Timeshare Boot Camp 101

Hosted by Holiday's Gail Bennett

Featuring Lisa Ann Schreier

When you think about buying a timeshare, do the following come to mind? High-pressure sales presentations. Vacationing at the same beach resort, at the same beach time, year after year…after year. Your hard-earned vacation dollars flying out the window on a product you can’t figure out or use. If these images come up for you, you need to give us 30…minutes, that is…not push ups.

This free “Timeshare Boot Camp 101” Webinar will get you in timeshare shape! Lisa Ann Schreier, “The Timeshare Crusader”, will train you to take advantage of timeshare’s many positives and prepare for any pitfalls! Lisa will teach you the basics and not so basics about timeshare. And you’ll learn it all from the comfort of your home, with absolutely no obligation to purchase anything.

Lisa will discuss:

1) The benefits and drawbacks to timeshare.
2) What types of timeshares are available.
3) How to determine if timeshare is right for you.
4) Do timeshares appreciate in value like other real estate?
5) How much you should pay for a timeshare.

Webinar Transcript:

Gail:                 Good evening, we are live here in the not so sunny Seattle today at Holiday’s 4th and counting webcast.  I’m Gail Bennett, your host here in Seattle.  And our special returning guest, Lisa Ann Schreier, is located in Orlando, Florida.  I also want to mention our design expert, Andrew is also with us remotely in sweltering Boston, Massachusetts.  So, we have three points of the U.S. covered today.  It’s pretty amazing what technology is capable of when you come to think about it.

                        Today, we’re in for a treat because Lisa Ann Schreier, whom was with us last month and gave us tips on how to maximize your timeshare, is here with us today to give those of you new to the timeshare industry and concept, “Timeshare Boot Camp 101.”  And you don’t have to give us 50’s.  She’s going to reveal the good, the bad, and the not so basic info that everyone considering purchasing timeshares needs to know, in order to make an informed decision.  Now, if you missed last month’s webinar, let me introduce Lisa Anne Schreier, our residential timeshare expert.  She’s the author of, “Surviving A Timeshare Presentation,” and “Sessions From The Sales Table,” which is an excellent book, and “Timeshare Vacations For Dummies,” which I understand is our gift to the folks who are attending this evening’s web cast.  So, stay tuned at the end of the web cast to hear how you can obtain your own copy of Lisa’s book, “Timeshare Vacations For Dummies.”

                        Lisa’s also the founder of Timeshare Insights, which is a consumer information source for those who’ve attended a timeshare presentation and survived and those who own timeshares.  Lisa’s worked in the timeshare industry for more than seven years, and also has served as contributing writer for the Timeshare Beat for three years.  And yes, she is a former timeshare salesperson.  So, today, we’re going to be covering timeshares, the numbers, are you the only one out there, the benefits, the drawbacks, plans, cost and much more.  So, without further ado, let’s get started.  Lisa, take it away.

Lisa:                 Hi, Gail.  Thanks for having me this evening.  Hi to everyone out there.  I am located in not so sunny Orlando, Florida, only because it is now 8:34 and it’s pitch black out there.  But, it was sunny today, so that’s the reason I moved here.  So, let’s get started.  This is actually the first of our timeshare boot camps, which we’re going to be talking about later on at the conclusion of the webinar.  As Gail said, we’re going to be discussing some basics for newbies to timeshare and perhaps some not so basics that people think they know, but they’re not quite sure about. 

                        A couple of real basics about timeshare.  Timeshare is spelled one word.  It is not a hyphenated word, it is not two words.  I know when there’s a lot of people talking about timeshare or writing about timeshare, they misspell it, they’re not quite sure.  Timeshare has been around for 40+ years.  It’s not a new industry.  And I think it’s important as we talk about the industry to use the proper nomenclature.  Timeshare, one word.
                        What is timeshare and what timeshare isn’t?  Timeshare is vacation ownership.  It is vacation ownership.  It’s the same thing in timeshare.  Some companies out there don’t like the word, “timeshare,” because it has a negative connotation to it that may discuss later on this evening.  Vacation ownership is exactly the same as timeshare.  Timeshare is not, however, the same as a vacationing club.  There are many, many vacationing clubs out there.  Vacationing clubs generally involve purchasing a sort of club membership.  You may have the renewal fees after a year.  What a club membership gets you is access to extra timeshare inventory.  You don’t own anything, therefore, it’s not truly vacation ownership.

                        And I really have two very simple definitions of timeshares.  The first one is owning versus renting.  A timeshare is nothing more or nothing less than the difference between owning the vacation accommodations and renting the vacation accommodations.  Second definition, you may want to think of a timeshare as prepaying for today’s and tomorrow’s vacation at today’s prices.  As any of you who vacationed over the last few years know, hotel prices, vacation prices in total continue to rise every year.  A timeshare can be a great way for some people to put a lock on a lot of the inflation, what happens with vacation prices.

                        So, those are sort of the basics.  And we’ll move on now to a little bit of the numbers, something that some of you might be surprised and especially people who are new.  There are more than 5,900 timeshare resorts, worldwide.  You can find timeshare in almost 100 countries, worldwide.  It’s pretty much, I like to joke with people, short of Afghanistan and possibly Kansas, you’re going to find timeshares pretty much anywhere.

