Amazing analysis of Trendwest vs other timeshares

I received this fantasic analysis from a reader of Trendwest Watch...

Fabbo,

Great site. Thanks for the information.

I've done a bit of research into a number of timeshare companies. My wife and I went to an ACCOR(APVC) presentation 18 months ago and signed up. But after I had a chance to read the PDS we exercised our cooling off rights and withdrew. The main reason was there was no cap in the maintenance or other levies. I note that that has now been changed in their new PDS. We were basically happy with the concept, thought it was a bit expensive but suited us reasonably well. (we've both retired and are flexible in our holidays). I appreciate that it's not an investment but an opportunity to purchase holidays into the future at a reasonably
fixed price.

I recently thought I'd have another look at what was on offer. I liked the Trendwest concept. It had plenty of places to go to and appeared to be fairly open in its presentation of information. Also there appear to be quite a few points for sale, which may or may not be a bad thing. Unlike most of the others where you had to apply on line and have the information sent. APVC hide their PDS at the bottom of their web site.

I've read the PDS for APVC, Interchange, Trendwest, Holiday Concepts and Moorings. The Trendwest is the most forthcoming of all I think. The PDS appears to give some assurances on the maintenance fee and levy increases which Accor Pacific Vacation Club has just included in theirs and none of the others have. One of them has management fees payable to the responsible entity increasing by 10% pa for the next 12 years!

I have some concerns about purchasing on the net as most require the approval of the responsible entity before transfer and it's not clear to me that the status of the points would be retained on transfer. It would appear that APVC and Trendwest may convert premier points to standard on transfer as the PDSs claim that premier/personal are only available at a presentation (ie at a significant profit to them).

I have prepared a spreadsheet outlining my summary of the various features of the clubs. Some of the figures are guesses, as the PDS does not contain sufficient information. The financial information in some is very scanty. One of the interesting things coming out from this is that each unit at the company sale price is covered by less than 25% assets, so you're buying a lot of air. For Trendwest even at the $1/point, which you can buy them at occasionally on the net, you've still only got 50% asset cover.

	Trendwest	Accor	Interchange Vacation Club	Holiday Concepts	Moorings
Points for 1 week high season	10,000	4,000	6,503	8,759	2 floating weeks
$/point	2.08	4.99	3.40	2.28?
Cost	$20,800	$19,990	$22,110		$9,950
Asset Covered by required points	$3,173	$3,833	$4,097	$221	$2,392
# Home Resorts	68 (incl overseas)	10	84	18	1
Smallest Unit of time	Day	Day	Mid week, Weekend	Mid week, Weekend	Week
Annual Reallocation of points by resort	No	?	Yes	Yes	2 weeks floating
Transfer Automatic	No - Requires approval	No - Requires approval	No - Requires approval	Yes	No - Requires approval
Property held in a trust?	Yes	No	No	No. Mostly leases over units	No
Initial Membership			$132
Annual Membership			$179
Annual Maintenance	$475	$525	2.75% of points value charged but depends on resort ($560)	5.8c/point plus $27 + others ~$500	$496
Maintenance Capped	5% or cpi	5% or cpi	No	No	No
Levy Capped	Yes	No	No	No	No
Comments	Properties held by independent trustee	Access to reduced charges for Accor hotels	Quorum for a meeting is 2 members!		Management fee increases by 10% pa until 2017. Managers cannot be removed by members without management consent!

If I have ~$20,000 invested which keeps up with inflation (in, say, a reasonable fully franked share) I could earn $1000/yr. Combine this with $500 maintenance, I have $1500/year, inflation linked, to spend on accommodation anywhere I choose. I figure this will give me holidays for as long as I like and I don't have to worry about how I'm going to get out when I'm finished. These figures obviously change if you purchase the units significantly cheaper than the company offered price, but even at half price I still have $1000/yr for accommodation and no worries or committments. I'm prepared to forgo the other enticements such as bonus weeks etc as these can usually be purchased on the net not much more expensively (ie I can get a week at Moorings for around $500, roughly the same as if I used my points) or using Breakfree / Lastminute / FlightCentre special offers.

In summary I'm not convinced that timeshare is such a great deal, particularly if you purchase at a presentation.

Regards
Glynn

If you'd like to discuss Glynn's analysis, leave a comment below.

Tags: trendwest worldmark

More online WorldMark South Pacific auctions

Okay, looks like some more action on eBay...

Good Value

Auction #6521892286 has 6000 units available with an opening bid of $6,200 and a "Buy it Now" price of $7,000. There are 9,500 points for immediate use. The seller is 'tjlavelle7'. This one should sell!

Auction #6521293114 has 6000 units relisted for $6,700 and a "Buy it Now" price of $7,500. That's pretty good -- certainly much better than the $8,750 originall requested in auction #6518393106.

Auction #6521129503 has 6000 units for $6,800. Interestingly, this was listed by tlcbusconsult who tried buying 6000 units recently for $6,200.

Auction #6521260748 has 8000 units relistsed for $9,250 -- the same price as before. Interestly, seller 1667david also unsuccessfully tried selling a week at Club Noosa Resort

which doesn't appear to be a WorldMark property.Not Good Value

Auction #6521532601 has 6000 units for $8,700. The seller, amanda8636, doesn't want to go much lower because that's how much is owed. It has 8,600 points available for immediate use.

Auction #6521336782 has 7000 units for $12,000. This is a re-list of auction #6517309668 which didn't sell. The seller, mike_simpson71, hasn't dropped the price. Looks like he's in it for the long-haul!

