Hyatt Pure Points Program

[Kal]

So, would it be advantageous or not in your opinion to go through with the purchase of the timeshare I am looking at? We were basically doing it so that we would have more points to work with for booking higher value properties such as Carmel. When we first purchased, we were able to go every year. Since they changed the point structure we no longer have enough points to stay for a week there.

I would do EVERYTHING POSSIBLE to buy a unit/week today. There's nothing to lose. If Hyatt takes it on ROFR so be it. But if they don't, you're the winner.

 

[Kal]

LATE BREAKING NEWS - The PPP has been delayed again. It was set for Feb. 21st, now it has been "comfortably delayed". No new date was provided. The reason included some legal issues.

Also, the unsold inventory at Maui is more than 50%. For me, that number will have a meaningful impact on how the PPP will be marketed.

 

[lizap]

Interesting... wish they would give existing deeded owners the right to continue to use the existing program AND use the new PPP program as well. I would be willing to pay for this since we would have access to new resorts and greater access to existing ones.

LATE BREAKING NEWS - The PPP has been delayed again. It was set for Feb. 21st, now it has been "comfortably delayed". No new date was provided. The reason included some legal issues.

Also, the unsold inventory at Maui is more than 50%. For me, that number will have a meaningful impact on how the PPP will be marketed.

 

[Creekway6]

Interesting. Any possible relationship between this potential change and the complete drying up of discounted cash-reservations on the HRC site? Historically, I've been able to grab off-season, cash-reservation on the HRC at Wild Oak for significantly less (e.g. 25%) of what the same rooms were listed at on the Hyatt retail hotel site. But, now, I'm seeing zero availability in any room category for the next 7 months. As much as I love Wild Oak, there is zero chance that all those rooms are booked by owners.

As someone who can into HRC for the $1 on a lowly 1,400 point week less than 2 years ago, I can't wait until I get a sales call on an up-charge to join a "points program." Sounds interesting, will you take $10?

 

[bdurstta]

Just went to an owners update. Yes, new program is now projected to "roll out" July 2017. They will supposedly start with Florida and roll out slowly across the US and ending with California (sounds strange.) Salesperson said they will be "adding" 9 more resorts but couldn't say "where" but alluded to maybe San Diego could be one of them. Hawaii property will NOT be part of the points program.

Salesperson said that right now they are selling timeshares for $16 a point (based on point value of your week) and that is WAY lower than anyone else. They "assume" that per points cost will go up.

Funny, TODAY the salesperson is saying the week deeded ownership is the BEST thing to buy, but when it switches over I bet they will say the points system is the best to buy. LOL

 

[bdurstta]

Interesting... wish they would give existing deeded owners the right to continue to use the existing program AND use the new PPP program as well. I would be willing to pay for this since we would have access to new resorts and greater access to existing ones.

Marriott did this a few years back when they started their new program. We joined when they had a promo. At the time I thought it was a waste, but now I a glad they did it. It is nice to have the options.

 

[bdbrecheen]

So, could someone please spell this out for those of us who are not as savvy. Does this mean that we, as owners, will no longer be allowed to use our points to book at other properties within the Hyatt Vacation Club Program and will only be able to use our deeded week? I am unsure how all of this will work. Thank you for your responses.

 

[Cropman]

So, could someone please spell this out for those of us who are not as savvy. Does this mean that we, as owners, will no longer be allowed to use our points to book at other properties within the Hyatt Vacation Club Program and will only be able to use our deeded week? I am unsure how all of this will work. Thank you for your responses.

I will defer to what Kal will end up posting here but from what I can glean, the short answer to your question is no. The Hyatt system as you now know it will essentially remain unchanged. (I'm not even sure if they can take it away from us.) However, there will be additional resorts, maybe cruises, and other "perks" that will be available to TPP owners that will not be available to owners that decide not to join TPP. With that in mind, for every deeded week that joins the TPP, it will take away from your availability to trade into another resort. For instance, you would like to trade into Sunset Harbor, week 6. There are 40 units. Let's say, currently half of the owners give up their week for whatever reason and the other half use their units every year. That means 20 units are available for owners of other Hyatt resorts to trade in. Now if 10 of those owners decide to join TPP instead of making their unit available to the rest of Hyatt, that cuts the number of units available in half or only 10 units. Less units are available for people who don't join TPP.

