Time Warp

Ken Houston
Published 07/08/1999 in The Scotsman

July 16, 1999
BUYERS of property timeshare could be paying up to four times more for their "week" or "weeks" by purchasing from a developer rather than an existing owner.

This is the claim of an organisation called the Timeshare Consumers' Association following a survey of the market in 1998.

The TCA, which insists it is an independent body funded entirely by members' subscriptions, estimates that 35,000 timeshares were sold to UK citizens in 1998, nearly 80 per cent of these into resorts in the Canaries or the Spanish mainland. Sales into UK resorts represented some 5,000, or just over 15 per cent of the total.

The TCA claims that between 65 per cent and 75 per cent of all timeshares bought in Europe during 1998 were "substantially overpriced" - in some cases buyers paying four times more than the market price for a timeshare week. The price offered by a developer of a typical timeshare week (ie one previously unsold) in the UK was Pounds 7,500 but from a reseller the price for an identical timeshare was 70 per cent cheaper at around Pounds 2,250. The price differential for Spanish resorts was slightly greater.

Yet in spite of the difference in price, the TCA claimed that in almost every case the timeshare purchased from an owner (or reseller) was identical to that bought from a developer in terms of: period of use (life of the Trust or in perpetuity); quality of the resort and accommodation; annual maintenance and service costs; and club membership terms.

Only when a developer provided free exchange membership (worth around Pounds 150) were benefits not identical.

It is also claimed that some developers discouraged their owners from selling on their timeshare to other buyers in order to maintain their own price levels.

So why were people still prepared to pay such a large premium for an unsold week or weeks from a developer when they could have the same week from a current owner at a fraction of the cost?

"It is the method of selling that is the reason," said Sandy Grey, a spokesman for the TCA, which is based at Worksop in Nottinghamshire. "A lot of the previously bad practices of timeshare selling have been outlawed in Britain but people who attend timeshare presentations abroad can still be put under a lot of pressure."

Because of the "softer sell" in British timeshare, said Mr Grey, there was slightly less of a gap between the prices charged by developers and secondhand sellers compared with Spain.

However Sue McNicol of the Organisation of Timeshare in Europe, which partly represents developers, retorted that the higher prices charged by developers were a reflection of start-up and presentational costs. "Members of the public who are new to timeshare really need to be shown exactly what is involved," she said. "If someone doesn't know the product or the resort it is very important to them to see what they are buying; they really do need the extra guidance that the developer can give them.

"Very often, those who buy secondhand are already owners of timeshare and therefore know exactly what they are looking for."

Ms McNichol said that developers had no vested interest in discouraging current owners from selling on their property weeks. Some people, she continued, sold because they faced financial problems and might not be able to meet their annual service charge commitments as a result. "I am quite sure the management would rather have a new person in there paying the maintenance charge than have someone who couldn't or wouldn't pay it," she added.