UPDATE: RCI CLASS ACTION LAWSUIT - must read for all RCI members [Includes Results]

[rickandcindy23]

As far as I can tell with my blue week deposits, the 45-day window is more like 20 days or less. It used to be 45 days, and now it is a fraction of 45 days. This means less opportunities for those blue weeks, and we almost all pay as much in fees for those blue weeks as we pay for red.

Jennie:

quote

"Nothing about the 45 day drop of trading power is impacted by the settlement. Whatever someone could do last year at 45 days out, he/she can do next year at 45 days out."

Does the option of 45 day "Late Exchange" still exist?

 

[beejaybee]

Strategy?

With the provisions of this settlement, would one of you very savvy Tug members, please summarize how to maximize our trading power in terms of when to deposit and when to search, put in ongoing request or look for "last-minute" exchanges? I am trying to glean from the various posts how to make the most of this settlement, and getting a little confused.

I suggest that this information be posted on one of the "members only" forums.

Thanks,

 

[jerseygirl]

I believe Jennie was stating that the settlement itself will not affect the 45-day window.

When I posted my earlier comments, I assumed that because RCI can pull inventory without limitation and substitution at the 60-day mark, the 45-day window was effectively gone. However, Jennie has stated that RCI already had this ability at 90 days, and now it's been changed to 60 days ... so this is an improvement. In other words, I shouldn't have made the jump that the 45-day window is gone. I think Jennie was just being polite by not coming out and directly saying "jerseygirl is wrong about the 45-day window!"

I don't have a weeks account, but I see a lot of good stuff available for 7500 points. Can I assume that those same weeks are available to weeks members without trading power limitations? If so, there's still some sort of a "last minute" window on the weeks side.

 

[Carolinian]

The additional drain on the 45 day window from both rentals and points is already causing bailout by off season owners who primary used weeks for trade within that window, and this can only get worse. These people have been seeing for a while that they are no longer getting the trades they used to. This can have a substantial impact on resort finances, and thus our m/f's, as time goes on. This is one negative from the Brave New World of RCI that has not received as much attention as it should.

Personally, it has been years since I owned a blue week, so this is all second hand, but the resort where I served on the board has been seeing bailout of the retired multi- blue week owners, who were primarily trading in the 45 day window. They make no bones about saying why they are getting out of the game.

As far as I can tell with my blue week deposits, the 45-day window is more like 20 days or less. It used to be 45 days, and now it is a fraction of 45 days. This means less opportunities for those blue weeks, and we almost all pay as much in fees for those blue weeks as we pay for red.

 

[crazyhorse]

Jerseygirl:

quote:

"Can I assume that those same weeks are available to weeks members without trading power limitations? If so, there's still some sort of a "last minute" window on the weeks side."

There does not seem to be any "last minute" window on the weeks side for Europe, unless you want to rent (i.e.no deposit needed). This facility is called "Late Deals".

I asked my original question because I thought that there could be a "Late Exchange" program still operational in the States or elsewhere in the world, or perhaps something similar over in the Points System.

 

[timeos2]

If it has no value to the owner why is it a value to someone else?

The additional drain on the 45 day window from both rentals and points is already causing bailout by off season owners who primary used weeks for trade within that window, and this can only get worse. These people have been seeing for a while that they are no longer getting the trades they used to. This can have a substantial impact on resort finances, and thus our m/f's, as time goes on. This is one negative from the Brave New World of RCI that has not received as much attention as it should.

Personally, it has been years since I owned a blue week, so this is all second hand, but the resort where I served on the board has been seeing bailout of the retired multi- blue week owners, who were primarily trading in the 45 day window. They make no bones about saying why they are getting out of the game.

