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TPU Arbitrage - Buy it or Avoid it?

DavidnJudy

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Yes now that I re-read you are right, I read it as don't deposit anything with RCI. I would agree, iF I owned an undervalued week I would probably not deposit into RCI, but not many people even know about this group and they will deposit them, and then we can work the system and benefit :) (if we want to) by buying something that gets great TPU.

Just an idea.
 

rickandcindy23

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The Fox run argument again. See my previous reply.

Shakes head. It deserves 22 TPU for July 4th - inland resort.

II loves Foxrun, so I don't give it to RCI. What argument am I making? If you want to know the truth of it, RCI gets too many Wyndham deposits in the NC mountains to value Foxrun, while II doesn't.

You are the one that wants an argument, and you won't get one from me. I believe you are GREATLY underestimating the knowledge of Carolinian, who was a board member at an Outer Banks resort that is shortchanged with TPU's. Even though you seem to think he is off his rocker, there are those of us here that respect him for his knowledge, and his longevity as a TUG member.

Just try to get an exchange in summer for the OBX about six months out, then look for summer in Orlando for the same timeframe. It's not rocket science.

A look at the Crowd Calendar for Orlando, and it's obvious why anything there gets high trading power for Christmas, New Year's, and just about any other holiday. Summer is high value, because the crowd levels are 9 or 10 for most summer days. Spring break is high too. So a high number of people in one area means more demand.

I have been saying the values are wacky for a long time. I could never see Summer Bay Houses (Orlando) for any time of year with my blue week, and now I can use the TPU's for my blue week and get change back. Sure, it's the slow time of year for Orlando, but that is when we go.

The new system is great for me. I am not complaining. I own MB summer and get incredible trading value for my weeks. But if you think all of the pointing is 100% fair, and that it all makes sense, I disagree. RCI will adjust things at some point, because as I said before, that blue week is really not worth the points they give me for it. But I am happy, with $480 in MF's. I will not be surprised, when RCI comes back and switches things up a bit, because I see the inconsistencies.
 

DavidnJudy

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I totally agree the Points are NOT fair. They seem to be somewhat unfair and in some cases VERY unfair. And in some cases very fair.

What I am saying is that you can use that to your advantage. If you don't want to use it to your advantage then don't.

And btw, I value carolinian's oppinion as well. And I think he does shed a great deal of light on what has happened between RCI and the developers. I truly appreciate that.

Actually, I think we are all in agreement on the facts. The question just becomes do you want to work the system or walk away from it? Or maybe half play the system like you are doing - some RCI some II.
 

Carolinian

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I totally agree the Points are NOT fair. They seem to be somewhat unfair and in some cases VERY unfair. And in some cases very fair.

What I am saying is that you can use that to your advantage. If you don't want to use it to your advantage then don't.

And btw, I value carolinian's oppinion as well. And I think he does shed a great deal of light on what has happened between RCI and the developers. I truly appreciate that.

Actually, I think we are all in agreement on the facts. The question just becomes do you want to work the system or walk away from it? Or maybe half play the system like you are doing - some RCI some II.

There are other options as well, such as renting out a high demand week like OBX summer week and then using the profits to get one of RCI's cheap rentals somewhere. That can give you an absolutely free vacation week.

Another is using II or other exchange companies. Personally, my summer OBX week is rented out this year and my summer UK weeks are deposited with DAE and SFX. Next year, I might try giving one of those weeks to UKRE, since they will give me double credits for them since they are in the UK school holidays.
 

DavidnJudy

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Sorry when I said walk away from it - "it" meant RCI and not your timeshare (although that is a viable solution too in some cases). You can walk away from RCI and look at other options: other exchanges or renting. Or work the system and other options.

But where I would praise RCI is giving you the tools to see what your deposit will give you in TPU and being able to see ALL the weeks you can trade for even if they are MORE than the TPU you have. I like that transparency, even if it is not transparency into how they got the number, at least you know a "current" number.
 

tombo

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You have missed Carolinian's point entirely. He is saying not to deposit Outer Banks, or the other areas RCI gyps out of TPU's. I agree with it. Foxrun in North Carolina is highly valued by II, but RCI gives even 4th of July just 22 TPU's. I would never give RCI a chance at my Foxrun weeks again. II gets them every year.

