through purchases of shares of which shareholders receive points in proportion to the value of the investments. These points entitle them to the use of any apartment at any time of the year. This concept is very popular in Switzerland and France.

 

DIFFICULTIES IN MARKETING TIMESHARE

Effective marketing is one of the most important aspect of the success or failure of timeshare business.

Problems faced in the marketing of the timeshare may be listed below:

  • Highlights initial cost of buying

  • Shared annual maintenance charges

  • Locations: Difficult in case of executive customer

  • Intangibility (Hospitality as a product cannot be carried, marketers have to create an image of the product)

  • High advertising cost

  • Negative image of the industry

  • Resale difficulties

  • Difficult to resale if the customer does not want to continue

  • Lifestyle change, children grow up, people divorce, encounter financial hardship

  • Number of timeshare resorts are quite less and customers do not get much on platter

  • Lack of holidaying culture

  • Owners resort offers no resale programme

  • Lead to wastage of weeks if not used

  • Wastage of value points.

 

HOW TO IMPROVE TIMESHARE AND CONDOMINIUM IN INDIA

  • There is need to link all timeshare resorts and their members into one chain through exchange agencies.

  • Timeshare unit should charge according to peak and lean seasons of the hotel.

  • Owner should make arrangements for resale of timeshare weeks

  • Charge lumpsum amount consisting of membership fee and maintenance fee at the initial time of enrolment.

  • Increase number of destination resorts for members to have more choice on their holiday destination.

  • These timeshare concepts and resorts need more advertisement.

 

ROLE OF GOVERNMENT

Government should:

  • Start some new units

  • Loans and subsidies

  • Act as a regulatory body (curbs the dishonest players & controls the financial transactions between the properties & their members)

  • Safety & security (of tourist destination)

  • Infrastructure (roads, electricity, clean drinking water, garbage disposal, street lighting etc)

  • Taxation (collecting taxes and dues from the timeshare operators and in turn using it for infrastructural development)

 

AIRDA (ALL INDIA RESORT DEVELOPMENT ASSOCIATION)

  • AIRDA was formed to protect the rights of both consumers and the industry in order to have a long-term profitable business.

  • Most timeshare operators are member of AIRDA

  • Slogan: “Ensuring Fair Practices, Assuring Safe Holidays”

 

EXCHANGE AGENCIES

  • Resorts and Condominiums International (RCI)

  • Interval International (II)

Both are international exchange agencies.

 

RESORT AND CONDOMINIUMS INTERNATIONAL

  • RCI has pioneered vacation exchange industry since 1974.

  • Largest exchange company with 4000 affiliated resorts in more than 100 countries.

  • It has three million members from around the world.

 

RCI MEMBER BENEFITS

Extra vacation getaways

  • Enjoy additional vacations without depositing a week

  • Best rates on RCI vacation resorts

 

RCI Cruise

  • Exchange your timeshare week for a cruise vacation

 

Elite Rewards Credit Card

  • Enrollment for credit card is optional

  • Programme credits reward points for customers for purchasing and using vacations

  • Credit rewards can be exchanged for gift certificates, dining etc

 

Gift Certificates

  • Gift certificates for families and friends at RCI based resorts

 

Vacation Protection

  • This optional service protects the members in case of not using the vacation week for a reason by automatic addition of points.

 

RCI Travel

  • RCI travel agency helps the member travel arrangements and schedule travel activities.

  • Members also receive discounts on air fare, car rentals and local sightseeing.

 

INTERVAL INTERNATIONAL

  • It is the second largest exchange company in the industry.

  • It has two million members and 2500 resorts in more than 75 countries.

 

Interval International member benefits

1. Request First or Deposit First

  • It allows members to request an exchange week before depositing their timeshare week. This allows members to hold into their week until they find exactly what they want.

2. Member Getaways

  • Enjoy additional vacations without depositing a week.

  • Last minute surprise free getaway for two

  • Avail resorts on Interval international best rates.

3. Gift Certificates

  • Gift certificates for sharing with friends and families.

4. Interval Travel

  • Travel discounts on cruises, airline tickets, car rentals

5. Interval Gold Membership

  • Upgrade the membership by using weeks and more facilities and services

  • Receive more discounts and opportunities on year-round travel.

DISCLAIMER!

The notes provided for on this website represent the views of the individual authors of different books and notes and not ours. The material is intended for educational and personal purposes only. In no way we assume the authorship of the materials provided on this website. We do not assume any responsibility for the content of the posted material. Use this material at your own discretion.

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