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Exchanging
One of the major benefits of timeshare ownership is the ability to exchange your timeshare to go to other resorts all around the world. There are timeshare resorts in about 100 destinations, in all the major tourist areas, and even in places you might not expect such as Communist China! Timeshare sales persons will imply that you can own just about any timeshare and trade it for any destination anywhere in the world. And therein lies the problem. The problem is not with the timeshare, it’s with how the information is presented and explained to you (or not explained is more like it). In this article, we’ll explain the exchange process in detail and give you a good understanding of how you can make it work for you, just like it works for 3.5 million timeshare owners every year.
The process is simple, and the simple version is about all the explanation you’ll get before you buy your first timeshare. You own a timeshare at your “home resort”. When you want to exchange and go to another resort, you simply call your exchange company, give them your week, and they give you what you want in return. They charge a small fee for this service. Simple, right? Well, yes, but read on……
| First, let me introduce the exchange companies. The largest is called Resort Condominiums International (RCI), and RCI has over 3,700 affiliated resorts worldwide. The second-largest is Interval International (II), with over 2,000 affiliated resorts worldwide. Both RCI and II have resorts in all the major destinations, and they both have big-name developers in their programs, such as Marriott, Hilton, Hyatt, Westin, Sheraton, etc. Because RCI has more resorts, you’ll find them in places where there aren’t many resorts, such as a small island or China, where II hasn’t had a chance to penetrate yet. |  |
RCI’s fees are slightly higher than II’s fees, and there are some minor differences in how they conduct their business, but other than that they’re pretty much comparable.
Then there are a bunch of smaller companies you can use for specialized exchanges. A list appears at the end of this article.
The exchange process is a “Fair-Trade” concept. You can trade your timeshare for something of equivalent “Trading Power” or lower, but not upward. You can trade for the same “season” you own or lesser seasons, but not upward. And you may request the same unit size that you own or smaller, but not bigger. So it’s extremely important to understand the nuances of exchanging before you buy your first timeshare, not to learn the hard way after you buy.
The exchange companies want to be able to take your timeshare, trade it to someone else, and EARN THEIR FEE. So they want timeshares that are in high-demand from people all over the world because they know they will be able to find someone to take it and PAY THEIR FEE. The exchange companies rank all timeshares for something called “Trading Power” or “Trading Value”. This is the measure they use to determine how good a trade you can get for your timeshare. The tricky part is they never tell you what your trading power value is. They’ll never tell you, “Your timeshare is worth 89 trading power points.” There are a couple of reasons for that. One is they want it to be somewhat mysterious. The other is that you can seriously affect your trading power by how you plan your own trades.
There are six factors that add up to determine trading power. In order of importance, they are:
| 1. | Demand for your resort at the time you own. |
| 2. | Demand for your resort’s location at the time you own. |
| 3. | Resort Quality measured by questionnaires from people who have gone to your resort on a trade. Any decent resort will be fine on this item; it’s a pretty “Vanilla” questionnaire”. |
| 4. | Unit size. Bigger is better because it can be used by more people, hence higher demand. |
| 5. | Season. If you plan to exchange, you only want a prime season “Red” week. |
Once you buy your timeshare, these first 5 factors are set and don’t change much. So it’s important to consider them before you buy your timeshare to maximize your trading power. The last factor is entirely in your control, and it can seriously affect your trading power. It is:
6. How early do you deposit your week in the bank, or how much time do you give the exchange company to find someone else who wants it and will PAY THE FEE.
If you give the exchange company several months to work with your timeshare, you maximize their chances of EARNING THEIR FEE, and they will grant you the full measure of trading power based upon the first 5 factors. On the other hand, if you wait until 2 weeks before your timeshare week comes up to deposit it in the bank, you haven’t given them any time to EARN THEIR FEE, and they will severely penalize your trading power for that year.
So, how do you evaluate the demand for a timeshare? The simple answer is to use what you already know and apply common sense. You know what the highest-demand seasons are for various destinations, and it can change depending upon the destination. You know that for a beach on the east coast of the U.S., prime season is summer, off-season is winter, and in-between seasons are spring and fall. For a ski resort, prime season will be winter, and a second prime season will be summer in the mountains. For tropical destinations, all seasons are prime seasons, but some are more prime than others. In the islands, winter is when all the northern snowbirds want to go south to get warm. In summer, we have plenty of heat and humidity of our own, and we don’t need to go to an island to get it. Then in the upper Caribbean and Florida, there’s hurricane season, and there’s not a lot of demand to be caught in the eye of a hurricane. Orlando is a special case because it is a family destination. Orlando is the #1 destination worldwide, and all weeks are prime season. However, since it is a family destination, the highest demand occurs when the kids are on vacation – summer, Thanksgiving and Christmas weeks. Generally speaking, the highest demand destinations are Hawaii, the Caribbean, Orlando, and the centers of major cities like New York or San Francisco. If there is a limited supply of timeshares, that also enhances trading power because the demand will be more than the available supply.
