Timeshare Points Explained
Before you can fully understand the true value (or lack of) of a developer’s hotel rewards program you must be aware that reward programs are often confused with timeshare usage packages based on an annual point system. Hotel reward points and timeshare usage points are two completely different subjects.
There are two basic timeshare systems
- Timeshare usage based on a weekly increment or interval.
- Timeshare usage based on an annual points package. (Again, do not confuse this usage package with a developer’s Hotel REWARD POINTS program)
What is the difference between a timeshare development based on a point system and a developer’s Hotel REWARD POINTS program?
A developer’s reward system is a privilege offered by some brand name hotel companies such as Marriott, Hilton, Westin (Starwood), etc. They are designed to give you the option of trading your timeshare towards hotels, airlines and car rental credits. Generally speaking, the developer includes clauses in the program that allow them to alter or discontinue the program at any time, increase the number of points needed for redemption, etc.
Is there more value in using my timeshare as designed or trading it for hotel reward points?
This is a loaded question. There are many factors that will determine which usage is more beneficial for you. They are:
- The property you own.
- The season you own.
- The frequency in which you can trade your week for rewards points.
- The conversion rate.
- The black out dates and restrictions imposed by the developer.
- The price you paid for it.
- Whether you purchased a resale or paid the full retail price.
- Whether the developer allows you to pass on the rewards point program when you resell your timeshare on the resale market.
Let’s compare, as an example, the benefits of timeshare usage versus rewards points:
From a usage point of view:
For example, if you were to purchase a two bedroom unit at Marriott’s Maui Ocean Club in Hawaii at an average retail price of $45,000 and decide to trade it towards Marriott hotel reward points, you would get the equivalent of 5-7 nights at a Marriott hotel.
However, if you had decided to lock out your unit (separating the unit into two weeks of usage) in this same case, you could exercise 14 days of timeshare villa accommodation usage at over 2000 timeshare properties worldwide. Which one would makes more sense? Fourteen nights in a five star villa or 5-7 nights in a hotel room?
From a financial point of view:
a) Example where a developer DOESN’T pass on their hotel reward points program in a resale…
Paying retail for the same property as the one mentioned above and investing over $45,000 in a timeshare plus paying over $1000 in annual fees only to convert your usage into hotel reward points doesn’t make any financial $ense. Here’s why…………
Did you ever stop for a moment and think about why developers want you to convert your unit for hotel rewards points?.. What do you think they do with your week when you give it back to them? Of course! They rent it to the public at 5 star prices and keep all the profit for themselves. In return, they give you hotel reward certificates subject to blackout dates and restrictions for you to use at their convenience. Where is the bargain? Read on…..
If you were to acquire the same property, as a resale, for thousand of dollars less than what the developer would have charged you for it, how many hotel room nights could you buy on your own with the convenience of going where and when you want with no restrictions.
You have no guarantee that the developer will maintain the same hotel point redemption value. As a matter of fact, many hotel point programs have changed considerably over the years. How disappointed would you be if you exchanged your timeshare usage for several years only to find out that you are still short of points because the developer has changed the redemption value.
b)Example where a developer DOES pass on their hotel reward points program in a resale…
It is quite obvious. You buy the timeshare resale property for thousands of dollars less and still have all the benefits. Plain and simple. Just call one of our vacation experts for the best deal!