How do timeshare fee increases compare with the worldwide cost of living hikes?

Timeshare fee increases

As 2023 maintenance fee demands start dropping on doormats and into inboxes around Britain, ECC's statistics and information team have been keeping track of the increases. A running total of the average fee escalation according to our tallies so far currently stands at a staggering 30.1%.

This figure may rise or fall as more data is added to the model, however as things stand next year's maintenance fee is currently looking like being almost one third more expensive for most people.

Resorts are presenting the increases as necessary to keep up with general inflation, so that they can afford to keep the resorts running and of an acceptable standard of upkeep. But are they being fair?

Increases everywhere else

According to The Guardian, general inflation is running at 10.1% And from September 2021 to September 2022, the following increases have been recorded on typical living expenditures .

• Housing, water and energy 20.2%
• Food and non-alcoholic drinks 14.5%
• Furniture, household items and upkeep 10.7%
• Transport 10.6%
• Restaurants and hotels 9.7%
• Clothing and footwear 8.5%
• Alcoholic beverages and tobacco 5.5%
• Recreation and culture 5.2%
• Miscellaneous goods and services 5.0%
• Education 4.3%
• Health 3.5%
• Communication 2.4%

This puts the timeshare fee hikes into stark perspective:

• Timeshare maintenance fees 30.1%

Are 30%+ timeshare cost increases reasonable?

As we know: timeshare annual fees are an amalgamation of many smaller costs. As those costs rise, then the resort has to pass them on to the members. Many of the costs are listed above.

The biggest increase on the above list is utilities at 20.2%. And while a timeshare complex does need to cover the increased energy and water costs, these certainly do not represent all their costs. Even if it was argued that utilities represent their biggest expenditure this still doesn’t justify the 30% increase in maintenance fees.

Neither would the 10.7% increase in the cost of furniture, household items and general upkeep, another major portion of timeshare resort management fees.

Wages are a significant proportion of resort running costs, but this past year they have only risen by 6% in the UK, and 3.5% in Spain.

Realistically, the only way that timeshare companies could honestly claim justification for a 30% rise in fees would be if there were some other major expense that had increased by 40/50% or more, to balance out the much lower increases everywhere else.

To the best of our experts' knowledge, there is no such hidden, large expenditure.

Opportunism

Industry commentators are condemning these disproportional fee rises as yet more opportunism by timeshare bosses.

"During the pandemic, timeshare companies universally chose to charge annual fees in full," notes Andrew Cooper, CEO of European Consumer Claims. "Their actual costs dropped considerably without guests staying onsite. Electricity, water, maintenance and wear and tear are of course reduced to almost zero.

"The proportion of the management fees that goes to paying staff wages was also still charged in full, despite the wages actually being paid by the Spanish government via furlough schemes. The resorts were basically funded twice for wage expenses. Once by the members and the second time by the government.

"Timeshare companies therefore managed to come through the pandemic with significantly higher profits than they would make on regular years," continues Cooper.

"As that money is, ostensibly at least, purely for managing the resort on behalf of the members, then it would be put to better use as a 'war chest' to help offset inflationary rises and keep management fees lower. Perhaps counterbalancing the effects of inflation for a couple of years.

"What is very clear is this: with the average maintenance fee before the 2023 increases being over £1000 per year, many timeshare owners could offset most of the other general inflation increases in their lives by relinquishing their timeshare memberships.

"Without the timeshare expense, they could afford to pay the other increases."

For advice on timeshare relinquishment or compensation claims over illegal contracts, get in touch with the team at ECC to arrange a free consultation.