# Starwood Spinning off Timeshare Division - Vistana Signature Experiences



## ocdb8r (Jun 16, 2015)

I know there have been some other threads on this, so mods, feel free to merge if you think best.   I thought it worthy of it's own new thread...

It looks like Starwood has begun filing the required paperwork to spin off the timeshare business.  As part of this process they've filed a Form 10 with  the SEC (available here) and announced the name of the new timeshare business will be "Vistana Signature Experiences."   Lots of interesting things to me with this name.  A return to the Vistana brand and no mention of vacation ownership or timeshare but rather just "experiences."  Curious if that means anything for the future...

I'll look at the Form 10 and post anything else interesting I see.

*Edited to add...*

The Form 10 is a good read for anyone interested in what's going on with the timeshare side of the business and where they see it going in the immediate future.  Lots of details we've not had access to before.  A few interesting things I noted:

Sales on the timeshare side have been relatively flat/stable over the past few years.  There's a significant decrease in overall revenue reported but that is largely the result of the inclusion of the fractional/residential resorts in the group.  Primarily the sales/sellout of the St. Regis Bal Harbor residential units which mostly occurred in 2012/13 and thus show a declining trend in overall revenue.  It seems like they've  just dumped these three properties into Vistana Signature Experiences to get them off Startwood's books.  I don't see how they'll have much true relation to the timeshare group (other than presumably management fees) moving forward.  I also find it odd Starwood is retaining rights to sales of the remaining inventory of these fractional/residential properties.

The currently non-timeshare properties they are transferring to the new company (and have indicated they plan to convert partially or wholly to timeshare units) includes : The Sheraton Kauai Resort, Sheraton Steamboat Resort, The Westin Resort & Spa, Los Cabos, The Westin Resort & Spa, Cancun and The Westin Resort & Spa, Puerto Vallarta.  Sooo...basically we can look forward to more Mexico and Hawaii inventory.  

They expect to achieve revenue growth from increases in the number of VOIs under management, *the addition of new services for our owners *and the addition of new members.  Bolding added by me...I wonder what they have in store for us...  

I'm sure others will pull out interesting tidbits they see...let the roller coaster begin.


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## Weimaraner (Jun 16, 2015)

Sounds like they are taking a page from the Marriott playbook with the spinoff. It turned out ok so I'm good with it.  What's funny is I've been so frustrated with the Sheraton Vistana name lately because I was trying to figure out which resort had the pirate pool (I believe it's Villages). Between the Resort, the Villages, the Fountains in RCI and Interval...it just seemed so confusing. I even saw online reviews with mixed up names /photos and people saying they booked the wrong resort so I don't think I'm alone. I guess I'll have to live with the Vistana name


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## MommaBear (Jun 16, 2015)

I also think visually that the logo is very weak and bland. I also think that Vistana as a name reflects Starwood in its early days. I hope that is not indicative of where we are headed with Starwood! 

I am looking forward to really finding out what this all means and what the impact will be on our vacation experience.


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## tomandrobin (Jun 16, 2015)

Interesting read....

I am not a fan of the new name. 

Vistana Signature Experiences (VSE) does not roll-off the tongue or gives me that warm fuzzy. 

What was old is new again......Not.


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## Transit (Jun 16, 2015)

I guess the Mods are going to have to change the title of this forum section from Starwood Vacation Ownership to Vistana Signature Experiences and possibly a ton of updating in the near future.


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## TUGBrian (Jun 16, 2015)

here is a link with a larger story in it

http://www.businesswire.com/news/home/20150616005902/en/#.VYBHCkbMiMI


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## lizap (Jun 16, 2015)

I think losing the Starwood name is not a good sign..  One huge thing that concerns me is another company, such as Wyndham, stepping in to purchase Vistana, which has a lower value.


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## Ken555 (Jun 16, 2015)

There must be a reason they didn't keep the Starwood name, though I've seen other spin offs do so. Unfortunate, unexpected, and at first glance a bad choice IMO. 

And with more resorts in same or similar locations as current inventory, the only reason I would consider an additional SVN (err...VSE) timeshare would be to get to Maui. It's quite likely my next purchase will be in a different network.


Sent from my iPad


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## lizap (Jun 16, 2015)

I think they didn't keep the Starwood name because they plan to sell the timeshare division/unit.




Ken555 said:


> There must be a reason they didn't keep the Starwood name, though I've seen other spin offs do so. Unfortunate, unexpected, and at first glance a bad choice IMO.
> 
> And with more resorts in same or similar locations as current inventory, the only reason I would consider an additional SVN (err...VSE) timeshare would be to get to Maui. It's quite likely my next purchase will be in a different network.
> 
> ...


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## GregT (Jun 16, 2015)

I was definitely surprised by the new name.  Starwood is a brand that has value.  Vistana Signature Experience doesn't have any name recognition to anyone but a timeshare owner, and Wall Street is a different population.  Very odd choice and I can only think there was a reason they couldn't keep the Starwood name.

Will be interesting to see how VSE does.

Best,

Greg


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## Ken555 (Jun 16, 2015)

lizap said:


> I think they didn't keep the Starwood name because they plan to sell the timeshare division/unit.




Yes. But, others have kept it in similar situations. In fact, I believe there are other companies with the Starwood name that are only peripherally related (if at all) to the hotel management company. 

Still, anything with Vistana in the name makes me think of humidity. 


Sent from my iPad


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## tomandrobin (Jun 16, 2015)

There are a number of risks associated with the spin-off and ownership of Vistana common stock. We discuss these risks under “Risk Factors” beginning on page 22


Oh Joy!


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## lizap (Jun 16, 2015)

Wonder how many of us would have purchased a Vistana, or would it have influenced our decision?  I see very little impact to owners in the short-run, but the odds favor a less than favorable impact over the intermediate to long-term..


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## suzannesimon (Jun 16, 2015)

I think it is a mistake to lose the Starwood name and this must have been a decision of Starwood's to not want to allow the brand.  I can't believe the timeshare entity would have made that decision.  Marriott allowed the Marriott name for their spin-off.  I agree that it isn't a good sign.  Are the individual resorts going to keep the Westin/Sheridan names?


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## lizap (Jun 16, 2015)

Another argument to buy where you want to vacation..


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## okwiater (Jun 16, 2015)

I wonder what a Signature Experience is...

On the positive side, the marketing video (https://www.starwoodvacationnetwork.com/news/?IM=OWNCOM_SPIN_SVO_201506_SVN_NEWS) is quite relaxing and almost makes you forget that the name is pretty lame.


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## DeniseM (Jun 16, 2015)

Doesn't Starwood already have a product that they call "signature" something or other. It's like special events or packaged travel deals.

Another dumb move by Starwood….


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## LisaRex (Jun 16, 2015)

Yuck, yuck, yuck.

If I dumped in a bunch of dough to attain 5* with the intent of getting Platinum for Life benefits with Starwood hotels, I'd be really nervous.


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## rickandcindy23 (Jun 16, 2015)

I dislike the name.  Vistana units/ weeks have very little value.  I think of old Vistana immediately with this name, and it was not originally Starwood's product at all, was it?  

I went on a presentation many years ago, around 1998, and the product was standalone, as far as I knew then.  

Stupid name.


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## GregT (Jun 16, 2015)

suzannesimon said:


> Marriott allowed the Marriott name for their spin-off.



There is a significant franchise fee associated with it -- I think it was $50M for the first year and then 2% of gross revenues in subsequent years -- so Marriott International is still making money off of Marriott Vacation Club.

Maybe SVO couldn't make the same payment and the compromise was to go with Vistana Signature Experiences.   Marriott Vacation Club was helped that the spin-out came with >$1 billion in inventory.  With a B.

Best,

Greg


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## DeniseM (Jun 16, 2015)

I wonder if they can still use "Westin" and "Sheraton."


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## LisaRex (Jun 16, 2015)

*What's in a name?*

Interesting.

