# How bad can it get?



## oldkey (Feb 25, 2011)

We own several weeks at MOC along with my 500+ points at DVC. Our goal has been to use these weeks/points as our "second home" in retirement. We really only want to be gone from our home Jan - Easter. We have been very successful in renting our weeks/points now to pay for both the maintenance fee as well as the loan payments on the weeks. We actually make money in both cases and put that money into "owning" the weeks and points. This has worked for 17 years with Disney and 7 years now for MOC. When we retire the rent will have paid for the weeks (we have paid off Disney already). When we vacation, we intend to rent the studio side to pay the maintenance fee so we can stay in the one bedroom side. 

It all seems so simple...but...all these changes. I want to buy another week or two...but...not sure how bad it could get...

- we will never trade
- we could care less about the Marriott points program
- we just want to stay at MOC
- unless we somehow get sick of Maui, I never intend to sell (just there two weeks ago - never liked it more - so cool to walk all the way up to Hona Kai)
- we relish in the thought that we can leave all this to our kids in a trust

What's the worst that can really happen with the Spin Off? I understand the expense of flying to Maui and the possible stress on rents. What about the building? Can they sell it? To who? Will our beloved MOC always be there? I want to keep buying weeks but all this negativity here.....

I am the only one left that still feels good about Marriott?


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## wof45 (Feb 25, 2011)

everything is still the same as it has always been for weeke owners.

if you want additional weeks, you can buy them resale and they will continue to work as they always have.

Destination Club is a new feature that you have to buy into if you want to use it, but if you don't enroll, then your existing weeks and any that you buy resale work just the same way.


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## ronparise (Feb 25, 2011)

what marriott is doing with their timeshare unit is no different that what marriott has done since 1927 when J. Willard and his new bride Alice moved to Washington DC opened up a A&W Root Beer Stand. They build companies, buy companies, operate companies, sell companies and spinoff companies.

 In this case they they are spinning off the timeshare division. management remains the same. I wouldnt worry about the future of your resort


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## BobG7734 (Feb 25, 2011)

I totally agree with the above posts...the hysteria about DC and Spinco has gotten out of hand in this forum...if you own the TS just continue to own it...the management and budgets of TS are set by the owners, not by anyone else.


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## timeos2 (Feb 25, 2011)

rcgrogan said:


> I totally agree with the above posts...the hysteria about DC and Spinco has gotten out of hand in this forum...if you own the TS just continue to own it...the management and budgets of TS are set by the owners, not by anyone else.



Agreed 100%. If all you desire is to use the resort for the week(s) you own then all the recent hoopla, except the chance for significantly higher fees, aren't likely to affect you or the resort. The fees can go up anywhere for any reason so that just comes along for the ride regardless of what resort/brand. The recent changes at Marriott may mean a bigger jump than most but that is strictly speculation now.  If you like the resort and the fees are within your budget go for it.  If you use you almost can't lose.


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## oldkey (Feb 25, 2011)

*Awesome!*

Time to buy anotherweek ....and not read any more negative posts....


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## gblotter (Feb 25, 2011)

timeos2 said:


> If all you desire is to use the resort for the week(s) you own then all the recent hoopla, except the chance for significantly higher fees, aren't likely to affect you or the resort. The fees can go up anywhere for any reason so that just comes along for the ride regardless of what resort/brand. The recent changes at Marriott may mean a bigger jump than most but that is strictly speculation now.  If you like the resort and the fees are within your budget go for it.  If you use you almost can't lose.


The likelihood of significantly higher maintenance fees is not something I can dismiss so easily.  I also own at MOC, and I almost always use my home resort.  I fear the prospect of dramatic fee increases is real.  Given the Marriott spinoff and the existing abusive Maui County timeshare taxation, I can easily see MOC fees rising to $2500 within a couple of years - I don't think anyone can reasonably deny that possibility.  At what price-point do owners cry uncle ($3K per year)?  When you find yourself paying $400+ per night in maintenance fees, will timeshare ownership still make sense?  Higher maintenance fees will of course depress resale values, impacting any exit strategy.  I have accepted the fact that at some point I may have to just walk away because of the exorbitant maintenance fees.  Some will call that a gloom-and-doom, sky-is-falling attitude.  However, Marriott has ripped off my rose-colored glasses twice in the past year.  Marriott is clearly acknowledging the reality of the situation.  They saw a bleak future for the timeshare business and decided to get out.  I'm not following Marriott to the exit just yet, but I am also trying to acknowledge reality here.  For this reason, I can't imagine purchasing another week in this uncertain environment.


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## ronparise (Feb 25, 2011)

The fear of rising maintenance fees is real. The fact the maintenance fees are approaching what a 5 star hotel charges is also very real. If it becomes common for maintenance fees to exceed the cost to rent,  there will be more and more folks just walking away. 

These fears however are not unique to Marriott. This is a problem for the whole industry and all of us not just Marriott owners. It has nothing to do with this spinoff, except that it will become very clear just what a large timeshare company is really worth. Dont be surprised if the share price drops to the same value of our timeshare weeks on the secondary market


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## Cmore (Feb 25, 2011)

gblotter said:


> .... Some will call that a gloom-and-doom, sky-is-falling attitude.  However, Marriott has ripped off my rose-colored glasses twice in the past year.  Marriott is clearly acknowledging the reality of the situation.  They saw a bleak future for the timeshare business and decided to get out.  I'm not following Marriott to the exit just yet, but I am also trying to acknowledge reality here....



