Understanding Vacation Ownership Lingo

If you're new to vacation property ownership, you may find the language confusing. Timeshares, fractional ownership, vacation clubs: What do they mean and how do you tell them apart? In choosing the vacation home best suited to your lifestyle needs, budget and vacation goals, it's important to understand the terminology. Timeshare Giant is here to help.

• Timeshares include deeded property, right-to-use and points-based programs. Owners purchase one-week intervals at a property on either a fixed or floating calendar. Properties range from studios to multi-bedroom villas with many timeshares located at resorts that offer a wide variety of amenities. In addition to the one-time purchase price, owners pay an annual property maintenance fee.


• Fractional ownership is the shared purchase of a vacation property with other parties. Each buyer is allotted use of the property commensurate with the portion (fraction) of the property purchased. For example, 50% ownership would allow you to use the property for 6 months out of the year. Fractional properties are generally affiliated with high-end hotel companies so owners enjoy personalized services and other luxury amenities. In addition to the purchase price, owners pay an annual property maintenance fee.


• Vacation club members do not purchase actual property, instead their membership fee and annual dues buy them the right to use any of the vacation properties owned or operated by the club company. Club companies offer members a wide range of vacation properties, most with concierge services.


• Condo hotels sell a portion of their room inventory to the public. For an annual fee, owners may use their room for vacation purposes, corporate housing or rent it to generate income. Rentals are typically managed by the hotel, though proceeds go to the room owner. Buyers and their renters or guests enjoy hotel services and amenities.

Timeshare Exchanges Increase Vacation Options

Some people buy a timeshare because they want to vacation in the same spot every year. Others buy a timeshare for its exchange value. They're investing in the opportunity to vacation at luxurious resorts all over the world. As they say, variety is the spice of life! Even if you primarily enjoy vacations in your own timeshare, owning a timeshare gives you the ability to easily vacation anywhere in the world.

The two giants in the timeshare exchange industry are RCI and II. Together they handle most of the world's timeshare exchange business.

Commonly referred by as RCI, Resort Condominiums International was founded in 1974 and quickly became a driving force in timeshare growth. The leader in the vacation ownership industry, RCI has more than 4,000 affiliated resorts located in 100 countries. More than 3 million members in 200 countries subscribe to the exchange service. In the three decades since its inception, RCI has arranged exchange vacations for 54 million people worldwide.

To become a subscribing member of RCI, you must own vacation time at an RCI-affiliated resort, complete an application form and pay an annual fee. For a limited time, RCI has waived the one-time $200 initiation fee and new members may join by paying only the $89 annual fee. For more information, visit the RCI website at http://www.rci.com/ or call RCI Member Services at 800-338-7777.

Interval International, or II, bills itself as the quality exchange network. Founded in 1976, II is an exchange network of 2,200 resorts serving 2 million members worldwide. Participating members must own a timeshare property in the II network. While II does not own properties, exchange properties must meet its criteria for quality. II is perhaps best known for its affiliations with Disney Vacation Club, Marriott Vacation Club and Westgate Resorts.

Like RCI, to become an II member, you must own a timeshare within the family of Interval International-affiliated resorts, complete an application and pay an annual membership fee. A standard membership currently costs $84 per year with discounts for three and five-year memberships. A Gold Upgrade is also available for $138 which provides premium exchange and vacation opportunities. For more information, visit II's website or contact customer service at 888-784-3447 or via email to customerservice@intervalintl.com.

There are other timeshare exchanges, but RCI and II handle the bulk of the timeshare exchange business. If you're interested in purchasing a timeshare, whether for personal enjoyment or its exchange value, click the post title to go to Timeshare Giant. You'll find timeshares for sale (and rent) everywhere in the U.S. and all over the world at Timeshare Giant.

What Is a Fractional Timeshare?

Fractional timeshare ownership guarantees you the use of a timeshare property or resort during several weeks of the year -- that is, for a fraction of the year. Typically, fractional interests range from a minimum of 2 to 13 or more weeks per year, far more than the one week per year common in most timeshare plans.

Many owners choose to purchase a fractional timeshare as opposed to a second or vacation home. With fractional ownership, you need only pay for the time you actually plan to be in residence, a considerable savings over purchasing a second home, which generally goes unused for a considerable portion of the year. Whether you're in residence or not, you pay to maintain, heat, insure and provide utility services for a second home. With a second home, you also pay for mortgage and taxes for a full year. With a fractional interest in a timeshare, you share all those expenses with other owners, prorated to reflect the actual fraction of the year the timeshare is available for your exclusive use.

Fractional ownership originated in the U.S. in 1994 with groups of family members or close friends pooling their resources to buy vacation properties. The average fractional owners are married empty-nesters in their mid-50s with an average household income of $500,000. Generally, ownership is divided into fourths, eighths or 13ths with each owner enjoying an equal number of weeks at the property. With fewer restrictions than most timeshares, fractionals can be rented out, shared with family and friends, sold or left to your heir in your will. Like timeshares, fractionals can be exchanged, allowing owners to vacation in other locales.

