Point System Not Designed for Current Owners

Time for some fun speculation about the points program.

As DaveM and others have stated "the program wasn't designed for those of us who are weeks owners."

Since, MVCI has previously made a big thing of how many multiple week owners there are, and how the best prospect to buy a week is a current owner, it sounds like there has been a corporate change of heart.

Here are some of the possible reasons:

1. TUG!! Most multi-week owners spend enough time at their resorts going to welcome breakfasts that sooner or later they meet a TUG member who sends them to this site. Once they get here, they learn about resales, and MVCI loses a developer week customer.

2. The Internet in general. There is just so much information out there that it is hard not to stumble on knowledge that developer sales are not a good idea

3. Once upon a time, a developer week cost a maximum of $20,000. With that memory, an owner (even without knowledge of resales) would find prices in the $40,000 range as they are now to be grossly inflated since the product has only changed slightly over the years.

4. There is no longer a steady stream of new resorts to entice owners who are satisfied with the number of weeks they own at their current resort, but want to own more.

5. Someone who has bought into the concept of deeded real property multiple times likes being able to see and touch what he/she owns. Why buy something that only exists in someone's imagination? (For new buyers, that is a very good reason. The product can be whatever he/she imagines it to be, at least, until he/she tries to use it).

OK, creative minds, what other reasons for not designing the program to appeal to current weeks owners?

Art

By selling point systems they don't have to get someone to spend $40 to $50 thousand, they can sell someone a base point package for about $12,500. That amount is a lot easier to swallow in this economy. $12,500 you were able to buy part of the Marriott dream. if existing owners want to join then that is just gravy to Marriott.

It is simple. Marriott has lots of inventory to unload. Much of it in overpriced areas or in low seasons that no one wants. The only way to unload the weeks is for them to bundle them up in a trust and sell the points.

Current owners were an afterthought. Marriott really didn't have to let current owners in to the new system. They don't need us, they can still take our weeks whether we enroll or not.

The only reason they let us in is because there would be a huge uprising among their customers if they didn't. At least now they can say they offered it to us. Take it or leave it.

pfrank4127 said:

By selling point systems they don't have to get someone to spend $40 to $50 thousand, they can sell someone a base point package for about $12,500. That amount is a lot easier to swallow in this economy. $12,500 you were able to buy part of the Marriott dream. .

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$120k and $5,200 a year will get you a premier plus status. I just need to sell my house and cars and I can live the dream.... just need to get there on a bicycle.

dioxide45 said:

It is simple. Marriott has lots of inventory to unload. Much of it in overpriced areas or in low seasons that no one wants. The only way to unload the weeks is for them to bundle them up in a trust and sell the points.

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That actually sounds like they were thinking of the current owners; not trying to sell them the dregs

I had never thought of the point sales as a clearance/closeout sale, but it really is the leftovers until and if Marriott starts building new resorts.

+1

Art

Art said:

... but it really is the leftovers

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To paraphrase a famous (infamous?) former VP candidate, "They're putting lipstick on a pig!"

There are definitely some prime weeks. A number of platinum weeks were conveyed to the trust at Oceana Palms, Lakeshore Reserve, Crystal Shores and the Hawaiian properties.

It was interesting to look at the specific unit and weeks they conveyed. It appears that they liked to hold on to units deeded as weeks 51 and 52. Perhaps just in case the whole thing crumbled around them, they would at least hold super prime weeks in a fixed week system.

So it isn't all junk, but the majority of it was.

I think the #1 reason Marriott has gone to points is that they over valued the idea that people would spend big bucks on high end luxury timeshare such as the Marco Island. With points they can build anywhere they want. They're no longer selling specific resorts. They're selling general points that can be spent to reserve a week at any of the 51 current resorts in their network. They can build anywhere they want and will be able to sell the resort because they're not really selling that resort. They're selling an interest in a land trust.

I still am baffled at the way Marriott built this program so as to discourage current owners from participating. If you bought your resort primarly to use, if you don't exchange often enough to offset the annual membership fee or, if you have other timeshares that require you continue your presonal I.I. membership, this program really doesn't work.

I continue to feel that Marriott had many templates to choose from with systems that work for both new and past owners. Systems that encourage incremental expansion by purchasing additional points. When Marriott cut owners short on the points they give vs the points they require for a reservation, it puts current owners in a position of buying points not to expand the possibility's using points but just to maintain what they already have with weeks. It's a double edged sword that cuts Marriott sales off at the knees when it comes to marketing to their current 400,000 owners.

Had Marriott kept the seasons as they were. Had Marriott given me the same number of points required to reserve any week in my current season. Then I'd have been more inclined to join the program AND, we might have even considered modest expansion into the system by buying a few additional points to get into the resorts we'd like to visit. As it stands now, I can't even get into my own resort if I elect to convert my weeks ownership to points, which makes the conversion pointless and discourages us from expanding our ownership by purchasing additional points.

I remain amazed that Marriott didn't think this through as well as they should have. They released a program that limits the number of owners this program works for. Done properly, they could have experienced a much higher anticipated conversion rate than their projection of 20%-25% and, had a much better chance at selling small points upgrades of 1,000 to 2,000 points to give some owners a great shot at reserving more expensive units with views where they couldn't initially afford those views at the time of their original purchase.

So much misinformation and misunderstanding. So little desire to understand. Way to go TUGGERS.

BocaBoy said:

So much misinformation and misunderstanding. So little desire to understand. Way to go TUGGERS.

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BocaBoy, or whatever I should call you, please enlighten us on what we are missing.

Personally I think you are a sales rep for Marriott. First you were a fixed week owner at Lahaina Villas (and a Platinum MRP) and then you became an owner across all the properties in Hawaii (which you must have forgotten in your initial posts).

I've ignored it to date, but now you feel the need to speak condescendingly to the good people of TUG, which is ridiculous.

So, which of us is right?

GregT said:

BocaBoy, or whatever I should call you, please enlighten us on what we are missing.

Personally I think you are a sales rep for Marriott. First you were a fixed week owner at Lahaina Villas (and a Platinum MRP) and then you became an owner across all the properties in Hawaii (which you must have forgotten in your initial posts).

I've ignored it to date, but now you feel the need to speak condescendingly to the good people of TUG, which is ridiculous.

So, which of us is right?

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I agree that he's a shill and not a very good one at that.

Art said:

Time for some fun speculation about the points program.

As DaveM and others have stated "the program wasn't designed for those of us who are weeks owners."

Since, MVCI has previously made a big thing of how many multiple week owners there are, and how the best prospect to buy a week is a current owner, it sounds like there has been a corporate change of heart.

Here are some of the possible reasons:

1. TUG!! Most multi-week owners spend enough time at their resorts going to welcome breakfasts that sooner or later they meet a TUG member who sends them to this site. Once they get here, they learn about resales, and MVCI loses a developer week customer.

2. The Internet in general. There is just so much information out there that it is hard not to stumble on knowledge that developer sales are not a good idea

3. Once upon a time, a developer week cost a maximum of $20,000. With that memory, an owner (even without knowledge of resales) would find prices in the $40,000 range as they are now to be grossly inflated since the product has only changed slightly over the years.

4. There is no longer a steady stream of new resorts to entice owners who are satisfied with the number of weeks they own at their current resort, but want to own more.

5. Someone who has bought into the concept of deeded real property multiple times likes being able to see and touch what he/she owns. Why buy something that only exists in someone's imagination? (For new buyers, that is a very good reason. The product can be whatever he/she imagines it to be, at least, until he/she tries to use it).

OK, creative minds, what other reasons for not designing the program to appeal to current weeks owners?

Art

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It is a great question -- and one we will debate for quite a while. I initially thought that Marriott wanted a points program to be able to resell their current system over and over and over again. Additionally, letting all their 400,000 owners participate would generate a nice recurring cash flow stream.

However, it now appears that Marriott was more ambitious. By skimming (or trying to skim) all owners and designing a system that appeals to only 20% of the owners (the Premiers and the Premier Plus's), Marriott can make a much more profitable operation.

And the smaller participation base means less competition for those desirable weeks that the Premiers and Premier Plus's want. So they will be happy.

So, Marriott accomplishes the goal of building a flexible system that allows them to sell the entire network to new prospective customers, they make more money by skimming than they would by bringing in more owners and and they target the 20% of owners who's weeks they really want.

It's a very interesting strategy, but breaks the faith with 80%+ of the ownership who is left out in the cold. And leaves even the 20% that they are targeting with mixed feelings.

Best to all,

Greg

Throwing numbers is fine, but lets put some perspective on this... I can pay $695 to join, $199 annually for top status... granted I have to pay my maintenance fees, but since I am deeded it is less than new folks would pay...

That said... I'm still not a supporter at this point...

