# Could timeshare owners take-over RCI?



## JudyS (Jul 6, 2007)

I was recently checking out the WMowners (Worldmark Owners') site, and someone there brought up the possibility of Worldmark owners gaining a controlling interest in Wyndham as way of stopping the undesirable changes Wyndham is making in the Worldmark system.   It was also noted that Fairfield owners would have an incentive to band together with Worldmark owners to buy a controlling interested in Wyndham.  I think this is a great idea, but there is no reason to stop with just Worldmark and Fairfield owners.  RCI is owned by Wyndham, too. So, anyone who is unhappy with RCI would have an incentive to get involved with a buyout of Wyndham.

On the Worldmark forum, it was mentioned that Wyndham has a market capitalization of about $6 billion.  So, to gain a controlling interest, timeshare owners would have to pony up at least $3 billion.  However, my guess is that major changes could be made in Wyndham even if timeshare owners bought only %10-%20 of the company or maybe even less, since many shares are probably held by various institutional owners who don’t get involved  in company governance.  

So, if timeshare owners could get together a billion dollars to invest in Wyndham, they could reverse the deterioration in Worldmark, make Fairfield far more customer-friendly, and fix the abusive practices of RCI.  Anything that fixed Wyndham/RCI would probably improve the timeshare experience even for owners of timeshares that have no relation to Wyndham/RCI, because other exchange companies would have to “raise their game” to compete with an improved RCI.  

A billion dollars may seem like an impossible amount of money for timeshare owners to raise. But, consider the following:

1) If you add together all Worldmark owners, all Fairfield owners, and everyone who has  a deposit currently with RCI, you would probably get at least two million timeshare owners. Each of these owners probably paid, on average, well over $10,000 (in 2007 dollars) to purchase their timeshares.  Two million owners times $10,000 per owner is over $20 billion “invested” in timeshares.  So, Wyndham’s exploitative practices are hurting assets that collectively cost timeshare owners over $20 billion to acquire. Spending $1 billion to protect assets that cost $20 billion is a pretty reasonable move.

2) The vast majority of timeshare owners probably already have substantial funds in stocks or in retirement accounts of some sort.  Timeshare owners tend to be more affluent than average Americans (many of whom can’t afford to vacation at all.)  They also tend to be middle-aged or older. Affluent people over 45 tend to have lots socked away in IRAs and 401Ks. So, timeshare owners wouldn’t have to pony up any new money to launch a take-over of  Wyndham. All they would have to do is move a little of their retirement money or other investments into Wyndham stock. If, on average, timeshare owners have $200,000 each in liquid investments (and this is probably a low estimate), and one out of every 10 Fairfield/Worldmark/RCI owners each put 2.5% of their investment funds into Wyndham stock, that would be $1 billion of  Wyndham stock.

3) Buying Wyndham stock could be a no-lose proposition for timeshare owners who are already involved in the Wyndham system.  If timeshare owners succeed in changing Wyndham’s exploitative practices, their timeshare ownerships go up in value.  If they fail at changing Wyndham’s exploitative practices, well, then they as shareholders become the beneficiaries of whatever money Wyndham can squeeze out of timeshare owners.  Of course, any stock can decline in value. But, there’s no reason to think that Wyndham would be a worse investment than most other companies. And, once timeshare owners got control of Wyndham, they could spin off all the non-timeshare related components, allowing individual owners to reduce the amount they had invested in Wyndham (if they chose) while still retaining control of Fairfield/Worldmark/RCI.  

4) A lot of timeshare owners are really, really PO’ed at RCI.  

The big problem, of course, would be getting the word out to timeshare owners.  Besides TUG and other forums, and independent newsletters such as Timesharing Today, other options would be HOA newsletters and doing a direct mail campaign to timeshare owners (this last approach would cost money.)  Of course, an ad in Endless Vacation would be ideal, but I don’t think RCI would run that ad!

I don’t feel that I have time to be the main person running such a campaign (and I don’t have the stock market savvy), but I’d certainly be interested in helping out.  I’d be happy to move some of my IRA funds into Wyndham as part of a take-over attempt, and I’d chip in towards a direct mailing campaign, too.

So, what do you think?  Are you mad enough at RCI/Wyndham/Fairfield/Worldmark to actually do something?


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## Timeshare Von (Jul 6, 2007)

JudyS said:


> So, what do you think?  Are you mad enough at RCI/Wyndham/Fairfield/Worldmark to actually do something?



No.  

Giving money for such an effort sounds more absurd than buying from the developers.  A billion bucks?  I don't see that happening even if Bill Gates owned timeshares with these guys and was pissed off.

I didn't "invest" the average of $10,000 to buy my two FF contracts . . . and wouldn't invest that much in such an effort . . . sorry.

My money socked away in various retirement funds is tax deferred.  Such an activity would not be treated in this favorable manner so to pull out $10,000 to do it, would actually cost me around $4,000 in penalties and taxes so I'd be looking a net withdrawal of probably $14,500 to have $10,000 to participate in the pooled fund.  (NOTE:  I don't consider money in an IRA or 401K as a "liquid asset")

Generally speaking there is a phenomenon known as "free riders syndrome" where people (like me) won't get involved in the effort because they can reap the benefits of such collective action without actually having to invest financially.  The motivation has to be particularly compelling with a real sense of doom and gloom if nothing changes.  For me, I just am not that motivated nor do I see my timeshare ownership and involvement as completely without value.  In the event that it would get that bad, with as little as I have invested, I would be fine with dumping my ownership with them and walking away.

I realize that for those who did pay a premium for their timeshare ownership(s), they have more at stake and more reason to feel hosed by the system(s).  I just don't know if you can create the mass necessary to really make a difference.


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## JudyS (Jul 6, 2007)

Timeshare Von said:


> ...My money socked away in various retirement funds is tax deferred.  Such an activity would not be treated in this favorable manner so to pull out $10,000 to do it, would actually cost me around $4,000 in penalties and taxes so I'd be looking a net withdrawal of probably $14,500 to have $10,000 to participate in the pooled fund.  (NOTE:  I don't consider money in an IRA or 401K as a "liquid asset")....


I probably shouldn't jump in before other people have had a chance to comment, but I wanted to clarify something.  I certainly wasn't talking about anyone taking money *out* of a retirement account.  I was talking about moving money into Wyndham stock *while* it was in a retirement account.  In other words, Fidelity currently manages my IRA funds.  Fidelity will put my IRA funds pretty much anywhere I want -- into index funds, bonds, a money market fund, individual stocks, and other things -- and it's still in my IRA.  If I wanted to invest in Wyndham stock, I'd just tell Fidelity to move some funds from an index fund or a money market fund into Wyndham stock.  Any IRA owner can move their funds into individual stocks, while still keeping them as an IRA, if they want.


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## Steve (Jul 6, 2007)

Trying to get two million timeshare owners to each put hundreds or thousands of dollars into the stock of a huge multi-national public corporation, agree on an action plan, act as a unified group, and actually take over the company just isn't as easy as it sounds.  

Steve


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## taffy19 (Jul 6, 2007)

The stock would jump too much in price so people, who come in later, would risk too much money as the price will go down again once everybody has bought. There is no extra income so why would the price stay high? Too risky and hardly possible either. JMHO.

PS. I would forget buying for exchanges mainly as a "floating system" can be changed at any time for any reason and it's never to our advantage either with Wyndham or any other system.


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## Carolinian (Jul 6, 2007)

A shareholder strategy was plan of the action plan of Save Sky Miles, the successful effort to back Delta Airlines off of some anti-consumer changes in its ff program, but the sights were not set so high as to try to gain control of the company.   The idea was to get some SSM members to the annual shareholders meeting to ask some embarassing questions and hopefully get others thinking.  It is also possible to force a vote on issues by the shareholders.


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## PerryM (Jul 6, 2007)

*Plunder or takeover - which one?*

*As a consumer my job is to maximize the usage of a company’s service/product – it is NOT consumer activism.*

Consumer activism, like boycotts, lawsuits, trying to take over the company have NO place in being just a consumer.  Once you join in any activism activities you stop becoming a consumer and start to become part of management – a hostile act I might add.  This supposes that the consumer knows more than the management team.  This supposes that the consumer is superior to the company.  This is a lot of supposing.

I thank the timeshare gods every time I get an exchange  - I’ve never had a week based exchange that was a step down but at least 1 to 2 steps upwards.  I fully realize that some other poor owner probably got shafted – that’s NOT my concern.  I'm doing what a consumer is supposed to do - play by the rules and maximize my experience with the company.

Capitalism works best if you do what’s best for your particular best interests – screw anyone else.  There is no better way to conduct commerce than Capitalism.  This might sound selfish but show me a better form of commerce – everything else is a miserable flop.

*So each timeshare owner needs to make up their mind – plunder the existing set of rules and regulations for your own greedy purposes or join others in hostile attempts to take over a business. * Just why did each of you buy a timeshare or sign up for a service, like exchanging timeshares – to plunder or to takeover?


There are so many opportunities in the timeshare universe that to get tangled up in consumer activism is not for vacation enjoyment but other forms of enjoyment/entertainment.


P.S.
If folks are so bent out of shape with RCI just start a co-op for exchanges.  I’ve described how an ideal exchange system would work many times.  That would be a great way to set your own set of rules and maximize your experience.  One of the byproducts, however, would be no ability to exploit other owners – *a level playing field and fair set of rules could be looked at as a disadvantage*.  

Even if some of you are ticked off at RCI’s obsession to dominate the cheap rental market – don’t you still get enough opportunities to upgrade and exploit the system?  I sure have with RCI and I especially love II – now there’s a place you can easily upgrade 1 or 2 or more levels.

Buy a timeshare that exchanges into both – pick and choose which system offers you the most exploitation for the least money.


Fight or exploit?  I always find exploiting a lot more fun.


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## Jya-Ning (Jul 6, 2007)

No, they have 800,000 owners.  If you are talking about 10% which is around 600M, each owner need to pony up $750.  Look like instituation hold over 80% since they are in SP500 index.

With Hilton being take over, it may not a bad idea if you already own them.  Otherwise, it should be just pure investment decision.  

I believe once we become owner of the company, we may be more anti-exchanger. 

Jya-Ning


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## Jya-Ning (Jul 6, 2007)

PerryM said:


> There are so many opportunities in the timeshare universe that to get tangled up in consumer activism is not for vacation enjoyment but other forms of enjoyment/entertainment.



I am pretty sure majority owners has the similar thought.  I have looked at the WM votes.  I believe total WM owner that will doing this is around less then 30k that including Perry I believe (I just sum up the vote that does not goes to WYN backer).

So add all owners will be 80k.  Now each one need to pony up $7500.

Then you will realize that if you put so much money in the company stock, you will want the company make more money in return.  In this case, you want to protect the sell through developer, you want to get into vacation condo renting which has bigger market then exchange and higher profit margin.

You will enforce the tripreward or whatever plan you can think to differ the resale and developer until you can make TS a daily purchase decision which make the current sale model unnecessary.  But until that time, you will have to protect your profit generator. 

You will probably vote the current manager to stay and do whatever they do best.

Jya-Ning


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## BocaBum99 (Jul 6, 2007)

No, not really.  And, it's not the money.  It's the fundamental FLAW in the business models of third party exchange companies.

