New Timeshare Exchange Company [Proposal]

[escanoe]

Already done. Marriott owns II. Wyndham's umbrella company owns RCI.

Yeah, this is basically HGV catching up with the other two of the big three.

 

[escanoe]

Third Key was well connected and it is unclear how successful they are. I think a player like that could introduce a TS level, but the brand is upscale and there is risk in that.

Third Home?

 

[bizaro86]

I'd be tentatively interested in that idea. I think the hardest part would be getting to scale, and I think that would require significant deposits made by the owner of the system for no consideration to seed the exchange pool.

Eg if you had something I wanted in your online inventory and had a way for me to "hold" that inventory while you verified my deposit, I'd absolutely give it a try.

I think subscriptions would be a waste of time initially. Nobody will buy a subscription without being a happy customer. You'd need to develop a base of single-use users first.

A big key (imnsho) is to be completely online. SFX and their "phone in to make a request" model with basically no online inventory doesn't appeal to me. I suspect younger/newer owners are more likely to change exchange companies, and we'll expect digital native service. That also lowers operating costs - if everything can be done online the number of customer service staff and associated costs would be much lower.

I think having an online form that instantly gives a points quote for any offered week is table stakes for this idea, along with the ability to hold and instant exchange for inventory.

If you're serious feel free to send a pm for further discussion.

 

[VacationForever]

Third Home?

High end exchange company, with high exchange fees.

 

[TimeshareBarry]

This is part of why I am not expecting too much. My guess is when exploring economic opportunity the chasms of opportunity well beyond timeshare exchanging will be more fertile for business opportunities than dealing with the timeshare sector where navigating entanglements can be challenging.

I'd be tentatively interested in that idea. I think the hardest part would be getting to scale, and I think that would require significant deposits made by the owner of the system for no consideration to seed the exchange pool.

Eg if you had something I wanted in your online inventory and had a way for me to "hold" that inventory while you verified my deposit, I'd absolutely give it a try.

I think subscriptions would be a waste of time initially. Nobody will buy a subscription without being a happy customer. You'd need to develop a base of single-use users first.

A big key (imnsho) is to be completely online. SFX and their "phone in to make a request" model with basically no online inventory doesn't appeal to me. I suspect younger/newer owners are more likely to change exchange companies, and we'll expect digital native service. That also lowers operating costs - if everything can be done online the number of customer service staff and associated costs would be much lower.

I think having an online form that instantly gives a points quote for any offered week is table stakes for this idea, along with the ability to hold and instant exchange for inventory.

If you're serious feel free to send a pm for further discussion.

Thanks. Agree with all your points. Just exploratory right now, but will keep you in mind if I decide to move forward.

 

[escanoe]

High end exchange company, with high exchange fees.

I know what it is. I was not sure if that was what you meant when referencing “third key.”

 

[WaikikiFirst]

if you had something I wanted in your online inventory and had a way for me to "hold" that inventory while you verified my deposit, I'd absolutely give it a try.

This. Somebody was promoting 7across, so I went back there to take a look. The search is still mystifyingly bad, but better than before, I guess.
But the above quote. A complete deal-killer for 7across. In fact, i think 7a's std model is you make a non-refundable deposit before you can get real details on their inventory, as bad as it is. There was also something else that jumped out but I won't go into it.

 

[TimeshareBarry]

This. Somebody was promoting 7across, so I went back there to take a look. The search is still mystifyingly bad, but better than before, I guess.
But the above quote. A complete deal-killer for 7across. In fact, i think 7a's std model is you make a non-refundable deposit before you can get real details on their inventory, as bad as it is. There was also something else that jumped out but I won't go into it.

'7Across' is Dial-An-Exchange, which is owned by Travel & Leisure, which is owned by Wyndham Resorts, which owns RCI. Small world ...

 

[VacationForever]

I know what it is. I was not sure if that was what you meant when referencing “third key.”

Ah, oh yes, I didn't read the original post.

 

[eschjw]

This. Somebody was promoting 7across, so I went back there to take a look. The search is still mystifyingly bad, but better than before, I guess.
But the above quote. A complete deal-killer for 7across. In fact, i think 7a's std model is you make a non-refundable deposit before you can get real details on their inventory, as bad as it is. There was also something else that jumped out but I won't go into it.

7Across does not require you to deposit first. You may look or request and put on a hold prior to deposit. Of course the inventory you see online has been offered to requesting members first. What you see online is the leftovers just like RCI and II. Last month, looking at the leftovers, I found a 2 bedroom Wyndham Smoky Mountain week on the date that I needed.

