The July 7, 2003 issue of Hotel & Motel Management (H&MM) attempted to
address important issues about Timesharing on one page. The article, by Associate Editor Elaine Yetzer Simon,
was titled: “Use plans based on owners’ needs, flexibility.” In my opinion any attempt to address such a
complex subject with so few words at best should be classified as a Short Story. Short stories felicitate the absence
of facts that are highly relevant to the truth on any subject and if the subject is Timesharing, the absence of
facts has a tendency to create major distortions.
The opening paragraph of this H&MM ‘short story’ read as follows:
“While many timeshare purchasers are happy to buy a fixed
or floating week for their home resort every year,
others want their time in a points format with various
options, including the ability to break the week into
several shorter stays.”
There are only a couple small points in this paragraph that need clarification. It may be simpler to get my
distinctions across by simply offering a marked up version of this paragraph.
“While many timeshare purchasers are were happy to buy
a fixed or floating week for at what they consider their
home resort every year, others want their time to include in
a points format with various options including such as the
ability to break the week into several shorter stays.”
I think that my marked up version clears up any misconceptions that may have been contained in the original
version.
The second paragraph of this short story read as follows:
“When the timeshare concept was introduced in the United States, most
resorts offered the weeks option. Consumers would buy one week for the
year at a particular resort, and they were guaranteed their vacation
during that week at the same place every year--- or perhaps at the same
time at another resort. With the other option, owners acquire a certain
number of points based on their purchase, and they can trade those points for
varying amount of time at a number of resorts.”
To begin, I would like to emphasize how the term perhaps was used relating
to weeks and the term can was used as it relates to points. Webster indicates
that perhaps means: “sometimes open to doubt or conjecture.” While can means: “to be able to do.” Clearly the intent was to
indicate a distinct advantage with the points programs with respect to the ability to obtain a use period at another
resort.
Currently RCI has approximately 3,700 affiliated resorts and Interval has approximately 2,000 and timesharing
exchange opportunities are no easier to obtain in a points program than they are for weeks. In fact the situation
may well be the reverse as indicated within the same H&MM ‘short story’ by Interval VP Raul Estrada,
stated: “this type of program (points or flexible-use) can cause confusion and issues with lack of availability
at the times the consumer wants to travel or the flexibility they desire. Fixed or floating offerings typically
give the owners more security in what they bought and how they can use it.”
Indicating that its source was H&MM Research, this short story featured a comparison titled “Weeks
versus Points” That comparison is depicted below.
This comparison attempted to reinforce the superiority
of points over weeks with respect to exchange. Points bullet 2 indicates: “The points can be used for
different unit types during different seasons at different locations.”, while the Weeks bullet 2
indicates: “Many resorts also have an exchange option, so owners can use their week at other properties.”
Objective research by
any entity or any individual concerning the exchange benefit would have easily disclosed that that benefit became
a reality for the timeshare industry almost three decades ago and that benefit has always been the cornerstone
for the sale of timeshare use periods or plans. The very basic explanation of the exchange benefit long before
any ‘points’ or “flexible use program” introduced in the United States was: “As a member of the exchange firm you
can exchange your week for similar unit types during your season at different locations. You can also trade down
from your unit type and for different seasons at different locations.” In order to achieve a satisfactory
exchange you only needed to act early, be flexible in when you wanted to go, and where you wanted to stay.
The indication in the
Weeks bullet 2 that “Many” resorts have an exchange option was a gross
misrepresentation. The fact is that finding a single timeshare resort without an exchange affiliation is next to
impossible and that membership in an exchange program is an option of the individual owner not the resort.
Weeks bullet 5
makes the statement: “There usually are fewer options and less flexibility for owners.” This is such a meaningful
statement and is intended to point out a glaring difference. It’s like stating: “There are fewer options and less
flexibility in a Wal-Mart than in a Super Wal-Mart.” What does this really mean? If you
are shopping at a Wal-Mart you will have to go to another store for groceries and this is inconvenient.
Some time ago in this
column I wrote of the Myth of Flexibility and gave the following illustration: http://www.thetimesharebeat.com/global/sikes32.htm
- “Today the Resort offers the following degree of flexibility, beyond the opportunity to occupy their fixed
7-day interval in their fixed villa, to its deeded owners. The opportunity to exchange for another location - via
Resort affiliation with the two major exchange firms (RCI and Interval) via individual memberships,
a small independent firm (Vacation & Travel) that requires no membership. Additionally, the opportunity
to exchange internally for a different use period or villa at SCR via all three of these affiliations. This exchange
opportunity is exceptional because the facilities at SCR and the level of staff services allow the resort to maintain
both the RCI Gold Crown and the Interval 5 Star rating, there is no off season, and the demand for
inbound exchanges far exceed the supply. The opportunity to exchange their SCR Interval Interest for a Cruise via
Resort affiliation with I.C.E. as well as both RCI & Interval. The opportunity to rent
their deeded interest via the HOA operated Rental Program, in any given year when occupancy or exchange is not
an option. The opportunity for additional SCR occupancy via Bonus Time and the opportunity for additional occupancy
of other similar Resort accommodations via affiliation with ResortTime. The opportunity to purchase additional
Interval Interest at SCR via the exclusive on-site resale program offered by Desert Vacation Realty (DVR)
or the opportunity to sell the Interest they own through DVR if they so choose. The opportunity to access most
other consumer products such as Rental Cars, Hotel accommodations, Jeep Tours, Hot Air Balloon Rides, Cattle Drives,
Horseback Rides, Float Trips, Concert Tickets, Dinner Reservations and much more through the SCR Concierge desk.”
Final Thought
There has always been
a similarity between the Timeshare Industry and the Automobile Industry in the methods used to achieve a sale.
If you are out shopping
to purchase a new SUV and go to many dealerships each will tell you that their particular brand is superior because
it offers features not found in the competitive brand. If you are shopping for a specific brand and go from dealership
to dealership each will tell you that their deal is better than the competition.
So it is with Timesharing…
Each of the Development entities will proclaim that their product is better because it offers features not found
in the competition's product. If their product is a points based or flexible-use plan they will train their sales
staffs to emphases the advantage of points over weeks and the advantage of their points program over a similar
program offered by another firm.
If you pick up the classified
section of most daily newspapers you will find that most of the new car dealers feature lease prices rather than
purchase prices. It’s the same car, however one would assume that the dealer makes more profit with the lease deal
than with the outright sale. If asked I am sure that these dealers could point to market studies which indicated
that the consumer demanded leases over outright purchases.
In the comparison table
provided by H&MM Research Points bullet 4 pointed out that firms with points programs could usually
charge higher fees. Isn’t what’s best for the firm’s bottom line the real deal?
