# Apollo Group looking to buy HGVC [Merged]



## toontoy

looking at the news and it looks like apollo is looking to add hgvc to diamond resorts. I am not a diamond fan so k hope it doesnt happen but what are the odds 

https://www.google.com/amp/s/nypost...g-to-buy-2-4b-hilton-time-share-operator/amp/


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## SteelerGal

I hope not.  I love my HGVC affiliate.


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## geist1223

As DRI Owners we think this is great.


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## Panina

Happy all but one  of my hgvc are affiliates in Marco Island that I would use and I have a choice to stay or go.


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## pianodinosaur

HGVC formerly had a special exchange agreement with Club Intrawest. DRI purchased Club Intrawest ending that arrangement.  Club Intrawest is currently known as Embarc.  We have stayed at Club Intrawest in Whistler and Zhuatenejo.  We have stared at Embarc in Mont Tremblant.  I currently do not really know how the DRI changes have affected the original Club Intrawest owners.  However, I have several friends who are Silverleaf owners.   Holiday Inn Vacations purchased Silverleaf and the owners are not happy with the changes Holiday Inn Vacations has made.  The new management is trying to force the Silverleaf owners to purchase Holiday Inn Vacations “upgrades” or suffer adverse consequences.  I would not like to see the flexibility and quality of HGVC compromised by a corporate takeover.


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## pedro47

How much money does Apollo have to purchase HGVC ?
This would be an excellent purchase for Diamond owners IMO.


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## dayooper

The article also states that the Blackstone Group could be a potential suitor as well.


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## RX8

“The companies have a lot of control over demand,” giving them stable earnings, Jefferies’ David Katz said.

A lot of control?  They control 99.999% of the demand. How many get up in the morning and say “i’m going shopping for a new timeshare today?


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## JIMinNC

Hopefully Blackstone will swoop in as a white knight suitor. Combining HGVC into Diamond would be a disaster for HGVC owners if they adopted the Diamond business model. We used to be Diamond owners and consider DRI a bottom-feeder in the timeshare business, right down there with Westgate.


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## ocdb8r

JIMinNC said:


> Hopefully Blackstone will swoop in as a white knight suitor. Combining HGVC into Diamond would be a disaster for HGVC owners if they adopted the Diamond business model. We used to be Diamond owners and consider DRI a bottom-feeder in the timeshare business, right down there with Westgate.



Agreed.  This is a depressing development.


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## mjm1

This would be terrible. We are in the process of buying our first HGVC property and would not want to be part of Diamond. Hopefully Blackstone jumps in, since their guy is on the board.

Best regards.

Mike


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## Sandy VDH

I do not wish HGVC to be overridden by DRI.


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## GT75

Sandy VDH said:


> I do not wish HGVC to be overridden by DRI.



Neither do I.


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## Panina

Always what I feared.  Many told me HGVC would likely not change. I always thought it could.  Maybe it won’t hapen this time but it can another time.

I went against my gut and I did buy one mandatory 8400 point as the price was great, mf low.  Either way, highly probable I will list it to sell.  Right now leaning towards sticking with only Marco Island affiliates which I use often, trade well in interval and always give me a choice to stay a HGVC member or not.


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## klpca

Yeah, when staying at Diamond resorts, it has been a step or two down from HGVC quality. Plus I dislike their high pressure sales tactics. Since we bought for the resort with HGVC flexibility secondary I guess I'm good either way, but I sure hope that it doesn't happen.


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## SteelerGal

I can see Blackstone since there is already a partnership.  

Looks like this is consolidation season.


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## CalGalTraveler

I hope Blackstone wins out (and takes over DRI.)

I am not familiar with DRI. Aside from high pressure sales tactics which we could avoid by not attending presentations, why is DRI so bad? How have Embarc owners fared?


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## JIMinNC

CalGalTraveler said:


> I hope Blackstone wins out (and takes over DRI.)
> 
> I am not familiar with DRI. Aside from high pressure sales tactics which we could avoid by not attending presentations, why is DRI so bad? How have Embarc owners fared?



When we owned with DRI at Kaanapali Beach Club, maintenance fees went up on average 8-9% per year, and was almost totally due to DRI increasing their management fee and administrative costs by double digits every year. The quality was also a solid notch or two below that of HGVC/Marriott/Westin, and KBC was one of the top-tier Diamond properties. They also eliminated internal exchanges with some other DRI properties in Hawaii as a way to try to force people to relinquish their deeds and buy their trust product. Just seemed like a slimy organization overall.


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## CalGalTraveler

If this comes to pass, ironically HGVC may finally have beachfront access to Maui via KBC and Tahoe (that nice Diamond resort on the other thread) that were originally Embassy Suites. However I am sure that cross-selling access will not come cheap.  I worry that they would pull the Hilton brand license to save money and rebrand the resorts similar to Embarc. I don't like this but could live with what we own in NYC and trade in RCI with our Vegas deed if needed.


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## JIMinNC

CalGalTraveler said:


> If this comes to pass, ironically HGVC may finally have beachfront access to Maui via KBC and Tahoe (that nice Diamond resort on the other thread) that were originally Embassy Suites. However I am sure that cross selling access will not come cheap.  I worry that they would pull the Hilton brand license to save money and rebrand the resorts similar to Embarc.  I don't like this.



I'm even wondering what change of control provisions might be in the Hilton brand licensing agreement. If Hilton Hotels Corp doesn't like the reputation/business practices of DRI, could they pull the brand license? The license benefits HGV more than Hilton Hotels as the only real benefit to the hotel company is the licensing revenue. I can't imagine Hilton would be OK with the smarmy DRI reputation.


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## CalGalTraveler

Hopefully they will treat HGVC as a separate collection and leave us alone. I am glad we bought resale so very little to lose if we don't like it and decide to deedback/exit.


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## sparty

Interesting news today from NY post that Apollo Global Management Group is interested in Hilton Grand Vacation's but then that's supposedly  spurring reports there are bids on Marriott and Wyndham too

_[Threads merged.]_


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## StevenTing

Article for reference. 

https://nypost.com/2019/08/19/apollo-global-looking-to-buy-2-4b-hilton-time-share-operator/


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## JIMinNC

CalGalTraveler said:


> Hopefully they will treat HGVC as a separate collection and leave us alone. I am glad we bought resale so very little to lose if we don't like it and decide to deedback/exit.



That would be my hope also, but you don't pay $36/share (rumored) for something that was trading at $26/share on Thursday or Friday and "leave it alone."


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## dayooper

A couple of thoughts. How reliable is the NY Post? I did a search and the only thing I came up with was a premium “Street Insider” article titled Apollo looks to acquire HGVC and the NY Post article. I was under the impression that the NY Post was on the more tabloid side of newspapers. 

I think we are jumping the gun here a bit. It didn’t say it was happening, but they were looking to. They are hearing it from one side. That doesn’t mean it’s a done deal or even eminent.


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## JIMinNC

dayooper said:


> A couple of thoughts. How reliable is the NY Post? I did a search and the only thing I came up with was a premium “Street Insider” article titled Apollo looks to acquire HGVC and the NY Post article. I was under the impression that the NY Post was on the more tabloid side of newspapers.
> 
> I think we are jumping the gun here a bit. It didn’t say it was happening, but they were looking to. They are hearing it from one side. That doesn’t mean it’s a done deal or even eminent.



My impression of the NY Post is the same as yours, but there must be some fire where the smoke is because HGV stock is up 10% just today to over $31/share after trading at $26 late last week. It's even driving up Marriott Vacations Worldwide stock by 3%.


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## Tamaradarann

JIMinNC said:


> When we owned with DRI at Kaanapali Beach Club, maintenance fees went up on average 8-9% per year, and was almost totally due to DRI increasing their management fee and administrative costs by double digits every year. The quality was also a solid notch or two below that of HGVC/Marriott/Westin, and KBC was one of the top-tier Diamond properties. They also eliminated internal exchanges with some other DRI properties in Hawaii as a way to try to force people to relinquish their deeds and buy their trust product. Just seemed like a slimy organization overall.



We stayed at the DRI Kaanapali Beach Club for 2 weeks in May.  The resort has an excellent location and it customer service was good.  We did have a problem with roaches, and they moved us quickly to another room with a better view which gets a plus in customer service.

We went to a presentation and we didn't find the pressure overly zealous, however, we have gone to so many presentations and own so many resale timeshares that we can usually fend off their pressure by saying we have enough vacation ownership already and don't need anymore.  Their maintenance was high for the number of points that we would need for a week during prime seasons in Hawaii versus HGVC.  We stay in Honolulu using our HGVC points with a maintenance cost of about $60/night.  The maintenance for the their minimum package would have cost about $200/night.

Furthermore, we didn't like  their timeshare model if we were going to buy.  The Hawaii Trust Product that they were offering had properties in Las Vegas, Arizona, and California mixed in with Hawaii Properties so that even though you would be buying a Hawaii Timeshare Product it wasn't ownership that was based on Hawaii Property.  While I understand from owners that the following scenario has not occurred yet I do foresee it happening:  Most of us know that Hawaii is the most sort after location in timeshare systems.  If they can sell trust shares based on available properties in Las Vegas, Arizona, and California as well as Hawaii since all of these properties are in the Hawaii Trust, the number of Hawaii Trust Owners that want to reserve in Hawaii during prime season will become higher than the number of units that are available to reserve in Resorts in Hawaii.  Therefore, even though you OWN a unit in the Hawaii Trust you won't be able to reserve unless you book right at the 1 year booking opening date.


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## 1Kflyerguy

JIMinNC said:


> My impression of the NY Post is the same as yours, but there must be some fire where the smoke is because HGV stock is up 10% just today to over $31/share after trading at $26 late last week. It's even driving up Marriott Vacations Worldwide stock by 3%.



I checked Seeking Alpha, eTrade and other sites where I get financial news.  They are all reporting the same news about Apollo, but most of these point back to the NY Post as the source of the news.

Will be curious to see if either HGV or Apollo make any sort of statement at some point.

I agree with others that merging with DRI would not be good new for current HGV owners.


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## Cyberc

If HGV and DRI merges how would that effect availability?

In case the merger do happens and the maintenance fee starts to explode is there anyway we the members at each resort can vote or decide on another management company?


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## SmithOp

Tamaradarann said:


> We stayed at the DRI Kaanapali Beach Club for 2 weeks in May.  The resort has an excellent location and it customer service was good.  We did have a problem with roaches, and they moved us quickly to another room with a better view which gets a plus in customer service.
> 
> We went to a presentation and we didn't find the pressure overly zealous, however, we have gone to so many presentations and own so many resale timeshares that we can usually fend off their pressure by saying we have enough vacation ownership already and don't need anymore.  Their maintenance was high for the number of points that we would need for a week during prime seasons in Hawaii versus HGVC.  We stay in Honolulu using our HGVC points with a maintenance cost of about $60/night.  The maintenance for the their minimum package would have cost about $200/night.
> 
> Furthermore, we didn't like  their timeshare model if we were going to buy.  The Hawaii Trust Product that they were offering had properties in Las Vegas, Arizona, and California mixed in with Hawaii Properties so that even though you would be buying a Hawaii Timeshare Product it wasn't ownership that was based on Hawaii Property.  While I understand from owners that the following scenario has not occurred yet I do foresee it happening:  Most of us know that Hawaii is the most sort after location in timeshare systems.  If they can sell trust shares based on available properties in Las Vegas, Arizona, and California as well as Hawaii since all of these properties are in the Hawaii Trust, the number of Hawaii Trust Owners that want to reserve in Hawaii during prime season will become higher than the number of units that are available to reserve in Resorts in Hawaii.  Therefore, even though you OWN a unit in the Hawaii Trust you won't be able to reserve unless you book right at the 1 year booking opening date.



Relax, the sky isn’t falling yet.

Look at the other merger, there still isn’t a consolidated points/trust system at Marriott/Vistana yet, and it may never happen.

I can’t imagine how they will merge DRI points with HGVC points.

If we choose to keep out Hawaii deeds they still have to allow us to book what we own right up to 1 week+ 9 months.  Even now at 9 months we have to contend with other points owner booking Hawaii, it operates very similar to a trust.  Airfares and travel distances keep Hawaii out of reach for most as an every year option.

Recall the earnings transcript about HGVC looking at a trust system, wonder if they knew about this offer already?

It will suck for me because I never intend to book what I own in Hawaii, I get better bang by point stretching smaller units and weekdays in club season.

Weren’t you thinking about selling anyway since you purchased a condo in Hawaii?  Might be a good time to dump HGVC.


Sent from my iPad using Tapatalk Pro


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## csalter2

As a Diamond owner, this would be a welcome addition. However, I would be surprised if Hilton allowed it to happen.  Time will tell the story. 

Westin, Hyatt Sheraton and Starwood owners better be glad they were taken over by Marriott and not Apollo. Apollo is totally profit focused and has given very little attention to owners ' needs based upon my experience.


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## csalter2

What do you think about this possibility as a Diamond owner. I just got this off of the Marriott forum, but it does not relate to them. However, it does relate to Diamond owners.

https://nypost.com/2019/08/19/apollo-global-looking-to-buy-2-4b-hilton-time-share-operator/

_[Threads merged.]_


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## JIMinNC

Cyberc said:


> In case the merger do happens and the maintenance fee starts to explode is there anyway we the members at each resort can vote or decide on another management company?



In theory, yes, but I believe the boards at most HGV resorts are stacked with people supported by HGV's proxies. It would take a focused and concerted effort from owners to wrest control from HGV.


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## Ralph Sir Edward

What will be the most interesting will be what happens with the affiliates.

They could choose to not stay with the combined entity. . .


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## JIMinNC

Somebody must think something might happen with VAC. Their stock is also up over 7% today to $97/share. It was as low as $83.50 last Thursday. I bought some that day at $85.


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## SueDonJ

I don't see where in the article it says that this speculated move is spurring talk about Marriott Vacations Worldwide and/or Wyndham also being acquired? What am I missing?


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## SteelerGal

There’s discussion on HGVC thread as well.  Hoping it’s just talk.  Thankfully we own an affiliate only.


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## 1Kflyerguy

I believe HGV controls the voting for unsold inventory.  So the extent a particular resort has lots of unsold units,  it might be impossible to remove HGV or DRI if they succeed. 

But I agree with SmithOp, no reason to panic at this point.  There is still on independent confirmation of the offer, and no idea how HGV will respond.    Apollo tried to buy ILG last year, and ultimately they lost out to Marriott Vacation Club.  Its very possible Blackstone or even Hilton get back involved to protect the co-marketing agreement.


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## JIMinNC

SueDonJ said:


> I don't see where in the article it says that this speculated move is spurring talk about Marriott Vacations Worldwide and/or Wyndham also being acquired? What am I missing?



From Seeking Alpha. JP Morgan thinks it's possible:


https://seekingalpha.com/news/3493372-jpmorgan-bumps-hilton-grand-vacations-marriott-vacations



> *JPMorgan bumps up Hilton Grand Vacations and Marriott Vacations*
> 
> JPMorgan dives into the timeshare sector after saying the NY Post article on an offer for Hilton Grand Vacations (HGV +11.3%) feels real.
> 
> Marriott Vacations (VAC +5.5%) is upgraded by the firm to Overweight from Neutral and HGV goes to Neutral from Underweight.
> 
> Analyst Brand Montour notes that other private equity firms other than Apollo Global could have an interest in the sector.
> 
> The sell-side consensus on both HGV and VAC is Neutral.


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## pedro47

I can remember years ago when RCI were rumored  going to purchase Sunterra Resorts. But Sunterra was sold to Diamond International Resorts .


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## SueDonJ

JIMinNC said:


> From Seeking Alpha. JP Morgan thinks it's possible:
> 
> 
> https://seekingalpha.com/news/3493372-jpmorgan-bumps-hilton-grand-vacations-marriott-vacations



But so far the only "official" speculation, from the NY Post, is that, "Apollo Global Management has told time-share operator Hilton Grand Vacations it wants to buy the $2.4 billion outfit, and the company is considering its next steps."

There is SO MUCH affiliation/acquisition/takeover stuff happening in the industry that the TUG boards are bleeding into each other all over the place! For now, at least until something more than a stock bump sends us into a tizzy, I'm going to merge the threads currently in the HGVC, Marriott and Diamond TUG forums into a single one on the HGVC forum.

*Go here: Apollo Group looking to buy HGVC [Merged]*

Have at it, folks.


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## Kim Him

OMG!!! I've been doing so much research and looking to buy Hilton, but might not if DRI is taking over. This is not good.


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## HGVC Lover

Wow...in reading reviews about this company the majority of respondents basically say their experience with this company is horrific at all levels.  I hope it does not happen because what I have read so far indicates HGVC will not be the positive experience that caused so many of us to purchase HGVC.


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## geist1223

In the 4 plus years that we have been DRI Members we have seen improvements in DRI. The high pressure sales seem to be slowly going away. The last couple we have attended have been more laid back. MF's for the Hawaiian Collection have remained stable the last couple of years. DRI got into a bidding war and won buying the Modern Honolulu. Which they are slowly remodeling into timeshare Condos from Hotel Rooms. The Resorts we stayed how were in great shape. The Resort Staffs have been very friendly and helpful. DRI started a program that allows folks that own a traditional Deeded Week at an owned/managed DRI Resort to do an internal trade to stay at another DRI resort.


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## escanoe

I am not familiar with Diamond resorts, how large are they compared to HGVC? As upgrades are a big part of HGVC sales, it seems alienating current owners would significantly undermine HGVC. I am a little concerned, but not near panic mode yet.


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## dayooper

Ok, how is Marriott involved in this? Explain to me why Marriott’s stock is upgraded. Or is it just the Marriott forum members were talking about this and it was merged?


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## GT75

escanoe said:


> As upgrades are a big part of HGVC sales, it seems alienating current owners would significantly undermine HGVC. I am a little concerned, but not near panic mode yet.



I am thinking the same thing.   To me it seems that it would kill all current plans.


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## CalGalTraveler

I wonder if this is a tactic to get HGVC sales to nosedive and after a bad quarter, then they come in and buy at a lower stock price than what they offered?

Although I am still figuring out MVC, I was very relieved when Vistana was bought by MVC and not Diamond. MVC stock may be increasing because they will pick up HGVers jumping ship if Diamond takes over.


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## SueDonJ

dayooper said:


> Ok, how is Marriott involved in this? Explain to me why Marriott’s stock is upgraded. Or is it just the Marriott forum members were talking about this and it was merged?



Post #22 in this thread was originally posted as a new thread on the Marriott forum, first we'd seen of it. JIMinNC mentioned the stock bump but I don't think there's been anything "official" mentioned about Marriott being involved. 

I merged that thread and another started on the TUG Diamond forum into this one on the HGVC forum.


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## 1Kflyerguy

The financial news reports that the Timeshare Industry, including Marriott and Wyndam  jumped the takeover news.  That is not uncommon, as people and companies take a second look at the industry with buy out opportunities.


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## JIMinNC

SueDonJ said:


> Post #22 in this thread was originally posted as a new thread on the Marriott forum, first we'd seen of it. JIMinNC mentioned the stock bump but I don't think there's been anything "official" mentioned about Marriott being involved.
> 
> I merged that thread and another started on the TUG Diamond forum into this one on the HGVC forum.



The only thing I’ve seen that would explain how Marriott started getting sucked into the market speculation was the JPMorgan analyst who said the credible rumor of the Apollo bid for HGV could entice other private equity firms to bid for Marriott Vacations, so their stock was driven up over 7% today to $97 as well.

Interestingly, in after hours trading Marriott Vacations dropped from $97 back to $94. That’s a stock that seems to rarely trade after hours.


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## 1Kflyerguy

JIMinNC said:


> I'm even wondering what change of control provisions might be in the Hilton brand licensing agreement. If Hilton Hotels Corp doesn't like the reputation/business practices of DRI, could they pull the brand license? The license benefits HGV more than Hilton Hotels as the only real benefit to the hotel company is the licensing revenue. I can't imagine Hilton would be OK with the smarmy DRI reputation.



I know they do have some change of control provisions as they mentioned that as "risk" in one of early investor calls, or perhaps the investor day presentations shortly after they were spun off.

Its been a long time, but I am pretty sure they mentioned forfeiting the license if they were acquired by another Hotel Brand.  That makes sense to me.  I don't recall if they specified any other restrictions, but they may well be included.


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## Chop999

1Kflyerguy said:


> Its been a long time, but I am pretty sure they mentioned forfeiting the license if they were acquired by another Hotel Brand.  That makes sense to me.  I don't recall if they specified any other restrictions, but they may well be included.



I’ll save some people the time for searching with this long copy and paste from their Sec filing form 10-K Annual Report
https://otp.tools.investis.com/clie...&FilingId=13264840&CIK=0001674168&Index=10000

“Under the license agreement, our right to use the Hilton Marks as a trade, corporate, d/b/a or similar name will automatically terminate if (i) the aggregate number of units of accommodation in our Licensed Business falls below two-thirds of the total number of units of accommodation in our entire vacation ownership business; (ii) we merge with or acquire control of the assets of Marriott International, Inc., Marriott Vacations Worldwide Corporation, Hyatt Hotels Corporation, Wyndham Destinations and Interval Leisure Group, Inc.  or their respective affiliates and we or they use their brands in any business after such acquisition; or (iii) we become an affiliate of another Hilton competitor.

Hilton has the right to terminate the license agreement as a whole if, among other things: (i) we file for bankruptcy or cease business operations; (ii) 25 percent or more of our Hilton-branded vacation ownership properties fail certain performance thresholds or the overall customer satisfaction score for all our Hilton-branded vacation ownership properties falls below a certain threshold level, and we do not promptly cure such failures; (iii) we operate the Licensed Business in a way that has a material adverse effect on Hilton; (iv) we fail to pay certain amounts due to Hilton (and in certain cases, do not promptly cure such failures); (v) we contest Hilton’s ownership of the Hilton IP or the Hilton Data; (vi) we merge with, consolidate with or are acquired by a competitor of Hilton; or (vii) we assign the agreement to a non-affiliate without Hilton’s consent.

Hilton also has the right to “deflag” (prevent use of any Hilton IP or Hilton Data at) any property in our Licensed Business in certain circumstances, including if (i) a $10 million or more final judgment is assessed against such property or a foreclosure suit is initiated against such property and not vacated; (ii) an ongoing threat or danger to public health or safety occurs at such property; (iii) such property fails to meet certain quality assurance system performance thresholds; or (iv) such property is not operated in compliance with the license agreement or Hilton’s other standards and agreements, and such breaches are not cured in accordance with the license agreement.

If we breach our obligations under the license agreement, Hilton may, in addition to terminating the license agreement, be entitled to (depending on the nature of the breach): seek injunctive relief and/or monetary damages; suspend our access to and terminate our rights to use Licensed IP and/or Hilton Data (other than the Hilton Marks and certain other content); or terminate our rights to use the Licensed IP (including the Hilton Marks) and Hilton Data at specific locations that are not in compliance with performance standards.

If the license agreement terminates due to our fault before the end of the term, we are required to cease use of the Hilton IP and Hilton Data according to a specified schedule.  Hilton has the right to demand liquidated damages based upon its uncollected royalties and fees for the remainder of the term.

Hilton has registered certain of the Hilton Marks for vacation ownership services in jurisdictions in which we currently operate vacation ownership resorts and residential projects under the Hilton Marks.  However, Hilton does not have affirmative trademark rights in the Hilton Marks in relation to every aspect of our business in every country around the world, and we, therefore, may not be able to use one or more of the Hilton Marks to expand various aspects of our business into one or more new countries.  If we want to use a Hilton Mark in a country where it is not registered, we will have to seek Hilton’s consent, which may not be withheld if the new trademark would not reasonably be expected to harm or jeopardize the value, validity, reputation or goodwill of the Hilton Marks or subject Hilton to any risk of legal liability.

Unless we obtain Hilton’s prior written consent, we may not be able to: (i) merge with or acquire a Hilton competitor or a vacation ownership business that has entered into an operating agreement with a Hilton competitor; (ii) merge with or acquire a vacation ownership business together with a lodging business; or (iii) be acquired or combined with any entity other than an affiliate.  We may acquire control of a business that is not a vacation ownership business or a lodging business without Hilton’s consent, but we are required to operate such business as a separate operation that does not use the Hilton IP or Hilton Data unless Hilton consents to such use.  Without Hilton’s prior consent, we may not assign our rights under the license agreement, except to one our affiliates as part of an internal reorganization for tax or administrative purposes.”


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## nuwermj

JIMinNC said:


> Hopefully Blackstone will swoop in as a white knight suitor. Combining HGVC into Diamond would be a disaster for HGVC owners if they adopted the Diamond business model. We used to be Diamond owners and consider DRI a bottom-feeder in the timeshare business, right down there with Westgate.



If the two companies merged and HGVC management remained in charge (dumping the Diamond team), would that be so bad? No change to HGVC. Both systems continue to run separately (like Wyndham does with its three systems). 

Apollo is in deep trouble with Diamond. When it took DRI private in 2016 it had a huge image problem to deal with. That is the image on Wall Street that Diamond's inventory model and customer acquistion was not sustainable. Diamond made a number strategic changes, but these changes have not produced successful results. I think Apollo may be interested in getting control of HGVC management so that Diamond's team can be dumped.


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## Panina

Chop999 said:


> I’ll save some people the time for searching with this long copy and paste from their Sec filing form 10-K Annual Report
> https://otp.tools.investis.com/clie...&FilingId=13264840&CIK=0001674168&Index=10000
> 
> “Under the license agreement, our right to use the Hilton Marks as a trade, corporate, d/b/a or similar name will automatically terminate if (i) the aggregate number of units of accommodation in our Licensed Business falls below two-thirds of the total number of units of accommodation in our entire vacation ownership business; (ii) we merge with or acquire control of the assets of Marriott International, Inc., Marriott Vacations Worldwide Corporation, Hyatt Hotels Corporation, Wyndham Destinations and Interval Leisure Group, Inc.  or their respective affiliates and we or they use their brands in any business after such acquisition; or (iii) we become an affiliate of another Hilton competitor.
> 
> Hilton has the right to terminate the license agreement as a whole if, among other things: (i) we file for bankruptcy or cease business operations; (ii) 25 percent or more of our Hilton-branded vacation ownership properties fail certain performance thresholds or the overall customer satisfaction score for all our Hilton-branded vacation ownership properties falls below a certain threshold level, and we do not promptly cure such failures; (iii) we operate the Licensed Business in a way that has a material adverse effect on Hilton; (iv) we fail to pay certain amounts due to Hilton (and in certain cases, do not promptly cure such failures); (v) we contest Hilton’s ownership of the Hilton IP or the Hilton Data; (vi) we merge with, consolidate with or are acquired by a competitor of Hilton; or (vii) we assign the agreement to a non-affiliate without Hilton’s consent.
> 
> Hilton also has the right to “deflag” (prevent use of any Hilton IP or Hilton Data at) any property in our Licensed Business in certain circumstances, including if (i) a $10 million or more final judgment is assessed against such property or a foreclosure suit is initiated against such property and not vacated; (ii) an ongoing threat or danger to public health or safety occurs at such property; (iii) such property fails to meet certain quality assurance system performance thresholds; or (iv) such property is not operated in compliance with the license agreement or Hilton’s other standards and agreements, and such breaches are not cured in accordance with the license agreement.
> 
> If we breach our obligations under the license agreement, Hilton may, in addition to terminating the license agreement, be entitled to (depending on the nature of the breach): seek injunctive relief and/or monetary damages; suspend our access to and terminate our rights to use Licensed IP and/or Hilton Data (other than the Hilton Marks and certain other content); or terminate our rights to use the Licensed IP (including the Hilton Marks) and Hilton Data at specific locations that are not in compliance with performance standards.
> 
> If the license agreement terminates due to our fault before the end of the term, we are required to cease use of the Hilton IP and Hilton Data according to a specified schedule.  Hilton has the right to demand liquidated damages based upon its uncollected royalties and fees for the remainder of the term.
> 
> Hilton has registered certain of the Hilton Marks for vacation ownership services in jurisdictions in which we currently operate vacation ownership resorts and residential projects under the Hilton Marks.  However, Hilton does not have affirmative trademark rights in the Hilton Marks in relation to every aspect of our business in every country around the world, and we, therefore, may not be able to use one or more of the Hilton Marks to expand various aspects of our business into one or more new countries.  If we want to use a Hilton Mark in a country where it is not registered, we will have to seek Hilton’s consent, which may not be withheld if the new trademark would not reasonably be expected to harm or jeopardize the value, validity, reputation or goodwill of the Hilton Marks or subject Hilton to any risk of legal liability.
> 
> Unless we obtain Hilton’s prior written consent, we may not be able to: (i) merge with or acquire a Hilton competitor or a vacation ownership business that has entered into an operating agreement with a Hilton competitor; (ii) merge with or acquire a vacation ownership business together with a lodging business; or (iii) be acquired or combined with any entity other than an affiliate.  We may acquire control of a business that is not a vacation ownership business or a lodging business without Hilton’s consent, but we are required to operate such business as a separate operation that does not use the Hilton IP or Hilton Data unless Hilton consents to such use.  Without Hilton’s prior consent, we may not assign our rights under the license agreement, except to one our affiliates as part of an internal reorganization for tax or administrative purposes.”


For enough money anything can happen but this makes me feel a bit better.


----------



## GT75

nuwermj said:


> If the two companies merged and HGVC management remained in charge (dumping the Diamond team), would that be so bad? No change to HGVC. Both systems continue to run separately (like Wyndham does with its three systems).



If DRI wanted HGVC management then it just needed to hire them.


----------



## nuwermj

GT75 said:


> If DRI wanted HGVC management then it just needed to hire them.



Apollo wants HGVC as a way to legitimate DRI. Apollo needs HGVC management and the system they manage in order to do this.


----------



## dayooper

nuwermj said:


> If the two companies merged and HGVC management remained in charge (dumping the Diamond team), would that be so bad? No change to HGVC. Both systems continue to run separately (like Wyndham does with its three systems).
> 
> Apollo is in deep trouble with Diamond. When it took DRI private in 2016 it had a huge image problem to deal with. That is the image on Wall Street that Diamond's inventory model and customer acquistion was not sustainable. Diamond made a number strategic changes, but these changes have not produced successful results. I think Apollo may be interested in getting control of HGVC management so that Diamond's team can be dumped.



I know HGVC is different than the smaller systems that DRI has assimilated, but their MO is to absorb the resorts, raise MF’s through the roof and bully its new members into paying a crap ton of money for something they already own. If Apollo really wanted to move toward the HGVC model, why would they spend billions acquiring a new system when they could pluck a few choice executives from HGVC and allow them to change how they run their resorts? I think Apollo/DRI wants the upscale HGVC resorts and the ability to charge us HGVC members an obscene amount of money to use what we already own.


----------



## JIMinNC

nuwermj said:


> If the two companies merged and HGVC management remained in charge (dumping the Diamond team), would that be so bad? No change to HGVC. Both systems continue to run separately (like Wyndham does with its three systems).
> 
> Apollo is in deep trouble with Diamond. When it took DRI private in 2016 it had a huge image problem to deal with. That is the image on Wall Street that Diamond's inventory model and customer acquistion was not sustainable. Diamond made a number strategic changes, but these changes have not produced successful results. I think Apollo may be interested in getting control of HGVC management so that Diamond's team can be dumped.



In theory that would be a potentially better outcome for HGVC - as long as the Diamond stench didn’t infect HGVC by association.


----------



## nuwermj

dayooper said:


> If Apollo really wanted to move toward the HGVC model, why would they spend billions acquiring a new system when they could pluck a few choice executives from HGVC and allow them to change how they run their resorts?



It would take too long to make these changes internally. And image is important in this case. If Apollo can show HGVC is in charge, then they don't need to wait for Diamond's bottom line to turn around.


----------



## CalGalTraveler

nuwermj said:


> Apollo wants HGVC as a way to legitimate DRI. Apollo needs HGVC management and the system they manage in order to do this.



Very interesting observations. If true, the Hilton Brand would be very important to overcoming such concerns. Wouldn't the brand license be lost in a takeover? I haven't been able to dissect the legalese above.

If they are trying to overcome Diamond brand issues, it wouldn't make sense to run both systems separately and keep both brands.

Lastly, I am not convinced that overcoming the brand issues would be sufficient motivator for such a large acquisition. While I can understand MVC synergy with Vistana to align with the hotel partners and leverage each others deal flow and bases,  I don't understand the synergy of these two brands other than to leverage the HGVC Hilton hotel deal flow into Diamond resort presentations. What Hotel or other deal flow does Diamond bring to the table?

What do they ultimately hope to get out of the deal? Do they hope to upsell Diamond members to HGVC as a revenue source? Sure HGVC would gain additional locations, but with the exception of Embarc and a few others, the quality is lower, I am not sure how many would buy access vs. trade.

Besides HGVC owners can gain access today to some Diamond Resorts via RCI.


----------



## terces

HGV jumped 10.74% today to $31.24


----------



## nuwermj

CalGalTraveler said:


> What do they [Apollo] ultimately hope to get out of the deal? Do they hope to upsell Diamond members to HGVC as a revenue source? Sure HGVC would gain additional locations, but given the quality is lower, I am not sure how many would buy access vs. trade.



Apollo wants to liquidate its holdings in Diamond. It paid $2.2 billion in 2016. They are now approaching year fourth of their investment. Their target price is about $4 billion. The longer they delay, the lower the rate of return per year becomes. 

Notice in the news story, Apollo says they are willing to buy HGVC and take it private, or merge it with Diamond and leave it public. Either way they are trying to create value (real and perceived) in the eyes of Wall Street.


----------



## CalGalTraveler

IMO Apollo seems to have this backward. If they really wanted out of Diamond to overcome brand concerns they would structure the deal to sell Diamond to HGVC/Blackstone as an HGVC acquisition of Diamond. But this is not my wheelhouse. Maybe they are approaching this from what they can control.


----------



## dayooper

nuwermj said:


> Apollo wants to liquidate its holdings in Diamond. It paid $2.2 billion in 2016. They are now approaching year fourth of their investment. Their target price is about $4 billion. The longer they delay, the lower the rate of return per year becomes.
> 
> Notice in the news story, Apollo says they are willing to buy HGVC and take it private, or merge it with Diamond and leave it public. Either way they are trying to create value (real and perceived) in the eyes of Wall Street.



I’m not a huge investor (I play a safe game with my investments and let someone I trust run them) so help me understand. You are saying Apollo wants to spend billions of dollars to take over HGVC so their management can take over the entire operation and increase its brand image value with Wall Street. By changing the brand image, it will make it easier to liquidate their holdings in DRI. Help me understand this. I’m not a business man (I’m a science teacher/coach) so I’m not sure how this would work and how Apollo would make out in the long run.


----------



## JIMinNC

dayooper said:


> I’m not a huge investor (I play a safe game with my investments and let someone I trust run them) so help me understand. You are saying Apollo wants to spend billions of dollars to take over HGVC so their management can take over the entire operation and increase its brand image value with Wall Street. By changing the brand image, it will make it easier to liquidate their holdings in DRI. Help me understand this. I’m not a business man (I’m a science teacher/coach) so I’m not sure how this would work and how Apollo would make out in the long run.



Apollo's strategy is to buy out-of-favor companies at deep discounts to the market, improve their performance, and then typically sell them for a big profit later. That's an oversimplification, but their goal is to buy companies cheaply and then sell them at a profit. Their ultimate goal is to make lots of money for the large investors who invest in their private equity funds.  https://www.apollo.com/our-business/private-equity

Among the other companies they own other than Diamond are ADT Security and Chuck E. Cheese's. I think they missed the boat by not making Chuck E. Cheese the Diamond spokesman (spokes-rat?)


----------



## bizaro86

GT75 said:


> If DRI wanted HGVC management then it just needed to hire them.



They already tried that - the CFO of Diamond was formerly the CFO of HGVC.


----------



## dayooper

JIMinNC said:


> Apollo's strategy is to buy out-of-favor companies at deep discounts to the market, improve their performance, and then typically sell them for a big profit later. That's an oversimplification, but their goal is to buy companies cheaply and then sell them at a profit. Their ultimate goal is to make lots of money for the large investors who invest in their private equity funds.  https://www.apollo.com/our-business/private-equity
> 
> Among the other companies they own other than Diamond are ADT Security and Chuck E. Cheese's. I think they missed the boat by not making Chuck E. Cheese a Diamond sales rep!



So what @nuwermj is saying is that by combining HGVC with DRI, the whole becomes greater than the sum of the parts. If their target is selling at $4 billion that nuwermj is saying and they paid $2.2 billion for the initial DRI investment, they would have to pay significantly less for HGVC than what they are reporting in the above article ($2.4 billion), correct? Or do they squeeze every last penny out of the system and sell it for a “small” loss, while the returns make it a profit?


----------



## escanoe

bizaro86 said:


> They already tried that - the CFO of Diamond was formerly the CFO of HGVC.



Yes, but they did not exactly hire him away from HGVC. He was first terminated from HGVC “for conduct and behavior not consistent with the company’s policies.”

https://www.bloomberg.com/amp/news/...sorts-hires-cfo-fired-from-last-timeshare-job

Obviously, we have no idea what happened. It could be a privately held company may have more flexibility to have such an individual than one that is publicly held.

I’m not just going to assume this CFO is dreaming about how chummy he wants to be with a management team that let him go.


----------



## JIMinNC

dayooper said:


> So what @nuwermj is saying is that by combining HGVC with DRI, the whole becomes greater than the sum of the parts. If their target is selling at $4 billion that nuwermj is saying and they paid $2.2 billion for the initial DRI investment, they would have to pay significantly less for HGVC than what they are reporting in the above article ($2.4 billion), correct? Or do they squeeze every last penny out of the system and sell it for a “small” loss, while the returns make it a profit?



If they did pay $2.4 billion for HGVC, on top of the $2.2 billion they paid for DRI, they would likely be looking to eventually realize a heck of lot more than $4 billion from the combination. Saying that “The whole becomes greater than the sum of the parts” is certainly a way to state it, but they would then have an investment of over $4.6 billion in the timeshare business, so they would hope that the combination could be leveraged to generate an eventual return far greater than that.


----------



## Tamaradarann

SmithOp said:


> Relax, the sky isn’t falling yet.
> 
> Look at the other merger, there still isn’t a consolidated points/trust system at Marriott/Vistana yet, and it may never happen.
> 
> I can’t imagine how they will merge DRI points with HGVC points.
> 
> If we choose to keep out Hawaii deeds they still have to allow us to book what we own right up to 1 week+ 9 months.  Even now at 9 months we have to contend with other points owner booking Hawaii, it operates very similar to a trust.  Airfares and travel distances keep Hawaii out of reach for most as an every year option.
> 
> Recall the earnings transcript about HGVC looking at a trust system, wonder if they knew about this offer already?
> 
> It will suck for me because I never intend to book what I own in Hawaii, I get better bang by point stretching smaller units and weekdays in club season.
> 
> Weren’t you thinking about selling anyway since you purchased a condo in Hawaii?  Might be a good time to dump HGVC.
> 
> 
> Sent from my iPad using Tapatalk Pro



SmithOp you seem to be reading my mind with your last statement, however, we were intending on dumping some of our units anyway since we mostly use our points from Florida and Vegas in Honolulu and we do not need to do that anymore.

The only HGVC resort that we own that we have stayed in is Miami South Beach.  We probably will not be staying there anymore since we have our winter refuge in Honolulu.  Since we rarely stay where we own your comment about keeping out Hawaii deeds is not relevant.  We have always felt that the value in an HGVC purchase was that you could use your points anywhere in the system at 9 months and there was usually availability.  If a Trust System takes that away it devalues what we purchased.


----------



## Tamaradarann

bizaro86 said:


> They already tried that - the CFO of Diamond was formerly the CFO of HGVC.



However, he was a CFO.  A CFO is a glorified accountant or Bean Counter as some say.  I am a retired Operations Professional.  Operations People and the Bean Counters are 2 different types of people and think differently.  Bean Counters look at the bottom financial line. Operations people look at how thinks work or don't work.  That is one of the reasons that we own six 1 BR, 2 BR and 3 BR units in Las Vegas and Florida but we stay in Studios for about 16 weeks of vacation a year anywhere in the HGVC system.


----------



## nuwermj

JIMinNC said:


> If they did pay $2.4 billion for HGVC, on top of the $2.2 billion they paid for DRI, they would likely be looking to eventually realize a heck of lot more than $4 billion from the combination. Saying that “The whole becomes greater than the sum of the parts” is certainly a way to state it, but they would then have an investment of over $4.6 billion in the timeshare business, so they would hope that the combination could be leveraged to generate an eventual return far greater than that.



HGV's recent guidance projects adjusted EBITDA to be between $379M and $399M. Diamond's is projected to be about $420M. Marriott paid over 10x EBITDA for Vistana and Bluegreen sold for 9x EBITDA after it went public in 2017. This would put the combined company's value somewhere between $7B and $8.2B. (HGV's current enterprise value is $3.9B.)

Unless a recession comes, I think these are reasonable valuations if Apollo can sell it to Wall Street.


----------



## nuwermj

CalGalTraveler said:


> IMO Apollo seems to have this backward. If they really wanted out of Diamond to overcome brand concerns they would structure the deal to sell Diamond to HGVC/Blackstone as an HGVC acquisition of Diamond.



That is one of the three options stated in the news article. "merge the company [HGV] with smaller Apollo-owned rival Diamond Resorts and keep the combined business public..."


----------



## terces

Another point is I do not see in the agreements where a resort like Las Vegas Boulevard is required to stay in any system.  It is completely sold out and run by the HOA, and HGVC is under a year-to-year agreement to operate a timeshare function out of it.  I don't know about other resorts, but if DRI tried to degrade this property or crank the MF's it could walk.  This is of course extreme thinking, but at the end of the day I bought into a quality property for a great price, and I feel it is in a good position going forward.


----------



## dayooper

terces said:


> Another point is I do not see in the agreements where a resort like Las Vegas Boulevard is required to stay in any system.  It is completely sold out and run by the HOA, and HGVC is under a year-to-year agreement to operate a timeshare function out of it.  I don't know about other resorts, but if DRI tried to degrade this property or crank the MF's it could walk.  This is of course extreme thinking, but at the end of the day I bought into a quality property for a great price, and I feel it is in a good position going forward.



Flamingo has been sold out for years. I was wondering that as well.


----------



## JIMinNC

terces said:


> Another point is I do not see in the agreements where a resort like Las Vegas Boulevard is required to stay in any system.  It is completely sold out and run by the HOA, and HGVC is under a year-to-year agreement to operate a timeshare function out of it.  I don't know about other resorts, but if DRI tried to degrade this property or crank the MF's it could walk.  This is of course extreme thinking, but at the end of the day I bought into a quality property for a great price, and I feel it is in a good position going forward.





dayooper said:


> Flamingo has been sold out for years. I was wondering that as well.



Just because a resort is sold out does not mean the developer does not still have de-facto control of the Board. HGVC still owns inventory as a result of ROFR, upgrades, etc. In addition most large developers who are engaged on ongoing sales at a location will hand-pick Board candidates who will vote their interests and the ballots don't disclose which candidates have the strongest developer ties. For something like this to happen, an HOA would have to organize in ways that timeshare HOAs rarely do, and wrest control of the Board from the developer by electing candidates who favor a change of property manager. Given the large number of owners and fragmented nature of timeshare ownership, that is historically very hard to do. Affiliates that have a weaker tie to the developer - like the HGVC affiliates in SW Florida - are a different beast, and tend to be more owner-controlled I suspect.

I know from our years as a Diamond owner up until 2014, in their system, two or three Board members at our home resort on Maui were actually Diamond employees.


----------



## Ralph Sir Edward

If memory serves me, Bay Club is similar to the SW Florida affiliates.

In addition, you don't even have to join HGVC to own at Bay Club. (I don't).

How that would work out would be very interesting. . . .


----------



## CalGalTraveler

nuwermj said:


> That is one of the three options stated in the news article. "merge the company [HGV] with smaller Apollo-owned rival Diamond Resorts and keep the combined business public..."



I certainly hope HGVC would take over Diamond and bring it up to HGVC standards and not vice versa. What is odd is that they refer in the article to Diamond as smaller than HGVC but the information on EBITA suggests the opposite:

"[HGVC] EBITDA to be between $379M and $399M. Diamond's is projected to be about $420M."


----------



## JIMinNC

nuwermj said:


> HGV's recent guidance projects adjusted EBITDA to be between $379M and $399M. Diamond's is projected to be about $420M. Marriott paid over 10x EBITDA for Vistana and Bluegreen sold for 9x EBITDA after it went public in 2017. This would put the combined company's value somewhere between $7B and $8.2B. (HGV's current enterprise value is $3.9B.)
> 
> Unless a recession comes, I think these are reasonable valuations if Apollo can sell it to Wall Street.



Makes sense that would be the target valuation they would want to try to build the combination too. If they were to wind up with both for a total investment of $4.6 billion (theoretically) and then in a number of years sell the combined entity or take it back public at an $8 billion valuation, that would be a reasonable goal for them.

Though I wouldn't be so quick to assume that Apollo sees HGVC management and the HGVC business as their silver sword to "fix" Diamond. HGVC has it's own issues and disappointed during the last two earnings quarters. They seem to be struggling matching their available inventory type to the demand. They received a lot of push-back on their last earnings call for not having a trust product and being dependent on location-based sales. Their faster-than-expected sell-out of the high-$$$ Ocean Tower on the Big Island has caused a huge hole in their high-end inventory supply in that market that won't be filled until 2020. I could actually see Apollo licking their chops over overlaying the Diamond trust-based sales/re-sales model onto HGVC's higher-end inventory as a way to rapidly grow revenue predictability and more rapidly recoup their investment in both entities.


----------



## dayooper

JIMinNC said:


> Makes sense that would be the target valuation they would want to try to build the combination too. If they were to wind up with both for a total investment of $4.6 billion (theoretically) and then in a number of years sell the combined entity or take it back public at an $8 billion valuation, that would be a reasonable goal for them.
> 
> Though I wouldn't be so quick to assume that Apollo sees HGVC management and the HGVC business as their silver sword to "fix" Diamond. HGVC has it's own issues and disappointed during the last two earnings quarters. They seem to be struggling matching their available inventory type to the demand. They received a lot of push-back on their last earnings call for not having a trust product and being dependent on location-based sales. Their faster-than-expected sell-out of the high-$$$ Ocean Tower on the Big Island has caused a huge hole in their high-end inventory supply in that market that won't be filled until 2020. I could actually see Apollo licking their chops over overlaying the Diamond trust-based sales/re-sales model onto HGVC's higher-end inventory as a way to rapidly grow revenue predictability and more rapidly recoup their investment in both entities.



This is my fear. If this is the case, and they remove the ability to use the club, it’s RCI for me!


----------



## CalGalTraveler

@JIMinNC that explanation makes sense. With HGVC Maui Villas sounding like it will be delayed or reduced due to local opposition, Diamond has some nuggets in their portfolio that could be renovated/upgraded to HGVC standard and resold rapidly. Specifically:

* Kaanapali Beach Club on Maui
* Embarc / former Interwest properties (Whistler, Calif Desert, Ixtapa, Eastern Canada etc.)
* Lake Tahoe Resort (former Embassy Suites).
* The Modern Honolulu which is only 1 block away from HHV.

What other Diamond properties/locations would add significant value to the HGVC portfolio?


----------



## JIMinNC

dayooper said:


> This is my fear. If this is the case, and they remove the ability to use the club, it’s RCI for me!



Waaaay to early to get spun up over what may happen. It's still just a rumor - maybe a credible one, but a rumor nonetheless. It may or may not happen, and if it does, we won't know for a long time what the impact will be on HGVC.


----------



## JIMinNC

CalGalTraveler said:


> With HGVC Maui Villas sounding like it will be delayed or reduced due to local opposition,



I'm not sure I would agree that it "sounds like" that project will be delayed or reduced. Yes, the discovery of some bones near the edge of the property has given the local anti-development groups a reason to again raise issues, but no permits have been revoked (at least so far) and construction is proceeding. Given the anti-timeshare bias on Maui, it is certainly "possible" that roadblocks could be erected in the path of this project, but I don't think it's accurate to imply that is likely to be successful, at least based on what we know now.


----------



## dayooper

JIMinNC said:


> Waaaay to early to get spun up over what may happen. It's still just a rumor - maybe a credible one, but a rumor nonetheless. It may or may not happen, and if it does, we won't know for a long time what the impact will be on HGVC.



Oh, I know. Hopefully it’s just a rumor from the Apollo side and HGVC has a contingency plan (or the whole thing gets debunked). That being said, I’m not paying more money to use what I already own. That’s Diamond’s MO. I see them as locusts who devour everything in their path. Jack up MF’s and bully owners to pay more money by making their ownership so worthless they have to throw more money to make their original purchase retain any value.


----------



## csodjd

JIMinNC said:


> I'm not sure I would agree that it "sounds like" that project will be delayed or reduced. Yes, the discovery of some bones near the edge of the property has given the local anti-development groups a reason to again raise issues, but no permits have been revoked (at least so far) and construction is proceeding. Given the anti-timeshare bias on Maui, it is certainly "possible" that roadblocks could be erected in the path of this project, but I don't think it's accurate to imply that is likely to be successful, at least based on what we know now.


Agree. They’ve had a lot of time to raise objections and slow or stop HGVC from proceeding. Now construction is underway, and to get a Court to block work would be difficult given the harm it would cause to the developer at this point. They’d probably have to show some kind of fraud by the developers in the approval process.


----------



## brp

csodjd said:


> They’d probably have to show some kind of fraud by the developers in the approval process.



If they had the timeshare salesweasels negotiating the contract and approval process, finding inaccuracy and fraud might not be that hard 

Cheers.


----------



## Bao Nguyen

I hope just a rumor too.  I just checked Diamond resorts in Hawaii and none of them looked  nice.   https://www.diamondresorts.com/destinations/property/The-Modern-Honolulu 
Read the red  banner.


----------



## 1Kflyerguy

JIMinNC said:


> Waaaay to early to get spun up over what may happen. It's still just a rumor - maybe a credible one, but a rumor nonetheless. It may or may not happen, and if it does, we won't know for a long time what the impact will be on HGVC.



I agree its too early to get spun up, as everything is just speculation...  I don't typically look to the NY Post for business news,  but there has not been a public statement or denial from either HGV or Apollo yet.

Of course this may have just been exploration of an idea that got leaked.. 

I wonder what Hilton's take on the idea is?  The HGV resort network is certainly integrated with Hilton,  with shared properties like HHV, HWV,  The District, Residences, Hilton Club NYC etc.    While they don't have veto power, they might be the nudge to get another bid going from someone different.


----------



## HGVC Lover

Some financial analysts are reporting that Blackstone Group would be a probable suitor too.....I would prefer them over DRI....


----------



## CalGalTraveler

How does Diamond get its deal flow and revenue? Are they aligned with a hotel brand which brings them leads? Or are they primarily living off of their existing customers? They may be salivating to get that hotel deal flow and Hilton brand quality as they may have wrung their base dry (alienating many owners in the process who closed their wallets to additional purchases, or are aging out) and have limited ways to grow the topline.  If true, limited future revenue streams would impair Apollo's ability to sell DRI at a premium.)

FWIW...It appears that Diamond acquires other TS groups and seems to operate them autonomously e.g. Embarc/Intrawest. If HGVC were to acquire Diamond, one of the first items I would envision would be to pare the portfolios and spin off resorts/collections that are too costly to renovate, don't fit the brand, and/or create a drag on profitability.

I sincerely hope Maui opens on time with the resort as planned and the Diamond rumors are false or rejected by HGV.


----------



## hurnik

csodjd said:


> Agree. They’ve had a lot of time to raise objections and slow or stop HGVC from proceeding. Now construction is underway, and to get a Court to block work would be difficult given the harm it would cause to the developer at this point. They’d probably have to show some kind of fraud by the developers in the approval process.



It's very easy (IMO) in Hawaii to get things halted if the locals oppose it.  Things work a little differently over there.


----------



## csodjd

hurnik said:


> It's very easy (IMO) in Hawaii to get things halted if the locals oppose it.  Things work a little differently over there.


True, I’m sure. But they didn’t get it halted when it was relatively easy. It’s not even clear they opposed it with much vigor. As every day passes, it’s just that much harder — especially now that they are employing more and more construction companies and people in the community.