This month I put a hold on a 2 bedroom Kauai HVC Point at Popiu unit found in the leftovers. I then called 7Across and told them I had a 2025 unit to deposit but I needed to pay 2025 maintance fees that have not been billed. No problem they say, just call the resort, pay the fees and tell them you are going to deposit. The 7Across I rediscovered has the personal touch that I like.

The old DAE had a limited online inventory and excellent customer service. I got to know several of the employees and hated to see it go off the rails. I think they lost their seed contacts, employees left, deposits dried up and RCI's improvements were terrible.

Like a previous poster said I enjoy the hunt of finding a good deal and I right now I am a happy camper.

 

[dioxide45]

It seems what the OP is looking to do probably already exists out there in some form. Perhaps not in the exact same way but there are about a dozen different independent small exchange companies. Some are better than others but they all seem to have the same issue and that is lack of consistent inventory and critical mass. Here are the ones I am aware of. Some are associated with a developer; DeX, RTX, SFX, 7Accross, Trading Places, HTSE, Platinum Interchange, Trading Places. I just saw another one the other day for British timeshares.

What is the OP going to do differently to set themselves apart?

 

[WaikikiFirst]

7Across does not require you to deposit first.

I was able to see listings but unable to even click thru to "hold", "rent" or "exchange" until I called them and the CSR (who was very helpful btw) put in a "fake" deposit for me, but he said the "fake" deposit won't last long. Once I had a "fake" deposit, I could click-thru and see details behind the listings.
"fake" deposit was he added name of my TS ownership and that it is floating but did not actually enter my week into 7a's inventory.

re: recent Vidanta resort fee thread, I asked about Mexico and he said they just got hundreds of weeks from "a Mayan group who had raised fees and then re-entered hundreds that they had deleted somewhat recently". It was Grand Mayan at Vidanta's various sites. So if anyone wants to use a week and pay $1000 ( 1 bdrm maybe?) in fees, go to 7a

I also could not enter more than 1 request, but he couldn't explain why. Browser issue? 7a issue? idk

 

[TimeshareBarry]

It seems what the OP is looking to do probably already exists out there in some form. Perhaps not in the exact same way but there are about a dozen different independent small exchange companies. Some are better than others but they all seem to have the same issue and that is lack of consistent inventory and critical mass. Here are the ones I am aware of. Some are associated with a developer; DeX, RTX, SFX, 7Accross, Trading Places, HTSE, Platinum Interchange, Trading Places. I just saw another one the other day for British timeshares.

What is the OP going to do differently to set themselves apart?

Thanks for asking. Most of the independent Exchange Companies you refer use a legacy week-for-week exchange model with static season and unit size trading limits. The system I envisage would be 'Points Based' which 'Dynamic Yield Management'. What this means is that the number of Points allocated to a Member would depend not only on the resort quality, unit size, and interval season deposited, but also on when the 'deposit' is made (the sooner the higher the 'Point Premium' allocated) and also when a 'withdrawal' is made (it would use an algorithm to adjust the Points needed based on inventory supply and demand). The outcome would be much higher occupancy rates (after all an empty unit produces ZERO value). Members would also be able to carry forward 100% of their unused Points for 2 consecutive years (excluding the current year) and 80% of their remaining unused Points to the 4th and 5th year from issuance. This would give Members a great deal of flexibility with regard to usage. Membership would also be open to Non-Timeshare Vacation Resort Properties including approved Fractional and Whole Ownership Units that had housekeeping services available (and part of the Points Allocated to an interval would be based on Member feedback regarding their experiences whilst using any Intervals). Intervals could also be days, multiple days and even good-old weeks (additional housekeeping fees may apply to stays shorter than a week, and interval length would be determined by the Member making the deposit or the management of the resort concerned).

There is more to this envisaged system than I am prepared to go into here, but I am confident with those other elements, this would scale very rapidly and as eluded to in one of my earlier replies in this thread, my vision here goes well beyond Timeshares. My goal with my original post here was specifically to get feedback from Timeshare Owners, and so far there has been some genuine concerns raised, some false assumptions made (probably my fault for not giving more details), and also some very good and constructive advise and suggestions.

 

[pedro47]

How many timeshare exchange companies are there now?

 

[eschjw]

I was able to see listings but unable to even click thru to "hold", "rent" or "exchange" until I called them and the CSR (who was very helpful btw) put in a "fake" deposit for me, but he said the "fake" deposit won't last long. Once I had a "fake" deposit, I could click-thru and see details behind the listings.
"fake" deposit was he added name of my TS ownership and that it is floating but did not actually enter my week into 7a's inventory.

