# RCI Red Week Exchange Question



## JoeMO (Jul 2, 2006)

I have heard two different things.

One is that if you own an RCI Red Week, even if it is a $1,500 resort in South Africa, you can easily and consistently trade for any other red week.  Basically that all red weeks are equal.  So you should buy the cheapest resort with the lowest maintenance fee, regardless of where it is located so long as it is a red week, and then trade it every year for the one you want.  I am referring to floating weeks.

I have also been told that "what you put in to trade is what you will get out".  In other words RCI ranks resorts and has a formula that makes red weeks not all equal.  I could have difficulting trading my $1,500 red week for a red week in the new Fairfeld Alexandria or Maui.  It doesn't seem fair for someone who buys a $1,500 resort in a 3rd world country to be able to trade for a week in a resort that cost $15,000 in the US.  Or is that one of the hidden secrets of timesharing.  Or is it to good to be true.

Thanks


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## Change the X-change (Jul 2, 2006)

Second is correct...if you want to put it some way, there are leves of red. Remember that red weeks do not mean high demand, it only measures the supply. i.e. if you buy a Marriott resort in Orlando it is a red week all year round and we all know that Orlando is not high demand all year round.


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## Carolinian (Jul 3, 2006)

The cost of buying a week or the cost of the maintenance fee are NOT factors in the trading power of a week and should not be.  Should someone who overpays for a developer blue week have more trading power than someone who finds a good deal on a prime red week on ebay?

The cost of SA weeks is driven not by the inherent worth of the timeshares, but by the fact that the SA currency, the rand, has long been undervalued making many travel related items, including timeshare, a bargain for those spending stronger currencies.  That is completely irrelevent to the value of a timeshare for exchange purposes.

What is relevent is the supply and demand curve.  The European version of the RCI directory has an interesting table on availibility of exchanges, based on supply and demand.  That table shows that SA has a better demand over supply curve than Florida.  That is the fundamental reason that SA weeks trade reasonably well.


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## "Roger" (Jul 3, 2006)

The second is what is true.  

What would be best for consumers is if the exchange companies told owners what their "trading power" was.  This would allow consumers to make more intelligent decisions when purchasing a timeshare.  It could also foster some increased competition between the trading companies as to what kind of trading power would be given to an individual resort.  (It would force trading power to fall more in line with actual supply and demand.)  Trading power is kept hidden mostly to appease the developers.  They can tell you that your first option is true, bostering sales.  

Knowing what will be posted in response in advance, you will be told that the exchange companies cannot publish trading power because it goes up and down.  So do stock prices, but comsumers are still kept apprised of prices. Hotels and resorts let their prices vary during seasons in accordance with historic "supply and demand" yet they can publish their prices.

You will be also told that published prices would lead to price fixing.  Again, I would love to hear the New York Stock exchange claim that they will no longer publish prices in order to "protect the consumer."  

The bottom line is that keeping trading values secret hurts the consumer.  Lack of openess always hurts the consumer.  In addition, as any economist will tell you, secret pricing leads to either inside dealing or the suspicion of misdeeds.  One of the ironies on TUG is that those who are most opposed to open pricing are also the most suspicious and hostile toward the trading companies.


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## Kola (Jul 3, 2006)

Carolinian said:
			
		

> The cost of buying a week or the cost of the maintenance fee are NOT factors in the trading power of a week and should not be. .......
> The European version of the RCI directory has an interesting table on availibility of exchanges, based on supply and demand.  That table shows that SA has a better demand over supply curve than Florida.  That is the fundamental reason that SA weeks trade reasonably well.



Carolinian
I agree that the purchase price has nothing to do with trading power. If somebody wants to pay $30 - 40,000 for a week that's their money. That's what pays for all the incentives, gifts, tickets, bonus days, etc. 
I haven't seen the RCI table you have mentioned but surely demand vs supply is not equal all over Florida. The Marco island, other Gulf coast destinations and the Keys are good examples of the demand exceeding supply. Sure, we all know that Orlando is overbuilt but even there seasonal supply vs demand ratios show a huge difference. The same must be generally true with SA resorts both in terms of their location and the season. So, I doubt if the generalisation about Florida vs SA is a valid one ?   

