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eBay Points Rental Auction

GregT

GregT

TUG Member
TUG Member
Joined
Jul 19, 2007
Messages
7,162
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1,970
Location
Carlsbad, CA
Resorts Owned
Marriott: Maui Ocean Club Lahaina Villas (3BRx5), Ko Olina, Shadow Ridge II, Willow Ridge, Aruba Ocean Club, DC Points HGVC: Flamingo, Sea World, I-Drive, Starwood Bella (x4), SDO, TradeWinds, Worldmark
TUGgers,

To close the loop on my points rental experiment, I've concluded the auction for my 2012 points. I'd listed 5,000 points for rent at a Buy-It-Now price of $3,500 and eBay has a mechanism to allow offers. I indicated in my auction that I had up to 5,775 points available for rent.

I had questions from 7 different interested parties, including a couple TUGgers. There were multiple "soft offers" at $0.40 - $0.60/point, some of which sought less than the full 5,000 points. I had one inquiry from someone willing to pay $0.70/point, but only for 475 points (with 2011 usage year). I received two firm offers, one at $0.50/point which I declined and didn't counteroffer, and then my final buyer. The auction started on Monday and was only active for 3 days (but this was also the third auction). I had 15 Watchers of my ad and it was Viewed 233 times.

My final buyer was very experienced with timeshares and referenced redweek cash rental pricing as an appropriate comparable for why their offer was fair. We agreed on a final price of $0.65/point for the full 5,775 points. Through our email interactions, I got the impression that they were less interested in trying to drive a hard bargain on price versus securing the available large block of points. He recognized that this was probably the first large block rental of Marriott vacation club points, and possibly a sign of things to come.

I encourage other TUGgers to post their renting experience as we try to figure out the market value for renting points. For the moment, $0.65 per point is now a validated price for (a large block of) points that are not facing imminent expiration.

Best to all,

Greg
 
Greg,

Intesting auction you had. I think you did real well. In my estimation you probably got at least 20%-30% more than market value. I multiplied your $.65 per point and did some comparision shopping on Redweek. I looked at a few resorts and concluded that unless the buyer was trying to get a special holiday week that was just not available anywhere else generally the points today are worth somewhere in the range of $.40-$.50 per point vs comparable rentals posted on Redweek.

For example Ko Olina early Dec week 2 bedroom ocean view is 4925 points. On red week average rental price for that period is about $2300...That equates to about $.46 per point. I looked at several resorts and this was close to the norm.

Hopefully your buyer wanted the points for a hard to get week. Then it could make sense.
 
Congratulations! Like cp73, I think you did very well. Based on rental costs, I too have concluded that the fair market value should be around $0.45-$0.50 (with the corollary that there is no need to buy points from Marriott if you can enroll + rent, or buy just 1500 base points + rent as needed). There are probably very few, if any, actual reservations you could have made and rented for more. Interesting to know what your buyer will do with them...

I suspect that as supply will increase, prices will drop accordingly.
 
Very interesting. I hope Marriott wouldn't charge us for transfer points as it would affect their sales of points.
 
I think the guy greatly overpaid compared to just renting on redweek but apparently he had his reasons for wanting the points. Good for you. Maybe it's a little safer to rent points than to rent a week!? That is, maybe the owner can't change the reservation once the transaction is done!?
 
larryallen said:
I think the guy greatly overpaid compared to just renting on redweek but apparently he had his reasons for wanting the points. Good for you. Maybe it's a little safer to rent points than to rent a week!? That is, maybe the owner can't change the reservation once the transaction is done!?
Click to expand...

Although I agree he overpaid (I was one of the lower offers Greg received), the points offer much more flexibility then renting. He can stay as many days as he needs, not just increments of 7. Even if he wanted increments of 7, there arent always consecutive weeks on redweek.

