New Guideline Changes - Regarding Guest Certificates

[ecwinch]

I'm a professional engineer, and I have done building reserve fund studies. I know how they work.

It is my considered (but not professional) opinion that worldmark does not have sufficient reserves in place to cover the costs they will face in the future.

I cite a couple pieces of evidence for that.

The first is that the auditors report says their goal is 40% funding of reserves, and that they intend to increase reserve payments to get there. That implies the current level of the reserve fund is insufficient, although not enough information is provided in the auditors report to judge that with certainty.

The second is the fact they have been out spending reserves the last two years. So the reserve fund balance is actually declining. That is concerning to me (as a WM owner). The existing resorts are getting older by definition. Expensive structural repairs (4 month new elevator in San Francisco in 2019) are going to get more frequent. Plus, they add new resorts every year, and the reserves have to cover them as well.

So every year the appropriate size of the reserve fund is getting larger, while the actual fund gets smaller. That is not sustainable. I'm young enough that a special assessment will be within my lifetime.

I absolutely agree with you. We have an aging physical plant, and many of the resorts with classic credit values are not generating enough dues revenue and are essentially being subsidized by the credit valuations on new resorts. So fewer and fewer resorts actually contributing to the reserve fund, and more drawing it down.

And unfortunately - with the dues increases capped at 5% - the BoD has few viable options for increasing revenues.

When we do get hit with our first special assessment - it will either be a sizable amount OR become a regular occurrence. WM has always been a great value (relative to other systems), and as the saying goes "everything returns to the mean".

 

[CO skier]

I absolutely agree with you. We have an aging physical plant, and many of the resorts with classic credit values are not generating enough dues revenue and are essentially being subsidized by the credit valuations on new resorts. So fewer and fewer resorts actually contributing to the reserve fund, and more drawing it down.

And unfortunately - with the dues increases capped at 5% - the BoD has few viable options for increasing revenues.

When we do get hit with our first special assessment - it will either be a sizable amount OR become a regular occurrence. WM has always been a great value (relative to other systems), and as the saying goes "everything returns to the mean".

WorldMark owners have benefited the last 10 years or so from the fact that the Governing Documents allow the greater of 5% or the CPI for maintenance fee increases. Inflation has been increasing by more than the artificially depressed rate reported by the government (CPI), but maintenance fees have been able to increase beyond that percentage to cover the true, increasing costs of running the Club.

5% per year increases the last few years have just barely allowed the WorldMark budget to tread water. When understated government CPI inflation approaching 5% returns (it is inevitable), there is no way the WorldMark budget will balance without special assessments. This does not include the reserve fund, which I agree is underfunded due to the 5% maintenance fee cap. So, even higher special assessments to cover the reserve fund in addition to the budget deficit.

WorldMark Owners who do not understand the budget (99%+ by my estimate) and expenses think the 5% or CPI cap on maintenance fees is something wonderful. All it does is amplify the inevitable special assessments that will become a regular occurrence if (most likely when) inflation above 5% returns to the economy.

 

[ronparise]

I am sure the hard to get reservations is a saturated market; megas get whatever they can and owners get whatever they can, both at 6 a.m. PT every morning. These reservations cannot get any harder to get.

There is no room for marginal renters to move up in the market; if there was, they would already be reserving these higher profit reservations. Result: Marginal reservations are no longer profitable with $198 added on to speculative reservations booked just under 13 months in advance. Owners reserve and move (with their families) into these second tier, but highly desirable reservations, because their cost is only credits and an HK versus a renter's cost of credits plus HK plus profit margin plus $198 Guest Certificate fees.

You are missing the advantage that big owners with multiple accounts may still have with the their use of the wait list

If guest fees are non refundable and cant be transferred from reservation to reservation; you are right mega renters wont have any advantage over regular owners and will be limited to just one of those extremely hard to get reservations, like everyone else

 

[IsaiahB]

WorldMark owners have benefited the last 10 years or so from the fact that the Governing Documents allow the greater of 5% or the CPI for maintenance fee increases. Inflation has been increasing by more than the artificially depressed rate reported by the government (CPI), but maintenance fees have been able to increase beyond that percentage to cover the true, increasing costs of running the Club.

