Analysis of Maintenance fees

[JIMinNC]

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.)

I agree with Sue's comments on this. There is no way that renting from a private owner is a comparable transaction to renting direct from Marriott or booking a timeshare reservation - the private owner transactions come with greater risk, less flexible cancellation options, etc. Private owner rentals SHOULD be much cheaper than direct bookings because they carry higher risk and come with less flexibility. It's like comparing apples and oranges.

Private owner transactions work for some, but not for all...

 

[JIMinNC]

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.

I saw something not long ago that compared the inflation rate in the travel business to the overall inflation rate in the economy, and the travel inflation rate was much, much higher than the overall rate. The explanation given was that the supply-demand of the travel business is tied more closely to the business world and the folks who travel the most on leisure - which are the most affluent people. By contrast, the supply-demand of the overall economy is tied more to the prospects of the overall middle class - who utilize the travel industry less than businesses and the affluent. Business travel is less price sensitive, and the affluent portion of the population has seen their incomes rise significantly over the last 30 - 35 years, so they are less price sensitive as well. As a result, there is less demand/price pressure on travel costs than there is in the overall economy where demand and overall incomes have been relatively flat in real terms over the last three-plus decades. As a result, travel demand is less "elastic" to price increases, freeing prices to rise much more freely than in the general economy. Sadly, there is no structural change that seems likely to reverse this trend in the near future. Vacations are becoming a luxury, out of reach for many, many people, a fact that is only exacerbated by the increased competitiveness of the corporate workplace where people are reluctant to take vacations because of the impact it might have on their job. Americans lead the world in unused vacation time.

 

[Luvtoride]

You want sticker shock? Pay your MFs with a 73 cent Canadian dollar!

Bogey girl, ouch, you're right. I'm just back from a biz trip to Toronto and its striking the difference in the value of the dollar. Most Canadians I spoke too aren't even vacationing to the US these days due to the exchange rate.

As to the other points made in this interesting thread, I agree it's getting expensive. I just added up all my MFs including my DC points and almost fell off my chair. I guess if they didn't all come in Dec/ Jan it wouldn't hurt quite as much. At least we know we are going to have a year of great vacations including the Marriott Owners cruise next November, using points (and cash). I guess I don't analyze as much on a per night cost basis as the OP but rather the great times we will have with family and friends.
Happy Holidays all!
Brian

 

[Luckybee]

You want sticker shock? Pay your MFs with a 73 cent Canadian dollar!

If only there was a like button for this !!!

And hang in there ...if this continues we'll be back to where we were in the late 90's paying almost an extra .50c on ea dollar

 

[Quilter]

I agree with Sue's comments on this. There is no way that renting from a private owner is a comparable transaction to renting direct from Marriott or booking a timeshare reservation - the private owner transactions come with greater risk, less flexible cancellation options, etc. Private owner rentals SHOULD be much cheaper than direct bookings because they carry higher risk and come with less flexibility. It's like comparing apples and oranges.

Private owner transactions work for some, but not for all...

I think that renting from private owner IS closer to owning. There are many good owner-renters who work with their customers so risk isn't much different than the same risks the owner takes. No daily maid service unless you pay extra, hence higher Marriott rental. An owner takes risk booking their week because their own situation can change under the allowable rebooking or depositing Windows. The higher price renting directly from Marriott pays for change ability and cleaning.

 

[JIMinNC]

I think that renting from private owner IS closer to owning. There are many good owner-renters who work with their customers so risk isn't much different than the same risks the owner takes. No daily maid service unless you pay extra, hence higher Marriott rental. An owner takes risk booking their week because their own situation can change under the allowable rebooking or depositing Windows. The higher price renting directly from Marriott pays for change ability and cleaning.

I think renting from a private owner is inherently a riskier transaction than dealing with a well-known, reputable business like Marriott. How do you know that an individual you only know from an email address or maybe a phone call is reputable? Yes, once you find a private owner you can trust on a regular basis, then the risk goes down. But until that point, there is certainly more risk in a private person-to-person transaction - just as there is more risk shopping on eBay or Craigslist than on Amazon.

 

[suzannesimon]

I've been renting from other owners and renting my own weeks successfully since 2008. If you are using TUG or Redweek, you are usually dealing with other timeshare owners. It's almost like an exchange but you're dealing with cash. I don't use EBay or Craig's List. However, I'm a real estate broker so the idea of renting real estate is not scary to me.

 

[dioxide45]

I think renting from a private owner is inherently a riskier transaction than dealing with a well-known, reputable business like Marriott. How do you know that an individual you only know from an email address or maybe a phone call is reputable? Yes, once you find a private owner you can trust on a regular basis, then the risk goes down. But until that point, there is certainly more risk in a private person-to-person transaction - just as there is more risk shopping on eBay or Craigslist than on Amazon.

I think that Quilter was comparing the experience and risk. Buying a timeshare can be risky, you are putting yourself on the hook for the annual MF in hopes that you can get the reservation you want. You are also tied to the timeshare if something unfortunate happens. Those MFs are still due even if you lose your job. Sure there is risk in renting from an owner, but that additional risk is off set by the fact that you don't have that annual obligation.

