The case for resorts bulk banking

It's been debated about resorts allowing owners to book and bank their own weeks for exchange vs the resorts cutting a deal with exchange companies and bulk banking weeks, giving them a variety of weeks and all owners wishing to exchange having equal trade power. Yesterday this came full circle for us.

At exactly 09:00, when the reservations lines opened, we called to reserve a week at our home resort. We were caller 118 and I was on hold for 30 minutes, only to be told there was no availability.

Today I looked online and guess what, I can easily trade back into my home resort. Owners were calling not to stay at their home resort, but to reserve the highest demand weeks, just for perceived exchange power. In fact I'm sitting in that very resort typing this as an exchanger, not an owner staying on their home week.

With some of our other systems, we have points based reservations and the resorts control the inventory. They give the exchange companies a fixed amount of weeks of a certain value and the points have a fixed exchange value. I have never had an issue reserving a week at those home resorts.

Now we purchased at this resort to stay at this resort. Unfortunately, the way things are, if I'm not one of the very first callers when inventory is released, I'm out of luck. I believe I've come full circle and now understand and support bulk banking by resort management. Owners should have the best opportunity to use the highest demand weeks at their home resort, otherwise, why own there at all?

dougp26364 said:

It's been debated about resorts allowing owners to book and bank their own weeks for exchange vs the resorts cutting a deal with exchange companies and bulk banking weeks, giving them a variety of weeks and all owners wishing to exchange having equal trade power. Yesterday this came full circle for us.

At exactly 09:00, when the reservations lines opened, we called to reserve a week at our home resort. We were caller 118 and I was on hold for 30 minutes, only to be told there was no availability.

Today I looked online and guess what, I can easily trade back into my home resort. Owners were calling not to stay at their home resort, but to reserve the highest demand weeks, just for perceived exchange power. In fact I'm sitting in that very resort on an exchange, not a home week.

With some of our other systems, we have points based reservations and the resorts control the inventory. They give the exchange companies a fixes amount of weeks of a certain value and the points have a fixed exchange value. I have never had an issue reserving a week at those home resorts.

Now we purchased at this resort to stay at this resort. Unfortunately, the way things are, if I'm not one of the very first callers when inventory is released, I'm out of luck. I believe I've come full circle and now understand and support bulk banking by resort management. Owners should have the best opportunity to use the highest demand weeks at their home resort, otherwise, why own there at all?

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I think this is why resorts go to points and/or take over the control of picking the weeks for deposit. They don't want to deal with the complaints from owners wanting to book to use who can't because all of the owners that book to deposit for perceived trade power.

The problem when the developer takes over control is that it swings almost 180 degrees in that they never deposit any high demand weeks and all that shows up in II is the low season weeks. Comparing Starwood and Marriott (before DC and even some now), you see very few if any high season Starwood units, but a fair number of Marriott's in high season. Though many still get snapped up by ongoing searches.

I suspect however that a lot of the people booking the ubber prime weeks won't ever need that trade power. I suspect that only about 5% of deposits are out of reach for all but the highest trade power deposits.

Of course, a drawback into getting back into your home resort via an exchange company is you have to pay the exchange fee.

Not to mention there are some resorts who prohibit owners from exchanging back into the home resort via the exchange company.

Bulk deposit are beneficial to those owners who don't plan ahead and want to deposit late in the game. (Or those who do plan ahead but intend to rent their week and don't get a rental, so try to deposit later.)

On the positive side, typically, bulk deposits maintain their trade value as of the date the resort deposits, regardless of when the owner asks for a deposit from the bulk bank pool.

Why should someone who wants to stay at the resort have any priority over what I want to do with my owned week?


As an owner I expect to reserve the week I choose, as long as I'm one of the first callers, and then use that week any way I legally see fit.


If I bought the TS to exchange then I want the best value for my exchange, not an averaged out value.

csxjohn said:

Why should someone who wants to stay at the resort have any priority over what I want to do with my owned week?


