# No Explanation



## Carolinian (May 22, 2006)

I find it very curious that RCI has not chosen to try to provide their resort affiliates with any explanation of the class action lawsuits.  This months ''RCI Affiliate Connections'' newsletter had not a word to say on the subject, and there has been no special letter from one of the higher ups.

The word is traveling, and since RCI always want to put their spin on things, I am surprised they have not done so yet on this.  Perhaps part of their problem is that anything they say may damage their relationship with resorts, but saying nothing also has that effect.

I have heard from someone connected with one of the class actions suits that one of the law firms involved has had thousands of calls from individual RCI members concerned about RCI's policies and supporting their action.  The law firm was surprised by the massive outpouring, which is far more than the typical class action.

I heard from someone who was at the last ARDA convention that the lawsuits were the talk of the convention,  and most people other than RCI itself (at least publicly) considered them to have a great deal of significance for the industry.

At some point, it seems to me, RCI has to start trying to do some damage control outside of the lawsuit itself.  I am quite surprised that they haven't started yet.


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## PerryM (May 22, 2006)

*No big deal to RCI*

My guess is that RCI feels they will win and this is no big deal.

Anyway, Cendant/RCI won’t have to pay a penny – they will just raise the annual dues and increase the fees if they should lose – no big deal.  It’s not like the average RCI member is going to do anything drastic like use another exchange company.

So to RCI it’s a win-win: A) if they win they will just increase the rate of rentals and B) if they lose we, the members of RCI will pay the legal bills, and they will still increase the rentals.

It’s their company to run anyway they see fit.  Only the lawyers will win this battle.

I recommend to all owners that they join RCI and just rent their units out for cash and then turnaround and rent a cheap rental from RCI – thanks RCI.

The Internet did not exist when RCI and II started down the path of matching timeshare reservations from one owner to another owner.  Now with the internet we can do the same exact thing ourselves – who needs an exchange company?


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## JeffV (May 22, 2006)

Sounds like a much wiser move rather than feed the rumor mongers who are obviously waiting with bated breath.


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## Carolinian (May 22, 2006)

What is happening with the lawsuits is that the word is spreading to both resorts and individuals about RCI's rental activities, and people who did not pay attention before are doing so now.  That has to have an impact.  I hope that other exchange companies will take this issue straight to consumers and resorts.

I would hope that the threat of fee increases to pay for the defendant's misdeeds encourages the plaintiffs attorneys to demand a term that requires court approval of any fee increase by RCI for an extended period.

The internet really is not an excuse for RCI's rentals.  Its like blaming the gun instead of the person who pulls the trigger.


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## PerryM (May 22, 2006)

*Blame your resort for this*

As long as RCI and II don’t violate any state/federal law they are free to run their companies anyway they want – not the way the lawyers want them to.

If RCI’s general council has done his/her job right RCI will come thru this just fine; if not maybe they can be sued for malfeasance – some other lawyer will make a bunch of money.

Here’s my prediction which all of you can mark and review later – 5 years from now RCI and II will increase at least 50% in size and none of this will mean anything.  The developers seem to break new sales records all the time and RCI and II have the “in” with the developers and they will just increase in size too.

Renting, by the exchange companies, is here to stay and I believe it adds much to the bottom line of both RCI and II and that’s why they exist – to reward the investors who bought stock and took a risk with them.

There are just too many other avenues available to the timeshare owner to get a raw deal from the exchange companies – it takes $15 to run an ad which will allow you to get cash for your week and then rent from VRBO or RCI for a great vacation.

I am still a member of RCI, RCI Points, and II and don’t plan to cancel my memberships anytime soon – I just find our exchanges to be in our favor at the present time.  When I decide that they don’t offer me anything, I’ll cancel our membership.

The market place is the best place to settle these disputes – if RCI members feel they are being screwed then they are free to leave.  

Ultimately this comes back to the HOA/Developer – if your resort is not dual affiliated with II and RCI and XYZ why not?  Why the “cozy” relationship with one exchange company over the other?  This is where these disputes should be fought.

This is the REAL culprit here – your resort has limited your exchange choices and just what are you doing to correct it?  The answer is of course nothing – the owners seem to be fat, dumb, and happy – the American way.  (I'm referring to the timeshare ownership pool as a whole)


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## timeos2 (May 22, 2006)

No explanation needed. They don't have to tell the resorts that some money grubbers have set themselves up for a big payday. Quote the Eagles: "Old Billy was right".  

If anyone can prove that at least 1% of RCI members know of the suit I'd be very surprised. They would still need at least 10 times more participants to have a meaningful "uprising" among the membership.  As Perry says, RCI knows they can't lose so broadcasting it by official pronouncement would only hurt them not help. They'll be quiet, it will most likely go away or they will pay some small settlement to the lawyer leeches. Either way the membership will pay so ultimately the owners lose. But thats exactly what the government control advocates wanted so they will eventually get at least part of their wish. It won't be the part they asked for but it will cost us all as government intervention always does. It's win-win for RCI and the lawyers - lose-lose for the members no matter what happens.


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## Pit (May 22, 2006)

*Re: Blame your resort for this*



			
				PerryM said:
			
		

> Renting, by the exchange companies, is here to stay and I believe it adds much to the bottom line of both RCI and II and that’s why they exist – to reward the investors who bought stock and took a risk with them.



That's the key. Many owners mistakenly believe that RCI/II exist for the purpose of providing them with exchanges.


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## Carolinian (May 22, 2006)

*Re: Blame your resort for this*

Actually, state consumer protection laws are quite broad.  North Carolina's says, for example, that ''unfair or deceptive acts or practices in or affecting commerce are unlawful''  Both class action lawsuits cite the New Jersey consumer protection laws as a basis for the lawsuit.  Some on these boards are under the mistaken impression that unless RCI violates the T& C it has written for itself then it is home free, but it does not work that way.  A number of major law firms that specialize in this type of action are involved and these firms do not invest a lot of their own money, which such an action takes, unless they have thoroughly researched the law and believe they have a very strong case.

The argument that members are free to leave just doesn't wash when the company involved is, like RCI, a quasi monopoly.  At resorts that are not dual affialiated, most owners do not know that they can use another exchange company.  They are effectively prisoners of RCI if they want to exchange.

Hopefully, the independents will agressively use the spotlight on RCI rentals to woo resorts and members and create a real competitive environment in timeshare exchanging. Free market principles just do not apply to an industry that is largely an oligopoly at present, as it is in the US and many other markets.  Go to Australia / New Zealand, on the other hand where there are seveal major players which most timeshare owners know they can use, and you will find lower costs and other more customer-friendly policies even at RCI.

As to developers, their share of the overall timeshare market has tumbled in recent years as they have moved more in the direction of points, while the resale portion of the market has soared.

As to HOA's being to blame, most affiliation contracts have exclusivity language that RCI or II has put there saying they cannot deal with other exchange companies, which too often may intimidate the HOA.
It is not the HOA's fault that the language is there, but they should get legal advice to find out that such language likely would violate anti-trust laws.

I have long suggested that the most proactive thing Tuggers can do is to let your HOA know what is going on, if they don't know already, and suggest 1) dual affiliation with both RCI and II and 2) educating the members on their ability to use the independent exchange companies.

On the OBX some resorts have dual affiliated since the Cendant takeover of RCI and others have taken advantage of the free postage offers from one or more independent exchange companies to mail out their brochures with the HOA newsletters.

And BTW, I think you mean ''counsel'' rather than ''council''.





			
				PerryM said:
			
		

> As long as RCI and II don’t violate any state/federal law they are free to run their companies anyway they want – not the way the lawyers want them to.
> 
> If RCI’s general council has done his/her job right RCI will come thru this just fine; if not maybe they can be sued for malfeasance – some other lawyer will make a bunch of money.
> 
> ...


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## PerryM (May 22, 2006)

*Marital Arts and Timeshares*

Carolinian,

Thanks, once again, for the spelling lesson – I blaze along typing 100 WPM and my spelling checker and I catch 99.9% of the errors; good enough for chat room work.  I've instructed my spelling checker to compensate accordingly.

I place 100% of the blame on the HOA and if they can’t elect a President with some backbone they deserve to suffer in the side affects of a poor leadership and a monopoly.

The answer to RCI being a monopoly does NOT rest with RCI; it rests with the rules that dictate a monopoly – many resorts are dual affiliated and this gives the resort owners much more flexibility.

To show that this is no big deal, WorldMark, owned by the same company that owns RCI, is dual affiliated with RCI AND II and with others.  If an RCI sister company can be BOTH RCI and II affiliated why are we even discussing this topic?

