The Truth about RCI.....long

[ttt]

Many, many posts have talked about diminished trading power, rentals by RCI, membership rules, etc. There have even been class action lawsuits filed. I think that many tuggers just don't understand how RCI views the industry & who their REAL customers are.
The truth is that RCI considers timeshare owners as MEMBERS and they charge MEMBERSHIP & other fees, but we are not their primary CUSTOMERS. The resort developers are RCI's CUSTOMERS, not timeshare owners.
So when you look at the current rental situation or lack of availability for timeshare owners, it is helpful to understand that while RCI may be giving some displeasure to it's MEMBERS, it's CUSTOMERS are thrilled by RCI's actions. Lets take a look at why this is so:
When a timeshare owner exchanges into a new resort, RCI gets the exchange fee & the resort gets a guest for a week along with the associated costs. Maybe you will take the TS tour and by another timeshare at developer prices, but probably you wont. Probably you will take the free gift and run. Contrast this to when the rent a TS unit to the public, even at a bargain price below the maint. fee for that unit.....RCI gets a rental fee that is MORE then the exchange fee & their CUSTOMER(The Developers), get a fresh innocent, unsuspecting new potential owner who may buy at retail price. This makes RCI's CUSTOMERS very happy.
BTW, when we see bulk spacebanking, it is often because the resorts deposit many, many more units then is required for RCI affiliation in order to get new, potential owners. If we see these bulk spacebank deposits into RCI, it's sometimes because they were excess to the RENTAL market, so we 2nd class MEMBERS can now have the opportunity to exchange.
Personally, I think RCI has taken the wrong road. It will lead to the collapse of the Timeshare Industry, RCI just doesn't see it yet because they keep raising fees in order to keep the stockholders happy. Automation of the exchange process should have allowed RCI to keep it's rates stable.
Just look at all the almost free timeshares on ebay that nobody wants. The truth is that most timeshares that do not have a 52 week or close, prime season are in trouble or will be in trouble as soon as their ownership revolts against the continually rising fees. As blue & white & some red week owners abandon their units, the resorts raise maint. fees for those remaining. When fees go above a breakpoint, which I believe is currently about $700, for a regular 2 BR timeshare(Not a Marriott, Hilton, Hyatt or the like), owners start looking for the deed. The previous value of a blue or white week was the ability to exchange it through RCI for something you wanted. Without the exchange value, there is no reason to own this type of week. That is what is happening now. Thousands of owners are giving up on exchanging these off season weeks, good only for Orlando & other overbuilt areas at this time. Add the high exchange fees, & maint. fees & it becomes a no brainer....
RCI needs to get the bus back on the road to industry growth, & keeping both their CUSTOMERS and their MEMBERS happy.

 

[PeelBoy]

Collapsing or Collapsed

TTT, thanks for the analysis. Do you think TS is collapsing or has collapsed? If not yet, how soon?

 

[ttt]

As long as the developers can build new & get them sold, they will continue to build & sell, but I see the future in whole ownership rather then timesharing. Think about how little it can cost to but a timeshare unit at a resort, say one of the Fairfields in Pompono Beach, Fl.. Multiply by 52 and you get a very low price for prime real estate. I realize there is more to an analysis them the sales price, but the varience in cost between buying 52 timeshare weeks and a whole ownership is several hundred thousand dollars. Timesharing became popular for developers because they could get much more by selling 52 individual weeks instead of 1 whole ownership. As selling timeshares for $15,000-$20,000. per week X 52=lots of money. When the builders can't get more for selling timeshares them selling whole units, they will stop building and selling timeshares. This may actually help the industry as it will lessen the supply, but I think the popularity & success of timesharing is due to RCI & II. Exchanging is a big part of the timesharing fun. RCI needs to "turn the bus around" and recognise that timesharing depends on happy exchangers. I don't think timesharing would be where it is today without the exchange companies. Exchanging is one of the major selling points of timesharing. Without the healthty & supported exchange companies, timesharing will surely diminish in popularity. I don't know how long it will take for the exchange company bus to run off the mountain but I do know that I own way fewer timeshares then I did a few years ago. I think many tuggers are also reducing the amount of timeshares they own. I'm also exchanging alot less.....I think the formular for a collapsing timeshare industry is here already:
Rental costs< maint. fee + exchange fee. I'm not even considering that the owner has a purchase price & a renter does not.

