posted 02-10-2005 05:57               

I believe one of the primary reasons why Fairfield resells at $.20 on the dollar is that their maintenance fees are very high. Interestingly enough, if you look at resales on eBay, FF resorts with lower MFs sell for a higher $/pt. So, I believe the maintenance fee is the primary driver of resale value, NOT VIP status. Buyer's are looking at total cost of ownership including cost of capital.

WorldMark, on the other hand, has a relatively modest MF. 10,000 credits is $462 which gets you most 2br units, all 5* quality.

Fairfield has an MF for a 2br of around 200,000 points. At $4/point for MF and other fees, the equivalent 2br unit has an annual MF of about $800. At that rate, I'd rather have a Marriott.

There is a lot of chatter about a WorldMark VIP program and whether or not the bylaws and/or guidelines will enable Trendwest to develop a VIP program comparable to FF. On this point, I agree with PerryM. Trendwest controls the WM board and therefore can make proposals that favor themselves. They will find loopholes to create a VIP program of some type.

My guess is that WorldMark will create a VIP program and the benefits MUST include reservation priority and/or discounted bonus time better than current WM members currently get. Otherwise, it's useless. If they find loopholes that will enable preferential reservation capabilities to VIPs over non-VIPs, then they are likely to create a program that will enable conversion of resale credits into VIP credits which is like a modified version of PIC.

The wisdom of a PIC-like program for WorldMark is that it enables an above board discussion by a sales rep of resale and developer bought credits with potential buyers. And, a return can be offered.

Example, if WorldMark platinum VIP offered 14 month reservation privileges, everyone would want that to get week 52 or week 26 at prime resorts. They could say buy 10,000 credits from the developer and we will enable you to convert 20,000 resale credits to your VIP status or something like that. And, they can offer bonus time for 50% of non-VIP owners or something like that.

It makes no sense for Trendwest to grandfather in current resales unless they simply want to bootstrap the VIP program OR to get the current owners to VOTE for a change in the bylaws and guidelines that will enable a VIP program. My guess that it will be a combination of both partial grandfathering and a PIC like program.

posted 02-10-2005 07:12               

There will always be unknowledgeable buyers or owners who don't realize this, or who don't realize that "fair market" rentals don't have anything to do with rack rates for rentals, and they will be the ones holding the bag.

posted 02-10-2005 07:27               

Some features I think you'd be more likely to see and would like are:

1. Free Housekeeping-a great savings if you take many short trips.

2. Point discounts for reservations within 60 days of checkin-this really doesn't affect regular members much as this is inventory that is otherwise likely to go unclaimed.

3. Unit size upgrades within 30-60 days of checkin-same as 2 above.

A VIP who can take advantage of these savings can easily stretch his points 2-3 times as far. I usually use these for off season travel and use a combination of full point reservations and exchanges for summer vacation. It's work well for me and my cost per day has dropped considerably since joining Fairfield.

It's also possible to save considerably on the MFs through PIC or converted fixed weeks. By choosing high point value weeks to convert, it's possible to get the MFs well below the $4/1000 mark. PICing the right weeks can give even higher savings. My current cost is about$2.75/1000 and it should drop to $2-$2.25 with my next (and final) purchase. I should add that this does not include any SA weeks in the PIC.

posted 02-10-2005 09:09               

quote:

---

Originally posted by robnsunny:
You seem to be fixating on the advance reservation aspect of the Fairfield VIP. Fairfield can do this because members own at a particular resort. This resort can be reserved 13 months in advance while VIPs can reserve a limited number at 11 months. Anyone can reserve at 10. This doesn't transfer well to Worldmark where there is no home resort and I think is the lest likely aspect you'll see there.

Some features I think you'd be more likely to see and would like are:

1. Free Housekeeping-a great savings if you take many short trips.

2. Point discounts for reservations within 60 days of checkin-this really doesn't affect regular members much as this is inventory that is otherwise likely to go unclaimed.

3. Unit size upgrades within 30-60 days of checkin-same as 2 above.

A VIP who can take advantage of these savings can easily stretch his points 2-3 times as far. I usually use these for off season travel and use a combination of full point reservations and exchanges for summer vacation. It's work well for me and my cost per day has dropped considerably since joining Fairfield.

It's also possible to save considerably on the MFs through PIC or converted fixed weeks. By choosing high point value weeks to convert, it's possible to get the MFs well below the $4/1000 mark. PICing the right weeks can give even higher savings. My current cost is about$2.75/1000 and it should drop to $2-$2.25 with my next (and final) purchase. I should add that this does not include any SA weeks in the PIC.

