Simply put, timeshare is joint ownership of a holiday property. Traditional timeshare buys you exclusive use of a specific property for a specific week. This is perfect if you prefer to take holidays at the same time every year. Your holiday accommodation is yours and you don’t have to worry about it being unavailable. With a points-based system you would join a club,  pay an annual membership fee and buy points to swap for nights at resorts. This model gives you more flexibility over when and where to go.

Timeshare has come a long way since the first resort was developed in the 1960s in Europe. Today it is a worldwide booming industry that provides quality holidays for over 20 million people each year at more than 5 400 resorts in over 121 countries. In South Africa, close to 500 000 families enjoy annual holidays at over 160 resorts located in the most sought-after tourist destinations across the country.

How It Works

A timeshare is a property with a divided form of ownership or use rights. These properties are typically found in resorts, in which multiple parties hold rights to use the property and each owner of the same accommodation is allotted their period of time. Timeshare units may be sold as a partial ownership, lease, or “right to use”, in which case the latter holds no claim to ownership of the property.

In the past, timeshare buyers were typically locked into one week at a single property. In recent years, many timeshares have implemented a point system that provides more flexibility regarding the type of vacation property and the buyer’s choice of vacation days.

The one-time initial purchase price varies as it will depend on the type of timeshare you choose to suit your holiday needs –  whether its during school holidays or in an off-peak season, the size of unit and the location, etc.

Depending on the type of sale agreement, your holidays are either pre-paid in perpetuity or for a fixed number of years. The cost benefit is securing your future holidays at today’s prices, which over the long term proves cheaper than other holiday accommodation rates that escalate each year with inflation.

An annual maintenance fee or levy is charged to safeguard your holiday property and resort against the wear and tear of time, which ensures that you arrive to a fully functional, fresh, modern and inviting timeshare accommodation.

Bear in mind that timeshare is a use-product, so the real value comes from taking regular holidays. It should never be viewed as a financial investment or to generate income.

During the 1980s and 1990s timeshare owners in South Africa wanted more flexibility, which led to timeshare exchange systems being introduced. This gave owners the ability to exchange their week with other timeshare weeks that had been “banked” by other owners. To ensure that the exchange was fair and on a like for like basis, each timeshare week “banked” with the exchange system was graded.

While exchange systems improved timeshare owner’s ability to swop weeks, no assurance could be provided as to what other timeshare owners would bank with the exchange system. This then led to the more recent points system form of vacation ownership.

There are several variations, but in general Points Clubs acquire a variety of timeshare weeks from a spread of resorts and assigns each week with a points value based on the apartment size, quality, location, time period and demand. The consumer purchases points from the Club, which then grants membership and the right-of-use to any of the timeshare weeks held by the Club. This model provided a much larger variety of holidays options, including short midweek breaks in a variety of apartment sizes and seasons and included the ability to save points to be used for longer holidays every second or third year.

Types of Timeshare

Traditional Timeshare

Fixed Week

In this model you own the same week every year at a specific “home” resort. Timeshare weeks (week 1 to week 52) make it easy to secure your holiday week of choice.

Foating Week

This can be any week reserved for the timeshare owner during a certain season. Seasons are predefined as ranges of weeks (e.g. weeks 17-24) and vary from resort to resort.

Flexi Time

Similar to floating week ownership, however with Flexi week you need to choose from a predetermined set of weeks within a particular ‘season’.

Fractional Ownership

Fractional ownership is split between fewer owners which allows owners longer and more frequent holidays throughout the year.

Pooling Schemes (newer version of timeshare)

Points System (or Points Clubs)

Points are purchased and used as currency to reserve timeshare accommodations of various sizes, during different seasons and for varying lengths of time. In some instances, the points can also be used for other vacation products such as airfare, hotel stays and car rentals. Most clubs in South Africa operate on a points system.

Vacation Clubs

Rather than purchasing timeshare in a certain size of unit at a particular resort, club members purchase the opportunity to use a variety of timeshare accommodations at various resort locations, usually within the developer’s chain of resorts. Most clubs in South Africa operate on a points system, but not all. For example, Sun City Vacation Club.

Types of Agreements

Deeded Agreements

Deeded agreements can be for fixed or floating weeks. These allow the timeshare owner to use their interval in perpetuity, just like buying a house. Under this agreement, the owner may rent, sell, exchange or bequeath the vacation interval.

Right-To-Use Agreements

These agreements can be for either fixed or floating weeks and are also commonly part of vacation club or points-based memberships. These stipulate that ownership of the resort remains with the developer. The timeshare developer gives the purchaser the right to use the specified resort accommodations for a certain number of years, usually ranging from 10 to 50, after which all rights return to the developer.

Why Choose Timeshare?

If an annual holiday is a key priority in your life and you love staying in spacious accommodations in sought after locations with family and friends - then you are the type of person timeshare was created for.

Home-like accommodation

Timeshare accommodations are designed for space and comfort, which is key in creating a quality holiday experience when family and friends gather together. The use of a fully equipped kitchen, a lounge and dining area, a private braai and most of all bedrooms allows for enough space for everyone to unwind and privacy when you need it.