Do we really need exchange companies anymore?  I rent our unused timeshares and use that money to rent cheap RCI rentals for our vacations – I love cheap RCI rentals.  If RCI wants to rent at fire sale prices then I would be foolish to pass up such a good deal.  If RCI want’s to set up the rules to rent fantastic weeks at Motel 6 prices why fight it – join the vacationers who want to see this happen.

Timesharing is like Martial Arts – understand your opponent and take advantage of their weak (week?) points and capitalize on your strong points.  To put up a fight and try to fix their week////weak areas is futile.

Last year I used our RCI Points and reserved week 51 at the Park Plaza in Park City UT while I rented out our week 51 for 5 times the MF.  If RCI Points wants to price week 51 so low (in points) I’m not about to fight them but to take advantage of their stupidity.


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## "Roger" (May 22, 2006)

*Re: Blame your resort for this*



			
				Carolinian said:
			
		

> ....As to developers, their share of the overall timeshare market has tumbled in recent years as they have moved more in the direction of points, while the resale portion of the market has soared.....


This sounds like the Jerry Sikes line:  People are buying resale, not because the cost is twenty to thirty percent what it costs to buy from a developer, but because they don't want to buy points.  Do you find this claim credible?


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## timeos2 (May 22, 2006)

*Resale points - not as many out there*



			
				Roger said:
			
		

> This sounds like the Jerry Sikes line:  People are buying resale, not because the cost is twenty to thirty percent what it costs to buy from a developer, but because they don't want to buy points.  Do you find this claim credible?


In as few words as the BBS lets me use: No.  

People want to buy resale points because they are also at a steep discount but there aren't any where near as many on the market as weeks. That is the far more telling fact than the farfetched idea that people are buying resale to avoid points.


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## PerryM (May 22, 2006)

*Phony-baloney*

I don’t know how many of you buy rare coins but we did.  Back 20 years ago, before the internet, the Mom and Pop coin stores sold coins to each other at ever increasing prices – the astronomical growth of rare coins was reported in Barrons and other financial papers suggesting that rare coins were another type of investment vehicle to consider.

Well the market imploded as the rudimentary internet allowed the average coin investor to talk among themselves; without the coin dealers.  The coin market lost 60%-80% of its value in the blink of an eye.

I think we are witnessing the same phony-baloney with timeshares and I would not be surprised if a market implosion hits this over inflated market too.  Even resale prices may crash to pennies on the resale dollar.  Once a panic sets in, folks sell at ANY price they can get.  Timeshares have the maintenance fees which will cause folks to panic even faster.

The prices charged by the developers can’t be justified by the real world.  True, Marriott can charge $35,000 for a one week villa that has a MF of $800 and prop up the market so FF can charge $37,000 with a MF of $1,100 and the market goes up and up.

Will this scenario happen?  I don’t know but the more the consumers get to talk to each other the more reality sets in.

This phony-baloney market is reflected in the RCI rental prices.  If the rental market says that the timeshare is worth $600 for the week and the MF is $900 and it cost $37,000 to buy it – just how is the $600 rental wrong?

RCI stepped into this mess when it began renting over inflated timeshare villas that have no reality to what they are really worth.  It’s not RCI’s fault for bringing the news to the timeshare world – don’t shoot the messenger.


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## BocaBum99 (May 22, 2006)

*Rentals?*

What rentals?  Is someone renting timeshares?

Only a few people in the vocal minority care about this issue enough to do much about it.  There may be a settlement and a few rules changes.  But, nothing much will change.

I'll know it means something when it hits the cover of Businessweek, Fortune, Forbes, The Wall Street Journal or Barron's magazine.  Until that happens, it's just a fungus on an ant in Africa.

I heard the talk of ARDA was illegal immigration.  Many resorts are trying to figure out what to do is they can't hire illegal aliens for housekeeping services.  Now that's the talk of the industry.  It's on every single day in the news and it impacts more people.  Wow, it's on the news at this very moment.


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## Carolinian (May 22, 2006)

Any market is based on supply and demand.   Increase the demand or tighten the supply and the price goes up.  Flood the market with supply or kill the demand, and prices go down.

Before the big exchange companies got involved in rentals, the supply was what individual owners put up for rent.  There may be places like Hawaii where there have been reports on these boards of oversupply from that source driving down rental prices, but that is not the case most places.  Looking at the traditional owner outlets in places like east coast beaches and the Caribbean and even newer internet outlets for owner rental weeks there, the prices have generally held firm. On the OBX they seem to go up every year.

What has happened is that the big exchange companies are dumping lots of inventory flooding the market with a deluge of supply, and driving prices down.  That does not reflect the ''real'' market.  It reflects the market under the artificial condition of big exchange companies diverting supply in large quantities from the exchange market to dump in the rental market.  And, yes, it is VERY appropriate to blame the big exchange companies for that.

And I guess you also think RCI should get a medal when people can't seem to get exchanges anymore, due to the rentals, as well???  Or for kicking the financial props out from under the resorts?

Perry,our perspectives are different.  You look at the exchange industry from the perspective of the big exchange companies.  I look at it from the perspective of the HOA's and the individual members.  When the HOA's sneeze, the members catch the cold.  Screw up HOA economics, and it will be the members who pay for it in higher m/f's.

And don't you think the exchange company should be blamed for putting intimidating language in affiliation agreements to discourage resorts from working with other exchange companies?


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## Carolinian (May 22, 2006)

*Re: Rentals?*

For the timeshare industry, the front page of publications like Timesharing Today are what determines if it is big news for the industry.  BTW, it IS the lead story on the front page of the current issue of Timesharing Today.






			
				BocaBum99 said:
			
		

> What rentals?  Is someone renting timeshares?
> 
> Only a few people in the vocal minority care about this issue enough to do much about it.  There may be a settlement and a few rules changes.  But, nothing much will change.
> 
> ...


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## PerryM (May 22, 2006)

*The ugly truth...*

VRBO has 55,000+ timeshares, condos, quarter shares, and homes up for rent – is the rental market over saturated?

One can guess as to whether the market it in over supply or over demand but I assume that the market is in balance – the right balance of supply and demand which the price reflects at the moment.

Sad to say that those bloated timeshares aren’t worth the price that the vast majority of owners paid (Developer price with 14.99% financing which doubles the purchase price).

The rental market is vicious – the true worth of a property is reflected in that rental price.  If a villa commands $600 per week in a high demand time just what is the timeshare worth?  $15,000?  $35,000?  $60,000?

If the villa commands $600 rental and the MF is $900, what does this tell us about the value of the timeshare?

Bottom line; RCI’s rental program is exposing the bloated prices of timeshares and the unrealistic value the owner has of their unit.  As long as this stays “in house” in the RCI system we can each kid each other on our units worth.

Once RCI and II started renting timeshares to the general public and had to price them correctly, the ugly truth of bloated timeshare prices becomes obvious to everyone.  Blaming RCI and II for the truth is to NOT face the truth.


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## timeos2 (May 22, 2006)

Carolinian said:
			
		

> And I guess you also think RCI should get a medal when people can't seem to get exchanges anymore, due to the rentals, as well???  Or for kicking the financial props out from under the resorts?



There is a big difference between getting a fair exchange vs the old days of the give aways. The level of fair trades seems to be better while the give aways have in fact been stopped. 



			
				Carolinian said:
			
		

> Perry,our perspectives are different.  You look at the exchange industry from the perspective of the big exchange companies.  I look at it from the perspective of the HOA's and the individual members.  When the HOA's sneeze, the members catch the cold.  Screw up HOA economics, and it will be the members who pay for it in higher m/f's.



It has been stated correctly many, many times if a resort/HOA has built their economics on RCI trades for value that is a big problem and it's not RCI's. They only have to look out for RCI shareholders.  This dog doesn't hunt. 



			
				Carolinian said:
			
		

> And don't you think the exchange company should be blamed for putting intimidating language in affiliation agreements to discourage resorts from working with other exchange companies?



Again, it is a simple pencil line through the language if a resort/HOA doesn't want it to read that way. If they don't take that step it is the resort not RCI at fault.  And by the way, the language in the II agreement is far more intimidating than that in the RCI standard form.  Who is the really the bad guy on that front?


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## BocaBum99 (May 23, 2006)

*TST is irrelevant - Here's the proof*



			
				Carolinian said:
			
		

> For the timeshare industry, the front page of publications like Timesharing Today are what determines if it is big news for the industry.  BTW, it IS the lead story on the front page of the current issue of Timesharing Today.



TST has 25,000 subscribers.  Since there are 3M owners of timeshares in the US, their subscriber base represents less than 1% of timeshare owners.  I would hardly call that relevant to the timesharing market.  99% of timesharing consumers know nothing about Timesharing today.  I guess you didn't know that.

If anything, I'd say that Endless Vacations is the source of information for timesharers.  That magazine is read by 1.5M timesharing consumers.  That is 50% of the timesharing population.

