Back Again, Still Confused About the Point of Points

[OldPantry]

I've been mum for the past few years. Still enjoying our Marriott weeks, still steadfastly refusing to buy points, still grumbling about the steady increase in maintenance fees. We have the equivalent of three weeks (two even-year Ko Olinas - don't ask, I'm stupid -, one Tahoe and one Newport). Everything is platinum (summer for the California resorts), with mountain views for Ko Olina. That works out to five possible weeks per year, with lock-offs. Three of our weeks were bought on the resale market, and would probably be salable at break-even. The first Ko Olina EOY would generate a $15,000 loss, once sold on the Redweek market.

One of my favorite pastimes is to figure out the "real" cost of a stay for us. By that I mean what it costs, per night, once all the variables are included. This is an iffy business, but I think it's worth adding it all up, and then comparing things with the open market (what Marriott would charge us if we weren't owners at all).

So, honesty requires, off the top, a charge for that $15000 loss we will realize for the initial up-front "investment" with Marriott. We won't ever see that money again. So, arbitrarily, I'm writing it off over 30 years, as we've already enjoyed the EOY for fifteen). Call it $500 per year.

We have about $42,000 invested in all our timeshares (including the EOY stinker). To me, it's essential to recognize that there is a real cost in having this money sitting out there. If I had it to invest, I'd easily get 5% with a corporate bond. So, there's an additional cost of $2100 yearly in lost income. Add in maintenance fees of $2350 for the Ko Olinas EOYs, $1500 for Tahoe (with state taxes) and $1400 for Newport (also with taxes), and the total yearly is $7850. Assuming I don't lock anything off (our recent pattern), the cost per night then becomes $373 per night for the 21 yearly nights. (It would drop quite a bit if we locked off, but the accommodations would be correspondingly less enticing).

So, how does that stack up against renting from Marriott? Well, quite well indeed. I just priced 2BR's at Ko Olina, Newport and Tahoe for platinum, but non-peak weeks. Availability for 2BR's at Ko Olina is spotty, but usually runs between $800 and 1000 per night. Newport is often far cheaper, but can rise to $900. Tahoe summers top out around $500 per night.

Bottom line, we're paying about 1/2 the price we would on the open market, substantially better when visiting Hawaii. As we have had considerable success in trading Newport and Tahoe for Hawaii, we think we're doing very well indeed.

Now, a newbie could do better than we have on the resale front. Good two-bedroom weeks go for $7,000-9500 on Redweek. So someone might sneak in closer to $350/night (more for Ko Olina, less for Newport and Tahoe).

What leaves me absolutely befuddled is why anyone would buy points. At $13.74 per point, with maintenance fees of $.53 per point, and knowing that you'd need a minimum of 4000 points to snag any kid of decent week for any kind of 2BR, the cost analysis is chilling:

4000 points at $13.74 ($54960). With points reselling at a meager $4, the potential capital loss will be $38960, capitalized over 15 years - I suspect most folks don't last that long) = $2597 per year.
Maintenance fees: $2120
Lost income (5%): 2748

That's a total of $7465 per year, per week, or a bit over $1050 per night. Now I just checked: I could rent a 2 bedroom mountain view villa at Ko Olina over Christmas this year for $1062 per night. That would require 4800 points, so the do-it-with-points equivalent would be $8968 ($1280 per night).

Now, of course, Marriott usually tosses in some incentives to purchase. They end up being something like a free week, or a discount on longer stays. So, you can regard them as a discount on the total outlay. Still, the money is spent, the lost income is still a cost and the lost principal is still a cost. So, the nightly cost going forward is basically unchanged.

The most frequent argument I see in favor of points is flexibility. The second is priority in access to high demand weeks. I get that. Still, how can points be more flexible than simply booking with Marriott directly? As to availability in peak weeks, my understanding is that points priority is not absolute. You can still be refused a particular week at a particular resort. And, for my three resorts, prime weeks were available at all three resorts via direct booking. Expensively, of course. But, considering how very expensive points are (at least the new ones Marriott is now selling), not ridiculously so.

I'd welcome a response from some folks with multiple weeks via points. Using a similar approach to mine, accounting for lost income on the money invested, writing off lost principal once points are sold, and factoring in yearly maintenance fees, what are your nightly costs? In light of that result, are you happy with the value received?

 

[TheTimeTraveler]

Clearly points aren't for everyone, and if you're happy with you weeks then stick with the weeks.

If you bought prior to June 2010 then you can convert your weeks to points and utilize point usage as an alternative to traditional week use.

