# DC Resale Points (Junk) Transfer Fee Hiked To $500 Per BI



## kds4 (Jul 9, 2014)

The headline says it all. I just received the email below a few minutes ago. 

"Dear XXX Realty employees and Points Customers,

I wanted to update you on a very sad change MVCI made to intentionally restrict the sale of points in the resale market. A customer had brought to my attention today that Marriott kept quoting him a transfer fee of $500 per interest instead of the traditional fee of $200 per interest.

I contacted the Licensed Timeshare Resale Brokers Association which we are part of and one of the agents emailed _[Deleted.]_ MVCI resales department, to get the correct answer.

He responded saying that as of June 17th, Marriott did indeed increase the transfer fee from $200 to $500 and the minimum transfer fee is now $3,000 instead of $2,000. This is absolutely abusive and unfair to all owners (now and in the future) that we're helping to sell their Marriott points.

Please inform all your points sellers to contact MVCI immediately to complain about this. This is horrible, not only for Points sellers but also for Points Buyers...........great for Marriott.

The LTRBA has a call in with _[Deleted.]_ tomorrow to get clarification on this. We're hoping this is simply a "word of mouth" increase to discourage resales.

Best Regards,

Xxx Licensed Broker/Owner

Xxx Realty


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## rahulgopi (Jul 9, 2014)

I was going back and forth with Marriott, TRCS and agent on this. This will prevent me from buying resale points @ $4. This will also affect sellers who are trying to get rid of points.


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## KenA (Jul 9, 2014)

I was just going to post the same information.  I made an offer for a 2500 points package to a broker and he replied by email that it appears this increase has occurred. BUT... it does appear there is a chance it is not true based on the wording.

What is Marriott doing? Going to sell people a product they claim has value and then intentionally make it hard to re-sell.    

Even still, it seems that ROFR is about $4.25 per point.  Even with the new fees, its still much cheaper than from Marriott.  I suspect it will kill some sales though.

I was at $36,000 on the package I bought from Marriott for 3500 points (before rescinding).
If the new fees are true, at $4.25 per point it is about $22,200 give or take.


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## Saintsfanfl (Jul 9, 2014)

It's a Westgate style move that will hurt owners down the road that want out. 

All the more reason to stay far away from buying very many points. The more they sell the less value they have. The market will eventually be flooded with points that risk going unused.


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## icydog (Jul 9, 2014)

*Mayan all over again. Thousands of $$ to get rid of your timeshare!! Total BS!!!*

Is this a bait and switch scheme? No place in our points contract is a clause that says Marriott will make it impossible to sell the point contract. This is just usury. Has Marriott turned into the Mayan Palace? What a horrible turn of events


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## JIMinNC (Jul 9, 2014)

As I posted in another thread where this was mentioned, we were recently told by a Marriott salesperson that Marriott would soon begin doing DC Points resales, just as they currently resell weeks through their resale operation. If true, it is possible the increased initiation fee is designed to make the cost of third-party resale transactions closer to whatever price point Marriott plans to use for resale points. I suspect they would likely routinely waive the fee for points bought from them if and when they start doing point resales, but assess the fees for third party transactions.


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## SueDonJ (Jul 9, 2014)

Am I understanding correctly that this email is coming from a broker and that no TUGgers have official written notice from a Marriott rep?  I just want to be clear on where this is coming from.

Earlier today TUGger rahulgopi mentioned that he heard it from a telephone rep (see Buying Resale MVCD points [and Other Marriott Purchase Options].)  I thought it was worth pursuing so wrote an email to an exec contact who has on a few occasions provided information to share with TUGgers.  I haven't received a reply yet and don't expect to today, but when it comes I'll be sure to ask permission to share it here.  In the meantime, please try to limit the discussion about DC Points Resales fees to this thread.  Thanks!


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## kds4 (Jul 9, 2014)

JIMinNC said:


> As I posted in another thread where this was mentioned, we were recently told by a Marriott salesperson that Marriott would soon begin doing DC Points resales, just as they currently resell weeks through their resale operation. If true, it is possible the increased initiation fee is designed to make the cost of third-party resale transactions closer to whatever price point Marriott plans to use for resale points. I suspect they would likely routinely waive the fee for points bought from them if and when they start doing point resales, but assess the fees for third party transactions.



I cannot see how Marriott will make points resales work for them in a way that doesn't undermine their 'new' points sale operations. Who would buy 'new' points for $12.xxx if they can buy 'Certified Pre-Owned' points for $7 or $8 from MVCI?

The only scenario I can see t hat would limit the impact on the new sales operation is if you have to be a current owner of 'x,xxx' trust points to be able to buy 'additional resale points' from MVCI. Of course that will restrict their potential buyer pool.


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## SueDonJ (Jul 9, 2014)

As far as the rumors that Marriott will "soon" begin an internal DC Points resale operation, it may well be happening soon and if this price increase thing is real, it could be related.  But that's a rumor that's been floating around since almost the day the DC was implemented.  Not trying to say anything here except that Internal Points Resales are not a new rumor.


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## kds4 (Jul 9, 2014)

SueDonJ said:


> Am I understanding correctly that this email is coming from a broker and that no TUGgers have official written notice from a Marriott rep?  I just want to be clear on where this is coming from.
> 
> Earlier today TUGger rahulgopi mentioned that he heard it from a telephone rep (see Buying Resale MVCD points [and Other Marriott Purchase Options].)  I thought it was worth pursuing so wrote an email to an exec contact who has on a few occasions provided information to share with TUGgers.  I haven't received a reply yet and don't expect to today, but when it comes I'll be sure to ask permission to share it here.  In the meantime, please try to limit the discussion about DC Points Resales fees to this thread.  Thanks!



Hi Sue,

You are correct that a broker sent the email to me, and the rest of his points clients, this afternoon. Besides myself, this broker has worked with other TUGgers in handling their resale points purchases and has been spoken of positively in various posts. Until proven otherwise, I am confident in taking what I have received from him at face value. As his email points out, the professional association is working to get the Marriott Exec this information allegedly came from on a conference call to formally discuss this 'news' tomorrow. I expect to hear more once that has occurred, and will relay whatever the broker conveys to me with his consent for the information of all. I truly hope it turns out to be misinformation. However, if it does not, I don't believe the fault will lie with the messenger (broker).


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## KenA (Jul 9, 2014)

In my opinion, it would not be a resale program, but a "buyback" program.  If Marriott can attract those who want to sell their points with an easy out, then Marriott can then resell those points during their presentations at full retail.  The increase (if its true) in the transfer fees will make their offers more attractive to sellers, thereby giving them the ability to buy more points back directly without having to deal with the ROFR.

I can't see any scenario where Marriott has resale points cheaper than what they offer during their presentation.  Why would anyone buy points at retail then?

I certainly hope we can get some confirmation soon as to whether or not this rumor of the price increase is true.


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## SueDonJ (Jul 9, 2014)

kds4 said:


> Hi Sue,
> 
> You are correct that a broker sent the email to me, and the rest of his points clients, this afternoon. Besides myself, this broker has worked with other TUGgers in handling their resale points purchases and has been spoken of positively in various posts. Until proven otherwise, I am confident in taking what I have received from him at face value. As his email points out, the professional association is working to get the Marriott Exec this information allegedly came from on a conference call to formally discuss this 'news' tomorrow. I expect to hear more once that has occurred, and will relay whatever the broker conveys to me with his consent for the information of all. I truly hope it turns out to be misinformation. However, if it does not, I don't believe the fault will lie with the messenger (broker).



Thanks!  I'm not looking to find fault anywhere, just for official confirmation.  I also hope it's not true; it certainly reduces the attraction of resold Trust Points.


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## kds4 (Jul 9, 2014)

I also received the following this evening with a request to share on TUG from the same broker:

_"Post this on TUG also. This was my response in an email to the LTRBA group upon hearing of these changes:

Since Marriott doesn't offer a resale option for their owners, let's discuss how this impacts them:

Points will now decrease from $4.50 on average in the resale market to about $2 per point.  
Sellers will be netting drastically lower amounts.
Sellers will no longer want to list their timeshares
Buyers will no longer wish to buy resale points
Sellers will probably have to eat half the closing costs
Marriott points sales will drive up internally
Marriott gets super rich from this
A class action lawsuit from owners will most likely be on the horizon." _


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## JIMinNC (Jul 9, 2014)

kds4 said:


> I cannot see how Marriott will make points resales work for them in a way that doesn't undermine their 'new' points sale operations. Who would buy 'new' points for $12.xxx if they can buy 'Certified Pre-Owned' points for $7 or $8 from MVCI?



Valid point, although prior to the transition to Destination Club, Marriott ran their weeks resales operation in parallel with their "new" weeks sales operations for many years. Much the same argument could have been made then - who would buy a "new" developer week when they could buy a pre-owned week at somewhat less cost from MVCI Resales. I don't recall how the "New Marriott Week" prices compared to the "Pre-Owned Marriott Week" prices back then, but that relative differential might yield some insight into what level Marriott Points resales might be at if and when they ever do start doing that.

I think the reason they were successful running parallel "New" and "Pre-Owned" weeks operations is they promote and market the "New" operation but the resales operate somewhat in the shadows and it seems you have to know about them and seek them out. One delivery channel for educated buyers and one for everyone else.


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## dioxide45 (Jul 9, 2014)

This change would have to be placed in an amended/updated Exchange Procedures. The Exchange Procedures on the MVCI website when you attempt to enroll is dated 12.18.13 and still indicates the $200/BI with $2000 minimum. There is no updated Exchange Procedures with a date on or around June 17.

I am not saying that this isn't or didn't happen. Just no official verification yet.


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## SueDonJ (Jul 9, 2014)

JIMinNC said:


> Valid point, although prior to the transition to Destination Club, Marriott ran their weeks resales operation in parallel with their "new" weeks sales operations for many years. Much the same argument could have been made then - who would buy a "new" developer week when they could buy a pre-owned week at somewhat less cost from MVCI Resales. I don't recall how the "New Marriott Week" prices compared to the "Pre-Owned Marriott Week" prices back then, but that relative differential might yield some insight into what level Marriott Points resales might be at if and when they ever do start doing that.
> 
> I think the reason they were successful running parallel "New" and "Pre-Owned" weeks operations is they promote and market the "New" operation but the resales operate somewhat in the shadows and it seems you have to know about them and seek them out. One delivery channel for educated buyers and one for everyone else.



Another reason is that the Resales Operations had inventory that was from formerly sold-out resorts, that the onsite and corporate Sales Offices did not actively promote.  In my experience of buying a direct resale, it cost the equivalent of full direct pricing at the time and has always had all the ownership/usage rights of a developer-direct purchase.

Of course this isn't relevant to Points resales because there is no home resort or specific unit type/view advantages with Points.  Just mentioning it in the context of why/how developer-direct and internal resales of Weeks could co-exist.


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## dioxide45 (Jul 9, 2014)

kds4 said:


> I also received the following this evening with a request to share on TUG from the same broker:
> 
> _"Post this on TUG also. This was my response in an email to the LTRBA group upon hearing of these changes:
> 
> ...



These were my thoughts. By increasing the fees, they are driving down the resale price per point. This allows MVCI to acquire points cheaper through ROFR since they are not concerned about the initiation fees.

As to a resale points program. I don't see MVCI ever doing that. They may offer a buyback program, but I don't see them endorsing cheaper points on the resale market since in DC a point is a point.


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## rahulgopi (Jul 9, 2014)

I had two conversations with Marriott Sales rep and her Manager, both of them were very clear about the Junk / Initiation price increase.  I went via the closing company and agents association to see if we can get more information. I really hope this is not true as this will diminish my chance of getting into the Destinations Club program.  
True, I can buy from developer via COMBO at a good price BUT if the resale market is tarnished, I will have a hard time getting out, if required.


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## dioxide45 (Jul 9, 2014)

rahulgopi said:


> I had two conversations with Marriott Sales rep and her Manager, both of them were very clear about the Junk / Initiation price increase.  I went via the closing company and agents association to see if we can get more information. I really hope this is not true as this will diminish my chance of getting into the Destinations Club program.
> True, I can buy from developer via COMBO at a good price BUT if the resale market is tarnished, I will have a hard time getting out, if required.



It won't necessarily make it more expensive to get in, just start reducing your offers based on the higher fees. In the end, people will take all fees in to account when they determine how much they want to pay. They won't pay more out of pocket just because of the junk fees. Of course it may make the points more likely to be bought back by MVCI via ROFR.


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## JIMinNC (Jul 9, 2014)

dioxide45 said:


> This change would have to be placed in an amended/updated Exchange Procedures. The Exchange Procedures on the MVCI website when you attempt to enroll is dated 12.18.13 and still indicates the $200/BI with $2000 maximum. There is no updated Exchange Procedures with a date on or around June 17.
> 
> I am not saying that this isn't or didn't happen. Just no official verification yet.



As I read the Exchange Procedures document we received a couple weeks ago with our combo purchase (It is the one dated 12-18-13), it sounds like they can increase the fee without modifying the document. Here is the relevant wording, bolding is mine:

The current initiation fee is $200 per Interest with a $2,000 minimum initiation fee; *however, Exchange Company reserves the right to adjust the amount of the initiation fee from time to time and to waive the initiation fee on a case-by-case basis in Exchange Company's sole discretion*.

I am not an attorney, but as I read that, they have the flexibility to change the amount without amending the Exchange Procedures.


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## jeepie (Jul 9, 2014)

dioxide45 said:


> ...$200/BI with $2000 maximum.


Isn't it $2000 minimum?


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## dioxide45 (Jul 9, 2014)

jeepie said:


> Isn't it $2000 minimum?



Correct, I updated my post.


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## dioxide45 (Jul 9, 2014)

JIMinNC said:


> As I read the Exchange Procedures document we received a couple weeks ago with our combo purchase (It is the one dated 12-18-13), it sounds like they can increase the fee without modifying the document. Here is the relevant wording, bolding is mine:
> 
> The current initiation fee is $200 per Interest with a $2,000 minimum initiation fee; *however, Exchange Company reserves the right to adjust the amount of the initiation fee from time to time and to waive the initiation fee on a case-by-case basis in Exchange Company's sole discretion*.
> 
> I am not an attorney, but as I read that, they have the flexibility to change the amount without amending the Exchange Procedures.



It is possible, but this is a pretty material change. There have been six versions to date of the Exchange Procedures. Some which I couldn't even tell what the change was. So in four years they change the document 5 times but for this they don't update it? That doesn't make sense. This is the governing document for the Exchange Company. The Initiation Fees allow resale trust points to play in the Exchange Company. 

Note that the verbiage doesn't indicate that they can change it without warning or prior written notice. That type of verbiage is often seen in these types of scenarios but is not present here.

Though they could have an updated version, but just haven't published it.


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## m61376 (Jul 9, 2014)

I find it surprising that they would devalue any ownership at a tome when they are defending a class action suit from a weeks owner. Whether or not his claim has merit remains to be seen, but it seems that even the appearance that they would be devaluing any MVCI ownership would be something to be avoided now.

It would be hard to argue that more than doubling the transfer fee doesn't effectively devalue any points previously purchased, since it. Directly impacts the resale value of any such points.


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## Saintsfanfl (Jul 9, 2014)

It's genius of Marriott to do this in order to lower the average expense of the ROFR exercise but it should make it illegal. If this is true they are simply manipulating the resale value to manipulate their expense on ROFR. That is most definitely not legal and should be challenged.

They will never sell "resale" points. The entire notion is absurd. When the salespeople original referenced controlling the resale market this supposed act is exactly what they were talking about. I know I was told this in a presentation although I did not believe Marriott would or could take these measures legally. 

I'm not sure why I am surprised considering it was already $200 per BI. Why not make it $2,000 per? What is stopping them?


