According to a Ministry of Trade & Industry spokesman, legislation was 'not a panacea' for consumers' woes. "Falling in line with laws will add to companies' operating costs which are usually passed on to consumers", she said.
On the other hand, there are some good legitimate timeshares (e.g. those offered by hotels directly for rooms on their own hotel properties). Anyone who has gone to short, sweet and simple (hassle-free) hotel timeshare presentations e.g. at Genting, Hilton hotels overseas know how cheap these hotel timeshare packages are! The lesson here: buy from big name resort / hotel owners directly.
Timeshares are called by many names like Holiday Clubs, Vacation Clubs, Travel Clubs, Business Travel Clubs, Deluxe Resort Packages, Incentive Travel Clubs etc. Don't be fooled by their fancy names.
Timeshare to most people in Singapore means buying something for future usage to save on travel expenses. Unfortunately, in real life, this is not the case. What happens is that the timeshare facilities are usually hardly use at all because of inherent problems in utilizing the timeshare facilities - negating the benefits of buying the timeshare in the first place.
Benefits of Timeshares?
On the left, you will see what most consumers are promised when they attend a timeshare presentation. How many of these promises are delivered? Judging from the number of complaints from timeshare buyers - not many. (click to enlarge picture)
If you were to ask me, I would say don't bother with timeshares. Why?
Package Tours by Travel Agents
Most people like:
- to travel to different places annually;
- to travel free of constraints and encumbrances i.e. you can travel at peak periods (irrespective of whether it is the school holidays , summer holidays or the popularity of the resort);
- the convenience and experience of travel agents handling the accommodation and sight seeing arrangements;
- enjoy the company of other people;
- the economies of scale of group travel for room, meals, transport, admission to attractions etc.
- unlike time share companies, travel agents are regulated and licensed which means even if the travel agent goes belly up, you have recourse for a refund through the Singapore Tourism Board or NATAS. Licensed travel agents have to put a hefty deposit to ensure they fulfill their commitments to consumers.
Also, the time-share industry in America and Europe are heavily regulated, so investors are protected - though not 100%. No investment offers 100% protection, no matter how good the company is.
Timeshares sold in America and Europe are also cheaper and there is a healthy resale market.
Savings in Holiday Travel through Timeshares
Cost savings in travel expenses is often cited as the most important point to consider. However, the problem is you have to enter into a lifetime contract. Your commitment is for a lifetime but the seller's commitment is not lifetime as they could go bust at any time.
The cost of a lifetime timeshare contract is:
- The Price of buying a timeshare which may vary from buyer to buyer. If you bargain harder, you get a better price (with varying terms and conditions applied to such a discount)
- Administrative or other upfront costs;
- Maintenance fees and other recurring annual fees, property taxes, club dues, reservations, housecleaning or exchanges.;
- Booking fees to use your yearly timeshare allocation;
- Most of these timeshare are tagged as "business travel" or "4-5 star rooms" which means that the hotel room rates you pay for timeshares could be high;
- If you have a big family (i.e. more than a double room allotment), you will have to upgrade at a higher cost;
- If you not longer find your timeshare property useful to you, it won't be easy to sell it because chances are you have bought an overpriced timeshare particularly if you had bought it from the now blacklisted promoters. It is likely you will have to take a heavy hit on your investment in order to get the deal done quickly. The resale is usually done through the OTe auction-like site and the sale could take a few months even if your price is right;
- The sales is being made through a hard sell salesperson which means that you are likely to be paying a high sales commissions / high margins on top of your purchase price;
- Timeshares generally do not appreciate in value.
Convenience with Timeshares
Contrary to what timeshare promoters may say, it is not convenient to travel with timeshare.
- You will have to deposit your timeshare allotment with a timeshare booking company each year. It is a real hassle to exchange your timeshare allotment with another resort. So contrary to what timeshare promoters may say, your timeshare value is somewhat limited to the usage of the hotel / resort property that you had originally invested in (as CASE has often been advising would-be timeshare investors);
- you will have to plan your holiday travel with great accuracy i.e. one or two years ahead of time;
- you will have to travel at the convenience of timeshare companies. Chances of being disappointed (at not being able to get your preferred time slots) is high - especially at peak periods or if the resort is a popular one.
- Many of the available timeshare hotels are not in central areas which would enable you to save on land transport costs as well as convenience. This means you will have to arrange your own transport to shopping, dining and sight-seeing locations.
- you will have a problem if you have to change your travel plans schedule and / or itinerary;
- After-sales service from such sales promoters is notoriously poor - if they are still in operation when you contact them. There is a high staff turnover in timeshare companies, making it difficult to contact them and having a meaningful follow ups.
- be a frequent traveler;
- you like free and easy travel;
- have enough funds to pay a substantial lump sum upfront for your timeshare as compared to pay-as-you-go with travel agents;
- the room allocation can accommodate your whole family;
- you don't mind going to the same place or be restricted in travel choices annually;
- don't mind sub-quality / no service room accommodation.
If you must buy, don't buy it on the spot. Get more information and they go and check other legitimate promoters [members of the Timeshare Association, (Singapore)], CASE, and other timeshare watchdog sources.
For Timeshare - company watch list (for complaints to CASE) and international blacklisted timeshare companies, click this link.
Forget the discounts. Forget the free gifts. Forget about how you are wasting the time of the timeshare sales promoters. You are there to buy a timeshare at the right price and at the right terms to justify your long term commitment. Lifetime financial commitments require the same level of due diligence as choosing a lifetime marriage partner.
Take time off to do due diligence. Check to see if the timeshare offered is a bargain by comparing with other reputable companies. Go back and ask for the same discounts and free gifts before putting down your cash. Chances are they will be desperate enough to offer you the same terms as before.
If not, say bye-bye and tell them that another timeshare company has a better offer. Watch their jaw(s) drop. Believe me, they are more desperate for the sale than you are of getting the timeshare.
Generally, it is cheaper to buy timeshares from the developer (rather than sales companies) and you'll get financing too. It is 50% cheaper to buy it off an existing timeshare buyer / owner who wants to get rid of their timeshare.
Once you've have bought the timeshare, don't upgrade, don't re-sell, don't put any more money down. Period. In fact, don't contact the promoters and certainly do go to any more timeshare presentations unless it is absolutely your life's mission to bring hell-fire to these timeshare resellers. If your purchase is within the cooling off period, go and get your refund immediately - if you have second thoughts about the investment. All timeshare sales in Singapore must have a 3 day cooling off period in their contract. If they do not, contact CASE immediately to complain.
If not, just use, use, use annually to recoup your investment. Or lend it to your friends or relatives. After all, that was your plan, isn't it?
If not, you have obviously bought something you don't need. You've bought it for all the wrong reasons. In such a scenario, you have only yourself to blame for not doing a thorough financial needs analysis on your timeshare investment. - Boo.