There are no questions about it; points are more expensive than traditional weeks.




.

 

[icydog]

I have had considerable success using my DC points since I am Chairmans Club and I can reserve at 13 months. I know it is more money for my points than my weeks but the flexibility works for me. I did like your analysis though.

 

[vacationtime1]

I like OP's financial analysis a lot. Few owners really consider the capital cost and the capital depreciation, which as OP shows, is the biggest single cost item. To pay $40,000 for a TS and to then say that the cost of the TS is only the annual fee is to ignore the $40,000.

However, the rental cost of a TS for comparison purposes is not the retail price charged by Marriott. When you rent from Marriott, you may rent any number of nights starting any day of the week and may cancel at pretty much any time. When you own a TS, you get exactly seven days starting Fri/Sat/Sun once a year and you cannot change dates easily once reserved. The better price comparison is renting a TS week on Redweek or TUG Marketplace; a two bedroom island view at Ko Olina rents for about $3,500. Of course, that makes the economics of ownership even worse.

 

[davidvel]

Generally a good analysis. Locking off enrolled weeks and trading back to 2BRs or 1BRS with studio brings the nightly rate down to about $150-200 for me.

People will always point to flexibility, but there are few scenarios utilizing full weeks or weekends that DC points (even at $6-7 resale) make even remote sense financially. JiminMC will point out some good utilization for certain specialized event days in certain golf locations, but if you are prone to using a full way, resale weeks are still the way to go imo.

The only way to really know is to look at the exact week/days, how many DC points it takes, then see if that's worth it compared to other ways to rent. Everything else is just platitudes.

 

[VacationForever]

For starters, very few pay full rate for MVC's points. Marriott sells hybrid packages, which makes up of a week and somewhat equivalent points of that week, after skim of course. That typically brings cost of the total points down to about $7 per point. You can also buy resale and pay junk fees, with the total cost of about $6 per point.

We bought a hybrid package end of last year and we are starting to check their reservation system to see what we can get. We are at Presidential level and it really isn't all that bad if we book at 60 days out for where we want to go to. We are never peak season folks, preferring to travel in the shoulder season. We also don't see booking Hawaii using points it costs too many points.

One example where points conversion for our weeks actually work better for us. We own 2 weeks at Desert Springs I red season and we really have no interest in staying in the studio side even though it is nice and pretty luxurious - walk in shower, fireplace etc. For each week, we can actually book 2 weeks of 1BR in off peak season and still get some points back. BTW, off peak season is not hot summer to us. Instead it is end of the year to January where weather is mild in Palm Desert.

When we bought, the attraction was getting immediate Platinum level for Marriott Rewards. The other thing is we do want the flexibility and want to avoid paying II exchange fees as much as possible. Unless the Monday announcement screws MR Platinum level big time, we believe we made a right decision.

Is there ROI for us? No. Do we get better location assignment at Marriott resorts and Marriott/SPG hotels? You betcha. Can we put a $ to that? No. If one can afford it, why not?

 

[TravelTime]

I've been mum for the past few years. Still enjoying our Marriott weeks, still steadfastly refusing to buy points, still grumbling about the steady increase in maintenance fees. We have the equivalent of three weeks (two even-year Ko Olinas - don't ask, I'm stupid -, one Tahoe and one Newport). Everything is platinum (summer for the California resorts), with mountain views for Ko Olina. That works out to five possible weeks per year, with lock-offs. Three of our weeks were bought on the resale market, and would probably be salable at break-even. The first Ko Olina EOY would generate a $15,000 loss, once sold on the Redweek market.

One of my favorite pastimes is to figure out the "real" cost of a stay for us. By that I mean what it costs, per night, once all the variables are included. This is an iffy business, but I think it's worth adding it all up, and then comparing things with the open market (what Marriott would charge us if we weren't owners at all).

So, honesty requires, off the top, a charge for that $15000 loss we will realize for the initial up-front "investment" with Marriott. We won't ever see that money again. So, arbitrarily, I'm writing it off over 30 years, as we've already enjoyed the EOY for fifteen). Call it $500 per year.

We have about $42,000 invested in all our timeshares (including the EOY stinker). To me, it's essential to recognize that there is a real cost in having this money sitting out there. If I had it to invest, I'd easily get 5% with a corporate bond. So, there's an additional cost of $2100 yearly in lost income. Add in maintenance fees of $2350 for the Ko Olinas EOYs, $1500 for Tahoe (with state taxes) and $1400 for Newport (also with taxes), and the total yearly is $7850. Assuming I don't lock anything off (our recent pattern), the cost per night then becomes $373 per night for the 21 yearly nights. (It would drop quite a bit if we locked off, but the accommodations would be correspondingly less enticing).