                        Right now, Florida has the most number of timeshares of any state.  But, in an interesting statistic that I just read, within 10 years, the country of Dubai will have more timeshares in the State of Florida, expensive timeshares, but nevertheless, they are a very up and coming area for timeshares.

Gail:                 Wow, that’s pretty interesting!

Lisa:                 It’s amazing what’s going on out there, in terms of building and development.  Currently, there are more than 7,000,000 timeshare owners.  Statistically, we find that almost 70 percent of those owners own more than one timeshare.  A timeshare has, enjoys, I should say, a very high satisfaction rate.  Approximately 88 percent of people who were polled in a recent survey that have a timeshare are quite happy with them.

Gail:                 Lisa, I’ve got a question for you.

Lisa:                 Sure.

Gail:                 Do you know how it actually got started, how the concept got started?  Because I’ve heard like a story that it got started with just a few people that owned at different like resorts and stuff and started swapping it out with other people that they knew.  And then, it got a little bit bigger when the exchange companies got involved.  I heard the other story, where it started off with campsites.

Lisa:                 Good question, Gail.  The story that I always was told and I actually mentioned it in the second book, “Time Share Vacations For Dummies.”  It started off in the late 1960’s in either Switzerland or in France.  And it happened between people who owned various vacation homes.  They got tired of going to the same home in the same mountains every year, so they decided to swap out.  And from there, RCI, the first exchange company, was developed.  As a matter of fact, I have a very old photocopy of RCI’s first exchange catalog.  It consisted of 33 resorts. 

Gail:                 Wow!

Lisa:                 It’s grown quite a bit from there.  So, yeah, it’s been around for almost 40 years now.  I think it started in something like 1969.  The campground thing that you were talking about also started around that same time.  So, I’m not quite sure who can truly lay claim to it, but it has been around for a very long time and it did start off in Europe, whether it was the people who owned the vacation homes or the campgrounds, but it did start off in Europe, was brought to the States about 1970 or so.  So, it has been around for a very long time.

Gail:                 So, it’s been tested, tried and true sort of thing?

Lisa:                 Tested, tried and true.  And the basic premise of it is pretty much the same.  It’s the ownership versus the rentership that’s basically at the heart of all timeshare.

Gail:                 And another quick, interesting statistic that I heard was that overall in the U.S., only five percent of the American public . . . actually, the number is upwards of 7,000,000, and that’s probably worldwide, only five percent.  And I think that as time goes on and more and more people start appreciating the leisure environment, the leisure and part of the health benefit, more and more people are getting involved in it.

Lisa:                 Absolutely.  I always told people the hardest thing about timeshare was actually buying a timeshare.  You guys make it very easy, but for a large number of people to have to suffer or endure a high-pressure timeshare presentation, that, for most people, is the hardest thing about it.  Timeshare has developed a sort of bad reputation back in the early 70’s, mid 70’s, where there was a lot of unscrupulous developers.  Most of those have essentially gone by the wayside.  Like you said, 7,000,000 looks like a large number of people, but when you look at it, that’s less than five percent of the American population.  So, it had a good ways to go before it was really well accepted.  So, those of you who are already in timeshare, consider yourself ahead of the learning curve and congratulations to you.

Gail:                 Awesome.
Lisa:                 So, Andrew, if you could move on to the next slide?  Thank you.   And also, just to let everybody know, we are going to be pausing here and there during the webinar, and we’re going to be asking some live questions, where you’ll have a chance to answer in and share your answers to everybody.  So, Gail and I are both very excited to hear what everyone has to say. 

Let’s talk for a moment about the two types of timeshares.  There’s basically two types.  One is straight out ownership, which is deeded, and one is right to use.  Within both of those categories, you’re going to find the following three types:  Fixed week, floating week and point-based timeshare.  Let’s talk for a moment about the ownership or the deeded timeshare.  Basically, ownership is, in fact, what it sounds like.  It’s deeded through a deed.  You generally have a full bundle of rights, which we’ll be talking about later what those bundle of rights are when we get to benefits of timeshares.  And it is often real estate based.  Again, we’ll be talking about the difference between this type of real estate and other types of real estate later on.  But right now, let’s just talk about basic ownership, which is deeded generally based on real estate.

A right to use plan is exactly what it sounds like.  You, the owner, have a right to use the property either for a specific number of uses or a specific timeframe.  Examples of this type, much of the timeshare you can buy in Mexico is a right to use.  It gives you access to one week every year for 20 years or, in some cases, 20 weeks combined.  So, if you take 20 weeks of vacation in 2008, you’re done.  Your right to use expires. 

There’s also a certain type of right to use ownership that gives you access to one week a year for a certain timeframe.  Disney, for instance, Disney’s vacation club is a right to use.  It is a points based, which we’ll be talking about.  And your right to get your points expires in a certain period.  So, we have sort of those two main things, the deeded and the right to use.

