# Marriott to Spin Off Timeshare Business [merged]



## VacationPro

Marriott announced their earnings this afternoon, and as part of the press release announced they will be spinning off the timeshare business into a separately traded company.

Here's the press release:

http://news.marriott.com/2011/02/ma...business-and-reports-fourth-quarter-2010.html


----------



## GregT

Interesting -- at least we'll start to get some real information on the timeshare operations from the public disclosures and securities filings, versus having to hunt and speculate on the information.

Thx for posting this


----------



## yumdrey

Ok, I just finished reading that LONG report.
So, there's no change for the current owners to use the weeks/use hotel points, etc... 
Should we worry about this?


----------



## Swice

*No immediate worries*

The way I read this is we will still have everything we have now -- at least for several years.

BUT, there are no guarantees.  

The "new" company will be independent and could do whatever it wants to do in the long distance future.    

Of course, things could also get better if the company is free to make decisions without the consideration of big Marriott.


----------



## timeos2

*Nothing more than a name*



yumdrey said:


> Ok, I just finished reading that LONG report.
> So, there's no change for the current owners to use the weeks/use hotel points, etc...
> Should we worry about this?



It means they see no future in timeshares vs other opportunities (such as hotels).  It may very well mean an end to any expansion of the system as without the overall corporate umbrella for financing the big investments required to build new resorts won't be there anymore. 

It likely means that Marriott as a brand in timeshare will just be a management firm for the existing resorts/programs.   The days of growth are likely over. 

Or it could mean no change at all or something in between the two extremes.  I'd hazard a pretty secure bet that it will NOT be good for owners no matter what direction it takes.  It will almost certainly mean even higher fees as those become the sole source of income for the company.  I'm glad we decided against owning Marriott.


----------



## SueDonJ

I think that IF Marriott were to sell off their timeshare business then this move would make it an easier transaction, but I don't necessarily see it as an indicator of an impending sale.  I think it's just a way for Marriott to separate the losses suffered by the timeshare segments from the more profitable hotel segments.  It's a good move for Marriott shareholders.

I did find this very interesting - “With the launch of the Marriott Vacation Club Destinations timeshare program, our points-based product, in 2010, we are confident in our ability to fulfill the dreams and meet the growing expectations of our customers. We expect to continue to create value for shareholders through a diverse stream of income, including development, management and financing. We dramatically improved our cost structure and efficiency in the last two years and are well-positioned for the upturn. *And with over $1.5 billion in timeshare segment inventory at year-end 2010, our near term investment needs are modest.  All in all, we expect to generate meaningful cash from operations in the next few years.* I am enormously excited by this new opportunity for our business and our associates.”

I think that's pretty much an acknowledgment of what most of us have been theorizing for months anyway - that new timeshare resorts won't be announced any time soon, and if the DC product doesn't meet its goals then we could be looking at big changes.


----------



## dioxide45

timeos2 said:


> It means they see no future in timeshares vs other opportunities (such as hotels).  It may very well mean an end to any expansion of the system as without the overall corporate umbrella for financing the big investments required to build new resorts won't be there anymore.
> 
> It likely means that Marriott as a brand in timeshare will just be a management firm for the existing resorts/programs.   The days of growth are likely over.
> 
> Or it could mean no change at all or something in between the two extremes.  I'd hazard a pretty secure bet that it will NOT be good for owners no matter what direction it takes.  It will almost certainly mean even higher fees as those become the sole source of income for the company.  I'm glad we decided against owning Marriott.



I agree. Marriott doesn't see timeshare as the growth business it once was. The hotel business on the other hand is a business that is seeing an uptick. Timeshare is forecast to remain flat for many years to come. Also, given their glut of inventory, it is an albatross to Marriott's other businesses.

So it makes sense for THEM to spin it off as a separate company. Their other businesses won't be held back as a collective whole going forward.

However, i foresee more fees to us as owners. Not not only will we get to pay management fees, but also licensing and franchise fees to have the Marriott name slapped on all of our resorts.


----------



## disnefile

Marriott has pretty much said this is not a good business.  Working in Corporate America and in finance for 30 years this spin off is doomed.  It will not be an investment grade company (Marriott's words, not mine) which means it can't borrow money effectively.  I would not be surprised to see the new Timeshare company file Chapter 11 in 2 years.  I know I now regret my investment.  I assume all of the investment have 0 resale value now.  In 2 or so years, you will not get credit in the Mariott hotel program for stays at timeshares, I can almost guarantee that.  The Marriott hotel company has to maximize their profits.  Would you buy under the new timeshare points program.  I am sure Marriott will spin off a huge amount of debt to the Timeshare company.  I wish I was wrong but I have seen this too many times.  Very little will change initially but mark my words in 2 or so years we as owners are screwed.


----------



## MVCI Customer Advocate

*Marriott Vacation Club Response*

Posted by Marriott Vacation Club Customer Advocacy Office (2/14/2010): Attached are answers that will address some of the frequently asked questions that Marriott Vacation Club owners may have.  As always, we encourage you to contact Marriott Vacation Club Customer Advocacy office with specific questions at customer.advocacy@vacationclub.com.

How will this affect my current ownership?
This transaction will not affect your ownership. Marriott Vacation Club owners should see no changes in the branding of their properties, services, usage options, use of Marriott Rewards ® points, or access to Marriott International’s hotels. In addition you will be able to access Interval International as you always have.

Who will manage the resorts?
Marriott Vacation Club International and its affiliates will manage the resorts. They will still be developed and managed to the exacting brand standards established by Marriott.

How will this transaction affect my ability to trade my week for Marriott Rewards ® points?
There will be no change in the ability to trade for Marriott Rewards ® points. You will still receive elite credit for stays at Marriott Vacation Club and you will still receive Marriott Rewards ® points if you are renting at Marriott Vacation Club. There will be no changes in your current point balances.

How will this transaction affect my ability to trade my week through Interval International?
There will be no change. The agreements that are in place with Interval International will continue with new Marriott Vacation Club International.

Will there be any changes with my COA as a result of this transaction?
The COA management structure will stay the same. We expect that the same people that work with your COA today will continue operating the resorts. Marriott established brand standards will apply to operating the resorts and the physical plant.

Why was this decision made?
This transaction will allow both companies to focus on growing and developing their respective business models. It also advances Marriott’s longstanding strategy of separating real estate from management and franchising operations and will position Marriott Vacation Club International to consider expanded business opportunities.

Is the decision in any way tied to the move to the new Marriott Vacation Club Destination’s points program?
The decision is not tied to the Marriott Vacation Club Destinations ™ program. The new points program has been very successful and has vastly exceeded our expectations with over 110,000 weeks already enrolled. We believe it is the most exciting timeshare product in the industry. The new Marriott Vacation Club International structure will allow us to focus on further developing this product and new vacation opportunities for our owners.

Does this mean that no new resorts will be developed and that Marriott is getting out of the timeshare business?
No. It will allow Marriott Vacation Club International to focus on the timeshare business and to create new and expanded offerings it would not have been able to do in the past. It should position MVCI to expand faster over time. Marriott International will remain involved, as it focuses on its core businesses, it will also create value by leveraging its brand equity, positioning Marriott Vacation Club International as the exclusive developer and operator of timeshare, fractional and related products under the Marriott brand.

When will this transaction be effective?
We expect the transaction will take place before the end of 2011.

What will be the relationship between Marriott and Marriott Vacation Club?
Marriott Vacation Club International will be similar to a franchisee and will be the exclusive developer and operator of timeshare, fractional and related products under the Marriott brand.

I am a Marriott stockholder – what does this mean for me?
Details of the transaction are not final but Marriott International stockholders are expected to receive stock in the new Marriott Vacation Club International as a stock dividend, and, of course, retain existing shares of Marriott International.

Note on Forward-looking statements: Statements in this document about the proposed spin-off of Marriott International, Inc.'s timeshare operations and development business concern anticipated future events and expectations that are not historical facts and are “forward-looking statements” within the meaning of federal securities laws. We cannot assure you that the spin-off will occur or take place on schedule, as there remain many risks and uncertainties that could delay or otherwise affect the transaction. These risks include the ability to obtain regulatory approvals; receipt of a favorable letter ruling from the Internal Revenue Service; final approval by Marriott's board of directors; and other risk factors identified in Marriott’s soon to be issued 2010 annual report on Form 10-K. Any forward-looking statements in this document are made as of February 14, 2011 and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.


----------



## GregT

disnefile said:


> Marriott has pretty much said this is not a good business.  Working in Corporate America and in finance for 30 years this spin off is doomed.  It will not be an investment grade company (Marriott's words, not mine) which means it can't borrow money effectively.  I would not be surprised to see the new Timeshare company file Chapter 11 in 2 years.  I know I now regret my investment.  I assume all of the investment have 0 resale value now.  In 2 or so years, you will not get credit in the Mariott hotel program for stays at timeshares, I can almost guarantee that.  The Marriott hotel company has to maximize their profits.  Would you buy under the new timeshare points program.  I am sure Marriott will spin off a huge amount of debt to the Timeshare company.  I wish I was wrong but I have seen this too many times.  Very little will change initially but mark my words in 2 or so years we as owners are screwed.



Thanks for the thoughts, but I believe they are way too extreme.   We should anticipate that the new management of SpinCo thinks this is there opportunity to run an independent company (and make personal wealth) therefore they will take advantage of the opportunity.   We should note that Wyndham still manages to attract $3B in debt, so SpinCo should remain financeable at some price.

As others have said, we should expect higher fees in the future (a la Wyndham), but we did anyway.  Also, perhaps SpinCo will become aggressive and acquire Interval International since they will need a stable revenue base -- II generates $100M in revenue per quarter and is cash flow positive.   We know that SpinCo will still earn reasonably strong management fees from the existing portfolio ($150M quarter? Not sure if this is right?) --- perhaps SpinCo will get extremely aggressive and try to buy the management rights and remaining inventory of the other timeshare stepchildren -- Starwood comes to mind, and become the luxury/quality version of what Wyndham wanted to be.   

Really, its very interesting to think about, and I'm much happier that Marriott spun out the franchise and gave them an opportunity to build a new high-quality leisure organization then just gave up and sold the franchise to Wyndham  (ugh).  SpinCo still has the Marriott and Ritz Carlton brands to protect and will figure out a way to generate the recurring cash flow that is needed.  If not, stock traders will punish the stock and Marriott will be pissed that the Marriott and Ritz Carlton brand was tainted.   

More interesting times in front of us.   

Best to all,

Greg


Edited:  I see MVCI Advocate's response -- good response and thanks


----------



## dioxide45

disnefile said:


> Marriott has pretty much said this is not a good business.  Working in Corporate America and in finance for 30 years this spin off is doomed.  It will not be an investment grade company (Marriott's words, not mine) which means it can't borrow money effectively.  I would not be surprised to see the new Timeshare company file Chapter 11 in 2 years.  I know I now regret my investment.  I assume all of the investment have 0 resale value now.  In 2 or so years, you will not get credit in the Mariott hotel program for stays at timeshares, I can almost guarantee that.  The Marriott hotel company has to maximize their profits.  Would you buy under the new timeshare points program.  I am sure Marriott will spin off a huge amount of debt to the Timeshare company.  I wish I was wrong but I have seen this too many times.  Very little will change initially but mark my words in 2 or so years we as owners are screwed.



I wonder how quickly after the spin-off is complete that the new company announces that it is up for sale? The goal is to maximize shareholder value. If they can find a likely suitor, it would definitely meet that goal. The problem is that there are really not many other timeshare companies that are large enough to absorb Marriott's business.


----------



## disnefile

So now we will have to pay Marriott for its name too.  More increases in the high maintenance fees.  Marriott has said all the right things but will change things radically in 2 years or so.  Look at their track record.  Would you trust anything they say?  A good line of business is rarely spun off.  Marriott Corp sees a bleak future in timeshare but can not say that. It will be impossible to sell your weeks.  This is not good for timeshare owners. This response is standard corporate bull. I will never recommend any timeshare, especially Marriott.  They have a lot of people's trust.

I am so disappointed in a product that at one time was the best in the industry.  This is Corporate America.  I know as I was part of it.


----------



## siberiavol

We have $1.5 billion of real estate we can't sell and management is tired of hearing about it on the quarterly conference calls would have been another way of relating the news.


----------



## disnefile

siberiavol 



Could not have said better myself.  You hit the nail on the head.  Too bad we are stuck.


----------



## hotcoffee

dioxide45 said:


> I wonder how quickly after the spin-off is complete that the new company announces that it is up for sale? The goal is to maximize shareholder value. If they can find a likely suitor, it would definitely meet that goal. The problem is that there are really not many other timeshare companies that are large enough to absorb Marriott's business.



A while back, I read that some financial analysts had urged Marriott to exit the timeshare business.  I think the spinoff will make it a little easier should they eventually decide to jettison the business.  However, with the DC rollout so recent, I think they will give it a few years to see how things go.  Another downturn in the economy might do it though.

Anyone care to make some comments on the sales figures quoted by the customer advocate post?


----------



## equitax

*TUG Users to acquire 66 2/3% of Spinco...*

Title line says it all.  Who's in?


----------



## brigechols

hotcoffee said:


> A while back, I read that some financial analysts had urged Marriott to exit the timeshare business.  I think the spinoff will make it a little easier should they eventually decide to jettison the business.  However, with the DC rollout so recent, I think they will give it a few years to see how things go.  Another downturn in the economy might do it though.
> 
> Anyone care to make some comments on the sales figures quoted by the customer advocate post?


It is believable that 110,000 weeks are enrolled. I didn't read any figures for number of points sold.


----------



## wof45

disnefile said:


> So now we will have to pay Marriott for its name too.  More increases in the high maintenance fees.  Marriott has said all the right things but will change things radically in 2 years or so.  Look at their track record.  Would you trust anything they say?  A good line of business is rarely spun off.  Marriott Corp sees a bleak future in timeshare but can not say that. It will be impossible to sell your weeks.  This is not good for timeshare owners. This response is standard corporate bull. I will never recommend any timeshare, especially Marriott.  They have a lot of people's trust.



I don't agree at all.

We own a week at a resort that can be used or exchanged.  The MF depends on the local owners group, and why would they choose another management group instead of Marriott, if that means giving up all of the things that go along with belonging to MVC?

If MVC does not provide a good product at a good price, what wold prevent an owners association from changing to another management company if they decided, for example, that belonging to Wyndham provided a better deal?

If you think that you had an investment and it has lost its value, then take a look at the economy and blame Wall Street for creating derivatives and not regulating credit default swaps to insure them.

I don't see that this  announcement really changes anything in the short term, and in the long term the total package depends on whether and when the economy recovers.  In the meantime, enjoy your vacation weeks at MVC or wherever you trade into.


----------



## SueDonJ

dioxide45 said:


> I agree. Marriott doesn't see timeshare as the growth business it once was. The hotel business on the other hand is a business that is seeing an uptick. Timeshare is forecast to remain flat for many years to come. Also, given their glut of inventory, it is an albatross to Marriott's other businesses.
> 
> So it makes sense for THEM to spin it off as a separate company. Their other businesses won't be held back as a collective whole going forward.
> 
> However, i foresee more fees to us as owners. Not not only will we get to pay management fees, but also licensing and franchise fees to have the Marriott name slapped on all of our resorts.



But we already pay the fees for Marriott to manage the resorts.  The amount they can be paid (10% of total m/f) is stipulated in the governing docs, and the operating budgets are subject to strict auditing actions.  How can they increase the percentage they take as management fees, or bypass the budget audits, without a majority vote?

About the name brand, if Marriott sold off the timeshare business to a non-Marriott entity and negotiated a fee for their name on the buildings then we might expect to see an additional fee to keep the branding.  But they're not selling to a non-Marriott entity, they're spinning off to a separate Marriott entity.  It's unnamed yet, but I can't imagine that they're going to drop either the Marriott or Ritz-Carlton name from their timeshare brands.  They only JUST introduced the Destination Club and wouldn't have included the Marriott brand in its name if their intent is to name the spin-off anything other than Marriott.  And this spin-off, just like the Destination Club, isn't something that's been implemented without years of forethought.

I think there's reason to be concerned but no more or less than there was yesterday.  We've been watching ALL timeshare businesses suffer losses since the economy began tanking, and we knew that Marriott would have to react somehow if their business is to survive the downturn.  I'd rather see them take the measures they have than do nothing, because if the DC doesn't support the timeshare business and/or the spin-off doesn't stem shareholder hesitancy, then we could be in a lot worse shape.  It's kind of a surprise to me, actually, that anyone wouldn't think that Marriott's number one concern has always been the corporate line.

**********
Aside from all that, I really appreciate that MVCI AC posted here so quickly after the press release.  For months, since the advent of the DC, we've been complaining about the fact that Marriott was not prepared to deal with the related questions that we Owners had a right to ask.  How many times did we see a comment saying what a terrible job Marriott did with the DC rollout and how ill-prepared the reps appeared to be?  Well, we can't say the same here.  Marriott knows we're intelligent enough to follow the quarterly earnings statements, they know we read the press releases, they know we know )) the right questions to ask, and they've learned that we want better customer service when they make significant changes to our timeshare ownerships.  I'm not saying that MVCI AC's post here answers all the questions, but it goes a long way toward restoring some trust.  For me, anyway.  And besides, I'm not sure Marriott can answer ALL the questions at this point anyway.  Time will tell where the economy takes us all.


----------



## dioxide45

From Marriott's own press release:



> Marriott will also receive franchise fees from the timeshare company’s use of the Marriott and Ritz-Carlton brands.



It seems that Marriott (the Hotel side) expects to earn fees for the use of their name on our resorts.

According to the Customer Advocate, MVCI (the new company) will manage our resorts, not Marriott. So the management deal and the licensing fees are completely separate. In the early stages, MVCI may opt to eat the licensing fees on the sales front. In the end however we the customers pay for everything, so it has to come out of our pockets either in a MF charge or wrapped in to the sales price.


----------



## mwwich

My employer was spun off from a major drug company about 10 years ago that everyone would recognize, and it's worked out well; however I would say such examples are a minority.

The key test will be if Marriott keeps their 20% stake in the TS business or will they gradually sell that off too.  An interesting question....will you buy the stock when it starts trading?

I appreciate the Q&A they put here on TUG, however none of that is promised forever, and could mean little over the long term.  

No one knows, could work well and might not either.  Interesting how there's a lot of Marriott bashing (me included) with the DC change, yet most feel more secure if the parent company still owned the TS business.  Human nature to take the devil we know vs. the devil we don't.


----------



## disnefile

SueDonJ said:


> But we already pay the fees for Marriott to manage the resorts.  The amount they can be paid (10% of total m/f) is stipulated in the governing docs, and the operating budgets are subject to strict auditing actions.  How can they increase the percentage they take as management fees, or bypass the budget audits, without a majority vote?
> 
> About the name brand, if Marriott sold off the timeshare business to a non-Marriott entity and negotiated a fee for their name on the buildings then we might expect to see an additional fee to keep the branding.  But they're not selling to a non-Marriott entity, they're spinning off to a separate Marriott entity.  It's unnamed yet, but I can't imagine that they're going to drop either the Marriott or Ritz-Carlton name from their timeshare brands.  They only JUST introduced the Destination Club and wouldn't have included the Marriott brand in its name if their intent is to name the spin-off anything other than Marriott.  And this spin-off, just like the Destination Club, isn't something that's been implemented without years of forethought.
> 
> I think there's reason to be concerned but no more or less than there was yesterday.  We've been watching ALL timeshare businesses suffer losses since the economy began tanking, and we knew that Marriott would have to react somehow if their business is to survive the downturn.  I'd rather see them take the measures they have than do nothing, because if the DC doesn't support the timeshare business and/or the spin-off doesn't stem shareholder hesitancy, then we could be in a lot worse shape.  It's kind of a surprise to me, actually, that anyone wouldn't think that Marriott's number one concern has always been the corporate line.
> 
> **********
> Aside from all that, I really appreciate that MVCI AC posted here so quickly after the press release.  For months, since the advent of the DC, we've been complaining about the fact that Marriott was not prepared to deal with the related questions that we Owners had a right to ask.  How many times did we see a comment saying what a terrible job Marriott did with the DC rollout and how ill-prepared the reps appeared to be?  Well, we can't say the same here.  Marriott knows we're intelligent enough to follow the quarterly earnings statements, they know we read the press releases, they know we know )) the right questions to ask, and they've learned that we want better customer service when they make significant changes to our timeshare ownerships.  I'm not saying that MVCI AC's post here answers all the questions, but it goes a long way toward restoring some trust.  For me, anyway.  And besides, I'm not sure Marriott can answer ALL the questions at this point anyway.  Time will tell where the economy takes us all.






They have taken measures to protect Marriott International not Marriott Timeshares.  Marriott Timeshares will be a very weak company.  It will not be investment grade and the wall street journal has said that.  That is very very bad for any company and especialy in this economy.  So, yes things have changed significantly from yesterday for the worse.


----------



## TheTimeTraveler

MVCI Customer Advocate said:


> Posted by Marriott Vacation Club Customer Advocacy Office (2/14/2010): Attached are answers that will address some of the frequently asked questions that Marriott Vacation Club owners may have.  As always, we encourage you to contact Marriott Vacation Club Customer Advocacy office with specific questions at customer.advocacy@vacationclub.com.
> 
> How will this affect my current ownership?
> This transaction will not affect your ownership. Marriott Vacation Club owners should see no changes in the branding of their properties, services, usage options, use of Marriott Rewards ® points, or access to Marriott International’s hotels. In addition you will be able to access Interval International as you always have.
> 
> Who will manage the resorts?
> Marriott Vacation Club International and its affiliates will manage the resorts. They will still be developed and managed to the exacting brand standards established by Marriott.
> 
> How will this transaction affect my ability to trade my week for Marriott Rewards ® points?
> There will be no change in the ability to trade for Marriott Rewards ® points. You will still receive elite credit for stays at Marriott Vacation Club and you will still receive Marriott Rewards ® points if you are renting at Marriott Vacation Club. There will be no changes in your current point balances.
> 
> How will this transaction affect my ability to trade my week through Interval International?
> There will be no change. The agreements that are in place with Interval International will continue with new Marriott Vacation Club International.
> 
> Will there be any changes with my COA as a result of this transaction?
> The COA management structure will stay the same. We expect that the same people that work with your COA today will continue operating the resorts. Marriott established brand standards will apply to operating the resorts and the physical plant.
> 
> Why was this decision made?
> This transaction will allow both companies to focus on growing and developing their respective business models. It also advances Marriott’s longstanding strategy of separating real estate from management and franchising operations and will position Marriott Vacation Club International to consider expanded business opportunities.
> 
> Is the decision in any way tied to the move to the new Marriott Vacation Club Destination’s points program?
> The decision is not tied to the Marriott Vacation Club Destinations ™ program. The new points program has been very successful and has vastly exceeded our expectations with over 110,000 weeks already enrolled. We believe it is the most exciting timeshare product in the industry. The new Marriott Vacation Club International structure will allow us to focus on further developing this product and new vacation opportunities for our owners.
> 
> Does this mean that no new resorts will be developed and that Marriott is getting out of the timeshare business?
> No. It will allow Marriott Vacation Club International to focus on the timeshare business and to create new and expanded offerings it would not have been able to do in the past. It should position MVCI to expand faster over time. Marriott International will remain involved, as it focuses on its core businesses, it will also create value by leveraging its brand equity, positioning Marriott Vacation Club International as the exclusive developer and operator of timeshare, fractional and related products under the Marriott brand.
> 
> When will this transaction be effective?
> We expect the transaction will take place before the end of 2011.
> 
> What will be the relationship between Marriott and Marriott Vacation Club?
> Marriott Vacation Club International will be similar to a franchisee and will be the exclusive developer and operator of timeshare, fractional and related products under the Marriott brand.
> 
> I am a Marriott stockholder – what does this mean for me?
> Details of the transaction are not final but Marriott International stockholders are expected to receive stock in the new Marriott Vacation Club International as a stock dividend, and, of course, retain existing shares of Marriott International.
> 
> Note on Forward-looking statements: Statements in this document about the proposed spin-off of Marriott International, Inc.'s timeshare operations and development business concern anticipated future events and expectations that are not historical facts and are “forward-looking statements” within the meaning of federal securities laws. We cannot assure you that the spin-off will occur or take place on schedule, as there remain many risks and uncertainties that could delay or otherwise affect the transaction. These risks include the ability to obtain regulatory approvals; receipt of a favorable letter ruling from the Internal Revenue Service; final approval by Marriott's board of directors; and other risk factors identified in Marriott’s soon to be issued 2010 annual report on Form 10-K. Any forward-looking statements in this document are made as of February 14, 2011 and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.






Nice to see the MVCI Customer Advocacy come out from under their rock to place another posting 



.


----------



## wof45

dioxide45 said:


> According to the Customer Advocate, MVCI (the new company) will manage our resorts, not Marriott. So the management deal and the licensing fees are completely separate. In the early stages, MVCI may opt to eat the licensing fees on the sales front. In the end however we the customers pay for everything, so it has to come out of our pockets either in a MF charge or wrapped in to the sales price.



I think that the licensing fee is already being paid as part of the resort management fee.  If the 10% fee paid does not include the Marriott name and other valuables, then why pay them instead of one of the companies that would do it for less than 10%


----------



## wof45

mwwich said:


> The key test will be if Marriott keeps their 20% stake in the TS business or will they gradually sell that off too.  An interesting question....will you buy the stock when it starts trading?



In the end, it doesn't matter if any of us will buy the stock.  Everything has a value, so the real test is the value the market places on the total package, since most of the stock will end up in mutual funds.  You may own the stock and not even know it.


----------



## dioxide45

wof45 said:


> I think that the licensing fee is already being paid as part of the resort management fee.  If the 10% fee paid does not include the Marriott name and other valuables, then why pay them instead of one of the companies that would do it for less than 10%



However the management fee is paid to MVCI, it will continue to be paid to MVCI in the future. Someone has to pay Marriott for MVCIs use of that name.

Will that just come out of the 10% that we currently pay? Possibly, though possibly not, but it has to come from somewhere.


----------



## wof45

disnefile said:


> They have taken measures to protect Marriott International not Marriott Timeshares.  Marriott Timeshares will be a very weak company.  It will not be investment grade and the wall street journal has said that.  That is very very bad for any company and especialy in this economy.  So, yes things have changed significantly from yesterday for the worse.



I don't believe that is true.

Investment grade has no meaning unless the company is issuing bonds.  And they indicated that they will not be issuing bonds to build or buy new resorts until they have sold their current stock.

weak or strong is not meaningful.  The stock will have a value, and at some point when more cash is needed, they can issue stock or sell bonds depending on which is better for financing new development.  It will probably depend more on the state of the economy in two years than anything else.


----------



## Michigan Czar

disnefile said:


> They have taken measures to protect Marriott International not Marriott Timeshares.  Marriott Timeshares will be a very weak company.  It will not be investment grade and the wall street journal has said that.  That is very very bad for any company and especialy in this economy.  So, yes things have changed significantly from yesterday for the worse.



I agree 100%! A very disappointing day for us MVCI owners.


----------



## Michigan Czar

wof45 said:


> I don't believe that is true.
> 
> Investment grade has no meaning unless the company is issuing bonds.  And they indicated that they will not be issuing bonds to build or buy new resorts until they have sold their current stock.
> 
> weak or strong is not meaningful.  The stock will have a value, and at some point when more cash is needed, they can issue stock or sell bonds depending on which is better for financing new development.  It will probably depend more on the state of the economy in two years than anything else.



I hope you are right but I see this spin-off as bad news in the long run.


----------



## SueDonJ

disnefile said:


> They have taken measures to protect Marriott International not Marriott Timeshares.  Marriott Timeshares will be a very weak company.  It will not be investment grade and the wall street journal has said that.  That is very very bad for any company and especialy in this economy.  So, yes things have changed significantly from yesterday for the worse.



Marriott timeshares were financially weak yesterday, they're still weak today.  They're going to continue to be weak until the economy improves enough that people are willing once again, and have the discretionary income, to assume the financial risks inherent in any timeshare purchase.  If Marriott determined yesterday that they wanted out of the timeshare business then they could have announced a sale.  This spin-off isn't necessary if they want out.  IMO, it also isn't a guarantee that they will be getting out.  It could happen, sure, but I think they'll give the DC some time to put their ideas for the future of timeshares in motion.  And in the meantime, Marriott Int'l. shareholders will be protected from further timeshare losses.  You might say this buys Marriott some time to prove that there really is a future for timeshares.


----------



## dioxide45

Flat out, this announcement indicates that Marriott IS getting out of the TS business. Marriott will no longer be a part of the new company. The Marriott name will be licensed to the new company, that is all.

The Marriott family will continue to own some of the stock and a Marriott family member will sit on it's board. But in the end Marriott is out of the TS business. Only their name is on the shingle.


----------



## tombo

Wall Street Journal article:
http://online.wsj.com/article/SB10001424052748703584804576144633684101742.html?mod=googlenews_wsj


----------



## dioxide45

dioxide45 said:


> Flat out, this announcement indicates that Marriott IS getting out of the TS business. Marriott will no longer be a part of the new company. The Marriott name will be licensed to the new company, that is all.
> 
> The Marriott family will continue to own some of the stock and a Marriott family member will sit on it's board. But in the end Marriott is out of the TS business. Only their name is on the shingle.



I should mention, this doesn't mean things will change. Only what the reality is. We all have to sit and wait to see how this will affect owners, if at all.


----------



## disnefile

weak or strong is not meaningful???

Tell that to Bond rating agencies.  The cost to borrow, and they will need to borrrow if only on a short term commercial paper basis, will be high and who will pay for that high rate debt, we will in higher fees.  Marriott Internationals' fee will be in addition to the fee for spinco managing the properties.  Remember, Spinco has to make a profit too.  There is another hand in the pocket of the timeshare company.I worked for the rating agencies so I know what I am talking about.


----------



## mwwich

wof45 said:


> In the end, it doesn't matter if any of us will buy the stock.  Everything has a value, so the real test is the value the market places on the total package, since most of the stock will end up in mutual funds.  You may own the stock and not even know it.



My point was if we wouldn't own the stock (knowingly, not via our 401k's, etc)....why should Marriott?  We don't like the fact they have spun off the TS business....yet if most of us wouldn't buy the stock why shouldn't they drop it via a spin off?  The Marriott shareholders make this decision, not us TS owners; as much as we don't like it.

But I stress again, maybe little will change and as long as I can have nice vacations at a reasonable cost (yet to be determined in the long run) then do we really care who the shareholders are?


----------



## tombo

The internet has dealt the final death blow to timeshare developer sales. Retail timeshare sales will never be a booming viable business again because anyone with internet access can google timeshares and see that they are only worth pennies on the dollar. The cheap resale market is here to stay.

In addition financial institutions do not want to finance an item that is worthless if they have to foreclose on it. It is a losing proposition. Without financing the sales will almost totally cease. Marriott in the past could finance and take the foreclosures to resell for retail prices making money on the same weeks multiple times. Times have changed. Now Marriott is stuck with more inventory than they want. Not even Marriott wants to finance Marriott retail timeshares. heck Marriott doesn't een want to ROFR weeks that sell for a few hundred dollars.

Marriott sees the writing on the wall. Dump the timeshares and the diminishing returns associated with timeshares so that they can concentrate on their profitable hotel business. Being the unwanted stepchild of the marriott corporation can not be good for owners in the long run.


----------



## disnefile

tombo said:


> The internet has dealt the final death blow to timeshare developer sales. Retail timeshare sales will never be a booming viable business again because anyone with internet access can google timeshares and see that they are only worth pennies on the dollar.
> 
> In addition financial institutions do not want to finance an item that is worthless if they have to foreclose on it. It is a losing proposition. Without financing the sales will almost totally cease. Marriott in the past could finance and take the foreclosures to resell for retail prices making money on the same weeks multiple times. Times have changed. Now Marriott is stuck with more inventory than they want. Not even Marriott wants to finance Marriott retail timeshares. heck Marriott doesn't een want to ROFR weeks that sell for a few hundred dollars.
> 
> Marriott sees the writing on the wall. Dump the timeshares and the diminishing returns associated with timeshares so that they can concentrate on their profitable hotel business. Being the unwanted stepchild of the marriott corporation can not be good for owners in the long run.



Great analysis.  You are completely right. Others need to open their eyes and see the writing on the wall for the whole timeshare industry. Marriott has brought back seedy to timeshares.


----------



## MULTIZ321

tombo said:


> Wall Street Journal article:
> http://online.wsj.com/article/SB10001424052748703584804576144633684101742.html?mod=googlenews_wsj



Tombo,

Your link didn't provide the full article unless the reader is a Wall Street Journal Subscriber.

Here's a link to the entire article: Marriott to Spin Off Timeshare Unit
 - by Alexandra Berzon and Kris Hudson/Wall Street Journal Online

I apologize - my link didn't work either.  

Richard


----------



## GregT

tombo said:


> The internet has dealt the final death blow to timeshare developer sales. Retail timeshare sales will never be a booming viable business again because anyone with internet access can google timeshares and see that they are only worth pennies on the dollar. The cheap resale market is here to stay.
> 
> In addition financial institutions do not want to finance an item that is worthless if they have to foreclose on it. It is a losing proposition. Without financing the sales will almost totally cease. Marriott in the past could finance and take the foreclosures to resell for retail prices making money on the same weeks multiple times. Times have changed. Now Marriott is stuck with more inventory than they want. Not even Marriott wants to finance Marriott retail timeshares. heck Marriott doesn't een want to ROFR weeks that sell for a few hundred dollars.
> 
> Marriott sees the writing on the wall. Dump the timeshares and the diminishing returns associated with timeshares so that they can concentrate on their profitable hotel business. Being the unwanted stepchild of the marriott corporation can not be good for owners in the long run.



Tombo,

Welcome back!  It's nice to see you again on the Marriott board -- lots more excitement now!

All,

I think we can all agree that a business model that depends upon the development and sale of new timeshare interests is getting killed by the internet -- and may be dead.

However, I think we are being hasty in announcing the demise of SpinCo, or what I am calling the new Marriott timeshare business (because it is being spun out of Marriott, and will exist as an entirely different company).

Seriously, who wouldn't want to be the CEO of a brand new company, with two of the most respected brand names in the hospitality industry?  And that brand new company comes with $1.5B worth of inventory for sale/deployment in some of the most desirable places on the planet?  

And there are some recurring revenues?  And an (abused) ownership base of 400,000 owners that can be courted?  And shareholder expectators are very loowwww....

What an opportunity   ----   Plus, there are a plethora of other properties/companies that can be consolidated to make an even more formidable company -- forget developer sales and find new ways to leverage the portfolio.

So, in time....we will learn which path they pursue:   

They can be a consolidator and build an entirely new company -- a truly high quality leisure company that treats its ownership base like partners and creates a model for the leisure community.  

Or, they can follow the path of Wyndham and bilk their captive owners for everything they can, and use contracts to tighten the noose.

Personally, I'm glad to rid of corporate Marrriott -- the timeshare business had outlived its usefulness and it was clear that our value to them was in the past, when we purchased the week.  Hopefully, a new model can be developed that has a brighter future for all of us.

Best to all,

Greg


----------



## tombo

MULTIZ321 said:


> Tombo,
> 
> Your link didn't provide the full article unless the reader is a Wall Street Journal Subscriber.
> 
> Here's a link to the entire article: Marriott to Spin Off Timeshare Unit
> - by Alexandra Berzon and Kris Hudson/Wall Street Journal Online
> 
> I apologize - my link didn't work either.
> 
> Richard




For some reason if you google the article and pull it up you can read the whole article. If you copy and paste the address you don't get the whole article. Here is the whole WSJ article:


"Marriott to Spin Off Timeshare Unit .Article Stock Quotes Comments (2) more in Business ».EmailPrintSave This ↓ More.
.Twitter
 Digg
 + More
 close Yahoo! BuzzMySpacedel.icio.usRedditFacebookLinkedInFarkViadeoOrkut Text   By ALEXANDRA BERZON And KRIS HUDSON 
Marriott International Inc. is spinning off its timeshare business, a one-time booming profit generator for hotel companies that petered out during the recession.

The move will create what amounts to the world's largest standalone timeshare business, with around $1.5 billion in unsold assets and 400,000 owners, according to Marriott's chief operating officer, Arne Sorenson. The unit owns 71 properties with 33,000 rooms.


Arne Sorenson
.Under the plan announced Monday, Marriott's existing shareholders will own the new company, receiving shares when it is spun out, which is expected to happen by the end of this year. The new company, which has yet to be named, will control the management and planning of the timeshare properties, as well as unsold and under-construction properties.

Marriott's timeshare business in 2010 had $1.2 billion in revenue, around 10.4% of the company's total revenue.

The announcement came as Marriott reported a profit of $173 million in the fourth quarter, or 46 cents a share, up 63% from $106 million, or 28 cents a share, in the same quarter a year earlier. Overall revenue rose 8% to $3.6 billion.

Marriott's revenue per available room, a key industry metric, increased 7.6% in constant dollars. The company said it expects revenue per available room to increase between 6% and 8% in 2011.

The gains come as the hotel industry broadly has shown a faster-than-expected recovery following a deep plunge during the downturn. The upswing has primarily been caused by more business travel.

The timeshare business, however, which relies more on consumer than business travelers, has continued to lag as sales have dwindled and buyers have difficulty qualifying under stricter financing standards. 

In the fourth quarter of 2010, Marriott's timeshare sales fell to $201 million, a $2 million decline from the previous year. The unit's revenue has dropped around 30% since 2007.

Mr. Sorenson said Marriott shareholders have lost their appetite for the timeshare business. "We've never really been interested in walking away from this business," Mr. Sorenson said in an interview Monday. "But the last few years have been extraordinarily difficult. This recession was harder on the timeshare business than last recessions."

Analysts say the Marriott spinoff won't immediately put pressure on two of the other major timeshare players, Starwood Hotels & Resorts Worldwide Inc. and Wyndham Worldwide Inc., to follow suit. However, they may consider such a move if Marriott's spinoff fares well with investors.

Timeshare sales account for roughly half of Wyndham's overall sales, so Wyndham is less likely to split its business in that manner than the other two. In comparison, nearly 11% of Starwood's sales come from timeshares. "Once you have this [spinoff] on a standalone basis, the world will tell us what a timeshare company is worth," said Robert LaFleur, managing director at Hudson Securities. "We don't have a pure timeshare company of this scale" already on the market to set a value. 

Under Marriott's plan, the new timeshare company will be a Marriott franchisee by licensing the Marriott names for the timeshare properties. At the helm will be Steve Weisz, the current head of Marriott's timeshare unit. Its board will include both Debbie Marriott Harrison, the daughter of Marriott chief executive Bill Marriott, and William Shaw, a former Marriott president.

The company will be able to make deals with other hotel companies, Mr. Sorenson said.

The decision, which was made by Marriott's board on Friday, will carve out a three-decade-old business that began in 1982 when Marriott bought a timeshare property in Hilton Head, South Carolina, and started building timeshare resorts across the country. 

For years, the concept, which involved individuals buying permanent rights to stay for a portion of time at a resort, provided dividends. Other hotel companies poured into the business.

Hotel companies continued to invest in the timeshare business even as they divested of most other capital assets. Marriott, for example, in 1992 spun off its real-estate division to create what is now called Host Hotels & Resorts.

Mr. Sorenson said the company tried to partner with outside investors to build timeshare resorts but found that the model of providing management for third-party owners, which is the basis for the hotel business, didn't work well with timeshares.

Several other hotel and timeshare companies, however, including Hilton Worldwide, are still seeking private investors for new timeshare properties. 

As the business declined in recent years, Marriott restructured it using a point system that could be redeemed at any property rather than requiring owners to buy rights at a specific property. Mr. Sorenson said he doesn't expect the planned change in ownership to affect timeshare owners."


----------



## tombo

GregT said:


> Tombo,
> Welcome back!  It's nice to see you again on the Marriott board -- lots more excitement now!
> Greg



I almost sold my Marriott after the points rollout. I had a buyer but backed out deciding to hang on and see if the points rollout would hurt my exchange opportunites as a weeks owner. I am still disappointed that Marriott changed from a weeks based program to a points based program, upset with the rules and point exchange values, and upset with the way Marriott handled the rollout, but I kept my week hoping few would convert and the exchange opportunites for weeks owners would remain good.

 Now I am even more discouraged about the future for owners of Marriott weeks. When timeshare companies change their business model from sales and development to instead focus on management of the resorts, the only way for them to increase profit is on the backs of current owners. Nickel and dime everything to increase profits. Raise their mgt fees. Renovate, assess, renovate some more, assess some more. Plenty of other companies have used this business plan to make a profit on sold out resorts. 

Since Marriott is not building anymore resorts the only way to make the stock increase and get bonuses for the CEO's is to show increasing profitability on their mgt of the resorts. Get ready. Timesharing is about to get more expensive for Marriott owners.


----------



## bogey21

*I sold my four Marriott Weeks 5 - 10 years ago when I got upset with some of the things they were doing; i.e. changing the Rental and Resale Programs, etc.  All in all I think I about broke even.

At the right time the stock of the new entity could be a nice speculation.  I can see the new company turning itself into a rental machine, renting the Weeks they can't sell; buying Weeks on the cheap in the resale market and renting them out; adding non-Marriott Weeks to their rental inventory, etc.  Somewhat like what RCI is doing.

I'm going to keep my eyes open on this one.

George *


----------



## bobcat

bogey21 said:


> *I sold my four Marriott Weeks 5 - 10 years ago when I got upset with some of the things they were doing; i.e. changing the Rental and Resale Programs, etc.  All in all I think I about broke even.
> 
> At the right time the stock of the new entity could be a nice speculation.  I can see the new company turning itself into a rental machine, renting the Weeks they can't sell; buying Weeks on the cheap in the resale market and renting them out; adding non-Marriott Weeks to their rental inventory, etc.  Somewhat like what RCI is doing.
> 
> I'm going to keep my eyes open on this one.
> 
> George *



Week owners who went to points just put more money on the table. Now Marriott wants to spin off a new co. I do not know how this will work out?.Looks like Marriott  is looking to break out of the timeshare business. It will be easy to sell off then.


----------



## wof45

disnefile said:


> weak or strong is not meaningful???
> 
> Tell that to Bond rating agencies.  The cost to borrow, and they will need to borrrow if only on a short term commercial paper basis, will be high and who will pay for that high rate debt, we will in higher fees.  Marriott Internationals' fee will be in addition to the fee for spinco managing the properties.  Remember, Spinco has to make a profit too.  There is another hand in the pocket of the timeshare company.I worked for the rating agencies so I know what I am talking about.



none of that matters if the company does not need to borrow.  you assume they will need to borrow, but they do have a steady cash flow.  They also have a lot of inventory that is already financed.

If anyone reading the Wall Street article is used to reading these, they can see many mistakes in what is written and in the analysis.  Time will tell how well the company does, but MVC only manages many timeshare resorts and does not own them.  For the foreseeable future, they also do not need to build more.

From the release, in the fourth quarter, Marriott posted revenues of 98% of what it sold in Q4 last year, so the points model is doing as well in its first 6 months as the old model did.  And this is in an environment in which home sales are also at lows, so there is every reason to believe the TS market sales will rise with the housing market if not faster since MVC sells to a higher income segment.

A possible outcome mentioned as the new company looks at new business is taking over management of other high-end time shares under the Marriott name, much as the Marriott parent manages hotels that used to carry other brands.  It could become very interesting in the next few years.


----------



## hvsteve1

Marriott's business plan has, for years, involved franchises and management fees. The hotels are probably built with real estate investment trusts (REIT) and franchised out. Don't you notice that Marriott hotels, as do others, list the franchisees on a plaque near the entrance?  Staying at MVCI properties often involves dealing with varying rules concerning use of on site Marriott hotels depending on how generous the franchisee wants to be to timeshare visitors. Spinning off the timeshare business would seem to bring them in line with the hotel system.


----------



## Herb33

Bill's Blog


----------



## luvgoldns

Change happens.

Whatever comes of this, one can only hope that the "quality" of the "Marriott" resort system does not diminish.

That being said, if we (owners) are required to pay even more money and if we are not getting the quality product that we purchased or expected, then I would anticipate a lot more defaulted maintence fees....which again, hurts the rest of us and the overall TS industry (if there's one left).

Time will tell, obviously.

ileneg


----------



## tombo

wof45 said:


> none of that matters if the company does not need to borrow.  you assume they will need to borrow,
> 
> From the release, in the fourth quarter, Marriott posted revenues of 98% of what it sold in Q4 last year, so the points model is doing as well in its first 6 months as the old model did.  And this is in an environment in which home sales are also at lows, so there is every reason to believe the TS market sales will rise with the housing market if not faster since MVC sells to a higher income segment.
> .


Want to know why they dumped timeshares? Sales of timeshares and profits from timeshares are plummetting while Hotel income is rising. The "old model" of selling timeshare weeks had quit working, so they swapped to a new model (points). That has not stopped the slide. When the new excitement of points wear off (most anything new will have a spike in sales) the slide will probably deepen. Here is a quote from the WSJ article:

"Marriott's revenue per available room, a key industry metric, increased 7.6% in constant dollars. The company said it expects revenue per available room to increase between 6% and 8% in 2011."

"In the fourth quarter of 2010, Marriott's timeshare sales fell to $201 million, a $2 million decline from the previous year. The unit's revenue has dropped around 30% since 2007."

Revenus of 98% of Q4 is showing that sales are still falling from the dismal prior 3 years.

Marriott needs financing because selling points using their own money has a cost that they will not want to incur. It is hard to sell stock in a company who has falling revenues for several consecutive years and is loaded in debt. 

Very few retail buyers can afford pay cash for $40,000 to $50,000 worth of points. If you think Marriott weeks are almost worthless, try to resell your Marriott points through a licensed reseller (the only way Marriott will allow the sale) if they ever authorize one. Marriott must borrow money (which they will not want to do) or find someone willing to finance points buyers. I doubt Marriott will find a financial institution willing to finance Marriott points because every foreclosure amounts to a virtual total loss since the product is worthless resale. No financing, no sales. 

The future for this division is bleak with regards to sales growing profits. Stock value will never increase unless the company can show profit and growth. That leaves mgt of the resorts as the company's cash cow. A 10% increase in Mgt fees with no increase in employees or services translates into about a 10% increase in profit. Assess and renovate and Marriott makes money. They after all must be paid for the additional work they do supervising and planning for the renovations. Get ready, increases are coming. You are a captive income flow for the new Marriott timeshare division and there is nothing you can do about it but sell or pay the ever increasing costs Marriott will charge you to be an owner. But heck if you buy some stock in the new company when you pay your perpetually escalating MF's you can at least feel like you are contributing to your own stock portfolio.


----------



## siesta

I wonder about the DC program now. it originally was an attempt to increase the profit margin, but now do they see it is a failed attempt so they decided instead of swimming up stream to just spin it off?  obviously all speculation, but interesting stuff indeed.  I'm sure some of you wished they just spun it off to begin with instead of "fixing something that ain't broke" --> i.e. creating DC

obviously DC is here to stay for the time being, that is not what I was implying in case anyone misunderstood my post.


----------



## tschwa2

Somehow Wyndham seams to to have no problem geting someone to back 50k-100k loans for (near) worthless points all the time.  I bet they would even be willing to send some of their sale force over to help the new marriott timeshare co sell some inventory and them WAAM it to make it special presidental reserve properties.  ...or diamond or raintree or festiva. :hysterical:


----------



## disnefile

tombo said:


> Want to know why they dumped timeshares? Sales of timeshares and profits from timeshares are plummetting while Hotel income is rising. The "old model" of selling timeshare weeks had quit working, so they swapped to a new model (points). That has not stopped the slide. When the new excitement of points wear off (most anything new will have a spike in sales) the slide will probably deepen. Here is a quote from the WSJ article:
> 
> "Marriott's revenue per available room, a key industry metric, increased 7.6% in constant dollars. The company said it expects revenue per available room to increase between 6% and 8% in 2011."
> 
> "In the fourth quarter of 2010, Marriott's timeshare sales fell to $201 million, a $2 million decline from the previous year. The unit's revenue has dropped around 30% since 2007."
> 
> Revenus of 98% of Q4 is showing that sales are still falling from the dismal prior 3 years.
> 
> Marriott needs financing because selling points using their own money has a cost that they will not want to incur. It is hard to sell stock in a company who has falling revenues for several consecutive years and is loaded in debt.
> 
> Very few retail buyers can afford pay cash for $40,000 to $50,000 worth of points. If you think Marriott weeks are almost worthless, try to resell your Marriott points through a licensed reseller (the only way Marriott will allow the sale) if they ever authorize one. Marriott must borrow money (which they will not want to do) or find someone willing to finance points buyers. I doubt Marriott will find a financial institution willing to finance Marriott points because every foreclosure amounts to a virtual total loss since the product is worthless resale. No financing, no sales.
> 
> The future for this division is bleak with regards to sales growing profits. Stock value will never increase unlessthe company can show profit and growth. That leaves mgt of the resorts as the company's cash cow. A 10% increase in Mgt fees with no increase in employees or services translates into about a 10% increase in profit. Assess and renovate and Marriott makes money. They after all must be paid for the additional work they do supervising and planning for the renovations. Get ready, increases are coming. You are a captive income flow for the new Marriott timeshare division and there is nothing you can do about it but sell or pay the ever increasing costs Marriott will charge you to be an owner. But heck if you buy some stock in the new company at least when you pay your ever increasing MF's you can at least feel like you are contributing to your own stock portfolio.



Exactly,

Big inceases in fees for owners and no possible growth.  The shareholders of the new Company will eventually go belly up. They will not be able to sell stock or get any bank loans.  Wait until you see how many people will walk away from their units and every other owner will pick up the tab.  This has already started.  The economy is part of the issue but this is a real death blow to the timeshare industry.  Disny will be the next to go down hill.  They have started to make changes that will really screw the current owners.  If you can't sell your timeshare values will plummet. You are better off renting for less than the annual fees.


----------



## siberiavol

I don't know the percentages but using hotels as a model corporate Marriott gets two potential major sources of revenue from franchise. The first is a franchise fee which they get from everyone flying the Marriott flag. The second is a management fee which they get if they manage the property. Some Marriotts have independent management companies.

In the new arrangement Marriott International will get a franchise fee from all MVCI properties.  The new company will get the management fees and own the unsold properties. In the Marriott quarterly they mentioned if I recall  correctly  that there were twenty three MVCI properties in active sales. I was surprised they had that many.


----------



## Fredm

siesta said:


> *I wonder about the DC program now. it originally was an attempt to increase the profit margin, but now do they see it is a failed attempt so they decided instead of swimming up stream to just spin it off? * obviously all speculation, but interesting stuff indeed.  I'm sure some of you wished they just spun it off to begin with instead of "fixing something that ain't broke" --> i.e. creating DC
> 
> obviously DC is here to stay for the time being, that is not what I was implying in case anyone misunderstood my post.



It's all part of the same plan.
This is not some reactionary event. 

The timeshare segment is no longer a growth business. So, it is being spun off from Marriott International. Just like Host and Assisted Living in the 90's. Both continue to do what they always did.

The DC is a shift from an asset based business model to a fee for service model. 
The points monitized standing inventory, thereby allowing for a lower sales/marketing/administrative cost structure.
Reacquired weeks will be profitably sold as points, thereby assuring ongoing new contract revenue, albeit not a growth market.
The fee for service model assures ongoing (and growing) revenue from the owner base. 
Operations Management fees will flow to the new company, from which franchise fees to MI will be paid. Nothing different here.

Relax. There is a difference between investing in the stock and using the timeshare.

It should not be a surprise to anyone that the system will not be expanding its resorts anytime soon, if ever.


----------



## TUGBrian

washington post article on this same topic

http://www.washingtonpost.com/wp-dyn/content/article/2011/02/14/AR2011021406410.html


----------



## jlf58

I would agree, not counting the fact that Marriott International financed all new projects. 



disnefile said:


> They have taken measures to protect Marriott International not Marriott Timeshares.  Marriott Timeshares will be a very weak company.  It will not be investment grade and the wall street journal has said that.  That is very very bad for any company and especialy in this economy.  So, yes things have changed significantly from yesterday for the worse.


----------



## CatJ114683

This seems very similar to what Marriott did when they spun off their group of senior housing (Senior Living Service or Sunrise Living).  They owned and managed many facilities and spun that bank of business off back in 2003 or 04.  They also had a distribution arm that they spun off (I think they serviced the airline industry.) With all the unsold inventory that Marriott has, the rising $$ to maintain such large expanses of property etc.etc., this makes fiscal sense.  I suspect that the Spinco will handle things in the short term, like all holding companies do, then parcel it out 5 years down the road or so....


----------



## Cobra1950

In the end when the dust is settled, each resort HOA will be free to determine whether to continue with Marriott managing the resort.  Perhaps it will become more competitive and not be uncommon for resorts to change brands with some frequency and just competitively bid it out like the cleaning service.
    This will be ok for the best resort locations, but the "dogs" like the lower end Orlando resorts will just disappear or sell out to become hotels
     Like so many other similar issues in our deteriorating culture, corporate America can again take an easy way out, ignoring the promises it made to its customers and leave them (us) with the tab.


----------



## Swice

*For Sure*

What is for sure:

If the Marriott timeshare division was barely chugging along last week, you can bet that the business just slowed down to one mph today.   

Management just applied the brakes to an already slow moving operation.   For the next ten months, the division will be stuck in neutral.    Big Marriott is not going to let them spend a dime on pencils or staples.    Expenses will be cut until the spinoff actually occurs.   

So for the most part, the operation you see today is what you can expect to see until next January.    

...Then we can only hope the economy will have improved and the timeshare bosses will then be free to actually work on the product.   

Best case:    The spinoff could work in our favor.   Timeshare spinoff will be more nimble and free to make decisions and the product could improve.

Worst case:   The economy is still in the tank over worries about federal debt and the timeshare spinoff is looking for any revenue it can find to pay the bills -- meaning our fees go up.


----------



## Numismatist

As a Frenchman's Cove topic:  I'd be really ticked if this means that Cove owners can't use adjacent Reef & Morningstar properties (or if they make us pay a fee to use them)  becuase now they are 'separate'.

The opportunity to fee us to death is increased by this.


----------



## WBP

If you read in between the lines, and listen carefully to Mr. Sorenson's reference to luxury residential real estate (his one point of referernce to the Caribbean, I believe is The Abaco Club on Winding Bay), your'e likely to discover that MVCI has done pretty well through the low; it was The Ritz-Carlton Club and Ritz-Carlton Club whole ownership (bundled under MVCI and into MVCI's profit and loss line items) that caused MVCI's financial performance to be adversely impacted.

My take: Marriott remains "smart as a fox," and amazingly skilled at protecting its assets during downturns in the economy.


----------



## timeos2

*Bad bad news for owners. Better have an exit strategy*



William J. Schneiderman said:


> If you read in between the lines, and listen carefully to Mr. Sorenson's reference to luxury residential real estate (his one point of referernce to the Caribbean, I believe is The Abaco Club on Winding Bay), your'e likely to discover that MVCI has done pretty well through the low; it was The Ritz-Carlton Club and Ritz-Carlton Club whole ownership (bundled under MVCI and into MVCI's profit and loss line items) that caused MVCI's financial performance to be adversely impacted.
> 
> My take: Marriott remains "smart as a fox," and amazingly skilled at protecting its assets during downturns in the economy.



All you have to do is look at Marriott's history in timeshares and especially hotels. When they "tire" of a resort/hotel they are quick to simply walk away. They may try to make it seem that THEY are the ones being spurned but in reality they raise fees and require upgrades - done ONLY by THEIR captive & no-bid contractors - that make staying prohibitively expensive for the Association. When the Board wisely says "no - enough!" they say "we were thrown out".  

I fail to see how a no bid contractor likely giving Marriott a rebate while they also charge at least a 15% management fee on every dollar does a better job than one with the same materials and far lower overhead will.  It is a total ripoff of the owners but Marriott sees it as easy money and will turn up the spigot once they have to survive as a standalone operation. You don't have to look far to see examples of resorts dropped even in the past - it will be easier to "justify" now which is likely a key reason for the change. And look what has happened to fees with other groups that bought out bankrupt or failing operations, pledged upgrades and then put the whole bill on the captive owners.  Again, not hard to find examples if you look. 

If having the Marriott name on my resort meant anything to me I'd be very worried about the direction they have taken in the past 5 years and where they appear to be headed.  They have taken a once prime and respected brand, sullied it beyond repair, will cut it loose from the very support that let it exist and expect it to thrive?  Fat chance. This is the start of a firesale of "assets" that barely meet the term and very bad news for timeshare owners.  If I owned I'd start thinking of how much it will cost me to get out in lost purchase expense (most of it now) vs rising fees that already are some of the highest in the industry. Simply not worth the risk anymore despite the current beauty and finish of the resorts.  Renting never looked better! Ownership never looked much worse.


----------



## davidn247

GregT said:


> Tombo,
> 
> Welcome back!  It's nice to see you again on the Marriott board -- lots more excitement now!
> 
> All,
> 
> I think we can all agree that a business model that depends upon the development and sale of new timeshare interests is getting killed by the internet -- and may be dead.
> 
> However, I think we are being hasty in announcing the demise of SpinCo, or what I am calling the new Marriott timeshare business (because it is being spun out of Marriott, and will exist as an entirely different company).
> 
> Seriously, who wouldn't want to be the CEO of a brand new company, with two of the most respected brand names in the hospitality industry?  And that brand new company comes with $1.5B worth of inventory for sale/deployment in some of the most desirable places on the planet?
> 
> And there are some recurring revenues?  And an (abused) ownership base of 400,000 owners that can be courted?  And shareholder expectators are very loowwww....
> 
> What an opportunity   ----   Plus, there are a plethora of other properties/companies that can be consolidated to make an even more formidable company -- forget developer sales and find new ways to leverage the portfolio.
> 
> So, in time....we will learn which path they pursue:
> 
> They can be a consolidator and build an entirely new company -- a truly high quality leisure company that treats its ownership base like partners and creates a model for the leisure community.
> 
> Or, they can follow the path of Wyndham and bilk their captive owners for everything they can, and use contracts to tighten the noose.
> 
> Personally, I'm glad to rid of corporate Marrriott -- the timeshare business had outlived its usefulness and it was clear that our value to them was in the past, when we purchased the week.  Hopefully, a new model can be developed that has a brighter future for all of us.
> 
> Best to all,
> 
> Greg



Fully agree. Working in Corporate World means a lot of politics to please bosses, this will now provide more transparency and put the customers/owners at the centre of the equation. Finally, by reporting separately, they will not be able to cut corners or avoid key questions like in the past.

If they play it smart, this can be a fantastic opportunity. They have the best brand in the industry and now all the flexibility to consolidate this desperate timeshare industry/market. Personnaly, I think that this announcement is not bad at all.


----------



## siberiavol

I listened to quarterly conference call and not a lot to report. They did say there would be information about  fees coming out in an SEC document around the end of second quarter.

The head of new company said they might be open to some bulk sales. I think he might have been talking about some land they own. I don't see how they could sell bulk  points unless they had certain resellers that bought on the cheap and sold retail similar to what cell phone companies do.

It seems DC enrolled owners might benefit from delays. They have more access to some of the newer properties than they would if points were selling like hot cakes.


----------



## bogey21

*Looks like no-one but me sees Marriott Spinco making good money using the RCI model; that is skimming off and renting Weeks.  Fewer and fewer available for exchanges.  More and more being rented for the benefit of Spinco.   If this stock comes out and craters, I may be a buyer.

George*


----------



## timeos2

siberiavol said:


> It seems DC enrolled owners might benefit from delays. They have more access to some of the newer properties than they would if points were selling like hot cakes.



There is no requirement that points unsold and the use they represent be given to the system for access. It doesn't do anything to improve availability to points members as all the inventory they are entitled to is what is sold & fees paid for. The Marriott holdings COULD be made available as well but why would tehy do that?  They can rent it and use it as incentives - or anything else they want. But placing it in the pool is like giving it away so they are unlikely to do that in any big way.


----------



## sharo

*Marriott timeshare spinoff does anyone know what this means?*

 Does anyone know how this will affect us 400,000 "owners"? It was a money losing area and I am worried it will be starved or owner fees will skyrocket. They say (Wall St Journal)we will be given "shares" in the new company. If the company is part of Marriott still then we are cut loose in the pool of loss????What happens to shares in the points program and those outside?


----------



## FlyerBobcat

Lots of discussion in this fairly new thread.


----------



## SueDonJ

See this thread:  Marriott to Spin Off Timeshare Business


----------



## sharo

*Marriott has cut us loose*

I agree with  previous posts that we 400,000 "owners" will see a starved
company and higher owner fees- how can this possibly be considered an
"opportunity" for growth. If it was such an "opportunity" Marriott would have kept it. Does anyone have any idea how we can salvage anything?
Should have listened to my old Dad on warnings about owning timeshares.
:annoyed:


----------



## cbdmvci

*Spin-off Direct Affects on Owners (as opposed to the corporate/business thread)*

A few examples of open questions, now *and in the future*...

Staying at Aruba Ocean Club ... separate check-in desks ... charging at Marriott resort restaurants ... etc.?

Will "vacation club" disappear from Marriott Hotels reservation brands option?  What happens to the MOD option?

Will charges at a MVCI resort paid with a Marriott card earn the same number of MR points?

When Marriott hotels rents out a club unit, who gets what share of the income, Marriott, SpinCo, Club?  For trust and non-trust resorts?

Guests at Desert Village I used to get free access to some Resort facilities.  Now you have to pay.  Will this become universal whenever a Club and a Resort share grounds?  Will the whole shared grounds thing start causing lots of daily and even eventually legal problems?

Will stays at MVCI clubs no longer qualify days for elite Marriott status? 

As ongoing customers who must eventuallysupport SpinCo's viability, do we have to worry about SpinCo have to send Marriott Hotels a check every time an owner trades for MR points for their week?  How big a check?

_I could go on and on ... but I'll let others._


----------



## wuv pooh

The apocolypse has come, sell your timeshare and buy gold  

From a business perspective the theory is that the timeshare business is hindering the total valuation of Marriott because of the lack of transparency and the unknown obligations.  By spinning it off, Marriott International should receive a higher multiple based on its growing outlook and the Timeshare business should be no worse off and the sum of the parts will be higher.  No different than the old LBO breakup guys.

From a practical perspective Mr. Marriott is not going to piss away 21% of his wealth so I don't see any cataclysm in the near term.  As mentioned they did the same thing with the HMT Reit and Senior Living.

