THE HARD SELL: TIMESHARES AND VACATION OWNERSHIP
When I received an invitation to experience a local resort for a much discounted rate, with further cash inducements that could be used for dining or services, I understood I was the fish and their invitation was the bait to lure me to listen to a timeshare presentation. But I love great places to stay and great deals on staying there. So, I decided to go.
My invitation was to stay at the Westin Mission Hills Resort and Villas in Rancho Mirage,California, part of the Starwood hotel chain that includes Westin, Sheraton, St. Regis, W , Four Points, and The Luxury Collection. The Westin Mission Hills is a 512-room resort in a beautiful setting in Rancho Mirage. It has a spa, three outdoor pools, one with a 60-foot waterslide, tennis courts, and two 18-hole golf courses. It is a perfect setting for a desert getaway. The golf courses are championship caliber. The restaurants are first class. The Agua Caliente Indian casino is just down the road. There are great shopping areas in Rancho Mirage and nearby Palm Springs, and the outlet stores were on the way.
Timeshares have been around for decades. But, because of years of scams, the word has come into disrepute. What are sold more now are “vacation ownerships” and “travel clubs.” Timeshares built up a poor reputation – primarily because the values promised didn’t often pan out. And their sales practices were often notorious and unscrupulous. Over the years, the government has put some safeguards into place, most importantly allowing buyers to have buyer’s remorse. Despite what a salesman may say, you have a few days to cancel a contract for a full refund.
When I walked into the “vacation ownership” presentation at the Westin, I felt that an upscale company like Starwood Resorts, representing luxury properties like Westins and Sheratons, would make an honest presentation of their program.
The sales offices for the Westin were in an elegantly decorated, quiet and comfortable setting, just across from the hotel’s main lobby. Refreshments were offered and then the presentation began.
We first met an attractive, young saleswoman who asked about our travel preferences and experience and with great interest jotted them down. Then we were escorted through the sales area and shown photos of many of the luxurious Starwood resort destinations around the world for which we could possibly “trade” our vacation property. We were then shown one of the Westin Mission Hills two-bedroom vacation villas. Next, we returned to the sales office and were met by the “closer,” a much more intense, fast-talking salesman. He scribbled notes on a grease board and was so proficient in his presentation that he wrote perfectly legibly upside down on a notepad in front of us. He was intent on selling us a one week timeshare or vacation ownership – not at the Westin Mission Hills but at the Westin Maui. The presentation detailed how, with advanced notice of nine months to a year, we could “virtually” but not completely guarantee a stay in the very Maui Westin condo he wanted us to purchase. Or, we could exchange our time for another vacation site in the Starwood chain. Or, we could place our time within a pool of timeshares available worldwide on Interval International, a timeshare exchange network. (RCI or Resort Condominiums International is another timeshare exchange network.). Or, we could bank the value of our “vacation ownership” for a certain number of “points” for a future condo exchange within the Starwood system or receive a different number of “points” to buy stays at Starwood hotels. Although the price of the timeshare was fixed, the “closer” explained that if we bought immediately, he would throw in more thousands of points which could be exchanged for extra stays in their hotels. There was no time to peruse a contract or review the point system. Sign up now or lose those extra points forever, he pressured. And, of course, the price of the timeshare could go up tomorrow. When the “closer” didn’t close the deal, we were ushered to a final salesperson – a mellower saleswoman. She played good cop to the first salesman’s bad cop, maligning his high pressure techniques. And we were offered more enticements.
All in all, this “reputable” company did everything in the book to fit my description of unscrupulous sales practices.
(1) They enticed me to visit a place that wasn’t for sale. While their invitation was to visit the Westin in Mission Hills and see their villa vacation sites, none were available for sale there. They wanted me to purchase one of their “similar” villas in Maui or Cancun, sight unseen. And, the Maui property, we were told, had “only one villa left.” “It’ll be gone in the morning,” our salesman admonished, “and then you’ll have to wait for the completion of the second phase in 2008.”
(2) No written contract was ever presented. Every piece of information about costs and values was presented on a grease board or scribbled on a sheet of paper. I never saw a contract that indicated the price of the property for sale. I never saw a pre-printed document that provided a clear description of exactly how many points were allocated for the property they were selling. And I asked to see one.
(3) The costs of yearly maintenance fees were vague and there was no explanation of how much or how often they could rise.
(4) They described future benefits that could not be verified. They made suggestions that new and better properties would be coming available to make their “exchange” program seem even more valuable.
(5) Their sales techniques were high pressure. While they indicated that the price was fixed, they offered one time only “incentives” that had to be accepted at that moment or lost.
(6) They gave their own first person testimonials. They indicated that they owned multiple timeshares as did their family members and that they had either exchanged them for fabulous vacations elsewhere or sold their timeshare weeks for huge profits.
Slick but sleazy is the perfect description for their sales presentation.
After this distasteful experience, I investigated the world of timeshares more and have come to several conclusions:
Unless you plan on using the actual place you buy year after year and not re-selling, this may not be a good investment.
Unless you are sure that the company you are buying from will remain solvent, in business, and not sell off the particular property you’ve bought to some other entity in the future, this may not be a good investment.
Unless you have remarkable patience in dealing with middlemen in trading your “timeshare” for another place and another time and adjusting your vacation desires to those availabilities, this may not be a good investment.
Timeshares rarely appreciate in value. Prices quoted by on site sales people have to include the costs of enticements, incentives, and broker commissions. Resales are often as little as 50% of the purchase price.
Both Marriott and Starwood properties allow you to resell your timeshares, but they don’t honor “points” for the new owner. While that may be an inducement to deal with them, the comparative value of points that can be used to exchange your vacation week for hotel stay days is exorbitantly priced for the relative value of a hotel room.
You should also know that if you buy a timeshare, resales may be difficult. Starwood is interested in selling timeshares in their vacation properties and, once completely sold, they have been intent on building or acquiring new ones. They will not assist in resales of “vacation ownerships” of their properties. You have to sell your property on a secondary market – through print ads, the internet, or a timeshare real estate agent.
Also, don’t be reassured by the fact that Marriott and Starwood are brand names in the hotel and timeshare business. The resort that you bought or plan to visit may not be part of the chain in future years. Resorts often change management and ownership. A Marriott one year may be a Hilton the next. A Sheraton may become a Four Seasons. A name brand is not a guarantee.
These hotel and resort chains are clearly in the business to make money. By selling off condominiums by the week instead of whole, their profits must be enormous. Starwood was selling one week of ownership in a two bedroom Maui condo for $44,900 with yearly fees for that week estimated at $1400-$1800. Assuming they sell 52 weeks of a year, that would mean each condo would earn them about $2,500,000 and they would have $75,000 per year to maintain it. If they can do that, the best investment to make is Starwood stock.
Buying a timeshare may be right for you if you find a property that you like and plan to revisit with your family year after year. It may be right, if you are flexible in your vacation plans and can adjust to dates and destinations that would not have been your first choice. Buying a timeshare on the secondary market, however, can save you a lot of money. Websites like Redweek.com have good information on re-sales and timeshare rentals. I would also suggest you stay at a destination first before buying there. The best discovery I made after suffering my timeshare presentation was that many timeshare owners put their vacation properties for rent on the open market with rates far better than equivalent stays in hotels or condos – sometimes for little more than the yearly fees you would pay if you had bought the timeshare.
As for the Westin Mission Hills, it’s a nice resort. Accept their offer for a discount stay, a complimentary dinner, maybe a massage or a round of golf, and sit through the sales pitch. Sometimes we have to suffer a little to enjoy the pleasures of life.