ORLANDO — The world’s largest timeshare and exchange company, Wyndham Destinations, just announced a five-year, $1 billion initiative to “shake up timeshare” by re-branding its flagship clubs — Club Wyndham and Worldmark by Wyndham — and by opening new timeshares in urban areas.
Since the company appears to be flush with spendable cash, it sure would be nice, for consumers, if it decided to really shake up the timeshare world by providing workable, efficient and fair exit programs for longtime Wyndham owners who want out of their lifetime contracts. But more on that later…
In a celebratory press release, Wyndham claimed to be “leading the evolution of the industry by creating more destinations and more experiences for travelers in the places they want to travel.” That evolution includes new city-based resorts (typically, in refurbished hotels) in Portland, New Orleans, New York, San Francisco, Austin and, later this year, Nashville. The company also plans to open a resort in Moab, Utah, next year, but it’s not a town for city-slickers. Moab caters to hiking, camping and RV travelers who like one or more of Utah’s Mighty Five National Parks (Bryce, Zion, Arches, et al).
Prior to becoming a public, stand-on-its-own company last year, Wyndham managed a vast network of timeshare resorts and hotels that ranged from top-end resorts such as Bonnet Creek (in Orlando) to low-cost motels (e.g., Super 8) along most of the country’s major highways. Now that it’s a public company, and under new management, the company understandably wants to upgrade an image that, historically, was decidedly mediocre. It’s good for business, too, because the whole point of the rebrand-and-upgrade campaign is to attract new timeshare buyers and create more reasons for existing owners to upgrade and buy more Wyndham points.
Ovation Program Triggered Changes in the Industry
To its credit, Wyndham did shake up the industry, in a minor way, several years ago when it introduced the Ovation exit program, which was designed to help members who, after years of usage, wanted to get out of their timeshare contracts. Wyndham was the first timeshare company to publicly acknowledge that some, if not thousands of owners, need decent ways to exit. But Ovation, while providing a model for other companies to follow, had flaws from the outset — it was only available to members in good standing who had paid off all mortgages, and it was only offered to members of Club Wyndham. Members of other timeshare clubs that Wyndham owns, including Shell Vacations and Margaritaville, were not eligible for Ovation exits.
Wyndham, which wants to protect its retail sales operation, has released no numbers whatsoever to substantiate the participation and/or success of its Ovation program. Maybe 500 owners used Ovation to surrender their expensive timeshares for nothing? Maybe 5,000? Maybe 10,000? Despite its status as a public company, with responsibility to report all significant financial transactions to Wall Street investors who monitor every announcement, Wyndham isn’t saying anything about the run-rate of Ovation.
At a Florida legislative hearing on exit company issues in March, Jason Gamel, Wyndham’s then-senior VP and General Counsel, repeatedly dodged several point-blank questions from lawmakers who wanted to know, how is Ovation working? How many people have used it for exits?
Incredibly, given his leadership role at the hearing, Gamel said he did not have the stats on Ovation but would supply them at a later date. In general, he said, “If they qualify for the program, and if they are current and paid, it’s literally just about everybody gets out. We’ve taken those timeshares back.”
He was also unintentionally candid about how awkward it is to sell brand new timeshares (for $21,000 per interval) while simultaneously offering to take back intervals that have little or no value on the secondary market.
“When somebody is paid off, while that makes total sense for a developer to take it back, there are reasons why it is difficult for a business to be selling (timeshares) on one side and actively promoting on the other that you are willing to take it back.”
The “reasons” are obvious. If new buyers were advised that their shiny new timeshare might have zero value — or be impossible to get rid of — they probably wouldn’t buy it in the first place.
BTW, in May, Gamel left Wyndham to become the new president and CEO of the American Resort Development Association, the timeshare industry’s lobbying group in Washington, DC.
Even without offering numbers to substantiate its credibility, Wyndham’s introduction of Ovation has had a ripple effect on the timeshare industry that continues today, with mixed results. Diamond Resorts introduced a “Transitions” program that was designed to enable owners to surrender their timeshares for $250, but it had restrictions as well, so it does not work for all Diamond owners who sought exits. Last fall, the industry’s trade association (ARDA) announced a “Responsible Exit” program that was created, in large part, to offset the impact of legitimate (and scammer) exit-and/or-cancellation companies that were providing exit options for owners. Wyndham, no surprise, is the leader of the Responsible Exit initiative.
Coalition to Reform Timeshare Represents Consumers
The goal of Responsible Exit is to get owners to call their timeshare company or HOA, first, before engaging with any third-party companies that offer exit services. Ostensibly, the campaign is designed to protect consumers from scammer exit companies that fleece unsuspecting owners. Laudable on its face, but not the real motive. Responsible Exit, according to Coalition members who are familiar with the program, is just the latest effort by the industry to eradicate a cottage industry of timeshare exit firms that are flourishing in the face of developers who have long-ignored the secondary market (where many timeshares are offered for $1, or less) and deliberately failed to provide “responsible exits” to owners.
That’s why the Coalition to Reform Timeshare exists. Our guiding principal is that longtime, loyal timeshare owners DESERVE realistic exit options to get out of lifetime contracts that, over time, become financial burdens and, at their core, are blatantly unfair to consumers. Owners also deserve a reasonable bill of rights where all contract details are disclosed up front, transparently, where high-pressure sales tactics are prohibited and, most importantly, where new buyers have a reasonable time to rescind purchases that were signed under duress from smart but soul-less sales people.
FYI, Wyndham Destinations has tons of clout to lead what it calls “the evolution of the industry.” In addition to claiming 4 million owners and members in its various clubs, Wyndham offers a network of 220 resorts as well as the entire inventory of 4,300 affiliated resorts in RCI, the world’s largest exchange company. Sixty percent of its NEW buyers are Millennials or Gen Xers (the average age of all owners is much older) who are now offered intervals for $20,000 to $60,000 per week, depending on the sales-day package. The company is also aggressively pursuing lawsuits against exit companies that help its customers cancel their timeshares.
“The timeshare business has long been a pop culture punchline, but big branded timeshare companies have changed,” said Noah Brodsky, Wyndham’s new chief branding officer (and sponsor or the rebranding initiatives). “These new brands are our way to take back the word ‘timeshare.’
Nice words from Brodsky. The Coalition encourages him, and the rest of the Wyndham team, to embrace exit options — including working with legitimate exit companies — that benefit all timeshare consumers.
Here is the link to Wyndham’s announcement.