Forgive me as I am new here, I am trying to understand how they "ripped off the rose-colored glasses twice in the last year"?  We have been MVCI owners for over 10 yrs.  I understand the introduction of points, and spin off are changes, but really how does those two things really impact a weeks owner?  

Our resorts are still Marriott branded and managed, still have the internal priority they had with weeks based resorts.  True, likely will have less access to new resorts unless you enroll, but the 'weeks mvci network' is still very large if you choose not to enroll.  I really don't see a reason for fees to climb at a rate different than their consistent irritating climb above the rate of inflation, but that problem has long existed.  

Everyone, is entitled to their opinion, but like others I simply see this as Marriott unlocking shareholder value and separating a capital intensive part of the business from the franchise and mgmt side.  

Looks a lot like the hotel model to me.


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## TJCNewYork (Feb 25, 2011)

*Looks a lot like the hotel model to me, too.*

Cmore - Looks a lot like the hotel model to me, too.



Cmore said:


> Everyone, is entitled to their opinion, but like others I simply see this as Marriott unlocking shareholder value and separating a capital intensive part of the business from the franchise and mgmt side.
> 
> Looks a lot like the hotel model to me.


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## vacationtime1 (Feb 25, 2011)

Cmore said:


> Everyone, is entitled to their opinion, but like others I simply see this as Marriott unlocking shareholder value and separating a capital intensive part of the business from the franchise and mgmt side.
> 
> Looks a lot like the hotel model to me.





TJCNewYork said:


> Looks a lot like the hotel model to me, too.



I am not persuaded.  If Marriott wanted to separate the capital intensive part of the business (real estate ownership and development) from the franchise and hotel management side, Marriott would have spun off the construction and sales portions of the timeshare business but retained the ongoing management of timeshares after they are sold.  

NewCorp would be like many other real estate developers -- cyclical, boom or bust, and high risk/high reward.  The management side would be steadier, ongoing, less variable -- like Marriott's existing hotel business.  It would have been analogous to the model where Marriott manages properties owned by others (REIT's for the hotels, HOA's for the timeshares).

The fact that Marriott did not want to stay involved in the ongoing management of existing timeshares is more disturbing to me than its desire to get out of real estate development.  There may be good and sufficient reason for Marriott to dump the balance sheet issue of unsold inventory, but for it to choose to also dump ongoing vacation property management suggests that Marriott sees large issues downstream.


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## ral (Feb 26, 2011)

vacationtime1 said:


> The fact that Marriott did not want to stay involved in the ongoing management of existing timeshares is more disturbing to me than its desire to get out of real estate development.  There may be good and sufficient reason for Marriott to dump the balance sheet issue of unsold inventory, but for it to choose to also dump ongoing vacation property management suggests that Marriott sees large issues downstream.



Based on the following from the Marriott News Center, "Under the plan, the new company will focus on the timeshare business as the exclusive developer and operator of timeshare, fractional and related products under the Marriott brand and the exclusive developer of fractional and related products under the Ritz-Carlton brand", it seems that the new company will manage the Marriott brand, but will only develop the Ritz-Carlton brand. Unless the wording is incorrect, Ritz-Carlton management will be operating the Ritz-Carlton brand. This leads me to believe that Marriott is staying involved in the ongoing management of the Ritz-Carlton brand.


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## wof45 (Feb 26, 2011)

all this speculation is pretty pointless.

the spinoff is all about the stock price.  Marriott Intl stock gets a much higher multiple if it does not have a lot of invested funds, meaning that its roi is much higher.


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## bogey21 (Feb 26, 2011)

Cmore said:


> Looks a lot like the hotel model to me.



Looks more like the RCI model to me.  Conversion into an exchange company who will rent unsused Weeks to the general public.

George


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## MOXJO7282 (Feb 26, 2011)

If you can afford the price tag and these loans you mention aren't high interest I say invest in another but I strongly recommend it be a 2BDRM OV/OF.

A 2BDRM OF/OV at the MOC is a unit IMHO that will always have some value and rent well because the demand is so incredibly high. 

And if you can take advantage of the lockoff and split into a 2week vacation then your really driving value. I'm going in 2012 in my OF unit. I've already found a renter for the studio section for $1600. So my renter is almost paying for the whole MFs and I get the use of the 1BDRM side. Can't beat that value.

I also just rented one of my 2012 weeks already. So even if MFs continue to go up, there will always be a renter willing he pay up for a vacation at the fabulous Maui Marriott.


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## Cmore (Feb 26, 2011)

bogey21 said:


> Looks more like the RCI model to me.  Conversion into an exchange company who will rent unsused Weeks to the general public.
> 
> George



I understand what you are saying, but Marriott has long held ownership interests in most if not all the resorts.  The resorts have been available for use by MR points members and the general public thru the Marriott reservation system for a very long time.  

Why are they not entitled to do what they want with their weeks just as TS owners can rent, occupy, trade, give away, etc with their weeks ?  As long as traded weeks are allowed to go thru the trading process as required by our doc's  I really don't see the problem.   

I expect them to live up to the terms that they sold us, and nothing more.


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## vacationtime1 (Feb 26, 2011)

Cmore said:


> I expect them to live up to the terms that they sold us, and nothing more.



