Timeshare Real Estate

Three Canadian developers with a vacation ownership (timeshare) resort in San Antonio,Texas have become the first Shell Vacations Systems (SVS) franchisee.

Partners Gary Buckley, Ian Sarna and Meril Rivard, of the Salado Creek Villas recently completed the signing of all SVS franchise agreements and are moving forward in transforming their resort into a Shell Vacations Systems branded property.

In making the announcement, Tracy Sherles, President of Shell Vacations Club and the architect of Shell’s franchising initiative commented: “It is important to understand that what we have done is truly unprecedented in the timeshare business. For us, signing this franchisee was the first mountain in the range. Now that we’ve climbed this mountain, we anticipate future dealings will be much faster.”

“The signing of Salado Creek by Shell Vacations Systems (SVS) is an integral element of the implementation of our strategic focus which is geared towards increasing market penetration by our points-based Vacation Club. The development and launch of SVS was designed to allow us to increase our market share while maintaining a long-term sustainable competitive advantage in an industry where real innovation is relatively sparse. This is the beginning of a new and exciting era for Shell Vacations,” said Sheldon Ginsburg, President and CEO, Shell Vacations LLC.

“The signing of nine different types of agreements (for software licensing, broker, escrow, rentals, etc.) and about 200 pages of documents were required to launch San Antonio,” said Sherles. “It was a daunting experience, but Gary Buckley and Ian Sarna worked with us side by side as we traveled this path together and helped us to evolve our new product.”

What caused them to take this significant step? Explained Buckley, “We knew that points were the way to go, but it is too expensive for an independent to create the entire system. We were attracted to the concept as well as our impression of the Shell people.

After visiting their offices near Chicago and sales people in several strategic locations, we could see that they run a class act. We felt we could count on them for great support as we move ahead. We were also impressed with how much Shell Vacations has grown and evolved as a company and the great job they’ve done at developing alliances.”

Added Sherles, “As Canadians selling in the U.S., they recognized that they didn’t have the needed knowledge of regulatory issues. When they realized how much they were at risk for noncompliance, it made them even more certain of the value of the franchise. They are happy because of our people and support. We are excited because this affiliation helps us provide balance to our Club and gives us a great destination for our members. The challenge for us is to be able to prove that we can help an independent become more successful”.

“We also knew that buying into an established club system is much better than being a single resort developer”, commented Buckley. “It makes us a part of something larger and puts us on a higher level for our customers. It helps us compete with the brands and public companies, lets us tap into their preferred vendors and enables us to attract better sales and marketing talent. Becoming a franchisee gave us a more competitive product. It’s also a better value proposition and highly cost effective because utilizing all their support systems gives us so many more options.”

Developers’ Background: Crossing Borders
How did this partnership evolve? To understand how these Canadian developers ended up with a Texas hotel and became the first SVS franchisee, is a rather circuitous story.

Gary Buckley has a 20-year background as a Canadian hotelier in Manitoba and Ontario. He began with one hotel in Brandon, Manitoba and grew his business to five locations thru various acquisitions. He is still involved in the hotels and several other businesses.

Ian Sarna had established a timeshare program in 1982 at the Elkhorn Resort, about 2 ½ hours from Winnipeg. The property was a mixed-use project with a small timeshare component. Ian served as director of sales for the Elkhorn’s timeshare program for about 11 years until 1993 when he went into the golf business.

Paul Albertson, who owned the Elkhorn, orchestrated an introduction between Gary and Ian, and in 1999, the two purchased the resort from Paul and became partners.

Explains Buckley, “We soon discovered we had something good as a team. I had a strong hotel/hospitality background and he had a solid understanding of the timesharing sales process; the combination was good for us both.”

Today, the Elkhorn Resort Spa & Conference Centre has 60 hotel rooms and about 35 freestanding chalet timeshare units. It is the only 4-star hotel in Manitoba. Buckley and Sarna have total ownership of the project, which includes a conference facility, restaurant and horse stables.

Says Buckley, “We were already in this partnership at Elkhorn. The truth is, we went to San Antonio to look to buy a golf course development but the deal wasn’t right for us. Someone suggested looking at the Hill Country Inn & Suites and we ended up buying it!”

They admit it was not initially purchased with the intention of converting to timesharing. As a 192-room hotel, they later decided it was marginally successful and possibly over built for its location. Their research revealed the ideal hotel size in San Antonio was about 130 rooms. Having operated a mixed-use resort in Canada, they concluded that the solution would be to convert the hotel rooms to 130 timeshare units.

