No Paper Trail for RCI Rentals?

[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

Here's an interesting tidbit from RCI's 2005 financial report:
Revenue from RCI increased 8% primarily as a result of increased rental activity and RCI points transaction volume.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

It is more than the marketplace that compells disclosures.

Most, if not all states require any resort in sales that is affiliated with an exchange company to provide certain disclosures about that exchange company's activities. The exchange company compiles that info and publishes a booklet for the resorts with it.

The list of info required was compiled long before exchange companies jumped into the rental business big time. It seems to me that it is time to revise those statutes with that in mind and require some very detailed disclosures relating to the rental activity of the exchange companies.

Walt -

Whether or not a company discloses information is simply another marketplace issue - if enough consumers demand the information, companies will provide it. If not enough customers care about it, the company won't bother providing the information.

When I buy a car, I do care about the history of the car. There are a lot of of other people who demand that information, enough that the marketplace has responded by producing products such as CARFAX.

There is a cost to providing information about a product. And the marketplace determines if companies will provide that information, and the way the marketplace exerts that pressure is by people such as you deciding to not do business with RCI because they don't provide the information, and by resorts leaving RCI because RCI doesn't provide the information.

If enough people and resorts feel as you do, then RCI will respond by providing the information. If there aren't enough of you to make RCI respond, then there may be enough of you to support a "boutique" exchange market that does meet your needs.

The fact that RCI is not providing the information you want is not a failure of the marketplace; to the contrary, what you are seeing is the marketplace in action. And the marketplace is saying it isn't a big enough deal to enough people right now to justify the added cost involved in providing that information.

The failure of the marketplace ti give you the answer you want deosn't mean the marketplace isn't working. Instead it gives you the path to follow to get the information you want, viz., get enough people to join you to create the demand for the service you want.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

The currently operating points systems hide the criteria for assigning point values. If they revealed that, they would be in serious trouble becuase they could not justify the overpointing of certain categories of resorts.

As a few of us mentioned before, a very likely explanation is that this problem that you perceive is simply not on the RCI product managers priority list for new developments. It may be important to you, but probably not as important as other development items are to the company, its other customers and its shareholders.

On the broader topic of "hiding the facts" that you raise, I believe that weeks exchange systems fundamentally require hidden facts and information in order to operate effectively. If that information is exposed, then the system becomes unstable and potentially collapses.

What are some examples? Trading power formulas, exchange strategies such as "bait and switch", "loose lips, sink ships" techniques, sightings for tiger traders, renting of spacebank weeks by brokers, etc. Heck, even the most consumer friendly exchange company in DAE feels it cannot share with us its exchange statistics for competitive reasons. I wonder what is so proprietary about that data? Could it be that it exposes instability in the system? That is my guess.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

But I draw the line at using the power of government and the courts to infringe someone's freedom to act just because we don't like their decisions.

What is at issue is using the power of the courts and government to stop the abuse of quasi-monopoly powers to defraud consumers, which is a legitimate use of judicial or legislative power.

RCI is effectively a monopoly for those who want to exchange at many of its affiliated resorts. Many are not dual affiliated with II, and resort management too often doesn't inform members about their ability to use independents. That leaves many members in a situation that if they want to exchange, RCI is the only game in town. It is the abuse of this situation through rentals and through the unfair relationship between Points and Weeks that cries out for strong government action.

Of course, the best scenario would be if timesharers could help grow the competition in the exchange industry, so that exchangers at all resorts could have real choices. Then there would not be the need for government intervention to halt RCI's abuse of its quasi-monopoly status.

As it is, those bringing the class action lawsuits are heroes to timesharing.