Hilton Grand Vacations Club (HGVC) is a points-based timeshare reservation and exchange company based in Orlando, Florida. With 55 resorts spanning five different countries, HGVC is one of the most popular timeshare providers in the industry.
Many timeshare companies provide their customers with points for booking their stays, giving them the flexibility to change up their vacation destinations each time they travel. What sets HGVC apart is that they combine traditional deeded timeshare ownership with the points system. This means that HGV club members have ownership over their deeded timeshare week while also owning a certain amount of points assigned to this deeded week — affording members the security of having a reliable Hilton timeshare to return to every year or the opportunity to use their points to travel to a new location.
Hilton Grand Vacations Inc. the publicly traded company that owns HGVC, has recently decided to transition out of this unique vacation ownership model into a purely points-based system. This means that Hilton timeshare owners will no longer own a secured week at their home resort. Instead, they’ll be given points to use toward purchasing and booking their timeshare stays.
HGVC’s switch to a pure points-based ownership may be a strategic move on their end, but how will it affect current club members? Will customers comply with giving up their deeded ownership, or will the company face resistance when switching to the new HGVC points system?
With HGVC‘s current deeded membership, timeshare owners pay for a fixed week at their home resort. HGVC assigns each timeshare unit a specific amount of points dependent on the size, time of year, and resort it’s located at. Higher point values will be given to deeds with more desirable locations, seasonal availability, and space.
For instance, a timeshare unit in Waikiki, Hawaii during summer will have more points than a timeshare unit in Nevada during winter. The amount of points each unit is worth may be exchanged for a similarly valued timeshare; however, members are also given a yearly allotment of points that can also be used to upgrade to a higher-valued HGVC resort. Members can also buy more points or cash in future or previously unused points to stay at a higher-ranked resort.
This system is in favor of convenience and flexibility for the customer. HGVC timeshare owners have the option to go back to the same location at the same time every year or change it up and travel somewhere totally new. It’s a system that works for more traditional vacationers as well as more adventurous travelers. But it has likely outgrown HGVC‘s projection of how vast their customer reach can be, which is why they are switching to a purely points-based system.
While we can never be 100% sure why timeshare companies change up their business models, for Hilton Grand Vacations Club, it likely comes down to increasing sales and customer reach. With a deeded membership, HGVC can only sell allotted weeks at a specific timeshare unit to one customer. But in a purely points system, HGVC is the owner of the deed, and inventory potential is limitless.
Switching to the new system allows HGVC to sell any size package of points rather than abiding by a system that limits deed sales to whatever amount of points a unit has been assigned. Instead of basing sales on how many weeks they can sell, HGVC can maximize profits by simply selling points to customers with the implication that they can use their points wherever they want, whenever they want. This feeds customers the illusion that they have more booking flexibility with a purely points system than with deeded timeshare ownership. However, this is not necessarily true.
Regardless of whether they’re given a specific deeded week or an annual allotment amount of points, timeshare owners have to pay maintenance fees. But in a points-based system, these fees are not based on the needs of your home resort. They are calculated based on how many points you own. So instead of paying upkeep fees for a simple one-bedroom unit on the Las Vegas Strip, HGVC could be charging you a surplus of fees just because of the amount of points you’re allotted.
The problem that this causes is inflation of worth. Even in HGVC‘s current system, not all one-bedroom units are created equal. If a unit is located in a more popular destination and at a better time of year, it will have a higher point value and thus higher maintenance fees. This is understandable when comparing a luxury two-bedroom unit in New York City with a similarly sized but more modest unit in South Carolina.
But when maintenance fees are based on point quantity, there is no specific destination that’s linked to the fees you’re paying. So even if you own a large amount of points, there’s no guarantee that the fees you pay for the year are going to go toward the resort you decide to stay at. You could be paying a lot of money to keep up the appearances of a resort you never end up visiting.
If HGVC doesn’t experience backlash about the new maintenance fees system, there will likely be backlash when HGVC attempts to transition deeded club members into a purely points-based ownership. Hilton Grand Vacations Club probably won’t make this transition all at once but rather over a period of time.
Like other timeshare companies who have transitioned into exchange programs, they’ll probably start by ceasing to offer deeded timeshare weeks. Then, their booking system will start to favor customers with purely points-based memberships by increasing point values at deeded members’ home resorts. This may force deeded members to invest in more ClubPoints just to continue staying at their preferred destination.
Whatever method HGVC takes for transitioning their customers into a purely points-based system, it’s likely to upset loyal timeshare owners who don’t want their membership benefits and the availability at their favorite vacation spots to change.
It’s not news that timeshare developers make unethical decisions for the sake of earning higher profits and increasing customer reach. After all, the timeshare industry is based on maximizing the amount of money a resort can earn by getting customers to stay for longer periods of time.
It’s also not news that timeshare memberships change over time, with maintenance fees increasing and benefits changing for better or worse. But when your timeshare membership becomes something completely different than what you originally purchased, there’s cause for concern.
If you are an HGVC timeshare owner with a deeded membership, unwanted change may be on the horizon. HGVC may start approaching you with requests to give up your deeded weeks in exchange for what they consider to be a more flexible points-based system.
Even if you’ve enjoyed using the points that their current system gives you each year, know that a move to an all-points system may not be as enjoyable. You may eventually be forced to give up your deeded week and pay higher maintenance fees for properties you might not even get to stay at. But because Hilton Grand Vacations is a colossal timeshare developer with strict contracts, you might not have a choice in the matter.
If this doesn’t sound like an ideal situation to you, Centerstone Group is here to help. We are a full-service advocacy group devoted to helping timeshare owners explore their options for exiting their timeshare contracts. If you feel that HGVC is using fraudulent or misleading practices to pressure you into giving up your weeks and using a purely points-based system, contact Centerstone Group for a free consultation.
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