With points, he could also get multiple rooms for family and friends. Again, redweek doesnt always have two concurrent rentals during the same week. Lastly, if he takes 5 night vacations, that 4925 point Ko Olina week is 3125 points for weekdays. Some resorts offer a 50% point savings for staying 5 instead of 7 days.
 
detjason said:
Although I agree he overpaid (I was one of the lower offers Greg received), the points offer much more flexibility then renting. He can stay as many days as he needs, not just increments of 7. Even if he wanted increments of 7, there arent always consecutive weeks on redweek.

With points, he could also get multiple rooms for family and friends. Again, redweek doesnt always have two concurrent rentals during the same week. Lastly, if he takes 5 night vacations, that 4925 point Ko Olina week is 3125 points for weekdays. Some resorts offer a 50% point savings for staying 5 instead of 7 days.
Click to expand...

All,

We need to think hard about this (and I don't have all the answers). Points introduces a new complexity that is good and bad.

I no longer believe redweek provides an appropriate comparable -- partly because a specific week/date causes pricing pressure on the rentor. As that rentor get closer to the reservation week, the more the pressure to discount the price. Even an extended period to reservation (and I'm listing a June 2011 for rent right now) provides insecurity because if it doesn't go, there are limited options. (Note to Rentees: points getting close to expiration should plummet in value for the same reason, and we may see very low pricing on points post June of each year)

Renting points gives the rentee much more control, which is very valueable -- instead of being at the mercy of the Exchange gods, the points holder can secure the reservation they want -- holiday? family reunion? View category? who knows? And very very importantly, renting points provides cancelation protection -- a reservation early in the year can be canceled and those points restored for a future reservation -- even rented points with a specific use year. With Wyndham, I will make a Q1 reservation, knowing if I have to cancel, I can re-use those points later in the year. Renting a week from the owner on redweek.com has no such cancelation protection.

Finally, Marriott is charging $0.40/pt for MFs and $9.60 for the acquisition cost. This provides a mathematical comparison of the MF price plus whatever your cost of capital is for the up-front (3%?). All the sudden, $0.65 looks very reasonable.

Forgive the lengthy message, my only point is that points pricing is going to be much more complicated that I had appreciated when I began this (simple?) experiment. And I no longer believe that comparable redweek pricing is the way to look at it -- otherwise, go rent the week?

I think we need to incorporate the following into price considerations:

1) Months remaining until point usage expires (longer is better)
2) Size of the points (large blocks are rare and afford the rentee more choices with their legacy points)
3) Marriott's points price -- although "artificial", it provides a benchmark that people will reference, especially new points purchasers
4) Cancelation value -- there is significant value to being able to book a reservation, and if things change, being able to rebook a reservation easily
5) Legacy point flexibility -- renting points in a specific usage year allows the rentee to be less dependent on using their own legacy points -- ie, they can bank into a subsequent year or borrow into an earlier year and yet still secure the vacation opportunities they want in the rented points year.

All, I continue to chew on this, because it is really really interesting to me, both as a potential rentee and a potentee rentor.

And to balance the perspective -- recall that I was skimmed 1,675 points that I didn't get when I redeemed my Week 24 3BR at MOC. At $0.65/point, that's $1,000. That's alot of money.


This is really really interesting stuff (and I still hate the skim).

Best to all,

Greg
 
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GregT said:
All,

We need to think hard about this (and I don't have all the answers). Points introduces a new complexity that is good and bad.

I no longer believe redweek provides an appropriate comparable -- partly because a specific week/date causes pricing pressure on the rentor. As that rentor get closer to the reservation week, the more the pressure to discount the price. Even an extended period to reservation (and I'm listing a June 2011 for rent right now) provides insecurity because if it doesn't go, there are limited options. (Note to Rentees: points getting close to expiration should plummet in value for the same reason, and we may see very low pricing on points post June of each year)

Renting points gives the rentee much more control, which is very valueable -- instead of being at the mercy of the Exchange gods, the points holder can secure the reservation they want -- holiday? family reunion? View category? who knows? And very very importantly, renting points provides cancelation protection -- a reservation early in the year can be canceled and those points restored for a future reservation -- even rented points with a specific use year. With Wyndham, I will make a Q1 reservation, knowing if I have to cancel, I can re-use those points later in the year. Renting a week from the owner on redweek.com has no such cancelation protection.

