Timeshares: Freebies or Scams?

Given the deceptive ways the travel industry promotes at least some of its services, you often have a tough time telling the difference between a windfall and a scam. A reader recently asked about a specific promotion:

“Do you know anything about a vacation club promotion in Acapulco? We won a one-week stay there but we do not know anything about the property. Airfare is expensive so we do not want to go unless it’s a nice place.”

The short answer is the bigger the “win,” the bigger the risk. This message really brings up two separate but related questions: whether a given vacation club site is a good idea, and whether a specific promotion is genuine or a scam.

Vacation clubs equal timeshares

For the most part, a “vacation club” is usually no more than a timeshare program in a slightly different costume. And they share the same advantages and disadvantages of timeshares, as I’ve previously examined. Briefly, you buy into a program that gives you access to a resort condo in one-week intervals or multiples of one week. You pay an up-front entry fee plus annual “maintenance” fees plus an occupancy payment. Most timeshares and almost all vacation clubs allow you to trade your base interval among several or even several hundred different resorts. Depending on particulars, a club membership may cost more or less than renting a conventional vacation property in the same or equivalent condo complexes.

If you buy in at the developer’s asking price, a timeshare “investment” almost always loses value. That’s why most experts recommend buying a resale rather than a “retail” timeshare.

Timeshare evaluations

Because most timeshare units are in resort locations, you’ll have no trouble finding all you need to know about the area’s general location, climate, activities, and such. Get online or get a good guidebook.

As to the specific resort, you’re usually able to find some sort of independent evaluation. The resort mentioned by our reader, for example, has almost 20 firsthand evaluations plus dozens of extended discussion entries in TripAdvisor (the Internet’s largest online site for travelers’ hotel and resort evaluations). The majority, by the way, seem to favor the resort, with a few strong minority reports.

Scam warnings

All too often, travelers who think they’ve “won” something actually wind up losing&#8212their money, their time, or both. Although I’m not aware of the particular promotion our reader cited, I can warn you about the range of possible scams you’re likely to encounter:

• Whenever you supposedly “win” a lottery or sweepstakes you didn’t knowingly enter, there’s a good chance it’s a scam. Scamsters and promoters buy lists and often snag your cards out of “request more information here” or “guest” boxes. However gained, promoters use those name lists as targets for a variety of scams and deceptions. I have no idea how our reader “won” this particular deal, but it sounds a bit dicey.
• The most benign “free” or heavily discounted vacation or accommodations semi-scam is a visit subsidized by an outfit trying to sell you a timeshare or vacation club membership. Their salespeople are very good at what they do, and they’ve refined their pitches over the years. As a result, getting a “qualified” prospect onsite for a hard-sell session is worth somewhere around $200 to $400 per visitor. So it’s not unusual to find “free” weekends at timeshare resorts that require you to attend a half-day sales session. As long as you show up for the full program, you do get the free trip. The risk is that, no matter how strong you think your sales resistance is, you may end up spending tens of thousands of dollars for a membership.
• A more pernicious scam offers one component of a vacation “free” or at a huge discount but marks up the price of the remaining component(s) to cover the true cost of the entire trip. The scam tipoff is simply a requirement that you buy the rest of the trip from the promoter. I’ve seen both variations: “free” accommodations when you buy your air ticket at the promoter’s price or “free” air tickets if you buy your accommodations through the promoter. Either way, you wind up paying more than if you’d bought both separately, on your own, or bought an honest package. I can’t tell whether our reader’s “expensive” airfare was inflated or not, but if the deal required the reader to buy air tickets from the promoter, it was almost certainly a scam.
• Also insidious: a “bait-and-switch” promotion. Sure you get the “free” accommodation, if you don’t mind sharing a non-air-conditioned room over a loading dock with a few hundred cockroaches. Of course, when you complain, you’re told, “If you’re not happy with your room, we can upgrade you to a better room or a better resort for only $ (whatever).” And, of course, that upgrade fee is more than you’d pay for a comparable room.
• A real scam tip-off is when a promotion gives you “free” room, airfare, or whatever, but requires you to pay a “registration” fee or something similar up front. If you’re lucky, you’ll eventually get your trip; you’ll just pay more than if you’d bought an honest package. But it’s more likely the promoter stalls you along for many months about the deal being “unavailable,” then finally disappears entirely with your upfront payment. Unlike the others&#8212which are misleading, but you actually get to travel&#8212this one is out-and-out fraud. The promoter never intends to give you anything.

Too good?

Almost all of us who write about travel from a consumer standpoint agree on one basic truth: “If it looks too good to be true, it probably is.” For some reason, many people will believe fantastic claims about travel that they’d reject out of hand in other consumer markets. And even if a “free” deal really doesn’t have any catches, you still have to declare the value on your income tax.

(Editor’s Note: SmarterTravel.com is published by Smarter Travel Media LLC, a member of the TripAdvisor Media Network.)