Saturday, July 28, 2007

$41K for 7000 Points

Two years ago, I attended a tour at a local golf resort. It turned out to be a sales seminar for timeshare. In exchange for two hours of my time, I was compensated with a $125 Costco gift card.

Even though the tour should have been only 90 minutes, but the sales people were dragging on while trying to make a hard sell. When I started to point out the mathematical errors in their brochures in front of other clients, I was quickly whisked away by the sales people. I have never thought they would invite me back again and try to sell me the same vacation package.

Apparently I was wrong.

Two weeks ago, I received a phone call from Shell Vacations Club. Youngman on the phone was polite, informed me that they would like to have me retour the facility, and this time I will be compensated for $150 Visa Card.

Sure, I will attend your tour. Why not? After all, they are the ones paying me and they probably already know I would not buy.

I personally do not belong to any vacation club, nor own any timeshare. I don’t have any strong feeling regarding the matter, but what I do find interesting is their sales process, plus I consider myself some of an economics geek.

Shell Vacation Club - Phoenix

I arrived on site promptly last Saturday morning. After signing in, a gentleman named Jay introduced himself to me and we went sat down to chit chat in a very casual manner. For next hour or so, Jay wanted to know about my travel habit.

Since summer of 2004, I have spent two weeks in Costa Rica, a few days in Germany, two months in Austria, two weeks in Montreal, and a week in Vancouver, plus several weeks here and there within US, I have logged some serious mileage on my passport and frequent flyer programs.

“What do you know about vacations club programs?” Jay had a sparkle in his eyes and presented me laminated sheet with a price table. “Let’s say you spend on average of $100 per night, after twenty weeks including tax and inflation, you are looking at about $42000.”

That is a lot of money.

However, I have always gotten great deals through various travel websites and rarely paid $100 per night. When I was in Costa Rica, I paid $70 (or $40 in cash per night, the good ol’ cash only discount) per night in a beautiful villa; I even had a maid to personally cook breakfast and do laundry for me. Just to be fair, due to weak American dollar to Euro conversion rate, I could never have the similar luxury when I am in West Europe.

Jay says Shell Vacations Club has hundreds of locations over the world, but when I told him my top destination is Easter Island. There is no affiliated resort there. How disappointing. But, there are some resorts in Guatemala.

When I pointed out to him that when traveling through Central and South American countries, since American dollars are much stronger there, there is no need to spend $100 per night. He then countered with “my friends were kidnapped in Guatemala and held hostage for days. You know what they have in Guatemala? They have militiamen walking around in the streets with machineguns…”

After a short promotional film showing happy vacations club members telling how great the program is, coincidentally, a couple at next table some how changed their mind after the film and decide to purchase a vacations club package. This has brought great excitement to the room, champagnes bottle was out to toast their giant leap into the next level of vacation bliss.

If I sign up today and for today only, for $41,000, I could purchase a package of 7000 points. If I don’t the lump sum of money, I am pre-approved with their finance department for a down payment of $4,239.90 and monthly payment of $660.58 for next ten years at interest rate of 17.65%. Oh, by the way, there is an annual maintenance fee of $1,300. Also, the point’s value of nightly stays varies depending on resort’s location and travel season.

Shell Vacation Club - 7000 Points (3of3)

Shell Vacation Club - 7000 Points (1of3)

Shell Vacation Club - 7000 Points (2of3)

I told Jay I am not interested based on the following:

1. The price is too high to justify its value.
2. There are too many unknown factors about the points system.
3. It is insane to make a $41,000 financial decision just after one hour of sales talk.

No problem, Jay thanked me for my time and called over a young lady. Right away, this reminded me of desperate car salesmen using the “let me see if I can get you a better deal” trick by dragging in their sales manager to negotiation table trick.

The young lady claims she understood my concern regarding the price, and quickly threw some number together on a sheet of paper.

“How about if we can get you a package of 2,500 points at $13,000, but I am going to throw in an extra of 6,000 points for free to get you try this out? How does that sound?”

I smell some thing fishy and it is not coming from the smoked salmon on the breakfast buffet table.

Once again, the young lady and Jay thanked me and asked Kurt to get my prize for me. And Kurt tried to sell me another package more points at even lower price. I am still not interested.

Finally they gave up and had someone from their accounting department to give me a mail-in voucher for $150 Visa gift card.

While waiting for the voucher to be printed, I saw a couple with “Not Qualified” written on their application. Poor suckers, they actually wanted to sign up.

Update: My buddy Matt said when he was in Las Vegas and he attended a similar thing, one couple in the group was talking really loud. The husband did not want to buy, however the wife eventually convinced him of how great it was and they eventually did buy. It turned out they were hired actors planted in the group to hype sales.

Sunday, July 1, 2007

42 MPG Experimental Vehicle

I was driving on US60 just east of Apache Junction and saw this strange vehicle.

"42 MPG Experimental" (1of4)

The owner has chopped most of his mid 1980s model of Toyota Corolla off to increase the vehicle's gas mileage. On both fenders, he has written "42 MPG Experimental" in black markers.

"42 MPG Experimental" (4of4)

"42 MPG Experimental" (3of4)