What you are calling a "fake" deposit is in reality a verified interval ownership. Once you complete your first exchange or deposit, your interval week will be verfied for all future transactions. Hope this helps. Joe

 

[WaikikiFirst]

calling a "fake" deposit

I guess. The 7a guy called it a "fake deposit". idk........... I doubt they verified it. I gave resort name and told him it was floating, not fixed & room size. I didn't give him a contract # or anything. Maybe they can automate that with just a name, but
And thinking about it, there is no way he knows whether he has my real name or not just by me creating a new account on 7a, ...
BUt the real point was that until I called them I couldn't click thru any of the inventory links. I could see the broad parameters, but couldn't click to see details ... til I called them ... which is a hurdle

 

[escanoe]

and also when a 'withdrawal' is made (it would use an algorithm to adjust the Points needed based on inventory supply and demand). The outcome would be much higher occupancy rates (after all an empty unit produces ZERO value).

In theory, this is how RCI works. But in reality for low to moderate value weeks, the $299 exchange fee does more to ration trading than the TPUs (and often points) involved.

They care a lot more about getting their $299 exchange fees than anything else.

 

[travelhacker]

If you want to build a business around timeshares, I think one of the most difficult ideas I can think of would be to build an exchange company. I can go into reasons why, but I think this has been well covered.

Here are some other ideas if you are set on doing something:
When it comes to renting out what you own or selling a timeshare, Redweek has the lion's share of the market, and the product stinks (but they have a lot of traffic going to them). I have watched go koala along the way and they haven't seemed to make much headway and if anything the listings are drying up.

The TUG marketplace offers both rentals and sales (and I've had success with both on TUG), but it just doesn't seem to get as many eyeballs -- I would love to see that change. What's nice is that buyers, sellers, and rentals all tend to be much more knowledgeable, so it's a lot easier to work with the other party.

Another area to focus on could be closing. LT timeshare is pretty universally recommended. If you had software that made that a bit easier to navigate and you could speed up the time it takes for a closing agent to handle bigger volume, you may be able to take on a decent chunk of that market. You would have to understand the legal implications of recording deeds though.

Good luck!

 

[TimeshareBarry]

If you want to build a business around timeshares, I think one of the most difficult ideas I can think of would be to build an exchange company. I can go into reasons why, but I think this has been well covered.

Here are some other ideas if you are set on doing something:
When it comes to renting out what you own or selling a timeshare, Redweek has the lion's share of the market, and the product stinks (but they have a lot of traffic going to them). I have watched go koala along the way and they haven't seemed to make much headway and if anything the listings are drying up.

The TUG marketplace offers both rentals and sales (and I've had success with both on TUG), but it just doesn't seem to get as many eyeballs -- I would love to see that change. What's nice is that buyers, sellers, and rentals all tend to be much more knowledgeable, so it's a lot easier to work with the other party.

Another area to focus on could be closing. LT timeshare is pretty universally recommended. If you had software that made that a bit easier to navigate and you could speed up the time it takes for a closing agent to handle bigger volume, you may be able to take on a decent chunk of that market. You would have to understand the legal implications of recording deeds though.

Good luck!

Thanks for the perspective and ideas. Appreciated.

 

[jules54]

I believe your asking would owners be willing to give a new exchange company a try. Is that correct? I would try anything I suppose that didn’t cost to belong it. I doubt I would deposit my high level resorts because those get rented for far more than maintenance fees.
You could not have the same restrictions as RCI and Interval as far as renting exchanges.
Reads like you have given this a lot of effort to come up with a good business model. So you know others have tried this and failed miserably.
I hope your planning on it being a full time job, I can’t even imagine the hours that would go into development and running of this company.
Good Luck

 

[TimeshareBarry]

I believe your asking would owners be willing to give a new exchange company a try. Is that correct? I would try anything I suppose that didn’t cost to belong it. I doubt I would deposit my high level resorts because those get rented for far more than maintenance fees.
You could not have the same restrictions as RCI and Interval as far as renting exchanges.
Reads like you have given this a lot of effort to come up with a good business model. So you know others have tried this and failed miserably.
I hope your planning on it being a full time job, I can’t even imagine the hours that would go into development and running of this company.
Good Luck

Hi Jules. Thanks for your comments and feedback. Much appreciated.

