Holidays on the Cheap

Two weeks at a luxury vacation condominium or resort at 50% below regular rates every year until 2016? Sounds like the grand prize behind the sequined curtain on some TV game show. Actually, it is a fairly typical example of the kind of arrangement available through a holiday-financing gimmick called time-sharing that is stirring interest among budget-minded vacationers.

Under time-sharing plans, participants pay anywhere from $800 to $8,000 for bargain-rate accommodations in a certain condominium or vacation resort for a given number of weeks in a particular season each year, usually for at least twelve years and in some cases indefinitely. In exchange for guaranteed occupancy over an extended period, time-sharing resorts offer low prices, luxury suites usually equipped with kitchens, and discounts on the use of entertainment facilities.

Hard Hit. The idea originated in Europe in the mid-'60s; in the Western Hemisphere, the number of time-sharing resorts has increased from four to 90 in the past four years, and they now range geographically from condominiums in Hawaii to ski resorts in the Rockies and hotels in Puerto Rico.

Resort operators most likely to benefit from time-sharing are those who have been hard hit by the recession, especially condominium developers. In the past ten years, vacation condominiums have doubled in price, and rates at many resorts have increased by 80% or more. Though occupancy rates in the resort industry as a whole have been rising lately, they remain low in many places, which means that costly facilities are not always in full use. Says Tom Perine, president of Vacation Planning Inc. of Richmond, Ill., the largest timesharing promoter in the U.S.: "Timesharing in the computer industry was the only cost-effective way to utilize superexpensive equipment. We are bringing that concept to resorts."

Perine's first time-sharing resort was a luxury campsite near Palm Springs, Calif.: by now, 2,500 customers have paid $9 million for camping site shares, giving them 45 days annually for 99 years. A Perine-organized time-sharing program at the 1,400-acre Playboy Resort & Country Club in Lake Geneva, Wis., is also beginning to pay off: the financially troubled resort will begin its winter season with the highest occupancy rate in its eight-year history.

For shareowners, a time-sharing vacation can offer the advantages of a vacation home without the large initial investment or steady upkeep. At the Playboy resort, for example, Larry Leven, a $35,000-a-year Chicago insurance executive, and his family recently spent a week in a condominium that normally costs $135 a day. As owners of a 40-year, $7,050 share at the resort, they only paid an $18 per diem charge.

In spite of its apparent advantages, the sharing idea is one whose time has not entirely come. Some companies view the concept with caution: Western International Hotels, a subsidiary along with United Airlines of U.A.L., Inc. has looked into the concept and decided to bide, rather than share its time. "The idea is new and needs testing in the marketplace," says Western Director of Development Tom Ohrbeck. And then there is the problem of the investment itself. Under the better time-sharing plans, shareholders are guaranteed use of the property no matter what happens to the resort. What the plans do not guarantee, of course, is that a bankrupt hotel would be a fun place to spend the next 40 or so vacations.

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