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## billymach4 (Jul 9, 2014)

*What does the future look like ?*



Saintsfanfl said:


> It's a Westgate style move that will hurt owners down the road that want out.
> 
> All the more reason to stay far away from buying very many points. The more they sell the less value they have. The market will eventually be flooded with points that risk going unused.



At some point in the future the economic scale is going to tip. In other words the price of a full retail points package keeps escalating, however the owners of the full retail points will not be able to exit. Why do owners need to exit in the first place? People age out naturally due to death, disability, divorce, lifestyle changes, inability to pay the fees/or mortgage on the points. 

Where does that leave the points marketplace? Does anyone think this whole house of cards may someday collapse? What do you think?


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## dioxide45 (Jul 9, 2014)

billymach4 said:


> At some point in the future the economic scale is going to tip. In other words the price of a full retail points package keeps escalating, however the owners of the full retail points will not be able to exit. Why do owners need to exit in the first place? People age out naturally due to death, disability, divorce, lifestyle changes, inability to pay the fees/or mortgage on the points.
> 
> Where does that leave the points marketplace? Does anyone think this whole house of cards may someday collapse? What do you think?



It seems to be a sustainable model. While it certainly isn't consumer friendly, many TS companies utilize this model and make plenty of money doing so.


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## mjm1 (Jul 9, 2014)

Thanks for these posts. We are in the middle of a resale purchase, so I will share this with our broker and closing company.

Mike


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## JIMinNC (Jul 9, 2014)

I played around with the numbers a little and while this would certainly be a huge percentage increase for the initiation fee, the net effect is it increases the cost of a resale points purchase by a little over $1 versus the status quo. Assuming a $4.50 resale price per point, the cost is about $5.30 with the current fees and that would rise to $6.50 under the rumored new fees. Given that Marriott sells points at $12.12 and always rising, the basic economic case doesn't seem to change all that much.


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## FractionalTraveler (Jul 9, 2014)

Stepping back for a moment and just to keep things in perspective, the global resale (secondary) marketplace for timeshares has historically been infinitesimally small as compared to new contract sales.

So in the grand scheme of things, the magnitude of this resale issue is much smaller than what is projected by those buyers/sellers who may be directly affected by one particular transaction or another.

Regrettably, brokers and agents who are stuck in the middle will earn less commission on a smaller number of transactions as a result.

Its a race to the bottom on a commodity that has no value other than its yearly usage.

FT


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## Fasttr (Jul 9, 2014)

JIMinNC said:


> I played around with the numbers a little and while this would certainly be a huge percentage increase for the initiation fee, the net effect is it increases the cost of a resale points purchase by a little over $1 versus the status quo. Assuming a $4.50 resale price per point, the cost is about $5.30 with the current fees and that would rise to $6.50 under the rumored new fees. Given that Marriott sells points at $12.12 and always rising, the basic economic case doesn't seem to change all that much.



And if you buy into the "buy a Base Interest of 1500 points and rent the rest" theory, it really is only costing you $0.67/point more than before because the minimum fee no longer screws you.


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## billymach4 (Jul 9, 2014)

dioxide45 said:


> It seems to be a sustainable model. While it certainly isn't consumer friendly, many TS companies utilize this model and make plenty of money doing so.



Dioxide can you please give me some examples of other TS model's that are analogous to this situation? In my small world view I think of Wyndham where retail owners buy in only to find out that their points are pennies to the dollar on the resale market. In this scenario it sounds like DC points are about .45 to the dollar (This is just my off the top of the head math). How about DVC they have ROFR and they do enforce it according to my limited knowledge. Please someone correct me and educate me if I am off the charts here?


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## mjm1 (Jul 9, 2014)

I just confirmed with the broker we are using, which the same as the OP. It is true, but transactions that are at closing will not incur the additional fee. 

This will definitely have a negative impact on resale prices. Unfortunate, but I can understand Marriott trying to fight against the resale market. It will be interesting to see if a suit results. As noted by others, the documents show that they can make changes at their discretion.

Mike


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## JIMinNC (Jul 9, 2014)

dioxide45 said:


> It is possible, but this is a pretty material change. There have been six versions to date of the Exchange Procedures. Some which I couldn't even tell what the change was. So in four years they change the document 5 times but for this they don't update it? That doesn't make sense. This is the governing document for the Exchange Company. The Initiation Fees allow resale trust points to play in the Exchange Company.
> 
> Note that the verbiage doesn't indicate that they can change it without warning or prior written notice. That type of verbiage is often seen in these types of scenarios but is not present here.
> 
> Though they could have an updated version, but just haven't published it.



I was browsing some other threads and came across a link in the Recorded Trust Documents thread that listed this filing. Note it says "Minor changes to the...trust reservation procedures..." I wonder if these could be the fee changes. The date matches up with the date quoted in the OP:


Amendment	A00039	MARRIOTT OWNERSHIP RESORTS, INC.	Approved	06/17/2014	2820	0
Comment: Minor changes to the public offering statement, trust reservation procedures, and component site charts. Added in state inventory and pending lawsuit information.
Examiner: Colvin, Sharri


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## BocaBoy (Jul 10, 2014)

JIMinNC said:


> Valid point, although prior to the transition to Destination Club, Marriott ran their weeks resales operation in parallel with their "new" weeks sales operations for many years. *Much the same argument could have been made then - who would buy a "new" developer week when they could buy a pre-owned week at somewhat less cost from MVCI Resales. I don't recall how the "New Marriott Week" prices compared to the "Pre-Owned Marriott Week" prices back then*, but that relative differential might yield some insight into what level Marriott Points resales might be at if and when they ever do start doing that.
> 
> I think the reason they were successful running parallel "New" and "Pre-Owned" weeks operations is they promote and market the "New" operation but the resales operate somewhat in the shadows and it seems you have to know about them and seek them out. One delivery channel for educated buyers and one for everyone else.



Actually, the resale operations did not start for a resort until it was nearly sold out, and then the resale prices were exactly the same as the developer prices.  I know because I bought one in 2001 and sold one in 2010 through Marriott resales.  They never competed against themselves in prices.  It was only after they stopped selling weeks that their resale prices for weeks were decreased from the developer price levels, and even that did not occur until a year or two later when the market was such than they couldn't sell anything resale at the higher levels.


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## JIMinNC (Jul 10, 2014)

BocaBoy said:


> Actually, the resale operations did not start for a resort until it was nearly sold out, and then the resale prices were exactly the same as the developer prices.  I know because I bought one in 2001 and sold one in 2010 through Marriott resales.  They never competed against themselves in prices.  It was only after they stopped selling weeks that their resale prices for weeks were decreased from the developer price levels, and even that did not occur until a year or two later when the market was such than they couldn't sell anything resale at the higher levels.



Thanks for clarifying that for me. I was always under the impression there was some differential back then in their weeks resales - still expensive but somewhat less than the "new" weeks.


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## slum808 (Jul 10, 2014)

billymach4 said:


> Dioxide can you please give me some examples of other TS model's that are analogous to this situation? In my small world view I think of Wyndham where retail owners buy in only to find out that their points are pennies to the dollar on the resale market. In this scenario it sounds like DC points are about .45 to the dollar (This is just my off the top of the head math). How about DVC they have ROFR and they do enforce it according to my limited knowledge. Please someone correct me and educate me if I am off the charts here?


DVC does have a ROFR and they have been using it sporadically during the last year. During the down turn they had a lot of foreclosures to absorb so they stopped exercising rofr and prices dropped a bit. Now they're back up to about 65-75% of retail depending on the resort. DVC does not have any junk fees, just a small rofr waiver fee.


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## GregT (Jul 10, 2014)

All,

I will be very curious to see if Marriott has in fact changed the transfer fees.  I agree with others that this will simply put further pressure on the resale point pricing (getting closer to that ROFR price), and also narrow the gap between the all-in price per point that a Resale Buyer would pay (to clear ROFR) and what that Resale Buyer could pay in a decent hybrid package.   

I called Owner Services and request a Transfer Request form that included the transfer fees.  They sent me the attached, which still has the old pricing.   So, if the change has been made (which would stink) then it is not yet well communicated.

But if they do make this change, this would be Skim II (I mean if we can have Puck Trick II......) and Marriott just devalued my Trust Points by $4,200, or 20%.   ........ 

Best,

Greg


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## GregT (Jul 10, 2014)

GregT said:


> And if they did make this change, this would be Skim II (I mean if we can have Puck Trick II......) and Marriott just devalued my Trust Points by $4,200, or 20%.   ........



How come there was no TUG crackpot out there in June 2010 warning about this possibility?


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## GregT (Jul 10, 2014)

Wait, never mind.  





GregT (June 2010) said:


> *If you are a potential purchaser of Marriott points*, do your research.   Marriott has just broken the covenant with its existing ownership and significantly impaired the value of what people own -- what’s to stop them from doing it to you?


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## SueDonJ (Jul 10, 2014)

GregT said:


> Wait, never mind.



Now that made me laugh.


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## mjm1 (Jul 10, 2014)

Just received an email from our broker. The closing company spoke with Marriott Owner Modification group this morning and confirmed that they have NOT increased the transfer fee yet, but there could be one in the future.  

This is good news, at least for the time being.  It will be interesting to see what they do or don't do going forward.

Mike


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## SueDonJ (Jul 10, 2014)

mjm1 said:


> Just received an email from our broker. The closing company spoke with Marriott Owner Modification group this morning and confirmed that they have NOT increased the transfer fee yet, but there could be one in the future.
> 
> This is good news, at least for the time being.  It will be interesting to see what they do or don't do going forward.
> 
> Mike



So this is from the same broker who said yesterday that he confirmed with Marriott that the fee had been increased, and now today he's confirmed that it hasn't?  And he's the only person we know of who sent out notices yesterday about it?

Still waiting on official communication from Marriott either way ...


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## mjm1 (Jul 10, 2014)

SueDonJ said:


> So this is from the same broker who said yesterday that he confirmed with Marriott that the fee had been increased, and now today he's confirmed that it hasn't?  And he's the only person we know of who sent out notices yesterday about it?
> 
> Still waiting on official communication from Marriott either way ...



I believe he had spoken with someone in sales, although I don't know for sure. The closing company is who spoke with owner modifications and was told the most recent information. The closing company then shared that with the broker.


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## chriskre (Jul 10, 2014)

GregT said:


> All,
> But if they do make this change, this would be Skim II (I mean if we can have Puck Trick II......) and Marriott just devalued my Trust Points by $4,200, or 20%.   ........
> 
> Best,
> ...



How much is a BI?  Beneficial Interest?


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## Fasttr (Jul 10, 2014)

chriskre said:


> How much is a BI?  Beneficial Interest?



250 points.


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## billymach4 (Jul 10, 2014)

So this may be speculation from an unconfirmed rumour. ? If found to be untrue it sure has started much analysis and bad emotions.


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## puckmanfl (Jul 10, 2014)

good evening...

I am very skeptical that MVCD would do this... It is just so egregious... It would clearly leak out to the pool area where the prospective buyers are.  All it would take is juyst one well healed Trust Owner to start spewing venom atthe hot tub...

I will watch and wait till info becomes available...


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## Saintsfanfl (Jul 10, 2014)

puckmanfl said:


> good evening...
> 
> I am very skeptical that MVCD would do this... It is just so egregious... It would clearly leak out to the pool area where the prospective buyers are.  All it would take is juyst one well healed Trust Owner to start spewing venom atthe hot tub...
> 
> I will watch and wait till info becomes available...



You might be right but wasn't the $200 per BI already egregious? I wouldn't put it past them but it does seem strange that if it went up on 6/17 this is the only report we are hearing about it.


----------



## rahulgopi (Jul 10, 2014)

It all started when I had two calls with one Marriott Sales Rep and her Manager regarding a COMBO purchase. They were adamant that resale points are not worth it as the Junk fee will be $500 / BTI and this was recently increased from $200. 
So I went back to the agent and closing company to get more clarification. Agent and LBRTA came back confirming it via _[Deleted.]_ MVCI resales department, who mentioned fees got hiked from June 17.

Closing company came back with a different answer today, forwarded an email from <Owner.Modifications@vacationclub.com> stating that Junk fees are not updated yet but may in the future.

The whole episode left a bad taste for me in the process of buying a 6.5K premium account.  

For me, I am going to wait a bit more before venturing into the points club. Hopefully in a year or two the whole points system at Marriott will mature like HGVC or Worldmark.


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## kds4 (Jul 10, 2014)

SueDonJ said:


> So this is from the same broker who said yesterday that he confirmed with Marriott that the fee had been increased, and now today he's confirmed that it hasn't?  And he's the only person we know of who sent out notices yesterday about it?
> 
> Still waiting on official communication from Marriott either way ...



Hi Sue,

This afternoon I received a resale transfer instruction and fee sheet to complete a pending resale points transaction, it is on MVCI letterhead and states a transfer'Initiation fee of $500 per BI must be paid to Marriott for the points to be usable in the exchange with a minimum fee of $3000, i am unable to post a screenshot from my phone as we travel from Lakeshore to NC, however, I believe this makes the fee hike 'real',


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## dioxide45 (Jul 10, 2014)

kds4 said:


> Hi Sue,
> 
> This afternoon I received a resale transfer instruction and fee sheet to complete a pending resale points transaction, it is on MVCI letterhead and states a transfer'Initiation fee of $500 per BI must be paid to Marriott for the points to be usable in the exchange with a minimum fee of $3000, i am unable to post a screenshot from my phone as we travel from Lakeshore to NC, however, I believe this makes the fee hike 'real',



Greg posted a document in post #38 that he received today that still shows the $200/$2000 initiation fee. So it seems that MVCI still doesn't know what is going on.

Would you be able to e-mail the document you have to someone and we can post it?


----------



## KenA (Jul 10, 2014)

There certainly has been some confusion around this increase.  But it now appears that effective July 10th, the increase is legitimate.  I have been attempting to purchase points resale while this is going on and have been back and forth with the broker who told me this evening that Marriott has confirmed the increase effective today.


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## billymach4 (Jul 10, 2014)

puckmanfl said:


> good evening...
> 
> I am very skeptical that MVCD would do this... It is just so egregious... It would clearly leak out to the pool area where the prospective buyers are.  All it would take is juyst one well healed Trust Owner to start spewing venom atthe hot tub...
> 
> I will watch and wait till info becomes available...



I want to agree with you. But my thought is that new buyers at not thinking about resale value. The sales force will have in turn tell newbies that mvci is protecting and adding value to their investment. After all newbie is purchasing new pts. Why should anyone else be able to undercut mvci.


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## billymach4 (Jul 10, 2014)

I suspect the resale pts market was picking up steam. Sales was losing commission. This is a lever that mvci move to slow down resales.

Think about it. Mvci has no vested interest in the resale side of the fence. You own the pts and are are obligated to pay the mf. Its we are saddled with unloading whenever and at a loss.


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## kds4 (Jul 10, 2014)

dioxide45 said:


> Greg posted a document in post #38 that he received today that still shows the $200/$2000 initiation fee. So it seems that MVCI still doesn't know what is going on.
> 
> Would you be able to e-mail the document you have to someone and we can post it?



Please PM me an email address and I will forward it to you.


----------



## rahulgopi (Jul 10, 2014)

billymach4 said:


> I want to agree with you. But my thought is that new buyers at not thinking about resale value. The sales force will have in turn tell newbies that mvci is protecting and adding value to their investment. After all newbie is purchasing new pts. Why should anyone else be able to undercut mvci.



In reality, owners that want to sell will get lower price per point, Marriott will exercise ROFR and accumulate points for cheap and recycle until they run out of buy-back funds. At this point Marriott will probably reduce the ROFR threshold and price per point will move down.  Marriott will win in every aspect as they will collect 2.5X times more in junk fees alone.


