# A multi-level marketing plan built on the backs of timeshare owners??



## skimble (Mar 19, 2009)

My friend boasted to me yesterday about getting a week at the San Luis Bay Inn for $300 over Spring Break!  I questioned it, and he said he joined a club.  
Another friend told me she joined this Global Exchange Club today, saying she can get timeshare rental weeks for a fraction of the cost owners pay for their weeks. 
This site boasts about the fact that they offer their members weeks at prime resorts for $298-$650.  
They insult the whole timeshare industry concept-- ownership and dues.  And, they boast about getting Marriott weeks for $550.  

http://www.globalsecretsonline.com/Intro.asp?IFP=53&FPC=102576&FPV=&ad=26058&DL=137947&

http://www.globalvacationsresorts.com/
Maybe this has been discussed here... if it hasn't, it needs to be.  
Many multi-level marketing plans of the past have been Ponsi type schemes.  It's the pyramid philosophy where you sign people up under you and make $$ off them.  
At any rate, where do they get their inventory?  And, how are they able to offer it for less than maintenance fees?  

Red flag.


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## theo (Mar 20, 2009)

*Two different creatures...*

Global Exchange Vacation Club and Global Vacation Resorts are separate and distinct entities which are entirely unrelated to one another, AFAIK. 

GEVC has limited access to some excess RCI and/or unsold developer inventory and little (if anything) else --- when "members" can even reach them at all to attempt to make reservations after "buying in". Many complaints and bad experiences have been reported by various unhappy GEVC "members" posting on the subject in RedWeek forums.   

I don't know anything about GVR --- except that it is not GEVC.


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## skimble (Mar 20, 2009)

theo said:


> Global Exchange Vacation Club and Global Vacation Resorts are separate and distinct entities which are entirely unrelated to one another, AFAIK.
> 
> GEVC has limited access to some excess RCI and/or unsold developer inventory and little (if anything) else --- when "members" can even reach them at all to attempt to make reservations after "buying in". Many complaints and bad experiences have been reported by various unhappy GEVC "members" posting on the subject in RedWeek forums.
> 
> I don't know anything about GVR --- except that it is not GEVC.



My concern is... where is their inventory coming from?  These are timeshare weeks that someone is paying the maintenance dues on.  
And, we already know the shady ways of RCI.  RCI knows that about 25% of their inventory goes unused every year.  They've done things to try to liquidate that through discount sales to government employees and sales to members of RCI (and sales through 11th hour and skyauction.)  And, when they do this, they undercut the maintenance fees, thereby devaluing our investment.  
From the perspective of RCI, a multi-level marketing scheme is the ideal way to make money and liquidate those weeks.  And, if they are doing this, the only way to build credibility for their business plan is to make those prime weeks available to their "down-line." 
We all know the economy is tanking.... have you done any recent searches 60 days out?  One would think there'd be a glut of prime weeks available (especially knowing that everything trades on par at the 45 day mark)  Yet... since shortly after the new system came out, there's been a significant decline in the number of good last minute trades (even for off-season weeks.)  
It looks like the announcement for this company came in November of 2008... that's about the time I started seeing the decline in decent last minute trades on the Weeks side.  Coincidence?


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## beanb41 (Mar 21, 2009)

skimble said:


> And, we already know the shady ways of RCI.  RCI knows that about 25% of their inventory goes unused every year.  They've done things to try to liquidate that through discount sales to government employees and sales to members of RCI (and sales through 11th hour and skyauction.)  And, when they do this, they undercut the maintenance fees, thereby devaluing our investment.



I disagree that Exchange Companies by on selling unused exchange weeks for prices often under the maintenance fees are devaluing our *"investment"*. Exchange companies make money on exchanges and any week not involved in an exchange does not generate income for them. We call these weeks bonus weeks and it gives us an opportunity to sometimes get cheaper additional holidays relatively cheaply. The depositor of the week is not disadvantaged so how is the "investment" devalued.


