posted 03-28-2003 15:50               

Craig...for some reason the moderator closed the above thread because it was getting too long, so I've restarted it here as I have some concerns about bonus weeks I'd like you to address.

From your comments on the other thread, it appears obvious that nobody here will change II's mind about the impact of a 50% increase for 'Bonus Weeks' without at least making significant improvements to all the restrictions.

IMO those restrictions remain the problem for me with your Bonus Weeks ... and using them now will cost us 50% more! Why didn't II 'give a little more' in order to get more 'from' us...such as changing the 'good for only 12 months' restriction, expanding the months in which they can be used, or allowing guest certificates for them? We only wanted a fair exchange from II ... a 'value added' to make us feel better about the price increase. Your like it or lump it attitude is of concern to me as one of your members.

This year I won't deposit prime-time 'non-lockoff' weeks with II for a $299 bonus week and probably would for the $199 one. Even so, I haven't be able to use all the former $199 bonus weeks I've received in the past because of all the restrictions and it really bothered me to let them slip by without use.

I assume II wants prime week deposits or you wouldn't offer bonus weeks for them. Do you really think a 50% price increase with no added value is the way to do increase business? Few people get excited about a late November week in Atlantic City (for example)...and trying to get a summer Marriott Grand Ocean week within 59 days with a bonus certificate is impossible and you know it.

A quick check of Orlando turned up several 2 bedroom suites for $299 -- as a Getaway! Shouldn't they be more costly than a "Bonus" week which requires you to deposit your prime time week? Why deposit your week when you can find low period Getaways for the same price or close to a Bonus Week price?

Few businesses could increase prices 50% and survive, as customers get angry and find other routes.

Brian

quote:
--------------------------------------------------------------------------------
Originally posted by CraigU:
I don't think the areas offered on the grid are "crappy". The second invalid statement is weeks within 59 days are those no one else wants. Actually, the recent trend is for short notice travel. There are prime weeks available during flexchange.
Regarding your statement of not being in touch, we obviously have the ability to judge the success of these promotions. It is not financially advantageous to offer these weeks at the lower prices.

We are well aware that some members may choose not to participate. On the flip side, many members find great value in the program as is. I made the statement I didn't need to justify the pricing because someone is going to "punch holes" in the logic no matter how sound it may be.

--------------------------------------------------------------------------------

posted 03-28-2003 18:09               

On the closed thread, I tried to make an analogy to say that II could charge whatever they wanted for bonus weeks. It will be up to II to see if their bottom line improves by selling fewer bonus weeks, but at a higher price. I honestly don't pretend to know II's financial model. The response by Craig:

quote:

---

Originally posted by CraigU:
This is the second time someone has suggested these weeks have no aquisition cost. Where do you think these weeks come from? We owe a member a week in return. Therefore, if you look at the whole equation, there is a cost involved whether you chose to see it or not.

---

Would it be possible to shed more light on this issue?

What exactly are II's acquisition costs? I assume II buys developer weeks and such for getaways - do any of these weeks, which II buys, make their way into the exchange pool?

The bonus weeks offered - these are member deposited weeks in areas and seasons where II historically has more supply than demand, correct? I would think that these deposited weeks would not have the best trading power for their owners, and they should expect to trade these weeks "like for like" for other lower demand weeks. Does II buy such lower demand weeks to fulfill the owners' trade requests?

A follow up question: I am sure that II looks at "expired" member deposits as lost potential revenue. Can you tell us what the ratio of unredeemed deposits to unredeemed requests is? I would think that a fair number of members have deposits expire unredeemed each year, because they aren't flexible enough or just simply forget about it.

posted 03-28-2003 18:39               

I am going to address your questions in great detail. I have not done so up to this point as I believe, as I said before, that people will just "punch holes" in sound logic.

Regarding the fifty percent increase, this is somewhat misleading as the certificate itself has changed. Previously, the most common certificate issued was for a flexchange week. This certificate required the payment of an exchange fee which was set regardless of unit size. The new certificate allows you to access the same flexchange inventory but ALSO allows you to place a vacation request up to twelve months in advance. You are limited to the areas/dates on the grid but the choices are extensive. The old certificate didn't allow you to confirm anything outside of sixty days. Clearly there is a big advantage to the new certificate.

