RCI portal now offering hostels

[RNCollins]

No thank you, I like my timeshares…

 

[escanoe]

This is nuts. RCI really needs to focus on its core business (timeshare exchanging).

How many timeshare owners are going to be into staying at hostels?

 

[tschwa2]

its offered through the hotel portal not for exchanges.

 

[T_R_Oglodyte]

This is nuts. RCI really needs to focus on its core business (timeshare exchanging).

How many timeshare owners are going to be into staying at hostels?

Going back about 20 years ago here at TUG, there was discussion about what RCI's core business was. IIRC, I opined that RCI had plans to be much bigger than timesharing - their sights were on the vacation travel business, because that is a much bigger market than timeshare exchanges.

Timeshare exchange is just one piece in that puzzle. Their intent is to leverage every single part of their operation toward that end.

This is completely parallel with the operations of many club systems, in which they are increasingly providing opportunities for members to use points for more than just exchanges. I've even sat through presentations in which the sales person stated unambiguously that the company's goal was to be the first place that members went for all things related to travel - air fare, car rentals. cruises, hotels, resorts, tours and experiences.

Even if you focus solely on timeshare exchanges, there have been big changes since the DeHaans started RCI - namely the rise of trading opportunities inside resort systems. At the inception of RCI, exchange companies were the only way to trade from one resort to another. In time, resort operator recognized they could build internal trading systems and capture for themselves the exchange fees that were going to RCI. So the resort systems developed, first for internal trading, but now they look for ways to capture external trading activity.

So, if you were in a management position at RCI, one thing you would need to address is how do you respond to having your affiliated resorts taking bites out of your revenue streams. You can't kick them out, because you need their inventory. But if you don't respond somehow, you are consigning to having an ever shrinking share of the market, and eventually becoming irrelevant.

So, no timeshare exchange isn't RCI's core business any longer, From a business standpoint it can't be. They need to tap other markets, or they will slide into irrelevance.

 

[escanoe]

Hey @T_R_Oglodyte, you are one of my favorite long-time TUGers to read and learn from. I especially like reading your insights related to DRI and the HGVC-DRI merger. I disagree with you a bit on this, but very much appreciate your perspective.

Someone has to own a timeshare (almost universally, with quite limited exception) in order to obtain an RCI account. Based on what I know about RCI (and Panorama), membership dues, exchange fees, timeshare rental income (Extra & Last Call), and fees related to timeshare exchanges and rentals has to be the vast majority of RCI's income.

To me, I have very little doubt that everything you describe about RCI's need for other revenue sources is true. But all these additional services are their way to try to expand beyond their core exchange business and attempt to have a more diversified revenue stream.

My critique of RCI is that they are making a mistake in neglecting their core business as they try to promote the side hustles more. It does not bother me one bit that they want to be an access point for hotel rooms, flights, cruises, rental cars, etc. What annoys the daylights out of me is they are not tending to their business well and as they add these things to the website, they are actually making it harder and a more difficult experience to exchange timeshares. Their most recent website update has almost made using "favorites" to book mark searches and resorts more difficult to do than starting from scratch (in a completely nonsensical way).

People still come to RCI in the first place to exchange a timeshare. If the company makes it a PITA to do that, how attractive is it to want to use them for other services?

So my advice to them is keep up and grow the side hustles ..... but neglecting the core business of timeshare exchanging is not going to be painless for them. The large exchanges may be basically a duopoly business right now ..... but things can change.

I would love to see a full breakdown of what revenue looks like for Panorama/RCI. I have a sense it will be a long time before RCI becomes Panorama in a truly diversified way (like how Phillip Morris became Altria.)

Going back about 20 years ago here at TUG, there was discussion about what RCI's core business was. IIRC, I opined that RCI had plans to be much bigger than timesharing - their sights were on the vacation travel business, because that is a much bigger market than timeshare exchanges.

Timeshare exchange is just one piece in that puzzle. Their intent is to leverage every single part of their operation toward that end.

This is completely parallel with the operations of many club systems, in which they are increasingly providing opportunities for members to use points for more than just exchanges. I've even sat through presentations in which the sales person stated unambiguously that the company's goal was to be the first place that members went for all things related to travel - air fare, car rentals. cruises, hotels, resorts, tours and experiences.

Even if you focus solely on timeshare exchanges, there have been big changes since the DeHaans started RCI - namely the rise of trading opportunities inside resort systems. At the inception of RCI, exchange companies were the only way to trade from one resort to another. In time, resort operator recognized they could build internal trading systems and capture for themselves the exchange fees that were going to RCI. So the resort systems developed, first for internal trading, but now they look for ways to capture external trading activity.

So, if you were in a management position at RCI, one thing you would need to address is how do you respond to having your affiliated resorts taking bites out of your revenue streams. You can't kick them out, because you need their inventory. But if you don't respond somehow, you are consigning to having an ever shrinking share of the market, and eventually becoming irrelevant.

So, no timeshare exchange isn't RCI's core business any longer, From a business standpoint it can't be. They need to tap other markets, or they will slide into irrelevance.