# Ritz Carlton DC reduces Prices



## FractionalTraveler (Aug 25, 2012)

The minimum purchase to join the Ritz-Carlton Destination Club is now 6,500 points, which cost $72,540 or $11.16 per point. This is quite a drop from the original level when the club launched in 2009 and the minimum buy in was over $100,000.

The annual maintenance fees have also gone down and now are slightly under $2,800 for the minimum points value.


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## fluke (Aug 25, 2012)

I had seen this on an advertisement with a posting of the MFs at 43 cents a point.  Read into this what you will, but I think the "writing is on the wall".  That pretty much looks like a premier Marriott DC owner.

I think they are targetting their base and tired of losing so much money in the luxury division.


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## m61376 (Aug 25, 2012)

It's very interesting. Not having been to a RC villa, I am not qualified to pass judgement here, but I wonder if they are luxurious enough to fulfill the travel needs of that segment of the population that their price-point originally targeted.

What i mean is this- while many of us find the Marriott quality more than adequate for our needs, and many (like us) consider it great accommodations, there is a more well heeled population who, let's face it, is just accustomed to the better things and more demanding. Those that might otherwise typically choose a Caneel Bay or the like for travel may not be satisfied with the RC fractional type travel. Those who routinely book suites or multiple rooms for families might not find the larger villa accommodations any big attraction, nor care about the ability to save some money by using kitchen facilities. It is a hard balance, and it may just be that their initial target audience would simply rather have luxury resort amenities rather than ownership type lifestyle, which tends to have some limitations on service. Some people really want that nightly turn down service and chocolates and can afford to pay for it. 

Is the "problem" with sales at Kauai Lagoons, for ex., that its target audience would prefer Haulalai on the Big Island? I guess my question is this- do the RC properties provide the more luxury amenities that their target audience may demand? Don't get me wrong here- I love the Marriott properties, so am sure the added amenities at the RC would be super- but I know people who would really feel that this was a downgrade in their travel style, and many of these are the same people that the RC club would target. So are the RC properties classy enough for their target audience?

Unless I am wrong, my impression is that the RC club model is just an upscale version of the typical Marriott timeshare model, without the full luxury amenities, and I wonder if there is a large enough target audience. Might their real audience be "us plebians" who are willing to occasionally splurge for a more special trip, rather than the upper crust willing to regularly "downgrade?" 

And, please understand, this is just an analysis, not a snooty commentary.


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## dioxide45 (Aug 25, 2012)

m61376 said:


> It's very interesting. Not having been to a RC villa, I am not qualified to pass judgement here, but I wonder if they are luxurious enough to fulfill the travel needs of that segment of the population that their price-point originally targeted.
> 
> What i mean is this- while many of us find the Marriott quality more than adequate for our needs, and many (like us) consider it great accommodations, there is a more well heeled population who, let's face it, is just accustomed to the better things and more demanding. Those that might otherwise typically choose a Caneel Bay or the like for travel may not be satisfied with the RC fractional type travel. Those who routinely book suites or multiple rooms for families might not find the larger villa accommodations any big attraction, nor care about the ability to save some money by using kitchen facilities. It is a hard balance, and it may just be that their initial target audience would simply rather have luxury resort amenities rather than ownership type lifestyle, which tends to have some limitations on service. Some people really want that nightly turn down service and chocolates and can afford to pay for it.
> 
> ...



I would have to agree. There are likely two categories here; those that want the full service experience and those that don't. However those that don't are more likely to just buy a vacation home somewhere that they travel to and not as likely to buy in to a fractional ownership system.


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## Weimaraner (Aug 25, 2012)

The Ritz destinations have kitchens but one of the amenities that caught my attention was the fact they can provide a chef to cook in it. So there are some nice Ritz service extras. I tried to convince DH that we needed to upgrade to Ritz DC but apparently he has his own personal chef already (me!) and thinks I do okay.


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## GregT (Aug 25, 2012)

When Jonell and I stayed at the Ritz Carlton in St. Thomas, there were two stories that confirmed that she and I are clearly different from the average Ritz customer.

First, we had a problem with an excursion and Ritz (rightly or wrongly) had played a role in the mix up.  The activities director was talking to me about what they could do to solve the problem, and Jonell reached in to her beach bag and handed me a peanut butter and jelly sandwich for lunch.   The shock on the Directors face was classic.   I suspect this was the first PB&J ever consumed on property, by a customer.

