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Back Again, Still Confused About the Point of Points

OldPantry

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I've enjoyed the lively response to my post. The responses seems to fall into two categories. 1. Yup, points are fantastically expensive. 2. You can't put a price on joy.

Now, only a curmudgeon would pooh pooh someone's perception of satisfaction. If your points package (of whatever type, legacy, new purchase, hybid ... ) floats your boat, then lovely. Really. Just don't tell me you can't put a price on it. You can.

I've invited some of you to do just that. While the computation is unquestionably a bit more complex than the one I did, it's not impossibly so. You either bought timeshare weeks (at some measurable price) and have transitioned to points (at some measurable cost), or you bought points from Marriott (also at some measurable price). You are either paying maintenance fees on your weeks, or maintenance fees on your points. Even you hybrid guys have measurable investments and measurable costs. I'm just hoping that one or two of you (ideally folks with a nice slog of points) will trudge through the math to arrive at an average nightly cost. I know it won't be exact. Frankly, I'd be quite happy if someone has discovered the grail of affordability, flexibility and joy.
 
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Steve Fatula

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I've enjoyed the lively response to my post. The responses seems to fall into two categories. 1. Yup, points are fantastically expensive. 2. You can't put a price on joy.

Now, only a curmudgeon would pooh pooh someone's perception of satisfaction. If your points package (of whatever type, legacy, new purchase, hybid ... ) floats your boat, then lovely. Really. Just don't tell me you can't put a price on it. You can.

I've invited some of you to do just that. While the computation is unquestionably a bit more complex than the one I did, it's not impossibly so. You either bought timeshare weeks (at some measurable price) and have transitioned to points (at some measurable cost), or you bought points from Marriott (also at some measurable price). You are either paying maintenance fees on your weeks, or maintenance fees on your points. Even you hybrid guys have measurable investments and measurable costs. I'm just hoping that one or two of you (ideally folks with a nice slog of points) will trudge through the math to arrive at an average nightly cost. I know it won't be exact. Frankly, I'd be quite happy if someone has discovered the grail of affordability, flexibility and joy.

Average nightly cost where? Anywhere? Specific place? Cheapest possible place? I assume based on MF + taxes. The best I have done is $88/nt with points. But it obviously depends where and when. I could stay offseason in studios for example, as cheap as 50 points/nt, i.e, ~$27 per night. Is that not cheap?

So, if I can go somewhere on points you cannot go on non points, that has no value? Endless examples on the forums of those! I get you see little value, and like you, I don't want to pooh pooh your satisfaction. :)

If I can stay 90 days in said studios, can you do that with 1 week owned? 2 weeks? I think it will take you 6-7 weeks and then locking off, paying those fees, exchanging, II fees, etc. Which would be cheaper? And actually, I get 25% off within 30 days, I'll give you a chance and not even claim that bonus which would extended my points to 120 nights or 4 months.

So, you want to writeoff over 30 years. Ok, my all in, every last cent, was $5.45/pt. I can sell those today at $4/pt. So, I would "lose" $1.45/pt * 4500 I own = $6525 over 30 years. Not much of a loss, and that presumes the resale value doesn't rise or fall. So, at my extreme 90 nights example, that's $2.41/nt added to my $27 = just under $30/nt. Interested in your response... I took the bait!
 
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vacationtime1

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Average nightly cost where? Anywhere? Specific place? Cheapest possible place? I assume based on MF + taxes. The best I have done is $88/nt with points. But it obviously depends where and when. I could stay offseason in studios for example, as cheap as 50 points/nt, i.e, ~$27 per night. Is that not cheap?

So, if I can go somewhere on points you cannot go on non points, that has no value? Endless examples on the forums of those! I get you see little value, and like you, I don't want to pooh pooh your satisfaction. :)

If I can stay 90 days in said studios, can you do that with 1 week owned? 2 weeks? I think it will take you 6-7 weeks and then locking off, paying those fees, exchanging, II fees, etc. Which would be cheaper?

So, you want to writeoff over 30 years. Ok, my all in, every last cent, was $5.45/pt. I can sell those today at $4/pt. So, I would "lose" $1.45/pt * 4500 I own = $6525 over 30 years. Not much of a loss, and that presumes the resale value doesn't rise or fall. So, at my extreme 90 nights example, that's $2.41/nt added to my $27 = just under $30/nt. Interested in your response... I took the bait!

The gentleman doth protest too much, methinks.
 

OldPantry

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Average nightly cost where? Anywhere? Specific place? Cheapest possible place? I assume based on MF + taxes. The best I have done is $88/nt with points. But it obviously depends where and when. I could stay offseason in studios for example, as cheap as 50 points/nt, i.e, ~$27 per night. Is that not cheap?

So, if I can go somewhere on points you cannot go on non points, that has no value? Endless examples on the forums of those! I get you see little value, and like you, I don't want to pooh pooh your satisfaction. :)

If I can stay 90 days in said studios, can you do that with 1 week owned? 2 weeks? I think it will take you 6-7 weeks and then locking off, paying those fees, exchanging, II fees, etc. Which would be cheaper? And actually, I get 25% off within 30 days, I'll give you a chance and not even claim that bonus which would extended my points to 120 nights or 4 months.

So, you want to writeoff over 30 years. Ok, my all in, every last cent, was $5.45/pt. I can sell those today at $4/pt. So, I would "lose" $1.45/pt * 4500 I own = $6525 over 30 years. Not much of a loss, and that presumes the resale value doesn't rise or fall. So, at my extreme 90 nights example, that's $2.41/nt added to my $27 = just under $30/nt. Interested in your response... I took the bait!

Hi Steve. Sounds pretty great, 4500 points for $5.45 a point. Was that direct from Marriott, or a purchase on the open market? And there's nothing else lurking in the background, like a prior purchase of weeks? I'd say you drove a hard bargain with somebody. Even so, I'm a bit struck by that $80 nightly figure. It seems to me you might not be including all the costs. Your maintenance fee on points should be something like $2370. If you use all the 4500 points on a single plat 2BR week (not at all unlikely, as my own Ko Olina analysis shows), that comes to $339/night, plus the highly derided $30" loss" you give me. So, $369/night. But you did pay out something like $24,525 for the points. That's money you don't have, money that might otherwise generate the 5% my bonds yield. So, add in $1225, or $175/night. So, really more like $544/night. And isn't there a $195 yearly owner's fee? So, $570/night. Of course, as I originally acknowledged, the nightly drops substantially if you tinker with off-season stays and smaller units. Your talk of 90 studio nights yearly is enticing (but I bet you don't actually do anything like that). Since my own analysis derives from 2BR plats at places like the destinations I own, I think it's fair to use that in comparing your situation.

At $570 a night for a plat 2BR, you've achieved flexibility at a far lower cost than reserving directly with Marriott. Of course, that flexibility is hardly cheap compared to the alternative I've pursued. Still, I thank you for providing some stats that make the points picture look less overwhelmingly bleak. I'll take a look and see what ultra-cheap resale points cost, adjusted for all the friction involved in obtaining and registering them.
 

Steve Fatula

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MF is 2457 for the points. Yes, you can spend your points in non optimal ways, I could also exchange the most expensive week in your case for summer desert. That doesn't make my example wrong though, it isn't. No, I did not do 90 studio nights (but it IS possible), but I have done some since it's essentially a hotel stay while out of town for part of a week at a super low cost. My cost was every penny to purchase the points, most but not all resale. Your math is way off the way I view vacations. I will get virtually all my purchase money back, possibly, more. Which might allow for some growth of the capital, certainly nowhere near the loss you suggest. You are using a good example for your side, but a terrible example for the points side to compare. Sorry, but your comparison is a very bad one for points usage to make your ownership look better than it is. I would never ever use all those points for one stay, that would be foolish for me at least. Stays do not have to be off season. and remember, I even gave you a bunch of value when I didn't use the within 30 day 25% discount on points, which I almost always do use. That makes 4500 points = 6000 points. Hawaii is always available via points within 30 days. I do have an ownership as well, but that does not play into this. It has no bearing on any of the prices I pay or considerations found here. what it does do is allow us to use points when it's a better deal, and ownership when it's a better deal. Why would I ever pay $500/nt for Ko Olina when I traded a lockoff into it, that's wasteful. Factoring my cost over 7 nights is not accurate, I have never ever taken only 7 nights in a year!

Yes, a fairer comparison is weeks you get vs weeks I get, but not at the same places as I do not do what you do. It might be fair to say therefore for you points would not work, but it is not fair to say weeks would be better for me, they would not be. So, in short, my actual per night cost was under $80. But I didn't want to rely on that as some seem to think that's not likely to use, but we are retired. I think the best value comes with a combination myself, if that were possible at a decent price. Yes, there is a yearly enrollment fee, but no II, no lockoff. So, cheaper than weeks in the fee sense.

In any case, hopefully, I have shown that points can certainly make sense, depends what you do, where you want to go, flexible, etc. I could just as easily take your ownership and fit it into examples I can do much cheaper than you. But, in general, when you purchase points at developer prices, it's a terrible deal, I do agree.

I will amend my answer after JIMinNC below posted. He is spot on and I did not mention that I also used money that would not have been invested. These purchases have nothing to do with invested money. You should not consider the potential gains from investment since likely the money would have been spent on travel anyway, probably costing me more money. After all, you calculated you saved money. Well, saving money is a positive, not a negative.
 
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JIMinNC

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OldPantry,

I took a stab at estimating our nightly cost since we in initially bought MVC in 2014. I included all trips taken, plus those scheduled, and included all maintenance fee costs, club dues, point rentals, etc. For years that we've already booked trips but not yet paid MF (2019), I estimated the fees at +5% from 2018.

Total nights: 56 (all were 2BR except for 4 nights at MVC Pulse at the Mayflower in DC)

Total ongoing costs (not including purchase): $16,500

Total cost per night: $295

This is from a blend of 7 points bookings, a weeks booking, and a couple of II exchanges.

