The Process Of Timeshare Holiday Exchange - How Does It Work?
Some people who own timeshare would never dream of switching from their ‘home’ resort. The reason they bought a week or two there is because they adore that resort and wish to return to their favourite place year after year.
Increasingly though you will also hear a more confusing statement when you enquire where a friends timeshare is located, and they reply with “Oh I can go anywhere in the world…”
What they are referring to is the wonderful facility unique to the shared ownership world that is ‘Exchange’. Here we give a brief synopsis for those unaware of how it works and explain just why timeshare owners are so smug about it…
A Simple Explanation
Established exchange programmes operate on a simple fair swap system whereby a value in trading power or points is allocated to a week’s ownership. Owners ‘bank’ or deposit their ownership week with an exchange company and in return can choose other weeks in the same resort they currently own in, or a week in a completely different resort which is also part of the exchange companies scheme. We summarise the main points below then explore them in more detail with the two main exchange companies.
- The main benefit of exchange is the chance to experience a huge range of different types of resorts, countries and holidays, from cruises, and skiing to weekend city breaks and adventure breaks.
- Timing of when you bank your week is key – the earlier you can deposit your unwanted week will have a large bearing on the opportunities offered to you in return. The closer to the owned weeks ‘expiry date’, the more its value decreases as it becomes harder for the exchange company to get a booking for it.
- It gives you greater flexibility than your previously ‘fixed’ week allows as if your holiday dates are changeable then an exchange company will extend your travel window so you don’t lose your holiday.
- Exchanging your ownership right also opens up the ability to ‘gift’ your holiday to friends and family should you wish to so they can use your vacation rights instead.
- To further maximise your timeshare ownership, exchange opens up access to additional high quality and heavily discounted rental holidays which you can purchase without having to exchange your holiday time.
- Exchange companies can source a wide range of leisure and lifestyle benefits, which, due to their enormous buying power, they are able to offer at highly competitive rates. By listening to their members and following current trends they can focus on what is most in demand and offer privileges at heavily discounted prices.
- Importantly, accommodation availability is dynamic. That means the resorts with available accommodation for holiday exchange members will change every hour of every day, every month, throughout the year.
- Final point in this intro is that you don’t need to commit to an actual timeshare home resort to become a member of an exchange scheme. A timeshare can be purchased and immediately converted into points or the week deposited with the exchange companies thus allowing you to use the flexible and great value exchange mechanism without you ever having visited the unit that you own.
Now those are all the big advantages of using an exchange mechanism. Read on for the detail and things you may need to consider carefully…
The process can get a little complicated… You need to understand how timeshare rights use works for the model you have bought, and to be aware of all your uses and holiday options to maximise your trading value or points, as well as the value you get out of the timeshare purchase itself. It is worth reading up on the product and paying attention to the small print when you become a timeshare owner and/or enter into an exchange membership.
Some larger timeshare resorts have multiple developments and can offer their own internal exchange or club, but most will also offer the option to swap your week for different ones across the world by using an external holiday exchange company, and the two biggest players are RCI (Resort Condominiums International) and Interval International.
The first thing to point out is that exchanging your timeshare is not free. You will be required to pay a membership fee when becoming a member of either RCI or Interval as well as for making each holiday exchange, know as an exchange fee.
The second key consideration is that ownership weeks are assigned a value based on a set of criteria which includes the rating the members have given the resort, the seasonality of your week, size of your accommodation and the range of onsite facilities. The greater your perceived value means more choice when you want to swap.
Fundamentally, it is the old supply and demand equation – if the demand is high for a week at a given resort at a certain time of the year, then it is likely that week of ownership will carry a high value. That value (trading power or points or credits, whatever your exchange company choose to call it) is used as a kind of currency enabling the holiday swaps to take place fairly.
For example, if you own a week in mid-August in a luxury townhouse on an upscale development in a popular resort with a golf course, spa and restaurants to hand, you are going to get a lot more choice than someone who owns a week in March in an apartment in an older development with just a pool.
Now this can work to great advantage for owners who may have had their timeshare for many years and their usage of it has changed. Say you own a week in August but your kids have grown older and you now prefer holidaying in the quieter seasons. Your nominated value ie ‘trading power’ could get you a much more sophisticated resort or holiday than your home one but outside school holiday time. Or if you own time in a large unit in Florida, but your kids are too old for Disney Theme Parks now, your one week in the US could get you three weeks back in Europe!
It’s actually quite genius and appears to work extremely well for millions of timeshare owners. So what about the major players?
RCI pioneered the concept of holiday home swapping back in 1974 when it was the first company to launch holiday exchange, initially in the US. Today, RCI has more than three million members and has affiliated over 4,300 holiday resorts to RCI Holiday Exchange worldwide. It is cheaper to join on a longer term membership, for example, a five-year RCI membership would cost you £53 per year. Multi-year membership renewal options are also available, helping members to make further savings.
An RCI Platinum membership is also offered which comes with additional lifestyle benefits, such as travel discounts, free tastecard+ dining club membership, discounted tour and attraction tickets, 50% off airport lounge entry and is £50 extra with similar discounts on purchasing multiple years.
RCI also offers Trading Power and Points ‘Protection’. This means, for a fee, members can basically ‘insure’ their Trading Power – so if they are unable to go on holiday the value of the Trading Power or Points is restored to their account for use in the future.
Members are able to maximise their memberships by taking advantage of regular Trading Power sales and Points discounts which can often allow you to use up any lower value Trading Power or Points credit you may have remaining on your RCI account to get away on some extra holiday additional escapes.
Then there are points…
Points Make Prizes!
