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Just got back from a HGVC propoerty

Argusloud

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My wife and I just had a great week in Hawaii at a Hilton Property. Naturally, we had to endure a 1 1/2 to 2 hour (it took 3+ hours!) high pressure sales presentation. The pitch was intense and 2+ hours of it was designed to appeal to one's desire for "more family time" and "living the good life". The financial aspect of the deal was limited to the last 20 to 30 min's, after which time we were double teamed to make at decision RIGHT THERE at the table. This is after the slick willy salesman (hi Rick!) promised us that two of the three rules were that they didn't use high pressure sales tactics. BULL!

We were able to walk out with some of the numbers, after we promised to call the sales guy after lunch - I hope he's still waiting for the call.

Here are the basics:

By 4,800 points for $27,300 + a maintenance fee of $1,208 per year. That's a one bed room unit for one week a year plus 40,000 "points" (which were never explained sufficient for one to understand an actual monetary value).

For fun, my wife and I have crunched the numbers. Here are some of the interesting ones:

200 units in the project, if 100% sold (only once w/o reselling units people walk away from) will gross $284,000,000. At an average of 600 sf each unit, that's over $2,300 PER SQUARE FOOT construction costs, and this is a phase II project where all the infrastructure and a $13M pool has already been built!

For those of you not familiar with construction costs, that number is CRAZY high, even assuming Hawaiian pricing it's 5X too high. Add to that the Maintenance fees will gross over $12M annually! The actual cost to run a property like this would likely be around $2M, but double it at $4M and this is still a HUGE money maker. Now granted, they have to pay commissions, fund the "sales center" where the hit rate is likely low, and pay for all the "prizes" they give away... but $12M for a 200 unit project???

Running the numbers on what we'd have to be spending on average for a hotel room (assuming a 20 year usage, and zero resale value- which since you can buy these units on Ebay for under $900 (and in some cases $1) appears to be a good assumption. If you finance the unit and get in the middle of their 12% to 19% interest rate they offer) and the MF on;y goes up 2.5% and the hotel room price rises 3% a year (got to be fair!), we'd have to be spending $418 per night for a hotel room to BREAK EVEN. The problem is that I can go book a room AT THE TWO MOST LIKELY RESORTS we'd go to for $198 and $239 a night!

A deal? Sure for Hilton!

We'll go back, next time with an arm load of information that we'll pull at in the last 20 mins! The sales people should be ashamed of themselves for selling these overpriced disasters to people under such pressure!

Anytime that you can find multiple postings from people who are desperately trying to NOT INHERIT TS units from their dear old auntie you know somethings wrong!

Oh, the 40,000 points... well, when you calculate that 4,800 points will get you a one week trip, and convert the points (that you have to use in 3 years) into room nights, you'll be taking nearly 5 weeks of vacation a year to consume these. How many folks can do that? The vast majority of these points will have to be converted to "Hilton Points" (cost $100 to do so) at which point you're only going to be able to use them for upgrades, or getting the occasional "deal" on rooms that no one wants...
 

gnorth16

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40,000 HGVC points as a bonus? That sounds better than most offers as a bonus, but not worth the price tag. Maybe 13K?:shrug:

Good job walking away. :clap:
 

Gophesjo

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I 'spect

Great analysis, Argusloud! I think it would be great if you would buy the resort you want resale, and then stand for election to the Board of Directors. Any owner controlled Board would be blessed to have you serve, and any non-owner controlled Board needs a hornet to stir things up for the owners!
 

chriskre

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HGVC Tuscany Village
Bluegreen CMV UDI
RCI pts at VVParkway
Enchanted Isle resort.
My wife and I just had a great week in Hawaii at a Hilton Property. Naturally, we had to endure a 1 1/2 to 2 hour (it took 3+ hours!) high pressure sales presentation. .