Longer term I wish they were AAA rated like Lehman Brothers, Bear Stearns, and all the MBS that were sold  :hysterical: However, they will instantly become the market leader in their business segment the moment they are created, so they will have an opportunity to succeed and change the business.  Time will tell if they are the market leader in the buggy whip business  or the search engine business  

If you believe that the timeshare industry is dead, then this is another nail in the coffin.  If you believe that the timeshare industry is morphing from the old model into the new "destination/experience" model that the DC points is selling then this is an exciting opportunity to break new ground, consolidate old dead companies and transform the business into something better.

As always, we will end up somewhere in the middle of the extremes and I will continue to enjoy my vacations until I believe that the value is no longer there.  For now I will enjoy my upcoming week at Grande Ocean


----------



## wof45

I guess I am confused by all the comments here that do not match any of the data in the Wall Street Journal article.

TS were not a losing business.

the results for 2010 were off only 1% from 2009 and only 30% from 2007 -- this is much better than the real estate market.

The transaction is just splitting Marriott into two divisions, each with its own assets.  In this kind of transaction, there is close scrutiny of assets and costs that result in defining a market price for each part.

If you are a TS owner, you own a TS and not a part of the new or old company.

There is really  nothing new here --
except that Marriott's DC program did only 1% less in revenue in the 4th quarter than weeks did a year ago, despite all the discussion on the board that DC was totally failing from what was sold in the past.


----------



## wof45

cbdmvci said:


> Guests at Desert Village I used to get free access to some Resort facilities.  Now you have to pay.  Will this become universal whenever a Club and a Resort share grounds?  Will the whole shared grounds thing start causing lots of daily and even eventually legal problems?
> [/I]



I will just comment on this, since it is not what it seems.

The hotel is not owned by Marriott Intl, but by another owner.  DS1 payed a yearly fee to the hotel to cover the "free" sap services.

The new hotel owners decided that they wanted a much higher fee for services, and the DS1 HOA decided not to pay the fee for use since many owners didn't use any hotel services.  They did negotiate a lower fee structure, but it was no longer free for those who used the hotel.

As an owner, I'm glad they didn't pay the higher fees, since the hotel is just cutting its own throat, and why should all DS1 owners pay for this.

I don't see that the DS1 v hotel fee changes have anything to do with the split companies.


----------



## kjd

*Too much of an overreaction*

Let's not get way ahead of ourselves on this issue.  It's certainly not an abandonment before the collapse of MVCI. An "exit strategy" is a foolish notion before any facts are brought to light.  This a calculated business decision by Marriott, with their best interests in mind.  It does not portend anything but that.  There are many examples of successful spinoffs in business history.

When IBM spun off their personal computer business they did it because they no longer wanted to manufacture small computers.  They wanted to focus their attentions elsewhere.  The new company called Lenovo is doing very well and IBM is purchasing all of the computers used in their systems from Lenovo.  In fact, Lenovo might be doing better than when they were with IBM because they are concentrating on just their products.

This could very well happen with this new development.  The new timeshare company would have a single focus.  As in the case with IBM and Lenovo, Marriott could still do business with the new company giving it all of the advantages perviously enjoyed by MVCI owners.  The new company may benefit owners more than the previous one.  I am not ready to sell or engage in rumor mongering which can only drive down property values for every owner in MVCI.


----------



## equitax

There is one difference though - when people need/want out of their DC points ownerships (and Marriott is selling them as a quick scan of the Orange County land register easily reveals), "The Developer" ie spinco is allowed to levy up to USD 1.00 per point for waiving ROFR - so if you take the current turnover of ownership weeks, adjust it for the fact that the economy is not quite as bad as it was, adjust it for all the people who are still buying timeshares "direct from the developer" because they are being bullied into it by high pressure sales tactics, I think you will find that the average number of direct buyers that want out within x period of time will remain somewhat the same, with one major difference - The Developer (i.e. Spinco) now earning between 1600-3500 $ per resale vs the current $95 (currently 95$ goes to MVCI and 25$ to the resort, at least thats the case for MGR/MGV as per Condo dox)  

Maybe the actual number of DC sales is a little discouraging to Marriott, but I do give Bill and the rest of the crew over at Marriott a little more credit than that.  After all, nobody likes losing money.

I think that Spinco will be excellently positioned to get a significant piece of the resale market, because of the higher ROFR waiver fee - Let's face it, If you want to sell a 10K week, an agent charges about $2000.00, tack on ROFR waiver fee and you can see my point.

DC points owned also don't provide a tenant in common residual value in fee simple once condo associations dissolve if they are not extended.

It will be interesting to see what happens, but I don't think all is lost yet...




wof45 said:


> There is really  nothing new here --
> except that Marriott's DC program did only 1% less in revenue in the 4th quarter than weeks did a year ago, despite all the discussion on the board that DC was totally failing from what was sold in the past.


----------



## SueDonJ

cbdmvci said:


> A few examples of open questions, now *and in the future*...



None of us can predict the future so there's no telling exactly what will happen, but most of the items you've listed aren't contractually guaranteed anyway.  We can speculate how this latest move might cause future changes to them, but we could have speculated yesterday about changes to them, too.



cbdmvci said:


> ... Will "vacation club" disappear from Marriott Hotels reservation brands option?  What happens to the MOD option?



I don't know why you'd expect MVCI offerings to not be available for marriott.com rentals while they still have the Marriott name attached to them.  And as others have mentioned, the Host hotels that were spun off are still available through marriott.com.

The MOD discount is one of the things about which we could have speculated yesterday - it's not guaranteed.  But again I don't know why we should expect that it will disappear because of this action - it's a discount that's more likely to be applied when MVCI Owners rent MVCI resorts than Marriott hotel brands.



cbdmvci said:


> ... Will charges at a MVCI resort paid with a Marriott card earn the same number of MR points?
> 
> ... Will stays at MVCI clubs no longer qualify days for elite Marriott status?



Don't know about the same number of MR Points because the amount of any Points earned is determined by the Marriott Rewards stipulations and not our MVCI docs, but the FAQ from MVCI AC in Post #9 of this thread addresses this:


> How will this transaction affect my ability to trade my week for Marriott Rewards ® points?
> There will be no change in the ability to trade for Marriott Rewards ® points. *You will still receive elite credit for stays at Marriott Vacation Club and you will still receive Marriott Rewards ® points if you are renting at Marriott Vacation Club.* There will be no changes in your current point balances.


----------



## pgnewarkboy

disnefile said:


> Marriott has pretty much said this is not a good business.  Working in Corporate America and in finance for 30 years this spin off is doomed.  It will not be an investment grade company (Marriott's words, not mine) which means it can't borrow money effectively.  I would not be surprised to see the new Timeshare company file Chapter 11 in 2 years.  I know I now regret my investment.  I assume all of the investment have 0 resale value now.  In 2 or so years, you will not get credit in the Mariott hotel program for stays at timeshares, I can almost guarantee that.  The Marriott hotel company has to maximize their profits.  Would you buy under the new timeshare points program.  I am sure Marriott will spin off a huge amount of debt to the Timeshare company.  I wish I was wrong but I have seen this too many times.  Very little will change initially but mark my words in 2 or so years we as owners are screwed.



This is undoubtedly true.  A separate corporation is just that - separate.  It will have to pay for all interactions with Marriott itself.  This is being sugar coated right now for current owners in order to calm what should be a panic.  Marriott sold timeshares saying "WERE MARRIOTT!" and people bought accordingly thinking they were buying something better than "the other" timeshare companies.  How could you go wrong with the financial power and marketing power of Marriiott behind you?   That is all gone.  The new company could go out of business in one year or less. Why? Because they can no longer justify their high prices for a non-marriott product.  Nobody will pay a premium for a company that will be perceived as circling the drain.   Expansion is over.  It couldn't be clearer Marriott is out of the timeshare business.  That is all owners need to know.  They paid a premium for something they no longer have.


----------



## jerseyfinn

Well, it was always out of our hands, so I'm not gonna get hard nipples over any of this stuff.  It is however insightful that we finally see it out in the open that Marriott has been at odds with itself over what to do about timeshare in this new economic situation. This spin-off move simply demonstrates that they still don't quite know what to do, but a decision has at least been made, so I put it down as progress.

As to all of the other stuff? It really doesn't matter at this moment as we MVCI owners are all along for the ride. For all of us, it's about moving on in life and using your weeks. I'm not gonna buy into any blather or predictions as it is all *poppycock!* 

That said, some Barry reactions to what I read thus far:



> . . .I'd hazard a pretty secure bet that it will NOT be good for owners no matter what direction it takes. It will almost certainly mean even higher fees as those become the sole source of income for the company. I'm glad we decided against owning Marriott.



Love the doomsday outlook followed by the "I told you so" foot-stomp which suggests that the rest of us made a big mistake.  See ya!    



> The "new" company will be independent and could do whatever it wants to do in the long distance future.



Yep, we're all moving into uncharted territory here.  "Independent" could also turn into "competitive" , "reliable" and "worthy" given that some of the key managment folks are coming over to the spin-off and I gotta assume that they believe in the product.  That's why we owners must remain engaged with the new company and provide participation & feedback. And things could turn out not-so-good as well.  




> Marriott doesn't see timeshare as the growth business it once was. The hotel business on the other hand is a business that is seeing an uptick. Timeshare is forecast to remain flat for many years to come. Also, given their glut of inventory, it is an albatross to Marriott's other businesses.



Not only did the timeshare business slow down, it * evaporated!*   Marriott ( like the rest of us ) was unprepared  for what the recession had in store for us.  We can now see that in terms of things timeshare, Marriott lost it's nerve and it's focus as they hurriedly roll out Destinations Club which confused and angered legacy owners and has had a tepid response from the non-MVCI public. "110,00 enrolled weeks" does not a success make. It simply tells you how many weeks are enrolled and not how many folks are throwing those enrolled weeks into the internal trading queues < hint: it remains safer to stay with Interval just like agreeing with your wife is easier than telling her what you really think   )



> . . .I know I now regret my investment. I assume all of the investment have 0 resale value now. In 2 or so years, you will not get credit in the Mariott hotel program for stays at timeshares, I can almost guarantee that . . .



So what is 400,000 times zero?  Let's get real. Our timeshare product still has a value. Whether it's the value we each subjectively desire is another matter. The present economy and recession has really knocked our nation for a loop. What I do know for certain is that neither individuals or corporate big shots ( ummm like Marriott   ) know everything.  Perhaps it is more accurate to say that at this particular point in time, it's extremely difficult for we owners to establish the true value of our weeks as the ecnomy remains dysfunctional and much more time is required for the murky waters to settle out ( I fear it will be several years ).




> . . .Also, perhaps SpinCo will become aggressive and acquire Interval International since they will need a stable revenue base -- II generates $100M in revenue per quarter and is cash flow positive. We know that SpinCo will still earn reasonably strong management fees from the existing portfolio  . . .SpinCo still has the Marriott and Ritz Carlton brands to protect and will figure out a way to generate the recurring cash flow that is needed. . . .



Too early to tell, but the idea behind a spin-off is to realize specific goals/value otherwise not achievable as a whole. So why not? At least this demonstrates how innovation might indeed benefit everyone . . . I think the key ingredient here is "time" as it seems like the economy is gonna need a lot of that.



> If MVC does not provide a good product at a good price, what wold prevent an owners association from changing to another management company . . . I don't see that this announcement really changes anything in the short term, and in *the long term the total package depends on whether and when the economy recovers*.



I see the thought. BUT we MVC folks gotta figure the impact of the Trust upon who controls what at our resorts. Resorts that are not a part of the Trust are free and clear to empower their HOAs. However,  resorts at which the Trust owns the majority of inventory at a resort means that we MVCI folk do not possess the power we think we do as we can be outvoted by the Trust's majority ownership. Not everything Marriott did with Destinations was benign.  You hit the nail onthe head about the economy. If we want to gauge our ultimate timeshare destiny, it rests with an improving economy.



> . . . in the end when the dust is settled, each resort HOA will be free to determine whether to continue with Marriott managing the resort. Perhaps it will become more competitive and not be uncommon for resorts to change brands with some frequency and just competitively bid it out like the cleaning service . . .



Like I mention above, the Trust relationship at each resort is going to dictate much of what happens. But absolutely true that some MVCS resorts may become more empowered.  Likewise the door is open for the spinoff management to add other chains and companies.



> . . .From a practical perspective Mr. Marriott is not going to piss away 21% of his wealth so I don't see any cataclysm in the near term. As mentioned they did the same thing with the HMT Reit and Senior Living.



Yes. There exists a management divide   which puts all of this into motion. I'm just hoping that Mr. Marriott who has now kicked us out of the Boca house continues to allow us to stay dry beneath the cover the spinoff back porch now affords us.



> If you believe that the timeshare industry is dead, then this is another nail in the coffin. If you believe that the timeshare industry is morphing from the old model into the new "destination/experience" model that the DC points is selling then this is an exciting opportunity to break new ground, consolidate old dead companies and transform the business into something better



Well yes and no. We each have our beliefs, but what matters here are not beliefs but rather our ability as MVCI owners to find the true reality out of this fog into which our nation's rank economy has dumped all of us. TUG and opinions posted are not reality, they are subjective opinions ( just like my own words here  ). But, there's a lot of engaged owners here who bring their collective perspectives and experiences into view. This can help us better focus on how to deal with this continuously changing destination travel situation we each find ourselves in. Our fate ultimately flows from a recovering economy. The timeline remains another unknown. Both we and the spinoff managment exist in this environment.



> In the meantime, enjoy your vacation weeks at MVC or wherever you trade into.



That's one bottom line which is 100% true.

Hang in there folks. All we can do is go for the ride and see where it takes us.   We ourselves will be down in Florida for a couple of weeks. At least I now have something to talk to the GM about.

Barry


----------



## siberiavol

timeos2 said:


> There is no requirement that points unsold and the use they represent be given to the system for access. It doesn't do anything to improve availability to points members as all the inventory they are entitled to is what is sold & fees paid for. The Marriott holdings COULD be made available as well but why would tehy do that?  They can rent it and use it as incentives - or anything else they want. But placing it in the pool is like giving it away so they are unlikely to do that in any big way.



They don't have to release the trust weeks(days) but they do need some non trust inventory. I haven't purchases any points and was able to have  access to both Marco Island and Crystal Shores in platinum season for 2011 and 2012. These are prime properties if rental rates are any indication.


----------



## hotcoffee

jerseyfinn said:


> . . . If we want to gauge our ultimate timeshare destiny, it rests with an improving economy. . . .



Well, few are going to disagree with this statement.  I myself am hoping for better days.  All is certainly not gloom-and-doom.  There is always hope for the future: our political parties might someday join hands and sing Kum-bye-ya around the campfire and begin working together to shrink the deficit; those who hate us might start loving us so that we can cut our defense budget; OPEC might decide to sell their oil to us real cheap so that we can continue take our vacations (I'm sure this last point is an agenda item at all their meetings).

One of the posters in this thread believed that Marriott should have not attempted to fix something that was not broke by implementing DC.  Hmmmm.  If it wasn't broke, I wonder whether they would have implemented DC in the first place?  I know this seems shocking: but I bet that Marriott has not been in the timeshare business because they like us and have wanted to make our lives richer.

In any event, I think it will be very exciting to watch what effect this current change will have on Marriott resale values.  I'm sure the lines are forming already at all the timeshare resale brokerages.


----------



## windje2000

jerseyfinn said:


> Well, it was always out of our hands, so I'm not gonna get hard nipples over any of this stuff.  It is however insightful that we finally see it out in the open that Marriott has been at odds with itself over what to do about timeshare in this new economic situation. This spin-off move simply demonstrates that they still don't quite know what to do, but a decision has at least been made, so I put it down as progress.
> 
> As to all of the other stuff? It really doesn't matter



Marriott's core competency is brand management.  That's where it can create maximum value.  

The timeshare business requires a lot of capital.  Its cyclicality introduces considerable uncertainty to the otherwise highly predictable cash flow generated by the various Marriott brands.  As a result, Marriott's market multiple took a haircut.   Because it owned timeshare.  By spinning it off, the value of the sum of the parts will exceed its value as a combined business.  

That's old news to Marriott.  I'll bet a long succession of Wall Street slicksters have made that presentation to Marriott management.  Yet, Marriott management kept timeshare around despite that attribute.  Why?  Because it generated huge 20% pretax margins.  They could live with the capital intensity and the cycles.  They were rewarded with huge pretax margins.  And they liked the way timeshare worked with the hotel/resort business.

But the latest cycle (and the $750M earnings hit) doomed timeshare as part of the Marriott business.  

Would this divisive reorg (spin-off) have happened if sales had rebounded with the advent of Dclub?  My view is that it would have. It gets back to what their core competency is.  Brand management.  Not real estate development.  

Historically, Marriott has exited Host, the assisted living business and now timeshare. 

Could they have sold the timeshare business?  It has a built in cash flow, locked in customers and a substantial inventory of finished goods.  It owns property in various stages of the development pipeline in some good locations.  The answer is yes, it was saleable.  

They could have sold it to a buyout shop, or a Carl Icahn or a buyer of a similar ilk.  I'd bet any of the other big timeshare players would have bought it.  

But they didn't go that route.  The name is staying on the door.  The relationships with the hotel/resort business continue.  As long as the Marriott family controls 21% of the stock, it effectively controls Spinco's future since an acquirer can't get enough stock to consolidate the tax returns. 

Marriott developed the timeshare business in tandem with its hotel resort business in many locations. 

Would they want a competitor literally sharing the real estate with them?  I think not.  

Would they want to sever their relationship with half a million of their most loyal customers?  I think not.  

And they aren't.  Notwithstanding that some of those customers are less than happy with the big M.  That is fixable.  If they want to fix it.  Will Weiscz and Co. be looking to mend fences with any owner who is less than enchanted with Spinco?  I would hope so.  They are the best customers.

We should all recognize that the sky has not fallen.  At least not yet.  

View the glass as at least half full.  Take a long drink, put your feet up and enjoy your vacation at what are truly magnificent resorts.  But keep your eyes and ears open.  

I'm with Barry for now.  Que sera sera.


----------



## funtime

We tuggers pride ourselves on not buying retail, urging people to rescind on retail contracts, looking for great deals on ebay - and let's face it - pinching our pennies.  We also look to the large corporations such as Marriott to keep building new resorts so that we can have more places to trade into and to enjoy.  Well it is kind of obvious but the brand new big resorts thrived when retail purchasors happily bought units.  We current owners who trade in were just the apparent unintended beneficiaries of new resorts.  

There has to be a new model - I do not have the answers but hopefully the new model can benefit from owner input - after all we have years of experience with the product.  Funtime


----------



## turnberry

*New Economic Cycle - New capital problem*

Hey Folks --- This operations vs capital dilemma is not new for Marriott.  So, before jumping to conclusions as to eventualities, let's try some historical perspective:

Those of us who are Marriott hotel junkies remember it was 20 years ago and three economic cycles ago that the old Marriott itself was split into two new companies for --- guess what --- the purpose of isolating capital debt (caused at that time mainly by hotel overbuilding).

That plan had two parts and successfully solved the company's capital problems of the era:

Part 1. The "old" Marriott was split into two new entities: 

A. The new Marriott International became the hotel operating and franchising company (and developer/manager of the MVCI/MORI resorts).

B. The new Host-Marriott became - among other things - the debtor of the company's capital debt.  

Part 2.  The company moved into the hotel franchising business big time -- which brought many new players into the fold to manage AND INCUR DEBT to build, open and/or manage Marriott-branded hotels (and allowed multi-branding of hotels with varying amenities).

This two-step initiative was designed - and was successful - in doing one of the things that Marriott is now attempting to do with MVCI/MORI resorts --- to isolate and service resort development debt.

If that part was successful with the hotels 20 years ago - Marriott is probably thinking - why not try it with the timeshare system?

What goes around comes around!


----------



## timeos2

funtime said:


> We tuggers pride ourselves on not buying retail, urging people to rescind on retail contracts, looking for great deals on ebay - and let's face it - pinching our pennies.  We also look to the large corporations such as Marriott to keep building new resorts so that we can have more places to trade into and to enjoy.  Well it is kind of obvious but the brand new big resorts thrived when retail purchasors happily bought units.  We current owners who trade in were just the apparent unintended beneficiaries of new resorts.
> 
> There has to be a new model - I do not have the answers but hopefully the new model can benefit from owner input - after all we have years of experience with the product.  Funtime



No one is building new timeshare units - just recycling what is already a massive glut of largely unsellable inventory.  Even if Marriott wasn't spinning off what they appear to feel is a losing operation they weren't about to plan/build anything new anytime soon.  Even the biggest groups can't afford to build inventory and to be realistic if there is never another new timeshare built anywhere it would still leave us with too many overall.  It just isn't justified and in most cases cannot get the incredible amount of financing needed.  

The "new model" should be improvements to the existing resorts to upgrade them to today's standards rather than unneeded (and unwanted) "bigger and better" (which all too often really isn't) next door or down the block.  Let the owners take over and it will happen in most cases. Let the model be to sell what exists at a reasonable price level not a need to pay to move it on to a new owner. When THAT occurs we'll be ready to maybe talk about a few new units here or there (and NOT LV or Orlando Hilton!)


----------



## yumdrey

funtime said:


> We tuggers pride ourselves on not buying retail, urging people to rescind on retail contracts, looking for great deals on ebay - and let's face it - pinching our pennies.



Actually, I thought the same thing yesterday, right after I read that article.
We (tuggers) made developers suffer


----------



## dioxide45

cbdmvci said:


> A few examples of open questions, now *and in the future*...
> 
> Staying at Aruba Ocean Club ... separate check-in desks ... charging at Marriott resort restaurants ... etc.?
> 
> Will "vacation club" disappear from Marriott Hotels reservation brands option?  What happens to the MOD option?



I don't see why it would dissapear. All those hotels out there that are owned by other companies and investors and carry the Marriott brand are available on Marriott.com. This will be the same situation.



> Will charges at a MVCI resort paid with a Marriott card earn the same number of MR points?



I think the Owner Advocate answered this question.



> When Marriott hotels rents out a club unit, who gets what share of the income, Marriott, SpinCo, Club?  For trust and non-trust resorts?



Marriott gets a franchising and licensing fee but income would go to SpinCo.



> Guests at Desert Village I used to get free access to some Resort facilities.  Now you have to pay.  Will this become universal whenever a Club and a Resort share grounds?  Will the whole shared grounds thing start causing lots of daily and even eventually legal problems?



This won't change since those deals are with the local hotel owners and not with Marriott International



> Will stays at MVCI clubs no longer qualify days for elite Marriott status?



I think the Owner Advocate answered this question too.



> As ongoing customers who must eventually support SpinCo's viability, do we have to worry about SpinCo have to send Marriott Hotels a check every time an owner trades for MR points for their week?  How big a check?



Marriott currently sells points to many companies to offer up. Chase buys points from Marriott so they can offer them to people who use their credit cards. I am sure the same thing will happen here. When an owner trades for MR points, that week will be rented out and the revenue should help cover the cost of those points. I would think this currently happens today.



> _I could go on and on ... but I'll let others._


----------



## dioxide45

*Bill's Blog on This*

Video on Bill's blog today.


----------



## dioxide45

*Not much will change*

Sure there can be some doom and gloom thoughts. I even had some yesterday, but in the end, not much will likely change for us.

The separation allows Marriott International to shed some junk from it's books and no longer be held down with the debt and inventory it is having to carry with MVCI.

MVCI will become a new company and should be able to hold it's own. If it needs to file chapter 11 to restructure it's debt it will do so. We know now that chapter 11 isn't really a bad thing in many cases. It allows companies to restructure debt and come out stronger in the end. Shareholders don't usually make out well and usually lose everything, but for owners and customers there really shouldn't be much change.


----------



## lynne1956

*Marriott to sell off timeshare business??*

I just saw a blurb about this on USA Today email.  Anyone have anymore information?
Lynne

Marriott to spin off timeshare business
By Barbara De Lollis, USA TODAY


The Wall Street Journal reports that Marriott International will spin off its timeshare business, a once-bright profit source that faded during the recession.

The spin-off should happen by the end of 2011, taking with it 10% of Marriott's total revenue.

"We've never really been interested in walking away from this business," Marriott Chief Operating Officer Arne Sorenson told the Journal on Monday. "But the last few years have been extraordinarily difficult. This recession was harder on the timeshare business than last recessions."

For Marriott, key industry measures have been rebounding this year after the recession thanks to increased business travel - even exceeding expectations, the article notes.

But the leisure-traveler-oriented timeshare business has continued to lag as sales have slowed and buyers face bigger obstacles meeting stricter financing standards. Marriott's timeshare revenue sank by about 30% since 2007, the article says.

The spin-off will create the world's largest standalone timeshare business, the Journal tells us, with around $1.5 billion in unsold assets and 400,000 owners. It owns 71 properties with 33,000 rooms.


----------



## timeos2

lynne1956 said:


> &quot;We've never really been interested in walking away from this business,&quot; Marriott Chief Operating Officer Arne Sorenson told the Journal on Monday. &quot;But the last few years have been extraordinarily difficult. This recession was harder on the timeshare business than last recessions.&quot;



 Wow. Quite a quote. Left implied but unsaid in "We've never really been interested in walking away from this business" is BUT NOW WE ARE!    Wow.


----------



## windje2000

timeos2 said:


> Wow. Quite a quote. Left implied but unsaid in "We've never really been interested in walking away from this business" is BUT NOW WE ARE!    Wow.



Actually, they aren't 'walking away' from this business.  

The Marriott name is still on it and they will control it, by virtue of the franchise agreements that directly control the use of the name and 'indirectly' the management of the resorts.

They will have the ability to prevent anyone from acquiring it by terms of the agreement for the use of the name.

They will have family ownership of 21% which also serves to dissuade potential buyers for tax reasons.

What they accomplish is putting just as much distance as necessary between Marriott and the timeshare business to 

1.  get timeshare's numbers off their books, and 

2.  move timeshare to its hotel model.

If they wanted to walk, they would have sold it lock stock and barrel.


----------



## jlf58

The main message is "It's such a good idea, I wonder why we didn't decide to do it years ago".  




dioxide45 said:


> Video on Bill's blog today.


----------



## tombo

windje2000 said:


> Actually, they aren't 'walking away' from this business.
> 
> 
> If they wanted to walk, they would have sold it lock stock and barrel.



When the official statement is:
""We've never really been interested in walking away from this business," Marriott Chief Operating Officer Arne Sorenson told the Journal on Monday. "But the last few years have been extraordinarily difficult. This recession was harder on the timeshare business than last recessions."

The translation is yes they are walking away. He didn't say times have been tough but we are standing by our timeshare division. He didn't say we are investing more capital into the timeshare division because it is going to be an integral part of Marriott Inc for many years to come. He said we were never interested in walking away from this business BUT..............  there is no other way to read that other than they are walking away. 

If your spouse says I never planned on divorcing you BUT the last few years.........., you better hire a good divorce lawyer. they are not telling you that things will continue as they always have, they are telling you the good times are over.

Now as far as selling it, the best way to do that is to create a separate company which can easliy be sold.The stock is already in place, they have valued it and the assets and liabilities, and a sale would be simple for a stand alone timeshare company.  If a buyer comes a knocking, the Marriott Timeshare division will be sold IMO. Whether they sell it with the rights to retain the Marriott name as a franchisee is the multi-million dollar question.


----------



## disnefile

tombo said:


> When the official statement is:
> ""We've never really been interested in walking away from this business," Marriott Chief Operating Officer Arne Sorenson told the Journal on Monday. "But the last few years have been extraordinarily difficult. This recession was harder on the timeshare business than last recessions."
> 
> The translation is yes they are walking away. He didn't say times have been tough but we are standing by our timeshare division. He didn't say we are investing more capital into the timeshare division because it is going to be an integral part of Marriott Inc for many years to come. He said we were never interested in walking away from this business BUT..............  there is no other way to read that other than they are walking away.
> 
> If your spouse says I never planned on divorcing you BUT the last few years.........., you better hire a good divorce lawyer. they are not telling you that things will continue as they always have, they are telling you the good times are over.
> 
> Now as far as selling it, the best way to do that is to create a separate company which can easliy be sold.The stock is already in place, they have valued it and the assets and liabilities, and a sale would be simple for a stand alone timeshare company.  If a buyer comes a knocking, the Marriott Timeshare division will be sold IMO. Whether they sell it with the rights to retain the Marriott name as a franchisee is the multi-million dollar question.



I agree.  You have great insight on this matter.  What I am afraid of is really the increases we will see if maintenance fees.  I have family that is thinking of walking away from Ocean Pointe because of the high fees and I don't blame them.  You can rent for less in many places.  This will be an option I  will consider for Harbor Lake.  I can get a week for $299. and the fees are now over $900.  This is going to happen more and more unless prices firm up or demand increases.  I do really think timeshares are a dead business.  I was commited at one time but will walk when I feel it is in my best interest.  I can't believe what Newport Coast and Palm Desert resales are going for and they are two of the best locations.


----------



## windje2000

tombo said:


> When the official statement is:
> ""We've never really been interested in walking away from this business," Marriott Chief Operating Officer Arne Sorenson told the Journal on Monday. "But the last few years have been extraordinarily difficult. This recession was harder on the timeshare business than last recessions."
> 
> The translation is yes they are walking away. He didn't say times have been tough but we are standing by our timeshare division. He didn't say we are investing more capital into the timeshare division because it is going to be an integral part of Marriott Inc for many years to come. He said we were never interested in walking away from this business BUT..............  there is no other way to read that other than they are walking away.
> 
> If your spouse says I never planned on divorcing you BUT the last few years.........., you better hire a good divorce lawyer. they are not telling you that things will continue as they always have, they are telling you the good times are over.
> 
> Now as far as selling it, the best way to do that is to create a separate company which can easliy be sold.The stock is already in place, they have valued it and the assets and liabilities, and a sale would be simple for a stand alone timeshare company.  If a buyer comes a knocking, the Marriott Timeshare division will be sold IMO. Whether they sell it with the rights to retain the Marriott name as a franchisee is the multi-million dollar question.



Opinions will vary.  

If the ultimate objective is to sell it, my view would be that creating a new publicly traded company is probably the most inefficient way to accomplish that goal.  One retains far more flexibility in deal structure from a tax, accounting and legal perspective, assets and liabilities included and excluded, etc. by keeping the business as is and simply calling Wall Street, having some deal books put together and seeing what kind of offers and what kinds of structures it receives from what kinds of buyers. 

Having a public market for the stock also places an objective valuation on the business.  That is probably the last thing anyone who is selling real estate at 2.5 times what it costs to build wants if they are going to sell the business as a whole.

Actions speak louder to me than words.  Since the introduction of DClub, everything they have done points to restructuring / repositioning the timeshare business into the existing hotel/resort model, where they manage the operation and brand, but don't own or develop the real estate.


----------



## bogey21

windje2000 said:


> What they accomplish is putting just as much distance as necessary between Marriott and the timeshare business to
> 
> 1.  get timeshare's numbers off their books, and
> 
> 2.  move timeshare to its hotel model.



*Agree.  IMO Spinco will become a rental machine ala RCI within 2 years. *


----------



## tombo

windje2000 said:


> Opinions will vary.
> 
> If the ultimate objective is to sell it, my view would be that creating a new publicly traded company is probably the most inefficient way to accomplish that goal.  One retains far more flexibility in deal structure from a tax, accounting and legal perspective, assets and liabilities included and excluded, etc. by keeping the business as is and simply calling Wall Street, having some deal books put together and seeing what kind of offers and what kinds of structures it receives from what kinds of buyers.
> 
> Having a public market for the stock also places an objective valuation on the business.  That is probably the last thing anyone who is selling real estate at 2.5 times what it costs to build wants if they are going to sell the business as a whole.
> 
> Actions speak louder to me than words.  Since the introduction of DClub, everything they have done points to restructuring / repositioning the timeshare business into the existing hotel/resort model, where they manage the operation and brand, but don't own or develop the real estate.



But by forming a separate company for a business Marriott no longer wants they have virtually placed a corporatefor sale sign on it. It tell all that the timeshare division is no longer something Marriott wants to fool with. Much easier than trying to quietly spread the word that it is for sale. By having separate fiancial report on the timeshare division it might make it harder to sell for a good price, but I feel sure that Marriott doubts they can find a buyer for 1.5 billion in unsold timeshare inventory no matter what they do. Finding a buyer for this is kind of like a hail Mary pass. Little chance of success, but what the heck it is worth a try.

There are few if any who will be interested in buying anything associated with timeshares unless sales increase and the division is profitable. So if the profits and sales don't increase in the next few years, and if no buyer can be found, it is simple to file bankruptcy on the timeshare stand alone business without involving the hotel division. 

I am sure Marriott discussed many ways to get rid of the timeshares before settling on this. By separating the timeshare division from marriott they have protected themselves, their assetts, and their stock holders from a possible future chapter 11 filing if things don't improve. They have also essentially announced it is for sale in case there are interested parties. Either way if things don't improve and they can't find a buyer they have protected their core profitable hotel business that they want to keep while giving themselves several potential options to divest themselves of the unwanted timeshare division.


----------



## windje2000

tombo said:


> But by forming a separate company for a business Marriott no longer wants they have virtually placed a corporatefor sale sign on it. It tell all that the timeshare division is no longer something Marriott wants to fool with. *Much easier than trying to quietly spread the word that it is for sale.*
> 
> It is much easier to call Goldman and have them put together a deal book to sell it.
> 
> By having separate fiancial report on the timeshare division it might make it harder to sell for a good price,
> 
> The internal numbers are already totally separate and audited.
> 
> but I feel sure that Marriott doubts they can find a buyer for 1.5 billion in unsold timeshare inventory no matter what they do.
> 
> Selling the inventory will take a few years - no question about it.  But will they make money doing it?  You betcha.
> 
> Finding a buyer for this is kind of like a hail Mary pass. Little chance of success, but what the heck it is worth a try.
> 
> Think Starwood or Westgate wouldn't buy it and integrate it with existing operations?
> 
> If they wouldn't, the LBO shops have proved there's a buyer for just about anything, at the right price.
> 
> There are few if any who will be interested in buying anything associated with timeshares unless sales increase and the division is profitable.
> 
> It is currently profitable and based on the last presentation to security analysts expected to throw off about $625 - 675 M free cash flow through 2013.
> 
> See pages numbered 63 on the lower right side of the page - end LINK
> 
> 
> So if the profits and sales don't increase in the next few years, and if no buyer can be found, it is simple to file bankruptcy on the timeshare stand alone business without involving the hotel division. I am sure Marriott discussed many ways to get rid of the timeshares before settling on this. By separating the timeshare division from marriott they have protected themselves, their assetts, and their stock holders from a possible future chapter 11 filing if things don't improve.
> 
> They are separating the brand management business from the cyclical influence of the timeshare development business.  Chapter XI is pretty unlikely for a profitable business generating substantial free cash flow.
> 
> They have also essentially announced it is for sale in case there are interested parties.
> 
> This is not the optimal way one makes that kind of announcement or one disposes of a business segment.
> 
> Either way if things don't improve and they can't find a buyer they have protected their core profitable hotel business that they want to keep while giving themselves several potential options to divest themselves of the unwanted timeshare division.



I guess we'll just disagree.  Time will tell.


----------



## timeos2

disnefile said:


> I agree.  You have great insight on this matter.  What I am afraid of is really the increases we will see if maintenance fees.  I have family that is thinking of walking away from Ocean Pointe because of the high fees and I don't blame them.  You can rent for less in many places.  This will be an option I  will consider for Harbor Lake.  I can get a week for $299. and the fees are now over $900.  This is going to happen more and more unless prices firm up or demand increases.  I do really think timeshares are a dead business.  I was commited at one time but will walk when I feel it is in my best interest.  I can't believe what Newport Coast and Palm Desert resales are going for and they are two of the best locations.



Maintenance fees are already the Achilles' heel of Marriott and many other branded timeshares as even with the supposed extra level of quality - not even there in many cases as resort ungracefully age - the value for the fees being required just isn't there.  Simply renting trumps any type of much riskier ownership now.  And unfortunately as a stand alone fees are destined only to rise even more as they will be virtually the sole income for the whole company!  Not a good time to hitch your star to this obviously orphaned group. If it was a money maker they wouldn't be planning to, in their own words, walk away (even though they hadn't PLANNED on that!). You have things well scoped out.


----------



## timeos2

*All signs are there. They can be read differently so which do you piut YOUR money on?*



windje2000 said:


> Actions speak louder to me than words.  Since the introduction of DClub, everything they have done points to restructuring / repositioning the timeshare business into the existing hotel/resort model, where they manage the operation and brand, but don't own or develop the real estate.



Actions DO speak volumes. And the recent actions say they can't get rid of this albatross fast enough!  That quote really says it all. We don't WANT to walk away, didn't PLAN to walk away BUT we're walking away. Those words speak clearly to future actions and are ignored at your extreme risk as an owner. Tombo, as he often seems to do, has it nailed.  We're only messengers of bad news. If you read it differently it's your risk.  My reading is totally opposite from what you seem to believe - it will most likely shake out somewhere between the two views  but I'll bet closer to Tombo's analysis in the next 5 years. 

Like the DC fiasco, these are not good times to be a Marriott owner/believer.


----------



## littlestar

I'm wondering if Wyndham is next to go stand alone on timeshare business:
http://www.benzinga.com/analyst-rat...mments-on-wyndham-worldwide-wyn#ixzz1E85Q2OZM

Interesting stuff.


----------



## timeos2

littlestar said:


> I'm wondering if Wyndham is next to go stand alone on timeshare business:
> 
> http://www.benzinga.com/analyst-rat.../02/861932/deutsche-bank-comments-on-wyndham-
> 
> Interesting stuff.



Of course it's possible but less likely as they already seem to jave a model of relative independent operation that works largely based on management rather than new sales. Sales at Wyndham may face big changes and what they really need is to turn operations over to independent owners at the resorts. Hopefully that will occur and that system will remain one of the truly great values, at resale purchase, in all of timeshare.  If sales wins control it may implode spectacularly. It appears operations (the growth is from new management contracts NOT new buildings) has the edge in that situation so far at Wyndham....
Interesting times in all of timeshare.


----------



## SueDonJ

It's interesting how TUGgers cherry-pick select quotes to bolster their position, isn't it?  If anyone is interested in viewing ALL of Marriott's quotes the transcript from the conference call can be found here at seekingalpha.com.  The Q&A session following is worth a read, too.

There's no doubt that we have good reason to be concerned about the future of Marriott timeshares.  But I don't agree that it's time to sound the death knoll.  Marriott's made a logical, rational business decision here similar to others in their history that have strengthened their offerings.  This bears watching, of course, but the economy has been and will continue to be the primary driver of all timeshare business.

These are the conference call quotes that I find most interesting:

Arne Sorenson:  "Our Timeshare business had a great 2010, rolling out the Marriott Vacation Club Destinations Points Program to great success, providing owners with greater flexibility and choice. And the business continued to right-size its overhead as well as its sales and marketing costs. And for Timeshare, bigger changes are in the offing. Last night, as you know, we announced a plan to divide the company's Lodging and Timeshare businesses into two separate publicly traded companies through a special tax-free dividend to our shareholders. While many of you might first think this is Marriott International exiting the Timeshare business, we do not view it that way. We see it as setting up a platform for the Timeshare business still linked to the Marriott and Ritz-Carlton brands to grow faster with independent capitalization but still adding loyal Marriott customers as they grow."

...

"For more about the business, I've asked Steve Weisz, the future CEO of the new Timeshare company, to talk to you a bit about MVCI's prospects. A 37-year Marriott veteran, Steve is a tremendous leader, understands this business very well and has done an outstanding job in his almost 14 years at the MVCI helm."

Stephen Weisz:  "While we aren't naming the new company today, we know that when we do, it will include the name Marriott because of the tremendous competitive advantage the name conveys. In fact, we will have the exclusive rights to both the Ritz-Carlton and Marriott names as they apply to the Timeshare business under a long-term agreement, for which we will pay a franchise fee to Marriott. At the same time, we will also be able to develop and operate Timeshare resorts under other brand names."

...

"Bill Shaw, who is retiring as Vice Chairman of Marriott at the end of March, will become Chairman of the Board of our new public Timeshare company. Bill's strong leadership, business and finance acumen and core belief in Marriott culture will serve our public shareholders well. Debbie Marriott Harrison, Mr. Marriott's daughter, will also serve on our Board of Directors. The Timeshare business is highly regulated, and Debbie's experience in corporate affairs at Marriott International makes her a great addition to the board."

...

"Looking further ahead, while we don't expect the new company to be investment-grade in the near term, we do expect that it will continue to securitize its consumer notes receivable and should require little additional incremental capital. We believe we will have the economic strength and flexibility to weather further economic cycles as well as grow over time."

And from this reuters.com article, "... After a special dividend, the Marriott family is expected to hold around 21 percent of the outstanding common stock of each company."

So Marriott is saying that they're spinning off the timeshare business in an effort to focus better solely on what it needs to prosper; they're putting strong, effective Marriott, Int'l leaders including a Marriott family member into position in the new company, and they intend to hold an equal percentage of ownership in the new company as they hold in Marriott, Int'l.  Those are positive indicators, IMO.


----------



## littlestar

I enjoy my Wyndham points membership/resorts, but the Marriott quality at Marriott timeshare resorts is extra special.  I hope Marriott makes a success out of the spin off because I'd sure miss staying in and at Marriott Vacation Club resorts with the quality i've grown to love.


----------



## jlf58

Thats makes no sense. It's a process and this is the first step in a process. They will now be in a position to florish, fail or sell, none of which will hurt Marriott. 



If they wanted to walk, they would have sold it lock stock and barrel.[/QUOTE]


----------



## SueDonJ

timeos2 said:


> Of course it's possible but less likely as they already seem to jave a model of relative independent operation that works largely based on management rather than new sales. Sales at Wyndham may face big changes and what they really need is to turn operations over to independent owners at the resorts. Hopefully that will occur and that system will remain one of the truly great values, at resale purchase, in all of timeshare.  If sales wins control it may implode spectacularly. It appears operations (the growth is from new management contracts NOT new buildings) has the edge in that situation so far at Wyndham....
> Interesting times in all of timeshare.



John, what it comes down to is that some of us don't WANT a 100% owner-controlled timeshare!  We bought Marriott specifically for the brand standard and hotel relationship, knowing full well that it will cost us more in maintenance and management fees (as opposed to the timeshare model you prefer, with less developer/manager oversight and fewer amenities, appointments and fees.)  We've had this discussion before and it's worth saying again - there is no one ideal model of timeshare to fit every owner's preferences or budgets.



littlestar said:


> I enjoy my Wyndham points membership/resorts, but the Marriott quality at Marriott timeshare resorts is extra special.  I hope Marriott makes a success out of the spin off because I'd sure miss staying in and at Marriott Vacation Club resorts with the quality i've grown to love.



Yep, I agree completely about what Marriott offers, and that's why I'm encouraged by their efforts to branch out into the more-flexible DC system, and to stem their timeshare business' drag-down effect in this economy on Marriott, Int'l.


----------



## timeos2

SueDonJ said:


> John, what it comes down to is that some of us don't WANT a 100% owner-controlled timeshare!  We bought Marriott specifically for the brand standard and hotel relationship, knowing full well that it will cost us more in maintenance and management fees (as opposed to the timeshare model you prefer, with less developer/manager oversight and fewer amenities, appointments and fees.)  We've had this discussion before and it's worth saying again - there is no one ideal model of timeshare to fit every owner's preferences or budgets.
> 
> 
> 
> Yep, I agree completely about what Marriott offers, and that's why I'm encouraged by their efforts to branch out into the more-flexible DC system, and to stem their timeshare business' drag-down effect in this economy on Marriott, Int'l.



Owner controlled certainly does not mean it can't also be a Marriott. It does mean they would be challenged to offer real value to owners vs simply setting the corporate desire for return and billing owners to reach it. It would mean competitive bids for services - to the required standards - to get best value for the dollar spent vs imposed no bid contracts with often obscene profits & 15% overhead - all charged to owners because  the Board doesn't question it - they benefit from it! 

Not having Owner vs Corporate control leads to out-of-control fees and ultimately can destroy the value of your purchase. I don't agree with your view at all but I fully agree that it is your right to have it.  I hope we can agree to be in disagreement on that point.


----------



## camachinist

As Mr. Weisz apparently currently sits on the BOD of a consumer feedback firm, Mindshare Technologies, since 2004, one might ponder the significance of that in light of Marriott's/MVCI's traditional (lack of) responsiveness to customer feedback as experienced at all levels of timeshare ownership. 

Is the 'advocate' here on TUG a sign of change from the traditional stance of Marriott not directly communicating with customer groups like TUG? Is that presence part of the transition to the spun-off timeshare company?

I always wondered why Marriott didn't integrate the clunky timeshare reservation system into the smooth and seemless MARSHA they use for hotel reservations. Now it makes more sense. 

I have no opinion about the change but am watching rental prices closely. So far, prime weeks at NCV are still going for 2X MF's so I'm not complaining. Gold weeks are down from traditional highs but I'm blaming the economy for that. Also, there are a lot more rental weeks on the market than in the past, perhaps partly due to the resort being built out as well as the sluggish economy in some sectors. For me, irrespective of sunk costs, it's still a viable vehicle for vacations and income. Time will tell if the changes will affect that opinion or not. 

Thanks to TUG for bringing this change to light. As a MAR shareholder, I'm sure I would have learned about it eventually, but my focus has been elsewhere.


----------



## SueDonJ

timeos2 said:


> Owner controlled certainly does not mean it can't also be a Marriott. It does mean they would be challenged to offer real value to owners vs simply setting the corporate desire for return and billing owners to reach it. It would mean competitive bids for services - to the required standards - to get best value for the dollar spent vs imposed no bid contracts with often obscene profits & 15% overhead - all charged to owners because  the Board doesn't question it - they benefit from it!
> 
> Not having Owner vs Corporate control leads to out-of-control fees and ultimately can destroy the value of your purchase. I don't agree with your view at all but I fully agree that it is your right to have it.  I hope we can agree to be in disagreement on that point.



Oh sure, I don't think we're arguing about this, just don't see things the same way!  No harm, no foul.  That's what's great about timeshare variety, we both can have what we want.   

If it was possible to have the best of Marriott's offerings without the level of control that Marriott holds and exerts, then like you I'd be all for more owner input and control.  But that's not a choice we're given.  So if my choice is either a Marriott resort with all the inherent good and bad, or a non-Marriott resort with more owner input and control, I'll take the Marriott.


----------



## Werner Weiss

Wall Street likes "pure play" companies. The main goal is to increase overall shareholder equity. This is a case where the sum of the parts is expected to be more than if Marriott had been left whole.

Here's a summary posted at CityBiz Real Estate: Analyst: Marriott's Timeshare Spin-Off Perk for Shareholders

The good thing for us, as owners of Marriott weeks (or DC points), is that nobody wants the Marriott Vacation Club of 2012 and beyond to look any different to current and prospective owners than it does today — and certainly nobody wants the spinoff to fail.

MVCI has been run as separate division within Marriott International. Now it will be "more separate," with its own shareholders, directors, and executive management that does not answer to Marriott International. 

The spinoff, if properly managed, has the opportunity to thrive when consumer confidence improves. Except in recent years, Marriott's timeshare business was a profitable part of Marriott International.

Ideally, cut lose from the parent company, the spinoff will be more nimble and better positioned to work with non-Marriott entities if there are business opportunities. I think we will see new locations developed in partnership with developers who have access to capital.

I'm not worried about the beautiful resorts where I own weeks or the viability of the spinoff to continue the high level of quality to which we've become accustomed.

I realize that some people are worried that this is bad news. I'm not one of them.


----------



## windje2000

littlestar said:


> I'm wondering if Wyndham is next to go stand alone on timeshare business:
> http://www.benzinga.com/analyst-rat...mments-on-wyndham-worldwide-wyn#ixzz1E85Q2OZM
> 
> Interesting stuff.



Equally interesting is that IIRC, Deutsche Bank is advising Marriott on this spin off.


----------



## timeos2

SueDonJ said:


> If it was possible to have the best of Marriott's offerings without the level of control that Marriott holds and exerts, then like you I'd be all for more owner input and control.  But that's not a choice we're given.  So if my choice is either a Marriott resort with all the inherent good and bad, or a non-Marriott resort with more owner input and control, I'll take the Marriott.



 Ah but you are! Press to get real owners as Board candidates & work to get them elected. Once they have the majority things can be done for the owners vs the Marriott licensing agency.  That would be a much better outcome for owners.


----------



## timeos2

Werner Weiss said:


> I'm not worried about the beautiful resorts where I own weeks or the viability of the spinoff to continue the high level of quality to which we've become accustomed.
> 
> I realize that some people are worried that this is bad news. I'm not one of them.



 I wouldn't worry about resort quality as if they are to keep the M name on the doors they must meet whatever those are. The worry is how do you get there. What cost to license the M? What contractors are you forced to pay far higher then prevailing rates for maintenance & upgrades on a no bid contract vs a competitive bid process for the exact same result at a (usually) better rate? What are the fees going to be when they know you want that name and they can charge whatever they want and with fees the only income for what will now be your mother company? How long before they exceed even the highest going rental values in the top times - forget the slightly off season or worse that get hit even harder (and may well start to default in droves)?    That is the worry not the look & feel of the resorts. The costs are what will kill value.


----------



## SueDonJ

timeos2 said:


> Ah but you are! Press to get real owners as Board candidates & work to get them elected. Once they have the majority things can be done for the owners vs the Marriott licensing agency.  That would be a much better outcome for owners.



Hmmmm.  For the last few elections at both my resorts, the Board candidates have all been owners and there wasn't anything in their bios that pointed to them as obvious Marriott plants.  It's possible, sure, but I think it's more possible that if an Owner loves the resort/their ownership enough to run for the position, then chances are the Owner loves Marriott, too.  Heck, I'd consider a run but I'd hate to have to give up the "free" voice I have here on TUG.  (Plus it's for sure that there others whose professional expertise would serve the Board and Owners much better than I could.  And it's much more certain that if the majority ownership thinks like most of TUG does that cost-saving is Priority One, I wouldn't have a chance!)

In a lot of these discussions you mention the price differential of goods if we weren't hostage to Marriott's choice of vendors/contractors.  Sure, Marriott demands a certain standard and in some cases will not allow the Board to determine choices.  (I think this happened with at least one aspect of Aruba Ocean Club's recent refurb, where Marriott contracted with a local artist for very specific, expensive chandeliers for the lobby.  The product was chosen by Marriott for its uniqueness which satisfies the brand standard set by Marriott; it doesn't appear the Board was asked or allowed to research less-expensive alternatives.)  But there are instances where the Board can exert influence and does - SurfWatch is undergoing a refurb now and the Board located a Hilton Head resident who is renovating the existing TV cabinets for $100 each.  That's a substantial savings from the $800 new cabinets that were recommended.

It's a balancing act between owners and Marriott, with Marriott holding most of the cards.  If you want their name on the door and all the related benefits of the brand, you can push only so far - which is not nearly as far as what's allowed with the type of ownership/oversight you prefer.


----------



## MALC9990

*Clunky timeshare reservation system ?*



camachinist said:


> As Mr. Weisz apparently currently sits on the BOD of a consumer feedback firm, Mindshare Technologies, since 2004, one might ponder the significance of that in light of Marriott's/MVCI's traditional (lack of) responsiveness to customer feedback as experienced at all levels of timeshare ownership.
> 
> Is the 'advocate' here on TUG a sign of change from the traditional stance of Marriott not directly communicating with customer groups like TUG? Is that presence part of the transition to the spun-off timeshare company?
> 
> I always wondered why Marriott didn't integrate the clunky timeshare reservation system into the smooth and seemless MARSHA they use for hotel reservations. Now it makes more sense.
> 
> I have no opinion about the change but am watching rental prices closely. So far, prime weeks at NCV are still going for 2X MF's so I'm not complaining. Gold weeks are down from traditional highs but I'm blaming the economy for that. Also, there are a lot more rental weeks on the market than in the past, perhaps partly due to the resort being built out as well as the sluggish economy in some sectors. For me, irrespective of sunk costs, it's still a viable vehicle for vacations and income. Time will tell if the changes will affect that opinion or not.
> 
> Thanks to TUG for bringing this change to light. As a MAR shareholder, I'm sure I would have learned about it eventually, but my focus has been elsewhere.



Do we own with the same MVCI or is there another with the clunky reservation system? Seems to me that the MVCI that I own with has a reservation system that allows me to log on to my account at Myvacationclub, click on Check Availability, select the resort I want to reserve at, choose the week and check-in date and about 2 mins later my confirmation is printed and the reservation appears in my MR account list of upcoming reservations.

That is not Clunky !

Also, can someone enlighten me on the importance of TS rental rates - didn't we buy our timeshares for vacations? I know I bought my timeshares with Marriott to enjoy vacations not to go into the vacation rental business. Rental rates have no relevance to me since I bought TS to vacation not to rent.

I can understand the focus on rental rates if I had a condo that I used for only part of the year and wanted to rent out the remaining weeks to offset my costs but buying TS weeks to use as a rental business just does not make sound business sense to me. I say this as someone who owns a Condo that is rented 52 weeks of the year and is profitable. It will not make me fabulously wealthy but the return on investment is way better than the bank is paying on deposits and is as good as most corpporate bonds are paying.


----------



## wof45

timeos2 said:


> I wouldn't worry about resort quality as if they are to keep the M name on the doors they must meet whatever those are. The worry is how do you get there. What cost to license the M? What contractors are you forced to pay far higher then prevailing rates for maintenance & upgrades on a no bid contract vs a competitive bid process for the exact same result at a (usually) better rate? What are the fees going to be when they know you want that name and they can charge whatever they want and with fees the only income for what will now be your mother company? How long before they exceed even the highest going rental values in the top times - forget the slightly off season or worse that get hit even harder (and may well start to default in droves)?    That is the worry not the look & feel of the resorts. The costs are what will kill value.



we currently own 4 condos and one of the biggest problems with them are the owners who are elected because they want to save money and lower MF.  The result is the that quality suffers -- landscaping, maintenance, painting, parking areas, roofs, etc.

We used to laugh about the longtime owners who are now living on SS and cannot afford to pay their MF, so all the rest of us suffer as they hold down their costs.

Do you really want resorts where people want to pay the same MF as they did ten years ago?  You should look at all of the small, older places in Orlando, Treasury Island, Cocoa Beach, etc, and decide if that is the way you would like to see the MVC resorts go.


----------



## timeos2

wof45 said:


> Do you really want resorts where people want to pay the same MF as they did ten years ago?  You should look at all of the small, older places in Orlando, Treasury Island, Cocoa Beach, etc, and decide if that is the way you would like to see the MVC resorts go.



No. And if that type permeate the Board then THEY need to be booted off! I do know what you mean. I see a classic example at two resorts that had to replace roofs. They both had cement based tile look roofs - very upscale but installed wrong by the developer and the expected life of 30 years was cut to 15 to 20 requiring near term replacement. Both looked at options. real tile slightly fragile - 30years+/- but VERY costly. Metal - less than glazed tile but still architecturally pleasing & 30-50 year minimum life. The same cement tile they had - cheaper still but limited life & very fragile and finally asphalt shingles. Cheap but poor look & limited 20-25 year life at best. 

They parted ways on the correct answer. One decided maintaining the original high tech look of the tile was a key part of the resort charm/architecture and decided to use the expensive glazed tile on all the buildings that were 1 or 2 stories with highly visible roofs. For the taller buildings they opted for the metal. Long life, still high end pleasing look that fit the resorts but less visible - saving $3 MILLION dollars with that choice over 100% glazed tile for all buildings. They also opted to do the work immediately as they knew there were serious problems and a future hurricane could cause serious damage to the recently renovated units.  Since this was unexpected and nearly 15 years early by the reserve funding plan they had to go for a hated Special Assessment OR get a tough to obtain loan to cover the costs & thus spread the fee over 10 years for owners - avoiding the SA.  They were able to do so thanks to excellent collections history & thus the work was done within a year. The annual Insurance savings thanks to the new design & materials ended up being over $100K PER YEAR helping pay for the work. 

The other resort did $500K in temporary repairs and then, five years later, decided to reroof with asphalt shingles for $1.5 million more that required a SA. And they won't get any insurance savings as the new design doesn't improve the buildings storm/water resistance.  Plus it looks awful - cheap like most shingles will.  

Which group do I think did the right thing even though it cost far more? The first by a landslide. So it isn't just the bottom line it is getting the best for the dollar. If we had to pay 40-50% premium because we HAD to use a captive contractor and their markup a well as a 15% overhead to the management company as Marriott and many others charge then the better option would not have been as attractive in cost/benefit and may not even been affordable for our owners. Getting the best for the best prices let us get top of the line and kept it affordable. That is what a Marriott type contract prevents and why fees rise unnecessarily higher when your Board uses such a management agreement. We've had one once and learned it is NOT the way to go.    

I don't mind spending money for what is needed and for desirable upgrades - in fact I often push for it. But not one dollar goes to overhead if it doesn't absolutely have to. Best bang for the buck is what we get and quality doesn't have to suffer - and in fact may be improved for it.  I hate resorts that "cheap out" on things but I want responsible use of every dollar when they are spent. 15-50% to useless corporate overhead is not good use of my funds. A top quality and ever improving resort is. It's that simple.


----------



## chalee94

MALC9990 said:


> Also, can someone enlighten me on the importance of TS rental rates - didn't we buy our timeshares for vacations?



if you are paying $1000 in annual dues for a timeshare and i - as a nonowner - can rent the same week in the same unit for $400, how much value does your timeshare have?

if marriott were to raise annual dues such that they were virtually always higher than a typical rental rate, what would that suggest to you about the viability of the timeshare business model?


----------



## pedro47

timeos2 said:


> No. And if that type permeate the Board then THEY need to be booted off! I do know what you mean. I see a classic example at two resorts that had to replace roofs. They both had cement based tile look roofs - very upscale but installed wrong by the developer and the expected life of 30 years was cut to 15 to 20 requiring near term replacement. Both looked at options. real tile slightly fragile - 30years+/- but VERY costly. Metal - less than glazed tile but still architecturally pleasing & 30-50 year minimum life. The same cement tile they had - cheaper still but limited life & very fragile and finally asphalt shingles. Cheap but poor look & limited 20-25 year life at best.
> 
> They parted ways on the correct answer. One decided maintaining the original high tech look of the tile was a key part of the resort charm/architecture and decided to use the expensive glazed tile on all the buildings that were 1 or 2 stories with highly visible roofs. For the taller buildings they opted for the metal. Long life, still high end pleasing look that fit the resorts but less visible - saving $3 MILLION dollars with that choice over 100% glazed tile for all buildings. They also opted to do the work immediately as they knew there were serious problems and a future hurricane could cause serious damage to the recently renovated units.  Since this was unexpected and nearly 15 years early by the reserve funding plan they had to go for a hated Special Assessment OR get a tough to obtain loan to cover the costs & thus spread the fee over 10 years for owners - avoiding the SA.  They were able to do so thanks to excellent collections history & thus the work was done within a year. The annual Insurance savings thanks to the new design & materials ended up being over $100K PER YEAR helping pay for the work.
> 
> The other resort did $500K in temporary repairs and then, five years later, decided to reroof with asphalt shingles for $1.5 million more that required a SA. And they won't get any insurance savings as the new design doesn't improve the buildings storm/water resistance.  Plus it looks awful - cheap like most shingles will.
> 
> Which group do I think did the right thing even though it cost far more? The first by a landslide. So it isn't just the bottom line it is getting the best for the dollar. If we had to pay 40-50% premium because we HAD to use a captive contractor and their markup a well as a 15% overhead to the management company as Marriott and many others charge then the better option would not have been as attractive in cost/benefit and may not even been affordable for our owners. Getting the best for the best prices let us get top of the line and kept it affordable. That is what a Marriott type contract prevents and why fees rise unnecessarily higher when your Board uses such a management agreement. We've had one once and learned it is NOT the way to go.
> 
> I don't mind spending money for what is needed and for desirable upgrades - in fact I often push for it. But not one dollar goes to overhead if it doesn't absolutely have to. Best bang for the buck is what we get and quality doesn't have to suffer - and in fact may be improved for it.  I hate resorts that "cheap out" on things but I want responsible use of every dollar when they are spent. 15-50% to useless corporate overhead is not good use of my funds. A top quality and ever improving resort is. It's that simple.



I agree with above statement 100 %.


----------



## wuv pooh

SueDonJ said:


> Stephen Weisz:  "While we aren't naming the new company today, we know that when we do, it will include the name Marriott because of the tremendous competitive advantage the name conveys. In fact, we will have the exclusive rights to both the Ritz-Carlton and Marriott names as they apply to the Timeshare business under a long-term agreement, for which we will pay a franchise fee to Marriott. At the same time, we will also be able to develop and operate Timeshare resorts under other brand names."



They will also have the ability to run the exchange system for other brand names through the new exchange company that they formed.  As the largest and most respected independent timeshare company it will be interesting to see what happens.  I am sure that other companies have similar issues that led to the Marriott decision.  Maybe 4 Seasons, Starwood, Hilton, Disney, etc.  When Marriott spun off the real estate business they funded many luxury hotels that were not Marriott branded.  I would not be suprised to see future changes as most believe that the timeshare industry has to consolidate to cut costs and propsper going forward.


----------



## Big Matt

For all of you out there spinning the doom and gloom, read this post.  I don't know who this is coming out of the woodwork with post #1, but it is the one post in this entire thread that is on point and based in fact.

Marriott is just separating the assets/debt from their hotel management company just like they did with Host Marriott (a reit).

I predict that this new spin off will buy and sell properties just like Host has done.  Host owns many properties that are managed by other big name brands including Hilton, Hyatt, Le Meriden, most Starwood properties, and yes Marriott and Ritz Carlton.  

Marriott will still manage timeshares, just like it manages hotels.  This also opens up the door for Marriott to managed timeshares that they didn't develop.  Wait and see.



turnberry said:


> Hey Folks --- This operations vs capital dilemma is not new for Marriott.  So, before jumping to conclusions as to eventualities, let's try some historical perspective:
> 
> Those of us who are Marriott hotel junkies remember it was 20 years ago and three economic cycles ago that the old Marriott itself was split into two new companies for --- guess what --- the purpose of isolating capital debt (caused at that time mainly by hotel overbuilding).
> 
> That plan had two parts and successfully solved the company's capital problems of the era:
> 
> Part 1. The "old" Marriott was split into two new entities:
> 
> A. The new Marriott International became the hotel operating and franchising company (and developer/manager of the MVCI/MORI resorts).
> 
> B. The new Host-Marriott became - among other things - the debtor of the company's capital debt.
> 
> Part 2.  The company moved into the hotel franchising business big time -- which brought many new players into the fold to manage AND INCUR DEBT to build, open and/or manage Marriott-branded hotels (and allowed multi-branding of hotels with varying amenities).
> 
> This two-step initiative was designed - and was successful - in doing one of the things that Marriott is now attempting to do with MVCI/MORI resorts --- to isolate and service resort development debt.
> 
> If that part was successful with the hotels 20 years ago - Marriott is probably thinking - why not try it with the timeshare system?
> 
> What goes around comes around!


