# No housekeeping worth this much of a premium?



## gmarine (Mar 25, 2009)

This auction is double the recent going rate for WM points. Am missing something. Why? Just for having no housekeeping fees? 


http://cgi.ebay.com/NO-HOUSEKEEPING...3286.c0.m14&_trkparms=66:2|65:1|39:1|240:1318


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## ecwinch (Mar 25, 2009)

I am with you, but I guess you have to look at it from a supply/demand standpoint and savings over the long run. Assuming a cost avoidance of $500 per year, it would seem to take 10+ years for the ROI.

If you transfer points into a NHK acct, can you use those points without incurring the housekeeping fee?


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## LLW (Mar 26, 2009)

gmarine said:


> This auction is double the recent going rate for WM points. Am missing something. Why? Just for having no housekeeping fees?
> 
> 
> http://cgi.ebay.com/NO-HOUSEKEEPING...3286.c0.m14&_trkparms=66:2|65:1|39:1|240:1318




They were worth much more before, and have gone lower recently with the uncertain, lowering timeshare resale market. Their worth depends on the owner's usage pattern. People who take a ton of short trips can save $500 to $1,000 a year, since there is no cap on HK fee increases in the WM governing documents (unlike maintenance fees which have a 5% cap). Assuming a permium of $5,000, that would be a 10%-20% annual return. You just have to make sure that you will get the principal back when you sell. However, most recent NHK buyers are WM enthusiasts who don't plan to sell. 

A NHK account with a reasonable number of credits (about 30,000) have maintenance fees that approximate Bonus Time fees. So NHK owners save on time spent looking for BT and can book at BT-like rates up to 13 months in advance.

Having a NHK also gives freedom in booking without having to worry about Wyndham messing up on the refunds of HK fees on cancelled reservations. The majority of WM reservations get cancelled because of its extremely liberal cancellation policy (reservations made 13 months in advance have a cancellation deadline of 30 days before check-in, with no penalty).

I expect snipers to push the premium even higher before the auction closes.


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## LLW (Mar 26, 2009)

ecwinch said:


> If you transfer points into a NHK acct, can you use those points without incurring the housekeeping fee?



No. You need to make sure that you use those points for big trips, and buy a token to use with them if necessary. That's a recent change.


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## cotraveller (Mar 26, 2009)

LLW said:


> People who take a ton of short trips can save $500 to $1,000 a year, since there is no cap on HK fee increases in the WM governing documents (unlike maintenance fees which have a 5% cap).



It is statements like that which put NHK accounts in the category of things that should be seen but not heard.  The savings of $500 to $1,000 are not the result of free housekeepings, they are passed on to and paid  for by other owners.  While the $$ amount is very small in the overall picture of things, it is very annoying to most owners to hear someone bragging about those types of savings.  They save, the rest of the owners pay.


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## LLW (Mar 26, 2009)

cotraveller said:


> It is statements like that which put NHK accounts in the category of things that should be seen but not heard.  The savings of $500 to $1,000 are not the result of free housekeepings, they are passed on to and paid  for by other owners.  While the $$ amount is very small in the overall picture of things, it is very annoying to most owners to hear someone bragging about those types of savings.  They save, the rest of the owners pay.




Actually, they save as a return on the premium that they paid to owners who bought before HK fees were put in. The free HK is not free to NHK account owners who have paid a premium buying them on the resale market. As a result, Wyndham makes less - all Worldmark profits go to Wyndham under current conditions. On the other hand, some current Wyndham WM VIPs who have bought from the Developer under the TravelShare program get free HK just because they bought from the Developer, not because there is no HK fees charged now.

This was not intended to be a bragging - it was intended to be an analytical answer to George's question on why there is a premium on NHK accounts, which anybody, including you, has the choice to pay for this account, at this juncture, at a price lower than it has usually been in the recent past. If you read it as a bragging, it was not because I have written or intended it to be that way.  I didn't even say whether I had a NHK or not.   And actually, I may not even have posted if somebody else had posted an analysis. Fred, do you think George's question should go unanswered? Too bad you didn't answer it before I did.  That was my answer, and I am sticking to it.