Hope you all had a happy Easter break!

-- Fabbo



Tags: trendwest worldmark

Iron-clad agreement

An article from www.newbusinessnews.com highlights some of Trendwest USA's collection tactics, including:

• Collection calls at all times of the day and night
• Users armed with caller ID are bombarded with relentless calls, re-calls and uninterrupted phone-ringing
• A barrage of threatening collection letters
• They will also contact your workplace, using the same tactics
• Trendwest contends that there is no legal loophole for an un-satisfied customer to escape through
• They will persist, even after being put on legal notice (because according to them, there is no legal alternative).

For more details, read the full article.

Tags: trendwest worldmark

A successful eBay sale -- and a keen market valuation

I previously wrote about eBay auction #6516820409 that was selling for $1/unit. I went back and found that it has sold for $6,301 -- that's $1.05/unit.

Most interesting was the bidding:

Bidder	AU$ Bid	Date
5283dave (0)	$6,000	13-Mar-05 08:06:21 AEDST
tlcbusconsult (26)	$6,201	16-Mar-05 15:50:59 AEDST
havalah2 (123)	$6,301	16-Mar-05 15:50:46 AEDST

Being an eBay fan, here's my analysis:

• 5283dave put in a bid for only $6000
• havalah2 used a Snipe utility (eg ESnipe) to place a maximum bid of $6,201 8 seconds before then end -- using a typical eBay strategy of adding $1 to win a tied bid. This would have pushed the winning bid to $6,100 or thereabouts
  
• tlcbusconsult sniped 5 seconds before the end, but only for a maximum of $6,201 which meant that havalah2's earlier and higher bid won for $6,301

An aside about sniping

It's worth mentioning that sniping is a great way to use eBay. In a sensible world, everybody has a maximum price they're willing to pay, and the person with the highest maximum price wins. However, human nature sends this theory out the window.

In a lot of eBay auctions, people place a bid (eg $10). They then get outbid, so place another bid (eg $20). They keep doing this until they either get top-bid, or run out of budget. Next, person B comes along and does the same. This results in a bidding war which is good for the seller, and the whole reason why auctions work well.

However, enter the Snipe concept. What if the original bidder bid $10 and was the top-bid, with nobody competing. They'd keep their bid there, with no need to increase. Then, a few seconds before the end of the auction, somebody else could come along and bid $15, thereby winning the top-bid and not allowing enough time for the first person to raise their bid. This is the fault of the first person, who should have told eBay their maximum desired bid rather than just bidding enough to win at the moment. If they did so, then they'll either win or the item will sell for more than their budget -- either which should make them happy.

The result is that the Sniper paid less for the win than in an open bidding war. Good for the buyer, not so good for the seller!

Back to the auction

Another interesting fact is that tlcbusconsult was willing to pay $6,201 for the 6000 credits. A bit of searching on eBay reveals that tlcbusconsult is currently trying to sell WorldMark 6000 credits for $7,400 on eBay in auction #6519327885.

Indeed, tlcbusconsult has previously sold 6000 credits for $8,200 on eBay in auction #6510672925. If this person is willing to purchase for $6,200 then it means that the current market for points lies between $6,200 and $7,400 for 6000 credits.

This should give an indication for people wishing to cash-out of their "investment".

Tags: trendwest worldmark

Opinion time: It's a loss-loss situation

I try not to state an opinion in my posts, preferring to let facts speak for themselves. Nor have I openly stated anything against Trendwest that isn't in the public domain. However, after receiving responses from some readers of Trendwest Watch, I'm starting to form a few "ideas".

Think up-front

I guess I was fortunate in that I have a personal rule to "never sign anything on the night". I did my math during the information session and figured out that 12,000 credits was worth about $2,500/year in accommodation -- but we only ever pay $60 per night when we go travelling anyway!

After the Trendwest information session, I did some searching on the Internet. As I found more bargains on the Internet offering Holiday Credits for $1.80/unit I was getting excited. Then I found they were really only worth about $1/unit and I became less interested. Now that I know I can probably rent credits off existing owners, I'm not very interested in buying at all.

With 23,000 unitholders in South Pacific, WorldMark is obviously good for many people. Reading the WMOwners website in the USA shows that there are many delighted owners. However, the responses I'm receiving suggest that there are some unhappy people and they're not having an easy time getting out of their Trendwest commitments.

If this website helps people avoid some financial mistakes, I'd be delighted.

What do to?

For those WorldMark South Pacific owners wishing to exit, there's one fact --> you've made a loss and there's no way to avoid it. Economists refer to this as a "sunk cost" -- it has been paid and there's no way to get the money back. Rather, it's a matter of how to minimise the loss and get something back.

For example, if somebody paid $12,000 for credits and pays $400/year in maintenance costs, they want to get value for their holiday dollar. You'd want to have accommodation worth $1000/year to make the investment worthwhile -- and many people are doing so.

If, however, the ownership is not worth $1000/year, or you would prefer to have the money than the holiday, it's time to exit.

Current value on eBay suggests only $1/unit, so you'd only get back $6000. Many people look at this and say "but I don't want to make a loss!". Instead, they sit there losing value on their investment each year not enjoying their holiday opportunities. In that case, there are 4 options:

1. Transfer & sell your annual credits to other WorldMark owners
2. Rent out your bookings
   
3. Sell your WorldMark units
4. Do nothing

I'm not 100% sure of your ability to transfer & sell your annual credits but I've read something like that on the USA websites. If this is possible, then it should be possible to have Trendwest transfer your current "points" to another Trendwest owner, for which you can have a financial arrangement on the side. You might be able to reach these people via the Trendwest website, or somewhere else on the web.