----------



## kds4 (Jul 10, 2014)

KenA said:


> There certainly has been some confusion around this increase.  But it now appears that effective July 10th, the increase is legitimate.  I have been attempting to purchase points resale while this is going on and have been back and forth with the broker who told me this evening that Marriott has confirmed the increase effective today.



It is official on all new contracts from today forward. The MVCI Exec I referenced in my first post met with the brokers association I also referenced there earlier today. At that meeting, he confirmed it is in effect from today forward. It should have been last month, but based on confusion he said it would start today, 7/10/14.


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## billymach4 (Jul 10, 2014)

*what about the rental market for dc pts*

If more owners realize that it harder to sell their pts then more pts in  the rental market will begin to materialize. What will that do to the pprice of rental pts?

Agree or disagree?


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## kds4 (Jul 10, 2014)

billymach4 said:


> If more owners realize that it harder to sell their pts then more pts in  the rental market will begin to materialize. What will that do to the pprice of rental pts?
> 
> Agree or disagree?



I agree that this will potentially drive down points rental income for any/all points owners down the road.


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## dioxide45 (Jul 10, 2014)

kds4 said:


> Please PM me an email address and I will forward it to you.



This appears to be identical to the document Greg posted except for the fees section.


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## dioxide45 (Jul 10, 2014)

kds4 said:


> It is official on all new contracts from today forward. The MVCI Exec I referenced in my first post met with the brokers association I also referenced there earlier today. At that meeting, he confirmed it is in effect from today forward. It should have been last month, but based on confusion he said it would start today, 7/10/14.



So is this on new contracts where points are sold by MVCI. Meaning I bought from MVCI yesterday, then the initiation fee is $200/$2000 if I want to resell. If I buy from MVCI tomorrow and want to resell, the initiation fee will be $500/$3000? Or new resale contracts between a buyer and seller.

The term new contract is confusing.


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## dioxide45 (Jul 10, 2014)

billymach4 said:


> If more owners realize that it harder to sell their pts then more pts in  the rental market will begin to materialize. What will that do to the pprice of rental pts?
> 
> Agree or disagree?



It may mean more people try to rent instead of resell. Potentially driving down the rental prices. Of course, this won't really change the overall price per point that one will pay resale. People will just adjust their offers. Of course it will drive down the price to the seller and make it more likely that units get snapped up via ROFR.


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## GregT (Jul 10, 2014)

dioxide45 said:


> Of course it will drive down the price to the seller and make it more likely that units get snapped up via ROFR.



Which is exactly what Marriott intended by this.   Very disappointing.


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## Fasttr (Jul 10, 2014)

dioxide45 said:


> It may mean more people try to rent instead of resell. Potentially driving down the rental prices. Of course, this won't really change the overall price per point that one will pay resale. People will just adjust their offers. Of course it will drive down the price to the seller and make it more likely that units get snapped up via ROFR.



It could have the opposite affect, if people feel the junk fees deter them from adding resale points, more people could be renting the additional points they need....thus driving up the rental price per point.


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## dioxide45 (Jul 10, 2014)

Fasttr said:


> It could have the opposite affect, if people feel the junk fees deter them from adding resale points, more people could be renting the additional points they need....thus driving up the rental price per point.



Very possible. I guess we will have to wait and see.


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## dioxide45 (Jul 10, 2014)

Resale could very well be cutting in to retail sales, but I highly doubt it. At least not by much. Mainly, there are very few resale listings out there compared to the sales volume Marriott is doing.

One other issue they have is that resale points look, work and act exactly the same as retail points. In the old weeks world there was one big difference, and that was the ability to convert to MR points. They haven't, at least in practice, done this with points. There is verbiage in the Exchange Procedures where it indicates they can prevent resale owners from using Special Benefits, but it doesn't seem that they are doing this currently with resale points.


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## dioxide45 (Jul 10, 2014)

billymach4 said:


> So this may be speculation from an unconfirmed rumour. ? If found to be untrue it sure has started much analysis and bad emotions.



We did have nearly 2,000 posts all on speculation prior to the DC rollout. We all love a good speculation thread .Of course that did come to pass, though I am sure much of what we speculated about isn't how it ended up being.


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## ira g (Jul 10, 2014)

Fasttr said:


> It could have the opposite affect, if people feel the junk fees deter them from adding resale points, more people could be renting the additional points they need....thus driving up the rental price per point.



Do you think Marriott's next step is the limiting of renting DC points?


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## Fasttr (Jul 10, 2014)

ira g said:


> Do you think Marriott's next step is the limiting of renting DC points?



Excellent question.  I've often wondered if they will, at some point, limit the # of transfers you can do in a year....that would take the mega-renters (those listing 100K+ points for rent each year) out of the game of renting all of their points in smaller chunks of 1000-5000 each transaction... and likely would significantly drive up the rental cost per point.


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## skyequeen (Jul 10, 2014)

The broker we are working with on a purchase of resale of points contacted Marriott and was told there was no change yet but there could be in future.  This is a confusing contradiction to other posts.  It seems one hand doesn't know what the other is doing at Marriott right now.  Not many people know to buy points resale, so it would seem Marriott is risking antagonizing the very people who are most likely to promote Marriott timeshare ownership for little gain since they make some profit already off of resale transactions with no additional marketing cost.  It is like a store that turns over inventory, the more you turn it over, the more income you earn per square foot.  Conversely, if people don't believe they can re-sell purchases when necessary for a reasonable recovery of investment, they may buy less going forward.  Am I missing something here?


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## dioxide45 (Jul 10, 2014)

ira g said:


> Do you think Marriott's next step is the limiting of renting DC points?





Fasttr said:


> Excellent question.  I've often wondered if they will, at some point, limit the # of transfers you can do in a year....that would take the mega-renters (those listing 100K+ points for rent each year) out of the game of renting all of their points in smaller chunks of 1000-5000 each transaction... and likely would significantly drive up the rental cost per point.



Though it probably won't prevent people from renting points and making a reservation in the renters name. Of course that is more work and more trouble, but doesn't require an actual transfer of points between owners.


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## KenA (Jul 10, 2014)

If Marriott intends to drive the price down and snag points ROFR to resell at retail, I wonder if contracts with a higher price per point but having seller pay transfer fees would negate the ROFR.  

Meaning that if the total desired price "all in" from the buyer is $5.25 per point for a 2500 point package (which would be $4.25 + transfer fees under the old rules and then the total averaged), then why not offer $5.25 per point and have seller pay all closing and transfer fees.  Now if Marriott exercises ROFR, the seller would not be paying any transfer fees because there would be none, only external resales incur the fees and they are not mandatory (only to get full use of the system).  Marriott now will be paying more to get points ROFR then before the increase.

I think this would be a preferable way to purchase points rather than offer $3.00 per point and have Marriott instantly snag via ROFR.

Not sure if there is something I'm missing, but if the contract I am working on gets hit with the new fees, this is my plan.

In the end, its all going to affect the sellers and owners of points making the value decrease since buyers will not want to pay these absurd transfer fees.


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## rovitm (Jul 10, 2014)

ira g said:


> Do you think Marriott's next step is the limiting of renting DC points?



I have been to a few points presentations over the last couple of years.  My comments to the sales team as to why I wouldn't purchase was the lack of an exit strategy should I want to sell.  On all of presentations I was told a buy back program was coming and in the meantime you can always rent out your points. If it is true that they are raising their fees for resale buyers and/or ever restrict the terms of renting points, I would think more potential buyers would think twice about purchasing the product.  It doesn't seem like the correct business decision to follow.


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## dioxide45 (Jul 10, 2014)

Does any other resort system or timeshare have a transfer fee of $3000 or more? Some of the Mexican timeshares have high transfer fees, but I don't think any are that high. Even at $2000, Marriott is one of the highest in the industry. At $3000 it is obviously higher and perhaps one of the highest. It is rather disappointing that they would take this route. Very anti owner.

Do un-initated points have unfettered access to trust reservations for all reservation windows? Of course, it seems that MVCI dumps most trust inventory in to the Exchange Company at 12 months anyway, so you need to be a member of the Exchange Company (by paying the initiation fees) to get access to most reservations.


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## billymach4 (Jul 10, 2014)

*We need Amazon to intervene!*

Marriott does everything in its power to drive prices up.

A company like Amazon does everything in its power to drive prices down. 

What is wrong with this picture? I wish Amazon was in the timeshare business? This is a great idea! How about timeshares in the Amazon Cloud!

PS... I am hungover from an all day Conference where I attended the Amazon AWS Summit at the Javits Center on the west side. 

Amazon Web Services. So aside from selling books Amazon and Hatchette Controvesy. Amazon is a HUGE Internet Cloud service provider. Their pricing structure is extremely cheap! And in some cases absolutely free! And you don't have to sit thru a 2 hour promotion.


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## Fasttr (Jul 10, 2014)

dioxide45 said:


> Do un-initated points have unfettered access to trust reservations for all reservation windows? Of course, it seems that MVCI dumps most trust inventory in to the Exchange Company at 12 months anyway, so you need to be a member of the Exchange Company (by paying the initiation fees) to get access to most reservations.



According to the multisite public offering statement for the Trust point sales, it seems to say that if you don't pay the initiation fee, you can't access any NON-Trust inventory except in the 60 day window... which would leave you to believe you can access Trust inventory in any window (but as you said, that is seemingly very limited as they put it all in the Exchange very early on).  The PDF I have can't be cut and pasted here....so I included as a PDF...see last section for applicable wording.


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## TUGBrian (Jul 11, 2014)

*New Marriott Resale Requirements coming soon*

Info was passed along to me from a trusted source...I figured I would share.

EXTERNAL TRANSFER REQUIREMENTS

Please note that new owners will not be able to utilize the timeshare interest until all necessary documents and information described below are provided. *Due to the volume of transfers being received, this process could take 15 – 30 business days*


REQUIRED DOCUMENTS AND INFORMATION FOR MARRIOTT VACATION CLUB DESTINATIONS


	External Transfer Form (ALL REQUIRED FIELDS MUST BE COMPLETED or Transfer may be delayed.)

	Copy of all pages of the new recorded deed  -  ABSOLUTELY NO EXCEPTIONS

•	First Year of Occupancy/Usage for the new buyer 

	Complete address and telephone number for EACH new owner (Transferee/Buyer)

	Copy of driver’s license or passport for EACH new owner (Transferee/Buyer)

	Relationship between previous owner and new owner (i.e. Transferor(s) = Parent(s) and Transferee(s) = Child(ren)  OR   No relationship between Transferor(s) and Transferee(s), etc.)

	Existing owner number for all new owners (Transferee/Buyer), if applicable

	Contact name and email address for Sales/Closing Agent, if applicable (email will be sent when completed) 

	W-9 form for Marriott Vacation Club Destinations for Each New Owner 

•	A Right of First Refusal (ROFR) will be required for all Beneficial Interest transfers.  Please see below for the email address & fax number. (MVC Points Only) This must be with the docs you send in. 

FEES

•	$300 Education Fee for Marriott Vacation Club Destinations is required in order to complete a transfer  if the new owner is not already the owner of a Beneficial Interest . No personal checks are accepted, cashier’s checks only. 

•	$500 per Beneficial Interest, with a $3,000 minimum, for Marriott Vacation Club Destinations for Initiation Fee is required in order to complete a transfer.  This fee is required to gain access to the Exchange program. No personal checks are accepted, cashier’s checks only. 


	$25.00 per legal name change (divorce, marriage, etc.)  (Must have copy of marriage certificate)

	$25.00 per corporation agent change to add or remove agent (Must have corporation docs with request.)


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## SueDonJ (Jul 11, 2014)

Obviously seeing the documents pretty much makes the price increase very clear.  I just want to follow up my post from yesterday and report that an MVW Community Relations Manager responded tonight to my email, also confirming the increase in the Initiation Fee for DC Points transfers "as of July 1st" to $500/BI, $3,000 Minimum.


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## windje2000 (Jul 11, 2014)

SueDonJ said:


> Obviously seeing the documents pretty much makes the price increase very clear.  I just want to follow up my post from yesterday and report that an MVW Community Relations Manager responded tonight to my email, also confirming the increase in the Initiation Fee for DC Points transfers "as of July 1st" to $500/BI, $3,000 Minimum.



Just a note to suggest you update the Points FAQ sticky with the updated fee structure.


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## puckmanfl (Jul 11, 2014)

good morning....

Wait until this gets out at the hot tub...or on the lawn in front of the MOC sales center...

Basically, this will kill the resale market....

You will not even be able to give points away!!!!


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## SueDonJ (Jul 11, 2014)

windje2000 said:


> Just a note to suggest you update the Points FAQ sticky with the updated fee structure.



Doh!  Thanks for the reminder.


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## KenA (Jul 11, 2014)

puckmanfl said:


> good morning....
> 
> Wait until this gets out at the hot tub...or on the lawn in front of the MOC sales center...
> 
> ...



Exactly....What are Marriott sales reps going to say at the presentation when you ask about an exit strategy?  Well...we plan on putting a buyback option in place sometime in the future, but until then we have just taken steps to effectively kill the resale market by increasing fees to an absurd level.  So its best to just think of this as a long term purchase...there is really no need for you to sell.


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## JIMinNC (Jul 11, 2014)

puckmanfl said:


> good morning....
> 
> Wait until this gets out at the hot tub...or on the lawn in front of the MOC sales center...
> 
> ...



Why do you think this will kill resales? Obviously, it doesn't help the resale market, but the increase only adds a little over a dollar to the cost of a resale. If you assume a $4.50 resale price - the old fees yielded a total cost of about $5.30. Now it will be around $6.50. While that may price some percentage of the buyers out - $6.50 is still way better than $12.12 and rising. It seems the business case for resale is still intact. 

The main thing this seems to do is significantly narrow the gap between the cost of a "combo" week/points purchase and a straight points resale.

I'm still a Marriott/DC newbie so maybe I'm missing something, but just based on the pure numbers, while it's a huge increase, the business case for resale seems to still be intact - albeit at a slightly higher price point than a few weeks ago.

Now if Marriott would start limiting the usability of resale points in a significant way - that would really be a game changer.


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## SueDonJ (Jul 11, 2014)

puckmanfl said:


> good morning....
> 
> Wait until this gets out at the hot tub...or on the lawn in front of the MOC sales center...
> 
> ...



Some version of this has been said on TUG about every single timeshare system out there, ever since I've been here anyway.  It would make sense, make an impact, if the majority of conversations at the resorts were about things we discuss on TUG.  But they're not!  Folks are generally very happy while they're enjoying their Marriott vacations!  The most dire predictions never came true when Weeks were the only game in town and IMO, they're not going to materialize here either.

So this change will impact the external resale market with respect to whatever value/return owners might expect to get if they sell.  And maybe, would-be buyers will think twice.  I don't mean to be indifferent here but why would any of us expect anything else from Marriott?!  It's their objective to sell their product and it's smart business for them to suppress any outside negative influences as much as is legally possible.

Quite honestly, it's the way this all unfolded that I find most discouraging - MVW simply has to do a better job keeping their owners/members in the loop about important information, or, at the very least, making sure that their various representatives company-wide are all on the same page.


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## jeepie (Jul 11, 2014)

JIMinNC said:


> The main thing this seems to do is significantly narrow the gap between the cost of a "combo" week/points purchase and a straight points resale.


And, when considering the gap, one should factor in the Marriott incentives, such as MR points, MR Elite status, points bonus if charged to Chase Marriott Visa, etc. (which admittedly vary from time to time).
MVCI takes a 40% commission on the brokered week, puts the week into new hands (where the new owner is motivated to keep paying MFs), and still sells a chunk of DC points. Makes good business sense to me from MVCIs perspective. For resale purchasers, not so much. Cheers.