So, how does that stack up against renting from Marriott? Well, quite well indeed. I just priced 2BR's at Ko Olina, Newport and Tahoe for platinum, but non-peak weeks. Availability for 2BR's at Ko Olina is spotty, but usually runs between $800 and 1000 per night. Newport is often far cheaper, but can rise to $900. Tahoe summers top out around $500 per night.

Bottom line, we're paying about 1/2 the price we would on the open market, substantially better when visiting Hawaii. As we have had considerable success in trading Newport and Tahoe for Hawaii, we think we're doing very well indeed.

Now, a newbie could do better than we have on the resale front. Good two-bedroom weeks go for $7,000-9500 on Redweek. So someone might sneak in closer to $350/night (more for Ko Olina, less for Newport and Tahoe).

What leaves me absolutely befuddled is why anyone would buy points. At $13.74 per point, with maintenance fees of $.53 per point, and knowing that you'd need a minimum of 4000 points to snag any kid of decent week for any kind of 2BR, the cost analysis is chilling:

4000 points at $13.74 ($54960). With points reselling at a meager $4, the potential capital loss will be $38960, capitalized over 15 years - I suspect most folks don't last that long) = $2597 per year.
Maintenance fees: $2120
Lost income (5%): 2748

That's a total of $7465 per year, per week, or a bit over $1050 per night. Now I just checked: I could rent a 2 bedroom mountain view villa at Ko Olina over Christmas this year for $1062 per night. That would require 4800 points, so the do-it-with-points equivalent would be $8968 ($1280 per night).

Now, of course, Marriott usually tosses in some incentives to purchase. They end up being something like a free week, or a discount on longer stays. So, you can regard them as a discount on the total outlay. Still, the money is spent, the lost income is still a cost and the lost principal is still a cost. So, the nightly cost going forward is basically unchanged.

The most frequent argument I see in favor of points is flexibility. The second is priority in access to high demand weeks. I get that. Still, how can points be more flexible than simply booking with Marriott directly? As to availability in peak weeks, my understanding is that points priority is not absolute. You can still be refused a particular week at a particular resort. And, for my three resorts, prime weeks were available at all three resorts via direct booking. Expensively, of course. But, considering how very expensive points are (at least the new ones Marriott is now selling), not ridiculously so.

I'd welcome a response from some folks with multiple weeks via points. Using a similar approach to mine, accounting for lost income on the money invested, writing off lost principal once points are sold, and factoring in yearly maintenance fees, what are your nightly costs? In light of that result, are you happy with the value received?

I absolutely hate when people get all OCD about their timeshares. A timeshare is not an investment. You are posting here for reassurance but you need to live with uncertainty. You should only buy a timeshare if you love the location and want to visit it again and again or if you are willing to gamble with an exchange company. You can easily rent though TUG, Redweek, VRBO and other websites for just a little above maintenance fees so there is no need to buy. It seems like all the time, I see a post like this from a nervous timeshare potential buyer. Just figure out your goals and make a decision. If you can't afford to lose money or pay timeshare maintenance fee for many years, then a timeshare is not for you.

 

[Fasttr]

IMHO, the best part about fractional ownership, whether it be points or weeks, is you make vacationing a priority where otherwise you may decide not too for this reason or that. Its hard to put a numerical value on that.

 

[vacationtime1]

I absolutely hate when people get all OCD about their timeshares. A timeshare is not an investment. You are posting here for reassurance but you need to live with uncertainty. You should only buy a timeshare if you love the location and want to visit it again and again or if you are willing to gamble with an exchange company. You can easily rent though TUG, Redweek, VRBO and other websites for just a little above maintenance fees so there is no need to buy. It seems like all the time, I see a post like this from a nervous timeshare potential buyer. Just figure out your goals and make a decision. If you can't afford to lose money or pay timeshare maintenance fee for many years, then a timeshare is not for you.

I disagree. There is no reason to pay $4,000 for a vacation that can be had for $3,000. That's not OCD; that's common sense.

I understand that timeshare is not an investment. But that does not mean it has to be a money pit.

 

[davidvel]

For starters, very few pay full rate for MVC's points. Marriott sells hybrid packages, which makes up of a week and somewhat equivalent points of that week, after skim of course. That typically brings cost of the total points down to about $7 per point. You can also buy resale and pay junk fees, with the total cost of about $6 per point.

