What is a Timeshare?

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So what exactly is a “time share?”

The concept is simple enough: a property shared by multiple owners, who have the right to use it at certain dates and times every year.

And it remains one of the strongest industries in the fast-growing field of hospitality.

It actually dates back to, of all places, the French Alps. In the 1960s, Hapimag, a ski resort developer, was having a difficult time luring in customers for his high priced resorts in the French Alps. What he eventually figured out was that the concept of a resort was similar, in a sense, to a cake — only on a much larger and grander scale.

For example, what is a very extravagant cake was simply too expensive for most families to afford? If that was the case, Hapimag figured out, then the next best option was simple: sell by the slice.

After all, Europe has always been filled with coffee shops that sell cake by the slice – and besides, not everyone wants the whole cake.

So the ski resort developer applied the same concept to resorts. If the whole cake couldn’t be consumed in one sitting, then slice it up – or in this case, Hapimag marketed his resort by encouraging guests to “stop renting a room” and, instead, “buy the hotel” – by purchasing time spent in one of the resort’s luxurious units.

The idea was a hit. And this bold move established the concept of partial ownership of a vacation property, which has since been embraced by developers worldwide, including such giants in the field of hospitality and tourism as Walt Disney World.

The timeshare industry has been so strong in the past four decades, in fact, that these units – known within the industry as “vacation ownership” — often sell regardless of the fact that most of these units are deeded to a certain resort site.

Over the past four decades, the concept has spread well beyond its modest beginnings in the French Alps, and sparked some of the most prominent resort developers and hoteliers – including Starwood, Wyndham, Accor, Hyatt, Hilton, and Marriott – to join the trend.

Vacation ownership has also proven to be lucrative for stakeholders in these major resort families, since the concept has grown in popularity with vacation travelers. Ironically, the concept has also spread well beyond lodging and spawned a variety of imitation products sold on similar occupancy schemes, such as shared ownership of luxury cars, planes, boats, condo-hotel units and even so-called “fractional properties” — where affluent guests can stay for as long as a quarter of a year, often for a six-figure price tag.

The system works with owners purchasing a week in their furnished unit, then having the flexibility to exchange their week with another owner — either independently or through several exchange agencies. They’re not even limited to the resort they purchased into, since they can also exchange their week for a stay at one of the thousands of other resorts worldwide.

Another industry to grow out of the timeshare business has been exchange agencies that specialize in handling these transactions. Two of the largest are Resort Condominiums

International and Interval International, which together have more than 7,000 resorts for guests to choose from – an incredibly wide selection.

They have resort affiliate programs and members can only exchange affiliate resorts. It’s most common for a resort to be affiliated with only one of the larger exchange agencies, and the timeshare resort that one purchases determines which of the major exchange companies can be used to make an exchange. RCI and II charge a yearly membership fee and fees for when they find an exchange. They also bar members from renting weeks that they’ve already exchanged.

Owners can also exchange their weeks or points through independent exchange companies.

Owners can exchange without needing the resort to have a formal affiliation agreement with the companies.

Sometimes, owners can also arrange a direct exchange. This requires locating an owner with the location and weeks that both side want. This form of exchange saves money on exchange fees and is often popular with timeshare owners. Several bulletin boards have been created to help timeshare owners meet other owners and swap their weeks.