----------



## hotcoffee

wuv pooh said:


> . . . I would not be suprised to see future changes as most believe that the timeshare industry has to consolidate to cut costs and propsper going forward.



I do not think that consolidation would necessarily be a bad thing overall.  Suppose that  one of more of Starwood's timeshare business, Disney's, Marriott's, and others got together like the airlines have done?  More choses.  More options.  Maybe not so bad.

If the economy were to really heat up again maybe timesharing will once again become viable, but I am not holding my breath.  There are a lot of issues that are dissimilar to the situation 10, 20, or 30 years ago.  I do not think our economy will ever be what it was in past years.  Things are different now.


----------



## pgnewarkboy

SueDonJ said:


> It's interesting how TUGgers cherry-pick select quotes to bolster their position, isn't it?  If anyone is interested in viewing ALL of Marriott's quotes the transcript from the conference call can be found here at seekingalpha.com.  The Q&A session following is worth a read, too.
> 
> There's no doubt that we have good reason to be concerned about the future of Marriott timeshares.  But I don't agree that it's time to sound the death knoll.  Marriott's made a logical, rational business decision here similar to others in their history that have strengthened their offerings.  This bears watching, of course, but the economy has been and will continue to be the primary driver of all timeshare business.
> 
> These are the conference call quotes that I find most interesting:
> 
> Arne Sorenson:  "Our Timeshare business had a great 2010, rolling out the Marriott Vacation Club Destinations Points Program to great success, providing owners with greater flexibility and choice. And the business continued to right-size its overhead as well as its sales and marketing costs. And for Timeshare, bigger changes are in the offing. Last night, as you know, we announced a plan to divide the company's Lodging and Timeshare businesses into two separate publicly traded companies through a special tax-free dividend to our shareholders. While many of you might first think this is Marriott International exiting the Timeshare business, we do not view it that way. We see it as setting up a platform for the Timeshare business still linked to the Marriott and Ritz-Carlton brands to grow faster with independent capitalization but still adding loyal Marriott customers as they grow."
> 
> ...
> 
> "For more about the business, I've asked Steve Weisz, the future CEO of the new Timeshare company, to talk to you a bit about MVCI's prospects. A 37-year Marriott veteran, Steve is a tremendous leader, understands this business very well and has done an outstanding job in his almost 14 years at the MVCI helm."
> 
> Stephen Weisz:  "While we aren't naming the new company today, we know that when we do, it will include the name Marriott because of the tremendous competitive advantage the name conveys. In fact, we will have the exclusive rights to both the Ritz-Carlton and Marriott names as they apply to the Timeshare business under a long-term agreement, for which we will pay a franchise fee to Marriott. At the same time, we will also be able to develop and operate Timeshare resorts under other brand names."
> 
> ...
> 
> "Bill Shaw, who is retiring as Vice Chairman of Marriott at the end of March, will become Chairman of the Board of our new public Timeshare company. Bill's strong leadership, business and finance acumen and core belief in Marriott culture will serve our public shareholders well. Debbie Marriott Harrison, Mr. Marriott's daughter, will also serve on our Board of Directors. The Timeshare business is highly regulated, and Debbie's experience in corporate affairs at Marriott International makes her a great addition to the board."
> 
> ...
> 
> "Looking further ahead, while we don't expect the new company to be investment-grade in the near term, we do expect that it will continue to securitize its consumer notes receivable and should require little additional incremental capital. We believe we will have the economic strength and flexibility to weather further economic cycles as well as grow over time."
> 
> And from this reuters.com article, "... After a special dividend, the Marriott family is expected to hold around 21 percent of the outstanding common stock of each company."
> 
> So Marriott is saying that they're spinning off the timeshare business in an effort to focus better solely on what it needs to prosper; they're putting strong, effective Marriott, Int'l leaders including a Marriott family member into position in the new company, and they intend to hold an equal percentage of ownership in the new company as they hold in Marriott, Int'l.  Those are positive indicators, IMO.



Glad to hear that everything is wonderful in Marriott La La land where only good things happen for the corporation, shareholders, and those who bought Marriott timeshares to see them disappear as part of Marriott - the reason they bought in the first place. Sorry but the above is nothing but corporate BS.  What are they going to say, the truth?  Never.  The stock market has evaluated the deal.  Marriott stock went up after the announcement because they got rid of a drag on their earnings.   It is not, and never will be, a good deal for those who bought from Marriott.  The new company does not and will not ever have the financial clout and marketing power of Marriott.  For Marriott timeshare owners the future just got alot dimmer.


----------



## SueDonJ

pgnewarkboy said:


> Glad to hear that everything is wonderful in Marriott La La land where only good things happen for the corporation, shareholders, and those who bought Marriott timeshares to see them disappear as part of Marriott - the reason they bought in the first place. Sorry but the above is nothing but corporate BS.  What are they going to say, the truth?  Never.  The stock market has evaluated the deal.  Marriott stock went up after the announcement because they got rid of a drag on their earnings.   It is not, and never will be, a good deal for those who bought from Marriott.  The new company does not and will not ever have the financial clout and marketing power of Marriott.  For Marriott timeshare owners the future just got alot dimmer.



Actually, if everything was wonderful in my Marriott La La land then I'd be able to split my m/f in half and double my Weeks.  And turn them into fixed units/Weeks, too, yeah that's the ticket.  But too bad so sad, everything is NOT wonderful and I'm not sure how you get that I think it is from what I wrote, which was, "There's no doubt that we have good reason to be concerned about the future of Marriott timeshares" and "These are good indicators."

So tell me, knowing that the timeshare segments are, have been, and will continue to be a drain on Marriott, Int'l throughout the economy's slow and uncertain improvement, which means the hesitancy on the part of investors and shareholders will sooner rather than later become a total lack of patience, what would YOU do if you were in charge of MVCI's business?  Would you sit tight and simply hope that the stockholders who don't own the timeshares would be willing to ride out the storm with you?  Make no effort at all to protect a business segment which is a money-making operation for you?  Because that would be an even more risky business venture than this spin-off appears to be, IMO.


----------



## disnefile

pgnewarkboy said:


> Glad to hear that everything is wonderful in Marriott La La land where only good things happen for the corporation, shareholders, and those who bought Marriott timeshares to see them disappear as part of Marriott - the reason they bought in the first place. Sorry but the above is nothing but corporate BS.  What are they going to say, the truth?  Never.  The stock market has evaluated the deal.  Marriott stock went up after the announcement because they got rid of a drag on their earnings.   It is not, and never will be, a good deal for those who bought from Marriott.  The new company does not and will not ever have the financial clout and marketing power of Marriott.  For Marriott timeshare owners the future just got alot dimmer.



You got it right.  I can't believe there are still some people who think this may not be a very bad deal. Things will not change at first but wait a year or two.  Todays resale prices will look good.  But Marriott International will get fees from the Timeshare.  They have nothing to lose but alot to gain.


----------



## littlestar

wuv pooh said:


> They will also have the ability to run the exchange system for other brand names through the new exchange company that they formed.  As the largest and most respected independent timeshare company it will be interesting to see what happens.  I am sure that other companies have similar issues that led to the Marriott decision.  Maybe 4 Seasons, Starwood, Hilton, Disney, etc.  When Marriott spun off the real estate business they funded many luxury hotels that were not Marriott branded.  I would not be suprised to see future changes as most believe that the timeshare industry has to consolidate to cut costs and propsper going forward.



I could see the big brand names consolidating together or forming their own mini exchange system between one another. 

We own points with Wyndham and something fascinating to me that they have been doing is adding new resorts during this down economy via their WAAM program - they've made deals for new inventory with Smugglers Notch, Reunion in Orlando, Emerald Grande in Destin, FL - it's really pretty brilliant what they are doing. (I'm sure I've forgotten some of the other new locations). 

Who knows, maybe MVCI will try something like WAAM, too, for future expansion.


----------



## equitax

*Not necessarily a bad thing*

Spinco will need to innovate in order to make itself profitable as accountable to new shareholders.  They can do it, if they want to - They have 400000 current timeshare interest owners that have a vested interest here.  I suspect that Spinco will become more involved in the resale market.  Don't be surprised to see the land trust issue preferreds or become a REIT...

Want to move 1.8B in inventory? Convince your 400K members that you're worth another $4500 bet by each...




littlestar said:


> I could see the big brand names consolidating together or forming their own mini exchange system between one another.
> 
> We own points with Wyndham and something fascinating to me that they have been doing is adding new resorts during this down economy via their WAAM program - they've made deals for new inventory with Smugglers Notch, Reunion in Orlando, Emerald Grande in Destin, FL - it's really pretty brilliant what they are doing. (I'm sure I've forgotten some of the other new locations).
> 
> Who knows, maybe MVCI will try something like WAAM, too, for future expansion.


----------



## timeos2

*Why work when you can just bill?*



equitax said:


> Spinco will need to innovate in order to make itself profitable as accountable to new shareholders.  They can do it, if they want to - They have 400000 current timeshare interest owners that have a vested interest here.  I suspect that Spinco will become more involved in the resale market.  Don't be surprised to see the land trust issue preferreds or become a REIT...
> 
> Want to move 1.8B in inventory? Convince your 400K members that you're worth another $4500 bet by each...



 Why work at creating value when you have a captive audience/ Today the fee is 15%. Tomorrow, due to corporate changes, it's raised to 25%. Here is the bill due in 15 days. Pay or lose your week.   See? MUCH easier and guaranteed income!! Need more? Fee is 35% - sorry - wee REALLY need it! You as an owner have no option except to drop tem (but you want the name) or sell. Doesn't bother them much either way. This is the nightmare and the unvarnished reality of a "new" Marriott division that has but one real source of income. You  as an owner. Hold on to your wallets...


----------



## Big Matt

Watch it start showing up in II like there's no tomorrow and on marriott.com at good prices.

They need people in the units whether by selling the weeks or "renting"



equitax said:


> Want to move 1.8B in inventory? Convince your 400K members that you're worth another $4500 bet by each...


----------



## pgnewarkboy

disnefile said:


> You got it right.  I can't believe there are still some people who think this may not be a very bad deal. Things will not change at first but wait a year or two.  Todays resale prices will look good.  But Marriott International will get fees from the Timeshare.  They have nothing to lose but alot to gain.



I don't know how much clearer this could be.  A Marriott Timeshare ownership was head and shoulders above any other similar ownership because it was part of  an international multi-billion dollar corporate titan in the hospitality industry.  That is over and along with it the premium value of those ownerships. There is no way this pill can be swallowed no matter how they try to candy coat it.


----------



## GregT

littlestar said:


> I could see the big brand names consolidating together or forming their own mini exchange system between one another.
> 
> We own points with Wyndham and something fascinating to me that they have been doing is adding new resorts during this down economy via their WAAM program - they've made deals for new inventory with Smugglers Notch, Reunion in Orlando, Emerald Grande in Destin, FL - it's really pretty brilliant what they are doing. (I'm sure I've forgotten some of the other new locations).



DISCLAIMER:  Lots of speculation following, but reflects what I think is possible

You raise an interesting point here, and again, my friends  at Wyndham can provide some insight.

Wyndham manages two timeshare systems:  Fairfield and Worldmark.   Both completely independent systems.  However, Wyndham (in addition to owning RCI) has constructed a mechanism to allow some overlap between the systems.   Each year, there are a certain number of properties that are a part of The Exchange Network, that is internal to Wyndham.  The properties in TEN change year to year.

As an example, last year I could use my _Worldmark _points to book space in Kona Hawaiian (a _Fairfield _property).   Conversely, I could use my _Wyndham _points to book space in Indio (a _Worldmark _property).  *Wyndham has proven that it is possible to cross systems*

Since I'm (positively) speculating on the future of SpinCo, imagine if SpinCo, the only Pure Play timeshare company out there, takes this to the next level and develops an even more impressive inter-system points exchanges.

What if I could use some of my DClub points to book space in Ritz Carlton properties?   I'd certainly like to do that.  I'm sure there are enrolled members, like me who'd even pay for a special membership to have that cross-system privilege ($XXX/year?).  Also, that means I'm not a captive payor, I want to make that payment because I get something for it.   And such a system facilitates new points sales because the system has more features.

But be even more ambitious, if you were the CEO.  What if SpinCo acquires the management rights to Starwood?  Eventually Starwood will realize that developer sales are dead, and managing 14 properties isn't very much fun or profitable.  So....now there is a respectable buyer that won't abuse the Westin brand -- so sell/transfer the responsibility to SpinCo.   

Spinco gets renamed from SpinCo Marriott to SpinCo Adventures and now has four high quality leisure brands (Marriott, Ritz, Westin and Sheraton).  As a Marriott owner, I don't mind if the management company has a different name as long as my property is taken care of.   Besides, SpinCo appears to be more owner friendly (big assumption).

And now my ability to cross systems is even more intriguing -- I'm glad I'm paying $XXX/yr for this version of "Interval Gold", because now I can use my SpinCo DClub points to book in Westin St. John/Harborside/Princeville, in addition to Marriott and Ritz.   All the sudden, Marriott owners are more interested in enrolling and being a part of SpinCo DClub.  And points sales in DClub increase because of the portfolio breadth -- and DClub can earn development fees for new sites with its financial partners -- and new locations can be added.     

All, this is an interesting situation, and my comment are hypothetical -- I have no idea what SpinCo is going to do -- 1) fee us to death as captive owners, or 2) find ways to expand their business in a collaborative manner and offer us features and services that we want to pay for and are happy to be a part of.   

I'm confident that SpinCo's new management team is aggressive and ambitious -- what an opportunity.  I definitely agree with others that fee increases are in our future, but I'm hoping they are not ridiculous and that there may be a valuable network to participate, that is worth the cost.     

Interesting stuff....

Best,

Greg

Edited:  Wyndham manages, versus owns the two systems


----------



## yumdrey

Greg, I am sorry, but Wyndham may own fairfield points or RCI, but they don't own WorldMark. WM is owned by the owners and Wyndham is just a new management co.

I have no objection for your comment, just wanted to correct that.


----------



## GregT

yumdrey said:


> Greg, I am sorry, but Wyndham may own fairfield points or RCI, but they don't own WorldMark. WM is owned by the owners and Wyndham is just a new management co.
> 
> I have no objection for your comment, just wanted to correct that.



All,

I'll defer to my colleague with the cute dog  , since the concept in the thread remains the same.    We'll figure out separately and post back what happened between Wyndham/Trendwest/Worldmark.

Best,

Greg


----------



## timeos2

yumdrey said:


> Greg, I am sorry, but Wyndham may own fairfield points or RCI, but they don't own WorldMark. WM is owned by the owners and Wyndham is just a new management co.
> 
> I have no objection for your comment, just wanted to correct that.



 Wyndham doesn't "own" Fairfield Points or resorts either. They manage them for a substantial fee.  ZExcept for unsold inventory no real deeded (not RTU) timeshare is "owned" by the management/developer but, as you sate about Worldmark, each resort/deed has an individual owner that collectively forms the Association that manages (not owns) the resort & all it's features for the true owners and, in too many cases, gives management to Wyndham (or Marriott or whatever management the Board contracts with). So except for the short period when the vast majority of a new resort is unsold no management/developer owns any timeshare.  They may manage them. They may have their name on them. But they don't own them. They may actually own the rights to sell on the property. Nothing unique about Worldmark not being "owned" but merely managed by Wyndham.


----------



## davewasbaloo

chalee94 said:


> if you are paying $1000 in annual dues for a timeshare and i - as a nonowner - can rent the same week in the same unit for $400, how much value does your timeshare have?
> 
> if marriott were to raise annual dues such that they were virtually always higher than a typical rental rate, what would that suggest to you about the viability of the timeshare business model?



agreed, this is a part of my recent disappointment. When the economy was good, rental rates were nearly three times as much as my MF, so I felt I had a good investment. This easter we are going and the MF is only about 15% less than the rental, but when you add on our monthly payments (5 more years to go until it is paid off), it doesn't feel like a great deal.

I have loved every MVCI villa I have been in, and I bought for the Marriott quality (DVC had been the other option, and with the cutting Disney has been doing I am so glad we never went that route). But the fact getting a decent trade during the school holidays is so tough, I do have some buyers remorse somewhat.

We bought it hoping we could use points if we wanted or airmiles (found out Marriott hotels are poor for families in Europe needing two rooms often, and the airmile options are almost non existant in the school holidays), and the idea of swapping around resorts. 

The last thing I would want is for the quality of the resort we own at to continue to go down because the owners are cheap (e.g. we used to have a free bus to Disneyland Paris as well as a good MAZE programme) but because of owner decisions, the bus is now 3 times a day and costs 2 euros each, the pool needs refurb, and the MAZE programme was virtually non existant last time. The last thing I want is a fully owner run solution. 

So in short, I am very nervous. The DC system has already caused issues for European owners, and now this, not sure how it is going to go.


----------



## gblotter

*live and learn*

It is a well-understood fact that Marriott's timeshare division has been bleeding money.  This divestment decision will only worsen the revenue picture.  If the DC points program isn't already a bad-enough deal, who in their right mind would buy now amid such uncertainty.  I expect any new sales in 2011 to come to a near complete halt (but there is always a sucker to be found, so perhaps...).  I almost pity those sales people saddled with an ill-conceived points product in a lousy economy - and now this.  Many will head for the exits.

Come 2012, Spinco will no longer have Marriott's deep pockets to save them.  It should be obvious that significant changes in operations and fees are coming in 2012 as a condition of Spinco's survival as a standalone company.

If Spinco becomes too abusive with maintenance fee increases and other unpleasantries, the sold-out resorts will obviously be in a better situation to control their own destiny through their independent HOA board.  Divorcing from Spinco would not be easy, but at least it could be done.

Points owners and trust resorts with lots of unsold inventory will be in tough spot though.  Not so many choices if it gets bad.

As others have said, we "owners" are pretty much bystanders in this drama.  Even with an HOA board, our primary way of voting is with our feet.  At the end of the day, our family has gotten quite a few enjoyable years out of our two Marriott timeshares.  Even if fee increases force us to walk away from our investment at some point, it won't be the end of the world.  There will always be other avenues to take nice family vacations.  If buying a Marriott timeshare is the biggest mistake I ever make - well, that's not too bad.  Live and learn.


----------



## tombo

gblotter said:


> It is a well-understood fact that Marriott's timeshare division has been bleeding money.  This divestment decision will only worsen the revenue picture.  If the DC points program isn't already a bad-enough deal, who in their right mind would buy now amid such uncertainty.  I expect any new sales in 2011 to come to a near complete halt (but there is always a sucker to be found, so perhaps...).
> If Spinco becomes too abusive with maintenance fee increases and other unpleasantries, the sold-out resorts will obviously be in a better situation to control their own destiny through their independent HOA board.  Divorcing from Spinco would not be easy, but at least it could be done.
> 
> Points owners and trust resorts with lots of unsold inventory will be in tough spot though.  Not so many choices if it gets bad.
> 
> As others have said, we "owners" are pretty much bystanders in this drama.  Even with an HOA board, our primary way of voting is with our feet.  At the end of the day, our family has gotten quite a few enjoyable years out of our two Marriott timeshares.  Even if fee increases force us to walk away from our investment at some point, it won't be the end of the world.  There will always be other avenues to take nice family vacations.  If buying a Marriott timeshare is the biggest mistake I ever make - well, that's not too bad.  Live and learn.



Sales by Marriott will always be made to people who walk into a resort for some freebies and are told that they can own a lifetime of vacations for a small fee. Marriott will spin the numbers to show huge savings if they buy. The uinformed, uneducated (on timeshares) buyer will believe the lies and half truths they are told and own something they will more likely than not regret. Sales will never end totally until Marriott close the sales dept, but sales can slow to a crawl where the overhead is eating up the little profit they are making on fewer sales.

 Even the most ardent marriott supporter here on TUG would not buy a retail points package with the current divesting of timeshares by Marriott. Is there anyone here on TUG considering buying retail points for any price? I will gladly read the reasons ANYBODY would give for buying RETAIL MARROITT POINTS now with full knowledge of the spinoff and timeshares in general. I am eagerly waiting to read this post and the reasons for buying. If none here will buy, then that shows that sales will fall even more because anyone who knows anything about the situation will not buy.

 The internet is probably going to be the final death blow to retail timeshare sales because knowledge is power. no more trusting the salesman with no where to check on facts and promises. Google timeshares on the internet and the smoke and mirrors go away. 

Now the change Marriott made to own the votes of any who buy points or convert to points becomes clearer. Once the spinoff starts assessing and raising fees owners might vote to remove Marriott as the mgt company. That is where the new division will make their profits, not on sales but on the backs of current powners. Even the number one cheerleader might finally have enough when their orlando annual MF's pass the $2000 mark. Marriott by owning the votes of all points owners and all weeks owners who convert(ed) will be able to vote against removing them as the mgt company. This will leave owners paying whatever marriott decides to charge them or they will have to walk away.

 Marriott planned this thing out way in advance. The statement that they never planned on walking away but the last few years...... was not an off the cuff mistatement. That was a statement purposelly made in a speech written by PR dept, the legal dept, and CEO's. They said the stock will not be investment grade to cover their butts legally, not to be nice. They stripped current owners who convert of their votes and will give no future purchasers a vote on purpose, and that is to preserve their cash cow of being the managers of the resorts.

When we hear what Marriott has to say, we only hear the spin the PR and legal depts want us to hear, and usually not before they are ready for us to hear it. Walking away or selling might be the best option in the near future. Time will tell.


----------



## equitax

*Land Trust?*

Won't the land trust be owned by spinco?

If Marriott Inc will only own 20 pct of the common stock of spinco, won't spinco act in its own interest?

If the entire timeshare business of Marriott is worthless, you would be able to pick up the commOm stock for quite cheap once traded. Two big block investors could essentially end up withholds voting rights than Marriott Inc.

Spinco will have a lot more flexibility with the unused inventory than Marriott Inc does right now. If spinco can focus on getting the unused inventory disposed of - even at a discount, so that mf revenues are in and foreclosures down, this whole thing can turn around. 


From a Marriott Inc pr standpoint, many are downright ticked off right now, but the reAlity is that the resorts ar built, and as long as those units are sold and "revenue generating" the sale price is not that relevant for spinco. Marriott did start to realize this when it created the land trust and that's why it. Ow costs "up to usd 1.00 per point" for the developer to waive rofr. So he bigger your holdings, the more developper makes when you want to head for the exits which is a brilliant move from an operational standpoint. 

It won't surprise me if spinco allows us awful resale buys to upgrade into the point program just to have us on the hook for added rofr fees. 

The land trust does have value, and while the timeshare interests may be worthless as resales, I am quite  certain that the underlying real property owned by my 3bdr at grande vista is more than the 7000$ I paid for it. Do The math the land and building is worth more that 192 per sq ft. 

Mf may be high, and I see many people moaning about all of this. Tough times don't last forever and the resale values reflect market conditions and the fact that developer overcharged. 

If you can't afford to hold, walk. If you bought retail don't ever expect to get your initial outlay back.


----------



## dan_hoog

It should be noted that the financial performance on the books of Marriott Int'l and spinco can be very different.  Changes in the business could have created a charge-off situation for Marriott Int'l that is better handled by this spinout.

I am annoyed at this, but actually don't think it matters as much as many suggest.  The Marriott brand on the properties, reasonably consistent service from Marriott (which is already contracted by the resorts), can be maintained.  Having two mouths to feed (Marriott Int'l and spinco) will likely get reflected in maintenance fees, but another 10 or 15% (one time) doesn't really change the landscape.

The overall health and viability of timeshares is another issue.  This spin-out doesn't change the likely viability of timeshare sales and economics when/if the market recovers.  The spinco may actually have more flexibility to adapt and change, maybe lobby for laws that set floors on rental rates at 2x maintenance fees


----------



## chalee94

tombo said:


> They said the stock will not be investment grade to cover their butts legally, not to be nice.



just to be clear, marriott corp - the "corporate titan" with the "deep pockets" - is rated all of a BBB (even after unloading spinco). that is barely above the minimum investment grade of BBB- for those keeping score at home...


----------



## Big Matt

I really don't understand the logic here.

IMO, there was no real premium value for their weeks in the resale market other than the fact that they are really nice timeshares with a good brand.  The Marriott brand is still going to be part of the new company, and I expect that Marriott will QC the resorts just like they did in the past.  

People pay up for quality and a quality brand.  I don't see how this move changes that.

All this spin off represents is a way for Marriott International to get a bunch of assets and offsetting debts off of the balance sheet.  If they really (and I mean really) wanted to get rid of an albatross, they would have: a) written off the value in the form of impairments, or b) just sold the entire thing.  If it is really and albatross, they would never let their brand stay associated with it.  They are not that stupid.



pgnewarkboy said:


> I don't know how much clearer this could be.  A Marriott Timeshare ownership was head and shoulders above any other similar ownership because it was part of  an international multi-billion dollar corporate titan in the hospitality industry.  That is over and along with it the premium value of those ownerships. There is no way this pill can be swallowed no matter how they try to candy coat it.


----------



## chalee94

equitax said:


> If Marriott Inc will only own 20 pct of the common stock of spinco, won't spinco act in its own interest?



i might have misunderstood, but i thought it was the marriott family that would own 20% or so of the spinco.  i don't think marriott inc would have any investment directly in spinco.

the natural question is whether they start divesting that ownership after the split...


----------



## mclyne

Well, now I know why my timeshares were never advertised in New York.

 I should have realized something was not right when Marriott was not allowed to advertise here.


----------



## timeos2

Caribgirl said:


> Well, now I know why my timeshares were never advertised in New York.
> 
> I should have realized something was not right when Marriott was not allowed to advertise here.



 Yup. NY is fairly good at protecting buyers rights. It was a big red flag that something was amiss when Marriott was not allowed to havve an offering there. They should be as we pay enough taxes to get seemingly very little value back!


----------



## windje2000

chalee94 said:


> i might have misunderstood, but i thought it was the marriott family that would own 20% or so of the spinco.  i don't think marriott inc would have any investment directly in spinco.
> 
> the natural question is whether they start divesting that ownership after the split...



You are correct, it is the family.  

Immediate divestiture of the Marriott family stock interest in Spinco could easily be characterized as equivalent to a dividend and destroy the tax free (both to the stockholder and the corp.) status of the deal, because the Marriott family arguably controls the parent 'Spinner'.  The Marriott family almost certainly will not start divesting until the transaction is 'old and cold.' (IRC 355 IIRC)

Marriott family stock in Spinco likely will be transfer restricted for this reason.  The upcoming Form 10 disclosures will reveal the details on this.


----------



## tombo

Big Matt said:


> If they really (and I mean really) wanted to get rid of an albatross, they would have: a) written off the value in the form of impairments, or b) just sold the entire thing.  If it is really and albatross, they would never let their brand stay associated with it.  They are not that stupid.



Their only chance to sell the timeshare division is with the Marriott brand. If Marriott changes the name they will never sell it and they will lose owners, resorts, and mgt fees during the time they are trying to sell. Plus if they do find a buyer they will want to get franchise fees from the purchasers by selling it as Marriott. Marriott franchise fees is basically income for doing nothing but making sure the franchisees keep the resorts up to the required standards. The owners will pay to do this.

You are right, they are not stupid. Marriott knows that the main value of the spin off division is the Marriott brand and they are not about to get rid of the one chance they have to sell or make profit on the spinoff.


----------



## equitax

*Might be me that misunderstood.*

Could have been me that misunderstood. At any rate  I don't think the situ is as gloomy as some feel. Marriott still has it's name on the door and that does mean something. 





chalee94 said:


> i might have misunderstood, but i thought it was the marriott family that would own 20% or so of the spinco.  i don't think marriott inc would have any investment directly in spinco.
> 
> the natural question is whether they start divesting that ownership after the split...


----------



## OldPantry

dan_hoog said:


> The spinco may actually have more flexibility to adapt and change, maybe lobby for laws that set floors on rental rates at 2x maintenance fees


Really?  Are you really touting the benefits of price-fixing?  Just think it through a smidgen: you want to rent your unit, but nobody is biting at your 2x maintenance fee rate.  So, ...?  You can't cut your price, so you can't rent at all.  Maybe this great idea isn't so great. Maybe.


----------



## OldPantry

*Let's not go completely nuts.*



equitax said:


> It won't surprise me if spinco allows us awful resale buys to upgrade into the point program just to have us on the hook for added rofr fees.


It would surprise me a great deal. Come on, weeks owners aren't buying points at all; they have the right to exchange their week for points, with the option of not exchanging at all.  So, they have no points to sell, and no rofr fees (the dreadful $1/point) to pay if they want out.


----------



## BarbS

OldPantry said:


> It would surprise me a great deal. Come on, weeks owners aren't buying points at all; they have the right to exchange their week for points, with the option of not exchanging at all.  So, they have no points to sell, and no rofr fees (the dreadful $1/point) to pay if they want out.



I agree.  I can't imagine any weeks owner giving up their deeded weeks, thereby losing their home resort advantage, paying higher maintenance fees, and pretty much being unable to ever sell or even give away their points without incurring a huge fee.  Who would want to do that?   Frankly I don't understand how they are able to con anyone into purchasing DC points in the first place.  Does anyone know what they're told in the sales presentation when they ask the question.......what if I need to sell?


----------



## pgnewarkboy

Let me summarize all I have read here. There is no valid argument that owners are better off as a result of this spinoff. The most optimistic hope that spinco will be a great company and the Marriott name will still have weight.   The main point is that "hope" is now the operative word for the most optimistic.   This is a bad deal for Marriott Timeshare owners.  It is a good deal for Marriott Corporation.  Owners can now hope for the best when before they had no need for hope.

Furthermore, any new buyers into the system will have to be told as a matter of law that they are not buying from Marriott or into Marriott.  They are buying from or in to Spinco.


----------



## SueDonJ

pgnewarkboy said:


> Let me summarize all I have read here. There is no valid argument that owners are better off as a result of this spinoff. The most optimistic hope that spinco will be a great company and the Marriott name will still have weight.   The main point is that "hope" is now the operative word for the most optimistic.   This is a bad deal for Marriott Timeshare owners.  It is a good deal for Marriott Corporation.  Owners can now hope for the best when before they had no need for hope.
> 
> Furthermore, any new buyers into the system will have to be told as a matter of law that they are not buying from Marriott or into Marriott.  They are buying from or in to Spinco.



Any Owner (TUGgers especially, because we've been discussing all this for ages now) who wasn't hoping last week, or last month, or anytime during the last few years that Marriott would be able to figure out a way to combat the poor economy's effect on timeshare sales would have had to have their heads stuck firmly in the sand, IMO.  The writing's been on the wall for quite a while now.

Consumers buy products all the time from subsidiaries and spin-offs knowing full well that the parent company can unilaterally separate itself from the product.  Marriott has said that they know the brand name sells and that they need to keep it on the product if they want to continue to profit from it when it's spun off.  Like others have said, Marriott isn't stupid and they're not going to leave the product completely unprotected.


----------



## dan_hoog

Notice the smily face -- It is a remark on how corps sometimes try to alter the playing field through odd means, not a recommendation.



OldPantry said:


> Really?  Are you really touting the benefits of price-fixing?  Just think it through a smidgen: you want to rent your unit, but nobody is biting at your 2x maintenance fee rate.  So, ...?  You can't cut your price, so you can't rent at all.  Maybe this great idea isn't so great. Maybe.


----------



## wof45

equitax said:


> Spinco will have a lot more flexibility with the unused inventory than Marriott Inc does right now. If spinco can focus on getting the unused inventory disposed of - even at a discount, so that mf revenues are in and foreclosures down, this whole thing can turn around.
> 
> The land trust does have value, and while the timeshare interests may be worthless as resales, I am quite  certain that the underlying real property owned by my 3bdr at grande vista is more than the 7000$ I paid for it. Do The math the land and building is worth more that 192 per sq ft.
> 
> Mf may be high, and I see many people moaning about all of this. Tough times don't last forever and the resale values reflect market conditions and the fact that developer overcharged.
> 
> If you can't afford to hold, walk. If you bought retail don't ever expect to get your initial outlay back.



I believe that many people here are drinking the koolaid without actually analyzing the financials.

Marriott MVC is not losing money, it is just not earning as quickly as it was several years ago.  That has an effect on the future stock value, but the value is not negative.

I believe the analysis is also fairly straightforward that MVC does not need to have a firesale on points.  We know that they sell weeks and now points for 5-10 times the development cost, and we also know that the maintenance costs are less than 5% of the sale price, so MVC can easily afford to sit on inventory as long as they turn it all over in less than 5 years, which it appears they are doing even in this recession.  (even if tuggers don't buy even a single point).

You should worry a little about your investment at GV since 50 weeks times $7,000 is $350,000 and I'm not sure that a condo in Orlando is worth that these days.

But you do get good trades based on MF paid, so you will do well if you enjoy the vacations for 10-20 years or so.  In the worse case, you can convert your weeks to DC points and rent the points for 50 cents per point.   

We've already had our weeks 10-2 years, so we can't complain except that it would be nice to be able to sell and get some real cash.


----------



## bogey21

pgnewarkboy said:


> Furthermore, any new buyers into the system will have to be told as a matter of law that they are not buying from Marriott or into Marriott.  They are buying from or in to Spinco.



You better believe that when Marriott creates an official name for Spinco it will be Marriott something!

George


----------



## tombo

pgnewarkboy said:


> Let me summarize all I have read here. There is no valid argument that owners are better off as a result of this spinoff. The most optimistic hope that spinco will be a great company and the Marriott name will still have weight.   The main point is that "hope" is now the operative word for the most optimistic.   This is a bad deal for Marriott Timeshare owners.  It is a good deal for Marriott Corporation.  Owners can now hope for the best when before they had no need for hope.
> 
> Furthermore, any new buyers into the system will have to be told as a matter of law that they are not buying from Marriott or into Marriott.  They are buying from or in to Spinco.



I agree. Hope springs eternal but the dumping of MVCI by Marriott is forever. If MVCI was a good thing Marriott would have kept it. If they had forecast a rebound in future sales Marriott would have kept it. If there was a viable business plan to right the sinking ship they would have implemented it (points was an attempt). Marriott has thrown in the towel and all that is left is to  hope that the Spinco division will not file bankruptcy, hope that Spinco will not sell to a company that will not retain or be allowed to retain the Marriott name, and to hope that the assessments and MF increases will be gradual and not 10% to 20% every year. Hope and $5 will buy a cup of latte' at Starbucks.

 In an earlier post I asked if any were considering buying points retail from Spinco/Marriott after researching the current situation and why. No responses. If this is a great thing, a good thing, or no change at all it would seem that some would be jumping on the deals Marriott will be offering soon to sell points. Several Tuggers purchased additional retail points. Some were considering it. Where are all of the HOPEFUL buyers? I wouldn't buy now for 75% off the price they were charging last month. In fact I have already called an interested buyer HOPING I can sell my Marriot week before it is too late.

I think now would be a great time for all the Marriott lovers and eternal optimists to put their money where their mouth is. Since the future is bright, now is the time to buy. Points will keep increasing in price as the company gets stronger and stronger. Buy now at the bottom. If you are that confident buy a bunch of points while they are cheap.

 Will any of the people who think the spin off is great, beneficial, a wonderful thing with a great future go ahead and buy a bunch of retail Spinco/marriott points? I doubt it. Optomistic is one thing, placing money on a bet this risky is another.


----------



## wof45

tombo said:


> I think now would be a great time for all the Marriott lovers and eternal optimists to put their money where their mouth is. Will any of the people who think the spin off is great, beneficial, a wonderful thing with a great future go ahead and buy a bunch of retail Spinco/marriott points?



I believe that those who predict the huge ROFR fees for points resales are wrong, and that in the future there will be the opportunity for tuggers to buy resale points as they buy resale weeks today.


----------



## tombo

wof45 said:


> I believe that those who predict the huge ROFR fees for points resales are wrong, and that in the future there will be the opportunity for tuggers to buy resale points as they buy resale weeks today.



If you are right you can resell any points you buy cheaply now for big money. If I was almost positive gold was going up in the next 5 years I would buy gold. Do you believe it strongly enough to buy points, or are you just hopeful?


----------



## equitax

*Mathematics*

This is not a regular condo though - The unit itself is maintained, and my point was that the underlying value of the land and building was probably worth the $7000.00 paid.

1800 sq ft  / 52 = 34.61 sq ft owned 7000/34.61 = 200 $ / ft.

Though Based on revenue potential its not worth very much.

Math is great - One can prove anything!

Ever sit through the Marriott Sales Presentation?:whoopie: 





wof45 said:


> You should worry a little about your investment at GV since 50 weeks times $7,000 is $350,000 and I'm not sure that a condo in Orlando is worth that these days.


----------



## equitax

*I think you may be missing the point here*

Read bullet I in the Land Trust documents filed with Orange County which govern anyone that "owns" points.

http://or.occompt.com/recorder/eagleweb/downloads/20100149464.pdf?id=DOC576S654.A0&parent=DOC576S654

"Developer may impose an administrative charge, not to exceed One Dollar ($1.00 U.S.) per point, in connection with the waiver of this first right of refusal".

It's not a prediction, its a fact.  So if you are to "convey" 3000 points, MVCI can charge you up to USD 3000 for waiving their right of first refusal, and why would they give you a discount?  They now stand to make more money that the websites out there that gouge people wanting out with listing fees.

Don't pay and they're mortgaged? Even better - Developer still gets them back and burns the Condo Association out of MF due and gets the points back.

The folks at Marriott are not that stupid  - Best way for them to reduce demand for resale is to make resale units less attractive.  The attempts to do so thus far (such as you can't trade your week in for MR points or use MVCI for resale help) have done little to combat that.  And for all those people calling the DP program a "failure", Marriott seems to be cranking out new point owners, as can be seen in the Orange County Florida Official Records.  

The ROFR waiver fees basically mean the developer profits every time points change hands in the secondary market - if and when that market ever comes to exist.  This is a lot better than the $95 they collect right now on a resale week (which they can't raise because its deeded) the other 25 on MGV/MGR transfers goes to the condo association.

Part of the reason why the high pressure sales tactics is so that buyers don't read the legal documents behind what they are buying.  You think anyone was given the opportunity to read through the 157 page document which is the Declaration of Grande Vista Condominium after sitting through a MVCI presentation and before the forked out the AMEX for the down payment?





wof45 said:


> I believe that those who predict the huge ROFR fees for points resales are wrong, and that in the future there will be the opportunity for tuggers to buy resale points as they buy resale weeks today.


----------



## timeos2

equitax said:


> This is not a regular condo though - The unit itself is maintained, and my point was that the underlying value of the land and building was probably worth the $7000.00 paid.
> 
> 1800 sq ft  / 52 = 34.61 sq ft owned 7000/34.61 = 200 $ / ft.
> 
> Though Based on revenue potential its not worth very much.
> 
> Math is great - One can prove anything!
> 
> Ever sit through the Marriott Sales Presentation?:whoopie:



 Except you have no rights to that possible (but unlikely) $7000 in true underlying value. That's one big reason timeshare prices don't track like real estate / whole ownership usually does. That lack of any ability to cash in on the intrinsic value is one big reason why. Even when it's a great deal for owners (like the not-so-long-ago sale & transfer to Harrah's was for the Las Vegas Summerbay resort - some owners actually tried to derail what was/is a great deal - one they could not get now - and almost did it!  Had they "won" that resort and it's owners would be in dire straights rather than enjoying a rebuilt, Silver Crown resort they can be proud of) there is zero guarantee the other thousands of owners will in fact go along. It's a nightmare.    A total sale is so remote as an option that it is really meaningless.


----------



## MOXJO7282

tombo said:


> Will any of the people who think the spin off is great, beneficial, a wonderful thing with a great future go ahead and buy a bunch of retail Spinco/marriott points? I doubt it. Optomistic is one thing, placing money on a bet this risky is another.



What about the naysayers? Are you willing to bet that it's the beginning of the end? Its easy to espouse the sky is falling, that human nature, but its pure speculation at the time for all of us.

Personally I don't have a crystal ball, so I don't know exactly how it will play out but if you put a gun to my head, I'm betting the Marriott timeshare business continues to holds it own and ownership will continue to be a value for years to come. With all that has happen in the TS industry during the downturn, Marriott wasn't going to come out of it smelling like a rose, but I think it will come out of this when the market gets stronger and right the ship.


----------



## windje2000

tombo said:


> I agree. Hope springs eternal but the dumping of MVCI by Marriott is forever. If MVCI was a good thing Marriott would have kept it. If they had forecast a rebound in future sales Marriott would have kept it. If there was a viable business plan to right the sinking ship they would have implemented it (points was an attempt). Marriott has thrown in the towel and all that is left is to  hope that the Spinco division will not file bankruptcy, hope that Spinco will not sell to a company that will not retain or be allowed to retain the Marriott name, and to hope that the assessments and MF increases will be gradual and not 10% to 20% every year. Hope and $5 will buy a cup of latte' at Starbucks.
> 
> In an earlier post I asked if any were considering buying points retail from Spinco/Marriott after researching the current situation and why. No responses. If this is a great thing, a good thing, or no change at all it would seem that some would be jumping on the deals Marriott will be offering soon to sell points. Several Tuggers purchased additional retail points. Some were considering it. Where are all of the HOPEFUL buyers? I wouldn't buy now for 75% off the price they were charging last month. In fact I have already called an interested buyer HOPING I can sell my Marriot week before it is too late.
> 
> I think now would be a great time for all the Marriott lovers and eternal optimists to put their money where their mouth is. Since the future is bright, now is the time to buy. Points will keep increasing in price as the company gets stronger and stronger. Buy now at the bottom. If you are that confident buy a bunch of points while they are cheap.
> 
> Will any of the people who think the spin off is great, beneficial, a wonderful thing with a great future go ahead and buy a bunch of retail Spinco/marriott points? I doubt it. Optomistic is one thing, placing money on a bet this risky is another.



As a potential buyer, I don't think the prospect of Spinco changes the merits of buying developer points, weeks, or any timeshare product representing a hybrid of the two.  They all suck.  Spinco does not change or affect that.  

As an owner, IMHO, Spinco's existence will have no effect on the MVCI level of quality and service.  The Hampton Inn, Motel 6, McDonalds, Morton's, The Palm, etc. all are brands which represent levels of quality and service.  I see no Spinco change coming.  The condo agreements are long term.  Spinco's franchise agreement will be long term.  

Will Marriott will charge Spinco for use of the brand?  Sure.  Branding sells product.  But will Marriott 'brand' housekeeping charges?  Can't see it happening.  IMHO, MF are unlikely to be affected materially if at all.      

Will I be buying points?  Nope.  But that didn't change as a result of Spinco.  And as an owner, I see basically no change.  

Are you shorting Spinco stock?


----------



## SueDonJ

tombo said:


> ... I think now would be a great time for all the Marriott lovers and eternal optimists to put their money where their mouth is. Since the future is bright, now is the time to buy. Points will keep increasing in price as the company gets stronger and stronger. Buy now at the bottom. If you are that confident buy a bunch of points while they are cheap.
> 
> Will any of the people who think the spin off is great, beneficial, a wonderful thing with a great future go ahead and buy a bunch of retail Spinco/marriott points? I doubt it. Optomistic is one thing, placing money on a bet this risky is another.



Does the equivalent work for the TUGgers who think this is the absolute worst move Marriott could have ever made, that their timeshare ownership has just sunk as low as it will ever go?  Should they now prove their position by walking away from their Marriott timeshares in whatever way it's possible to do so?  Just take whatever the loss is today because it's only going to get worse from here on?  Oh, but of course they should, because if they don't then they're not proving themselves worthy of the discussion.  They're not exhibiting the courage of their convictions.

See how ridiculous that sounds?

I'm not overly optimistic with the timeshare market these days, haven't been for quite some time, and have said so repeatedly.  It's been fairly obvious that Marriott and the other industry leaders have had to at least explore options to protect their companies.  I'll say again that I am much more in favor of Marriott making moves as opposed to them standing still.  None of us can predict the future, but I think that branching out into the more-flexible DC product was a good move.  If I needed more timeshares then I'd buy - that system works for me.  And now I think that spinning off the timeshares may turn out to be a good move because it's one that Marriott has successfully navigated before with its hotel business.

I sort of agree with bogey here - this might be the time to increase stock holdings in MAR in advance of the spin-off.


----------



## wof45

equitax said:


> It's not a prediction, its a fact.  So if you are to "convey" 3000 points, MVCI can charge you up to USD 3000 for waiving their right of first refusal, and why would they give you a discount?  They now stand to make more money that the websites out there that gouge people wanting out with listing fees.



Giving themselves a right to charge up to $1 per point does not mean that they will charge that.

In the long run, there will be the ability to resell points, because they are set up for a class action suit.  If retail is now almost $10 per point, and points behave like good weeks, then it is logical that in a market environment like today's they will sell for at least 20% of retail or $2 per point.

If Marriott takes $1, it still leaves $1 for the former owner, which is not much, but still better than the brand X timeshare resales.


----------



## equitax

*Maybe...*

Time will tell. Either way i'll be happy as my unit will have paid for itself after its next two uses. I also own a nice chunk of Marriott inc stock which will mean i get a piece of spinco too. 

Spinco will change the timeshare product again, Marriott will get more fees and spinco will be profitable. And once issues, I'll hold my spinco shares to the bitter end which I don't believe will ever come. R




timeos2 said:


> Except you have no rights to that possible (but unlikely) $7000 in true underlying value. That's one big reason timeshare prices don't track like real estate / whole ownership usually does. That lack of any ability to cash in on the intrinsic value is one big reason why. Even when it's a great deal for owners (like the not-so-long-ago sale & transfer to Harrah's was for the Las Vegas Summerbay resort - some owners actually tried to derail what was/is a great deal - one they could not get now - and almost did it!  Had they "won" that resort and it's owners would be in dire straights rather than enjoying a rebuilt, Silver Crown resort they can be proud of) there is zero guarantee the other thousands of owners will in fact go along. It's a nightmare.    A total sale is so remote as an option that it is really meaningless.


----------



## hotcoffee

MOXJO7282 said:


> . . . . Personally I don't have a crystal ball, so I don't know exactly how it will play out but if you put a gun to my head, I'm betting the Marriott timeshare business continues to holds it own and ownership will continue to be a value for years to come. With all that has happen in the TS industry during the downturn, Marriott wasn't going to come out of it smelling like a rose, but I think it will come out of this when the market gets stronger and right the ship.



I don't know about the "market gets stronger" part, but I agree that things won't change much in terms of whether the timeshare business holds it own or not.  Had Marriott not spun off the new company, timesharing would still never again be what it was in its best days.  I no longer think owning a timeshare is a good idea (if it ever was).

I believe the best hope for timesharing is consolidation.


----------



## gblotter

hotcoffee said:


> I no longer think owning a timeshare is a good idea (if it ever was).  I believe the best hope for timesharing is consolidation.


Yep yep.  Setting aside the recent convulsions and revulsions of Spinco and DC points program, purchasing a timeshare just doesn't make financial sense.  If I was aware of the available timeshare rental options, I'm not sure I ever would have purchased.  I knew enough to be wary of timeshares, but trusted that a Marriott version would be different.  You know what they say about hindsight.  Not bitter - just wiser.


----------



## timeos2

*So we acted - and it means mostly getting OUT*



MOXJO7282 said:


> What about the naysayers? Are you willing to bet that it's the beginning of the end? Its easy to espouse the sky is falling, that human nature, but its pure speculation at the time for all of us.
> 
> Personally I don't have a crystal ball, so I don't know exactly how it will play out but if you put a gun to my head, I'm betting the Marriott timeshare business continues to holds it own and ownership will continue to be a value for years to come. With all that has happen in the TS industry during the downturn, Marriott wasn't going to come out of it smelling like a rose, but I think it will come out of this when the market gets stronger and right the ship.



  I consider myself an aysayer on this - and yes, I acted. I had long been a tempted by and twice nearly did buy into Marriott mostly based on our great (and many) stays at various resorts. What kept me out was the requirement to buy at only one site  - a serious limitation if there isn't one you want to visit almost every use period - so I actually thought the points might be what finally got me to buy in. Of course the overall economy changed, renting went from a premium to a less than annual fee situation (yes, even in the prime times if you find the right, desperate to rent owner! and that offers much better choice of unit / view than exchange or points ownership ever could) and the ponys system they rolled out was a bad joke as far as value for the dollar so we (thankfully) never bought.   

Since then and despite the falling aand therefor attractive prices for even the very best times/resorts/units we, in big part due to my health taking a bad turn, actually have reduced our holdings in timeshare to two owner controlled weeks resorts. One extremely seasonal so we have a fixed summer week - the other a year round demand so its a top value float week there for us. Our beloved Wyndham - a great system and value IMO - has been sold. Our RCI Points were allowed to expire on a RTU. We are close to being done with Wastegate through sale or ROFR - whatever it takes to get roid of that (our one real mistake in timeshare choices) so we have acted to the current state of timeshare by largely divesting.   

Interestingly everything we sold we find we can easily rent now foe less then we had been paying in fees and of course without the purchase cost overhead. A sad state for owners but great for those of us that recognize the opportunity & value it represents. We are taking as many or more vacations - vast majority in timeshares - but paying far less than we would have for the same things as owners!  That alone speaks volumes to the state of timeshares in general and top ones specifically. It is not good.


----------



## dan_hoog

*Timeos2*

Are You are including rentals like Marriott ocean watch - ocean front platinum weeks?  Mine rent for 2500 to 3000 on red week or more from Marriott. Maintenance is just under 1k. 

I don't think you'd have a reliable way to rent under 2k, and even at that week and view selection is poor.  Maybe last minute if your travel flexible, but many are not. 

I find the range to be around 20 percent premium for top views in most resorts (rental).  Of course, new/resale premiums were paid also (resale in my case).


----------



## MOXJO7282

timeos2 said:


> Interestingly everything we sold we find we can easily rent now foe less then we had been paying in fees and of course without the purchase cost overhead. A sad state for owners but great for those of us that recognize the opportunity & value it represents. We are taking as many or more vacations - vast majority in timeshares - but paying far less than we would have for the same things as owners!  That alone speaks volumes to the state of timeshares in general and top ones specifically. It is not good.



We must visit different Marriott resorts at different times because this is the exact reason I still love Marriott, because I can't rent a prime season 2bdrm in Maui, Aruba, Newport Coast, Grand Ocean, Mrytle Beach for anything close to MFs. And neither can alot of people, hence the continued strong demand in my rentals.

So until either of these changes for me, I'll be a happy Marriott owner.


----------



## bastroum

With 2 hours to go on Ebay a Shadow Ridge White Season 2BR EOY has no takers for $1.00. Do you think this has anything to do with this weeks annoucement?


----------



## dioxide45

equitax said:


> The land trust does have value, and while the timeshare interests may be worthless as resales, I am quite  certain that the underlying real property owned by my 3bdr at grande vista is more than the 7000$ I paid for it. Do The math the land and building is worth more that 192 per sq ft.





wof45 said:


> You should worry a little about your investment at GV since 50 weeks times $7,000 is $350,000 and I'm not sure that a condo in Orlando is worth that these days.




I don't think the owners at GV has that much to worry about. According to our fall 2009 newsletter Grande Vista has an estimated value of $900MM. With 900 units, you can do the math.


----------



## tombo

SueDonJ said:


> Does the equivalent work for the TUGgers who think this is the absolute worst move Marriott could have ever made, that their timeshare ownership has just sunk as low as it will ever go?  Should they now prove their position by walking away from their Marriott timeshares in whatever way it's possible to do so?  Just take whatever the loss is today because it's only going to get worse from here on?  Oh, but of course they should, because if they don't then they're not proving themselves worthy of the discussion.  They're not exhibiting the courage of their convictions.
> 
> See how ridiculous that sounds?
> 
> .



Not ridiculous at all. I have contacted a buyer that I was going to sell my week to when the points were introduced. I backed out of that sale thinking that if exchange inventory became hard to get for weeks owners it would be way down the road. I decided that the risk was worth keeping my week back then even though I did not like the change to points by Marriott.

Now I feel that Marriott has spoken loud and clear that they think Mariott timeshares are a product who's time has passed. If you don't believe it look at Marriott. Marriott has divested themselves of their timeshare division and they will not buy any more inventory at any price. Weeks are selling for all time lows yet Marriott refuses to ROFR a week. If Marriott doesn't feel like a $1000 platinum week is worth ROFR'ing, why should I buy it? They after all are the experts on what their product is worth. If Marriott feels like now is a good time to get out, who am I to disagree?

I am almost positive that MF's will rise quickly once the Spinco takes over. Marriott already has some of the highest MF's in the industry and that is only going to get worse. I will be able to rent at most Marriott locations for cheaper than MF's in the next few years IMO. I feel like Marriott timeshares are going to become less and less valuable in the future thanks to the dumping by Marriott and the increased MF's to make profit for the stand alone division who can't make a profit on sales alone. So I truly feel this is a bad time for Marriott owners and I truly expect things to get worse in the next 5 years.  

My buyer thinks they still want my week and if they do I can assure you that they will be the proud owner as soon as I can get the paperwork done. Yes I feel that it is time to walk away and yes I am selling.


----------



## wof45

dioxide45 said:


> I don't think the owners at GV has that much to worry about. According to our fall 2009 newsletter Grande Vista has an estimated value of $900MM. With 900 units, you can do the math.



do you actually believe that the units are worth 1 million each?
or is that the assessed value for the property taxes you are paying?


----------



## SueDonJ

tombo said:


> Not ridiculous at all. I have contacted a buyer that I was going to sell my week to when the points were introduced. I backed out of that sale thinking that if exchange inventory became hard to get for weeks owners it would be way down the road. I decided that the risk was worth keeping my week back then even though I did not like the change to points by Marriott.
> 
> Now I feel that Marriott has spoken loud and clear that they think Mariott timeshares are a product who's time has passed. If you don't believe it look at Marriott. Marriott has divested themselves of their timeshare division and they will not buy any more inventory at any price. Weeks are selling for all time lows yet Marriott refuses to ROFR a week. If Marriott doesn't feel like a $1000 platinum week is worth ROFR'ing, why should I buy it? They after all are the experts on what their product is worth. If Marriott feels like now is a good time to get out, who am I to disagree?
> 
> I am almost positive that MF's will rise quickly once the Spinco takes over. Marriott already has some of the highest MF's in the industry and that is only going to get worse. I will be able to rent at most Marriott locations for cheaper than MF's in the next few years IMO. I feel like Marriott timeshares are going to become less and less valuable in the future thanks to the dumping by Marriott and the increased MF's to make profit for the stand alone division who can't make a profit on sales alone. So I truly feel this is a bad time for Marriott owners and I truly expect things to get worse in the next 5 years.
> 
> My buyer thinks they still want my week and if they do I can assure you that they will be the proud owner as soon as I can get the paperwork done. Yes I feel that it is time to walk away and yes I am selling.



Have you disclosed all this to your buyer?  The spin-off, and that you believe it's being done because Marriott doesn't want to do business in timeshares anymore and has positioned itself to sell them off?  What about your true belief that it's a bad time to be a Marriott owner?  That you believe your buyer could rent what you're selling to him for less than the increased m/f you think he'll be paying?  That if he buys from you, you think what you're selling will become less and less valuable?  

Just wondering if it's only Marriott that has an obligation to protect the buyer's investment, or if it extends to anyone selling Marriott timeshares ...


----------



## timeos2

dan_hoog said:


> Are You are including rentals like Marriott ocean watch - ocean front platinum weeks?  Mine rent for 2500 to 3000 on red week or more from Marriott. Maintenance is just under 1k.
> 
> I don't think you'd have a reliable way to rent under 2k, and even at that week and view selection is poor.  Maybe last minute if your travel flexible, but many are not.
> 
> I find the range to be around 20 percent premium for top views in most resorts (rental).  Of course, new/resale premiums were paid also (resale in my case).



I'm including every area if you do your homework & make enough offers. Not every one will be under annual fees but has always been less than annual fees and a reasonable amount allotted for capitalized purchase cost (spread cost over 15 years) and rental rates are steadily declining  everywhere as annual costs are nearly universally on the rise. One to five years and every resort is likely to  be renting for less than fees especially if the "name fee" rises significantly due to recent changes. My bet is the fees will rise and rents will continue to fall.


----------



## BocaBoy

tombo said:


> I am almost positive that MF's will rise quickly once the Spinco takes over......I feel like Marriott timeshares are going to become less and less valuable in the future thanks to the dumping by Marriott and the increased MF's to make profit for the stand alone division who can't make a profit on sales alone.



This makes no sense.  The timeshare division always had its own P&L within Marriott before the spinoff and its profitability was measured by its own activities.  That will not change with the spinoff.  This type of separate P&L accounting is always the case with a line of business within a larger corporation.  The sale should not have the effect of increasing maintenance fees.

Companies sell or spin off divisions and subsidiaries all the time for many reasons.  Often the result is a win-win.  Often it is not.  But the reason for the success or failure is usually either the management or the nature of the industry itself.  Sometimes success results from the ability to focus better at both the resulting entities.  In this case, if the industry is the problem it would be the same problem without the spinoff.  I am optimistic about the management issue because the executive team at the new company seems to be the best of Marriott as it relates to timesharing. And the focus should be sharper.

Time will tell whether this spinoff works, but I don't see why everybody sees it as the death of Marriott timesharing.


----------



## AwayWeGo

*Bail Out Or Ride It Out ?*




timeos2 said:


> One to five years and every resort is likely to  be renting for less than fees especially if the "name fee" rises significantly due to recent changes. My bet is the fees will rise and rents will continue to fall.


Whoa -- that's scary. 

I mean, under those circumstances (renting for less than maintenance fees), why own a timeshare -- any timeshare ? 

And if too many timeshare owners become ex-owners, with orphan units increasing & units in the hands of fee-paying owners diminishing, then what happens to the resorts whose financial foundations crumble ? 

It sounds like we're headed toward a tipping point. 

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


----------



## tombo

BocaBoy said:


> This makes no sense.  The timeshare division always had its own P&L within Marriott before the spinoff and its profitability was measured by its own activities.  That will not change with the spinoff.  This type of separate P&L accounting is always the case with a line of business within a larger corporation.  The sale should not have the effect of increasing maintenance fees.



When it was a part of Marriott it's stock and viability was part of the same large corporation. They were a piece of the puzzle. For years they were a sizeable portion of Marriott's profit. Now as a stand alone spin off they will have stock and investors who's returns on investment and stock values and dividends will depend entirelly upon what the timeshare division does. Sales are off 30%  over the last 3 years and I personally doubt they will do anything but drop more. Dropping sales, decreasing profits, those trends will lead to drop in stock prices and possibly selling or filing bankruptcy down the road.

Marriott Spinco has 1.5 billion in inventory. Not all inventory is an assett, some inventory like timeshares in this market are a liability. Marriott has to pay MF's on the inventory they own. If owning lots of inventory was good a good thing Marriott would be ROFR'ing lots of it at the current historically low resale prices. They want none at any price. That should speak volumes. If I felt sure that I could buy gold, silver, used cars, or anything else right now including timeshares for a cheap price to resell for a profit, I would be buying. Marriott doesn'twant any more inventory so they feel like it isn't cheap enough yet or they feel like they will have a hard time unloading the 1.5 billion they are already stuck with and they sure don't want anymore liabilities added to the books.

Marriott did not want the timeshare divisions profit/loss as part of their overall company any more so they spun it off. If it was really profitable or forecast to be so in the near future they would have kept it. The spokesperson for Marriott said we never planned on dumping the timeshare divisioon but the last few years... What more do you need to hear? They want to be separate in case things go terribly wrong, and they must see that as a distinct possibility or they wouldn't have done something they in their own words never planned to do. This doesn't even take reading between the lines, this was a flat out statement that things over the last few years got bad enough that they had to dump timeshares.


If the Spinco is not showing good profits, or even worse showing losses the stock will drop and the shareholders will be on the warpath wanting people fired. When they were a part of Marriott it wouldn't be as crucial to have a good bottom line becuase their performance would be intermingled with all of Marriott.  Now the Spinco bottom line is what will determine if they survive or not. Their bottom line over the last few years was bad enough that Marriott no longer wanted them to be a part of Marriott corp. What will happen when stock holders and investers no longer want Marriott Spinco?


Sales will be flat or dropping for the foreseeable future(if not forever) for ALL timeshares, not just Marriott. How does Spinco make a good bottom line with 1.5 billion of inventory liabilities and falling sales? By raising mgt fees and by assessing to renovate. The current CAPTIVE owners are the cash cow for Spinco. A 10% increase in mgt fees is 10% straight to the bottom line. Owners will have to pay or sell. They are captive customers. Owners can vote Marriott out, but other than that they will have to pay whatever amount is on the bill. New points members and owners who converted to points can't even vote to get rid of Marriott as the mgt company no matter how expensive they get.

The experts at Marriott wanted the timeshare division off of their books. If they don't want it anymore neither do I. Time will tell but if I sell now I am sure I can easily buy another week or multiple Marriott weeks cheaply resale a few years down the road if things recover and the future looks better for Spinco Marriott timeshares and timeshares in general. 

Marriott in their infinite corporate wisdom dumped their timeshares so I will bow to their expertise and follow suit. My week will be sold ASAP.


----------



## pgnewarkboy

Although I agree this is a bad deal for owners, it is possible that Spinco can make money besides raising MFs.  They can basically add value through providing tours, special excursions and events, teaming with others in the resort industry etc. They can charge for these extras.


----------



## kjd

A couple of points. If you purchased a timeshare thinking they were going to hold their value you were kidding yourself.  Almost everyone knew that about 50+% of the purchase price of a typical TS is a recoup of marketing costs.  How can anyone think those giveaways to prospective buyers were free? Personally, I purchased from Marriott because of the MRP bonus which provided several overseas vacations.  I'm sure many others did the same thing.

For those of us who also purchased resale a lucky few have reported actually making a profit on selling a TS.  However, for most, if you bought thinking that you were making an "investment" you were also kidding yourself.

Timeshares are and always have been losers from day one of ownership.  They are like cars, golf memberships, RV's, second homes, boats, etc.  The value is in the usage over a long term.  Rental prices vs maintenance fees have nothing to do with the consideration.  You either use a TS and enjoy it or you realize that you made a mistake and try to sell for whatever you can get for it.  Sales people may have told you otherwise for the purpose of making a sale.  

