All over the timeshare news this week is that the mighty Resorts Condominium International (RCI) has past its 50th year of service to both the timeshare industry and timeshare owners.
Founded in Indiana in 1974 by Jon and Christel DeHaan, RCI was, at the time, the first of the exchange companies to come into existence. Over the past 50 years RCI has grown to over 4,300 affiliated resorts in 100 countries and is now part of the Wyndham Destination Network which in turn is now part of the Travel + Leisure group.
It really worked
In those early days of fixed week contracts, the exchange mechanism really worked, so much so it spawned competition in the form of Interval International formed in 1976 and Dial An Exchange, now known as 7 Across founded in 1997.
Much like RCI and Wyndham, Interval international is now part of ILG which in turn is part of Marriott. 7 Across is also part of the Wyndham Empire.
We say it worked, but how? In the early days an owner could “bank” their week with RCI thus creating an inventory of weeks available to other timeshare owners to “swap” what they had. The owner of the banked week could access the same inventory to swap their banked week for another resort or destination, all very simple stuff, but as the saying goes, “life is never simple” meaning there were problems on the horizon.
Problems on the horizon
The simple stuff we referred to above soon found the first complication, this occurred with the introduction of floating weeks. Timeshare had always been beholden to season allocation; common ways to describe the seasons was to sell them as:
- Red – High Season
- White – Shoulder Season
- Blue – Low Season
Naturally the cost to purchase was reflected by the season of purchase. Each season having approximately 17 weeks, however it’s not quite that simple. A red owner can use their week(s) in every season (52 weeks), a white owner may use blue as well (34 weeks) and a blue owner may only use blue season (17 weeks). Taking all this into account you can see how the exchange system started to become far more complicated, not only for RCI but also timeshare owners.
As time passed, developers started to phase out the fixed and floating week methods of ownership in favour of points based contracts. The first problem occurs is that each developer has their own points system, none of which dove tail into each other. RCI along with other exchange platforms had to create their own system to ensure uniformity between developer systems and their own exchange mechanism, creating their own points and introducing what is fondly known as trading power. Now when an owner banks their developer points they are artificially allocated a number of, in this case, RCI points. So from simple to complex back to a simple way to offer exchanges, but still problems abound.
Availability – The perennial problem
Let’s not fool ourselves into believing that developers invented points to make owners lives easier, far from it, points were created to increase sales. The theory is that with a single apartment using the fixed week system only a maximum of 50 buyers could get in, why 50? Well it leaves the developer 2 weeks to renovate, decorate etc.
With points there is no such restriction, because points are a form of digital currency and don’t guarantee any specific resort, apartment or time of use, it can be deduced that theoretically, a timeshare developer can sell their inventory many times over, and they do.
RCI and other exchange companies rely on availability allocated from developers to facilitate exchanges. With over selling of points, Developers themselves face availability problems, too many points owners wanting too little inventory, logic dictates that exchange companies also suffer the same problems. Despite this, it’s not where the problems end.
The majority of timeshare resorts may now be booked by non points owners, or put another way, non timeshare owners, facilitated via the various online booking platforms. From these facts we think you can see that not only timeshare points owners have problems, but also exchange companies.
Fighting fire
With developers selling more points every day of the week, it has rapidly become a lottery as to who will ever get where they want, when they want or even get a holiday at all. This is not only restricted to developers but spills over to exchange companies.
In the same year as RCI was formed, 1974, the box office smash hit was Towering Inferno starring Paul Newman as architect Doug Roberts and Steve McQueen as fire Chief O’Hallorhan. Below is a famous exchange close to the finale of the film:
Doug Roberts: Yeah, it’s all our fault.
Chief O’Hallorhan: Now, you know there’s no sure way for us to fight a fire in anything over the seventh floor, but you guys just keep building ’em as high as you can.
Using a little poetic licence we have adjusted this to describe what may have been said if the movie was about timeshare:
Developers et al: Yeah it’s all our fault
RCI et al: Now, you know there’s no sure way for us to provide holidays for all our members. But you guys keep selling points and more points, as many as you can.
TCA comment
Happy birthday RCI and may all your future problems be small ones…..although we doubt that.
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk