I have no idea what the topic is

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

It's a red herring issue when the probability of occurrance is small to negligible, especially when the alternatives have worse risk. EVERYTHING has risks. It is very easy to take any risk factor and blow it out of proportion to its significance in the big picture.

I said your point was a valid potential risk. And, I've have illustrated how to mitigate and provide reasonable protection against that risk.

In fact, I'll go farther. I will assert that there is a far greater probability that a fixed week owner at Lodge Alley Inn will leave their week vacant than a properly informed points owner with deeded points NOT at LAI NOT being able to book a summer week there. That puts your risk factor in context.

[Jya-Ning Silver Contributor Find all posts View Profile Close Jya-Ning]

J-Ning has helped to shed more light on Fairfield, which has made me figure that I don't need a foot in that system!

I don't want to give you wrong impression on FF. It does not rent differently to owner and general user. But you can extend you vacation in serveral ways. Since I am more interested in what is the difference between BG's deed and FF's deed that back them up, and I know Boca know FF's way to extension, I did not mentioned it at all.

Jya-Ning

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

Given RCI's change in busines model, prudent HOA's are -

1) educating their members about the ability to use independents
2) dual affiliating with II
3) concentrating HOA resales on those who use at the resort rather than exchange

As I have pointed out, however, because non-exchangers tend to dominate HOA boards, and some managers have a limited view of the outside timeshare world, too many resorts are just rocking along blissfully unaware of the changes being pushed by RCI's new policies that WILL impact them not that far down the road.

Assume RCI has now in the process of messing a perfect exchange model. What is really at stake?

IMHO

For RCI, it will loss its share, and whole bussiness.

For individual, not much, just loss a exchange option. If today's market is support by exchange, then yes, it may loss its value. But this is assume no other exchange company will gladly picking up the slack. Now assume that is the case, then how much? Most of the owners that will be in trouble is the one with off-season, which a lot of ebay auction at this moment has none actually bid on, so they could not loss more than that.

For HOA that can only survive if RCI exchange is the only reason, then they may loss a certain percent of owners that mainly bought them for exchange only. That means, the prime week owner will have to pay more for their fair share, or they can sell to another company, and get more (assume off season owner has default already) or get a reality check.

As tugger, I believe most of the time the advice is to buy what you will use, if you follow what you say there will be very min. impact.

If RCI can really create a rent market using TS, then what happen?

Jya-Ning

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

I think there are some clear advantages to fixed weeks. If you own a premium fixed week, and don't want to use or rent it, you can still exchange it through an exchange company for another week.

Regardless of the type of system, most people are trying to get a prime week. They are competing with each other. Nothing wrong with owning outright one of those weeks.....

It's true that you can deposit a fixed week into an exchange company. That is a benefit, but I don't see how that is an advantage over a point system where you can reserve prime weeks at multiple resorts allowing you to maximize your trading power in the exchange system in question.

For example, pick a prime fixed week anywhere in the world. Now, deposit it into II, RCI, SFX and DAE. If you have a good fixed week, like a week 52 at the Maui Marriott, you will get something good in all those exchange companies. But, your price for getting that trading power is very high.

Now, think a point system. In II, you deposit a 2 bedroom Easter week at Lodge Alley Inn prime week and get an AC with excellent trading power. In RCI, you deposit a 2 bedroom cabin at Big Cedar for week 26. I would never do it, but it will have great trading power. There are probably cheaper ways to get even better trading power value. If you want RCI Points, you deposit a 2 bedroom red unit at Mountain Run. If you want DAE, you deposit a studio at Big Cedar in January.

The bottom line is that there as so many options available in a point system that you can reserve the week that best optimizes the value for the trading power you will get therefore saving you a ton of money.

In the case of exchanging, this is where a point system is FAR superior to a fixed week.

[Jya-Ning Silver Contributor Find all posts View Profile Close Jya-Ning]

The problem is that if 30% of owners bail out, the remaining owners have to pick up the slack of running the resort, and m/f's go up substantially. That will make some others decide the cost is too great and bail out too. This process can keep feeding on itself as bailouts and rising m/f's keep feeding each other, sending the resort into a death spiral. That happened, triggered by other reasons, at the former Spanish River Resort in Florida. Off season bailouts have the potential to trigger it at many resorts. Owners of off season weeks simultaneously find out that they can rent cheaper, and that they don't get what they used to on exchange. Those are powerful incentives RCI is creating for bailouts.

I forget where I look, but I saw a hotel statistic talking about 2002, 2003, in USA, a year after 911 recover. The avg. hotel occupancy rate is 60%, the avg cost per day is $86(??? sorry can not remeber the exact number) thus the actual amount they received is around $50 per day. Most of the hotel survived. And that is one of the dark period in travel business

Now you tell me that if 30% bail out which give you 70% occupancy rate, the TS will not be able to survive?

Each year, FF's usuage rate is above 80% (total point used/total point owned). And Fixed Week based on the statistic is over 80%. Which means, although a resort is sold out, and if all owner bought there actually use there every year, there still will have 20% vacancy. The only diffence here between a point and week is that in week you will let these 20% waste, and in point, some owner can actually enjoy these 20% even when they joint the system in a late day. Isn't that what TS should really be?

