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I think they are trying very hard to make survive. And this may work. If it does, then RCI will have a tough competitor in both Rental and Exchanger. They basically behavior as a broker only, RCI accidentially play broker and player at the same time.
Jya-NingJya-Ning -
I've had an hour to think about this new program. Over the next month, if I have time, I will do a deeper dive and try to figure out their strategy. And, I'll try to validate my current thinking which could be competely off base. At first, I thought that they finally got it and they were headed in the right direction. After eating lunch, I now have my doubts. We shall see. As you read the following assessment, please realize that this is not based on detailed analysis. But, distinct impressions and some analysis. It will provide a start to this exciting development.
First and foremost, this is a good move for Redweek because it is a bold attempt to create a new point system based on the concept of a rental exchange. I believe that is right on because it has the potential of creating a dynamic point value that changes with supply and demand. And, Redweek has a fantastic website even though I believe their business model has been extremely weak. Any time you get a million of anything, you have something. The problem is that they are NOT involved in the transaction. They are just a listing site and a listing site that charges both buyers and sellers when it's competitors don't and seem to get more exposure.
In timesharing, listing sites get the least amount of the value chain for timesharing. My guess is that Resort Developers get the most, then management companies, then financing companies. After a huge drop off, then its brokers, rental agencies and exchange companies. About a year and a half ago, I estimated the total revenue of Redweek and it wouldn't even support more than a couple of employees. With their price increase early last year, I think they probably decreased in size as "free" sites like Vacationtimesharerentals and Craigslist started taking listings away from them. That's right. The alternative to Redweek is free listings that get more exposure, not less.
At the same time, exchange companies like SFX are growing like gangbusters because they are living off the anger of RCI and II and servicing an existing base of customers looking for an alternative. The get between $50-100 per year membership fee plus $100-150 for exchange vs. $15-20 for Redweek.
Redweek is clearly trying to create a way to monitize their website. I believe the revenue that they help generate for owners is significant. The only problem is that their share of that transaction is very small in relation to their economic contribution. That's the biggest flaw in their model. They created a fantastic website that is making everyone else money but themselves. This is the venture capitalists worst nightmare.
With this new exchange system, I believe they are onto the right concept. The question is can they turn it into something that makes money or will they just sell out like the founders did Classmates.com? Or, will they stay a bit player with a high profile? Redweek is a great marketing company since they have lots of industry players believing they are the belle of the ball. I would refrain from giving them that label without getting a 10 minute view of their 2 year income statement and balance sheet. The key will be to somehow turn their registered customer and owner list into an ongoing annuity.
As an aside, have any of you actually used classmates.com? I did on 3 separate occasions. Not once did I ever get anything interesting out of that website. They were great at getting people to sign up and failed miserably at getting people to engage and build community. At least this was true at my high school. Tons of my classmates registered. Nobody posted anything meaningful. This may be better at other schools. But, not for mine.
Look at Redweek's success at creating a message board or direct exchange facility. I would say that those 2 initiatives were total busts. The never ending extensions for direct exchange and non-posters is indicative of their lack of community building skills.
I will be watching carefully to see if Redweek has a clue on turning their listing site into a revenue generator for exchange. To do that, I believe they need to be involved in the transaction. Being an exchange company helps that. I also think they need to be a rental agency and maybe even a broker. That data and customer relationship will translate into far more revenue and a much harder to replicate asset in transactional data. This is a clear move into the right direction. I wish them luck.Comment
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Gave it a test drive
Just gave it a test drive. Got an emailed response a few hours after my request went in. It gives me their valuation for a 2 bedroom ski week at Grand Summit/Canyons for 2,321 points. So now it's time to go shopping with my points.
The site is not set up to go shopping for an exchange easily.
I expected there to be a real-time master list of available exchanges with their point values.
Instead, it requires searching by each region or resort by name, then scrolling down to "exchanges" and checking to see if any resorts and weeks I like are there in my points range.
Nope, nothing there that I want. So it's back to starting another search by region or resort name.
Since they've made this such a time consuming process, I won't be back.
Edited to add: As an example, I searched for region California and clicked on Nob Hill Inn in SF. The choice there was for a hotel room/sleep 2 for 1,155 points for December 14-21, 2007.Comment
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What does 2321 mean? Is there a metric is gives you? Or, do you have to stumble your way around to get an idea?
Did you have to irrevocably deposit your week? Or, is that just the value you have been assigned?Comment
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I filled out a form indicating a week I would give and they sent back a reply telling me the point value they are assigning to it today. There is also a fine print caveat about the point value being higher the earlier you put it into the exchange system.
So I tested it out by asking for the point value they would assign to a 2 bedroom/ sleep 8 for February 22-29, 2008. I also asked in 2 separate requests for the same week's value as a hotel room or a 1 bedroom. They did not reply at all about the smaller units' point value for the same week.
I didn't have to deposit anything to get this information. They're willing to tell you what your week would be "worth"; but they also reserve the right to change the assigned value up until the time you actually make the deposit from what I can tell. Didn't read every bit of the fine print yet.
