TimeSharing
Today
$4.
®
Issue #59
Sep/Oct, 2001
The Independent Voice of Vacation Ownership
Owners Balk at Converting to RCI
Points; Points Members Are Satisfied
According to RCI, the results of a study by its Ragatz Associates division showed
that members of RCI Points are using their points to exchange more frequently and
believe RCI Points provides greater value than traditional week-for-week exchange.
However, letters to TimeSharing Today indicate that many existing owners are resistant to, and even angry about, their resorts’ suggesting conversion to RCI Points.
“We’re very proud of this early response to our new exchange program,” said Ken May, president and CEO, RCI.
“But we will continue to look for ways to change and improve RCI Points so that it continues to meet the needs and
exceed the expectations of both our
siderations for timeshare buyers, and
consumer members and our affiliate
RCI Points offers greatly increased
customers.”
flexibility.”
The Ragatz study examined con“RCI Points is successful because
sumer experiences with the new proit offers something that our members
gram with RCI members from two
have never had before,” said May.
resorts, Silver Lake Resort in Orlando,
“RCI Points provides members with
Florida and Meadow Lake Resort in
ability to exchange their timeshare for
Columbia Falls, Montana. The study
not only resort accommodations, but
found that:
also other travel products such as air• Points members are utilizing
fare, cruises, rental cars…products
their benefits more often, an average
that RCI members previously could
fied” with their resort booking.
of one transaction every four months,
• When asked about the value only obtain through RCI as a cash purcompared to traditional weeks memof RCI Points compared to traditional chase. This allows members to maxibers who averaged one transaction
weeks exchange, 76 percent indicated mize the full value of their timeshare
every 10 months.
purchase year in and year out dependRCI Points provides “greater value.”
• 76 percent of these RCI
• Respondents were asked, “In ing upon their changing needs and prefPoints members reported booking a
hindsight would you choose the RCI erences.”
resort stay through the RCI Points proPoints program again?” An overgram, and 83 percent of these memwhelming majority, 89 percent, replied Conversions difficult
bers reported that making the reser“yes.”
A recent article in the industry
vation was “very easy” or “easy.”
“This great news further demon- trade magazine, Vacation Ownership
• When asked if they were able strates the popularity of RCI Points World, points out the difficulty facing
to book their requested time at the rewith consumers,” said May. “It is no developers who are seeking to consort, 86 percent indicated “yes.” Of
secret that flexibility in exchange is one vert existing owners to RCI points
all respondents, 88 percent indicated
of the most important purchase conthey were “very satisfied” or “satis(Continued on page 15)
TimeSharing Today
RCI Points
(Continued from front page.)
when these owners are already satisfied with the traditional week they
originally purchased. As a result, developers are now discovering that,
while existing owners are not good
prospects for converting their existing
weeks, these same owners are far
more receptive to puchasing points as
a means of upgrading their timeshare
ownership.
Many readers have written
about being solicited to convert their
weeks to RCI Points. Some of their
comments follow.
We are relatively new to timesharing and are puzzled by all the hoopla
about switching from weeks to points.
We bought a deeded week at Kona
Coast from Shell Vacations several
years ago. It was an impulse decision
made during a visit to Hawaii but we
felt somewhat comfortable as Shell is
headquartered in a northern suburb of
Chicago, not far from where we live.
Shell recently asked us to attend
a presentation downtown about their
new point system. To convert our
week to points would cost us $4,000
plus a substantial increase in our annual maintenance fee. In return we
would make all our reservations thru
Shell for $99/year versus II at $199/
year, received an offer to buy more
points at a discount price (it would be
cheaper to buy another week through
TimeSharing Today) as well as use
points for discount travel—air, hotel
and car.
What is the value of Shell points
in this situation? Granted, with points
there is the flexibility of vacationing for
several days rather than for a solid
week. Today, I compete with red owners only for a week in Hawaii or comparable place; with points I would compete with the universe—red, yellow
and green owners for a trip to Hawaii.
And as more baby boomers retire,
Hawaii and other red spots will be in
greater demand—which means they
Page 15
Sep/Oct, 2001
will cost more points over time, which
also means my investment has been
deflated if I convert to points (especially if I have to pay $4,000 to join the
point system). So, to borrow an old
phrase, “where’s the beef” in the point
system ?
Rich Weigel, Lisle, IL
small’.”
If this is typical of the conversion
fees being charged throughout the industry, it could be a bit expensive for
those who own at several different
resorts that convert to the RCI Points
Program.
Leonard Hampton
*****
*****
The May/Jun issue contains an
article entitled “Fairfield acquisition
delays RCI in NC.” The article states
that the acquisition has added some
complications in RCI’s efforts to get
approval to sell RCI Points program
in North Carolina. We own at Barrier
Island Station (BIS) in Duck, North
Carolina and were contacted by BIS
in mid-March about attending an RCI
points presentation.
Since that time we have attended
two such BIS/RCI Points presentations
to learn about the program and have
been offered opportunities to convert
our timeshare to the new points program at a cost of $2995. We were informed that the program has been going much better than they had anticipated and that over 50% of owners
offered the program so far had chosen to convert. We were also told that
for anyone who delayed until after all
current owners had been offered a
chance to join, the fee to convert would
increase to approximately $6000.
This doesn’t sound like there has
been much of a “complication” presented to the selling of the points program in NC.
I have not read anything about any
such conversion fee in any of the several articles on the subject, is this
something that is universal or is it just
BIS taking advantage of an opportunity to make a few more bucks? When
I asked RCI about the fee I was told
that “Other than a very small ‘royalty’
fee, RCI gets no money from the resort for these conversions.” BIS personnel refused to comment on how
much they received from the conversion fee, stating only that “RCI didn’t
tell you how much they meant by ‘very
Recently we used our timeshare
at Isle of Bali in Orlando, Florida. We
were invited to an Owners Breakfast
and informed that Isle of Bali was
changing to the “Points” management
system.