Although there are no purpose built timeshare resorts in San Antonio and only a few units in one property, there were two resorts or hotel nearby with names that were similar to Hill Country Inn & Suites. So the new owners decided to rename the resort Salado Creek Villas since it was located near a creek with the same name, which translates to Salty Creek in Spanish.

Built around ten years ago, the single level property is located on seven wooded acres in northeast San Antonio, on the 410 Loop, one of the area’s main beltways and convenient to all area attractions. Amenities include a heated pool and cabana, two hot tubs, children’s playground and barbeques. Major nearby attractions include Sea World and Schlitterbaun, which is said to be the largest water park in North America.

Canadians Become SVS Franchising Pioneers
About a year into their timeshare sales program, Buckley and Sarna decided they needed help. Sales were not at anticipated levels. They heard about Shell Vacations franchising plan and decided to jump in, feet first.

Ian Sarna added, “With a single site resort in Canada, frankly, we soon recognized that we didn’t know U.S. marketing techniques. Our limited experience showed us that what worked in Canada did not necessarily work in the States. The mentality of a Canadian and American is quite different. Canadians think price and Americans think payments. This makes the sales process much different.”

“As a franchisee”, he continued, “we knew we wouldn’t have to reinvent the wheel. We could leverage from a company that has been successful for 20 years, giving us a real jumpstart and putting us years and huge sums of money ahead. As a small developer, it would take us five years to get where we are on Day One as a SVS franchisee.”

Next Steps
Since their decision to franchise, the 192 guest rooms of Salado Creek Villas will undergo an extensive $7 million renovation and ultimately be converted to 105 one- and two-bedroom timeshare units. As soon as the state registrations, financing and procedures are in place, the computer system is installed and we have hired the right sales and marketing professionals, the next step is to begin the sales program as a franchisee. We anticipate that this will happen later this summer.”

Says Buckley, “With Shell training us in their systems, providing their Club infrastructure and converting our units into Shell Vacations Club points, we will be a SVC resort on our first day of operations.”

Adds Simon Crawford-Welch, Shell’s Executive VP of Sales & Marketing, “As a regional resort, it is well suited to points because the average stay is short. Having a resort there allows Salado Creek Villas owners to use their points for stays and also to have access to the entire Shell Vacations Club system.

How does it feel being a pioneer? Says Buckley, “As much as there is a downside to being a first guy, there is also an upside. Right now we have their undivided attention and feel like we are ‘attached at the hip’ to make this a success. If we were the 100th franchisee, we might be nervous. But with Shell Vacations standing in the wings, knowing that they are equally as eager for our success, we anticipate a most successful partnership. We are confident being a Shell franchisee will make us more profitable and successful than we’d be as an independent.”

Concludes Sherles, “They know we will be here tomorrow, we have proven processes and –as an independent company - can quickly adapt to changing marketing conditions.

DEAR BOB: Can I deed back my timeshare property to my lender if I no longer want it? -- David Z.

DEAR DAVID: Yes, you can deed real timeshare property to the lender, but the lender does not have to accept the deed. A few years ago, during the California real estate recession, so many borrowers were deeding property to their lenders the state legislature passed a law giving lenders 30 days to accept or reject such deeds in lieu of foreclosure. Deeding the timeshare to the lender, without advance approval, may reflect adversely on your credit report.

DEAR BOB: Last January, I paid off my mortgage. The timeshare lender sent me a "deed of reconveyance" (similar to a mortgage satisfaction) to have recorded. When I took it to the escrow company that handled my loan, they charged me $51 and said it would take about six weeks to record. To make a long story short, I've been phoning every six weeks for proof that the document has been recorded, but I always got excuses. At the end of July, they told me the recorder may have lost the original document. What should I do? -- Kay W.

DEAR KAY: Congratulations on your persistence in following up to be certain your timeshare mortgage or deed of trust is cleared from the title to your property. Persist again with the firm that's supposed to be handling this to see if the original document got recorded. All you need is a copy of the recorded document, including the recorder's stamp.

Hilton Hotels Corporation (NYSE:HLT) announced that its Hilton Family of Hotels led the U.S. hotel industry in new room additions from new construction and brand conversions in the first three quarters of 2005 and is projected to maintain that position at least through 2007, according to data recently released by Lodging EconoMetrics(LE), the nation's hotel real estate investment and supply side research authority.
According to LE, the Hilton Family of Hotels is expected to add approximately 170 hotels and 24,000 gross rooms to its system in 2005, up from 122 projects with 15,227 rooms in 2004, the year that Hilton became the hotel industry leader in number of new rooms added. Through the first three quarters of 2005, the Hilton Family opened or re-flagged 127 hotels, aggregating 17,731 rooms.

