Sunday, December 17, 2006; Page P06
The timeshare industry started simply enough, but since then it has spun off a host of different products. Here's a primer:
* Timeshare, vacation ownership or vacation club. The terms are interchangeable, all describing ownership of a block of vacation time. Purchase prices vary; according to an Ernst & Young study, the average price of a timeshare week purchased in 2005 was $17,797. There are also annual maintenance fees, which can range from $300 to $1,000. Timeshares can take the form of deeded property or a right-to-use system. A point value is commonly assigned to the purchase; the larger the unit and the more desirable the season, the more points you receive. Points often can be exchanged for the company's other timeshare properties. You also can trade through an exchange company for another company's timeshares.
* Fractional Ownership. This is the luxury version of timeshare ownership. Exchange is permitted, but owners are more likely to stay at their home properties. According to an industry study conducted earlier this year, prices range from $60,750 to $649,564, and annual maintenance fees averaged $5,575 annually in 2005. The property is almost always deeded. Fractional ownerships are often affiliated with upscale hotel brands; Four Seasons, Marriott, Ritz-Carlton and St. Regis are among the players.
* Destination Club. Also upscale, but members buy the right to use a portfolio of homes owned by the company; homes are often valued at upward of $1 million. Ownership is not deeded, and the number of owners is usually capped. Concierge services are often extensive. One-time membership fees, which usually start at about $100,000 and can go all the way to $1.5 million, are commonly 80 to 100 percent refundable when the person leaves the program. Annual dues range from about $5,000 to as much as $75,000. The concept took a hit earlier this year when Tanner & Haley Destination Clubs, with 900 members, filed for bankruptcy.
* Condo Hotel. This concept is the closest to owning a vacation home. A portion of a hotel's rooms are sold to individuals, who use the room as a vacation home for a certain period; the rest of the time, the room is rented to the general public through the hotel company. The owner receives revenue from the rentals, which is split with the hotel firm. This concept is especially popular in Las Vegas. Prices are all over the board: Signature at MGM Grand, for example, is currently selling studio units from about $680,000, while one-bedroom units at the Trump Ocean Resort Baja Mexico start in the mid-$200,000s.
-- Carol Sottili