So, I'd say that timeshare rentals is pretty much not even in the consciousness of most timesharers except for what they are offered by RCI or II.

I wouldn't be surprised if more timesharing people are influenced by the National Enquirer than they are by Timesharing Today.  I am quite sure that more timesharers read it than TST.


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## AwayWeGo (May 23, 2006)

*Does Anybody Actually Read The R.C.I. Mag?*




			
				BocaBum99 said:
			
		

> Endless Vacations is the source of information for timesharers.  That magazine is read by 1.5M timesharing consumers.


Maybe. 

Then again, not everybody who gets it reads it. 

Ours generally goes straight onto the recycle stack. 

That's not to say anything is wrong with _Endless Vacations_. 

Shucks, I'm paying for it -- maybe I ought to read it, or at least thumb-check it now & then.  

-- Alan Cole, McLean (Fairfax County), Virginia, USA.


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## Timeshare Von (May 23, 2006)

Let me start out this rant by stating that some of my best TS friends are points owners in the FF system.  With that being said, and here's my bias with FF as a fixed weeks owner . . .  those in the points systems out there are milking the supply right out of RCI.  They are getting dog studios (blue or greens - whatever a green is!) for a minimal number of FF points and trading for primos like Kona.  Their points may have originally represented say two weeks, but through point management, they are getting four or five weeks of vacation out of the RCI system.

When I first started studying the FF point system, the sales rep at FF Washington/Alexandria showed me how my then current two weeks (three considering one is a lockoff unit) converted to points, plus one more week I would have to buy in the form of points would get me as much as seven weeks of vacation in the FF system to trade in at RCI.  He said that FF "needed" my other weeks because they (FF) didn't have enough weeks inventory for everyone to get what they wanted.

I had to scratch my head  at "owning four weeks worth" and taking out seven!  Seems I just added to the deficit by at least three weeks.

I for one would love to see RCI get back to the strict adherance of "like for a like exchange" so that people using these 28k FF points weeks aren't taking out premium weeks from the inventory.  I seem to recall reading on the FF Web site that a week at FF KHV is like 216k points and yet through RCI, some FF owners are getting those weeks for less than a fraction of that.

This is just one of the inequities created by the system as it is currently designed and administered by RCI.  I would like to see something done to restore the concept of "what you own is what you get" within RCI. I think that is a bigger problem, frankly, than the speculation that RCI is renting out spacebanked exchange weeks.

Just my two cents worth . . . please do not crucify me   I still love you all.  I can't fault the owners for using the system for all they can.  I would just like to see this loophole closed.

Yvonne


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## Timeshare Von (May 23, 2006)

*Re: TST is irrelevant - Here's the proof*



			
				BocaBum99 said:
			
		

> If anything, I'd say that Endless Vacations is the source of information for timesharers.  That magazine is read by 1.5M timesharing consumers.  That is 50% of the timesharing population.



I think that Endless Vacations is pretty much useless unless there is an article on an area I'm planning to vacation in the near future.  I really enjoyed the issue that featured Alaska, given we're going there next month.

The marketing/advertising in it is simply too much . . . and not something I want to see page after page.

Ordinarily, the magazine sits in the bathroom for idle reading material until the next one arrives  

Yvonne


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## Carolinian (May 23, 2006)

*Re: The ugly truth...*

In terms of flooding the market, one has to consider numbers.

When the Seasons chain jumped ship from RCI to II, they put out a newsletter (which I wish was still up on their website) that explained it to their members with a well aimed broadside at RCI over both points and rentals. That was in the earlier days of RCI rentals, before they had as many outlets as they now do, and at that time the Seasons article said RCI was renting hundreds of thousands of spacebank deposits to the general public.

Those numbers clearly show why exchange company rentals can depress the price by flooding the market.

Is the rental price in balance for a deliberately flooded market? Probably.  Would it be absent that deliberate flooding of the market?  Probably not.

RCI's actions not only hurt t/s owners who want to exchange and can't find what they used to find because RCI is renting out the inventory.  They also compete with t/s owners who want to exchange and find the price depressed by competition from RCI flooding the market.  RCI's callous manipulation of the market hurts the ability to exchange, it hurt rental prices for those who want to rent, and it hurts resale prices.  Timeshare owners are hurt on all fronts.  That's why I cannot understand why a certain group on these boards will always loudly defend RCI to the hilt regardless of what they do and how it hurts timesharers and timeshare resorts.






			
				PerryM said:
			
		

> VRBO has 55,000+ timeshares, condos, quarter shares, and homes up for rent – is the rental market over saturated?
> 
> One can guess as to whether the market it in over supply or over demand but I assume that the market is in balance – the right balance of supply and demand which the price reflects at the moment.
> 
> ...


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## Carolinian (May 23, 2006)

Again, the 45-day window IS a FAIR EXCHANGE.  Late inventory is depressed inventory in the leisure travel market.  A late deposit gets a much lower trading power, so remaining last minute spacebank inventory also, logically has a much reduced trading power.

If you really want to talk about fair exchange, why should owners in the overbuilt areas with their glut of inventory be able to trade into areas which a much more favorable demand over supply curve?  Those are massive trades up!  If you really want like-for-like, perhaps overbuilt areas should be restricted to trading into other overbuilt areas.

If you think trades seem to be better, you don't seem to be reading the same t/s boards that I am!

You think it is the resort's fault that their business plan is designed to dovetail with RCI's???  What were they suppposed to do; guess what RCI might do in the future??  Blame the HOA?  They weren't even around when the developer set things up.  Blame the developer?  Heck RCI was providing them with films and other materials hyping the RCI business plan.  What were they supposed to do - swim against the current to devise something else? RCI's fingerprints are all over the way this was set up, regardless of what RCI's defenders on these boards say.

As to lining out part of RCI's contract, there are many resorts where no one would date to challenge the 9000 lb gorilla that way.  In reality it does work, but size intimidates many from the get-go.





			
				timeos2 said:
			
		

> There is a big difference between getting a fair exchange vs the old days of the give aways. The level of fair trades seems to be better while the give aways have in fact been stopped.
> 
> 
> 
> ...


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## Carolinian (May 23, 2006)

*Re: TST is irrelevant - Here's the proof*

Endless Vacation is NOT independent.  It is owned by RCI.  They will not even let Timesharing Today advertise in it.  IF TST is so inconsequnetial, why is RCI so afraid of them that they will not let them advertise???

Are you trying to say that the same RCI which is not even talking to its resorts about the lawsuits would write a major story for its members about the very same subject????????  Does that make any sense at all?

While more people may have EV arrive in the mail, TST may still have more people actually reading it!




			
				BocaBum99 said:
			
		

> TST has 25,000 subscribers.  Since there are 3M owners of timeshares in the US, their subscriber base represents less than 1% of timeshare owners.  I would hardly call that relevant to the timesharing market.  99% of timesharing consumers know nothing about Timesharing today.  I guess you didn't know that.
> 
> If anything, I'd say that Endless Vacations is the source of information for timesharers.  That magazine is read by 1.5M timesharing consumers.  That is 50% of the timesharing population.
> 
> ...


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## PerryM (May 23, 2006)

*Show me the numbers*

Carolinian,

Flooding the market with timeshare rentals is easy to proclaim; but just what does it mean?

The rental markets I follow (Maui, Whistler, Park City, Orlando, Steamboat, Lake Tahoe) this would mean about 25+ units all dumped on the same day for a holiday week.  Half would be rented with no problems, half of the remaining would be rented before the 30 day mark leaving 25%, or 6 units for fire sale prices.  This is assuming an aggressive pricing plan (High rents to start with)

If all 25+ units were dumped at fire sale prices, they would be snapped up so fast that none would remain after 60 days; leaving other owners to rent at the normal price-gouging rates we love.

I’d need to see proof of “dumping” and fire sale prices – I just can’t imagine why this is needed in order to rent the villas.

If you mean off-season or shoulder-season then dumping a huge quantity of villas at fire sale prices would depress the market and have many un-rented.

However, most reasonable folks would not dump 25+ units on the market – each would compete with the other.  When I rent multiple holiday weeks I list just one and when it’s gone I don’t remove the ad – I have more to rent with the same ad.

Now the RCI rentals I have taken the time to investigate suggest that RCI has priced them a little on the low side in order to move fast.  They must know their market – they are a billion dollar company – I can’t imagine that the nite cleaning crew is in charge of timeshare rentals – they know exactly what price to charge in order to quickly move their inventory.

To suggest otherwise would require many examples to add credence to the phrase “dumping or flooding the market” – it’s just to easy to proclaim without any supporting evidence.

I must return to the sad fact that many timeshares, especially non Gold Crown, deserve the Motel 6 rates charged – they’re dumps with a kitchen and a living room.  Even the villas that just qualify for Gold Crown status can be in 25+ year old resorts that sit next to brand new “all suite” hotels with mini kitchens.

