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Timeshare Classic: What is the point of points
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This is the conclusion of an article on point systems that first ran in the SF Examiner 2001-2003.
Exchanges through Interval and RCI are still done by the week, although that may change in the future. Depending on your club, you may need to convert your points in to a week one of your properties, and deposit that week to trade; other programs, you simply deposit a specified number of your points with the exchange company, and they match it up to an existing request from another member.
Let’s look at some benefits of our point system. Every January 1st, one thousand points are deposited into our account. Last year we spent five days in a one-bedroom in Orlando. We could have spent a night or two someplace else, using the leftover 200 points, or we could leave them on account and add them to the thousand points we get this year. The three-bedroom chalet requires 1,400 points, but we only have 1,200. That might mean we take a shorter trip, but it doesn’t need to. We have several options. We can borrow the 200 points we need from next year’s allocation. We can purchase more points, giving us twelve hundred every year from now on. But most programs offer another alternative; we can rent, one time, for a fraction of the cost, just the number of points we need.
Ownership is structured a bit differently in a multi-location points based club. The old way was often “fee-simple”; just like you own your home. You receive a deed, and you pass it down generation after generation. That was relatively easy to structure when your equity was tied to a specific unit and week in one property. Some of the clubs are “right-to-use”, the membership expires after a certain number of years, anywhere from twenty-five to over a hundred. Many points programs are in perpetuity (forever). The club holds title to the various properties, and each of the members own a fraction of the club, kind of like a mutual fund. One advantage of this arrangement, as the club continues to add new properties, you always will have state of the art resorts available for your enjoyment.
This leads to one cautionary warning. Sometimes a program will change the point value for a particular resort or week – for instance if the Superbowl is being played near your property, the points needed to book that week may spike for that year. Other time’s changes are necessary if a region becomes significantly more or less popular due to new attractions opening or closing nearby. But beware the developer who has the ability to arbitrarily devalue points, it reduces your ability to use your program.
Point have proven so popular, many older programs, both fixed and floating, have offered their members the opportunity to convert to points. Interval International helps developers establish and administer point programs. RCI has gone a step further. Their “RCI Points Program” allow members of non-based programs to convert their usage into points on their own.
Soon we will examine ways you can use your points to pay for airline tickets, hotels and more.
For part I click here.
To Return to "Maintenance fees out of control" click here
