In Europe, no military service member would rarely, if ever, lose their military career over a timeshare loan default. The reasons why were covered in a response to an article about America’s Military Lending Act.
This past Wednesday, we heard attorneys arguing about whether a timeshare loan is the same as a residential mortgage. Thinking about semantics being debated today in American courts, with nothing less than the stability and retention of America’s armed forces at stake, took us back to March 24, 2016, when we published an article entitled:
Is it a Timeshare Resort or a Hotel?
How many times we’ve heard members begin their complaints:
He said he wasn’t a salesperson. (Then proceeded to sell an upgrade)
It’s not a timeshare. It’s a “Vacation Club.”
Due to the tarnished reputation timeshare has brought upon itself, thanks to sales agents “pitching heat” a term sale agents themselves use in America to describe the deliberate deployment of unfair and deceptive marketing and sales practices – we continue to discuss semantics.
In the 2016 article, we brought up the issue of disappointing availability for members or owners who spent thousands upfront. A Declaration, pertaining to a lawsuit filed against Wyndham Vacation Resorts/Travel & Leisure, publicly filed by a former Wyndham executive of 19 years, is included at the end of today’s report, unedited. It elucidates in perfect clarity, how inventory is manipulated.
Back to Semantics: The following facts blur the line between a timeshare and a hotel:
In 2016, resorts around the Canary Islands, Mainland Spain and Mallorca, a “timeshare” could be booked by non-members on the following sites: Booking.com; ebookers.com; trivago.com; villas.com; medresorts.net and tripadvisor.com.
Many had websites direct to the resorts offering quite substantial discounts. Entering dates for availability and price came as a bit of a shock. In many cases, it seemed that the prices were less per week than many owners are paying in maintenance fees, not even taking into account the thousands paid to buy it in the first place.
Timeshare was originally sold as an exclusive membership, with people being told that only other owners could use them and the facilities. The fact is, that non-owners are able to book into their resorts and sometimes for less cost than members.
Is this legal let alone ethical?
Timeshare Insider, March 24, 2016
According to one Spanish Lawyer who commented at the time, it appears this may not be legal. He stated that the double business, hotel & timeshare resort/club was not allowed unless they were fixed weeks and apartments. This would make sense, as unsold weeks are spare inventory so could be rented, but it is the points system which causes concern. As a points “owner” you do not have a fixed week or fixed apartment, all the inventory belongs to the management company, by renting any of these weeks as a hotel is actually taking availability from members.
We also have to remember that many hotels “lease out” sets of rooms/apartments to tour operators such as TUI as well as timeshare, Sunset Beach Club on the Costa Del Sol leases out a section to Diversified Resorts, the hotel is actually owned by the Irish Farmers Union.
So a hotel leasing out to timeshare is fine, but if a timeshare resort is not fixed weeks and apartments but solely a “Club” with points, then that could be bordering on illegal under Spanish Law. (We have yet to find a case specific to this).
Has this come about because of the dwindling number of people wanting to own timeshare, or is it the resorts just getting greedy?
Many people who own points or floating weeks have told me that getting the availability to the resorts they want is difficult and, in some cases, impossible. Is it because of these rentals?
So, on one hand the resorts get your maintenance fees, and on the other hand, extra income from renting out. Not a bad business to be in, is it!
Thanks to the age of the internet timeshare has become a rather expensive holiday option. Gone are the days when the sales staff could say at least you are guaranteed a certain standard, or use the old financial logic pitch. Yes, in those days being tied to the high street travel agent was expensive for decent accommodation, as for the package deals, well, did you know where you would stay until arrival and what condition was the resort/hotel? Yes, we all remember those horror stories.
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE, Plaintiffs STEVEN ERIC KIRCHNER, ELIZABETH LEE KIRCHNER, and MARCIA RICHARDS, Individually and on behalf of all persons similarly situated, Plaintiffs, vs. WYNDHAM VACATION RESORTS INC., Defendant. No. 1:20-CV-00436-RGA-JLH Filed 7/15/2022
Pursuant to 28 U.S.C. 1746, Danielle Henderson declares:
l . I was Vice President, Resort Operations with Travel + Leisure Co. (T L), formerly Wyndham Destinations Inc., the parent company of Wyndham Vacation Resorts Inc., until my departure from the company in April 202 L T + L is the world’s largest vacation ownership business. Club Wyndham is one of the brand names of T + L.