The problem with RCI is that it is not really an exchange company the way that we want to think of it.  RCI is really just a vehicle for developers to get fresh meat into their sales presentations.  The reason for that is that a timeshare exchange company is NOT a viable system without FREE deposits coming from somewhere.  Those FREE deposits are from developers with excess inventory who want to use it to attract potential new owners.

Why is that?  Because timeshare deposits are perishable goods.  They have expiration dates and their is significant spoilage.  Each and every time a unit is rented off or expires and each and every time a depositer gets bonus week, a FREE week must be deposited into the system in order for the exchange gap to be small.  If there are no free weeks, then inevitably there will be far more exchange credits due to depositers than there are weeks available for exchange.  That is what I call the exchange gap.  If there aren't free weeks to replenish exchange inventory, then the exchange company grinds to a halt.

As resort developers find better means to market and sell their timeshares, they do not need exchange companies as much.  This is what I believe is the root cause behind prime week deposits decreasing in RCI.  I believe the developers just don't believe they need to put them in anymore.  They can either rent them out or use them in their own mini-system.

So, back to the original question.  Even if a group of owners could raise money to buy out RCI, it wouldn't work without the developer relationships who deposit free weeks into the system.

The right model for timeshare exchange is the rental model.  That is, if you are the owner, you are accountable for getting someone into your unit or it goes vacant.  If it goes vacant, you are the one taking the loss on it.  If you want to offload your week to a third party for moving it, they will either take a fee for moving it in which case you still take the loss if they don't move it or they buy it from you.  They will buy it from you if they believe they can move it before it expires for a margin over what they pay you for it.

Like them or not, RCI is taking the right action given how the market is evolving by moving into the direction as a rental company.


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## JudyS (Jul 6, 2007)

Steve said:


> Trying to get two million timeshare owners to each put hundreds or thousands of dollars into the stock of a huge multi-national public corporation, agree on an action plan, act as a unified group, and actually take over the company just isn't as easy as it sounds.  ...


Oh, I agree that it certainly wouldn't be easy.  My question is whether or not it is _possible_.  As I mentioned in my original post, "A billion dollars may seem like an impossible amount of money..." 




iconnections said:


> The stock would jump too much in price so people, who come in later, would risk too much money as the price will go down again once everybody has bought. There is no extra income so why would the price stay high? Too risky and hardly possible either. JMHO.....


I agree that this could drive the stock price up, which would make it risky to buy in the later stages of the action. Whether it actually does drive the stock price up, and how much, would depend on a lot of factors, such as what models institutional investors are using to buy and sell, how quickly the process happens, etc. I don't know enough about stock prices to estimate how much the price might be driven up. However, during the early stages of such an action, the prospect that the price might be driven up would be an incentive to _buy_ the stock. 




Timeshare Von said:


> ...Generally speaking there is a phenomenon known as "free riders syndrome" where people (like me) won't get involved in the effort because they can reap the benefits of such collective action without actually having to invest financially....


Oh, I'm well aware of the free rider problem.  However, it's most acute when you ask people to actually spend money (or otherwise give up resources) for the benefit of others.  I don't really see a reason why Wyndham would be any worse of an investment than any other stock, not unless and until the "customer takeover" drove the price up above its fair market value.  Unless that happened, buying Wyndham stock wouldn't involve sacrificing any money, so the "free rider" problem really shouldn't apply, at least not much.  The main problem, as I see it, is for owners to even find out about and understand the plan -- it's the time and effort involved. 




Carolinian said:


> A shareholder strategy was plan of the action plan of Save Sky Miles, the successful effort to back Delta Airlines off of some anti-consumer changes in its ff program, but the sights were not set so high as to try to gain control of the company.   The idea was to get some SSM members to the annual shareholders meeting to ask some embarassing questions and hopefully get others thinking.  It is also possible to force a vote on issues by the shareholders.


Interesting point!  That would be a much easier approach.  If some RCI/WM/FF went to shareholders' meetings and made it clear just how much customer base the company was losing, that might have an effect. The main problem I see there is that RCI/WM/FF may be a realtively small fraction of Wyndham's business, which also includes over 6000 franchised hotels and other things, so it may be hard to get the other shareholders' attention.


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## "Roger" (Jul 6, 2007)

One of the things that you are presuming, Judy, is that everyone who is mad at RCI is mad for the same reason.  Lets just take the most obvioius example.  Carolinian is furious about the Points program.  He thinks it needs to be discontinued.  Many of us are quite happy with the Points program.  So now we collectively own a controlling interest in Wyndham.  (15% to 20% would be considered a controlling interest.)  What are we to do about the Points program?  The same could be said about many of the other "grievances" against RCI.  (That would include your own biggest peeve -- whether RCI should have a downward filter or not.)

About the only area of total agreement would be to say that it would be nice if RCI had better customer relations.  So, we all spend thousands of dollars and vote that they should have better customer relations.  I don't think that this will rally the troups to invest.


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## Dave M (Jul 6, 2007)

What makes this project, as outlined, seem most risky to me is the polarization of goals. 

Wyndham/RCI's long-term goal is to make money for shareholders. Although customer service and profitability often go hand and hand, they just as often are not so linked. That's because the "wants" for some customer groups differ from those for others. Meeting the "wants" of all customers is rarely possible. (Just look at the thousands of complaints on FlyerTalk by frequent flyers, the airlines' best customers, against all airlines, for example.) Like many companies do, RCI might have to sacrifice service to some customers to meet its goal and that is likely what has happened here. 

However, the object of your project would be to make the corporation change some of its operating polices, which, for all we know, might have a hugely negative long-term impact on earnings. That would adversely impact the shareholder investments and could well result in a huge overall loss to shareholders and to the business model, with Wyndham left to pick up the pieces.

Is it possible to accomplish what you seek? I don't think so. The group is too splintered (e.g., see "Roger"'s post immediately above mine) and doesn't have the single-purpose deep pockets that most such efforts have. 

The more likely way to some partial success would be a relatively low-cost publicity and contact campaign along the lines of the very successful Save SkyMiles effort that Steve (Carolinian) refers to. (As a Delta Platinum elite member and a supporter of the effort, I was a financial contributor to that cause.)

What it takes is (1) a volunteer to spearhead it, (2) developing consensus for a purpose and a plan, (3) publicizing a request for contributions to fund the effort, (4) adjusting the plan based on how much is raised, (5) engaging the time of volunteers to actively participate in the effort, (6) ensuring that, to retain support, communication to participants in the group is frequent and complete, (7) ensuring that the appointed spokesperson(s) is articulate, is knowledgeable about the issues and has business acumen to understand the opposition's viewpoints and (7) determination of the group to persevere in spite of what will at times seem like insurmountable odds.

Ultimately, to succeed, the effort must focus on asking for a change that Wyndham will see as adversely affecting its profit less so than whatever adverse publicity comes from your effort. Since public corporations are very much accustomed to significant daily criticism, accomplishing that goal will be challenging!


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## wbtimesharer (Jul 6, 2007)

JudyS said:


> I was recently checking out the WMowners (Worldmark Owners') site, and someone there brought up the possibility of Worldmark owners gaining a controlling interest in Wyndham as way of stopping the undesirable changes Wyndham is making in the Worldmark system.   It was also noted that Fairfield owners would have an incentive to band together with Worldmark owners to buy a controlling interested in Wyndham.  I think this is a great idea, but there is no reason to stop with just Worldmark and Fairfield owners.  RCI is owned by Wyndham, too. So, anyone who is unhappy with RCI would have an incentive to get involved with a buyout of Wyndham.
> 
> On the Worldmark forum, it was mentioned that Wyndham has a market capitalization of about $6 billion.  So, to gain a controlling interest, timeshare owners would have to pony up at least $3 billion.  However, my guess is that major changes could be made in Wyndham even if timeshare owners bought only %10-%20 of the company or maybe even less, since many shares are probably held by various institutional owners who don’t get involved  in company governance.
> 
> ...




Ahhhhh, communism or capitalism.   Lets all band together to purchase an exchange company and then all democratically agree how it is to be run.  Comrades unite.

Unfortunately, much like communism, it all sounds splendid until it is put into operation.  Then you have the group of highly knowledgeable step into to set the rules according to what they believe is just and anyone not aligning to those mandates are pushed out of the company or, ahem, "sent to education camp to become sensitived".   

Number one, unless you are buying company stock individually I don't believe that you would be recognized as an owner.  If you buy through a 401k, the plan is seen as the owner and in most cases that would be how most people would procure the stock. 

 Number 2, we can't get a quorum on this site on most topics, coming to terms on how best to manage RCI would be amazingly impossible.

C,  I would love to get a condensed outline from any or all commentators  on this thread  on how exactly they see the proper way to run RCI should be. From my perspective, the holders of premium/high MF would want it to be an exclusive club of only their peers while those who shop for the best cost/best MF sub-premium weeks would want a bit more flexibility on an exchange. 


Well, anyone want to give  a layman definition on what RCI/II/? are doing wrong and how you as the CEO would change it?

Bill


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## Carolinian (Jul 6, 2007)

As timeshare owners, our interest is to protect our ownership.  When the policies of a major timeshare player threatens the future of our ownership, it is time to be concerned and take action.  We are more than just consumers, we are owners of timeshare intersts, which changes the perspective on how we should look at these issues.

If we are renting a hotel room, we really don't care about the long term future of the hotel company unless we own stock in it or something.  Timeshare is different, because we DO own an interest in it.  I think that is the major point you seem to miss.

Airline passengers are somewhere in between.  Due to ff miles, they have more interest in the longterm future of the airline, and specifically its ff program than someone who just rents a hotel room with reference to the hotel company but less than someone who owns a timeshare in respect to exchange companies.  Consumer activism has proven very beneficial to air passengers in recent years.  First, there were the self-styled ''cockroaches'' at USAirways who forced them to back down on customer-unfriendly changes in their ff program in a matter of weeks of consumer activism.  Then there was the more sustained www.saveskymiles.com campagin, which I participated in, that took two years but backed down Delta on some very negative anti-consumer changes in the Sky Miles ff program.  Frequent Flyers have benefited from the activism of those air passengers who took the lead in these campaigns.

Your support of slash and burn policies also seems a bit shortsighted.  Does it really help us vacation better if we get a few fleeting short term gains but kill the golden goose in the process?  That is exactly the way RCI is headed.




PerryM said:


> *As a consumer my job is to maximize the usage of a company’s service/product – it is NOT consumer activism.*
> 
> Consumer activism, like boycotts, lawsuits, trying to take over the company have NO place in being just a consumer.  Once you join in any activism activities you stop becoming a consumer and start to become part of management – a hostile act I might add.  This supposes that the consumer knows more than the management team.  This supposes that the consumer is superior to the company.  This is a lot of supposing.
> 
> ...


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## Carolinian (Jul 6, 2007)

You do not correctly express my position on RCI Points.  I don't like the interface with RCI Weeks, where it moochs off of Weeks inventory, and I personally think it is a crappy exchange program that I would not participate in, but as long as it stands on its own two feet without be a bloodsucking parasite on the back of Weeks, I do not advocate discontinuing it.




