[ 2012 ] Letter from the Ritz Carlton Destination Club

[Lockwoodroad]

See letter received today. In short: RCDC members have lost access to the Abaco and Kapalua Bay Ritz Carlton Clubs today--Kapalua Bay was probably the nicest club along with the Bachelor Gulch property. They lost access to the Abercrombie and Kent properties-which included a host of $2-3mm properties-and was a huge perk (while it lasted which wasn't very long). And "Based on The Ritz-Carlton Destination Club Member feedback," the RCDC members now have the pleasure of being part of the Marriot Vacation Club. Perhaps at the remaining RCDCs they can begin to offer a complimenaty breakfast if you sit through a "short informational (timeshare) presentation".

--------------------
Dear Member,

In the past several years we evolved The Ritz-Carlton Destination Club for the greater enjoyment of our Members. As you are aware, three years ago, we launched a new product offering known as Portfolio, providing a flexible membership option which allows Members to enjoy participating in Ritz-Carlton Destination Club locations within the Portfolio program. As a result of the Portfolio program offering, we also extended Home Club Members the opportunity to enjoy more flexible travel by exchanging their allocated time for points through The Lion & Crown Exchange Company.

In response to Member feedback, we sought ways to provide exceptional usability through a variety of destinations and experiences. As a result, we have some changes to share with you. Not surprisingly, with the decline of the economic climate, some adjustments had to be made but in other areas we are continuing to advance forward. Rest assured that as we advance forward, nothing about your Home Club Membership has changed.

After careful consideration, The Ritz-Carlton Destination Club has made the strategic business decision to remove The Ritz-Carlton brand from The Abaco Club at Winding Bay. The unforeseen deterioration of and uncertainty surrounding global economic conditions have not only rendered this location unsustainable from a business perspective, but have limited the prospects of any enhancements in the near term.

On July 10, 2012, The Ritz-Carlton Management Company, LLC, as manager of the property known as The Ritz-Carlton Club, Kapalua Bay, exercised its right to issue a default notice pursuant to its management agreement with the Kapalua Bay Vacation Owners Association. As a result, it is the intention of The Ritz-Carlton Management Company, LLC to terminate its management agreement for The Ritz-Carlton Club, Kapalua Bay and to remove The Ritz-Carlton brand from the property at the conclusion of the applicable notice period, with termination to be effective on September 10, 2012 at 11:59 P.M. HST. Concurrently with the termination of the management agreement for The Ritz-Carlton Club, Kapalua Bay, the Kapalua Bay Condominium will no longer be a Ritz-Carlton Destination Club location. If you have future reservations or waitlist requests for Kapalua Bay, Member Services is available to assist you with making alternate arrangements.

While we understand that it may be disappointing not having The Abaco Club at Winding Bay or Kapalua Bay Condominium within the collection of Ritz-Carlton Destination Club locations, we have determined new ways to provide a variety of experiences.

Based on The Ritz-Carlton Destination Club Member feedback, additional benefits and experiences will be available through a new affiliation with Marriott Vacation Club Destinations. This affiliation will enable Ritz-Carlton Destination Club Members to expand their options.
Affiliation will extend you the opportunity to deposit your Reserved Allocation on an annual basis. Once you deposit, the following will be available for you:
• Secure available Ritz-Carlton Destination Club locations while enjoying the ability to choose the appropriate size accommodation and length of travel
• Secure any of the 51 worldwide Marriott Vacation Club Resorts, including Europe
• Bank unused points into the following year
• Borrow points from the coming year
• Book any experience in the Explorer Collection which includes over 100 experiences to
enjoy.

The Explorer Collection will replace the current affiliation with Abercrombie & Kent Residence Club; however, the new offering will include fully escorted tours, upscale cruises, special events and packages.

To clarify, nothing about the Home Club Membership that you purchased has changed. If you wish to continue to use your Membership as you do today, you maintain the opportunity to:
• Reserve your allocated time
• Exchange your Reserved Allocation with fellow Home Club Members via the existing
The Cobalt Travel Company, LLC
• Retain the ability to purchase additional Space Available Time at the prevailing per diem
fee
• Continue to enjoy The Ritz-Carlton 2012 Hotel Reservation Service
Initially access to the enhancements made available through the new affiliation with Marriott Vacation Club Destinations will be complimentary and easily added to your Membership for you to enjoy. We encourage you to participate, as we feel that you will be delighted with the additional destinations and countless experiential excursions available to you when you choose not to visit your Home Club during your allocated time.

