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Balancing Life and Practice

Playing The Time Share Trade Game

The New York Times
Oct. 2004

I Found Harry Ahn on the Internet, a good place to look for a success story in the time share trading game.
More from the New York Times

When Mr. Ahn, a lawyer who lives in Fort Lee, N.J., bought his first time share, as he told the story in a telephone interview, he didn't even consider a spot close to home. He opted for South Africa -- a destination he freely admits he has no plans to visit.

So, why did he buy at two South African resorts? Mr. Ahn wasn't buying to vacation; he was buying to trade. The South African time shares, each for a week a year -- one at what is described as a game-farm retreat and the other in a forest setting -- cost him less than $1,000 each, about $13,000 less than the average price of a comparable share in a new resort in the United States. His assumption was that he could trade those weeks with other time share owners for time in places he wanted.

And he has. ''It's worked out very nicely,'' he said.

He has exchanged them for stays in the Poconos and on Cape Cod, and his latest coup was trading one of them for a weeklong stay next year at a suite at the Manhattan Club, a hotel-style building near Carnegie Hall, a part of the city where rooms go for $250 a night and up. ''My wife wants to come into the city and stay for a few days,'' he said with obvious glee.

Buying a time share -- guaranteed annual occupancy, usually for a week, in a condo-style apartment -- is still a popular way to secure a reliably affordable vacation every year at a resort the buyer loves. But the concept has expanded to include points-based systems that allow buyers to divvy up their time into smaller segments, spread among a choice of resorts. And now more and more travelers are in the trading game -- using their shares to get somewhere else. Increasingly, it's a game of strategy, with savvy owners like Mr. Ahn finding ways to score advantageous deals.

Time share trading isn't new. RCI, the leading company that handles the mechanics for willing traders, is 30 years old. But trading has heated up because of the Internet, where RCI and its major competitor, Interval International, now operate, and where would-be traders can buy time shares from Web-based brokers and learn their way around at sites like the Timeshare User's Group (www.tug2.net) and Timeshares.com.

Typically, time share owners who are ready to trade ''deposit'' their shares with RCI or Interval, and the company finds appropriate matches that owners are free to accept or reject. John Barrows, a spokesman for RCI, said the company's goal in arranging trades was ''establishing like for like.'' In other words, offering a winter week on Cape Cod isn't likely to get you a summer week in Hilton Head, S.C. But it might get you a winter week somewhere else along the Atlantic shore of the Northeast.

Time share buyers who buy with trading in mind look for low-priced places with just enough cachet so that they can be swapped for desirable destinations. Bargain-priced resorts can be in Mexico, the Caribbean, Australia and sometimes even the United States. Mario Collura, a broker in Los Angeles, said California time shares at older resorts sometimes go for as little as $1,500. But in recent years, South African resorts have commanded special attention.

Some South African time shares are on beaches, some are near national parks, and many are in the country's most prized resort area, Sun City. Europeans, particularly, favor South Africa as a vacation spot. For Americans, the attraction is the cost; though the rand has strengthened against the dollar, currency exchange rates still keep prices down for American buyers. (Late this week, a rand was worth about 15 cents.)

NOT that everything always turns out perfectly, as I found when I entered the game in 2001 and 2002. I bought one South African time share near a crocodile farm and another in a popular beach area for less than $750 apiece. At the beach, I'd been promised a high-season week but got just the opposite -- a lesser-valued, low-season time. It's proved to be a decent trader, to borrow the popular term on time share message boards, but still, I'd fallen into one of the many pitfalls for people who buy in inexpensive but faraway locales.

The buyer must still beware, but in the last couple of decades, the time share industry, once known for its heavy-handed sales tactics, has gained mainstream credibility, especially after big companies like Disney, Marriott, Hilton and Hyatt began selling resort time shares. And the Internet has spread the word and has increased interest in trading.

Exchanging is all about playing the game, said Fern Modena, a Nevada retiree who owns about a half-dozen weeks in places ranging from Las Vegas to, yes, South Africa. ''I think that in any business there are people who will know how far they can skate to the edge and what they can they do with the system,'' she said.

Ron Rutter, a time share broker in South Africa, said he had sold time shares there to hundreds of Americans in the last six years and didn't think any of his buyers had actually visited them.

''If one considers the price, all they have to do is make one or two trades and it's paid for itself,'' he said. ''Anything above that is for free.''

Well, not quite free. Time share owners pay annual maintenance fees and can be subject to special assessments. (In South Africa, the annual fees, typically under $350, are about half what many American resorts charge.) The exchange companies have their hands out as well: RCI, which processes more than two million exchanges a year, charges up to $179 a trade, plus as much as $89 for annual membership.

The biggest hidden cost in time share trading is uncertainty. Owners hope for good swaps, but supply and demand depend on location, season and changing perceptions of what's hot. Even the strongest South African time shares, for example, would have difficulty competing with time at a prime United States property, like a Hyatt resort in Key West or a Marriott complex in Maui.

Other unknowns come into play at the time of purchase. How reliable is a faraway seller, broker or resort? Many Americans buying in South Africa have reported delays in receiving valuable paperwork, including deeds. Others have shared my experience, buying and later discovering they hadn't gotten what they were promised.

In 1997, Caroline Gibson, a retired New York City probation officer, bought a week at a resort in the Bahamas, priced at a mere $700, for exchange purposes. Initially, she said, ''it was a great trader.'' Then the resort had financial problems, and the trading value of Ms. Gibson's time share diminished while her annual maintenance fees doubled to nearly $800. ''I've yet to receive a financial statement,'' she said.

Many resale brokers and others familiar with the industry say buyers are better off staying with established resorts at familiar destinations and should buy only where they'd like to visit at least occasionally. ''Exchange is the frosting,'' said Mr. Collura, the Los Angeles broker. ''The basic value is in the property you're going to use.''

But for many, trading is the lure.

Americans who buy in South Africa often get the idea, as I did, after visiting tug2.net. On its South Africa message board, strategies and the pros and cons of different resale brokers are discussed ad infinitum.

For many devotees, time share trading is as much a treasure-hunting hobby as a way of vacationing.

Kathy Holleger, who works for a tutoring company in the Philadelphia area, frequents the tug2 site. She has owned as many as four South African time shares, acquired for as little as $350, and has engineered successful trades for stays at the Manhattan Club and in Williamsburg, Va. She acknowledges that finding the deals is time-consuming and sometimes nerve-racking.

''I can see how some people wouldn't like to do it,'' she said. ''It's like any kind of bargain hunting. It's work to save money.''

Copyright 2004 The New York Times Company International News National News New York Regional News Political News Business News Technology News Sports News The New York Times

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