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Analysis of Maintenance fees

jimf41

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I've just concluded a month long extensive analysis of Marriott maintenance fees. While the full report is proprietary and will not be published I've concluded that these things are getting expensive. I asked the Economics Department at Stony Brook University as to the reason why and they blamed it on skim.

OK, that concludes my first annual rant about MFs. I did compare the cost of owning TS's to just renting a hotel room. I'm paying about $236 a night for the nights that I get to put my head on a TS pillow. I go to the same places every year so I compared the cost vs renting at the Singer Island Resort in Riviera Beach and the Reef hotel in St Thomas.

At Singer Island the 2b condo is pretty close in size and amenities to a 2br at Ocean Pointe. It's $484 a night in July. Ocean Pointe itself isn't any better at $492. At the Reef in St Thomas they really don't offer anything like a TS villa. It's $720 a night for the "Royal Suite". It sleeps 3 to give you an indication of size. At MFC it's $838 a night in February but there aren't two nights together in the whole month.

I guess I'm saving money but it sure seems an expensive way to save. I can't put price on the vacations and memories with family and friends though. Not to mention the nice folks I've met at the resorts and look forward to seeing every year.
 

melissy123

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I love this post. Thorough analysis to come to the conclusion, but honey, we're still saving so much money in the long run. :). And yes, I do the same.
 

ronparise

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i don't understand the Marriott system and I don't know what "skim" is (and don't need to know , so no need to explain". But a month long study to determine "these things are getting expensive" seems excessive. Like telling me how to build a clock when all I want to know is, what time it is

Is that $236 a night just maintenance fees or did you include the amortized purchase price and did you figure developer prices or the secondary market?

Based on what you provided here my conclusion is they these things are getting expensive, but they are still cheap. Any time I see a timeshare vacation at half the price of a comparable rental, I'm happy with my decision (no rants from me)
 
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dougp26364

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i don't understand the Marriott system and I don't know what "skim" (and don't need to know , so no need to explain". But a month long study to determine "these things are getting expensive" seems excessive. Like telling me how to build a clock when all I want to know is, what time it is

Is that $236 a night just maintenance fees or did you include the amortized purchase price and did you figure developer prices or the secondary market?

Based on what you provided here my conclusion is they these things are getting expensive, but they are still cheap. Any time I see a timeshare vacation at half the price of a comparable rental, I'm happy with my decision (no rants from me)

Skim: the difference between the points received by giving a deeded week to MVC for DC points and the DC points MVC requires to reserve the exact same week. IOW, you get less than they take. Consider it the built in cost of flexibility for MVC's DC program for deeded week owners.
 

jimf41

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Ron

You need to lighten up and develop a sense of humor. The $236 was just my total MF package divided by the number of nights I own.

If I figured in all the nuances of locking off, getting AC's and amortizing the original cost, the price of TUG and Redneck membership, the lost of investment dividends from the original purchase price, buy in to the MVC exchange and of course the root cause of everything-Global Warming then it probably would have taken me months to analyze. However I think the end result would be the same. These things are getting expensive.
 

Superchief

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Jim,
I'm with you on this. MF fees seem to be increasing a lot more this year than in previous years, and some new areas of increases (probably DC impacted) seem to be driving them. I plan to look at my 5 resorts to make in-depth comparisons and will post my observations. I have noticed that the BOD's seem to be less concerned about managing the increases, and many are adding unnecessary luxuries and activities. Some (Royal Palms and Newport Coast) are allocating them to different areas making it more difficult to make year to year comparisons.

However, as you observed, the annual cost per night (MF only) is still less than hotels or vacation homes (if not used all year), so that makes the increases more tolerable. I suggest that all of us become more diligent in identifying unnecessary expenses and contacting our BOD's so they know we are watching.
 

