Rental value of a point.

$10 per point cost. $9.20 per point promotional cost.

Let's see, present value of indefinite future point usability takes a bit of calculus (and imagination), doesn't it?

And then there's the $.40 MF.

So, you mathematicians out there. Take a look at what you can buy at current resort points values, and tell me...

What is a fair dollar-per-point for a Trust point rental?

What is a fair dollar-per-point for a legacy enroll point rental?

(Actually, this isn't an abstract question for me. I have a cousin that owns a lot of weeks so the value of enrolling is probably there for him. If I do decide to enroll my couple of weeks ... and occasionally need some extra points for a particular stay I want to make, how much should I pay him?)

"Whatever the market says it is" is not the answer I'm looking for. I'm looking for some kind of reasonable arithmentic.

Interesting question -- my only metric is the Worldmark rental market.

MF's are approx 4.8 cents per point. You can rent them all day long for 5.5 cents per point. It used to be 6.0 cents per point.

Obviously, the closer you get to a point expiring, the lower the rental price is -- I've seen 4 cents per point with only 30-60 days of usage left.

If this comparator holds, then Marriott points are most likely based upon the $0.40 MF being charged.

Suggests 3 tiers:

Points with 12+ months left until expiration -- perhaps $0.50 - $0.55 in rental price

Points with 6-9 months left until expiration -- perhaps $0.40 per point

Points with less than 3 months until expiration -- perhaps $0.30 per point

I know there's "gaps" there in the months, but I'm not sure what I would be willing to pay for those gap points.

This isn't that different from the cash rental prices per redweek.com -- a 2BR MOC that is 12 months away is renting for $3,500 per week. 6 months out it's closer to $2,500 - $3,000. 2-3 months out, it might be $2,000.

I am very interested in a rental market opening up --- I would like to rent points with less than 6 months of life left for $0.30 - $0.40 (absent a market established price), and if that gets combined with a FlexChange program (someday) last minute reservations will be very attractive.

Recall that the Asia-Pacific equivalent of FlexChange would likely have a 1BR at Ko Olina for 1,000 points -- if I can rent those points for $0.30 - $0.40 per point, that's a great reservation.

Of course, many many assumptions here!

Best to all,

Greg

I know Marriott said there is an option to rent points from other owners.

Has anyone asked how this works in practice? Is there a form you fill out with both account numbers on it, have the owner sign and fax it in? Have they even established a process for this or are they just saying you can rent points and still have no infrastructure set to support it?

cbdmvci said:

$10 per point cost. $9.20 per point promotional cost.

Let's see, present value of indefinite future point usability takes a bit of calculus (and imagination), doesn't it?

And then there's the $.40 MF.

So, you mathematicians out there. Take a look at what you can buy at current resort points values, and tell me...

What is a fair dollar-per-point for a Trust point rental?

What is a fair dollar-per-point for a legacy enroll point rental?

(Actually, this isn't an abstract question for me. I have a cousin that owns a lot of weeks so the value of enrolling is probably there for him. If I do decide to enroll my couple of weeks ... and occasionally need some extra points for a particular stay I want to make, how much should I pay him?)

"Whatever the market says it is" is not the answer I'm looking for. I'm looking for some kind of reasonable arithmentic.

Click to expand...

I'll take a stab at it!!!

I think that 0.55 to .60 is a good starting point. The more desirable the reservation possibly slightly more.

My reasoning is that a summer week at Hilton Head is 4500 points ocean side unit. 4500 x .40 (current maintenance fee) = $1800. They have to recoup that just to break even but will be able to get more than that based on past experience (except for extreme last minute rentals). I have rented there for a few years and have watched the prices fairly closely for that time frame. You would say then if they need $1800 to break even why not charge possibly .80 a point.....


Because someone renting points is handicapped by the week owner who is also renting that week but has lower maintenance fees (approx $1100). A week owner can even negotiate slightly lower with a potential renter and still almost double their yearly maintenance fees.

I have not done my reasoning at other locations because I lack the knowledge and experience but would be curious if others agree.

And I'm thinking there will be a lot of people rent small quantities for .30-.40 per point, just to recoup most of their expenses, esp. the second half of the year. The way the system is set up owners are bound to have lots of "breakage" and all but the savviest owners will have a couple hunred points here and there- not enough to really do anything with, that they'll be happy to recoup some of their cost on. People will have traded for points and find they didn't get what they wanted and be scrambling to recoup something, or they will have borrowed too much and forgotten to bank them. Lots of reasons why people will be renting at a reduced price.

I'd say they are worth about $1/point. I haven't done an analysis yet to prove it mathematically. But, that's what I give it with my thumb in the air.

The only reason why I value it so low is because $.40/point MF is WAY TOO HIGH.

BocaBum99 said:

I'd say they are worth about $1/point. I haven't done an analysis yet to prove it mathematically. But, that's what I give it with my thumb in the air.

The only reason why I value it so low is because $.40/point MF is WAY TOO HIGH.

Click to expand...

Are you thinking of resale value??? $1 a point is way too high. No way I would pay that much. Convert that to the cost to rent a week. $1900 for May in Orlando? No way.

I think the value is determined a lot by what type of points they are, either lagacy or trust. It does seem true that Marriott isn't instantly confirming legacy points with trust inventory. The trust resorts are the newer resorts and seem overall to have higher point values. Though perhaps that drives the price down more since more points are needed.

BocaBum99 said:

I'd say they are worth about $1/point. I haven't done an analysis yet to prove it mathematically. But, that's what I give it with my thumb in the air.

The only reason why I value it so low is because $.40/point MF is WAY TOO HIGH.

Click to expand...

Very interesting -- but how do I reconcile that it takes 3,725 to book a 1BR OV at Ko Olina (that I can rent directly from owner for $1,500)?

Is the concept instead that we should think about what Marriott charges for that same unit ($2,800?)?

I still don't think I personally would ever pay more than $0.50 per point to rent (single use), and that's with alot of time left to use that point. I may be thinking of it incorrectly, but I'm thinking about what I would pay to rent the unit itself directly from the owner, versus what I pay to some to rent the point (and then book the unit).

Very very interesting. If the market rental price truly emerges anything close to $1/point (single use), I think I will become a rentor, not a rentee, skim be damned.

Best to all,

Greg