"Roger" said:


> One of the things that you are presuming, Judy, is that everyone who is mad at RCI is mad for the same reason.  Lets just take the most obvioius example.  Carolinian is furious about the Points program.  He thinks it needs to be discontinued.  Many of us are quite happy with the Points program.  So now we collectively own a controlling interest in Wyndham.  (15% to 20% would be considered a controlling interest.)  What are we to do about the Points program?  The same could be said about many of the other "grievances" against RCI.  (That would include your own biggest peeve -- whether RCI should have a downward filter or not.)
> 
> About the only area of total agreement would be to say that it would be nice if RCI had better customer relations.  So, we all spend thousands of dollars and vote that they should have better customer relations.  I don't think that this will rally the troups to invest.


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## JudyS (Jul 6, 2007)

Lots of interesting posts here!  I appreciate everyone's input.  I haven't  gotten around to responding to all of the posts here yet -- but I'll try.



PerryM said:


> ...Consumer activism, like boycotts, lawsuits, trying to take over the company have NO place in being just a consumer.  Once you join in any activism activities you stop becoming a consumer and start to become part of management – a hostile act I might add.  This supposes that the consumer knows more than the management team.  This supposes that the consumer is superior to the company.  This is a lot of supposing....
> 
> Capitalism works best if you do what’s best for your particular best interests –screw anyone else.  There is no better way to conduct commerce than Capitalism.  This might sound selfish but show me a better form of commerce – everything else is a miserable flop....
> 
> ...



Perry, I'm sure that the Wyndham management team knows more than I do about what is best for _Wyndham and its shareholders _-- at least in the short term, which seems to be all that Wall Street values.  The problem is, they don't seem to know or care what is best for the _customer_.  They seem to have deliberately adopted the strategy of exploiting the customers as much as possible.  

As for whether capitalism is the best economic system, in general, I'd say yes.  I'm certainly not suggesting that the "people" take over all companies, which power vested in the hands of a Stalin or a Chairman Mao.  However, timesharing -- and shared real estate ownership in general -- seems to be an area where a cooperative model works best.  I suspect this is because timeshare (and other real estate) owners have so much invested in their properties.  After reading many thousands of posts here on TUG, I'd say quite confidently that owner satisfaction is far, far higher when timeshare owners manage their property on a volunteer, cooperative basis (through an owner-elected volunteer HOA) than when a developer manages the property on a for-profit basis. 

Is an elected, volunteer HOA captalism?  No, it certainly isn't.  An HOA is a co-op.  It involves owners getting together and _volunteering _their time to find out about issues, vote, maybe serve on the board.  But, despite the potential "free rider" problem that Yvonne (Timeshare Von) mentions, it seems to work much, much better than when developers manage properties.  I suspect this is because the timeshare owners have more invested, overall, than does the development company.  As an example, Wyndham's Worldmark division seems to be trying to make money by devaluing Worldmark Points.  My guess is, Wyndham might make something like $1 of profit for every $5 worth of Worldmark Points value that they destroy.  That's a big waste -- but Wyndham doesn't own the Worldmark points, so they don't care.  

I suspect a similar reason is why some people would like to see health care "socialized" in this country.  People have more "invested" in their own bodies and health than any insurance company possibly could have.  I'm not trying to start a debate about health care reform; I'm just stating that there are some cases where individuals "owners" (of real estate or the human body) have far more invested than the company that manages the "property" does.  In these cases, relying on a pure profit motive seems to lead to a lot of disastisfaction. 

As for "entertainment" value, I wouldn't call a consumer action _entertainment_, but I'd definitely say it is emotionally driven.  That's why I put "_ 4) A lot of timeshare owners are really, really PO’ed at RCI" _ as one of my reasons why I think this could work.  I'd say it's the biggest reason, actually.

As for starting a new co-op for exchanges, the problem would be building the developer relationships that RCI has, plus many people's banked weeks are tied up with RCI. Actually, I would _love_ to see RCI spun-off and purchased by a bunch of timeshare owners and/or HOAs.  I'm not sure what RCI is worth -- they are only one component of Wyndham -- so this actually might take much less capital than influencing Wyndham as a whole. 

I have some more ideas about co-ops as exchange companies, but I'll put them in my reply to Boca.


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## JudyS (Jul 6, 2007)

Jya-Ning said:


> ....Then you will realize that if you put so much money in the company stock, you will want the company make more money in return.  In this case, you want to protect the sell through developer, you want to get into vacation condo renting which has bigger market then exchange and higher profit margin....



I couldn't quite follow some of the Worldmark numbers you were presenting, Jya-Ning.  But as for whether timeshare owners would care more about maximizing RCI/Wyndham's profits than they do about ending Wyndham's exploitative practices, that depends on how _efficient_ Wyndham's exploitative practices are.  In other words, if Wyndham is really bringing in lots of money for every dollar of value it ruins for owners, than maybe timeshare owners would be OK with Wyndham's policies once they became shareholders.  But, I suspect Wyndham's only making maybe 20 cents bit of money for every dollar of value they take away from owners, as I said in my response to Perry.  For example, suppose an owner gives RCI a week that cost the owner $1000 (in MFs, lost opportunity cost, etc) to obtain.  The owner would like to obtain another $1000 week in trade.  But, rather than giving the owner a trade, suppose RCI rents that week for $500.  The owner has lost $1000; RCI makes maybe a couple of hundred tops after advertising, giving perks to real estate agents for booking that rental, etc.  That's a lot of incentive for timeshare-owner/RCI-shareholders to change RCI's policies.


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## JudyS (Jul 6, 2007)

brennumtimesharer said:


> Ahhhhh, communism or capitalism.   Lets all band together to purchase an exchange company and then all democratically agree how it is to be run.  Comrades unite.
> 
> Unfortunately, much like communism, it all sounds splendid until it is put into operation.  Then you have the group of highly knowledgeable step into to set the rules according to what they believe is just and anyone not aligning to those mandates are pushed out of the company or, ahem, "sent to education camp to become sensitived".
> 
> Number one, unless you are buying company stock individually I don't believe that you would be recognized as an owner.  If you buy through a 401k, the plan is seen as the owner and in most cases that would be how most people would procure the stock....


This was posted as I was writing my last reply.  In that post, I stated that owner-controlled HOAs are "communist", yet they tend to lead to high levels of satisfaction.

I do know of at least one exchange company that was run as a co-op for many years: ORE.  Customer satisfaction was very high.  ORE's MROP program is still an owner-controlled co-op.   I'd say satisfaction with MROP is sky-high compared to satisfaction with RCI, at least judging by comments on TUG. For that matter, _any _ HOA-controlled timeshare with floating weeks can be seen as a sort of "communist timeshare exchange", where owners exchange a share of the resort for a specific week's reservation.  I'd say that satisfaction with reservations obtained from these "communist" (HOA-conttrolled) floating timeshares is higher than satisfaction with the reservations obtained from "captalist" (developer-controlled) floating timeshare such as Starwood or Marriott. 

The issue of different RCI members wanting different things has already been brought up; I'll try to comment on it. 

As for whether ownerships in retirement accounts have voting rights, perhaps one of the many stock-savvy TUGgers here could comment on that?


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## Dave M (Jul 6, 2007)

JudyS said:


> For example, suppose an owner gives RCI a week that cost the owner $1000 (in MFs, lost opportunity cost, etc) to obtain.  The owner would like to obtain another $1000 week in trade.  But, rather than giving the owner a trade, suppose RCI rents that week for $500.  The owner has lost $1000....


I don't follow your reasoning, Judy. The owner's $1,000 is a cost of ownership, not a cost to exchange. That $1,000 is the same for my off-season horrible-trading week as for your prime-season top-trading week at the same resort. What RCI decides to do with your week or my week if we deposit doesn't create a loss. However, any perceived loss of value would be related to the weeks of differing value we get for our respective exchange request. 

Your suggestion that value of an exchange should be based on the level of maintenance fees paid is not supported by the way RCI does or should (IMO) do business. That approach would quickly have many off-season weeks at poorly managed resorts with high fees trading better than prime time weeks at well-managed resorts with lower fees.

That approach is similar to the renter (we have seen many here) who assumes the appropriate asking price for a rental is somehow related to the level of maintenance fees paid!


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## JudyS (Jul 6, 2007)

BocaBum99 said:


> ....The problem with RCI is that it is not really an exchange company the way that we want to think of it.  RCI is really just a vehicle for developers to get fresh meat into their sales presentations.  The reason for that is that a timeshare exchange company is NOT a viable system without FREE deposits coming from somewhere.  Those FREE deposits are from developers with excess inventory who want to use it to attract potential new owners.
> 
> Why is that?  Because timeshare deposits are perishable goods.  They have expiration dates and their is significant spoilage.....
> 
> Like them or not, RCI is taking the right action given how the market is evolving by moving into the direction as a rental company.



I agree that spoilage is a significant problem with timeshares.  However, many other exchange companies seem to manage this problem without incuring the customer fury that surrounds Wyndham/RCI.  There are a few people angry at II -- but very few, compared to RCI.  And, as I was just saying, ORE was run as a co-op for many years, with weeks only from HOA-controlled resorts (so, no developers involved)  and yet you hear nothing but praise for it on these boards. 

How do exchange companies get around the spoilage problem?  Well, a lot of owners never get around to reserving anything with their weeks, which I imagine is the main answer.  Reducing trade restrictions at the last minute to get owners to use up banked credits is another.  You can see how much spoilage there is by looking to see how many weeks are left a few days before check-in.  At a good exchange company, it won't be many. 

Also, exchange companies can buy inventory with their exchange fees and dues.  RCI is getting what? Maybe $89 in membership fees and $174 in exchange fees from the typical owner who makes a trade with them?  If, say, one out of 10 deposits expires unused, then that's $2630 they've taken in for 10 trades.  RCI can take some of that money and buy some inventory somewhere -- _can_, but presumably doesn't. 

I don't have a problem with RCI handling rentals, as long as RCI isn't renting out exchange inventory, thus depriving owners of the exchanges they are entitled to.  Unfortunately, I (and many others) think that is exactly what RCI is doing.


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## JudyS (Jul 6, 2007)

Dave M said:


> I don't follow your reasoning, Judy. The owner's $1,000 is a cost of ownership, not a cost to exchange. That $1,000 is the same for my off-season horrible-trading week as for your prime-season top-trading week at the same resort. What RCI decides to do with your week or my week if we deposit doesn't create a loss. However, any perceived loss of value would be related to the weeks of differing value we get for our respective exchange request.
> 
> Your suggestion that value of an exchange should be based on the level of maintenance fees paid is not supported by the way RCI does or should (IMO) do business. ...


Let me clarify what I meant, Dave.  I don't actually think purchase price or MFs should necessarily have anything to do with exchange value.  In fact, I'm always looking for cheap timeshares that exchange well!

What I meant was this.  Suppose there is a week that is worth, in _some objective sense_, $1000.  Perhaps that's what that week would be worth on the open rental market.  If an owner deposits that week with RCI, they've given RCI an asset worth $1000.  If RCI takes that week and rents it out for say, $500 to a non-timeshare owner and gives the timeshare owner nothing in return, then the timeshare owner has lost an asset worth $1000.  RCI has not, however, made $1000 in profit.  In fact, RCI likely hasn't made even $500 in profit.  I'd guess RCI would make maybe $200 or $300 in profit, after all their marketing costs.  

