WEBVTT NOTE This file was generated by Descript 00:00:00.000 --> 00:00:04.699 , we're talking today with Chad and Rowdy from Costco's third home initiative, 00:00:05.460 --> 00:00:09.190 which is the homeowner exchange program that we offer to our homeowners. 00:00:09.390 --> 00:00:10.320 Guys, thanks for coming on. 00:00:11.489 --> 00:00:11.979 You got it. 00:00:11.989 --> 00:00:12.749 Thanks for having us. 00:00:13.250 --> 00:00:13.929 Thanks, Steve. 00:00:15.360 --> 00:00:19.889 So we've had a lot of homeowners ask the questions, , what is the third 00:00:19.889 --> 00:00:21.589 home initiative through Costco? 00:00:22.189 --> 00:00:26.289 Um, how do they jump onto the program and how does it work exactly? 00:00:26.310 --> 00:00:28.040 So we're going to dig a little bit into that today. 00:00:29.685 --> 00:00:32.555 , Can you tell us as a homeowner in Casago? 00:00:33.065 --> 00:00:35.125 How, , how does it work for them? 00:00:35.155 --> 00:00:36.945 How does the home exchange work? 00:00:36.974 --> 00:00:42.575 And, , just give it a quick overview of what they need to know as a homeowner. 00:00:42.935 --> 00:00:44.605 And then we'll dig down into the details of it. 00:00:45.725 --> 00:00:46.985 Sure, absolutely. 00:00:47.800 --> 00:00:53.660 Well, the, , genesis is, , to find more flexible usage for 00:00:53.710 --> 00:01:01.280 Steve: Properties globally, and to allow more flexibility for that property 00:01:01.840 --> 00:01:06.290 to be monetized, uh, towards travel. 00:01:06.750 --> 00:01:07.500 Around the world 00:01:07.510 --> 00:01:13.420 , essentially each of each of you as homeowners under a Costco, , would have 00:01:13.420 --> 00:01:18.850 the right to deposit a fixed time in the increments of seven night weeks, 00:01:19.380 --> 00:01:21.520 , into our portfolio of third home. 00:01:22.050 --> 00:01:26.400 And in return for that, you'd get, , travel credits, what we call keys. 00:01:27.105 --> 00:01:31.195 , to then be used as currency against other exchanges around the globe. 00:01:31.955 --> 00:01:32.223 Yeah. 00:01:32.223 --> 00:01:37.015 we have something that's called an indirect model versus a direct model. 00:01:37.625 --> 00:01:41.255 What's the difference between an indirect model versus a direct model? 00:01:41.285 --> 00:01:48.305 And why is the, uh, Costco's third home program better by being an indirect model? 00:01:50.160 --> 00:01:54.600 , The quick answer is organization and efficiency, right? 00:01:54.610 --> 00:01:57.800 The concept of home exchange and home swapping. 00:01:58.505 --> 00:02:03.965 Is decades old, but the process and the reality of two homeowners on 00:02:03.965 --> 00:02:10.035 different sides of the continent or world, um, communicating with one 00:02:10.035 --> 00:02:15.875 another effectively to exchange a specific week in each other's property. 00:02:16.325 --> 00:02:20.965 Steve, I would love to stay in your property and, um, Scottsdale. 00:02:21.360 --> 00:02:25.530 You can use my home and veil at the same time for the same week. 00:02:25.960 --> 00:02:27.740 Um, how do we coordinate this? 00:02:28.220 --> 00:02:34.830 Um, it, it's a bit antiquated . And instead of, of following that, we 00:02:34.830 --> 00:02:40.510 decided to, to follow a much more tried and true concept of, um, indirect. 00:02:40.740 --> 00:02:42.970 In other words, A point space system. 00:02:43.510 --> 00:02:47.080 Time in a home equates to a certain value of points. 00:02:47.500 --> 00:02:51.480 Those keys , are then used as currency to exchange into other homes. 00:02:52.840 --> 00:02:57.700 And so when you mentioned keys, Roddy, how are keys earned? 00:02:58.340 --> 00:02:59.470 How are they calculated? 00:02:59.610 --> 00:03:04.500 And, , how do owners know what the value of a week in their property is worth? 00:03:05.495 --> 00:03:10.395 So basically , when, um, uh, a person joins , we evaluate their 00:03:10.395 --> 00:03:14.645 property and the, and the way keys work is, is we made it pretty simple. 