I know we've gone back and forth on this question before but I am seriously interested in your take. IF the owners of those low value blue weeks are able to snag better value weeks, thus giving them a value for their fees and propping up the resort, what happens to the week THEY deposit? Who wants to cover the costs of that? Where does the "value" come from? RCI (or II, or the owners of the resort that the snagged week came from - whoever) don't owe that owner or that resort a vaue above what they or the system gets in return. It appears that the chain dies with that poor value blue week deposit and trade up - someone is left with a worthless week in this situation. How is that fair, who is supposed to eat that expense and what happens to the unwanted week that now sits there with no interest as trade, use or rental? To my eye it is the responsibility of the resort/owner at the head of the problem to find a value not third parties. What do you think the answer is?

 

[e.bram]

Maybe scaled MFs buy season would help?

 

[DeniseM]

Maybe scaled MFs buy season would help?

That wouldn't be fair to high season owners. Maintenance costs are the same whether you own during high season or low season, so why should a high season owner subsidize a low season owner's maintenance fee?

 

[DanM]

Blue week issue

I know we've gone back and forth on this question before but I am seriously interested in your take. IF the owners of those low value blue weeks are able to snag better value weeks, thus giving them a value for their fees and propping up the resort, what happens to the week THEY deposit? Who wants to cover the costs of that? Where does the "value" come from? RCI (or II, or the owners of the resort that the snagged week came from - whoever) don't owe that owner or that resort a vaue above what they or the system gets in return. It appears that the chain dies with that poor value blue week deposit and trade up - someone is left with a worthless week in this situation. How is that fair, who is supposed to eat that expense and what happens to the unwanted week that now sits there with no interest as trade, use or rental? To my eye it is the responsibility of the resort/owner at the head of the problem to find a value not third parties. What do you think the answer is?

Interesting and probably worth a new thread (a little off topic here). Anyway, seriously, who is going to find intrinsic value in a January Virginia beach week? Even if some people love them, there would never be a market unless you could trade them for something worthwhile. If there isn't an affiliated exchange company and if trade value isn't lifted at some point, the whole timeshare model falls apart. The only alternative I could see would be to restructure sales and maintenance from the development side...maybe charge nothing for the units or have a lower maintenance schedule than prime weeks, or both. But I suspect that would change the economics so that prime week costs would be too high to be competitive with renting in most areas. On the other hand, I don't have a problem with blue week owners getting a shot at anything in the pool at 45 or 60 days out if it keeps my maintenance on a prime week down. All it requires on my part is planning a few months ahead, and if I couldn't do that I shouldn't be exchanging timeshares in the first place. Of course, it seems like RCI is killing the old model and thus the timeshare industry willy nilly.

 

[jerseygirl]

I don't think there has to be a loser ... with millions of members, I would bet thousands (tens of thousands?) of deposits expire due to owner apathy, illness, whatever.

I think the issue is that it worked in the past (exchanging propped the value of blue weeks) and it stopped working when RCI got into the full-time rental business.

 

[tschwa2]

That wouldn't be fair to high season owners. Maintenance costs are the same whether you own during high season or low season, so why should a high season owner subsidize a low season owner's maintenance fee?

A couple of thoughts I have about this. I own a blue week at a small 30 unit Maryland beach resort. Maryland has a law that you can't have different MF for different weeks so unless that changes, nothing can be done about it. But from a purely MF perspective, in high season every unit is usually full with the occupancy close to the max 6 persons per unit. There is more traffic to and from the beach bringing wet sandy clothes and beach peraphernalia in and out, wearing out the bathtubs, washing machines, carpets, vacuum cleaners faster. There is also running the dishwasher more often, using the balcony furniture, requiring monitoring of the parking lot to ensure non guest aren't parking.

During my winter week I can't remember when there were more than 6 out of 30 checking in for the week. I can't remember when there were more than 3 units who stayed beyond Monday or Tuesday to check out on Friday. Occasionally there would be 1 RCI exchange (Maybe a last call, maybe a skyauction. I doubt they paid more than $200 for the week.) It's usually groups of 2-4 that come off season; a couple or a family with small children. We don't usually run the dishwasher or the clothes washer/dryer more than once. We don't usually use all the beds and we never sit out on the balcony. The unused units don't need additonal housekeeping. I certainly think an off season discount of $30-$50 a week would be justified.

