As a property owner or manager, you’re probably wiping your brow right now and giving thanks that you survived the COVID-19 pandemic. However, the repercussions will create a ripple effect, and you might worry about the coming months and your long-term viability. As such, you might wonder if converting your establishment to a timeshare would benefit your bottom line.

Timeshares do offer significant advantages, but like anything, they have their downsides. Plus, once you decide to convert the property, returning to a traditional hotel format presents substantial legal and pragmatic challenges. Get the facts so you can make the best business decision for you.

Pros of the Timeshare Model

Timeshares do have some significant advantages over traditional hotels, but they also have their share of headaches. Evaluate both before moving forward.

1. Reliable Income Stream

In a timeshare, guests pay a one-time fee that enables them to “own” their yearly vacation instead of renting it. The price tag weighs in considerably heftier than a typical stay. Many individuals can’t afford $20,000 or more upfront, and they’ll finance through you, providing a steady monthly income stream. However, you’ll need to expand your accounting department or partner with a lender to offer loans, collect payments, and chase down those who foreclose on their obligations.

2. Multiple Structures to Choose From

Timeshares aren’t one-size-fits-all. You can choose from one of the four common types or invent a creative new one:

  • Fixed week: In this structure, your guests enjoy exclusive use of the residence one or two fixed weeks of the year. It avoids booking conflicts, but it can grow boring for owner-guests.
  • Floating: With this style, property owners have a specific time slot to book their getaway, but it need not be during the same week. If the period falls during a holiday season, conflicts can arise overuse.
  • Right-to-use: In this structure, the developer maintains ownership of the property, but the guests reserve the right to use it for a set number of weeks each year.
  • Points club: If you have multiple residences, guests can buy points to use at any of your locations. Many find this appealing, as it gives them additional choice over where to visit.

3. Save More on Incidentals

Eco-friendly guests might leave those tiny individual bottles of shampoo and lotion be, but many take anything that isn’t nailed down home with them. Some hotels have started a blacklist of guests who have pilfered one too many coffee mugs, but it’s impossible to mitigate shrink completely. Timeshare owners know they can lose part of the value of their investment if they steal or damage property.

Pros of Traditional Hotels

While timeshares have multiple advantages, so does the traditional hotel model. Bear these considerations in mind.

1. Wider Guest Base

Many timeshare properties only market to those wealthy enough to enjoy annual vacations. Hotels, on the other hand, don’t care about their guests’ yearly budget as long as they pay to stay. If you have a timeshare that draws ownership primarily from folks seeking a getaway from a nearby metropolitan area, a natural disaster could cause an isolated economic downturn that devastates sales.

2. Fewer Legal Headaches

Both hotels and timeshares need legal counsel to advise them of their rights, but hotels typically don’t need to lean on such services unless an incident occurs on the property. Conversely, timeshare property managers need to pursue delinquent owners and negotiate with unhappy purchasers who want to sell their interest.

3. More Rapid Changes Possible

If you choose to renovate your hotel — converting it, say, from a business center to a romantic getaway lodge — you close down and tackle the job. With timeshares, however, you need to consult with individual owners before undergoing any measures that directly affect their interest. Plus, you could run into issues with owner-guests who modify their property in a way that qualifies as destruction to others.

Are Hotels or Timeshare Right for Your Business Model?

Both timeshares and traditional hotels offer advantages and disadvantages. The right model depends on your needs, but information can help you make the correct decision.


Kacey Bradley is the blogger behind The Drifter Collective, an eclectic lifestyle blog that expresses various forms of style through the influence of culture and the world around us. Along with writing for her blog, she has written for sites like U.S. News, SUCCESS, Guides for Brides, Hotel Online, and more!

Follow Kacey on Twitter and subscribe to her blog to keep up with her travels and inspiring posts!

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