On-site entertainment

Depending on the size of the resort, activities include multiple swimming pools with some heated, Jacuzzis, Day Spa’s, waterslides, miniature golf, safari excursions, mountain biking, horse riding, hiking trails, fishing, water sports, tennis and squash courts, games rooms as well as restaurants, bars and convenience shops all conveniently located onsite.

Professionally managed properties

Reception desks, security, housekeeping and resort staff are managed by recognised hospitality brands to ensure there is always someone on hand to ensure a quality holiday experience.

Sought-after locations

Timeshare resorts are located in the most popular family-friendly holiday destinations in South Africa and in the world giving you the option of where you actually want to holiday. There are timeshare resorts to cover all types of holidaymakers from the beach lover and outdoor adventurer to the avid golfer and those more inclined to take in an area’s cultural offerings.

Cost effective

Not only can you lock in future holidays at today’s prices, but there are also other hidden cost savings thanks to the home-like accommodations. The use of a kitchen saves on eating out, access to a washing machine saves on laundry costs and allows you to pack lighter, plus the onsite entertainment means you don’t have to leave the resort.

Value of Timeshare to the Economy

(Sourced from a report commissioned for the American Resort Developers Association)
  • 40-year-old industry
  • Timeshare comprises:
    • 63% of the beach apartments in Umhlanga
    • 60% of the accommodation in the Drakensberg
    • 70% of the bush/safari apartments in Hazyview
  • Hospitality brands in timeshare include Tsogo Sun, Southern Sun Resorts and Legacy Hotels and Resorts, amongst others
  • Over 160 resorts comprising around 10 000 homes and apartments or over 7.5 million room nights
  • The industry provides employment for roughly 30 000 people
  • Resort occupancy all year-round are on average between 85% to 90% for beach properties and around 70% for inland resorts
  • Timeshare owners spend on average 6.5 more days on holiday than their non-owner counterparts
  • 64% of owners say timeshare has increased the amount of time they spend on holiday
  • Direct economic output $ 57 billion
  • Total economic impact, direct and indirect: just under $146 billion
  • Total number of resorts: 5357, in 121 countries across the globe
  • Total number of owners: approximately 22 million
  • Total accommodation units: 527,000
  • Sales volumes $19.7 billion
  • Weeks/points-equivalent sold: 1 million
  • Occupancy levels: 79.4%
  • Global hotel chains in timeshare include Disney, Hilton, Hyatt, Wyndham, Four Seasons and Marriott and Ritz-Carlton, amongst others
  • In the U. S.:
    • The size of the industry is $10.5 Billion – compared to the $9 billion in revenue for Major League Baseball and the $8 billion music industry
    • 9 million U.S. households own 1 or more types of timeshare (weeks, points, fractional and/or private residence club)
    • $11.29 Billion is the amount spent by timeshare owners & guests during timeshare stays of which approximately $2.96 billion is spent onsite at resorts and $8.33 billion was spent off-site in the communities where the timeshare resorts are located

FAQ

What is shared vacation ownership?

It is essentially purchasing the right to a holiday one week every year at either a specific resort, or by making use of flexible options a variety of resort options. Your holiday accommodation is paid in advance, providing you and your family with a lifetime of luxurious holidays at today’s fixed, low rate.

What is the difference between conventional holiday ownership (timeshare) and Points clubs?

Conventional holiday ownership (timeshare) ownership entails the payment of an upfront sum for a fully furnished accommodation plus yearly maintenance fees. Depending on the agreement, owners either own the rights to a specific, fixed week or the rights to a floating arrangement where you can visit for a week within a period each year.

Points Clubs are a newer variation of the timeshare  model. Instead of purchasing the rights to a specific unit, club members pay an upfront sum to purchase a number of points, which can be redeemed for different holidays each year. The number of points translate to different types of holidays based on the desirability of the resort’s location and the time of the year. In addition to the purchase of the points, maintenance fees still apply.

What are maintenance fees?

This is the annual fee used to cover the operating and maintenance costs of the property, thereby ensuring quality holidays. Bear in mind that maintenance fees will be subject to normal inflation rates, but not to any form of profit.

 

What should I consider before purchasing?

First consider your finances and your holiday lifestyle, and then find a product that matches your needs. Do you want to return to the same favourite holiday spot each year and build a legacy of holiday memories for your family, or do you prefer the flexibility of exploring new destinations? This will determine whether you purchase a fractional product or opt for the points-based system.

What is exchange and how does it work?

Through exchange companies, such as RCI, you can trade your week at your resort for another owner’s week at a different resort. Owners deposit their weeks with an exchange company and can then select from thousands of comparable weeks deposited by other owners within the exchange network.

What if I can’t use my vacation ownership (timeshare) one year?

Depending on your product purchased, there are a couple of options:

  1. You can put it up for rent through your resort.
  2. Give it to family or friends to enjoy.
  3. Deposit your week with an exchange company so that you can use it during a different time and location.
  4. Points based products can also be accumulated over a specified period of time.

Can I cancel my contract?

Yes, subject to the cancellation terms and conditions of your signed agreement.

Who manages the maintenance of the resort?

The resort is usually first built by the developer who owned the property and made all the decisions regarding the resort until almost all the unit-weeks were sold. Once the developer decided it was time to move on, a Body Corporate is formed with a Board of Directors who then have the decision-making power of the resort to ensure that it maintains its high standards of excellence.