What Is A Timeshare And How Does It Work?

Are you a vacation fanatic who loves visiting sought-after vacation destinations each year? If so, then a timeshare is for you! But if you are unsure what a timeshare is, we’re here to help! For starters, the standard timeshare definition is classified as “vacation lifestyle products that allow individuals to take annual vacations.” While this is true, the definition can be more complex regarding the type of timeshare, the brand system, and more! However, timeshares, or vacation ownership, allow individuals like yourself to enjoy a lifetime of vacations at today’s prices! And who doesn’t like a good deal? So, if you’re ready to enhance the way you vacation, continue reading to learn more about “What is a timeshare and how does it work!”

What Is a Timeshare?: Learn the Timeshare Definition

What is a timeshare and how does it work is a complex subject, so let’s start with the basics: what is the timeshare definition? A timeshare is a resort or vacation property split into shared or fractional ownership. This ownership is usually in weekly increments. Most timeshares today are with large corporations like Wyndham, Marriott, or even Disney. These hospitality brands offer owners a travel club membership style, providing flexibility and customization for vacations.

According to the American Resort Development Association, “timesharing” is defined as shared ownership of a vacation property. This may or may not include an interest in real property. A timeshare allows owners to have an increment at a time, in which they can use their shared ownership. These increments are normally one week but vary by timeshare company and resort. Basically, you are sharing a unit with others but “own” an assigned week. 

A few influential people give timeshare ownership a bad rep, but satisfied owners and statistics collected by ARDA’s AIF Foundation disprove this opinion. According to the 2024 State of the Vacation Timeshare Industry report by ARDA, the sales volume of timeshares was at $10.5 billion in 2022, and in 2023, it rose to $10.6 billion. The timeshare industry has experienced significant revenue growth since the world reopened, and travel has become an option again. So, the timeshare industry took significant strides to return to normalcy in the last few years.

Now that we’ve touched on the timeshare definition, let’s dive into how it works!

How Does A Timeshare Work?

If you’re a timeshare owner or looking to buy a timeshare, you must become familiar with your vacation ownership brand because each one works differently. Each timeshare company may offer different options for owners.

The way timeshares work has evolved over the years. Previously, timeshares worked by giving owners a fixed week at their resort every year. Today, the best vacation clubs and brands offer a points-based system that allows for greater flexibility and freedom.

Fixed Week Timeshares Definition

When timeshares first came into popularity in the United States, families would buy a one-week increment at a timeshare property, and even a specific unit, that they could use during that time every single year. With a fixed week timeshare, the week number never changes. Usually, weeks have a number that starts in the first week of January and continues through the last week of December. Depending on the resort or developer, the weeks will generally begin with a check-in date on Friday, Saturday, or Sunday.

Some benefits of a fixed-week share include not having to plan ahead to make reservations and having a guaranteed time every year. Moreover, you can rent your timeshare out fairly easily if you own a “valuable” week during a popular holiday or high season.

Floating Week Timeshares Definition

Floating week timeshares offer a bit more flexibility for owners over fixed weeks. A floating week allows owners to reserve any week throughout the year on a first-come, first-served basis. Some floating weeks are restricted by season. This means they can only be used during a specific period or season of the year. For example, owners can use their summer floating week during any week that falls within the resort’s summer dates.

Points-Based Timeshares Definition

The most popular type of timeshare ownership today is the points-based timeshare. Multiple vacation clubs offer variations of points-based timeshares. For example, with WorldMark by Wyndham, you buy a set number of points and use them at any WorldMark resort. However, clubs like Hilton Grand Vacations offer owners the ability to convert their fixed week into points for greater flexibility. In this case, the number of points you receive each year depends on the popularity of your “Home” resort, unit size, season, and more.

Each year, owners receive their annual allotment of points. This allotment gives owners flexibility and control of when and where they book, with access to hotels and resorts of all sizes during different seasons and for varying lengths of time.

Timeshare Seasons Definition

In the case of a floating week or points-based timeshare, you will want to pay special attention to your club’s seasons. Timeshare seasons are designated periods of the year that identify high and low seasons in popularity. Every brand uses different naming conventions, such as “Gold,” “Red, or “Silver.” Your floating week may limit you to one season, and if that season is highly popular, you must plan ahead to get the dates you want.

