Should you invest in a timeshare?
The short answer is no. Based on our number crunch and the complaints we've received from our members, CHOICE does not recommend any timeshare product. The best thing you can do is avoid these high-cost holiday traps and book each holiday as you need it.
Some timeshares can take from 11 to 38 years to work out cheaper than simply booking a Surfers Paradise apartment online every year. Other timeshares will never be cheaper than booking online.
The contract is the catch. A typical timeshare contract locks you in for 40 to 60 years or more, and you're obliged to pay fees every year, whether you book a timeshare or not.
These fees are also subject to a percentage increase every year, compounding your costs. For the cost of a timeshare in Surfers Paradise, over the life of the contract, we found the entry fee plus the ongoing fees could add up to as much as $450,000.
Another downside? If you're travelling at peak times you may have to plan up to a year in advance to secure your timeshare accommodation, so it can be far less flexible than booking yourself or visiting a travel agent.
How does timeshare work?
Timeshare memberships come with a set number of points for members to spend on accommodation each year. For example, you might buy into a 6000 points a year membership for a one-off cost of $30,000. Every year you receive the 6000 points – but you also have to pay fees every year.
Accor Vacation Club, Classic Holiday, Marriott Vacation Club, Ultiqa Lifestyle and Wyndham World Mark South Pacific Club have accommodation in several destinations in Australia and worldwide.
The number of points you need to book accommodation will vary depending on the season (high or mid), how long you stay and the type of accommodation, but they're capped at the original price for the duration of your contract:
- Accor Vacation Club's contract runs until 2080
- Wyndham has two options: the Premier ownership with all the perks runs until 2080, while the Standard ownership will continue for the lesser of either 40 years from purchase or the life of the Club
- Classic Holiday runs until 2084
- Ultiqa Premium ownership continues until 2081, or the Standard option for 40 years
- Marriott operates until 2061.
There are no termination clauses in any of the product disclosure statements (PDS), so once you sign up, you're locked in for the lifetime of the club or the agreed contract period.
Accommodation reservations can be made online or over the phone. Bookings are available from 11 to 20 months in advance, depending on the contract, and you're encouraged to book early.
They're processed on a first-to-book, first-served basis, subject to availability. Higher or different level memberships have a larger booking window at Accor, Marriott and Ultiqa. Some of our CHOICE members complained about the long lead-time and a lack of available accommodation when they tried to book.
Read more on the elusive value of timeshare scams.
Fees, fees and more fees
Membership comes with a series of costs:
- Upfront membership fee
- Annual levies, increasing every year at up to 6.5% or the Consumer Price Index (CPI)
- Additional costs for housekeeping and international travel
- Mandatory fees like 'establishment fees' and exchange fees
After the upfront buy-in fee, you pay an annual levy for operating expenses such as management fees, landscaping, cleaning and refurbishment costs, as well as administrative expenses.
Membership usually entitles you to at least one housekeeping service per year, although this differs by club and the subscription. One club's 'housekeeping token' is valid for a seven-day stay or less. And yet housekeeping is mandatory for all stays, so if the complementary housekeeping is exhausted you pay for the rest.
Other additional costs can accrue for using international properties, and the PDS for all five clubs mention special club fees for repairs or other specified events.
Wyndham costs are for a Standard room. Classic Holiday, Marriott and Ultiqa include a set amount of housekeeping, and charge for any extra required. For all clubs, housekeeping is obligatory for every stay, with 7 days the maximum period allowed before cleaning.
|Studio or hotel room
Timeshare contracts with full or premium membership are only offered if you attend a presentation by the club.
Timeshares bought online or privately usually come with restrictions. For example, your accommodation options might be limited to the number of resorts available at the time of signing up, or to resorts within Australia, or you might have smaller booking windows.
We sat through presentations at Accor, Classic Holiday and Wyndham to bring you this information. For further advice, read our article on how to survive a timeshare presentation.
At the presentation, an agent:
- flogs you the membership perks
- asks questions about your holiday patterns
- determines the amount of points you need a year for your travels
- offers you a membership according to your travel habits.
The membership offered will include a certain number of points each year. If you need more points, you can accumulate them for one or two years or borrow from an upcoming year (for Wyndham this only applies to the Premier Ownership). Alternatively you can switch to a higher membership with more points included, but you may have to pay a fee for upgrading.
At timeshare presentations for Accor Vacation Club, Classic Holiday and Wyndham, we were also offered a financing scheme. With a 10% upfront deposit on the membership fee, you could finance the rest over a period of seven and ten years respectively, with an interest rate of 14–15%. Doing so would of course add even more debt to your timeshare contract.
