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Timeshare v Holiday Clubs: spot the difference

The sales pitch is sounding good. Wonderful holidays in self-catering accommodation in some of the world’s most sought after locations. And they’re offering better value than a hotel, often with better amenities and 24-hour concierge service.

Before signing on the dotted line do you know if you are buying timeshare or joining a holiday club? And can you spot the difference? Timeshare’s European trade body Resort Development Organisation (RDO) guides us through the distinct characteristics of these often confused travel products.

Since the timeshare holiday concept came to the fore in the 1960s, the industry has evolved from its original innovative yet straightforward model – offering fixed weeks in fixed locations – to a sophisticated, sometimes points-based array of worldwide holiday options. From apartments in the Algarve, to safaris in South Africa, Caribbean cruises, skiing in Switzerland and catamaran holidays off Turkey’s Aegean coast, the choice is endless.

When the world’s biggest hotel brands – Marriott, Four Seasons, Hilton, Disney and more – got into timeshare in the US, they elevated the industry to a new level and timeshare in Europe has followed this growth.

Yet, a good name can be tarnished by disreputable players joining the game – for example financial services, estate agents, insurance companies, have all been affected by rogue operators. In timeshare’s case, those ‘players’ are the holiday clubs that spring up in popular destinations, particularly the Costa del Sol and the Canary Islands. They proffer holidays galore which are – so their sales pitch goes – supposedly “cheaper than timeshare and less of a commitment”. The stark reality is most holiday clubs neither own, nor manage any resorts. They seek only to part consumers from their hard-earned money for something they didn’t want in the first place, or worse, that doesn’t even exist. These are the bad boys often named and shamed in the tabloids.

Spotting holiday clubs

With summer coming, holidays will again be making headlines, so how do you distinguish between a reputable timeshare operator/resort developer, and the fakes who sell fresh air?

Here are some questions consumers should ask:

Does the company own or manage its own resorts?

Timeshare: they invest money in building and developing resorts. Purchasers’ future occupancy rights are protected – many through the British trustee system.

Holiday Clubs: these “contract in” their holidays. They don’t own, or manage the resort locations, although they may give the impression they’re selling holidays and promise discounts on holidays.

What are the costs?

Timeshare: consumers pay an amount upfront, to purchase a certain number of years’ worth of holidays, or perhaps a trial membership to try the programme and then buy long-term membership if they like it. Fees normally range from £4,000 to £25,000. Each year, a separate management fee is payable by every owner.

Holiday Clubs: the fee to join the club can be up to £25,000 and then on top of that, holidays need to be paid for.

If I buy, am I protected by a trade/consumer body?

Timeshare: The majority of active European timeshare developers belong to RDO and have signed up to a code of conduct that gives purchasers additional levels of protection. RDO also offers a free mediation service and an Alternative Dispute Resolution scheme to its members’ customers. Consumers can also seek advice from TATOC.

Holiday Clubs: There is no industry body representing holiday clubs or discount travel clubs and they are not bound by RDO’s code of conduct.
If in doubt, check with RDO before you buy.

Is there a cooling off period?

In February 2011, a new law came into force across Europe governing the way timeshare is sold, and holiday clubs too are being made to comply with the law, providing buyers with a mandatory 14 day cooling off period. Furthermore, the cooling off period applies annually and payments must be divided into equal yearly instalments.

RDO chairman Richard McIntosh recommends consumers research a company before they buy and if they feel at all unsure contact RDO or TATOC, the official European timeshare consumer organisation run by timeshare owners, to verify the company is bona fide. RDO’s member companies include some of the top resort developers in the world and all abide by a special code of conduct.

McIntosh explains: “RDO was established to improve representation for reputable companies in the timeshare sector, and promotes fair trading within the industry. We are a direct member organisation, with over 70 members from all sectors of the industry across Europe, including top resort developers, exchange companies, management and marketing companies, trustees, finance houses and resale companies. Our members are bound by a code of conduct, which in itself provides significant peace of mind to consumers who may be thinking of buying timeshare.”

The vast majority of timeshare owners are happy with their membership (there are seven million timeshare owners worldwide, with the figure rising daily). In 2009 RDO received just 50 complaints against member companies, almost all of which were quickly and amicably resolved and unlike many industries, timeshare complaints are falling. While various surveys put timeshare owner satisfaction at around 85%. It’s a high figure when compared with other types of holidays, and one the timeshare industry can be proud of.

This guide was produced by the Resort Development Organisation. Read more at GoTimeshare.

Category: Timeshare and fractional guides


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2 Responses to Timeshare v Holiday Clubs: spot the difference

  1. It is very important to take into consideration that time shares should never be considered as an investment, but only as a purchase. An investment means the possibility of financial growth and resale, and no one is likely with time shares.

    • Agree with you Adina, timeshare should never be viewed as anything more than a investment in your lifestyle – it should not be seen as an investment with the potential for financial growth.

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