So, my point here is that RCI's policies are leading to a lot of inefficiencies (assuming that RCI really is renting out deposits, which I suspect that they are.)  RCI makes maybe $200 in value after reducing a timeshare owner's assets by maybe $1000.  Similarly, I expect that Worldmark will make far less than $1 in profit for every $1 in value that they destroy in Worldmark Points value, because Worldmark has all those marketing costs (and acquiring all those condos in Galena, IL has to cost _something_.)   

In this case, timeshare owners, collectively, are losing far more than Wyndham is gaining.  The timeshare owners, collectively, therefore have more incentive to stop Wyndham's exploitative practices than Wyndham has to keep those practices going.  

But, can timeshare owners organize to represent their common interests?  That's the question!


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## JudyS (Jul 6, 2007)

"Roger" said:


> One of the things that you are presuming, Judy, is that everyone who is mad at RCI is mad for the same reason.... (That would include your own biggest peeve -- whether RCI should have a downward filter or not.)
> 
> About the only area of total agreement would be to say that it would be nice if RCI had better customer relations.  So, we all spend thousands of dollars and vote that they should have better customer relations.  I don't think that this will rally the troups to invest.


I don't recall ever complaining about RCI's downwards VEP filter, and my only RCI Weeks trader has low VEP.  Maybe you are confusing me with someone else?  In general, I know some people are frustrated with RCI's downwards filter, but hardly anyone gets worked up about it, unlike with some other RCI issues. 

True, not every RCI member will agree on what needs to be changed.  But, this also goes for other areas of timeshare ownership -- not everyone in an HOA agrees on whether granite countertops are worth the money, yet most HOAs manage to function.

My number one proposed change for RCI would be a guarantee that deposits would be available for exchanges, rather than going to rentals.  Number two would be some sort of brakes on fee increases.  (I actually feel these changes would help RCI's long-term viability, too.)  I suspect not many RCI members would object to these changes.


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## Dave M (Jul 6, 2007)

JudyS said:


> If an owner deposits that week with RCI, they've given RCI an asset worth $1000.  If RCI takes that week and rents it out for say, $500 to a non-timeshare owner *and gives the timeshare owner nothing in return*, then the timeshare owner has lost an asset worth $1000.


The bold part is where you lose me, Judy. You have twice suggested that the timeshare owner gets nothing in return for your example. That's what exchanges are about - getting _something_ in return! There's no way I will get nothing in return, unless I simply have no understanding as to how the system works. And that would be my own fault. 

I believe your example - if you hope to drum up support - should reflect reality.


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## JudyS (Jul 6, 2007)

Carolinian said:


> As timeshare owners, our interest is to protect our ownership.  When the policies of a major timeshare player threatens the future of our ownership, it is time to be concerned and take action.  We are more than just consumers, we are owners of timeshare intersts, which changes the perspective on how we should look at these issues.....


Right!  That is *exactly* the point I am trying to make! 





Dave M said:


> ....The more likely way to some partial success would be a relatively low-cost publicity and contact campaign along the lines of the very successful Save SkyMiles effort that Steve (Carolinian) refers to. (As a Delta Platinum elite member and a supporter of the effort, I was a financial contributor to that cause.)
> 
> What it takes is (1) a volunteer to spearhead it, (2) developing consensus for a purpose and a plan, (3) publicizing a request for contributions to fund the effort, (4) adjusting the plan based on how much is raised, (5) engaging the time of volunteers to actively participate in the effort, (6) ensuring that, to retain support, communication to participants in the group is frequent and complete, (7) ensuring that the appointed spokesperson(s) is articulate, is knowledgeable about the issues and has business acumen to understand the opposition's viewpoints and (7) determination of the group to persevere in spite of what will at times seem like insurmountable odds.
> 
> Ultimately, to succeed, the effort must focus on asking for a change that Wyndham will see as adversely affecting its profit less so than whatever adverse publicity comes from your effort. Since public corporations are very much accustomed to significant daily criticism, accomplishing that goal will be challenging!


Thanks for your input, Dave. I suspect one huge factor influencing the likehood of success of  a "negative publicity campaign" is just how much Wyndham's exploitative timeshare practices are contributing to Wyndham's bottom line.  Wyndham doesn't just have timeshare businesses (and presumably, they don't always exploit their customers.)  So, it could be that, say, forbidding any rentals of RCI exchange deposits and stopping Worldmark from selling any more timeshares in places such as Galena would impact Wyndham's bottom line only a little, whereas the anger of timeshare owners might affect Wyndham's bottom line a lot more.  If Wyndham gets a bad name, it could affect their many hotel brands, not just their timeshares.  

This may be similar to the reason some airlines listened to their FF members.  People who make effective use of FF miles are probably a small fraction of airline customers, but some of them cared a lot about their FF miles, and they made "noise" that would have affected the less committed customers' business, as well. 

Another approach might be if timeshare owners got together and offered to buy RCI from Wyndham.  If the offer was more than what Wyndham felt RCI was worth, it would be to Wyndham's advantage to accept.  How much would this cost?  Maybe a lot less than the one billion I was saying earlier, but without a lot of time spent looking at Wyndham's disclosures, I really couldn't guess.  A similar approach could be tried for gaining control of Worldmark; that might have more chance of success, because Worldmark owners have a lot more of a vested interest than RCI traders do. 

Well, I've spent most of the day on this.  I need to go get some dinner and do some other stuff!  Thanks to everyone who posted!


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## JudyS (Jul 6, 2007)

Dave M said:


> The bold part is where you lose me, Judy. You have twice suggested that the timeshare owner gets nothing in return for your example. That's what exchanges are about - getting _something_ in return! There's no way I will get nothing in return, unless I simply have no understanding as to how the system works. And that would be my own fault.
> 
> I believe your example - if you hope to drum up support - should reflect reality.


OK, *one* more post before dinner!

Dave, I think we probably differ on the issue of whether RCI is taking owners' deposits and renting them out, therefore leaving some depositers with no trades.  I believe that RCI is, in fact,  doing this.  Perhaps you don't.  If I was certain that RCI wasn't renting out deposits, most of my complaints against RCI would go away. 

Frankly, if I deposited a week that had some sort of objective value of $1000, and RCI offered me, say, an inland Texas unit that had a rental value of maybe $300, I would consider that getting nothing.  It's not like RCI is going to pay my airfare to Texas, and I'm not going to shell out hundreds of dollars and waste a week of my life to stay someplace I don't want to go.  Instead, I'd let the deposit expire unused, because the offered trade has zero value to me.

Now, it may well be the case that RCI never offers just an undesirable inland Texas unit to someone whose timeshare has a rental value of $1000.  Instead, they may offer a timeshare that would rent for $750 to the owner of the timeshare that would rent for $1000, a $500 timeshare to the owner of the $750 timeshare, a $250 timeshare (these are all rental values) to the owner of the $500 timeshare, and a timeshare that couldn't be rented for anything at all to the owner of the timeshare that would rent for $250. Theoretically, all of these owners were offered *something*, yet RCI removed $1000 of value from them.

My original point was that RCI appears to be removing value from timeshare owners in order to obtain a profit far smaller than the value it removed.  I still believe that to be the case, but I probably should have given a clearer and more detailed example, rather than the quick, over-simplified one that I dashed off.


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## "Roger" (Jul 6, 2007)

JudyS said:


> I don't recall ever complaining about RCI's downwards VEP filter, and my only RCI Weeks trader has low VEP.  Maybe you are confusing me with someone else? ...


Apparently I am.  My apologies.


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## johnmfaeth (Jul 6, 2007)

But having spent all that money to takeover RCI, wouldn't we want to make every penny we could and become them?


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## timeos2 (Jul 6, 2007)

*Points and week advocates shall live in harmony as well*

So far a few thousand owners at Summer Bay in LV can't agree to take a new resort in exchange for a run down one (making a major decision very simple by ignoring all the legitimate questions around that offer). And we're going to get tens of thousands of timeshare owners to 
1) agree to buy into Wyndham and 
2) agree how the exchange system(s) should operate?  

Whoa, I want to be at those Board meetings .  

To give a simple answer, no, it's never going to happen. Makes an interesting topic though.


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## taffy19 (Jul 6, 2007)

Some of us remember the old RCI Company with their space bank which was in benefit of the RCI members only.  I believe, it was a fair system too.  It worked well for us many years ago and we were always happy with the exchanges we made.

At that time, you exchanged in your own season and red exchanged for red, white for white and blue for blue.  Only in the last 45 days (I believe it was) anyone could exchange for anything on a first come, fist serve basis.  That's when you could pick up a larger unit or in a better season too than what you owned.

This was all before the point system started and before they added airline tickets, cruises or whatever else is getting thrown in that pot today.  I doubt if it is in the benefit of the RCI members now but more for the benefit of the company who took over RCI.

I am sure that some other longtime timeshare owners remember the good old days of RCI and the fair exchanges they made.  All I read mainly now is that people are unhappy and can't get what they want but they see it for rent.   

Why still use RCI if there are alternatives?  If nobody gives them a week, they have nothing to rent and they cannot pilferage your precious vacation time.


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## timeos2 (Jul 6, 2007)

*Red gets red, white gets white. Thats fair*



iconnections said:


> Some of us remember the old RCI Company with their space bank which was in benefit of the RCI members only.  I believe, it was a fair system too.  It worked well for us many years ago and we were always happy with the exchanges we made.
> 
> At that time, you exchanged in your own season and red exchanged for red, white for white and blue for blue.



Emmy - There's one of the rubs. As I recall it used to be that way - color for color until the 45 day mark. Long before points or rentals they started the mysterious adjustments that allowed the big upgrades in quality, location and season - thats when the system began to implode. If they still made blue trade for blue, etc, the weeks system would at least have some chance at fair and equal trades. Instead it became a dumping ground for bad weeks to get free upgrades on the backs of the better time owners.  Thus started the lack of good trades for them, which meant less deposits of the best weeks, which meant less upgrades - add in the mini's siphoning off the newest and then the Internet and easy rentals, its easy to see why the "golden years" are behind RCI and weeks.  The genie will never be put back in th bottle.


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## "Roger" (Jul 6, 2007)

I guess not everyone was as enthusiastic about the old system as you are Emmy.  When I bought, I could not find a single timeshare owner who thought that I was doing the right thing.  Dissatisfaction ran deep.  When I first joined TUG, the figure that was commonly cited was that 25% of the deposits into RCI went unused.  That squares with the dissatisfaction that I experienced talking to owners I could find.


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## Jya-Ning (Jul 6, 2007)

Carolinian said:


> As timeshare owners, our interest is to protect our ownership.
> ...
> 
> Airline passengers are somewhere in between.  Due to ff miles, they have more interest in the longterm future of the airline,


Carolinian:

I believe if you are exchanger, you will more like between ff miles passenger and renter than ff miles paaenge and owner.  For 2 reasons
1) your deposit do expired in 2 or 3 year
2) you have no obligation to use RCI (unless you are FF owner)

I do agree your 1st sentence.  Therefore I believe as owner, if you saw a good future in the company, and good price to buy, it maybe wise to own a piece of the TS company.

You say the timeshare value is depended on an exchange company?  I can tell you, there are now II, DAE, SFX, Trading place, HSE, if RCI went to tube, they will gladly to take over the market share.  It is more depends on the developer first.  If RCI no longer exists, FF can try to trade with ORE or CI, or WM, or Shell directly



JudyS said:


> I couldn't quite follow some of the Worldmark numbers you were presenting, Jya-Ning.



