The TravelGuy Approved Cost-Per-Night Summary!

I think you need to factor in occupancy rate into cost. If the average occupancy is 70% across the industry, then for every person who uses 100% of their alloted days, there is someone who uses only 40%. If you don't adjust for actual usage or occupancy rate, then you are deluding yourself in terms of how low your costs really are relative to renting the same accommodations with cash on demand.

I also like the idea of adding in the equity expectation. Assuming zero is too conservative.

You should also include an inflation rate for maintenance fees.

And, 5% isn't a true opportunity cost. That's the rate you would lose if you had your money in a money market account or treasury bills over the 10 year planning horizon. I doubt that people with $200k in excess cash would just let it sit there in a money market account over 10 years. Paying off your mortgage would yield a better return. Cost of capital is a more realistic amount to use. Because that would be comparing it to the equivalent rental rate. But, you can use your whatever number you want.

You also need to forecast rental rate increases. Those increases would make your comparison more favorable.

Of course, my model allows you to compare the option of investing your cash and simply renting accommodations in Million dollar homes. If you don't want to allow that in your comparison, then your model is sufficient in comparing the alternatives.

Methodology, Monks and Maui, oh my!

Interesting thoughts on the methodology to determine factors for Equity, Rentals, Quality of properties, etc. It appears that we can quantify most, if not all, of these and add them to the CPN spreadsheet for DC comparison. I have some ideas but don't have time to get into them right now. I also need to update the new HCC programs and might throw in data on the PE/UR post-merger pricing.

The scribing Monks and I are off to the airport for an all day flight from the East Coast to the HCC Maui property and two-weeks in Paradise! The Monks thing we're headed to Munich for Oktoberfest but they won't mind as long as they can imbibe in some fruity cocktails.

In a day or two (depending on jet lag and imbibe "fatigue") I'll update the board on my ideas to update the TravelGuy approved CPN spreadsheet. Once updated, I'll get it to Super-Mod Brian to see if we can get the spreadsheet to the masses.

Gotta go, wife #1 says we gotta round up the Scribing Monks and get the airport!

The scribing Monks and I are off to the airport for an all day flight from the East Coast to the HCC Maui property and two-weeks in Paradise!

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Have a fabulous time!

BTW, is the HCC Maui property an exception to the 1 week occupancy rule, or are you staying there 1 week and somewhere else the other week?

Several people here have stated how much they like the unlimited usage that comes with their purchase. No vacation club model will function with owners getting unlimited usage. Eventually all the weeks will fill up with owners and no extra weeks will be available unless some people don't utilize what they own. If you buy a 1 million dollar home and 13 owners get 4 weeks each (leaving none open for maintenance) it will take an investment of $76,923 per member to purchase it. Where are the unlimited weeks? If you are paying less than $77,000 to join the club can only be buying locations by financing using your money as a down payment. This is an even scarier scenario because you are now financially obligated to the loans on all new properties they purchase.

Also there is the inherent risk in these ventures. If the vacation club is run poorly it can go broke and file Bankruptcy. If sales become slow or non-existent the Vacation Clubs will not continue to acquire new properties and might even walk away all together if they are no longer making money. If the joining fees and annual fees keep increasing to the point at which no new owners want to buy, then the moneyback guarantee is useless. The 100% or 80% buyback is only good after they sell 2 ,then they buy one back. If hundreds of owners want to sell and very few people are buying then you will never get your refund and be obligated to pay the yearly fees until death or foreclosure.

These are new concepts and only time will tell how much (if anything) they will be worth in the future. Remember in the 70's and 80's everyone was told that by buying timeshares you were locking in a lifetime of vacations at the prices of the 70's and 80's. We now know that wasn't true becuase maintenance fees keep rising and assessments are common. The vacation clubs are hot now, but if they cool off or die out, the lost investment will be much more than was lost by purchasing timeshares from developers. When these start being sold cheaply on e-bay by people who can't get out and are tired of paying fees you will know that the bubble has burst.

