Here's another way in which the overall economic conditons are impacting the industry, and ultimately us. Someone I know who holds a key position (cannot be more specific for obvious reasons) told me that droves of people are "walking away" from blue studio units, especially in Orlando, and it's virtually impossible to go after them. The resorts have little hope of re-selling the units, given the low prices that much larger, nicer units are going for on Ebay and through resale companies.
So what are they doing to cover the shortfall? They are converting the abandoned junk units to RCI Points and then selling the Points packages at very low prices. As these points flood the market, there will be far more people competing for the desirable exchanges. Someone who pays very little to acquire the Points initially, and generally pays less annual maintenance fees for the two junk weeks based Points than people pay for a bright red one bedroom underlying week, will both be able to reserve the same high quality week. And one major problem with the RCI Points program is that there is no ability to enter an on-going search so it's a "crap shoot" who will find the gems first.And who will have to settle for junk or nothing.
As I understand it, RCI sets standards re: the quality of resorts that will be accepted into the Points program. But the standard is based upon the overall rating of the resort, not the desirability of the season, demand, or size of the different units at the resort. That's over and above the fact that many people have doubts about the objectivity, accuracy, and/or fairness of RCI's ratings in general. Suspicions abound about what role favoritism, unethical financial considerations, and even poor judment may play in the process.
By allowing tons of junk units to enter the Points system, it waters down the quality of the inventory, and makes it more difficult for owers of higher quality units to reserve weeks of similar quality. But hey, the resorts are collecting maintenance fees for the abandoned junk units that would otherwise have gone unsold and unfunded, and RCI is getting more Points members and their fees. They count on the fact that many of the new Points members will not take the time to learn how to use them, and thus they will have to deliver less. They hope the owners will blame themselves, rather than RCI, when they do not get any vacation out of it.
If the RCI inventory gets weighted down with too much junk, and the competition for the good stuff becomes too stiff, people who own Points based on good weeks may let their Points membership expire and revert back to owning the good underlying fixed or floating week which they can then use, rent, or exchange through their "Weeks" account, or perhaps through an alternate trading company.
In this scenerio, RCI may lose more and more business, and the newer owners of the junk weeks may abandon them. Then RCI will have to cook up a new scheme to make up for the lost revenue. And on and on it goes.
