Travel Cost Comparison: Timeshare vs. Traditional Vacation

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Now that travel is back on the table, people are re-experiencing the annual vacation as a normal thing. Many people have become more frugal lately, however, especially with the current economic climate. And unfortunately, everything seems to be increasing in price, including hotel accommodations.

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If you’re thinking about buying a timeshare as a way to make your vacation expenses more predictable, you’re not alone. According to the American Resort Development Association, 9.9 million households have done more than think of it as an option – they’ve actually taken steps to gain a stake in the industry.

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To help you decide if a timeshare is the right move for you, here are typical costs and how they compare to a traditional vacation at a resort hotel.

How does a timeshare work?

“A timeshare is a shared ownership (or right-of-use contract) of recreational real estate where buyers can spend a limited amount of time (usually a week) in a condominium or other vacation home,” says Sarah Conroy. Senior Director of Marketing and Communications with the Resort Development Association of America.

“The hours should not be the same or the same type of accommodation for one week each year,” she added.

How much should you expect to spend on a timeshare?

There are some upfront and ongoing costs with a timeshare. Here is an example.

“In 2021, the typical upfront investment for a two-bedroom unit (with a full kitchen, washer and dryer, and living room) was $24,140 per week,” Conroy said. The average annual maintenance fee for a 2-bedroom apartment was $1,120 per week.

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What other costs might you incur with a timeshare?

“Generally speaking, after the initial purchase price of a timeshare, the only required annual expenses are maintenance fees for the maintenance and upkeep of the resort’s common areas, including all fixtures and fittings in the residences and throughout the resort, housekeeping and rooms and resort amenities such as pools, Game rooms, sports fields, etc.,” says Conroy.

“As a point of reference, at the end of 2021, about 20.5% of timeshare owners had an outstanding loan related to the purchase of a timeshare. Parking is often free at the timeshare and owners do not pay resort fees for Wi-Fi or it is covered as part of the maintenance fee.”

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Timeshare vs. Resort Hotel: Which is Cheaper?

The big difference between a timeshare and a resort hotel is that you have to pay thousands of dollars to own a timeshare before you can start using it, but that special cost doesn’t exist with a resort hotel vacation. But what about outside of that? Which of these accommodations is cheaper?

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“While hotel rates have been on the rise, the increase in travel combined with inflation has resulted in a significant increase in daily rental rates,” Koroi said. “RDA encourages value-oriented vacationers to consider the financial benefits of timeshare ownership, such as economic pressures that affect these rates, including inflation.”

She continued, “The average daily rate charged by hotels varies according to demand. However, the purchase price of the two-bedroom sales unit has remained relatively consistent over the past five years. These ever-changing average daily rates combined with fees and taxes—typically $25+ per day for resort fees and state, local and other taxes that easily exceed 10% of the daily rental rate—make timeshare ownership costs more consistent and affordable. Empowering families to spend their vacations with confidence.

Conroy continued, “Over the five years ending in 2021, annual maintenance fees paid by timeshare owners rose just 15 percent, compared to a 24 percent increase in seven-night resort hotel rates before fees and taxes. From May 22, 2022 to July 22, 2022 – three months only – a seven-night hotel stay in a one-bedroom resort hotel room (not including a kitchenette or separate living area) is up from $1,569. $1,720.

She concludes, “This does not include any savings an owner might have by using the entire kitchen. [timeshare] For eating a full meal or snack and with each meal.

Obviously, which is cheaper is not an easy answer, but if your needs and wants are aligned with the use of time, it can lead to savings in the long run.

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About the author

Cynthia Messom is a personal finance writer and editor with more than 12 years of combined experience. Her articles have appeared on MSN, AOL, Yahoo Finance, INSIDER, Houston Chronicle, The Seattle Times and The Network Journal. She attended the University of Texas at Austin and earned a bachelor’s degree in English.


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