My resort keeps fees down for everyone but when you have 144 HOA owned units&delinquencies (104 blue, 24 white, and 16 red- and RCI is generous with the red and white designation because only 1 available red week would be considered high time) and everyone has to make up for the delinquencies and HOA units and winter weeks rent for 1/2 MF and prime weeks rent for 2X MF- the blue weeks will be further tempted to walk and then high season can have the fun or paying for the expenses for all the seasons. I think cutting the lower season some kind of break might keep them from walking.

Tracey

 

[bnoble]

That wouldn't be fair to high season owners. Maintenance costs are the same whether you own during high season or low season, so why should a high season owner subsidize a low season owner's maintenance fee?

Fundamentally, highly-seasonal resorts with fixed per-week fees have a real problem. If the low-season owners are forced to pay more per week than the weeks are "worth", they will increasingly abandon their ownerships. That raises fees (due to uncollectable debt), tipping the balance for even more off-season owners, and so on. As a concrete example, one of my (seasonal) resorts raised fees by 15% this year---largely because of increases in uncollectable MFs.

I don't see why it is RCI's job to solve this problem for these resorts.

Some highly-seasonal resorts have creative ways to deal with this. For example, many Michigan resorts appear to have been sold in "blocks" of time, with multiple weeks on the deed---e.g. one red, two white, one blue. Each owner pays fees based on four weeks owned, but is forced to carry a mix of weeks so that overall value is maintained.

Pure points systems (e.g. Wyndham UDI deeds) have another way around it---and they do charge based on value of time, not on proportion of costs. MFs are charged on a per-point basis. High weeks require more points to book than low weeks. Bingo---costs are charged based on value, not on a strict per-week division of costs.

Unfortunately, for resorts that are already fully sold, neither of these is going to work. It's a hard problem, for sure, and it's not clear what the solution eventually will be, other than a protracted death spiral.

 

[DeniseM]

Some people buy off-season weeks because they can travel off-season, but many people buy off-season weeks because those weeks have a cheaper purchase price. If that's true, and I think it is, then those same folks may be less likely to be able to pay their maintenance fees if they have a down-turn in their personal finances, because they have less resources to deal with a financial crisis.

Right now, with 3 of the resorts I own (Starwood) we have had several hundred dollars added to our 2010 MF's to cover the MF's of people who are in default. Timeshare sales tactics are based on putting tremendous pressure on people to to buy a timeshare, whether it is a sound financial decision for the buyer or not. They sell the dream to starry eyed vacationers and then offer payment plans with outrageous interest. They just want to make the sale - they don't care if the person can afford it or not. Timeshare owners are now reaping the results of that practice. I don't know what the answer it.

 

[Carolinian]

At the point they get them, these are short shelf life inventory, which in the leisure travel industry is distressed and devalued inventory. The fact that it may have had a much higher value when it had a longer shelf life has at that point become irrelevent. At the juncture these exchangers get them, it is an equal trade. The market has spoken as to their real value because they are still sitting on the shelf.

Late deposits also have much reduced trading power for the depositor for the very same reason.

I know we've gone back and forth on this question before but I am seriously interested in your take. IF the owners of those low value blue weeks are able to snag better value weeks, thus giving them a value for their fees and propping up the resort, what happens to the week THEY deposit? Who wants to cover the costs of that? Where does the "value" come from? RCI (or II, or the owners of the resort that the snagged week came from - whoever) don't owe that owner or that resort a vaue above what they or the system gets in return. It appears that the chain dies with that poor value blue week deposit and trade up - someone is left with a worthless week in this situation. How is that fair, who is supposed to eat that expense and what happens to the unwanted week that now sits there with no interest as trade, use or rental? To my eye it is the responsibility of the resort/owner at the head of the problem to find a value not third parties. What do you think the answer is?