This does not factor in the $31,600 purchase cost of: 1) 1750 points, 2) an enrolled Barony Beach Club week, and 3) an external non-enrolled Maui Ocean Club week. I estimate that I could net $6500 if I sold the Maui week after broker commission, $2200 for the Barony week, and about $5000 for the points; so total of $13,700. That leaves a net capital loss on the purchases of $17,900. I assume a 25 year usage life of the ownership (until roughly age 80), so that loss adds $716/year to the cost of ownership. Over the five years of usage that generated the 56 nights, that's $3580, or an additional $64/night.

So, that increases the total nightly cost to $359/night for mostly 2BR condos. Many of those condos rent for around $500/night or (in the case of Hawaii) much more. (Example - we added two cash nights to our current Points stay that we are enjoying right now at HHI Grande Ocean, and those two nights cost us just under $1000.)

I did not include an investment cost of capital or lost earnings on the $31,600 purchase cost, since I have never sold income/capital gains-producing investments to buy timeshares. I've only used excess, uninvested cash, bonus proceeds, etc. This money would likely never have been added to our investment portfolio, and if not spent on timeshares, would have been spent on non-timeshare travel or other cash purchases or expenditures.
 

vacationtime1

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MF is 2457 for the points. Yes, you can spend your points in non optimal ways, I could also exchange the most expensive week in your case for summer desert. That doesn't make my example wrong though, it isn't. No, I did not do 90 studio nights (but it IS possible), but I have done some since it's essentially a hotel stay while out of town for part of a week at a super low cost. My cost was every penny to purchase the points, most but not all resale. Your math is way off the way I view vacations. I will get virtually all my purchase money back, possibly, more. Which might allow for some growth of the capital, certainly nowhere near the loss you suggest. You are using a good example for your side, but a terrible example for the points side to compare. Sorry, but your comparison is a very bad one for points usage to make your ownership look better than it is. I would never ever use all those points for one stay, that would be foolish for me at least. Stays do not have to be off season. and remember, I even gave you a bunch of value when I didn't use the within 30 day 25% discount on points, which I almost always do use. That makes 4500 points = 6000 points. Hawaii is always available via points within 30 days. I do have an ownership as well, but that does not play into this. It has no bearing on any of the prices I pay or considerations found here. what it does do is allow us to use points when it's a better deal, and ownership when it's a better deal. Why would I ever pay $500/nt for Ko Olina when I traded a lockoff into it, that's wasteful.

Yes, a fairer comparison is weeks you get vs weeks I get, but not at the same places as I do not do what you do. It might be fair to say therefore for you points would not work, but it is not fair to say weeks would be better for me, they would not be. So, in short, my actual per night cost was under $80. But I didn't want to rely on that as some seem to think that's not likely to use, but we are retired. I think the best value comes with a combination myself, if that were possible at a decent price. Yes, there is a yearly enrollment fee, but no II, no lockoff. So, cheaper than weeks in the fee sense.

In any case, hopefully, I have shown that points can certainly make sense, depends what you do, where you want to go, flexible, etc. I could just as easily take your ownership and fit it into examples I can do much cheaper than you. But, in general, when you purchase points at developer prices, it's a terrible deal, I do agree.

We have different opinions about the cost of owning and using a timeshare because we made different assumptions about exit value.

You assume you will make a profit when you eventually sell your timeshares, thus reducing or eliminating capital costs.

I am less optimistic; I expect to lose money on them overall. I therefore add a substantial capital component to the cost of ownership.
 

Steve Fatula

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We have different opinions about the cost of owning and using a timeshare because we made different assumptions about exit value.

You assume you will make a profit when you eventually sell your timeshares, thus reducing or eliminating capital costs.

I am less optimistic; I expect to lose money on them overall. I therefore add a substantial capital component to the cost of ownership.

Not exactly true, though re-reading it I see what you are saying. I certainly do not assume I would make money, I said "virtually all" which is based on current market the only info we have, and could make more which is also possible. I am typing with one hand for the foreseeable future, the word will should probably have been might, or should even. Will is too strong, but, I am having difficulty right now with meds and such and typing. Making too many mistakes! It's 15 minutes later and I am still correcting this post. That's why the next non red sentence is there, I said it could (might) offset a portion of the loss he was considering using his method, not exceed it. I could get nothing, I could get more. Things change over time, no one knows the future. At present, I would come fairly close to even. That was the point. If I get 0 back, I am still way ahead. Adding to the cost of something that allows me to spend less is not making sense to me. And that was speaking of the points component, no question I will get a tiny fraction of my ownership back, but then again, I bought it 20 years ago. I have an analysis something on this BBS of a trip last year and I had costed out my 4 weeks in Australia. I don't recall right now what I said the total savings was, and admittedly this would be the highest of any trip I ever took. But I believe it was close to $7,000, but I wouldn't guarantee that in my state of mind. Which pays on it's own most of the acquisition cost of my original ownership back then. In a single trip.