Actually Carolinian says to never deposit any week with RCI. He complains constantly about the values assigned to london weeks and OBX weeks as examples of why the systemis crooked and to prove his point that exchanging with RCI is bad for all. I can regurgitate plenty of his quotes where he advises to never deposit anything with RCI again. Look hard and see if you can find a single post where he admits that there is value with depositing and exchanging with RCI. He tells all to use independents like SFX and DAE, and even II, but never RCI. He said he personally will never deposit with RCI again. The closest Carolinian will come to saying exchanging through RCI is ever a good thing is to say that Orlando gets too many TPU's and that is why those people are happy, but it is at the expense of the true high demand areas.

I as you know also own in the North Carolina mountains at a resort you own and do not get high TPU's for my prime week. I wish it was higher. I wish that they valued it as much as I feel it should be valued. However they don't. Just because some of my weeks don't get the TPU's I feel they deserve doesn't totally make RCI a worthless proposition.

To Carolinian the only value RCI has currently is renting cheap weeks from them. He refuses to accept the fact that most of us have found ways to exchange in the new system better than we could under the old system.

Unlike carolinian we have found ways to get benefits from the new weeks system. We post about ways to get the most bang for your buck under the new system. Carolinian will never acknowledge that you, me, or anyone else is justified in liking the new system. He will never admit that MOST of us on TUG prefer the new system. His posts are simply anti RCI and do not enighten or inform.
 
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bnoble

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I loves Foxrun, so I don't give it to RCI. What argument am I making? If you want to know the truth of it, RCI gets too many Wyndham deposits in the NC mountains to value Foxrun, while II doesn't.

This is the single greatest thing about the TPU system. You know what you get for depositing, and you know what it takes to get what you want. In the old days, you needed trade tests and comparative searches to figure out what was and wasn't valued by RCI. The new system makes everyone immediately an informed consumer, and they can make the decisions they want going forward. If you don't like the deal you are offered, don't deposit. If you do, do.

There's no sense bitching about "fair" or "over-valued" or "under-valued". The values are what they are. If they are terribly out of line with objectivity, then people with under-valued weeks will not deposit them, lowering their supply and increasing their valuation (or causing RCI to lose money on lost deposits/exchanges). Likewise, people with over-valued weeks will over-deposit them, raising their supply and lowering their value (or causing RCI to lose money on a build-up of inventory that causes supply to go out-of-whack with true demand).

I don't particularly care whether RCI gets it right or gets it wrong. If they get it right, more money for them, and that's great. But, if they get it wrong, well, I can take advantage of that too. In the words of Captain Jack Sparrow: "take what you can, and give nothing back."

In the Foxrun case, the right thing is happening. There is a glut of Wyndham NC Mountain inventory in RCI, and relatively little in II. By giving relatively low TPU for those Foxrun weeks, it has encouraged Cindy to deposit with II. That's fine with RCI---they already have enough. It works for Cindy, because she gets better value in II. Everyone wins here, and that sounds great to me.
 
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rickandcindy23

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I have personally never been happier, but you just never know what RCI will do next. I shudder just thinking about what could happen. But for now, I deposit way ahead and take advantage of every over-pointed week.

It's a game, we all play it, and we all know the rules change. I have bellyached enough about it at times (like after 5/31/2009) to make some of you nuts. :D
 

elaine

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my take on the new TPUS:
the good--my parents get 56 TPU for their week 51 Orlando week;
the bad--we can no longer use their other dog trader early out to snag great exchanges as 12 TPU is never ever going to get Houses of Summer Bay for Easter again (did that in 2008--sweet);
the fair--my 3BR 4th of July HHI beach week gets 38 points---and I could trade it for a 2BR summer Hawaii--I might not like 38 TPUs, but that seems like a fair trade for me.
It is hard to see how RCI can continue to overweight Orlando weeks, and give 2-3 exchanges for 1 week---so I really can see those goalposts moving.