----------



## JIMinNC

CalGalTraveler said:


> How does Diamond get its deal flow and revenue? Are they aligned with a hotel brand which brings them leads? Or are they primarily living off of their existing customers? They may be salivating to get that hotel deal flow and Hilton brand quality as they may have wrung their base dry (alienating many owners in the process who closed their wallets to additional purchases, or are aging out) and have limited ways to grow the topline.  If true, limited future revenue streams would impair Apollo's ability to sell DRI at a premium.)



As far as I know, DRI does not have a linkage with a hotel brand of any kind. Their tour flow likely comes from a number of sources:
1) Existing owners staying in their ownership or using their points/club membership to stay at DRI resorts
2) RCI and II exchangers (many of their resorts are dual-affiliated)
3) Cash rentals of developer inventory and solicitation of those guests for tours
4) Preview packages directed at prospect mailing lists (not hotel-program based) - also using developer inventory
5) Off-Premise contacts - i.e. - the kiosks and activity booths who are paid to solicit timeshare tours in exchange for discounts on vacation activities in resort areas

On the question of DRI being able to leverage the Hilton Hotels/Hilton Honors customer database to solicit for their programs, I would think Hilton Hotels would have veto power over that unless the properties were Hilton-branded. Given the different structures of the DRI program from HGVC, I would think they would likely face the same kind of consolidation issues/conundrum that we've discussed over on the Marriott and Vistana boards about that merger. It won't be easy to create a consolidated program that would allow Hilton branding on DRI-managed properties - even off they were brought up to HGVC standards - unless there was a lot of unsold inventory that could be moved to HGVC and taken out of DRI.


----------



## nuwermj

CalGalTraveler said:


> How does Diamond get its deal flow and revenue? Are they aligned with a hotel brand which brings them leads? Or are they primarily living off of their existing customers? They may be salivating to get that hotel deal flow and Hilton brand quality as they may have wrung their base dry (alienating many owners in the process who closed their wallets to additional purchases, or are aging out) and have limited ways to grow the topline.  If true, limited future revenue streams would impair Apollo's ability to sell DRI at a premium.)
> 
> FWIW...It appears that Diamond acquires other TS groups and seems to operate them autonomously e.g. Embarc/Intrawest. If HGVC were to acquire Diamond, one of the first items I would envision would be to pare the portfolios and spin off resorts/collections that are too costly to renovate, don't fit the brand, and/or create a drag on profitability.



Between 2010 and 2016 Diamond's strategy was to acquire new customers. They would buy small timeshare systems (recently it was Gold Key in Virginia Beach) and try to get those owners to convert to Diamond points. Also, they structured their points system to encourage incremental purchases of points. Thus, by 2016, 60% of sales were made to existing point owners, 20% to acquired customers, and only 20% to new customers (the new customers were channeled through traditional sources, like II exchangers, renters, and short stay vacation packages). For reference Marriott sales were 60% existing members and 40% new customers, and their target was 50/50. 

Wall Street lost confidence in Diamond's strategy and it was one of the reasons the Company was taken private in September 2016. Since then Diamond has set a goal of 40% new customers. But to meet this goal they are offing very big incentives and therefore their marketing costs  have skyrocketed. The company's management is saying that once they hook the new customer, then they will make more incremental purchases and the cost of selling will fall. But this is not yet been proven in the financial numbers. 

So, yes, Diamond might be attracted by the hotel channel (even Bluegreen uses Choice Hotels as a funnel for new leads). Maybe Diamond will take-on the Hampton Inn niche on the timeshare side and HGVC will focus on the higher end segment of the market. GM sells Chevy's and Caddy's.


----------



## CalGalTraveler

@nuwermj It sounds from your info that Diamond is not in a good place being odd-man out with the hotel chains and accumulating TS systems but using sticks instead of carrots to drive revenue from their base which does not drive repeat loyalty business and advocacy to new buyers. This is coming home to roost and Apollo may be desperate - especially with a recession on the horizon.

Interesting idea on the Hampton Inn niche vs. upscale. This would be a more difficult task than integrating MVC/Vistana/Hyatt who is working with a relatively uniform customer upper income tier.

I question if HGVC has the skill-set to run a cost-constrained mid-tier operation for lower income-tier buyers. IMO it's the lower income buyers that run into the most problems with timeshares because they have less discretionary budget so default more often because they cannot absorb and ride out a negative hit to their budget.  Apollo may do better going after HICV or be acquired by Wyndham.


----------



## geist1223

I assume that if DRI buys HGVC it will be maintained as a Collection. DRI has 7 to 9 Collections at this time. Members of a Collection have a 13 month Booking Window in their Home Collection and a 10 month Booking Window in all other Collections. Resell purchasers can only Book into their Home Collection.


----------



## nuwermj

geist1223 said:


> I assume that if DRI buys HGVC it will be maintained as a Collection. DRI has 7 to 9 Collections at this time. Members of a Collection have a 13 month Booking Window in their Home Collection and a 10 month Booking Window in all other Collections. Resell purchasers can only Book into their Home Collection.



My understanding is that HGVC has no trust-fund based points system. Everyone owns deeds at specific resorts. So, if a merger comes to pass and if DRI management remains in charge, HGVC cannot be a DRI collection.


----------



## CalGalTraveler

geist1223 said:


> I assume that if DRI buys HGVC it will be maintained as a Collection. DRI has 7 to 9 Collections at this time. Members of a Collection have a 13 month Booking Window in their Home Collection and a 10 month Booking Window in all other Collections. Resell purchasers can only Book into their Home Collection.



This is a major concern. Keeping it separate would be fine but opening HGVC inventory to the Diamond collections will be a major problem. Everyone will want HGVC inventory and except for a few nuggets such as Embarc, most HGVers will not want to stay at the majority of Diamond properties. With MVC, Vistana and Hyatt, the properties are equivalent quality-wise so overall you are not trading off a lower quality unit for a higher quality one. This is different.  How have the Embarc properties fared under this approach?


----------



## nuwermj

CalGalTraveler said:


> How have the Embarc properties fared under this approach?



The nine Embarc locations and their club are completely separate from the Diamond Club. Diamond members can stay at an Embarc location only through an II exchange and vice-a-versa.


----------



## JIMinNC

CalGalTraveler said:


> Apollo may be desperate - especially with a recession on the horizon.



A recession is always on the horizon to some extent. If people keep saying "A recession is just around the corner" it's going to create one because people will cut back.

Everyone has been screaming recession ever since the very brief yield curve inversion (it actually inverted for a few brief minutes today again), but they are missing the point that this yield curve inversion is happening backward from the typical inversion, so it may mean something totally different. As Byron Wein, the Vice Chariman of Blackstone, said on CNBC this morning, typically the yield curve inverts because the Fed is rapidly raising interest rates in the face of rising inflation, so the short-term yields get boosted above the long term yields and economic growth slows. But in this case, the reverse is happening, long-term rates are being driven down to historic low levels below the already-low short term rates because foreign investors faced with negative yielding bonds all over Europe are being driven to buy U.S. Treasuries because we are about the only place in the world where you can buy high quality government bonds with a positive rate. Our economy is much stronger relative to the rest of the world, so the capital is coming here, driving up long-term bond prices, which drives down long-term yields. That is a totally different economic scenario than the situation that usually causes a yield curve inversion.


----------



## csodjd

JIMinNC said:


> A recession is always on the horizon to some extent. If people keep saying "A recession is just around the corner" it's going to create one because people will cut back.
> 
> Everyone has been screaming recession ever since the very brief yield curve inversion (it actually inverted for a few brief minutes today again), but they are missing the point that this yield curve inversion is happening backward from the typical inversion, so it may mean something totally different. As Byron Wein, the Vice Chariman of Blackstone, said on CNBC this morning, typically the yield curve inverts because the Fed is rapidly raising interest rates in the face of rising inflation, so the short-term yields get boosted above the long term yields and economic growth slows. But in this case, the reverse is happening, long-term rates are being driven down to historic low levels below the already-low short term rates because foreign investors faced with negative yielding bonds all over Europe are being driven to buy U.S. Treasuries because we are about the only place in the world where you can buy high quality government bonds with a positive rate. Our economy is much stronger relative to the rest of the world, so the capital is coming here, driving up long-term bond prices, which drives down long-term yields. That is a totally different economic scenario than the situation that usually causes a yield curve inversion.


However, the job report was just adjusted downward by 500,000, US Steel is laying people off, copper is in the dumpster, transportation stocks/ETFs are down, and we are hearing about one well-known company after another, albeit something of a trickle, but a steady trickle, filing BK. And, of course, deficits are way up. Finally, what could be the final nail, there is an ENORMOUS amount of corporate debt coming due in the next few years. If banks don’t go along and refinance that debt the BK trickle will be a flood. 

https://www.forbes.com/sites/mayrar...uring-in-five-years-rises-to-over-2-trillion/

These are precarious times.


----------



## JIMinNC

csodjd said:


> However, the job report was just adjusted downward by 500,000, US Steel is laying people off, copper is in the dumpster, transportation stocks/ETFs are down, and we are hearing about one well-known company after another, albeit something of a trickle, but a steady trickle, filing BK. And, of course, deficits are way up. Finally, what could be the final nail, there is an ENORMOUS amount of corporate debt coming due in the next few years. If banks don’t go along and refinance that debt the BK trickle will be a flood.
> 
> https://www.forbes.com/sites/mayrar...uring-in-five-years-rises-to-over-2-trillion/
> 
> These are precarious times.



That 500,000 revision was over all of 2018 and the first part of 2019, and from what I read was mainly because there weren’t enough job seekers to fill available jobs.

Also for every company that has had issues there are companies like Target and Lowe’s that today reported stellar results. July consumer spending was robust. The CEO of Bank of America, Brian Moynihan, said today that he thinks the strong US consumer is going to keep us out of recession in 2020. But if the talking heads keep saying a recession is coming it will impact consumer confidence and be a self fulfilling prophecy. 

We are definitely in the latter stages of the expansion that began in 2009-2010, but since that expansion has been slow and steady rather than a boom, the business cycle is elongated. Given the overall place the economy is in, as long as the trade war doesn’t get too far over the edge, I think the economy will be OK in 2020 and I would be surprised if we see a recession before 2021.


----------



## csodjd

JIMinNC said:


> Also for every company that has had issues there are companies like Target and Lowe’s that today reported stellar results. July consumer spending was robust. The CEO of Bank of America, Brian Moynihan, said today that he thinks the strong US consumer is going to keep us out of recession in 2020. But if the talking heads keep saying a recession is coming it will impact consumer confidence and be a self fulfilling prophecy.


It is, to me, a false success. If I borrow $500k from the equity of my home, and go on a shopping spree, people will say, wow, he must be doing great, look at all the money he’s spending. Of course, then I’m going to get a bill and I won’t be able to pay it. That’s our economy today. The government is borrowing up the you know what, to enable businesses to APPEAR to be making more money, and to enable individuals to THINK they have more spending money. In the meantime, the deficit will exceed $1 TRILLION — during supposedly “great” economic times. There has to be a day of reckoning. Whether it’s 2020, or 2021, who knows? External forces can make it sooner or later. When considering a “long term” plan, that distinction doesn’t matter.


----------



## JIMinNC

csodjd said:


> It is, to me, a false success. If I borrow $500k from the equity of my home, and go on a shopping spree, people will say, wow, he must be doing great, look at all the money he’s spending. Of course, then I’m going to get a bill and I won’t be able to pay it. That’s our economy today. The government is borrowing up the you know what, to enable businesses to APPEAR to be making more money, and to enable individuals to THINK they have more spending money. In the meantime, the deficit will exceed $1 TRILLION — during supposedly “great” economic times. There has to be a day of reckoning. Whether it’s 2020, or 2021, who knows? External forces can make it sooner or later. When considering a “long term” plan, that distinction doesn’t matter.



Oh, no question, that bill is going to come due one of these days. I just don’t think what is going on now and causing all the “buzz” is what is going to send us over that cliff. People have been predicting the cliff is coming soon for a long time, though. It’s like the “Big One” in California. It will come. It could be tomorrow. But it might not be for a long time.


----------



## Tamaradarann

nuwermj said:


> My understanding is that HGVC has no trust-fund based points system. Everyone owns deeds at specific resorts. So, if a merger comes to pass and if DRI management remains in charge, HGVC cannot be a DRI collection.



Why couldn't DRI treat HGVC resorts as another collection.  HGVC owners of the resort and unit they own have a 9-12 or 9-13 month window to book as it is now.  Then they could either have HGVC owners at other resorts and DRI owners have a 1-9 month window to book which would be the "Club Window";  or if they want to give HGVC owners their own "Club/Collection Window" of 6-9 months, and DRI owners a 1-6 month window.


----------



## pedro47

This could be a move to benefit both companies adding more resorts for their clientele.


----------



## dougp26364

When we were DRI owners, we enjoyed all the locations are respectable quality....... but we dumped both our DRI weeks because they were quickly becoming as expensive as our Marriott weeks and more expensive than our Hilton weeks without equaling those companies quality standards. If DRI takes over Hilton, I’m afraid I’ll have to give serious consideration to dumping our HGVC week sooner rather than later. I’ve kept Hilton mainly because I like their system and Elara has become our favorite timeshare in Vegas. But I’m more inclined to bail out BEFORE Diamond begins jacking the fee’s and all the bad press starts that’s bound to happen.


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## nuwermj

Tamaradarann said:


> Why couldn't DRI treat HGVC resorts as another collection.  HGVC owners of the resort and unit they own have a 9-12 or 9-13 month window to book as it is now.  Then they could either have HGVC owners at other resorts and DRI owners have a 1-9 month window to book which would be the "Club Window";  or if they want to give HGVC owners their own "Club/Collection Window" of 6-9 months, and DRI owners a 1-6 month window.



In the Diamond world a collection is an HOA which governs its members rights and obligations in a trust fund or pool of timeshare deeds at multiple resorts. Collections then affiliated with Club Diamond which is a proprietary exchange company. The important aspect of an exchange company is to get legal control over the use rights of a timeshare. 

If Diamond acquired HGV it could not legally take a HGV deed and assign its use rights to their Club, nor could they transfer it to a trust fund. The HGV Club would remain as is, and current owners would continue using the HGVC as before. 

Diamond could approach a HGV deed owner (they would do this on a sales floor but it could be done otherwise) with a deal to join Club Diamond, and thereby have the deed's use rights voluntarily assigned to the exchange company. But this would be done deed by deed and there would be no collection (no trust fund of deeds) involved. Alternatively, Diamond could create a HGV trust fund and encourage deeded owners to surrender their deed in exchange for trust fund points. Owners in this new trust fund would then become members of Club Diamond.

Club Diamond has deeded members whose use rights are assigned to it. They offer this to Gold Key owners in Virginia Beach so long as that person also buys additional trust fund points. So, if the two companies merge and if Diamond's management retains control of the new company, they could permit HGV owners to join the Diamond Club but no collection is necessary for this to happen.  

Nevertheless, I don't think anything like this would come to pass, even if Diamond were in control of the final merged company. There is more money to made by keeping HGVC and Club Diamond separate, charging higher prices to HGVC and lower prices to Club Diamond members. This way they could sell into two different income segments of the market.


----------



## Ralph Sir Edward

nuwermj said:


> The nine Embarc locations and their club are completely separate from the Diamond Club. Diamond members can stay at an Embarc location only through an II exchange and vice-a-versa.



II for Diamond versus RCI for HGVC? Another interesting conundrum. . . .


----------



## Tamaradarann

nuwermj said:


> In the Diamond world a collection is an HOA which governs its members rights and obligations in a trust fund or pool of timeshare deeds at multiple resorts. Collections then affiliated with Club Diamond which is a proprietary exchange company. The important aspect of an exchange company is to get legal control over the use rights of a timeshare.
> 
> If Diamond acquired HGV it could not legally take a HGV deed and assign its use rights to their Club, nor could they transfer it to a trust fund. The HGV Club would remain as is, and current owners would continue using the HGVC as before.
> 
> Diamond could approach a HGV deed owner (they would do this on a sales floor but it could be done otherwise) with a deal to join Club Diamond, and thereby have the deed's use rights voluntarily assigned to the exchange company. But this would be done deed by deed and there would be no collection (no trust fund of deeds) involved. Alternatively, Diamond could create a HGV trust fund and encourage deeded owners to surrender their deed in exchange for trust fund points. Owners in this new trust fund would then become members of Club Diamond.
> 
> Club Diamond has deeded members whose use rights are assigned to it. They offer this to Gold Key owners in Virginia Beach so long as that person also buys additional trust fund points. So, if the two companies merge and if Diamond's management retains control of the new company, they could permit HGV owners to join the Diamond Club but no collection is necessary for this to happen.
> 
> Nevertheless, I don't think anything like this would come to pass, even if Diamond were in control of the final merged company. There is more money to made by keeping HGVC and Club Diamond separate, charging higher prices to HGVC and lower prices to Club Diamond members. This way they could sell into two different income segments of the market.



First of all let me state emphatically that I don't want this merger to happen.  I understand that there is a difference in how HGVC Operates and the Diamond Collections work, but without getting into the fine details and definitions the following could happen. In the scenario that I developed above HGVC owners would continue to have their Home Week Rights to reserve the unit they own during the 9-12 month season which is all that ownership means in HGVC system, the rest of the benefits are Club benefits which can be changed. After the 9-12 month window is over HGVC owners could join the HGVC Club/Collection (a points conversion between HGVC and DRI would need to be developed) which has all the weeks in the entire HGVC inventory that have NOT been reserved during the Home Week 9-12 month period.  After that I gave 2 options one in which all the DRI and HGVC inventory would immediately be open to all DRI and HGVC owners or an interim step which would provide HGVC owners their own exclusive Club/Collection Season before opening it up to all DRI owners as well.


----------



## dayooper

Question on this issue. Why would Apollo put this information out there? Is it to drive stock prices up or down? Drive sales down to lower the stock? Or was this unintentionally leaked out? Maybe some more learned on the subject can help me out on this.


----------



## dougp26364

dayooper said:


> Question on this issue. Why would Apollo put this information out there? Is it to drive stock prices up or down? Drive sales down to lower the stock? Or was this unintentionally leaked out? Maybe some more learned on the subject can help me out on this.



The most likely source is the sales floor. 
Hilton sales could tell prospects about access to Lake Tahoe, beach front in Maui, Sedona et...... diamond would be selling the quality upgrade, especially Elara in Vegas 

I wouldn’t read to much into this just yet.


----------



## JIMinNC

dayooper said:


> Question on this issue. Why would Apollo put this information out there? Is it to drive stock prices up or down? Drive sales down to lower the stock? Or was this unintentionally leaked out? Maybe some more learned on the subject can help me out on this.


One reason to leak it is to force management's hand. When HGV stock rises from $26 to $32 on the rumor, if the offer is spurned, it will fall right back. Then management has to explain to a lot of big shareholders why they think they can create more shareholder value than selling to Apollo has already proven it can.


----------



## JIMinNC

dougp26364 said:


> The most likely source is the sales floor.
> Hilton sales could tell prospects about access to Lake Tahoe, beach front in Maui, Sedona et...... diamond would be selling the quality upgrade, especially Elara in Vegas
> 
> I wouldn’t read to much into this just yet.



The sales floor would have NO knowledge of anything like this. These kinds of discussions will be restricted to the top handful of execs at Apollo and HGV. Any leaks are purely designed to put market pressure on the other side to deal. The markets react to credible rumors and management must react to stock prices. Front Four Capital used similar leaks and pressure to force ILG to sell to Marriott Vacations Worldwide.


----------



## dougp26364

JIMinNC said:


> The sales floor would have NO knowledge of anything like this. These kinds of discussions will be restricted to the top handful of execs at Apollo and HGV. Any leaks are purely designed to put pressure on the other side to deal. The markets react to credible rumors and management must react to stop prices. Front Four Capital used similar leaks and pressure to force ILG to sell to Marriott Vacations Worldwide.



And yet that’s where most rumors start. 

They’d have no knowledge that Disney was coming to Branson MO but that didn’t stop timeshare salesmen from telling prospects they were. 

No knowledge? No problem! Just make it up and run with it. 

Then watch ‘em panic on TUG and see how long the thread will run. 

FWIW there’s no mention of this on the DRI threads. Thus I’m a big doubter at this time


----------



## Panina

This has made me think what if?  What if can happen at any time even if it doesn’t this time.  My mandatory resort 8400 pt is a guaranteed week that I can easily rent but my intent was to use it at other hgvc resorts.  I never would use it myself.  

After much thought the last few days I am going back to my original thought process, only own where and when  I would be very happy to go.  

So not only will I sell my hgvc that I have only for point use, I will also gift the weeks I have that are not hgvc that even though they are the best trader, I would never go to them the time I own them.  For others it will be weeks they will use gladly.

I have been struggling and procrastinating letting go of my excess as they were the best traders but this whole Hgvc scenario has made me clear of what I want to do... only own where I would be happy to go.


----------



## JIMinNC

dougp26364 said:


> And yet that’s where most rumors start.
> 
> They’d have no knowledge that Disney was coming to Branson MO but that didn’t stop timeshare salesmen from telling prospects they were.
> 
> No knowledge? No problem! Just make it up and run with it.
> 
> Then watch ‘em panic on TUG and see how long the thread will run.
> 
> FWIW there’s no mention of this on the DRI threads. Thus I’m a big doubter at this time



Most rumors on TUG start from Sales, but not market-moving rumors.

The specifics that were contained in the NY Post rumor were specific enough that they appear to be geared towards the market - rumored purchase price, offer price, deal structures, etc. Nothing like that would come from a sales floor.

The fake rumors that would get spread on TUG from sales would never move market prices on a stock by 23%


----------



## brp

Panina said:


> I have been struggling and procrastinating letting go of my excess as they were the best traders but this whole Hgvc scenario has made me clear of what I want to do... only own where I would be happy to go.



You certainly have to do what you have to do. But, if just based on this recent "announcement," this seems like it may be a strong reaction to something that is barely a rumor at this point.

We own W. 57th (and use it there). Our Vegas points are for use elsewhere (like Big Island). So, it would certainly impact the Flamingo point use, but nowhere near ready to act on this.

Cheers.


----------



## Panina

brp said:


> You certainly have to do what you have to do. But, if just based on this recent "announcement," this seems like it may be a strong reaction to something that is barely a rumor at this point.
> 
> We own W. 57th (and use it there). Our Vegas points are for use elsewhere (like Big Island). So, it would certainly impact the Flamingo point use, but nowhere near ready to act on this.
> 
> Cheers.


It really isn’t a strong reaction.  With my posts throughout the years I always leaned toward own when and where I wouldn’t mind going where there is higher demand plus low inventory.  

I strayed from my core belief, with insight from other tuggers and just going back to my roots of what I truly believe.  I actually don’t think this deal will happen but it did make me think and nudge me to clean up my timeshare portfolio.  My hgvc will be a flip, sell it and get another affiliate instead.


----------



## CalGalTraveler

Not enough here to make a change. Remember, RCI/II remains an option for Diamond members and I don't see that option going away for HGVC if they change the club rules. You can always trade back into HGVC via RCI. Not going to worry about it. We only have one trader that we recouped our capital, and MF is low. It is nice so we could stay there if that's our only option. But a good reminder to stay on top of our portfolio and manage our exposure until the dust settles.


----------



## escanoe

dayooper said:


> Question on this issue. Why would Apollo put this information out there?



It may not be 100% safe to assume Apollo leaked it and almost certainly wan’t the only party talking on background. I know a fair amount about reporters and media relations from my day work, but less about commercial timeshare investing. @JIMinNC has a good explanation why it might be in Apollo’s interest to have leaked. However, the part in the story that “Blackstone Group could also be a suitor” was probably not in Apollo’s interest.

My bet is individuals from all the parties involved have sources speaking on background. A good reporter picks up a small piece of information from one source and plays everyone off each other. HGVC could have also been the original leaker hoping to drum up competing offers.

The more important journalistic question in my mind is why some other, legitimate and more traditional financial publications have not been able to put a story together on this. Maybe there is limited interest from anyone except us.


----------



## CalGalTraveler

I recall that there was a rumor when Vistana was for sale that Diamond was interested and was reportedly having talks with HGVC. I was relieved when I found out Vistana was acquired by MVC. The HGVC rumor died quickly after that. Perhaps that was a ploy to get Vistana to lower their price?


----------



## JIMinNC

escanoe said:


> The more important journalistic question in my mind is why some other, legitimate and more traditional financial publications have not been able to put a story together on this. Maybe there is limited interest from anyone except us.



I’m not 100% sure how often more traditional financial media like the Wall Street Journal and Bloomberg report on merger speculation, or what level of corroboration they need to report something like this. I perceive the NY Post to be a little more of a tabloid, so my impression is they may have a somewhat lower bar on what level of rumor they are willing to run with.


----------



## nuwermj

CalGalTraveler said:


> Not enough here to make a change. Remember, RCI/II remains an option for Diamond members and I don't see that option going away for HGVC if they change the club rules. You can always trade back into HGVC via RCI. Not going to worry about it. We only have one trader that we recouped our capital, and MF is low. It is nice so we could stay there if that's our only option. But a good reminder to stay on top of our portfolio and manage our exposure until the dust settles.



No RCI option for Club Diamond members. Diamond are real SOBs when it comes to exchange options. They will not work with anyone other then II. I cannot even make a reservation with my points and deposit that confirmed reservation.


----------



## CalGalTraveler

That's okay. II is even better. Trades for Marriotts, Hyatts, and Westins.

(We have to bear in mind that these are first world problems.)


----------



## GT75

escanoe said:


> The more important journalistic question in my mind is why some other, legitimate and more traditional financial publications have not been able to put a story together on this.



I actually am wondering the same thing.   I think that now we are the only ones keeping this story alive.


----------



## terces

We had an "owners update" at MarBrisa Carlsbad today.  The salesperson was less than fully knowledgable and/or dishonest on a few topics, but when I asked her about the newspaper articles about a buyer for HGVC, she was very emphatic that it would not happen, "no way would Hilton let someone buy their resort from them after developing all of the special hotels from Conrad to Waldorf etc"


----------



## T_R_Oglodyte

nuwermj said:


> No RCI option for Club Diamond members. Diamond are real SOBs when it comes to exchange options. They will not work with anyone other then II. I cannot even make a reservation with my points and deposit that confirmed reservation.


Yep.  That's part of the rules of the Club.

When you join your membership to the Club, you explicitly assign to the Club the reservation rights associated with your membership. It's described in the paperwork you get when you join the Club. In exchange you get the right to use your points to make Club reservations.  That's good in that it allows you to use your points to reserve Club units worldwide, without going through an exchange company and without paying an exchange fee.  It's bad in that the only way to use your points outside the Club is via the Club, which only works with II.

**********

If you want to be able to use your points to make reservations without being subject to the rules of the Club, then you need to pull your ownership out of the Club.  You can do that anytime.  You will also no longer pay the annual club fee.  

Your usage rights will then be determined by the underlying usage rights in your ownership. So you might find that even outside the Club, there are limitations that are inherent in your underlying ownership.  For example, if we were to pull our deeded Poipu week out of the Club, we could use the week in RCI.  But the resort timeshare arrangement with RCI is a bulk banking program, in which owners do not get to select the week to deposit with RCI. Rather the resort banks weeks directly with RCI, and when a member makes an RCI exchange, on the resort bulk banked weeks is assigned to the account.  Note that this is not a Diamond restriction - this was put in place at the time that Poipu was first developed as a timeshare property.


----------



## JIMinNC

terces said:


> We had an "owners update" at MarBrisa Carlsbad today.  The salesperson was less than fully knowledgable and/or dishonest on a few topics, but when I asked her about the newspaper articles about a buyer for HGVC, she was very emphatic that it would not happen, "no way would Hilton let someone buy their resort from them after developing all of the special hotels from Conrad to Waldorf etc"



BS from sales rep. No one would be buying “their resort from them.” Hilton hotels spun off HGV a few years ago, so they don’t have anything to sell (or not sell). HGV is its own company now. No longer part of Hilton.


----------



## escanoe

GT75 said:


> Neither do I.



Everyone in this thread is spending time worrying about all the minor things.

The main thing to me is I don’t want us to have to merge our TUG HGVC group with all those whiny people over in the DRI group.... ALL THEY DO is complain about their timeshare company. I am also a big fan of @GT75 and don’t want him to have to scrap it out to keep his moderator status. 

Ok. That is mostly in jest (all except for my praise of @GT75), but I couldn’t hold it back. I do think we are getting WAAAAAY ahead of ourselves here, but thinking it out gives us better perspective in relation to what MIGHT happen.


----------



## T_R_Oglodyte

terces said:


> We had an "owners update" at MarBrisa Carlsbad today.  The salesperson was less than fully knowledgable and/or dishonest on a few topics, but when I asked her about the newspaper articles about a buyer for HGVC, she was very emphatic that it would not happen, "no way would Hilton let someone buy their resort from them after developing all of the special hotels from Conrad to Waldorf etc"


There have been many occasions over the years in which Diamond (and other) timeshare sales people have been emphatic about things that would (or would not) happen:

1. By the time of our visit next year, Kaanapali and Poipu would be branded Hilton resorts; the papers are done and are just waiting to be signed.
2. By the time of our next visit, there will be a Diamond Resort in Hilo.
3. By the time of our next visit, construction will be underway on the new Diamond Resort in Kona.  
4. The Hawaii Collection was created to hold Hawaii resorts separate from mainland resorts.  It would never include more than mainland resorts so that Hawaii owners could be sure that mainland owners would not be able to reserve in Hawaii before the 10-month window. 
5. By the time of our next visit, the Blue Green resorts will be part of Diamond.
6. Hawaii just passed a law that makes it illegal for any owner to list a property with AirBnB or VRBO, regardless of whether the owner has a vacation rental permit for the property.


----------



## JIMinNC

GT75 said:


> I actually am wondering the same thing.   I think that now we are the only ones keeping this story alive.



I think if there was no truth at all to the report HGV would have issued a denial by now given the market reaction and the fact it’s driving up other timeshare stocks too. Not saying anything will happen, but no denial makes me think the proposal from Apollo may have been real. If that is the case, I wouldn’t expect official comment until either a deal is announced or HGV makes it official they are either not for sale or are pursuing another deal. These things can sometimes take weeks or months to play out.


----------



## pianodinosaur

escanoe said:


> Everyone in this thread is spending time worrying about all the minor things.
> 
> The big thing to me is I don’t want us to have to merge our TUG HGVC group with all those whiny people over in the DRI group.... ALL THEY DO is complain about their timeshare company. I am also a big fan of @GT75 and don’t want him to have to scrap it out to keep his moderator status.
> 
> Ok. That is mostly in jest (all except for my praise of @GT75), but I couldn’t hold it back. I do think we are getting WAAAAAY ahead of ourselves here, but thinking it out gives us better perspective in relation to what CAN happen.



I agree that we are getting Waaay Ahead of ourselves and we don’t need to be jumping to conclusions.  However, I have enjoyed learning from our fellow Tuggers who own at DRI.


----------



## hurnik

What's interesting is that on the FB HGVC *Owners* group there's at least one lady who claims DRI never increased MF that much and that it's basically a good thing if this happens.  I gave up, but without any actual hard-numbers (I guess I'd have to see if there's a DRI group on TUG and see if they have their MF listing like we do here in this forum).

The only "hardcore" evidence I have is that the quality of DRI resorts (excluding the intrawest ones which apparently are Embarc and "separate" from DRI sorta) are that they are NOT up to the quality of HGVC (that Kaanapali one does not look appealing at all).


----------



## SmithOp

DRI quality is not that bad IMO, maybe 3.5 stars to HGVC 4 stars.  I’ve stayed at Kaanapali and several in Sedona and was very comfortable.  

I would welcome the additional resorts to HGVC portfolio, its the reason I keep an Interval membership to pick up DRI locations for cash getaways or ACs.


Sent from my iPad using Tapatalk Pro


----------



## JIMinNC

hurnik said:


> What's interesting is that on the FB HGVC *Owners* group there's at least one lady who claims DRI never increased MF that much and that it's basically a good thing if this happens.  I gave up, but without any actual hard-numbers (I guess I'd have to see if there's a DRI group on TUG and see if they have their MF listing like we do here in this forum).
> 
> The only "hardcore" evidence I have is that the quality of DRI resorts (excluding the intrawest ones which apparently are Embarc and "separate" from DRI sorta) are that they are NOT up to the quality of HGVC (that Kaanapali one does not look appealing at all).



We used to own DRI, at Kaanapali, but sold in 2014. Kaanapali Beach Club would be a notch or two below the Marriott and Westin resorts on Maui (which are both comparable to HGVC) and the location is so-so on a mediocre beach. It is really in Honokowai, not Kaanapali. The only other DRI resort I recall is Grand Beach in Orlando when our kids were young, and it was brand new at the time, so was nice. We also stayed at the DRI Ridge on Sedona in May 2018 on an RCI trade and while "comfortable" was clearly a couple notches below any HGVC or Marriott we've stayed at. Cheaper furnishings, inadequate electrical outlets, and very basic amenities. It felt more like a residential condo than a resort. 

Once DRI took over Kaanapali Beach Club, our maintenance fees sometimes jumped 8-9% a year. When we sold in 2014, our annual maintenance fee for a 2BR was $2041, but at the same time Marriott's Maui Ocean Club was $1972 for a better location and much better resort.


----------



## terces

I just "leafed through" the DRI forum.  There are a lot of DRI owners that are not very happy.  I really hope HGVC can pull away from this bunch.


----------



## dougp26364

I’ve had a little time to digest the possibility of this “merger” and it seems I’m on the other end of the Marriott/SVN merger (we’re Marriott owners). The chairman of Apollo appears to be the former chairman of HGVC. It was S. Cloobeck when he ran DRI that jacked fee’s into the stratosphere and made the product overpriced (IMHO) for the product. So we left.

Like the SVN situation, those owners might have the option to pick additional locations thru MVC, just like HGVC owners might be able to pick up DRI locations. And similarly SVN owners seem to view Marriott as not equal quality or want the extra location options. And like some of the SVN owners I’m not excited about adding the DRI locations and I’m concerned about ramifications to what we own and enjoy.

For us, we use our HGVC ownership to stay at Elara nearly exclusively at this time (things change of course). Unless DRI jacks the rates we likely won’t change things. We REALLY enjoy our stays at Elara. We dropped our DRI ownership at the Silver Elite level a few years back so, I don’t anticipate joint DRI’s Club product. Thus probably not a great deal of change for us.

IF the merger or buyout takes place (and that’s a big if at this point) it opens options for HGVC owners more than it will for DRI owners. Will they want those options? That’s a good question. For most TUGGERS I suspect not. For the average timeshare owner it may be attractive, at least on the surface.

So we’ll keep things as they are, listen to their sales pitch if the merger happens and take their money. We’ll hope the MF’s don’t sky rocket but, unlike when DRI took over Sunterra, there’s not a lot of work that needs to be done (some Sunterra resorts were getting way behind on maintenance issues). 

So oddly enough, I now see better how SVN owners view the merger and integration of their ownerships into MVC. With HGVC, the shoes now on the other foot for me.


----------



## CalGalTraveler

dougp26364 said:


> I’ve had a little time to digest the possibility of this “merger” and it seems I’m on the other end of the Marriott/SVN merger (we’re Marriott owners). The chairman of Apollo appears to be the former chairman of HGVC. It was S. Cloobeck when he ran DRI that jacked fee’s into the stratosphere and made the product overpriced (IMHO) for the product. So we left.



Interesting info. What is the name of the executive that was the former chairman of HGVC?  The Apollo chairman listed on their site is not the guy you are referring to.  

Here is the current CEO of Diamond. Looks like he was with Starwood at one point in his career.

_Mike Flaskey has more than 25 years of executive leadership experience in public and privately-held companies, with a key focus on growth-oriented companies within the real estate and vacation ownership industry. Throughout his tenure at Diamond Resorts, the company has achieved unprecedented growth both organically and through strategic acquisition integration. Mike has shifted the traditional timeshare marketing and sales model to an innovative, hospitality-infused process that includes a high-touch upstream engagement stance, thus providing owners and guests with a service-first approach. Diamond’s leading experiential model is revolutionizing the vacation ownership industry as a whole.

Mike has overseen, developed and delivered strategic partnerships and relationships with numerous prominent sporting and entertainment professionals that resulted in the creation and growth of our innovative Events of a Lifetime® franchise, the Diamond concert series and, most notably, the Diamond Resorts Tournament of Champions™, a nationally televised LPGA Tournament of Champions/celebrity golf tournament that will be broadcast on NBC and Golf Channel. The tournament, previously known as the Diamond Resorts Invitational, has a strong philanthropic arm and – as of January 2018 – has raised over 3.1 million of charitable dollars for Florida Hospital for Children.

Prior to Diamond Resorts, Mike held senior executive roles with Starwood Vacation Ownership and Fairfield Resorts (now Wyndham Vacation Ownership). He has a track record of recruiting and developing top talent and is a culture-conscious, performance-driven executive with a history of excellent results while always placing guest satisfaction first.

Mike holds a Bachelor of Science degree in Physical Education from Limestone College.
_​I would be interested in hearing from Diamond owners if they have seen an improvement since Cloobeck left?


----------



## dougp26364

CalGalTraveler said:


> Interesting info. What is the name of the executive that was the former chairman of HGVC?  The Apollo chairman listed on their site is not the guy you are referring to.
> 
> Here is the current CEO of Diamond. Looks like he was with Starwood at one point in his career.
> 
> _Mike Flaskey has more than 25 years of executive leadership experience in public and privately-held companies, with a key focus on growth-oriented companies within the real estate and vacation ownership industry. Throughout his tenure at Diamond Resorts, the company has achieved unprecedented growth both organically and through strategic acquisition integration. Mike has shifted the traditional timeshare marketing and sales model to an innovative, hospitality-infused process that includes a high-touch upstream engagement stance, thus providing owners and guests with a service-first approach. Diamond’s leading experiential model is revolutionizing the vacation ownership industry as a whole.
> 
> Mike has overseen, developed and delivered strategic partnerships and relationships with numerous prominent sporting and entertainment professionals that resulted in the creation and growth of our innovative Events of a Lifetime® franchise, the Diamond concert series and, most notably, the Diamond Resorts Tournament of Champions™, a nationally televised LPGA Tournament of Champions/celebrity golf tournament that will be broadcast on NBC and Golf Channel. The tournament, previously known as the Diamond Resorts Invitational, has a strong philanthropic arm and – as of January 2018 – has raised over 3.1 million of charitable dollars for Florida Hospital for Children.
> 
> Prior to Diamond Resorts, Mike held senior executive roles with Starwood Vacation Ownership and Fairfield Resorts (now Wyndham Vacation Ownership). He has a track record of recruiting and developing top talent and is a culture-conscious, performance-driven executive with a history of excellent results while always placing guest satisfaction first.
> 
> Mike holds a Bachelor of Science degree in Physical Education from Limestone College.
> _​I would be interested in hearing from Diamond owners if they have seen an improvement since Cloobeck left?


I was reading from the article posted in the link in the original post on this thread. Wouldn’t be the first time I misread something


----------



## JIMinNC

CalGalTraveler said:


> - especially with a recession on the horizon.



You may be right after all. The huge escalation in trade war rhetoric today may have increased the odds the trade issue spills over into the domestic economy.


----------



## JIMinNC

dougp26364 said:


> I was reading from the article posted in the link in the original post on this thread. Wouldn’t be the first time I misread something



It’s the CFO of Diamond who used to be with HGVC. Not the CEO or Chairman. He’s the guy HGV fired for some sort of improper behavior.


----------



## brp

JIMinNC said:


> He’s the guy HGV fired for some sort of improper behavior.



Like maybe at some point he talked to a potential Direct Purchase customer and told the truth? I can see how that might be treated as improper behavior in this industry...

Cheers.


----------



## nuwermj

hurnik said:


> What's interesting is that on the FB HGVC *Owners* group there's at least one lady who claims DRI never increased MF that much and that it's basically a good thing if this happens.  I gave up, but without any actual hard-numbers (I guess I'd have to see if there's a DRI group on TUG and see if they have their MF listing like we do here in this forum).
> 
> The only "hardcore" evidence I have is that the quality of DRI resorts (excluding the intrawest ones which apparently are Embarc and "separate" from DRI sorta) are that they are NOT up to the quality of HGVC (that Kaanapali one does not look appealing at all).



Here is more data than you will probably want, from our own TUGGER @youppi 

Maintenance Fees since 2007
https://docs.google.com/spreadsheets/d/1jo0_ti3h8ZWy41VCCeaFLfpHqZKe38zADMPFQ9lDfg8/pubhtml#

A detailed history of the company
https://docs.google.com/spreadsheets/d/1WXE5rnFgWaPKJdByFs6kAUjkXWLhpwmq4pB8OuepK30/pubhtml#


----------



## nuwermj

JIMinNC said:


> We used to own DRI, at Kaanapali, but sold in 2014. Kaanapali Beach Club would be a notch or two below the Marriott and Westin resorts on Maui (which are both comparable to HGVC) and the location is so-so on a mediocre beach. It is really in Honokowai, not Kaanapali. The only other DRI resort I recall is Grand Beach in Orlando when our kids were young, and it was brand new at the time, so was nice. We also stayed at the DRI Ridge on Sedona in May 2018 on an RCI trade and while "comfortable" was clearly a couple notches below any HGVC or Marriott we've stayed at. Cheaper furnishings, inadequate electrical outlets, and very basic amenities. It felt more like a residential condo than a resort.



Diamond has about 100 managed resorts in Club Diamond. About 30 or 35 are in Europe. If you look in the II catalog only one of Diamond's resorts has the II Elite status. That is the Cabo Azul location. At lest half of the Marriott resorts have the II Elite Status. Diamond also owns the nine Embarc resorts and they are all II Elite locations. But Embarc is run separately from the Diamond Club.


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## CalGalTraveler

@nuwermj As a Diamond owner have you seen any improvements in customer treatment and fees since Cloosbeck left as CEO? It hard to discern complaints from owners when they were bringing properties up to standard that have been under-funded in MF and reserves, and the tactics for Cloosbeck, from the new regime.


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## nuwermj

CalGalTraveler said:


> I would be interested in hearing from Diamond owners if they have seen an improvement since Cloobeck left?



I would say "no". Cloobeck stepped down as CEO in 2014. David Palmer was President and CEO while the company was publicly traded, Cloobeck was Chairmen of the Board. Much of what we would call the DRI image today was created under Palmer. The new guy, Michael Flaskey, is a washed out minor league baseball player who worked his way up from a timeshare sales floor. He knows how to work the "old-boys" network and currently he is good at rallying the troops and pushing PR. But there is no way Flaskey survives in a merger or an IPO. He doesn't have the ability to create a successful business strategy. In 2016 Apollo appointed a President at Diamond who was the strategy guy. He retired last October and has not been replaced.


----------



## nuwermj

CalGalTraveler said:


> @nuwermj As a Diamond owner have you seen any improvements in customer treatment and fees since Cloosbeck left as CEO? It hard to discern complaints from owners when they were bringing properties up to standard that have been under-funded in MF and reserves, and the tactics for Cloosbeck, from the new regime.



The last two years there has been a concerted effort inside Diamond to hold the line on fee increases. Someone, Apollo or someone inside Diamond, finally realized that their fees were a competitive disadvantage. I actually heard the CEO state this. Nevertheless their fees are very high compared to the quality of the resorts. In my view this suggests inefficient management of the resorts.   

I did some fee comparisons for 2016 and 2017 and they were shared in this thread:
https://tugbbs.com/forums/index.php...-of-other-points-based-systems-to-dri.244394/


----------



## CalGalTraveler

Wow, $2700 for a week in a basic 2 bdrm of DRI quality? That's what we pay for OF on Maui at the Westin which is not a basic 2 bdrm. (And I think that is expensive except we can lock-off half to turn into 2 weeks ($1350/week OF HI) or rent half to cover MF so our stay is free.)

Even Embarc which are much nicer are much less MF.

This makes our Hilton MF a good value and is a tribute to how well HGVC is managed.

DRI management are idiots. How can DRI sell new VOIs when it is half the cost without the ownership capital and risk to stay at a hotel or AirBnB at this rate? It's no wonder their new customer acquisition % has nosedived and existing customers are upset. They squeezed all the juice out of the orange but never considered competition nor Apollo's goal to sell the company as an ongoing concern. Who'd want to buy that?

No wonder Apollo is desperate - they should start by firing the executives who got them into this mess.


----------



## youppi

@nuwermj Could they move to US Collections (non HI resorts) and HI Collections (HI resorts) the unsold inventory of HGVC resorts ?
@nuwermj Do you think that Wyndham will let DRI acquire HGVC without trying to overbid to acquire HGVC like Wyndham did (supposedly) when they acquired Shell Vacation many years ago ?


----------



## nuwermj

youppi said:


> @nuwermj Could they move to US Collections (non HI resorts) and HI Collections (HI resorts) the unsold inventory of HGVC resorts ?
> @nuwermj Do you think that Wyndham will let DRI acquire HGVC without trying to overbid to acquire HGVC like Wyndham did (supposedly) when they acquired Shell Vacation many years ago ?



Hi Luc, Yes I'm sure HGV unsold and recovered inventory could be deposited into the US or HI trust funds. And if Diamond is in control of the merged company they might do it that way. As you know, that is the model they used with other (much smaller) acquisitions. But I'm suggesting that (1) Diamond management may not be in charge of the merged company. Apollo will structure it in a way that maximized the market value of the new entity and I believe that means merging Diamond into HGV. And (2) if the new company maintains two timeshare units, HGVC and THE Club, as separate enterprises  they will make more money because these two units can market to different income segments, much like General Motors sells Chevrolet and Cadillac.

I don't know much about Wyndham's plans for the future and I don't really know whether they can fight Apollo if Apollo is willing to fight. I did see something about the agreement HGV has with Hilton Hotels earlier in this thread and it says if Wyndam acquired HGV, the right to use the Hilton name would be forfeited. I think that reduces the value of HGV to Wyndham. 

Thanks for joining the discussion.


----------



## dougp26364

CalGalTraveler said:


> Wow, $2700 for a week in a basic 2 bdrm of DRI quality? That's what we pay for OF on Maui at the Westin which is not a basic 2 bdrm. (And I think that is expensive except we can lock-off half to turn into 2 weeks ($1350/week OF HI) or rent half to cover MF so our stay is free.)
> 
> Even Embarc which are much nicer are much less MF.
> 
> This makes our Hilton MF a good value and is a tribute to how well HGVC is managed.
> 
> DRI management are idiots. How can DRI sell new VOIs when it is half the cost without the ownership capital and risk to stay at a hotel or AirBnB at this rate? It's no wonder their new customer acquisition % has nosedived and existing customers are upset. They squeezed all the juice out of the orange but never considered competition nor Apollo's goal to sell the company as an ongoing concern. Who'd want to buy that?
> 
> No wonder Apollo is desperate - they should start by firing the executives who got them into this mess.



And this is why we dumped our 2 Polo Towers weeks and kept our Marriott and Hilton ownerships. Dollar for dollar, DRI was as expensive and, in the case of Hilton, more expensive, with far less quality. It’s also why I’m a little nervous about the posted article. We enjoy our HGVC ownership but not at the price we were DRI for those Polo Towers weeks.


----------



## Tamaradarann

CalGalTraveler said:


> Wow, $2700 for a week in a basic 2 bdrm of DRI quality? That's what we pay for OF on Maui at the Westin which is not a basic 2 bdrm. (And I think that is expensive except we can lock-off half to turn into 2 weeks ($1350/week OF HI) or rent half to cover MF so our stay is free.)
> 
> Even Embarc which are much nicer are much less MF.
> 
> This makes our Hilton MF a good value and is a tribute to how well HGVC is managed.
> 
> DRI management are idiots. How can DRI sell new VOIs when it is half the cost without the ownership capital and risk to stay at a hotel or AirBnB at this rate? It's no wonder their new customer acquisition % has nosedived and existing customers are upset. They squeezed all the juice out of the orange but never considered competition nor Apollo's goal to sell the company as an ongoing concern. Who'd want to buy that?
> 
> No wonder Apollo is desperate - they should start by firing the executives who got them into this mess.



We went to a presentation at the Kaanapali Beach Resort in May.  We told the timeshare sales people including the supervisors and managers that they made us see that DRI's maintenance was high for the number of points that we would need for a week during prime seasons in Hawaii versus HGVC.  We told them that we stay in Honolulu using our HGVC points with a maintenance cost of about $60/night.  The maintenance for the their minimum package would have cost about $200/night.  Furthermore, in addition to the high maintenance that owner pay the Kaanapali Beach Resort charges exchangers a $25/night resort fee.  That is the first time in over 1000 timeshare nights that I ever had to pay such a high nightly resort fee.(My HGVC stays using HGVC points of course do not require a resort fee.)


----------



## T_R_Oglodyte

The mode that Diamond has always taken with acquisitions is to create a separate "Collection" (i.e., trust ownership) for the acquired properties.  Then they start selling Club memberships to the owners in the new trust. 

Actually, they pretty much have to do it with a new collection, since the acquired properties have existing timeshare programs, and those almost certainly will not synch with what is in the other collections.  By setting up a new Collection, the existing timeshare program can continue exactly as is.


----------



## youppi

Tamaradarann said:


> We went to a presentation at the Kaanapali Beach Resort in May.  We told the timeshare sales people including the supervisors and managers that they made us see that DRI's maintenance was high for the number of points that we would need for a week during prime seasons in Hawaii versus HGVC.  We told them that we stay in Honolulu using our HGVC points with a maintenance cost of about $60/night.  The maintenance for the their minimum package would have cost about $200/night.  Furthermore, in addition to the high maintenance that owner pay the Kaanapali Beach Resort charges exchangers a $25/night resort fee.  That is the first time in over 1000 timeshare nights that I ever had to pay such a high nightly resort fee.(My HGVC stays using HGVC points of course do not require a resort fee.)



It's true that DRI MF are too high but it's not everybody in the HGVC system that can go to Hawaii for $60 per night. Readers must not go on ebay and buy any HGVC week by thinking they can go to Hawaii for $60 per night. They may cry.

As example using this https://tugbbs.com/forums/index.php...intenance-fee-list.280402/page-2#post-2211802, a 3 bdrm Gold Season at Seaworld (5,800 pts for $1,581.24) to book a 1 bdrm at Lagoon Tower in Honolulu (4,800 pts and some 1 bdrm in other resorts in Hawaii cost more than that) cost $1,581.24 / 5,800 * 4,800 = $1,308,61 or $186.94 per night (closer to $200 than $60).
If we use 2 Gold Studio Plus at West 57th in NY, https://tugbbs.com/forums/index.php...intenance-fee-list.280402/page-2#post-2211907,  (2x3,750 pts for over 2x$1,500 in MF to have enough points) then the cost per night for the same 1 bdrm at Toon Lagoon (4,800 pts) will be over $275 per night.

FYI, at HGVC Lagoon Tower, is $40 per day for RCI exchanger.


----------



## youppi

dougp26364 said:


> And this is why we dumped our 2 Polo Towers weeks and kept our Marriott and Hilton ownerships. Dollar for dollar, DRI was as expensive and, in the case of Hilton, more expensive, with far less quality. It’s also why I’m a little nervous about the posted article. We enjoy our HGVC ownership but not at the price we were DRI for those Polo Towers weeks.


but Polo Tower got a better score on TUG (I never went to any of them so I can't say if the review reflect the quality or not)


----------



## youppi

nuwermj said:


> Hi Luc, Yes I'm sure HGV unsold and recovered inventory could be deposited into the US or HI trust funds. And if Diamond is in control of the merged company they might do it that way. As you know, that is the model they used with other (much smaller) acquisitions. But I'm suggesting that (1) Diamond management may not be in charge of the merged company. Apollo will structure it in a way that maximized the market value of the new entity and I believe that means merging Diamond into HGV. And (2) if the new company maintains two timeshare units, HGVC and THE Club, as separate enterprises  they will make more money because these two units can market to different income segments, much like General Motors sells Chevrolet and Cadillac.
> 
> I don't know much about Wyndham's plans for the future and I don't really know whether they can fight Apollo if Apollo is willing to fight. I did see something about the agreement HGV has with Hilton Hotels earlier in this thread and it says if Wyndam acquired HGV, the right to use the Hilton name would be forfeited. I think that reduces the value of HGV to Wyndham.
> 
> Thanks for joining the discussion.


