Timeshare v. Holiday Clubs – Spot the Difference

Is a timeshare the same as a holiday club? No. How do you tell the difference? Read on.

The sales pitch is sounding good. Wonderful holidays in self-catering accommodation in some of the world’s most sought after locations that offer better value than staying in a hotel, often with better amenities and 24-hour concierge service. But before you sign on any dotted lines, are you buying timeshare….or joining a holiday club? And more importantly, can you spot the difference?

Since Swiss company Hapimag brought the timeshare holiday concept to the fore in the 1960s, the industry has evolved from its original, innovative yet straightforward model – offering fixed weeks in fixed locations – to a sophisticated, sometimes points-based array of worldwide holiday options. Apartments in the Algarve, safaris in South Africa, Caribbean cruises, skiing in Switzerland and catamaran holidays off Turkey’s Aegean coast…like the old Martini ad, timeshare is really all about enjoying the best of holidays – “anytime, anywhere, anyplace.”

When the world’s biggest hotel brands – Marriott, Four Seasons, Hilton, Disney and so on – got into timeshare in the States, they elevated the industry to a whole new level and timeshare in Europe followed suit. But, a good name can be tarnished by unreputable players joining the game (ditto – financial services, estate agents insurance companies, all affected by rogue operators who spoil things for the rest of the industry). In timeshare’s case, those “players” are the holiday clubs that spring up in popular destinations, particularly the Costa del Sol and Canary Islands, proferring holidays galore which are – so their sales pitch goes – supposedly “cheaper than timeshare and less of a commitment” The stark reality is most of them neither own, nor manage any resorts of their own and parting consumers from their hard-earned money in an effort to sell them something they didn’t want in the first place, or worse, that doesn’t even exist. These are the bad boys named and shamed in the tabloids.

With summer coming, holidays will again be making headlines in the press, so how do you distinguish between a reputable timeshare operator/resort developer, and the fakes who sell fresh air?

Richard McIntosh, Chairman of the Resort Development Organisation (RDO), recommends consumers research a company before they buy and if they feel at all unsure they can contact RDO www.rdo.org or TATOC www.tatoc.co.uk, an official timeshare organisation run by timeshare owners to verify the company is bona fide.

As McIntosh explains, “RDO was established to improve representation for reputable companies in the timeshare sector, and promotes fair trading within the industry. We are a direct member organisation, with over 70 members from all sectors of the industry across Europe, including top resort developers, exchange companies, management and marketing companies, trustees, finance houses and resale companies. Our members are bound by a code of conduct, which in itself provides significant peace of mind to consumers who may be thinking of buying timeshare”.

These are some of the questions consumers should be asking:

Does the timeshare company own or manage its own resorts?

Reputable timeshare companies – They invest money in building and developing resorts. Purchasers’ future occupancy rights are protected – many through the British ‘trustee’ system.

Holiday Clubs – these “contract in” their holidays. They don’t own, or manage the resort locations, although they may give the impression they’re selling holidays and promising discounts on holidays but no – big difference.

Is there a cooling off period?

Reputable timeshare companies must offer a mandatory 10 day cooling off period. Under the European Timeshare Directive, buyers are entitled to a cooling off period of at least 10 days (14 in the UK) and the right to obtain information in a prospectus or brochure before signing the contract.

Holiday Clubs – what cooling off period?

Not governed by the European Timeshare Directive. Many fail to offer basic consumer protection such as the all-important cooling off period.

In February 2011, a new law comes into force across Europe and Holiday Clubs will be obliged to provide buyers with a 14 day cooling off period. Furthermore, the cooling off period applies annually and payments must be divided into equal the yearly instalments.

Timeshare buyers will still be protected by a cooling off period but it is extended to 14 days throughout the whole of Europe.

What are the costs?

Timeshare – consumers pay an amount upfront, to purchase a certain number of years’ worth of holidays, or perhaps a trial membership to try the programme and then buy long-term membership if they like it. Fees normally range from £4,000 to £25,000. Each year, a separate management fee is payable by every owner.

Holiday Clubs – the fee to join the club can be up to £25,000 and then on top of that, holidays need to be paid for.

If I buy, am I protected by a trade/consumer body?

Timeshare – The majority of active timeshare developers belong to the industry trade body, the Resort Development Organisation www.rdo.org, and have signed up to a code of conduct that gives purchasers additional levels of protection. RDO offers a free mediation service and an Alternative Dispute Resolution scheme to customers of its members. Consumers can also seek advice from TATOC www. tatoc.co.uk

Holiday Clubs – There is no industry body representing holiday clubs or discount travel clubs and they are not bound by the RDO’s code of conduct.
If in doubt, check with RDO before you buy.

One of the best ways to be sure about what you’re buying is to contact www.rdo.org or www.tatoc.co.uk and check, first, if the company you are thinking of buying from, is reputable. RDO’s member companies include some of the top resort developers in the world, and all abide by a special code of conduct.

The vast majority of timeshare owners are more than happy with their membership (seven million timeshare owners worldwide, with the figure rising daily). In 2009, RDO received just 50 complaints against the organisation’s member companies, almost all of which were quickly and amicably resolved and, in a reverse pattern to many industries, timeshare complaints are falling! In various surveys, timeshare owner satisfaction has been rated at around 85% and over, on average. It’s a high figure when compared with some other types of holidays, and one the timeshare industry should be proud of.

GoTimeshare Staff Reporting by Fiona Klonarides

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