Renting from an owner is also more similar to buying in the experience you have. You are treated more like an owner at a resort when you rent from one. You get their villa priority. You also DON't get daily maid service. When you rent on Marriott.com, you are usually pretty low on the villa placement pecking order and there is daily maid service.

I would be much more inclined to think that an apples to apples comparison of MFs is made with renting from an owner than renting from Marriott.com.

 

[Mister Sir]

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

At this point, what difference does it make?

I can tell you that higher maintenance fees are the biggest threat to our national security.

 

[JIMinNC]

I would be much more inclined to think that an apples to apples comparison of MFs is made with renting from an owner than renting from Marriott.com.

It's only a relevant apples to apples to comparison for those folks who are comfortable with large $$ person-to-person transactions - but I agree - for those folks who are comfortable with the risk of P2P transactions - it is a more valid comparison than Marriott.com. But for those of us who don't like to play in the P2P world, the only valid compare is to Marriott.com or other similar channels where you are renting from a large corporation instead of an individual owner.

 

[JIMinNC]

I've been renting from other owners and renting my own weeks successfully since 2008. If you are using TUG or Redweek, you are usually dealing with other timeshare owners. It's almost like an exchange but you're dealing with cash. I don't use EBay or Craig's List. However, I'm a real estate broker so the idea of renting real estate is not scary to me.

I would agree that renting from an owner is very much like a TUG direct exchange, but it is not like an II or RCI exchange where you have a corporate entity as an intermediary to stand behind and facilitate the transaction.

 

[suzannesimon]

I would agree that renting from an owner is very much like a TUG direct exchange, but it is not like an II or RCI exchange where you have a corporate entity as an intermediary to stand behind and facilitate the transaction.

True, you don't have the intermediary, but you don't have a parking lot view either. Every time I've rented directly from an owner, I have gotten beautifully-located units. You are treated like the owner.

 

[Quilter]

It's amazing what direction a thread will take and how certain words attract attention.

Jim, did you think your analysis would become a debate on the risks related to renting or owning?

This thread is 7 days old. Compare how many views it's gotten to the other recent threads.

 

[Colt Seavers]

Whenever I ask about the increase there is always a different excuse given for why they are going up but never any area where they are going down. When the economy was doing well it was because labor and material costs were going up, then when the economy tanked it was because of more owners defaulting on their dues, now the costs related to Obamacare for the employees is the favorite line. When I saw the most recent renovations at our home resort I decided to stop complaining.

 

[jimf41]

It's amazing what direction a thread will take and how certain words attract attention.

Jim, did you think your analysis would become a debate on the risks related to renting or owning?

This thread is 7 days old. Compare how many views it's gotten to the other recent threads.

Actually I didn't have any idea it would encourage serious debate. I thought everyone would recognize my sense of humor. For the record my extensive analysis consisted of opening the mail one day and realizing my MFs are now over $10,000. I did not consult the Economics Dept. at Stony Brook University.

For those who obsess about SKIM my sincerest apologies for bringing it up in a humorous fashion. If you read the newspapers Global Warming does seem to be the cause of everything that's going wrong with the world. I promise I'll never bring it up again. Maybe.

The real question we should be talking about is where did FAIRWINDS get his redneck membership for only a sixpack?

 

[ronparise]

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.

Just know that many of us that rent determine our offer price by looking at comparable rentals ie I check the competition

so my point is that when you compare to the cost of renting that timeshare from a private owner, you are in fact comparing to the cost of renting from Marriott or booking a hotel room

For example Ive priced my studio rentals in New Orleans to compete with the local Marriott hotel. They charge $300 a night, so private owner Ron charges $300 a night

And for the folks that are concerned with the risk of person to person rentals, consider this: when the Marriott is sold out Im the only game in town...either accept the risk and pay my prices, or stay home. The point is that my prices aent lower because I understand the risk you are taking, My prices are slightly lower to undercut Marriott. as soon as they are sold out, I can raise my price

 

[jimf41]

The point is that my prices aent lower because I understand the risk you are taking, My prices are slightly lower to undercut Marriott. as soon as they are sold out, I can raise my price

Martin Shkreli would be so proud of you.

 

[ronparise]

Martin Shkreli would be so proud of you.

he took supply and demand to an extreme, and hes been arrested, (not for that but for past sins)

The difference between him and me (other than the scale of what we are doing) is that no one's life depends on having a room for Mardi Gras and for most things there are upper limits beyond which no one will pay, Ind most importantly, there are still other choices for my customers. Otherwise I could charge $10000 a night

But the economics of a little timeshare rental business isnt the point here. . The point is that comparing timeshares to Marriotts rental prices and to other comparable rentals is a valid way to establish value. And comparing to what other owners are charging is equally valid, because our prices are the same,

Bottom line, if you can rent cheaper than buying a timeshare ... rent. but if the cost of the timeshare (amortized purchase price and mf) . is less than a comparable rental... than buy the timeshare

and to the ops humorous way of saying this stuff is getting expensive; Based on my experience and based based on a comparison to the rental market, Id argue the opposite. This stuff is still pretty cheap... ie dont rent from me or anyone else, buy your own timeshare.

