What's wrong with Timeshares and can the industry survive these issues?

[jp10558]

There are some important considerations in the debate over the value of VIP benefits in timeshare or point-based ownership programs like Wyndham.
Stripping of VIP Benefits:

1. Stripping of VIP Benefits:
   • VIP perks ( discounts, or upgrades) are often used as a strong selling point during presentations by developers. Removing these benefits from resale purchases creates a perceived loss of value for secondary market buyers. Especially if it is there first rodeo with resale.

I don't see it as stripping of anything though. The VIP levels are based on your account, not on any contract. They never were attached to a contract. That's different from say Westgate or some other ones where the contract / week itself loses floating or trade ability. However, this is subjective in the case if you had a single contract that would via retail get you VIP benefits.

However, I tend to think most people buying for the first time don't know about resale at all. Those who do know about resale, I kind of doubt the math ever works out for them where the perks are worth paying retail. At least if they were ever considering resale to save money, the perks just aren't epic enough to make up for tens of thousands of dollars up front. I personally think if they allowed resale to get VIP still, it overall wouldn't make any difference to their retail sales - especially as they've cracked down on rental businesses. VIP always seemed to me to be basically 0 cost to the developer "sweeteners" on a retail deal. It's like getting "winter floor mats thrown in" on a new car purchase. It's a marginal effect at best IMO.

1. Impact on Resale Value:
   • Owners who invested significant sums ($50,000–$200,000) to achieve VIP status may feel cheated when they realize that resale buyers won’t benefit from those perks. This restriction diminishes the marketability and resale value of their ownership, as potential buyers are less inclined to pay premium prices for stripped-down packages. In fact, most are given away.

Maybe - but again it's marginal at best in the current situation. The resale prices are close to 0 because there's such a huge supply vs demand resale. I'm thinking about something like the Helios 44-2 lenses - technically the earlier ones were subtly to more obviously better lenses, but in 2014 or so there were tens of thousands floating around still in working order, but like hundreds of people who knew about them, wanted them, and could use them on a camera they had. The price difference was tiny, and all went for like $30 or so. That didn't change till a couple things happened - Youtubers made them popular, and Mirrorless cameras came out with wide use where you could actually adapt the lenses easily. Even now, the price difference for the "perk" of being an earlier model / specific factory is like $20 on a $100ish purchase. Maybe VIP would add 20% on a resale contract, but when the contracts that go for positive values still top out around $1500 or so, that's not really a big difference IMO.

1. Psychological Effect on Buyers:
   • For new buyers who attend developer presentations, the emphasis on VIP benefits and the promise of achieving higher statuses through additional purchases creates a sense of exclusivity and progression. This creates a contrast with resale, where such benefits aren’t included, making the developer product seem more appealing—even if the practical value of VIP perks doesn’t justify the cost difference.
2. Illusion of a Different Product:
   • The distinction between developer-sold and resale purchases is largely an illusion created by the exclusion of benefits like VIP eligibility. Fundamentally, the points themselves function the same way, but the perception of a “lesser” product keeps resale purchases much less competitive.
3. Tactics to Retain Buyers:
   • Developers often use bonus points or other incentives to make buyers feel like they’re gaining more than just ownership—they’re entering an elite club. This strategy reduces the appeal of the resale market, as new buyers may see resale as a step away from the VIP status they’re encouraged to aspire to.

Broader Implications:​

• Resale Buyers’ Perspective: Savvy buyers know the real value lies in the use of points, not the VIP status. It would take an insane number of upgrades and point discounts to justify the tens of thousands of dollars spent to by developer. However, they may face challenges in justifying purchases to themselves or others without the included perks, especially when the illusion of exclusivity looms large.
• Developer Strategy: By making VIP non-transferable, developers retain more control over the market and disincentivize owners from reselling, ensuring new buyers come through them rather than the secondary market.

If you’re navigating this space as an owner or buyer, it’s critical to weigh the true value of VIP benefits against the cost and to educate others about the practical utility of points versus the perceived prestige of VIP status.

All the rest is normal marketing smoke and mirrors. I find the timeshare world "exclusive" in that most people don't know about the resorts and never even know how to stay at one. That's changed a bit with the hotel points systems and hotel sites renting nights like a standard hotel, but most people still see those points values or dollar values as "a lot more money" than the average hotel "for what" as it were.