Does Timesharing have A Future?

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

RCI is renting out Points inventory to the general public, too. There has been another class action lawsuit filed on that.

DAE and SFX are getting all, rather than just most, of my weeks from here on out, other than one I may rent.

RCI rentals, while I understand the legitimate need due to the issues of unequal values in 7 day trades, have been twisted into a nightmare for owners and resorts. It is basically free inventory RCI makes pure profit on and now has the blessing of court approval. I would never give RCI Weeks another valuable week under the system as it as evolved.

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

The point I was making is that RCI's renting of spacebank weeks hurts the Resorts and the owners of both Weeks and Points by increasing housekeeping cost at the Resort without sharing the rental fees.

Walt

Why are the housekeeping costs higher for a rental than for an exchange?

[BWolf Senior Member Find all posts View Profile Close BWolf]

I own at two small resorts, both managed by VRI and both controlled by honest-to-goodness HOAs (no developer involvement).

I'm pretty sure rentals for these go through VRI, which shares some of the money with the resort.

Some of us owners at one of the resorts requested the ability to swap units amongst ourselves through the resort website. The HOA said no. It thought such a swap procedure would reduce its income from VRI rentals. I'm not sure of the thought process here, but that was the answer. They did reference insurance liability.

I do know that people offer swaps through the newsletter. What's the difference, except the web might expedite more of these internal, no fee swaps by owners.

Gee, owners not paying a fee. What a novel idea.

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

No Rentals And Not Used.....No Cost Of Clean Up Or Wear and Tear.

Why are the housekeeping costs higher for a rental than for an exchange?

A Unit is either exchanged into, used by the owner, rented, or not used during a week.

Who takes care of the unit the best during the week? I would think that the owner is less likely to trash the unit. But for sure, there is less wear and tear on the unit if it is not used for a week.

But there is also no cost to the HOA for cleaning if the unit is not used for a week. Let's say cleaning cost runs between $60 and $75 per unit. The Resort saves that money if the unit is not used during the week. Income from the resort comes from owners by way of the MF. What income to the Resort comes from the RCI rental? How does a RCI rental benefit the Resort?

Walt

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

A Unit is either exchanged into, used by the owner, rented, or not used during a week.

Who takes care of the unit the best during the week? I would think that the owner is less likely to trash the unit. But for sure, there is less wear and tear on the unit if it is not used for a week.

But there is also no cost to the HOA for cleaning if the unit is not used for a week. Let's say cleaning cost runs between $60 and $75 per unit. The Resort saves that money if the unit is not used during the week. Income from the resort comes from owners by way of the MF. What income to the Resort comes from the RCI rental? How does a RCI rental benefit the Resort?

Walt

You are spot on as far as HOA finances are concerned, except that you forgot the other big savings on utilities if the unit is not used.

[rikkis_playpen Diamond Club Contributor Find all posts View Profile Close rikkis_playpen]

This really depends on how the revenue streams are designed.

For resorts with consistent occupancy- add on and service fees can be significant sources of income. When occupancy levels drop unexpectantly, the operations mgr can be forced to reach into reserves or look for additional income sources (individual rentals, bulk rentals, collections billing, cooperative business development and marketing, amenity development such as a golf course, increased restaurant or bar sales, etc).

For a resort that consistently has low levels of occupancy- unused intervals are a huge benefit. (Lower utilities, employee payroll, extended maintenance schedules, etc).

The second model, however- tends to cause a decline in the interval owner's perception of value over time, as well as the overall quality of the resort.

[Ryne08 Senior Member Find all posts View Profile Close Ryne08]

When Marriott's Vacation Club stop building new timeshare resorts then I would say timeshare vacation is in big trouble. This is only my assessment.

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

The Resort was 8 Two Bedroom Units and 40 one Bedroom Units

Summer time is prime time for St. Augustine. We go there in March and April. There appears to be 95% to 100% of the units being used. Summer time weeks are usually 100% being used.

Addition service is $10 for the internet, if you want it. Perhaps $3.00 for 2 hours of biking. That's it. Tennis is free on clay courts. The beach is free. No revenue streams from a bar or restaurant.

