Timeshares Are Not Investments

Despite being positioned as “an investment in your family” for decades by unscrupulous timeshare salespeople, CEO of Diamond Resorts International, Michael Flaskey, finally owned up to the fact that timeshares ARE NOT investments. We’d like to unpack Mr. Flaskey’s July 25th Tweet, “They have never been an investment and they have never appreciated in value. They are prepaid vacations that hedge inflation. They give you larger and more spacious accommodations at today’s prices, compared to hotels. They provide families an affordable way to travel the world.”

  1. “They have never been an investment and they never appreciated in value.” Correct, a quick search on eBay shows multiple timeshares listed for $1 or less with no bids. Mr. Flaskey’s admission is only a partial truth. It’s fair to say a New Car never appreciates in value once you drive it off the lot. In reality, most timeshares lose ALL value once you sign the paperwork.
  2. “They are prepaid vacations that hedge inflation.” False. Prepaying for something means that once you have paid the balance, there should not be any additional fees. The average timeshare interval sells for $22,000+ at interest rates that can exceed 15%.* On top of that, timeshares charge an annual maintenance fee that average $1,080 according to self-reported data by the timeshare industry.* These maintenance fees DO NOT hedge inflation, they increase at a more rapid rate than inflation, growing by 8% from 2018 to 2019. For 74% of all timeshare contracts, these maintenance fees are in-perpetuity, meaning when you pass away, they go to your next-of-kin.
  3. “They give you larger and more spacious accommodations at today’s prices, compared to hotels.” Partially true. The allure of a timeshare for many families is the built-in kitchen, and the larger floorplans that many resorts have. The difficulty many timeshare owners find once they become owners is actually getting to the resort they want or booking the unit they want. As timeshare made the transition from deeded weeks at the same resort to a points system that promises to give you access to resorts all around the world, owners are faced with an ever-increasing amount of points needed to go where they want to travel. So, what Mr. Flaskey is conveniently NOT mentioning, is there is hyper-inflation in timeshare points. You constantly need to acquire more to go where you want, forcing upgrade after upgrade.
  4. “They provide families an affordable way to travel the world.” False. If a timeshare was so affordable and provided so much value to consumers and to their families, why do timeshare salespeople need to lure people, many of them elderly, in with free gifts, only to force them to buy on the spot without ample time to consider the ramifications of the purchase? Why would The Diamond Resorts corporation have to pay a $800,000 settlement in a 2016 suit brought about by the Arizona Attorney General for hundreds of complaints supporting allegations “that Diamond employees’ actions and statements violated the Arizona Consumer Fraud Act” regarding:
    • Annual increases in maintenance fees
    • Membership resale and buy-back programs
    • Timeshare membership resale market
    • Ability to rent timeshare vacations
    • Discounts on other travel needs

Yes, Mr. Flaskey is correct, timeshares are NOT investments, and they need to stop being sold with false promises.
If you are a timeshare owner who is wondering how to get out of your timeshare, you can schedule a no-pressure, educational free consultation to learn all about the exit process and what to expect. We help people get out of unwanted timeshares, because NO one should be stuck in a timeshare forever.

*State of the Vacation Timeshare Industry: United States Study, 2020 Edition, 2020