Why would anyone buy?

[TolmiePeak]

we are both the kind of people who, having paid for something, are damn-well going to use it.

I think this is a very good overlooked point for people who have trouble making a decision to take a vacation. Having a timeshare makes that decision far easier.

 

[ScoopKona]

I wasn't specifically referring to timeshares just David's example if two equivalent diamond rings were available in a traditional jewelry store for $30k and at Costco for $15k. The Costco purchase would be a no brainer in that situation. Obviously you would get better/more personal service at a jewelry store but that isn't worth $15k.

But that's not what's being compared.
Why did people buy from developers in the first place? Because in many (but not most) cases, the numbers worked. The original ski resorts in Europe started this train rolling because selling a reservation by the week for life was attractive for the people who bought them. The whole OPC, free-gift, song-and-dance came much, much later.

Here's a better example: Why would I pay six figures to own "for-life" dinner reservations at Rao's when I could buy a jar of Ragu and a box of spaghetti? It all boils down to perceived value, and actual value.

 

[cohenru]

I bought all my timeshares, except Vidanta and I am out of that money trap, on resale. Always buy resale, your initial investment is small. If you can, use your TS annually. Let's say you used it for 10 years and unfortunately you can no longer travel, then sell it cheaply on the resale market. You got 10 years of enjoyment, and in my opinion, that's worth it.

 

[davidvel]

But that's not what's being compared.
Why did people buy from developers in the first place? Because in many (but not most) cases, the numbers worked. The original ski resorts in Europe started this train rolling because selling a reservation by the week for life was attractive for the people who bought them. The whole OPC, free-gift, song-and-dance came much, much later.

Here's a better example: Why would I pay six figures to own "for-life" dinner reservations at Rao's when I could buy a jar of Ragu and a box of spaghetti? It all boils down to perceived value, and actual value.

Did you even read TolmiePeak's post? TolmiePeak was responding to the comparisons in my post, not what you wanted TolmiePeak to compare.

 

[jabberwocky]

Why would anyone buy from a regular retailer in that situation?

Because you get a little blue box with it = bonus points

 

[ScoopKona]

Always buy resale,

With a new development in a new location, resale isn't possible. There are no resales. And it takes time for people to age out and sell.

There are people plunking down fat stacks of cash to buy at Kaanapali Beach. There are other resorts there -- quite a few, in fact -- but demand for one resort is off the scale because of a mixture of quality and location. Lacking resale weeks, people can either 1) settle; 2) wait or 3) pay the developer price.

There are enough people choosing #3 to keep the business model going.

Don't get me wrong -- the business model for most timeshares is appalling. Ripping people off, selling them something which depreciates by 75%, 90%, even 100% the minute the rescission period ends is not a sustainable business model. It's why timeshares have an awful reputation. If it were up to me, there would be no gifts, no OPCs, no song-and-dance. Get rid of the game-show aspect of the business and let each resort stand or fall on its own merit. Some resorts would continue to thrive. Others wouldn't last a week.

 

[Mowogo]

I got into Timesharing because I attend CES and a two bedroom maintenance fee is less than I would pay attending the conference and staying at Excalibur. And for what I’m paying in maintenance fees, I can take that 2 bedroom and utilizing exchanging break it out to even more vacations. We had a wonderful contingent meeting up for the F1 race in Las Vegas where we were all paying significantly less for our elevated accommodations than people were paying for a NIGHT at Harrah’s. I’ve exchanged into Disney World for significantly less than staying off property in a hotel room. If you are observant and flexible, it is very easy to get outsize value with your exchanges.

If you are able to utilize Last Call vacations, then you get even more vacations at a fraction of the cost you can get for a hotel. Most of my trips to Vegas I’m paying $300-$330 for a week in a suite for less than the weekend at a Lower end strip resort. If you can enjoy the off season to a destination you can pay significantly less than you would pay for a hotel room.

 

[TolmiePeak]

Because you get a little blue box with it = bonus points

Yeah my daughter's college gave me a "free" baseball hat. I called it my "free" $120k baseball hat.

 

[Patri]

Ts are good if you want to spend a week in one place. If you are on the move, they are not the best choice.

 

[Mowogo]

Ts are good if you want to spend a week in one place. If you are on the move, they are not the best choice.

It really depends on which system you acquire into. If you are just trading weeks that can be an issue but points systems do allow much shorter stays.

 

[PigsDad]

Ts are good if you want to spend a week in one place. If you are on the move, they are not the best choice.

With the name-brand systems that are point-based, most of those owners are no longer tied to the week-long Sat-Sat stays any more. But you still need to be a planner to optimize your ownership.

Kurt

 

[Patri]

With the name-brand systems that are point-based, most of those owners are no longer tied to the week-long Sat-Sat stays any more. But you still need to be a planner to optimize your ownership.