As an owner I expect to reserve the week I choose, as long as I'm one of the first callers, and then use that week any way I legally see fit.


If I bought the TS to exchange then I want the best value for my exchange, not an averaged out value.

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Up until maybe a few years ago, I felt the same way. About the time we put our DRI units into a points based reservation system is when I started to turn. What happened was that the deeded weeks remained in a personal account and the points based system was in a corporate account. It allowed me to search using deposited high value weeks and search using points.

My theory was the "high" value weeks would greatly outperform the average exchange power of the points. I was WRONG. Not just wrong but wrong in a big way. The "high" value weeks came back with the same availability as the average value points. There was literally NO difference.

It's all about perception except in one aspect. Owners who own to stay often can't get into their own home resort during "high" season without either exchanging back in or putting the resort on speed dial and being on the phone 1 minute before the bell goes off.

muranojo said:

Of course, a drawback into getting back into your home resort via an exchange company is you have to pay the exchange fee.

Not to mention there are some resorts who prohibit owners from exchanging back into the home resort via the exchange company.

Bulk deposit are beneficial to those owners who don't plan ahead and want to deposit late in the game. (Or those who do plan ahead but intend to rent their week and don't get a rental, so try to deposit later.)

On the positive side, typically, bulk deposits maintain their trade value as of the date the resort deposits, regardless of when the owner asks for a deposit from the bulk bank pool.

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One other issue of trading back in would be unit location. Resorts often prioritize where to place guest based on how the week was obtained. Typically owners staying on their own time, renters who rented a specific view and exchangers. When you exchange back in, you may be lower on the totem pole as to preferred unit placement. We are experiencing that right now having exchanged back into our home resort.

I suspect however that a lot of the people booking the ubber prime weeks won't ever need that trade power. I suspect that only about 5% of deposits are out of reach for all but the highest trade power deposits.

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This is very true for II, but definitely not for RCI. With RCI's TPU system a prime deposit vs. a shoulder deposit within the same floating season could literally be double the trading power and since you can use TPUs to book multiple transactions it makes a huge difference.

All things considered, I can't imagine how anyone owning an RCI resort would ever be in favor of an exclusively bulk bank system. In many cases, it makes the week unsellable in the resale market.

What I never quite understood is why these resorts with floating deeds don't institute a policy with a preferred reservation period for direct stays only. Give owners within each season a 14 day period to reserve units for direct use only (and should a owner cancel later and ask to deposit, he/she would not have the ability to deposit the reserved prime week but would have to settle for a week selected by the management company - so no manipulating the system). After the 14 days, owners could then call and reserve whichever week they want (based on remaining availability) for deposit. Everyone would win that way.

It depends on your point of view. Some people believe that owners who are going to use their timeshare have more "right" to it, than owners who are going to deposit it, or rent it.

IMNSHO: The early bird should get the worm. YMMV

bonk2boy said:

...What I never quite understood is why these resorts with floating deeds don't institute a policy with a preferred reservation period for direct stays only. Give owners within each season a 14 day period to reserve units for direct use only (and should a owner cancel later and ask to deposit, he/she would not have the ability to deposit the reserved prime week but would have to settle for a week selected by the management company - so no manipulating the system). After the 14 days, owners could then call and reserve whichever week they want (based on remaining availability) for deposit. Everyone would win that way.

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This goes back to my main point.

Why should the person who bought to stay have priority over one who bought to exchange? The rules should be the same for both of us. Just because you want to stay in the place shouldn't give you any priority over me who wants to exchange.

I own a 3 Br. lock off at Summer Bay Resort. I paid to lock off the unit then reserved a 1br for Thanksgiving Week and a 2br for Christmas week. I am depositing both of them and getting 2 exchanges for each.

If the weeks were bulk banked for me I could not get the 2 for 1 deal at this time.

Again, if I can get on the phone and reserve those weeks why should someone who wants to occupy the unit get a jump on me??