In order to implement these additional options The Lion & Crown Travel Co., LLC ("Lion & Crown") will require the execution of an Addendum to your current Enrollment Agreement. Therefore, pursuant to its reserved rights under your Enrollment Agreement and the Exchange Procedures, Lion & Crown hereby notifies you that effective immediately, it will not accept the renewal of any Enrollment Agreements for which an Addendum is not executed or accept reservations for usage associated with your Allocation which would result in the renewal of any Enrollment Agreements for which an Addendum is not executed. Following December 31, 2012, Lion & Crown will only accept reservations for parties that execute the Addendum (or are otherwise entitled to make reservations, including parties who execute new Enrollment Agreements). Further information regarding how to enroll, details on point values and the Addendum will be provided for your consideration in an email communication this Fall. We encourage you to execute such Addendum to avoid termination of the Enrollment Agreement and take advantage of this exciting new opportunity. Recognizing that this exciting new affiliation may impact your decision to deposit for 2014, we will be opening the deposit windows in Spring 2013 for 2014 usage.

We are enthusiastic about the future of The Ritz-Carlton Destination Club and look forward to assisting you with your travel planning.

Warmest Regards,
Eveleen Babich
General Manager
The Cobalt Travel Company, LLC
628691-7

 

[Kagehitokiri2]

thanks.

so theyre ending management of abaco fractionals, kapalua fractionals, kapalua residences?
all related to financial situations of developments?

 

[NeilGoBlue]

Do you know if the addendum to stay in the Lion and Crown club is a formality? Or does it materially change the agreement? Is AK still in the Lion and crown club? I know that they were negotiating 2013. We haven't been told anything.

 

[Kagehitokiri2]

pretty clear >

The Explorer Collection will replace the current affiliation with Abercrombie & Kent Residence Club

 

[DazedandConfused]

Based on The Ritz-Carlton Destination Club Member feedback, additional benefits and experiences will be available through a new affiliation with Marriott Vacation Club Destinations. This affiliation will enable Ritz-Carlton Destination Club Members to expand their options.

Affiliation will extend you the opportunity to deposit your Reserved Allocation on an annual basis. Once you deposit, the following will be available for you:

• Secure any of the 51 worldwide Marriott Vacation Club Resorts, including Europe

So people that could afford to buy Ritz Carleton Destination Club for $200,000+ or so can now use a Marriott Timeshare that can be bought resale for less than $5,000.

Gee, what a great benefit.

 

[ada903]

So is there a chart somewhere showing how many points it takes to book the various Marriott's and under what conditions? How do Ritz weeks translate to Marriott points? Or Marriott weeks?

 

[Kagehitokiri2]

so far website has dropped abaco and A&K, but not kapalua...

also dropped kauai, wonder if development suspended.

losing abaco and kapalua leaves st thomas and jupiter, and jupiter is ~2 miles to the beach.

the people who are screwed are fractional owners at abaco (if any, or was it suspended?) and fractional/residence owners at kapalua (including ER) - funny how they dont mention that in the letter, even though OP isnt one

***

FS exuma had some condos, and a couple fractional shares, changed to sandals
setai miami dropped GHM mgmt
FS aviara TS is still managed by FS, but hotel changed to PH

 

[NeilGoBlue]

pretty clear >

Yep.. Sorry missed that..

 

[Love2TS]

So people that could afford to buy Ritz Carleton Destination Club for $200,000+ or so can now use a Marriott Timeshare that can be bought resale for less than $5,000.

Gee, what a great benefit.

My thoughts exactly.

 

[Lockwoodroad]

Abercrombie and Kent

Among my many concerns is that the Ritz/Cobalt has not been transparent with the RCDC members about this deteriorating situation.

For instance, the Abercrombie and Kent relationship was reduced to just four (4) properties months ago. Not only were the RCDC members not ever informed of this cut back (even as of today), on the RCDC website it appeared as if all the A&K properties remained available to the members.

 

[bogey21]

Are Ritz Carlton and Marriott one and the same?

George

 

[Lockwoodroad]

my letter to the Marriot Vacations Club

Lee Cunningham
Executive Vice President & Chief Operating Officer
The Ritz-Carlton Destination Club
Member.inquiry@ritzcarltonclub.com

Dear Lee, the recent communications from the Marriott Vacations Worldwide Corp. are both insulting and disingenuous. I encourage you and your team to communicate with the Ritz-Carlton Destination Club members in an earnest and forthright manner.

First, let's start how you sign your letter. You are the Executive Vice President and Chief Operating Officer of the Marriott Vacations Worldwide Corporation. I assume you sign your August 20th letter under the "The Ritz-Carlton Destination Club" to provide us the RCDC members comfort that you have our best interests at heart. I would encourage you to be upfront that you work for the Marriot Vacations Worldwide Corp., of which only a small fraction of its members belong/bought into the RCDC brand. Such honesty will suggest you understand that there are competing interests at play.

Second, you start your August 20th letter with an absurd and patently false statement: "We would like to assure you that nothing that you originally purchased has changed or will change as a result of the announcement mentioned above." Sir, in one fell swoop RCDC members lost access to the Ritz Carlton Clubs in Abaco and Kapalua Bay. We also lost access to the upscale Abercrombie and Kent properties. And "Based on The Ritz-Carlton Destination Club Member feedback," (ha-ha) RCDC members will see their properties being marketed to and being made available to MVW timeshare/points members who have a much lower cost of entry. We, the RCDC members, are not idiots. Please do not treat us as if we were.

Third, beyond the obvious spin you try to put on the Marriot Vacation Club efforts to "expand its luxury experience options", the reality is that Marriot Vacations Club properties cater to a consumer with a different price point with different expectations. To be clear, if any RCDC member wanted to be part of the the Marriot Vacation Club, he or she would have saved one hundred or two hundred thousand dollars and bought into the Marriot Vacation Club.

Lastly, your recent communications fail to acknowlege the underlying issue which all RCDC members need to understand. The Marriot Vacations Worldwide Corp. has a huge incentive to dilute the RCDC brand to further its greater interest of selling more Marriot Vacation Club memberships. The growth of Marriott Vacations Worldwide Corp. as a public company it tied with growth of the sales of more and more Marriot Vacation Club memberships. The sale of more RCDC memberships is not currently relevant for this public company. Thus the value of the investment made by each RCDC members is at jeopardy.

The recent communications by you and your team have undermined your credibility with the RCDC membership. Unless the Marriot Vacations Worldwide Corp. changes its attitude and begins to address the clear conflict of interest that will destroy the value of our investment, I continue to encourage the RCDC Aspen Highlands board to explore exiting from the Marriot relationship and cancel all management contracts.

Best regards,

 

[Kagehitokiri2]

i notice tons of discussion in marriott forum now, including lots of TS owners staying at RC, and one post saying the unsold inventory / trust is available

so basically, the (little unowned) time there is, is being used up by TS owners, instead of RC fractional/DC owners/members

http://tugbbs.com/forums/forumdisplay.php?f=29

http://www.sherpareport.com/destination-clubs/ritz-carlton-points.html

 

[DazedandConfused]

Are Ritz Carlton and Marriott one and the same?

George

I guess they are now (minus the $100,000+ buy-in)

 

[Lockwoodroad]

Webinar for Members of The Ritz-Carlton Destination Club

"We have scheduled a webinar for Members of The Ritz-Carlton Destination Club with myself and the President and Chief Executive Officer of Marriott Vacations Worldwide on August 28th at 4:00 PM Eastern Standard Time to help address questions we have received from our Members."

I just have one question: Do you realize that you are destroying the value of each and every Ritz Carlton Destination Club member's investment?

Every action taken by the MVWC thus far indicates it is solely interested in advancing the sale of more MVWC memberships and not concerned about protecting the value of the investment of RCDC members.

 

[Kagehitokiri2]

Lockwoodroad,

when RCDC launched it was a part of marriott
after TS spinoff, RCDC is a part of marriott TS

how many "portfolio" members are there?
most are "home" owners and their use will never change

 

[BocaBoy]

So people that could afford to buy Ritz Carleton Destination Club for $200,000+ or so can now use a Marriott Timeshare that can be bought resale for less than $5,000.

Gee, what a great benefit.

This is comparing apples to oranges--why would you compare RC developer prices to MVCI resale prices? I admit that RC developer prices were considerably higher than most Marriott timeshare prices on a week to week comparison, but not nearly the degree of difference you imply. Also, some Marriott timeshares (e.g., Maui oceanfront weeks, prime ski weeks, etc.) sold for prices well in excess of $70,000 per week, which is equivalent to over $200,000 for a three week interval. There were even a few prime Maui weeks that sold for over $100,000 per week.

 

[DazedandConfused]

This is comparing apples to oranges--why would you compare RC developer prices to MVCI resale prices? I admit that RC developer prices were considerably higher than most Marriott timeshare prices on a week to week comparison, but not nearly the degree of difference you imply. Also, some Marriott timeshares (e.g., Maui oceanfront weeks, prime ski weeks, etc.) sold for prices well in excess of $70,000 per week, which is equivalent to over $200,000 for a three week interval. There were even a few prime Maui weeks that sold for over $100,000 per week.

I will clarify that the majority of Marriott timeshares can now be bought for under $5,000 on the resale market and some are in the $10-15k range. It really does not matter what they originally sold for as the prices have tumbled.

I was only pointing out the bad value of trading expensive RCDC points for a Marriott stay. Of course there may be a few isolated good examples such as Maui or ski weeks, but the majority of trades will be bad deals for RCDC members.

It is like two steps forward and one back. Hey members we are offering some new perks to your overpriced membership...one perk allows stays at a Marriott (gee thanks)

 

[bogey21]

I admit that I don't understand the nuances of what Ritz Carlton/Marriott are doing but it sure looks like another example of Marriott doing what is in the best interest of Marriott to the detriment of their Owners. If true, all I can say is what else did you expect?