The fee charged was changed because the old certificate created an unnatural convergence on larger units. If there is one price, regardless of size, what do you think most people would pick? Of course, they would settle for nothing less than a two bedroom. The tiered pricing structure was introduced so people traveling with a party of two would take unit sizes other than a two bedroom. Remember, no one is really interested in what options are available for other members that may be traveling with six. We NEED to be concerned for the needs of the ENTIRE membership base.

The statement repeated over and over on this and other exchange company topics is that exchange companies don't pay an acquistion cost. This is clearly not true! Quite honestly, it is extremely frustrating that common sense doesn't tell everyone we carry a liability for every week accepted. As I have stated before, we spend millions of dollars annually to feed the exchange system. This includes purchasing weeks for the getaway program AND weeks made available for exchanges. Where do people think that money comes from? We may not have paid for the particular week confirmed but, in the bigger picture, we have paid for the weeks. It is vital to receive the highest yield possible as we need to make up for weeks in seasonal destinations where the supply exceeds the demand. We knowingly and willing accept weeks from members with the knowledge they will remain empty. This is part of the cost of doing business, which is offset by the fees members pay for getaway weeks. One must not forget, any week confirmed by one of these reduced rate certificates takes a week that would be otherwsie sold at the full retail getaway price. The fees on these certificates are considerably lower than the fee paid for a getaway. This prompts another thought; how do you think members who don't receive two for one offers would feel if there weren't any getaway weeks available?

A couple parts of your post confuse me. You state all the restrictions make it so you can't use it. What restrictions are you referring to? You make it sound like there are numerous date restrictions when there are few. You can confirm any date under the flexchange window with the exception of specific blackout dates. You are restricted to certain areas/dates if you place the request beyond the sixty day limit. Let me use this opportunity to point out that it is an enhancement not a restriction. Members never had that option in the past. The expiration date is in place, as it always has been, because there must be a limit to the liability carried forward. Outstanding certificates are a liability that must be reflected on the balance sheet and must expire.

The last thing I'd like to address is your statement that we can't have price increases without driving our customers away. Let me point out that the majority of members don't receive these offers. I bet they think the statements made by those protesting this issue are ridiculous at best. After all, you are receiving something they can't. Additionally, it should be noted, our biggest competitor has discontinued offering this type of bonus as it isn't cost effective. Honestly, we could do the same and it probably wouldn't result in a significant reduction in deposited weeks. After all, I don't think many people deposit their week unless they have no intention of using it. I think those that are eligible should look at the benefit they receive. There is significant value if used to your advantage. Don't compare the price to our getaway savers promotions, you are simply grasping at one price point to make your point. I could do the same by looking at a $750 week but that would be going to the opposite extreme.

Last but not least, I will provide a short version answer to the question at hand. The old certificates, with their price points and terms, were a money losing venture. The other option would be to eliminate the program altogether. I think we have made a fair and reasonable choice.

In closing, I hope this helps everyone to understand the issues. My previous responses were not meant to be curt. I take offense at the individual who stated I must have taken remedial customer service lessons. I think I have provided much more than you could expect to get from anyone else.

quote:

---

Originally posted by pwrshift:
http://www.tug1.net/tugbbs1/Forum24/HTML/000273.html

Craig...for some reason the moderator closed the above thread because it was getting too long, so I've restarted it here as I have some concerns about bonus weeks I'd like you to address.

From your comments on the other thread, it appears obvious that nobody here will change II's mind about the impact of a 50% increase for 'Bonus Weeks' without at least making significant improvements to all the restrictions.

IMO those restrictions remain the problem for me with your Bonus Weeks ... and using them now will cost us 50% more! Why didn't II 'give a little more' in order to get more 'from' us...such as changing the 'good for only 12 months' restriction, expanding the months in which they can be used, or allowing guest certificates for them? We only wanted a fair exchange from II ... a 'value added' to make us feel better about the price increase. Your like it or lump it attitude is of concern to me as one of your members.

