Reader Barry asks,
Any thoughts on the pros and cons on timeshare ownership, namely Marriott? Even if you could maneuver a 20 to 25% discount off the purchase price?
I am not an expert in timeshares, but I’ve certainly been around plenty of horror stories about them. So let me share a general framework for thinking about them.
- There are certainly good deals to be had with timeshares, but these are serious investments and you need to be educated. The people selling them to you certainly are. You don’t want to make a big purchase with a big information asymmetry so if you aren’t educated you’re probably getting killed.
- While there are some benefits that may only accrue when buying a timeshare as the original owner directly from the chain, in general the timeshare resale market may provide you with better deals for a materially similar product.. and at the very least you should investigate the resale market to give yourself insight into the market value of the asset you’re purchasing.
I’m generally pretty against timeshares for most people, and for most savvy miles and points hobbyists especially.
They’re a big financial commitment, you’re very much in the hands of the program and how it chooses to manage itself over time, and I’ve seen tons of program devaluations. (You think mileage programs are shady with this…!)
You also need to understand how you’ll use what you’re buying. With many programs you’ll need to be flexible if you actually want to book something, especially outside your home property and without converting to points which frequently isn’t a great deal (you may not be buying your points especially cheaply – and remember do not calculate based on the value of those points you’d get today but on what you think an award chart might do years into the future). Booking a year out for popular places isn’t for everyone.
Personally I earn and use points for my hotel needs, so I don’t want to fork over a lot of cash upfront. But others find it a way to provide lodging at a fixed upfront price (plus maintenance fees) that can work out well.
I end where I started, buyer beware in this market and it’s important to become a very educated consumer about the product you’re buying — don’t turn up at a seminar and buy on the spot ever.
- You can join the 40,000+ people who see these deals and analysis every day — sign up to receive posts by email (just one e-mail per day) or subscribe to the RSS feed. It’s free. You can also follow me on Twitter for the latest deals. Don’t miss out!