Fractional ownership offers vacationers some distinct advantages, including the opportunity to vacation longer and more often and the opportunity to vacation in multiple seasons. Many fractional owners enjoy the seasonal delights of both summer and winter at their timeshare.

Fixed or Flex: What Timeshare Plan Is Best?

Timeshare ownership plans come in two basic flavors: fixed weeks or flex (floating) weeks. Which type is best? It depends on your vacation preferences.

Fixed Weeks: You are permanently assigned ownership of a specific unit and reserved a specific week during the year when the timeshare will be available for your exclusive use. The advantage of owning a fixed week is that you always know when and where you will be vacationing. When you want a bit of variety or can't use your week, you can deposit it into an exchange system.

Fixed weeks give you and your family the opportunity to lay down some vacation roots. You can start building vacation traditions, activities your family will look forward to year after year. You may develop friendships with other couples and families that vacation during the same week you do and plan joint events for your annual get-togethers.

Vacationing in the same spot at the same time year after year can provide the foundation for building wonderful family memories. When my friend was a child, every year her family spent the last two weeks in July at her grandmother's cottage on Lake Michigan. She tells grand stories of blueberry picking with friends, everyone trooping over the next morning for a gut-busting blueberry pancake feast. She remembers with fondness lazy days swimming in the lake and building sandcastles on the beach with her sisters. Her grandmother's cottage in Michigan was the site of many early life adventures: learning to sail (and dunking her dad in the process), her first kiss (stolen under the creek bridge), weekly treks to Sherman's for homemade ice cream (and the best chocolate sodas this side of heaven), and long explores back into the sand dunes searching for the elusive deer herd (many hoof prints followed, no deer sighted).

Returning to the same spot every year adds a cozy comfortableness to your vacation. You know what to bring, where things are, what there is to do. Each year new people and new activities will add a little pizazz to your vacation, but you'll find yourself looking forward most to your traditional activities. My friend remembers her childhood vacations with such fondness that she and her husband recently decided to buy a timeshare and start building their own family memories.

Flex (Floating) Weeks: Flex or floating weeks allow you varying degrees of flexibility in selecting the week you use your timeshare property. At some resorts you can schedule your week at any time during the year; others restrict flexibility to certain seasons. Scheduling is based on availability. Be prepared to vacation in a different unit each year. While you may be able to request a particular unit, assignments are based on availability. Resorts with similar seasons such as Hawaii or the Caribbean are more likely to offer the flex system.

If you have a hectic work or family schedule or aren't able to vacation at the same time every year, a flex system is more apt to fit into your lifestyle. A flex timeshare allows you to fit your vacation into your life at your convenience.

If you purchase a timeshare primarily for its exchange value, the flex system facilitates easy exchanges. If you find variety the spice of life, through the exchange system you can vacation in a different exotic locale every year. One year you can ski the slopes of Switzerland; the next, you can bask on the white sands of the Caribbean.

I read about a couple who upon retirement decided to shuck off the shackles of their staid and ordinary life and travel the world -- one timeshare at a time. They became quite adventuresome travelers, eagerly planning each vacation with an eye toward soaking up as much of the local culture as possible. Using a timeshare as their home base, they have snorkeled along Australia's Great Barrier Reef, taken cooking classes in Thailand, cruised the fjords of Norway, and bicycled through France's wine country. With the advantage of timeshare exchanges, the world is now their oyster.

Timeshare Purchase Tips

If you've decided to join the throngs of vacation goers who have discovered the delights of vacationing in timeshares, you should be aware that there are two basic types of purchase plans: deeded and non-deeded.

• In a deeded plan, you purchase an ownership interest in a piece of real estate. You actually own a portion of the property and structure.
• In a non-deeded plan, you purchase a lease, license or club membership that lets you use the property for a specified time period each year for a specific number of years. While what you own is a piece of paper, that paper gives you the legal use of the property.

In both types of purchases the cost of the unit will depend on the season and length of time you wish to purchase. For example, a week in Aspen during January ski season is worth more than a week in July.