An annual golf membership around here costs about $7,000.  After ten years of golf you have nothing except the experience.  Why would timesharing be any different?  Can I ever recoup the $70,000 I have spent on timeshare purchases?  No, and I never expected to.  I did however take many great vacations and also expect to take more of them in the future.  If you think of it that way you won't needlessly obsess over the Spinco outcome or anything else that may come our way.


----------



## tombo

kjd said:


> An annual golf membership around here costs about $7,000.  After ten years of golf you have nothing except the experience.  Why would timesharing be any different?  Can I ever recoup the $70,000 I have spent on timeshare purchases?  No, and I never expected to.  I did however take many great vacations and also expect to take more of them in the future.  If you think of it that way you won't needlessly obsess over the Spinco outcome or anything else that may come our way.



If you can play golf at your club as a guest for close to as cheaply as you can as a member and save a $7000 outlay, why be a member? With Timeshares that is quickly becoming the case. The club is private and if you don't pay to join you can't play there except on rare occassions. You can rent any week at any resort from owners without buying, and often for less than the owners paid in annual MF's. Even resale why pay $5000 to $10000 to stay at a place you can rent for about the same money as an owner pays to stay there? The $7000 country club membership allows you to play a golf course that you otherwise couldn't play. The timeshare weeks are available for rent to anyone, not just owners. 

 If the annual MF's are $1200 you can in most cases rent from an owner for $1500(or less) costing you $300 more (or less) a year to rent than to own. For 20 years if you pay $300 a year more to rent than own and you have spent a total of $6000 more than being an owner. You saved $5000 to $10,000 by not purchasing and you have saved $1000's on the numerous assessments that owners inevitably paid. 

Every year you can vacation where you want by perusing redweek and finding a really good rental price at any place you want to go. You can vacation on the exact dates you want, even last minute usually for discounted prices. You do not have to plan everything 10 months to a year in advance. No more waiting on the phone or computer hoping you can get the exchange you want. 

If you don't own you simply rent where you want for close to the cost of MF's if not less than MF's every year. Browse the for rent ads and find a heck of a deal each year. I have seen 2 bed room ocean front Marriott's for rent on Redweek for less than MF's at most every resort at one time or another. Some resorts have 20 or 30 lisitngs for less than MF's perpetually listed. 

The years you want to stay home, go on a cruise, go to an area where there are no Marriott resorts you don't have to worry about what you are going to do with your prepaid vacation. No more sweating renting it, no more last minute rental listings for $700 on TUG, no more banking the week because you can't rent it and you can't use it. You just pay to rent your annual vacation(s) at a price you feel is a good deal, not at the price Marriott feels you should pay each year.

Over the last few years owning has become more of a liability than a savings as rental prices keep dropping and MF's keep rising. I only purchased resale and even at those prices nowadays it is better to rent than own in most cases.


----------



## timeos2

*Why Marriott is getting out is clear. Same for owners*



kjd said:


> An annual golf membership around here costs about $7,000.  After ten years of golf you have nothing except the experience.  Why would timesharing be any different?  Can I ever recoup the $70,000 I have spent on timeshare purchases?  No, and I never expected to.  I did however take many great vacations and also expect to take more of them in the future.  If you think of it that way you won't needlessly obsess over the Spinco outcome or anything else that may come our way.



Quite true and it is easy to ignore rent value vs fees until the spread becomes so large as to be impossible to to do. It may not apply immediately to the most prime weeks but if allowed to continue eventually it becomes impossible to ignore. 

Once fees start to equal or exceed the rental value plenty of owners notice and many, especially the mid-range "value" seekers - will bail one they realize they are paying $1300/year for something they could easily rent from any number of sources for $700-$900.  It is too much of a difference to justify. Once they bail the fees for those that remain go higher & the process gains a repeat momentum. Not good. Suddenly (in a few years) even the most in demand prime times cost more in those fees - made worse when the resort pays a stiff premium for a name branding -  and even the top owners start to take the cheaper option. A small premium to own is acceptable as it may get a view, reservation priority, etc that is worth a few extra $$. But if the spread becomes too large those small perks fade away. That appears to be the case at most Marriotts, Stawoods, etc and getting worse.  

It has never been a strong market and current conditions have weakened it even more.  While holding on to what you already paid for may make sense for now it is unlikely that any resale buyers are going to offer much to take over litlle more than the obligation to fees that dont represent a good value today.  The whole picture changes when the often big purchase cost is a nearly certain write off rather than a potential income asset. It's a big part of why Marriott sees inventory as an albatross rather than an valuable  asset. Why would it be any different for an owner of similar inventory just far less of it? 

Hold & use to squeeze value out. Assume little to no resale value and make your best moves based on that unfortunate assumption. Any $$ you can get out with is a bonus and it falls everyday that you hold these rapidly depreciating and costly to hold "assets".


----------



## dan_hoog

John - I appreciate the response.  

The maintenance fee plus amortized ownership cost is a different hurdle than maintenance fees alone.  Of course, for many resale timeshares, these are effectively the same.

I can believe there is a tax, in effect, on the Marriott branded timeshares due to the change.  I personally think this is a sub-10% premium that could gradually leak into maintenance fees.  There are two mouths to feed now.   Of course, other factors drive maintenance fees as well and over 3 to 5 years would have much more effect, IMO.

I agree maintenance fees will rise, but don't agree rental rates would necessarily fall.  Many of the same factors that drive costs up for maintenance fees are the same types of inflation factors that will drive up rentals.  I just don't believe you'd see maintenance double while rentals drop 50% (not that you put that specific scenario forward).

You can potentially buy an ipad for $41 on Quibids.com.  However, most people can't.  I'm sure a dedicated savvy shopper and tough negotiator will be able to find incredible rental deals now and forever. However, many people will pay the premium (meaning higher rental fees) for early deal certainty.  

When I rent out at reasonable rates on redweek, I've always gotten takers at or very near the asking price within 30 to 45 days.  I've rented several units in the last few months and I'd say it is actually easier than in past years - and no one has asked me for discounts recently.

I agree the timeshare economics continue to be challenged and may get worse.  However, sometimes a seemingly insurmountable challenge or obstacle is the catalyst for a shift or change that could be beneficial.  Maybe this will be one of those cases (though I'd rather that outcome in larger off-topic issues of importance to civilization).




timeos2 said:


> I'm including every area if you do your homework & make enough offers. Not every one will be under annual fees but has always been less than annual fees and a reasonable amount allotted for capitalized purchase cost (spread cost over 15 years) and rental rates are steadily declining  everywhere as annual costs are nearly universally on the rise. One to five years and every resort is likely to  be renting for less than fees especially if the "name fee" rises significantly due to recent changes. My bet is the fees will rise and rents will continue to fall.


----------



## wof45

of course, Marriott has a very different view of the timeshare market, and of what they are doing with timeshares.

remember that they do not plan to create a new company until the end of 2011.

here is an abbreviated version of their 10K filing --
http://biz.yahoo.com/e/110218/mar10-k.html

2010 Compared to 2009

Operating income increased by $847 million to operating income of $695 million in 2010 from an operating loss of $152 million in 2009. The increase in operating income reflected a favorable variance of $614 million related to Timeshare strategy-impairment charges recorded in 2009, $116 million of higher Timeshare sales and services revenue net of direct expenses, a $73 million increase in base management and franchise fees, a $51 million decrease in restructuring costs, $28 million of higher incentive management fees, and $23 million of higher owned, leased, corporate housing, and other revenue net of direct expenses, partially offset by a $58 million increase in general, administrative, and other expenses. We note the reasons for the increase of $73 million in base management and franchise fees as well as the increase of $28 million in incentive management fees as compared to 2009 in the preceding "Revenues" section.


----------



## BocaBoy

tombo said:


> *When it was a part of Marriott it's stock and viability was part of the same large corporation.* They were a piece of the puzzle. For years they were a sizeable portion of Marriott's profit. Now as a stand alone spin off they will have stock and investors who's returns on investment and stock values and dividends will depend entirelly upon what the timeshare division does.
> 
> Marriott did not want the timeshare divisions profit/loss as part of their overall company any more so they spun it off. *If it was really profitable or forecast to be so in the near future they would have kept it.*
> 
> 
> If the Spinco is not showing good profits, or even worse showing losses the stock will drop and the shareholders will be on the warpath wanting people fired. *When they were a part of Marriott it wouldn't be as crucial to have a good bottom line becuase their performance would be intermingled with all of Marriott.*



Do you have any conception at all of the factors that cause a large corporation to spin off or sell a subsidiary or division?  A losing business is only one of many reasons.  Often the best time to divest is when the spinoff's future looks good.  

When it is part of a large corporation the viability and continued existence of a division or subsidiary is based on its own profitability.  Intermingling results does not make the large corporation want to keep it any more than if it were separate.  Also, there are a lot of reasons to spin off or sell a division other than a bleak future.  Shareholder value is a key one.  Often divesting a profitable division will result in more shareholder value than keeping them together.  Often the sum of the parts is worth more than the whole.  Witness GE's sale of NBC Universal to Comcast.

I spent my entire working career in the executive suites of Fortune 50 companies and the business analysis on TUG is amazingly naive and shallow.  As we used to say about consultants:  "Often wrong but never in doubt."


----------



## BocaBoy

kjd said:


> For *those of us who also purchased resale a lucky few have reported actually making a profit on selling* a TS.  However, for most, if you bought thinking that you were making an "investment" you were also kidding yourself.



This is obviously true in most cases, but nothing is absolute.  I bought all of my timeshares directly from Marriott. I have sold two of them, both at a profit.  One in Orlando after 20 years of ownership and one in Hawaii after only four years of ownership.  Both were sold in the last two years.  However, that will be a lot harder going forward for a lot of reasons, one being the fact that MVCI's Resale Operations division is not an "Approved Broker" and purchasers even through them at developer prices are not being allowed to join the DC program.


----------



## tombo

BocaBoy said:


> Do you have any conception at all of the factors that cause a large corporation to spin off or sell a subsidiary or division?  A losing business is only one of many reasons.  Often the best time to divest is when the spinoff's future looks good.
> 
> When it is part of a large corporation the viability and continued existence of a division or subsidiary is based on its own profitability.  Intermingling results does not make the large corporation want to keep it any more than if it were separate.  Also, there are a lot of reasons to spin off or sell a division other than a bleak future.  Shareholder value is a key one.  Often divesting a profitable division will result in more shareholder value than keeping them together.  Witness the GE sale of NBC Universal to Comcast.
> 
> I spent my entire working career in the executive suites of Fortune 50 companies and the business analysis on TUG is amazingly shallow.  as we used to say about consultants:  "Often wrong but never in doubt."



When the official statement is:
""We've never really been interested in walking away from this business," Marriott Chief Operating Officer Arne Sorenson told the Journal on Monday. "But the last few years have been extraordinarily difficult. This recession was harder on the timeshare business than last recessions."



Yes there are many reasons to spin off a division. Sometimes the reason is obvious as in this case where you have such a definitve reason given by the CEO in a written statement. With your vast corporate experience please interpret Marriott's statement that they never planned on divesting the timeshare division but the last few years performance of the timeshare division forced them to do so. Why did they not say that they had planned this for years? Why not say that this was going to be a world class financially strong company rather than to state that this company will not have investment grade stock? 

Does anyone really believe that the official corporate statement translates to this a great time to sell timeshare points? Does it mean that there is a lot of interest in stock puchases for this venture, so we struck while the iron is hot?  Nope. It means that things reached a tipping point and they wanted out. 

Yes there are many reasons wy companies divest themselves of part of their company, but rarely is it spelled out any more clearly than in Marriott's official statement. It does not mean that the stand alone company won't survive. It doesn't mean that it will or won't sell to another party in the future. It does mean that Marriott didn't want to gamble on it anymore after the last few years  dismal performance of MVCI and their forecast for future perfomance. of course consultants and prognosticators can always be wrong. If you feel that this spinoff will be a great company buy stock. If I was considering this stock in any way it would be to short sell. JMHO.


----------



## wof45

tombo said:


> Does anyone really believe that the official corporate statement translates to this a great time to sell timeshare points?



I suggest looking at the 10K filing rather than posts here.


----------



## sandytoes

*e-mail from Marriott to Vacation Owners*

I haven't read all the posts regarding this issue so this may have already been posted. If not here is a recent e-mail received for Marriott.


Dear Marriott Vacation Club® Owner,
I have some important news about Marriott® Vacation Club International that I would like to share with you. On
February 14​​​​​​​​​th, Marriott International announced plans to divide into two separate publicly traded companies — a
lodging company and a timeshare company. Marriott Vacation Club International (MVCI) and its affiliates will remain
the exclusive developer of timeshare and fractional products for Marriott® and The Ritz-Carlton®, focused on
maximizing growth and development within this exciting industry. Marriott International will concentrate on its
global hotel management and franchise business. We believe this transaction will position MVCI to create new and
expanded offerings for you as Owners.
Most importantly, you should experience no changes in your ownership from this transaction. We will still operate
under the Marriott brand and continue to develop and manage to the same exacting standards that have made us the
recognized industry leader worldwide. You should see no impact in your service, resort experiences or usage options,
including access to benefits and lodging properties through the Marriott Rewards® program as a result of this transaction.
For more than 26 years, you have helped us create the finest and most extensive timeshare resort system in the
world. With the dramatic success of the new Marriott Vacation Club Destinations™ program, we have meaningfully
expanded your vacation options. As we enter this exciting new chapter, each and every MVCI associate looks forward to
continuing to create new and exciting vacation experiences for you, your family and friends for generations to come.
We thank you for being a loyal Marriott customer and we promise to continue to work hard to deliver the
“Unforgettable Experiences” that you have come to expect from us. We will continue to provide you with updates
of this transaction as the year progresses. Thank you for your continued support.
Best regards,
Steve Weisz
President​
Marriott Vacation Club International


----------



## timeos2

*Yes read the paper - then remember this is the best it can be*



wof45 said:


> I suggest looking at the 10K filing rather than posts here.



Great advice especially if you want the absolute best face on the facts that a well tuned spin machine can roll out.  Even the most optimistic reading of that document can only come to the conclusion that at best they see the future as flat vs the desired strong growth of five years ago and that they have waited as long as they are comfortable with for it to once again shine. It isn't likely to happen thus the seemingly sudden "interest to walk away" vs hanging on to a soon to be profitable, former star division. 

When you read it there really isn't any other way to interpret as they have put the absolute best light possible on the situation and it is little more than a fading flashlight rather than a powerful search light beacon of hope. What they say is the very best it could be and it isn't good. That speaks volumes. 

Again that all has to do with stockholders. As owners the question is will use value be maintained? Recent history says no and that isn't good for owners OR stockholders. The industry is in a big hurt - far deeper than most others and as we know most aren't feeling real positive now. Being below that already low bar leaves very little positive to say.


----------



## tombo

wof45 said:


> I suggest looking at the 10K filing rather than posts here.





> From the 10k report:
> 
> "Costs in excess of enrollment revenue for the new points-based program totaled $13 million and is reflected in our Income Statement in Timeshare sales and service, net of direct expenses.
> 
> Given the amount of inventory we have, we do not expect to develop new timeshare resorts in the near term.".




So costs exceeded revenue on points sales meaning that it is a money loser so far. Marriott will not develop new timeshare resorts because they are loaded up with inventory. These are bad things and good reasons to dump the timeshare division.




> from 10 k report"In response to lower demand for our Timeshare products, we have correspondingly reduced our projected investment in new Timeshare development. While our Timeshare segment historically generates positive operating cash flow, year-to-year cash flow varies based on the timing of both cash outlays for the acquisition and development of new resorts and cash received from purchaser financing. We include timeshare reportable sales we finance in cash from operations when we collect cash payments. The following table shows the net operating activity from our Timeshare segment (which does not include the portion of income from continuing operations from our Timeshare segment). In 2010, 2009, and 2008, new Timeshare segment mortgages were $256 million, $302 million, and $747 million, respectively, and collections totaled $347 million (which included collections on securitized notes of $230 million), $155 million, and $222 million, respectively. ".




New timeshare mortgages down from $747 million in 2008 to $256 million in 2010 and collections are up to $347 million on less total securitized notes. A lot less future income in reduced mortgages from reduced sales. It is why they want out. 

Have you seen positive things I am missing in the 10K? Yes they have some positive glowing statements about how the divesture of timeshares position them to be more profitable, but the fact is they are becoming less and less profitable. They put a positive spin on the things they could, but bottom line is it is a business with negative growth.


----------



## wof45

timeos2 said:


> Great advice especially if you want the absolute best face on the facts that a well tuned spin machine can roll out.



Perhaps you don't realize that this is Marriott's official corporate filing.  This is the document that they can be sued for false information.  All of the newspaper articles, quotes, etc are just comments that they do not have to answer to.


----------



## wof45

tombo said:


> New timeshare mortgages down from $747 million in 2008 to $256 million in 2010 and collections are up to $347 million. A lot less future income in reduced mortgages from reduced sales. It is why they want out.



my question to you is, how is this any different or worse than any other real estate developer before the recession and recovering from the recession?


----------



## SueDonJ

tombo said:


> When the official statement is:
> ""We've never really been interested in walking away from this business," Marriott Chief Operating Officer Arne Sorenson told the Journal on Monday. "But the last few years have been extraordinarily difficult. This recession was harder on the timeshare business than last recessions."...





wof45 said:


> Perhaps you don't realize that this is Marriott's official corporate filing.  This is the document that they can be sued for false information.  All of the newspaper articles, quotes, etc are just comments that they do not have to answer to.



That's something to consider for sure, although it's not necessarily true that the Marriott spokespersons don't have to answer to the quotes attributed to them.  What is true, though, is that their quotes can be taken out of context and/or spun by newspaper reporters to perhaps assign them a different meaning than the one which was intended.

The above quotes that Tombo and several others are focusing on, for example - what is their context?  What questions did the WSJ reporter ask in order to elicit those responses?  The way Arne Sorenson's words are used in the newspaper article seem to give the appearance that he says Marriott IS "walking away from this business."  And perhaps not coincidentally, that's the meaning which several naysayers have attributed to Marriott.  But that's in direct contrast to MANY other quotes from Marriott execs as well as the official statement issued by Marriott.  So which do you place more stock in (no pun intended  ) - the quotes which may be out of context, or the complete official statement?


----------



## melroseman

So I’m just a lurker, but having lurked for a long time let me summarize my take on the posts here (or at least the vast majority of them).  Marriott should ignore the economic realities of 2011, the timeshare market today, the real estate market in general, and its own shareholders and operate solely for the benefit of and to the advantage of its timeshare owners.  I guess no one here can imagine why they wouldn’t do that. 
If you really want to turn this "timeshare market" around and give Marriott a reason to operate as we would like,  let’s all buy multiple resale weeks so there are no defaults and the equivalent of oh, say  8 or 9 weeks worth of DC points.  Let's get all of our friends to do the same.  Let’s all finance 90% of those purchases with Marriott at 12%.  Then Marriott can eliminate inventory, finish unfinished projects profitably, exercise its ROFR because demand is so strong, and start new projects; coincidentally resale values will rise.  Watch how quickly they get back into the “timeshare business.”
Or, based on what I read here, we could all kill ourselves.  I think I’ll just sit tight and do nothing but enjoy my weeks or rent them.  Never intended to sell anyway.  The investment has been no worse than Bank of America.


----------



## chalee94

tombo said:


> Why not say that this was going to be a world class financially strong company rather than to state that this company will not have investment grade stock?



again, some of you seem to be hung up on this point.

for one, it's the debt rating...not the stock rating.

you do realize that starwood debt, for one example, is not "investment grade?"  you know, the crummy corporation that manages the crappy westin brand?  stock currently in the $60s...up over 30% this year?  not. investment. grade.

marriott corp debt is above "investment grade" but not by that much...well below a really financially strong "A"-rated corporation.

the reason to spin off the timeshare side is as simple as MAR + MVCI currently = $41, but management thinks that after the spinoff MAR's $38 (or whatever) portion will move more easily to $50 while MVCI will probably spin its wheels in the $3-4 range.  separate, the entities will be worth more.  that's appealing to shareholders and that's why they are splitting the entities.  debt for MVCI will likely cost a little more if they need to issue new debt - a nonissue if they don't.  not ideal for the timeshare side but not necessarily the harbinger of doom, either.

i don't have any skin in this game as i don't own MVCI.  i don't think this spinoff is great news for MVCI or timesharing in general.  but some of these posts look like an overreaction, IMO...


----------



## pgnewarkboy

Over reacting?  I think it is exactly the opposite.  I am sure it makes perfect sense for Marriott - so what. If I am a marriott stockholder that makes me happy.  Is that supposed to make owners happy?  In life, you win some and you lose some.  For owners this goes into the loss column. As some have posted, it doesn't mean you still can't have some great vacations but it also doesn't mean you have to be happy about the situation.  The owners "were sh....on" by Marriott.  Plain and Simple.


----------



## funtime

"New timeshare mortgages down from $747 million in 2008 to $256 million in 2010 and collections are up to $347 million on less total securitized notes.""

I believe that it is a fallacy to think that the only reason Marriott created "Spinco" was because it believes that timeshare company is a money loser.  More to the point is the fact that the income from timeshare company is unpredictable and publically owned companies  enjoy predictable income, steady as she goes, quarter after quarter as they file their 10(k) reports.

The second thing is probably less visible.  Did Marriott in the heydey bundle up its timeshare mortgages and  "securitize" them to great profit?  I do not know but if it did, those days are over.  I imagine a lack of viable secondary markets to sell timeshare mortgages has much to do with the spinoff.  

So too, the hotel industry suffered greatly in the recession.  So, the fact that the hotel industry is now on the rebound means that without the timeshare division, Marriott can show a steady uptick  with its hotels.  When you slide down so low on the hotel side, it does not take too much to improve on performance.

Lastly, for those that think that timeshares have "no value" because they believe that they can rent them for cheaper than the maintenance fees, I do not think that that situation is accurate or will continue - at least not with Marriotts.   All it takes is seeing one or two last minute deals to become convinced that rentals will always be cheaper than maintenance fees.  

Sure you can get great deals in Orlando in September, that I get, and sure we have our last minute board with great deals, but for the most part, the tugger thread on rentals expresses optimism - people are having success at rentals.  Renting timeshares is a learning experience and I believe that the more sophisticated the owners get, the more they can utilize their own timeshares including renting them on the open market for more than maintenance fees.  Just like hotel rates, timeshare rentals will tick back up.   So I for one will watch with interest - cherish my two Marriotts, enjoy them as weeks - and  not buy points - and continue to trade them, use them or rent them.  Funtime


----------



## kjd

There seems to be an assumption here about the rental market that may not be true.  The assumption is that rental prices will always be lower than yearly maintenance fees.  History tells us that will not be the case, even between different resorts at the same time.  The rental market has a different set of conditions than the resale market.  Just as the housing market has when it comes to renting vs buying.

Right now I'd agree it may make more sense to rent provided you're dealing with a legitmate owner and all of the risk-taking rentals involve.  In the future the market for vacation resorts could become quite constrained, (particularly if more builders walk away) as well as inflationary pressures increase.  Rental timeshares will always rent at a discount to comparable hotel space.  Maintenance fees have nothing to do with it. The hotels and TS resorts would be faced with the same inflationary pressures causing a spike in their nightly rates and maintenance fees.  

There was a time when the rental housing market was so constrained in certain areas of the country that rent controls had to be put on.  There was a shortage of supply.  If more companies like Marriott "walk away" one of two things could happen to the market.   Older timeshare stock will not be replaced or properly maintained. Timesharing will become less appealing to the public thereby driving rental prices and property values down.  Or, premium resorts like Marriott, if they are well maintained, will become more expense to rent or purchase.  Maybe both could happen at the same time.  Who knows?


----------



## wof45

kjd said:


> There seems to be an assumption here about the rental market that may not be true.  The assumption is that rental prices will always be lower than yearly maintenance fees.



the other variable is time of year.
if you look at the DC points schedules for choosing times, they reflect the demand for that time period at that place.

Historically, and even now, platinum rents are twice the MF.  during gold time the rents typically exceed the MF and during silver time the rents are usually less than the MF.

Which just means that platinum is a much better deal as long as you don't pay retail for the TS week.


----------



## camachinist

> Also, can someone enlighten me on the importance of TS rental rates - didn't we buy our timeshares for vacations?



Sure, the rental income provided me a cushion while I cared for my terminally ill mother and could not otherwise vacation. Hope that makes sense.


----------



## MOXJO7282

timeos2 said:


> I'm including every area if you do your homework & make enough offers. Not every one will be under annual fees but has always been less than annual fees and a reasonable amount allotted for capitalized purchase cost (spread cost over 15 years) and rental rates are steadily declining  everywhere as annual costs are nearly universally on the rise. One to five years and every resort is likely to  be renting for less than fees especially if the "name fee" rises significantly due to recent changes. My bet is the fees will rise and rents will continue to fall.



With no disrespect intended I don't see how you have the experience with Marriott to make these statements. What Marriotts have you ever owned?

Have you owned at the Oceanwatch, Maui, Aruba, Grand Ocean Hilton Head, Newport Coast, or at any of the prime ski weeks resorts?


Those prime units still rent at a high premium well over MF. Yes costs are going up and rents have come down from really large profits (I "know" someone who rented an Aruba Surf OV for one year at $4700) to now about $3000-$3200. So even in worst case scenerio Aruba Surf MFs go to $1800 and rents come down to $2500,  I'm still happy.

Just because you pound the pavement and can get lucky that doesn't mean that is the norm. Most don't have the savvy you would have. I have so much activity on all of my resorts and that is not about to change.


I still maintain its too early to tell the long term effects of this spin-off and even if it have a negative effect it won't be as extreme as the naysayers contend, especially at the locations I own


----------



## timeos2

MOXJO7282 said:


> With no disrespect intended I don't see how you have the experience with Marriott to make these statements. What Marriotts have you ever owned?



As it turns out never owned any - came very close twice to purchase - and now most likely never will. 

Renting and trading for Marriotts has made getting any we've desired to visit very easy to obtain. Unlike most ownerships we don't have to worry about going back to the one or two we would own - we get our choice of ALL basically on demand. Between trade in with a much lower fee based / lower purchase cost resort or straight rental we have obtained only prime time units and in every case (over a dozen since 2007) at or below the annual fee for that unit - not even taking in the amortized purchase cost on top of that.  It is why we ended up not buying - why pay more to get less choice? 

Not every renter is going to know where to look or how to offer to get deals at or below annual fees bt more and more are and the trend is not good for owners. Fees are on an upswing while rental rates are in a virtual free fall as inventory - even prime times - are burying the market.  It is as bad as it has ever been and little hope of improvement any time soon. 

I love Marriott resorts and see why owners are protective of them. But as an outsider looking in (and renting /trading for the best there are at what is usually a low price) it is clear they are not worth what the owners want to believe they are. Try selling and you'll see for yourself. 

Use and or rent what you own & enjoy for what it is - a quality resort for vacation and as long as you get what you consider good value things are good. I can see that happening now for current owners and I like it. Use & enjoy what you like. Thinking you have a valuabe asset to sell or one that will always be an easy rent for more than fees isn't reality but if it helps you feel better then believe it. It won't hurt until you go to collect and find a slightly different reality actually rules.  

My resorts are THE BEST and hold value like no other TO ME. Unfortunately if I tried to sell them with numbers to reflect how I feel about them I'm going to be disappointed. The market is what it is and my likes or beliefs aren't going to matter when someone else has to write the purchase or rent check. Suddenly I'm competing with thousands of other timeshares over a rare thing - a buyer/renter - and they KNOW it's a buyers market like no other has ever been.  They drive hard bargains now and rightfully so. Thats reality today.


----------



## MOXJO7282

timeos2 said:


> As it turns out never owned any - came very close twice to purchase - and now most likely never will.
> 
> Renting and trading for Marriotts has made getting any we've desired to visit very easy to obtain. Unlike most ownerships we don't have to worry about going back to the one or two we would own - we get our choice of ALL basically on demand. Between trade in with a much lower fee based / lower purchase cost resort or straight rental we have obtained only prime time units and in every case (over a dozen since 2007) at or below the annual fee for that unit - not even taking in the amortized purchase cost on top of that.  It is why we ended up not buying - why pay more to get less choice?
> 
> Not every renter is going to know where to look or how to offer to get deals at or below annual fees bt more and more are and the trend is not good for owners. Fees are on an upswing while rental rates are in a virtual free fall as inventory - even prime times - are burying the market.  It is as bad as it has ever been and little hope of improvement any time soon.
> 
> I love Marriott resorts and see why owners are protective of them. But as an outsider looking in (and renting /trading for the best there are at what is usually a low price) it is clear they are not worth what the owners want to believe they are. Try selling and you'll see for yourself.
> 
> Use and or rent what you own & enjoy for what it is - a quality resort for vacation and as long as you get what you consider good value things are good. I can see that happening now for current owners and I like it. Use & enjoy what you like. Thinking you have a valuabe asset to sell or one that will always be an easy rent for more than fees isn't reality but if it helps you feel better then believe it. It won't hurt until you go to collect and find a slightly different reality actually rules.
> 
> My resorts are THE BEST and hold value like no other TO ME. Unfortunately if I tried to sell them with numbers to reflect how I feel about them I'm going to be disappointed. The market is what it is and my likes or beliefs aren't going to matter when someone else has to write the purchase or rent check. Suddenly I'm competing with thousands of other timeshares over a rare thing - a buyer/renter - and they KNOW it's a buyers market like no other has ever been.  They drive hard bargains now and rightfully so. Thats reality today.



Again I respectfully disagree with your comments, and again question how you think you're a Marriott expert. 

For example, this comment "*Fees are on an upswing while rental rates are in a virtual free fall as inventory - even prime times - are burying the market. It is as bad as it has ever been and little hope of improvement any time soon." * in simply not true. Rental prices for any prime week at the prime locations are not in a free fall. That I can tell you from my personal experience over the last 10 years of Marriott ownership. 

Have they come down over the years? of course they have. However 2011 was a very good year, better than 2009 and 2010 and the demand was very high. 

As for resale prices again they are coming down, but many weeks still have very good value. I know I have afew that are still have maintained good value.

My Grand Ocean gold OF was purchased for $13.8K in 2004. I'm pretty sure I'd get that or a tad more. Also my Oceanwatch OS July 4th would sell for around $20k. Still good value in my book.

So things are not as dire as you predict from my and any Marriott prime week owner


----------



## saturn28

MOXJO7282 said:


> Again I respectfully disagree with your comments, and again question how you think you're a Marriott expert.
> 
> For example, this comment "*Fees are on an upswing while rental rates are in a virtual free fall as inventory - even prime times - are burying the market. It is as bad as it has ever been and little hope of improvement any time soon." * in simply not true. Rental prices for any prime week at the prime locations are not in a free fall. That I can tell you from my personal experience over the last 10 years of Marriott ownership.
> 
> Have they come down over the years? of course they have. However 2011 was a very good year, better than 2009 and 2010 and the demand was very high.
> 
> As for resale prices again they are coming down, but many weeks still have very good value. I know I have afew that are still have maintained good value.
> 
> *My Grand Ocean gold OF was purchased for $13.8K in 2004. I'm pretty sure I'd get that or a tad more. *Also my Oceanwatch OS July 4th would sell for around $20k. Still good value in my book.
> 
> So things are not as dire as you predict from my and any Marriott prime week owner



I just paid in November $1500 for a Marriott Surfwatch Gold Oceanfront week on Ebay. So, don't think you are going to get $13,800 or more for a Marriott Grand Ocean Gold week.


----------



## timeos2

saturn28 said:


> I just paid in November $1500 for a Marriott Surfwatch Gold Oceanfront week on Ebay. So, don't think you are going to get $13,800 or more for a Marriott Grand Ocean Gold week.



THAT is exactly what I mean. Sitting back and stating "My Grand Ocean gold OF was purchased for $13.8K in 2004. I'm pretty sure  I'd get that or a tad more. Also my Oceanwatch OS July 4th would sell  for around $20k. Still good value in my book." is easy - when they actually try to SELL at those levels they find out the cold slap of reality (MUCH lower price if they really want to sell). 

You don't have to own to know what the market is doing. And in many ways not owning allows a much clearer view of things as I have no money in play to protect.  

People can convince themselves what they own has high value X ad until they actually try to get it and can't no amount of proof that the real number is a much lower value will get through to them.  It hurts to realize that and its easy to believe it isn't so. Human nature at work.


----------



## MOXJO7282

saturn28 said:


> I just paid in November $1500 for a Marriott Surfwatch Gold Oceanfront week on Ebay. So, don't think you are going to get $13,800 or more for a Marriott Grand Ocean Gold week.



Boy how did I miss that one! I find that hard to believe, sure it wasn't silver season? Even so that is a total aberration, and that is what the naysayers hang their hat on.  If it was a *gold season OF* you could easily flip that for $5k or more, heck I'll offer that to you right now.

Anyone else take a SW gold season OF for $5k? 



I don't know the Surfwatch market so maybe its not that desirable as GO but just the other day and often on ebay I see GO gold oceanside sell for approx $5k so perhaps GO is way more valuable that Surf Watch.

As for Oceanwatch, you obviously don't know the market like true owners do.

What do the naysayers think an Oceanwatch Pat + would retreive resale?

That is one of the highest demand propoerties out there. A straight plat with OS or OF view would definitely garner $13-$15k resale. If you don't think so you're misinformed.


----------



## MOXJO7282

I'll also add comments about Newport Coast. Resale prices through the DC and currently NCV plats are selling for $8-9K.  Many many sell at that price point.

So how to explain that performance? Now you'll say that won't last, but you said the same dire stuff after the DC, and resales prices have stayed firm and rental prices have acutally risen slightly, at least for me.


----------



## MOXJO7282

Here a list of recent ebay sales (sales not just listings) I've been watching. This doesn't reveal what the naysayers are espousing.

Now these are just from the last few weeks/months. I'd love to see the flood of ebay resales like the $1500 SW gold OF that should be out there if things are as bad as suggested.

Please take of all the NCV, and the Aruba Surf that sold and the Barony Beach OS, and the GO gold OS that sold for $5k




MARRIOTT II 5 BOSTON Massachusetts TIMESHARE PLATINUM 
Enlarge MARRIOTT II 5 BOSTON Massachusetts TIMESHARE PLATINUM

Member id memorablevacations ( Feedback Score Of 366)    99.1%
 17 $7,450.00
 --
 Ended
 Visit seller's store 
More actions 


MARRIOTT KAUAI BEACH CLUB GOLF OCEAN HAWAII TIMESHARE  MARRIOTT KAUAI BEACH CLUB GOLF OCEAN HAWAII TIMESHARE

Member id alltimevacations-2008 ( Feedback Score Of 149)    97.1%
 28 $4,249.99
 --
 Ended
 View similar items 
More actions 

2BR MARRIOTT'S NEWPORT COAST VILLAS, PREMIER, TIMESHARE 
Enlarge 2BR MARRIOTT'S NEWPORT COAST VILLAS, PREMIER, TIMESHARE

Member id tochoa25 ( Feedback Score Of 1183)    100.0%
 19 $8,600.00
 --
 Ended
 Visit seller's store 
More actions 

MARRIOTT Grande Ocean FiveStar 2-BR Timeshare For Sale!  MARRIOTT Grande Ocean FiveStar 2-BR Timeshare For Sale!

Member id shares3000 ( Feedback Score Of 734)    98.7%
 34 $5,210.00
 --
 Ended
 View similar items 
More actions 


    eBay Note: The seller relisted this item.           
Marriott Kauai Beach Club Timeshare Lihue Hawaii 
Enlarge Marriott Kauai Beach Club Timeshare Lihue Hawaii

Member id snownsun4ever ( Feedback Score Of 571) 98.4%
 19 $4,550.00

  MARRIOTT'S NEWPORT COAST VILLAS PLATINUM TIMESHARE 

Member id timeshare*realty ( Feedback Score Of 85) 100.0%
 12 $8,900.01
 --
 Ended
 View similar items 
More actions 

MARRIOTT MAUI OCEAN CLUB TIMESHARE PLATINUM *OCEANFRONT  MARRIOTT MAUI OCEAN CLUB TIMESHARE PLATINUM *OCEANFRONT

Member id hbmini ( Feedback Score Of 940) 100.0%
 0 $7,495.00
 --
 Ended
 View relisted item 
More actions 

    eBay Note: The seller relisted this item.           
Jeep : Grand Cherokee  Jeep : Grand Cherokee

(Reserve Not Met)

Member id race13car ( Feedback Score Of 244) 100.0%
 32 $15,100.00
 See description
 Ended
 View relisted item 
More actions 

    eBay Note: The seller relisted this item.           
2BR Marriott's Ocean Pointe TIMESHARE - Platinum Season 
Enlarge 2BR Marriott's Ocean Pointe TIMESHARE - Platinum Season

Member id greattimesharebargains ( Feedback Score Of 450)    99.0%
 21 $8,651.00
 --
 Ended
 Visit seller's store 
More actions 

2BR MARRIOTT'S NEWPORT COAST VILLAS 
Enlarge 2BR MARRIOTT'S NEWPORT COAST VILLAS

Member id firefightercote ( Feedback Score Of -1 ) 45.5%
 25 $7,601.00
 --
 Ended
 View similar items 
More actions 

2BR MARRIOTT'S NEWPORT COAST VILLAS, PREMIER, TIMESHARE 
Enlarge 2BR MARRIOTT'S NEWPORT COAST VILLAS, PREMIER, TIMESHARE

(Reserve Not Met)

Member id tochoa25 ( Feedback Score Of 1183)    100.0%
 15 $8,990.00
 --
 Ended
 View relisted item 
More actions 

    eBay Note: The seller relisted this item.           
2BR LOCKOFF Aruba MARRIOTT 5 Star PALM BEACH Timshare 
Enlarge 2BR LOCKOFF Aruba MARRIOTT 5 Star PALM BEACH Timshare

Member id cybernaut303 ( Feedback Score Of 2566)    99.6%
 11 $5,300.00
 --
 Ended
 Visit seller's store 
More actions 

2BR MARRIOTT'S NEWPORT COAST VILLAS, PREMIER, TIMESHARE 
Enlarge 2BR MARRIOTT'S NEWPORT COAST VILLAS, PREMIER, TIMESHARE

Member id tochoa25 ( Feedback Score Of 1183)    100.0%
 33 $9,490.00
 --
 Ended
 View relisted item 
More actions 


  2BR-Marriott Aruba Surf Club - Platinum Week-Ocean View

Member id jakebacquier ( Feedback Score Of 84) 100.0%
 3 $15,600.00
 --
 Ended
 View similar items 
More actions 


  MARRIOTT'S NEWPORT COAST VILLAS PLATINUM TIMESHARE 

Member id timeshare*realty ( Feedback Score Of 85) 100.0%
 25 $8,357.00
 --
 Ended
 View similar items 
More actions 

Marriott Newport Coast Villas Annual Platinum Timeshare  Marriott Newport Coast Villas Annual Platinum Timeshare

Member id optimisticbreaks ( Feedback Score Of 1 ) 66.7%
 41 $8,200.00
 --
 Ended
 View similar items 
More actions 

MARRIOTT KAUAI BEACH CLUB PLATINUM HAWAII TIMESHARE No PhotoClick to go to item page MARRIOTT KAUAI BEACH CLUB PLATINUM HAWAII TIMESHARE

Member id sellingtimeguys ( Feedback Score Of 761)    100.0%
 35 $2,550.00
 --
 Ended
 Visit seller's store 
More actions 

Marriott Barony Beach Platinum Annual Beach Timeshare No PhotoClick to go to item page Marriott Barony Beach Platinum Annual Beach Timeshare

Member id optimisticbreaks ( Feedback Score Of 1 ) 66.7%
 29 $8,300.00
 --
 Ended
 View similar items 
More actions


----------



## BarbS

A silver Grande Ocean oceanfront week went for about $1100 several weeks ago.  A gold Aruba Surf Club oceanfront week went for about $13,000 a couple of months ago.  I've been keeping my eye on mostly OF weeks, which seem to be pretty rare.

I don't recall seeing that gold OF Surfwatch week.  Besides......I didn't think they had any with OF views.


----------



## kjd

At Surfwatch I think Building 56 is considered oceanview.  I'm not sure of the number but I know it's closest to the beach bridge.


----------



## SueDonJ

Yes, it's 5600, named Ocean Dunes.  The view type is classified "oceanvista."


----------



## Tikub

*Positive development*



sandytoes said:


> We thank you for being a loyal Marriott customer and we promise to continue to work hard to deliver the “Unforgettable Experiences” that you have come to expect from us. We will continue to provide you with updates of this transaction as the year progresses. Thank you for your continued support.
> Best regards,
> Steve Weisz
> President[/LEFT]
> Marriott Vacation Club International
> [/COLOR][/SIZE][/FONT][/COLOR][/SIZE][/FONT][/COLOR][/SIZE][/FONT]


Marriott so far has delivered such unforgettable experiences as declining ownership values, rising fees, exchanging deeds for points, and Spinco.
Since Marriott has been selling deeds until recently, should Spinco not be spun to the deed owners or to the Points Trust?
Is Spinco the first publically traded Pure Timeshare Management Company?
If one is interested in purchasing a Marriott timeshare isn’t it better to buy 40000 shares of Spinco and use the dividends to rent the unit of one’s choice? 
Every new purchaser of a Marriott points should demand 10,000 shares of Spinco as a hedge against mismanagement or gouging.
Everyone converting from deed to points should demand 10,000 shares of Spinco as a hedge.
Timeshare owners have a great opportunity to purchase and own the company which manages their timeshare.  As stock owners they can ensure that their “Unforgettable Experiences” are positive.
IMHO


----------



## BocaBoy

timeos2 said:


> People can convince themselves what they own has high value X ad until they actually try to get it and can't no amount of proof that the real number is a much lower value will get through to them.  It hurts to realize that and its easy to believe it isn't so. Human nature at work.



You seem to take certain examples of sales and conclude that you have the whole picture.  I have sold two Marriott units (Hawaii and Orlando) both of which I purchased at developer prices and both were sold for a profit.  Orlando I owned for 20 years but Hawaii I bought in 2007 and sold three years later.  What do I conclude from that?  Not that you can expect to sell your timeshares at a profit, but rather that generalizations are dangerous, often inaccurate and must be taken with a grain of salt.  I am glad things are so black and white (even though often wrong) for you.


----------



## wof45

Tikub said:


> Marriott so far has delivered such unforgettable experiences as declining ownership values, rising fees, exchanging deeds for points, and Spinco.



I don't understand the point of this post --

how do you exchange a deed for points?


----------



## dioxide45

wof45 said:


> do you actually believe that the units are worth 1 million each?
> or is that the assessed value for the property taxes you are paying?



Individually on the real estate market, likely not. However, remember that common areas at the resort are shared among all owners. If MGV was to dissolve tomorrow, how is that $900MM divided?

Also, assessed value usually comes in lower than appraised value.


----------



## equitax

*The Real Value of YOUR timeshare*

Good evening all,

I'm going to be a little preachy here, not everyone will agree but I think you will see my point.

YOUR timeshare's value is directly proportional to the non-monetary enjoyment you get out of it.

If you just spent two weeks at the OC in Aruba, and got sweet talked into buying a week (or even two) direct from the developer, YOUR time share would have been worth the 30K (or now 55K) that you signed on the dotted line for, otherwise you would not have done it right?

I consider myself to be rather knowledgeable and savvy when it comes to finance and investments - Houses, commercial buildings, industrials buildings, other businesses,  cars, boats, etc. Owned them, sold them rented them - Most of the time for a profit.  I was the scavenger buyer, waiting for the right time, or a desperate seller.  Would never overpay for a building, I would just find another one, that sort of thing.  Why then did I find myself sitting in my 2BDR OC unit rented direct from Marriott.com for 299/night "doing the math" and actually thinking that 27000 for a gold week, or 68000 for two fixed platinum plus weeks was a good deal? The answer is simple - Was looking at numbers, but not the finance, and its all a matter of perspective.  At the time, I was thinking about the great time I had in Aruba, the awesome accommodating, the friendly staff...  I could have "owned" that setting for life - for me and my family - just by signing on the dotted line.  Besides, the first trip would have been "free", My next trip would be booked before I left, easy as pie for one low maintenance fee.  And to top it all off, I would have gotten something like 4 billion MR points - between the one MVCI through in, the ones from slapping 62K on the credit card...

And also, why (at the time) would you think about the day you want to get rid of it? who wants to say bye bye to Aruba for good? no more vacationing with the family?

At the time, and based on my perspective, it would have been the best deal in the world.

So you can't compare apples to oranges.

The people that sell their timeshare on ebay, or those that give it away here have a completely different perspective that the people that buy direct from the developer, and there's a reason why the two don't always meet.

And contrary to popular belief, not everyone that buys from the developer is an idiot, because without those initial buyers, there just wont be anyone to pay for new resorts.

Situations change, finances change, the markets meltdown, whatever.  

Look at it from Marriott's side for a minute - with the mortgages defaulting, the foreclosures, and the like the picture for THEM is not great either - when MVCI repos the timeshares because the mortgagor defaults, they end up with more inventory, the HOA ends up having to charge more MF to the "good" owners which in turn makes it harder to sell the next one.

The TS business can be turned around over time, and I suspect this will happen because there is a lot of capital at stake.

When Marriott Resorts Ownership Inc.s portfolio of bad mortgages on legacy properties is under control, they (or Spinco) will offer legacy owners an "in" to the points program.  they will make it sufficiently worth our while to give up our floaters for DP and many of us will.  We will then be on the hook for higher ROFR fees if we want out, which will drive the floor price of an interest in a Marriott resort up.  The holdings in the land trust will balloon, and MF will begin to normalise (they will still go up, that's just the way life is.)  

The fact that MVCI does not make a dime when a resale unit changes hands is bad for owners at MVCI resorts whether or not we like to admit it.  MVCI is in the process of changing this with the new points program and the USD 1.00 per point that they are allowed to charge for waiving ROFR.  How many will be willing to give away your 3000 pts and have it cost YOU $3000? How many of you will take a "free" 3000 points but pay $3000 for them?

The future (and I am not talking next week but within next 2-3 years) you will see Marriott or Spinco to start exercising ROFR and to add value back to its product.

I look at the Official records to see how many DP they have been cranking out, and there are many.  A percentage of those buyers will want out, and when they do MVCI will get a piece of the action before anyone else...


So the short answer is if you want out because you;'re fed up, its worth what you can get for it.  If you're really fed up, what's it worth to YOU for someone to take it off your hands?


----------



## equitax

*Division if dissolved*

Amongst legacy owners, with certain restrictions, - as tenants in common, but here is the kicker - Anyone that has converted to points i.e given back their week, the trust owns that interest.  POINT owners have no "remainder over in fee simple absolute" value of a resort as the trust would have to terminate, the likelihood of which approaches zero.




dioxide45 said:


> Individually on the real estate market, likely not. However, remember that common areas at the resort are shared among all owners. If MGV was to dissolve tomorrow, how is that $900MM divided?


----------



## dioxide45

equitax said:


> Amongst legacy owners, with certain restrictions, - as tenants in common, but here is the kicker - Anyone that has converted to points i.e given back their week, the trust owns that interest.  POINT owners have no "remainder over in fee simple absolute" value of a resort as the trust would have to terminate, the likelihood of which approaches zero.



Legacy owners who convert to points are not giving their ownership to the trust. They are only assigning over the usage of that week for the given year. Owners of the resort which includes the trust at many resorts would get a piece of the pie if it were dissolved and assets sold off. It doesn't matter if they converted or are enrolled in DC or not.


----------



## equitax

*Not so sure...*

In the official records, there are many individuals who deed their unity and week back to MROI, who in turn deposit those weeks into the trust...




dioxide45 said:


> Legacy owners who convert to points are not giving their ownership to the trust. They are only assigning over the usage of that week for the given year. Owners of the resort which includes the trust at many resorts would get a piece of the pie if it were dissolved and assets sold off. It doesn't matter if they converted or are enrolled in DC or not.


----------



## dioxide45

equitax said:


> In the official records, there are many individuals who deed their unity and week back to MROI, who in turn deposit those weeks into the trust...



Correct, but those are reacquired weeks, they don't have anything to do with people converting to DC points or enrolling in DC.


----------



## OldPantry

equitax said:


> YOUR timeshare's value is directly proportional to the non-monetary enjoyment you get out of it.
> 
> If you just spent two weeks at the OC in Aruba, and got sweet talked into buying a week (or even two) direct from the developer, YOUR time share would have been worth the 30K (or now 55K) that you signed on the dotted line for, otherwise you would not have done it right?
> At the time, and based on my perspective, it would have been the best deal in the world.
> So you can't compare apples to oranges.
> 
> they (or Spinco) will offer legacy owners an "in" to the points program.  they will make it sufficiently worth our while to give up our floaters for DP and many of us will.  We will then be on the hook for higher ROFR fees if we want out, which will drive the floor price of an interest in a Marriott resort up.
> 
> The fact that MVCI does not make a dime when a resale unit changes hands is bad for owners at MVCI resorts whether or not we like to admit it.



Wow, so much to respond to!
If you've sunk $30,000 (or $55,000) into a developer week and you're still pleased as punch, well great.  That's because you're practicing the power of positive thinking.  At the time, and apparently now too, the week had subjective (non-monetary) value to you. That's in your own brain.  Extending that approach a bit, if you concentrate hard enough, your week will be worth millions!  
There is an objective measure, though.  That is what a buyer would pay.  So, it isn't apples and oranges, it's just what those apples (or oranges) are worth, NOW.  That a function of supply and demand, and, ultimately, what a rental could bring in excess of maintenance fees.
As to being permitted into the DP program, you seem to share the misconception that your points will be salable, and therefore subject to ROFR fees.  That's incorrect.  Legacy owners exchange their weeks for points on a yearly basis (if they wish to).  Only "new" points you buy from Marriott would be subject to ROFR penalties (yes penalties).
And why is it "bad" that Marriott makes only a small profit on timeshare resales?  They sold the damn things once (at an enormous profit, by the way); why a double dip?  The same logic should apply to points: aren't they making a huge profit by selling them now?  Why burden a points owner who wishes (needs) to get out with ROFR penalties that might make a resale impossible?  If I want to sell my Jetta, I don't expect to hand Volkswagen another $3000 when I sell it to my neighbor!


----------



## josh1231

equitax said:


> The fact that MVCI does not make a dime when a resale unit changes hands is bad for owners at MVCI resorts whether or not we like to admit it.  MVCI is in the process of changing this with the new points program and the USD 1.00 per point that they are allowed to charge for waiving ROFR.  How many will be willing to give away your 3000 pts and have it cost YOU $3000? How many of you will take a "free" 3000 points but pay $3000 for them?



If Marriott priced their weeks for their actual value, instead of charging many times their worth while making maintenance fees shockingly high, they wouldn't have this problem because resale weeks would be selling for similar to developer weeks,  and they would be able to unload their own weeks at a quicker pace. The entire model is broke, and they know it, thus the spin-off. How long will they be able to continually sell a $750K condo for $2M in Aruba, then charge 50K a year in association dues for a 2bd unit.

Granted their are a few more services than your average condo, but not 45k a unit more.

I've never sold or owned a condo, but does the condo association charge you money when you sell one? I don't believe my homeonwners association does. This is why I don't understand how one can justify this.


----------



## mstoyanov

I am not doom and gloom person but no matter how you slice it and dice it there is no way to see recent events surrounding Marriott Timeshare business as anything but having negative impact on timeshare owners. Even if economy improves significantly market for securitising mortgages is gone and will not come back and without such market there is no chance for the MCVI (or anyone else) to significantly increase timeshare sales. Very few people pay in full for timeshare purchases. So Spinco will have strongly to rely on increased management fees. I fully expect in the next 3 years to see average 6-7%  increase in MFs per year on top of normal increases just from Spinco being forced to show better bottom line.
Add to the fact that Marriott was affected the worst of all major timeshare companies - when the crisis hit they had more unsold inventory than all others major TS companies combined. Economy is improving slightly and most other timeshare companies are starting to exercise ROFR regularly since they have tiny inventory - Hilton has never been as aggressive as recently (they buy even silver weeks), Starwood started regular ROFRs (something unheard before). DVC despite that they mostly concentrating on BCV are still not letting very cheap deals to go trough - I recently lost a great deal on VWL points. I even had Intrawest take a great deal that I had negotiated to buy. Wyndham does not have ROFR but is still acquiring inventory trough WAAM deals. 

That said I still believe that top resorts at prime times will hold value - maybe not as much as some here wish but they would not be worthless as long as there is a good differential between MFs and rental price.

Now that value will be lower than what some believe but this is simply because people use unreasonable underlying assumptions to support their prices. I hear 10% ROI here mentioned quite a lot - in a true real estate 10% may be pretty good return but that is only because you can lock expenses pretty well (fixed mortgages, hedging against real estate slides, long term maintenance and utility contracts) and even downward slide in prices is quite limited compared to the timeshares (until recent crisis real estate prices dropping in half were unheard of). But I will never even consider trying to build a business renting timeshares with only 10% ROI - since underlying cost in timeshares can change drastically in very short time and can not be constrained. I will never buy any timeshare for mainly rent without at least 25-30% expected ROI. 

Prime weeks in drive-to locations (Newport, Myrtle Beach, Hilton Head) will keep their prices much better than fly-only destinations since these are not that dependent on high volatile energy prices but sometime even a single event can change picture drastically (for example HI/SC proposed higher TAT, Hurricane destroying an area and sharply raising insurance rate for decades and so on)

Despite that I am still strong believer in timesharing - and I put my money where my mouth is. I just bought recently 2 EOY Marriott Platinum weeks for literally peanuts that I expect to use at least 50% of the time and currently can be rented when not used for at least 50% above MFs. These are my first Marriott purchases (I have all other major TS groups in my portfolio) and the prices that I bough my weeks would not have been possible without horrible DC program so I guess I have to be thankful to Marriott for depressing the prices.

Anyway I fully believe that now can really be a great time to get a excellent deals on timeshares that you plan to use for most of the time.


----------



## davewasbaloo

kjd said:


> For those of us who also purchased resale a lucky few have reported actually making a profit on selling a TS.  However, for most, if you bought thinking that you were making an "investment" you were also kidding yourself.



We bought ours not as an investment to make money, but certainly to mitigate cost. we had been to Disneyland Paris over 40 times by the time we bought, and we have yet to see everything the region in France offers. However, I am disappointed to see that my Easter week this year has availability via the Marriott Hotel booking system and the price for the same duration is not much more than just my maintenance fees. That never used to be the case, it used to be at least twice as much. It felt like a good deal in the early years, now, not so much. Add in the uncertainty of what Marriott is doing with it, I am concerned.

Of course every vacation I have had with MVCI has been fantastic, and if they remained with the same options as when we first bought, I would still be very happy. But now, hmmmmm, not so much.


----------



## MALC9990

*No Rooms available*

That's odd as I just looked on the Marriott Hotel Booking system and MVCI Paris I'lle de France has NO ROOMS AVAILABLE for Easter. Nothing to Rent after the 16th April and even that week there was no Owner Discount rate available.

After Easter there is avbailability again €149 per night with MOD, €169 per night advance payment no refund and €199 per night standard rate. These rates seem to be available until late June when they rise steeply to €239 per night and €319 per night.

These are all for a 2 bed unit - prices are in Euros.


----------



## davewasbaloo

There were some for 179 last I looked a few weeks ago, it made me feel sick. perhaps I found one rouge unit. Ok, I am relieved, thanks.


----------



## equitax

*Clarifications...*

Nope- Did not buy developer weeks.

My point on apples and oranges, Is that when you are buying your TS (or how the developer wants you to think) is in term of all the money you are going to save using your owned vacation - Most people aren't thinking about the resales - If thinking resale you wouldn't be at developer pitch anyways.

I don't own points and no of no marketability of these either.

Where my opinion will differ with most people, and where your Jetta comparison falls into the "wrong fruit" category, is as follows:

1- In the case of your jetta, your lack of maintaining,cleaning, driving properly, etc doesn't affect other Jetta owners.  In the case of your deeded week, if you fail to pay MF (as many do), I end up footing the bill for it because my MF go up as a result.  

2- When the developer does not make enough money, the next round of resorts don't get built, plain and simple.  And if Marriott (Spinco) ended up being party to more resale transactions, be it by exercising ROFR, profiting from ROFR waiver, etc, that puts more money in their cofffers to further develop timeshares - Something that clearly is not done with realtors commissions etc.  

Marriott "as developer" could and should be much more involved in the resale market, and I suspect that Spinco will be in the future.

As for why Marriott should (or should not) double dip - As an owner of Marriott Inc. (over 16000 shares worth) - I don't think I need to explain to anyone here why it is a good thing for them to make money.

As an owner or a TS interest - For the reasons that I want them to keep building more resorts to make my buck go further.  I wonder how many people end up with the free TS from ebay then default costing TS owners money...













OldPantry said:


> Wow, so much to respond to!
> If you've sunk $30,000 (or $55,000) into a developer week and you're still pleased as punch, well great.  That's because you're practicing the power of positive thinking.  At the time, and apparently now too, the week had subjective (non-monetary) value to you. That's in your own brain.  Extending that approach a bit, if you concentrate hard enough, your week will be worth millions!
> There is an objective measure, though.  That is what a buyer would pay.  So, it isn't apples and oranges, it's just what those apples (or oranges) are worth, NOW.  That a function of supply and demand, and, ultimately, what a rental could bring in excess of maintenance fees.
> As to being permitted into the DP program, you seem to share the misconception that your points will be salable, and therefore subject to ROFR fees.  That's incorrect.  Legacy owners exchange their weeks for points on a yearly basis (if they wish to).  Only "new" points you buy from Marriott would be subject to ROFR penalties (yes penalties).
> And why is it "bad" that Marriott makes only a small profit on timeshare resales?  They sold the damn things once (at an enormous profit, by the way); why a double dip?  The same logic should apply to points: aren't they making a huge profit by selling them now?  Why burden a points owner who wishes (needs) to get out with ROFR penalties that might make a resale impossible?  If I want to sell my Jetta, I don't expect to hand Volkswagen another $3000 when I sell it to my neighbor!


----------



## OutAndAbout

Since Marriott spun off Host Hotels & Resorts, Inc.to unload debt and allow HST to be a REIT to capture tax advantages, why wouldn't HST be a good suitor for SpinCo?

Note:  HST's real estate includes more than Marriott, it now has properties with most the majors (although MAR is probably still the largest).

If not HST, I would think Diamond Resorts (who purchased Sunterra and is privately owned) may be a better suitor than Wyndham.


----------



## OldPantry

equitax said:


> Nope- Did not buy developer weeks.
> 
> My point on apples and oranges, Is that when you are buying your TS (or how the developer wants you to think) is in term of all the money you are going to save using your owned vacation - Most people aren't thinking about the resales - If thinking resale you wouldn't be at developer pitch anyways.
> 
> I don't own points and no of no marketability of these either.
> 
> Where my opinion will differ with most people, and where your Jetta comparison falls into the "wrong fruit" category, is as follows:
> 
> 1- In the case of your jetta, your lack of maintaining,cleaning, driving properly, etc doesn't affect other Jetta owners.  In the case of your deeded week, if you fail to pay MF (as many do), I end up footing the bill for it because my MF go up as a result.
> 
> 2- When the developer does not make enough money, the next round of resorts don't get built, plain and simple.  And if Marriott (Spinco) ended up being party to more resale transactions, be it by exercising ROFR, profiting from ROFR waiver, etc, that puts more money in their cofffers to further develop timeshares - Something that clearly is not done with realtors commissions etc.
> 
> Marriott "as developer" could and should be much more involved in the resale market, and I suspect that Spinco will be in the future.
> 
> As for why Marriott should (or should not) double dip - As an owner of Marriott Inc. (over 16000 shares worth) - I don't think I need to explain to anyone here why it is a good thing for them to make money.
> 
> As an owner or a TS interest - For the reasons that I want them to keep building more resorts to make my buck go further.  I wonder how many people end up with the free TS from ebay then default costing TS owners money...


I think the illogic lies in your assumption that Marriott should have any particular stake in my resale.  I know the HOA can suffer if I let my "Jetta" go to hell, but Marriott (i.e. Volkswagen) is mostly out of that particular equation (since most Marriott resorts are sold out).  And the HOA's recourse is to collect maintenance fees from me until I do sell (and exercise various punitive measures if fail to pay or actually do abuse the poor unit).  None of is this is relevant to the resale.  It utterly escapes me why you would think anybody (HOA or Marriott) would need (or have a right) to take a slice of that action.   And seriously, do you really think Marriott will build some nice new resorts if we let them loot our resales?
The problem of defaults is in no way a "Marriott" issue.  It's a mud week issue, and a maintenance fee issue.   Channeling more dough to Marriott won't fix it in any way whatsoever. 
As a Marriott shareholder, the best thing you could do to ensure their profitibility is to send them a check for your dividends.  Maybe they'd use that money to build the fourth tower at Ko Olina.  Just think positively!


----------



## MALC9990

davewasbaloo said:


> There were some for 179 last I looked a few weeks ago, it made me feel sick. perhaps I found one rouge unit. Ok, I am relieved, thanks.



Of course there is still unsold inventory at Paris so obviously Marriott would want to fill up the units especially at Easter.

There is some exchnage availability in March but nothing for Easter.

No Getaways at all.

So again a better picture for owners.


----------



## timeos2

OldPantry said:


> I think the illogic lies in your assumption that Marriott should have any particular stake in my resale.  I know the HOA can suffer if I let my "Jetta" go to hell, but Marriott (i.e. Volkswagen) is mostly out of that particular equation (since most Marriott resorts are sold out).  And the HOA's recourse is to collect maintenance fees from me until I do sell (and exercise various punitive measures if fail to pay or actually do abuse the poor unit).  None of is this is relevant to the resale.  It utterly escapes me why you would think anybody (HOA or Marriott) would need (or have a right) to take a slice of that action.   And seriously, do you really think Marriott will build some nice new resorts if we let them loot our resales?
> The problem of defaults is in no way a "Marriott" issue.  It's a mud week issue, and a maintenance fee issue.   Channeling more dough to Marriott won't fix it in any way whatsoever.



Amen! Marriott, or anyone else in management/sales, has no business in what an owner does with their ownership rights. Once thje original sale is done & paid for it should be between the owner and the Association - no one else holds any reasonable stake. The HOA is NOT Marriott and why should Marriott hold any rights to what was legally sold? Development is in no way tied to existing or prior sales and new construction must assuredly doesn't depend on resales (maybe too bad - if it did then maybe developers would actually support resales and get prices up to more reasonable levels.  The silly game of ROFR only depresses the already weak market - a firm buy back program would actually set a floor on price and assure it sticks. 