SMHarman

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However, as you observed, the annual cost per night (MF only) is still less than hotels or vacation homes (if not used all year), so that makes the increases more tolerable. I suggest that all of us become more diligent in identifying unnecessary expenses and contacting our BOD's so they know we are watching.
But those other costs are where this becomes fuzzy math.
To say $236 vs $450 when you may be talking a $20k timeshare which could be throwing off $1k in income and growth (5%). $142 a night makes the math look much morr nuanced.

Nobody is getting into DC at Wyndham rates.
 

ronparise

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Ron

You need to lighten up and develop a sense of humor. The $236 was just my total MF package divided by the number of nights I own.

If I figured in all the nuances of locking off, getting AC's and amortizing the original cost, the price of TUG and Redneck membership, the lost of investment dividends from the original purchase price, buy in to the MVC exchange and of course the root cause of everything-Global Warming then it probably would have taken me months to analyze. However I think the end result would be the same. These things are getting expensive.

Sorry.. keeping it light is exactly what I want to do.. (I wouldnt do a month long analysis to prove the obvious, for example)

I wasnt suggesting that you carry things as far as to include the cost of global warming, but I would, (and I do), amortize my initial purchase price over my expected remaining vacationing life, and I include that number in my annual cost.

Including the purchase price leads me to turn away from Marriott purchases. as you say... this stuff is expensive
 
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David M

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suzannesimon

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I think a better comparison is comparing the cost of your timeshare to the cost of renting that same timeshare from a private owner - not renting it from Marriott or booking a hotel room, which has considerably fewer amenities.
 

dougp26364

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Gee Jim, you'd think by now you'd know better than to start this conversation. ;)

You're right. They ARE getting expensive.
 

SueDonJ

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I think a better comparison is comparing the cost of your timeshare to the cost of renting that same timeshare from a private owner - not renting it from Marriott or booking a hotel room, which has considerably fewer amenities.

I disagree with that being the comparison because they're not equal transactions. The majority of TUGgers are no doubt very comfortable with private rentals from owners but that can't be extrapolated to the majority of all rentals. The fact is when you're talking about the non-independent companies like Marriott/Starwood/etc, their more generous cancelation policies and payment options are and always will be very attractive to the overwhelming majority of folks who rent timeshare units (me included.)

Whatever Jim's analysis consists of there's no doubt that Marriott timeshares are expensive to own regardless of the dollar amount invested in the purchase - MF's consistently increase an average of 3-5 percent per year. It's the security of being able to reserve a particular unit type/view during a particular period along with the control that I hold over my reservations that keep me happy as an owner, not any delusion that buying was a sound financial investment.
 

dioxide45

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Sorry.. keeping it light is exactly what I want to do.. (I wouldnt do a month long analysis to prove the obvious, for example)

I read that first paragraph to be a joke... Am I wrong.

I do agree that MFs are getting high and there are more economical ways to get the same trades we usually do. Most of the trades we are getting could probably be had with non Marriott weeks that have much lower MFs.

I still find that we get a good value from our timeshare weeks. Looking at all costs including the purchase price, our cost per night is about $175. Excluding the purchase costs, it is $115. Not bad and much cheaper in most cases than booking a hotel room. We are almost always staying in a 2BR or larger using 1BR or studio weeks to trade.
 

ronparise

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I read that first paragraph to be a joke... Am I wrong.

Im guessing Im wrong. I take this stuff (money and timeshares) way too seriously and I made the bad assumption that others do too.

I do think that the knee jerk reaction to our annual maintenance fee bills (this stuff is expensive) is often wrong and does deserve a little analysis.
 

Fairwinds

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Ron

You need to lighten up and develop a sense of humor. The $236 was just my total MF package divided by the number of nights I own.

If I figured in all the nuances of locking off, getting AC's and amortizing the original cost, the price of TUG and Redneck membership, the lost of investment dividends from the original purchase price, buy in to the MVC exchange and of course the root cause of everything-Global Warming then it probably would have taken me months to analyze. However I think the end result would be the same. These things are getting expensive.

Please post the al gore rhythm used to factor in global warming. I'm also curious how much you pay for the redneck membership. I picked mine up for a 6 pack.
 

