Exchange rate misery for timeshare owners
Timeshare owners suffering record high maintenance fees as pound hits record low.
Regular holiday makers can avoid the hit of poor exchange rates by staying in their home country. UK timeshare owners are stuck with their destination resorts, often in countries where their pound is worth a lot less than its recent value.
The timeshare stealth”tax”
Timeshare owners pay large sums of money for memberships to what were once private resorts. The salesperson mentions, seemingly as an afterthought, that there will be a small yearly cost for maintenance. “Fair enough,” thinks the client. “The place will need painting every so often, and the pool kept clean…”
The fee may seem high compared to the client’s idea of running costs for the type of apartment involved, but if it is less than a comparable hotel would cost for a week, the maths seem to work.
They sign, and pay their deposit. For many owners, it is a decision they regret for decades.
Timeshare sales have dwindled to a trickle since their heyday in the 1990s. The only significant revenue stream remaining to those resorts still clinging to financial life are the annual maintenance fees. These are not tied to inflation and can be raised at the discretion of the resort.
Members are legally obliged to pay whatever the company decides, no matter how unreasonable. Some members report their annual fees having risen toten times the original cost.
Still greater fee increases are expected in the immediate future because of the rises in inflation, fuel and other costs. Spanish hotel costs have increased 36% since last year. Timeshare costs in Spain are widely expected to have similar or greater increases.
UK holidaymakers can opt to stay closer to home and take different holidays to suit their budgets.
People who own timeshare in Spain have more limited options, as they are obligated to pay for their holiday in Spain. They can either pay for their holiday, but not take it; or they can take the holiday and suffer the increased costs of holiday expenses in that country.
…and the hits keep on coming…
This means that on top of the price increases resulting from the recent out-of-control inflation, UK holidaymakers get even less value for their spending money in the EU or USA. Again, this drives budget conscious travellers to remain where their money buys them more.
Again, timeshare owners don’t have that freedom.
Timeshare owners in Spain and the US have one more financial blow to absorb. US maintenance fees are invoiced in dollars. Most major European timeshare resorts invoice in Euros (Anfi, Club La Costa, Diamond and Marriott among others)
In the US the pound is worth nearly 21% less than it was at the beginning of the year. So a maintenance fee of $1000 is currently costing a Brit £936. At the beginning of the year the same $1000 fee would have only cost that British owner £780.
Whilst the Euro has not dropped as dramatically, it has still fallen almost 11%. So an (already dramatically increased) maintenance fee is inflated still further because of the exchange rates. A €1000 bill now feels like a €1110 bill to a Brit who has to convert from Sterling.
Get me out!
It is little wonder that Brits are desperate to escape the ever spiralling expense of timeshare ownership. “Members are being hit from all sides,” confirms Andrew Cooper, CEO of European Consumer Claims. “Their fees are increasing at uncontrolled rates, while the money they are paying with is plummeting in value. Members are trapped in holiday patterns that force them to expensive and sometimes unwelcoming destinations.
“These people want what everyone else has: the flexibility to holiday according to their needs and means.
“They want to be free from their timeshare memberships.”
For advice and help on escaping a timeshare contract, get in touch with the team atECC.
- European Consumer Claims
- Sterling hits record low, BoE fails to spark recovery
- British Pound (GBP) to Euro (EUR) exchange rate history
- British pound plummets to record low against the dollar
- Skyrocketing Spanish holiday costs leave timeshare owners facing the heat
- Timeshare owners running out of options as cost of living crisis worsens
- Book your timeshare holiday…. on Booking.com
- ECC contact details
- The cost of timeshare vs regular holidays. Which is cheaper in the long term?
- Timeshare resorts slashing services and facilities as they cease sales operations
- Timeshare owners scramble to escape before 2023 maintenance payment demands
- Feet in the desert. Timeshare industry giants disappearing into history
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First published on MyNewsDesk October 2022