This is a simplistic example only. It will be interesting to see exactly what Hyatt entices people with in order to give up deeded weeks. If you bought your unit to stay at your resort in your week, this won't change a thing. If you bought planning on using your unit some of the time and trading some of the time, you will be able to do that, however, it may be more difficult to find than it already is, to find those high demand weeks. If you bought your week to trade, it will be very interesting to see what develops. Just my opinion, there are many here who know a lot more than me.

JC

 

[bdbrecheen]

I will defer to what Kal will end up posting here but from what I can glean, the short answer to your question is no. The Hyatt system as you now know it will essentially remain unchanged. (I'm not even sure if they can take it away from us.) However, there will be additional resorts, maybe cruises, and other "perks" that will be available to TPP owners that will not be available to owners that decide not to join TPP. With that in mind, for every deeded week that joins the TPP, it will take away from your availability to trade into another resort. For instance, you would like to trade into Sunset Harbor, week 6. There are 40 units. Let's say, currently half of the owners give up their week for whatever reason and the other half use their units every year. That means 20 units are available for owners of other Hyatt resorts to trade in. Now if 10 of those owners decide to join TPP instead of making their unit available to the rest of Hyatt, that cuts the number of units available in half or only 10 units. Less units are available for people who don't join TPP.

This is a simplistic example only. It will be interesting to see exactly what Hyatt entices people with in order to give up deeded weeks. If you bought your unit to stay at your resort in your week, this won't change a thing. If you bought planning on using your unit some of the time and trading some of the time, you will be able to do that, however, it may be more difficult to find than it already is, to find those high demand weeks. If you bought your week to trade, it will be very interesting to see what develops. Just my opinion, there are many here who know a lot more than me.

JC

Thank you for sharing your wisdom. I found your answer quite helpful.

 

[heathpack]

Funny, I just went to an owners update yesterday here in Carmel, CA.

I didn't learn too much. My salesman was fairly confrontational with us and didn't really like that I had pretty decent knowledge of how these things work.

The gist as we got it from them:
1. Right now they are just selling deeded weeks with the old standard points overlay. They were pushing deeded weeks as the best thing evah. Threatened us that we'd never be able o trade into Carmel again, because everyone here loves their week so much.
2. Soon they will be selling only points, and a supervisor was broight in to try to sell me a week while the opportunity to buy a deed still existed. They kept telling me that our deed would go away when the new pure points system starts. I finally called BS on that and they admitted my deed wasn't going anywhere unless I joined the new HPP (my term, 'Hyatt Pure Points') system. They did not say if current owners would be able to join. They did make a distinction between developer purchases and resale purchases, so perhaps Hyatt intends to exclude resale owners from buying in to the points system.
3. They went on and on about how Hyatt was buying everything on the open market right now by exercising ROFR. They told me it would be impossible to buy one right now, Hyatt would just take it. Ok, I said- then what would you buy my week 22 High Sierra week for, if I decided to use the proceeds from that to buy a Carmel week today? Oh no, we won't buy your High Sierra week. Why not, I asked, I thought you were buying everything? No we won't buy your week because you purchased resale. What?! Makes no sense but my conclusion is that Hyatt is not actually buying everything.
4. When they were telling me how everything was going into the new trust, and how as a consequence I'd be locked out and never be able to book again, I explained that was not mu understanding of how it would work legally- the only units they could use for trust inventory would be weeks Hyatt currently owns/buys back and new inventory they build and sell as points inventory, they agreed this was true. No current deeded weeks would be available to HPP owners unless those weeks are enrolled by current owners.
5. When I specfically mentioned the Feb 21 rollout date & that I knew it was delayed, they were visibly shocked that I was aware of this, asked me how I knew. I mentioned a friend who owns in Key West told me. Their reply was that Key West is different, the relevant California regulatory agency was holding up the process. So it may be correct that California properties will be added later (if ever).
6. They told me that Hyatt owns lots of inventory but also that if we wanted to buy, our only options for a deeded week right now was Carmel, Sedona or Maui. Not sure what that means. Maybe the legal hold-up on the HPP system is in these states?
7. I did see the sheets that listed what units Hyatt owned at Carmel & had available for sale. I would guess it was no more than 10% of available weeks.

That's all I can remember. Any questions, fire away.

 

[Kal]

Funny, I just went to an owners update yesterday here in Carmel, CA.

I didn't learn too much. My salesman was fairly confrontational with us and didn't really like that I had pretty decent knowledge of how these things work.