Different Types of Timeshare Contracts

Besides the different ways a timeshare works, there are multiple types of contracts to be aware of. Additionally, the type of contract you purchase can vary based on your resort’s location or brand.

Deeded Timeshares Definition

A deeded timeshare contract means the resort/unit is evenly divided between all owners. Typically, each owner has a specific week (a fixed week) when they can use their slice of ownership. A deeded property has the same rights of ownership accorded to it as any deeded real estate would. The owner owns it in perpetuity and may sell, rent, bequeath, or even give the property away. It can also be passed along to heirs through a will. Many owners find these options appealing because they provide long-term security and give owners control over how and when to manage or pass on the ownership.

Right to Use (RTU) Timeshares Definition

You’ll typically find Right to Use contracts (also known as RTU timeshares) in international destinations like Mexico. This is because, legally, an international resident cannot own real estate in a different country they are not a citizen of. A right-to-use contract grants owners the “right to use” their timeshare for a specific period, and when that time frame ends, the contract or ownership expires. You can find RTU contracts that last between 30-99 years. After that, the resort management holds the actual ownership of the resort property. When the lease is up, the right to use will generally terminate and return to the resort.

Leaseholds Definition

A great example of a leasehold timeshare is Disney Vacation Club. When you buy a Disney Vacation Club timeshare property, every contract for one resort will have the same expiration year. This is because DVC “leases” the land from Disney Vacation Development to build their resorts on. It’s similar to a right-to-use contract because once the contract expires, the owner no longer owns a piece of the resort.

Biennial and Triennial Timeshares Definition

Some timeshares allow for annual usage every year, while a biennial timeshare offers usage every other year. A “use year” is either even or odd, depending on whether the year ends in an even or odd number. There are also triennial contracts as well, which means you can use your ownership every third year. The benefit of this type of timeshare is they are less expensive to buy and maintain.

Why Do People Buy Timeshares?

Timeshares offer so much more than a typical hotel stay. Just the difference in space is incomparable. Typically, a hotel room is simply a bed or two, a tiny common area, and a small bathroom. A timeshare vacation is basically like a home away from home. When you buy a timeshare, you get private bedrooms, large common areas, a kitchen, and often a balcony that offers a scenic view. 

While the accommodations and amenities of a timeshare resort outweigh those of a hotel or Airbnb, timeshare buyers also enjoy the savings associated with ownership. Our Savings Comparison Calculator features the savings you can achieve on every timeshare posted for sale on the resort marketplace. With these shares, you are paying for tomorrow’s vacations at today’s prices and can guarantee vacation time. In addition, you can rent your points or week out to cover annual maintenance fees if you don’t use them. 

Another reason why people buy timeshares is that they are usually located in the most popular vacation destinations in the world. For example, Disney Vacation Club has the most desirable family-friendly destinations in Orlando, California, Hilton Head, and more. World travelers favor other brands like Wyndham Destinations or Marriott Vacation Club because they spread their resorts even further across the globe. A timeshare offers you the option of where you want to vacation. 

What Are the Pros and Cons of Owning a Timeshare?

Just as with any major purchase, timeshare ownership comes with a set of advantages and drawbacks. Understanding both sides can help you make an informed decision about whether a timeshare fits your travel style and financial goals.

Timeshare Ownership Benefits

• Consistent Vacation Experience: One of the biggest perks is the consistency. You know exactly what you’re getting year after year—a familiar, comfortable place to unwind without surprises. For many, it’s that “welcome back” feeling at your favorite resort, whether it’s at a Disney Vacation Club property or a Marriott Vacation Club destination.
• Spacious and Luxurious Accommodations: Timeshare units tend to be much more spacious than your average hotel room. With private bedrooms, living and dining areas, and often a fully equipped kitchen, it really does feel like your own vacation home.
• Potential for Savings: If you regularly vacation at resorts, locking in today’s prices for future trips can lead to long-term savings. Plus, some owners rent out their timeshare weeks or points to offset annual maintenance fees.
• Vacation Exchange Opportunities: Many timeshares are connected to exchange networks, letting you trade your week or points for stays at thousands of resorts worldwide. This opens the door to a huge variety of travel experiences.

