Today Mary and I took a little road trip.
First we went to Bethel, Me. If you haven't heard, it's where they built a 120' Tall snowman.
It looks like this:

That's Mary and I at the bottom.
Then we proceeded to Lincoln, NH, to check out Pollard Brook, a timeshare resort owned by InnSeason Resorts.
For two hours of our time, they gave us 10x $10 gas mail-in rebate coupons, a $20 gift certificate usable at local eateries, and 4 round trip Airline vouchers that come with enough requirements & restrictions to make a lawyer proud.
Essentially, these gifts are worthless. We knew that going in and figured it would be a fun way to blow an afternoon.
Now the facility itself is fantastic. They have 1-3 bedroom apartments, fully furnished, jacuzzi in the master bedroom, and overall ready to use. There are two pools, a hot tub, a nice gym, an arcade and a few other amenities covered by snow. It's a great facility and I'd pay good money to stay there.
The downside? The 'Vacation Club' package. You purchase a fraction of that facility. They apparently give you a deed and everything. In return, you get some mass of points that can be used for two weeks there or can be exchanged for any number of different locals.
I won't go into the details, but the 'point cost' was directly proportional to the demand/availability of the week you wanted to use, and the popularity of the destination.
Incidentally those two factors affect the price in dollars you pay to stay anywhere that makes a business out of selling lodging. You probably knew that.
So what did they want for two weeks every year at their very nice facility?
$40,000 purchase price and $1,200 per year 'club dues'. Of course they would happily lend us 80% of that purchase price at a maximum rate of 17.9%.
Does anyone see the flaw in this plan?
Before I discuss my particular problem, let us establish that it's a bad idea to borrow money for vacations you might take in the future. I'm not sure I can explain why in great detail. I'm hoping that simply considering it strikes an ill note with you.
Many of you know that Mary and I aren't borrowing money for anything ever again (with the possible exception of a house.)
So for us, the equation would be thus: We have $40,000 that we can put towards some vacation or leisure purpose. (We don't, but we will at some point.)
Now, we could give that $40,000 to InnSeason (along with $1,200 each year thereafter) and spend two weeks at their very nice facility, or some other facility each year. (We could also make various exchanges for other goods or services if we wished. Interestingly enough, we can exchange money for goods and services as well.)
Alternatively, we could put that $40,000 in an investment account. The annual average return of the stock market is 12-13%. After taxes and normal volatility, you could use 8-10% of that $40,000 each year without ever dipping into the $40,000 principal fund.
Adding it all up, this means that the opportunity cost of giving InnSeason $40,000 is $3,200 to $4,000 in income each year. The cost of giving InnSeason $1,200 each year is of course just that.
So, purchasers of this InnSeason 'Vacation Club' plan essentially pay $4,400 to $5,200 each year for two week's vacation lodging only.
When I brought this point up near the end of the 2-hour sales pitch and tour, the entire affair was over within 5 minutes. Our salesman had no good answer for us, and neither did his manager. They gave us our worthless gifts and sent us out the door.
What kind of accomadations do you think you could get for $371 a night?
It turns out that Pollard Brook also accepts plain old cash from people who wish to stay there. In fact, the front desk has a rate card.
A two bedroom deluxe unit (Sleeps 6 comfortably, 2 bedrooms, 2 bathrooms, kitchen, living room, jacuzzi and usage of the rest of the facility) ranges from $159 to $349 a night. Only 8 weeks a year cost $349 a night. The remainder of the year costs $199 or $159 a night for a very nice apartment.
This means that if you came off the street and stayed two weeks at the most expensive time of the year, you would come out ahead by roughly $308 per year over people who joined the vacation club.
If you managed to take your vacation in the other 44 non-peak weeks, you would come out over $2,400 ahead each year.
Let me put this quite plainly:
Any John Doe off the street gets a better deal than someone who joins their vacation club, at the very same facility.
By buying into their timeshare/vacation club, you tie yourself into using their or their partner's facilities, you get points that act suspiciously like dollars when it comes time to book (point value is determined by seasonal demand at the requested location, just like the outright dollar cost is) and you get substantially less value for your points than the dollars they cost you.
But wait! There's more!
Because not everyone has the flexibility to use their two weeks every year, many customers list weeks for rent on sites like Vacation Timeshares and Rentals .
A quick perusal shows many weeks available at Pollard Brook for $850, or roughly $121 a night. The low price for booking at the front desk was $159 a night + 8% tax.
Bottom line: A saavy consumer can stay at a very nice facility for as little as a third of what the Timeshare owners are effectively paying.
Pollard Brook in Lincoln, NH is a very nice facility well worth the front desk rates. We may stay there some year. Buying the timeshare, however, is an incredibly stupid idea.