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## taffy19 (Jul 11, 2014)

puckmanfl said:


> good morning....
> 
> Wait until this gets out at the hot tub...or on the lawn in front of the MOC sales center...
> 
> ...


We were at the MOC when they reduced the sales prices by 25% and the resale prices went down rapidly too after that.  It was a crazy week and many owners were upset.

Now they have done it again and will the next move be that renting points will be taken away when it becomes too popular or will the miscellaneous fees come back again?

Marriott seems to be more concerned about the bottom line rather than long term growth and customer satisfaction and it may backfire one day.


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## KenA (Jul 11, 2014)

I agree with the comments about Marriott protecting their interest to a point... but if someone invests in the system and needs to sell for whatever reason, there should be a more reasonable way to do so.  It just seems that these fees are all for the benefit of Marriott and the owners will take a bath on selling.  If Marriott did not impose all these fees, then sellers might be able to recoup more of their investment, keeping the price point closer to retail. 

These fees will either drive the price per point down further or buyer's will be asking sellers to pay to offset the higher fees.


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## GregT (Jul 11, 2014)

All,

I think this is a really interesting move by Marriott -- what's most interesting to me is that _it also creates an artificial barrier for who can acquire Trust Points_.   

This creates something like a Trust Club:  you either need to pay full price to Marriott, or you paid a Resale Price that is artificially high to clear ROFR.   I don't think this is intended to earn junk fees for Marriott, I think this is intended to manipulate resale pricing.     This blocks the lower price that might clear ROFR and requires the Resale Buyer to pay something comparable to the hybrid price -- so why not just buy from Marriott.  It's pretty brutal to the loyal customer that bought Trust Points and will now get less when selling but we already knew that yesterday's customer is a secondary consideration in today's timeshare world.   

It is very possible that Marriott thought that the original $200 per BI/$2,000 Minimum was enough to create a Trust Club (because Disney -- Marriott's model -- holds resale value better than Marriott).  And this 2014 action is simply a course correction to try to get back to the Trust Club concept -- Marriott only intended people who paid a lot to be able to have Trust Points.

This makes the most sense though if Trust Points are special, and at the moment, Trust Points and Elected Points aren't that different.  We've noticed infrequent examples where Trust Points can access inventory not available to Elected Points, and now we must watch for more of these.   

To be determined if in the future, Trust Points > Elected Points (from a usage perspective).   

To be determined if in the future, Trust Points do supercharge Elected Points, making that Trust Point purchase more palatable to the legacy week owner.  

Best,

Greg


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## kds4 (Jul 11, 2014)

SueDonJ said:


> Obviously seeing the documents pretty much makes the price increase very clear.  I just want to follow up my post from yesterday and report that an MVW Community Relations Manager responded tonight to my email, also confirming the increase in the Initiation Fee for DC Points transfers "as of July 1st" to $500/BI, $3,000 Minimum.



Hi Sue,

I just sent you a PM. Thanks.


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## Marky (Jul 12, 2014)

*Selling Marriott Destination Points*

Has anyone had experience buying or selling Destination Points in the secondary market? I am trying to sell, just learned that there is a "transfer fee" of $2.00 per point: $10,000 in my case.
Any thoughts??

Marky


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## FractionalTraveler (Jul 12, 2014)

There is another thread discussing this topic here: http://tugbbs.com/forums/showthread.php?t=213793

The fees have been increased recently.

FT


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## kds4 (Jul 12, 2014)

Marky said:


> Has anyone had experience buying or selling Destination Points in the secondary market? I am trying to sell, just learned that there is a "transfer fee" of $2.00 per point: $10,000 in my case.
> Any thoughts??
> 
> Marky



We are in the middle of a resale points purchase right now. If you want to PM me, I can discuss our experience so far in dealing with the seller, MVCI, the broker, and the closing company (and the recent fee changes with Marriott resales).


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## dioxide45 (Jul 12, 2014)

Marky said:


> Has anyone had experience buying or selling Destination Points in the secondary market? I am trying to sell, just learned that there is a "transfer fee" of $2.00 per point: $10,000 in my case.
> Any thoughts??
> 
> Marky



That is aweful. Sounds like you have 5,000 points, which is equal to 20 BIs. With the new fee structure of $500 per BI, it makes unloading your points very hard. I am not sure if you can possibly sell them in smaller packages instead of all 5,000 at once? That may make them somewhat more attractive to sell.


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## kds4 (Jul 12, 2014)

dioxide45 said:


> That is aweful. Sounds like you have 5,000 points, which is equal to 20 BIs. With the new fee structure of $500 per BI, it makes unloading your points very hard. I am not sure if you can possibly sell them in smaller packages instead of all 5,000 at once? That may make them somewhat more attractive to sell.



That is a great question. I believe that you can parcel out/resell your points holdings in increments as small as 1 BI of 250 points. However, that is very inefficient (and pretty much unsellable unless someone just has 'junk fee monies' to burn). The 'sweet' spot for purchasing to spread the fees under the old $200 initiation/transfer fee per BI was to purchase a minimum of 2500 resale points based on the old $2k minimum fee (10 BIs at $200 each). Under the recent price gouging of junk fees to $500 per BI, the new 'sweet/sour' spot is to purchase a minimum of only 1500 resale points (6 BIs at $500 each based on the new $3k minimum fee).   

So, if the OP decided to try to sell, any 250 point increments between 1500 and 5000 should be possible. Unless, I have missed something in the documents prohibiting the transfer of anything less than all BIs held.


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## dioxide45 (Jul 12, 2014)

kds4 said:


> That is a great question. I believe that you can parcel out/resell your points holdings in increments as small as 1 BI of 250 points. However, that is very inefficient (and pretty much unsellable unless someone just has 'junk fee monies' to burn). The 'sweet' spot for purchasing to spread the fees under the old $200 initiation/transfer fee per BI was to purchase a minimum of 2500 resale points based on the old $2k minimum fee (10 BIs at $200 each). Under the recent price gouging of junk fees to $500 per BI, the new 'sweet/sour' spot is to purchase a minimum of only 1500 resale points (6 BIs at $500 each based on the new $3k minimum fee).
> 
> So, if the OP decided to try to sell any 250 point increment between 1500 and 5000 should be possible. Unless, I have missed something in the documents prohibiting the transfer of anything less than all BIs held.



I think there is a limitation where you can't sell BIs that would make someone an owner of less than a Base Interest. So I would think you would have to sell at least in 1,500 point packages. Also, a 5,000 point owner couldn't sell 4,500 of their points leaving them with only 500, which is less than a Base Interest. I think that is the only real limitation. Otherwise, I see no reason that you can't parcel out the BIs.


----------



## XyzTimeshare (Jul 12, 2014)

kds4 said:


> That is a great question. I believe that you can parcel out/resell your points holdings in increments as small as 1 BI of 250 points. However, that is very inefficient (and pretty much unsellable unless someone just has 'junk fee monies' to burn). The 'sweet' spot for purchasing to spread the fees under the old $200 initiation/transfer fee per BI was to purchase a minimum of 2500 resale points based on the old $2k minimum fee (10 BIs at $200 each). Under the recent price gouging of junk fees to $500 per BI, the new 'sweet/sour' spot is to purchase a minimum of only 1500 resale points (6 BIs at $500 each based on the new $3k minimum fee).
> 
> So, if the OP decided to try to sell, any 250 point increments between 1500 and 5000 should be possible. Unless, I have missed something in the documents prohibiting the transfer of anything less than all BIs held.





What is a "BI"?

How do the weeks compare to the point system. In other words 1500 points is that equivalent to an average one week in Maui or what?


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## kds4 (Jul 12, 2014)

dioxide45 said:


> I think there is a limitation where you can't sell BIs that would make someone an owner of less than a Base Interest. So I would think you would have to sell at least in 1,500 point packages. Also, a 5,000 point owner couldn't sell 4,500 of their points leaving them with only 500, which is less than a Base Interest. I think that is the only real limitation. Otherwise, I see no reason that you can't parcel out the BIs.



Great point. I hadn't considered the requirement to maintain as a seller or obtain as a buyer at least a 'base interest'. I have to think that the definition of what constitutes a 'base interest' is flexible. For example, when we enrolled one of our weeks in the DC program, we purchased only 1,000 points (and not the 1,500 they claimed was the minimum). So, I assume 'our' base interest is 1,000?


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## dioxide45 (Jul 12, 2014)

kds4 said:


> Great point. I hadn't considered the requirement to maintain as a seller or obtain as a buyer at least a 'base interest'. I have to think that the definition of what constitutes a 'base interest' is flexible. For example, when we enrolled one of our weeks in the DC program, we purchased only 1,000 points (and not the 1,500 they claimed was the minimum). So, I assume 'our' base interest is 1,000?



I believe a Base Interest is different for enrolled owners and pure trust point owners. Pure trust points, a Base Interest is 1,500. Enrolled owners it is only 500. So I suppose it is possible to sell off in 500 point (2 BI) increments as long as one is selling to enrolled owners. However, we don't see Base Interest defined anywhere in the documentation.


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## XyzTimeshare (Jul 12, 2014)

*What is a "BI"?*



kds4 said:


> That is a great question. I believe that you can parcel out/resell your points holdings in increments as small as 1 BI of 250 points. However, that is very inefficient (and pretty much unsellable unless someone just has 'junk fee monies' to burn). The 'sweet' spot for purchasing to spread the fees under the old $200 initiation/transfer fee per BI was to purchase a minimum of 2500 resale points based on the old $2k minimum fee (10 BIs at $200 each). Under the recent price gouging of junk fees to $500 per BI, the new 'sweet/sour' spot is to purchase a minimum of only 1500 resale points (6 BIs at $500 each based on the new $3k minimum fee).
> 
> So, if the OP decided to try to sell, any 250 point increments between 1500 and 5000 should be possible. Unless, I have missed something in the documents prohibiting the transfer of anything less than all BIs held.




What is a "BI"?

How do the weeks compare to the point system. In other words 1500 points is that equivalent to an average one week in Maui or what?


----------



## dioxide45 (Jul 12, 2014)

XyzTimeshare said:


> What is a "BI"?
> 
> How do the weeks compare to the point system. In other words 1500 points is that equivalent to an average one week in Maui or what?



A BI is 250 points. 1,500 DC points will not go far. People recommend buying a 1,500 package because then you can simply rent the remainder of your needs from other owners for only a few cents more per point than the MFs. Much cheaper than the huge upfront costs of a large DC points package.


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## GregT (Jul 12, 2014)

GregT said:


> Marriott only intended people who paid a lot to be able to have Trust Points.



I wanted to explore this concept a little more, using my recent purchase as an example.

I bought for $5/point.   With all the junk fees, it was $6/point all-in.   We know from discussions with Marriott sales folks that they can construct a hybrid package that sells points for about $6.50/point all-in.    We also heard from brokers that offers below $4.XX/point are not clearing ROFR.

So looking at my deal, it is like this:

Component....................Old System..........New System

Education Fee.................$300...................$300
Initiation Fee..................$2,800................$7,000
Closing Costs..................$590...................$590
Purchase Price.................$17,500..............$13,300

Total paid.......................$21,190..............$21,190

Price per point.................$5.00.................$3.80
(to Seller)

My belief is that the $3.80 per point which would now be submitted to Marriott will not clear ROFR.   

Additionally, if I wanted to still pay $5/point, I'm now having to write a check for $25,400, which means I'm now paying $7.25 all-in for the points -- and a hybrid looks attractive.

The ~$4.25/point that I've heard from broker is a ROFR line translates to $6.50 per point for my package -- right where they were telling me about hybrid purchases in recent sales presentation.

In this manner, I think Marriott heavily influences resale pricing by introduction of an artificial barrier (big junk fees) that either force the buyer to pay hybrid-equivalent pricing, or prices the points where Marriott will exercise ROFR.

Accordingly, it is no longer possible to buy Trust Points resale at a lower price than points are available directly from Marriott (via hybrid) --- therefore people who want to own Trust Points must pay a lot for them -- no back door.

Best,

Greg


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## TheTimeTraveler (Jul 12, 2014)

Greg;  well put.

I think this may push up the value of renting points as that now becomes a much more of a value rather than spending all that money on buying resale points.





.


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## dioxide45 (Jul 12, 2014)

GregT said:


> I wanted to explore this concept a little more, using my recent purchase as an example.
> 
> I bought for $5/point.   With all the junk fees, it was $6/point all-in.   We know from discussions with Marriott sales folks that they can construct a hybrid package that sells points for about $6.50/point all-in.    We also heard from brokers that offers below $4.XX/point are not clearing ROFR.
> 
> ...



Great analysis. In the end, it hurts the customers in that they either can't sell their points because no one will bother to try to buy them or they get a low price per point when MVCI snags them via ROFR.

If MVCI was to do what the sales reps have long promised, start a buyback program where the customers could get a decent value for their points when they need to sell, I could perhaps forgive them. Though simply increasing the junk fees IMO is unconscionable.


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## GregT (Jul 12, 2014)

TheTimeTraveler said:


> Greg;  well put.
> 
> I think this may push up the value of renting points as that now becomes a much more of a value rather than spending all that money on buying resale points.



TimeTraveler,

This may indeed push up the value of renting points.   When Trust Points first came out, and points were $9.20 per point and MFs were $0.40 per point, we did an analysis somewhere in TUG that derived a fair value of points rentals of $0.65 per point.

The problem with this mathematical computation is that Trust Points currently equal Elected Points, and therefore the larger supply of Elected Points brings down point rental values for all points.

This is my curiousity therefore whether the usage of Elected Points will continue to be comparable to the usage of Trust Points -- if so, the rental value of both will remain the same.  If Trust Points become a more reliable Point, then they will definitely command a premium over Elected Points in the rental market.

Interesting stuff.

Best,

Greg


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## KenA (Jul 12, 2014)

GregT said:


> I wanted to explore this concept a little more, using my recent purchase as an example.
> 
> I bought for $5/point.   With all the junk fees, it was $6/point all-in.   We know from discussions with Marriott sales folks that they can construct a hybrid package that sells points for about $6.50/point all-in.    We also heard from brokers that offers below $4.XX/point are not clearing ROFR.
> 
> ...



Greg,

I completely agree that $3.80 will not clear ROFR, but I think what might end up happening is that buyers will offer $6.00 per point and have the seller pay all the costs and transfer fees.  If Marriott buys ROFR, that are paying a higher amount for the points ($6.00) and the seller will not have to pay initiation (junk) fees, since the fees would not apply to Marriott buying it themselves.  It seems like Marriott could end up paying more per point to ROFR.

In the end, it still the seller who gets hurt because I suspect buyers still have the same value in mind and will construct a deal which reflects that.


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## cman (Jul 12, 2014)

We've rented weeks at various Marriott properties for years and have been researching a potential purchase for the last six months. This announcement has pretty much brought our plans to a halt. The door has been shut on an exit strategy. If we buy, we'll most likely end up owning forever. It's a shame because we love the product, but renting is looking a lot better than owning right now.


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## dioxide45 (Jul 12, 2014)

KenA said:


> Greg,
> 
> I completely agree that $3.80 will not clear ROFR, but I think what might end up happening is that buyers will offer $6.00 per point and have the seller pay all the costs and transfer fees.  If Marriott buys ROFR, that are paying a higher amount for the points ($6.00) and the seller will not have to pay initiation (junk) fees, since the fees would not apply to Marriott buying it themselves.  It seems like Marriott could end up paying more per point to ROFR.
> 
> In the end, it still the seller who gets hurt because I suspect buyers still have the same value in mind and will construct a deal which reflects that.