Many purchasers thought one of those terms was that Big Marriott would always be around to manage the properties in a way that "protects" its owners' "investments".  Marriott has always played on its reputation in the industry as an inducement to buy into its timeshare system.  Marriott also played on its reputation as a branding entity when it forced recalcitrant HOA's to upgrade facilities against the threat of disaffiliation.  It turns out that Marriott can fulfill its "obligation" (and collect licensing fees) by renting its name to a company that will soon be unrelated to it.

Whether or not this will make a difference to the owners remains to be seen.  Although I think that OP, and others who operated under the "buy to use" assumption, will be the least affected.


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## tombo (Feb 26, 2011)

MOXJO7282 said:


> I also just rented one of my 2012 weeks already. So even if MFs continue to go up, there will always be a renter willing he pay up for a vacation at the fabulous Maui Marriott.



If the fuel prices keep rising and air fare skyrockets that is not the case. If R/T air fares are $2000 or more a person and MF's are $2500 to $3000 for a week, there will be a lot of units for rent and few renters. Increased supply and reduced demand will lower prices. 

The cost of renting and/or MF's in hawaii is only one of the factors that determines the value of owning and the rental prices one can command. Fuel costs fluctuations and the resulting air fare fees are an expense that can either increase travel to the Islands or almost kill it. Just read the Hawaii thread here on TUG and read the response from owners in the thread about high air fares are killing me where owners are discussing whether they can afford to go to their home resorts or not. 

The high fuel/air fares of 2 years ago could pale in comaprison to projected fuel increases in the next 2 years. The high was about $4 a gallon a couple of years ago and travel to hawaii plummetted. Motels and condos had fire sale prices for rental properties stting empty. The TUG last minute boards and redweek were filled with bargain basement prices on Hawaii weeks. 

In the last year fuel costs went down and travel to Hawaii increased. Now fuel and oil is jumping rapidly (my gas jumped 20 cents a gallon in one day this week). Projections are $4 to $5 a gallon within 2 years. If you can't afford to go,if renters aren't willing or able to pay the air fares, if MF's and taxes continue to rise, and if there are a lot of owners discounting their rental prices hoping to entice a renter to rent their unit rather than let it sit empty, then owning anywhere in Hawaii could become an expensive proposition. 

Many here on TUG live for vacations and feel that other people will also vaction no matter what. Most people do not feel the same way. Most people vacation when they have secure jobs and when the cost to do so is not a strain on the family budget. The term "staycations" where people vacation at home was coined because so many people could not afford to travel on vacation in the poor economy and chose to stay home instead of going anywhere. Flying to Hawaii for most is a luxury item, not something they must do every year or so. 

If air fares increase by 50%, double, or triple then you might not ba able to rent your weeks no matter how cheaply you price them. if you can't rent them, can't afford to pay the air fares, and can't sell the timeshares you might become the owner of a white elephant. 

I sold my Hawaii timeshare 3 years ago (thank goodness) and will gladly rent if I decide to go back. For me if air fares are expensive I might never go back. Loved Hawaii but I have been there and done that numerous times. If I never go back to Hawaii again it will not affect my life in a negative way. 

To me rising Hawaii timeshare taxes, Hawaii's faster than average increases in MF's, an unfriendly timeshare environment exhibited by the Gov't of several islands, and future predictions of ever escalating fuel costs and  unending air fare increases means that it is time to sell if you have not done so already. I could be wrong, but if I am wrong I can always buy another week resale in the future, or simply rent when/if I want to return. In a few years if fuel costs, taxes, MF's, and air fares keep rising, the option to sell might no longer be an option.


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## OldPantry (Feb 26, 2011)

How bad can it get?  Pretty bad.  That is (as mentioned above) dependent on what happens to maintenance fees.  If MOC goes to $2500 or $3000, which is not outside the realm of possibility, things could start collapsing there.  The tipping point for any resort will be when rentals are consistently cheaper than MFs.  Somewhere around there, folks will rebel.  There are two ways to do this: walk away, or fight to lower MFs.  Walking away can lead to a pernicious cycle, burdening the rest of the owners with ever-rising MFs.  It also damages the walkees, whose credit ratings are hurt, and who might be subject to the harassment of collections procedures.    

Somebody mentioned that MFs are threatening to equal the cost of 5 star resorts booked from the hotel companies (Marriott, Hilton, Westin) directly.  That should never happen.  These companies are for-profit.  They look to make money renting inventory, above and beyond all their fixed and variable costs.  Think of all the things that go into these costs (advertising, marketing, interest expenses, depreciation, etc.).  HOAs, on the other hand, are non-profit.  They just need to collect enough in MFs to be self-sustaining, with a cushion for "just in case".  The difference should be substantial.  In fact, the difference should be large enough that the hierarchy would be, from bottom to top: MFs, private rentals, hotel rentals

If it isn't the case, then there's something rotten in the state of Denmark, and homeowners have to step up and demand changes.  Unchecked, the rise in MFs could eventually lead to bankruptcy for vacation clubs, leaving everybody (except the new resort owners) out in the cold.

By the way, this scenario is not a prediction.  I actually think things are looking up for timeshares, and don't anticipate that things will spiral out of control.


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## dioxide45 (Feb 26, 2011)

OldPantry said:


> Somebody mentioned that MFs are threatening to equal the cost of 5 star resorts booked from the hotel companies (Marriott, Hilton, Westin) directly.  That should never happen.  These companies are for-profit.  They look to make money renting inventory, above and beyond all their fixed and variable costs.  Think of all the things that go into these costs (advertising, marketing, interest expenses, depreciation, etc.).  HOAs, on the other hand, are non-profit.  They just need to collect enough in MFs to be self-sustaining, with a cushion for "just in case".  The difference should be substantial.  In fact, the difference should be large enough that the hierarchy would be, from bottom to top: MFs, private rentals, hotel rentals



I think it is hard to compare the MF with rental rates of 5-star hotels. While a hotel is for profit and a TS is not. A hotel also has three rooms for every one 2BR at a TS. So to rent equivalent accommodations at a 5 star hotel would cost much more for equivalent accommodations.