We all buy for different reasons and I don't think a safety net should be put up for those who don't understand how to use their ownership or are too lazy to do what they need to do.(Where's the soap box icon that I will now get off?)

csxjohn said:

(Where's the soap box icon that I will now get off?)

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Here you go:


Kurt

PigsDad said:

Here you go:

Kurt

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I like it, we need it in our choices.

There's really no right or wrong way.

As to RCI and TPU's, on the surface I agree. The reality is I own with HGVC and they bulk bank and offer a level exchange rate, which works absolutely fine as far as I can tell. At least I'm not reading about a lot of unhappy HGVC owners or even DVC owners when it comes to RCI exchanges.

I'll still voice my opinion to the HOA and let them know what a disappointment it is for me to be a MF paying member yet have to literally exchange back into my home resort, the day after booking opens no less, just to stay in my season at my home resort.

bonk2boy said:

What I never quite understood is why these resorts with floating deeds don't institute a policy with a preferred reservation period for direct stays only. Give owners within each season a 14 day period to reserve units for direct use only (and should a owner cancel later and ask to deposit, he/she would not have the ability to deposit the reserved prime week but would have to settle for a week selected by the management company - so no manipulating the system). After the 14 days, owners could then call and reserve whichever week they want (based on remaining availability) for deposit. Everyone would win that way.

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I think it would actually be better to allocate a certain percentage of reservations to owner stays and a certain percentage to exchanges. That way, everyone has a chance to use the week as desired. With a home priority period. it may be that only those reserving for home resort stays can make a reservation.

dougp26364 said:

There's really no right or wrong way.



At least I'm not reading about a lot of unhappy HGVC owners or even DVC owners when it comes to RCI exchanges.

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I'm not happy at all about the HGVC bulk deposits, I have to get a separate RCI account if I want access, I'm blocked in the corp HGVC account by the 9 month club season block. I've diversified rather than adding more HGVC, I even gave one away in bargain deals.

SmithOp said:

I'm not happy at all about the HGVC bulk deposits, I have to get a separate RCI account if I want access, I'm blocked in the corp HGVC account by the 9 month club season block. I've diversified rather than adding more HGVC, I even gave one away in bargain deals.

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Maybe I'm confused? Are you talking about trading back into HGVC, a group of resorts you can book directly through HGVC?

dougp26364 said:

At exactly 09:00, when the reservations lines opened, we called to reserve a week at our home resort. We were caller 118 and I was on hold for 30 minutes, only to be told there was no availability.

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If you called exactly at 9 then how can there already been 118 callers. Since you are in Kansas is it possible that you called at 9 Central time instead of 9 Eastern of whatever timezone the call center is in.

Which property was this for? Is there an opportunity to go online and book it yourself.


I am happy with my current portfolio. I have a variety of resorts HGVC, Wyndham, HIVC and well as a few straight up weeks, this allows me to overcome the HGVC restriction to 9 months out booking, and often can take advantage of booking back into HGVC for less points PLUS an exchange fee. But for some high demand stays it is a much better deal. I would jettison 1 or 2 straight up weeks and maybe my HIGV if it was worth it do so. But for now it is working ok.

dioxide45 said:

I think it would actually be better to allocate a certain percentage of reservations to owner stays and a certain percentage to exchanges. That way, everyone has a chance to use the week as desired. With a home priority period. it may be that only those reserving for home resort stays can make a reservation.

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I think that's pretty close to the principle I'm talking about. Resorts should know their owner occupancy rates for any given time, which would tell them which weeks to keep and which to allow for deposit.

Not everyone can be on the phone at the specified date/time. Some people have to be at work. Some have family obligations. Why should I have an advantage because I work nights and can be on the phone, right when reservations open?

Like I've said, there is no right or wrong way. There is no perfect way. However I do feel making all deposits equal gives owners who actual want to stay at their home resort during peak times the best opportunity to do so and, gives those that want to exchange a stress free process since they know all deposits are equal. They no longer have to play beat the clock to get good value, and in all likelihood have the exchange power necessary to get the exchange they want.

