As RCI, the world’s largest timeshare exchange network, marks its 50th anniversary, industry commentators are asking a blunt question: does a traditional timeshare exchange still make sense in today’s holiday market?
A much-needed step forward
The early 1960s concept of timeshare quickly became a popular way to secure a consistent standard of accommodation — as long as you were happy returning to the same apartment, in the same resort, during the same week each year.
This was before package holidays became widespread. When annual trips abroad opened up to mass-market travellers in the 1970s, expectations quickly outgrew what fixed weeks could realistically offer.
Jon and Christel DeHaan, a couple from Indiana in the USA, identified the obvious gap and set out to fill it. They created an exchange system designed, in theory, to let timeshare owners swap their allocated weeks for different dates — and even different resorts. The company has since changed hands several times and is currently owned by Wyndham Destinations.
Did it work?
In some ways, yes. RCI and other exchange networks helped the timeshare sector generate vast revenues and grow into a $20 billion-a-year industry.
RCI’s biggest impact, however, was commercial: it gave sales teams a more compelling story to sell — a glossy promise of flexible future holidays, rather than a single fixed week in a single resort.
With RCI in the mix, a salesperson no longer had to persuade someone to pay a substantial upfront sum to pre-book the same week every year for the rest of their life.
The skilled closer’s toolkit was transformed by the shiny red, several-hundred-page RCI directory. Suddenly, they could sell not just one resort, but a whole world of possibilities.
A timeshare purchase could now be positioned as a passport to five-star travel “anywhere in the world, any time you choose”.
All it took was the joining fee and a handshake from the well-groomed representative across the table on the presentation deck, and you were promised holidays fit for royalty.
As a sales tool, it was a huge leap forward — and arguably one of the biggest drivers behind timeshare becoming a business that now outperforms the global music industry in revenue terms.
In short: RCI worked very well for timeshare businesses.
OK — but did it work for customers?
That’s a different question, and the answer depends on what you mean by “work”. What it didn’t deliver, for many owners, was anything like a seamless “five-star travel agent” experience.
Timeshare owners typically had to pay high annual fees to RCI whether they exchanged or not. On top of that, they often faced additional exchange fees, which could vary depending on whether the swap was domestic or international and the time of year. There were also extra costs to bank weeks or borrow from future allocations.
These are costs that simply don’t apply when you book via mainstream travel websites.
Using RCI could also be far more complicated than booking a standard holiday. There were (and still are) strict booking windows. Miss them and you could lose that year’s holiday — while still paying both your resort maintenance fees and RCI membership.
Availability has always been an issue. Owners are often required to list first, second and third choices. Many rarely secure their first-choice destination. With mainstream booking, travellers typically choose the exact location and dates they want — and confirm instantly.
The idea behind an exchange system may have been logical. Even an exchange programme, however ineffective, looks like an improvement on being locked into the same room, the same resort and the same week every year.
But did it match the expectations created for first-time owners — and the promises made in the sales pitch?
Probably not.
How about today?
RCI says it now covers 4,100 resorts in 110 countries, and has expanded into travel services as well as a points-based system. In its own words, it has “continually evolved to meet members where they are and support our affiliates throughout the years”.
So is RCI timeshare exchange now a realistic, competitive alternative to modern booking platforms?
“Objectively, you would have to conclude that the answer is a resounding ‘no’,” says Andrew Cooper, CEO of European Consumer Claims.
“Nobody can say RCI don’t work extremely hard, or that they don’t show real initiative. But they will always be a long way behind the mainstream holiday industry.
“Without annual fees or exchange fees, a non-timeshare owner can access around 1.4 million hotels, rather than the 4,100 resorts a timeshare owner can access — assuming they are lucky enough to secure their preferred exchange. They’re not committed to taking a holiday, and can book extra trips whenever they choose, simply by booking them.
“RCI might argue that its resort portfolio is higher quality — but is that really true today? Outside the timeshare world, you can find accommodation at every standard, including five-star. The mainstream travel market doesn’t require you to pay to join a club, or follow rigid booking procedures that require a year’s notice to secure a room.
“You can even stay in many timeshare resorts via Booking.com now, without paying membership or using an exchange system.
“The modern holidaymaker opens Booking.com, chooses, clicks, and books — without the rigmarole RCI members have to deal with.
“RCI has the unenviable job of trying to make timeshare work as smoothly as the wider travel market. The unavoidable truth is that modern booking has evolved so far beyond traditional timeshare systems that they simply can’t compete.
“RCI exists largely to help the timeshare industry sell a dream to its targets.
“A dream that is demonstrably impossible to deliver.”
Are you fed up with your timeshare?
If you own a timeshare, feel the exchange system hasn’t delivered, and want to understand your options going forward, get in touch with our team at the Timeshare Advice Centre.
