Why VC points are both equal and separate.

windje2000 · Apr 2, 2012

INTRODUCTION

There's been a lot of posts about the similarities and differences between trust and legacy points. This post approaches that question from an accounting perspective. I know what you're thinking, but if you understand how your checking account at the bank works you will understand the mechanics of DClub bookkeeping.

GregT [LINK http://www.tugbbs.com/forums/showthread.php?p=1129935#post1129935 ] posted a while back the substance of a discussion he had with customer advocacy on how the DC exchange company operates with respect to legacy owners. That post provides some significant insights into the mechanics of how Marriott is approaching exchanges.

This post discusses the nuts and bolts of how those policies are implemented from an accounting/bookkeeping perspective. It describes the likely mechanics of accounting for the occupancy assets owned and annual occupancy obligations of the trust and exchange companies.

OWNERS' RESERVATIONS v. EXCHANGES

All occupancy transactions are either reservations of owned property . . . or exchanges.
Legacy weeks owners can only reserve what they own. Their week.
Trust owners can only reserve what they own. The weeks in the Trust.

Suppose, for example, that the trust owned only one resort. A trust owner reserving at the single trust owned resort is doing exactly the same thing as the weeks owner reserving at his or her home resort. (The fact that the trust owns more than one resort does not change that basic principle.)

Weeks owners therefore either reserve their week . . . or elect points to exchange occupancy . . .through the exchange company.

Trust points owners either reserve the property they own in the trust or . . . exchange for a non trust property . . . through the exchange co.

A weeks owner cannot RESERVE trust inventory for the same reason a trust owner cannot RESERVE inventory at a legacy resort that is not owned by the trust. The trust is the 'home resort' for the points owners. You as a weeks owner have the same right to the weeks owned by the Trust as the points owner has to the nontrust weeks at the resort you own, i.e. none.

The notion that it's unfair that a legacy owner has no ability to reserve trust inventory is wrong for exactly the same as an owner of SurfWatch thinking it is unfair that he can't make a reservation at Newport Coast Villas.

Each, however, can EXCHANGE for what is not owned.

This is why there will always be two buckets . . . unless the legal form of ownership is changed.

ACCOUNTING 101

Suppose (hypothetically) there was only a Trust based form of ownership. How does the bookkeeping work for each year's occupancy?

Just like your checking account. When you put money in your checking account, the bank records the cash as an asset and the obligation to give you your cash in the future as an obligation. Write a check, and the bank's cash balance is reduced by the amount of the check and its obligation to you is reduced by the same amount.

The trust works exactly the same way.

TRUST OCCUPANCY ACCOUNTING

The system is denominated in weeks.
Every year, the weeks owned by the trust are accounted for as individual days.
Each day is priced in points. Occupancy represents a trust asset.
Each owner's annual unredeemed points (points outstanding) represents a trust obligation.

When occupancy is reserved, a transaction is recorded where the trust points obligation balance is reduced and the trust occupancy asset balance is reduced. (A points owner . . . owed his year x occupancy . . . was paid.) Just like writing a check.

The process starts over with the next year. (Banking and borrowing are simply carryovers from one year to the next.)

LEGACY OWNERSHIP ACCOUNTING - POINTS ELECTORS

Legacy points in the exchange co probably have the same inner workings. When you elect points for a year, a liability balance reflecting the points obligation is created and your occupancy becomes an asset having a value of a certain number of points on the books of the exchange company.

The exchange company balance sheet has more owner occupancy assets than owner occupancy obligations, owing to skim.

Transactions with legacy points to obtain legacy occupancy are probably identical to the Trust points transactions discussed above.

There are two parallel programs - with two balance sheets and two sets of operating statements.

THE EXCHANGE INTERACTION BETWEEN LEGACIES AND POINTS OWNERS

If no legacy owner ever wanted a occupy a Trust property and no Trust owner ever wanted to occupy a legacy property, these systems would operate side by side and never interact.

What happens when a Trust point owner wants a Legacy based non trust occupancy?

The exchange co provides the selected occupancy (if available) to the points owner, and reduces the occupancy asset on its balance sheet.

What's the other side of the accounting entry?

It must be some form of an intercompany transfer.

1. It could be in the form of an IOU. The Trust side ends up owing the Legacy side occupancy having the specified points price.

The legacy occupancy asset is replaced by an intercompany receivable or IOU.

