Open Season Rates Changes for 2020

[Tamaradarann]

You have more faith then I do! I sure hope you are right. You seem to know a lot about HGVC. I, like you, own in Vegas but mostly travel to the BI and mostly stay at the Bay Club. Take that away and... well, I don't see me using my Vegas home week too much!

The only constant is change.

Well I have some faith. I was the one who initially found the first large increase in open season rates the HGVC tried to double the rates. It was in December a number of years ago when I was trying to book 2 nights in early January, a Thursday and Friday at the Hokolani in a 1 BR+, before our previously booked vacation in the Lagoon Tower. The rate at the time was about $150/night for Thursday and $170/night for Friday. When I went to confirm the reservation for the 2 nights it came to almost $600. At that point I stopped and waited to talk with the call center the next morning. The call center people were totally caught off guard and had no idea what was going on. They had an executive call me later that morning and told me that she understood the problem and would bring it to her boss the Vice President of Member Services. As you can see the rates were eventually lowered back and I was able to book the 2 nights at the previous years rates. Since then the Open Season rates have gone up but not nearly as high as that December day.

I totally agree with you, that if they take away the ability to exchange to other resort within the HGVC system I am out also.

 

[alwysonvac]

For those who don't know the history

In December 2014, HGVC provided their 2015 Open Season rates to the following which brought on the protest:

Studio were raised to $60 - $290 (from $60 to $145)
One Bedroom were raised to $80 - $580 (from $80 to $290)
Two Bedroom were raised to $105 - $750 (from $105 to $375)
Three Bedroom were raised to $160 - $860 (from $160 to $430)

​

The table below shows the rates each year leading up to this event in late 2014. We started with a very simple flat rate based on unit size only. It has morphed into all sort of increases based on unit type (standard, plus, premium, etc), day of week (weekday vs weekend), season (platinum, etc) and now locations.

Folks weren't happy with the earlier rate increases but the rate hike for 2015 simply pushed folks over the edge. It seems like we're going down that path again with this huge spike as they try to get rates closer to what they charge the public.

Here's HGVC's December 2014 canned reply on social media:

Sent a tweet - was redirected to a reply to a similar complaint on Facebook...

Pasting reply here for those who have no desire to go to fb.

Hilton Grand Vacations: We thank you for your communication, and trust that the following update serves to bring further clarity to this topic:

As the vacation ownership inventory at our properties reaches a sold out status, the Open Season availability for units respectively diminishes. Open Season Rental rates remain flexible based on location, season, day of the week and demand. Beginning in 2015, some nightly rates remain similar to those of the previous year, and some increased rates are based on the location, season or day of the week that are historically in higher demand by our Club Members.

The intention of this update was to offer these accommodations during the 30 day booking window at a percentage-off of what can be found on Hilton.com, which primarily offers the inventory that HGV Owners actually give back to the Club in exchange for other benefits or Partner Perks such as cruises, RV rentals, houseboats, etc. Previous rates were not reflective of the specific marketplace: for example, a 1-bedroom in Orlando does not equate to the same as a 1-bedroom in Honolulu. These recent updates to the Open Season rates chart remedy such discrepancies.

We will continue to monitor the markets in which we operate HGV resorts, and offer seasonally adjusted Open Season rates in an effort to provide the most desirable offers to our Owners. While we understand this recent change may initially be frustrating, we apologize that our notification did not reach you before the Open Season window opened for January 1.

​

After lots of complaints, HGVC changed their position in January 2015 and posted the following on social media. I was a very proud TUGGER that day .

I finally took a look at their facebook page....

I finally decided to take a look at their facebook page, and I see the following posted by HGVC:

2015 promises to be a great year to be in the Club, with a world of vacation possibilities awaiting discovery! Visit http://www.ClubTraveler.com for the latest Club news, Member memories and travel inspirations. Look for announcements of new resorts and programs on the horizon, and enjoy all your favorite destinations and perks too (notably, the rates for the popular last-minute Open Season reservation privilege for Club Members will remain unchanged for the rest of 2015!). Happy Vacationing to All!