You have talking different alleys.  To achieve different things.  Let first concentrate on owner take over the company, because this combination, they wll have more to gain.

So there are total 800k owners.  It is composed by WM, FF, PAHIO, Equivest, PSE, and some week system that start with the old Fairfield resort and Shawnee owners.  I start with WM owners, since it has board election, and PA has tried to push it.  And assume any vote that did not vote for WYN backer is a potential owner that will want to join this goal, you get 30k owner.  Use the similar number, you are looking at 80k owners now.  So each will need to pay $7,500



JudyS said:


> But, I suspect Wyndham's only making maybe 20 cents bit of money for every dollar of value they take away from owners, as I said in my response to Perry.



I believe Carolinian has made a suggestion when talk about class action, he suggestion *to bring the issue to a state AG*.  That will be more easy to get done.  Also, both he and Boca suggest there should have some public disclosure about the exchange company.  It is much easier to go through a comsumer protect route.  *I believe this way, no matter what exchange company becomes the leding exchange company, you can still get better protection as a consumer*



JudyS said:


> For example, suppose an owner gives RCI a week that _can be valued to _the owner $1000 (in MFs, lost opportunity cost, etc) to obtain.  The owner would like to obtain another $1000 week in trade.  But, rather than giving the owner a trade, suppose RCI rents that week for $500.  The owner has lost $1000; RCI makes maybe a couple of hundred tops after advertising, giving perks to real estate agents for booking that rental, etc.  That's a lot of incentive for timeshare-owner/RCI-shareholders to change RCI's policies.




When I say rent is more profit, I believe you now look at wrong approach (sorry I change some of your wording, I believe that is what you mean after I red your following up discussion with Dave.)

Say Marriott, if the owner gives them a week, it will charge a % to rent it.  I believe the resort I heard range from 20% to 60%.  If the week can be rent easily, it will be fetch $200 to $600 for RCI.  They don't have to cheat their way out, they can just upfront to be a renting company.  If for some reason RCI put it for rent to general public, if it really can fetch back $1000, why they want to just rent $500.

I also found interesting that you mention rent value, as well as Carolina and Boca.  No, I don't believe rent value is right index.  If anything close to it, maybe RevPAR which is the asking price * chance of get rent.  However, I also don't think it is right index.  Because if you are talking about TS, the owner already prepaid the MF, so it is use it or loss it.  They now give it to exchange company, so they have 2 or 3 more years to use it.  So exchangewise, it should have different value.  A normal rent charge $300 a night unit put into exchange pool will value much less than $300 a night, even if it always get rent out.  It will be gone after the day of it usage.  It maynot get too many request since it seldomly get put in because people don't think they can get it, or because it put in late.  A $400 a night unit, that usually get 50% taker may have the same value or higher as $300 a night 100% taker in exchange, since in exchange pool, they may have the same% of get exchanged.  A $100 per night unit, that has 80% chance get rented may have more people expect to exchange to it, and ask for it.  The biggest difference is when renting you need to actually reach your pocket to come out the payment.  Exchange you usually already pay the underline week, so the valuation will be different.  

If I use $200 MF worth a week take a $1000 MF worth a week through exchange, will you claim RCI damage the value?  Or if replace MF to rent value or to RevPAR?   It is perfect week to week system.   Yet, I don't believeanyone will say it is a fair system.

Just look at RW, it come out a valuation, and none is satisfied.  

If you plan to have exchanger to buy RCI, why not have exchanger form its own company, and put a few simple rules of exchange.  After all, the believe is RCI take out the exchanger's deposit good week, and left the undsirable week there.  You can certainly find a lot of owners that are very good programmers to come out a great exchange program to satisfy everyone's need.  Why buy RCI?  This route is much cheaper.

Could RCI made some bad move, yes, I agree.  Could RCI doing something unethnic?  Don't know, but it does not need to buy or owning them to force them to change.  There are much easy way to do it.

It is much easy look at their business model, and come out a better one.  Since 80% of the stock are hold by institution, you can easily get the current manager boot.

Also, at this moment, I believe the TS give WYN most income, the hotel 2nd, the exchange/renting 3rd.  But each provide the same profit or very close one.  So Carolina's Airline model approach is very effective.


Jya-Ning


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## taffy19 (Jul 6, 2007)

timeos2 said:


> Emmy - There's one of the rubs. As I recall it used to be that way - color for color until the 45 day mark. Long before points or rentals they started the mysterious adjustments that allowed the big upgrades in quality, location and season - thats when the system began to implode. If they still made blue trade for blue, etc, the weeks system would at least have some chance at fair and equal trades. Instead it became a dumping ground for bad weeks to get free upgrades on the backs of the better time owners. Thus started the lack of good trades for them, which meant less deposits of the best weeks, which meant less upgrades - add in the mini's siphoning off the newest and then the Internet and easy rentals, its easy to see why the "golden years" are behind RCI and weeks. The genie will never be put back in th bottle.


John, was that before RCI was sold? We only made exchanges the first few years because we didn't have the money to go to HI every year so we exchanged to places in driving distance.

Only a few years ago, did we receive a few upgrades that everybody is writing about and we never asked for them either. We got 2 br units at several locations we went to. 

We haven't done any exchanges in the last few years as we like to go to the locations where we own. I would try renting first or a direct exchange before I would put it in RCI today. I also would try the Independents next if I had to make an exchange.


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## timeos2 (Jul 6, 2007)

*It stopped working so I stopped using it. Simple*



iconnections said:


> John, was that before RCI was sold? We only made exchanges the first few years because we didn't have the money to go to HI every year so we exchanged to places in driving distance.
> 
> Only a few years ago, did we receive a few upgrades that everybody is writing about and we never asked for them either. We got 2 br units at several locations we went to.
> 
> We haven't done any exchanges in the last few years as we like to go to the locations where we own. I would try renting first or a direct exchange before I would put it in RCI today. I also would try the Independents next if I had to make an exchange.



I seem to recall the "adjustments" to trade value preceded the sale of RCI by at least a few years. The seeds had been planted that allowed the buyer to see dollar signs where there were simply trades before.  As the system grew it would have been almost impossible to depend on three simple colors to adequately cover the myriad of possible trades - 1, 2, 3 bedrooms, ranked and unranked, highly seasonal and mildly seasonal - I can see the need to adjust values in an attempt to balance out the value of two seven day use periods in completely different areas. The secretive system that they chose to use was the path to suspect rentals. We didn't know what the values were so how could we question if they were fair or bogus in declaring trades unequal and thus creating "unclaimed" time to rent?  Once the door was opened I'm sure they saw easy money and we see where that landed us now. I'll agree with Carolinian that points partners and cruise exchanges added to the opportunity to claim time to rent but they didn't cause the problem they merely added to it. 

Emmy I'm 100% with you. I buy what I want to use and I trade only with organizations I feel I can trust or at least monitor adequately to ensure a fair trade. RCI weeks hasn't seen any of my deposits since 2000 and most likely never will again.  I don't understand why those that feel they are being cheated would continue to place weeks with the company they feel is cheating. Makes zero sense to me.


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## wbtimesharer (Jul 6, 2007)

JudyS said:


> This was posted as I was writing my last reply.  In that post, I stated that owner-controlled HOAs are "communist", yet they tend to lead to high levels of satisfaction.
> 
> I do know of at least one exchange company that was run as a co-op for many years: ORE.  Customer satisfaction was very high.  ORE's MROP program is still an owner-controlled co-op.   I'd say satisfaction with MROP is sky-high compared to satisfaction with RCI, at least judging by comments on TUG. For that matter, _any _ HOA-controlled timeshare with floating weeks can be seen as a sort of "communist timeshare exchange", where owners exchange a share of the resort for a specific week's reservation.  I'd say that satisfaction with reservations obtained from these "communist" (HOA-conttrolled) floating timeshares is higher than satisfaction with the reservations obtained from "captalist" (developer-controlled) floating timeshare such as Starwood or Marriott.
> 
> ...





I am not sure how you can prove or I can disprove that the majority of owners are happier in a HOA-controlled versus Developer controlled resort as I would imagine that every resort varies.  Developer control in many resorts exist because they have inventory that is still unsold or they are actively developing the resort.  I would say the amenities in these types of resorts probably are better as they are  marketing tools and as there is active revenue to build them.

Running a resort is a business  and resorts belonging to a publicly held company are responsible not only to the owners at the resort but also to the shareholders seeking a return on their investments usually via dividends or increased stock price. 

 I think you are right in regards to sold out/completed independent resorts in that they are controlled by the owners and are only responsible to provide them with a return on investment.  That is usually through keeping the resort in shape and keeping MF's under control.

Bill


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## JudyS (Jul 6, 2007)

Ok, I'm back!

I ate dinner.  Oh, and I bought a timeshare on eBay.  :whoopie:  Ah, "another day, another timeshare."  




johnmfaeth said:


> But having spent all that money to takeover RCI, wouldn't we want to make every penny we could and become them?


Yeah, Jya-Ning mentioned that, too.  My main answer here is that I suspect Wyndham isn't being efficient at all when it comes to "draining" value from timeshare owners and turning it into Wyndham profits -- my guess was that a dollar of value lost to timeshare owners is only maybe 20 cents profit to Wyndham.  If timeshare owners could somehow take over Wyndham, they would come out ahead as long as stopped this practice. 


Roger, not a problem at all!





timeos2 said:


> So far a few thousand owners at Summer Bay in LV can't agree to take a new resort in exchange for a run down one (making a major decision very simple by ignoring all the legitimate questions around that offer). And we're going to get tens of thousands of timeshare owners to
> 1) agree to buy into Wyndham and
> 2) agree how the exchange system(s) should operate?
> 
> ...


John, did that Summer Bay deal fall through?  I thought it was going ahead, last I heard. 

As for whether we could ever get owners to agree on how things should operate, I have absolutely no experience in governance of publicly traded companies, but I assume that members would elect someone to the Board whom they felt represented their interests, or give proxies to someone they trusted.  It works for other groups, and for timeshare HOAs, so why not here?

Could we actually get enough timeshare owners to buy Wyndham stock?  Based on the responses here, it doesn't seem likely.  Too bad.


----------



## JudyS (Jul 6, 2007)

Jya-Ning said:


> ...So there are total 800k owners.  It is composed by WM, FF, PAHIO, Equivest, PSE, and some week system that start with the old Fairfield resort and Shawnee owners.  I start with WM owners, since it has board election, and PA has tried to push it.  And assume any vote that did not vote for WYN backer is a potential owner that will want to join this goal, you get 30k owner.  Use the similar number, you are looking at 80k owners now.  So each will need to pay $7,500....


Thanks, Jya-Ning, I think I understand now. You aren't talking about RCI members trying to take over Wyndham, you are talking about Wyndham timeshare owners (Fairfield, Worldmark, Pahio, etc) trying to take over Wyndham. You are saying that there are 800,000 people (or couples, or whatever) who own timeshares that are managed by Wyndham companies, right? So, if 10% of those people were willing to buy Wyndham stock, that 10% would have to buy $7500 stock each, on average, in order to buy $6 billion of Wyndham stock, which is Wyndham's current market capitalization.

