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Are Timeshares Worth the Investment?

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Posted on December 17, 2020

The question whether timeshares are worth the investment is as old as timeshare itself. Consumers for decades have asked themselves whether it is worth it to buy a timeshare. Many are happy with their purchase, but others don’t see the value. The answer tends to reside in the terminology itself as well as a proper understanding of the product.

Most owners are happy with their timeshares. According to figures released by the American Resort Development Association (ARDA), 87 percent of owners say their timeshare experience is either excellent, very good or good. This bodes well for the industry, but that also leave 13 percent, or about 1.3 million people, less than satisfied with their ownership.   

Is It an Investment?

For years, the salespeople at the resort sold timeshare as a financial investment, similar to the way traditional real estate is sold. Because the earlier timeshare products were almost exclusively deeded ownership products where the buyer owned an actual share in the resort, theoretically this seemed to make sense.

In hindsight, the use of the term investment was a misnomer because it gave the impression that the timeshare would increase in value, like a real estate purchase. In reality, timeshare depreciates and financially operates more like a car purchase than a home.

The industry’s use of the term investment in connection with timeshares has changed over the years. Nowadays, the industry uses terms such as “lifestyle investment” when describing a timeshare purchase, since the benefit is more about health and wellbeing rather than a financial gain.

Last year, ARDA published an article discussing the health and productivity benefits of taking an annual vacation. The numbers show that the more vacation time taken, the healthier, happier and more productive the person. This may seem like a no-brainer, but more than half of American workers did not take all of their allotted vacation days prior to the COVID outbreak. This figure is expected to increase this year as workers were obviously limited in their ability to travel for a vacation.

So is the money spent on owning a timeshare worth it? The answer is yes, but much of this depends on how the timeshare was purchased and the ongoing use of the product. This goes to the understanding of the product and how the sales operations function.

Cost Breakdown of a Timeshare

Let’s take the average price of a timeshare sold at the resort. According to ARDA, the average price of a week of timeshare sold at the resort is about $23,000. Adding in the average cost of the annual maintenance fees, which is about $1,000 per year, the overall cost over a 30 year period breaks down to about $1,766 per year, or per annual vacation.  We’ve used the 30 year period since that reflects the potential employment period of an owner when the costs tend to be more affordable.

Now, understand that the prices of timeshares sold at the resorts include marketing costs and sales commissions that can be as much as 60 percent of the overall price of a timeshare. This is why timeshares for sale on the resale market seem like such a bargain compared to the resort prices – because those costs are not factored into resale prices.

So, for the sake of the example, we’ll take the new sale average and reduce it by 60 percent. That leaves us with a resale price of about $9,200. Factor in the maintenance fees and the cost prorated over 30 years for a resale timeshare would be about $1,300 per vacation.

Does it Compare to a Hotel Stay?

Compare these costs to the cost of booking a unit for a week and you’ll get an idea of how timeshare costs stack up. Remember, you’ll always be able to get the Motel 6-type hotel accommodation, but the true advantages of timeshares are the larger units with multiple bedrooms, living areas and kitchens for healthy meal prep.

Since the most popular timeshare configuration is a two-bedroom unit according to ARDA, we’ll use a two-bedroom unit at The Grove Resort hotel in Orlando as an example. To book the least expensive unit on for next week, the total cost including tax would be $1,359.06. I realize this is Christmas week, but keep in mind the lower rates being advertised due to COVID. Even the least expensive two bedroom unit in the third week in January would run $1,311.24. When travel returns to pre-COVID levels and these prices start going up, it’s easy to see that locking in today’s costs with a timeshare is a good deal.

Comparing this hotel rate with the cost of a timeshare resale and the rates are more than comparable, but keep in mind the added benefits of a timeshare such as internal exchanges within the brands like Wyndham and Marriott. Wyndham has over 200 resorts within its network, while Marriott has nearly 70. Owning within such groups gives flexibility beyond looking for hotel deals every year.

Just Use It

The key is using your timeshare every year. Timeshare is a use product, so the value is in using the product rather than skipping your vacation. Because timeshares are essentially pre-paid vacations, there is very little reason not to use it unless perhaps an unexpected medical emergency comes up (as we’ve seen this year too many times).

Today’s timeshare products are flexible enough to work around potential work or scheduling conflicts. With exchange companies such as RCI and Interval International, you can exchange the use of your timeshare to choose from over 3,000 resorts worldwide for your next vacation.

