The New Vacation Revolution

Your luxury timeshare vacations are the result of many companies working together. The list includes the resort developer, management company, and exchange agency. As they are each independent, it is not possible to group their costs together, and thus timeshare owners typically pay fees to each of them as necessary. Although these fees can seem overwhelming to new buyers, you will see that it makes perfect sense.

The resort developer is the company that builds the timeshare resort. This is not easy to do. It involves market feasibility studies, buying the land, financing the property, designing and developing the resort, and the many legal requirements to subdivide each condominium-style unit into intervals. Then they must issue deeds for each interval.

When you purchase a timeshare, the first step is the purchase of one of these deeded interval from your resort developer. Based on your needs, the developer may offer financing which lets you spread the cost of this purchase into convenient monthly payments. This transfers a share of the resort into your name, much the same way as buying shares of stock make you the part owner of a company.

As the owner of a deeded interval, you own the right to use your assigned unit each year forever. This can be passed in a will, allowing multiple generations to use the timeshare after its purchase. You purchase the deed based on the resort, season, and unit size you wish to own.

Forever is a long time, however, and it takes the work of many people to operate a resort. In addition, the company that built the resort may not always be in the business of managing a resort. They may not have the resources or experiences to handle the reservations and exchange for thousands of owners. For this and other reasons, some developers elect to find a separate management company to handle day-to-day resort operations.

From the reservations office to housekeeping, from the concierge to the groundskeepers and maintenance staff, timeshare resorts may employ hundreds of staff for resort operations. Some of them operate in the back office, handling everything from the computerized reservation system (and interfering with exchange agencies such as Resorts and Condominiums International) to payroll.

In addition to expenses such as property taxes, utilities, and room renovations, the resort’s management company needs to pay the salary of every employee. After all, how could you enjoy the resort if all aspects of these day-to-day operations were not running smoothly?

When you stay at a hotel, the per-night rate goes towards the developer’s expenses and the management company’s operational expenses. As a timeshare owner, you enjoy a discounted cost of accommodations because you have already purchased your share of the resort from the builder.

The day-to-day expenses for resort operations must still be paid, however. It is not possible for you to pay this cost when you initially buy the timeshare because the extra cost would make the sale price much higher, and the developer has no way of knowing what it will cost to run the resort in 20, 50, or even 100 years. As a result, these costs are divided amongst all owners each year, while the developer pays the cost of all intervals not yet sold.

This cost, typically referred to as the “annual maintenance fee”, is paid by owners to the resort’s management office each year. Because the resort needs this fee to cover the cost of day-to-day operations, most resorts will not let owners check in to their suite until they have paid their maintenance fee for the year.

Since it is affected by changing takes rates, employee expenses, the cost of electricity, and even the cost of cleaning supplies, your resort’s annual maintenance fee may change from one year to another. Your resort’s accounting office (which is another expense, by the way) will let you know if there are significant changes.

In the event of an unforeseen natural disaster, where cost of repairs exceeds insurance coverage, or if the management company needs to do major repairs or renovations, owners may need to pay their share of the cost. This doesn’t happen very often. However, as an owner, it is part of your commitment to your timeshare resort.

If you want to travel around the world and visit resorts not directly partnered with your resort’s vacation club, you will need to use an exchange agency that specializes in timeshare exchange. As the world’s largest timeshare exchange agency, more resorts are affiliated with Resorts and Condominiums International than any other exchange agency. By affiliating with RCI, a resort’s owners can travel to their choice of thousands of other resorts around the world.

With complex computer systems that manage timeshare exchange inventory, toll-free customer service lines, and many other services, exchange agencies offer a wonderful opportunity to every timeshare owner. To use these services for worldwide timeshare exchange, owners pay an annual membership fee and a fee for every timeshare exchange.

As a member of RCI, you will enjoy the ability to search for exchanges as well as telephone customer service, an annual resort directory, and a free one-year subscription to “Endless Vacation” magazine, a publication for timeshare owners.

Although there are several fees associated with timeshare ownership, they each cover a service that lets you enjoy your timeshare to its fullest. As you will see, a timeshare purchase will pay for itself in just a few years– and will allow you to enjoy a lifetime of quality vacations at a fraction of the cost.