Does a year round warm area guarantee a good supply/demand curve?

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

We have at least one member who regularly asserts that timeshare resorts in areas which are warm all year have good demand all year, and resorts in areas that are ''seasonal'' do not. A good test of this theory is to look at the Availibility table on page 25 of the European version of the RCI directory, which rates each month of the year in a variety of destinations for whether or not an exchanger is likely to find availibility.

The ratings are as follows:
4 = very good availibility
3 = good availibility
2 = less availibility / highly demanded
1 = limited availibility / very highly demanded

It is also interesting to compare this table with the rather out-of-date seasonal color table in our directory.

For Europe, the obvious warm-all-year place that is an extremely popular vacation destination is the Canary Islands. Of course, the Canaries are overbuilt in timeshares, and that becomes obvious when one looks at the Availibility table. Two months rate a 4, and the rest rate a 3. Obviously, being warm all year does not guarantee a favorable supply/demand curve.

When one turns to a ''seasonal'' area like France or Ireland, which, on the other hand are far from overbuilt, one finds a different result. Even the bluest of blue weeks in Ireland rates a 1, and the lowest blue week in France still rates a 2.

Some places are so overbuilt for the demand, that even the best months suffer. India, for example, rates a 4 every month of the year. Israel is at the other end of the scale, rating a 1 every month, regardless of season.

The only US area on the list is Florida, which includes overbuilt Orlando. For Florida, two months rate a 1, three rate a 2, four rate a 3, and three rate a 4.
For Florida, weather may not have seasons that vary that much, but timeshare supply and demand obviously DO have seasons. Some are simply common sense. It is not surprising, for example, that September, the height of the hurricane season, rates a 4 in Florida.

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

Warm weather provides a comfort factor to go to that area any time of year. Other factors make that choice more or less desireable, one of them being the ability of the vacationer to get away. I think you will find a lot more people in Florida in January and February than you will find at Cape Cod. On the other hand, the situation reverses in the summertime when Florida becomes more than warm.

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

NE Florida is relatively warm year-round.

Yet there are other discussions pointing out the fact that there is almost always excess inventory of Resorts on the Beach in that area, even in the most popular months for Resorts on the Beach in Florida.

I have documented that fact daily since I started searching Resorts on the Beach on 3/10/03.

Hawaii has a similar situation in that it is a tough trade from roughly Christmas until April, yet September through Christmas is a fairly easy trade. Being Hawaii, it is not the temperature there that changes; it is temperatures elsewhere the change, promptly the warmer desitination to become more popular.

[bigfrank Administrator Find all posts View Profile Close bigfrank]

The USVI, St Croix, St John, St Thomas and Puerto Rico all have temps that stay within the 80-90 range all year long. But from my understanding they are off season in the summer.

[timeos2 Senior Member Find all posts View Profile Close timeos2]

Lets use the places US owners actually go regularly

While it is interesting to see how availability tracks in Europe or South Africa or even Austrailia the majority of owners in the US travel most of the time to US destinations. Thus the real life numbers of US use are far more meaningful than what someone interested in European system availability might be.

Here are the facts based on two selected areas tracking annual use over the past five years.

East Coast RID/Silvercrown resort in a highly seasonal area.
June to late August Thanksgiving & Easter weeks
97.6% occupancy. They are full about 14 weeks per year on average.
September to Mid-October, March to May
55% occupancy This includes owners and renters. 19 weeks per year they are just over 1/2 full.
November (except Thanksgiving) to February
30% with weeks of less than 20% occupancy. 19 weeks per year.
Average 57%

Orlando RID resort
January to December Highest occupancy 98% - lowest 58%.
Average - 75.5%

Now these are rounded numbers over a 5 year period. But it is obvious that the peak time at the seasonal resort is effectively sold out while the other times - the majority of the year - are readily available. The average for the seasonal resort is lower than the lowest week at the warm weather resort. Yet the owners pay the same for every one of those weeks.

The Orlando warm weather resort also has peak and valleys but the difference between high and low is much narrower and the majority of weeks are over 75% utilization year round. The owners pay the same for every one of those weeks. Which one has the likelyhood of being a better value for the money spent? If you own one of the highest demand times in the seasonal area you win hands down. But in a strong second place is any week - even the so called "slow times" - at the warm year round area. Since the majority of the weeks to be purchased at the seasonal area are the lower utilized periods while any week at the warm weather resort is viable the overall value has to be with the warm weather resort for most owners.

Final thought. Which would you rather try to sell? The 38 weeks of dog time at the seasonal areas or the 52 weeks of useful time in the warm weather locations? Which resorts, when "sold out", still have hundreds of weeks that have NEVER been purchased and most likely never will? Hint - it isn't the area where the temperatures are often above 60 in January.