They have already Embarc separated from THE Club, so, they could merge HGVC with Embarc to avoid having Chevrolet, Buick and Cadillac.


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## dougp26364

youppi said:


> but Polo Tower got a better score on TUG (I never went to any of them so I can't say if the review reflect the quality or not)
> View attachment 13587
> View attachment 13588
> View attachment 13589



Just an example of why I take review grades with a grain of salt. The quality of the review is slanted by the experience of the reviewer. If the Villa at Polo Towers is the best place they’ve stayed, they’ll rate it a 10. 

We use own Grand Chateau, we own with Hilton, And have stayed at Elara and we use to own at the Suites at Polo Towers and The Villas at Polo Towers. I have pictures album from all of them. Polo Towers is at the bottom of the list IMHO. Still a very nice resort but no where near equal to Hilton or Marriott.


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## CalGalTraveler

youppi said:


> They have already Embarc separated from THE Club, so, they could merge HGVC with Embarc to avoid having Chevrolet, Buick and Cadillac.



LoL that would be full circle because Embarc resorts were affilliates in the HGVC mini-system similar to Fiesta Americana before Intrawest was acquired in 2016 by Diamond. We stayed at Embarc Whistler using HGVC points. Nice resort.


----------



## terces

I did a little back of the napkin math on MF's.  At the Boulevard, the MF's for a 2 bdrm platinum are $850 per year for 1 week.  That amount x 52 weeks = $44,200.  Most of that is legitimate maintenance costs with a layer of profit for HGVC or the "manager".  Maybe they get 15% in management fees = $6,663 x 714 units = $4.7Million.  Coincidentally, these units sell at retail for about $44,000.  And they get to sell all 52 weeks for a value of total value of $2,288,000 for each unit x 714 units = 1,633,632,000. That is over 1.5 Billion dollars that the boulevard may have sold at through individual week sales.  HGVC looks after foreclosures and rofr, so even though the resort is sold out they have a continuous supply of product to rake in those huge sales revenues.   Why people are attracted to the Boulevard is because of the low MF's.  HGVC or some idiot like DRI could increase the MF's through additional management costs and earn a few million more.  But if they crank the management fees, people will also stop buying there.  Meanwhile they would kill off tens or hundreds of millions of dollars worth of sales because of their short sighted greed. It sounds like that is what they have been up to.


----------



## Tamaradarann

youppi said:


> It's true that DRI MF are too high but it's not everybody in the HGVC system that can go to Hawaii for $60 per night. Readers must not go on ebay and buy any HGVC week by thinking they can go to Hawaii for $60 per night. They may cry.
> 
> As example using this https://tugbbs.com/forums/index.php...intenance-fee-list.280402/page-2#post-2211802, a 3 bdrm Gold Season at Seaworld (5,800 pts for $1,581.24) to book a 1 bdrm at Lagoon Tower in Honolulu (4,800 pts and some 1 bdrm in other resorts in Hawaii cost more than that) cost $1,581.24 / 5,800 * 4,800 = $1,308,61 or $186.94 per night (closer to $200 than $60).
> If we use 2 Gold Studio Plus at West 57th in NY, https://tugbbs.com/forums/index.php...intenance-fee-list.280402/page-2#post-2211907,  (2x3,750 pts for over 2x$1,500 in MF to have enough points) then the cost per night for the same 1 bdrm at Toon Lagoon (4,800 pts) will be over $275 per night.
> 
> FYI, at HGVC Lagoon Tower, is $40 per day for RCI exchanger.



The examples you are giving are for Gold weeks which we all know are not favorable when it comes to cost/point.  All of the units that I own are Platinum even though some are higher maintenance than I would like.  I have 34,600 points and my maintenance is about $5800.  That is about $0.17/point.  We stay in Studios which are 2200 points during Platinum Season.  You can do the math.  

Your comment about RCI Exchangers costing $40 per day must be for the exchange fee only.  What about the maintenance cost that they pay for the unit they are exchanging?


----------



## dayooper

Tamaradarann said:


> The examples you are giving are for Gold weeks which we all know are not favorable when it comes to cost/point.  All of the units that I own are Platinum even though some are higher maintenance than I would like.  I have 34,600 points and my maintenance is about $5800.  That is about $0.17/point.  We stay in Studios which are 2200 points during Platinum Season.  You can do the math.
> 
> Your comment about RCI Exchangers costing $40 per day must be for the exchange fee only.  What about the maintenance cost that they pay for the unit they are exchanging?



This. Platinum is preferred to gold in every case. I have a middle of the road MF ratio of $1049 and for a 2 bedroom condo, I spent under $150 a night. I could easily get a better rate if I stayed in smaller units. In most cases, a platinum week in a 1 bedroom is 4800 points ($105 per night). If I stay shorter stays M-Th (each weekday night is 480 points) I could extend my vacation time to 14 nights, with a $74 a night rate. If I stayed in studios (2200 points per week). I can extend my vacations to 21 nights with my nightly rate at $50 per night. The biggest extreme example would be staying in studios M-Th. Each night would be 220 points, giving me 31 nights. That would be an amazing $31 a night. 

Now, would I do this? Not at this point in my life. I have a family of 5 and we need all the room we can get. I really enjoyed my week on the 24th floor at Ocean 22 in Myrtle Beach for $150 a night. Some day, when I’m no longer working, I just might.


----------



## DanZale2000

T_R_Oglodyte said:


> The mode that Diamond has always taken with acquisitions is to create a separate "Collection" (i.e., trust ownership) for the acquired properties.  Then they start selling Club memberships to the owners in the new trust.
> 
> Actually, they pretty much have to do it with a new collection, since the acquired properties have existing timeshare programs, and those almost certainly will not synch with what is in the other collections.  By setting up a new Collection, the existing timeshare program can continue exactly as is.



I'm not sure this is correct, or maybe I'm misunderstanding the comment.

After Diamond and Suntarra merged, the new company made the following acquisitions.

2010 ILX (10 resorts)
2011 Tempus Resorts (Mystic Dunes)
2012 Pacific Monarch (9 resorts)
2013 Island One (8 resorts)
2015 Gold Key (6 resorts)
2016 Intrawest/Embarc (9 resorts)
2018 Amber Resorts (Sunrise Ridge)

Four of these were deeded timeshares (2011, 13, 15, 18). ILX, Monarch and Embarc  had some kind of pooled deed systems with points.

In the case of the deed only systems, when an owner converted to diamond the deed was deposited into the US Collection. 

In the case of ILX and Monarch, diamond stopped selling those points. When owners converted or left the system, the deeds were added to existing collections. Mostly the US collection but a few Monarch resorts went to the Hawaii collection.

Diamond continues to sell points in Embarc. As others have said, that system is run separately from The Club. 

But in none of these cases was there a new collection created. But maybe I'm misunderstanding something.


----------



## Tamaradarann

dayooper said:


> This. Platinum is preferred to gold in every case. I have a middle of the road MF ratio of $1049 and for a 2 bedroom condo, I spent under $150 a night. I could easily get a better rate if I stayed in smaller units. In most cases, a platinum week in a 1 bedroom is 4800 points ($105 per night). If I stay shorter stays M-Th (each weekday night is 480 points) I could extend my vacation time to 14 nights, with a $74 a night rate. If I stayed in studios (2200 points per week). I can extend my vacations to 21 nights with my nightly rate at $50 per night. The biggest extreme example would be staying in studios M-Th. Each night would be 220 points, giving me 31 nights. That would be an amazing $31 a night.
> 
> Now, would I do this? Not at this point in my life. I have a family of 5 and we need all the room we can get. I really enjoyed my week on the 24th floor at Ocean 22 in Myrtle Beach for $150 a night. Some day, when I’m no longer working, I just might.



You are totally correct that with 5 people traveling you can't stay in a Studio.  You need a 2 BR at minimum.  However, the comparison I was making was between my 2 person party staying in Hawaii at DRI or HGVC timeshares.  My argument for NOT buying at the DRI presentation was that DRI's maintenance cost was so high that it would cost about $200/night for us to stay at a DRI resort compared to $60/night at the HGVC resort.  Perhaps you could do the same comparison for 2 BR units but that was not what I was interested in so I didn't do that comparison.  My guess would be that the 2 BR comparison would be closer in cost since I view the HGVC studios as a real cost/night bargain and the 1 BR and 2 BR units not so much.


----------



## brp

Tamaradarann said:


> We told them that we stay in Honolulu using our HGVC points with a maintenance cost of about $60/night.



I'm curious on how to make the maths work on this. Even with a MF/point ratio of $0.15, this would mean 400 points/night. We're hard-pressed to find that even at Bay Club, and I understand that the points requirements on Oahu are higher than this. Would love to see how to work this 

Cheers.


----------



## dayooper

Tamaradarann said:


> You are totally correct that with 5 people traveling you can't stay in a Studio.  You need a 2 BR at minimum.  However, the comparison I was making was between my 2 person party staying in Hawaii at DRI or HGVC timeshares.  My argument for NOT buying at the DRI presentation was that DRI's maintenance cost was so high that it would cost about $200/night for us to stay at a DRI resort compared to $60/night at the HGVC resort.  Perhaps you could do the same comparison for 2 BR units but that was not what I was interested in so I didn't do that comparison.  My guess would be that the 2 BR comparison would be closer in cost since I view the HGVC studios as a real cost/night bargain and the 1 BR and 2 BR units not so much.


Keeping stats to M/Th, it does allow you to extend your points. 

Standard 2 bedrooms in platinum season during weekdays are 700 points a day. That comes out to 10 days at $105 per night. Since you can only book club points in 3 day increments or more, one of those stays might have a weekend day and that would increase the price. 

Gold season, 2 bedrooms are 500 during weekdays. That gets you 14 nights at $75 Stay.


----------



## youppi

Tamaradarann said:


> The examples you are giving are for Gold weeks which we all know are not favorable when it comes to cost/point.  All of the units that I own are Platinum even though some are higher maintenance than I would like.  I have 34,600 points and my maintenance is about $5800.  That is about $0.17/point.  We stay in Studios which are 2200 points during Platinum Season.  You can do the math.
> 
> Your comment about RCI Exchangers costing $40 per day must be for the exchange fee only.  What about the maintenance cost that they pay for the unit they are exchanging?


Exactly. Gold and Silver seasons at some resorts are not very cheap per night like a trust point where the cost is the average of all resorts and if it's poison by lot of low season weeks (most of the time), it pulls the cost per point to the top. On top of that when the developer is greedy like DRI, the cost per point sky rocket due to too much management and administrative fees.

Using my example of 1 bdrm at Lagoon Tower (4,800 points), your cost is $5,800 / 34,600 * 4,800 = $804.62 or $114.95 per day (much cheaper than $200 but 2x more than your $60 where it was based on a studio and not a 1 bdrm like at KBC).
An owner of a 1 bdrm at Lagoon Tower will pay $1,283.44 + Club Fee for a week (1.5x more than you).

The $40 per day is the resort fee charged to RCI exchanger by Lagoon Tower like the fee KBC charge you at $25 per day (it's now $27.95 as per RCI directory).


----------



## Tamaradarann

brp said:


> I'm curious on how to make the maths work on this. Even with a MF/point ratio of $0.15, this would mean 400 points/night. We're hard-pressed to find that even at Bay Club, and I understand that the points requirements on Oahu are higher than this. Would love to see how to work this
> 
> Cheers.


We stay in Studios.  During Platinum Season Studios in Lagoon Tower and Kalia Tower in the Hilton Hawaiian Village are 220 points a night M-Th and 440 points a night F,Sat, and Sun.  Total of 2200 points a week. These Studios are very small about 1/2 the size of a normal Studio and have a real mini kitchen with only a toaster, coffee pot, microwave, and dorm size refrigerator but we make it work.   We focus on where we are and what we are going to do when we are there, which is so much, not the accommodation that we are in which is actually smaller than a hotel room.  

On the Island of Hawaii there were no Studios until the Ocean Tower opened up in the Waikoloa Beach Resort which we have Never stayed at.  That resort has higher points than regular studios I believe it is 3700 points a week.  But that would be less than a Bay Club 1 BR.


----------



## Tamaradarann

dayooper said:


> Keeping stats to M/Th, it does allow you to extend your points.
> 
> Standard 2 bedrooms in platinum season during weekdays are 700 points a day. That comes out to 10 days at $105 per night. Since you can only book club points in 3 day increments or more, one of those stays might have a weekend day and that would increase the price.
> 
> Gold season, 2 bedrooms are 500 during weekdays. That gets you 14 nights at $75 Stay.





youppi said:


> Exactly. Gold and Silver seasons at some resorts are not very cheap per night like a trust point where the cost is the average of all resorts and if it's poison by lot of low season weeks (most of the time), it pulls the cost per point to the top. On top of that when the developer is greedy like DRI, the cost per point sky rocket due to too much management and administrative fees.
> 
> Using my example of 1 bdrm at Lagoon Tower (4,800 points), your cost is $5,800 / 34,600 * 4,800 = $804.62 or $114.95 per day (much cheaper than $200 but 2x more than your $60 where it was based on a studio and not a 1 bdrm like at KBC).
> An owner of a 1 bdrm at Lagoon Tower will pay $1,283.44 + Club Fee for a week (1.5x more than you).
> 
> The $40 per day is the resort fee charged to RCI exchanger by Lagoon Tower like the fee KBC charge you at $25 per day (it's now $27.95 as per RCI directory).
> View attachment 13624
> 
> View attachment 13625


----------



## SmithOp

I’m staying Oct 6-18th in a 1br std phase 2 at Kingsland, 6720 points.  At my mf cost of .11 per point thats about $67/night.  I book Sun thru the following week so I only pay one weekend at the higher points.  Oct is gold bargain season in Hawaii.


Sent from my iPad using Tapatalk Pro


----------



## Tamaradarann

youppi said:


> Exactly. Gold and Silver seasons at some resorts are not very cheap per night like a trust point where the cost is the average of all resorts and if it's poison by lot of low season weeks (most of the time), it pulls the cost per point to the top. On top of that when the developer is greedy like DRI, the cost per point sky rocket due to too much management and administrative fees.
> 
> Using my example of 1 bdrm at Lagoon Tower (4,800 points), your cost is $5,800 / 34,600 * 4,800 = $804.62 or $114.95 per day (much cheaper than $200 but 2x more than your $60 where it was based on a studio and not a 1 bdrm like at KBC).
> An owner of a 1 bdrm at Lagoon Tower will pay $1,283.44 + Club Fee for a week (1.5x more than you).
> 
> The $40 per day is the resort fee charged to RCI exchanger by Lagoon Tower like the fee KBC charge you at $25 per day (it's now $27.95 as per RCI directory).
> View attachment 13624
> 
> View attachment 13625



I use a Studio in the Lagoon Tower because that is where we stay when we are there.  We don't stay nor do we need to stay in a 1 BR since our objective is to be in Honolulu as long as possible for the least amount of money.  We are retired so that the length of our vacation is unlimited so we go for length and getting away for the winter from NY.  Unfortunately KBC doesn't have Studios, however, the Modern Hotel that DRI is renovating into timeshares will have Studios.  I understand that those Studios will be even more points than KBC 1 BR units, therefore, my comparison of the Lagoon Tower Studio cost/night with the cost/night of KBC is totally valid and I told the DRI sales people that when we went to the presentation at KBC in May as well as the one we went to at the Modern when we were there in April.  Since you are using a calculator to calculate the costs I did the Math on the Lagoon Tower Studio more precisely and it comes to $52.68/night.  Not bad for the Hilton Hawaiian Village.


----------



## Ralph Sir Edward

Tamararann, This causes me furiously to think. (As the old French adage said.)

Lock down a Bay Club on Thursday - Thursday. But book a pair of studios on the Monday to Thursday before on Oahu @ 1760 points. :Chin Scratch: (Pair, as I and my brother, who goes along with me, would each have to have our own studio.)

But I'd have to pay HGVC annual fee. . .  (And buy a low M/F points unit. Cogitate, cogitate. . . )


----------



## dandjane1

geist1223 said:


> As DRI Owners we think this is great.





pedro47 said:


> How much money does Apollo have to purchase HGVC ?
> This would be an excellent purchase for Diamond owners IMO.



*We just attended another DRI "owner update" on Thursday 22 August, and the sales weasel (no high pressure applied - we're Platinum and they don't bother us with pressure) was all agog over the "imminent" HGVC closing. I know one doesn't believe the SWs, but the whole resort management seemed convinced it would happen soon. Reputation aside, as a DRI owner, it would be great - the (reported) plan is to have full rights to reserve at either brand. I wonder how any deeded weeks from either would be worked into points...........and , would the various "Elite" levels of ownership co-mingle and operate smoothly? HMMMMmmmmmmmmmm.*


----------



## dayooper

dandjane1 said:


> *We just attended another DRI "owner update" on Thursday 22 August, and the sales weasel (no high pressure applied - we're Platinum and they don't bother us with pressure) was all agog over the "imminent" HGVC closing. I know one doesn't believe the SWs, but the whole resort management seemed convinced it would happen soon. Reputation aside, as a DRI owner, it would be great - the (reported) plan is to have full rights to reserve at either brand. I wonder how any deeded weeks from either would be worked into points...........and , would the various "Elite" levels of ownership co-mingle and operate smoothly? HMMMMmmmmmmmmmm.*



Sales weasel gotta sales weasel, if a sales weasel lips are moving and any other cliche. They will say anything to get you to buy.


----------



## dandjane1

CalGalTraveler said:


> @JIMinNC that explanation makes sense. With HGVC Maui Villas sounding like it will be delayed or reduced due to local opposition, Diamond has some nuggets in their portfolio that could be renovated/upgraded to HGVC standard and resold rapidly. Specifically:
> 
> * Kaanapali Beach Club on Maui
> * Embarc / former Interwest properties (Whistler, Calif Desert, Ixtapa, Eastern Canada etc.)
> * Lake Tahoe Resort (former Embassy Suites).
> * The Modern Honolulu which is only 1 block away from HHV.
> 
> *What other Diamond properties/locations would add significant value to the HGVC portfolio?*


*

Answer: Cabo Azul at San Jose del Cabo in California Sur*


----------



## dandjane1

hurnik said:


> What's interesting is that on the FB HGVC *Owners* group there's at least one lady who claims DRI never increased MF that much and that it's basically a good thing if this happens.  I gave up, but without any actual hard-numbers (I guess I'd have to see if there's a DRI group on TUG and see if they have their MF listing like we do here in this forum).
> 
> The only "hardcore" evidence I have is that the quality of DRI resorts (excluding the intrawest ones which apparently are Embarc and "separate" from DRI sorta) are that they are NOT up to the quality of HGVC (that Kaanapali one does not look appealing at all).





nuwermj said:


> Here is more data than you will probably want, from our own TUGGER @youppi
> 
> Maintenance Fees since 2007
> https://docs.google.com/spreadsheets/d/1jo0_ti3h8ZWy41VCCeaFLfpHqZKe38zADMPFQ9lDfg8/pubhtml#
> 
> A detailed history of the company
> https://docs.google.com/spreadsheets/d/1WXE5rnFgWaPKJdByFs6kAUjkXWLhpwmq4pB8OuepK30/pubhtml#



*Our DRI US Collection MFs have averaged 1.89% increase  (now 17.7 cents/pt.) per year since 2016, which is better than Wyndham in either UDI or CWA points. For a Daytona Beach oceanfront 2 BR lockoff, we pay 8,500 points X $0.177=$1,504.50. This can be reduced by reserving a 1 BR and paying $49 upgrade fee to get the 2 BR (check availability at booking time). This drops the cost to 6,500 points @ $0.177= $1,150.50 + $49=$1,200. Either way, that ain't bad. We never had a problem with Cloobeck or Palmer - if we had a bad accomm. and complained, we would get points refunded and an apology. This only happened in recently-absorbed resorts which hadn't been "Diamond-ized" yet. Thanks for the accurate spreadsheets!*


----------



## RLS50

CalGalTraveler said:


> @JIMinNC that explanation makes sense. With HGVC Maui Villas sounding like it will be delayed or reduced due to local opposition, Diamond has some nuggets in their portfolio that could be renovated/upgraded to HGVC standard and resold rapidly. Specifically:
> 
> * Kaanapali Beach Club on Maui
> * Embarc / former Interwest properties (Whistler, Calif Desert, Ixtapa, Eastern Canada etc.)
> * Lake Tahoe Resort (former Embassy Suites).
> * The Modern Honolulu which is only 1 block away from HHV.
> 
> What other Diamond properties/locations would add significant value to the HGVC portfolio?





dandjane1 said:


> *
> Answer: Cabo Azul at San Jose del Cabo in California Sur*



I would also add the *Oceanaire / Ocean Beach Club* complex in Virginia Beach.   Virginia Beach doesn't have the large and grand resorts that Hawaii, Hilton Head, or Mexico have, but on a relative basis this is the best property in Virginia Beach.   For better or worse, when Diamond bought out Gold Key they got a monopoly on the best collection of resorts in Virginia Beach (also includes Turtle Cay, Beach Quarters, and Boardwalk Villas).

And *Beachwoods *in OBX.   That is a very large property bordering a 700 acre nature preserve and has some of the largest and most updated units available in OBX, along with probably the best overall amenities on OBX.  But the resort itself is not oceanfront.


----------



## escanoe

CalGalTraveler said:


> That's okay. II is even better. Trades for Marriotts, Hyatts, and Westins.



When Marriotts, Hyatts, Westins, and DRIs trade on II, can they trade in points (able to select your days) or is it all in fixed week blocks? I am under the impression that points trading is much less popular with II than RCI. As a family that has less flexibility with the school calendar and such, not being limited to blocks of weeks is a big plus to me.

I think my preference would be for HGVC to switch to II, but the ONLY reason I think that is I already have a non HGVC timeshare that gives me all the RCI points that I need.


----------



## RLS50

It has been mentioned already a number of times in this thread that (in general) Diamond maintenance fees are expensive relative to the rest of the timeshare world, but in return an owner only gets access to a collection of mostly 3 Star to 3.5 Star properties.   Unfortunately I would have to agree that I think this is basically accurate.   Diamond has some nice properties, but not enough of them to justify the high overall maintenance fees.    As NUWERMJ has said in the past, basically Diamond owners pay Marriott level maintenance fees but only get back in return mostly Wyndham level properties.

As someone who became an involuntary Diamond owner in 2016 when Diamond purchased GoId Key, I have had almost 4 seasons now to evaluate Diamond’s management of the resorts they took over from Gold Key.

From what I have seen (and in my opinion), the easiest way to explain the discrepancy in Diamond’s fees versus the quality of their resorts (compared to say Marriott) is the percentage of the resort budget that goes to the Management Fees / Owner Services support line items.     Basically on average it seems that possibly 8% to 14% of each annual budget at a typical Diamond property is almost wasted on very expensive back office owner support services versus being reinvested in the Reserves line item at each resort.   Year after year after year of that wasted 8% to 14% of the budget going to Diamond for what feels like inflated overhead fees versus going into resort upgrades and refurbishments may help explain the difference between what an average Marriott property looks like versus what an average Diamond property looks like.

Having said that, I have come to better appreciate how Diamond manages a resort operationally.  For example, I think the Diamond Regional GM in Virginia Beach does a very good job managing the resorts there.    Immediately after the transition from Gold Key to Diamond, the Virginia Beach properties were in what seemed like chaos.   Once Diamond brought in that new Regional GM things stabilized, and it seems like over the last couple of years he has assembled a staff and team that seems to be improving things each year.    I also have found the Diamond HOA representatives to be very responsive and helpful when concerns are raised.   I have come to realize that Diamond has some good, experienced, and qualified people in the operations side of their business.

So I don’t think Diamond is all bad, there are a number of positives I have experienced.  I do believe they know how and what needs to be done at a property to keep it maintained properly.   Our family certainly enjoys vacationing at the Diamond properties in Virginia Beach, and now I wouldn't trade the current Diamond Regional GM in Virginia Beach for any other GM in any other system anywhere.   He is always approachable and responsive and is capable of giving a detailed response and plan of action, or reason for lack of action, on any issue that might be raised.    I have engaged with a number of GM's over the years and he is excellent.

I also think the Destination Xchange internal trading program they recently added was a great idea and a very nice option for owners.

***********************************************

For me the main Achilles Heel in the Diamond timeshare model continues to be that they charge owners way too much for Owner Services fees (sometimes listed under “Indirect Corporate Costs” on the budget).  The irony of these high fees is that Diamond appears to have consolidated their Owner Services operations to 2 major call centers (Las Vegas and Orlando).    Consolidation of this kind should result in more operational efficiencies and less costs to owners, not higher costs.    The high fees are bad enough, but what makes it worse is that the systems and processes they provide to owners can sometimes range from inefficient / slow, deficient, to downright dysfunctional at times.

The online systems are lacking basic functionality available from most other name brands, and some online functionality has remained broken for months at a time with no answers from Owner Services or responses their IT department.   Some reported issues seem to just go into a giant black hole never to be heard from again.

The various departments can be very slow processing basic owner services requests (sometimes your request gets “lost” or ignored and then you have to start over again with a new rep), and frequently if there is any kind of real issue the owner services reps don’t even know who to contact in other departments or how to escalate to other departments.   At times it can be very dysfunctional and time consuming for owners.   It’s hard to “Stay Vacationed” when having to follow up on issues or requests that should be easily resolved or should have never happened in the first place.

If I was running Diamond my #1 priority would be to address the waste and dysfunction and high cost charged to owners for the Owner Services processes.    Frankly for the amount of money Diamond owners pay for those services the experience should be much better, much faster, and much more consistent.

I would have to believe that the Diamond brand name and reputation overall would be in much better shape, and the individual resorts much closer to Marriott and Westin standards if that extra 10% or so a year in the budget was reallocated into improving the quality of the actual properties.   Over time that can add up to make a significant difference.

And to be clear, I am not talking about the individual people in Owner Services (some of whom are very nice and who do try to be helpful).  I am talking about the *processes* and what seems like frequent “dropped batons” between what I can only describe as isolated and / or independent departmental silos.    The problem in my opinion seems to be in their internal processes and the (lack of) proper systems they provide their reps to manage those processes.


P.S…I also would allow for the possibility that Diamond charges owners a ton for Owner Services but all that money is not being fully re-invested in Owner Services.   So the reason for the slowness and dysfunction encountered at times in Owner Services could be is that those departments are actually only receiving some partial amount of what Owners are actually paying for it.


----------



## CalGalTraveler

@RLS50 Thank you for your thoughtful response. This depresses me. Although HGVC is not perfect, they are well managed and we have seen continuous improvements under the leadership of Mark Wang with the IT systems and new location expansion. (Long-time HGVCers may remember the two clunky reservation systems they used 4 years ago. that have now been replaced.) Owners like HGVC because the good management translates into efficient MF at Marriott equivalent quality, and they treat owners well.

Perhaps Apollo sees HGVC as their white knight to fix these inefficiencies. However, once you raise the MF it is hard to put the genie back in the bottle and lower prices. A likely option would be to upgrade the Diamond properties to justify the MF and that would take a long time and be very expensive.

But where would the monies come from to pay for this? Efficiency improvements are slow and not assured. A faster option is to spin off the lower quality, lower profit resorts to another system, and use the cash raised to upgrade the nuggets that remain. Either way this would be a distraction for HGVC.


----------



## terces

RLS50 said:


> It has been mentioned already a number of times in this thread that (in general) Diamond maintenance fees are expensive relative to the rest of the timeshare world, but in return an owner only gets access to a collection of mostly 3 Star to 3.5 Star properties.   Unfortunately I would have to agree that I think this is basically accurate.   Diamond has some nice properties, but not enough of them to justify the high overall maintenance fees.    As NUWERMJ has said in the past, basically Diamond owners pay Marriott level maintenance fees but only get back in return mostly Wyndham level properties.
> 
> As someone who became an involuntary Diamond owner in 2016 when Diamond purchased GoId Key, I have had almost 4 seasons now to evaluate Diamond’s management of the resorts they took over from Gold Key.
> 
> From what I have seen (and in my opinion), the easiest way to explain the discrepancy in Diamond’s fees versus the quality of their resorts (compared to say Marriott) is the percentage of the resort budget that goes to the Management Fees / Owner Services support line items.     Basically on average it seems that possibly 8% to 14% of each annual budget at a typical Diamond property is almost wasted on very expensive back office owner support services versus being reinvested in the Reserves line item at each resort.   Year after year after year of that wasted 8% to 14% of the budget going to Diamond for what feels like inflated overhead fees versus going into resort upgrades and refurbishments may help explain the difference between what an average Marriott property looks like versus what an average Diamond property looks like.
> 
> Having said that, I have come to better appreciate how Diamond manages a resort operationally.  For example, I think the Diamond Regional GM in Virginia Beach does a very good job managing the resorts there.    Immediately after the transition from Gold Key to Diamond, the Virginia Beach properties were in what seemed like chaos.   Once Diamond brought in that new Regional GM things stabilized, and it seems like over the last couple of years he has assembled a staff and team that seems to be improving things each year.    I also have found the Diamond HOA representatives to be very responsive and helpful when concerns are raised.   I have come to realize that Diamond has some good, experienced, and qualified people in the operations side of their business.
> 
> So I don’t think Diamond is all bad, there are a number of positives I have experienced.  I do believe they know how and what needs to be done at a property to keep it maintained properly.   Our family certainly enjoys vacationing at the Diamond properties in Virginia Beach, and now I wouldn't trade the current Diamond Regional GM in Virginia Beach for any other GM in any other system anywhere.   He is always approachable and responsive and is capable of giving a detailed response and plan of action, or reason for lack of action, on any issue that might be raised.    I have engaged with a number of GM's over the years and he is excellent.
> 
> I also think the Destination Xchange internal trading program they recently added was a great idea and a very nice option for owners.
> 
> ***********************************************
> 
> For me the main Achilles Heel in the Diamond timeshare model continues to be that they charge owners way too much for Owner Services fees (sometimes listed under “Indirect Corporate Costs” on the budget).  The irony of these high fees is that Diamond appears to have consolidated their Owner Services operations to 2 major call centers (Las Vegas and Orlando).    Consolidation of this kind should result in more operational efficiencies and less costs to owners, not higher costs.    The high fees are bad enough, but what makes it worse is that the systems and processes they provide to owners can sometimes range from inefficient / slow, deficient, to downright dysfunctional at times.
> 
> The online systems are lacking basic functionality available from most other name brands, and some online functionality has remained broken for months at a time with no answers from Owner Services or responses their IT department.   Some reported issues seem to just go into a giant black hole never to be heard from again.
> 
> The various departments can be very slow processing basic owner services requests (sometimes your request gets “lost” or ignored and then you have to start over again with a new rep), and frequently if there is any kind of real issue the owner services reps don’t even know who to contact in other departments or how to escalate to other departments.   At times it can be very dysfunctional and time consuming for owners.   It’s hard to “Stay Vacationed” when having to follow up on issues or requests that should be easily resolved or should have never happened in the first place.
> 
> If I was running Diamond my #1 priority would be to address the waste and dysfunction and high cost charged to owners for the Owner Services processes.    Frankly for the amount of money Diamond owners pay for those services the experience should be much better, much faster, and much more consistent.
> 
> I would have to believe that the Diamond brand name and reputation overall would be in much better shape, and the individual resorts much closer to Marriott and Westin standards if that extra 10% or so a year in the budget was reallocated into improving the quality of the actual properties.   Over time that can add up to make a significant difference.
> 
> And to be clear, I am not talking about the individual people in Owner Services (some of whom are very nice and who do try to be helpful).  I am talking about the *processes* and what seems like frequent “dropped batons” between what I can only describe as isolated and / or independent departmental silos.    The problem in my opinion seems to be in their internal processes and the (lack of) proper systems they provide their reps to manage those processes.
> 
> 
> P.S…I also would allow for the possibility that Diamond charges owners a ton for Owner Services but all that money is not being fully re-invested in Owner Services.   So the reason for the slowness and dysfunction encountered at times in Owner Services could be is that those departments are actually only receiving some partial amount of what Owners are actually paying for it.


Thanks for the info.  I'm not really understanding the problem.  Could you give me some examples of what the Owner Services process entails and what kind of problems you have encountered?  Do they actually charge you to resolve booking issues etc?


----------



## terces

CalGalTraveler said:


> @RLS50 Thank you for your thoughtful response. This depresses me. Although HGVC is not perfect, they are well managed and we have seen continuous improvements under the leadership of Mark Wang with the IT systems and new location expansion. (Long-time HGVCers may remember the two clunky reservation systems they used 4 years ago. that have now been replaced.) Owners like HGVC because the good management translates into efficient MF at Marriott equivalent quality, and they treat owners well.
> 
> Perhaps Apollo sees HGVC as their white knight to fix these inefficiencies. However, once you raise the MF it is hard to put the genie back in the bottle and lower prices. A likely option would be to upgrade the Diamond properties to justify the MF and that would take a long time and be very expensive.
> 
> But where would the monies come from to pay for this? Efficiency improvements are slow and not assured. A faster option is to spin off the lower quality, lower profit resorts to another system, and use the cash raised to upgrade the nuggets that remain. Either way this would be a distraction for HGVC.


Maintenance fees at some resorts do not include enough funds to fully support the Reserve Fund.  The reserve fund money is used for budgeted upgrades including new furniture, carpets etc.  I went through the HGVC Las Vegas Boulevard budget in detail.  Some of my analysis is nothing more than a guess because I do not have access to the engineer reports or the discussion surrounding them, but I am a former builder, developer and owner of commercial properties and do understand the process.  My best guess is that the Reserve Fund is underfunded by about $37million dollars.  They have 714 units x 52 weeks = 37,000 weeks so they are shy by an amount of about $1000 per unit/week.  LVB is a very well run resort, but this type of Reserve Fund underfunding seems to be endemic in the HOA world, and results in decisions being made such as "let's keep those ratty old sofas for one more year so we don't have to ask for a Special Assessment".  The Reserve Fund studies or reports are done by engineers and upgraded each year and are very detailed in how much money is needed, but there is no legislation that I am aware of that forces them to fully comply.  It will be interesting to see if Diamond is fully funding these reserves instead of kicking the can down the road, and if that is why they seem to have higher MF's in some instances.


----------



## CalGalTraveler

terces said:


> Maintenance fees at some resorts do not include enough funds to fully support the Reserve Fund.  The reserve fund money is used for budgeted upgrades including new furniture, carpets etc.  I went through the HGVC Las Vegas Boulevard budget in detail.  Some of my analysis is nothing more than a guess because I do not have access to the engineer reports or the discussion surrounding them, but I am a former builder, developer and owner of commercial properties and do understand the process.  My best guess is that the Reserve Fund is underfunded by about $37million dollars.  They have 714 units x 52 weeks = 37,000 weeks so they are shy by an amount of about $1000 per unit.  LVB is a very well run resort, but this type of Reserve Fund underfunding seems to be endemic in the HOA world, and results in decisions being made such as "let's keep those ratty old sofas for one more year so we don't have to ask for a Special Assessment".  The Reserve Fund studies or reports are done by engineers and upgraded each year and are very detailed in how much money is needed, but there is no legislation that I am aware of that forces them to fully comply.  It will be interesting to see if Diamond is fully funding these reserves instead of kicking the can down the road, and if that is why they seem to have higher MF's in some instances.



I did notice in their notes that Blvd is still subsidized slightly by the developer to keep their MF lower because they are still selling the building. This is a common method for condos until the building sells out. This would explain why the other Vegas properties run in the $1000 range vs. the $800 range for Blvd. 2 bdrm. Still a good deal at $1000 because equivalent Marriott are not that low. For example Grand Chateau runs $1300. Another reason buyers should consider all the FEPS (Flamingo, Elara, Paradise, Strip) properties in Vegas because this disparity will not last.


----------



## escanoe

RLS50 said:


> It has been mentioned already a number of times in this thread that (in general) Diamond maintenance fees are expensive relative to the rest of the timeshare world, but in return an owner only gets access to a collection of mostly 3 Star to 3.5 Star properties.



For those that own a week somewhere that DRI manages the resort, I am sure they have good perspective into how DRI does and how competitive fees are.

Those of us on TUG that use the HGVC points system to squeeze the most value we can out of our ownership would have a tough time transitioning to a trust system. For the most part we have figured out how to have high point platinum properties with relative low point/me ratios. In other words we pay much less in MFs for a stay that uses the same number of points as someone that owned Gold or Silver exchanging for the same stay.

In the trust world for the most part everyone pays the same for MFs based only on the number of points owned. Even if DRI maintenance fees were the same overall as HGVC, making such a transition (either by hook or by crook) would be painful for many of us TUGers. I don’t think I am the first one to state this, but it has been what has really sunk in as reality to me as this thread develops. It is simply a realization of one of many possibilities that exists and I do still thing we are way ahead of ourselves.


----------



## SueDonJ

escanoe said:


> When Marriotts, Hyatts, Westins, and DRIs trade on II, can they trade in points (able to select your days) or is it all in fixed week blocks? ...



Basically:

Marriott Weeks that are unenrolled in the Destination Club points system exchange via II as weeks, to Marriott and non-Marriott resorts. Owners can choose to book available weeks and deposit those, or, can choose to have Marriott select the week for deposit. Each resort has its own calendar - all floating Weeks allow Fri-Sat-Sun check-in days but several also allow Thurs or Mon check-in days. The check-in day of the deposited interval does not have to match the check-in day of the requested interval.

Marriott Weeks that are enrolled can be used in all the usual ways including II exchanges as above, or, owners can elect on an annual basis to exchange their Weeks for an allotment of Destination Club Points.

The DC Exchange Company is the conduit for exchanging DC Exchange Points (from enrolled/elected Weeks) and DC Trust Points (purchased as points) to Marriott resorts.

II's points system is the conduit for exchanging DC Trust Points to non-Marriott resorts.

Worth mentioning:

The DC Trust can be a pool for exchanging DC Trust Points directly for intervals which have been conveyed to the DC Trust, BUT, it is very rare that Marriott does not make these intervals available immediately through the DC Exchange Company. Again, this happens very infrequently with high-demand intervals and appears usually at the earliest reservation windows. The overwhelming majority of all DC intervals are reserved via the DC Exchange Company.


----------



## terces

CalGalTraveler said:


> I did notice in their notes that Blvd is still subsidized slightly by the developer to keep their MF lower because they are still selling the building. This is a common method for condos until the building sells out. This would explain why the other Vegas properties run in the $1000 range vs. the $800 range for Blvd. 2 bdrm. Still a good deal at $1000 because equivalent Marriott are not that low. For example Grand Chateau runs $1300. Another reason buyers should consider all the FEPS (Flamingo, Elara, Paradise, Strip) properties in Vegas because this disparity will not last.


That is not my read on it in regards to the developer subsidy.  I think this is an amount they paid for the unsold inventory they held and it was paid in proportion to what the "sold" units were paying for MF's.  On the last statement it states that there is no more developer subsidy as the building is fully sold.  The budget at HGVC whereby a 2 bdrm platinum is about $850 is a true amount, includes a healthy "management fee", but as previously stated in my opinion is not fully funding the Reserve Fund.


----------



## RLS50

terces said:


> Thanks for the info.  I'm not really understanding the problem.  Could you give me some examples of what the Owner Services process entails and what kind of problems you have encountered?  Do they actually charge you to resolve booking issues etc?


Well none of the Owner Services issues are real show stoppers.    They wouldn’t scare me off from keeping our Diamond weeks, buying additional Diamond deeded weeks, or owning with Diamond per se.

But over the last 3-4 years these issues have occurred with enough frequency to be a real annoyance and waste of time to monitor and drive a resolution to.    Unfortunately almost every process involving your Diamond owned week requires, or eventually requires, some type of manual intervention.   This takes time waiting on the phone and talking to different people across different departments and all that wasted time on hold and explaining and re-explaining issues on the phone adds up.   I have to work much harder and spend more time managing our Diamond weeks than any other system requires.

You want to book even your basic home week reservation?   You have to call somebody because you can’t do it yourself online. 

You want to now view your reservation confirmation online?    Oops…the online functionality has been broken for months so you have to call somebody. 

You want to email yourself a copy of your reservation?   Oops…that online functionality has also been broken for many months so you have to call somebody.  

You want to prepay your maintenance fees online?  Oops that functionality is also now broken so you have to call somebody. 

You own 2 deeded weeks at the same resort during the same week, so you want to confirm the different unit details as listed on your deeds?   Oh darn, the online system doesn’t even provide that basic information, so you guessed it, you have to call somebody to confirm (unless you have built out your own Excel matrix to keep track of them like I had to). 

You want to deposit in Interval?  Calling Interval is not enough as it is with Marriott, you have to call somebody in Diamond. 

So you decide you want to sell or buy a Diamond week?

Marriott takes 3-5 days to provide an Estoppel, Diamond takes 3-5 weeks.   Why does something so simple take so long?   I have no idea. 

After the ROFR decision, Marriott will typically take 3-5 weeks to process a transfer.   Diamond can take anywhere from 8-12+ weeks to process a transfer.

Have a problem where a week you purchased was transferred into your account with usage details and owed maintenance fees incorrect?   This has happened to me multiple times.   You have to call somebody.   Then typically those problems may involve multiple follow up calls until the issue is finally resolved.   Even if somebody tells you they will take care of the problem, you have to keep watching since you may find weeks go by and the issue still remains, so you have to keep following up with more phone calls.    The best is when there is an error in the maintenance fee payment (problem on their end caused by their process) and someone in Financial Service asks you to provide “proof” to them that the maintenance fees were actually paid…when you received and have a system generated email from Diamond confirming it.    How that even happens I have no idea.   I have never dealt with any other company ever that has made requests like that.   And this has happened at least a 5-6 times over the last 3-4 years. 

I have followed the process suggested to me by Owner Services and reported these issues multiple times over the years, including multiple times this year.  Diamond is great for an immediate response or email acknowledging your complaint and promising timely resolution and follow up, but the actual follow up frequently never comes.   It seems the “baton” frequently gets dropped from the initial report of an issue to getting to the right person in the right departmental silo who can fix the issue. 

Beyond the frustration of dealing with the various system glitches, the missing or lack of functionality provided by the online systems, and time consuming (and seemingly inefficient) added manual steps in various processes, remember that we Diamond owners are paying near industry high rates for management and owner services. 

Or to put it this way.  Imagine paying for a high end model Mercedes and receiving a Honda Civic in return.    The Civic is not a bad car and will still get you where you need to go…but you are making monthly payments on a Mercedes.

It's about the value of what you are paying for versus what you are receiving back in return.


----------



## NOLA47

I've never been involved in a merger before.  When mergers or buyouts occur, are existing owners (say with HGVC) offered the opportunity to sell their properties back to the companies if they choose to?


----------



## geist1223

We have not noticed any of the problems mention in the Posting just before this. But then we are DRI Points Members. We do not own Deeded Weeks. We book online all the time. We can review our Confirmations online. We can send ourselves Confirmation emails.


----------



## JIMinNC

NOLA47 said:


> I've never been involved in a merger before.  When mergers or buyouts occur, are existing owners (say with HGVC) offered the opportunity to sell their properties back to the companies if they choose to?



I think it's almost certain that option would NOT be offered.

But I think everyone is getting way over their skis on this. We don't even know if this is going to happen. It is just a rumor that is spreading in the stock market. Here is what we don't know, and the answers to these questions will determine how HGVC and DRI owners would be impacted:

1) Will the deal even happen?
2) If it happens, will DRI and HGVC be combined in some fashion over time (years), or will they be run separately indefinitely?
3) If it happens, which management team - DRI or HGVC - will Apollo put in charge of the combined organization?

The answers to these questions are critical to how owners are impacted. For example, if @nuwermj is correct and Apollo puts the HGVC management team in charge to "fix" DRI, then the outcome could be fine for HGVC owners. The HGVC business model would likely largely survive and elements of it could be applied to DRI to try to improve their operation. DRI owners could benefit as well from that, based on the comments made by DRI owners in this thread. If, on the other hand, the DRI team gets put in charge and their business model prevails, the outcome may not be as good for HGVC owners.

Either way, everyone should just step back off the ledge and wait and see what happens.


----------



## GT75

JIMinNC said:


> Either way, everyone should just step back off the ledge and wait and see what happens.


Thank you.    I think that this is very good advice for us.    In reality, there isn't anything that we can do anyways. I am also thankful for the DRI TUG members giving us HGVC TUG members a little understanding of their TS system.


----------



## dougp26364

NOLA47 said:


> I've never been involved in a merger before.  When mergers or buyouts occur, are existing owners (say with HGVC) offered the opportunity to sell their properties back to the companies if they choose to?





JIMinNC said:


> I think it's almost certain that option would NOT be offered.
> 
> But I think everyone is getting way over their skis on this. We don't even know if this is going to happen. It is just a rumor that is spreading in the stock market. Here is what we don't know, and the answers to these questions will determine how HGVC and DRI owners would be impacted:
> 
> 1) Will the deal even happen?
> 2) If it happens, will DRI and HGVC be combined in some fashion over time (years), or will they be run separately indefinitely?
> 3) If it happens, which management team - DRI or HGVC - will Apollo put in charge of the combined organization?
> 
> The answers to these questions are critical to how owners are impacted. For example, if @nuwermj is correct and Apollo puts the HGVC management team in charge to "fix" DRI, then the outcome could be fine for HGVC owners. The HGVC business model would likely largely survive and elements of it could be applied to DRI to try to improve their operation. DRI owners could benefit as well from that, based on the comments made by DRI owners in this thread. If, on the other hand, the DRI team gets put in charge and their business model prevails, the outcome may not be as good for HGVC owners.
> 
> Either way, everyone should just step back off the ledge and wait and see what happens.



Actually, DRI has had an active GIVE back program with the owner paying a fee to get rid of their ownership. We returned two deeded weeks to them a few years back. If you look on the DRI section it appears to still be an active option, but it’s not free. 

I agree that anxiety over what might happen isn’t worth it. I’m not thrilled but I’m not tossing the baby out with the bath water either.


----------



## terces

I guess there are two possible positives that have gone through my mind as I walk the beach at Carlesbad:
First of all Blackstone owns the trump card with control of the HGVC brand.  I assume they are earning revenue off this and I would doubt they will allow the brand to be degraded, or alternately they could be the suitor.
Secondly, the time share industry is gradually getting better as it emerges from the deep pit of distain that has surrounded it.  It seems there is some potential for operational improvement in DRI.


----------



## RLS50

geist1223 said:


> We have not noticed any of the problems mention in the Posting just before this. But then we are DRI Points Members. We do not own Deeded Weeks. We book online all the time. We can review our Confirmations online. We can send ourselves Confirmation emails.


This is a fair point.

After 4 years it's clear to me that DRI's computer systems and organizational structure were built primarily for points membership and usage.     In fact, as it has been told to me by various DRI reps, it wasn't until Diamond bought Gold Key and their many thousands of deeded weeks owners that they attempted to custom code changes into their online system to better service the needs and requirements of deeded weeks owners.  

So it is possible that some of what I have been experiencing and describing here are bugs or glitches in all that custom code implemented for deeded weeks owners.    What I have been experiencing might also correlate with rumors I have heard that Apollo has been doing some cost cutting inside Diamond that has impacted headcount in the IT Department, and possible other Owner Services departments as well, however I can't personally confirm those rumors.

Things were worse in 2017 than today.   We saw some noticeable improvements in 2018.  But unfortunately 2019 seems like things are starting to slide backwards towards the 2017 version.

To be clear we still enjoy our Diamond deeded weeks ownerships, and the onsite management we have experienced at the physical resorts in Virginia Beach or Beachwoods in OBX seems to have gotten better each year. 

But we deeded weeks owners are paying the same high cost (relative to other timeshare systems) of our HOA budgets for management and owner services as points owners are.    For the amount of money we pay I believe the consistency of the quality in the internal owner services processes and overall functionality provided online should be better.   At least for deeded weeks owners.


----------



## dayooper

dandjane1 said:


> *Our DRI US Collection MFs have averaged 1.89% increase  (now 17.7 cents/pt.) per year since 2016, which is better than Wyndham in either UDI or CWA points. For a Daytona Beach oceanfront 2 BR lockoff, we pay 8,500 points X $0.177=$1,504.50. This can be reduced by reserving a 1 BR and paying $49 upgrade fee to get the 2 BR (check availability at booking time). This drops the cost to 6,500 points @ $0.177= $1,150.50 + $49=$1,200. Either way, that ain't bad. We never had a problem with Cloobeck or Palmer - if we had a bad accomm. and complained, we would get points refunded and an apology. This only happened in recently-absorbed resorts which hadn't been "Diamond-ized" yet. Thanks for the accurate spreadsheets!*



Thanks for this post. Can I ask you (or any other of our DRI experts) a question? How does DRI break down to cost per night? Just on a basic 2 bedroom week? With differences in point structure, how dies the MF per point ratio hold up? My 2 bedroom platinum at The Flamingo has a middle of the road MF ratio ($.15 this year). If I use all of my points for a full week in a standard 2 bedroom platinum, my cost  is my $1049 MF + $65 booking fee. I stayed on the top floor of Ocean 22 (Myrtle Beach) in June for $159 a night. How does that compare to a DRI cost? I’m just trying to compare apples to apples here.


----------



## dayooper

I just want to thank our DRI guests that have come over and interacted with us this past week! @RLS50 @dandjane1 @geist1223 @youppi @nuwermj and anybody else that lent their knowledge here. There has been some freak out, but the dialogue has been incredible.


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## Tamaradarann

dandjane1 said:


> *We just attended another DRI "owner update" on Thursday 22 August, and the sales weasel (no high pressure applied - we're Platinum and they don't bother us with pressure) was all agog over the "imminent" HGVC closing. I know one doesn't believe the SWs, but the whole resort management seemed convinced it would happen soon. Reputation aside, as a DRI owner, it would be great - the (reported) plan is to have full rights to reserve at either brand. I wonder how any deeded weeks from either would be worked into points...........and , would the various "Elite" levels of ownership co-mingle and operate smoothly? HMMMMmmmmmmmmmm.*



I understand that the merger talk has made the market to sell HGVC timeshares very bad.  However, I was just thinking that this could be a very good buying opportunity.  If prices became very low and people tried to take advantage of those buying opportunities would HGVC buy up a lot of inventory or would they let many of them pass because they didn't want to buy up so much inventor?.  If many properties were put on the market for say $100.  At very low prices HGVC would have the funding to buy all of those properties, however, would they or would they just buy the ones that are below the price they have usually set as their threshold price?


----------



## CalGalTraveler

@Tamaradarann What data have you seen that supports that this has had a negative effect on the HGVC timeshare sales?

IMHO we are getting WAAY over our skis based on a tabloid rumor article. I'll bet these companies talk all the time about acquisition possibilities. This may be no different except it got leaked to the street.


----------



## 1Kflyerguy

I would be surprised if the merger rumors were impacting resale prices this quickly.  If the rumors persist with new information, then i am sure it will impact sales.

Timeshare weeks are really just inventory for developers.  The decision to buyback via ROFR is always a combination of the price and the need for the actual inventory.  During the last earning call HGV mentioned having the wrong inventory mix as one of the reasons for the poor results.  With that as a backdrop i don't think will buy all available inventory just because its available at an attractive price, i believe it would need to be a unit they needed in their inventory.  If their sales are indeed softening, its reasonable to expect them to lower their inventory levels.  Even if they decide to maintain a steady inventory levels, that may result in fewer buy backs if the are not selling as much.


----------



## Tamaradarann

CalGalTraveler said:


> @Tamaradarann What data have you seen that supports that this has had a negative effect on the HGVC timeshare sales?
> 
> IMHO we are getting WAAY over our skis based on a tabloid rumor article. I'll bet these companies talk all the time about acquisition possibilities. This may be no different except it got leaked to the street.



I don't have any data.  Just like with the Stock Market uncertainty is not good for market.  I got this feeling in conversations with other HGVC timeshare owners one that said they were thinking about buying but would wait, another that said that maybe it is good that we got out of HGVC, others that said that they were thinking about selling.


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## Bao Nguyen

https://finance.yahoo.com/video/impact-millennial-travelers-timeshares-165057427.html


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## CalGalTraveler

IMHO...this looks like an infomercial. The Diamond CEO does not impress me.