The trust balance sheets reduces the points obligation to the owner (who got the exchange co occupancy) and substitutes a points obligation to the exchange co. Based on GregT's post, this is probably how it occurs.

2. It could also be that the Exchange Co ends up with the exchanger's Trust points as an asset. A legacy exchanger who subsequently requests occupancy that only is available in the Trust could obtain that by the Exchange co swapping his or her legacy points for those trust points, and then immediately completing the transaction. This is probably NOT what is happening.

In sum

1. The exchange co gives up legacy occupancy and probably gets an IOU.

2. The trust owes occupancy to the exchange co. instead of the trust points owner.

(I believe this is what Perry was referring to when he postulated three buckets - 1. trust 2. legacy, and 3. IOU.)

That IOU could (and should) be paid instantly if the was a corresponding request for Trust occupancy costing the same number of points by a Legacy points elector . . . and Marriott chose to balance the books by fulfilling that request.

THE STING???

But, based on GregT's post, that is exactly what Marriott is choosing NOT to do.

1. They won't immediately settle up an IOU from the trust side to the legacy side . . . despite the fact that the Trust owner snagged the deposited legacy occupancy . . . which event should make equivalent Trust inventory available to the legacy.

Instead they are waiting . . . for some unknown time period . . . to see if there are other Trust owners who might want particular Trust inventory . . . rather than settling up the IOU with the legacy side.

2. They also seem reluctant to 'swap' inventory between the two sides to facilitate reservations for legacies who bought trust points for 'combined' exchanges.

[As noted above, Marriott could simply transfer the Trust points (as an asset) to the exchange company, which could then use them to satisfy a legacy request for trust inventory. That would be the simplest way of managing the interchange as opposed to moving inventory between the exchange co and trust. An additional benefit would be that the auditors would be able to readily verify that ONLY trust points were employed to make trust property reservations. Note that if they elected to follow this procedure they would make it impossible to observe what Fractional Traveler is trying to prove by experimentation. See post at this LINK http://www.tugbbs.com/forums/showpost.php?p=1271671&postcount=47 ]

CONCLUSIONS

It would appear that legacy owners . . . who elect points . . . are lending their weeks to the Trust . . . for no compensation.

Moreover, those loans are made at a discount to their points value.

Those loans give Marriott the right to reserve the occupancy associated with those weeks. (Will they select the best of the season? I would . . . if I could. Their behavior as regards II deposits recently posted on TUG would tend to confirm that. LINK http://www.tugbbs.com/forums/showthread.php?t=168111 )

Those loans occur at the moment points are elected.

The upshot is that legacies . . . who elect points . . . are essentially subsidizing the DC program. They get to select (from an exchange co potentially populated with Trust IOUs) from the inventory that remains after the points owners have had the first shot at the buffet.

That's probably why there is no legacy 'request first' in this new DC system . . . . and probably never will be.

ADDITIONAL QUESTIONS

How is the waitlist in DC prioritized? Everyone I've asked states emphatically that it is first come first served.

Is Marriott acting similarly with the deposits in the corporate II account, 'holding' them for the potential benefit of points owners?

SueDonJ · Apr 2, 2012

I can't tell you how many times I've wished that somebody would write a clear, concise post detailing exactly how and why Trust and Legacy Points can never be completely equal - at least with respect to inventory access. And voila!, here you've done it! Very nice, much appreciated, you've earned an A+ on the final. If they gave out stickers here you'd deserve whichever superhero is your favorite.

Now, can you please permanently link this post in your signature? I have a feeling it's one we'll all be referring back to time and time again. (I won't mind if you get all smug and call it something like, "The Post You All Wish You'd Written," but probably you're more modest than I'd be if I came up with this flash of brilliance. :hysterical: )

Seriously, nice job. And sincerely appreciated.

GregT · Apr 2, 2012

WindJE,

An excellent post -- thank you for the summary and commentary. It remains interesting studying the evolution of the system and its impact on us. I think your title is excellent -- and accurate.

Thanks again,

Greg

SueDonJ · Apr 2, 2012

GregT said:
WindJE,

An excellent post -- thank you for the summary and commentary. It remains interesting studying the evolution of the system and its impact on us. I think your title is excellent -- and accurate.