Gail:                 What would you say is for people, the better one, because I get that question a lot here at Holiday?  A lot of people call in and say, “Well, what’s the right timeshare for me?”  How would you go about answering that question?

Lisa:                 It really depends, Gail, on how long you want to use it.  Do you have anyone that you can will it to?  There is no one answer for everybody.  If I had to generalize, which can be dangerous, I had to generalize and I’m going to spend the money, anyway, I’d rather have the deed.

Gail:                 Right, it makes sense, it’s real estate.

Lisa:                 Yeah, exactly.  Even though I have no one to will it to because my cats generally cannot use a timeshare by myselves, and that’s all I have, but generally speaking, if I’m going to spend the money, I prefer the deed.  It gives me a little bit more sense of security.
Gail:                 Now, the points based, are they normally right to use or are they also deeded?  Or, does it vary, as well?

Lisa:                 It varies.  You’re going to find points based plans within ownerships as well as right to use.  We’re going to get into that in just one second.  Let’s first talk, if we could, about fixed weeks.

Gail:                 OK.

Lisa:                 Fixed weeks, basically, is very simple.  It gives you the right to a specific week at your home resort that can be used there or at another affiliated resort, based on prevailing exchange rule, which we’ll talk about.  The main benefit of a fixed week timeshare is that if you plan on returning to your home resort, that week is waiting for you.  A resort cannot give it to somebody.  That week is yours at that resort, without having to make reservations.  But, if you want to trade it, you still have to go through the exchange companies, which we’ll talk about in a moment.  A lot of people do like to go back to their home resorts every year at the same time.  And for those people, fixed week is the way to go.

Gail:                 And the other thing that I know with the resort and fixed week closings is that probably about 30, 40 percent of people that purchase from us like to buy a property that is near where they live so that they can maybe take advantage if the resort offers it day use.  So, the fixed week, they can get a summer week.  For instance here, in Washington State, it’s good that they can have the day use for them, as well.

Lisa:                 Absolutely right, and I think we discussed some of the benefits of that in the last webinar we hosted, where there are resorts that do have specific day use.  So if you live close to the resort, you are entitled to come to the resort at no cost or a very minimal cost and use all of the benefits of the resort without using your fixed week or points.

                        Now, a floating week gives you the right to a week during a specific season.  Seasons can be referred to as high, medium, low.  Sometimes, they’re color-coded, red/white/blue, red/yellow/green, diamond, platinum, emerald.  They have cute little names at every resort.  But, it is a week, not the week during a specific season, again, that you can use at your home resort or at another affiliated resort, based on the exchange rate.  It gives you a little bit more flexibility, but again, if you’re looking for a high, tradable week, for instance, if you own week seven, Daytona Race week in Daytona, you’re going to have a higher chance of trading that specific week out because it is a high demand week.  Whereas, just a week, it’s up to the resort to put in a week and have a little bit less control as an owner for those weeks.

Gail:                 That’s an excellent point, and I can tell you from working on the operations side, one of the things that we did at the resort in Orlando that I worked at is within the condo bylaws, there was actually rules that said that the resort guarantees to owners at that resort that if they booked their reservation between June and November previous to the new year coming here, that under the rules they listed with the FTC, that they had to guarantee that week to them.  So, there was a window of guaranteeing that week to them, so then, they could get what they wanted under the floating cycle.  But after that, it was pretty much whatever was available is what you got.

Lisa:                 Exactly, so it always pays to look at your condo documents when you’ve got them and find out when your window is in getting you a good week.  Oftentimes, for instance, in certain places, Las Vegas, you’ll hear it defined as all red or all high season.  Orlando, all red.

Gail:                 Hawaii.

Lisa:                 Hawaii, all red.  Well, that is and that isn’t true because there is, as I like to call it, there’s blood red and there’s pink red.  Right now, in Orlando, it’s slower, so it is pink red, whereas July, when everybody’s on vacation or the last week of the year is what I call blood red.  So, it’s always important to understand what your window is as an owner for making your reservation if it’s a floating week, otherwise, you may be putting in a less desirable week.

Gail:                 Absolutely.

Lisa:                 Thank you for that clarification.

Gail:                 You’re welcome.

Lisa:                 The other types of points, ownership is valued at a certain number of points, which is used as your vacation’s current week.  Points are sort of the new buzzword in timeshare.  There’s lots of talk whether or not points are better.  Points do give you more flexibility.  For instance, if you go to a one-bedroom, you would use fewer points than if you go to a two-bedroom.  Again, read the condo docs and make sure you understand who is actually in control, who is actually manipulating your points.  You want as much control as the owner as possible, without giving up your rights to somebody who you might not even know.  So, you’ll find these three types within both of those categories.  You’ll find fixed week, floating week and point based in both ownership and right to use.

                        Andrew, how about a polling question, how about one of our questions?  Can you put up the first one?  There we go, so everybody can take a moment.  Please select one, do you already own a timeshare or multiple timeshares?  I’ll give you a couple seconds to answer and we’re going to be able to see everybody’s answer live.  I feel like playing the Jeopardy theme meantime.

