There is significant discussion and debate about whether timeshares or hotels are a cheaper option when vacationing. The internet is riddled with ‘Timeshares vs. Hotels’ themed articles. There seem to be a plethora of different opinions and the score is not quite settled on the topic of Timeshares vs. Hotels. The reason for the lack of a definitive winner on the monetary front is simply a matter of circumstances that are largely influenced by individual situations as well as global financial trends.
If you are looking at a cost analysis to find the most affordable stay for your vacation will timeshares really save you any money? There are several factors to consider when deciding where to stay on your vacation that will influence the price, including location, time of year, and quality of the resort or hotel. So, is there a general rule to follow when deciding whether timeshares or hotels are cheaper?
Taking a closer look at the cost analysis in both general and specific terms will help you decide. Ultimately opinions fluctuate radically, however numbers are something that can be examined with a neutral eye, and it is from this perspective that our exploration begins.
Timeshare Ownership Vs. Hotel Stays
- Upfront Downpayment
- Legal Fees
- Monthly Maintenance Cost
The cost of the initial purchase of a timeshare varies significantly depending on location, time of year, and overall real estate market. Regardless of these factors, a significant output of money is required initially to purchase a timeshare even if this saves money in the years to come on vacations.
Timeshare down payments can vary from $10,000 – $30,000 and beyond depending on the quality or luxury of your timeshare property. For some, is it worth putting this much money down on a vacation home you only partially own?
Furthermore, the purchase of a timeshare is a real estate transaction and usually requires the assistance of an attorney to finalize the transaction. This ownership is also a title that will need to be included in your will for you to pass on to future generations that may not be interested in carrying this burden.
Even if the upfront money for your vacation home is available, legal fees are no issue, and those included in your will do not mind taking over the responsibility of timeshare ownership, there remains the issue of the sometimes costly maintenance fees.
Timeshare ownership can seem like a delight at first glance, however, the output of funds upon purchase can be that of a modest home. If you have a mortgage as well, plus monthly maintenance fees, is it really worth it?
It is often extremely difficult to sell your timeshare, even donating your timeshare to a charity is sometimes not even an option.
So, unless money is not an issue for you, the upfront cost analysis of owning a timeshare hardly seems worth it as an investment for vacations, or as a financial investment. That being said, the option to rent a timeshare from an owner who has been lured into buying a timeshare is often much cheaper than any hotel stay you can find.
Timeshare Rental Vs. Hotel Stays
It is also possible to stay at a timeshare as a renter, and this option tends to be particularly more cost-effective than owning a timeshare or staying at a hotel. Many timeshare owners who have tried to get rid of their timeshare unsuccessfully are attempting to salvage monetary loss by renting their timeshare out.
The best place to look for a timeshare rental is at a virtual auction such as eBay. This approach requires active participation from the consumer to ensure the best price is found, so if you are up for a virtual bidding session renting a timeshare from an owner who is strapped for cash then consider renting a timeshare.
The Real Cost of Ownership and Its Benefits With Large Conglomerate Organizations That Use the ‘Points’ system.
Not all timeshares are deeded. Such is the case with the points system that has become the most popular means of timesharing today. Large conglomerates such as Wyndham, Marriott, Hyatt, Disney, and others use the points system which can be both advantageous and disadvantageous. It is essentially keen on joining a club and allows you to use the resources of the club in different locations. Your points then become the currency of whichever club you choose to join (Perhaps think about it as if you joined a country club with a variety of locations).
According to Forbes Advisor the points system has one major downfall, which is that it is subject to inflation:
“Points offer more flexibility but can oftentimes suffer from inflation,” Schreier says. “Meaning, what requires 100 points today may very well require 150 points next year.” (1)
Unless you and your family are particularly partial to an organization (for example, you have children and a Disney timeshare is very appealing) then it is definitely more cost-effective to look for sales on hotel stays and shop around than owning a timeshare.
As of 2019 the buy-in for a Disney timeshare was roughly $20,000 USD (1), if you do not have this kind of cash available for vacations, take some time to look around for incredible deals on resort vacations that actually do exist!
Bargain Deals On Hotel Stays Should Not Be Overlooked
A huge factor in finding an affordable vacation stay is looking out for bargain deals for all-inclusive resorts through platforms such as:
- ‘Cheap Flights’
- ‘Price Line’
Depending on how flexible you can be with your vacation dates, you will be amazed at the deals you can find with a little hunting (far cheaper than any timeshare ownership and no strings attached!). Sometimes all-inclusive resorts will offer sales that will give 65% off your stay. This includes food, lodging, and entertainment in some of the most beautiful places on earth.
This method, of course, requires looking around, waiting, and being flexible with dates. However, they have proven to offer the cheapest possible vacations, aside from staying in a hostel, or on a friend’s couch.
Timeshare Participation Vs. A Hotel Stay: Is the Verdict In?
Depending on personal factors and your financial situation buying a timeshare with a deed or participating in the points system may be great for you for a variety of reasons.
If a cost analysis is made and it is the only factor determining where and how you can vacation it is overall much more affordable to stay in a hotel, or a vacation rental than to buy a timeshare. Particularly when one considers how much the price of hotels can change in an instant. If you are savvy and look around for some excellent deals, then hotel stays will almost certainly be the more affordable option.