An offer arrives with the monthly credit card statement at an opportune moment: Stay at a fabulous Palm Springs, Calif. resort for three nights for just a few hundred bucks. It’s been just about the coldest Chicago winter I can remember, so my husband and I look at each other and grin: Spring Break!

We call, and of course, it’s a timeshare presentation we have to sit through. No problem. We negotiate for a bigger one-bedroom suite with a full kitchen and extend the stay to a full week. On a hot and sunny day in the third week of March, we sat through what turned out to be a nearly 3 1/2 hour full-court press for a timeshare purchase.

Why do so many people buy timeshares? If the presentation they sit through is anything like the one we sat through, the answer is easy: It’s compelling and overwhelming.

The latest generation of timeshare pitches is all about vacation points. You buy a specific number of points that typically correlates to a certain size unit in a particular development. The idea isn’t that you’ll use a specific unit every year during the same exact week (that was the old timeshare concept). The new idea is that you can use any unit in a specific resort or various vacation resorts in the network or even convert your right to stay for that week in your resort to points in a hotel point program that are usable at hotel resorts in the hotel chain.

The most expensive option we were offered at the sales center of the Westin Mission Hills, in Rancho Mirage, Calif., was one week in a two-bedroom, two-bath attached unit (it’s two unique one-bedroom units attached through a doorway) for about $40,000, plus about $2,000 in maintenance fees (including a $109 fee to the vacation resort network, and a 1 percent real estate tax) for the rest of your life.
(Actually, the obligation to pay the annual maintenance fee continues in perpetuity, which is similar to old-school timeshare deals.)

The $40,000 buys 148,100 vacation points in the Westin Vacation Ownership network. That’s equal to the deed to one week (51 weeks are sold, with one week scheduled as maintenance) of an approximately 1,500 square foot, two-bedroom, two-bath connecting villa. Each side of the villa is a complete one-bedroom unit, including a kitchen, bath, and outdoor space.

In a hallmark of the new timeshare offerings, you can use your points in a variety of ways. You can blow them all at once and get the two-bedroom villa for a week, or you can use some of your points for half of the unit (the one-bedroom suite we stayed in, or the smaller one-bedroom suite for even fewer points) or trade all of the points to stay in a different, equally fabulous resort in the network. Depending on whether you use your points during a resort’s “high” season, you can make your points go even further: For example, I could get one week with both units in high season at the Rancho Mirage resort, or I could stay for up to five weeks in the larger one-bedroom unit in the dead of summer.

If you want to upgrade further, you can go to other resorts in the vacation resort network such as the Hawaii or Steamboat Springs resorts.

One final option: You can pay $99 to transfer all of your vacation resort points to Starwood hotel points (Starwood owns Westin) and stay anywhere you want in the world at a Starwood-owned hotel property.

The question we were asked by a Westin vacation sales manager is “Would you spend $80,000 on vacation over the next 20 years?”

The math figures out like this: $40,000 (not including any finance) plus around $40,000 in maintenance fees (assuming they don’t go up) over the next 20 years = $80,000.

And as you survey the lush grounds of the resort you’re at plus the fabulous locations of the other resorts in the network, you’re supposed to say, “Of course.”

I do some fast back-of-the-brochure calculations and estimate that the 1,500-square foot unit is being sold for an astonishing $2 million, or a bit over $1,300 per square foot. The finishes, which in my unit were already showing signs of wear, aren’t quite up to $1,300 per square foot standards, although the resort itself is very nice.

What’s really going on is the same kind of pay-for-miles game the airlines play. Depending on which airline you like to fly and which credit card you link to your frequent flyer account, you get one mile for every dollar spent. If you buy miles directly, you might pay 2 or 3 cents per mile. Here, you’re essentially paying $4,000 per year (for 20 years) for 148,100 Starwood Vacation Ownership points per year. For $99, those points can be converted yearly to Starwood hotel points. The conversion is slightly more than one point for one point.

Can you make it pay? Sure, but as with everything, some folks will be better at it than others. Our sales manager, a lovely woman named Christine, tells us 12,000 people have bought at the Rancho Mirage Resort since the early 2000s. (The Rancho Mirage resort is actually sold out and the timeshare we’re being offered is actually in The Westin Desert Willow Villas, in Palm Desert, about a 10-minute drive from Rancho Mirage.)

There are thousands of additional buyers in the Starwood Vacation Ownership program. There are less than 1,000 units currently available at the Hawaii property. What happens if everyone wants to spend their points on Christmas week in Hawaii? Or, Steamboat Springs?

Some people will remember to book 12 months out, and others will be disappointed that their weeks of choice are filled and will have to use their points at different times. There are no guarantees on weeks (unless you specifically buy a Christmas Week timeshare option, available at only a few locations for a far higher price), and no guarantees on location. And if you’re able use some of your points, but not all, the transfer option still exists for $99.

I ask what the procedure is for selling a timeshare unit. Our sales manager tells us that only about 300 units have been returned to Starwood out of 12,000. She shows us a running list of about 20 Rancho Mirage units for sale, none of them at the premier 148,100 level. To preserve the price, Starwood requires owners who want to sell their units to list it with the sales office. Units are listed at the current price being offered. Sellers will receive the price minus a 20 percent commission. If you don’t list it with the Starwood Vacation Ownership network, your buyers will lose the option of using the points elsewhere and converting them into Starwood hotel points, rendering them much less valuable.

While no one says the word “investment,” it’s clear that if you bought your points five years ago, and sell them now, the price has jumped by about 33 percent. Even after you pay the commission, you’d get a chunk of change and would have vacationed nearly for free.

Since the unit we were being offered at Desert Willow wouldn’t be available until 2011, we were offered some extras to sweeten the pot, including: Becoming a Starwood Gold Member for life; 120,000 extra hotel points (retail value, we were told, of $7,000 to $8,000); and, the opportunity to buy another 80,000 hotel points for $1,550 (which we could convert into 100,000 worth of airline miles).

After we gently decline all of these compelling offers, we’re handed off to Ken, who tells us he works for Westin. He gives us our exit interview and in the end has just one more offer for us: For about $1,800, we can come back to the Palm Springs Westin whenever we want for 4 nights (no blackout dates!) and we’ll receive 50,000 hotel points (enough for 8 nights at a Westin hotel in Italy, he says). If we put down $300 today, and then pay the rest on a monthly basis (with no finance charges!) on our credit card, we’ll preserve all of the extra special deals we were offered on Monday. Otherwise, he warns us, we’ll never get these offers again.

Again, it’s a compelling offer. Ken tells us that he’s certain if we come back and stay again we’ll say “Yes.” We say “Thanks, but no thanks.” The numbers just don’t work out. When we travel as a family we either spend a lot less on hotels or lodging than $4,000 per week or we’ll stay at more exotic destinations. (By the time we get home, my husband had more email offers for vacation destinations from Starwood. Gotta love the marketing!)

We shake hands with Ken, and take our $100 resort gift card and walk out. But as I walk down the steps back into the 80 degree heat, I can easily see why so many people would say yes – and why most folks would be far better off saying “No.”

April 3, 2009