# VAC 2/26/15 Earnings Call - Financial and Future Development Info



## SueDonJ (Feb 4, 2015)

marriottvacationsworldwide.com

"Marriott Vacations Worldwide Corporation (NYSE: VAC) will report financial results for the fourth quarter and full year 2014 before the market opens on February 26, 2015. A conference call is scheduled to follow at 10:00 a.m. ET to discuss the company’s results. ..."

A heads-up if you want to access the call ...


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## SueDonJ (Feb 13, 2015)

seekingalpha.com link:



> ORLANDO, Fla., Feb. 13, 2015 /PRNewswire/ -- Marriott Vacations Worldwide Corporation (NYSE: VAC) today announced its board of directors authorized a quarterly cash dividend of $0.25 per share of common stock payable on March 11, 2015 to shareholders of record as of February 26, 2015. ...


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## SueDonJ (Feb 26, 2015)

marriottvacationsworldwide.com

“2014 was a great year for Marriott Vacations Worldwide, with adjusted EBITDA of $200 million, adjusted free cash flow of nearly $300 million and over $210 million of capital returned to our shareholders. In addition, we delivered development margin of over 20 percent and disposed of more than $80 million of excess land and inventory,” said Stephen P. Weisz, president and chief executive officer. “With progress toward adding new destinations and sales distributions while delivering strong free cash flow, I am very excited about what the future holds for Marriott Vacations Worldwide in 2015 and beyond. ...”


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## JIMinNC (Feb 26, 2015)

> The company entered into commitments to purchase inventory at future dates in Miami, San Diego and the Big Island of Hawaii.
> 
> Subsequent to the end of the fourth quarter, the company entered into an asset light transaction with a third party which will develop the remaining units at the company’s resort on Marco Island, Florida, and sell the completed units to the company.



Something more concrete on future plans than salesman-speak


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## sparty (Feb 26, 2015)

JIMinNC said:


> Something more concrete on future plans than salesman-speak



Yeah this is huge! South Beach, San Diego - all great spots..


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## jeepie (Feb 26, 2015)

*Yes, but...*



SueDonJ said:


> marriottvacationsworldwide.com
> 
> “2014 was a great year for Marriott Vacations Worldwide, with adjusted EBITDA of $200 million, adjusted free cash flow of nearly $300 million and over $210 million of capital returned to our shareholders. In addition, we delivered development margin of over 20 percent and disposed of more than $80 million of excess land and inventory,” said Stephen P. Weisz, president and chief executive officer. “With progress toward adding new destinations and sales distributions while delivering strong free cash flow, I am very excited about what the future holds for Marriott Vacations Worldwide in 2015 and beyond. ...”


Revenue miss...
Stock down almost 2%.
Markets seem unimpressed.


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## rthib (Feb 26, 2015)

Link to transcript:
http://seekingalpha.com/article/295...z-on-q4-2014-results-earnings-call-transcript


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## JIMinNC (Feb 26, 2015)

In the Form 10-K that was also filed today, there was this additional detail:



> *Disposition and Conditional Future Purchase Commitment*
> In the first quarter of 2015, we sold real property located in Marco Island, Florida, consisting of $3 million of vacation ownership inventory, to a third party developer. We received consideration consisting of $5 million of cash and a note receivable of less than $1 million. We did not recognize any gain or loss on this transaction.
> 
> In accordance with the agreement with the third party developer, we have an obligation to repurchase the completed property from the developer contingent upon the property meeting our brand standards and provided that the third party developer has not sold the property to another party. Under the sale of real estate accounting guidance, our conditional obligation to repurchase the property constitutes continuing involvement and thus we were unable to account for this transaction as a sale. The property was sold to a variable interest entity for which we are not the primary beneficiary as we do not control the variable interest entity’s development activities and cannot prevent the variable interest entity from selling the property to another party. Accordingly, we will not consolidate the variable interest entity at inception.
> ...


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## sparty (Feb 26, 2015)

It's Weisz's comments I find interesting about the new resorts:

_In Miami, we have a commitment to purchase 182-unit property under construction in South Beach, scheduled to be completed in August of this year. We have also signed a letter of intent with a third party, who will purchase the property from the seller upon completion, giving us flexibility to acquire the inventory over the next several years in a more capital-efficient manner. In addition, we are targeting to open a new sales gallery in this market during the first half of next year._

This is the thing that really gets me. I had a lot of discussions with people inside the vacation club about what the split from Marriott WAS going to mean and how it related to me as a member of the vacation club.

I told them I felt I was one of many who would love to see exciting new resorts and was disappointed vacation club was shrinking and not expanding.  I was told by many inside Vacation Club the lack of expansion was due to the fact hotels was the money maker and any capital spend got allocated to the hotels and not the vacation club.  By splitting from Marriott, vacation club would manage the capital and they too wanted to get new destinations and grow the top line with new customers.  Once the split was complete - look out sparty - the new resorts would be rolling in..YEAH YEAH..  

Looking back on it - this was definitely NOT the case - but now there is some SMALL changes..In the message you can see they are very concerned about how they manage inventory/capital and how they will address their concerns, but the fact is they didn't tell the truth when the split - they knew capital spending was an issue but they said they would build new resorts despite the finance concerns that caused MAR from expanding... It's only now they have a solution they've decided they can live with and will start doing IMO smaller than promised resort expansions.


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## JIMinNC (Feb 26, 2015)

Here's the full text from the call as it relates to the new locations. I've included the discussion of Marco Island, San Diego, and Big Island, as well as the South Beach information already posted by sparty:


Equally exciting to note, we've also entered into our first asset-light transaction at our property on Marco Island, Florida. We sold our adjacent parcel of land to a third party who will, in turn, develop the property to specifications consistent with our brand standards. Once completed, we have a commitment to purchase those units beginning in 2017 on a schedule that meets our expected inventory needs.

We also expect to ramp up our sales distribution at Marco Island with the addition of the new units beginning in 2017.

In Miami, we have a commitment to purchase 182-unit property under construction in South Beach, scheduled to be completed in August of this year. We have also signed a letter of intent with a third party, who will purchase the property from the seller upon completion, giving us flexibility to acquire the inventory over the next several years in a more capital-efficient manner. In addition, we are targeting to open a new sales gallery in this market during the first half of next year.

Earlier this year -- earlier this month, excuse me, we closed on the purchase of a property in San Diego, a 264-unit former Marriott Suites Hotel located close to the Gaslamp district and the San Diego Zoo. We plan on delivering the first renovated units and a sales gallery by mid-2016.

Due to the short timeline for the closing of the transaction and the scope of the required renovations, our initial investment as well as future renovations will be carried on our balance sheet. However, we anticipate continuing operations of the hotel as we proceed with the renovations, which will help offset the cost of carrying this inventory until it is sold.

We are also excited to have a commitment to purchase a portion of the White Marriott Waikoloa Resort, which we plan to convert 240 guestrooms to 112 timeshare units. Located on the Big Island of Hawaii, this will be a beautiful addition to our existing collection of Hawaiian resorts on Oahu, Maui and Kauai.

As in Miami, we are pursuing an asset-light arrangement for this acquisition and subsequent conversion. We anticipate delivery of a new sales gallery in 2016 and converted units beginning in 2017.


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## JIMinNC (Feb 26, 2015)

A few other interesting stats from the 10-K filing:


 415,000 owners in 58 properties as of 1/2/2015 (this compares to 420,000 owners in 62 properties in January 2014. I assume the decline reflects the removal/sale of the Ritz Club in Jupiter, FL, The Buckingham in China, The Abaco Club in the Bahamas, and the Grand Residences by Marriott at BayPoint)
 139,000 weeks owners have enrolled 243,000 weeks into the Destination Club (this compares to 134,000 weeks owners enrolling 233,000 weeks a year ago)
 60% of 2014 sales were to existing owners, same as 2013
 Contract Sales in 2014 were $713 million compared to $694 million in 2013. North America represented $634 million in 2014 and $623 million in 2013.
 The number of sales tours declined by 1.5% from 2013. They attributed this to "an increase in weeks-based owner utilization of the MVCD program, with owners taking advantage of the program’s flexibility to take vacations of shorter duration and exercise alternative usage options. This trend has continued to reduce our existing owner tour flow because fewer owners are in our resorts, and their stays in our resorts are shorter than in prior years."


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## TheTimeTraveler (Feb 26, 2015)

Finally a little progress in adding some new timeshare properties/locations!



.