[This message has been edited by robnsunny (edited 02-10-2005).]

---

Hey Rob,

Actually, I am not fixed on ARP. I have considered both ARP and bonus time.

ARP is interesting since Prime Ski weeks and Prime coastal Summer weeks are in very high demand for WorldMark (of course this is true with other resorts as well). If attaining VIP level gets preferential reservation treatment, then it may be worth paying extra for those privileges.

As for the other benefits, they are not that great relative to what you can get already with WorldMark. Here's what I mean.

No housekeeping is nice, but there are already at least 2 other methods I know of to reduce housekeeping fees for WorldMark that would be cheaper than buying credits from the developer.

Credit discounts and upgrades are nice. But again, there are much cheaper ways to gain this advantage other than buying from the developer. I can rent credits for cheaper than the cost of capital for a developer purchase. So, my cost for reserving a normal week in WorldMark by renting credits is cheaper than buying developer credits even if they offer me FREE bonus time 12 months out with a free unit upgrade.

As I mentioned in another thread, it's not hard to figure out how to get 1M FF points for about $20k and MFs about $2/credit using PIC. If I could do that in 2 weekends, then I am sure there are experts out there who can do it for less. Even at that rate, which is $400 MF for a 2br isn't a great deal given that I have to put down $20k upfront. As an example, I rented a 2br Sheraton Vistana for $350 for Thanksgiving week. And, I had no upfront costs.

My conclusion about FF is that it's a complex system that is interesting, but expensive. If you love FF resorts, then it's a good program to consider. If you want a trader or you want cheap timesharing options, WorldMark and other alternatives are much better.

My overall conclusion is that I am not worried about the future of WorldMark. Much more so that before I looked a little more closely at FF.

posted 02-10-2005 09:11               

quote:

---

Originally posted by somerville:
What makes you think Worldmark fees will stay low? I am sure Fairfield/Cendant will be looking for ways to boost fee income.

---

posted 02-10-2005 10:48               

We just bought these credits for a little more than 60¢ a credit for a “fully loaded” account. We felt that we could unload these new credits for 70¢ each in the blink of an eye – very little risk to double our position.

My guess is that ALL WM credits will be grandfathered in the day the VIP is announced. (Assuming this is more than one of those urban legends – like the 20 foot crocodile in the sewer). Gene, the head honcho at TW/WM, has indicated this – no difference between resales and TW sales.

So we are already at the 60¢ level now; without a VIP program.

I can’t even guess what the clever lawyers and clever managers and clever board members at TW will dictate – one can only guess.

Once a VIP makes resale WM credits unusable in a VIP program TW will sell many more credits that normally would have been bought in the resale market sold at full price from one of those loveable TW salesreps.

Lower demand indicates lowering prices – a fact of life in a free market. How much will they drop? My guess is as good as yours – I’ve just picked the same ratio of FF new sales to the resale market and applied that ratio to WM.

If I were one of those clever folks slinking around TW I’d duplicate the FF system as close as possible – especially since Cendant owns both companies.

I do know that the better the folks at TW make the VIP program the less demand for resale credits and more demand for TW credits. This reduces the price support for the resale market and forecasts lower prices. How much? I haven’t a clue.

Perry

posted 02-10-2005 11:00               

I currently have a 3 BDR in Vegas in August for 266K. There's a good chance though that I can pick up an exchange between now and then I can likely get it for 28K and an exchange fee.

An extreme example of using VIP is getting 2 weekday nights in Williamsburg during Spring Break (Bush Gardens is open) for $45 (total, including a generous cost of capital). Breaks like that make the cost of occasionally getting a high point value unit bearable.

VIP, even with PIC, does have a high upfront cost (although not more than resale for the same points). However, I think many on this forum underestimate the savings for a VIP Gold or Platinum.My savings so far this year exceed $500 and that's just reservations since Jan 1. That includes housekeeping, transaction fees and the cost of points I used but didn't have to buy, rent, or pay maintenance fees on. I'll track it carefully this year and I expect the total to be $2-3000.

Of course your basic premise of MFs driving down resales is correct. Only savvy owners routinely get these kinds of breaks and there aren't that many of them. You also have to have certain travel patterns that happen to fit what saves the most. Living 3 hours from one of Fairfield's largest resort areas (Williamsburg) helps as well.

