What’s the point?
By Sharon M. Gundrum
Unused points can make or break a vacation ownership. If you own points or are considering a points purchase, this article will help you decide how best to use them. Points are just one way in which the world of timeshare has changed tremendously since its beginnings back in the late 1960s and early 1970s. The website 10timesharesecrets details the industry’s growth from its origins in France, Hawaii, and Florida into a billion-dollar industry. According to the ARDA International Foundation and the newly released Economic Impact of the Timeshare Industry on the U.S. Economy, 2016 Edition, “… the U.S. timeshare industry generated approximately $80 billion of economic output through industry operations, vacation expenditures and capital expenditures.”
During that growth, the varieties of timeshare offerings became dizzying, including deeded versus right-touse contracts, fixed-week ownership, floating-week ownership, and rotating or flex-week ownership, to name a few. Add in Mexico and other countries where U.S. timeshare laws don’t apply to the transaction, and things became a whole lot messier.
Thankfully, as the consumers’ vacation needs/wants changed, the industry responded. Seeing the success of exchange companies, and the changing trend in the length of vacations, developers began to offer point-based ownership. This modification enabled their timeshare owners to have more control over their experience, ultimately simplifying it and ensuring a happier owner.
Benefits of choice
People love choice. It makes for a personal and tailored vacation, and it’s a big part of the point ownership system. Owners choose their resort, their length of stay, their unit size. The flexibility of such a program satisfies a traveler’s need for change, while avoiding the fees and complications of add-on exchange memberships. Families have more opportunities to gather, and a wider range of resorts (within the developer’s inventory) to explore. Owners have a greater perception that the ownership meets their needs and expectations. Recently, I spoke with a couple who was delighted to host all their kids and grandkids at a popular Orlando resort. Another owner told me her motorcycle club loves to visit resorts across the country, while paying her to stay on her points.
On the flip side, point purchase can be a slippery slope. Having the right number and level of points can determine availability, upgrades, room sizes, guest fees, more fees, etc., but not having the right number or level of points can leave owners feeling like they are missing out. They can easily fall victim to the great timeshare tragedy of “needing more.” They become easy prey for costly, additional in-resort point purchases. Often the pitch is too strong to resist. I’ve experienced the hard sell; it can be ruthless. Before they know it, the thing they said they would never do— buy more—is done. If you are convinced to purchase additional points that give you those coveted perks, then you may face a new problem: unused points. At point-of-sale, you were certain you would be able to use all of them, but it isn’t always easy to do. Family, friends, craigslist, Facebook? How do you ensure that they are used? No one likes paying for unused vacations. In fact, it is our customers’ main grievance with respect to their ownership.
Millions of points are available on the secondary market, which should give you pause. In many cases, you can get them for a very good price. Let’s hope you did your research. Many of those secondary-market points come stripped of the perks that made having them worthwhile in the first place. Don’t be surprised if you run into the same issue—too many points—and not that many options for what to do if you can’t use all of them.
Whatever the path to ownership, life can easily get in the way of vacation. From changes in work status to illness to advancing age, too many unused points can leave an owner disillusioned. To maintain your feeling of satisfaction with your timeshare, you need the right tools, one of which can be a rental program. Deciding how much vacation is reasonable—realistic is probably a more accurate term—for your family is the first step. Planning it and reserving early is the next step. Then take a look at what remains, and decide what to do with it. Are you comfortable farming the points out to family and friends? Depending on how many are left, this can become quite a job.
The rental option
Would you consider renting your points? Vacation-club points present an easier rental option than fixed weeks. Remember, people like choice. Reserving a week and hoping someone wants it makes for a tough sale, despite assurances that it’s a high-value week. For your renters, the only high-value week is the week in which they can actually align everything in their lives to take a vacation—Fourth of July or not.
Be realistic about the rental rate. Price shop. Vett your renters. Learn how to process payments and how not be taken advantage of. This also can turn into a big job. Rental programs for points are increasingly popular. But, just as I caution customers when they ask me about resale and transfer options, do your research. Be careful to ask the right questions:
• When and how will I get paid, and how much?
- Are the rates predetermined, or variable?
- What assurances will I have that I will be paid on time?
- Is there reporting on my rental activity?
- Is the agency willing to put me in contact with current customers who would be open to sharing their experience?
Be realistic about what you expect. Are you trying to cover costs or are you trying to make a profit? Know what your needs are, as different agencies offer different returns. Stay in communication, and be aware of what is happening with your points.
Also, be ready for the questions that so many owners eventually find themselves asking: Did I make the right decision to buy? How do I evaluate the success of my timeshare purchase?
After talking to hundreds of owners, surveying them, researching the topic, blogging about it, and more, I find that success appears to be related to usage— by them, family, friends, or even rentals. If the timeshare gets used, owners feel validated in their choice. Unused time and, more specifically, paying for unused time makes for an unhappy owner. As families grow and change, their needs do, too. Once it was easy to wrangle them all into the car and on vacation, but as they grow up and go out into the world, it isn’t that simple.
Additionally, the lens through which they consider the timeshare or vacation club purchase changes. It becomes an investment in time and connection, in vacations spent with family and friends, and the creation of memories. That’s the kind of investment that pays dividends.
Sharon M. Gundrum is co-founder and chief creative officer of Tripbound, a vacation rental agency specializing in rental of timeshare points, and of Vacation Management Services, a Tripbound division offering free management services for timeshare point owners. Both are based in Williamsburg, VA. For more information, visit Tripbound.com and VacationManagementServices.com or call 1-888-816-5214.