We purchased a one-bedroom unit
in their Ruby Season in 1999, which
we prefer to use in January or February; it is an improvement from Iowa
at that time of year.
We were told that the “Points”
system therefore would cause our
“Deed” for the week we purchased
to lose value and continue to lose until
it would no longer be of any use to us.
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TimeSharing Today
Page 16
Therefore it would be necessary for
us to purchase another unit starting at
no less than $12,000. This would be
necessary for us to have enough points
to travel anywhere.
Before our breakfast meeting was
finished, we became angry being told
we had “absolutely” no other options
available to us. So we said “Thank you
and good morning” and walked out.
They did not bother us the rest of the
time we were there.
Gene/ Kathleen, Monk, Lawlon, IA
*****
Something is not right! RCI is
changing its book work system and
wants to charge the members for nothing. They are committing robbery and
they seem to think it’s legal.
We just returned from a sales presentation at an RCI Points office in
Covina, CA. It seems that RCI is on
the fast track of converting their membership to a point system. They stated
that over 1 million members do not do
any trading and only use their own unit
year in and year out. RCI does not
make any money if these people do
not trade.
They have come up with a wonderful scheme to make money. If we
agree to join their new point system,
we will be able to now find units to
trade into because suddenly there will
be 1 million more units on the market.
The cost to us is $2750 to convert our
first resort and $1495 for each of the
other resorts we own. Who gets this
money that is being charged for a
change in the book work system? Is
RCI keeping it all or is there a kickback to the resorts that come on
board? Since we chose not to join then
at the presentation, we were told a later
conversion would cost $3290 per resort to join.
We were told that if our resort
agrees to join their new system, and
RCI Points expect 85% to join, we
would be left out when it comes time
to trading. We will only be allowed to
trade with those people who, like us,
Sep/Oct, 2001
are not in the point system. The implication was that we would probably not
find anything to trade into. If our resort agreed to go to this new system
and we refused, then we would be
bound by the decision of the Board of
Directors of our resort and we would
have little or no trading value left.
In this presentation, their system
was compared to the Marriott point
system, but they forgot to mention that
Marriott does not charge extra for its
point system.
Our question is do we sue our resort for changing to a system that will
cost us thousands of dollars more to
use or do we sue RCI for charging an
exorbitant sum for providing what they
had agreed to in the first place? Anyone willing to talk about a class action
suit?
Donald and Joyce Kessler,
Whittier, CA
*****
I purchased two timeshare weeks
at Fairfield Glade, Tennessee in 1988.
The costs were $12,600 and $5,950. I
am paying $392 and $260 annually for
the two weeks. I have other timeshare
weeks on Hilton Head Island. I have
bought and sold weeks for the last 10
years and have no delusions about
timeshare resales. Nevertheless, I contacted an agent in Tennessee this week
to sell my two weeks. The agent did a
“comp” and came back with the
“news.” For the week I bought for
$12,600, she could at best get $45004800, and for the other week about
$1500. This was all contingent on finding a willing buyer. She went on to say
that the resale prices for fixed weeks
has been decimated by the “point system.”
As far as I know, this point system scheme is part and parcel of RCI.
It may also be unique to Fairfield Properties. I have not hear/read anything
about the impact of the “point
schemes” on resale prices for the fixed
week owners. No one should buy
timeshare as an investment. But no
TimeSharing Today
one should have to fall victim to absolute value deflation because somebody
came up with a scheme to sell the
property in a way that is detrimental
to the interests of the current owners.
It seems to me that timesharing
fell victim to sales chicanery earlier in
its history and this type of schlock is
being revisited in a new disguise. Am
I all wet about this, or am I only the
last person to find out about it?? Beware, North Carolinians!!
Richard McCreary, Lexington,KY
*****
The recent decision by RCI to try
to convert everyone to the points system, the large amounts of money spent
on extolling the advantages through
advertising and promotion, and the
hype about the great success and tremendous benefits one receives by buying into this program leaves me with
the question: “What’s in it for my timeshare resort?” or “What are the ramifications, because nothing in life is
free?
Page 17
First, lets take a look at what the
motivation is for RCI. After all, a very
large company called Cendant purchased RCI several years ago and usually there are profit and return on investment issues when companies are
bought and sold. In addition, Cendant
purchased Fairfield Resorts and is in
direct competition with my timeshare
resort. What do you think is going on
in the Boardroom?
Assuming the average vacation is
now closer to home, of shorter duration, less money spent and a larger
percentage of people will use their
automobile for travel, we see a clear
marketing strategy by RCI. The strategy is to offer a shorter exchange
cycle of say three to four days instead
of one week and therefore double their
exchange fee income (the $124 fee)
with the only increased cost to RCI of
advertising and set up.
Looking closer, we see RCI
doesn’t need to pay for additional maid
service, wear and tear on facilities, in-
Sep/Oct, 2001
creased overhead cost of taking care
of additional people that my resort
needs to pay to accommodate twice
as many people. You and I will pay
for these costs by increased maintenance fees.
The end result is that essentially
you and I pay:
1. To join the points program,
2. All the increased costs at our
own resort through increased maintenance fees,
3. The increased exchange fees
to RCI because of the shorter exchange cycles.
It is a triple whammy. How is that
for a profit cycle for RCI? Do you still
wonder why they want everyone to
join the point system.
We, in effect, would be subsidizing RCI and Cendant. It is a great marketing strategy if you’re on their side
of the fence, but a very poor business
deal if you’re on my side of the fence.
So, don’t believe all the hype.
Larry Fookes, Cle Elum, WA