This year I won't deposit prime-time 'non-lockoff' weeks with II for a $299 bonus week and probably would for the $199 one. Even so, I haven't be able to use all the former $199 bonus weeks I've received in the past because of all the restrictions and it really bothered me to let them slip by without use.

I assume II wants prime week deposits or you wouldn't offer bonus weeks for them. Do you really think a 50% price increase with no added value is the way to do increase business? Few people get excited about a late November week in Atlantic City (for example)...and trying to get a summer Marriott Grand Ocean week within 59 days with a bonus certificate is impossible and you know it.

A quick check of Orlando turned up several 2 bedroom suites for $299 -- as a Getaway! Shouldn't they be more costly than a "Bonus" week which requires you to deposit your prime time week? Why deposit your week when you can find low period Getaways for the same price or close to a Bonus Week price?

Few businesses could increase prices 50% and survive, as customers get angry and find other routes.

Brian

quote:

---

------------------
Craig Urbine
Vice President
Member Services
Interval International

Editted to reflect black out dates still apply.

posted 03-28-2003 18:54               

I've been trying to figure out how you offer such value for $299 so it seems I'm on the other side of the fence. My assessment was your program is fairly break-even but an overall positive on II operations by greasing your inventory input and output.

Personally I get annoyed when people complain about not being able to use a bonus week. If you can use it great, but don't expect prime locations in prime time. Because not everyone uses the week then more people can be offered the bonus week and the benefit gets spread further.

If you made bonus weeks free then you would have to limit the number of offers. The five star prime time units would get the offers first to entice 2BR deposits. I'm not so sure a Foxrun week 13 would be on the bonus week radar.

posted 03-29-2003 06:47               

It was obvious, by your comment, that your participation has been limited. I have spent a significant amount of time being a resource for TUG members.

At the end of the day, I don't mind explaining issues. However, the day the time commitment becomes onerous, I will no longer be willing to participate.

quote:

---

Originally posted by rmendo:
Craig,
Thank you very much for your last response. I was the person that made that comment about remedial customer service. I am glad that the comment offended you. I would be more concerned if it didn't offend you. But I have to tell you that your previous statement that "it's optional" was worrisome to me. It's this little "optional" things that sometimes close the deal. It was not meant as a personal attack. I am new to this forum, and not sure whether you are answering these questions as an official spokesperson for II or are you just giving your personal opinion.
But I felt that "we" needed a better response than "it's optional". But I do appreciate your latest reply. Thank you.

---

------------------
Craig Urbine
Vice President
Member Services
Interval International

posted 03-29-2003 13:32               

You mentioned a tiered system of Bonus Weeks with which I am unfamiliar. I only have Marriotts and have never seen a certificate for a studio or 1 bdrm or 2 bdrm bonus week offer...they must be new. The last one I used was late October in Absecon Marriott...nice place but not holiday time of year, and for a 2 bdrm suite. All my past ones were $199 for Marriott and for 2 bdrm suites - have those bonus certificates gone up in price and to 3 different size levels too?

You asked about 'what restrictions' stopped me from using a Bonus certificate. I estimate that less than half of the ones I've received have been used. The reason was not so much the time of year and location restrictions as it was that they expire 12 months after making a deposit...and that they can't be purchased for a friend/relative. My problem is 'time' to use a bonus certificate: I own 6 weeks four of them lockoffs. If I use and take the split option that gives me 10 weeks a year of holidays -- all in prime time and booked directly with Marriott. Even I have holiday limits each year!

To get a bonus week that must be used within 12 months after all my 'owned' weeks are already booked means I don't often have time to fit in use of a bonus week as well, and I had to let some lapse. That restriction forces me to wait to the very last minute to deposit any week with II in order to extend the 'use' time of the bonus certificate. All of them could have been used if we were permitted to buy them for friends/relatives.

Again, Craig. Thanks for all the help you've been to us Tuggers.

Brian

quote:

---

Originally posted by CraigU:
Brian:

...Clearly there is a big advantage to the new certificate. The fee charged was changed because the old certificate created an unnatural convergence on larger units. If there is one price, regardless of size, what do you think most people would pick? Of course, they would settle for nothing less than a two bedroom. The tiered pricing structure was introduced so people traveling with a party of two would take unit sizes other than a two bedroom.

