Timeshare Evolution

 

The timeshare concept has, surprisingly, been around for approximately 70 years and during this time has evolved through several distinct (albeit overlapping) phases.

The Timeshare Industry - A Historic Perspective
Emergence 1950's - early 1970's
  • Advent of UK state pension in late 1940’s creates the 'Grey Pound' – ‘older’ people with an income who could afford low cost holidays.
  • British holiday camps (eg Butlins) look for opportunities to generate revenues/profits during ‘off-season’ or “runt weeks” when the camp would otherwise be closed  – targeting the ‘Grey Pound’ with low cost holidays and delivering entertainment tailored to the age group.
  • To support the investment, holiday companies required the pensioners to return annually, therefore sold the weeks as ‘a right to occupy’ the apartment for the rest of their life, in exchange for them paying a proportion of the upkeep - Rest of life contract morphed into perpetuity - TIMESHARE WAS BORN.
  • The selling and reselling of the new product “timeshare” thrived, and many other holiday resorts came on stream copied the formula and participated in selling timeshare – the concept being exported to Norway/other Nordic countries and France.  ‘Exploding’ in Spain and the Canaries.
Growth Early 1970's - late 1980's
  • The explosion of timeshare touting and selling.
  • Timeshare sales remained quite conservative in the UK. In France they exploited sales of timeshare in ‘out of season’ ski resorts, island retreats in Norway.
  • Many retirees regaled to their families the benefits of buying timeshares, voiced the pride in the purchase and explained they would leave it in their will.
  • Mid-70’s saw the emergence/explosion of packaged holidays to Spanish and Mediterranean destinations, such as Costa Blanca, Benidorm and Cyprus and the Canary Islands. Demand and prices exploded.
  • Growth in demand resulted in massive construction to develop resorts.
  • Timeshare boomed as developers sought to ensure revenues through ‘encouraging’ the return of tourists AND given the success of the concept in the UK.
  • The rapid growth in supply along and need to ‘off-load’ inventory (to offset financial issues) saw developers introducing advanced (high pressure) sales techniques including touts to 'herd' prospects to sales presentations.
Maturity and Criminality Early 1990's 
  • Industry moved to an ‘over-supply’ situation. More aggressive sales practices were employed, and many robust sharks moved in, introducing increasingly aggressive  sales techniques – ‘prospects’ potentially being harangued for hours at a time, (allegedly the longest sales presentation taking 3 days).
  • Runt Weeks remained a problem for developers, who would seek to distribute costs amongst owners which saw maintenance fees rise.
  • Against this back-drop consumer complaints exploded.
  • New forms of timeshares emerged by developers seeking to address problems – eg  Floating Weeks.  Whereas the Fixed Weeks allocated occupation to a specific owner for a specific week, in Floating Week scenarios the owner joins a ‘pool of owners’ and select a week as and when they required.
  • Selling the new concept created new problems – (i) repeated/increased intensity of aggressive sales techniques selling both fixed/floating weeks, (ii) over-subscription  of owners to apartments, ie nominal 52 weekly slots were sold up to 200 owners in one instance.
  • Mis-selling reached epidemic levels, perverse concepts were in existence including consumers being harangued, small developers were fed “shut up juice”, dissenters were threatened, whistle blowers were dealt with, the massive frauds covered up, and perverse rip offs were smoothed over by a 'gangland' culture.
  • The law makers in Spain had to act fast and to save its own holiday industry. In this back-drop, hordes of scammers move in claiming to be the knights in shining armour and targeting those who simply wanted out of the evolving timeshare nightmare. They delivered promises of guaranteed re-sales, cash-back and resort compensation and took money up front delivering nothing other than despair.
Morphing and Legislation 1990's
  • The UK introduced the Timeshare Act 1992 and amended it in 1997, albeit,  it had little effect, as the majority of timeshare owned was located abroad and the models were not fully understood by government. Nonetheless, consumers were given a “cooling off” period.
  • Law 42/98 (Spain) was introduced in 1999 in response to the UK timeshare law and the requirement to transpose into law the EU Directive 94/47/EC.
  • Other consumer protection including The Unfair Terms in Consumer Contracts Regulations 1999 and the United Nations Guidelines for Consumer Protection, replaced the consumers wooden shields with armour.
  • Many Spanish resorts/developers perceived the new legislation to be extreme and contravened the Spanish legal system and so ignored it.
  • The emergence of the internet (Timesharetalk.co.uk, Myspace, Facebook and Trip-Advisor ('crimeshare websites')) enabled individuals to communicate more effectively  publicising, for almost the first time, the scale of the historic mis-selling to become known.
  • In an effort to avoid compensations claims and to keep one step ahead, some members of the industry introduced new timeshare models; including Holiday Clubs, points systemp and others. This enabled them to charge existing owners more money for a product whist taking back and extinguishing the liability of the previously mis-sold inventory thereby avoiding possible court actions.
The Exodus Early 2000's - Present
  • The publicity relating to the bad practices of the timeshare industry rapidly eroded sales to new customers with significant numbers of consumers looking to exit their contracts in the light of escalating annual fees and concerns about the long term / inperpetuity applicability of contracts.
  • Leading figures in the emergent consumer movement in the industry were Paul Anderson (TimeshareTalk.co.uk) and Mr Alexander (Sandy) Grey (Timeshare Association and the Crimeshare websites).
  • Timesharetalk gave consumers a voice, made to governments. Crimeshare exposed, re-exposed, vocalised and delivered information, opinions and speculations into the public domain including the core consumer complaints and delivered group litigations to the courts.
  • A European wide network would be formed to network with other self-styled consumer associations.
  • Sandy Grey’s the “don’t pay your maintenance fee” campaign, delivered the overcharging timeshare developers a major financial blow. Coupled with the challenge “if you think your fees are lawful, take your chance in court”
  • This new model of selling timeshare became even more convoluted with increasingly ambiguous contracts – the intention perceived by many, to leave open avenues to later claim it’s not a timeshare, or a holiday club or the sale of a currency. 
Litigation Early 2012-Present
  • As the consumers had access to website forums, they could freely converse with each other. Groups gelled together discussing matters and some became intent on protracting litigation.
  • The upsurge in litigation attracted people/organisations looking to offer legal services and brought with them the similar sales/marketing techniques (eg cold-callers/touts ) used to sell the original timeshare resorts. 
  • Many calls were made to convince timeshare owners to either sell the timeshare with them or let them litigate the matters. Often claims were made that compensation was around the corner and that the case was a ‘slam dunk’.
  • Many desperate owners paid substantial up-front sums to obtain the best legal expertise yet received nothing. No legal action, no resale, no compensation and no termination of the contract
  • The voices of legitimate legal professionals becoming drowned out by fake solicitors and companies run by ex-timeshare salespeople and touts - bringing  about a whole new era of mis-selling in legal services, timeshare reselling and Leisure Credits.