Timeshare Points

Now, for a moment, try to imagine these timeshare points as a kind of currency. After all, that’s how they’re being touted. So now, many or most developers have gone to the points system. There even exists points ‘exchanges’ or ‘networks’, concepts implying a free market trading environment where timeshare points are bought and sold at arm’s length like other investment securities with intrinsic value. But this notion is fundamentally flawed, for reasons discussed hereafter.

Initially, RCI, Interval, and other timeshare points exchange networks,   unlike an actual exchange network in investment securities, do not trade interchangeable ‘points’ given through other developers.  Thus, there exists no financial mechanism to convert the value of a Wyndham point to that of an Interval, Diamond, or Silverleaf ‘point’.

There are several reasons for this, but two of the most important for the purposes of a would-be buyer are: 1. The value of a point with a given developer is almost completely arbitrary, and thus cannot be commoditized, and 2. They lack positive innate value, i.e., they involve a liability component (financing costs and annual dues) that approximates or exceeds the value of whatever benefit that they confer.

This is apparent from the fine print of RCI’s disclosure statement, revealing the following:

Network privileges may be suspended, terminated or denied, or a Confirmed Exchanged cancelled at the Network Administrator’s sole discretion if a Member’s Vacation Ownership Expenses or other charges have not been paid when due.

Thus, unlike other investment securities, which are generally bought and paid for, you must continue to pay for your points. If you don’t, you’ll simply lose them.

There are a number of unofficial ‘exchanges’, run by third parties, which purport to broker RCI and other points like stocks and bonds. These carry no sanctioning by RCI or any other entity of any kind, and are generally rife with fraud.

Another piece of information from the RCI disclosure statement:

Because vacation exchange is used intermittently as an adjunct to Vacation Ownership, potential Vacation Owners should select a Resort that best meets their ongoing vacation needs. A Member’s decision to purchase Vacation Ownership should be based primarily upon the benefits to be gained from the ownership, use and enjoyment of the Vacation Ownership and not upon the anticipated benefits of the RCI Points Exchange Program. RCI is not responsible for the financial viability or the quality of accommodations, facilities, amenities, management and services at any Resort, Inventory provider or Points Partner.

In other words, the points don’t represent an ‘investment’, properly speaking. Nor are the points necessarily going to get one anywhere else in the ‘network’, so he or she should really like the ‘host’ resort. But even with respect to the ‘host’ resort: