New RCI Domestic Exchange fee $164!

[T_R_Oglodyte]

Re: RCI's goose

This is not exploitation. Everyone is suggested dropping RCI for the indies but this is exactly how the indies work. The RCI rules of trade power, VIP, etc. don't exist. You put in a week, you take out a week.

A few indies work that way, but most do not.

The big "trade power" issue with independents is that most of them will not accept any old week you want to deposit. That is a form of trade power. They only accept strong weeks into the bank so that they can guarantee a certain quality of week in return.

Even after that, some independents such as SFX still impose a trade power requirement - you can't use any deposited week with RCI to pull any other week out of the SFX system.

****

The big thing that the affiliated exchange companies have going for them is that they will accept any week from an affiliated resort and offer a week in exchange. That is not the case with the independent companies.


*************

If an independent company that is a free-for-all exchange company, such as DAE apparently is, were to get flooded with unusable blue and green weeks, they will have to change their policies or the company will go under. They may be able to survive at the level they are right now, but if they start to gain any traction in the market the free-for-all approach will change.

 

[boyblue]

BINGO - I believe that this could be an explanation what RCI is doing and it’s perfectly legal.

Reasonable doubt?

You can bet the farm that what RCI is doing is legal but you can make a strong case (even with the little we know) that they are testing the bounds of business ethics.

 

[boyblue]

I'm guessing that a good portion of the points inventory now comes from PFD. If so every one of those weeks is technically in RCI Points - but they have to be used at full 7 day periods. They could use the generic points chart in & out with the exchange fee at the Points rate rather than the weeks exchange rate. Since that rate is lower RCI may not want to do that but they could and they to not have to continue to prop up the weeks system by placing those PFD units into RCI Weeks if they don't want to. RCI hadn't seen one of my weeks deposits into the weeks system in over 5 years yet by PFD they have received 4 since 2004. If others are doing the same it is the Points side that is growing while weeks is fading away quickly. As a product line starts to wind down one of the common practices is to raise prices so revenues stay flat. Eventually the company hopes a newer, higher volume product line will replace that income even if the unit pricing is lower. We may be seeing that with RCI Weeks and Points right now.

Good insight John,
I too aquire some of my points (half) through PFD if our deposits were to stay in RCI Points the system would not only be sustainable it would soon be the the biggest dog in the fight. If that's where this whole thing is headed I can't wait till we get there.

 

[PerryM]

Ethics and RCI and us

Blue,

You bring up a great topic of ethics http://en.wikipedia.org/wiki/Ethics

Exploiting a computer system or any system by merely taking someone else’s rules and finding the strengths and weaknesses and using common sense – this is the American way. We then have every right to use the rules that benefit us and bypass the ones that don’t do us any good.

Many (Most? - All?) of us here have had completely lopsided exchanges – to our benefit. We know that the exchange is completely crazy – I used get them all the time. I, however, don’t call II or RCI and turn myself in for punishment. Am I ethically challenged? I think not. I’m assuming that everyone lives by the same rules and the results are more or less the same.

Well for every lopsided exchange I've gotten, (And that's a lot) I've always assumed that RCI and II did just as well.

I great case can be made against the exchange companies becoming their own customer. I would have no problems if all exchange companies were prevented from being a customer to themselves – it does smack of special favors and ripe for temptation. This would then eliminate the renting of timeshares by the exchanges and thus eliminate exchanging timeshare usage for airline tickets, car rentals, etc.

However, that would take governmental action – and those folks are not the shinning example against double standards and corruption.

This is why I’ve gone to renting our reservations out and renting other owners reservations. Both sides of the transaction take place in the free market and thus the outcome is as just as we humans can design. Don’t get me wrong, I will exploit the exchange company if I see an opportunity – did that just the other day.

 

[RonaldCol]

Re: RCI's goose

The ability to upgrade from a studio to a 2BR is a great exploitation of the RCI Week system – my hats off to anyone who does this. If price and MF’s indicate that this is a completely lopsided exchange then we have exploited a weakness of the Week system – good for us.

dboy1’s example in post #95 is a great exploitation of the RCI system by a member – congratulations.

