# Implications of new high points resorts and high open season rates



## win555 (Jun 21, 2020)

As I was doing some reading in a few threads, I came up with a hypothesis. I don't have any data to test the hypothesis but I'm posting it for discussion.

*Hypothesis:* HGVC is introducing high points resorts and high open season rates to benefit their own bottom line at the expense of new and current owners

*Operational strategy:*

Build new resorts with high points costs. Use high points benefit to sell to new buyers. Make money on the higher selling price.
Owners of high point weeks will redeem weeks for points to book more nights in other locations. Locations with favorable points cost will become competitive and some owners will be shut out. The points may expire and owners will pay fees to save points to next year and keep competing for the limited subset of good inventory. Or book a lower demand/value unit/location/season, which they would not have otherwise.
People with high points week can also book other units with high points costs so revenue to the club is intact.
The units with high points costs will sit empty because they cost too many points and there aren't enough other high points weeks owners to book them. And the open season rates are too high. The legacy owners don't have enough points to book those weeks or they are outraged having to spend so many points. If legacy owners complain, ask them to upgrade at sales presentations to a high points week as a solution.
Increase open season rates to a point where it doesn't make sense for owners to book with open season. Now this open season inventory can be appropriated by HGV to rent out for their own financial benefits. It doesn't look like this revenue is shared with individual HOAs. Non-timeshare owners often plan last minute trips, so it's perfect to have access to this inventory for renting out by blocking out current owners. Renting out to the public increases pipeline of sales prospects as well.


*Implication for owners:*

The club may be headed in a downward spiral.
Buying a points generator week with HGV may be risky long term. Too much competition for high value units making the value of the club questionable. 
If you want to use your home week, why pay club fees? One post mentions desire to leave the club. Why not buy a resale week with Marriott and pay no club fees. Marriott weeks are lower purchase price than comparable HGV locations in the areas I looked at like Las Vegas or Orlando.
Owners of weeks with high value but low points may not want to participate in the club so the club may be swimming in weeks that most club members don't want to book.
The club could go in a similar direction like WM: good inventory is difficult to book. High points/open season cost makes much of the other inventory unsuable for even for off season travelers. Almost everybody is a loser except the developer/club manager.

*Data needed to validate hypothesis:*

Lots of availability to book with points in advance at location that generate points at a favorable $/point.
Extremely difficult booking high value locations (this is the case in Worldmark).
Low open season utilization but high overall utilization due to rental of inventory unused by club members.
Sales pitch touting the advantages of buying high points locations.



JIMinNC said:


> the days go otherwise unused by the time Open Season rolls around, HGV does obtain defacto “control” of those dates. If they were acting as an agent for the owner as you suggest, then the revenue from the Open Season rental would go to the owner, but any Open Season revenue goes to HGV. So when an owner uses an alternative benefit, or once it goes unused at Open Season, control effectively reverts to HGV.






frank808 said:


> Never have used OS in about 10 years of HGVC ownership.  While no loss to me I am still appalled that HGVC does this.  I though OS rooms at Lagoon tower belong to the owners of the deed.  These are days that owners did not use and HGVC is renting out as breakage to line their bottom lines.  They do not own the unit or even pay the MF as the owners have.  Pretty good racket, I can make money off of someone else paying for the upkeep and not even giving something back to at least the HOA.  Total profit for no expense and I even got paid by the HOA to do this via the management fee.





alwysonvac said:


> *Increases are one sided.*
> 
> As an owner, my annual cost are increasing as well.
> 
> ...






alwysonvac said:


> But sadly, almost everything about the program can be modified at management’s discretion.
> 
> From the 2019 Club Rule (page 20)
> 
> _*Program Changes.* Club program use options, fees and rules, including but not limited to, the RCI Exchange Program, special exchanges, nightly point values, reservation windows, __the Hilton Honors program, ClubPoint Saving, RCI Depositing, Borrowing, Converting, and ClubPartner Perks that may be offered from time to time, are subject to change, adjustment, suspension or discontinuation without notice . Any such changes will not apply to transactions confirmed prior to the effective date of any such change . In the event the point values for accommodations are adjusted, such adjustments shall not disturb the one-to-one purchaser to accommodation ratio, or a Club Member’s ability to reserve their Home Week ._​


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## brp (Jun 21, 2020)

win555 said:


> *Hypothesis:* HGVC is introducing high points resorts and high open season rates to benefit their own bottom line at the expense of new and current owners



So, to summarize, you're hypothesizing that a business is taking steps to increase revenue and profits and this may not always be in the best interest of their consumers?

The analysis is interesting but, to me, this hypothesis is obvious in any business I deal with. There is no such thing as a "loyalty" program that is based on loyalty to the best interests of the members at all times, These are for-profit companies and this is what they're supposed to do. This is what I'd do. Any other expectation when entering into a relationship with such a company is, IMO, naive. And, trust me, I've seen many a comment along these lines on various boards talking about various "loyalty" programs.

Or, more succinctly, "yes, and...?"

Cheers.


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## win555 (Jun 21, 2020)

win555 said:


> *Hypothesis:* HGVC is introducing high points resorts and high open season rates to benefit their own bottom line at the *expense *of new and current owners






brp said:


> So, to summarize, you're hypothesizing that a business is taking steps to increase revenue and profits and this may not always be in the best interest of their consumers?
> 
> The analysis is interesting but, to me, this hypothesis is obvious in any business I deal with. There is no such thing as a "loyalty" program that is based on loyalty to the best interests of the members at all times, These are for-profit companies and this is what they're supposed to do. This is what I'd do. Any other expectation when entering into a relationship with such a company is, IMO, naive. And, trust me, I've seen many a comment along these lines on various boards talking about various "loyalty" programs.
> 
> ...



Certain companies try to increase their profits by providing value to the customer.  e.g. Costco, Southwest, Gyms, and many others. There is value creation and not just value transfer.

HGVC seems to be engaging in value transfer or destruction rather than creation.


With loyalty programs one can walk out without a big loss. But walking out on a timeshare is one two two orders or magnitude bigger loss than a loyalty program.


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## brp (Jun 21, 2020)

win555 said:


> Certain companies try to increase their profits by providing value to the customer.  e.g. Costco, Southwest, Gyms, and many others. There is value creation and not just value transfer.
> 
> HGVC seems to be engaging in value transfer or destruction rather than creation.



Fair points. As a decade-long HGVC owner, however, your assessment of their approach doesn't resonate with me. I do have one of the higher-priced resorts and, since we use those points exclusively there, I don't feel it has an impact elsewhere, as mentioned in the other thread you stared on the similar topic. Of course, others' experiences may differ.

Cheers.


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## Talent312 (Jun 21, 2020)

win555 said:


> Certain companies try to increase their profits by providing value to the customer.  e.g. Costco, Southwest, Gyms, and many others. There is value creation and not just value transfer.



Tim Cook, CEO of Apple, says that his company has a "providing value" policy.  In a recent interview on CBS, he said that Apple tries to make products that provide a better value, create a place for liberal arts and engineering to intersect, believe in inclusion and diversity, and in giving back to communities in need. He said that, if he could, he'd be in the audience of his own annual developer meetings. IOW, that Apple tries to be a responsible citizen.

It seems to me that there are plenty of companies that could learn this lesson.
.


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## DEROS (Jun 21, 2020)

This is my point of view:

Companies will always look out for their own interest but must also weigh in the concern of the customer.  No customer = No business, No Profit = No business, No business = No profit.  Which is why I believe HGVC has the right Time Sell business model to help the new and the old customer.  Why....

The one thing good about HGVC is, other than home week, everybody is treated equal when reserving space.  For example, a person with 14,400pts that want to stay in Lagoon Tower Hawaii, will have to reserve 9 mths/open season, along with everybody else, which includes the 4800pt owners.  Unless HGVC changes the rule, the high point value owners do not have first in line rights to reservation during open season.  My opinion, after owning HGVC for 10+ years, having a lot of points is harder to use, especially if you go for the inexpensive older HGVC resorts to save points or get more days than the normal 7 days by reserving a smaller unit for less points per day.  For example, I take 1 long (7 Day) vacation a year.  That is about how much I can afford, take time off,  and have enough points to do.  However, If I had the new high point 14.4k and up, I would still have several thousand points I would need to use up or pay to move forward.  Moving forward with not help me because it would just make next year that much more harder to spend the points.  So this high point ownership would actually force me to forgo staying at the Lagoon Tower (lower points) and staying at the Waikikian or Grand Islander (assuming I don't own there).  There has been times when I did reserve more than one room because I invited family but that is once in a blue moon.  Also it is hard trying to reserve online, two units for the same dates, especially for a high demand date and location.


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## DEROS (Jun 21, 2020)

Talent312 said:


> Tim Cook, CEO of Apple, says that his company has a "providing value" policy.  In a recent interview on CBS, he said that Apple tries to make products that provide a better value, create a place for liberal arts and engineering to intersect, believe in inclusion and diversity, and in giving back to communities in need. He said that, if he could, he'd be in the audience of his own annual developer meetings. IOW, that Apple tries to be a responsible citizen.
> 
> It seems to me that there are plenty of companies that could learn this lesson.
> .