 

[Carolinian]

Why buy the cow, when RCI is providing the milk for pennies?

I disagree on one point. RCI is actually undermining its ''customers'', its affiliated resorts, with its cheap rentals program, as well as its members.
When vacationers discover cheap timeshare rentals, they are not about to shell out lots of money to buy from a developer. They are going to stick with the cheap rentals they have discovered. Some developers may take a while to discover that.

I have reduced my own timeshare ownership, down to two summer OBX weeks I use or rent and two red traders elsewhere. One of the traders is a tiger and one a mid-range. I had been playing RCI for its last gasp of decent exchanges with the tiger trader until my membership runs out, but the way things are going, an independent will probably get that one, too, next time around.

HOA's have no developer sales going on, and it is in their interest to encourage their owners to diversify their exchange habits. They don't need all of their eggs in the RCI basket.

 

[short]

Respectfully disagree.

I disagree that timeshare industry is collapsing because of exchanging.

I just returned from the Marriott KoOlina. Several people I talked to owned there. A couple trading in using another Marriott. I was the odd one trading in with a nonMarriott.

At the Westin St Johns. The sales people said I was one lucky exchanger. I go one of only 1 or 2 developer units deposited per year. Based on the people I talked to I was an odd exchangers as all were owners.

At the Rushes in Sept week 37(an exchange through RCI) everyone I talked to were owners of fixed weeks who come every year. One person said they had exchanged once in 5 years.

I am beginning to think we here on TUG are an anomaly not the norm. If most RCI members don't get trades they will go to Orlando once and then back to there home resort. As baby boomers retire they will fill up those white and blue weeks at the better resorts. Marginal or poorly run resorts may fail but I think that is OK because maybe they should not have been built in the first place.

Just my humble opinion(and lilkely an unpopular one in this thread)

Short

 

[dougp26364]

Never mind, I should read before posting.

 

[JLB]

Now I finally understand it all.

 

[timeos2]

The old exchange model is fading fast

I think the popularity & success of tumesharing is due to RCI & II. Exchanging is a big part of the timesharing fun. RCI needs to "turn the bus around" and recognise that timesharing depends on happy exchangers. I don't think timesharing would be where it is today without the exchange companies. Exchanging is one of the major selling points of timesharing. Without the healthty & supported exchange companies, timesharing will surely diminish in popularity. I don't know how long it will take for the exchange company bus to run off the mountain but I do know that I own way fewer timeshares then I did a few years ago. I think many tuggers are also reducing the amount of timeshares they own. I'm also exchanging alot less.....I think the formular for a collapsing timeshare industry is here already:
Rental costs< maint. fee + exchange fee. I'm not even considering that the owner has a purchase price & a renter does not.

While I have to agree that exchanging is no longer what it used to be I really feel it is the mini-systems that are driving the change rather than rentals. The newest and many of the best are no longer standalone weeks but part of a much larger mini such as Sunterra, Wyndham, DVC, etc. They offer a far easier path to non-home resort use, at much lower cost, than any of the exchange companies do. While they usually affiliate with one of the two big exchange systems they tend to get a priority for their members while giving up far less than the individual owners used to offer. Whats left over in the traditional systems is just that - the leftovers. The quality just isn't there anymore. That dynamic more than anything else seems to be the undoing of the older style exchange programs.

 

[PerryM]

Not to worry

RCI is twice as big as all their competition combined – the only thing RCI has to fear is itself. Will RCI screw up and hurt itself – I personally doubt it. Whatever RCI does, 95% of its members will happily do. I believe that RCI has shot itself in the foot with rentals but it might mean a 1¢ reduction of shareholders dividends once.

We are currently staying in a 3BR Sands of Kahana which sells, resale, for $18,000 and has a MF of $1,100 and rents for about $2,000. We exchanged into this place with 12,000 WM credits that cost 75¢ each to buy and a MF of 4¢. We paid $480 + $129 or $609 to stay a week at a beautiful resort on the beach in Kahana, Maui. II has bargains like this all the time.

I would hope that RCI has similar bargains; if they don’t and their members find little use for them then they will lose members. I don’t use RCI for exchanges so I can’t comment. Just guessing but I’m going to assume that RCI’s membership increases year after year and no matter what RCI does the same folks who gleefully spend 100% more than resale (by buying from that jovial salesrep) will gleefully use RCI – and be happy for any exchange they get.