Defaults are between the Association and owner - Marriott would only be involved if they are acting as the management for the Association and that would not entitle them to any "cut" - they are paid for services as management to cover this type of work.


----------



## LAX90210

tombo said:


> Sales by Marriott will always be made to people who walk into a resort for some freebies and are told that they can own a lifetime of vacations for a small fee. Marriott will spin the numbers to show huge savings if they buy. The uinformed, uneducated (on timeshares) buyer will believe the lies and half truths they are told and own something they will more likely than not regret. Sales will never end totally until Marriott close the sales dept, but sales can slow to a crawl where the overhead is eating up the little profit they are making on fewer sales.
> 
> Even the most ardent marriott supporter here on TUG would not buy a retail points package with the current divesting of timeshares by Marriott. Is there anyone here on TUG considering buying retail points for any price? I will gladly read the reasons ANYBODY would give for buying RETAIL MARROITT POINTS now with full knowledge of the spinoff and timeshares in general. I am eagerly waiting to read this post and the reasons for buying. If none here will buy, then that shows that sales will fall even more because anyone who knows anything about the situation will not buy.
> 
> The internet is probably going to be the final death blow to retail timeshare sales because knowledge is power. no more trusting the salesman with no where to check on facts and promises. Google timeshares on the internet and the smoke and mirrors go away.
> 
> Now the change Marriott made to own the votes of any who buy points or convert to points becomes clearer. Once the spinoff starts assessing and raising fees owners might vote to remove Marriott as the mgt company. That is where the new division will make their profits, not on sales but on the backs of current powners. Even the number one cheerleader might finally have enough when their orlando annual MF's pass the $2000 mark. Marriott by owning the votes of all points owners and all weeks owners who convert(ed) will be able to vote against removing them as the mgt company. This will leave owners paying whatever marriott decides to charge them or they will have to walk away.
> 
> Marriott planned this thing out way in advance. The statement that they never planned on walking away but the last few years...... was not an off the cuff mistatement. That was a statement purposelly made in a speech written by PR dept, the legal dept, and CEO's. They said the stock will not be investment grade to cover their butts legally, not to be nice. They stripped current owners who convert of their votes and will give no future purchasers a vote on purpose, and that is to preserve their cash cow of being the managers of the resorts.
> 
> When we hear what Marriott has to say, we only hear the spin the PR and legal depts want us to hear, and usually not before they are ready for us to hear it. Walking away or selling might be the best option in the near future. Time will tell.



Boy, you nailed it spot on...ME, exactly...bought/suckered in to a Kauai TS in 2003, was -very- fortunate in being able to -finally- dump it in 2008 a few months prior to the big crash.  Lucky I didn't lose even more on it.  Thoroughly enjoyed the resort and would definitely stay there again, but only on my terms($cash$ only, CYA mode).

I just don't see any reason to own a TS, in view of all of the unknowns that can pop up, with your name on the deed.

This latest Marriott move may benefit me, indirectly, as it will likely make renting TS rooms easier going forward.

Learned a lot in this deal; unfortunately, most of it was bad.  

There's a video biography out on Bill Marriott(CNBC?  Don't remember for sure), where he talks about the 'early days'.  Says something to the effect that if a party of one or two might drive up at night, he sometimes hit the No Vacancy light, figuring he would save the room for a family arrival; charge $more$, make $more$.  Kinda told me all I needed to know about Marriott the man and Marriott the biz.

I still stay at Marriott Hotels & Resorts, but will never again have any dealings with them in any other fashion.  I used to work for Big Corporate and have no interest in being screwed by BC just in the name of profits.


----------



## wof45

I guess we are back to generalizations again based on what we want to believe.

I would buy DC points, once they become available as resales.  I am assuming they will be at a discount from the retail price.  If another poster is correct that MVC would buy them back for 50% of retail, then there should be a market for at more than 50%.  But then, I am from Philly, and we never pay retail.


----------



## LAX90210

tombo said:


> If you can play golf at your club as a guest for close to as cheaply as you can as a member and save a $7000 outlay, why be a member? With Timeshares that is quickly becoming the case. The club is private and if you don't pay to join you can't play there except on rare occassions. You can rent any week at any resort from owners without buying, and often for less than the owners paid in annual MF's. Even resale why pay $5000 to $10000 to stay at a place you can rent for about the same money as an owner pays to stay there? The $7000 country club membership allows you to play a golf course that you otherwise couldn't play. The timeshare weeks are available for rent to anyone, not just owners.
> 
> If the annual MF's are $1200 you can in most cases rent from an owner for $1500(or less) costing you $300 more (or less) a year to rent than to own. For 20 years if you pay $300 a year more to rent than own and you have spent a total of $6000 more than being an owner. You saved $5000 to $10,000 by not purchasing and you have saved $1000's on the numerous assessments that owners inevitably paid.
> 
> Every year you can vacation where you want by perusing redweek and finding a really good rental price at any place you want to go. You can vacation on the exact dates you want, even last minute usually for discounted prices. You do not have to plan everything 10 months to a year in advance. No more waiting on the phone or computer hoping you can get the exchange you want.
> 
> If you don't own you simply rent where you want for close to the cost of MF's if not less than MF's every year. Browse the for rent ads and find a heck of a deal each year. I have seen 2 bed room ocean front Marriott's for rent on Redweek for less than MF's at most every resort at one time or another. Some resorts have 20 or 30 lisitngs for less than MF's perpetually listed.
> 
> The years you want to stay home, go on a cruise, go to an area where there are no Marriott resorts you don't have to worry about what you are going to do with your prepaid vacation. No more sweating renting it, no more last minute rental listings for $700 on TUG, no more banking the week because you can't rent it and you can't use it. You just pay to rent your annual vacation(s) at a price you feel is a good deal, not at the price Marriott feels you should pay each year.
> 
> Over the last few years owning has become more of a liability than a savings as rental prices keep dropping and MF's keep rising. I only purchased resale and even at those prices nowadays it is better to rent than own in most cases.



+1  Pretty much my plan going forward...lots of nice resorts out there in the Big World.  I'm not locked in and can likely find somewhere nice & affordable to go whenever I want.  For high times like XMAS, I'll just rent a hotel/resort room and get by fine.


----------



## TJCNewYork

*Hopeful About A New Value Proposition*



kjd said:


> This a calculated business decision by Marriott, with their best interests in mind.  It does not portend anything but that.  There are many examples of successful spinoffs in business history.




Excellent point.  Actually, Marriott joins Motorola and Sara Lee (among others) in announcing spinoffs.  On 2/11, Motorola announced a split into Mobile Devices, and Enterprise Mobility Solutions. Earlier on 1/28, the Financial Times reported that Sara Lee plans to break up into a North American food business including Ballpark, Hillshire Farm and Jimmy Dean; and an international beverage and bakery business to include Douwe Egberts (expresso), Senseo (coffee systems), and Café do Ponto (ground coffees) plus top bakery brands, Ortiz, BonGateaux, and Sara Lee.  


Unlike IBM/Lenovo, Motorola and Sara Lee, spinning off Marriott Vacation Club presents a broader challenge.  In addition to the Securities Exchange Commission, the Federal Trade Commission and the Internal Revenue Service, the Marriott transaction touches federal, state and local statutes that govern real estate.    


Under statute, Marriott legacy owners enjoy usage options (grandfathered) and the promise of protected deeded ownership to weeks-based home resort vacation ownership for years to come.   FWIW, when it comes to trailblazing and pioneering a new frontier, Marriott can reference lessons-learned.  The State and Legal Disclosure for Destination Club illustrates an uphill challenge; but it is most definitely one that is in-progress.


To close on a positive note, the appointment of Marriott's newly retired veteran, Bill Shaw as spinco's chairman of the board is very reassuring (to me) that someone with lifelong Marriott brand experience, will not only focus on advancing the best interests of Marriott, but will also seek to preserve if not enhance the value proposition of vacation ownership that compelled me to become a MVC owner in the first place. 


I am hopeful for a successful outcome and a new value proposition.


----------



## mstoyanov

MOXJO7282,

If you truly believe the fair price of Grande Ocean gold OF is more than $13.8K
here is chance to make quick $3k by buying this auction and flipping it for $3k more:
http://cgi.ebay.com/MARRIOTT-GRANDE...70710546158?pt=Timeshares&hash=item3f079b1eee

For the record I have no connection whatsoever with the seller (and do not believe this unit is worth the asking price).



MOXJO7282 said:


> My Grand Ocean gold OF was purchased for $13.8K in 2004. I'm pretty sure I'd get that or a tad more. Also my Oceanwatch OS July 4th would sell for around $20k. Still good value in my book.
> 
> So things are not as dire as you predict from my and any Marriott prime week owner


----------



## LAX90210

^ Interesting ebay listing.  I have no experience w/HH, but does look interesting.  However, one item - in the pics, why would there be a bathtub next to a King bed?  Seems a bit strange to me.  No shower stall, just a tub...


----------



## TJCNewYork

*New Model: Timeshare And Mixed-use Development?*



GregT said:


> Hopefully, a new model can be developed that has a brighter future for all of us.




About 2 weeks before Marriott unveiled Destination Club, an article, Timeshare's Role in Mixed Use Development appeared in the hospitality trade pubs.  The image below illustrates how a developer might approach mixed use that includes fractional ownership (Ritz-Carlton), timeshare (MVCI) and a hotel (Marriott) into a single project.  Will spinning off MVCI from Marriott International hinder or facilitate realization of such a project?  What if it's a hotel to mixed-use conversion?   


For example, as reported Feb 1st in the Orlando Sentinel, JW Marriott and Ritz Carlton Grande Lakes in Orlando are among 8 luxury hotel properties recently acquired in a foreclosure auction by Paulson & Co. Inc.     If the new owner decides to maximize earning potential by converting some floors to fractional ownership or timeshare or both, would the transaction best be handled by Marriott International or spinco?  


Such a scenario could playout anywhere a Marriott franchise property exists.  In fact, it doesn't have to be a Marriott franchise, it could be an independent hotel in the Autograph Collection like the recently opened, Cosmopolitan Las Vegas. With 52                                                                                                                                                                                             floors,                                                                                                                                                                                                                                                                                      2,435                                                                                                                                                    rooms and                                                                                                                                                                                                                                            560                                                                                                                                                    suites                                                                                                                                                                                                                       with kitchenettes or fully-loaded kitchens there's amazing potential.  Spinco combined with Guest-To-Owner marketing and the Destination Club, there would be marketing engine to drive pre-construction/conversion preview tours and sales. 


What will happen to legacy resorts?  Several have commented that COAs/HOAs will have a big stake in that.  My hunch is that there will be a resurgence of demand when the economy recovers.


Thoughts?


[imgl]http://www.hospitalityworldnetwork.com/files/hotelworldnetwork/nodes/2010/8136/timesharegraphic.jpg[/imgl]


----------



## BarbS

LAX90210 said:


> ^ Interesting ebay listing.  I have no experience w/HH, but does look interesting.  However, one item - in the pics, why would there be a bathtub next to a King bed?  Seems a bit strange to me.  No shower stall, just a tub...



That's the jacuzzi tub.  The shower is on the other side of the tub in another little room.


----------



## MikeM132

VacationPro said:


> Marriott announced their earnings this afternoon, and as part of the press release announced they will be spinning off the timeshare business into a separately traded company.
> 
> Here's the press release:
> 
> http://news.marriott.com/2011/02/ma...business-and-reports-fourth-quarter-2010.html



Oh boy. I already get about 2 calls a week from sharks looking to "buy" my Maui week. Now there's blood in the water.


----------



## jerseygirl

mstoyanov said:


> I am not doom and gloom person but no matter how you slice it and dice it there is no way to see recent events surrounding Marriott Timeshare business as anything but having negative impact on timeshare owners. Even if economy improves significantly market for securitising mortgages is gone and will not come back and without such market there is no chance for the MCVI (or anyone else) to significantly increase timeshare sales. Very few people pay in full for timeshare purchases. So Spinco will have strongly to rely on increased management fees. I fully expect in the next 3 years to see average 6-7%  increase in MFs per year on top of normal increases just from Spinco being forced to show better bottom line.



I apologize in advance as this has assuredly already been discussed in connection with the advent of the DC ...

It's my understanding that with deeded timeshares, HOAs must be not-for-profit (I understand they can have an operating surplus from time-to-time -- I'm talking about over the long haul).  I'm wondering whether or not DC owners have the same statutory protections as deeded owners?  Can someone point me to where this may have been already discussed?  

I know that there can be "shenanigans" regardless of the statutory protections ... but Mstoyanov's post left me wondering if DC points owners have fewer protections (e.g., are they given an accounting that allows them to tie their maintenance fees to actual expenses)?  In other words, must the books eventually be balanced for DC points owners the way they are for deeded owners?


----------



## dioxide45

*Anyone else get e-mail today?*

Please read a special Letter To Owners and Frequently Asked Questions about the plan to establish Marriott Vacation Club International as a publicly traded company.

Bill Marriott talks about the exciting future of Marriott International and Marriott's timeshare business.


----------



## camachinist

Yes, I got that e-mail.

Here's to 'unforgettable experiences'


----------



## mstoyanov

Jerseygirl, I don't know if there is any protection in the trust documents (I would guess not) but Spinco can not be non-profit simply because it will be the new developer that will sell inventory. Despite that I think that there is one strong force that will keep MFs on the DC points lower for at least several years - the desire of the Spinco to sell points to new owners.
All timeshare developers subsidize new developments since that makes selling timeshares easier. I am actually surprised at the high cost of MFs for DC points as it is - at $0.40 per DC point at many resorts OV 2BR is already a hard sell compared to the renting from an owner. And HOA protections are not worth much if the HOA board is controlled by Marriott/Spinco - they will approve whatever Marriott/Spinco tells them to do. One simple way to hide the cost is by using non-bid contractors that are subsidiaries of Marriott (or Spinco). You can always come with whatever excuse you want - labor prices went higher, supplies became more expensive and so on.

Also Spinco will have the guaranteed yearly fees from the program and will have inventory to rent from the skim of enrolled legacy owners. 

Another way Spinco can make MFs for the DC points lower is to raise even further the point for the resort that are biggest source of inventory in DC trust (Crystal Shores, Ko-olina, Lahaina/Napili tower). So at least in the next 5 years I suspect Marriott will be much better manager for the resorts that are biggest source of points in the trust while pushing for MFs increases in the resorts that does not have much inventory in the trust.



jerseygirl said:


> I apologize in advance as this has assuredly already been discussed in connection with the advent of the DC ...
> 
> It's my understanding that with deeded timeshares, HOAs must be not-for-profit (I understand they can have an operating surplus from time-to-time -- I'm talking about over the long haul).  I'm wondering whether or not DC owners have the same statutory protections as deeded owners?  Can someone point me to where this may have been already discussed?
> 
> I know that there can be "shenanigans" regardless of the statutory protections ... but Mstoyanov's post left me wondering if DC points owners have fewer protections (e.g., are they given an accounting that allows them to tie their maintenance fees to actual expenses)?  In other words, must the books eventually be balanced for DC points owners the way they are for deeded owners?


----------



## jerseygirl

Thanks Mstoyanov.  I get all that ... was hoping to determine the actual legal structure as it relates to maintenance fees.  Do the legal documents outline how the fees are calculated and do they tie back to the actual deeded weeks?  If yes, the total of all points X $0.40 should equal the maintenance fees for the underlying weeks that make up the trust, right?


----------



## OldPantry

> Another way Spinco can make MFs for the DC points lower is to raise even further the point for the resort that are biggest source of inventory in DC trust (Crystal Shores, Ko-olina, Lahaina/Napili tower). So at least in the next 5 years I suspect Marriott will be much better manager for the resorts that are biggest source of points in the trust while pushing for MFs increases in the resorts that does not have much inventory in the trust.


That's an interesting thought, but I'm not sure why Spinco would want (need) to keep maintenance fees lower for those resorts where it still has substantial unsold inventory.  Could you explain?  The $.40 points fee is not resort-specific, and points owners don't pay the individual resort MFs.  Why would Marriott exercise restraint at Ko Olina, Crystal Shores, and Lahaini/Napili?  Believe me, I'd love it if they did treat Ko Olina better, as I own there.


----------



## dioxide45

OldPantry said:


> That's an interesting thought, but I'm not sure why Spinco would want (need) to keep maintenance fees lower for those resorts where it still has substantial unsold inventory.  Could you explain?  The $.40 points fee is not resort-specific, and points owners don't pay the individual resort MFs.  Why would Marriott exercise restraint at Ko Olina, Crystal Shores, and Lahaini/Napili?  Believe me, I'd love it if they did treat Ko Olina better, as I own there.



The trust is a huge owner of those resorts. Who is paying the bulk of those MF given that only a small percentage of the points have been sold? MVCI is coming up with that money. The lower they can keep the MF/trust point ratio, the better for their bottom line.


----------



## MOXJO7282

mstoyanov said:


> MOXJO7282,
> 
> If you truly believe the fair price of Grande Ocean gold OF is more than $13.8K
> here is chance to make quick $3k by buying this auction and flipping it for $3k more:
> http://cgi.ebay.com/MARRIOTT-GRANDE...70710546158?pt=Timeshares&hash=item3f079b1eee
> 
> For the record I have no connection whatsoever with the seller (and do not believe this unit is worth the asking price).



I think you make a good point in a way. Ebay is not the true value of a resale price unless there are numerous records to consider. Like Newport Coast. Newport Coast is one of the most actively sold Marriotts on ebay, if not the most. Its fair to say that the resale value of NCV is about $8-$8.8k because dozens sell in that range.

Otherwise you really can't make any corrolations. I recently saw an Marriott Aruba Surf Plat OV 2BDRM sell for $15.6K on ebay. Is that the resale price? I don't think so, I think its more in the $13.5k-$14k range. 

Now in the case of a GO Gold OF, you just don't see them on ebay and the ones on redweek are all well over $15K. I follow ebay pretty religiously and this is the first oceanfront GO gold in years. 


I can tell you if you can get an oceanfront at this resort at whatever you think is a good price, I'd go for it because this is a super resort.


----------



## timeos2

jerseygirl said:


> I apologize in advance as this has assuredly already been discussed in connection with the advent of the DC ...
> 
> It's my understanding that with deeded timeshares, HOAs must be not-for-profit (I understand they can have an operating surplus from time-to-time -- I'm talking about over the long haul).  I'm wondering whether or not DC owners have the same statutory protections as deeded owners?  Can someone point me to where this may have been already discussed?
> 
> I know that there can be "shenanigans" regardless of the statutory protections ... but Mstoyanov's post left me wondering if DC points owners have fewer protections (e.g., are they given an accounting that allows them to tie their maintenance fees to actual expenses)?  In other words, must the books eventually be balanced for DC points owners the way they are for deeded owners?



One of the "joys" of a points/club type system is the far lesser degree of control owner have over the system. While any club has to meet regulatory standards - very similar to those of a deeded or RTU type - the newer ones tend to take advantage of the less restrictive options that may be possible. An key example would be the long, costly and highly regulated foreclosure process needed to take even a delinquent week/unit away from the deeded owner. Most clubs are simply membrship based so once you turn over your deed and the protections it offers for a "membership" you now have a different set of rules. 

In one case I'm aware of the company operating the club can and will terminate the membership - meaning you lost everything you ever paid - for a missed payment or two.  Or, as has happened, because the member posts what the "club" administrators feel is something detrimental to them/the club!  Poof! Your membership & money are gone all from the one sided decisions of the club operator. It can be done legally, quickly and without the drawn out, costly process required of a foreclosure. It is easy to see why the operators / developers like it more than deeds. But few fully understand wat they may be giving up when they turn over their deeds. It can be far more than just your voting rights and the protection of a deeded ownership.  BE careful.


----------



## timeos2

*You cannot dismiss a large and active market maker because you don't like the prices*



MOXJO7282 said:


> I think you make a good point in a way. Ebay is not the true value of a resale price unless there are numerous records to consider. Like Newport Coast. Newport Coast is one of the most actively sold Marriotts on ebay, if not the most. Its fair to say that the resale value of NCV is about $8-$8.8k because dozens sell in that range.
> 
> Otherwise you really can't make any corrolations. I recently saw an Marriott Aruba Surf Plat OV 2BDRM sell for $15.6K on ebay. Is that the resale price? I don't think so, I think its more in the $13.5k-$14k range.
> 
> Now in the case of a GO Gold OF, you just don't see them on ebay and the ones on redweek are all well over $15K. I follow ebay pretty religiously and this is the first oceanfront GO gold in years.
> 
> I can tell you if you can get an oceanfront at this resort at whatever you think is a good price, I'd go for it because this is a super resort.



eBay is the ultimate marketplace - Redweek may ave offers with much higher prices but that is all they are - offers. The TRUE value is what a willing buyer and seller agree to - exactly what eBay generates in a wide open, public way.  IF the week(s) were REALLY worth 15K the bidding would get there in most cases as otherwise it is a steal & people would jump at it. Instead it barely reaches 8-9K or less as that is the true open market value. 

Those that want to dismiss eBay (or any other selling , auction sites) are really reaching to justify unrealistic valuations they feel a resort/week "deserves".  The market says differently and that is the ultimate decision maker.


----------



## wof45

timeos2 said:


> One of the "joys" of a points/club type system is the far lesser degree of control owner have over the system. While any club has to meet regulatory standards - very similar to those of a deeded or RTU type - the newer ones tend to take advantage of the less restrictive options that may be possible. An key example would be the long, costly and highly regulated foreclosure process needed to take even a delinquent week/unit away from the deeded owner. Most clubs are simply membrship based so once you turn over your deed and the protections it offers for a "membership" you now have a different set of rules.
> 
> In one case I'm aware of the company operating the club can and will terminate the membership - meaning you lost everything you ever paid - for a missed payment or two.  Or, as has happened, because the member posts what the "club" administrators feel is something detrimental to them/the club!  Poof! Your membership & money are gone all from the one sided decisions of the club operator. It can be done legally, quickly and without the drawn out, costly process required of a foreclosure. It is easy to see why the operators / developers like it more than deeds. But few fully understand wat they may be giving up when they turn over their deeds. It can be far more than just your voting rights and the protection of a deeded ownership.  BE careful.



DC points are deeded.  MVCD is not a membership club.


----------



## AwayWeGo

*You Typed A Mouthful.*




timeos2 said:


> eBay is the ultimate marketplace - Redweek may ave offers with much higher prices but that is all they are - offers. The TRUE value is what a willing buyer and seller agree to - exactly what eBay generates in a wide open, public way.  IF the week(s) were REALLY worth 15K the bidding would get there in most cases as otherwise it is a steal & people would jump at it. Instead it barely reaches 8-9K or less as that is the true open market value.
> 
> Those that want to dismiss eBay (or any other selling , auction sites) are really reaching to justify unrealistic valuations they feel a resort/week "deserves".  The market says differently and that is the ultimate decision maker.


You are correct, sir. 

And I don't have 1 single problem with that -- possibly because my _el cheapo_ eBay timeshares are not Marriotts.  Possibly also because I am only luxury-conscious & not status-conscious.  And even more possibly because I bought'm on eBay, rather than selling. 

Is this a great country or what ? 

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


----------



## timeos2

wof45 said:


> DC points are deeded.  MVCD is not a membership club.



Simply having a deed does not in and of itself assure you of the protections of a deeded property.  If it is a UDI deed legally recorded, tying  you to the terms without questions, but still may not require a foreclosure to terminate your ownership as a deeded property does. 

I would be interested in exactly how they have worded the ownership and what it requires to be terminated.  My guess is it is a simple matter of them terminating the ownership "for cause" (such as delinquent fees) as that is how all the newer clubs tend to work it.  If you find something else it would be interesting to know.  This is not just Marriott but all of the travel tye systems - deeded or not.  DVC is "deeded" too - but you own nothing but a right to use promise.  My guess, subject to confirmation, is the Marriott plan is similar in structure/operation. But as I have not read the docs I'm open to a confirmed correction of that assumption.


----------



## BarbS

MOXJO7282 said:


> I think you make a good point in a way. Ebay is not the true value of a resale price unless there are numerous records to consider. Like Newport Coast. Newport Coast is one of the most actively sold Marriotts on ebay, if not the most. Its fair to say that the resale value of NCV is about $8-$8.8k because dozens sell in that range.
> 
> Otherwise you really can't make any corrolations. I recently saw an Marriott Aruba Surf Plat OV 2BDRM sell for $15.6K on ebay. Is that the resale price? I don't think so, I think its more in the $13.5k-$14k range.
> 
> Now in the case of a GO Gold OF, you just don't see them on ebay and the ones on redweek are all well over $15K. I follow ebay pretty religiously and this is the first oceanfront GO gold in years.
> 
> 
> I can tell you if you can get an oceanfront at this resort at whatever you think is a good price, I'd go for it because this is a super resort.




http://cgi.ebay.com/MARRIOTT-Grande...70481324089?pt=Timeshares&hash=item5642686039

This gold Grande Ocean week recently sold for $5210.  It doesn't speciiy that it's OF but I called Grande Ocean to ask where that unit is located and found out that it was indeed OF.


----------



## MOXJO7282

BarbS said:


> http://cgi.ebay.com/MARRIOTT-Grande...70481324089?pt=Timeshares&hash=item5642686039
> 
> This gold Grande Ocean week recently sold for $5210.  It doesn't speciiy that it's OF but I called Grande Ocean to ask where that unit is located and found out that it was indeed OF.



Well someone got a great deal on that ,if it is indeed OF. It said it had an oceanview, and didn't say OF which you would think a experienced seller would have made sure to reference, so I assumed OS. This makes me still skepical it is OF, because an OF is definaitely going to sell for more than OS and thsi seller is experienced.  

Let's see if I can use this infor to low ball the other listing on ebay


----------



## MOXJO7282

MOXJO7282 said:


> Well someone got a great deal on that ,if it is indeed OF. It said it had an oceanview, and didn't say OF which you would think a experienced seller would have made sure to reference, so I assumed OS. This makes me still skepical it is OF, because an OF is definaitely going to sell for more than OS and thsi seller is experienced.
> 
> Let's see if I can use this infor to low ball the other listing on ebay



I too checked an 8415 is in deed OF. I'm kicking myself because had I known I would have bought.

Why not, Even if it goes to zero resale value, an oceanfront at that resort will always have rental value.


----------



## siesta

MOXJO7282 said:


> I too checked an 8415 is in deed OF. I'm kicking myself because had I known I would have bought.
> 
> Why not, Even if it goes to zero resale value, an oceanfront at that resort will always have rental value.


 that timeshare seller is Uri Fried and "The Timeshare Company", they are notorious for mislabeled ads. I purchased a timeshare from them, and it didn't even state that it included a free year of usage with the MF paid for already. I see many ads that are incorrectly labeled, not always to the buyers benefit.  I would definitely verify any listing before paying.


----------



## mstoyanov

MOXJO7282,

It is true that a single auction on EBay does not always determine the price (there is too much statistical noise) but the auction here has "Buy Now" price and if nobody clicks on it for a while you can be assured that nobody who saw that listings consider the price to be fair for this auction let alone under priced.
If I see auction that is "anomaly" and is severely under priced and have "Buy Now" I immediately buy it and ask questions later - just yesterday I saw 2BR LO Sheraton Mountain Vista described as "prime" seasons with "Buy now" price at least $3K below real market price. I didn't waste any time asking stupid questions or trying to haggle with the seller and immediately clicked "Buy Now" since I was 95% sure I can make $3k simply by flipping the unit. Well it turned out that it was not for prime season (ski) but for summer season so I rejected the purchase but that is beside the point. If listing is really under priced (anomaly) there will always be someone with good pricing info who will buy the unit and flip it as soon as it is on his name even if he does not need it for personal use. As for the current listing there is no way it is under priced - in the last year after DC started there were at least 3 Platinum 2BR Annual Ocean Watch listings that ended for ~$10K (2 OS and 1 OV) on free bidding and I will take OV Platinum MOW anytime over OF Gold at GO. One can live with lesser view but can not change when his/her kids are out of school so in most cases season trumps the view easily (and in my very personal and subjective opinion MOW is more desired resort than GO for both trading and renting). 
And what someone lists on RedWeek for doesn't matter - this is simply wishful thinking he will find a buyer who is either not patient enough or not have enough pricing info. Most of the listings on RedWeek and other similar sites stays unsold for years and/or sell for a lot less than asking prices.
I had several cases that after being very firm in my low ball offers several months later owners contact me ready to sell me the unit at my low ball price only to find that I already bought similar units cheaper and my new offer is even lower since market prices already went down in the meantime.



MOXJO7282 said:


> I think you make a good point in a way. Ebay is not the true value of a resale price unless there are numerous records to consider. Like Newport Coast. Newport Coast is one of the most actively sold Marriotts on ebay, if not the most. Its fair to say that the resale value of NCV is about $8-$8.8k because dozens sell in that range.
> 
> Otherwise you really can't make any corrolations. I recently saw an Marriott Aruba Surf Plat OV 2BDRM sell for $15.6K on ebay. Is that the resale price? I don't think so, I think its more in the $13.5k-$14k range.
> 
> Now in the case of a GO Gold OF, you just don't see them on ebay and the ones on redweek are all well over $15K. I follow ebay pretty religiously and this is the first oceanfront GO gold in years.
> 
> 
> I can tell you if you can get an oceanfront at this resort at whatever you think is a good price, I'd go for it because this is a super resort.


----------



## dan_hoog

Is there a chance this is 'ultimate occupancy' where the deed unit doesn't match the view once a newer building is built?  I know they do this as resorts are built...  I don't know how you could be sure without an estoppel to Marriott or knowing someone on the inside (which I do).




MOXJO7282 said:


> I too checked an 8415 is in deed OF. I'm kicking myself because had I known I would have bought.
> 
> Why not, Even if it goes to zero resale value, an oceanfront at that resort will always have rental value.


----------



## OldPantry

timeos2 said:


> One of the "joys" of a points/club type system is the far lesser degree of control owner have over the system. While any club has to meet regulatory standards - very similar to those of a deeded or RTU type - the newer ones tend to take advantage of the less restrictive options that may be possible. An key example would be the long, costly and highly regulated foreclosure process needed to take even a delinquent week/unit away from the deeded owner. Most clubs are simply membrship based so once you turn over your deed and the protections it offers for a "membership" you now have a different set of rules.
> 
> In one case I'm aware of the company operating the club can and will terminate the membership - meaning you lost everything you ever paid - for a missed payment or two.  Or, as has happened, because the member posts what the "club" administrators feel is something detrimental to them/the club!  Poof! Your membership & money are gone all from the one sided decisions of the club operator. It can be done legally, quickly and without the drawn out, costly process required of a foreclosure. It is easy to see why the operators / developers like it more than deeds. But few fully understand wat they may be giving up when they turn over their deeds. It can be far more than just your voting rights and the protection of a deeded ownership.  BE careful.


There seems to be a persistent misunderstanding about what happens when existing timeshare owners join the vacation club.  They DO NOT turn over their deeds.  They give up no existing rights, and cannot be thrown out at the whim of the club operator.  The existing timeshare owner simply has the right to exchange for points, on a yearly basis, at his or her own convenience.  You have to buy new points to be put in the position you warn about, and it still applies ONLY to those new points.  So why are you constantly beating this drum?


----------



## timeos2

OldPantry said:


> There seems to be a persistent misunderstanding about what happens when existing timeshare owners join the vacation club.  They DO NOT turn over their deeds.  They give up no existing rights, and cannot be thrown out at the whim of the club operator.  The existing timeshare owner simply has the right to exchange for points, on a yearly basis, at his or her own convenience.  You have to buy new points to be put in the position you warn about, and it still applies ONLY to those new points.  So why are you constantly beating this drum?



Because  "You have to buy new points to be put in the position you warn about,"  - those buyers are in a bad position and may not be informed adequately prior to making a potentially bad choice.   Plus even the "voluntary" annual assignment of use rights can be canceled by the club - effectively returning you to a fixed week ownership andv your conversion fees lost.   It isn't only Marriott that pulls this - it is virtually all of the "club" type systems. 

Informed people make better decisions and have less complaints.  Getting people fully informed is what TUG is all about.  I happen to like club system & points but that doesn't mean I close my eyes to the possible pit falls and that I shouldn't do my best to minimize our exposure to potentially costly things they can impose.


----------



## OldPantry

timeos2 said:


> eBay is the ultimate marketplace - Redweek may ave offers with much higher prices but that is all they are - offers. The TRUE value is what a willing buyer and seller agree to - exactly what eBay generates in a wide open, public way.  IF the week(s) were REALLY worth 15K the bidding would get there in most cases as otherwise it is a steal & people would jump at it. Instead it barely reaches 8-9K or less as that is the true open market value.
> 
> Those that want to dismiss eBay (or any other selling , auction sites) are really reaching to justify unrealistic valuations they feel a resort/week "deserves".  The market says differently and that is the ultimate decision maker.


The thing about Ebay is that it attracts the most desperate sellers, and mostly, the least desirable weeks.  You rarely see an oceanfront platinum week offered without a substantial reserve.  So, yes, Ebay is the ultimate marketplace for junk, and the prices there are a true reflection, in general, of the value of junk.  I think most of the activity for good stuff occurs elsewhere, though.  People with value weeks tend to go to Redweek or MyResortNetwork to market their timeshares. That makes the higher end of the market harder to track, but it's still a real, and active, one.


----------



## OldPantry

timeos2 said:


> Because  "You have to buy new points to be put in the position you warn about,"  - those buyers are in a bad position and may not be informed adequately prior to making a potentially bad choice.   Plus even the "voluntary" annual assignment of use rights can be canceled by the club - effectively returning you to a fixed week ownership andv your conversion fees lost.   It isn't only Marriott that pulls this - it is virtually all of the "club" type systems.
> 
> Informed people make better decisions and have less complaints.  Getting people fully informed is what TUG is all about.  I happen to like club system & points but that doesn't mean I close my eyes to the possible pit falls and that I shouldn't do my best to minimize our exposure to potentially costly things they can impose.


Who could argue with the desirability of being well informed?  What you're doing, though, is making folks less well informed.  Nobody is "turning over their deeds" by joining the vacation club.  That's just wrong, and you should stop saying it!


----------



## SueDonJ

dan_hoog said:


> Is there a chance this is 'ultimate occupancy' where the deed unit doesn't match the view once a newer building is built?  I know they do this as resorts are built...  I don't know how you could be sure without an estoppel to Marriott or knowing someone on the inside (which I do).



I'm pretty sure Grande Ocean didn't sell with UO.  It's never come up in the TUG discussions about UO anyway, and considering that DaveM owns GO it probably would have.


----------



## timeos2

OldPantry said:


> Who could argue with the desirability of being well informed?  What you're doing, though, is making folks less well informed.  Nobody is "turning over their deeds" by joining the vacation club.  That's just wrong, and you should stop saying it!



Different clubs do it differently - in fact some have both (turn over deed or not) to really confuse things.  I have not, and will not, sit through a presentation regarding the Marriott DC. If you say they do not have any option of giving up your deeded ownership to them in return for a RTU or any other type of membership I will take your word for it until someone else says it isn't that way.  So assuming you are corect only those that are planning to purchase "new" DC points would be needing the warning about the lack of protections they may expect.  It is all so (purposefully) convoluted and intertwined that exactly what you get and for how much is always a moving target.  

Again this is not just a Marriott issue but one they now fall under along with many other systems as they moved to the new type of exchange model based on points vs simple deeded weeks.


----------



## wof45

timeos2 said:


> I have not, and will not, sit through a presentation regarding the Marriott DC. If you say they do not have any option of giving up your deeded ownership to them in return for a RTU or any other type of membership I will take your word for it until someone else says it isn't that way.  So assuming you are corect only those that are planning to purchase "new" DC points would be needing the warning about the lack of protections they may expect.  It is all so (purposefully) convoluted and intertwined that exactly what you get and for how much is always a moving target.



Perhaps you would not think it is convoluted or intertwined or a moving target if you read the documents or do an online chat with a VOA.


----------



## mstoyanov

MOXJO7282,

The real danger for any timeshare is raising MFs - when these gets closer to the rental prices not only sale value disappear but also rental value disappear too. Rental and resale value goes hand in hand and are reciprocally related to the MFs.
Here is very simple theoretical example that can happen to badly managed resort. Investor sees timeshare that sells for $10,000 with $1000 MFs that rents for $2,000 as a good income potential (after all 10% ROI is very good in real estate) so he buys it to make business with it. But resort is badly managed and each year MFs increase with 10% (without compounding for easy calculations) and rental value stays the same. So in 10 years MFs=$2,000 and rental value=resale value=$0. In these 10 years each year investor rented timeshare with 100% success. In year 1 he got $1,000 profit, in year 2 $900 profit and so on. So in 10 years he received $5,500 as rental profit but he lost $10,000 initial investment since his timeshare now is worth $0. So in the end his return on investment was negative and he would have been better simply putting $10,000 under the mattress.

As for how probable is that scenario - for a well managed resort, not much but last 2 years we saw Starwood resorts that had 30% increase in MFs in a single year. And normally as the resorts gets older it takes more maintenance for upkeep and resorts in general gets less desirable.
Even this year when some of the same Starwood resorts MFs went down significantly resale prices still stay low - since people remember the shock they got at initial increase and will remember how quickly timeshare costs can get out of control for quite some time. In order for the prices to raise to the previous level you need people without these memories.
The same reason is why economy is not rebounding fast - people will remember last economic crisis for quite some time and will be much more careful with their spending for a while. 

So far most of the Marriott resorts has been maintained relatively well with few exceptions (and I am talking about Prime seasons, there are a lot of resorts where lower seasons are already at the point where MFs are almost equal to the rental price so respectively prices for these are close to $0 on resale market). Big question is from now on will Marriott continue to be good manager or will they try to intentionally raise MFs to the point where all such resorts are almost worthless even for Platinum seasons.
Also another question is - how will lower season owners will react to the fact that they can rent for cheaper than MFs - if big group of these people dump lower season weeks this will push MFs up for everybody.



MOXJO7282 said:


> I too checked an 8415 is in deed OF. I'm kicking myself because had I known I would have bought.
> 
> Why not, Even if it goes to zero resale value, an oceanfront at that resort will always have rental value.


----------



## SueDonJ

timeos2 said:


> Different clubs do it differently - in fact some have both (turn over deed or not) to really confuse things.  I have not, and will not, sit through a presentation regarding the Marriott DC. If you say they do not have any option of giving up your deeded ownership to them in return for a RTU or any other type of membership I will take your word for it until someone else says it isn't that way.  So assuming you are corect only those that are planning to purchase "new" DC points would be needing the warning about the lack of protections they may expect.  It is all so (purposefully) convoluted and intertwined that exactly what you get and for how much is always a moving target.
> 
> Again this is not just a Marriott issue but one they now fall under along with many other systems as they moved to the new type of exchange model based on points vs simple deeded weeks.



John, OldPantry is correct.  Marriott didn't give anyone the option of giving up their deeded Week(s) in exchange for Destination Club Points.  The way it works is, if you own direct-purchased Week(s) or external-resales that were purchased prior to 6/20/10, you can pay the fee to enroll them and become an Exchange Member in the DC.  Enrollment and payment of the annual Club Dues entitles a member to elect to EITHER use his/her Week(s) as they've always been used OR elect annually to convert his/her Week(s) to the allotted DC Points for use in the DC Exchange Company.  Enrollment and payment of the annual Club Dues also entitles a member to II membership and the Marriott Rewards Points conversion option (which has always been available to direct purchasers, never before to external resales.)  If an Exchange Member does not pay the annual Club Dues, his/her Week(s) ownership remains the same as it always was - s/he simply forfeits the option to convert Week(s) to Points for DC Exchange Company use.

What you're talking about, the impact on deeded rights, changes in only one manner for Exchange Members who have enrolled their Week(s.)  You do give up your right to vote against Marriott's interests in any matters pertaining to the DC, which some consider a significant negative while others weigh the practicality of that right against the almost-insurmountable odds of gaining a majority vote against Marriott anyway, or can't envision a reason why a member would want to vote against the interests of the DC in which they're enrolled.  Plus, if an Owner chooses to not remain with the DC (by not paying Club Dues) then the right to vote against Marriott's interests in the DC is re-instated.  Those are a few reasons why some folks consider this a relatively insignificant matter, there may be others.  (And of course, what's important to one may not be to another.)

Every exact-match interval is assessed the same m/f regardless of whether the Owner is enrolled or not.  Each resort Board determines its own budget based on need with Marriott influencing the anticipated brand standard and scheduled refurbs.  Marriott is responsible for the m/f of any intervals which they hold as owner or developer, including those that they may have conveyed to the underlying DC Trust.  Each individual resort budget is subject to strict audits which are stipulated in the governing docs.  Marriott's 10% management fee is also stipulated in the governing docs.

Purchasing DC Points is an entirely different animal than enrolling Weeks in the DC.    Folks who buy DC Points are Trust Members and their purchase is deeded.  But I think you're correct in that Marriott may have more leeway to adjust annual m/f and allow fluctuation of processing fees for Trust Members than they do for Exchange Members.  At least, I don't see anything in the DC governing docs that holds Marriott to the need-based stipulations that are in the Week(s) governing docs.  More importantly though, the limitation on voting rights is without question significant for every Trust Member because their ownership consists solely of DC Points, and is not afforded the protections stipulated by the governing docs of the Exchange Members' underlying Week(s.)

Folks who do both - purchase Points and enroll Week(s) - can use a combination of their purchased and allotted Points in the Exchange Company according to the parameters of each.  All other rights and obligations are separate and distinct.


----------



## MOXJO7282

mstoyanov said:


> MOXJO7282,
> 
> The real danger for any timeshare is raising MFs - when these gets closer to the rental prices not only sale value disappear but also rental value disappear too. Rental and resale value goes hand in hand and are reciprocally related to the MFs.
> Here is very simple theoretical example that can happen to badly managed resort. Investor sees timeshare that sells for $10,000 with $1000 MFs that rents for $2,000 as a good income potential (after all 10% ROI is very good in real estate) so he buys it to make business with it. But resort is badly managed and each year MFs increase with 10% (without compounding for easy calculations) and rental value stays the same. So in 10 years MFs=$2,000 and rental value=resale value=$0. In these 10 years each year investor rented timeshare with 100% success. In year 1 he got $1,000 profit, in year 2 $900 profit and so on. So in 10 years he received $5,500 as rental profit but he lost $10,000 initial investment since his timeshare now is worth $0. So in the end his return on investment was negative and he would have been better simply putting $10,000 under the mattress.
> 
> As for how probable is that scenario - for a well managed resort, not much but last 2 years we saw Starwood resorts that had 30% increase in MFs in a single year. And normally as the resorts gets older it takes more maintenance for upkeep and resorts in general gets less desirable.
> Even this year when some of the same Starwood resorts MFs went down significantly resale prices still stay low - since people remember the shock they got at initial increase and will remember how quickly timeshare costs can get out of control for quite some time. In order for the prices to raise to the previous level you need people without these memories.
> The same reason is why economy is not rebounding fast - people will remember last economic crisis for quite some time and will be much more careful with their spending for a while.
> 
> So far most of the Marriott resorts has been maintained relatively well with few exceptions (and I am talking about Prime seasons, there are a lot of resorts where lower seasons are already at the point where MFs are almost equal to the rental price so respectively prices for these are close to $0 on resale market). Big question is from now on will Marriott continue to be good manager or will they try to intentionally raise MFs to the point where all such resorts are almost worthless even for Platinum seasons.
> Also another question is - how will lower season owners will react to the fact that they can rent for cheaper than MFs - if big group of these people dump lower season weeks this will push MFs up for everybody.


This isn't my first rodeo as you can see I own 12 marriott weeks. I've been successfully renting my excess weeks for 9 plus years and while things definitely tighten up alittle in 2009 and 2010, 2011 has been a great year and I see good things in the future based on all the demand I'm seeing.  It is true all the things you say are possible, not IMHO probable. I can't see how things could get worse then 2009 & 2010, in fact I say Marriott popularity will be on the upswing.

Now I'm alittle different than most owners in that I can weathr an increase in MFs easier than the next guy now that I have 12 units. In theory all I need to do is make a few dollars above my MFs and I'm happy as long as I cover my costs and pay for one one trip a year. Since I average xxxx above MF costs now, they could go up quite abit before it blows up my "program".

Example: Aruba Surf  - MFs  ~$1300 rents for $3k plus net is $1700. Even if MFs go up a $1000,I'm still OK.


----------



## icydog

SueDonJ said:


> John, OldPantry is correct.  Marriott didn't give anyone the option of giving up their deeded Week(s) in exchange for Destination Club Points.  The way it works is, if you own direct-purchased Week(s) or external-resales that were purchased prior to 6/20/10, you can pay the fee to enroll them and become an Exchange Member in the DC.  Enrollment and payment of the annual Club Dues entitles a member to elect to EITHER use his/her Week(s) as they've always been used OR elect annually to convert his/her Week(s) to the allotted DC Points for use in the DC Exchange Company.  Enrollment and payment of the annual Club Dues also entitles a member to II membership and the Marriott Rewards Points conversion option (which has always been available to direct purchasers, never before to external resales.)  If an Exchange Member does not pay the annual Club Dues, his/her Week(s) ownership remains the same as it always was - s/he simply forfeits the option to convert Week(s) to Points for DC Exchange Company use.
> 
> What you're talking about, the impact on deeded rights, changes in only one manner for Exchange Members who have enrolled their Week(s.)  You do give up your right to vote against Marriott's interests in any matters pertaining to the DC, which some consider a significant negative while others weigh the practicality of that right against the almost-insurmountable odds of gaining a majority vote against Marriott anyway, or can't envision a reason why a member would want to vote against the interests of the DC in which they're enrolled.  Plus, if an Owner chooses to not remain with the DC (by not paying Club Dues) then the right to vote against Marriott's interests in the DC is re-instated.  Those are a few reasons why some folks consider this a relatively insignificant matter, there may be others.  (And of course, what's important to one may not be to another.)
> 
> Every exact-match interval is assessed the same m/f regardless of whether the Owner is enrolled or not.  Each resort Board determines its own budget based on need with Marriott influencing the anticipated brand standard and scheduled refurbs.  Marriott is responsible for the m/f of any intervals which they hold as owner or developer, including those that they may have conveyed to the underlying DC Trust.  Each individual resort budget is subject to strict audits which are stipulated in the governing docs.  Marriott's 10% management fee is also stipulated in the governing docs.
> 
> Purchasing DC Points is an entirely different animal than enrolling Weeks in the DC.    Folks who buy DC Points are Trust Members and their purchase is deeded.  But I think you're correct in that Marriott may have more leeway to adjust annual m/f and allow fluctuation of processing fees for Trust Members than they do for Exchange Members.  At least, I don't see anything in the DC governing docs that holds Marriott to the need-based stipulations that are in the Week(s) governing docs.  More importantly though, the limitation on voting rights is without question significant for every Trust Member because their ownership consists solely of DC Points, and is not afforded the protections stipulated by the governing docs of the Exchange Members' underlying Week(s.)
> 
> Folks who do both - purchase Points and enroll Week(s) - can use a combination of their purchased and allotted Points in the Exchange Company according to the parameters of each.  All other rights and obligations are separate and distinct.


\
EXCELLENT. WHAT A GREAT SYNOPSIS. Thank you


----------



## Cmore

SueDonJ said:


> ...What you're talking about, the impact on deeded rights, changes in only one manner for Exchange Members who have enrolled their Week(s.)  You do give up your right to vote against Marriott's interests in any matters pertaining to the DC, which some consider a significant negative while others weigh the practicality of that right against the almost-insurmountable odds of gaining a majority vote against Marriott anyway, or can't envision a reason why a member would want to vote against the interests of the DC in which they're enrolled.  Plus, if an Owner chooses to not remain with the DC (by not paying Club Dues) then the right to vote against Marriott's interests in the DC is re-instated.  Those are a few reasons why some folks consider this a relatively insignificant matter, there may be others.  (And of course, what's important to one may not be to another.).....



Yes, thanks for the excellent summary. 
I do have one question, as my understanding of the above paragraph is slightly different.  I thought that Marriott only got control of an enrolled owners vote for a year in which they elect points - not every year they are in the club.  I may be wrong, but it is a difference and allows weeks owners greater control of their "vote" without having to quit the club so to speak.

That being said, I agree mvci owners should largely support what Marriott's vision for the resort is as that is what we are paying for, I think it primarily allows the COA to have input and final control of the annual budget.  So the BOD's function IMO is to not let Marriott get competely out of control on costs. 

If anyone has a clarification on that point it would be worth knowing.  Thx.


----------



## SueDonJ

Cmore said:


> Yes, thanks for the excellent summary.
> I do have one question, as my understanding of the above paragraph is slightly different.  I thought that Marriott only got control of an enrolled owners vote for a year in which they elect points - not every year they are in the club.  I may be wrong, but it is a difference and allows weeks owners greater control of their "vote" without having to quit the club so to speak.
> 
> That being said, I agree mvci owners should largely support what Marriott's vision for the resort is as that is what we are paying for, I think it primarily allows the COA to have input and final control of the annual budget.  So the BOD's function IMO is to not let Marriott get competely out of control on costs.
> 
> If anyone has a clarification on that point it would be worth knowing.  Thx.



(All the caps and bolding etc is quoted - it's not me yelling at you or emphasizing something that Marriott didn't.    )

This is from the "MARRIOTT VACATION CLUB DESTINATIONS EXCHANGE PROGRAM ENROLLMENT TERMS AND CONDITIONS" document:


> 1. Owner represents and warrants to MVCEC that, as an Exchange Member, Owner: ...
> e. will not exercise any vote Owner may have in the owners "association" (*"Resort Association"*) operating the resort in which Owner's Timeshare Interest is located (*"Resort"*) in a manner that is, in MVCEC's reasonable discretion, detrimental to the Program, including, without limitation, voting to limit or terminate the Resort's participation in the Program."



"Exchange Member" is defined in the "EXCHANGE PROCEDURES FOR MARRIOTT VACATION CLUB DESTINATION EXCHANGE PROGRAM" document as,


> "... a Member who is the owner of an Interest in an Affiliate Program which is not a trust who has voluntarily entered into an enrollment agreement with Exchange Company."



That to me says the voting stipulation exists for as long as an enrolled owner/Exchange Member remains enrolled in the DC.  I don't see anything which says the voting stipulation applies only during the years in which an Exchange Member converts Weeks to DC Points.


----------



## TJCNewYork

Cmore said:


> I agree mvci owners should largely support what Marriott's vision for the resort is as that is what we are paying for, I think it primarily allows the COA to have input and final control of the annual budget.  So the BOD's function IMO is to not let Marriott get competely out of control on costs.
> 
> If anyone has a clarification on that point it would be worth knowing.  Thx.



Cmore - I agree, the board of directors has a fiduciary role.  Controlling costs (read as MF) at a weeks-based resort with an established refurbishment cycle and cash flow tied to healthy reserves is likely to be straightforward.  The annual budget is sent to each owner and viewable online.  Based upon the budgets for my resorts, it is very clear that the budget is based upon weeks-ownership.  


The resorts where I own have been sold out for years.  Marriott has done a great job of itemizing budget items and identifying known variances.  Based upon a line-by-line comparison, changes in the brand standard (which impact reserves), spikes in the cost of energy, staff turnover, insurance premiums, taxes and to a lesser extent allowance for bad debt are among the transparent variables where reliance on BoD oversight is essential.  You are absolutely correct about that.


How a budget is structured for a resort that is not sold out and impacted by points-based ownership is not immediately clear.  For example, housekeeping costs.  How does that get computed with variable and shorter-than-a-week-stays factored in?  I could be wrong, but intuitively, the shorter-than-a-week-stay would contribute to higher housekeeping costs than a weeks-based-stay.  


How is bad debt factored in?  What processes and assumptions are used to protect the COA when weeks-based or points-based owners default?   Typically, the governing docs spell out the aging cycle before foreclosure proceedings kick-in.   I do not own at any resorts that have a weeks/points mix (that I am aware), so I'm unable to view the respective budget, governing docs and therefore gleen any additional insights other than what other TUGers feel comfortable sharing/disclosing.  This statement is not intended to imply that Marriott or any COA is hiding this information.  To the contrary, I believe Marriott has set up an e-mail channel for owners to correspond privately with BoD members (Typically, the BoD e-mail address is listed in the annual budget documents).


Given the financial stake all mvci owners (weeks & points) have, the additional clarity you're asking about would be welcome and helpful.


----------



## timeos2

*Additional costs should be covered*



TJCNewYork said:


> How a budget is structured for a resort that is not sold out and impacted by points-based ownership is not immediately clear.  For example, housekeeping costs.  How does that get computed with variable and shorter-than-a-week-stays factored in?  I could be wrong, but intuitively, the shorter-than-a-week-stay would contribute to higher housekeeping costs than a weeks-based-stay.
> 
> Given the financial stake all mvci owners (weeks & points) have, the additional clarity you're asking about would be welcome and helpful.



If a use period - week or points - has an owner it should pay the fees. The fact that a weeks use value is moved to points doesn't change the need/obligation for the owner to pay.  In some ways if a week gets committed to points and then the fees are paid through the points system it might be better for the Association as they have only one place to go to get paid - the points system operator rather than hundred's or thousands of individual owners.  Plus if the owner is paying to be in the points system it is far more likely they will also pay the fees due so they can use their points. 

As for split weeks additional costs can and should be billed and paid by the points system- not absorbed by the general ownership base.  A well run system has provisions for such payments and enforces them.


----------



## Cmore

SueDonJ said:


> (All the caps and bolding etc is quoted - it's not me yelling at you or emphasizing something that Marriott didn't.    )...



No problem, I am not that email/tech savvy, or hopefully that sensitive that it would matter, but I appreciate the thought.

Regarding the post... I see what you are talking about, but I will review my doc's this eve. and see why I thought that.  Could simply be my overly comprehensive view of "my week is still a week, unless I exchange it for points".  It is, but maybe I am giving up a little something, even when I don't exchange it for points.   

Overall, my immediate intepretation of the sections you list are that this is simply referring to the exchange company and not the overall operating and mgmt of the resort.  Although in practicality they are largely the same, since a resort's continued affiliation with MVCI requires maintaining the brand std.  So in practicality BoD's are really kind of a 'restrictor plate' on Marriott, but do retain the option (however unlikely) of dropping Marriott as the resort operator, if Marriott's demands were viewed as out of control by the ownership as a whole.

Regarding the whole "Trust/Points" issue in terms of how it relates to resorts is not clear to me either.   I assume at sold out resorts or mixed ownership resorts, until Marriott would choose to acquire enough weeks of ownership (and transfer them to the trust) to control the outcome any votes, the BoD's and weeks owners ultimately have the final say, even if that is rubberstamping Marriott's wishes.  

In 100% Trust resorts - I don't have any Trust doc's since I am an "exchange member"  but I suspect Marriott controls all the cards.  

Finally, my weeks are at resorts that are getting older, and I think we can thank Marriott and their continual demands for our money for keeping the properties in top condition.  I believe Cypress Harbour is one of the older resorts that was MVCI developed (not acquired), it still looks really good, and gets great ratings.  Many times that is not true among many other resort groups.  So it is only fair to give them credit for that.


----------



## SueDonJ

Cmore said:


> No problem, I am not that email/tech savvy, or hopefully that sensitive that it would matter, but I appreciate the thought.
> 
> Regarding the post... I see what you are talking about, but I will review my doc's this eve. and see why I thought that.  Could simply be my overly comprehensive view of "my week is still a week, unless I exchange it for points".  It is, but maybe I am giving up a little something, even when I don't exchange it for points.
> 
> Overall, my immediate intepretation of the sections you list are that this is simply referring to the exchange company and not the overall operating and mgmt of the resort.  Although in practicality they are largely the same, since a resort's continued affiliation with MVCI requires maintaining the brand std.  So in practicality BoD's are really kind of a 'restrictor plate' on Marriott, but do retain the option (however unlikely) of dropping Marriott as the resort operator, if Marriott's demands were viewed as out of control by the ownership as a whole.
> 
> Regarding the whole "Trust/Points" issue in terms of how it relates to resorts is not clear to me either.   I assume at sold out resorts or mixed ownership resorts, until Marriott would choose to acquire enough weeks of ownership (and transfer them to the trust) to control the outcome any votes, the BoD's and weeks owners ultimately have the final say, even if that is rubberstamping Marriott's wishes.
> 
> In 100% Trust resorts - I don't have any Trust doc's since I am an "exchange member"  but I suspect Marriott controls all the cards.
> 
> Finally, my weeks are at resorts that are getting older, and I think we can thank Marriott and their continual demands for our money for keeping the properties in top condition.  I believe Cypress Harbour is one of the older resorts that was MVCI developed (not acquired), it still looks really good, and gets great ratings.  Many times that is not true among many other resort groups.  So it is only fair to give them credit for that.



Hmmm.  I'm not sure I'm following your train of thought completely, but it seems we agree on many things related to Marriott's management of the resorts.  At least, we both appreciate that without Marriott's influence the resorts may not have been kept up as well as they have been.  And we both seem to recognize that Marriott doesn't have free reign to do whatever they want and run up the m/f - our Boards serve a function to keep costs reasonable, and our governing docs give us protections that at the least require Marriott to justify any questionable fee increases.

So far there aren't any resorts which are "100% Trust resorts."  It may be quite a while before we see one because Marriott doesn't have any brand new developments on the drawing board, and, it will be very surprising if every owner of an existing resort chooses to enroll in the DC.  (It simply isn't advantageous for every owner to do so, especially when you consider the low DC Point allocations for lower-demand weeks and/or units.)  But like you, again, I think that if/when 100% Trust resorts are in the system, Marriott will have much more leeway with them than with the existing resorts.

At the time of the DC rollout there were only eleven existing resorts which had inventory conveyed to the Trust by Marriott.  That number has increased somewhat - TUGger dioxide45 maintains a thread with updates here.  I think, though, that the voting stipulation for enrolled Weeks/Exchange Members gives Marriott much more control of the vote than only their Trust conveyances.  Marriott's not stupid, though, and they know that as long as the governing docs of the resorts give Weeks owners the right to vote them out as manager, if they play fast and loose with m/f then there's a substantial risk to them losing the income they derive from their successful resorts.


----------



## dioxide45

There are several (many?) resorts where some board members are MVCI employees. Sure they are owners, but they get their paycheck from MCVI. So how do we know what they consider more important? Their fellow owners or the company?

The owners that get put up for election are selected by a nominating committee that is setup by the board. Sure anyone can put their name in to run for a BOD, but they have to go through the committee and they ultimately decide who is and isn't on the ballot. If enough of the people on the nominating committee are more concerned about the company than the other owners views, they will put people on the ballot that fit their views.

Also note that there are several board members that are what you would consider "career board members". They are on several boards at several resorts and potentially hold president title on one while also serving on another.

Just because a resort is sold out doesn't mean that MVCI doesn't have great influence on the board.


----------



## SueDonJ

dioxide45 said:


> There are several (many?) resorts where some board members are MVCI employees. Sure they are owners, but they get their paycheck from MCVI. So how do we know what they consider more important? Their fellow owners or the company?
> 
> The owners that get put up for election are selected by a nominating committee that is setup by the board. Sure anyone can put their name in to run for a BOD, but they have to go through the committee and they ultimately decide who is and isn't on the ballot. If enough of the people on the nominating committee are more concerned about the company than the other owners views, they will put people on the ballot that fit their views.
> 
> Also note that there are several board members that are what you would consider "career board members". They are on several boards at several resorts and potentially hold president title on one while also serving on another.
> 
> Just because a resort is sold out doesn't mean that MVCI doesn't have great influence on the board.



Yep.  Even where the governing docs don't stipulate one or more Marriott seats on the Board, it's a huge challenge to vote in a completely owner-sympathetic board.  And should your resort manage to beat those odds, the docs still provide for Marriott influence by virtue of the "brand standard" protections given to Marriott in the docs.  It's a balancing act for sure, but if you want the Marriott name on the door you have to accept Marriott's control.


----------



## Cmore

SueDonJ said:


> ...the docs still provide for Marriott influence by virtue of the "brand standard" protections given to Marriott in the docs.  It's a balancing act for sure, but if you want the Marriott name on the door you have to accept Marriott's control.





dioxide45 said:


> Just because a resort is sold out doesn't mean that MVCI doesn't have great influence on the board.



Agreed to both, now for something interesting....

I recently enrolled our weeks when we were at DSII, and had pretty well decided that we wanted to before we left.  I basically just needed to clear up some questions and ended up with some free golf that I wouldn't have received on-line since we needed to visit with a sales rep to get my questions answered.  He was actually a very good sales rep (believe it or not) who endured all my "what if's" and my polite, but repetitive, "no thank-you's" to buying more points.

The interesting thing is our MVCEC enrollment agreement does not have provision 1(e) anywhere.  1 a,b,c,d exist and it is not a cut off page as 
the pg number and numerous sub-script notations exist below 1(d) at the bottom pg 1, and the top of page 2 starts right out with item 2.
If I am reading this correctly the revision date is 11.15.10.

So after reviewing the whole thing   I think they dropped it, as the other provisions largely make this a mute point.  Basically, if the resort drops the exchange company or it is not maintained to brand standards they can drop the resort, in which case our club membership as it relates to that resort is terminated, they owe us nothing, etc.  

My guess is rather than scaring people over some level of voting rights, they figured that the most important control they have, they already possess.... The Marriott name, and all that goes with it.

So that's what I think I know...


----------



## TJCNewYork

SueDonJ said:


> At the time of the DC rollout there were only eleven existing resorts which had inventory conveyed to the Trust by Marriott. That number has increased somewhat - TUGger dioxide45 maintains a thread with updates here.



Absolutely fascinating!  Great work Dioxide45.  I stopped reading, 'Recorded Trust Documents' at GregT's points consolidation post, because the connect-the-dots alarm started ringing in my head:



GregT said:


> Total points (largest to smallest)
> 
> Timberlodge...............11,022,750
> Ko Olina......................9,208,750
> Newport Coast Villas.....8,643,000
> Crystal Shores.............8,021,250
> Oceana Palms..............5,706,000
> MOC-Sequel................4,352,070
> Kalanipu'u...................3,529,500 (Kauai Lagoons)
> Canyon Villas..............3,105,500
> Willow Ridge................2,848,500
> MOC..........................2,410,750
> Shadow Ridge..............1,475,750
> Grande Chateau...........1,378,250
> Ocean Watch................992,000
> Grand Vista...................774,750
> DSV II..........................333,750
> Harbour Lake.................238,000
> Lakeshore Reserve..........153,750
> Fairway Villas.................110,000
> Cypress Harbour...............90,750
> Ocean Point....................71,000
> Barony Beach Club............69,750
> Mountain Side..................68,500
> Summit Watch.................45,000
> Sunset Point...................44,250
> Sabal Palms.....................39,000
> Royal Palms.....................35,000
> Manor Club Sequel............32,000
> Manor Club.....................30,000
> Harbour Club...................17,250
> DSV I............................16,000
> Doral.............................13,000
> Grande Ocean.................. 9,000
> Heritage Club.................. 7,500



Note the tie-in of GregT's list to Pool #3 shown in a whiteboard sales presentation seen at Custom House recently:


----------



## TJCNewYork

*Continuity and Mentoring is Essential for a COA BoD*



dioxide45 said:


> Just because a resort is sold out doesn't  mean that MVCI doesn't have great influence on the board.



