It's no surprise anymore: Time-shares continue to catch on

By Douglas Hanks III
Knight-Ridder Newspapers

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Carryout food in one hand, two bags of groceries in another and a six-pack of beer squeezed in too, I fumbled for my key card at unit 5288 and thought: Is this vacation?

I had rented a Hyatt time-share at the Coconut Plantation resort near Naples, Fla., for the weekend to see if time-shares are worth the hoopla the hotel industry has heaped on them over the last decade.

Like Hyatt, Disney, Marriott, Ritz-Carlton, Hilton and most of the other major hotel chains have opened time-share resorts, which sell their apartment-style units for one week at a time. In turn, their brand power has brought respectability to a once-shabby industry.

About 3 million households in the United States have bought time-shares, and the typical buyers shell out what would buy a decent car — $14,500, according to the most recent time-share industry estimate — for a lifetime of weekly stays in the one of the 5,400 time-share resorts around the world.

It's an option that always had something of a polyester image in the hotel industry, which used to snub its nose at the time-share concept. But now the hotels have embraced time-shares with gusto. In the months that followed the 9/11 terrorist attacks, when hotel profits plunged, time-share resorts reported strong sales and healthy occupancy rates.

But the idea of buying 1/52nd of a hotel room somewhere always seemed much too limiting to me. And as I balanced the Miller Lite on my knee, I thought about the other trade-off too.

Sure, there's probably a kitchen waiting for me inside, but after arriving late on a Friday to Bonita Springs, wouldn't I be much happier downstairs at a hotel bar, having a late supper and winding down with a drink? Instead, here I am with some Chinese food, orange juice and English muffins … my dinner and breakfast in paradise.

Then I opened the door, and felt happily surprised.

Unit 5288 turned out to be a full-size one-bedroom condominium. The tiled-floor kitchen with granite countertops and a large refrigerator opened up into a roomy living room attached to a screened-in patio. The huge bathroom had two sinks, whirlpool tub and two-person shower.
 
It reminded me of one of time-share's major selling points: space.îîOnce you've done time-share, it's hard to go back,'' Bill Rogers, who runs the Timeshares Users Group Web site (www.tug2.net) told me in an interview a week before my visit. And I could see what he meant.

No more watching TV on the hotel-room bed and taking the elevator two floors down in search of ice. No more cramming leftovers into the mini-bar fridge. In fact, no more mini-bar. Instead, I'd be staying at a suite with more square footage than my apartment.

My reaction captured one of the top selling points for time-shares, which have pitched themselves as the smart vacation choice for big groups … families with small children, couples traveling together, or anyone seeking the space of a vacation home without the six-figure price tag.

But the five-figure price tag has kept most people away, too. ARDA President Howard Nusbaum said despite the $5.5 billion in time-share sales last year, only about 5 percent of the people who could afford a time-share actually own one.

Along with costs, there's the issue of ownership itself. Most time-share owners trade among themselves for stays in other resorts, but that's still less than 5,500 resorts around the world. And those swaps are governed by complex formulas restricting trades to both comparable units and comparable weeks … meaning don't count on trading your scorcher of a week in July in Key West for ski-season in Aspen.

I met one woman by the pool who has been waiting eight months to get approved for a week in the Bahamas. Most time-share owners file their trade requests nine months to a year in advance, industry executives said, and usually submit their top three choices.

Supply and demand rule the time-share universe, and conventional wisdom doesn't always fare well. Orlando is one of the most popular time-share destinations in the country, and though the demand is almost always strong for the five time-share resorts in Walt Disney World itself, there are so many time-shares outside the park that owners of those have little trading pull.

The trading system can be baffling to a newcomer and is complex enough that even veteran time-share owners say they can't predict what a particular week in a particular spot will garner in the two largest exchanges, Interval International and RCI. Those companies charge about $100 a year in membership and somewhere between $150 and $200 per exchange, according to timeshares.com.

Rogers, who runs the tug2.net Web site, said buyers often think they're getting a prime week only to find it decidedly second tier.

"You don't know until after the fact,'' he said, "when you try and make a trade and they say nothing's available.''

Of course, the swaps do happen. And a recent industry-sponsored study said 85 percent of time-share owners called themselves satisfied with their purchase. But the limits of the exchange network are part of what gives the hotel companies an advantage in the time-share industry, since their buyers also have access to the chains standard hotels.

Hotel companies wrap their time-share properties into their rewards systems, letting owners cash in their weeks for points in the same way frequent fliers rack up miles with each airline ticket. Owners can cash in the points for hotel stays, airline tickets and other perks; Disney lets its owners use them for Disney cruises. In fact, some time-share developers base their entire system on points, where owners buy a certain amount of points instead of a 1/52 of a unit.

Mark Perry and his wife bought their Kauai week in 1996 for $12,900, and now pay about $900 a year in management fees. Not only have they exchanged that for a time-share unit on the Pacific coast near their home in San Jose, Calif. … they also cashed in their time for a free stay at a Marriott hotel in St. Thomas, as well as round-trip tickets to get them there.

Along with bringing respectability to the timeshare industry, major hotel chains also have closed the amenity gap between time-share properties and standard hotels.

Housekeeping still remains a weekly visit in many time-share properties, and fresh towels mean walking downstairs to the lobby. But the daily towel-and-trash service I received at my Hyatt stay has become more common in time-shares.

"You just don't get your bed made,'' Perry said. "That's it.''