I agree that getting 10% of all Wyndham owners to each buy $7500 of Wyndham stock and own the whole company would almost certainly be impossible.  However, only half that much needs to spent to get a controlling interest in the company, and I suspect much less than that would be needed to be a powerful voting block.  Are 10% of Wyndham owners angry enough to each buy, say, $1500 of Wyndham stock?  I don't know.  But if I were a Worldmark owner I sure would be, and if I were a Fairfield owner, I probably would buy Wyndham stock merely to hedge my bets. 

I agree with you, Jya-Ning, that owners of Wyndham timeshares have much more at stake than RCI members do.  Still, I think some RCI members feel strongly about this issue, and would be interested in "buying in" if owners of Wyndham timeshares were trying to influence Wyndham. 



Jya-Ning said:


> ...I believe Carolinian has made a suggestion when talk about class action, he suggestion *to bring the issue to a state AG*.  That will be more easy to get done.  Also, both he and Boca suggest there should have some public disclosure about the exchange company.  It is much easier to go through a comsumer protect route.  *I believe this way, no matter what exchange company becomes the leding exchange company, you can still get better protection as a consumer*


I have nothing against those ideas.  There is no reason why they couldn't be pursued at the same time as my idea of buying stock.  I should point out, though, that I haven't been too happy with how class action consumer suits have worked out in the past. 



Jya-Ning said:


> ...When I say rent is more profit, I believe you now look at wrong approach ...If for some reason RCI put it for rent to general public, if it really can fetch back $1000, why they want to just rent $500.


I figured someone would ask that soon!

I suspect that, if RCI is indeed renting out deposits (and I suspect that they are), they aren't getting the true value of those deposits.  I see two reasons for this. 

First, RCI would need to be secretive about what they are doing, which would interfere with getting top dollar for their rentals.  Take, for example, RCI's rentals to people who are in (or have been in) the US armed forces.  Many members here think this is a way to rent out member deposits, while forestalling criticism by pretending to perform a public service.  However, in order to appear to be performing a public service, RCI needs to price its rentals to the military at below true market value. 

Second, the market for timeshare rentals isn't that well developed.  Suppose, for the sake of argument, that there is some sense in which a particular week's stay has a "true value" of $1000.  (For example, maybe in an efficient market, it would cost a timeshare owner $1000 in MFs & opportunity costs to get that week.  This was what I was trying to get at when I said that perhaps the week "cost" $1000, but I wasn't clear.)  Will RCI get the full $1000 by renting that week out?  Probably not, because at the current time, the timeshare rental market is definitely not efficient and timeshare rentals are really not that well known.  The "best and highest use" of a deposited timeshare week will generally be as an exchange for another timeshare deposit.  That isn't what would make RCI the most money, though. 



Jya-Ning said:


> ...I also found interesting that you mention rent value, as well as Carolina and Boca.  No, I don't believe rent value is right index....


Well, my argument really doesn't hinge on the right method to value a week of timeshare.  One method I just proposed is what the timeshare usage would cost to acquire in an efficient market.  Another would be what the timeshare would bring in as a rental.  Perhaps neither method is perfect, but for the sake of my argument, it doesn't matter. 

Let me try to make my point a different way.  I think we are all agreed that some weeks of timeshare stay are worth more than others.  Week 27 in a 2-bdrm on the Southern California coast is worth far more than Week 40 in a studio in inland Texas, as one example.  Many people suspect that RCI is "skimming" the most valuable timeshare stays from the deposit pool, renting them out, and offering RCI members less valuable stays instead.  Assuming that RCI is really doing this (which I believe that they are), then RCI is removing value from their members owners, and trying to turn this value into profit for Wyndham.  My point is that RCI is very unlikely to be able to do this efficiently, and I suspect they are getting only something like 20 cents of profit for every dollar of value that timeshare owners lose.  This inefficiency means RCI members have more to gain from stopping the rentals of deposits than RCI has to lose.  



Jya-Ning said:


> ...If I use $200 MF worth a week take a $1000 MF worth a week through exchange, will you claim RCI damage the value?  Or if replace MF to rent value or to RevPAR?   It is perfect week to week system.   Yet, I don't believeanyone will say it is a fair system.
> 
> Just look at RW, it come out a valuation, and none is satisfied.....


I'm not asking RCI to come up with a system where each exchange is an exact like-for-like trade.  Certainly, for one person to trade up, someone else will have to trade down (unless developer weeks are injected into the system.) What I'm concerned with is that RCI may be skimming off the most valuable weeks, so that _on average_, members receive trades down. 

I've seriously considered giving one or more weeks to Redweek.  If I were sure that they wouldn't rent out members' deposits, I would probably go ahead and do it. 



Jya-Ning said:


> ...If you plan to have exchanger to buy RCI, why not have exchanger form its own company, and put a few simple rules of exchange. .....


I gave my reasons in post #17:
_As for starting a new co-op for exchanges, the problem would be building the developer relationships that RCI has, plus many people's banked weeks are tied up with RCI._



Jya-Ning said:


> ...Also, at this moment, I believe the TS give WYN most income, the hotel 2nd, the exchange/renting 3rd.  But each provide the same profit or very close one.  So Carolina's Airline model approach is very effective.....


Very interesting -- can you tell me where you are getting this information on revenue and profit?



Jya-Ning said:


> ...Since 80% of the stock are hold by institution, you can easily get the current manager boot......


Now it sounds like you agree with me, Jya-Ning!


----------



## JudyS (Jul 6, 2007)

By the way, can anyone here answer the question (raised in post #14) of whether shareholders who purchase an individual stock with their IRA or 401k have voting rights?  My guess is that at least IRA buyers would -- don't know about 401k buyers. 



brennumtimesharer said:


> I am not sure how you can prove or I can disprove that the majority of owners are happier in a HOA-controlled versus Developer controlled resort as I would imagine that every resort varies.  Developer control in many resorts exist because they have inventory that is still unsold or they are actively developing the resort.  I would say the amenities in these types of resorts probably are better as they are  marketing tools and as there is active revenue to build them.... I think you are right in regards to sold out/completed independent resorts in that they are controlled by the owners and are only responsible to provide them with a return on investment.  That is usually through keeping the resort in shape and keeping MF's under control...


My point here was just that HOA control seems to work quite well for completed resorts, despite its volunteer nature.  When developers try to retain control after a resort is sold out, there seems to be far more complaints, at least here on TUG.  So, we seem to be pretty much in agreement here.  



timeos2 said:


> .... I buy what I want to use and I trade only with organizations I feel I can trust or at least monitor adequately to ensure a fair trade. RCI weeks hasn't seen any of my deposits since 2000 and most likely never will again.  I don't understand why those that feel they are being cheated would continue to place weeks with the company they feel is cheating. Makes zero sense to me.


I should probably clarify that I didn't start this thread because I, personally, felt cheated by RCI.  I started timesharing just a few years ago, and the warnings about RCI were already out there.  I've never done much with RCI Weeks. Currently, all I have on deposit with RCI Weeks is a couple of banked weeks that came with a timeshare I bought, and I just assumed that those banked weeks wouldn't have much value.  I have some RCI Points, but I can always get Disney tickets for those that are worth more than my MFs, so I'm good.  I haven't seriously considered purchasing Worldmark or FF points, largely because I don't trust Wyndham (and before them, Cendant.) 

So, why did I bring this up?  Because I think it would be wonderful for timeshare owners as a whole. And as I've said, I think timeshare owners have a whole lot more to gain than Wyndham would stand to lose.  It seems like such a waste for timeshare owners to stand by and let Wyndham destroy so much of their value. So, I was interested in hearing people's ideas of whether this could work, and if not, why not.  

What do I think now?  Well, I still think this _could_ work, if enough people were enthusiastic about it.  However, most people on this board aren't.  So, maybe Worldmark or Fairfield owners would be a better group to try something like this, and perhaps they would have to set their sights lower, such as Steve's and Dave's idea of making noise at shareholder meetings.  Would I be willing to spearhead such a campaign?  No, because I have very little riding on what RCI does.  But if someone else were to start such a campaign, I'm in.


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## wbtimesharer (Jul 6, 2007)

JudyS said:


> I agree that spoilage is a significant problem with timeshares.  However, many other exchange companies seem to manage this problem without incuring the customer fury that surrounds Wyndham/RCI.  There are a few people angry at II -- but very few, compared to RCI.  And, as I was just saying, ORE was run as a co-op for many years, with weeks only from HOA-controlled resorts (so, no developers involved)  and yet you hear nothing but praise for it on these boards.
> 
> How do exchange companies get around the spoilage problem?  Well, a lot of owners never get around to reserving anything with their weeks, which I imagine is the main answer.  Reducing trade restrictions at the last minute to get owners to use up banked credits is another.  You can see how much spoilage there is by looking to see how many weeks are left a few days before check-in.  At a good exchange company, it won't be many.
> 
> ...



I really like the idea of exchange companies opening up the gates and allowing any exchange for unused inventory say 30 days from checkin.  In renting, I get a lot of rentals 1 to 2 weeks prior to checkin which indicates that many vacations either exhibity flexibility or are serious procrastinators.  I just pulled a prime summer week from RCI points 3 weeks prior to checkin with 8000 points.  Were RCI to place the full poin value right up to checkin there would be a lot of inventory going unused.  In my opinion, that provides a value to me a member of RCI.

As for exchange company doing rentals, my opinion is that the only way not to step on its exchange customers is not to rentals at all. However, I think that could also lead to a lot of left over inventory and I hate seeing inventory go to waste.  Besides, there is an economic benefit not only to the resorts but to the local economy to have these units utilized.

I think, much like the hated postcard companies, that exchange companies provide a much needed benefit to all timesharers that enriches the timesharing experience.  They, just like all of us and of course the resorts, require income to survive.  Since a good number of the major players don't actually own resorts, they make their income off of exchanges, membership fees and rentals.  

I think Tug is a great place to allow timeshare owners to discuss these organizations and what they are doing right and wrong.  It appears that these organizations are aware of Tug like groups and realize that they are being watched.  Hopefully it will help to make the right decisions when changing their business model.

Bill


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## Jya-Ning (Jul 6, 2007)

JudyS said:


> I have nothing against those ideas.  There is no reason why they couldn't be pursued at the same time as my idea of buying stock.  I should point out, though, that I haven't been too happy with how class action consumer suits have worked out in the past.



Sorry I confused you. Go through with state AG has nothing to do with class action, it just mentioned in a thread talk about class action.  I don't know anything about class action.  But Carolina's state Ag argument is quite pursuade.



JudyS said:


> Now it sounds like you agree with me, Jya-Ning!



No, I believe the easiest way for anyone that want to take over Wyn is talk to a institution holder, and if they have enough good idea, it will get kicked.  It is much easier to find one to agree with you.

However, I really fail to see why some one want to take over RCI.  for merely 2 reasons like tied with developer and there are member deposit if they can find enough owners willing to pony up the money to take over a company.  The deposit most is 4 years life.  You can buy these deposits out instead of the whole company if you really want, or leave it there, so RCI is just another exchange company.  And if most owners don't go with RCI, the developers especially the small ones will go with whoever give them the most benefits.  Which mean whoever can help them sell most of their inventories.

If you can not see 10% of TS owners to buy Wyndham, how you can see enough exchangers to agree to buy Wyndham?