Several drive-to destinations are available with timeshare exchanges, so taking flights are not mandatory for your vacations. Wyndham Vacation Club estimates that 72 percent of its guests currently drive to its resorts and is expecting as many as 90 percent of its guests to arrive by car next year as COVID protocols remain in place for travel.

So Are Timeshares Worth It?

We’ve demonstrated that the costs are very reasonable compared to hotels, especially when bought as timeshare resales, so that shouldn’t be an issue. When you realize that this is a use product and shouldn’t be viewed as a financial investment, the issue becomes clearer since the real benefit is possessing a secured, prepaid vacation with the health benefits and family memories that it provides.

The satisfaction numbers certainly show that the overwhelming majority of owners think timeshares are worth it. Where some owners become disheartened with timeshare is when they don’t use it. Maybe because of situations such as changes in the family structure or advanced age, annual vacations may not be a priority like they once were. Many owners have had decades of great vacations to look back on, and they would say it was worth it. But the time eventually comes to sell since it is part of the ownership cycle. 

Anyone looking to sell or buy a timeshare can always contact one of our licensed agents at 877-624-6889 and they would be happy to go over options with you.

FAQ on Buying a Timeshare


Are Timeshares a Waste of Money?

Only if you don’t use your timeshare. After all, why would you buy something that you don’t intend to use? Sometimes buyers may feel as though they have wasted their money on a timeshare because of the way the timeshare was originally sold to them – at the resort under pressure and during a moment of weakness while on vacation. But on the timeshare resale market, buyers can take their time and search out the timeshare that is best for them, while costing 50-60% less than the resort retail price.

Often, the lower the price for an item, the less likely it is that a buyer feels as though they have wasted their money. The average price of a new timeshare bought at the resort is about $23,000 according to ARDA, the national industry association for timeshares. Compare this to timeshare resales which can often go for under $10,000 and you can see the kind of money saved by buying resale.

One frustration is that owners sometimes fee they cannot use their timeshare, but timeshares can be used in a number of ways, which gives them more flexibility. Fixed week owners can use their week at their designated time or use exchange services such as RCI, Interval International or 7Across to stay in a different resort across the globe. Flex or Floating week owners can do the same, and points-based owners can use internal exchange systems as well as external providers.

If the issue is one of declining health or finances and you just cannot use it anymore, then maybe it is time to sell and reduce your expenses. This is where talking to a licensed timeshare broker agent can help, since they can go over options at no cost to owners.

Buyers can also contact agents if they do not have the time to look for a timeshare, and the agents can search for the timeshare that you won’t overpay for.

Are Timeshares Really Worth It?

The short answer is yes, but the worth of a product is very subjective and timeshares are no exception.

According to ARDA, 87 percent of timeshare owners are either satisfied or more than satisfied with their timeshare. This is a ringing endorsement but why do so many owners say they enjoy it?

Much of it has to do with the quality of accommodation in addition to the flexibility of using the product. A trend that is gaining momentum in the COVID era of vacationing is the need to vacation with a trusted brand that will ensure their health and wellbeing. Brands such as Wyndham, Marriott and Hilton have created upgraded cleaning programs and COVID protocols that provide the cleanest possible vacation accommodations. Add this to the home-like accommodations with many owners personally knowing resort staff and the comfort level is much higher than a standard, transient accommodation provider or Airbnb option.

Larger units with multiple rooms and full kitchens allow vacationers to eat in and prepare their own healthy meals, which is becoming more important in the current travel environment. All while you can still have the best resort experiences in the leading vacation destinations around the world.

Flexibility of use is also a key. Members of points-based programs such as owners of Marriott Destinations points or Wyndham Points have a choice of numerous resort options within their programs. Exchange providers such as RCI, II or the no-cost membership 7Across can expand those options beyond current ownership limitations.

So, is it worth it to take a vacation every year? Often it comes down to availability and price. The availability issue was answered through the flexibility of programs and exchange providers, so there is really no excuse to not make time to take a vacation. So, what about price?

Timeshare ownership is a long-term play, so you really need to be looking at using it over a 20–30-year period. That time can fly by pretty fast, as any parent can tell you, so look at the cost breakdowns.