00:03:14.655 --> 00:03:20.035 Basically, if you have a, a 1 million property that equates to a, to a one 00:03:20.045 --> 00:03:26.375 key week, if you have a 5 million property and you put in a week of that 00:03:26.375 --> 00:03:28.875 property, you would earn five keys. 00:03:28.891 --> 00:03:31.730 And a non peak season and a non peak week. 00:03:32.290 --> 00:03:37.340 Now we do have a scale where people, , when people join and they look at the 00:03:37.340 --> 00:03:40.370 calendar and they're like, and they decide, okay, we want to put, , August 00:03:40.380 --> 00:03:45.160 1st in or you choose your date, there are some peak weeks and super peak 00:03:45.160 --> 00:03:50.030 weeks, and when you put your, your home in, in a peaks peak week, you'll get 00:03:50.250 --> 00:03:53.960 a two X you'll get a two X multipliers to get double the amount of keys and 00:03:53.960 --> 00:03:57.670 for a super peak week, like a Christmas week and tell your ride, you would get 00:03:57.750 --> 00:04:00.260 \ . A three X multiplier on your property. 00:04:02.660 --> 00:04:05.790 Can you walk me through the process in which a homeowner would go 00:04:05.790 --> 00:04:09.050 through when they want to list their property on the Costco's. 00:04:09.340 --> 00:04:10.210 Third Home initiative. 00:04:11.000 --> 00:04:11.270 Sure. 00:04:11.270 --> 00:04:13.400 So basically they would fill out a URL link. 00:04:13.520 --> 00:04:17.250 They would put their address in their and then a member experience 00:04:17.250 --> 00:04:18.900 associate would contact them. 00:04:18.900 --> 00:04:22.080 But once they put their address in, we would go ahead and, uh, 00:04:22.110 --> 00:04:23.310 take a look at the property. 00:04:23.310 --> 00:04:28.480 We would, uh, we would evaluate the property and see what the value is, and 00:04:28.480 --> 00:04:31.460 then we would discuss with the homeowner. 00:04:31.755 --> 00:04:35.175 The key value and then we would discuss with the homeowner the 00:04:35.175 --> 00:04:36.615 weeks that they want to put in. 00:04:36.835 --> 00:04:38.585 It's a pretty simple process. 00:04:38.585 --> 00:04:43.415 It if Steve, , , if you put one of your properties in, you gave us the address. 00:04:43.465 --> 00:04:45.155 . You wouldn't have to do a lot of work. 00:04:45.480 --> 00:04:49.470 So basically they will, you know, they'll choose the weeks and then 00:04:49.520 --> 00:04:50.230 . It's, I don't know. 00:04:50.230 --> 00:04:52.140 It's about a three day process. 00:04:52.140 --> 00:04:56.170 I would say to, to fill out that form and to go through the process. 00:04:56.610 --> 00:05:00.900 Um, and I would say one of the, the really great things is that when they. 00:05:01.270 --> 00:05:06.160 When they join and they get their, their keys, they're not waiting 00:05:06.160 --> 00:05:08.250 for anyone to book their property. 00:05:08.260 --> 00:05:09.400 They actually get those keys. 00:05:09.410 --> 00:05:13.560 The moment that they deposit those two weeks . Um, that's a huge 00:05:13.560 --> 00:05:15.970 benefit because you don't have to wait around for anyone to book it. 00:05:15.980 --> 00:05:18.840 Like you, you can literally join today and travel next week. 00:05:19.600 --> 00:05:19.840 Yeah. 00:05:19.840 --> 00:05:23.140 You know, I just signed up my own personal property on third home. 00:05:23.880 --> 00:05:25.250 Uh, it was so easy. 00:05:25.830 --> 00:05:30.010 And, uh, went right through, you know, the channels, knocked it out, put 00:05:30.010 --> 00:05:34.240 the description in it up, uploaded some photos and, uh, I ended up 00:05:34.240 --> 00:05:38.770 getting six keys, uh, for my couple of weeks out of the whole deal. 00:05:38.770 --> 00:05:42.840 Now I used one of the premium weeks, , you know, a week that you'd said was premium. 