Most of the problems I see don't come from the ultra prime weeks. Owners who've paid a premium for those weeks tend to use those weeks. The problem is the marginal season weeks where there's maybe three or four weeks in that season considered "high" value. Those weeks are often over valued by owners wanting to exchange.

For example, how "powerful" are the July weeks that started this discussion if they have passed through all the filters and landed in the online inventory with I.I? Owners wanting to stay at their home resort can't do so without exchanging and the owners who reserved then deposited those weeks probably don't have the power they thought they had in the first place.

I'm pretty sure it was John Chase that argued this with me years ago. I didn't necessarily agree at the time but, I've watched over the years and found he was correct. Bulk banking Can be a difficult thing to wrap your mind around but it works best for the resort, owner wanting to use the resort they pay for and owners wanting good value for exchanges.

I do think trade value in II is often overrated. As you say, if these prime weeks got through all the requests and showed up online, they perhaps are not all that strong of a week.

I think another example of this is with my gold weeks in Orlando. I believe Saintsfan did an analysis and determined that May weeks, with a higher TDI, actually seemed to have less trade power than November weeks (especially November). It seems that a lot of people book the May weeks because they need to make a reservation to deposit so they can start a request. That leaves with fewer people concerned about the November weeks. So II perhaps gets fewer of those flooding II at 13/12 months.

This has made me change my strategy. I used to reserve May weeks, mainly because I needed to start a request or trade, but also for those higher TDIs. I am not adjusting it and only reserving two weeks in May and then reserving the next two in November. I may wait it out next year and reserve all four weeks in November. Though it seems that I am still trying to play the high trade power game, but they don't seem to be as highly demanded as the May weeks for reservations.

I do think trade value in II is often overrated. As you say, if these prime weeks got through all the requests and showed up online, they perhaps are not all that strong of a week.

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Agreed with regard to II, but I think some people see RCI's transparency and figure II must be similar to that behind the scenes. In RCI there is a massive difference in trading value of a week 27 and a week 35 at an east coast beach location (for example).

Why should the person who bought to stay have priority over one who bought to exchange? The rules should be the same for both of us. Just because you want to stay in the place shouldn't give you any priority over me who wants to exchange.

I own a 3 Br. lock off at Summer Bay Resort. I paid to lock off the unit then reserved a 1br for Thanksgiving Week and a 2br for Christmas week. I am depositing both of them and getting 2 exchanges for each.

If the weeks were bulk banked for me I could not get the 2 for 1 deal at this time.

Again, if I can get on the phone and reserve those weeks why should someone who wants to occupy the unit get a jump on me??

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Bulk banking makes no sense for anyone other than the management company. It damages the resale value of the ownership pretty heavily and often guarantees that on average anyone who deposits will get less trading power than they would have without a bulk banking system allowing the management company to hold onto more valuable weeks for rentals.

All things considered though, a management company's goal (in my opinion) should be to do their best to deliver what was advertised to owners who bought from them. With a floating week, the proposed purpose was to offer an owner flexibility on the varying timing of their vacations from year to year. Owners were also promised they would have an opportunity to trade through II or RCI in years where they want to travel to a different location to try something different but owners get that option exactly as described regardless of which week is deposited. (Remember - the ruthless sales people who are selling the floating weeks are promoting flexibility for all owners. Even they don't spin the sale such that "everyone can just reserve a high demand week like July 4th or Christmas week for deposit". They know that doing this would magnify the potential future supply problem to the buyer so this is one promise that those ruthless liars actually do not usually make. They usually sell owners on how great the trading power is regardless of which week gets deposited). In the long run, I also believe that a higher percentage of direct owner use at a timeshare creates value for all owners of the property (as compared to a higher percentage of owners choosing to deposit).

