# Marriott Timeshare outlook



## rfb813 (Feb 17, 2009)

From Marriott International's FQ408 conference call: (MAR)

Our timeshare business was particularly hard hit by the economic climate. Contract sales of our core timeshare product declined 37% during the quarter while sales of our fractional and residential products were negative reflecting $150 million of sales reversals related to anticipated contract cancellations at three luxury projects.

We have the least optimism around [the luxury] product class. That product class is more like whole residential. As a consequence it is more likely to be sticky in a weakened demand environment and will take some time to come back. Therefore of all the possibilities in the future we think the likelihood of starting new luxury projects any time soon is very, very slim.

We don’t expect that we will start many core [residential] timeshare projects either in the near term but we are hopeful we will see demand come back to the point where returns have improved significantly and that business can go forward. That certainly is much more possible to happen sooner than the luxury fractional does.

Having said that in January where we have the Ritz-Carlton product we were pleasantly surprised by some of the fractional volume we saw and I think it gives us some optimism for the year. Partly that is a function of these resorts reaching opening... They are easier to sell obviously when they are right there before you.


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## Lawlar (Feb 17, 2009)

*There Will Be Blood*

It is not surprising to see timeshare sales drop dramatically.  We were in a housing speculative frenzy where prices no longer had any basis in reality.  People were buying million dollar homes with blue-collar incomes.

In Arizona, homes that were “valued” at over $400,000 can now be bought for $150,000.  So it makes no sense to buy Marriott’s Desert Springs resort at $35,000 for a week, - a nebulous right to “own” the privilege to stay in one of the units for a limited time, with high maintenance fees - when for the cost of four or five weeks you can buy an entire home.

In California, the hills from Los Angeles to San Diego have thousands of McMansions that are beyond the economic means of the people living in them.  My best friend has a home in Chula Vista that was appraised at $700,000 in 2005 that is now worth, according to Zillow, $280,000 – and there are LOTS of homes in his neighborhood that have been listed for sale at those reduced prices, and they are not selling. Many are in foreclosure which will push prices even lower. 

The truth is that timeshares were the froth at the top of the speculative bubble.  And there is very little substance in the froth.  Yes, the owners will still have the right to enjoy their stays at the resorts, but the prices of timeshares will drop more dramatically than home prices.  People need homes but timeshares are a luxury item of questionable value.  

The only way Marriott can hope to continue to sell timeshares is to dramatically reduce the prices of the weekly rates.  If they do that they will alienate many of Marriott’s timeshare owners.  I don’t see a happy ending to this story.


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## Latravel (Feb 17, 2009)

That's why i'm so happy I have the points option.  I really don't care about the economics around the timeshare.


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## Beverley (Feb 17, 2009)

rfb813 said:


> From Marriott International's FQ408 conference call: (MAR)
> 
> Our timeshare business was particularly hard hit by the economic climate. Contract sales of our core timeshare product declined 37% during the quarter while sales of our fractional and residential products were negative reflecting $150 million of sales reversals related to anticipated contract cancellations at three luxury projects.
> 
> ...



Can anyone please explain some of the terminology . ... "core residential" .... "luxury product class"?  Time share - that's what we have when we own a "week" .... fractional I understand  to be when you purchase a 5 week or 12 week interest .... what is residential?  condo hotels? or ??.  Is their luxury product class Ritz Carlton? 

Thanks guys.

Beverley


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## jerseyfinn (Feb 19, 2009)

Lawlar said:


> It is not surprising to see timeshare sales drop dramatically.  We were in a housing speculative frenzy where prices no longer had any basis in reality. . . .  The truth is that timeshares were the froth at the top of the speculative bubble.  And there is very little substance in the froth.  . . . People need homes but timeshares are a luxury item of questionable value.
> 
> The only way Marriott can hope to continue to sell timeshares is to dramatically reduce the prices of the weekly rates . . . I don’t see a happy ending to this story.



A lot of "frothy" assumptions here as well, but I do not disagree that timeshare in general ( not just MVC) have some difficult days ahead of them.

So let's first put some *perspective* on the housing thing and general and then step into the TS theme. There are *75 million *mortgage holders of residential property in the US. The latest WSJ figures say that *12 million* are either distressed/in foreclosure/hold negative equity. Given that the housing market is still floating downwards, the US govt. is anticipating *15 million *mortgages in distress by year's end. So this means that *80%* of US mortgage holders are above water and holding their own. But they too face the consequences of economic downturn as companies scale back and work hours are pared down and jobs lost.  So things in general are indeed bad, but not what I call catastrophic ( troubling and disenheartening might be better words ). And as you note, the lion's share of the  "dysfunctional from day one" mortgages are in California, Phoenix, & Vegas regions with Florida thrown in with its speculators.

The latest moves in DC to address the mortgage situation is going to have a lot to do with how quickly or slowly the entire housing market will stabalize and recover. It is my own opinion that if Congress exercises its usual heavy-handed approach that the housing market will take longer to set its price and hence prolong the misery. I have my doubts about how a shotgun approach is going to target distressed mortgage holders while excluding the people who need to get out of those homes they've not paid a dime on for months to a year -- they've already had their "subsidy".  I just don't think that the federal government is capable of sorting this out to exclude the dysfunctinal from the viably distressed owners.

But this is just a surmise on my part and we'll all see how it plays out. It is in all of our interests that the govt gets this thing right as the wrong moves will only intensify the situation.

So we TS owners are a small and inconsequential part of the equation ( in the government's eyes and the larger scheme of things ). But those TS sales prices were based upon concrete logic at the time and people made real investments with their hard-earned dollars. And yes, TS sales prices do indeed reflect regional prices ( which in turn reflect consumer demand and the health of the pocket books ). So I think it's fair to say that TS will be amongst the last segments of the property market to recover since every TS purchase decision is made with discretionary dollars which at this moment are not floating around in people's pockets.  Marriott's latest fiscal reports reflect both the depth of the decline in the TS market as well as Marriott's resolve to ride things out for now. It's nice to see at least one party out there who remains rational and focused in these distressing times. If only some of this would rub off on Congress and the boss in DC.

Barry


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## jerseyfinn (Feb 19, 2009)

Beverley said:


> Can anyone please explain some of the terminology . ... "core residential" .... "luxury product class"?  Time share - that's what we have when we own a "week" .... fractional
> Beverley



Bev,

Gleaning the FY 2008 Marriott report ( on PDF page 17 of the document ) Marriott lists the various segments of their TS product line which helps to see the idea.

The "core" product is MVC with 49 resorts -- that is what the vast majority of folks here on TUG own. Horizons consists of 2 resorts. Those 'luxury' and 'luxury residential' categories derive from the Ritz-Carlton Club Fractional (10 resorts), Grand Residences Fractional (2 resorts), Ritz-Carlton Club Residential ( 1 resort ), &  Grand Residences  ( 1 resort ).

After reading through the entire FY 2008 statement ( which does not imply that I understand all of it  ), Marriott seems to be saying that those "luxury" segments are the hardest hit and most likely to lay low for quite some time. Hence Marriott has no plans to add any more of these to the portfolio & while not walking away from the projects, does not seem too interested in it at the moment. It's quite a change given the report on TS and fractional ownership that Marriott issued one year ago which projects robust growth in that segment -- then again Mr. Madoff "made off" with the money of those folks so inclined to purchase in that product segment ( but they still have their mansions in Palm Beach so all is not lost   ).

The core TS product with MVC is also significantly depressed at the moment -- no surprise since it's a discretinary purchase. The report seems to be saying that Marriott has already undertaken some cost-cutting with the core product and expectations for 2009 are not high. It's more of a wait-and-see attitude which IMO is encouraging to those of us who own the core product. Marriott does indeed have control over certain aspects such as delaying new building at resorts yet to reach build-out,  delaying/canceling acquisition/development of new resorts, & utilizing unsold inventory on Marriott.com and previews. Not all is happy in the land of MVC since the numbers of canceled contracts is rocketing, but Marriott has already written these costs into the bottom line, so the numbers one sees in the report are real. Sounds like not too many buyers are gonna be walking in the door this year, but for those of us who own, our delimma is more one of when to occupy and whether to trade.

take care,

Barry


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## bw3 (Feb 19, 2009)

*timeshare outlook*

Jerseyfinn, thanks for all the answers to Beverlys questions.  I had the same questions but was too embarrassed to ask.  And thanks for reading through the entire Marriott report.

I recall buying from Marriott at Grande Ocean (HHI) back in 1992.  They were about to break ground and a summer (platinum) oceanside week was $14,700.  We were told the construction plan was 8 or 10 years.  It was finished in 3.  The unfinished resorts will be an eyesore for an extended time.  The completed resorts may have more value for this reason alone.  The only reason I bought from Marriott in the first place was because they completed the resorts so quickly.  But the only way to fix the current glut of timeshare is to sell off all the excess inventory.  And I don't know why anyone would want to purchase at St. Thomas or Las Vegas when auction prices are half.  Some prices are softer than others.  I saw a Gold week at Grande Ocean on eBay for $8,200 (did not meet reserve).  That does not seem to be as much a bargain as a summer week at Surfwatch for $10,100.


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## Beverley (Feb 19, 2009)

Barry,

Thanks soooo much.   

By the way, how is your newest acquisition, Oceana Palms?  Has it opened and will you be occupying soon?  Hopefully this will not be one of those delayed openings.  I remember how excited you were to "swap out" a couple of the OP weeks.

Bev


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## jerseyfinn (Feb 20, 2009)

Beverley said:


> . . . By the way, how is your newest acquisition, Oceana Palms?  Bev



Funny you should ask  . We're heading down to Ocean Pointe tonight for our owners stay. Sauntering the 1/2 mile up the beach to Oceana Palms is on our "to do" list. I should also have some new photos when we get back.

One thing which Marriott mostly avoids ( though not completely ) is getting entangled with distressed lenders who tank last Fall. Oceana Palms had it's finances in order and the first building grew like a weed. They are on-target for a 2010 opening. We've already got two weeks reserved there for this same period next year  . I've no clue about how far sales got before the economy froze over, but I should have lots of answers when we get back.

One thing we are "stuck" with are platinum Ocean Pointe weeks we're trying to sell. I'm honestly not expecting much in that regard for the next 2 years, though we are in the Marriott resale queue. My theme song is a Rolling Stones standard, "Time is On My Side"   In the mean time, we either rent, occupy, or trade those weeks. I'm not someone who is gonna panic and sell low on E-Bay, but like many folks trying to sell, we're captives of the market which at this moment is dominated by ( unfortunately ) distressed owners who are compelled to sell low.

We live in interesting times.

Barry


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## jerseyfinn (Feb 20, 2009)

bw3 said:


> . . . The unfinished resorts will be an eyesore for an extended time.  The completed resorts may have more value for this reason alone . . .



BW3,

I share your concerns about the future of TS. To be honest, I am not anticipating good news for TS for the next few years as it is gonna take time for this mess to work it's way out of the mainstream economy and TS is at the end of that food chain.

That said, as to what unfinished resorts are gonna look like and how they will function is not so cut and dry. It will vary resort by resort and by specific region as the economic impacts and portents for recovery vary. 

We own at Playa Andaluza which opens building #5 this spring and has two more buildings to go. Obviously there won't be much sales action in Spain in 2009, so there is certainly not going to be any additional construction for the next couple of years. But Playa's location in Costa del Sol remains a high demand destination and this means that recovery will happen, only no one knows how quickly ( 300 mil Europeans will indeed create a travel industry in regions like Costa del Sol much as Florida remains a destination for Americans ). People may not be purchasing, but folks will come down either via trades or via Marriott.com and MVC previews, keeping the resort viable and leaving ideas/impressions in the minds of presently wary consumers ( attests the economy of scale that Marriott brings to MVC ). Playa has one huge positive in this situation. The resort GM completed most of the infrastructure work 18 months ago. Playa has all of it's swimming pools, decks, restaurant, gym/spa & other facilities virtually completed. Guests are not going notice the incomplete area of the resort nor will this interfere with the function of Playa. At Playa, we have a resort which is essentially "whole" except for the final two buildings.

Oceana Palms is going to be an interesting work in progress to watch. My own guess is that the second building ( which is behind the ocean front building ) is not going to happen for a few years. There may some aesthetic issues in terms of landscaping, but the resort should function well -- actually those first few years could be "quiet times" for owners and traders coming into the resort. But then again, O Palms is directly on the beach which also mitigates some of the indeterminism of build-out.

Other might add insights about resorts such as St. Kitts which is converting existing buildings and is located astride a Marriott hotel or Marco Island or KoOlina.

I think that the bigger worry for an owner at a resort yet to reach build-out is who is on the hoof for unsold inventory. That's where it's a good thing having a big name like Marriott in the picture. Marriott covers that side of the equation and newer resorts receive MF subsidies. That 5th building at Playa was ready for occupancy in 2008, but Marriott held the building back until sales caught up and enough new owners came into the picture and could carry the MFs. Certainly a sign of a partnership between owners and MVC.

Well, just a few thoughts as we all try to batten down and ride out these very unpleasant economic times. It is indeed alarming to ponder that TS may hold still for several years. But if that happens, it will also be because this sub-prime mess and the economic cascade it causes shatters the confidence and dreams of millions. We of the Baby Boom generation will certainly be very wary. But how will those of the me, myself, and I generations below us respond?  -- they have afterall been weaned on malls and conspicous consumption for decades. Can they resist instinctive instant gratification or will they eventually open their wallets and hopefully throw some change in the MVC hat?

Barry


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## bw3 (Feb 20, 2009)

*Maintenance fee subsidies*

Barry,

You hit on my major concern going forward.  Marriott is not under any contractual obligation to keep paying these amounts.  I think the subsidy on the 2009 Frenchman Cove was $434 for a 2br and $496 for a 3br.  As you mentioned at Playa, if they have the major amenities completed and the location is prime, the resort should not suffer.  Said in another way, it would still look appealing and draw vacationers.  

My kids may love the idea of owning timeshare.  They are already asking about which one they inherit in the will.  They don't seem to have any intention of buying any on their own.

I will give you an update on the St. Thomas progress after I visit the place the first week of March.

Bob


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## SpikeMauler (Feb 20, 2009)

bw3 said:


> Jerseyfinn, thanks for all the answers to Beverlys questions.  I had the same questions but was too embarrassed to ask.  And thanks for reading through the entire Marriott report.
> 
> I recall buying from Marriott at Grande Ocean (HHI) back in 1992.  They were about to break ground and a summer (platinum) oceanside week was $14,700.  We were told the construction plan was 8 or 10 years.  It was finished in 3.  The unfinished resorts will be an eyesore for an extended time.  The completed resorts may have more value for this reason alone.  The only reason I bought from Marriott in the first place was because they completed the resorts so quickly.  But the only way to fix the current glut of timeshare is to sell off all the excess inventory.  And I don't know why anyone would want to purchase at St. Thomas or Las Vegas when auction prices are half.  Some prices are softer than others.  I saw a Gold week at Grande Ocean on eBay for $8,200 (did not meet reserve).  That does not seem to be as much a bargain as a summer week at Surfwatch for $10,100.