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## laynemiller (Mar 21, 2009)

Some "points" clubs buy up large inventories of cheap, unsold developer weeks. I am on the board of a timeshare based out of Mesquite Nevada and our sister timeshare is a points timeshare. One such points club owner bought up a bunch of unsold weeks and uses the points for his owners. It works because with RCI, points are points and it doesn't matter where those points come from. He was able to buy those weeks at a very inexpensive price and now uses them for his owners, who bought into his "club" at a higher price.
Layne


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## skimble (Mar 21, 2009)

beanb41 said:


> I disagree that Exchange Companies by on selling unused exchange weeks for prices often under the maintenance fees are devaluing our *"investment"*. Exchange companies make money on exchanges and any week not involved in an exchange does not generate income for them. We call these weeks bonus weeks and it gives us an opportunity to sometimes get cheaper additional holidays relatively cheaply. The depositor of the week is not disadvantaged so how is the "investment" devalued.



When you pay a maintenance fee, that should be the lowest price for utilization of that week.  It is the perk of ownership.  There's an initial cost that goes into the purchase of that timeshare week-- it's your commitment.  The reason you committed to that ownership is that you know you're getting a benefit through that resort-- and that benefit is annual usage.  When a non-owner can pay less than your maintenance fees for the same perks you've made the commitment to attain, you're investment is valueless.  Then there's nothing special about being an owner, and (from the Incredibles) "when everyone is special, no one is."  
If I own a beach week in So. Cal, and I pay $500 in fees for my usage week (off season or prime) and my friends are picking these same weeks for $300, my ownership is useless.  I'd be better off never paying the $500.  This leads to defaults, $1 timeshare giveaways and feeds the poor reputation timeshare ownership already had.   
Ownership would be a losing venture if those same weeks could be had for less on the open market or through an inexpensive club.


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## skimble (Mar 21, 2009)

laynemiller said:


> Some "points" clubs buy up large inventories of cheap, unsold developer weeks. I am on the board of a timeshare based out of Mesquite Nevada and our sister timeshare is a points timeshare. One such points club owner bought up a bunch of unsold weeks and uses the points for his owners. It works because with RCI, points are points and it doesn't matter where those points come from. He was able to buy those weeks at a very inexpensive price and now uses them for his owners, who bought into his "club" at a higher price.
> Layne



Interesting... so that means RCI Points is selling junk weeks that have Points attachments and using those to bolster their club members trade value.  
It's unscrupulous... here's why... 
There's a timeshare resort in Helendale, CA.  It's a golf resort, but very poor location.  It went through a few management companies and a lot of defaults.  They even started leasing units to full time owners.  
Recently (about a year ago) RCI took over management of the resort.  They took the resort, changed a few things (the name being one-- gave it a more eloquent name, changed the description to sound more sophisticated.  They improved some of the ammenities, and grounds.  Then they turned around and forced all members to transfer to Points or lose tradability in their ownership altogether.  Basically, RCI told members there that they would not be able to exchange on the weeks side any longer.  And, the resort was being changed to a Points resort.  To get the Points conversion, owners needed to cough up about $2K or $3K.  For that, their Terrible exchange week was converted to RCI Points-- and they got about 50K points/unit-- FAR overvalued. 
Now, they have significant trade value.  
So... not only is RCI doing this, but they are likely accepting PFD-- points for deposit.  

If I'm inferring correctly........... 
RCI Points inventory has never looked better, especially for the last minute exchanges.  RCI Weeks has never looked worse.  
They appear to be manipulating the Points system to make this Global Exchange work.


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## glenn1000 (Mar 22, 2009)

skimble said:


> When you pay a maintenance fee, that should be the lowest price for utilization of that week.  It is the perk of ownership.



While that sounds like a nice concept, the reality is that the market defines the value of a week rented by a private company or an individual. The price of the annual dues are based on the operating expenses of the resort. In a market where demand outstrips supply, weeks will rent at a premium. In a buyer's market where there is an oversupply or decreased demand (i.e. now), prices may well dip below what owners pay to keep the resort up.