Looking to the timeshare resale market for the best options, there are a number of timeshares and timeshare points packages for less then $10,000. Factoring in an average annual maintenance fee of about $1,000 for a week (again, according to ARDA), and you are looking at a week of accommodation for about $1,500 each year, or about $214 a night, over a 20-year period.

Keep in mind that timeshare prices on the resale market are negotiable (which is why using a licensed timeshare agent is a good idea) so these costs can come down with a lower buy-in price. And the longer you use it, the lower the per year cost.

The per night costs are really good compared to a hotel, especially when you consider the multiple bedrooms, full kitchens, large living rooms and amenities that timeshares offer. You’ll always be able to find cheaper accommodation somewhere, but the idea of buying a timeshare is to get the best accommodation with a trusted operator at the best comparable prices. Plus, with the major hospitality brands, there are also benefits with their branded rewards programs that can come with timeshare ownership.

Why Timeshares are a Bad Investment?

Who said timeshares are a bad investment? Perhaps some of the financial commentators that opinionate on the web, but in the majority of cases they do not fully understand the products on the market and only look at products and programs through a financial lens. This is understandable, but the important thing to keep in mind is that a timeshare is never to be considered a financial investment in the first place, but an investment in time where you commit to taking a vacation every year.

Essentially, a timeshare is prepaying for future vacations so you are saying that you promise to invest your time and finances into your family and your own health and wellbeing. Great family bonding time is created while on vacation, and several studies show that taking a regular annual vacation keeps you much healthier and productive than those who regularly skip vacations. These are the investments that you make when buying a timeshare, not the thought of a financial return on investment.

Think of it this way – would you spend $2,000 on a week’s accommodation at a hotel then ask the hotel for your money back after you enjoyed your vacation? Unless some drastic event took place, the answer would be no. So why would you think of a timeshare the same way?

Is it because you bought something instead of staying in transient accommodation? Timeshares are a use product rather than an appreciating asset, so think of this more in terms of a car purchase than a home purchase. Cars depreciate the moment they are driven off the car lot because of marketing and sales costs included in the price. Timeshares work the same way, which is why buying on the resale market is a much better way to buy than through the resorts.

Because there is no odometer reading on a timeshare unit, the units are in the same shape for a resale buyer than they are for a buyer who purchases at higher prices through the resort. So, the cost of enjoying a vacation can be reduced by thousands of dollars when buying a timeshare resale.

Can You Just Walk Away from Your Timeshare?

You can walk away from your timeshare ownership, but there are consequences. Timeshare ownership is considered a contractual obligation, so owners agree to abide by financial or policy requirements at the time of purchase. This includes payment of annual maintenance fees or dues, which is usually the issue when it comes to walking away from a timeshare.

Remember that a loan taken to pay off a timeshare purchase is separate and the liability remains even if an owner chooses to walk away. That agreement is between the owner and the lender, which often is a separate entity from the resort or developer who originally sold the timeshare. This is more like a relationship with a credit card company since the loan is likely to be an unsecured loan.

Owners looking to abandon their timeshare ownership will be followed up by the customer service team from the resort or timeshare operator seeking to resolve the issue. If an owner continues to distance themselves from their timeshare, the matter can be referred to debt collection and eventually foreclosure and the loss of the timeshare.

While an owner may not necessarily care about losing their ownership, the matter can be reported to credit bureaus and negatively affect credit scores, which can impede their ability to get a loan in the future or obtain low interest loans.

What if I Stop Paying My Timeshare?

There will most likely be financial impacts to not paying your timeshare. While the short-term gains of not paying may be a benefit, timeshare operators can hand over your account to their in-house collection department or to a debt collector to recover the debt. If that does not result in payment, the resort or developer can begin a foreclosure process which could end up in court and result in the loss of your timeshare.

In this process, your account can be reported to the major credit agencies and impact your credit score, potentially affecting your ability to obtain a loan or paying a higher interest rate on a loan you can secure.



Author Pic
Steve Luba
Chief Communications Officer
Steve manages the public relations, social media and content creation efforts of the company. Previously the Chief Operating Officer for Perspective International, Steve provided oversight and contributed articles for the five regional vacation ownership trade magazines under the Perspective Magazine banner. With 34 years’ experience in various roles in radio and television, sales and marketing, public relations, media and government liaison initiatives, he brings a well-rounded outlook to our industry.