Everything I need to know about timeshares I learned from The Queen of Versailles. Still, it's the kind of product — complex, opaque, little-understood — that should be worth at least a passing glance from a travel hacker. Not least because it's travel-related!

Unfortunately, after spending a day researching this post, there's a simple answer: the numbers behind timeshares just don't work out.

Having said that, I already wrote the post, so keep reading if you're interested.

Never buy a timeshare from the developer

I know this goes without saying, but when you buy a timeshare from its developer, in addition to whatever value the timeshare itself has, you're also paying the salary of the salesman and overhead for the sales office. Don't do that.

When buying a timeshare, pay attention to the sales price, maintenance fee, and transfer fees

The Timeshare Users Group is one secondary timeshare marketplace where you can search and filter timeshares currently being offered by their owners, sometimes at a substantial discount, for example, free:

The sale price, however, is only the amount that is paid to the current titleholder. In addition, the developer collects an annual maintenance fee. You can also sort TUG by the amount of those maintenance fees, which can start quite low:

And end up astronomical:

The timeshare developer will typically charge a range of transfer fees as well, which may be paid by the seller, the buyer, or split between them depending on the agreement they come to.

So, what are these points?

If there were a deal in timeshares, this is where it would be: many timeshare developers are subsidiaries of the major hotel chains, and allow you to convert, each year, your physical timeshare (i.e. a week in Florida at a specific property) into that chain's loyalty currency at a fixed rate.

Unfortunately, those transfers are usually restricted by the kind of timeshare you bought and the channel you bought it in. For example, Marriott only allows transfers from their Marriott Vacation Club points to Marriott Rewards points for people who bought their timeshares through official Marriott channels. Everyone else is stuck with their Marriott Vacation Club points.

Hilton Grand Vacations Club is the only timeshare program I looked into which appears to allow more or less unlimited transfers of their HGVC points into Hilton HHonors points. They allow you to convert 1 of their points into 25 Hilton HHonors points. At a 0.35 cent imputed redemption value, that makes 1 HGVC point worth 8.75 cents.

If that's what these timeshare points are worth, the next question is what they cost. To run this test I had to devise a kludge. Since maintenance fees are higher at properties which give more annual points, and lower at properties that give fewer annual points, what we're interested in in the cost per point. But TUG doesn't let you sort by that value, so instead I calculated the cost per point for the 5 lowest and 5 highest maintenance fee properties currently for sale on TUG.

Here are those values for Hilton Grand Vacation Club:

In the very best case scenario, you can pay $80,000 upfront for the right to buy 600,000 HHonors points annually at 0.43 cents each. If, like one of my regular commenters, you're able to consistently get 1 cent per HHonors point in value on redemptions, you'd be earning a roughly 4.3% return on your $80,000 investment.

The much cheaper $23,500 property would give a 7.5% annual return, by the same measure.


This was a fun post to write, if for no other reason than to satisfy my curiosity: are timeshares ever a good deal? The short answer is that they are not, at least not as arbitrage opportunities.

If, on the other hand, some timeshare developer buys up a piece of land you're in love with, and the only way to visit your favorite beach or ski resort is to buy a weeklong timeshare, then don't let me stop you.

But please, buy it on the secondary market. Those salesmen are just terrible; let's starve 'em out.