I appreciate the fact that developers and owners have taken the risk to create resorts in highly seasonal areas that I have both owned and enjoyed on exchanges. But there is no doubt that the value of those non-prime, seasonal use periods can never be made equal to an area that sees year round use no matter how many times it is repeated. It just isn't an equal trade no matter how many physical units there may be when the low demand for those many units is three times the demand for the seasonal although physically limited inventory. Test it out. Offer a free week at a coastal resort in January OR a week in Orlando to a friend. 99 out of a 100 times they will choose the Orlando resort. That is the true measure of desireability which translates to demand. No matter what the French might think.

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

What about hurricanes?

I am always hesitant to exchange to the Atlantic coast during hurricane season. Maybe I am too worried over nothing. Those weeks have to go begging, especially August to October.

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

While it is interesting to see how availability tracks in Europe or South Africa or even Austrailia the majority of owners in the US travel most of the time to US destinations. Thus the real life numbers of US use are far more meaningful than what someone interested in European system availability might be.

WHAT PART OF "AVAILIBILITY" DON'T YOU UNDERSTAND?

If a unit is unoccupied it is ''availible''. If there are Americans, Europeans, Chinese, or little green men from Mars occupying it, then it is not ''availible''.

It would make no sense at all for RCI to say a week is ''availible'' if it was in fact occupied by ANYONE from anywhere. Nice punt, but it just doesn't hold water!

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

In Myrtle Beach and Hilton Head, it is called golf season, and at least as to Myrtle Beach, they have good occupancy according to a friend who owns in Myrtle Beach during that period.

On the OBX, it is called Fall fishing season, with the best fishing time on the OBX and the OBX having some of the best fishing on the east coast. Timeshare resorts are typically full through Thanksgiving. To show how strong occupancy is then, one resort that has its annual HOA meeting in early November has never in recent years been able to find enough empty units for its board to stay in for the meeting even with cooperation of managers from three other timeshare resorts. They have ended up having to put board members up in hotels. Another one meets in October, and that is even more difficult.

I am always hesitant to exchange to the Atlantic coast during hurricane season. Maybe I am too worried over nothing. Those weeks have to go begging, especially August to October.

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

We are sitting in the middle of Colorado, oblivious to hurricanes.

We don't know if it is a concern for a trade. I guess we could try the insurance through the exchange companies to make sure.

We have blizzards in Colorado, but that shouldn't stop anyone from skiing. Those snowplows do a pretty good job. I guess it is the same thing, really.

Thanks for your observations, Carolinian!

[timeos2 Senior Member Find all posts View Profile Close timeos2]

WHAT PART OF "AVAILIBILITY" DON'T YOU UNDERSTAND?

If a unit is unoccupied it is ''availible''. If there are Americans, Europeans, Chinese, or little green men from Mars occupying it, then it is not ''availible''.

It would make no sense at all for RCI to say a week is ''availible'' if it was in fact occupied by ANYONE from anywhere. Nice punt, but it just doesn't hold water!

Easy Steve. Availability within any system is based on what that system has in inventory NOT what may be available to other groups. Am I wrong on that? So the RCI European SYSTEM has x units available within their guidelines. How that relates to the US operation is unknown. Does it include or ignore points based inventory? Is it related to deposits into the designated regional system or to all deposits anywhere in RCI? Any system that says it has less inventory in a seasonal area than a year round one during the off periods is doing something to adjust the factors (such as not accepting deposits) as we all know the reverse is true. A ranking of "4" doesn't tell us if there are 3 units available and no requests (the seasonal area) vs 100 with 77 requests in the year round area. (Sure, more total units but also far more use - which has the better value Why would the zero demand suddenly become worth a 77% demand? It isn't a fair trade!)

Look, the bottom line is not everyone trades and certainly not in RCI. You say that yourself. I'm looking at actual results for the two areas and I see one area that has an all time record low use - for one single week - of 33% after 9/11. While another has an annual period that is only 16% and many resorts in that area actually close down due to the extremely low demand. I see an annual average of over 75% vs 57%. That is a big difference and reflects the seasonal, low value nature of much of the year at the lower utilization resort. No amount of hocus pocus with worldwide demand, quailty vs quantity, location vs amenities or any other factor can change the facts that one area is over 75% annual use while the other is 57%. That is the bottom line and where the value, or lack thereof, is established.