However, why do we assume it only works for the members?

I’m assuming that the convoluted computer logic that allows for this lopsided exchange allows for RCI, who would be just another user of the computer logic, to do the same thing. i.e. those 2BR weeks that RCI is renting were pulled from the population of units just like dboy did and RCI has every right to rent them out if that’s what their own rules allow for.

Until evidence is presented and a guilty verdict announced (or a finding for the plaintiff), we must:

1) Assume RCI is completely innocent of any charges criminal or civil

2) Assume RCI is playing by the same rules as we use to exploit the Week system

Exploiting works both ways; what’s good for the goose is good for the gander

I doubt that raising fees to kill off Weeks is the motive for higher fees – if so, the stock holders of Cendant should ask their BOD to investigate. Hopefully, higher profits motivate every thought, and action of RCI.

Perry, very good analysis, but ...

... RCI is trying to kill off the Weeks accounts in favor of the Points accounts.

RCI has already maxed out it's own exploitation of the lopsided exchange multiplier. They've gotten as many of the larger units with minimal costs, llike some of us have already done.

The ability for us as RCI Weeks members to deposit a studio and obtain a three bedroom was the reason why we saw inherent advantages in participating in this type of program rather than in the Interval International (II) program. II's program literally allowed like-for-like exchanges. RCI Week got the jump on II and expanded it's membership base, either knowingly or unknowingly, at the cost of future growth. The use of the internet by the public accelerated this "demise" curve.

RCI Weeks then conjured up the RCI Points. This was an out for the dilemma that would eventually confront RCI Weeks: an abundance of studios and a lack of multiple bedroom units. A lack of appealing weeks for exchange feeds on itself: no inclination to deposit weeks, be they multiple bedroom units OR even studios.

The RCI Points account will serve to equalize the exchangeability function. You deposit a studio that's worth 10,000 RCI points but cannot get a three bedroom unit that's worth 40,000 RCI points; whereas with RCI Weeks, you deposit a crappy bkue week studio two years in advance and can get a luxrious three bedroom red week one year in advance. (Note there was period of about two years when depositers complained their VEP's were being adjusted downward. There was public umbrage over the "secret" ratios that no one outside of RCI knew. Vain attempts were made to determine what these ratios were by actions like deposit tests, etc.)

Additionally, RCI can then internally putz around with the ratios to it's benefit.

Once the RCI Weeks accounts die off, then RCI Points accounts activity willincrease AND RCI Points will then facilitate RCI's entry into it's ultimate goal: to be the world's largest hotelier without spending a dime to build their hotels.

 

[PerryM]

What is our role as consumer?

Ron,

II is integrating condo-hotel and fractional usage with IntraWest – how long before RCI integrates Cendant hotels? Link: http://www.cendant.com/about-cendant/travel-content/hospitality-services/hotel-group.html

It will be impossible to relate a 2BR GC 7 day reservation to a Friday and Saturday night stay at a Ramada, Days Inn, Wyndham, etc. RCI Points would, of course, be the logical place to allow this type of integration.

I do believe that RCI is favoring Points and Weeks gets the short end of the stick – that’s up to RCI and their business model they are following.

All we can do as consumers is to analyze and exploit RCI. Trying to force our will on RCI with governmental intervention or civil suits is the wrong approach – the only ones winning in those cases will be the lawyers. RCI will easily outmaneuver the government or civil lawyers and be 10 miles down the profit road by the time verdicts or findings are returned.

 

[T_R_Oglodyte]

You can bet the farm that what RCI is doing is legal but you can make a strong case (even with the little we know) that they are testing the bounds of business ethics.

I quite honestly don't see any ethics issue in play here at all. RCI conducts it's business as any other company does; consumers should either choose to do business with them or take their business someplace else. No need to set up another nanny-patrol.

What I see going on here is just enother example of special inteest moral imperative. A set of people is offended by what someone else is doing, so a moral argument is created why that offending person or entity's action is wrong and therefore must be suppressed. But the simpler solution is that if you don't like it, just walk away and refuse to participate, while allowing those who don't have a problem to continue.

And if you think that RCI is reaping exorbitant profits, then you should invest in its competitors, who are sure to be able to profit from it. And if you think that RCI is shooting itself in the foot with shortsighted actions, then there is no reason to get worked up about it because the situation will cure itself without any need for you to do anything at all.

 

[Timeshare Von]

From RCI this morning . . .


Hello,

Thank you for your e-mail.

We have not increased the exchange fee, it has been $149 domestic since
2004.

Thank you for your interest in RCI.

Kind regards,

Kathy Traeger
Customer Communications Specialist
RCI North America

 

[huestous]

But the simpler solution is that if you don't like it, just walk away and refuse to participate, while allowing those who don't have a problem to continue.

This would solve the majority of problems that I hear discussed daily.

 

[grest]

I wrote to RCI to express my concern about these rates, and the response I got from the feedback division is that they were not aware of this, and asked the source. I told them "in a letter to your affiliates" as stated by original poster. Hope this is correct information.
connie

 

[Carolinian]

Unfortunately, you overlook the fact that RCI is in a quasi monopoly position, at least with respect to exchangers at resorts that are not dual affiliated and where HOAs do not publicize the ability to use independents. Consumer there are in effect trapped into using RCI or not exchanging. There is no corrrective force of the market. This is the circumstance that fully justifies governemnt action to quash monoopolisitic practices and cheating the consumer.

Just telling individuals to just not use RCI does NOT solve the problem. The problem is that there is not a real free market for timeshare exchange for many exchangers. Buryin our heads in the sand will not change that.

The solution is to be proactive, and help educate our resorts why they should be educating their members about the independents and why they should dual affiliate with both of the big boys. Its all about growing the competition so that we can really have a free market in exchanging and the big boys cannot just walk all over consumers. Once we have a free market in exchanging, there will not be a need for government intervention, as the market can then take care of itself. We are a long way from that point now.

And BTW, saying that most independents do not take all timeshare weeks is putting too much emphasis on the SFX model, which is different from the models of most independents. The only other limitations I know of is UKRE only taking resorts in the UK and HTSE only taking red non SA weeks. Most other independents are generally wide open.

I quite honestly don't see any ethics issue in play here at all. RCI conducts it's business as any other company does; consumers should either choose to do business with them or take their business someplace else. No need to set up another nanny-patrol.

What I see going on here is just enother example of special inteest moral imperative. A set of people is offended by what someone else is doing, so a moral argument is created why that offending person or entity's action is wrong and therefore must be suppressed. But the simpler solution is that if you don't like it, just walk away and refuse to participate, while allowing those who don't have a problem to continue.

And if you think that RCI is reaping exorbitant profits, then you should invest in its competitors, who are sure to be able to profit from it. And if you think that RCI is shooting itself in the foot with shortsighted actions, then there is no reason to get worked up about it because the situation will cure itself without any need for you to do anything at all.

 

[BocaBum99]

RCI is not going to kill the golden goose simply because it is not a goose. RCI weeks is a cow that is being properly milked for profits that can be reinvested into more worthwhile business endeavors such as Fairfield and Trendwest. The real money is in resort development of points based resort groups. Cendant has figured this out and is managing their portfolio of businesses accordingly.

RCI Points will follow up with higher fees as well. RCI doesn't favor points over weeks. It favors profit maximization to suck out as much cash as it can as its exchange empire dies a slow death.

I haven't run the numbers yet, but I'll bet that the reduced number of exchanges that RCI gets from OLCC moving to an internal exchange program more than offsets the revenue increase in the $15/year price increase.

The only people who are going to make money out of the class action lawsuits will be the attorneys for Cendant who get paid by billable hour. The class action law firm will get nothing because they will lose the lawsuit.

 

[geekette]

... RCI Points will follow up with higher fees as well. RCI doesn't favor points over weeks. It favors profit maximization to suck out as much cash as it can as its exchange empire dies a slow death.

Yes, this is what I think, too.

Cendant didn't start the exchange company and doesn't really give a crap about it, but saw an opportunity to grow themselves more profit off of this going concern. I believe they will attempt to become a one-stop-shop for all your travel needs and throw out the ridiculous exchange "logic" and just have you Make Reservations at their price or, go elsewhere. I think they will have enuf levels of quality to suit most any budget.

It's just business.

 

[T_R_Oglodyte]

I've been mentionng off and on for several years my opinion that RCI beliefs these is a major market inefficiency that they can exploit. And that efficiency is the difference in value offered by timeshare accommodations compared with the hotel option.

Most of us are aware of it. People who have stayed in decent vacation condos can't imagine ever going back to cramped hotel rooms - or if you don't want a just a cramped hotel room you wind up paying nightly rates that are equal to an annual fee at a condo.

Ever since RCI first announced their initial points program I've thought their objective has been to totally eliminate the distinction between timeshares and other vacation accommodations and travel services. Points just becomes a medium for exchanging among various options.

 

[Gadabout]

People who have stayed in decent vacation condos can't imagine ever going back to cramped hotel rooms - or if you don't want a just a cramped hotel room you wind up paying nightly rates that are equal to an annual fee at a condo.

As long as the prices stay comparable, I would agree.

But throw in any large price difference, as well as Location of TS vs. hotel (car rental or taxi fares can add up), or even just the particular need of the traveller--which in many cases is "a place to leave my stuff, shower, and to sleep for a few hours when I'm not out sightseeing" and the TS can still lose out to even a not-so-great hotel (amenities-wise, that is). And if companies ever start charging per person for TS (for towels, etc.) that will also make them less desirable.

 

[Carolinian]

I would bet that the old Savings and Loans thought what they were doing was legal; too!

You can bet the farm that what RCI is doing is legal but you can make a strong case (even with the little we know) that they are testing the bounds of business ethics.

 

[Carolinian]

Re: You will pay for all of this

These actions were brought under the New Jersey consumer protection statutes. Such statutes are typically VERY broad. North Carolina's for example, provides that "unfair or deceptive acts or practices in or affecting commerce are declared unlawful". Are RCI' practices unfair? You betcha! And probably deceptive, too!

Yes I do offer an opinion on this issue. I do so because as far as I'm concerned, there is no cognizable legal right being violated by RCI. It does not much matter how the complaint is pled out.

BTW, you offered up an opinion in the original thread about these class action suits being brought against RCI. You offered that these suits would in fact survive summary judgment. Like I said, you too have never read the pleadings.

Whatever the case...I do agree with you that this discussion is decidedly now off on a tangent and will hopefully get back on track.

 

[Carolinian]

You probably missed Bootleg's info on this subject. He checked RCI's computers to see where the prime rental info was coming from, and it was not PFD, Points Partners, cruises, or the like. It was normal exchange deposits from Weeks members. That was not that long ago and PFD was in full swing then. So I guess Bootleg's facts disprove your guess.

I'm guessing that a good portion of the points inventory now comes from PFD. If so every one of those weeks is technically in RCI Points - but they have to be used at full 7 day periods. They could use the generic points chart in & out with the exchange fee at the Points rate rather than the weeks exchange rate. Since that rate is lower RCI may not want to do that but they could and they to not have to continue to prop up the weeks system by placing those PFD units into RCI Weeks if they don't want to. RCI hadn't seen one of my weeks deposits into the weeks system in over 5 years yet by PFD they have received 4 since 2004. If others are doing the same it is the Points side that is growing while weeks is fading away quickly. As a product line starts to wind down one of the common practices is to raise prices so revenues stay flat. Eventually the company hopes a newer, higher volume product line will replace that income even if the unit pricing is lower. We may be seeing that with RCI Weeks and Points right now.

 

[Carolinian]

Re: RCI's goose

I would have guessed the same if it were a new theory, but DAE has used this plan very succesfully in Australia where they are a major player, and so has another Australian independent, Interchange, and in many years of operation, they have not been flooded with only off season weeks.

*************

If an independent company that is a free-for-all exchange company, such as DAE apparently is, were to get flooded with unusable blue and green weeks, they will have to change their policies or the company will go under. They may be able to survive at the level they are right now, but if they start to gain any traction in the market the free-for-all approach will change.

 

[rcnet]

Here's what I've decided to do.

First-time poster here. Wow. I've spent the last 1.5 days just reading about this whole RCI weeks shenanigans across multiple Internet sites to enlighten myself (I really should be working instead! ). I'm not a fancy timeshare "insider", but I have owned my TS for almost 8 years now, and I have done a few exchanges with RCI in the past, so I've been through the "process". Plus, it was time to think about family vacations for 2007, so I've stumbled upon this "hornet's nest" at the right time!

Like most of you, I'm very much bewildered about RCI's sleazy rental practices, plus this new exchange fee increase takes the cake. I was a RCI member up until 2004, but I knew I was going to my home resort (red week at Plantation Resorts in Myrtle Beach) for a couple of years so I let my subscription expire.

Well, my wife said she wanted to try something different next year, so I was just about to call RCI (usually I hang up on them when they call about renewing, but for the last couple of weeks I was actually hoping they would call me so that I could renew for 2 years at a discount), but then I read all this. Honestly, I've never liked the whole TS "hard-sell pressure" experience that I went through when I originally bought it, and I've always felt going to the timeshare presentations + dealing with RCI exchanges as a necessary "evil" in what would otherwise be a nice relaxing weekly vacation. To bad we can't just have a simple "owner-led" online exchange system without all these greedy corporations/middle-men/con-men milking it for every last penny till it's dead.

Ahem, so after I read about all the difficulty that RCI members were having getting exchanges that they wanted, I said "hold on", and being internet-savvy, started looking for alternatives. I'm literally spooked about shelling out membership fees ($89) + exchange fees ($149) to do a search and hear back "sorry, no availability". I called my resort and asked them what other exchange options were available and they mentioned www.newhorizonsexchange.com. I don't know anything about them, but they seem a little bit cheaper. Obviously, I want to pay as little as possible because I'm already paying higher maintenance fees than I ever imagined 8 years ago. I also signed up with redweek.com (6 months for $10) so hopefully between those, plus some of the other's that have been mentioned like daelive.com, I can find a suitable alternative to RCI for my TS exchanges.

When I talked to my resort, I specifically asked the rep and she said that as long as I notify them that somebody else is coming, I can make the exchange without any problems. Nothing prevents me from not using RCI for this. It will be a long dark cold day in hell before the resort gets another penny of mine to switch to RCI points.

I'll never go back to RCI ever again. I'll never sit through another RCI "presentation" ever again (regardless of the free trinkets). From what I've read RCI Points is just the latest scam in a litany of scams to milk you for more money. I'm not saying that for new TS owners, Points wouldn't be a good deal, I don't know. But what I do know, after paying over $11K "retail" on my TS (It was cheap champagne even!) + steadily climbing maintenance fees + occasional yearly membership fees + ever-higher exchange fees, I'm just sick and tired of paying, paying, paying. I remember running the numbers in my head before I signed on the dotted line thinking that, if all the numbers stayed the same (remember this was 8 yrs ago), that I'd break even somewhere after 10 years on my TS, compared with do-it-yourself vacationing. We'll obviously, the numbers haven't stayed the same.

I'm really hoping the market for "alternative" exchanges opens up in the next 6 months, because come on, it's 2006. Computers are cheap, storage and bandwidth are cheap. Electronic "exchanges" should be costing less and less, not more and more.

Honestly, if I sit back and think about all the things that were promised me back 8 yrs ago, I can say this whole timeshare experience has been average, at best.

YMMV

 

[timeos2]

You probably missed Bootleg's info on this subject. He checked RCI's computers to see where the prime rental info was coming from, and it was not PFD, Points Partners, cruises, or the like. It was normal exchange deposits from Weeks members. That was not that long ago and PFD was in full swing then. So I guess Bootleg's facts disprove your guess.

I wasn't talking about rentals - I am saying that many of the "weeks" deposits - especially the good ones - may now very well be coming in through PFD rather than the old regular weeks side of things. I know of at least 1/2 dozen owners who have started to use PFD that had given up on the old weeks world. So while those are "weeks" style deposits they are only there because of the RCI Points system and if they are used in that system then an argument can be made that RCI Points is in fact being used to prop up weeks - not the other way around. The majority of "old week" deposits seem to be the lesser times and resorts vs the better ones that PFD attracts due to high values. If they kept those better weeks in a pool available only to RCI Points members then the selection in RCI weeks would decline even more.

 

[Carolinian]

I don't think you mean blue weeks. If someone is doing PFD, the best thing to give RCI Points is the pinkest week you can find, right on the edge of white. It is the "overaveraging" mania in the Points system that creates this opportunity, and that is one of the fundamental flaws that exists throughout the Points system.

Weeks would be better off without PFD. That is not propping up Weeks. It is a minor player, along with the unfair generic points grids for crossover trades through which Weeks props up Points. The best that could happen is to totally seperate the two systems.

I wasn't talking about rentals - I am saying that many of the "weeks" deposits - especially the good ones - may now very well be coming in through PFD rather than the old regular weeks side of things. I know of at least 1/2 dozen owners who have started to use PFD that had given up on the old weeks world. So while those are "weeks" style deposits they are only there because of the RCI Points system and if they are used in that system then an argument can be made that RCI Points is in fact being used to prop up weeks - not the other way around. The majority of "old week" deposits seem to be the lesser times and resorts vs the better ones that PFD attracts due to high values. If they kept those better weeks in a pool available only to RCI Points members then the selection in RCI weeks would decline even more.

 

[MaryH]

Does anyone know with the increase of domestic exchange fee, what the C$ equivalent would be? With the rise of C$, I am hoping the rise in fee is offset.

 

[Carolinian]

The independent alternative

For those wanting an alternative to RCI, the first thing to do is to join ALL of the independents with free membership and a request first system, which are:

www.daelive.com
www.platinuminterchange.com
www.tradingplaces.com
www.interchange-timeshare.com.au (mostly Australian)

Then, if you have a resort and week they accept, add www.sfx-resorts.com

Then, if you have a red week located somewhere other than South Africa, add www.htse.net (small annual fee, but low exchange fee)

 

[PerryM]

Same boat new captain

Of course, relying on any company to arrange an exchange places oneself in exactly the same position we face with II and RCI – we agree to their rules and regulations, even if one of them is to willy-nilly change them to maximize their stockholders profits.

The best way to exchange, at free market rates, is to simply rent your unit. Granted you have to declare the rental income but the cash you get can be used anyway you want. Lock in a juicy holiday week and rent for 3-5 times the MF and you can then rent a bunch of those cheap RCI Gold Crowns.

One of RCI problems with renting is their cross contamination from Cendant’s hotel group. (Link: http://www.cendant.com/about-cendant/travel-content/hospitality-services/hotel-group.html) Renting a 7-day timeshare reservation is best done to the timeshare audience that frequents RedWeek, MyResortNetwork and VRBO.

RCI is discounting their rental fees since they seem to want to compete in the hotel arena where folks rent for 3 days max over the weekend. It doesn’t take an Einstein to figure out that they have to sell at half price to attract the 3-day renter. If RCI had half a brain they would buy RedWeek and take it over with their timeshare rentals and charge double or triple what they charge now.

The evil renter:
I know that many an owner is ticked at us renters who lock in holiday weeks and rent them out for big bucks. I don’t view it that way at all. This is how I exchange my timeshare for another timeshare and we go on fantastic vacations. I additionally have the option of renting many units, combine the sales, and take a much fancier vacation that none of the timeshares could ever exchange into.

Many 2BR units are now rented with just the scrap lock-offs dumped into the exchange companies for hopefully an upgrade back to a 2BR unit. As it gets easier and easier to rent via the Internet, this is just going to escalate. Join the crown and get all the high demand holiday weeks you want in a 2BR on the rental sites.