Vacation Ownership/Time Share

Historical Background

The timeshare business began in Europe in the mid-1960s and spread to the United States. Properties that combine vacation ownership with hotels, popular urban vacation ownership resorts in major cities, adventure resorts, and gaming resorts are among the emerging timeshare trends. In the past, timeshare has had a negative reputation due to the marketing methods and high-pressure sales tactics.

In 1975, there were 45 timeshare projects with 10,000 members in the United States. Currently, it is estimated that there are nearly 5,000 resorts in 110 countries with more than five million owners of timeshare units. Timeshare sales revenue exceeded $6 billion in 1999. Highly respected hotel chains such as Marriott, Hilton, Disney, Holiday Inn, Embassy, etc., have joined the growing vacation ownership program.

The basic concept of timeshare is to sell a fractional interest of a condominium or hotel unit in weekly intervals. Consumers buy them because they think that in the long run, it will cost less to own a timeshare unit at a vacation property than to pay for hotel rooms. Many of the resorts are in prime locations where it would be too expensive for one person to buy an apartment by himself. In Hawaii, an ocean front hotel room used to cost $20 a night, currently rents at $300+ per night. If the room rates continue to increase, timeshare units appear to be a good hedge against inflationary room rates.

Timeshare Types

There were two basic kinds of timeshares. The ownership units gave the consumer a deed and title to the fractional interest. The owners could sell or will their units. The right to use units gave the consumer the right to use the units for a fixed period of time after which the developer retained all ownership rights.

There are fixed period sales where the consumer buys a specific time period each year and there are floating period sales where the consumer buys a "unit" in an unspecified time period and reservations are based on first come, first served basis. Hawaii units are in high demand by others who want to trade into Hawaii.

A new major concept is the "points" system where the consumers are given pre-determined points for their units. Some of the hotels have made arrangements with other travel providers and allow the consumer to trade their points for plane tickets, cruises, car rentals, recreation vehicles, backpacking trips, golf lessons at a resort, etc.

Most timeshare projects have registered as a condominium under the HRS 514A and must register the timeshare project under the laws of HRS 514E.

The developer creates the timeshare project for sale and complies with all of the laws. The acquisition agent needs to be registered with DCCA and does not have to have a real estate license. The "Outside Public Contact" (OPC) is an individual who acts on behalf of an acquisition agent and who does not sell timeshare units. The OPC does not need license but must be registered with DCCA. The sales agent is a licensed person who sells timeshare units. The sales agent must be registered with DCCA.

Becoming An OPC

Any independent real estate broker who wishes to sell timeshare units for a time-share project must be registered as a timeshare agent and register as an independent broker affiliated with all timeshare companies that they work for. There are currently about 70 timeshare projects registered to do business in Hawaii and more projects are expected.

If you are interested in becoming an OPC, you need to be registered with DCCA as an OPC. You do not need a real estate license to be an OPC. You will be paid $25 for every lead that you refer to us and a bonus of $175.00, $275.00, $375.00 for every lead that ends up in a sale. If your office wants to participate in this referral program, your office will be paid a referral commission of 30% of the commissions which will be $480 for a $20,000 time share unit. You will also receive 10,000 points for every Marriott unit that is sold. When you accumulate 100,000 points, you can get a 1 week stay at a 5 Star Marriott Resort. If you accumulate 200,000 points, you can get 2 plane tickets and a 1 week stay at a 5 Star Marriott Resort, compliments of Abe Lee Realty.

You do not make any sales presentations, all you do is give us a warm body that fits the profile of a time share buyer. We want to make sure that you give us a lead that is genuinely interested in a timeshare project and needs more information before they buy. If the clients go to Maui or Kauai for a sales presentation, Abe Lee Realty will pay for their plane fare (for 2) and a 1 day car rental if they purchase a unit. There is no reimbursement if they do not buy.

The chances of any licensee being hired by a timeshare company is very slim. You may have to relocate to another island, there is tremendous pressure to sell or you will be terminated. If you really want to get into timeshare sales, you can show on your resume that you were good at getting your own clients and it may increase your chance of being hired.

