Consumer IQ

Hotel’s Free, So What’s the Catch? Timeshare Pitches and Their Perks

Should you let a sales pitch pay for your vacation? Only if you have nerves of steel and are very comfortable walking away from aggressive sales people.

Not a new phenomenon, but picking up speed as the economy limps back to life, time shares and time shares sales pitches are once again ubiquitous with summer vacations. From Hawaii to Lake Tahoe to the Sanibel Islands, sales folks are doing their best to talk you into the vacation deal of your lifetime. Let’s discuss.

Timeshare Vs. Time Interval

Timeshares, and their close cousins, time intervals, are methods that allow you to buy-in to a consistent vacation option each year. With a time share, you own the “right to use” a class of unit during a specified season (high, medium or low), and you make an annual reservation with the operator for a unit of the same general specifications that you bought into, but it will not be the same unit every year, nor will the dates be the same. In this situation, you are at the mercy of the market and the operator for when you can occupy and what you will occupy.

With time intervals, you own the property with a deed to a specific unit at a specific date each year. You may also own a fractional interest in the land under the building (the “fee”) and an exclusive right to use certain areas on the property. And you can always count on the same vacation at the same time in the same place every year. These units generally offer owner storage so you can keep personal items onsite for year-to-year use.

With both time shares and time intervals, the unit that you purchase will be fully furnished – furniture, fully equipped kitchen, linens, and scenic pictures on the walls.

Surviving the Sell

Now to the pitch. Announcements are everywhere proclaiming free activities, reduced or free hotel rooms, free consumer electronics and a guarantee to extend your vacation. Reading the fine print indicates attendance at a 30 minute to 2 hour special presentation as part of the deal, generally referred to as the sales pitch. If married, both spouses are usually required to attend. The sales folks are professionals, often paid on commission, and they are there to get you to buy a time share. Participants describe these presentations as intense and stressful, many vowing never to return. Others consider the presentation part of “playing the game” and understand that it is a means to an end, the end being the promised free gift.

If you have decided to attend the presentation and claim your freebie, better brush up on the ways to resist a time share sales pitch.  Once there, don’t ask questions and avoid providing personal details. When you ask questions, the sales person considers that to be showing interest and if you plan to get out of there without making a purchase, you need to stay under their radar. Are you planning to bring your kids? Might be a good way to avoid a strong-arm sales tactic, but you should be prepared with food, activities and electronic babysitters to keep them busy.

If You Do Buy, Consider the Costs

Assuming you made it through the presentation and are actually considering the purchase of a timeshare or interval, keep in mind there are various fees associated with the unit that might be glossed over during the presentation (or you might have missed them in your lust to own a bit of luxury real estate). First is the initial purchase price, which can be anywhere from $2000 to $35,000 per week, depending on location, prestige of the development (AAA 4-Star vs. 1-Star) and unit category (size of unit plus season of the year). New time share units at the Westin Kaanapali in Maui go for about $35,000 for one week. One bedroom, two bath time interval re-sales at the Whaler on Kaanapali, Maui, (an older development down the beach) go for approximately $38,000 for a 2-week period; smaller studios run about $19,000 for the same period.

Developments also must, by law, collect an annual fee to cover normal day-to-day operations including management, utilities and maintenance; as well as a capital reserve fee, also required by law in most states, to provide the resort with cash to replace furniture and furnishings, and for major items such as roof repair, exterior painting, and upgrades to maintenance systems and refurbishment of common areas. These fees range from $450 to $2500 a year. Be cautious when considering a foreign time share purchase, as these additional fees may be more fluid and not up to US regulations.

And let’s not forget the special assessment, for projects that may not be covered by the above two fees, including major renovation expenses or a component of the property that needs to be replaced. In addition to being assessed based on the percentage ownership, you may not be able to stay in your unit because of construction timing.

After all this, why would you actually consider purchasing a time share or interval? Well, the best reason is because you love the location and would like to come back every year, or because you become enchanted with the idea of joining a time share trading association and swapping your week for exotic locations like Paris or Puerto Vallarta. It is this latter concept that occupies the majority of the sales presentations, and something to watch out for. And if you are considering attending a sales presentation just to get the free nights of vacation, factor in the value of your time (your hourly wage) and if the stress and bother of the presentation is really worth the effort. Wouldn’t you rather be on the beach instead of just watching a slideshow and touring properties?

Gudrun Enger is a travel, food and lifestyle blogger based in the San Francisco Bay Area. Find her @kitchengirl on Twitter.