Shouldn’t the “skim” be a dead issue now?

[csalter2]

Hello Everyone,

I would like to bring up an old topic, because I still read about it hear from time to time and wonder if it is still relevant now that we have had the points system in effect for nine years.

People still talk about the “skim” which is a term we lexicographers on TUG gave to the difference in points in which a weeks owner receives when they elect points and the amount of points Marriott assigns to a the unit for people using Destination points. For example, in a Ko Olina platinum season Mountain View 2 bedroom gives the owner 4025 DC points when they choose to elect points. However, a Destinations points owner, needs between 4050 and 4575 Destination points to gain access to that same unit during platinum season.

I am trying to figure out that why as a weeks owner are people so concerned about the difference in points they receive when they do not have to use points to stay at their home resort. It’s never an issue for a weeks owner. The points difference is NEVER an issue if they stay at their home resort. If a weeks owner wants to trade/exchange, they can use Interval.

Now, I know that some feel cheated because they are not given the same amount of points that Marriott requires but why is it important for you as a weeks owner. You can stay in your own resort with a simple reservation as you always have. Now if you want to upgrade which you could not before, you could go use points.

Now pure points owners have no concerns because the points are points and there is no concern. So in my opinion their is no “skim” and no need to be concerned about a “skim”. Is there something that I am missing here? I thought this was a moot point, but I still see it come up every now and then.

 

[TheTimeTraveler]

Carlito; Good point!



.

 

[Pamplemousse]

Hello

 

[mjm1]

I think it is still an issue if one wants to elect points instead of using their home week. In that case I would have less points/currency/value to trade to other resorts or even another season at my home resort. I look at it as a “cost of playing in the points program with a unit I bought instead of buying points.” It doesn’t bother me as that is a choice I either make or don’t make each year with my enrolled weeks.

Best regards.

Mike

 

[Ralph Sir Edward]

I brought it up in comparison between Marriott and HGVC points systems. It is relevant on how one wants a system to work.

In Marriott, the "skim" is how the points access is paid for. By reducing the purchasing power of a converted week to less than a week. Say you lost one day a week, on every conversion (roughly) after 7 conversion, you would only have 6 weeks worth of timeshare, while having paid for 7 weeks worth.

In HGVC, you are charged a fee of $67 to book a week for points. However you have the same number of point to book with that it would cost you to book the same timeshare/season. After 7 conversion/bookings the cost would be $469, and you would still have 7 weeks worth of timeshare reservations.

$469 versus 1 weeks MFs. That is a cost consideration when choosing a timeshare system. Of, course, it is not the only consideration, but it is one that needs to be spelled out, for someone deciding between the two systems.

 

[Ralph Sir Edward]

Hello Everyone,

I would like to bring up an old topic, because I still read about it hear from time to time and wonder if it is still relevant now that we have had the points system in effect for nine years.

People still talk about the “skim” which is a term we lexicographers on TUG gave to the difference in points in which a weeks owner receives when they elect points and the amount of points Marriott assigns to a the unit for people using Destination points. For example, in a Ko Olina platinum season Mountain View 2 bedroom gives the owner 4025 DC points when they choose to elect points. However, a Destinations points owner, needs between 4050 and 4575 Destination points to gain access to that same unit during platinum season.

I am trying to figure out that why as a weeks owner are people so concerned about the difference in points they receive when they do not have to use points to stay at their home resort. It’s never an issue for a weeks owner. The points difference is NEVER an issue if they stay at their home resort. If a weeks owner wants to trade/exchange, they can use Interval.

Now, I know that some feel cheated because they are not given the same amount of points that Marriott requires but why is it important for you as a weeks owner. You can stay in your own resort with a simple reservation as you always have. Now if you want to upgrade which you could not before, you could go use points.

Now pure points owners have no concerns because the points are points and there is no concern. So in my opinion their is no “skim” and no need to be concerned about a “skim”. Is there something that I am missing here? I thought this was a moot point, but I still see it come up every now and then.

