“In public relations ‘Spin' refers to portraying an
event or fact in a way that is favorable to you and unfavorable to your opponents. This is called 'putting
a positive spin' on a story or just 'spinning' the story. Practitioners of spin are often referred to as spin doctors.”
- From Wikipedia -
The following is offered for your consideration.
The resort has been affiliated with RCI for most of its existence. First under
an agreement with the Developer and currently with the Owners Association. It qualified as a Gold Crown Resort
from the inception of that designation and has remained so for over a dozen years. The area where the resort is
located is not considered seasonal thus the entire interval weeks at the resort are considered “red”. In the middle
of the 1st Quarter of 1990 the last intervals were conveyed and 'sellout' was achieved. The majority of the owners
lived in the immediate area and purchased for the purpose of exchanging. Historically over 40% of the intervals
at the resort were deposited with RCI and the utilization of those weeks by inbound exchange guests is always
over 95%.
The resort has operated a very successful rental program for more than 20 years and the great majority of its
rental guests come via an ad in the RCI Endless Vacation Magazine. That ad offers a 20% off rack rate discount
to RCI members. Demand for rentals is very high during the spring because of breaks from Schools, Colleges
and Universities. Currently a Studio Unit rents by the week (Sunday to Sunday) during springtime for approximately
$1800, or $255 per night. If that renter happened to come to the resort via the ad in the RCI magazine that
rate would be approximately $1430 or $205 per night. Historically the resort rental operation achieved about 76%
occupancy for available room nights.
The rental program is offered for the benefit of the owners and they receive 70% of the net rental proceeds
(after appropriate taxes and rental breakfast costs) with the remainder going to cover all rental program costs.
The rental program operates on a first come/first serve basis meaning that the first unit of a type/use period
placed in the program gets the first rental for that type/week.
Let's assume that an owner at the resort determined to place his unit type/springtime use period into the rental
program 11 months prior to its start and was able to obtain a full week's rental to an RCI member via the
Endless Vacation ad at the $1430 discounted rate. That owner would receive approximately $1000 as the result
of the rental, which was approximately 50% more than the owner’s annual assessment for the unit type.
Let’s assume that same resort owner had not placed his use period in the resort rental program but banked it
with RCI (a year prior to the beginning of its use period) with the idea that he and his family would venture
over to the Southern California beach in mid June of the following year. RCI had of course accepted this
banked week from its member and added it to its inventory. The resort owner (and RCI member) submitted his
request (at the time of his deposit) for any of the beach locations in Southern California for any of the four
June weeks in 2004 and began to query RCI about his request each quarter. With each of those inquiries he
was advised that nothing was available in a beach location at that time. He was offered an exchange into Ramona
or Palm Desert that he declined because of their distance from the beach and his family really wanted to spend
a week together just lazing/ playing on the beach. This owner chose to wait it out in case some week that would
fill his request came available.
Let’s assume that there were a couple of school teachers from a small town in Indiana who decided that they
wanted to make a first-time visit to the Southwest during their break from school in April of 2004. One of these
young ladies, whose parents were timeshare owners, was given a copy Endless Vacations magazine and advised
that they look in the classifieds to see if they could find a timeshare resort rental somewhere they would like
to visit on their break. They came across the aforementioned resort's 20% discount ad and decided to make a call
to the 800 number listed and see if anything was available. Upon being connected to the resort rental reservation
department they were advised that the period they wanted was in heavy demand and the only unit that was available
for the period they wanted was a Studio Unit at $1430 plus tax for the seven days (including a continental breakfast
each day). These two young schoolteachers were very disappointed because that rate was a little beyond their affordability
and decided not to take the offering.
As it were, several other RCI members were attempting to obtain rentals during that sale period after
they had requested an exchange into the resort and been advised no space was available. These members were also
aware of the discount rental ad in Endless Vacation magazine and the first of them who called the resort
rental program quickly took the spring break Studio off the market. After looking around a few days for other accommodations
without much luck, the young schoolteachers decided they would go ahead and take the Studio even if it did stretch
their budget to the limits. Upon calling back to the resort reservation office they were advised that the rental
was no longer available. Again, they were extremely disappointed, however still committed to visit the area on
their spring break.
Both these young ladies, and the family that had wanted to go to the beach in Southern California in June, were
unwilling to give up on these dreams. They each independently began searching on the Internet to see if they could
find anything that would come close to meeting their desired locations, dates and affordability. As it were they
both happened upon the same Web page that offered rentals of Timeshare and Vacation Ownership use periods.