Thanks again,

Greg

But it's so blah to just link things with their proper names! For example, I'd link your spreadsheet as, "The Most Helpful DC Info Compilation," and I'd link your 'my website' thing as, "The Best DC Points Rental Site EVER." And if dioxide ever adds his DC conveyances thread to his signature, I'd link that as, "Don't Think I'm Not Watching You, MVW."

Really, flashes of brilliance don't happen often. Own them! Celebrate them!

RBERR1 · Apr 2, 2012

This is a really good post.

I think that MVC should be required to have the trust pay at the time that a trust owner snags inventory from the exchange company. Effectively all it would be doing at that point is made the trust inventory deposited into the exchange company available to both legacy and trust participants in the DC program.

FractionalTraveler · Apr 2, 2012

Great post! This really helps in understanding the mechanics of the system.

I guess after reading some of the conclusions, I'm glad I elected to purchase trust points and have access to the best reservations within both buckets.

timtax · Apr 2, 2012

Request first

"That's probably why there is no legacy 'request first' in this new DC system . . . . and probably never will be."

As a legacy owner, I do feel that I have a request first control in that I can call my VOA and ask if my desired week(s) and locations are available before I elect points. In this way I can withhold my PlatPlus OW week until they give me what I want.

dioxide45 · Apr 2, 2012

timtax said:
"That's probably why there is no legacy 'request first' in this new DC system . . . . and probably never will be."

As a legacy owner, I do feel that I have a request first control in that I can call my VOA and ask if my desired week(s) and locations are available before I elect points. In this way I can withhold my PlatPlus OW week until they give me what I want.

The problem is though that you have to keep calling, you can't even check online since you have to have the points converted to search online. This is unlike in II where you can put in an ongoing request. The ability to waitlist prior to electing would be HUGE.

Beefnot · Apr 2, 2012

Impressive summary.

SMB1 · Apr 2, 2012

windje2000 said:
INTRODUCTION

The upshot is that legacies . . . who elect points . . . are essentially subsidizing the DC program. They get to select (from an exchange co potentially populated with Trust IOUs) from the inventory that remains after the points owners have had the first shot at the buffet.

That's probably why there is no legacy 'request first' in this new DC system . . . . and probably never will be.

I clearly don't know as much about this as you, but I question this part. I have 9000 something legacy points and 2000 trust points. First thing 13 months out I went on line and reserved a 2BR Mountainside, 7 nights, presidents week. I think of this as probably one of the most difficult reservations in the system. I don't have enough trust points for the whole week. And if some or all of the nights were from a legacy deposit in the exchange company...at the very least... it would appear that they are not saving those exclusively for trust point reservations.

seema · Apr 2, 2012

windje2000 said:
INTRODUCTION

There's been a lot of posts about the similarities and differences between trust and legacy points. This post approaches that question from an accounting perspective. I know what you're thinking, but if you understand how your checking account at the bank works you will understand the mechanics of DClub bookkeeping.

GregT [LINK http://www.tugbbs.com/forums/showthread.php?p=1129935#post1129935 ] posted a while back the substance of a discussion he had with customer advocacy on how the DC exchange company operates with respect to legacy owners. That post provides some significant insights into the mechanics of how Marriott is approaching exchanges.

This post discusses the nuts and bolts of how those policies are implemented from an accounting/bookkeeping perspective. It describes the likely mechanics of accounting for the occupancy assets owned and annual occupancy obligations of the trust and exchange companies.

OWNERS' RESERVATIONS v. EXCHANGES

All occupancy transactions are either reservations of owned property . . . or exchanges.

Legacy weeks owners can only reserve what they own. Their week.

Trust owners can only reserve what they own. The weeks in the Trust.

Suppose, for example, that the trust owned only one resort. A trust owner reserving at the single trust owned resort is doing exactly the same thing as the weeks owner reserving at his or her home resort. (The fact that the trust owns more than one resort does not change that basic principle.)

Weeks owners therefore either reserve their week . . . or elect points to exchange occupancy . . .through the exchange company.

Trust points owners either reserve the property they own in the trust or . . . exchange for a non trust property . . . through the exchange co.

A weeks owner cannot RESERVE trust inventory for the same reason a trust owner cannot RESERVE inventory at a legacy resort that is not owned by the trust. The trust is the 'home resort' for the points owners. You as a weeks owner have the same right to the weeks owned by the Trust as the points owner has to the nontrust weeks at the resort you own, i.e. none.