In 2000, RCI introduced the use of points, which was adopted by many other exchange companies and resort clubs as a simple mechanism to facilitate holiday swaps or exchanges. As with RCI Weeks Holiday Exchange, RCI Points can also be combined to access high-value exchange holidays. Points from one use year can be brought together with the current use year to give the RCI Points member a greater ‘buying’ power and lots more holiday options and choice.
Weeks at RCI’s affiliated resorts are allocated an RCI Points value, based on the same criteria as that used in setting a week’s Trading Power value. RCI Points members then use their points to get the exchange holidays they want. Points members can always buy extra points to boost their RCI account which not only gives them access to higher value weeks and accommodation, but also different holiday experiences.
RCI lets you rent points too, for an extra special holiday and the RCI Points Partner programme gives members lots of travel and holiday extras at discounted rates, including car hire, hotel stays, city breaks with flights, attraction tickets and more.
Many resorts will specify whether they are affiliated with RCI Points or RCI Weeks making your decision for you. A large number of resorts will have already converted to points but the advice seems to be that if you have a high demand week, you may want to keep that week as it will still ‘trade well’ even if it’s not on the points system.
You are not obliged to convert your week to points, and it does cost a fee to convert your week to points if your resort has not already done so.
RCI Weeks and RCI Points are two separate holiday exchange options – although your week will be assigned a value it doesn’t translate in the points world.
Now lets take a look at Interval International.
Interval has a network of nearly 3,200 resorts in over 80 nations and has been operating for more than 40 years. It works in a very similar way to RCI with a basic membership level, as well as upgraded Interval Gold and Interval Platinum membership and the company serves both weeks and points-based members.
As the purpose of this post is NOT to compare these two companies (there are plenty of other sites out there doing that if you look hard) but rather to examine how the mechanism of timeshare vacation exchange works, we won’t go into the details of how Interval run their membership levels. Interval has an interesting booking system that we will explore instead.
Once the value of your timeshare week has been established, it becomes more important that you ensure that you are able to book a holiday that will compare favourably with the quality you want or are used to. Interval allows you to search their inventory of exchanges and book in one of two ways.
Deposit and Request
Deposit First allows you to deposit your week into the Interval’s system, and you can then search over a window of up to 4 years (up to 2 years before your own resort week and 2 years after). Your own week however has been banked and possibly booked, so you have in effect lost it. But your trading power is ‘locked in’ so you don’t lose any value while you continue to search for your vacation. If your desired vacation is after your own home week (date wise) you will need to go with this option.
Request First allows you to retain an option on your own home week should you not find an exchange you want. Interval will continue to search based on your criteria until it finds a suitable match for your requirements. If it can’t, your points or home week are given back to you. This seems a risk-free way of searching, unless of course you have no interest in your own home resort, in which case you lose nothing by depositing first.
Upgraded Interval Gold and Platinum members have the further opportunity to turn their resort week into two shorter vacations, or to exchange their week (or points) towards a cruise, tour or golf vacation, experiential travel or hotel stay sourced directly by Interval.
Interval also offers an option called E-Plus which allows you to ‘retrade’ up to three times for a one time low fee. Basically it allows you to change your mind up to 24 hours before check in. This indicates that desirable stock gets continually added onto the inventory – so you may have booked a week in a particular resort you wanted to stay in but then a month later a more preferable week gets deposited.
Members of Interval have the opportunity to turn a confirmed exchange into two seven-day bookings without relinquishing another week or more points. All they have to do is pay an additional exchange fee. Members can refer to the Deals tab on the Interval International website for Choose2 and for low-priced, last minute Getaways.
Offers and Options
As both Interval and RCI offer literally thousands of holidays, their inventory of holiday accommodation is ‘dynamic’ ie constantly changing, so each search could yield different results. Those in the know suggest the most effective way of searching is to do the broadest possible scan of resorts with the longest time period, then narrow it down. Others simply look for the type of holiday experience they want, rather than the destination.
Both Interval and RCI also offer Guest Certificates. This means if you don’t use your confirmed exchange or purchased Getaway, you can gift it. It is usually possible to simply rent your owned week out via your own resort to friends and family if you aren’t going to use it, but by using your exchange option, you could buy them a city break or cruise for example with your week or points, rather than a week at your usual place. These Guest Certificates come free with certain upgraded memberships, or can be purchased for a small fee of around £40 making it great value should you be footing the bill for your son’s honeymoon for example!
Newcomers to timeshare are taking full advantage of the points system and are purchasing vastly discounted ‘resale’ timeshares (see our recent post on timeshare resales here) that they never intend to visit, just so they can convert the week into lucrative points and take advantage of the benefits of exchange vacations. One of our AIPP members recently told us that the majority of timeshare owners he now speaks with have never visited their home resort!
We’ll stop there for the time being but will return to these companies in future posts to have a look at the type of accommodation and holidays they are offering within their membership programmes. Do sign up to our newsletter below to be kept informed of our news and posts.
Hopefully though we have given you some insight into the somewhat mysterious but exciting world of timeshare holiday exchange, often locked behind a membership wall so it is hard to see detail and rarely written about outside of the timeshare world.
And that, friends, is why your neighbour is looking so smug when you enquire about his timeshare in Tenerife and he regales you instead with tales of the luxury cruise he has just taken. You’re welcome.
The figures given in this article are approximate and information has been taken from other companies websites – please do your own research and contact the companies directly if you wish to clarify exact points. If you wish to learn more about timeshare please visit our dedicated timeshare pages here.
For more information about RCI please click here.
For more information about Interval International please click here.