The gist as we got it from them:
1. Right now they are just selling deeded weeks with the old standard points overlay. They were pushing deeded weeks as the best thing evah. Threatened us that we'd never be able o trade into Carmel again, because everyone here loves their week so much.
2. Soon they will be selling only points, and a supervisor was broight in to try to sell me a week while the opportunity to buy a deed still existed. They kept telling me that our deed would go away when the new pure points system starts. I finally called BS on that and they admitted my deed wasn't going anywhere unless I joined the new HPP (my term, 'Hyatt Pure Points') system. They did not say if current owners would be able to join. They did make a distinction between developer purchases and resale purchases, so perhaps Hyatt intends to exclude resale owners from buying in to the points system.
3. They went on and on about how Hyatt was buying everything on the open market right now by exercising ROFR. They told me it would be impossible to buy one right now, Hyatt would just take it. Ok, I said- then what would you buy my week 22 High Sierra week for, if I decided to use the proceeds from that to buy a Carmel week today? Oh no, we won't buy your High Sierra week. Why not, I asked, I thought you were buying everything? No we won't buy your week because you purchased resale. What?! Makes no sense but my conclusion is that Hyatt is not actually buying everything.
4. When they were telling me how everything was going into the new trust, and how as a consequence I'd be locked out and never be able to book again, I explained that was not mu understanding of how it would work legally- the only units they could use for trust inventory would be weeks Hyatt currently owns/buys back and new inventory they build and sell as points inventory, they agreed this was true. No current deeded weeks would be available to HPP owners unless those weeks are enrolled by current owners.
5. When I specfically mentioned the Feb 21 rollout date & that I knew it was delayed, they were visibly shocked that I was aware of this, asked me how I knew. I mentioned a friend who owns in Key West told me. Their reply was that Key West is different, the relevant California regulatory agency was holding up the process. So it may be correct that California properties will be added later (if ever).
6. They told me that Hyatt owns lots of inventory but also that if we wanted to buy, our only options for a deeded week right now was Carmel, Sedona or Maui. Not sure what that means. Maybe the legal hold-up on the HPP system is in these states?
7. I did see the sheets that listed what units Hyatt owned at Carmel & had available for sale. I would guess it was no more than 10% of available weeks.

That's all I can remember. Any questions, fire away.

I just love it when we owners know more about what Hyatt is up to than the sales people. I had figured Maui was a key link but never thought it would not be a participant in the HPP. That's great for the legacy program as we will have normal access to the resort weeks rather than just a part of it. It's interesting that "ILG wanted to protect the Maui HRPP owners" but what about all the non-Maui HRPP owners?

There was a major training program scheduled for Feb.20th, until the roll-out was postponed to a "comfortable extension". Hmmmmm, to me "comfortable" is far from a 5 month delay. There are obviously some serious issues going down. Probably in the legal department.

Now let's really watch to see Hyatt's ROFR actions.

So here's a crazy "what-if"..... I sell my week to my very best friend for $30K. Hyatt would have to sell that week for $60K (consider overhead etc) so they pass on ROFR. Then my very best friend provides me a $15K gift with no tax consequences! How do those numbers work out?

 

[Kal]

A friend of mine is a Carmel owner. He gave up his week in exchange for Maui next month.

 

[bdbrecheen]

I just love it when we owners know more about what Hyatt is up to than the sales people. I had figured Maui was a key link but never thought it would not be a participant in the HPP. That's great for the legacy program as we will have normal access to the resort weeks rather than just a part of it. It's interesting that "ILG wanted to protect the Maui HRPP owners" but what about all the non-Maui HRPP owners?

There was a major training program scheduled for Feb.20th, until the roll-out was postponed to a "comfortable extension". Hmmmmm, to me "comfortable" is far from a 5 month delay. There are obviously some serious issues going down. Probably in the legal department.

Now let's really watch to see Hyatt's ROFR actions.

So here's a crazy "what-if"..... I sell my week to my very best friend for $30K. Hyatt would have to sell that week for $60K (consider overhead etc) so they pass on ROFR. Then my very best friend provides me a $15K gift with no tax consequences! How do those numbers work out?

Kal~ I find your posts to be a weath of info. Thanks for the updates! I have been an owner with Hyatt for many years, but I have never been on a Timeshare forum until now. One last question. Does it matter what resort I try and buy into at this point if all I am interested in is increasing my points? I am looking at Beach House, Coconut Point and Wild Oak, which I already own at. I briefly considered Puerto Rico, but I am concerned about the vacant property next door as well as the economy down there.We love going down there as it is never crowded and it seems as though we almost have the pool or beach to ourselves. I'm not sure how that place stays open.

 

[vacationtime1]

So here's a crazy "what-if"..... I sell my week to my very best friend for $30K. Hyatt would have to sell that week for $60K (consider overhead etc) so they pass on ROFR. Then my very best friend provides me a $15K gift with no tax consequences! How do those numbers work out?

There would be a tax consequence if you sold for $30K -- a capital gains tax -- unless you had paid $30K or more for the unit. Your friend would have a (very small) gift tax on the gift to you. And of course it is fraudulent.

I agree that Hyatt is unlikely to pay $30K. Over on the Marriott board, the quants have figured out that Marriott usually ROFR's only if the ROFR price is 23% or less than the price for which Marriott expects to resell the resulting points. So if they were to ROFR at $30K, it means they expect to resell the points for no less than about $130K. Not very likely, I would say.

 

[Kal]

There would be a tax consequence if you sold for $30K -- a capital gains tax -- unless you had paid $30K or more for the unit. Your friend would have a (very small) gift tax on the gift to you. And of course it is fraudulent.

I agree that Hyatt is unlikely to pay $30K. Over on the Marriott board, the quants have figured out that Marriott usually ROFR's only if the ROFR price is 23% or less than the price for which Marriott expects to resell the resulting points. So if they were to ROFR at $30K, it means they expect to resell the points for no less than about $130K. Not very likely, I would say.

How many times have we all been informed that a time share is NOT an investment. Moreover you cannot write-off a loss on such a sale. I would ask that you provide a reference in the IRS code to support that thought. With regard to the $15K GIFT, the real number would be closer to the non-taxable limit which is something close to $14K.

Fraud??? There is no documentation whatsoever on such GIFTS. As a matter of fact I had the concept reviewed by a Bankruptcy Judge and he said it is absolutely legal. The recorded transaction is $30K. Hey, if Hyatt takes it on ROFR, the seller is the big winner.

 

[Kal]

...One last question. Does it matter what resort I try and buy into at this point if all I am interested in is increasing my points? I am looking at Beach House, Coconut Point and Wild Oak....

If you just want points, go for the best $/point you can find. I would definitely test the ROFR notion and keep trying. I would be careful about PR, but a friend is now going after a $2K PR sale. She's got nothing to lose a lots of upside. My bet is that Hyatt won't take it.

 

[vacationtime1]

How many times have we all been informed that a time share is NOT an investment. Moreover you cannot write-off a loss on such a sale. I would ask that you provide a reference in the IRS code to support that thought. With regard to the $15K GIFT, the real number would be closer to the non-taxable limit which is something close to $14K.

Fraud??? There is no documentation whatsoever on such GIFTS. As a matter of fact I had the concept reviewed by a Bankruptcy Judge and he said it is absolutely legal. The recorded transaction is $30K. Hey, if Hyatt takes it on ROFR, the seller is the big winner.

Internal Revenue Code section 61(a)(3). You are correct that we cannot write off losses on timeshares, but gains are still income. Just like principal residences.

If you had a pre-arranged deal with someone to sell to them at $30K against their promise to "gift" back a portion of the purchase price, you would be on very, very thin ice. The statement that you are selling to your friend for $30K would be an intentional, material misrepresentation conveyed to gain an advantage.

Yes, the gift tax would be very small, as I suggested above.

 

[Kal]

Internal Revenue Code section 61(a)(3). You are correct that we cannot write off losses on timeshares, but gains are still income. Just like principal residences.

If you had a pre-arranged deal with someone to sell to them at $30K against their promise to "gift" back a portion of the purchase price, you would be on very, very thin ice. The statement that you are selling to your friend for $30K would be an intentional, material misrepresentation conveyed to gain an advantage.

Yes, the gift tax would be very small, as I suggested above.

It would be fun to recapture all the costs over time to support the "investment". With regard to the GIFT, again there would not be a shred of written documentation, unless I was a bit financially challenged.