Kurt

Of course, but multiple trade fees in a week add to the cost.

 

[PigsDad]

Of course, but multiple trade fees in a week add to the cost.

With my HGVC ownership, I have zero trade fees / reservation fees. I could make 20 different 3-night reservations and not pay a single fee (other than the use of my points).

Kurt

 

[LannyPC]

Why did people buy from developers in the first place? Because in many (but not most) cases, the numbers worked.

Yeah, if you believed the skewed facts and figures that the sales person drew up for you after you were held there for hours on end waiting for your "gift" and, hence, weren't thinking straight or rationally.

 

[ScoopKona]

Yeah, if you believed the skewed facts and figures that the sales person drew up for you after you were held there for hours on end waiting for your "gift" and, hence, weren't thinking straight or rationally.

I bought a week from myself. I have never attended a timeshare presentation. I've only given them. The numbers worked when I was selling them. And they still work today. Some places make financial sense. Most don't. But some do.

My timeshare has paid for itself dozens of times over. I've easily saved six figures over a lifetime compared to renting hotel rooms. It also got me on the real estate path, which ended with my wife and I retiring young to a farm in Hawaii.

It's the single best thing I've ever purchased.

 

[Hindsite]

Yeah, if you believed the skewed facts and figures that the sales person drew up for you after you were held there for hours on end waiting for your "gift" and, hence, weren't thinking straight or rationally.

We bought developer, took a day and a half to run the numbers vs what we were already paying for vacation lodging, projected costs including all fees every year and 10% year on year increases in everything and came out ahead after 10 years. Resale wasn't available as it was in construction and we covered our costs before resale existed. +20 years later we're only just at the budget level I set at purchase.
It worked for us, and that's all that counts.

 

[RunCat]

We bought developer, took a day and a half to run the numbers vs what we were already paying for vacation lodging, projected costs including all fees every year and 10% year on year increases in everything and came out ahead after 10 years. Resale wasn't available as it was in construction and we covered our costs before resale existed. +20 years later we're only just at the budget level I set at purchase.
It worked for us, and that's all that counts.

Agree with your assessment. My calculations show similar results: it takes 8-10 years to break-even vs hotel stays w/o accommodation equivalency. The numbers work faster if you buy resale. I did a quick back of the napkin comparison of the vacations our family is taking this year. Using retail numbers from hotel websites, we see about a 4:1 benefit compared to our MFs.

 

[ScoopKona]

We bought developer, took a day and a half to run the numbers vs what we were already paying for vacation lodging, projected costs including all fees every year and 10% year on year increases in everything and came out ahead after 10 years. Resale wasn't available as it was in construction and we covered our costs before resale existed. +20 years later we're only just at the budget level I set at purchase.

And depending on how the timeshare is used, positive ROI can be just a few years instead of a decade or more.

We were ahead about five years in -- trading one week for three or four.

 

[Fido Chuckwagon]

The numbers work faster if you buy resale.

I bought my first club Wyndham Bonnet Creek Contract for $700 on eBay including closing costs. It was enough points for a week and then some in a 2 bedroom during prime season, or 2 weeks and then some during low season. The annual dues that first year were less than $1800. I had previously booked a week through Wyndham’s official rental site for about $2200 during mid season, so I broke even immediately. You can break even very fast with resale.

 

[ScoopKona]

You can break even very fast with resale.

I agree completely. But I'd like to reiterate that in the prime locations, new resorts, where no resales are available, the numbers can work. (It's not guaranteed to work. And in most places it doesn't work. I'm not a cheerleader for timesharing. But timesharing done right is a win-win for everyone -- owners, developers, salespeople. That's how Hapimag (the first timeshare, Switzerland 1963) set the program up.)

The original concept was, "I want to come to this ski resort (or Maui, which was the first US timeshare), every year, the second week in January." Instead of being at the mercy of hotel reservations, random chance, and ever-present inflation, timeshares smoothed out the vacation budget.

It's why the concept became popular in the first place.

It wasn't until later that it became a game-show. Even today, there are resorts where people cheerfully plunk down tens of thousands. They buy from the developer because 1) there aren't better options like resale; and 2) they're spending the money anyway.

"We're spending the money anyway," has always been the best reason to own one of these toys. Even in a case like Aspen, with a family that visits every year to ski, timeshare isn't always the best answer. It takes a certain kind of personality for this to work. My own SWAG estimate is that 40% of the developed world could make use of a good timeshare and it's a great idea for about one in five families. Everyone else should stay far, far away from timeshares, timeshare presentations and anything to do with vacation ownership because they don't have the right temperament.

If developers only built in areas which make sense; and if we got rid of the prizes, OPCs, and ridiculous sales practices; timeshares wouldn't have the awful reputation they have today. That isn't going to happen because P.T. Barnum was right.

