HGVC's Deed Back Process

[Tamaradarann]

Ultimately having a Deedback Program benefits all that are involved with the timeshare:

- The owner that no longer wants or needs their timeshare can easily rid themselves of that financial burden rather than just stop paying their maintenance and having to deal with any consequences of that

- If the owner just stops paying their maintenance the HOA has to raise the maintenance of all owners to compensate for the loss of revenue. Members of the Board of the HOA are some of those owners, and if the maintenance gets too high it makes the resort less desirable to own.

- HGVC is extremely concerned about the image of the entire HGVC timshare system. If the maintenance of some of their resorts get too high do to the number of maintenace delinquent owners that is not good for the entire system.

 

[Eric B]

I agree with you that unpaid maintenance is a loss in revenue for the HOA not HGVC. However, the health of the timeshare program is a concern for HGVC. As you said unpaid maintenance is addressed in the "bad debt" category of the budget and the shortfall in revenue must be made up by raising the maintenancee for all owners of the resort. Raising the maintenance for all owners of the resort is not good for the financial health of the timeshare resort and could make selling weeks at that resort difficult or impossible.

I completely agree with that sentiment. It isn’t, however, loss management or mitigation. Instead it seems more like properly managing good will.

 

[Orlando789]

I have decided to try and get rid of our time share and filled in the resale form a few weeks ago - I’ve received an automated email saying they will be in touch.
I have gone in to pay my maintenance fees today and the dashboard says no fees due, the contract page show $260 but a red highlight saying I’m unable to pay this account online.

Can I safely assume cogs are turning and my fees aren’t due?

I have emailed to confirm but I don’t expect a response back before midnight US time.

Thank you

 

[Tamaradarann]

I completely agree with that sentiment. It isn’t, however, loss management or mitigation. Instead it seems more like properly managing good will.

I agree with the way you put in in "Human Terms". However, in business managing good will is to help the bottom line. Therefore, in business it is called "loss management" since it is not necessarily to make a profit it is to avoid a loss. With that said how can HGVC not look at selling a timeshare for $40,000 one day, taking it back a few years later for $0, and then selling it again for $40,000 without having to build or buy anything but a good profit making move?

 

[brp]

I have decided to try and get rid of our time share and filled in the resale form a few weeks ago - I’ve received an automated email saying they will be in touch.
I have gone in to pay my maintenance fees today and the dashboard says no fees due, the contract page show $260 but a red highlight saying I’m unable to pay this account online.

Can I safely assume cogs are turning and my fees aren’t due?

I have emailed to confirm but I don’t expect a response back before midnight US time.

Thank you

Note that, while HGVC indicate that dues are "due by Jan 1," all the properties have a grace period with no late fees, often 45 days, but there are differences (so check your docs), So, even if you don't hear by the end of today, they aren't really due in any case.

Cheers.

 

[Eric B]

I agree with the way you put in in "Human Terms". However, in business managing good will is to help the bottom line. Therefore, in business it is called "loss management" since it is not necessarily to make a profit it is to avoid a loss. With that said how can HGVC not look at selling a timeshare for $40,000 one day, taking it back a few years later for $0, and then selling it again for $40,000 without having to build or buy anything but a good profit making move?

Huh. I always thought it was limited as discussed here:

Loss Management: Meaning, Types, Examples

Loss management is a set of management practices designed to detect, identify, and prevent incidents that damage a company's revenue.

www.investopedia.com

 

[Tamaradarann]

Huh. I always thought it was limited as discussed here:

Loss Management: Meaning, Types, Examples

Loss management is a set of management practices designed to detect, identify, and prevent incidents that damage a company's revenue.

www.investopedia.com

OK, if you want to define loss management as something that damages a company's revenue, I will go there. If HGVC has resorts where the mantenance gets so high due to delinquent owners that the units can't be resold and eventually possible go bankrupt that will hurt their image as a Top Timeshare Company and hurt their revenue.

 

[Eric B]

Reasonable minds can disagree. I do agree that they ought to take back the product they sell or facilitate someone being able to resell it for sound moral reasons. I don’t believe that they view doing so as a form of loss management that will support their bottom line. It might be that they just haven’t thought of it and someone should suggest it to them.

 

[Tamaradarann]

Reasonable minds can disagree. I do agree that they ought to take back the product they sell or facilitate someone being able to resell it for sound moral reasons. I don’t believe that they view doing so as a form of loss management that will support their bottom line. It might be that they just haven’t thought of it and someone should suggest it to them.

I truly believe that HGVC is defining loss management from the owner of the timeshare's perspective, but I explained above how loss management could be looked at from HGVC perspective.

However, I think that HGVC could look at Deeding Back timeshares from a profit center perspective. Businesses look at the definition of profit as income minus costs. If the timeshares that are sold at a presentation are the result of newly constructed or purchased buildings then that cost needs to be in their profit calculation. If the timeshare is acquired(or re-acquired) from a Deedback at no cost, then the cost of acquiring the calculation does not need to be added. Their cost in marketing the timeshares is really the same as anyone who has attended a presentation knows they sell any timeshare in the system at a presentation for whatever price they set that month or day. Certainly timeshare that are acquired through Deedbacks can be sold at a lower more attractive price for the customer at the presentation and still make a nice profit since the cost of acquiring the timeshare was zero this selling time.

 

[Eric B]

I truly believe that HGVC is defining loss management from the owner of the timeshare's perspective, but I explained above how loss management could be looked at from HGVC perspective.

However, I think that HGVC could look at Deeding Back timeshares from a profit center perspective. Businesses look at the definition of profit as income minus costs. If the timeshares that are sold at a presentation are the result of newly constructed or purchased buildings then that cost needs to be in their profit calculation. If the timeshare is acquired(or re-acquired) from a Deedback at no cost, then the cost of acquiring the calculation does not need to be added. Their cost in marketing the timeshares is really the same as anyone who has attended a presentation knows they sell any timeshare in the system at a presentation for whatever price they set that month or day. Certainly timeshare that are acquired through Deedbacks can be sold at a lower more attractive price for the customer at the presentation and still make a nice profit since the cost of acquiring the timeshare was zero this selling time.

While I understand the point of view re: the ability to sell a TS that was deeded back for less than a newly built one, I don’t think it likely that a developer that seeks to maximize profit would do so. Doing so would essentially be competing against themselves. There are, of course, examples where it happens that involve bundled weeks with MVC, but they aren’t generally advertised. I’m unaware of HGV doing those types of things and think it unlikely given the purchase of DRI & BG. Their business plan seems different and doesn’t seem like it would recognize accepting deedbacks as a loss management measure it should pursue if it were to even consider it one.