Drawbacks to Consider

• Limited Flexibility: Unlike booking last-minute getaways, most timeshares require advance planning and adherence to specific periods. Changing your destination or travel dates can sometimes be tricky, depending on your ownership type.
• Annual Maintenance Fees: Maintenance fees are due every year, and while they keep the property in tip-top shape, they can increase over time regardless of whether you use your vacation time.
• Long-Term Commitment: A timeshare contract can last decades, or even up to 99 years in the case of certain right-to-use and leasehold agreements. Getting out before your contract is up may involve extra fees or legal processes. However, the resale market can be a good solution for this.

Timeshares Vs. Hotels Vs. Airbnb

As we mentioned before, timeshares offer more space and amenities than a typical hotel room. On average, the standard size of a hotel room is less than 400 square feet. Compare that to the average timeshare unit size of 1,030 square feet, and you will be able to see the difference. With so much additional space, families can stretch out and enjoy privacy while on vacation. These units also have fully-equipped kitchens, so you can buy local groceries and cook in your villa. Timeshares also have washers and dryers in most units, giving you the ultimate convenience during your stay.

You might be considering sticking with Airbnb’s, as these can afford you some of the same benefits as home. However, timeshare resorts offer more than spacious units. Properties like Orange Lake Resort in Orlando have on-site restaurants, golf courses, lazy rivers, and even waterparks. Unless your Airbnb is located in an expansive community or offers these amenities, you are essentially just paying for the space. Not to mention, you won’t receive the same standards of customer service, such as having a concierge or security.

What is a Lockout or Lock-Off Unit?

A lockout (or lock-off) is a timeshare unit that’s like a condo or adjoined hotel room and can be divided into two separate sections. The owner of these units then has the option of renting them out separately or together. Basically, it means that you could “lock the door” in between the units. It is excellent for privacy reasons if you are traveling with other guests.

Renting a Timeshare

It’s no surprise that people can rent a timeshare in a world where almost anything is available to rent. Vacations with timeshares are incredibly memorable and unique. When you aren’t sure whether you want to own one yet, renting is the best way to give it a try before you buy it. We have timeshare rentals available for rent. Check them out and place an offer or call us for more information.

Vacation Exchange

Now that you’ve learned what a timeshare is and how it works, let’s jump into vacation exchange! Of course, having the option to stay at the same resort each vacation appeals to some people. It allows them to make the resort their home away from home. Timeshares allow you to explore new places year after year and let you revisit your favorites time and time again. However, if you want to explore new locations on each vacation, there are plenty of options. Many resorts are affiliated with a timeshare exchange program, such as Resort Condominiums International (RCI) and Interval International (II). These allow you to trade your week for another resort for a small fee.

Third-party timeshare exchange companies like RCI or Interval International offer timeshare owners the ability to exchange with a massive network of other owners. 

Most timeshare companies affiliate with one or the other, and some affiliate with both. Make sure to check with your resort beforehand. As an owner, you can sign up for an RCI or Interval International membership and begin taking advantage of their vacation opportunities. 

Your ownership will be converted into a new points system with its seasons and demand. Owners can use their exchange points to book at thousands of hotels and timeshare resorts worldwide. These vacation exchange programs also let you redeem your points on cruises, excursions, high-adventure trips, airfare, car rentals, event tickets, passes to popular attractions, and so much more. With all the options vacation exchange offers, research is important to understanding how timeshares work.

How Much Does a Timeshare Cost?

While you might only spend less than a few hundred dollars per night for a hotel room, a timeshare can cost several thousand dollars up-front. However, what you’re paying for is a lifetime of vacations to use throughout dozens of years. As a result, the average savings you can take advantage of is typically thousands of dollars. Considering timeshare costs is very important to understanding how timeshares work.

In 2024, the American Resort Development Association reported that, on average, the typical timeshare costs $24,170. This means that a timeshare is a great way to save money over time compared to potentially spending thousands of dollars each year on hotel rooms.

For those who aren’t looking to pay in full, you have the option to finance your timeshare!

Timeshare Financing

For those who aren’t looking to pay in full, you have the option to finance your timeshare! Our friends at Vacation Club Loans offer flexible timeshare financing options for folks! Enjoy fast online approval, low-interest rates, and no prepayment penalty.

You might be wondering if there’s ever a finish line when it comes to paying for a timeshare. The up-front purchase price (or your financed loan) can absolutely be paid off—so yes, you can own your timeshare outright once you’ve met those payments. However, please note that even after you settle your initial purchase or loan, you will still incur annual maintenance fees.