I would not add a capital component since it's money that would be spent vacationing anyway, except *more* money. That more than offsets the capital component. It's obviously not all the very first year. But it isn't too many years at which point I would have less money had I have not purchased. How can you justify adding cost to something that is saving!? I consider all benefits of ownership, not just exchanges, points, etc also which are not even considered here. Can you really stay at a top resort that has a getaway via II for $200 or so for a week without owning? Maybe sometimes, not sure, but doubtful. We use getaways a lot. You guys are not even considering how that lowers your costs here.

Keep in mind, the OP is talking about how he is saving. He is clearly saving more than he thinks.
 
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OldPantry

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OldPantry,

I took a stab at estimating our nightly cost since we in initially bought MVC in 2014. I included all trips taken, plus those scheduled, and included all maintenance fee costs, club dues, point rentals, etc. For years that we've already booked trips but not yet paid MF (2019), I estimated the fees at +5% from 2018.

Total nights: 56 (all were 2BR except for 4 nights at MVC Pulse at the Mayflower in DC)

Total ongoing costs (not including purchase): $16,500

Total cost per night: $295

This is from a blend of 7 points bookings, a weeks booking, and a couple of II exchanges.

This does not factor in the $31,600 purchase cost of: 1) 1750 points, 2) an enrolled Barony Beach Club week, and 3) an external non-enrolled Maui Ocean Club week. I estimate that I could net $6500 if I sold the Maui week after broker commission, $2200 for the Barony week, and about $5000 for the points; so total of $13,700. That leaves a net capital loss on the purchases of $17,900. I assume a 25 year usage life of the ownership (until roughly age 80), so that loss adds $716/year to the cost of ownership. Over the five years of usage that generated the 56 nights, that's $3580, or an additional $64/night.

So, that increases the total nightly cost to $359/night for mostly 2BR condos. Many of those condos rent for around $500/night or (in the case of Hawaii) much more. (Example - we added two cash nights to our current Points stay that we are enjoying right now at HHI Grande Ocean, and those two nights cost us just under $1000.)

I did not include an investment cost of capital or lost earnings on the $31,600 purchase cost, since I have never sold income/capital gains-producing investments to buy timeshares. I've only used excess, uninvested cash, bonus proceeds, etc. This money would likely never have been added to our investment portfolio, and if not spent on timeshares, would have been spent on non-timeshare travel or other cash purchases or expenditures.

Ah the power of positive thinking. You didn't sell investments to buy the timeshares, so there's no opportunity cost? Come on. I don't dispute your right to spend the money, and therefore not invest it. I just think it's willful myopia to say there's no cost. "Uninvested cash" means precisely that you could have invested it. And reinvested the earnings on the investment. Or spend those earnings on ... vacations! And sure, that spent income would be a cost too.

Consider the alternate uses you mention "non timeshare travel, or other cash purchases or expenditures." If you had done those things, would you pretend that they were cost-free? And let's be clear, you didn't spend a lump sum of $31,600 back then on a vacation. You bought something. You could have bought bonds (or stocks, or beanie babies), but you bought timeshares and points. You gave up future income for future vacations. That IS opportunity cost.

I was willing to factor in my opportunity cost, painful as it was looking back. So, including what your reject, your opportunity cost appears to be somewhere around $1580 yearly (that dreaded 5%), so over the five years you are analyzing, that would be $7900, or about $140 for each of 56 nights you've enjoyed. So again, it looks like about $500 per night. I don't think that's bad, especially as your Hawaii exposure is a bit larger than mine. Our weeks exposure, exclusive of points, is kind of similar Thanks for providing your analysis.
 

bazzap

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I absolutely agree with you but I think MVC Destination Points are for the more affluent Tuggers who value flexibility, views, choice and saving time. Unless you are buying to use a week, weeks and exchanging for whatever you get through Interval is more cost effective.
Best of all, those who were lucky enough to buy weeks resale before the cutoff date and enrol for DC points at minimal cost to benefit from all options.
 

Steve Fatula

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Ah the power of positive thinking. You didn't sell investments to buy the timeshares, so there's no opportunity cost? Come on. I don't dispute your right to spend the money, and therefore not invest it. I just think it's willful myopia to say there's no cost. "Uninvested cash" means precisely that you could have invested it. And reinvested the earnings on the investment. Or spend those earnings on ... vacations! And sure, that spent income would be a cost too.

Here's my question, I get your thinking, but...

So, lets' say I bought my timeshare and spent $50,000 over 10 years, purchase cost, MF, taxes, etc and vacations, i.e., all in. Hypothetical number. You want to add opportunity cost to that portion spent to purchase it. Ok.

Now, let's say I did not purchase that timeshare 10 years ago, and, I spent 50,000 on vacations over that 10 year period. In this case, you do not want to apply opportunity cost. Right?
 

JIMinNC

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Here's my question, I get your thinking, but...

So, lets' say I bought my timeshare and spent $50,000 over 10 years, purchase cost, MF, taxes, etc and vacations, i.e., all in. Hypothetical number. You want to add opportunity cost to that portion spent to purchase it. Ok.

Now, let's say I did not purchase that timeshare 10 years ago, and, I spent 50,000 on vacations over that 10 year period. In this case, you do not want to apply opportunity cost. Right?