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## Cmore (Feb 26, 2011)

vacationtime1 said:


> Many purchasers thought one of those terms was that Big Marriott would always be around to manage the properties in a way that "protects" its owners' "investments".  Marriott has always played on its reputation in the industry as an inducement to buy into its timeshare system.  Marriott also played on its reputation as a branding entity when it forced recalcitrant HOA's to upgrade facilities against the threat of disaffiliation.  It turns out that Marriott can fulfill its "obligation" (and collect licensing fees) by renting its name to a company that will soon be unrelated to it.
> 
> Whether or not this will make a difference to the owners remains to be seen.  Although I think that OP, and others who operated under the "buy to use" assumption, will be the least affected.



Again, I understand the various points made, by everyone.  I am just trying to grasp how things have "really" changed for weeks owners and I don't see much.  

JMO, but when I travel on business and choose to stay at a Marriott, or Starwood property, etc.  I don't call in and confirm I am at a "parent" company owned property.  I am staying at a property that represents  the "brand" regardless of the ownership group of that particular property.  Certainly, some properties do a better job of upholding those stds. than others.  This is true at MVCI as well, some of our resorts are maintained better than others and this was/is true under Marriott corp.  They are good, but not perfect.

In this case, MVCI branded resorts will need to maintain the standards that is expected by MVCI, or individual resorts will not be able to maintain their affiliation, which has happened to a few properties over the years, most if not all were Marriott acquisitions not developed resorts.

People can continue to fret over DC points or the spin off if they want to, I don't beleive either of those things damages in any significant way what MVCI owners already own.  The damage we've had in regards to the "cash value" of our various owned weeks was largely done by what's happened in the economy, something that is far beyond the the control of "Big Ol' Marriott Corp."

I wish you well, and I am going to enjoy my upcoming Spring Break trips with my son's and their friends.  1 week in Colorado skiing, and the next week in Orlando hitting the parks again.


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## BobG7734 (Feb 26, 2011)

Again, I am saying that there is a lot of hysteria in this forum.  If you own the TS it is up to you to relate to the BOD to let your thoughts known abbot MF amounts and get involved in the management of the facility.  Marriott has nothing to do with it.  It is liking to own a condominium where tHe owners control the ownership.


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## MOXJO7282 (Feb 26, 2011)

tombo said:


> If the fuel prices keep rising and air fare skyrockets that is not the case. If R/T air fares are $2000 or more a person and MF's are $2500 to $3000 for a week, there will be a lot of units for rent and few renters. Increased supply and reduced demand will lower prices.
> 
> The cost of renting and/or MF's in hawaii is only one of the factors that determines the value of owning and the rental prices one can command. Fuel costs fluctuations and the resulting air fare fees are an expense that can either increase travel to the Islands or almost kill it. Just read the Hawaii thread here on TUG and read the response from owners in the thread about high air fares are killing me where owners are discussing whether they can afford to go to their home resorts or not.
> 
> ...



So now its going to get worse than it was in 2009 & 2010? No way.

I wish everyone listed their ownership because it does help in understanding their perspective. Like mine for instance. Obviously I'm pro Marriott. Mainly because I've experienced nothing but good things through my ownerhship, especially my Maui units. Marriott has  well exceeded my expectation.

Others are making comments about Marriott when they just don't have any or limited experience with them.

I rent most of my Maui weeks to West Coast folks. Airfare is not going to go to $2000 for them ever. If it does this world is going to have much more to worry about than going on vacation. If you choose to live your life in that much fear so be it. I refuse to.

I remember so much negative talk when I first bought into the Marriott program and if I would have listened then my family would have missed out on so much priceless memories.  

I fully expect that Marriott will weathe this storm and ownership will continue to bring value, at these with the resorts I own.


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## SueDonJ (Feb 26, 2011)

rcgrogan said:


> Again, I am saying that there is a lot of hysteria in this forum.  If you own the TS it is up to you to relate to the BOD to let your thoughts known abbot MF amounts and get involved in the management of the facility.  Marriott has nothing to do with it.  It is liking to own a condominium where tHe owners control the ownership.



RC, I do admire you for not giving in to the hysteria. Like you I think there is less to worry about with the advent of the DC and upcoming spin-off than many on TUG are anticipating.

But I have to respectfully disagree with you that Marriott plays no role at all, has no influence, related to m/f. The fact that they hold seats on the resort Boards, and require a brand standard to be met at the resorts (both rights by virtue of the governing docs,) means that their influence is exerted upon the remaining Board members. Because most of the Operating Budgets are set according to need and are audited on a routine basis, you're correct that Marriott does not have unlimited free reign to increase m/f willy-nilly, but their influence is apparent in the resort furnishings and the budgets' reserve fees. There's no denying that Marriott can and does exert control over certain line items in the budgets related to the brand standard, and that it benefits them greatly to do so liberally because their contracted Management fee is 10% of the total budget.

I hope you understand I'm not trying to add to the hysteria. I don't have a problem with how Marriott manages the resorts, in fact I hope they continue the same management style after the spin-off.  We bought Marriott because of the brand standard and don't want to see it sacrificed.


