# Questions on Fractional Ownership at Velas Vallarta – Is this a Scam?



## tim (Apr 17, 2007)

I attended a timeshare presentation in Puerto Vallarta last week and was introduced to what they are calling Fractional Ownership.  It sounds very much like a normal timeshare in that you get a week each year for 25 years (RTU) although you can accelerate your weeks by using up to 4 weeks in one year.  There were two parts to the presentation, however, that puzzle me and I need some help on determining if this is a scam.  We did not buy, but are interested in learning more about this.  

They claim that the fractional part of this ownership is that you can vacation up to 52 weeks a year outside of the home resort (Velas Vallarta) in either a resort for a week at a time (cost between $100 and $800) and hotels for $80/night.  It sounds like some type of vacation club.  I think it may be Holiday Systems International, which I don’t know anything about.  The sales person claimed that with this system (whatever system it is) that we could stay at virtually any hotel or resort for $80 a night, including top end resorts and hotels like Marriott, etc.  This, of course, sounds too good to be true.

The most remarkable part of the presentation was his desire to essentially sale our timeshares.  He asked which timeshares we owned and what we paid for them and then came back with a value that they would guarantee to us if we assigned them our timeshare.  His “guaranteed” price was more than I could sale it for myself.  He claimed that the Company he worked for gets some kind of tax benefit for doing this.  Again, this sounds too good to be true and sounds more like some type of scam.  

Does anybody have any knowledge about this operation at Velas Vallarta.  I would love to here from any body that bought such a package on their experiences.  Thanks.


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## T_R_Oglodyte (Apr 17, 2007)

That quasi-vacation club is something that almost every developer is adding to their pitches these days.  I went through the pitch for one of those last week at Paradise Village in Puerto Vallarta, I asked the sales rep to show me the printout, which he was glad to do because he could show the availability of resorts.

But when I got specific and looked for certain locales that I knew were tough - like looking for Hawai'i for this coming August or places such as Whistler in February - the inventory was pretty sparse.  It's clear that the stuff available is not peak stuff and it's not the go anytime, anywhere picture they paint it to be.

Behind that I suspect that RCI and II are actually making inventory available to developer promoted vacation club arrangements such as this - part of the hand-in-glove relationship between RCI/II and developers in which the exchange company helps provide products for developers to make the sale.  

You're also right about it being too good to be true.  In many ways it's like the upfront sales fee scams - when they are offering inventory that cheaply, what's the incentive to keep providing inventory after members are signed up?  Isn't it better to have a model where the supplier makes money by continuing to supply quality inventory?

I figure that there will simply be a succession of these types of clubs.  ResortDealsNow Club will be sold for several years, with the exchange company stuffing enough reasonably good inventory into the club to make the Club look good.  After several years, developer  GoldCrownRedWeeks Club is set up, which now receives the better inventory and the developer shifts to include that Club in the sales pitch.  Meanwhile ResortDealsNow Club only gets the dregs.  

Repeat the process every few years.


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