I just don’t think we can overestimate the abuse RCI’s customers will endure and still pay their annual dues.

 

[philemer]

We are currently staying in a 3BR Sands of Kahana which sells, resale, for $18,000 and has a MF of $1,100 and rents for about $2,000.

And you haven't signed up for the TUGGER "do" at Kimo's tomorrow afternoon? Can ya make it? Send me a PM.

Phil

 

[bnoble]

I am beginning to think we here on TUG are an anomaly not the norm.

This is a really interesting thought. What fraction of timeshare owners *never* exchange? What fraction of timeshare owners *do not* belong to *any* exchange company? The numbers might be higher than we think.

After all, exchanging well requires planning---depositing your week early, searching early, doing your homework about what resorts are worth exchanging into... I wonder if the average person works that hard on their vacation.

As a tangential example: the Unofficial Guide folks once published an estimate of the number of Disney World guests that bought *any* guidebook *at all* before visiting. It was a shockingly low number---most people just show up, assuming that they'll figure it out as they go.

 

[Carolinian]

Most of the mini-systems are very limited in their options. Most have limited or no Europe or Caribbean, for example. I cannot see laying out the money for their limited offerings.

What is driving the change is the greed of the big exchange companies who are manipulating the market. RCI in the early days of GPN even sent out a letter from its CEO to affiliated resorts bragging that they were going to use their power as ''market leader'' to ''take timeshare to the mass market''. We have seen in the years since what they meant by that phrase. I posted that entire letter back when it came out on the old TUG boards. RCI is the 1000 pound gorilla in the timeshare industry, and it HAS used that market power to manipulate the market. Since it has controlled a couple of mini-systems, it has likely conformed their policies to its own overall policy. RCI has been doing exactly what it told resorts in general terms it was going to do. Blaming anyone else, like mini-systems, is a theory that just doesn't hold water.

While I have to agree that exchanging is no longer what it used to be I really feel it is the mini-systems that are driving the change rather than rentals. The newest and many of the best are no longer standalone weeks but part of a much larger mini such as Sunterra, Wyndham, DVC, etc. They offer a far easier path to non-home resort use, at much lower cost, than any of the exchange companies do. While they usually affiliate with one of the two big exchange systems they tend to get a priority for their members while giving up far less than the individual owners used to offer. Whats left over in the traditional systems is just that - the leftovers. The quality just isn't there anymore. That dynamic more than anything else seems to be the undoing of the older style exchange programs.

 

[Carolinian]

AMong the several OBX resorts where I am aware of this data, about 70% do not participate in exchanging.

This is a really interesting thought. What fraction of timeshare owners *never* exchange? What fraction of timeshare owners *do not* belong to *any* exchange company? The numbers might be higher than we think.

After all, exchanging well requires planning---depositing your week early, searching early, doing your homework about what resorts are worth exchanging into... I wonder if the average person works that hard on their vacation.

As a tangential example: the Unofficial Guide folks once published an estimate of the number of Disney World guests that bought *any* guidebook *at all* before visiting. It was a shockingly low number---most people just show up, assuming that they'll figure it out as they go.

 

[BocaBum99]

Most of the mini-systems are very limited in their options. Most have limited or no Europe or Caribbean, for example. I cannot see laying out the money for their limited offerings.

What is driving the change is the greed of the big exchange companies who are manipulating the market. RCI in the early days of GPN even sent out a letter from its CEO to affiliated resorts bragging that they were going to use their power as ''market leader'' to ''take timeshare to the mass market''. We have seen in the years since what they meant by that phrase. I posted that entire letter back when it came out on the old TUG boards. RCI is the 1000 pound gorilla in the timeshare industry, and it HAS used that market power to manipulate the market. Since it controls a couple of mini-systems, it has likely conformed their policies to its own overall policy. RCI has been doing exactly what it told resorts in general terms it was going to do. Blaming anyone else, like mini-systems, is a theory that just doesn't hold water.

You believe that mini's are limited in their options because you don't own any and you don't know how to use them.

Mini's have the greatest access to timesharing in the industry.

You can book any of the availabile units in the the system, you can exchange through just about any exchange system with the highest trading power possible, you can rent units, you can have a broader reach for direct exchange with other owners and you can use rental profits to rent other units you don't have access to.

