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While I was on the OBX yesterday, I stopped by one of my home resorts, and in the course of chatting with the manager, she mentioned that there had been a very large decline in the number of exchange deposits this year. When I asked how much of a decline, she pulled the RCI deposits for March weeks off of her computer, handed it to me, and stated that it was less than half of the deposits in past years for March. She further observed that there were almost no exchange deposits at all for summer months. I did note that of the March deposits, all but one were marked that they had been taken by incoming guests.
The year before Hurricane Isabell, I had analyzed the records of this resort, and knew from that examination that in a normal year, 30% of the unit/weeks were typically deposited for exchange in March and 10% of unit/weeks in the summer.
Later that day, in speaking with the manager of another OBX resort, I mentioned this, and was told that the other resort had noted the same pattern at about the same levels.
This got my curiousity up and I went back after taking care of some other business on the OBX to look at the records of the first resort in more detail.
Then it really got interesting.
Based on info from managers or board members of four different resorts, I am aware that the typical percentage of exchange deposits on the OBX over the course of a year is in the mid to high twenties. That certainly fit the numbers at the resort where I had previously done a detailed analysis.
After tallying up all of the exchange deposits for 2006 for the resort, I found that slightly under 5% of the unit/weeks had been deposited so far for 2006.
While a fair number of members do tend to wait longer than they should to deposit, this number did strike me as quite low. Of the deposits, 75% had gone to RCI and 25% to independents.
I then decided to look at the first quarter, weeks 1-13 where almost all deposits that were coming in should already be in (granted there still may be a few last minute deposits). Only 12% of unit/weeks had been deposited for exchange. Normally in this period, the number would be 30%. Of the weeks deposited, 83% had been given to RCI and 17% to independents.
For summer, well less than 1% of unit/weeks had been deposited, compared to a normal year which would see about 10%.
I looked at the second quarter, weeks 14-26, and only 5% of units weeks had been deposited for that quarter, with 40% going to RCI and 60% going to independents. Normally, the first two thirds of this quarter would see 30% of unit/weeks being deposited and the last third 10% of weeks deposited. Almost all of the deposits for that quarter this year were in the first two thirds of the quarter.
I also looked generally at the numbers showing maintenance fees paid, but did not compile exact statistics. It appeared that maintenance fees had come in strong, in spite of owners not depositing for exchange.
Then I looked at the weeks that had already gone by. While there were a handful who had deposited for exchange last year but not this year and had not paid 2006 m/f's and were thus potential bailouts, this did not seem to be a significant number. Some who had deposited for exchange last year, used their weeks at the resort this year, but the biggest group of erstwhile exchangers seemed to have paid m/f's and did nothing with their weeks. There may be reason for concern about what this group will do next year.
I have long suggested that the new RCI policies would cause a slow motion train wreck for HOA's, but these numbers cause some concern that the dislocation may indeed be more abrupt. The good thing, however, is that it seems to show that even if members are unhappy with the way exchanging is going, they do not seem to be inclined to bail out of ownership at the first sign of exchanging problems.
The year before Hurricane Isabell, I had analyzed the records of this resort, and knew from that examination that in a normal year, 30% of the unit/weeks were typically deposited for exchange in March and 10% of unit/weeks in the summer.
Later that day, in speaking with the manager of another OBX resort, I mentioned this, and was told that the other resort had noted the same pattern at about the same levels.
This got my curiousity up and I went back after taking care of some other business on the OBX to look at the records of the first resort in more detail.
Then it really got interesting.
Based on info from managers or board members of four different resorts, I am aware that the typical percentage of exchange deposits on the OBX over the course of a year is in the mid to high twenties. That certainly fit the numbers at the resort where I had previously done a detailed analysis.
After tallying up all of the exchange deposits for 2006 for the resort, I found that slightly under 5% of the unit/weeks had been deposited so far for 2006.
While a fair number of members do tend to wait longer than they should to deposit, this number did strike me as quite low. Of the deposits, 75% had gone to RCI and 25% to independents.
I then decided to look at the first quarter, weeks 1-13 where almost all deposits that were coming in should already be in (granted there still may be a few last minute deposits). Only 12% of unit/weeks had been deposited for exchange. Normally in this period, the number would be 30%. Of the weeks deposited, 83% had been given to RCI and 17% to independents.
For summer, well less than 1% of unit/weeks had been deposited, compared to a normal year which would see about 10%.
I looked at the second quarter, weeks 14-26, and only 5% of units weeks had been deposited for that quarter, with 40% going to RCI and 60% going to independents. Normally, the first two thirds of this quarter would see 30% of unit/weeks being deposited and the last third 10% of weeks deposited. Almost all of the deposits for that quarter this year were in the first two thirds of the quarter.
I also looked generally at the numbers showing maintenance fees paid, but did not compile exact statistics. It appeared that maintenance fees had come in strong, in spite of owners not depositing for exchange.
Then I looked at the weeks that had already gone by. While there were a handful who had deposited for exchange last year but not this year and had not paid 2006 m/f's and were thus potential bailouts, this did not seem to be a significant number. Some who had deposited for exchange last year, used their weeks at the resort this year, but the biggest group of erstwhile exchangers seemed to have paid m/f's and did nothing with their weeks. There may be reason for concern about what this group will do next year.
I have long suggested that the new RCI policies would cause a slow motion train wreck for HOA's, but these numbers cause some concern that the dislocation may indeed be more abrupt. The good thing, however, is that it seems to show that even if members are unhappy with the way exchanging is going, they do not seem to be inclined to bail out of ownership at the first sign of exchanging problems.
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