If you want to see what renters think of your timeshare just look up your timeshare on http://www.tripadvisor.com/.  Many will proclaim that this is not a fair representation of their timeshare – it is from the eyes of the renter.

Conclusion: RCI knows what it is doing (renting timeshares) and the low rental rates reflect the little demand for these villas (at a specific time of the year).  No evidence has been presented to conclude otherwise.

As Jerry Maguire would say “Show me the numbers”.


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## Carolinian (May 23, 2006)

As to the numbers out there, I quoted Seasons figure of hundreds of thousands of weeks - and that was before many of the current RCI outlets even opened - which is a large enough number of constitute dumping.

Also, if you checked Redweek back when the RCI vendors could cheaply list, some  of them had that site loaded down with a wide variety of weeks - again clearly dumping.  Now it costs them too much to use that venue.

You also do no seem to grasp what the primary driver of demand is for timeshare.  It is location, location,and location, NOT gold crown status.


----------



## timeos2 (May 23, 2006)

*So ranking is back again?*



			
				Carolinian said:
			
		

> You also do no seem to grasp what the primary driver of demand is for timeshare.  It is location, location,and location, NOT gold crown status.



As we have reviewed before location does play a big role but you tend to overly discount the importance of resort status.  They both play a role and while I may overvalue Gold Crown, etc you clearly undervalue it.  In the real world away from the small group of timeshare fanatics here people tend to use US based resorts far more than overseas ones, prefer ranked vs unranked resorts and aren't big on off season use times as, in many cases, they cannot get around the need to use the school vacation periods and/or want to be on a beach in the warm weather not off season for fishing or golf. They don't use FF miles as they don't fly that often. They don't go to Europe or even Hawaii much as the airfare alone is prohibitive. Often they drive to locations to save money.  They would also pick a "known" vacation area such as Orlando or Las Vegas over taking a chance on a smaller, lesser known or more seasonal area. Thats why there is so much building  in those "overbuilt" areas - people go there by choice!   Most here on TUG and the other timeshare centric sites seem to lose sight of the fact that the posters are an extremely small sample of all timeshare owners and make up not even 1/10 of 1% of all vacationers.  We do not represesent the "average" timesharer in knowledge or use patterns. If we did there would be no developer sales and resales would be king. They aren't and we're not.  Judging the world by the standards here give a very false impression of the way things work.  And a greatly overated sense of importance in many cases.


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## Dave M (May 23, 2006)

I'm sure there are individuals and resorts that leave RCI from time to time, just as customers of any business move on to other vendors. However on a net basis, it's just the opposite, as actual totals would suggest. RCI's confirmed exchanges (as audited by one of the major CPA firms) have increased by about 50% over the most recently reported five-year period from 2000 to 2004. 

Thus, although it's evident that there are some unhappy people, RCI is still rolling along. Unless some court rules otherwise, there's no incentive - certainly not a financial incentive - for them to change their model.


----------



## PerryM (May 23, 2006)

*I like alligators better*

Carolinian,

I’m up for a count – someone name the web site(s) and I’ll take the time to get a count.  I’d like to know my competition better.

Hundreds of thousands of RCI weeks for rent sounds far fetched to me.  100,000 / 50 weeks means that RCI has 2,000 timeshares up for rent each week?  Just look at all the wacky information/data the main-stream media spouts out today that is refuted tomorrow.  Sounds like Seasons has an axe to grind with their “figure”.

200,000 timeshares per year is now 4,000 timeshares rented each week?

Look at MyResortNetwork and they have about 64,000 owners contacted about a rental/sale in the past year.  Let’s double that with RedWeek and we are at 128,000 owners contacted about rentals/sales in a year.  I’m guessing 50% of that is sales related leaving us with 64,000 owners contacted for rentals.

RCI does that in 16 weeks?

Unless this was a figure published by RCI, I’d say that the number carries with it a bias towards being outrageous to incite a visceral reaction.  Perhaps the class action lawsuits will pry this information out of them.

I, personally, would rather believe in the alligator in the sewer rumor over 4,000 RCI rentals a week rumor – the gator has more credibility with me. (Just kidding)

If we are talking about rentals, the renter has a completely different outlook to a timeshare than we owners.  They want daily maid service and room service – this is a common complaint from many folks reviewing timeshares in www.TripAdvisor.com which a leader in reviews of rental units.

I just find using these rumors as a basis for making decisions dubious at best; but fodder for lawsuits.


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## PerryM (May 23, 2006)

*Timeshare rentals are tough!*

It occurred to me that the great success that MyResortNetwork and RedWeek enjoy is do the fact that timeshare oriented folks rent thru these sites.  Same with VRBO.

Here are a few recent comments from renters from www.TripAdvisor.com about *Marriott’s Grande Vista*:

"poor customer service....can ruin a vacation" 

"Vacation Disaster!!!" 

"Small mistakes drag down what could be a great place..." 

"Worn out"

"beautiful grounds- room was-Eh, not so beautiful" 

"Not Impressed." 

"Great resort, poor front desk staff" 

I could go on and on but each of the above rated the Grande Vista 1 or 2 out of 5.


*Here’s some for Beach Place Towers:*

"The Worst Marriott" 

"This is a Marriott??" 

"A disappointing Marriott" 

"Not as expected, would not return" 

"Not up to Marriott standards...." 

"Who designed this garage?? Your blood pressure will rise." 

Again these folks rated BPT 1 or 2 out of 5.


I’ve been to both Grande Vista and BeachPlace Towers and they are top end Marriott timeshares.  There is nothing wrong with either but this is a sample of how non-timeshare oriented renters view timeshares.

How would you like to rent to those folks – they all think that these Marriotts are bottom of the barrel rentals.

(Look up your resort – it’s just as bad to those renters too)

Good luck RCI renting a timeshare to this crowd – and 200,000+ more of these per year to boot?

You can now start to see why RCI and II list the rentals at the bottom of the rental range – the market they are renting to really don’t find timeshares that exciting.


----------



## BocaBum99 (May 23, 2006)

There is absolutely no evidence that cheap timesharing rentals has had a negative impact on the timesharing market.  Timesharing is booming and has for several years.

If anything, cheap rentals are priming the pump and serving as yet another marketing vehicle for drawing more people into the market.  All timesharing companies use cheap rentals as a marketing tool.


----------



## BocaBum99 (May 23, 2006)

Carolinian said:
			
		

> Again, the 45-day window IS a FAIR EXCHANGE.



No, it isn't.  

I can prove empirically that the 45-day window does not represent fair exchange.

You define it as fair exchange and then self reference it.  In other words, the 45-day window is fair because I define it to be fair.


----------



## Dave M (May 23, 2006)

*In my capacity as an administrator....*

The discussion in this thread seems to be getting a bit testy. 

Make *your own* points and do so *politely* or please do not post. That applies to all of the TUG BBS, but especially here and now!

Attacking someone else, putting words in another's mouth, demanding that someone prove their statements are correct or otherwise being disrespectful because you disagree with a position taken (or for any other reason) is not permitted.

I predict that anyone who ignores this warning won't be happy with the outcome. I have had enough correspondence with many of you in this thread so that there should be no misunderstanding.


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## Carolinian (May 23, 2006)

You wonder about RCI's statistics. Their rentals to non-members are given regular exchange confirmations, so they may well be included in those numbers,even though they are not really exchanges.

Also, their total membership number, Weeks and Points combined, fell in the UK in the most recent year's figures compared to the previous year.  I have posted before about the comment in a resort newsletter in continental Europe about the resort's rep meeting with an RCI exec in their Paris office, where the RCI rep told them that RCI's deposits in Europe were falling.

There have also been some statistics in Cendant's corporate filings that show a decline in actual number of exchanges worldwide two years running, that have been discussed on these boards at length before.







			
				Dave M said:
			
		

> I'm sure there are individuals and resorts that leave RCI from time to time, just as customers of any business move on to other vendors. However on a net basis, it's just the opposite, as actual totals would suggest. RCI's confirmed exchanges (as audited by one of the major CPA firms) have increased by about 50% over the most recently reported five-year period from 2000 to 2004.
> 
> Thus, although it's evident that there are some unhappy people, RCI is still rolling along. Unless some court rules otherwise, there's no incentive - certainly not a financial incentive - for them to change their model.


----------



## Carolinian (May 23, 2006)

Who is going to buy the cow, when RCI is giving away the milk for pennies?
Have you followed some of the ''why buy when you can rent?'' threads on some of the t/s sites?