00:05:42.840 --> 00:05:47.120 So I got a multiplier on my keys there, but I'm really excited , something that's 00:05:47.150 --> 00:05:54.720 important to understand is, um, getting onto the service is free for Costco 00:05:54.720 --> 00:05:57.640 homeowners, but there is an exchange fee. 00:05:57.780 --> 00:06:00.400 How do they know what that is or where to find that? 00:06:01.330 --> 00:06:04.940 . When you go on and book a vacation, you book a trip, everything is, 00:06:04.960 --> 00:06:08.490 all the fees are listed right there on the, on the page. 00:06:08.490 --> 00:06:10.700 So you'll, you'll scroll down, you'll choose a week. 00:06:11.150 --> 00:06:12.200 And then when you choose. 00:06:12.690 --> 00:06:16.340 Your timeframe that you want to travel on the same line, it will 00:06:16.340 --> 00:06:21.140 have, , 695 or whatever the exchange fee is for that specific property. 00:06:21.600 --> 00:06:25.600 Uh, it's probably an average of 900 a week, but you're talking about 00:06:25.600 --> 00:06:27.590 a, you know, 20, 30, 000 vacation. 00:06:28.170 --> 00:06:29.900 Um, but it's all right there. 00:06:29.900 --> 00:06:31.220 There's no, , there's no. 00:06:31.540 --> 00:06:36.980 Hidden information that you're going to be surprised by, , a fee when you show up to 00:06:36.980 --> 00:06:41.340 the property or anything like that, like everything is, is pretty upfront for you. 00:06:41.790 --> 00:06:42.670 . When you book your trip. 00:06:43.390 --> 00:06:43.630 Yeah. 00:06:43.640 --> 00:06:47.840 The savings looked, when I was digging through the software, when I was 00:06:47.840 --> 00:06:51.400 digging through all the inventory that's available to us, it looked 00:06:51.400 --> 00:06:53.553 like it was about a 95 percent savings 00:06:53.613 --> 00:06:54.783 you know, a 600 fee. 00:06:54.783 --> 00:06:57.893 I was living in Italy, but it was a 6, 000 rental. 00:06:58.053 --> 00:06:59.513 It was 6, 000 and change. 00:07:00.023 --> 00:07:01.533 I'm like, well, that's a pretty good deal. 00:07:01.613 --> 00:07:04.143 So that's how it seemed to work out. 00:07:05.103 --> 00:07:05.473 Sorry. 00:07:05.883 --> 00:07:06.883 You're right on the money. 00:07:07.043 --> 00:07:11.483 And in fact, it averages closer to 97 percent discount. 00:07:11.483 --> 00:07:16.443 If you related directly to a pure rental and fee based model, right? 00:07:16.893 --> 00:07:18.733 Um, good news for, Okay. 00:07:18.913 --> 00:07:24.803 Each of, of your owners is that, , , the value of the properties that they're 00:07:24.803 --> 00:07:30.573 trading into well exceeds that the average nightly rate, for instance, within a 00:07:30.573 --> 00:07:34.038 inventory is similar to what our weekly. 00:07:34.338 --> 00:07:37.768 Uh, exchange fee might be so tremendous discount in that regard. 00:07:38.428 --> 00:07:41.808 Um, and they get the keys, whether or not somebody stays there or not. 00:07:41.808 --> 00:07:47.068 . So if I, so for my property, I put in Christmas week, , down in, in Rocky 00:07:47.068 --> 00:07:49.278 point, Mexico, , the week is there. 00:07:49.878 --> 00:07:53.468 Now, if nobody books it or stays, I still have my keys no matter what. 00:07:53.548 --> 00:07:54.198 Is that correct? 00:07:54.568 --> 00:07:54.998 That's right. 00:07:55.008 --> 00:07:55.438 That's right. 00:07:55.538 --> 00:07:57.038 , there's an exception to that. 00:07:57.098 --> 00:08:02.568 , our part of our, our model is to reward our members with instant gratification. 00:08:03.088 --> 00:08:08.498 You, you trust us with guaranteed time in your home for other members to utilize. 00:08:09.008 --> 00:08:11.408 We're going to reward you immediately With keys. 00:08:11.828 --> 00:08:16.488 The only exception to that is if those if the week for which 00:08:16.488 --> 00:08:18.978 you deposit is within 60 days. 00:08:19.673 --> 00:08:23.803 From the date you deposit it to arrival date within 60 days of the date 00:08:23.803 --> 00:08:28.743 you deposit it, um, which is in our world is a tight turn, so to speak. 