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## dioxide45 (Feb 26, 2015)

JIMinNC said:


> A few other interesting stats from the 10-K filing:
> 
> 
> 415,000 owners in 58 properties as of 1/2/2015 (this compares to 420,000 owners in 62 properties in January 2014. I assume the decline reflects the removal/sale of the Ritz Club in Jupiter, FL, The Buckingham in China, The Abaco Club in the Bahamas, and the Grand Residences by Marriott at BayPoint)



I was not aware that the Grande Residence by Marriott at BayPoint was no longer a MVCI managed property? Was this in the 10-K filing, or what your assumption is?


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## klpca (Feb 26, 2015)

Link to the info on the San Diego purchase. http://www.sddt.com/news/article.cfm?SourceCode=20150226tdb&_t=Marriott+buys+downtown+hotel+for+conversion#.VO_JZ_nF9XE


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## dioxide45 (Feb 26, 2015)

JIMinNC said:


> Here's the full text from the call as it relates to the new locations. I've included the discussion of Marco Island, San Diego, and Big Island, as well as the South Beach information already posted by sparty:
> 
> 
> Equally exciting to note, we've also entered into our first asset-light transaction at our property on Marco Island, Florida. We sold our adjacent parcel of land to a third party who will, in turn, develop the property to specifications consistent with our brand standards. Once completed, we have a commitment to purchase those units beginning in 2017 on a schedule that meets our expected inventory needs.
> ...



This is all rather good news to hear that MVCI is looking to expand its portfolio of properties. Not sure I understand how the transaction will work in Miami, seems kind of shifty. Though perhaps I don't understand how it works.

I am somewhat concerned about Marco Island. Are they going to use the original plans that MVCI had for the property? Will owners get what they were promised or will it be considerably different from original plans? "Consistent with our brand standards" means just about anything.

I do like that they are going asset light and getting other developers involved to take the initial financial risk. While the gains are not as big, they won't end up holding the bag if things go south like they did in 2008.


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## dioxide45 (Feb 26, 2015)

klpca said:


> Link to the info on the San Diego purchase. http://www.sddt.com/news/article.cfm?SourceCode=20150226tdb&_t=Marriott+buys+downtown+hotel+for+conversion#.VO_JZ_nF9XE



This is somewhat inconsistent from the earnings call. The article indicates it was a former Sheraton property and rebranded a Declan Suites San Diego but on the call they mentioned it being a Marriott Suites property.


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## JIMinNC (Feb 26, 2015)

dioxide45 said:


> I was not aware that the Grande Residence by Marriott at BayPoint was no longer a MVCI managed property? Was this in the 10-K filing, or what your assumption is?



BayPoint was no longer listed in the list of resorts that is in the 2014 10-K. So the number of resorts dropped by four, and the four that were missing from the list were the four I listed in the bullets in the post above.


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## Fasttr (Feb 26, 2015)

dioxide45 said:


> This is somewhat inconsistent from the earnings call. The article indicates it was a former Sheraton property and rebranded a Declan Suites San Diego but on the call they mentioned it being a Marriott Suites property.



Uncle Google says it was a Marriott Suites in 2001 and reflagged to a Sheraton Suites in 2002.


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## dioxide45 (Feb 26, 2015)

Fasttr said:


> Uncle Google says it was a Marriott Suites in 2001 and reflagged to a Sheraton Suites in 2002.



So their information was a little dated.


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## Fasttr (Feb 26, 2015)

dioxide45 said:


> So their information was a little dated.



Well....they did say "a 264-unit _*former*_ Marriott Suites Hotel". 

That's using the term loosly, but not technically incorrect.


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## JIMinNC (Feb 26, 2015)

dioxide45 said:


> Not sure I understand how the transaction will work in Miami, seems kind of shifty. Though perhaps I don't understand how it works.



The Q & A in the earnings conference call addresses your question to a degree for more color on the Miami strategy:

*QUESTION: Robert A. LaFleur - JMP Securities LLC, Research Division*
Okay. And then on the asset-light deals in Miami. You say that's a project that's under construction. What was -- what is it? Is it -- was it originally designed to be a hotel? Was it designed to be a timeshare? And then how does that work if you take down inventory on a just-in-time basis? Is that just in time as it's completed or just as -- just in time as you sell it? And if it's just in time as you sell it, what does that inventory do before you take it? Is it used for rentals or -- I'm just trying to understand how this project works.

*ANSWER: Stephen P. Weisz - Chief Executive Officer, President and Director*
Yes, Bob. Let me take the first part, and I'll let John answer the second part. The hotel was originally designed -- the property was originally designed as a hotel product. It is [indiscernible] Art Deco historic buildings in South Beach. And we are going to convert those to timeshare. They will be timeshare when we sell them. As far as how it's treated in terms of the asset-light, I'll let John talk about that.

*ANSWER: John E. Geller - Chief Financial Officer and Executive Vice President*
Sure. Yes. Assuming we're able to complete that with the third party, they would take out and own the hotel. We'd have commitment, Bob, to take down those completed units over time. We kind of stay away from the term "just in time" because we will buy that inventory when we need it to seed it into the trust, get it registered. As you're aware, timeshare being regulated, there's some hoops you got to jump through before you need it for sale. So we'll slate it in and buy it and then put it into the trust and get through that registration process. Before it's sold, it will be owned by the third party. They -- the way the structures work as we will most likely be hired to manage those -- the remaining inventory on their behalf during that whole period. And so they -- when we own it, the rentals for the stuff we own would be ours, but until we own it, that would be the third party.


As I read that, what it means is the third party buys the property and will own the units and receive any rental income until MVW buys the units over time to seed into the Trust. MVW will be hired to manage the property as part of the deal. That way MVW doesn't have to tie up its own capital waiting for 182 units to sell - they buy them from the third party as they need inventory, but through their management contract, they rent the units for the third party's benefit until they buy them for the Trust.


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## dioxide45 (Feb 26, 2015)

JIMinNC said:


> The Q & A in the earnings conference call addresses your question to a degree for more color on the Miami strategy:
> 
> *QUESTION: Robert A. LaFleur - JMP Securities LLC, Research Division*
> Okay. And then on the asset-light deals in Miami. You say that's a project that's under construction. What was -- what is it? Is it -- was it originally designed to be a hotel? Was it designed to be a timeshare? And then how does that work if you take down inventory on a just-in-time basis? Is that just in time as it's completed or just as -- just in time as you sell it? And if it's just in time as you sell it, what does that inventory do before you take it? Is it used for rentals or -- I'm just trying to understand how this project works.
> ...



Thanks for this. Definitely helps explain the mechanics of of how it will all work.


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## dioxide45 (Feb 26, 2015)

*Big Island Hawaii*

It seems that the Big Island property will only be guest rooms? So meaning only hotel style accommodation. Not sure that this is what many people would be looking for. I wonder how they will price these as far as DC points. I think in some of the other system, Hilton, the Big Island properties are cheaper than those on the more popular islands. I wonder if Marriott will follow suite or price them, points wise, the same as say a Ko'Olina or Maui studio.


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## JIMinNC (Feb 26, 2015)

dioxide45 said:


> It seems that the Big Island property will only be guest rooms? So meaning only hotel style accommodation. Not sure that this is what many people would be looking for. I wonder how they will price these as far as DC points. I think in some of the other system, Hilton, the Big Island properties are cheaper than those on the more popular islands. I wonder if Marriott will follow suite or price them, points wise, the same as say a Ko'Olina or Maui studio.



I don't think they will only be hotel rooms. The information says they will convert 240 guest rooms into 112 timeshare units. So my assumption was that this was going to be something like they did at Maui Ocean Club when they converted the original Marriott hotel to timeshare. Two hotel rooms would be combined to form a 1BR timeshare unit and three hotel rooms would be combined to create a 2BR unit (basically cutting a door in the wall between the rooms).

So if it was all 1BR units, the 240 would convert to 120 timeshare units. I did the math and the numbers that yield 112 timeshare units out of 240 hotel rooms is a mix of 96 1BR units and 16 2BR units [ (96x2) + (16X3) = 240 ]


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## DAman (Feb 26, 2015)

I'm underwhelmed by the San Diego location. 

Coronado near the existing Marriott would have been a great spot. Mission Bay as well. 

Even near Liberty Station where I thought Marriott already owned property to build a Nickelodeon themed hotel would be better.


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## Harry (Feb 26, 2015)

*Good assumption*



JIMinNC said:


> I don't think they will only be hotel rooms. The information says they will convert 240 guest rooms into 112 timeshare units. So my assumption was that this was going to be something like they did at Maui Ocean Club when they converted the original Marriott hotel to timeshare. Two hotel rooms would be combined to form a 1BR timeshare unit and three hotel rooms would be combined to create a 2BR unit (basically cutting a door in the wall between the rooms).
> 
> So if it was all 1BR units, the 240 would convert to 120 timeshare units. I did the math and the numbers that yield 112 timeshare units out of 240 hotel rooms is a mix of 96 1BR units and 16 2BR units [ (96x2) + (16X3) = 240 ]



Although the sales staff here in Maui did not out in out say this they certainly implied it. The resort on The Big Island is beautiful and back when Marriott acquired it we were surprised they did not convert at that point.

