What is a Timeshare
A timeshare is a property with a particular form of ownership or use rights. These properties are typically resort condominium 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. Units may be on a partial ownership, lease, or "right to use" basis, in which the sharer holds no claim to ownership of the property.
The term "timeshare" was coined in Great Britain in the early 1960s expanding on a vacation system that became popular after WW II. Vacation home sharing, also known as holiday home sharing, involved four European families that would purchase a vacation cottage jointly, each having exclusive use of the property for one of the four seasons. They rotated seasons each year, so each family enjoyed the prime seasons equally. This concept was mostly used by related families because joint ownership requires trust and no property manager was involved. However, few families vacation for an entire season at a time; so the vacation home sharing properties were often vacant for long periods of time.
Enterprising minds in England decided to go one step further and divide a resort room into 1/50th ownership, have two weeks each year for repairs and upgrades, and charge a maintenance fee to each owner. It took almost a decade for timeshares in Europe to evolve to a smoothly run successful business venture.
The first timeshare in the United States was started in 1974 by Caribbean International Corporation (CIC), based in Ft.Lauderdale, Florida. It offered what it called a 25-year "vacation license" rather than ownership. The company owned two other resorts the "vacation license holder" could alternate their vacation weeks with, one in St. Croix and one in St. Thomas; both in the U.S. Virgin Islands. The Virgin Islands properties began their timeshare sales in 1973,
Much like today, sales presentations were used to sell the units. The presentation's logic was based on the fact that the cost of the license and the small per diem, compared with the projected cost of hotel rates climbing in the next 25 years to over $100.00 per night, would save the license owner many vacation dollars over the span of the license agreement. The license owner was allowed to rent or give his week away as a gift in any particular year. The only stipulation was that the $15.00 per diem must be paid every year whether the unit was occupied or not. This "must be paid yearly fee" would become the roots of what is known today as "maintenance fees”.
The timeshare concept in the United States caught the eye of many entrepreneurs due to the enormous profits to be made by selling the same room 52 times to 52 different owners at an average price in 1974–1976 of $3,500.00 per week. Shortly thereafter, the Florida Real Estate Commission stepped in, enacting legislation to regulate Florida timeshares and make them fee simple ownership transactions. This meant that in addition to the price of the owner's vacation week, a maintenance fee and a homeowners association had to be initiated. This fee simple ownership also spawned timeshare location exchange companies like Interval International and RCI so that owners in any given area could exchange their week with owners in other areas.
Methods of use
- Use their usage time
- Rent out their owned usage
- Give it as a gift
- Donate it to a charity (should the charity choose to accept the burden of the associated maintenance fee payments. See "Donate to Charity" section below)
- Exchange internally within the same resort or resort group
- Exchange externally into thousands of other resorts
- Sell it either through traditional or online advertising or by using a licensed broker (timeshare contracts allow transfer through sale; however, it is rarely (if ever) accomplished. See "Criticism" section below)
Recently, with most point systems, owners may elect to:
- Assign their usage time to the point system to be exchanged for airline tickets, hotels, travel packages, cruises, amusement park tickets;
- Instead of renting all their actual usage time, rent part of their points without actually getting any usage time and use the rest of the points;
- Rent more points from either the internal exchange entity or another owner to get a larger unit, more vacation time, or at a better location;
- Save or move points from one year to another.
Some developers, however, may limit which of these options are available at their properties.
Owners can elect to stay at their resort during the prescribed period, which varies depending on the nature of their ownership. In many resorts, they can rent out their week or give it as a gift to friends and family.
Types and sizes of accommodations
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, television area 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.