When you say, the owner bought to use it, I do agree most owner should be that way. The question is, what percentage of owners will do that all their life? With Prime time, assume 80% owners do that, that give out 20% inventory. If there is 100 units, that means there is 20 units available for anyone not own that resort. In RCI exchange, 6 or 10 units is very unlikely to happen in the prime time unless developer deposit it. And 100 unit resort is mid size resort.

With Shoulder time assume there is 30% to 40% really used by owner. With off season, FF have to discount the point in order to fill the place. So to say 100% sold out and these owner will all use them and no way an outside owner will get in compare to exchange I can not see that. If that true, there is no worry that a exchange company falls out the resort will be in any trouble.

Jya-Ning

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

Given RCI's change in busines model, prudent HOA's are -

1) educating their members about the ability to use independents
2) dual affiliating with II
3) concentrating HOA resales on those who use at the resort rather than exchange

As I have pointed out, however, because non-exchangers tend to dominate HOA boards, and some managers have a limited view of the outside timeshare world, too many resorts are just rocking along blissfully unaware of the changes being pushed by RCI's new policies that WILL impact them not that far down the road.

This is very similar to the type of advice you would give to a small retailor when they found out that Walmart was coming to town. You are trying to help them preserve the business model that is under assault rather than improving their business model to compete more effectively.

I believe prudent HOAs will also consider becoming affiliated with a resort management group like Bluegreen or VRI whose members get greater value for being part of the system. Pono Kai did that and the reports from Aliikai Greg are very favorable.

One of the side benefits of the Pono Kai addition into the Bluegreen Vacation Club is that owners get access to bonus time at that resort 3 months in advance of check in. So, I was able to book a 1 bedroom Oceanfront unit for $343 in July. Bluegreen made a deal with the homeowner's association to take excess inventory and rent it out as bonus time. And, I am sure that Travelocity and Bluegreen rentals offers Pono Kai as well. This will lead to increased utilization of the resort and more effective management due to the increased operational budget.

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

Bocca

The clear advantage is being gauranteed a prime week, at a prime location. Even with a point system, you are competing with others for the same time slot.

Am I incorrect in thinking that you are not guaranteed a prime week in a point system? Are you not competing with others for the same high demand weeks?

[Jya-Ning Silver Contributor Find all posts View Profile Close Jya-Ning]

Bocca

The clear advantage is being gauranteed a prime week, at a prime location. Even with a point system, you are competing with others for the same time slot.

Am I incorrect in thinking that you are not guaranteed a prime week in a point system? Are you not competing with others for the same high demand weeks?

May or may not be true. IN FF's case, if it is UDI, than yes. If it is converted week (most old resorts), than you are guarantee the week and unit from mont 13, 12, 11. Then it open to other people, so you have some time to decide if you want to take it or not.

Boca said BG is close to FF's converted week, so you should/maybe guarantee the week, unit in the homw owner reservation period.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

Bocca

The clear advantage is being gauranteed a prime week, at a prime location. Even with a point system, you are competing with others for the same time slot.

Am I incorrect in thinking that you are not guaranteed a prime week in a point system? Are you not competing with others for the same high demand weeks?

Yes, you are guaranteed the underlying fixed week upon which your points are deeded from 12-11 months prior to check in. If your week is deeded in a prime week, then you've got it unless you choose not to have.

And, you have 40 other resorts form which you can reserve a prime week for no fee. No exchange fee, no reservation fee, no guest certificate. And, you can rent it.

It's really hard to beat with a fixed or floating week system.

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

Increased utilization of the resort does not help the resort's bottom line unless the income from that utilization is more than the costs associated with it, which does NOT happen in RCI rentals where they pocket all of the rental proceeds themselves.

A sounder financial footing for a resort is to sell or otherwise transfer excess inventory to new OWNERs, as opposed to the uncertainty of renting it out. The well managed resorts on the OBX take that approach. Of couse, if the backlog of excess inventory gets to be too massive to effectively resell, then rentals might be a more viable option for some of it.

It is hard to imagine that a Hawaii resort would not be able to unload excess inventory to new owners if they offered a bargain price.

Resort economics are based on getting maintenance fees in rather than the crapshoot of rentals. Excess inventory also tends to be much more likely to fall at times that rentals are more uncertain. That is why rentals are generally not a good way to go.

There are own-to-use markets for off season weeks if resorts just think a bit.
Outer Banks Beach Club I and II have had quite a bit of success marketing them to locals who want to use the resort facilities yearround. Most OBX resorts have some owners of this type but OBBC seems to have done the best targeted marketing to this group. Seascape used the adjacent golf course to which owners have golf priveleges to market off season weeks. Looking at the HOA off season resales the last few months on the Dare County land transfer webpage, that seems to be still doing well. Ocean Villas has used the fact that there are a bunch of duck blinds on federal land within a few miles of their resort which are open to the public to sell Dec. to Feb. weeks to duck hunters. The developer of The Windjammer marketed winter weeks to Canadians, who still come down in droves, as it must seem warm to them in a relative sense. The HOA has built on that market. Ocean Villas II has been placing entries for ''drawings'' for a free off season timeshare week ownership if the ''winner'' pays for deed prep and prepay the first year m/f when he ''wins'' with no tour required, in businesses around Viriginia where the largest group of OBX own-to-use t/s owners tend to live, and then everyone who sends in the entry ''wins''.