This is sorta what I was trying to say as to why I disagree with applying a strict opportunity cost to the purchase price. If we hadn’t spent that upfront $$ on the timeshares, it would have likely been spent on other travel or other purchases. I could also have invested it in Amazon or Netflix stock and done a heck of a lot better than 5%. So the opportunity cost of your 5% bond could be 100% for missing the opportunity to buy AMZN or NFLX (the money I DID invest in Netflix about a year ago is up 125% and Amazon is up 60%), so every REAL “opportunity cost” is relative to the opportunity lost.

So the “real” opportunity cost of our timeshare expenditure is not that the money was not invested, it is that it wasn’t spent on other trips, a new car (also a depreciating asset), etc. Speaking of cars, how often do we talk about the “opportunity cost” of spending $31,000 on a car? You could make the same argument there.
 

VacationForever

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We do not attempt to do fuzzy math with our purchases. What we do know is that between timeshare conversion to MRP and credit card bonuses and points, they have gotten us 1 to 2 sets of round trip business class air tickets to Europe and Asia each year. This is in addition to several free 5 nights stay at Cat 8 and 9 hotels. We still get several weeks of timeshare stays. Our Marriott purchase cost 70K and annual MF is around 6.5K this year. 1 round trip business class tickets cost between 4.5K to 6K, for the 2 of us it would have been 9K to 12K. This year we are doing 2 trips. Separately I made another trip to Asia already this year. We clearly come out ahead.

We are mixing points and weeks, but to us it is the same as they are all developer bought and eligible for MRP conversion.
 
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OldPantry

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Here's my question, I get your thinking, but...

So, lets' say I bought my timeshare and spent $50,000 over 10 years, purchase cost, MF, taxes, etc and vacations, i.e., all in. Hypothetical number. You want to add opportunity cost to that portion spent to purchase it. Ok.

Now, let's say I did not purchase that timeshare 10 years ago, and, I spent 50,000 on vacations over that 10 year period. In this case, you do not want to apply opportunity cost. Right?

Thinking ... thinking. No doubt about the latter question. You're spending $5,000 per year. Straight expense, real cost $5,000 per year. The first question is incomplete though. You agree I can add in opportunity cost, but don't add it in. If you did, then that ten-year $50,000 is more. Right? In year 1, you didn't spend $5,000, you invested more, a lot more. You invested in an asset instead of a ... bond. I know the mantra in TUG is not to think of a timeshare as an asset, but it is. Just one that has, by and large, lost value rather than gain. Still, it is worth something. And you've received real value over the years, specifically access to properties that would cost more at "rack rates", or the open market (as defined by Marriott's reservation system). My point all along is that the value proposition, for all of us, is often less generous that we have assumed. At some point, the trajectories overlap, and owning weeks/purchasing points is uneconomical.

For me, I am safely on the value side. Several of the points responders have satisfied me that they too are on the favorable side. I am also intrigued by the points argument that you can reap tons of off-plat studios and 1 BRs with a modest number of points. That might compare favorably to II getaways and certificates, which also plunder that inventory. It would require some heavy lifting to work it out, though.

Realizing that my real cost for my favored 2BR plat is actually near $400/night was sobering. I remember being happy when we bought our first Ko Olina EOY, figuring that our cost per night was $150, and knowing that we could halve that by locking off. Inflation and erosion of timeshare values put paid to that. Now, when we go to our favorite VC spots, I still love them and know that I'm getting a relative bargain. But when I look to book something outside the system, and assuming a $400/night budget, I look hard at Airbnb first. We've booked 3 bedroom flats in Rome, Copenhagen, Paris and London, all close-in, all below $300 per night. Yeah, I know, apples and oranges, but still ... BTW, we've used Airbnb and VRBO many times. One absolute dud (severe misrepresentation by the owner), but otherwise splendid results. Take a dip, you might like it!
 

GregT

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I’m about $300/night, which gets me:

Two weeks in a 3BR unit at MOC

One week in a 2BR at HGVC KingsLand

One week at Ko Olina

Another week somewhere

So 5 weeks of vacation for $10K/year. Plus it “forces” me to take the vacations and I have priceless time with friends/family that I wouldn’t do at rack rates.

Fun stuff these timeshares!

Best,

Greg

Edited: most of the $10K is depreciation expense on the purchases because I’m cash neutral during the year on the MFs. And this assumes these things become worthless. Interesting exercise.
 
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Steve Fatula

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Thinking ... thinking. No doubt about the latter question. You're spending $5,000 per year. Straight expense, real cost $5,000 per year. The first question is incomplete though. You agree I can add in opportunity cost, but don't add it in. If you did, then that ten-year $50,000 is more. Right?