An important point for sure, thanks for bringing it up, Dioxide.    'Great influence' can be positive or negative.  Example.  Over the past 2  years, we looked at timeshares in the Newport, Rhode Island market and  were really astonished.  The lack of brand standards was off-putting;  the poor quality of design and materials was a turn-off; the lack of  workmanship and a total absence of maintenance - let alone refurbishment  completely disappointing.  The remaining value these units have come  from their location in a booming and thriving waterfront community like  Newport. Yet, during the peak summer season, some resorts - right on the  waterfront - appeared to be ghost towns. That said, where's the  fiduciary responsibility by management and the board in retaining the  value of such valuable real estate?  ConsumerAffairs.com  lists Foreclosure Rescue, Ponzi Schemes and Timeshares among the Top 10  Scams of 2010.  Based upon what we saw in Newport, Rhode Island; it's  easy to see why Timeshares ranks among the top 10.  


From that perspective, even though a resort is 'sold out', Marriott's* 'great influence' *on  their boards can be guiding, protective, reassuring and benign in my  opinion.   Can Marriott's influence be over-protective?  Perhaps.    Newer BoD may not be able to spend the time to devote to service, so  having seasoned, dedicated owners - even if they are 'career' BoD - is  important because leadership, continuity, negotiation and mentoring is  absolutely essential to the successful operation of a COA.


----------



## Cmore

TJCNewYork said:


> ...  'Great influence' can be positive or negative....  From that perspective, even though a resort is 'sold out', Marriott's* 'great influence' *on  their boards can be guiding, protective, reassuring and benign in my  opinion.   Can Marriott's influence be over-protective?  Perhaps.    Newer BoD may not be able to spend the time to devote to service, so  having seasoned, dedicated owners - even if they are 'career' BoD - is  important because leadership, continuity, negotiation and mentoring is  absolutely essential to the successful operation of a COA.



Could not agree more, overall Marriott largely forces high reserves for top shelf refurbishment, that is why there is a consistently good product for us to enjoy.  

The BoD for our HOA of our main residence battles with this all the time.  Like the disparity in the overall population, people have different perspectives.  Some owners simply want monthly HOA fees as low as possible and would drop what others consider to be essential services and/or lower reserve funding of common elements.   These folks try to get on the BoD so they can have a direct vote on that and they simply appeal to the membership at the annual meeting that I am for lower monthly fees and have been a resident here for "x" years....  that is the sum total of their reason they deserve to be on the BoD.


----------



## c20854@aol.com

*Will Marriott owners be better represented in the new spin off timeshare company ?*

*Lets take this opportunity and turn this announcement into a very positive one for every Marriott Vacation Club Owner.* 

Given the recent article in the WSJ-DumpingTimeshares and Al Lewis's blog http://newswires-americas.com/tellittoal/ does it make sense to buy stock now in Marriott International (MAR) ?

I encourage you to consider doing the following so that your rights as a Marriott Timeshare owner are represented:  

1. Purchase Marriott International  (MAR) stock (approximately $40 per share) so as a stockholder you will have voting representation in the new company 

2. Push for the inclusion of several owner representatives as members of the new Board of Directors in the spin off company 

3. Support the creation of an office of Owner Ombudsman within the new company .   

4. Let's work together creating the largest Coalition of Timeshare Owners protecting our interests as Marriott creates the worlds largest stand alone time share company.  

5.  Stay informed as the regulatory process moves forward.  We must be aware of the SEC filings as well as any other state requirements to see how the new company will effect our ownership.   

Since the Wall Street Journal column of 2/12/11 by Al Lewis WSJ.com - Dumping Timeshares*, my email box has been filled by Marriott Timeshare owners around the world asking how can we make sure that we will be heard as Marriott spins off the timeshare division into a stand alone company? 

I have been encouraged in the overwhelming support for seeking owner representation on the new Board of Directors, the creation of an ombudsman office and an owners coalition.  Currently, Marriott International has voiced its objections to the SEC on a stockholders resolution creating an office of Owner Ombudsman.  

The Marriott Vacation Club International (MVCI) division has been the only negative aspect of the Marriott  brand as voiced by stockholders at the last two Marriott International annual meetings with write offs and impairment charges of over $1.2 billions dollars.   In its heyday, the MVCI division had been the cash cow, being one of the largest profit center yet one of the smallest divisions within Marriott International.  .  

Now, I believe both because of the economy and owner concerns with MVCI it has fallen on hard times.   The greatest strength and hope for the success of the Marriott brand and the new company is its 400,000+ owners. 

As Timeshare owners we already have a vest interest, so buying stock in Marriott International should give us a stronger voice once the spin off is completed.  

One of the bright spots of the new company is that it will be under the direction of Bill Shaw, the newly announced Chairman of the Board who is a trusted, hard working and dedicated individual.   We want the high standards that Mr. Shaw represents to be carried forward into the new Company.

The challenges ahead can only be successfully overcome with the support of current owners and stockholders.  Let’s hope that during this reorganization, under the direction of a new Board of Directors with owner representation, that MVCI will have learned from mistakes in the past and begin to work with Timeshare owners in a more collaborative and transparent fashion. 

Lets take this opportunity to protect our interest and move forward in a positive way by establishing a fresh new beginning. 

I look forward to hearing from you. 

Please contact me at: c20854@aol.com 

Thank you, Allan Cohen (301-299-2118)


----------



## Tommy_Boy

*Thanks for your posting*

I just sent you an e-mail, but just wanted to thank you for the posting.  This spin-off, and the WSJ article, are certainly concerning.  The spin-off could turn out to be a good thing....though I'd say the potential for it being negative probably outweighs the upside (i.e., if no longer truly associated with Marriott, the benefits of being part of the Marriott brand go away, etc.).

Interested in other information you may have on your initiatives.


----------



## TJCNewYork

*Deliver More Value*



Cmore said:


> Could not agree more, overall Marriott largely forces high reserves for top shelf refurbishment, that is why there is a consistently good product for us to enjoy.




'Forces high reserves' merits commentary.  

IMO, high reserves and a periodic Reserve Study go hand-in-hand.  Let's also not minimize the importance of Guest Satisfaction Surveys.  As management, Marriott's role in overseeing the implementation of ongoing GSS and a periodic Reserve Study is absolutely crucial.  The GSS/owner feedback is among the core tools that Marriott can employ to move a BoD to action (aka higher reserves).   

In its fiduciary role, the BoD must have something substantive like a Reserve Study or consistently low GSS scores to make a decision about replacing assets x,y,z to enhance the value or respond to owner feedback.  

If this is the basis for "consistently good product", perhaps 'benign force' may be more meaningful?  In the context of spinco and mixed weeks/points ownership there is the opportunity to sharpen the tools, metrics and feedback processes that Marriott and BoD can use to deliver more value.


----------



## SueDonJ

c20854@aol.com said:


> *Lets take this opportunity and turn this announcement into a very positive one for every Marriott Vacation Club Owner.*
> 
> Given the recent article in the WSJ-DumpingTimeshares and Al Lewis's blog http://newswires-americas.com/tellittoal/ does it make sense to buy stock now in Marriott International (MAR) ?
> 
> I encourage you to consider doing the following so that your rights as a Marriott Timeshare owner are represented:
> 
> 1. Purchase Marriott International  (MAR) stock (approximately $40 per share) so as a stockholder you will have voting representation in the new company
> 
> 2. Push for the inclusion of several owner representatives as members of the new Board of Directors in the spin off company
> 
> 3. Support the creation of an office of Owner Ombudsman within the new company .
> 
> 4. Let's work together creating the largest Coalition of Timeshare Owners protecting our interests as Marriott creates the worlds largest stand alone time share company.
> 
> 5.  Stay informed as the regulatory process moves forward.  We must be aware of the SEC filings as well as any other state requirements to see how the new company will effect our ownership.
> 
> Since the Wall Street Journal column of 2/12/11 by Al Lewis WSJ.com - Dumping Timeshares*, my email box has been filled by Marriott Timeshare owners around the world asking how can we make sure that we will be heard as Marriott spins off the timeshare division into a stand alone company?
> 
> I have been encouraged in the overwhelming support for seeking owner representation on the new Board of Directors, the creation of an ombudsman office and an owners coalition.  Currently, Marriott International has voiced its objections to the SEC on a stockholders resolution creating an office of Owner Ombudsman.
> 
> The Marriott Vacation Club International (MVCI) division has been the only negative aspect of the Marriott  brand as voiced by stockholders at the last two Marriott International annual meetings with write offs and impairment charges of over $1.2 billions dollars.   In its heyday, the MVCI division had been the cash cow, being one of the largest profit center yet one of the smallest divisions within Marriott International.  .
> 
> Now, I believe both because of the economy and owner concerns with MVCI it has fallen on hard times.   The greatest strength and hope for the success of the Marriott brand and the new company is its 400,000+ owners.
> 
> As Timeshare owners we already have a vest interest, so buying stock in Marriott International should give us a stronger voice once the spin off is completed.
> 
> One of the bright spots of the new company is that it will be under the direction of Bill Shaw, the newly announced Chairman of the Board who is a trusted, hard working and dedicated individual.   We want the high standards that Mr. Shaw represents to be carried forward into the new Company.
> 
> The challenges ahead can only be successfully overcome with the support of current owners and stockholders.  Let’s hope that during this reorganization, under the direction of a new Board of Directors with owner representation, that MVCI will have learned from mistakes in the past and begin to work with Timeshare owners in a more collaborative and transparent fashion.
> 
> Lets take this opportunity to protect our interest and move forward in a positive way by establishing a fresh new beginning.
> 
> I look forward to hearing from you.
> 
> Please contact me at: c20854@aol.com
> 
> Thank you, Allan Cohen (301-299-2118)



Allan, I'm sorry, but if you intend to put yourself into the same position of "Concerned Owner" with the spin-off as you did with the Aruba Ocean Club, then it's my opinion that all of our ownerships will suffer tremendously and will cost us far more than if you didn't dispense advice and become involved.

For anyone who is not aware of Allan's contentious history and reputation with MVCI, take a few weeks to browse through this.  Be aware that Allan didn't post regularly to the thread but his missives were copied there by TUGger marksue.


----------



## Fredm

SueDonJ said:


> Allan, I'm sorry, but if you intend to put yourself into the same position of "Concerned Owner" with the spin-off as you did with the Aruba Ocean Club, then it's my opinion that all of our ownerships will suffer tremendously and will cost us far more than if you didn't dispense advice and become involved.
> 
> For anyone who is not aware of Allan's contentious history and reputation with MVCI, take a few weeks to browse through this.  Be aware that Allan didn't post regularly to the thread but his missives were copied there by TUGger marksue.



*Amen!!!!!!*


----------



## SueDonJ

Fredm said:


> *Amen!!!!!!*



The more I think about this, the more terrified I am of what's ahead for all of us if Allan Cohen is able to generate support for whatever cause he champions.  This is no joke, and I am not exaggerating when I say "terrified."  The man was the catalyst for actions against MVCI which cost all Aruba Ocean Club owners (at last count*) "$189,000 in legal and associated fees."  And his efforts were not successful.

(*If you sign in to your my-vacationclub.com account, navigate to the Aruba Ocean Club page and click on the Owners tab, you'll find many other official statements from Marriott and the AOC board which chronicle Allan's missteps.)

One caution specifically because of the way he ended his missive above, "... I look forward to hearing from you.   Please contact me at: c20854ATaol.com ..."  (link disabled on purpose.)  There were allegations in the Aruba Ocean Club lawsuit thread that the personal contact information of owners who had contacted Allan in his role as a board member while he was a member, was later used by the "Concerned Owners" group in various ways which had not been authorized by those owners.  I would not encourage anyone to send him private emails or PM's through TUG.


----------



## Cmore

TJCNewYork said:


> 'Forces high reserves' merits commentary.



Perhaps, I could have used better terminology, I think we agree.


----------



## SueDonJ

Cmore said:


> Agreed to both, now for something interesting....
> 
> I recently enrolled our weeks when we were at DSII, and had pretty well decided that we wanted to before we left.  I basically just needed to clear up some questions and ended up with some free golf that I wouldn't have received on-line since we needed to visit with a sales rep to get my questions answered.  He was actually a very good sales rep (believe it or not) who endured all my "what if's" and my polite, but repetitive, "no thank-you's" to buying more points.
> 
> *The interesting thing is our MVCEC enrollment agreement does not have provision 1(e) anywhere.*  1 a,b,c,d exist and it is not a cut off page as
> the pg number and numerous sub-script notations exist below 1(d) at the bottom pg 1, and the top of page 2 starts right out with item 2.
> If I am reading this correctly the revision date is 11.15.10.
> 
> So after reviewing the whole thing   I think they dropped it, as the other provisions largely make this a mute point.  Basically, if the resort drops the exchange company or it is not maintained to brand standards they can drop the resort, in which case our club membership as it relates to that resort is terminated, they owe us nothing, etc.
> 
> My guess is rather than scaring people over some level of voting rights, they figured that the most important control they have, they already possess.... The Marriott name, and all that goes with it.
> 
> So that's what I think I know...



You're right, this is very interesting!  I just went through the enrollment doc that's on my-vacationclub.com now and section 1(e) is no longer a part of that either.  Hmmmm.  For some folks that voting restriction is the major reason why they won't consider enrollment.

Dioxide, if I'm remembering correctly you posted a while back about revisions to the online docs that you'd found.  I can't remember enough of the details to narrow a TUG search to find your post.  But if it was you, do you remember that the removal of the voting restriction was one of the changes you'd found?


----------



## Fredm

SueDonJ said:


> The more I think about this, the more terrified I am of what's ahead for all of us if Allan Cohen is able to generate support for whatever cause he champions.  This is no joke, and I am not exaggerating when I say "terrified."  The man was the catalyst for actions against MVCI which cost all Aruba Ocean Club owners (at last count*) "$189,000 in legal and associated fees."  And his efforts were not successful.



Exactly.
This is even more prone to folly and mischief.
There is so much misinformation/misunderstanding about the stock split, etc. it could get support from those that are simply excitable.

The whole thing smacks of manipulation to me.


----------



## wof45

it figures there would be an ambulance chaser with a class action suit.  We can all spend a ton of money in extra MF to cover defending the suit, and get a free t-shirt, while the ambulance chaser gets rich.


----------



## OldPantry

wof45 said:


> it figures there would be an ambulance chaser with a class action suit.  We can all spend a ton of money in extra MF to cover defending the suit, and get a free t-shirt, while the ambulance chaser gets rich.


Pardon a note of skepticism.  How has this ambulance chaser gotten rich?  I know you condemn his judgment, but at the very least, this seems a severe exaggeration.   Does this really improve the level of discourse?


----------



## TJCNewYork

Now that was exhausting.  *Spinco is an exciting opportunity for a fresh start*.    Staying "informed as the regulatory process moves forward" is due diligence.   All legacy and points owners have a stake.  So keeping this friendly, and not contentious may be in our best interests.  

Quoting the "Note on Forward-looking statements" cited in the Frequently Asked Questions Regarding the Proposed Transaction: 

"Statements in this document about the proposed spin-off of Marriott International, Inc.’s timeshare operations and development business concern anticipated future events and expectations that are not historical facts and are “forward-looking statements” within the meaning of federal securities laws. We cannot assure you that the spin-off will occur or take place on schedule, as there remain many risks and uncertainties that could delay or otherwise affect the transaction. These risks include the ability to obtain *regulatory approvals*; receipt of a favorable letter *ruling from the Internal Revenue Service*; *final approval by Marriott’s board of directors*; and *other risk factors* identified in Marriott’s soon to be issued 2010 annual report on Form 10-K. Any forward-looking statements in this document are made as of February 14, 2011 and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise."

Progress through these regulatory hoops will be complex.  Since the transaction involves deeded real estate and deeded points, what happens at the state level where real estate is subject to statute _state-by-state_ may involve some 'ambulance chasing'. Let's hope not, but it is a possibility to be 'terrified' about because owners (like myself) are unprepared for anymore legal surprises and the 'sticker shock' that goes with it.


----------



## TJCNewYork

OldPantry said:


> Does this really improve the level of discourse?



Thank you for raising that question.


----------



## lovearuba

*Who is the terror here*



SueDonJ said:


> The more I think about this, the more terrified I am of what's ahead for all of us if Allan Cohen is able to generate support for whatever cause he champions.  This is no joke, and I am not exaggerating when I say "terrified."



This seems to be your personal website, the constant scrutiny over every post and voluminous comments clearly show your unrealistic expectations that only your opinions count. Well contrary to what this means to you but Allan and you are both entitled to your opinion. Recommendations that owners purchase shares should seem reasonable regardless of who's opinion it is. The moderator needs to take a little more time reading your comments and address your disrespectful behavior.


----------



## SueDonJ

--- deleted ---


----------



## dioxide45

lovearuba said:


> This seems to be your personal website, the constant scrutiny over every post and voluminous comments clearly show your unrealistic expectations that only your opinions count. Well contrary to what this means to you but Allan and you are both entitled to your opinion. Recommendations that owners purchase shares should seem reasonable regardless of who's opinion it is. The moderator needs to take a little more time reading your comments and address your disrespectful behavior.



While it may be his opinion, should he be using this forum to solicit for information to feed his agenda?


----------



## GregT

> The moderator needs to take a little more time reading your comments and address your disrespectful behavior.



I may have many problems with SueDonJ    but it's never due to disrepectful behavior.  She is a welcome addition to the Forum and I enjoy reading her posts.

I thought we closed this thread 14 pages ago?

How about those Chargers?

NFL Season next year?

Will the Padres pull off another magical season?

Giants repeating????

Best,

Greg


----------



## SueDonJ

Thanks Greg, much appreciated.

It would be foolish for me to try to say that I have never been disrespectful when posting to TUG - sometimes discussions get tense and it's only human nature to lose composure occasionally.  But if anyone thinks that I intended disrespect here in this thread, I'd like to clear the air.

I thought I made it quite clear that it is *my opinion* that Allan Cohen is not someone whom I would choose to champion a cause and it worries me that he's set his sights on the impending spin-off.  It's an opinion I formed while participating in that Aruba Ocean Club lawsuit thread, I shared it here because the opportunity presented itself (especially considering that the post immediately after his was from a TUGger who wasn't involved in the MAOC thread and had sent him an email,) but I certainly am not making demands that anyone and everyone agree with my opinion.  Take it for what it is, and feel free to form your own.

To support my opinion, though, I stated two things which I consider facts and which appeared to me to follow his post naturally.  Namely, he is the catalyst for exorbitant legal fees which all MAOC owners are facing, and, there were allegations in that thread that he released MAOC owners' personal contact information to others for reasons that were not related to those owners' previous contact with him.  The first statement of fact is supported by this document issued by the MAOC Board which names Allan Cohen specifically; the second statement of fact is supported by this and similar posts in that MAOC thread.

Finally, I don't care about how many posts I have on TUG (other than the Upping Your Post Count Game  ) or who thinks I post too much.  I love TUG and want to continue to post to my heart's content.  But I don't want to be disrespectful when it's not warranted, and so I've asked the mods to review my posts in this thread and let me know if I've crossed TUG boundaries.  Waiting on a reply ...

Now I really wouldn't mind if we all moved on and continued with trying to figure out how the many changes we're facing with our Marriott timeshares will affect us ...

Oh, and go Sox!


----------



## Luckybee

SueDonJ said:


> Thanks Greg, much appreciated.
> 
> It would be foolish for me to try to say that I have never been disrespectful when posting to TUG - sometimes discussions get tense and it's only human nature to lose composure occasionally.  But if anyone thinks that I intended disrespect here in this thread, I'd like to clear the air.
> 
> I thought I made it quite clear that it is *my opinion* that Allan Cohen is not someone whom I would choose to champion a cause and it worries me that he's set his sights on the impending spin-off.  It's an opinion I formed while participating in that Aruba Ocean Club lawsuit thread, I shared it here because the opportunity presented itself (especially considering that the post immediately after his was from a TUGger who wasn't involved in the MAOC thread and had sent him an email,) but I certainly am not making demands that anyone and everyone agree with my opinion.  Take it for what it is, and feel free to form your own.
> 
> To support my opinion, though, I stated two things which I consider facts and which appeared to me to follow his post naturally.  Namely, he is the catalyst for exorbitant legal fees which all MAOC owners are facing, and, there were allegations in that thread that he released MAOC owners' personal contact information to others for reasons that were not related to those owners' previous contact with him.  The first statement of fact is supported by this document issued by the MAOC Board which names Allan Cohen specifically; the second statement of fact is supported by this and similar posts in that MAOC thread.
> 
> Finally, I don't care about how many posts I have on TUG (other than the Upping Your Post Count Game  ) or who thinks I post too much.  I love TUG and want to continue to post to my heart's content.  But I don't want to be disrespectful when it's not warranted, and so I've asked the mods to review my posts in this thread and let me know if I've crossed TUG boundaries.  Waiting on a reply ...
> 
> Now I really wouldn't mind if we all moved on and continued with trying to figure out how the many changes we're facing with our Marriott timeshares will affect us ...
> 
> Oh, and go Sox!



As she indicated it is her OPINION. Of course we would have to leave it to Sue to drag the pending litigation into this 

My OPINION based on the "facts"(we can all interpret the "facts") that when the board for Aruba sent out notices as to who wanted their info provided they did so in a manner that anyone unaware of the situation would have obviously said no to providing info because the board  attempted to scare people into doing just that by not disclosing the reason for the request and making it sound like the request was for marketing purposes. I am unaware of anyone who read the notice that didnt read it in that manner.

My OPINION is that Allan has been the one person trying to save owners money by standing up to Marriott and the numerous questionable issues that have taken place at the OC and in no way is the "catalyst" for any increased costs. Matter of "fact" it is my OPINION but for Allan the Mf's would be even higher. Had Allan not taken the actions that he did the more "TERRIFIED" I would be imagining what we would be paying.

It continues to be my OPINION that when the "pending" litigation is complete only then can we say whether or not Allan has been successful. Note I said "pending" not as stated in the earlier post as "And his efforts were not successful" . 

yep...we're all entitled to our opinions...and it is my OPINION that I still find it very curious that there are those who have absolutely nothing to do with the AOC yet still have such strong opinions about the AOC that they continue to bring up the AOC in order to disparge efforts of others ...very curious indeed ...especially when many of us who do have a stake in the outcome have gone to great pains to leave the topic alone for now waiting to see the results when the matters are finally resolved.

And it is my OPINION, that some didnt just "participate" in the OC thread rather they attemped to bully and be disrespectful to anyone who had a differing "opinion" from them....so why should this thread be any different !! Its the main reason that many of us now try and avoid posting much if at all because of the domination of some on TUG !


----------



## ilene13

Luckybee said:


> As she indicated it is her OPINION. Of course we would have to leave it to Sue to drag the pending litigation into this
> 
> My OPINION based on the "facts"(we can all interpret the "facts") that when the board for Aruba sent out notices as to who wanted their info provided they did so in a manner that anyone unaware of the situation would have obviously said no to providing info because the board  attempted to scare people into doing just that by not disclosing the reason for the request and making it sound like the request was for marketing purposes. I am unaware of anyone who read the notice that didnt read it in that manner.
> 
> My OPINION is that Allan has been the one person trying to save owners money by standing up to Marriott and the numerous questionable issues that have taken place at the OC and in no way is the "catalyst" for any increased costs. Matter of "fact" it is my OPINION but for Allan the Mf's would be even higher. Had Allan not taken the actions that he did the more "TERRIFIED" I would be imagining what we would be paying.
> 
> It continues to be my OPINION that when the "pending" litigation is complete only then can we say whether or not Allan has been successful. Note I said "pending" not as stated in the earlier post as "And his efforts were not successful" .
> 
> yep...we're all entitled to our opinions...and it is my OPINION that I still find it very curious that there are those who have absolutely nothing to do with the AOC yet still have such strong opinions about the AOC that they continue to bring up the AOC in order to disparge efforts of others ...very curious indeed ...especially when many of us who do have a stake in the outcome have gone to great pains to leave the topic alone for now waiting to see the results when the matters are finally resolved.
> 
> And it is my OPINION, that some didnt just "participate" in the OC thread rather they attemped to bully and be disrespectful to anyone who had a differing "opinion" from them....so why should this thread be any different !! Its the main reason that many of us now try and avoid posting much if at all because of the domination of some on TUG !



touche!!


----------



## puckmanfl

good morning...

Sue..
keep on posting.  If you stop I will end up losing Perry and you in the same calendar year.  I can't deal with the strain of that!!! I enjoy your insights, especially as the owner (similiar to myself, of a 3 bedroom unit)...I will have more questions for you as my first trip to HHI (7/30-8/5) DC point 3 bedroom at Surfwatch comes closer...

puckman...

it's gettin a little testy on this thread....
p.s love the Mass location.. although I am in Florida my oldest cash drain (son) went to Lawrence Academy (groton)  for the hockey (whatelse??? and smarts)


----------



## TJCNewYork

Luckybee said:


> those who have absolutely nothing to do with the AOC yet still have such strong opinions about the AOC that they continue to bring up the AOC in order to disparge efforts of others ...



My interest in a speedy resolution and a positive outcome for the concerned owners at AOC regards "*common themes*" that are of concern to *all* MVC owners.  There are many of them including *management control*, *governance* and *regulatory compliance* which have already surfaced in this discussion. 

What seems to be a rallying call to organize for the 'common owner good' by buying stock, monitoring regulatory compliance, and championing some form of owner representation on spinco's BoD was not even discussed for it's merits.  As quoted above, I agree with the opinion that one person's leadership efforts were disparaged.  




Luckybee said:


> Its the main reason that many of us now try and avoid posting much if at all because of the domination of some on TUG !



To some extent, I agree and would like to add some clarity as to why I feel that way.  Based upon recent postings elsewhere*, it is very clear to me that the MVC and MVCD community is disenfranchised, unorganized and relatively powerless - except to walk away.  Disparaging another member of this community only preserves that state, IMHO.  Sadly, it also turns our attention away from seeking a positive outcome - together.

* Elsewhere:
An Exciting Future for Marriott Vacation Club International
Providing Our Timeshare Owners with More Flexibility
Timeshares / Vacation Rentals Forum: Marriott Vacation Club Destinations Exchange Program 
Not trying to put words into anyone's mouth, a positive and open-ended *re-phrasing* of the intent of several recent posts may offer an exit approach.   *There are lessons-learned* from the MAOC struggle to negotiate with management, achieve transparency in governance, provide equity in owner voting rights; and rally efforts to organize owners.  The lessons-learned *may or may not apply* to active owner involvement  and support towards the successful realization of spinco. 

As a MVC owner and TUG guest, I am enthusiastic, continue to feel engaged and very open to continuing discusssion.   Hopefully, vitriolic debate about what the lessons-learned are, will be fruitful.   But, if disparaging and disrespectful behavior continues, it takes away from the sense of TUG as a welcoming community, undermines the value of joining, and negates the benefit of active participation.

 pondering future participation


----------



## MALC9990

TJCNewYork said:


> My interest in a speedy resolution and a positive outcome for the concerned owners at AOC regards "*common themes*" that are of concern to *all* MVC owners.  There are many of them including *management control*, *governance* and *regulatory compliance* which have already surfaced in this discussion.
> 
> What seems to be a rallying call to organize for the 'common owner good' by buying stock, monitoring regulatory compliance, and championing some form of owner representation on spinco's BoD was not even discussed for it's merits.  As quoted above, I agree with the opinion that one person's leadership efforts were disparaged.
> 
> 
> 
> 
> To some extent, I agree and would like to add some clarity as to why I feel that way.  Based upon recent postings elsewhere*, it is very clear to me that the MVC and MVCD community is disenfranchised, unorganized and relatively powerless - except to walk away.  Disparaging another member of this community only preserves that state, IMHO.  Sadly, it also turns our attention away from seeking a positive outcome - together.
> 
> * Elsewhere:
> An Exciting Future for Marriott Vacation Club International
> Providing Our Timeshare Owners with More Flexibility
> Timeshares / Vacation Rentals Forum: Marriott Vacation Club Destinations Exchange Program
> Not trying to put words into anyone's mouth, a positive and open-ended *re-phrasing* of the intent of several recent posts may offer an exit approach.   *There are lessons-learned* from the MAOC struggle to negotiate with management, achieve transparency in governance, provide equity in owner voting rights; and rally efforts to organize owners.  The lessons-learned *may or may not apply* to active owner involvement  and support towards the successful realization of spinco.
> 
> As a MVC owner and TUG guest, I am enthusiastic, continue to feel engaged and very open to continuing discusssion.   Hopefully, vitriolic debate about what the lessons-learned are, will be fruitful.   But, if disparaging and disrespectful behavior continues, it takes away from the sense of TUG as a welcoming community, undermines the value of joining, and negates the benefit of active participation.
> 
> pondering future participation



Can anyone name a Fortune 500 Global Corporation that has a customer representation on their Board of Directors ?

The concept of MVCI owners buying stock is essentially a good one but let's not fool ourselves that even if 10% of the 400,000 owners were to participate, it would actually amount to anything but a fragmented and isolated interest group. Most stock in Fortune 500 corporations is held by pension and mutual funds who decide on their requirements of investments without giving "customers" a second or even third thought.


----------



## wof45

I believe it is a mistake to believe MVCD does not want happy customers.

One of their main goals is to sell more points, and the existing customers -- weeks or points -- are a major source of sales.  So, a major goal is to make customer's happy.

I think most of us know that many Tuggers are anti Marriott, and never want to buy anything else and tell everyone not to buy retail and are very picky about little things, mainly because they do not understand exactly how they work.

I think that is fine, but most customers are not tuggers, and many tuggers are happy with what they have with MVCD.


----------



## Cmore

MALC9990 said:


> Can anyone name a Fortune 500 Global Corporation that has a customer representation on their Board of Directors ?
> 
> The concept of MVCI owners buying stock is essentially a good one but let's not fool ourselves that even if 10% of the 400,000 owners were to participate, it would actually amount to anything but a fragmented and isolated interest group. Most stock in Fortune 500 corporations is held by pension and mutual funds who decide on their requirements of investments without giving "customers" a second or even third thought.



You are so right, MAR is a huge company with a very large market cap.  trying to make an impact in this fashion is a fools errand, unless we can get Soros, Gates, Buffett, Slim, etc. to get in.... oh wait, I wonder what their interest in an investment would be....  

The decision to make a financial investment should strictly be made on its own merit.


----------



## Cmore

wof45 said:


> ...I think most of us know that many Tuggers are anti Marriott, and never want to buy anything else and tell everyone not to buy retail and are very picky about little things, mainly because they do not understand exactly how they work.
> 
> I think that is fine, but most customers are not tuggers, and many tuggers are happy with what they have with MVCD.



Many Tugger's anti-Marriott, I am not sure why someone would think that  

You are very correct, Most people are not tuggers, sometimes to their detriment.  But many Tuggers and mvci/mvcd owners are in general quite happy as well.   JMO, but I think what the 'angy' Tuggers are most concerned about is that they had figured out the old system, and now the new system offers a more level playing field that is harder (not impossible) to game or effectively be "way better at" than the other owners.

The new system is here, they are selling points, they will continue to sell points and lots of them.  The new spin off is going to be fine, Marriott is going to be fine,  and we all would be best off figuring out how to maximize our ability to use both systems.   On that point, PerryM has been right for a very long time.


----------



## kjd

There is the notion conveyed here that the word "spinoff" is really code for bankruptcy.  It's not.  If it is obvious that a division of a corporation is a non-performing asset corporations simply dissolve the division one way or another and move on.  That almost always increases the value of their stock.

The spinoff will not go bankrupt.  A spinoff has to have the expectation of being able to survive and thrive on its' own.  A spinoff usually occurs when the total stock value of a corporation is undervalued.  In other words the sum of the parts is greater than the whole.  Therefore some of the parts are sold off in order to release value.

I doubt a company like Marriott is trying to put one over on the financial community.  I believe they fully expect the spinoff to thrive and make money.  What's wrong with that?  Nothing.

There are major differences between being a Marriott stockholder and a Marriott timeshare owner.  It doesn't do much good to confuse the two.  As an timeshare owner I fully intend to use my units to the fullest extent possible without regard to the value of the corporation or the value of my timeshares.  For those primarily interested in the value of corporation I suggest either buying the stock or selling it short depending upon your outlook.


----------



## SueDonJ

I've always believed that timeshare ownership begins and ends with the contracts and governing docs.  It's my opinion that 99 times out of 100, you're doomed to failure if you try to enact changes that are not supported by the existing legal contracts and documents.  So you're an owner and you don't like something?  Do what you can to learn your contracted rights and fight for what you want through the proper channels.  Recognize that your most formidable hurdle will be the legal obligations and limitations that stand in your way, and ally yourself with someone who is legally qualified and has the specific expertise to go up against the giant timeshare companies' extensive in-house and otherwise-available legal counsel.  Most importantly, recognize your own limitations and listen to others who may have more knowledge than you do.

Again, my opinion, but I wouldn't automatically act on a list of suggestions related to my timeshare ownership unless I knew that the suggestions were approved by people who hold the expertise necessary to make such suggestions.  If it comes to it, I also wouldn't allow my name to be attached in any way to a list of demands given to Marriott by anyone other than a qualified expert attorney.  At the very least, I would want proof that such an attorney has verified the reasonableness of each item on such a list.  But okay, let's discuss the items in Allan Cohen's list anyway even though we don't know if it's been compiled with the benefit of counsel or expert opinion:



> 1. Purchase Marriott International (MAR) stock (approximately $40 per share) so as a stockholder you will have voting representation in the new company


On its face it's not a bad statement because the action supports the result.  But like MALC and others have said, it's going to take a whole lot of owners purchasing a whole lot of stock to make a difference.  Plus, it's one thing to speculate about when and why to make a stock purchase, it's a whole different animal to determine if such a purchase fits your individual financial picture and what you can reasonably expect afa gains and losses.  Heck, I mentioned the stock in another thread for another reason just the other day (and it turns out I'd lost my mind somewhere in that thought) but I wouldn't just tell someone else to buy it.  And I wouldn't accept the suggestion from anyone who has no knowledge of my financial situation.



> 2. Push for the inclusion of several owner representatives as members of the new Board of Directors in the spin off company


Again, like MALC asked, is there a precedence to support this?  If not, do/will the governing docs support it?  If not, what's it going to take to get it?  Marriott's not going to just roll over and say, "yeah, great idea, let's give seats to owners whose visions of the product may conflict with our visions for the company."



> 3. Support the creation of an office of Owner Ombudsman within the new company .


Just my opinion, but I don't see the need for such a position.  Each and every one of us has a voice and the means to contact Marriott's executives and customer advocacy offices.  We don't all agree on what we want and expect from our timeshares.  A redundant position within the new company will not change that fact.



> 4. Let's work together creating the largest Coalition of Timeshare Owners protecting our interests as Marriott creates the worlds largest stand alone time share company.


Again, our interests do not always align with each other's.  Working together to gain the knowledge that's necessary to understand our timeshare ownerships makes perfect sense.  Thinking that we can all form a unified one-voice coalition is an unrealistic expectation.



> 5. Stay informed as the regulatory process moves forward. We must be aware of the SEC filings as well as any other state requirements to see how the new company will effect our ownership.


Makes perfect sense, I agree completely.  That's why I'll continue to turn to TUG for the information that helps me learn, because the collection of participants here are able to contribute specific information with which they individually hold the expertise to disseminate.  Many voices, including dissenting ones, make for better knowledge.


----------



## TJCNewYork

MALC9990 said:


> Most stock in Fortune 500 corporations is held by pension and mutual funds who decide on their requirements of investments without giving "customers" a second or even third thought.



Very true, Malc.  I appreciate your comments and the value they have in reopening the door to discussion.

Current patterns of investment/organization that distinguish the F500 do not necessarily have to limit business innovation.  Spinco aims to become a fast, growing and global company.  In my opinion, applying F500 business solutions to a new global timeshare industry may present distinct barriers to success.   Before dismissing the concept of board-level customer representation, it may make sense to look under the hood.

Encouraging diverse board-level stakeholder representation across all segments  of an  industry can foster a level playing field where shared business  concerns  can give birth to shared business solutions.   I believe there are* business trends both here in the U.S. and in Europe* that merit scrutiny.  

Drawing upon the auto industry, the UAW's push for labor's representation on the BoD's of General Motors, Ford and Chrysler is a case in point.  In the retail industry, the board of directors for IBM's Retail User Group does exactly that.  In Europe, many organizations are advancing the concept of board-level employee representation.  

What's to limit the concept of *board-level owner representation* in the timeshare industry?

Spinco not only represents the reorganization of Marriott Vacation Club, it is on the path towards redefining the business and the industry.  There's an opportunity for innovation.  Since vacation ownership relies so heavily upon 'referrals from satisfied owners', board-level owner representation presents both a natural and logical progression.  

Rather than get ahead of ourselves, the first question that makes sense to ask is what is Spinco's mission and who does Spinco seek to serve?  At present, the Letter to Owners implies "what" and "who", so we can only assume. 

That said, there may be a solid business case for advancing board-level owner representation:  To advance and grow the timeshare and vacation ownership industry, board-level owner representation might offer the competitive advantage that can quickly reposition Spinco at the forefront.


----------



## SueDonJ

c20854@aol.com said:


> ... I have been encouraged in the overwhelming support for seeking owner representation on the new Board of Directors, the creation of an ombudsman office and an owners coalition.   *Currently, Marriott International has voiced its objections to the SEC on a stockholders resolution creating an office of Owner Ombudsman.* ...



Allan, I know that you believe as several others do that I have a personal vendetta against you which is not based on anything but an irrational dislike.  I believe that's an unfair accusation but regardless, it's not one that I can combat in any way other than to respond to the items you put out there for comment.  That's what I did throughout that Aruba thread and with my last post, and it's what I'm doing here.

What I bolded above actually sounded interesting to me; it wasn't something that had been introduced in any of the past exchanges that we've had.  Although I do believe what I said above, that such a position would be redundant in the impending spin-off company, I still think that as a new idea it has some intrigue.  So I googled "Marriott stockholders resolution Owner Ombudsman" and found this interesting reading.  Will you answer this - is it true what Marriott's legal counsel alleges, that you, "... suggested that [your] allegations and complaints regarding the Resort could be resolved if the Company would appoint [you] to serve as the ombudsman representing the Owners?"

If anyone needs further proof that Allan Cohen's actions throughout his history with MVCI are not altruistic, you now know where to find it.

And if anyone still thinks that I have an irrational personal vendetta against him, be assured that I have never met the man and have no idea if we share interests that could lead us to be friends otherwise.  My problem with him is and always has been that he manipulates others, takes advantage of others' trust in him, takes actions that cause quantifiable harm to others, in order to further his personal agendas.  His personality has nothing to do with my contempt, his actions speak for themselves.


----------



## MALC9990

Cmore said:


> Many Tugger's anti-Marriott, I am not sure why someone would think that
> 
> You are very correct, Most people are not tuggers, sometimes to their detriment.  But many Tuggers and mvci/mvcd owners are in general quite happy as well.   JMO, but I think what the 'angy' Tuggers are most concerned about is that they had figured out the old system, and now the new system offers a more level playing field that is harder (not impossible) to game or effectively be "way better at" than the other owners.
> 
> The new system is here, they are selling points, they will continue to sell points and lots of them.  The new spin off is going to be fine, Marriott is going to be fine,  and we all would be best off figuring out how to maximize our ability to use both systems.   On that point, PerryM has been right for a very long time.



Cmore - (same Cmore as on the II Community?) - I use MALSCREEN1 there ! There are one or two people who post here who are clearly not MVCI owners who I would class as Anti Marriott and perhaps even Anti TS.


----------



## MALC9990

SueDonJ said:


> I've always believed that timeshare ownership begins and ends with the contracts and governing docs.  It's my opinion that 99 times out of 100, you're doomed to failure if you try to enact changes that are not supported by the existing legal contracts and documents.  So you're an owner and you don't like something?  Do what you can to learn your contracted rights and fight for what you want through the proper channels.  Recognize that your most formidable hurdle will be the legal obligations and limitations that stand in your way, and ally yourself with someone who is legally qualified and has the specific expertise to go up against the giant timeshare companies' extensive in-house and otherwise-available legal counsel.  Most importantly, recognize your own limitations and listen to others who may have more knowledge than you do.
> 
> Again, my opinion, but I wouldn't automatically act on a list of suggestions related to my timeshare ownership unless I knew that the suggestions were approved by people who hold the expertise necessary to make such suggestions.  If it comes to it, I also wouldn't allow my name to be attached in any way to a list of demands given to Marriott by anyone other than a qualified expert attorney.  At the very least, I would want proof that such an attorney has verified the reasonableness of each item on such a list.  But okay, let's discuss the items in Allan Cohen's list anyway even though we don't know if it's been compiled with the benefit of counsel or expert opinion:
> 
> 
> On its face it's not a bad statement because the action supports the result.  But like MALC and others have said, it's going to take a whole lot of owners purchasing a whole lot of stock to make a difference.  Plus, it's one thing to speculate about when and why to make a stock purchase, it's a whole different animal to determine if such a purchase fits your individual financial picture and what you can reasonably expect afa gains and losses.  Heck, I mentioned the stock in another thread for another reason just the other day (and it turns out I'd lost my mind somewhere in that thought) but I wouldn't just tell someone else to buy it.  And I wouldn't accept the suggestion from anyone who has no knowledge of my financial situation.
> 
> 
> Again, like MALC asked, is there a precedence to support this?  If not, do/will the governing docs support it?  If not, what's it going to take to get it?  Marriott's not going to just roll over and say, "yeah, great idea, let's give seats to owners whose visions of the product may conflict with our visions for the company."
> 
> 
> Just my opinion, but I don't see the need for such a position.  Each and every one of us has a voice and the means to contact Marriott's executives and customer advocacy offices.  We don't all agree on what we want and expect from our timeshares.  A redundant position within the new company will not change that fact.
> 
> 
> Again, our interests do not always align with each other's.  Working together to gain the knowledge that's necessary to understand our timeshare ownerships makes perfect sense.  Thinking that we can all form a unified one-voice coalition is an unrealistic expectation.
> 
> 
> Makes perfect sense, I agree completely.  That's why I'll continue to turn to TUG for the information that helps me learn, because the collection of participants here are able to contribute specific information with which they individually hold the expertise to disseminate.  Many voices, including dissenting ones, make for better knowledge.



I fully agree.


----------



## dioxide45

SueDonJ said:


> So I googled "Marriott stockholders resolution Owner Ombudsman" and found this interesting reading.  .



Thanks for finding this. It was an interesting read indeed. I think Allan should have disclosed this information in his post.


----------



## dioxide45

I think there are very few MVCI owners here that I would consider anti-Marriott. Just because someone questions the motives and finds suspect the moves that Marriott makes, it doesn't make them anti-Marriott. Just because someone isn't always gushing about Marriott, it doesn't mean they are anti-Marriott.

There wouldn't be much to talk about here if Marriott and their program were perfect. Which I think almost all of us can agree, they are not.


----------



## AwayWeGo

*You Typed A Mouthful.*




dioxide45 said:


> I think there are very few MVCI owners here that I would consider anti-Marriott. Just because someone questions the motives and finds suspect the moves that Marriott makes, it doesn't make them anti-Marriott. Just because someone isn't always gushing about Marriott, it doesn't mean they are anti-Marriott.
> 
> There wouldn't be much to talk about here if Marriott and their program were perfect. Which I think almost all of us can agree, they are not.


By the same token, just because people are generally satisfied with RCI -- i.e., enough so that they remain RCI customers -- that doesn't mean they believe _RCI Can Do No Wrong_.  

There wouldn't be much to discuss about RCI if RCI were perfect, which it isn't by a long shot.  So it goes. 

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


----------



## marksue

c20854@aol.com said:


> *Lets take this opportunity and turn this announcement into a very positive one for every Marriott Vacation Club Owner.*
> 
> Given the recent article in the WSJ-DumpingTimeshares and Al Lewis's blog http://newswires-americas.com/tellittoal/ does it make sense to buy stock now in Marriott International (MAR) ?
> 
> I encourage you to consider doing the following so that your rights as a Marriott Timeshare owner are represented:
> 
> 1. Purchase Marriott International  (MAR) stock (approximately $40 per share) so as a stockholder you will have voting representation in the new company
> 
> 2. Push for the inclusion of several owner representatives as members of the new Board of Directors in the spin off company
> 
> 3. Support the creation of an office of Owner Ombudsman within the new company .
> 
> 4. Let's work together creating the largest Coalition of Timeshare Owners protecting our interests as Marriott creates the worlds largest stand alone time share company.
> 
> 5.  Stay informed as the regulatory process moves forward.  We must be aware of the SEC filings as well as any other state requirements to see how the new company will effect our ownership.
> 
> Since the Wall Street Journal column of 2/12/11 by Al Lewis WSJ.com - Dumping Timeshares*, my email box has been filled by Marriott Timeshare owners around the world asking how can we make sure that we will be heard as Marriott spins off the timeshare division into a stand alone company?
> 
> I have been encouraged in the overwhelming support for seeking owner representation on the new Board of Directors, the creation of an ombudsman office and an owners coalition.  Currently, Marriott International has voiced its objections to the SEC on a stockholders resolution creating an office of Owner Ombudsman.
> 
> The Marriott Vacation Club International (MVCI) division has been the only negative aspect of the Marriott  brand as voiced by stockholders at the last two Marriott International annual meetings with write offs and impairment charges of over $1.2 billions dollars.   In its heyday, the MVCI division had been the cash cow, being one of the largest profit center yet one of the smallest divisions within Marriott International.  .
> 
> Now, I believe both because of the economy and owner concerns with MVCI it has fallen on hard times.   The greatest strength and hope for the success of the Marriott brand and the new company is its 400,000+ owners.
> 
> As Timeshare owners we already have a vest interest, so buying stock in Marriott International should give us a stronger voice once the spin off is completed.
> 
> One of the bright spots of the new company is that it will be under the direction of Bill Shaw, the newly announced Chairman of the Board who is a trusted, hard working and dedicated individual.   We want the high standards that Mr. Shaw represents to be carried forward into the new Company.
> 
> The challenges ahead can only be successfully overcome with the support of current owners and stockholders.  Let’s hope that during this reorganization, under the direction of a new Board of Directors with owner representation, that MVCI will have learned from mistakes in the past and begin to work with Timeshare owners in a more collaborative and transparent fashion.
> 
> Lets take this opportunity to protect our interest and move forward in a positive way by establishing a fresh new beginning.
> 
> I look forward to hearing from you.
> 
> Please contact me at: c20854@aol.com
> 
> Thank you, Allan Cohen (301-299-2118)



Allan,

I beleive this has to be better for all owners.  We now have a company who's existince is dependent on the success of the timeshare business, vs being a piece of a hotel business.  

If owners do not protect thier interests no one will.  Most owners take what the company says as gospel and we know it is not.

You are always on target, regardless of what some people try to say about you.  thanks for conitnuing the efforts.  You have the support of thousand of owners.  With this change you may end up getting more support as people start to look out for thier interests as the timeshare market continues to take hits.

Thank you


----------



## marksue

ilene13 said:


> touche!!



Great response and so true.


----------



## Cmore

MALC9990 said:


> Cmore - (same Cmore as on the II Community?) - I use MALSCREEN1 there ! There are one or two people who post here who are clearly not MVCI owners who I would class as Anti Marriott and perhaps even Anti TS.



The same, yes quite interesting here.  Not sure I have the time to keep up with it, I figured it was you (same weeks and UK).  I always enjoy your insight and level head.


----------



## timeos2

dioxide45 said:


> I think there are very few MVCI owners here that I would consider anti-Marriott. Just because someone questions the motives and finds suspect the moves that Marriott makes, it doesn't make them anti-Marriott. Just because someone isn't always gushing about Marriott, it doesn't mean they are anti-Marriott.
> 
> There wouldn't be much to talk about here if Marriott and their program were perfect. Which I think almost all of us can agree, they are not.



But they at least at one time may have run the closest to perfect resort we ever stayed at - Manor Club in Williamsburg.  The location isn't as good as some of the Wyndhams (too remote) but the original resort was second to none in the late 90's.  

It has forever been my yardstick for a great resort in quality, design, decor & overall experience. When I find a new resort we like or have changes to our existing resorts that memorable stay is what I compare it to. Some have now come very very close to equaling it and I'm not sure it would be the same today, but for that moment in time Marriott & Manor Club set the standard.  They can do it right.


----------



## Cmore

Isn't avertising like the post above... supposed to be against the rules ?  I thought someone got booted for the same thing.  I'm just sayin...


----------



## dioxide45

Cmore said:


> Isn't avertising like the post above... supposed to be against the rules ?  I thought someone got booted for the same thing.  I'm just sayin...



I agree, this poster is doing nothing to contribute to the thread or forum. Their only intent in posting seems to be to solicit for their own agenda. At least the other person that was booted was also a contributor.


----------



## MOXJO7282

dioxide45 said:


> I agree, this poster is doing nothing to contribute to the thread or forum. Their only intent in posting seems to be to solicit for their own agenda. At least the other person that was booted was also a contributor.


Help me understand his agenda? Is he an "ambulance chaser if you will" or just likes to stir things up. I never really followd the Aruba thread.


----------



## MALC9990

MOXJO7282 said:


> Help me understand his agenda? Is he an "ambulance chaser if you will" or just likes to stir things up. I never really followd the Aruba thread.



Basically he seems to have his own personal agenda with MVCI and Marriott and the issue of an owner representative  - well he wants it to be HIMSELF !


----------



## SueDonJ

MOXJO7282 said:


> Help me understand his agenda? Is he an "ambulance chaser if you will" or just likes to stir things up. I never really followd the Aruba thread.



His latest agenda with the Aruba thread, and the reason he's engaged in a lawsuit with Marriott, is to get a list of the owners' personal contact information - name, home address, email address - so that he can contact owners directly to make sure that they all know his laundry list of concerns regarding the resort, the BOD, MVCI, Marriott, and the many ways he was wronged during and after his tenure as a member of the MAOC Board.

Thus far his ongoing efforts to get Marriott and/or the Court to release the list to him, among other things, have been unsuccessful and the cost at last count was $189K.  The governing docs do not provide that the list must be released; it is available to be reviewed and copied at the resort, but Aruban law allows that the address of each owner on the list is the address of the resort.  The Board put a measure up for an owners' vote to amend the docs to allow the personal contact information to be released, which measure was resoundingly defeated by a +80% majority of the voting ownership.

It's true that he has only posted three times to TUG.  But throughout that Aruba thread there are MANY posts from members of the "concerned owners" group (self-described supporters of Allan Cohen) in which his myriad missives have been quoted word-for-word.  As well, throughout that thread there are MANY links to the official Marriott documents which counter his allegations and suspicions.

Anyone who wants to read and learn both sides of the story is better served by doing their own research.  Allan has never responded on the TUG boards to follow-up posts to his words, his response is always that people can call him to get the information they seek.  However, once again I would caution anyone about calling, emailing or PM'ing him because of the allegations in that Aruba thread that he used and abused the contact information of MAOC owners that he'd gained access to as a board member, later when his crusade against all-things-MAOC began.

Many of his supporters have said repeatedly that they do not understand why any non-MAOC owners would be interested in the situation with that resort.  Although it makes perfect sense to some of us that there are issues which cross over to all MVCI resorts - governance, owners' rights, management, etc - they have always believed that it is no one else's business.

Well, regardless of whether you believe that or not, things are different now.  By his own word Allan Cohen has made it known that he has set his sights on a position of influence within the impending spin-off company.  That makes every single one of us MVCI/DC owners a potential "beneficiary" of whatever missteps he makes.  I don't know about the rest of you, but I'll be watching and will do whatever I can to protect my ownership and my pocketbook from the harm I know he's capable of inflicting.

*****

We should remember, the mods can't take action if they don't know something is out there.  Just sayin'.


----------



## rickxylon

I would also suspect that Allen will try to get himself nominated for one of the open positions on the Ocean Club board this year. All of the owners there should watch out for this.

By the way, it sounds like his lawsuit in Aruba will probably drag on for some time due to the backlog of cases in the Aruban courts. Maybe he'll go away soon!


----------



## Tommy_Boy

There's a difference b/w advertising and advocacy.  Allan's post is advocacy, not advertising.


----------



## Tommy_Boy

*Yikes*

So you wouldn't want someone who's tireless about advocating for the fair treatment of Ocean Club owners on the board?  I've been reading the posts, and don't get the vitriol against Allen --- sure, perhaps he should have disclosed he proposed himself as an Ombudsman, but it's not like there's any suggestion that it was a *paid* position!! (I doubt it would be).  If it was, maybe I'd (slightly) rethink my opinion.  The guy is a fierce advocate for pro-owner policies by Marriott, keeping fees down, etc., etc....and people kill him for that?  So bizarre!  Anyone who can fill me in on the motives or opinions of the "Anti-Allen" (or even anti-his ideas...), please do.  I mean, I understand if you think it's tilting at windmills to buy up stock in SpinCo, etc., etc. but an Ombudsman???  If it won't HURT (and how could it unless it were a Marriott stooge in the position), then it can only HELP.



rickxylon said:


> I would also suspect that Allen will try to get himself nominated for one of the open positions on the Ocean Club board this year. All of the owners there should watch out for this.
> 
> By the way, it sounds like his lawsuit in Aruba will probably drag on for some time due to the backlog of cases in the Aruban courts. Maybe he'll go away soon!


----------



## Tommy_Boy

*Still don't get it*

From what I read earlier in this thread, the proposition on releasing addresses was so vaguely worded that it made most people think they were going to release addresses for marketing/solicitation purposes.  It's not like Allan has a bridge (or a timeshare! haha) to sell us.  So you're mad he sued Marriott, b/c it (very theoretically) pushed up ownership fees?  Seems questionable at best --- that litigation cost is less than a drop in the bucket in Marriott's annual legal spend (I'm an in-house attorney at a Fortune 100 company).  And the Ombuds thing, I addressed in an earlier post --- if you tell me he's getting paid to be the Ombudsman, that's one thing, but that's highly unlikely.  So he has not "vested interest" other than the interest he's demonstrated in his posts (and even the posts of those who support him):  advocating for owners' rights and fair treatment by Marriott, which has all the strength here, b/c 90% of owners don't know what is going on.  

Finally, your earlier arguments that the ownership documents are silent on particular issues (such as release of addresses) --- who's side are YOU on, then?  Are you suggesting that if the ownership documents, bylaws, etc., etc., are silent on an issue, Marriott should be the beneficiary?  I would think/hope not.  

Your distrust of Allan seems tenuous --- other than him suing Marriott, I'm not clear on what "missteps" you believe he's made, or why you don't trust him.  I'll give you the failure to disclose on the Ombuds issue, but again, reiterate that there's little or no evidence that he's personally benefit from that position (except that he, like thousands of others, is an owner at MAOC)



SueDonJ said:


> His latest agenda with the Aruba thread, and the reason he's engaged in a lawsuit with Marriott, is to get a list of the owners' personal contact information - name, home address, email address - so that he can contact owners directly to make sure that they all know his laundry list of concerns regarding the resort, the BOD, MVCI, Marriott, and the many ways he was wronged during and after his tenure as a member of the MAOC Board.
> 
> Thus far his ongoing efforts to get Marriott and/or the Court to release the list to him, among other things, have been unsuccessful and the cost at last count was $189K.  The governing docs do not provide that the list must be released; it is available to be reviewed and copied at the resort, but Aruban law allows that the address of each owner on the list is the address of the resort.  The Board put a measure up for an owners' vote to amend the docs to allow the personal contact information to be released, which measure was resoundingly defeated by a +80% majority of the voting ownership.
> 
> It's true that he has only posted three times to TUG.  But throughout that Aruba thread there are MANY posts from members of the "concerned owners" group (self-described supporters of Allan Cohen) in which his myriad missives have been quoted word-for-word.  As well, throughout that thread there are MANY links to the official Marriott documents which counter his allegations and suspicions.
> 
> Anyone who wants to read and learn both sides of the story is better served by doing their own research.  Allan has never responded on the TUG boards to follow-up posts to his words, his response is always that people can call him to get the information they seek.  However, once again I would caution anyone about calling, emailing or PM'ing him because of the allegations in that Aruba thread that he used and abused the contact information of MAOC owners that he'd gained access to as a board member, later when his crusade against all-things-MAOC began.
> 
> Many of his supporters have said repeatedly that they do not understand why any non-MAOC owners would be interested in the situation with that resort.  Although it makes perfect sense to some of us that there are issues which cross over to all MVCI resorts - governance, owners' rights, management, etc - they have always believed that it is no one else's business.
> 
> Well, regardless of whether you believe that or not, things are different now.  By his own word Allan Cohen has made it known that he has set his sights on a position of influence within the impending spin-off company.  That makes every single one of us MVCI/DC owners a potential "beneficiary" of whatever missteps he makes.  I don't know about the rest of you, but I'll be watching and will do whatever I can to protect my ownership and my pocketbook from the harm I know he's capable of inflicting.
> 
> *****
> 
> We should remember, the mods can't take action if they don't know something is out there.  Just sayin'.


----------



## wof45

I'm sorry, but I don't want someone supported by 1/6 of the members at a resort representing me.

I also don't want my association paying to copy lists of adresses, e-mail and phone numbers so he can harass other owners.  I don't want those phone calls or e-mails.  The association told him they would supply the mail addresses but he would have to pay for the copies -- but he thinks they should give them to him for free.

They even offered to have a page in each official notification to the members with his information, and that was not good enough for him.

Is this really the person you want representing you to MVCI?

(and I don't even know the guy -- I just read all the documents posted here and that show up on Google)


----------



## SueDonJ

Tommy_Boy said:


> So you wouldn't want someone who's tireless about advocating for the fair treatment of Ocean Club owners on the board?  I've been reading the posts, and don't get the vitriol against Allen --- sure, perhaps he should have disclosed he proposed himself as an Ombudsman, but it's not like there's any suggestion that it was a *paid* position!! (I doubt it would be).  If it was, maybe I'd (slightly) rethink my opinion.  The guy is a fierce advocate for pro-owner policies by Marriott, keeping fees down, etc., etc....and people kill him for that?  So bizarre!  *Anyone who can fill me in on the motives or opinions of the "Anti-Allen" (or even anti-his ideas...), please do.*  I mean, I understand if you think it's tilting at windmills to buy up stock in SpinCo, etc., etc. but an Ombudsman???  If it won't HURT (and how could it unless it were a Marriott stooge in the position), then it can only HELP.



In the abstract all of Allan's ideas have some measure of legitimacy to them.  A pro-owner advocate?  An ombudsman who can serve as an intermediary between owners and execs?  A m/f watchdog?  Sure, all of those ideas are worth looking into.  In the abstract.

The ideal owner advocate/ombudsman/watchdog should have a practical knowledge of the governing docs (or be willing to learn it) so as to understand the limitations and obligations that all owners, resort developers and resort managers face.  The ideal owner advocate/ombudsman/watchdog should not have an obvious contempt or bias towards or against any other owners, resort developers or resort managers.  The ideal owner advocate/ombudsman/watchdog should be able to leave his/her partiality aside in order to form realistic expectations that better serve all owners in ways that are not in direct opposition to the governing docs.  The ideal owner advocate/ombudsman/watchdog will serve in the position in such a way that s/he stands to benefit only as much or as little as any other owner, whether the benefit is material or otherwise.

But you asked for opinions specific to Allan Cohen and so I'm giving mine.  Once Allan Cohen is put into the abstract positions, all those promising ideas become suspect.  He has a history (which is chronicled in that Aruba Ocean Club thread for any who wish to learn it) of completely and irrationally dismissing the opinions of those who have a more practical knowledge than he does, when those opinions don't serve his purpose.  He has a history of turning to relief from the Court systems, but wasting resources by not following established procedure while doing so.  He has a history of abusing his past access to owners as a member of the resort BOD, and of manipulating people and situations to serve his personal agendas.  Even more specifically, he has fostered an ongoing legal-adversary relationship with Marriott that will make it impossible for Marriott to deal with him in any such position, without Marriott jeopardizing its standing in the ongoing Court case.


----------



## SueDonJ

Tommy_Boy said:


> From what I read earlier in this thread, the proposition on releasing addresses was so vaguely worded that it made most people think they were going to release addresses for marketing/solicitation purposes.  It's not like Allan has a bridge (or a timeshare! haha) to sell us.  So you're mad he sued Marriott, b/c it (very theoretically) pushed up ownership fees?  Seems questionable at best --- that litigation cost is less than a drop in the bucket in Marriott's annual legal spend (I'm an in-house attorney at a Fortune 100 company).  And the Ombuds thing, I addressed in an earlier post --- if you tell me he's getting paid to be the Ombudsman, that's one thing, but that's highly unlikely.  So he has not "vested interest" other than the interest he's demonstrated in his posts (and even the posts of those who support him):  advocating for owners' rights and fair treatment by Marriott, which has all the strength here, b/c 90% of owners don't know what is going on.
> 
> Finally, your earlier arguments that the ownership documents are silent on particular issues (such as release of addresses) --- who's side are YOU on, then?  Are you suggesting that if the ownership documents, bylaws, etc., etc., are silent on an issue, Marriott should be the beneficiary?  I would think/hope not.
> 
> Your distrust of Allan seems tenuous --- other than him suing Marriott, I'm not clear on what "missteps" you believe he's made, or why you don't trust him.  I'll give you the failure to disclose on the Ombuds issue, but again, reiterate that there's little or no evidence that he's personally benefit from that position (except that he, like thousands of others, is an owner at MAOC)



All I can keep repeating is that if you want both sides of the story, you should read the Aruba lawsuit thread to get the facts so that you can form your own opinion.  You'll find posts from MAOC owners and non-owners on either side, you'll find his concerns and complaints in Allan's own words, you'll find links to all of the official Marriott docs to counter Allan's complaints as well as many of the Court filings, you'll find opinions on all of those things from many who are more or less knowledgeable than me.  I formed my opinion, actually learned a great deal about my timeshare ownership, by reading every bit of info I could get my hands on.  It's not my intent to get anybody to share my opinion about Allan Cohen, but to get everyone to understand that it's important to form their own because he's made it known that he wants to be in a position of influence in the impending spin-off company.