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## skimble (Mar 22, 2009)

glenn1000 said:


> While that sounds like a nice concept, the reality is that the market defines the value of a week rented by a private company or an individual. The price of the annual dues are based on the operating expenses of the resort. In a market where demand outstrips supply, weeks will rent at a premium. In a buyer's market where there is an oversupply or decreased demand (i.e. now), prices may well dip below what owners pay to keep the resort up.



True, the market may determine the rental value of a week.  I'm trying to say... once the rental value undermines your maintenance fees, what's the use in paying fees?  The value of your week is gone.  
It seems such a simple thing... 
Owner pays $500 in fees
Renters pays $300 in rental. (because the rental agent never paid the $500)
Owner can't get a renter for more than $500.  Sell.  The week has No Value.  
Who would commit to paying fees on this week?    

Yes, simple supply/demand.  An owner Will rent for whatever they can get.  But then there's fair competition, and there's artificial competition.  RCI has no incentive to keep costs above maintenance fees; owners do. 
Why on earth would RCI accept $300 for a week at the San Luis Bay Inn over Spring Break?... they have no vested interest in seeking a higher price.  They DO have a vested interest in attaining credibility for their discount mock timeshare MLM plan. 

Trust me, if that week had been at market value, it would have been at least 40% higher than maintenance fees.   I'm not alone when I say, I would have gladly paid double that price for that rental.


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## theo (Mar 23, 2009)

*Huh?*



skimble said:


> Recently (about a year ago) RCI took over management of the resort.



I have no use for RCI and I do not use them, but this statement puzzles me quite a bit. I was not (and still am not) aware that RCI has ever entered into the business of resort management. 

Can you elaborate further? Did you actually mean to say instead that the resort changed management company and then converted to be an RCI points facility? That much is certainly understandable --- but the assertion that RCI is actually "*managing*" the facility truly puzzles me.


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## jdetar (Mar 23, 2009)

skimble said:


> When you pay a maintenance fee, that should be the lowest price for utilization of that week.  It is the perk of ownership.  There's an initial cost that goes into the purchase of that timeshare week-- it's your commitment.  The reason you committed to that ownership is that you know you're getting a benefit through that resort-- and that benefit is annual usage.  When a non-owner can pay less than your maintenance fees for the same perks you've made the commitment to attain, you're investment is valueless.  Then there's nothing special about being an owner, and (from the Incredibles) "when everyone is special, no one is."
> If I own a beach week in So. Cal, and I pay $500 in fees for my usage week (off season or prime) and my friends are picking these same weeks for $300, my ownership is useless.  I'd be better off never paying the $500.  This leads to defaults, $1 timeshare giveaways and feeds the poor reputation timeshare ownership already had.
> Ownership would be a losing venture if those same weeks could be had for less on the open market or through an inexpensive club.



That's just silly. The whole world works that way, all the time, in every industry. It's called "economics". Things go up and down all the time. What makes this different than the majority of stocks on the market right now? I could go and pick out many that are solid, stable companies with truly bargain prices because that's just what the market bears.. right now.

You can't get all upset about these things, if you see your weeks going for half price, then pick one up! That's what I just did. I just got home two days ago from a Marriott week at my home resort that I paid half of my MF's on. It was great. I used my owned week to trade up. Couldn't be happier.

If you keep thinking the way you are you won't want to buy gas because it could go down in price the next day, or egg's because they too just went on sale the day after you bought them, or a house because the value may temporarily decline throughout your ownership, or that nice jacket you saw and then it goes on sale 3 months after.

Point is, there's always someone getting a better deal.. what matters is, if yours was still a fair price and you're happy with it (which sometimes requires you to learn self discipline). The MF's for most of these resorts I would say is very fair, and the upfront price.. well, this isn't a used car vs a new car situation, they're all the same thing so resale at 20 cents on the dollar obviously is a huge savings


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## skimble (Mar 24, 2009)

theo said:


> I have no use for RCI and I do not use them, but this statement puzzles me quite a bit. I was not (and still am not) aware that RCI has ever entered into the business of resort management.
> 
> Can you elaborate further? Did you actually mean to say instead that the resort changed management company and then converted to be an RCI points facility? That much is certainly understandable --- but the assertion that RCI is actually "*managing*" the facility truly puzzles me.