Kola


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## Carolinian (Jul 3, 2006)

Kola said:
			
		

> Carolinian
> I agree that the purchase price has nothing to do with trading power. If somebody wants to pay $30 - 40,000 for a week that's their money. That's what pays for all the incentives, gifts, tickets, bonus days, etc.
> I haven't seen the RCI table you have mentioned but surely demand vs supply is not equal all over Florida. The Marco island, other Gulf coast destinations and the Keys are good examples of the demand exceeding supply. Sure, we all know that Orlando is overbuilt but even there seasonal supply vs demand ratios show a huge difference. The same must be generally true with SA resorts both in terms of their location and the season. So, I doubt if the generalisation about Florida vs SA is a valid one ?
> 
> Kola



I would doubt that the general regional availibility in any region would apply to the very highest demand areas in any region.  Capetown and the Kruger Park areas in SA and Sanibel/Captiva/Marco and the Keys will always do MUCH better than the average resort in SA or the average resort in FL.


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## Carolinian (Jul 3, 2006)

The problem is the format of publication.  If using a paper and ink format, this also FREEZES values for long periods, which is the real problem.  Using an electronic format only, where values could adjust frequently for changes in supply and demand, could go a long way to alleviating this problem.  There are many,many times more listings involved in timeshare exchange than in the stock market.  The newspaper can publish stock prices every day, but who can do that every day in a paper and ink format with timeshare exchanges?

The problem with price (or value) fixing comes from a partially transparent system, where the value numbers are published but not the formula used to arrive at them.  Published values create an incentive for developers to try to rig the system by colluding with the exchange company, and a hidden formula for setting the numbers gives them the mechanism to cook the books.  The partially transparent system is the worst of all worlds, giving both the motive and the method for developers to rig the system.  In contast, a non-transparent system has no incentive for such activity as there would be nothing to gain since the numbers are hidden, and a fully transparent system lacks the ability to cheat, since the methodology for setting the numbers is out on the table.   Either a fully transparent system or a non-transparent system is better for consumers than a partially transparent system like RCI Points.







			
				Roger said:
			
		

> The second is what is true.
> 
> What would be best for consumers is if the exchange companies told owners what their "trading power" was.  This would allow consumers to make more intelligent decisions when purchasing a timeshare.  It could also foster some increased competition between the trading companies as to what kind of trading power would be given to an individual resort.  (It would force trading power to fall more in line with actual supply and demand.)  Trading power is kept hidden mostly to appease the developers.  They can tell you that your first option is true, bostering sales.
> 
> ...


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## candid (Jul 18, 2006)

At some point quite a while ago RCI decided they needed certain SA space, and negociated contracts that gave certain SA resorts an artificial boost in trading power, in addition to the normal power they would recieve from the supply/demand formula. Like all TP steroids, it didn't last forever, and now although certain SA weeks at certain SA resorts trade far better than average, most don't.  
So there was truth behind the myth, at least at some time. 

And yes, certain parts of Florida named by a previous poster will certainly trade way above average. Remember, all the converted retirement condos in the middle of nowhere, and the zillions of timeshares in Orlando, etc. do factor into that average for the state.


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## Carolinian (Jul 18, 2006)

Candid-

Many SA owners have termed the day that SA was brought into the normal supply/demand mainstream (something I applauded) ''Black Sunday/ Golden Sunday''.   Some resorts where all weeks, white or red, had traded the same, suddenly showed a big difference for the particular week deposited, as it should be.  Some resorts increased substantially in trading power, and some declined, so it appears that while RCI's thumb on the scales may have boosted some SA resorts, it apparently depressed others.  Now the correct equilibrium seems to be restored, which is a good thing for timesharing, but it probably won't stop those with lesser weeks or lesser resorts in SA from calling it Black Sunday.


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