Major operators such as Anfi, Diamond Resorts Europe and Club La Costa are among the resorts being criticised by owners for cutting back services and amenities they believe were included in the membership they paid for.
Costly memberships
Many owners paid substantial sums for timeshare membership because they wanted a holiday experience that felt a step above booking through a standard travel agent. The appeal was the club “exclusivity” and the expectation of consistently high standards throughout the membership term.
On top of a significant joining fee, timeshare owners also pay high annual fees that can exceed the cost of a typical holiday. These charges are due every year, even when an owner cannot travel or does not wish to use the resort.
Timeshare companies in trouble
Over time, the wider travel industry has caught up. Today, holidaymakers can use review sites such as TripAdvisor to compare standards and value before they book.
Many complexes also no longer feel exclusive, as non-members can book the same accommodation via mainstream booking platforms. In some cases, the nightly rate can be similar to an owner’s annual fee, leaving little obvious advantage to holding a timeshare. As a result, fewer people are buying.
Across Europe, one large brand after another has stepped back. Well-known names such as Diamond, Anfi, Azure, Club La Costa, and Silverpoint have stopped selling to new customers, ceased trading, or entered administration.
Some resorts are still operating, but many consumers are reluctant to commit to an annual payment for something they could rent as and when they want, often for a similar price.
With sales to new members drying up, revenue has been hit. Owners say this is when resorts start reducing facilities and services that were highlighted when the timeshare was sold.
Cutting costs
“The fact is that these companies have had to cut costs,” says Andrew Cooper, CEO of European Consumer Claims (ECC). “We speak to angry timeshare members all the time. They are disappointed that facilities and services like the kids’ club and on-site entertainment are missing from their resorts now. There is often no welcome pack in people’s rooms or welcome meeting when they arrive. Concierge services have been cancelled and restaurants are closed.
“Many of these people signed up and paid a lot of money based on a sales presentation that promised all of these little touches whenever members came to their ‘home from home’.
“Even when it became indisputable that timeshare no longer made financial sense, many resort members didn’t complain much. They continued using the system they had become accustomed to.
“Firstly, they were used to their resort and that familiarity made them feel at home on their holidays, despite declining standards.
“Secondly (and this is why a lot of people tell us they convinced themselves of the first reason) they didn’t know it was possible to escape from the contract.”
Cutting corners
Industry experts say there is a straightforward reason standards are slipping: as active sales operations wind down, it becomes harder to justify the cost of maintaining the level of service that was once on show.
“Most people bought timeshare during a presentation on the resort itself,” says Cooper. “Because of this, the resorts needed to look amazing. Facilities and services had to be visibly plentiful and high quality. The people staying on-site had to be happy. That way, when a salesperson shows a prospect around, they see the kind of resort they would like to join.
“The high standards and great facilities were never for the existing members. They were to impress potential new members.
“The ‘welcome breakfasts’, for example, were only subsidised so that in-house sales staff could spend time with clients and attempt to upgrade them into ever more expensive memberships.
“Now that sales are suspended or ceased altogether at many resorts, the need to impress has evaporated. The remaining revenue stream is annual fees and members are contractually obligated to pay whatever the resort demands every year, whether they are happy with standards or not.
“Once new member sales slow down or stop, that’s when people start noticing towels being changed less often, rooms not being made up every day, painting and pool maintenance becoming less frequent, and so on. In short, the financial model becomes that of any budget hotel. They minimise expenses by cutting corners.”
Members escaping timeshare contracts
As the drawbacks of high costs and limited flexibility outweigh the benefits, more owners are looking for ways to get out of their contracts.
“It isn’t easy to escape,” says Andrew Cooper. “For timeshare companies, the annual fees are their only remaining revenue source. They don’t care if members want to leave; they are forcing them to stay and to keep paying for as long as the contract can be legally enforced.”
“It’s a sad fact of life that people will agree to things more easily when they are in a good mood,” says Cooper. “People signed these long, detailed contracts while they were surrounded by sea, palm trees and Spanish sunshine. Decades later, seemingly small details are still costing them hundreds or even thousands of pounds a year.”
So, is there any way out? “Yes, usually it is possible to get free from a timeshare contract,” Cooper says, “but in most cases, unless you have enough legal understanding to navigate the process (and plenty of free time), you will need expert help.
“The good news for anyone who bought in Spain on or after 5 January 1999 is that there is a strong chance your contract is illegal. If so, you can not only escape, but you will be in a position to claim significant compensation.”
Contact the advisory team at Timeshare Advice Centre today for a confidential chat with no obligation, to find out what options you have for your timeshare membership.
