How did one of the most exciting and affordable travel opportunities for singles and families, transform into an industry with so many instances of fraud? In the past fifty years, there has been a radical change in the global timeshare industry, which has moved away from customer care and service, to being one of the most-risky financial products, a consumer can buy.
In this article, we will take a historical look back at the first timeshares, and the business models that made the fantasy of worldwide travel accessible to the average working-class family. How far has the industry strayed from service and affordability, and when did predatory contracts and fees become the norm in the shared time marketplace?
Timeshares Were Introduced Around the Globe in the Early 1960’s
In Great Britain, the first examples of timeshare arrangements were called ‘vacation home sharing’. This was not the typical resort and apartment style accommodations that we see today. Instead, consumers simply grouped together (usually four families) to share the expenses evenly. It made owning a vacation home easier for families on a limited budget, and helped to also share the expenses and legal obligations of owning a second property. They rotated the peak season or national holiday’s annually, to give everyone a chance to enjoy vacation time equally, in the most desirable calendar months.
The first two timeshare entities emerged in France, and in Switzerland in the 1960’s. A French development company called “The Societe des Grands Travaux de Marseille” began to sell the time at a popular ski resort in the French Alps. Their slogan developed the core concept of timeshare, that would appeal to consumers over fifty years later: “No need to rent the room; buy the hotel, it’s cheaper!”.
A company called Hapimag in Baar Switzerland, began to rapidly purchase luxury hotels and resort properties across the country, and in Spain and Italy. They were the first company to offer their timeshare owners the option of accessing vacation time in multiple locations.
Timeshares were a little slow to catch on in America however, and the first timeshare was opened by Hilton, at the Hilton Hale Kaanapali resort in Maui, Hawaii. The spectacular resort drew timeshare owners from across America and around the world, as it was located in the middle of a 15,000 acre property, called the Pioneer Mill Plantation.
Another timeshare, non-hotel resort opened in 1969, called the Kaua`i Kailani in Kuai, Hawaii, and the organization became known as Vacation Internationale. They were the first timeshare to offer leasehold based contracts, sold on a point system that awarded time according to investment by the consumer.
The first deeded timeshare was a partnership between Hyatt, and Innisfree companies, located at Brockway Springs in Lake Tahoe, California in 1973. This was followed by a new built development in 1974, by a company called Captran Resorts, and the first Floridian timeshare (Sanibel Beach Club), which was built as a vacation condominium project with thirty-one units, which sold out entirely, in under two years.
By the middle 1970’s a name that many timeshare owners may recognize, RCI and Interval International opened, and began building and acquiring properties expressly for timeshare sales. The two businesses now own just under 8,000 resorts around the globe.
Factors and Cultural Changes That Have Put Pressure on the Timeshare Industry
It may be hard to believe, but there was a time when owning a timeshare was the most affordable option for vacation opportunities. The only thing that a family had to be concerned about, was the cost of travel, and spending money, which appealed to them much the same way that all-inclusive resorts do today.
In the beginning years of timeshare growth, consumers had two options; they could rent a hotel room on a nightly basis, which was expensive and offered few amenities, or they could buy into a timeshare. For many families, owning a suite or condominium was not affordable, but a timeshare made it possible to enjoy some of the cost saving conveniences of home, while traveling. Kitchenettes and laundry facilities were as important to economical travel then, as they are today, particularly for families with children.
While the timeshare industry enjoyed decades of dominating the travel market, many things have changed. Before websites made it easier for consumers to shop for low cost and discounted accommodations, and before private owner rentals (like AIRBNB) became popular, there were virtually no opportunities to book a home-away-from-home, in popular resort destinations. Today, that is no longer the case.
Read our recent article about The Manhattan Club (MC) timeshare in New York, where owners sold over 21,000 timeshare contracts, for less than 300 rooms. It is not an occasional problem, it is common with current timeshare providers, making it harder and harder for Americans to book the time they have paid for with their resort. It’s also harder and more expensive to trade weeks, or upgrade to other resorts as an alternative.
As fees continue to rise (a recent legal judgement against The Manhattan Club found fees increased over 200% for timeshare owners), many travelers who own a timeshare are frustrated, disillusioned and not seeing the value in the expense of timeshare ownership.
How New State Laws May Be Removing Protections for Timeshare Owners
We are watching new legislative proposals that began in 2013, that move to put even more consumers at risk of escalating timeshare maintenance fees. In most states across America, timeshares are legally limited or capped, when it comes to raising fees. It’s important to note that a timeshare does not have to provide a detailed reason, for the increase in fees, beyond inflation, property damage (tropical storms, hurricanes or floods) or the general statement of necessary ‘improvements’ to the property.
Maintenance fees remain one of the biggest threats to consumers, who enter into a timeshare contract with the expectation of affordability, and long-term use of the property. Moves by several states to pass bills that remove the protection of fee increases, further places consumers at risk, by doubling or even tripling the cost of timeshare ownership.
How Do Many American Consumers Really Feel About Timeshares?
Today, affordable vacation opportunities are available in a very competitive tourist market worldwide. Timeshares no longer enjoy the monopoly on low cost travel and vacations, but have been actively changing the terms of contracts to provide less, at a greater expense to consumers.
In our opinion, and that of our clients who successfully cancel their timeshare contracts, the value proposition simply does not add up anymore. Why commit yourself to a high cost contract, when other options (with less restrictions) exist? You don’t have to give up on your goal to find an affordable annual or bi-annual vacation with your family, but there are better options, particularly if you are locked into a high-cost timeshare contract.
If you are ready to look at options to cancel your timeshare, with help from our attorney led team, start today with a free consultation. We will discuss your contract, what you can expect from the legal process of timeshare cancellation, and how we can help.