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How Timeshares Work

timeshare cancellation

How Timeshares Work

Timeshares were created to give people the opportunity to own a piece of a vacation resort property, and it was originally done by splitting up condominium units into specific blocks of time. Usually this would be for 50 one week intervals per unit. For quite a few years, this system worked in theory and practice. Property owners could come and enjoy their vacation for their fixed time each year, and they didn’t have to worry about the upkeep of the property since that was taken care of by the resort.

However, over the past 15 years or so, timeshare ownership has dramatically changed. With the internet’s increased popularity, consumers now have numerous choices and this applied to the vacation industry as well. Timeshare owners were looking to expand their vacation choices beyond their fixed week and fixed location, and the expanding timeshare vacation industry was happy to accommodate vacationing consumers.

Timeshare owners were offered a new option, trading in their deeded ownership in exchange for receiving an annual quota of “points” which were redeemable for resorts stays at a number of resorts owned by the same developer, many of whom have been acquiring more resort locations to grow and to accommodate both their former timeshare interest owners and new vacationers as well.

Nowadays the timeshare “owner” does not purchase actual real estate so much as he or she gains entrance to a resort complex and/or chain offering more flexible time periods and locations. This newer form of resort interest is sometimes referred to as a ‘right to use’ ownership, although, as noted herein, the so called ‘right to use’ is clearly a restricted right, and the continuing use of the term ‘ vacation ownership’ is becoming a bit of a stretch as well.

Just as owning an actual time divided piece of real estate at a specified location has its downsides, over time this newer form of vacation ownership also has revealed some of its disadvantages as well, which perhaps were not immediately evident to the former timeshare owner who chose to convert their property ownership to something more comparable to a ‘vacation club’ than actual resort property ownership.

Timeshare Changing the word Chance into Change

While the newer ‘right to use owner’ still has an annual maintenance fee obligation as he or she did as a deeded owner, they no longer have an ‘automatic’ fixed week that they can plan their next vacation time around. Now, they are contractually required to contact a centralized reservation center and attempt to reserve their chosen time and location. Additionally, they are encouraged to attempt that reservation placement around eleven months beforehand, to have a fair chance to see their first choice become reality!

If that seems like a lengthy amount of lead time, perhaps difficult to commit to that far in advance, consider that one of the roadblocks to booking a reservation is that you are now competing not only with other timeshare owners, but in many instances, also with the general public who simply access the relevant resort website and, without any owner or member relationship with the resort, are able to secure a booking, and from a priority standpoint, it seems in some situations that members of the public may receive a booking priority over the owner/member!

From an economic perspective, it appears that whatever advantages timeshare owners have had in the earlier days of timeshare ownership, the folks coming on board more recently arguably will spend more for their resort than a member of the general public who utilizes a readily available travel app such as Travelocity, Expedia, or even going directly to the website of the particular hospitality brand being referenced, like Marriott, Hilton, or Holiday Inn. Indeed the competition created by the internet, has made packaged resort stays quite economical to the general public.

To test this concept, timeshare “owners” should compare their annual maintenance fee resort obligation to the web advertised price of a six or seven night stay for anyone booking on the site. To the extent that the cost to stay is roughly equal to the cost of their annual maintenance fee and further given that there’s rarely a way to recoup the initial purchase price given the absence of a re-sale market, it makes better economic sense to be an internet guest than an “owner” in many instances.

As to any remaining advantages of being a timeshare owner these days, given the absence of any advance assurance that you can reserve “your” unit at your convenience, or even recoup any purchase monies initially paid at time of purchase upon attempted resale, it’s difficult to see many advantages to resort ‘membership’. In fact, the downsides to ownership/membership continue to include that pesky ongoing and generally increasing annual maintenance fee obligation even when you are unable to secure an annual booking that meets your time and other requirements. It’s hard to reconcile the fact that as an ‘owner’ you must pay an annual maintenance fee but with no assurance that you’ll be able to vacation at your choice of time or location.

This article is for informational purposes and is not intended as legal advice. If you feel you need a timeshare attorney, you should seek out a professional who can assist you with your individual ownership issue.


Led by timeshare attorneys Michael D. Finn and J. Andrew Meyer with over 75 years experience, the Finn Law Group is a consumer protection firm that specializes in timeshare related matters. Contact us for a free consultation today at 727-214-0700 or email us at [email protected].

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