 

[rickandcindy23]

Brian, no one says it is RCI's problem. What I am saying is that 45 days out, it would be nice to have some choices that aren't there at one year out, like we could get just 10-15 years ago. I was able to get Point at Poipu, Kauai, in June of 2000 with a blue week at 45 days out. I entered a request, and RCI fulfilled it at 45 days, almost to the day. I could never get that again, unless it was two weeks before the date (maybe less). At that time, we only owned one blue week that exchanged through RCI, and we also traded into Paniolo Greens with a blue week that same year, June of 2000, months ahead of check-in.

We were so pleased with our blue weeks. Our luck ran out, but I was a naive timeshare owner back then, because it all worked so well, I didn't see any problem with owning a blue week. My experience is much like many owners have experienced: an obvious drop in trading power that only allows you something great at 20 days or less. 45 days is much easier to get great airfare. 20 days or less, not so easy.

45 days is not ridiculous for RCI to loosen inventory, and it used to work very well. Actually, if I were honest, blue weeks do get good stuff in Orlando, even at two years out, so that is how I use our weeks, but when it comes right down to it, RCI rents, very cheaply, those same weeks I can pull. The last-minute rentals are much less than our MF's, so I have a problem with that, too. Why rent those weeks so cheaply? Makes me sick.

Their rental program cheapens what we own. :annoyed:

 

[Carolinian]

What has happened is that these resorts relied on RCI's longtime business model with the 45 day window in sustaining their own business model. The new RCI has now kicked the financial props out from under them by a very significant change in their own model. RCI does, indeed, bear responsibility in this since their own promotional materials that they provided for years to developers promoted the concept of buying an off season week to trade in the 45 day window. The developers were only telling customers what RCI was telling them.

As to what the weeks are worth, RCI has also substantially depressed this by their new business plan that floods the market with cheap rentals and further reduces the value of these weeks. RCI Rentals also destroy the exclusivity of their old ownership / exchange model. In the old days to use a timeshare, one essentially had to own a timeshare, which made the off season weeks more marketable.

As to seasonality, many ''red all year'' areas may be whistling past the graveyard on this issue as they are far more seasonal than those red designations seem to show. The European version of the RCI directory availibility tables for ''red all year'' areas like FLorida and the Canary Islands show that in reality both areas are in fact highly seasonal, for instance.

HOA's need to not be caught napping on this issue. They need to identify markets for own to use buyers for the off season weeks, and in many areas, such markets can be developed. They also need to start migrating their owners who exchange to other exchange companies who do not cut the throats of their affiliated resorts with these rental programs.

The percentage of owners who exchange also has a lot to do with the vulnerability of the resort. On the OBX, this percentage is around 30% in the offseason. Managers at resorts I have traded into in Germany and France have told me that their percentage of exchangers is significantly below that level, while one in the UK said it had been about 50% but was falling.

Fundamentally, highly-seasonal resorts with fixed per-week fees have a real problem. If the low-season owners are forced to pay more per week than the weeks are "worth", they will increasingly abandon their ownerships. That raises fees (due to uncollectable debt), tipping the balance for even more off-season owners, and so on. As a concrete example, one of my (seasonal) resorts raised fees by 15% this year---largely because of increases in uncollectable MFs.

I don't see why it is RCI's job to solve this problem for these resorts.

Some highly-seasonal resorts have creative ways to deal with this. For example, many Michigan resorts appear to have been sold in "blocks" of time, with multiple weeks on the deed---e.g. one red, two white, one blue. Each owner pays fees based on four weeks owned, but is forced to carry a mix of weeks so that overall value is maintained.

Pure points systems (e.g. Wyndham UDI deeds) have another way around it---and they do charge based on value of time, not on proportion of costs. MFs are charged on a per-point basis. High weeks require more points to book than low weeks. Bingo---costs are charged based on value, not on a strict per-week division of costs.

Unfortunately, for resorts that are already fully sold, neither of these is going to work. It's a hard problem, for sure, and it's not clear what the solution eventually will be, other than a protracted death spiral.