Cheap rentals hit timesharing at its weakest points - areas/times in oversupply.  Why own one of those when you can easily and dependably rent those weeks and the others they can trade for cheaper than m/f plus exchange fee plus exchange company membership fee?  I can tell you for a fact that resorts are already starting to see bailout from longtime offseason owners who trade, especially those who liked to use the rapidly diminishing 45-day window.  That is only going to get worse as time goes on, and it will raise the m/f's of the rest of us if the resorts aren't able to find new markets for those weeks other than to exchangers.

When I read your ''prime the pump'' argument, I think of a good friend of mine whose succesful county commission campaign I managed.  She had long marveled at the places I went with timesharing and had been talking about buying a week to do that herself.  I told her I would let her and her boyfriend use one of my deposits to do an exchange the week after the election to wind down.  Before we had sat down to find an exchange, her boyfriend had found Skyauction on the internet, and got a rental from RCI at a nice resort in Acapulco for a little over $200 total.  While in Acapulco, they did a tour at another timeshare resort, and at the sales pitch laughed at the salesman while telling him what they had rented their week for.  Since then, she has had no interest in buying, but has done several Skyauction rentals from RCI.
And she and her now husband still like to take the tours and laugh at the salesmen.  How, again, are these cheap rentals supposed to ''prime the pump'' for sales and ownership???????

Not all timeshare companies use cheap rentals as a marketing tool.  What is your basis for that contention?





			
				BocaBum99 said:
			
		

> There is absolutely no evidence that cheap timesharing rentals has had a negative impact on the timesharing market.  Timesharing is booming and has for several years.
> 
> If anything, cheap rentals are priming the pump and serving as yet another marketing vehicle for drawing more people into the market.  All timesharing companies use cheap rentals as a marketing tool.


----------



## Carolinian (May 23, 2006)

Please read the full content of my posts on this subject.  I have given the reasoning of why it is fair repeatedly.

Last minute inventory is distressed inventory.

That's why when they rent it for cash, the rental price is a lot less.  Ever hear of Last Call?  It only makes sense that as an exchange the price in trading power should also be reduced.

That's also why when you deposit a week at the last minute, its trading power is greatly reduced.  When the value is reduced for a last minute week coming in as a deposit, doesn't it make good sense that the value is also reduced for a week going out as an exchange?





			
				BocaBum99 said:
			
		

> No, it isn't.
> 
> I can prove empirically that the 45-day window does not represent fair exchange.
> 
> You define it as fair exchange and then self reference it.  In other words, the 45-day window is fair because I define it to be fair.


----------



## Carolinian (May 23, 2006)

*Re: So ranking is back again?*

Every location vs. ''quality'' thread I have ever seen on any timeshare board has had location leave ''quality'' in the dust!

In the real world, looking at the OBX t/s rental market (owner rental as oppposed to exchange company rental), the newest gold crown, BIS-Kitty Hawk has by far the lowest rental demand of any OBX t/s, and that is because of its poor location in the woods behind the Wal-Mart, a long way from the beach.  According to OBX t/s rental guru Judy Beard, even though BIS-KH owners often priced their rentals $100 cheaper than standard resorts on the beach, the BIS-KH weeks would not rent unless everything on the beach was taken.  From what I have observed online at RCI, the exchange demand runs the same way.  The market says location, location, location.

Yes, once one gets past the location hurdle, quality does become an important secondary driver.  Among the oceanfront OBX resorts, the two oceanfront GC's OBBC I and II (actually OBBC I slipped back to SC last time) have the highest demand on the OBX in the rental market.





			
				timeos2 said:
			
		

> As we have reviewed before location does play a big role but you tend to overly discount the importance of resort status.  They both play a role and while I may overvalue Gold Crown, etc you clearly undervalue it.  In the real world away from the small group of timeshare fanatics here people tend to use US based resorts far more than overseas ones, prefer ranked vs unranked resorts and aren't big on off season use times as, in many cases, they cannot get around the need to use the school vacation periods and/or want to be on a beach in the warm weather not off season for fishing or golf. They don't use FF miles as they don't fly that often. They don't go to Europe or even Hawaii much as the airfare alone is prohibitive. Often they drive to locations to save money.  They would also pick a "known" vacation area such as Orlando or Las Vegas over taking a chance on a smaller, lesser known or more seasonal area. Thats why there is so much building  in those "overbuilt" areas - people go there by choice!   Most here on TUG and the other timeshare centric sites seem to lose sight of the fact that the posters are an extremely small sample of all timeshare owners and make up not even 1/10 of 1% of all vacationers.  We do not represesent the "average" timesharer in knowledge or use patterns. If we did there would be no developer sales and resales would be king. They aren't and we're not.  Judging the world by the standards here give a very false impression of the way things work.  And a greatly overated sense of importance in many cases.


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## Aldo (May 23, 2006)

Just out of curiousity, does anyone actually know of any cases where a person rented a week for $264, or $500 or whatever, and then bought, at developer prices, MF, and all?

Seems like an almost impossible sale, to a person savvy enough to go to these sites and rent.


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## Joe M (May 23, 2006)

Carolinian said:
			
		

> There have also been some statistics in Cendant's corporate filings that show a decline in actual number of exchanges worldwide two years running, that have been discussed on these boards at length before.



The total number of exchanges has been increasing. The number of Weeks exchanges has fallen while the number of Points exchanges has increased by an even greater number.

I keep copies of old RCI Disclosure Guides in .pdf format for both Weeks and Points on my computer so that I can track exchange statistics. RCI and II are required to disclose their exchange statistics by statute. I have the last three reported annual figures for RCI:

2002>>2.49 million exchanges

2003>>2.53 million exchanges

2004>>2.61 million exchanges

The corporate filing you are referencing (I assume - please advise and link if it is some other document) is the Cendant 2004 Form 10-K. 

The 2004 Cendant Form 10-K reported a drop in exchanges of 2%. That exactly matches the Disclosure Guide figures for RCI Weeks:

2003>>2.159 million Weeks exchanges

2004>>2.112 million Weeks exchanges

But the Disclosure Guide figures for RCI Points show:

2003>>.370 million Points exchanges

2004>>.496 million Points exchanges

so when the figures are combined there is an overall increase in exchanges.


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## Dave M (May 23, 2006)

Thanks, Joe. Those numbers match mine. And they are exchanges only; no rentals, unless the auditors are lying; not something that's likely these days.


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## PerryM (May 23, 2006)

*House of cards*

Does anyone here think that renting of timeshares will go away?

My feeling is that the rentals will increase and eventually to the point that the developers will feel the pressure (or lack of pressure to buy) and start to reduce the rate of price increases and perhaps a price freeze for several years.  A drought could overtake the developers as they sit by a few years and wait out the storm of existing timeshares being rented for peanuts.

There is NO reality to the prices charged by the developers – it’s based on 50% sales and marketing costs that could be reduced if they really wanted to “hold the line” for price increases.  The remaining 50% is, it self, bloated and only 50% of that represents the actual cost to buy and build the resort – 25% is left for the corporate coffers.

To all of you who think the oil companies are greedy – the timeshare industry is so full of fat that a good trimming is in order.

Does anyone really think that the “Scheduled 1% price increase on Friday” has ANY basis in reality?  Just a spread sheet printed out months ago to be used as a tool to scare prospective buyers into signing the bottom line.  That 1% can’t be tracked back to reality in any way.

I think that timeshare rentals may be the best thing to hit the timeshare industry “Up side the head” in decades.  Timeshares are about 45 years old and were created by a developer to unload unsold condos at a resort.

With the “hocus-pocus” world that timeshares live in, the timeshares themselves may cause the breaks to be applied to the developers and rentals could be the cause.

I keep hearing of a “real estate bubble”, perhaps there is a “Timeshare bubble” that is being slowly deflated by the timeshares themselves.

The prices charged by the developers or even the resale market are so far from reality that a house of cards has more stability.


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## Carolinian (May 24, 2006)

Dave M said:
			
		

> Thanks, Joe. Those numbers match mine. And they are exchanges only; no rentals, unless the auditors are lying; not something that's likely these days.



Nobody has ever answered the question posed before where Points Partner transactions are included in the totals.

Also, auditors follow the clients definitions, and if RCI defines the rentals as exchanges, thats exactly how they will show up in the auditors reports.

Further Points totals can be misleading because when you have split weeks, one week counts two or more times.

As reported earlier, the TOTAL number of Points and Weeks MEMBERS in the UK is declining.


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## Carolinian (May 24, 2006)

*Re: House of cards*

Hapimag was the creator of timeshare.  It is a points-based mini-system that is still around.  I have never heard anyone claim that Hapimag invented timeshare to ''unload condos at a resort''.  Care to share your info on the early history of Hapimag????

