Vacations for Life: Too Good to Be True?

April 11, 2008— -- 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."