What is a timeshare?

Over the years timeshare ownership has evolved. What was once the option to buy a one-week increment at a specific resort - whereby the week number never changed - now encompasses several options. You can now select products that are either fixed or floating weeks at a resort or holiday unit at a specific location, or select a flexible product based on points.

Depending on the particular product type, you can use points to book holidays at different resorts and locations throughout Australia and the rest of the world. Owning a timeshare allows you to choose both when and where you holiday.

Each timeshare agreement is different - there are several options available so it’s important that you pick the option that works best for you.

Fixed week timeshare

Some properties are divided into one- to two-week periods and are then split between all of the owners. This process essentially buys you the right to holiday one to two weeks each year at a specific holiday unit or resort.

There are perks to this kind of contract, like not having to plan ahead to make holiday reservations and you have a guaranteed holiday time every year. The option to rent your timeshare out is also fairly easy if you own a ‘valuable’ week during a popular holiday or high season.

Floating week timeshare

Another type of timeshare available to those wanting a bit more flexibility is a floating week timeshare. This allows owners to reserve any week throughout the year, on a first-come, first-serve basis. However, some floating weeks are restricted by the season and can only be used during a specific span of time or season during the year. For example, owners can use their summer floating week during any week that falls within the resort’s summer dates.

Points-based timeshare

The final and most popular form of timeshare is the points-based timeshare. Several resorts and clubs offer different kinds of points-based timeshares. Some resorts use a pure-points membership system, meaning you buy a specific amount of points that can be used to book at any of the resort's locations. However, other resorts offer owners the option of even greater flexibility, with the ability to convert their fixed week into points. In this instance, the number of points you receive each year depends on the popularity of your “home” resort, unit size, season, and more.

Timeshare owners receive their annual allocation of points each year. The number of points you need to book accommodation will vary depending on the season (on or off), how long you stay as well as the type of accommodation you are looking to book.

The costs associated with a Timeshare

When buying into a timeshare, there can often be quite a few costs associated with the process. If you’re joining a points-based timeshare - the initial buy in usually requires a minimum number of points to be purchased from the club, each point is worth a given amount of money. In Australia, this can typically cost between $20,000 and $40,000. Some clubs also charge a once-off joining fee.

Timeshare ownership usually means there will be maintenance fees associated with the upkeep of the property and the administration. Maintenance fees may also be referred to as annual levies, annual fees or club fees. Clubs usually require their owners or members to pay annual maintenance fees which can vary between clubs, but usually averages around $600 per annum. However, this may cost more or less depending on the type of property or properties you own or how many points you own.

Owners or members may also be required to pay housekeeping fees by some clubs when staying at a resort, as opposed to cleaning and room service costs of a owner/member stay.

Other fees may also arise particularly for things like late payments, late cancellations, transfer of ownership or membership and so on. However, these fees will all be outlined in each club’s PDS and will only be enforced in certain circumstances.

Advantages of owning a Timeshare

• Becoming a timeshare owner allows you to have access to your property for a certain amount of time each year - for the entire lifetime of your club membership.

• When holidaying, the most expensive part is usually accommodation, so owning a timeshare means that’s one less unpredictable cost you have to have to worry about when travelling.

• Timeshares aren’t affected by inflation, which means despite the ongoing increase of hotel room rates, you’ll always spend a similar amount of points when booking your timeshare stay this way.

• Motivates you to take advantage of that ownership and go on a holiday each year.

• Timeshare is normally operated through a club, so your ownership allows you to enjoy a high standard of accommodation.

• Enjoy service and support from a reputable team while enjoying your holiday.

Disadvantages of owning a Timeshare

• A timeshare is a long term commitment, many Australian timeshare clubs have a lifespan of 80 years (the maximum amount of time permitted by Australian law), so it’s quite possible that you’ll own your timeshare for the rest of your life. You may be able to sell your timeshare, however, you’ll usually incur a transfer fee.

• If personal or professional commitments don’t allow you to go on a holiday every year, paying for a timeshare may seem like a waste of money.

• Depending on the location you would like to redeem your timeshare points at, it may be difficult to book closer to the date. Popular properties can book up quickly, so if you’re wanting to book a holiday at a well known resort - you may need to do so up to six months in advance.

The fine print

Before locking into a contract, it’s important to note that purchasing a timeshare shouldn’t be a decision that’s made lightly. Most timeshare clubs have a lengthy lifespan and it’s a lot easier to buy a timeshare than it is to sell one, so it’s best to evaluate whether ownership/membership suits your lifestyle before committing.

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