The notion that it's unfair that a legacy owner has no ability to reserve trust inventory is wrong for exactly the same as an owner of SurfWatch thinking it is unfair that he can't make a reservation at Newport Coast Villas.

Each, however, can EXCHANGE for what is not owned.

This is why there will always be two buckets . . . unless the legal form of ownership is changed.

ACCOUNTING 101

Suppose (hypothetically) there was only a Trust based form of ownership. How does the bookkeeping work for each year's occupancy?

Just like your checking account. When you put money in your checking account, the bank records the cash as an asset and the obligation to give you your cash in the future as an obligation. Write a check, and the bank's cash balance is reduced by the amount of the check and its obligation to you is reduced by the same amount.

The trust works exactly the same way.

TRUST OCCUPANCY ACCOUNTING

The system is denominated in weeks.

Every year, the weeks owned by the trust are accounted for as individual days.

Each day is priced in points. Occupancy represents a trust asset.

Each owner's annual unredeemed points (points outstanding) represents a trust obligation.

When occupancy is reserved, a transaction is recorded where the trust points obligation balance is reduced and the trust occupancy asset balance is reduced. (A points owner . . . owed his year x occupancy . . . was paid.) Just like writing a check.

The process starts over with the next year. (Banking and borrowing are simply carryovers from one year to the next.)

LEGACY OWNERSHIP ACCOUNTING - POINTS ELECTORS

Legacy points in the exchange co probably have the same inner workings. When you elect points for a year, a liability balance reflecting the points obligation is created and your occupancy becomes an asset having a value of a certain number of points on the books of the exchange company.

The exchange company balance sheet has more owner occupancy assets than owner occupancy obligations, owing to skim.

Transactions with legacy points to obtain legacy occupancy are probably identical to the Trust points transactions discussed above.

There are two parallel programs - with two balance sheets and two sets of operating statements.

THE EXCHANGE INTERACTION BETWEEN LEGACIES AND POINTS OWNERS

If no legacy owner ever wanted a occupy a Trust property and no Trust owner ever wanted to occupy a legacy property, these systems would operate side by side and never interact.

What happens when a Trust point owner wants a Legacy based non trust occupancy?

The exchange co provides the selected occupancy (if available) to the points owner, and reduces the occupancy asset on its balance sheet.

What's the other side of the accounting entry?

It must be some form of an intercompany transfer.

1. It could be in the form of an IOU. The Trust side ends up owing the Legacy side occupancy having the specified points price.

The legacy occupancy asset is replaced by an intercompany receivable or IOU.

The trust balance sheets reduces the points obligation to the owner (who got the exchange co occupancy) and substitutes a points obligation to the exchange co. Based on GregT's post, this is probably how it occurs.

2. It could also be that the Exchange Co ends up with the exchanger's Trust points as an asset. A legacy exchanger who subsequently requests occupancy that only is available in the Trust could obtain that by the Exchange co swapping his or her legacy points for those trust points, and then immediately completing the transaction. This is probably NOT what is happening.

In sum

1. The exchange co gives up legacy occupancy and probably gets an IOU.

2. The trust owes occupancy to the exchange co. instead of the trust points owner.

(I believe this is what Perry was referring to when he postulated three buckets - 1. trust 2. legacy, and 3. IOU.)

That IOU could (and should) be paid instantly if the was a corresponding request for Trust occupancy costing the same number of points by a Legacy points elector . . . and Marriott chose to balance the books by fulfilling that request.

THE STING???

But, based on GregT's post, that is exactly what Marriott is choosing NOT to do.

1. They won't immediately settle up an IOU from the trust side to the legacy side . . . despite the fact that the Trust owner snagged the deposited legacy occupancy . . . which event should make equivalent Trust inventory available to the legacy.

Instead they are waiting . . . for some unknown time period . . . to see if there are other Trust owners who might want particular Trust inventory . . . rather than settling up the IOU with the legacy side.

2. They also seem reluctant to 'swap' inventory between the two sides to facilitate reservations for legacies who bought trust points for 'combined' exchanges.