As to renting, not try to defend RCI, but ever think what can you do to rent a TS which you have no idea if it will get deposit or not this year, or if it deposit, if it come at 1 wk or 5 month?  Try to manage that.  IMHO, the owner of Disney, and Marriott, and Fairfield ... where the company has openly rent out their TS should be the one to claim fault, these company controls inventory and they are much easier to make the renting working then any exchange company.

Wyn as public trading company, has to file annual report and quarterly report to SEC.  And if you really have any interesting in looking at detail, you can find them through any stock site using symbol WYN.

The whole point I wrote is to say there is no good TS value indicator for an exchange week at this moment.  Nothing that most people will agree on.  Everyone probably will agree that a summer beach week should be value high then a winter beach week, but there is no indicator how high.  *Now is the argument*, if I can use one week to get your week, it is valued the same in the system that doing the exchange.  If they are valued the same in that system, RCI can pull any week they want and replace with anything that can get to that week and it is a fair trade as long as it pass the same exchange test requirement.  It may not survive in real world, and that is the reason people think they get a trade up or down, and people things RCI cheat on us.  There should be no trade up or down in a exchange system even if the real money go through hand.  *As long as you come something that can get another, it is a fair trade in that system*

I never doubt it is doable for any TS owner to take over WYN.  I am pretty sure it will not do any good for exchanger no matter who took over.  No matter how good intention and integrate the person is, if there is no third neuture party monitor and check balance, it will fail.  * To me, it is better to find out the most important index and demand these exchange company to make it available*, so either you can monitor the exchange process much easier to make sure no matter how they do it, the exchange inventory is used by exchangers, or allow the exchanger a reasonable idea the health of an exchange company, and the reasonable expectation about their value system and chance of exchange succeess rate.  *To me, I would rather to know the chance of an exchange expectation* than tied some my investment on an exchange company just because I could not get a trade I think I deserved.

Jya-Ning


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## Timeshare Von (Jul 7, 2007)

iconnections said:


> Some of us remember the old RCI Company with their space bank which was in benefit of the RCI members only.  I believe, it was a fair system too.  It worked well for us many years ago and we were always happy with the exchanges we made.
> 
> At that time, you exchanged in your own season and red exchanged for red, white for white and blue for blue.  Only in the last 45 days (I believe it was) anyone could exchange for anything on a first come, fist serve basis.  That's when you could pick up a larger unit or in a better season too than what you owned.
> 
> ...



Emmy,

Remember when you'd get your week back if it wasn't traded for two weeks before the start date?  Now that was a nice deal, especially if you owned close to home.  That was back in the mid 80's.


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## PerryM (Jul 7, 2007)

*Why do I always wind up defending RCI?*

It truly amazes me how I seem to defend RCI, I really don’t like the company – I believe their decision to rent timeshares in order to generate cash to buy airline tickets for those RCI Point folks to convert timeshare Points into airline tickets is just stupid.

But, its their company and they answer to stockholders who demand more profit from the operations.  If the stockholders are happy that's really the only thing RCI cares about.

However, anyone’s investment in RCI Weeks is an $89 annual dues and $164 domestic exchange charge - that's it.  This is completely voluntary on the timeshare owners part and the relationship with RCI is 100% controllable by the HOA or developer.

It seems to me that the timeshare resort is the one that should go shopping for another exchange company.  One of our resorts we own is affiliated with II, RCI, RCI Points, and a bunch of independents.  If anyone has a beef with the exchange situation at a resort the HOA or developer should be the folks to open up competition to other exchanges.

Capitalism and competition solve problems – government, lawsuits, and lawyers just screw up the natural balance of the market place.

I can see fulfilling the owner’s ability to elect members to the HOA that represent the owner’s views – but anything beyond that is consumer activism and will only screw up the balance in the marketplace.  Any smart company has years to prepare for a lawsuit or for hostile takeovers, by the time they get acted upon the company is 5 years down the road.

If you focus just a few hours on consumer activism that’s a few hours lost exploiting the existing system for your benefit.  Spend the time and money and enjoy RCI’s obsession with renting cheap timeshares to the public.  Go ahead and rent those cheap weeks.


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## taffy19 (Jul 7, 2007)

PerryM said:


> However, anyone’s investment in RCI Weeks is an $89 annual dues and $164 domestic exchange charge - that's it. This is completely voluntary on the timeshare owners part and the relationship with RCI is 100% controllable by the HOA or developer.
> 
> It seems to me that the timeshare resort is the one that should go shopping for another exchange company. One of our resorts we own is affiliated with II, RCI, RCI Points, and a bunch of independents. If anyone has a beef with the exchange situation at a resort the HOA or developer should be the folks to open up competition to other exchanges.


 
Perry, I agree with you. Let's write our HOA and tell them to affiliate with other exchange companies too and leave the choice with the timeshare owners. After all, we are paying the maintenance fees and continue to do so. If they are not willing to listen then we have to vote these board members out.

I like the idea of a point-based system as it is more flexible in use and there is no secret formula because a certain amount of points are given for the size and quality of the condo and for the time of the year the reservation is made for too. The reservation system should be able to calculate the difference, if necessary.

Owning a point-based system would be nice if the company didn't have the power to constantly take benefits away from the consumer. This is what worries me as you really don't know what you own and what your rights are. It's not like a club where you can decide to cancel your membership and walk away. You are stuck with a liability until you sell it.


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## taffy19 (Jul 7, 2007)

Timeshare Von said:


> Remember when you'd get your week back if it wasn't traded for two weeks before the start date? Now that was a nice deal, especially if you owned close to home. That was back in the mid 80's.


Yes, I vaguely remember this now but I didn't even know that it had been changed. 


timeos2 said:


> I seem to recall the "adjustments" to trade value preceded the sale of RCI by at least a few years. The seeds had been planted that allowed the buyer to see dollar signs where there were simply trades before.


I didn't realize this was starting to happen before Cendant bought RCI but it would make perfect sense as it showed the potential of making the company more profitable in the future. There are other companies we can use.


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## PerryM (Jul 7, 2007)

*We all know the lawyers aren't in it to save us - just the $$$$$$$*



JudyS said:


> <snip>
> My original point was that RCI appears to be removing value from timeshare owners in order to obtain a profit far smaller than the value it removed.  I still believe that to be the case, but I probably should have given a clearer and more detailed example, rather than the quick, over-simplified one that I dashed off.
> <snip>



Judy, please don’t take the following as any sort of personal attack towards you – its aimed at all the folks riled up by lawyers and how they will save us:


The major problem is that the RCI Weeks system is a barter system – and you don’t get to barter!

All you can do is make the decision to use the system or not – if you decide to use the system you agree to all the fine print their lawyers have attached to the sales contract.

To now go further and have lawyer to lawyer fights is 1) Never going to solve the problem 2) Cost the members millions of dollars 3) Make the lawyers rich.

I guess if your natural reaction to something is to sue the stuffing out of someone then taking over companies, asking the authorities to act for you, suing the company are the natural remedies to any alleged activities that seem to stop someone from enjoying the service/product.

All of this reminds me of the judge that sued his drycleaner for losing his pants for 2 weeks – sue for $64 M.  This is all insanity to me – the courts have gone nuts and the lawyers are just pulling us into this mess.

Again we are talking about voluntarily paying $89 a year and $164 per voluntary exchange.  These are the prices of some nice pants – this is more than nuts as the judge’s $64 M is a drop in the bucket compared to class action lawsuits and corporate takeovers.

I am not belittling the anger many feel towards RCI – I’m suggesting that the anger is clouding good judgment – it’s the fault of the HOA/developer and these folks seem to always get a free pass in favor of making lawyers rich.


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## BocaBum99 (Jul 7, 2007)

PerryM said:


> Judy, please don’t take the following as any sort of personal attack towards you – its aimed at all the folks riled up by lawyers and how they will save us:
> 
> 
> The major problem is that the RCI Weeks system is a barter system – and you don’t get to barter!
> ...




I agree that the best way to fix a bad company is to foster competition, create educated and informed consumers and let the consumers make decisions based on their own personal preferences.  They will vote with their dollars and the companies that best meet their needs will win over time.
Lawyers should only be used when the only alternative left is a shotgun.


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## JudyS (Jul 7, 2007)

Jya-Ning said:


> ...No, I believe the easiest way for anyone that want to take over Wyn is talk to a institution holder, and if they have enough good idea, it will get kicked.  It is much easier to find one to agree with you....
> 
> However, I really fail to see why some one want to take over RCI....
> 
> If you can not see 10% of TS owners to buy Wyndham, how you can see enough exchangers to agree to buy Wyndham?....


OK, thanks, Jya-Ning, I think I understand now what you said about 80% of Wyndham investors being institutional.   You're saying that since the stock is held by institutional investors, the way to, say, change the CEO is to explain to the institutional investors what a bad job the CEO is doing, and then they will want to kick him out.  Actually, though, my impression is that few institutional investors ever get involved with corporate governance, so I don't think this would work.

As for 10% of Wyndham owners buying Wyndham stock, I actually *could* see 10% of Wyndham owners buying Wyndham stock.  I just can't see 10% of Wyndham owners buying *$7500* of Wyndham stock, on average, each.  However, they wouldn't need to buy anything like that much to get substantial control over the company.

As for *why* I wish owners would take over RCI, I'll address that in my next post.


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## JudyS (Jul 7, 2007)

PerryM said:
			
		

> ...
> Capitalism and competition solve problems – government, lawsuits, and lawyers just screw up the natural balance of the market place....
> 
> To now go further and have lawyer to lawyer fights is 1) Never going to solve the problem 2) Cost the members millions of dollars 3) Make the lawyers rich.
> ...


Perry, as I said, I have nothing against the RCI class action.  However, my proposal has *nothing* to do with lawsuits, and there is no reason why a person couldn't support my proposal, even if that person was very opposed to lawsuits. 

I was thinking of my proposal (timeshare owners buying Wyndham stock to try to control Wyndham's decisions) as outside the capitalist system.  After all, it involves timeshare owners acting cooperatively. However, when I told my husband about this idea, he saw it as pure capitalism: A person has a vested interest in a piece of property. They see a certain company as hurting the value of their property. So, they buy that company (or rather, a small fraction of it, in the form of stock) as a way of protecting their property interest.  Buying stock -- what could be more capitalist than that?  My husband said it sounded like pure Adam Smith!

Think about this a different way.  Suppose, say, a Fairfield or Worldmark owner said, "Hmmm.  Looks like Wyndham is trying to increase earnings by decreasing the value of their timeshare owners' properties.  I own a Wyndham property, and I don't want to sell right now.  But, if Wyndham succeeds, their value will go up, and my property's value will go down.  By buying Wyndham stock, I can hedge my bets somewhat -- if Wyndham succeeds, my timeshare's value will decline, but at least my Wyndham stock's value will increase.  I guess I should buy Wyndham stock."  Would you still object?  How about if  after the owner buys Wyndham stock, he decides to vote for policies or board members who will protect his timeshare interest, since that is what enlightened self-interest would dictate.  Would you object then?  If not, why not go out and buy Wyndham stock yourself? 

As for why I wish timeshare owners would get together and change RCI, as I've said, I really have little personally invested in RCI.  However, I am really bothered by the fact that 1) They seem to be misappropriating members' weeks as rentals and 2) They have no way for timeshare owners to find out what they will get as an exchange without committing their week to RCI.  This is different from *every *other exchange company, all of which have some way to do a request first, or a search first of their current inventory, or both.  This means that many, many newbies get ripped off by RCI, even if they try to do their homework first.  Even the trade tests here on TUG don't help that much, because they were all conducted before RCI inventory dried up.