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## gmarine (Mar 26, 2009)

LLW said:


> They were worth much more before, and have gone lower recently with the uncertain, lowering timeshare resale market. Their worth depends on the owner's usage pattern. People who take a ton of short trips can save $500 to $1,000 a year, since there is no cap on HK fee increases in the WM governing documents (unlike maintenance fees which have a 5% cap). Assuming a permium of $5,000, that would be a 10%-20% annual return. You just have to make sure that you will get the principal back when you sell. However, most recent NHK buyers are WM enthusiasts who don't plan to sell.
> 
> A NHK account with a reasonable number of credits (about 30,000) have maintenance fees that approximate Bonus Time fees. So NHK owners save on time spent looking for BT and can book at BT-like rates up to 13 months in advance.
> 
> ...



I understand now. Thanks for the explanation.


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## cotraveller (Mar 26, 2009)

LLW said:


> Actually, they save as a return on the premium that they paid to owners who bought before HK fees were put in. The free HK is not free to NHK account owners who have paid a premium buying them on the resale market. As a result, Wyndham makes less - all Worldmark profits go to Wyndham under current conditions. On the other hand, some current Wyndham WM VIPs who have bought from the Developer under the TravelShare program get free HK just because they bought from the Developer, not because there is no HK fees charged now.
> 
> This was not intended to be a bragging - it was intended to be an analytical answer to George's question on why there is a premium on NHK accounts, which anybody, including you, has the choice to pay for this account, at this juncture, at a price lower than it has usually been in the recent past. If you read it as a bragging, it was not because I have written or intended it to be that way.  I didn't even say whether I had a NHK or not.   And actually, I may not even have posted if somebody else had posted an analysis. Fred, do you think George's question should go unanswered? Too bad you didn't answer it before I did.  That was my answer, and I am sticking to it.



I have no problem with answering the original question.  I have a problem with the fact that the housekeepings are not free.  It is not true that the NHK acounts cost Wyndham, they cost other owners.  The housekeeping expense exists and someone has to pay for it.  It is the other owners who pay through their housekeeping fees.

I find it interesting that many of those purport to be looking out for the owners interests and who complain about the developer doing things at the expense of owners are the same people who use their NHK accounts for their individual benefit at the expense of other owners.  It might make one wonder just whose interests they are most interested in protecting.


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## ecwinch (Mar 26, 2009)

LLW said:


> People who take a ton of short trips can save $500 to $1,000 a year, since there is no cap on HK fee increases in the WM governing documents (unlike maintenance fees which have a 5% cap). Assuming a permium of $5,000, that would be a 10%-20% annual return.
> 
> A NHK account with a reasonable number of credits (about 30,000) have maintenance fees that approximate Bonus Time fees.
> 
> I expect snipers to push the premium even higher before the auction closes.



But this account is only a 10k account. Given the current credit values, to realize that $1000 a year savings, wouldnt you have to book short mid-week stays in studios in blue/white season. With housekeeping credits $48 for a studio, and $70 for a 2 BR, $1000 converts into a lot of stays. And it would seem that you use up that 10k pretty quickly if you book larger units, weekends, multi-night stays, or prime season.

I can see how it would pay off with a 30k account. But for a 10k account?


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## Bill4728 (Mar 26, 2009)

ecwinch said:


> But this account is only a 10k account. Given the current credit values, to realize that $1000 a year savings, wouldnt you have to book short mid-week stays in studios in blue/white season. With housekeeping credits $48 for a studio, and $70 for a 2 BR, $1000 converts into a lot of stays. And it would seem that you use up that 10k pretty quickly if you book larger units, weekends, multi-night stays, or prime season.
> 
> I can see how it would pay off with a 30k account. But for a 10k account?


Until recently, if you purchased a NHK account, you could combine it with any other points you had. So if you had 15,000 pts and bought a NHK account for 10,000 pts, you'd now have a 25,000 pts NHK account. This made them very valuable. 

?? But it seems that this may have changed ??


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## LLW (Mar 26, 2009)

Bill4728 said:


> Until recently, if you purchased a NHK account, you could combine it with any other points you had. So if you had 15,000 pts and bought a NHK account for 10,000 pts, you'd now have a 25,000 pts NHK account. This made them very valuable.
> 
> ?? But it seems that this may have changed ??