Harry


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## mjm1 (Feb 26, 2015)

Thanks for all who shared this information.

I am glad to see some movement on expanding to new areas. We visited the hotel on the Big Island a couple of years ago and really liked the grounds and what we saw of the hotel. I agree that it sounds like they will have a mix of different sized units. San Diego is a nice add even if the location within San Diego isn't ideal. And South Beach would be a nice place to go, even for only a few days along with stays at one or more of the other south Florida resorts.

I look forward to seeing how they actually build them out.

Mike


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## klpca (Feb 26, 2015)

DAman said:


> I'm underwhelmed by the San Diego location.
> 
> Coronado near the existing Marriott would have been a great spot. Mission Bay as well.
> 
> Even near Liberty Station where I thought Marriott already owned property to build a Nickelodeon themed hotel would be better.



Personally, I like it. It is close to the Gaslamp District, has good freeway access, is across the street from Symphony Hall, and just a block away from the trolley line - so a quick trip to Petco Park, the embarcadero, or Little Italy. It's a good urban location.


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## dioxide45 (Feb 27, 2015)

JIMinNC said:


> I don't think they will only be hotel rooms. The information says they will convert 240 guest rooms into 112 timeshare units. So my assumption was that this was going to be something like they did at Maui Ocean Club when they converted the original Marriott hotel to timeshare. Two hotel rooms would be combined to form a 1BR timeshare unit and three hotel rooms would be combined to create a 2BR unit (basically cutting a door in the wall between the rooms).
> 
> So if it was all 1BR units, the 240 would convert to 120 timeshare units. I did the math and the numbers that yield 112 timeshare units out of 240 hotel rooms is a mix of 96 1BR units and 16 2BR units [ (96x2) + (16X3) = 240 ]



This is good news, I missed that they were shrinking the number of units. Did not read that through enough I suppose. I just saw "guestroom"
 and thought the worst. Of course, the numbers could be different, as they increase the number of 2BR units by two, they would just have to decrease the number of 1BR units by one. I didn't pour through the math, but is it possible the ratio of 1BR to 2BR units is different than the numbers you suggest? Any chance of 3BR units?

I typically don't like hotel conversions unless they do it right. A full size kitchen is important, I missed that in the old towers at MOC.


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## Fasttr (Feb 27, 2015)

DAman said:


> I'm underwhelmed by the San Diego location.



I totally agree.  There's a reason that property has been reflagged several times.  Location, Location, Location.  Might be a place for a night or two while visiting the zoo, but beyond that.....


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## JIMinNC (Feb 27, 2015)

dioxide45 said:


> This is good news, I missed that they were shrinking the number of units. Did not read that through enough I suppose. I just saw "guestroom"
> and thought the worst. Of course, the numbers could be different, as they increase the number of 2BR units by two, they would just have to decrease the number of 1BR units by one. I didn't pour through the math, but is it possible the ratio of 1BR to 2BR units is different than the numbers you suggest? Any chance of 3BR units?
> 
> I typically don't like hotel conversions unless they do it right. A full size kitchen is important, I missed that in the old towers at MOC.



I would think that 3BR units might be unlikely in a hotel conversion since they are structurally limited by the shape of the existing hotel rooms (everything is purely side-by-side). With a 1BR or a 2BR each bedroom can be accessed direct from the living room. (In a 2BR the living room is the middle "room" and flanked on each side by a bedroom.) But a 3BR would require combining four hotel units, meaning that the third bedroom would have to be accessed by walking _through_ one of the other bedrooms. Doesn't sound like an attractive option. That's why I assumed all 1BR and 2BR like MOC.

They could certainly change the final number of units to something different than 112 if they determine through market analysis or pre-sales that the demand for 2BR units is either greater than or less than they estimate now. But if I recall my Algebra correctly, there is only one combination of 1BR and 2BR units that will yield _exactly_ 112 timeshare units made from 240 hotel units. The problem would be represented by these two equations:

3x + 2y = 240

Where x represents the number of 2BR units (because they are composed of 3 hotel units); and y the number of 1BR units made up of 2 hotel units.

and

x + y = 112

So first you solve for x:

x = 112-y

then, you apply that into the formula to solve for y:

3(112-y) + 2y = 240
336 - 3y + 2y = 240
336-y=240
336-240=y
96=y

Then you solve for x:

x + 96 =112
x = 112-96
x = 16


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## Fasttr (Feb 27, 2015)

JIMinNC said:


> I would think that 3BR units might be unlikely in a hotel conversion since they are structurally limited by the shape of the existing hotel rooms (everything is purely side-by-side). With a 1BR or a 2BR each bedroom can be accessed direct from the living room. (In a 2BR the living room is the middle "room" and flanked on each side by a bedroom.) But a 3BR would require combining four hotel units, meaning that the third bedroom would have to be accessed by walking _through_ one of the other bedrooms. Doesn't sound like an attractive option. That's why I assumed all 1BR and 2BR like MOC.
> 
> They could certainly change the final number of units to something different than 112 if they determine through market analysis or pre-sales that the demand for 2BR units is either greater than or less than they estimate now. But if I recall my Algebra correctly, there is only one combination of 1BR and 2BR units that will yield _exactly_ 112 timeshare units made from 240 hotel units. The problem would be represented by these two equations:
> 
> ...



SueDonJ's head just exploded!!!  

She so loves the math.


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## GregT (Feb 27, 2015)

This is an interesting location for the San Diego property -- I know it very well.  It is an unusual location -- it's central to everything, but not really suited for walking to restaurants.  I thought they'd put something directly in the Gaslamp and close to the ballpark.  This isn't really walking distance to those, or to the waterfront.   However, it's a great location for someone with a car that is driving places -- very easy freeway access and close to many prime tourist spots.

Best,

Greg


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## taffy19 (Feb 27, 2015)

Fasttr said:


> SueDonJ's head just exploded!!!
> 
> She so loves the math.



SueDonJ may not be the only one.  

It would be so nice to have a Marriott resort on the Big Island in the near future.


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## SueDonJ (Feb 27, 2015)

Fasttr said:


> SueDonJ's head just exploded!!!
> 
> She so loves the math.



HAHAHA!!  For a minute there I was back in high school, stumbling into class early Friday morning only to be greeted by a pop quiz for which I hadn't prepared!  #^&#!!


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## SueDonJ (Feb 27, 2015)

I'm glad to see them at least taking the first steps committing to new resorts, and that the method appears to open the door to the mixed-use properties that they talked about at the MVW outset.  That's what I think I'm reading anyway, that at least during the build-out interims there will be both timeshare and hotel units at individual properties?


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## sparty (Feb 27, 2015)

GregT said:


> This is an interesting location for the San Diego property -- I know it very well.  It is an unusual location -- it's central to everything, but not really suited for walking to restaurants.  I thought they'd put something directly in the Gaslamp and close to the ballpark.  This isn't really walking distance to those, or to the waterfront.   However, it's a great location for someone with a car that is driving places -- very easy freeway access and close to many prime tourist spots.
> 
> Best,
> 
> Greg



This is baffling.  Marriott seems to lack a *consistent *location strategy that includes being in "urban prime" locations where other TS's consistently offer urban prime locations.  South Beach seems prime, Grand Chateau is prime, but these are more exceptions making their strategy inconsistent.  What was Marriott doing in real estate development school when the teach  said location, location, location?


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## GregT (Feb 27, 2015)

All, 

I just looked at mapquest and this property is 10 blocks (about 0.5 mile) from the ballpark and restaurants and a little bit less to Horton Plaza for shopping.   

If someone is coming to San Diego to see the Zoo/Balboa Park/Sea World then they will prefer this location to being in the Gaslamp itself because freeway access is much better.   And there are restaurants that are closer than 0.5 mile walk, but the better restaurants are clearly the full stretch away.  I agree with others that Coronado would have been an ideal spot, but I think this location will make a lot of people happy for an SD visit.

Best,

Greg

Edited:  there is an adjacent office building that shares the lobby area with the new MVC-San Diego, and at the top of that building (Symphony Tower) is the University Club.   If any MVC owner has access rights to that Club (through its many sister clubs), the University Club has a spectacular view of San Diego Bay.  It's one of my favorite places to visit because of the view.


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## pwrshift (Feb 27, 2015)

I still miss the good old days when Marriott announced new resorts and weeks for sale.  On the other hand I'd probably now own 12 weeks if they did.