What should bring exchange company rentals to a screeching halt are the class action lawsuits.  That will stop the massive dumping that is distorting the rental market, the exchange market, and the resale market.  Exchange company rentals are a massive conflict of interest that should be either prohibited by law or at least required to be disclosed in a meaningful way in extreme detail.  I am encouraged by what I have learned about some of the people involved in these lawsuits, and I do not beleive that they are going to let RCI go with a slap on the wrist and a bunch of money for the lawyers, as some of the regular RCI defenders on these boards anticipate.

There is absolutely nothing wrong with ''rentals'' themselves when they are from timeshare owners.  The problem is with the conflict of interest of EXCHANGE COMPANY RENTALS from exchange deposits to the general public and the market distortions that creates.






			
				PerryM said:
			
		

> Does anyone here think that renting of timeshares will go away?
> 
> My feeling is that the rentals will increase and eventually to the point that the developers will feel the pressure (or lack of pressure to buy) and start to reduce the rate of price increases and perhaps a price freeze for several years.  A drought could overtake the developers as they sit by a few years and wait out the storm of existing timeshares being rented for peanuts.
> 
> ...


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## PerryM (May 24, 2006)

*A short history*

Carolinian,

As Curley would say “eeeh, certainly”: Link: http://en.wikipedia.org/wiki/Timeshare

http://www.thetimesharebeat.com/whatis.htm
http://www.holidayconcepts.com.au/home/history.aspx
http://www.rciaffiliates.com/industryOverview/timeshareHistory.asp?isWinIE=true


The background of that area has a glut of condos being built in the French Alps in the 1960’s – and the building condo bubble burst – how to unload a building full of condos when folks won’t buy a condo?  This information was gleamed from doing some homework as to why a developer would bypass selling his condo to 1 owner and chose, instead, to sell to 50 owners – talk about 50 times the work!

The marketing was genius – basically “Why rent when you can own?” – that slogan is used everyday at hundreds of timeshares by thousands of salesreps – it works well.  (Of course real estate is implied instead of pre-paid vacations; but at least it's not a flat out lie)

When I eventually stumble back upon the exact link, rest assured that I’ll be certain to post it.  I remember finding that factoid by searching for “alps” “condo” and something else that escapes my mind right now.  Typing in "Timeshare history" will not give you the correct link.

Here is a similar situation in Hawaii: http://starbulletin.com/1999/06/08/business/story1.html

Just about every market cycles from high to low; when the market bottoms out is when creative new solutions pop up.

Has the same hit the timeshare world?  Too many timeshares out there and the first signs are owners/exchange companies dumping rentals at fire sale prices to pay the MFs or other expenses?   Hmmm.

Has the 45 year old experiment with timeshares about to morph into something else?  Stay tuned.


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## Dave M (May 24, 2006)

Carolinian said:
			
		

> Also, auditors follow the clients definitions, and if RCI defines the rentals as exchanges, that’s exactly how they will show up in the auditors reports.


Six years ago, I might not have agreed with you, but I would have conceded that such a result could be possible. However, I don't believe there is any chance today that your speculation could be correct.

I spent 31 years, 22 as a partner, in one of the several largest international CPA firms, which still exists as one of the “Big Four” CPA firms. As a still-practicing CPA, I follow closely the changing regulatory and reporting requirements for my profession. Also, because I currently engage two of the Big Four firms to provide services for the entity I work for, I follow closely their policies on reporting requirements.

Thus, I can confidently state that after the indictment that ended Arthur Andersen's existence and some of the fallout over other reporting issues, none of the Big Four CPA firms would intentionally issue an audited report that would have information that a reasonable person would suggest to be misleading. 

Further, the RCI audited report on exchanges is designed to comply with the reporting and disclosure laws of a number of states. Florida's laws, for example, make it very clear what an exchange is and what information pertaining to those exchanges must be disclosed in the audited report. Accordingly, the audited report is required to follow the legal definitions, not, as you suggest, the "client's definitions".

Thus, if the term "exchanges" in the report (the most recent one is publicly available at RCI's site) were to include rentals as you suggest it might, that would definitely be disclosed in the report. Since it isn't, you can be very sure that it does not include rentals.

How RCI handles the paperwork for rentals and exchanges is a much different issue than what a CPA firm must report on exchanges. No major CPA firm today would be willing to risk the entire existence of their 30,000-employee firm over a relatively inconsequential definitional issue such as this.


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## timeos2 (May 24, 2006)

*If the facts say it - it may be true*



			
				Dave M said:
			
		

> Thus, if the term "exchanges" in the report (the most recent one is publicly available at RCI's site) were to include rentals as you suggest it might, that would definitely be disclosed in the report. Since it isn't, you can be very sure that it does not include rentals.
> 
> How RCI handles the paperwork for rentals and exchanges is a much different issue than what a CPA firm must report on exchanges. No major CPA firm today would be willing to risk the entire existence of their 30,000-employee firm over a relatively inconsequential definitional issue such as this.



I really hate it when the facts ruin a perfectly good theory. RCI is adding members, maintaining or increasing trades and renting the excess or unequal times all while making money. Sounds like a company doing what it needs to be successful in a changing marketplace. Now if only the resorts would realize things aren't the same as 30 years ago and adapt to the world of today we could be looking at a boom for timeshares. Those that ignore the winds of change or try to recreate the bad old days will lose.


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## Carolinian (May 24, 2006)

It is not the market that has changed but RCI's approach to it.  A few years ago I posted in its entirety on the old TUG boards a letter from one of the top RCI execs in the very early days of points.  He did not write about adapting to changing market conditions.  He wrote of using RCI's power as a ''market leader'' to ''transform'' the market.  

As to RCI's numbers, you still have a shell game when they count a single week two or more times as seperate exchanges due to split weeks.  Also, is a Points Partner transaction counted as an exchange or not?


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## reddiablosv (May 24, 2006)

Dave M said:
			
		

> Thanks, Joe. Those numbers match mine. And they are exchanges only; no rentals, unless the auditors are lying; not something that's likely these days.



Dave,   I think you will find that RCI is defining their EV and Last Call rentals as exchanges.  They have been doing this most likely to  evade taxation and conceal the scope of their rental business.  As we all know, RCI has recently started to collect taxes on some of their rentals.  This is new policy for them probably implemented on the advice of their attorneys to avoid prosecution for tax evation.   When you rent an EV the confirmation you receive calls it an exchange.   Why don't you think RCI's accountants are counting it as an exchange?   Ben


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## reddiablosv (May 24, 2006)

Dave M said:
			
		

> Six years ago, I might not have agreed with you, but I would have conceded that such a result could be possible. However, I don't believe there is any chance today that your speculation could be correct.
> 
> I spent 31 years, 22 as a partner, in one of the several largest international CPA firms, which still exists as one of the “Big Four” CPA firms. As a still-practicing CPA, I follow closely the changing regulatory and reporting requirements for my profession. Also, because I currently engage two of the Big Four firms to provide services for the entity I work for, I follow closely their policies on reporting requirements.
> 
> ...



Dave,  the above is a great description of what an acounting firm is supposed to do in an audit, but what is the reality if the case of RCI?  Something has changed in the way RCI is treating its rentals.   Until recently, they did not charge tax!  I presume, they did not pay tax!   Why?  Because they maintained the charade that it was not a rental but an exchange.    Now, this year, perhaps we will see a change in how the accountants tabulate the exchange vs. the rentals.    Time and lawsuits with tell.  IMHO, Ben.


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## geekette (May 24, 2006)

"There is absolutely nothing wrong with ''rentals'' themselves when they are from timeshare owners. The problem is with the conflict of interest of EXCHANGE COMPANY RENTALS from exchange deposits to the general public ..."

EXACTLY.

I don't think that a confirmation saying Exchange means that RCI calls it an exchange internally.  They have to track the monies so they would have to be keyed differently.  I really don't believe they would risk calling everything an exchange.  I think, instead, that every transaction goes thru the same printing process that has always been there.  

On the tax issue, it is possible that it's as Madge says:  they always paid the tax, but that was difficult based on different states.  Now they don't include it in the price and add it in later.  So, is the tax based on YOUR state or the TS?


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## timeos2 (May 24, 2006)

*No change?*



			
				Carolinian said:
			
		

> It is not the market that has changed but RCI's approach to it.  A few years ago I posted in its entirety on the old TUG boards a letter from one of the top RCI execs in the very early days of points.  He did not write about adapting to changing market conditions.  He wrote of using RCI's power as a ''market leader'' to ''transform'' the market.
> 
> As to RCI's numbers, you still have a shell game when they count a single week two or more times as seperate exchanges due to split weeks.  Also, is a Points Partner transaction counted as an exchange or not?



Since 1980 or even 1990 the timeshare market hasn't changed? 

How many resorts were there in 1990?
How many large resale markets covering the world?
How many developers with 40+ resorts and internal trading?
How many large points systems?
Was it easy for an owner to correspond with other owners?
Was it easy for an owner to advertise a sale?
Was it easy to find rentals of any kind?