 

[timeos2]

Fair enough once but what if its every year?

At the point they get them, these are short shelf life inventory, which in the leisure travel industry is distressed and devalued inventory. The fact that it may have had a much higher value when it had a longer shelf life has at that point become irrelevent. At the juncture these exchangers get them, it is an equal trade. The market has spoken as to their real value because they are still sitting on the shelf.

Late deposits also have much reduced trading power for the depositor for the very same reason.

I will agree with that but it doesn't answer the underlying problem/question. The more valuable time that is being taken had an extraordinary set of circumstances to become "equal". It may not happen again. Every year those poor value weeks are still poor value weeks no one wants - why should other resorts & systems give them a value that the home resort refuses to do?

 

[rickandcindy23]

I will agree with that but it doesn't answer the underlying problem/question. The more valuable time that is being taken had an extraordinary set of circumstances to become "equal". It may not happen again. Every year those poor value weeks are still poor value weeks no one wants - why should other resorts & systems give them a value that the home resort refuses to do?

What are you saying, John? The resorts cannot give low season weeks more value. What do you expect the HOA and management to do that will make our off-season weeks have more value? Almost all resort areas have a low season.

Don't use Orlando as an example, because you know RCI rents those off-season weeks for less than $200 for a 2 bedroom week. I resent that someone else gets the same thing I get for exchange, and all they have to pay is $200.

I am trying to give away my blue weeks, so I can take advantage of low-season weeks through RCI points.

 

[Carolinian]

I will agree with that but it doesn't answer the underlying problem/question. The more valuable time that is being taken had an extraordinary set of circumstances to become "equal". It may not happen again. Every year those poor value weeks are still poor value weeks no one wants - why should other resorts & systems give them a value that the home resort refuses to do?

It is not the home resort that gives weeks a value. It is supply and demand in the exchange system. And a short shelf life week is at that point in a similar situation as to value with a blue week that is still 6 months or a year away.

With fly-to destinations, the impact of short shelf life can be even more massive, because a few weeks before use date, the airfares to go to those destinations can be prohibitive. Red all year destinations like Hawaii and the Caribbean would be examples here. A drive-to off season week that is still 6 months or a year away may indeed have far more value.

 

["Roger"]

I guess if we are expected to go to war over this issue, someone needs to explain why RCI and only RCI has an obligation to support blue week owners. II has no special program for them. The independents have no special program for them. (SFX won't even take their weeks. Yes, I know that a blue week in London might qualify, but you know those are not the weeks at issue here.) So why RCI alone?

 

[bnoble]

Their rental program cheapens what we own.

You could also say that you never owned much of value to begin with, but---for a time---RCI allowed you to trade your weeks for something with more value.

Again, it's not RCI's job to turn blue weeks into something someone wants. Even if they happened to provide this service more readily before, there is no reason why they should still do so unless it suits their own purposes.

 

[rickandcindy23]

I guess if we are expected to go to war over this issue, someone needs to explain why RCI and only RCI has an obligation to support blue week owners. II has no special program for them. The independents have no special program for them. (SFX won't even take their weeks. Yes, I know that a blue week in London might qualify, but you know those are not the weeks at issue here.) So why RCI alone?

But Roger, II does have a great last-minute exchange program. It's very easy to get something within 60 days through II, including very prime Hawaii weeks, with just a "green week" deposit. RCI is alone in the complaints, because they don't do this anymore. The exchanges were always great with RCI, until their rental program got in the way. I didn't care about Hawaii a year out with blue weeks, but I would like the opportunity at 45 days. Better yet, match II's 60 days.

 

[timeos2]

It has to be done correctly

What are you saying, John? The resorts cannot give low season weeks more value. What do you expect the HOA and management to do that will make our off-season weeks have more value? Almost all resort areas have a low season.

Don't use Orlando as an example, because you know RCI rents those off-season weeks for less than $200 for a 2 bedroom week. I resent that someone else gets the same thing I get for exchange, and all they have to pay is $200.