I've previously written about renting out your bookings, where you effectively sell your annual rights to somebody else. You won't make a fortune, but you will hopefully cover your annual costs. If you can transfer your points to a cruise, then it could be a very worthwhile sale to other people, especially with some of the deals that ICE offer each year.

Trying to sell your units is a matter of supply & demand -- you'll have to make a loss, but it's better than carrying-forward the loss.

Or, there's what most people choose -- do nothing. This is also a loss-making exercise, especially if your current "points" expire. That's money down the drain.

Get radical

If you're really annoyed, I'd suggest two further options:

1. Try to get relief via the ASIC agreement. If you purchased prior to 2003, you might have recourse to complain. Officially, they only had to respond to people within 90 days of initial notice, so that doesn't look too promising.

2. You could picket a Trendwest office. Now, this is radical and I'm not recommending you do it. However, handing out a few leaflets to attendees outside a Trendwest office before or after an information session will at least give you access to a market that understands what Trendwest has to offer. If you offer them a cheaper deal than buying direct from Trendwest, you might get a buyer. However, don't expect to do it more than once -- Trendwest earn their money on new sales and would not be happy with people hijacking their sales process. They're paying a lot of money to have people attend. Mind you, they might be in a frame of mind to assist if you stay legal in your approach. (A large sign on top of your own car, legally parked in front of their building?)

Of course, try talking with Trendwest first and make notes of your conversations. Written notes carry a lot of weight in case of future legal or press situations. It's always best to try civilised approaches first, and never go beyond the law or you'll doubly lose.

If anybody has tried such approaches, let me know!

-- Fabbo

Tags: trendwest worldmark

Unhappy, but at least not in debt

I received this message from a fan of Trendwest Watch:

Hi there Trendwest Watcher

Your’e a gem. I’ve come across to you by accident as I was typing in the trendwest thing on Google.

Boy do I loathe Trendwest and yes we’re owners, ie my husband and I. The day we're through with them I’m going to open up a bottle of champagne and drink to my freedom. We’re in our 50’s and I still can’t believe that we got caught. They do run a sleek operation and sometimes I feel that we must have been hypnotized that night when we went along to their sleek/smooth/sickly sign up . We bought 6,000 credits in the year of 2000 after we said that there was no way possible we would pay for the full amount. They were so swift and so smooth and the next thing we’re signed up for half of what they had to offer.

Luckily we were in a position to pay it outright and not on the credit card as I suspect a lot of people do, adding another 15% to their total. Anyone who thinks they’re getting a good deal with Trendwest need their head read in my opinion. So many restrictions at our every move and most of their resorts are out of the way. We have just spent time in New Zealand and wow big whoopee, they had just opened up a new resort in Rotarua. So we booked for only a couple of days as we were touring the North Island. We get there and the place is 20mins drive out of Rotarua town centre. Accommodation quite nice but the place felt like a deserted island. Nothing was happening and we couldn’t wait to get out of there through the day. We could have used our $10,000+ on many other Getaway special holidays and we would have been treated like royalty. Don’t even talk to me about the yearly levy of nearly $400 and increasing every year, because my jugular vein will be throbbing. You’re right – they do prey on the people who have travelled and love holidaying as we lived in a mining town for many years in the Northern Territory and holidaying yearly and sometimes twice yearly became compulsory.

Anyway I could go on and on about it but my aim is to warn as many people about Trendwest as I can. Keep up the good work.

Cheers Marion

Wow, that's a pretty firm opinion!

-- Fabbo

Tags: trendwest worldmark

October 2003: Trendwest ordered to pay $795,000 in civil penalites

While cruising Google, I found another instance where Trendwest was found guilty of less-than-honest practices.

The complaint alleged Trendwest engaged in deceptive marketing and sales practices, violated cancellation notice requirements and failed to accept cancellation requests. Trendwest, based in Redmond, Wash., also violated the law in its telemarketing practices by using automatic dialers and ignoring "do not call" requests, Lockyer's office said.

"This settlement will help make victims whole, and ensure Trendwest operates lawfully in the future," Lockyer said.

Under the settlement, Trendwest will pay restitution to consumers who purchased timeshare contracts since March 31, 2001, and who requested cancellation within 45 days of executing the contract. The company could pay more than $2 million, officials said.

Trendwest issued a short statement Wednesday, saying it had revised some of its internal policies and increased accountability among its employees and outside vendors.

"Our commitment in this settlement reflects our determination to maintain the highest standards in business and marketing practices," Trendwest said in the statement.

"Maintain" the highest standards?

Tags: trendwest worldmark

A good deal -- and a good deed!

I never intended to make Trendwest Watch a "for sale" site, but this e-mail from a reader just touched my heart:

I have been a trendwest owner for 5 years now, and I have used the facility once for a "wine tour".

For the past 2-3 years I have tried to get Trendwest to help me sell my share which is 7000 credits bought at $1.78 a credit, and I have 21,000 saved up to use before 1 September 2005.

I have been losing 7000 credits each year the past 2 years, as I have been unable to take time off "being in a very unpredictable industry" I have to take time off when ever the projects allow it. With only a few days notice Trendwest does not work for me at all.

I have therefore over the past 2-3 years tried to get Trendwest to help me with selling my shares. However they can not even give advice how to go about it, or fail totally to respond at all. However they ring me all the time wanting me to buy more credits at a cost now of $1.98-2.08 per credit.

I am very disheartened, all I want is to sell my credits for the same amount I bought them for and throw the 21,000 points in for free to someone who can really use this kind of timeshare. I was unfortunate in that it was a good idea for me at the time being a single mother with two children, but circumstances changed and my workplace changed, and it has since then rendered itself useless to me all together. And I just do not know how to go about selling it. There are plenty of rip-offs like Red west or something
like that that will tell you that they will sell your timeshare for less than 40%, and then they will tell you that they are not taking ownership, which is incorrect as there is a title deed involved in the sale of the
timeshare.

So I agree with your statement, This timeshare is only suited to some peoples circumstances, but surely there must be someone out there who is already a member and want more credits. Why go through Trendwest, when you can get a great deal from me?

-- Anne

If anybody wishes to contact Anne, just write to me and I'll put you in touch.

Advice for selling

It appears that eBay is the most honest and transparent place to try and buy/sell points. While other services such as those listed under my "links" section might have experience and offer escrow-like services, they'll also want a cut of the $ action.

Here's an idea -- why not offer to "rent" out some accommodation to people using the 21,000 points saved up? That will cover the annual fees for a year or two, while retaining the "value" of your ownership. You could also list this capability on WMOwners (yes, a USA site, but free to use) where there is a Renting category.

Come on, readers -- anyone care for a Trendwest holiday without having to be an Owner?

Tags: trendwest worldmark

A multiple sinner!

This week I received some feedback from a reader of Trendwest Watch:

Hi Fabbo,

I love your work. I have been to 3 sales presentations so far. Each time I have only gone for the gift, and have always been told it would be my last chance to join. But they just keep calling every 12-14 months and my wife won't/can't say no.

The other day I was actually serious about joining, but again got out of there without paying, just on a promise to return to complete my decision making process. Couldn't believe I was in there for 3.5 hours -just had to go to get the kids from school.

What do you know about the transfer process? What do you have to watch out for when buying from someone else?

Each time the process has fascinated me too, as cynic. The sales lady had a real problem, until somehow she (and her manager that she kept calling every time I asked a question) actually got me seriously interested.

Well, it's nice to receive feedback -- thank you!

It is not my intention to be cynical -- I try to keep my posts objective, with lots of evidence for my opinions.

I love the idea of returning to the information evening to ask the really hard questions -- things like the 3-year points accumlator or sales commission they'd earn if successful. Of course, you could always try to get them to comment on the resale market and watch them sweat!

I have not been involved in the transfer process, but do know that both parties have to sign Trendwest documentation to complete the process. You'll need to have a level of trust between both parties since the transfer can take a few weeks to process. I'd suggest creating a bank cheque to prove the money is there, then processing the forms. It's a lot of money, so a form of escrow might be advisable.

Mind you, I'm now starting to think that rather than buying Holiday Credits, it's better to just rent them from owners who haven't used their allocation for the year. Good for the owners as a way of cashing out some of their investment and good for renters since they have no future liability. Just approach somebody trying to sell their credits via eBay and offer to rent some accommodation -- they'll probably accept!

Thanks for writing, and remember to tell all your friends about Trendwest Watch or, better yet, link to it to make it as popular as Boing Boing! :)

-- Fabbo

Tags: trendwest worldmark

Whoa! This person's got it wrong -- $2.10/unit!

Trying to out-Trendwest Trendwest?

This eBay Auction is trying to sell for $2.10/unit -- that's even more than Trendwest themselves!

6000 time share credits at AU$2.10/credit. Trendwest to assist in transfer of ownership

eBay auction # 6519600128
Seller: chayjune

Making it even worse, the listing is for $2.10, rather than $12,600 -- a bit of a mix-up there!

Tags: trendwest worldmark

10,000 WorldMark South Pacific credits for $1.40/unit

The seller doesn't muck around on this auction:

Trendwest - Worldmark 10,000 Premier Holiday Credits available and 10,000 more credits available to borrow plus 1500 one time bonus credits also available. Trendwest is selling 10,000 credits for $20,800.00 We ar selling our ownership of 10,000 credits for $14,000 or auctioned amount, a saving of $6800.00 to the buyer. We will pay all transfer fees.

eBay auction # 6520393617
Seller: 3potcell

That's $1.40/unit, with transfer fees thrown in for free. Mmm, not as good as the recent $1/unit sales, but still in a good ball-park!

Tags: trendwest worldmark

Trendwest taken to task by ASIC in 2002

In perusing the web, I found an interesting relesae on the ASIC website dated 21-Nov-2002.

It appears that the Australian Securities and Investments Commission asked Tendwest to change some of its sales practices.

ASIC began proceedings in the Federal Court, alleging that Trendwest was engaged in misleading and deceptive conduct, and unconscionable conduct, in relation to its sales practices.
...
On 28 October 2002, ASIC filed an application in the Federal Court seeking interim and final orders against Trendwest. Following discussions with ASIC, Trendwest has provided a number of undertakings to the Court.

In relation to the managed investment timeshare scheme, WorldMark South Pacific Club, Trendwest has undertaken to provide a prospectus to each individual or couple attending the sales presentation at the time of registration, and to not make the following representations to consumers:

• the purchase of Holiday Credits is a good financial investment;
• over time, the resale price of Holiday Credits in a secondary market will remain stable or increase relative to their acquisition price;
• a strong market exists for the secondary sale of Holiday Credits; and
• consumers may sell Holiday Credits through Century 21 Real Estate in Australia.