Gail:                 Yeah, how’s that music go?
Lisa:                 Ding, ding, no, I wouldn’t know these.  Interesting, 64 percent of you already own a timeshare, 36 percent do not.  Very good, thank you everyone for your answers.  We’re going to be having more questions as we go through this, so we’ll keep these answers in mind.  64 percent already own.  That’s interesting.

Gail:                 It kind of goes with our little statistics that we did earlier.

Lisa:                 Exactly, exactly.  So now, we’re going to go through the benefits of timeshare, your bundle of rights.  What is a bundle of rights?  A bundle of rights is when you own, as opposed to a right to use generally means that you can use it, rent it, will it, save it, borrow it, borrow from year to year and sell it.  Again, you may use it, yourself, you may save it from one year to the next year.  You can borrow ahead a year.  You can rent it.  And we’ll talk about the restrictions on that, renting it to other people.  And because it is deeded as a piece of real estate, you may sell it.  Those are your full bundle of rights when you actually own somewhere.

                        Now, there has been some talk about renting.  We’re going to talk about that in a moment.  You are free, according to all reputable sources, to rent your week at your home resort.  Major exchange companies frown on people renting a week after they switched it.  For instance, I met someone in Maryland earlier this year who had actually had his RCI membership rescinded by RCI because he was using it as a money making rental business.

Gail:                 Oh, they say no no to that.

Lisa:                 They say no no to that.

Gail:                 No, no!

Lisa:                 And it’s important that your primary use of a timeshare should be for your own personal vacation enjoyment.

Gail:                 Now, I do see this, though, because we here at Holiday, do have lots of timeshare properties in our own name that oftentimes, we get owners who’ve purchased that have additional weeks.  What they do, is if they own the week at the resort and they’ve secured the week at the resort, through the resort with a reservation that they can’t use, they post it on redweek.com, which I’m pretty sure you’re familiar with, Lisa.

Lisa:                 Yes.

Gail:                 And for the price of your maintenance fee, ‘cuz I’ve used redweek, myself.  You know, I have one week of timeshare that’s a lock up, two weeks a year.  And I sometimes need additional and with the bonus weeks through RCI, it doesn’t always match my needs.  I’ve gone on redweek and found incredible deals.  And most of those weeks are owners that own there that can’t utilize the week and will put you in as their guest . . . I just came back from Vegas and did something very similar to that, for the cost of the maintenance fee, which is a terrific deal.

Lisa:                 It’s a great deal.  It really is.  And again, those are owners, if I understand you correctly, that own at that resort and are unable to use it.

Gail:                 Correct.

Lisa:                 The major exchange companies don’t have a problem with that.  It’s if you take your week that you’re not using, trade it for Hawaii, where you do not own, and then, rent it, they frown on that.

Gail:                 That’s the problem, correct.

Lisa:                 That’s the problem.  So, again, rent it at your home resort.  Now, another benefit, we have here restrictions and limitations for non-owners.  Back in the days when I was a timeshare salesperson, I used to tell people one of the benefits of owning a timeshare is you are among other people who own, as opposed to just going to a hotel with everyone.  Again, generalizations can be tricky, but if you had to generalize and ask people, “Who takes better care of things, owners or renters?” most people would say, “Owners.”  Another question, who typically has higher standards, owners or renters?

Gail:                 Owners.

Lisa:                 Most people, again, would say, “Owners.”  Exactly right.  I used to work part-time at this very, very expensive resort, it was a Walt Disney Resort.  As a matter of fact, it’s their Flagship resort.  I used to work at Disney’s Grand Floridian, their most expensive resort.

Gail:                 It’s a gorgeous resort.

Lisa:                 It’s a beautiful place.  Rather pricey.

Gail:                 Very pricey.

Lisa:                 And yet, you would still see the difference between people renting a place, an inexpensive place, and people owning a place.  There is a difference.

Gail:                 There’s pride in ownership.

Lisa:                 There is pride of ownership.  Sometimes, you do pay for that, but sometimes, people think, I personally do, I’m sure you do, that it’s a good benefit.

Gail:                 Yes.

Lisa:                 Now, the limitations for non-owners, again, some resorts do have some block of rooms and you’ll be in a better position to answer this than I can, to renters.  But generally, my experience is limited to a certain building or a certain phase.

Gail:                 Yes.

Lisa:                 The resorts, simply, if they have excess space that’s not being used, they would rather have somebody in there with the hopes that these people can, then, become owners after they see what it’s like to stay there.  Is that right, Gail?

Gail:                 Yeah.  Based on my experience with Silver Lake Resort, one of the things that was in the public offering statement, which is the condo facts and bylaws that you would have to submit to the FTC about how you are going to run the property, and this is how the timeshare industry cleaned itself up from back how it was actually in the U.K. when it got started, where they were selling things, and they continued to sell more than what they had, and people were without space and room, was that the developers would manage and own a percentage of the property until it was sold out. 

So, for instance, at the last property that I worked at, Silver Lake in Orlando, there are eight buildings.  The last two buildings, which is the final phase of it, the developer had to manage and he would use those rooms, which is about 30 to 40 percent, on a marketing program, where they would book you for tours and put you in.  And the other buildings were sold out and only made available to the owners of the timeshare units.  And they had to have a deadline as to when the developer would be done, with a year and a date and it would be moving on so that the owners could manage their own properties.