5% per year increases the last few years have just barely allowed the WorldMark budget to tread water. When understated government CPI inflation approaching 5% returns (it is inevitable), there is no way the WorldMark budget will balance without special assessments. This does not include the reserve fund, which I agree is underfunded due to the 5% maintenance fee cap. So, even higher special assessments to cover the reserve fund in addition to the budget deficit.

WorldMark Owners who do not understand the budget (99%+ by my estimate) and expenses think the 5% or CPI cap on maintenance fees is something wonderful. All it does is amplify the inevitable special assessments that will become a regular occurrence if (most likely when) inflation above 5% returns to the economy.

The recent Minimum wage increases have accelerated the issue, it shouldn't have presented itself for another 5-10 years.

The amount that fully understands the situation we are in is a rounding error.
I'd estimate it to at around 500 owners, and that's generous.
The rest of the owners complain about the 5% increases and the poor service, deferred maintenance, etc in the same breath.
I think the blueprint will be to SA for major renovations of the biggest resorts.
Either it's deferred by a year or 150% of the cost is SA'd to the reserves.

The 50k deductible minimum for insurance doesn't help either.
I'll be incredibly disappointed if a new policy isn't announced next board meeting.

The other solution is to amend the MF provisions.

 

[samara64]

Is the WM BOD simply heeding the crys of anguish from Members who think they should be able to get Summer in Hawaii or Seaside but don't get there act together until January. Before all these changes we never had a problem getting Seaside, Hawaii, or any other resort we wanted when we wanted it. We have never rented Points in. We have never rented Points out. We have never charged anyone (family or friend) when we made a Reservation in their name, except for TOT.

If I paid for the Points how is it different if I am in the Unit or my Son and his family are in the Unit. I paid for the Points and I am using them for the enjoyment of my family.

So if the WM BOD was interested in the average Owner and not in lining Wyndham's pocket they would allow us to submit a List of at least our siblings and children and they should be except from this ridiculous Guest Certificate.

With the large number of Gift Certificates we will receive each year we will never have to pay for one. But that is not the point. The Point is that once again the WM BOD is hurting the avarage owner and will not make much of a dent in Megarenters.

This is from club declaration. No fees are mentioned. Bylaws are based on Declaration and has to comply:

2.15 Renting of Units. A Member other than Declarant may
charge a fee or rent for the use of a Unit during such Member's
Vacation Credit Uses by a guest or invitee. However, the WorldMark
Board of Directors may determine to either restrict or place
conditions on rentals at particular resorts to comply with laws or
restrictions by governing entities, so that The Club can own and
operate at a resort location; and so that no excessive financial
burden is imposed on The Club.

They can limit rental of a specific resort but no extra charges.

Frankly I am all for limiting the rentals (on all resorts or specific ones) to a list of gusts attached to each account that can only be modified for a fee once the list is full.

Not sure how Wyndham will calculate the 5% maximum per year increase. Will they adjust the MF to factor in the revenue from GC.

 

[ecwinch]

This is from club declaration. No fees are mentioned. Bylaws are based on Declaration and has to comply:

2.15 Renting of Units. A Member other than Declarant may
charge a fee or rent for the use of a Unit during such Member's
Vacation Credit Uses by a guest or invitee. However, the WorldMark
Board of Directors may determine to either restrict or place
conditions on rentals at particular resorts to comply with laws or
restrictions by governing entities, so that The Club can own and
operate at a resort location; and so that no excessive financial
burden is imposed on The Club.

They can limit rental of a specific resort but no extra charges.

You seem to be ignoring the bolded text that limits the scope of BoD's ability to restrict renting at a specific resort. It is not a unrestricted right the BoD can impose by fiat. The BoD would have to demonstrate how the local law prohibits it, or that renting imposes an excessive financial burden on the Club. So a very narrow scope.

