THE INDUSTRY
The Good, The Bad and The Ugly.
The title is clearly from the film of the same name and is only meant to define the industry into 3 distant groups, it could easily be best not best and worst. All industries have their share of rogues twisters, sharks, bandits, cheaters, brigands and outlaws but the timeshare industry in Europe has considerably more than its fair share.
Timeshare traders in Europe fall into three groups based on the number and type of present and historic consumer complaints and made about them.
The GOOD
The majority of the smaller resorts (100 to 2,000 owners) together with a handful of large companies fail to cause any real problems for consumers. Approximately 35% of timeshare owners are in resorts run by these “Good” guys.
Hapimag
Hapimag are based in Switzerland with a claimed membership of 140,000, mainly German and Italian speaking, with around 2,000 UK members. They were the first timeshare operator in the world (formed in 1963) and is by far the largest in Europe, representing around 10% of the claimed European ownership base. It has a “buy-back” scheme but recent years of weak trading performance has resulted in a shortfall of funds to enable the re-purchase, leaving some 20% of members on the “want out” list. What is not disclosed is the number of owners who have already “walked away” having stopped paying their annual fees. Hapimag are one of only two major companies in the industry to publish meaningful accounts (Diamond Resorts being the other). In the year 2011 they made a trading profit of €1.2 million on a turnover of €186 million but with an almost static level of membership.
Holiday Property Bond, “HPB”
HPB have a claimed membership of 40,000 (almost all UK citizens) in resorts spread over Europe.
A noted strength of the HPB scheme is the guarantee that a proportion (varies around 65%) of the original purchase price will be paid by HPB after a few years to any member who wishes to exit. However HPB do not disclose how many members apply to trigger this provision nor how many have been successful.
HPB operates within a complex web of unstructured companies and unincorporated businesses making any analysis of its true performance difficult, however HPB is a totally “complaint free” business.
Hilton Grand Vacation Club
The European division of the worldwide timeshare and hotel operator with four resorts in Europe, none of which produce any consumer complaints whatsoever. Proving that it can be done !
The Holiday Club
Based in Finland with a claimed 36,000 members, almost all Finnish, and a good reputation for the way they treat their members. Rise and Fall of Timeshare in Europe.
Dial an Exchange
A small exchange company based in the UK with less than 25,000 active members. This company essentially defines how an exchange business should be run – consumer friendly; ability to book before banking; very low annual fees (sometimes free) and fair/reasonable exchange fees.
De Vere Hotels & Resorts
With 4 resorts in the UK, demonstrates that a timeshare operation can be consumer friendly. But just at the time that timeshare operators were pulling in their horns (2005), De Vere launched a new development called The Carrick . Not unexpectedly, sales were well below budget resulting in the few owners who bought now being charged massive annual fees to account for the shortfall in ownership.
But owners at their other resorts appear very happy with their ownership. Interval International, “Interval” are a subsidiary of Interval Leisure Group (in the US). Interval is the second largest exchange company in the world (after RCI) with around 85,000 European members. Generally regarded as having a higher standard of resorts in its portfolio than RCI, Interval has not generated a single unresolved complaint in the last 5 years.
Pestana Hotels & Resorts
A worldwide hotel group with timeshare resorts in Madeira – and a total absence of any consumer complaints.
Mondi-Holiday
Based in Germany with an almost wholly German speaking membership, Mondi operate an “aparthotel” scheme enabling them to switch accommodation between timeshare use and hotel guests with the full understanding of the timeshare owners. Another “complaint free” organisation.
Tresco
In the Scilly Isles, was almost unique in having a waiting list for membership.
Foolishly its developer made a decision to build further accommodation just at a time when the general downturn in timeshare was becoming apparent. Now, instead of a queue outside wanting to get in, there is a (small) queue inside wanting to get out. However that does not detract from the fact that Tresco has always had an excellent reputation for being a well managed, friendly and sensibly priced resort.
Langdale
One of the original resorts in the UK and still maintaining high standards of accommodation and well satisfied owners, although possibly now suffering from an “ageing” problem.