No, I didn't agree, it was a theoretical ok based on your argument. In both examples, I spent 50k on vacations. You call part of scenario 1 an asset. In both cases, I have 50k less. Slightly more than 50k in the first example since you want to say it could have been invested so I lost a tiny amount of that over scenario 2. But on the other hand, I will get >0 when I sell it, no doubt offsetting the entire additional cost you want to add and then some. As far as money spent, it's the same! It's money I am spending anyway. The odds are it was never invested (100% odds in my case), I don't sell investments to take a vacation, it's in a savings account making 1% or whatever the useless current rate is. So, maybe your calculations make sense for you, but they do not for me. My cost was 50k in both examples. And I am ahead every year thereafter. Though those are not accurate numbers, just hypothetical. That's how I see it at least. I see no need to add to the first example. Total money spent is what matters for this retired guy. It would have gone to vacations anyway, except, more expensive vacations.

Why can't you just consider the timeshare purchase in my example as simply vacation! It really is. I understand in the case of people who finance, or, people who do have to scrape up the money that there should be costs added. In my case, the current points going resale rate was around $4 per point, might be slightly lower now due to the junk fee increase, but, they keep raising points cost too, so, might be the same. So, that's not much less than I paid anyway. This I am sure is much different than your purchases, my guess is you will lose almost all of it. Who's to say if points will depreciate, appreciate, or neither. But if you use it to get better vacations for less, over time of course, I don't see any need in my example to add any cost. I just see it in my accounting system as vacation money.

More important is to also consider if you want to calculate future MF costs since they go up, vs, future rental rates since those will go up also. What will future inflation be? What will interest rates be? etc. We're not far off really, and I hoped I at a minimum stimulated your thought on how points can be useful. But if someone wanted me to buy points at $14 each or whatever they are now, no way! The old developer priced weeks were better than developer priced points iMHO.
 
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kds4

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Nothing I have is eligible for points enrollment. I'm and outsider looking in. And yes, I am OLD! And, no, I am not worried at all (about timeshare, at least, maybe about the world a bit). I do have kids, and wonder whether they will be grateful when I "gift" them our weeks.

As someone who has owned as long as you have (certainly pre-2010 based on 15 years of EOY ownership), why do you say you have nothing eligible for enrollment?
 
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TravelTime

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I've enjoyed the lively response to my post. The responses seems to fall into two categories. 1. Yup, points are fantastically expensive. 2. You can't put a price on joy.

Now, only a curmudgeon would pooh pooh someone's perception of satisfaction. If your points package (of whatever type, legacy, new purchase, hybid ... ) floats your boat, then lovely. Really. Just don't tell me you can't put a price on it. You can.

I've invited some of you to do just that. While the computation is unquestionably a bit more complex than the one I did, it's not impossibly so. You either bought timeshare weeks (at some measurable price) and have transitioned to points (at some measurable cost), or you bought points from Marriott (also at some measurable price). You are either paying maintenance fees on your weeks, or maintenance fees on your points. Even you hybrid guys have measurable investments and measurable costs. I'm just hoping that one or two of you (ideally folks with a nice slog of points) will trudge through the math to arrive at an average nightly cost. I know it won't be exact. Frankly, I'd be quite happy if someone has discovered the grail of affordability, flexibility and joy.

This is like debating the value and joy of going on a mid-priced, mass market Royal Caribbean cruise vs a luxury higher priced Seabourn cruise. Or staying at a moderately priced Marriott vs an expensive Ritz Carlton. Or buying a Toyota vs a Lexus. And so on and so on. Some of us know the math but have the means to stay at more upscale places because we like it. :D

P.S. the incremental difference between Marriott weeks and points is not enough to make me lose sleep. I own weeks and points. I bought the points primary to use at the Ritz Carlton Residence Clubs bc you can't buy weeks there unless you pay a small fortune for a fractional.

We all have different budgets, goals and interests. No need to argue over it or try to prove a point. That is the nice thing about timeshares. There is something for everyone at low budgets, medium budgets and higher budgets.
 

TravelTime

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Hi Steve. Sounds pretty great, 4500 points for $5.45 a point. Was that direct from Marriott, or a purchase on the open market? And there's nothing else lurking in the background, like a prior purchase of weeks? I'd say you drove a hard bargain with somebody. Even so, I'm a bit struck by that $80 nightly figure. It seems to me you might not be including all the costs. Your maintenance fee on points should be something like $2370. If you use all the 4500 points on a single plat 2BR week (not at all unlikely, as my own Ko Olina analysis shows), that comes to $339/night, plus the highly derided $30" loss" you give me. So, $369/night. But you did pay out something like $24,525 for the points. That's money you don't have, money that might otherwise generate the 5% my bonds yield. So, add in $1225, or $175/night. So, really more like $544/night. And isn't there a $195 yearly owner's fee? So, $570/night. Of course, as I originally acknowledged, the nightly drops substantially if you tinker with off-season stays and smaller units. Your talk of 90 studio nights yearly is enticing (but I bet you don't actually do anything like that). Since my own analysis derives from 2BR plats at places like the destinations I own, I think it's fair to use that in comparing your situation.

At $570 a night for a plat 2BR, you've achieved flexibility at a far lower cost than reserving directly with Marriott. Of course, that flexibility is hardly cheap compared to the alternative I've pursued. Still, I thank you for providing some stats that make the points picture look less overwhelmingly bleak. I'll take a look and see what ultra-cheap resale points cost, adjusted for all the friction involved in obtaining and registering them.