So maybe they will just delay this for a year, and try to double the price once again after this year in 2016. Or maybe they will re-think and come up with something else in 2016.

Great job guys. As a new HGVC owner, I was just going to write off Open Season as being a benefit, but maybe for now, I can still use it.

Thanks,
Great3

​

The TUG threads from Dec 2014 & January 2015
- https://tugbbs.com/forums/index.php...k-action-we-stood-together-hgvc-acted.221714/
- https://tugbbs.com/forums/index.php...ke-action-stand-together-and-be-heard.221136/
- https://tugbbs.com/forums/index.php?threads/open-season-rates-no-longer-a-good-deal.220231/

The original 2015 Open Season Rates - https://tugbbs.com/forums/index.php?attachments/2015-hgvclub-fee-schedule-pdf.5225/
The revised 2015 Open Season Rates - https://tugbbs.com/forums/index.php?attachments/2fees-eng-rev010715-pdf.5226/

 

[Tamaradarann]

Thanks for providing the precise details for what I recollect from memory. With the help of the information you provided I found the tread that I started. From there TUG members wrote to HGVC to complain and the rates were brought back to the 2014 rates for 2015.

Open Season Rates no longer a good deal!!
Discussion in 'Hilton Grand Vacations Club / HGVC' started by Tamaradarann, Dec 4, 2014.

1. I tried to book an open season reservation for January 1st in a Platinum Season Resort. The rate for a 1 BR+ was $270 for a week night, and $290 for a weekend night. That is ridiculous. I called and wrote to HGVC to complain and tell them that they destroyed a very valuable benefit for HGVC membership. I hope they change their thought on this.
   
   

 

[alwysonvac]

I’ll also update my post to make the dates clearer.

Thanks for providing the precise details for what I recollect from memory. With the help of the information you provided I found the tread that I started. From there TUG members wrote to HGVC to complain and the rates were brought back to the 2014 rates for 2015.

Open Season Rates no longer a good deal!!
Discussion in 'Hilton Grand Vacations Club / HGVC' started by Tamaradarann, Dec 4, 2014.

1. I tried to book an open season reservation for January 1st in a Platinum Season Resort. The rate for a 1 BR+ was $270 for a week night, and $290 for a weekend night. That is ridiculous. I called and wrote to HGVC to complain and tell them that they destroyed a very valuable benefit for HGVC membership. I hope they change their thought on this.

The larger units are taking the biggest hit in the 2020 Open Season rates.

 

[JIMinNC]

I think what is probably happening here is HGVC is simply just re-balancing their price/demand inventory algorithms to better reflect relative demand. Tuscany Village probably went down because there is so much capacity in Orlando, they need to keep the prices cheap to fill as many rooms as possible. But at Lagoon Tower, it makes absolutely no sense to rent something Open Season at $191/night if that same unit rents on Hilton.com for $500-$600 per night or more. That low price creates artificial demand because that rate is so far below the market. By raising the price substantially - but still staying below market - HGV simply manages demand better and still provides an owner a discount. The higher price reduces demand so there are fewer people chasing the few available Open Season Units, and the price better reflects a reasonable discount off the true market. It's all about revenue optimization, so they are probably just doing a better job of analyzing and tweaking their algorithms to optimize the revenue per room night.

In addition, Open Season in Hawaii is next to impossible to get, unless you are willing to move every two days to a different unit in a different building and be "homeless" during moving day. It usually means a number of nights getting up just before midnight 30 days in advance to hope you can find something...My point was Open Season used to be a sales and owner advantage. It is no longer. Over the past 5 years, they have killed the golden goose.

With the higher prices, maybe now this will be a bit easier to book, and Open Season will still provide a significant discount. @alwysonvac noted above that the 2020 2BR One Season rate at Lagoon Tower comes out to $314/night. By contrast, looking out 30 days on Hilton.com, 2BR units at Lagoon Tower are going for $500 to $800 per night before taxes and fees. So Open Season is still a good deal if you can get it.

