From Deseret News archives:
Prices: Developers often charge too much for timeshares
And while trying to sell a timeshare to a Deseret Morning News reporter (who disclosed where he works), Mike made a claim that would be considered illegal in such states as Florida and South Carolina, and which the industry says is unethical.
That claim: "These units will only increase in value," he said. "Park City has only so much land where you can build, and when it is gone — it's gone. Demand will continue to go up, so values will increase."
Actually, the News reporter found he could have lost tens of thousands of dollars immediately if he had believed Mike.
To illustrate, Mike offered ownership of a week in ski season of a two-bedroom unit for $41,900. He also offered a one-bedroom unit in non-ski season for $23,900. Later, Mike's sales manager said an owner had turned back a summer week in a one-bedroom unit to buy a larger unit, so Westgate was offering that turnback for $11,900.
The next day, the Morning News found several dozen similar timeshares at the Westgate in Park City advertised for much less on the Internet by owners trying to resell them. Most two-bedroom, ski-season units (similar to what Westgate offered for $41,900) were selling for between $5,000 and $11,000. Offseason weeks were selling for even less.
Why are developers selling them for so much more? Developers often mark up prices significantly to cover their costs of the free trips, dinners and other incentives they use to lure customers, and the commissions they pay sales representatives.
In fact, the Utah Department of Commerce requires people who buy timeshares from developers to read and sign a paper that warns, in part, that reselling their units in the future "may not produce a profit as the original cost includes promotional, advertising and sale commission costs."
Westgate is not the only one in Utah making claims about timeshares as investments.
A saleswoman introducing herself as Chari — trying to sell a reporter credits that allow stays of varying lengths for resorts developed nationwide by Trendwest/Worldmark, owned by the same parent company as Wyndham hotels — promised high-value retention.
She said those credits "are always in high demand" by other Trendwest/Worldmark owners seeking them to allow more or better vacationing. She said they are snapped up quickly on Trendwest's own online bulletin boards, so they keep high value. "I doubt you will ever find many Trendwest shares for sale" on the open resale market, she said.