Yes the system I envisage has a 'no subscription' based model (but there would be a somewhat higher 'Exchange Fee' for such Members, applicable only when they 'Withdraw' an interval from the system) and, as an alternative to that, the first 1,000, 3,000, 5,000 and 10,000 'Founding Members' would be offered very 'sweet' deals to join and participate in the system (with those joining earlier getting the best deal).

There would be no restrictions on Members advertising and renting Intervals they had deposited into the system, provided they 'withdrew' their Interval from the system prior to another Member withdrawing/booking same. Calendar synchronization with other Rental Platforms such as AirBnB, FSBO, etc. would also be available for those Members wishing to automate this inter-platform updating option. Additionally engaging in 'Private Rentals' of System Inventory (other than that owned by a Member), would also be permitted, but Members would be prohibited from advertising System Inventory NOT owned by them on public rental websites and portals. Lastly Members would also have the option of Depositing their Exchange Points into a 'Rental Pool' and participating in revenue disbursement from the Rental Pool on a Points Deposited Pro-Rata basis.

Lastly I am in no rush to develop this system, and really am only in the formative stages thereof. If I proceed with this, which may only be in a few years time, it would be with a 100% commitment and adequate funding to see the project through development and at least 5 years of operation from launch.

 

[escanoe]

Additionally engaging in 'Private Rentals' of System Inventory (other than that owned by a Member), would also be permitted, but Members would be prohibited from advertising System Inventory NOT owned by them on public rental websites and portals. Lastly Members would also have the option of Depositing their Exchange Points into a 'Rental Pool' and participating in revenue disbursement from the Rental Pool on a Points Deposited Pro-Rata basis.

I am doubtful this is workable. If I deposit a week (or someone else deposits a Wyndham week with all their weird restrictions to stop renting) and someone else rents it out -- the developer is going to crack down on the owner of the week and not person that booked it playing arbitrage.

 

[bizaro86]

I am doubtful this is workable. If I deposit a week (or someone else deposits a Wyndham week with all their weird restrictions to stop renting) and someone else rents it out -- the developer is going to crack down on the owner of the week and not person that booked it playing arbitrage.

I think any week with a wyndham restriction probably can't go into a 3rd party exchange anyway. The only way it works is for the owner to use a guest certificate.

 

[escanoe]

I think any week with a wyndham restriction probably can't go into a 3rd party exchange anyway. The only way it works is for the owner to use a guest certificate.

This is a big part of why the exchange nut is so hard to crack. Of the big 3, Wyndham is unworkable, and HGVC is currently in an “exclusive” arrangement with RCI and they are keeping you off the minor exchanges like SFX.

If you invested in creating an exchange company, dealing with the different systems would be a hazard and they can change their rules anytime they want.

 

[TimeshareBarry]

I am doubtful this is workable. If I deposit a week (or someone else deposits a Wyndham week with all their weird restrictions to stop renting) and someone else rents it out -- the developer is going to crack down on the owner of the week and not person that booked it playing arbitrage.

Our system will not allow 'direct' rental of Intervals. However Members can use their Exchange Points to book accommodation and have Guests use that accommodation on their behalf. Both RCI and II already allow Members to use exchanged inventory for guests (and actually charge the Member a 'Guest Fee' for that 'privilege' - which we will not). If money changes hands between the Member and the guest, then that is their private business and we do not intend to regulate or 'police' that. We will prohibit our Members from advertising system inventory (which they do not directly own), on public rental platforms, and while we may advertise and offer a 'Use Membership' category and allow all Members to purchase additional Exchange Points (to be taken from the Exchange Points Pool which other Members have deposited), we will not directly advertise accommodation for rental to the public in general. RCI (and possibly II) already do rent accommodation to non-timeshare owners, through various 'Affinity Clubs' such as the NAR Travel Club (https://nartravelclub.com/) of which I also happen to be a Member. In their case however, they appear to 'pocket' 100% of the proceeds from those 'rentals' (but perhaps they share that with developers/resorts depositing inventory into there system), while we would distribute 80% of that revenue back to Members depositing their Exchange Points into the the Exchange Points Pool (20% being our fee for managing that Exchange Points Pool - which is in-line with what AirBnB and VRBO effectively charge when you add the Host and Guest fees together that they take).

If any developer/resort group attempts to restrict our Members from booking accommodations for guests, while allowing other Exchange Companies to do so, then that may be a possible violation, inter alia, of the Sherman Anti-Trust Act of 1890, and we would then act accordingly.

I hope this answers your question.