Think of it like this.  There are a few board members at other resorts who post occasionally on TUG.  I think it's great, would love to see more.  But of the ones who do, I've formed an opinion about whether I think they're serving the position well by what they post to TUG.  Another way to look at something similar - if ever a TUGger who owned at one of my resorts was to post an announcement that s/he is running for the BOD, I'd search old posts to get an idea of whether this TUGger would make a good board member IMO.  Don't know if what I'm trying to say is clear here, but I'm trying to say that I don't have a personal issue with Allan Cohen the same way I wouldn't have a personal issue with someone on TUG running for a board seat.  You don't look at who the person is, you look at what they've done.


----------



## Steve

*Let's get back on track*

If anyone wants to re-litigate the Aruba lawsuit thread, please don't do it here.  This thread is about Marriott spinning off the timeshare division.  

Steve
Tug Moderator


----------



## marksue

SueDonJ said:


> In the abstract all of Allan's ideas have some measure of legitimacy to them.  A pro-owner advocate?  An ombudsman who can serve as an intermediary between owners and execs?  A m/f watchdog?  Sure, all of those ideas are worth looking into.  In the abstract.
> 
> The ideal owner advocate/ombudsman/watchdog should have a practical knowledge of the governing docs (or be willing to learn it) so as to understand the limitations and obligations that all owners, resort developers and resort managers face.  The ideal owner advocate/ombudsman/watchdog should not have an obvious contempt or bias towards or against any other owners, resort developers or resort managers.  The ideal owner advocate/ombudsman/watchdog should be able to leave his/her partiality aside in order to form realistic expectations that better serve all owners in ways that are not in direct opposition to the governing docs.  The ideal owner advocate/ombudsman/watchdog will serve in the position in such a way that s/he stands to benefit only as much or as little as any other owner, whether the benefit is material or otherwise.
> 
> But you asked for opinions specific to Allan Cohen and so I'm giving mine.  Once Allan Cohen is put into the abstract positions, all those promising ideas become suspect.  He has a history (which is chronicled in that Aruba Ocean Club thread for any who wish to learn it) of completely and irrationally dismissing the opinions of those who have a more practical knowledge than he does, when those opinions don't serve his purpose.  He has a history of turning to relief from the Court systems, but wasting resources by not following established procedure while doing so.  He has a history of abusing his past access to owners as a member of the resort BOD, and of manipulating people and situations to serve his personal agendas.  Even more specifically, he has fostered an ongoing legal-adversary relationship with Marriott that will make it impossible for Marriott to deal with him in any such position, without Marriott jeopardizing its standing in the ongoing Court case.



It is amazing someone who has had no experience with the AOC has so much to say and attack the efforts of other owners.  We the owners went through the process described in our owner’s bylaws to try and implement change.  MVCI put their lawyers on it and told the board to reject the owners request making up their own rules on the fly.  So who brought legal into it first? Yet when asked for clarification MVCI and the board could not clarify what was necessary to meet the new rules of the game.  

Everyone says Alan is suing the board.  It is almost 2000 owners who are suing the board for the list of owners. Other MVCI timeshares share the list?  What changes have occurred because of the concerned owners enabled: more transparency, more openness from the board, better financial controls.  These are just a few of the changes that have taken place since the start of the Concerned Owners.  

Last time I was in Aruba I attended the owners weekly meeting and was told by some of the AOC mgmt, that the concerned owners have many valid points that Marriott is covering up.

So unless you have been victimized by the AOC and MVCI with some of the highest maintenance fees starting prior to any legal action, a 33% increase in maint fees in 2008, been hit with assessments due to Marriott’s selling a defective building to owners costing owners millions of dollars in repairs, your opinions hold little weight with many current owners.


----------



## Steve

marksue said:


> It is amazing someone who has had no experience with the AOC has so much to say and attack the efforts of other owners.  We the owners went through the process described in our owner’s bylaws to try and implement change.  MVCI put their lawyers on it and told the board to reject the owners request making up their own rules on the fly.  So who brought legal into it first? Yet when asked for clarification MVCI and the board could not clarify what was necessary to meet the new rules of the game.
> 
> Everyone says Alan is suing the board.  It is almost 2000 owners who are suing the board for the list of owners. Other MVCI timeshares share the list?  What changes have occurred because of the concerned owners enabled: more transparency, more openness from the board, better financial controls.  These are just a few of the changes that have taken place since the start of the Concerned Owners.
> 
> Last time I was in Aruba I attended the owners weekly meeting and was told by some of the AOC mgmt, that the concerned owners have many valid points that Marriott is covering up.
> 
> So unless you have been victimized by the AOC and MVCI with some of the highest maintenance fees starting prior to any legal action, a 33% increase in maint fees in 2008, been hit with assessments due to Marriott’s selling a defective building to owners costing owners millions of dollars in repairs, your opinions hold little weight with many current owners.



I repeat again, this thread is _*NOT*_ the place to re-litigate the Aruba situation.  That is covered at great length elsewhere.

Steve
Tug Moderator


----------



## lovearuba

*You are right*



Steve said:


> I repeat again, this thread is _*NOT*_ the place to re-litigate the Aruba situation.  That is covered at great length elsewhere.
> 
> Steve
> Tug Moderator



I agree with you and suggest you remove further comments that are not related to the spinoff, I have to say I do not envy your job these days


----------



## Luckybee

rickxylon said:


> I would also suspect that Allen will try to get himself nominated for one of the open positions on the Ocean Club board this year. QUOTE]
> 
> We could be so lucky ! Better yet ...we would be exceedingly fortunate. Maybe then we'd get back to a point where a board member would actually be able to be found as opposed to hiding in a hidden bunker somewhere....lol.
> 
> I have no idea whether Allen could run again because of term limits. But virtually all owners I know would be thrilled should that be possible.


----------



## Luckybee

lovearuba said:


> I agree with you and suggest you remove further comments that are not related to the spinoff, I have to say I do not envy your job these days



Sadly, the problem is that the selective editing would likely leave in the the posts that got the negativity started ....as we both know there are those on Tug who have a tendency of being pro marriott at any cost, and will be critical to the point of irrational to anyone who dare try to make positive changes, and for some reason those posters(perhaps because of high post counts) are left alone whether they abide by tug rules or not !


----------



## SueDonJ

*DC Voting Restriction Lifted?*

You know, thanks to TUGger Cmore we learned something pretty significant in this thread that's been left behind all this other stuff.  (Mods, it's also unrelated to the thread topic so perhaps it merits its own thread?)

Here's the language in the Enrollment Agreement from when I enrolled last July: 





> 1. Owner represents and warrants to MVCEC that, as an Exchange Member, Owner: ...
> e. will not exercise any vote Owner may have in the owners "association" ("Resort Association") operating the resort in which Owner's Timeshare Interest is located ("Resort") in a manner that is, in MVCEC's reasonable discretion, detrimental to the Program, including, without limitation, voting to limit or terminate the Resort's participation in the Program.



Well, thanks to Cmore's post we now know that the latest version of the online enrollment doc does not contain that 1(e) stipulation, and neither does the one that he (she?) signed onsite at DSII.

What does this mean?!  Why did Marriott remove it?  Is there something in the docs elsewhere that ensures the same result for Marriott, or is this as significant a change as it appears?

There were quite a few TUGgers who said that the voting restriction was the major stumbling block to them enrolling.  If you were one of them, what are you thinking now?

Lots of questions ....


----------



## dioxide45

---Deleted---


----------



## TJCNewYork

SueDonJ said:


> There were quite a few TUGgers who said that the voting restriction was the major stumbling block to them enrolling.  If you were one of them, what are you thinking now?



Just one more reason that supports the concept of board-level owner representation, specifically 'advocacy' thinking. (Thank you TommyBoy for articulating that so well.)

Jumping to any conclusion about who the person is may be getting ahead of ourselves.  Perhaps focusing on selection criteria may shift this discourse?

Someone who relies on what's in the by-laws, contracts and documents makes sense.  Given the regulatory landscape an understanding of the statutes makes sense too.  Maybe more than one person is needed?

As a suggestion, let's tackle this:  *Is there a business case to support the concept of board-level owner representation in spinco?*


----------



## TJCNewYork

Steve said:


> I repeat again, this thread is _*NOT*_ the place to re-litigate the Aruba situation.  That is covered at great length elsewhere.



Thank you, Steve.  Moderating this is quite the challenge.  What if discussion is redirected to focus on the lessons-learned and the relevance to spinco?  

For starters, the polarization is very evident.  Will it be to spinco's advantage to engage or polarize owners?  What factors contribute to polarization and how can such factors be dealt with so that spinco is successful out of the gate?


----------



## Dave M

*Moderator Warning*
As Steve, another moderator, stated above, it's time to get this thread back on track (re the spin-off of MVIC) and stop bickering about a topic that belongs in the long AOC thread, not here.

Those who wish to have a mandatory vacation from posting here can feel free to ignore this warning.

Dave M
BBS Moderator


----------



## Cmore

TJCNewYork said:


> ...
> As a suggestion, let's tackle this:  *Is there a business case to support the concept of board-level owner representation in spinco?*



Being an owner of a "not so small" business  I can think of no business case where this makes sense.  That is not to say, that I don't think a business should not listen to its customers. It chooses not to at its own peril.

This thread alone and the Aruba one before it, should clearly identify the fact that no single person, or any small group of people could ever hope to properly "represent" an entire ownership group as large and diverse as mvci's.  Thinking otherwise is simply naive.  Personally, I like to do my own thinking.


----------



## Fredm

Deleted.......


----------



## TJCNewYork

Cmore said:


> Being an owner of a "not so small" business  I can think of no business case where this makes sense.



Cmore - Very cool.  Congratulations on your 'not so small' business. To survive, let alone thrive through the cycles we're experiencing suggests that you're doing something right in your industry and for your business.  Best wishes for continued success.

While you personally cannot think of sensible business case to support the concept of board-level owner representation on spinco - at this moment -  I sense an open door.  

I can agree that there is a solid business case for maintaining status quo, but the creation of a spinco seems anything but status quo. Historically, selling timeshare and the successful growth of vacation ownership relied upon the power of the referral:  Satisfied owners referring family and friends.  The power of the referral was based upon the integrity, trust, reliability and confidence in the brand.  

Well, we all know what happened over the past year or so.   




Cmore said:


> That is not to say, that I don't think a business  should not listen to  its customers. It chooses not to at its own peril.



Exactly.    Spinco has the potential to be a breakthrough response to market   decline, shareholder investment pressures and polarized customer   challenges.  

The posts here have several common themes ranging from accolades for spinco and reorganization being long overdue to a sense of abandon and betrayal for dumping timeshares.  And, owner feedback to DC here has been steadily growing for 9 months now.  

"At its own peril" best describes the situation.    Intuitively, spinco will have to do something different to re-engage and  unify their customers, because the primary drivers of the referral  model - integrity, trust, reliability and confidence appear to be severely compromised.

Perhaps, the business case that favors board-level owner representation is restoration of owner trust and confidence in the brand.  W/out these pearls, growing a "not so small" business that relies so heavily on owner satisfaction is most definitely "At its own peril".


----------



## SueDonJ

TJCNewYork said:


> ...  "At its own peril" best describes the situation.    Intuitively, spinco will have to do something different to re-engage and  unify their customers, because the primary drivers of the referral  model - integrity, trust, reliability and confidence appear to be severely compromised.
> 
> Perhaps, the business case that favors board-level owner representation is restoration of owner trust and confidence in the brand.  W/out these pearls, growing a "not so small" business that relies so heavily on owner satisfaction is most definitely "At its own peril".



While it's obvious that there's some work to be done to restore customer confidence, I'm not sure that a board-level owner position is the answer.  As has been said, is it possible to find an owner who would be able to separate the specifics of what s/he expects out of his/her ownership from the "common good?"  I don't think any owner could be completely unbiased, do you?  Plus, presumably the position would be filled through a vote and it's very rare to find "unity" in a vote.  There's certainly nothing wrong with a majority rule result, but that doesn't remove the potential for a biased individual to gain the seat.  What Cmore says is correct, too - you are your own best advocate.

I think the fact that Marriott timeshares have undergone significant changes during the last year contributes much more to the owners' erosion of "integrity, trust and reliability and confidence" in Marriott, than any perceived erosion of unification.  People distrust change, plain and simple.  And Marriott timeshare owners haven't been unified for at least as long as I've been participating on TUG.  With practically every single topic the posts run the gamut from Marriott is the devil to Marriott can do no wrong and every point in between.  It seems if folks are happy with what they're getting from their ownerships, they're satisfied with Marriott's business.  If they're unhappy with their ownerships, they think Marriott should make business changes to satisfy them.  That's human nature.

It seems to me that the only thing that will restore whatever customer confidence Marriott has recently lost, is if owners see over a period of time that there is a commitment by the company to the product's integrity.  Without that, it won't matter how many customer service/customer advocacy/owner seats on the BOD/etc positions exist.


----------



## Cmore

TJCNewYork said:


> ...Spinco has the potential to be a breakthrough response to market   decline, shareholder investment pressures and polarized customer   challenges.
> 
> The posts here have several common themes ranging from accolades for spinco and reorganization being long overdue to a sense of abandon and betrayal for dumping timeshares.  And, owner feedback to DC here has been steadily growing for 9 months now.
> 
> "At its own peril" best describes the situation.    Intuitively, spinco will have to do something different to re-engage and  unify their customers, because the primary drivers of the referral  model - integrity, trust, reliability and confidence appear to be severely compromised.
> 
> Perhaps, the business case that favors board-level owner representation is restoration of owner trust and confidence in the brand.  W/out these pearls, growing a "not so small" business that relies so heavily on owner satisfaction is most definitely "At its own peril"



I don't think in principle we disagree, I think our difference is a matter of perspective and if I dare say practicality.   I am deeply concerned what my employees think, and I am equally concerned about what my customers think.   With a large enough sample size, it is very difficult, if not impossible to get 100% agreement on about anything from either group.   Therein lies the problem of a position such as this being added to the BoD, it is a single opinion with no way to ever encapsulate an entire groups feelings.  I think while it sounds good, it is impractical, and not likely to add any value to the business or its ability to serve and listen to its customers.  

A business has to move in the direction that it believes serves the majority of its customers, as well as move where the market is.  If you are selling something and the marketplace no wants it in sufficient quantity to support the cost of operations, you had better move to selling something else along with figuring out how to keep your existing base of customers.  Not moving ultimately means not being around to serve anyone.

I can get all the end user experiences I want, and do so, on lots of fronts via focus groups, email feedback, social media, in-store surveys, google alerts, etc. let alone all the metrics we keep in place on what we deem as important measures. It is not hard to understand what your customers are saying, the trick is figuring out what to do with what you hear.  Trust me, customers no more agree on what they want/need than any other diverse group.  In my opinion, a BoD should be comprised of knowledgeable, well rounded and suffiently experienced people to contribute in the laying out the plan for management to follow, and there is no doubt they better have a firm grasp on customer satisfaction.


----------



## Fredm

Fact of the matter is that an Ombudsman seat will not happen. So, let's stop debating the issue as if anyone actually has a say in the matter. This is not a collective bargaining matter with a union. 

Want a say in Spinco?  Vote your shares. 
Want to give your proxy to a gadfly to pursue some cloaked agenda? Go right ahead. The minute that proxy goes against the interests of the company, it will be doomed to defeat anyway. Sheeh!

Want to make a difference in your ownership where it counts? 
Run for a seat on the HOA BOD of your own resort. Try to garner enough proxies to accomplish that.


----------



## TJCNewYork

Cmore said:


> I can get all the end user experiences I want, and do so, on lots of fronts via focus groups, email feedback, social media, in-store surveys, google alerts, etc. let alone all the metrics we keep in place on what we deem as important measures.



As illustrated here, spinco's parent is proactively seeking ways to engage their guests (in real time) and it appears to be pervasive across the industry.  As the article notes, the practical business application is the potential for expanding opportunities to 'seek return visitors' and provide a real time channel for 'customer relations'.  That said, these applications are operational and day-to-day.  While the outcome (increased reservations, heightened customer satisfaction) are consolidated and reported at the board level as a matter of operations, board-level representation of the 'lodging guest' is indeed questionable.  We're on the same page, here.




Cmore said:


> It is not hard to understand what your customers are saying, the trick is figuring out what to do with what you hear.  Trust me, customers no more agree on what they want/need than any other diverse group.



There is no disagreement that spinco's parent heard that customers want increased flexibility, consolidation of fees and so on.  The diverse feedback to the solution they came up with is self-evident.




Cmore said:


> In my opinion, a BoD should be comprised of knowledgeable, well rounded and suffiently experienced people to contribute in the laying out the plan for management to follow, and there is no doubt they better have a firm grasp on customer satisfaction.



Again, these are best practices assuming the status quo.  The current situation is arguably anything but that.  Let's hope the solution is among a new generation of textbook cases.


----------



## SueDonJ

Fredm said:


> Fact of the matter is that an Ombudsman seat will not happen. So, let's stop debating the issue as if anyone actually has a say in the matter. This is not a collective bargaining matter with a union.
> 
> Want a say in Spinco?  Vote your shares.
> Want to give your proxy to a gadfly to pursue some cloaked agenda? Go right ahead. The minute that proxy goes against the interests of the company, it will be doomed to defeat anyway. Sheeh!
> 
> Want to make a difference in your ownership where it counts?
> Run for a seat on the HOA BOD of your own resort. Try to garner enough proxies to accomplish that.



Is there something similar to the Weeks-owners' HOAs, for owners who have only purchased DC Points and don't own a Week?  Haven't looked closely at the sections of the docs pertaining to DC Trust Members ....


----------



## Fredm

SueDonJ said:


> Is there something similar to the Weeks-owners' HOAs, for owners who have only purchased DC Points and don't own a Week?  Haven't looked closely at the sections of the docs pertaining to DC Trust Members ....



Not in the same sense that I am aware of.
m/f's are paid to the resort by the Trust. The resort HOA BOD administers the resort through the Ops Manager.

The Trust owns the underlying week at the resort. So, the trust votes at the resort level.


----------



## TJCNewYork

Fredm said:


> Fact of the matter is that an Ombudsman seat will not happen.



Thanks for the comment, Fredm.  Board-level owner representation need not be limited to an 'ombudsman'.  There are so many ways to 'skin the cat'.




Fredm said:


> So, let's stop debating the issue as if anyone actually has a say in the matter. This is not a collective bargaining matter with a union.



This is a friendly and calm exchange of ideas.  An 'exploration' with hopes of discovering/uncovering a solution.




Fredm said:


> The minute that proxy goes against the interests of the company, it will be doomed to defeat anyway.



That has happened, yes.  And, likely to repeat, unfortunately.  The odds are that the best interests of spinco are not only the best interests of the investors but also the best interests of the owners.  




Fredm said:


> Want to make a difference in your ownership where it counts? Run for a seat on the HOA BOD of your own resort. Try to garner enough proxies to accomplish that.



There are many dedicated men and women who own MVC legacy weeks who have served on their resort's COA/HOA BoD.  A shout of *thanks* out to this group for their service.  This is not to minimize their importance, rather I elevate it.  Given the quality of resort experiences across MVC, it is very clear to me that active owner participation on MVC resort BoD's is one of the contributing factors to top-shelf refurbs and villa experiences we can truly enjoy.  

As discussed here and elsewhere, MVCD will ultimately affect the balance in ways we can only conjecture.


----------



## Fredm

TJCNewYork said:


> Thanks for the comment, Fredm.  Board-level owner representation need not be limited to an 'ombudsman'.  There are so many ways to 'skin the cat'.



Fact of the matter is that an Ombudsman any seat will not happen. So, let's stop debating the issue as if anyone actually has a say in the matter.


----------



## SueDonJ

Fredm said:


> Not in the same sense that I am aware of.
> m/f's are paid to the resort by the Trust. The resort HOA BOD administers the resort through the Ops Manager.
> 
> The Trust owns the underlying week at the resort. So, the trust votes at the resort level.



Right, when existing Weeks at existing resorts have been re-acquired by Marriott and conveyed to the Trust, Marriott/the Trust gains the right to vote those Weeks and assumes the costs for them with the acquisitions.  (As Marriott/MVCI does with any re-acquisitions that aren't conveyed to the Trust.)

I'm wondering about any future Trust holdings that have never been available as MVCI Weeks, though.  Is there something that will give the Trust Members (straight Points purchasers) similar protections/voting rights to what Weeks Owners and Exchange Members get from their HOA affiliation?  Or does Marriott hold ALL the cards with respect to the Trust?


----------



## Fredm

SueDonJ said:


> I'm wondering about any future Trust holdings that have never been available as MVCI Weeks, though.  Is there something that will give the Trust Members (straight Points purchasers) similar protections/voting rights to what Weeks Owners and Exchange Members get from their HOA affiliation?  Or does Marriott hold ALL the cards with respect to the Trust?



I don't know. I assume the Trust holds all the cards.
If one assumes that the Trust will build new resorts, I guess we will have to wait and see how the docs read.
I don't think that will happen anytime soon. Rather, I envision Spinco becoming something like DRI or Wyndham on the sales/expansion front.
And, perhaps acquire  I.I. to complete its fee for service model.
Spinco's objective is to be the ultimate service consolidator, IMO.

I opined in another post that Marriott must have looked at the Cendant moves with envy.
Using the MVCI resort/owner base as a launch pad, Marriott has now created its own points equity/exchange currency. 
Unshackled from Marriott's balance sheet, Spinco can be more aggressive to accomplish the rest.

Of course, this will all be done after Spinco consults with/gets agreement from the timeshare owner representative on its Board


----------



## Cmore

SueDonJ said:


> I'm wondering about any future Trust holdings that have never been available as MVCI Weeks, though.  Is there something that will give the Trust Members (straight Points purchasers) similar protections/voting rights to what Weeks Owners and Exchange Members get from their HOA affiliation?  Or does Marriott hold ALL the cards with respect to the Trust?



I will do some digging around :zzz: , as it is a good question.  Off the top of my head I think the Trust would hold all the cards.  That being said, the usage documents specify what limits on mvcd there is, specifically as it relates to points movement, which is the biggest issue that would affect dc members.  My guess is the biggest lack of control DC members have is no input on maintenance fee increases, reserve levels, etc.

Weeks owners have a bit more input in that regard, but also bear the weight of any major issue at a single resort, wherein the trust spreads that risk over a much larger pool.


----------



## wof45

Cmore said:


> I will do some digging around :zzz: , as it is a good question.  Off the top of my head I think the Trust would hold all the cards.  That being said, the usage documents specify what limits on mvcd there is, specifically as it relates to points movement, which is the biggest issue that would affect dc members.  My guess is the biggest lack of control DC members have is no input on maintenance fee increases, reserve levels, etc.
> 
> Weeks owners have a bit more input in that regard, but also bear the weight of any major issue at a single resort, wherein the trust spreads that risk over a much larger pool.



we need to remember that the DC has an on-going need to sell points, so it needs to keep points MF at a reasonable level.


----------



## OldPantry

wof45 said:


> we need to remember that the DC has an on-going need to sell points, so it needs to keep points MF at a reasonable level.


This bears further discussion.  While there might be correlation between the MFs of the various vacation clubs in the aggregate and those charged to points owners, I doubt that it is a very close one.  Spinco will have a real motive to keep the points MFs relatively low, that's clear.  What that means for MFs at various clubs is far less clear.  I would suspect that Spinco might exert some downward pressure on MFs at vacation clubs where they still have sizable inventory (Ko Olina, Maui, Timber Lodge, Newport, Crystal Shores, Oceana Palms), but do no such thing at the rest. They might even press for higher fees, as that would enhance their bottom line, and possibly result in returned inventory that could be repackaged into new points.  I know, pretty cynical, and possibly self-destructive, but not every company operates in its own long-term best interest. Emphasis on short-term revenue might trump.


----------



## Cmore

Cmore said:


> I will do some digging around :zzz: , as it is a good question.  Off the top of my head I think the Trust would hold all the cards.  That being said, the usage documents specify what limits on mvcd there is, specifically as it relates to points movement, which is the biggest issue that would affect dc members.  My guess is the biggest lack of control DC members have is no input on maintenance fee increases, reserve levels, etc.



OK, I dug around the MVCD multisite POS document, which describes all the governance of "the Club" and is provided to members once they join the club.  The association has a BoD, comprised and controlled by the developer.  The initial BoD has 3 members, it can grow, but must always maintain an odd number.   There are provisions that allow for turnover or majority control of the board by the members. Which is unlikely to happen for quite some time, they basically comprise of no sales by developer for 2 years or no added inventory for 4 years.  There is also another provision stating that the developer can can turn over control sooner than the above at their discretion.   In such a case that the BoD is turned over to majority control of the members from the developer, The developer is entitled to to maintain at least 1 seat, and is always able to vote the number of shares it holds, similar to any other member.   

If I am reading this correctly, the developer controls all seats on the BoD of the association until it is not longer actively selling or developing/acquiring inventory for the Trust ( for periods of 2yrs/4yrs described above).  There is also a provision that MF's cannot increase more than 25% of prior year for any reason, and the developer has to pay for its share of MF's that have been committed to the trust.

The whole .pdf is 333 pgs long :zzz:  Not all of that is in regards to BoD operation, etc. rather it is all of doc's regarding MVCD.  Not sure if anyone wants to post it as a sticky in the Marriot FAQ's. or perhaps a Mod could cull out the most pertinent sections regarding the operation of MVCD for posting.

Anyway, thats the update.


----------



## bogey21

SueDonJ said:


> I think the fact that Marriott timeshares have undergone significant changes *during the last year* contributes much more to the owners' erosion of "integrity, trust and reliability and confidence" in Marriott, than any perceived erosion of unification.



"during the last year".  You have to be kidding.  Marriott showed their true colors about 10 years ago when they unilaterly changed the Rental and Sales Porgrams that enticed some of us to buy.  These changes, and others since,  were done for their own self serving reasons.

George


----------



## marksue

Not sure of all resorts, but in many the current board chooses who can run and only those peopel will appear on the proxy.  If you open the election to whoever wants to run then you can 



Fredm said:


> Want to make a difference in your ownership where it counts?
> Run for a seat on the HOA BOD of your own resort. Try to garner enough proxies to accomplish that.



Not sure of all resorts, but in many Marriott resorts the current board chooses who can run and only those peopel will appear on the proxy.  If you open the election to whoever wants to run and get them on the proxy then there could possibly be significant change.  Maybe with the spinoff this could happen.


----------



## SueDonJ

Cmore said:


> OK, I dug around the MVCD multisite POS document, which describes all the governance of "the Club" and is provided to members once they join the club.  The association has a BoD, comprised and controlled by the developer.  The initial BoD has 3 members, it can grow, but must always maintain an odd number.   There are provisions that allow for turnover or majority control of the board by the members. Which is unlikely to happen for quite some time, they basically comprise of no sales by developer for 2 years or no added inventory for 4 years.  There is also another provision stating that the developer can can turn over control sooner than the above at their discretion.   In such a case that the BoD is turned over to majority control of the members from the developer, The developer is entitled to to maintain at least 1 seat, and is always able to vote the number of shares it holds, similar to any other member.
> 
> If I am reading this correctly, the developer controls all seats on the BoD of the association until it is not longer actively selling or developing/acquiring inventory for the Trust ( for periods of 2yrs/4yrs described above).  There is also a provision that MF's cannot increase more than 25% of prior year for any reason, and the developer has to pay for its share of MF's that have been committed to the trust.
> 
> The whole .pdf is 333 pgs long :zzz:  Not all of that is in regards to BoD operation, etc. rather it is all of doc's regarding MVCD.  Not sure if anyone wants to post it as a sticky in the Marriot FAQ's. or perhaps a Mod could cull out the most pertinent sections regarding the operation of MVCD for posting.
> 
> Anyway, thats the update.



Thanks very much, good info here.  It sounds like Trust Members have VERY limited protections and BOD positions especially as long as Marriott is actively selling DC Points and conveying inventory to the Trust.  I guess the best that can be said is, at least the Trust Members aren't completely unprotected.     Thinking about it further, though, we all should have expected at least the protections for members that regulations demand.

Are there provisions for Members to put items up for a vote?  Understand it may be a futile exercise with the amount of control/number of votes that Marriott holds, but is it possible?

***

If you're able to put a link in a post here to the pdf file, DaveM could lift it and put it in the DC Sticky along with the other legal docs.


----------



## SueDonJ

bogey21 said:


> "during the last year".  You have to be kidding.  Marriott showed their true colors about 10 years ago when they unilaterly changed the Rental and Sales Porgrams that enticed some of us to buy.  These changes, and others since,  were done for their own self serving reasons.
> 
> George



No doubt, there have been continuous changes throughout the years to Marriott timeshares and with pretty much all of them, existing owners have suffered devaluations of some sort.  I think, though, that the two biggies this year - the introduction of the DC and the recent news about the timeshares being spun off of MI - are much more significant than any others in the history.  That's all I was trying to say.


----------



## TJCNewYork

Fredm said:


> I assume the Trust holds all the cards.



Quoting the Letter to Owners, "Marriott Vacation Club International (MVCI) and its affiliates will remain the exclusive developer of timeshare and fractional products for Marriott® and The Ritz-Carlton®, focused on
maximizing growth and development within this exciting industry."

Assuming the Trust holds all the cards excludes fractional ownership and presumes that lion's share of Spinco's revenue and assets resides there (in the Trust).  Is it possible that the Trust could achieve that position within the year that Marriott expects to create spinco? 




Fredm said:


> I opined in another post that Marriott must have looked at the Cendant moves with envy.



Great observation.  Wyndham out-performed Marriott last year and earned distinction in 2010 as one of the World's Most Ethical Companies.  With regret, Marriott was dropped from the 2010 list after holding that position for 3 years previous.

According to Ethisphere, there's "a high correlation between ethical business leadership and  customer loyalty and satisfaction.   Ethical business leadership is  about *keeping your customers engaged, and your stakeholders informed*."

Assuming that "the Trust holds all the cards" offers a contrarian view.  At the very least, spinco will have to engage legacy owners, the Trust and fractional ownership.  In the best case scenario, engaging and immersion of all of these interests will be critical and contribute to spinco's success (in my opinion).


----------



## SueDonJ

TJCNewYork said:


> Quoting the Letter to Owners, "Marriott Vacation Club International (MVCI) and its affiliates will remain the exclusive developer of timeshare and fractional products for Marriott® and The Ritz-Carlton®, focused on
> maximizing growth and development within this exciting industry."
> 
> Assuming the Trust holds all the cards excludes fractional ownership and presumes that lion's share of Spinco's revenue and assets resides there (in the Trust).  Is it possible that the Trust could achieve that position within the year that Marriott expects to create spinco?



Um, TJC, we were comparing the relative control between Marriott/the spin-off and the MVCI Weeks and DC Exchange Members vs. DC Trust Members; not the relative control the MVCI/DC owners will hold in the spin-off vs. all other spin-off segments.  



TJCNewYork said:


> Great observation.  Wyndham out-performed Marriott last year and earned distinction in 2010 as one of the World's Most Ethical Companies.  With regret, Marriott was dropped from the 2010 list after holding that position for 3 years previous.
> 
> According to Ethisphere, there's "a high correlation between ethical business leadership and  customer loyalty and satisfaction.   Ethical business leadership is  about *keeping your customers engaged, and your stakeholders informed*."
> 
> Assuming that "the Trust holds all the cards" offers a contrarian view.  At the very least, spinco will have to engage legacy owners, the Trust and fractional ownership.  In the best case scenario, engaging and immersion of all of these interests will be critical and contribute to spinco's success (in my opinion).



I don't think anybody is saying that the spin-off won't have to "engage" the customers who own the products; we all just have different ideas of how much and what sort of engagement is necessary (and possible) for success.

That Ethisphere rating has been discussed on TUG before.  How does it compare to Friday's announcement that Marriott has achieved the Fortune Magazine "World's Most Admired Lodging Company for the 12th Year" as ranked by business leaders?  We have to take into consideration that neither of these rankings is specific to the timeshare product or the timeshare segment of the company, but is it reasonable to assume that any company could gain the Fortune ranking from peers if it was engaged in unethical behavior?


----------



## Fredm

TJCNewYork said:


> Assuming that "the Trust holds all the cards" offers a contrarian view.  At the very least, spinco will have to engage legacy owners, the Trust and fractional ownership.  In the best case scenario, engaging and immersion of all of these interests will be critical and contribute to spinco's success (in my opinion).



I don't see a conflict.
"Holding all the cards" is not necessarily a negative. 
They have always held the cards as a practical matter.
As do all the branded hospitality developers in the industry. 

Marriott has done a very good job with owner satisfaction, overall. I expect that to continue under Spinco. 
Marriott has handled the legacy ownership issue very well, IMO.
Shareholder satisfaction will depend on stock performance over time.
The two are somewhat linked. But, Spinco will look very different five years from now. 

Today, MVCI is a development company in transition to a fee for service company. 
How legacy owners interact with that fee for service model will, I suspect, evolve as the company evolves. As with everything else that changes, a few will complain and criticize. All will adapt. 
Stockholders are another matter. Few will care about how the product functions. All will care about the price of the stock.

Marriott's name will be attached to the resort product, no matter what Spinco calls itself. So, MI has an interest beyond the family's 21% stake in the enterprise. They obviously think they know what they are doing. 

The rest of it is us chickens clucking at one another.


----------



## TJCNewYork

SueDonJ said:


> We have to take into consideration that neither of these rankings is  specific to the timeshare product



That's true.  But, according to Ethisphere, Wyndham Worldwide outperformed Marriott in 2010.  The comparative timeshare segment performance is available in the public domain and depicted, here.


----------



## AceValenta

I remember a rumor thread about Disney and Marriott merging about a year ago. I think someone heard it from a bus driver or someone in the employ Disney but not in an important role. 

Isn't the President of MVCI a former Disney executive and he devised the new Marriott points system. 

I know a of a phone company that spun off their cell phone company a few years ago and within a year the cell phone company was gobbled up by a much larger and more viable company. 

Maybe the bus driver was right.....In time we will find out.


----------



## timeos2

$1.5 BILLION in basically what can be called "distressed inventory" for them to sell in an industry where sitting on $10-12 million is considered high. This is a huge anchor that Marriott understandably wants off their books. Moving it to a quasi independent operation doesn't magically give it better value. It just moves it to a new owner to deal with.  Not a positive no matter how you try to spin it and the related costs have to be covered. It sure won't be sold any time soon so guess who will be paying? Lets see, where does the income other than sales come from? I think I can see some fees going up before long.


----------



## timeos2

AceValenta said:


> I remember a rumor thread about Disney and Marriott merging about a year ago. I think someone heard it from a bus driver or someone in the employ Disney but not in an important role.
> 
> Isn't the President of MVCI a former Disney executive and he devised the new Marriott points system.
> 
> I know a of a phone company that spun off their cell phone company a few years ago and within a year the cell phone company was gobbled up by a much larger and more viable company.
> 
> Maybe the bus driver was right.....In time we will find out.



Wouldn't bet on it as Disney is fighting their own inventory issues. They don't need to be saddled with a massive cash drain (actually, who does?).  Spinco as it is being called is not an attractive take over candidate.


----------



## wof45

timeos2 said:


> $1.5 BILLION in basically what can be called "distressed inventory" for them to sell in an industry where sitting on $10-12 million is considered high. This is a huge anchor that Marriott understandably wants off their books. Moving it to a quasi independent operation doesn't magically give it better value. It just moves it to a new owner to deal with.  Not a positive no matter how you try to spin it and the related costs have to be covered. It sure won't be sold any time soon so guess who will be paying? Lets see, where does the income other than sales come from? I think I can see some fees going up before long.



let's do some math on this --

if the average week sale is $25,000, then $10 million is 400 weeks which at 50 weeks per unit is 8 units.  So, $1.5 billion is 150 times 8 units or 1200 units.  

that is no a lot more units than Marriott Grande Vista, or Shadow Ridge.

Obviously selling 100,000 1,500-DC point blocks is not going to happen in a year, but as long as MVCD is selling existing inventory, it is all profit since the costs are already sunk and they do not have to pay to replace inventory.

Why do think MVCD will be short on cash when they have inventory to sell and not replace?


----------



## dioxide45

wof45 said:


> let's do some math on this --
> 
> if the average week sale is $25,000, then $10 million is 400 weeks which at 50 weeks per unit is 8 units.  So, $1.5 billion is 150 times 8 units or 1200 units.
> 
> that is no a lot more units than Marriott Grande Vista, or Shadow Ridge.
> 
> Obviously selling 100,000 1,500-DC point blocks is not going to happen in a year, but as long as MVCD is selling existing inventory, it is all profit since the costs are already sunk and they do not have to pay to replace inventory.
> 
> Why do think MVCD will be short on cash when they have inventory to sell and not replace?



While 1200 units may not sound like a lot. It is almost 50% larger than Grande Vista (which you referred to). Remember though that Grande Vista is Marriott's largest resort. Consider it also a brand new one and a half Grande Vistas without a single week sold preconstruction. Those 1200 units account for almost 10% of Marriott's total unit weeks. That is a heavy burden.


----------



## wof45

dioxide45 said:


> While 1200 units may not sound like a lot. It is almost 50% larger than Grande Vista (which you referred to). Remember though that Grande Vista is Marriott's largest resort. Consider it also a brand new one and a half Grande Vistas without a single week sold preconstruction. Those 1200 units account for almost 10% of Marriott's total unit weeks. That is a heavy burden.



a benefit for MVCD is that it only has the one trust and doesn't have to sell 10 different resorts in different places.  It can sell them all from the same pool.


----------



## windje2000

wof45 said:


> let's do some math on this --
> 
> if the average week sale is $25,000, then $10 million is 400 weeks which at 50 weeks per unit is 8 units.  So, $1.5 billion is 150 times 8 units or 1200 units.
> 
> that is no a lot more units than Marriott Grande Vista, or Shadow Ridge.
> 
> Obviously selling 100,000 1,500-DC point blocks is not going to happen in a year, but as long as MVCD is selling existing inventory, it is all profit since the costs are already sunk and they do not have to pay to replace inventory.
> 
> Why do think MVCD will be short on cash when they have inventory to sell and not replace?



You are comparing apples and oranges.  

The $1.5 B is inventory at cost.  The $25K  per week is retail.

Cost of sales is 40%.

To convert, reduce the $25K at retail to cost (0.4 x $25K)

Or, recognize that $1.5 B in inventory represents $3.75B at retail, assuming the $1.5 B is all finished goods inventory which it most certainly is not.


----------



## dioxide45

windje2000 said:


> You are comparing apples and oranges.
> 
> The $1.5 B is inventory at cost.  The $25K  per week is retail.
> 
> Cost of sales is 40%.
> 
> To convert, reduce the $25K at retail to cost (0.4 x $25K)
> 
> Or, recognize that $1.5 B in inventory represents $3.75B at retail, assuming the $1.5 B is all finished goods inventory which it most certainly is not.



I was just out searching to quote this post you made in another thread. The 1.5BB inventory number kicked around isn't based on retail pricing.


----------



## Lardan

I read this entire thread. I'll admit at times I skimmed some. After reading all this I was very reluctant to post anything with me just joiningg today.  But, I thought why not, I'm a Marriott owner myself.

I posted today in my introduction thread that I bought at Cypress Harbour 11 or 12 years ago site unseen over the telephone. Why did I do this, because of the name Marriott. So out of all this to me the most important aspect of Spinco, as we call it, retains the Marriott name.

Homes are for living, having families grow in them, and hopefully an investment along the way.  Timeshares are for discretionary income pure and simple whether to enjoy by utilization, renting, or flipping.  As much as the real estate market has sufferred, to me it is only natural the timeshare market would suffer much worse.

I think as the economy picks up, which it will, there will be a lot mergers, buyouts, and acquistions take place in business.  I would not be surprised at all if several of the big names do in fact merge, and probably with Spinco down the road.

I follow the stock market fairly close and spinoffs are not that uncommon.  Results do vary and spinoffs occur for many reasons.  I think this spinoff occurred to please the stockholders, but at the same time I don't think Marriott would allow anything to fail with its name on it.  I come back to the name again don't I.

I wouldn't like it and I would be very upset if the value of my timeshare at Cypress crashed.  But, I think that I would be more upset about the loss of the wonderful vacations more than the money.  I bought it so long ago at a very good price on the secondary it wouldn't really affect the family bottom line at this point.  I've never considered it a monetary asset anyway, just something to enjoy.

This period of the timeshare market to me certainly somewhat reflects the stock market.  No doubt the time share market is down quite substantial right now and many want to bail due to fear of losing money, while others see it as an excellent buying opportunity. In the stock market at least the sellers are normally those that lose.

I am currently in the midst of closing on a timeshare I just bought. Again with the price I paid for it if it crashed I would survive just fine. Not that it wouldn't upset me a great deal. But I looked at it as a risk vs. reward.  The risk to me was worth it for I feel this industry will bounce up in the future with changes, not cease to exist. I never thought I would get this time share for the weeks I went into looking for the price I paid.  Please don't take this as bragging just stating my faith in the fact this industry will survive.

I can really do nothing about any of the things happening with Marriott or the timeshare industry.  So, I feel the I made an extremely good purchase and now I'll ride this out while we continue to enjoy our vacations.

As for MF they are going to go up, what isn't?  But, with the amount of inventory setting out there I don't think they can raise the MF costs too much because it would inhibit new sales.  I certainly don't see a tier system coming where new buyers pay one rate while existing owners pay another. 

 I am curious about is Marriott time share debt to assest ratio.  But, I think a lot of the debt they are carrying is actually not entirely a real debt owed, but just unsold inventory.  I would also be curious if the resorts appraised higher than expected and it became public, is it possible our taxes would increase? Local governments would love to find some big juicy time share complexes to raise the property taxes since virtually all those seeing an increase in their taxes are non-residents of the area.

I guess where I was trying to head with all this is don't do something like unloading the resorts you have enjoyed for years because of some current unknowns and a shaky market. I bet it is very rare here anyone would be facing bankrupcy because their time shares folded. If that is the case, well frankly maybe that person should not have bought the timeshare(s) in the first place.


----------



## OldPantry

windje2000 said:


> You are comparing apples and oranges.
> 
> The $1.5 B is inventory at cost.  The $25K  per week is retail.
> 
> Cost of sales is 40%.
> 
> To convert, reduce the $25K at retail to cost (0.4 x $25K)
> 
> Or, recognize that $1.5 B in inventory represents $3.75B at retail, assuming the $1.5 B is all finished goods inventory which it most certainly is not.




So, doing the 40% wholesale/retail adjustment, that inventory is really more like a 3000 unit overhang.  Isn't that fairly close to 25% of all vacation clubs?  Any way you look at it, it's beginning to sound like a pretty heavy anchor.  That inventory has carrying costs. And some of it can't be sold without further significant investment (think of the half-empty third tower at Ko Olina).  

I would see some major problems ahead.  The buy-in by existing weeks owners will unquestionably tail off rapidly, and their exchange points won't actually generate revenue for Spinco.  So, the company is left with new points sales to generate the income investors will be expecting.  

Every time I've looked at it, new points seem to be a terrible deal.  People end up paying more to access the vacation clubs via points than it would cost them to simply pay direct Marriott retail.  (This presumes that money spent on points has a real cost: lost investment income).  While there will undoubtedly be a limited number of folks who will succumb to the hard sell, I think the bloom is off that particular rose.  If the sales of new points also tail off drastically, then Spinco will need to rethink its business model.  The obvious answer would be a sale: half off, or something like that.  So, a price that actually represents a good deal.  The early buyers would be livid, but that inventory would move!


----------



## windje2000

dioxide45 said:


> I was just out searching to quote this post you made in another thread. *The 1.5BB inventory number kicked around isn't based on retail pricing.*



Exactly my point.

Two items other than retail/wholesale enter into the analysis.  

First, the $1.5B is after the impairment hit of $0.7 B.

Second, the inventory is not 100% finished goods.  Much is in various states of development.  I recall reading somewhere that about 1/2 was finished goods, but have no link for that data point.


----------



## TJCNewYork

SueDonJ said:


> We have to take into consideration that neither of these rankings is specific to the timeshare product



One common denominator is that both rankings apply to publicly-traded companies, which is what spinco will be.  In general, these companies comply with the norms set by the trading exchange.  (Knowing your passion for documents) Section 303A.01 of the New York Stock Exchange Manual, for example, outlines requirements for _a Spin-off Transaction _that is likely to apply to spinco.

Per the NYSE manual, one norm is a minimum of 3 board-level committees including Audit, Nominating and Compensation. Exceeding this norm, Marriott currently has 6 board-level committees.  Although Wyndham Worldwide outperformed Marriott by Ethisphere metrics, Wyndham runs on 4 board-level committees.  How many should spinco have?

Overall, how do the Fortune Top 50 compare?  About 23 companies or 46% appear to have expanded the scope of board-level oversight beyond the norm.  Among the Top 25 companies, the percentage rises to nearly 60%.  

What's so striking in this group is the expanded focus on public and social issues impacting business lines. The thinking drives the selection of independent board members who have, as one IBM charter notes, '_a proprietary stake_' that is '_closely aligned with company interests_'.  

To illustrate, here are selected examples from the Fortune Top 50:

Proctor & Gamble, Governance & Public Responsibility Committee
Coca-Cola, Public Issues & Diversity Review Committee
IBM, Directors & Corporate Governance Committee 
GE, Public Responsibilities Committee
Johnson & Johnson, Public Policy Advisory Committee
AMEX, Public Responsibility Committee
Target, Corporate Responsibility Committee
JPMorganChase, Public Responsibility Committee
Nike, Corporate Responsibility Committee
General Mills, Public Responsibility Committee

Borrowing from General Mills, should spinco have board-level oversight for:
Reviewing public policy and social trends affecting spinco;
Monitoring spinco's corporate citizenship activities;
Evaluating spinco's policies to ensure they meet ethical obligations to employees, consumers, society and *owners*?
For P&G, Coke, IBM, GE, J&J, Amex, Chase, Target and Nike, did expansion of board-level oversight offer them an edge over their competitors?   Is there a parallel that merits spinco's consideration?  

Back to your point, neither the World's Most Ethical (WME) Companies or the Fortune 500 rankings are specific to timeshare.  As a new company blazing a trail for an industry in recovery and  evolving, *increasing value* for both shareholders and owners presents a challenge.  

FWIW, considering the inclusion of 'deceptive Timeshares sales practices' among ConsumerAffairs.com's Top 10 Scams of 2010, and a business model that for the foreseeable future relies upon the 'power of the referral from highly satisfied owners', the examples above merit serious consideration.


----------



## SueDonJ

TJC, I appreciate how much thought you're putting into this "campaign" (for lack of a better word, not meant to be derisive in the slightest) to get Marriott to consider a forward-thinking BOD seat with increased customer influence.  I agree with the others here that it is not going to happen.  It's simply not in their best business interest to allow it.

It appears that you think Marriott has an obligation to the customers (especially the timeshare owners) to make up for recent perceived value losses.  But if I only measure my timeshares' value in terms of usage, because that's the only value guaranteed by my contracts, and I'm getting the value as promised, how can I agree with your perception that there's been a devaluation which needs correcting?  The product itself was developed with leeway for changes related to business and usage patterns - it's a bit unrealistic to expect that Marriott won't make changes to it when their bottom line suffers.  I happen to be encouraged by Marriott making moves to combat the terrible economy's effects on timeshares, and am willing to give them some time to let their moves work.  They have a history of being an industry leader; the spin-off has a pretty good chance at success if MI's same business practices are continued there. 

The reason I contrasted that Ethisphere ranking with the one from Fortune 500, is because that one from Ethisphere has been brought up on TUG before as "evidence" of Marriott changing from an ethical company to an unethical one.  It's not apparent if you're trying to make the same charge.  Are you?  My thinking is that the Fortune 500's ranking is probably the more coveted of the two, and thus if there was actual evidence of Marriott being an unethical company then leaders in the industry would not be consistently voting for Marriott in the F500 ranking.  The Ethisphere site says that one of the data points considered is whether or not a company is "involved" in litigation - it doesn't say whether the company must be at fault in such litigation to be discounted.  Well, we know Marriott's involved in litigation, once case in particular has been prominently displayed all over TUG and the timing of it fits perfectly to affect the Ethisphere poll.  Was that alone enough to bump Marriott in favor of Wyndham?  I don't know, but I'm not about to charge Marriott with being unethical if I don't have proof.

It's a great discussion and I have no problem with it happening here on TUG.  Whether we're MVCI/DC timeshare owners or MAR stockholders or both, it's important to know the product we're dealing with.  The abstract discussions are, IMO, as important as the concrete (for example, "how do I reserve?") discussions.


----------



## TJCNewYork

SueDonJ said:


> I only measure my timeshares' value in terms of usage



I think 'Usage' can be a variable yardstick because some owners measure value w/MF$, MR points, ACs, ShortStays, rentals and so on.    

Speaking of MF as a value yardstick, there's nothing 'abstract' when 200+ owners default in your COA.  There is nothing 'abstract' about Marriott reporting impairment charges of $1.5 billion.  And, there is nothing 'abstract' to the general public when ConsumerAffairs.com lists timeshares among the Top 10 Scams of 2010.  

Combine that with loss of owner confidence along with betrayal and the uphill climb to value becomes quite the challenge.  That said, my over-riding concern is the impact the sum total has on the value of spinco and its assets.  What happens to the value of our legacy weeks or DC points, when the value of spinco hits bottom?   In the bigger picture, any positives all of us combined can think of are  trumped - especially when investors start slicing the cheddar.





SueDonJ said:


> Are you?



Nonsense. Let's put that to rest, N.O.W.   The Ethisphere ranking is based upon self-reported info by the applicant. According to Ethisphere, Wyndham outperformed their competitors.  The WME recognition could be easily dismissed as Wyndham having sharper pencils filling out forms. Who knows what it means and who really cares?  


That said, the F500 ranking is a more reliable yardstick, in my opinion. Having looked under the F50 hood, I am even more convinced!  It stands to logic that in order to exceed shareholder expectations and create more value, a publicly-traded company will have to figure out just how to engage not only their shareholders, investors and stakeholders, but the public at large.  

I am very hard-pressed to think of a company whose products and services the public does not want that investors would be willing to invest in?
 

Given all of the factors mentioned, Spinco needs every competitive advantage to succeed.  This is not about 'one seat'.  The 10 examples illustrate many different solutions.   If what you call a 'campaign' contributes in a meaningful way to extract that advantage for spinco, it is a win for all us.


----------



## OutAndAbout

wof45 said:


> So, $1.5 billion is 150 times 8 units or 1200 units.
> that is no a lot more units than Marriott Grande Vista, or Shadow Ridge.





dioxide45 said:


> While 1200 units may not sound like a lot. It is almost 50% larger than Grande Vista (which you referred to). Remember though that Grande Vista is Marriott's largest resort.



The Maintenance Fees list (weeks):
1 BEDROOM    515
2 BEDROOM 38,728
3 BEDROOM   7,107
TOTAL: 46,350/50=927 villas
(dividing by 51 & 52 ends up with a fraction, so maybe 2 weeks are "dead" for service?)

The resort description:
..200 acres & 1,790 rooms & villas, 5 pools, 2 golf courses, lake, boat and fishing equipment rental..
(maybe the 1,790 includes lock-off villas?)


----------



## dioxide45

OutAndAbout said:


> The resort description:
> ..200 acres & 1,790 rooms & villas, 5 pools, 2 golf courses, lake, boat and fishing equipment rental..
> (maybe the 1,790 includes locking off all villas?)
> 
> The Maintenance Fees list (weeks):
> 1 BEDROOM    515
> 2 BEDROOM 38,728
> 3 BEDROOM   7,107
> TOTAL: 46,350/50=927 villas
> (dividing by 51 & 52 ends up with a fraction, so maybe 2 weeks are "dead" for service?)



I would think the 1790 is definitly considering 2 and 3BR lock offs as two rooms. The 927 better reflects the deeded units.


----------



## wof45

TJCNewYork said:


> Speaking of MF as a value yardstick, there's nothing 'abstract' when 200+ owners default in your COA.  There is nothing 'abstract' about Marriott reporting impairment charges of $1.5 billion.  And, there is nothing 'abstract' to the general public when ConsumerAffairs.com lists timeshares among the Top 10 Scams of 2010.



Let's get a little real in your arguments.  
What is listed as a scam is Time Share Post Card Companies -- not timeshares.

When you start quoting proof that does not say what you claim, the rest of your claims also sound a little phony.


----------



## TJCNewYork

*Let's Get Real*



wof45 said:


> Let's get a little real in your arguments.   What is listed as a scam is Time Share Post Card Companies -- not timeshares



OK - Your point is understood.  "Timeshares" is used as an all-inclusive term.  But, unlike the lovable characters, Donkey and Shrek in '_Shrek Forever After_', there's nothing _fictional _about scams involving timeshare investment, timeshare sales, timeshare rental and timeshare resales.  In common usage, the general travelling public, vacationers and consumers have been exposed to this term, "timeshares" repeatedly in a negative context.  

Given government involvement combined with media coverage about timeshares in general, does the general public even want timeshare products and services???   Other than defaulting on your MFs, what exit strategies will spinco offer to reassure consumers that timeshare even merits consideration?   

Resales is a major issue that has yet to be solved:  
August 2010:   FTC Warns Consumers
October 2010:  Psst... Hey Buddy, Wanna Sell a Timeshare? 

While Donkey spun timeshares into a joke in the final film of the Shrek series, *reselling timeshare is no joke* to the hundreds of thousands of owners who thought buying one was a good deal. 

Spinco faces a _formidable_ business challenge recovering from a train wreck. With all the negatives embedded in the term, "timeshares" the only aspect that's "phony" is the denial.


----------



## Fredm

Folks, why so serious?
Timeshares are supposed to be fun.

The analysis/opinions of Spinco's future prospects are interesting.
We have no shortage of them, mine included.
We do indeed enjoy hearing ourselves talk.

But, "let's get real". 
Time will tell how this all shakes out. In the meantime we are passive observers, opinions notwithstanding.

As mentioned in another post, it's just us chickens clucking at one another.  

In closing, cluck, cluck, cluck.


----------



## SueDonJ

TJCNewYork said:


> OK - Your point is understood.  "Timeshares" is used as an all-inclusive term.  But, unlike the lovable characters, Donkey and Shrek in '_Shrek Forever After_', there's nothing _fictional _about scams involving timeshare investment, timeshare sales, timeshare rental and timeshare resales.  In common usage, the general travelling public, vacationers and consumers have been exposed to this term, "timeshares" repeatedly in a negative context.
> 
> Given government involvement combined with media coverage about timeshares in general, *does the general public even want timeshare products and services???*   Other than defaulting on your MFs, what exit strategies will spinco offer to reassure consumers that timeshare even merits consideration?
> 
> Resales is a major issue that has yet to be solved:
> August 2010:   FTC Warns Consumers
> October 2010:  Psst... Hey Buddy, Wanna Sell a Timeshare?
> 
> While Donkey spun timeshares into a joke in the final film of the Shrek series, reselling timeshare is no joke to the hundreds of thousands of owners who thought buying one was a good deal.
> 
> Spinco faces a _formidable_ business challenge recovering from a train wreck. With all the negatives embedded in the term, "timeshares" the only aspect that's "phony" is the denial.



To answer what's bolded - no.  The general public does not want timeshares.  If it did, then everybody and their mother would have bought one back in the good old days when the economic picture was rosy and bright.

Timeshares are a niche item, always have been and always will be.  They're attractive to folks who want to vacation in a certain style despite knowing that purchasing the product carries an inherent financial risk, because no timeshare seller is charged with or takes steps to protect the resale value.  Timeshares have always had a negative connotation in financial circles.  There is nothing the spin-off can do to combat that because the product is simply not a sound financial investment vehicle.

What the spin-off can do to ensure future success is continue whatever business practices Marriott has used to keep the product of consistently high quality and attractive to those who think the vacation lifestyle is appealing.  And along with the rest of us, it can hope and pray that the overall economic picture improves to the point where enough folks have the discretionary income to buy the lifestyle.

As far as considering what the spin-off can do to ensure the financial value of the product that existing owners have previously purchased?  I think it's a pipe dream to expect them to do anything, again because they're not charged with protecting a financial investment.  I think it's more on the shoulders of the HOA to protect owners from defaults, foreclosures, etc...  They're the ones who can get creative with things like deed-back offers.  But as long as owners believe that they're entitled to a cash return when they no longer see usage value in what they've purchased, then even the programs which allow them to walk away won't be of any help.

Cluck cluck BWAAAACK.


----------



## Fredm

SueDonJ said:


> Cluck cluck BWAAAACK.



AH Ha!

A duck in chicken feathers.
You can't fool me! :hysterical:


----------



## TJCNewYork

Strident amidst fowl banter... Let's not forget that the spinco transaction is subject to regulatory approval, and the Securities Exchange Commission is hardly a 'bystander'.   Quoting the SEC,

[FONT=Verdana,Arial,Helvetica]"The mission of the U.S.  Securities and Exchange Commission is to protect investors, maintain  fair, orderly, and efficient markets, and facilitate capital formation. [/FONT][FONT=Verdana,Arial,Helvetica]As more and more  first-time investors turn to the markets to help secure their futures,  pay for homes, and send children to college, our investor protection  mission is more compelling than ever.[/FONT]

[FONT=Verdana,Arial,Helvetica]As our nation's  securities exchanges mature into global for-profit competitors, there is  even greater need for sound market regulation. [/FONT][FONT=Verdana,Arial,Helvetica]And the common interest of  all Americans in a growing economy that produces jobs, improves our  standard of living, and protects the value of our savings means that all  of the SEC's actions must be taken with an eye toward promoting the  capital formation that is necessary to sustain economic growth."[/FONT]   

Investors do their homework. With articles like this making direct reference to and attracting attention to TUG, will this discussion contribute to a successful spinco?

__________
Just for fun: If you leave the fox alone with a clucking chicken, isn't the chicken in big trouble?


----------



## TJCNewYork

> Timeshares are a niche item, always have been and always will be.



At $10+/point and rising, a single mid-week stay for a golf getaway at spinco's NJ resort will top $1,750/night. Given so many other affordable options, is there really a market for this?  It seems like spinco's 'niche' is shrinking very fast. Rephrasing WSJ, "little wonder" spinco's parent "wants out".


----------



## OldPantry

TJCNewYork said:


> At $10+/point and rising, a single mid-week stay for a golf getaway at spinco's NJ resort will top $1,750/night. Given so many other affordable options, is there really a market for this?  It seems like spinco's 'niche' is shrinking very fast. Rephrasing WSJ, "little wonder" spinco's parent "wants out".


Look, I'm no fan of points either, but this figure, $1,750 a night, seems wildly out of whack.  Do you mean all five week nights?  If not, would you mind breaking it down?


----------



## wof45

TJCNewYork said:


> At $10+/point and rising, a single mid-week stay for a golf getaway at spinco's NJ resort will top $1,750/night. Given so many other affordable options, is there really a market for this?  It seems like spinco's 'niche' is shrinking very fast. Rephrasing WSJ, "little wonder" spinco's parent "wants out".



Marriott Fairway Villas, May - Aug, Sun - Thurs, ==> 275 points.
If you rent them for 50 cents per point that's $137.50/night


----------



## TJCNewYork

OldPantry said:


> Look, I'm no fan of points either, but this figure, $1,750 a night, seems wildly out of whack.  Do you mean all five week nights?  If not, would you mind breaking it down?



OP - Based upon a sales scenario at MGV last September, we looked at a one night golf getaway midweek at spinco's NJ resort, Seaview w/2 br villas.  This is a 2 hr drive from NY.  According to sales, the midweek night requires 175 DC points.  

As of today 03/11/2011, DC points cost $10.22/point.  So, 175 x $10.22 = $1,788.50. This does not account for the added cost of MFs or annual membership or usage over the lifetime of DC ownership. It's more of first year cost for inception or entry into the program (my words).  Considering that DC requires a minimum of 1500 points, the cost of entry is actually considerably higher = $15,330.00

Assuming upfront costs are paid, and MF remains the same (hah), when one calculates the cost of one night midweek based upon MF:  $.40 x 175 = $70.  That's very attractive for a one night stay, and better than MOD, I think.

For enrolled legacy owners who have not purchased DC points, the cost of 175 points will vary widely depending upon how many DC points your home resort, season and view is worth and your current MF.  So let's say my home resort is worth 3,000 points and my current MF is $1400.  Each point is worth $2.74 so the cost of one mid-week night at Seaview is 175 x $2.74 = $479.50

In the worst case scenario, excluding the cost of the exchange fee, calculating the cost of one night using a home resort to Seaview exchange based upon 7 night stay would be $1400/7 = $200/night.

In the best case scenario, excluding the cost of the exchange fees, calculating the cost of one night using a home resort to *2 Shortstay* exchanges based upon a total of 12 nights would be $1400/12 = $116.60

In the super best case scenario, excluding the cost of the exchange fees, calculating the cost of one night using a home resort to *2 Shortstay* exchanges plus a *Bonus AC* based upon a total of 19 nights would be $1400/19 = $73.68

Aside from the 'breakdown', I'm compelled to add that my wife and I have agreed to decline DC enrollment for now.  The economics of legacy ownership is familiar and works for us.  But, we are very hopeful that the value in legacy ownership is retained and increased.  Based upon comments here and here, we continue to think that spinco is long overdue. Spinco is not a panacea, but a positive step on the road to a solution.

Inspite of many concerns about declining value and the lack of competitive advantage in an industry marred in the media; we also remain very confident that the appointment of the new chairman of spinco's BoD is on-target, because of the knowledge, experience, capabilities, respect, integrity and extensive executive relationships he brings to the table.


----------



## TJCNewYork

wof45 said:


> Marriott Fairway Villas, May - Aug, Sun - Thurs, ==> 275 points. If you rent them for 50 cents per point that's $137.50/night



Thanks WOF.  I was not aware of the increase to 275 points.  My calcs will be off, but easy for TUGers to figure out.  As far as renting points for 50 cents, I wasn't really following that, could you point me to the specific posts/thread?


----------



## Fredm

TJCNewYork said:


> *Given so many other affordable options, is there really a market for this?  It seems like spinco's 'niche' is shrinking very fast.* Rephrasing WSJ, "little wonder" spinco's parent "wants out".



No. At least not a growth market.
Marriott figured that out several years ago.
Hence, Marriott (via Spinco) is migrating from an asset-based to a fee-for-service business model.
Existing assets remain to be sold. And they will be over time.