I am trying to give away my blue weeks, so I can take advantage of low-season weeks through RCI points.

Actually they can but it isn't easy. (And I'm excluding Orlando and other areas that may have periods with down demand but always have at least a good amount of demand - they are not the problem). As already mentioned some states unfortunately require equal fees for each week so step one is to split time up or combine it so it isn't all one week to avoid those rules. Points systems can do that or RTU use models where a value is assigned rather than a straight week - anything to get a different value assigned so fees can be proportional to use/trade value.

There are some great examples of this in the Northeast I'm aware of as well as some well known resorts that have utilized RCI Points to accomplish that goal. It doesn't require points - RCI or anyone elses - but it does require effort by the resort to make things attractive to ALL owners not just those lucky or smart enough to have purchased the top demand times. I know there is a reluctance by those top owners to make changes as they currently get effectively subsidized by the poor weeks but if they look long term they are going to pay anyway OR the resort is going to go into a death spiral as fees rise and those low time owners stop paying.

It is my opinion that seasonal resorts have to act to protect themselves not depend on others to save them. Even if RCI was/is to blame, and I don't agree that they are with the exception of the horrible undercutting of rental values they should not be allowed to do with free inventory, it is still the resort Board and owners that have to take steps to maintain value for all owners or suffer the consequences. It's past the point where RCI rules and policies are going to be changed back even if it was felt the old model was sustainable - now we have to deal with things as they are today and save our resorts by treating all owners to a fair use value for the money they pay.

 

[Carolinian]

There is another, rapidly disappearing group, that as owned these weeks. This is the well off retirees who can travel on short notice. I think of three owners at the resort where I was on the board who owned 4 to 6 off season weeks each and traded them. One, whose main residence was in the Northeast, was fairly active in the HOA since he owned a whole ownership condo elsewhere on the OBX, which is where he stayed when he was in the area. He put his toe in the water with a couple of off season t/s weeks, trading in the 45 day window, found it worked well, and ended up with 6 such weeks at our resort and another 6 at other OBX resorts. When the 45 day window first started degrading, he picked up on it and started disposing of weeks at our resort and at the others. Fortunately he sold or gave them away to others, so at least our resort still had new owners for those weeks. Another in the same category with 4 weeks sold or gave away a couple of them and deeded the others back shortly thereafter. The third person in this category, who lives of the west coast and bought his 4 weeks at the same time through a broker, has had them on the market for seveal years, as a group and at too high a price.

The 45 day window does not work like it used to for these people and they are bailing out. No membership fees or exchange fees for RCI and no m/f in some cases for the HOA.

Some people buy off-season weeks because they can travel off-season, but many people buy off-season weeks because those weeks have a cheaper purchase price. If that's true, and I think it is, then those same folks may be less likely to be able to pay their maintenance fees if they have a down-turn in their personal finances, because they have less resources to deal with a financial crisis.

Right now, with 3 of the resorts I own (Starwood) we have had several hundred dollars added to our 2010 MF's to cover the MF's of people who are in default. Timeshare sales tactics are based on putting tremendous pressure on people to to buy a timeshare, whether it is a sound financial decision for the buyer or not. They sell the dream to starry eyed vacationers and then offer payment plans with outrageous interest. They just want to make the sale - they don't care if the person can afford it or not. Timeshare owners are now reaping the results of that practice. I don't know what the answer it.

 

[rickandcindy23]

You could also say that you never owned much of value to begin with, but---for a time---RCI allowed you to trade your weeks for something with more value.

Again, it's not RCI's job to turn blue weeks into something someone wants. Even if they happened to provide this service more readily before, there is no reason why they should still do so unless it suits their own purposes.

We've owned our week for 25+ years and it worked for a good long time, as we were promised on the sales tour. Why is it that RCI changes its business model and we lose what value we had in those weeks? RCI is hurting timeshare, and we have owners who want to bail on their blue weeks.

The same could be said for recent, even more drastic drops in trading power of our red weeks.