[As noted above, Marriott could simply transfer the Trust points (as an asset) to the exchange company, which could then use them to satisfy a legacy request for trust inventory. That would be the simplest way of managing the interchange as opposed to moving inventory between the exchange co and trust. An additional benefit would be that the auditors would be able to readily verify that ONLY trust points were employed to make trust property reservations. Note that if they elected to follow this procedure they would make it impossible to observe what Fractional Traveler is trying to prove by experimentation. See post at this LINK http://www.tugbbs.com/forums/showpost.php?p=1271671&postcount=47 ]

CONCLUSIONS

It would appear that legacy owners . . . who elect points . . . are lending their weeks to the Trust . . . for no compensation.

Moreover, those loans are made at a discount to their points value.

Those loans give Marriott the right to reserve the occupancy associated with those weeks. (Will they select the best of the season? I would . . . if I could. Their behavior as regards II deposits recently posted on TUG would tend to confirm that. LINK http://www.tugbbs.com/forums/showthread.php?t=168111 )

Those loans occur at the moment points are elected.

The upshot is that legacies . . . who elect points . . . are essentially subsidizing the DC program. They get to select (from an exchange co potentially populated with Trust IOUs) from the inventory that remains after the points owners have had the first shot at the buffet.

That's probably why there is no legacy 'request first' in this new DC system . . . . and probably never will be.

ADDITIONAL QUESTIONS

How is the waitlist in DC prioritized? Everyone I've asked states emphatically that it is first come first served.

Is Marriott acting similarly with the deposits in the corporate II account, 'holding' them for the potential benefit of points owners?

What do you think of my post (see link to thread: http://www.tugbbs.com/forums/showthread.php?t=168246) quoting an email statement of one MVCI source, getting a similar email quote from another source, and still getting a verbal only quote from the third source.

They all said that all VC points (both legacy week points and trust points) are equal in terms of value and access, in terms of the practical use of using either or a combination of the 2 sets of points? Do you agree with their statements - in terms of end users' perspective?

dioxide45 · Apr 2, 2012

In the end, the DC exchange company isn't any different than Interval International. The only difference is the currency, DC is points and II is weeks.

With II, I can't reserve at Starwood properties, and they cant reserve my weeks at Marriott. Now if I offer II my week and/or a Starwood owners deposits theirs in to II, then we can access their inventory. DC exchange company is just that, it has to provide the same disclosure that II does.

windje2000 · Apr 2, 2012

seema said:
What do you think of my post (see link to thread: http://www.tugbbs.com/forums/showthread.php?t=168246) quoting an email statement of one MVCI source, getting a similar email quote from another source, and still getting a verbal only quote from the third source.

They all said that all VC points (both legacy week points and trust points) are equal in terms of value and access, in terms of the practical use of using either or a combination of the 2 sets of points? Do you agree with their statements - in terms of end users' perspective?

Legacy and Trust points are equal in purchasing power.

They differ in what they can access the same way an owner of SurfWatch has greater access to SurfWatch than an owner of Barony --- and vice versa.

Trust points have greater access to Trust properties. They own them.

What the messages you reference are saying is that Trust and Legacy points have equal access to what is in the exchange co inventory. That may well be true.

But remember the issues under discussion in this post are:

what ends up in the exchange company inventory, and
when does it get there.

Marriott manages the timing and composition of the inter-entity exchanges between the trust and the exchange company, which was the subject of GregT's referenced post. Do you think Marriott might be motivated to manage that process for the benefit of those buying those expensive points?

Faith is believing in what cannot be proven. I won't believe management representations until I see them in a legally enforceable document that can't be unilaterally amended without notice at a time of Marriott's choosing.

In other words, I'm from Missouri. Show me.

windje2000 · Apr 2, 2012

SMB1 said:
I clearly don't know as much about this as you, but I question this part. I have 9000 something legacy points and 2000 trust points. First thing 13 months out I went on line and reserved a 2BR Mountainside, 7 nights, presidents week. I think of this as probably one of the most difficult reservations in the system. I don't have enough trust points for the whole week. And if some or all of the nights were from a legacy deposit in the exchange company...at the very least... it would appear that they are not saving those exclusively for trust point reservations.

Do you know the source of the inventory you reserved? I don't know enough about Mountainside (sold out?, points cost of that week?, is it a fixed week, etc.) to comment, but it would seem to be a very expensive occupancy for a trust points only owner.

Is it so expensive that there is a very small universe of trust point only owners able to afford it even with borrowing?