Perry and Boca, I agree that capitalism is a great system, but it only works if people have access to information.  RCI is doing everything they can to keep owners in the dark.  Suppose RCI told people, "Hey, you want to deposit your primo week with us?  That's great! We'll rent it out and offer a choice of the following less desirable weeks instead!"  If, at that point, the owner went ahead and deposited, I'd say it was their own problem.  But instead, I feel RCI is using fraud to get deposits.  I really don't like fraud.


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## Carolinian (Jul 7, 2007)

The problem with using saying that the market can impact RCI is that monopolies, quasi-monoplies, and oligopolies don't have to respond to the market.  Instead they dicatate and there is no market power to bring them back to earth.  For resorts that are not dual affiliated and do not educate their members about the ability to use independents, RCI has a monopoly power over those owners who own primarily to exchange, and that situation exists at a lot of resorts.

So how do we bring competition to the marketplace?  We encourage our HOA's to dual affiliate with both RCI and II and to educate their members about the ability to use independents.  We all need to be proactive and contact our HOA leaders on these issues, or perhaps write a letter to the editor to our HOA newsletter or raise the issue at the HOA annual meeting.  Put up a motion on the floor for the HOA to take some of these steps.

HOA's educating the members about independents is probably the easiest thing they could do to promote competition.  Several independents like DAE and PI will even pay the postage for an edition of the resort newsletter if the HOA includes one of their brochures.




PerryM said:


> It truly amazes me how I seem to defend RCI, I really don’t like the company – I believe their decision to rent timeshares in order to generate cash to buy airline tickets for those RCI Point folks to convert timeshare Points into airline tickets is just stupid.
> 
> But, its their company and they answer to stockholders who demand more profit from the operations.  If the stockholders are happy that's really the only thing RCI cares about.
> 
> ...


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## Carolinian (Jul 7, 2007)

No, Perry, we are also talking about timeshare owners who deposit their weeks in trust to an exchange company on the representation that they are going to be used for exchange.  The fine print of a contract of adhesion where they pull the wool over the members eyes is not likely to protect them in court.  They have at least a quasi fiduciary relationship with their depositors and they violate that when they abuse deposits to rent out for their own profits or for the benefit of a seperate system like Points.  What is involved here is the timeshare deposit, reprsented a maintenance fee often about $500 plus the opportunity cost for the money tied up in ownership of the unit/week.  It is NOT just the exchange fee and RCI membership fee.




PerryM said:


> Judy, please don’t take the following as any sort of personal attack towards you – its aimed at all the folks riled up by lawyers and how they will save us:
> 
> 
> The major problem is that the RCI Weeks system is a barter system – and you don’t get to barter!
> ...


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## pedro47 (Jul 7, 2007)

T/S owners would need the following to take-over RCI: Money, Share Owners Votes, Stock Holders Votes, and most important some very high paid lawyers.


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## PerryM (Jul 7, 2007)

Carolinian said:


> *The problem with using saying that the market can impact RCI is that monopolies, quasi-monoplies, and oligopolies don't have to respond to the market.*  Instead they dicatate and there is no market power to bring them back to earth.  For resorts that are not dual affiliated and do not educate their members about the ability to use independents, RCI has a monopoly power over those owners who own primarily to exchange, and that situation exists at a lot of resorts.
> 
> So how do we bring competition to the marketplace?  We encourage our HOA's to dual affiliate with both RCI and II and to educate their members about the ability to use independents.  We all need to be proactive and contact our HOA leaders on these issues, or perhaps write a letter to the editor to our HOA newsletter or raise the issue at the HOA annual meeting.  Put up a motion on the floor for the HOA to take some of these steps.
> 
> HOA's educating the members about independents is probably the easiest thing they could do to promote competition.  Several independents like DAE and PI will even pay the postage for an edition of the resort newsletter if the HOA includes one of their brochures.




Look at all the negative posts concerning RedWeek's entrance into the exchange business - All I saw was 90% bashing of RW.

The free market IS the solution - sometimes folks need to put their money where there mouth is.  I deposited 2 weeks into RW that I could have rented for some good money.

I am doing what consumers should be doing - take a gamble and go with the competition and not the lawyers.


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## Carolinian (Jul 8, 2007)

PerryM said:


> Look at all the negative posts concerning RedWeek's entrance into the exchange business - All I saw was 90% bashing of RW.
> 
> The free market IS the solution - sometimes folks need to put their money where there mouth is.  I deposited 2 weeks into RW that I could have rented for some good money.
> 
> I am doing what consumers should be doing - take a gamble and go with the competition and not the lawyers.



Have you asked your HOA's to dual affiliate with both majors and educate their members about the ability to use independents?  This is how you really grow the competition.  Getting the word out to more timesharers is the key.


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## "Roger" (Jul 8, 2007)

Better than dual affiliation would be triple affiliation.  Include RCI Points.  That would end your complaints about the cross over grid for that resort.  Anyone in Points would have to pay the established Points cost so the cross over grids would become irrelevant for that resort.

It is not for either of us to decide whether joining points or not joining is the right deal.  Give everyone all the options and let the FREE MARKET SYSTEM do the deciding.  Anything else distorts SUPPLY AND DEMAND.


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## timeos2 (Jul 8, 2007)

*Self defeating*

While I agree that it is in the owners interest to be multi-affiliated for exchange purposes I can't help but think in many ways we are hurting ourselves with too many options. 

One of the most frequent complaints with all exchange systems is "there's no inventory where I want to go".  By multi-affiliations the pool of inventory isn't increased for a single source but diluted over many sources.  With each new independent, weeks and points in RCI, with II isolating inventory within the many corporate systems, every new mini-system that gobbles up the prime new resorts that are always in demand along with the growing number of owners who, wisely I may add, buy to use and seldom trade at all the limited number of units are spread over far too many potential sources. It gives credence to that idea that rather than limiting your choices for trade and the exposure of your time to the tiny audience of any exchange company other than the giant RCI and 1/2 the size II the better option is to rent. Rent your time for the maximum and rent your "trade" for the lowest price you can find. You have far more control when renting on both ends. Your time can't be given away at firesale pricing unless  you decide thats the best choice. You can guarantee your renter the unit size, resort and dates they desire as you control that.  You can rent the view, the date, the unit size you want as there is no unknowns when you rent, unlike trades. You avoid the silly limitations of 1 in 4 or only one visit to this resort "group" in 3 years and the unfair charges that II and RCI have been allowing for their "guests" at some resorts. 

When you think about it the use of the ever more costly exchange systems with ever shrinking choices and far too many unknowns is really a poor choice to make. It doesn't matter how many of them you have to choose from as the model isn't a good one - at least not as it has become today.  So offer all the affiliations you want but the best advice you can give owners is to use or rent their time and avoid all the pitfalls of the exchange games.


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## PerryM (Jul 8, 2007)

*Bonuses provide incentive to do things..*



timeos2 said:


> While I agree that it is in the owners interest to be multi-affiliated for exchange purposes I can't help but think in many ways we are hurting ourselves with too many options.
> 
> One of the most frequent complaints with all exchange systems is "there's no inventory where I want to go".  By multi-affiliations the pool of inventory isn't increased for a single source but diluted over many sources.  With each new independent, weeks and points in RCI, with II isolating inventory within the many corporate systems, every new mini-system that gobbles up the prime new resorts that are always in demand along with the growing number of owners who, wisely I may add, buy to use and seldom trade at all the limited number of units are spread over far too many potential sources. It gives credence to that idea that rather than limiting your choices for trade and the exposure of your time to the tiny audience of any exchange company other than the giant RCI and 1/2 the size II the better option is to rent. Rent your time for the maximum and rent your "trade" for the lowest price you can find. You have far more control when renting on both ends. Your time can't be given away at firesale pricing unless  you decide thats the best choice. You can guarantee your renter the unit size, resort and dates they desire as you control that.  You can rent the view, the date, the unit size you want as there is no unknowns when you rent, unlike trades. You avoid the silly limitations of 1 in 4 or only one visit to this resort "group" in 3 years and the unfair charges that II and RCI have been allowing for their "guests" at some resorts.
> 
> When you think about it the use of the ever more costly exchange systems with ever shrinking choices and far too many unknowns is really a poor choice to make. It doesn't matter how many of them you have to choose from as the model isn't a good one - at least not as it has become today.  So offer all the affiliations you want but the best advice you can give owners is to use or rent their time and avoid all the pitfalls of the exchange games.



II and RCI suffer the same problem the human spare parts industry faces - no incentive to supply weeks/parts.

Every day many folks die because doctors have decided that a family can't sell the parts of a loved one (I know this is a hot topic but it has relevance) who has died.  *The parts just rot and folks just die*.  Someday the market will force a solution; we may have to travel to China and they will have the finest medical facilities in the world just because of this one issue.


I wish I could add a "Bonus" (Bribe whatever) to my exchange offer.  I'd like to exchange my Gold Summit Watch for a Platinum Maui Ocean Club and I'd throw in a $500 "Bonus" to the person depositing the Maui unit - Studio would be great.


Why must II and RCI always be the folks getting the money - the Maui Ocean Club owner has a premium week and will rent it over exchanging it - offer him a "Bonus" and high demand inventory will show up.


So the way it would work is simple - when I do an instant exchange or on-going search there is one new field called "Bonus"; in my case I'd put in $500 which goes directly to the Maui Ocean Club owner via PayPal - II would not get involved at all.

On the other end the person with a Maui Ocean Club would see the highest "Bonus" out there and knows that if they deposit their unit the money will be in their PayPal account in seconds - a great motive to deposit their unit.

Simple solutions to seemingly complex problems.

You've hear of Ockham's razor, I call this Perry's shaver.


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## bruwery (Jul 9, 2007)

PerryM said:


> *As a consumer my job is to maximize the usage of a company’s service/product – it is NOT consumer activism.*
> 
> Consumer activism, like boycotts, lawsuits, trying to take over the company have NO place in being just a consumer.  Once you join in any activism activities you stop becoming a consumer and start to become part of management – a hostile act I might add.  This supposes that the consumer knows more than the management team.  This supposes that the consumer is superior to the company.  This is a lot of supposing.



Perry's right.  My role as a customer is to enjoy the company's service.  If I don't enjoy it, I don't buy the company in hopes that I can change it.  Rather, I speak by shopping elsewhere.

If you get angry at a car dealer, will you buy the dealership, or take your business to the competitor down the road?

RCI has competitors as well.  II, independents, private rentals, etc.  I understand that many resorts aren't affiliated with other exchange companies, but there's always the rental market.

It's easy to have simple solutions or grand plans.  It's another matter entirely to implement such ideas when you're actually accountable for the results.  I do not want to be responsible for RCI policy.  Besides, if we were to collectively control the company, vacation would sort of become our job.  (That's an interesting paradox.  Trying to think that through philosophically is threatening to tilt whatever little bit of mental stability I actually possess.)

That being said, I would happily spend $500 - $1,000 on the stock if obtaining a controlling interest seemed like a workable solution.  However, as soon as all the purchase activity sent the stock price skyward, I'd scream "SELL SELL SELL!!!!" to my broker and pocket the profit...


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