George

 

[BocaBoy]

I will clarify that the majority of Marriott timeshares can now be bought for under $5,000 on the resale market and some are in the $10-15k range. It really does not matter what they originally sold for as the prices have tumbled.

I was only pointing out the bad value of trading expensive RCDC points for a Marriott stay. Of course there may be a few isolated good examples such as Maui or ski weeks, but the majority of trades will be bad deals for RCDC members.

It is like two steps forward and one back. Hey members we are offering some new perks to your overpriced membership...one perk allows stays at a Marriott (gee thanks)

My main point is you are comparing developer prices at RC to resale prices at MVCI. Of course, RC is generally more expensive than MVCI, even if you compare apples to apples. But not as dramatic as you are trying to make it seem. RC prices have tumbled also. Not cool.

I also don't see why you say this is a bad enhancement for RC owners. You probably would not want to trade for a mud week in a MVCI ski resort or a summer week in Phoenix, but you don't have to. Now you have the ability to access some very good additional properties. And the exchange is not week for week. Your RC points would undoubtedly be enough to get a lot more time at many of the Marriott timeshares than you are giving up. I own at Maui and if exchange for DC points I can get lots of weeks at other places with my points from a single Maui week. Even though I will normally go to Maui, I think this is a great enhancement to my ownership.

 

[DazedandConfused]

My main point is you are comparing developer prices at RC to resale prices at MVCI. Of course, RC is generally more expensive than MVCI, even if you compare apples to apples. But not as dramatic as you are trying to make it seem. RC prices have tumbled also. Not cool.

I am not an owner at RCDC but when I looked into the program in the past, it was very expensive and the point chart conversion for resorts were complex and most trades were expensive.

You have to re-read the post #1. It cracks me up that RCDC thinks losing a few great Ritz locations can be overcome by offering stays at 51 Marriott timeshares.

It is hard for me to imagine that someone that paid $250,000 to joine RCDC and then pay outrageous high dues would be happy trading their points to stay at a Marriott timeshare when they can rent that unit for so cheap from an owner, pay cash for the same thing, or buy that week resale if they really want.

This is simple -- Ritz Carlton putting lipstick on a pig.

 

[Kagehitokiri2]

BocaBoy, youve got to be freaking kidding me. who cares what TS owners think?

the problem, that everyone (on DC4MS) was clear on from the very beginning, is that RCDC was never a DC.

 

[WBP]

The current status of The Ritz-Carlton Destination Club can be attributed to its origin, when The Ritz-Carlton Hotel Company turned to Marriott Vacation Club, and enaged Marriott Vacation Club to develop, sell and support their "private residence club." In retropsect, The Ritz-Carlton Hotel Company should have found an experienced "luxury" partner to do this, not a timeshare outfit.

How sad that what was once touted as a "private residence club," "accessible only to Ritz-Carlton Club members and their guests" has become as private as the Port Authority Bus Terminal.

 

[Kagehitokiri2]

as mentioned, marriott owns ritz carlton

marriott wasnt selling out RC fractionals, so they decided to sell unsold inventory as portfolio memebership

with no reference to what they would do in future if they were going to finish selling fractionals

although how many fractionals werent owned by marriott? dont they own most, except kapalua for example?

 

[WBP]

as mentioned, marriott owns ritz carlton

marriott wasnt selling out RC fractionals, so they decided to sell unsold inventory as portfolio memebership

with no reference to what they would do in future if they were going to finish selling fractionals

although how many fractionals werent owned by marriott? dont they own most, except kapalua for example?

If my memory is right:

Marriott Vacation Club, DBA as some entity of The Ritz-Carlton Club, sold millions of dollars of fractional ownership, before they took some of their remaining inventory and placed it in the Ritz-Carlton Destination Club "Portfolio" pool/trust. At one point, Marriott Vacation Club took some of the fractional homes at the The Ritz-Carlton Club, Jupiter and converted them into whole ownership, which they called "Villas." Even after the advent of Portfolio membership, Marriott Vacation Club continued to sell some inventory as non-Portfolio inventory, an example of which was the St. Thomas "Suites" inventory.

With the exception of some of the original Ritz-Carlton Club's, which had joint-venture partners, an arm of Marriott Vacation Club held the mortgage to the unsold inventory, known as Developer inventory. Three of the Club's that had joint-venture partners were Jupiter, Kapalua, and San Francisco. In the case of the failed Ritz-Carlton Club, South Beach, Marriott Vacation Club reportedly had no money in that real estate, and served solely as the sales and marketing arm for the Developer (who was not Marriott Vacation Club). I don't remember if Marriott Vacation Club reported having any money in the Ritz-Carlton Club, Santa Barbara, which also failed to come to fruition.