And nothing in that provision limits their ability to impose extra charges. And under the by-laws, the BoD is granted the implicit right to impose fees on guest usage.

Rules. To promulgate Rules regarding, among other things, conduct of Club business, behavior of Members and guests, and use of the Resorts, including, but not limited to, the following subjects:
(iv) Number of occupants, guests and fees;

 

[samara64]

You seem to be ignoring the bolded text that limits the scope of BoD's ability to restrict renting at a specific resort. It is not a unrestricted right the BoD can impose by fiat. The BoD would have to demonstrate how the local law prohibits it, or that renting imposes an excessive financial burden on the Club. So a very narrow scope.

And nothing in that provision limits their ability to impose extra charges. And under the by-laws, the BoD is granted the implicit right to impose fees on guest usage.

Rules. To promulgate Rules regarding, among other things, conduct of Club business, behavior of Members and guests, and use of the Resorts, including, but not limited to, the following subjects:
(iv) Number of occupants, guests and fees;

by-laws are based on club declaration which are more essential.

What you refer to is to state the BOD can limit the numbers of people in the unit and various fees for any services like extra cleaning changes etc. which is understandable.

My credits in Worldmark represent my deed. There should be no restriction to allow someone to use my deeded property if I cannot use it myself.

Not sure where the $198 that Ron stated is coming from. You can add a GC after the reservation is made. Why do you need 2 fees.

 

[ecwinch]

by-laws are based on club declaration which are more essential.

What you refer to is to state the BOD can limit the numbers of people in the unit and various fees for any services like extra cleaning changes etc. which is understandable.

My credits in Worldmark represent my deed. There should be no restriction to allow someone to use my deeded property if I cannot use it myself.

Not sure where the $198 that Ron stated is coming from. You can add a GC after the reservation is made. Why do you need 2 fees.

Which would be true if we had deeds, but unfortunately we do not have a deed or a deeded interest in any real property. We own a membership in Worldmark The Club and are bound by the rules of the Club.

Our credits do not represent a deed in any fashion. They are more similar to shares in the Club, than anything representing a deed. As clearly spelled out in the Declaration.

And yes - various fees - like a fee for allowing a guest to occupy a room you reserve.

 

[samara64]

Not really. Here it is again:

A Member other than Declarant may charge a fee or rent for the use of a Unit during such Member's Vacation Credit Uses by a guest or invitee.

BOD can limit that if jurisdiction require it but not charge the owner a fee to do so.

Also as Ron stated, I am all for changing the waitlist to end (not to begin as it is now) at the 13 month mark. This way megas cannot use it any longer.

 

[easyrider]

It is important to note that the $20 booking fee took the place of housekeeping fees for VI.

I didn't know that. My rtu only had 9 years left on it when I bought it. When it expires in 2022 I plan to let it go.

Bill

 

[bizaro86]

Not really. Here it is again:

A Member other than Declarant may charge a fee or rent for the use of a Unit during such Member's Vacation Credit Uses by a guest or invitee.

BOD can limit that if jurisdiction require it but not charge the owner a fee to do so.

Also as Ron stated, I am all for changing the waitlist to end (not to begin as it is now) at the 13 month mark. This way megas cannot use it any longer.

Mega renters could still use it, but just not use it to dominate a specific resort past the 13 month window.

I would support that change, because I would like to take my kids to Yellowstone in the summer...

 

[CO skier]

For routine reservations the difference between fair market rent and the cost for a reservation is getting close to zero. This will , I think drive the mega renters to the special events and other high value reservations. Like Mardi Gras, Coachella, Comic Con. Christmas at Disney, Etc and the in season reservations at the beach and ski resorts and of course Hawaii

I notice that this morning there is quite a selection of availability in the WorldMark Kihei, HI resort, including 5+ unit showing for 2 Bedroom Twin for September 16, 2019 (13 months) and September 15th, 2019 (13 months less one day). Before the changes of the last 3 years, it was impossible to get into Maui without using throwaway days to reach beyond 13 months.