This Web page was well laid out and reasonable easy to navigate. The schoolteachers went to the rental section,
clicked on their Southwest area selection, entered the city and were exhilarated that there were several Studio
use periods available at the very same resort they had wanted to stay at. They quickly selected the week listed
at $427 (plus tax) because it was well within their budget and less than one-third of the rate that had been
quoted by the resort even with the 20% RCI discount. They had thought it strange that there were several
other rentals available, however the rental rates were much closer to the rate that had been quoted by the resort;
however they were very happy that 11th hour (whoever that was) had submitted the rental at
this extreme discount.
The family who wanted to vacation at the beach in Southern California was just as fortunate. They were able
to find a rental available at a great resort that they had exchanged into five/six years ago which was just a long
flight of stairs up from the beach. It may have been just a unique coincidence that the rental rate for that great
location was $427 for the week and that the rental had been submitted by 11th hour.
This family also thought it strange that the 11th hour listing was so much cheaper than the
other rental listings and that the owner (11th hour?) had not placed the use period up for
exchange (as it was obvious that the exchange demand exceeded the supply) rather than settling for a rental amount
much less that the annual assessment for the week. However, this family quickly snapped up the rental and then
notified RCI that they had acquired the beach vacation at a great rental rate and they would resubmit their
exchange destination request in a few weeks. The RCI representative at that time advised them that on the
next submittal they should not be so specific on where and when they wanted to travel.
In almost every forum, be it print media, Internet sites, or meetings, where timeshare owners and RCI members
have had the opportunity to express themselves, they offer up concern about very common subjects. Those issues
are about the decline in service received from RCI, the increasingly frequent lack of inventory in desired
locations and at desired times because their trading power has inexplicitly declined, and the increasing pressure
to accept what they are offered by the exchange coordinator as it becomes more and more apparent that they are
not going to get anything close to the exchange they wanted. This is coupled with the pressure to convert their
ownership interest from weeks to points because of the illusion held out that points provide much more flexibility
and weeks ownership is becoming obsolete. In these forums the issue about the economics of ownership comes up because
a non-owner can go on-line and rent a timeshare use period at great locations and times for much less than the
owner has to pay in their annual assessment. The hard part of this for those owners to swallow is that it is very
seldom that they can obtain an exchange into those same resorts where the extreme discounted rental rates are available.
Given the most recent opportunities to address these issues, those representing RCI have chosen the following
words.
- “The Best days for RCI, our affiliates, and owners everywhere, lie ahead of us.”
“Now, we are in a points environment. That means we have greater ability to provide members with the points
options they’re asking for – like airline tickets, car rentals, hotel stays, and entertainment packages.”
“There’s a perception out there that exchange inventory is being utilized for rental before exchange. That
is simply not the case. Especially in the world of RCI Points, we do have to rent inventory to cover the cost of
these other options. We are finding that almost 30 percent of the time, members are using these other alternative
travel benefits. So, we have to allocate inventory for rental purposes...”
“The reason inventory ends up in some rental channels is because RCI has acquired inventory to improve the
diversity of product offerings for members. That’s why we also rent some of the inventory in points and weeks.”
“When it started off, it was relatively easy to work with individual members because each one owned a fixed
week. Once the industry got into float, multi-site and club products, RCI moved into bulk-banking to streamline
operations for affiliates and for RCI.”
“It’s a more complex picture than it used to be. RCI needs to sell inventory to offset the cost of airfare,
hotel stays, cruises, and other products that we buy so owners can access them via points.”
“More and more developers are taking advantage of travel alternatives – like those offered through Points
Partners – in their sales centers. And these options are becoming an integral part of the sales process – yielding
improved sales efficiencies. It’s these alternative offerings that drive us in the direction of building
a rental business. As RCI purchases other vacation options that owners can trade for, we need to find ways
to ‘monetize’ inventory we are accepting – in other words, turn unused or underused acquired inventory into cash
to pay for these new options.”
"Regarding today's discussion on RCI weeks and points, you neglect to point out
that whenever a points member uses a week from the weeks inventory pool, RCI transfers a week from the points inventory
pool of equivalent value into the weeks inventory so that the pool of available weeks remains constant and no weeks
member is ever at a disadvantage because a points member uses weeks inventory.”
Final Thought.
Actually I have two final thoughts this week.
First Thought: In a recent 4 part series I presented my thoughts on what’s happening with exchanges.
One of these articles was titled Changing Rules. Published in the Jan/Feb 2004 issue of TimeSharing
Today was a letter from Edna P. Griffith to the CEO of RCI. In part Mrs. Griffith stated:
“As a member of RCI since 1979, I have about had it with the way you do business…. Now RCI members are encouraged
to deposit weeks so you can make them available to non-members… Members cannot sometimes get their desired exchanges
through RCI; however, we can buy them elsewhere…”
The RCI reply to Mrs. Griffith was on the very next page in this edition of TimeSharing Today.