Now, let's compare this against II. My NC beach week is a silver crown in RCI and gets 32 TPUs. It is a 5* in II, so we joined and deposited with II. Did OK the 1st trade. Now, for the past year, pretty much nil. Has the trading power changed? What's up? I don't know---but I don't like guessing.
So, I think the next year, either neighbors can rent it for maintenance fees, or I will give it to RCI for 32 TPUs. So, in the end, I like knowing up front what's up and not guessing--so the new RCI wins for me--over/underpointing and all.
Also, for all of my trades, using TPUs has "cost" me less than RCI points for the same/similar units. Elaine
 
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Mel

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If anything, the new system gives us a better look at how RCI values thing - and what behaviors they want to encourage:

They want to encourage split unit deposits. We all know for years that it wasn't worth depositing a "whole" unit unless you needed a bit of a boost for a difficult trade. Now they have quantified it, and the "boost" isn't worth much.

The result of course is that we see loads of 1BR lock-off units deposited, because most new resorts seem to be designed with lock-offs.

We can also see that RCI no longer offers any real premium for larger units (if they ever did). I would think that demand for 2BR or larger units would be higher than for 1BR units, and that supply is certainly lower (more than 50% of the deposits available in the US are 1BR or smaller).

There is also not much premium for full kitchens vs. partial kitchens. Given that one of the benefits of timeshare which used to be stressed was that full kitchen, and the reduction in vacation costs associated with being able to cook some of your meals in your unit. But then, if my daughters' friends families are any indication, most families don't cook at home, so why would they cook on vacation? Yet the full kitchen units are usually the larger half of the lock-off, so those get taken first, again without a premium price.

It's the lock-offs that show where RCI let things get out of hand. Carolinian loved the old system where we traded in what we called "bands" but it was precisely those bands that already allowed the lock-off owners to deposit as two units and use one of those to trade back in to the equivalent full unit, and still have a deposit left to exchange. What we're seeing now still works as bands - most members are given enough extra TPU when they deposit to trade up a bit, or have leftovers if they trade back into their home unit. There are exceptions, but there were exceptions under the old system too. These are most likely the places where we all assumed that the units were simply taken immediately. Other exceptions are those floating week resorts where RCI gives the same deposit credit for all weeks - which is probably governed by contract with the resorts.

At least we can what the inefficiencies are now, and act accordingly.
 

MichaelColey

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There are other options as well, such as renting out a high demand week like OBX summer week and then using the profits to get one of RCI's cheap rentals somewhere.
Aren't you just "feeding the beast" by getting cheap rentals from RCI? If you really disapproved of RCI renting units, you wouldn't rent from them.

You're taking advantage of "unfairness" (or inefficiencies, as an economist would call them) in the system, just as much as we are.
 

MichaelColey

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...my parents get 56 TPU for their week 51 Orlando week...It is hard to see how RCI can continue to overweight Orlando weeks, and give 2-3 exchanges for 1 week---so I really can see those goalposts moving.
Week 51 (sometimes) and 52 are the ONLY weeks where this is the case, and if you look at the demand in Orlando that week, it's clearly justified. Most Orlando weeks are under 20.
 

tombo

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Aren't you just "feeding the beast" by getting cheap rentals from RCI? If you really disapproved of RCI renting units, you wouldn't rent from them.

You're taking advantage of "unfairness" (or inefficiencies, as an economist would call them) in the system, just as much as we are.

To rent from RCI while constantly complaining about RCI renting out deposited weeks is like buying stolen property and then complaining incessantly about the high theft rate in the area.
 

elaine

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I don't know that 56 TPUs is "clearly justified" by the demand for Orlando--I've been there and it's crowded, but why isn't it 56 TPUs to trade into an Orlando week 51 or 52? And why is it such an easy trade at 1 year out? However, we are certainly going to ride the gravy train while it lasts. We got 2BR Hawaii (thanks to TUg sighting), 2BR Orlando @ Easter, 2 Br in the fall in the NC Mountains from 1 deposit.
 

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The only purchasing strategy I support is one where the maintenance fees for a property are likely to remain at roughly 50-75% of what you can expect to rent the unit. Then, you can use it, rent it, exchange it, or whatever and you are guaranteed to get a good value for your invested capital.