As with any home purchase, read contract papers carefully and make sure you understand what you are buying. You may want your attorney to review any documents you will be asked to sign. Consider these points when buying a timeshare:

• Practicality. People buy timeshares for the convenience of pre-arranged vacation facilities. Make sure you'll be able to use your timeshare every year. Some questions to ask yourself: Are your vacation plans subject to last minute changes? Do they vary in length or season each year? Will you be physically and financially healthy enough to travel to your timeshare?
• Investment. A timeshare is an investment in leisure time and quality of life. You are unlikely to gain financially from the resale of your timeshare and will probably not recoup your initial investment.
• Cost. In determining whether to invest in a timeshare, make sure you factor in all the costs of purchase, including: mortgage payments, closing costs, broker commission, finance charges, annual maintenance fees, taxes, travel costs.
• Documents. Thoroughly read and make sure you understand your purchase documents. Ask your attorney to check over any contracts or agreements you will be asked to sign. Ask if there is a cooling-off period during which you can cancel and get a refund. If not, ask to have it included in the contract. If the seller tries to rush you or won't let you take the documents home for review, walk away.
• Promises. Oral promises are worthless. Make sure all oral promises made by the salesperson are written into the contract.
• Exchanges. Find out if you can arrange trades with other resort units in different locations. Ask about fees and limits. Some programs will not allow you to trade up to a peak time or more exotic location.
• Reputation. You want to ensure that your timeshare will be properly maintained and managed. Research the track record of the seller, developer and management company before you buy. Ask for a copy of the maintenance budget and find out how the property is maintained. Visit the timeshare and talk to current owners. Check with the Better Business Bureau and consumer protection agencies to see if any complaints have been filed.
• Default. Make sure you know your rights if the management company has financial problems or defaults. Make sure your contract contains a non-disturbance provision clause guaranteeing your continued use in the event of default. It should also have a non-performance protection clause guaranteeing your ownership rights.

Timeshare Term Glossary

Accrual Program, A.R.D.A., Blue Weeks, Day Use, Fractional Interest, Lock-off unit, White Weeks... If you don't know what these terms mean, then let me invite you to check out our Timeshare Glossary of terms at our main website http://www.timesharegiant.com/. You'll be speaking like an expert after you peruse our online glossary.

In our Timeshare Glossary we list definitions of over 69 different important terms that are common in the timeshare industry and in the timeshare resale marketplace. Here are the definitions of a few that you may find interesting to pique your curiosity further:

Accrual Program: Some resorts offer their owners the ability to move unused weeks from the previous year, for use in the current year.

Day Use: If a resort offers day use, a timeshare owner can access the resort’s services and amenities 365 days per year, such as the pool or health club, even while not in residency.

White Weeks: A color-code designation used by R.C.I., indicating moderate demand weeks at a resort. R.C.I.’s color-coding is as follows: Red = High Demand, White = Moderate Demand, Blue = Low Demand.

Lock-off unit: Also known as a lockout unit, a type of timeshare unit consisting of multiple living and sleeping quarters designed to function as two discrete units for purposes of occupancy and exchange. The unit can be combined to form one large unit or can be split or "locked-off" into two or more separate units, allowing the owner to split the vacation into multiple stays or bank all or a portion for exchange purposes.

These are just a few of the terms that you will find in our glossary. We invite you to learn more about timeshares and to identify if buying a timeshare is right for you. Buying a time share may just be the perfect alternative to buying a vacation home. Visit http://www.timesharegiant.com/ now for information on vacationing in a timeshare resort or for more information on buying or selling your timeshare.

Travel Insurance Can Protect You from Disaster

Hurricane season has started in the Atlantic. Weather news has been focused on Hurricane Dean, the massive storm relentlessly chugging toward Jamaica and the Cayman Islands. Views of the Category 4 storm taken from the International Space Station show an alarming whirlpool of angry clouds spinning over a huge section of the ocean. No wonder frightened tourists are mobbing Caribbean airports trying to flee Dean's path.

When you plan a vacation, sometimes renting a timeshare months or even a year in advance, there's no way to plan for the weather or natural disasters. No one plans to vacation in the eye of a hurricane, on a tropical island during a tsunami, in the midst of a crowded city when an earthquake strikes or during any of the other myriad disasters that befall our planet. You can plan your vacation down to the minute, but you can't plan on the weather. Mother Earth has a mind of her own!

What you can do is consider purchasing travel insurance. There are various types of travel insurance to cover the host of unpleasant emergency situations you may find yourself in when you are far from home:

• Travel Medical Insurance and International Medical Insurance pay for major medical expenses including doctor and/or hospital care, emergency surgery and extended hospital stays for sickness or injury, even medical evacuation back home, if necessary. Deductibles and co-pays may apply. Travel assistance may also be included.
• Travel Accident Insurance and Accidental Death Plans pay a lump sum if you are killed or seriously injured (loss of limb or eye) in an accident. Repatriation of remains in case of death if usually included. You can purchase insurance for travel by plane, common carrier or 24-hour coverage which pays a benefit for accidental death or dismemberment no matter how or where they occur during travel. Terrorism is usually included, though some policies require a separate rider. War is generally not covered, but you can purchase War Risk Insurance at very high prices.
• Emergency Evacuation Insurance covers the cost of transporting a seriously ill or injured person to either the nearest medical facility, a hospital near home or a hospital of his choice. Often included in travel medical and trip protection plans, emergency evacuation insurance can also be purchased as a stand-alone policy.
• Travel Protection Plans and Trip Cancellation Insurance cover the cost of unreimbursed travel expenses if you are forced to cancel your vacation due to an unexpected crisis (death, accident, illness, airline strike, travel company bankruptcy, etc.). Some policies also provide travel assistance, lost or damaged luggage, and limited medical coverage (sometimes with a co-pay).
• Post Departure Trip Protection covers you against travel delay, trip interruption, trip cancellation, and baggage loss or delay.

