The benefits and pitfalls of time share
If you’re keen on going on holiday often you may want to consider investing in time share, because according to a recent survey, shared vacation ownership members are going on holiday more often. But buying the right time share can be an onerous task and you have to be certain that you are buying from legitimate players, finds Angelique Ruzicka.
If you feel you aren’t going on holiday often enough the reason behind your lack of travel could be because you’re not a time share member. According to a recent worldwide omnibus survey, on average South African shared vacation owners spend 6.5 more days on vacation than their non-owner counterparts. This was revealed by the American Resort Development Association (ARDA) International Foundation (AIF), who conducted their 2016 survey in 18 countries that spanned across six continents.
The study, which was conducted among 1 000 consumers in each country, found that in South Africa shared vacation owners benefitted from on average 20.6 days on holiday a year, while non-owners only experienced a shorter 14.1 days. Furthermore, the study found that owners of shared vacation products were more likely to invest in rejuvenating themselves and spending quality family time on vacation than their non-owner counterparts.
“We are encouraged by the results of the AIF omnibus survey as it affirms the fact that this is a R3.5 billion per annum industry that not only forms an integral support structure for the tourism and leisure sectors, but that the unique product offering of retaining a quality future vacation lifestyle at today’s prices makes financial sense to a growing 500 000-member database,” says Alex Bosch, spokesperson for the Vacation Ownership Association of Southern Africa (VOASA).
During the 2016 festive season the Beekman Group, which is one of South Africa’s leading corporate players in the development and management of property in the leisure sector, reported a busy booking period and recorded sending approximately 15 000 people on holiday for the period 9 December to 13 January, which further supports the findings of the survey.
“When considering that the most respected international players such as Hyatt, Hilton and Marriott, as well as local companies that include Tsogo Sun and Sun International, lead the industry, it is evident that the growing trend towards the benefits of shared vacation ownership will continue to carve a path for consumers to enjoy quality vacations more often,” says Bosch.
The dark side of the industry
But the time share industry hasn’t always enjoyed a good reputation. According to reports, the Consumer Goods and Services Ombud has received around 130 vacation ownership related complaints since the beginning of 2016. And the National Consumer Commission (NCC) has announced that it’s in the process of conducting a public inquiry into the vacation ownership industry to find permanent solutions for alleged consumer challenges.
Trevor Hattingh, media liaison officer and spokesperson for the NCC, told City Press: “The purpose of the inquiry is to unearth all consumer challenges, provide a holistic view of the status of the industry across regulatory boundaries, and to recommend appropriate action to be taken by government to address the challenges. Based on information from complaints received from consumers, the issues they have relate to, among others, contracts in perpetuity, overselling and overbooking and product marketing standards.”
How to buy time share safely
Every industry has its rogues and rip off artists, which is why it’s important that no matter what items or services you subscribe to that you are vigilant and do adequate research into the product, the company (specifically its history) and its owners.
Above all, find out if the company is legitimate. “We advise consumers to only deal with accredited members of the Vacation Ownership Association of Southern Africa (VOASA) when purchasing shared vacation ownership products,” advises Bosch.
If you are unsure of how to go about it, VOASA have a list of purchasing guidelines on its website to empower consumers with the knowledge needed to make a safer purchase. It recommends:
1. Asking the developer or marketing agent whether it is a member of a regulatory body approved by the Department of Trade and Industry.
- Buying time share only if you know for certain that you will regularly make use of the scheme and the facilities in the future. Consider your purchase as an investment in future vacations and not as a property or financial investment.
- Making sure that the documentation complies with the National Credit Act, Share Block or Sectional Title Scheme. Is it fully completed? Ask yourself if you are satisfied that you understand all your obligations? Remember, that some time share specialists offer you a contract in perpetuity which means that you will be subscribed to the scheme for a number of years. Will you be able to use it if you become frail or disabled?
- Finding out if there are any deposits involved and if this is held in a trust account. Ask the seller of the timeshare how you would get your deposit back.
- There are new resorts popping up all the time. Find out if the building is complete or refer to the provisions of section 7 of the Property Timesharing Control Act and check the date of completion.
- Carefully reading all documentation and ensure that you understand exactly what type of product you are being offered. If necessary, ask for a clear explanation of any terminology and terms such as ‘space banking’ or ‘usage rights’.
- Choosing a shared vacation ownership option that suits your lifestyle. Consider what you value most in a holiday experience, and then explore the wide variety of options and products that are available. Select the option that will best suit your family’s lifestyle now and in the future.
- Maximising your opportunities for exchange, buy the most desirable unit in high season or purchase the largest points package that you can afford. If your primary goal is to take advantage of the exchange benefit, then it is important to know that the greater the demand for the unit or resort you ‘space bank’ for exchange, the greater the exchange flexibility will be.
- Making sure that you receive a copy of the contract on the day that you signed it. The contract must include the Acknowledgement of Presentation, Terms and Conditions and, where applicable, a Usage Agreement and Management Rules as well as a copy of the completed and signed section of the contract.
- Getting an attorney or financial advisor to check your sales documentation. You have the right to exercise a 5-day cooling off period, but this must be done in writing within five working days of signing your contract. No verbal cancellation is accepted.
Getting out of a time share scheme, once you’ve gone over the cooling off period, may not be easy so you really have to make sure that you are choosing the right deal for you and your family. If you are uncertain but still want to take on a holiday scheme, choose one that gives you the option of only committing for a short period with the ability to extend the contract if you wish.
Otherwise it’s possible to sell your time share if you no longer use it. But again you’ve got to select your resale agency carefully. VOASA recommends checking with your developer first to find out if it has a resale programme or if it is affiliated with a broker that handles resales. Otherwise verify that a resales agent is an accredited VOASA member before you sign on the dotted line.
If you only need to sell your time share for a specific period because you can’t make the time to go on holiday, find out if those who own the weeks before or after you wish to purchase more time. They may want to extend their vacation and therefore only too happy to take on your dedicated weeks at the resort. You would then benefit by not wasting any money while others could enjoy an extended break.