Where did you see an auction for Frenchman's Cove?


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## winger (Feb 20, 2009)

bw3 said:


> Barry,
> ...
> 
> My kids may love the idea of owning timeshare.  They are already asking about which one they inherit in the will.  They don't seem to have any intention of buying any on their own.
> ...


 good for you, bob - you taught them well ;


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## Beverley (Feb 20, 2009)

jerseyfinn said:


> Funny you should ask
> 
> One thing we are "stuck" with are platinum Ocean Pointe weeks we're trying to sell. I'm honestly not expecting much in that regard for the next 2 years, though we are in the Marriott resale queue. My theme song is a Rolling Stones standard, "Time is On My Side"   In the mean time, we either rent, occupy, or trade those weeks. I'm not someone who is gonna panic and sell low on E-Bay, but like many folks trying to sell, we're captives of the market which at this moment is dominated by ( unfortunately ) distressed owners who are compelled to sell low.
> 
> ...



I can think of worse things to happen than to be "stuck"   with OP.  OP is quite a nice resort.  I do know what you mean though as we have our silver Barony listed with Marriott presently.  I expect it could take awhile.  We did not have an urgent need to sell when we listed it.  

We planned on picking up another summer week on HHI and decided we would have to pick one to eliminate.  We currently have 6 with Marriott, one with WorldMark and one with Hilton.  Eight is a bit more than we want so we picked one of the Marriotts to purge. We went ahead and bought the extra summer week as you went ahead with Oceana and now we will just sit tight for the eventual sale.

Enjoy your OP visit.

Take care

Beverley


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## pwrshift (Feb 20, 2009)

I'm spending a couple of nights at the JW at Grande Lakes Orlando and was surprised to see active construction going on right next door at the new TS Lakeshore Reserve at Grande Lakes.  I've already had 2 calls from salespeople so it's active - one said they have sold 20 suites this week alone, if that's true.  What a beautiful place for a TS -- right next to a JW and a Ritz.  Apparently there will also be private residences as well as Ritz fractionals...but right now the TS is a 'go' and there was a lot of contruction activity when we arrived yesterday...very different with townhouses and casitas etc.  

This Grande Lakes is quite the complex if you haven't seen it.  I had absolutely the best NY Steak dinners I've ever had at Primo's here tonite ($170 for 2 plus tip) and the dining room was completely sold out until the 9 pm seating.  The hotel was busy yesterday as well as today (Friday) which surprised me due to the US economy.  

My daughter wanted to got to Prime Outlets up International Blvd. and we had to hunt for a good parking spot.  It was packed and it's a huge mall.  I was surprised by this as, from the news reports I've seen in Canada about the US economy, I thought retailers and high end restaurants were having tough times down here.  In one of the high end 'last call' clothing places they were selling Prada jeans for $1500 instead of $3000 and there were line ups to buy.  From what I've seen Orlando seems like a boom town, not bust.

Driving from Toronto on 75 there was a lot of infrastructure construction of bridges and road expansion/repair -- and the guys were actually working!  I assume this was underway prior to Obama's programs but it was good to see America at work again.  We stopped one night in the Marriott Covington (KY) and it was sold out.  The Atlanta Marquis key restaurant was so busy they wouldn't accept walk ins.

I did notice that the hotel rates are very attractive right now ... I got the JW in Grande Lakes for only $207 a night ... the Marquis Atlanta for $180 a night including Concierge access.  But parking fees were up as was room service charges from previous years ... and the damn $16 a night for internet access.  So I guess if they don't make it on room rates they get it on other services you also need if you stay there...like $27 for valet at the Marquis.

Brian


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## JimC (Feb 21, 2009)

pwrshift said:


> ...The hotel was busy yesterday as well as today (Friday) which surprised me due to the US economy.
> 
> My daughter wanted to got to Prime Outlets up International Blvd. and we had to hunt for a good parking spot.  It was packed and it's a huge mall.  I was surprised by this as, from the news reports I've seen in Canada about the US economy, I thought retailers and high end restaurants were having tough times down here.  In one of the high end 'last call' clothing places they were selling Prada jeans for $1500 instead of $3000 and there were line ups to buy.  From what I've seen Orlando seems like a boom town, not bust.....
> Brian



There are two markets in Orlando.  The tourism district and everywhere else.  Restaurants along I-drive and near the theme parks are holding their own.  Venture out to where locals typically eat and it is another story.  Same with shopping.  Orlando had a decrease in visitors last year, first dip since 2001.  We were lucky that foreign travel held up nicely to mitigate the drop in domestic visitors.  That is likely to change this year as the exchange is not as good and the rest of the world is in recession as well.  Job losses i Orlando are quite significant.


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## PerryM (Feb 21, 2009)

*Snap, crackle, and pop....*

I’m still waiting for my “Official” bursting of the timeshare bubble – when Marriott lowers the normal sales price of ANY Marriott by 1¢  (Not a special sales price but their normal sales price that usually increases every Friday).

As bad as I thought timeshares are going to be hit I fear I am way off base – it could be a total debacle of the entire TS industry.  The TS industry will be the least of our worries.

I’m at the Maui Ocean Club last week and this week and the folks are collecting their 10k MRPs or $75 in coupons but I keep walking by the sales center looking for those happy new owners with a smile on their face and a pile of books in their arms – haven’t seen one in 1 week but maybe I will see one this week.

Westin, down the Ka’anapali beach, has shut down their WKORV-North-North location.  The cutting and filling of the landscape is almost done and the project goes into mothballs at the end of Feb from what I hear.

So somebody PM me when Marriott makes it official - *waiting results in falling TS prices from the developer*.  That's the end of the 40+ year "Price increase this Friday so buy now" and the popping of the timeshare bubble.


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## bw3 (Feb 21, 2009)

*resale, not an auction*

Sorry for the mistake.  I said auction when I meant resale.  The link I was referring to was http://www.myresortnetwork.com/Timeshares-For-Sale/St-Thomas/Caribbean/Marriott-Frenchmans-Cove/


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## SpikeMauler (Feb 21, 2009)

bw3 said:


> Sorry for the mistake.  I said auction when I meant resale.  The link I was referring to was http://www.myresortnetwork.com/Timeshares-For-Sale/St-Thomas/Caribbean/Marriott-Frenchmans-Cove/



No problem. I figured that's what you meant. I check ebay every now and then and have never seen any Frenchman's Cove up for bid.


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## IuLiKa (Feb 22, 2009)

Is Frenchman's cove a 30 year lease? or you own it for ever? I know is US, but do not know about the terms of the deed. 
I would love to get one there, but I think I want Tahoe before that


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## cwtkm3 (Feb 22, 2009)

Barry - You paint a positive picture for Playa Andaluza. When the project started the resort was supposed to be complete in 2009 (according to my founder membership paperwork).

My concerns about the Spanish resorts are that most of the owners are from the UK. The maintenance fees for Playa 2BR this year are going to hurt us Brits - over £800. The resort fees haven't gone up that much - it's due to the strong Euro/weak pound.

I don't think Playa is worth this much maintenance (MMBR comes in a bit cheaper by about £50). 

