Why do resorts Affiate with ANY Exchange Company?

[jlwquilter]

This has probably been asked before - if so, just direct me to the thread. ok?

If not, I am curious as to why resorts affliate with RCI or II? Or both? Or neither? There are plenty of resorts in all of those buckets.

Who picks what, if any, exchange company is chosen? Developer? HOA? Managment company?

How easy is it to have an affiliation added or removed?

I ask in particular because of all the threads I've recently read about RCI's possible implosion. I think - so what? My resort will go with another company then.... or not... I am sure it's more complicated than that though, as sure as shootin', there's $$$ at stake somewhere!

Enlighten me!

 

[timeos2]

It is a part of the development

Almost every resort affiliates with an exchange company when it is new because being able to sell the ability to NOT use the resort you are being sold is considered important by developers. Especially in areas where there are long stretches each year when people simply don't want to be in that area - usually due to weather considerations. Both RCI & II put a cluase in their boilerplate contract that says they will be the exclusive provider. Of course that can be struck out and they'd say "OK" but most developers don't bother to do that. Later in the life of the resort when, hopefully, the true owners take control and the first affiliation period runs out it is easy to add the other company to the list. Again watch out for the exclusive paragraph and remove it. If the developer stays in control most likely they will simply renew with the original group and ignore any others.

And you are correct if you buy timeshare for the right reasons - to use - you have no real need for exchange companies. If you plan strictly to exchaneg then neither II or RCI affiliation is the answer. he mini-systems and their ties to RCI/II are a much better approach if you are buying to trade.

 

[T_R_Oglodyte]

Developers affiliate with exchange companies. Since there is no sense in them affiliating with two exchange companies, they will pick one or the other. Which one they pick is a business decision by the developer.

When the developer builds a resort, the developer, includes exchange company memberships in the sale because the exchanging benefits are part of the sale. So the developer affiliates the resort with the same exchange company the developer is affiliated with - wouldn't work any other way.

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It sometimes happens that a developer switches affiliation from RCI to II or vice versa. When that happens, all of the resorts where the developer still has active sales will also affiliated with the developers new exchange company - again it has to go that way since the developer can only sell memberships in the company it is affiliated.

But in these cases the resort does not drop it's old affiliation - it still has all of those prior owners who are members of the original exchange company. So the resort winds up being dual affiliated.

 

[Mel]

To add to Steve's comments, it also depends on what type of resort it is. If it's a deeded resort, you can use any exchange company that agrees to accept your week. If you have a club membership, you may be restricted to whoever the resort agrees to deposit with. You can often still use one of the smaller exchange companies, but your resort may try to make things difficult.

The advantage to the developer/resort, is that with affiliation comes a promise to accept ALL deposits from those resorts. In order for RCI to get prime weeks on Cape Cod, they have agreed to handle exchanges for the off-season owners as well. If you look into some of the smaller exchange companies, they cherry pick. Some accept all deposits, but more are more restrictive in what they will accept - don't expect to deposit a February week in Cape Cod into SFX, but they will gladly accept a July week. If the resorts didn't have an affiliation agreement with an exchange company, the owners of those February weeks would have a hard time exchanging their weeks, even just for similar off-season weeks at other resorts.

 

[Carolinian]

The majority of independent exchange companies accept any week. SFX, and to a lesser extent, HTSE, are exceptions not the rule in that regard. It is not accurate to characterize all independents as ''cherry picking'' based on the policies of one or two.

 

[JLB]

I'm not sure if it has been said, cuz I'm too lazy to read, but, of course, in order for a resort's owners to use an exchange company they have to be affiliated in some way. Even the independents have to approve of deposits from a resort, a form of affiliating with that resort.

In the case of our home resort, which is way passed developer phase, they are affiliated in order to enhance the value of the resort to it's owners.

 

["Roger"]

I am all for increased competition and, with that, am happy to see the independents. Still, if a resort were not affilitated with RCI or II, almost no one would know of its existence. The independents let RCI and II publicize the pictures and descriptions for prospective traders to consult. This is one way that the independents save on costs. On the other side of the coin, a resort almost has to be pictured by one of these companies if it expects to garner any trading power.

 

[jlwquilter]

Thanks everyone - I've got a better understanding of the underlying reason why resorts affliate.

 

[JLB]

The underlying reason for just about everything in the industry is $.

Thanks everyone - I've got a better understanding of the underlying reason why resorts affliate.