I am a Vistana timeshare owner (formerly Starwood) who occasionally uses RedWeek to rent my timeshare. I just received an email from Vistana announcing a new fee they are going to charge owners who transfer the names on their reservations to third parties. This seems arbitrary and unfair. Is this fee reasonable? Do other companies charge similar fees?
RedWeek.com has a vested interest in these questions, since many of our subscribers rent their timeshares to recover some or all of their maintenance fees. So we contacted Vistana's corporate officials as well as rank-and-file timeshare employees who handle owner reservations. To be fair, we also contacted other brand-name timeshare companies to find out what they charge owners, and why, for the simple task of changing the name on a reservation. You may be surprised, if not startled, to learn what we discovered.
Vistana Stands to Make Millions from Owner-Rental Fee
On Jan. 25th, Vistana Signature Experiences, the newly branded owner of the Westin and Sheraton timeshare chains, sent owners a "Happy New Year" email that said, "effective Jan. 26, a $59 fee will be applied any time an owner transfers their Vacation Ownership Interest reservation to a third-party guest. This is a result of the volume of requests we receive for these transactions and the resources required to provide this service."
Simple enough, on its face. Vistana tacks a new fee on owners to cover some program cost. Depending on an owner's level of ownership, the fees range from $39 (5-star) to $49 (4-star) and $59 (3-star). Small change, in the big scheme of things to owners whose maintenance fees (in Hawaii) approach $3,000 per year. But to Vistana, from a corporate standpoint, these fees figure to generate a multi-million windfall as thousands of owners swap-out their names for those of friends, relatives, or renters.
The "third-party guest" fee was announced by Suzanne Clark, Vistana's vice president of owner services. RedWeek asked Vistana for an interview with Clark, but they declined. We wanted to know straightforward things, such as: how much does it cost Vistana to process reservation name changes? What's the volume? How much money does Vistana expect to make from this program in 2017? Rebuffed at the corporate level, RedWeek contacted Vistana's owner services hotline to query the reps about the new fee. Here is what they told us.
Currently, owners must call owner services to make a name change, but Vistana is about to launch an online process so owners can make the changes, and pay the fee, without contacting anyone at Vistana. This suggests that Vistana's real cost of processing name changes is zero.
At Vistana and other timeshare companies, the volume of rental-inspired reservation name changes is skyrocketing. A couple years ago, the typical owner services rep at Vistana would handle one or two requests to change reservation names per week. Now they average 5-6 per day. The owner services office houses 30-40 reps at any given time, seven days a week. When you start adding and multiplying all these numbers by $39 to $59 per name change, you end up with some whopping figures. For example: Using the lowest possible fee as a baseline, with 30 phone-reps handling six name changes per day, the $39 fee would generate $7,020 per day. Multiply that by 365 days in a year, and Vistana receives $2.5 million from the innocuous reservation name-change fee. The real number may be much larger, as well, since many owners will pay a $49 or $59 fee.
When asked why Vistana was imposing the fees, an owner services rep responded, without prodding, "because others are doing it."
We gave Vistana's corporate representatives several opportunities to confirm or dispute these calculations, but they declined. We know the company keeps exact track of reservation name-changes, however, because Vistana's owner services folks said they re-code every reservation name change (the re-coding no doubt helps Vistana's sales operation target new non-owners for sales presentations during their vacations).
RedWeek submitted the same questions to other major timeshare companies, but they generally chose NOT to answer them as well. But they were forthcoming about their fees, or lack of fees, and conceded that their name-change business (if it can be considered a business) is booming.
Disney, Marriott Do Not Charge Fees for Name Changes
Here is a roundup of how the other companies handle name changes to non-owners and renters.
- Disney Vacation Club places no restrictions on rentals and charges NO fees for reservation name-changes. Owners can call the club to book reservations for their guests, or make the changes online. "It's your property, so you can do what you wish with it," said one very upbeat DVC rep.
- Marriott Vacation Club doesn't charge owners for name changes, either. Their process is similar to Disney's. Their volume, anecdotally, is 10 name-change requests per day, per owner rep.
- Hyatt Residence Club requires owners to request-and-buy a Guest Certificate for renters. The cost is $30 online, $36 if done by phone.
- Diamond Resorts has a tiered program that includes some "free" name changes plus a $35 fee after the free guest reservations are used up. Basic members get one free name change. Silver, Gold and Platinum members get more freebies, but then must pay the $35 fee for additional guest reservations.
- Wyndham's program is similar to Diamond's but more expensive. The company said it provides owners with "many" complimentary guest reservations that vary depending on the level of ownership. Once the freebies are exhausted, owners must pay $99 for an online name-change or $129 if booked over the phone.
Here is one final piece of information that owners may want to check out when renting their units. Many timeshare contracts contain boiler-plate language that say, in effect, timeshares are for an owner's personal use, only. Some explicitly prohibit renting timeshares for commercial gain. Though, we think it would be difficult to argue that any timeshare owner, renting their week or not, would see a "commercial gain" on their investment.
On Feb. 10, Vistana contacted owners again to announce an alteration to the brand-new name-change fee. Here is what the company said:
"You will NOT be charged the fee to transfer your reservation to a third-party guest during the Home Resort Reservation Period (12-8 months prior to arrival). The fee ONLY applies to a third-party guest reservation booked within the VSN Network float period... starting at eight months prior to arrival." Vistana also said, "once the fee has been applied to a specific reservation, any further name changes to that reservation will NOT incur an additional fee. Third-party guests include friends and family members NOT listed on the ownership deed or contracts."
Clear? If not, owners are advised to call Vistana at 888-786-3548.
What do you think of these new fees Vistana is charging, and other apparent attempts by developers to restrict a timeshare owner's ability to rent? Leave your comment below.
