Are holiday clubs all hype?

written by Teena Jain.

Owning a resort may be a distant dream, but you can still enjoy a slice of it with timeshare holiday clubs. Be warned, though. Before you pack your bags, make sure you understand the high price that this comes with. It is called timeshare vacation because it allows you to share a place, typically for a week, when you buy a membership with a holiday club. There are more than six million members for such clubs worldwide and their operators are cashing in on the demand for the vacation homes. But how good are these memberships?

Timeshare vacations allow you to book a resort within a club network for a specified period. You could reserve the space for a fixed week annually, or take advantage of a floating system which usually includes club points that can be used to book accommodation in different resorts and seasons based on the points you have.

Depending on whom you ask, the consumer experience with these clubs differ. Sunil Mathur, 44, an employee of Gurgaon-based software company Mantra IT Systems Pvt. Ltd, prefers to book a hotel room, saying he did not get the services as promised by his holiday club. Mathur said he became a member of Resort Condominiums International (RCI) through an agent who told him that he could book a resort with a 48-hour notice because he had taken premium-class membership.

“Although I gave them an eight-day notice, I didn’t get a reservation when I applied. In addition, it took me eight months to get a refund (of the membership fee),” recounts Mathur.

When contacted by Mint, Radhika Shastry, managing director India, of RCI, replied: “RCI only helps in exchanging vacations of members... Even though we check the resort quality, it’s difficult to keep a tab on the overenthusiastic selling done by few of these agents.”

Nilesh Shah, chief executive of Ambit Capital and a member of Mahindra Club, shares a different experience. “Every year I go on a vacation for a week but always plan it around eight months in advance... Holiday clubs are very cost effective because through RCI affiliation one can get an apartment at $200 (approx. Rs8,000) for a week, comparable to per night cost of $200 at any of the hotels.”

These experiences suggest that holiday clubs can be fun if you plan the trip well in advance. Here are five things you need to know before buying a holiday club membership:

Booking for peak season is hard
If you pack your bags at the last minute, holiday clubs might not be a good option because you need to make reservations well in advance—up to six months if it’s for the peak season. Although, some resorts ask only for a week’s notice, the “subject to availability” rider remains.

It’s not a holiday package
Timeshare vacations only provide accommodation. You need to pay for sightseeing and food. A few clubs such as Mahindra provide discounted meals at Rs450 per person.
These are not inflation-free holidays

The lifetime membership fee could be misleading. Resort companies might not be upfront about the charges and you could end up paying as much as Rs8,000 as annual service charges. So, if the holiday club brochures claim they are offering you inflation-free holiday, make sure you know about the fine print. The annual service fee could be subject to revision.

Membership may not be for life
If a holiday club says it is offering a life membership, it doesn’t always translate into that. A life membership could cover only up to a certain number of years, ranging from 25 years up. Ask whether the membership is transferable because if for some reason you are not able to take advantage of the complete tenure, you can pass it to someone else.

Find out about the location
Check what the agents actually mean when they promise quality service. Several members have complained of poor quality and service.