Timeshare Is Changing

A classic timeshare investment is where the co-owner buys an entitlement to use a specified property for a number of weeks at a certain time of year. Additionally there is an annual fee for the management and upkeep of the property. The main principle of timeshare is that it gives quality accommodation for less than the equivalent hotel rate.

It is, however, an industry that has a bad reputation for misselling. This is changing. Spain introduced timeshare regulations in 1999. The highlights are:

• Restrictions on high pressure selling tactics in public places and tourist spots.
• Introducing a cooling off period of ten days during which the buyer can withdraw from the contract with no penalty.
• Written information to be supplied in the mother tongue of the buyer.
• Contract disputes are governed by Spanish law.

In the UK the product is now regulated by the Financial Services Act which means clients get protection and are able to sue the financial advisor if they believe they have been given inappropriate advice.

The average timeshare buyer is a well educated home owner, with two cars, and no children, who takes at least two holidays and two short breaks per year. The average European price for a timeshare is about 9,000 Euros for an apartment sleeping four for a purchase period of 20 to 99 years.

The timeshare market has developed a points system valuating a property according to:

• the property itself
• the number of weeks purchased
• the time of the year purchased.

Points can be used to swap the property for another owned by the same company. Timeshares are often built by large holiday companies: P&O at La Manga is a good example. Other large organisations are now entering the market, allowing the points to be spent on travel products other than accommodation.

Looking At The Property Rental Market

The rental market can be sub-divided into its segments. The first is a short term holiday rental, usually for a few weeks but lasting up to one year. The second is long term letting which in legal terms, once offered, can be for up to five years’ tenancy.

Each market has different driving forces. Short term lets are driven by promotion and advertising. Long term lets, which are mainly for Spanish people, are a balance between the laws of the country giving the tenants security and landlords reward.

Holiday Rental

There are many self catering properties for rent in Spain. Properties have been built for that purpose or are available from absentee owners. They will mainly be apartments near the sea or a golf course, or a villa in the mountains. Many detached villas with a swimming pool or rustic country houses are also available through up-market letting agents.

Although word of mouth or an advertisement in a local newspaper can often achieve the same result, the organisation of this market depends very much on a selling agent to bring the holiday tenant and landlord together. However, e-commerce and a need for the agent to offer the landlord an added value service are altering the shape of this market.

E-Commerce

Short term holiday rental companies can advertise their wares more effectively through a website than by thousands of expensive brochures. Information can be assimilated very quickly making the web ideal for accessing the up-to-date availability of any holiday rental.

Viewing the alternatives on a screen, checking price and availability, booking and paying by credit card take but a few clicks. E-commerce is rapidly taking over as the most effective method of booking a holiday rental.