The point missing is that if, despite due diligence, a person was unable to book a home week when he/she wants to, That person cannot go to the points system, and buy the same week, even if multiple ones are available in the points system, because he/she lacks the necessary points to do do so, because of the skim. I perceive it as a method to encourage purchase of extra points, (with more MFs attached) to bring one up to the ability for the either/or system choice. (Hence raising the MF net cost for the week involved, plus more up front money for Marriott.)

The pure points owners are paying the highest MFs in the entire system, as it is, so it doesn't affect them (as long as they don't look at the bottom line MF cost.)

 

[davidvel]

You are correct that it doesn't matter if you book your own whole week, but does matter if you elect for points and book elsewhere, or back home for a few days, etc. The issue of skim is not dead merely because 9 years have passed and we've become accustomed to it.

The issue of the "currency" aka points being skimmed still exists, and all the same arguments apply. Nothing has changed about that.

 

[csalter2]

I brought it up in comparison between Marriott and HGVC points systems. It is relevant on how one wants a system to work.

In Marriott, the "skim" is how the points access is paid for. By reducing the purchasing power of a converted week to less than a week. Say you lost one day a week, on every conversion (roughly) after 7 conversion, you would only have 6 weeks worth of timeshare, while having paid for 7 weeks worth.

In HGVC, you are charged a fee of $67 to book a week for points. However you have the same number of point to book with that it would cost you to book the same timeshare/season. After 7 conversion/bookings the cost would be $469, and you would still have 7 weeks worth of timeshare reservations.

$469 versus 1 weeks MFs. That is a cost consideration when choosing a timeshare system. Of, course, it is not the only consideration, but it is one that needs to be spelled out, for someone deciding between the two systems.

Of course, it all depends on your unit and location. If I elect points for one of my weeks, I can get three or four weeks at some of the resorts, and that’s not even using the Destinations Escapes program.

 

[sparty]

I like simple math - number of points Marriott skims X Going rental rate of a Point

One of my weeks has a 1200 pt skim, assume 60 cents per pt = $720

Carlito - in your example you're talking 25-50 pts - that is a don't care, 1200 pts, I care.

Simple.

 

[Ralph Sir Edward]

Of course, it all depends on your unit and location. If I elect points for one of my weeks, I can get three or four weeks at some of the resorts, and that’s not even using the Destinations Escapes program.

But can you work backwards to make the same trade? That is the crux of the issue.

 

[csalter2]

The point missing is that if, despite due diligence, a person was unable to book a home week when he/she wants to, That person cannot go to the points system, and buy the same week, even if multiple ones are available in the points system, because he/she lacks the necessary points to do do so, because of the skim. I perceive it as a method to encourage purchase of extra points, (with more MFs attached) to bring one up to the ability for the either/or system choice. (Hence raising the MF net cost for the week involved, plus more up front money for Marriott.)

The pure points owners are paying the highest MFs in the entire system, as it is, so it doesn't affect them (as long as they don't look at the bottom line MF cost.)

One can still exchange through Interval International. Many still claim that Interval still works very well for them.

 

[Ralph Sir Edward]

One can still exchange through Interval International. Many still claim that Interval still works very well for them.

And at what price? II is not free, nor is availability certain.

 

[Ralph Sir Edward]

Now other factors may make the "skim" palatable. (Wider variety of resorts, costs not being a concern, ect.) but it is still there.

 

[csalter2]

But can you work backwards to make the same trade? That is the crux of the issue.

I’m not sure what you mean by working backwards. With points, I can cancel the reservation and get the points back but once I elect points a particular year I cannot go back to a week. That’s understandable because I gave up my spot. It’s like using Interval International. You can’t go back after trying to exchange.

 

[CalGalTraveler]

One may want less or more than a week, or may wish to upgrade. The beauty of the HGVC system is that it is fluid. With the exception of a few resorts during peak, few owners use their home week because there is no skim penalty. Most people want diff. check in days, size, view within same resort which requires points.

This means you can likely get that OF oceanfront with points if you book 9 mos ahead with inexpensive Vegas points because owners dont have them locked up in weeks system that are never available because owners are either not enrolled or are disincented from converting to points because of skim.

 

[sparty]

The pure points owners are paying the highest MFs in the entire system, as it is, so it doesn't affect them (as long as they don't look at the bottom line MF cost.)