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## escanoe

He is all man spread during his infomercial too. You know it is an infomercial too by the footage of the timeshares showing while they are speaking in studio. Real news does not do that. IM<HO


----------



## CalGalTraveler

escanoe said:


> He is all man spread during his infomercial too. You know it is an infomercial too by the footage of the timeshares showing while they are speaking in studio. Real news does not do that. IM<HO



LoL...he slouched too. Looked more like a sales guy trying to be cool instead of a serious CEO.

Although interviewer asked about resale values it felt scripted and insincere.


----------



## mrharris03

HGV shares just shot up intraday to a new 52-week high. Did some quick searching It is being reported that HGV is exploring “strategic alternatives,” including a potential sale, and have hired investment bankers to assist in the process.

https://m.nasdaq.com/article/hilton...le-following-takeover-interest-20190829-00726


----------



## dayooper

mrharris03 said:


> HGV shares just shot up intraday to a new 52-week high. Did some quick searching It is being reported that HGV is exploring “strategic alternatives,” including a potential sale, and have hired investment bankers to assist in the process.
> 
> https://m.nasdaq.com/article/hilton...le-following-takeover-interest-20190829-00726



Interesting. There’s definitely smoke around something happening. Besides a potential sale, I wonder what the alternatives are? Any ideas?


----------



## mrharris03

My guess is some kind of going private transaction. Reuters is also picking up the story I linked. Preliminary bids have purportedly been requested to be submitted in September. A pure-play PE firm taking HGV private is preferable (IMO) to some sort of DRI-related merger, given the already-discussed risks to the Hilton long-term license agreement (which has to be driving some of the value for HGV).


----------



## dayooper

That Hilton license was the thing that gave me pauses the DRI takeover. I wonder if there is another alternative to a sale that’s eluded to in the article.


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## CalGalTraveler

According to the license info posted previously, they would lose their Hilton license if merged or acquired by MVC et al and Wyndham. Diamond, DVC, Bluegreen not listed.


----------



## escanoe

CalGalTraveler said:


> According to the license info posted previously, they would lose their Hilton license if merged or acquired by MVC et al and Wyndham. Diamond, DVC, Bluegreen not listed.



My main take away from the legal language posted earlier on the licensing agreement is that it makes Hilton a stakeholder in negotiating any merger IF the new entity wants much assurance that they can keep the Hilton branding.


----------



## JIMinNC

escanoe said:


> My main take away from the legal language posted earlier on the licensing agreement is that it makes Hilton a stakeholder in negotiating any merger IF the new entity wants much assurance that they can keep the Hilton branding.



That was my take as well. If Hilton Corp thought a "merger" with Diamond in some fashion would harm its brand, they could require that the Hilton name be removed. So, any potential deal would have to consider that possibility and, if they want to keep the Hilton brand, insure that Hilton is on board.


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## CalGalTraveler

IMO...Even though Diamond has some nice properties and decent local management which could add to the HGV portfolio, Diamond's smarmy corporate management reputation and stories I am hearing about how poorly it treats customers concerns me.

It gives me comfort that Hilton Hotels could say no to protect their brand.  

Of course a new entity could operate without the Hilton brand, but I doubt Hilton would tolerate non-Hilton brands operating inside it's flagship resorts and hotels such as HHV,  Midtown Manhattan, Waikoloa/Ocean Towers, the District/Embassy Suites, Chicago, Hilton Cabo etc. The hotel side will have a large say in the outcome because they hold the license key (aka value) to the deal and will not want to risk their excellent brand reputation with any player who could poison the well.


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## CalGalTraveler

BTW...I hope none of these scenarios happens. Love HGVC as it is today  and hope Blackstone and Hilton Hotels can help preserve with HGV management in charge.


----------



## brp

mrharris03 said:


> MPreliminary bids have purportedly been requested to be submitted in September.



If we chipped in all of the $12M that TUG has solved folks over the years maybe...just maybe...

Cheers.


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## escanoe

Based on what we have seen and heard and the Reuter's story -- I am at least at 85% certain that HGV is going to be bought by someone. I think that the market believes that it has more value as part of something else than by itself. Apollo for sure read all of the licensing language from the public filings before making a bid and has some strategy they are confident can be used to overcome related concerns. At the end of the day he who makes the biggest offer is who is likely to own HGV. HGV management MAY still be in charge after the merger, and whoever may buy it will intend to create more value of what exists. If current owners are treated poorly, they will have a greater challenge making the value of their investment grow. I am not thrilled about this, but far from panic ... and there is some possibility we may eventually better off.


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## CalGalTraveler

October will be an interesting month. Marriott announces their plans for their Vistana program integration on Oct 4.  HGV may have a new direction too. HGV will have to figure this out quickly because FUD will cause buyers to hold off on plans and Wall St. won't tolerate a hiccup in sales.


----------



## brp

CalGalTraveler said:


> October will be an interesting month. Marriott announces their plans for their Vistana program integration on Oct 4.  HGV may have a new direction too. HGV will have to figure this out quickly because FUD will cause buyers to hold off on plans and Wall St. won't tolerate a hiccup in sales.



Having an "owner's update" this coming Sunday as part of a bounceback offer will be interesting. Will certainly be easy to shorten the presentation based on the FUD, even without the "end my presentation early" t-shirt that I'll be wearing.

Cheers.


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## CalGalTraveler

@brp Yep FUD is a great way to get out of a preso especially now that it is documented in the press. Let us know if you learn anything new about the NYC properties including the Quin and whether the Hilton Cabo property will be bHC.


----------



## Sky313

https://www.cnbc.com/2019/08/29/hil...-following-takeover-interest-sources-say.html

Same report as above after reading it


----------



## CalGalTraveler

This article confirms the veto power of Hilton hotels:

_..."These agreements would give Hilton a veto on any sale of the company it would deem detrimental to its brands."_

Does Hilton own a stake in HGVC? If not, Hilton Hotels will be impartial to any offer because they don't benefit financially from selling, so the highest bidder may not necessarily be the winner.  They will evaluate it from a brand reputation, hotel synergy and licensing revenue stream perspective.

This impartiality could be good for owners unless the buyer pays the Hotel side off handsomely to counter brand or operational concerns. For example, bringing some or all of the Diamond properties under the Hilton brand could translate into more licensing revenue for the Hotels. Despite this, Hilton will pay particular attention to the brand effect at shared landmark hotels and resorts. It will also cost money to bring Diamond properties up to the Hilton brand standard.

How this 3-way deal will be structured will be interesting.  Sure Apollo could acquire the shares on the open market, but without the blessing of Hilton Hotels and attracting HGVC management to fix Diamond, they won't get the reputational boost and brand/lead multiplier Apollo needs to get the Diamond albatross off their neck.


----------



## terces

Bao Nguyen said:


> https://finance.yahoo.com/video/impact-millennial-travelers-timeshares-165057427.html


I have not read one review on the DRI site that talks about the wonderful experiential experiences with music and baseball training camp, that this Mr. Slick talks about.  I sure hope HGVC doesn't fall into his hands.


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## nuwermj

terces said:


> I have not read one review on the DRI site that talks about the wonderful experiential experiences with music and baseball training camp, that this Mr. Slick talks about.  I sure hope HGVC doesn't fall into his hands.



Timeshare companies have offered mini-vacation (like 3-day, 2-night) packages for a long time. As we all know they're a marketing tool to funnel people into sales centers. The Diamond entertainment events are similar. Most of them are offered at a discounted price (like the mini-vacations) and a sales presentation is mandatory (otherwise the person is charged full retail value of the event).


----------



## brp

nuwermj said:


> Timeshare companies have offered mini-vacation (like 3-day, 2-night) packages for a long time. As we all know they're a marketing tool to funnel people into sales centers. The Diamond entertainment events are similar. Most of them are offered at a discounted price (like the mini-vacations) and a sales presentation is mandatory (otherwise the person is charged full retail value of the event).



Indeed. We leave tonight for one of these in NYC. Great deal for a NYC stay and worth the 15-30 minutes that the presentation will last, plus the 200 ER dollars 

These can be quite nice as we've done several across TS companies.

Cheers.


----------



## Bao Nguyen

Tamaradarann said:


> I don't have any data.  Just like with the Stock Market uncertainty is not good for market.  I got this feeling in conversations with other HGVC timeshare owners one that said they were thinking about buying but would wait, another that said that maybe it is good that we got out of HGVC, others that said that they were thinking about selling.


More HGVC list


Bao Nguyen said:


> https://finance.yahoo.com/video/impact-millennial-travelers-timeshares-165057427.html



https://www.cnbc.com/2019/08/29/hil...-following-takeover-interest-sources-say.html


----------



## nuwermj

brp said:


> Indeed. We leave tonight for one of these in NYC. Great deal for a NYC stay and worth the 15-30 minutes that the presentation will last, plus the 200 ER dollars



At Diamond the requirement is 2 hours (and no ER dollars): 
"Presentation: attendance at a timeshare sales presentation lasting 120 minutes is required."
https://www.diamondresorts.com/diamond-resorts-concert-series-terms-and-conditions


----------



## brp

nuwermj said:


> At Diamond the requirement is 2 hours (and no ER dollars):
> "Presentation: attendance at a timeshare sales presentation lasting 120 minutes is required."



The HGVC presentation lists a longer time as well. Usually pretty easy to get out early. Harder to scam ER dollars, though...

Cheers.


----------



## Ralph Sir Edward

All names with money are now on the table, as HGV has formally announced it is now "exploring strategic alternatives".

Don't count out MVC, if they can fund the bid. That would give MVC a near monopoly on the high-end timeshare market. . . .


----------



## CalGalTraveler

MVC (or Wyndham or DVC) could buy HGVC but Hilton would remove license rights. No problem re-branding the standalone properties to MVC as they are equivalent quality (Wyndham would be a bigger issue), however the HGVCs that are integrated with flagship hotels such as mid-town Manhattan, Waikoloa/Ocean Towers and HHV would present a confusing branding issue for Hilton Hotels and they would seek to either split the portfolio and keep those properties under their management, or attempt to block the entire transaction.

Given MVC is still digesting the ILG acquisition, they may not have an appetite for this. Although I prefer this scenario over Diamond, I consider it a low probability.

Compared to an MVC purchase scenario, Diamond presents less of a threat to Hilton because they are not a competing hotel brand. Diamond properties could be an additional source of licensing revenue if certain Diamond properties are renovated up to Hilton standards e.g. the Embarc/Intrawest portfolio would be an easy fit. The new entity could sell/spin off resort management contracts from lower quality, less profitable or hard to sell resorts in Diamond or HGVC to fund the upgrades and renovations for the properties they wish to keep.

Hopefully Hilton would insist that any new entity keeps current HGVC management in charge and remove the inept slimeball Diamond executives to avoid damage to the Hilton brand reputation.


----------



## Ralph Sir Edward

CalGalTraveler said:


> MVC (or Wyndham or DVC) could bid but Hilton would remove license rights. No problem re-branding the standalone properties to MVC as they are equivalent quality (Wyndham would be a bigger issue), however the HGVCs that are integrated with flagship hotels such as mid-town Manhattan, Waikoloa/Ocean Towers and HHV would present a confusing branding issue for Hilton Hotels and they would seek to either split the portfolio and keep those properties under their management, or block the entire transaction.
> 
> Under this scenario, Diamond presents less of a threat to Hilton because they are not a competing hotel brand. Diamond properties could be an additional source of licensing revenue if certain properties are renovated up to Hilton standards e.g. the Embarc portfolio would be an easy fit. Diamond could sell resort management contracts from lower quality resorts to fund the upgrades and renovations for the properties they wish to keep.



I re-read post #53 with the exact verbiage. Hilton cannot block a merger, they can only block the usage of the Hilton naming. I doubt that would stop, say, MVC. It already has a well-known name in the space, and could just re-name all the Hilton properties. . .


----------



## CalGalTraveler

OTOH...MVC may view this as a threat because HGVC + Diamond adds a sizeable competitor targeted at a similar demographic. Buying out HGVC or parts of HGVC (i.e. x hotel based properties) could eliminate or hobble that threat.

It would be good to know how significant the HGVC licensing revenue is to Hilton. This could drive their thinking. If it is significant it could drive toward a Diamond deal. Licensing would provide a nice cushion during a downturn. If it is insignificant they may not care about eliminating the non-hotel properties.


----------



## dayooper

CalGalTraveler said:


> OTOH...MVC may view this as a threat because HGVC + Diamond adds a sizeable competitor targeted at a similar demographic. Buying out HGVC or parts of HGVC (i.e. x hotel based properties) could eliminate or hobble that threat.



I would think Wyndham would want an entrance into the more upscale market and HGVC would give them that. I’m sure there is a way to keep the Hilton branding, at least on the integrated resorts. As far as MVC goes, they are announcing their integration plan with ILG in October. Already being through that mess, they now have a workable framework on how to go about integrate another system.

I want things to stay the same. After research, HGVC was the only system I thought was worth while purchasing (at least for my family’s situation). I hope things don’t change too much if/when something happens.


----------



## nuwermj

dayooper said:


> As far as MVC goes, they are announcing their integration plan with ILG in October. Already being through that mess, they now have a workable framework on how to go about integrate another system.



MVC took on quit a bit of debt in order to acquire ILG. They would have problems financing the $2.8 billion needed to acquire HGV. And if there is a bidding war the price will be much higher -- HGV has an enterprise value of $4.4 billion. I'm not sure Wyndham would be able to pull off the financing either, but I know less about their financials. I think private equity is the most likely party to win the bid -- Apollo or another firm.


----------



## CalGalTraveler

$4.4 billion is a big but not impossible pill for any PE firm to swallow. Ironically, Hilton Hotels was one of the largest leveraged buy-outs in 2007 by Blackstone at $20.2B. But that's before the hotel buildings were spun off the balance sheet. So they used those assets to secure the loans.

The strange thing about HGVC is that it is primarily a services business - the buildings are mostly owned by the TS owners, so there is not much of an asset base for loan collateral other than inventory on hand. If the new entity defaults on a loan, a lender cannot foreclose the deeds of owners.


----------



## CalGalTraveler

Here is a list of the Top Private equity firms as of 2017 (source Wikipedia)





Based on these figures if Apollo pays $4.4 billion for HGV that's almost one fifth of their capital raised in 2017. Combined with Diamond holdings ($2.2 invested) that's significant exposure in one industry. They may syndicate the buy-out with another PE firm, (perhaps Blackstone?)  to make the deal happen and to reduce their portfolio risk.

I could envision Blackstone getting involved in the deal at some point given they financed the construction of W57 and led the the Hilton buy-out in 2007 so they understand the business.

Perhaps the leaked announcement was a bluff for Apollo to prod Blackstone or Hilton Hotels to chip in to make a deal happen. i.e. Apollo is bluffing because they don't have enough capital or don't want to invest the entire capital for the reasons above to fund the buy-out so they leaked this announcement as a way to start the process of syndication and to push HGV and Hilton against the wall.

If the deal falls through, I expect that HGVC would continue to operate as they do today as a public company. HGV countered and opened the floodgates yesterday with their announcement. Let's hope the HGV stock continues to rise as suiters bid up the price!

Alternatively, Apollo is in deep trouble with Diamond and could sell parts of the portfolio. I could see Blackstone and HGV/Hilton negotiate with Apollo to buy out the nuggets (e.g. Embarc, KBC etc) from the Diamond portfolio (up to $2.2B to cover/offest the investment for Apollo) and spin off the rest.  Apollo gets an exit which frees up capital for their next deal. HGV gets more properties and locations and Hilton keeps control of their brand with a partner they trust.

_

NOTE: Private equity is not my wheelhouse so perhaps I have the financing model wrong...this is merely an opinion._


----------



## terces

Does anyone know if HGVC is bound to continue honoring membership in the Club, or do they have some weasel clauses in our agreement that would enable them to force everyone into a trust?


----------



## CalGalTraveler

terces said:


> Does anyone know if HGVC is bound to continue honoring membership in the Club, or do they have some weasel clauses in our agreement that would enable them to force everyone into a trust?



LOL to paraphrase from a famous line:

There are only two things in life that are guaranteed when you own a timeshare...your deeded week and maintenance fees!

Short answer: Although they can drastically change, it would not be good business.


----------



## nuwermj

CalGalTraveler said:


> $4.4 billion is a big but not impossible pill for any firm to swallow. Ironically, Hilton Hotels was one of the largest leveraged buy-outs in 2007 by Blackstone at $20.2B. But that's before the hotel buildings were spun off the balance sheet. So they used those assets to secure the loans.
> 
> The strange thing about HGVC is that it is primarily a services business - the buildings are mostly owned by the TS owners, so there is not much of an asset base for loan collateral other than inventory on hand. If the new entity defaults on a loan, a lender cannot foreclose the deeds of owners.



Hi CalGalTraveler. I'm not sure I understand your point. Are you suggesting that $4.4 billion is not too large of an amount for MVC or Wyndham? 

Also, I didn't mean to suggest that private equity would pay $4.4 billion. They will want to buy at a lower price and sell for a profit at the $4.4 billion valuation. I only meant to say that there is room for bidding between $2.8 billion (today's market capitalization of HGV) and $4.4 billion (today's enterprise value of the company). So something like $3 or $3.4 billion might be the final sales price. 

I'm reproducing below a summary I wrote in 2016 about the details of the Apollo DRI leveraged buyout. I can see any private equity firm doing this, but I don't see how MVC or Wyndham Destinations can do it.

"Apollo Global’s acquisition of Diamond Resorts was organized as a _“leveraged buyout”_.  Here’s how the deal worked:

"Apollo created a shell company called Dakota Parent. Four of Apollo’s investment funds own this company. Dakota Parent created a wholly owned subsidiary called Dakota Sub. Dakota Sub borrowed $2.2 billion dollars (a big chunk of it, $1.1 billion, from the four Apollo funds) and bought 100% of the DRI shares — 72.7 million shares at $30.25 each. Then DRI merged into Dakota Sub, changed the company name to Diamond Resorts International, and thereby took on all Dakota Sub’s debt. This is the way leveraged buyouts typically work. 

"Now that all is said and done, DRI is a wholly owned subsidiary of Dakota Parent. The equity in Dakota Parent is owned by the four Apollo funds. Diamond has $2.2 billion debt on which it must make interest payments. The primary lenders are the four Apollo funds. They are in for $1.1 billion, $500,000,000 at 7.75% and $600,000,000 at 10.75%. The secondary lenders are in for $800 million, and another $200 million is secured by some DRI assets (which are consumer loans).

"There are two ways Apollo makes money on this deal assuming all goes well. First, the four Apollo investment funds receive interest income out of DRI’s cash flow. They are guaranteed $103,250,000 per year. High profits or low profits, it doesn’t matter, Apollo gets paid. Further, the Apollo investment funds own a claim to all the equity growth of the company (that is all value over $2.2 billion). Thus, if they can sell the 72.7 million shares for $45 each, not an unreasonable number if all goes well, Apollo’s capital gain will be about $1 billion."


----------



## CalGalTraveler

@nuwermj Actually I wasn't referring to MVC or Wyndham. I was referring to PE firms. Will edit the post to be more specific.

Thanks for clarifying on the valuation and the Apollo/Diamond deal background. Will review. How are you getting to the $4.4 billion figure? Is the $2.8B based on today's stock price?

My point is even with an HGV sales price of $3 to 3.4 Billion, combining that with the $2.2 Billion investment in Diamond means that Apollo would have $5.2B invested. If their total funds raised as of 2017 was $24 B and that is close to what they have today, then that means they would have approx 21% of their portfolio tied up in one investment.

Anyone who invests in the stock market knows that is a lot of risk.

Apollo would have to sell or IPO the combined entity for at least $6-$7B to make this acquisition worth their risk and time. I think this is a lot of exposure to one company/industry for one PE firm and with a recession on the horizon, the coming defaults from owners, and vocal disatissfied Diamond customers who have been milked to the max. I cannot see how Apollo could get financial backers for such a risky plan - especially when there are no building assets to leverage as collateral.

Therefore I am surmising that Apollo is bluffing and they don't have the backing, or don't want to spend the incremental investment by themselves because the exposure is too high. So they are seeking creative ways to bring Blackstone/HGV/Hilton to the table to help them creatively get out of Diamond.

My understanding of PE funds is that they are not in it for the long haul so although they have juiced up short-term income to unsustainable levels, they need to position Diamond  to be sold to a buyer that foresees future income. From what I am reading from Diamond owners, this is a company that will implode at some point unless they change the way they operate to be more competitive to attract new buyers and keep the old ones.

You can see the beginnings of this implosion at Diamond because new buyer sales have dipped well below the industry average.

I hope Apollo/Diamond is bluffing and their deal falls apart. That would be the best scenario for HGV owners because HGV would continue to operate as it does today as a public company.


----------



## jd5504

This information should kill HGVC sales for a while.
While I bought from HGVC I would cut my losses and dump what I have.


----------



## jd5504

Just to clear up my post.
Any decision to lessen the quality or benefits of current HGVC ownership would result in selling off ownership.


----------



## Panina

jd5504 said:


> This information should kill HGVC sales for a while.
> While I bought from HGVC I would cut my losses and dump what I have.


Most buyers do not educate themselves when they buy a timeshare so I doubt this will hurt developer  sales right now.  

Current owners that follow what goes on such as tuggers might decide to not take a chance and dump what they have.  Buyers on the resale market that are knowledgeable might wait and see. This scenario can make resale prices go down. 

After much thinking, my worse scenario is I might not be able to sell for what I paid but probably will be able to unload my guaranteed July 4th oceanfront 2 br in Myrtle Beach as it will be wanted by someone to actually use.

My problem is I deposited my week already for 2020.  Where I can give a new owner 8400 points my actual week is not available to use until 2021 thus my dilemma.

I just don’t see Hilton wanting to sell to someone and not have their name continue.  Timeshare owners also use hotels and they can lose lots of business from those who are now pissed. 

However it falls, I always knew it could change so it is what it is.


----------



## jd5504

https://finance.yahoo.com/news/why-hilton-grand-vacations-apos-174400034.html

https://www.thestreet.com/story/136...-with-its-acquisition-of-diamond-resorts.html

https://nypost.com/2019/08/19/apollo-global-looking-to-buy-2-4b-hilton-time-share-operator/

https://www.praetorianlegal.com/is-apollo-planning-to-buy-hilton-grand-vacations/


----------



## Arimaas

So I read through a lot of these posts, and it leaves me with questions that maybe some of you can answer. I do realize most of us seem to be jumping the gun here, but my questions are, why would someone get rid of their HGVC property if this acquisition happens? Are we worried that the club will be devalued? We won't be able to book across all the properties? Our MFs will go up astronomically?

I own a 5000 2br Gold on the Blvd, which I bought just to use the points, against the wisdom of some that say "buy where you want to use". Are we worried that all I'm going to be able to do now is stay on the Blvd during Gold week, and I won't be able to use the points for the other properties (I've never ever stayed in Vegas on the 4+ HGVC reservations I've made since owning Hilton). I would be willing to bet that 99% of retail owners do not own where they want to go. Before I bought (resale) I sat through a presentation in Orlando, and the sales guy was trying to sell me whatever was in the inventory (I think was South Carolina). So I can't see them doing any major changes without pissing off 99% of retail buyers and probably a very large percentage of owners of the system who just bought whatever was available. But, maybe they don't care? I don't know.

Anyway, I just wanted to put the questions out there to the folks that are worried and are talking about dumping their units -- why? What should I be worried about?


----------



## Panina

Arimaas said:


> So I read through a lot of these posts, and it leaves me with questions that maybe some of you can answer. I do realize most of us seem to be jumping the gun here, but my questions are, why would someone get rid of their HGVC property if this acquisition happens? Are we worried that the club will be devalued? We won't be able to book across all the properties? Our MFs will go up astronomically?
> 
> I own a 5000 2br Gold on the Blvd, which I bought just to use the points, against the wisdom of some that say "buy where you want to use". Are we worried that all I'm going to be able to do now is stay on the Blvd during Gold week, and I won't be able to use the points for the other properties (I've never ever stayed in Vegas on the 4+ HGVC reservations I've made since owning Hilton). I would be willing to bet that 99% of retail owners do not own where they want to go. Before I bought (resale) I sat through a presentation in Orlando, and the sales guy was trying to sell me whatever was in the inventory (I think was South Carolina). So I can't see them doing any major changes without pissing off 99% of retail buyers and probably a very large percentage of owners of the system who just bought whatever was available. But, maybe they don't care? I don't know.
> 
> Anyway, I just wanted to put the questions out there to the folks that are worried and are talking about dumping their units -- why? What should I be worried about?


I am concerned about who would manage the properties as hgvc manages them great and keep maintenance fees in check.  I am also concerned if the rules and fees for trading change and if systems are combined that do not have the superior  level of finishes the units hgvc do, the additional members from the other system demand will diminish what I can get.


----------



## Arimaas

Panina said:


> I am concerned about who would manage the properties as hgvc manages them great and keep maintenance fees in check.  I am also concerned if the rules and fees for trading change and if systems are combined that do not have the level of units hgvc did, the additional members from the other system will diminish what I can get.



Thanks. Is it worth it to wait and see what happens, or just going to cut loses? Like I said, I bought to trade. I didn't pay much, got on the resale market and have for sure gotten value out of the system (haven't recouped my initial "investment" - but I didn't buy a TS as an investment). I just don't want it to become useless to me, and then I'm stuck with some property I can't use and stuck paying MFs on.


----------



## nuwermj

CalGalTraveler said:


> @nuwermj Actually I wasn't referring to MVC or Wyndham. I was referring to PE firms. Will edit the post to be more specific.
> 
> Thanks for clarifying on the valuation and the Apollo/Diamond deal background. Will review. How are you getting to the $4.4 billion figure? Is the $2.8B based on today's stock price?
> 
> My point is even with an HGV sales price of $3 to 3.4 Billion, combining that with the $2.2 Billion investment in Diamond means that Apollo would have $5.2B invested. If their total funds raised as of 2017 was $24 B and that is close to what they have today, then that means they would have approx 21% of their portfolio tied up in one investment.
> 
> Anyone who invests in the stock market knows that is a lot of risk.



Hi. The enterprise value ($4.4b) and the market capitalization ($2.8) were taken from the Seeking Alpha web site
https://seekingalpha.com/symbol/HGV/peers/comparison

Market cap is number of shares times price per share. Enterprise value is Market Cap plus debt minus cash. 

Apollo's private equity unit has more than $24B. Their 10K report says: "As of December 31, 2018 , we had total AUM [assets under management] of $280 billion, including approximately $193 billion in credit, $69 billion in private equity and $18 billion in real assets."


----------



## nuwermj

CalGalTraveler said:


> @nuwermj  How are you getting to the $4.4 billion figure? Is the $2.8B based on today's stock price?



Here is the Seeking Alpha page comparing HGV and VAC (aka MVC). I'm not sure why they compare with Hotel companies.


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## dayooper

One of things that crossed my mind was that By “leaking” that they were looking to buy,


Arimaas said:


> Thanks. Is it worth it to wait and see what happens, or just going to cut loses? Like I said, I bought to trade. I didn't pay much, got on the resale market and have for sure gotten value out of the system (haven't recouped my initial "investment" - but I didn't buy a TS as an investment). I just don't want it to become useless to me, and then I'm stuck with some property I can't use and stuck paying MFs on.



Eh, it’s all up to you. No matter what happens, you will still be able to trade in some exchange company.


----------



## youppi

If HGVC never sold points (only weeks with a number of points attached to them) and if they can change the number of points assigned to each resorts/units/seasons/weeks then a buyer could change it and skim owners like MVC do with enrolled weeks. Right ?
Example, at this moment a 2 bdrm platinum season in some resorts in Orlando and Hawaii is 7,000 pts but they could decide that Orlando worth less than Hawaii (it's true) and reduce Orlando to 5,000 pts to book it and also skim all owners (Orlando and Hawaii) by given them 1,000 pts less than the number of points needed to book the same unit in the Club but owners are allowed to book any weeks at their resort in their season (no points involve).
Is it a possible scenario ?


----------



## CalGalTraveler

To answer one of my prior questions. Back of the envelope it appears that HGV brand licensing is not a significant income source to HLT - about 1% to the hotel side. What is unknown is whether HLT also receives referral fees for hotel guests who are directed to timeshare presentations but let's assume it is about another 1%.  So about 2% overall (license plus hotel lead referral).

Bottom Line: *HGV brand licensing is a small component of HLT income so the impact of a change on the brand reputation will be more important than a loss or gain of license income. *Additional Diamond licenses won't move the needle. Brand impact will color how HLT views whether to keep or deny a licensing deal if HGV is acquired. 

Details:
It appears that HGV paid as much as $98 million in 2018 to license the Hilton Brand name (see fin stmt below).
Hilton hotel (HLT) annual revenue in 2018 was $8.906B

Therefore HGV license constitutes only 1.1% of HLT revenue. If Diamond could double that by licensing additional properties it would be pure profit, but would not move the needle for HLT financial results (max 1.1% of incremental HLT revenue).

Referral revenue would not increase as additional Diamond properties would not drive incremental leads via the hotel system.

The incremental license revenue Diamond could bring to HLT is small considering the brand reputation risk with Diamond/Apollo, plus hassle factor of dealing with unknown Diamond executives.


----------



## CalGalTraveler

BTW...Guess who is Chairman of the Board of Hilton Hotels (HTL)? The Pres and Chief Operating Officer of Blackstone....

This means that Blackstone holds the Hilton Brand card!


----------



## dayooper

youppi said:


> If HGVC never sold points (only weeks with a number of points attached to them) and if they can change the number of points assigned to each resorts/units/seasons/weeks then a buyer could change it and skim owners like MVC do with enrolled weeks. Right ?
> Example, at this moment a 2 bdrm platinum season in some resorts in Orlando and Hawaii is 7,000 pts but they could decide that Orlando worth less than Hawaii (it's true) and reduce Orlando to 5,000 pts to book it and also skim all owners (Orlando and Hawaii) by given them 1,000 pts less than the number of points needed to book the same unit in the Club but owners are allowed to book any weeks at their resort in their season (no points involve).
> Is it a possible scenario ?



Anything is possible, but many of the higher demand places already have a higher point total. There are some places, like Myrtle Beach and Hilton Head that have a progressive point system. Ocean view 1 and 2 bedrooms have the standard 4800 and 7000 point totals, but the ocean front rooms are more. To even get a 3 bedroom ant Ocean 22, it’s the plus (9600 points vs 8400 in a normal 3 bedroom). Ocean Enclave is even more stark in its differences. A true ocean from 2 bedroom unit is 18,000 points. Most of the Oahu resorts have much higher totals too. The new Chicago resort has 1 bedrooms at 7200 points. The reported points at Barbados is out of reach for most and the thought process is Maui will similar.

Maybe it’s their downfall, but HGVC treats their owners very well. It’s the reason I bought here instead of any other system. If you start messing with the system, making it less flexible and start jacking up fees and MF’s, I will take my business elsewhere. If the system loses its flexibility, level of service and value, why should I limit myself to the few resorts HGVC has. I would look for mandatory Vistana or a nice Marriott that gets priory trading in II. The HGVC system is great. The main reason the stock fell was they ran out of high end inventory to sell. That tells me right there that the system can and does make money.


----------



## GT75

youppi said:


> If HGVC never sold points (only weeks with a number of points attached to them) and if they can change the number of points assigned to each resorts/units/seasons/weeks then a buyer could change it and skim owners like MVC do with enrolled weeks. Right ?



You are correct that HGVC sold deeded property, but there were also specific points attached to that property.     On the resale market, we also got an estoppel which had the allotted points for that week.    My point is that I think we all have signed documents which lists the points for our weeks.    I don't see how that can be changed on what we own.   

Now, the rules can be changed.   I am pretty sure that there is a statement to that effect in the rules.


----------



## CalGalTraveler

I am going to wait until the smoke clears. Now that I am confident that Blackstone and HLT are in HGV's corner, there is going to be some interesting negotiation and gamesmanship. There is a high probability that HGV could end up in same or better position.

I see five scenarios (not in rank order):

1) Apollo sells part or all of Diamond to Blackstone/HGV. HGV is the management company as before. (We get some new properties on Maui, Whistler and Palm Desert etc. Diamond owners win too.)

2) A deal fails to materialize so nothing changes.

3) Blackstone and/or HLT take a controlling position in HGV to prevent a takeover. (Apollo/Diamond lose out.)

4) Apollo/Diamond acquire or merge with HGV (Apollo owns HGV)

5) Wildcard. MVC or an Asian Chain buys out HGV


#1 ,#2, #3 are good scenarios. No reason to exit.

If #4 happens we will sell our VOIs and move our business to MVC/Vistana. However, I would be surprised if HLT would risk their brand reputation on players with shaky reputation.*

*# 5 Wildcard: *Since HGV has a large Japanese and Asian customer base, *could an Asian hotel, developer, or timeshare company be a buyer?* e.g.

Anantara Vacation Club https://www.anantara.com/en/vacation-club-phuket
QVI Club http://www.qviclub.com/ (They claim to have 1000 resorts/700,000  members)
Karma Resorts (Karma Royal Group) https://karmagroup.com/
Chinese company that is building the Atlantis Hotel at Ko Olina on Oahu?

Others?

*HGV has stated that they are increasingly co-locating new properties in Hilton Hotels. This must have a synergistic effect for HLT franchisees and owned properties. MF on a few floors provides a consistent annuity stream to the hotel property owners plus HGV owners eat at the restaurants and bars at the hotel enabling incremental revenue. The on-site timeshares may also use the same hotel housekeeping resources providing operational efficiencies especially when occupancy is low on the hotel side. Lastly, HGV owners are loyal Hilton Hotel users and promote the brand.

I doubt that HLT/Blackstone would risk having Apollo/Diamond or other unknown management team co-located with the company jewels. Because of this risk to the brand, I don't believe HLT/Blackstone can afford to sit on the sidelines. Besides, they hold the Hilton brand card which could deny Apollo from gaining any value out of this deal for a successful exit.

[My apologies for the long post. Thinking aloud. Would love other perspectives.]


----------



## escanoe

dayooper said:


> One of things that crossed my mind was that By “leaking” that they were looking to buy



If I thought we were waaaay ahead of ourselves yesterday ..... it’s really too much now.

We have no idea who the original source was for the NY Post story. I think it was almost as likely to have been HGV as Apollo. I get some of the fear here. And there are certainly investors that make stupid decisions. However if anyone buys HGV and manages the properties in a poor manor they will do nothing but lose value. I worry some about them messing up the points system we like but if they alienate people that like that system they will lose their best customers ... those that already own.

I have NOOOOO idea who will buy it .... but the Hilton brand is likely a lot of HGV’s value. Marriott and Wyndham seem to be very unlikely purchasers to me.


----------



## sjsharkie

CalGalTraveler said:


> I am going to wait until the smoke clears. Now that I am confident that Blackstone and HLT are in HGV's corner, there is going to be some interesting negotiation and gamesmanship. There is a high probability that HGV could end up in a better position.
> 
> I see five scenarios (not in rank order):
> 
> 1) Apollo sells part or all of Diamond to Blackstone/HGV. HGV is the management company as before. (We get some new properties on Maui, Whistler and Palm Desert etc. Diamond owners win too.)
> 
> 2) A deal fails to materialize so nothing changes.
> 
> 3) Blackstone and/or HLT take a controlling position in HGV to prevent a takeover. (Apollo/Diamond lose out.)
> 
> 4) Apollo/Diamond acquire or merge with HGV (Apollo owns the deal)
> 
> 5) Wildcard. MVC or an Asian Chain buys out HGV
> 
> 
> #1 ,#2, #3 are good scenarios. No reason to exit.
> 
> If #4 happens we will sell our VOIs and move our business to MVC/Vistana. I would be surprised if HLT would risk their brand reputation on players with shaky reputation.*
> 
> *# 5 Wildcard: *Since HGV has a large Japanese and Asian customer base, *could an Asian Hotel or Timeshare company be a buyer?* What about the Chinese company that is building the Atlantis Hotel at Ko Olina on Oahu?


I don't see #1 or #3 -- that's wishful thinking IMHO.  #2/#4/#5 are the only ones with logical possibility based on the news we have.

1.  I don't see #1 happening -- When Apollo acquired DRI three years ago, DRI was looking for a suitor to buy them -- there has been no news that HGV has been looking to expand/acquire.  Plus these really are two different classes of timeshares, and I don't see them meshing well together with Diamond's aggressive sales tactics, high maintenance fees, etc.  Plus will Apollo have recouped all of its acquisition costs this quickly to entice a profitable sale?  Can't see this happening on the near-term horizon.

2.  #2 - yes, this is possible.  Rumors are just rumors, though the interest is clearly there.

3.  #3 -- Doubt it again per #1 above.  They will only take it over if it is extremely profitable and the price is right.  In fact, I think it is more likely that someone at HGV leaked the news to push up the price for negotiation purposes.

4.  #4 -- Yes, clearly possible given the news though the leak has made it more expensive of a takeover.

5.  #5 -- Remember that Apollo also was looking to acquire ILG before MVC got it.  Possible that there is a bidding war for HGV.

Good post though.  I am debating whether to follow through on purchasing HGV at this point with so much in the air.  I fear a Apollo/DRI acquisition might impose some unfavorable changes for owners.  DRI has 1.5x revenue than HGV if you are looking at 2018 FY numbers.

-ryan


----------



## nuwermj

CalGalTraveler said:


> Now that I am confident that Blackstone and HLT are in HGV's corner, there is going to be some interesting negotiation and gamesmanship. There is a high probability that HGV could end up in a better position.



Why do you think Blackstone is different and better than Apollo? They are both investment firms seeking financial rewards for their customers. They both face the same market/industry opportunities and limitations. If HGV is materially undervalued why does Blackstone have a better plan than Apollo to add value to HGV?


----------



## Jason245

I think there are a few possibilities of what will happen and we have about a 50/50 chance that HGVC stays the way it is with different (possibly private) owners.

I also think there is a 1 in 100 chance that DVC buys HGVC (Dream I have that will probably never materialize).

Only time will tell.

But do not for 1 second think that anyone is in the corner of the owners. The only thing blackstone or Hilton care about is $$$ for their shareholders and owners.


----------



## CalGalTraveler

nuwermj said:


> Why do you think Blackstone is different and better than Apollo? They are both investment firms seeking financial rewards for their customers. They both face the same market/industry opportunities and limitations. If HGV is materially undervalued why does Blackstone have a better plan than Apollo to add value to HGV?



Blackstone is different than Apollo in several ways:


Blackstone and Apollo actually face different market/industry opportunities. As you said, a key reason Apollo sees value in HGV is because they need HGV brand reputation to successfully exit from their Diamond investment. Right now they are stuck. The rumor of a Diamond IPO came out on business channels more than a year ago. If Apollo did not own Diamond, HGV would not be of interest.
Blackstone owned HGV as part of Hilton and spun out HGV and the hotel buildings to remove the buildings off the hotel balance sheet. Blackstone was good to HGV and supported investments to build W57 and took a stake in Elara. HGV is a good system with strong management and happy customers today thanks to Blackstone who had a hand with selecting current HGV management and funding their expansion. Blackstone success with Hilton has been hailed as a success. What has Apollo done to create value beyond juicing up the financial statements?
Under Apollo's watch Diamond management sucked all the upside value out of the company to juice the company for sale. They traded long term value for short term gain. Unhappy customers and an upside down value prop where MF are more expensive than equivalent hotel is not a formula for a good forward looking investment. This happened under Apollo.
Blackstone understands that HGV is part of the HTL ecosystem. Although the Chairman of HTL is the pres of Blackstone and likely owns personal holdings. It does not appear that Blackstone still owns a stake in HTL. However he has rallying power with not only Blackstone but large international franchisee development investors.


----------



## Sapper

I’ll throw my two cents in regarding the HGVC speculation. Mainly because it’s fun to think about. 

The interested party is Blackstone. Why?  The two entities have a history of shared projects. The two share management personnel. Last, Blackstone taking HGVC private creates more money for Blackstone and solves a problem for both entities. 

The first two items have been touched on up thread.  I’ll focus on the third point. Over simplifying, Blackstone has real estate interests it wants to divest and HGVC needs more units (specifically higher end) to sell. Blackstone could sell the interests to a third party, or they can buy HGVC and vertically integrate to capture a higher net profit.   This is the first way they make money from the deal. The second way Blackstone will profit is by taking HGVC public again after it is a significantly larger entity able to better compete with the new MVC. The shared management makes the deal lower risk for Blackstone because HGVC is a known entity. There are no surprises like what the MVC CEO alluded to during the last conference call to investors re the Interval purchase. More profit at lower risk, that’s a private equity groups happy dream. 

So why the “leak” regarding Apollo?  It’s spin. HGVC share holders will be less likely to question the deal if they believe there was some healthy competition giving them a better deal. The pop in share price reinforces this belief. Regulators will also be less likely to become involved if the deal does not appear to be some back room deal cooked up by the Blackstone/HGVC management. Why would Blackstone want to pay more per share if they could pay less?  Because a few dollars a share is a small price to pay to get investors and regulators on board with the deal to make it go quickly and smoothly. 

What does this mean for us, the HGVC timeshare users?  Since the HGVC management will be the same folks, no change in service quality. Because of the properties Blackstone wants to divest, and HGVC needs, new locations and more inventory. Because of the specific type of inventory HGVC needs to sell, these properties will be higher end with higher points requirements. Probably more international locations, specifically in Asia. 

I think this could be a win win. Strangely optimistic coming from me. Haha.


----------



## CalGalTraveler

Interesting perspective @Sapper on Blackstone. Your statements support the fact that HGV has been increasingly converting Hilton hotel floors and wings at Hilton resorts to HGV (District, Mid-Town, Cabo, HHV, Ocean Tower, Chicago). This implies that Blackstone and their development franchisees of hotels benefit from a symbiotic relationship with HGV to get more ROI and consistent revenue annuity stream (aka MF vs. occupancy rates which fluctuate) out of HTL real estate holdings.

Speculation is fun, but trying to understand future scenarios helps me to understand when to hold 'em and when to fold 'em. Right now I will hold 'em because HGV stands a good chance of doing the same or better out of this because of their longstanding and symbiotic relationships with HTL and Blackstone.


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## nuwermj

CalGalTraveler said:


> Blackstone is different than Apollo in several ways:



1. Yes, I emphases these points as part of a dialog in this thread which I thought was being ignored. But they are not 100% of the story. HGV is also materially undervalued.

2. Apollo funded the acquisition of a hotel to be converted into a timeshare in Hawaii;
They also acquired Capital Vacations, a privately held timeshare and resort management company
Also take a look at how Great Wolf Lodge was treated under Apollo's management.

3. Two of Apollo's main goals for Diamond are to (1) the change Diamond's inventory acquisition model and (2) widen its market for first time buyers. Whether or not one agrees with these goal, I think they are more than short-short term juicings.

4. I think Apollo managers understand this too. They managed Harrahs for many years.


----------



## Finsadbel

I also think there is a 1 in 100 chance that DVC buys HGVC (Dream I have that will probably never materialize).

We share this dream....... however, VERY unlikely.


----------



## CalGalTraveler

nuwermj said:


> 1. Yes, I emphases these points as part of a dialog in this thread which I thought was being ignored. But they are not 100% of the story. HGV is also materially undervalued.



Actually much of these observations are from your post and other Diamond owner posts. Not ignored. Much appreciated. 

I knew nothing and did not have an opinion about Apollo or Diamond before this thread.

I am not convinced that HGV alone is undervalued because Blackstone, MVC etc. would have jumped on it long ago. I believe the value to Diamond is high because as you stated, they need the goodwill of the brand license and the hotel lead flow that HGV offers to maximize the investment return for the portfolio they acquired. They are odd man out in a TS industry with few hotel choices remaining.

On top of that it sounds like Diamond could benefit from HGV infrastructure and processes as a reasonably well run system with a customer service focus. Although IT is not perfect, there have been many improvements over the past 2 years and we don't encounter the kind of silo issues that were expressed earlier by Diamond posters.


----------



## dioxide45

CalGalTraveler said:


> October will be an interesting month. Marriott announces their plans for their Vistana program integration on Oct 4.





dayooper said:


> As far as MVC goes, they are announcing their integration plan with ILG in October.


I am not sure why people keep saying Marriott is announcing their integration plans or a combined program in October. In October they will be holding an investor day/event. They may or may not mention anything specific about the plans for an integrated product. I suspect there will be little details about how a combined program will work or function as it pertains to owners.


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## nuwermj

CalGalTraveler said:


> Actually much of these observations are from your post and other Diamond owner posts. Not ignored. Much appreciated.




When I first raised the points on page three of this thread, it seemed to me they had been ignored (maybe I should have used the word "overlooked") on pages 1 and 2. Sorry for causing confusion with my wording in post #263.


----------



## dayooper

nuwermj said:


> When I first raised the points on page three of this thread, it seemed to me they had been ignored (maybe I should have used the word "overlooked") on pages 1 and 3. Sorry for causing confusion with my wording in post #263.



No, I don’t think they were ignored, but I do think they put on the back burner while new ideas were brought up. I think there is so little information that speculation and theories are running rampant than people are discussing anything new people bring up. It also doesn’t help that most of us here in HGVC are very leery of DRI and their practices. While I think that Apollo/DRI absolutely is a player, Blackstone has just as good or a greater chance to purchase.


----------



## JohnPaul

CalGalTraveler said:


> @brp Yep FUD is a great way to get out of a preso especially now that it is documented in the press. Let us know if you learn anything new about the NYC properties including the Quin and whether the Hilton Cabo property will be bHC.



FWIW we just had an NYC presentation.  Our guy really poo poo-ed The Quin stating that MF would be very high because it is an old building.  However, my guess is he downplayed it just because they can't sell it yet.

They also continuously bad mouth The Residences - perhaps since we briefly owned there and returned to W 57th St so unlikely to buy there.

The big push was for The Central on Fifth.  (Really between Madison and Fifth)  They would give us $50,000 equity for our resale week toward a purchase at The Central.  9300 points vs 5250 for only about $400 more MF (and of course about $25,000 buy in with our great trade).

BTW daily maid service and no short stay charges at The Central.

We did walk by The Central.  It is narrower than W 57th St and the neighborhood isn't yet as upscale as W 57th St but it will still be a good location.


----------



## nuwermj

dayooper said:


> No, I don’t think they were ignored, but I do think they put on the back burner while new ideas were brought up. I think there is so little information that speculation and theories are running rampant than people are discussing anything new people bring up. It also doesn’t help that most of us here in HGVC are very leery of DRI and their practices. While I think that Apollo/DRI absolutely is a player, Blackstone has just as good or a greater chance to purchase.



I think I understand. But my question is why some in this thread think Blackstone is a better owner of HGV than Apollo would be. 

And second I don't believe I said "the only reason Apollo sees value in HGV is because they need HGV brand reputation to successfully exit from their Diamond investment." My view is: "one reason Apollo sees value in HGV is ..."


----------



## dayooper

nuwermj said:


> I think I understand. But my question is why some in this thread think Blackstone is a better owner of HGV than Apollo would be.
> 
> And second I don't believe I said "the only reason Apollo sees value in HGV is because they need HGV brand reputation to successfully exit from their Diamond investment." My view is: "one reason Apollo sees value in HGV is ..."



At least for me, it’s the devil I know. Blackstone has been intertwined with both Hilton and HGVC for quite awhile, the assumption is that things will continue as they were. Blackstone has a presence on HGVC’s BoD for some time and, with Blackstone owning several HGVC resorts, it seems like they have a vested interest to grow HGVC with great customer/owner experience.

With Apollo, the big fear is they will merge HGVC with DRI and run it like DRI has been (maybe not Apollo’s fault). The vested interest with Apollo is with DRI, not HGVC, so I’m afraid us HGVC owners will have our ownership devalued to the point they aren’t worth using. Maybe a bit over the cliff, but DRI’s reputation doesn’t help one bit.

I appreciate the positive but grounded perspective you brought here and hope you keep contributing to this forum while this is all sorted out. I have my preference (nothing changes) but know anything is possible. You seem to think/speculate that Apollo wants their investment run more like HGVC and, if something with Apollo happens, hopefully you are correct.


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## Sapper

CalGalTraveler said:


> Interesting perspective @Sapper on Blackstone. Your statements support the fact that HGV has been increasingly converting Hilton hotel floors and wings at Hilton resorts to HGV (District, Mid-Town, Cabo, HHV, Ocean Tower, Chicago). This implies that Blackstone and their development franchisees of hotels benefit from a symbiotic relationship with HGV to get more ROI and consistent revenue annuity stream (aka MF vs. occupancy rates which fluctuate) out of HTL real estate holdings.
> 
> Speculation is fun, but trying to understand future scenarios helps me to understand when to hold 'em and when to fold 'em. Right now I will hold 'em because HGV stands a good chance of doing the same or better out of this because of their longstanding and symbiotic relationships with HTL and Blackstone.



Well stated. 

Something else I just thought of. The Hilton name. Hilton hotels will have no problem continuing the license agreement with Blackstone. Hilton may not continue the license agreement with anyone else whether due to a competing hotel brand (MVC) or a quality / image problem (Diamond). 

Re the speculation of a Disney purchase. Though it’s nice to dream about it, HGVC does not fit Disney’s business model of utilizing timeshares to drive people to their parks (with the exception of the Aulani).


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## Jason245

Sapper said:


> Well stated.
> 
> Something else I just thought of. The Hilton name. Hilton hotels will have no problem continuing the license agreement with Blackstone. Hilton may not continue the license agreement with anyone else whether due to a competing hotel brand (MVC) or a quality / image problem (Diamond).
> 
> Re the speculation of a Disney purchase. Though it’s nice to dream about it, HGVC does not fit Disney’s business model of utilizing timeshares to drive people to their parks (with the exception of the Aulani).


Other than Disney buying..as an owner I am better off with them staying independent from any other timeshare org unless Hgvc survives the takeover as the main company. 

Most anything else will more likely than not hurt me.. just ask club intrawest owners.   


Sent from my SM-N950U using Tapatalk


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## dioxide45

Jason245 said:


> Other than Disney buying..as an owner I am better off with them staying independent from any other timeshare org unless Hgvc survives the takeover as the main company.
> 
> Most anything else will more likely than not hurt me.. just ask club intrawest owners.
> 
> 
> Sent from my SM-N950U using Tapatalk


I would have to agree. A buyout by a private equity investor doesn't usually go well. Their main goal is to extract value. Whether it be to increase the value of the company or sell off certain assets. With the plunge in the stock price after their earnings call, I think they saw that HGVC was undervalued, so perhaps thinking they could pick it up for a bargain, increase its value and then spin it back off for a profit. If they are trying to use it try to increase the value and image of Diamond, I think it may backfire and pull HGVC down instead.


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## GT75

Jason245 said:


> Most anything else will more likely than not hurt me.. just ask club intrawest owners.



Please explain.    I am not familiar with feedback from intrawest owners after they were bought by DRI.


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## CalGalTraveler

Jason245 said:


> But do not for 1 second think that anyone is in the corner of the owners. The only thing blackstone or Hilton care about is $$$ for their shareholders and owners.



Sad but true. Who is in our corner?

@dayooper nailed it when he said "It is the devil we know." Blackstone is more aligned with our interests than Diamond. Jury is out on Blackstone because they have been involved before and materially improved the company. But @Jason245 point is well taken.

So far all I can find on Apollo is that they bought Great Wolf water parks, raised prices, added a few locations via acquisition and then sold. Not rocket science. Raising prices is not value add for customers unless they materially upgraded the properties or business model. But perhaps there is more to this story.


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## Jason245

GT75 said:


> Please explain.    I am not familiar with feedback from intrawest owners after they were bought by DRI.


You can look on the dri part of this forum.. but I remember a lot of unhappy customers fleeing for the hills.

I also remember resale values falling alot.. 

Sent from my SM-N950U using Tapatalk


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## dougp26364

Jason245 said:


> You can look on the dri part of this forum.. but I remember a lot of unhappy customers fleeing for the hills.
> 
> I also remember resale values falling alot..
> 
> Sent from my SM-N950U using Tapatalk



I fled DRI under Cloobeck when THE Club fees we paid increased from $135/year to $545/year with NO value added. That on top of MF’s approx those of Marriott but with DRI putting $50 into reserves while Marriott was putting $245 into reserves. 