 

[timeos2]

We are below a minority

This is a really interesting thought. What fraction of timeshare owners *never* exchange? What fraction of timeshare owners *do not* belong to *any* exchange company? The numbers might be higher than we think.

After all, exchanging well requires planning---depositing your week early, searching early, doing your homework about what resorts are worth exchanging into... I wonder if the average person works that hard on their vacation.

The percentage of informed buyers/sellers/users of timeshares - including everyone that takes part on TUG and the other timeshare sites - isn't likely to reach 2%. It never ceases to amaze me how many people I run into that either own a timeshare, are planning to get one or who once owned one and dumped it in frustration. Nearly every one thinks they know how it all works yet in a 2 minute conversation it's clear that at best they are repeating a presentation line, haven't ever traded or, worst case, bought years ago and other than paying fees have hardly ever used it for anything! It is that super majority of the population that supports the retail side, RCI/II and feeds the low cost rental and resale machines. We don't stand a chance of changing that. Class action success or not.

 

[Carolinian]

My argument about their limitations has to do with the proposition put forward by some that their internal trading system makes exchange companies obsolete. That is where the limitations come into play. The only mini with any real presence in Europe, Sunterra, for example, now has their European operations up for sale.

I agree that exchange companies sometimes give an unfair preference to some of these systems, but again to even get to that point, one HAS to USE the exchange companies rather than the internal mini-system trades.

You believe that mini's are limited in their options because you don't own any and you don't know how to use them.

Mini's have the greatest access to timesharing in the industry.

You can book any of the availabile units in the the system, you can exchange through just about any exchange system with the highest trading power possible, you can rent units, you can have a broader reach for direct exchange with other owners and you can use rental profits to rent other units you don't have access to.

 

[JLB]

During our recent visit to OLCC, there was not one owner I met, mostly in the EV hot tub, who knew as much as I do about what's going on at that resort, like the GoGlobal program. Most of them knew nothing or very little. None of them knew that OLCC has been separated into multiple resorts with RCI.

The percentage of informed buyers/sellers/users of timeshares - including everyone that takes part on TUG and the other timeshare sites - isn't likely to reach 2%.

 

[short]

Whats so bad about settling for Orlando?

Thousands of owners are giving up on exchanging these off season weeks, good only for Orlando & other overbuilt areas at this time. Add the high exchange fees, & maint. fees & it becomes a no brainer....
RCI needs to get the bus back on the road to industry growth, & keeping both their CUSTOMERS and their MEMBERS happy.

Whats so bad about settling for Orlando. It has a ton of very good quaility resorts. It has a ton of activities to do. I generally has good weather. Even Tuggers with better weeks go to Orlando.

Las Vegas is another great settle for destination. Folks always have plenty to do, plenty to eat and good quality accomadations.

What about using your week a drive to location in your own state. Wouldn't a week in Cape Cod be interesting during spring or fall?

Only a small minority of US timeshare owners have any interest in exchanging into Europe. Most inexperienced travelers to Europe will go on an organized tour or cruise. Even experienced travelers to Europe like myself do not look to exchange and I do not want to stay in one place for 7 days. I want to keep moving to different sites.

JMHO,

Short

 

[Carolinian]

Orlando is good once, and then perhaps again after a long interval. Otherwise it gets repetitious.

Only a very few of the most timid travellers I know have wasted their time and money on an organzied tour in Europe. Most travel on their own.

I agree that exchange is not great for some destinations in Europe. I concluded that about Sicily, for example. For others, such as Corfu, Rhodes, Vienna, parts of the UK, canalboats, Alps near Salzburg, French Riviera, etc., I have found that timeshare works excpetionally well.

But you don't even have to go to Europe or the Caribbean to find places that you cannot get into with an internal trade within many mini-systems. Many southeastern beach destinations would be examples, excluding MB and HH.

Whats so bad about settling for Orlando. It has a ton of very good quaility resorts. It has a ton of activities to do. I generally has good weather. Even Tuggers with better weeks go to Orlando.

Las Vegas is another great settle for destination. Folks always have plenty to do, plenty to eat and good quality accomadations.

What about using your week a drive to location in your own state. Wouldn't a week in Cape Cod be interesting during spring or fall?

Only a small minority of US timeshare owners have any interest in exchanging into Europe. Most inexperienced travelers to Europe will go on an organized tour or cruise. Even experienced travelers to Europe like myself do not look to exchange and I do not want to stay in one place for 7 days. I want to keep moving to different sites.