Now then, you apply all your newly-gained knowledge about trading power, and you still have questions about where to buy. There are two ways to look at the buying decision. First, if there is a certain destination or resort you absolutely want to be sure you can go to, you probably should buy it and take whatever you can get in exchanges. Or, if you want to maximize trading power, then you apply the six factors, decide how much you want to pay, and go buy something that fits your criteria. I think the first statement is particularly important if the place you want to be able to go is hard to trade into, such as a destination where there aren’t many timeshare resorts. Remember, the exchange company can only give you what they have in their inventory from other owners. If they don’t have it, you can’t get it, regardless of how much trading power you have. The island of St. John in the U.S. Virgin Islands is a good example. There are only two resorts on the whole island, and one of them has only six units, so there are not many timeshares available to begin with. Then the island is pristine and loved by all who go there, so the demand is very high, and the current owners do not deposit their weeks for exchange. Consequently, if you want to go there, you should buy there. On the opposite side, when you do want to trade, you will enjoy excellent trading power because of the demand vs. supply ratio.
 |
Once you have figured out all this trading value business and made your purchase, you can still have a significant effect on the quality of trades you can get. You’ll often hear people say they can never get the trade they want, so therefore timeshares stink! Well, there are over 3.5 million exchanges made every year, so somebody is getting them. When you question that person about their unsatisfactory experience, you nearly always find they are responsible for the problem themselves. Either they didn’t understand trading value and bought something cheap, then discovered it has little or no trading value; or they aren’t working the system to maximize their own trades. Here are a couple of clues: |
First, buy something with decent trading value. We covered all that already, so you now know more about it than those poor folks who bought blindly.
Deposit your timeshare in the exchange company bank as early as possible. You can deposit up to two years in advance. In other words, you can deposit your 2007 week as early as 2005. The resort normally expects you to pay your maintenance fee for the year you want to use your timeshare, so if you want to deposit a future year, they will work with you. What usually happens is they will let you pay the current maintenance fee with the provision you will pay any increases once the resort determines their budget for the future year. So to maximize your trading power, deposit as early as you can and give the exchange company plenty of time to EARN THEIR FEE.
You may request to withdraw your exchange week anytime from one year prior to the year you deposited to two years after the year you deposited. So if you deposited your 2007 week, you may take the exchange vacation anytime from 2006 to 2009. That lets you either pull a week forward to an earlier year or delay up to two years. This is a nice feature if you know you can’t take your timeshare vacation one year, but you want to save it for a later year. At the end of the two-year period, your week expires if you haven’t used it for an exchange vacation. You can pay an extension fee to the exchange company to hang on to it for a few more months, up to another year.
When you request your exchange, there are some tricks that’ll help you also. Make your request as early as you can. That gives the exchange company the most time possible to find what you want. They may not have it at the time you call, but it may come in a week later, so give them as much notice as you can.
When you call the exchange company, you’re essentially taking a snapshot of their inventory at that moment, and they may not have what you want right then. So leave a “Standing Request” in their computer. That way, you don’t have to keep calling them to take another snapshot. The exchange you want could have come in and gone back out in between your calls, and you will have missed it. If you leave a standing request, the computer monitors all incoming deposits and they will notify you if something becomes available that meets your request.
Make your request as broad as possible. The more specific your request, the harder it is for them to fill it. Compare these requests:
“I would like to go to XYZ resort during Christmas week and have a 3BR unit.”
Or,
“I would like to go to any resort in Destination ABC or Destination EFG, any week in December or January, in any unit size.
Which one do you think gives the exchange company the best opportunity to fill it and make you happy?
When you do an exchange, you are not restricted to the week you own at your home resort. This is a common misconception. You may request ANY resort in the system, ANY destination, ANY week of the year. So if you own at the beach in summer and want to go skiing in winter, you can make that request.
Notice the words “Gold Crown” or “Five Star” don’t appear in this discussion of trading. The exchange companies rank resorts and give them designations that supposedly indicate resorts of high quality. RCI uses “Gold Crown” to indicate the highest, “Silver Crown ” as the second tier, "RCI Hospitality" as the third tier, and everybody else is “Standard”. II uses “Five Star” and “Standard”. These designations are indicators of high quality, but they are not absolute indicators of trading power. In order to achieve a ranking, the resorts have to apply and they have to provide a sufficient number of amenities to qualify. So the ranked resorts are generally those large resorts with lots of stuff on site and with good service. But you could have a Gold Crown resort in a destination where nobody wants to go, no demand, and it won’t trade well. Conversely, you could own at that little six-villa resort on St. John with nothing but a swimming pool and lounge chairs, and you could trade like gangbusters!
That concludes the topic of exchanging your timeshare. We invite you to visit our other web pages for more information on buying, selling, exchanging for cruises, links to related sites, tips about timeshares, and a glossary of timeshare terms.
List of Timeshare Exchange Companies
No recommendation expressed or implied. Just a list:
Resort Condominiums International, (RCI)
The largest exchange company with over 3,700 affiliated resorts, over 3 million members, does about 2.7 million exchanges per year.
www.rci.comInterval International (II)
The second largest with over 2,000 affiliated resorts, makes about 800,000 exchanges per year.
www.intervalworld.comPlatinum Interchange
Makes about 25,000 exchanges per year.
www.platinuminterchange.comTrading Places International
About 500 affiliated resorts, makes about 28,000 exchanges per year.
www.tradingplaces.comHawaii Timeshare Exchange
Specializes in Hawaii, makes about 3,000 exchanges per year.
www.htse.comDonita’s Dial An Exchange
US west coast based with affiliates in Australia.
www.dialanexchange.comSan Francisco Exchange
Specializes in top-rated resorts in US, Mexico, Canada, Caribbean and Europe.
www.sfx-resorts.com
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