Marriotts rack rental rate is currently about £2400 for a June week due to the exchange rate. No-one in their right minds would pay this. You can pick up 2BR apartments from owners along the coast for about £500 per week as lots of people bought their second holiday homes but rely on rental income to pay their mortgages. Supply outstrips demand. 

For people who bought cheap timeshares - they're very lucky to be able to trade into resorts such as Playa that my maintenance fees are supporting. Okay - so they won't get there in the summer but you only have to look at the number of cheap getaways to see how easy it is to visit. Dave's just had a fabulous Feb holiday at Playa - personally a time I'd never considered before due to the weather but if I did go I wouldn't use my week - I'd buy a getaway.

I can see many Brits de-faulting on their fees this year which won't be good news for the resort.


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## davewasbaloo (Feb 22, 2009)

cwtkm3 said:


> My concerns about the Spanish resorts are that most of the owners are from the UK. The maintenance fees for Playa 2BR this year are going to hurt us Brits - over £800. The resort fees haven't gone up that much - it's due to the strong Euro/weak pound.



I know Paris is a killer this year due to the exchange rate - fees are 934 euro this year (ouch) - for the US readers, $1400.

That said, I do still feel that MVCI in Europe delivers great value. I had to stay in a rundown shoe box at the Manchester Thistle 2 weeks ago and paid £85 ($130) a night and hated it. Heck, even a Holiday Inn Express is £69 ($105) a night. For a vacation with my family, I still feel like MVCI delivers great value and much greater value than the rip off prices places like Disney command.


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## SpikeMauler (Feb 22, 2009)

IuLiKa said:


> Is Frenchman's cove a 30 year lease? or you own it for ever? I know is US, but do not know about the terms of the deed.
> I would love to get one there, but I think I want Tahoe before that



Frenchman's Cove is Deeded(you own it forever).


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## jancurious (Feb 22, 2009)

Barry raises an excellent point about the maintenance fee subsidies.  Marriott is on the hook for them at these unsold resorts.  Look at the wording of the Gift of Time offer I received from Marriott a few days ago:

"As a valued Owner, we are pleased to make this time available to you for a _low nightly maintenance fee_, depending on the villa size and the selection of either a 
4-, 5- or 7-night vacation. Each villa will receive a complimentary departure clean and you may elect to receive a daily tidy clean for a minimal fee."  

The low nightly maintenance fee is in italics in their offer!

Jan

P.S.  The resorts being offered are Grand Chateau, Canyon Villas, Desert Springs I & II, Shadow Ridge, Newport and Timber Lodge.


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## jerseyfinn (Feb 25, 2009)

cwtkm3 said:


> Barry - You paint a positive picture for Playa Andaluza. When the project started the resort was supposed to be complete in 2009 (according to my founder membership paperwork) . . .



I'm not a founding member, though we purchased when Playa celebrates it's first birthday and the second building is just completed. No one suggests/tells us nor do I have in writing anything which asserts a 2009 build-out at Playa. I do recall talk of a *projected* window which would fall between 2009 and 2011. Mr. deGrebber & his team have always been pretty forthcoming when it comes to keeping owners advised about what is and what is not happening at Playa. I don't think that MVC "guarantees" build-out dates at any resort as it's all a matter of anticipated sales projections which in today's economy renders projections of all sorts moot.



cwtkm3 said:


> My concerns about the Spanish resorts are that most of the owners are from the UK. The maintenance fees for Playa 2BR this year are going to hurt us Brits - over £800. The resort fees haven't gone up that much - it's due to the strong Euro/weak pound.



Actually about 45% of Playa's owners are from the UK. Americans, Spaniards, Germans, and Middle Eastern folks each make up about 10% segments of Playa owners with other European/the Americas owners filling in the rest. The board at Playa is however 4/5ths Brits at the moment.

As to the currency exchange issues. You pay in GBP , I pay in US $, others pay Canadian $, many Europeans in Euros, and others in their own currency. You're talking about currency issues which will have a variety of effects upon all owners. What that effect is will depend upon your currency and where it falls/rises in the international queue. In any case, none of this is a function of MVC. One must be well aware of the risks/consequences of foreign ownership and foreign travel costs. I've payed my Playa and Marbella MFs for years at a relatively disadventageous rate to me. This year, the currency exchange gods are kind to us regarding our Playa and Marbella fees. That's just the way it is in the world. 



cwtkm3 said:


> . . . For people who bought cheap timeshares - they're very lucky to be able to trade into resorts such as Playa that my maintenance fees are supporting.  I can see many Brits de-faulting on their fees this year which won't be good news for the resort . . .



Look, I honestly do not know how to characterize your remarks. Perhaps you've misunderstood timeshare or you are ambivilant about your purchase decision. I certainly hope that you're not bitter that other folks come into Playa on trades or that you quibble about what they've paid as that leads to a lot of midnight agida and lost sleep. 

I emphasize with anyone feeling the pinch in these difficult times. But people gotta make their own decisions about their fiscal affairs. I would hope that folks can come up with the annual MFs since that's but a fraction of what they've paid for their week. We are each kings of our own castle . . . some will pull the drawbridge up, others empty the moat, and a few might jump in.

All I can suggest is that it is crucial that folks have clear goals of ownership *before* they purchase TS of any type. Know what you can and can not do with TS and determine if the TS slipper fits or not. And all owners should remember that their resort GM's & associates are valuble resources of information & they can answer questions or clarify worries. Playa's GM, Mr. de Grebber is a very hands-on guy who works closely with his owners. He can certainly tell you what is and what is not regarding the resort. Seek him out and chat with him during your next visit. 

Barry


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## PerryM (Feb 25, 2009)

*RING - RING - RING (The sales bell goes off)*

We've been at the Maui Ocean Club for 9 days now and yesterday I finally saw Ma and Pa signing a sales document - Whoopee!

Walked by the sales gallery to get some soda for our mugs and 2 hours later the same Ma and Pa were there, hunched over the table, while the salesrep spun tale after tale on how lucky they were.

I wanted to shout "You're paying twice as much as you should" but the salesrep has a family to feed and Ma and Pa will probably find out after a while and the next purchase will be via eBay.

Well, wanted to report one sale - is this the bottom of the implosion?

P.S.
The airport reported 51 degrees the other day - a new low.  Global warming of course...


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## Glynda (Feb 25, 2009)

*So hard...*



PerryM said:


> We've been at the Maui Ocean Club for 9 days now and yesterday I finally saw Ma and Pa signing a sales document - Whoopee!
> 
> Walked by the sales gallery to get some soda for our mugs and 2 hours later the same Ma and Pa were there, hunched over the table, while the salesrep spun tale after tale on how lucky they were.
> 
> ...




It's so hard to keep quiet, isn't it?  I sat at the indoor pool at The Fountains in Orlando in January watching as Bluegreen salesman after salesman brought couples/families to see the pool.  I was so tempted to say something.  Oh well, I was a sucker once too. :ignore:


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## davewasbaloo (Feb 25, 2009)

jerseyfinn said:


> Playa's GM, Mr. de Grebber is a very hands-on guy who works closely with his owners. He can certainly tell you what is and what is not regarding the resort. Seek him out and chat with him during your next visit.
> 
> Barry



He is awesome, such a gracious host at the owners reception, and very enjoyable to speak with. I like him and his team, and he is one of the reasons why we had such an enjoyable vacation and his property is next in line of our list when the time comes to purchase another week.


