Why timeshare companies make it so difficult for members to leave

The latest news from Timeshare Advice Centre and European Consumer Claims.

Timeshare memberships are sold convincingly as solving all the prospect's holiday needs.

So why do they need to tie owners into such ironclad contracts?

Expensive but better

Expensive things are better, right? This loose rule-of-thumb certainly seemed to apply to timeshare memberships bought in the 80s, 90s and early 2000s.

Fed up with arriving at disappointing, regular holiday accommodation, people willingly bought timeshares which guaranteed higher quality at exclusive resorts. No more would they have to rely on flattering pictures in a glossy travel brochure.

It was expensive to join a timeshare resort, sometimes tens of thousands of pounds. And even when you were a member you still had to pay to use your membership every year. The yearly 'maintenance fee' was generally around the same cost as a regular hotel of the same standard.

The buyers accepted the deal because, well, better things cost more.

Foresight?

Did timeshare companies understand that their advantage in being able to guarantee high quality would eventually be eroded by the innovations of the rest of the travel business?

Certainly the membership contracts prospects were convinced to sign appeared to reflect a cynical perspective on the subject. Timeshare owners had to agree to be legally bound to pay every year, whatever amount the resort told them to. They were tied into doing this for decades, sometimes forever. It didn't matter whether they took a holiday that year or not, they had to pay regardless.

It didn't matter that the wider holiday industry soon caught up and overtook timeshare memberships in terms of convenience and value. It didn't matter that timeshare resorts are no longer exclusive, and non-members can book to stay by paying around the same money as (sometimes less than) the member pays in annual fees.

The resorts made sure that you are contractually obliged to pay every year, regardless of the value (or lack of) the membership provides.

Revenue

As with most things the timeshare business world, the reasoning predictably boils down to money.

"With apparent utter cynicism, the timeshare resorts boxed clients into the contracts, to protect themselves against competition," believes Greg Wilson, CEO of European Consumer Claims.

"With the advent of the Internet and sites like TripAdvisor, suddenly holidaymakers no longer needed an expensive timeshare membership to guarantee high quality.

"Also, pretty much no timeshare resorts are exclusive these days. Ordinary holidaymakers can book accommodation in them through sites like Booking.com, and they usually don't pay any more than the timeshare owners have to pay in annual fees."

"Any other type of business would be forced to compete with their competition, or to accept defeat and close down. Timeshare companies don't have to do either. They have engineered an imbalanced situation where they literally don't need their customers to be happy.

"Because timeshare is no longer a competitive holiday system, people in Europe just aren't buying memberships. This is a huge amount of traditional revenue lost for the resorts. The only income stream they have left is the maintenance fees, and they will enforce those whether their members are happy or not, whether the members can afford it or not, even whether the members actually use the resort or not (as we saw during the pandemic)."

True motivations revealed

Every timeshare owner remembers how eager to please their resort and representatives were when they were still selling and upgrading memberships. Nothing was too much trouble. Clients were lovingly promised a product that would solve every holiday need now, as well as in the future.

Once the joining fee was processed, and after all opportunities to take more money from the member via upgrades had been exhausted (often due to sales operations closing down) people finally began to understand the hard reality of the relationship with their resorts.

The overriding motivation for European timeshare companies now is to drive in the annual maintenance fees that their members are legally obligated to pay. If you happen to have an enjoyable holiday that is a bonus, but by no means their priority.

If a member asks to leave, the timeshare company will usually flat out refuse. It doesn't matter what the reason is. A member could be terminally ill and many resorts stand firm. Some resorts will even enforce the maintenance fees beyond the death of a member.

It couldn't be clearer. Their interest is not in providing great holidays every year.

Their interest is in being paid every year.

Help. I want out of my contract

The perennial excuse from timeshare companies is: "We need to maintain our resort whether you holiday or not, so we need to charge you every year."

The obvious counter argument is: "All hotels need to be maintained. But they don't charge people who are not holidaying in order to do so. They market themselves well enough to keep rooms occupied and pay their bills that way."

If you are stuck in an unwanted contract and want help or advice about your options, get in touch with our team at the Timeshare Advice Centre.

If you fit certain conditions and were sold illegally, you may even be entitled to financial compensation.