Lisa:                 OK, great, that clarifies a lot.  So, you do have the restrictions, you do have limitations, and it’s that whole pride of ownership.  But, when you own a timeshare, you’re typically around like-minded people.  The other two benefits, we’re going to go through real quick, a lot of times, people will tell me that once they own a timeshare, they simply vacation more.  A corollary to that is people who need a kick in the rear end to go on vacation, they’re forced to go on vacation because they’re paying for it.  And as I always like to say, it’s better to be forced to go on vacation than to be forced to go to the dentist, with all due respect to my dentist friends who may be listening out there. 

It’s a great way of going on vacation.  You have more available to you.  And I like to think it expands your vacation horizon.  Lots of people who own timeshare do more than they ever thought they would do because, it also ties into benefit number four here, you save money, you can save money on your vacation accommodations.  You can generally do more vacationing and actually have more fun.  For example, an exotic place like Venice, Italy is a very, very expensive place to go to even if you do own a timeshare.  But the point is, would you rather pay $275.00 a night for a hotel room or $199.00 to exchange your week?  Well, I’d rather pay the $199.00 because with the money that I’m saving, I can have more fun in Venice.  But, you don’t go to Venice just to get a nice hotel room.

Gail:                 You’re right, exactly.  You go for the experience.

Lisa:                 You go for the experience.  You don’t go for the actual room, the actual condo, the actual resort, although it helps.

Gail:                 Yes.

Lisa:                 But for $275.00 a night, I wouldn’t have had a lot of fun in Venice.

Gail:                 Yes.

Lisa:                 Admiring the wallpaper the whole time.  Andrew, before we move on to the next slide, could you do me a favor and put up the next question for everybody?  Thank you.  So, the next question is for those of you who do own timeshare, 64 percent, so tell us how you purchased your timeshare.  Did you buy it directly from the developer?  Did you buy it from Holiday?  Or, did you buy it another way?  Another way would either be from another reseller, perhaps a friend, a family member, a co-worker.  How did you purchase your timeshare?

Gail:                 What do you think the stats are this time before Andrew shows it?

Lisa:                 I’m going to say and I may be wrong here, I’m going to say 53 percent from the developer.

Gail:                 You know what, I’m going to hedge on that and say 48 percent.

Lisa:                 48 percent, all right, let’s see.

Gail:                 Drum roll, please.

Lisa:                 Ooh!

Gail:                 Wow!

Lisa:                 Wow, that’s very surprising, almost even.  So, 28 percent bought it from the developer, 31 percent from Holiday, so congratulations to you guys, you win.  28 percent from other sources.  Very interesting.

Gail:                 That is very interesting because there was another statistic that I read that said of the five percent of American population that own timeshare, only two percent of those people purchased it from someone other than the developer.  In other words, most people when they buy their first timeshare, buy it from the developer, get the concept of it, love it so much, but don’t want to pay that high price, that high ticketed price which is all marketing rolled up into it.

Lisa:                 Exactly.

Gail:                 And research and go out there and find a better way to save tons of money.

Lisa:                 And there are better ways to buy, and we’re going to be talking about that.  So, let’s talk real quickly about the drawbacks of timeshare, or what some people perceive to be the drawbacks.  Number one, owners must pay annual dues in exchange for usage fee.  There is no such thing as a free timeshare.  Any time someone tells you something’s free, there is generally a catch.  So, you do have to pay annual dues.  And if you belong to the two major exchange companies, we’ll be talking about exchanging in a moment, the two major ones being RCI and Interval International, commonly referred to as II, you’re going to have to pay exchange fees or usage fees. 

Trading a timeshare or exchanging a timeshare is oftentimes, not as simple as other people make it sound.  It’s not just a matter of opening up the book, picking a resort in Hawaii, calling and saying, “I’d like to go there.”  Basically, if you own an off season week in Alabama, you ain’t going to Hawaii, no matter what anyone tells you.  It’s very, very difficult.  Trading is based on like for like by demand, location, size of unit, quality of resort.  All those play major roles in when the exchange company evaluates a trade. 

Now, you’ll see, certainly, location is key, as we talked about, location is key, unless, and this is very important, unless you are talking about what is now called RCI’s points, what used to be called RCI Global points.  RCI points is based strictly on if you have points and you call, there’s a certain reservation window, first come, first served.  Alabama points, exactly the same as Orlando points, exactly the same as Wyoming points, exactly the same, points are points are points.  That was the hardest thing.  I was working with Gail at the resort in Orlando back some years ago, when we switched from selling weeks to points.

Gail:                 That was pretty mind-boggling for a lot of people.

Lisa:                 That was very confusing.  Lots of people were getting confused, are you trading Orlando points?

Gail:                 Yes.

Lisa:                 You’re not trading Orlando points, you are trading points.

Gail:                 You are trading points.

Lisa:                 Points are points are points are points are points.
Gail:                 And I just wanted to interject that with maintenance fees and your reference to an off season Alabama week, maintenance fees is straight across the board, whether you have a popular week or a non-popular week.  It goes with the unit size in the resort that you own.  So, you want to be aware that what you purchase is a desirable week, a desirable location if exchanging is important to you.

Lisa:                 Absolutely, very good point.  If you own in a good location, good for trading, you’re going to be paying maintenance fees for a “good week” or a “bad week.”  Very good point, thank you for that clarification.  So, location is key.  You always have to ask yourself do you plan on using your timeshare more at your home resort or more to exchange?

Gail:                 Lisa, really quick, how did you explain, when you had mentioned about Silver Lake Resort and us going over the points, when we went over the RCI points and became one of the first resorts in Orlando to join on with RCI in that program that they had that would start off as global points network?

Lisa:                 Correct.

Gail:                 Instead of being RCI points.  How did you explain to owners at the resort what that concept of points was about?  They had a week, they bought a week, but all of a sudden, the resort went to points.  How did you explain that?

Lisa:                 Basically, I told them they still owned a deed.  Silver Lake is deeded ownership.  And I told them, “You still own your deed.  And the points are merely, we’re going to take your ownership and value it at a certain number of points.  And, therefore, your points are used as your vacation currency.  So, rather than being locked into, let’s say, a two-bedroom, you can use it for various things.”

Gail:                 Awesome, very good.

Lisa:                 It’s just a good way of getting more flexibility out of it.  And it’s basically just the currency that you make your reservations with.  So, if you only want to go for three days, it would be foolish to give up an entire week of timeshare.  Now, you would only use three days’ worth of points.

Gail:                 Right, and I also own at Silver Lake Resort, and I have points, as well.  And I can tell you I totally love it.  I booked last week three units for week number seven in Puerto Vallarta at the Grand Mayan resort.  It’s 45,000 points each.  I’m bringing my family, my neighbor’s family and my other girlfriend’s family.  We’re all going to Puerto Vallarta the second week of February to have a nice little get together, going away.  It was totally easy and simple.  And I only owned one week and a three bedroom at Silver Lake Resort and was able to get three units for the same exact price Puerto Vallarta.

Lisa:                 That’s fabulous!
Gail:                 I totally love it.

Lisa:                 I find for most people I consult with, a good 85 percent of people are better served with points.

Gail:                 I have to agree there.

Lisa:                 Fabulous, so we have the next question up there.  So, those of you who own a timeshare, do you use your timeshare more at your home resort or more to trade?  I am bowled over by this response.  I thought for sure, it would be vice versa.

Gail:                 Oh, wow, look at that!

Lisa:                 72 percent of our people out there use it at their home resort.

Gail:                 Isn’t that interesting because normally, the general public is the other way around.

Lisa:                 Yep, generally, when the big companies do surveys, it is generally flipped around.  Very few people take the weeks.  Almost an exact flip of 20 percent of people use it at their home resort.  So, I’m glad you guys are enjoying your home resort there.  Congratulations, everybody!

Gail:                 Yeah.

Lisa:                 And the last thing here I want to talk here quickly, and I know we’re getting very verbose this evening, I apologize.  Consumers must be aware of terms.  Please read the documents, please ask questions.  Holiday is very, very good if you’re buying a timeshare or booking a timeshare from Holiday, at answering all your questions.  You don’t want to be signing paperwork that you don’t understand.  You don’t want a salesperson, if you’re looking at it from the developer’s side, to be glossing over some information. 

You must be aware of terms, like reservation windows, like weeks, like points.  Be careful you understand everything.  We’re not talking about a $50.00 pair of shoes here, but you’re spending several thousand dollars.  Be aware of terms.  Don’t be afraid to walk away from something if you don’t understand it because I always say go with your gut feeling.

Gail:                 The other thing I just want to mention is about working at Silver Lake Resort.  One of the things that I often got from the new owner was that some people felt that when they purchased their timeshare from the developer, that they were able to in later years, resell it for the exact same amount of money, which is never, ever the case when you buy from a developer.

Lisa:                 No, absolutely not, absolutely not. We’re going to be talking about this, I think, in either the next slide or the slide after that about even if it is real estate, it is not what I call Donald Trump type real estate.  We’re going to be talking about residual values in a moment.  So, real quick, five questions that I’d like to tell my consumers that I work with, how do you determine if timeshare’s right for you?  Some of these sound basic, but really, you’d be surprised.  Number one, do you like to vacation?  If you don’t like to vacation, don’t be buying a timeshare.  Really, there’s better use of your money.

                        Do you vacation at least seven nights a year or is the plan would you like to vacation seven nights a year?  Again, most people who own timeshares find that they are able to do more vacationing.  Number three, I get a lot of flack for this one, do you spend more than $70.00 a night?

Gail:                 Why do you get flack?

Lisa:                 Well, because a lot of people say, “Well, what does price have to do with it?”  Price has to do with it in a certain number of things.  I have had the experience where I have taken people when I was a salesperson, on a tour of the resort and several people show them the condo, and their answer is, “Oh, this is too nice for me.”  Frankly, I don’t know what that phrase means.  There is nothing too nice for me. 

