'Vacation ownership is a lot like having a 401K," quips a perky sales guy as he leads a young couple past newly planted palm trees at Sheraton Vistana Villages in Orlando, Fla. "It's an investment."
What? Is this right? Vacation ownership being compared to the U.S. version of our RRSP? A timeshare - and yes, let's call it by its customary moniker - making good financial sense? And here's the other kicker: The potential buyers are actually nodding in agreement at his assessment.
What gives?
In actuality, the timeshare industry is doing its darndest to shed its formerly dodgy image, with some of the vacation market's known commodities buying their way in. Starwood, Four Seasons, Marriott, Hyatt and Disney, among many others, are all now big players willing to bet that vacationers will plunk down, say, $17,000 plus a $600 annual fee for a two-bedroom unit if they know - and ultimately trust - the brand.
If these corporations have their way, customers will forget the bad old days when cowboy developers locked unsuspecting buyers into stinker deals that forced them to duke it out for the best units and the best weeks.
"Until 1984 that was the prevailing problem," says Edward Kinney, vice-president of corporate affairs for Marriott Vacation Club International in Orlando.
"People didn't know the company they were dealing with. But having a large Fortune 500 company that has a reputation dating back decades offers a comfort zone."
Today, many timeshare contracts allow buyers to pick their weeks - as long as they're within a specific block of time - or cash in their points to vacation at other resorts around the world. Some units are deeded and can be passed down to kids and grandkids in perpetuity.
Then there are other perks like onsite concierge services that will pack your fridge before you arrive. And customers get to leave their boxing gloves at home: There are plenty of identical units for everyone.
Word is getting out. According to the American Resort Development Association International Foundation and accounting firm Ernst & Young, which compiled the results, 2006 timeshare sales were up 16 per cent over 2005 to $10-billion a year. Meanwhile, Ross Perlmutter, executive director of the association's Canadian arm, says Canada has experienced 15 per cent growth for the past several years, with more than 300,000 Canadians buying in.
"The forecast is incredible demand," says Damola Are, Hilton Grand Vacation Club's senior director for global guest initiatives.
Flexibility and brand confidence aside, there are other reasons for the recent spike in sales.
"They've got the SUV, the Harley, the boat and the cottage," says Perlmutter of the retiring baby boomers who are primarily responsible for pushing sales to their current altitude.
"This is one more thing they want to acquire."
And as cottage real estate continues to appreciate out of control in many parts of the country, people are still looking for their little piece of heaven, without breaking the bank - or their backs.
"There's no cleaning out cobwebs or rebuilding decks - nothing like that. Instead, you're off and running for the week," Perlmutter says.
This all sounds good to Teresa Pitman, a Guelph, Ont., resident and self-described Walt Disney World fanatic who toured a couple of Orlando Disney timeshare units back in 2006 with her family. Pitman has been to the amusement park 12 times and is planning a 13th trip in December.
In short, the mom and grandmother of a growing brood of tiny tykes is the company's target client.
"Because we keep going, it seems like we might as well do it this way," she says.
While the grandkids played in the supervised Kids Clubhouse next door, Pitman and her son listened to the salesperson's spiel for a couple of hours, learning the Vacation Club lingo and figuring out how many points they'd have to buy - costing anywhere from $77 apiece - to make it worth their while.
In the end the cost would hover around $20,000.
"It's a fair bit of money up front," she says. "But it would work out cheaper for us over time."
Pitman does admit, however, that timeshares do have some complications. After perusing vacation ownership Web boards, she says some owners complain about the complexity of booking other resorts or have a hard time booking the time they want.
Still, she's developing a plan to buy come 2009, partially because she says she never felt pressured to sign on the dotted line.
Floating flextime and wicked kids' programming are good things, but so is something else the big brands offer: a soft-sell approach. In short, big hotel companies have to play nice or risk losing a heck of a lot more than a couple of disgruntled clients.
"We cannot risk jeopardizing the brand with hard-sell tactics," says David Matheson, vice-president of corporate communications for Starwood Vacation Ownership in Orlando.
Marriott's Kinney agrees that a bad buying experience could be disastrous. "It would be the kiss of death for our business," he says.
In real life, however, timeshares are still trying to sell their units and vacationers are still signing up for the free breakfast and $50 off their room rate in exchange for a couple of hours of rapid-fire promotion.
And make no mistake, hotels are expecting their sales forces - over a hundred salespeople at some resorts - to rack up the sales. Considering it costs an average of $280 to reach each couple, according to Perlmutter, it's no wonder the sessions can feel a little, well, nerve-racking.
Granted, at premier properties such as Vistana Villages, the units are spacious, the pool areas are well-maintained, and the activity programming runs the gamut from family scavenger hunts and dive-in movies by the pool to bartending 101 classes for the grown-ups.
Sure, spending a week poolside can be fun, but are timeshares a good investment? That depends on how you look at it.
Financially, no, says Perlmutter. "Rarely do timeshares ever increase in value. Almost never."
And don't forget about those pesky annual fees. Not only do you have little say in how often and how much the fees increase over the years, but you - or your children or their children - will be obligated to pay them year after year - in perpetuity.
Moreover, according to the Timeshare Consumers Association in the U.K., some timeshare resorts have taken defaulting owners to court.
A number of U.S. charities, however, are willing to accept donated timeshares, which they then auction off.
But, not surprisingly, Hilton's Are looks at the asset question another way.
"It's an investment in your health and welfare," he says. "It forces you to take a vacation."
Stop and think
Before you sign on the dotted line, ask yourself:
Will you really use the timeshare or is it just wishful thinking?
Is it in a locale you would love to visit again and again?
Can you trade in for a unit at another resort?
Are you willing to pay the big bucks for prime time?
Is the unit deeded? Or do you lose it in 25 years or when you die?
Can you buy it cheaper through a reseller?
What happens if you can't pay the annual maintenance fee?
How long is the cooling-off period?