Must Read Post From An Insider on Timeshare Talk!

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

So what you are saying is RCI will send all their blue weeks over to the independent exchange companies. RCI will be left with the cream of the crop weeks without violating their contract with resorts to take all level of weeks.

And this will be bad for RCI how?

RCI will be transfering their take all weeks problem to others. Somehow this seems like a smart move for RCI.

Short

I believe what Steve (Carolinian) says is different than what you think. I believe he think RCI will mess up the value, so the week with true value will be out (be it red, white, or blue). Leave only multi system and new resorts there. For the blue week or week with no value, it makes no difference where they go, so it will be very hard to tell what will happen to them. Actually, with most of new resorts going to RCI point program (in theory), there will be no newer resort left. And most good week will not in RCI week side.

More likely, with blue and white week, the value probably will not have too much impact, and the avail. option for owner is not much. Therefore, they will stay. For red week, if there is a gap, it could mean big difference, and no matter what RCI does, there will be a gap and probably will be big one here or there, so more likely, the week with true value will be gone.

To think with internet age, a product like this come out after 5 years from now, there will be owners that can not tell the value will be interesting assumption. More likely the majority of owners will not care the difference (like most owners purchase retail points), but that is dangerous assumption.

Jya-Ning

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

I couldn't agree more. It is just a rumor.

What would RCI do for those TS companies which bulk bank and charge all their members a set fee/points for a week? Companies like HGVC and Club Intrawest?

HGVC members already has an agreed upon number of points that they pay for an RCI exchange. Any settling up would be on a total Club level as HGVC would have to put as much value as it takes out. This is probobly already done at this time and would not involve much of a change with minigroup relationships.

Short

[coatrack Member Find all posts View Profile Close coatrack]

If this IS true it makes me even happier I own with WM...still get to travel to different resorts at different times of the year and don't have to exchange.

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

I agree with BoardGirl. This would be a monumental task and would cause an outright rebellion among many RCI members who might think their timeshare week is valued at much more than RCI does. I just can't see RCI doing something this extreme across the board to enhance their points program.

Yep - the whole foundation of timesharing would crumble if people were able to see what value is assigned to their week, what values are assigned to weeks in the Spacebank, and be able to tell right away what trades they could make with the week in hand.

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

... Everybody with an overvalued week will stay in the system. Those with undervalued weeks will bail out and look for greener pastures. Those whose weeks are correctly valued will likely stay in for a while until they figure out that those with the overvalued weeks are grabbing anything decent, and then they will depart, too. It may be that this is RCI's exit strategy for the Weeks program.

When people have made precisely those same comments about DAE's exchange model, you've dismissed those arguments as pure speculation, not grounded in reality.

What's caused your thinking to change?

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

No. If fact, the opposite is true. Overaveraging means that the BEST weeks in each group are shortchanged. They will be the ones bailing. It is the WORST weeks in each group that are overvalued by overaveraging. They will be the ones sticking around in RCI.

An example is RCI Points giving the same value in points to a mid-August week 33 on the beach and a late October week 43. The week 33 is shortchanged and likely to take a hike. The week 43 is overvalued and has every incentive to stick around in RCI.

So what you are saying is RCI will send all their blue weeks over to the independent exchange companies. RCI will be left with the cream of the crop weeks without violating their contract with resorts to take all level of weeks.

And this will be bad for RCI how?

RCI will be transfering their take all weeks problem to others. Somehow this seems like a smart move for RCI.

Short

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

Yep - the whole foundation of timesharing would crumble if people were able to see what value is assigned to their week, what values are assigned to weeks in the Spacebank, and be able to tell right away what trades they could make with the week in hand.

The problem is creating an incentive for developers in sales to collude with the exchange company to rig the system. As long as the formula for setting values is secret, and the result published, there is both motive and opportunity to do just that. That does happen. From what I was told by a BIS exex, BIS politicked RCI for significantly higher point values at BIS-Kitty Hawk and got them. They are completely out of line with the much more demanded oceanfront (but sold out) BIS resorts.

The way to some these insider deals is to either 1) keep the results secret, which eliminates the motive, or 2) make the formula and supporting data public which destroys the opportunity to fudge.

The other problem is that the limitations of using a paper and ink publication format guarantees bad values, and bad values are far worse than secret values. Secret values are not, in and of themselves, a threat to the system unless some conflict of interest (like rentals to the general public) exists in the exchange company.

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

When people have made precisely those same comments about DAE's exchange model, you've dismissed those arguments as pure speculation, not grounded in reality.

