The points system came onto the scene somewhere around the late 1990s to early 2000s. The housing market was in a downturn. Aging resorts needed repair, and a growing number of original buyers that bought in the early ’80s wanted out. As a solution, timeshare developers came up with the points-based timeshare. Converting weeks to points has been a boon for timeshare developers but often a bust for buyers.
In the year 2000, I was working for Sunterra Resorts in Santa Fe, New Mexico. The idea of selling vacation points was something new and exciting. Sales agents started coercing deeded-week owners into giving up their fixed, deeded week in exchange for points. Newer point products tend not to be deeded. Foreclosing on non-deeded points is less rigorous than foreclosing on deeded real estate. Owners who agreed to convert had to pay $4,000 to $8,000 or more to convert, in addition to their original purchase price.
Moreover, when you book using points, the resorts and the exchange companies can make an additional profit from fees attached to the points. Some resort fees are as high as $59 per reservation, in addition to what you pay the exchange company to exchange the points. If you add up your initial purchase price, annual maintenance fee, resort exchange membership fee, special assessments, exchange company fee, and your point conversion fee, it rarely justifies buying points.
You Always Need More Points. Here’s Why?
When you visit the resort where you bought the points and complain that you still cannot go where you want to, their answer is always, “Well, you don’t have enough points.” People continue to buy, despite availability complaints posted by even high loyalty-level members.
I have never been a fan of the points system. I am not convinced that buying points will get you more of what you want compared to owning a fixed or floating week. Sure, points are great for the developer, but for the consumer, in my opinion, you are simply paying for air. You have also lost control of what you previously owned.
Many points buyers are happy with their purchase. They find good value booking with points. For the timeshare developer, however, it is pure profit. There are satisfied point customers, but it’s hard to ignore the volume of complaints found on the internet with many Attorneys General investigations (in the U.S.) and lawsuits galore.
Points Offer Some Flexibility, but for a Price
The sales agent will sell the concept of flexibility. The points member can break their one-week vacation into a shorter three-day vacation and save the remaining points for another vacation or getaway. This is attractive for members who do not or cannot travel for an entire week or would prefer to spend a few days at one resort and a few days at another.
If you own points in the U.S., the points are sometimes attached to a deeded property for a specific time, unit, and size, usually to a fixed-week timeshare unit and size. This will determine where and when you go. Supply and demand determine availability, not how many points you have. What fixed week you convert to points will also determine how many points you receive to use at certain resorts. Some resorts require more points.
The Location of Your Timeshares Points is Not Always King
The exchange companies know exactly what you own regardless of how many points you have. They know what week your points are attached to, and this is the information they must have to make your unit available to another exchanger.
Think about this: you cannot expect somebody with one thousand points in the Poconos Mountains to compete with somebody who owns one thousand points in New York City. It has everything to do with supply and demand, location, week, and the unit size attached to the points.
The Manhattan Club is a good example of how investing in points can end up as air. The New York Attorney General banned the owners of The Manhattan Club from working in the timeshare industry and fined the company over $6 million for limiting availability to those who purchased, while non-owners booking online could find availability. But the point (no pun intended) made earlier is location—New York City or Orlando? Which do you think has the highest value in the timeshare world?
Moreover, the resorts will tell you that you can have several short trips during the same week. This is highly unlikely, as it depends on availability. It is almost impossible to book three days in Paris, two days in Rome, and two days in London consecutively.
Flexibility comes with a price, and it may not be worth spending the extra dollars for the extra headaches that can plague the points buyer.
Points Cannot Get You Everywhere You Want to Go
While working for several resorts that offered points to existing owners and new owners, I became skeptical after learning that members could not find promised availability. When the member later complained about availability, the answer was always, “They need to buy more points.”
If you view points as a currency, you are told they can be used anytime, anywhere. Well, that depends on where, when, what size, etc. Although the resorts talk about the positives of the flexibility of the points system, they don’t tell you the negatives, which can make all the difference in getting where and when you want to go.
When you purchase points, you should receive a catalog or some type of schedule that explains the number of points needed to go to certain resorts. It also tells you the size of the unit and the time of the year you can travel with the number of points owned.
Do Not Believe Everything You Hear About Timeshare Points
There will certainly be many places you cannot get into unless you have purchased a lot of points. This is frustrating for many timeshare owners because very few read the material. Even when the entire contract is read, the points buyer may still discover they were over promised availability after the rescission period has expired because they were not allowed access to the booking site until after the rescission period. The catalog shows the number of points required, but it will not show availability.
To learn more on how to cancel your timeshare, Click here.
When you visit one of the resort properties, they will also try to sell you more points at a discount. Don’t fall for the deceptive price freeze. Most timeshare points are worth pennies on the dollar, yet buyers often equate retail price with value. The sales agent will show the member a history of price increases but fails to mention the little to no secondary market. Eventually, you find yourself buying more points with an increase in maintenance fees, and you’re back to where you started, still complaining about availability with less money in your pocket.
Points Inflate Over Time
The most negative aspect to points timeshares, and timeshare in general, is the lack of a secondary market. Points have not increased in value, yet sales agents boast of price increases of 10 percent per year or more, waving their RETAIL price list and leading the consumer to think of the purchase as an investment. Never is the little to no secondary market discussed. Subprime mortgages and junk bonds had some value, but timeshare points are worth virtually nothing as soon as the buyer signs the contract if they need to sell them.
If you purchased points tied to a specific resort, you might have purchased ten thousand points to vacation at the same unit, size, and time every year. Five or ten years later, the points required may have increased to fifteen thousand or twenty thousand points. Now, you must buy more points to go to the same place. Some resorts will tell you that you don’t have a choice. This is surely a lie.
Some resorts will state in their paperwork that the point requirements will remain the same. This is partially true. What they don’t tell you is you may not have access to the new resorts unless you purchase more points.
For New Resorts, You Will Need to Buy More Timeshare Points
When a resort brings on new properties, they often require more points to get into these new properties. If you want to get into the new resorts and stay for more than a few days, or at all, you need to buy more points, go off season, or stay in a smaller unit than you owned.
In my opinion, the points system is an intelligent business move for the timeshare developers but not for most timeshare owners coerced into forking out more cash for something they already own. Lawsuits have been filed by deeded owners who could no longer gain access to the unit, or sometimes even the resort, they had enjoyed staying at for years. Keep your deeded week. Usually, they cannot “legally” change anything you own unless there is a mutual agreement by both parties.
If you are considering purchasing points, check out the member-sponsored Facebook pages and websites in the resource section of this book before you buy, including TUG (Timeshare Users Group). Ask questions on these sites, and you will get honest opinions from some who are happy with their timeshare. Others will answer why they are not happy. I feel these groups are not industry influenced. Each is specific to a resort. It’s good to get opinions from actual members and someone like me from the sales side of the transaction.