RCI's rentals really has no benefit for smaller resorts like this. In fact, RCI rental program may even harm the Resort's rental program.

Walt

This really depends on how the revenue streams are designed.

For resorts with consistent occupancy- add on and service fees can be significant sources of income. When occupancy levels drop unexpectantly, the operations mgr can be forced to reach into reserves or look for additional income sources (individual rentals, bulk rentals, collections billing, cooperative business development and marketing, amenity development such as a golf course, increased restaurant or bar sales, etc).

For a resort that consistently has low levels of occupancy- unused intervals are a huge benefit. (Lower utilities, employee payroll, extended maintenance schedules, etc).

The second model, however- tends to cause a decline in the interval owner's perception of value over time, as well as the overall quality of the resort.

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

A Unit is either exchanged into, used by the owner, rented, or not used during a week.

Who takes care of the unit the best during the week? I would think that the owner is less likely to trash the unit. But for sure, there is less wear and tear on the unit if it is not used for a week.

But there is also no cost to the HOA for cleaning if the unit is not used for a week. Let's say cleaning cost runs between $60 and $75 per unit. The Resort saves that money if the unit is not used during the week. Income from the resort comes from owners by way of the MF. What income to the Resort comes from the RCI rental? How does a RCI rental benefit the Resort?

Walt

You didn't answer the question. Of course there is less to the resort if the unit is unoccupied.

What you said, though, was:

"RCI's renting of spacebank weeks hurts the Resorts and the owners of both Weeks and Points by increasing housekeeping cost at the Resort without sharing the rental fees."

You are specifically complaining here that RCI's rental program is costing resorts more money. And I'm trying to figure out exactly why it's more costly to for the resort when RCI sends a renter to the resort rather than an exchanger.

It seems to me that the resort provides the same services regardless of whether the unit is occupied by exchanger or renter.

[longtimer Senior Member Find all posts View Profile Close longtimer]

Personally, I think the single most important thing a resort can do to enhance value to owners is to control annual costs. Everything else pales in comparison.

When a resort rents out units, the money received goes directly to the homeowners association and reduces the amount of annual fees that need to be collected from owners.

Treating renters like second-class citizens will help ensure that they never come back, they bad mouth the resort to their friends and family, they post negative reviews of the resort at sites such as TripAdvisor, etc.

All of which will make the resort less desirable for rental and reduce the number of people who want to rent from the resort. The result will be higher vacancy rates and lower nightly rates for those units that do rent. Which, in turn, will mean that annual fees will need to be that much higher to replace the lost income.

Of course, demeaning the resorts reputation will also make it harder for owners to rent their units and force them to lower their rental rates.

*****

So while I understand what you're trying to do, I think that those specific suggestions might actually be counterproductive. To the extent that rentals are a significant factor in resort operation, it's in the best interest of owners to have the resort make as much money as possible from those rental activities. That means ensuring that renters feel wanted, welcomed, and valued.

I also understand where you are coming from. For many resorts, rentals bring in alot of extra income. However, in a market where it's cheaper to rent than own, giving renters the same treatment devalues ownership. As more owners jump ship, the costs skyrocket for those who stick around.
There is no reason to treat renters as second class citizens. In fact, if done the right way, extra perks may make a renter more likely to become an owner.
What's really needed is to have resorts and TS operations focus on their infrastructure and services and to chop operating costs, especially at the administrative level. And instead of pushy sales staff, maybe renters should meet with happy owners!

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

I Sorry You Can Not See My Point Of View

I happen to be an owner that believes timesharing is about using the week or exchanging the week. RCI renting that week for their profit without making it available for a exchange is not part of my point of view.

As I said, "What benefit does my resort receive by RCI renting my spacebank weeks?"

Walt

You didn't answer the question. Of course there is less to the resort if the unit is unoccupied.

What you said, though, was:

"RCI's renting of spacebank weeks hurts the Resorts and the owners of both Weeks and Points by increasing housekeeping cost at the Resort without sharing the rental fees."

You are specifically complaining here that RCI's rental program is costing resorts more money. And I'm trying to figure out exactly why it's more costly to for the resort when RCI sends a renter to the resort rather than an exchanger.