JMHO,

Short

 

[Carolinian]

There is usually interesting discussion on the RCI board at Crimeshare

www.crimeshare.net/43.html

 

[timeos2]

Did the resorts in MB and HH disappear suddenly?

Orlando is good once, and then perhaps after a long interval. Otherwise it gets repetitious.

Only a very few of the most timid travellers I know have wasted their time and money on an organzied tour in Europe. Most travel on their own.

I agree that exchange is not great for some destinations in Europe. I concluded that about Sicily, for example. For others, such as Corfu, Rhodes, Vienna, parts of the UK, canalboats, Alps near Salzburg, French Riviera, etc., I have found that timeshare works excpetionally well.

But you don't even have to go to Europe or the Caribbean to find places that you cannot get into with an internal trade within many mini-systems. Many southeastern beach destinations would be examples, excluding MB and HH.

This is a far too narrow view of what many travelers want. The minis - especially the large ones - can fill 90% or more of the desired locations especially when you consider that they get priority over non-system members for whatever inventory is in RCI/II. As for Orlando/Las Vegas/etc getting "repetitious" that is about as personal a view as there is. Many many (make that many) people are more than happy to get a week in those locations especially at a nice resort - of which there are more than a few in those areas. While some may be bored the majority are not and will go there again and again.

And since when are the MB and HH areas not represented (heavily) in the major mini-systems? Wyndham, Sunterra and others have a ton of top quality locations in those east coast areas.

 

[AwayWeGo]

What's Not To Like ?

As for Orlando/Las Vegas/etc getting "repetitious" that is about as personal a view as there is. Many many (make that many) people are more than happy to get a week in those locations especially at a nice resort - of which there are more than a few in those areas. While some may be bored the majority are not and will go there again and again.

We go to Orlando again & again -- not tired of it yet. But as realistic folks, we understand that timeshare vacationing means vacationing where the timeshares are -- & for us Orlando, where there are timeshares galore, frequently turns out to be the choicest Florida location with easy-to-snag, big-bargain availability at the times we like to go. Shucks, we had to get on the RCI web site several times a day to snag the 2BR standard-grade timeshare in Mulberry FL where we stayed 1 time. And even though Mulberry FL is closer to Plant City FL & Lakeland FL & Thonotosassa FL & Zephyrhills FL & places like that where we like to go, The Chief Of Staff found Mulberry FL to be more boring once than she finds Orlando FL to be over & over -- & we don't even go to the theme parks much.

We're way happier staying in some 2BR luxury-grade timeshare villa on International Drive than we are in some Motel 6 or Super 8 econobox in Tampa FL or Lakeland FL or Pinellas Park FL. So we go with outstanding Orlando timeshares for our Florida vacations, even though that means more highway time getting to Plant City, Thonotosassa, Zephyrhills, etc. So it surely does boil down to people's individual preferences -- some folks like OBX, some folks like Orlando FL, some folks like Branson MO, some folks like Williamsburg VA, some folks like Las Vegas NV, & some folks like'm all.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

 

[Carolinian]

My point is about east coast beaches OTHER than HH and MB. I have never suggested you cannot get those two, but the other southeast coast areas are generally scarce in the minis (yes BlueGreen does have Charleston, a prime spot).

And since when are the MB and HH areas not represented (heavily) in the major mini-systems? Wyndham, Sunterra and others have a ton of top quality locations in those east coast areas.

 

[timeos2]

My point is about east coast beaches OTHER than HH and MB. I have never suggested you cannot get those two, but the other southeast coast areas are generally scarce in the minis (yes BlueGreen does have Charleston, a prime spot).

You are correct - I missed the excluding part. Sorry.

 

[Neesie]

Whats so bad about settling for Orlando. It has a ton of very good quaility resorts. It has a ton of activities to do. I generally has good weather. Even Tuggers with better weeks go to Orlando.

Las Vegas is another great settle for destination. Folks always have plenty to do, plenty to eat and good quality accomadations.

JMHO,

Short

To Each His Own! IMHO Orlando and Las Vegas are on the bottom of the list where my husband and I would go. I believe I heard once that the majority of timeshare exchangers wanted a beach vacation. That is true for me; also natural beautiful scenery like Hawaii, Sedona and British Columbia are high on my list. RCI has sent me to all of those places and more.