This seems to be a wise strategy. How does one figure out how to buy a unit that has MF's at 50-75% of what one can rent it out for?
 

DavidnJudy

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There could be twice as much inventory in Orlando for Christmas, and they'd fill it. Whether you think that justifies the number or not, I can't say.

That's the gold there - I bet RCI puts a lot more weight on DEMAND than supply. If they have 10000 customers who want XMAS in Orlando, and they have 500 who want OBX on the beach. Even if there are only 2 OBX on the beach that get deposit in the summer, it is worth less to RCI than if 8000 XMAS in orlando get deposited.

Why? Because if they can fill all those Orlando requests than 10000 * 200 exchange fee = 2 million dollars - cha ching

But if they can fill all the OBX requests - well 500 * 200 = 100,000.

Demand could be more important to RCI because they get the exchange money.

Same goes for MB - I am telling you it probably get 10 times the requests that OBX or HHI gets in the summer. To me OBX and HHI are one time you go there - ok it is nice - but people could go to MB every year for multiple weeks and it shows in the number of visitors being 10 times as much.

So if RCI has 5000 requests for MB and 1000 requests for HHI, well duh it is going to rate MB higher EVEN if the number of units it gets from MB is close to 5000 and the number it gets from HHI is only 50. RCI makes more money off MB and Orlando because more people want to go there, regardless of supply.

Of course there is also developer favoritism. But really I think RCI puts more emphasis on Demand for destinations, than supply at destinations.

Biggest demand places in the US have to be:

Orlando
MB Summer
Southern California (LA, SD)

Most requests, therefore most $$ for RCI.

JMHO.
 

Carolinian

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No you don't. You ONLY know what RCI will charge you in points lite IF the week you want is in the online inventory. We all know the better weeks are more likely to be obtained by ongoing searches, and for those you are completely at RCI's mercy on what they decide to charge you. If they want, they can arbitrarily charge a lot more than they are currently giving for deposit of the very same week. The red flag of corruption of the system, even more than specific resorts that are deliberately undervalued or overvalued, is the fact that the price in and the price out for the very same week at the very same point in time may be widely different and it is completely under RCI's control. If the week you want is on the online inventory, yes you do know what RCI is charging, but for an ongoing search, all you can do is guess. Some transparency!!!

You also don't seem to get that RCI's numbers are not driven strictly by trades, so too high or too low numbers will not necessarily even themselves out over time. They are driven by RCI's other agendas, most specifically its rental agenda, and that corrupts the entire exchange system. As long as RCI is not transparent about their rentals and how they impact exchanges, then the whole system is corrupt. You always want to assume that RCI is what it was in the old days, an exchange company. Look at their press releases. They now describe themselves as a ''timeshare rental and exchange company'' and it is telling which of those they put first!


This is the single greatest thing about the TPU system. You know what you get for depositing, and you know what it takes to get what you want. In the old days, you needed trade tests and comparative searches to figure out what was and wasn't valued by RCI. The new system makes everyone immediately an informed consumer, and they can make the decisions they want going forward. If you don't like the deal you are offered, don't deposit. If you do, do.

There's no sense bitching about "fair" or "over-valued" or "under-valued". The values are what they are. If they are terribly out of line with objectivity, then people with under-valued weeks will not deposit them, lowering their supply and increasing their valuation (or causing RCI to lose money on lost deposits/exchanges). Likewise, people with over-valued weeks will over-deposit them, raising their supply and lowering their value (or causing RCI to lose money on a build-up of inventory that causes supply to go out-of-whack with true demand).

I don't particularly care whether RCI gets it right or gets it wrong. If they get it right, more money for them, and that's great. But, if they get it wrong, well, I can take advantage of that too. In the words of Captain Jack Sparrow: "take what you can, and give nothing back."

In the Foxrun case, the right thing is happening. There is a glut of Wyndham NC Mountain inventory in RCI, and relatively little in II. By giving relatively low TPU for those Foxrun weeks, it has encouraged Cindy to deposit with II. That's fine with RCI---they already have enough. It works for Cindy, because she gets better value in II. Everyone wins here, and that sounds great to me.
 