It seems to me that the resort provides the same services regardless of whether the unit is occupied by exchanger or renter.

[rikkis_playpen Diamond Club Contributor Find all posts View Profile Close rikkis_playpen]

I don't think I'd go so far as to say harm, but I understand your point..

Summer time is prime time for St. Augustine. We go there in March and April. There appears to be 95% to 100% of the units being used. Summer time weeks are usually 100% being used.

Addition service is $10 for the internet, if you want it. Perhaps $3.00 for 2 hours of biking. That's it. Tennis is free on clay courts. The beach is free. No revenue streams from a bar or restaurant.

RCI's rentals really has no benefit for smaller resorts like this. In fact, RCI rental program may even harm the Resort's rental program.

Walt

Harm may be far too strong a word.. Create competition certainly!

If it is a mature resort with no active sales program- then it may simply be a case where more creativity and self-promotion is needed from the resort mgmt.

-Perhaps the resort simply needs to become more aggressive internally to solicit owner weeks and thereby reduce available inventory to the exchange systems.

-They may also be able to promote alternative exchange systems- again diluting RCI's market share.

-If needed, they could solicit a fee for service program from a larger developer- or at minimum design a reciprocal usage program with a few other small resorts of similar quality.

There are a number of strategies that could be implemented to reduce the impact of RCI's rentals if they are needed.. However, we must remember that they may also be beneficial.... If the resort also has an active sales program (either developer or onsite resales) the RCI users, be they exchange or rental, are often a source of new sales. If the resort doesn't want to get into the sales game itself- it's normally very easy to lease floor space to a niche broker and generate a revenue stream.

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

You didn't answer the question. Of course there is less to the resort if the unit is unoccupied.

What you said, though, was:

"RCI's renting of spacebank weeks hurts the Resorts and the owners of both Weeks and Points by increasing housekeeping cost at the Resort without sharing the rental fees."

You are specifically complaining here that RCI's rental program is costing resorts more money. And I'm trying to figure out exactly why it's more costly to for the resort when RCI sends a renter to the resort rather than an exchanger.

It seems to me that the resort provides the same services regardless of whether the unit is occupied by exchanger or renter.

I happen to be an owner that believes timesharing is about using the week or exchanging the week. RCI renting that week for their profit without making it available for a exchange is not part of my point of view.

As I said, "What benefit does my resort receive by RCI renting my spacebank weeks?"

Walt

You still haven't explained why housekeeping costs are higher when RCI sends a renter to the resort instead of an exchanger.

My question really has nothing to with what you or I might believe what timesharing is about. You made a factual assertion that I'm wondering about.

****

I really haven't staked out a position one way or the other on the matter, beyond my statement that the primary way a resort can generate value for owners is by containing annual fees. Accordingly resorts should operate rental programs that maximize net revenue to the association from filling unoccupied rooms.

[rikkis_playpen Diamond Club Contributor Find all posts View Profile Close rikkis_playpen]

Unhappiness with an exchange system should not always spill over on the resort!

I happen to be an owner that believes timesharing is about using the week or exchanging the week. RCI renting that week for their profit without making it available for a exchange is not part of my point of view.

As I said, "What benefit does my resort receive by RCI renting my spacebank weeks?"

Walt

Frustration with exchanges is certainly a big negative in the current industry, but in time this will likely become less of an issue..

Alternative exchange options are increasing steadily, either from developer and resort mgmt companies or from third party exchange systems such as SFX.. This will likely result in a bigger emphasis on both RCI and Interval creating a better value proposition for members.

More buyers are heeding the advice, "Buy where you want to travel!"...

By owner rentals are increasing...



The issue of exchange companies renting weeks to me isn't the real problem. I think they need to have an outlet for unwanted weeks, and rentals is the easiest way to resolve that issue.

The true problem is the lack of transparency and consumer education! Somehow, in this industry- it always seems to come down to that!

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

I'm Not Picking On RCI But.....................

Some interesting number from RCI and my 3 deposits available for exchanging.

USA Only

For Exchange Only

1061 Resorts and 56,106 units available

Extra Vacations Only

1076 Resorts and 45,866 units available

Last Call Only

43 Resorts and 247 units available

Walt