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## GregT (Feb 27, 2015)

All,

Has anyone stayed at the Waikoloa Marriott?   We stayed there for a single night when transitioning to the HGVC property there, but it literally was just an overnight so no real experience at the property.

I believe it is on A-Bay, and I know it has a decent pool facility -- not a super pool (ie, no slides/pirate ship/etc), but a good hotel pool.   The property is 533 rooms, per the internet, so they are converting almost half of the property to timeshares.  That's a big conversion and will be curious to see if this is a pattern that continues.   I know occupancy at the adjacent Hilton Waikoloa Village has been down since 2008, and they are trying to convert one of the towers (the Ocean Tower) to timeshares.   Perhaps occupancy is mixed at the Marriott as well, thus the significant conversion.

I'm happy to see Marriott expanding and think they've done it in ways that are creative.   Will hope to continue to see more.

Best,

Greg


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## Fasttr (Feb 27, 2015)

sparty said:


> This is baffling.  Marriott seems to lack a *consistent *location strategy that includes being in "urban prime" locations where other TS's consistently offer urban prime locations.  South Beach seems prime, Grand Chateau is prime, but these are more exceptions making their strategy inconsistent.  What was Marriott doing in real estate development school when the teach  said location, location, location?



I think expansion for MVC is more about gaining inventory cheaply and timely, rather than having a clear & consistent location strategy.  As long as they can use buzzwords like New Locations, Miami, San Diego, Big Island to add to the sales pitch, it gives them something extra to talk about, but the real driving factor is simply to feed the Trust with points, because they can't sell points that are not supported by inventory in the Trust....so if they can feed the trust with inventory that did not cost them as much as a prime location in San Diego as an example, its a win for VAC's sales machine and presumably their bottom line over the long haul.  

Remember, as Jeepie pointed out in post #6, the street was not impressed because of the Revenue miss.  Sales is what is motivating VAC right now, not owner happiness about their new locations.


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## BobG7734 (Feb 27, 2015)

Just hope that the Big Island configuration includes a full kitchen...not like the original Maui facility where two hotel rooms were slapped together!


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## JIMinNC (Feb 27, 2015)

rcgrogan said:


> Just hope that the Big Island configuration includes a full kitchen...not like the original Maui facility where two hotel rooms were slapped together!



That would certainly be ideal, but since this is a hotel conversion, they may not be able to get away from the fact that the hotel rooms are shaped like hotel rooms. 

The structural constraints in Waikoloa may be similar to Maui, but it HAS been 15 years, so maybe they've learned a way to do things differently. 

In Maui, they left the hotel room bathroom in place in the room that became the den, making the 1BR units all 1BR/2 Bath and the 2BR units 2BR/3 Bath. Just visualizing how they would reconfigure a hotel room to accommodate the living room AND a full kitchen, I would suspect they would have to be willing to completely rip out that hotel bathroom and take on the associated plumbing reconfiguration to use that space for the kitchen. That would be very expensive, so I guess we'll eventually see whether they think incurring that much reconfiguration expense would be worth it, and most importantly for them and their development partner - would they be able to recoup that additional renovation cost? These will not be weeks sales that can be priced higher independently of other resorts - the development cost gets blended into the Trust and impacts the price they have to charge for Trust Points for everyone who buys them.


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## dioxide45 (Feb 27, 2015)

JIMinNC said:


> I would think that 3BR units might be unlikely in a hotel conversion since they are structurally limited by the shape of the existing hotel rooms (everything is purely side-by-side). With a 1BR or a 2BR each bedroom can be accessed direct from the living room. (In a 2BR the living room is the middle "room" and flanked on each side by a bedroom.) But a 3BR would require combining four hotel units, meaning that the third bedroom would have to be accessed by walking _through_ one of the other bedrooms. Doesn't sound like an attractive option. That's why I assumed all 1BR and 2BR like MOC.
> 
> They could certainly change the final number of units to something different than 112 if they determine through market analysis or pre-sales that the demand for 2BR units is either greater than or less than they estimate now. But if I recall my Algebra correctly, there is only one combination of 1BR and 2BR units that will yield _exactly_ 112 timeshare units made from 240 hotel units. The problem would be represented by these two equations:
> 
> ...



Thanks for doing the math. I had the same thought as Fasttr about Sue when I saw this. This would be the most likely scenario unless they also somehow convert hotel rooms in to common areas or pull a fast one like they did at Crystal Shores. I think there they used four individual hotel rooms to make a 2BR, but I don't see them doing that in the Big Island. Your number seems like the most likely scenario.


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## dioxide45 (Feb 27, 2015)

pwrshift said:


> I still miss the good old days when Marriott announced new resorts and weeks for sale.  On the other hand I'd probably now own 12 weeks if they did.



I would have to agree. A lot less fan fare perhaps because they aren't selling individual properties, no pre-construction pricing, not special offers for buying in advance, no great amounts of MR incentive points to buy pre-construction, and MR points in lieu of use years that you don't het. Like they hat at Lakeshore Reserve. Not that we bought any of those, but it was interesting to see those different offers. Now the deal is the same and everything is per point.


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## mjm1 (Feb 27, 2015)

GregT said:


> All,
> 
> Has anyone stayed at the Waikoloa Marriott?   We stayed there for a single night when transitioning to the HGVC property there, but it literally was just an overnight so no real experience at the property.
> 
> ...



Greg, we didn't stay there but we visited it twice during our stay in Kona a couple years ago. We really enjoyed the atmosphere on site. Nice open air 
lobby and bar areas, nice grounds including the historical lagoons, cat alley or whatever it is referred to (lots of wild cats), and amazing sunsets. Unfortunately, we didn't experience the rooms, which you did for one night.

Depending how they create the new design of the rooms, this should be a very nice resort. I wouldn't mind if they don't have a full kitchen as long as they have a small one like Westin or Welk. A full size frig, a two burner stove top, and a microwave would work. 

One would hope they would survey Trust and enrolled owners to get feedback on what we would like to see in these new properties. Not that they would accommodate everything, but they would get a sense of what is most important.

Mike


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## FractionalTraveler (Feb 27, 2015)

*New San Diego Timeshare Reported*

http://www.hotelmanagement.net/investment/marriott-ownership-resorts-buys-san-diego-sheraton-30442

We will see how well this conversion comes out.

FT


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## IuLiKa (Feb 27, 2015)

I believe this is the san diego sheraton and marina. Its close to the airport and pretty close to downtown. Lets see what happens.


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## Werner Weiss (Feb 28, 2015)

dioxide45 said:


> This is somewhat inconsistent from the earnings call. The article indicates it was a former Sheraton property and rebranded a Declan Suites San Diego but on the call they mentioned it being a Marriott Suites property.



I stayed at the Marriott Suites San Diego Downtown at Symphony Towers before it was rebranded as the Sheraton Suites San Diego at Symphony Hall. Every room was a small 2-room suite with a living room and bedroom — smaller than the suites at Marriott's Custom House, if I remember correctly.

The location at 701 A Street in San Diego is definitely a downtown location, not a waterfront location. The hotel is not a resort, and there's really nothing VAC can do to make it into a true resort. However, I would gladly use Destination Club points there, as long as the point chart is reasonable, for a vacation after the suites are reconfigured as Marriott Vacation Club units with kitchenettes. 

The location is very central. The zoo is less than 2 miles away. The Gaslamp Quarter starts a few blocks southwest of the hotel (and stretches south from there).


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## Werner Weiss (Feb 28, 2015)

The name of this thread is currently "VAC 2/26/15 Earnings Call - 4th QTR and FY 2014." That suggests that's it's only about financial matters.

It would be much better if the thread could be given a meaningful name, such as "Additional Vacation Club locations revealed on Marriott Vacations Worldwide earnings call."


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## dioxide45 (Feb 28, 2015)

Werner Weiss said:


> The name of this thread is currently "VAC 2/26/15 Earnings Call - 4th QTR and FY 2014." That suggests that's it's only about financial matters.
> 
> It would be much better if the thread could be given a meaningful name, such as "Additional Vacation Club locations revealed on Marriott Vacations Worldwide earnings call."



Perhaps if the information related to new locations could be separated out in to its own thread and the financials kept here?


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## Big Matt (Feb 28, 2015)

I think that things changed a few years ago.  Remember that they haven't built anything in a really long time.

My guess is that they are going after financially distressed projects and/or low priced sales of existing properties.  

Additionally they appear to be combining timeshare units with other units in the same property.  Maybe Newco owns some and the other party owns some.  Marriott is doing the same thing on the hotel side with multiple brands in the same building.