It would appear that the megarenters that were working the Hawaii market using throwaway days, are not operating there now, or their activity has been noticeably reduced.

 

[samara64]

I think it is just past summer vacation time.

 

[bizaro86]

I notice that this morning there is quite a selection of availability in the WorldMark Kihei, HI resort, including 5+ unit showing for 2 Bedroom Twin for September 16, 2019 (13 months) and September 15th, 2019 (13 months less one day). Before the changes of the last 3 years, it was impossible to get into Maui without using throwaway days to reach beyond 13 months.

It would appear that the megarenters that were working the Hawaii market using throwaway days, are not operating there now, or their activity has been noticeably reduced.

The state of Hawaii cracked down on rentals by people who didn't have hawaii tax licences. I bet that had something to do with it as well.

 

[ronparise]

by-laws are based on club declaration which are more essential.

What you refer to is to state the BOD can limit the numbers of people in the unit and various fees for any services like extra cleaning changes etc. which is understandable.

My credits in Worldmark represent my deed. There should be no restriction to allow someone to use my deeded property if I cannot use it myself.

Not sure where the $198 that Ron stated is coming from. You can add a GC after the reservation is made. Why do you need 2 fees.

If I make multiple speculative reservations (meaning I don’t I have guests yet) I have to put a guests name on them. Call these placeholders ($99 each) then when I get a paying guest I’ll have to remove the placeholder name and add the real name (another $99). $99 + $99 = $198


And you don’t have a deeded Ownership with Worldmark and even if you did like any condo there are condo docs created and in file with the local land records that established the condo and set certain rules. Also the hoa can set new rules as time goes on

I know of condo associations that restrict rentals, that require white linings for curtains and some that don’t allow children

 

[samara64]

If I make multiple speculative reservations (meaning I don’t I have guests yet) I have to put a guests name on them. Call these placeholders ($99 each) then when I get a paying guest I’ll have to remove the placeholder name and add the real name (another $99). $99 + $99 = $198


And you don’t have a deeded Ownership with Worldmark and even if you did like any condo there are condo docs created and in file with the local land records that established the condo and set certain rules. Also the hoa can set new rules as time goes on

I know of condo associations that restrict rentals, that require white linings for curtains and some that don’t allow children

But that has to be voted by members of the HOA ie the owners of the condos. I would love to see this on the ballot this or next year.

So what prevents the BOD of adding a $500 reservation fee per booking. They can justify that by stating that some owners use their credits and some do not so adding the fee justifies the usage as a fee for service. People who do not use their credits will simply pay the MF only.

And if the BOD states that guest usage damages the condo, they do take a $100 deposit from guests to charge if need be.

You still have the 5% limit that adding all the fees charged to the owners cannot exceed that increase from year to year.

I called Worldmark after reading your post and spoke to 3 different people. All stated that a GC can be added anytime after booking. If I book a stay and later cannot use it, I can just send someone by using a GC.

 

[overthehill]

This is what Vacation International does.They sell point protection for about $45 a reservation. When I cancel a reservation I loose the $45 + $20 booking fee. It does make some people sit on the fence regarding making their reservations. VI also implemented a commercial use amendment that keeps their inventory off limits to renting for profit.

If WM follows and implements the same policies then there would be a lot of inventory not rented at 6 am 13 months out.