BigKahuna

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I bought my timeshare weeks because where I wanted to stay (Maui Ocean Club) happened to be a timeshare property. I bought on the resale market and love traveling to Kaanapali Beach a couple times a year. Yeah, the MF go up every year, but so do hotel rooms. In My own humble opinion one of the main reasons for increases is that Maui County knows where the deep pockets are and exploits us at every opportunity.
Timesharing is not a good investment, but who cares? It is a way to build a lifetime of happy memories.
I can book 13 months out and always get the room and view I want.
It's well worth it to me, since there is no place on earth like it.
Just my .02

BigKahuna
 

dannybaker

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Fees are increasing way to much

Well I am not happy with my increase in fees. Does it really matter what I feel? If I want to remain a Marriott owner I have no choice but to smile and pay, so I smile and pay. We have 2 Marriott Grande Vista units and could not believe the increase this year. I can rent weeks for less than my maintenance fees. We own four other time shares and have had little to no increase in maintenance fees.
:mad:
 

dougp26364

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OK, I'm confused. Has global warming caused the expensive MF's or have expensive MF's caused global warming?
 

Superchief

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Since I have owned my portfolio of MVC weeks and points for several years and they are paid off, I only consider the cost of the vacations I get by using them today and the future. Is it worth it to me to continue to pay MF, or should I sell them (for relatively low values). My initial investment is now a sunk cost, so I can't change it now.

At this time, we really enjoy our vacations and look forward to spending more time at these resorts when we retire. Since we can travel during off seasons, we can get a pretty good value for our weeks/points, and now can bank the points for two additional years. My only concern is that now MF's are increasing more each year than previously, and I think the BOD's are less diligent in controlling costs as the trust owns more of each resort.

As a point of comparison, the cost to stay at hotels and resorts is also increasing rapidly. In addition to the room cost, there are parking, resort fees, and excessive taxes. I seldom stay at a hotel for vacation unless I can use MR or HH points. Even then the parking and resort fees are added. I really don't see how a family of four today can afford a vacation at a Disney destination hotel or resort. When our daughters were young, we enjoyed a week at Royal Palms for about $400 per year and would buy the 7 day multi-park passes to use over 2-3 years.
 

BocaBoy

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Three points. First, I also assume that the OPs comment about the skim is a joke. Second, whenever we discuss maintenance fees many people do not distinguish between the actual MF dollars and the percentage increases in fees, which are out of control. Third, many people don't seem to distinguish between renting and maintenance fees. Maintenance fees are a cost of maintaining and operating the property, while rental costs are heavily dependent on supply and demand. Supply and demand for rooms at a timeshare resort should be almost irrelevant to maintenance fees (assuming of course that the resort is reasonably occupied). I agree that it is useful to compare the MF cost to renting, but we need to remember that it is an apples to oranges comparison.
 
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dougp26364

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Three points. First, I also assume that the OPs comment about the skim is a joke. Second, whenever we discuss maintenance fees many people do not distinguish between the actual MF dollars and the percentage increases in fees, which are out of control. Third, many people don't seem to distinguish between renting and maintenance fees. Maintenance fees are a cost of maintaining and operating the property, while rental costs are heavily dependent on supply and demand. Supply and demand for rooms at a timeshare resort should be almost irrelevant to maintenance fees (assuming of course that the resort is reasonably occupied). I agree that it is useful to compare the MF cost to renting, but we need to remember that it is an apples to oranges comparison.

In relation to out-of-control increases in MF's, my amazement with MVC is the amount taken for the cash reserve in comparison to the other resort systems we own. The closest in quality would be HGVC, which requires nowhere near what MVC takes for the resorts future needs. Yet HGVC maintains similar quality. What the hell are they spending all that money on? I'm glad it doesn't take that sort of yearly savings to maintain my own home.