Tags: trendwest worldmark

WMOwners - WorldMark Owners Community (USA)

The WMOwners website is for owners of USA WorldMark credits. Nonetheless, it is an interesting read for WorldMark South Pacific unitholders or other intered parties.

Most fun to read is their online forum where owners can post questions and share information with other WorldMark owners.

There is even a specific section for renting credits. This is where 'Owners' do not want to use their holiday credits and are willing to make bookings for other people to use. Ironically, you could of course just rent points off existing owners and never buy WorldMark units yourself. If the Owners are desperate enough, this can result in fire-sale prices that make holidays even more affordable!

Tags: trendwest worldmark

Renting out instead of staying in

Even though the benefit of Holiday Credits sounds great and we all love having holidays, the situation sometimes arises when unitholders just can't use their credits before they expire.

In looking at online sales of Holiday Credits, it's not unusual to see somebody selling their Credits with 2-3 years worth of available points, suggesting that they haven't used their credits for 1-2 years. No wonder they are selling!

Remember -- you can save up your credits to use next year. The disclosure information says:

You can save some or all of your Holiday Credits for one year to extend your holiday time the following year (all unused Holiday Credits will automatically carry over for use in the following year, and expire at the end of that year, unless you have an accepted reservation... before then.

But here's the sweet spot... you can make bookings up to 13 months ahead!

Example:

• Let's say that you receive credits each year on 1-Jan
• On 1-Jan-05, you receive 6000 credits
• They remain active until 31-Dec-06 (awarded in 2005, carry-over into 2006)
• On, say, 15-Dec-06 you could make a booking for 10-Jan-08 (yes, 2008!)
• So, you've used your 2005 credits in 2008 -- 3 years later!
• And if you're careful with the timing, you could use your 2005, 2006, 2007 and 2008 (borrowing forward) points for the same period. (Note: You could only use your 2008 credits in 2007, so you'd actually need 2 separate bookings to make this happen.)
• Result: 4-years credits on the one holiday!

But, let's say that even with all this flexibility, you find that your points are expiring. What can you do?

Rentals

As an owner, you can give or rent your reservations to another person. Just tell WorldMark the name of the guest! Note that you you have to use the points to make the reservation -- you're not selling the points -- rather, you're renting out the apartment during the time of your booking.

There are a couple of hard-to-police rules, such as:

• If you book under Bonus Time (where you pay for accommodation instead of using Credits) you can't charge more than you paid -- this is obviously to avoid people "making money" on the system
• You can't charge an illegal fee (which was probably stipulated for the lawyers)

As the person making the booking, the 'Owner' is responsible for the booking, so it's best if you only give it to friends & family. If your guests wreck the joint, you'll be the one who pays!

I have not seen any online listing of rentals for WorldMark South Pacific. There are occasional listings for WorldMark in the USA. I've seen one as low as US$70 for a week's accommodation. The listing basically said the winner can choose their own destination.

So, while you're effectively paying over $1000 for your week of holidays, the market value could get as low as $100 if your credits are about to expire -- be careful!

-- Fabbo.

Transferring Trendwest Credits

I cam across this eBay auction, which is another offer for sale of credits.

We purchased the 6,000 holiday credits for $11,400 (that equals $1.90 per credit) in early 2002, and I am prepared to sell these for a starting price of $8,700. Just think $8,700 to pay for a lifetime of holidays – it pays for itself in a few short years.

This offer also comes with current annual membership to Interval International which offers additional reduced holiday options around the world. You can choose not to renew this membership if you wish.

The transfer process involves signing contracts by both the seller and purchases in the presence of a “Justice of the Peace”, and the process takes around 2 weeks to complete and costs $200.00 which I will cover myself.

The transfer process as described in the Disclosure Statement has several conditions:

• A fee of $200, which may change in future
• The credits must be "fully paid" before transfer
• The recipient must agree to all conditions as per the original holder
• Trendwest has the right to refuse transfers
  

It then goes on to state:

There is a limited market for the resale f issued Holiday Credits. Owners should generally not expect to recover the amount they originally paid for their Holiday Credits nor should they expect that over time the resale price will remain stable or increase relative to the price they originally paid.

This can be seen by the fact that the eBay auction mentioned above has credits originally purchased for $1.90 in 2002 and they are willing to sell for $1.45 in 2005 -- and don't forget that new units are now $2.08/unit when purchased from Trendwest.

They owners are willing to sell for $2,700 less than their purchase price, representing a cost of $900/year since purchase, plus maintenance of $386/year -- that means they've paid around $1,300/year for their holiday credits. This is about normal, since a week of holiday would cost that much normally (around $200/night).

Using a cost base of $11,400 in 2002 and a loss in "value" of $900/year suggests a membership value of $11,400 divided by $900 = 12 years.

So, while the Trendwest offer may state that it is for a renewable 80-year period, the true value of your investment is only 12 years. After that, don't expect to be able to extract much further resale value from the investment.

Is it worth it? That's what you need to decide before purchasing into the unit trust.

WorldMark South Pacific credits available for $1.80/unit

I received this message from LukeandKerry@aol.com:

I own 7000 premier credits and am willing to sell them. I love trendwest and have used it for the last 4 years. I have 14000 credits at present. My father has recently become ill and therefore I am in some financial difficulty. However, I will not be giving them away. I don't know what shares are worth now but when I bought in they were $1.80 per credit. I would sell them for that price.

If you're interested, drop them an e-mail!