However, Apple is still a business for profit and their customer relationship shows it.  That feel good story is just a marketing ploy.  Their unwritten policy is to deny all issues with their consumer electronics.  Fight like heck against all class action lawsuits.  After many years of denial, admit to the failure but not offer a permanent fix.  The fix is to replace defective component with the same defectively designed component.  Example, 2011 MacBook Pro.  GPU design flaw.  Will replace failed logic board with same defectively flawed logic board.  Lawsuit took so long, they only needed to do this for 2 years because by law, after 10 years, computer manufacturers don't need to repair regardless if they are still operational.  iPhone denied that they were throttling CPU speed as battery degraded.  Told customer to buy a new phone because the old one can't keep up with the new operating system.  Finally admitted they were throttling because of battery and only offered a discount battery replacement.  Still continues to throttle CPU speed because they are announcing in the EULA and the customer by using the iPhone has accepted.  Butterfly keyboard in the new MacBook.  Still defectively designed but they will only replace it with the same defectively designed keyboard.  Told customers that their new MacBook has a new and improve keyboard that fixes the failure of the old keyboard.  Hint:  Buy our new MacBook.  Lastly, there is a reason why they doing all the manufacturing in China.  A country known for their lax environmental laws and dubious working conditions.  They need to make the gap between cost to manufacture and sales price, to maximize profit.  Can they make products here in the U.S. and still make a profit?  Of course they can but the profit will not be as high as they wanted, without raising sales price.

I am not against Apple.  I own iPads, Apple TV, and a couple of computers.  However, I don't buy into any of the 'Big' companies feel good stories of social justice.


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## CaliSunshine (Jun 21, 2020)

Worldmark has been going through the same thing. The developer is financially incentivized to increase point requirements for newer resorts because they essentially transfer a portion of the value you receive to their new sales.


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## brp (Jun 21, 2020)

DEROS said:


> However, Apple is still a business for profit and their customer relationship shows it. * That feel good story is just a marketing ploy*.



Great post. But this is the pith.

Cheers.


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## CalGalTraveler (Jun 21, 2020)

I believe your hypotheses is overstated. What is missing are are three actions owners can take:

*1)  If you own a week at a legacy property and don't trade, you will always have first priority during your home week.* (buy where you want to go) If you really want that summer week at Myrtle Beach, then buy a resale at the fraction of the cost. No one (even high point owners who paid $100k at a new property) can take away your deeded rights to use that week; club points are second priority for reservations.

*Deeded home week is where HGVC (and Vistana) are superior compared to pure points trusts.  *Sure there are club fees but you also get access to open season rates and can easily trade the unit for short stays elsewhere if your life situation or tastes changes. Cannot do that with an MVC deeded unit unless you pay a hefty premium to enroll the week, or pay fees to II to deposit the week for another week. We can compare the MF for both as well depending on the location to see which is better. Give us a location and we can compare the MF cost + club vs. MVC + II (or potentially enrollment) for an apples to apples comparison.

*2) If you trade with points,  resale owners don't need to remain static. * If there is points inflation, simply buy another resale at a fraction of the price to use the high point properties or to upgrade your stay. Usually I am using more than my yearly point allotment to upgrade to a view or to add a bedroom.  You can add a Vegas Property for 7k points for $5000- $7000, plus $1000 MF.  5k points units go for around $2k - $4k. We are talking $5k - $10k not tens or hundreds of thousands so the risk is minimal.

*3) Shiny objects: *Even though they are high in points, HGV club owners will want to stay at the newer properties with the higher points taking pressure off the legacy resorts. Owners can combine and bank points over years, or buy another resale (option 2).

What you are suggesting, could happen with club trading but it will happen very s-l-o-w-l-y and these other factors will offset.  Short of a major upheaval, I don't think I will live that long and will have gotten maximal value out of our ownership. Nothing lasts forever. I have only run into one situation where I couldn't book club points early in the club trading window. Then a cancellation came through and eventually I got what I wanted.


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## JohnPaul (Jun 21, 2020)

CaliSunshine said:


> Worldmark has been going through the same thing. The developer is financially incentivized to increase point requirements for newer resorts because they essentially transfer a portion of the value you receive to their new sales.



And/or it costs a lot more to build a resort now - especially urban.


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## GT75 (Jun 21, 2020)

The OP has an interesting suggestion but I don't agree with their conclusions.   I agree with @CalGalTraveler.    I will also add that I am not worried about a new owner purchasing a high point unit at Ocean Tower or Maui for 28K points.      We both will be under the same rules to book at other resorts during the club season.    Honestly, I would think if they paid that high price for Hawaii, I would think that they would use their points for Hawaii anyways.


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## brp (Jun 21, 2020)

GT75 said:


> Honestly, I would think if they paid that high price for Hawaii, I would think that they would use their points for Hawaii anyways.



That's the point. Folks who purchase at the high-point-price places plan to use it there. Otherwise they'd be buying in Vegas.

Cheers.


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## CalGalTraveler (Jun 21, 2020)

+1 @GT75 There are a lot of things that keep me up at night. This is not one of them.


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## win555 (Jun 22, 2020)

GT75 said:


> The OP has an interesting suggestion but I don't agree with their conclusions.   I agree with @CalGalTraveler.    I will also add that I am not worried about a new owner purchasing a high point unit at Ocean Tower or Maui for 28K points.      We both will be under the same rules to book at other resorts during the club season.    Honestly, I would think if they paid that high price for Hawaii, I would think that they would use their points for Hawaii anyways.


If owners in Ocean Tower or Maui use their weeks, they won't be available to book for legacy owners in the club. What @CalGalTraveler   says below won't be possible.



CalGalTraveler said:


> 3) Shiny objects: Even though they are high in points, HGV club owners will want to stay at the newer properties with the higher points taking pressure off the legacy resorts. Owners can combine and bank points over years, or buy another resale (option 2).


Most likely what will happen is some Maui owners will not use their weeks and become available to club members. These Maui owners will increase competition for other legacy high value weeks such as Lagoon Tower.



JohnPaul said:


> And/or it costs a lot more to build a resort now - especially urban.


I understand construction costs have gone up in nominal dollars but not by 2-3x in real dollars. We also have to consider that the value of older properties has also gone up in real and nominal terms e.g. the Lagoon Tower real estate value has also gone up due to it's prime location. Newer properties are nicer so we should be expected to pay more but not more too much more than the real dollar value.



CalGalTraveler said:


> 1)  If you own a week at a legacy property and don't trade, you will always have first priority during your home week. (buy where you want to go) If you really want that summer week at Myrtle Beach, then buy a resale at the fraction of the cost. No one (even high point owners who paid $100k at a new property) can take away your deeded rights to use that week; club points are second priority for reservations.


Agreed, the club will have no value to me if I have to primarily rely on my deeded week. No advantage over a resale Marriott week. So there is very limited value to get from club membership.



CalGalTraveler said:


> Deeded home week is where HGVC (and Vistana) are superior compared to pure points trusts.  Sure there are club fees but you also get access to open season rates and can easily trade the unit for short stays elsewhere if your life situation or tastes changes. Cannot do that with an MVC deeded unit unless you pay a hefty premium to enroll the week, or pay fees to II to deposit the week for another week. We can compare the MF for both as well depending on the location to see which is better. Give us a location and we can compare the MF cost + club vs. MVC + II (or potentially enrollment) for an apples to apples comparison.


Open season has been killed by HGV as per previous discussion, so what's the point of the club and the associated fees if you want to buy to use your deeded week?  Locations common to MVC and HGVC of interest to me are Hawaii, Utah, Colorado, Southern California, Florida (beaches + Orlando). Vegas doesn't interest me much but as a point of comparison, Marriott's property there can be bought much cheaper than Elara (atleast with my preliminary research). Same with Orlando. I need to check the others.
It seems like the recommended HGVC approach is to buy in Vegas and that is very risky with the current actions of HGV.

I'm opposed to paying a ton of money to the developer so even if I bought Marriott weeks, I won't be enrolling them.



CalGalTraveler said:


> 2) If you trade with points,  resale owners don't need to remain static.  If there is points inflation, simply buy another resale at a fraction of the price to use the high point properties or to upgrade your stay. Usually I am using more than my yearly point allotment to upgrade to a view or to add a bedroom.  You can add a Vegas Property for 7k points for $5000- $7000, plus $1000 MF.  5k points units go for around $2k - $4k. We are talking $5k - $10k not tens or hundreds of thousands so the risk is minimal.


It could be done if the points increase for newer properties is reflects the market reality of the relative values of the new properties. But buying more resale purchases so that one can use a week that costs 3x more instead of the 1.5x real price increase doesn't sounds like a good idea. It's like losing your money in a casino and going back and spending more money in the hopes of making it back. If I was fooled once, I won't go back and get fooled again. Although, I have done exactly that a few times before 




CalGalTraveler said:


> What you are suggesting, could happen with club trading but it will happen very s-l-o-w-l-y and these other factors will offset.  Short of a major upheaval, I don't think I will live that long and will have gotten maximal value out of our ownership. Nothing lasts forever. I have only run into one situation where I couldn't book club points early in the club trading window. Other properties at Hilton Hawaiian Village were available so there were still options available so I booked and then a cancellation came through and eventually I got what I wanted.


I don't know how fast it will happen. I haven't looked at the # units and points allocations of new resorts. Is your sense that the point currency creation is happening very s-l-o-w-l-y compared to existing stock of point currency?

While the Marriott points system is not accessible to resale buyers like HGVC, the points chart has a solid basis in demand rather than the inflationary strategy HGV is using to screw all owners. Sadly, I own't be buying into the Marriott system as it requires high fees to be paid to the developer. But you have to give them credit where it's due.