The BAD
The “Bad” group consist of traders acting in an alleged anti-consumer manner but without the often criminal excesses of the “Uglies”. Approximately 20% of timeshare owners are in resorts run by the “Bad” guys
Seasons Holidays
Essentially a well run and honest organisation, based in South Wales. There has however been complaints in connection with the high handedway it deals with its owners.
For example:-
- Unilaterally banning dogs from its resorts despite a number of owners having bought with the specific promise that their dog would be allowed.
- Changing from RCI exchange to Interval without any discussion with their owners. Although the change was probably in the interests of owners, many felt offended by the lack of consultation.
- Blocking owners from dealing with Dial an Exchange
These are matters which could be easily addressed and should be so as to be a leading front runner.
Marriott Vacation Club
A worldwide club based in the US with 3 resorts in Europe.
Seven years ago Marriott would have been near the top of the “Good” list but an ever increasing volume of complaints in recent years now puts them into the “Bad” category.
Their two main operations in Europe (Majorca and Marbella) now produce consumer complaints about aggressive sales practices and alleged misrepresentation which may be indicative of a change of their sales policy and not simply the result of the occasional overzealous sales person.
Existing owners are generally very well satisfied with the accommodation which, whilst expensive, is of a high standard.
According to reliable sources, Marriott resigned from the trade body to avoid being tarred with the same brush as some other, less reputable, resorts.. In 2011 Marriott in the US announced that it was hiving off the timeshare division because it was becoming a financial drag on their mainstream activity of hotel management.
Diamond Resorts, Europe (previously Grand Vacation Club and Sunterra)
Based in England this is a subsidiary of Diamond Resorts Inc in the US, claiming around 70,000 owners in 32 resorts throughout Europe. Had this business still been running as Sunterra (under the management of Nick Benson) it would certainly have fallen into the “Ugly” category but Diamond, having bought out Sunterra seven years ago, made a number of modest changes to the previously false-hearted practices which marginally improved satisfaction amongst their owners.
But annual fees are historically higher than the industry average. In saying this,I don’t believe that average is a reasonable sum as even the average is un-competitive in relation to equivalent rental rates, a cause of major concern to their owners. For some time Diamond have been converting owners from weeks ownership (they sold) to their new points system for a substantial payment because, it is believed, it enables Diamond to release resorts from trust so that they can be eventually sold on the real estate market.
An estimated 30,000 of their owners have stopped paying annual fees despite threats of legal action from Diamond which has led to complaints that their debt collectors Daniels Silverman use aggressive tactics to recover disputed maintenance fees. But an equally large number are still paying because they are scared of being taken to court.The open Diamond accounts for 2011 of the top company in Europe – Diamond Resorts (Holdings) Ltd – show they are owed £52.6 million by owners who have stopped payingare now generating nearly a quarter of their income from rental, not timeshareand have not made a profit since 2004.They are insolvent to the tune of £26 million and some observers question why the company continues to trade!
Diamond/Sunterra practices have been exposed a number of times on UK TV and recently on BBC TV “Rip Off Britain”.
Anfi Sales,
The marketing company for one of the most prestigious timeshare groups in Europe and based in Gran Canaria. In recent years there have been increasing consumer complaints about their selling methods, including: wait for it,
- Making associated sales into accommodation which was never constructed.
- Substantial misrepresentation
- Breaches of the timeshare law/regulations
- Very aggressive selling techniques
- Improper debt collecting practices
These are as ummary of the compaints that are being made which, if true, spoil the reputation of a previously highly regarded organisation.
Owners are very disenchanted by the negative attitude to helping them make a sale or rental.
Owners who bought many years ago still regard the accommodation and facilities as being good, but some is now looking tired not having sufficient money spent to keep it in top notch condition. If Anfi can get rid of their anti-consumer practices and spend some money on refurbishment it would quickly return to the “Good” group.
These companies just need to understand consumers more and take on board reasonable amendments whilst grasping the nettle. Some companies employ experts to improve their business model. However they have the same omnipresent and idiosyncratic ideas as the ones they advise which are utterly useless to consumers and result in corporate nonsense, giving zilch in betterment. It’s a case of we know best now shut up.
The rest of the “Bad”
Another twenty or so medium sized businesses fall into the “Bad” category but do not warrant detailed exposure.
Phase 4: The ugly list is being worked on and will be released once it clears legal.
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk