The Timeshare industry is broken - action is required

[fernow]

If a house or condo on VRBO or airb&b or Craigslist costs less to rent than maintenance fees on a timeshare why would our guy pay anything for that timeshare

I (and of course others) have been making this point forever. VRBO/AIRB&B/Internet has changed Timeshare forever.

I own timeshares and I have rented many times from VRBO etc. So far all VRBO rentals have been excellent.

The ONLY reasons to pay something for the timeshare is that little bit of "Resort Hotel feel" you get from a timeshare and the relative "known quality" of the product. That is worth something to me. But how much.

The BIG downside of buying the timeshare is the long term commitment and the lack of control of the future of the investment property and costs. If I want to stop renting from VRBO, I stop renting from VRBO.

It is also important to note that regular people can afford to BUY a house/condo, make all associated payments including mortgage, maintain it AND rent it to you or me for the same price as the "Maintenance Fee" charged by the Timeshare company. Since I already BOUGHT my share of the Timeshare property, the biggest $ amount, the mortgage, should be handled and the "Maintenance Fee" SHOULD be a lot less.

 

[WinniWoman]

Bingo! With that statement in mind, the problem is that the vast majority of weeks or intervals cannot garner enough rent to cover the MFs. That's why the vast majority of weeks/intervals are considered worthless and can barely be given away.

And- some resorts are now putting in a lot of restrictions on how owners can rent their weeks out. So even if you theoretically can get much more than your maintenance fee if you rent it out as opposed to what the resort charges to rent to the public, the problem becomes that the resort might demand a percentage if you go through their rental office, or- if you rent it privately yourself- now your tenant has to purchase an expensive benefits pass to use the amenities at the resort, etc.

This is what Smuggs has done, making it hard to rent to the general public for timeshare owners.

This because the resort realizes that because of the internet, they are losing a lot of rental business to private owners renting their weeks out.

 

[theo]

And- some resorts are now putting in a lot of restrictions on how owners can rent their weeks out. So even if you theoretically can get much more than your maintenance fee if you rent it out as opposed to what the resort charges to rent to the public, the problem becomes that the resort might demand a percentage if you go through their rental office, or- if you rent it privately yourself- now your tenant has to purchase an expensive benefits pass to use the amenities at the resort, etc.

This is what Smuggs has done, making it hard to rent to the general public for timeshare owners.

This is because the resort realizes that because of the internet, they are losing a lot of rental business to private owners renting their weeks out.

Unfortunately, Smuggs has the leverage (and the right) to charge non-owner renters / exchangers for the aforementioned "benefits pass".
ANY resort of course has the option to take ''a piece of the action'' for rentals which they conduct on behalf of their owners (typically 30-40% commission, in my experience). That's just business and it's to be expected; it's not a "charitable favor" and there is no free lunch.

Fortunately, at independent resorts with no such separate "benefits pass" or similar "leverage", owners willing to conduct their own rentals of intervals need not pay the resort a nickel and can choose to rent out what they own for whatever the market will bear, as is certainly their right and prerogative. There is nothing that any resort can do about (or profit from) an owner exercising their right to rent out what they own.

I don't claim to know how much impact airbNb and / or VRBO might be having on the timeshare world, but it seems to me that they each might appeal to different age groups and market segments (and work / life / planning flexibility, etc; I don't claim to know, I'm just thinking "out loud". We own specific and carefully chosen places, intervals and units to use and enjoy them, not to sell later at a profit or to become "landlords", so any of that is academic and irrelevant to me. What matters more to us, quite frankly, is guaranteed access to places (and unit locations) known (...and again, guaranteed) well in advance. Knowing specific dates long ahead of time also helps to facilitate efficient family planning and obtaining best available travel costs --- no being subjected to last minute price gouging for us, thanks. Trivial and unimportant matters to some people I'm sure, but personal preferences, finances, dispositions and travel flexibility certainly differ. Accordingly, YMMV.

Fernow makes some excellent and legitimate points in post #51 above. Long term commitment (with no easy or readily available exit) cannot possibly be portrayed or "spun" as being in any way "positive" aspects of timeshare ownership. However, I would also note that over the years we've met some very nice people and made new friends at our (fixed week) timeshares and we look forward to seeing them again each year. Accordingly, I must respectfully disagree that the ONLY benefit of timeshare ownership is that of a "resort hotel feel". On the contrary, a feature of ownership that I value and enjoy is something more personal and interactive than any "resort hotel feel" alone can offer or provide. YMMV.

 

[WinniWoman]

Unfortunately, a place like Smuggs has the leverage (and the right) to charge non-owners / renters / exchangers separately for the aforementioned "benefits pass". ANY resort, of course, always has the option to take ''a piece of the action'' for rentals which they conduct on behalf of their owners (typically taking anywhere from 25-40% commission, in my limited experience). That's just "business" and to be expected; there is no free lunch.

Fortunately, at independent resorts with no such separate "benefits pass" or similar "leverage" in the first place, owners willing to conduct their own rentals of intervals they own need not pay the resort a nickel and can choose to rent out what they own for whatever the market will bear, as is certainly their right and prerogative. There isn't a thing that a resort can do about (or manage to profit from) an interval owner exercising their indisputable right to rent out what they own, if they should so choose.

I don't claim to know for one moment how much impact airbNb and / or VRBO might be having on the timeshare world, but it occurs to me that they each might appeal to different age groups and market segments. I dunno and don't claim to know --- just thinking "out loud". By the same token, we own specific and carefully chosen intervals to use and enjoy them, not to sell at a profit or to become "landlords", so it's an academic point to us.

Fernow makes some excellent and entirely legitimate points in post #51 above. Long term commitment (with no easy or readily available exit) cannot be portrayed or "spun" as being any kind of a "positive" in timeshare ownership. However, I'd note that over the years we've met some very nice people and have made some good friends at our (fixed weeks) timeshares and we look forward to seeing them again each year, so I must respectfully disagree that the "ONLY" benefit of timeshare ownership is that of experiencing a "hotel feel". On the contrary, one feature of ownership that I value and enjoy is something more personal and interactive than any "hotel" experience. YMMV.

The thing is they do not allow you to pass your benefits to the renters. The benefits you already paid for and are not using that week!

 

[theo]

...they do not allow you to pass your benefits to the renters. The benefits you already paid for and are not using that week!

A money grab, to be sure. Was the practice in place before Wyndham took over at Smuggs, or adopted after Wyndham arrived on scene?

 

[WinniWoman]

A money grab, to be sure. Was the practice in place before Wyndham took over at Smuggs, or adopted after Wyndham arrived on scene?

Well- for the most part- after. They came up with new rental policies in the last 2 years or so.

 

[MuranoJo]

Shouldn't it (the Smuggs situation) depend on what your contract says? I mean, if your contract entitles you to rent to others and it doesn't exclude your passing your ownership bennies to your renters, then how are they able to change the contract rights just because of a change in management?

 

[WinniWoman]

Shouldn't it (the Smuggs situation) depend on what your contract says? I mean, if your contract entitles you to rent to others and it doesn't exclude your passing your ownership bennies to your renters, then how are they able to change the contract rights just because of a change in management?

We have gone round robin on this a zillion times with the resort and other owners. The bottom line is- yes- the resort can set the rules for usage of the benefits. We are entitled to rent the condo for the week we own - period. The amenities usage is not included in that.

The contract states the benefits are specific to the owner and the resort does not have to extend them to any other person.

 

[bogey21]

I have a slightly different take on this. Many, many years ago I divested my Developer Weeks (believe it or not at a small profit) and bought 6 Fixed Week/Fixed Units at carefully selected HOA Controlled Independents for a total cost of about $8,000. Yes, the units were not as luxurious as a Wyndham or Marriott but on the other hand I got location, location, location with not only the Resort but also the Units within the Resorts. Another advantage from my perspective was I knew years in advance where and when I would be traveling enabling me to secure the best airfares, car rentals, etc. When it finally came time to divest these I "lost" about 75% of my $8,000 but that was small potatoes versus what it would have been had I kept my Developer Weeks.

George

 

[MuranoJo]

We have gone round robin on this a zillion times with the resort and other owners. The bottom line is- yes- the resort can set the rules for usage of the benefits. We are entitled to rent the condo for the week we own - period. The amenities usage is not included in that.

The contract states the benefits are specific to the owner and the resort does not have to extend them to any other person.

I knew my question may come off a bit naive, but not all places operate this way and I like to understand these things just for reference. Your response cleared it right up, so thanks.

 

[rapmarks]

I owned at a small resort. Owners got two hours of boat usage, I am talking boats in their thirty thousand dollar range, every day of their stay, they could pass it on if they rented their week. Rci exchangers could not get the benefit, but when we would get a second week through rci, we would get the benefit. The benefit to us when using our home resort was worth the cost of our maintenance fees.


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[John Cummings]

The Timeshare industry, IMHO, is broken. On the one hand Wyndham and others sell new timeshares for many thousands of dollars. On the other hand resales often go for nothing or a single $. As bad, if not worse, there is a whole sub-industry built around "helping get people out of their timeshares" which often scams the unwary. We timeshare owners need a campaign to combat the aggressive sales tactics of those selling new and to make ALL prospective buyers aware of their opportunities in the resale market. Only once the balance is restored will the market be healthy. TUG does a great job of educating folk who find their way to it, but we should be doing more.

It has been like this for many many years and will probably continue. I have been a TS owner for almost 30 years. I would never buy a TS today, resale or otherwise because there are so many rentals available that are no more expensive than the M/F. The initial cost is not the big issue, it is the annual M/F which you are locked into.

The big difference that I have seen over the years is the availability of TS rentals.

 

[LannyPC]

...because there are so many rentals available that are no more expensive than the M/F.

And there are even some for less than what the owner pays in MFs. Just look at TUG's Last Minute Rental section. How many of those offered have MFs of less than $700/week?

As was mentioned up-thread, this is one reason why many TS weeks and intervals are worthless.

 

[51ssvinton]

And there are even some for less than what the owner pays in MFs. Just look at TUG's Last Minute Rental section. How many of those offered have MFs of less than $700/week?

As was mentioned up-thread, this is one reason why many TS weeks and intervals are worthless.

As president of our small poa (24 units, we manage ourselves W local property manager), we try to give our owners exceptional service and perks in ownership....example when we have to do any special assessments we give first owners to pay in full 3 FREE DAYS OF USE DURING OFF SEASON to make up for the special assessment. We also give only owners reduced rental rates, and perks wherever we can, etc. Owners who are coming to enjoy resort year after year are the life blood of ts..
Many of our owners have owned at our east coast beach location for 30 years and own fixed weeks. The ones who are not as satisfied are the ones who converted to points and don't understand what they have bought or how to use ts.
Sales programs are very confusing and the "buyer beware" should be emphasized. I have owned a mtn ts and this beach ts for 30+ years and have enjoyed trading the mtn week numerous times to travel to cabo,
Disney, many places, to luxury resorts at a very small amount BECAUSE I was an owner.
Yes there are rentals but if you love a location and enjoy family traditions yearly, my timeshare has been wonderful. I do agree that the industry needs to have an "out" for loyal owners, for their benefit as well as to maintain continuity in deed/billing trail.

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[theo]

Voluntarily deleted post. The post to which I was replying is actually much older than I realized at first and has already been fully addressed since then.

 

[WinniWoman]

As president of our small poa (24 units, we manage ourselves W local property manager), we try to give our owners exceptional service and perks in ownership....example when we have to do any special assessments we give first owners to pay in full 3 FREE DAYS OF USE DURING OFF SEASON to make up for the special assessment. We also give only owners reduced rental rates, and perks wherever we can, etc. Owners who are coming to enjoy resort year after year are the life blood of ts..
Many of our owners have owned at our east coast beach location for 30 years and own fixed weeks. The ones who are not as satisfied are the ones who converted to points and don't understand what they have bought or how to use ts.
Sales programs are very confusing and the "buyer beware" should be emphasized. I have owned a mtn ts and this beach ts for 30+ years and have enjoyed trading the mtn week numerous times to travel to cabo,
Disney, many places, to luxury resorts at a very small amount BECAUSE I was an owner.
Yes there are rentals but if you love a location and enjoy family traditions yearly, my timeshare has been wonderful. I do agree that the industry needs to have an "out" for loyal owners, for their benefit as well as to maintain continuity in deed/billing trail.

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I love this post because this is exactly what I always thought of timeshares as being ideally and how we view our ownerships, though sadly one of them is being gobbled up by an infamous monolith of a timeshare company. The other is now part of a smaller regional vacation club company, but we own fixed, deeded weeks/units at both resorts.

Unfortunately, many resorts do not appreciate the long time fixed week owners that steadily pay their maintenance fees every year. The ones that care about the maintenance of the place. The ones that care about the reputation of the place because they come every year.

We are experiencing this right now at the one being gobbled up. Instead we get nickled and dimed for everything and lose privileges while the points owners come in and out and get all the benefits.

The change to points systems has really hurt the homey feel (like a second home) and experiences at many timeshare resorts. And it has made many people unhappy because they were told the lie that they could just exchange into the resorts (including back into their own home resort) anytime and go anywhere.

 

[ronparise]

I love this post because this is exactly what I always thought of timeshares as being ideally and how we view our ownerships, though sadly one of them is being gobbled up by an infamous monolith of a timeshare company. The other is now part of a smaller regional vacation club company, but we own fixed, deeded weeks/units at both resorts.

Unfortunately, many resorts do not appreciate the long time fixed week owners that steadily pay their maintenance fees every year. The ones that care about the maintenance of the place. The ones that care about the reputation of the place because they come every year.

We are experiencing this right now at the one being gobbled up. Instead we get nickled and dimed for everything and lose privileges while the points owners come in and out and get all the benefits.

The change to points systems has really hurt the homey feel (like a second home) and experiences at many timeshare resorts. And it has made many people unhappy because they were told the lie that they could just exchange into the resorts (including back into their own home resort) anytime and go anywhere.

When you say "many resorts do not appreciate the long time fixed week owners" you are missing the point that the resort is the owners, and the owners (through their HOA) is the resort. and if what you say is true, (the resorts dont appreciate the owners; it is equally true that the owners dont appreciate the resort.


Why is that??

I think two things, 1) blue week owners have finally gotten tired of subsidizing the red week owners, so they walk away, and 2) the long time fixed week owners are dead or will soon be dead. Since there is no sales force and probably nothing to sell that competes favorably with the new points systems...the expenses of the resort are shared by fewer and fewer owners each year. Its hard to appreciate something that costs you twice as much as its worth.

Bottom line is that the old fixed week timeshare model doesn't work any more. (especially at the seasonal resorts) So enter the big points systems to the rescue. They will either pick up and integrate the resorts like yours into their systems, or the fixed week resorts will close their doors and be buried with their original owners.

 

[Roger830]

The fixed week model still works in Florida at Hollywood Sands.

Many blue weeks are sold for $1500 -2500, red weeks $4000-7000 per Broward county website.

A couple of years ago an option to buy II points was added.
I noticed that this year company called Great Destinations has been selling some of the worse weeks to people in California for $7000-8995, I suspect with low-value useless points.
The closing is thru a Chicago company.

There's always a new scheme and a sucker born every second.

 

[rapmarks]

I noticed something on my last three exchanges, long time owners of multiple weeks returning for years to same resort with no interest in exchanging. We went to theses resorts and heard the same story, we bought 25 years ago, we own four weeks, we own twelve weeks, we own eight weeks. While I see bluegreen being offered for free, one lady paid nine thousand for week 44 bluegreen points deeded at Via Roma. There is something to be said in favor of small fixed weeks resorts.

 

[WackyLucy]

The fixed week model still works in Florida at Hollywood Sands.

It's probably fair to say that the fixed week model still works and will continue to work at many (maybe most) places in coastal Florida, no?

However, it's easy enough to see how it would certainly be otherwise where seasonal demand varies significantly.
For example, who wants to be on Cape Cod in the dead of winter? Not me, not even for free.

 

[WinniWoman]

When you say "many resorts do not appreciate the long time fixed week owners" you are missing the point that the resort is the owners, and the owners (through their HOA) is the resort. and if what you say is true, (the resorts dont appreciate the owners; it is equally true that the owners dont appreciate the resort.


Why is that??

I think two things, 1) blue week owners have finally gotten tired of subsidizing the red week owners, so they walk away, and 2) the long time fixed week owners are dead or will soon be dead. Since there is no sales force and probably nothing to sell that competes favorably with the new points systems...the expenses of the resort are shared by fewer and fewer owners each year. Its hard to appreciate something that costs you twice as much as its worth.

Bottom line is that the old fixed week timeshare model doesn't work any more. (especially at the seasonal resorts) So enter the big points systems to the rescue. They will either pick up and integrate the resorts like yours into their systems, or the fixed week resorts will close their doors and be buried with their original owners.

Yes- I get what you are saying in general. I guess what I was talking about is management. Smuggs is still technically a privately owned resort. Wyndham is right now just sales. Tricky and deceiving, I know. But what you don't realize is at Smuggs things don't totally work the way you explained it about the off season weeks. For the most part-everyone who bought a fixed prime week HAD TO buy a floater- it is ATTACHED to the prime week- So we are not subsidizing anyone but ourselves.

And- in many situations, a timeshare is handed down to an adult child that may want it. At that point, that child might convert to points or whatever.

In the case of Smuggs, many people do not want to convert so there are a lot of hold outs. There are still more RCI points and more deeded fixed week owners than Wyndham owners there. And, many people own in older buildings that Wyndham does not want it seems. There are a number of those people in those old buildings who want to sell or give away their timeshares and can't. Then you throw in the fact that they do not have use of a pool without purchasing a benefits package and it gets even more complicated. (yes- that's right, smuggs will not let anyone owning or staying in those village buildings use the main pool without buying a whole package. Tell me how nice that is!). If you want to say the owners don't appreciate the resort- well maybe that is somewhat the case NOW- NOW that over the past few years we see what is going on. Smuggs owners are very passionate about their ownerships and essentially love the resort. That is why many come back year after year, and so do their grown children with their children. But- we also know when we are not being treated right, too and we remain vigilant.

 

[WinniWoman]

I noticed something on my last three exchanges, long time owners of multiple weeks returning for years to same resort with no interest in exchanging. We went to theses resorts and heard the same story, we bought 25 years ago, we own four weeks, we own twelve weeks, we own eight weeks. While I see bluegreen being offered for free, one lady paid nine thousand for week 44 bluegreen points deeded at Via Roma. There is something to be said in favor of small fixed weeks resorts.

That's right. And when we were at Rams Horn resort in June, there were a lot of fixed week owners who had owned for many years and told us their kids were also going to take over.

 

[rapmarks]

One of the resorts with returning long time owners is in Door county, and you couldn't have a shorter summer season. But the owners enjoy the quiet bin the off season too.

 

[ronparise]

So it seems that by agreeing with the title of this thread. “The timeshare industry is broken” I have provoked the opposite response. No it isn’t

Gotta wonder why the Smuggs HOA decided to bring in the devil to help out if everything is good there

 

[WinniWoman]

So it seems that by agreeing with the title of this thread. “The timeshare industry is broken” I have provoked the opposite response. No it isn’t

Gotta wonder why the Smuggs HOA decided to bring in the devil to help out if everything is good there

Management/aka the private owner brought the devil in. Each building at Smuggs has it's own HOA. It is not one big HOA. Also, there are still quite a number of full year owners, as well as partial share owners, in addition to the lowly club owners like me that own 1 or 2 weeks. It's a mish mosh.

Of course, things have not been hunky dory there- behind the scenes. That is why - as you said- they have been changing things year after year. First to RCI points; now Wyndham; changing the way benefits can be used. Changing the way owners can rent out their weeks. Nickel and diming things.Bringing in local camps and day users.

On the other hand they have spent quite a bit of money on things like the million dollar Fun Zone for kids.

Owners still love their time there for the most part. Most when they exchange- they exchange back in- not to go elsewhere, though certainly people do go to other places sometimes. It has been that type of resort where people who own want to go there. I see many of the same faces every year at the pool and the resort- and also a lot of new faces. Many of us are also sentimental about the place where we have had so many happy memories with our families. It's just that people want to keep it that way, but, alas, everything changes eventually.