Ask RedWeek / July, 2019

Have timeshare developers ditched weeks for points?

I have owned two deeded weeks in California for several years and am considering buying more. But my developer is only selling points these days, not weeks. Why did they change? Are points better or worse than floating weeks? Finally, how do I sell points when I'm ready to retire?

Great questions. According to real estate brokers who specialize in timeshares, the industry's conversion to points, which reached a critical mass about ten years ago, represents a forward-looking business model that also reveals the limitations of the industry's original focus on selling fixed and floating weeks that were deeded to one home resort.

Put simply, the major timeshare developers, with some exceptions, converted their programs to points so they could sell more timeshares and, at the same time, provide more vacation options to owners. The point programs also solved a growing problem: floating deeded-week owners (who own an actual deed to a week at a resort, but not defined dates) were having more and more difficulty getting reservations at their home resorts.

In point programs, owners essentially belong to a vacation club that owns a network of resorts, not just one home resort. Using points as currency, owners can typically book stays at any of the resorts in the network eight to twelve months prior to arrival. At some clubs, owners can also reserve stays by the night, not just weeks. So instead of staying seven nights at one resort — the traditional reservation model — owners can stay two nights here, four nights there, and several more somewhere else, as long as they have enough points to cover the per-night charges.

Developers Tout Flexibility of Point Programs

In recent years, major developers have also expanded their point programs to cover a wide swath of coveted vacation activities, such as Caribbean cruises and guided tours, rock concerts, and celebrity golf events. These alternative programs provided a partial solution to the inventory crunch that owners frequently encountered when trying to make week-long reservations at high-value resorts in Hawaii and other top destinations.

Back in the beginning of timeshare — 50 years ago — companies sold timeshares as an "investment" in real estate backed up by a property deed. Today, most of the brand-name developers sell points for "vacation experiences" that are backed up by a trust that owns all properties in the club's network.

Most of the majors — Disney, Wyndham, Marriott, Vistana, Hilton, Hyatt, Diamond — offer point-based vacations. The points needed for any specific resort depend on the accommodations (bedrooms, baths), location, view category, and season. While programs vary company to company, they all promote vacation flexibility for owners. They also create a new selling tool for developers to upgrade deeded-week owners to the "new and improved" points program. When that happens, the companies convert the deeded ownership to points and deposit the original deed in the trust.

But not all companies have jumped on the points bandwagon. Breckenridge Grand Vacations, with 23,000 owners and world-class skiing, is a deeded-week loyalist. According to CEO Mike Dudick, BGV continues to thrive by offering fractional ownership with fixed weeks that are extremely attractive to ski families who want the same Christmas or President's Day vacations every year. He also noted one recent eye-popping sale — a four-bedroom suite, fixed Week 12, that sold for $575,000.

Westgate Resorts, among several other independents, is also loyal to the fixed-week model. At a recent sales tour, in fact, Westgate reps openly criticized point programs as the equivalent of vapor ware. They also said points are difficult to sell on the secondary market because they are not connected to a real-property deed.

Resale Market Flooded with Deeded Weeks, not Points

Clearly, the deeded-week timeshare product is not dead, but it is being supplanted by the plethora of point programs now available on the market. Almost all older legacy resorts, meanwhile, are still deeded-week operations.

The long-term benefit — or detriment — of point programs will be determined by their resale value. As evidenced by RedWeek's resale offerings, the secondary market is flooded with weeks. Due to their newness on the market, points packages are few and far between in RedWeek's postings of timeshare resales. (The Westin Flex and Sheration Flex programs, for example, were rolled out during the past two years, which means it's way too early to assess their future resale values.)

Resale brokers also report a wide discrepancy in the market value of points packages. In fact, brokers are extremely choosy about what points packages they will even list for sale. Disney and Marriott points have some residual value, they said. Diamond points, on the other hand, are very difficult to sell on the resale market.

The overall resale market has been consistent — and flat — for several years. Brand-name timeshares from trusted companies do sell on RedWeek and other sites, though not for anything close to their original retail purchase price. Lessor known, shoulder-season timeshares also sell, frequently for pennies to buyers who are collecting intervals at specific resorts with hopes of monetizing them in the future.