From Page 20:

A: We will enter into the License Agreement with Starwood which will, among other things, provide us with the exclusive right to use the Westin and Sheraton brands, in the vacation ownership business for the term of the agreement, and the right to use the St. Regis and The Luxury Collection brands in connection with the existing St. Regis and The Luxury Collection fractional residence properties for the term of the agreement. The License
 Agreement also will provide that we must comply with certain physical and operating standards and policies. *We will agree to pay royalties to Starwood under the License Agreement, including a fixed annual fee of $30 million and certain variable fees to Starwood.* The License Agreement will also require us to obtain Starwood’s consent to use the Westin and Sheraton brands in connection with resorts or other programs that we acquire or develop after the distribution date. We may also propose new vacation ownership projects to Starwood, including fractional projects, under one of Starwood’s brands other than Westin and Sheraton, subject to Starwood’s review and approval, in its sole discretion, and agreement on economics and other terms of a separate license agreement for any such project. Additionally, prior to conversion we will have the right to continue to operate the Transferred Properties as hotels under the Westin and Sheraton brands. After conversion, we expect the Transferred Properties to operate as vacation ownership resorts under the Westin and Sheraton brands pursuant to the License Agreement. For more information, see “Certain Relationships and Related Party Transactions—Agreements between Starwood and Vistana Relating to the Separation.”  

So, let me get this straight.  In 2015, SVO made a net income of $25 million (page 15), and in 2016, they will pay Starwood $30million PER YEAR for the right to call our timeshares Westins and Sheratons. 

Wow.


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## rickandcindy23 (Jun 16, 2015)

How much is that going to cost all of the "lucky" owners of the weeks?


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## okwiater (Jun 16, 2015)

LisaRex said:


> *We will agree to pay royalties to Starwood under the License Agreement, including a fixed annual fee of $30 million and certain variable fees to Starwood.*



That does seem excessive. Does anyone know how many units there are across the 22 properties that will become a part of VSE? My SWAG is that this will cost approximately $150 per 1/52 ownership. But would it be better not to have the Starwood/Westin/SPG affiliation in place and save the $150? Probably not...


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## suzannesimon (Jun 16, 2015)

So all 3 brands that I own have been spun off - Hyatt to Interval, Marriott and now Starwood.  This is the only one that didn't keep the brand.  Unless they do a lot of marketing, Vistana will be a no-name brand, but Westin and Sheraton  will be around for the time being.  It remains to be seen how badly this will impact sales and rentals.  Since I own Harborside, I never had the brand name, so it may not won't impact too much there.  I hope the folks at "Vistana" know what they are doing and can maintain the reputation.


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## lizap (Jun 16, 2015)

Sounds like a similar arrangement that Interval has with Hyatt..




LisaRex said:


> Interesting.
> 
> From Page 20:
> 
> ...


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## Ken555 (Jun 16, 2015)

Since they are keeping the Westin and Sheraton names, I suspect they will market the timeshares under those names as well. The new Vistana name will likely be used for contracts and general use. At least, that's what I would hope will happen, based on the little info we have at present.

In this scenario, from an outside perspective, the resorts will remain the same.


Sent from my iPad


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## grgs (Jun 16, 2015)

Ken555 said:


> Since they are keeping the Westin and Sheraton names, I suspect they will market the timeshares under those names as well. The new Vistana name will likely be used for contracts and general use. At least, that's what I would hope will happen, based on the little info we have at present.
> 
> In this scenario, from an outside perspective, the resorts will remain the same.



I agree with Ken's assessment.  If they ever do change the Westin/Sheraton branding, that would likely have a negative impact on sales, rentals, etc.

Glorian


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## cubigbird (Jun 16, 2015)

lizap said:


> I think losing the Starwood name is not a good sign..  One huge thing that concerns me is another company, such as Wyndham, stepping in to purchase Vistana, which has a lower value.



With the new name being a clear divorce from Starwood, and with fairly limited inventory as compared to DRI, Wyndham, MVC and HVC etc, I can't see VSE over the long term being that competitive and would have to be sold.  New (and many) destinations must come online!!!

As stated many times before.  Own where you want to go - they can't change that.....the rest is just "benefits."


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## wrstlpunkca (Jun 16, 2015)

I work in the hotel industry in addition to being a timeshare owner w/ Hyatt and Starwood.  I don't think this bodes well and believe they have more surprises in store for us further down the road.  It has been speculation in the hotel industry for the past few months that Starwood is going to merge or be acquired by another large hotel company.  Removing "Starwood" from the timeshare company name sets them up for any pending transaction so that the timeshare entity is no longer associated with Starwood Brands.  What other reason could it be:  If Starwood Hotels merges with Hilton, Wyndham or InterContinental Group as is the rumor in popular press, they need to have that cleaned up & removed so that the hotel company merger is clean.  All these other entities have their own branded timeshare names, so in effect the Starwood name would become redundant to a competing associated brand.  Not good news for us as this means dilution in the value of what we own of which the brand name was such a strong component.  I'm not happy.  Check this artcile:

http://www.thestreet.com/story/1315...ime-share-spinoff-and-merger-speculation.html


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## canesfan (Jun 16, 2015)

That $25 million is for first qtr. 2015. They made over $100 mil in 2014 and on track to make $135 mil in 2015. 
We'll be able to afford the agreement with Starwood.

I hate the name. It's a sad day to learn that we are losing the Starwood name. I bought because of the Starwood / Westin name.  I'm not a very happy owner right now.


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## Julian926 (Jun 16, 2015)

canesfan said:


> That $25 million is for first qtr. 2015. They made over $100 mil in 2014 and on track to make $135 mil in 2015.
> We'll be able to afford the agreement with Starwood.
> 
> I hate the name. It's a sad day to learn that we are losing the Starwood name. I bought because of the Starwood / Westin name.  I'm not a very happy owner right now.



I share the same concern.  It feels like my starwood timeshare just dropped in value overnight.   I wonder how this affects resale value.


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## YYJMSP (Jun 16, 2015)

tomandrobin said:


> Vistana Signature Experiences (VSE) does not roll-off the tongue or gives me that warm fuzzy.



Forget warm fuzzy, it's leaving a bad taste in my mouth -- what a silly name, why not just go back to Vistana Vacation Club...


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## YYJMSP (Jun 16, 2015)

suzannesimon said:


> Are the individual resorts going to keep the Westin/Sheridan names?



From the spin-off FAQs:

Will my resort continue to be operated as a Westin or a Sheraton brand?

Yes. We will retain a long-term affiliation with the Westin and Sheraton brands, ensuring the same level of quality and experiences you have come to expect.


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## Henry M. (Jun 16, 2015)

As long as the Westin and Sheraton brands aren't eliminated by a Starwood merger with another hotel chain...


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## wrstlpunkca (Jun 16, 2015)

Starwood is likely to be acquired very soon.  They need to distance the timeshare company from the brands as soon the new entity will have many more brands under one fold - depending on who the Starwood Hotel Company merges with or is acquired by....

http://www.thestreet.com/story/1315...ime-share-spinoff-and-merger-speculation.html


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## ocdb8r (Jun 16, 2015)

wrstlpunkca said:


> I work in the hotel industry in addition to being a timeshare owner w/ Hyatt and Starwood.  I don't think this bodes well and believe they have more surprises in store for us further down the road.  It has been speculation in the hotel industry for the past few months that Starwood is going to merge or be acquired by another large hotel company.  Removing "Starwood" from the timeshare company name sets them up for any pending transaction so that the timeshare entity is no longer associated with Starwood Brands.  What other reason could it be:  If Starwood Hotels merges with Hilton, Wyndham or InterContinental Group as is the rumor in popular press, they need to have that cleaned up & removed so that the hotel company merger is clean.  All these other entities have their own branded timeshare names, so in effect the Starwood name would become redundant to a competing associated brand.  Not good news for us as this means dilution in the value of what we own of which the brand name was such a strong component.  I'm not happy.  Check this artcile:
> 
> http://www.thestreet.com/story/1315...ime-share-spinoff-and-merger-speculation.html



This is the primary motivation for not retaining Starwood, but I don't share the exact same concern (or line of reasoning).  They don't want to retain "Starwood" as there is a very good chance that umbrella name will go away given the expectation Starwood is trying to sell/merge.  It's very likely whomever buys them would retain the individual hotel brand names and bring them under their own umbrella or possibly a new umbrella name. Given they are retaining/contracting rights to the individual brand names, I'm not overly concerned.  They'll focus on those for marketing.  I'm not sure I say much value in "Starwood" alone...all the value was vis-a-vis "Sheraton" and "Westin."


