In June 2022, the year-over-year inflation rate reached 9.1%, marking the highest level in 40 years. Despite subsequent increases in interest rates aimed at cooling the economy and a decrease in energy prices, there continue to be month-to-month increases in inflation. So even though the rate of price hikes has slowed down from its 2022 high, getting prices to stabilize is not realistic in this country — and timeshare maintenance fee inflation is a reflection of that.
Timeshare maintenance fee inflation is an undeniable issue faced by both developers and owners. Vacation ownership companies, along with their lobbying group, the American Resort Development Association (ARDA), often justify these increases by pointing to the rising costs of goods and services. They argue that as expenses for gas, materials, and services surge, the cost of maintaining timeshares must inevitably rise as well.
But this line of reasoning falsely assumes that timeshare maintenance fee increases haven’t been drastically high for years — something any timeshare owner can confirm. This article will look at what owners can expect with timeshare maintenance fee inflation (including examples of real-life increases) and the best ways to rid yourself of these fees for good.
The term “inflation” dominates broadcasts and newspapers, leading to all kinds of debates on what really causes it and the best ways for governments to tackle it. Some attribute inflation to increasing wages and income, while others highlight resource scarcity.
Regardless of its cause, inflation results in consumers facing higher prices for necessities such as gas, food, and utilities. This triggers a domino effect across industries, increasing transportation costs and driving up prices for essentials and luxuries alike.
Given the seemingly endless reach of inflation, it’s only natural that timeshare resorts will also feel the effects. This is because, regardless of inflation’s presence, timeshare developers must cover costs like landscaping, cleaning services, upkeep, and repairs. They also need to properly compensate the staff responsible for these tasks and, of course, drive profit into their corporate coffers through onerous management contracts!
For timeshare owners, it becomes apparent that financial considerations are paramount to resort operations. Should the resorts’ profits dip even slightly from one day to the next, timeshare maintenance fee inflation is often leveraged to bridge the gap. Here are two of the most common tactics developers use to address inflation.
Timeshare management companies love to levy special assessments when they want to make more money. A special assessment fee is intended as a one-time expense for specific incidents, such as natural disasters like Hurricane Ian, which devastated Florida, the state that hosts the highest number of timeshares. This fee is used by both homeowners associations (HOAs) and timeshare companies.
When a hurricane damages a timeshare resort, the management company may levy a special assessment on owners for the repair costs. Or if a resort decides to install a new swimming pool, owners may be charged to cover the construction costs. In the context of timeshare maintenance fee inflation, a resort may make an “emergency” request, saying that they don’t have enough funds in reserve due to rising gas prices or other forms of inflation.
In situations like these, it’s important to confirm the legitimacy of the company’s financial claims by obtaining the latest reserve study. This document will clarify if there are genuine financial issues and their severity. If the data justifies the request for more funds, unfortunately, there’s no way to avoid the additional payment.
A frequent strategy developers employ to manage inflation involves raising annual maintenance fees for their customers. However, it’s essential to remember that your timeshare contract includes specific clauses about these fees, including maximum increase limits. This means that a timeshare company is restricted from hiking your fees by more than a set percentage each year, usually between 10% and 15%. This limitation could be a contributing factor to why some companies opt to impose special assessments.
Don’t get too complacent about those fee caps. Even though there are limits on how much companies can increase your annual fees each year, nothing prevents them from citing inflation as a reason for significant fee hikes over consecutive years. As a result, timeshare owners might continue to experience the impact of inflation on their fees long after inflation has subsided in the broader economy.
Let’s look at what a 10% annual maintenance fee increase would look like after five years.
At Signing | At Year 1 | At Year 2 | At Year 3 | At Year 4 | At Year 5 | |
Fee | $1,000 | $1,100 | $1,210 | $1,331 | $1,464.10 | $1,610.51 |
Let’s dive into how some companies are implementing these hikes in yearly fees and membership dues. Westin and Marriott Vacation Club are two developers leading the timeshare maintenance fee inflation charge.
We’ll look at Westin first. Two of Westin’s timeshare offerings are Westin Aventuras and Westin Flex. The difference between these two programs is that Westin Aventuras offers a curated selection of vacation spots, while Westin Flex provides greater flexibility in planning, with its points usable across a wide range of properties and times.
Both of these offerings are experiencing an increase in fees for 2024. Westin Aventura’s fees are increasing by 22.3% over 2023. How much each owner will owe is based on the number of points they have. According to the Aventuras Owners Association, a timeshare owner with 75,000 points will owe $1,488.75 in 2024. Similarly, Westin Flex’s maintenance fee increase is 16.1%.
As we mentioned, Westin isn’t the only timeshare company looking to implement increases this year. Introduced by Marriott Vacation Club in the summer of 2022, Marriott Abound is an exchange program facing potential increases in 2024 annual fees due to two budget proposals. The budget options, intended to fund maintenance fees for property upgrades, feature a 23.4% increase, while a more modest budget option suggests a 15.1% increase.
Both companies attribute this timeshare maintenance inflation to higher insurance expenses, property refurbishments, increased wages for their staff, and the rising costs of property upkeep. While these are valid reasons for price increases, the proposed percentages are steep, making it challenging for customers to manage.
Larger timeshare companies are not the only ones demanding drastic price increases for their customers in 2024. The Beach House Condominium Association, which manages timeshare properties in Florida, is seeking a special assessment fee for 2024 of up to $1,397.09 per unit per week.
This practice yet again exemplifies how timeshare companies are leveraging the pretext of inflation to impose additional fees on owners.
Timeshare cancellation can be a significant step toward regaining control over your finances and personal life. However, the choice of timeshare exit company is crucial. Opting for a company that recommends you stop making fee payments or allow the unit to go into foreclosure can result in expensive errors with severe legal repercussions — not to mention the potential harm to your credit score.
Centerstone Group is the premier timeshare exit company, specializing in legal and ethical timeshare exits using a variety of proprietary methods. Whether you need a timeshare transfer, a pressure campaign against your timeshare developer, or legal assistance from one of our attorney partners, we can help you get financial relief.
We are an accredited, A+-rated company with 4.75-out-of-5 stars on Better Business Bureau — and our results and reviews speak for themselves! If you’re looking for a way to get out of a difficult timeshare situation, we would love the chance to see how we can help you.
Inflation is an economic force that we all have to deal with. But what you don’t have to deal with is opportunistic timeshare companies that use inflation as an excuse for perpetually jacking up their prices. Once you’re in their grip, these companies are reluctant to release you, trying to extract every possible penny.
The team at Centerstone Group brings together decades of experience in the timeshare industry, offering you a chance to save both your money and your peace of mind. Contact us today for a free consultation and case evaluation.
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