The resale market is subject to pure economics — too many timeshares, not enough buyers — as well as restrictive developer policies and transfer fees that deter resales. These factors also explain why several major developers are tinkering with a brand-new business model — limited right-to-use contracts that expire after 10 or 15 years. These point-based products, when adopted, would eliminate deed-related issues altogether, since the developer would retain ownership throughout the lease. No lifetime contracts or foreclosures, either.

So, should owners or new buyers choose a point-based timeshare or deeded-week program? Real estate brokers say it is easier for them to sell deeded weeks. But they acknowledge that many points programs offer many more resorts and activities than a single annual interval at a home resort. The probable bottom line of this trend is that most if not all future buyers will purchase points in a widespread travel club that offers far more options to owners than the industry's fixed-week founders ever envisioned 50 years ago.

What do you think? Do you prefer points or weeks? Leave a comment below.

About the author

This answer was provided by RedWeek contributor, Jeff Weir. Jeff is a California-based journalist who has covered California, Congress, and the White House. He also has roots in Silicon Valley, where he directed public relations and marketing programs for high-tech companies. He is also a timeshare owner and member of RedWeek.com.

12 Comments

  • Avatar for janeh28
    janeh28
    Jul 09, 2019 (2 weeks ago)

    We own both traditional weeks and points through Marriott and Resorts West. We use our traditional weeks for properties we like to return to every year. We have learned to make reservations well in advance to insure that we get the dates we desired. On the other hand we have found points to be invaluable in many ways - we can extend time spent on our "weeks" reservation, travel less expensively during slower seasons, and book smaller units, for less points when we are not in need of a full two bedroom. Additionally, points memberships allow us to travel for less than a traditional week, if we want to get away for a few days. We love the flexibility.

  • Avatar for michaelt800
    michaelt800
    Jul 09, 2019 (2 weeks ago)

    It seems like Marriott adopted the best of Starwood post acquisition. You do have points (options is what the resort points are called through Vistana) and a deed to a specific property and time frame which affords you access to your home base 12 months in advance vs 8 months for other properties in the network. While Westin Flex gives you that same 12 month access to seven specific properties other than the separately acquired property, this is not deeded like other programs. However, what Flex did give us is a boost in options which also raised us to the next membership tier and automatically adds unexpected perks to each visit.

  • Avatar for hwrjmcl
    hwrjmcl
    Jul 09, 2019 (2 weeks ago)

    I own a deeded property at Star Island, which is a stand-alone resort. . Since my purchase, additional sections have been developed and owned or run by Wyndham. Star Island tried to get me to convert to a point system, at a cost to me of several thousand dollars. However, as far as I am concerned, when you own on a point based system, the value of your initial purchase declines as newer resorts are added. The points you paid for a week won't allow you to trade into newer resorts. You either have to buy more points or save or borrow your points from other years. And to charge me for the privilege of something that devalues each year, no thanks. I did, however, offer to sell my unit back to the resort, at the current going rate. And guess what...no takers. LOL!

  • Avatar for dallase3
    dallase3
    Jul 09, 2019 (2 weeks ago)

    We own legacy weeks at the Marriott Ko Olina resort. Because that is the only resort we want to go to, it would not make any sense to convert to points. Points would reduce our stay from 14 days down to 12 days.

  • Avatar for deep2th
    deep2th
    Jul 09, 2019 (2 weeks ago) • Updated Jul 09, 2019 12:03 PM

    The points concept only benefits the developer. I own fixed weeks in Aruba at the Marriott Surf Club and the Divi Phoenix. This is where I want to vacation. The sales office at the Aruba Surf Club is still open and yet the resort has been sold out for many many years. What exactly are they selling when they sell points. That is the right to use at any Marriott in the world, but if you think you are going to stay at the Marriott Aruba Surf Club, you are being FOOLED. Someone has to give up their week at the resort in the points system and hope to use for a trade to get into the resort. The points are eligible for all Marriott point owners in the world. Good Luck ! I know I own there and have the right to have a room there. If a room is not made available to me, it will set up a class action suit and I am surprised it hasn't occurred as of yet. Remember Marriott is an American company and they can be sued in the US. I have checked my original contract and feel they have violated clauses in the contract with the ability to sell points due to the fact that there was to be rooms available to trade into which no longer exist due to the points system. My suggestion is do not convert to points. I can be contacted at 732-735-3198

  • Avatar for donh246
    donh246
    Jul 09, 2019 (2 weeks ago)

    We have owned a fixed week at a Divi resort in the Caribbean for several years, and have used it ourselves every year since. We bought it to use, not for resale/investment. We are also Interval International members, because we own another timeshare which we bought only for the exchange privileges. We were recently solicited by II to change to a points-based system. After doing our due diligence we declined. Never during the entire time we have owned the second timeshare have we been unable to get the exchange we wanted. Further, the number of points that this timeshare was worth was so low that it would not get us into any of the numerous resorts that we have always exchanged to. And finally, the fee to change to points was high, meaning that we would be increasing our costs and decreasing the value -- not a good idea.