Hilton anticipates a 6.3 percent addition to its U.S. room supply in 2005, up from 4.4 percent in 2004. In 2006, the company expects to add 175 to 200 hotels and 23,000 to 27,000 rooms to its system. Hilton reported 560 hotels and 75,000 rooms in its development pipeline - the largest it has ever been -- as of September 30, 2005.

As of the end of the 2005 third quarter, LE data indicates that Hilton accounts for 17.4 percent of all rooms in the U.S. Active Construction Pipeline (hotels currently under construction or expected to begin construction in the next 12 months). According to LE, InterContinental Hotels Group is projected second with 14.4 percent of rooms and Marriott third with 13.5 percent of rooms.

"Our development pipeline has never been larger, and we maintain our industry leadership position in U.S. hotel development," said Tom Keltner, president-brand performance and development group, Hilton Hotels Corporation. "Validated by another record quarter of management and franchise business in the third quarter 2005, owners and developers recognize that the Hilton Family of Hotels offers unsurpassed program support, providing hotels with the tools to help achieve success: superior technology solutions and increasing online bookings performance on brand.com; HHonors, a leading guest reward program; strong worldwide sales support; excellent year-round and seasonal marketing programs; highly effective cross-selling practices within its worldwide reservations centers; and award-winning brands.
"When we look at the development cycle, developers and lenders continue to recognize the importance of strong brands and have favored them during the current upswing in the hotel industry, as evidenced by our leadership in the hotel industry development pipeline."

LE has reported that few new hotel projects have entered the construction pipeline in the central business districts of major cities, which is typical in the early phase of a hotel industry rebound. As a result, most new construction is occurring in the focused-service sectors.
"Based on forecasts by industry consultants, the outlook for development remains strong at least for the next several years," said Bill Fortier, senior vice president - franchise development, brand performance and development group for Hilton Hotels Corporation. "We see strength across all of our brands in the U.S., as well as continued growth in Canada and Central and South America."

ACCOR Hotels and Resorts has signed a string of "opportunistic" deals in Indonesia and will open five new hotels there next year.

The move confirmed Accor's position as Indonesia's fastest-growing hotel chain, said Accor's Asia-Pacific managing director Michael Issenberg.

"Most of our international competitors aren't really that interested in Indonesia, outside Jakarta and Bali, and we have a very extensive network and believe this is a good opportunity," he said.

Accor's timeshare arm also has announced its first property deal outside Australia and New Zealand. It will spend $5.3 million developing 23 apartments in Bali.

The Queensland-based timeshare company, Accor Premiere Vacation Club, is jointly owned by Melbourne-based listed developer Becton Property Group. APVC has been aggressively buying luxury and boutique-style apartments and villas around Australia in the past year.

Developing the property in Bali was "very much about satisfying the requirements of the Australian members" of APVC, Mr Issenberg said.

The apartments would be part of the new Novotel Residence at Nusa Dua in Bali, which is scheduled for completion mid next year.

Under Accor's new hotel management agreements - mostly for 10 years - Accor will add two Novotels and three Mercure hotels to its stable, bringing the number of hotels the company runs in Indonesia to 38. It aims to have 50 there by the end of 2007. As well as the Bali Novotel, the other properties are Novotel Tarakan (175 rooms), Novotel Bandung (150 rooms), Mercure Batam (160 rooms) and Mercure Surabaya (110 rooms).

All are new developments, except the two that will become Mercures, which are being taken over from local operators.

Accor had pioneered the establishment of international hotels in the regions of Indonesia, Mr Issenberg said. "These provincial destinations are popular with domestic and intra-Asia travellers visiting on business or for leisure and have proven strong performers in recent years," he said.

Negotiations on the latest deals had begun before the Bali bombings in October, but Accor did not hesitate to proceed with the agreements, he said.

As a way to give consumers what they want, nothing beats a timeshare. Not only can the consumer buy a right to first-class residential accommodations, but also just about anything else he or she might want in a second home. Timeshare ownership provides the possibility of combining a great place to sleep away from home with interesting activities in a single product.

