Cost of Ocean Front Units for Rent?

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

We bought an Ocean Front Deluxe 1 Bedroom at the Embassy a few years ago.

In 2005 I used this unit and rented a 2 Bedroom for my son and his family from an owner at the Mahana. This Resort is next to the Embassy. The unit was a 2 bedroom with one bedroom having Ocean Front View. The unit was in good shape but could have used an updating. The Cost was $210 per night for Jan, and $225 for Feb. 2005.

I just checked out the rates for 2007 from the same owner. Jan rates are $310 and Feb rates are $325. ResortQuest rates at the Mahana are $325 to $537 per night for Jan. And $345 to $585 per night for Feb.

My Kan'anapali Beach Club timeshare week (Embassy) is looking better to me all the time.

Walt

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

Walt,

That is fantastic. I believe hotel rates are running around $400 per night for prime time in a prime time resort in Maui. And, that is for a hotel unit. I believe those prices are here to stay.

I recall that you were once concerned that RCI or the resort were renting units at your resort for cheap. And, that that would potentially devalue your ownership. I argued at the time that cheap rentals would not last forever. And that the underlying value of a resort would speak for itself. The cheap teaser rates would help to stimulate demand for the resort as repeat renters will not be able to find the resort for the same price. It appears that this has happened for your resort. Congratulations.

I still believe this to be true. What an active rental market will do for a resort is to allow it's REAL value to shine through (for bettter or for worse). If a resort has maintenance fees that are too high or it remains hidden from the public because it wants to be "exclusive", then rental rates will be depressed relative to its REAL supply and demand and will be undervalued.

On the other hand, if a resort doesn't have REAL supply and demand as measured by it's rental appeal, then the rental market will expose it as being subsidized by the timeshare exchange system. Those timeshares will be worthless in the resale market. Capitalism is brutal. But, the free and open market will give a timeshare it's true value. A Strong and healthy timeshare rental market is key to timesharing's long term viability and expansion.