I'd be interested in puckman's insights as I believe he is knowledgeable about this resort.

amycurl · Apr 2, 2012

This should probably be made into a sticky, IMHO. As often as this topic comes up, having it easily accessible to newbies would be ideal.

puckmanfl · Apr 2, 2012

good evening....

Interesting speculation regarding source of the Pres week Mountainside unit...

Possibilities include...

#1 A Legacy week turned in for MR points. Highly unlikely, an owner would be nuts to do this...

#2 A Legacy week turned in for DC points..This is more likely as the owner probably snagged 6500 DC points for this one..

#3 Unsold MVCD owned inventory put in the trust... My sales rep told me this past week that MVCD was preparing for the Trust for quite some time and withheld weeks in sold out joints to put in the Trust. Will have to go to Greg and Dioxide Trust chart for this one...

7725 pts quite a load...for one week!!! even Presidents week...

p.s I believe Pres week is Plat Plus at Mountainside but just Platinum at Summitt...

p.s.s. the ressies are in trhe DC bucket!!!! try getting Pres week at Mountainside on DC exchange..again any owner of Pres week at Mountainside is doomed to a downtrade with II....

My brother owns Pres week at Aruba and he either occupied or rented because any II trade (without locking off) was a downtrade... With DC points he has snagged enough points for 2 good weeks elsewhere!!!

gblotter · Apr 2, 2012

windje2000 said:
THE STING???

But, based on GregT's post, that is exactly what Marriott is choosing NOT to do.

1. They won't immediately settle up an IOU from the trust side to the legacy side . . . despite the fact that the Trust owner snagged the deposited legacy occupancy . . . which event should make equivalent Trust inventory available to the legacy.

Instead they are waiting . . . for some unknown time period . . . to see if there are other Trust owners who might want particular Trust inventory . . . rather than settling up the IOU with the legacy side.

2. They also seem reluctant to 'swap' inventory between the two sides to facilitate reservations for legacies who bought trust points for 'combined' exchanges.

CONCLUSIONS

It would appear that legacy owners . . . who elect points . . . are lending their weeks to the Trust . . . for no compensation.

Moreover, those loans are made at a discount to their points value.

Those loans give Marriott the right to reserve the occupancy associated with those weeks. Will they select the best of the season? I would . . . if I could. Their behavior as regards II deposits recently posted on TUG would tend to confirm that.

Those loans occur at the moment points are elected.

The upshot is that legacies . . . who elect points . . . are essentially subsidizing the DC program. They get to select (from an exchange co potentially populated with Trust IOUs) from the inventory that remains after the points owners have had the first shot at the buffet.

That's probably why there is no legacy 'request first' in this new DC system . . . . and probably never will be.

Thank you for the thoughtful and detailed summary.

Let us not forget that another important use of inventory is that Marriott can rent it for profit (just like hotel rooms). I believe this is a primary motivator for Marriott's behavior in how they manage the inventory pools. Marriott will manipulate the inventory to maximize the profit to Marriott - period.

This is why Newport Coast owners cannot reserve summer weeks, yet they are readily available for rent through Marriott. This is why Marriott charges so many points for Friday and Saturday night reservations (weekends are easier for Marriott to rent for a large profit). This is why Marriott won't immediately swap inventory to satisfy a legacy exchange request. This is why Marriott will claim a prime legacy week (Thanksgiving) and substitute a less-prime week (December) for exchange. And yes - this is why the skim exists.

By doing these things, Marriott is not trying to favor Trust Point owners with better reservations. Marriott is simply trying to maximize its own profit through prime rentals. Trust point owners and Legacy owners both get screwed by these tactics.

To enable this behavior, Marriott's only obligation when claiming the prime weeks for itself is that it must substitute an equivalent amount of inventory as measured by the points valuation. Marriott doesn't care that they are substituting four Park City mud weeks (that nobody wants at any price) to replace a President's Day ski week. As I said before, Marriott's objective here is to maximize Marriott's profit.

Once again, the old adage holds true: Own where you want to vacation. Legacy owners at sold-out resorts are best positioned to insulate themselves from the effects of this behavior and get the reservations they want.

Other tuggers with a deeper understanding and more experience can perhaps shoot holes in my speculations. It seems pretty clear to me, but feel free to enlighten me.

FractionalTraveler · Apr 3, 2012

gblotter said:
Thank you for the thoughtful and detailed summary.