The world has changed dramatically since 1990 and certainly from before that. No where more than in timeshare. The ability to use these types of forums to have owners from around the world compare notes and the sites like eBay that offer easy ways to advertise sales and rentals.  The rise of the mini systems and points in general.  To say that any exchange company, developer and HOA doesn't need to adjust with all this happening around them is completely non-sensical. A few seem to want to blame RCI for the cahnges they are reacting to. It would be very tough to prove them to be the cause of the changes with all those other factors beyond their control. 

If owners could have interacted as easily as they can today in the 80's & 90's the whole timeshare landscape might be completely different today.  It took the Internet to expose the flaws in the old ways.  Now the change is occcurring.


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## PerryM (May 24, 2006)

*Voodoo*

I love the fact that the same folks who cast voodoo spells of secret “Trading Power” on a timeshare reservation (The Week exchange companies) are now supposed to conduct business in the open?

HELLO – the reason the Week system needs the secret trading power formulas is really simple – the entire program is a sham that works with smoke and mirrors.  We all know that Red weeks aren’t really all Red but Pink to Crimson to Candy Apple Red.

Points - this was RCI’s big mistake – Points opened the world to the huge discrepancies of Gold Crowns and then Silver Crowns and then what’s left over.  The “Common folks” owners could actually see that their villa was a hunk of junk and not worth the $900 per year MF.  That’s hidden in Weeks with the rumors of fantastic exchanges keeping owners in the system.  (Just who spreads those rumors anyway?)

And now folks want RCI and II to conduct their business in the open?  Good grief that just can’t happen and expect RCI to survive.

Like it or not you all agreed to the RCI secret trading rules and plans when you joined and just like with Dracula – the light of truth will make it shrivel up and blow away.

If there is an acceleration in RCI’s renting of timeshares instead of exchanging them this is a direct byproduct of the loony-toon business plans needed to make a loony-toon business work.

Do we really need the exchange companies anymore?  I know, the same folks who can’t get the 12:00 from their VCR are going to be stuck with the exchange companies but if you can run a computer you’re released from their voodoo spells.


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## taffy19 (May 25, 2006)

*Re: Voodoo*



			
				PerryM said:
			
		

> Do we really need the exchange companies anymore? I know, the same folks who can’t get the 12:00 from their VCR are going to be stuck with the exchange companies but if you can run a computer you’re released from their voodoo spells.


I like that quote, Perry but I still would like to see Dave M's answer to reddiablosv's two posts, #48 and #49 too in this thread. This is something new that RCI started to collect just recently. Isn't this odd?

My opinion is to educate your HOA at the resort where you own and have them get on the ball and rent the timeshare nights or weeks for the benefit of all the owners in this resort, if the exchanges are not coming or are not up to your expectations either. Have them rent it for you or rent it out yourself unless the time period and/or resort is so bad that nobody wants it for any price. In that case, dump it with RCI.  

Also, have your HOA get affiliated with several independent exchange companies too. Normally, if you own something, you should be able to do with it what you want and is to your best advantage. However, some of the resorts do not allow this because they want to eat the cake and have it too and certainly so if the developer and exchange company are connected to the same parent company.  They have their hands in your pocket but it will change with the Internet because people are starting to google for information and it will be no secret anymore about the re-sale market or cheap rentals too. In this case, who will be left to still buy from a developer once the truth is out? Very few people will be willing to pay these high prices after that unless it has a certain benefit to you.

Imho, all resorts have the same problem that some time periods rent better than others so this problem exists for a point-based system as well as for a week-based system too unless you buy at a location where all 52 weeks are in high demand and where there is not an over supply of timeshare resorts either. Las Vegas is heading that way too besides Florida and Hawaii may be one day too if it continues like it is now but the West Coast is not overbuilt yet or even coming close to it because of the California Coastal Act. It is very difficult to get a timeshare resort built here but lately there have been some new permits issued, as we have read here, however, the demand is very big. If you buy at a resort where you like to vacation, none of these problems are any concern to you. JMHO.


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## PerryM (May 25, 2006)

*Exchange companies are no longer needed*

The real solution to the exchange companies lies within your resort and the HOA - we don't need exchange companies anymore.

The resorts hire a management company to run the daily operations, one of which is reservations and renting owner weeks.  Simply expand this function and we have the solution to the voodoo practices of the exchange companies – CASH.

If your resort just dumped the exchange companies any owner not needing their unit would place their unit up for rent with the resort – or rent it themselves.

Cash, in the form of rent, is the universal exchange medium that RCI and II have been avoiding.  RCI Points is a private currency – just do away with the “private” part and get to currency – US dollars in the form of rental cash.

The developers who either run the HOA or use their influence don’t want this – that $35,000 2BR villa with a $900 MF they just sold you has weeks that generate $3,600 (4 times MF) in rental income and weeks that can’t be rented for even $900 (The MF).

However, the 2 owners paid the same amount of money for them and the same MF.

The owners would quickly pick up on the fact that just about each week commands a different rental amount and the doggy weeks cost just as much to buy as the hot weeks.

Therein brings up the voodoo of a week program – the solution is simple Points.  When timeshares started 45 years ago this is the exact model the original timeshares used – Points.   Weeks quickly were adopted since the states required that an owner be assigned to each of the 52 weeks of a year.  Computers weren’t on every desk top or lap 45 years ago and the states had to use weeks for ownership.

Much of the problem with the inequalities built into timeshares revolve around this central problem – weeks are inferior to points in the timeshare model.  The exchange companies just magnify this problem and must hide it with voodoo.


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## Carolinian (May 25, 2006)

*Re: No change?*

We are talking here about the EXCHANGE market.  Your response blurs in the sales market.

RCI's letter to resorts that I posted some years ago when Cendant first started transforming RCI spoke of Cendant using it power as a ''market leader'' to ''take timeshare to the mass market''.  Obviously this was a euphemism for rentals to the general public.  RCI never alluded to anything in the market forcing them to do so, only that they chose to use their market dominance to do so.

RCI's own words tell the story here a lot better than your theories.



			
				timeos2 said:
			
		

> Since 1980 or even 1990 the timeshare market hasn't changed?
> 
> How many resorts were there in 1990?
> How many large resale markets covering the world?
> ...


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## Carolinian (May 25, 2006)

*Re: Voodoo*

The biggest fallacy in the argument of [those who] seem to always jump to RCI's defense is the notion that the main driver of demand is Gold Crown or Silver Crown status.  The main driver of demand is location, and only after crossing the location hurdle does the quality issue come into play.  A standard resort in London, Paris, San Francisco, Sanibel, Aruba, Tuscany, etc. will always have a supply/demand curve that is light years better than the nicest Gold Crown in overbuilt Orlando, Branson, or Williamsburg or the cornfields of Iowa.

Oh, and you think direct exchanges by computer are so superior to being able to bank, save, and have a wide variety in the exchange system to choose from?  Direct exchanges are unlikely to have an impact against banking systems.

The reason trading power numbers have to be non-published in a market-based system like Weeks is that there are limitations on being able to publish all of the numbers, especially in a paper and ink format.  The calcified numbers of RCI Points which cannot adjust for everchanging supply and demand factors are a giant step backward.  Overaveraging by lumping too many dissimilar weeks together with the same value because of space limitations for publications unfairly rewards some with lesser weeks and cheats some with better weeks, but that is the nature of Points limitations on publication space.

The acceleration of RCI's rentals is a byproduct on only one thing - CENDANT's GREED.

I agree that all red weeks are not the same.  That is why I have long objected to RCI Points fraudulent generic grids for crossover exchanges giving all red weeks of the same size and award status and region the same value.  That is a very clear cut case of RCI cheating its Weeks members to pander to the Points members.

Yes when an exchange company engages in the massive conflict of interest involved with renting exchange deposits to the general public, they should be required to make extremely detailed disclosures of those activities.

Dracula is probably a better personification of RCI Points in its relationship with RCI Weeks - sucking the lifeblood right out of it.  And cherry picking Weeks inventory for rentals to sustain the lousy Points Partner program for Points members is the biggest fraud.

A non-published trading value system works fine as long as there is no incentive for the entity running it to cheat.  Rentals from the exchange pool to the general public is a HUGE conflict of interest and incentive to cheat.  When someone has their hand in the till, they are likely to have their thumb on the scales too!  Such conflicts of interest have a massive corrupting influence on any exchange system, but particularly a non-published one.  Becuase you seem to hate a weeks-based system and it is obvious that exchange company rentals from the spacebank are a spanner in the works for a weeks-based system, does that explain your advocacy of exchange company rentals?