Basically, you’ve got to be comfortable, and I throw this third thing in for this reason.  If you are the type of person that is typically spending less than $70.00 a night on average, a couple things.  Most people are doing that because they can’t afford anything more, although I don’t really know what you’re finding for $70.00 because the average price of a hotel room in the United States is $144.00 a night.  You’ve got to feel comfortable in this style of vacationing. 

Most people will say and we can ask the people at a later date, generally speaking, timeshares are nicer than typical hotel accommodations.  I’m not knocking hotel accommodations, but you have to be comfortable.  If it’s not something that’s within your comfort level, you shouldn’t be buying it.  You need to ask yourself as we talked about earlier, where do you like to vacation?  Are you the type of person who enjoys camping in the north woods of Canada with no one around?  You’re not going to find a timeshare there.

Gail:                 That’s very true.

Lisa:                 Have you done your homework?  Do you know some basic information about timeshares?  Have you worked with someone like myself, like Holiday, so you know exactly what it is you’re looking for?

Gail:                 Right.

Lisa:                 Andrew, do we have another question before we go on to the next slide?  I think we only have one more slide left.  Have you ever attended a timeshare presentation?  This would be a timeshare presentation from the developer, where you’re generally offered discounted stay, attraction tickets, dinner certificates.

Gail:                 Some sort of bribe.

Lisa:                 Some sort of bribe.  Legal, but bribe, yes.

Gail:                 I’m going to say 98 percent of our audience is yes.

Lisa:                 I would tend to agree with you, but let’s see what the answer is.  We’re going to the high 90’s. 

Gail:                 High 90’s, yeah.

Lisa:                 Oh, 79 percent said yes.  21 percent said no.  So, I don’t know who to congratulate, the people who haven’t gone through one yet, or the people who have and have survived it.  OK, Andrew, one more slide I think we have after this one, I think. 

So, we were talking about real estate, we’re talking about deeded ownership, price versus value, investment and residual value.  Let’s cover the third one, this residual value, only because Gail had just mentioned it.  Residual value, you are not going to make money buying a timeshare and selling it several years later, not going to happen.  In very few cases, and the cases are so rare that I generally, cases where you may make profit.  New York City, maybe.  Sanibel Island, if you bought it 20 years ago.  Sanibel’s pretty sold out.  Possibly, Venice Italy.  But, these are few and far between. 

I want people to learn about residual value this way.  Let us assume you buy a timeshare today.  We’re going to talk price in a moment.  Two ways of buying it, from the developer, through a reputable reseller, such as Holiday.  Let’s assume for simplicity sake, you buy a timeshare today for $10,000.  You use it for 20 years.  In 20 years, you sell it for half of what you paid for it.  People will go, “Well, I wouldn’t do that.  I’m taking a hit on this, I’m losing money.  You’re not losing money because had you not bought a timeshare, how much money can you sell your hotel for?  Basic Timeshare 101.

So, moving up, investment.  It is an investment.  It is an investment, however, in your future vacations.  It should never be considered a real estate investment or as I like to call it, a Donald Trump type of deal.  Lots of salespeople will tell you, “Oh, well, if you buy it today, the land prices are going up and imagine what you could sell it for in 20 years.”

Gail:                 And that’s never the case when you purchase from the developer.  It really is not.  When you’re paying that much amount of money, it’s never ever the case with the developer.
Lisa:                 Absolutely.  As we talked about in our last webinar, the average price of a timeshare from a developer will run you about $15,000.  65 percent of that money is wrapped up in sales and marketing costs.

Gail:                 Unbelievable.

Lisa:                 It has nothing to do with the value of the land at all.

Gail:                 Yes.

Lisa:                 And the first one, since we’re working backwards, price versus value.  Consumers have to do kind of an in their head figure, price versus value.  And we’re talking about doing your homework.  Be honest with yourself, how much are you spending already on vacation accommodations?  And for those of you over the age of 25, how much have you already spent on vacation accommodations and have nothing to show for it?

Gail:                 Yes.  And you know, one of the things that I do when I think about this question or if a customer asks me this question, not thinking from the developer’s side, when you purchase from a developer, that up front cost fee is huge.  But, when you purchase either from a secondary market, either a reseller, a friend or family member, it’s a little different.  I tell them to look at what your annual dues are.  For my case, I own a three-bedroom unit.  My annual dues are about $700.00.  I get two weeks worth of points, so I get a little bit more.  So, I take the amount of days that I get out of that vacation per year, divide it into my maintenance fees that I pay.  And that is my cost per day. 

And because I purchased mine from a secondary source, that up front money that I pay, $5,000, what have you, I’m going to be able to recoup at least 50 percent of it, and I’m OK with that in three to five years because it’s deeded.  And if I recoup that much and I was able to get 10 years worth of use out of it, I’m pretty happy.  I feel like I’m coming out ahead because I’ve locked in future costs at the maintenance fee price that I’m paying today.

Lisa:                 Absolutely, absolutely.  And again, could you be able to do what you’re doing next February in Mexico without the benefit of timeshare?