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## tante (Jun 16, 2015)

I better burn my spg points. If they do a 1 for 1 with any program but hyatt, i will lose a lot of value.


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## DeniseM (Jun 16, 2015)

tante said:


> I better burn my spg points. If they do a 1 for 1 with any program but hyatt, i will lose a lot of value.



You can transfer them to an airline for safe keeping.


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## YYJMSP (Jun 16, 2015)

DeniseM said:


> You can transfer them to an airline for safe keeping.



Unless you're planning on using them up in the short term, parking your points in an airline is subject to risk of loss due to the continuing devaluation in those frequent flyer programs...

Personally I try not to have more points sitting somewhere than what I expect to use within 12mos


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## tante (Jun 16, 2015)

DeniseM said:


> You can transfer them to an airline for safe keeping.



Good point. I may just book some vacations


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## canesfan (Jun 16, 2015)

I'm burning a good chunk of SPG points this summer. It couldn't be better timing!


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## Sicnarf (Jun 16, 2015)

Another scenario is that Starwood will merge with a high end brand like Intercontinental thus expanding the hotel base for point stays and potentially increasing the value of VSE timeshares.  I assume the merged hotel company will continue to manage the timeshare properties as it is today as incentive for the hotel exchange privileges.  Just my 2 cents.


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## ThreeLittleBirds (Jun 17, 2015)

I recently got some $50 Starbucks cards with my SPG points. I didn't have too, too many to worry about, but happy w/ my gift cards


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## Sugarcubesea (Jun 17, 2015)

I'm bummed that this is happening… I might have to think about selling my SDO


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## Henry M. (Jun 17, 2015)

I'd be happy going to my owned properties no matter what name they are managed under.  The important thing to me is that they be maintained to the same standards they are today. I love Maui and St. John. Hopefully they'll stay associated with a higher end hotel brand. 

A change could possibly break any schemes of buying cheap traders to go to more expensive locations, though. From the time I bought Maui I noticed they have some sort of Pacific club and can change SVN rules at will. I don't know how other properties are organized. We'll see what actually happens.


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## okwiater (Jun 17, 2015)

emuyshondt said:


> I'd be happy going to my owned properties no matter what name they are managed under.



I completely agree. Having just reached 5*, I would certainly be somewhat disappointed if something happened to significantly devalue StarOptions, Starpoints, or Elite benefits, but that was never our primary reason for purchasing. We love all the resorts in our portfolio and would be happy even if everything else went away.


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## Transit (Jun 17, 2015)

I'm cautiously optimistic in hoping that the new version of SVN or whatever SVN will be called will have a lot more new destinations added to the collection. I've enjoyed travel with SVN for many years and hope to continue to do so. This announcement leaves current owners with more questions than answers. Omitting details on how current ownership will be incorporated is frustrating.


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## tomandrobin (Jun 17, 2015)

Transit said:


> I'm cautiously optimistic in hoping that the new version of SVN or whatever SVN will be called will have a lot more new destinations added to the collection. I've enjoyed travel with SVN for many years and hope to continue to do so. This announcement leaves current owners with more questions than answers. Omitting details on how current ownership will be incorporated is frustrating.



I am taking a wait and see approach to see where the pieces fall. 

Currently, the resorts I own are worth having regardless of company. But the tie to Starwood has a very broad appeal to us.


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## tomandrobin (Jun 17, 2015)

I see others post about the hotel side being bought by another chain or merger. What about the new timeshare company being bought, merged with another timeshare entity?


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## Beefnot (Jun 17, 2015)

okwiater said:


> I completely agree. Having just reached 5*, I would certainly be somewhat disappointed if something happened to significantly devalue StarOptions, Starpoints, or Elite benefits, but that was never our primary reason for purchasing. We love all the resorts in our portfolio and would be happy even if everything else went away.



Although if the Starpoints and Elite benefits went away, I imagine you'd be a little ticked at having made developer purchases for the purpose of getting to 5*.


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## Henry M. (Jun 17, 2015)

I didn't get to 5* just for the SPG Plat benefits. I got there before I even knew TUG existed, and I don't regret owning what I currently have, even though I could have saved some money following a different order of purchases. I would have still purchased the same number of weeks at the exact same properties. 

I assumed going in the worst could happen, and each property would have to stand on its own outside of Starwood. I also assumed the resale price of the property could go to $0 (it hasn't in Hawaii and St. John), so I'm good with what I did. 

I wouldn't like losing SPG Plat, and other 5* benefits, but I'm not going to worry about it until there are actual details of what is going to happen. Maybe they get replaced by another chain's top tier benefits (e.g. Hilton), maybe not. In any case, worrying and getting angry between now and the time the changes are announced isn't going to be helpful and isn't going to change anything. Why waste time and energy being angry or worried until there is something that can actually be acted upon?


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## rhailey (Jun 17, 2015)

Is there any speculation how (or whether) this will affect how Starwood exercises its rights of first refusal on resales?


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## okwiater (Jun 17, 2015)

Beefnot said:


> Although if the Starpoints and Elite benefits went away, I imagine you'd be a little ticked at having made developer purchases for the purpose of getting to 5*.



It's true that if the Starpoints and Elite benefits go away, purchasing from the developer would not make a lot of sense in hindsight. But, we always knew that all of those perks could be stripped away at any time, so we didn't focus too closely on obtaining 5* for the cheapest cost and instead purchased ownerships we actually enjoy. WKV, WSJ, and WLR are some of our favorite resorts anywhere, and are easy traveling distance from the East Coast. We've got island, beach, desert, and mountain ownerships, as well as SBP/SVV which we can drive to.

All that said, I don't think there is a very significant risk right now that VSE will lose its affiliation with Starwood (or other parent hotel company, if the rumors of merger/acquisition are true). The VSE management team knows that one of their most effective sales techniques is the ability to sell access to the larger network of hotels, especially with only 22 resorts. As such, it seems unlikely to me that "Starpoints" conversions and Elite status are going away anytime soon. Much more likely in my opinion is the risk of points devaluation if SPG is overhauled or replaced.


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## vistana101 (Jun 17, 2015)

tomandrobin said:


> I see others post about the hotel side being bought by another chain or merger. What about the new timeshare company being bought, merged with another timeshare entity?



I am also interested to see, if a merger or acquisition occurs, what will happen to the timeshare companies, assuming the new brand has a timeshare group. I know Marriott's group is separated like VSE is going to be, but I don't know about Hilton's or IHG's, so it would be interesting to see how that would work.

Another interesting piece of info from the document regarding Aruba: "Certain entities, which historically have been included in Starwood’s vacation ownership and residential business, and whose operations are included in Vistana’s combined financial statements, will be retained by Starwood after the spin-off, as follows: *Two legal entities comprising Vistana’s ownership interests in Aruba, which consist primarily of land held for development*."


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## dioxide45 (Jun 17, 2015)

I knew about Starwood's plans to spin off their timeshare unit, but haven't really followed it. We were looking in to buying a Starwood unit a couple years back, but never pulled the trigger. I have read through this thread and have a few thoughts.


Like others, I am not big on the name of the new company. Vistana seems like they are taking a step backward. Isn't that the name of the company that Starwood acquired when they got in to the timeshare biz? It just seems old fashioned with little brand awareness.
It does seem that they will still market their properties as Westin, Sheraton, or Vistana. I would suspect with a $30MM licensing fee that they will still market themselves as the Starwood Vacation Network. The Vistana name is just the name of the parent. Brand marketing will be a lot different.
Marriott spun off their timeshare division out of necessity. It seemed with Marriott, that each division was holding each other back. The inventory assets that Marriott held were more of liabilities to Marriott International in the real estate crisis. Marriott International was taking huge write downs on this inventory.
Starwood seems to be in a different and peculiar position. With the crisis behind us, it doesn't seem that they need to spin off out of necessity. They don't seem to have the same inventory issues that Marriott did back in 2010. Perhaps there are other reasons behind it, who knows. Are they trying to make their hotel division look more attractive for a potential suitor? This seems to make the most sense since Starwood has announced they are considering options to increase shareholder value, which some could read that they are considering a sale of themselves. Though  this also set the timeshare division up for an acquisition?
The $30MM licensing fee seems rather obsessive (much like the $50MM fee for Marriott did), though with Starwood, it seems even more so in that their net income isn't enough to cover the fee. So they will be operating at a loss from day one. (Marriott's fee was $50MM ever year with an additional percentage of every sale going to Marriott International). Is Starwood's brand worth 60% of Marriott? Is their timeshare division 60% of the size of Marriott's. Wonder where they came up with the number?


