Why timeshare companies make leaving so hard: mandatory maintenance fees and ‘forever’ contracts

Timeshare memberships are often sold as the answer to all your holiday needs.

So why do timeshare companies make it so hard for members to leave — and why are maintenance fees treated as non-negotiable?

Expensive — and meant to be better

Expensive usually means better, right? That rule of thumb certainly seemed to apply to timeshare memberships bought in the 80s, 90s and early 2000s.

Fed up with turning up to underwhelming, standard holiday accommodation, people willingly bought timeshares that promised a consistent standard at exclusive resorts. No more relying on flattering photos in a glossy travel brochure.

It was expensive to join a timeshare resort — sometimes tens of thousands of pounds. And even after joining, members still had to pay to keep and use the membership each year. The annual maintenance fee was generally around the same cost as a regular hotel of a similar standard.

Many buyers accepted the deal because, well, better things cost more.

Foresight — or protection?

Did timeshare companies anticipate that their advantage — guaranteed quality — would eventually be eroded by improvements across the wider travel industry?

Either way, the contracts many prospects were persuaded to sign suggest a hard-nosed approach. Timeshare owners had to agree to be legally bound to pay every year, whatever amount the resort demanded. They were tied in for decades, sometimes indefinitely. Whether they took a holiday that year or not, they still had to pay.

It didn’t matter that the rest of the holiday industry soon caught up and overtook timeshare in convenience and value. It didn’t matter that timeshare resorts are no longer truly exclusive, and that non-members can often book the same accommodation for around the same price as (and sometimes less than) what members pay in annual fees.

The key point is this: members are contractually required to pay every year, regardless of whether the membership still offers good value.

Maintenance fees: the revenue that won’t go away

As with most things in the timeshare world, the reason comes down to money.

"With apparent utter cynicism, the timeshare resorts boxed clients into the contracts, to protect themselves against competition," believes Greg Wilson, CEO of European Consumer Claims.

"With the advent of the Internet and sites like TripAdvisor, suddenly holidaymakers no longer needed an expensive timeshare membership to guarantee high quality.

"Also, pretty much no timeshare resorts are exclusive these days. Ordinary holidaymakers can book accommodation in them through sites like Booking.com, and they usually don't pay any more than the timeshare owners have to pay in annual fees."

"Any other type of business would be forced to compete with their competition, or to accept defeat and close down. Timeshare companies don't have to do either. They have engineered an imbalanced situation where they literally don't need their customers to be happy.

"Because timeshare is no longer a competitive holiday system, people in Europe just aren't buying memberships. This is a huge amount of traditional revenue lost for the resorts. The only income stream they have left is the maintenance fees, and they will enforce those whether their members are happy or not, whether the members can afford it or not, even whether the members actually use the resort or not (as we saw during the pandemic)."

When you try to surrender, the answer is often “no”

Most timeshare owners remember how helpful their resort and sales representatives were when they were still selling and upgrading memberships. Nothing was too much trouble. People were promised a product that would cover every holiday need, now and in the future.

But once the joining fee had been taken, and once every opportunity to extract more money through upgrades had been exhausted (often when sales operations closed down), many members began to see the reality of the relationship.

The overriding motivation for many European timeshare companies now is to keep the annual maintenance fees flowing — fees their members are legally obliged to pay. If you also have an enjoyable holiday, that’s a bonus, but it isn’t the priority.

If a member asks to leave, the timeshare company will usually refuse to accept a surrender. The reason often doesn’t matter. A member could be terminally ill and many resorts still stand firm. Some resorts will even continue to enforce maintenance fees beyond the death of a member.

It couldn’t be clearer. Their interest isn’t in providing great holidays every year.

Their interest is in being paid every year.

“Help — I want out of my timeshare contract”

The standard explanation from timeshare companies is: "We need to maintain our resort whether you holiday or not, so we need to charge you every year."

The obvious response is: "All hotels need maintaining too. But they don’t charge people who aren’t staying there. They market themselves well enough to keep rooms occupied and cover their costs that way."

If you’re stuck in an unwanted contract and want help or advice about your options, get in touch with our team at the Timeshare Advice Centre.

If you meet certain conditions and were sold illegally, you may even be entitled to financial compensation.