Holiday Homes Portal News

How do you value your vacation ownership points ?

Date: 01/10/2009
Article source: moneyweb

The Holiday Club is a points-based timeshare scheme.

According to its website, it was started in 1993, and was the logical continuation of a leisure property company started by John and Braam Beekman in 1971. It is affiliated to timeshare giant RCI. When you purchase Holiday Club points, you are actually buying shares in a public company. Purchasers of points are issued with share certificates.

The Holiday Club claims to have over 83 000 members, growing by some 18 000 each year. Director Steve McCarroll says the company posted sales worth R340m last year. "The club has acquired investments in resorts throughout Southern Africa, and developed its own quality resorts in the most popular areas in the country," notes the website. "Currently valued at over R1bn, these investments are administered by the Beekman Brothers Group, and are held by the Leisure Property Trust."

The Holiday Club does not market its own points. This function is outsourced to various retailers, who sell points close to the recommended price of R1 895 each.

The Holiday Club also has a direct marketing scheme called The Business Club, in which members earn commission for introducing new business. The main gripe of dissatisfied Holiday Club customers seems to be misleading sales pitches, which results in disappointment when the time comes to convert points into holidays.

They say that the Holiday Club is not prepared to re-purchase its points at any price. Re-sale market is best McCarroll tells Moneyweb that The Holiday Club applies itself to selling new points only. And while re-possessed points might be re-sold, it is not the company's main practice. McCarroll says the company refers interested sellers to specialist re-selling companies approved by the Timeshare Institute of Southern Africa (Tisa), a self-regulatory body for the timeshare industry.

One such re-seller told Moneyweb that the highest price he's ever seen Holiday Club points fetch in the second-hand market is R650. He says that most customers are happy to let their points go for as low as R300 apiece. Another re-seller was prepared to sell Moneyweb points for R900 including VAT and his commission. Thus it makes a lot more sense to buy your points in the second-hand market than new.

Transfer of points between buyer and seller costs R1 000. Buyer beware Tisa director Alex Bosch warns that the onus remains on members of the public to familiarise themselves with the content of any agreement before signing it. McCarroll echoes this sentiment. He stresses that Holiday Club points must not be seen as a financial investment, even though they take the form of shares.

Buyers need to be aware that the points should be purchased for holidaymaking purposes, and that there are ongoing costs in the form of an annual levy. Bosch says that Tisa has seven pending complaints regarding Equitac Commodity Brokers, a major retailer of Holiday Club points. But he says there is no disproportionate number of complaints made against The Holiday Club, in comparison to other vacation clubs operating in the marketplace.