From a business perspective this is a very good strategy.  People will still go to these places.



sparty said:


> This is baffling.  Marriott seems to lack a *consistent *location strategy that includes being in "urban prime" locations where other TS's consistently offer urban prime locations.  South Beach seems prime, Grand Chateau is prime, but these are more exceptions making their strategy inconsistent.  What was Marriott doing in real estate development school when the teach  said location, location, location?


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## amycurl (Feb 28, 2015)

One of the "associated" links on the page of the industry article that was just posted was about the sale of the Marriott in Grand Cayman. Now *that's* a destination I would love to see a MVC resort at--with the popularity of the Aruba resorts, it seems odd to me that they wouldn't take advantage of this opportunity as well.


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## dioxide45 (Feb 28, 2015)

Big Matt said:


> I think that things changed a few years ago.  Remember that they haven't built anything in a really long time.
> 
> My guess is that they are going after financially distressed projects and/or low priced sales of existing properties.
> 
> ...



It sounds like the ultimate goal though is to make all of the properties 100% vacation ownership over time. They would only be hotel/vacation ownership during an interim period when they are selling the converted units to the trust. I think they will be branded from day one as a Vacation Club property, but nights will be rented on Marriott.com with income going to the investor putting up the cash, not VAC. I think this will cause some issues and confusion early on. People will book a cash stay on Marriott.com and show up at a vacation club property and stay in a room that perhaps hasn't been renovated to current MVC standards. Arriving at a mutli-branded property in a single tower has different issues. Marriott has several multi-branded properties that I am aware of. We have stayed at Marriott Village in Orlando where there are three hotels (Springhill Suites, Fairfield Inn and Courtyard). The key with this though is that each is a separate building, not two brands in the same building.


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## Big Matt (Feb 28, 2015)

We'll see once some of the projects are complete.  My references are to more urban locations where high rises have more than one tenant/brand.  An example is in New Orleans.  The Courtyard Downtown Iberville is in the same building as the Ritz Carlton.  Both have their own entry ways.



dioxide45 said:


> It sounds like the ultimate goal though is to make all of the properties 100% vacation ownership over time. They would only be hotel/vacation ownership during an interim period when they are selling the converted units to the trust. I think they will be branded from day one as a Vacation Club property, but nights will be rented on Marriott.com with income going to the investor putting up the cash, not VAC. I think this will cause some issues and confusion early on. People will book a cash stay on Marriott.com and show up at a vacation club property and stay in a room that perhaps hasn't been renovated to current MVC standards. Arriving at a mutli-branded property in a single tower has different issues. Marriott has several multi-branded properties that I am aware of. We have stayed at Marriott Village in Orlando where there are three hotels (Springhill Suites, Fairfield Inn and Courtyard). The key with this though is that each is a separate building, not two brands in the same building.


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## rickxylon (Feb 28, 2015)

amycurl said:


> One of the "associated" links on the page of the industry article that was just posted was about the sale of the Marriott in Grand Cayman. Now *that's* a destination I would love to see a MVC resort at--with the popularity of the Aruba resorts, it seems odd to me that they wouldn't take advantage of this opportunity as well.



I wonder if VAC would be a potential buyer? That would be fantastic!!


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## GregT (Feb 28, 2015)

amycurl said:


> One of the "associated" links on the page of the industry article that was just posted was about the sale of the Marriott in Grand Cayman. Now *that's* a destination I would love to see a MVC resort at--with the popularity of the Aruba resorts, it seems odd to me that they wouldn't take advantage of this opportunity as well.



That is interesting -- and yes, Grand Cayman would be a great addition to the portfolio.

Internet search found this article confirming that it was up for sale.  It indicates a 72% average occupancy last year.

I do wonder why more Marriott hotel owners don't convert a portion of their property to timeshare and then sell them.  If 72% average occupancy is consistent year-to-year, why not take 25% of the property and convert them to timeshares?

This is what I think we are seeing on the Big Island for both HGVC Waikoloa and now for Marriott, converting the excess capacity (and related operating and renovation costs) to timeshares.

Fun to speculate....

Best,

Greg


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## Superchief (Feb 28, 2015)

Although I am happy that there will be an option in the future in San Diego, I would prefer more of a resort type property rather than urban hotel. This doesn't look like it would have beach access or nice pool faclities, so it will be more appropriate for shorter stays. I'll probably add 1-2 nights there after a week in Newport Coast.

Since it is in the city I expect parking to be very expensive. Therefore public transportation options to the zoo and restaurants will be important.


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## Wally3433 (Feb 28, 2015)

The San Diego location/property makes no sense to me.

I looks like a jail.


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## Werner Weiss (Feb 28, 2015)

dioxide45 said:


> It sounds like the ultimate goal though is to make all of the properties 100% vacation ownership over time. They would only be hotel/vacation ownership during an interim period when they are selling the converted units to the trust. I think they will be branded from day one as a Vacation Club property, but nights will be rented on Marriott.com with income going to the investor putting up the cash, not VAC.


That's what I expect too. It's not significantly different than how it's been in the past. Back when Marriott International owned Marriott Vacation Club and built most new resorts from the ground up, unsold inventory was rented out through Marriott.com and II Getaways. Also, owner weeks turned in for Marriott Rewards points were rented out. Even at sold-out resorts, nights were (and still are) often available on Marriott.com.

I expect the undeclared inventory to be renovated to Marriott Vacation Club standards before it is rented out under the Marriott Vacation Club brand.

I don't expect a temporary, separately-branded hotel in the same building, with that hotel somehow "shrinking" as inventory is declared into the Marriott Vacation Club condominium. 

But I do expect combination properties, along the lines of Marriott's Kauai Beach Club. Fewer than half the rooms at the Waikoloa Beach Marriott Resort & Spa are involved in the Marriott Vacation Club conversion.


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## dioxide45 (Feb 28, 2015)

Werner Weiss said:


> That's what I expect too. It's not significantly different than how it's been in the past. Back when Marriott International owned Marriott Vacation Club and built most new resorts from the ground up, unsold inventory was rented out through Marriott.com and II Getaways. Also, owner weeks turned in for Marriott Rewards points were rented out. Even at sold-out resorts, nights were (and still are) often available on Marriott.com.
> 
> I expect the undeclared inventory to be renovated to Marriott Vacation Club standards before it is rented out under the Marriott Vacation Club brand.
> 
> ...



I do think the Waikoloa property will be much like Kauai Beach Club and St Kitts. Whereas there is a hotel brand and MVC brand at the same property. It seems though that the goal of the other two, Miami and San Diego, is to end up with a 100% MVC property.


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## Werner Weiss (Feb 28, 2015)

Superchief said:


> Although I am happy that there will be an option in the future in San Diego, I would prefer more of a resort type property rather than urban hotel. This doesn't look like it would have beach access or nice pool faclities, so it will be more appropriate for shorter stays. I'll probably add 1-2 nights there after a week in Newport Coast.



I'm sure that it ultimately came down to a financial decision. VAC probably bought the Marriott/Sheraton/Declan Suites property for far less than the replacement cost of the building. The real estate value of hotels is based on their potential return on investment. I doubt Declan Suites was doing well.



Superchief said:


> Since it is in the city I expect parking to be very expensive. Therefore public transportation options to the zoo and restaurants will be important.



According to Emporis, the building has 650 parking spaces. When I stayed there in the 1990s (then called Marriott Suites), parking was free for guests. Of course, free parking at downtown hotels has become a rarity since then. I would not be surprised if Marriott Vacation Club owners will get free parking, but nightly guests will pay for parking.

The bad thing about the parking structure is that it requires using narrow spiral ramps to get up to and down from the parking levels. When I stayed there, my rental car was a Lincoln Towncar. Driving on the ramp, I felt both side of the wide car were at risk if I didn't stay in the exact center of the ramp.

For anyone willing to walk to the Gaslamp Quarter, there are plenty of restaurants. Balboa Park is in walking distance. The hotel is on A Street and the San Diego Trolley runs down C Street.



Wally3433 said:


> It looks like a jail.



The lobby is on the 12th floor. The levels below that (with the prison-like slit windows) are parking. The hotel floors have big picture windows.


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## NYFLTRAVELER (Mar 1, 2015)

I for one am not into the "urban" locations (other than LV).  I bought into the MVCI product for the "resort like" setting and activities.... 

As for the South Beach location, one of the quotes from the call was "They will be timeshare when we sell them."  QUESTIONS: (1) Will there be resort-like amenities here such as a pool and activities for guests? (2) Where specifically is this location and (3) Who are they selling to?  Given that MVCI is pushing the DC program are they still going to sell individual weeks at these new properties? Please explain?  