The poor pure points owners predicament is even worse with my week, if you take the average rental price for the week and divide by the current rental price of a point on the open market (~60 cents/pt), the pure points owner is overpaying by about 1000 pts or $600.. Marriott has got it covered from both ends!

 

[JIMinNC]

I brought it up in comparison between Marriott and HGVC points systems. It is relevant on how one wants a system to work.

In Marriott, the "skim" is how the points access is paid for. By reducing the purchasing power of a converted week to less than a week. Say you lost one day a week, on every conversion (roughly) after 7 conversion, you would only have 6 weeks worth of timeshare, while having paid for 7 weeks worth.

In HGVC, you are charged a fee of $67 to book a week for points. However you have the same number of point to book with that it would cost you to book the same timeshare/season. After 7 conversion/bookings the cost would be $469, and you would still have 7 weeks worth of timeshare reservations.

$469 versus 1 weeks MFs. That is a cost consideration when choosing a timeshare system. Of, course, it is not the only consideration, but it is one that needs to be spelled out, for someone deciding between the two systems.

HGVC also has other fees - like saving points - that MVC doesn't, so depending on how often you use that option, the cost could easily be more than your $469 example. Also, it's $67 for EACH booking, not each week. We've been HGVC owners (one 7000 point week) for about 18 months, and in that time, we've made three three-night reservations - so that nine nights cost us $201. We've also saved points twice, and at $108 each, that's another $216. We also have a pending 2020 booking for seven nights at Kings Land, so that's another $67. So total fees to HGVC for four booked trips is $484 over 18 months, not 7 years as in your example. And I still have over 4000 2020 points that can be used for another 2020 booking (another $67) or will need to be saved (another $108). So, by the end of 2020, HGVC transaction fees will be between $551 and $592 for three usage years (2018-2020), or $183 to $197 per year. So using those real world numbers and your same seven use example, the total cost would not be $469, but would be somewhere between about $1280 and $1380. In the MVC system, all those transactions would be covered by the annual membership fee. The MVC annual fee is $205 vs. $176 for HGVC, so that's a small additional advantage to HGVC.

When you compare the systems this way, the total of the HGVC fees is a lot closer to the same one week of MF cost your example would yield with the MVC "skim". Now every year may not be as costly/extreme as our usage so far, because that was exacerbated since our early 2018 purchase included 2018 usage (which we really didn't need, hence the need to save), so we've used our points maybe a little differently than we will over the long haul. What it does show is that the revenue HGVC gets from their fees might be a lot closer to the benefit MVC gets from the skim than your initial example would at first imply. Your $469 is actually probably the MINIMUM fees HGVC would generate over the 7 conversions you used as your example. The actual number is almost certainly higher (but maybe not as high as our initial usage has been).

So, yes, two different business models, each with its own advantages/disadvantages.

In truth, I've never been really bothered by the skim for the reasons Carlito lists. I like the MVC no fee approach and understand the skim is a way to help make that happen.

 

[CalGalTraveler]

HGVC also has other fees - like saving points - that MVC doesn't, so depending on how often you use that option, the cost could easily be more than your $469 example. Also, it's $67 for EACH booking, not each week. We've been HGVC owners (one 7000 point week) for about 18 months, and in that time, we've made three three-night reservations - so that nine nights cost us $201. We've also saved points twice, and at $108 each, that's another $216. We also have a pending 2020 booking for seven nights at Kings Land, so that's another $67. So total fees to HGVC for four booked trips is $484 over 18 months, not 7 years as in your example. And I still have over 4000 2020 points that can be used for another 2020 booking (another $67) or will need to be saved (another $108). So, by the end of 2020, HGVC transaction fees will be between $551 and $592 for three usage years (2018-2020), or $183 to $197. So using those real world numbers and your same seven use example, the total cost would not be $469, but would be somewhere between about $1280 and $1380. In the MVC system, all those transactions would be covered by the annual membership fee. The MVC annual fee is $205 vs. $176 for HGVC, so that's a small additional advantage to HGVC.

