Taking the Time Share Walk.

I'm on vacation in Maui, trying to get a frenzied and much needed break before the season kicks in (it's starting early given all the snow we've gotten and I just missed a week of miserable weather which added to an already impressive base of snow at home).  It's pretty nice here, no doubt.  We're on the Ka'anapali Coast, on the west side of Maui, and you can swim in crystal clear water, the pools are great for the kids, all that.

It was time to see what all this noise was about regarding timeshares (sorry, I mean fractionals).  

So, for a $100 resort credit, the concierge (yes, concierge -- seems everyone here is "in sales") told us it was worth it since it only took 90 minutes.  Plus, because I'm in the vacation business, I wanted to know.  I'd seen Glen Garry Glen Ross, after all.

Finally, the concierge told us breakfast was included, and they had entertainment for the kids.

We showed up as planned at 8:30 a.m. in a nice office at the resort and were met by Jody (made up name) who showed us the abbreviated buffet breakfast and began with lots of "make nice" -- you know, your kids are so cute, how's your vacation, what's your annual income and other innocuous questions.  She told us right up front there would be no tough "Tony Soprano" type tactics, but there would be incentives for buying today.  We had no idea what it was that we were buying, but she already assumed we were ready to sign. 

Jody then proceeded into a very long and detailed sales pitch that essentially amounted to "Buy __________ (never explained exactly what we were buying) now, and you will guarantee that your family can vacation at our family of hotels through the magic of 'free simple ownership'."  As the minutes ticked by, Jody went through dubious financial comparisons with what we would presumably spend to vacation over the next 20 years, never mind preferences, the desire to go to places other than resorts owned by this chain, inflation or, for that matter, present values.  Jody: "I'm a realtor, but I don't know what present values are."  All this for the small price of $xx, and it was ours.  Wow, it sounded so convincing… 

Then she told us that even though this wasn't a time share, it could be traded for a fee for other timeshares.

Jody took breaks presumably so my wife and I could comment on how neatly she was dressed and what a great deal the whole thing seemed.  Don't kid yourself, no matter how smart you are, it sounds pretty good.  But the most fun for me was that every time I tried to communicate something, it was as if I didn't say anything.  Me: I live in ski country so I don't vacation there.  Jody: We have great properties in ski country which you'll love since you're skiers.

All this took the full 90 minutes, and at that point Jody suggested we take a look.  This would have been the point, frankly, to say "Wow Jody, it sounds great, but you said 90 minutes, and I have a (massage/swim/shtup) scheduled for right now.  But we were curious and did want to see the place.

It was time to take a look. A van was brought up, and we went for a ride to see the property.  It was nice, and a lot of people were being led through it.  In fact, it would be nice to be able to use it, but again, it was very unclear if I could ever even use it and, if so, when. I assumed you had some ability, but as best as I could tell, all they really did was give me a bunch of points in their frequent flier program.  [Aside -- I'm sick of trying to track points in any program, and all of them are basically a hassle that is a moving target.  Every time there are too many miles out there, the purveyor just changes the rules, which they can do without apparent problems, and your value is substantially reduced.]

So off we went to see the place that frankly would have been far better than where we stayed. It even had washers in the rooms and decent sized bathrooms.  We went back to the office, got more coffee, talked with Jody about how her family realized they wanted to spend more time with each other (Shouldn't all families?  Isn't this the perfect way to guarantee it will happen well into the future?) and how other clients of hers (Mac and Marcy from Cleveland, look at the nice letter in her book) just loved what she had done for them.  These are real people just like us who are loving the "real estate" they bought.  They can even go skiing at one of their resorts, just as we'll be able to do.  

Another break at which time Jody says it's time to meet someone else.  Jody is pretty nice and has walked us through why we need to buy in order to ensure family harmony, etc..., but this guy comes in (Ted, not his real name) and walks us through the process of financing our purchase.  Never mind that we never said we were buying or even interested.  If we put 10 percent down, he'll finance the rest for 12 percent.  50% down will qualify us for a lower rate. Ted then has the form in triplicate, and all we need to do is sign. There's a notary on the premises, and we'll be out of there in five minutes.  Ninety minutes, by the way, has turned out to be three hours. 

"Hey Ted," I said. "I'd feel like a huge schmuck if I signed your documents."  I told him we were done, and he got mean.  Well, fact is, I would be a schmuck.  Nevertheless fully half of the people subjected to this torture do buy.  Wow, I thought, this is about the sickest deal I've ever heard.  How could people commit to six figure purchases on the basis of a super intimidating sales presentation for an amorphous product?  Luckily, I suspect, for a substantial number of fleeced attendees, Hawaii has a seven day right of rescission.  I wonder how they skirt around that one during the presentation, but I'm certain it's mentioned in some very downplayed way, if at all. 

Once Ted realizes I’m not buying, another guy comes in for an "exit interview."  His name, and here I'm using a real name, is Bruno (not Tony but it sounds pretty close to me) who just wants to make sure I was treated nicely.  At this point, the wife and kids "escaped".  The questions were pretty tame.  This is all about statistics. They wanted to determine how close they were to closing me in order to refine their tactics for the next target.

In fact, it looked like they had about 40 couples/families per day going through this system at least in the morning.  Everyone on the sales/marketing side is in on the deal, and presumably gets a pay-off, which likely increases substantially if you are intimidated enough to buy.  In the Glen Gary days, the economics of time shares were that fully half of the cost of the time share was devoted to marketing/sales; I don't think that has changed by the look of it. 

There is no other reason to buy other than the intimidation tactics, and they have it down.  I have done some major real estate deals, and this is about as tough as you can imagine.  This is sales at its most aggressive and meanest.  If you know about sales, think of something beyond the "assumed sale."  There is no opportunity to say "no"; there is no question like, "Does this sound interesting to you?"  You are assumed to be a buyer, and it's just a question of getting you to sign.  And when you don't, be prepared for a pissed off sales person who will clearly not be your friend. 

Mark Uhlfelder
Senior Vice President, Ski.com