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.
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
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
posted by Fabbo at Thursday, March 31, 2005
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2 Comments:
I bought my trendwest points resale and I hope to resell them at similiar value so I do not include the cost in figuring my expenses overall. Also did not take the loan.
If I can't sell them off down the street for similair then I will not be happy. However since buying them I have seen the value increase slightly on the resale market so I may actually return more.
In figuring out if it is worth it I really only consider maintenance and exchange costs against normal rental values.
For it to be worth it you need to be a research junkie ( i think you may actually fit the right type of person :) ). I have spent hours and hours trying to figure it all out.
After all this research of my own I would say Trendwest has the potential to be a great product for some people. For other people membership should be discouraged.
To maximise use and get lots of bonus time, bonus weeks, flexchanges etc etc required an almost obsessive addiction in securing prime real estate for your next holiday.
I love it, as I am on holiday when I am plannning a holiday so for me it is a hobby,
If you wish to just book a week now and then without checking availability, doing trades, being flexible with dates,suffer headache trying to match airfare sales with inventory specials etc then you are paying too much even at resale price.
So bottom line you can join some free exchange places and grab a bonus week for next to nothing, bonus nights with Trendwest for $60 night, pay exchange costs and hope for a flexchange with Interval and you will have a bargain. But it is hard work unless like me you enjoy it!
About resale, It is very simple to buy and will be premier but just call trendwest before hand to check the seller out.
By
Anonymous, at Tuesday, 26 April, 2005
As a current timeshare owner and a former "Holiday Ownership Consultant" let me fill you in on a few "secrets".
More than 50% of the cost of buying from the developer is taken up in sales costs including sales commissions from 5% to 35% depending on the company and how good that salesman is. Points based systems have become the trend these days as it allows more flexibility for both the owner and the developer. The biggest win here is for the existing timeshare "title deed based" owner who has a week at a resort the developer wants to have in his portfolio. Next on the winning list are said owners immediate family as you'll be having a few free holidays on all the bonus points to be used in the first year that are given away.
If you're unlucky enough not to be a current owner and you feel that under the current legislation you are protected then guess again.
After an initial lull the sales people have worked out that if what they are selling is covered by the Managed Investments Act then hey timeshare must be an investment (lifestyle yes, financial maybe).
Now the real secret to working out if you're getting a good deal (assuming that one is possible) is to look at the FREE EXTRAS that come with membership. Now if the consultant plugs this more than the actual ownership run do not walk from the premises, DO NOT pick up a pen and don't sign anything.
The next secret is exchanges - There is a timeshare resort in the middle of New York City called the Manhattan Club. After 10 years of trying to exchange into this resort using some pretty high vale exchanges I gave up, yet there is one place that will proudly show you a confirmation letter where one of their members was able to exchange into The Manhattan Club. It's just a pity they don't tell you the actual story, but if you happen to be shown this letter ask the consultant to explain the difference between exchanges done by member services and resort services.
Oh and the real advantage of points for the developer comes with dealing with non levy paying owners. Under a share and title scheme (old timeshare) you could remove the right to use the club facilities by taking back the share but the owner still holds title to the property. Under points and other right to use schemes they just remove your right to use for non payment of levies (Disney are the world champions at this resuming ownership if the levies are overdue by more than 30days)
By
Anonymous, at Friday, 09 September, 2005
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