 

[Marathoner]

I expect that Hyatt Pure Points will look similar to Marriotts. Marriott is a large program with many timeshare owners and properties. Marriott is also commercially oriented with a desire to get their best customers to buy more. As a result, they struck the best balance they could develop between their legal and commercial interests. As a result, I expect that Hyatt will land in a similar place. All the fear mongering from Hyatt Sales can be ignored and you can study Marriott's program if you want to have insight into Hyatt's new program. As an owner of Marriott, Hyatt, Worldmark, Vistana, and an independent resort, I believe that there is room for variety of approaches by the timeshare resorts but that variability is limited to due legal and commercial considerations.

 

[heathpack]

There would be a tax consequence if you sold for $30K -- a capital gains tax -- unless you had paid $30K or more for the unit. Your friend would have a (very small) gift tax on the gift to you. And of course it is fraudulent.

I agree that Hyatt is unlikely to pay $30K. Over on the Marriott board, the quants have figured out that Marriott usually ROFR's only if the ROFR price is 23% or less than the price for which Marriott expects to resell the resulting points. So if they were to ROFR at $30K, it means they expect to resell the points for no less than about $130K. Not very likely, I would say.

Interesting.

They were quoting me prices for Carmel units:

2200 pt units around $40000
2000 pt units around $35000
1880 pt units around $30000
1880 EOY units around $20000

Don't quote me on those exact numbers, I didn't write it down.

So if the use the Marriott formula, they'd ROFR at
2200 pt around $9000
2000 pt around $8000
1880 pt around $7000
1880 pt EOY around $4600

 

[BocaBoy]

Posts #64 and 67 from vacationtime1 are 100% correct. The issues he addresses are not even a gray area of the law....they are clear. (And I am a trained lawyer, by the way, with tax experience.) And in reference to post #65 by Kal where he said there would be no evidence of the side deal, I will just say that not getting caught is not the same thing as acting legally. No evidence does not equal no fraud. And even if one believed there was no fraud, the failure to report one's profit on the sale is illegal tax evasion.

 

[Kal]

Posts #64 and 67 from vacationtime1 are 100% correct. The issues he addresses are not even a gray area of the law....they are clear. (And I am a trained lawyer, by the way, with tax experience.) And in reference to post #65 by Kal where he said there would be no evidence of the side deal, I will just say that not getting caught is not the same thing as acting legally. No evidence does not equal no fraud. And even if one believed there was no fraud, the failure to report one's profit on the sale is illegal tax evasion.

You need to remember my post started with "What if". The whole concept is to create comment. Do you really think someone would work the concept with someone on the internet? I don't think so. Besides it would only benefit the buyer while the seller is hanging out.

However, there are other ways to accomplish a deal which employs other means that are legal and have been successfully used in the past to avoid Hyatt's ROFR. The biggest issue is to try to decipher Hyatt's Go-No Go ROFR decision criteria. To date it has been a shot gun approach without much identifiable decision logic.

 

[bdh]

Interesting.

They were quoting me prices for Carmel units:

2200 pt units around $40000
2000 pt units around $35000
1880 pt units around $30000
1880 EOY units around $20000

Don't quote me on those exact numbers, I didn't write it down.

So if the use the Marriott formula, they'd ROFR at
2200 pt around $9000
2000 pt around $8000
1880 pt around $7000
1880 pt EOY around $4600

Based on previous ROFR history (current and several years back), the Hyatt ROFR formula varies from property to property as well as week to week and unit to unit. The Hyatt deeded week/unit aspect adds a couple of elements that do not exist in the Marriott product. Its probable that a 2200 pt Pinon Pointe unit with no view getting past ROFR at $9k while its possible one with a great view could pass ROFR at $9k. However I wouldn't expect any 2200 pt Sunset Harbor getting thru at $9k now - if the week/unit was a good view, it would take something north of $16k - a great view would be closing in on $20k IMHO.

 

[bdbrecheen]

You need to remember my post started with "What if". The whole concept is to create comment. Do you really think someone would work the concept with someone on the internet? I don't think so. Besides it would only benefit the buyer while the seller is hanging out.

However, there are other ways to accomplish a deal which employs other means that are legal and have been successfully used in the past to avoid Hyatt's ROFR. The biggest issue is to try to decipher Hyatt's Go-No Go ROFR decision criteria. To date it has been a shot gun approach without much identifiable decision logic.

Ok- I'll bite. How do I keep Hyatt from ROFR on a property I am going into escrow on Monday?

 

[alexadeparis]

Ok- I'll bite. How do I keep Hyatt from ROFR on a property I am going into escrow on Monday?

Pay more, or hope it will slip through if not diamond or platinum.