It was my understanding Apollo stabilized some of these fee increase, in some cases lowering fees. 

One article I read (older) was the speculation Apollo was returning to its “junk bond” roots when it purchased DRI. Perhaps that article is right since they’ve hung into DRI instead of selling it off at a profit.


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## goaliedave

nothing would change if HGVC was bought by Apollo or DR. DR bought highend Intrawest and left them as a separate (renamed Embarc) brand. We DR owners have no new access to Embarc.

I also own at Sheraton VC which has gone thru a few buyouts. New owners haven't changed anything except the name. We haven't been integrated forcibly into any new ts or Marriott.

my 2c

Sent from my SM-J327W using Tapatalk


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## dayooper

goaliedave said:


> nothing would change if HGVC was bought by Apollo or DR. DR bought highend Intrawest and left them as a separate (renamed Embarc) brand. We DR owners have no new access to Embarc.
> 
> I also own at Sheraton VC which has gone thru a few buyouts. New owners haven't changed anything except the name. We haven't been integrated forcibly into any new ts or Marriott.
> 
> my 2c
> 
> Sent from my SM-J327W using Tapatalk



Have the MF ‘s and fees substantially increased or have they been somewhat normal (HGVC has been around 4%). It’s good to know the systems are remaining the same. It’s my biggest fear is whomever purchases the system will make substantial changes.


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## Bao Nguyen

dayooper said:


> Have the MF ‘s and fees substantially increased or have they been somewhat normal (HGVC has been around 4%). It’s good to know the systems are remaining the same. It’s my biggest fear is whomever purchases the system will make substantial changes.


I have same concerned about MF increased.
https://tugbbs.com/forums/index.php?threads/significant-mf-increase-at-polo-towers.294601/

Harder to exchange from mainland to Hawaii . Diamond sell extra costs for Hawaii . HGVC is easy to exchange internal.


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## dougp26364

dayooper said:


> Have the MF ‘s and fees substantially increased or have they been somewhat normal (HGVC has been around 4%). It’s good to know the systems are remaining the same. It’s my biggest fear is whomever purchases the system will make substantial changes.



Generally speaking, mergers present new options while leaving existing options in place. In this case, I doubt anything substantial would change for HGVC except they might be presented the option to join DRI’s THE Club with the opportunity to book all of those resorts. For some this would be a welcome option as there has been pent up demand for Maui. For us, we’re content to use HGVC for Vegas and maybe occasionally the Big Island of Hawaii.


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## dayooper

dougp26364 said:


> Generally speaking, mergers present new options while leaving existing options in place. In this case, I doubt anything substantial would change for HGVC except they might be presented the option to join DRI’s THE Club with the opportunity to book all of those resorts. For some this would be a welcome option as there has been pent up demand for Maui. For us, we’re content to use HGVC for Vegas and maybe occasionally the Big Island of Hawaii.



As long as my ownership stays close to where it is now, than I will be happy.


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## goaliedave

dayooper said:


> Have the MF ‘s and fees substantially increased or have they been somewhat normal (HGVC has been around 4%). It’s good to know the systems are remaining the same. It’s my biggest fear is whomever purchases the system will make substantial changes.


everything is normal, same as if there was no purchase. when PepsiCo purchases a company they don't change it. maybe they resell it, but I dont know if any issues at hgvc so why would they change it?

Sent from my SM-J327W using Tapatalk


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## escanoe

dougp26364 said:


> Generally speaking, mergers present new options while leaving existing options in place. In this case, I doubt anything substantial would change for HGVC except they might be presented the option to join DRI’s THE Club with the opportunity to book all of those resorts. For some this would be a welcome option as there has been pent up demand for Maui. For us, we’re content to use HGVC for Vegas and maybe occasionally the Big Island of Hawaii.



I am mostly hoping to avoid bad things as merger talk continues. One thing DRI has that I would not mind, however, is access to more Virginia Beach properties. I can get good enough in VB trading through RCI that I am unlikely to upgrade anything at developer prices, though.


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## GT75

Jason245 said:


> You can look on the dri part of this forum.. but I remember a lot of unhappy customers fleeing for the hills.



Thanks for the information.


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## nuwermj

dayooper said:


> Have the MF ‘s and fees substantially increased or have they been somewhat normal (HGVC has been around 4%). It’s good to know the systems are remaining the same. It’s my biggest fear is whomever purchases the system will make substantial changes.



When Diamond acquired Club Intrawest (now Embarc) they had every intention of merging them into Club Diamond. There's good of evidence about this plan if anyone would like it. But Embarc members organized effective pushback and Diamond changed it's plans. This pushback is, in my view, the only reason fees haven't increased much more. Diamond has "kicked the can down the road" by under-funding capital reserves as a way to redirect more income to it's corporate overhead. So, when the resorts need upgrades a crisis of some kind will arise.  

I don't agree that nothing changed for Embarc members. Diamond has created (or modified) a tiered benefit system that is all but mandatory for new buyers and members wishing to add points. Diamond also aggressively rents inventory and members claim availability under Diamond is more difficulty to find. 

On a slightly different tangent: Who ever ends up with HGV, would it not be true that a trust fund based points system will be introduced?


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## dioxide45

nuwermj said:


> On a slightly different tangent: Who ever ends up with HGV, would it not be true that a trust fund based points system will be introduced?


I would think one would be introduced no matter what. Their investors are asking why they don't have one yet when all the other big players are in that game. Sale or no sale, I suspect the next property to be trust based and perhaps a push to buyback intervals to put in the trust and upsell people in to pure points. Much like Vistana is doing today.


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## terces

dioxide45 said:


> I would think one would be introduced no matter what. Their investors are asking why they don't have one yet when all the other big players are in that game. Sale or no sale, I suspect the next property to be trust based and perhaps a push to buyback intervals to put in the trust and upsell people in to pure points. Much like Vistana is doing today.


I asked the question earlier in the thread if there is anything in the legalese that would bind HGVC to continue the Club? I should read the documents again, but do they have a way out of offering the Club?


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## CalGalTraveler

nuwermj said:


> On a slightly different tangent: Who ever ends up with HGV, would it not be true that a trust fund based points system will be introduced?



Really appreciate these perspectives on Diamond.

To answer your question on HGV trust: It's quite possible. HGV is different (see below), however they may be forced by Wall St. in order to have inventory available to sell and avoid a revenue hiccup similar to this past quarter.

HGV has a large Asian (especially Japanese) customer base. According to the HGV CEO, Asians don't trust and won't buy trust points portfolios. (IMO for good reason - I don't either)

Historically, MVC didn't have a points program for trading prior to introducing their DC trust in 2010. So the value prop of using points to book shorter/longer stays instantly online instead weekly OGS via II was strong. Although DC has a higher MF, the system allows owners to rent or rent out their points, so owning a basic level of points and renting could make sense since their trust is now more robust.

With this value proposition it has been 9 years and only 60% of the deeded weeks owners have enrolled in the system because they charge a fee.  MVC has not resorted to reported strong-arm Diamond-like tactics because they are viewing this long-term and know that customer satisfaction and repeat business is important in the timeshare world. HGV gets this too.

Vistana points are tied to deeds automatically similar to HGVC. Because Vistana owners already has a points system, the Vistana Flex Trust hasn't been popular. Key difference is you can book at 12 months for the trust inventory for a collection of properties instead of just your home resort (i.e. Westin, Sheraton, Mexico) instead of 8 for their "club reservations." The problem is you are limited to the weeks that are in the trust which are mainly low value mud weeks from defaults, ROFR and none of the OF/OV units for Kaanapali.

Vistana was luring people with Hawaii (IV only), or a limited number of ski weeks and were asking owners to pay $10 - $30k to turn in their unit for a similar points with a higher MF and limited inventory!  In addition Flex points have zero resale value because resale buyers only can book in their limited home resort trust and don't have access to StarOptions (system-wide Club) inventory.  Certain Vistana mandatory deeded legacy weeks i.e. WKORV north and south, WSJ (specific building), SVV (Bella, Key West), and WKV give resale buyers full access to their Staroption points program in their CC&Rs. Why would any rational person give up that value (and pay money for) a flex week with uncertain inventory and zero resale value that would be difficult to sell?


----------



## dioxide45

CalGalTraveler said:


> Why would any rational person give up that value (and pay money for) a flex week with uncertain inventory and zero resale value that would be difficult to sell?


Mainly because they aren't rational or don't have all the information. Many people have no idea about the resale market or what a mandatory week even is. People are indeed turning their mandatory weeks in to Vistana and buying new Flex. People have even turned in WKORV and bought Nanea. A similar trust product, but at least it has Hawaii 8-12 months out at a specific resort.


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## nuwermj

nuwermj said:


> On a slightly different tangent: Who ever ends up with HGV, would it not be true that a trust fund based points system will be introduced?





CalGalTraveler said:


> To answer your question on HGV trust: It's quite possible.



Thanks for the feedback. The question was only slightly genuine, it was mainly rhetorical. If Blackstone takes HGV private it will be to protect it from investors so that substantial changes (like a trust fund point system) can be made. I don't see Blackstone getting involved and just letting things continue as they are.


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## GT75

I know there are approximately 22K Embarc members with 9 Embarc resorts.    How many total diamond members are there?


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## nuwermj

GT75 said:


> I know there are approximately 22K Embarc members with 9 Embarc resorts.    How many total diamond members are there?



In their press propaganda, Diamond claims "more than 400,000 members". They count anyone with a relationship to the company. Diamond manages about 110 resorts. On average about half the deeds at these resorts are owned by individuals and the rest are in the various trust funds (there are nine trust funds). Owners in the trust funds are members of Diamond's Club and some deeded owners are members. However, many deeded owners have no relationship with the Club. They own their use-rights (fixed week or flex) and use RCI or II for exchanges. All points and deeded owners are included in Diamond's 400k number. The last time I saw figures for Club membership was the beginning of 2018. At that time the figure was about 180,000.


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## terces

nuwermj said:


> In their press propaganda, Diamond claims "more than 400,000 members". They count anyone with relationship to the company. Diamond manages about 110 resorts. On average about half the deeds at these resorts are owned by individuals and the rest are in the various trust funds (there are nine trust funds). Owners in the trust funds are members of Diamond's Club and a some deeded owners are members. However, many deeded owners have no relationship with the Club. They own their use-rights (fixed week or flex) and use RCI or II for exchanges. All points and deeded owners are included in Diamond's 400k number. The last time I saw figures for Club membership was the beginning of 2018. At that time the figure was about 180,000.


Interesting stats.   The HGVC Las Vegas Boulevard has 714 units x 52 weeks = 37,000 weeks total, potential members could be much more than this considering eoy - lets just guess a total of +50,000 from one resort, vs Diamonds 400,000 in 110 resorts...…?


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## terces

Wondering outloud why Bershire Hathaway doesn't buy Hilton and HGVC.  They like to buy entire companies so they can get their hands on the cash flow AND leave management in place.


----------



## Bao Nguyen

terces said:


> Interesting stats.   The HGVC Las Vegas Boulevard has 714 units x 52 weeks = 37,000 weeks total, potential members could be much more than this considering eoy - lets just guess a total of +50,000 from one resort, vs Diamonds 400,000 in 110 resorts...…?


Diamond all small resorts. They just bought Modern Honolulu about 350 rooms. Waikiki and big island all HGVC mega resorts.


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## GT75

terces said:


> Interesting stats.   The HGVC Las Vegas Boulevard has 714 units x 52 weeks = 37,000 weeks total, potential members could be much more than this considering eoy - lets just guess a total of +50,000 from one resort, vs Diamonds 400,000 in 110 resorts...…?



I would estimate < 30K members for Boulevard then because many members own more than 1 property.

I think that HGV has ~300K members.   Of that 20% are Japanese.   Now, I would think that most members are part of the club but I know that you don't need to be in some of the affiliates (I haven't seen any statistics on the number).


----------



## Sandy VDH

Elara has 1201 units X 52, that is over 62K just for Elara.  Yes again, someone can own more than 1 unit.  

I also assume the 1201 listed is the HGVC number of units, EXCLUDING the Westgate inventory.


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## CalGalTraveler

FWIW...Wikipedia cites 260,000 members for HGVC. No listing for Diamond. Note: Page also contains warnings as to accuracy because these are figures cited on their websites but not corroborated. Privately held like Diamond could be grossly inaccurate because they are not under SEC scrutiny.


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## CalGalTraveler

Below is a view of the industry from MVCs presentation in 2017 announcing the ILG acquisition. Prob more accurate because of SEC. Diamond not listed because it's private.


----------



## CalGalTraveler

It appears that Blackstone is tightly entwined with HGV beyond the HTL relationship. It has a 75% ownership stake in the Elara building, with HGV owning 25%. It seems Westgate is totally out of the mix except for legacy weeks in Elara. (I know this is old news but adds to this context.)

https://investors.hgv.com/press-releases/2017/07-19-2017-211721311

With this, it appears that Blackstone already owns an indirect stake in HGV plus possibly a few other HGV properties and could have considerable control over the Apollo bid for HGV in addition to the HTL. For example, the HGV annual 2018 report lists Elara as "Fee for Service." Sunrise, Grand Islander and a few others also are "Fee-for-Service."

Does that mean that Blackstone or other developers with Fee-For-Service model resorts could potentially vote (along with owners) to remove building management from HGV if they don't want Apollo/Diamond to take control since they control the HOAs?

https://tugbbs.com/forums/index.php...liated-information.254931/page-3#post-2322116

Realistically, because of the complexity of the relationships, spinning off the entire business may not be feasible so Blackstone/HTL may wish to keep certain properties in HGV under the Hilton license such as Elara, MidTown, HHV, but spin off management of under-performing or non strategic properties in the portfolio. However, taking over HGV "dogs without a license" would not achieve Apollo's objective to gain Hilton brand legitimacy and lead flow for a successful IPO.

Such misalignment of objectives is where a deal could fall apart unless they come up with a creative structure. Key question is how much control would Blackstone allow Apollo to have given they will continue to have significant stakes in the ecosystem which includes Elara and Hilton Hotels?

Bottom Line: Blackstone/HGV/HTL will need to bless this deal in order to make it work because they hold several poison pill options to destroy value for Apollo/Diamond e.g.

1) Withdrawing the Hilton Brand License
2) Control of building HOAs such as Elara that could withdraw from a Diamond/Apollo takeover.

Developers of other Fee-for-Service buildings such as Grand Islander in HHV could also present complications if those developers wish to vote out HGV management of the building if Apollo takes a stake. Not sure about "Collections" affiliates aka South Florida, Bay Club and how those relationships work.


----------



## GT75

CalGalTraveler said:


> it appears that Blackstone already owns an indirect stake in HGV plus possibly a few other HGV properties and could have considerable control over the Apollo bid for HGV in addition to the HTL.



To me, I would think Blackstone, Strand Capital Group (built Anderson Ocean Club, Ocean Oaks, Ocean 22 and Ocean Enclave), Hilton & other developers with HGV would have an issue with Apollo's bid for HGV.    I would think that these companies want to continue to profit as I am sure they have in the past.   I am sure that their options will be heard much than us HGVC owners.   I don't see how it would be in their interests if Apollo took over control.   Maybe this is all wishful thinking on my part.    At least, we are still in the speculation phase anyways.



CalGalTraveler said:


> Sunrise and a few others also are Fee-for-Service.


   Just as a clarification, Sunrise was bought by HGV  a couple of years ago and is no longer a fee-for-service.




nuwermj said:


> When Diamond acquired Club Intrawest (now Embarc) they had every intention of merging them into Club Diamond. There's good of evidence about this plan if anyone would like it. But Embarc members organized effective pushback and Diamond changed it's plans. This pushback is, in my view, the only reason fees haven't increased much more. Diamond has "kicked the can down the road" by under-funding capital reserves as a way to redirect more income to it's corporate overhead. So, when the resorts need upgrades a crisis of some kind will arise.


On another note, it was interesting to me that DRIs Embarc (former Intrawest) members which are around 22K were able to stop DRI from changing their rules.   So, I know that we have many more resorts and members than Intrawest.   I would hope that DRI has learned something from their Intrawest purchase.

Personally, I liked it much better last year when there were all of the speculations about the merger of the Marriott, Vistana & Hyatt TS systems because then I didn't have a "horse in the race".


----------



## CalGalTraveler

GT75 said:


> Just as a clarification, Sunrise was bought by HGV  a couple of years ago and is no longer a fee-for-service.



You are right. However Sunrise is still listed in their 10k filed in 2019 as "Fee-for-Service" unless it is a typo.

https://tugbbs.com/forums/index.php...liated-information.254931/page-3#post-2322116

IMO...I was relieved when Vistana/ILG was bought by MVC and not Diamond. I never dreamed this would happen to HGVC. I hope a deal fails to materialize and this is just Diamond/Apollo blowing smoke.


----------



## terces

And here is another entwined relationship (I may not have all my facts correct, but close):  HGVC is in a joint venture partnership with Grand Pacific on the MarBrisa property in Carlsbad which is still under development with a new building close to being underway.  They as well have a relationship which must fall in to the category of "fee for service" on Seapoint. and Pacific Palisades at Carlsbad. How does someone unwind this?  Grand Pacific has another dozen and a half or so resorts that are not part of HGVC and they appear to be a very good operator.  Would they now want to have DRI running the show on the three properties at Carlsbad??


----------



## CalGalTraveler

GT75 said:


> To me, I would think Blackstone, Strand Capital Group (built Anderson Ocean Club, Ocean Oaks, Ocean 22 and Ocean Enclave), Hilton & other developers with HGV would have an issue with Apollo's bid for HGV.    I would think that these companies want to continue to profit as I am sure they have in the past.   I am sure that their options will be heard much than us HGVC owners.   I don't see how it would be in their interests if Apollo took over control.   Maybe this is all wishful thinking on my part.    At least, we are still in the speculation phase anyways.



Good info. No developer/property owner would like to be faced with the prospect of an empty building with no profitable way to pay the bills if it is true that Diamond has alienated TS owners causing them to default/walk and underfunded HOA capital reserves by redirecting funds to corporate overhead that they will never see to keep their buildings in shape.

IMO, HGV would be better off working with its asset light partners and building new buildings and converting wings of Hiltons rather working with legacy timeshares like Diamond. My fear is such an merger/acquisition would be distracting and a drag on profitability with so many properties and only a dozen or so that are HGV quality. The HGV board probably considered a merger or acquisition in the past but rejected the idea in favor of the current organic expansion plans they are pursuing.


----------



## dayooper

terces said:


> And here is another entwined relationship (I may not have all my facts correct, but close):  HGVC is in a joint venture partnership with Grand Pacific on the MarBrisa property in Carlsbad which is still under development with a new building close to being underway.  They as well have a relationship which must fall in to the category of "fee for service" on Seapoint. and Pacific Palisades at Carlsbad. How does someone unwind this?  Grand Pacific has another dozen and a half or so resorts that are not part of HGVC and they appear to be a very good operator.  Would they now want to have DRI running the show on the three properties at Carlsbad??



Eh, Diamond has a relationship with Grand Pacific. All of their resorts but MarBrisa have an affiliation with DRI.


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## CalGalTraveler

Entwined also means the developers who own the Hilton Hotel managed properties where floors or wings have been converted.

BTW...Any real estate legal pros who can shed light what it means for a developer to "own" a timeshare as stated in these press releases with Elara and Sunrise? Timeshare owners own a major portion of the building, there are HOA management contracts, and there are developer-owned units.

Beyond that does it mean that the developer has exclusive rights to sell and take back TS properties in the building? Lease retail space or restaurants etc.? Further develop the property as in new floors on Elara or new wings? Parking Garage and grounds?


----------



## terces

dayooper said:


> Eh, Diamond has a relationship with Grand Pacific. All of their resorts but MarBrisa have an affiliation with DRI.


So does GP have a relationship with DRI AND HGVC on Seapoint and Grand Pallisades?  How the heck does that work.  The Seapoint "Concierge" directs a quest to HGVC Marbrisa for the "Owners Update", but you are telling me they are also in bed with DRI on these same properties. wtf?


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## CalGalTraveler

terces said:


> So does GP have a relationship with DRI AND HGVC on Seapoint and Grand Pallisades?  How the heck does that work.  The Seapoint "Concierge" directs a quest to HGVC Marbrisa for the "Owners Update", but you are telling me they are also in bed with DRI on these same properties. wtf?



Perhaps it is reciprocal affiliate exchange similar to HGVC and Fiesta Americana where each manages their own resorts but you can book at the other resort using your points? That's very different than Fee-for-Service management.

From what I can gather (DRI owners please correct), DRI claims 370 resorts (per Wikipedia) but only about 90 of those are "managed or owned" by DRI. The rest are reciprocal exchange relationships or paying to reserve a block of units with resorts in Raintree, Vacation Internationale etc.


----------



## dayooper

CalGalTraveler said:


> Perhaps it is an affiliate exchange similar to HGVC and Fiesta Americana where each manages their own resorts but you can book at the other resort using your points. That's very different than Fee-for-Service.



While MarBrisa has the fee-for-service tag, Palisades and Seapointe aren’t listed on the ownership page for HGVC. Are they actively selling those two still? I know they used to be “Hiltonized” (I have a friend who has a week in HGVC from Palisades), can they still be? Those two resorts are listed on the HGVC website as external exchange, like the Fiesta Americana resorts are. 

I believe GP has an affiliate relationship with all if it’s resorts (except for MarBrisa) with DRI.  The DRI resort pages have them listed as affiliate resorts. Nothing more than an external exchange, but there is a relationship there. I don’t see GP standing in the way of Apollo buying out HGVC. Blackstone, as long as they see value in their relationship with HGVC, might. Then again, everyone has their price and if firm like Blackstone can make their investment with those HGVC resorts turn a profit, whose to say they wouldn’t let them go?


----------



## SmithOp

terces said:


> So does GP have a relationship with DRI AND HGVC on Seapoint and Grand Pallisades?  How the heck does that work.  The Seapoint "Concierge" directs a quest to HGVC Marbrisa for the "Owners Update", but you are telling me they are also in bed with DRI on these same properties. wtf?



Grand Pacific has its own exchange company GPX, and it gets excess deposits from other companies like DRI, Wyndham, Welk, etc.

I have used GPX in the past for bonus cash weeks and stayed at KBC Maui and several DRI properties in Sedona.  I used to own Seapointe but it wasn’t enrolled in HGV.  I could trade it through GPX or RCI.

I’m a little fuzzy on Marbrisa, I seem to recall HGV kicked in an investment as well as taking over management.  Grand Pacific was a over-extended expanding Marbrisa at The Cove.


Sent from my iPad using Tapatalk Pro


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## terces

dayooper said:


> While MarBrisa has the fee-for-service tag, Palisades and Seapointe aren’t listed on the ownership page for HGVC. Are they actively selling those two still? I know they used to be “Hiltonized” (I have a friend who has a week in HGVC from Palisades), can they still be? Those two resorts are listed on the HGVC website as external exchange, like the Fiesta Americana resorts are.
> 
> I believe GP has an affiliate relationship with all if it’s resorts (except for MarBrisa) with DRI.  The DRI resort pages have them listed as affiliate resorts. Nothing more than an external exchange, but there is a relationship there. I don’t see GP standing in the way of Apollo buying out HGVC. Blackstone, as long as they see value in their relationship with HGVC, might. Then again, everyone has their price and if firm like Blackstone can make their investment with those HGVC resorts turn a profit, whose to say they wouldn’t let them go?


There is no TS Selling Office in Seapoint but there is a "Concierge Desk" right front and centre in the lobby, and while they are very helpful and friendly let there be no mistake that their sole purpose is to direct guests to the HGVC sales office at the MarBrisa.  Our booking in Seapoint last week was through the HGVC website using HGVC points and we had the option to do the same with MarBrisa and Pacific Pallisades.


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## terces

CalGalTraveler said:


> Entwined also means the developers who own the Hilton Hotel managed properties where floors or wings have been converted.
> 
> BTW...Any real estate legal pros who can shed light what it means for a developer to "own" a timeshare as stated in these press releases with Elara and Sunrise? Timeshare owners own a major portion of the building, there are HOA management contracts, and there are developer-owned units.
> 
> Beyond that does it mean that the developer has exclusive rights to sell and take back TS properties in the building? Lease retail space or restaurants etc.? Further develop the property as in new floors on Elara or new wings? Parking Garage and grounds?


I have been through the Boulevard documents quite thoroughly and believe the HOA has granted HGVC the right to manage the property for a fee and to continue selling timeshares there.  It is sold out so they find a steady stream of inventory through the rofr buy-backs, BUT, and this is interesting, they have also been granted the right to handle foreclosures.  As someone pointed out earlier, HGVC would likely have stacked the Board of Directors of the HOA and can therefore accomplish what it wants and needs to there.  I don't oppose what HGVC is doing as we are getting a well managed property out of the deal.


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## CalGalTraveler

terces said:


> I have been through the Boulevard documents quite thoroughly and believe the HOA has granted HGVC the right to manage the property for a fee and to continue selling timeshares there.  It is sold out so they find a steady stream of inventory through the rofr buy-backs, BUT, and this is interesting, they have also been granted the right to handle foreclosures.  As someone pointed out earlier, HGVC would likely have stacked the Board of Directors of the HOA and can therefore accomplish what it wants and needs to there.  I don't oppose what HGVC is doing as we are getting a well managed property out of the deal.



In the case of Blvd. do the TS owners have land rights or is it a common share of the building? I believe there is room for another tower. HGV or another developer would need to own the land rights to build another tower.


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## nuwermj

-- Deleted


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## Jason245

I have tried to understand what everyone has been talking about for the last several posts and am confused.  Hgvc owns the board of directors on almost all the resorts in their network except for a few affiliates .. And by own I mean have enough interval ownership to decide who is on board. 

 Anyone buying hgvc would get that board ownership and we the owners would be at their mercy.  The program docs are very specific in that the program can be ended by them at will. 

The only thing u are every truly guaranteed is the interval u own at the resort u own. 



Sent from my SM-N950U using Tapatalk


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## NOLA47

*found this on Reuters --*

*Exclusive: Hilton Grand Vacations to explore sale following takeover interest - sources*
Greg Roumeliotis
3 Min Read



(Reuters) - Hilton Grand Vacations Inc (HGV.N) has decided to explore strategic alternatives, including a potential sale, following acquisition interest in the U.S. timeshare operator from private equity firms, people familiar with the matter said on Thursday.

A potential deal would come as the timeshare industry seeks to improve its occupancy rates and shed its reputation of locking customers into complex contracts they do not understand, in the hope of becoming a more popular alternative for U.S. vacationers.

Hilton Grand Vacations has hired an investment bank to advise it on a sale process, the sources said, cautioning that no deal is certain. It has asked for preliminary bids in September, one of the sources added.

Hilton Grand Vacations shares jumped as much as 8.5% on the news, and were trading up 3.5% at $33.51 in afternoon trading in New York on Thursday, giving the company a market capitalization of $2.9 billion.

The sources asked not to be identified because the matter is confidential.

Hilton Grand Vacations, which was spun out of hotel operator Hilton Worldwide Holdings Inc (HLT.N) in 2017, did not immediately respond to a request for comment.

The New York Post reported last week that buyout firm Apollo Global Management LLC (APO.N), which owns time-share operator Diamond Resorts Holdings LLC, had made an offer for Hilton Grand Vacations.

Headquartered in Orlando, Hilton Grand Vacations develops, markets and operates vacation ownership resorts in destinations such as the Hawaiian Islands, New York City and Las Vegas. It had 54 properties, representing 8,888 units, as of the end of December.

The company also manages and operates two Hilton-branded club membership programs, providing leisure travel and reservation services for more than 315,000 members. It licenses the Hilton Grand Vacations brand from Hilton. It also has an agreement with Hilton to use some Hilton brands and intellectual property for its timeshare business.

Advertisement

These agreements would give Hilton a veto on any sale of the company it would deem detrimental to its brands.

“Our view is that the longer-term growth opportunities for Hilton Grand Vacations are considerable, given its currently limited geographic exposure, forthcoming inventory based on capital spent, and remaining capital resources,” Jefferies analysts wrote in a note last week examining the prospects of a deal.

Last year, another timeshare operator, Marriott Vacations Worldwide Corp (VAC.N), acquired peer ILG for $4.7 billion, turning it into a more formidable competitor to Hilton Grand Vacations and Wyndham Destinations Inc (WYND.N).


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## Tamaradarann

Jason245 said:


> I have tried to understand what everyone has been talking about for the last several posts and am confused.  Hgvc owns the board of directors on almost all the resorts in their network except for a few affiliates .. And by own I mean have enough interval ownership to decide who is on board.
> 
> Anyone buying hgvc would get that board ownership and we the owners would be at their mercy.  The program docs are very specific in that the program can be ended by them at will.
> 
> The only thing u are every truly guaranteed is the interval u own at the resort u own.
> 
> 
> 
> Sent from my SM-N950U using Tapatalk



I agree with you Jason, that is why any takeover of HGVC is a concern to all of us owners who value the flexibility that the club offers.  Furthermore, on your point about the interval that U own at the resort U own, I want to stress a point about the DRI Collection Model.  You don't own ANY interval at any resort.  You own a share of a Collection Trust that is represented by points.  Furthermore, DRI has set up a Hawaii Collection that is NOT all Hawaii resorts.  I don't know the exact number of units in this collection or in each resort in this collection but there are more non Hawaii resorts in the Collection than Hawaii resorts.  They call it a Hawaii Collection instead of a US West Collection(which it really is) because "Hawaii" is the magnet to get one to purchase in the Collection.  However, adding the Continental US resorts to this Collection gives them a great deal more Hawaii Collection Inventory to sell. 

Another Tread on TUG addressed HGVC's need to build more high end high point inventory to sell at presentations.  Well if HGVC used a version of the DRI Collection Model they wouldn't need to build more high end high point inventory; they could just sell larger point packages in a TRUST!


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## dougp26364

Tamaradarann said:


> I agree with you Jason, that is why any takeover of HGVC is a concern to all of us owners who value the flexibility that the club offers.  Furthermore, on your point about the interval that U own at the resort U own, I want to stress a point about the DRI Collection Model.  You don't own ANY interval at any resort.  You own a share of a Collection Trust that is represented by points.  Furthermore, DRI has set up a Hawaii Collection that is NOT all Hawaii resorts.  I don't know the exact number of units in this collection or in each resort in this collection but there are more non Hawaii resorts in the Collection than Hawaii resorts.  They call it a Hawaii Collection instead of a US West Collection(which it really is) because "Hawaii" is the magnet to get one to purchase in the Collection.  However, adding the Continental US resorts to this Collection gives them a great deal more Hawaii Collection Inventory to sell.
> 
> Another Tread on TUG addressed HGVC's need to build more high end high point inventory to sell at presentations.  Well if HGVC used a version of the DRI Collection Model they wouldn't need to build more high end high point inventory; they could just sell larger point packages in a TRUST!



IF the merger happens, and it’s a big if at this point, I don’t see much changing within the HGVC system or how HGVC owners access the system. We’ll still have any rights of usage guaranteed in the original documents.

What DRI will gain would be management of the HGVC resorts and the management fees associated with them and they can claim them as inventory for their collection, even its only one interval per resort, which gives sizzle to sell prospects. 

What HGVC owners will “gain” is the OPTION to enroll their Interval in DRI’s THE Club (for another membership fee based on the number of THE Club points their interval is assigned) and access to all of DRI’s resorts (even if they only have one interval at a particular resort). Honestly, with DRI, HGVC owners would have instant, good access, to Maui, Kauai, Sedona and Lake Tahoe. I could see the sales floor making this look VERY attractive to HGVC owners who aren’t TUG members that understand DRI’s fee structure. Membership in THE Club will likely add another $200 to $300 in pure management fees, just to access DRI’s inventory.

Past those changes I don’t see a lot of effect for HGVC owners. My worry is DRI’s management fees vs what they put into cash reserves for resort upkeep. We left DRI secondary to their management fees and nothing else. Their collection was good, access to the majority of their resorts in their system was very good to great (never had an issue booking ocean front units in Maui) and the quality was acceptable (not great). 

Honestly, for the majority of HGVC owners, this gives them everything they’ve been asking for without waiting to see if/when HGVC will actually build something AND keep the price/points reasonable. Fortunately for use, are scope of use for HGVC is very narrow (Vegas) and we won’t need or really want to join DRI’s THE Club for access to inventory we’re already well versed in and locations we have great access to through Marriott, with the exception of Sedona.


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## brp

This is sort of like Seinfeld: A thread about nothing.

And yet it lives on! 

Cheers.


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## Tamaradarann

dougp26364 said:


> IF the merger happens, and it’s a big if at this point, I don’t see much changing within the HGVC system or how HGVC owners access the system. We’ll still have any rights of usage guaranteed in the original documents.
> 
> What DRI will gain would be management of the HGVC resorts and the management fees associated with them and they can claim them as inventory for their collection, even its only one interval per resort, which gives sizzle to sell prospects.
> 
> What HGVC owners will “gain” is the OPTION to enroll their Interval in DRI’s THE Club (for another membership fee based on the number of THE Club points their interval is assigned) and access to all of DRI’s resorts (even if they only have one interval at a particular resort). Honestly, with DRI, HGVC owners would have instant, good access, to Maui, Kauai, Sedona and Lake Tahoe. I could see the sales floor making this look VERY attractive to HGVC owners who aren’t TUG members that understand DRI’s fee structure. Membership in THE Club will likely add another $200 to $300 in pure management fees, just to access DRI’s inventory.
> 
> Past those changes I don’t see a lot of effect for HGVC owners. My worry is DRI’s management fees vs what they put into cash reserves for resort upkeep. We left DRI secondary to their management fees and nothing else. Their collection was good, access to the majority of their resorts in their system was very good to great (never had an issue booking ocean front units in Maui) and the quality was acceptable (not great).
> 
> Honestly, for the majority of HGVC owners, this gives them everything they’ve been asking for without waiting to see if/when HGVC will actually build something AND keep the price/points reasonable. Fortunately for use, are scope of use for HGVC is very narrow (Vegas) and we won’t need or really want to join DRI’s THE Club for access to inventory we’re already well versed in and locations we have great access to through Marriott, with the exception of Sedona.



In view of what Jason said above, which is really true not conjecture, a DRI takeover could mean that you could ONLY use the unit and season you own UNLESS you join the CLUB for an additional annual membership.  While that may give better opportunities to go to different places, it may make it more difficult to reserve numbers of weeks in a row in Honolulu since there are more members which is what was an important aspect of my ownership.  Now that we own a condo in Honolulu it is a moot point for us.  However, it is an example of where the merger could go and be disappointing.


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## Ralph Sir Edward

Tamaradarann said:


> In view of what Jason said above, which is really true not conjecture, a DRI takeover could mean that you could ONLY use the unit and season you own UNLESS you join the CLUB for an additional annual membership.  While that may give better opportunities to go to different places, it may make it more difficult to reserve numbers of weeks in a row in Honolulu since there are more members which is what was an important aspect of my ownership.  Now that we own a condo in Honolulu it is a moot point for us.  However, it is an example of where the merger could go and be disappointing.



Tamaradarann, The real question will be - will there still be an owner's only window, as there is today, or will the "Club" directly compete for reservations from booking day1 (a la Marriott DC)? (And also for affiliates, where would those owners who aren't part of HGVC fall? Fixed week is OK, but Bay Club is 1-50 seasonal. I wonder how that would fall out. . . )


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## CalGalTraveler

Whoa. Marriott DC trust inventory is separate from the inventory available to home week owners. The trust consists of developer weeks from ROFR etc. that have been converted into the DC trust.

It is only when the enrolled home week owner (who has paid to enroll in the trust points system) elects to convert their home week to trust points for the year. Only then does the inventory become available to DC trust owners. That owner is not denied their home week privilege.

If Diamond manages their trusts differently, inquiring minds would like to know!

_(BTW I may have mangled the MVC terminology but the description is correct.)
_


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## Jason245

Ultimatly, I think everyone just needs to wait and see, there are a lot of possibilities of what may come, and while we can debate each of them, until you know what the reality is going to be, you just have to wait and see.

This is partly why I am a believer in paying as close to nothing as possible on these things, so much of the "value" can be stripped away or taken away without you even getting a say.

Even without HGVC being aquired, in my short time here I have seen Open season go from an ok value to a questionable value and program fees increase in excess of inflation and value increases.

Right now I take advantage of the "borrow next years points for free"...  and I worry each year that they will start charging for that.


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## Ralph Sir Edward

CalGalTraveler said:


> Whoa. Marriott DC trust inventory is separate from the inventory available to home week owners. The trust consists of developer weeks from ROFR etc. that have been converted into the DC trust.
> 
> It is only when the enrolled home week owner (who has paid to enroll in the trust points system) elects to convert their home week to trust points for the year. Only then does the inventory become available to DC trust owners. That owner is not denied their home week privilege.
> 
> If Diamond manages their trusts differently, inquiring minds would like to know!
> 
> _(BTW I may have mangled the MVC terminology but the description is correct.)_



CalGalTraveler, I respectfully disagree. Here is the difference.

MVC - 
MVC DC trust books at the same time the other owners do. (How they book, and what weeks they book is a black box. There is no way to determine the reality of who gets "first pick". But they are clearly in competition, from the 1st second of the booking window with all they people who are not part of DC trust. You can have a situation where you can't book a week for the time you are trying to get by booking your week, 40 minutes after the 12 month booking window opens, but be told that there are plenty of weeks available to book the same resort and week - if you book via DC points. This is not hypothetical. It happened to me in 2014. (Which is why I dumped Marriott.)

HGVC (and Affiliates) 
You have an initial period (the home week window) in which only the people who own at a resort can book there - and only the exact unit type they own - nobody else. After the window closes, usually 3 months, then anybody in the points system can book any resort type they want, if it is available. The points system does not compete with the owners from the first booking second, only after they owners of pricier weeks get a chance to book what they are paying extra for. If that goes away, so do I . . . .


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## escanoe

The cart is so in front of the horse on this thread that I am standing on the back of the cart looking back and I can’t even see a horse.

I think we are in for a merger or acquisition ... movement of the stock price indicates a likelihood of it is baked in. 

IMHO, those that think everything will stay the same are in denial or misreading things. It is impossible to know how management of HGV will change or what will be in our future.

I am discounting the potential for some of the worst things being discussed here happening. Whoever owns HGV will have made a major investment in buying it. That value will only go down if current owners (those most likely to purchase more) feel betrayed.

Us TUGers are well enough informed I worry a little that the changes may be ones most owners “perceive” as adding value (maybe for more $), but that we view as potentially devaluing what we own.

Posts that theorize about highly technical specifics of what could happen I find to be so speculative that they don’t have much value.


----------



## CalGalTraveler

Perhaps it is a black box. The folks on the MVC thread seem to indicate otherwise.

What is more predictive is how Diamond handles trust inventory relative to deeds at the same resort today.

@escanoe I agree the cart is way before the horse. However one thing we can say regardless of whether there is an acquisition with 99% certainty:

the sales price of a TS VOI will not increase
fees will not decline but will always increase.
Whatever happens will affect the velocity of those conditions.


----------



## JIMinNC

CalGalTraveler said:


> Perhaps it is a black box. The folks on the MVC thread seem to indicate otherwise.



Ralph is correct in that it is something of a "black box" in MVC.

While the *amount* of Trust inventory and the *amount* of legacy weeks inventory is kept in two totally separate buckets in the MVC system. (i.e. - if there are 1000 intervals in a given season/view category at a resort, and the Trust owns 60%, then 600 intervals will be available to Trust owners and 400 to legacy owners. Those two pools are totally separate as far as ownership rights for those intervals.) But remember, those 1000 intervals are usually almost all floating intervals. So who is entitled to week 26 in unit 1201 - a Trust owner or a legacy owner? If there are 100 week 26 units, could MVC take all 100 for the Trust that week, but give legacy owners all 100 in week 10? Or do they split each week 60/40? That's where the black box comes in. When you add in units MVC controls for rentals and other buckets, it gets even more complex. That's what we call it a "black box". Who gets first dibs for any given week? Could MVC take all of the best weeks for the Trust while leaving the lesser demanded weeks for legacy owners, but still keeping the overall 60/40 split intact? Once the individual intervals are put into either the Trust bucket or the legacy bucket, they are totally separate and everyone is whole. But for any given week, how do individual intervals get "chosen" for each bucket?


----------



## Tamaradarann

Ralph Sir Edward said:


> Tamaradarann, The real question will be - will there still be an owner's only window, as there is today, or will the "Club" directly compete for reservations from booking day1 (a la Marriott DC)? (And also for affiliates, where would those owners who aren't part of HGVC fall? Fixed week is OK, but Bay Club is 1-50 seasonal. I wonder how that would fall out. . . )



Since HGVC deeds provide an OWNERS SEASON FOR HOME WEEK WINDOW I doubt that they could eliminate that preference legally.  My concern would be for HGVC owners who don't use their home week where they own but use it during the CLUB SEASON which could be changed.   Since I and many HGVC members don't own weeks in Hawaii that they use in Hawaii that would be my specific concern.  For the most part we have been able to reserve the weeks we want in Hawaii during Club season.  That could change especially since the Hawaii Collection that DRI has has many non Hawaii Resorts so the DRI availability in the Hawaii Collection is less than the number of owner points in that Collection.   if owners in that Collection could reserve in HGVC inventory in Hawaii on an equal basis with HGVC members it could disturb the current availability for HGVC owners.


----------



## geist1223

In the DRI Hawaiian Collection there are only 5 to 6 Resorts. 3 actually in Hawaii. So there are not "many" non-Hawaiian Resorts in the DRI Hawaiian Collection. In addition to the 3 Resorts located in Hawaii if you bought your Points from DRI there are many affiliates located in Hawaii that you have access. If you bought resell DRI  Points then you only have access to the actual 5 to 6 Resorts in the Collection. The 3 Resorts actually in Hawaii are KBC, Point at Poipu, and the Modern Honolulu.


----------



## Ralph Sir Edward

Tamaradarann said:


> Since HGVC deeds provide an OWNERS SEASON FOR HOME WEEK WINDOW I doubt that they could eliminate that preference legally.  My concern would be for HGVC owners who don't use their home week where they own but use it during the CLUB SEASON which could be changed.   Since I and many HGVC members don't own weeks in Hawaii that they use in Hawaii that would be my specific concern.  For the most part we have been able to reserve the weeks we want in Hawaii during Club season.  That could change especially since the Hawaii Collection that DRI has has many non Hawaii Resorts so the DRI availability in the Hawaii Collection is less than the number of owner points in that Collection.   if owners in that Collection could reserve in HGVC inventory in Hawaii on an equal basis with HGVC members it could disturb the current availability for HGVC owners.



They could bypass it. Consider. . . 

DVI offers access to the new system, if one assigns one's week to the pool, one year in advance. Then DVI's new system books that week in it's home week window, and places the week in the new system pool.

Perfectly legal, and then there is direct pool competition with owners in the restricted home week period. . .


----------



## JIMinNC

Tamaradarann said:


> Since HGVC deeds provide an OWNERS SEASON FOR HOME WEEK WINDOW I doubt that they could eliminate that preference legally.



I don't believe the the HGVC deed provides for a non-revokable required Home Week window. It does say in our Warranty Deed, Exhibit A Legal Description:

_4. The specific use restrictions set forth in the rules and regulations contained in the Hilton Grand Vacations Club Disclosure Statement, *as the same may be amended from time to time*, an initial copy of which is attached to the Declaration as Exhibit "H"._

The bolding above is mine, but HGVC could amend the rules. There is nothing directly in the deed that would prevent them from doing that. Not to say they _*would*_ do that, since it would have a big impact on customer satisfaction and their brand, but there are no guarantees.


----------



## Ralph Sir Edward

JIMinNC said:


> I don't believe the the HGVC deed provides for a non-revokable required Home Week window. It does say in our Warranty Deed, Exhibit A Legal Description:
> 
> _4. The specific use restrictions set forth in the rules and regulations contained in the Hilton Grand Vacations Club Disclosure Statement, *as the same may be amended from time to time*, an initial copy of which is attached to the Declaration as Exhibit "H"._
> 
> The bolding above is mine, but HGVC could amend the rules. There is nothing directly in the deed that would prevent them from doing that. Not to say they _*would*_ do that, since it would have a big impact on customer satisfaction and their brand, but there are no guarantees.



How that would affect affiliates is unknown. Any affiliate owner has the right, but not the obligation (I don't), to join HGVC. Who would have the priority (between non-HGVC owners and the HGVC owners) should the home week window be eliminated, is truly undefined.. . .


----------



## escanoe

geist1223 said:


> In the DRI Hawaiian Collection there are only 5 to 6 Resorts. 3 actually in Hawaii. So there are not "many" non-Hawaiian Resorts in the DRI Hawaiian Collection.



Since I am now joining in the wild speculation:

So the best and brightest of us TUGers with our platinum Vegas weeks may find ourselves in the new DRI “Vegas Collection?”

Arguably in better shape than our “elite” friends over in the “Scotland Collection?”


----------



## CalGalTraveler

escanoe said:


> Since I am now joining in the wild speculation:
> 
> So the best and brightest of us TUGers with our platinum Vegas weeks may find ourselves in the new DRI “Vegas Collection?”
> 
> Arguably in better shape than our “elite” friends over in the “Scotland Collection?”



LOL!!!! That's gotta be one of the best lines I've ever heard on Tug.

If we are forced to become a "Vegas Collection" owner, we will move all future spend to the "Westin/Marriott/Hyatt" Collection!

MVC must love this...


----------



## CalGalTraveler

The mixed-use hotel and Blackstone owned properties e.g. Elara, Midtown, HHV, OT, District, Chicago will likely be the most protected because those powerful property owners will not tolerate Diamond/Apollo skimming off monies for reserve to corporate overhead and will sue. Those TS properties will need to pay their fare share toward property renovations.


----------



## 1Kflyerguy

JIMinNC said:


> I don't believe the the HGVC deed provides for a non-revokable required Home Week window. It does say in our Warranty Deed, Exhibit A Legal Description:
> 
> _4. The specific use restrictions set forth in the rules and regulations contained in the Hilton Grand Vacations Club Disclosure Statement, *as the same may be amended from time to time*, an initial copy of which is attached to the Declaration as Exhibit "H"._
> 
> The bolding above is mine, but HGVC could amend the rules. There is nothing directly in the deed that would prevent them from doing that. Not to say they _*would*_ do that, since it would have a big impact on customer satisfaction and their brand, but there are no guarantees.



I don't see why DRI or anyone would buy a company and then make changes to the product that destroy the value.   Usually the goal is to increase customer satisfaction and value.

TUG members not included, HGV seems to do a good business selling multiple weeks to customers,  I think the company will want to retain that business model.


----------



## JIMinNC

1Kflyerguy said:


> I don't see why DRI or anyone would buy a company and then make changes to the product that destroy the value.   Usually the goal is to increase customer satisfaction and value.
> 
> TUG members not included, HGV seems to do a good business selling multiple weeks to customers,  I think the company will want to retain that business model.



Agreed. At least not consciously. Although there have been cases where companies have been acquired and the acquirer makes changes they *think* will add value, but they soon find out the changes were not well received - or they go for short term revenue over long term growth - with the same result.


----------



## PigsDad

JIMinNC said:


> Agreed. At least not consciously. Although there have been cases where companies have been acquired and the acquirer makes changes they *think* will add value, but they soon find out the changes were not well received - or they go for short term revenue over long term growth - with the same result.


Or the acquirer has the goal of making everything they own homogeneous in order to take advantage of economies of scale, reducing costs to increase profit.  Not sure if that would work with a product like HGVC, but that is what concerns me the most with a possible takeover.

Kurt


----------



## Tamaradarann

geist1223 said:


> In the DRI Hawaiian Collection there are only 5 to 6 Resorts. 3 actually in Hawaii. So there are not "many" non-Hawaiian Resorts in the DRI Hawaiian Collection. In addition to the 3 Resorts located in Hawaii if you bought your Points from DRI there are many affiliates located in Hawaii that you have access. If you bought resell DRI  Points then you only have access to the actual 5 to 6 Resorts in the Collection. The 3 Resorts actually in Hawaii are KBC, Point at Poipu, and the Modern Honolulu.



I understood that in the Hawaii Collection there are 2 in Las Vegas, and 1 each in Arizona, California, and Utah and at the present time the Modern is not yet a timeshare.  Furthermore, I am not nor do I intend to be an owner of DRI unless they take over HGVC and make me be an owner.  My concern is changing the rules and availability in HGVC which work very well.  If the HGVC rules and availability stay the same I am good.  "IF" there are other opportunities WITHOUT reducing the current availability in HGVC I am even better.


----------



## Tamaradarann

JIMinNC said:


> I don't believe the the HGVC deed provides for a non-revokable required Home Week window. It does say in our Warranty Deed, Exhibit A Legal Description:
> 
> _4. The specific use restrictions set forth in the rules and regulations contained in the Hilton Grand Vacations Club Disclosure Statement, *as the same may be amended from time to time*, an initial copy of which is attached to the Declaration as Exhibit "H"._
> 
> The bolding above is mine, but HGVC could amend the rules. There is nothing directly in the deed that would prevent them from doing that. Not to say they _*would*_ do that, since it would have a big impact on customer satisfaction and their brand, but there are no guarantees.



You may be correct the HGVC home week preference could be eliminated, however, the reason I mentioned a non-revokable HOME WEEK is that the HGVC doesn't provide a specific HOME WEEK but a HOME WEEK SEASON, or RESERVATION WINDOW.  Since most people on TUG have mentioned in the past that HGVC could change the club rules but they couldn't change your ability to use what you own, I feel that what you own must be given some type of home week preference.  I personally no longer have any affinity for any of the weeks that I own so HOME WEEK OR HOME SEASON BOOKING WINDOW is NOT an issue for me, however, I know there are a lot of people who own in New York and Honolulu who would be ready to kill if they lost their home week privileges and had to fight with the larger HGVC or DRI crowd for reservations!!


----------



## GT75

Tamaradarann said:


> You may be correct the HGVC home week preference could be eliminated, however, the reason I mentioned a non-revokable HOME WEEK is that the HGVC doesn't provide a specific HOME WEEK but a HOME WEEK SEASON, or RESERVATION WINDOW.



I don't see how "home week booking" could legally be eliminated.    To me, that is the bases of our deed and foundation of the HGVC system.    I do agree that the club rules could be changed.


----------



## CalGalTraveler

I could envision the scenario that @Ralph Sir Edward playing out in Hawaiian MVC and Westins where the platinum season is 50 weeks. So you may end up with the worst week of the 50 week platinum season. However that hasn't happened in 9 years of MVC DC program and availability is still good for deeded home weeks from what I can tell (I am not an owner but have been watching the MVC thread).

Most HGVC properties have shorter platinum seasons so if a trust program played games and took most of the weeks, you still would be assured of a home week reservation during that Platinum season. Otherwise, they are doing more than playing games, they are double-selling weeks which may constitute fraud. RCI got in legal trouble several years ago for such a practice.


----------



## nuwermj

PigsDad said:


> Or the acquirer has the goal of making everything they own homogeneous in order to take advantage of economies of scale, reducing costs to increase profit.  Not sure if that would work with a product like HGVC, but that is what concerns me the most with a possible takeover.



I don't believe it is necessary to homogenize vacation clubs in order to realize economies of scale. Back office functions can be centralized and then provided to multiple vacation clubs. Lots of scale economies here.


----------



## Mizzou39

nuwermj said:


> I don't believe it is necessary to homogenize vacation clubs in order to realize economies of scale. Back office functions can be centralized and then provided to multiple vacation clubs. Lots of scale economies here.



I think you are on the right track.  A buyer would not purchase a valuable franchise to destroy it.  Much of the HGVC value stems from reputation, Hilton name and quality of the properties.  If the properties were to be folded into other DRI properties then the value declines.   

There is a possible value play, though, by utilizing economies of scale.  Keep HGVC as it's own class but create savings through centralizing back office operations.  This would have the impact of increasing the value of the brand.


----------



## hurnik

Mizzou39 said:


> I think you are on the right track.  A buyer would not purchase a valuable franchise to destroy it.  Much of the HGVC value stems from reputation, Hilton name and quality of the properties.  If the properties were to be folded into other DRI properties then the value declines.
> 
> There is a possible value play, though, by utilizing economies of scale.  Keep HGVC as it's own class but create savings through centralizing back office operations.  This would have the impact of increasing the value of the brand.



