HFT 3273 Timeshare Midterm

Created by noidentity 

Upgrade to
remove ads

QUIZ 1

QUIZ 1

In terms of the U.S. economy in 2012, the timeshare industry contributed approximately how much total revenue.

69 Billion

Which of the following is NOT a facet of the timeshare industry

factory production

Timeshare owners have the right to enjoy the common elements of the resort whenever they choose.

False (Legally speaking, the owner only has the right when they are occupying the week they own.)

In a 10 unit resort with one week set aside for maintenance, how many intervals can be sold?

510

In the timeshare industry, the term interval and week are synonymous.

True

Week 6
Week 20
Week 26
Week 51
Week 52

-February 14 (Valentine's Day)
-May 28 (Memorial Day)
-July 4 (Independence Day)
-December 25 (Christmas Day)
-December 31 (New Year's Eve)

Which of the following is most descriptive of a fixed, fixed ownership?

Unit 101, week 7 (Fixed/fixed ownership refers to a specific week within a specific unit.)

Which form of legal ownership typically has the shortest term?

Leasehold

In which decade did timeshare flourish in the U.S. as a result of distressed condominium developments?

1970

In which decade did timeshare see increased credibility due to the entrance of major lodging brands?

1990s

In which case does the timeshare owner relinquish use rights of their allocated time..

rent, trade, exchange

The typical usage options for a timeshare product are:

Occupy, rent, exchange, trade

Which of the following timeshare products has the longest term of ownership?

Deeded (Fixed/fixed ownership refers to a specific week within a specific unit.)

All timeshare can be willed to an heir, regardless of legal ownership structure.

False

For a timeshare exchange company, the value of a week is determined by..

Resort quality, Unit size, season, resort amenities, supply

Generally speaking which owner will have the greatest exchange value for their week?

Aruba 2bdrm/2bath Platinum week owner at a resort with above average guest satisfaction scores

In the timeshare industry, the term "exchange":

describes the process whereby a timeshare owner relinquishes the use of what he owns for a period of time in return for the use of accommodations owned by someone else at another time and/or location.

Exchange companies do not own resort.

True

An exchange company affiliation is desirable for the developer because:

this feature enhances the value of their resort product by adding flexibility and vacation alternatives

Once a timeshare owner joins an exchange company, they only have to pay the exchange company dues and fees in order to make an exchange.

False (Remember the owner must relinquish their use of their week in exchange, so the fees and dues on the owned week (i.e., maint fee) must also be current.)

Exchanging to a resort that is not under the same developer is referred to as an internal exchange.

False

An owner of a 2bdrm floating unit fixed week has no interest in exchanging because the value is not there...

False (Not true. If they own a fixed holiday week, there is a lot of value there.)

What are the typical steps to make an exchange?

Pay all fees/dues related to the owned week. Pay all fees/dues related to the exchange company. Deposit the usage rights with the exchange company. Request the exchange.

The major exchange companies report a very high rate of confirmations in the range of 80 - 90%.

True

Exchange companies first came into the timeshare industry in which decade?

1970S

The federal Do Not Call registry has had no impact on the timeshare industry.

False

Timeshares can be sold as an investment according to the SEC.

False

The current industry average closing percentage is...

12.8%

In the typical timeshare sales process, approximately how many purchasers will rescind?

20-30%

Timeshare marketing may be more appropriately referred to as...

Lead generation

In timeshare sales, the term VPG refers to...

The average contract amount for all guests seen

In timeshare sales the conversion rate refers to...

The percentage of prospects who end up purchasing

In the timeshare sales process, whose responsibility is it to get the buyers in front of the sales executives?

The marketing department's

What are the typical steps to make an exchange?

Pay all fees/dues related to the owned week. Pay all fees/dues related to the exchange company. Reserve a week with the developer. Deposit the usage with the exchange company. Request the exchange.

According to guest speaker from Interval International, Jay Wilson, the average household income of their member base is higher than the industry average.

True

According to Jay Wilson, which is the preferred U.S. state members like to travel.

Florida

Which is NOT a benefit of an exchange membership?

Car Insurance

What is Interval International's new membership program:

Club Interval Gold

The origins of timeshare can be traced back to:

France

The 2000s brought the variation of products (example: point based system) in the timeshare industry.

True

The two major exchange companies are:

Resort Condominiums International and Interval International

Minivacs do not require the prospect to take a tour.

Minivacs can be hooked and unhooked

With a floating week I own a specific week within a season.

False

With a fee simple deeded product you own a specific week.

True

With a fixed, fixed the owner is not required to make a reservation to occupy.

True

OPCs are not required to prequalify owners before they tour.

False

What is the most expensive form of lead generation? Base your answer on the lead generation activity we did in class.

Central Marketing

If I need 300 tours, how many leads do I need if I have a show rate of 30%.

1000

QUIZ 2

QUIZ 2

During the timeshare sales process, financing is discussed during which phase?

Trial Close

In timeshare, the primary purpose of the incentive is to

Entice prospective guests to come to the presentation

Part of the role of a sales person is to:

Educate prospects about the timeshare offerings

Sales people belief that selling is:

10% product knowledge, 90% human relations

What is the average length of the pre-tour presentation

15 minutes

Rescission rates vary by state

True

What percentage of the industry sales are reload/referral

40%

After a sales presentation non-buyers are provided with options to try the product

True

On average timeshare owners own more than 1 week

True

Prospects that purchase a trial membership can use it within which timeframe:

6 months - 2 years

Which is part of the Sales Service Cycle

a. Understanding the vision
b. Industry Knowledge
c. Product Mastery

What is the cost of sales?

40-60%

On average how many sales presentations a timeshare purchaser attends before buying?

two

The role of the quality assurance manager is to:

Clarify any element of the contract

During the pre-tour stage of the selling process prospects are pre-qualified:

False

What is the order of the sales process?

Greeting/Registration, pre-tour, establish rapport, tour, make offer, contract, after sales servicing

While managing the sales cycle a sales director must first instill in their sales representatives:

An understanding of the vision

The timeshare industry uses a push sales strategy

False

The new timeshare consumer is more informed about the product because of:

Internet

Exit programs offers the non-buyer an opportunity to experience the timeshare at a reduced price:

False

Trial membership is one of the options for a non-buyer

True

On average what percentage of timeshare owners are satisfied with their purchase?

80%

Decision making efforts of individuals are driven by achievement, power and affiliation needs:

True

The only way to measure the success of in a timeshare development is by numbers such as VPG, cost per tour, number of daily tours.

False

The last step in the sales process pyramid is:

After sales servicing

Pre tours are only conducted one on one.

False

Rescission timeframe ranges from:

3-15 days

The sale process of a timeshare is the same for every prospect.

False

According to our guest speaker (Mary) the main reason people buy timeshare is because of the:

Sales Rep

The sales process starts the moment a prospects walk into the sales presentation.

False

Which are sources of industry information/trends:

a. Exchange company
b. ARDA
d. Developer

A TO (table operator) is used at which phase of the sales process?

Making the offer

According to the book, which one are negotiating tools to close the sale:

a. Price drop
b. Financing options
c. Discount for multiple week purchases

Vacation ownership can be sold as a real estate investment

False

Regulatory agenices

Federal Trade Commission (FTC)
--In charge of combating unfair and deceptive practices
--Oversees the standards for marketing practices

Securities Exchange Commission (SEC)
--Vacation ownership is not registered as a security
--Oversees that timeshare is not marketed as an investment

Internal Revenue Service (IRS)
--Oversees that tax considerations for the developer
--Deeded sales are favorable for the developer for tax reasons
--It allows them to report the gain and pay the associated tax over the period during which the payments are received

4 P's of Marketing

Place
Product
Price
Promotion

Additional Ps for Service
People
Process
Physical evidence

Timeshare Industry Legs

-Operations & management
-consumer financing
-Development & Sales
-Mortgage & Bank

Consumer Financing

Interest rate
More expensive than home loan

Down payment
Minimum 10%

Mortgage length
Average 10 years

Contract Docs

Purchase contract:
Purchase terms
Deposit/escrow
Default
Closing and title
Closing costs
Occupancy Rights
Exchange company disclaimer
Maintenance fees
Statutory cancellation/rescission

Contracts

Promissory note
--Promise to pay

Mortgage
--Creates a lien against property until paid

Truth-in-Lending Disclosure Statement
--Financing cost information

HUD guide
--Provides info on buying, financing & settlement

RESPA Disclosure Statement — Good Faith Estimate
--Estimate of service charges

HUD-1 Settlement Statement
--Outlines actual costs & fees

Transfer of servicing disclosure statement

Public offering statement (POS)
--Details about project, developer's obligation
----Association articles of Inc and Assc by laws
----Management agreement

Deed
--Title conveyance (seller to buyer)

Title Insurance
--Protection for buyer

Loan

-Loan servicing
In-house servicing
Third party servicing
Payment options

-Collection tools
Late notices
Telephone contact
Instant payment methods
Third party
Credit reporting
Skip tracing

-Default resolutions/foreclosure
Mortgage modifications
Cancellations
Deed in lieu of foreclosure
Foreclosure

Equal Credit Opportunity Act

No discrimination because of age, sex, marital status, religion, color, national origin or receipt of public assistance.

USA Patriot Act

Protects against money laundering

Truth in lending Act

Lender must disclose cost information (finance charges, APR) before consumer enters into credit transaction

Fair Debt Collection Practices Act

Protects consumer against collection harassment

Fair Credit Reporting Act

Accurate reporting of credit information

Please allow access to your computer’s microphone to use Voice Recording.

Having trouble? Click here for help.

We can’t access your microphone!

Click the icon above to update your browser permissions above and try again

Example:

Reload the page to try again!

Reload

Press Cmd-0 to reset your zoom

Press Ctrl-0 to reset your zoom

It looks like your browser might be zoomed in or out. Your browser needs to be zoomed to a normal size to record audio.

Please upgrade Flash or install Chrome
to use Voice Recording.

For more help, see our troubleshooting page.

Your microphone is muted

For help fixing this issue, see this FAQ.

Star this term

You can study starred terms together

NEW! Voice Recording

Create Set