CaliSunshine said:


> Worldmark has been going through the same thing. The developer is financially incentivized to increase point requirements for newer resorts because they essentially transfer a portion of the value you receive to their new sales.


Sadly our beloved Worldmark has been run into the ground. I'm trying to avoid another Worldmark type disaster. It looks to me that HGVC is not there but it's heading in that direction (just not sure about the speed).


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## win555 (Jun 22, 2020)

brp said:


> That's the point. Folks who purchase at the high-point-price places plan to use it there. Otherwise they'd be buying in Vegas.
> 
> Cheers.



I'm researching whether to buy in Vegas. It doesn't look like an anti-deficiency state like CA or FL. To minimize the risk of the time bomb of club health, I want to buy where I have an easy exit option when it explodes.


Nevada – NV, defaulting TS owners have no right to non-judicial, anti-deficiency foreclosures, but defaulting homeowners do: https://www.leg.state.nv.us/NRS/NRS-119A.html


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## GT75 (Jun 22, 2020)

win555 said:


> Open season has been killed by HGV as per previous discussion, so what's the point of the club and the associated fees if you want to buy to use your deeded week?


If you want to only use your deeded week then I agree, the club and associated fees will have no value to you.   For many of the affiliates (ie. Florida Gulf, Scotland, & Bay Club properties), you are not required to enroll your week into the club.   But I think that your statements and conclusions don't agree.   I do agree that OS has in general been kill by the increased fees but this isn't the reason for not enrolling your week into the club.    But, the club rules can change, so a deeded week might be the way to go.  




win555 said:


> Locations common to MVC and HGVC of interest to me are Hawaii, Utah, Colorado, Southern California, Florida (beaches + Orlando). Vegas doesn't interest me much but as a point of comparison, Marriott's property there can be bought much cheaper than Elara (atleast with my preliminary research). Same with Orlando.



I assume you know that purchase price is only part of your cost because you will also have yearly MFs.    I haven't price Marriott property but I have never had the impressions that you will be able to purchase for much cheaper than HGVC.   *If your statement is true *and it fills your needs then I would think that Marriott would be the best option.    The reason would be that Marriott has many more locations than HGVC and have high quality resorts.



Honestly, I don't understand what is the purpose of this thread.    You are making statements about this health of the club which in general I don't agree with.   You aren't asking the normal questions about if you will be able to utilize the club for your travel plans.   If you believe the statements that you are making above are true, then I defiantly think another club would be right for you.


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## Tamaradarann (Jun 22, 2020)

win555 said:


> If owners in Ocean Tower or Maui use their weeks, they won't be available to book for legacy owners in the club. What @CalGalTraveler   says below won't be possible.
> 
> 
> Most likely what will happen is some Maui owners will not use their weeks and become available to club members. These Maui owners will increase competition for other legacy high value weeks such as Lagoon Tower.
> ...




I think that alot of comments here are speculative and, therefore, may or may not happen.  Putting aside the effects of the Coronavirus, which is another speculative issue, there are a few things that can be said with certainty:

The open season rates in Honolulu have been raised since the demand for rooms there are in such demand that they can rent them on Hilton.com easily for premium rates to bring *HGVC increased revenue* if HGVC owners don't book them with their points

HGVC continues to raise the price they charge for existing properties that they sell at presentations to bring *HGVC increased sales revenue without regard* for the timehare resale true market value.

The high price of the new properties with high point values bring *HGVC increased sales revenue*.  HGVC sets the price as high as they want without regard for their cost or the real estate or true timeshare resale true market value.  

There is a central theme that I have *bolded. *


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## brp (Jun 22, 2020)

Tamaradarann said:


> *HGVC increased sales revenue without regard* for the timehare resale true market value.



Yes, that is exactly what they should be doing. If they failed to do what they could to minimize the resale market value of their product, they would be stupid, fiscally irresponsible and then I would question their motives. All timeshare companies that I know of do this. In fact, among the systems I know, HGVC have the *least* restrictions on resale purchases. That benefits the owners, but one can view that as fiscally irresponsible. Again, not sure of the point here.

If it's "I want to make it easier for you to buy my product from me and harder to buy it from someone else" I'll again add "yes, and...?"

Cheers.


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## win555 (Jun 22, 2020)

GT75 said:


> If you want to only use your deeded week then I agree, the club and associated fees will have no value to you.   For many of the affiliates (ie. Florida Gulf, Scotland, & Bay Club properties), you are not required to enroll your week into the club.   But I think that your statements and conclusions don't agree.   I do agree that OS has in general been kill by the increased fees but this isn't the reason for not enrolling your week into the club.    But, the club rules can change, so a deeded week might be the way to go.
> 
> 
> 
> ...



well, I'm doing my due diligence to see if HGVC is a good long term bet. If it's not then it makes sense to buy at a place where you can stop paying MFs and walk way once the club has no value. Looks like that can be done in Florida. 

What I see is HGVC can be a good deal right now but their past behavior and policies are not promising for future long term health of the club. I have provided a detailed analysis of why I think that will be the case and I'm not really seeing any data that suggest the club will have long term health. I understand that people who own get defensive about the things they own. It's predictably irrational as shown by studies by famous behavioral economist, Dan Ariely. 

Thanks to @alwysonvac for all the posts with data that show that HGV may be taking the club downhill. She looks like a prolific and knowledgeable poster with a balanced view based on data/facts.


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## brp (Jun 22, 2020)

win555 said:


> I understand that people who own get defensive about the things they own. It's predictably irrational as shown by studies by famous behavioral economist, Dan Ariely.



Just as it's predictable that those with a less-than-positive view of an organization will cite Stockholm Syndrome about those who find that they are OK with the system. So we're all acting predictably 

Cheers.


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## Tamaradarann (Jun 22, 2020)

brp said:


> Yes, that is exactly what they should be doing. If they failed to do what they could to minimize the resale market value of their product, they would be stupid, fiscally irresponsible and then I would question their motives. All timeshare companies that I know of do this. In fact, among the systems I know, HGVC have the *least* restrictions on resale purchases. That benefits the owners, but one can view that as fiscally irresponsible. Again, not sure of the point here.
> 
> If it's "I want to make it easier for you to buy my product from me and harder to buy it from someone else" I'll again add "yes, and...?"
> 
> Cheers.



Do you own stock in HGVC?  If you do then I can totally understand and agree with your position since what they are doing is certainly in your best interest.  

However, for those that are members and those that are perspective buyers and members of the club WITHOUT STOCK IN HGVC, I view the issues that I point out as not in their best interest.

Futhermore, just because actions make the bottom line look better for the stock holders shouldn't be the only and ultimate consideration in decision making.  There are many other considerations that companies need to and should consider.  I will leave it like that and not give example rather than make this discussion political.


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## CalGalTraveler (Jun 22, 2020)

@win555 It is good to research but you are overthinking this with doomsday hyperbole for both HGVC and MVC. Risk/reward. Your argument is like a financial pundit saying, "Don't invest in the stock market, you will lose money." I will remind you that the stock market is full of potholes and trader's who's best interest is to make a profit over the individual investor.

Pick a property, then analyze it for each system. Then you will have an answer as to whether this is right for your situation.

If you buy and don't like how the trading situation is evolving. Sell or give it away. Or buy where you want to own. Or add points for < $10k and stay at newer properties or quit. IMHO...the risk is not that great. It's not like buying a house - we are talking about only $10k - $20k plus you can still use or rent out the timeshare. Can't vacation in your stocks. Most people I know lost a heck of a lot more than that in March due to Covid.  If this risk is too great for your situation then you should not buy timeshares.


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## win555 (Jun 22, 2020)

brp said:


> Yes, that is exactly what they should be doing. If they failed to do what they could to minimize the resale market value of their product, they would be stupid, fiscally irresponsible and then I would question their motives. All timeshare companies that I know of do this. In fact, among the systems I know, HGVC have the *least* restrictions on resale purchases. That benefits the owners, but one can view that as fiscally irresponsible. Again, not sure of the point here.
> 
> If it's "I want to make it easier for you to buy my product from me and harder to buy it from someone else" I'll again add "yes, and...?"
> 
> Cheers.



Again, the mindset TS developers seem to have is to destroy value rather than create it. Instead of  "I want to make it easier for you to buy my product from me and harder to buy it from someone else", it would be better to say "how can I make my offering more compelling and worthwhile that people will buy from me". Both can achieve increased revenue but in one case value is destroyed, in another it is created. I don't have a problem with the latter. Music piracy has gone down because streaming services make piracy not worthwhile. I think almost everyone is better off.


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## brp (Jun 22, 2020)

Tamaradarann said:


> Do you own stock in HGVC?  If you do then I can totally understand and agree with your position since what they are doing is certainly in your best interest.
> 
> However, for those that are members and those that are perspective buyers and members of the club WITHOUT STOCK IN HGVC, I view the issues that I point out as not in their best interest.
> 
> Futhermore, just because actions make the bottom line look better for the stock holders shouldn't be the only and ultimate consideration in decision making.  There are many other considerations that companies need to and should consider.  I will leave it like that and not give example rather than make this discussion political.



No, I don't own HGVC stock. But I don't need to own the stock to have a view on what a company should be doing. And I fully understand as merely a member, that a program of which I am a member will, and should, do things that are not always in my best interest.  That's the reality.

