The vacation interval ownership (time share): Where sales and marketing determine value

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kierland marketing
The Westin Kierland Villas. See the online discussion as I sought out confirmation of the value (r lack of value, more accurately) of the sales/marketing offer.
resale offers
Resale listings for the resort where we are staying. There are many unsold vacation ownership shares. Why would you purchase from the sales office when the resale prices are about 50 per cent less?

Sometimes it is worthwhile to study experiences and sales processes where the selling initiative — rather than hard facts — determine value. In other words, if you use objective criteria, you would deduce quickly enough that you shouldn’t rationally purchase the offering, but enough do, to create viable businesses, largely because of effective marketing and sales processes.

kierland
Spacious interiors and an enticing $395 (for four days) marketing initiative make the initial offer to prepay and pre-plan vacations enticing

Certainly, these concepts apply in the time share/vacation interval purchase market. Almost inevitably, the resale value of any deal you purchase directly from the developer is about 1/2 of the price you pay in cash dollars — and it won’t be easy to find a purchaser for your timeshare or vacation interval points..

This inequality doesn’t necessarily equate to unethical or illegal behavior. Certainly, reputable vacation interval businesses such as Starwood don’t misrepresent their product/service. “This isn’t an investment,” said the sales representative. “This is a program where you can save substantially over time on your vacation costs.”

And, to some degree, I believe she accurately represented the opportunity — purchase vacation ‘points’ and you can use them at the resort, or perhaps others in the network (though the accessibility of the “others” can be debatable — prime time slots in desirable locations are often hard to snare.) As well, expect hundreds, if not thousands, of dollars in annual maintenance fees and if you really want hotel-like service when you are staying in your points-purchased units be prepared to pay daily cleaning fees. And special assessments are possible as the building deteriorates/ages.

I could go on. You can see quite clearly we haven’t purchased the offering. But the marketing deal that got us here certainly represented a bargain.

kierland marketing
The Westin Kierland Villas. See the online discussion as I sought out confirmation of the value (r lack of value, more accurately) of the sales/marketing offer.

We paid $395 for four nights in accommodations about three times larger than a conventional hotel room — and larger than the typical suite — with all the hotel amenities and services (no cleaning fees this time around!). Starwood also provided us with a resort credit and a $100 gift card (in lieu of Starwood points, which we didn’t need), and a free bottle of champagne.

In return, we were expected to attend the sales presentation, an individualized affair, though certainly following a system — with (I counted) three separate representatives, all with a soft, but persuasive, effort to get into our minds/hot spots, and draw us in with the vacation interval offer.

It’s undoubtedly an effective process and system. Many people have not experienced the physical size of the suites in the vacation interval plans; so site visits are necessary to draw out the “awe” factor  and turn up the perceived value proposition. Very few candidates study the relevant internet forums and user groups, where you can learn the actual resale value of the points you purchase with these plans, and their restrictions. And without that knowledge, you may fall for half-truths from the salespeople.

“I know there is a resale market and it seems you can get these places for about half of what you are selling them for,” I asked the sales rep, point-blank. “Why should I buy directly from you?”

“You are just buying the unit and the limited access to it — not all the points and extras,” the rep said. “You will be getting what you are paying for.”

Huh? I know hotel chain vacation interval ownerships are not like time shares; you don’t purchase a specific unit for a specific time; you purchase “points” and the more points you purchase, the more access you have to high-end resorts at peak times. (You can also use these points for longer stays at less-expensive resorts.)

So I checked using the Tugbbs,com timeshare forum site. In fact, the sales representative was partially correct. There are provisions for hotel, as well as interval ownership points, with the direct purchase. These additional points can, in theory, give you some added access to hotels within the Starwood chain (it is unclear how the hotel points will transfer and be adapted now that Starwood is merging with Marriott.) If you are a regular and extensive Starwood hotel guest, these have some value (and to Starwood’s credit, the special inducement offer is marketed to people registered within the Starwood system from previous stays.)

However, those vacation interval points, it seems ARE transferable — because of specific provisions within this, and a few other resorts’ — deeds. You have to be careful, though. In some resorts, you purchase only the weekly timeshare slots; and (to make things more complicated) the rules can vary depending on which section you’ve purchased in other resorts. In other words, just like the used car market, the used vacation interval/timeshare market, can be a minefield — you really need to do your research before buying anything in these spaces.

That quality doesn’t help the emotional decision-making process, which reflects the vacation interval ownership sales office goals. Yes, if you are rational, you’ll research the resale market, study the rules, make sure the deal makes sense, and then (and only then) put in a purchase offer. It’s a lot of work — so unless the whole vacation ownership process really appeals to you and you are a hard-nosed rationalist — you won’t do it. But you can purchase your vacation breaks easily and quickly directly from the friendly sales office employees.

This leads me to the final stage of the process. As we enjoyed our final meal in the five-star adjacent hotel restaurant, burning up the resort credits and $100 gift card for a free meal, we briefly discussed the closing offer from the sales staff. It would have granted us rights to purchase the vacation interval points for another year, with another four night’s stay and 50,000 Starwood points, equivalent to about five nights at a pretty expensive hotel (or a business class North American flight reward, based on conversion to airline points) for about $2,000. Okay, not a totally bad deal, but not the super deal that got us here — and you can get many other opportunities with prepaid vacations elsewhere. I went to AirBNB and discovered a week’s stay here would set me back $1,350. Sometimes it is rational to purchase airline/hotel points, but you really need to understand and value them. There was no pressure, but the deal simply wasn’t good enough to cause me to want to sign on the dotted line.

We’ll soon head back to the airport and our home, satisfied we didn’t overspend on our vacation. I suppose the greatest value of these time share/vacation interval ownership deals would be that you almost force yourself into vacation experiences, and if you use them all, effectively, you may save money over what you would pay if you simply paid as you travelled. But separating reason from emotion, you don’t need to pay top dollar by rewarding the sales and marketing machine by paying cash for the experience. Obviously enough purchase the deals, however, or the system wouldn’t continue to exist.

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