Timeshare Maintenance Fees

Besides the initial cost of a timeshare, you must also consider the annual timeshare maintenance fees. Even if you buy your timeshare with cash, you must still pay annual fees. Resorts or HOAs require owners to pay annual maintenance fees, which fund resort upkeep and maintenance, and are part of how timeshares work. On average, annual maintenance fees can cost $1,260 per year, depending on how many points you own, your unit size, resort popularity, etc.

Special Assessments

In addition to your regular annual maintenance fees, you might occasionally see something called a “special assessment” on your bill. Special assessments are one-time charges levied by the resort’s homeowners’ association (HOA) to cover unexpected or significant expenses that aren’t included in the yearly budget. For example, if a hurricane damages several buildings or the resort upgrades major amenities like the pool or roof, it may require owners to contribute through a special assessment.

How much you owe will depend on the size of your unit or the number of points you own, and these fees can sometimes come as a surprise. To avoid getting caught off guard, ask about any recent or upcoming special assessments before you make your purchase.

Property Taxes

Some timeshares tack on annual property taxes, which may be included in your maintenance fees—or listed separately.

The Resale Market

What many people do not think of when they buy a timeshare is the timeshare resale market. Owners who no longer use their points or weeks sell timeshare resales to buyers seeking ownership opportunities. You can find timeshare resales available at a fraction of the cost compared to purchasing directly from the developer.

You can also browse the timeshare resale market and find units for sale at the most popular resorts and destinations. It’s easy to search by destination, resort, points, weeks, and more. When you find a timeshare for sale that you like, simply make an offer. Our sister company, Fidelity Real Estate, will reach out to solidify the details and assist in the closing process.

What to Know About Timeshare Resale Value

Before jumping into a timeshare, it’s wise to understand how resale values work. Unlike traditional real estate, most timeshares do not appreciate over time. This means that when owners want to sell, especially on the secondary market, prices are routinely much lower than what was paid to the developer. It’s not uncommon to see units listed at a fraction of their original cost, and sometimes even for just the cost of annual fees. This reality means a timeshare shouldn’t be considered an investment that will grow in value. Instead, it’s best viewed as a way to prepay for future vacations and lock in yearly trips at favorite destinations or explore new locations through exchange programs. As with any big purchase, it’s smart to research the market and weigh your long-term vacation plans before deciding if a timeshare is the right fit for you.

If you’re a buyer scoping out the resale market, this can work to your advantage—you might find incredible deals on popular resorts simply because owners want to pass along their week or points quickly. On the other hand, if you ever decide to sell your own timeshare, it’s important to set expectations: resale pricing is ultimately determined by supply and demand, not original purchase price.

Best Vacation Ownership Companies

Before you buy a timeshare, make sure you look into which timeshare company you want to own with. The top timeshare brands have their separate benefits and systems.

What Makes a Timeshare “The Best”?

The “best” timeshare really comes down to your personal vacation style and preferences. There’s no one-size-fits-all answer, but a few key factors can help you find a timeshare that works for you:

• Location: Are you dreaming of regular getaways to sunny beaches, mountain escapes, or bustling city centers?
• Amenities: Pools, spas, kids’ clubs, golf courses—different brands and resorts offer unique perks.
• Ownership Structure: Some brands offer a points-based system for more flexibility, while others use a traditional fixed or floating week model.
• Exchange Programs: If you love variety, check whether your timeshare can be exchanged for stays at other resorts, both within the brand and through external exchange networks.

Reputable resort brands are often the first to come to mind for good reason—they typically deliver consistent quality, excellent service, and plenty of vacation options. However, the “best” choice will always depend on what matters most to you and your travel companions.

If you’re still not sure, take a look at popular vacation destinations and resorts that consistently rank high among timeshare owners. Exploring your options will help ensure you find the perfect spot to make lasting memories year after year.

Top Destinations

Timeshares are often associated with resorts in beach towns, and you would not necessarily be wrong! Nowadays, it is easy to find timeshare rentals just about anywhere. Timeshare resorts are available in major cities like New York and San Francisco. In terms of choosing a resort, there are numerous options to choose from in multiple locations. Before you buy a timeshare, look at this list of the top timeshare destinations. According to ARDA’s State of the Industry Report for 2024, 29% of all timeshare resorts are in Florida.