While most insurance covers only a specific vacation period, Multi-Trip Travel Insurance may be a cost-effective investment for frequent travelers. Multi-trip insurance is usually sold as a package that includes medical, emergency assistance, medical evacuation, accidental death, baggage and trip delay protection. Plans are available for both domestic and international travel.

What Do All the Colors Mean?

If you've been looking into renting or buying a timeshare, you've probably wondered what's with the colors? Red weeks, white weeks, green weeks? What does it mean? Perhaps a timeshare is the pot of gold at the end of the rainbow.

The colors are an easily understood way of indicating level of demand at various times during the year. Since timeshares are located all over the world, the most desirable vacation season will vary from location to location. Certainly more vacationers will flock to the warm beaches of the Caribbean during the winter to escape the frigid snows back home. Likewise, Aspen may be pleasant in the summer, but the high season is in winter when its magnificent ski slopes draw hordes of vacationers. Every vacation destination has its season when demand will be highest, which is what the colors indicate.

Colors were developed by timeshare exchange companies as a way of trading value for value. There are two major exchange companies in the world: Resort Condominiums International (RCI) and Interval International (II). Exchange companies operate banks where timeshare owners can deposit their week at a given resort (see our last post for more information on timeshare banking). This creates a pool of weeks at various resorts around the world from which members can select a resort and vacation time of their choosing.

To assist in determining the value of each timeshare for the purpose of exchanging them, the exchange companies divide the 52 weeks of the year into periods of high and low demand at each resort and color code them for ease of use:

• Most popular = Red (RCI & II)
• Medium demand = White (RCI) or Yellow (II)
• Low demand = Blue (RCI) or Green (II)

You can use the color codes not only to determine the most desirable times to visit a resort, but also to find bargains. If you want to enjoy most of the prime advantages of a resort (weather, temperature, etc.) but avoid the crowds, shop for white or yellow properties. If you want to try somewhere new and your budget is tight, look at blue and green properties. Vacations are always cheaper in the off season.

What Is Timeshare Banking?

In the timeshare industry, you bank time not money; and transactions are made in weeks, not dollars. But the basic idea is the same. You deposit timeshare weeks today so you can withdraw them later -- maybe next month, six months from now, even next year.

Developed by timeshare exchanges, banking (sometimes called space banking) allows timeshare owners to better manage their investment. A timeshare bank is a data base listing the availability of timeshares all over the world. Timeshare owners who don't plan to use their allotted week can deposit it in the bank. They may also make a deposit if they want to exchange their timeshare location or date for a different location or date. This allows someone else to withdraw and use your timeshare during your appointed week. For every week you deposit in the bank, you receive a credit on your balance sheet which allows you to use that week at some time in the future. Weeks you banked in a previous year that are available for use during the current calendar year are called accrued weeks.

For example: Say the timeshare you own is for the first week in September at a Caribbean resort. This year, however, that's the very week your daughter will be giving birth to your first grandchild. Of course you want to do the grandma thing, so you bank your timeshare. By banking it you allow someone else to withdraw your timeshare and use your allotted week in the Caribbean. You now have a week in the bank to use at another less hectic time in your life. Or perhaps you own a timeshare in the mountains but you prefer to go to the beach this year. You deposit your week in the mountains so you can exchange it for a week at the beach.

Sometimes owners new to timeshares misunderstand their banking and/or exchange rights. When you bank your timeshare, you give up your right to occupy your property for your given week. That right transfers to the exchange company (bank) which will offer it to someone else. If you sell your timeshare after it has been banked, the new owner will not be able to use the timeshare during the banked period. However, the new owner may have the right to the previous owner's exchange. That is, he may be able to withdraw a different timeshare location or time from the bank. Sometimes, however, the seller maintains his exchange right and does not transfer it to the buyer. This is an often misunderstood concept between timeshare buyers and sellers. When you purchase a timeshare, it is always important to clearly understand your rights and read the fine print. Owners typically have two years to use or exchange banked properties.

You may also hear the terms block or bulk banking. To ensure that their rooms don't go empty, some resorts will designate a certain number of rooms for timeshare exchanges. They deposit a large number, or block, of weeks into the timeshare bank early in the year. Their goal is to entice timeshare owners to select their resort when the owners make a withdrawal from the bank.