Gail:                 No, I called the resort just because I like to know how much money I’m saving, you know?  I called the resort.  $150.00, it’s one-bedroom, $150.00 if I’m an owner at that resort per night.  And if I’m not an owner, I think it was like $220.00, something like that per night.  And I got three units, three units for President’s Week, unbelievable, unbelievable.

Lisa:                 Yeah, exactly, so absolutely look at price, look at value.  Again, look at where you want to go on vacation.  Andrew, am I correct, we have one more question and then, we’re going to wrap it up with the cost and the fees.  I can’t remember if we’ve asked four questions or five questions.  For those of you who don’t own timeshare yet, if you could kindly tell us what has stopped you from owning up until now?  Is it cost?  Is it, overall, too expensive?  Was there not enough information given, or there was just something you didn’t understand?  Or, was it something else?

Gail:                 Sometimes, people get too much information.

Lisa:                 I was thinking that.  I told people everything they needed to learn about timeshare and do you know what I found out?  Nobody cares.

Gail:                 My brother, my very close brother went to a timeshare presentation, even though he knows I work in the industry, of course, he’s got to find the information on his own, went to one, got so much information, was so overwhelmed at the end.  Him and his wife just blew up at the end and said, no, no, we can’t do it.  He just felt he didn’t get he correct information to make the right decision.

Lisa:                 Exactly.

Gail:                 And he didn’t trust anybody else.  He trusted himself or myself or families and he wanted to the find information out on his own.  And the information that was given to him by the salesperson was like everything.  They were whipping out the book and telling him every detail.

Lisa:                 Every detail.  And all that is is reasons for people not to choose anything to buy today because they’re just confused.

Gail:                 Yes, absolutely.

Lisa:                 And so, Andrew, what are the answers?  Interesting.  Not enough information given or didn’t understand and 45 percent said other.  Maybe some of you will be asking questions about where those others are coming from.  Again, I’m floored by these answers.

Gail:                 I am, as well.

Lisa:                 OK, Andrew, one more slide and then, we’re going to wrap this up.  So, let’s talk about cost and fee.  As we talked about earlier, typically, if you buy it from a developer, you’re running around $15,000.  You can save yourself a whole lot of money, basically 60 percent less than that, if you buy it from a reputable, reliable reseller with Holiday.  In any case, you’re going to have the annual dues, you’re going to have the maintenance, you’re going to have real estate taxes, you’re going to have various fees. 

Again, if you buy on the water, on a golf course, you may have assessments.  Make sure you ask about the history of assessments.  You’re going to have memberships if you’re going to belong to RCI or II.  And I believe, Gail, correct me if I’m wrong, next month, we’re going to be talking with some other exchange companies because one thing I want our participants to understand today, in most cases, it is not necessary to belong to one of the two major exchange companies.  We’ll talk about that at a later date.  But, there are other exchange companies out there.

Gail:                 That’s correct.  Next month, we have Trading Places, which is a third choice to exchanging.  The month after that, we have Timesharing today.  And then, in December, we have TUG with us.  So, we have quite a few wonderful guests lined up for the next three months.

Lisa:                 Fabulous.  Other fees.  I have heard of various other fees.  For those of you who are familiar with a lock out unit, there are some companies that will charge you every time you flip that unit, when you lock it off or when you put it back together.  Make sure you get all the fees.  If you own RCI points, there are points associated with absolutely everything you do with your points, including coming back to your home resort.  A lot of people don’t get this.  A lot of people are very upset about it.  But, RCI gets their money one way or the other.  So, there’s lots of fees.  Just make sure you understand what the fees are before you decide to go ahead and purchase.

Gail:                 And let me just interject this.  Not all timeshare properties require you to belong to an exchange company.  For instance, World Mark has their fees for exchanging wrapped up in the maintenance.  Fairfield, if you exchange within Fairfield, same thing.  They also have their RCI annual memberships wrapped up in their maintenance fees.  So, doing your homework or talking to a knowledgeable expert will help you decipher the ins and outs of what will work for you.

Lisa:                 Very true.  A lot of times, the people tell you, well, we pay for your membership fee.  Eight out of 10 times, that is wrapped up in your maintenance fees.  You’re paying for it one way or the other.  There’s no free lunch out there.

Gail:                 That’s true.

Lisa:                 Thank you for that clarification.  I think that is the last of our slides.  Aha, where to go from here, so some resources for everybody.  Please check out Holiday’s website.  I find it to be incredibly good, incredibly knowledgeable, very helpful.  And they have a vast array of resources available to you.

Gail:                 Thank you very much.

Lisa:                 Check out my own website, timeshareinsights.  This is the first of our timeshare boot camps.  We will be hearing more about this concept in the coming weeks and the coming months.  And I’m very, very happy to be working with Holiday.  You’ll be hearing a lot more about timeshare boot camps.  Some of them will be on the web and some of them will be live.  And I assure you, we will not be wearing fatigues.

Gail:                 Thank you so much, Lisa. Your insights and ability to be able to provide this for us is so much appreciated.  Thank you very much.

Lisa:                 Thanks, everybody, have a great evening.

Gail:                 All right, same to you.

Lisa:                 Bye-bye.

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