Potential Buyer Profile:

• Older people over 50 years
• Income of over $60,000 per year
• Like to travel or would like to travel
• Older single people are good candidates
• Have children or family in other parts of the world

Major components of Ownership:

• Prime Season - Your week is prime season year round. You have a RED WEEK, it's at a FIVE STAR resort, and its location is in Hawaii, beachfront. It's one of the most important trading units in the system.
• Floating Time & Unit - You tell us when you want to use it. You can use your week anytime during the year, there are no black out periods. You can choose whatever floors you like to be on in your view category and request whatever unit you prefer in that category.
• Deed & Title - You own the land and the villa. It is yours in perpetuity. You can put it in a trust, will it to your children, or sell it anytime.
• Home Owners Association - You become part of the non-profit homeowner's association and you get to vote on any changes to the resort. You are responsible for your maintenance guarantee fees to maintain your investment; it also pays your taxes, insurance, interior and exterior maintenance and utilities. Platinum program one bedroom fees are $882 annually.

How you may use your week of Vacation Ownership

1. Come back to Maui year after year starting in 2002. The only cost to you is the room tax of $4.27 for a one bedroom or $4.72 for a two bedroom.
2. Exchange your week through Interval International - Marriott enrolls you into Interval International and pays your first year annual fee of $74.00. You may pay your membership fee in two, three and five year increments and receive a reduced rate. You get quarterly updates from Interval International from their magazine "Interval" with information on travel discounts, new resorts added to the program and a variety of useful tips. Internal Exchanges - Take your week of ownership and relocate at another Marriott Vacation Club International resort. The exchange fee is $69. External Exchange - Choose one of over 1,847 in over 72 countries. To exchange your week in the U.S. or Canada, the fee is $114 and if you choose to exchange internationally, the fee is $135. Plus… If you deposit first and give II your week here at the Maui Ocean Club, you'll not only have your one week to trade anywhere in the world, they'll add a BONUS week too!!! (Some restrictions do apply)
3. Trade for Marriott Reward Points - Every other year you can trade your week(s) for points. The fee is $104 each year you trade for points.
   • Ocean front two bedroom = 150,000 points
   • Ocean front one bedroom = 100,000 points
   • Ocean view one bedroom = 100,000 points

Maximize Your Vacation Ownership

Maui One bedroom ocean view Villa

• 2002 - 100,000 points Combined with Year 2004 for the Vacation 713 Award
• 2003 - 1 Red Five Star Week & 1 Bonus Week (Bonus Week can be added to Vacation 713 Award in year 2004 for an additional week of travel)
• 2004 - 100,000 points 2002 and 2004 points = World Wide Vacation 713 Award
• 2005 - 1 Red Five Star Week & 1 Bonus Week (Bonus Week can be added to Vacation 713 Award in year 2008 for an additional week of travel)
• 2006 - 100,000 points Combined with Year 2008 for the Vacation 713 Award
• 2007 - 1 week at the Maui Ocean Club (If you want to go to Maui) or 1 Red Five Star Week & 1 Bonus Week if you don't go to Maui
• 2008 - 100,000 points 2006 and 2008 points - World Wide Vacation 713 Award
• 2009 - 1 Red Five Star Week & 1 Bonus Week
• 2010 - 100,000 points Combined with Year 2012 for Vacation 713 Award
• 2011 - 1 Red Five Star Week & 1 Bonus Week (Bonus Week can be added to Vacation 713 Award in year 2012 for an additional week of travel)
• 2012 - 100,000 points 2010 and 2012 points = World Wide Vacation 713 Award

In ten years of ownership, you will receive 9 (or 10 if you don't go to Maui) weeks of timeshare accommodations and 3 World Wide Vacations. You can add the bonus weeks to your 3 World Wide Vacations for two weeks of travel to 5 Star Hotels with Internal or External exchanges. The World Wide Vacation 713 Award gives a member who has accumulated 200,000 Marriott Reward Points 2 plane tickets and a one week stay at a Marriott Vacation Resort and the bonus week lets you stay at any Interval International timeshare unit on an External Exchange. You can also sign up for a Marriott Charge Card and you can earn points for travel rewards. You can get bonus points for staying at Marriott Hotels worldwide.