How Do Timeshares Work? How’s Their Value Compared to a Travel Club?

My beautiful wife, Nancy, and I love to travel… a lot!!

We’ve taken over 70 vacations & trips together in just over 8 years as a couple, which means we’ve got a little experience being tourists and in vacation mode.

So over the years we had heard about timeshares many times and had been solicited to go to presentations for freebies but we never once bothered…

…not really sure why not?

Maybe it was the thought of wasting several hours of our vacation getting pitched to spend lots of money, maybe it was the thought of it being too much money or that we didn’t want to keep traveling to one property all the time, etc.

Whatever it was, we just simply never went to a presentation… wasn’t worth a free dinner or tickets to us.

But over the past 18 weeks, as we’ve been traveling around to awesome places in Hawaii, California, Arizona & Florida, we’ve been staying at many great resorts through an International Travel Club that we’re members of and we’ve talked to many timeshare owners (there are lots of them) staying at the same places…

…and we’ve been chatting it up with some of these people trying to figure out why they bought, whether they liked it/disliked it, etc.

Basically, we figured it was time for us to see if a timeshare could benefit us with all the traveling we do.

So with that said, in Las Vegas a couple of months ago, we took the plunge and went to a presentation.

(Side note: The $150 in dining vouchers we were offered to go to the presentation had nothing to do with us attending… we simply wanted to learn and would have seriously considered buying if it made sense.

Tip: Our recommendation would be to never attend a Timeshare presentation for “the gift”… if you’re truly not interested, you’ll be wasting several hours of your vacation and you’ll be putting yourself in a high-pressure sales situation… we were there for 4 hours, even though they said 90 minutes max, and they said no pressure sales up front but let’s just say, that was not so)

What was our experience like?

To be honest, we’re still confused from the whole thing.

As mentioned, we’ve traveled a ton over the years and I was a top-selling travel agent for years but pretty much the whole idea went way over our heads and we’re not really sure why billions of dollars of this gets sold every year.

Now don’t get me wrong, if you’re an owner yourself we’re not knocking you for buying… if we didn’t know of a better alternative we may have considered.

But when we logically looked at the #s, it just didn’t add up for us.

Of course, like many purchases, we understand most people buy on emotions, not logic…

…travel is a powerful motivator… look at us, 18 weeks ago we sold all of our “stuff”, are now homeless, we travel full-time…

…and have never been happier in our lives!! LOL

For most people, that wouldn’t be a logical thing.

So we get that many people buy emotionally to “lock” in an annual vacation and commit themselves to get away… and we’re huge promoters of that… our eBook we wrote is all about that.

But logically, we couldn’t figure the whole timeshare thing out.

They were going on about buying points and how many points you need depends on things like how many weeks you want, time of year you travel, resort you stay at, room type, your “status”, and on and on.

But they wouldn’t give us real examples of what an amount of points would get us, what availability was like, how much ongoing maintenance fees would be, etc.

We had to make a decision “there and then”, that was it… no info to take with us to evaluate or think about it because “no-one comes back and buys once they leave” we were told…

…it was actually a little insulting as we felt we were expected to make an immediate decision without doing any due diligence on a “points” system that felt like you needed a degree to understand with all the variables, exchange options, add ons, upgrades, etc.

Being a couple that spent $40,000+/year on travel the last several years (and that’s before we started traveling full-time) we feel we were great prospects but unless we were willing to make a decision ‘on the spot” our business wasn’t wanted…

…very weird business practices!?

When we initially joined an International Travel Club earlier this year, it wasn’t till 3 weeks after we first saw it we joined. That was AFTER we did a bunch of research and flew to Las Vegas to check out 7 of their properties, and they were happy to take our business.

So we can now understand why many people who buy timeshares regret the hasty decision they made (Google timeshare and you’ll see owners selling them is a huge market) as they were so confused and pressured at the time they didn’t really understand what they were buying.

Anyway, enough about our experience on that.

What great thing came out of it though was that we feel better then ever about our decision to join a Travel Club rather then buy a timeshare… let’s compare the #s and see why that option made better sense to us.

Regarding the timeshare we saw, depending on how many points we bought based on when we wanted to travel, we would have paid either $18,000 or $26,000 up front for 1 week per year… and if we financed that at their 15.99% rate over 10 years it would have doubled that #.

On top of that you have monthly maintenance fees that you’re locked into for LIFE.

They were $50-$70/month depending on the package we bought… let’s use $60 for our example.

Over 30 years we’d pay our initial $18,000-$26,000 up front and $21,600 in maintenance fees. (Keep in mind maintenance fees ALWAYS go up… that’s the biggest complaint owners tell us… we talked to one who’s fees jumped to over $2000/year due to a hurricane and major repairs being done… for our example though, we won’t even factor in higher fees)

So when you add it up for 30 years of JUST 1 week/year we’d pay $39,600-$47,600.

And if you want more weeks you have to buy more points. (Which could double or triple or more the above #s depending what you want) And if you can’t travel due to illness you still pay maintenance fees, etc.

It’s a HUGE commitment!!

Now let’s look at the travel club option.

For a typical, good quality Travel club, you’ll pay, approximately, a ONE-TIME $5000 fee for life-time access which allows you to book up to 10 weeks/year at the resorts for the price range of $298-$799/week.

On average members pay around $550 for each week they stay at a resort.

So in 30 years you’ll have paid $5000 up front and $16,500 for 1 week/year… $21,500 in total… that’s 46%-55% less then a basic timeshare.

So you can see why being a member of a Travel Club, financially speaking, makes sense!

And here are a few things to consider:

1. You can book up to 9 more weeks per year in a Travel Club and just pay the $550 on average per week…. over 30 years you’ll pay $16,500 per extra week whereas an extra timeshare would be MUCH more… basically you’re saving over $20,000 for each extra week compared to a timeshare… the more you use your club the savings get ridiculous!

2. You’ll have no maintenance fees, ever! If you can’t travel in any given year or ever again, no big deal, you’ll never pay another dime… no contract locking in ongoing fees.

3. As mentioned, your up front cost will be around $5000, that’s it! Not $18,000-$26,000. Not sure about you but we don’t want to pay for years and years of vacations today… we have better things to do with our hard-earned dollars!

4. All the above timeshare #s are based on a studio or one bedroom which is all you need if you’re a couple… if you have a bigger family though and need 2 rooms or heaven forbid 3 or 4 you’ll need a ton more points… your costs will sky-rocket. With a travel club, the $298-$799/week can be for 1-3 rooms, based on your needs and availability… they’re not penalizing you and charging double/triple for your large family.

5. Most people don’t need to “finance” an upfront $5000 fee with a travel club… with the $20,000+ for a timeshare, many do… the high interest rates double your #s and really make a timeshare pricey.

Alright, enough said about the whole timeshare vs travel club option… I could go on with lots more pros/cons but I’m pretty sure about anyone could look at the above and easily decide which one logically makes more sense and can at the same time get emotionally satisfied with the monetary savings.

As I said at the beginning, this post isn’t about knocking timeshares or owners… Nancy & I love all industries that promote travel as we believe it’s so important and we know many of you love the “ownership” aspect of timeshares and that’s cool.

But we know our readers & most travelers love to save money, like savvy travelers like us do, and we want to make sure you’re fully informed on the options…

…and in our experience, most people don’t necessarily want “Vacation Homes” or “Vacation Ownership”, they just simply want consistent vacations and in our expertise…

…being a member of a Travel Club vs owning a Timeshare is a much more economical and smart option… in this volatile economy…

… or in any economy for that matter!

I appreciate you.

Shawn