For example, it is possible to combine a residential timeshare with, among other things, golf course rights, adventure travel rights, yacht rights or spa rights.

One of the best means of creating such variety is to sell a membership product that includes both timeshare accommodations and activities. For example, suppose a developer desires to build a lodge adjacent to high-country acreage which can be used as a cross-country ski trail system in the winter, a dude ranch in the summer, and a fly fishing stream system during the spring, summer and fall.

The developer could license use of the lodge rooms and the acreage for a daily fee, or could sell a long-term right or perpetual right to use these facilities. Obviously, the sale of a long-term or perpetual right will yield significantly more present cash, which is often desirable.

Let’s assume that a developer elects to sell a 30-year right to use the lodge rooms and the adjoining acreage on a timeshare basis. The developer has several options. One way would be to place the property’s land into a 30-year trust with a non-profit corporation and the developer appointed as beneficiaries. This way, the beneficial interest of the developer would entitle that company to the return of the property’s title upon expiration of the trust. Further, the non-profit corporation, as a beneficiary of the trust, would hold the right to use and manage the lodge and acreage for the 30-year term of the trust.

The trust would serve as a method to protect the lodge’s title and acreage for the benefit of both developer and the non-profit corporation. The product the developer sells would be a membership in the non-profit corporation. The bylaws of this corporation would set forth the ways and means of sharing the use of the lodge and acreage during the 30-year term of the trust.

Alternatively, the developer might decide to sell a perpetual interest in the lodge and acreage. This could be structured in at least two ways. One way would be to deed an undivided interest in the lodge to the consumer, and to convey the adjoining acreage to the non-profit corporation. The consumer would receive a right to use the lodge on a timesharing basis as the holder of a deeded interest in the lodge, and would hold a right to use the acreage as a member of the non-profit corporation that holds title to the acreage.

Another way to structure a perpetual interest in the lodge and acreage would be to convey both the lodge and the acreage to the non-profit corporation. Under this method, the consumer would have a perpetual right to use both the lodge and the acreage by virtue of his membership in the non-profit corporation.

Regardless of the term of the use-right sold to the consumer, the timeshare plan for using the lodge might be a so-called “fractional” program, under which the consumer might receive a right to use a lodge unit for several weeks in each of the four seasons of the year. Use of the adjoining acreage could be limited to periods when the consumer is using the lodge, or alternatively, at any time on a “day-use” right basis.

With the foregoing methods of timeshare ownership, the consumer could wake up in his lodge room, use the trout streams whenever the mood strikes, try his hand at cross-country skiing when there is snow, and take a sunset trail ride with a wrangler. It is the combination of his timeshare lodging rights and activities which makes the concept of use-rights so appealing, as well as profitable for the developer with sufficient imagination and creative instincts to make it happen.

There are many reasons why frequent visitors to Maui purchase a timeshare property. Not the least of which is "Maui no ka oi" ("Maui is the best").

The island combines striking natural beauty with cultural sophistication. Maui offers everything from the breathtaking Haleakala Crater to Carlos Santana jamming at the Maui Arts & Cultural Center. No wonder that Maui has been voted "Best Island in the World" by Conde Nast Traveler readers for 10 straight years.

The popularity of timeshares has increased tremendously over the years. A timeshare can preserve otherwise lost vacation dollars by turning them into a prime piece of vacation real estate that can serve your vacation needs for years and years to come. Even better, timeshare usage can be swapped with other resorts around the world through an exchange company. Thus, your purchase can bring you a worldwide variety of vacation adventures.

Despite being the state’s second-most populous island, Maui has only 20 percent of Hawaii’s timeshare inventory. The industry has learned that, although Maui timeshares possess tremendous trading power, most people who buy here can’t think of any place they’d rather be.

Timeshare properties are generally concentrated Kihei and Lahaina. Kihei is close to the world-class resorts of Wailea and Makena. Lahaina in West Maui is situated near similarly lavish resorts like Kapalua and Kaanapali.

According to the latest report from Lodging Econometrics, in 2006, 39 timeshare projects are forecasted to open, having 3,998 dedicated timeshare units while ’07 will have 27 projects/3,699 units.

The total timeshare pipeline currently contains 111 projects being actively pursued by developers with 15,360 units. 56 of those projects are currently under construction, 41 are scheduled to start in the next 12 months, and 14 are in various stages of early planning. 41 of the projects contain a total of 3,074 fractional units. 63% of all pipeline projects are for new ground-up construction, while 37% are for the unit expansion of existing open and operating timeshare projects.