In part that reply contained the following: “RCI’s primary objective is to ensure that subscribing members
will be satisfied with our Exchange Program. One of the ways in which we attempt to ensure such satisfaction is
by developing Vacation Experience Profiles (VEP) for each of our affiliated resorts. This information is highlighted
on pages L and M in the RCI Community Guide. Vacation Experience Profiles are established for each resort based
on comment cards received from RCI members. These profiles are continually updated. If the Vacation Experience
Profile of the deposited resort/unit is not comparable to that of the requested resort, a match may not occur.”
Having never heard of this “VEP” standard I quickly retrieved my RCI Community Guide and turned
to page L. Reading that page in its entirety I discovered that is was all about Trading Power and how an
RCI member could maximize their choices. These methods were the six ones we are all familiar with.
Deposit early, supply/demand/usage of your home resort, supply/demand/usage of your resorts region, comment card
ratings for your home resort, size & configuration of your unit, seasonal designation of your week. This
page clearly led me to believe that comment cards were important but no more important than any of the other five.
On page M there was a plea to members to fill out the comment cards and send them back to RCI and then Five
Tips for easy vacation planning; Deposit early, Request early, Be flexible, Keep Endless Vacation Subscription
current and Make the RCI Community a regular stop on your Web travels. Nowhere on either page was
there any mention of Vacation Experience Profile or “VEP”.
It appears that the rules have changed again. An RCI Points Member can obtain an exchange
into any of RCI’s affiliated resorts based on only two criteria. (A) That Resort has availability and (B)
That Member owns (or rents) enough points to purchase their way in. An RCI Weeks Member may not be able
achieve a desirable exchange because the Vacation Experience Profile of the deposited resort/unit is
not comparable to that of the requested resort, a match may not occur.
Second Thought: In the same Jan/Feb 2004 issue of TimeSharing Today, Mrs. Griffith
stated in part: “Just this morning, a call to RCI concerning a week at the above resort, I was told there was
no availability. I had already checked the… GETO and knew there was availability. The week was available
to me as a non-member for a weekly fee of $249.00… Why are you taking members’ weeks and selling them to non-members
instead of making them available to your members?”
Again, The RCI reply to Mrs. Griffith was on the very next page in this edition; in part that
reply contained the following:
“Every year however, thousands of deposited resort weeks are not selected for exchange by an RCI member.
Although these weeks are often at great resorts, with wonderful amenities, and are in fantastic locations, they
are generally off-season, during months when most of us just can’t get away for a family vacation… These
weeks are made available to members through our Vacation Escapes and Instant Escapes programs… Even though these
programs are extremely popular with members, we often have more units available than you are able to use. When
this happens, we offer these units as rental to non-members…”
I do not know to whom RCI is selling or placing weeks with, however I do know that anyone can go on to
the Internet and find timeshare or vacation ownership weeks available for rent. Many of these rentals are listings
by individuals and those rental listings are usually at market rates.
If I wanted to vacation for a week in any of the following Timeshare or Vacation Ownership resorts for the cost
of $429 for the full week, I could do so by choosing to rent from one single firm…
4th of July week 2004 at a Gold Crown Resort near Disney World in Orlando - June in Key West - May to
October on Longboat Key - March and April on Fort Lauderdale Beach – March and April on Panama City Beach – January
to July on Hilton Head – January thru May on Myrtle Beach – January thru June in Bronson, Mo. – January thru April
in San Francisco – April and May in Palm Springs – February thru May on Coronado – I could ski in Tahoe or Estes
Park in February - spend any week between May and December in Cabo San Lucas – March and December in Mazatlan –
April and December in Puerto Vallarta - any week in the year on Freeport or Nassau in the Bahamas – visit
St. Thomas anytime between January and October – Hawaii why yes! Any island March thru June. I could cover the
rest of this page with other such destinations all at the same weekly rental rate.
Now, I know that these are great resorts with wonderful amenities and in fantastic locations and that any RCI
member making a request for an exchange for any of these off season periods would have no problem obtaining
that exchange because these are times when most of the rest of us just can’t get away for a family vacation.
However, what I don’t understand is how one firm (11th hour ) has access to thousands upon
thousands of timeshare weeks all over the world that they can post on one Web site and how they can rent them at
generally less than one third of market value.
The more of these kinds of thoughts I have, the more my head spins. I guess that I need to seek an appointment
with a spin doctor! Anyone know a good one?