Second, there was a wine tasting event that was really a sales event for Ritz DClub and we went (but we went for the wine).   The Ritz DClub owners that were also there were clearly not impressed that we were visiting on our Marriott points and that we were Marriott owners.  Personally, i never care when I meet someone that traded into MOC -- good for them, and makes me smile and think of PerryM.

It's an interesting situation that has evolved with DClub and the Ritz properties, and I think it is very much to the benefit of the DClub point user.   The Ritz properties (at least if they are like STT) are stunning -- both the villas and the property itself.   The ability to access them with points is tremendous.   I remember talking with John Goodman before he left VAC and encouraging him to make Ritz properties accessible and he was adamant that it would never happen, because of the perceived impact on their Ritz customer (similar to my story #2).

I suspect that the reality of the situation and the need for inventory and for points to be utilized overtook the desire to segregate the customer base.    

I believe Marilyn is on to something -- the people with true wealth likely prefer Hualalai to Kauai Lagoons.  Therefore DClub is the next best alternative for monetizing all that excess Ritz inventory.

St. Thomas remains the interesting anomaly (sp?) here -- they discounted the points so much so that it is not much more then MFC.  I have to believe that's because there isn't any MFC in the Trust and they needed control over a St. Thomas property.  But that is a tremendous points value right now.  I hope it is a permanent points value, we will see.

All the best,

Greg


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## puckmanfl (Aug 25, 2012)

good morning...

Greg

Good think you did not pullout the PB & J sandwhich at Berns or the TBL game!!!!!:hysterical: :hysterical: :hysterical:


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## m61376 (Aug 25, 2012)

Would they have felt any differently if it was freshly made peanut butter? :rofl:


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## GregT (Aug 26, 2012)

m61376 said:


> Would they have felt any differently if it was freshly made peanut butter? :rofl:



Perhaps freshly made peanut butter would indeed have made a difference?!

But just for the record...my wife makes a killer PB&J.   They taste just as good in Maui as they do in St. Thomas.   

Best,

Greg


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## mjm1 (Aug 26, 2012)

Greg, great stories.  Both Donna and I got a great laugh out of them.

We stopped by the RC on Maui when we were on the island in April. They had actually closed the sales office for some reason.  I don't recall why.  One of guys showed a room to us and we were extremely impressed with both that and property. We have also seen Kauai Lagoons and agree with comments by you and others about a distinctions about the audience of RC vs DC.

We love both Marriott and Westin for the quality, but the RC is at yet another level.

Cheers.


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## ondeadlin (Aug 26, 2012)

I have stayed at the RC Bachelor Gulch property a few times with friends.  They go above and beyond with service, right up to placing your skis and poles on the snow so you can just step into them.  

We make PB&J in the room frequently, so I don't think it's that uncommon an event, lol.

Never felt like there was a high snob factor at BC.  There might be, but I haven't felt it.  The on-site dining is tremendous, but very pricy.  The facilities are above and beyond any other timeshare I've stayed at.

All that said, I think it probably makes better economic sense to rent there than to own IMO.  It's a huge sunk costs and the MF are quite high.


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## GregT (Aug 26, 2012)

All,

Interesting post in a different TUG forum -- a letter from a RCDC owner.   The incorporation of RC properties, as we've discussed, are clearly to our benefit.   But the RCDC owners are likely very unhappy with this, as articulated well by the author of this letter.

Best,

Greg


http://tugbbs.com/forums/showpost.php?p=1349803&postcount=12


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## fluke (Aug 26, 2012)

mjm1 said:


> Greg, great stories.  Both Donna and I got a great laugh out of them.
> 
> *We stopped by the RC on Maui when we were on the island in April. They had actually closed the sales office for some reason. * I don't recall why.  One of guys showed a room to us and we were extremely impressed with both that and property. We have also seen Kauai Lagoons and agree with comments by you and others about a distinctions about the audience of RC vs DC.
> 
> ...



It is my understanding that the RC club is pulling out of the Maui site (and Bahamas) - it was posted on the fractional forum 1-2 months ago.


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## FractionalTraveler (Aug 26, 2012)

fluke said:


> It is my understanding that the RC club is pulling out of the Maui site (and Bahamas) - it was posted on the fractional forum 1-2 months ago.



It would not surprise me if action is taken by the Ritz Carlton DC owners to protect their investments in a product that clearly has been diluted.

IMHO, this is an unfortunate situation for the RC destination club membership.

Marriott Trust Point owners can also have this happen to them as well.  Who is to say it won't happen again?