When you compare the systems this way, the total of the HGVC fees is a lot closer to the same one week of MF cost your example would yield with the MVC "skim". Now every year may not be as costly/extreme as our usage so far, because that was exacerbated since our early 2018 purchase included 2018 usage (which we really didn't need, hence the need to save), so we've used our points maybe a little differently than we will over the long haul. What it does show is that the revenue HGVC gets from their fees might be a lot closer to the benefit MVC gets from the skim than your initial example would at first imply. Your $469 is actually probably the MINIMUM fees HGVC would generate over the 7 conversions you used as your example. The actual number is almost certainly higher (but maybe not as high as our initial usage has been).

So, yes, two different business models, each with its own advantages/disadvantages.

In truth, I've never been really bothered by the skim for the reasons Carlito lists. I like the MVC no fee approach and understand the skim is a way to help make that happen.

If you own a bHC property in NYC or DC or are Elite res. fees are waived. We own in NYC so the HGVC fees are irrelevant for us.

 

[JIMinNC]

If you own a bHC property in NYC or DC or are elite res. fees are waived. So the fees are moot for us.

True, but that's a small group of owners and is not true for the vast majority of HGVC owners.

 

[sparty]

In truth, I've never been really bothered by the skim for the reasons Carlito lists. I like the MVC no fee approach and understand the skim is a way to help make that happen.

Quantify "bothered" - what's your weeks points skim? 25-50 pts? Then I agree Carlito's reasoning makes sense.

 

[csalter2]

One may want less or more than a week, or may wish to upgrade. The beauty of the HGVC system is that it is fluid. With the exception of a few resorts during peak, few owners use their home week because there is no skim penalty. Most people want diff. check in days, size, view within same resort which requires points.

This means you can likely get that OF oceanfront with points if you book 9 mos ahead with inexpensive Vegas points because owners dont have them locked up in weeks system that are never available because owners are either not enrolled or are disincented from converting to points because of skim.

Hawaii 2 bdrm OF at Hilton quality resort for $1200 / week? Yes please!

I have recently been reading up on the HGVC system, it seems that those with points in say New York have a different system or process that’s different from regular HGVC owners. I didn’t quite understand it as I am just learning the system.

 

[CalGalTraveler]

True, but that's a small group of owners and is not true for the vast majority of HGVC owners.

True it's a smaller group, but I am sure you would agree that there are a large number of HGVC owners who trade into Hawaii using inexpensive Vegas or Orlando HGVC points. Paying $1000 - $1400 per week for OF/OV 2 bdrm in a similar quality resort is a lot less than $2200 MVC maint fee + enrollment making the $67 res fee a minor cost when compared to the big picture.

The lack of skim disincentives and enrollment barriers makes this possible because the entire HGVC system is enrolled making it fluid. We love using our WKORVN week but trade with HGVC to extend our HI visit or go elsewhere such as Cabo or NYC for a long weekend getaway.

Even in Hawaii the HGVC MFs are generally under $2k so there is savings there too.

It's not Maui but a newly built resort will be open in 2021. Now if only they would add Kauai...

 

[JIMinNC]

Quantify "bothered" - what's your weeks points skim? 25-50 pts? Then I agree Carlito's reasoning makes sense.

I only have one enrolled week right now, my Barony week. (My two Hawaii weeks are post-2010, so not enrolled). Our Silver GV Barony week is worth 1625 points. Booking the same week with points would be 1725, so 100 points or about 6%.

If our Maui week and Waiohai weeks were enrolled, the skim would be as follows:

-- 2BR OV Maui Ocean Club: Point value is 5825 (all weeks Platinum); Booking cost is 5850 (in low points season) or 6700 (high points season); so skim ranges from 25 points to 875, depending on season since MVC uses a two-tier points schedule.
-- 2BR IV Waiohai: Point value is 4225 (all weeks Platinum); Booking cost is 4225 (in low points season) or 4850 (high points season); so skim ranges from 0 points to 625.