I will also add that over the last two years or so my impression has been hotel rates in general have had a big spike up. This is a sample of one, so should be considered anecdotal, not scientific - but over the last two years, I've paid for more $400-$500 hotel nights than in my previous six decades combined. It seems like rates have really spiked.

 

[brp]

I think what is probably happening here is HGVC is simply just re-balancing their price/demand inventory algorithms to better reflect relative demand. Tuscany Village probably went down because there is so much capacity in Orlando, they need to keep the prices cheap to fill as many rooms as possible. But at Lagoon Tower, it makes absolutely no sense to rent something Open Season at $191/night if that same unit rents on Hilton.com for $500-$600 per night or more. That low price creates artificial demand because that rate is so far below the market. By raising the price substantially - but still staying below market - HGV simply manages demand better and still provides an owner a discount. The higher price reduces demand so there are fewer people chasing the few available Open Season Units, and the price better reflects a reasonable discount off the true market. It's all about revenue optimization, so they are probably just doing a better job of analyzing and tweaking their algorithms to optimize the revenue per room night.

Exactly, and amplifies what was stated above. The rates are still competitive with market, just not a steal. And, as you say, this better manages demand. So, it would seem that the sky is not falling after all. We're just getting a good deal rather than a ridiculously good deal.

Cheers.

 

[CalGalTraveler]

I think what is probably happening here is HGVC is simply just re-balancing their price/demand inventory algorithms to better reflect relative demand. Tuscany Village probably went down because there is so much capacity in Orlando, they need to keep the prices cheap to fill as many rooms as possible. But at Lagoon Tower, it makes absolutely no sense to rent something Open Season at $191/night if that same unit rents on Hilton.com for $500-$600 per night or more. That low price creates artificial demand because that rate is so far below the market. By raising the price substantially - but still staying below market - HGV simply manages demand better and still provides an owner a discount. The higher price reduces demand so there are fewer people chasing the few available Open Season Units, and the price better reflects a reasonable discount off the true market. It's all about revenue optimization, so they are probably just doing a better job of analyzing and tweaking their algorithms to optimize the revenue per room night.



With the higher prices, maybe now this will be a bit easier to book, and Open Season will still provide a significant discount. @alwysonvac noted above that the 2020 2BR One Season rate at Lagoon Tower comes out to $314/night. By contrast, looking out 30 days on Hilton.com, 2BR units at Lagoon Tower are going for $500 to $800 per night before taxes and fees. So Open Season is still a good deal if you can get it.

I will also add that over the last two years or so my impression has been hotel rates in general have had a big spike up. This is a sample of one, so should be considered anecdotal, not scientific - but over the last two years, I've paid for more $400-$500 hotel nights than in my previous six decades combined. It seems like rates have really spiked.

While I generally agree, here are two additional thoughts:

1) With 95% occupancy, I doubt there is much open season availability at Lagoon Tower so whether it's $190 or $340 may be moot unless you are booking the bottom of season for a day here or there and it happens to add onto your travel schedule. It would be next to impossible to find 5 consecutive days at Lagoon during OS.

2) Although hotel prices have spiked, I doubt these fees will go down commensurately when we hit a downturn and hotel fees plummet.

 

[Ralph Sir Edward]

Well that depends are you a member of the HGVC? If not you are correct and have none of the benefits or cost increases of the Club effect you. If so, the cost of Open Season has gone up in prime locations. So if you do go to the Bay Club using your week or 2 weeks and want to extend your vacation another few days either before or after to get lower cost flights, which is what we have done in Honolulu, you now will pay additional for this benefit just like everyone else.

I am not a member of HGVC - by choice. Nor do I seek to get the lowest possible airfares. (I often fly the top US class - First or Business, as you wish. No bargains there.) What I pay for is best access to the weeks I want. (A Penthouse, winter high season, in a block.)

Yes, I could have gone the cheaper Vegas swap route, but then I'd be in the main pack for reservations. (And at the rate all the fees keep going up, it may not end much cheaper.)

