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Your Location: Timeshare Users Group Advice:  Interview with CEO of SFX exchange company   |updated: 5/23/08

TUG Interview with Mel Grant of  SFX

The San Francisco Exchange Company (SFX) provides exchange services to timeshare interval owners. The following is a question and answer interview conducted by John Fletcher (aka: Fletch) of the Timeshare Users Group with Mel Grant, CEO of SFX. The purpose of which was to answer some basic questions about how SFX operates and how a timeshare owner could benefit using the services provided by SFX.  Date:01-April-2K

1- How far in advance of the proposed trade should we make our request in order to optimize our chances of success?

SFX: It all depends on where and when you are traveling. If you want to exchange in prime time in a highly demanded location, because the demand is far greater than the supply of space, you should place your request at least 8-12 months in advance. If you are requesting the slower periods, then we recommend 3-7 months in advance. These are not absolutes, just recommendations. The key to successful exchanging is, your ability to be FLEXIBLE.

2- If SFX offers free upgrades, i.e. you deposit a 1 bedroom unit, you get a 2 bedroom unit in exchange, if available, are there any benefits to offering two bedroom units up for exchange?

SFX: Because there are hardly any whole three-bedroom units at resorts, an upgrade in size from a two bedroom is not a realistic proposition. However, one of the main benefits of banking a two-bedroom unit is higher trading power than those offering smaller units from the same resort and season. (There are other factors than unit size and season that determine trading power).

3- If a depositor makes a request for a resort not currently in the SFX pool, how does SFX try to obtain the resort outside of waiting for a deposit?

SFX: In this instance, SFX would aggressively seek the space through its network of strategic alliances, which includes developers, cooperating exchange companies and resort management.

4- If ten depositors with different trading power have made somewhat similar requests (there can be some variance in that some have asked for a specific resort while others have asked for a region, some have asked for a specific week while others have asked for anything within an entire season), what factors determine who gets a resort that fall within every depositor's parameters?

SFX: Assuming a deposit first was made. Keep in mind, virtually all resorts we use have very high demand, although there is some variation. Each item has a value assigned. These valuation numbers are confidential corporate information and not available to the public or trade. The values are totaled to give an overall value, and this is the number that determines the trading power.

    1. Date request is taken
    2. If other requests for the same area/resort and travel dates come in that same day, then.
    3. Supply and demand for the resort and area relinquished
    4. Occupancy based on private sleeping areas /size of unit
    5. How far in advance of the check in date of the deposited week was the week banked. Members, who bank early, get rewarded with a higher value.
5- Your letterhead lists a number of resorts not associated with RCI or II (for example, Ft. Marcy in Santa Fe). Can you describe your association with these resorts?

SFX: We have always felt that our members should have access to as many different quality vacation experiences as possible. For example, for a long while we were offering split weeks between Vienna, Salzburg and 13th century castles that were operating as luxury hotels. Our associations with these resorts are specially negotiated arrangements that give SFX and its members a well-rounded vacation portfolio.

6- Can you describe your association with your English affiliate? Specifically, if a resort is deposited with your affiliate, does it immediately become available to SFX or only after your affiliate fails to make a match within their system? Is there a timeframe before it becomes available to SFX?

SFX has an affiliation and very close relationship with UKRE (United Kingdom Resort Exchange). When a UK week is deposited with UKRE, as a rule, they naturally assign that unit to one of their own members if there is a request for it within their system. Depending on the season deposited and supply and demand factors, SFX will have access to that week anywhere from seven to thirty days afterwards. There are many instances where SFX will give UKRE a request for a week and through the strategic alliance, they negotiate the weeks needed.

7- Is each week assigned a trading power valuation at the time it is deposited, which will then determine where it falls in the queue for receiving an exchange week or do you merely use a first-to-deposit/first-to-be-matched system?

SFX: We use a trading power valuation of which one of the most important factors is the date the unit was deposited by the member.

8- If I am a Marriott or a Royal owner do you suggest using SFX to go back to one of my resorts or should I stick with II since they have more inventory?

SFX: As a general rule, because I.I. handles the internal exchanges for the Marriott in the exact instance you describe, we would recommend that you use I.I. for the exchange especially as Marriott Owners have first pick at other Marriott resorts.

9- Does SFX charge up-front exchange fees before being confirmed?

SFX: No, we only charge an exchange fee when you are confirmed.

10- Why doesn’t SFX accept all resorts like the other exchange companies do?

SFX was specifically created to be a small specialized network only servicing Owners who own in five star equivalent rated resorts in prime demanded national and international locations. We are picky about the weeks we accept because our customers demand a certain quality and standard of resort. The quality of an exchange given out to a member, is only as good as the quality of weeks you accept as deposits.