I am not sure that this is a way to get Trust Points through ROFR. The Exchange Procecures indicate the following:



> Each New Member will be required to remit to the Exchange Company an initiation fee



That leads me to believe that the buyer has to pay the fees, not the seller. Since MVCI doesn't have to pay the initiation fee when taking the points back via ROFR, can they just subtract these amounts from the purchase price when determining whether to exercise?


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## pipet (Jul 12, 2014)

XyzTimeshare said:


> What is a "BI"?
> 
> How do the weeks compare to the point system. In other words 1500 points is that equivalent to an average one week in Maui or what?



Here is the point pricing chart for 2015 so you can see for yourself what you get for 1500 pts:

https://www.my-vacationclub.com/common/vc/en-us/pdfs/enrollment_legal_docs/points_charts_2015.pdf

You also might find the sticky "FAQ - MVC DESTINATIONS Points Program" helpful.


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## suzannesimon (Jul 12, 2014)

zfw4609 said:


> We've rented weeks at various Marriott properties for years and have been researching a potential purchase for the last six months. This announcement has pretty much brought our plans to a halt. The door has been shut on an exit strategy. If we buy, we'll most likely end up owning forever. It's a shame because we love the product, but renting is looking a lot better than owning right now.


You can forget about the points and just buy a week resale at your favorite resort.  You can then just use it, trade it or rent it.  No need to buy points to be a Marriott owner.  When you're done with it, you can sell it.


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## KenA (Jul 12, 2014)

dioxide45 said:


> I am not sure that this is a way to get Trust Points through ROFR. The Exchange Procecures indicate the following:
> 
> 
> 
> That leads me to believe that the buyer has to pay the fees, not the seller. Since MVCI doesn't have to pay the initiation fee when taking the points back via ROFR, can they just subtract these amounts from the purchase price when determining whether to exercise?



That's interesting and perhaps exactly what will happen.  I was told that when Marriott exercises ROFR, the contract stays as is and the buyer's name is replaced with Marriott.  I was told they even have to use the same title company etc.   

I am sure Marriott will figure a way around almost anything though, since it appears they can change the rules as needed.


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## puckmanfl (Jul 12, 2014)

good afternoon

XYZ...

XYZ  1500 pts gets you 1 weekend nite in Maui (2 bedroom)....

just saying...


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## kds4 (Jul 12, 2014)

puckmanfl said:


> good afternoon
> 
> XYZ...
> 
> ...



Or 30 nights (staying in 5 night increments Sunday to Friday) in a 2BR at Marriott Ocean Watch in Myrtle Beach (MOW) in the off-season....


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## mjm1 (Jul 12, 2014)

Greg, nice analysis. It will indeed be interesting to see how things continue to develop.

Mike


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## puckmanfl (Jul 12, 2014)

good evening




kds4 said:


> Or 30 nights (staying in 5 night increments Sunday to Friday) in a 2BR at Marriott Ocean Watch in Myrtle Beach (MOW) in the off-season....



I am sure MOW in February was exactly what XYZ had in mind for those 1500 pts...:hysterical:


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## SnowDogDad (Jul 12, 2014)

I just saw someone on Redweek selling theirs for $2.50 a point.  I'm assuming that Marriott will swoop in and buy those back in ROFR.   Because even with a $2.00/point transfer fee, that would be around $4.50 per point after the fact.  Still a pretty good deal.  

I had not previously commented on the increase in the transfer fee, but I suspect that this is just another way Marriott is trying to capitalize on the program.  I guess they figure they will make money on the sales one way or another.


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## sb2313 (Jul 12, 2014)

kds4 said:


> Or 30 nights (staying in 5 night increments Sunday to Friday) in a 2BR at Marriott Ocean Watch in Myrtle Beach (MOW) in the off-season....



I really think Marriott should consider adding this exact scenario to their sales presentations.  After all, they are selling the vacation dream, and I really can't think of a better one than that!


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## m61376 (Jul 13, 2014)

dioxide45 said:


> That leads me to believe that the buyer has to pay the fees, not the seller. Since MVCI doesn't have to pay the initiation fee when taking the points back via ROFR, can they just subtract these amounts from the purchase price when determining whether to exercise?



Wouldn't it all depend on the wording? Couldn't a contract stipulate buyer will pay seller X dollars. If Marriott imposes any fees on the buyer to fully utilize the purchased points, the seller will reimburse the buyer said costs at closing? If there are no dollar amounts specified, there are none to deduct, are there? It will be interesting to see what kind of open ended and creative contracts develop.


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## kds4 (Jul 13, 2014)

m61376 said:


> Wouldn't it all depend on the wording? Couldn't a contract stipulate buyer will pay seller X dollars. If Marriott imposes any fees on the buyer to fully utilize the purchased points, the seller will reimburse the buyer said costs at closing? If there are no dollar amounts specified, there are none to deduct, are there? It will be interesting to see what kind of open ended and creative contracts develop.



The broker who is handling our pending resale points purchase just recently handled such a transaction only in this case it involved the buyer reimbursing the seller for 2014 maintenance fees to obtain usage of those points this year. The transaction did not pass ROFR, despite an approximate $4.50 price PP. The broker believes that Marriott deducted the value of the reimbursements to see the 'pure' cost per point, which was approximately $4.05 leading them to ROFR. The broker was of the opinion that all transactions would be de-constructed in this way and ROFR decisions made on the 'pure' cost of the points being resold.


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## dioxide45 (Jul 13, 2014)

m61376 said:


> Wouldn't it all depend on the wording? Couldn't a contract stipulate buyer will pay seller X dollars. If Marriott imposes any fees on the buyer to fully utilize the purchased points, the seller will reimburse the buyer said costs at closing? If there are no dollar amounts specified, there are none to deduct, are there? It will be interesting to see what kind of open ended and creative contracts develop.



Possible, but MVCI does know those costs even if they are not specified. If this was a workable option, why wouldn't people have been using this technique before at the still very high junk fees?

Every once in a while we get in to a discussion about creative ways to circumvent ROFR. I remember similar discussions when Marriott was still working in weeks. I don't know of anyone that was successful with such techniques.


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## bogey21 (Jul 13, 2014)

KenA said:


> I am sure Marriott will figure a way around almost anything though, since it appears they can change the rules as needed.



This has to be frustrating for those wanting to buy or sell.

George


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## suzannesimon (Jul 13, 2014)

What is the motivation for the seller and broker to circumvent ROFR?  Don't they get paid either way?  It seems the only loser is the resale buyer?


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## Fasttr (Jul 13, 2014)

suzannesimon said:


> What is the motivation for the seller and broker to circumvent ROFR?  Don't they get paid either way?  It seems the only loser is the resale buyer?



I think posters are framing the discussion around GregT's example, whereby a knowledgeable buyer will simply reduce the price paid per point to make up for the higher junk fees....thus whether MVC steps in with ROFR or not, the seller loses as well.


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## JIMinNC (Jul 13, 2014)

Fasttr said:


> I think posters are framing the discussion around GregT's example, whereby a knowledgeable buyer will simply reduce the price paid per point to make up for the higher junk fees....thus whether MVC steps in with ROFR or not, the seller loses as well.



It's possible that might happen for a short while until the market adjusts, but I think the marketplace will soon take care of that. If buyers begin reducing their offered price to compensate for the higher fees, resulting in Marriott exercising ROFR, it won't be long until brokers and word of mouth educate buyers that they have to offer over $4.XX (or whatever) to clear ROFR. From reading posts on TUG, that's what seems to have happened under the old fees - Marriott's ROFR caused buyers to try to offer the lowest price that could clear ROFR. That should not change. Only the fees are going up, so buyers will just have to pay more to acquire resale DC points now. But even at a new "all-in" price of around $7, resale still has a $5/point advantage over "rack."

The only deal Marriott has that can compete with the new higher resale cost is the combo/hybrid approach. If Marriott begins using that more aggressively to combat resales, maybe the third-party resale market will be hurt. But at least in my limited experience, I had to bring up the combo approach - they did not offer it unsolicited.


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## dioxide45 (Jul 13, 2014)

Perhaps these higher fees will make more people consider buying a resale week over what may end up being harder to get or more expensive DC points? If prices on resale DC points do go up to $7pp and you can get a resale week for the equivalent of $2-$5 pp (even though no points come with it), it seems to make more sense that people may forgo expensive points and opt for a resale week instead.


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## JIMinNC (Jul 13, 2014)

dioxide45 said:


> Perhaps these higher fees will make more people consider buying a resale week over what may end up being harder to get or more expensive DC points? If prices on resale DC points do go up to $7pp and you can get a resale week for the equivalent of $2-$5 pp (even though no points come with it), it seems to make more sense that people may forgo expensive points and opt for a resale week instead.



That is certainly a decision we will need to make in the future if/when we opt to add to our recently acquired combo purchase. We wanted DC points for the flexibility of less-than-a-week stays so a small combo purchase (3375 total points - legacy and trust) made sense for now.

Having a higher demand Gold or Platinum week would be nice for the future, but since these come with higher DC points conversion levels, the required matching Trust purchase quickly drives the upfront cost to stratospheric levels. As we get experience over the next two-three years with the Marriott system, we'll have to decide if we absolutely must have more points or if cheaper weeks-only resales will work for us.

I am very envious of those of your who owned Gold/Platinum weeks prior to June 2010 and were able to enroll them without a matching Trust purchase. If Marriott were ever to have a "Limited Time Offer" where you could buy a resale week from their resale department and enroll it by just paying the junk fees (even the new higher fees) and not have to buy matching points (fat chance, I know), I would jump on it. I think we will like the flexibility of DC points, but the "Rack" price for anything but a small quantity is a killer.


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## Fasttr (Jul 13, 2014)

JIMinNC said:


> If Marriott were ever to have a "Limited Time Offer" where you could buy a resale week from their resale department and enroll it by just paying the junk fees (even the new higher fees) and not have to buy matching points (fat chance, I know), I would jump on it. I think we will like the flexibility of DC points, but the "Rack" price for anything but a small quantity is a killer.



See post #5 of THIS thread.  bmul2 is being told that can be done now with an Aruba week purchase from MVC resales.


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## JIMinNC (Jul 13, 2014)

Fasttr said:


> See post #5 of THIS thread.  bmul2 is being told that can be done now with an Aruba week purchase from MVC resales.



I saw that last night. I would probably only buy a week if it was somewhere I could go often. For us that would probably be HHI. 

Plus, the Marriott resale prices on Aruba yield prices per point of $10-$11, before any initiation fees. I don't recall from that other thread if the fees are waived, but even if they are, $10-$11 is too much.

I was thinking more in line with a resale Grand Ocean or Barony Gold OS or OF that yield prices per point of $3.50 to $4.50 before the initiation fees.


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## taxare (Jul 13, 2014)

Greg, I generally agree with your analysis. However, this is based on current pricing. Even though it will take a while, Marriott will continue to raise their prices, to $14-$15/point. While most of us on TUG think this is ridiculous, people still buy them at retail. I have always been a fan of bundling for new customers, however, the bundle price changes significantly depending on the week purchased and you have to buy an equivalent number of points that are attached to the resale week. I could see them adjusting the resale week prices as well for properties with lower per point pricing. Between the future higher retail price and higher week prices, I believe it will still be beneficial to buy resale even with the new higher fees. Upsetting and troubling yes, is the world falling apart and the resale market closed, like some are suggesting I don't buy it. Thanks and regards.


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## darius (Jul 13, 2014)

I believe Marriott is going to hit (hard) again with a potential lawsuit.   Just look at the Ritz Carlton owners existing out of the "trust" and taking Marriott to court for loss of value -- here we go again but this time for Marriott owners.  

I've pondered the idea of adding some DC points to my post 2010 weeks so I can add a few days "here and there..".    However, it doesn't make any financial sense to do so.    Even if you purchase an additional week (resale)and only use it for 3 of the 7 nights it works out CHEAPER in both initial purchase and annual fees.    

In my opinion, they need to allow post 2010 weeks to enroll in the trust(if they were smart, requiring some kind of DC point purchase at the same time)  and stop gouging fees for resale trust points to allow the free market to work.   

Marriott is doing nothing more than ruining any potential value to the customer who needs to resale his/her points.   

Curious to see how this all plays out -- in the meantime, the best value is purchasing resale weeks before they are all gone.


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## Ralph Sir Edward (Jul 13, 2014)

I guess I take a longer term view. What is going to happen to Marriott's points sale and resale market come the next recession? When MVC can't afford ROFR, like back in 2009?


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## johnrsrq (Jul 13, 2014)

I'm not a Marriott weeks or DC member. Is there a current PDF available of the terms and conditions of being a club member- somewhere on TUG?  

I'm actually interested in the legal responsibilities on both parties.


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## dioxide45 (Jul 13, 2014)

johnrsrq said:


> I'm not a Marriott weeks or DC member. Is there a current PDF available of the terms and conditions of being a club member- somewhere on TUG?
> 
> I'm actually interested in the legal responsibilities on both parties.



This is from the Points FAQ.

Exchange Procedures


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## FractionalTraveler (Jul 13, 2014)

darius said:


> I believe Marriott is going to hit (hard) again with a potential lawsuit.   Just look at the Ritz Carlton owners existing out of the "trust" and taking Marriott to court for loss of value -- here we go again but this time for Marriott owners.
> 
> I've pondered the idea of adding some DC points to my post 2010 weeks so I can add a few days "here and there..".    However, it doesn't make any financial sense to do so.    Even if you purchase an additional week (resale)and only use it for 3 of the 7 nights it works out CHEAPER in both initial purchase and annual fees.
> 
> ...



Interesting points but the reality is that the majority of VAC Sales come from Developer purchases.  I don't think the secondary market will ever challenge the establishment because of one simple fact:  The vast majority of existing owners are very satisfied with their vacation experiences.

We have seen all this in the past with legacy weeks and nothing has really changed in any of the Timeshare Company business models.

Its a shame that a robust secondary market does not coexist with new timeshare purchases.  That's probably one of the consistent barriers the industry has failed to mature in.  Until then, the industry will continue to loose credibility.

FT


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## dioxide45 (Jul 13, 2014)

Ralph Sir Edward said:


> I guess I take a longer term view. What is going to happen to Marriott's points sale and resale market come the next recession? When MVC can't afford ROFR, like back in 2009?



It is hard to say. But I think we now know that Marriott doesn't care about their current customers ability to resell their DC points. They perhaps think that there won't be another downturn? Or if there is, they will be able to grab up points like crazy? Though if another great recession hits, they won't heed points because they won't be able to sell them at the pace they are today.


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## cman (Jul 13, 2014)

dioxide45 said:


> It is hard to say. But I think we now know that Marriott doesn't care about their current customers ability to resell their DC points. They perhaps think that there won't be another downturn? Or if there is, they will be able to grab up points like crazy? Though if another great recession hits, they won't heed points because they won't be able to sell them at the pace they are today.



Good point. I was in the market but based on these recent developments, points ownership is not even a consideration. They've effectively shut the door on an exit strategy. What buyer in their right mind would take on a what is essentially a lifetime commitment? Not me. I wouldn't take these points if they were given to me. Their value has been reduced to nada.


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## dioxide45 (Jul 13, 2014)

*So What Does MVCI Need to Do Differently*

It seems that resales are hurting MVCI bottom line or they wouldn't need to increase the junk fees. Either that or they need cheaper inventory from ROFR. But what should they be doing differently so they don't need to fear resales? This issue doesn't seem to just be an issue with MVCI, it is an industry wide issue.

Some thoughts:

Decrease overhead. It seems that only 50% of what you pay developer actually goes in to the cost of the product. The other 50% is sales, marketing and commissions.
Have an active buyback program. This makes sense, but it is probably more expensive than their current system of driving down resale prices to get inventory on the cheap.
Remove artificial obstructions to use resale points/weeks. They don't seem to have these on points, but they did on weeks. Like the inability to trade for MRPs. This would make resale purchase more valuable, potentially driving up prices.