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## davewasbaloo (Feb 25, 2009)

Funny, I do not regret in the slightest buying direct, I know I am in the minority.


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## Latravel (Feb 25, 2009)

I don't think you're in the minority in the real world, maybe just by a small percentage here on TUG.  We're just not as outspoken.  I don't regret buying direct either and am thoroughly enjoying my timeshare and all the travel benefits that go along with it.


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## PerryM (Feb 25, 2009)

davewasbaloo said:


> Funny, I do not regret in the slightest buying direct, I know I am in the minority.





Latravel said:


> I don't think you're in the minority in the real world, maybe just by a small percentage here on TUG.  We're just not as outspoken.  I don't regret buying direct either and am thoroughly enjoying my timeshare and all the travel benefits that go along with it.




Since 93% of all timeshares sold are from the developer YOU are in the majority.

I have, for almost 10 years now, advocated developer sales for newbies and there are many reasons to buy from the developer even as a seasoned pro.

However, I don't recommend anyone buy any timeshare now - they will just get cheaper and cheaper for the next year or so.  Even $1 eBay auctions are really a huge negative sale for the seller now (they pay closing costs, MFs, and throw in a week of usage).

Next year you will be able to get even more for your money.

Renting is getting so cheap that many/most are for the MFs - why buy at all?


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## jerseyfinn (Feb 26, 2009)

davewasbaloo said:


> Funny, I do not regret in the slightest buying direct, I know I am in the minority.




No, you are far from a minority for those who are satisfied developer purchasers. Some folks just want to belittle and berate those who purchase developer, but the bottom line is that there are two paths to MVC ownership, and both are valid. It all comes down to how an individual does the timeshare math as they plot out their goals of ownership.

Barry


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## winger (Feb 26, 2009)

Also, some buy direct to enjoy the "marriott" experience, of not having to deal with the hassles that may come up during resale purchases, and to be sure if anything happens in the future (e.g. internal trading system perks for direct purchasers, etc.), they will be taken care of...


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## ondeadlin (Feb 26, 2009)

Lawlar said:


> In Arizona, homes that were “valued” at over $400,000 can now be bought for $150,000.



Is that REALLY true? 

I mean, I live in Michigan, and you can't even say that here.


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## tlwmkw (Feb 27, 2009)

ondealin,
I believe this is true- I know it has happened in Florida and Vegas too.  The real question is what is the "true" value of any property?  Who can say because it all depends on what people are willing to pay.  The interesting thing is that many of these houses are selling at less than replacement value which is hard to get your mind around.
tlwmkw


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## PerryM (Feb 27, 2009)

*Winners and losers....*

So folks are scared to death to buy or sell but buyers can always wait and sellers can’t wait many times thus falling prices is the result.  So if you have a great FICO score and a steady cash stream, (job), then you have a one-in-a-lifetime opportunity to buy at firesale prices.

But why buy now when one year from now prices will probably be even lower?  

Sellers, you’re SOL…

People need to live in a home, there are plenty of homes, plenty of buyers, and plenty of sellers.  Look for 4 - 8 years more of this stuff.


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## SueDonJ (Feb 27, 2009)

I'm another in the camp of happy developer purchasers who are now askeered to purchase anything in this market, but are watching residential prices very carefully.

A side note:  Wow, Perry, you hit the tri-fecta of controversial topics in this thread -  timeshare developer over-pricing, global warming, AND government interference/bailouts!  I'm impressed!    (No sarcasm or baiting intended, at all, just found it amusing.)


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## PerryM (Feb 27, 2009)

SueDonJ said:


> I'm another in the camp of happy developer purchasers who are now askeered to purchase anything in this market, but are watching residential prices very carefully.
> 
> A side note:  Wow, Perry, you hit the tri-fecta of controversial topics in this thread -  timeshare developer over-pricing, global warming, AND government interference/bailouts!  I'm impressed!    (No sarcasm or baiting intended, at all, just found it amusing.)



Thanks, I try hard.

All of this are impressions we have and very little logic to go with it.  Doesn't matter what the topic, logic is scarce and emotions are plentiful.

I simply ask folks to look past emotional assumptions and use logic more.


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## Latravel (Feb 27, 2009)

Prices aren't falling in my area - I wish they were since i'm looking to buy.  Houses in the San Marino/Pasadena area are outrageously expensive.  I'll just keep buying timeshares.


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## gmarine (Feb 27, 2009)

Latravel said:


> Prices aren't falling in my area - I wish they were since i'm looking to buy.  Houses in the San Marino/Pasadena area are outrageously expensive.  I'll just keep buying timeshares.



I follow the prices of real estate in the major markets. Through December the median price of home in CA fell 38% from the previous December. Certain areas like Pasadena faired better but are still down 20%. Unfortunately  very few, if any, areas of the country have been spared by the drop in real estate prices.


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## Latravel (Feb 27, 2009)

Certain parts of Pasadena are not very nice while certain parts contain houses up to $20-50 million.  The bad parts are down, the nice parts haven't gone up as much.  What's the statistic for San Marino, CA?


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## Hoc (Feb 27, 2009)

Latravel said:


> What's the statistic for San Marino, CA?



Hot and smoggy, with a 50% chance of earthquake.


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## winger (Feb 28, 2009)

Hoc said:


> Hot and smoggy, with a 50% chance of earthquake.


We need a huge quake to shake the house prices down in those zillionaire neighborhoods 

How did those home prices fair in last major southern cal quake (the Northridge one) ?

I know here in San Fran area, the large '89 shaker (loma prieta) caused alot home prices to fall - everyone got scared and RAN away


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## Lawlar (Feb 28, 2009)

*A Lot*



winger said:


> We need a huge quake to shake the house prices down in those zillionaire neighborhoods
> 
> How did those home prices fair in last major southern cal quake (the Northridge one) ?
> 
> I know here in San Fran area, the large '89 shaker (loma prieta) caused alot home prices to fall - everyone got scared and RAN away



Actually, in L.A., the prices fell a lot in the San Fernando Valley.  I had my office there and we filed a lot of bankruptcies that were related to the quake.  

The condos in the complex where I lived (Woodland Hills) went from $250,000 to about $110,000 (we had to wait 1 1/2 years before the insurance companies started to rebuild our complex and then we had to move out for 6 months due to construction).  Some owners were so shaken that they refused to return.

Those condo owners in complexes that didn't have earthquake insurance, simply walked away.

Single family residences fared much better.  The suffered less damage and the owners had more control over making repairs.  

Still, prices were falling during that period because no one wanted to buy anything since it took a good deal of time to determine what structures were safe and to forget that another quake might occur at any time (funny how people quickly forget - no one thinks about it now).


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## Latravel (Mar 1, 2009)

Winger, are you from the bay area?  My husband is from the Belmont area, we still have our place there.  It seems like everyone up there is an engineering type!


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## john_olson_aqrj (Mar 1, 2009)

*MVCI Hidden Discounting - Trade-Ins*



PerryM said:


> So folks are scared to death to buy or sell but buyers can always wait and sellers can’t wait many times thus falling prices is the result.  So if you have a great FICO score and a steady cash stream, (job), then you have a one-in-a-lifetime opportunity to buy at firesale prices.
> 
> But why buy now when one year from now prices will probably be even lower?
> 
> ...



MVCI is discounting prices, I think.  There are doing it via the back door of Marriott trade-ins of existing properties.  We looked at the new MVCI at Grande Lakes in Orlando at Xmas.  We were offered $21,900 trade-in for our Silver 3 bedroom Ocean Vista week at SurfWatch on Hilton Head.  That is slightly more that we paid for it a few years ago.  To get that price though we had to buy 2 two bedroom weeks in Platinum season for over 50 K.  Since the actual market price for SurfWatch is much less, it seemed like about a 10 K discount to me on the new property.  We passed due to the economy and my 401(k) but it was tempting.

An "interesting" situation is developing on private rental MVCI weeks on Hilton Head for this summer.  Rates at MVCI resorts other than Grande Ocean are very soft.  Our Ocean Front week at SurfWatch for 4th of July is not drawing *any* interest on RedWeek, TUG, or myresortnetwork.  We have dropped our price by $1,000 below what we rented it for last year and still have not had any serious offers.

I get an email from RedWeek when new rental postings are made, I am amazed at the number this year.  It seems like there are double the number of rentals and 1/3 the number of renters this year.  We will just bank it with Interval if we can't get our price so you may see some exchange activity on HHI this summer if you are interested in going.


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## kjd (Mar 1, 2009)

*No trade in for resales?*

I talked with sales staff at Timberlodge in September about trade ins.  They claimed that only certain properties and units would be considered.  They also said that no resale properties would be eligible for trade ins.  They made the point that a resale for their purposes was a "non-existant" property.

I didn't know if that was Marriott policy or smoke from the sales staff.  I thought that it was another attempt to deliniate the difference between resale and direct purchase benefits.  Anyway, I collected my 10,000 MRP.


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## ldanna (Mar 1, 2009)

jerseyfinn said:


> No, you are far from a minority for those who are satisfied developer purchasers. Some folks just want to belittle and berate those who purchase developer, but the bottom line is that there are two paths to MVC ownership, and both are valid. It all comes down to how an individual does the timeshare math as they plot out their goals of ownership.
> 
> Barry



I like "both are valid". There's no minority or majority, you did what was best for you. A year ago, no discussion like this would take place because resales where different. 

We have to respect that if points aren't of any good for me, it might be really good for someone else. Or maybe I can't wait 7 months that an unkwon broker transfer my week to my name and make Marriott recognize me as owner.

I read someone that bought Grande Ocean prior it was built (I think 1992). There were no resales on that time. And if you wait 5 years for a resale appears, you will loose 5 years, waiting to go to a resort you want.

There are advantages of buying direct, and there's a cost for that. It's like buying a Ralph Loren shirt in Nordstrom and Ross. At Nordstrom you choose what you want, ask for help, they always have the color you want in your size, you got a nice bag, and you can even buy it on sale sometimes. At Ross, the scenario is different, you're on your own, maybe you find the size but not the color, but you will sure pay a lot less. And you will get sometimes an used plastic bag, but when you wear them, the shirts will be the same.

I am planning to buy a resale (or maybe 2 with prices like that) because the price difference is huge. But I would sure like to buy direct from Marriott, a risk free situation.


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## m61376 (Mar 1, 2009)

ldanna said:


> I like "both are valid". There's no minority or majority, you did what was best for you. A year ago, no discussion like this would take place because resales where different.
> 
> We have to respect that if points aren't of any good for me, it might be really good for someone else. Or maybe I can't wait 7 months that an unkwon broker transfer my week to my name and make Marriott recognize me as owner.
> 
> ...



 Great analogy!


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## winger (Mar 1, 2009)

Latravel said:


> Winger, are you from the bay area?  My husband is from the Belmont area, we still have our place there.  It seems like everyone up there is an engineering type!



yep!  born and raised in san fran. i still work in the big city but live about 30 miles out.


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## PerryM (Mar 1, 2009)

*Something's going to snap*

I’m sure Marriott is going to do all kinds of stuff to make buying from them net out cheaper.

When we did our sales tour at the Maui Ocean Club our salesrep was all excited (is there anything else a salesrep is?) about huge MRP packages that went with the eye watering prices for the Towers out there.  I got the prices and he wanted to tell me about the MRPs but I stopped him and said there was no way we would buy until I saw the real estate market turn around first.

He realized that the 55 minutes he had invested in us was enough and cut us free.

Everyone on Maui is scared to death – occupancies at hotels are at 10 year lows – 75% of the shops that inhabit the lower floor at the MOC are gone – employment is at new highs – construction has ground to a halt.  Everyone on Maui is scared.

Real estate bargains on Maui are just fantastic – however banks won’t lend money - they are scared too.

And what do the timeshare developers do – lower their rates 15% - 25% like all other real estate on Maui?  No of course – charge prices that reflect NO loss in real estate.  That’s because timeshares are a rigged market and for 40+ years the price went up every Friday like clock work.

At some point Marriott will have to do something – either start to lower their rates or something else that makes owning a timeshare cheaper.

I used to think that their rumored Points program (Not MRPs) would not come out until this debacle is over but maybe they could introduce it and lower prices overall and hide it in the new program.

I believe many timeshare developers are at the breaking point right now - they need to do something.  Lowering of prices is the correct answer but that means that folks should wait for even lower prices...


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## PerryM (Mar 1, 2009)

*The 6% solution...*

I think a great question, one that will prod Marriott off its butt, is to ask the Marriott salesrep has Marriott lowered their asking prices to reflect the reality of real estate in their area?

If Marriott hasn’t lowered their prices 15% at least, like the national average, why not?

This is an excellent question for Marriott to answer – they need to explain why their timeshares defy the laws of supply and demand.  Because if they don’t their market will start to figure out that the same exact usage of a villa is available resale for 50% less now and even more tomorrow.

Wyndham timeshares now sell for 6% resale to developer units – the same exact units.  If Marriott resales follow (and why would they not without the ROFR being executed) the $55k timeshare weeks at Maui are really worth $3,300 on eBay.

So Marriott, why will the resale value of your units not be the same as Wyndham?  Why would the resale market not value each just the same?

That's the question to ask in 2009.

I'm asking the same question of all timeshare developers.  The WorldMark credits that Wyndham sells for $2.00 each should be worth 12 cents on eBay - this is my new low forecast for that developer.

What's your forecast?


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## winger (Mar 1, 2009)

PerryM said:


> I think a great question, one that will prod Marriott off its butt, is to ask the Marriott salesrep has Marriott lowered their asking prices to reflect the reality of real estate in their area?
> 
> If Marriott hasn’t lowered their prices 15% at least, like the national average, why not?
> 
> ...


Hi Perry...long time no 'see. I will try these questions when we hit Maui in April.


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## PerryM (Mar 1, 2009)

*New timeshare valuation model...*



winger said:


> Hi Perry...long time no 'see. I will try these questions when we hit Maui in April.



Great, ask the salesrep up front if Marriott has followed reality and lowered their prices.  If the answer is no then ask why you should not just get the $75 gift and be on your way.


I’d like to see a new timeshare pricing model evolve out of this – here’s how it goes:

Take the average rent charged for a timeshare unit and multiply that by 10 and you have the developer selling price.  I use 10 as a rule when valuing a whole ownership villa compared to its rental price.

Let’s take an example:

Take the Marriott Maui Ocean Club  where weeks 1 – 51 are all identical Platinum.

Get the average asking rental price for a 2BR, ocean view, and you get:
$2,500+$2,200+$2,200+$3,000+$2,000+$3,000+$3,000+$2,800=$2,300.  (Some of these reflect the reality of holiday week higher rental prices)

Multiply by 10 and the Platinum 2BR MOC week should be sold for $23,000 by Marriott – about 1/2 of what it now sells for.