There are very few places in the world where I can't stay in luxurious accomodations (by doing a little internet research) for $300 a night or less with no investment risk required. I think the ability to stay in nice accomodations does not outweigh the huge investment and risk required. Take your favorite Vacation Club locations and call or google to inquire about homes for rent in those areas. For example a 5 bed room 4 bath house on the ocean with private pool in Gulf Shores Alabama goes for about $1500 a week from labor day till spring break if you negotiate a little. There are so many houses on golf courses in Hilton Head that many times you can get someone to really come down on the price if you look a little, especially in the off season. I have a friend who rents a month in October in a $1,000,000 oceanfront 3 bed room 2 bath condo with indoor and outdoor pools at Orange Beach Alabama for $1400 for the whole month.

For 4 weeks vacation a year I can purchase 4 timeshares for $6000 or less and my annual MF's will be less than $2500 a year with the ability to trade for anywhere in the world. I won't have 3 or 4 bedrooms, but I will stay on the beach and not a short drive from the beach. I will consider Vacation clubs when they go resale and get cheap.

outside of Asia and South America, you would be hard pressed to find a luxury villa for ~$300/nt. in such areas, you can also get incredible properties for ~$600+.

i was looking at beachfront properties (detached single family) on the east coast for the end of this past summer, and the lowest weekly rates i recall seeing were ~$1500.

unlimited use is controlled by limiting advanced reservations. ciel allows the most advanced reservations, 7 or 9, depending on plan, BUT the farthest out is 1 year.

also, vacation club = TS rental broker. destination club = owns portfolio of mid>high end properties which can be used by members.

IMHO there is no comparison between TS and destination clubs whatsoever. the comparison would be between high end fractional ownership and destination clubs. http://www.heliumreport.com/ul/images/v1/destination-club-analytic.jpg

me and my opinions >
http://www.tugbbs.com/forums/showpost.php?p=409643&postcount=27

tombo said:

I will consider Vacation clubs when they go resale and get cheap.

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tombo

There are so MANY inaccurate statements in your post, I don't even know where to begin and feel it is probably a waste of time point out the many mistakes.

Please read the many excellent DC threads on this forum before posting such misinformation again.

Bill
Moderator

vineyarder said:

Have a fabulous time!

BTW, is the HCC Maui property an exception to the 1 week occupancy rule, or are you staying there 1 week and somewhere else the other week?

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I'm writing this on the patio of the High Country Club Maui property. After 13 hours of flying to get here, I've "recovered" with several hours of Nascar and NFL. It's weird to have a race start at 7:30am.

I'd like to stay 2 consecutive weeks at the High Country Club Wailea property but that's against the rules. We are moving to a timeshare for the second week. This will be the third time we've done a HCC + Timeshare two week trip. It will be interesting to see if there is as much of a letdown to go to the timeshare for the second week as we've experienced the first two trips.

More later. I need to "recover" from the morning race and football games with several hours of beach therapy.

Doug

Have a great time in Maui...I want to see a review and photos. My next HCC trip is Stowe for New Year Week.

I have a friend who rents a month in October in a $100,000 oceanfront 3 bed room 2 bath condo with indoor and outdoor plumbing at Orange Beach Alabama for $1400 for the whole month.

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OMG!!! Orange Beach Alabama!!! Isn't that where people from Cashiers NC go on their honeymoon? Wow - that is definately a bargain at half the price!! I doubt that Exclusive Resorts, PE, HCC or any of the Destination Clubs will ever manage to get a place there!! Oh well... I guess I'll drown my sorrows in Tucsany, Cabo, Turks & Caicos, Abaco, Punta Cana, Cap Cana and all those other second tier desinations while the aristocracy are partying away in Orange Rind Alabama...

Seriously, though, I had assumed that this post from from "tombo" was a satirical post from Steamboat Bill, until I saw his response... (? TOMBO = The Only Moderator Boca Ordered?)... But maybe he responded in order to make us THINK that it WASN'T him being funny....

vineyarder said:

Seriously, though, I had assumed that this post from from "tombo" was a satirical post from Steamboat Bill, until I saw his response... (? TOMBO = The Only Moderator Boca Ordered?)... But maybe he responded in order to make us THINK that it WASN'T him being funny....

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That is pretty funny...I am definitely NOT tombo.

I find some of his posts 100% incorrect and glad other TUGers agree with me on this.

I have no problems with people who post that they would never join a DC or buy a $15,000 timeshare (in their own personal opinion), but I get upset when they post false assumptions as facts.