I have suggested that one only need look to Wyndham for how this might evolve.
Marriott has taken the first steps with creating a standardized currency (with attendant infrastructure), and is bundling for-fee services. 

With all due respect to the WSJ article you reference, its author demonstrated no insight to the working dynamics of the industry. Understandably, they had to put something in print. Nonetheless, it was superficial, knee-jerk reporting, IMO. Certainly not forward looking analysis.  

None of this negates the structural issues which created the problem. 
At the end of the day, timeshare developers fell victim to their own success. 
The market is awash in cheap inventory readily available in an internet-based marketplace.
Developers can no longer effectively compete with their owners for a sale.

The world does not need more timeshares developed anytime in the foreseeable future. Marriott was the most aggressive. Hence, was left holding the largest bag.
The economic/credit market contraction of 2008 hastened the fall (and exacerbated the structural problems inherent in fractional ownership of real estate). 

Marriott's response to this reality is to recast the business.
Its success remains to be seen. Nonetheless, attempting to prognosticate Spinco's future prospects based on an asset based model is missing the mark, IMO. Service consolidation is the name of the game. The opportunities are huge.

Does this preclude future development? Of course not. But, it will be in response to heretofore untapped markets in the world, likely integrate hotel assets, and take on a substantial rental component. The pieces are in place. But, that is the subject for another discussion.

The SEC is indeed chartered "to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.......".  They are not passive bystanders. But, we certainly are.

No doubt, informed investors do their homework. Research should begin with an understanding of the business model.
Given the value of the Marriott brand, its large and well-heeled owner base, its operations management expertise, and  Spinco's newly found freedom to pursue service consolidation ventures, it may work out well for shareholders. 
Time will tell.


----------



## SueDonJ

TJCNewYork said:


> OP - Based upon a sales scenario at MGV last September, we looked at a one night golf getaway midweek at spinco's NJ resort, Seaview w/2 br villas.  This is a 2 hr drive from NY.  According to sales, the midweek night requires 175 DC points. ...





TJCNewYork said:


> Thanks WOF.  I was not aware of the increase to 275 points.  My calcs will be off, but easy for TUGers to figure out.  As far as renting points for 50 cents, I wasn't really following that, could you point me to the specific posts/thread?



Before folks start panicking, there hasn't been an increase to any of the amounts in the DC Points Chart that was released upon rollout.  A single night at Fairway Villas costs either 125, 175 or 275 Points depending upon when you visit.

The potential for renting DC Points between owners has been discussed in several threads and that +/-50 cents figure is mentioned most often.  I think TUGger GregT has done a few eBay experiments - maybe he'll chime in. 



TJCNewYork said:


> As of today 03/11/2011, DC points cost $10.22/point.  So, 175 x $10.22 = $1,788.50. This does not account for the added cost of MFs or annual membership or usage over the lifetime of DC ownership. It's more of first year cost for inception or entry into the program (my words).  Considering that DC requires a minimum of 1500 points, the cost of entry is actually considerably higher = $15,330.00
> 
> Assuming upfront costs are paid, and MF remains the same (hah), when one calculates the cost of one night midweek based upon MF:  $.40 x 175 = $70.  That's very attractive for a one night stay, and better than MOD, I think.
> 
> For enrolled legacy owners who have not purchased DC points, the cost of 175 points will vary widely depending upon how many DC points your home resort, season and view is worth and your current MF.  So let's say my home resort is worth 3,000 points and my current MF is $1400.  Each point is worth $2.74 so the cost of one mid-week night at Seaview is 175 x $2.74 = $479.50
> 
> In the worst case scenario, excluding the cost of the exchange fee, calculating the cost of one night using a home resort to Seaview exchange based upon 7 night stay would be $1400/7 = $200/night.
> 
> In the best case scenario, excluding the cost of the exchange fees, calculating the cost of one night using a home resort to *2 Shortstay* exchanges based upon a total of 12 nights would be $1400/12 = $116.60
> 
> In the super best case scenario, excluding the cost of the exchange fees, calculating the cost of one night using a home resort to *2 Shortstay* exchanges plus a *Bonus AC* based upon a total of 19 nights would be $1400/19 = $73.68 ...



There's no doubt that purchasing DC Points is an expensive venture, especially if you're looking to use them to stay at the highest-demand resorts during the highest-demand periods.  But whew!  I am glad to see that you've expanded your analysis somewhat to include costs over the life of the ownership rather than your original single-use equation.  I think the only time I've ever seen that done before on TUG was with a super eBay deal and it was something along these lines, "Even if I only own the week for a year, the $700 purchase price will equate to $100/night plus one-time m/f, not a bad deal to begin with but when you expand it to multiple years it's a steal!"


----------



## mstoyanov

TJCNewYork,

You calculation is missing 2 important expenses - opportunity cost and depreciation. Lets run the calculation for summer week at NJ that requires 2725 DC points for the period of 10 years (good horizon for ownership - most home owners change houses more frequently than 10years). Lets also assume that cost of borrowing/opportunity cost for the money is 5% (this is fair assumption even if you pay cash since there are stable bonds that yield better return or you can pay your mortgage and get similar return).
Lets also optimistically assume that MFs stays at $0.40 and increase only at the value of inflation (to simplify net present value calculations). And finally make very generous assumption that after 10 years points that you bought are worth 50% of original purchase price.
The cost to purchase 2725 points will be $27,250 at $10 per point.
So total cost per week for 10 year use will be following:
1. MFs - $1090
2. Opportunity cost on original purchase (5% of $27,250) - $1362
3. Depreciation ($13,625 for 10 years) - $1362

So your total cost per week stay with 10 year horizon is  $3814 per week in summer.
How many people are ready to pay $3814 for 2BR in summer Fairway?
Especially if you can buy the same week currently for less than $1000 on secondary market and remove most of depreciation and opportunity cost out of the equation?
No matter how you slice it or dice it buying DC points is crazy for this type of usage. In fact I can not find a single week/resort for me that buying DC points make financial sense.





TJCNewYork said:


> OP - Based upon a sales scenario at MGV last September, we looked at a one night golf getaway midweek at spinco's NJ resort, Seaview w/2 br villas.  This is a 2 hr drive from NY.  According to sales, the midweek night requires 175 DC points.
> 
> As of today 03/11/2011, DC points cost $10.22/point.  So, 175 x $10.22 = $1,788.50. This does not account for the added cost of MFs or annual membership or usage over the lifetime of DC ownership. It's more of first year cost for inception or entry into the program (my words).  Considering that DC requires a minimum of 1500 points, the cost of entry is actually considerably higher = $15,330.00
> 
> Assuming upfront costs are paid, and MF remains the same (hah), when one calculates the cost of one night midweek based upon MF:  $.40 x 175 = $70.  That's very attractive for a one night stay, and better than MOD, I think.
> 
> For enrolled legacy owners who have not purchased DC points, the cost of 175 points will vary widely depending upon how many DC points your home resort, season and view is worth and your current MF.  So let's say my home resort is worth 3,000 points and my current MF is $1400.  Each point is worth $2.74 so the cost of one mid-week night at Seaview is 175 x $2.74 = $479.50
> 
> In the worst case scenario, excluding the cost of the exchange fee, calculating the cost of one night using a home resort to Seaview exchange based upon 7 night stay would be $1400/7 = $200/night.
> 
> In the best case scenario, excluding the cost of the exchange fees, calculating the cost of one night using a home resort to *2 Shortstay* exchanges based upon a total of 12 nights would be $1400/12 = $116.60
> 
> In the super best case scenario, excluding the cost of the exchange fees, calculating the cost of one night using a home resort to *2 Shortstay* exchanges plus a *Bonus AC* based upon a total of 19 nights would be $1400/19 = $73.68
> 
> Aside from the 'breakdown', I'm compelled to add that my wife and I have agreed to decline DC enrollment for now.  The economics of legacy ownership is familiar and works for us.  But, we are very hopeful that the value in legacy ownership is retained and increased.  Based upon comments here and here, we continue to think that spinco is long overdue. Spinco is not a panacea, but a positive step on the road to a solution.
> 
> Inspite of many concerns about declining value and the lack of competitive advantage in an industry marred in the media; we also remain very confident that the appointment of the new chairman of spinco's BoD is on-target, because of the knowledge, experience, capabilities, respect, integrity and extensive executive relationships he brings to the table.


----------



## mstoyanov

Fredm,

Timeshareing is fun but raising MFs is definitely not fun.


Fredm said:


> Folks, why so serious?
> Timeshares are supposed to be fun.


----------



## mstoyanov

Fredm,

It is true that Wyndham (Farifield) managed to successfully migrate from weeks to points model but the "skim" is really low for Marriott that doesn't exist in Wyndham points system(i.e the points that I get from my converted fixed week is exactly the same it takes me to reserve it) and even today you can still convert fixed week at Wyndham resort to points for $2495 without points purchase. 
Oh, and in Wyndham system once week is converted it stays converted to points when it is resold.
I think very few people expected from Marriott to drop that low - maybe they are trying for "we can be worse/greedy than Wyndham" award.



Fredm said:


> No. At least not a growth market.
> Marriott figured that out several years ago.
> Hence, Marriott (via Spinco) is migrating from an asset-based to a fee-for-service business model.
> Existing assets remain to be sold. And they will be over time.
> 
> I have suggested that one only need look to Wyndham for how this might evolve.
> Marriott has taken the first steps with creating a standardized currency (with attendant infrastructure), and is bundling for-fee services.


----------



## Fredm

mstoyanov said:


> Fredm,
> 
> It is true that Wyndham (Farifield) managed to successfully migrate from weeks to points model but the "skim" is really low for Marriott that doesn't exist in Wyndham points system(i.e the points that I get from my converted fixed week is exactly the same it takes me to reserve it) and even today you can still convert fixed week at Wyndham resort to points for $2495 without points purchase. I think very few people expected from Marriott to drop that low - maybe they are trying for "we can be worse/greedy than Wyndham" award.



I won't touch the "skim" issue. No legacy owner is forced into it.

I was referencing the Cendant strategy (whose name was changed to Wyndham Worldwide).

Cendant bought Fairfield and Worldmark. Then bought RCI.
RCI then introduced RCI Points, and recruited member resorts to affiliate with their newly minted (out of thin air) points currency. 
Established separate Weeks and Points exchange pools. 
Then grew what is now the largest vacation rental program in the world. Mostly from inventory captured from RCI's exchange inventory, and unused fragmented points (without owning any of it, and maintained by owner maintenance fees).   

Wyndham acquires inventory at resorts it acquires in bankruptcy, and/or engages in new Operation Management contracts. All without driving a single nail. Along the way a streamlined sales staff sells available points at retail.

THAT is what I call a fee-for-service money making machine.

So, fast forward.
Marriott has a large weeks-based resort system, including a bunch of unsold standing and pipeline inventory.
It creates a point-based program for current and future sales. A separate weeks based legacy system remains. Access to the points exchange is sold with bundled fees. Integrates travel and hotel components.

Now the speculation.
Spinco acquires I.I. 
I.I. introduces Destination Club Points. Recruits member resorts to participate. Sells Club access to resort owners. Maintains separate Weeks and Points exchange pools.  Expands its rental business using I.I. inventory and fragmented unused points.
Spinco acquires additional sales inventory by bringing some additional number of quality tier resorts/systems under its umbrella, and expands the Operations Management component of its business. All without driving another nail. 
In the process, integrates hotel, cruise, car rental, and other leisure travel services (all of which is currently done in a less encompassing way). 

Speculation? Sure. But, not trail blazing.
If Cendant was able to do it by floating corporate bonds (without brand identification), Spinco can do it. Probably better. For all concerned.

I.I. has already acknowledged (in its last quarterly conference call) to be under revenue pressure because of developer affiliates migrating to a fee-for service model.
Specifically credited Marriott's DC program as the reason for its 88% member retention rate. Marriott extracted a hefty fee retention for renewing its affiliation agreement. 3 months later the DC was announced. 6 months later Marriott announces the spin-off. Coincidence? I don't think so.


----------



## wvacations

TJCNewYork said:


> OP -.
> 
> For enrolled legacy owners who have not purchased DC points, the cost of 175 points will vary widely depending upon how many DC points your home resort, season and view is worth and your current MF.  So let's say my home resort is worth 3,000 points and my current MF is $1400.  Each point is worth $2.74 so the cost of one mid-week night at Seaview is 175 x $2.74 = $479.50
> 
> .



This thread has certainly covered a large range of topics. There is a math error in the above calculation however. The OP was comparing cost of MF to a night at a resort without regard to up front cost.

If you get 3000 points for your home resort and your MF are $1400 per year the cost per point is not $2.74 it is $0.47 per point cost per year. This would make mid-week Seaview 175 X $ 0.47 =  $82.25 per night not $479.50.

I beleive the math error came by dividing the points by the dollars instead of the correct formula of dollars by points. OP was trying to get $'s per point not Points per $.

Just keeping everthing equal!!!


----------



## mstoyanov

But part of the successful Cendant strategy was buying the successful Fairfield and WorldMark in addition to the RCI. If Fairfield transfer from weeks to points was such fiasco as is current Marriott transition to DC I doubt it would have even being purchased by Cendant. And Cendant needed the units provided by former Fairfield to fuel a good inventory availability in RCI.
Farfield deposits in RCI have always being the backbone of availability in RCI especially during the time when DVC has left it.
Even today a very large part of deposits in RCI comes from Wyndham/Fairfiled.


Fredm said:


> I was referencing the Cendant strategy (whose name was changed to Wyndham Worldwide).


----------



## mstoyanov

Oh, and one thing that I forgot. In order to to execute their strategy Cendant bought not only exchange company but also bough 2 timeshare developers to fuel the exchange system. 
In completely opposite move Marriott is divesting of current timeshare developer that it already has. If that was suppose to be same strategy as Cendant instead of getting rid of developer that they already have Marriott should have bough II and additional developer (DVC or Hilton for example) to fuel their own exchange system.
Now instead they are leaving a cash strapped Spinco to struggle on its own. Nobody will finance large amount of bonds to new Spinco without backing of a corporate giant like Marriott. 
To me this looks exactly the opposite of what Cendant did.


Fredm said:


> I was referencing the Cendant strategy (whose name was changed to Wyndham Worldwide).


----------



## Fredm

mstoyanov said:


> Oh, and one thing that I forgot. In order to to execute their strategy Cendant bought not only exchange company but also bough 2 timeshare developers to fuel the exchange system.
> In completely opposite move Marriott is divesting of current timeshare developer that it already has. If that was suppose to be same strategy as Cendant instead of getting rid of developer that they already have Marriott should have bough II and additional developer (DVC or Hilton for example) to fuel their own exchange system.
> Now instead they are leaving a cash strapped Spinco to struggle on its own. Nobody will finance large amount of bonds to new Spinco without backing of a corporate giant like Marriott.
> To me this looks exactly the opposite of what Cendant did.



Nope. Cendant started with nothing as a practical matter. Just Ramada and Avis. 
Spinco is starting with the most desired quality-tier resort system in the world, 400,000+ owners, efficient and sophisticated operations management expertise, and enviable profits. Standing inventory has already been written down, and sales/administration structures streamlined. Margins will be healthy. The wind is to its back. 
What is does not have is high growth prospects as a developer. Hence, the fee-for service business model.

Who knows what else is in the wind? I don't. But, those who characterize the spin-off as shedding an orphan dog are misreading the deal, IMO. That is the point I wish to make.


----------



## wof45

mstoyanov said:


> Oh, and one thing that I forgot. In order to to execute their strategy Cendant bought not only exchange company but also bough 2 timeshare developers to fuel the exchange system.
> In completely opposite move Marriott is divesting of current timeshare developer that it already has. If that was suppose to be same strategy as Cendant instead of getting rid of developer that they already have Marriott should have bough II and additional developer (DVC or Hilton for example) to fuel their own exchange system.
> Now instead they are leaving a cash strapped Spinco to struggle on its own. Nobody will finance large amount of bonds to new Spinco without backing of a corporate giant like Marriott.
> To me this looks exactly the opposite of what Cendant did.



I think there is a bit of a stretch here.

Marriott is not divesting its timeshare developer.  It is taking the entire timeshare division, timeshare developer, exchange, fee for service, et al and putting it into a separate company.  So this by itself is not a change.

Also, Spinco is not cash strapped.  The SEC would never let Marriott spin off a company that is not self sustaining.  They are in the position that as they sell inventory, they get cash, and they also get cash from fee for services business.

Regarding bonds -- First, there are already corporate bonds supporting the bonds, and second, the creditors would not let the bonds move from Marriott unless they felt they would get the returns promised.


----------



## mstoyanov

Cendant definitely did not start with nothing - it started in 1997 as a 14 billion merger between HFS and CUC (later is was uncovered that there was a massive fraud in CUC accounting that dropped the market cap 4 times but it recovered a year or 2 later). Just for reference the whole Marriott right now has market cap of ~14B so it is approximately the same size when Cendant was formed:
http://en.wikipedia.org/wiki/Cendant
By year 2000 when it purchased Fairfield for $635 million in cash and stocks Cenant was already a huge corporation bigger than both current Marriott  including Spinco and on top of that corporate bond market (especially for real estate developers) was completely different back then.
I doubt even Marriott can get financing now to pull move like Cendant let alone smaller company like Spinco saddled with huge pile of slow to move inventory and quite a big ongoing cash obligations. We will be able to get a glance at Spinco financials when they later file the prospectus.




Fredm said:


> Nope. Cendant started with nothing as a practical matter. Just Ramada and Avis.
> Spinco is starting with the most desired quality resort system in the world, 400,000+ owners, efficient and sophisticated operations management expertise, and enviable profits. The wind is to its back.
> What is does not have is high growth prospects as a developer. Hence, the fee-for service business model.
> Who knows what else is in the wind? I don't. But, those who characterize the spin-off as shedding an orphan dog are misreading the deal, IMO.


----------



## Lawlar

*This Thread is Too Long and Convoluted*

It's time to break this thread down into separate topics!!!  It's too confusing and longwinded for anyone who wants to learn about this important topic (and, in case you forgot what the topic was, which is likely, it's what is the effect of Marriott spining off the TS business).

I hope the moderators aren't hearding this topic into one thread because of their bias.  This subject deserves more space, even if some believe the posts on this topic are negative.


----------



## mstoyanov

wof45,

I do not know specific financial details of the Spinco and will not know them until they file the SEC disclosures but I do not think it is a stretch to say that Spinco will be very weak company on its own. They have a lot of inventory that is very slow to sell and they have to pay maintenance fees on this inventory which is a financial drain in addition to the cost of sales. I fully expect their profit/assets ratio to be horrible compared to Marriott.
That should be reflected as soon as they file disclosures and Spinco shares will be priced accordingly when these start trading on the stock exchanges.
As for the bonds - I was talking about new bonds they will need to issue to finance acquisitions if they want to follow Cendant model.



wof45 said:


> I think there is a bit of a stretch here.
> 
> Marriott is not divesting its timeshare developer.  It is taking the entire timeshare division, timeshare developer, exchange, fee for service, et al and putting it into a separate company.  So this by itself is not a change.
> 
> Also, Spinco is not cash strapped.  The SEC would never let Marriott spin off a company that is not self sustaining.  They are in the position that as they sell inventory, they get cash, and they also get cash from fee for services business.
> 
> Regarding bonds -- First, there are already corporate bonds supporting the bonds, and second, the creditors would not let the bonds move from Marriott unless they felt they would get the returns promised.


----------



## Fredm

The merged 14B market cap was based on paper mache.
The largest financial markets fraud to that point in US history.

Again, my point is that I do not believe Marriott is shedding an orphan dog.
Those that do are misreading the deal, IMO. 

Time will tell how they go about it, or, how successful they will be.


----------



## OldPantry

mstoyanov said:


> TJCNewYork,
> 
> You calculation is missing 2 important expenses - opportunity cost and depreciation.
> ...
> So your total cost per week stay with 10 year horizon is  $3814 per week in summer.
> How many people are ready to pay $3814 for 2BR in summer Fairway?
> ...
> No matter how you slice it or dice it buying DC points is crazy for this type of usage. In fact I can not find a single week/resort for me that buying DC points make financial sense.


Amen!  Emphasizing the "depreciation" aspect of a points purchase is very relevant, although it involves arbitrary assumptions about what that rate will be.  Note also that this example addresses an only modestly sought destination (Fairway). When you work with the sometimes spectacular points requirements of the HHI or Hawaii clubs, the picture is even darker.
This is why I really wonder what about Spinco's longer-term prospects.  They're offering a product (DC points) that is a distinctly worse "investment" than what it's replacing (traditional timeshares).  They were a bad deal; this is absolutely terrible!
Several folks are talking about the huge "fee for service" prospects Spinco faces.  To me, this seems like small potatoes compared to the gigantic markups they hope to achieve with points sales.  If this model falters, or even collapses, I could see Spinco being in a very bad way.  It might not necessitate bankruptcy, but it'll have to switch gears big time.  Maybe it will even have to go all the way: offer folks a genuinely good deal instead of something only a clueless mark could love.


----------



## mstoyanov

It is true that after the scandal was discovered the market cap of Cendant dropped almost 4 times but by year 2000 it had recovered back and was >$14B. Also in year 2000 the crisis in high tech industry made investors running for real-estate backed securities as a safe-heaven.
So selling real-estate corporate bonds was a whole different ballgame than it is now.



Fredm said:


> The merged 14B market cap was based on paper mache.
> The largest financial markets fraud to that point in US history.
> 
> Again, my point is that I do not believe Marriott is shedding an orphan dog.
> Those that do are misreading the deal, IMO.
> 
> Time will tell how they go about it, or, how successful they will be.


----------



## mstoyanov

OldPantry,

it is true that retail DC points makes no financial sense to purchase but that is also true for most other timeshares. Most of the timeshare purchasers are people dazzled by the slick salesmen and are not properly researching such large purchases as they should be. So there will always be buyers that do not(or can not) judge correctly the true economic cost of such purchase. The biggest hit for Marriott/Spinco comes from the existing buyers and their referrals - Marriott in the past had one of highest percentage of repeat buyers in the industry (may be only Royal Resorts had higher if I am not mistaken). In the last year they alienated a lot of existing timeshare owners with DC program and later with Spinco. And no it is not just Tuggers that hate all these changes - if you read on Bill Marriott blog (or other financial blogs) - most of the people posting are not Tuggers but they dislike the changes with the same passions as Tuggers. This is the biggest problem for Spinco. 



OldPantry said:


> Amen!  Emphasizing the "depreciation" aspect of a points purchase is very relevant, although it involves arbitrary assumptions about what that rate will be.  Note also that this example addresses an only modestly sought destination (Fairway). When you work with the sometimes spectacular points requirements of the HHI or Hawaii clubs, the picture is even darker.
> This is why I really wonder what about Spinco's longer-term prospects.  They're offering a product (DC points) that is a distinctly worse "investment" than what it's replacing (traditional timeshares).  They were a bad deal; this is absolutely terrible!
> Several folks are talking about the huge "fee for service" prospects Spinco faces.  To me, this seems like small potatoes compared to the gigantic markups they hope to achieve with points sales.  If this model falters, or even collapses, I could see Spinco being in a very bad way.  It might not necessitate bankruptcy, but it'll have to switch gears big time.  Maybe it will even have to go all the way: offer folks a genuinely good deal instead of something only a clueless mark could love.


----------



## mstoyanov

Fredm,

I decided to delve deeper into this speculation of yours.
Currently Interval is owner by a group called Interval Leisure Group Inc. (Nasdaq: IILG) and has currently market cap of ~$869M. It has 2 divisions - "Membership and Exchange" that in the lat report generated ~$28M earnings and "Management and Rental" that in the same report generated ~$1.7M earnings so almost all value in IILG is generated by "Membership and Exchange" division.
Presuming 50% premium over current stock price (which is normal for acquisitions) that will put the capital needed to acquire IILG ~$1.2B which should not be a small feat even for Marriott (MAR market cap is currently ~$14B) and right down impossible for the Spinco. In fact the only way I see both companies combined is as a voluntary merger between the Spinco and IILG. 
Now the question is will IILG shareholders see any value by such merger but to answer this question we need a lot more financial info on Spinco.
There can be some synergy between Spinco and IILG but there is also a danger for IILG of alienating other customers like Starwood and Hyatt.   
So for now I will go with a guess that such probability is quite low but future finance disclosures from Spinco may give us a better info to make predictions.


Fredm said:


> Now the speculation.
> Spinco acquires I.I.
> I.I. introduces Destination Club Points. Recruits member resorts to participate. Sells Club access to resort owners. Maintains separate Weeks and Points exchange pools.  Expands its rental business using I.I. inventory and fragmented unused points.
> Spinco acquires additional sales inventory by bringing some additional number of quality tier resorts/systems under its umbrella, and expands the Operations Management component of its business. All without driving another nail.
> In the process, integrates hotel, cruise, car rental, and other leisure travel services (all of which is currently done in a less encompassing way).
> 
> Speculation? Sure. But, not trail blazing.
> If Cendant was able to do it by floating corporate bonds (without brand identification), Spinco can do it. Probably better. For all concerned.


----------



## wof45

I think it is a mistake to say there is less value in the points structure than in the weeks structure.  There are a lot of people who are much happier with the points structure, the buy in at a lower level and not having low demand weeks with a high MF.

There is a good chance that when a large enough number of people with bad weeks and high MF stop paying, that you will see higher and higher fees for the remaining people with good weeks.  This is not a problem in the DC program.

I think you will find just as many tuggers who are happy with the new system.  there are a relative few who are posting who don't like it, and that is fine and they don't need to enroll their weeks.

I can't imagine that anyone bought a TS at developer price and expected it be a long-term investment.  It was a life style investment much like buying a vacation property, and many people also lost a lot on vacation properties in this economy.

Think about Christmas Clubs at banks.  THey were always a really bad investment, but people always signed up because they knew it was a way they would save for something so that they would have it when they needed it.  TS is a way to do the same with vacations.  Even when you talk of other uses of cash, you need to remember that most people bought their TS with a mortgage and 15 years of payments, not with cash.


----------



## mstoyanov

wof45, I don't know if this is directed to me but I will reply.
First for the points structure - points are not a bad tool to remove seasonality for a resort since they average MFs but are definitely not a cure for delinquencies (these are driven by other factors mostly personal finances).
In general red weeks owners are better than pure points resort (UDI), for white week owners MFs should be the same while blue weeks are worse compared to the resort that is pure points. As for the Marriott DC points - this is the worst possible points program of ALL systems that I know and I will never purchase pure DC points even resale (lack of home resort priority, high MFs, high resale restrictions, ability to modify point allocation at will and so on) at any price. As for the DC enrolled owners - it benefits prime week owners (so no cure for seasonality) and may work for some or not for the other but still very bad product compared to any other points timeshare system. As for me - I actually like the fact that DC program was implemented so badly - I did not own Marriotts pre DC era since even resale prices were too high for investment purposes but after DC roll-out resale prices dropped to level where resale prices start making sense from ROI perspective so I purchased 2 Marriotts and will purchase probably more as the prices continue to drop. Even if I am offered DC enrollment for free in the future I will probably not take it since it makes no financial sense for me.

As for people buying timeshare from developer into "life style" investment it never made financial sense. You could always rent the exactly same "life style" (i.e. the same units) even before for much less than true cost of purchase from owners and there were always promotions from developers for even less.
As for people loosing money on vacation properties - yes a lot of people lost money too but buying vacation property was always big financial decision that should be seriously analyzed (and led to financial loss in many cases even before current crisis). 

As for Christmas Clubs - I am actually not aware what these are but if this is something like this:
http://en.wikipedia.org/wiki/Christmas_club
it is not such a bad deal if there are no fees - looks like forced savings with minimal interest.

And finally for the people paying for timeshares with 10-15 year credit (usually at 12%+ APR) - that is downright financially irresponsible and is a lot worse than comparing it with 5% opportunity cost on the money you are looking to invest.
If you can not afford to pay for any timeshare in cash then you can not afford it period. Paying ridiculous interest rates for something that is not a liquid asset and no bank will touch is simply compounding one financial mistake with another.



wof45 said:


> I think it is a mistake to say there is less value in the points structure than in the weeks structure.  There are a lot of people who are much happier with the points structure, the buy in at a lower level and not having low demand weeks with a high MF.
> 
> There is a good chance that when a large enough number of people with bad weeks and high MF stop paying, that you will see higher and higher fees for the remaining people with good weeks.  This is not a problem in the DC program.
> 
> I think you will find just as many tuggers who are happy with the new system.  there are a relative few who are posting who don't like it, and that is fine and they don't need to enroll their weeks.
> 
> I can't imagine that anyone bought a TS at developer price and expected it be a long-term investment.  It was a life style investment much like buying a vacation property, and many people also lost a lot on vacation properties in this economy.
> 
> Think about Christmas Clubs at banks.  THey were always a really bad investment, but people always signed up because they knew it was a way they would save for something so that they would have it when they needed it.  TS is a way to do the same with vacations.  Even when you talk of other uses of cash, you need to remember that most people bought their TS with a mortgage and 15 years of payments, not with cash.


----------



## windje2000

wof45 said:


> I think there is a bit of a stretch here.
> 
> *Marriott is not divesting its timeshare developer.*  It is taking the entire timeshare division, timeshare developer, exchange, fee for service, et al and putting it into a separate company.  So this by itself is not a change.
> 
> Also, Spinco is not cash strapped.  The SEC would never let Marriott spin off a company that is not self sustaining.  They are in the position that as they sell inventory, they get cash, and they also get cash from fee for services business.
> 
> Regarding bonds -- First, there are already corporate bonds supporting the bonds, and second, the creditors would not let the bonds move from Marriott unless they felt they would get the returns promised.



Marriott is most certainly divesting itself of timeshare.  From wiki:



> In finance and economics, divestment or divestiture is the reduction of some kind of asset for either financial or ethical objectives or sale of an existing business by a firm. A divestment is the opposite of an investment.





> Divestment for financial goals
> 
> Often the term is used as a means to grow financially in which a company sells off a business unit in order to focus their resources on a market it judges to be more profitable, or promising. *Sometimes, such an action can be a spin-off.*



LINK


----------



## OldPantry

wof45 said:


> I can't imagine that anyone bought a TS at developer price and expected it be a long-term investment.  It was a life style investment much like buying a vacation property, and many people also lost a lot on vacation properties in this economy.


Hmm, I'd call that a huge lack of imagination.  I think, rather, that a large majority of buyers expected exactly that: a long-term investment that would maintain value and be a lovely thing to pass onto children and grandchildren.  Calling it a "life style investment" sounds like Monday morning quarterbacking.  Now that it's been revealed as a horrible investment, well it was really a "life style" choice, like a blazer perhaps.  That's OK, if it makes you feel better.  But it rings hollow to insist you never expected to get the money back, ever.  Would you really have bought if they had said, "you're buying into the best vacation clubs in the world, but your $35,00 to $50,000 is gone when you walk out the door"?  Wouldn't you have asked whether you really wanted to toss that money away?


----------



## dioxide45

OldPantry said:


> Hmm, I'd call that a huge lack of imagination.  I think, rather, that a large majority of buyers expected exactly that: a long-term investment that would maintain value and be a lovely thing to pass onto children and grandchildren.  Calling it a "life style investment" sounds like Monday morning quarterbacking.  Now that it's been revealed as a horrible investment, well it was really a "life style" choice, like a blazer perhaps.  That's OK, if it makes you feel better.  But it rings hollow to insist you never expected to get the money back, ever.  Would you really have bought if they had said, "you're buying into the best vacation clubs in the world, but your $35,00 to $50,000 is gone when you walk out the door"?  Wouldn't you have asked whether you really wanted to toss that money away?



I would have to agree. Back in 2003 when we attended our first sales presentation the sell was to buy a prepaid vacation. Back then when you ran the numbers, it actually was somewhat of a deal compared to renting the same unit with cash. After running the numbers you could see where you could come out ahead. I spent hours doing this, forecasting it out over 20-25 years and with MFs going up. It was a slight savings, but savings none the less.

Today that tactic is gone. Now it is all scare, scare, scare. The reason they can't use that old tactic is because the numbers no longer make sense.

I would agree that if they sold this as a "lifestyle investment" and told people all they were buying was a lifestyle. Indicating that when they want/need to sell, they will only get back 10%. They would have next to zero sales and the company would be in receivership very quickly.


----------



## wof45

OldPantry said:


> Hmm, I'd call that a huge lack of imagination.  I think, rather, that a large majority of buyers expected exactly that: a long-term investment that would maintain value and be a lovely thing to pass onto children and grandchildren.  Calling it a "life style investment" sounds like Monday morning quarterbacking.  Now that it's been revealed as a horrible investment, well it was really a "life style" choice, like a blazer perhaps.  That's OK, if it makes you feel better.  But it rings hollow to insist you never expected to get the money back, ever.  Would you really have bought if they had said, "you're buying into the best vacation clubs in the world, but your $35,00 to $50,000 is gone when you walk out the door"?  Wouldn't you have asked whether you really wanted to toss that money away?



I'm surprised if this was important to you that you would not have looked at the documents.

we first bought from MORI in 87-88, with the same idea that we would pass it on to our children, and that is what we will do, so it does not ring hollow.  I remember reading through the documents and the part that said the timeshare would be reviewed and re-voted by the owners in 40 years and wondering if I would still be around.  And that we would still own a share of the property when that happened.

you bought a share of a property in perpetuity, and that is what you have.  Even then, there were disclosures that there was no guarantee of value in the future.


----------



## wof45

dioxide45 said:


> I would have to agree. Back in 2003 when we attended our first sales presentation the sell was to buy a prepaid vacation. Back then when you ran the numbers, it actually was somewhat of a deal compared to renting the same unit with cash. After running the numbers you could see where you could come out ahead. I spent hours doing this, forecasting it out over 20-25 years and with MFs going up. It was a slight savings, but savings none the less.
> 
> Today that tactic is gone. Now it is all scare, scare, scare. The reason they can't use that old tactic is because the numbers no longer make sense.
> 
> I would agree that if they sold this as a "lifestyle investment" and told people all they were buying was a lifestyle. Indicating that when they want/need to sell, they will only get back 10%. They would have next to zero sales and the company would be in receivership very quickly.



nothing is ever as it seems.
we bought our second unit at Sabal Palms around Y2K.  We did a tour at grande vista, and told the sales person that we really wanted a second unit at Sabal Palms.  She had one for us, at about the original price, which was about half the price of a MGV unit.

We preferred the small resort, with use of the hotel facilities and location by Disney -- and half the price locked it.  We couldn't really understand why someone would rather pay the MGV price.

this was also about having an additional week of vacation, and not as an investment and not to trade for something else.  everyone has their own dream.


----------



## OldPantry

wof45 said:


> I'm surprised if this was important to you that you would not have looked at the documents.
> ...
> you bought a share of a property in perpetuity, and that is what you have.  Even then, there were disclosures that there was no guarantee of value in the future.


Yes, I did read the documents.  And of course, there were no written guarantees of future value.  The same applies to virtually any investment you'll ever make.  BUT, you don't buy stocks or bonds, and mentally write the principal off the day you buy.  Similarly, the Marriott salespeople talked (and talked, and talked) stable or increasing value, and most people (including me) swallowed that line.  
I truly doubt you were willing to instantly chalk this investment off either.  I suspect the "life style" analysis came considerably later.  
By the way, make sure your children actually want this gift; maybe they'll beg you not to burden them with the Marriott lifestyle.


----------



## wof45

OldPantry said:


> Yes, I did read the documents.  And of course, there were no written guarantees of future value.  The same applies to virtually any investment you'll ever make.  BUT, you don't buy stocks or bonds, and mentally write the principal off the day you buy.  Similarly, the Marriott salespeople talked (and talked, and talked) stable or increasing value, and most people (including me) swallowed that line.
> I truly doubt you were willing to instantly chalk this investment off either.  I suspect the "life style" analysis came considerably later.
> By the way, make sure your children actually want this gift; maybe they'll beg you not to burden them with the Marriott lifestyle.



actually, we have never thought of TS as an investment.  It was always about vacations.  And my daughter told us last Fall at MFC that she wants the weeks that we have at Sabal Palms.


----------



## TJCNewYork

wof45 said:


> nothing is ever as it seems.
> we bought our second unit at Sabal Palms around Y2K.  We did a tour at grande vista, and told the sales person that we really wanted a second unit at Sabal Palms.  She had one for us, at about the original price, which was about half the price of a MGV unit.
> 
> We preferred the small resort, with use of the hotel facilities and location by Disney -- and half the price locked it.  We couldn't really understand why someone would rather pay the MGV price.
> 
> this was also about having an additional week of vacation, and not as an investment and not to trade for something else.  everyone has their own dream.





wof45 said:


> actually, we have never thought of TS as an investment.  It was always about vacations.  And my daughter told us last Fall at MFC that she wants the weeks that we have at Sabal Palms.



We've stayed at Sabal Palms many times and love the resort for all the same reasons!  We delayed purchasing because of the assessment.  The most recent refurbishment is amazing and underscores what can happen when COA, BoD and management coalesce.  

Like you, we're looking to expand ownership, occupy at a home resort and we were very disappointed by the announcement to shift to a points-based model. 

Staying on-topic, although long overdue, a more nimble spinco will be able to react to changes in the market more rapidly.  And, given the established popularity of weeks-based home resorts and usage options like MRP and the mixed reviews of DC points, spinco could develop a more integrated hybrid model.  

Regaining it's legs in the weeks-based market won't be difficult for spinco at all. If spinco can engage legacy owners and marshall COA BoDs towards exacting brand standards displayed in the Sabal Palms refurb, then I think spinco will be very successful.


----------



## TJCNewYork

*Expanded Breakdown & Analysis*

Wow!  Thanks to everyone for expanding the breakdown and analysis.  A couple of days go by and this thread is in a different place.  You've got me engaged.  Thanks!

There are many meaningful contributions to this discussion about spinco.  Regards the thought of breaking up the thread into chunks that others can easily wrap their arms around, I'm for it.  Combined w/Google, the TUG search engine makes it easy to find content for cross-referencing, so segmenting the content into different buckets may make TUG more useful, IMO.

If I were a TUG newbie or let's say a potential spinco investor searching for information, getting through this thread would present a challenge.  Splitting the thread up may actually heighten TUG's importance as a source of information towards spinco's competitive advantage.

Just my 2 cents.

Cheers!


----------



## SueDonJ

OldPantry said:


> Yes, I did read the documents.  And of course, there were no written guarantees of future value.  The same applies to virtually any investment you'll ever make.  BUT, you don't buy stocks or bonds, and mentally write the principal off the day you buy.  Similarly, the Marriott salespeople talked (and talked, and talked) stable or increasing value, and most people (including me) swallowed that line.
> I truly doubt you were willing to instantly chalk this investment off either.  I suspect the "life style" analysis came considerably later.
> By the way, make sure your children actually want this gift; maybe they'll beg you not to burden them with the Marriott lifestyle.



This is getting to be a rehash of the same old TUG discussion where resale buyers will never be able to understand direct buyers and vice versa.  None of us is ever going to change the others' minds.

We really did purchase direct with the anticipation that we were purchasing a lifestyle.  They are the single reason that we have incorporated regular vacations into our lives, and without them we would probably not force ourselves to vacation the way we do.  The resale mag that we carried in to the presentation was proof that we knew about the lack of financial protection, but we wanted to buy specific resort/unit/view/season intervals and at the time they were not available on the external resale market for a substantial savings.  Could we have waited for prices to come down, knowing that history was on our side?  Sure, but we wanted to start using Marriotts immediately.  Could we have rented from Marriott and not gotten involved with ownership?  Sure, but those rental prices did not constitute a savings over the life of the ownership.  Could we have rented direct from owners?  Sure, but we'd prefer to deal direct with Marriott and not get into private rentals.  (It's a preference we still have.)

We were much more driven by the comparison between the specific Marriott intervals we purchased and the Hilton Head oceanfront condo whole-ownership that we were considering, as opposed to the direct-purchased Marriott intervals we purchased and the possibility of exchanging/renting to get the same through other less-expensive options.  When/if the time comes to get rid of them, we'll be very surprised if they have no value but we don't have a pre-set number at which we'll consider them a successful investment.  They work for the purpose we purchased them, they are a success.

About comparing stocks and bonds with Marriott direct-purchases, and how each vehicle spells out that there isn't a guarantee of value with the purchase?  Stocks, bonds, etc. are a financial investment, they have no other purpose or use.  Buying non-performing stocks and bonds is akin to throwing your money away because you're getting no value from your investment.  Timeshares are different.  Their use value - the actual vacations you can take with them - is their stated purpose.  Trying to make a comparison between them to bolster a financial value argument for timeshares is a huge stretch, IMO.

I do agree with you, OldPantry, when it comes to our heirs inheriting our timeshares.  It's not the ideal situation and I hope that we're lucky enough to be able to take care of things in advance the way our children would want.  But life intervenes, so we've taught them how to use or get rid of the timeshares if the worst happens and we're not able to do it for them.  And, mstoyanov, like you we would not be comfortable at all with holding a mortgage for timeshares - but that's a personal preference and it's completely understandable that others can and do manage the responsibility of mortgages with no problems.


----------



## OldPantry

SueDonJ said:


> We really did purchase direct with the anticipation that we were purchasing a lifestyle.  They are the single reason that we have incorporated regular vacations into our lives, and without them we would probably not force ourselves to vacation the way we do.  The resale mag that we carried in to the presentation was proof that we knew about the lack of financial protection, but we wanted to buy specific resort/unit/view/season intervals and at the time they were not available on the external resale market for a substantial savings.  Could we have waited for prices to come down, knowing that history was on our side?  Sure, but we wanted to start using Marriotts immediately.
> ...
> When/if the time comes to get rid of them, we'll be very surprised if they have no value but we don't have a pre-set number at which we'll consider them a successful investment.  They work for the purpose we purchased them, they are a success.
> ...
> Stocks, bonds, etc. are a financial investment, they have no other purpose or use.  Buying non-performing stocks and bonds is akin to throwing your money away because you're getting no value from your investment.  Timeshares are different.  Their use value - the actual vacations you can take with them - is their stated purpose.  Trying to make a comparison between them to bolster a financial value argument for timeshares is a huge stretch, IMO.


Yes, I think we're talking past each other a bit.  Believe me, I do get the lifestyle point of view.  I feel it every time I go to Ko Olina, Waiohai or Newport.  My main point is, simply, that this lifestyle has always been available to us anyway, either by owner rentals (smart, but inconvenient), or by renting from Marriott (convenient, EXPENSIVE, but still much cheaper than the true cost of ownership).  Is it really a huge stretch to suggest that you could have financed the lifestyle by investing the money differently?  

It appears to me that even the most choice club weeks are still freely available, if you give yourself a reasonable planning window.  I suspect that's always been true.  I addressed that recently in an analysis of availability at Ko Olina for its top prime weeks (everything available now from Redweek AND Marriott except for ocean view New Year's).  In each case, the prime week can be had cheaper than via new points, and certainly cheaper than developer purchase once decay is factored in.

The enjoyment I feel when I use my developer week helps me cope, but I feel altogether better when I occupy my resales.  They're still expensive, but not utterly exorbitant.  As to bum investments, well, they suck, no matter what they are.  I CAN say I've never experienced a long-term loss on an investment grade bond (lucky, I'm sure), and I went into my timeshare with a similar expectation.  I was encouraged to think it was equivalent to a blue chip stock or A-rated bond in safety.  Apparently, you were far more realistic than I was, recognized how flimsy the purchase was as an investment, and still wanted the deal.  Do you really think most folks were that sophisticated?  If they weren't, then they have a legitimate gripe, even though they can't sue.  The Marriott salespeople clearly knew better, and boldly misrepresented the safety of the "investment" they were selling, knowing that the reams of documentation covered their rear ends. 

Now, going forward: there's a new rotten investment being offered to the unsophisticated: expensive, illiquid trust points with severe restrictions on the period of usage and transferability, combined with a real possibility that folks will be unable to get into the clubs they want in the seasons they prefer.  Is it unseemly of me to point this out, or to emphasize better ways to enjoy the lifestyle?  

As to that lifestyle, I do love it, really! (See, I began and ended on a positive note!)


----------



## Millisara

*Should I still buy resale*

I do not own with Marriott and am thinking of purchasing a Marriott resale either in Boston or Hilton Head.  Should I wait until the dust settles? How can determine the week value?  Is Platinum period the most desired and then Gold?  I've tried to get that information from the Marriott site by looking at the individual timeshare description but can't seem to find it.Thanks for replies.


----------



## OldPantry

Millisara said:


> I do not own with Marriott and am thinking of purchasing a Marriott resale either in Boston or Hilton Head.  Should I wait until the dust settles? How can determine the week value?  Is Platinum period the most desired and then Gold?  I've tried to get that information from the Marriott site by looking at the individual timeshare description but can't seem to find it.Thanks for replies.


I personally think the unsettled state of affairs works to your advantage in negotiating a resale.  While the future trajectory of pricing is unpredictable, it's pretty clear that things have come down a long way.  As to quality, I'm a pretty firm believer that prime stuff is far safer than the more marginal time slots.  When you buy platinum, you're likely to have better rental and resale potential.  You'll also have access to the weeks you actually want to use.  While a resale down the line should definitely NOT be your goal (other non timeshare investments are probably much more promising on that score), the fact that you're buying cheap gives you some downside protection.

As for accurate information, you can find much of what you need at redweek.com or myresortnetwork.com.  Weeks calendars, which show the various seasons (gold, platinum, etc) are available at the Marriott vacation club site (vacationclub.com), although you might have to be an owner to see them.  Still, redweek listings usually specify the season, and often mention the weeks that apply to that season.  If not, you can always ask the seller.  If you do decide to buy, you'll definitely want to use a reputable escrow service, and title insurance is a very good idea, too.


----------



## SueDonJ

Millisara said:


> I do not own with Marriott and am thinking of purchasing a Marriott resale either in Boston or Hilton Head.  Should I wait until the dust settles? How can determine the week value?  Is Platinum period the most desired and then Gold?  I've tried to get that information from the Marriott site by looking at the individual timeshare description but can't seem to find it.Thanks for replies.



I don't follow resales, it's hard to know exactly when to expect the "dust to settle" with all the recent changes to Marriott timeshares, and I wouldn't be comfortable telling anyone that now is or isn't a good time to buy.  But ...

I grew up in Boston and now live just south, have been going into the city all my life and still haven't seen everything.  Marriott's Custom House sits in a perfect spot for touristy-type things both near and far - it's an easy city to explore on foot and the connections you'll want for venturing out are all right there.

Generally within Marriott's system the Platinum season is more in-demand than Gold but depending on what you like to do, you may actually prefer Gold.  At Hilton Head Plat is high summer and Gold is spring and fall.  We like Gold better there, with less humidity but still warm enough to enjoy the beach.  This is TUGger dioxide45's link to all of the resort calendars, it should help you get an idea of which season at each resort will work best for you.


----------



## SueDonJ

OldPantry said:


> ... Now, going forward: there's a new rotten investment being offered to the unsophisticated: expensive, illiquid trust points with severe restrictions on the period of usage and transferability, combined with a real possibility that folks will be unable to get into the clubs they want in the seasons they prefer.  Is it unseemly of me to point this out, or to emphasize better ways to enjoy the lifestyle? ...



Nope, not unseemly at all.     I think we all agree that until Marriott fleshes out the resale questions with respect to DC Points, it's just not possible to make an informed, educated decision whether or not to purchase them regardless of how much discretionary income someone is willing to spend.

I like how the new product can be used just as much as I like the old product - they each have their advantages.  I won't say that we'll never buy DC Points because down the road when the questions are answered we may find that Points work perfectly for what we want.  But it's always been difficult for me to say to anyone that they should buy a Marriott timeshare - actually I stay away from telling anyone to buy anything that requires an ongoing financial commitment.  I can talk someone's ear off for hours telling them how our timeshares work, though, and how happy we are with our purchases.  Any of those conversations that I've had, I do mention that although we purchased direct there are many others who are very happy with their resale purchases.


----------



## Hugh

*$1.5 Billion of Marriott timeshare inventory*

below was copied from another internet source:

http://www.reuters.com/article/2011/02/15/uk-marriottinternational-idUSLNE71E03N20110215

http://news.marriott.com/2011/02/ma...business-and-reports-fourth-quarter-2010.html

Some simple math showing how big Marriott timeshare glut is...

FACT: $1,500,000,000 worth of timeshare inventory mentioned in the above articles.

GUESS:  average size 2bd/2ba unit is 1200 Square Feet.
GUESS:  average RETAIL CONSTRUCTION cost of the unit is $300/SF (you can bet Marriott paid much less than $300/SF which would make the inventory glut even higher!! But we'll use RETAIL CONSTRUCTiON numbers.)
Therefore $300/SF x 1200 SF = $360,000 per unit 
Therefore $360,000 per unit / 52 deeded weeks = about $6923 per deeded timeshare week (ie. which is the cost basis for Marriott for each week they try to sell based on the RETAIL CONSTRUCTION price of $300/SF.  The cost basis is only HALF that if SF cost is more realistically $150/SF).

Then, $1,500,000,000 / $6923 per week = 216,669 timeshare weeks in their 
inventory glut. (If the SF price is really $150/SF, then you would DOUBLE the 
number of timeshare weeks in their inventory glut !!)

There are about 71 Marriott Timeshare properties according to the aritcles.
Therefore,  216,669 timeshare weeks /  71 Marriott Timeshare properties = 3051 average number of timeshare units to sell per property location. (Remember to DOUBLE that if the SF price is really a more realistic $150/SF cost to Marriott !!)

This is why one shouldn't pay $25,000 for one week ( $25,000 x 52 weeks = 
$1,300,000 value per unit; but TUGGERS KNOW THAT ALREADY !!).  Gee, even $7500 for one week is more than their RETAIL CONSTRUCTION price !


----------



## equitax

*While I agree that Dev Inventory is Overpriced..*

You need to calcualte the soft costs - ie carrying the inventory prior to occupancy, which is huge.

Add to this the value of common areas (for which no estimates exist in the post) 

TS exist because most cant /wont / dont want to own 52 weeks, and you pay for the service of someone managing it - it is a hefty premium, but in no way can this be compared to building a regular condo with 300 to 400 units / owners and maybe 10% common space... 




Hugh said:


> below was copied from another internet source:
> 
> http://www.reuters.com/article/2011/02/15/uk-marriottinternational-idUSLNE71E03N20110215
> 
> http://news.marriott.com/2011/02/ma...business-and-reports-fourth-quarter-2010.html
> 
> Some simple math showing how big Marriott timeshare glut is...
> 
> FACT: $1,500,000,000 worth of timeshare inventory mentioned in the above articles.
> 
> GUESS:  average size 2bd/2ba unit is 1200 Square Feet.
> GUESS:  average RETAIL CONSTRUCTION cost of the unit is $300/SF (you can bet Marriott paid much less than $300/SF which would make the inventory glut even higher!! But we'll use RETAIL CONSTRUCTiON numbers.)
> Therefore $300/SF x 1200 SF = $360,000 per unit
> Therefore $360,000 per unit / 52 deeded weeks = about $6923 per deeded timeshare week (ie. which is the cost basis for Marriott for each week they try to sell based on the RETAIL CONSTRUCTION price of $300/SF.  The cost basis is only HALF that if SF cost is more realistically $150/SF).
> 
> Then, $1,500,000,000 / $6923 per week = 216,669 timeshare weeks in their
> inventory glut. (If the SF price is really $150/SF, then you would DOUBLE the
> number of timeshare weeks in their inventory glut !!)
> 
> There are about 71 Marriott Timeshare properties according to the aritcles.
> Therefore,  216,669 timeshare weeks /  71 Marriott Timeshare properties = 3051 average number of timeshare units to sell per property location. (Remember to DOUBLE that if the SF price is really a more realistic $150/SF cost to Marriott !!)
> 
> This is why one shouldn't pay $25,000 for one week ( $25,000 x 52 weeks =
> $1,300,000 value per unit; but TUGGERS KNOW THAT ALREADY !!).  Gee, even $7500 for one week is more than their RETAIL CONSTRUCTION price !


----------



## abdibile

Is the 1.5 bln really based on construction cost?

I always thought it was retail price of this unsold inventory, so more like

$1.5 bln / $25.000 = 60.000 unsold weeks.


----------



## windje2000

abdibile said:


> I*s the 1.5 bln really based on construction cost*?
> 
> I always thought it was retail price of this unsold inventory, so more like
> 
> $1.5 bln / $25.000 = 60.000 unsold weeks.



Inventory carrying value is as a general rule based on the lower of cost or market.  

It is NOT carried at retail prices.


----------



## dioxide45

windje2000 said:


> Inventory carrying value is as a general rule based on the lower of cost or market.
> 
> It is NOT carried at retail prices.



Think if one had an inventory of 100 t-shirts and bought them for $2 each but is selling them for $10. They only have $200 in inventory, not $1000.


----------



## jlepstein1

dioxide45 said:


> Think if one had an inventory of 100 t-shirts and bought them for $2 each but is selling them for $10. They only have $200 in inventory, not $1000.


Another way of looking at this is  that you have an inventory of 100 T shirts which you purchased for $2 a piece.  You've advertised them for sale at $10 a piece.  But in the marketlace your competitors are selling exactly the same T shirts for $1 a piece.   Your inventory should be written down to market, i.e. $1 a piece.  So even if Marriott is carrying these units at construction cost, the liklhood is that the real market value (at auction on Ebay) for many of them is close to zero.  So the $1.5 Billion is pure fantasy.


----------



## windje2000

jlepstein1 said:


> Another way of looking at this is  that you have an inventory of 100 T shirts which you purchased for $2 a piece.  You've advertised them for sale at $10 a piece.  But in the marketlace your competitors are selling exactly the same T shirts for $1 a piece.   Your inventory should be written down to market, i.e. $1 a piece.  So even if Marriott is carrying these units at construction cost, the liklhood is that the real market value (at auction on Ebay) for many of them is close to zero.  So the $1.5 Billion is pure fantasy.



Your points are well taken, but Marriott is selling points, not the weeks seen on ebay.  Are they are taking the position that they are selling a different product?  Probably.

Have they set the terms of sale for points buyers to effectively eliminate any form of secondary market resales and independent sales price points?  Yup.  

Do you think there's a reason for that?


----------



## jlepstein1

windje2000 said:


> Your points are well taken, but Marriott is selling points, not the weeks seen on ebay.  Are they are taking the position that they are selling a different product?  Probably.
> 
> Have they set the terms of sale for points buyers to effectively eliminate any form of secondary market resales and independent sales price points?  Yup.
> 
> Do you think there's a reason for that?


That may indeed be the driver of the decision to move to points, i.e. that they hope it may enable them to avoid the need to write down their inventory. However, I suspect that external accountants and securities regulators will have a tough time approving a balance sheet which values the points at the listed sales price rather than the true market. And the analysts will make mincemeat out of Spinco's stock once they understand the valuation methodology for the unsold weeks (points).  The banks have the same problem, i.e. they  are holding billions of dollars worth of delinquent or foreclosed mortgages and they play "extend and pretend" games to avoid writedowns.  They can do this for a while, but eventually the chickens come home to roost.


----------



## windje2000

jlepstein1 said:


> That may indeed be the driver of the decision to move to points, i.e. that they hope it may enable them to avoid the need to write down their inventory. However, I suspect that external accountants and securities regulators will have a tough time approving a balance sheet which values the points at the listed sales price rather than the true market. And the analysts will make mincemeat out of Spinco's stock once they understand the valuation methodology for the unsold weeks (points).  The banks have the same problem, i.e. they  are holding billions of dollars worth of delinquent or foreclosed mortgages and they play "extend and pretend" games to avoid writedowns.  They can do this for a while, but eventually the chickens come home to roost.



Historically, building costs represented 40% of the sales dollar.  In other words, take the cost of building timeshare and multiply by 2.5 to get the selling price.  That leaves a lot of room to maneuver.

Recall also that the inventory on the books was haircut about $700 million in 2009.


----------



## bogey21

Millisara said:


> I do not own with Marriott and am thinking of purchasing a Marriott resale either in Boston or Hilton Head.  Should I wait until the dust settles? How can determine the week value?  Is Platinum period the most desired and then Gold?  I've tried to get that information from the Marriott site by looking at the individual timeshare description but can't seem to find it.Thanks for replies.


When I bailed on Marriott a number of years ago the last Resort I sold was my fixed Week at Monarch on HHI.  The reason was that it was fixed (not floating or points) and could be traded through both RCI and II.  I don't know if this is still the case but if you are interested in HHI, it is something you might want to check out.

George


----------



## davidn247

jlepstein1 said:


> That may indeed be the driver of the decision to move to points, i.e. that they hope it may enable them to avoid the need to write down their inventory. However, I suspect that external accountants and securities regulators will have a tough time approving a balance sheet which values the points at the listed sales price rather than the true market. And the analysts will make mincemeat out of Spinco's stock once they understand the valuation methodology for the unsold weeks (points).






windje2000 said:


> Historically, building costs represented 40% of the sales dollar.  In other words, take the cost of building timeshare and multiply by 2.5 to get the selling price.  That leaves a lot of room to maneuver.
> 
> Recall also that the inventory on the books was haircut about $700 million in 2009.



Both statements are correct.

It is clear that, before creating the Trust, Marriott cleaned up their books to statisfy with valuation/auditing rules.

First, the haircut ($700 mio) on the inventory (valued at building cost like the practice will say) and then moving it into the Trust (which is outside of their spinco company). I suspect that the only thing that remains on their books are a huge amount of points/ownership of the Trust (and maybe some lands for future developments, if any).

We can guess that the value per point in their books is approx. $3 to $3.5 per point. As long as they can show that they are selling points at $9-10, they are good.


----------



## jlepstein1

davidn247 said:


> Both statements are correct.
> 
> It is clear that, before creating the Trust, Marriott cleaned up their books to statisfy with valuation/auditing rules.
> 
> First, the haircut ($700 mio) on the inventory (valued at building cost like the practice will say) and then moving it into the Trust (which is outside of their spinco company). I suspect that the only thing that remains on their books are a huge amount of points/ownership of the Trust (and maybe some lands for future developments, if any).
> 
> We can guess that the value per point in their books is approx. $3 to $3.5 per point. As long as they can show that they are selling points at $9-10, they are good.


Agree.
I agree.  But can they sell points for $9-10?  I doubt it.  Sure, they can sell a few.  But sticking to that price in the age of Ebay, at at time when financing is very tight, and in the absence of any clarification about resale, means that their sales volume will tank.
They remind me of developers (and homeowners) who keep advertising homes for sale in 2011 with 2007 prices. The game can go on only so long, and then they capitulate.


----------



## Fastfitz

*No worries*

I don't understand why anyone would believe Marriott is getting out of the timeshare business. In the annual report letter to shareholders it specifically states that "Marriott" in the name of the new company. Why would the Marriott family risk their name with a product they didn't believe in?  MVCI will be better positioned to grow and serve it's members.


----------



## OldPantry

Fastfitz said:


> I don't understand why anyone would believe Marriott is getting out of the timeshare business. In the annual report letter to shareholders it specifically states that "Marriott" in the name of the new company. Why would the Marriott family risk their name with a product they didn't believe in?  MVCI will be better positioned to grow and serve it's members.


???  Couldn't you make the same point about Trump?  Look at all the stuff with his name that has gone belly up:  Trump Marina, Trump Taj Mahal, Trump Plaza (three times in bankruptcy), Trump Airlines (the Donald defaulted on loans, Trump Vodka (!), Trump Mortgage, Trump Tower Tampa ... the list goes on.  My point?  There's money to be made in licensing a name, and in a Spinco world, there's NO guarantee whatsoever that Marriott will stand behind the brand.  Marriott will collect the fees, and say a sad sayonara if Spinco crashes and burns.  Marriott could always rebound by launching Marriott: the Game (yes, that too was a moment of Trump genius).


----------



## pwrshift

OldPantry said:


> ???  Couldn't you make the same point about Trump?  Look at all the stuff with his name that has gone belly up:  Trump Marina, Trump Taj Mahal, Trump Plaza (three times in bankruptcy), Trump Airlines (the Donald defaulted on loans, Trump Vodka (!), Trump Mortgage, Trump Tower Tampa ... the list goes on.  My point?  There's money to be made in licensing a name, and in a Spinco world, there's NO guarantee whatsoever that Marriott will stand behind the brand.  Marriott will collect the fees, and say a sad sayonara if Spinco crashes and burns.  Marriott could always rebound by launching Marriott: the Game (yes, that too was a moment of Trump genius).



Add Trump Fort Lauderdale to the list!


----------



## linsj

*rumor*

I spoke with a Hilton salesman who specializes in owners' updates today. He said Hilton is looking at buying some of the Marriott properties, especially in Kauai and Maui, where Hilton doesn't have a presence. Since this came from a salesman, take it for what's it's worth. As a Hilton owner, I'd love to see this happen.


----------



## scrapngen

linsj said:


> I spoke with a Hilton salesman who specializes in owners' updates today. He said Hilton is looking at buying some of the Marriott properties, especially in Kauai and Maui, where Hilton doesn't have a presence. Since this came from a salesman, take it for what's it's worth. As a Hilton owner, I'd love to see this happen.



Don't hold your breath waiting...:hysterical: :hysterical:


----------



## linsj

scrapngen said:


> Don't hold your breath waiting...:hysterical: :hysterical:



I'm not! Hilton is in a building/buying mode though, unlike other TS companies.


----------



## dioxide45

The only thing that Hilton could buy would be the management contracts for these resorts. Marriott doesn't own the resorts, they are owned by individual owners. While there is some Marriott ownership in to common areas at the resort, they simply don't own the units.

The thing about the management contracts is that they are a guaranteed revenue stream. The owners cover all costs and Marriott takes a nice 10% pay check. They aren't about to give that up.


----------



## SueDonJ

Marriott has quite a few hotel "properties" on Kauai and Maui, too.  Hilton could just as easily be looking at any of those and not the timeshare resorts.  (If they are actually looking for Marriott properties to take over/convert, which is automatically suspect info if it's coming from a salesman.)


----------



## MikeM132

dioxide45 said:


> The only thing that Hilton could buy would be the management contracts for these resorts. Marriott doesn't own the resorts, they are owned by individual owners. While there is some Marriott ownership in to common areas at the resort, they simply don't own the units.
> 
> The thing about the management contracts is that they are a guaranteed revenue stream. The owners cover all costs and Marriott takes a nice 10% pay check. They aren't about to give that up.



Marriott could "walk away", but more realistically, they would have to be voted out for anyone else to take over. Hilton can't buy anything at any of the timeshare properties. Salesmen seem to get away with this BS when talking to timeshare novices.


----------