I completely agree that bottom line alone is not sound thinking and things should be done with regard for the members, even if not everything will be things we will like. Then we each get to have our own views on whether particular actions are reasonable or not, and act with our wallets. But thinking that things are either in our best interest or they should not be done is, IMO, naive.

Cheers.


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## win555 (Jun 22, 2020)

CalGalTraveler said:


> @win555 It is good to research but you are overthinking this with doomsday hyperbole for both HGVC and MVC. Risk/reward. Your argument is like a financial pundit saying, "Don't invest in the stock market, you will lose money." I will remind you that the stock market is full of potholes and trader's who's best interest is to make a profit over the individual investor.
> 
> Pick a property, then analyze it for each system. Then you will have an answer as to whether this is right for your situation.
> 
> If you buy and don't like how the trading situation is evolving. Sell or give it away. Buy where you want to own. Add points for < $10k and stay at newer properties. IMHO...the risk is not that great. It's not like buying a house - we are talking about only $10k - $20k.  I can still use or rent out in my timeshare. Can't say the same about stocks. If this risk is too great for your situation then you should not buy timeshares.



yes, I think this is what it comes down to: whether the risk is worth the reward. I don't know that yet.

Stocks are a different thing. I like staying invested in the stock market with Vanguard index funds.  I feel the risk/reward is worth it.


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## CalGalTraveler (Jun 22, 2020)

win555 said:


> Again, the mindset TS developers seem to have is to destroy value rather than create it. Instead of  "I want to make it easier for you to buy my product from me and harder to buy it from someone else", it would be better to say "how can I make my offering more compelling and worthwhile that people will buy from me". Both can achieve increased revenue but in one case value is destroyed, in another it is created. I don't have a problem with the latter. Music piracy has gone down because streaming services make piracy not worthwhile. I think almost everyone is better off.



With the exception of Southwest, the same could be said for the airline industry. Same for many of other industries.


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## brp (Jun 22, 2020)

win555 said:


> Again, the mindset TS developers seem to have is to destroy value rather than create it. Instead of  "I want to make it easier for you to buy my product from me and harder to buy it from someone else", it would be better to say "how can I make my offering more compelling and worthwhile that people will buy from me". Both can achieve increased revenue but in one case value is destroyed, in another it is created. I don't have a problem with the latter. Music piracy has gone down because streaming services make piracy not worthwhile. I think almost everyone is better off.



Good point. The programs I know about, other than HGVC, have differential benefits for direct versus resale purchase. In the case of DVC, which I know best, it was done by removing things from resale. One could argue that they could have added more perks to direct, instead. However, even with those removals, the DVC purchases actually appreciate in value in many cases. So it does seem to work.

Cheers.


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## bnoble (Jun 22, 2020)

I don't have a dog in the HGVC fight (am not an owner there, and don't plan to become one) but I have been following the OP's quest for a bit now.



win555 said:


> It's predictably irrational as shown by studies by famous behavioral economist, Dan Ariely.


I like Dan's stuff. I've read a lot of it. But, whenever I see someone explaining why *they* are rational but the *other guy* (who doesn't agree with them) isn't, and they point to Dan, my spidey senses start to tingle. Even Dan will tell you that he often is irrational. That's the way humans work.



win555 said:


> the mindset TS developers seem to have is to destroy value rather than create it.


The part you miss is that TS developers are _*developers*_. Their business model is to build (or acquire) and sell (or resell) condos and extract significant profit in the selling. They are not in the business of adding value to existing owners, and they _certainly_ are not in the business of providing value to those who do not buy from them---namely, resale purchasers. That's fundamental to timeshare ownership. If that doesn't sound like a good idea to you, don't buy one.



CalGalTraveler said:


> you are overthinking this with doomsday hyperbole for both HGVC and MVC


Agreed, and I would go further. From where I am sitting you are overthinking all of it. There is no perfect decision. There is no guarantee any particular decision will work out. Make the best decision you can, and enjoy the vacations that come along with it. Alternatively, decide that this isn't for you and go some other route. I hope it works out for you, whichever route you pick.

But, "posting [something] for discussion" and then berating the people who don't agree with you isn't a discussion. It's just rude.


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## Tamaradarann (Jun 22, 2020)

brp said:


> No, I don't own HGVC stock. But I don't need to own the stock to have a view on what a company should be doing. And I fully understand as merely a member, that a program of which I am a member will, and should, do things that are not always in my best interest.  That's the reality.
> 
> I completely agree that bottom line alone is not sound thinking and things should be done with regard for the members, even if not everything will be things we will like. Then we each get to have our own views on whether particular actions are reasonable or not, and act with our wallets. But thinking that things are either in our best interest or they should not be done is, IMO, naive.
> 
> Cheers.



What is my best interest is not my emphasis.  The title of this thread is the "Implications of high point resorts and high open season rates".  I am expressing what HGVC is focused on with these actions and that they are less concerned if the implications are that the purchase of HGVC resorts are less attractive to certain buyers whether they are presentation buyers or resale buyers.


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## CalGalTraveler (Jun 22, 2020)

bnoble said:


> IFrom where I am sitting you are overthinking all of it.* There is no perfect decision. There is no guarantee any particular decision will work out. Make the best decision you can, and enjoy the vacations that come along with it. Alternatively, decide that this isn't for you and go some other route.* I hope it works out for you, whichever route you pick.



+1 This


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## CaliSunshine (Jun 22, 2020)

If you're buying a timeshare these days a big chunk of the "value" you're paying for is the points system. Look at the prices of Vistana mandatories vs optionals if you don't believe me. Even if what you're buying is a "deeded week" rather than a small percentage of a trust that is true, because many people cannot/will not plan their vacations 9 months in advance.

Unfortunately, with points systems, just like airline miles, there is always going to be an incentive for the developer to engage in devaluation. Having finished selling units in one hotel in Hawaii, why wouldn't they make the next hotel cost more points?


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## PigsDad (Jun 22, 2020)

I've been an owner since 2005, and I can honestly say that I don't feel that any value of my ownership has been destroyed by HGVC building and selling the high point resorts.  I can still book the same HGVC resorts that were available to me in 2005 with the exact same number of points as when I purchased.  And now, I have even more choices of resorts, some that require higher points, and some that are on the original point structure.  *More choice, more value for me.*  I have not seen the availability go down of the resorts that were around when I bought, so I personally don't buy into the hypothesis of the reduced value for existing owners as new, higher point properties come online.

Kurt


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## win555 (Jun 22, 2020)

bnoble said:


> I don't have a dog in the HGVC fight (am not an owner there, and don't plan to become one) but I have been following the OP's quest for a bit now.
> 
> 
> I like Dan's stuff. I've read a lot of it. But, whenever I see someone explaining why *they* are rational but the *other guy* (who doesn't agree with them) isn't, and they point to Dan, my spidey senses start to tingle. Even Dan will tell you that he often is irrational. That's the way humans work.
> ...



Fair enough. I wasn't trying to berate but that's how it came across. 




bnoble said:


> The part you miss is that TS developers are _*developers*_. Their business model is to build (or acquire) and sell (or resell) condos and extract significant profit in the selling. They are not in the business of adding value to existing owners, and they _certainly_ are not in the business of providing value to those who do not buy from them---namely, resale purchasers. That's fundamental to timeshare ownership. If that doesn't sound like a good idea to you, don't buy one.


The developer and management company roles are mixed in these hotel systems. The HOA has the responsibility to make sure management company serves the interest of owners but looks like many HOAs don't do that. 




bnoble said:


> Agreed, and I would go further. From where I am sitting you are overthinking all of it. There is no perfect decision. There is no guarantee any particular decision will work out. Make the best decision you can, and enjoy the vacations that come along with it. Alternatively, decide that this isn't for you and go some other route. I hope it works out for you, whichever route you pick.


this is very insightful and powerful look at the way TS works. I'm going back and forth between being okay with the risk and then thinking this might not be worth the hassle.


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## win555 (Jun 22, 2020)

CaliSunshine said:


> If you're buying a timeshare these days a big chunk of the "value" you're paying for is the points system. Look at the prices of Vistana mandatories vs optionals if you don't believe me. Even if what you're buying is a "deeded week" rather than a small percentage of a trust that is true, because many people cannot/will not plan their vacations 9 months in advance.
> 
> Unfortunately, with points systems, just like airline miles, there is always going to be an incentive for the developer to engage in devaluation. Having finished selling units in one hotel in Hawaii, why wouldn't they make the next hotel cost more points?



I guess there are lots of people like me who don't want to go to the same place for a week every year so I can see the weeks being cheaper to buy because of lower demand. With airline devaluations, I have indeed stopped flying certain airlines like Delta (unless the flight price is significantly lower). I see that TUGGERs recommend preparing for TS points system devaluation by buying at a place where it's easy to walk away with non-judicial anti-deficiency judgments.


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## ski_sierra (Jun 22, 2020)

PigsDad said:


> I've been an owner since 2005, and I can honestly say that I don't feel that any value of my ownership has been destroyed by HGVC building and selling the high point resorts.  I can still book the same HGVC resorts that were available to me in 2005 with the exact same number of points as when I purchased.  And now, I have even more choices of resorts, some that require higher points, and some that are on the original point structure.  *More choice, more value for me.*  I have not seen the availability go down of the resorts that were around when I bought, so I personally don't buy into the hypothesis of the reduced value for existing owners as new, higher point properties come online.
> 
> Kurt



As a relatively new resale person, I'm happy with HGVC as well. Sure I'd like new resorts at low points but it seems unlikely to happen.


