The prospect of becoming the joint owner of a property in order to use it for holiday home purposes under the time sharing scheme was once quite an attractive idea.
The benefit of investing into a timeshare was that you would actually be saving money in the long run, and in years to come would be able to see the benefits of saving on what you might have been paying for each and every holiday.
Unfortunately, today, this once appealing money-saving deal isn’t all that it’s cracked up to be and people have often been misled into committing to a good looking deal which doesn’t turn out to be quite what they thought. Further to this, the difficulty in being able to exit and offload timeshares has also become a common problem.
Yet where did the idea of timeshares originate from? By taking a trip back through history we’ll be taking a look as to how and why timeshares were once regarded and sold as a sound investment, but how the outlook of timeshares is very different today.
The origins of timeshare
It all began back in 1946 when Fred Pontin, Billy Butlin and the Warner brothers enlarged their existing holiday camps so that they could more effectively cater for the increased demand for UK holidays which followed the end of World War Two.
Although these were not timeshares, their holiday camps did generate the popularity of package holidays and as commercial air travel became more accessible, it was in this market that the idea of vacation home sharing, now referred to as timeshares was created.
Timeshares originally began in Switzerland with Hapimag being founded in 1963. Not long after the company was set up, founder Alexander Nette and his associate Guido Renggli looked to expand and made the decision to purchase properties in Spain and Italy.
The notion of timeshares was further extended to the UK which then returned to Europe and Scotland in 1975. It took just five years for timeshare resorts to reach the majority of major holiday destinations across Europe, Spain proving to be most popular.
Timeshare vs. Package holiday
You might be wondering how timeshares were advertised as being different to package holidays.
The main attraction offered by timeshares was the idea that one’s holiday could be much more luxurious. However, despite high-quality accommodation and beautiful scenic destination accompanying the advantages of timeshares, sales were slow to start.
Timeshare exchange is introduced
It was in 1974 when the first exchange company of its kind, Resort Condominiums International (RCI) was introduced. The idea behind the creation of timeshare exchanges was that the decision to purchase a timeshare could become even more appealing if owners could exchange a week in their location for another destination. RCI is still one of the largest timeshare vacation exchange groups in the world today.
The early 1980’s saw a vast building programme in the Canaries and Costa del Sol which practised aggressive selling techniques acquired from the US.
Heading into the mid-1980’s, this period witnessed a surge in timeshare sales as more resorts than ever were opting to offer timeshares. Yet with the increase of sales also came an upsurge in the number of complaints and reported cases of timeshares being mis-sold which then led to an Office of Fair Trading Investigation and report in 1990.
Although it took the government eight years to react to the issues of mis-selling and common scams associated with timeshares, the 1990 report paved the way for the introduction of the Timeshare Act 1992. However, the act did little to removed the problems of aggressive selling skills and people were still being mis-sold timeshares.
A new and somewhat stricter law was introduced in Europe in 1998 which did help in lessening the aggressive nature of the sales which were previously tarnishing the industry. Whilst a ban of taking upfront payments was introduced, this wasn’t adhered to by all meaning that the mis-selling of timeshares continued.
Difficulties within the timeshare industry worsened when the option of rental property became more popular and revealed that there were better quality properties on the market for similar or even lower prices than timeshares.
2000 – present day
The timeshare industry experienced a very difficult time in which the reality that timeshares weren’t offering all that the flashy sales pitch’s said they would came to light even more so than before. The increase and impact of the media who began to expose poor practice and treatment associated with the dubious selling techniques only added fuel to the fire.
Unsurprisingly, this led to a rapid decrease in sales, as well as more and more timeshare owners choosing to exit their contracts leading to a quick decline of timeshare owners. Today, it’s thought that only a third of timeshare owners are prepared to pay annual fees.
Specific organisations, for example, Timeshare Consumer Association, can help assist in a range of matters including advice in exiting a timeshare for owners who have unfortunately been caught up in the problems common to the industry, or who have decided that it wasn’t the perfect investment which they were led to believe.
Whilst the timeshare industry seemed to be prospering throughout the 1980’s, the dubious selling techniques and frequent problems which proved difficult to stamp out as well as more attractive and financially viable deals in renting properties dramatically affected the success of timeshares. Whilst we can’t say for sure what the future holds for the industry, the striking downfall in numbers, not to mention the damaging reputation has done little to show any signs of the resurgence of timeshares.