We bought a hybrid package end of last year and we are starting to check their reservation system to see what we can get. We are at Presidential level and it really isn't all that bad if we book at 60 days out for where we want to go to. We are never peak season folks, preferring to travel in the shoulder season. We also don't see booking Hawaii using points it costs too many points.

One example where points conversion for our weeks actually work better for us. We own 2 weeks at Desert Springs I red season and we really have no interest in staying in the studio side even though it is nice and pretty luxurious - walk in shower, fireplace etc. For each week, we can actually book 2 weeks of 1BR in off peak season and still get some points back. BTW, off peak season is not hot summer to us. Instead it is end of the year to January where weather is mild in Palm Desert.

When we bought, the attraction was getting immediate Platinum level for Marriott Rewards. The other thing is we do want the flexibility and want to avoid paying II exchange fees as much as possible. Unless the Monday announcement screws MR Platinum level big time, we believe we made a right decision.

Is there ROI for us? No. Do we get better location assignment at Marriott resorts and Marriott/SPG hotels? You betcha. Can we put a $ to that? No. If one can afford it, why not?

This is a bit mixing apples and oranges. OP was talking about buying DC points and you first discuss the cost of buy-in though a hybrid package.

Your example of exchanging your enrolled units is an entirely different beast.

I would like to see what you have found "isn't all that bad" at 60 days, these examples always intrigue me.

 

[JIMinNC]

However, the rental cost of a TS for comparison purposes is not the retail price charged by Marriott. When you rent from Marriott, you may rent any number of nights starting any day of the week and may cancel at pretty much any time. When you own a TS, you get exactly seven days starting Fri/Sat/Sun once a year and you cannot change dates easily once reserved. The better price comparison is renting a TS week on Redweek or TUG Marketplace; a two bedroom island view at Ko Olina rents for about $3,500. Of course, that makes the economics of ownership even worse.

This is not true for Destination Club Points. With owning points, it’s just like cash, you can stay any number of nights and can check in any day of the week. You also have fairly flexible cancellation and change options outside of 60 days. With points ownership you are not restricted to certain check in days and 7 night stays like you are with legacy weeks or Redweek rentals. Points and cash stays booked with Marriott are both very flexible and are fair apples to apples comparisons to each other.

Comparing using points to Redweek rentals is also not a good comparison for another reason. Cash rentals direct from Marriott and points reservations are both transactions with a large reputable publicly-traded company, whereas Redweek and TUG Marketplace rentals are person-to-person Internet transactions with a person you may not know, with a higher level of risk and fewer options for recourse if the transaction is not as advertised. Redweek rentals generally offer no cancellation or change options whereas owning points gives you many options to cancel and rebook - just like cash rentals from Marriott.

 

[vacationtime1]

This is not true for Destination Club Points. With owning points, it’s just like cash, you can stay any number of nights and can check in any day of the week. You also have fairly flexible cancellation and change options outside of 60 days. With points ownership you are not restricted to certain check in days and 7 night stays like you are with legacy weeks or Redweek rentals. Points and Cash are both very flexible and are fair apples to apples comparisons to each other.

Also comparing using points to Redweek rentals is not a good comparison because cash rentals direct from Marriott or points reservations are transactions with a large reputable publicly-traded company, whereas Redweek and TUG Marketplace rentals are person-to-person transactions with a person you may not know, with a higher level of risk and fewer options for recourse if the transaction is not as advertised. Redweek rentals generally offer no cancellation or change options whereas owning points gives you many options to cancel and rebook - just like cash rentals from Marriott.

I was referring to weeks ownership rather than points ownership in my previous post. I agree with JIMinNC's comments above about points – but the flexibility we get using points comes at a VERY high cost. Consider, for example (wonkish):

A summer OV week at Marriott’s Waiohai costs 5875 points. Purchasing that many points costs between $40K - $75K, depending developer/resale. Because the resale value of those points is no more than $24K (@ $4), one must account for depreciation as well as the opportunity cost on the capital deployed. I use a 10% capital cost (given the lack of control, lack of marketability, inability to control costs, etc.); a professional real property appraiser would probably opine 15-20%. MF’s and club fees are about $3,700. So reserving the week with points (Marriott’s currency) costs about $7,700 - $11,200 in economic terms. No bargain, even compared with Marriott's retail rental prices.

I understand the points games we can play – weekday stays, renting points, reservations within 60 days (assuming airplane tickets are not required), etc. But points will almost never be economically efficient for reserving an expensive property. Besides, if my vacation accommodations will be costing over $1,000/night, I am looking for alternative accommodations.

