What’s up with Interval International’s timeshare “upgrade fees per unit”?

By | August 13th, 2016

Charles Cummings says he and his fellow owners at Interval International are being charged “upgrade fees per unit” of $99 without warning.

Can timeshare companies do that?

And what do these extras cover? Do the companies have any responsibility to give their members a heads-up on new fees or any information about their purpose?

Cummings isn’t looking for a refund for the fees. He contacted our forum advocates to ask these questions and to warn other Interval members, current and potential, about these upgrade fees.

Interval, an operating division of Interval Leisure Group, is a timeshare company based in Miami, with a network of more than 3,000 resorts in more than 80 countries. According to its website, “Interval provides its members — vacation owners from around the world — with comprehensive exchange services and a variety of other exciting benefits that offer value and convenience at home and on the road.”

Timeshares, including Interval, issue “points” to their owners, as opposed to deeds to the properties. The owners are supposed to be able to use these points to stay at any resort operated by the timeshare company and are responsible for maintenance and property taxes.

Participation in an Interval timeshare involves acquiring an initial Interval membership and a “Vacation Interest,” which is defined in Interval’s Buyer’s Guide as “possessory rights, occupancy rights, or usage rights in accommodations and related facilities for a period of time during any given year.” An Interval member in good standing is then eligible to participate in Interval’s “Exchange Program,” in which members request and make deposits to confirm accommodations at Interval’s resorts.

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On June 26, Interval instituted unit-size upgrade fees with no notice and no explanation. Interval members who were trying to exchange timeshares found themselves paying $99 per unit for each additional room added to their booking. A member trading up from a studio to a three-bedroom unit would be billed an extra $297 [sic] (the actual exchange fee of $179 plus the $99 upgrade fee) [plus an unexplained difference of $11].

According to Yvette Battalla, a spokeswoman for Interval, the following notice was posted in a forum on Interval’s website in response to complaints about the fees:

We have heard your concerns and apologize for not providing advance notice about the new unit-size upgrade fee. We assure you that we will improve our communications in the future.

Prior to launching this fee, we reviewed data and conducted member research to better understand member behavior and inventory utilization. We learned that members often confirm larger units than are necessary to accommodate their travel party.

This finding, along with the fact that points-based members already relinquish more points when receiving a larger unit, the trend toward shorter booking windows, and other factors, influenced the introduction of the unit-size upgrade fee. As always, if a unit-size upgrade is offered during Flexchange, there is no additional fee. [Flexchange is a service offered by Interval for vacation exchange requests within 59 days of the desired dates of stays.]

The unit-size upgrade fee supports Interval’s commitment to providing comparable exchanges to members around the world. Our inventory control and optimization processes are designed to create the greatest number of exchange opportunities possible for members, while maintaining fairness across the system.

According to this notice, Interval is charging more for upgrades because it found that its members are confirming larger units than it thinks they need. A family of four might be confirming bookings and paying for three-bedroom units, only to be charged the upgrade fee because Interval thinks they only need two bedrooms. But since when is it up to a company, even a vacation rental company, to decide for its customers what their needs are? Shouldn’t the company be listening to its customers explaining their needs and working to accommodate them?

And neither the notice nor anything else on Interval’s site indicates exactly what the fees cover. Are they being used to pay higher utility bills or for renovations to common areas? Do they cover higher salaries, benefits and perks for employees of Interval? We don’t know — and more importantly, neither do the members.

In addition to the lack of transparency about why these fees were imposed, the lack of advance notice to Interval’s members that they would be charged these fees is troubling. Interval’s Buyer’s Guide indicates that:

All fees may be increased from time to time by II [Interval International], at its sole discretion. Members will be advised of any such increases through II’s regular publications or on II’s website, IntervalWorld.com.

This provision notwithstanding, Interval should have notified its members about the upgrade fee prior to invoicing them for their stays, and it needs to be specific about what those fees actually cover. If its inventory of larger units is smaller than its members are confirming, then it should adjust its marketing and clearly indicate how many units are available rather than second-guessing its members’ needs.

What we have here is a failure to communicate – and Interval’s customers are the ones paying for it.

Should timeshare companies be legally required to communicate to their members reasonable notice of the assessment and an explanation of the purpose of additional fees?

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