If we compare MVCI to DVC, which seems to best hold their value. What is DVC doing differently. Is it merely DVCs need to keep the price of the product high through ROFR in order to protect their other Disney onsite properties? They don't want cheap resales competing against the likes of the Grand Floridian and All Star Resorts?

Will TS ever be like traditional real estate where resale prices are very close to the price you can buy a new construction home? Or does the lifetime MF commitment keep prices down?


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## FractionalTraveler (Jul 13, 2014)

This makes Trust Points basically "Disposable".

Kind of like an Airline Ticket whose face value is less than the carrier's $100 Change fee + Fare difference.  You just throw away the ticket and buy a new one.

For example, a simple 1000 point resale now would cost the prospective buyer close to $3,000 in fees + the seller's price point.

Throw away points for sure if seller does not rent them out or use them.

FT


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## dioxide45 (Jul 13, 2014)

FractionalTraveler said:


> This makes Trust Points basically "Disposable".
> 
> Kind of like an Airline Ticket whose face value is less than the carrier's $100 Change fee + Fare difference.  You just throw away the ticket and buy a new one.
> 
> ...



The problem though is that they can't be easily thrown away. You are tied to an increasing annual MF. You can ignore that and go in to default, possibly risking your credit. It would be great if they were truly throw away, but they really aren't.


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## FractionalTraveler (Jul 13, 2014)

dioxide45 said:


> The problem though is that they can't be easily thrown away. You are tied to an increasing annual MF. You can ignore that and go in to default, possibly risking your credit. It would be great if they were truly throw away, but they really aren't.



Yes, you are probably right.  We all end up paying for toxic waste buried in landfills forever in our municipal taxes.  Same with Trust points!

Believe me, I own some of those Toxic... I mean Trust points.

FT


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## JIMinNC (Jul 13, 2014)

dioxide45 said:


> It seems that resales are hurting MVCI bottom line or they wouldn't need to increase the junk fees. Either that or they need cheaper inventory from ROFR. But what should they be doing differently so they don't need to fear resales? This issue doesn't seem to just be an issue with MVCI, it is an industry wide issue.
> 
> Some thoughts:
> 
> ...



Given that VAC stock has increased over 300% since 2011, I would conclude that from a purely business standpoint, they don't need to do anything differently. Most of their customers are happy with their purchases and their business model seems to be working well for their shareholders - which is their #1 fiduciary duty - and for their customers - which is critical over the long term to maintaining that shareholder happiness. As "educated" consumers of their product, we on TUG may wish they did things differently, but their shareholders and most of the customers are very happy right now.

I think the real issue is not the Marriott business model but, as FractionalTraveler said in post #117 above, the lack of a truly robust resale market to truly put market pressure on Marriott. If the resale market was more of a threat, Marriott and other developers would have to take even more aggressive action to try to suppress resales, and those efforts would probably involve actions that I suspect even their own lawyers would say cross the line. As it is now, the resale market is so weak, that what is essentially a $1/point fee increase on points that retail for $12+ from Marriott direct, has people saying points are "disposable" and that there is now no exit strategy. A robust resale market would make it competitively and legally impossible for any developer to suppress it, forcing the developers to adjust their business model to continue to prosper.

Bottom line, my opinion is the resale market will survive in basically its current weak form - but the "all in" price to the buyer will just be a buck higher than it was last month. That's not based on any great knowledge of the timeshare business, as my experience pales compared to most on TUG, but it's based on just looking at it from a plain vanilla business perspective.


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## pwrshift (Jul 13, 2014)

Timely discussion for me.  I was at Manor Club last week and attended an owners educational meeting with "Mike" who turned out to be a salesman, of course, and was promoting that legacy owners should buy 1500 DC points for $18,000 in order to become a Hybrid owner and get full in-house trading access to 75%+ Marriott timeshares that will never be found on Interval's quickly diminishing inventory...and if a legacy owner doesn't do this soon he/she will only have non-Marriott TS to trade into.

When I mentioned many owners on TUG suggest that you lose up to 60% on them the moment you buy DC points he bust a gut saying if Marriott was worried about a few hundred owners on TUG that Marriott would have put TUG out of business a long time ago.  Then he said I could buy as little as 1000 DC points if I signed that day...under $12,000.  I didn't.  

Just as some of you have suggested...resale DC points are difficult to sell, even more now with the $3000 minimum fee, and if you can't sell them you still have to continue paying Maintenance fees...trapped!  Legacy ownership looks even better to me now...thanks to the fact I bought where I want to go each year.

I'm curious to know from Tuggers who did become Hybrid owners this way and if would they do it again?


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## billymach4 (Jul 13, 2014)

pwrshift said:


> I'm curious to know from Tuggers who did become Hybrid owners this way and if would they do it again?



Time for another Poll!


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## dioxide45 (Jul 13, 2014)

JIMinNC said:


> I think the real issue is not the Marriott business model but, as FractionalTraveler said in post #117 above, the lack of a truly robust resale market to truly put market pressure on Marriott. If the resale market was more of a threat, Marriott and other developers would have to take even more aggressive action to try to suppress resales, and those efforts would probably involve actions that I suspect even their own lawyers would say cross the line. As it is now, the resale market is so weak, that what is essentially a $1/point fee increase on points that retail for $12+ from Marriott direct, has people saying points are "disposable" and that there is now no exit strategy. A robust resale market would make it competitively and legally impossible for any developer to suppress it, forcing the developers to adjust their business model to continue to prosper.



The problem is that the developers place artificial barriers to the resale market. Junk fees and ROFR are just two of them. When you have the developer placing these barriers, it makes the development of any efficient resale market impossible.

If there was an efficient resale market, perhaps the developers wouldn't have to fear it?


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## JIMinNC (Jul 13, 2014)

dioxide45 said:


> The problem is that the developers place artificial barriers to the resale market. Junk fees and ROFR are just two of them. When you have the developer placing these barriers, it makes the development of any efficient resale market impossible.
> 
> If there was an efficient resale market, perhaps the developers wouldn't have to fear it?



In my opinion, the only reason ROFR and junk fees are used successfully by developers is because the resale market IS weak. The resale market is weak enough that these tactics can have an impact. If the resale market was more robust, a $1/pt fee increase would have little impact on the market. If the market was efficient and robust, the only way developers would be able to compete with resales would be to lower their marketing costs so their prices compare more favorably with the market price. In that environment, ROFR would not even exist because there would not be enough margin to buyback and resell profitably.

In the end, the real problem seems to be that timeshare is a product that needs to be "sold" and marketed in ways that traditional real estate does not. No regular real estate agency spends a lot of money trying to convince people they NEED a house. All the effort there is on listing and showing properties - much less in the way of sales and marketing. That is sort of the way timeshare resale brokers work as well - listing and low key marketing. Problem is, their efforts are unknown to most and are overpowered by the huge marketing effort put behind "new" timeshare. That developer business model works so well because the voice behind resales is so weak.

If the resale market were more robust and the public more educated about the products, I think resale prices would likely rise and developers would be forced to reduce their prices to compete because people would understand there is little real difference between a resale and a "new" timeshare. Some equilibrium would be found in the middle.


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## NYFLTRAVELER (Jul 13, 2014)

When is this effective? What if Marriott waived ROFR months ago but deal has not yet closed on paper (or $ change hands), do you think the deal would be grandfathered under old fee(s)? This can otherwise be a deal breaker for someone for a deal signed and ROFR'd in the past but scheduled to close shortly?


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## KenA (Jul 14, 2014)

NYFLTRAVELER said:


> When is this effective? What if Marriott waived ROFR months ago but deal has not yet closed on paper (or $ change hands), do you think the deal would be grandfathered under old fee(s)? This can otherwise be a deal breaker for someone for a deal signed and ROFR'd in the past but scheduled to close shortly?



We were in the process of buying resale points when the fee increase occurred and the broker told me Marriott is advising any contract signed July 9th or prior would be under the old fee structure.  I suspect if you are about to close there should be no issues for you.


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## Ralph Sir Edward (Jul 14, 2014)

dioxide45 said:


> The problem is that the developers place artificial barriers to the resale market. Junk fees and ROFR are just two of them. When you have the developer placing these barriers, it makes the development of any efficient resale market impossible.
> 
> If there was an efficient resale market, perhaps the developers wouldn't have to fear it?



It's due to a flawed business model. The real world always wants to equate supply with demand. It does it by price.

The timeshare model is based on building a property and selling it for an extremely high price total. Build a building that costs, say, $200,000 per apartment. Then sell 50 weeks worth of that apartment at $50,000 a week. That's $2.5 million per apartment, total. Even giving up 50% of the price for marketing, that's a million or so apartment profit.

So the model is based on capturing that million dollar a unit profit. It's not on maintaining a long-term healthy resale market, the only way to do that is to restrict the number of units, providing a scarcity value to the timeshares. But that means forgoing that fat first-time sales profit, on which the whole model is based on.

DVC, on the other hand, doesn't sell the apartment. They sell a long-term lease on it, and maintain ownership of the apartment. Their interest is not so much the up-front profit, as to maintaining a long-term profit off of the apartment (MFs and cross selling other Disney products), so they recognize the threat of overbuilding. That's why they are much more agressive on ROFR, it keep the value high and also acts as overbuilding warning sign if there are too many of them...

The crunch come in recessions, not prosperities. MVC is going to have one enormous crunch come the next recession.


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## JIMinNC (Jul 14, 2014)

Ralph Sir Edward said:


> The timeshare model is based on building a property and selling it for an extremely high price total. Build a building that costs, say, $200,000 per apartment. Then sell 50 weeks worth of that apartment at $50,000 a week. That's $2.5 million per apartment, total. Even giving up 50% of the price for marketing, that's a million or so apartment profit.
> 
> So the model is based on capturing that million dollar a unit profit. It's not on maintaining a long-term healthy resale market, the only way to do that is to restrict the number of units, providing a scarcity value to the timeshares. But that means forgoing that fat first-time sales profit, on which the whole model is based on.



I agree with this except for the $200,000 condo. Ocean view whole ownership condos in Hilton Head and coastal SC sell for $450,000 to $1.4 million. In Kaanapali on Maui that range is more like $700,000 to $3 million or more. The $200K number might be closer to reality in Orlando, Williamsburg, Branson, etc. But in coastal areas where most MVCI locations are built, the price of entry is considerably steeper.


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## Fasttr (Jul 14, 2014)

JIMinNC said:


> I agree with this except for the $200,000 condo. Ocean view whole ownership condos in Hilton Head and coastal SC sell for $450,000 to $1.4 million. In Kaanapali on Maui that range is more like $700,000 to $3 million or more. The $200K number might be closer to reality in Orlando, Williamsburg, Branson, etc. But in coastal areas where most MVCI locations are built, the price of entry is considerably steeper.



I think Sir Edward was estimating MVC's "cost" to build such a unit to be around $200K.


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## JIMinNC (Jul 14, 2014)

Fasttr said:


> I think Sir Edward was estimating MVC's "cost" to build such a unit to be around $200K.



But cost must also include the land, and in coastal resort areas I don't think you could buy the land and build a condo building for $200K per unit. Heck, nice condos here in suburban Charlotte often sell for that much or more. Those $500K to multi-million resort condos would probably be selling for a lot less than they do if they could be built for $200K.


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## FractionalTraveler (Jul 14, 2014)

Ralph Sir Edward said:


> It's due to a flawed business model. The real world always wants to equate supply with demand. It does it by price.
> 
> The timeshare model is based on building a property and selling it for an extremely high price total. Build a building that costs, say, $200,000 per apartment. Then sell 50 weeks worth of that apartment at $50,000 a week. That's $2.5 million per apartment, total. Even giving up 50% of the price for marketing, that's a million or so apartment profit.
> 
> ...



Good points.  I have always thought similar.  

Also, the percentage of existing owner base (about 450K) actually trying to sell their units at any given timeframe combined with new potential customers attempting to buy resale on the secondary marketplace is so tiny that its insignificant at the end of the day to MVCI.

It appears that they can continue to keep existing DC members happy by confirming DC reservations and offering additional explorer collection marketing agreements which cost them little to no overhead in providing as usage options.

With the existing pipeline of units coming on-line from existing properties, they don't have to build anything new for quite a long time.

When the sales numbers eventually flatten out or dip, they can just continue to add DC points to the trust with little effort or cash from foreclosures and ROFR.

Continue to add cross-marketing agreements and throw them into the explorer collection and you have a wonderful asset light strategy optimized for profitability and cash flow for future projects.

This strategy has worked well so far and the stock price bears it out on a daily basis.  We will see the latest numbers presented next week (7/24) but with the North American Leisure travel industry growing considerably, I fully expect another great quarter to be presented.

FT


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## Ralph Sir Edward (Jul 14, 2014)

JIMinNC said:


> I agree with this except for the $200,000 condo. Ocean view whole ownership condos in Hilton Head and coastal SC sell for $450,000 to $1.4 million. In Kaanapali on Maui that range is more like $700,000 to $3 million or more. The $200K number might be closer to reality in Orlando, Williamsburg, Branson, etc. But in coastal areas where most MVCI locations are built, the price of entry is considerably steeper.



Let's use a current example here on TUG (from another company).

http://tugbbs.com/forums/showthread.php?t=211689

"The Grand Islander project will bring 418 time-share units to the Waikiki resort

"Private equity giant Blackstone and a team of undisclosed financiers plan to invest $415 million to add a 350-foot time-share tower to the Hilton Hawaiian Village, which is the state's largest single resort property."

Later in the thread, the price per week was $70,000. So let's do a little math...

$415 miilion / 418 = call it a million per unit for convenience. 

Each unit sells 50 weeks @ $70,000 per week = $3.5 million gross.

OK, let's write off $1.5 million for marketing.

$3.5 MM - $1.5 MM = $2.0 MM net after marketing - $1.0 MM construction cost =

$1.0 Million (MM) Per unit, initial sale profit.

(But what about the ongoing profit from maintenance fees?)

Assuming $2,000 per week per year, (YMMV, but I don't think the are going to be 2 or 3 time Marriots Hawaii Timeshare fees.)

$2,000 X 50 = $100,000 per unit, per year.

But that's not all profit, there's taxes, maintenance cost, staff cost, ect. I'd say the company would net 25%, or $25,000 per unit.

$1,000,000 / $25,000 = 40 years to earn the same profit from maintenance fees as from the original sale. 

Certainly you can quibble on some of these numbers, but they will give you a sense of the timeshare sales model....


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## Marky (Jul 14, 2014)

*Selling Marriott Destination Points*

*Marriott charging $2.00 transfer fee per MVCI Destination point on sale to the secondary market. Makes it impossible to sell. Anyone have experience with this?*


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## SnowDogDad (Jul 14, 2014)

Take a look at this thread:
http://tugbbs.com/forums/showthread.php?t=213793 

A lot of recent discussion on this....

Honestly, I don't see this as making it that much more difficult to buy/sell.  Though the resale market will be a bit pricier.  

If I find 3,000 points on Redweek for $5/point and have to pay $2/point for a transfer fee, that is still $7/point.  Which is a lot cheaper than buying them direct from Marriott. 

Am I missing something?


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## tschwa2 (Jul 14, 2014)

Theoretically HOA's are not a for profit group.  They are nonprofit.  The MF is charged to cover the ongoing maintenance.  The management company charges to manage the ts.  They are for profit.  Traditionally the management fee comes to 5-15% of the total MF of which some is profit and some include legitimate management expenses.