What's caused your thinking to change?

This is clearly NOT the DAE model. You are comparing apples to oranges. Yes, there are some paralells, but also differences. A system with a variety of value levels is going to behave differently than one with a week is a week system.

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

Rents tell the story

Yep - the whole foundation of timesharing would crumble if people were able to see what value is assigned to their week, what values are assigned to weeks in the Spacebank, and be able to tell right away what trades they could make with the week in hand.

Wouldn't it be a kick in the teeth when the whole system is based on rental values rather than unknown backroom valuations. What do you think the value of a non-summer week on the beach would be compared to a Central - South Florida unit? How many months a year do you think the rental rates would be high in year round warm weather areas vs seasonal areas? You already have the answer. Just compare hotel rates in those areas and you'll have a real good idea what your timeshare week will be worth in the real world. The seasonal areas are not going to be pleased and the propping up of poor value times under the RCI system will be very obvious. It's no surprise in this information age that owners have to know the values - even in weeks - and RCI and the others will have to figure out a way to properly value all units and publish those values good or bad.

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

I will be very admire of RCI's courage if they do create a system like that. I image they need to solve several issues.

1. Since money is involved, local government will be very interesting to treat this as bussiness transaction, so there probably will be a 11% room occupancy tax based on the rate defined by local government on each and every transactions. I have no idea what the impact will be, but I will assume 80% of the TS exchange will be much higher than rent a hotel.

2. With RCI becomes a rental company, it actually will compete with resort, and there will be a better company fit for this. Since RCI is atually only a broker, and not many people outside of TS really care or know RCI.

3. Most of the owner does not really care about the detail, so in most of the time, when doing exchange, owner will be happy if they got what they want, even if it actually means not a good value. Also, when there is a really money involved, unless in high pressure, or really naive, people tend to want shopping around. Now assume my MF is 280, And I found out RCI will only give me 220 credit, it will force me to face the reality. On the other hand, assume my MF is 280, RCI gives me 500, but I found out I need to come out another 700 to get some unit I want, I doubt what pecetage of people will just open the check book and paid the difference. If after check, found RCI actually overcharge, I wonder how many people will actually happy in either situation.

Jya-Ning

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

Restricting myself solely to the Weeks system, I simply can't see any downside to owners being told up front what value RCI assigns to their week, and the value RCI assigns to weeks available for trade.

Even if the values are all screwed up, as an owner it's still to my advantage to have the information. If its screwed up in my favor, I take advantage of it. If it's scrrewed up against me, I just don't give them my week.

No downside at all that I can see.

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

Price is all about supply and demand. Those places with large oversupply compared to the demand, whether it be from an off season week or from the area being overbuilt in timeshare, will take a hit in this system, just like they take a hit in the supply and demand based Weeks system, unless the exchange company cooks the books in favor of developers as they do in Points. Being warm all year doesn't paper over the supply problem when an area is overbuilt, whether it be Orlando or the Canary Islands. The times and places mentioned by Candid in his/her ''Pink Weeks'' post gives a good idea of places and seasons that could be in trouble, and if you look at that closely, it is likely to be Orlando more so than south coast coastal areas.

Wouldn't it be a kick in the teeth when the whole system is based on rental values rather than unknown backroom valuations. What do you think the value of a non-summer week on the beach would be compared to a Central - South Florida unit? How many months a year do you think the rental rates would be high in year round warm weather areas vs seasonal areas? You already have the answer. Just compare hotel rates in those areas and you'll have a real good idea what your timeshare week will be worth in the real world. The seasonal areas are not going to be pleased and the propping up of poor value times under the RCI system will be very obvious. It's no surprise in this information age that owners have to know the values - even in weeks - and RCI and the others will have to figure out a way to properly value all units and publish those values good or bad.

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

Making it public is what gives the developers an incentive to collude with the exchange company to come up with screwy values that are skewed in their favor. The ONLY way to keep a system of published values honest is to have complete transparency in the method and process of setting those numbers, with all parts of that process completely out in the open. Otherwise, one ends up with the corrupt numbers like RCI Points.

As I have said before, I have no problem with published numbers as long as the values are dynamic, each week is valued on its own without the overaveraging that exists in all points systems, and the process of establishing numbers is completely out in the open. Published numbers with a hidden method of setting them is the worst possible combination in timesharing.

Restricting myself solely to the Weeks system, I simply can't see any downside to owners being told up front what value RCI assigns to their week, and the value RCI assigns to weeks available for trade.