So, using your 60-cents rental rate methodology, the "cost" of the skim for the Maui weeks ranges from $0 to $525 (depending on when I book) but I have unlimited transactions for free. As my example above shows, the nickel-and-dime approach HGVC uses as an alternative to skim, can add up over time. Is the HGVC approach probably more cost effective for most owners over time than the skim, sure it is, but in the scheme of things it's not that big of a deal to me. If we could cost-effectively enroll our two Hawaii weeks at some point, I would gladly pay the skim to have the flexibility to reconfigure a given trip from a 2BR to a 1BR or use the points for somewhere else. Right now my only alternative use is II (and that adds an II account fee and a trade fee, so those could be $300+ per year also) or to rent out my weeks. We hate II trading and have no desire to screw with rentals unless we absolutely have to, so having the ability to use our 2BR weeks when we want/need to, but then to be able to convert to points when we have to change our plans would be worth a few hundred bucks of skim to me.

 

[JIMinNC]

True it's a smaller group, but I am sure you would agree that there are a large number of HGVC owners who trade into Hawaii using inexpensive Vegas or Orlando HGVC points. Paying $1000 - $1400 per week for OF/OV 2 bdrm in a similar quality resort is a heck of a lot less than $2200 MVC maint fee + enrollment making the $67 res fee a minor cost when compared. The lack of skim and enrollment barriers makes this possible because the entire system is fluid. We love using our WKORVN week but trade with HGVC to extend our visit or go elsewhere.

Even in Hawaii the HGVV MFs are generaly under $2k so there is savings there too.

If course it's not Maui but that new resort will be open in 2021. Now if only they would add Kauai...

NO question HGVC is a more user-friendly, cost effective overall system than Marriott - and where locations are comparable - we'll use HGVC over MVC points. We bought HGVC for access to the Big Island, and secondarily, to Oahu and their other locations. With the HGVC locations, it's unlikely we'll ever use MVC points for Marriott Waikoloa Ocean Club or KoOlina. But MVC has things HGVC doesn't. HGVC can't give us Kaanapali or Kauai, and I bet the HGVC Maui location is going to be hard to get and high points when it opens. That's why we own MVC weeks there. As I noted above, to me, if we could ever get these two weeks enrolled, even sparty's theoretical $500 cost of the MVC Hawaii skim would be worth it to us for the flexibility to craft an alternate use if our needs in a given year are different. With enrollment, if we need an alternate usage in any given year, we would avoid an II annual fee and a trade fee (and avoid a process we detest), so the real cost of that skim is much less. That's why I've never really understood all the indignation about the skim. Nothing is free, and the skim is the price of no transaction fees and no II fees.

 

[Steve Fatula]

Hello Everyone,

I would like to bring up an old topic, because I still read about it hear from time to time and wonder if it is still relevant now that we have had the points system in effect for nine years.

People still talk about the “skim” which is a term we lexicographers on TUG gave to the difference in points in which a weeks owner receives when they elect points and the amount of points Marriott assigns to a the unit for people using Destination points.

Totally agree with you, a non issue for us. You get x points if you elect for points, period. Any other fictitious scenario does not exist. If you do not like how many points you get, don't elect for points! For us, we are always ahead electing for points, always. If we wanted to invent a "skim", it would be to the plus side. Everyone's use and scenario is different. The flexibility of points is immense. And there are definitely additional costs due to the points system, for example, there are undoubtedly lost days due to the ability to stay 1 day, 2 days, etc. It's not possible for all those days to line up with everyone's schedule, I am sure even in a formerly fully booked resort, there are unused days. I wonder what percent that turns into?

But using the term skim as an argument against the points system makes no sense at all. My guess - it's people who have no interest in points and they want to justify it. The points system is definitely *not* for everyone. Never mind you cannot compare the use of points vs weeks as they work totally differently and I would not expect them to be the same. You can't logically pick one fictitious scenario and say therefore it's not fair when there are countless scenarios where it is more than fair, or, you get added capabilities or features. People generally want to compare weeks vs DC points used as weeks only like that's the only way to use it. That's not the point! It's one way to use it, but, if that's all you are going to do, probably not worth it. There are so many other ways to take advantage of it. Points are not weeks! The fact that there are bad ways to use points is not surprising, there have been bad ways to use weeks as long as the product has existed.

IMHO.