We learn something new every day on here.... RCI Management manages plenty of resorts.  In fact, they manage the San Luis Bay Inn.  Call them to verify for yourself:  PH: (805) 595-2333


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## jdetar (Mar 24, 2009)

It's not technically "RCI" who manages them, it's Wyndham. Cendant is/owns Wyndham and RCI.. a little confusing maybe but RCI itself (the brand/sub company) doesn't do the management itself.


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## skimble (Mar 24, 2009)

jdetar said:


> That's just silly. The whole world works that way, all the time, in every industry. It's called "economics". Things go up and down all the time. What makes this different than the majority of stocks on the market right now? I could go and pick out many that are solid, stable companies with truly bargain prices because that's just what the market bears.. right now.



Basic economic does play a role here, yes.  
RCI's basic role is exchange though.  If they purchased weeks and rented them, that would be one thing..... they could take a loss and that would be like your stock analogy, or better yet, it would work into a real-estate analogy.
RCI is given these weeks. They rent them out because they CAN.  (they claim to be recouping costs from other Points services... that's not always the case.)  This has been a point of contention with RCI for years on TUG.  The problem for RCI has always been getting people to pay a decent price.  The problem for owners is that they undercut the fees we pay.  With this MLM, maybe their rents can surpass our fees, maybe not.  
But building a business on the premise that it's far better than purchasing, paying fees and paying dues, undermines timesharing... especially when they can offer weeks for less (the same weeks that we deposit in earnest with them for exchange.)


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## skimble (Mar 24, 2009)

jdetar said:


> It's not technically "RCI" who manages them, it's Wyndham. Cendant is/owns Wyndham and RCI.. a little confusing maybe but RCI itself (the brand/sub company) doesn't do the management itself.



Look under their name badges where it says RCIM with the same RCI logo.  And, when you ask them, they'll tell you... "RCI Management."  
It may be Wyndham, but they go under the name of "RCI Management."


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## theo (Mar 24, 2009)

jdetar said:


> It's not technically "RCI" who manages them, it's Wyndham. Cendant is/owns Wyndham and RCI.. a little confusing maybe but RCI itself (the brand/sub company) doesn't do the management itself.



This was precisely my intended point and perhaps you have stated it better than I managed to accomplish (although I personally don't really understand or know how / if Cendant fits into the picture anymore).

Stated another way, as far as I know, *no one* who is employed by the entity called RCI is actually involved in the management of *any* resort. 

Wyndham, on the other hand, the company which now *owns* RCI, *does* indeed have employees who are actually involved in resort management.

Semantics, maybe; I'm just trying to get / keep the facts straight...:ignore:


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## jdetar (Mar 24, 2009)

skimble said:


> Look under their name badges where it says RCIM with the same RCI logo.  And, when you ask them, they'll tell you... "RCI Management."
> It may be Wyndham, but they go under the name of "RCI Management."



Doesn't matter what they call themselves.. it's still Wyndham/Cendant.


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## skimble (Mar 25, 2009)

theo said:


> This was precisely my intended point and perhaps you have stated it better than I managed to accomplish (although I personally don't really understand or know how / if Cendant fits into the picture anymore).
> 
> Stated another way, as far as I know, *no one* who is employed by the entity called RCI is actually involved in the management of *any* resort.
> 
> ...



It may be semantics.  Have you ever encountered the operations of an RCI Management at a resort?  They do not call themselves Wyndham.  They call themselves RCI Management. They do not post Wyndham signs or label their paperwork with a Wyndham logo.  They don't decorate with traditional Wyndham furnishings.  
Is this like saying Sprite is really Coke even though it's says Sprite on the label and has a different flavor... just because Coke owns them?


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