Why should the developer get away with not following supply and demand?  What makes timeshares so special that they get away with ignoring economic laws?


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## m61376 (Mar 1, 2009)

Perry- While I agree with you in theory, I think the economy would have to get a lot worse before Marriott will actually lower their prices to reflect the current real estate market. If they did so, then it would forever change the landscape.

In the interim, I think we will see the so-called "specials" which are really a face-saving price reduction, if only transient, and mostly unheralded in the past. I think we will also see other promotions- perhaps more upfront incentive points and/or, as Marriott dumps unsold inventory into II for Getaways/trades, perhaps one or more bonus weeks offered as added incentives.


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## PerryM (Mar 1, 2009)

m61376 said:


> Perry- While I agree with you in theory, I think the economy would have to get a lot worse before Marriott will actually lower their prices to reflect the current real estate market. If they did so, then it would forever change the landscape.
> 
> In the interim, I think we will see the so-called "specials" which are really a face-saving price reduction, if only transient, and mostly unheralded in the past. I think we will also see other promotions- perhaps more upfront incentive points and/or, as Marriott dumps unsold inventory into II for Getaways/trades, perhaps one or more bonus weeks offered as added incentives.



Well a company, unlike a government, must live with economic reality.  Marriott will do everything possible before their timeshare bubble bursts.  From what I saw on Maui they can't ignore reality much longer before massive layoffs at Maui occur.

Those lovable timeshare salesreps have been used to $200k+ incomes for many years and at some point will start to leave and find other things to sell.

My guess is that 50% of those Marriott timeshares salesreps are about to be fired - just a guess.  In the 2 weeks we were there I saw 1 sale occur.  We got chairs nearby just so I could count the new owners - I saw 1 in 2 weeks.


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## Lawlar (Mar 1, 2009)

*Sound Ideas*

Perry:  I like reading your posts.  You clearly understand the economics and realities associated with timeshares.


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## ldanna (Mar 1, 2009)

PerryM said:


> Great, ask the salesrep up front if Marriott has followed reality and lowered their prices.  If the answer is no then ask why you should not just get the $75 gift and be on your way.
> 
> 
> I’d like to see a new timeshare pricing model evolve out of this – here’s how it goes:
> ...



Let's make another calculation based on what really happens: a 2 bd apartment is sold 52 times (weeks), costing  $55k each, that equals $2,860,000. Is that a fair price for a 2 bd apartment in Maui with that infrastructure facing the ocean? Don't forget the annual MF (1,500 x 52) of $78k.


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## PerryM (Mar 1, 2009)

*There is no timeshare reality....*



ldanna said:


> Let's make another calculation based on what really happens: a 2 bd apartment is sold 52 times (weeks), costing  $55k each, that equals $2,860,000. Is that a fair price for a 2 bd apartment in Maui with that infrastructure facing the ocean? Don't forget the annual MF (1,500 x 52) of $78k.



Timeshares are the black sheep of the real estate industry – they look like real estate, sound like real estate, but are, in reality, are not real estate.  Sure they can be fee simple and have a deed but they are a mutation.

Timeshares, in my opinion, took the wrong path just after they were created 40+ years ago.  They should have been a Right To Use, like Disney, and after 40+ years they revert back to a whole ownership villa which can easily be sold and appraised.  You time slice it for 40 years and then sell it as a whole with the owners splitting the proceeds.

Here’s a simple test – go to the yellow pages (or the internet) and find a real estate appraiser and call him/her and ask for an appraisal of your Marriott week.  The uncontrollable laughing on the other end of the phone should be your first clue that you can’t take the appraised value of a condo and divide it by 52 to find its value.

Once a condo is sliced and diced 52 ways it no longer follows the laws of real estate – it’s a mutation and other means must be used besides the real estate appraiser laughing so hard his side hurts.

I’m going to guess but the 2BR villa we stayed at the Maui Ocean Club appraises out to 750k in today’s market.  I toured a whole ownership 3BR 2,800 sq ft condo next to the Grand Wailea which can be in their rental pool and has a private garage and elevator, and a pool almost the size of the MOC and even nicer, and it is for sale, new, for $1.76 M.  2+ years ago the same villa, in another building sold for $3.5 M.  Real estate is dead on Maui.

Anyway I think $750k for a 35+ year old retrofit hotel 2BR unit with no kitchen is about right.  Divide that by 50 and you get $15,000 per week.  Take Marriott’s 4 to 1 ratio and they should sell it for $60k – close enough.

But in reality that 2BR is really worth $15k per week IF it could be reformatted back to a whole ownership condo – it can’t and thus is worth just a fraction of that – my guess is $7k on the resale market.

Markets always overreact and with 40+ years overreacting to the up side I can image a huge overreaction to the down side and thus $7k is worth half of that or $3,500 on eBay at some point in this correction.

So my guess of 6% of the $45k Platinum week is $2,700 makes a lot of sense to me.  Throw in a reputable name like Marriott and it might just be 10% or my guess of $3,500 for eBay MOC Platinum weeks.

Time will tell if I’m right…

P.S.
That 3BR condo I looked at is fully furnished with $200k of unbelievable furnishings - all included; the comparable units sold 2+ years ago was sold empty.  It's MF is $1,200 per month for the HOA.  The MF at the MOC is way way above that for just one week.

That MF is going to be another killer when resales crash Hawaii timeshares are really going to be socked hard.  Hell, the MF could almost be the selling price.

Maybe that will become the new timeshare reality - the resale selling price is the MF!  But there are many resales going for $1 on eBay now - so even that rule is void.

The reality is there is no timeshare reality - never has and never will be.


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## ldanna (Mar 1, 2009)

PerryM said:


> T (...)
> Once a condo is sliced and diced 52 ways it no longer follows the laws of real estate – it’s a mutation and other means must be used besides the real estate appraiser laughing so hard his side hurts.
> 
> I’m going to guess but the 2BR villa we stayed at the Maui Ocean Club appraises out to 750k in today’s market.  I toured a whole ownership 3BR 2,800 sq ft condo next to the Grand Wailea which can be in their rental pool and has a private garage and elevator, and a pool almost the size of the MOC and even nicer, and it is for sale, new, for $1.76 M.  2+ years ago the same villa, in another building sold for $3.5 M.  Real estate is dead on Maui.
> ...



Although TS is a mutation in real estate, built costs are the same. Selling for $15k should be a 50% profit bussiness, but no, let's push it a lot more, 4x the selling price (7x the profit). It's too much, even for a mutation.

This economic crisis will probably correct this distortion, and maybe reinvent TS. Or bring it back to the original idea.

Time will probably tell you're right. And I am starting to believe that things might get a little bit worst before start go get any better.

Prices are changing and MF should be next in line.


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## PerryM (Mar 1, 2009)

*Sock it to me baby...*



ldanna said:


> Although TS is a mutation in real estate, built costs are the same. Selling for $15k should be a 50% profit bussiness, but no, let's push it a lot more, 4x the selling price (7x the profit). It's too much, even for a mutation.
> 
> This economic crisis will probably correct this distortion, and maybe reinvent TS. Or bring it back to the original idea.
> 
> ...



I own 5 weeks at the Park Plaza in Park City, UT – a 35 year old timeshare where the developer left 20 years ago.  A 2BR week has a MF of $700.

MFs are the HOAs attempt to keep the resort looking like it did on Day One.  The older the timeshare the more things need to be replaced and patched up.

However, the Maui Ocean Club looks very very tired especially compared to the new towers on either side of it.  Those towers really hurt the original hotel complex to the point that my estimate of $750k might be way way too high – maybe $500k, or less, is more real in today’s market.  That would be just $10k per week in real estate or $40k in sales.  If so, just that justifies Marriott lowering their asking price.

The MFs are really killing Hawaiian timeshares and Hawaii doesn’t care a bit.  While the occupancy of hotels in Jan 2009 was 57% the occupancy of timeshares is 95%.  Result – sock more fees to timeshares – nobody seems to care in the least.


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## winger (Mar 1, 2009)

PerryM said:


> ...
> The MFs are really killing Hawaiian timeshares and Hawaii doesn’t care a bit.  While the occupancy of hotels in Jan 2009 was 57% the occupancy of timeshares is 95%.  Result – sock more fees to timeshares – nobody seems to care in the least.



A general rule of thumb - when government gets involved (taxation, etc.), time to head for the hills, bro !  There is no place to hide.


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## GaryDouglas (Mar 1, 2009)

PerryM said:


> However, the Maui Ocean Club looks very very tired especially compared to the new towers on either side of it...


 
The old buildings are slated for a fresh coat of paint in April, to be more in keeping with the color scheme of the new buildings. It should help on visual continuity, but it will still be the old architecture. The pools will also be replastered and refurbished at that time...


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## PerryM (Mar 1, 2009)

GaryDouglas said:


> The old buildings are slated for a fresh coat of paint in April, to be more in keeping with the color scheme of the new buildings. It should help on visual continuity, but it will still be the old architecture. The pools will also be replastered and refurbished at that time...



We grabbed chairs, this visit and the year before, near one of the new towers so we were exposed to the new tower for 2 weeks.  When we went back to our unit in the old section it really felt old, I mean old.

New paint and fixing the lazy river isn't going to do a thing in my mind.  But there isn't anything they can do but paint and fix up for the next 30+ years.  Good luck old section...


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## MLC (Mar 1, 2009)

PerryM said:


> The MFs are really killing Hawaiian timeshares and Hawaii doesn’t care a bit.  While the occupancy of hotels in Jan 2009 was 57% the occupancy of timeshares is 95%.  Result – sock more fees to timeshares – nobody seems to care in the least.





Perry,

You are right on with that one.  MF are killing us owners.  MF need to be lowered and this will not necessarily lower the quality.  Marriott as the managing company needs to do some cutting to help the owners.  I own at the royals and the most expensive time with the Royals is $899.  I will put the Royals in cancun up against any Marriott. 

Owners need to talk to the HOA board and get them to start looking at the MF budget.

Marty


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## m61376 (Mar 2, 2009)

MLC said:


> Perry,
> 
> You are right on with that one.  MF are killing us owners.  MF need to be lowered and this will not necessarily lower the quality.  Marriott as the managing company needs to do some cutting to help the owners.  I own at the royals and the most expensive time with the Royals is $899.  I will put the Royals in cancun up against any Marriott.
> 
> ...



While I agree in principle, I am not sure that it is a fair comparison. Labor costs in the US are very different than in Mexico. Also, while the Royals are really nice and have wonderful service, the units are not quite up to Marriott's, in my opinion at least. Allowing for a little more in labor costs and maintenance of unit quality, the MF's are not that different if you exclude local taxes at many of the Marriott properties. Of course, that aside, I do agree that the Boards need to work really hard to get those MF's down, or they will cripple the resorts over time.


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## PerryM (Mar 2, 2009)

*The MF Benchmark - $700/yr for a 2BR*

The Park Plaza has just 53 units (Studio,1BR,2BR) in the just the one building, 2 vans to take folks to the slopes and Park City at night, and 2 folks 24/7 at the front desk and maintenance; Resort Quest is the management company and does the reservations and this includes all taxes. 

All for $700/yr for a 2BR. Let me recap what we get for $700/yr:


24/7 front desk with maintenance person
Online reservations
2 vans to take owners to the slopes skiing and Park City for dinner
Indoor heated swimming pool
Was an II 5-star and is RCI Gold

There is no developer and the MFs are scrutinized by the HOA each year and put up for bid.

If your timeshare is charging more this it goes into someone’s pocket.


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## Steve (Mar 2, 2009)

PerryM said:


> The Park Plaza has just 53 units (Studio,1BR,2BR) in the just the one building, 2 vans to take folks to the slopes and Park City at night, and 2 folks 24/7 at the front desk and maintenance; Resort Quest is the management company and does the reservations and this includes all taxes.
> 
> All for $700/yr for a 2BR. Let me recap what we get for $700/yr:
> 
> ...



I have stayed at the Park Plaza, and it is nowhere near Mariott quality.  In fact, the Park Plaza reminds me of an old Holiday Inn Holidome from the 1970s.

To use this resort as a benchmark and state that "if your timeshare is charging more than this it goes into someone's pocket" is absolutely ridiculous. 

Steve


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## PerryM (Mar 2, 2009)

Steve said:


> I have stayed at the Park Plaza, and it is nowhere near Mariott quality.  In fact, the Park Plaza reminds me of an old Holiday Inn Holidome from the 1970s.
> 
> To use this resort as a benchmark and state that "if your timeshare is charging more than this it goes into someone's pocket" is absolutely ridiculous.
> 
> Steve



Well I bought a 2BR New Years ski week for about $5k 4+ years ago.

Marriott sells the same exact week for, what $75k? (MountainSide and Summit Watch), resale $45k?

Don't put works in my mouth - I never said they were the same quality - you brought up the topic.


I've owned MountainSide, Summit Watch, and Park Plaza.  The Plaza isn't up to Marriott standards but it is 35+ years old and the Marriotts are much newer.

My Summit Watch MF is about $1k now and I'd be hard pressed to find that $300 difference between the two to nothing more than the Marriott name.

The 2 vans that take ALL the owners/exchangers to the slopes and to Park City at night more than makes up for an older facade.  Each night you call the van and it comes by and takes you anywhere in the Park City area you want.

Each 2BR, 1BR, and Mini-suite has a fireplace and a full kitchen with granite counter tops.  The heated indoor swimming pool at the Park Plaza is superior to the outdoor pools at MountainSide.  So yes, I consider usage of the Park Plaza at least equal to the two Marriotts. 

The Park Plaza is available for exchanges in II ,RCI, and RCI Points.

You can "Bank" your week to next year if you want and "Borrow" from next year and hell get 3 weeks in the same year for family reunions.  All this adds to the charm of the Park Plaza in my opinion.

All of this is included in their MF of $700 - the $1k MF of the Marriotts can't get close.  They have just started a new cycle of refurbishing every square inch of the resort and the new parts are just as nice as the Marriotts - even superior.

There is more to a resort than the 35 year old elevator.

That's my opinion; yours might differ.  Here's their web site.

P.S.
I know of Park Plaza owners that exchange into both MountainSide and Summit Watch during ski season - so someone thinks like I do that these are close in amenities; that would be II.

Hell I've exchanged 10,000 WM credits and stayed at both MS and SW Christmas week.  The MF for a WM, in large quantities like I own, is 4.5 cents.  So I pay $450 in MFs to exchange into Marriotts with MFs of $1k.  II considers them equal.

Again, someone doesn't have such a high opinion of Marriotts compared to lots of timeshares with much more reasonable MFs; again II who rates thousands of timeshares.

So forget my opinion, take it from the experts on comparing timeshares - II.


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