...A couple parts of your post confuse me. You state all the restrictions make it so you can't use it. What restrictions are you referring to? You make it sound like there are date restrictions when there are not. You can confirm any date under the flexchange window. You are restricted to certain areas/dates if you place the request beyond the sixty day limit. Let me use this opportunity to point out that it is an enhancement not a restriction. Members never had that option in the past. The expiration date is in place, as it always has been, because there must be a limit to the liability carried forward. Outstanding certificates are a liability that must be reflected on the balance sheet and must expire.

---

posted 03-29-2003 14:01               

I, too, appreciate your recent long and detailed response. It answered questions I had previously posed about the bonus weeks. I realize it's time consuming and you can't get as detailed with most issues on TUG, but your explanantion in this case justifies (at least to me) any price members would be willing to pay for a bonus week. I also was unaware the new ACs can be used to confirm 12 months in advance - that's a big improvement. If I missed that information before, then that's my fault.

Thanks again - we appreciate your input!

posted 03-29-2003 21:22               

I hope you don't feel we're ganging up on you--we truly value the innumerable hours you spend and the assistance you provide here on TUG. You certainly know more about the financial background of profitability, cost/benefit, etc. for running your company than does any member from the outside looking in, and ultimately you should choose to price the bonus program how you best see fit. I think the overriding message of this string has been that there is a group(however big or small) of members who feel that with the increased prices and continued restrictions on the certificates (yes, you can technically book grid destinations 12 months out, but let's face it--the majority of grid destinations/times are offseason and/or surplus areas, and although there are some prime weeks available in the 59 day window it's not common) the bonus program is of little to no value anymore, and it will affect how we use our weeks (which may or may not have any measurable impact on II).

I thought in the past (when there used to be a flat--and lower-- price) that the certificate was usable only for the equivalent size of unit you deposited (but my memory could be failing me). If so, that would address your comment that the ACs created an unfair burden on larger-sized units (e.g. studio or 1 bedroom depositors getting taking up all the 2 or 3 bedroom inventory).

One last question: the ACs would be much more attractive to me (and apparently to others who have expressed similar comments about this particular restriction) if they could be used with a guest certificate (read: additional $35 revenue to II). I understand the 12 month liability for expiration, but wouldn't you rather get $299 from me to use for my family or friends (plus $35 guest certificate fee)if they can use it, rather than get no revenue because I can't use it personally within the 12 month window? Just curious why the non-transferable restriction. Again, we trust you and aren't trying to tell you how to run your business, just providing customer feedback. Thanks for all your time and support!

David

3-31 edited for typo

posted 03-30-2003 10:13               

quote:

---

Originally posted by dlpearson:
Hi Craig,

I hope you don't feel we're ganging up on you--we truly value the innumerable hours you spend and the assistance you provide here on TUG. You certainly know more about the financial background of profitability, cost/benefit, etc. for running your company than does any member from the outside looking in, and ultimately you should choose to price the bonus program how you best see fit. I think the overriding message of this string has been that there is a group(however big or small) of members who feel that with the increased prices and continued restrictions on the certificates (yes, you can technically book grid destinations 12 months out, but let's face it--the majority of grid destinations/times are offseason and/or surplus areas, and although there are some prime weeks available in the 59 day window it's not common) the bonus program is of little to no value anymore, and it will affect how we use our weeks (which may or may not have any measurable impact on II).

I thought in the past (when there used to be a flat--and lower-- price) that the certificate was usable only for the equivalent size of unit you deposited (but my memory could be failing me). If so, that would address your comment that the ACs created an unfair burden on larger-sized units (e.g. studio or 1 bedroom depositors getting taking up all the 2 or 3 bedroom inventory).

One last question: the ACs would be much more attractive to me (and apparently to others who have expressed similar comments about this particular restriction) if they could be used with a guest certificate (read: additional $35 revenue to II). I understand the 12 month liability for expiration, but wouldn't you rather get $299 for me to buy one for my family or friends (plus $35 guest certificate fee)if they can use it, rather than get no revenue because I can't use it personally within the 12 month window? Just curious why the non-transferable restriction. Again, we trust you and aren't trying to tell you how to run your business, just providing customer feedback. Thanks for all your time and support!