~ Rich

It's so much easier to sell access to all resorts (via points) versus access to one resort (via deeded weeks). Now they can sell the dream of getting into any of the Marriott properties versus buy at this resort and hopefully trade to others. It is a smart move on Marriott's part and a very quick response to the bad economy. I am impressed they made this change relatively quickly.

I'm just curious how they will market this new product to current multi-week direct purchasers. I'm looking forward to the call or email to see what they have to say to me.

They do not have to build any more nice resorts, they can create points by building lesser resorts and selling the great resorts they already have, It is the future for sure, it is more profitable to do business this way, and Marriott is about profit, they always have been, but now everybody knows it. It would be bad business for them to build expensive resorts, they will put expensive point values on average resorts, because they can.

low points

Marriott had to keep points values low so when new people buy into the new points system it will look like they have a number of places they can request to trade into. It's more for their prospective new buyers than it is for us that own. I'm sure when they build their new resorts, the points will be out of line for current owners and they will be giving lots of points away as incentives to buyers.

If you already own, and join...you get skimmed. If you deposit in II Marriott has first crack at the inventory (13 month). They win no matter what.

They are getting loads of bad press though. It's popping up on travel sites, etc. Obviously the points program is here to stay whether they makes any positive changes for current owners...we'll have to see.

I agree

I agree that the point system was not designed for current owners, and Marriott's reward for this is the huge loss of reputation and the public relations nightmare Marriott is "enjoying" now.

But the points system wasn't designed for new owners either - it was completely designed for Marriott - and I'm confident that Marriott's greed will result in a huge disappointment for their new program.

Unless and until Marriott once again realizes that the road to success is where the customer comes first, I'm sure Marriott will reap the rejection of the one-sided system they sow. It takes two to tango, Marriott - I guess you forgot that.

Best wishes,
David

Maybe the new program will fail. I don't know. But I really find it interesting that so many self-designated "experts" here seem to be so sure it will fail. That means the experts here know more than those responsible for all of the market surveys and analysis and more than the executives whose responsibility is to make money for a big corporation and who might well lose their jobs if they are wrong.

It will not fail, there is so much built into the system for Marriott to profit from, that it is hard to imagine a scenario where it will fail. It has made it much easier for them to make money than before. Nobody was talking about Marriott failing before the points system, why would we talk about Marriott failing when it just got a whole lot better for them?

cruisin said:

It will not fail, there is so much built into the system for Marriott to profit from, that it is hard to imagine a scenario where it will fail. It has made it much easier for them to make money than before. Nobody was talking about Marriott failing before the points system, why would we talk about Marriott failing when it just got a whole lot better for them?

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I think the program will be successful. The biggest problem is the maintenance fees are way too high. They will need to address it by adding weeks into the trust with MF a lot lower than $.40/point.

Actually, the floating week program was killing Marriott. If anything, this will hepl them out because they can sell all of their inventory to owners at any of the resorts now. No need to worry about having the right deeds in inventory to sell.

That alone is the reason to be concerned about the inplications to reserving and exchanging weeks.

Failure is not an option. It will be tweeked and possibly redesigned at points. They are already fixing the Interval issue (original design was that you could not look yourself) and will fix other things.

I know we are all hoping that our points allocation and the points necessary to book prime weeks will move towards parity, but I am not holding my breath.

RedDogSD said:

Failure is not an option. It will be tweeked and possibly redesigned at points. They are already fixing the Interval issue (original design was that you could not look yourself) and will fix other things.

I know we are all hoping that our points allocation and the points necessary to book prime weeks will move towards parity, but I am not holding my breath.

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What I would do is have the President of the MVCI Division write a letter for TUG only to say that they listened and decided to get rid of skim. They then take the allocations and change them so that the average point allocation equals the average point reservation required. Take a PR victory for listening to owners.

Then, I would tell the inventory acquisition team to start keeping track of the amount they gave back and start earning it back by 1) increasing MF 1%/year more than normal and 2) buying back weeks at the right time with lower than $.40/point MF, but not reducing the MF of the trust.

See how easy it is to manipulate the system? Marriott really screwed up with the skim concept. I'd seek out that product manager and fire him if he hasn't already.

Dave M said:

Maybe the new program will fail. I don't know. But I really find it interesting that so many self-designated "experts" here seem to be so sure it will fail. That means the experts here know more than those responsible for all of the market surveys and analysis and more than the executives whose responsibility is to make money for a big corporation and who might well lose their jobs if they are wrong.