Bill

Bill, I agree with your final comment. I like the reference you made to VI and the reservation charges they have. In 1998 when I bought my first WM credits (on the secondary market), the reservation cancellation rate was 28%. A recent quote from a CSR at WM Vacation Planning was there are now 41% cancellations. Being retired, I make travel plans out as far as two years and I use not only my current allocation of credits (72,000) but always use some of my next year's credits. Unfortunately, the WM system allows owners to book 13 months out and cancel a short time before the check-in date without penalty. As my wife and I try to book time in Hawaii every year, I don't bother trying to secure units through the WM system because I want to know my travel dates as far in advance as possible so I can lock in the cost of my flights to Hawaii. For years I have been more successful getting reservations through RCI or Wyndham Club Pass than WM. This year I ended up renting a week in Hawaii (through Homeaway) from a timeshare owner. From my perspective, I would welcome reservation charges similar to those you mention as it would hopefully reduce the number of reservations made on a whim or those reservations being made with the intent of renting the time. Further, I would like to see the cancellation date be changed to 90 days out for exotic locations so owners wanting to go to those locations would have a better chance booking a unit and securing flights. As most people know, flights these days are booked out further in advance and prices are typically higher the closer to a travel date.

 

[silentg]

Ok, in this situation, a family reunion, why can’t you put more than one family member on the guest certificate? You could put Mike and one of the other guests who will be staying in the timeshare?
Since it’s a reservation for 8-12 people, shouldn’t they allow more than one name?
Silentg

 

[jmkhager]

I, as well as thousands of other timeshare individuals, really don't like to see increased fees of any type; however, this idea of Guest Certificates, IMHO, is acceptable to us. As a WorldMark owner since 1994, I appreciate the fact that this avenue is an attempt to reduce the blatant misuse of reservation power that some individuals are presently implementing. It has been increasingly difficult to complete a reservation due to members (individuals) turning their memberships into a revenue producing product rather then enjoying the membership for what is was intended to be, improving and enjoying family quality vacation time. WorldMark was intended to do just that; not becoming a revenue producing product for some and ruining and reducing the opportunity for others to truly vacation.

I see this implementation as an effort to reduce money producers and increase our opportunity to vacation as the program was originally intended. If you read the information carefully, you will understand that each owner receives one complimentary Guest Certificate each year and for each 10,000 credits of membership you receive an additional Guest Certificate. IMHO, this is still providing opportunities for the money producer. I, for one, would like the continuation of program changes that will increase our opportunity to vacation. and decrease their money producing options.

 

[ecwinch]

To those suggesting that a booking or cancellation fee might need to be considered, I have a feeling that is not too far off either.

 

[roadsister]

I have been an owner since 1990. I have a no housekeeping acct. and have been Grandfathered in to all new resorts, etc. I am wondering how this will affect my membership if at all.

 

[jpegan]

Would love to hear from those who love to think that Wyndham doesn't own Worldmark and that the owners own Worldmark and reconcile this one.

An owner should be able to check in for as many rooms as he or she wants regardless of whether they overlap and regardless of whether the owner intends to leave one or more empty or allow guests traveling with the owner to stay. There really shouldn't be any difference between an owner booking 3 studios for self and guest on a trip and booking a 2-3 bedroom that fits the same number of guests travelling with and staying with the owner. Yes I know Wyndham has been doing this for years, but Wyndham owns Wyndham and I can't imagine Worldmark owners wanting to pay extra fees for what they have always been able to do without paying those fees. I know I really resent guest cert fees in general but to be charged when guest are staying in a different unit (often due to availability not intentionally) during the same stay.

When I bought into World Mark 19 years ago it was understood, that any member of the family was eligible to use my membership and said membership could be maintained by my family members and their family's, importunity, as long as the annual dues are paid.

Why should any member of my family or spouse, need a gift certificate? This looks like Wyndham is trying to make rental income from World Mark shares.

 

[rhonda]

I have been an owner since 1990. I have a no housekeeping acct. and have been Grandfathered in to all new resorts, etc. I am wondering how this will affect my membership if at all.

ROADSISTER! Welcome back! Good to see you!

 

[FLYNZ4]

ROADSISTER! Welcome back! Good to see you!

Rhonda... you stole my welcome.

Welcome back Roadsister.

/Jim

 

[roadsister]

ROADSISTER! Welcome back! Good to see you!

Hi Rhonda!!! I didn’t think anyone would remember me.
Still trying to find my way around this website.