A common selling tool for timeshare companies is to claim that timeshares are cheaper than renting hotels for your vacation.

 

The truth, however, is very different than the rosy picture timeshare salespeople paint of timeshare ownership.

Examples are Inflated and Exaggerated

Timeshare salespeople use fancy charts to show how expensive renting a hotel room is compared to a timeshare purchase over time. However, the numbers used for hotel rooms are greatly exaggerated. In one study, researchers found that a timeshare company was inflating the example hotel prices by more than 60%!

Timeshare Costs Include Much More than the Purchase Price

The initial cost of a timeshare is just the beginning. Many people have to finance their timeshare purchases, and those costs quickly add up with interest payments, payments to the loan principal, maintenance fees, and club membership fees.

In fact, the same study mentioned above showed that a timeshare contract with a sticker price of $18,000 ends up costing more like $45,000 over ten years when the purchase is financed with a timeshare mortgage! Imagine the amazing vacations you could plan for $45,000 that don’t involve the headache of a timeshare.

Even if you don’t finance the timeshare purchase, the cost of the timeshare will increase every year as maintenance fees increase. Though hotel prices also increase yearly, these increases are easier to manage than maintenance fee increases. You MUST pay maintenance fees every year, whether you use the timeshare or not.

Hotel Alternatives are On the Rise

Affordable hotel alternatives like AirBnb, VRBO, and others are becoming more and more popular. These services allow users to rent out private rooms or entire homes for their vacation, which can often be cheaper than traditional hotels. As these alternatives increase competition in the lodging industry, hotels will have to keep their prices competitive to attract customers.

There is no such competitive market in the timeshare industry. The secondary market for timeshares is very small, as the demand for timeshare is artificially created through the coercive sales tactics of timeshare companies. “Potential customers are not looking to invest in timeshares; they have to be persuaded to do so,” say Powanga and Powanga in their timeshare research study.

The bottom line: A timeshare is NOT cheaper than renting hotels for your vacation. Don’t let this timeshare lie fool you.

References:

Powanga, A., & Powanga, L. (2008). An economic analysis of a timeshare ownership. Journal of Retail and Leisure Property J Retail Leisure Property, 7(1), 69-83. doi:10.1057/palgrave.rlp.5100082