Timeshare exchange companies provide a way for owners to leverage their unused weeks. Interval International and RCI are the dominant players in this market, allowing owners to deposit their weeks and then “trade” them for stays at other timeshare properties.
Timeshare owners often face the challenge of needing to modify or cancel previously booked vacations. Even when they can’t utilize their vacation time, they’re still obligated to pay annual maintenance fees.
Similar to real estate, cancellation and modification policies vary depending on the individual resort chain. However, timeshares introduce additional complexities, particularly concerning whether you own points or weeks. If you own weeks, exchange companies add another layer of management. As timeshare attorneys have explained, these exchange companies play a significant role.
The timeshare exchange market operates distinctly from the traditional hotel sector. This is due to factors such as advanced bookings, limited availability, oversold units within point systems, and a surplus of resort unit owners and exchange companies. A universal, one-size-fits-all vacation product often fails to satisfy all timeshare owners, yet remains a profitable business model for resort developers, who generate substantial revenue from new memberships and maintenance fees from an oversaturated customer base.
Timeshare Ownership and Recurring Costs
The most common expense associated with timeshare ownership is the maintenance fee. This annual fee covers property upkeep and is typically paid in a lump sum, though some resorts offer monthly payment options. Maintenance fees vary by location and are subject to increases.
Another unexpected expense is property taxes, which resort developers often fail to disclose to buyers. It’s crucial to inquire about taxes when considering a timeshare purchase, as they are standard across the industry. Additionally, some resorts impose a timeshare tax per booking, which can range from $40 or more per night.
Unexpected Utility Charges
Many timeshare owners assume that utilities are included in their maintenance fees. However, this is often not the case. Electricity, gas, and even water usage during your stay may be billed separately. For those who run air conditioning units consistently, these charges can be substantial.
The Unique Nature of Timeshare Exchanges
Timeshare exchanges differ significantly from the traditional hotel market due to advanced bookings, limited availability, oversold units in point systems, and an abundance of resort owners and exchange companies. Timeshare memberships are not a one-size-fits-all vacation solution. However, with careful consideration, they can be a profitable business model for both consumers and owners.