  • Avatar for garyh143
    garyh143
    Jul 09, 2019 (2 weeks ago)

    We own 2 weeks at Marriott Aruba Ocean Club and 1 week at Myrtle Beach and we love them and use them. In 2011 we purchased 4,500 points and I specifically asked if Marriott would by them back like the weeks at a price of at least 60%. Of course the answer was yes. Well we are now trying to sell our points and Marriott is offering $2.19 per point or 20%.

  • Avatar for janetp278
    janetp278
    Jul 09, 2019 (2 weeks ago)

    We have owned 2 fixed weeks at independent Time Share in Fort Myers Beach, Fla. This was many years ago and able to trade thru Interval for Hawaii, Tennessee, etc very easily. As time shares became more popular, trading became difficult. So the answer was to buy in a popular place (location, location, location) and where you would like to go more often than not. We sold Fort Myers for what we paid - a great purchase. Bought two fixed weeks in the Keys at Hyatt, which is now also going to points. This has worked good only because we like the keys. One drawback is that there are not may Hyatt timeshares. Another place we like is Marriott Ocean Point in Fla. Have one week that can be split to get two weeks - good deal. But, now I understand why the points - so people would go other places than their 'home resort' to free up units. It has been easier the past few years to book our week. We did purchase points, which we can add to our week or add a few days. Also, timeshares are renting to the general public, which was not the case 20 years ago. Lets hope the standards and quality remain up to par and remain as they are and have been.

  • Avatar for maliaz2
    maliaz2
    Jul 10, 2019 (1 week ago) • Updated Jul 10, 2019 01:55 AM

    YOU HAVE NO CONTROL OVER THE EVER RISING COST OF POINTS AND HOW MANY POINTS YOU WILL NEED GOING FORWARD TO STAY AT EVEN THE SAME RESORT THE VERY NEXT YEAR. THEY CAN MAKE UP ENDLESS POINTS AND YOU STILL CAN NOT GET EVEN A POINTS RESERVATION AT THE TIME OR RESORT OR EVEN VIEW YOU WISH TO STAY WITH. AT LEAST WITH A DEEDED CONDO YOU KNOW WHEN WHERE AND WHAT CONDO YOU WILL HAVE. AND YOU CAN RENT IT OUT YOURSELF FOR CASH WHEN YOU WISH TO GO SOMEWHERE ELSE. DEEDS ARE STILL THE WAY TO GO. I WOULD NEVER BUY POINTS. I OWN TWO FIXED WEEKS AT MARRIOTT MAUI OCEAN CLUB IN THE LAHAINA TOWER EIGTH FLOOR OCEANFRONT CORNER TWO BEDROOM VILLA I HAVE NO PROBLEM RENTING IT OUT FOR THREE TIMES MY MAINTENANCE FEES IF NOT MORE. SO ONE OF MY WEEKS CAN PAY FOR TWO WEEKS AT OTHER RESORTS GOOD INVESTMENT FOR SURE.

  • Avatar for claudiah65
    claudiah65
    Jul 10, 2019 (1 week ago)

    As a 30+ year owner of 2 deeded float weeks that I no longer want, since at 75, I now live in Paradise (FL) and have traveled the world, I see in all these plans no way for me to divest myself of my properties. My resort doesn't want to take them back, and I can't sell or even GIVE them away. My only option appears to be to stop paying HOA fees and live with a lien and threats of lawsuits until I die. Where is help for me and others in this timeshare hell?

  • Avatar for jim1966
    jim1966
    Jul 13, 2019 (1 week ago)

    I have Points and I'm interested in selling my timeshare with Kanapalli beach club.

  • Avatar for knasp
    knasp
    Jul 14, 2019 (1 week ago)

    do you have a timeshare closing services that you can recommend?