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## SueDonJ (Feb 26, 2011)

MOXJO7282 said:


> So now its going to get worse than it was in 2009 & 2010? No way.
> 
> I wish everyone listed their ownership because it does help in understanding their perspective. Like mine for instance. Obviously I'm pro Marriott. Mainly because I've experienced nothing but good things through my ownerhship, especially my Maui units. Marriott has  well exceeded my expectation.
> 
> ...



We feel much the same way, Joe.


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## MOXJO7282 (Feb 26, 2011)

tombo said:


> Many here on TUG live for vacations and feel that other people will also vaction no matter what. Most people do not feel the same way. Most people vacation when they have secure jobs and when the cost to do so is not a strain on the family budget. The term "staycations" where people vacation at home was coined because so many people could not afford to travel on vacation in the poor economy and chose to stay home instead of going anywhere. Flying to Hawaii for most is a luxury item, not something they must do every year or so.
> 
> If air fares increase by 50%, double, or triple then you might not ba able to rent your weeks no matter how cheaply you price them. if you can't rent them, can't afford to pay the air fares, and can't sell the timeshares you might become the owner of a white elephant.



Most prime week 2BDRM Marriotts will always have some value. Resale pricing continues to side but they will always be sellable. That is one of the reasons i buy the resorts I do. Worst case scenerio I could give away to free myself of MF burden if I ever needed to. I'm still supremely confident that will always be the case. I would be very stressed if I owned a TS that was unsellable, like most out there, other than the major brands like Marriott. 

For the last few years people have altered their travel plans, more driving trips and short flights. Now clearly based on my own experience with tremendous 2011 rental demand and from everything I read about increase in trvael and travel plans, more are getting back to  more regular vacations habits.

Yes oil prices can destabilize things but not to the point you are suggesting, and I believe it won't and the economy will continue to prosper albeit at a slow pace.


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## tombo (Feb 26, 2011)

MOXJO7282 said:


> Yes oil prices can destabilize things but not to the point you are suggesting, and I believe it won't and the economy will continue to prosper albeit at a slow pace.



Read articles and see what is currently happening. Carles Maxwell and T Boone Pickens both predict $300 a barrel crude oil by 2020. That is less than 10 years from now. $300 a barrel could translate to gas prices of over $15 a gallon. How much more will jet fuel cost? How much more will the airlines have to charge to make a profit on flights to Hawaii? 

Chas Maxwell is not guaranteed to be correct on his predictions, but he has a good track record over many decades. If these predictions are close to correct, yes air fares will skyrocket and non essential air travel will decrease. If gas is $4 or $5 a gallon this summer, prices could change for flights very quickly. both of these forecasters think that natural gas will fill the gap on oil, but jets do not fly on natural gas, they need jet fuel which comes from crude oil, not gas or corn.

Oil Guru Chas Maxwell of Weeden & Company was forecasting the following prices for West Texas crude last September. Oil will probably reach $100 a barrel thissummer, well before the 2012 date he predicted. His forecast might be conservative with prices moving up faster than he anticipated. 

2011 $85
2012 $95/barrel
2013 $115 translates to about $4.00/gallon for gasoline
2014 $140
2015 $180
2020 $300

http://www.bnet.com/blog/clean-energy/another-300-oil-prediction-8212-and-why-this-one-matters/4191


Oil predicted to be $100 a barrel this summer for the first time since 2008 and gas predicted to be $5 a gallon this summer.

http://www.nola.com/business/index.ssf/2011/02/oil_prices_hit_100_per_barrel.html

Read the forecasts. China has a growing economy with 1 billion people who will need more and more oil. Our consumption is up. The question is really not whether we will be paying $5 or more for a gallon of gas, the question is when that day will come. When the oil and fuel prices rise, air fares will have to follow suit. 

Any Hawaii timeshare is at risk of being priced out of existence by rising air fares, no matter how nice they are or what name is on the entrance. It seems like now might be a good time to sell because when oil reaches $300 a barrell giving any Hawaii week away for free might be almost impossible. That is my educated guess. I will be glad to retrieve this thread in 5 to 10 years and see if I can say I told you so or oops I was wrong. I would wager a pretty sizeable bet that i will be able to say I told you so. Time will tell.


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## MALC9990 (Feb 26, 2011)

$5 a gallon - really horror of horrors. With Gas at over $8 in the UK and the rest of Europe - we don't see any reduction in travel whether driving or flying ! People will pay what it takes.


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## tombo (Feb 26, 2011)

$5 a gallon this summer. $15 a gallon between 2015 and 2020. At $5 a gallon travel patterns will change. At $15 a gallon vacations to even driving locations could become few and far between.  Food and all products will skyrocket due to transportation costs. In this Forbes article they are saying Americans might have to cut their oil consumption by 50% or more. Read the article.