Finally, Marriott is charging $0.40/pt for MFs and $9.60 for the acquisition cost. This provides a mathematical comparison of the MF price plus whatever your cost of capital is for the up-front (3%?). All the sudden, $0.65 looks very reasonable.

Forgive the lengthy message, my only point is that points pricing is going to be much more complicated that I had appreciated when I began this (simple?) experiment. And I no longer believe that comparable redweek pricing is the way to look at it -- otherwise, go rent the week?

I think we need to incorporate the following into price considerations:

1) Months remaining until point usage expires (longer is better)
2) Size of the points (large blocks are rare and afford the rentee more choices with their legacy points)
3) Marriott's points price -- although "artificial", it provides a benchmark that people will reference, especially new points purchasers
4) Cancelation value -- there is significant value to being able to book a reservation, and if things change, being able to rebook a reservation easily
5) Legacy point flexibility -- renting points in a specific usage year allows the rentee to be less dependent on using their own legacy points -- ie, they can bank into a subsequent year or borrow into an earlier year and yet still secure the vacation opportunities they want in the rented points year.

All, I continue to chew on this, because it is really really interesting to me, both as a potential rentee and a potentee rentor.

And to balance the perspective -- recall that I was skimmed 1,675 points that I didn't get when I redeemed my Week 24 3BR at MOC. At $0.65/point, that's $1,000. That's alot of money.


This is really really interesting stuff (and I still hate the skim).

Best to all,

Greg
Click to expand...

Greg,

Thanks for sharing the results of your auction. I agree that large blocks of points will be more valuable as it gives a lot of flexibility. I think your scenario of offering over 5000 points will justify values over $.50, but I also foresee that there will be a lot of 100 point purchases in the future, as people will have leftover points that will either be lost or someone might sell for $.25 just to get some value back. There might be some savvy buyers who accumulate a few thousand points by buying a bunch of 100 point blocks.

It will be interesting to watch in the next year.
 
scpoidog said:
Greg,

Thanks for sharing the results of your auction. I agree that large blocks of points will be more valuable as it gives a lot of flexibility. I think your scenario of offering over 5000 points will justify values over $.50, but I also foresee that there will be a lot of 100 point purchases in the future, as people will have leftover points that will either be lost or someone might sell for $.25 just to get some value back. There might be some savvy buyers who accumulate a few thousand points by buying a bunch of 100 point blocks.

It will be interesting to watch in the next year.
Click to expand...

I was thinking the smaller point purchaces will cost more $. I know I needed 25 points to cap off the stay I wanted and have 0 points left over. I'd have paid 4.00/point if I had to. I wouldn't let 100.00 prevent me from an extra night. Of course once there is some competition out there, hopefully I wouldn't have to.
 
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I hate sounding like an economist when I talk about timeshares but the question is going to be what does the supply and demand curve looks like for point rentals?

Demand side
People short a lot a few points should be willing to pay more per point as total cost impact is low. As someone said before, if I was short 25 points, I would be willing pay $4 per point as losing a extra night for $100 would make no sense.

It gets more challenging when you get to hire point values. If someone wants to get 5,000 pts, which was close to Greg's experiment size. Yes you may be able to rent for less than Greg's rental price but what is the value of the flexibility of having more than one possibility with the points.

Supply Side
People with a few points left should be saying I can't use them so I will get what I can for them which creates a low price.

While on the demand size, the question was what is the value of flexibility. The question on the supply side is what is the value of not having to deal with the standard rental risk (Destruction of property, rental agreements, etc.) How much less will someone be willing to take because I have rented the equivalent of a week's vacation (or more) without having rental risk.

