I'll try to explain. Before we bought in Maui, we'd traveled to Maui twice. The first time we went, in '04, we rented a hotel room at the Renaissance Wailea (RIP) for $325/night + taxes for an OF room. We rarely spend that much on a hotel room, but it was our 15th year wedding anniversary and decided to splurge.
In '06, we traveled with friends and split the cost for a $325/night + $190 one-time cleaning deposit, privately owned 2 bdrm condo that we rented via VRBO. Though the grounds were not as nice as WKORV, the room itself was superior in terms of space, layout, convenience, and lanai. I'm talking granite countertops, beautiful tile, plush beach towels, etc. And the view was awesome. Pool was meh, but they offered free lounge chairs right on the beach. And I have to say it was a great week.
In '07, we decided we'd travel to Maui in '08 and take the kids for the first time. My first consideration was to rent the same villa we'd rented in '06. But when I checked rates, they'd gone up considerably ($425/night). At that time we looked into the possibility of buying a TS, with the understanding that we'd frontload some cash and then have the ability to "rent" our unit in subsequent years at a significant discount, so that our annual vacation dollars would spread farther. After a lot of research, we settled on the Westin.
In crunching the numbers to see whether it made fiscal sense to fork over $50k + $1600 MFs each year, we used the $425 figure as a point of comparison as that is how much it would cost us (and how much we were willing to pay) for a comparable sized unit right up the street from WKORV. At the time, the numbers made sense because our model assumed that MFs would hold steady or increase slightly. Remember, that upfront fee ($50k in my case, up to $100k for others who bought from the developer) was supposed to buy us the right to rent our villa at a steep discount in subsequent years vs. comparable rentals because MFs are supposed to be just that - just the cash needed to run the place.
What has happened instead, is that the MFs have increased to the point where I can now rent the same 2 bdrm unit that I used as a point of comparison for LESS than what I pay in MFs at WKORV. In other words, even if MFs held steady to 2010 figures, our break even point is something ridiculous like 45 years.
Bottom line is that there is very little incentive for buying Starwood TSs anymore, especially the higher end ones because we can't even try to assuage the hurt by trading up like SVV or SBP owners can. They've increased MFs so much that it simply doesn't make sense, even on an emotional level, to pay thousands of dollars for the right to rent at current market rates. Because I could do that, on my own, for free, with no long term commitment.
Hope this helps.