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## LisaRex (Jun 17, 2015)

dioxide45 said:


> [*]The $30MM licensing fee seems rather obsessive (much like the $50MM fee for Marriott did), though with Starwood, it seems even more so in that their net income isn't enough to cover the fee.



Acc to Canesfan, "That $25 million is for first qtr. 2015. They made over $100 mil in 2014 and on track to make $135 mil in 2015."

So while I guess we can afford it, it seems like a really high price to pay for a name.


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## dioxide45 (Jun 17, 2015)

LisaRex said:


> Acc to Canesfan, "That $25 million is for first qtr. 2015. They made over $100 mil in 2014 and on track to make $135 mil in 2015."
> 
> So while I guess we can afford it, it seems like a really high price to pay for a name.



Okay. That sounds a lot better then. Marriott Vacations Worldwide had net income in 1Q15 of $57M, so it doesn't seem that the $30M that Starwood will be paying is that far off from Marriott. Though VACs number is probably adjusted to include that royalty payment.

We also thought the $50M was excessive for Marriott. Thought, at least so far, it seems to be working out for them.


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## tahoeJoe (Jun 18, 2015)

okwiater said:


> That does seem excessive. Does anyone know how many units there are across the 22 properties that will become a part of VSE? My SWAG is that this will cost approximately $150 per 1/52 ownership. But would it be better not to have the Starwood/Westin/SPG affiliation in place and save the $150? Probably not...



The annual MF on my SDO unit around $700. $150 (for esentially nothing) is a huge increase. 

I really resent paying any license fee. It is like buyimg a Mecedes with the 3 pointed star, only to have Mercedes come back in a few years and demand you pay them EVERY year to keep your hood ornament.


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## SueDonJ (Jun 18, 2015)

tahoeJoe said:


> The annual MF on my SDO unit around $700. $150 (for esentially nothing) is a huge increase.
> 
> I really resent paying any license fee. It is like buyimg a Mecedes with the 3 pointed star, only to have Mercedes come back in a few years and demand you pay them EVERY year to keep your hood ornament.



I believe in Marriott's case the licensing fee that Marriott Vacations Worldwide (the spun-off timeshare company) is paying Marriott, Int'l. (the license issuer) is coming primarily from the Management Fee with very little impact on the timeshare owners' Maintenance Fees.  The governing docs for Marriott timeshares stipulate a Management Fee of 10% of the operating/reserve costs.  Prior to the spin-off that fee went direct to MI, since the spin-off it goes direct to MVW.

We simply haven't seen measurable increases in our MF's that can be attributed to the spin-off.  (Although we are seeing slight upticks in Housekeeping fees that may be due to the less-than-7-nights stays that are available through MVW's DC Points program, introduced the year prior to the spin-off, despite MVW's assurances that any such upticks are covered by the DC Members' dues.)


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## tschwa2 (Jun 19, 2015)

I wonder if this will have any implications for Harborside.  It doesn't have the name Westin, Starwood, or Vistana.


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## suzannesimon (Jun 19, 2015)

tschwa2 said:


> I wonder if this will have any implications for Harborside.  It doesn't have the name Westin, Starwood, or Vistana.



I was afraid of the same thing, but since it's never had the brand name, we probably won't miss it.  I think it is enough that we have "Atlantis" in the resort name.


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## paluamalia (Jun 20, 2015)

*Starwood name dropping*

As long as we are all speculating....I think the Starwood name will be dropped...the Florida time shares will all be Vistana (new name), Westin and Sheraton names will remain....

I think Starwood will acquire intercontinental and begin to use that name..
No resorts or hotels are currently Starwood...
They have Elements,  Aloft, W, and four points...they also have the luxury collection.they will add Intercontinental to their brands

I think the Starwood name is just confusing.....I hope they do drop it.
SPG will probably cease to exist and be called something else.....

Again....all speculation, no real Knowledge!


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## russby68@yahoo.com (Jun 20, 2015)

*Diamond buying Vistana?*

Diamond resorts has been telling investors they would like to consolidate the timeshare industry. How would we feel about being acquired by Diamond?


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## dioxide45 (Jun 20, 2015)

paluamalia said:


> As long as we are all speculating....I think the Starwood name will be dropped...the Florida time shares will all be Vistana (new name), Westin and Sheraton names will remain....
> 
> I think Starwood will acquire intercontinental and begin to use that name..
> No resorts or hotels are currently Starwood...
> ...



I think that makes sense. Starwood is an oddity, they have not hotels carrying the brand of "Starwood". Unlike Hilton, Wyndham and Marriott. Marketing the timeshares as Sheraton, Westin and Vistana makes sense. I think this is all part of a bigger plan for Starwood. Even if they are acquired or merge with another in the industry, the Westin and Sheraton brands will live on. Keeping those names on the timeshares makes sense.


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## dioxide45 (Jun 20, 2015)

russby68@yahoo.com said:


> Diamond resorts has been telling investors they would like to consolidate the timeshare industry. How would we feel about being acquired by Diamond?



I don't own Starwood, but I think this would be the worst thing that could happen. While Diamond is known for buying distressed properties and upping the MFs, they really can't do that with Starwood/Vistana. MFs are high enough and the properties are probably a step above many Diamond properties.

Diamond seems to be one of those in acquisition mode, if they aren't careful, they could get burnt come another recession. We know another recession will happen, it is never a matter of if but when. These things are always cyclical. It could may or may not be as bad as the Great Recession.


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## LisaRex (Jun 20, 2015)

dioxide45 said:


> Marketing the timeshares as Sheraton, Westin and Vistana makes sense.



There are only 3 outliers that don't have Westin or Sheraton in their name: Lakeside Terrace, Harborside and Vistana's Beach Club.  The other resorts with Vistana in their name are Sheratons, including the one I own (SVV).  Choosing to take the name shared by their lower tier resorts is a stupid marketing move, IMO.  Yes, they are nice, but the name has no cache.


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## Transit (Jun 20, 2015)

Just wandering. How long after Marriott made their spinoff announcement were the actual usage details made to owners?


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## dioxide45 (Jun 20, 2015)

Transit said:


> Just wandering. How long after Marriott made their spinoff announcement were the actual usage details made to owners?



Marriott didn't change usage details with their spinoff. They announced changes to their usage, DC Program, in June 2010 and announced the spinoff in 2011.


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## trexmdr (Jun 20, 2015)

*Spoke with a secondary sales rep*

I'm now at the WKORV. Went to the owners update and they did the full court press for mr to upgrade to elite 4 which I politely declined.
Anyway there was no mention of the name change or about the new property until I asked. Only asked about the new property.
She glossed over the master trust of the new property and that it would not be fee simple. Also that they would be more expensive so I should buy a studio at WKORV for 34k to bump me up to 4 star. They just happened to have, and in very limited supply supposedly, a unit that would fit the bill.
So I do believe they have properties and are holding back on them for the upgrades to elite 4 or 5.
In fact if you wanted to buy anything from the developer they would sell it to you at these obscene prices.
Plenty of OV 2bdr WKOVR for 25k on the open market. Especially with first right of refusal by Starwoods.
Also the new property will not be lock off. 2 or 3 bdr and you have to use the whole unit. No separate entries and kitchens. Maui says too many cars due to lock off studios being rented out.


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## Larry M (Jun 20, 2015)

tomandrobin said:


> There are a number of risks associated with the spin-off and ownership of Vistana common stock. We discuss these risks under “Risk Factors” beginning on page 22.