The price that Greg got may be higher or lower than some may have expected but it is where a knowledgable buyer and seller came to.

Is that the equilibrium price? Who knows? People will start to determine values for those intangibles (flexibility and lack of rental risk as well as whatever else there is) and both the supply and demand side will become more apparent as more deals are done.

Interesting that since everyone thought Greg got too much. According to that theory, I would have expected a number of people saying if I get that value then I should be renting up a storm and use the money to rent a vacation another way and pocket the profit.

Like I said, I hate sounding like an economist when I talk about timeshares but sometimes it makes sense.
 
Greg

Couple things to also mention. Just because you have points it no way means its going to be easier to obtain your desired week. It may be harder depending on the resort. When you rent through redweek you get exactly what you are looking for. I wouldn't be interested in buying points on a gamble to obtaining a week. Maybe only if I knew it was available.

Also a lot of the items you mention about the advantages of points (cancellation, rescheduling) sure sounds like insurance to me, which I think II offers. I never have purchased insuranace for vacations because I am willing to take that risk without the premium. However some day I may do so.

Good comments enjoyed reading your posts.
 
Greg,

I agree with many of the things you said but had a couple of comments on some of the issues you raised.

GregT said:
All,Renting points gives the rentee much more control, which is very valueable -- instead of being at the mercy of the Exchange gods, the points holder can secure the reservation they want -- holiday? family reunion? View category? who knows?
Click to expand...

The points system is ultimately an exchange system and everything is still subject to availability. From the numerous posts from people calling to make reservations, I got the impression most were put on a waitlist. So in the end you are still subject to the mercy of the "exchange gods" and, arguably, have even less transparency into the process. It is very true however that you can guarantee a view category with a points exchange (if you get the exchange...).

GregT said:
And very very importantly, renting points provides cancelation protection -- a reservation early in the year can be canceled and those points restored for a future reservation -- even rented points with a specific use year.
Click to expand...

Overall I do agree that you get more flexibility with points than renting from an owner - but the value of that flexibility can be quantified and is not that high.

As a "rentor", I always recommend that people renting from me get travel insurance. Travel insurance covers "prepaid expenses" (timeshare rental qualifies as such) and many/most of them offer "cancel for any reason" insurance. You can the use the cash you get back to rebook your trip.

So you can put an upper bound on the insurance you get with points at $150-$250 per trip (5%-10% of the rental cost). And I say "upper bound" because travel insurance gives you a lot more, like trip interruption insurance, medical evacuation coverage, trip delay insurance, lost luggage insurance etc...

GregT said:
Finally, Marriott is charging $0.40/pt for MFs and $9.60 for the acquisition cost. This provides a mathematical comparison of the MF price plus whatever your cost of capital is for the up-front (3%?). All the sudden, $0.65 looks very reasonable.
Click to expand...

The same can be said for weeks rentals (I could easily "justify" a rental asking price of $1500 for an Orlando timeshare), yet many timeshares rent below the cost of MFs, let alone the cost of MFs + opportunity cost. Ultimately, it's all about supply and demand...
 
GregT said:
All,


Finally, Marriott is charging $0.40/pt for MFs and $9.60 for the acquisition cost. This provides a mathematical comparison of the MF price plus whatever your cost of capital is for the up-front (3%?). All the sudden, $0.65 looks very reasonable.

So, if $0.65 becomes the equilibrium rental price and $0.40 is a stable MF, Then an investor who wants a 5% return on investment should be willing to pay $5.00 per point on a resale. However, if a buyer demands a higher risk premium, or wants to be more competitive with the resale market for weeks, the buyer might offer significantly less than $5.
Click to expand...
 
Need 50 points

I am in the planning stages of a trip to Aruba Surf Club later this year using points. I called Marriott and they have avail of a 1 BR OS or OV, but it's 2350points and I have 2300 points.