“[Maxwell] expects an oil-induced financial crisis to start somewhere in the 2010 to 2015 timeframe,” Energytechstocks.com reported. “He said that, unlike the recession the U.S. appears to be in today, ‘This will not be six months of hell and then we come out of it.’ Rather, Maxwell expects this financial crisis to last at least 10 or 12 years, as the world goes through a prolonged period of price-induced rationing (eg, oil up to $300 a barrel and U.S. pump prices up to $15 a gallon).”

http://www.consumerenergyreport.com/2010/09/13/maxwell-forecasts-peak-oil-in-seven-years/


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## dioxide45 (Feb 26, 2011)

tombo said:


> $5 a gallon this summer. $15 a gallon between 2015 and 2020. At $5 a gallon travel patterns will change. At $15 a gallon vacations to even driving locations could become few and far between.  Food and all products will skyrocket due to transportation costs. In this Forbes article they are saying Americans might have to cut their oil consumption by 50% or more. Read the article.
> 
> “[Maxwell] expects an oil-induced financial crisis to start somewhere in the 2010 to 2015 timeframe,” Energytechstocks.com reported. “He said that, unlike the recession the U.S. appears to be in today, ‘This will not be six months of hell and then we come out of it.’ Rather, Maxwell expects this financial crisis to last at least 10 or 12 years, as the world goes through a prolonged period of price-induced rationing (eg, oil up to $300 a barrel and U.S. pump prices up to $15 a gallon).”
> 
> http://www.consumerenergyreport.com/2010/09/13/maxwell-forecasts-peak-oil-in-seven-years/



A bigger problem will happen if there is a meltdown in the US dollar and if oil no longer is traded in dollars. If the US dollar loses it's reserve currency status, America has to go out and buy the currency that oil is traded in before buying oil, it will make oil even more expensive and volatile.


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## BobG7734 (Feb 26, 2011)

More hysteria!  When we were kids gas was .$25 a gallon and when it went up we all survived.  If it goes to $5.00 we will still survive since earnings will ado go up...let's stop the doom and gloom.  I guess I am just an optomist that knows that whatever happens we will get through it!


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## wof45 (Feb 26, 2011)

I guess we will all just ignore all of the reserves in Saudi Arabia that will last the rest of the century.  They have the wells already drilled and capped so that they can turn on the tap when they want.

Why would Saudi Arabia let an oil depression take place?

Could it be that the big owners of oil and gas are making predictions so they keep on getting all of the tax breaks from the government?


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## DanCali (Feb 27, 2011)

wof45 said:


> all this speculation is pretty pointless.
> 
> the spinoff is all about the stock price.  Marriott Intl stock gets a much higher multiple if it does not have a lot of invested funds, meaning that its roi is much higher.



Do you truly believe what you say? Did you buy the stock after the announcement? Or, if you already own it did you buy more?


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## wof45 (Feb 27, 2011)

DanCali said:


> Do you truly believe what you say? Did you buy the stock after the announcement? Or, if you already own it did you buy more?



just about every major move a corporation makes is done to drive the stock price higher.  particularly mergers, acquisition, and divestitures.  A divestiture happens because the financial analysts believe the two companies stock will do better separately than they do as one today.


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## MALC9990 (Feb 27, 2011)

Divestitures also happen when management realise that part of the business is non-core and is just not part of the future for the corporation. Thus it is either sold through a trade sale to a company interested in that part of the operation or through a spin off. 

So in this case it might be that Marriott hacve seen that MVCI is not Core to their future business.

This does not mean that the TS business is essentially bad - just not part of the Marriott vision for their future.


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## DanCali (Feb 27, 2011)

wof45 said:


> just about every major move a corporation makes is done to drive the stock price higher.  particularly mergers, acquisition, and divestitures.  A divestiture happens because the financial analysts believe the two companies stock will do better separately than they do as one today.



You didnt answer my previous questions...


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## Fredm (Feb 27, 2011)

*Lemons or Lemonaide?*

Pure speculation on my part.

Spinco will become the consolidation vehicle for a number of timeshares not currently under the Marriott brand.

Points are the currency to enable it.
Fees will sustain and grow it.
Look to Diamond Resorts for a loose model.


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## windje2000 (Feb 27, 2011)

Fredm said:


> Pure speculation on my part.
> 
> Spinco will become the consolidation vehicle for a number of timeshares not currently under the Marriott brand.
> 
> ...



Not speculation

Quoted from remarks by Steve Weisz - 2/15/11 MAR conference call



> At the same time, we will also be able to develop and operate timeshare resorts under other brand names.



Page 4, Par.4 of Weisz remarks  

LINK


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## Fredm (Feb 27, 2011)

windje2000 said:


> Not speculation
> 
> Quoted from remarks by Steve Weisz - 2/15/11 MAR conference call
> 
> ...



Yes, I read that. Thank you.
It was not an offhand remark by Weisz. 
Assuming Marriott didn't pull this split out of its ear in the past 8 months (a good assumption I think), Marriott has bigger plans for a fee based business than many here realize. At least that is my speculation.

Splitting it off allows it to pursue the opportunities the marketplace presents in a more aggressive way. Hardly shedding the orphan dog.
The business is evolving from a development company to service consolidator.


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## windje2000 (Feb 27, 2011)

Fredm said:


> Yes, I read that. Thank you.
> *It was not an offhand remark by Weisz. *
> Assuming Marriott didn't pull this split out of its ear in the past 8 months (a good assumption I think), Marriott has bigger plans for a fee based business than many here realize. At least that is my speculation.
> 
> Splitting it off allows it to pursue the opportunities the marketplace presents in a more aggressive way. Hardly shedding the orphan dog.



Absolutely - that remark was not offhand.

I will speculate that they have probably been pitched this idea/transaction for years, based on the input of WS analysts, but pulled the trigger relatively recently.

Weisz's remarks suggest to me that he envisions not only fee business, but also some development down the road.

MAR stock has not done much at all since the announcement.