Well they wouldn't *intentionally* destroy it (well in this case, because it's a VC firm).  Microsoft, for example, will buy up their competition to "destroy" it (they basically shelve the entire company and that's that, you've destroyed your competition and their technology never sees the light of day).

VC firms want to make a quick buck, and in the process can "destroy" the company.  Happens quite frequently.  However, my hope is that Hilton is smart enough to not let this tarnish their name, plus Blackstone has a history with Hilton, so I see that as a plus.

But there's little if anything, any of us can do about it, at least now.


----------



## 1Kflyerguy

Its true that sometime acquisitions don't go well for everyone involved.  

Some investors and private equity firms are focused on the short-term, but many also try to build greater value over time.    

I tend to agree with Nuwermj, there are many ways to achieve economies of scale without combining everything into a single system.  It would seem odd to buy a company like HGV and then make moves such as restricting reservation rights.  That would seem certain to antagonize the existing HGV owners, and i don't see how they could think current owners would not be upset and vocal.


----------



## brp

1Kflyerguy said:


> It would seem odd to buy a company like HGV and then make moves such as restricting reservation rights.  That would seem certain to antagonize the existing HGV owners, and i don't see how they could think current owners would not be upset and vocal.



Agreed. As has likely been mentioned in these many pages, HGVC spend quite a bit of marketing dollars on trying to sell more points to existing members. Presumably they must be pretty successful at this, our cases notwithstanding. Gutting the program and pissing off current owner is not conducive to them buying more.

Cheers.


----------



## geist1223

So after 24 days, 14 pages, and 349 Posts what have we decided?


----------



## CalGalTraveler

My biggest fear of Apollo/Diamond is a short-term focus on profits at the expense of customer goodwill for an IPO/sellout if HGVC/Hilton is not in control.


----------



## PigsDad

geist1223 said:


> So after 24 days, 14 pages, and 349 Posts what have we decided?


Does it matter what we have _decided_?  Not much we can do other than wait and see how it pans out.

Kurt


----------



## DannyTS

this is very illustrative of what the Apollo business model is

https://pitchbook.com/news/articles/apollo-adts-mega-ipo-falls-flat

*Apollo, ADT's mega-IPO falls flat*
By Kevin Dowd
January 19, 2018

Share:






Security specialist ADT has completed one of the priciest PE-backed IPOs in recent memory, selling 111 million shares for $14 each to raise some $1.6 billion and establish an initial market cap of about $10.6 billion.

Those numbers are big—but ADT and its backers, including Apollo Global Management, were hoping for something a bit bigger.

The company had originally planned to sell shares for between $17 and $19 each before reducing its expectations in the face of subdued public interest. Initial reports of the possible offering from last summer indicated that ADT had hoped to achieve a valuation of $15 billion. The company lost even more value during its first day of trading, as its stock closed Friday at $12.39, equating to a market cap of about $9.3 billion.

Even at that reduced price, though, Apollo brought in a 2.3x return on its initial investment, inking profits of $2.4 billion, according to The Wall Street Journal. The firm owned a 100% stake in ADT before the IPO (which was underwritten by Goldman Sachs and Morgan Stanley) and will retain a bit less than 85% of the company's stock, per an SEC filing.

It didn't take the buyout giant lock to bring the security provider back to the public markets. Apollo had owned ADT for fewer than two years, agreeing to take the business private for $6.9 billion and merge it with existing portfolio companies Protection 1 and ASG Security during February 2016. The deal was finalized three months later.

Apollo was able to transform ADT's finances during that brief period of ownership. Here's a chart comparing some of the company's key metrics for the first nine months each of 2016 and 2017:





With every action, though, comes an equal and opposite reaction. ADT's debt load has skyrocketed under private equity ownership, rising from about $1.3 billion at the end of 2015 to nearly $10.2 billion as of last September 30, according to an SEC filing.

As would be expected, much of that debt traces back to Apollo's acquisition of the business. Of the $12.1 billion in total consideration connected to the merger of ADT, Protection 1 and ASG Security, about $3.6 billion covered the assumption of existing debt, per an SEC filing. To further finance the deal, the company took on nearly $1.6 billion in first lien term loans and $3.14 billion in senior secured notes.


----------



## terces

DannyTS said:


> this is very illustrative of what the Apollo business model is
> 
> https://pitchbook.com/news/articles/apollo-adts-mega-ipo-falls-flat
> 
> *Apollo, ADT's mega-IPO falls flat*
> By Kevin Dowd
> January 19, 2018
> 
> Share:
> 
> 
> 
> 
> 
> 
> Security specialist ADT has completed one of the priciest PE-backed IPOs in recent memory, selling 111 million shares for $14 each to raise some $1.6 billion and establish an initial market cap of about $10.6 billion.
> 
> Those numbers are big—but ADT and its backers, including Apollo Global Management, were hoping for something a bit bigger.
> 
> The company had originally planned to sell shares for between $17 and $19 each before reducing its expectations in the face of subdued public interest. Initial reports of the possible offering from last summer indicated that ADT had hoped to achieve a valuation of $15 billion. The company lost even more value during its first day of trading, as its stock closed Friday at $12.39, equating to a market cap of about $9.3 billion.
> 
> Even at that reduced price, though, Apollo brought in a 2.3x return on its initial investment, inking profits of $2.4 billion, according to The Wall Street Journal. The firm owned a 100% stake in ADT before the IPO (which was underwritten by Goldman Sachs and Morgan Stanley) and will retain a bit less than 85% of the company's stock, per an SEC filing.
> 
> It didn't take the buyout giant lock to bring the security provider back to the public markets. Apollo had owned ADT for fewer than two years, agreeing to take the business private for $6.9 billion and merge it with existing portfolio companies Protection 1 and ASG Security during February 2016. The deal was finalized three months later.
> 
> Apollo was able to transform ADT's finances during that brief period of ownership. Here's a chart comparing some of the company's key metrics for the first nine months each of 2016 and 2017:
> 
> 
> 
> 
> 
> With every action, though, comes an equal and opposite reaction. ADT's debt load has skyrocketed under private equity ownership, rising from about $1.3 billion at the end of 2015 to nearly $10.2 billion as of last September 30, according to an SEC filing.
> 
> As would be expected, much of that debt traces back to Apollo's acquisition of the business. Of the $12.1 billion in total consideration connected to the merger of ADT, Protection 1 and ASG Security, about $3.6 billion covered the assumption of existing debt, per an SEC filing. To further finance the deal, the company took on nearly $1.6 billion in first lien term loans and $3.14 billion in senior secured notes.


That is disgusting.  Why can't they just leave it alone instead of trying to squeeze blood.  C'mon Warren Buffet.  Buy this thing and put it on strong footing.....


----------



## escanoe

geist1223 said:


> So after 24 days, 14 pages, and 349 Posts what have we decided?



Surely almost anything worth being speculated upon from what little we know from the news reports has been said at least once in this thread.

Yet I am still find this discussion very useful compared to “Amex Hilton Aspire” one. It is the one thread here that I no longer read new posts on. 

I have greatly enjoyed the cross pollination on this thread from owners that have informed us about the other systems relevant to this discussion.

One of the things I am curious about: Are any of the market researchers at the companies thinking about buying HGV reading what is being said here? It would be the best way to see what the most informed consumers of HGV think about the product and what our pain points for changes would be. Not that TUGers are typical customers ... but we know a lot about using the product.


----------



## Tamaradarann

GT75 said:


> I don't see how "home week booking" could legally be eliminated.    To me, that is the bases of our deed and foundation of the HGVC system.    I do agree that the club rules could be changed.



I totally agree with you as I stated that most people here believe that that Home Week booking is guaranteed.   My comment was in response to JIMinNC's emphatic comment "I don't believe the the HGVC deed provides for a non-revokable required Home Week window".


----------



## Tamaradarann

Mizzou39 said:


> I think you are on the right track.  A buyer would not purchase a valuable franchise to destroy it.  Much of the HGVC value stems from reputation, Hilton name and quality of the properties.  If the properties were to be folded into other DRI properties then the value declines.
> 
> There is a possible value play, though, by utilizing economies of scale.  Keep HGVC as it's own class but create savings through centralizing back office operations.  This would have the impact of increasing the value of the brand.



I agree with you and I would hope any buyer of HGVC would also agree.  My concern is with the DRI Collection Trust System which allows the sale of, for instance, Hawaii Collection points based on inventory in other states with lower vacation demand.


----------



## pedro47

This is a very strange thread because there has been no action taken by either parties after more than 30 days.


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## Tamaradarann

pedro47 said:


> This is a very strange thread because there has been no action taken by either parties after more than 30 days.



This wouldn't be the first time that stock price manipulation was done by the big boys!!


----------



## dayooper

Tamaradarann said:


> This wouldn't be the first time that stock price manipulation was done by the big boys!!



Won’t be the last either.


----------



## 1Kflyerguy

pedro47 said:


> This is a very strange thread because there has been no action taken by either parties after more than 30 days.



Actually there has been some movement.  on August 29th Reuters reported that HGV was exploring strategic alternatives, including a possible sale after the takeover interest from Apollo.  

These deals are complicated, and as much as most of the HGV owners are looking for a quick resolution, it may take months to reach a conclusion.   I know some of the deals i have been involved with at mt work have actually taken close to a year to negotiate and agree with terms.  

I am no expert, but i have to think the licensing agreements and capital light model with a significant amount of HGV inventory actually owned by 3rd parties has to complicate the mix for any prospective investor.


----------



## Jason245

1Kflyerguy said:


> Actually there has been some movement.  on August 29th Reuters reported that HGV was exploring strategic alternatives, including a possible sale after the takeover interest from Apollo.
> 
> These deals are complicated, and as much as most of the HGV owners are looking for a quick resolution, it may take months to reach a conclusion.   I know some of the deals i have been involved with at mt work have actually taken close to a year to negotiate and agree with terms.
> 
> I am no expert, but i have to think the licensing agreements and capital light model with a significant amount of HGV inventory actually owned by 3rd parties has to complicate the mix for any prospective investor.


Even after a deal is "inked" there is regulatory approval, shareholder votes.. etc... this deal would take about 6 months to close.  

Sent from my SM-N950U using Tapatalk


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## ocdb8r

Is it acceptable to just put my fingers in my ears, sit in the corner and rock quietly to pretend none of this is happening?  I don't think I have the energy for any more "timeshare system consolidation".  It's all too much to handle with all the MVC/VSN/Hyatt consolidation speculation.  

;-)


----------



## dougp26364

ocdb8r said:


> Is it acceptable to just put my fingers in my ears, sit in the corner and rock quietly to pretend none of this is happening?  I don't think I have the energy for any more "timeshare system consolidation".  It's all too much to handle with all the MVC/VSN/Hyatt consolidation speculation.
> 
> ;-)



I sort of do this...... figuratively. 

We owned 2 timeshares with a developer in Branson that went Bankrupt. One ended up managed by Spinnaker, the other by a local individual who ended up stealing the MF’s and bankrupted that timeshares again. Lots of drama with that situation.

We’ve been thru diamond resorts buying out Sunterra from the DRI side. Drama and lies all around on that one from the sales staff.

We’ve been thru MVC’s conversion from weeks to points. That went a little more smoothly but it’s been thousands of posts on TUG.

Now there’s a rumor Apollo is interested in HGVC and, honestly, HGVC appears to have put themselves in a position as a takeover target. If not Apollo it’s likely to be someone else. 

We own at Grand Vacations in Breckenridge, which has 4 resorts and has said that’s it, they’re not going to build anymore. I’m waiting for the shoe to drop on that one as I anticipate they’ll get tired of managing the resorts and see them as a way to fund whatever future projects they want to build (selling out vs borrowing from a bank).

I’m at a point where it’s “wake me when it’s over”.  I have no control other than paying our MF’s. Voting is, IMHO, an exercise in futility. Management companies have always been smart enough to be able to out vote owners, either thru apathy or manipulation (trust management). Owners are largely along for the ride. 

I put my opinion in from time to time, I keep using my timeshares, adapting to the changes and move forward. The rumors and speculation are entertainment only. It’s when the merger actually HAPPENS and the company releases information that TUG becomes valuable. That’s when we figure out what works and what doesn’t. Otherwise it’s an exercise in futility.


----------



## 1Kflyerguy

Seeking Alpha is reporting that an activist investor has taken a position in HGV.    Not many details, and i am not familar with Elliot Management to know if thats good news or bad..  Sounds like they are pushing for a sale, so they may just be s short-term trader.


https://seekingalpha.com/news/3500254-elliot-management-said-take-stake-hilton-grand-vacations


----------



## Great3

1Kflyerguy said:


> Seeking Alpha is reporting that an activist investor has taken a position in HGV.    Not many details, and i am not familar with Elliot Management to know if thats good news or bad..  Sounds like they are pushing for a sale, so they may just be s short-term trader.
> 
> 
> https://seekingalpha.com/news/3500254-elliot-management-said-take-stake-hilton-grand-vacations



From what I read about Elliot Management, I don't think it's good for HGVC.

Great3


----------



## terces

P2 has upped it's stake in HGV to about 4,5M shares - 5%ish of the company:  
https://finance.yahoo.com/news/p2-capital-partners-llc-buys-213823256.html?.tsrc=rss


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## SmithOp

Blood in the water, the sharks are circling.


Sent from my iPad using Tapatalk Pro


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## mbinpa

For what it is worth...

I have been a Diamond member for a very long time - I purchased my week when it was Sunterra.  I converted to points but did not relinquish my deed or join the trust.  

I have been very happy with Diamond, and am excited and pleased with every acquisition made by Diamond.  With the exception of the high pressure sales tactics, which are not unusual in the industry and preventable by saying no and standing your ground, I have found Diamond properties to be relatively high quality, well maintained and well staffed.  

I have a flexible travel schedule but have found that availablilty is excellent if you are not set on a specific resort on a specific week.  This is especially true in the big markets like Florida, Hawaii and Williamsburg.  My daughters have used Diamond to travel the world, again without too any problems in scheduling and availablility.  (Apparently the Diamond affiliated resort in Bulgaria is the best resort in the country and readily available - why my daughter wanted to go there I don't know, but she loved it.)

I understand the reservations of the members whose resorts are being acquired by DRI, but give it a chance.  I am one of the ones who likes Diamond and the company is only growing the number of resorts in it's family.  I will be truly excited if this goes through.


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## Tamaradarann

mbinpa said:


> For what it is worth...
> 
> I have been a Diamond member for a very long time - I purchased my week when it was Sunterra.  I converted to points but did not relinquish my deed or join the trust.
> 
> I have been very happy with Diamond, and am excited and pleased with every acquisition made by Diamond.  With the exception of the high pressure sales tactics, which are not unusual in the industry and preventable by saying no and standing your ground, I have found Diamond properties to be relatively high quality, well maintained and well staffed.
> 
> I have a flexible travel schedule but have found that availablilty is excellent if you are not set on a specific resort on a specific week.  This is especially true in the big markets like Florida, Hawaii and Williamsburg.  My daughters have used Diamond to travel the world, again without too any problems in scheduling and availablility.  (Apparently the Diamond affiliated resort in Bulgaria is the best resort in the country and readily available - why my daughter wanted to go there I don't know, but she loved it.)
> 
> I understand the reservations of the members whose resorts are being acquired by DRI, but give it a chance.  I am one of the ones who likes Diamond and the company is only growing the number of resorts in it's family.  I will be truly excited if this goes through.



I have had limited stays at Diamond Resorts, but my experience has been favorable and is similar to yours.  My concern over Diamond resorts stems from 2 issues.  One is I ran the number of points and associated maintenance that is needed for weeks in Hawaii versus my stays in Hawaii using HGVC and DRI cost significantly more.  Two is the usage of a trust collection system that is clearly not of homogeneous locations ie.  The Hawaii Collection has a number of resorts in Western Continental United States, which are clearing not in Hawaii.  However, the Western Continental US resorts does provide DRI with more inventory to sell in that Collection than they have in Hawaii.


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## terces

Here's an brief article that talks about buyer interest.  Any speculation on what they mean by ".....strategic bidder"????

https://www.thestreet.com/investing...st-15104002?puc=yahoo&cm_ven=YAHOO&yptr=yahoo


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## escanoe

terces said:


> Any speculation on what they mean by ".....strategic bidder"????



Good question. I read it as a way to set one “strategic bidder” apart from the other bids that were private equity bidders. Like it was a company — that was not just investment capitol — that might see the purchase in their strategic interest.

Update: for more in depth information here is a journal article the Google machine points to that discusses the different strategies of “strategic bidders” as opposed to financial bidders. http://www.mit.edu/~amalenko/stratfin.pdf


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## CalGalTraveler

My guess is it's Hilton Hotels who would see most strategic value in the ownership.

1) Conversion of floors/wings of hotel properties is a way to engender loyalty and stability with franchise base. It helps property owners build a steady stream of maint income to offset the ups and downs of hotel room rentals during economic cycles.

2) They continue to control and extract licensing income on the non-hotel properties (free money)

3) Protects their brand

4) They earn rental income from hosting timeshare rentals on their website.

I sure hope it's them...and they win.


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## escanoe

CalGalTraveler said:


> My guess is it's Hilton Hotels who would see most strategic value in the ownership.



It was not that long ago that they saw it in their strategic interest to spin it off. I am doubtful that is what it is.


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## CalGalTraveler

escanoe said:


> It was not that long ago that they saw it in their strategic interest to spin it off. I am doubtful that is what it is.



True. However there was a time when acquisitions were in vogue with large tech companies in the Silicon Valley. Now the trend is to spin off and make them smaller. 

The spin-off was a balance sheet move to get the real estate off the books. They might have some fancy financial scheme to make this work. Perhaps they have gotten a group of friendly franchise property investors to come together to buy?


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## Jason245

escanoe said:


> It was not that long ago that they saw it in their strategic interest to spin it off. I am doubtful that is what it is.


Every few years companies do spin offs to "unlock value" or mergers to "create synergies".. imho it is a giant shell game where banks and financiers make millions and the little guys and shareholders generally get screwed.  

Examples: Viacom and CBS, att direct TV (they are looking to spin off direct TV now I believe).. all the flip flopping of food brands between Kraft and its competitors.  



Sent from my SM-N950U using Tapatalk


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## Sapper

Jason245 said:


> Every few years companies do spin offs to "unlock value" or mergers to "create synergies".. imho it is a giant shell game where banks and financiers make millions and the little guys and shareholders generally get screwed.
> 
> Examples: Viacom and CBS, att direct TV (they are looking to spin off direct TV now I believe).. all the flip flopping of food brands between Kraft and its competitors.
> 
> 
> 
> Sent from my SM-N950U using Tapatalk



“ Shell game “ is the right word for it, but there is more to it. By doing this it allows for massive tax incentives through write downs, write offs, legal sheltering, etc.  It allows for a legal “cooking the books”. Helps to increase the bottom line which is one way the C-level (CEO, CFO, COO, etc) make bonuses. It also is an easy way to make it look like management is doing something other than sitting in the steam room at the golf club.


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## brp

Sapper said:


> It also is an easy way to make it look like management is doing something other than sitting in the steam room at the golf club.



Meanwhile, most of the deals are likely initiated *while* sitting in the steam room at the golf club.

Cheers.


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## dayooper

Sapper said:


> “ Shell game “ is the right word for it, but there is more to it. By doing this it allows for massive tax incentives through write downs, write offs, legal sheltering, etc.  It allows for a legal “cooking the books”. Helps to increase the bottom line which is one way the C-level (CEO, CFO, COO, etc) make bonuses. It also is an easy way to make it look like management is doing something other than sitting in the steam room at the golf club.



Do you think Hilton reacquiring HGVC is a possibility?


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## CalGalTraveler

dayooper said:


> Do you think Hilton reacquiring HGVC is a possibility?



Possibly, but not in the way one may think. These are Wall St types...Hilton wants the buildings and development costs off the balance sheet. That's what drove the spin-out in the first place.

However Hilton likely wants control over their brand, to continue the licensing revenue stream, and enable deeper relationships and more income options for their franchisees by co-locating HGVC in hotel properties.. A more likely scenario is for Hilton (possibly with Blackstone's help) is to to round up a group of large Hilton hotel franchise developers to buy HGVC as a collective.

Once acquired by the collective they could split HGVC into

1) Building /Dev/inventory side to go with the Hotel Franchise Developers
and
2) sell the reservations, and property management part of the business to Hilton.

This would enable Hilton control over the aspects they focus on and then push the building/development to the hotel franchisees to manage (and off Hilton's balance sheet).


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## Sapper

brp said:


> Meanwhile, most of the deals are likely initiated *while* sitting in the steam room at the golf club.
> 
> Cheers.



Haha, I know an accountant who writes his golf club membership off as a business expense as he states half his business is generated by conversations in the steam room.


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## Sapper

dayooper said:


> Do you think Hilton reacquiring HGVC is a possibility?



Anything is possible. Probable is a different story. As CalGal states, if it does happen, it will probably be done in a way we are not expecting. I think Hilton could have a real interest in the management fees and the unit rental opportunities. I doubt they want the debt or hard physical assets on their balance sheet. Blackstone might be willing to take the hard assets and profit through unit sales... or to create a trust point system with all current unsold inventory. I could see some kind of strategic partnership where each entity has something to gain.  It’s all speculation though.


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## escanoe

Sapper said:


> ... or to create a trust point system with all current unsold inventory.



It seems like all the private equity consultant class has theorized a trust point system is the way to go. I go back to what the HGVC exec said in the last quarterly call .... it is not that easily done or guaranteed to turn out as a success for them. If it was a no-brainer, HGV would have done it already. I could easily imagine the purchaser wishing to try to convert it to a points trust, but I am far from convinced that will be where things go.


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## CalGalTraveler

Speaking of the private equity class and churning buy and sell transactions, weren't Great Wolf Waterparks spun off from Apollo several years ago? Now Blackstone is picking it up.

https://www.spglobal.com/marketintelligence/en/news-insights/trending/sheufhcmgpidklj4fdp1mw2


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## Sapper

escanoe said:


> It seems like all the private equity consultant class has theorized a trust point system is the way to go. I go back to what the HGVC exec said in the last quarterly call .... it is not that easily done or guaranteed to turn out as a success for them. If it was a no-brainer, HGV would have done it already. I could easily imagine the purchaser wishing to try to convert it to a points trust, but I am far from convinced that will be where things go.



I think there will be some kind of trust product in the future for HGVC. Not necessarily because it’s such a great product, but because it’s something analysts have said will work and future management can sell it (to investors) as a way to make more money for the managing entity. They are not with out risk, Hyatt has made a mini disaster with theirs... primarily from management greed I believe.


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## escanoe

Sapper said:


> I think there will be some kind of trust product in the future for HGVC. Not necessarily because it’s such a great product, but because it’s something analysts have said will work and future management can sell it (to investors) as a way to make more money for the managing entity. They are not with out risk, Hyatt has made a mini disaster with theirs... primarily from management greed I believe.



I have done some reading on Hyatt. I would love to own one of their Key West properties. A mini disaster is the way to describe their trust product, though. It seems to me trying to convert HGV to a trust could run into some of the same pitfalls.

It ain’t happening — but I would love for the Hyatt properties to be in the same trading system as HGV.


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## Sapper

escanoe said:


> I have done some reading on Hyatt. I would love to own one of their Key West properties. A mini disaster is the way to describe their trust product, though. It seems to me trying to convert HGV to a trust could run into some of the same pitfalls.
> 
> It ain’t happening — but I would love for the Hyatt properties to be in the same trading system as HGV.



I see some similarities between where Hyatt was when it created the trust points program and where HGVC is now. Specifically, ILG/II acquired the Hyatt properties, had to show investors they could make a profit from the purchase, and created the trust point program using unsold inventory (the stuff no one could sell) at inflated prices to squeeze unrealistic profits from the remaining equity. I can see an acquiring entity believing they can create a points program with unsold HGVC inventory in a similar way.  

I think the Hyatt properties are great, but only resale weeks.


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## CalGalTraveler

Sapper said:


> I see some similarities between where Hyatt was when it created the trust points program and where HGVC is now. Specifically, ILG/II acquired the Hyatt properties, had to show investors they could make a profit from the purchase, and created the trust point program using unsold inventory (the stuff no one could sell) at inflated prices to squeeze unrealistic profits from the remaining equity. I can see an acquiring entity believing they can create a points program with unsold HGVC inventory in a similar way.
> 
> I think the Hyatt properties are great, but only resale weeks.



aka "putting lipstick on a pig."  I find trusts problematic because there are too many opportunities for greed to manipulate inventory and devalue the points. As an industry, the lack of transparency on trusts is appalling. It's like trying to buy a stock mutual fund, but there is no disclosure as to how much of each stock is inside.

I do see however, why the industry has moved to this model. The TS companies are becoming less like property developers with limited inventory and more like year round vacation club point hawkers. 

The only reason deeds are offered in trusts and they haven't gone to RTU is because once people see what poor properties are inside, they would walk. Trust deeds make it difficult to walk.


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## Sapper

CalGalTraveler said:


> aka "putting lipstick on a pig."  I find trusts problematic because there are too many opportunities for greed to manipulate inventory and devalue the points. As an industry, the lack of transparency on trusts is appalling. It's like trying to buy a stock mutual fund, but there is no disclosure as to how much of each stock is inside.
> 
> I do see however, why the industry has moved to this model. The TS companies are becoming less like property developers with limited inventory and more like year round vacation club point hawkers.
> 
> The only reason deeds are offered in trusts and they haven't gone to RTU is because once people see what poor properties are inside, they would walk. Trust deeds make it difficult to walk.



Agree with everything you have said.  I think another reason they have to use the deeds in a trust is because of how the unit weeks were originally sold. If someone were making a system today from scratch, I think it would just be RTU and they would avoid the trust situation all together.  The developer could still write in some kind of language that would require a buyer to pay maintenance fees on a RTU to the end of the contract term or face consequences to their credit.  Make it an unpaid liability and bury the language in small print on page 33 of a 50 page contract.


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## Jason245

You mean like what dvc did on the 90s.. lol. 

Sent from my SM-N950U using Tapatalk


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## brp

Jason245 said:


> You mean like what dvc did on the 90s.. lol.



We've owned DVC since the early 2000s, so I don't know that they did to their product in the 90s. Can you enlighten, inasmuch as it may be relevant here?

Cheers.


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## Tamaradarann

Sapper said:


> I see some similarities between where Hyatt was when it created the trust points program and where HGVC is now. Specifically, ILG/II acquired the Hyatt properties, had to show investors they could make a profit from the purchase, and created the trust point program using unsold inventory (the stuff no one could sell) at inflated prices to squeeze unrealistic profits from the remaining equity. I can see an acquiring entity believing they can create a points program with unsold HGVC inventory in a similar way.
> 
> I think the Hyatt properties are great, but only resale weeks.



I believe you are saying here what I have been saying about my problem with DRI's Hawaii Collection Trust.  I believe most people agree that Timeshares and Vacations in Hawaii are very desirable.  Typically Hawaii Properties sell for more than others and are the most challenging to book time.  DRI calls it a Hawaii Trust but more than 1/2 the properties in the trust are NOT Hawaii Properties.  Therefore, DRI has the ability to sell shares/points in their Hawaii Collection Trust without owning/developing more Hawaii Properties since they have many unsold units in the non Hawaii Properties they own that they have placed in that trust.


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## Tamaradarann

CalGalTraveler said:


> aka "putting lipstick on a pig."  I find trusts problematic because there are too many opportunities for greed to manipulate inventory and devalue the points. As an industry, the lack of transparency on trusts is appalling. It's like trying to buy a stock mutual fund, but there is no disclosure as to how much of each stock is inside.
> 
> I do see however, why the industry has moved to this model. The TS companies are becoming less like property developers with limited inventory and more like year round vacation club point hawkers.
> 
> The only reason deeds are offered in trusts and they haven't gone to RTU is because once people see what poor properties are inside, they would walk. Trust deeds make it difficult to walk.



I am repeating the comment I made in my previous post since I believe it is relevant to your comment here about "putting lipstick on a pig".  DRI calls it a Hawaii Trust but more than 1/2 the properties in the trust are NOT Hawaii Properties. Therefore, DRI has the ability to sell shares/points in their Hawaii Collection Trust without owning/developing more Hawaii Properties since they have many unsold units in the non Hawaii Properties they own that they have placed in that trust.

The following is in reference to your comment about TS companies becoming less like property developers and more like year round vacation club point hawkers.   The destination or vacation club industry has developed without needing to acquire/develop ANY PROPERTIES.  So why shouldn't TS companies extend their reach into the opportunities in that industry with what they own rather than letting the destination or vacation club industry reap all the benefits without needing any capital and taking any of the risk of development!


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## Jason245

brp said:


> We've owned DVC since the early 2000s, so I don't know that they did to their product in the 90s. Can you enlighten, inasmuch as it may be relevant here?
> 
> Cheers.


Dvc is a rtu system where all you really own is points in a system and preferences at 1 resort.. while there are deeds they are not really deeds.. it is trustish.. 

Sent from my SM-N950U using Tapatalk


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## brp

Jason245 said:


> Dvc is a rtu system where all you really own is points in a system and preferences at 1 resort.. while there are deeds they are not really deeds.. it is trustish..
> 
> Sent from my SM-N950U using Tapatalk



Gotcha. I have not really followed the nuances of the trust discussion (despite some really good input here from very knowledgeable people). But, if it actually ends up with something like that, I'd be fine. In fact, in our current use of HGVC, we use it exactly like our DVC - a stash of points that have a home resort preference and default to "just points" at some point. For DVC, we do use Home Resort. For HGVC, we don't.

Cheers.


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## dougp26364

There is a post in one of the DRI threads where someone who listened to a Hilton investors call said that they spoke about the merger in the form all the Hawaii collection (maybe just the Hawaii resorts) would be branded Hilton and the rest of DRI would be the US collection.

I’ll believe it when I see it but, interesting to speculate I suppose. 

Interestingly, we’ll be at a HGVC timeshare later today. They have NOT called to attempt to get us into an owners update. Maybe they took it to heart the last time we said no?


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## CalGalTraveler

brp said:


> Gotcha. I have not really followed the nuances of the trust discussion (despite some really good input here from very knowledgeable people). But, if it actually ends up with something like that, I'd be fine. In fact, in our current use of HGVC, we use it exactly like our DVC - a stash of points that have a home resort preference and default to "just points" at some point. For DVC, we do use Home Resort. For HGVC, we don't.
> 
> Cheers.



Actually these trusts are quite different than HGVC (and possibly DVC) because HGVC points values are anchored with a specific deed. Very hard to devalue or change. In trusts, they are anchored to the portfolio of deeds which tend to be low value mud season units they can't sell with higher MF. The developer can shift deeds in and out of the trust at will affecting your MF and the underlying portfolio that you can reserve.


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## JIMinNC

CalGalTraveler said:


> Actually these trusts are quite different than HGVC (and possibly DVC) because HGVC points values are anchored with a specific deed. Very hard to devalue or change. In trusts, they are anchored to the portfolio of deeds which tend to be low value mud season units they can't sell with higher MF. The developer can shift deeds in and out of the trust at will affecting your MF and the underlying portfolio that you can reserve.



It's not always true that the trusts are low value/unsold weeks. At least in Marriott's trust, all new resorts are 100% in the trust and through ROFR and buybacks, they have added quite a bit of high quality legacy inventory to their trust. Then on top of that, deeded weeks owners can enroll their weeks into the points system, and while that does not transfer the deed into the trust (the owner retains their deed & just adds points as another usage election option), MVC maintains an internal exchange entity where Trust weeks and those elected weeks are effectively co-mingled, given Trust and other points users great access to high quality weeks. So it CAN work better than the trusts that are dominated by low value weeks.


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## terces

JIMinNC said:


> It's not always true that the trusts are low value/unsold weeks. At least in Marriott's trust, all new resorts are 100% in the trust and through ROFR and buybacks, they have added quite a bit of high quality legacy inventory to their trust. Then on top of that, deeded weeks owners can enroll their weeks into the points system, and while that does not transfer the deed into the trust (the owner retains their deed & just adds points as another usage election option), MVC maintains an internal exchange entity where Trust weeks and those elected weeks are effectively co-mingled, given Trust and other points users great access to high quality weeks. So it CAN work better than the trusts that are dominated by low value weeks.


I have been wondering about this scenario if it is applied to HGVC.  Does the Marriott Trust have the same booking window as the deeded owners??  Is it possible that a new owner could devalue the Club ownership by opening up the Trust to bookings earlier than the current 9 month window?  Also I don't know if Marriott had MF's that were specific to each resort and in some cases quite a bit lower or higher in some resorts as HGVC does, but did they force everyone into the same MF structure?


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## JIMinNC

terces said:


> I have been wondering about this scenario if it is applied to HGVC.  Does the Marriott Trust have the same booking window as the deeded owners??  Is it possible that a new owner could devalue the Club ownership by opening up the Trust to bookings earlier than the current 9 month window?  Also I don't know if Marriott had MF's that were specific to each resort and in some cases quite a bit lower or higher in some resorts as HGVC does, but did they force everyone into the same MF structure?



In Marriott deeded week owners can book their deeded week (non points) when inventory is released at 12 months out (13 months for multi-week owners). The Trust can reserve specific intervals on the same terms as any other owner. The weeks reserved by the Trust are then made available for points reservations a couple days later but the weeks and points inventory stays in two separate buckets. The specific inner workings of inventory management are very opaque and are something of a “black box.”

Each resort in Marriott has specific unique maintenance fees just like HGVC. For owners of deeded weeks, they still pay their regular weeks maintenance fees as always. Even if they enroll their week in the MVC points system, their week maintenance fee stays the same. 

Marriott stopped selling deeded weeks in 2010 and started only selling points interests in their Trust product. All Trust points owners currently pay the same MF per point, which is the average of all the MF for weeks owned by the Trust plus the operating costs for the Trust itself.


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## ocdb8r

Trust products are a double-edged sword for both developers and buyers.  They have some real advantages from a sustainability point (in my opinion) as the default risk is spread out among a much larger base of owners/resorts.  

*Developers*

+ Trust arrangements allow more control over the long term
+ Trust products allow nearly infinite packages to sell
+ Trust products allow a more stable sales cycle and infrastructure (not tied to the start/stop/finish cycle of individual resort projects)
+ Trust products spread default risks across a broader pool
- Trust products are harder to manipulate pricing based on individual resort attractiveness (main lever is elevating number of points required for newer resorts but there is (some) pressure on this lever to avoid alienating current customers...I know many of the developers do it, but it always with lots of screaming).
- Trust products require a more robust legal arrangement 
- Trust products are harder to sell as "deeded property" (which used to be a selling point for timeshares, but I think most consumers could care less at this point).
*Owners* (or Prospective owners)

+ Trust products spread default risk across a broader pool
+ Trust products are able to be designed to better reflect supply/demand dynamics and seasonality (someone occupying week 52 in Lake Tahoe is not paying the same maintenance fee as someone occupying (mud) week 18)
+ Trust products allow greater resort diversity and usually more flexible vacation lengths (points overlays also allow this, but not to the same extent as a true trust product)
- Trust products entrench developers more and reduce owner rights/powers
- Trust products spread resort costs across a broader pool (this can be a win or lose depending on what resorts you actually vacation at)
I don't think they are all good or all bad.  For many of us longer term timeshare owners who have been able to maximize our ownership via trading lower value weeks for higher value weeks or focusing on weeks with the lowest (overlay) points/maintenance fee ratio, trust products take some of the fun out of the game.


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## Cyberc

ocdb8r said:


> Trust products are a double-edged sword for both developers and buyers.  They have some real advantages from a sustainability point (in my opinion) as the default risk is spread out among a much larger base of owners/resorts.
> 
> *Developers*
> 
> + Trust arrangements allow more control over the long term
> + Trust products allow nearly infinite packages to sell
> + Trust products allow a more stable sales cycle and infrastructure (not tied to the start/stop/finish cycle of individual resort projects)
> + Trust products spread default risks across a broader pool
> - Trust products are harder to manipulate pricing based on individual resort attractiveness (main lever is elevating number of points required for newer resorts but there is (some) pressure on this lever to avoid alienating current customers...I know many of the developers do it, but it always with lots of screaming).
> - Trust products require a more robust legal arrangement
> - Trust products are harder to sell as "deeded property" (which used to be a selling point for timeshares, but I think most consumers could care less at this point).
> *Owners* (or Prospective owners)
> 
> + Trust products spread default risk across a broader pool
> + Trust products are able to be designed to better reflect supply/demand dynamics and seasonality (someone occupying week 52 in Lake Tahoe is not paying the same maintenance fee as someone occupying (mud) week 18)
> + Trust products allow greater resort diversity and usually more flexible vacation lengths (points overlays also allow this, but not to the same extent as a true trust product)
> - Trust products entrench developers more and reduce owner rights/powers
> - Trust products spread resort costs across a broader pool (this can be a win or lose depending on what resorts you actually vacation at)
> I don't think they are all good or all bad.  For many of us longer term timeshare owners who have been able to maximize our ownership via trading lower value weeks for higher value weeks or focusing on weeks with the lowest (overlay) points/maintenance fee ratio, trust products take some of the fun out of the game.



From your post it seems that its only the developers that have something to gain by doing this.

Selling bundled products with crappy weeks with high value weeks gives you at best a mediocre product. I can see why developers want to do it, they can put in the silver weeks and a few platinum weeks and sell those. 

Its a win-win for the developers and a lose-lose for the buyer.

This might have been covered already in the lengthy thread but what are the risks for current owners if a trust product is introduced? Will we still be able to book our home resort as we normally do in club season and at 12 months?


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## Ralph Sir Edward

Cyberc said:


> From your post it seems that its only the developers that have something to gain by doing this.
> 
> Selling bundled products with crappy weeks with high value weeks gives you at best a mediocre product. I can see why developers want to do it, they can put in the silver weeks and a few platinum weeks and sell those.
> 
> Its a win-win for the developers and a lose-lose for the buyer.
> 
> This might have been covered already in the lengthy thread but what are the risks for current owners if a trust product is introduced? Will we still be able to book our home resort as we normally do in club season and at 12 months?



It all depends no how the trust is set up.

A Marriott style trust setup would wreck the current home resort system. Who knows how the possible trust would be set up?

A pure trust system would have no conflict, as there would be no legacy ownership to worry about. Everybody would have equal access (as defined) to all inventory.

The real set of headaches is with the "hybrid" systems. How do you balance the rights of week owners with the rights of trust owners? In other words, how do you settle the conflict between trust owner and week owner over a single week? I will compare current HGVC system with Marriott.

HGVC settles the issue simply by giving the week owner an initial priority over the Points user, (Think of the HGVC points system as a sort of a points trust.) with a 3 month home week preference. This way, if you paid for a high valued week, like Hawaii (that you are paying high priced MFs for), you get first crack at the inventory. (Why not? You are paying for the privilege. . .) The drawback, of course, is the points (trust) users get the "leftovers".

The Marriott system works just the opposite. It gives the Trust system the first crack at the inventory. (This is controversial, but it is what I have personally observed, so I stand by my heresy.) There is a pecking order with Marriott, post Trust, as follows. The more weeks, the higher in the pecking order. The Trust effectively gets the first crack at inventory. (After all, their reservation computer program could "kick off" faster than any external person. How they actually reserve is a "black box"; nobody but MVC really knows how they do their DC reservations; nor is there any way to do an external "audit" of what they say.)

Of the inventory not allocated to the DC Trust, there are two window for reservations - the 13 month reservation and the 12 month reservation. Half the inventory is allocated to the 13th month window and half is allocated to the 12 month window. The 13th month reservation is for multiple week owners only, plus they have the right to reserve a reservation chain starting at the first week available at the 13th month. (reservation chain -  I own say 4 weeks. I can book a week at the 13th month window and then book the other weeks, into the future, one week after the other. Advantage? I want an ultra high value week, say spring break. I start the chain 4 week in advance of the spring break week. Voila! I booked the spring break week in advance of everybody who doesn't have 4 weeks (or more). I then free up the first three weeks to make other, less valuable reservations.) The 12 month window is for everybody.

So the pecking order is Trust (black box), multiweek owners (with a pecking order inside of multiweek owners based on the number of week owned) , who have 2 windows to reserve with (access to all non trust reserved inventory), and single week owners who get only the access to 12 month window (1/2 of the non Trust inventory) competing with any residual demand from the multi week owners.

What would the HGVC merged "trust" look like? I don't know.

And what about affiliates? I did ask the President of Bay Club, and got a political answer back - much talk but no actual answer to the question. (The question was - would non-HGVC owners (it's an affiliate, remember, HGVC membership is not required) still have a owner's window, if HGVC went to something like a Marriott system.)


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## JIMinNC

Ralph Sir Edward said:


> The Marriott system works just the opposite. It gives the Trust system the first crack at the inventory. (This is controversial, but it is what I have personally observed, so I stand by my heresy.) There is a pecking order with Marriott, post Trust, as follows. The more weeks, the higher in the pecking order. The Trust effectively gets the first crack at inventory. (After all, their reservation computer program could "kick off" faster than any external person. How they actually reserve is a "black box"; nobody but MVC really knows how they do their DC reservations; nor is there any way to do an external "audit" of what they say.)
> 
> Of the inventory not allocated to the DC Trust, there are two window for reservations - the 13 month reservation and the 12 month reservation. Half the inventory is allocated to the 13th month window and half is allocated to the 12 month window. The 13th month reservation is for multiple week owners only, plus they have the right to reserve a reservation chain starting at the first week available at the 13th month. (reservation chain -  I own say 4 weeks. I can book a week at the 13th month window and then book the other weeks, into the future, one week after the other. Advantage? I want an ultra high value week, say spring break. I start the chain 4 week in advance of the spring break week. Voila! I booked the spring break week in advance of everybody who doesn't have 4 weeks (or more). I then free up the first three weeks to make other, less valuable reservations.) The 12 month window is for everybody.
> 
> So the pecking order is Trust (black box), multiweek owners (with a pecking order inside of multiweek owners based on the number of week owned) , who have 2 windows to reserve with (access to all non trust reserved inventory), and single week owners who get only the access to 12 month window (1/2 of the non Trust inventory) competing with any residual demand from the multi week owners.



I think you are correct that the Trust bookings/allocations are likely automated and they probably get their units reserved/allocated for any given week before most owners have the option to click "Reserve". However, based on information that has been posted on the TUG Marriott board over the years by a couple of TUGgers who seem to have had a contact of some sort within MVC management, they have been told that the Trust only is allowed to reserve proportional to their ownership of that particular component. In other words, if the Trust owns 40% of the Platinum season 2BR Ocean Front units at Hilton Head Grande Ocean, for any given week, they will allocate no more than 40% of the intervals for Trust owners, since that is proportional to their ownership. As you say, though, it is a "black box" and we have no way to conclusively audit exactly how they ARE doing it. I will say though, that over the last several years, I have been able to easily book prime time Maui whale season weeks with both our deeded weeks and our MVC points, and have seen no evidence that MVC sucks up all of the good weeks for the Trust and leaves the dregs for deeded week bookings.


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## JIMinNC

Cyberc said:


> This might have been covered already in the lengthy thread but what are the risks for current owners if a trust product is introduced? Will we still be able to book our home resort as we normally do in club season and at 12 months?



No one knows how they would set it up if they ever did do a Trust, but here is one way they could do it within the current HGVC structure:

They set up a US land trust into which they transfer all unsold weeks. At resorts that are sold out, the initial supply of weeks would be those they have reacquired through upgrades, ROFR, foreclosure, etc., so it would likely be a mix of all seasons, views, and unit types. At resorts where they are still actively selling "new" inventory, it would be whatever hasn't been sold, and the mix would depend upon what has already been sold.
All new resorts would go 100% into the Trust.
They could increase ROFR and/or buybacks to seed more attractive inventory into the Trust, focusing on resorts with limited inventory to make the Trust product more attractive to sell.
Once the Trust is set up and seeded with weeks, here is one way booking could work within the HGVC system.

Trust pool owners would have home resort priority for any inventory owned by the Trust from 12-9 months.
If the Trust owned 20% of a given unit type/season at a resort, once Trust owners booked 20% of the matching inventory at that resort, all home week availability for Trust owners would be gone. Given the way Hilton releases inventory, this allocation may have to be done on a week-by-week basis.
At nine months, the remaining Trust owned inventory would become available for club bookings just as happens today.
Existing deeded weeks owners would retain their home resort and club booking rights just as they do today.


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## terces

If they go they decide to incorporate a Trust I can imagine that there will be numerous efforts to not only push the deeded owners to convert, but also to charge substantial fees for conversion, possibly by packaging extra benefits.  Has this happened in MVC or elsewhere?


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## JIMinNC

terces said:


> If they go they decide to incorporate a Trust I can imagine that there will be numerous efforts to not only push the deeded owners to convert, but also to charge substantial fees for conversion, possibly by packaging extra benefits.  Has this happened in MVC or elsewhere?



In MVC you don't "convert" to the Trust. Legacy weeks owners can "enroll" in the points system (weeks owned prior to the 2010 launch of the Trust/points system) for a fee and sometimes even for free as an incentive to attend a presentation. This does not require the pre-2010 owner to surrender their deed and convert to Trust points. They still own what they have always owned, they just receive a points allocation for their week and can elect to convert their week to MVC Points in any given year if they so choose. That conversion effectively deposits their week for that year into an exchange pool along with the Trust-owned weeks, but they still own their deed. Resale weeks acquired after June 2010 are generally not eligible to "enroll" and can only be used as home weeks or for Interval International trades. MVC does offer enrollment specials for these post-2010 resale weeks from time-to-time, but those generally require purchase of at least 3000 Trust points at $12-$14/point ($35K+).

MVC no longer sells weeks in the U.S., so whenever current weeks owners go to a sales presentation, they are pitched Trust points as the way to add-on to their ownership. At least to date, I do not think that MVC has actively pursued the "trade-in your deed" sales approach. The Vistana side of their business (Westin and Sheraton Vacation Club) does use the trade-in approach, I believe, to upgrade their owners from deeded weeks to their Flex Trust products. It remains to be seen if, now that MVC and Vistana have common corporate ownership, whether the trade-in angle gets some traction on the MVC side.


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## ski_sierra

JIMinNC said:


> I think you are correct that the Trust bookings/allocations are likely automated and they probably get their units reserved/allocated for any given week before most owners have the option to click "Reserve". However, based on information that has been posted on the TUG Marriott board over the years by a couple of TUGgers who seem to have had a contact of some sort within MVC management, they have been told that the Trust only is allowed to reserve proportional to their ownership of that particular component. In other words, if the Trust owns 40% of the Platinum season 2BR Ocean Front units at Hilton Head Grande Ocean, for any given week, they will allocate no more than 40% of the intervals for Trust owners, since that is proportional to their ownership. As you say, though, it is a "black box" and we have no way to conclusively audit exactly how they ARE doing it. I will say though, that over the last several years, I have been able to easily book prime time Maui whale season weeks with both our deeded weeks and our MVC points, and have seen no evidence that MVC sucks up all of the good weeks for the Trust and leaves the dregs for deeded week bookings.


It's good to see that MVC is being fair to all owners but I don't understand how this behavior aligns with MVC's business model. Marriott seasons often include a bunch of weeks that are not platinum at all. I think at Park City, some weeks are platinum when the ski resort is not even open. This variation in platinum-ness can be seen clearly in the DC points chart. Since a large % of the revenue comes from current owners and they want to sell Trust points, it would make sense for them to provide all the true platinum weeks to the trust owners to keep them happy. Leave the junk platinum inventory for the weeks owners. It is really hard to see why they would continue to be fair to weeks owners. In fact, it would make more business sense to make it difficult for unenrolled owners to book the true platinum weeks and tell them if they want to book the real platinum weeks, they need to spend tens of thousands to buy into the trust. Then repeat the process when the owner sells the week to someone else since enrollment doesn't transfer with resale. They have been fair so far but it is difficult to rationalize why they would continue to be fair in future. Unless there is some legal reason to do so.

I feel a lot safer with HGVC. My week is fixed and they cannot screw me out of usage even if they came up with a trust.


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## terces

JIMinNC said:


> In MVC you don't "convert" to the Trust. Legacy weeks owners can "enroll" in the points system (weeks owned prior to the 2010 launch of the Trust/points system) for a fee and sometimes even for free as an incentive to attend a presentation. This does not require the pre-2010 owner to surrender their deed and convert to Trust points. They still own what they have always owned, they just receive a points allocation for their week and can elect to convert their week to MVC Points in any given year if they so choose. That conversion effectively deposits their week for that year into an exchange pool along with the Trust-owned weeks, but they still own their deed. Resale weeks acquired after June 2010 are generally not eligible to "enroll" and can only be used as home weeks or for Interval International trades. MVC does offer enrollment specials for these post-2010 resale weeks from time-to-time, but those generally require purchase of at least 3000 Trust points at $12-$14/point ($35K+).
> 
> MVC no longer sells weeks in the U.S., so whenever current weeks owners go to a sales presentation, they are pitched Trust points as the way to add-on to their ownership. At least to date, I do not think that MVC has actively pursued the "trade-in your deed" sales approach. The Vistana side of their business (Westin and Sheraton Vacation Club) does use the trade-in approach, I believe, to upgrade their owners from deeded weeks to their Flex Trust products. It remains to be seen if, now that MVC and Vistana have common corporate ownership, whether the trade-in angle gets some traction on the MVC side.


So has the result of all this with MVC been a devaluing of the resale value of fixed weeks??  I do know that MVC charges a monster activation fee of approximately $3 per point for any resales, which probably suppresses the resale value a lot.  Is there any value to the MVC weeks now, or are they a throw-away?


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## ski_sierra

terces said:


> So has the result of all this with MVC been a devaluing of the resale value of fixed weeks??  I do know that MVC charges a monster activation fee of approximately $3 per point for any resales, which probably suppresses the resale value a lot.  Is there any value to the MVC weeks now, or are they a throw-away?



If I had to guess, only 5% of Marriott weeks are worth > $10k. A fixed week 51, 52 in Hawaii or ski resorts is certainly valuable. Weeks that require a large amount of DC points are also valuable.

I think more than 50% of Marriott weeks are worth less than $5k because Marriott has higher MF than HGVC and resale buyers are not treated well. A good 25% of those are negative value because they are low season with high MF. You can stay @ Marriotts in low season easily with exchanges or getaways.

But usage value is different than monetary value. I own a Marriott junk week which is valuable to me because of the exchange preference but it doesn't have much monetary value (< $2k).


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## CalGalTraveler

One thing that is interesting about MVC is that weeks that are enrolled in their points program (equivalent to HGVC points associated with a deed) can be worth more than the underlying week because those points can be rented out from ANY MVC property (unlike HGVC, and Vistana which limit you to your home week). This incents many long-time owners of worthless weeks from deeding back and defaulting because they can get a lot more value through use, or by instantly renting out their points to other owners without having to be a landlord. Similarly, if you own a base level of points in their trust, you can rent points from other owners. This is an added dimension to MVC points which is attractive.


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## ski_sierra

CalGalTraveler said:


> One thing that is interesting about MVC is that weeks that are enrolled in their points program (equivalent to HGVC points associated with a deed) can be worth more than the underlying week because those points can be rented out from ANY MVC property (unlike HGVC, and Vistana which limit you to your home week). This incents many long-time owners of worthless weeks from deeding back and defaulting because they can get a lot more value through use, or by instantly renting out their points to other owners without having to be a landlord. Similarly, if you own a base level of points in their trust, you can rent points from other owners. This is an added dimension to MVC points which is attractive.



Another thing to consider is reservations with MVC points are pretty expensive. Atleast 5k points for 2 BR in peak season. Often times you can do better by renting it straight from Redweek instead of renting points from another owner. Using points for low season or low points weeks also has limited value since you can exchange into most low season resorts easily or stay on a getaway. Unless you want to stay in a studio. One Marriott studio stayed in was hardly better than a hotel room so I am not too keen on doing that.

MVC points have some niche use cases but when I looked into it, the cost benefit ratio was not very attractive for me and I felt I could do better in other programs. I feel the best time to buy Marriott was over 10 years ago.


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## CalGalTraveler

In HGVC all properties are automatically enrolled in the points program with the initial points activation fee.