 

[VacationForever]

This is a bit mixing apples and oranges. OP was talking about buying DC points and you first discuss the cost of buy-in though a hybrid package.

Your example of exchanging your enrolled units is an entirely different beast.

I would like to see what you have found "isn't all that bad" at 60 days, these examples always intrigue me.

It is not mixing apples and oranges. Most educated buyers do not buy Marriott DC points at $13.74 per point as referenced by OP. I am saying that by buying resale or a hybrid package, you get the same amount of points by paying half the price.

So what is wrong with using points from an enrolled week to make reservations? A point is a point. I am seeing value of using points to book back at the same resort that I own. If I wait until 60 days to book a 1BR at DSV I, I only use ~1000 points per week in early Jan. My week gets me 3225 points, I can use that to book 2 weeks of 1BR, with some change left.

Being a long time owner, OP could also enroll into DC system and use points as another option to use his/her ownership.

Another example that I can give... we are interested in going to Newport Coast sometime between late May to mid Sept, but not July and August. We don't like to travel in July and August due to school break crowd and prefer to travel in late May to mid June or early Sept to mid Sept when kids are back in school. While we don't own at Newport Coast, we can use points to book at Newport Coast at 60 days out and get discounted points booking. It is a good way to use points.

 

[rthib]

Other things missing from this:
Destination Escapes. We got 3 bedroom in Kauai for 1700.
Shorter vacations, add on days. With points I can easily add a few nights before or after a week, or a weekend getaway. Or split night.
We do a few nights at Newport, a few nights at San Diego and a few nights at Palm Desert.

Hybrid is the best and I no longer have to waste a week if I just need a five night stay.

 

[MOXJO7282]

IMHO the DC point is a niche product that only some truly get good value from. I think the biggest value you receive from DC points is the flexibility of use which for some is very valuable but you really do pay a premium for that flexibility. I'm in the program and have access to 17k DC points. From what I can see you can get fairly good value from points used for good shoulder season units where you can turn a good platinum unit's points into an extended or second vacation in shoulder season.

However if you use DC points for prime time 2BDRM view units you pay a super high premium which I think really diminishes the value of the program. This is because Marriott assigned very high point values to those prime units so to get a Maui or the like 2BDRM OV you end up paying as much as 30-40% more than if you owned a resale week or rented from Redweek.

As for Redweek's risk, I could be considered biased because I use their service to rent all my weeks but I think RW's track record with many others suggests it is actually low risk. Again as some have stated they want that absolute peace of mind you get with points opposed to renting from a stranger but again you pay a huge payment for that peace of mind.

 

[Quilter]

My initial perspective when I read the OP’s post was that he/she is worrying about a subject they don’t need to. Move your brain to other, more pleasant or pertinent subjects.

My conclusions are based on a possible faulty assumption that OP’s weeks were purchased prior to June ‘10. I looked through his post a couple times but can’t find any reference to when he purchased.

If this is the case he can enroll and never have to purchase more points. Rent points, yes. Purchase, no. He can play the full system and never have to spend a moment thinking about how others purchase points.

If he’s as old as his screen name implies the purchase of points is a real waste unless they have young family who want to absorb the gift without having to come up with the initial investment.

 

[Quilter]

IMHO the DC point is a niche product that only some truly get good value from.

As for Redweek's risk, I could be considered biased because I use their service to rent all my weeks but I think RW's track record with many others suggests it is actually low risk. Again as some have stated they want that absolute peace of mind you get with points opposed to renting from a stranger but again you pay a huge payment for that peace of mind.

You make some good points Joe. Your post came in while I was composing my last one.

I use Redweek service too. While I haven’t paid for their new features of Redweek verified, that seems to give a new range of security to renters. I still just try to work with the client to assure them who they’re renting from.

After a week of looking myself for rentals through VRBO I see how much work it takes to find the right property and manager.

Last year I looked for rentals at Ko Olina. It took days and a spread sheet.

 

[TravelTime]

I disagree. There is no reason to pay $4,000 for a vacation that can be had for $3,000. That's not OCD; that's common sense.

I understand that timeshare is not an investment. But that does not mean it has to be a money pit.

You and I are both agreeing. A timeshare should not be a money pit. But all vacations are money pits. You never know when you are getting the absolute best deal. My point was just that when folks start doing a billion calculations to justify their decisions, I smell a rat, as the saying goes. LOL Maybe my post came across as extreme but let's live a little and if we overspend by $500 over 20 years, oh well...