As for the San Diego location, I have been to San Diego once, a few general QUESTIONS: (1) Will there be resort-like amenities here such as a pool and activities for guests? (2) Is the area where this is located considered safe and clean (e.g. for walking around the city, to/from Balboa Park, to/from Gaslamp Restaurants, PetCo, etc...(3) Again are they selling weeks or acquiring this for the DC points trust?

Any input/feedback would be greatly appreciated.


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## JIMinNC (Mar 1, 2015)

NYFLTRAVELER said:


> Again are they selling weeks or acquiring this for the DC points trust?



Given that Marriott is no longer selling weeks in the U.S. I think everyone expects these will all go into the Trust to support points sales. No more weeks except for resale. If you look at the quote from the call in post #21 above, you will see he refers to seeding the units into the Trust.


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## Werner Weiss (Mar 1, 2015)

NYFLTRAVELER said:


> I for one am not into the "urban" locations (other than LV).  I bought into the MVCI product for the "resort like" setting and activities....


From my perspective, it's wonderful to have Marriott Vacation Club options for city vacations, not just for beach, golf, and skiing vacations. It's not for everyone, but beaches, golf, and skiing aren't for everyone either. I consider city vacations to be great use of DC points. We've used points to stay at Marriott's Custom House in Boston and the Ritz-Carlton Club in San Francisco.



NYFLTRAVELER said:


> As for the South Beach location, one of the quotes from the call was "They will be timeshare when we sell them."  QUESTIONS: (1) Will there be resort-like amenities here such as a pool and activities for guests? (2) Where specifically is this location and (3) Who are they selling to?  Given that MVCI is pushing the DC program are they still going to sell individual weeks at these new properties? Please explain?


Although Marriott revealed the exact properties on the Big Island and in San Diego, that's not the case for Miami. In post #8 of this thread, sparty quoted Stephen Weisz saying, "In Miami, we have a commitment to purchase 182-unit property under construction in South Beach, scheduled to be completed in August of this year."

I tried a bunch of Google searches to find such a building under construction in South Beach. I was unsuccessful. I did find a 182-unit condo property under construction in Hallandale Beach, about 16 miles north of South Beach, but I don't think that's it. Weisz said South Beach, not Hallandale Beach.

Perhaps someone else here can figure out the building.

Just as we don't know the location, we don't know the amenities. However, given that it will be a vacation property in southern Florida, I think it's safe to expect a pool. However, considering the limited real estate in South Beach, I would not expect spacious grounds.

Marriott Vacations Worldwide (VAC) is committed to selling Destination Club points, not traditional weeks, in the United States (except for resale weeks). I would expect the Miami property to be sold as part of the Trust. It strengthens the portfolio and provides another location for a sales gallery.



NYFLTRAVELER said:


> As for the San Diego location, I have been to San Diego once, a few general QUESTIONS: (1) Will there be resort-like amenities here such as a pool and activities for guests? (2) Is the area where this is located considered safe and clean (e.g. for walking around the city, to/from Balboa Park, to/from Gaslamp Restaurants, PetCo, etc...(3) Again are they selling weeks or acquiring this for the DC points trust?



The San Diego property was built in 1990 as a high-rise, all-suite downtown hotel. It has a small indoor pool. I don't see an opportunity to make significant physical changes to the tower. But I would expect the 425-sq.-ft., 2-room suites to be reconfigured to make them somewhat more like vacation villas. Perhaps there will be limited kitchens, similar to the ones at Marriott's Custom House.

It's been years since I walked around that part of San Diego, but it seemed like a nice downtown to me. As in any large American downtown (or any vacation destination, for that matter), I would exercise normal care to avoid being the target of a crime.

Again, VAC is now a seller of points, not weeks.


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## GregT (Mar 1, 2015)

NYFLTRAVELER said:


> As for the San Diego location, I have been to San Diego once, a few general QUESTIONS: (1) Will there be resort-like amenities here such as a pool and activities for guests? (2) Is the area where this is located considered safe and clean (e.g. for walking around the city, to/from Balboa Park, to/from Gaslamp Restaurants, PetCo, etc...(3) Again are they selling weeks or acquiring this for the DC points trust?



With respect to the San Diego property, I agree with Werner that it will not be possible to make a significant change to the property (space is at a premium in downtown) and therefore the existing indoor pool is all that I expect to remain.  

With respect to safety, I believe it is safe to walk down to/from the Gaslamp and Petco -- downtown is generally very safe..  The proximity to Balboa Park is good, but I personally would not walk it.  It is not that close and I would not walk it at night time.   Whereas downtown is well lit and well patrolled, the stretch from Balboa Park to the new MVC-San Diego is less so.  But very very easy drive.

Best,

Greg


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## GaryDouglas (Mar 1, 2015)

Werner Weiss said:


> Perhaps someone else here can figure out the building.



Here's a clue from Stephen Weisz earlier in this thread...
"Art Deco historic buildings in South Beach."


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## BobG7734 (Mar 2, 2015)

Looks like a lot of analysts like what VAC is doing....up 3% to 79 today and short interst is very low!


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## Cobra1950 (Mar 3, 2015)

Having sat though a Marriott VCP presentation in Mountainside yesterday, was nice to see confirmation of new properties.  Did not bite on new points addition but might just when all dust settled:whoopie:


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## BocaBoy (Apr 22, 2015)

GregT said:


> Has anyone stayed at the Waikoloa Marriott?   We stayed there for a single night when transitioning to the HGVC property there, but it literally was just an overnight so no real experience at the property.



We spent a week (or maybe it was 5 nights) there a few years ago, and enjoyed our stay.  It is a nice resort, but not one of Marriott's most luxurious resorts.  It can't compare to the Wailea Beach Marriott resort on Maui, for example.  Having said that, it is very nice and I think it will make a worthy addition to the MVCI system if they do a high quality conversion like they did in Maui.  I think they learned what doesn't work in the KBC conversion, such as 1BR units that lock off.


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## b2bailey (Apr 22, 2015)

Werner Weiss said:


> The bad thing about the parking structure is that it requires using narrow spiral ramps to get up to and down from the parking levels. When I stayed there, my rental car was a Lincoln Towncar. Driving on the ramp, I felt both side of the wide car were at risk if I didn't stay in the exact center of the ramp.
> 
> = =
> 
> ...


----------



## puckmanfl (Apr 22, 2015)

good morning...

not to be a negative nellie...

but we are almost 5 years into the new MVCD and DC, with not a single new property to be seen or officially announced..!!!!


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## rthib (Apr 22, 2015)

puckmanfl said:


> with not a single new property to be seen or officially announced..!!!!



Do you even read this thread?

During the Feb call Marriott officially announced new properties.


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## BocaBoy (Apr 22, 2015)

b2bailey said:


> Werner Weiss said:
> 
> 
> > The bad thing about the parking structure is that it requires using narrow spiral ramps to get up to and down from the parking levels. When I stayed there, my rental car was a Lincoln Towncar. Driving on the ramp, I felt both side of the wide car were at risk if I didn't stay in the exact center of the ramp.
> ...


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## BocaBoy (Apr 22, 2015)

Fasttr said:


> Uncle Google says it was a Marriott Suites in 2001 and reflagged to a Sheraton Suites in 2002.





dioxide45 said:


> So their information was a little dated.



I actually think it was good MVCI described it as a former Marriott Suites property.  Because it was built as a Marriott Suites, knowing it was formerly that brand lets me know what the rooms are like.


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## Werner Weiss (Apr 22, 2015)

BocaBoy said:


> At first I thought you were responding to my comments on the Waikoloa Marriott, but they don't have a parking structure like that.  It was not clear to me at first, but I finally figured out that you were referring to the San Diego property.


My comments about parking at the San Diego location are from post #62 on February 28, 2015. The post provides more context about San Diego.

I wonder when we'll get more details about the three new locations. The announcement was for a financial audience, not for Marriott Vacation Club owners. I realize that there are state-by-state  legal requirements, so Marriott Vacations Worldwide (VAC) has to be careful with anything that could be considered on offer to sell the new locations.


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## cp73 (Jun 20, 2015)

*Hawaii Big Island Conversion*

I just saw this....looks like Big Island will finally happen. I didn't realize hotel had been sold to new investors. Are they converting all the rooms?

http://www.bizjournals.com/pacific/news/2015/06/19/marriott-vacations-buying-240-rooms-at-hawaii.html


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## PamMo (Jun 20, 2015)

Nice! The location beside "A" Beach is going to make this a high demand timeshare on the Big Island. The hotel was getting tired, hopefully converting it to timeshares and updating everything will bring it back to life. It will definitely go on my list of timeshares to visit!


