USA Today recently published an article by Roger Yu that highlights the timeshare industry and the difficulties incurred during this economic downturn. The article tells specific stories of timeshare owners being excited when purchasing their timeshares only to realize soon after that their decision to purchase was a financial blunder.
Because of the economic downturn, these stories have now hit the mainstream media. That said, timeshare owners have been living through these stories of struggle long before. Timeshare Relief has been serving timeshare owners since 2004. What was a silent, yet desperate group now has some of the spotlight.
Here are some highlights of the article:
- Stacey Udell purchased a timeshare for $3000 in the Bahamas off Craigslist. Never used it. Her maintenance fee bill in 2010 is $1,650, up 20% from 2009. Another $250 charge was to offset other owners not paying their maintenance fees.
- Timeshare industry is hurting. Easy credit is no longer available for financing. Development has stopped. Defaults are rising. Companies are laying off employees. Resale market is tanking.
- What was over a $10 billion industry, the timeshare industry slipped to $9.7 billion in 2008 and plunged more than 40% to about $6 billion.
- Timeshare mortgage defaults have increased every quarter in 2008 to total 8% of time-share mortgages. Meanwhile maintenance fees have grown an average of 12% a year since 2005!
- Complaints of resale scams have increased drmatically. These complaints stem mainly from listing companies that claim to be able to sell timeshares, but do not do much but list the timeshares for sale.
- Nancy & David Lehenky pay $1,100 a month and $2,000 a year in taxes & fees for their $60,000 timeshare mortgage. After David lost his job, they could no longer afford such payments. They asked Marriott to take back the timeshare. The company refused.
- “No one wakes up in the morning and says they’re going to buy a time share. They come in and get compelled by the product. It’s an emotional buy.”
- Summers Doonan & her husband Brian, bought a time-share in 2007 for $18,000 as an impulse purchase. They wanted to use it an an exchange property, but have found it difficult to schedule. They pay $1,150 in taxes & maintenance fees every year, plus $90 a year for the exchange club fees and $200 for every exchange transaction.
- Ads for selling timeshares have increased 25% over a year ago on the Timeshare Users Group online forum.