Before discovering timeshares, we were dumb consumers of mid-luxury level vacations. We traveled in 4-5 star hotel rooms and we were paying $400 to $600 a night and taking 2-3 week vacations to exotic and some not-too-exotic places for those prices. So to us, anything below that seems like a deal. We have stayed at many of the leading hotels of the world and enjoyed most of them (although not all, many are over-rated). Now that we have discovered timeshares, we think $2000-$2600 a week for an oceanfront 2 bedroom in Hawaii or the Caribbean is a bargain because we were paying $3500-$5000 a week for a hotel room. It's all relative.
 

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I came from redweek, there, people like to compare "outrageous timeshare MFs" with cheap hotel rooms. I guess you can look at it so many different ways! I learn new perspectives on timeshares each day here, amazing the myriad of uses and views.
 

TravelTime

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OldPantry,

I took a stab at estimating our nightly cost since we in initially bought MVC in 2014. I included all trips taken, plus those scheduled, and included all maintenance fee costs, club dues, point rentals, etc. For years that we've already booked trips but not yet paid MF (2019), I estimated the fees at +5% from 2018.

Total nights: 56 (all were 2BR except for 4 nights at MVC Pulse at the Mayflower in DC)

Total ongoing costs (not including purchase): $16,500

Total cost per night: $295

This is from a blend of 7 points bookings, a weeks booking, and a couple of II exchanges.

This does not factor in the $31,600 purchase cost of: 1) 1750 points, 2) an enrolled Barony Beach Club week, and 3) an external non-enrolled Maui Ocean Club week. I estimate that I could net $6500 if I sold the Maui week after broker commission, $2200 for the Barony week, and about $5000 for the points; so total of $13,700. That leaves a net capital loss on the purchases of $17,900. I assume a 25 year usage life of the ownership (until roughly age 80), so that loss adds $716/year to the cost of ownership. Over the five years of usage that generated the 56 nights, that's $3580, or an additional $64/night.

So, that increases the total nightly cost to $359/night for mostly 2BR condos. Many of those condos rent for around $500/night or (in the case of Hawaii) much more. (Example - we added two cash nights to our current Points stay that we are enjoying right now at HHI Grande Ocean, and those two nights cost us just under $1000.)

I did not include an investment cost of capital or lost earnings on the $31,600 purchase cost, since I have never sold income/capital gains-producing investments to buy timeshares. I've only used excess, uninvested cash, bonus proceeds, etc. This money would likely never have been added to our investment portfolio, and if not spent on timeshares, would have been spent on non-timeshare travel or other cash purchases or expenditures.

I see your point on the investment cost of capital. We used extra money we had lying around to buy our timeshares. Not money that we had targeted for investments. It was our play money. Also we used to spend double or triple per year on vacations in smaller hotel rooms. So for us, we are ahead with much bigger condo-like accommodations and guaranteed ocean front and/or ocean views. If we sell for less than we purchased, that is okay with us because we have paid very good prices on the resale market so we doubt it would be a huge reduction, especially after many years of usage.
 
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OldPantry

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I see your point on the investment cost of capital. We used extra money we had lying around to buy our timeshares. Not money that we had targeted for investments. It was our play money. Also we used to spend double or triple per year on vacations in smaller hotel rooms. So for us, we are ahead with much bigger condo-like accommodations and guaranteed ocean front and/or ocean views. If we sell for less than we purchased, that is okay with us because we have paid very good prices on the resale market so we doubt it would be a huge reduction, especially after many years of usage.

Donning my Quixote hat, here's one last stab. I'm seeing a lot of distinction between mad money (excess cash, available for any whim) and investment money. You are aware, I hope, that money is money. Basically, you spend it or invest it. Maybe this will help clarify my meaning. Say you had your $60 or $70K sitting in bonds (or Amazon stock), and decided to pull it out to buy a timeshare or points. Even you guys would then acknowledge that you experienced opportunity cost, trading predictable (bonds) or unpredictable (Amazon) income for access to vacation lodging. So why is money you could invest any different? Making a distinction between money you don't intend to invest and money you do is arbitrary, a label stuck on something that is actually neutral.

At no point am I trying to scold you for spending money. You must spend a good deal of it for basics: food, housing, cars (yes, cars too). Beyond that you spend it for a host of other, perfectly justifiable, things. Have at it.

Deferring spending lets you arrange future income that can then be spent. Upfront spending works the opposite. Just because the goal is discretionary (vacations) doesn't change the math. And yes, I think you should use the logic of opportunity cost to a range of other things too. So, yes to that snarky question of buying a car. And yes, particularly to buying a house versus renting, or buying an expensive house versus a cheaper one. It's a tool to enable good decision making, not a noose to strangle fun.

BTW, my wife and I are now retired, and the bulk of our income comes from investments (yes, those moldy old bonds). So, the dichotomy of spend/invest is ever present. The bonds spin off interest bi-yearly. I then have to decide whether to reinvest or spend. And next month, again. We're very thankful for the luxury of having to decide.
 