Even if the values are all screwed up, as an owner it's still to my advantage to have the information. If its screwed up in my favor, I take advantage of it. If it's scrrewed up against me, I just don't give them my week.

No downside at all that I can see.

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

Price is all about supply and demand. Those places with large oversupply compared to the demand, whether it be from an off season week or from the area being overbuilt in timeshare, will take a hit in this system, just like they take a hit in the supply and demand based Weeks system, unless the exchange company cooks the books in favor of developers as they do in Points. Being warm all year doesn't paper over the supply problem when an area is overbuilt, whether it be Orlando or the Canary Islands. The times and places mentioned by Candid in his/her ''Pink Weeks'' post gives a good idea of places and seasons that could be in trouble, and if you look at that closely, it is likely to be Orlando more so than south coast coastal areas.

OK - here are two random prices for January 7, 2007:

Kitty Hawk - Rate Range: $89.00 - $120.00

Orlando - Blue Tree Avg. Nightly Rate* Standard Room $166.67

Just one example but looks like Orlando is up to 86% higher. It would be much worse if you head south. I'll bet that holds almost all year long. There may be 3-4 months where they are close but the majority goes to FL. If the real world gets to value units it won't be pretty for the seasonal folks.

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

Making it public is what gives the developers an incentive to collude with the exchange company to come up with screwy values that are skewed in their favor. The ONLY way to keep a system of published values honest is to have complete transparency in the method and process of setting those numbers, with all parts of that process completely out in the open. Otherwise, one ends up with the corrupt numbers like RCI Points.

As I have said before, I have no problem with published numbers as long as the values are dynamic, each week is valued on its own without the overaveraging that exists in all points systems, and the process of establishing numbers is completely out in the open. Published numbers with a hidden method of setting them is the worst possible combination in timesharing.

Not at all. Rigging the numbers is viable only when people don't have a realistic option to do anyting else with their week. Rigging numbers when people can see what the numbers and relate it to another viable option kills the rigging.

******

It's like exchanging money in a foreign country. When the governmnet pegs the exchange rate and effectively prohibits people from people from exchanging outside the official rate, they can and do goose the exchange rate.

But as soon as people have the option to go to a second exchange market, or to exchange into a secondary currency, the pheny exchange rate collapses.

Same thing here. By pegging the exchange to a dollar value that can be compared directly with an open market rental rate, people will simply take their weeks elsewhere if they don't like the exchange rate they are offered. RCI and developers can manipulate it to their hearts content, but if they're not realistic in what they offer to owners, they won't get the business, simple as that.

*****

To beat this horse's corpse a bit more, let's take Joe and Jill Blow, typical weeks timeshare owner. Let's offer them two options to do Weeks Exchanges:

1. The current model. They give their week to an exchange company, and put in an exchange request. They don't know if their week is good enough to complete the exchange, and they don't know how their week compares with any other weeks they might consider. They are completely at the mercy of the exchange company's secret valuation of what their week is worth in relation to other weeks, and until an exchange is completed they have no way of knowing whether they are even asking for anything feasilble.
   
   
2. The model being discussed. They contact the exchange company and they are told what their week is worth. They ask about other weeks they would be interested in receiving if they were available and they are told what those weeks are worth. They are offered the option to kick in a bit of money if they want a week worth more than their week, or to create a balance in their account if they take a week valued at less. Since they are told what dollar value the exchange company puts on their week, they can also decide if they would prefer to rent the week on their own (probably for more money, since I doubt the exchange company isn't going to offer them full value for their weei), and use the rental proceeds to secure the week from the exchange company (or another source).

Come on, Steve. If you offered those two options to timeshare owners, do you really think msot owners would pick the first alternative? I can't see it - I would expect that at least 80% of owners would pick the second option if given a free and unfettered opportunity to choose between those two models.

*****

This is all about choice, and you've been a champion of choice for owners. If owners don't like the big exchange company, use an independent. If a system such as this were implemented, owners would have even more choice.

And you are totally correct that it would be a boon to the independent exchange companies. This program would help many people seek out alternatives to RCI and II as soon as they realize how little value their weeks really have. As they do so, they will seek out the independents.

******

I also think that owners of the lowest value weeks will be the ones affected most greatly. Those owners are likely to aggressively seek out alternatives. and when they find DAE they will immediately hook up there. That rushing sound you hear will be the prime weeks getting sucked out of DAE and being replaced with near worthless off season weeks.