00:08:29.203 --> 00:08:32.773 , so we, we switched to a keys when booked model at that point. 00:08:33.213 --> 00:08:34.813 , the key values hold true. 00:08:35.173 --> 00:08:39.973 But you don't earn them for last minute deposits like that until someone chooses 00:08:39.973 --> 00:08:41.733 to, , to exchange into that property. 00:08:41.793 --> 00:08:42.473 That makes sense. 00:08:42.483 --> 00:08:45.953 So nobody books like, Hey, somebody come in tomorrow and 00:08:45.953 --> 00:08:46.933 then they got the keys, right? 00:08:46.943 --> 00:08:47.683 That makes no sense. 00:08:47.913 --> 00:08:48.313 That's right. 00:08:48.323 --> 00:08:55.613 , as long as I offer a week at 61 days or more, I'm guaranteed to 00:08:55.613 --> 00:08:57.633 get my keys to use somewhere else. 00:08:57.633 --> 00:08:59.193 Whether somebody stays in my property or not. 00:08:59.723 --> 00:09:00.233 That's correct. 00:09:00.953 --> 00:09:04.743 So the best way for a homeowner to get signed up is to reach out to their 00:09:04.743 --> 00:09:07.193 local property manager here at Costco. 00:09:07.543 --> 00:09:11.233 As everybody knows, every Costco office is locally owned and operated, 00:09:11.613 --> 00:09:14.903 and they're going to go ahead and send you a link for you to sign up 00:09:14.913 --> 00:09:16.823 with Costco's third home initiative. 00:09:17.473 --> 00:09:18.703 Now, if you. 00:09:18.913 --> 00:09:21.613 Haven't, if you're not able to get ahold of that, go ahead and go to Costco. 00:09:21.803 --> 00:09:25.413 com four slash third home and select the city you're in. 00:09:25.423 --> 00:09:28.573 It'll send you to a, uh, to the proper link. 00:09:28.583 --> 00:09:29.703 Can you get signed up from there? 00:09:30.433 --> 00:09:33.743 And that will give you all the benefits and perks of being part 00:09:33.753 --> 00:09:37.393 of Costco and being a Costco homeowner with this exchange program. 00:09:37.443 --> 00:09:38.123 Is that right?. 00:09:38.963 --> 00:09:40.903 Yeah, , that's a great process. 00:09:40.903 --> 00:09:44.033 And, , just know, you know, this is a people business. 00:09:44.043 --> 00:09:44.733 So there are always. 00:09:45.168 --> 00:09:49.058 Individuals within our team, including Rowdy and myself that are 00:09:49.058 --> 00:09:52.408 more than happy to pick up one on one conversations with your owners. 00:09:52.878 --> 00:09:54.078 Um, every home is unique. 00:09:54.318 --> 00:09:58.298 Every body is unique and if their circumstances might be a little bit 00:09:58.298 --> 00:10:02.528 different from the norm We want to hear about that and work with them to find a 00:10:02.928 --> 00:10:05.188 comfortable, partnership with us there. 00:10:06.788 --> 00:10:07.278 , Chad Rowdy. 00:10:07.278 --> 00:10:10.608 Thanks for coming on and explaining Costco's third home , initiative 00:10:10.608 --> 00:10:13.808 and the exchange program that we have , you have any final words or 00:10:13.808 --> 00:10:15.348 final thoughts as we sign off today? 00:10:17.608 --> 00:10:20.068 , I'm excited for homeowners to start traveling Steve, 00:10:20.078 --> 00:10:21.398 because , it's a game changer. 00:10:21.398 --> 00:10:25.808 , it's a life changing experience to be a part of this because you're truly able 00:10:25.808 --> 00:10:30.988 to travel to places around the world that you normally don't have access to. 00:10:31.388 --> 00:10:32.638 It's life changing. 00:10:33.273 --> 00:10:34.823 So I'm excited for you guys to be a part of it. 00:10:34.993 --> 00:10:35.763 Thanks for joining us guys. 00:10:36.263 --> 00:10:37.113 We really appreciate it. 00:10:37.513 --> 00:10:39.883 If you're a Costco homeowner and you're looking for more information, 00:10:39.893 --> 00:10:40.813 make sure to go to costco. 00:10:41.013 --> 00:10:45.153 com for slash third home, or you can check the show notes below 00:10:45.183 --> 00:10:46.513 and, , find the links there. 00:10:46.733 --> 00:10:47.213 Thanks guys. 00:10:47.933 --> 00:10:48.533 Thank you.