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## Fredm (Feb 27, 2011)

windje2000 said:


> Absolutely - that remark was not offhand.
> 
> I will speculate that they have probably been pitched this idea/transaction for years, based on the input of WS analysts, but pulled the trigger relatively recently.
> 
> ...



Fred Silverman defined the way with the formation of Cendant. Acquired Fairfield and Worldmark. Bought RCI and introduced RCI Points. Consolidated its business under Wyndham Worldwide. Created  the largest vacation rental business in the world (without having purchased any of the inventory). All the while, members maintain it with maintenance fees. 
Marriott must have looked at that with envy.

Since we are speculating, Spinco acquires I.I., enrolls member resorts into Spinco points, and fragmented points/ aging exchange inventory is rented. Fees, on top of fees without driving another nail (although they might).

Cendant did it all by floating corporate bonds.
Marriott will not want to do that, but the new Spinco might.


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## bogey21 (Feb 27, 2011)

wof45 said:


> Why would Saudi Arabia let an oil depression take place?



Maybe a miscalculation based on greed.  

Maybe a takeover of the country by those who want to show the world who is in charge.  

Who knows?


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## wof45 (Feb 27, 2011)

DanCali said:


> You didnt answer my previous questions...



no, we are shifting all our spare cash into a condo in Islamorada, so we will have excess TS weeks in the future, and we won't need to fly nearly as much.


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## SueDonJ (Feb 27, 2011)

DanCali said:


> Do you truly believe what you say? Did you buy the stock after the announcement? Or, if you already own it did you buy more?



Good gravy, so the folks who aren't naysayers are not only supposed to be buying DC Points to show the courage of their convictions, but they're supposed to buy the stock too?  I'll make a deal with you - as soon as you take whatever loss is necessary to just walk away from your Weeks lock, stock and barrel, ASAP, with no thought at all of the best price you can get, then I'll buy shares.

But if you're into the stocks game, shareholders of record as of last Friday, 2/25 will be issued shares in the spin-off.  It wasn't time to buy yet if you want (more) MAR shares and not (more) spin-off shares.  It could be we'll see more activity with MAR beginning Monday but who knows.


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## windje2000 (Feb 27, 2011)

SueDonJ said:


> Good gravy, so the folks who aren't naysayers are not only supposed to be buying DC Points to show the courage of their convictions, but they're supposed to buy the stock too?  I'll make a deal with you - as soon as you take whatever loss is necessary to just walk away from your Weeks lock, stock and barrel, ASAP, with no thought at all of the best price you can get, then I'll buy shares.
> 
> But if you're into the stocks game, *shareholders of record as of last Friday, 2/25 will be issued shares in the spin-off.*  It wasn't time to buy yet if you want (more) MAR shares and not (more) spin-off shares.  It could be we'll see more activity with MAR beginning Monday but who knows.



Can you post a link to the source of this?

EDITED TO ADD:  Perhaps you were thinking of the date of record for the quarterly cash dividend?


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## SueDonJ (Feb 27, 2011)

windje2000 said:


> Can you post a link to this?



Eventually when I find it again, sure!  I remember seeing it on the day of Marriott's press release somewhere in all the different articles that I read, wrote down the date but not the source, and haven't been able to find it since.  Tomorrow I'll be putting some more time into searching for it.


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## taffy19 (Feb 27, 2011)

windje2000 said:


> Not speculation
> 
> Quoted from remarks by Steve Weisz - 2/15/11 MAR conference call
> 
> ...


I also read somewhere that each affiliate member will keep the reservation window for their members or resorts.  I don't remember the exact wording but I read it a long time ago and asked about it recently again what they mean with affiliates.  If you deal in points, then you may be able to visit any brand name resort but what will happen to II?  Will they be for the independent resorts mainly?

They have something similar in Mexico now that you can exchange to many brand name hotel resorts.  I have to find out the name again and if it really works.  It is not one of the names that we all know.  I will find out from a friend who recently bought from a developer here in Bucerias.


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## SueDonJ (Feb 28, 2011)

SueDonJ said:


> Eventually when I find it again, sure!  I remember seeing it on the day of Marriott's press release somewhere in all the different articles that I read, wrote down the date but not the source, and haven't been able to find it since.  Tomorrow I'll be putting some more time into searching for it.



OK.  I have reviewed with a finetooth comb every related article until my head is about to explode and still can't find the source.  This is the strangest thing - I KNOW I read it, can see the line in my head, but now it's nowhere to be found!  It definitely was real because I wrote it down in my notes as, "sor a/o 2/25 - spec div" and showed it to Don later that night.  He and I talked about watching for the effective date of the spin-off because it would be more significant then the sor date!  I could maybe see that I made a mistake IF 2/25 appears in a line elsewhere as significant for another reason, but I'm not finding that either.  Aaaaarrrrgggghhh, this is very frustrating.  Is it even possible that if an online article is amended then the original version disappears off the face of the earth?!  I didn't think so but now I'm so confused.

Regardless, if ever there was a source it's now disappeared and today's MAR activity doesn't appear to be going gangbusters either way, so I'm ignoring what I could swear I saw.  You should ignore it too.  

{eta} 





windje2000 said:


> Can you post a link to the source of this?
> 
> EDITED TO ADD:  *Perhaps you were thinking of the date of record for the quarterly cash dividend?*



Maybe, I guess, but I'm remembering it as separate from the cash div.  The 2/25 date is indicated on MarketWatch, etc, in the charts but like I said, I can see the line in my head and wrote a specific note about it.