In MVC, weeks enrollment in their points program is optional and can be pricey requiring a purchase during a presentation of their pure "DC" points trust in addition to re-qualifying the resale property in the points trading system.

Many MVC weeks are falling out of their points trust inventory because enrolled points owners sell and the resale buyers aren't automatically re-enrolled like HGVC.

It wouldn't surprise me if MVC offers a mass re-enrollment campaign to get more weeks inventory available in their system, in conjunction with integrating the Vistana network (I hope I will be able to enroll my Westin unit to participate.)


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## ski_sierra

CalGalTraveler said:


> Many MVC weeks are falling out of their points trust inventory because enrolled points owners sell and the resale buyers aren't automatically re-enrolled like HGVC.
> 
> It wouldn't surprise me if MVC offers a mass re-enrollment campaign to get more weeks inventory available in their system, in conjunction with integrating the Vistana network (I hope I will be able to enroll my Westin unit to participate.)



What would be MVC's angle in offering this type of enrollment? How does that enable them to extract more money from current and new owners? I think majority of new owners don't buy based on any research (why would they buy direct if they did their research?) so there is no reason for the trust to acquire good weeks. The resale weeks owners who bought previously enrolled weeks probably bought for a reason and most of them wouldn't buy trust points from Marriott anyway unless they are pursuing some type of high volume enrollment of weeks.


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## CalGalTraveler

ski_sierra said:


> What would be MVC's angle in offering this type of enrollment? How does that enable them to extract more money from current and new owners? I think majority of new owners don't buy based on any research (why would they buy direct if they did their research?) so there is no reason for the trust to acquire good weeks. The resale weeks owners who bought previously enrolled weeks probably bought for a reason and most of them wouldn't buy trust points from Marriott anyway unless they are pursuing some type of high volume enrollment of weeks.



Two reasons:

1) Fast, low risk money with high profit margin.
2) Network effects - obtaining more properties as trust inventory - potential upsell later for enrolled user after taking a bite of the points apple.

There has been a discussion on the MVC board but ultimately they have two choices with the Vistana integration:

1) *Drip approach* - convince owners one by one in a presentation to enroll and buy DC points for high $$$$.
        Risks: We could be in a recession sometime in the near future. People will not spend.
                  Those who would have converted at this price already have; market is saturated.
                  Presentations are expensive margin-wise.

2) *Low fee mass enrollment: *Charge a low fee to gain mass conversion.
      e.g. to your point, many Maui owners like us and MOC owners bought to use but would like to occasionally trade but don't want to trade full weeks in II. We want to rent out our points at times (I wouldn't mind renting out points instantly, but being a landlord is a hassle). The price tag in #1 is not justified but #2 might be                     worthwhile for these occasional trades.

      someone ran a calculation on the MVC board that found if MVC could create a digital campaign to mass convert a significant portion of the remaining 40% of unenrolled MVC weeks plus Vistana, it could add up
      to  $400 million to their topline every year with high profit = easy money. Low risk.


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## CalGalTraveler

Here is the quote I was referencing in my prior post about mass enrollment:



DannyTS said:


> More people paying DC fees is good for the company and probably good for everyone. If 200,000 unrolled owners suddenly pay $200 a year in DC fees, this is 400 million dollars that go straight to the earnings in the next 10 years. If they charge $1k for enrollment it adds another 200 millions to their bottom line right away! Does anyone know what kind of growth, what kind of effort they need to match that from the traditional sales?
> To put things in prospective, they make about 150 millions in earnings from selling VOIs. If they increase their sales by 10% they will earn an additional 15 millions a year.


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## ski_sierra

Interesting analysis. Let's see how this plays out.

Meanwhile, I hope HGVC program doesn't get destroyed by a new owner.


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## JIMinNC

terces said:


> So has the result of all this with MVC been a devaluing of the resale value of fixed weeks??  I do know that MVC charges a monster activation fee of approximately $3 per point for any resales, which probably suppresses the resale value a lot.  Is there any value to the MVC weeks now, or are they a throw-away?



I was not a Marriott owner prior to the advent of points in 2010, but based on stuff I’ve read on the Marriott board here, resale weeks tended to sell for more 10 years ago. But the Great Recession tanked values too, so you can’t attribute all the decline to the points system. The fact that points don’t convey with resales probably has helped keep values from recovering fully from the recession-induced drop.

As far as values today, Hawaii MVC annual weeks sell for $10k to over $35k depending on resort and view, etc. The bigger Hilton Head resorts sell for $7k to $25k for Gold and Platinum OS/OV/OF. Aruba is in the same range. Those are the ones I’m most familiar with, but most Platinum and even some Gold MVC weeks at the major resorts sell for a minimum of $5k to $10k and up to $25K.

One clarification, the $3 per point fee to MVC on resales only applies to resale Trust points, not resale weeks. Since points don’t convey when weeks are resold, there is no such fee. Only a $95 ROFR waiver fee and a $25 transfer fee.


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## JIMinNC

ski_sierra said:


> If I had to guess, only 5% of Marriott weeks are worth > $10k. A fixed week 51, 52 in Hawaii or ski resorts is certainly valuable. Weeks that require a large amount of DC points are also valuable.
> 
> I think more than 50% of Marriott weeks are worth less than $5k because Marriott has higher MF than HGVC and resale buyers are not treated well. A good 25% of those are negative value because they are low season with high MF. You can stay @ Marriotts in low season easily with exchanges or getaways.



I think the 5% number is way low for values over $10k. Most if not all EY Hawaii weeks top that number if they are OV or OF, not just holiday weeks. Platinum OF/OV weeks in Hilton Head, Aruba, St Thomas, St Kitts, FL Palm Beaches, and Newport Coast should also be over $10k, I think. Platinum ski weeks probably are also, but I don’t really follow those. But given the percentage of MVC locations covered by the real noted above, I think the number may be closer to 25% than 5%.

My experience has always been that HGVC and MVC resale weeks seem reasonably comparable in price, but since so much HGVC is concentrated in Orlando, Vegas, Big Island, and Waikiki, it’s hard to compare apples to apples with MVC’s more extensive geographic reach.


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## JIMinNC

ski_sierra said:


> Since a large % of the revenue comes from current owners and they want to sell Trust points, it would make sense for them to provide all the true platinum weeks to the trust owners to keep them happy. Leave the junk platinum inventory for the weeks owners. It is really hard to see why they would continue to be fair to weeks owners. In fact, it would make more business sense to make it difficult for unenrolled owners to book the true platinum weeks and tell them if they want to book the real platinum weeks, they need to spend tens of thousands to buy into the trust. Then repeat the process when the owner sells the week to someone else since enrollment doesn't transfer with resale. They have been fair so far but it is difficult to rationalize why they would continue to be fair in future. Unless there is some legal reason to do so.



What you have to remember is that for all practical purposes points used by an enrolled owner function exactly like Trust points in the MVC system. Both varieties of points generally get co-mingled in the internal Exchange pool, so Trust owners are not limited to booking just the weeks allocated to the Trust ownership, and enrolled owners are not just limited to weeks deposited into the pool by other enrolled owners. Basically any person using MVC Points has access to the Trust inventory as well as the enrolled inventory that owners opt to elect for points. So that tends to expand the availability of desirable weeks, probably making it less necessary for MVC to play games. MVC still has to allocate specific inventory each week to Points vs. Weeks, but my suspicion is both pools are now large enough that they can satisfy demand in most cases without resorting to the types of games you suggest would be in their interest. I think they understand that happy owners are more likely to buy more points, so maybe they feel using the carrot approach is more effective than using the negative/stick approach.

Having said all that, MVC sales has long used the fear of losing access if you don't own Trust points as a sales/fear tactic to entice/scare enrolled owners into buying Trust points, but based on everything I've experienced and also read on the Marriott board here over the last five or six years, that fear is unjustified and top season Platinum weeks are still available to weeks owners, and points owners also get their share. From time-to-time there will be specific cases where a Marriott owner comes onto TUG complaining that they can no longer book the weeks they used to be able to book and blame that on MVC hogging the inventory for Points usage, but for every one of those, there will generally be someone else who responds and says they had no issue booking what the complaining person said they couldn't. So as in anything else in timeshares, YMMV.


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## GT75

I know that this thread has been has been speculation on what could happen but it has been an educational experience for me anyways about two other TS systems.  I am thankful for those that have taken the time to inform us HGVC only types.   I also see that implementing a trust product for HGVC isn’t straightforward and I don’t really thinks that it will solve the problem either.  In fact, it could actually have the opposite effect that HGV is looking for.


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## dayooper

JIMinNC said:


> *My experience has always been that HGVC and MVC resale weeks seem reasonably comparable in price, but since so much HGVC is concentrated in Orlando, Vegas, Big Island, and Waikiki, it’s hard to compare apples to apples with MVC’s more extensive geographic reach.*



I do believe that’s HGVC’s biggest drawback is lack of geographic reach. While it has gotten better with the additions of Southern California, South Carolina, Chicago and the ski resorts, they need more. As a Midwesterner, there is only one easy trip for me (Chicago) so there needs to be some closer. Everything else is at least a two day drive.

With that being said, isn’t it a little more cost effective with HGVC? The flexibility of the system combined with the generally lower MF’s make the cost of ownership and travel lower than MVC Weeks? At least that’s what I have been thinking. I haven’t really been studying MVC so I could be very wrong, but it seems the MF’s are, on average, lower with HGVC.


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## Ralph Sir Edward

dayooper said:


> I do believe that’s HGVC’s biggest drawback is lack of geographic reach. While it has gotten better with the additions of Southern California, South Carolina, Chicago and the ski resorts, they need more. As a Midwesterner, there is only one easy trip for me (Chicago) so there needs to be some closer. Everything else is at least a two day drive.
> 
> With that being said, isn’t it a little more cost effective with HGVC? The flexibility of the system combined with the generally lower MF’s make the cost of ownership and travel lower than MVC Weeks? At least that’s what I have been thinking. I haven’t really been studying MVC so I could be very wrong, but it seems the MF’s are, on average, lower with HGVC.



Yes, HGVC is cheaper on an ongoing manner (MFs) than MVC. Plus a week owner has an initial priority over a points owner, unlike MVC. Retail prices tend to be higher. MVC has more different places, though. You pays your money and makes your choice.


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## Ralph Sir Edward

I know this is a HGVC thread, but I will insert the following on MVC. . . 

MVC could solves all it's problems between legacy owners and points owners - and make a big ongoing profit, to boot!

HOW?????

Offer any (and all) legacy weeks owners the right to join the DC trust, under the following term. The price to joins is the current bunch of up-front fees, plus current resale value Marriott charges for transfer fees (currently $3 a point). Once joined, it can't be reverted back to no DC trust property type.

The advantage to Marriott is - every time the the week is resold, they would get $3 a point, for nothing. No sale force, ect. Plus if the purchaser is new to Marriott, all those joining fees. Currently Marriott get nothing from resales of weeks.


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## CalGalTraveler

FWIW...It's interesting that MVC is now pursuing Asia sales more heavily. Perhaps because HGVC has a stronghold there and seems to be vulnerable with the Apollo and trust rumors. However HGVC has reported that Asians don't trust trusts and prefer to buy a specific deed (rightfully so). All MVC sells now are their trusts.


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## Tamaradarann

dayooper said:


> I do believe that’s HGVC’s biggest drawback is lack of geographic reach. While it has gotten better with the additions of Southern California, South Carolina, Chicago and the ski resorts, they need more. As a Midwesterner, there is only one easy trip for me (Chicago) so there needs to be some closer. Everything else is at least a two day drive.
> 
> With that being said, isn’t it a little more cost effective with HGVC? The flexibility of the system combined with the generally lower MF’s make the cost of ownership and travel lower than MVC Weeks? At least that’s what I have been thinking. I haven’t really been studying MVC so I could be very wrong, but it seems the MF’s are, on average, lower with HGVC.



I understand your dismay over the lack of resorts in your geographic area.  HGVC places their resorts very strategically in areas that will attract not just some vacationers once in awhile but many vacationers frequently.  We live near NYC which has the only HGVC resorts within reasonable driving distance.  It is usually a plane trip to Honolulu, Florida or Las Vegas for our HGVC vacations; we have enjoyed at least 2 every year since we have owned.  When we purchased HGVC it was our goal to be able to vacation in warm climates when it was cold in NY.  Hawaii and Florida certainly give us that.   If we wanted driving vacations we wouldn't have bought HGVC.  Therefore, both HGVC and our vacation plans are on the same page.  Resort locaateddds vacations would certainly be a secondary or inconsequential benefit.


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## dayooper

Tamaradarann said:


> I understand your dismay over the lack of resorts in your geographic area.  HGVC places their resorts very strategically in areas that will attract not just some vacationers once in awhile but many vacationers frequently.  We live near NYC which has the only HGVC resorts within reasonable driving distance.  It is usually a plane trip to Honolulu, Florida or Las Vegas for our HGVC vacations; we have enjoyed at least 2 every year since we have owned.  When we purchased HGVC it was our goal to be able to vacation in warm climates when it was cold in NY.  Hawaii and Florida certainly give us that.   If we wanted driving vacations we wouldn't have bought HGVC.  Therefore, both HGVC and our vacation plans are on the same page.  Resort locaateddds vacations would certainly be a secondary or inconsequential benefit.



Oh, I agree. We love the locations in Vegas, South Carolina and Florida. I think I’ve talked my wife into going to Carlsbad at some point and we will do Hawaii some day, too. That being said, having a couple of different locales would be very nice. When we bought, it was for family vacations in Vegas and Orlando. This past year we went to Myrtle Beach and our kids loved it so much, we are going again next summer.  We do other smaller vacations, but my wife and I love the amenities and flexibility of the system and wish we could use some of our points in a closer locale. 

Maybe at some point we should try renting a more locale MVC resort.


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## Tamaradarann

dayooper said:


> Oh, I agree. We love the locations in Vegas, South Carolina and Florida. I think I’ve talked my wife into going to Carlsbad at some point and we will do Hawaii some day, too. That being said, having a couple of different locales would be very nice. When we bought, it was for family vacations in Vegas and Orlando. This past year we went to Myrtle Beach and our kids loved it so much, we are going again next summer.  We do other smaller vacations, but my wife and I love the amenities and flexibility of the system and wish we could use some of our points in a closer locale.
> 
> Maybe at some point we should try renting a more locale MVC resort.



We are at a different stage of life than you and your wife.  We are retired and usually vacation by ourselves so that paying for the flights to Florida, Las Vegas and Hawaii is not such a financial burden.  When our kids were young we didn't have timeshares and we couldn't afford to vacation anywhere we couldn't drive.  However, now in addition to our HGVC timeshares we have Misner Place which has RCI points.  Using those points as well as some HGVC points through RCI we have gone on 8 hour driving vacations with our Daughter, Son-in-Law and Grandchildren to some great places in Williamsburg Virginia, Lincoln New Hampshire, Smugglers Notch in Vermont, Massanutten Virginia.  Those places are a lot closer to you than Myrtle Beach.  I don't know what RCI places are in your midwest location, but some of these locations may be able to be reached with a long one day drive and you could reserve using your HGVC points.  By the way I don't know how old your kids are but when our Grandchildren were young teenagers they loved going to Smuggler's Notch.  It is a large property with a complimentary shuttle around the property with activities specifically for teens.  The Grandchildren loved taking the shuttle and being on their own; not having to be dropped off and picked up by Mommy and Daddy.  Of course they had their cell phones in case they did need any assistance.  While it is a winter ski resort it does have some excellent pools and summer activities.


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## terces

JIMinNC said:


> I think the 5% number is way low for values over $10k. Most if not all EY Hawaii weeks top that number if they are OV or OF, not just holiday weeks. Platinum OF/OV weeks in Hilton Head, Aruba, St Thomas, St Kitts, FL Palm Beaches, and Newport Coast should also be over $10k, I think. Platinum ski weeks probably are also, but I don’t really follow those. But given the percentage of MVC locations covered by the real noted above, I think the number may be closer to 25% than 5%.
> 
> My experience has always been that HGVC and MVC resale weeks seem reasonably comparable in price, but since so much HGVC is concentrated in Orlando, Vegas, Big Island, and Waikiki, it’s hard to compare apples to apples with MVC’s more extensive geographic reach.


When I was trying to decide between MVC and HGVC, the tipping point was the $3 per point activation fee.  7000 points x $3 = $21,000 and that is a huge number on top of paying for the points, so HGVC was a no brainer, but it is also possible I did not analyse it properly given what you said that the activation fee for MVC does not apply to weeks.  I know the answer is probably in the thread here, but it is moving so fast I'm not seeing everything so my question: if a person bought weeks can they easily be converted to, or used as points without further cost?


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## terces

I don't know about MVC's structure, but I think it is fair to say that HGVC has a mess of different ownerships, affiliation arrangements and fee structures - for example with Grand Pacific, whom I believe owns 17 resorts, HGVC has a relationship in three of them; an affiliate arrangement in Seapoint and Grand Pallisades and then they have a completely different Joint Venture partnership arrangement in MarBrisa.  They also have a significant relationship with Hilton where they are converting rooms in some hotels to TS's.  Then there is the twisted up business in Elara.  And it just goes on and on.  Everywhere you look there are different business models employed.  HGVC is an unbelievably complex mess without a set format or model, and as far as I can see they have all kinds of relationships that they sort of negotiated and invented along the way.  I can't fathom how this can every be folded into another system or consolidated.  On top of this they have owners who pay massively different MF's for exactly the same point value; for instance if your 7000 point home resort is Hawaii you may be $1700, whereas someone can own the exact same 7000 point trading value in Vegas and pay $850.  How the heck can they ever resolve that into a trust?  This mess might just play into the current TS owners hands, because it is almost like a poison pill.


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## JIMinNC

terces said:


> I know the answer is probably in the thread here, but it is moving so fast I'm not seeing everything so my question: if a person bought weeks can they easily be converted to, or used as points without further cost?



No. Marriott resale weeks bought after June 2010 can generally only be used at your home resort or traded in Interval International. They cannot be converted into points. For the last few summers, Marriott has offered limited-time promotions which allow those ineligible weeks to be enrolled into the points system (enrollment just adds the _*option*_ to convert to points to the standard home resort and II usage options), but only if the owner buys about $35,000 worth of Trust points - i.e. - 3,000 points. (There have also been variations on that deal where you could buy an Aruba week or some other international weeks direct from Marriott to do the same same thing, but they also require about a $35k spend).



terces said:


> On top of this they have owners who pay massively different MF's for exactly the same point value; for instance if your 7000 point home resort is Hawaii you may be $1700, whereas someone can own the exact same 7000 point trading value in Vegas and pay $850.  How the heck can they ever resolve that into a trust?  This mess might just play into the current TS owners hands, because it is almost like a poison pill.



The Marriott owners who own enrolled weeks that can be converted to points (generally those bought before June 2010 or others that have taken advantage of one of the special promotions) have the same situation with differing maintenance fees costs per point at different resorts. The Trust maintenance fees are different still. For example:

Marriott Grande Ocean Hilton Head 2BR Platinum Ocean Front: MF= $1491.38; Points=5075; cost per point = $0.29
Marriott Maui Ocean Club Lahiana/Napili Villas 2BR Platinum Mountain View: MF=$2697.35; Points=5500; cost/point = $0.49
Marriott Destination Club Trust Points, maintenance fee per point = $0.58

The way Hilton could resolve theirs could be the same as MVC did - the Trust maintenance fee is equal to the maintenance fees of all the weeks owned by the Trust, plus Trust operating/admin expenses. They do not have to be the same. Everyone pays the MF for their ownership and the cost per point varies with what you own. Think of a trust as a single resort entity, but the units in that resort are spread throughout multiple locations rather than just one geographic location. So just as the Hawaii resorts have their maintenance fees and the Vegas resorts have theirs, the "Trust Resort" has their maintenance fee. HGVC could certainly create a trust for new sales. The biggest complication would be the many fee for service projects they have, where someone else owns the real estate that Hilton is selling. To do a Trust, HGVC would likely have to buy the intervals in batches from the development partner to feed the Trust.


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## terces

JIMinNC said:


> No. Marriott resale weeks bought after June 2010 can generally only be used at your home resort or traded in Interval International. They cannot be converted into points. For the last few summers, Marriott has offered limited-time promotions which allow those ineligible weeks to be enrolled into the points system (enrollment just adds the _*option*_ to convert to points to the standard home resort and II usage options), but only if the owner buys about $35,000 worth of Trust points - i.e. - 3,000 points. (There have also been variations on that deal where you could buy an Aruba week or some other international weeks direct from Marriott to do the same same thing, but they also require about a $35k spend).


Am I correct to assume that it was 2010 that MVC first offered a trust format?  What exactly happened to those who owned prior to 2010 and had MF's that were much lower than the Trust MF's?  Did those owners somehow get the shaft from MVC, or was it a benefit at that time to have legacy (re-sale) weeks?  (I'm itching to add some HGVC points and trying to assess the risk)


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## chemteach

terces said:


> Am I correct to assume that it was 2010 that MVC first offered a trust format?  What exactly happened to those who owned prior to 2010 and had MF's that were much lower than the Trust MF's?  Did those owners somehow get the shaft from MVC, or was it a benefit at that time to have legacy (re-sale) weeks?  (I'm itching to add some HGVC points and trying to assess the risk)


The people who owned pre 2010 could keep their deed and their regular maintenance fees.  They could choose to pay around $200 per year  to "enroll" their week in the Trust.  That means they still pay their original maintenance fees, but they could get however many DC points their deeded week provided - as assigned by Marriott. Thus, many people who own deeded weeks pay much less than $0.58 per point in maintenance fees.  There is a yearly cost (somewhere around $200) to have the ability to convert the deeded week to points each year.  Owners could also choose to just stick with their original deeded week and not use the trust points.


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## CalGalTraveler

terces said:


> Am I correct to assume that it was 2010 that MVC first offered a trust format?  What exactly happened to those who owned prior to 2010 and had MF's that were much lower than the Trust MF's?  Did those owners somehow get the shaft from MVC, or was it a benefit at that time to have legacy (re-sale) weeks?  (I'm itching to add some HGVC points and trying to assess the risk)



MVC has two systems for points 1) Deeded Weeks with Enrolled Points (similar to HGVC today except enrollment is optional for MVC owners); 2) Destination Club - pure points trust program based on portfolio of deeds.

When an MVC owner makes a points reservation they may be offered a combination of VOIs from these two programs.


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## terces

chemteach said:


> The people who owned pre 2010 could keep their deed and their regular maintenance fees.  They could choose to pay around $200 per year  to "enroll" their week in the Trust.  That means they still pay their original maintenance fees, but they could get however many DC points their deeded week provided - as assigned by Marriott. Thus, many people who own deeded weeks pay much less than $0.58 per point in maintenance fees.  There is a yearly cost (somewhere around $200) to have the ability to convert the deeded week to points each year.  Owners could also choose to just stick with their original deeded week and not use the trust points.


Thank you - that is good information.  What happens today with a sale/purchase of those pre- 2010 units.  Do all the rights and obligations carry forward to the new owners, or are there any penalties or restrictions?


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## jabberwocky

terces said:


> Thank you - that is good information.  What happens today with a sale/purchase of those pre- 2010 units.  Do all the rights and obligations carry forward to the new owners, or are there any penalties or restrictions?



All resale weeks lose all rights in the MVC DC Exchange but they can still be used to book a home resort in season or trade in II. If you think about it upon sale the unit a pre-2010 week becomes a post-2010 week. The new owner would have to enroll the week back into the system. There are several threads in the MVC Forum on this.


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## brp

So, I may have this sideways, but I thought that there were some (like 5) Vistana locations that would retain the ability to trade to other locations even on resale. But maybe, even though Starwood is now part of Marriott, Vistana is not part of MVC?

Even with this restriction we might, at some point, be interested in MVC in Maui, with the intent to use in Maui, so we could still be OK with this.

Cheers.


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## jabberwocky

brp said:


> So, I may have this sideways, but I thought that there were some (like 5) Vistana locations that would retain the ability to trade to other locations even on resale. But maybe, even though Starwood is now part of Marriott, Vistana is not part of MVC?
> 
> Even with this restriction we might, at some point, be interested in MVC in Maui, with the intent to use in Maui, so we could still be OK with this.
> 
> Cheers.



There are some Vistana properties (called Mandatory properties) that have to be part of the SVN system - so the benefits transfer to resale owners (2 resorts on Maui, some phases of SVV in Orlando, WKV in Scottsdale and Harborside). 

While Vistana and MVC have the same corporate parent they are at present completely different systems - although access is possible via II exchange. 

My preference would be to go with one of the Vistana properties on Maui as the booking window is more even for all owners (single week and multiple week both have priority access 8-12 months out) and the two original phases there have the SVN benefits transfer to resale owners (with the exception of converting to hotel points).


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## JIMinNC

terces said:


> Am I correct to assume that it was 2010 that MVC first offered a trust format?  What exactly happened to those who owned prior to 2010 and had MF's that were much lower than the Trust MF's?  Did those owners somehow get the shaft from MVC, or was it a benefit at that time to have legacy (re-sale) weeks?  (I'm itching to add some HGVC points and trying to assess the risk)





chemteach said:


> The people who owned pre 2010 could keep their deed and their regular maintenance fees.  They could choose to pay around $200 per year  to "enroll" their week in the Trust.  That means they still pay their original maintenance fees, but they could get however many DC points their deeded week provided - as assigned by Marriott. Thus, many people who own deeded weeks pay much less than $0.58 per point in maintenance fees.  There is a yearly cost (somewhere around $200) to have the ability to convert the deeded week to points each year.  Owners could also choose to just stick with their original deeded week and not use the trust points.



It is important to remember that the pre-2010 legacy weeks and the Trust are *two totally separate and different things*. The Trust is totally separate from the legacy weeks. The legacy weeks are *never* "enrolled in the Trust." The only way legacy weeks generally become part of the Trust is for Marriott to reacquire that week through one of their inventory reacquisition channels - ROFR, foreclosure, or buyback. Those weeks become part of the Trust and essentially form the underlying equity used to fund the points sold by Marriott. People who buy points from Marriott own a beneficial interest in this trust and their maintenance fees are determined by the maintenance fees paid by the Trust for the weeks owned by the Trust (plus Trust admin costs).

The legacy weeks people own are not, and have never been, part of the Trust in any way. They are not enrolled in the Trust. These weeks can be enrolled in the MVC Exchange Company, which is an entity within MVC designed to facilitate exchanges between Trust owners and enrolled weeks owners. Each enrolled week is assigned a "Destination Points" point value, but the reservations are generally fulfilled from the MVC Exchange, not the Trust.

So, people who own Trust points pay the Trust maintenance fee; enrolled weeks owners pay their regular week's maintenance fee. Their cost per point will be different. Some weeks owners with high value/low cost weeks could have a maintenance fee cost per point considerably less than a Trust owner. Owners of lower value weeks may have a cost per point much higher than a Trust owner.

As long as the enrolled owner owns his/her week(s), for any use use year, they can choose to 1) use their week at their home resort as always, 2) deposit their week to II to trade, 3) convert their week to Bonvoy points, or 4) elect their week for MVC Destination Points. 

If #4 is chosen, the owners gets the point value of that week deposited into their points account (lets say the week is worth 4500 points). Their week then goes into the MVC Exchange and those nights become available to other points users. The owner then can use the 4500 points in their account to make their own reservations from the inventory available in the MVC Exchange. That inventory is a mix of weeks from other enrolled owners or the weeks controlled by the Trust.


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## geist1223

Maybe this long involved discussion of Marriott's should move tomthe Marriott thread.


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## dougp26364

geist1223 said:


> Maybe this long involved discussion of Marriott's should move tomthe Marriott thread.



I’ve been wondering if this is a Hilton thread or MVC thread.

The fascination over similarities and differences between the two systems confounds me. Other than using points as a currency to book, the two systems and the two companies are VASTLY different. One not really better than the other except for personal preference.

We own both. Neither compares to the other except both now have a points mechanism that can be used to make reservations. After that, the similarities all but end.

Better to discuss HGVC matters on the HGVC forum rather than debate the finer points of 2 dis-similar systems


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## mrharris03

I just got a stock alert, and HGV's stock has just popped a few dollars.  

Apparently, Bloomberg is reporting that Apollo is making a bid of "near $40 per share" for HGV.  See https://thefly.com/landingPageNews.php?id=2975111  (Apollo said to bid near $40 per share for Hilton Grand Vacations, Bloomberg says)


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## JIMinNC

geist1223 said:


> Maybe this long involved discussion of Marriott's should move tomthe Marriott thread.



This discussion of MVC was prompted by HGVC owner questions about how trusts like MVC work, should HGVC choose to add a Trust product. Most MVC owners understand all of this, so some cross-pollination of knowledge seems like it could be helpful on this forum for that limited purpose. Based on the comments above there is definitely misunderstanding of how trusts work in regards to legacy weeks owners in any system.


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## chemteach

mrharris03 said:


> I just got a stock alert, and HGV's stock has just popped a few dollars.
> 
> Apparently, Bloomberg is reporting that Apollo is making a bid of "near $40 per share" for HGV.  See https://thefly.com/landingPageNews.php?id=2975111  (Apollo said to bid near $40 per share for Hilton Grand Vacations, Bloomberg says)


Interesting.  I actually own Diamond Resorts.  I read earlier in this thread that Diamond is supposedly (this is all rumor of course...) going to move it's Hawaiian collection to a new joint program with HGVC if Apollo purchases HGVC.  All these timeshare changes with so many different systems makes me agree with others that one can never depend upon anything but what a deed states.  These systems keep merging/dividing/creating new programs with the idea of making more sales/money.  But you never know how what you think you bought might change on you - except the ability to book your home week in accordance with what your deed states.  

I feel sorry for HGVC owners if Apollo/DR takes over.  Diamond is known for increasing fees, charging crazy management fees (It's only 10% at one of my resorts, but then they have another 10% in hidden fees.  The board members are 80% Diamond Resorts employees.)  Good luck!  I do like my Diamond membership, but maintenance fees are too expensive for what you get.  :-(


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## mrharris03

More reporting on the supposed offers to buy HGV. (https://finance.yahoo.com/news/apollo-offers-40-per-share-162234456.html)  Blackstone has also supposedly put in a bid, though the amount/terms were not disclosed.  I expect HGV will issue an 8-K at some point when its board has considered and either accepted/rejected these supposed bids.


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## brp

Maybe being late in the process of buying more HGVC points is not the best place to be 

Cheers,
Bruce


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## CalGalTraveler

Aha! I knew Blackstone would get involved...

If Apollo bids $40 and Blackstone bids $38 is the board required to go with the highest bidder?


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## Cyberc

mrharris03 said:


> More reporting on the supposed offers to buy HGV. (https://finance.yahoo.com/news/apollo-offers-40-per-share-162234456.html)  Blackstone has also supposedly put in a bid, though the amount/terms were not disclosed.  I expect HGV will issue an 8-K at some point when its board has considered and either accepted/rejected these supposed bids.



What is blackstones track record in terms of buying companies like HGV and what can we expect if they “win” the bidding?


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## mrharris03

CalGalTraveler said:


> Aha! I knew Blackstone would get involved...
> 
> If Apollo bids $40 and Blackstone bids $38 is the board required to go with the highest bidder?



No - as a technical matter, the Board is required to exercise its business judgment to recommend the bid that is the best deal for shareholders, which may not be the highest monetary consideration, particularly if there would be significant issues in consummating a transaction (e.g., license agreements whose termination could be triggered). At the end of the day, the Board could decide that it is in the best interests of the company to continue to be independent (though I think that is an unlikely conclusion if they've already essentially started a bidding process, as news reports suggest).  The board could recommend one of the offers they receive, and it would ultimately be up to the shareholders to approve the transaction.  Given Blackstone's history with Hilton and its ownership/development involvement in some of the HGVC projects, my hope is that it emerges the preferred bidder.  Apollo's stated purpose of integrating HGVC with DRI does not seem like a winning proposition for current HGVC owners (whose interests, perversely, are only relevant to the extent it affects the bottom line).


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## CalGalTraveler

Cyberc said:


> What is blackstones track record in terms of buying companies like HGV and what can we expect if they “win” the bidding?



Blackstone owned HGVC as part of the Hilton buyout. This is considered one of the most successful and largest buyouts by private equity. Blackstone sold their share in 2018, but were/are the backers of building developments such as Elara and W57. HGVC operated well under Blackstone ownership and Blackstone understands the relationship with Hilton so I consider them a preferred option over Apollo Diamond.

https://www.bloomberg.com/news/arti...aid-to-plan-sale-of-remaining-stake-in-hilton

IMHO...Diamond is the place where old timeshares go to retire. Apollo knows this and wants to spread the HGVC goodwill over Diamond to revive the brand and tie new business with a hotel system so they can package and sell. However, Hilton owns the brand license and could pull so they will have a huge say as to whether value will be realized in this deal.


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## terces

geist1223 said:


> Maybe this long involved discussion of Marriott's should move tomthe Marriott thread.


I am an HGVC owner and would like to add one more 7000 point unit and I am finding this recent discussion to be very helpful.  I understand that the MVC Trust might be totally different than anything that happens with HGVC, but the exercise is helping me understand how they work, and also assessing the risk on whether to buy more now or hold off.  So far I am leaning towards holding off.


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## pchung6

I just made an offer to purchase 2 bedroom HGVC Kings Land 8400 pts last week.  Just received the contract to sign this morning and saw the news.  Now I am totally not interested to purchase HGVC at all.  I told the agent this afternoon and she is not happy now.


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## escanoe

pchung6 said:


> I just made an offer to purchase 2 bedroom HGVC Kings Land 8400 pts last week.  Just received the contract to sign this morning and saw the news.  Now I am totally not interested to purchase HGVC at all.  I told the agent this afternoon and she is not happy now.



I completely respect your decision, but IMHO it is likely an overreaction (my view is it is about the same risk now as it always is owning a timeshare). If enough potential resale buyers feel the same way you do, I will probably roll the dice and try to pick up some bargain platinum points. (Said in some jest .... if I act quick enough I may be grandfathered with lower MFs than what later purchasers will have as part of the trust.)


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## pchung6

escanoe said:


> I completely respect your decision, but IMHO it is likely an overreaction (my view is it is about the same risk now as it always is owning a timeshare). If enough potential resale buyers feel the same way you do, I will probably roll the dice and try to pick up some bargain platinum points. (Said in some jest .... if I act quick enough I may be grandfathered with lower MFs than what later purchasers will have as part of the trust.)


If it is Marriott or Vistana or Disney acquisition, i will be ok.  But it is Diamond, I'm definitely out.  I think i got lucky this time.


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## jabberwocky

pchung6 said:


> If it is Marriott or Vistana or Disney acquisition, i will be ok.  But it is Diamond, I'm definitely out.  I think i got lucky this time.



I've been closely looking at adding a HGVC to our portfolio to round it out as it covers most areas where we would also want to go.  If Apollo is involved I don't want to be close to this as their methods are essentially financial engineering to make a quick buck.  Blackstone I would be okay with, since they do seem to know how to manage things well and position investments for long term performance. 

I'll see how this shakes out - but I know have an excellent excuse for our HGVC presentation next month.


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## Ralph Sir Edward

I did the comparison to point out how a MVC type trust (point only) system could devalue the home week advantage.

As it currently is with HGVC, you can book your home week for 3 months initially, with no other competition other that those other owners of your particular home week place and type. Furthermore, those people who own at your home week will not book it if they plan to utilize points. That is a double advantage for advanced planner who own exactly where they want to go, year after year. HGVC conceptually caters to those.

With a MVC type of trust, that advantage would totally disappear. The trust would be booking all their weeks at the start of the home booking window, and then letting their point owners select later in time what (and when) they want to get. 

From minimum competition for the week owner to maximum competition in one fell swoop.


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## ski_sierra

Ralph Sir Edward said:


> I did the comparison to point out how a MVC type trust (point only) system could devalue the home week advantage.
> 
> As it currently is with HGVC, you can book your home week for 3 months initially, with no other competition other that those other owners of your particular home week place and type. Furthermore, those people who own at your home week will not book it if they plan to utilize points. That is a double advantage for advanced planner who own exactly where they want to go, year after year. HGVC conceptually caters to those.
> 
> With a MVC type of trust, that advantage would totally disappear. The trust would be booking all their weeks at the start of the home booking window, and then letting their point owners select later in time what (and when) they want to get.
> 
> From minimum competition for the week owner to maximum competition in one fell swoop.



But most likely the trust will have more low season weeks than high season weeks. I feel like that's the whole point of a trust -- screw uninformed people into paying MFs on low season weeks by dangling a carrot of a few high value weeks. I think Hyatt points trust and Vistana trust operate this way. MVC reportedly has high season weeks so not all trusts are bad.


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## JIMinNC

Ralph Sir Edward said:


> With a MVC type of trust, that advantage would totally disappear. The trust would be booking all their weeks at the start of the home booking window, and then letting their point owners select later in time what (and when) they want to get.
> 
> From minimum competition for the week owner to maximum competition in one fell swoop.



But it doesn't have to be this way. If a hypothetical HGVC trust were structured similar to MVC, and if HGVC approached it in the fashion that MVC supposedly does where the trust only reserves any given week proportionately to the trust's ownership of that given view/unit type/season, then it would not have to be negative for the legacy owners. As I noted above, for every complaint that "MVC is booking up all the good weeks for the trust" there are other anecdotes that weeks owners can still book their weeks. I would like to think that HGVC would approach it in a similar fashion. I would have less faith that a Diamond-dominated entity would act responsibly, but if the HGVC management/model prevails, I think they would understand they should not screw over legacy owners. That has certainly not been their model to date as they are even more fair to resale owners than about anyone in the business.


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## JIMinNC

ski_sierra said:


> But most likely the trust will have more low season weeks than high season weeks. I feel like that's the whole point of a trust -- screw uninformed people into paying MFs on low season weeks by dangling a carrot of a few high value weeks. I think Hyatt points trust and Vistana trust operate this way. MVC reportedly has high season weeks so not all trusts are bad.



Based on what I've read that has indeed been a problem with the Vistana Flex Trusts - too much low season inventory, and since many Vistana resorts do not have ROFR, they don't have any easy way to build-up that better inventory. MVC on the other hand, has been fortunate to have ROFR rights at most of their resorts, so they have been able to boost the quality of the trust inventory, but since they also allow legacy weeks to play in the MVC Exchange where all trust and legacy points inventory gets commingled, points availability tends to be excellent for both trust owners and enrolled weeks owners, because both trust and legacy owners can access both pools of inventory through the Exchange. I would totally expect (hope?) any HGVC trust to be more like the MVC system than the Vistana systems. The current HGVC club booking window is essentially an internal Exchange just like the MVC Exchange. The HGVC trust would then play in that club season exchange just like everyone else at nine months. If any HGVC trust only had so-so weeks, then that would hurt trust owners during the 12-9 month home resort window (because the good stuff wouldn't be in the "trust home resort"), they would have to wait for club season to book the better weeks, just as the owners of new resorts have to do today to go elsewhere.

Another thing, aren't most HGVC resorts except for the newest ones basically sold out? But HGVC still has high quality/high season inventory to sell at these sold out resorts because of people exchanging their existing week for a new week (upgrades). If HGVC converted all new sales to trusts, then these upgrade reacquisitions would immediately go into the trust to fund points sales from the trust, as would ROFR weeks, etc. I think in fairly short order, any hypothetical HGVC trust would get some attractive inventory.


----------



## Cyberc

JIMinNC said:


> Another thing, aren't most HGVC resorts except for the newest ones basically sold out? But HGVC still has high quality/high season inventory to sell at these sold out resorts because of people exchanging their existing week for a new week (upgrades). If HGVC converted all new sales to trusts, then these upgrade reacquisitions would immediately go into the trust to fund points sales from the trust, as would ROFR weeks, etc. I think in fairly short order, any hypothetical HGVC trust would get some attractive inventory.



Yes all non new resorts are sold out, but HGVC could still be owning some contracts at those locations as they could acquired those through rofr, foreclosures etc. Only some locations now qualify for trade in if you upgrade, ie Elara does not anymore, but west 57 do.


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## Ralph Sir Edward

JIMinNC said:


> But it doesn't have to be this way. If a hypothetical HGVC trust were structured similar to MVC, and if HGVC approached it in the fashion that MVC supposedly does where the trust only reserves any given week proportionately to the trust's ownership of that given view/unit type/season, then it would not have to be negative for the legacy owners. As I noted above, for every complaint that "MVC is booking up all the good weeks for the trust" there are other anecdotes that weeks owners can still book their weeks. I would like to think that HGVC would approach it in a similar fashion. I would have less faith that a Diamond-dominated entity would act responsibly, but if the HGVC management/model prevails, I think they would understand they should not screw over legacy owners. That has certainly not been their model to date as they are even more fair to resale owners than about anyone in the business.



JIMinNC, ski_sierra, let me deep dive into the details of what I am saying. I will use Bay Club/HGVC as an example, but I could use any HGVC resort.

I own A Penthouse weeks. There are 750 weeks available at Bay Club. (15 units @50 weeks a year. Weeks 51 and 52 are their own separate class.) For convenience, all sold out.

Of those 750 weeks, how many will book via home week preference? All of them?, some of them?, none of them?  If everybody booked home week advantage, there would be a 1 to 1 booking when the window opens. So far, so good.

But say 50% decide to not to use the home week advantage, because they want to "point out" to another HGVC location.

Now you have 50% of 750 weeks competing for the same "prime weeks" for the type I own. Much better odds of getting the week(s) I want, for the place I own. Is anyone being hurt? No. I'm paying $400+ a week more, by owning at Bay Club, compared to, say, Elanra, for this preference. Any one could have this preference, if they are 1.) Willing to pay the extra fees, and 2.) Willing to plan more than 9 months in advance.

Now if one had a hypothetical HGVC trust structured like MVC, here is what would happen. (For this discussion, let's assume that Bay Club has a ROFR. In practice, it does not.)

Assume that the trust has 50% of the weeks, either by ROFR, or by deposit by those "pointing out" people. (The MVC weeks owners converting to Trust points equivalent. . .)

Whereas in the current system, those weeks are not assigned until the home week window closes. They are inventory for the current HGVC points people. Under the "MVC like" trust, those weeks get booked at the opening of the home week, as inventory for the trust!

So I go from 50% of the people competing over the weeks I own in the initial window, to 100%. Then I would not have any advantage by owning at Bay Club. It would be given to the trust. At which point, why own at Bay Club, paying the Hawaii premium? Sell and Buy in Vegas, if you can find a person to sell to.

In essence, this is what happened at MVC with the DC Trust. All the frictional inventory, (not sold, or ROFR'ed, or repo'ed), that had been part of the week owners inventory, became DC Trust inventory, leaving all the week owners with a 1 to 1 booking, at every location in the system. With cancellations along the way, the results could end up with owners not getting a week, even if they paid for it. (This is downplayed, but it is very real. personal experience.)


----------



## mrharris03

More reporting on Apollo’s offer for a SunTrust analyst after talking to HGV stakeholders, indicating (1) Apollo’s offer may not be enough (suggesting low to life $40s is the target) and (2) Hilton effectively has a veto because of the licensing agreement and is reportedly loathe to have HGVC combined with DRI.

https://seekingalpha.com/news/3505772-apollos-reported-bid-hilton-grand-may-enough-suntrust-says


----------



## ski_sierra

Ralph Sir Edward said:


> JIMinNC, ski_sierra, let me deep dive into the details of what I am saying. I will use Bay Club/HGVC as an example, but I could use any HGVC resort.
> 
> I own A Penthouse weeks. The are 750 weeks available at Bay Club. (15 units @50 weeks a year. Weeks 51 and 52 are their own separate class.) For convenience, all sold out.
> 
> Of those 750 weeks, how many will book via home week preference? All of them?, some of them?, none of them?  If everybody booked home week advantage, there would be a 1 to 1 booking when the window opens. So far, so good.
> 
> But say 50% decide to not to use the home week advantage, because they want to "point out" to another HGVC location.
> 
> Now you have 50% of 750 weeks competing for the same "prime weeks" for the type I own. Much better odds of getting the week(s) I want, for the place I own. Is anyone being hurt? No. I'm paying $400+ a week more, by owning at Bay Club, compared to, say, Elanra, for this preference. Any one could have this preference, if they are 1.) Willing to pay the extra fees, and 2.) Willing to plan more than 9 months in advance.
> 
> Now if one had a hypothetical HGVC trust structured like MVC, here is what would happen. (For this discussion, let's assume that Bay Club has a ROFR. In practice, it does not.)
> 
> Assume that the trust has 50% of the weeks, either by ROFR, or by deposit by those "pointing out" people. (The MVC weeks owners converting to Trust points equivalent. . .)
> 
> Whereas in the current system, those weeks are not assigned until the home week window closes. They are inventory for the current HGVC points people. Under the "MVC like" trust, those weeks get booked at the opening of the home week, as inventory for the trust!
> 
> So I go from 50% of the people competing over the weeks I own in the initial window, to 100%. Then I would not have any advantage by owning at Bay Club. It would be given to the trust. At which point, why own at Bay Club, paying the Hawaii premium? Sell and Buy in Vegas, if you can find a person to sell to.
> 
> In essence, this is what happened at MVC with the DC Trust. All the frictional inventory, (not sold, or ROFR'ed, or repo'ed), that had been part of the week owners inventory, became DC Trust inventory, leaving all the week owners with a 1 to 1 booking, at every location in the system. With cancellations along the way, the results could end up with owners not getting a week, even if they paid for it. (This is downplayed, but it is very real. personal experience.)



I see what you are saying. If that's what happened with the trust, it would indeed be sad.


----------



## Tamaradarann

CalGalTraveler said:


> Blackstone owned HGVC as part of the Hilton buyout. This is considered one of the most successful and largest buyouts by private equity. Blackstone sold their share in 2018, but were/are the backers of building developments such as Elara and W57. HGVC operated well under Blackstone ownership and Blackstone understands the relationship with Hilton so I consider them a preferred option over Apollo Diamond.
> 
> https://www.bloomberg.com/news/arti...aid-to-plan-sale-of-remaining-stake-in-hilton
> 
> IMHO...Diamond is the place where old timeshares go to retire. Apollo knows this and wants to spread the HGVC goodwill over Diamond to revive the brand and tie new business with a hotel system so they can package and sell. However, Hilton owns the brand license and could pull so they will have a huge say as to whether value will be realized in this deal.



I agree with your thoughts here and certainly favor Blackstone to buy HGVC rather than Apollo.  Since Blackstone is an investment company not an operator of companies and they will probably not change anything in the HGVC just like when they owned it before.  While Apollo is also an investment company, it owns DRI which is a timeshare company that most of us don't like the way they operate.  Therefore, since Apollo already owns a timeshare company if they bought HGVC the tendency would be for them to make a change in the way one or both operate by giving control to one of the companies to run and/or overpower the other one in the operation of their timeshare company ownerships.


----------



## CalGalTraveler

mrharris03 said:


> More reporting on Apollo’s offer for a SunTrust analyst after talking to HGV stakeholders, indicating (1) Apollo’s offer may not be enough (suggesting low to life $40s is the target) and (2) Hilton effectively has a veto because of the licensing agreement and is reportedly loathe to have HGVC combined with DRI.
> 
> https://seekingalpha.com/news/3505772-apollos-reported-bid-hilton-grand-may-enough-suntrust-says



Thanks for sharing. I hope the deal become unprofitable and falls through, or Hilton Worldwide (HLT) vetoes because the Diamond brand would poison both the Hilton Hotel and HGV Brand (they are correct in this assessment).

Losing the Hilton HLT brand and deal flow would render the deal useless because they would be paying a hefty premium to add more properties to Diamond's portfolio. This would not get Apollo closer to exit. And may make it more risky for Apollo to achieve an ROI given the size of the combined entity under the Diamond brand to sell.

Without the Hilton brand, it would only perpetuate the notion that Diamond is the retirement home for old timeshares which would not make it more attractive to Wall St. than it is now i.e. inflating  maintenance fees to higher cost than renting (aka inefficient operations management), pissing off long-time owners causing deedbacks and defaults resulting in negative brand perception which does not attract new buyers.

Bottom line: Diamond doesn't have a sustainable business model without a hotel deal. In the tech world we call this "living off of your installed base revenue"; it will devolve into a long slow death. I would not buy Diamond IPO stock if it were offered today because *Apollo/Diamond squeezed all the juice out of the orange and turned it into a lemon.*  Without a Hilton deal flow and brand there is limited opportunity for growth because Diamond damaged their brand by focusing too much on MF profits to package for sale at the expense of market competitiveness/value proposition to new buyers, and losing upgrade revenue from existing owners who lost trust and shut off their wallets.

The good news is that the Chairman of the Board of Hilton Hotels is a high ranking executive at Blackstone so Blackstone will have influence on this decision. I hope they get this scuttled soon because this must be a huge distraction for HGV management and is causing buyers to hold off on purchases.

With that said, I could envision Blackstone/Hilton proposing to cherry pick certain resorts as an acquisition to help improve Apollo's ROI on this albatross. Embarc portfolio, Maui, Tahoe, Waikiki Modern and possibly Cabo Azul come to mind. Time will tell what these deal meisters brew up. If Blackstone and other hotel developers are involved they may be interested in converting some timeshares buildings into multi-use TS and hotel properties.


----------



## nuwermj

Tamaradarann said:


> ... since Apollo already owns a timeshare company if they bought HGVC the tendency would be for them to make a change in the way one or both operate by giving control to one of the companies to run and/or overpower the other one in the operation of their timeshare company ownerships.



We should not assume that Apollo will give that control to Diamond. Although they own Diamond, they have absolutely no allegiance to that company or it's managers. From the dollars and cents perspective of an investment bank, it make much more sense to put HGV in charge of the new entity. Moreover I see no reason for a new management to merge the two clubs.


----------



## Jason245

I think you will drive yourself nuts trying to guess what will happen. Sit back and eat some popcorn while watching the show.  Until we know more any actions would be foolish. 

Sent from my SM-N950U using Tapatalk


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## Talent312

*Apollo Offers About $40 Per Share for Hilton Grand*
Gillian Tan and Scott Deveau
October 14, 2019, 5:17 PM UTC

(Bloomberg) -- Apollo Global Management Inc. made a first-round offer for Hilton Grand Vacations Inc. valuing the timeshare resort operator at about $40 per share, according to people familiar with the matter.

The Blackstone Group Inc. also bid for the Orlando, Florida-based company, said the people who asked to not be identified because the matter isn’t public.

Hilton Grand Vacations’ shares rose to their highest level since June 2018, jumping as high as 10.3%. The shares were up 6.1% to $34.65 at 1:07 p.m. in New York trading, giving the company a market value of about $3 billion.

Representatives for Apollo and Blackstone declined to comment. Hilton Grand Vacations didn’t respond to requests for comment.

Elliott Management Corp. has built a position in Hilton Grand Vacations and was advocating for a sale prior to the company putting itself on the block, people familiar with the matter said last month.

The company, with 55 resorts and more than 315,000 members, fell the most ever on Aug. 1 after lowering its forecast for earnings and sales, citing a lack of inventory in locations like Cabo San Lucas, Mexico and the Big Island of Hawaii.

Apollo bought timeshare operator Diamond Resorts International Inc. for $2.2 billion in 2016.


----------



## jabberwocky

Blackstone seems to be in an acquisitive mood.  It looks like they've just picked up the Bellagio in Las Vegas (MGM will still manage but Blackstone will be the landlord).  Given the HGVC footprint in the Vegas I can't see Blackstone wanting to cede ground to Apollo.

https://www.wsj.com/articles/mgm-re...shareToken=steaeb2019731545608b0262ce9c5cb2e5

As a side note: Circus Circus has been sold to Phil Ruffin, the owner of Treasure Island, in a separate deal.


----------



## Tamaradarann

nuwermj said:


> We should no assume that Apollo will give that control to Diamond. Although they own Diamond, they have absolutely no allegiance to that company or it's managers. From the dollars and cents perspective of an investment bank, it make much more sense to put HGV in charge of the new entity. Moreover I see no reason for a new management to merge the two clubs.



After reading the information from Bloomberg about both Apollo and Blackstone I do agree with your thoughts here.  These are big investment companies that buy and sell companies and assets more frequently than ordinary people buy or lease cars.  There is no way that we can figure out what will happen with these offerings.  Being HGVC owners we are put in a position of being manipulated by the owners and operators of the system we bought into without any control of the destiny.  We can only hope for a smooth landing of the timeshare asset we own.