Casino destination areas are the most popular locations for development with 4,244 units in the pipeline, or 28% of the total. Oceanside vacation areas and theme park destinations follow, each having 17% of all pipeline units, then mountain and ski areas with 16%. Las Vegas is the most popular market with 26% of all pipeline units, followed by Orlando with 17%.

Marriott’s Vacation Club has 12 company-owned projects with 2,413 units in the pipeline, while Hilton has four projects with 1,108 units. Cendant’s two brands – Worldmark and Fairfield have a combined 14 projects/1,327 units. Patrick Ford, President of LE, commented, “Although the branded vacation clubs are developing most of the large projects, Timeshare is still pretty much a fragmented industry with 74 out of 111 projects in the Pipeline being constructed by smaller local and regional developers.”

A group has filed suit in Alpine County Superior Court against the county, disputing its decision to allow a timeshare project without requiring an environmental impact report.

The suit filed by the Friends of Markleeville on Tuesday challenges the Alpine County Board of Supervisor's decision to amend its general plan as the first step in approval of the Markleeville Village/Mahalee Lodge project without first preparing the report, according to information provided by Friends of Markleeville.

The proposed project includes 14 commercial spaces, a 25-room lodge, 49 cabins to be sold as timeshares and related infrastructure - water supply and storage, roadways and a wastewater facility.

"An EIR will allow objective consideration of project impacts and feasible alternatives to preserve Markleeville's environment while still allowing a reasonable development project," said Friends of Markleeville members Steve Hibbs and Nancy Thornburg, both Markleeville residents. "This will give the Board of Supervisors more information upon which to base a decision.

"The county's Technical Advisory Committee and Planning Commission have raised numerous concerns about the project's environmental impacts as have many residents and property owners in the Markleeville area."

Attorney Susan Brandt-Hawley of the Brandt-Hawley Law Group will represent Friends of Markleeville.

"The Petition for Writ of Mandamus asks the court to set aside the project approval while an EIR is prepared as required by the California Environmental Quality Act. This will allow for consideration of project impacts, mitigations and alternatives in light of the significant environmental impacts relating to wastewater, water supply, historic and cultural resources, scenic vistas and aesthetics, fire safety and public service and growth inducement," Brandt-Hawley said in the report.

PART of an island castle could be sold off as timeshare properties under a plan to restore the landmark which is proving too expensive for a government watchdog to maintain.

Kinloch Castle on Rum, once the luxury home of the island's landlord, is owned by Scottish Natural Heritage (SNH) which runs the island as a nature reserve.

SNH, which spends £65,000 a year on the 105-year-old building's upkeep, presently uses it as a hostel, bistro and for visitor tours. Its future is seen as a vital part of the development of the island, which is trying to attract more residents.

Yesterday, the Prince of Wales's Phoenix Trust published proposals for the castle's future with restoration estimated to cost about £6 million.

The trust has suggested three possible options - maintaining the existing use of the castle with major restoration; conversion to eight flats, which could be sold as timeshare apartments; or a combination of flats, education and entertainment facilities, with commercial and public access to principal rooms.

Studies will now be carried out to identify the most sustainable option and the most likely to attract funding. A recommendation will then be made to the SNH board.

David Maclennan, SNH's area manager, said: "The castle has a key role to play in the island's future. It is a major visitor attraction and it offers visitor accommodation and catering facilities. But as well as an asset it is also a liability in terms of the funding requirements that go beyond SNH's normal remit."

A SNH spokeswoman said the castle could be bought privately or by a trust with individual properties possibly leased or sold.

Fliss Hough, of Rum Community Association, said the options, identified in partnership with the island residents, are likely to offer a sustainable future for the castle and complement a development plan for the village of Kinloch.

"This would enhance the island for the community and visitors alike and could well lead to a whole range of further opportunities."

Douglas King, the honorary secretary of the Kinloch Castle Friends Association, said the group has been increasingly concerned about the deteriorating state of the castle and favours option three. He said: "It has enormous potential to boost tourism and employment on the island."

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Question: My partner and I purchased a timeshare in June 2005, and we love having it. However, at the time of purchase, the interest rate was (and still is) 17.9 percent. Can we refinance a timeshare? If not, what would be your suggestion to drastically reduce this rate?

Answer: If you own your own house, and you have any equity built up, you might want to take out the equity and use it to pay off the timeshare loan. You'd do this with a home equity loan or home equity line of credit.