			
				PerryM said:
			
		

> I love the fact that the same folks who cast voodoo spells of secret “Trading Power” on a timeshare reservation (The Week exchange companies) are now supposed to conduct business in the open?
> 
> HELLO – the reason the Week system needs the secret trading power formulas is really simple – the entire program is a sham that works with smoke and mirrors.  We all know that Red weeks aren’t really all Red but Pink to Crimson to Candy Apple Red.
> 
> ...


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## Carolinian (May 25, 2006)

*Re: Exchange companies are no longer needed*

Check your history.  Swiss based Hapimag created timeshare with a points-based mini-system.  French developers countered with the weeks based system, which appealed to more buyers, and therefore became dominant.  When timeshare crossed the Atlantic, it was the dominant weeks-based system, preferred by the market in Europe, that came over. Weeks didn't come from the states, they came from French timeshare developers.  This is one case where we can legitimately say ''Vive La France!''

Points has a bigger dog week problem than Weeks.  One of the big criticisms of Sunterra with the class action in Scotland and the proposed one in England is the low point packages.  How do Points salesmen try to sell such Weeks here?  They hype the 9000 point crossover trades into the Weeks 45-day window.  It is Weeks that is propping up Points in this regard.  If RCI kills Weeks, they will have no way to unload the offseason Points weeks.

The voodoo of the Points system is the rigged numbers to favor certain types of resorts and hose other types (the term ''sold out resort'' has a sinister double meaning in the corrupt world of RCI Points), to freeze numbers rather than adjusting for supply and demand, and to lump too many dissimilar weeks together in an orgy of  overaveraging caused by a limitation on publication space.




			
				PerryM said:
			
		

> The real solution to the exchange companies lies within your resort and the HOA - we don't need exchange companies anymore.
> 
> The resorts hire a management company to run the daily operations, one of which is reservations and renting owner weeks.  Simply expand this function and we have the solution to the voodoo practices of the exchange companies – CASH.
> 
> ...


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## PerryM (May 25, 2006)

*viva la France!*

“And if you believe that, I’ve got I’ve got a Florida timeshare to sell you”…

A version of that joke has been around as long as timeshares.  The states that originally had to deal with timeshares, Hawaii, Florida, etc 40 years ago faced a huge problem:

How do we prevent a timeshare developer from overselling the resort – over and over and over again?  (Not that a timeshare developer would ever consider this)  No micro-computers back then for an easy computer solution.

Solution: each unit MUST be a week long and ONLY 52 Owners could be assigned to each condo.  Hawaii still has the rule and that’s why WorldMark can’t sell their points (credits) in Hawaii – the sales gallery built in the Kihei Maui resort sits empty to this day.  FF can sell there since they tie their points to deeded weeks.

That’s the reason bureaucracies want weeks – it’s a “no brainier’ for them.  The public servant has 52 lines to write 52 owner names for each condo – no thinking required.

Citing France as a beacon of business wisdom is dubious at best – just look at their 32 hour work week and its eye watering unemployment consequences Link: http://www.economist.com/business/displayStory.cfm?story_id=2967451

But, it had never occurred to me that the scourge of timeshare weeks can be traced back to France – how fitting.  (Just kidding)

More than likely the same bureaucratic logic that drives our state officials drives France’s too.

THE best example of  faulty Weeks foundation in timeshare usage is Marriott’s Maui Ocean Club.  There weeks 1 – 51 are ALL red weeks (52 is a screwy week that I’ve yet to get a grasp on)  Week 51 cost’s the same to own as an early November week or as the 4th of July week, or as whale watching weeks – sheer lunacy on Marriott’s part – but a no brainier when it comes to easier accounting.

Now, on top of all of this, try to have owners exchanging weeks – can you imagine a Maui Marriott owner who has multiple weeks and reserved week 51 13+ months out happily exchanging that week for a doggy early November week?  Well magnify this screwy scenario by a million times and you have RCI and II.  Points would have easily solved this problem.

Rental rates, however, level the playing field – that week 51 in a 2BR in Maui probably rents for $5,000 and the early November for $2,500.  Currency in this situation leveled the playing field – it always does.

So bypass the exchange companies who must use the screwy weeks model and convert your timeshare into a currency that can then be used to rent other timeshares (or homes or condos) – US dollars.  Take advantage of the byproduct of a voodoo based RCI system and rent those cheap RCI rentals that everyone is citing.

Use your opponent’s weaknesses to your advantage - I said that.


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## Dave M (May 25, 2006)

*Re: Voodoo*



			
				iconnections said:
			
		

> I still would like to see Dave M's answer to reddiablosv's two posts, #48 and #49 too in this thread.


Several have suggested here that the exchange totals reported in RCI's audited exchanges report might include rentals in the definition of exchanges, thus distorting the numbers.

Considering the very clearly worded required disclosure laws of 15 different states, I believe it's clear that RCI would be issuing a fraudulent report if it included rentals in those reported numbers, particularly since the report states that it complies with the laws of those states! Deloitte and Touche, the CPA firm issuing an opinion on those numbers, would also likely be guilty of fraud if it allowed rentals to be included in those numbers. The last time a major CPA firm (Arthur Andersen) was convicted of a criminal act, the conviction acted as the execution for the firm. 28,000 people in the firm lost their jobs as a direct result of that conviction.

Thus, no matter how much some of those here would like to believe that two major entities would engage in such open illegal recklessness, I firmly believe there is zero chance that rentals are included in such audited numbers.

Look at it from another standpoint. With RCI going down an ever-increasing rental path, it would be foolhardy to include rentals in such numbers. RCI has nothing to gain by improperly including them. Those rentals will eventually stand out as being significant. To fraudulently include them in the term "exchanges" would invite an eventual Ponzi-type exposure. Shareholders care about profits, not how many exchanges the company has. And how many RCI members even have a clue about (or care about) such total exchange numbers? Probably a very, very small percentage. And what could Deloitte and Touche possibly gain by participating in a fraud? Nothing. But it stands to lose its very existence if it participates in such an alleged fraud.


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## "Roger" (May 25, 2006)

Carolinian said:
			
		

> Nobody has ever answered the question posed before where Points Partner transactions are included in the totals.
> 
> ....


This will be at least the fourth time that I have offered this quote.  (2004 Annual Report) 

"Timeshare points and rental transaction revenue (*rentals of unused timeshare inventory*) grew $24 million (28%) driven principally by an 18% increase in points and rental transaction volume and a 14% increase in the average price per rental transaction. Revenue trends reflect the expected shift in the RCI timeshare membership base toward a greater mix of points members from traditional one-week timeshare members. *Points transactions are those executed by points members for other than a standard, one-week stay at an RCI timeshare property. Rental transactions are rentals of unused timeshare inventory to RCI members and non-members*."

Note that it also answers the question about Extra Vacations.  If the naysayers have any information to the contrary, contact the SEC.  

(Finally, I am tired of tracking this quote down every several months when told that no one has been able to answer how Points transactions are handled in the RCI reports.  It is going on my hard drive for easy access so that the next time I can find it quicker.)


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## timeos2 (May 25, 2006)

*Re: No change?*



			
				Carolinian said:
			
		

> We are talking here about the EXCHANGE market.  Your response blurs in the sales market.
> 
> RCI's letter to resorts that I posted some years ago when Cendant first started transforming RCI spoke of Cendant using it power as a ''market leader'' to ''take timeshare to the mass market''.  Obviously this was a euphemism for rentals to the general public.  RCI never alluded to anything in the market forcing them to do so, only that they chose to use their market dominance to do so.
> 
> RCI's own words tell the story here a lot better than your theories.



The exchange market is non-existant without the false pretense of week for week trade.  As noted in a response above there isn't a flat line demand for each resort each day of the week. Given a free choice many visitors would take the weekends and maybe Friday and Monday but leave the middle of the week unused. The full week systems tried to give equal value to the full 7 days with mixed results. Points systems can get premiums for the higher demand days and take less for the middle periods. If the guest only wants the weekends they pay more in points while leaving a discounted value in the mid-week for those that can take advantage of it. 

You think all the changes I listed didn't effect the exchange market as well? 

As for the companies that "bailed" out of RCI when they implemented a new and more sustainable model those companies had already done the same thing in most cases (created a points based exchange of their own).  They were merely using RCI to cherry pick time or resorts they didn't offer internally with a preference to their owners. They embraced II as that goup always seems willing to grant favored status to anyone with a name they can tout without admitting there will be little or no inventory actually available from that group to the average II member. I have posted before that the current II model will fail as the names decide to do exchanges for themselves cutting out II as the middleman. 

Blaming RCI for recognizing change and acting is not a realistic view. RCI didn't create the change but did react to it. They are no where near influental enough to change the course of vacationing by adding a few timeshare rentals to the mix of available options.


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## Dave M (May 25, 2006)

Rather than continue editing strong remarks that are less than courteous, I am closing this thread.


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