I looked at the TUG marketplace and e-Bay, but didn't see any offers to rent points. Is there another avenue or place to look? I know Greg T conducted a successful auction last year, but haven't seen much else since.

Once again, I'm just in the planning stages, but figure that there have to be some folks out there w/ leftover points that they aren't going to use.

Any suggestions? Thanks.
 
scpoidog said:
I am in the planning stages of a trip to Aruba Surf Club later this year using points. I called Marriott and they have avail of a 1 BR OS or OV, but it's 2350points and I have 2300 points.

I looked at the TUG marketplace and e-Bay, but didn't see any offers to rent points. Is there another avenue or place to look? I know Greg T conducted a successful auction last year, but haven't seen much else since.

Once again, I'm just in the planning stages, but figure that there have to be some folks out there w/ leftover points that they aren't going to use.

Any suggestions? Thanks.
Click to expand...


GregT: you are like a chemist in his laboratory, making a lot of experience and sharing with his entourage of scientist. Very interesting and thanks for your work.

scpoidog: If you just need 50 points, I can do you this favor. Just call MVCI and let me know how to proceed (process, fees, etc.). We will talk price after we know if it is possible. Please share here, so we can all keep doing experiments!
 
Excellent Thread. I spend so much time looking through thread to find the information I am looking for.

Although I have not put up points for rent yet, I expect to next year. In my case it might be better to offer to reserve a specific week for the renter. Since I can reserve 13 months out on a property that has availability.

The "undisclosed by Marriott" part of that is even though I can reserve 13 months out I can not get wait listed 13 months out. I have to wait until 12 months for that.

I have also only seen 1 posting for rental points on Ownertrades.com (3000 for 0.50)
 
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davidn247 said:
GregT: you are like a chemist in his laboratory, making a lot of experience and sharing with his entourage of scientist. Very interesting and thanks for your work.

scpoidog: If you just need 50 points, I can do you this favor. Just call MVCI and let me know how to proceed (process, fees, etc.). We will talk price after we know if it is possible. Please share here, so we can all keep doing experiments!
Click to expand...

Yes, please keep us posted. I have a few "hanging chad" type points too. Also I have 800 bonus point I don't think I will find a use for (Sorry I cant transfer those)
I am hopeful to find a good trading group of friends for the little points.
 
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DVCers have been renting each others points for years.
It's a very healthy points market.

I personally as a DVC member prefer the deposit of points into my account and knowing that I control the transaction completely as opposed to having to trust someone. Especially if you are trying to book 1 year in advance. I've heard that some rentors have cancelled ressies on people, so definetely I can see the benefit of wanting the points in your account.

Looks like Marriott owners are going to have that option too.

Good for you. :clap:

I think this is a good thing for those who converted to points.
Gives you lots of options.
 
Resale of Points

I have not been successful at finding any deed recorded showing an secondary market sale of points. MVCI having reserved the right to charge "up to USD 1.00 per point for waiving ROFR" will have serious impact on resales.

We shall see...


DavidBr said:
GregT said:
All,


Finally, Marriott is charging $0.40/pt for MFs and $9.60 for the acquisition cost. This provides a mathematical comparison of the MF price plus whatever your cost of capital is for the up-front (3%?). All the sudden, $0.65 looks very reasonable.

So, if $0.65 becomes the equilibrium rental price and $0.40 is a stable MF, Then an investor who wants a 5% return on investment should be willing to pay $5.00 per point on a resale. However, if a buyer demands a higher risk premium, or wants to be more competitive with the resale market for weeks, the buyer might offer significantly less than $5.
Click to expand...
Click to expand...
 
TEDK63 said:
Yes, please keep us posted. I have a few "hanging chad" type points too. Also I have 800 bonus point I don't think I will find a use for (Sorry I cant transfer those)
I am hopeful to find a good trading group of friends for the little points.
Click to expand...

So, here is the story.