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## dioxide45 (Jul 14, 2014)

tschwa2 said:


> Theoretically HOA's are not a for profit group.  They are nonprofit.  The MF is charged to cover the ongoing maintenance.  The management company charges to manage the ts.  They are for profit.  Traditionally the management fee comes to 5-15% of the total MF of which some is profit and some include legitimate management expenses.



Though I think this makes Ralph Sir Edward's point even further. It just pushed out the length of time that the developer/management company can make as much money on management as they can on upfront sales. With so much cost weighted in junk associated with the initial sale of the property, it is no wonder that TSs are not worth anywhere close to what developers sell them for.


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## dioxide45 (Jul 14, 2014)

FractionalTraveler said:


> Also, the percentage of existing owner base (about 450K) actually trying to sell their units at any given timeframe combined with new potential customers attempting to buy resale on the secondary marketplace is so tiny that its insignificant at the end of the day to MVCI.



If it is so insignificant, why does MVCI feel the need to take steps to depress the resale market even more? Why attack resales with even higher junk fees?


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## SueDonJ (Jul 14, 2014)

dioxide45 said:


> If it is so insignificant, why does MVCI feel the need to take steps to depress the resale market even more? Why attack resales with even higher junk fees?



Why not, if they can?  I don't mean to be flippant, but why not?  It's not like they've taken steps over the years to protect the "investment value" of any other direct purchases - the savings to be found in the external resale markets have always proven it.


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## jeepie (Jul 14, 2014)

SnowDogDad said:


> Take a look at this thread:
> http://tugbbs.com/forums/showthread.php?t=213793
> 
> A lot of recent discussion on this....
> ...


At the risk of duplicating info in other threads, a "combo" package of a resale week (enrollable if bought through Marriott Resales) along with the purchase of an equivalent number of trust points, can get your price to that level. Also, Marriott will often give you some perks such as PlusPoints, MR points, and allow you to charge it to your Chase Rewards Visa, saving at least 5%. Your MFs will be lower as well. And, if the enrolled week is somewhere you like to stay, just using the week (as opposed to electing points) in any given year, is cheaper than staying there on points. 
By the way, did you ever get that new purchase at Grand Residence enrolled? Cheers.


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## dioxide45 (Jul 14, 2014)

SueDonJ said:


> Why not, if they can?  I don't mean to be flippant, but why not?  It's not like they've taken steps over the years to protect the "investment value" of any other direct purchases - the savings to be found in the external resale markets have always proven it.



I don't disagree. They have never taken steps to protect resale values. I am just thinking perhaps that resales are a little more significant this time around than we would like to think. With weeks, there was always a known difference in usage between resales and developer. With DC points, that doesn't exist, at least not at present. Perhaps resales are cutting in to their bottom line a little more than they would like. Or they just need to depress sales prices so they can fulfill inventory needs until tower three at Grand Chateau comes online?


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## FractionalTraveler (Jul 14, 2014)

dioxide45 said:


> If it is so insignificant, why does MVCI feel the need to take steps to depress the resale market even more? Why attack resales with even higher junk fees?



In order to maintain integrity and parity in the club's membership that's why.

Why should some be able to enter the club with lower entry fees?

Same argument RC DC members had when MVCI started allowing its owners access to RC club properties at a significantly lower entry level.

Rightly so, the RC owners revolted and sued MVCI.

FT


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## cman (Jul 15, 2014)

SnowDogDad said:


> Take a look at this thread:
> http://tugbbs.com/forums/showthread.php?t=213793
> 
> A lot of recent discussion on this....
> ...



You're missing the fact that a prospective buyer would consider the fact that additional increases may come in the future. What Marriott has done is effectively shut the door on an exit strategy for points owners. I for one, was in the market, but no more. I wouldn't take 3000 points if someone were to give them to me. If I were to accept such a gracious offer, I'd most likely end up owning those points forever. There's no way out! 

This is truly a disservice to their loyal owners. It has also sent chills through us prospective owners. It will most likely help their bottom line due to the fact that they've saddled their owners with a lifetime of maintenance fees that they'll never be able to unload. However, they've damaged their reputation with prospective customers.


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## Beefnot (Jul 15, 2014)

zfw4609 said:


> You're missing the fact that a prospective buyer would consider the fact that additional increases may come in the future. What Marriott has done is effectively shut the door on an exit strategy for points owners. I for one, was in the market, but no more. I wouldn't take 3000 points if someone were to give them to me. If I were to accept such a gracious offer, I'd most likely end up owning those points forever. There's no way out!
> 
> This is truly a disservice to their loyal owners. It has also sent chills through us prospective owners. It will most likely help their bottom line due to the fact that they've saddled their owners with a lifetime of maintenance fees that they'll never be able to unload. However, they've damaged their reputation with prospective customers.



 As crappy as this move is by Marriott, I don't know that it will have that negative an impact, if at all to Marriott. I would imagine that most folks buying timeshares retail have no idea, or at least no educated understanding, about the resale market.  An exit strategy is probably not that front of mind for retail purchasers.  They will not realize how crappy this move is until they need to unload, and at the point Marriott probably doesn't really care all that much.


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## SnowDogDad (Jul 15, 2014)

jeepie said:


> By the way, did you ever get that new purchase at Grand Residence enrolled? Cheers.



My new week has been stuck in Owner Mods purgatory for about 6 weeks.  Mostly thanks to a mistake that the previous owners made when they changed the name on their trust with the land court without transferring it also with Marriott.  Now, Owner Mods is punishing me.


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## Ralph Sir Edward (Jul 15, 2014)

dioxide45 said:


> If it is so insignificant, why does MVCI feel the need to take steps to depress the resale market even more? Why attack resales with even higher junk fees?



Because it give more profit to the selling corporation.

Let me "expand and revise" my statement.

In the weeks model, the corporation can expend money to buy the timehare week in question by ROFR. Fine, the corporation gets the week back for resale, they can the reap the profit (assuming they are able to sell the week) from the higher resale price. But they are out the up-front cash for the ROFR.

The Marriott points model is far more profitable. Instead of money going out (by exercising ROFR), they get a block of money, directly, for doing nothing. For every resale, they are now getting $3K + $500 (plus all those other junk fees), for doing nothing more than registering the transfer. _Each resale, every resale_... Resales now become a profit center, with almost no overhead. Furthermore, if they perceive that buying the resale back is also profitable, they can invoke the ROFR, get the points, and resell them at their market rate. Shucks, they can use the money from those resales to do ROFR buyback...A win-win for the corporation.


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## johnrsrq (Jul 15, 2014)

Ralph Sir Edward said:


> Because it give more profit to the selling corporation.
> 
> Let me "expand and revise" my statement.
> 
> ...



Do 100% of those profits have to go "the corporation" or can some of those fee's or profits reduce the MF of the points expense structure. It seems the "corporation" has absolute discretion in their terms and conditions however, are those T&C complete? Are there other T&C's referred to in documents that are not established or at least provided.  It seems the controlling interests could make matters much worse if they so decided. The brand is being diluted even if only a few recognize it- at this point. I think social media could very well be a powerful weapon against abuse and in particular when it is articulated by thoughtful folks such as in evident in these TUG forums.


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## Ralph Sir Edward (Jul 15, 2014)

johnrsrq said:


> Do 100% of those profits have to go "the corporation" or can some of those fee's or profits reduce the MF of the points expense structure. It seems the "corporation" has absolute discretion in their terms and conditions however, are those T&C complete? Are there other T&C's referred to in documents that are not established or at least provided.  It seems the controlling interests could make matters much worse if they so decided. The brand is being diluted even if only a few recognize it- at this point. I think social media could very well be a powerful weapon against abuse and in particular when it is articulated by thoughtful folks such as in evident in these TUG forums.



Maintenance Fees could be reduced directly, if Marriott so chose. They wouldn't have to go the "roundabout" method. No, IMHO, this is all about getting a "cut" on any resale of points. It's extra money for Marriot's profit margin. A brilliant concept, actually...from a corporation's standpoint. It makes your price competitor (that is undercutting your price with the same product "used") pay you for the right to compete on price....


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## JIMinNC (Jul 15, 2014)

zfw4609 said:


> You're missing the fact that a prospective buyer would consider the fact that additional increases may come in the future. What Marriott has done is effectively shut the door on an exit strategy for points owners. I for one, was in the market, but no more. I wouldn't take 3000 points if someone were to give them to me. If I were to accept such a gracious offer, I'd most likely end up owning those points forever. There's no way out!
> 
> This is truly a disservice to their loyal owners. It has also sent chills through us prospective owners. It will most likely help their bottom line due to the fact that they've saddled their owners with a lifetime of maintenance fees that they'll never be able to unload. However, they've damaged their reputation with prospective customers.



I agree with SnowDogDad's earlier post. I don't understand why so many think this shuts the door on an exit strategy and why buyers will dry up just because of a $1 or so increase in price.

Yes, it's an enormous increase in fees, and it all goes to Marriott's bottom line, but if resale points were viable under the old fee structure (let's say $4.50 to $5, plus the old $0.80 fee = $5.30 to $5.80), then I think they are still viable at $4.50 to $5, plus $2 (yielding $6.50 to $7). The price just went up. 

And yes, there may be future increases, but I never assumed that old fee was etched in stone. Anytime you buy into a program of this kind, you are buying into the possibility that the program manager could change the rules. That was the case under the old fees and it is still the case. 

We haven't even closed yet on our combo purchase, but if we ever feel we need more points, I would not hesitate to consider resale points. I would pay a little more than I would have a couple weeks ago, but when retail points are $12+ and rising, I think resale still looks pretty good. 

My biggest concern about resale points is not price, but whether Marriott will always allow them full access to the benefits of the program. But that concern was there last month as well. 

Change often causes predictions of gloom and disaster, but most of the time the impacts are much more muted than the initial fears.


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## Fasttr (Jul 15, 2014)

Does anybody feel there is a direct connection between the higher junk fees and the lowering of MVC Resale pricing as discussed in THIS recent thread?  It just seems too coincidental that both occurred about the same time.


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## GregT (Jul 15, 2014)

Fasttr said:


> Does anybody feel there is a direct connection between the higher junk fees and the lowering of MVC Resale pricing as discussed in THIS recent thread?  It just seems too coincidental that both occurred about the same time.



Yes I do.  

I think they are lowering weeks pricing to make hybrid packages even more price competitive with resale pricing.    It's a great sales pitch -- try to sell them points at $13 apiece ($10/point if it's 3,500 point package that has  incentives), and if the buyer doesn't bite, cost average down by introducing a hybrid.  The margin on hybrids has to be terrific, perhaps even better than pure points because ROFR/buy-back pricing is so low. 

If a TUGger is considering buying a hybrid, I hope you buy a Platinum or High-Quality Gold for the matched week to keep the MFs on the Elected Points within the stratosphere.

Best,

Greg


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## JIMinNC (Jul 15, 2014)

GregT said:


> If a TUGger is considering buying a hybrid, I hope you buy a Platinum or High-Quality Gold for the matched week to keep the MFs on the Elected Points within the stratosphere.
> 
> Best,
> 
> Greg



The problem that we found with this was most Platinum or Gold weeks convert to at least 3000 to 4000 points, and that makes the required matching points purchase prohibitive because you have to buy so many points at retail price.

We didn't want to buy more than 2000 Trust points at retail, so we purchased a Silver HHI Barony week which required only 1750 Trust points. Our resulting 3375 points can get us a week at almost every HHI resort in Gold season (multiple weeks at the off-beach resorts); up to 6 three-day weekends in Gold season at off-beach resorts (which may wind up being our primary usage type if availability is good); and we can always choose to use our Silver week in the weeks system for Thanksgiving week, Christmas, or New Years.

The downside is our MF cost/point is about $400 more per year than what it would be for a pure Trust package. But that pure Trust package would have cost us about $18,000 more than our hybrid, so it will take 45 years for the higher MF costs to hurt us.


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## GregT (Jul 15, 2014)

JIMinNC said:


> The problem that we found with this was most Platinum or Gold weeks convert to at least 3000 to 4000 points, and that makes the required matching points purchase prohibitive because you have to buy so many points at retail price.
> 
> We didn't want to buy more than 2000 Trust points at retail, so we purchased a Silver HHI Barony week which required only 1750 Trust points. Our resulting 3375 points can get us a week at almost every HHI resort in Gold season (multiple weeks at the off-beach resorts); up to 6 three-day weekends in Gold season at off-beach resorts (which may wind up being our primary usage type if availability is good); and we can always choose to use our Silver week in the weeks system for Thanksgiving week, Christmas, or New Years.
> 
> The downside is our MF cost/point is about $400 more per year than what it would be for a pure Trust package. But that pure Trust package would have cost us about $18,000 more than our hybrid, so it will take 45 years for the higher MF costs to hurt us.



I understand completely -- a Platinum Annual requires a big Trust Point purchase -- when I was looking at a hybrid, the one I liked the most was an EOY Platinum (3BR Grande Vista) that was worth 3,650 points EOY -- it would have necessitated a 2,000 point Trust Purchase, and the entire thing priced out at approx $27K ($20K for Trust Points and $6K for the EOY Platinum).

That would have equated to an a purchase price of $7/point, and the MFs would have been ~$0.33 per point for the Grande Vista (but I would have used primarily for trading, as it is a rocking trading property).

Best,

Greg


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## Fasttr (Jul 15, 2014)

Ralph Sir Edward said:


> Instead of money going out (by exercising ROFR), they get a block of money, directly, for doing nothing. For every resale, they are now getting all those other junk fees for doing nothing more than registering the transfer. _Each resale, every resale_... Resales now become a profit center, with almost no overhead.



If raking in the $$ associated with resale points transfers is, in your opinion, MVC's primary motivation for the fee hike, why wouldn't MVC allow post 2010 weeks purchased resale to be enrolled for a fee of $2/enrolled point assigned to that week (with a $3K minimum).  What is the difference to MVC?  If the additional fees are their sole motivation, it seems like they would be opening the flood gates for post 2010 resale weeks enrollment as well.


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## SueDonJ (Jul 15, 2014)

Fasttr said:


> If raking in the $$ associated with resale points transfers is, in your opinion, MVC's primary motivation for the fee hike, why wouldn't MVC allow post 2010 weeks purchased resale to be enrolled for a fee of $2/enrolled point assigned to that week (with a $3K minimum).  What is the difference to MVC?  If the additional fees are their sole motivation, it seems like they would be opening the flood gates for post 2010 resale weeks enrollment as well.



I still think Marriott had to allow Weeks enrollments when the DC was first implemented in order to immediately fuel the Exchange Company's availability engine, and that they don't want a glut of lesser-demand Weeks mingled in the DC any more than they wanted to be saddled with them prior to the DC inception.  Opening up enrollment for that limited time appears to have served their purposes, or, if it hasn't, then they'll open it up again on a limited basis.

What I'm wondering is whether the ROFR fees will be the next increase on Trust Points resale transfers.  The governing docs allow for up to $1/point, don't they, and weren't we surprised to find that they've instead opted to charge the same $95/transaction that they charge with Weeks resale transfers?


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## JIMinNC (Jul 15, 2014)

GregT said:


> I understand completely -- a Platinum Annual requires a big Trust Point purchase -- when I was looking at a hybrid, the one I liked the most was an EOY Platinum (3BR Grande Vista) that was worth 3,650 points EOY -- it would have necessitated a 2,000 point Trust Purchase, and the entire thing priced out at approx $27K ($20K for Trust Points and $6K for the EOY Platinum).
> 
> That would have equated to an a purchase price of $7/point, and the MFs would have been ~$0.33 per point for the Grande Vista (but I would have used primarily for trading, as it is a rocking trading property).
> 
> ...