Days and a spreadsheet to go to Ko Olina. I charge $300 an hour. Hmmm...how much money would I lose doing that?

Just teasing you all. I know money is important but let's not get too fanatical. If we know the market rate on the resale market or rental market for a timeshare, then if you can come close that number, you are doing well...for today. No one knows what tomorrow will bring. Let's assume it will be worth less and the MF and taxes will increase. That is all we know for sure (usually).

 

[davidvel]

It is not mixing apples and oranges. Most educated buyers do not buy Marriott DC points at $13.74 per point as referenced by OP. I am saying that by buying resale or a hybrid package, you get the same amount of points by paying half the price.

So what is wrong with using points from an enrolled week to make reservations? A point is a point. I am seeing value of using points to book back at the same resort that I own. If I wait until 60 days to book a 1BR at DSV I, I only use ~1000 points per week in early Jan. My week gets me 3225 points, I can use that to book 2 weeks of 1BR, with some change left.

Being a long time owner, OP could also enroll into DC system and use points as another option to use his/her ownership.

Other example that I can give... we are interested in going to Newport Coast sometime between late May to mid Sept, but not July and August. We don't like to travel in July and August due to school break crowd and prefer to travel in late May to mid June or early Sept to mid Sept when kids are back in school. While we don't own at Newport Coast, we can use points to book at Newport Coast at 60 days out and get discounted points booking. It is a good way to use points.

Nothing wrong with using enrolled points, but a point is not a point, as their cost basis is signicantly different. OP asked about buying points.

Yes if they can enroll their weeks, they should do this, basically for free. No need to buy any points, hybrid or not, as Quilter puts nicely.

 

[TravelTime]

I've been mum for the past few years. Still enjoying our Marriott weeks, still steadfastly refusing to buy points, still grumbling about the steady increase in maintenance fees. We have the equivalent of three weeks (two even-year Ko Olinas - don't ask, I'm stupid -, one Tahoe and one Newport). Everything is platinum (summer for the California resorts), with mountain views for Ko Olina. That works out to five possible weeks per year, with lock-offs. Three of our weeks were bought on the resale market, and would probably be salable at break-even. The first Ko Olina EOY would generate a $15,000 loss, once sold on the Redweek market.

One of my favorite pastimes is to figure out the "real" cost of a stay for us. By that I mean what it costs, per night, once all the variables are included. This is an iffy business, but I think it's worth adding it all up, and then comparing things with the open market (what Marriott would charge us if we weren't owners at all).

So, honesty requires, off the top, a charge for that $15000 loss we will realize for the initial up-front "investment" with Marriott. We won't ever see that money again. So, arbitrarily, I'm writing it off over 30 years, as we've already enjoyed the EOY for fifteen). Call it $500 per year.

We have about $42,000 invested in all our timeshares (including the EOY stinker). To me, it's essential to recognize that there is a real cost in having this money sitting out there. If I had it to invest, I'd easily get 5% with a corporate bond. So, there's an additional cost of $2100 yearly in lost income. Add in maintenance fees of $2350 for the Ko Olinas EOYs, $1500 for Tahoe (with state taxes) and $1400 for Newport (also with taxes), and the total yearly is $7850. Assuming I don't lock anything off (our recent pattern), the cost per night then becomes $373 per night for the 21 yearly nights. (It would drop quite a bit if we locked off, but the accommodations would be correspondingly less enticing).

So, how does that stack up against renting from Marriott? Well, quite well indeed. I just priced 2BR's at Ko Olina, Newport and Tahoe for platinum, but non-peak weeks. Availability for 2BR's at Ko Olina is spotty, but usually runs between $800 and 1000 per night. Newport is often far cheaper, but can rise to $900. Tahoe summers top out around $500 per night.

Bottom line, we're paying about 1/2 the price we would on the open market, substantially better when visiting Hawaii. As we have had considerable success in trading Newport and Tahoe for Hawaii, we think we're doing very well indeed.

Now, a newbie could do better than we have on the resale front. Good two-bedroom weeks go for $7,000-9500 on Redweek. So someone might sneak in closer to $350/night (more for Ko Olina, less for Newport and Tahoe).

What leaves me absolutely befuddled is why anyone would buy points. At $13.74 per point, with maintenance fees of $.53 per point, and knowing that you'd need a minimum of 4000 points to snag any kid of decent week for any kind of 2BR, the cost analysis is chilling:

4000 points at $13.74 ($54960). With points reselling at a meager $4, the potential capital loss will be $38960, capitalized over 15 years - I suspect most folks don't last that long) = $2597 per year.
Maintenance fees: $2120
Lost income (5%): 2748

That's a total of $7465 per year, per week, or a bit over $1050 per night. Now I just checked: I could rent a 2 bedroom mountain view villa at Ko Olina over Christmas this year for $1062 per night. That would require 4800 points, so the do-it-with-points equivalent would be $8968 ($1280 per night).

