When Amitabha Bandopadhyay filled up a Club Mahindra flier during a visit to a local mall in 2007, he thought he was solving his vacation worries. “A week later, the company called us to a hotel for a meeting. We were told we could holiday without any hassle and at minimal cost for the next 25 years,” recalls Bandopadhyay, assistant professor, Indian Institute of Technology (IIT), Kanpur.

Bandopadhyay was convinced. He paid Rs 35,787 — 20 per cent of the total amount — right away. “A week later, company officials collected another 30 per cent of the payment from me,” says the professor. After that there was no communication from the company for a month. “Then I received a booklet that said I could back out of the contract within a month, after which my money would not be refunded,” recalls Bandopadhyay. The booklet also stated that room bookings at the company’s resorts were not guaranteed — it would depend on availability. “And yet, the salesperson had told me that I would always get a room,” he adds.

Bandopadhyay made a point-by-point rebuttal and contacted the company. “I wanted my money back. But I was made to run around before the company refunded my deposit,” he says.

Bandopadhyay may have opted out, but many others who have bought timeshare vacations — in the belief that they were getting inflation-resistant holidays for the next 15 or 25 years — often feel severely shortchanged by the industry. They are often unable to get rooms in a destination of their choice. And the steady rise in the yearly subscription fees means that their holidays are not inflation-free either.

Of course, vacation ownership has an appealing marketing pitch — get tomorrow’s holidays at today’s prices. The industry operates on the principle of each member paying to co-own a property. Once you pay, you block one week in a year for yourself at any of the company’s holiday resorts. Membership durations range from 15 to 25 years.

Also, a timeshare ownership with an affiliated company gives customers a direct membership to Resorts Condominium International, a vacation exchange company that deals with 4,500 properties in 100 countries. “We swap weeks for a like week in another destination,” says Radhika Shastry, managing director, Group RCI India. The company claims to have 100,000 members in India.

In fact, the concept is so attractive that this is the largest growing segment of the domestic tourism market in the country today. According to the All India Resort Development Association (AIRDA) — a regulatory body for the timeshare industry — there are about 250,000 timeshare owners in India. “The member base has been growing by 20 per cent per annum in the last five years,” says B.S. Rathor, chairman and principal advisor, AIRDA. There are around 40 players operating more than 80 resorts in tourist destinations across India.

“As Indians become globally travelled, the demand for organised, high-quality leisure activities has increased,” says Ramesh Ramnathan, managing director, Mahindra Holidays & Resorts India Ltd.

Indeed, Club Mahindra’s growth figures say it all. The company claims to have over one lakh members, with its customer base growing by 35 per cent per annum over the last five years. The company has 29 resorts across India and Thailand.

But despite the obvious boom in the industry, some consumers feel that they are not getting their money’s worth. When Bangalore-based software professional Bhupesh Gupta walked into the Club Mahindra office at the city’s Leela Palace hotel, he thought this was a brand he could trust. “The office was impressive, the staff courteous,” recalls Gupta.

Also, timeshare seemed the best way to go for a vacation. “I was promised that I would get accommodation at any resort on 15 days’ notice,” says Gupta. That promise was not kept. “Last year, I called the company in August to book a room in Goa for December. I was told that rooms were not available,” he says. Disillusioned, Gupta began writing a blog on his timeshare experiences. “I tell people what exactly to expect and the true costs of buying a timeshare vacation,” explains Gupta. About 20,000 people have visited his blog.

In his blog, Gupta has made a checklist of points that potential timeshare customers must evaluate. “Do your maths before purchasing a timeshare,” advises the IT professional. Vacation ownership firms may claim that buying a timeshare ensures an inflation-free holiday, but the annual subscription fee (ASF) that members pay increases every year. “In 2003, I paid Rs 5,300 as ASF. This year, I paid Rs 7,900,” says Gupta. Moreover, there are hidden costs. “You pay for everything — ranging from children’s activities to DVD rentals,” he says.

Also, timeshare holidays need to be planned months in advance. “Be prepared to book at least six months in advance if you want a room at a popular holiday destination during peak season,” says Gupta. He also advises customers to read the membership rule book thoroughly. “There are a lot of hidden clauses relating to payment, bookings and termination of membership. Get all your facts right,” he says.

But AIRDA chairman Rathor defends the industry. “The industry was unorganised in the early stages owing to the lack of committed players, insufficient knowledge and indifference to consumer issues,” he says. But all that’s changed now, he claims. “The entry of big, committed players has helped the industry mature.”

Some say that India’s vacation ownership industry is actually facing a problem of plenty. According to a draft filed by Club Mahindra when the company came out with its Initial Public Offering (IPO), it had 20,536 members and 409 rooms in March 2004. In October 2007, the company had 63,375 members and 736 rooms. “The membership growth is more rapid than room growth,” points out Gupta. The result is too many customers vying for too few rooms.

Manohar Negi, general manager, sales and marketing, Royal Banon Resorts, Manali, a timeshare vacation company, agrees that accommodating members is becoming a problem. Royal Banon was affiliated to the RCI in 1997 and sold 10,000 memberships. “During peak season, it became difficult to accommodate all members who requested rooms, so much so that we stopped selling timeshare memberships three years ago,” says Negi.

Navin Bishnoi, a Delhi-based timeshare member, feels the problem of shortage of rooms is compounded by the fact that vacation ownership companies rent rooms to non-members too. “Indian vacation ownership companies follow a mixed business model. They give rooms to both members and non-members,” says Bishnoi, who writes a blog on his experiences as a timeshare member.

Two leading vacation ownership firms, Club Mahindra and Sterling, confirmed that they have rooms set aside for non-members, which they sell at a steep price. Club Mahindra, for instance, charges Rs 9,000 a day at its resort in Goa.

Clearly, though timeshare holidays have their advantages, consumers need to read the fine print to make sure that they know exactly what their vacation money entitles them to.