Let us not forget that another important use of inventory is that Marriott can rent it for profit (just like hotel rooms). I believe this is a primary motivator for Marriott's behavior in how they manage the inventory pools. Marriott will manipulate the inventory to maximize the profit to Marriott - period.

This is why Newport Coast owners cannot reserve summer weeks, yet they are readily available for rent through Marriott. This is why Marriott charges so many points for Friday and Saturday night reservations (weekends are easier for Marriott to rent for a large profit). This is why Marriott won't immediately swap inventory to satisfy a legacy exchange request. This is why Marriott will claim a prime legacy week (Thanksgiving) and substitute a less-prime week (December) for exchange. And yes - this is why the skim exists.

By doing these things, Marriott is not trying to favor Trust Point owners with better reservations. Marriott is simply trying to maximize its own profit through prime rentals. Trust point owners and Legacy owners both get screwed by these tactics.

To enable this behavior, Marriott's only obligation when claiming the prime weeks for itself is that it must substitute an equivalent amount of inventory as measured by the points valuation. Marriott doesn't care that they are substituting four Park City mud weeks (that nobody wants at any price) to replace a President's Day ski week. As I said before, Marriott's objective here is to maximize Marriott's profit.

Once again, the old adage holds true: Own where you want to vacation. Legacy owners at sold-out resorts are best positioned to insulate themselves from the effects of this behavior and get the reservations they want.

Other tuggers with a deeper understanding and more experience can perhaps shoot holes in my speculations. It seems pretty clear to me, but feel free to enlighten me.

Well, it is working for some of us. I can pick off any summer week right now at Newport Coast. Can even get prime 4th of July no problem. See link below:

https://public.bay.livefilestore.co...DDLBemYHeti57uEZA5cg/Newport Coast.png?psid=1

I couldn't get this that easy before I purchased trust points. Now it seems very little inventory is off-limits.

Now I know that Newport Coast has tons of weeks conveyed to the Trust according to another post by GregT. So it may be a by product of owning Trust points that it making this type of reservation possible on April 2nd.

I don't think trust owners are being treated unfairly at all.

dioxide45 · Apr 3, 2012

puckmanfl said:
good evening....

Interesting speculation regarding source of the Pres week Mountainside unit...

Possibilities include...

#1 A Legacy week turned in for MR points. Highly unlikely, an owner would be nuts to do this...

#2 A Legacy week turned in for DC points..This is more likely as the owner probably snagged 6500 DC points for this one..

#3 Unsold MVCD owned inventory put in the trust... My sales rep told me this past week that MVCD was preparing for the Trust for quite some time and withheld weeks in sold out joints to put in the Trust. Will have to go to Greg and Dioxide Trust chart for this one...

I have confirmed that there are no Platinum Holiday - Fixed (Presidents Day week)weeks in the trust at Mountain Side. The source of inventory is much more likely to be item 2. It is a possible fourth source inventory exists, weeks where owners haven't paid MFs or the owner is in default on loan payments that Marriott has opted to take usage. Though it is still a little early for Marriott to have taken ownership of that inventory from 2013 already. I would however expect MVCI to try and rent those weeks out on Marriott.com to attempt to monetize the inventory before making it available for "free" for DC point reservations.

dioxide45 · Apr 3, 2012

FractionalTraveler said:
Well, it is working for some of us. I can pick off any summer week right now at Newport Coast. Can even get prime 4th of July no problem. See link below:

https://public.bay.livefilestore.co...DDLBemYHeti57uEZA5cg/Newport Coast.png?psid=1

I couldn't get this that easy before I purchased trust points. Now it seems very little inventory is off-limits.

Now I know that Newport Coast has tons of weeks conveyed to the Trust according to another post by GregT. So it may be a by product of owning Trust points that it making this type of reservation possible on April 2nd.

I don't think trust owners are being treated unfairly at all.

Newport Coast is the resort with the highest number of points in the trust. Over 23MM points. It makes up 17% of the entire trust. I am not surprised that there is availability at Newport Coast on points for pretty much any time of the year. This would probably happen with both trust points and legacy points. I would have expected Marriott to have "bulk banked" lots of inventory from the trust in to the DC exchange company. They did this with II in the past, it would be no different with the new exchange company now.

