Understanding Timeshare Math in 2024

How will inflation affect timeshare maintenance fees for 2024?

The most dreaded bill for timeshare owners typically arrives in late November each year. Maintenance Fees are akin to paying taxes – no one likes paying them, but it’s a part of owning a timeshare. However, this year’s maintenance fee bill could be unlike any other. 

Why will this year be any different? One word – inflation. 

2023 has been a record year of price increases and has tested markets like never before. This article will analyze how 2024 will likely be a record year for increases in timeshare maintenance fees.

What are timeshare maintenance fees?

Timeshare maintenance fees are paid annually to the Homeowners Association that manages the respective timeshare resort. These fees are often comprised of property taxes, insurance costs, club dues, and funds to properly manage the resort and maintain good working conditions (also known as upkeep).

These fees are often paid annually, but some timeshare companies will charge their owners monthly payments and may even include additional charges like “program fees,” which can be used to cover the cost of operating the reservation system. 

How much do timeshare maintenance fees go up?

Timeshare maintenance fees are often excessive compared to the dues of owning a condominium. According to the American Resort Development Association (ARDA), the average maintenance fees for a timeshare in 2018 were $1,000 and increased 2% between 2017 and 2018. THAT IS FALSE!

ARDA does not mention that timeshare owners pay a hefty premium over what market norms are.

Let’s do the math – 

According to ARDA’s report, timeshare owners receive seven nights of usage ($1,225 based on the average rental price of $175 per night). At the same time, a property owner pays $4,150 per year, about $592.86 per night.

Why do timeshare owners pay a premium? 

Most developers maintain control of HOAs and vote to self-manage properties. There is usually a 10-15% fee for management of the HOA, so the thought that your timeshare company doesn’t profit from maintenance fees is usually false.

Meanwhile, ARDA is downplaying the reality – timeshare owners are paying an increasingly excessive amount for what was initially sold as an inflation-proof alternative to hotels. 

Maintenance fee inflation year over year is closer to 4% and not the 2% American Resort Development Association reported; this is especially true for larger timeshare companies (more excellent resorts, more extensive management fees, and premium locations are all factors that drive up costs). 

Why do timeshare owners pay so much?

There are zero rules, regulations, or laws in place nationally to force the historic disclosure of HOA fees at the national level. Therefore, prospective buyers need more data to analyze and are easily misled by high-pressure sales tactics. 

To make matters worse, a trend shows major timeshare developers (publicly traded companies) supplement sluggish sales with increased HOA revenues. Not to be cynical, but the job of any CEO is to make as much money as possible for their shareholders; they have zero fiduciary responsibility to the timeshare owner.

2024 Maintenance Fees will likely see increases:

The perfect recipe for disaster – inflation at record highs, sluggish timeshare sales, and the actual decision maker having a conflict of interest – will likely lead to the highest increases in timeshare maintenance fees in modern times. We expect that the financial burden placed on timeshare owners will increase the already mass exodus of timeshare owners from their timeshares. 

This burden will make it even more difficult for dissatisfied timeshare owners to get out of their unwanted contracts. Timeshare developers will dig in and fight to make it harder to get out. 

While it’s accurate that this past year was more expensive to maintain any property, it’s also clear that developers are profiteering from HOA management contracts. Time will tell, but 2024 will be a year to remember for timeshare owners.

The Original Timeshare Exit Company 

Timeshare Legal is a professional, full-service timeshare cancellation company. In addition to cancellation services, we offer a credit safety program. We aim to start the timeshare exit process for you without any upfront cost. Start with our online assessment to see if you qualify for a timeshare cancellation, or contact us directly to schedule a free, no-obligation consultation.