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## taterhed (Jun 20, 2015)

It's been discussed for a while...news on this and Austrailia (and others)  announced at last meeting...

http://www.tugbbs.com/forums/showthread.php?t=227098


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## SueDonJ (Jun 20, 2015)

taterhed said:


> It's been discussed for a while...news on this and Austrailia (and others)  announced at last meeting...
> 
> http://www.tugbbs.com/forums/showthread.php?t=227098



Discussed in more detail in this thread begun in February, so threads have been merged.


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## GregT (Jun 20, 2015)

cp73 said:


> I just saw this....looks like Big Island will finally happen. I didn't realize hotel had been sold to new investors. Are they converting all the rooms?
> 
> http://www.bizjournals.com/pacific/news/2015/06/19/marriott-vacations-buying-240-rooms-at-hawaii.html



Interesting information in this article.

So, they are buying the rights to 240 rooms for $38.5M, and expect to pay $45M - $55M for renovation.  Using the high end, that means they will invest $93.5M for the new property.

I recall that we thought they would take the 240 rooms, and make them into 96 1BR units and 16 2BR units, yielding the 112 total units.

When they deposit those weeks to the Trust, if they value a 1BR unit at 4,000 points, and a 2BR unit at 6,500 points, and we assume 50 weeks, that means they will generate 24.4M points.

So, if they pay $93.5M for a property that generates 24.4M in points, that means their inventory cost is $3.83 per point.

The big assumption here, naturally, is the number of points they ascribe to the weeks they deposit.  They could ascribe a higher point value, and get a lower cost per point.

If they use 5,000 and 7,500 points instead, the price per point drops to $3.11 per point (and generates 30M points).  If they use 6,000 and 9,000, it drops to $2.59 per point (and generates 36M points).

Interesting stuff.

Best,

Greg


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## m61376 (Jun 20, 2015)

It is interesting- and I will be curious to see how they apportion the point values. There has to be some basis in reality though. Even at your low estimate of 4000 points, that means that they'd be charging in excess of 60K for a 1 BR, since points are now over $12 each, and in the 80K area for a 2BR. Given the annual MF, I don't think the model can support more than that and still be marketable, but I guess time will tell.


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## Ralph Sir Edward (Jun 20, 2015)

GregT said:


> Interesting information in this article.
> 
> So, they are buying the rights to 240 rooms for $38.5M, and expect to pay $45M - $55M for renovation.  Using the high end, that means they will invest $93.5M for the new property.
> 
> ...



It gives each unit a cost of arournd $830,000 USD, blended. 

At a blended cost of 70K per week, A sellout of 50 week per year would net $3,500,000 USD per unit, or around a 4X return on developement.
[/QUOTE]


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## GaryDouglas (Jun 20, 2015)

cp73 said:


> I just saw this....looks like Big Island will finally happen. I didn't realize hotel had been sold to new investors. Are they converting all the rooms?



I remember mentioning the new Big Island acquisition to my sales rep at MOC a few weeks ago with my understanding it was a conversion that was planned and she corrected me by saying it's purpose built.  We probably won't know for sure until the plans are submitted to the building department, but I wouldn't be surprised if this turns out to be a conversion and purpose built, but at least initially, it's going to be a conversion.... time will tell.


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## dioxide45 (Jun 20, 2015)

GaryDouglas said:


> I remember mentioning the new Big Island acquisition to my sales rep at MOC a few weeks ago with my understanding it was a conversion that was planned and she corrected me by saying it's purpose built.  We probably won't know for sure until the plans are submitted to the building department, but I wouldn't be surprised if this turns out to be a conversion and purpose built, but at least initially, it's going to be a conversion.... time will tell.



This is from post #10 of this thread.



> We are also excited to have a commitment to purchase a portion of the White Marriott Waikoloa Resort, which we plan to convert 240 guestrooms to 112 timeshare units. Located on the Big Island of Hawaii, this will be a beautiful addition to our existing collection of Hawaiian resorts on Oahu, Maui and Kauai.



So it is definitely a conversion. Likely much easier to get through than a new purpose built. A lot cheaper too. While there may be extra land there, I am not sure that MVCI is buying extra land, just the building that they will be converting. I think this will be a lot like Kauai Beach Club.


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## NYFLTRAVELER (Jun 20, 2015)

A dedicated MVC Resort in Mexico (e.g. Cancun) and Bahamas would be a plus.

What is the latest on the supposed "South Beach" resort and the "San Diego" property which they were converting?


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## Werner Weiss (Jun 20, 2015)

NYFLTRAVELER said:


> What is the latest on the supposed "South Beach" resort and the "San Diego" property which they were converting?


Back on the Marriott Vacations Worldwide (VAC) 2/26/15 Earnings Call, Stephen Weisz said, "In Miami, we have a commitment to purchase 182-unit property under construction in South Beach, scheduled to be completed in August of this year."

Then on the VAC Q1 2015 Results Earnings Call (5/3/2015), Weisz said this: "We're having ongoing discussions with third parties regarding asset-light transactions at both Waikoloa and Miami. As both are planned to close later this year, I look forward to updating you on their progress in later quarters as we begin to ramp up sales centers in these new destinations."

There was recently (6/19/2015) news about Waikoloa: http://www.bizjournals.com/pacific/...ott-vacations-buying-240-rooms-at-hawaii.html

But I haven't seen anything recent about Miami South Beach.

In another thread here on TUGBBS, I offered this speculation about Miami South Beach:

Could this be the "182-unit property under construction in South Beach" that Stephen Weisz announced during the Marriott Vacations Worldwide (VAC) earnings call on 02/26/2015?

http://www.witkoff.com/portfolio?property_id=50

The developer's web page describes one of their current redevelopment projects as a "181-key 4-star boutique hotel in the South Beach neighborhood of Miami Beach, Florida." That's the right location, the right timing, and essentially the right room count. It also matches Weisz's reference to "Art Deco historic buildings in South Beach." 

The current website for the Washington Park Hotel (http://www.washingtonparkhotel.com) appears to be stalled, as if plans have changed. It still says "Opening Early 2015" and there are no details about rooms or an opening date or a way to make reservations. That makes it seems that it won't ever open at the originally-envisioned Washington Park Hotel, but under different management — possibly Marriott Vacation Club.​
San Diego appears to be a sure thing. Marriott Vacation Worldwide owns the Declan Suites hotel. According to Marriott Vacations Worldwide (VAC) Reports First Quarter 2015 Financial Results (April 30, 2015): "The company completed its acquisition of an operating hotel located in San Diego, California, for approximately $55 million. The company plans to begin converting the hotel to vacation ownership inventory later this year."

I haven't seen any news since then. It will be interesting to see how VAC will convert the current hotel-style 425-sq.ft. one-bedroom suites into one-bedroom "villas" what meet the expectations of Marriott Vacation Club owners.


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## NYFLTRAVELER (Jun 20, 2015)

Werner Weiss said:


> San Diego appears to be a sure thing. Marriott Vacation Worldwide owns the Declan Suites hotel. According to Marriott Vacations Worldwide (VAC) Reports First Quarter 2015 Financial Results (April 30, 2015): "The company completed its acquisition of an operating hotel located in San Diego, California, for approximately $55 million. The company plans to begin converting the hotel to vacation ownership inventory later this year."
> 
> I haven't seen any news since then. It will be interesting to see how VAC will convert the current hotel-style 425-sq.ft. one-bedroom suites into one-bedroom "villas" what meet the expectations of Marriott Vacation Club owners.



I would hope they would have a 2 BR setup here as well.  Also what about recreational facilities at this property such as activities for guests, a pool/rooftop lounge?  Otherwise this is really no different than a mid-city Embassy Suites type property.


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## Werner Weiss (Jun 20, 2015)

NYFLTRAVELER said:


> I would hope they would have a 2 BR setup here as well.  Also what about recreational facilities at this property such as activities for guests, a pool/rooftop lounge?  Otherwise this is really no different than a mid-city Embassy Suites type property.


VAC hasn't announced how the "villas" in San Diego will be configured. At this point, I can only make guesses.

The property currently consists entirely of 425 sq. ft. one-bedroom suites. There are 264 of them. Suite pricing currently varies for three view categories: Traditional, Premier View, and Deluxe View.

The simplest thing for VAC would be to configure 264 suites to be somewhat like those at Marriott's Custom House. The precedent at Custom House is that all "villas" there are one-bedroom suites with limited kitchens. Sizes at Custom House vary because it was an existing building with different-sized floors. There are no view categories at Custom House.

The only time I stayed at what is now Declan Suites was way back when t was a Marriott Suites hotel.

I hope that VAC will make a major effort to transform the property into a place that feels like a vacation resort, not a traditional all-suite hotel. But there's only so much VAC can do with the building and its limitations.