 

[dioxide45]

With my HGVC ownership, I have zero trade fees / reservation fees. I could make 20 different 3-night reservations and not pay a single fee (other than the use of my points).

Kurt

I thought HGVC had transaction fees for just about everything outside your home week?

 

[PigsDad]

I thought HGVC had transaction fees for just about everything outside your home week?

They used to, and many legacy members still pay reservation fees. But I am a Legacy Elite Premier member so I don't pay any fees. Plus, with the merger w/ Diamond, now any new retail member or any member who upgrades w/ HGV is automatically enrolled in their MAX program, which doesn't have any reservation fees as well.

Kurt

 

[LannyPC]

I bought a week from myself. I have never attended a timeshare presentation. I've only given them. The numbers worked when I was selling them. And they still work today. Some places make financial sense. Most don't. But some do.

My timeshare has paid for itself dozens of times over. I've easily saved six figures over a lifetime compared to renting hotel rooms. It also got me on the real estate path, which ended with my wife and I retiring young to a farm in Hawaii.

It's the single best thing I've ever purchased.

Yes, I agree that for some owners who bought from the developer, it can make good financial sense. It has been a good financial investment. But that applies to an elite few who have the means and liberty to travel frequently without having to "shoestring" it.

But as for the question you raised in post number 52 "Why did people buy from developers in the first place?" for the majority of people who did buy from developers, it's because, as you immediately answered "Because in many (but not most) cases, the numbers worked." But "the numbers worked" because, as I responded in post # 64 "Yeah, if you believed the skewed facts and figures that the sales person drew up for you after you were held there for hours on end waiting for your "gift" and, hence, weren't thinking straight or rationally."

I realize that this does not apply to everyone who bought from the developer, but probably the majority who did. That's probably why the OP brought up this question. It's possible that (s)he was one of those poor souls who believed the skewed facts and figures that the sales person brought up after being there for hours on end.

 

[ScoopKona]

I realize that this does not apply to everyone who bought from the developer, but probably the majority who did. That's probably why the OP brought up this question. It's possible that (s)he was one of those poor souls who believed the skewed facts and figures that the sales person brought up after being there for hours on end.

I have zero patience for people who don't do their homework.

The person who doesn't read enjoys no advantage over the person who can't read. Timeshares have been around since 1963. It's not like this is some secret society. Anyone could arm themselves with knowledge before purchasing one. I certainly did. I didn't buy one until I had seen -- for months -- that it worked exactly the way they said it did. Only then did I pull the trigger.

There were no resales available so I cheerfully bought one at MSRP. Up until a couple months ago, it worked precisely the way the sales literature said it worked. Even after Marriott nerfed the program, it's still considerably better than renting hotel rooms. It's less-great than it was when I bought it. But it's still better than hotels-dot-com or AirBnb.

I have said many times that I can't stand the game-show aspect of modern timeshares. It's a bad business model. But it's great at hooking suckers. (P.T. Barnum would be ecstatic.) This allows developers to build timeshares in places which have no business having timeshares and selling to low-information, functionally-illiterate people who are there for some freebies.

I don't wish ill upon these people. But they bring timeshare misery upon themselves. Again, this is no big secret. A thimbleful of research would fix a multitude of problems.

 

[davidvel]

I have zero patience for people who don't do their homework.

The person who doesn't read enjoys no advantage over the person who can't read. Timeshares have been around since 1963. It's not like this is some secret society. Anyone could arm themselves with knowledge before purchasing one. I certainly did. I didn't buy one until I had seen -- for months -- that it worked exactly the way they said it did. Only then did I pull the trigger.

There were no resales available so I cheerfully bought one at MSRP. Up until a couple months ago, it worked precisely the way the sales literature said it worked. Even after Marriott nerfed the program, it's still considerably better than renting hotel rooms. It's less-great than it was when I bought it. But it's still better than hotels-dot-com or AirBnb.

I have said many times that I can't stand the game-show aspect of modern timeshares. It's a bad business model. But it's great at hooking suckers. (P.T. Barnum would be ecstatic.) This allows developers to build timeshares in places which have no business having timeshares and selling to low-information, functionally-illiterate people who are there for some freebies.

I don't wish ill upon these people. But they bring timeshare misery upon themselves. Again, this is no big secret. A thimbleful of research would fix a multitude of problems.

All of this from a timeshare salesman himself. Its all the buyer's fault, not the scum salesman that misrepresented the numbers and difficulties in booking, etc. YOU cheerfully bought from YOURSELF, likely at some company discount, or at least earning a commission on your purchase. More TS salesperson smoke and mirrors.

I am sure you hooked plenty of "low-information, functionally-illiterate... suckers"; not sure if not enough so you got out. What a disgusting thing to say, but not surprising from a former TS sales****.