I voiced a concern with a HOA board member about the yearly addition of amenities at one of our resorts. In short, I was essentially told I didn't know what I was talking about. The additions added "little" overall cost per week. However, IMHO those "little" over all costs per week add up, much like buying a $3/cup of coffee ever day over the course of a year.

If MVC continues it's increases at an average increase of 5%/year, which seems typical IMO, inside of the next decade we may begin to see the serious breaking point with defaults. I believe in another 15 years the typical MF will be approaching $3,000/year for a 2 bedroom unit. Assuming pay doesn't not increase proportionately or household expenses reduce proportionately, there's likely to be a number of owners questioning not the value but their ability to maintain that expense in their household budgets.

The sad part is that vacations are beginning to climb out of the expense range of the average family. It's a sad state of affairs. A little over a decade ago we had no problem planning and taking vacations. Now.......it's becoming a luxury we are thinking we may have to do without at some point in the near future. We've already begun to get rid of some of our timeshares and we look more at drive-to vacations rather than fly-to vacations. For that matter we put a higher priority on drive-to destinations that have resorts we can get into that allow us to bring our dogs, so as to cut out the expense of boarding them.
 

ronparise

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In relation to out-of-control increases in MF's, my amazement with MVC is the amount taken for the cash reserve in comparison to the other resort systems we own. The closest in quality would be HGVC, which requires nowhere near what MVC takes for the resorts future needs. Yet HGVC maintains similar quality. What the hell are they spending all that money on? I'm glad it doesn't take that sort of yearly savings to maintain my own home.

I voiced a concern with a HOA board member about the yearly addition of amenities at one of our resorts. In short, I was essentially told I didn't know what I was talking about. The additions added "little" overall cost per week. However, IMHO those "little" over all costs per week add up, much like buying a $3/cup of coffee ever day over the course of a year.

If MVC continues it's increases at an average increase of 5%/year, which seems typical IMO, inside of the next decade we may begin to see the serious breaking point with defaults. I believe in another 15 years the typical MF will be approaching $3,000/year for a 2 bedroom unit. Assuming pay doesn't not increase proportionately or household expenses reduce proportionately, there's likely to be a number of owners questioning not the value but their ability to maintain that expense in their household budgets.

The sad part is that vacations are beginning to climb out of the expense range of the average family. It's a sad state of affairs. A little over a decade ago we had no problem planning and taking vacations. Now.......it's becoming a luxury we are thinking we may have to do without at some point in the near future. We've already begun to get rid of some of our timeshares and we look more at drive-to vacations rather than fly-to vacations. For that matter we put a higher priority on drive-to destinations that have resorts we can get into that allow us to bring our dogs, so as to cut out the expense of boarding them.

When I was a kid, vacations were a 7 hr drive to grandmas house and a week sleeping on the floor

When my daughter was a kid vacations were a 3 hr drive to Ocean City Md where three of us young families rented a house for a week, (and the kids slept on the floor

Now my grandkids enjoy vacations with their average family at rented timeshares (rented from me) where they sleep on the floor>>>

I guess I dont see any difference over three generations

As for myself, Im enjoying vacations for the first time in my life... Im buying more of this stuff. But Im with you, almost all drive to stuff, even last years vacation we drove from Ft Myers Fl to San Diego Ca, and back, timeshare hopping all the way
 

rapmarks

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this topic had me thinking about the maintenance fees where I live, in a community that has private roads, 18 hole golf course, 5 pools, 5 tennis courts, bocce courts, pickle ball courts, a restaurant, lots of club rooms, and professional management governed by our HOA. The fees cover all this, and all landscaping, irrigation, cable and pest control, and insurance on the large clubhouse. There is a large reserve fund.
Our fees have gone up 10 percent total in 14 years. this is an area of southwest Florida with high costs for insurance, and a lot of landscaping maintenance for the community and golf course.
Of course, it does not cover inside maintenance of homes, inside utility bills, and cleaning of homes, but it covers a lot and has only gone up a small amount per year (less than one percent a year)
 
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