That is a nice package. If we decide to add to our points ownership, we will probably look for something like that to help average down our MF/point. I looked at Orlando resales as an option when we were doing our evaluation (but I'm not sure I actually modeled that EOY 3BR GV option), but ultimately decided on Hilton Head since we would actually be able to use a Silver week there on occasion. Our kids are in college and high school and are past the Disney age, so our annual trips to Mouseville are a thing of the past. If we bought something there it would strictly be for "cheap" points or trading.


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## Ralph Sir Edward (Jul 15, 2014)

Fasttr said:


> If raking in the $$ associated with resale points transfers is, in your opinion, MVC's primary motivation for the fee hike, why wouldn't MVC allow post 2010 weeks purchased resale to be enrolled for a fee of $2/enrolled point assigned to that week (with a $3K minimum).  What is the difference to MVC?  If the additional fees are their sole motivation, it seems like they would be opening the flood gates for post 2010 resale weeks enrollment as well.



I suspect that they plan to acquire the post 2010 weeks by invoking ROFR, over time as they have funding. Until then, they are of secondary concern.

Their main concern is selling points. The secondary points market competes directly with their points sale, there is no difference between primary purchased (through Marriott) and secondary (resale) points, other than cost. This is true for just about any points based system. The higher you raise the secondary market, the better you make the primary market,_ from a buyer's perspective_. What happens to the seller doesn't particularly matter, as the seller will no longer be a customer. 

You can do this one of two ways.

One - spend a lot of money to maintain a high ROFR rate (Disney does that, but as I pointed out, they also use the timeshares as cross-selling opportunities. Nobody buys a pair of Marriot ears...)

Two - find a way to tack fees onto the sale price to raise the total price. That helps to raise the total price, causing less competition with the primary sales arm (smaller net discout from direct sales), and it also does the following. It raises revenue, (for almost free) should the deal go through at the current price plus the extra fees, revenue that never would have be acquired by Marriott without the fees; and, if it depresses the net amount the seller gets, it lowers the ROFR price which Marriott has to pay to acquire the points.

I suspect the sweet spot for fees would be around 1/3 of list point price. If you figure that 50% of primary sales goes to marketing, the each transfer would give 2/3 of the profit of a direct sale (no marketing costs).

Now there would be an asset-lite strategy. Never build anything again and just keep churning the resales...

(What I really keep waiting for is for somebody to realize that this sort of strategy doesn;t have to be a company captive...)


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## taffy19 (Jul 15, 2014)

Ralph Sir Edward said:


> I suspect that they plan to acquire the post 2010 weeks by invoking ROFR, over time as they have funding. Until then, they are of secondary concern.
> 
> Their main concern is selling points. The secondary points market competes directly with their points sale, there is no difference between primary purchased (through Marriott) and secondary (resale) points, other than cost. This is true for just about any points based system. The higher you raise the secondary market, the better you make the primary market,_ from a buyer's perspective_. What happens to the seller doesn't particularly matter, as the seller will no longer be a customer.
> 
> ...


I don't understand your last sentence.  Can you explain, please.


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## Ralph Sir Edward (Jul 15, 2014)

iconnections said:


> I don't understand your last sentence.  Can you explain, please.



Sorry. In theory, just like II or RCI are designed as swap firms. One could build a firm that held timeshare weeks from various companies as a pool, like what Marriott does for is MVC point properties. Imagine a firm, not affiliated with any one timeshare company, that own a volume of timeshare properties at different resorts. Say some from Marriott, some from Wyndham, some from Hilton, all resliced as a point pool, from which you booked weeks from points, just like MVC.

The firm didn't build anything, just bought weeks in the aftermarket...


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## SueDonJ (Jul 15, 2014)

Ralph Sir Edward said:


> Sorry. In theory, just like II or RCI are designed as swap firms. One could build a firm that held timeshare weeks from various companies as a pool, like what Marriott does for is MVC point properties. Imagine a firm, not affiliated with any one timeshare company, that own a volume of timeshare properties at different resorts. Say some from Marriott, some from Wyndham, some from Hilton, all resliced as a point pool, from which you booked weeks from points, just like MVC.
> 
> The firm didn't build anything, just bought weeks in the aftermarket...



Like Emmy I'm not sure I understand the line either, but ... what you're describing is an exchange company and, the DC Exchange Company is positioned so that other timeshare companies' intervals could be mingled within.  In effect, the DC Exchange Company could be a stand-alone similar to II or RCI.

I have no idea what hurdles exist, though, to prevent other companies - and owners of weeks/points within them - to become players.


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## johnrsrq (Jul 15, 2014)

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## taffy19 (Jul 15, 2014)

There are two major companies like that already. One is Wyndham Worldwide that owns RCI and the International Leisure Group that owns II and TPI and recently bought up the whole Hyatt Residence Club.  

The Hyatt used to sell fixed week/units only but in a points program that would go into effect after six months.

In Maui, they went over to fixed weeks but floating units on different levels of the building so they have better control of the units that you will end up with. We went to the presentation there and also in Carmel where they are stressing that you can still buy a true deeded week/unit from them and not some hybrid.

All the hotel timeshares resorts have gone over to points now because it is to their advantage while they sell us flexibility and that is true but points can be devalued and easily manipulated too. IMO.

Marriott may be a stand alone company like the other two but Marriott recently signed a long term agreement with II again and so did DRI and Starwood too.

Is it possible that they all will interchange with each other eventually through II because II is giving a point equivalent to all their resorts and also for shorter stays and the Destination Club has mentioned "affiliates" in their DC documents?

Once you own points, what do you really own? You do not own at a certain resort or season and they can devalue them at any time just like they do with the airline miles or MRPs and the other hotel equivalent point rewards.  What I don't like is that they can manipulate re-sale values too and make points almost impossible to dispose of.

We all know that RCI is renting timeshares right from under their members already as there is a short time period only that they will have to hold it for their members to make an exchange. Let's hope that this will not become the standard in the industry.


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## SueDonJ (Jul 15, 2014)

iconnections said:


> ... Once you own points, what do you really own? You do not own at a certain resort or season and they can devalue them at any time just like they do with the airline miles or MRPs and the other hotel equivalent point rewards. ...



Emmy, I'm pretty sure this is not true for purchased Trust Points - they can't sell any more than are correlated to Weeks conveyed to the Trust, and the governing docs specify that any increases in the points requirements for stays must be offset by decreases elsewhere in the Points Chart.  (Marriott asserts verbally that any offsets will be within the individual resort charts, and the few that we've seen related to holiday demand have proven that assertion.  BUT, I don't think we've found the language in the governing docs that supports the assertion, and there is still some question of whether an increase in one resort's chart can be offset by a decrease in another.)

Where Marriott does have leeway to devalue DC Points is in the allotments for enrolled Weeks.  No such adjustments have been made since the DC inception but there's no question it can happen.  If/when it does, though, it will be a devaluation only with respect to DC usage; the original purchased usage rights will remain with the Weeks.


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## taffy19 (Jul 15, 2014)

Thank you, Susan. I am glad that I am wrong here and that cannot happen. If the price of points go up, does that devalue the points you own or not either?  It must to go to newer resorts, if they ever build them.

I believe I understood that you always keep the same points for occupying your unit at the resort you own with the skim if you use elected points instead of your week.

I prefer the old fashined fixed week/units as I know what I own and can book airline tickets a long time in advance plus I know the view.


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## m61376 (Jul 16, 2014)

JIMinNC said:


> I saw that last night. I would probably only buy a week if it was somewhere I could go often. For us that would probably be HHI.
> 
> Plus, the Marriott resale prices on Aruba yield prices per point of $10-$11, before any initiation fees. I don't recall from that other thread if the fees are waived, but even if they are, $10-$11 is too


What is Marriott charging for resale Aruba weeks then- are they charging 40k? Marriott resales have been higher, of course, than outside resale, but that would be ridiculous.


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## windje2000 (Jul 16, 2014)

Ralph Sir Edward said:


> Sorry. In theory, just like II or RCI are designed as swap firms. One could build a firm that held timeshare weeks from various companies as a pool, like what Marriott does for is MVC point properties. Imagine a firm, not affiliated with any one timeshare company, that own a volume of timeshare properties at different resorts. Say some from Marriott, some from Wyndham, some from Hilton, all resliced as a point pool, from which you booked weeks from points, just like MVC.
> 
> The firm didn't build anything, just bought weeks in the aftermarket...



That business model works if one controls the reservation process and exchange processes.


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## JIMinNC (Jul 16, 2014)

m61376 said:


> What is Marriott charging for resale Aruba weeks then- are they charging 40k? Marriott resales have been higher, of course, than outside resale, but that would be ridiculous.



On their resale site resale prices in Aruba range from $21k for a 1BR to over $58k for a 2BR.


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## suzannesimon (Jul 16, 2014)

Just bought a 3BR Gold at Aruba Surf Club for $9,000 on Redweek.  I'd never pay that price to Marriott (anymore).  Thanks to TUG, points or no points.  They are too easy to rent and then rent where you want to go.


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## SueDonJ (Jul 16, 2014)

iconnections said:


> Thank you, Susan. I am glad that I am wrong here and that cannot happen. If the price of points go up, does that devalue the points you own or not either?  It must to go to newer resorts, if they ever build them. ...



Points prices have already been steadily increasing but the price each owner pays has no bearing on where/how Points can be used.  Each resort has its own page in the Points Chart and the requirements differ throughout based on demand (of the resorts themselves as well as the specific intervals desired.)  If the Points requirements for a certain stay increase I suppose that can be looked at as a devaluation, but with each increase being offset by a decrease it does mean that there will be other intervals that will require fewer Points after any adjustments.  I expect that if/as new resorts are added to the Trust, their Points requirements will be higher than the established resorts - similar to how newer resorts cost more to purchase than the established ones, when Weeks were in play.



iconnections said:


> I believe I understood that you always keep the same points for occupying your unit at the resort you own with the skim if you use elected points instead of your week. ...



I'm confused about what you're saying here but will try a few things ... 

The overwhelming majority of enrolled Weeks are not allotted the same amount of Points as is required to book the same interval, so it doesn't make any sense to convert an enrolled Week to Points for home resort usage.  When staying on your owned Week you simply book it the same as you've always done.  Or, if your allotment doesn't allow for a like-to-like exchange using Points, you can use II the same as you've always done (but through your Marriott corporate account in which exchange fees are covered by the DC Club Dues fee.)

The allotments of Points for enrolled Weeks can be adjusted similar to the way Marriott Rewards Points can be, so this is where Marriott has leeway to devalue DC Membership.  So far we haven't seen it, though.



iconnections said:


> I prefer the old fashined fixed week/units as I know what I own and can book airline tickets a long time in advance plus I know the view.



I'm with you, Emmy!  If they'd offered the fixed Week/Unit option for the specific Weeks we own, Don and I would have jumped on it!


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## NYFLTRAVELER (Jul 16, 2014)

_[Deleted.]

I'm sorry but duplicate posts are not allowed, so this one is being deleted and the other (in the "Was considering eBay Bid ..." thread) will stay._


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## mvc (Jul 17, 2014)

You mentioned the cost went from 200 dollars to 500 dollars for one destination point interest .Is  one  interest equal to 250 destination points?


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## Fasttr (Jul 17, 2014)

mvc said:


> You mentioned the cost went from 200 dollars to 500 dollars for one destination point interest .Is  one  interest equal to 250 destination points?



Yes.  The fee is effectively $2/point.


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## trwraw (Jul 17, 2014)

*Marriott Destination Points*

We have just started looking at purchasing destination points to suplement the 1500 we already have, along with our legacy week.  It appears Marriott is charging a conversion fee of $2.00, is that correct?  So if the resale is say, $10,000 for 2000 points then you have to add and addiitonal $4,000 to Marriott?


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## kds4 (Jul 17, 2014)

trwraw said:


> We have just started looking at purchasing destination points to suplement the 1500 we already have, along with our legacy week.  It appears Marriott is charging a conversion fee of $2.00, is that correct?  So if the resale is say, $10,000 for 2000 points then you have to add and addiitonal $4,000 to Marriott?



Yes.


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## dioxide45 (Jul 17, 2014)

trwraw said:


> We have just started looking at purchasing destination points to suplement the 1500 we already have, along with our legacy week.  It appears Marriott is charging a conversion fee of $2.00, is that correct?  So if the resale is say, $10,000 for 2000 points then you have to add and addiitonal $4,000 to Marriott?



Sorta. Don't forget the $300 owner education fee if you are not currently a trust points owner.


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## NYFLTRAVELER (Jul 17, 2014)

trwraw said:


> We have just started looking at purchasing destination points to suplement the 1500 we already have, along with our legacy week.  It appears Marriott is charging a conversion fee of $2.00, is that correct?  So if the resale is say, $10,000 for 2000 points then you have to add and addiitonal $4,000 to Marriott?



This is Marriott's way of putting a chilling effect on the DC points resales. They figure if they make it so unappealing with these fees, they will be able to sell resales directly or worse sucker people to buy new points packages from them.
These onsite presentations sound good when you first hear them.


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## taffy19 (Jul 19, 2014)

SueDonJ said:


> Points prices have already been steadily increasing but the price each owner pays has no bearing on where/how Points can be used.  Each resort has its own page in the Points Chart and the requirements differ throughout based on demand (of the resorts themselves as well as the specific intervals desired.)  If the Points requirements for a certain stay increase I suppose that can be looked at as a devaluation, but with each increase being offset by a decrease it does mean that there will be other intervals that will require fewer Points after any adjustments.  I expect that if/as new resorts are added to the Trust, their Points requirements will be higher than the established resorts - similar to how newer resorts cost more to purchase than the established ones, when Weeks were in play.
> 
> 
> 
> ...


Susan, I have been trying to reply to you several times already but it is hard for me to explain what I mean.

Point values lose value because the developers seem to want to devalue them and, if you go to a different resort on points, many owners will get less than a week elsewhere while other owners get more than a week.  This is new since the Trust points program was introduced and more Legacy weeks will end up in the trust over time because Marriott will use their ROFR or by default.  This is also one of the reasons why II will get less inventory over time and the owners, who received many points, are not longer depositing their weeks in II either. That's what I meant.

I read a post recently and this person explains it a lot better than I can but this is exactly how I feel about a point system too.

Why is Marriott increasing the junk fees?  Does it make a re-sale more valuable or easy to sell?  Far from it and what about some of the other developers that do the same thing too?  Have a look at this post here as the owner is offering his point package for nothing and all fees paid!  The reason of a point based system is that the developers can easily sell the less desirable weeks and have more control over the inventory too.  This started with the floating weeks/units and then the point packages, IMO.

Will this happen to the Marriott Trust points too one day that you will have to give them away plus pay all the garbage fees?  I hope not but selling small trust point packages, like they seem to do, will result in a lot of unhappy owners eventually and these people will try to unload them just to get free of the yearly maintenance fees.

Marriott keeps promising that they will have a system in place that they will take them back at a certain value but when will that happen?

Legacy owners do have the best of both worlds because nothing changed if you keep using your week plus you can still use II or use elected points.  For us elected points have been a good experience and II was a big disappointment three years on a row.

We tried request first two years on a row but were not filled because we needed a certain week and then we deposited the whole week and still were not filled while there was a sighting two times on a row at our own resort very recently but I couldn't see it.  Most likely because I extended the week for one more year and it seems to be very limited. 

We finally traded down to a week to Kauai (KBC) in a 1 BR unit so are done with II.  Never again plus we used elected points to add on five nights to the Kauai Lagoons in a 3 BR unit as that is all they had.  We are very excited about that so will not bash using elected points!  It worked for us twice this year and I have points left over.  We bought for use but we will use points from now on when we want to visit another area.  II lost another week and this will continue....

The hybrid packages seem the way to go rather than buying a trust point package but may it change again that trust points will be more valuable than elected points?  We will find out.


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