Now, of course, Marriott usually tosses in some incentives to purchase. They end up being something like a free week, or a discount on longer stays. So, you can regard them as a discount on the total outlay. Still, the money is spent, the lost income is still a cost and the lost principal is still a cost. So, the nightly cost going forward is basically unchanged.

The most frequent argument I see in favor of points is flexibility. The second is priority in access to high demand weeks. I get that. Still, how can points be more flexible than simply booking with Marriott directly? As to availability in peak weeks, my understanding is that points priority is not absolute. You can still be refused a particular week at a particular resort. And, for my three resorts, prime weeks were available at all three resorts via direct booking. Expensively, of course. But, considering how very expensive points are (at least the new ones Marriott is now selling), not ridiculously so.

I'd welcome a response from some folks with multiple weeks via points. Using a similar approach to mine, accounting for lost income on the money invested, writing off lost principal once points are sold, and factoring in yearly maintenance fees, what are your nightly costs? In light of that result, are you happy with the value received?

I liked your analysis until you got to evaluating the cost of points. I bought my points for considerably less than what your analysis suggests for resale points. I like the benefits of 13 month booking, discount on last minute bookings, etc. I like the flexibility of booking the view type and room type I want - since views are important to me - as well as the number of days I want to stay. I do not like using Interval because there is no view guarantee. If there were a way to pay extra for a view guarantee through Interval, I would probably be super happy exchanging through Interval. Every time I consider booking a Getaway or exchanging, I change my mind. For example, next month, we have a vacation planned and I am using a combination of points from two rewards clubs and cash to stay in ocean view suites and hotel rooms when I could have used Interval for a Getaway in a 1 or 2 bedroom somewhere great for virtually nothing. However, I absolutely needed the ocean view. I think there is a place for points programs, a place for weeks and a place for rewards programs, depending on your goals. Mix and match if you can. It's fun.

 

[TravelTime]

One thing I would not consider in an analysis of the upfront money to buy a timeshare is that an average person would actually invest that money and get a decent return on investment. The average person would probably spend that money on something else. It is like saying a house is an investment. Basically, a house is a forced saving plan for most people. If they did not have the house, they would not save and have nothing at retirement. I am sure a few of us are savers and invest our money wisely but to use that in a general analysis seems faulty to me.

 

[vacationtime1]

You and I are both agreeing. A timeshare should not be a money pit. But all vacations are money pits. You never know when you are getting the absolute best deal. My point was just that when folks start doing a billion calculations to justify their decisions, I smell a rat, as the saying goes. LOL Maybe my post came across as extreme but let's live a little and if we overspend by $500 over 20 years, oh well...

Days and a spreadsheet to go to Ko Olina. I charge $300 an hour. Hmmm...how much money would I lose doing that?

Just teasing you all. I know money is important but let's not get too fanatical. If we know the market rate on the resale market or rental market for a timeshare, then if you can come close that number, you are doing well...for today. No one knows what tomorrow will bring. Let's assume it will be worth less and the MF and taxes will increase. That is all we know for sure (usually).

lol

I have joked many times that I am compensated for the time I spend obsessing over timeshares at less than minimum wage.

So I call it a hobby.

 

[VacationForever]

Nothing wrong with using enrolled points, but a point is not a point, as their cost basis is signicantly different. OP asked about buying points.

Yes if they can enroll their weeks, they should do this, basically for free. No need to buy any points, hybrid or not, as Quilter puts nicely.

For someone who wants to join the DC points booking train now, i.e. after June 2010, a point is a point in that by buying a hybrid package, one gets a bundle of points + an enrolled week giving a bundle of points at half the price of pure points. It gains greater flexibility in the ability to use the week for points as a week in itself or for exchanging in II for half the price.

OP has owned for 15 years, and hence should enroll in the points system.

 

[ljmiii]

OP brings up a number of good questions...but only because they are intermingled is the picture for points so bleak.

Q: Why would anyone buy points direct at almost $14/pt when they could buy at around $7/pt? A: Because they don't know any better.

Q: Why would anyone buy points at $7/pt? A: Because it makes sense to them practically and financially.