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

You appear to suggest something that I have not seen argued before; that different regions have blocks of weeks assigned to them. What basis do you have for such a claim? A have never seen anything that would suggest such an arrangement at RCI. Too bad Bootleg isn't around to give us the facts to shoot down this theory. Are you contending that Europeans cannot get into those blue weeks in France and Italy because they are holding them for Americans, or that they are holding back a glut of weeks, more than they would possible need, for Europeans in Orlando when there are Americans clamoring for them? Come on! That just doesn't make sense, does it? I don't believe that anyone has ever posted that there is a ''European pool'' and an ''American pool'' for trading purposes.

It all comes down to supply, and Orlando, desirable as it may be, simply has way too much of it. Bootleg told us repeatedly that it was one of four areas that RCI just about always had availibility. Madge wrote about the ''plentiful excess of supply'' in Orlando. Bootleg also told us that the two resorts with the biggest excess of supply in the entire RCI system were both Gold Crowns in Orlando.

Your ''east coast'' example is very obviously from the northeast, probably New England, as the numbers are way out of line for resorts from Virginia through Georgia. You try to paint the entire east coast with that example.
Its like trying to say Sanibel has the same supply/demand curve as overbuilt Orlando.

25% of the huge number of weeks in Orlando comes to a tidal wave of excess inventory, a whole lot more that 43% of the relatively tiny number of weeks in the northeastern area (is it Cape Cod?) you cite.

Its like Massanutten, another of the four areas where Bootleg says RCI always has inventory, and one that calls itself a 4-season resort. I traded in there once at the height of ski season, and at check-in, the girl at the desk commented that they only had 70% occupancy that week and that it was usually 80% at that time of the year.
That level of occupancy in prime season tells me that Bootleg was right on the money on that one. Prime season on the OBX means essentially full occupancy, and having 20% vacant in a week between Spring Break and Thanksgiving would be quite unusual

[timeos2 Senior Member Find all posts View Profile Close timeos2]

When money is on the line the winner is

It is Cape Cod but the trend holds for nearly all of the east coast. Ever been to Ocean City in November? How about Hilton Head? Those areas are almost as seasonal as Cape Cod.

Heres my final comment. Lets take two owners - one with a seasonal week and another with a largely year round area. Both reserve say the third week in January. Which one will most likely be easier to rent and bring in a higher rental rate? That is a free market speaking. Not what you call "rigged" points values or what I call the secret manipulation of trade values. It is a free, open market spending hard cash. Do you have a guess yet? I will state with absolute certainty that the year round area rents quicker and for a higher value. That is the ultimate index of value - what will someone else pay to use it. The year round area wins every time over the full 12 month period. There are great places to own and use on the coast line but the value for most people falls in a very short time frame each use year. Central to southern Fl doesn't have that serious limitation.

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

You pick arbitrary times to benefit your argument.

January, of course, is getting into the highest season in Florida or the Caribbean but the lowest in east coast areas. If you pit one area's high season against the other area's low season, how is that a fair comparision? If you compare September, on the other hand, between the OBX and Orlando, you will get the opposite result.

Ocean City is, of course, again in the northeast, and not indicative at all for the southeast coast. Late November is an off season a great many places. Florida and Cancun rate a ''3'' (good availibility) for November in the RCI Availibility tables, although the Caribbean rates a 2 (less availibility / highly demanded).

Hilton Head is generally one of the easier southeast coast trades, which says something about the high supply factor there. I am not as familiar with HHI, but I know my friend who is active in his HOA in Myrtle Beach and ran for its board last year would strenuously disagree with you about Myrtle Beach at least through Thanksgiving.

It is Cape Cod but the trend holds for nearly all of the east coast. Ever been to Ocean City in November? How about Hilton Head? Those areas are almost as seasonal as Cape Cod.

Heres my final comment. Lets take two owners - one with a seasonal week and another with a largely year round area. Both reserve say the third week in January. Which one will most likely be easier to rent and bring in a higher rental rate? That is a free market speaking. Not what you call "rigged" points values or what I call the secret manipulation of trade values. It is a free, open market spending hard cash. Do you have a guess yet? I will state with absolute certainty that the year round area rents quicker and for a higher value. That is the ultimate index of value - what will someone else pay to use it. The year round area wins every time over the full 12 month period. There are great places to own and use on the coast line but the value for most people falls in a very short time frame each use year. Central to southern Fl doesn't have that serious limitation.

[Carol C Senior Member Find all posts View Profile Close Carol C]

I have officiated debates at high schools, and I have just read the entire Carolinian/Timeos debate for the first time. Timeos' last post said it was his last post so debate is officially closed. Winner is: Carolinian.

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

I disagree Carol, I think John wins- unless he comments again- or perhaps they both lose. The whole subject is kinda flawed as too much generality falls into the orginal title. A warm area year round is only a part of the desireabilty factor unless you like Lehigh or Vacation Village near Ft. Lauderdale.