My only real complaint about Worldmark is that they are primarily western. I considered buying some Worldmark rather than PICing more with Fairfield, but the show stopper was never being able to use most of the resorts. Having to pay housekeeping for short stays would be a killer for us as well. If there were a Fairfield like VIP and a reasonable way (perhaps PIC like) to get into the program, I might reconsider that.

In trading, Worldmark has the advantage of being dual affiliated. However, Fairfield has the 28K deposit which can probably be used for better than 1/2 of all trades (most internal and off season). This represents 14% of your 200K 2 BDR figure. The smallest Worldmark deposit I'm aware of is 3K, which is 30% of a 2 BDR. A 70K deposit can probably pick up 90% of the trades. Rarely is a deposit larger than 105K needed for anything. I've picked up a Spring Break southern California coast for a guest with a 28K deposit ( it was about 6 months out).

posted 02-10-2005 15:01               

quote:

---

Originally posted by robnsunny:
In short, the average buyer sees the higher base fees. However, the VIP who owns PIC is probably paying no more and quite possibly less than most Worldmark owners for the equivelent usage.

---

Not even close. I'll simply leave it at that.

posted 02-10-2005 15:40               

quote:

---

Originally posted by robnsunny:

My only real complaint about Worldmark is that they are primarily western. I considered buying some Worldmark rather than PICing more with Fairfield, but the show stopper was never being able to use most of the resorts. Having to pay housekeeping for short stays would be a killer for us as well. If there were a Fairfield like VIP and a reasonable way (perhaps PIC like) to get into the program, I might reconsider that.

.

---

That is a good point and in reverse it is my main complaint against Fairfield, as their main presence is on the east coast. I live in Washington State and take a lot of advantage of bonus time because there is a lot of drive to resorts available for me. The time we like to travel are not in the peak season (We hate crowds) so we have a lot of bonus time available to us at very reasonable cost..

If we lived on the east coast I would be very interested in Fairfield.

posted 02-10-2005 16:19               

quote:

---

Originally posted by melschey:

With Cendant now owning Fairfield and TrendWest availability will probably equalize some over time though.

---

posted 02-10-2005 20:33               

I’m assuming WM will implement their VIP just like FF did – make the announcement and grandfather all accounts that day.

I believe FF then took about a year or so to gradually enforce the restriction of only FF sales counting towards VIP – the same may occur with WM.

I sure hope WM does not get into a PIC type plan of incorporating RCI Gold Crowns or RIDs into the VIP – it just doesn’t make any sense.

Perry

posted 02-11-2005 06:14               

quote:

---

Originally posted by PerryM:

I sure hope WM does not get into a PIC type plan of incorporating RCI Gold Crowns or RIDs into the VIP – it just doesn’t make any sense.

Perry

---

posted 02-11-2005 08:26               

I can see FF with its background getting entangled with ownership of non FF units. They have this now – a resort may have whole ownership units, FF week ownership, and FF point ownership. FF is trying to pressure the week ownership folks into going to points and this lends itself into PIC.

WM, however, has none of this. (Well they do have the problem of whole ownership folks at some resorts). Why on earth get into this mess?

FF now has to keep track of a PIC’s depositing a week into the system. How about when a FF owner sells one of those PIC’s – what happens to the level of VIP? Platinum today and silver tomorrow – how to keep track of the mish-mash?

Why take a Platinum level of WM VIP at 50,000 credits, for example, and inflate it to 100,000 “VIP Points” just to incorporate timeshares that are not FF or WM? It doesn’t make sense to me.

But the folks running FF VIP program become the geniuses running the WM VIP system.

Perry

posted 02-11-2005 10:45               

Doesn't Worldmark already take GC weeks in exchange for points?

BTW, PIC weeks are just deposited into RCI and used to offset external exchanges. They really don't create the administrative mishmash you envision.

posted 02-11-2005 12:12               

True, the whole VIP, PIC is just a marketing gimmick designed to increase developer sales and kill the resale market. FF has done a great job of killing the resale market – down to as low as 85% of current prices – what a company.

How will WM do? I’m sure the Einstein’s in the marketing department of Cendant, TrendWest and FairField are shooting for similar numbers with WM.

Perry

posted 02-11-2005 13:05               

quote:

---

Originally posted by PerryM:
Roadsister,

I’m assuming WM will implement their VIP just like FF did – make the announcement and grandfather all accounts that day.

I believe FF then took about a year or so to gradually enforce the restriction of only FF sales counting towards VIP – the same may occur with WM.