Accor Premiere Vacation Club -- It's like Trendwest

Here is Accor's equivalent club to Trendwest. The points system is different -- you can get cheaper points when you own more units.

They have fewer properties, and the ones listed in the Product Disclosure statement are different to the ones on their website.

Interesting to compare!

Tags: trendwest worldmark

Under $1/unit!

This auction on eBay has 7000 credits listed for $6000, with 10,400 points in reserve.

That's 85c/unit, which is the cheapest I've seen anywhere!

Tags: trendwest worldmark

8000 credits for $9,250

This one on eBay looks like pretty good value -- $1.15/unit.

Tags: trendwest worldmark

Jones Lang LaSalle research on Timeshare

The hotel investment services group Jones Lang LaSalle has published some research on Timeshare in Australia.

The document gives a history of timeshare, lists the major players in Australia (including Trendwest) and includes an account of attending a timeshare information evening, which was similar to the one that I've described on this website.

Most interesting, however, were their listings of advantages and disadvantages of timeshare.

Advantages:

• Significantly less initial capital outlay than complete ownership
• Purchase only the number of holiday weeks / points you wish to use
• Purchase at today’s prices – save money on future holidays
• Increasing network of global exchanges and increasing flexibility
• Ability to rent the unit to others
• Access to quality apartment style accommodation

Disadvantages:

• Never own the property. Only own the right to use the property in the future
• Locations limited to timeshare participating resorts
• Limited pool of investors for resales
• Use of the unit is limited in days available
• Negative perception of timeshare in Australia

I also liked the final paragraph of the description of the information evening:

I would seriously consider it once I had done the calculations myself and had paid off a few of my current debts.

With that, I totally agree.

Tags: trendwest worldmark

Trendwest's use of database marketing techniques

I found this promotional piece from Australia Post which gives some insight into how Trendwest find prospective customers.

Here's the interesting bits:

• The prospects needed to be tightly targeted in order to ensure that those who were sent the offer were actually interested in holiday ownership and had the funds to enable serious consideration of the time-share concept
• Geospend Direct selected relevant consumer records from the Selecta Lifestyle Database, a direct marketing database of over 2 million records built from voluntary responses to the Australian Lifestyle Survey. The data selected was based on responses to questions in the survey such as planned holidays and preferred holiday destinations. Households were selected based onpostcodes in the proximity of Trendwest’s offices.
• When response rates were compared, the Selecta data achieved results that were 15 to 40 per cent higher than those from other lists.
• In terms of returned mail, the Selecta list outperformed other lists by 30 to 100 per cent.
• The overall result provided high levels of acquisition (with little returned mail) and an ongoing pool of quality prospects who continue to be quality customers for Trendwest’s business.

The good news is that they target people predisposed to desiring holidays. This not only results in better results for Trendwest, but means that they are less likely to annoy people since they are pseudo-self-selected for the product.

Tags: trendwest worldmark

Trendwest finance option -- somebody trying to exit

Here's a listing from Bidshares for an unfortunate person trying to sell WorldMark South Pacific units:

I am currently paying the following in fees:

AU$375.00 annual maintenance fees. (This years maintenace fees are already paid up)

AU$197.00 monthly payment for the 6000 credits I have purchased.

The 6000 credits I have purchased are locked in at a price of AU$2.05 which means for the entire credit points I will be paying AU$12,300.00.

Since I have taken a finance option to pay these over 7 years it will mean that if you bid and win these you would have to take over the AU$197.00 monthly payments + the 10% advance that I have already paid (AU$1321.00).

The finance scheme is at a fixed interest rate so even after a few years you will still be paying the same monthly installment. I am happy to negotiate a price as well.

I also have a 1 year (paid up) membership with ICE cruises and Interval exchange which I will throw in for FREE!

I also have a Cruise for 2 (Only 1 pays the 2nd person is free) which I can offer for FREE! Both these free offers are subject to Trendwest agreeing to transferring them to your name.

I do not want to make anything out of this but simply put I need to cover what I have paid or will end up paying for this.

Do the math -- $197/month x 7 years + 10% advance ($1321) = $17,869

PLUS the yearly maintenance of $375.

That means he's paying about $3,000/year over the first 7 years, for a measly 6000 credits/year. If you calculate what 6000 credits is worth, it's only about $1500/year in accommodation, which means it will take a long time until this person is financially ahead for their holiday. And I bet they never spent $3000/year holidaying previously!

The fact that he's offering free ICE and Interval suggests that he just bought his units within the last year, so it hasn't taken long for him to realise what trouble he got into.

I like his words at the end -- "I need to cover what I have paid or will end up paying for this". Oh yeah -- you'll be paying for it!

Tags: trendwest worldmark

Trendwest is the same the world over

Here's a story in a blog that I read online.

A small excerpt:

The sales guy, Mr. Then Forget It!, introduced himself and chatted us up about what to expect. Toward the end, Chadi told him that no matter what, he would not buy today because he needs to consider large purchases before making a decision. The salesman's response was Alarm Bell Number Two: "well, you can do that, but it will be much more expensive and you won't get all the features." Okay, so it's going to be like that. It's going to be a limited time offer - a sure sign that something is amiss.

It looks like Trendwest operates similarly the world over!

Tags: trendwest worldmark

US site with South Pacific units for around $1/unit

Found this listing on Timeshare Resales Worldwide.

They're selling 6000 WorldMark South Pacific credits for US$4800 -- close to A$1/unit.

Tags: trendwest worldmark

Trendwest relationship with Rotary

Have you noticed the Rotary logo on various Trendwest publications?