That's a "Safe Harbor" section required by the Securities and Exchange Commission (SEC) on all Forms 10-K, 10-Q, etc. They have to list every possible risk that "might" happen, to forewarn potential stock purchasers. You often see things like:

Although our business is not located near a fault line and there has never been an earthquake near here, we could suffer an earthquake and resultant financial losses.
Although we have always had excellent labor relations, we could suffer a strike and resultant financial losses.

Read the Risks section--there might be something about real risks there, like pending lawsuits or class action suits--but take most of it with a grain of salt.


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## bankr63 (Jun 21, 2015)

tomandrobin said:


> Interesting read....
> 
> I am not a fan of the new name.
> 
> ...



Perhaps they should have chosen Vistana International Signature Experiences (VISE)

Vise (noun)

1:  any of various tools with two jaws for holding work that close usually by a screw, lever, or cam 

2:  something likened to a vise <economic vise of slow growth and rampant price increases — David Milne>  (Merriam-Webster)

3: where VSE would like to keep your wallet until every dollar is squeezed out.


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## gdlipp (Jun 22, 2015)

*Breach of Contract*

I happen to disagree with the terms of Starwood's spinning off their timeshare division.  Question to the readership is, does this constitute a breach-of-contract?  If so, is there a legal justification to do a quit-claim-deed transfer with Starwood?


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## okwiater (Jun 22, 2015)

gdlipp said:


> I happen to disagree with the terms of Starwood's spinning off their timeshare division.  Question to the readership is, does this constitute a breach-of-contract?  If so, is there a legal justification to do a quit-claim-deed transfer with Starwood?



No. You don't have a contract with Starwood; your homeowners association does.


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## daviator (Jul 1, 2015)

*SVN and SPG are important...*

I'm pretty nervous about the spin-off.  We are four star elite and own at WKORV, WKORVN, and WDWV.  But unlike, apparently, a lot of people, my decision to buy into SVO had everything to do with the ability to use the ownership at any of the other SVO properties (and future properties) as well as to convert to SPG points and access the hotel network.  I first bought into WKORV more than a decade ago and have stayed there maybe three or four times.  We never wanted or intended to go back to the same resort year after year.  It was the flexibility of the program that sold me.  (Although the conversion to SPG points isn't a GREAT deal, it's sufficient to get decent value out of the points in those years where we choose to exchange for them.)

But now that Starwood and SVO (to be Vistana, again) will be separate companies, it seems inevitable that SVO/Vistana will have to "buy" SPG points from the hotel company when owners trade for them.  The hotel company will have an interest in maximizing revenue and increasing the cost after the initial terms expire.  It seems almost inevitable that the option to trade for hotel points will either go away at some point, or be significantly devalued.  And for us, that guts a big part of the value of ownership.

We'll probably be fine on the SVN trades – by whatever name they end up being known – unless the new company sells out or sells resorts off piecemeal, in which case all bets are off.

There was earlier discussion in this thread about the name of the new company, and personally I don't think it's that important.  Clearly, for a variety of possible reasons I can think of, Starwood doesn't think they should share their corporate name with the new company, and although the value of the Vistana brand is not huge, it's probably better than choosing some new, made-up name that would start out with zero brand recognition.

The real value is in the resort branding – particularly Westin – and another key reason I chose SVN was because I felt the resorts would be operated and maintained to the Westin standard, because to do otherwise would tarnish their valuable brand.  I still think that.  Timeshares used to have a lousy reputation, and one of the many reasons was that many were poorly operated and maintained.  I felt, and feel, that putting a well-respected name on the property provides a lot of security to owners that their investments will be well kept and renovated when appropriate.  Once the initial term of the agreement between the two companies expires, will it still be in Starwood's interest to share their brand with Vistana?  That's a scary question too.


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## okwiater (Jul 1, 2015)

daviator said:


> I'm pretty nervous about the spin-off.  We are four star elite and own at WKORV, WKORVN, and WDWV.  But unlike, apparently, a lot of people, my decision to buy into SVO had everything to do with the ability to use the ownership at any of the other SVO properties (and future properties) as well as to convert to SPG points and access the hotel network.  I first bought into WKORV more than a decade ago and have stayed there maybe three or four times.  We never wanted or intended to go back to the same resort year after year.  It was the flexibility of the program that sold me.  (Although the conversion to SPG points isn't a GREAT deal, it's sufficient to get decent value out of the points in those years where we choose to exchange for them.)
> 
> But now that Starwood and SVO (to be Vistana, again) will be separate companies, it seems inevitable that SVO/Vistana will have to "buy" SPG points from the hotel company when owners trade for them.  The hotel company will have an interest in maximizing revenue and increasing the cost after the initial terms expire.  It seems almost inevitable that the option to trade for hotel points will either go away at some point, or be significantly devalued.  And for us, that guts a big part of the value of ownership.



I don't think this is all that much of a change from the way things have always worked. Even under the same corporate umbrella, SVO has always had to "buy" SPG points from the hotel company -- both as purchase incentives and when owners trade for them. But remember that in exchange for the SPG points, an owner is giving up their usage rights. Even as a separate company, I am certain that those usage rights will be monetized as effectively as possible, likely by continuing to allow Starwood "the hotel company" to rent the rooms for dollars.



daviator said:


> We'll probably be fine on the SVN trades – by whatever name they end up being known – unless the new company sells out or sells resorts off piecemeal, in which case all bets are off.
> 
> There was earlier discussion in this thread about the name of the new company, and personally I don't think it's that important.  Clearly, for a variety of possible reasons I can think of, Starwood doesn't think they should share their corporate name with the new company, and although the value of the Vistana brand is not huge, it's probably better than choosing some new, made-up name that would start out with zero brand recognition.



I completely agree -- the Vistana name was likely chosen simply because there were no other viable alternatives that had any name recognition, and for whatever reason, it's not going to be practical to keep an affiliation with the Starwood brand.



daviator said:


> The real value is in the resort branding – particularly Westin – and another key reason I chose SVN was because I felt the resorts would be operated and maintained to the Westin standard, because to do otherwise would tarnish their valuable brand.  I still think that.  Timeshares used to have a lousy reputation, and one of the many reasons was that many were poorly operated and maintained.  I felt, and feel, that putting a well-respected name on the property provides a lot of security to owners that their investments will be well kept and renovated when appropriate.  Once the initial term of the agreement between the two companies expires, will it still be in Starwood's interest to share their brand with Vistana?  That's a scary question too.



I don't think it's as scary a question as you do. Starwood has emphasized time and again that they are after an "asset light" strategy, in which they make money essentially by licensing and managing properties, rather than owning them. A long-term affiliation with Vistana falls right in line with that strategy, particularly when you look at the licensing fees the new entity will be paying to Starwood. It would make no sense to sever the relationship with Vistana. What scenario do you envision could undermine the economics after the initial term of the agreement?


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## daviator (Jul 2, 2015)

Thanks for the thoughtful reply.  I wasn't thinking about the value of the relinquished week, and you're right — that will more than pay for the value of points that Vistana would buy from Starwood in cases where an owner trades for SPG points.  So I feel better about this.  Actually, give what the units in Maui are renting for, the best play might be to reserve the unit at a popular time, rent it to someone at market value, and use the money to pay for hotels wherever your real vacation happens to be.  And you'd then earn more SPG points on the hotel stays.  A bit of hassle in that, of course.  Can't remember: will SVO allow you to change the name on a booking after it's been made?

I suppose you're probably also right on my second worry.  So long as the new entity does, indeed, maintain the properties to the high standards expected by Starwood and by the timeshare owners — and it's hard to imagine that they wouldn't — I'm not sure why the two companies would not continue to have a strong partnership.  But it just seems as if when companies "spin off" from parents, the close ties which exist often degrade over time.  What if Vistana gets an opportunity to open or operate some hotels, which might directly compete with Starwood hotel properties?  There could be instances where both companies want to pick the same fruit.

I'm a little unclear – under the new arrangement, Starwood would neither own NOR operate the timeshare properties, right?  Or is the deal that Vistana would own them and the vacation ownership business, but that Starwood-branded properties would be managed by Starwood under an operating agreement?