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## dioxide45 (Jun 21, 2015)

Werner Weiss said:


> VAC hasn't announced how the "villas" in San Diego will be configured. At this point, I can only make guesses.
> 
> The property currently consists entirely of 425 sq. ft. one-bedroom suites. There are 264 of them. Suite pricing currently varies for three view categories: Traditional, Premier View, and Deluxe View.
> 
> ...



I suppose they could turn two of the 425 sq. ft units in to one 850 sq. ft. unit and make it about the same size as the standard Marriott Vacation Club 1BR unit. Not sure if they will go that route or not. That would be the right way to do it to meet the expectations that Marriott owners have in a 1BR unit at a MVCI property.

This would cut them down to only 132 units in the new property but would probably make the units a little more like those at Custom House. Though they would be larger and perhaps they could even put in a full kitchen. I think the problem with a full kitchen is providing the proper venting necessary in a structure that may not be able to support it.


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## puckmanfl (Jun 21, 2015)

good afternoon

Sounds like they are converting the San Diego Property to a "Residence Inn"...

just saying!!!


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## rovitm (Jun 21, 2015)

puckmanfl said:


> good afternoon
> 
> 
> 
> ...




Without the free breakfast.  I'm curious to see what it looks like but it doesn't sound like it would be my first choice to stay in the SD area.


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## dioxide45 (Jun 21, 2015)

puckmanfl said:


> good afternoon
> 
> Sounds like they are converting the San Diego Property to a "Residence Inn"...
> 
> just saying!!!



In my (limited) experience, it will be more like a Spring Hill Suites. The last Residence Inn we were in had a pretty large kitchen with full fridge, small cook-top and dishwasher. Spring Hill Suites is just a larger hotel room with a small partition.


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## Werner Weiss (Jun 21, 2015)

Comparing the San Diego property to a Marriott hotel brand, the closest match would be Marriott Suites. (Marriott Suites used to be a separate Marriott brand, but has since been lumped in with the signature Marriott Hotels brand.) In fact, the San Diego property originally opened in 1990 as a Marriott Suites property. It then became a Sheraton Suites and is now Declan Suites.

At a typical Marriott Suites property, the bedroom is a separate room with french doors that open to the living room. The bathroom has doors to the bedroom and the living room. There's a small counter with a bar refrigerator and a microwave. All rooms a fairly small.

You can see photos of rooms and public areas at Declan Suites here: http://www.declansuitessandiego.com/photo-tour

I'm intrigued by dioxide45's idea of combining 425 sq. ft. one-bedroom suites into 850 sq. ft. villas, at least for some percentage of the property. If the wall between two living rooms could be opened up, the resulting 850 sq. ft. villa could keep the two bedrooms and two bathrooms, but the second living room could become a kitchen and dining room. It would be compact compared to traditional purpose-built MVCI 2-bedroom villas, but it would be nice for families.


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## Werner Weiss (Jun 21, 2015)

The more I think about it, the more sense it makes for the San Diego conversion to result in two kinds of villas:

*Deluxe studio* — same footprint as an existing one-bedroom suite, but enhanced with a kitchenette, more storage, and decor that's vacation-like, not business hotel-like. Branded as a studio, even though there are french doors to a separate bedroom, because the features and size would be similar to a typical MVCI studio.

*Two-bedrooom / two-bathroom villa* — two one-bedroom suites combined, as described in my prior post.

Two one-bedroom suites could also be combined and configured as a one-bedrooom / one-bathroom villa, but such a conversion would probably cost VAC more because it would involve greater changes to the existing walls, plumbing, etc. The resulting configuration would probably need to cost as much in points as a two-bedrooom / two-bathroom villa. So this seems unlikely.

But anything is possible at this point.


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## dioxide45 (Jun 22, 2015)

Werner Weiss said:


> The more I think about it, the more sense it makes for the San Diego conversion to result in two kinds of villas:
> 
> *Deluxe studio* ? same footprint as an existing one-bedroom suite, but enhanced with a kitchenette, more storage, and decor that's vacation-like, not business hotel-like. Branded as a studio, even though there are french doors to a separate bedroom, because the features and size would be similar to a typical MVCI studio.
> 
> ...



When I mentioned it, I wasn't even thinking of a 2BR 2BA unit. I was thinking just a larger 1BR unit that would be 1BR 2BA. Though as you say, that would have to be twice the number of points as the 1BR 1BA studio unit that these units currently are. By combining two units in to one 1BR 2BA, it would be more the size that MVCI owners are expecting in that size of unit.

It will be interesting to see how they end up configuring these units. I can tell now that the units in the size that they are will not be up to the expectations of a 1BR 1BA unit that Marriott owners expect, no matter how nice the furnishings and decor.


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## jlr10 (Jun 24, 2015)

The location they are showing for the San Diego location is not the part of town that I would walk around in the evening or at night.  I interviewed, and turned down, a job in the building next door. Part of the reason was having to park offsite and then walk to a garage a few blocks away. Okay during the day but not a walk to be taken alone at night.

San Diego has a lot of homeless people that congregate from that area south to Petco Park. There is a major run that finishes near there and each year we have to walk around all of the homeless laying on the sidewalks during the day. Going towards Balboa Park and the Zoo would probably be better, but also is not a walk I would want to do at night.

There a few places where you can walk in the early evening: The main Gaslamp drag, by Seaport Village along the water and up Harbor Drive, and near Horton Plaza. But most of the rest of downtown is a tad more sketchy. We have gone to the theatre at the Civic Center, and have experienced being followed and yelled out less than a block from what is considered the safe part of town.

This may end up being a nice building, but the location is definitely located is not in a resort location.

As for the Big Island: We have stayed at the Marriott Waikoloa.  It is the first place we stayed on our first trip, so we are someone partial, but we love the location and the grounds.  This is near beach at A Bay, separated only by a fish pond, with nice walking grounds, near the king shops, and the newer queens shops. It is farther from the airport, and it is more windy, but we liked that is was less crowded and felt more like a resort than when we stayed in Kona. We even left in the middle of a week long timeshare stay just to spend a few days there.  The only issue we had there was they had the slowest elevators of any place we had ever stayed. They did a multi-million dollar renovation to the resort but the elevators were still just as slow.  I am not sure if this is still the same course, but the first time we were there it was also the turnaround point for the bicycle portion of the Ironman triathalon.  We don't own any points, and probably still won't purchase any, but the ability to go to this location would certainly be a cause for discussion.


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## NYFLTRAVELER (Jun 24, 2015)

jlr10 said:


> The location they are showing for the San Diego location is not the part of town that I would walk around in the evening or at night.  I interviewed, and turned down, a job in the building next door. Part of the reason was having to park offsite and then walk to a garage a few blocks away. Okay during the day but not a walk to be taken alone at night.
> 
> San Diego has a lot of homeless people that congregate from that area south to Petco Park. There is a major run that finishes near there and each year we have to walk around all of the homeless laying on the sidewalks during the day. Going towards Balboa Park and the Zoo would probably be better, but also is not a walk I would want to do at night.
> 
> ...



This is obviously disturbing.  I am not one for the city locations to begin with; but if you are in a city you want to be able to walk and explore the city in a safe and leisurely manner.

MVCI should stick to what they do best, the spacious resort type facilities with activities and amenities and not get into these urban locations which become what are essentially glorified Embassy Suites .  Marriott has plenty of urban hotels people can choose from for a city stay.


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## zentraveler (Feb 15, 2016)

For what it is worth, we just left the Marriott Kauai Beach Club and on my way out I stopped at the Sales Office to ask about the Big Island plan. He confirmed that they are planning the hotel conversion there and "about a year" for a completion date. Don't have any more details. Am at Ko Olina now and will stop by their office and ask also. May be close enough to get some more detail about planned unit sizes.

From the Ko Olina Sales department yesterday: 112 units of 1 and 2 BDRM, expected opening 2017, expected start of reservations summer of 2016.


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## zentraveler (Apr 24, 2016)

Has anyone heard anything more about the status of this conversion or when they might start taking reservations? I am gathering that since I can't find much of anything in the way of information that it is not happening on the schedule I was told, i.e. no time soon....


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## dioxide45 (Apr 24, 2016)

zentraveler said:


> Has anyone heard anything more about the status of this conversion or when they might start taking reservations? I am gathering that since I can't find much of anything in the way of information that it is not happening on the schedule I was told, i.e. no time soon....



Still no official announcement about the property on the Big Island.


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## JIMinNC (Apr 24, 2016)

dioxide45 said:


> Still no official announcement about the property on the Big Island.



The next earnings call is Thursday morning, April 28. The timing might get mentioned then in their comments to the analysts.


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