Timeshare owners were tempted in the past by two important benefits. Firstly, they would enjoy higher standards on their holidays, and they would know exactly what to expect. Secondly, they would enjoy exclusivity because members of the public could not stay in the resorts.

Over the years, timeshare has changed. These days, anyone can book a stay in previously exclusive resorts on a site like Booking.com. Facilities and services in the resorts are also being cut back as profits fall.

We decided to take a closer look at the cost of timeshare compared to standard holidays to find out whether timeshare actually makes financial sense.

How the costs compare over 20 years

To compare costs, we will look at the situation of two fictitious couples:

• David and Jayne, who go on regular holidays.
• Mary and John, who own timeshare.

We will cover three different sets of costs over two decades to find out who spends the most. However, we will not take inflation into account, because this affects all holidays.

1) Costs of signing up

This is the easiest comparison to make because David and Jayne have a signup cost of zero. This cost is only relevant to owners of timeshare.

Mary and John, however, need to pay £15,000 to join up. This covers one week in the Silver Season (low season) in Marriott’s Marbella Beach Club (MBC). They can return for one week a year over the 20 year period.

There is also no resale value with timeshare, and if owners want to get out of their contracts, they will normally have to pay a law firm.

Costs of timeshare: £15,000

Costs of regular holiday: £0

2) Annual costs

For the second step, we will cover the annual costs over the two decades of staying in Marriott’s MBC.

Timeshare owners Mary and John have to pay £828 a year to be able to stay in the resort for one week. We will assume they stay here for 10 years and choose to go somewhere else for the other 10 years.

Regular holidaymakers David and Jayne can book a Silver Season week here (we are using the third week of January) for £746 at Booking.com.

Costs of timeshare: £8,280

Costs of regular holiday: £7,460

3) Costs for other holidays

We will assume that David and Jayne will pay the same amount of £746 a year when they go somewhere else on their annual holiday for the other 10 years.

Timeshare owners John and Mary, however, have some additional costs to consider.

They will pay their MBC fees of £8,280 as usual. On top of that, they will pay an exchange company. RCI is the largest, so we will use its prices.

For John and Mary, the cheapest option if they are on a 20-year membership is £1,004. They will also pay for each year they choose to stay somewhere else, paying RCI £184 each time.

Costs of timeshare: £11,124

Costs of regular holiday: £7,460

Totals over 20 years

When we consider the amount spent by both couples, it’s clear that Jayne and David are the winners by booking their holidays on booking sites.

With the initial costs, annual costs and then operational costs on top, John and Mary end up paying over twice as much.

Total timeshare costs: £34,404

Total regular holiday costs: £14,920

Conclusion

“This is really exactly what we could expect,” explains Andrew Cooper, CEO of European Consumer Claims (ECC). “Timeshare companies sold themselves on exclusivity and high standards, but when they started renting their spare inventory to anyone who was not a member, convincing people to sign up with them became a very tough sell.

“Also, the study doesn’t take into account the fees that timeshare owners usually have to pay for specialist legal help to get out of their contract when they no longer want their membership.

“The non-owners have other advantages, including flexibility: In years that they don’t go on holiday (for example during the pandemic) non owners are not obligated to pay for holidays they don’t use. Timeshare owners must pay every year no matter what their circumstances.”

There is an ARDA (sponsored by timeshare) study that is regularly referenced that states that 85% of timeshare owners are happy with their current situation. However, an independent study carried out by the University of Central Florida found the opposite to be true, with 85% of timeshare owners regretting their decision).

The question is how 15% of people can still be happy with their situation with all of the costs and disadvantages that come with timeshare.

So, why did people ever buy timeshare?

Andrew Cooper explains: “Most timeshare purchases were not about saving money. Members understood that timeshare wasn’t cheaper, just better. In the same way that a Ferrari costs more than a Fiat. Nobody expects them to be comparable in price.

“By renting to non-members, resorts engineered their own downfall. It generated revenue in the short term to make up for the massive drops in new member sales, but at the same time it removed any convincing reason for anyone to pay extra for something they can get cheaper on the internet.”

If you own a timeshare and you want to get out of your contract, contact ECC to find out about your options regarding relinquishment as well as whether you have a claim for compensation.