It appears that Rotary gets a kick-back whenver a Rotarian purchases into WorldMark.

More details at:

http://www.r-acap.org/Trendwest.html

Tags: trendwest worldmark

Trendwest-related keywords on Google

Just in case you're interested, these are the keywords that Google AdSense has "sold":

• trendwest resorts
• trendwest australia
• trendwest travel
• trendwest resorts south pacific
• trendwest resort
• trendwest south pacific
• worldmark trendwest
• trendwest resorts

Tags: trendwest worldmark

Example of WorldMark "rentals"

Okay, this is a listing for The WorldMark Club, which is the USA equivalent to WorldMark South Pacific. While I normally stick to WMSP sales, this is interesting because it is the "renting" of credits.

Under the WorldMark timeshare system, owners of units in WMSP receive yearly "credits" which they can use for holidays. The number of credits used depends upon the property, season, day of week and length of stay. Credits are meant to be used by the unitholders, but unitholders can make bookings on behalf of other people. The arrangement between the unitholder and "guest" is then the unitholder's responsibility. However, Trendwest recognise such a relationship and allow the guest's name to be put on a booking.

So, what happens if a unitholder wants to "sell" their yearly entitlement? Well, this isn't exactly selling, since they retain ownership of the units in WMSP. Instad, they "rent" their credits to somebody else for use at a property. It's like owning an apartment and then renting it out for a week.

I found this listing on eBay for somebody in the USA renting out their credits:

Do you need more credits for your next Worldmark vacation? If so, this auction is for you! These credits are similar the "fax" credits that you can purchase from Trendwest for $.08 each, but they do not carry the "once every five year" restrictions.

I HAVE EXTRA CREDITS THAT I AM PUTTING UP FOR AUCTION!

You are bidding for a block of 1000 Worldmark credits for one time use. You may use the credits for any Worldmark property, or for an exchange with RCI, I.I., etc.

You must be a current Worldmark account owner to purchase these 1000 accrued Worldmark credits for one-time use. These are perfect if you are planning an extended vacation or family reunion. I have lots of credits available, so let me know if you need more.

On completion of auction I will need you name; address; phone number; and membership number. You do NOT need to have a pending reservation to transfer the credits, but you do need to book a reservation before the credits expire. (I have blocks with various expiration dates.) We will discuss the method of payment after the auction.

eBay item: 5565033115
eBay seller: tdw67 (35 rating)

This auction has also been listed with "Submit Best Offer" which I had never seen on eBay before. This is a feature where bidders can submit an alternative offer which, if accepted, is binding. I'm always impressed with eBay's ability to innovate!

The seller has 5000 credits and is selling them for 7c each but says that you must be a current WorldMark participant. I think I saw in the WMSP disclosure information that you can transfer credits between unitholders.

However, I have seen listings where there weren't restrictions on buyers -- that is, anybody could purchase.

Tags: trendwest worldmark

$1.45/unit on eBay

This auction on eBay is a relist of a previous auction that didn't sell.

• Original eBay item: 6514345184, starting bid $9,999
• Reslisted eBay item: 6518393106, starting bid $8,750.50
• 6000 credits
• eBay seller: hally0_1 (very high rating)

That's $1.45/unit. Good luck hally!

Tags: trendwest worldmark

6000 credits for $1/unit on eBay -- this one is going to sell!

Wow!

This is the first bid I've seen on eBay WorldMark South Pacific units. Yes -- somebody has actually bid on it!

With only 2 days to go, this auction has a bid for $6,000:

Worldmark Trendwest shares 6,000 credits . Starting price for sale $6,000 this is excellent value as the current selling value is approx $2.05 a share. We have points banked. We are very happy Trendwest share owners and only selling part of our shares . Believe me it is definately more than one week a year. Please email me for more information. Anyone with a family we definately get good value from this. THESE POINTS ARE UNENCUMBERED

eBay item: 6516820409
eBay seller: glencamdan

The seller has a good eBay rating (93), which means he appreciates the need to offer a good price for goods. And at only $1/unit, this is the best deal I've seen online!

Tags: trendwest worldmark

8000 credits on eBay for half price!

This auction is pretty good value:

Worldmark trendwest south pacific - current selling value is approx $2.05 a share - 8000 points for sale - make me an offer - norvalwf@hotmail.com

eBay item: 6517311109
eBay seller: ripoff1969 (is that a sign?)
Starting bid: $8,500

This is pretty good value -- 8000 units for $8,500. That's about $1.09/unit with costs included.

Tags: trendwest worldmark

600 credits on eBay for full price, plus 21,000 saved credits

Found another auction on eBay for 6000 credits. Sorry if the link to eBay has expired, but here's the relevant details:

• 6000 unit membership "worth $12,500" with NO RESERVE!
• Fully paid
• Seller will pay $200 transfer fee
• 21,000 credits available NOW
• 7000 credits available in June (anniversary of membership)
• eBay item: 517309668
• eBay seller: mike_simpson71 (zero rating)
  

I don't know how old the membership is, but to have 21,000 credits needs at least 4 years-worth of savings with only 7000 credits used.

Hold on -- why is it a 6000-credit membership with 7000 points coming in June? I suspect it is really a 7000-credit membership which means that there are 3x7000 = 21,000 points saved -- that means they've never used it!

How much does the seller want? Starting bid = $12,000! For something you can buy directly from Trendwest for only $12,300 (with a free stereo system!). But hey, there's no reserve!

