4%-5% fee increases/year? How long can TS's sustain this inflation?

[dougp26364 Senior Member Find all posts View Profile Close dougp26364]

Our MF bills have begun to trickle in. So far they look the same as they have looked since our first purchase in 1998. The typical increase is between 4% and 5%. While wages appear to remain flat TS management compaines continue to increase fee's as if there's an unlimited supply of money available from owners. It may take another decade but, things will have to change or there's likely to be a major issue with defaults.

What happens when defaults become a burden to owners has been discussed for years. If things don't change, we may actually begin to see the doomsday scenarios start playing out in the next 10 to 15 years. I believe it takes a little over 14 years for fee's to double at 5%. If wages begin to increase it might not be a major issue but, if wages remain flat for the next decade and MF's continue their historical rate increases, this won't bode well for TS management companies.

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

I think management has noticed little complaining when the fee increase is small. Special assessments and 10% and more rises get lots of flak. A plan to hold the fees to 5% and less keep the money rolling in without much complaining, so they will keep doing it.
One week I owned was just under $ 400 for a fee in 1996 and a couple of years ago it was around $ 1,000.

[dougp26364 Senior Member Find all posts View Profile Close dougp26364]

I think management has noticed little complaining when the fee increase is small. Special assessments and 10% and more rises get lots of flak. A plan to hold the fees to 5% and less keep the money rolling in without much complaining, so they will keep doing it.
One week I owned was just under $ 400 for a fee in 1996 and a couple of years ago it was around $ 1,000.

Almost everything we've purchased had "reasonable" MF's at the time of purchase. Most around $500. Now the average fee is north of $1,000 with two that are north of $1,500. HGVC has kept their fee increases reasonable and quality high. Spinnaker has kept their fee's down but the quality is mid tier to lower mid tier. Marriott is, and has been out of control. DRI has become one of the absolute worst with gouging very high management fee's with little to show in return. If this keeps up it won't be long before the TS apocalypse a few have predicted over the years.

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

My current ownership is a little over $ 500 a week, including taxes, so I'm still in. I did get rid of one week this year that was near $ 800 a year.

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

The key is having a member-elected board approving all m/f's, or even better, require the whole membership to vote on them. The resort where I served on the board and as HOA president had the latter arrangement, and our board went over our budget with a fine tooth comb because we had to be able to get the members to vote to approve it at the annual meeting.

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

the problem as I see it is not maintenance. Its the demands we owners make that the places be kept in "like new" condition. So instead of just cleaning the old worn laminate countertops, we get granite, and instead of ceramic we want marble, and instead of a little refrigerator with a top mount freezer, we want a big french door stainless steel model. and the pools arent just pools anymore, they are waterparks..

I dont see a double in fees as a problem for the industry. (it will be a problem for me, but not the industry) as long as its cheaper stay a week in a timeshare than a comparable vacation rental

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

Just one more loyal owner feeling bad about it. As one goes, so goes the larger group.

The best deal is not owning, and using RCI's excess inventory, which is defined as anything they can get more than an exchange fee for.

$294, or less, per week for a nice 2-bedroom is not a bad deal.

We still have some weeks with very low fees, but it is still not a good deal if you don't have a need for them. Even if you can rent them to recoup your fees, that is still work you should not have to do.

IMHO, the deal-breaker is still lack of exit strategy. An industry cannot keep turning away their best customers forever.

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

the problem as I see it is not maintenance. Its the demands we owners make that the places be kept in "like new" condition. So instead of just cleaning the old worn laminate countertops, we get granite, and instead of ceramic we want marble, and instead of a little refrigerator with a top mount freezer, we want a big french door stainless steel model. and the pools arent just pools anymore, they are waterparks..

I dont see a double in fees as a problem for the industry. (it will be a problem for me, but not the industry) as long as its cheaper stay a week in a timeshare than a comparable vacation rental

There are a lot of resorts that do what you say that people don't want. In some cases they are the most sought out units. We stayed in one in the OBX, last summer, a 2 br all ocean front 9 units with laminate counters and very tired industrial carpets, commercial grade furniture meant to take a beating and be replaced every 10 years (instead of 3-4 years), a simple small heated pool (open seasonally May-Sept), a gas fireplace that is shut off during the months the pool is open. $500 in weekly MF;s. True summer weeks sell for around $4000 and current owners have first shot. Summer weeks don't make it to the outside public. They are taken by someone who currently owns.

