he two major exchange companies are Resort Condominiums International (RCI) and Interval International (II) , plus an increasing number of smaller independent companies . The exchange companies operate somewhat like a "timeshare bank", allowing you to "deposit" your timeshare and "withdraw" another one located somewhere else. The system has traditionally been one of supply and demand, trading like for like. In its simplest form, you exchange your 2-bedroom in the summer for a 2-bedroom in the summer somewhere else. In reality, the formula is increasingly complicated and the companies use sophisticated computer systems to match demand with supply, establishing the "value" of different weeks in different resorts. Weeks are rated according to a sliding scale of factors, such as size of unit, duration of stay, time of year, resort location, resort quality, ratings by consumers, etc.
The exchange companies charge an annual fee for membership, plus fees for domestic and international exchanges and other fees depending on what you want from them.
In addition, RCI has developed its own "points club", RCI Points , whereby members can convert their Weeks ownership into points and use those points like currency for resort occupancy, airfares, cruises, car rentals, etc. In this system, the timeshare owners "give" their weeks to RCI for a set number of years in return for points. The more Points you purchase, the greater your exchange and other usage possibilities. The Points and Weeks systems are kept separate from each other; RCI Points members can exchange for Weeks units, but Weeks owners cannot exchange for inventory in the RCI Points system. Conversion sales are handled by affiliated companies, certified "brokers", which will charge whatever the traffic will bear.
The exchange companies also operate their own travel agencies, offering members flights, car rentals, cruises and travel insurance, etc. at competitive prices.
RCI: ( http://www.rci.com ) Christel and Jon DeHaan invented the first exchange company, Resort Condominiums International (RCI) , in 1974. They correctly figured that if timeshare owners were able to trade their week for a week somewhere else, it would increase the perceived value of the product and more people would buy. This relationship among RCI/developers/timeshare owners proved to be symbiotic, wherein each entity profited by the existence of the other two.
When the DeHaans divorced in 1989, Christel bought out Jon's half of RCI. In 1996 she sold the company for half a billion dollars to Hospitality Franchise Systems, Inc. , which merged in December of 1997 with CUC International, Inc. The company created by that merger, Cendant Corporation , owns RCI today.
INTERVAL INTERNATIONAL: ( http://www.intervalworld.com ) In 1976, Miami attorney Thomas J. Davis, Jr. and former accountant Mario Rodriguez formed Interval International (II) specifically to compete in the timeshare exchange marketplace. They marketed the company as a more upscale alternative to RCI.
Davis left Interval International in 1982. Leaguestar plc , a London-based holding company supported by European institutional investors, purchased Rodriguez's interest in 1988. In 1992, II became a wholly-owned subsidiary of CUC . When CUC and HFS merged in 1996, anti-trust concerns were raised because both of the major exchange companies resided under the same corporate umbrella. To mitigate those concerns, Interval International was sold in December of 1997 to an investment group formed and controlled by Chicago-based investment partnership Willis Stein & Partners, L.P. ; a group of II's senior executives; and a consortium of hospitality firms consisting of Carlson Companies, Inc.; Hyatt Vacation Ownership, Inc.; and Marriott Ownership Resorts, Inc.
In 2002 the company was purchased by USA Interactive , now renamed InterActiveCorp (IAC) , owned by Barry Diller . Carlson, Hyatt and Marriott no longer have an ownership interest in the company, but they continue to affiliate their resorts with II.
Mario Rodgriguez, who was known as the industry's goodwill ambassador throughout his life, passed away on March 25, 2003.
INDEPENDENT EXCHANGE COMPANIES:
In addition to the Big 2, several smaller exchange companies have been independently developed over the years. These companies are beginning to see larger opportunities for growth as dissatisfaction with the Big 2's policies and/or exchange fees grows. The following is a list of Independent Exchange Companies in alphabetical order along with their Web site addresses:
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