On a recent visit to Orlando, we participated in the infamous Hilton Grand Vacations Club tour and while it doesn’t work for our family, the timeshare pitch has come a long way and almost made financial sense. Almost.
Why We Accepted A Timeshare Pitch
For a specific trip in which I had to be at a convention on the Las Vegas strip, I shopped hotel prices for my stay and found them to be astronomical for my dates even staying away from the convention property. For example, a four night stay was a nosebleed high $500/night at the Conrad, but even the less convenient Hyatt Place was over $300/night and was a pain to get to and from. However, the always loyal Hilton Grand Vacations Club folks called me in my hour of need and offered the entire stay for $199 in exchange for the 90-minute pitch on one of the days of our trip. It was too much value to pass up. For a number of reasons, my wife couldn’t make that trip making us ineligible for the presentation and stay but we were able to move it to Orlando later in the year (a couple of weeks ago.)
In addition to the stay which I reviewed in this post, we recieved 15,000 Honors points and a $100 “stay on us” certificate for Hilton hotels. It practically paid for itself, right? More on that later.
The Financials And Value Never Made Sense
I have been in sales for most of my adult life and appreciate hearing other pitches – it’s entertaining to me. For my wife and I, who have attended a Hilton Grand Vacations Club presentation in the past, there was no threat of us purchasing so we were just along for the ride. To start the presentation they set the costs very high. They initially proposed 18.99% and a $43,519 purchase price as well as a $1,885 maintenance fee. This initial sticker shock is to make their offer look great in the end. Here are some photos I wasn’t supposed to take but did anyway.
At the conclusion of our presentation, the financials were presented and here’s what it was:
- 5,440 HGV points every other year
- $199 Title fee
- $1,402 every other year in maintenance
- 11,200 bonus HGV points at sign up
Without getting into a very complicated points conversion chart, suffice it to say that 5,440 points would be about enough to deliver a one-bedroom suite for one week every other year.
The offered finance rate (though we could finance through our bank for a better rate) was proposed in the 7.5% range. They never ran our credit, it was just the rate they provide if HGV carries the finance.
Interestingly, they were pitching putting the whole thing on a Hilton American Express credit card at 0% for 12 months to overcome the interest charges and then earn about 92,000 points (75,000 point sign up bonus.) It was a clever approach and one, of course, driven by yet another bonus for the sales staff. A spokesperson for Hilton Grand Vacations responded this week that employees are not incentivized for American Express sign-ups.
The reason we selected the resort we did for our stay was that it was available for cash rate booking for family that might visit. The rate for that nightly stay was $140. A six-night stay would have cost $840 and would have earned between 8,400 and 16,800 Honors points as well as six nights toward Honors status without any special bonuses. While this stay was cheaper than Hawaii would have been, for example, the $1,402 maintenance was on the border of being equal value to the nightly cost in our limited research.
Why part with your future money when the rates are currently cheaper without an HGV membership? Inflation was the answer. In fairness, it’s a hot topic at the moment and true over time as the maintenance fee doesn’t increase but hotel nightly rates likely will. That said, hotel prices are at some of the highest levels ever seen at the moment, so I actually forsee a reduction in costs as the economy has to eventually cool and travel will retreat.
The value is the other isue at hand. If I am “invested” (I used quotations heavily and the word: invested lightly) and have prepaid for my vacations, I am unlikely to stay elsewhere. This limits me to HGV properties and partners like RCI. This forces a sunk cost mentality (I’ve already paid for it so I might as well use it) and doesn’t reflect the best market value for a stay nor the best brand for money necessarily.
Additionally, our experience staying at an HGV property connected with this promotion wasn’t exemplary.
A Reasonable, If Not Atypical, Case For HGV
In a surprise move, HGV “owners” have access to $80 hotel nights throughout the Hilton system (outside of some cities like New York, and Washington DC for example) and $90 one-bedroom suites. We travel a lot and rarely pay anywhere near $80-90 or even $110 for a two-bedroom suite. Assuming that I stay in hotels 50 nights annually (pre-pandemic that number was 150-200), and usually pay around $175/night for a comparable room, I save around $4,750/year ($175 avg nightly rate – $80 HGV member rate = $95 x 50 nights.) That puts me money ahead against the purchase price somewhere in between year three and four.
Add back in the other stuff:
- 92,000 Honors points,
- 10,000 HGV points (enough for another two weeks in a one-bedroom for most markets)
- Hilton Honors silver for life
It actually makes sense. There is a use case, especially for a small business owner. In fact, small businesses would be smart to purchase the cheapest possible package (which this one was) just to get access to those cheaper nightly rates.
This isn’t how the (sigh) “investment” is marketed but the miles and points game has trained us all to look for the value that others might miss and in this instance (deeper, audible sigh) it actually makes good financial sense to purchase a timeshare.
Why We Still Didn’t Buy
Hilton grand Vacations can call this an investment, ownership, real estate, and everything else they threw at it all day long but the reality is that it really isn’t. It’s a coupon book, a very expensive coupon book. Further, if you want to be taken seriously on a purchase about the cost of a used car let alone a small house (depending on the package and over the course of a lifetime) then you have to stop acting like it’s a scam.
Why can’t I think about it over night? If it’s a great value, certainly, my attorney or accountant will agree – maybe they would recommend increasing the package. Why can’t I take any printed materials with me to do the math outside of their offices or consider it a little while longer? Why do I have to make a decision right here and now that will cost me about $53,000 over my lifetime? I can sell real estate, and I know you can sell your timeshare too, but how easy or hard is that to do? What prevents HGV from changing the program so that my $80/night hotel rooms remain that cheap in the future?
Once we said no, Kessy, a German-born Orlando transplant visited our table. I name her, because our sales rep, Johnny was great and I can’t rememeber the closer’s name but he was neither bad nor good. Kessy put in front of us an opportunity to buy a week at one of their properties for $1,795 and use it within two years. This was higher than the annual maintenance fee, but allowed us some more time to interact with the brand and decide if it was for us. In addition we would receive another 10,000 HGV points and if we chose to buy our timeshare package after we purchased this $1,795 stay, that amount would be credited to our purchase price making both the points and that week essentially free.
However, I get calls once a week from Hilton making a 5-night offer for $199-399 depending on which destination. It seems stupid – unless you ultimately think you’ll buy the timeshare package – to take this one. We very, politely but clearly, declined. Kessy closed the book sharply, stood up and motioned for us to follow, then walked us toward the front. In a very condescending tone, she was incredulous that we didn’t take her up on her offer and said “take the elevator down and they will give you whatever you were promised.” She disappeared before I could close my dropped jaw.
If it feels like a scam, it probably is.
Downstairs, we were informed that the points would make it to my account in about 6-8 weeks though they were in my account that day. The $100 Hilton stay-on-us certificate requires you to pick your brand in advance and upon reading the terms and conditions is actually put onto a prepaid debit card sent in the mail about 6-8 weeks after checkout. Fun.
I was shocked to find there was actually a case to be made for buying a timeshare. It wasn’t due to the actual timeshare at all, it was a perk that I doubt Hilton has had anyone really game. We were uncomfortable, despite finding value, in the approach – buy now, or get out – and if it were a real estate purchase, would never be rushed in the same way.
What do you think? Have you attended one of these presentations? Were you aware of this perk and could you find value in it?