There's no easy solution particularly in locations like Orlando where Christmas is in so much more demand than the rest of the year or those crazy Williamsburg and Branson Marriott deeds that float platinum from week 9 through the middle of October (seriously how did they really anticipate March being high demand weeks at those places?)

dougp26364 said:

Maybe I'm confused? Are you talking about trading back into HGVC, a group of resorts you can book directly through HGVC?

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HGVC bulk banks more than a year in advance, so by the time 9 months rolls around everything is gone. Yes I can book direct with HGVC points, but the point cost is much less for the same unit from the RCI bulk bank (7,000 vs 4800)

bonk2boy said:

Bulk banking makes no sense for anyone other than the management company. It damages the resale value of the ownership pretty heavily and often guarantees that on average anyone who deposits will get less trading power than they would have without a bulk banking system allowing the management company to hold onto more valuable weeks for rentals.

All things considered though, a management company's goal (in my opinion) should be to do their best to deliver what was advertised to owners who bought from them. With a floating week, the proposed purpose was to offer an owner flexibility on the varying timing of their vacations from year to year. Owners were also promised they would have an opportunity to trade through II or RCI in years where they want to travel to a different location to try something different but owners get that option exactly as described regardless of which week is deposited. (Remember - the ruthless sales people who are selling the floating weeks are promoting flexibility for all owners. Even they don't spin the sale such that "everyone can just reserve a high demand week like July 4th or Christmas week for deposit". They know that doing this would magnify the potential future supply problem to the buyer so this is one promise that those ruthless liars actually do not usually make. They usually sell owners on how great the trading power is regardless of which week gets deposited). In the long run, I also believe that a higher percentage of direct owner use at a timeshare creates value for all owners of the property (as compared to a higher percentage of owners choosing to deposit).

There's no easy solution particularly in locations like Orlando where Christmas is in so much more demand than the rest of the year or those crazy Williamsburg and Branson Marriott deeds that float platinum from week 9 through the middle of October (seriously how did they really anticipate March being high demand weeks at those places?)

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As to trade power: I use to feel this way as well and defended my position against John Chase, who was on an HOA board with similar but flawed logic.

It wasn't until I could directly compare results from a selected "high" value week and using points, which is an averaged value week, that I began to change my mind. With I.I. there was literally no difference in trade power.

Now RCI appears to be a different animal. RCI has a different exchange model using TPU's and it can be very clear that there are differences from one week to another. I dropped out of our personal account with RCI because I was seeing a greed factor large enough I couldn't take it anymore. They designed a complex program in which they set and change the rules to fit RCI's needs/desires. I didn't like that. Granted I.I. probably does similar things but, I haven't seen it and from personal experience haven't felt it in my exchange habits.

Resort groups such as HGVC and DVC have points that appear to have a set value in RCI and both, to my knowledge, utilize bulk banking with RCI. To be honest I hate RCI enough that I always use my HGVC points to stay within their system but, the feeling I get is that RCI sets an averaged TPU for all HGVC owners that appears to be an acceptable value. At least I'm not seeing a tremendous amount of posts about RCI ripping of HGVC owners in the exchange value department. As a HGVC owner I can say that we typically can get what we want when we want it with the exception of Oahu. There is so much demand on Oahu that you need to book at the first opportunity to have a shot at any inventory but again, I've never felt the need to be on the phone or computer at exactly the moment inventory is released.

Now I'm going to toss you a bone. Interval has apparently started their own RCI like points based reservations system. They're talking with owners about it at Grand Lodge on Peak 7 were we're staying at the moment. Because we have our dogs with us and because we purchased at this resort strictly to use (because as owners we can bring our dogs), we had no desire to attend a presentation. If I.I. goes to a RCI style system then there's likely to be a major shift in how we view weeks exchanges within the I.I. system. One thing is certain, nothing stays the same for very long in timeshare land.