No, that has not changed, although there has been some confusion about it.


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## cruisin (Mar 30, 2009)

Thanks for the lowdown on NHKs LLW,just not sure it makes sense for me given the Premium.


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## Shon_t (Mar 31, 2009)

cruisin said:


> Thanks for the lowdown on NHKs LLW,just not sure it makes sense for me given the Premium.



Let's say for argument's sake that I buy a 10k NHK account for $10k on ebay. 

Now... obviously, price varies... but a regular 10k account would cost somewhere in the neighborhood of $5k.

So...for the privileged of NHK, I'm paying a 5k premium. 

Now...10k will get me 7 nights red season in a 2 bedroom condo. Houskeeping fees on that condo are 70 dollars. I get one free HK token per year...so if I just stay a week...I don't pay anything.

But suppose I don't like long stays...and I want to use that NHK account to stay one night stays 7 nights a year in a two bedroom condo. 

Now...if I didn't pay for additional house keeping tokens on ebay...it would normally cost me $420 dollars in housekeeping charges to do this. ($70 x 6, since 1 free HK would be included for the year). 

Using this formula it would take me 12 years to make up the difference I paid for that NHK account.

Now...obviously...house keeping fees go up every year, and are not constant... so that formula isn't exactly going to fit... but people don't normally take 1 day vacations either... so even with housekeeping fees going up on average 5% a year...it could take an owner 20 plus years to make up the difference in cost between a NHK and a standard account. If a standard account owner purchase tokens on ebay...it could take even longer.

I certainly like the idea of unlimited reservations, without worrying about an extra housekeeping fee...but it seems like the cost doesn't outweigh the benefits.

What am I missing?


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## LLW (Mar 31, 2009)

Shon_t said:


> Let's say for argument's sake that I buy a 10k NHK account for $10k on ebay.
> 
> Now... obviously, price varies... but a regular 10k account would cost somewhere in the neighborhood of $5k.
> 
> ...



I refer you to paragraph 1 of my post #3 above.

What you are missing is that you don't "consume" the NHK account, just like you don't consume the principal in a bank-savings account. When you go to sell the account, or when your heirs do, you get the principal - the $5,000 premium - back. The HK savings every year is just the interest. (If you want to argue that the $5K you pay now might become $4K in the future when you sell, that's a different argument. It might also become $6K or more.)

You are also missing the fact that you can add credits to the account, e.g. buying 20K new credits at 50 cents each, to make the account 30K credits. Then you have paid a $5K premium for 30K NHK annual credits.


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## Shon_t (Mar 31, 2009)

LLW said:


> I refer you to paragraph 1 of my post #3 above.
> 
> What you are missing is that you don't "consume" the NHK account, just like you don't consume the principal in a bank-savings account. When you go to sell the account, or when your heirs do, you get the principal - the $5,000 premium - back. The HK savings every year is just the interest. (If you want to argue that the $5K you pay now might become $4K in the future when you sell, that's a different argument. It might also become $6K or more.)
> 
> You are also missing the fact that you can add credits to the account, e.g. buying 20K new credits at 50 cents each, to make the account 30K credits. Then you have paid a $5K premium for 30K NHK annual credits.



Thanks for your reply.

I think it is as you said...I'm not looking at a NHK account as an investment vehicle. I don't really expect my timeshare to actually increase in value, but rather depreciate, as they traditionally do.

I realize of course that there are exceptions...I mean...what were NHKs originally sold for, 80 cents per credit? Of course...in accounting for inflation, they have also lost value...just no where near the accounts sold after July 1991.


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## Robert D (Mar 31, 2009)

I don't see how you can justify a $5K premium to save housekeeping charges. Sure it's worth a premium but not double the market value.  Must have been a special situation on this one or these things must be very rare and the buyer is combining it with other memberships or is going to rent a lot of points and take a ton of short trips.  Most prime weeks take close to 10K points and if you can't book less than a week before 90 days of check in date for red weeks, so it seems like most members don't incur much in the way of extra housekeeping charges, certainly not enough to justify this kind of premium.