 

[jestme]

I think what is probably happening here is HGVC is simply just re-balancing their price/demand inventory algorithms to better reflect relative demand. Tuscany Village probably went down because there is so much capacity in Orlando, they need to keep the prices cheap to fill as many rooms as possible. But at Lagoon Tower, it makes absolutely no sense to rent something Open Season at $191/night if that same unit rents on Hilton.com for $500-$600 per night or more.

Keep in mind, Hilton.com no longer has anything to do with HGVC. Also, Hilton owns the hotel rooms on Hilton.com whereas HGVC is simply acting as an agent for the real HGVC owners of the unused rooms they are renting out in Open Season. The Lagoon Tower is 100% sold out, has been for years. If they had those rooms as part of an exchange, they would be renting them out on Hilton.com or Expedia, not Open Season. But they can't. They don't own them. Also, hotels can be booked a year in advance, so if they want to match pricing to hotel prices, they need to match them to the discounted rates available right near check-in dates, not the "rack rate" that no one pays 8 months in advance. The also need to provide daily room service and other hotel room advantages as well. In addition, the local hotel gets revenue from the Hilton.com rental, as they have the direct expenses for the stay, whereas the HOA of the timeshare does not.

 

[fernow]

So they substantially devalued one of your benefits of membership. No big deal.
Wow.
Just... wow.

 

[CalGalTraveler]

This seems to be an industry trend - especially with the hotels separating from the timeshare groups.

Over on the MVC forum there are owners who said they purchased MVC in the 1990s and could book several weeks at Marriott Hotels and were sold on funding their retirement travel with just one week. Remember Travel 401ks? Now they are lucky if their week converts to a few nights at a Courtyard hotel. Nice retirement, eh?

None of the TS companies have changed their conversion rates even though the hotel points have devalued significantly. Marriott now charges resort fees on award nights turning the concept of a "free" credit card night on it's head with a devaluation. Even as I look on HHonors. We used to be able to get a top hotel for 80 - 90k a night. Now that has skyrocketed.

 

[alwysonvac]

Increases are one sided.

As an owner, my annual cost are increasing as well.

• Maintenance Fees
• Annual Club Dues
• Transaction Fees

HGVC offers owners a fix rate exchange for Hilton Honor Points and Club Partner exchanges that DO NOT INCREASE.

However on the flip side, HGVC continues to increase Open Season Rates which allows them to make more than what they are providing in exchange.

And we get to pay for this “Club Member benefit” every year via our increasing annual Club dues. How is this a benefit?

For my Lagoon Tower week, I rather have the option of opting out of the Club.
Yeah, I know no ClubPoints (home week only) but also no annual Club Dues and no transaction fees. The minimal additional cost now is approaching the $300 mark ($182 for 2020 Club Dues + $67 for 2019 Club reservation fee).

 

[JIMinNC]

Keep in mind, Hilton.com no longer has anything to do with HGVC. Also, Hilton owns the hotel rooms on Hilton.com whereas HGVC is simply acting as an agent for the real HGVC owners of the unused rooms they are renting out in Open Season. The Lagoon Tower is 100% sold out, has been for years. If they had those rooms as part of an exchange, they would be renting them out on Hilton.com or Expedia, not Open Season. But they can't. They don't own them. Also, hotels can be booked a year in advance, so if they want to match pricing to hotel prices, they need to match them to the discounted rates available right near check-in dates, not the "rack rate" that no one pays 8 months in advance. The also need to provide daily room service and other hotel room advantages as well. In addition, the local hotel gets revenue from the Hilton.com rental, as they have the direct expenses for the stay, whereas the HOA of the timeshare does not.

This is not correct. HGV absolutely can, and does, rent inventory controlled by HGV on Hilton.com. You can rent most, if not all, HGV properties on Hilton.com. Here are several categories of units for rent in early January at Lagoon Tower and Kalia, for example:

These are the actual rates, roughly 30 days out (just like Open Season). As you can see, Open Season is still a better deal.