The same thing is being played out right now at the Cosmopolitan in Las Vegas.  That property was never slated to be a hotel but because of the global recession, it became one and to fill beds the owners turned to Marriott to leverage their loyalty program (Marriott Rewards) in order to achieve their goals.

Now the poor folks who purchased $2M condos have to share their property, amenities, and common areas with coupon cutting points junkies looking for the free buffet.

Not a good situation at all.


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## fluke (Aug 26, 2012)

GregT said:


> All,
> 
> Interesting post in a different TUG forum -- a letter from a RCDC owner.   The incorporation of RC properties, as we've discussed, are clearly to our benefit.   But the RCDC owners are likely very unhappy with this, as articulated well by the author of this letter.
> 
> ...



  I think there are two paths for the RC destinations club - either this move to incorporate it into the Marriott DC club or spin it off the spin-off and let it bankrupt itself.  Possibly they could sell it - but who would buy something losing millions holding (propably) originally overvalued real estate in this economic climate?

Correct me if I am wrong but I think there were similiar reactions( with the RC side) with the merger of the rewards systems for Marriott and Ritz-Carlton. Statements of "watering down" were used on flyer talk.


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## fluke (Aug 26, 2012)

FractionalTraveler said:


> It would not surprise me if action is taken by the Ritz Carlton DC owners to protect their investments in a product that clearly has been diluted.
> 
> IMHO, this is an unfortunate situation for the RC destination club membership.
> 
> ...



Anything can happen in a company or a division that is losing money (like the RC club).  The base they are selling to obviously is not there - it is change or die time.  It doesn't matter about hurting the feelings of people who bought overinflated (IMO) properties.


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## FractionalTraveler (Aug 26, 2012)

fluke said:


> I think there are two paths for the RC destinations club - either this move to incorporate it into the Marriott DC club or spin it off the spin-off and let it bankrupt itself.  Possibly they could sell it - but who would buy something losing millions holding (propably) originally overvalued real estate in this economic climate?
> 
> Correct me if I am wrong but I think there were similiar reactions( with the RC side) with the merger of the rewards systems for Marriott and Ritz-Carlton. Statements of "watering down" were used on flyer talk.



As a clarification, the two rewards point systems were not merged.  They remain separate.  What RC rewards members were reacting to with apparent distaste was allowing for Marriott Rewards points to be used at RC properties.

Obviously, the Marriott folks saw it as an additional benefit to their program while the RC rewards members were repulsed.

Same think here with the RC joining the Marriott Trust.


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## FractionalTraveler (Aug 26, 2012)

fluke said:


> Anything can happen in a company or a division that is losing money (like the RC club).  The base they are selling to obviously is not there - it is change or die time.  It doesn't matter about hurting the feelings of people who bought overinflated (IMO) properties.



They could have offered them a buyout and walk away from the property.  This is exactly was is happening to Kauai Lagoons.

As a matter of fact Marriott mentioned this in their last quarterly statements.  They have set aside monies to deal with this before it costs them more money in court.


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## m61376 (Aug 26, 2012)

FractionalTraveler said:


> They could have offered them a buyout and walk away from the property.  This is exactly was is happening to Kauai Lagoons.
> 
> As a matter of fact Marriott mentioned this in their last quarterly statements.  They have set aside monies to deal with this before it costs them more money in court.



Do you mean to say that they are reimbursing Kauai Lagoon owners for their real estate "investment" in a market where prices have plummeted? If that's what they are doing I am very surprised.

While I can understand the frustration of RC Club owners, it's really not that different from many other travel discounts. Over the years it was easy to be in a cabin on a cruise where your next door neighbor paid considerably more (or less) than you did, or in a hotel room, etc. I stayed in the Hotel de Artes fifteen years ago on a ridiculous promotion rate; I'm sure there were other guests during my stay that paid rack Ritz Carlton rates. You might nab a Getaway for $250-350 in an Orlando resort and be in a villa next to someone who paid 20K for the week and $1000 a year in MF's. How many of us here have bought weeks resale, at a fraction of developer prices, and get to stay in the same villas and enjoy the same amenities? 

How many people bought homes in 2005-2007 that are worth a fraction of what they paid for them? No one guarantees such purchases, and buyers are at the mercy of the market.

While I can understand their angst, ownership in the RC Club never came with any guarantees, and Marriott now is doing what it needs to to sustain its viability. I don't think there was any evil intent here- just an erosion of the marketplace, which really owners of any kind of property have been dealing with. Would the RC owners prefer to have to mingle with plebeians (like most of us here) or let the property lie fallow and ultimately go bankrupt? Isn't that why hotels and cruises discount rooms, according to market demand?