Often it is developers still in active sales, either at that resort or a resort or resorts in the internal system, that drives the updates. Not only do they get higher management fees for managing a bigger budget, the fancy appliances and pools drive new sales. They don't care if the current owners bought because they wanted affordable moderate lodging at a particular locale. Without the extreme makeovers, and extensive amenities the new sales won't happen. It is about getting new people in the door rather than catering to the current owners.

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

I own an adorable little frumpy beach place with low MF's. 2 bedroom 2-1/2 bath for $600.
We've never had any special assessment despite being right on the South Florida beach.
The owner controlled board does a good job of updating what is absolutely necessary and
a few other perks like great wifi, flat screen TV's and this year they did some units with
granite over the old cabinets and bath fitters in the showers. It was a cheap renovation
but good enough for this little place. I do appreciate that they keep it cheap because to
me it's all about the location more than the amenities although it does offer free wifi, BBQ's
a decent pool, free parking and beach chairs and an awesome view.

I also appreciate those developer controlled places that make for a nice variety and when I
am in the mood for more luxury I have that option too. I usually do a mix of both every year
which suits me just fine.

Doug, Sorry to hear that DRI isn't playing nice and forcing you to do what you don't want to do.
It's very sad that they don't believe in their product enough to take it back even for free or
maybe with you paying a year of MF's. I'm glad I don't own DRI and hope they never take over
any of my TS systems.

So instead of helping current owners and recirculating the deeds into the trust they go out and
takeover other failed TS systems. Not sure why they can't do both.

https://www.youtube.com/watch?v=TK7jPWWYklM

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

That's we we've offered, one year's fee, so the resort can decide who owns it next. & in the meantime, since they have a front-desk hotel operation, they can rent it out.

No luck.

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

There are a lot of resorts that do what you say that people don't want. In some cases they are the most sought out units. We stayed in one in the OBX, last summer, a 2 br all ocean front 9 units with laminate counters and very tired industrial carpets, commercial grade furniture meant to take a beating and be replaced every 10 years (instead of 3-4 years), a simple small heated pool (open seasonally May-Sept), a gas fireplace that is shut off during the months the pool is open. $500 in weekly MF;s. True summer weeks sell for around $4000 and current owners have first shot. Summer weeks don't make it to the outside public. They are taken by someone who currently owns.

Often it is developers still in active sales, either at that resort or a resort or resorts in the internal system, that drives the updates. Not only do they get higher management fees for managing a bigger budget, the fancy appliances and pools drive new sales. They don't care if the current owners bought because they wanted affordable moderate lodging at a particular locale. Without the extreme makeovers, and extensive amenities the new sales won't happen. It is about getting new people in the door rather than catering to the current owners.

These arent the places that the op is talking about, If you are still at $500/yr mf, then you havent been dealing with 5% increases every year and you probably wont see a double in 5 years.. So no problem, at least =not the problem the op is talking about


On your other point that its the developers that are pushing the improvements, Im sure you are right, but they are doing it because it's what sells to new owners. (emphasis on owners)

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

Of course there is no RCI inventory if someone didnt own it and unless they paid their maintenance fee, . And you cant get to that RCI inventory, unless you own something too

No doubt the biggest failure in the timeshare industry is the lack of a effective and efficient secondary market. and thats got to be part of the increasing mf. If I cant sell Ill default and if too many default the mf goes up for those who hold on. The HOAs have to take responsibility here and create the market at their own resorts (rental and resale) and if they cant its time to close the doors>

I see this changing however. When I started this it was unheard of for a developer to deal in the secondary market, now they are (at least some of them) and the couple of independents I own maintain their own rental and/or resale office. to keep what they take back productive.

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

Of course there is no RCI inventory if someone didnt own it and unless they paid their maintenance fee, . And you cant get to that RCI inventory, unless you own something too

Unfortunately this isn't true for many resorts.
All of the exchange companies seem to be in the rental business with retail websites for non owners.
And I rented from many of the independents directly before I bought my first timeshare.
Most of the Florida resorts have active rental programs with reasonable rates.
I've seen those rates out pace my MF's though, so I'm still happy that I own, for now.

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

I thought everyone knew that RCI subscribers stay RCI subscribers if they want to after their maintenance fee days are over.

So, they drop their vacation lodging costs to $209 to $294 per week.

"$209 sale ends tomorrow!

RCI to you"

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

I thought everyone knew that RCI subscribers stay RCI subscribers if they want to after their maintenance fee days are over.

So, they drop their vacation lodging costs to $209 to $294 per week. Yeah, selection is somewhat limited, but still decent.

"$209 sale ends tomorrow!

RCI to you"