TIMESHARE & VACATION OWNERSHIP
20th July, 2020
Classification of Hotels Based on Ownership
On the basis of ownership, hotels can be classified into two categories :
Timeshare Hotels and Resorts
Timeshare Hotels and Resorts
A timeshare can be defined as an advance purchase of time in holiday accommodation. The purchaser pays a capital sum to acquire this timeshare and then pays an annual contribution towards the maintenance of the property. The period of time sold is generally based on the modules weeks.
Timeshare is a marketing concept in which hotels are marketed on a membership basis. Members can avail accommodation in the timeshare property by paying the upfront advance for the stay of a fixed number of days every year for a specific number of years.
Examples of International brands for timeshare: Disney, Hyatt, Starwood, Marriott, Four Seasons, Hilton, Ritz Carlton, Accor, and Domestic Brands are Club Mahindra, Kamat Group, Sterling resort, Toshali Resort, Cambay group, etc.
These properties typically resort timeshare units, in which multiple parties hold rights to use the property, and each sharer is allotted a period of time (typically one week, and almost always the same time every year ) in which they may use the property. The sharer holds no claim to ownership of the property.
This form of lodging has spawned a variety of products sold on similar occupancy schemes; cars, planes, boats, and luxury fractional properties.
They are apartotels or apartment hotels. These units are developed on joint ownership basis. Each ownership purchases and has full right of and the unit he has purchased and shares the most common to the complex such as taxes, insurance, maintenance and upkeep of public areas including swimming pool, health club, parking, security, air conditioning, heating, cable, broadband, etc. Each owner can occupy or sell his unit independently but is required to follow the rules and regulations laid by the management. The owner enjoys the benefits of property, appreciation but needs not to bother about its maintenance, security, upkeep, insurance, etc. He is required to pay yearly maintenance charges. In some cases, a corpus can be made and the maintenance expenses are paid from the interest earned from the corpus. In some cases, the management can help the owner is renting out the property. They take full responsibility for the owners’ units’ safety and also pay to the owner a major portion of the rent earned from renting out. Usually, the management requests the owners to rent out in case of major conferences. The management earns a major portion by renting out conference hall and from catering.
A condominium, frequently shortened to condo, is a type of real estate divided into several units that are each separately owned.
Residential condominiums are frequently constructed as apartment buildings, but there had been an increase in the number of “detached condominiums” which look exactly like single-family homes but in which the yards, building exteriors, and streets are jointly owned and jointly maintained by a community association.
Unlike apartments, which are leased by their tenants, condominium units are owned outright. Additionally, the owners of the individual units also collectively own the common areas of the property, such as hallways, walkways, laundry rooms, etc.; as well as common utilities and amenities, such as the HVAC system, elevators, and so on. Many shopping malls are industrial condominia in which the individual retail and office spaces are owned by the businesses that occupy them while the common areas of the mall are collectively owned by all the business entities that own the individual spaces.
Some Other Concepts Related to Timeshares
Unlike a vacation club, time-sharing involves the purchase of the real estate. You buy a week or weeks to use a furnished condo, cabins, or other accommodation that offers all the comforts of home, including a kitchen. Time-sharing limits travel options to one location, although often you have the opportunity to swap with owners of timeshares elsewhere in the country or the world.
Membership in vacation clubs covers multiple locations. Some vacation clubs resemble timeshares in that they offer fully-furnished, home-style accommodations. Clubs such as one offered by Disney provide discounts to all of its resorts and theme parks. Hilton club members receive discounts at all the chain’s hotels. Ask if the club will give you a trial membership so you don’t have to commit yourself immediately.
Timeshare owners pay an initial fee to purchase their block of time and then annual maintenance fees that can rise over time. They can sell their block of time, much like any other real estate transaction. Vacation club members pay a single annual membership fee and generally do not have membership options.
How is timeshare different from Hotel Business
A Hotel room is rented for a certain number of days where you have only one room to yourself. You may go down to a pool or restaurant or bar of the hotel which has to be shared with the other guests.
However, when we talk about Time Share, we own a certain place to ourselves on certain periods of time. You don’t pay for every night you stay there. The ownership is bought on basis of the number of years you wish to holiday there. It is bought by multiples parties unlike a hotel room and every member gets the condo to themselves for a certain time of the year that is distributed in a pre-decided order.
Not only this, you get two or even more rooms to yourself in a Time Share and the kitchen facilities or even pool is all to yourself. Time share is more affordable in long run.
One can also further earn money in Time Share, since certain members even rent these properties for one day events.
Classification Of Timeshare Properties
Deeded/Right to Use
The buyers buy the timeshare for a specific number of years(20-30) in advance. Based on a contract for a period of time and after the time is completed all the rights revert to the property owner.
One can holiday with their family in various resorts owned by the timeshare for a specific company for the specific period one has purchased the holidays for. In this ownership it allows a guest to buy a week within a specific period. For eg. 5 days in January and 10 in some other month. So the customer can plan suitably where there are no seasonal variations,
Fixed Week Ownership
The owner may own a deed to use a unit for a single specified week. He may choose any calendar week like the first week of July as per his need and convenience. The owner will have to use that week every year. This concept was not very popular as it was rigid and didn’t give the customer the flexibility in usage so it became outdated in 1980.
Rotating Week Ownership
Weeks are rotated forward or backward in the calendar to give owners a chance for the best week. For eg. one year the owner may use the 1st week of January then 2nd week next year. Gives owner an opportunity for prime weeks.
Owners become members of the club. Timeshare has vacation ownership programs based on point systems Eg Hyatt. Has ownership for a certain number of years
Types and sizes of Accommodation
These properties tend to be apartment-style units ranging in size from studio units (with room for two to three and four-bedroom units. These larger units can comfortably house large families. Units normally include fully equipped kitchens with a dining area, dishwasher, televisions, DVD players, and more. It is not uncommon to have washers and dryers either in the unit or easily accessible on the resort. Kitchens are equipped to the size of the unit so that a unit that sleeps four should have at least four glasses, plates, forks, knives, spoons, and bowls so that all four guests can sit and eat at once.
Units are usually listed by how many the unit will sleep and how many the unit will sleep privately.
Sleeps 2/2 would normally be a one-bedroom or studio
Sleeps 6/4 would normally be a two-bedroom with a sleeper sofa
Sleep privately refers to the number of guests who will not have to walk through another guest’s sleeping area to use a restroom. These resorts tend to be strict on the number of guests per unit. Unit size can affect demand at a given resort where a two-bedroom unit may be in higher demand than a one-bedroom unit at the same resort. The same does not hold true comparing resorts in different locations. A one-bedroom unit in a desirable location may still be in higher demand than a resort with less demand. An example of this may be a one-bedroom at a desirable beach resort compared to a two-bedroom unit at a resort located inland from the same beach.
The following are the types of accommodation available for the timeshare guest :
3) Ski lodges
9) Restored Farmhouse
10) Private Residence Clubs
11) Second Homes