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## dioxide45 (Aug 26, 2012)

FractionalTraveler said:


> They could have offered them a buyout and walk away from the property.  This is exactly was is happening to Kauai Lagoons.



Are they still doing this at Kauai Lagoons? I believe they offered it to RCDC owners when they decided to convert it to a MVCI property. There were three holdouts I believe. I don't think they are still offering that buyout.


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## amanda14 (Aug 26, 2012)

Berns is awesome.


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## fluke (Aug 26, 2012)

FractionalTraveler said:


> They could have offered them a buyout and walk away from the property.  This is exactly was is happening to Kauai Lagoons.
> 
> As a matter of fact Marriott mentioned this in their last quarterly statements.  They have set aside monies to deal with this before it costs them more money in court.



All of these moves are fundamentally being done to protect Marriotts bottom line.  I am not saying it does't make you feel like a sucker that someone is able to use something that you paid a premium for at a  fraction of the buy in.   Trust me I know - I bought my Marriotts from the developer. 

I think there is likely to be litigation from this and Marriott will do what it thinks will limit the cost.  I am sure they probably will buy some people off.  I think the majority of current owners will grumble but probably ultimately accept change.


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## FractionalTraveler (Aug 26, 2012)

m61376 said:


> Do you mean to say that they are reimbursing Kauai Lagoon owners for their real estate "investment" in a market where prices have plummeted? If that's what they are doing I am very surprised.
> 
> While I can understand the frustration of RC Club owners, it's really not that different from many other travel discounts. Over the years it was easy to be in a cabin on a cruise where your next door neighbor paid considerably more (or less) than you did, or in a hotel room, etc. I stayed in the Hotel de Artes fifteen years ago on a ridiculous promotion rate; I'm sure there were other guests during my stay that paid rack Ritz Carlton rates. You might nab a Getaway for $250-350 in an Orlando resort and be in a villa next to someone who paid 20K for the week and $1000 a year in MF's. How many of us here have bought weeks resale, at a fraction of developer prices, and get to stay in the same villas and enjoy the same amenities?
> 
> ...



I don't think it's a question of cost.  That cost is already sunk.  I think if we asked the RC DC owners, they would say it’s about delivering on what was promised.

I agree no evil intent.  Bankruptcy or Foreclosure are viable solutions in many cases involving real estate transactions.  Many folks see it as a negative but it's not the end of the world and it can lead to some very interesting negotiation strategies that can open up additional options for keeping the property.

This is obviously easy for us to discuss without a dog in the game.


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## FractionalTraveler (Aug 26, 2012)

dioxide45 said:


> Are they still doing this at Kauai Lagoons? I believe they offered it to RCDC owners when they decided to convert it to a MVCI property. There were three holdouts I believe. I don't think they are still offering that buyout.



Initial buyout proposals are almost always routinely rejected by customers.  Everyone know these proposals are intended to weed out the weakest parties involved.  Smart owners use litigation as a tool to recieve serious offers even right up to court date.


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## sparty (Aug 26, 2012)

dioxide45 said:


> Are they still doing this at Kauai Lagoons? I believe they offered it to RCDC owners when they decided to convert it to a MVCI property. There were three holdouts I believe. I don't think they are still offering that buyout.



It's been a while since I was there (Jan 2011) but as of then all RCDC owners were bought out and if I remember correctly they were bought out with a profit, substantial I thought.

Seems like RCDC members equate their level of access to the MVC collection the same as a $5K MVC resale buyer? I would think the $5K resaler buyer has access via II or RCI which is much less than the RCDC level of access.

I can appreciate the concerns of RCDC owners with the recent changes.


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## m61376 (Aug 27, 2012)

I actually am impressed that Marriott as a company "made good" to RC purchasers of Kauai Lagoons, Many developers have simply walked away from projects, sticking early investors.

And don't get me wrong- I can understand the angst of the RC buyer who had higher expectations. In the past several years many of the big destination clubs have gone under; I think it is hard to sustain the membership income required for the level of comfort demanded at the higher end. Many (?most) of the big players found they couldn't attract enough interest/investors over time, and there wasn't enough income to maintain the premises. 

I think discounting the stays by letting mere DC points users reserve rooms is akin to any discount off rack rate used elsewhere, and fills the rooms and brings income to the properties during leaner times. While I can understand RV owners' dismay, I think they need to recognize the alternative might simply be going under and not having anything left.


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