David

---

posted 03-31-2003 15:07               

------------------
Pat

posted 04-02-2003 06:18               

quote:

---

Originally posted by CraigU:
Previously, the most common certificate issued was for a flexchange week. This certificate required the payment of an exchange fee which was set regardless of unit size. The new certificate allows you to access the same flexchange inventory but ALSO allows you to place a vacation request up to twelve months in advance. You are limited to the areas/dates on the grid but the choices are extensive. The old certificate didn't allow you to confirm anything outside of sixty days. Clearly there is a big advantage to the new certificate.

---

Clearly, a certificate (Resort Accommodation Certificate) I received for a 2003 deposit was a combination of the two. It has a flat fee of $199. Could be used for both Flexchange as well as a vacation request up to twelve months in advance.

Are you saying that nothing has been changed except for the tiered pricing which would mean that I'll be paying $100 more for a 2 bedroom unit?

quote:

---

Originally posted by CraigU:
You make it sound like there are date restrictions when there are not. You can confirm any date under the flexchange window. You are restricted to certain areas/dates if you place the request beyond the sixty day limit. Let me use this opportunity to point out that it is an enhancement not a restriction. Members never had that option in the past.

---

Both certificates I received show date restrictions online :

Certificate not valid for 18DEC to 31DEC travel dates.
Certificate not valid for 10APR to 21APR travel dates.
Certificate not valid for 01JAN to 01JAN travel dates.

Are you saying that the certificate given out in 2004 do not have these date restrictons?

posted 04-02-2003 06:58               

If you look at the previous certficate, it mentioned that peak period and holiday weeks are generally not available. Despite that notation, members complained about not being able to redeem the certificates during those periods. This prompted the need to specifically carve out the dates referenced.

quote:

---

Originally posted by Marina_K:
Both certificates I received show date restrictions online :

Certificate not valid for 18DEC to 31DEC travel dates.
Certificate not valid for 10APR to 21APR travel dates.
Certificate not valid for 01JAN to 01JAN travel dates.

Are you saying that the certificate given out in 2004 do not have these date restrictons?

---

posted 04-02-2003 08:03               

Over and over I called before one VC said, "Oh, you can't use this during Easter. " The blood drained out of my head... what do you mean? Plus, the week I wanted didn't include Easter. She told me that the holiday restriction meant the 10 days before and after Easter.

It would have been very helpful if the dates had been listed, and if the first counselor I talked to weeks prior had told me.

posted 04-02-2003 08:31               

quote:

---

Originally posted by CraigU:
If you look at the previous certficate, it mentioned that peak period and holiday weeks are generally not available. Despite that notation, members complained about not being able to redeem the certificates during those periods. This prompted the need to specifically carve out the dates referenced.

---

Yes, it does say that on the certificates I received for 2003.

What I'm asking is ...

Will that also apply to the certificates given out in 2004 & the future?

You previously wrote :

quote:

---

Originally posted by CraigU:
You make it sound like there are date restrictions when there are not. You can confirm any date under the flexchange window.

---

Does that mean that in October/November 2003 (flexchange period), I will be able to use any 2004 certificates I receive for Christmas/New Year on Hilton Head?

If I remember correctly, there were numerous weeks available for Christmas/New Year on Hilton Head for both Exchanges & Getaways back in October/November 2002.

posted 04-02-2003 16:45               

I cannot predict if there will be any changes in the future.

quote:

---

Originally posted by Marina_K:
Does that mean that in October/November 2003 (flexchange period), I will be able to use any 2004 certificates I receive for Christmas/New Year on Hilton Head?

If I remember correctly, there were numerous weeks available for Christmas/New Year on Hilton Head for both Exchanges & Getaways back in October/November 2002.

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posted 04-02-2003 16:49               

We are in the process of determining if we can retroactively change the restriction on outstanding certificates. We believe it will be possible to issue a guest certificate regardless of what is printed on the certificate itself.

We expect to have this process completed in the next couple days.