Take a trip? Not likely at the moment.
With tourism nearing a standstill, it seemed like a better idea long-term commitment to an annual vacation spot before a global pandemic restricted travel and caused a sudden spike in unemployment leaving many Americans with less disposable income .
Now, some timeshare owners, who are often baby boomers and are at high risk of completing Covid-19, want out of their units and financial obligation.
But that’s not always that easy.
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Although there are different models, most timeshare owners buy either a fraction of the property at a vacation destination or points to use on a property. In any case, there are annual maintenance fees associated with the purchase of a device during the contract period.
In addition, many owners finance their timeshare rather than paying for it directly, which means loan payments may be made in addition to annual fees. The overall crime rate for timeshare loans in 2019 was 12.8%, compared to less than 4% for traditional mortgage loans.
In 2019, the price of a typical timeshare with a week’s vacation time was $ 22,942 plus maintenance fees of about $ 1,000 per year.
Timeshare ownership had increased before the pandemic. Over the past five years, sales volume has increased by an average of 5% per year.
Major resorts and developers like Marriott Vacations Worldwide, Disney and Club Wyndham have also continued to build units, with 865 timeshares added in 2019, up from 588 in 2018. According to the latest data, an additional 643 units were planned for 2020 by the American Resort Development Association, a trading group that represents the timeshare industry.
Last year, Marriott Vacations Worldwide announced the construction of a new property of 24 two-bedroom villas in Costa Rica and a second in Bali.
Timeshare sales for the new Marriott Vacation Club in Costa Rica are slated to begin in January 2021.
Source: Marriott Vacations Worldwide
“We’re full speed ahead,” said Ed Kinney, a global vice president of the company, which owns the Sheraton, Westin, Ritz-Carlton and St. Regis brands. “We were very pleased with the speed with which we were able to respond and the willingness of our guests to return to our properties.”
Before the coronavirus crisis, 85% of timeshare owners regretted their purchase, according to a study. That number only increases during the pandemic, said Mike Kennedy, the CEO of KOALA, a vacation rental website specializing in timeshare.
“Timeshares are great when you travel and take advantage of them, when not they are a massive burden,” he said.
How to deal with a timeshare in a pandemic
Ask for a break: Depending on the terms of the contract, you may be able to rent your timeshare for a year or two while you are not using it or defer payments. “First, call your developer or go to the resort and ask about the options,” advised Jason Gamel, CEO of the American Resort Development Association.
Planning a Post-Pandemic Vacation: Many of the major timeshare companies have waived reservation and cancellation fees due to Covid-19, so owners who did not use their timeshare in 2020 can redeem their points and double them in 2021.
Take a trip: For example, if you don’t want to use your timeshare in Hawaii, you might want to trade or trade it in for a destination within driving distance like Williamsburg, Virginia or the Rocky Mountains, Gamel suggested. The accommodations often have a fully equipped kitchen, separate bedrooms and a living area, which makes them particularly attractive for socially distancing oneself from other resort guests.
Transfer ownership to your brother or best friend: One of the biggest selling points of a timeshare is that it can be given or gifted to friends or family, and it still is. Someone in your circle may be interested in collecting the annual payments in exchange for a specific vacation.
Take a look at the hardening aid: If you are under significant financial stress due to Covid and are unable to cover the costs, contact the developer or lender for help, advised Gamel. “They may work with you to defer payments or lower property levels to reduce payment or financial liability.”
Do you want to get out of your timeshare? Here is how
If you’re looking to get out of the way, the easiest thing to do is to check whether your developer or resort operator will take over the timeshare for free or buy it back. In return, some even offer maintenance-free use for a few years.
Alternatively, you can sell it yourself on a website like Timeshare Users Group or hire a timeshare resale company to help unload the property for a fee. For homeowners who still owe money on their loan, this is one of the few ways to make up some losses, especially if the unit is in a desirable vacation destination like Florida.
However, according to Gordon Newton, author of the Consumer’s Guide to Timeshare Exit, there has been an influx of scammers targeting owners who cannot use their timeshare due to the pandemic.
If you’re looking to hire a third party, check the Better Business Bureau to make sure they have a trustworthy track record, he said.
The American Resort Development Association also oversees Responsibleexit.com, which offers owners a number of vetted, and often free, exit options.
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