A home equity line of credit or home equity loan would cost you anywhere from 6.5 percent to 9 percent, but that's a lot less than what you're paying now.
If you don't own your own home, you need to look into taking out a personal loan. Unfortunately, I think you wouldn't do much better interest-rate-wise on such a loan.

New research from PricewaterhouseCoopers shows that the timeshare industry is changing with increased interest from branded hotel groups, a greater focus on mixed-use developments and higher quality, more regulated products stimulating fresh interest from consumers.

While analysts and practitioners broadly agree that the old-style, mass market timeshare product is static, demand for higher-quality, branded products and new styles of timeshare such as fractional ownership and condo hotels is strong.

Liz Hall, Hospitality and Leisure research manager, PricewaterhouseCoopers commented:

'Although the timeshare industry in Europe has not provided the investment returns and industry growth predicted 10-15 years ago, it clearly has a role to play in leisure development.

'Increased regulation, more experienced operators and a more informed public have all contributed to changing perceptions and fostering growth in the timeshare sector.

'You just have to look at the increased investment from the branded hotel chains to realise that the sector is quite buoyant at present.'

The research, published in PricewaterhouseCoopers latest 'Hospitality Directions - Europe Edition,' examines the timeshare sector in Europe including new business models, market trends, owners, the resorts, key players, the rationale for investment and typical financial profiles as well as key issues and future outlook.

It reveals that factors helping to change perceptions of timeshare include:

• New product models: the timeshare industry now encompasses fractional ownership schemes, private residence clubs, points clubs, condo hotels and partial hotel conversions as well as 'classical' timeshare schemes, allowing developers and purchasers a greater selection of opportunities.

• New players: the involvement of some of the major branded hotel companies such as Hilton, Marriott, Disney and Starwood in the US has helped raise the profile and credibility of the sector. In Europe, branded hotel groups are also entering and/or expanding their activities for example, Macdonald Hotels & Resorts, De Vere Resort ownership and Sol Melia.

Liz Hall, Hospitality and Leisure research manager, added:

'Many hotel companies have changed their position from regarding timeshare as a threatening competitor to looking at timeshare as an increasingly attractive means of raising additional revenues.'

Despite the renewed interest in the timeshare sector, the research expects steady rather than rapid growth for the sector over the next five years, which is in line with overall travel and tourism growth rates.

Key findings of the research for the timeshare sector in Europe include:

• 1,450 timeshare resorts

• 3.75 million weeks of accommodation

• 1.3 million timeshare owners in Europe in 2001 (latest available data)

• fewer timeshare owners in Europe now than four years ago

• branded hotel groups now entering the market

• quality standards are rising

• perception of the industry is changing

• new models being developed

• regulation is a key issue and is helping improve the industry

Hurricane Charley blew the roofs off 110 apartments of the South Seas Plantation Resort on Captiva Island, Fla., ruining drywall, appliances, furniture -- and many vacation plans.

That devastated neighborhood is a time-share community, one of the 1,590 resorts in the U.S. in which people purchase vacation units by the week. Florida has 366 time-share resorts with 27,700 units and about one million owners, according to Scott Berman, partner with the hospitality-and-leisure consulting group of PricewaterhouseCoopers in Miami. Sorting out the damage after a hurricane is difficult enough for individual homeowners, but, for the time-share industry, complications can multiply as fast as the pile of soggy mattresses in the South Seas parking lot.

Last year's four hurricanes -- Charley, Frances, Ivan and Jeanne -- affected more than 25% of the nation's time-share communities, from losses of power to complete losses, says a spokesperson for Resort Condominiums Inc. (RCI), Parsippany, N.J., the country's largest time-share trading company. While many in the resort-rich Orlando area suffered only short power outages and uprooted trees, at least 60 time-share resorts, primarily in Florida, were so damaged they were still closed by the end of October, and about half of those, including South Seas, won't open again until sometime in 2005.

Paying for Repairs

When you buy a time share, you buy the right to use an apartment, condo or villa in a vacation resort for one week or longer for a period of time or in perpetuity. According to the American Resort Development Association (ARDA), a Washington, D.C., trade group, the average price for the use of a U.S. time-share unit is $14,500 a week. Weeks in peak seasons (December through April in Florida, for example) cost more than those in less popular times. Each owner also pays local real-estate taxes, and annual maintenance fees, to cover upkeep, insurance and emergency reserves. The ARDA reports that annual maintenance fees average $385 for each week owned. Most time-share resorts are now built or managed by major hotel companies, such as Hilton, Marriott and Starwood.