Just curious why you think you had to endure the timeshare presentation.
You can say "no thank you" you know. It's not mandatory to do the sales pitch if you don't want to. :shrug:

It's nice that you're breaking this down for us but just wanted you to know that just because you're staying in a timeshare doesn't mean you have to take the "tour" everytime. Unless of course you're staying on a cheap vacation subsidized by the sales team which does requires a sales pitch. :confused:

Hilton is a great system and I do recommend buying resale. Doubt you'll find too many for $1 though but still cheaper than buying direct for sure. :)
 

yumdrey

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I think OP had a Hilton deal which requires taking presentation.
Anyway, 40000 bonus points is a great offer as an incentive.
BUT still doesn't worth almost 30k retail price.

Next time, bring a copy of ebay sales list. You can get out of there in 30 minutes.
 

Argusloud

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Own Hilton Stock - Heck yes!

Based on your profit analysis, should we be buying Hilton stock?

I would say so!!!...

Anytime there's a company making that kind of multiplier using other people's money it should pay off well, so long as you own the correct stock and DON'T MIND HOW THEY'RE MAKING THOSE RETURNS.

I equate it to owning stock in cigarette and alcohol companies (which is highly profitable, and most 401K's invest in these). I don't loose any sleep in the profitability of those companies, but I'm not a volume consumer of their products either.:whoopie:
 

Argusloud

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Just curious why you think you had to endure the timeshare presentation.

I probably should have been more fair in my wording... We agreed to participate (Had to "endure" wasn't fair) in a 1.5 to 2 hr presentation so as to qualify for the $200 gift certificate for future Hilton stays + the great package deal they gave us. It was a great price ($699 for 6 nights, a rental car & 2 $100 tickets for a luau.

Prior to the presentation we knew ZERO about timeshares, the type of money involved or how they work. It was enlightening, and we had a very enjoyable vacation.:)
 

chriskre

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Wyndham Las Cascadas
HGVC Tuscany Village
Bluegreen CMV UDI
RCI pts at VVParkway
Enchanted Isle resort.
I probably should have been more fair in my wording... We agreed to participate (Had to "endure" wasn't fair) in a 1.5 to 2 hr presentation so as to qualify for the $200 gift certificate for future Hilton stays + the great package deal they gave us. It was a great price ($699 for 6 nights, a rental car & 2 $100 tickets for a luau.

Prior to the presentation we knew ZERO about timeshares, the type of money involved or how they work. It was enlightening, and we had a very enjoyable vacation.:)

Oh, okay that's different. Then yes you set yourself up for that one. :p
That was a pretty nice deal though. I think I could endure the torture for the deal they gave you. ;)
 

Talent312

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Based on your profit analysis, should we be buying Hilton stock?

Hilton is wholly owned by the Blackstone Group, LLC, trading as symbol BX.
Yesterday's close: $13.00. Investors receive a K-1 based on "units" owned.

They also own La Quinta Hotels, the Waldorf=Astoria, Boca Raton Resort &
Club and the Trianon Palace Versailles.
 

smokyhill

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I probably should have been more fair in my wording... We agreed to participate (Had to "endure" wasn't fair) in a 1.5 to 2 hr presentation so as to qualify for the $200 gift certificate for future Hilton stays + the great package deal they gave us. It was a great price ($699 for 6 nights, a rental car & 2 $100 tickets for a luau.

Prior to the presentation we knew ZERO about timeshares, the type of money involved or how they work. It was enlightening, and we had a very enjoyable vacation.:)[/QUOTE]

My better half and I got the same deal a couple years ago. (6nts./car/ luau tics ect.) They tried to sell us a 7000 pt. E.O.Y. deal. Price was just north of $18,000.00. They also were "throwing in" about 25000 bonus points. We signed, but recinded before we left the property. A quick call to a family member familiar with TS got us the question "Why would you want to pay retail for something you can buy wholesale?"
We came home and thank God found TUG. Over the course of the next 3 to 4 months, we ended up buying 2 different 4800pt every year packages for around $9,000.00 total. So we ended up with 9600pts. every year vs. 7000pts. every other year for half the $$$. Isn't TUG a wonderful place??? :D
 
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