Finding markets like this build a lot more solid foundation for a resort than the crapshoot of rentals, especially off season rentals, which is what most of them would be in your scenario.

As far as management groups, I would strongly disagree with you. The best managed resorts on the OBX are those with a strong hands-on HOA board which hires it own manager, rather than relying on a management company.
This is not something I would want to give up.

VRI did take over management of Sea Ranch II on the OBX, which had had a very bad experience with an inept local management company, and before that a bad situation with their developer. While they seem to be getting good marks on quality issues, there has been quite a bit of grumbling among owners about the increases in maintenance fees. I do not know how this has impacted exchanging (the resort is II-only, so VRI's special relationship with RCI would not come into play), as the people I know who own there own to use and don't exchange. As far as the quality issues are concerned, it would appear to me that they could have done as well with a hands-on HOA board and a hired manager, probably for lower m/f's.

This is very similar to the type of advice you would give to a small retailor when they found out that Walmart was coming to town. You are trying to help them preserve the business model that is under assault rather than improving their business model to compete more effectively.

I believe prudent HOAs will also consider becoming affiliated with a resort management group like Bluegreen or VRI whose members get greater value for being part of the system. Pono Kai did that and the reports from Aliikai Greg are very favorable.

One of the side benefits of the Pono Kai addition into the Bluegreen Vacation Club is that owners get access to bonus time at that resort 3 months in advance of check in. So, I was able to book a 1 bedroom Oceanfront unit for $343 in July. Bluegreen made a deal with the homeowner's association to take excess inventory and rent it out as bonus time. And, I am sure that Travelocity and Bluegreen rentals offers Pono Kai as well. This will lead to increased utilization of the resort and more effective management due to the increased operational budget.

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

I would not like the rigidity of having to make that decision to use the week or not 11-12 months in advance. With a fixed week, you have much more flexibility in deciding to use your week, and it doesn't get gone on you if you forget the deadline to reserve it.

Some of these other features are certainly an improvement over RCI Points, however.

Forty resorts is quite limiting, especially without much presence in the Caribbean or Europe. That is the big drawback to a mini-system.

Yes, you are guaranteed the underlying fixed week upon which your points are deeded from 12-11 months prior to check in. If your week is deeded in a prime week, then you've got it unless you choose not to have.

And, you have 40 other resorts form which you can reserve a prime week for no fee. No exchange fee, no reservation fee, no guest certificate. And, you can rent it.

It's really hard to beat with a fixed or floating week system.

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

Bocca,

Yes, you are guaranteed the underlying fixed week upon which your points are deeded from 12-11 months prior to check in. If your week is deeded in a prime week, then you've got it unless you choose not to have.

If you are guaranteed your underlying week, than I would say that you have made your case, and I would have to agree. Due to the lack of fees involved, this would be a great deal, and probably the best deal out there.

However, for someone who owns a timeshare, such as a Marriott, I believe a fixed week has the advantage.

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

In most if not all of these situations, one is only guaranteed their week if they take some action 11-12 months in advance. If they miss that deadline, too bad! If they haven't yet made up their mind at that deadline, too bad!
Give me a fixed week where I know what I have and I am in control, all the time!

If you are guaranteed your underlying week, than I would say that you have made your case, and I would have to agree. Due to the lack of fees involved, this would be a great deal, and probably the best deal out there.

However, for someone who owns a timeshare, such as a Marriott, I believe a fixed week has the advantage.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

In most if not all of these situations, one is only guaranteed their week if they take some action 11-12 months in advance. If they miss that deadline, too bad! If they haven't yet made up their mind at that deadline, too bad!
Give me a fixed week where I know what I have and I am in control, all the time!

This is a completely bogus argument intended solely to create a negative out of a situation that is positive in a futile attempt to make something that is clearly superior into appearing inferior.

If an owner elects to use their week at the 12 month mark, from 12 months to check in their ownership rights are identical to a fixed week owner. They can use, rent, or bank the week with a third party exchange just like a fixed week owner can. So, in exchange for having to merely book their week, they get many other benefits that far outweigh the need to book you week without competition.

If they can't remember to book their week in their open reservation timeframe, they have no business owning a timeshare because they will probably forget to show up for their fixed week if they owned it.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

Increased utilization of the resort does not help the resort's bottom line unless the income from that utilization is more than the costs associated with it, which does NOT happen in RCI rentals where they pocket all of the rental proceeds themselves.

If any management team cannot improve the resort bottom line by increasing utilization, they should be fired. All you need to do is generate more revenue than the variable costs. That's easy to do even with cheap rentals.

Now, if the resort were a failure due to a bad concept, then that's understandable. Building a timeshare resort in Antarctica would be an example.