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## CalGalTraveler (Jun 22, 2020)

PigsDad said:


> I've been an owner since 2005, and I can honestly say that I don't feel that any value of my ownership has been destroyed by HGVC building and selling the high point resorts.  I can still book the same HGVC resorts that were available to me in 2005 with the exact same number of points as when I purchased.  And now, I have even more choices of resorts, some that require higher points, and some that are on the original point structure.  *More choice, more value for me.*  I have not seen the availability go down of the resorts that were around when I bought, so I personally don't buy into the hypothesis of the reduced value for existing owners as new, higher point properties come online.
> 
> Kurt



@PigsDad makes an interesting point. "More choice. More value for me." It would have been very easy for HGVC to limit legacy buyers to the legacy resorts and completely wall off trading into the new resorts. For example if you bought in 2010 and there were 10 resorts, you bought with the premise that you could only trade into those 10.  You paid club fees for that. Now there are say 35 resorts (IDK how many). That buyer now has access to 35 resorts.* That's an increase in value to the network. Glass half full? or Glass half empty?


* Some of the resorts like bHC, have reduced reservation windows, but they are not completely walled off. There are others that are completely available without restriction e.g. Ocean Tower, Chicago.


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## brp (Jun 22, 2020)

CalGalTraveler said:


> @PigsDad makes an interesting point. "More choice. More value for me." It would have been very easy for HGVC to limit legacy buyers to the legacy resorts and completely wall off trading into the new resorts. For example if you bought in 2010 and there were 10 resorts, you bought with the premise that you could only trade into those 10.  You paid club fees for that. Now there are say 35 resorts (IDK how many). That buyer now has access to 35 resorts.* That's an increase in value to the network. Glass half full? or Glass half empty?
> 
> 
> * Some of the resorts like bHC, have reduced reservation windows, but they are not completely walled off. There are others that are completely available without restriction e.g. Ocean Tower, Chicago.



This is exactly what DVC have done. They are building new resorts and people who buy resale at the "Legacy 14" will not be able to trade into these.

Cheers.


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## CalGalTraveler (Jun 22, 2020)

Plus, HGVC is aggressively adding new properties for the foreseeable future to compete with MVC. This will open up MORE inventory to Club members because HGVC tends to make unsold inventory in new developments available to club owners for the first few years. There is no requirement to do this. Does it typically cost more points? Usually, but shouldn't newer cost more? (There are some pockets with lower points requirements: 3250 points in NYC. Ocean Tower on BI has studios and 1 bedrooms 3400 - 7200 points.)

How is opening up inventory in newer resorts to legacy owners taking away value?


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## win555 (Jun 22, 2020)

CalGalTraveler said:


> How is opening up inventory in newer resorts to legacy owners taking away value?



It depends on whether the points requirements for new inventory match their market value. Is ocean tower studio 1.5x more desirable for club members than Lagoon Tower? The only way to answer is look at the utilization ratio of those studios.

If they assign fair market value, then it's great for club members. If they don't then it's not great for club members.


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## CaliSunshine (Jun 22, 2020)

CalGalTraveler said:


> Plus, HGVC is aggressively adding new properties for the foreseeable future to compete with MVC. This will open up MORE inventory to Club members because HGVC tends to make unsold inventory in new developments available to club owners for the first few years. There is no requirement to do this. Does it typically cost more points? Usually, but shouldn't newer cost more? (There are some pockets with lower points requirements: 3250 points in NYC. Ocean Tower on BI has studios and 1 bedrooms 3400 - 7200 points.)
> 
> How is opening up inventory in newer resorts to legacy owners taking away value?



WMOwners, when it was up had a really good answer to this. The basic idea is that you have a right to use a certain pool of properties right now. When new properties are added to the pool, the new owners who own in that new property also get access to use your pool of properties, thereby diluting your right to use. That's great if the new property is as desirable, or even more desirable to use than your existing properties, but not good if the new property is not (or is just too expensive).

Easiest way to see it is if we have two imaginary properties only, and you are an owner in one of them (property Old). For the purposes of explanation, let's say the units are all the same size (2BR) and let's say there are 100 units in each property, and forget season for the time being.

So today, you own a week in property Old, and you can use your points to book a week in any unit of property Old. That means you effectively own 1/5200 of property Old (100 units x 52 weeks = 5200). Tomorrow, HGVC decides to add property New to the system. Property New, as implied by the name, is newer, but their units cost 50% more points. When HGVC adds property New to your system and sells all of property New, all of a sudden your ownership also changes. Instead of owning 1/5200 of property Old, you own 1/13000 of property Old and 1/13000 of property New. Why 13000? Because now the total ownership is 5200 (all of the owners of property Old) + 1.5 x 5200 (all of the owners of property New). The New owners own a bit more than that: 1/8666.7 of both property Old and property New. So the real question is whether you are willing to exchange a piece of your ownership in property Old for property New. If the property New is in fact 1.5 times or even 2 times as good as property Old, then yes, you're getting a benefit. But instead, if property New is not 1.5x as good, maybe it's only just 1x as good as property Old, then you've just made a bad exchange. Of course, you don't have any say in this. HGVC makes the decision for you, which means it's highly unlikely that property New will ever be 1.5x as good as property Old, which means over time the value of your ownership will be diluted.


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## ljmiii (Jun 22, 2020)

brp said:


> This is exactly what DVC have done. They are building new resorts and people who buy resale at the "Legacy 14" will not be able to trade into these.


Even worse, no one who buys resale at any new DVC resort will be able to trade anywhere. It will be interesting to see how that plays out from both a sales and reservation perspective.


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## tombanjo (Jun 22, 2020)

that is not exactly true for a few reasons, primarily, booking windows and home week make "your" property more accessible to "you". The $ per point in MF is not necessarily the same, and there will not be 5200 units on the resale market to start, so the buy in between the new and old are not the same. If you want to look at dilution, you could say anyone who buys resale devalues all the "developer" owners. Anyone who uses their points outside their home windows and resort dilutes the entire system but taking away a room from an owner at that resort. The reality is it is a non-linear process with a lot of moving parts. Not all variables have known values.  Next year (and the remainder of this year) might show some serious weaknesses in the process, as points get rolled over and demand increases once people can travel freely.


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## CaliSunshine (Jun 22, 2020)

Sorry I made the math too complicated. Basically when property New gets added into the system instead of owning the right to use 100% of property Old you now own the right to use 40% of a week of property Old and 40% of a week of property New.

If 40% of a week of property New is more valuable than 60% of a week of property Old then you’ve profited. Otherwise you’ve lost out.

Yes the fact that there’s an underlying week makes this a bit more complicated but except for a couple of Hawaii resorts the majority of owners do not book before the 9 month window.


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## buzglyd (Jun 22, 2020)

For the life of me, I’ve never consulted a spreadsheet to decide whether I’ve enjoyed my vacation or not.

welcome to the spreadsheet brigade win 555!


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## dayooper (Jun 22, 2020)

CaliSunshine said:


> *Sorry I made the math too complicated. Basically when property New gets added into the system instead of owning the right to use 100% of property Old you now own the right to use 40% of a week of property Old and 40% of a week of property New.*
> 
> If 40% of a week of property New is more valuable than 60% of a week of property Old then you’ve profited. Otherwise you’ve lost out.
> 
> Yes the fact that there’s an underlying week makes this a bit more complicated but except for a couple of Hawaii resorts the majority of owners do not book before the 9 month window.



No, I’m the one that needs to apologize. You lost me when you basically said I wasn’t intelligent enough to understand the math behind your point.


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## CaliSunshine (Jun 22, 2020)

dayooper said:


> No, I’m the one that needs to apologize. You lost me when you basically said I wasn’t intelligent enough to understand the math behind your point.



That wasn’t directed at you or anyone else. Just had a moment where I was like why am I making this so complicated when there’s a much easier way to say the same thing.


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## CalGalTraveler (Jun 22, 2020)

CaliSunshine said:


> WMOwners, when it was up had a really good answer to this. The basic idea is that you have a right to use a certain pool of properties right now. When new properties are added to the pool, the new owners who own in that new property also get access to use your pool of properties, thereby diluting your right to use. That's great if the new property is as desirable, or even more desirable to use than your existing properties, but not good if the new property is not (or is just too expensive).
> 
> Easiest way to see it is if we have two imaginary properties only, and you are an owner in one of them (property Old). For the purposes of explanation, let's say the units are all the same size (2BR) and let's say there are 100 units in each property, and forget season for the time being.
> 
> So today, you own a week in property Old, and you can use your points to book a week in any unit of property Old. That means you effectively own 1/5200 of property Old (100 units x 52 weeks = 5200). Tomorrow, HGVC decides to add property New to the system. Property New, as implied by the name, is newer, but their units cost 50% more points. When HGVC adds property New to your system and sells all of property New, all of a sudden your ownership also changes. Instead of owning 1/5200 of property Old, you own 1/13000 property Old and 1/13000 of property New. Why 13000? Because now the total ownership is 5200 (all of the owners of property Old) + 1.5 x 5200 (all of the owners of property New). The New owners own a bit more than that: 1/8666.7 of both property Old and property New. So the real question is whether you are willing to exchange a piece of your ownership in property Old for property New. If the property New is in fact 1.5 times or even 2 times as good as property Old, then yes, you're getting a benefit. But instead, if property New is not 1.5x as good, maybe it's only just 1x as good as property Old, then you've just made a bad exchange. Of course, you don't have any say in this. HGVC makes the decision for you, which means it's highly unlikely that property New will ever be 1.5x as good as property Old, which means over time the value of your ownership will be diluted.