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## Wanttobe5StarElite (Jul 2, 2015)

Based on what I understand from the news release, and the hotel business...

Starwood - will basically charge management and franchise fees, etc. to the operators and owners of hotels.

Hotel owners are independent companies (most of the time).

Starwood wants to be "asset light", so they are selling the corporate owned hotels.

In short, Starwood, does not want to own any actual hotels and real estate.

They basically collect money from hotels using their brand, whether it's bookings, franchise fees, license fees, etc.

In fact, I would guess most hotels have to pay Starwood (or Marriott for that matter), the "right to use" their computer systems.  That is why most hotels have the same format.

That is usually a separate "fee" for being part of the Starwood family.


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## Wanttobe5StarElite (Jul 2, 2015)

Basically, just think of the hotel business, as a fast food franchise.

That is basically what they are.

The franchisees have to pay the franchisor all the fees involved to be part of the business.


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## gregb (Jul 7, 2015)

Wanttobe5StarElite said:


> Basically, just think of the hotel business, as a fast food franchise.
> 
> That is basically what they are.
> 
> The franchisees have to pay the franchisor all the fees involved to be part of the business.



I believe it is more than that.  Not only does Starwood "sell" them the use of their trademarked names (Westin, Sheraton, etc), they actually operate the hotels.  Hotel staff are actually Starwood employees, or under contract to Starwood.  I believe this is how Marriott and Hilton have operated for years.  Starwood is just emulating their competition.

Greg


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## canesfan (Jul 7, 2015)

Employees are not Starwood employees. They are the management companies employees. Many hotels will have a owner and a management group. They will do business as a particular chain. Very few hotels are owned by the actual hotel corporation. 
Where I have concerns is if Starwood gets bought or merges with another hotel chain. How will that affect the agreement? But that has always been a factor., somewhat. It's just emphasized now that we will be 2 separate companies.


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## Wanttobe5StarElite (Jul 7, 2015)

It won't affect much, initially.

A lot of these hotel franchise and management contracts are quite long term.

A lot of times, developers with real estate will build a hotel and sign up with a hotel company.

So if you are building a hotel, it should be at least a 5/10/20 year deal or more.

As well, for example, Starwood just sold the Phoenician.  Again, basically, some company will now manage the hotel, all the while paying Starwood all the fees they require to be part of the brand.


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## Scott & Laura (Jul 9, 2015)

I agree with Greg Starwood is emulating Marriot

Wallstreet rewards management companies without cash tied up in assets as they can better whether a recession   

The spinoff is to reduce Starwoods fixed assetts. Marriot generates only about 7.5% of its profits from assets it owns---Starwood generates about 26% of its profits from assetts it owns. In a recession Marriot has little exposure compared to Starwood so Marriot trades at 29 times PE  and Starwood 27

I do hate the name --The word Vistana to me means cheap Disneyworld overcrowded timeshare


Scott


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## gdlipp (Aug 27, 2015)

*Starwood Spinoff & Deedback Questions*

Starwood Hotels & Resorts Worldwide, Inc.  said the company expects to complete the planned spin-off of its vacation ownership business into a separate publicly traded company in the fourth quarter of 2015. Starwood Vacation Ownership, which will be named Vistana Signature Experiences, Inc.  Here's my question to the TUG membership.  I feel that the spinoff is a breach of contract or trust between the member-owners and the company.  Is this grounds or justification to pursue a deed back to Starwood before the spinoff goes through?  Any suggestions on who to contact?


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## sjsharkie (Aug 27, 2015)

I've posted this before on the Marriott board.  It also applies to Starwood and their hotel model.

There's generally 3 classes of properties:

1. Starwood owns and manages the property.
2. Starwood manages the property only.
3. Starwood's flag is up for the property, but owner or their agent manages property under certain standards (pure franchise model).

Most properties fall in #2 or #3.

-ryan


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## DavidnRobin (Aug 27, 2015)

gdlipp said:


> Starwood Hotels & Resorts Worldwide, Inc.  said the company expects to complete the planned spin-off of its vacation ownership business into a separate publicly traded company in the fourth quarter of 2015. Starwood Vacation Ownership, which will be named Vistana Signature Experiences, Inc.  Here's my question to the TUG membership.  I feel that the spinoff is a breach of contract or trust between the member-owners and the company.  Is this grounds or justification to pursue a deed back to Starwood before the spinoff goes through?  Any suggestions on who to contact?



Considering they are a multi-million publicly traded corporation with many highly paid lawyers, and very complex customer contract - I am sure it is futile, and a costly and lengthy process if pursued.

Why not contact SVO Corp. and ask if they will take back your VOI due to the spinoff - and see how they respond?


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## sjsharkie (Aug 27, 2015)

gdlipp said:


> Starwood Hotels & Resorts Worldwide, Inc.  said the company expects to complete the planned spin-off of its vacation ownership business into a separate publicly traded company in the fourth quarter of 2015. Starwood Vacation Ownership, which will be named Vistana Signature Experiences, Inc.  Here's my question to the TUG membership.  I feel that the spinoff is a breach of contract or trust between the member-owners and the company.  Is this grounds or justification to pursue a deed back to Starwood before the spinoff goes through?  Any suggestions on who to contact?


I fail to see how you would have any standing in a breach of contract case.  You as an owner have authorized the HOA to act on your behalf.  If anything, you would have to persuade the HOA to file a breach of contract suit with Starwood as the management company.  I believe this is not remotely possible.

As David mentions, you may just be able to deed back your VOI without such justification assuming there is no mortgage on the property.  No harm in asking.

-ryan


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## lizap (Aug 27, 2015)

If the new FLEX program ends up hurting mandatory owners by reducing inventory and hence our ability to use SOs to vacation at, WKORV, WKORVN, and WPORV,  I DO feel that there are sufficient grounds for a class action suit by mandatory owners.  Mandatory units were sold with Starwood promoting the use of SOs.  This situation could be remedied by Starwood/Vistana allowing mandatory owners to buy into FLEX at a reasonable price.




sjsharkie said:


> I fail to see how you would have any standing in a breach of contract case.  You as an owner have authorized the HOA to act on your behalf.  If anything, you would have to persuade the HOA to file a breach of contract suit with Starwood as the management company.  I believe this is not remotely possible.
> 
> As David mentions, you may just be able to deed back your VOI without such justification assuming there is no mortgage on the property.  No harm in asking.
> 
> -ryan


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## sjsharkie (Aug 27, 2015)

lizap said:


> If the new FLEX program ends up hurting mandatory owners by reducing inventory and hence our ability to use SOs to vacation at, WKORV, WKORVN, and WPORV,  I DO feel that there are sufficient grounds for a class action suit by mandatory owners.  Mandatory units were sold with Starwood promoting the use of SOs.  This situation could be remedied by Starwood/Vistana allowing mandatory owners to buy into FLEX at a reasonable price.


My point was that you would have to go through the HOA to do this.  An individual owner or group of owners is not likely to be able to sue Starwood directly since they are not party to the contract IMHO.  

I see this having a remote chance of a group owner(s) getting their case to the stage of being certified as a class action, and even slimmer than remote chance of winning that class action.

-ryan


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## LisaRex (Aug 27, 2015)

lizap said:


> If the new FLEX program ends up hurting mandatory owners by reducing inventory and hence our ability to use SOs to vacation at, WKORV, WKORVN, and WPORV,  I DO feel that there are sufficient grounds for a class action suit by mandatory owners.  Mandatory units were sold with Starwood promoting the use of SOs.  This situation could be remedied by Starwood/Vistana allowing mandatory owners to buy into FLEX at a reasonable price.



Have you read your Owner's Agreement? It's written very clearly several times throughout the document that what you are purchasing is the right to use the week you bought in the season you bought in the size unit you bought at the resort you bought.  Starwood cannot interfere with that.  Everything else, including the entire SVN program, can be altered or dismantled, with virtually no recourse available to the owners. 

