Timeshare - is it still good value?

Last month the National Consumer Commission launched eight investigations into ‘vacation clubs’ also known as timeshare schemes, following numerous complaints from the public. The complaints centred on the inability or difficulties involved in exiting lifetime contracts, which impose hefty annual fees and offer only limited availability.


The commission also found that some clubs sold secondary products to members with promises of holidays that did not materialise. Consumers argue these package terms are unfair and don’t allow them to exercise their contractual rights.


So is timeshare still value for money or is it an industry that requires a shake-up in order to bring itself in line with the CPA and with what consumers need? We interviewed the general manager of Vacation Ownership Association of Southern Africa (Voasa), Melanie Hatjigiannakis, to find out more:


1.    How many people have taken out timeshare?
There are currently 741, 775 owners of timeshare products in South Africa; 50% of timeshare entities show a slight increase in membership whereas 30% indicate a slight drop and the remaining 20% indicate that their membership base had remained the same, when compared to the previous year.


2.    Is Timeshare still a good option for holidaymakers? Is it cheaper than holidaying on an ad hoc basis?
According to an industry study done by Grant Thornton, shared vacation ownership products in South Africa enjoyed very healthy occupancy rates when compared to other forms of vacation accommodation, mainly thanks to its good value proposition. The average annual occupancy rate was 80, 5%. This figure remained fairly stable when compared to the previous year of 81, 4%.


The average total trip spend is R7, 358.00 for timeshare holidays compared to a much lower R1, 650.00 on average for domestic holiday tourists in the same period. The reason for the higher spend by timeshare holidaymakers can be contributed to the fact that the holiday accommodation is already pre-paid, which leaves more available income to spend during the holiday itself. Timeshare holidaymakers also stay longer than the average domestic holidaymaker.


3.    How many complaints do you receive about timeshare companies in a year?
VOASA received 753 complaints in 2012 which equates to 0.10151% of the industries owners. From 2005 to 2012 the average number of complaints received per year is 514 which equates to 0.0692% of the total number of timeshare owners in South Africa.


4.    How can people establish whether a company offering a timeshare deal is legit?
VOASA advises all consumers to only do business with a VOASA accredited member. All VOASA accredited members are vetted to ensure that they comply with all statutory legislation before membership is approved. 98% of all timeshare entities within the South African timeshare industry are members of VOASA. If a consumer is unsure of the company they are dealing with then they can visit our website and a list of VOASA accredited members can be viewed on our member’s directory; or they can contact our offices on 021 914 9693 and we will confirm the entities membership status.


5.    What questions should consumers ask before they sign a timeshare contract?
VOASA offers a checklist to consumers who have either bought or who are still ‘looking’ to buy a timeshare product. This guide is available on the VOASA website.


6.    Should customers have their timeshare contract checked over by a lawyer/advisor?
If a consumer is unsure about what they have signed for we recommend that they take their contracts to an attorney or financial advisor with the necessary knowledge of the relevant legislation as indicated above.


7.    What are levies?
The board of trustees [of the resort] will every year will look at the cost involved to maintain the resort depending on its age and the amount of use it has experienced over the year. This will determine what upgrades are required, what furniture or soft finishing’s the resort may need or have replaced so that the resort can maintain the high standard which its owners expect when they holiday each year. This is how, on a very basic level, the levy amount is calculated.


8.    If a person wants to sell their timeshare or get out of their contract, what’s the best way for them to do this?
The procedure to follow for cancellation or resale is dependent on the content of each individual contract as different clubs have different procedures. But in general a member who wishes to cancel or resell their points and / or weeks should first contact the club or resort from which the product was originally purchased. They will be able to explain the options which are available to the member and the procedure which needs to be followed.


In the case of resales VOASA offers members a Resales Guide which provides advice on reselling their points and / or weeks. This guide is available on the VOASA website.


When it comes to cancelation by a timeshare owner it is imperative for them to understand the implications of this decision. When a consumer buys points in a club or weeks in a resort they are becoming part of a collective whole. Meaning that as a week / points owner in a resort they have accepted a certain responsibility in the form of paying your annual levies.


Justmoney’s verdict:
Timeshare could still offer holidaymakers convenience and, in some cases, value for money. However if you want flexibility and no attachments, timeshare isn’t for you. If you are considering a timeshare scheme, read the contract in full and be sure you know what your obligations are in terms of levy fees and how you can exit this contract should you no longer want it or afford it.