Vacations for Life: Too Good to Be True?

If you think buying a timeshare in Mexico sounds like more trouble than it's worth, the Royal Holiday Vacation Club has a deal for you. It offers something completely different -- let's call it the un-timeshare.

A promotional video produced by the company says, "Welcome to the exciting world of Royal Holiday … a great way to have luxury vacations without breaking the bank."

Based in Mexico, Royal Holiday is doing a booming business signing up vacationers at busy sales offices around the Caribbean. It isn't selling property; it's selling points and promises. A typical member pays roughly $11,000 to join the club, plus a yearly fee of about $465. For that, a member gets points that the club says can be used to book luxury vacations.

Royal Holiday calls its Vacations for Life plan an alternative to the complaint-riddled timeshare business. But a "20/20" hidden camera investigation inside the club's sales operation in Cancun raised troubling questions about how Royal Holiday sells memberships and delivers on its promises. According to angry complaints placed both in the United States and in Mexico, hundreds upon hundreds of the club's members wish they weren't.

"We love to travel," says Natasha Rajtar of Albany, N.Y., who signed up with her husband, Jason. "And we thought how cool over the next 30 years to be able to travel the world with our children."

A Royal Holiday promotional video says, "Today we can share a secret with you, one that guarantees luxury vacations in first class hotels around the world."

What is Royal Holiday's real "secret"?

"20/20" interviewed a cross-section of the growing number of members who say Royal Holiday misled them about how the club operates, and the availability of vacations they'd want. They say the only thing royal about their membership was the way they were ripped off.

John and Robin Chomko, who are from the St Louis area, joined in the Dominican Republic in 2006. "They'll tell you anything," John says of the Royal Holiday salespeople. "They'll lie, I mean, they lied completely to us."

Royal Holiday says 97 percent of its approximately 65,000 members never complain. But Mexico's consumer protection agency, Procuraduria Federal del Consumidor, or Profeco, says Royal Holiday has 1,800 complaints. Asked to comment, Royal Holiday referred us to its Mexico City lawyer, Agustin Garcia. We pointed out to Garcia that in 2005, Royal Holiday had 282 complaints; 506 complaints in 2006 and 761 complaints in 2007. A short time after our interview, Royal Holiday provided the following written statement:

"Royal Holiday Club is fully committed to providing a best-in-class vacation experience to all our members. While the kind of complaints reported by '20/20' have come from only a small percentage of our customers, we take these issues very seriously and are working aggressively to address them. Building on our 25 years of experience, we are undertaking a comprehensive effort to improve the quality of our services and increase customer satisfaction."

The Federal Trade Commission says the travel, vacations and timeshare industry was in its top 10 complaint categories in 2007. And it says complaints about Royal Holiday are also piling up at the Better Business Bureau of South East Florida and the Caribbean, located in West Palm Beach, Fla.

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