Vacation club deals leave holiday makers in debt

Shortly after Hope and William Gagnon arrived in Cancun, Mexico, the couple were approached by a salesperson from a vacation club. About 21 hours later, they had agreed to pay US$27,000 (S$35,800) to join the club - a significant commitment for Mrs Gagnon, who is a customer feedback specialist, and Mr Gagnon, a hospital courier.

They had bought what they believed the Unlimited Vacation Club (UVC) was selling: free or deeply discounted weeklong stays at luxury resorts with opulent suites, pristine beaches, swim-up bars and private concierges.

But the Gagnons found out after they signed the contract that the club had numerous restrictions. The unavailability of many resorts, hidden fees and a requirement to pay extra for upgrades that would give them access to the swankiest rooms made it nearly impossible to book the kind of vacation that had impressed them during a pitch meeting.

"I was like, my God, we got had," Mrs Gagnon said.

Vacation clubs are the latest twist on timeshares - an industry often criticised, and even mocked, for using aggressive sales tactics to persuade people to buy a share of a vacation property, giving them the right to use it for a certain number of days a year.

In a vacation club, there is no real estate ownership. Instead, people make a down payment to join, followed by monthly payments, to get discounted rates at a portfolio of resorts.

Shrewd salesmanship and abundant liquor were not the only factors at play. Most enticing was the trusted brand name behind the membership club: Hyatt.

Hyatt manages the club, deriving revenue from fees and royalties, according to the company's public filings. But among the clauses buried in the contract is one stating that the membership is governed by the laws of Panama.