11- Are there certain areas of the USA that you have a larger inventory or a smaller inventory based on past deposits?

SFX: Our agenda as a specialized exchange company, is to work in areas of high national and international demand, rather than regionally demanded areas. SFX has done quite well in almost all the areas that we have this market demand for. Generally our market demand in the USA is for Hawaii, California, Oregon, Colorado, Nevada, Arizona, New Orleans, Florida, Hilton Head, Myrtle Beach, Virginia and New England States.

12- When do you anticipate your new web site will be ready, and can you tell us any more about it? Will it be accessible in Canada?

SFX: We anticipate our new website will be ready by the end of June of this year. It will allow members to log on and access their account to view all activity from requests, confirmations, amounts paid, place requests, amend requests, check on request status, deposit weeks etc. There will be a directory of recommended resorts, promotional specials sell-off lists for last minute great bargains. To the best of our knowledge, a web can be accessed from any country.

13- With RCI going to GPN, is SFX thinking of expanding their perimeters in include more areas?

SFX: Regardless of RCI’s GPN, SFX is expanding. Our market demanded areas are the USA, Canada, Mexico, Caribbean and Western Europe. We will be expanding our growth within these zones.

14- How do you determine which deposits merit a bonus week?

SFX: Bonus Weeks are offered from time to time as an incentive to deposit in a timely manner, to those who own in very highly demanded resorts in prime time.

15- When you deposit, when is your use time i.e. 2 years from date of deposit or 2 years from start date?

SFX: Your use time starts from the time we receive your deposit and up to two years past the arrival date of your deposited week.

16- What market does SFX go after, what plans if any is there to expand so that more resorts from around the country/world will be included

SFX does not desire to become a major exchange company. Although we are about to go through an aggressive growth period over the next couple of years, we will always be specialized catering to certain market segments. We are constantly approached by various developers of high quality resorts from around the world, and often find ourselves in the embarrassing situation of declining their business, because the demand from their members for our existing portfolio of resorts, would be far greater than our members demand for the countries and locations in question. This is very important in balancing an exchange companies inventory of space.

17- Please explain why SFX takes certain resorts & weeks sometimes and not all the time

SFX is a specialized exchange network that carefully utilizes supply and demand factors in balancing its inventory of space. SFX always accepts deposits in highly demanded resorts, seasons and areas. If the week is a great resort and location, but the week being offered is perhaps off-season and therefore has low demand, we will only accept that week if there is a request for it. However, we are gradually moving to a policy of accepting an off-season week deposit in a great resort, and restricting the member to an off-season exchange. Like for like, which is a fair exchange.

18- Is SFX switching to a points based system?

SFX is in development of a universal points based platform. We will start beta testing within the next few months. In the event that RCI and I.I. become fully operational with their points based systems, SFX will have no choice but to bring their system to themarket place as an option for the customer. Our members will have the choice of using the conventional weekly exchange system, which we are finding that most of our customers prefer, or the can use points. Should we release our points base system, although no final decisions have been made, we may offer owners of weeks a conversion to points for no upgrade fee.

19- With RCI and II having much larger inventories, would one would be better off going to them for an exchange than one of the smaller exchange companies?

SFX: Not necessarily. You have to keep in mind that between them, they also have several million members competing for that premium space. Comparing SFX to the major two exchange companies is like comparing apples to oranges. Although there are some similarities, there are many differences. SFX is specialized and is not a broad band exchange service to the world. As a specialized niche market service, SFX has essentially created a strategic alliance network between many premium resorts. This may allow you to exchange into places that can be extremely difficult through conventional channels.

We have always advocated that we are not a replacement for the major companies. SFX is a specialized enhancement network, which can help you improve the possibilities of being confirmed for a great exchange. Keep in mind, if you belong to one of the big two, for the most part you are restricted to only using the resorts in their directory. With SFX, subject to availability, you can access resorts in both systems. Why restrict your ability to exchange by using just one system, when you can expand your access through SFX.

At the end of the day, all exchange companies do their best to provide you with a great vacation exchange. It’s the job we chose to do. There is not one company that’s better than the other, they are all as good as you allow them to be, by virtue of how flexible you are with your requests.

Thank you for allowing me the opportunity to answer your questions. We sincerely hope that this information helps you.

Mel Grant
President & CEO

San Francisco Exchange Co.
Corporate Office: 221 Main Street, Suite 945 - San Francisco, CA 94105
Tel: (415) 979-0870 - Fax: (415) 979-0880

Customer Service: (800) 739-9969 - Fax: (415) 979-0880
Mailing Address: PO Box 192013 - San Francisco, CA 94119
E-mail:  vacations@sfx-resorts.com
Web Site: http://www.sfx-resorts.com/index.htm

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