When someone rents an HGV unit on Hilton.com, they get the same benefits as they would with a hotel, like daily room cleaning, even though it is a timeshare unit. And in most cases, Hilton does not own the hotel rooms they rent out on Hilton.com either. The Hilton hotels themselves are almost always owned by REITs, investment firms, etc. Hilton Hotels Corp just acts as the property manager and/or reservation agent. It's similar for the Hilton Grand Vacations units that are listed on Hilton.com. Those are rented out on Hilton.com by virtue of the marketing agreements that HGV has with Hilton Hotels Corp.

While you are correct that a property like Lagoon Tower is largely sold out, HGV still winds up controlling inventory at virtually all of their resorts - when owners convert their week to Hilton Honors points, when sold units are reacquired through owner upgrades, ROFR, or foreclosure (until resold), etc. etc. That's how they get inventory to rent on Hilton.com.

 

[JIMinNC]

Increases are one sided.

As an owner, my annual cost are increasing as well.

• Maintenance Fees
• Annual Club Dues
• Transaction Fees

HGVC offers owners a fix rate exchange for Hilton Honor Points and Club Partner exchanges that DO NOT INCREASE.

However on the flip side, HGVC continues to increase Open Season Rates which allows them to make more than what they are providing in exchange.

And we get to pay for this “Club Member benefit” every year via our increasing annual Club dues. How is this a benefit?

For my Lagoon Tower week, I rather have the option of opting out of the Club.
Yeah, I know no ClubPoints (home week only) but also no annual Club Dues and no transaction fees. The minimal additional cost now is approaching the $300 mark ($182 for 2020 Club Dues + $67 for 2019 Club reservation fee).

Companies like HGV are in business to make a profit. Investors want to see profits grow so the value of their stock ownership will grow. Companies can grow profits by either increasing revenue or reducing costs. I don't own HGV stock, but I do want all of the companies I do own to grow. As a result, I expect the price of everything I spend money on to go up over time, especially during a strong economic cycle when consumer demand is strong, and with high-quality brands like HGV. That's a main reason why companies invest so much in building their brand identity - a powerful brand gives them pricing power over weaker brands.

 

[brp]

So they substantially devalued one of your benefits of membership. No big deal.
Wow.
Just... wow.

If it's a benefit I don't use then, yeah, no big deal.
Also, since it's still cheaper than equivalent hotel rates, it's still a benefit should I choose to use it.

Cheers.

 

[CalGalTraveler]

The problem is that the price increases defy physics...i.e. what goes up, will never come down.

 

[JIMinNC]

The problem is that the price increases defy physics...i.e. what goes up, will never come down.

That's true for most all prices, over time. See below.

 

[alwysonvac]

Silly me, what was I think ... they need to make a profit!

In 2021, they should eliminate Open Season rates all together and raise annual Club dues and transaction fees by 100% each year.
In 2022, they should raise their HOA management fees by 150% each year.
In 2023, they should raise transfer fees and enrollment/activation fees by 200% each year.
In 2024, they should start charging us ... daily resort fees!
In 2025, they should start charging us a resort check-in fee.

Sorry, just having a little fun.

 

[CalGalTraveler]

@alwysonvac LOL. Don't give them any ideas.

Seriously, If this happens they will see a lot of abandonments on their hands. Timeshares are only as good as they compare to the rental market. Right now the rental market is robust. However when the next downturn ensues, hotel rates will plummet putting MF upside down. Sadly this is what happened to Diamond after their relentless greed drove them to raise fees beyond market conditions. Biggest difference is that they raised rates and MF so high that they are still upside down in a robust market.

(Stupid management move...Diamond now has the lowest percentage of new sales in the industry (25% vs 49%), unhappy owners, and Apollo has a billion dollar albatross around their neck that they cannot sell but allowed this to happen...)

 

[JIMinNC]

Silly me, what was I think ... they need to make a profit!