Till death do us part
So, if you've got your head around all of that, the timeshare structure seems quite straightforward. You sign a timeshare contract and you're locked into compounding annual fees, much like the compounding interest on your mortgage, for the duration of the contract. For the full membership option, that's until 2061 for Marriott, 2080 for Accor and Wyndham, 2081 for Ultiqa Lifestyle and 2084 for Classic Holiday timeshare – much longer than the standard 30-year mortgage.
So how much money are we actually talking about over the lifespan of the contract?
The least it will cost you for one week's accommodation each year for the duration of the contract is $103,637, if you holiday in a one-bedroom apartment in mid season with Accor. At the other end of the scale, a two-bedroom apartment with Marriott in high season will lock you into $450,001 for the term of the contract.
Just book it online
To figure out if a timeshare is worth it, we calculate how long it takes for the ongoing annual costs of a timeshare in Surfers Paradise to be cheaper than the cumulative cost of booking an apartment online every year. This is listed as 'Years to recover costs' in our comparison table below.
The result? For an annual family vacation in a two-bedroom apartment during high season, the soonest it would become cheaper than booking online is 16 years with Accor Vacation Club and Ultiqa Lifestyle.
If you really want to blow your money, then travel in school holidays with Marriott Vacation Club or Wyndham World Mark South Pacific Club. Our calculation showed that in the 43 years of contract for Marriott and 62 for Wyndham neither gets cheaper, so both will likely cost you more than booking online ever will.
OK, so perhaps timeshare isn't for families travelling to the Gold Coast in the school holidays. What if you're not bound by the school holidays?
Ultiqa Lifestyle's two-bedroom apartment will become cheaper in 11 years, but a one-bedroom apartment with Marriott Vacation Club, even outside school holidays, will again be more expensive for 43 years. After five years, Marriott's costs for a two-bedroom apartment for one week in high season is 938% more than booking.com.
Two-bedroom apartment for one week in mid-season
after 5 years ($)
after 5 years ($)
|Years to recover
Two-bedroom apartment for one week in high season
after 5 years ($)
after 5 years ($)
|Years to recover
The fees and costs used in our calculations were collected by us from Booking.com and provided by the timeshare companies between November 2017 and January 2018. For Classic Holiday, Marriott and Wyndham, we use averages of the offered rooms to calculate the number of points required. An inflation rate of 1.8%/annum is applied to the average cost of similar accommodation on Booking.com over the same time frame. The period 2018–22 was used to calculate the estimated cost after five years.
About our calculations
To calculate the costs of a timeshare membership we include:
- the upfront fees for membership
- the mandatory exchange dues for Marriott and establishment fees for Wyndham
- Points & Play membership and costs for Classic Holiday (required for full membership perks)
- the compounding annual levies at 1.8% CPI.
Bear in mind we haven't included additional housekeeping fees and exchange fees for international travel.
Depending on the contract, fees could increase each year by up to 5%, 6.5%, or the Consumer Price Index (CPI), whichever is the greater of the two. We've taken the conservative option and compounded the fees and the price of the apartment booked online at the current CPI rate of 1.8%.
All timeshare companies have different membership levels and assign different points to their accommodation. We use the example of travelling for one week a year to Surfers Paradise. The points needed for this stay give us the minimum membership level required, and with that the costs for the accommodation, locked in for the term of the contract.
Points required vary depending on the season:
- High season: School holidays in Australia.
- Mid-season: Date based on timeshare companies' common timeframes.
Classic Holiday, Marriott and Wyndham also had variations based on whether an apartment has a view or not, so we took the average of the accommodations.
On booking.com we used apartments in Surfers Paradise in the same area as the timeshare resorts in high and mid season, with four to five stars and user ratings above seven to ensure the quality of accommodation. They all have a kitchen or kitchenette.
We allocated rooms to singles and couples or families on the following basis:
- Single and couple: One-bedroom apartment, usually suits two to four people; booking.com quotes are based on two people.
- Family: Two-bedroom apartment, usually suits four to six people; booking.com quotes are based on four people.
Prices were based on availability on 28 November 2017 for Accor, Marriott and Wyndham, and the 25th and 28th of January 2018 for Classic Holiday and Ultiqa, for one week's accommodation in July, October, December 2018, and January 2019. We disregarded the school holidays in April 2018, since timeshare companies advise booking up to a year in advance.