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I think that is a bit harsh. Marriott designed something that suits their corporate objectives. No one knows whether it will work or not. It could be an Edsel or New Coke and flop or an iPhone with raging success. Who knows? But I would not put the corporate execs at Marriott or any organization in a position above others outside who might see the market differently. There are too many examples of how that has gone very badly wrong.

WelcomeHome said:

I agree that the point system was not designed for current owners, and Marriott's reward for this is the huge loss of reputation and the public relations nightmare Marriott is "enjoying" now.

But the points system wasn't designed for new owners either - it was completely designed for Marriott - and I'm confident that Marriott's greed will result in a huge disappointment for their new program.

Unless and until Marriott once again realizes that the road to success is where the customer comes first, I'm sure Marriott will reap the rejection of the one-sided system they sow. It takes two to tango, Marriott - I guess you forgot that.

Best wishes,
David

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Last night, that Biography program was on again, about the founding of the Marriott chain, A&W root beer, Hot Shoppes, etc. - and the entire program stressed how all the descendants who assumed leadership positions were taught to *put the customer first* - and that is how that built up from the beginning. Somewhere along the line, despite the nice family photos of JW and his sons, the company has lost their founder's message. Granted, this program only focused on the senior founders, not the present day - but the closing black screen, just before the credits, said in effect "The Marriott Company is now also feeling the results of our current economic conditions". Aren't we all? As others here have stated, I do not see any new construction by Marriott, but the taking over of other properties, and repurposing them - and thus, re-selling time in them. That's nice when a landmark hotel is on the block - and this also fits with their idea of Marriott timeshare people only wanting to trade for Marriott properties. The show also spoke of various forays into allied fields that proved unfavorable for Marriott - and their ability to make a mid-course correction. We just have to wait and see. Us? we probably will enroll, just to beat some fees - and then visit our Florida club properties ( yeah - we bought new stuff the week before this all happened - because a resale came up that was exactly what we had been looking for) and then trade out Chateau for complete weeks elsewhere, or for Rewards points if we must - but the Club points are a distant third choice for us. I know that there are folks here who are DEEPLY into timesharing, and take several weeks a year - but this is not the only thing we do to entertain ourselves - if Marriott points could be converted in Met Opera tickets, then we would perk up! So - we will enroll, but not jump headfirst into the multi-system swapping of it all. We are prepared to hold onto our week-long trading system for now - and are still doing the math over using Rewards points for a short stay (we like urban and cultural vacations - a busman's holiday for us!) or EVER using Club points for anything at all, less than a week. No two of us owners are the same, as we well know.

JimC said:

I think that is a bit harsh. Marriott designed something that suits their corporate objectives. No one knows whether it will work or not. It could be an Edsel or New Coke and flop or an iPhone with raging success. Who knows? But I would not put the corporate execs at Marriott or any organization in a position above others outside who might see the market differently. There are too many examples of how that has gone very badly wrong.

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I would suiggest it was the old program that was not working. IF the new program does not work either, then it is likely that no program that requires a large upfront cost to join is going to work anymore. There is no evidence that this economy is going to improve very much for the foreseeable future. Bringing down the cost of vacations is Marriott's objective; and if success is possible, they will be successful - more successful than if they had maintained the status quo. The status quo was not an option. This is a bad time to spend huge amounts of money building mega-resorts. This program gives Marriott a new way to sell vacations that they hope will appeal to a population that is not spending the big bucks like they use to.

In one respect, this program gives some of the people who were screaming loudly prior to the release of the program exactly what they were hoping for: the ability to stay with the weeks program they have. What happened to all those posters who were posting six months ago how Marriott ought to just leave the current weeks system alone? They in a sense did. You don't have to join, and if you do not join you can still do the same things you always did. If you don't like it, or you don't think it will work for you, then don't join.

If the competition increases for some of the prime weeks at great resorts, it is not going to come from new buyers who will not have enough points to exchange into the great resorts. It will come from existing owners who decide to jump in and find ways of making the new system work for them. But, even in that case, some existing owners are going to have to exchange their platinum weeks for any of the points exchangers to get them. So, the competition will not increase for sold out seasons. Where some additional competition will come from are at non-soldout resorts. Now, the potential exists for every unsold platinum week to have someone snagging it via an exchange and competing for the best weeks. But, the same thing happens at a sold out resort (or sold out platinum season), the difference being there your competition comes from existing owners.