SmithOp said:

HGVC bulk banks more than a year in advance, so by the time 9 months rolls around everything is gone. Yes I can book direct with HGVC points, but the point cost is much less for the same unit from the RCI bulk bank (7,000 vs 4800)

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So yours is gamesmanship trying to get something for less, but thwarted by the timing of HGVC's bulk banking. Not a bad idea and exactly why TUG is a good thing. It appears HGVC recognized that loop hole and took measures to keep owners for going through it in this particular case, so there's a risk in using that strategy.

My point has been that systems such as HGVC control their inventory in such a manner that maximizes outside trade opportunities for it's owners while keeping adequate inventory for home resort usage by owners wishing to stay in their home resort during their home resort season. By knowing what to keep they keep owners wanting to stay at their home resort happy while depositing far enough in advance and enough quality weeks to get maximum value for those wishing to exchange outside the system, not exchanging back into the system.

I'll make one other observation from my own experience. We own a MVCI resort, Ocean Pointe in Palm Beach Shores, FL. It's a 3 bedroom unit but the wife and I typically don't need all 3 rooms, so we lock off that 3rd bedroom. One thing I've seen over the years in doing online searches was that I could trade back into my home resort using the studio and get a larger unit. Once I even found a 3 bedroom unit (hurricane season) with an online search. With MVCI moving into a trust based ownership and a points based reservation system, I suspect those days will eventually come to an end.

Sandy VDH said:

If you called exactly at 9 then how can there already been 118 callers. Since you are in Kansas is it possible that you called at 9 Central time instead of 9 Eastern of whatever timezone the call center is in.

Which property was this for? Is there an opportunity to go online and book it yourself.


I am happy with my current portfolio. I have a variety of resorts HGVC, Wyndham, HIVC and well as a few straight up weeks, this allows me to overcome the HGVC restriction to 9 months out booking, and often can take advantage of booking back into HGVC for less points PLUS an exchange fee. But for some high demand stays it is a much better deal. I would jettison 1 or 2 straight up weeks and maybe my HIGV if it was worth it do so. But for now it is working ok.

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Good question. First, we weren't in KS when I made the call. We were sitting in Breckenridge where the resort is located when we were trying to make the reservation. I was actually sitting at the Starbucks a few blocks away.

When I asked the same question I was told that you have to plug the number in at 08:59 and hit send just as the numbers show 09:00. IOW, you better be lined up with their clock. My clock showed 09:00 when I dialed the number, unfortunately 118 other owners dialed in a split second faster than I had. I set myself up ahead of 09:00 by setting my alarm for 08:55, giving me time to dial in the number and wait. It didn't work. I did this because I missed the opportunity to book the week before, which was the week we really wanted. That's when I learned how popular my home resort was for the month of July.

After discussing things with my wife we decided we really didn't want to travel to our home resort in July as it's just to busy with families. Unfortunately I had our vacation weeks planned out and July spaced things out better. Instead we'll come up here in June, which is a short 4 weeks after our prior vacation ( I like to spread vacations out 6 to 8 weeks apart), then we'll go into September before our next vacation. It's screws up my timing some but we can live with it.

dougp26364 said:

...When I asked the same question I was told that you have to plug the number in at 08:59 and hit send just as the numbers show 09:00. IOW, you better be lined up with their clock. My clock showed 09:00 when I dialed the number, unfortunately 118 other owners dialed in a split second faster than I had. I set myself up ahead of 09:00 by setting my alarm for 08:55, giving me time to dial in the number and wait. It didn't work. I did this because I missed the opportunity to book the week before, which was the week we really wanted. That's when I learned how popular my home resort was for the month of July.

....

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Before Ron Parise turned me on to esnipe I used to snipe bids myself. Exact time was important. I discovered that eBay time and my cell phone time were exactly lined up so I used a clock with a second hand on it to know exactly when the minute would change on the eBay clock.

The time that showed on the auction was sometimes delayed so it was not reliable, my method was.

Of course if the resort time is not the same as cell phone time this exercise is useless.