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Steve Fatula

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Donning my Quixote hat, here's one last stab. I'm seeing a lot of distinction between mad money (excess cash, available for any whim) and investment money. You are aware, I hope, that money is money. Basically, you spend it or invest it. Maybe this will help clarify my meaning. Say you had your $60 or $70K sitting in bonds (or Amazon stock), and decided to pull it out to buy a timeshare or points. Even you guys would then acknowledge that you experienced opportunity cost, trading predictable (bonds) or unpredictable (Amazon) income for access to vacation lodging. So why is money you could invest any different? Making a distinction between money you don't intend to invest and money you do is arbitrary, a label stuck on something that is actually neutral.

At no point am I trying to scold you for spending money. You must spend a good deal of it for basics: food, housing, cars (yes, cars too). Beyond that you spend it for a host of other, perfectly justifiable, things. Have at it.

Deferring spending lets you arrange future income that can then be spent. Upfront spending works the opposite. Just because the goal is discretionary (vacations) doesn't change the math. And yes, I think you should use the logic of opportunity cost to a range of other things too. So, yes to that snarky question of buying a car. And yes, particularly to buying a house versus renting, or buying an expensive house versus a cheaper one. It's a tool to enable good decision making, not a noose to strangle fun.

BTW, my wife and I are now retired, and the bulk of our income comes from investments (yes, those moldy old bonds). So, the dichotomy of spend/invest is ever present. The bonds spin off interest bi-yearly. I then have to decide whether to reinvest or spend. And next month, again. We're very thankful for the luxury of having to decide.

Sure, then, add your opportunity cost to taking vacations without timeshare then, especially since that cost will be far higher over time. It makes no sense to not do so, it's a lot of money and think of all the money you'd have if you did not, and, it's certainly not a basic living requirement. Then I would say your scenario is more accurate.

Otherwise, using your logic, I should be behind the first so many years and adding this opportunity cost, then, break even, then, I would be ahead and investing that saved money due to the purchase that is saving me money each year and making 5%. So, there would be no added cost, there would be added income again making your math wrong. Instead, you should be subtracting that extra capital you are making money on to the night rental cost.

Finally, while you see no distinction between mad money and investment money, I do. My money was not making 5%, it was in a savings account and always would be. That's what that money is for. So, making 1% or .1% or whatever current worthless savings rates are. Your example again states the money is in bonds and was taken out to purchase timeshare. Different example.

If your final paragraph where you say you're retired and live off of bond interest, I understand your thinking. Just realize you are still taking that money out when taking a vacation had you had not purchased the timeshare. You simply cannot justify not adding that cost to the non timeshare part of the equation (too many negatives). This is your arbitrary distinction.

That being said, this is now an accounting discussion and really doesn't matter as far as points goes vs weeks.
 
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TravelTime

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Donning my Quixote hat, here's one last stab. I'm seeing a lot of distinction between mad money (excess cash, available for any whim) and investment money. You are aware, I hope, that money is money. Basically, you spend it or invest it. Maybe this will help clarify my meaning. Say you had your $60 or $70K sitting in bonds (or Amazon stock), and decided to pull it out to buy a timeshare or points. Even you guys would then acknowledge that you experienced opportunity cost, trading predictable (bonds) or unpredictable (Amazon) income for access to vacation lodging. So why is money you could invest any different? Making a distinction between money you don't intend to invest and money you do is arbitrary, a label stuck on something that is actually neutral.

At no point am I trying to scold you for spending money. You must spend a good deal of it for basics: food, housing, cars (yes, cars too). Beyond that you spend it for a host of other, perfectly justifiable, things. Have at it.

Deferring spending lets you arrange future income that can then be spent. Upfront spending works the opposite. Just because the goal is discretionary (vacations) doesn't change the math. And yes, I think you should use the logic of opportunity cost to a range of other things too. So, yes to that snarky question of buying a car. And yes, particularly to buying a house versus renting, or buying an expensive house versus a cheaper one. It's a tool to enable good decision making, not a noose to strangle fun.

BTW, my wife and I are now retired, and the bulk of our income comes from investments (yes, those moldy old bonds). So, the dichotomy of spend/invest is ever present. The bonds spin off interest bi-yearly. I then have to decide whether to reinvest or spend. And next month, again. We're very thankful for the luxury of having to decide.

I think everyone understands your point but not everyone thinks of all buckets of their money the same way. I think we all know math and can spin the data many different ways to suit our beliefs. If I only thought the way you do, I would never go on vacations or buy anything expensive except take care of my basic needs. When I do think that way, I kick myself for all my bad investments (not timeshares but other things that really were supposed to be investments). But then I have to remember that everything balances and we have made some extremely great investments that allow us to have a bucket of play money.

However, I do think you have brought up a very good viewpoint for people who have never considered the opportunity cost of money. I have been aware of this concept since I learned economics in college. But many people are not aware so I am sure you are doing a service for many people on Tug who have never considered that they could invest the upfront cost of a timeshare in many other ways. Just like renting a house vs buying a house. Basically all financial decisions have an opportunity cost but you never know what it will be until after the fact because no one can predict the market.
 
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