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Now that travel is back on the table, people are getting used to the idea of annual vacations as a regular thing. However, many people have become more cost conscious lately, especially with the current state of the economy. And unfortunately everything seems to be going up in price, including hotel rooms.
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If you’ve ever thought about buying a timeshare to make your vacation more predictable, you’re not alone. According to the American Resort Development Association, 9.9 million households have done more than just think of it as an option – they have actually taken steps to acquire a stake in the industry.
To help you decide if a timeshare is the right decision for you, here are the typical costs involved and how they compare to a traditional vacation at a resort hotel.
How does a timeshare work?
“A timeshare is the shared ownership (or contractual right to use) of recreational property where buyers acquire a specific time period of annual use (often a week) in a condominium or other type of accommodation vacation,” said Sarah Conroy, senior director of marketing and communications with the American Resort Development Association.
“It doesn’t have to be the same week every year or even the same type of accommodation,” she added.
How much should you expect to spend on a timeshare?
There are initial and ongoing costs with a timeshare. Here is an example.
“The typical initial investment in 2021 was $24,140 per weekly interval in a two-bedroom unit (with full kitchen, washer and dryer, and living room),” Conroy said. “The average annual maintenance fee per weekly interval in a 2 bedroom unit in 2021 was $1,120.”
What other costs might you incur with a timeshare?
“Generally, after the initial purchase price of the timeshare itself, the only annual costs required are maintenance fees which go towards the upkeep and repair of the common areas of the resorts, including all furniture in the resorts. units and throughout the resort, housekeeping and cleaning of rooms and resort, and amenities such as pools, game rooms, sports courts, etc,” Conroy said.
“For reference, at the end of 2021, only 20.5% of all timeshare owners had an outstanding loan associated with their timeshare purchase. Often, parking is free at a timeshare resort, and owners rarely charge resort fees for Wi-Fi or use of amenities, as this is covered as part of the maintenance fee.
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Timeshare or resort hotel: which is cheaper?
A major difference between a timeshare and a resort hotel is that you have to pay thousands of dollars to own the timeshare before you can start using it, whereas that particular cost is nonexistent with a vacation at a resort hotel. . But what about beyond? Which of these accommodations is the cheapest?
“While hotel rates have been shown to gradually increase over time, the surge in travel associated with inflation causes daily rental rates to rise sharply,” Conroy said. “ARDA encourages value-oriented vacationers to consider the financial benefits of timeshare ownership, such as the protection it provides against economic pressures that affect those rates, including inflation.”
She continued, “Average daily rates charged by hotels vary with demand; however, the purchase price of a two-bedroom timeshare has remained relatively constant over the past five years. These ever-changing average daily rates, combined with fees and taxes – typically $25+ for resort fees per day and state, local, and other taxes easily exceeding 10% of the daily rental rate – make the cost of ownership in time more consistent and affordable, giving families the ability to plan their vacation spending with confidence.
Conroy continued: “Over the five years ending in 2021, annual maintenance fees paid by timeshare owners have increased by only 15%, compared to a 24% increase in the cost of a seven-night stay in a resort hotel before fees and taxes. From May 22, 2022 to July 22, 2022 – a period of just three months – a seven-night stay at a one-bedroom resort hotel (which does not include a kitchen or separate living room) went from $1,569 to 1 $720.
She concluded: ‘This does not include any savings a homeowner might realize by using the full kitchen in their [timeshare] unit to eat full meals or snacks rather than having to dine out at every meal.
Obviously, this isn’t a simple answer as to which is cheaper, but if your wants and needs match using a timeshare, it could definitely lead to savings in the long run.
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