Nonetheless, once again, in theory the new FLEX program will not hurt inventory.  Think about it.  If you have 52 weeks x 100 units x 10 resorts, you have 52,000 owners, and one week available to each owner, to either use or exchange.  If you are one of 52,000 owners, you potentially have 51,999 other owners potentially vying for 51,999 exchanges.  

If 50% of those units leave network #1 to go to network #2, then you have 52 weeks x 50 units x 10 resorts, or 26,000 owners.  Fewer weeks, yes, but 1:1 fewer owners too.  If you are one of 26,000 owners, you have 25,999 other owners potentially vying for 25,999 exchanges.  

You are not out anything because the 26,000 owners who left for network #2 cannot exchange into network #1's inventory.  It's only if you intermingle the two that there'd be grounds for complaint. You might have a complaint if there was evidence that Starwood cherry picked certain high season weeks, but that has little to do with the Flex program and everything to do with the integrity of the developer.  Besides, how in the world are you going to obtain evidence to support that claim?


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## lizap (Aug 27, 2015)

A huge problem IMO is Starwood is NOT being upfront with its owners of its intentions.  I strongly suspect they do NOT have a clear strategic vision of what their plans are...Even if they have some sort of vision, it does not include the TS division, as evidenced by their desire to spin it off and ultimately sell it.  The Westin brand has always been a pristine brand.  I'm afraid that may be on the verge of changing, and NOT for the better.  So many of us will need to decide if we want to be a part of this change..  Based on the limited information we have at this point about the FLEX program, Marriott did a much better job of managing the changes it made to its TS division several years ago and effectively communicating these changes to its stakeholders..




LisaRex said:


> Have you read your Owner's Agreement? It's written very clearly several times throughout the document that what you are purchasing is the right to use the week you bought in the season you bought in the size unit you bought at the resort you bought.  Starwood cannot interfere with that.  Everything else, including the entire SVN program, can be altered or dismantled, with virtually no recourse available to the owners.
> 
> Nonetheless, once again, in theory the new FLEX program will not hurt inventory.  Think about it.  If you have 52 weeks x 100 units x 10 resorts, you have 52,000 owners, and one week available to each owner, to either use or exchange.  If you are one of 52,000 owners, you potentially have 51,999 other owners potentially vying for 51,999 exchanges.
> 
> ...


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## suzannesimon (Aug 27, 2015)

I remember being in the Bahamas planning my daughter's wedding when Starwood was born.  There was a Westin and a Sheraton on the property and the staff was trying to explain what Starwood was going to be.  It was a combo of Westin for upscale travelers and Sheraton was going to be a brand for a younger clientele.  I couldn't wrap my head around what the point of Starwood was other than a shared website for the 2 already-excellent brands.  

As long as Sheraton and Westin continue to manage the timeshares, I'm fine with it.  I've been through the Marriott transition and know they can't destroy our investment with illegal point sales.  I just don't like the Vistana name and wished they'd gone with a Westin name.


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## VacationForever (Aug 27, 2015)

suzannesimon said:


> I remember being in the Bahamas planning my daughter's wedding when Starwood was born.  There was a Westin and a Sheraton on the property and the staff was trying to explain what Starwood was going to be.  It was a combo of Westin for upscale travelers and Sheraton was going to be a brand for a younger clientele.  I couldn't wrap my head around what the point of Starwood was other than a shared website for the 2 already-excellent brands.
> 
> As long as Sheraton and Westin continue to manage the timeshares, I'm fine with it.  I've been through the Marriott transition and know they can't destroy our investment with illegal point sales.  I just don't like the Vistana name and wished they'd gone with a Westin name.



You can see that the greatest gripe is coming from some who have bought expensive resale mandatory resorts with intent to book at higher MF resorts in SVN.  I think if one owns a fixed week or bought at a resort to stay then there is little impact.


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## lizap (Aug 27, 2015)

Well you can't be possibly talking about me.  We have exchanged into Hawaii only once and have plans to use SOs to go there only one more time...BUT there are many who have purchased mandatory resorts for that purpose, and there's nothing wrong with that since the SVN system was designed to allow people to use SOs to vacation at other resorts. 





sptung said:


> You can see that the greatest gripe is coming from some who have bought expensive resale mandatory resorts with intent to book at higher MF resorts in SVN.  I think if one owns a fixed week or bought at a resort to stay then there is little impact.


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## VacationForever (Aug 27, 2015)

lizap said:


> Well you can't be possibly talking about me.  We have exchanged into Hawaii only once and have plans to use SOs to go there only one more time...BUT there are many who have purchased mandatory resorts for that purpose, and there's nothing wrong with that since the SVN system was designed to allow people to use SOs to vacation at other resorts.



Yes, Starwood came up with mandatory designation for a handful of resorts and marketed that way.  They then regretted doing so as they wanted to make resale worthless so that people will keep going back to the developer to make new purchases in order to be able to book within SVN.  I don't think mandatory resort owners will be affected with current resorts/inventory under Flex Option.  I can see limited to no availability of new desirable resorts in SVN as they will be fully booked or closed to fully booked during Home Option period.


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## lizap (Aug 28, 2015)

Seems to me that Starwood is trying to circumvent the very system it created and marketed.  NOT a great way to build brand loyalty.  Maybe that's why they're changing their name...



sptung said:


> Yes, Starwood came up with mandatory designation for a handful of resorts and marketed that way.  They then regretted doing so as they wanted to make resale worthless so that people will keep going back to the developer to make new purchases in order to be able to book within SVN.  I don't think mandatory resort owners will be affected with current resorts/inventory under Flex Option.  I can see limited to no availability of new desirable resorts in SVN as they will be fully booked or closed to fully booked during Home Option period.


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## daviator (Aug 28, 2015)

*Which week?*

I remember when I bought my first SVO week more than a decade ago, I asked about the week shown on the deed (all of my weeks are floating.) The Starwood people told me not to worry about that, it was just for the county and it was unimportant.  The two subsequent SVO purchasers, I didn't even ask.

Now I'm wondering if there is any chance that floating owners will eventually get screwed and locked into the week's shown on their deeds.  I couldn't even tell you when mine are without finding the deeds, but fixed-week ownerships would have little to no value to me.  

Is my concern that the floating weeks could get jettisoned after some sort of merger or acquisition of VSE/SVO justified?  Now that I think about it, I don't think that owners have any contract with Starwood guaranteeing their weeks will always float. We don't have any contract with Starwood period.  All we really have are our deeds to the weeks we purchased, and all of those contain fixed and specified week numbers. 

I took a promise from Starwood as gospel.  But now it's not going to be Starwood any more' and soon there will be enough distance between VSE and Starwood that we won't have any ability to go back and sue them.

Having said all of that, I'm not sure what the advantage to VSE/SVO would be in eliminating the floating weeks, I think most of the owners might defect.  It just makes me nervous to be dependent on benefits which are seemingly not guaranteed to continue.


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## LisaRex (Aug 28, 2015)

lizap said:


> A huge problem IMO is Starwood is NOT being upfront with its owners of its intentions.  I strongly suspect they do NOT have a clear strategic vision of what their plans are...



I certainly agree with you on this.  I just don't think that the lack of a clear vision is actionable.  

To me, the biggest hit in the gut was that the developer didn't follow the rules of the timeshare game.  The timeshare plan is to create a resort, sell individual weeks at a huge profit, then turn the resort over to the HOA, and move on to a new resort. The big bucks were supposed to be made in the initial sales phase, followed by modest profits made by their exchange program fees.   

Starwood started out following the usual plan, only they made their resorts swankier and their brochures glossier.  And people bought into them. They gladly paid tens, and sometimes even hundreds, of thousands of dollars for the right to use one week per year. They (including me!) justified the purchase because the MFs were so reasonably priced.  On paper it looked good because we believed that we were investing in a "prepaid vacation."  

And after raking in all those profits, and creating all these relatively happy owners, what did Starwood do? The second the resort sold out, they started increasing MFs significantly, to the point of ridicule.  They wanted their cake and they wanted to eat it, too.  And they did.  They FEASTED on the cake.  They made unbelievable profits up front and now continue to make incredible profits by manipulating the system for their gain.  