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Carolinian

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Week 51 (sometimes) and 52 are the ONLY weeks where this is the case, and if you look at the demand in Orlando that week, it's clearly justified. Most Orlando weeks are under 20.

Well, when another Tugger posted that a VV@P week 52 was given 50 points lite for a deposit but RCI at the very same time was only asking 10 points lite for an exchange in to the very same unit/week, your theory goes right out the window. And that was a year or so out, not a last minute trade. What they are asking for an exchange online is its real value. What they are giving for a deposit is its inflated ''value''.
 

Carolinian

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Aren't you just "feeding the beast" by getting cheap rentals from RCI? If you really disapproved of RCI renting units, you wouldn't rent from them.

You're taking advantage of "unfairness" (or inefficiencies, as an economist would call them) in the system, just as much as we are.

As a fairly recent Tugger, it is obvious you do not know the history.

I was the first one on TUG to point out that RCI was going into the rental to the general public business, based on my correct interpretations of 1) the language used in the TUG pre-launch moderated chat on GPN (the early name of RCI Points), and 2) a letter sent by RCI's CEO to affiliated resorts which talked about ''taking timeshare to the mass market'' without saying exactly how they planned to do that. I also pointed out the huge negatives to timesharing from their doing that.

After pointing that out, I got a huge pushback from RCI supporters on these boards, some of whom were in denial that RCI was even renting long after it became obvious to most. I remember such things as when SkyAuction became one of the early major RCI rental venues and many Tuggers figured it out that the auction listings took you to the RCI Directory, so it had to be RCI doing the renting, but the very vocal pro-RCI band of deniers here said no, it wasn't. One, who is still vocal on TUG supporting RCI, even posted that all the timeshare weeks on SkyAuction must come from one guy who owned a LOT of timeshares BUT it was NOT RCI! Well, when Tuggers won those auctions, the confirmations they got were standard RCI confirmations, so that left the deniers without any ground to stand on.

Getting to the point, during that era, one of the standard lines of the RCI supporters, after most of them belatedly admitted RCI was renting was ''don't fight 'em, join 'em''. They were constantly telling me I ought to take advantage of the cheap rentals, too. I initially took the position you are now urging. But as I transitioned more to other exchange companies, my own deposits were no longer at stake so much, so I started taking the advice of the pro-RCI crowd. I am still a member until my dues run out, and since I am not giving them deposits, I need to get something from my dues. Also, you will note, that my complaint has always been about cheap rentals to the general public. While rentals to bonafide timeshare owners who are also dues paid members of the exchange company do some damage, it is far less than the rentals to the general public.

Now as a pro-RCI newby, you have taken their previous pro-RCI arguments full circle, and are arguing it from the opposite side.
 
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elaine

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If RCI is awarding TPUs based upon demand, (and for this discussion, let's assume that weeks 51 and 52 Orlando are the most requested trade in RCI), then why doesn't it cost 50 TPU to get a trade into the resort at peak time? If it is truly supply/demand, then a higher demand should push the TPU upwards in an effiicient (fair) market system.
For ex, a Hawaii resort gets 42 TPU for deposit and it COSTS 42 TPU to trade into the resort. I'm sure high season Carib. (if there were any online) would be the same--say 50+ TPU for the Westin St. James and 50+ TPU to trade into it.
But, not so for Orlando and MB. You get TPUs far and above what it costs to trade into that same resort for the same time period. Something is quite off. Which is why 1) love it now, as parents get 56 TPUs for Orlando week and 2) think the goalposts could shift at some point, because there is no way to justify this pointing in supply/demand.
And, for the Europe debate---we love Europe--but airfare for a family is super high. So, we go to Orlando 5X as much as Europe. I think no trips or 1 trip to Europe is the norm for US TS owners--and usually that trip is a Grand Tour--in which a TS does not fit the plan. So, on that, I have to agree that O is #1.
 