In 2021, they should eliminate Open Season rates all together and raise annual Club dues and transaction fees by 100% each year.
In 2022, they should raise their HOA management fees by 150% each year.
In 2023, they should raise transfer fees and enrollment/activation fees by 200% each year.
In 2024, they should start charging us ... daily resort fees!
In 2025, they should start charging us a resort check-in fee.

Sorry, just having a little fun.

Clearly, increases like that would have major customer blow-back. I recognize your post was in jest, but the reality is, that is always the balancing act companies have to make when raising prices/adding fees - how much will the market bear before the larger business is negatively impacted. Quite a few years ago, I worked in product management for a large bank, and when rate spreads narrowed, we had a major push to increase fee-based income to offset the reduced net interest income. Through research, as well as trial and error, we found the fees that our customers were most willing to pay. That's how we started charging fees to use ATMs that used to always be free - we found our customers were willing to pay much more than we ever thought they would for the convenience of using off-site ATMs.

The baggage fees, premium seat upcharges, and other a la carte fees now charged by airlines are another example of companies finding creative ways to grow revenue. Those fees now represent a key area of positive revenue growth for that industry.

Finally, be careful about what you say in jest - those increases you hypothesized sound a lot like some of the increases we experienced during our sad years as a Diamond owner. With the Apollo/HGV rumors still not having been put to rest, that possibility strikes a little too close to home!

 

[alwysonvac]

And an old TUG poll showed that 50% of our peers bought from the developer.
Thankfully, TUG most likely saved the other remaining half

For some, buying from the developer meant losing tens of thousands and for others it’s in the hundreds of thousands. But every resale week starts off as a developer week. The money owners gave up front to the developer was supposed to be for these so called Club Benefits (aka Savings). The only valuable club benefit left is Open Season rates.

HGVC developer prices are extremely high. Folks have reported the following this year :

• 14,400 points for $129,900 or monthly mortgage payments of $1800 for ten years.
• 8400 points for $60,000
• 7000 points for $60,000

I’ve only used Open Season three or four times during my 10+ years ownership so this is not a devastating blow for me. I’m just pissed based on principle. I don’t expect Open Season rental rates to stay frozen and I know eventually the savings will decrease over time but I also don’t expect ridiculous spikes to get us there quicker.

 

[frank808]

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.

 

[Tamaradarann]

And an old TUG poll showed that 50% of our peers bought from the developer.
Thankfully, TUG most likely saved the other remaining half

For some, buying from the developer meant losing tens of thousands and for others it’s in the hundreds of thousands. But every resale week starts off as a developer week. The money owners gave up front to the developer was supposed to be for these so called Club Benefits (aka Savings). The only valuable club benefit left is Open Season rates.

HGVC developer prices are extremely high. Folks have reported the following this year :

• 14,400 points for $129,900 or monthly mortgage payments of $1800 for ten years.
• 8400 points for $60,000
• 7000 points for $60,000

I’ve only used Open Season three or four times during my 10+ years ownership so this is not a devastating blow for me. I’m just pissed based on principle. I don’t expect Open Season rental rates to stay frozen and I know eventually the savings will decrease over time but I also don’t expect ridiculous spikes to get us there quicker.

I agree that excessive Open Season rates take away a benefit that HGVC owners should have. My previous posts illustrate my negative reaction to that 2015 ridiculous increase that they eventually walked back. While the recent increases are very annoying they are much less than that initial walked back increase and it is 5 years later so hotel costs have increased significantly in those 5 years. We all know that the developer sales pitch that buying timeshares locks in your costs of vacation forever is another one of their lies. In your last few posts you have pointed out some extreme examples of the possible increases that timeshare companies can and do implement to make timesharing not worth it. Hopefully, none of what you put out there really happens, and we only have to deal with a significant but somewhat reasonable Open Season rate increase.

 

[CalGalTraveler]

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.

I wonder if pressure from Apollo/Diamond and other acquirers is causing them to do this to increase their quarterly results to extract a higher selling price.

 

[tombanjo]

i doubt it as open season is probably a very small part of revenue, and might belong to the developer in many cases