Nup, that one won't sell.

Tags: trendwest worldmark

$1.47/unit on eBay

Found on eBay:

These credits are paid off at $190 per month and have a total amount owing of approximately $9032 plus $3340 interest. Even after the credits are fully paid off you continue to receive credits every year. There are annual housekeeping fees of $386 per year. There is also a processing fee of $150 for transfer of ownership. The total amount already paid on these credits is approximately $5200. We used some credits last year for a wonderful holiday in the USA, Our trendwest experience was unforgettable. Unfortunately finances and study commitments no longer allow us to utilise these credits to there full potential.

eBay item: 6517302334
eBay seller: shagga00 (zero rating)
Starting bid: $1,250

Let's see...

$9032 + $3340 = $12,372 -- pretty good considering interest costs

$5200 paid off already, so I assume the purchaser will only assume costs of $12,372 less $5,200 - that makes it $7,172 to pay off to Trendwest, plus at least $1,250 for the auction. Total: $8,422

If these assumptions are correct, it will be about $1.47/unit. Not the best, but not as silly as some auctions I've seen online.

Tags: trendwest worldmark

6000 credits for $8,700 with 8,600 thrown-in!

This auction on eBay shows someone trying to scrape their money back:

Due to personal circumstances these shares need to be sold. Worldmark Trendwest shares 6,000 credits accumulated each year at no further cost for credits. Approx 8,600 not used. Terrific opportunity for overseas travel. Unfortunately the starting price cannot be much lower than $8,700 as the credits are not owned outright. Information sessions for how to use shares frequently occur. Nevertheless please don't miss this great opportunity to take your family on holidays without worrying about accommodation costs. We will be paying the transfer costs.

eBay item: 6516343325
eBay seller: amanda8636 (0 rating)
Starting bid: $8,700

I like the phrase "cannot be much lower". They obviously owe $8,700 to Trendwest and don't want to sell their units for less than they owe.

However, this is flawed logic! I shall explain...

• They committed to paying Trendwest long-term
• They now wish to exit this arrangement because they feel the benefit does not outweight the cost, or they are unable to make the remaining financial commitments
• They are only willing to sell their units for the amount remaining
• In other words, they don't want to come out with a loss

However, what is their alternative? They can keep the units ("cost") and take holidays ("benefit"). But obviously they don't want to do this, or they wouldn't offer to sell. If they can't sell the units for the remaining value, they're in trouble!

An alternative is that they should sell for a loss. Let's say they only get $6000 ($1/unit). This means that they have lost $2,700. But this is better than "losing" $8,700 with only holidays to show for it! Especially if they can't afford those repayments!

I don't care how good the holidays are -- if you can't afford them, they won't be enjoyable!

There are other alternatives -- they could "rent" their yearly credits out to other people. This is similar to selling their annual share, but Trendwest and other timeshare operators refer to it as "renting" because it's just like letting out an apartment. There are various listing on the Internet where people are trying to rent these points. Actually, this is a great way to holiday at a WorldMark location without having to become a unitholder!

As is, at $1.45/unit it's better than buying directly from Trendwest, but still not the best bargain around.

Tags: trendwest worldmark

6000 credits on eBay with no discount!

You have to feel sorry for some people when they over-commit themselves.

I found a listing on eBay for someone selling 6000 credits (actually 6000 units in the trust). Sorry if the link to eBay has expired, but here are the relevant details:

We currently own 6,000 Holiday credits, have paid $3,500 and $7,300 remaining. Monthly Payment of $190.74 which converts to $2.00 per Credit point.We intend that the interested person(s) will pay us what we have already paid and continue paying the remainder as monthly instalments to Trendwest.

eBay item number: 6516403705
eBay seller: shalendrap

So, they're looking to sell out of WorldMark for $10,800 -- pretty much what they paid for the units. Now, why would somebody want to pay them back everything they have already paid, and then assume responsibility for the future amount owing? They may as well sign-up directly with Trendwest!

Okay, so it's only $2/credit point, but that's not much less than the current $2.05/unit -- and WAY ABOVE the market value on the Internet at the moment.

Sorry, I don't think they'll find a buyer!

Tags: trendwest worldmark

Parliamentary inquiry into regulation of the timeshare industry

The Australian government has launched an inquiry into regulation of the timeshare industry.

Submissions are:

Sub No.
1	Mr Peter Holt (PDF 17KB)
2	Department of Tourism, Fair Trading & Wine Development (PDF 466KB)
3	Law Institute of Victoria (PDF 213KB)
4	Port Pacific Resort (PDF 55KB)
5	Consumer Credit Legal Service Inc (PDF 274KB)
7	The Commercial Law Association of Australia (PDF 164KB)
8	Trendwest Resorts South Pacific Limited (PDF 106KB)
9	Australian Securities Investment Commission (PDF 261KB)
10*	Australian Timeshare & Holiday Ownership Council Ltd (ATHOC) (PDF 219KB)
10A	Accor Première Vacation Club (PDF 107KB
11	American Resort Development Association (ARDA) (PDF 30KB)
12	RCI Pacific Pty Limited (PDF 163KB)
13	Becton Group Holdings Pty Ltd (PDF 162KB)
14	Kyneton Bushland Resort Ltd (PDF 39KB)

In reading Trendwest's submission, there are some interesting details about the legal process they need to follow for training their salespeople. I do feel sorry for the burden this places on Trendwest, but some level of regulation is certainly needed to avoid situations such as the sorry story of the first submission.

Tags: trendwest worldmark