__________________________________________________ __________________________________________________ __________
Here's the form letter you get after you submit your request for valuation.
Hi ,
Thank you for submitting your valuation request - you will receive your RedWeek Exchange Points offer within 24 hours.
How it Works:
RedWeek Exchange uses a simple system: RedWeek Exchange Points. We will tell you how many RedWeek Exchange Points the week you submitted is worth, based on a variety of factors. Along with our offer, you'll be given the option to deposit your week. When you do, you'll have three full years to use your RedWeek Exchange Points toward the reservation of any exchange week available on RedWeek.com.
Accepting Our Offer:
You can accept our RedWeek Exchange Points offer immediately, as long as:- You have a full week (7 nights) reserved at your resort.
- You have not committed your week to another party or exchange company.
- Your maintenance fees and assessments are paid through the date of the week you submitted.
- You have a current RedWeek membership ($9.99 for 6 months or $14.99 for 12 months).
Benefits of Depositing Early:
- Lock in the highest point value we are likely to offer.
- We have limits on the number of units we'll take for a given week or a given resort. We cannot guarantee you will be able to deposit your week if you let your offer expire.
- Ability to book your exchange immediately. If your offer expires, you'll have to request a new valuation when you're ready to make a trade. There are no holds available during the re-valuation process, so this delay may result in the loss of the week you want.
See how many RedWeek Exchange Points you need to get the week you want, so you'll be ready to reserve it when your offer comes in. If your week is valued lower than the week you want, as long as you have at least 50%, you can buy the remaining points at the current rate ($1/point).
Browse exchange availability now »Comment
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the website says:
We will never hassle you to take a week - you sign up to be notified when the exchange you want is added, and we will alert you by e-mail. No pressure. No phone calls.
That must be the alert service you get after you officially deposit the week, but not available to you prior to that. What is strange is that after you get the notice of point valuation, it tells you to go searching for the region/place you want to go to, but it gives you no instructions about setting up the alert. So I guess you must pay first to get notified.
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I hope it works, it would be great to see the market establish real value, just not getting my hopes up. I was offered anywhere frome 131,000 points to 272,000 points on weeks I threw by them. Interesting!!Comment
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As mentioned over on TUG, this seems to be a partnership between Redweek and DAE. I'm wondering where the DAE inventory is coming from -- it's resort inventory, rather than being from individual owners, I think. I plan to ask about this on the Ask DAE form, if no one has yet.
Did you mean 1310 to 2720? That seems more in line with what others have stated.Originally posted by odaddy View Post
In general, the price (quoted over on TUG) of $1 to buy a point sounds quite high. Redweek currently has many listings in the 1000+ Redweek Points category. Not many timeshares actually rent for $1000 or more, though. I'd guess a Redweek Point should really be worth closer to $.50, from my quick glance at their numbers.Comment
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Post and swap on TS4MS?
Park Plaza, Park City, Utah Feb 22-29, 2008 is valued at the same level as Grand Summit, Park City 2,321 points.Comment
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Originally posted by JudyS View Post
Yes, 1310 to 2720 duh.... I agree, the $1 a point seems very high, I wonder if that is set in stone, or there to encourage more deposits for now?Comment
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Red Week - Exchange Program
Do you think that some of the resorts
will make Red Week have a 1 in 4 ruleComment
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I didn't see this note before. So, it is true. They only have an alert service. They are not using people to help with exchange alternatives.Originally posted by hudson View Post
Hmm, the advantage of this approach is that it is completely self service. And, it has a lower cost structure than a normal exchange company.
The disadvantage is that you have to find your own week for exchange. If you are not smart about how you do searches, you may get discouraged and move on.
I guess it could work if there was enough inventory in there and people get accustomed to searching for their own exchanges.
I still have my doubts about a fully self serve model, especially at $125 per exchange.Comment
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Originally posted by BocaBum99 View Post
My guess is for now, it will work. I did some search on their exchange opportunity, and send them a request on valuing one of my week. when the result back, they also recognize I dis some search, and ask me if I want take these week.
And in their sell/rent you can set the alert to get notify when new one add in.
At this moment, if you can find redweek, you are pretty much be able to handle the search.
I look at the exchange rate, I believe since they haveonly the asking price, they just use asking price as basis without add the ratio of if it really sell through their system. Don't know how they calculate their time value.
But it will give people enough incentive to add into their member list, since they do charge for the membership just for looking at the detail renting inf. And that is one of the biggest complain about their change last year that this will loss too many buyers and reduce their traffic.
Will see if that get work.
I don't think they will need deal maker, since all the value is upfront. If they make right value and there is one person look at that area, deal will be made. And since they only give out their points, so there is no risk for them. The quesion is how long it will take them to grow.
Jya-NingJya-NingComment
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If an owner wants to exchange their t/s, the resort has no right to restrict that activity. There are no such rules with SFX, nor should there be with RW.Originally posted by Marti View Post
The 1:4 rules come about when exchange companies get into bed with developers. RW is not beholden to developers. A smart move as far as I'm concerned.Trying to tax a nation into prosperity is like standing in a bucket and trying to lift yourself by the handles.
- Winston ChurchillComment
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