How Does Timeshare Work?

Whole tropical island within atoll in tropical Ocean. Uninhabited and wild subtropical isle with palm trees. Inscription "TimeShare" in the sand on a tropical island, Maldives.
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After two years of poor sales, hotels have no choice but to make up for the lost time by increasing their prices, at a rate of 13% per year according to predictions. Is this a daunting prospect for you as you ponder your future vacation options?

Buying a timeshare is one way to control your vacation costs every year, but it’s not something you should enter into without due consideration. So, it makes sense to ask, ‘How does timeshare work, and is it right for me?’ before you take the plunge.

Keep reading for more information that could help you answer these questions. 

What Is Timeshare?

Timeshare is a vacation concept embraced by over 22 million people worldwide. It entitles you to enjoy a week or more’s vacation every year according to the terms and conditions of your contract.

You’ll typically pay a lump sum upfront to own your right to vacation at the property, as well as annual or monthly maintenance fees toward its upkeep.  

Occasionally, you might need to pay a little extra for extraordinary items like refurbishment.

There are several timeshare products available on the market today to suit a variety of vacationers.

How Does Timeshare Work?

At the outset, timeshare agreements restricted owners to one or more vacations per year at a particular resort. They had to enjoy their vacation at the same time every year.

Soon this proved too restrictive for most families, and so the innovative timeshare companies came up with a few more flexible alternatives.  

Flexi week timeshares allow owners to occupy their vacation unit at different times of the year, depending on which season they bought in. 

For instance, Hilton timeshare seasons work according to four named categories. Other timeshare companies might use simpler classifications, like High, Low, and Mid-seasons. 

So, if you buy a week in the bronze or medium category, you can occupy it during any week of that season. 

Some timeshare resorts offer a mixture of fixed and flexible weeks, while others limit your right of occupation to every two years.

As the timeshare industry evolved, most resorts signed up with exchange companies like Resorts Condominiums International, which allow owners to swap weeks amongst each other. 

The exchange companies indirectly led to the formation of vacation clubs. These clubs feature a portfolio of resorts built and owned by the same company.

Members of the vacation club buy the rights to occupy time at any of the resorts included in this portfolio. Examples of modern-day exchange clubs include Disney Vacation Club, Marriott Vacation Club, and Hilton Grand Vacations.

Each time interval at every resort in the vacation club’s portfolio has a points value. When you sign up as a member, you pay for the right to use a certain number of points every year. You pay maintenance fees in proportion to the value of the points you own. 

Like ordinary fixed and Flexi week timeshare, you can exchange your points bookings with other owners using exchange clubs.

Consistent evolution is only one of the reasons, so many people choose this way to vacation. There are many other benefits to owning a timeshare, too. 

Benefits of Timeshare Ownership

When it comes to costs, it’s important to understand that buying a timeshare is like paying for your future holidays upfront. This protects you from the great unknown when it comes to increasing accommodation costs.

Other benefits of timeshare ownership include:

Cost-Effective Vacations

Long-term financial considerations aside, timeshare vacations can work out a lot cheaper than regular hotel stays in several ways. For starters, most resorts in the timeshare system have full or partial kitchens.

That means you can save a lot of money on take-out meals and eating out during your vacation. It’s a godsend for parents with young children who have small appetites or fussy eating habits. 

Other cost-saving benefits of timeshare vacations include free parking, in-room laundry facilities, and lots of free entertainment. 

Outstanding Resorts

Many timeshare companies rate their resorts according to the standard of accommodation offered. That means you know exactly what to expect when you arrive.

You’ll also find that these properties offer exceptional facilities like pools, games rooms, sports facilities, and easy access to major tourist attractions. Most of them offer free children’s activities, daily entertainment, and excursions to nearby sights, too. 

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The best timeshares even have water parks on-site or direct access to some of the world’s most exciting theme parks. 


Staying in self-catering timeshare accommodation means you aren’t tied to hotel mealtimes. So you can plan your day around your needs, rather than the hotel’s schedule.

You can grab a bite to eat whenever you see something you like, and self-catering accommodation gives you the option to experiment with traditional local ingredients while preparing your meals. 

When you exchange your week via a reputable exchange company, you can take a trip overseas or go on a cruise at much cheaper rates than you’ll find at any hotel. You can even book tours and adventure travel this way, depending on the product you own. 

Guaranteed Vacations

Vacations are an important part of a healthy lifestyle, and it’s easy to keep putting them off due to circumstances.

When you own a timeshare, you must book your next vacation many months in advance. This makes it easier to arrange your life around your vacation instead of the other way around. 

There are no guarantees in life, but when you’re making ongoing payments toward vacations, you’re bound to take the time to get away from your daily routine.

Without a timeshare to motivate you, there’s a good chance you’ll keep postponing your well-earned break indefinitely.

Potential Earnings

Timeshare owners may rent out their annual vacation if they can’t make it that year. This is an excellent way to make some money toward your ongoing maintenance fees and even profit from your membership.

Many timeshare fans who can’t afford a membership opt for this type of vacation, and you won’t usually have any problems renting out your booking at one of the more in-demand establishments.

You can also sell your timeshare product if you want to, but you’ll rarely profit from this exercise.  

Drawbacks of Owning a Timeshare

Although there are thousands of happy timeshare owners around the world, there are also those who feel it doesn’t work for them. These are some reasons why:

Money, Money, Money

The initial costs of a timeshare membership are extremely high and work out to be almost the same as buying a second home. That means you’ll most likely need a loan to pay for your membership.

Most banks don’t offer finance for timeshare products, as they aren’t considered tangible assets. After all, you’re buying time, not property. 

For this reason, you’ll probably need to finance your purchase via the seller, and they can charge whatever interest rates they like. In many cases, you’d earn more from your money by leaving it in the bank or investing it in something more concrete. 

Yet, it’s important to remember that timeshare is priceless in that it represents a commitment to quality family vacations for many years to come. 

While most timeshares offer excellent value, endless variety, and boundless experiences, these experiences aren’t free. You’ll still need to pay some associated costs, like air travel and car hire, to get there. 

Cancellation Difficulties

It’s extremely difficult to cancel a timeshare outside the cooling-off period offered in your contract. So what do you do if you can’t afford to pay the associated costs anymore? 

Most timeshare companies won’t take their weeks back, and neglecting to pay your fees can negatively impact your credit score.

Since many timeshare contracts last for decades or even your lifetime, the only option is to try and sell your product to someone else. You can’t donate it to a charity or give it away, either, as it’s unfair to saddle someone else with the ongoing expenses associated with a timeshare. 

So, consider whether you can afford the luxury of owning a timeshare for the duration of your contract before you sign up. 

Considering Your Future Holidays

Now that you’ve got some answers to your question, ‘How does timeshare work?’, you’re in a better position to make an informed decision before handing over all that cash.

Buying a timeshare is an expensive, lifelong commitment, so make sure you think it through from every angle before you sign up. 

Do you prefer more conventional ways to vacation? Browse our travel section for tips and inspiration. 

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