"Owning a time share is like owning a summer home," says Richard Thrall, an investigator for the state of Florida's Office of TimeShares in Orlando. "If the property is damaged and can't be used during the week you've purchased, you're essentially out of luck." But you still have to pay your share of the insurance deductible, maintenance fees and any special assessment for uncovered repairs, just like the other fractional owners, including those who did get to use the unit this year.

This year timing is everything. Dick Conklin, a free-lance writer who lives in the Florida

Keys, says he and his wife bought two weeks -- one in November and one in June -- at the Daytona Resort & Club, Daytona Beach, in 1981, for $3,000 apiece. When their kids grew up, they swapped for two apartments in November for Thanksgiving family reunions. "This year we were following the Weather Channel to see what might happen," Mr. Conklin says.

What happened was devastating. Daytona Resort & Club manager Jody Hughes says Hurricane Frances blew off most of the six-story apartment building's roof and caved in sliding-glass doors on many of the 34 units. The carpeting got soaked, the air-conditioning system went out, and the phones still weren't working right two months later. As of November 1, only 10 units were habitable -- and Mr. Conklin scooped up one for Thanksgiving week. Just this summer, Mr. Conklin says, he and other owners paid a special assessment of $250 per unit-week for new furnishings and remodeling. Ms. Hughes says she hopes that the recently collected assessment monies and the apartment building's insurance will be enough to cover all repairs.

A Northbrook, Ill., time-share owner, who asked that her name not be used, says it's uncertain whether she and her family will be able to use the two-bedroom South Seas apartment next year that they've occupied for two weeks every spring since the mid-1980s. In a letter to the resort's 6,000 time-share owners, Harry Griggs, who manages the property for the Hilton Grand Vacations Company, says that only the walls are standing for most units and that the grounds are littered with fallen trees and "any furniture that had fabric on it, including all that new furniture we had just installed."

Insurance will cover all but a $100,000 deductible that will be prorated among the time-share resorts' seven homeowners associations. But repairs have been slow to come because so many other resorts and private homeowners in the Captiva Island-Sanibel area are competing for the same construction workers and materials. Like Ms. Hughes, Mr. Griggs says he hopes the resort's insurance and reserves will cover all damage without asking time-share owners to pay a special assessment.

In these circumstances, time-share rules create opportunities for some and disappointment for others. More than half of the nation's three million time-share owners don't use their units themselves but instead trade their weeks for vacations elsewhere. As a result, owners who fortunately "banked" their units before the hurricanes hit will be able to take their vacations somewhere without penalty. But many members have confirmed reservations in resorts with no roofs or air conditioning. They're stuck unless they purchased insurance from the companies that arrange the exchanges.

The Retrade and Resale Outlook

RCI and the other large time-share-exchange company, Interval International in Miami, scrambled to find alternative accommodations for insured members and offering "retrades" into unaffected resorts at reduced rates for members who didn't buy insurance.

In the short term, says Lori Card-King, vice president of quality assurance at Interval, the hurricanes haven't diminished the number of requests from Interval's members for future Florida vacations. "Everyone seems to feel it's fairly remote that so many storms will happen again," she says.

The long-term impact is less certain. Susan Martin-Burns, office manager for South Seas Sanibel and Captiva Properties Real Estate, says time-share prices at the South Seas Resort range from $12,000 to $75,000 for a week, depending on the time of year, and that they haven't dropped since the hurricanes. ARDA president Howard Nussbaum says that some people might even consider buying time shares in affected resorts, figuring that "they've just been refurbished with insurance money."

Prospective owners should keep in mind that time-share resales are notoriously difficult -- the Timeshare Users Group says that about 500,000 are for sale at any one time -- and owners lucky enough to sell recoup about half of what they paid. Unit weeks were recently available at Daytona Resort & Club for as little as $500. The Thanksgiving week Mr. Conklin bought for $3,000 was listed at the "bargain rate" of $1,000.

A deeper concern, says Mr. Nussbaum, is whether some of the affected resorts should be rebuilt at all. "It could be that the best use for the real estate under a 30-year-old resort leveled by a catastrophe is for something else," he says. In any case, he says, the hurricanes are a wake-up call to the industry: "Every time-share owner and owners' association should be reviewing their documents to determine how well owners are protected by insurance and what kind of vote is needed to determine if and how a resort will rebuild."