Perhaps this is the case in a pure points trust. But as @tombanjo pointed out, HGVC (and Vistana, and MVC deeded units) are anchored in deeds so Old owner still have 100% right to use their deed. Old owner still has 1/5200 ownership at their resort when they use their deed. - nothing has changed.

 What you are describing only happens when the owner chooses to trade. But I am not convinced ownership % is the best way to look at this.

How do you account for arbitrage on MF?  If I am able to use my lower MF/point Old property to trade into high MF on New, I am still way ahead of New owner who must pay the higher MF/point to use the same property. If anything, on a *MF/point basis NEW is paying a premium to use my legacy resort *so may not view it as optimal as using on a NEW property. This goes against the hypothesis the OP made for too much demand for legacy.


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## CalGalTraveler (Jun 22, 2020)

I can give examples of this MF arbitrage:

a) On a MF/point basis we pay more for NYC bHC points. Most owners of expensive bHC points will never use their points for club resorts because the MF per point cost is too high. So we use "NEW" NYC points for priority NYC reservations where we own. OTOH, legacy OLD owners in Vegas can arbitrage into NYC when the club window opens. They are way ahead on a MF/point basis. For example, on a studio, we pay $1600 MF for 5250 points.  An "Old" Vegas owner can apply at $ 0.14/point x 5250 = $735 for the same week in the same resort. (Am I upset? No because we get priority rights to pick almost any room in the place before everyone else plus we get owner's lounge privileges that traders don't.)  Why would I spend $1600 to trade NYC for a week in Vegas when I could rent for half that?

b) We trade Vegas into Hawaii annually. We pay a lower MF/point for Vegas, trading into Hawaiian properties with a high MF/point. So if it takes 7000 points for a room, say the Hawaiian owner pays $1600 MF. Our 7000 Vegas points cost us only $1000 MF/year. $1600 vs. $1000 for the same room. Who is ahead? Legacy Vegas. Of course, if the Hawaii owner decides to use their home unit, they get priority reservations. And they should because they paid a premium for this right. Just like we do in NYC.


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## SmithOp (Jun 22, 2020)

CaliSunshine said:


> Yes the fact that there’s an underlying week makes this a bit more complicated but except for a couple of Hawaii resorts the majority of owners do not book before the 9 month window.



Do you work for HGV and have access to reservation Reports? There is no other way you could possibly assert that the majority of owners do not book before the 9 month window. TUGers maybe, but we are a very small percentage of owners.

Sent from my SM-G970U using Tapatalk


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## CaliSunshine (Jun 23, 2020)

CalGalTraveler said:


> I can give examples of this MF arbitrage:
> 
> a) On a MF/point basis we pay more for NYC bHC points. Most owners of expensive bHC points will never use their points for club resorts because the MF per point cost is too high. So we use "NEW" NYC points for priority NYC reservations where we own. OTOH, legacy OLD owners in Vegas can arbitrage into NYC when the club window opens. They are way ahead on a MF/point basis. For example, on a studio, we pay $1600 MF for 5250 points.  An "Old" Vegas owner can apply at $ 0.14/point x 5250 = $735 for the same week in the same resort. (Am I upset? No because we get priority rights to pick almost any room in the place before everyone else plus we get owner's lounge privileges that traders don't.)  Why would I spend $1600 to trade NYC for a week in Vegas when I could rent for half that?
> 
> b) We trade Vegas into Hawaii annually. We pay a lower MF/point for Vegas, trading into Hawaiian properties with a high MF/point. So if it takes 7000 points for a room, say the Hawaiian owner pays $1600 MF. Our 7000 Vegas points cost us only $1000 MF/year. $1600 vs. $1000 for the same room. Who is ahead? Legacy Vegas. Of course, if the Hawaii owner decides to use their home unit, they get priority reservations. And they should because they paid a premium for this right. Just like we do in NYC.



For sure these kinds of MF/point optimizations exist regardless. Even in pure points trusts, they exist, although they're not explicit. You don't have to be a Wyndham employee to realize that the Worldmarks in Maui probably costs more to maintain on a per unit basis than the Worldmarks in Vegas. That doesn't mean that all existing owners won't be diluted if HGVC keeps on adding units with inflated points costs, due to the logic I laid out above. Sure, your HGVC in Vegas will still be a good deal as a trader, but over time, it will be less of a good deal because HGVC introduced higher point units. Thankfully, the process of building new resorts is a slow one, so the dilution will also happen relatively slowly. And there's not a whole lot owners can do in my opinion except keep enjoying their vacations and finding the best trades possible. Even Worldmark, with its nominally independent board and a fairly educated and loyal ownership couldn't stop it.

Of the big timeshare companies, it looks like DVC is the only one that doesn't make their existing owners "subsidize" (I put subsidize in quotes because people who buy retail are getting a raw deal regardless) their new owners. They do that by raising their prices every year, which AFAIK is not the case for other systems.


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## CaliSunshine (Jun 23, 2020)

SmithOp said:


> Do you work for HGV and have access to reservation Reports? There is no other way you could possibly assert that the majority of owners do not book before the 9 month window. TUGers maybe, but we are a very small percentage of owners.
> 
> Sent from my SM-G970U using Tapatalk



I do not. However, it's my opinion that TUGgers are far more likely to be value optimizers and book before the 9 month window (for certain resorts) than the average owner.


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## Tamaradarann (Jun 23, 2020)

PigsDad said:


> I've been an owner since 2005, and I can honestly say that I don't feel that any value of my ownership has been destroyed by HGVC building and selling the high point resorts.  I can still book the same HGVC resorts that were available to me in 2005 with the exact same number of points as when I purchased.  And now, I have even more choices of resorts, some that require higher points, and some that are on the original point structure.  *More choice, more value for me.*  I have not seen the availability go down of the resorts that were around when I bought, so I personally don't buy into the hypothesis of the reduced value for existing owners as new, higher point properties come online.
> 
> Kurt



I agree with you that the value of my ownership has NOT been destroyed by HGVC.  I can still book the same resorts for the same points that I could book 10 years ago.  Of course, as a member it would be good to be able to use Open Season to book a Hawaii Studio for $60/night during the week and $80/night on the weekend like it was 10 years ago.  

I am re-thinking my position on the "Implications of High Points Resorts and High Open Season Rates".  I still believe that the High Price at Presentations for the High Point Resorts will prevent some people from buying as will the high price for the legacy HGVC resorts at presentation.  However, I don't believe that the High Open Season Rates is a deterrent for new buyers since they don't know the Open Season system and the sales people will show them Open Season Rates in an area where they are still $60/night during the week and $80/night and say that you can book all the resorts using Open Season which is true except the rates will NOT be the same.

Furthermore, on the resale purchase and selling market the higher the price at presentations makes the resale market more attractive.  This is better for current owners who are selling their HGVC timeshares.


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## frank808 (Jun 23, 2020)

CaliSunshine said:


> Of the big timeshare companies, it looks like DVC is the only one that doesn't make their existing owners "subsidize" (I put subsidize in quotes because people who buy retail are getting a raw deal regardless) their new owners. They do that by raising their prices every year, which AFAIK is not the case for other systems.



Direct buyers at the newest Riviera Resorts can book all the DVC resorts. While resale owners at the other DVC resorts cannot book into Riviera Resort (this was implemented for resale contracts bought after Jan 18, 2019). 

MVC raises prices on the points and weeks they sell every year. 

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## CalGalTraveler (Jun 23, 2020)

CaliSunshine said:


> For sure these kinds of MF/point optimizations exist regardless. Even in pure points trusts, they exist, although they're not explicit. You don't have to be a Wyndham employee to realize that the Worldmarks in Maui probably costs more to maintain on a per unit basis than the Worldmarks in Vegas. That doesn't mean that all existing owners won't be diluted if HGVC keeps on adding units with inflated points costs, due to the logic I laid out above. Sure, your HGVC in Vegas will still be a good deal as a trader, but over time, it will be less of a good deal because HGVC introduced higher point units. Thankfully, *the process of building new resorts is a slow one, so the dilution will also happen relatively slowly. *And there's not a whole lot owners can do in my opinion except keep enjoying their vacations and finding the best trades possible. Even *Worldmark, with its nominally independent board and a fairly educated and loyal ownership couldn't stop it.*



You and @win555 keep referring to Worldmark like there has been a disaster. I thought Worldmark owners were happy and the system runs well. Can you elaborate on what has happened to owners on dilution, i.e. what are you experiencing that you could do before? Plus the number of new units/buildings they added that brought them to this tipping point of disaster you keep referring to?


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## brp (Jun 23, 2020)

CaliSunshine said:


> I do not. However, it's my opinion that TUGgers are far more likely to be value optimizers and book before the 9 month window (for certain resorts) than the average owner.



I agree. However, realistically, there are not enough to matter and skew the distribution in a measurable way. So, while some of your analysis is theoretically valid, it's likely just that - theory, without too much practical application. I just don't think it plays out as you have outlined anywhere near enough to matter.

(Oh yeah, we own cheap Vegas points that we use on The Big Island )

Cheers.