 

[Quilter]

Actually I didn't have any idea it would encourage serious debate. I thought everyone would recognize my sense of humor. For the record my extensive analysis consisted of opening the mail one day and realizing my MFs are now over $10,000. I did not consult the Economics Dept. at Stony Brook University.

For those who obsess about SKIM my sincerest apologies for bringing it up in a humorous fashion. If you read the newspapers Global Warming does seem to be the cause of everything that's going wrong with the world. I promise I'll never bring it up again. Maybe.

The real question we should be talking about is where did FAIRWINDS get his redneck membership for only a sixpack?

Seriously, how can anyone miss your humor?

A lot of "points" being talked about in this thread:

"isnt the point here. . The point is that"

"without at some point in the near future"

"But until that point, "

"At this point,"

"so my point is"

"The point is that my"

"As a point of comparison,"

"Three points. "

"serious breaking point with defaults"

The Goats were the best, but maybe I'm missing the point of the thread.

 

[dmharris]

I was a little stunned when I saw our recent MF bill for the Grande Vista (gold) week. But then I started doing rough calculations. We paid roughly $20,000 from the developer in 2007 and since then we have taken over 20 weeks vacation. (I have used most ACs that come our way and we lock off our week). Add to the base price roughly $10,000 for MF, dues, and exchange fees, we're up to roughly $30,000 for those 20 weeks, averaging $1,500 per week. Now IF I rented from Marriott (which I would be most likely to do being an owner and a Lifetime Platinum MR member) at a price of $300/night, for seven nights, totaling $2,100/week times 20 weeks, this gives me a grand total of $42,000 to rent from Marriott,. I figure I'm doing great:

1. Renting gives us the lowest rung of the room-assignment-ladder, owning gives me more respect when asking for room placement.
2. I've saved over $10,000 for those 20 weeks vacation and stayed in villas not single hotel rooms.
3. Most important for us who are self-employed, get no paid vacation time, we would have not taken even half of those vacations if we had to initiate the move to book them ourselves. It's kind of like Weight Watchers psychology for me. . . if I pay for the plan, I'll show up to the meetings and stick to the program. . . so owning a time share has graced us with time off we deserve and need without feeling guilty about taking the time off and spending the money. Best thing we ever did besides marry each other! ;-)

 

[T-Dot-Traveller]

For sure

I

3. Most important for us who are self-employed, get no paid vacation time, we would have not taken even half of those vacations if we had to initiate the move to book them ourselves. It's kind of like Weight Watchers psychology for me. . . if I pay for the plan, I'll show up to the meetings and stick to the program. . . so owning a time share has graced us with time off we deserve and need without feeling guilty about taking the time off and spending the money. Best thing we ever did besides marry each other! ;-)

I second that !!!
both - the self employed / don't feel guilty because you already spent the money part
and the getting married part

Vacationing in a suite sure beats hotel rooms - and both of us have a better vacation .

 

[Eli Mairs]

And hang in there ...if this continues we'll be back to where we were in the late 90's paying almost an extra .50c on ea dollar

We're getting close.

Today I paid 42 cents on the dollar for my maintenance fees

 

[davidn247]

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

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

Your analysis cannot have a unique answer. It mainly depends on 2 variables:

1) On the "hard numbers", it will depend on the purchase price. If you bought resale weeks (and managed to join DC)... bingo! Relax and simply enjoy...

2) On the "soft side", it will depend on how 'smart' the owner is using his/her exchange options (including renting out good weeks or using DC well).

My guess is 80%+ of owners bought through Marriott and do not know how to maximize their options. The other 20% were smarter and have been well-educated on TUG

 

[pwrshift]

The MF on my 6 Marriott weeks came to $8100 US$ for 2016...when put on Marriott Visa in Canadian dollars it came to over $11,000!

Those weeks cost me about $450 MF each when I bought them back when the Canadian dollar was more than US$...now they average out at about $1,350 US$ each. Ouch! The increases Marriott put through every year from purchase date was far more than salary increases each year. Unreal.

Brian

 

[dioxide45]

The MF on my 6 Marriott weeks came to $8100 US$ for 2016...when put on Marriott Visa in Canadian dollars it came to over $11,000!

Those weeks cost me about $450 MF each when I bought them back when the Canadian dollar was more than US$...now they average out at about $1,350 US$ each. Ouch! The increases Marriott put through every year from purchase date was far more than salary increases each year. Unreal.

Brian

When did you buy your weeks? The last time, and only time in recent history, where the Canadian dollar was at par or more than the US dollar was in 2007/08 and again in 2011/12. It seems that it has been a steady decline since then. There was a also time in the early 90s where it was at about $0.90 to the use dollar.