On the financial side the major factor for us was that the price of suites in major cities and high end beach front properties has gone through the roof...a trend that seems to be accelerating rather than leveling off. My family just stayed in Boston in a very nice 1BR during Easter break for $150/nt instead of $400-$600. I have a getaway planned with my wife later this month - $158/nt for a 1BR at the Mayflower when they (and every other good hotel in the area) were asking $400-$500 for a normal hotel room. Next Easter we'll be in SF in a Ritz Carlton 2BR 2.5BA for $300/nt. The 'cash stay' Ritz Carlton doesn't offer 2BRs...a 1BR 1BA goes for $1,049/nt and the larger 1BR 1.5BA for $1,549/nt (during Pres week...Easter 2019 can't be booked yet).

As for beach properties, when I first started going to Honolulu I loved the Pink Palace and the Moana Surfrider. But then the prices went crazy...so we bought at Hilton Hawaiian Village. And then bought a 2nd week to bring the grandparents after I paid cash the first time they came with us (ouch!) and I realized it would take only 5 trips to recoup my initial investment. Meanwhile, the Royal Hawaiian is asking $1116 to $2423/nt for a 1BR suite during Pres week 2019...which to me is simply unthinkable. Not that HHV is Marriott...but later this year we are staying in a 2BR penthouse at Ko'Olina for $288/nt vs $964/nt cash for a random mountain view 2BR.

Practically, the convenience and flexibility can't be beat. That I can just book our stay and not worry about a II trade or Redweek rental fitting into our vacation plans is priceless. And there just aren't a lot of timeshares in the world I want to stay for a whole week that we don't already own.

In short, it is absolutely true that you are losing $3/pt right off the bat (unless that $7/pt is a hybrid week purchase with a more complex calculation). But then you are saving a lot of money with each stay. Moving forward you are balancing the return on the value of your points, the lost investment opportunity, the increases in maintenance fees vs room rates, and the savings in the price of suites/villas as you vacation. I expect to break even in about 10 years and show a 'profit' thereafter.

 

[TravelTime]

OP brings up a number of good questions...but only because they are intermingled is the picture for points so bleak.

Q: Why would anyone buy points direct at almost $14/pt when they could buy at around $7/pt? A: Because they don't know any better.

Q: Why would anyone buy points at $7/pt? A: Because it makes sense to them practically and financially.

On the financial side the major factor for us was that the price of suites in major cities and high end beach front properties has gone through the roof...a trend that seems to be accelerating rather than leveling off. My family just stayed in Boston in a very nice 1BR during Easter break for $150/nt instead of $400-$600. I have a getaway planned with my wife later this month - $158/nt for a 1BR at the Mayflower when they (and every other good hotel in the area) were asking $400-$500 for a normal hotel room. Next Easter we'll be in SF in a Ritz Carlton 2BR 2.5BA for $300/nt in a 2BR. The 'cash stay' Ritz Carlton doesn't offer 2BRs...a 1BR 1BA goes for $1,049/nt and the larger 1BR 1.5BA for $1,549/nt (during Pres week...Easter 2019 can't be booked yet).

As for beach properties, when I first started going to Honolulu I loved the Pink Palace and the Moana Surfrider. But then the prices went crazy...so we bought at Hilton Hawaiian Village. And then bought a 2nd week to bring the grandparents after I paid cash the first time they came with us (ouch!) and I realized it would take only 5 trips to recoup my initial investment. Meanwhile, the Royal Hawaiian is asking $1116 to $2423/nt for a 1BR suite during Pres week 2019...which to me is simply unthinkable. Not that HHV is Marriott...but later this year we are staying in a 2BR penthouse at Ko'Olina for $288/nt vs $964/nt cash for a random mountain view 2BR.

Practically, the convenience and flexibility can't be beat. That I can just book our stay and not worry about a II trade or Redweek rental fitting into our vacation plans is priceless. And there just aren't a lot of timeshares in the world I want to stay for a whole week that we don't already own.

In short, it is absolutely true that you are losing $3/pt right off the bat (unless that $7/pt is a hybrid week purchase with a more complex calculation). But then you are saving a lot of money with each stay. Moving forward you are balancing the return on the value of your points, the lost investment opportunity, the increases in maintenance fees vs room rates, and the savings in the price of suites/villas as you vacation. I expect to break even in about 10 years and show a 'profit' thereafter.

I absolutely agree with you but I think MVC Destination Points are for the more affluent Tuggers who value flexibility, views, choice and saving time. Unless you are buying to use a week, weeks and exchanging for whatever you get through Interval is more cost effective.