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## CalGalTraveler (Jun 23, 2020)

FWIW...I would like to see HGVC enable renting of points to/from owners similar to MVC enrolled weeks. A lot less hassle than being a landlord for a home week if you have excess points and can't/won't sell. It would provide an additional option and reduce defaults.


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## CaliSunshine (Jun 23, 2020)

CalGalTraveler said:


> You and @win555 keep referring to Worldmark like there has been a disaster. I thought Worldmark owners were happy and the system runs well. Can you elaborate on what has happened to owners on dilution, i.e. what are you experiencing that you could do before? Plus the number of new units/buildings they added that brought them to this tipping point of disaster you keep referring to?


WMOwners is back up so I’ll let you peruse their much better explained arguments about point inflation/dilution and end my ill advised foray into this subject. https://www.wmowners.com/forum/viewtopic.php?p=80569#80569

To me worldmark still is a tremendous value. I’m in California so 4 Worldmarks are within a couple of hours of driving and a big chunk more are not that much further.

The problem is that they’ve entered this state where points that owners pay 8 cents a point for maintenance fees on are regularly getting rented out at 6 or even under 5 cents a point. That has depressed resale values. Unfortunately they have really low brand recognition and their owner population like most other systems is aging rapidly so I don’t see the trend changing anytime soon.


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## tombanjo (Jun 23, 2020)

As an aside to the aging - Hilton Club NY definitely has an older demographic than W 57th. At least as it appeared to me. Possibly because there are a lot more people at W 57th than HCNY, so a more diverse population is more apparent. There are a lot of people who mention how many kids they have and what activities there are for kids as they look for Orlando or other beach-y vacation locations, so I think a younger demographic is still doing timeshares. Obviously, an older group is possibly retired and has more time for timeshares, as well as more disposable income, but I would not write timeshares off as an ancient and soon to be discarded anachronism.


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## CaliSunshine (Jun 23, 2020)

tombanjo said:


> As an aside to the aging - Hilton Club NY definitely has an older demographic than W 57th. At least as it appeared to me. Possibly because there are a lot more people at W 57th than HCNY, so a more diverse population is more apparent. There are a lot of people who mention how many kids they have and what activities there are for kids as they look for Orlando or other beach-y vacation locations, so I think a younger demographic is still doing timeshares. Obviously, an older group is possibly retired and has more time for timeshares, as well as more disposable income, but I would not write timeshares off as an ancient and soon to be discarded anachronism.


Oh for sure. I'm in my mid-30s. But if it weren't for TUG I would have never found out about Worldmark. Their website still asks me to upgrade to Flash 3.0 or above!


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## CalGalTraveler (Jun 23, 2020)

CaliSunshine said:


> WMOwners is back up so I’ll let you peruse their much better explained arguments about point inflation/dilution and end my ill advised foray into this subject. https://www.wmowners.com/forum/viewtopic.php?p=80569#80569
> 
> To me worldmark still is a tremendous value. I’m in California so 4 Worldmarks are within a couple of hours of driving and a big chunk more are not that much further.
> 
> The problem is that they’ve entered this state where points that owners pay 8 cents a point for maintenance fees on are regularly getting rented out at 6 or even under 5 cents a point. That has depressed resale values. Unfortunately they have really low brand recognition and their owner population like most other systems is aging rapidly so I don’t see the trend changing anytime soon.



Thanks will review. Just to clarify: Is Worldmark a trust points portfolio i.e. owners do not own a deed at a specific property; they own a share of a land trust with many properties, or is it like HGVC with points attached to a specific deed?


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## CaliSunshine (Jun 23, 2020)

CalGalTraveler said:


> Thanks will review. Just to clarify: Worldmark is a trust points portfolio i.e. owners do not own a deed to a specific deed at a specific property correct?


Correct, and I understand HGVC is weeks based. However, my argument is that it doesn't make as much of a difference as people think. Compare the difference in resale between a no points Elara week and a HGVC points-based Elara week. The bulk of the value people are paying for is in the points program.


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## win555 (Jun 23, 2020)

CalGalTraveler said:


> I can give examples of this MF arbitrage:
> 
> a) On a MF/point basis we pay more for NYC bHC points. Most owners of expensive bHC points will never use their points for club resorts because the MF per point cost is too high. So we use "NEW" NYC points for priority NYC reservations where we own. OTOH, legacy OLD owners in Vegas can arbitrage into NYC when the club window opens. They are way ahead on a MF/point basis. For example, on a studio, we pay $1600 MF for 5250 points.  An "Old" Vegas owner can apply at $ 0.14/point x 5250 = $735 for the same week in the same resort. (Am I upset? No because we get priority rights to pick almost any room in the place before everyone else plus we get owner's lounge privileges that traders don't.)  Why would I spend $1600 to trade NYC for a week in Vegas when I could rent for half that?
> 
> b) We trade Vegas into Hawaii annually. We pay a lower MF/point for Vegas, trading into Hawaiian properties with a high MF/point. So if it takes 7000 points for a room, say the Hawaiian owner pays $1600 MF. Our 7000 Vegas points cost us only $1000 MF/year. $1600 vs. $1000 for the same room. Who is ahead? Legacy Vegas. Of course, if the Hawaii owner decides to use their home unit, they get priority reservations. And they should because they paid a premium for this right. Just like we do in NYC.



Let me use Lagoon Tower units as a proxy for high value units/locations/timeframes but low points attached to them.

Because HGVC is deeded, the Lagoon Tower owners may not want to participate in the club as expressed by @alwysonvac. @alwysonvac has also expressed a desire to opt out from the club as it is a burden rather than a benefit. Once you have very few Lagoon Tower units in the club, there are limited arbitrage opportunities.

The situation is slightly different for the high points owner weeks. For many of them it might not make sense to use their weeks in the club because of the high purchase price or MF as explained by @brp and @GT75. In that case the club fee is also a burden for them, maybe a small one because of their high purchase price/MF. They are more likely to participate in the club than the Lagoon Tower owners as they get more points. Some of the high points weeks may end up in the club unintentionally or intentionally, but if you need to buy another Vegas week to stay in the high points units, what happens to the arbitrage calculation above?

Then one also has the risk of Vegas units being in a state with unfavorable laws. Because of the high transfer/activation fees for HGVC, once the arbitrage opportunity becomes limited, it might not be easy to unload.  The Vegas unit values with no club benefits would sell for similar prices to the Marriott there. I see that people pick up a 2 Br Marriott unit there for <$2k, but there is no burdensome transfer fee (unlike HGVC) or ongoing club fee.

The home week stays have be for a week. Vegas doesn't exactly strike me as a destination for week long trips unlike Orlando, Hawaii or the mountains. And there are so many nice shiny hotels in Vegas and the type of demographic that goes there might not value the kitchen and extra space (unlike those going to Hawaii) if one is trying to rent out in Vegas. Many owners will look to unload causing resale prices to fall, some will default causing MFs to rise further and you know the rest...

I guess there will always be other low value units in the club so HGVC Vegas owners might not need to use it for a week long stay. From what I read about exchanging, it could end up being like II/RCI, where there is very limited high value inventory and lots of less desirable weeks that they will let you book for $300 a week.



CaliSunshine said:


> Correct, and I understand HGVC is weeks based. However, my argument is that it doesn't make as much of a difference as people think. Compare the difference in resale between a no points Elara week and a HGVC points-based Elara week. The bulk of the value people are paying for is in the points program.


sometimes not being deeded can have advantages. In WM, the high value units cannot be taken out of the club, so they will always be there but with more competition. Plus my understanding is that the club is registered in California so one day when the time comes to walk away, it shouldn't be a pain with the consumer-friendly CA laws.

That was a lucky coincidence for me with WM registered in CA. I didn't know that when I bought my WM resale.


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## CalGalTraveler (Jun 23, 2020)

win555 said:


> Let me use Lagoon Tower units as a proxy for high value units/locations/timeframes but low points attached to them.
> 
> Because HGVC is deeded, the Lagoon Tower owners may not want to participate in the club as expressed by @alwysonvac. @alwysonvac has also expressed a desire to opt out from the club as it is a burden rather than a benefit. Once you have very few Lagoon Tower units in the club, there are limited arbitrage opportunities.



Why do you think traders should have higher priority? They know what they are getting when they buy. That's why many TUGGers say, "Buy where you want to go." If you buy a week at Lagoon Tower, you have forever rights to use that week. *That's zero devaluation, zip.  *That's vastly different from a land trust in which the entire system is competing for the same limited high-value units.

Can you cite a single points trading program in timesharing that hasn't experienced some form of devaluation or change over time?

In addition, there is arbitrage in Lagoon Tower.  Home week is only good for the exact unit in the exact season.  Many Lagoon Tower home week owners want a different view or different size unit or a different season. This puts them back in club to use points for Lagoon Tower or other property.

Club fee is a small price to pay for the flexibility to tailor what you own to a your vacation needs. Club is still a fraction of rental cost for the same unit. Compared to renting the same unit, owners are saving a bundle.

Traders know they are getting a deal and nothing lasts forever. Ride the horse as long as you can and then move onto the next one. This horse is changing very slowly so I am not concerned.




win555 said:


> Some of the high points weeks may end up in the club unintentionally or intentionally, but if you need to buy another Vegas week to stay in the high points units, what happens to the arbitrage calculation above?