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## cruisin (Apr 1, 2009)

5K is one of the lower premiums paid for an NHK in the last 3 years, actually a pretty good value.


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## LLW (Apr 1, 2009)

Robert D said:


> I don't see how you can justify a $5K premium to save housekeeping charges. Sure it's worth a premium but not double the market value.  Must have been a special situation on this one or these things must be very rare and the buyer is combining it with other memberships or is going to rent a lot of points and take a ton of short trips. * Most prime weeks take close to 10K points and if you can't book less than a week before 90 days of check in date for red weeks, so it seems like most members don't incur much in the way of extra housekeeping charges, *certainly not enough to justify this kind of premium.



I have been a WM owner for 7 years and have _never_ taken a 7-day vacation in a WM. Most of my WM trips are for 2-3 nights, many for white or blue season, but still many for red. This fall (early to late September) we will be taking a 18-day trip into 4 national parks, but only the mid-week (cheaper) nights in WMs. There are _many_ ways to book less than 7 nights in red season more than 90 days out, but you probably don't need to know, since you don't have WM on your list of resorts. 

Yes, for those who only take 7-day vacations, paying a premium for a NHK would not be wise.


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## Shon_t (Apr 2, 2009)

LLW said:


> I have been a WM owner for 7 years and have _never_ taken a 7-day vacation in a WM. Most of my WM trips are for 2-3 nights, many for white or blue season, but still many for red. This fall (early to late September) we will be taking a 18-day trip into 4 national parks, but only the mid-week (cheaper) nights in WMs. There are _many_ ways to book less than 7 nights in red season more than 90 days out, but you probably don't need to know, since you don't have WM on your list of resorts.
> 
> Yes, for those who only take 7-day vacations, paying a premium for a NHK would not be wise.



The 5k premium is only on 10k worth of credits. While it is certainly doable... stretching 10k worth of credits into 18 days might prove to be quite the chore...

I've tried to run the numbers multiple times...they just don't add up, except in the rarest of circumstances. For most people...I think the value is just intrinsic. Some people balk at a $70 housekeeping fee, and take less trips as a result. NHKs generally hold their value better, and sometimes the piece of mind you have, is worth the extra cost.

Is it worth a 5k premium? That seems a little steep to me, but as others have pointed out, these accounts have gone for a much higher price in the past, so some people must feel it is worth it. 

At close to 1 dollar per credit, the account that just sold, is still cheaper than what people would pay for in retail, and minus the housekeeping fees.


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## LLW (Apr 2, 2009)

Shon_t said:


> *The 5k premium is only on 10k worth of credits. *While it is certainly doable... stretching 10k worth of credits into 18 days might prove to be quite the chore...
> 
> I've tried to run the numbers multiple times...they just don't add up, except in the rarest of circumstances. For most people...I think the value is just intrinsic. Some people balk at a $70 housekeeping fee, and take less trips as a result. NHKs generally hold their value better, and sometimes the piece of mind you have, is worth the extra cost.
> 
> ...




Shon, as has been pointed out above, regular permanent credits may be added to a NHK account. Then ALL the credits will be NHK. The NHK premium is not for the credits, but for the account. BUT that is the current procedure only, and they may change it anytime, although it's not likely. 

Just so you know, I am not selling a NHK account.


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## LLW (Apr 2, 2009)

Also, just because it would be a good value (in one's special situation), one doesn't have to buy one. There are lots and lots of good books in the library, but you don't have to read them all.


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## melschey (Apr 4, 2009)

Shon_t said:


> .
> 
> 
> I certainly like the idea of unlimited reservations, without worrying about an extra housekeeping fee...but it seems like the cost doesn't outweigh the benefits.
> ...



I don't believe it is worth the premium for the average owner. However if you like to take a lot of 1 or 2 day trips it is worth it. 

We hate short trips. For us if we can't stay least 4 or five days it isn't worth the bother of even going. Most of our trips are 7 days and usually longer than that. We have been members since 1994 and have hardly ever had to pay a HKF so it isn't worth it to us. 

So whether it is worth the premium really depends on you personal travel preferences. I know of some that have saved a lot of money with by owning one because they book so many short stays. I don't consider them average owners though. We did the math and it would not pay for us.


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