The group of time-share owners most immediately affected by the hurricanes, of course, was those using their units in August or September when the storms hit. David Matheson, vice president for corporate affairs for Starwood Vacation Ownership in Orlando, says his company tried to warn off owners heading for the four Florida resorts they manage. "But we had people checking in anyway, saying that this was their vacation time. When storms were approaching our properties on Hutchinson Island and in Port St. Lucie, we convinced some owners to move inland, to our resorts in Orlando. Then we distributed flashlights and bottled water to the rest."

"A lot of people told us it was the most exciting vacation they ever had," Mr. Matheson says.

As Calgary has grown to be a major urban centre, many individuals have looked towards a second property away from the city. Given that prices in neighboring communities (most notably in Canmore) can easily exceed a family’s budget, a common alternative is to enter into a timeshare agreement.

A timeshare agreement involves a purchase of one or more properties by a group of individuals for a period of time (usually one to two weeks per year) for a given period of time or in perpetuity. The specific types of time share arrangements vary as widely as the properties themselves - some time shares are arranged privately (perhaps with several friends or acquaintances) while others involve an “exchange program” whereby you can arrange to swap your time in a particular location with another party at another site.

As with any transaction, it is important to know what rights are afforded to you as a consumer prior to entering into such an agreement. For properties sold in Alberta only, s. 37 of the Fair Trading Act affords you the right to cancel a timeshare contract within seven days of its execution, noting that the onus rests on you to prove that you cancelled within this time (acceptable methods of cancellation typically include personal service, registered mail, or fax but not e-mail). After cancellation, the vendor will have 15 days to refund your money paid. (Bear in mind that if you use the property within this time frame, you will likely have to pay a fee for said use after your money has been refunded.)

If you enter into a timeshare arrangement outside of Alberta while in Alberta, the Real Estate Act provides you with some specific rights. In this case, the vendor must file a prospectus with the Real Estate Council of Alberta (RECA) and provide you with a copy of same prior to purchase. This prospectus must contain items including the property’s legal description, financial statements, background information on the vendor, and any warnings or risks specific to the particular property. In addition, the Real Estate Act allows you to cancel any purchase within 30 days for any reason.

It is perhaps most important to note that there are no Alberta laws that give you the right of cancellation for an Alberta property purchased while you are outside of Alberta. In such a case, you are advised to check the local laws of the province, state, or other legal jurisdiction where the property is located.

Above all else, as a timeshare is typically a long-term commitment, entering into a timeshare arrangement should not be something that is taken lightly. As such, you are well advised to be wary of high-pressure sales tactics often employed by vendors. (Common approaches include an offer for a gift or “free” holiday.) While such offers may vary depending on the situation, the old adage that there is no such thing as something for nothing most often applies.

If you take frequent trips and enjoy getting away from the city, a timeshare agreement may be a good option for you. However, before entering into any timeshare contract, you are advised to contact your lawyer to evaluate the specific terms of the agreement prior to signing.

The timeshare industry wants the town to stop charging a real estate transfer tax on owners who upgrade the quality of their weeks within their complex.

“I am here to emphasize a fairness issue,” said Tobias Weas, counsel for the American Resort Development Association.

Weas and owners at local complexes such as the Valdoro Lodge object to the town collecting its 1 percent real estate transfer tax on upgrades.

Other big Breckenridge timeshare projects include Gold Flake, Grand Timber lodge, the Marriott and Hyatt’s Main Street Station.

An example would be that if an owner upgrades a $30,000 summer week to a $40,000 winter week, current law taxes the entire $40,000 transaction and not the $10,000 upgrade.

Weas said the tax is unfair because the owner is trading the $30,000 week back to the developer to be sold to somebody else, and only paying $10,000.

Weas argued that an upgraded timeshare represents a shift in time, not a bigger piece of real estate.

Councilmembers J.B. Katz and Eric Mamula wondered how that should be treated differently than any other real estate upgrade when under Colorado law the shift is still a deeded transaction.

Weas said the difference is that the upgrades he wants to protect occur in the same complex with the same developer.

He also said the timeshare does not build equity like traditional real estate.

“We are not an equity-building home owning product,” he said. “We are a vacation use product.”

Town manager Tim Gagen said it’s difficult to figure what revenue the town would lose, but in the last two years, timeshare resales generated $108,000 in 2003 and $87,000 in 2004.

Town officials will research how other towns with real estate transfer taxes treat timeshare upgrades and report back to council.