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## BobG7734 (Mar 1, 2011)

SD, thanks for the response...I am still convinced that it is up to us, as owners, to set the spending levels and MFs.  I have attended most of the annual meetings in Boston and the board has been very open to comments and input from owners.  Maybe most owners do not get involved so they create (again my reference) hysteria...the Marriott branding is signifiance but it is up to us to say what it will cost.

Dave M....do you have any comments on this?


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## timeos2 (Mar 1, 2011)

*Confusing use times with brand value*



MOXJO7282 said:


> Most prime week 2BDRM Marriotts will always have some value. Resale pricing continues to side but they will always be sellable. That is one of the reasons i buy the resorts I do. Worst case scenerio I could give away to free myself of MF burden if I ever needed to. I'm still supremely confident that will always be the case. I would be very stressed if I owned a TS that was unsellable, like most out there, other than the major brands like Marriott.



You are confusing unsellable with brand name rather than the real reason (that applies to brands as well) seasonality. An off season Marriott is nearly as worthless as an off season "Joe's Timeshare".  If you bought all lower use time Marriotts rather than platinum you would discover the same issues as "most out there".  It is said that 80% of the owners / renters want only 20% of the available time and that is the real driver of value or lack thereof.  Naturally there are many more non-Marriott examples of poor value ownerships as they outnumber Marriott by hundreds to one.  But the problem is exactly the same for them all - if you don't have the best times/units you don't have value. It isn't exclusive to Marriott or non-Marriott but universal to all.


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## TJCNewYork (Mar 1, 2011)

*Marriott International Declares Cash Dividend*



windje2000 said:


> Can you post a link to the source of this?



Quoting Reuters:

*Marriott International, Inc. Declares Cash Dividend
Friday, 11 Feb 2011 12:15pm EST *

         Marriott International, Inc. announced that its board of directors  declared a quarterly cash dividend of $0.0875 per share of common stock.  The dividend is payable on April 1, 2011 to shareholders of record on  February 25, 2011.


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## SueDonJ (Mar 1, 2011)

TJCNewYork said:


> Quoting Reuters:
> 
> *Marriott International, Inc. Declares Cash Dividend
> Friday, 11 Feb 2011 12:15pm EST *
> ...



I don't think that's what windje is looking for, TJC.  Somehow someway I got it in my head that the special dividend later this year related to the spin-off would be issued to MAR shareholders of record as of 2/25, and he's looking for the source for that.

I could still swear that I saw it somewhere in all the related articles, can still see it in my head and read my note about it, but none of that matters because if it did truly exist it's now disappeared off the face of the earth.  Maybe it's proof that I've lost my mind.


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## Fredm (Mar 1, 2011)

Pretty hard to have an x-dividend date for stock that has not yet been approved for issue. Just saying...


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## SueDonJ (Mar 1, 2011)

Fredm said:


> Pretty hard to have an x-dividend date for stock that has not yet been approved for issue. Just saying...



Well there you go, no "maybe" about it.  I've officially lost my mind.


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## Cmore (Mar 1, 2011)

SueDonJ said:


> Well there you go, no "maybe" about it.  I've officially lost my mind.



I think the special dividend you may have been thinking of is actually the spin off shares that will distributed to MAR shareholders by the end of the year.   I just googled "Marriott to issue special dividend" and a number of articles popped up.  Some old about Marriott Host becoming a REIT and the ones about the spin off of the time share division.  I don't recall seeing any date of record being published for this as I have been following it both as an mvci weeks owner as well as a MAR shareholder.


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## BobG7734 (Mar 1, 2011)

*Dave M.*

Where are you in this whole discussion?? We know that you are retired (as I am) but would love to hear your input.


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## DanCali (Mar 1, 2011)

SueDonJ said:


> Good gravy, so the folks who aren't naysayers are not only supposed to be buying DC Points to show the courage of their convictions, but they're supposed to buy the stock too?  I'll make a deal with you - as soon as you take whatever loss is necessary to just walk away from your Weeks lock, stock and barrel, ASAP, with no thought at all of the best price you can get, then I'll buy shares.



I am not sure what me keeping or not keeping my weeks has to do with your or wof's stock holdings. Since I rent my Platinum NCV weeks at about $1000 over MFs, I like my current ROI of 10%+ and have no intention to sell them. What you do with your stocks is up to you - I won't tell you what to do or give you any advice.

And for the record - I never said wof should buy any anything. I just asked him if he bought stock given his assertion that various multiples will expand (which I understood to imply a higher stock price). And it looks like he didn't...


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## wof45 (Mar 1, 2011)

DanCali said:


> And for the record - I never said wof should buy any anything. I just asked him if he bought stock given his assertion that various multiples will expand (which I understood to imply a higher stock price). And it looks like he didn't...



I never said that Marriott was or was not a good stock to buy --
what I did say was that the decision to spin off time shares had nothing to do with all the black helicopter speculation.

The spinoff is to give Mariott Intl a higher stock price as a hotel only stock.
a I read the market, these machinations to raise the stock price eventually hurt stock buyers since fools tend to rush in on the change, and only benefit day traders.


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## TJCNewYork (Mar 1, 2011)

SueDonJ said:


> Maybe it's proof that I've lost my mind.




Whenever I experiences a loss, condolences offer support.  But, that seems inappropriate. Will sympathy help?    FWIW, Marriott typically declares dividends here. And, if anyone is looking for Facts about Marriott Vacation Club, check out pages 4-5 of the Marriott Factbook, here.


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