The issue with owner reservations at Newport Coast is the extended platinum season. There were always weeks that Marriott owned that they had ownership rights to.

windje2000 · Apr 3, 2012

gblotter said:
Thank you for the thoughtful and detailed summary.

Let us not forget that another important use of inventory is that Marriott can rent it for profit (just like hotel rooms). I believe this is a primary motivator for Marriott's behavior in how they manage the inventory pools. Marriott will manipulate the inventory to maximize the profit to Marriott - period.

This is why Newport Coast owners cannot reserve summer weeks, yet they are readily available for rent through Marriott. This is why Marriott charges so many points for Friday and Saturday night reservations (weekends are easier for Marriott to rent for a large profit). This is why Marriott won't immediately swap inventory to satisfy a legacy exchange request. This is why Marriott will claim a prime legacy week (Thanksgiving) and substitute a less-prime week (December) for exchange. And yes - this is why the skim exists.

By doing these things, Marriott is not trying to favor Trust Point owners with better reservations. Marriott is simply trying to maximize its own profit through prime rentals. Trust point owners and Legacy owners both get screwed by these tactics.

To enable this behavior, Marriott's only obligation when claiming the prime weeks for itself is that it must substitute an equivalent amount of inventory as measured by the points valuation. Marriott doesn't care that they are substituting four Park City mud weeks (that nobody wants at any price) to replace a President's Day ski week. As I said before, Marriott's objective here is to maximize Marriott's profit.

Once again, the old adage holds true: Own where you want to vacation. Legacy owners at sold-out resorts are best positioned to insulate themselves from the effects of this behavior and get the reservations they want.

Other tuggers with a deeper understanding and more experience can perhaps shoot holes in my speculations. It seems pretty clear to me, but feel free to enlighten me.

If a Trust owned property is rented, the rental income (net of expense) should benefit the Trust, and serve to offset operating expenses and/or MF of the Trust. The trustees have a fiduciary responsibility to act for the benefit of the trust.

Marriott can't simply pocket that rent.

FractionalTraveler · Apr 3, 2012

dioxide45 said:
Newport Coast is the resort with the highest number of points in the trust. Over 23MM points. It makes up 17% of the entire trust. I am not surprised that there is availability at Newport Coast on points for pretty much any time of the year. This would probably happen with both trust points and legacy points. I would have expected Marriott to have "bulk banked" lots of inventory from the trust in to the DC exchange company. They did this with II in the past, it would be no different with the new exchange company now.

The issue with owner reservations at Newport Coast is the extended platinum season. There were always weeks that Marriott owned that they had ownership rights to.

Yes I agree.

So is it correct to say that for Newport Coast, being an enrolled owner or trust owner gives you access to this property which would otherwise be unavailable or difficult to get?

GregT · Apr 3, 2012

FractionalTraveler said:
Yes I agree.

So is it correct to say that for Newport Coast, being an enrolled owner or trust owner gives you access to this property which would otherwise be unavailable or difficult to get?

Yes, I would agree -- using points (either Trust or Legacy) definitely improves access to this and other properties. Frankly, I have been amazed at the availability that DC has using points -- and the Mountainside week reservation is a great example.

I'm not sure where that came from -- did it come from an II cherry-pick by Marriott? Does Marriott withhold a small amount of weeks at the time of reservations release in anticipation of future MRP redemptions? Not sure -- but we see the impact here with the Mountainside week and in another post in January 2011 for Aruba, another property that wasn't in the Trust but was available for reservations 13 months out.

The DC somehow gets the inventory....interesting stuff...

Best,

Greg

puckmanfl · Apr 3, 2012

good morning...

Greg... great times last evening....

Doubt this Mountainside came from anticipation of a MR conversion. That would be like you turning in your week 24 MOC for MR points!!! I would put you in the hospital for doing that!!!

I truly believe, the "sold out" resorts are not so "sold out" and that MVCD held some back for the Trust and Exchange company. I also believe that owners of primo weeks (such as yourself) do now have incnetive to turn these in for DC points as they are highly compensated for them. Under the old II game , not so much...

As dioxide stated, probably a few foreclosures as well....

puckmanfl · Apr 3, 2012

good morning....

Fractional..

Tried to snag NCV July/august with Legacy points and "nothin doing" June and Sept and beyond wide open..If you can see July?august with your 1000 Trust points, then the issue of Trust v. Legacy points is settled...

Why VC points are both equal and separate.

windje2000

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