FEATURE-Timeshare owners see assets turn into liabilities

By Chris Reiter

NEW YORK, Jan 30 (Reuters) - Timeshare is not quite the investment that Patricia Uhler had hoped it would be.

While companies like Wyndham Worldwide Corp, Starwood Hotels & Resorts Worldwide Inc and Marriott International Inc are doing great business around the world selling timeshare, Uhler has not been so fortunate.

Finding that she has less time and money for vacations than she expected, and with combined maintenance fees climbing to nearly $1,200 a year, Uhler has sought to sell two weeks of timeshare that she had hoped would be a nice investment in prime resort real estate.

But in her six-month effort to sell a week at a resort in Myrtle Beach, South Carolina, and another week at a property near Walt Disney World in Orlando, Florida, the mother of two has encountered dubious brokers and the realization that most of her money is probably gone.

Buyers on the timeshare resale market are scarce, and experts say sellers are lucky to get 10 percent of the original price. It could be even less: timeshares are routinely offered for sale on auction site eBay starting at 1 cent.

VACATION NOT INVESTMENT

The problem for many buyers like Uhler is they believe timeshare is a slice of real estate, which they hope will increase in value. High-pressure, glitzy sales pitches can add to the confusion.

In fact, they have no ownership of the underlying property. Rather, they're buying only the right to use it -- typically, a one- or two-bedroom apartment -- for a set amount of time each year. The industry is quick to point out that timeshare is a pre-paid vacation, not an investment.

The slump in the U.S. real estate market has made things even harder for people, like Uhler, whose timeshares are in the United States. But the resale difficulties are worldwide.

"Timeshare is a kind of stupid, complicated thing to get involved in," said Briton Annie Galvin, who owns two weeks at a development in Stratford-upon-Avon, William Shakespeare's birthplace.

"We can't sell it even if we find an idiot to buy it," said the substitute school teacher from Northwood, Middlesex, who bought the weeks for a total of about $5,000 seven years ago. "We realize that we've lost our investment."

With a generation of adults approaching retirement and looking to kick back, sales of new U.S. timeshares -- the world's biggest market -- have nearly doubled over the last five years.

U.S. sales hit $10 billion in 2006, about five times the rate a decade earlier, according to the American Resort Development Association, the industry's leading trade group. About 4 percent of U.S. households own timeshares.

In Europe, more than 1.4 million people own timeshare, with annual sales of over $1.5 billion, according to trade group Organization for Timeshare in Europe.

Wyndham Worldwide Corp (WYN.N) is the market leader in the United States, while Starwood (HOT.N), Marriott (MAR.N), and Walt Disney Co (DIS.N) are also major players here. Wyndham, Starwood and Marriott also have timeshare resorts overseas, where the market is more fragmented.