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96 terms

HFT 3273 Timeshare Midterm

STUDY
PLAY
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