- I was with T + L for nearly 19 years and served on the Club Wyndham Board of Directors before my position was abruptly eliminated, I believe my position was eliminated because I brought an integrity concern to the CEO, Mike Brown, regarding the Executive Vice President of Human Resources Kim Marshall and General Counsel, Jim Savina. My concerns were validated by other colleagues prior to my addressing it with CEO Mike Brown.
- To provide background, I was a top performer and respected leader within the company. Some of my responsibilities included overseeing multi-million dollar budgets, capital spending, quality controls, policies and procedures, systems, process improvement, new technology for Resorts and insurance claim management for over 180 locations. During my tenure, I worked in many different divisions which provided me with valuable experience and insight into how the business operates.
- To date, I have not accepted a severance package and I revoked acceptance of an offer made by T + L in August 2021. I am not receiving any compensation for the information I am sharing with PlaintiffS in this case. Everything I am prepared to testify about is common knowledge and documented within the organization. I reviewed this lawsuit (which was public) and I believe that I can assist in explaining a very complicated business model which will validate the PlaintiffS’ claims. There are also documents, databases, reports, emails, PowerPoint presentations, standard operating procedures and training content that will validate my testimony.
- I am prepared to testify that T + L improperly allocates and misappropriates owner inventory for its own financial gain, which severely reduces the availability of accommodations for owners. This is important because the Plaintiffs claim that they are unable to find availability on the Club Wyndham owner’s website, but they can find the exact same accommodations available when they searched on a third-party website like Expedia. T + L strategically decides which inventory (accommodations) to make available for owners; it takes desirable inventory away from owners and gives it to other “channels” that are profitable for T + L and drive in new owners to Club Wyndham.
- I am prepared to testify that T L intentionally overbooks/oversells Resort accommodations, which results in a reduction of what accommodations are available for owners. Owners who have reservations for a specific unit type may not receive what they booked because it will not be available due to overbooking of the property.
- I am prepared to testify that T + L misuses fixed week invent0ry by including it in its own inventory optimization strategy. It allows guests who are not the owner of the fixed week unit to occupy the unit dining the owner’s fixed time. Legally, fixed-week units are to be held for the owner for the entirety of the stay. T+ L is not compensating the actual owner of the fixed week unit when they “borrow” their inventory for another guest. This is important because it demonstrates how T + L improperly manages the inventory and what is available for owners to use.
- I am prepared to testify that CEO Mike Brown is aware of seven Customer Pain Points, one of which is specific to inventory availability. Mike Brown created this initiative and is responsible for its content. This is important because it demonstrates T + L senior leadership is well aware of the availability issue and continues to force owners to remain in their contracts even while knowing that its business practices are the direct causes of the problems being experienced by owners.
- To my knowledge, none of the foregoing is disclosed to owners before they sign their timeshare purchase agreements.
Further Declarant Sayeth Not.
- certify under penalty of perjury under the foregoing is true and correct. Executed on this day of April, 2022.
What is another word for semantics?
Semantics, the art of word manipulation, is used to very good effect by Civil Servants and Politicians, Marketing Companies and above all by the Legal Profession, we encounter it every day yet we don’t realise it. As you can see from the table above, the word “semantics” also has many other meanings, it is a case of taking your pick and hoping you have the right interpretation. We say interpretation because what this article has demonstrated is how timeshare sales agents have used it. You have all heard them call “Timeshare” “Vacation Ownership”, or the “timeshare resort” a “hotel”, so which is it, it’s all “semantics”. Confused yet? Good, so are we.
Yoda had a saying for the young padawan, “You must unlearn what you have learned.” This is a reference to using the “Force” in the fight against the “Darkside”, wise words until the “Darkside” commandeers it. The first thing sales agents are told after their initial training is ” You must unlearn what you have learned”, in other words, that was all theory, now for the real training, how to lie using “semantics”.
Have a great weekend, mine will certainly be filled with the exhausting task of keeping Baby Dog busy.