I sure hope WM does not get into a PIC type plan of incorporating RCI Gold Crowns or RIDs into the VIP – it just doesn’t make any sense.

Perry

---

Clairification....you mean Trendwest VIP....and ya gotta hope they will grandfather in the resales bought after IRIS.

posted 02-11-2005 16:06               

quote:

---

Originally posted by PerryM:
Robnsunny,

True, the whole VIP, PIC is just a marketing gimmick designed to increase developer sales and kill the resale market. FF has done a great job of killing the resale market – down to as low as 85% of current prices – what a company.

How will WM do? I’m sure the Einstein’s in the marketing department of Cendant, TrendWest and FairField are shooting for similar numbers with WM.

Perry

---

Perry,

While I agree that FF has done a good job at ensuring that the resale market is weak. I believe it's more due to their high MFs rather than VIP.

Lots of timeshares sell for 20-30% of developer sales. This is not unique to FF.

If WorldMark offers a no housekeeping fee program for some level of VIPs AND they grandfather in all current members, then MFs will need to increase to pay for all those free housekeepings. So, in that sense, the higher MFs which are directly due to the VIP program will tank resales.

If I were Cendant and Trendwest, I wouldn't grandfather anyone into VIP. Rather, I would allow current members to "PIC" the current credits along with a developer purchase. That would provide the impetus for additional developer sales to resale owners to get no housekeeping accounts. Then, they could keep MFs down for now. They can save that for something else later.

posted 02-11-2005 19:09               

I can't imagine them 'handing out' no housekeeping memberships to VIP.....THAT would definately effect the bottom line....never happen

posted 02-11-2005 20:00            

quote:

---

Originally posted by roadsister:
They COULD get a list of members, but not their addresses so not sure what good it would do.

I can't imagine them 'handing out' no housekeeping memberships to VIP.....THAT would definately effect the bottom line....never happen

---

Bylaws:

7: RECORDS AND REPORTS
7.1 Inspections.
7.l(a) Members. The Articles, Bylaws, Declaration, Rules, Membership register (including mailing addresses and telephone numbers) or duplicate Membership register, the books of account and minutes of proceedings of the Members, the Board and any committees, and all other records of the Program maintained by the Club or its Manager, shall be made available for inspection and copying, upon written demand and reasonable notice, by any Member or his duly appointed representative, at any reasonable time and for a purpose reasonably related to his interests as a Member.

posted 02-11-2005 20:34               

Imagine how uncertain WM must be with using their existing data – how accurate is it? We can only guess. My guess is that the lawyers will say it isn’t worth even one owner getting screwed – so just grandfather in everyone’s credits.

If WM is 99% accurate in their data and they have 200,000 owners that’s 2,000 lawsuits.

Just a guess.

Perry

posted 02-12-2005 09:23               

The same can be accomplished very simply by having a Frequent Buyer Club (FBC).

Once a person buys from the developer they would become fledging members of the FBC. The FBC is very simple – the more you buy the cheaper the cost. For example:
Buy 6,000 WM credits at $1.70 a credit.
Buy the next 3,000 for 10% cheaper or $1.53 a credit.
Buy the next 3,000 for 20% cheaper or $1.36 a credit.
This would continue until a floor is reached. (Certainly other rates would be used)

A little computer sends out eMails monthly alerting FBC members of the prices and possible price increases. All sales are conducted on the internet with a program – pay on your VISA or financing could be done – it takes seconds for the computer to determine a credit rating.

NO SALESREPS ARE INVOLVED – just the little old computer stuck away in a corner somewhere.

Who the heck needs a slick salesrep handing out $25 gift certificates to McDonalds to entice a person to buy – let a great deal do this!

This would encourage owners to buy from TW direct and downplay the resale market – thus accomplishing what the VIP set out to do. More sales would probably happen this way too.

And if TW wanted to really go out on the limb they could look at the number of credits owned and offer the same pricing – irregardless of where the credits were purchased.

There are a ton of alternatives to a VIP, will TW consider them – hell no – it’s the “not invented here” syndrome.

Perry

------------------
Have snowboard - will travel

posted 02-12-2005 09:48               

Given how the bylaws are written, Trendwest will be very careful not to a) try to change that bylaw by removing it in a stealth parliamentary procedure or b) do something that really tanks the resale market or c) take away something that WorldMark owners really want to keep. They don't want any fodder for a grassroots revolutionary act by the owners.