State	Percent of Resort
Florida	29%
California	9%
South Carolina	7%
Hawaii	6%
Nevada	4%

Some of the top destinations for timeshares can be found in Orlando, California, Hawaii, Myrtle Beach, Las Vegas, Hilton Head Island, and more.

Can You Sell a Timeshare?

Owning a timeshare, whether it’s a fixed week timeshare or points, is a big responsibility. Timeshare is not an investment and is not treated like traditional real estate. Therefore, when a lifestyle change happens, or vacation ownership is simply not being used like it used to be, it may be best to find a way out of it. Fortunately, there are safe ways to get out of your timeshare contract, and selling is an option.

If you are thinking of getting rid of your timeshare, the first step is to contact your resort or developer. Companies like Wyndham Destinations and Hilton Grand Vacations Club have timeshare owners’ best interests in mind. These companies are also members of ARDA, the American Resort Development Association. ARDA represents vacation ownership and resort development industries, promoting growth and advocacy. ARDA recognizes members who adhere to strict guidelines and an Ethics Code. 

Your vacation ownership brand will guide you through several different options regarding getting rid of your ownership. They also commonly refer owners to reputable companies that will help owners sell a timeshare.

Timeshare Scams to Be Aware Of

There are many options to get out of your timeshare; however, a “timeshare exit team” or “timeshare exit company” that advocates strongly against timeshare is a red flag. If a professional advises you to stop paying your maintenance fees or asks for huge up-front fees, take a warning, especially if they are not recognized by ARDA. 

When you are selling your ownership, it’s essential to be aware of these timeshare resale scams. In short, you should never stop paying your timeshare maintenance fees or dues, and you should also never pay thousands of dollars upfront to any resale or exit company. Failure to pay yearly maintenance fees can hurt your credit. In addition to this, many fake timeshare companies use high-pressure sales tactics.

Aside from timeshare scams, let’s dive into the gist of buying a timeshare!

How to Buy a Timeshare

Since we’ve discussed what a timeshare is and how it works, you might ask the next reasonable question: “How do I buy a timeshare?” Well, fortunately, we’re here to help!

If you’re attracted to the amenities, destinations, accommodations, and savings that come with vacation ownership, check out What You Need to Know Before Buying A Timeshare. There are a few things to keep in mind before signing on the dotted line, so do your research. When you are ready to buy a timeshare, it’s simple. Many families will attend a timeshare presentation at a resort they’re staying at. You can find these tours ahead of time if you know you are staying at a timeshare resort or nearby.

What Factors Should You Consider Before Buying a Timeshare?

Before taking the plunge, it’s crucial to weigh a few important factors to ensure vacation ownership suits your lifestyle and budget:

• Location & Resort Reputation: Is the property in a destination you’ll want to visit year after year, like Orlando, Hawaii, or Myrtle Beach? Check the track record and reviews for the specific resort—big names like Hilton, Marriott, Wyndham, or Disney often provide added peace of mind.
• Maintenance Fees & Costs: Maintenance fees are a recurring expense and can increase over time. Ensure these fit comfortably within your budget, and be aware of any extra charges or special assessments.
• Flexibility of the Program: Does the timeshare offer a points-based system or is it fixed week? Points can provide greater flexibility to visit different locations or travel at varying times.
• Resale Value & Exit Options: While timeshares aren’t considered traditional investments, some brands retain value better than others. Research the resale process and make sure there are reputable exit strategies—sometimes, buying on the resale market means significant savings.
• Exchange Opportunities: If you’re hoping to swap your vacation for a different destination, investigate whether the timeshare is affiliated with exchange networks like RCI or Interval International, broadening your getaway options.

Doing some research beforehand and asking the right questions can set you up for many memorable vacations.

Buy a Timeshare With Timeshares Only

If you’ve come this far, you might better understand the timeshare definition and how it works! If so, consider buying a timeshare with Timeshares Only! Our resale market has many resale listings and vacation options in top destinations.

If you’re a current timeshare owner who’s looking to get rid of your timeshare, Timeshares Only also has you covered!

Do You Already Own a Timeshare?

If you’re looking to sell or rent out your timeshare, consider reaching out to Timeshares Only for help. Timeshares Only is a Member of ARDA with an A+ Rating on the BBB as an Accredited Business. Give us a call at 1-800-610-2734 or email us at [email protected] to get started.