To put it in perspective, Hawaii owners are paying $120,000+ per year to "maintain" a 1200 square foot condo.  Harborside owners are paying even more.  SVV owners are paying nearly $75,000 a year for their villas in Orlando. I can't imagine how nice my home would look if I had that kind of budget each year...and my home is 4x as big!  I can tell you one thing with certainty:  It would have a proper stove, a swim-up bar, and the furniture would not be laminated wood over press board. 

Yes, after nearly my 10th year of ownership, it's very clear that Starwood went into this venture blindly and figured it out as they went along.  They made some serious mistakes along the way, including the mandatory/voluntary thing and not being more thoughtful on their season and SO allotment.  And then, when everything had finally stabilized, they polluted the water even further by mixing in a Flex system, which is creating a lot of uncertainty and fear among its loyal owners. 

They really could write a book on incompetency. 

But... I'm still an owner because I like their resorts. And if I get too disgruntled, I know that I can unload my VOI to someone else who'll be lured in by their swanky resorts.


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## SMHarman (Aug 28, 2015)

Mostly true but HRA MF is also paying to maintain a massive theme park they get free entry to. 

Even Disney timeshare in Orlando don't include inclusive park passes. 

And from a running and maintainance perspective. $2-3 per square foot in NYC is not unusual to cover heat water insurance doorman gym etc so on a 1200 sqft building that is $3600 a month.  Energy costs in many destinations will be higher than NYC. 

Add cleaning and repair and furniture renewal and you are getting up there. 

Is MF high or do people defer more saving for home expenses than they think?  How much does the average home owner put aside each month to replace HVAC plant or furniture or siding or the roof. Most stuff it in general savings and grumble when the AC breaks down about the repair cost. 

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## VacationForever (Aug 28, 2015)

I do not believe the MFs are unreasonable.  I live in a large home, with cleaning service every other week and it costs $35K (property tax, homeowner insurance, utilities, cable, HOA...) to keep the home and that is not counting repairs.  Repairs cost about 10K a year (This year I just replaced the water heater with a tankless water heater, replaced a !@#$ water softening system that we put in 3 years ago with a new brand/system; a year before put in a new furnace/air-con system even though the home was only 5 year old, the year before replace an entire bathroom because bathroom was leaking and made it into a walk-in shower).  3 years ago we also put in an expensive solar panel system after we put in a pool.  There is always something.  

My gripe with SVO / Vistana is that they screw existing owners because want to make more money from new buyers.


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## lizap (Aug 28, 2015)

Lisa, I always enjoy reading your posts. They are always thoughtful and informative and almost always 'right on the mark'.




LisaRex said:


> I certainly agree with you on this.  I just don't think that the lack of a clear vision is actionable.
> 
> To me, the biggest hit in the gut was that the developer didn't follow the rules of the timeshare game.  The timeshare plan is to create a resort, sell individual weeks at a huge profit, then turn the resort over to the HOA, and move on to a new resort. The big bucks were supposed to be made in the initial sales phase, followed by modest profits made by their exchange program fees.
> 
> ...


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## okwiater (Aug 28, 2015)

LisaRex said:


> To put it in perspective, Hawaii owners are paying $120,000+ per year to "maintain" a 1200 square foot condo...I can't imagine how nice my home would look if I had that kind of budget each year...and my home is 4x as big!  I can tell you one thing with certainty:  It would have a proper stove, a swim-up bar, and the furniture would not be laminated wood over press board.



The price may seem high, but I don't think it's as outlandish as you portray since you must also pay your share of the resort amenities, not just for your 1,200 square foot condo. That means beach front real estate, insurance, elevators, cleaning staff, front desk staff, maintenance staff, coi ponds, etc. Plus island utilities. None of that stuff is free.

Is there room to find efficiencies and lower the maintenance fees? Yes, I think there probably is. And yes, it is a problem that Starwood takes a percentage of MFs as its management fee, since that incentivizes fee increases and disincentivizes cost-savings. But your comparison of resort condo fees to your home maintenance budget is apples-to-oranges.


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## DeniseM (Aug 28, 2015)

It is high - do a direct comparison to similar units at the Marriott right up the beach, and the Westin MF is higher than the Marriott MF.


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## okwiater (Aug 28, 2015)

DeniseM said:


> It is high - do a direct comparison to similar units at the Marriott right up the beach, and the Westin MF is higher than the Marriott MF.


I didn't say it wasn't high. I said that LisaRex's comparison to her home maintenance budget was unfair.


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## DeniseM (Aug 28, 2015)

okwiater said:


> I didn't say it wasn't high. I said that LisaRex's comparison to her home maintenance budget was unfair.



I agree - that's why I'm comparing it to a similar resort instead of a private home.


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## bizaro86 (Aug 28, 2015)

According to the registration documents for Vistana: http://www.sec.gov/Archives/edgar/data/1644949/000119312515283303/d907952dex991.htm#toc907952_13

they earned $29 MM in the resort management segment in the first quarter of 2015. Making the somewhat lazy but probably reasonable assumption that their earnings are about the same each quarter suggests that they make $116 MM per year managing things. The same document has a table showing all of the resorts and units, and (including residence clubs) there are 5,078 units. That is $22,843 in profit per unit, or $439 per timeshare week.

Interestingly, $9MM of the profit was from "Resort and Network Management" which is probably their management fees. The other $20 MM was from "Resort Operations and Ancillary Services" which suggests to me that they are selling something to the resorts for more than it costs them, and maybe all sorts of things. I think it is very likely remodel costs are in this bucket, and insurance, but I'm not sure what else they would be taking a margin on.

Of course, $439/week wouldn't be evenly across the portfolio, I'm sure they make more per week in Hawaii than they do at SDO, but these numbers were filed with the SEC, so I would expect that they're accurate in aggregate.


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## YYJMSP (Aug 28, 2015)

daviator said:


> I remember when I bought my first SVO week more than a decade ago, I asked about the week shown on the deed (all of my weeks are floating.) The Starwood people told me not to worry about that, it was just for the county and it was unimportant.  The two subsequent SVO purchasers, I didn't even ask.
> 
> Now I'm wondering if there is any chance that floating owners will eventually get screwed and locked into the week's shown on their deeds.  I couldn't even tell you when mine are without finding the deeds, but fixed-week ownerships would have little to no value to me.
> 
> ...



I believe the verbage for fixed and floating use is part of the association at the property, not part of the SVN club, so it is deeded to your ownership.

Looking at our deeds, they all specifically contain text describing usage period (annual, every other, etc), and fixed/floating for usage and unit.


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## DavidnRobin (Aug 28, 2015)

They started selling Nanea yesterday (as known - no LOs) - 3 and 2Bd OF (no 1Bd), and 2 and 1 Bd Resort View.
During 8-12 month HomeResort period - can check in any day and stay as long as HomeResort Options allow.
These Nanea Options will not give privilege to reserve WKORV/N at 8-12 months.

Oops - wrong thread - will repost...


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## DeniseM (Aug 28, 2015)

Did you go to a presentation?

Do you have prices, etc?

Side note:  Folks, when you go to a presentation, you can use your cell phone to take pictures of documents while the sales person is out of the room.


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## DavidnRobin (Aug 28, 2015)

I am going to start a new conversation... On the WKORV-WPORV thread that I started


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## daviator (Aug 29, 2015)

DeniseM said:


> I agree - that's why I'm comparing it to a similar resort instead of a private home.



My mom owns at the Marriott Ocean Club up the road from WKORV (where I own) and I've stayed there a number of times and often visit there – they are often using their unit at the same time we're at ours and we do lots of back and forth.

  It is not really a comparable resort.  If you compare the maintenance fees for their new "villas" (which are a more comparable product to WKORV, though the rest of the resort is still not nearly as nice) I'll bet they are a lot closer.

The rooms in Marriott Ocean Club are converted hotel rooms.  No full kitchens, no stoves, small dorm-room refrigerators, kind of tacky cheap furniture and fixtures, etc.  The comparison to WKORV is not completely without value, but don't kid yourself that it's apples to apples.


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## DeniseM (Aug 29, 2015)

Correct - you would compare WKORV to the new towers at the Marriot.

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