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Home truths about timeshare

HUGH and COLLEEN GANTZER look at what the business of timeshare is all about.

Lakeview, Munnar ... seasons vary with the location of each resort.

RINA and Manoj Vaidyanathan (names changed) have spent four memorable holidays abroad: in England, France, the United States and Hungary. They're taking another vacation in the United Kingdom this year. The unusual thing about these breaks is that they've bought vacation accommodation around the world, for many years, by making a one-time rupee payment, in India.

That, in a nutshell, is what Timeshare is all about. Like all "nutshell" statements, however, it tends to simplify a rather complex matter. We know. We've just spent a month visiting timeshare establishments, talking to people and wading through reams of documents to get to the kernel of Timeshare. It's been a fascinating odyssey.

What is Timeshare?

To start with, Timeshare is an investment in future vacations. So, before you buy a Timeshare ask yourself:

  • Do I really intend to take a holiday every year?

  • Do I know exactly what sort of holiday I want?

  • Can I afford to buy a Timeshare?

  • Has the resort been built?

    If the answer to any of these questions is "No", or even "Perhaps", don't invest. If, however, the answer to all four questions is an assertive "Yes", you're ready for the next step.

    Where do I invest?

    You can invest in Timeshare anywhere in the world but it's easiest to invest in a Timeshare property in India. Rina and Manoj bought a week's vacation time in Mahindra's Lake View Resort in Kerala's tea-and-tranquillity hill station of Munnar. Timeshare resorts divide their weeks into "Red", "White" and "Blue". The high season, the most popular season, is classed "Red" and is, naturally, the most expensive. Mid-season in "White", not so expensive. Low season, the cheapest, is "Blue".

    As might be expected, seasons vary with the location of the resorts. For example, a week in a Timeshare in Mussoorie in freezing February is a cheap, "Blue", week. But February is a very popular month in Goa so a Timeshare week in Goa in February would be an expensive "Red" week.

    The resort in which you have bought your week is called your Home Resort. You are entitled to spend that particular week, say from the first Saturday in February, in your home resort for as many years as you have paid for. Nowadays the normal period is 25 years. In other words, your single investment will give you a week's vacation accommodation, every year, in your home resort, for the next quarter of a century.

    Most people, however, do not want to spend their vacation at the same resort at the same time for two-and-a-half decades. They seek variety. This is the real essence of Timeshare.

    If your home resort belongs to a Timeshare exchange organisation, then you have the option of banking your Timeshare week with the organisation and exchanging it for a week in another Timeshare resort.

    Things become a little more complex now. Whenever a week is deposited in the spacebank, the exchange organisation gives it a value known as its Trading Power. This is calculated on five factors: supply and demand, the greater the demand for your week, the more its Trading Power; the resort's quality rating, based on holiday questionnaires filled in by those who have vacationed there; the size of the accommodation and how much privacy it gives to its occupants; your "Red," "White" or "Blue" holiday time band; and how early the accommodation has been banked;

    You can bank your February 1, 2004 week on February 2, 2002, that is two years in advance. You can ask for an exchange up to two years before the start of your holiday. You can also get a Bonus Week, at a discounted price, if you have banked your week when the bonus becomes available, and your Trading Power is high enough.

    Clearly, therefore, the weeks with the highest Trading Power are the most expensive.

    How much must I invest?

    Depending on the size of the apartment and the season, costs might range from Rs. 5,16,000 to Rs. 86,000. When Manoj and Rina bought a timeshare in Club Mahindra's Lakeview Resort, Munnar, they also got the option of exchanging it for a similar Timeshare in Mahindra resorts in Goa, Mussoorie, Binsar, Panchghani and Manali at no extra charge.

    But, Club Mahindra has tie-ups with other Timeshare properties in Parwanoo, Shimla, Puri, Corbett, Naini Tal, Kodaikanal and Ootacamund. If you want an exchange with any of these Timeshares, you would have to pay an Exchange Fee of Rs. 1,500 to Rs. 1,800.

    To widen your options even more, Mahindras are affiliated with three other travel clubs offering 148 resorts in Africa, England, Wales, Spain, France, the Canary Islands, the U.S., Australia, Malta, Indonesia, Austria, Switzerland, Greece and Thailand. The Exchange Fees for any of these Timeshares abroad, in the Mahindra network, vary from Rs. 3,500 to Rs. 4,000.

    Mahindras also enrolled Manoj and Rina with the world's largest Timeshare Exchange organisation: Resorts Condominium International or RCI. For three years it gave them access to 3,600 resorts both in India and worldwide. After three years, the Vaidyanathans paid RCI about Rs. 1,000 a year to renew their optional registration. The RCI's Exchange Fees are Rs. 1,860 for an exchange in India, and Rs. 4,500 for an exchange with a Timeshare abroad. Among the resorts within the RCI's network in India, is the charming little Royal Goan Beach Club in Goa's Benaulim where we spent a very relaxing, and friendly, weekend. As warm and friendly, but appreciably more up-market, is Goa's Club Mahindra at Varca Beach. It has given its guests such a consistently memorable experience, over the two years of its existence, that their feedback has earned it the RCI's coveted Gold Crown in both years. Manoj and Rina's Home Resort in Munnar is also a Gold Crown achiever and so the Trading Power of Timeshare has been enhanced because of this high Quality Rating. This helped the Vaidyanathans to get great bargains overseas, even when they took into account the other charges that they had to pay.

    What are the other charges?

    Apart from the one-time purchase price for your Timeshare, RCI Membership, and the Exchange Fee, you would also have to pay an Annual Maintenance Charge, which, currently, ranges from Rs. 2,450 to Rs. 4,850, depending on the size of your apartment in your home resort. In addition, some resorts levy a variable Utility Charge for every night you stay in them. Also remember that resorts are often far from urban centres, and meals don't come with your Timeshare. Budget for transportation and food, but even that may change.

    The future

    The Weeks System is likely to give way to the far more flexible Points System: your Timeshare will be valued in points which can pay for airfare, car rental, meals, etc. We were delighted with our stay in the Luxury Club in the prestigious Le Royal Meridien Hotel in Mumbai. Fifteen astute businesspersons have already become members of this new-concept urban Timeshare on the Points System.

    The Bottom Line

    But we'll leave the last word for Manoj and Rina. They love their annual holidays abroad: "Great! Absolutely worth-while!" they gushed. "We're really glad we invested in this Timeshare."

    * * *

    How does an exchange work?

  • If you've bought a week of Timeshare and you don't intend to use it in your home resort, deposit with RCI as soon as possible. RCI will then give it a Trading Power depending on five factors: the size of your apartment; its Red, White or Blue season; how popular it is with other Timeshares; when you deposited it; and the customer feedback received on your resort. This Trading Power, along with your request specifying where and when you'd like to spend your next holiday from among the RCI's resorts worldwide, is fed into RCI's computer. The computer will then search for deposits made by other Timeshare owners which best match your needs, and the Trading Power of your deposit.

    As soon as it finds such a place, or places, you're informed. You pay the Exchange Fee and your Timeshare accommodation is confirmed.

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