Even if you need to buy another week the MF/point remains the same. If the new unit is .22 cents a point and the Vegas double is .14 cents a point MF, for the same number of points per unit. Sure the purchase price add a few thousand but compared to the new owner who bought developer it's a fraction of the cost for that new unit.  Alternatively, sell Vegas and pick up a resale in the new building for a fraction of the cost.



win555 said:


> Then one also has the risk of Vegas units being in a state with unfavorable laws. Because of the high transfer/activation fees for HGVC, once the arbitrage opportunity becomes limited, it might not be easy to unload.  The Vegas unit values with no club benefits would sell for similar prices to the Marriott there. I see that people pick up a 2 Br Marriott unit there for <$2k, but there is no burdensome transfer fee (unlike HGVC) or ongoing club fee.
> 
> sometimes not being deeded can have advantages. In WM, the high value units cannot be taken out of the club, so they will always be there but with more competition. Plus my understanding is that the club is registered in California so one day when the time comes to walk away, it shouldn't be a pain with the consumer-friendly CA laws.
> 
> That was a lucky coincidence for me with WM registered in CA. I didn't know that when I bought my WM resale.



I wouldn't count your chickens. The law is settled for deeded timeshares. Land Trusts, especially those that contain multi-state deeds, have yet to be fully tested in the courts.

One of the fees for transfer is enrolling the unit in club. This is required of all HGVC units (except a few affiliates). This makes most units available to club and makes the system fluid. MVC only has about 60% of units enrolled. That's a lot of units (incl. highly valued ones that owners will use or rent out ) that will never become available to points owners.


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## CalGalTraveler (Jun 23, 2020)

CaliSunshine said:


> Correct, and I understand HGVC is weeks based. However, my argument is that it doesn't make as much of a difference as people think. Compare the difference in resale between a no points Elara week and a HGVC points-based Elara week. The bulk of the value people are paying for is in the points program.



They also don't want to own units associated with Westgate program which has a reputation for treating resale buyers poorly by stripping away many perks. HGVC treats resale buyers well.


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## GT75 (Jun 23, 2020)

And at Lagoon Tower you are required to be part of the club (it isn’t an affiliate)


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## PigsDad (Jun 23, 2020)

All of this is an interesting theory started by a person who has never owned HGVC (not knocking @win555, just stating that s/he has not had the same personal experience as owners have had), but the true reality could be something quite different.  I propose a survey:

Question: For anyone who has owned HGVC for more than 5 years (experienced owners), do you feel that your value has been (diminished | remained the same | increased) by the addition of the new, higher-point resorts?

As a 15 year owner, I would vote "increased", as I have stated earlier.

Kurt


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## CalGalTraveler (Jun 23, 2020)

@PigsDad good idea. Can you set this up as a poll?


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## PigsDad (Jun 23, 2020)

CalGalTraveler said:


> @PigsDad good idea. Can you set this up as a poll?


Done.

Kurt


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## escanoe (Jun 23, 2020)

If "ifs and buts" were "beers and nuts" this thread would be one heck of a party. I am through reading this one for now. Someone DM me if the topic changes and I should come back.


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## win555 (Jun 23, 2020)

GT75 said:


> And at Lagoon Tower you are required to be part of the club (it isn’t an affiliate)


Yes. Worst of both worlds for owners of Lagoon Tower as said by @alwysonvac. For other club members: LT is in the club but not many owners will make their week available to book for club members because there is only a small percentage of inventory of comparable value in the club.




CalGalTraveler said:


> I wouldn't count your chickens. The law is settled for deeded timeshares. Land Trusts, especially those that contain multi-state deeds, have yet to be fully tested in the courts.


Thanks for the info about California and land trusts. That makes me question whether I should keep WM. I certainly won't be buying in NV as the law there is not favorable for timeshare ownership.

Regarding your other questions: I think we are talking past each other and it's no longer a fruitful discussion, so I'll bow out.

I have the information I need to make my decision based on the things posted by other people and the poll set up by @PigsDad


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## CalGalTraveler (Jun 23, 2020)

@win555 agree it is time to move one. Deeded weeks with points attached, and points-based land trusts are apples and oranges with their own set of pros and cons.

Good luck with your decision.


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## SmithOp (Jun 23, 2020)

escanoe said:


> If "ifs and buts" were "beers and nuts" this thread would be one heck of a party. I am through reading this one for now. Someone DM me if the topic changes and I should come back.



my popcorn hasn’t run out yet


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## rjp123 (Jun 23, 2020)

brp said:


> That's the point. Folks who purchase at the high-point-price places plan to use it there. Otherwise they'd be buying in Vegas.
> 
> Cheers.


The vast majority of people who buy at the high price places do not know about the resale market. They are sold on the fact that their one week in a high price resort can get them many more weeks in a low price resort. 

Sent from my Pixel 4 using Tapatalk


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## brp (Jun 24, 2020)

rjp123 said:


> The vast majority of people who buy at the high price places do not know about the resale market. They are sold on the fact that their one week in a high price resort can get them many more weeks in a low price resort.
> 
> Sent from my Pixel 4 using Tapatalk



Interesting. Do you have data to support that? I don't doubt the "don't know about the resale market" part. But I am skeptical of people buying higher-priced bHC points to use in places like Vegas and Orlando rather than at their high-priced resort. Basically, my conjecture is that people buying W. 57th primarily use it at W. 57th, not Vegas.

Also, I don't believe that the point multiple is that great that one gets "many more" weeks elsewhere. Maybe 2:1?

Now, even exempting any knowledge of the resale market, if one wants to use points in Vegas, is it cheaper (in buy-in and MFs) to simply buy more in Vegas verus buying in NYC to use in Vegas? I just think that there is never a logic point (resale or not), to buy high-priced points to use in low-priced locations. But I haven't priced out the permutations.

Cheers.


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## rjp123 (Jun 24, 2020)

brp said:


> Interesting. Do you have data to support that?



Yes I sat through a sales presentation at West 57th. The salesperson told me by buying a higher point package there that I could get multiple weeks in Hawaii or Las Vegas with my one week in New York.



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## SmithOp (Jun 24, 2020)

brp said:


> Interesting. Do you have data to support that? I don't doubt the "don't know about the resale market" part. But I am skeptical of people buying higher-priced bHC points to use in places like Vegas and Orlando rather than at their high-priced resort. Basically, my conjecture is that people buying W. 57th primarily use it at W. 57th, not Vegas.
> 
> Also, I don't believe that the point multiple is that great that one gets "many more" weeks elsewhere. Maybe 2:1?
> 
> ...



I agree with you, its foolish to use NYC or Hawaii points to go to Vegas or Orlando but I suppose some owners do it, heck they even convert to HHonors because they believe 50:1 is better than the 25:1 the rest of us get. I just don’t think its that many doing it.  Then again, the kool aid is strong at a sales presentation.

With my 14,400 points I can get good value if I maximize season, unit size, unit style (std vs plus/premier) and check in day. I check in Monday and out Friday to eliminate costlier weekends on each end of my reservation.
4+ weeks in a studio
3+ weeks in a 1br
2+ weeks in a 2br

For example, we like long stays at Kingsland gold season in the phase 2 two bedroom standard units. Right now I can book 11 nights in a BR2 for 9800 points.  These units sell out first so I’m not the only one bargain shopping at Kingsland.







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## bizaro86 (Jun 24, 2020)

brp said:


> Interesting. Do you have data to support that? I don't doubt the "don't know about the resale market" part. But I am skeptical of people buying higher-priced bHC points to use in places like Vegas and Orlando rather than at their high-priced resort. Basically, my conjecture is that people buying W. 57th primarily use it at W. 57th, not Vegas.
> 
> Also, I don't believe that the point multiple is that great that one gets "many more" weeks elsewhere. Maybe 2:1?
> 
> ...



NYC isn't really a high points location though. It's expensive, but the low points for w57 and long home week preference mean it's probably used at w57.

High points weeks would be things like the Crane or Ocean tower where individual weeks are well over 10k points. 

I think it's very likely a salesperson in Barbados selling a 14.4k one bedroom will discuss how "because this is such a desirable location you can trade for multiple weeks elsewhere

In fact, you could get a week in NYC, a week in Vegas, and a week in Hawaii for just your one week here!"


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## brp (Jun 24, 2020)

Thanks all for the perspective. I wonder how many people actually do that, but it's clear that it is out there and advertised as such. And I would imagine that, even with possibly higher buy-in, the MFs would be lower on the expensive uber-package and the equivalent number of points in separate low-point-value contracts. So there is likely a way in which it makes financial sense to those not familiar with resale.

Cheers.


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## ski_sierra (Jun 24, 2020)

Week 7 for next year is still available at the high points units @ Ocean Tower but it's not available at Lagoon Tower.

It could be due to unsold inventory or because the $/point ratio is favorable for those units or something else. Many of the ocean tower units make it to the list of units with a good $/point ratio:









						2020 Hilton Grand Vacations Maintenance Fees
					

* Please limit this thread to only the MF specifics and take discussions/commentary to the discussion boards. Thank you!  * Owners, please report your Weeks MF's as they are billed (NOT proposed/estimated) in this format:  Resort Name/Unit Size Operating Fee Reserve Fee Property Taxes (or note...




					tugbbs.com
				





*Ocean Tower*





Lagoon Tower


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## mjm1 (Jun 24, 2020)

We just completed a two night stay at Trump International in Las Vegas using open season. We paid $275 for two nights in a corner 1BR unit. It was about 950 square feet and had a great view. We really enjoyed the resort and the unit and thought it was a great deal.

Best regards.

Mike


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