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[HPC Contract Talk] The Annual Conversion Option


TUG Member
Apr 14, 2016
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This is part of a series of posts:

Click here for the Introduction Post
Click here for the HRC and HPC Inventory Post
Click here for the Request List, Wait List, and Reservations Post


The main event of any HPC sales pitch is what's described in the HPC Contracts as the "Annual Conversion Option". For us, this is because we are interested in "Hyattizing" - the process of cleansing resale HRC weeks to bring them into the developer status.

1. What we found out was that there's nothing actually about the Annual Conversion Option that Hyattizes - in fact, nothing in the contracts specifies which week can be converted and which week cannot (for those who have been sold that you need to purchase X points to convert one week, Y points to convert two weeks, etc.)

2. Conversely, what the HPC contracts actually say is that even if you DID purchase the HPC points to Hyattize, they can change their mind after they have your money. That is, they can lock an HRC member from converting any or all weeks. Yikes.

Here's the contract's Definition (cf: HPC Vacation Ownership Plan)

Annual Conversion Option shall mean the option of an HRC Member, who is also an HPC Club Owner, to elect to convert such HRC Member’s timeshare interest in the Hyatt Residence Club to the HPC Club for a given Use Year, subject to the terms of the Club to Club Exchange Agreement.

and the corresponding rule in 3.12 (my emphasis in italics):

3.12 Annual Conversion Option for Members of the Hyatt Residence Club. For so long as the
Club to Club Exchange Agreement is in effect, a member of the Hyatt Residence Club (“HRC Member”), who is also an HPC Club Owner may be provided the opportunity to elect, on an annual basis, to convert the Hyatt Residence Club Points associated with such HRC Member’s timeshare interest in the Hyatt Residence Club to HPC Club Points for use in the HPC Club for a given Use Year, subject to the terms of the Club to Club Exchange Agreement. HPC Club Owners who are Non-Authorized Resale Owners are not authorized to participate in the
Annual Conversion Option. HRC Members must own a Fixed timeshare interest in the Hyatt Residence Club in order to use the Annual Conversion Option.The “conversion” is effectuated by exchanging such person’s reservation rights in the Hyatt Residence Club during the Use Year as represented by Hyatt Residence Club Points for reservation rights in the HPC Club as represented by HPC Club Points. For any period in which an HRC Member has properly exercised the Annual Conversion Option, including, without limitation, the payment of any annual conversion fees, HRC Owner shall be deemed an HPC Club Owner for purposes of applying the HPC Club Reservation Rules and Regulations, and such HRC Member’s reservation rights shall be subject to the terms and provisions of this Agreement. By way of example, and not limitation, an HRC Owner who has exercised the Annual Conversion Option shall be assigned from HVGG, pursuant to the Club to Club Exchange Agreement, a number of HPC Club Points that such HRC Owner may use to reserve the use and occupancy of Accommodations during the applicable Use Year.

An HRC Member’s ability to elect to participate in the Annual Conversion Option shall be subject to Reservation Services Operator’s determination, in its sole discretion, that the reservation rights in the Hyatt Residence Club are desired for exchange by HPC Club Owners and are compatible with the goals and intentions of the HPC Club based on available inventory, anticipated demand, and other factors deemed appropriate by Reservation Services Operator, in its sole discretion. Only those HRC Members that own timeshare interests in the Hyatt Residence Club that are deemed acceptable to Reservation Services Operator for exchange, in Reservation Services Operator’s discretion, will be eligible to participate in the Annual Conversion Option. Not all HRC Members will be eligible to participate in the Annual Conversion Option. Reservation Services Operator, reserves the right, in its sole discretion, to require that an election to participate in the Annual Conversion Option be made within such time to preserve for the benefit of the HPC Club an adequate time period within which to avail the HPC Club of the full benefit of the exchanged reservation rights. Pursuant to such reserved rights, the Reservation Services Operator has currently established that an election to participate in the Annual Conversion Option must be made by the HRC Member within that period of time beginning one (1) year prior to Week 1 of a given Use Year and ending on the last day of Week 12 of such Use Year.

There are a few things that are interesting.

  1. There is no explicit concept in the HPC Contracts of an "HRC Resale Ownership". They block an HPC Resale Ownership from participating in the Annual Conversion Option, but there's no explicit sentence on dealing with HRC Resale. In fact, (future post) the only "Hyattizing" contract is a small document that talks only about World of Hyatt points in relation to a specified HRC contract.

    At the same time, they do talk about "timeshare interests in the Hyatt Residence Club that are deemed acceptable to [Hyatt] for exchange".

    This could refer to HRC resale weeks - but nothing in the written contract actually specifies which week is "convertable". Alternately, the sales people keep telling me that certain weeks might end up less desireable (they said Pinon Pointe because they know the resale buyer's trick of finding CUP for low maintenance fees, but looking at their inventory, Wild Oak Ranch looks pretty undesirable instead).

    As with most things in the HPC, it's all up to Hyatt and there's no guarantees now or in the future, which makes $13k hard to spend on 660 points to convert.

  2. There's no description of how Tier works with the HRC owner. I called 800-GO-HYATT and they confirmed the way @peas described it in an earlier post: If you had the minimum 660 HPC pts, you start off in Classic (the lowest) Tier. If you exercise the Annual Conversion Option for one or more weeks, you up your Tier for that year to the total converted amount. The following year you have to start again at Classic Tier.
The reason the HRC Member only can convert in Wk 1 thru Wk 12 is that gives at least 90 days in the Owner Reservation Period [ORP] that excludes the HRC Members from being able to secure it.

And here is the fee schedule for HPC - it costs $133/yr/wk to convert (very bottom row of this fee schedule).


Given this fee schedule, here would be the HRC Resale Ownership options in a given year:

1. Use HRPP ($0)
2. Keep HRC week(s) in CUP, only use HRC inventory ($41 per reservation and split week fees)
3. Convert week(s) into ORP ($133 per week), and then add:
a. Book in ORP or ERP in HPC Inventory ($60 housekeeping fee if you don't have a bonus waive from your Tier level)
b. Book in CUP ($41 per reservation and split week fees)​

As long as HPC inventory is low, this is an expensive proposition since you are just paying a $133/wk tax to use HRC inventory. If in the future HPC inventory improves, then you may save money by converting and using waived housekeeping fees at Premier and Elite Tier level... but keeping in mind you're paying a higher Club Fee too there at $209 or $242/yr! (The House always wins...)

But then... what does Hyattizing really mean? That's the topic of my next post!
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