We went ahead with my new buddy scpoidog. He paypaled me $ for the 50 points and I just called MVCI to transfer them to his account (you just need # number and full name). After she put me on hold for 10 minutes (she was a first timer....), everything went OK.

Note that DC points can be transfered in the increment of 25 points and there is no limits on how much you can transfer. She mentionned it will take 48 hours to make sure (lousy system apparently...), but it seems that everything is already recorded for scpoidog (she double-checked his account).

Note that "rented" DC points cannot be banked, borrowed and/or transfer for Marriott Rewards Points. You will have to use them before December 2011. Also, the transaction cannot be reversed.

Enjoy your vacation in Aruba!
 
Thanks David for the update. We just (all of us wishing to rent/ borrow our excess points) need to establish a good forum to conduct business. I currently using Mouseowners.com to find someone wanting a Marriott property.
The TUG market place doesn't seem to fit the bill

It is all a little haphazzard though.

I looked on ebay today for points for 'rent' but I did not see any Marriott points. Perhaps I am looking in the wrong places
 
TEDK63 said:
Thanks David for the update. We just (all of us wishing to rent/ borrow our excess points) need to establish a good forum to conduct business. I currently using Mouseowners.com to find someone wanting a Marriott property.
The TUG market place doesn't seem to fit the bill

It is all a little haphazzard though.

I looked on ebay today for points for 'rent' but I did not see any Marriott points. Perhaps I am looking in the wrong places
Click to expand...

Ted,

This is our short-term problem, waiting for a good forum to open up (like mouseowners.com and WMowners.com) that allows for easy bid/asks on points rentals.

I don't believe TUG intends to open a sub-forum to facilitate this and, like you, I don't find TUG's marketplace to be particularly conducive to points rentals, so we will have to keep looking.

Best,

Greg
 
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It worked "Rental" points transferred

davidn247 said:
So, here is the story.

We went ahead with my new buddy scpoidog. He paypaled me $ for the 50 points and I just called MVCI to transfer them to his account (you just need # number and full name). After she put me on hold for 10 minutes (she was a first timer....), everything went OK.

Note that DC points can be transfered in the increment of 25 points and there is no limits on how much you can transfer. She mentionned it will take 48 hours to make sure (lousy system apparently...), but it seems that everything is already recorded for scpoidog (she double-checked his account).

Note that "rented" DC points cannot be banked, borrowed and/or transfer for Marriott Rewards Points. You will have to use them before December 2011. Also, the transaction cannot be reversed.

Enjoy your vacation in Aruba!
Click to expand...

I just confirmed the points in my account (less than 24 hours), so everything worked out great. Paypal helps with the transaction and has it's own skim, but it was a lot easier than I thought it would be.

I hope that these types of transactions will occur on a regular basis, as there will be people out there like davidn247 that have some points left over and people like me who are a little short of getting that particular view/room.

I still need to make my reservation (am still in the planning stages), but these 50 points will be the difference between a Garden View with 350 leftover points and an Oceanside/front and 0 points left at the end of my year.

GregT has set up a nice points rental forum that should help others in the future.

http://members.boardhost.com/MVCDPoints/index.html

Thanks again David!!!!!!
 
Secondary market for point rental

I think that a "market" for DC point rentals will be more likely to develop in 2012. People who bought points direct from MVCI in 2010 when the program launched could have rolled them to 2011. Given that DC was only sold for Hal a year it is more likely that 2010 buyers that started with 2011 usage and 2011 buyers that started with 2011 usage will see themselves in the harbor or lose it when their banked 2012 points will expire in 2012.

I suspect that shortly thereafter if not sooner we will see for sale ads for dc points from certain owners. I also suspect that the resale market for dc points will be weak because of the $1.00 per point that mvci cab charge for waiving rofr. This will make some unhappy people hold on a little longer I think.
 
I would suspect a DC points rental market to take a while to develop. I am sure the DVC rental market didn't develop overnight.
 
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