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Carolinian

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You have to look at demand globally, however, not just demand from a particular area. It doesn't matter what the demand for Villas at Mugwump Swamp are from California, Massachusetts, North Yorkshire, Normandy, or greater Johannesburg are. It matters what the totality of demand from those places and everywhere else in the world is.

There are actually places out there where there are lots of timeshare owners but no timeshares. Such a place is Russia, where a lot of resellers and even developers have marketed enough timeshare inventory that RCI now actually has an office in Russia and DAE at least has a specialized Russian webpage. Most of the inventory they sold was in Spain. There was briefly one timeshare in Russia, in St. Petersburg, and never any availibility, but last time I looked it was no longer in the directory. Those Russian timeshare owners are going somewhere and it is not their own country. It might be surprising how many of them are coming to the US or going to South Africa.

It might surprise you how many people do cross the pond on timeshare exchanges. I know I run into quite a few Americans, and always have, on European timeshare exchanges. And going the other way, I have a British colleague who works in a similar position to mine for another organization who owns a vacation house in Florida that he and his family travel to every summer. And incidentally, he liked my suggestion that he deposit some weeks from his house to DAE and participate in timeshare exchanging.

Again, what matters on demand is the totality of demand, not what the demand is from only a limited geographical area. It doesn't matter where the demand for London is from, whether it is from France, Russia, the UK, the US, or the moon. It matters what the total demand is for London from all sources relative to supply of London weeks.

I use London as a major example because RCI has itself said that London is the pinnacle of the supply / demand curve. They did that in the rules for their VIP program as I explained earlier.


If RCI is awarding TPUs based upon demand, (and for this discussion, let's assume that weeks 51 and 52 Orlando are the most requested trade in RCI), then why doesn't it cost 50 TPU to get a trade into the resort at peak time? If it is truly supply/demand, then a higher demand should push the TPU upwards in an effiicient (fair) market system.
For ex, a Hawaii resort gets 42 TPU for deposit and it COSTS 42 TPU to trade into the resort. I'm sure high season Carib. (if there were any online) would be the same--say 50+ TPU for the Westin St. James and 50+ TPU to trade into it.
But, not so for Orlando and MB. You get TPUs far and above what it costs to trade into that same resort for the same time period. Something is quite off. Which is why 1) love it now, as parents get 56 TPUs for Orlando week and 2) think the goalposts could shift at some point, because there is no way to justify this pointing in supply/demand.
And, for the Europe debate---we love Europe--but airfare for a family is super high. So, we go to Orlando 5X as much as Europe. I think no trips or 1 trip to Europe is the norm for US TS owners--and usually that trip is a Grand Tour--in which a TS does not fit the plan. So, on that, I have to agree that O is #1.
 

MichaelColey

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Well, when another Tugger posted that a VV@P week 52 was given 50 points lite for a deposit but RCI at the very same time was only asking 10 points lite for an exchange in to the very same unit/week, your theory goes right out the window.
You continue to use that example, but it has no basis in reality. If I look for week 52 in Orlando, the cheapest unit I see for 2011 requires a trading power of 22. The cheapest I see for week 52 in 2012 requires a trading power of 33. Depositors would get a trading power of 48 for that same week.

And exactly how does this disprove my "theory"?
 

Carolinian

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You continue to use that example, but it has no basis in reality. If I look for week 52 in Orlando, the cheapest unit I see for 2011 requires a trading power of 22. The cheapest I see for week 52 in 2012 requires a trading power of 33. Depositors would get a trading power of 48 for that same week.

And exactly how does this disprove my "theory"?

You must realize that these numbers change with RCI. Another Tugger found the 50 in / 10 out example and posted it a few months ago. While the numbers may have shifted a bit when you look at this point in time, the principle is still the same. A week that is really only worth 22 points lite is given over twice that to deposit it. If week 52 were really as hot as you claim, it would take the whole 48 they give the depositor, probably more.

And it is not just Orlando. Williamsburg is another one of the classic overbuilt areas, and the numbers someone posted on another board that are awarded there also exceed those of many of the rare, hard to find areas. Same pattern. VV@P however does make the best poster child as it is the resort Bootleg identified as having the biggest oversupply in the entire RCI system.
 
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