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## Gbahri

I’m a little confused on what you guys are talking about when you see a trust. Why would I change the point value? Wouldn’t that either just keep the same point value or change it? What does a trust have to do with it.


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## terces

Gbahri said:


> I’m a little confused on what you guys are talking about when you see a trust. Why would I change the point value? Wouldn’t that either just keep the same point value or change it? What does a trust have to do with it.


There are pretty thorough explanations in this thread.  It's an interesting read to follow it through and you can find the answers to your question.  It's a good idea to spend the 15 bucks and join TUG so you can see all the discussion.


----------



## dayooper

Gbahri said:


> I’m a little confused on what you guys are talking about when you see a trust. Why would I change the point value? Wouldn’t that either just keep the same point value or change it? What does a trust have to do with it.



A trust will change what you pat in MF’s and what is potentially available in your home season. They usually figure your MF’s as an average of all the deeds in the trust, negating any advantage you have with a cheaper MF deed. The inexpensive Vegas deeds would lose the MF per point advantage. It also could affect those that use their home week advantage. The trust could use an earlier booking window to give the same or better reservation window than those with the home week advantage. Those that bought those weeks probably spent a good chunk of change and the trust could severely damage their ability to book their desired week and decrease the value of their deed.


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## Tamaradarann

dayooper said:


> A trust will change what you pat in MF’s and what is potentially available in your home season. They usually figure your MF’s as an average of all the deeds in the trust, negating any advantage you have with a cheaper MF deed. The inexpensive Vegas deeds would lose the MF per point advantage. It also could affect those that use their home week advantage. The trust could use an earlier booking window to give the same or better reservation window than those with the home week advantage. Those that bought those weeks probably spent a good chunk of change and the trust could severely damage their ability to book their desired week and decrease the value of their deed.



While all the the things that are mentioned in this post are possible, I believe that the most critical issue with Apollo,(who owns the DRI timeshare system which has a trust system that they vigorously market) purchasing HGVC is what is available during CLUB SEASON.  If they merge the 2 systems so that DRI members could exchange with HGVC during club season there will be more members competing to reserve nights during the HGVC Club Season.  It is difficult to reserve at certain resorts during HGVC club season now.  Adding DRI members to that chase could make it more difficult or impossible to reserve during that period.


----------



## CalGalTraveler

Tamaradarann said:


> While all the the things that are mentioned in this post are possible, I believe that the most critical issue with Apollo,(who owns the DRI timeshare system which has a trust system that they vigorously market) purchasing HGVC is what is available during CLUB SEASON.  If they merge the 2 systems so that DRI members could exchange with HGVC during club season there will be more members competing to reserve nights during the HGVC Club Season.  It is difficult to reserve at certain resorts during HGVC club season now.  Adding DRI members to that chase could make it more difficult or impossible to reserve during that period.



This is a key reason the EMBARC system (formerly Interwest) resisted integration into the Diamond Collections. HGVC owners may need to protest and do the same or else everyone will compete for the good stuff (primarily HGVC with some Diamond e.g. Maui, The Modern Honolulu) and no one will want the rest. Although Diamond has some nice properties, they also have many properties past their prime which would be a significant downgrade in quality.

If Diamond/Apollo execute a purchase, IMO I am a bit relieved we own bHC because our reservation priority will be protected in NYC at least. If HGVC adds more bHC locations, we may shift from HGV club aka "HGVC Vegas Collection" to bHC reservations in order to obtain the bookings we want with less competition. We also will redirect future resale portfolio additions to the "Marriott/Westin Collection."


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## Cyberc

CalGalTraveler said:


> This is a key reason the EMBARC system (formerly Interwest) resisted integration into the Diamond Collections. HGVC owners may need to protest and do the same or else everyone will compete for the good stuff (primarily HGVC with some Diamond e.g. Maui, The Modern Honolulu) and no one will want the rest. Although Diamond has some nice properties, they also have many properties past their prime which would be a significant downgrade in quality.
> 
> If Diamond/Apollo execute a purchase, IMO I am a bit relieved we own bHC because our reservation priority will be protected in NYC at least. If HGVC adds more bHC locations, we may shift from HGV club aka "HGVC Vegas Collection" to bHC reservations in order to obtain the bookings we want with less competition. We also will redirect future resale portfolio additions to the "Marriott/Westin Collection."



Just curious, what’s not to say that if Apollo buys HGVC that they won’t change how bHC works?


----------



## CalGalTraveler

Cyberc said:


> Just curious, what’s not to say that if Apollo buys HGVC that they won’t change how bHC works?



It's possible but why would they leave upgrade money on the table?

Of course, they could also charge an upgrade to HGVC as well, which would mitigate concerns about club reservations.

They have several pools to work with:

bHC
HGVC Club
Diamond Hawaii Collection
Diamond US Collection
Embarc
Other Diamond


----------



## Ralph Sir Edward

Tamaradarann said:


> While all the the things that are mentioned in this post are possible, I believe that the most critical issue with Apollo,(who owns the DRI timeshare system which has a trust system that they vigorously market) purchasing HGVC is what is available during CLUB SEASON.  If they merge the 2 systems so that DRI members could exchange with HGVC during club season there will be more members competing to reserve nights during the HGVC Club Season.  It is difficult to reserve at certain resorts during HGVC club season now.  Adding DRI members to that chase could make it more difficult or impossible to reserve during that period.





CalGalTraveler said:


> This is a key reason the EMBARC system (formerly Interwest) resisted integration into the Diamond Collections. HGVC owners may need to protest and do the same or else everyone will compete for the good stuff (primarily HGVC with some Diamond e.g. Maui, The Modern Honolulu) and no one will want the rest. Although Diamond has some nice properties, they also have many properties past their prime which would be a significant downgrade in quality.
> 
> If Diamond/Apollo execute a purchase, IMO I am a bit relieved we own bHC because our reservation priority will be protected in NYC at least. If HGVC adds more bHC locations, we may shift from HGV club aka "HGVC Vegas Collection" to bHC reservations in order to obtain the bookings we want with less competition. We also will redirect future resale portfolio additions to the "Marriott/Westin Collection."



My point is that, in a merger, everything is on the table. The only things not on the table are those things explicitly written into the deeds.

Club season, home week access, bHC preference - all would be up for potential change. Groupings, access to grouping - all up for change. What happens remains to be seen. whether or not you are advantaged or disadvantaged remains to be seen. How affiliates are integrated remain to be seen. Just remember, in any merger, "business as Usual" is the first thing to go. . . .


----------



## terces

There is also something else to consider while I am tossing the coin in the air trying to decide whether to add another unit now or wait, and that is the fee MVC charges to activate points in their trust.  If Mr greedy pants follows the same model a 7000 point contract would cost an extra $21,000 to activate and virtually kill the resale prices.


----------



## Cyberc

terces said:


> There is also something else to consider while I am tossing the coin in the air trying to decide whether to add another unit now or wait, and that is the fee MVC charges to activate points in their trust.  If Mr greedy pants follows the same model a 7000 point contract would cost an extra $21,000 to activate and virtually kill the resale prices.



i never understood that approach. One should think that MVC would like to have a healthy resale market as it would mean that direct owners are able to sell their ownership with a smaller loss if they need to.


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## terces

Can anyone shed some light on the pre and post value of the MVC legacy weeks, and more importantly to me for long term planning purposes; can they be disposed of and is there any value in them after the Trust was imposed?


----------



## Tamaradarann

Cyberc said:


> Just curious, what’s not to say that if Apollo buys HGVC that they won’t change how bHC works?



That is true.  I am so Honolulu Focused that I am always concerned about how my ability to reserve Honolulu nights during CLUB SEASOn will be effected.  However, high valued NYC timeshares are even more of a plum to be picked.  While owners in NYC will still have the week they own, the rules on how they need to reserve that week may change.  Their home week reservation period preference may only be a month,(13 months before check in). and they may need to reserve their entire week in one reservation to use that preference.


----------



## Cyberc

Tamaradarann said:


> That is true.  I am so Honolulu Focused that I am always concerned about how my ability to reserve Honolulu nights during CLUB SEASOn will be effected.  However, high valued NYC timeshares are even more of a plum to be picked.  While owners in NYC will still have the week they own, the rules on how they need to reserve that week may change.  Their home week reservation period preference may only be a month,(13 months before check in). and they may need to reserve their entire week in one reservation to use that preference.



Not saying that you are right or wrong. But if that change was to materialize it would hurt the HGVC sales big time in NYC. No one is staying in nyc for an entire week. 

if you would have to book 9-10-11 or 12 months in advance and only be able to get the 1 week you own no one would ever buy there.


----------



## CalGalTraveler

Cyberc said:


> Not saying that you are right or wrong. But if that change was to materialize it would hurt the HGVC sales big time in NYC. No one is staying in nyc for an entire week.
> 
> if you would have to book 9-10-11 or 12 months in advance and only be able to get the 1 week you own no one would ever buy there.



Agree. I don't ever see that happening. How would removing or neutering the home resort period make them more money?

There are a large number of NYC owners who live on the eastern seaboard that visit NYC for a few days and the value proposition is that they can go into the city to see a show or tour and not have to drive home. Forcing them to use a week kills the entire bHC concept.


----------



## WalnutBaron

terces said:


> There is also something else to consider while I am tossing the coin in the air trying to decide whether to add another unit now or wait, and that is the fee MVC charges to activate points in their trust.  If Mr greedy pants follows the same model a 7000 point contract would cost an extra $21,000 to activate and virtually kill the resale prices.


Just curious--why would you or anyone who's aware of the pending ownership change even consider buying another Hilton timeshare until you know how your ownership is affected by the policies of the new owner? I'm a former owner of HGVC and loved the system--but if that system is an endangered species (and it appears it certainly could be)--any further investment in the system represents a huge roll of the dice. What's the hurry?

I own two high demand units in the Hyatt system, which was recently bought by Marriott. Marriott has not impressed Hyatt owners for two reasons: 1) they have attempted to perpetuate the failed Points Program, which has sucked unwitting newbies into owning points with higher MF's for availability of what are primarily shoulder season weeks. Furthermore, the Points have exactly *zero* resale value because their owners have no deeded property; 2) all of us Hyatt owners are receiving letters from the Owners Association detailing proposed budgets to be voted on in the next 45 days or so at the annual owners meetings. The magnitude of the MF increases range from 8-40%, depending on the property--and since this is the first year that fee increases are being announced since the Marriott takeover, it's more than a coincidence. As we all know, those MF increases raise the base rate for future years, meaning much higher MF's for Hyatt properties in perpetuity and an accompanying depressive effect on resale values.

I share the experience of us Hyatt owners simply to reinforce the discussion on this thread regarding caution. Things may turn out just fine--but since no one knows right now, my advice is to hold off on any new purchases until the dust settles and you know exactly what you're buying into.


----------



## rjp123

Interesting reading following everybody's thoughts on this topic.

I would be interested in upping my ownership to give me access to larger units, however there is no way I am buying anything until there is certainty on the HGVC ownership.


----------



## Tamaradarann

Cyberc said:


> Not saying that you are right or wrong. But if that change was to materialize it would hurt the HGVC sales big time in NYC. No one is staying in nyc for an entire week.
> 
> if you would have to book 9-10-11 or 12 months in advance and only be able to get the 1 week you own no one would ever buy there.



My only ascertion was that the bHC home week ownership benefits could be effected; you got the point.  Remember in the traditional timeshare systems you only had your specific home week ie. 2 BR, week 27, at a specific resort; you either went to that resort for that week in that size unit or you had to exchange with the exchange company and pay a fee.  All of the flexibility that we enjoy in HGVC are club benefits are relatively new and valued by all of us HGVC members.  So just as the Club Season exchange benefits could be effected, the bHC home week benefits could be effected.


----------



## Tamaradarann

CalGalTraveler said:


> Agree. I don't ever see that happening. How would removing or neutering the home resort period make them more money?
> 
> There are a large number of NYC owners who live on the eastern seaboard that visit NYC for a few days and the value proposition is that they can go into the city to see a show or tour and not have to drive home. Forcing them to use a week kills the entire bHC concept.



I don't know how that neutering the home resort benefits would make them more money, but if it could they would figure out a gimmick.  They could set up a trust collection with one or more bHC resort(s) mixed in with other resorts and call it the NYC or CITY collection.  They could mix Las Vegas timeshare units in trust collections with either name.  Now you might say well a collection with the name NYC collection couldn't have Las Vegas mixed in with it.  Well doesn't the DRI Hawaii Collection have resorts in Arizona, California, and Utah mixed in with it.  They make the rules whether they make any sense to us or not is insignificant.


----------



## CalGalTraveler

FWIW...HGV already has a "NYC Collection" it's called bHC (also includes DC and soon Cabo, Waikiki, Charleston and rumored SF).  Home resort still gives up to 60 days (75 days at the other bHC where the "bHC Collection" gets priority reservations over club.

It would be good to look in the NYC deed. There are provisions for AI Reservations to enable short stays. Home Resort may also be included. However, I am reasonably certain it doesn't say that it must be a certain number of months.


----------



## dayooper

Tamaradarann said:


> I don't know how that neutering the home resort benefits would make them more money, but if it could they would figure out a gimmick.  They could set up a trust collection with one or more bHC resort(s) mixed in with other resorts and call it the NYC or CITY collection.  They could mix Las Vegas timeshare units in trust collections with either name.  Now you might say well a collection with the name NYC collection couldn't have Las Vegas mixed in with it.  Well doesn't the DRI Hawaii Collection have resorts in Arizona, California, and Utah mixed in with it.  They make the rules whether they make any sense to us or not is insignificant.



You take away the club and put everything you can in a trust. You then give the trust the same (or a better) booking window to the trust than home week. You then offer, for a fee, the ability to to enter the trust where you get a slightly better booking window for your home week. You then, using scare tactics, apply the pressure to put your deed in the trust. Now to be assured of your week, you have to pay for something you already own.


----------



## Ralph Sir Edward

dayooper said:


> You take away the club and put everything you can in a trust. You then give the trust the same (or a better) booking window to the trust than home week. You then offer, for a fee, the ability to to enter the trust where you get a slightly better booking window for your home week. You then, using scare tactics, apply the pressure to put your deed in the trust. Now to be assured of your week, you have to pay for something you already own.



Bingo! I'm not saying this scenario will play out, but it could. The only wild card in the deck are the affiliate resorts. The deeded owners don't have to play in the new trust, unlike the HGVC resorts, because they are not owned by HGVC, and therefore owners of an affiliate do not have to join HGVC. Nor do the affiliates have to give HGVC (or it's possible trust) a priority over the direct owners.


----------



## Tamaradarann

CalGalTraveler said:


> FWIW...HGV already has a "NYC Collection" it's called bHC (also includes DC and soon Cabo, Waikiki, Charleston and rumored SF).  Home resort still gives up to 60 days (75 days at the other bHC where the "bHC Collection" gets priority reservations over club.
> 
> It would be good to look in the NYC deed. There are provisions for AI Reservations to enable short stays. Home Resort may also be included. However, I am reasonably certain it doesn't say that it must be a certain number of months.



I know that the HGV has the bHC collection.  However, do the DEEDS in the resorts in the bHC specific the priority reservation periods or is that part of the bHC rules which can be changed?

Furthermore, bHC collection could be expanded by a new owner with other properties from other cities that are not as distinguished as the ones in the collection now rather than developing new properties.


----------



## CalGalTraveler

I took a quick perusal at the deed which guarantees:

Home week
Gold Hilton Hotel Status or higher (which might have legal complications if Hilton pulls license)
All Inclusive Reservations Option

I did not see Home Resort period but could be buried in the sub docs. Perhaps some of the other bHC owners could dive in to this?

We use our home resort so competition for our unit will not be an issue unless they remove the home resort window. In that case we will change our usage to home week and rent out the days we don't use. What will suck will be preferential access to larger, nicer units during home resort period if they remove that.

I don't envision drastic changes to this coming for a very long time (if ever) so we may be ready to get out by the time something like that happens.

OTOH, if we can use our points to have great access to other bHC resorts, maybe that's not so bad. We live in the SF Bay area so if they add SF, and we are not able to fly to NYC, we could drive to SF for staycations at bHC SF. I highly doubt they would purposefully mix low-end resorts with this so people could arbitrage - why would they leave money on the table?


----------



## CalGalTraveler

dayooper said:


> You take away the club and put everything you can in a trust. You then give the trust the same (or a better) booking window to the trust than home week. You then offer, for a fee, the ability to to enter the trust where you get a slightly better booking window for your home week. You then, using scare tactics, apply the pressure to put your deed in the trust. Now to be assured of your week, you have to pay for something you already own.



So true!  The good news is that we are educated buyers at TUG and won't fall for that crap. Frankly, this marks only our 5th year in timesharing and we have seen a lot of negative trends in the industry (not so much for HGV). This only reinforces that there must be resale ROI of 5 years or less in order to justify buying more TS because we cannot assume we will get the same value beyond that unless it is a deeded home unit we will use every year. For HGV, MVC, Vistana and Hyatt Systems, resale deeded units are the best way to avoid points devaluation and trust games.

Otherwise, we should simply avoid the risk and headache and rent for MF or less.  If the developers don't internalize that value proposition of MF vs renting, they are living in a house of cards.

HGV has been great. I hope it remains great.


----------



## Tamaradarann

CalGalTraveler said:


> I took a quick perusal at the deed which guarantees:
> 
> Home week
> Gold Hilton Hotel Status or higher (which might have legal complications if Hilton pulls license)
> All Inclusive Reservations Option
> 
> I did not see Home Resort period but could be buried in the sub docs. Perhaps some of the other bHC owners could dive in to this?
> 
> We use our home resort so competition for our unit will not be an issue unless they remove the home resort window. In that case we will change our usage to home week and rent out the days we don't use. What will suck will be preferential access to larger, nicer units during home resort period if they remove that.
> 
> I don't envision drastic changes to this coming for a very long time (if ever) so we may be ready to get out by the time something like that happens.
> 
> OTOH, if we can use our points to have great access to other bHC resorts, maybe that's not so bad. We live in the SF Bay area so if they add SF, and we are not able to fly to NYC, we could drive to SF for staycations at bHC SF. I highly doubt they would purposefully mix low-end resorts with this so people could arbitrage - why would they leave money on the table?



I also agree that HGVC has been great and I hope it stays that way.  That is why I do NOT want another company to buy it that will change it in the mode of DRI.  

With respect to your question "I highly doubt they would purposefully mix low-end resorts with this so people could arbitrage - why would they leave money on the table?   Well when I heard that DRI created a Hawaii Collection with resorts from Arizona, California, and Utah I knew enough about geography to know that those places are NOT in Hawaii; I asked myself why call it a Hawaii Collection?  Well they mixed resorts from other states in the Hawaii Collection so that they could sell more Hawaii Collection Trust Shares than they have Hawaii units to support.  So if they mix resorts from a whole bunch of cities in a Trust and call it the NYC Collection they could sell more NYC Collection Trust Shares than they have NYC units to support!!  They are NOT leaving money on the table they are using some unsold NYC timeshare units to make a whole bunch of less valuable real estate timeshare units into a NYC Trust Collection to sell.


----------



## terces

I have been reading through the MVC Forum as a parallel universe before acquiring more HGVC points, and to try to determine the downside risk.  I asked the question that went something like this "if I have a resale (MVC) week that I have enrolled in the Trust, and then sell that week at some point in the future, will it continue to be enrolled in the Trust?"

Here is a copy and paste from the Marriott Forum:

_No. When you enroll a Week, you're simply giving yourself another usage option which is to convert your Week to Points for use in the Destination Club. Enrollment does not equate to a permanent exchange of Weeks for DC Points. Selling an enrolled Week is no different than selling an un-enrolled Week - you're selling the Week and your enrollment does not transfer to the buyer. (And, the new buyer can not re-enroll the Week because external resales are not currently eligible for enrollment.)
_


----------



## Tamaradarann

terces said:


> I have been reading through the MVC Forum as a parallel universe beforef acquiring more HGVC points now and to try to determine the downside risk.  I asked the question that went something like this "if I have a resale (MVC) week that I have enrolled in the Trust, and then sell that week at some point in the future, will it continue to be enrolled in the Trust?"
> 
> Here is a copy and paste from the Marriott Forum:
> 
> _No. When you enroll a Week, you're simply giving yourself another usage option which is to convert your Week to Points for use in the Destination Club. Enrollment does not equate to a permanent exchange of Weeks for DC Points. Selling an enrolled Week is no different than selling an un-enrolled Week - you're selling the Week and your enrollment does not transfer to the buyer. (And, the new buyer can not re-enroll the Week because external resales are not currently eligible for enrollment.)_



Wow there are a lot of restrictions in the MVC system.  If I understand the club rules, your ownership week can only be used as is or exchanged thru the II exchange system unless it is enrolled in the trust.  Enrolling a week in the trust is very expensive but it does allow internal exchanges in the MVC system.  External Resales can't be enroll in the trust.  When a week that is enrolled in the trust is sold it is no longer enrolled in the trust and the new owner can't enroll the week in the trust because it is a Resale. 

As I said above the HGVC system has been great!!


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## Ralph Sir Edward

I am a former owner at Marriott, owning both a pre-2010 timeshare and a post-2010 timeshare. Marriott shifted gears from what are traditional thought of as timeshares to a true "Vacation Club", where one is sold points for a "Vacation", not a timeshare. (Yes, the physical plant is still a timeshare, the ownership is not. . . ) The whole purpose of the cut-off of post 2010 ownership was/is to force people to join the "vacation club", by spend a lot of money to 1.) Get in. (around $3,000, last I checked). and 2.) To buy points at around $12-14 a point. (Can't join without a points purchase. usually in a unit of 1,000 or more. $10K +, <and> the join-up fees.) The point is to milk a new owner of a lot of money, to make up for not being able to sell points direct.)

Ah, but one doesn't want to join the "vacation club"! There is a only a 1 to 1 relationship between weeks owners and weeks made available to unenrolled weeks owners. Because of cancellation/rebooking possiblilties, Some people can (and do) find themselves without a week, especially if one only has one week in a resort/category. (It happened to me, which is why I left Marriott.) 

But it doesn't stop there! If one want to sell one's "points", Marriott wrote into the "Vacation Club" rules that to be able to transfer, a fee had to be paid on the transfer. It current is $3 a point, which is around 20-25% of the cost of a retail point. So Marriott get paid, over and over again, for every resale of club points. Nothing for weeks, or $5000+ (usually plus, and some time lots of plus) for a timeshare week's equivalent. (No overhead, no sales people, and all the back office overhead covers by other fees. $3 a point pure profit. Guess who gets priority. . . )

And then there's the skim. . . (But I've run on enough.)


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## CalGalTraveler

This Marriott plan may be coming back to bite them because there are many desirable properties that were enrolled pre-2010 and afterwards that fall out of the trust via resale as weeks owners age out and sell. This ultimately hurts Trust owners as there is a limited ROFR budget so Trust owners lose access to these previously enrolled properties.

There is a rumor on the MVC board that there may be an 2020 "amnesty program" with the integration of Vistana by offering enrollment of weeks at a low price. Time will tell.


----------



## Tamaradarann

Ralph Sir Edward said:


> I am a former owner at Marriott, owning both a pre-2010 timeshare and a post-2010 timeshare. Marriott shifted gears from what are traditional thought of as timeshares to a true "Vacation Club", where one is sold points for a "Vacation", not a timeshare. (Yes, the physical plant is still a timeshare, the ownership is not. . . ) The whole purpose of the cut-off of post 2010 ownership was/is to force people to join the "vacation club", by spend a lot of money to 1.) Get in. (around $3,000, last I checked). and 2.) To buy points at around $12-14 a point. (Can't join without a points purchase. usually in a unit of 1,000 or more. $10K +, <and> the join-up fees.) The point is to milk a new owner of a lot of money, to make up for not being able to sell points direct.)
> 
> Ah, but one doesn't want to join the "vacation club"! There is a only a 1 to 1 relationship between weeks owners and weeks made available to unenrolled weeks owners. Because of cancellation/rebooking possiblilties, Some people can (and do) find themselves without a week, especially if one only has one week in a resort/category. (It happened to me, which is why I left Marriott.)
> 
> But it doesn't stop there! If one want to sell one's "points", Marriott wrote into the "Vacation Club" rules that to be able to transfer, a fee had to be paid on the transfer. It current is $3 a point, which is around 20-25% of the cost of a retail point. So Marriott get paid, over and over again, for every resale of club points. Nothing for weeks, or $5000+ (usually plus, and some time lots of plus) for a timeshare week's equivalent. (No overhead, no sales people, and all the back office overhead covers by other fees. $3 a point pure profit. Guess who gets priority. . . )
> 
> And then there's the skim. . . (But I've run on enough.)



After reading what you wrote here about the Marriott Timeshare/Vacation Club System you make me want to get out of timeshares for good.   The disaster that you detail could happen to HGVC if it is bought by the wrong group.  Please tell me something good about the Marriott system as far as how much it costs in maintenance to vacation in Hawaii or Fort Lauderdale for a couple of weeks in a Studio or 1 BR.  The following is extent of my knowledge of the Marriott systems and where I am coming from:

We attended Marriott Timeshare presentation about 11 years ago and we were looking at buying one or two 2 BR Lock-offs on Fort Lauderdale Beach which was the only Marriott at the time that was not in the middle of no where so that we could vacation without a car.  We stayed there for 4 nights without a car on a promotion.  I don't remember the Developer cost since we were going to buy resale.  The resale prices were were looking at were in the 10-12K range.  The maintenance at the time for the 2 BR lock-off was a little over $1000/week.  By splitting the Lock-off we understood that we could vacation for 4 weeks on Fort Lauderdale beach for about $2000 or $500/week.  Two weeks would be in a 1 BR and 2 weeks in a Studio.   That seemed like a reasonable cost to add to the Miami South Beach HGVC timeshares that we already owned to allow us to vacation most of the winter in South Florida.


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## JIMinNC

Ralph Sir Edward said:


> JIMinNC, ski_sierra, let me deep dive into the details of what I am saying. I will use Bay Club/HGVC as an example, but I could use any HGVC resort.
> 
> I own A Penthouse weeks. There are 750 weeks available at Bay Club. (15 units @50 weeks a year. Weeks 51 and 52 are their own separate class.) For convenience, all sold out.
> 
> Of those 750 weeks, how many will book via home week preference? All of them?, some of them?, none of them?  If everybody booked home week advantage, there would be a 1 to 1 booking when the window opens. So far, so good.
> 
> But say 50% decide to not to use the home week advantage, because they want to "point out" to another HGVC location.
> 
> Now you have 50% of 750 weeks competing for the same "prime weeks" for the type I own. Much better odds of getting the week(s) I want, for the place I own. Is anyone being hurt? No. I'm paying $400+ a week more, by owning at Bay Club, compared to, say, Elanra, for this preference. Any one could have this preference, if they are 1.) Willing to pay the extra fees, and 2.) Willing to plan more than 9 months in advance.
> 
> Now if one had a hypothetical HGVC trust structured like MVC, here is what would happen. (For this discussion, let's assume that Bay Club has a ROFR. In practice, it does not.)



I understand and concur with everything you wrote in the above quote. My comments will relate to the next quote below:



> Assume that the trust has 50% of the weeks, either by ROFR, or by deposit by those "pointing out" people. (The MVC weeks owners converting to Trust points equivalent. . .)



The only way the MVC "Trust" controls a week, and thus has actual owner booking rights for that week, is to actually *own* that week (through repurchase, ROFR, new resorts, etc). MVC owners electing for points do not convert their week to "Trust Points", so the Trust does not have the right to book this weeks as the owner of that week. Those elected weeks are deposited into the MVC Exchange Company and are made available for other MVC owners to book through the Exchange. Then, the depositing owner gets the election point value of their deposited week in the form of "Elected Points", not Trust points. This may seem like a semantics issue, but legally those Elected Weeks are very different than weeks the Trust controls directly. 

Those MVC owners who elect for points are removing their week from the inventory available for traditional home week reservations, but they are also removing themselves as a competitor for that inventory - so the system stays in balance. Points reservations are generally only confirmed from inventory that gets put into the MVC Exchange Company - either through Trust ownership of that inventory  or points election by a weeks owner.



> Whereas in the current system, those weeks are not assigned until the home week window closes. They are inventory for the current HGVC points people. Under the "MVC like" trust, those weeks get booked at the opening of the home week, as inventory for the trust!
> 
> So I go from 50% of the people competing over the weeks I own in the initial window, to 100%. Then I would not have any advantage by owning at Bay Club. It would be given to the trust. At which point, why own at Bay Club, paying the Hawaii premium? Sell and Buy in Vegas, if you can find a person to sell to.



Using your example above, right now, there are 750 Bay Club Penthouse A units. If as you proposed, 50% of current owners book during home week season, that leaves 375 units available for Club bookings.

If HGVC adopted an MVC-like Trust, they would only have the right to use the home window to "book" the weeks the Trust actually owns, they would have no explicit ownership rights to book the weeks that weeks owners choose to elect for points. Using your 750 unit example, If a hypothetical HGVC Trust actually managed over time, to own 25% of that 750 units, the Trust could only book 25% of that unit type/season or about 188 weeks. So, again using your Bay Club example of 750 Penthouse A units:

The HGVC Trust books their 25% (188 units) during the home window, that leaves 562 units for other owners.
If 50% of the owners opt to use their home week, that consumes another 281 units, meaning a total of 469 units out of the 750 are booked during home week season (63%)
The remaining 281 units are available for Club Bookings.
So, while there is less inventory available for Club Season, it only drops by 94 units (because we are assuming the HGVC Trust books 100% of their 188 units, whereas if those units were owned by regular owners, that might be just 50%.



> In essence, this is what happened at MVC with the DC Trust. All the frictional inventory, (not sold, or ROFR'ed, or repo'ed), that had been part of the week owners inventory, became DC Trust inventory, leaving all the week owners with a 1 to 1 booking, at every location in the system. With cancellations along the way, the results could end up with owners not getting a week, even if they paid for it. (This is downplayed, but it is very real. personal experience.)



MVC has always structured their system different than HGVC. There has never been an HGVC-like "home resort window" in MVC. There was always a 1 to 1 booking ratio, except for whatever unsold or repo'ed inventory MVC controlled. In the old pre-2010 weeks system, there was no internal exchange system, so all you could do was book your home week at 12 months out (or 13 months for multi-week owners). Anyone wanting to visit another MVC resort just reserved a week and deposited into II, where there was a priority period of a few weeks when only MVC owners could be assigned other MVC deposits. So, while the developer inventory did provide a bit of a buffer for reservations, it was never as powerful as the HGVC home season/club season model.

So when MVC created their Trust and their internal points system, there was no home week priority to protect. They just had to ensure that the legacy weeks inventory "bucket" and the new points buckets are kept in balance. Any HGVC Trust would likely have to respect the current Home Season/Club Season approach or risk huge owner backlash, so that will mean that any HGVC Trust would probably look more like my example in the bulleted example above that what MVC has today.


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## JIMinNC

dayooper said:


> A trust will change what you pat in MF’s and what is potentially available in your home season. They usually figure your MF’s as an average of all the deeds in the trust, negating any advantage you have with a cheaper MF deed. The inexpensive Vegas deeds would lose the MF per point advantage. It also could affect those that use their home week advantage. The trust could use an earlier booking window to give the same or better reservation window than those with the home week advantage. Those that bought those weeks probably spent a good chunk of change and the trust could severely damage their ability to book their desired week and decrease the value of their deed.



This is only true if an owner decides to actually *BUY* trust points. Trust *owners* pay the trust maintenance fee, which is indeed determined by the maintenance fees of the weeks owned by the Trust. Traditional weeks owners continue to pay their regular fees. Just starting a Trust for new sales would not require existing owners to relinquish their deeds.

While it is true that HGVC could adopt new rules for a Trust, I think it would be highly unlikely they would dramatically erode existing owner rights. The loss of goodwill would be too large. So, I think any HGVC Trust would probably be structured to work within the rules of the current program. While there could be some impact to Club Season availability, as the example in my reply above to Ralph Sir Edward shows, the impact will likely not be as large as the gloom and doom predictions would seem too portend.


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## JIMinNC

terces said:


> There is also something else to consider while I am tossing the coin in the air trying to decide whether to add another unit now or wait, and that is the fee MVC charges to activate points in their trust.  If Mr greedy pants follows the same model a 7000 point contract would cost an extra $21,000 to activate and virtually kill the resale prices.



The $3/point activation fee that MVC charges is only for resold Trust Points. It is not relevant to resale weeks, which become ineligible for points use anyway when they are resold to a new owner.



Cyberc said:


> i never understood that approach. One should think that MVC would like to have a healthy resale market as it would mean that direct owners are able to sell their ownership with a smaller loss if they need to.



What is more important for a developer like MVC is ensuring that the resale marketplace does not compete with their direct sales. MVC Trust point packages tend to sell for $3-$5 per point on the external resale market. The $3/point activation fee raises the cost to $6-$8/point, much closer to the $11-$12/point promotional/incentive price for direct Trust points and almost exactly the same as the $7-$8/point cost that can be achieved with some of MVC's weeks/points bundles.



terces said:


> Can anyone shed some light on the pre and post value of the MVC legacy weeks, and more importantly to me for long term planning purposes; can they be disposed of and is there any value in them after the Trust was imposed?



My perspective is that Marriott Vacation Club legacy weeks have better resale value than most timeshares, and are generally on par with other hotel-affiliated programs like HGVC, Westin, Hyatt. While there are off-season and less desirable locations that have low resale value, Platinum MVC weeks in desirable places can sell for $4000 to $25,000+). While legacy week values are less than before the Trust and Points program was launched in 2010, its hard to say how much of that is the impact of points versus the overall devastating impact the Great Recession had on timeshare resale in general.


----------



## CalGalTraveler

JIMinNC said:


> This is only true if an owner decides to actually *BUY* trust points. Trust *owners* pay the trust maintenance fee, which is indeed determined by the maintenance fees of the weeks owned by the Trust. Traditional weeks owners continue to pay their regular fees. Just starting a Trust for new sales would not require existing owners to relinquish their deeds.
> 
> While it is true that HGVC could adopt new rules for a Trust, I think it would be highly unlikely they would dramatically erode existing owner rights. The loss of goodwill would be too large. So, I think any HGVC Trust would probably be structured to work within the rules of the current program. While there could be some impact to Club Season availability, as the example in my reply above to Ralph Sir Edward shows, the impact will likely not be as large as the gloom and doom predictions would seem too portend.



Since most HGVC owners use club and don't use their home week, it seems this could have a dramatic effect on availability.


----------



## JIMinNC

terces said:


> I have been reading through the MVC Forum as a parallel universe before acquiring more HGVC points, and to try to determine the downside risk.  I asked the question that went something like this "if I have a resale (MVC) week that I have enrolled in the Trust, and then sell that week at some point in the future, will it continue to be enrolled in the Trust?"
> 
> Here is a copy and paste from the Marriott Forum:
> 
> _No. When you enroll a Week, you're simply giving yourself another usage option which is to convert your Week to Points for use in the Destination Club. Enrollment does not equate to a permanent exchange of Weeks for DC Points. Selling an enrolled Week is no different than selling an un-enrolled Week - you're selling the Week and your enrollment does not transfer to the buyer. (And, the new buyer can not re-enroll the Week because external resales are not currently eligible for enrollment.)_





Tamaradarann said:


> Wow there are a lot of restrictions in the MVC system.  If I understand the club rules, your ownership week can only be used as is or exchanged thru the II exchange system unless it is enrolled in the trust.  Enrolling a week in the trust is very expensive but it does allow internal exchanges in the MVC system.  External Resales can't be enroll in the trust.  When a week that is enrolled in the trust is sold it is no longer enrolled in the trust and the new owner can't enroll the week in the trust because it is a Resale.
> 
> As I said above the HGVC system has been great!!



This again highlights the biggest misunderstanding that I am reading in this thread -- *there is no such thing in MVC as enrolling in the Trust or permanent converting your week to the Trust. *The only entity that can add inventory to the Trust is Marriott - and they do so by developing new resorts and deeding that new inventory into the Trust, ROFR, foreclosure, and other repurchases. The inventory in the Trust is the legal backing for the Trust points that they now exclusively sell instead of weeks.

Owners with enrolled legacy MVC weeks do not convert their week to Trust points. They just have an *option* to convert to Points on an annual basis. If they decide to elect for points in any given usage year, their week goes into the MVC Exchange and they get an allocation of Destination Club Points. Marriott also deposits almost all of their Trust-owned inventory in to the MVC Exchange, and that's how points reservations are fulfilled. MVC had to take this approach because prior to their Points system, they did not have an internal exchange system.

HGVC already has a robust and well-functioning internal points exchange mechanism (The Club), so they do not need to set this up as MVC did. Any Trust that HGVC sets up to facilitate future sales will almost certainly have to function within the current HGVC home season/Club Season model. MVC didn't have that option, but HGVC does, so any HGVC Trust would likely work differently than MVC for reservation and exchange purposes. In fact, that is one of the biggest issues that MVC faces in figuring out how to integrate the Westin and Sheraton points programs and the MVC program into a common structure - the Westin/Sheraton program used a home season/club season much like HGVC would likely choose to adopt, so their Trust/reservations windows are very different than what MVC uses today.

In fact, looking at the current Westin Flex and Sheraton Flex trust programs and how they work within the Vistana Network (which has a home season and club season like HGVC) might be more instructive to HGVC owners than stressing over how MVC set up their system.

*
*


----------



## JIMinNC

CalGalTraveler said:


> Since most HGVC owners use club and don't use their home week, it seems this could have a dramatic effect on availability.



Why do you think that? Maybe if the hypothetical HGVC trust wound up owning a large percentage of a given resort it could have a big impact on club availability at that resort, but the Trust can only book what it owns, and to own a large % of the many sold-out HGVC resorts, HGVC would have to be *very* aggressive with ROFR. If they took that approach, it would seem that could actually drive up resale prices.

Even if you consider a hypothetical new resort that was 100% owned by the Trust, unless trust owners consumed 100% of that resort's inventory during home season, there would likely still be some available for club bookings.


----------



## JIMinNC

Tamaradarann said:


> After reading what you wrote here about the Marriott Timeshare/Vacation Club System you make me want to get out of timeshares for good.   The disaster that you detail could happen to HGVC if it is bought by the wrong group.  Please tell me something good about the Marriott system as far as how much it costs in maintenance to vacation in Hawaii or Fort Lauderdale for a couple of weeks in a Studio or 1 BR.  The following is extent of my knowledge of the Marriott systems and where I am coming from:
> 
> We attended Marriott Timeshare presentation about 11 years ago and we were looking at buying one or two 2 BR Lock-offs on Fort Lauderdale Beach which was the only Marriott at the time that was not in the middle of no where so that we could vacation without a car.  We stayed there for 4 nights without a car on a promotion.  I don't remember the Developer cost since we were going to buy resale.  The resale prices were were looking at were in the 10-12K range.  The maintenance at the time for the 2 BR lock-off was a little over $1000/week.  By splitting the Lock-off we understood that we could vacation for 4 weeks on Fort Lauderdale beach for about $2000 or $500/week.  Two weeks would be in a 1 BR and 2 weeks in a Studio.   That seemed like a reasonable cost to add to the Miami South Beach HGVC timeshares that we already owned to allow us to vacation most of the winter in South Florida.



If you read the MVC board, I think you will find that most MVC owners are happy, love the resorts, and like the flexibility of the Destination Club Points system. While there are some who don't feet they need points (they primarily use their home resorts or aren't turned off by trying in II, etc), and there are some that feel like there has been negative impacts to the traditional weeks system since the Points overlay was added in 2010, I think most MVC owners would say those voices are the minority. The MVC points system is very flexible, works well, and most report being able to book what they want, unless they are booking those special high demand weeks that are hard to book in any system.

MVC is far from a disaster in my opinion. It is the largest and perhaps the most successful hotel-branded timeshare system, and overall customer satisfaction scores are over 90%.

But comparing the MVC to HGVC systems is something like comparing apples and oranges. HGVC began with a points-based home season/club season exchange model. MVC had to overlay a points program on top of a mature weeks-based system with only home resort reservations and no pre-existing internal exchange mechanism.

As far as your specific question, here are some 2019 Marriott maintenance fees for resorts in Hawaii. This is for deeded weeks only:

Maui Ocean Club 2BR - $2407
Maui Ocean Club 1BR - $2189
Kauai Beach Club 2BR - $2113
Kauai Beach Club 1BR - $1921
Waiohai Kauai 2BR - $2140
KoOlina 2BR - $2315

The TUG MVC maintenance fee list doesn't have a recent entry for Ft Lauderdale Beach Place, but in 2016 a 2BR was $1442.

Booking with Trust points at these resorts will usually cost more in maintenance fees - and will vary depending on season/view - but that only applies to people who have bought and are booking with Trust points.


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## Ralph Sir Edward

Tamaradarann said:


> After reading what you wrote here about the Marriott Timeshare/Vacation Club System you make me want to get out of timeshares for good.   The disaster that you detail could happen to HGVC if it is bought by the wrong group.  Please tell me something good about the Marriott system as far as how much it costs in maintenance to vacation in Hawaii or Fort Lauderdale for a couple of weeks in a Studio or 1 BR.  The following is extent of my knowledge of the Marriott systems and where I am coming from:
> 
> We attended Marriott Timeshare presentation about 11 years ago and we were looking at buying one or two 2 BR Lock-offs on Fort Lauderdale Beach which was the only Marriott at the time that was not in the middle of no where so that we could vacation without a car.  We stayed there for 4 nights without a car on a promotion.  I don't remember the Developer cost since we were going to buy resale.  The resale prices were were looking at were in the 10-12K range.  The maintenance at the time for the 2 BR lock-off was a little over $1000/week.  By splitting the Lock-off we understood that we could vacation for 4 weeks on Fort Lauderdale beach for about $2000 or $500/week.  Two weeks would be in a 1 BR and 2 weeks in a Studio.   That seemed like a reasonable cost to add to the Miami South Beach HGVC timeshares that we already owned to allow us to vacation most of the winter in South Florida.



Tamaradarann, here is the 2020 point chart for Marriott timeshares. I will dive down to Marriott Maui.

https://vacationpointexchange.com/pointschart/points_charts_2020.pdf

2Bdr - High season - Garden view - 5450 points for a week. @ $.58 a point, that is $3161 a week. (OV is 6700, OF is 7450, or $3886 and $4321 respectively)
          Low season - Garden view - 4700 points for a week. @ $.58 a point, that is $2726 a week. (OV is 5850 ($3393), OF is 6424 ($3726).)

Studio is High season IV is 2525 ($1464), OV 2925 ($1696.50), OF 3500 ($2030)
              Low season IV is 2175 ($1261,50), OV 2975 ($1725), OF is 3375 ($1957.50)

(These are all MFs)

(Note: A Bay Club A Penthouse (2 bdr, largest type) costs $1606 a week (2019 MF, 2020 not out yet), direct ownership MFs)

Fort Lauderdale is much more affordable.

High season 2 Bdr 3625 ($2102), Studio 1725 ($1000.80)
Low(est) season (Hurricane season) 2 Bdr 1725 ($1000.80), Studio 775 ($449.50)

I don't have the direct own MF handy, look at the Marriott MF sticky thread.

(Must go now, the Cowboys are on. . . )


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## Tamaradarann

JIMinNC said:


> If you read the MVC board, I think you will find that most MVC owners are happy, love the resorts, and like the flexibility of the Destination Club Points system. While there are some who don't feet they need points (they primarily use their home resorts or aren't turned off by trying in II, etc), and there are some that feel like there has been negative impacts to the traditional weeks system since the Points overlay was added in 2010, I think most MVC owners would say those voices are the minority. The MVC points system is very flexible, works well, and most report being able to book what they want, unless they are booking those special high demand weeks that are hard to book in any system.
> 
> MVC is far from a disaster in my opinion. It is the largest and perhaps the most successful hotel-branded timeshare system, and overall customer satisfaction scores are over 90%.
> 
> But comparing the MVC to HGVC systems is something like comparing apples and oranges. HGVC began with a points-based home season/club season exchange model. MVC had to overlay a points program on top of a mature weeks-based system with only home resort reservations and no pre-existing internal exchange mechanism.
> 
> As far as your specific question, here are some 2019 Marriott maintenance fees for resorts in Hawaii. This is for deeded weeks only:
> 
> Maui Ocean Club 2BR - $2407
> Maui Ocean Club 1BR - $2189
> Kauai Beach Club 2BR - $2113
> Kauai Beach Club 1BR - $1921
> Waiohai Kauai 2BR - $2140
> KoOlina 2BR - $2315
> 
> The TUG MVC maintenance fee list doesn't have a recent entry for Ft Lauderdale Beach Place, but in 2016 a 2BR was $1442.
> 
> Booking with Trust points at these resorts will usually cost more in maintenance fees - and will vary depending on season/view
> - but that only applies to people who have bought and are booking with Trust points.



I agree the MVC and HGVC systems are totally different and you can't compare them.  However, I will compare the costs to vacation versus our cost to vacation.  We own 6 HGVC timeshares none of which are in Hawaii; about 1/2 have relatively high maintenance costs for the HGVC system.  During the Club Season we are able to reserve a number of weeks in Honolulu for a maintenance cost of about $500/week in a Studio.  The maintenance costs for MVC timeshares are much higher than that.  Furthermore, the Legacy MVC system doesn't allow you to do an internal exchange to other MVC resorts, therefore, vacationing in Hawaii using the MVC would require buying in Hawaii and paying the high Hawaii maintenance costs.  Converting to Trust Points would cost more initially and as you mentioned cost more in maintenance fees. 

The above illustrates my fear of a new owner of the HGVC system.


----------



## Ralph Sir Edward

"Whereas in the current system, those weeks are not assigned until the home week window closes. They are inventory for the current HGVC points people. Under the "MVC like" trust, those weeks get booked at the opening of the home week, as inventory for the trust!

So I go from 50% of the people competing over the weeks I own in the initial window, to 100%. Then I would not have any advantage by owning at Bay Club. It would be given to the trust. At which point, why own at Bay Club, paying the Hawaii premium? Sell and Buy in Vegas, if you can find a person to sell to."



JIMinNC said:


> Using your example above, right now, there are 750 Bay Club Penthouse A units. If as you proposed, 50% of current owners book during home week season, that leaves 375 units available for Club bookings.
> 
> If HGVC adopted an MVC-like Trust, they would only have the right to use the home window to "book" the weeks the Trust actually owns, they would have no explicit ownership rights to book the weeks that weeks owners choose to elect for points. Using your 750 unit example, If a hypothetical HGVC Trust actually managed over time, to own 25% of that 750 units, the Trust could only book 25% of that unit type/season or about 188 weeks. So, again using your Bay Club example of 750 Penthouse A units:
> 
> The HGVC Trust books their 25% (188 units) during the home window, that leaves 562 units for other owners.
> If 50% of the owners opt to use their home week, that consumes another 281 units, meaning a total of 469 units out of the 750 are booked during home week season (63%)
> The remaining 281 units are available for Club Bookings.
> So, while there is less inventory available for Club Season, it only drops by 94 units (because we are assuming the HGVC Trust books 100% of their 188 units, whereas if those units were owned by regular owners, that might be just 50%.



You are missing my point. I could care less about the Club Season, or Club Season availability. I don't use it.

By paying an extra MF premium, I get an effective priority at the initial booking window, for the particular resort season. I pay extra for that. TANSTAAFL. With a MVC type trust system, that get hammered.

In the existing system, the points system does not become effective as competition for booking weeks until after the home booking window completes. In an MVC trust type system, those weeks are being competed against from the start of the home booking week.

Consider -  who would use a proposed trust? People who book in their home week window? No, people who current book in the Club Season window. So let's look at my example again.

Instead of 375 people getting "first crack" at weeks at the start of the window, you now get 375 + 188 more (the trust weeks) or 563 competing for those 750 weeks. (Why would people already using the Home Booking advantage join a Trust to get exactly the same advantage they already have?) That would be a clear deterioration of the Home Booking advantage, for which I am paying for, for no benefit to me. (By your numbers, the 50% group would grow to 75% trying for those initial weeks. 563/750.) This would be giving the Club Season booking people (who join the Trust) a better crack at the inventory, at the cost of those who already paid extra for that privilege.


----------



## JIMinNC

Tamaradarann said:


> I agree the MVC and HGVC systems are totally different and you can't compare them.  However, I will compare the costs to vacation versus our cost to vacation.  We own 6 HGVC timeshares none of which are in Hawaii; about 1/2 have relatively high maintenance costs for the HGVC system.  During the Club Season we are able to reserve a number of weeks in Honolulu for a maintenance cost of about $500/week in a Studio.  The maintenance costs for MVC timeshares are much higher than that.  Furthermore, the Legacy MVC system doesn't allow you to do an internal exchange to other MVC resorts, therefore, vacationing in Hawaii using the MVC would require buying in Hawaii and paying the high Hawaii maintenance costs.  Converting to Trust Points would cost more initially and as you mentioned cost more in maintenance fees.
> 
> The above illustrates my fear of a new owner of the HGVC system.



Yes, in MVC, booking with Trust points is more expensive than using a legacy week or trading that week through Interval International. But the important thing to remember is that higher cost only impacts people who actually *buy* *trust points*. It doesn't impact legacy owners. People who owned weeks prior to the start of the MVC Points system/Trust still pay their legacy maintenance fee, even when converting their week to MVC Points (These weeks can be enrolled into the Points system for a nominal fee, sometimes even free). So if HGVC instituted an MVC-like Trust, it should not impact the maintenance fee of your 6 HGVC timeshares. You would pay the Trust maintenance fee only if you added to your ownership by buying new HGVC Trust points.

For example, in MVC, someone who owns a couple legacy enrolled 2BR Platinum Oceanfront weeks at Marriott's Grande Ocean in Hilton Head gets 5075 MVC Points for each of those weeks at a maintenance fee cost of $1491 per week. That's $0.29 per point. MVC doesn't have anything in Honolulu, so I'll use some other Hawaii examples instead. Here is the cost for that legacy owner for using their points to book a Studio in Hawaiii:

*Oahu, Ko Olina*
Marriott's Ko Olina Beach Club MV Studio, Peak Season: 1970 points @ $0.29 -- $571
Marriott's Ko Olina Beach Club MV Studio, Shoulder Season: -- 1705 points @ $0.29 -- $494

Marriott's Ko Olina Beach Club OV Studio, Peak Season: 2070 points @ $0.29 -- $600
Marriott's Ko Olina Beach Club OV Studio, Shoulder Season: -- 2335 points @ $0.29 -- $677

Marriott's Ko Olina Beach Club PHOV Studio, Peak Season: 2740 points @ $0.29 -- $795
Marriott's Ko Olina Beach Club PHOV Studio, Shoulder Season: -- 2425 points @ $0.29 -- $703

*Maui, Maui Ocean Club*
Marriott's Maui Ocean Club MGV Studio, Peak Season: 2525 points @ $0.29 -- $732
Marriott's Maui Ocean Club MGV Studio, Shoulder Season: -- 2175 points @ $0.29 -- $631

Marriott's Maui Ocean Club OV Studio, Peak Season: 3100 points @ $0.29 -- $899
Marriott's Maui Ocean Club OV Studio, Shoulder Season: -- 2700 points @ $0.29 -- $783

Marriott's Maui Ocean Club OF Studio, Peak Season: 3325 points @ $0.29 -- $964
Marriott's Maui Ocean Club OF Studio, Shoulder Season: -- 2925 points @ $0.29 -- $848

As you can see, if you are using a lower cost MF week like Grande Ocean, that MVC owner can get costs in the same ballpark as what you have experienced for a studio. And with this example, the 10,000+ points a two-week Grande Ocean owner would have at their disposal enough points to book 3-5 studio weeks, depending on date and view desired. Since resale weeks don't get this points option, that's not a viable example for a *new* owner post-2010, but for existing owners, the numbers can look really good if you own low mf/point weeks. But that isn't relevant for HGVC since they have a legacy points system prior to any Trust. MVC had no points system prior to the Trust.

So, if HGVC implements a Trust, I would still expect that you would be able to use your existing 6 weeks, much as you do today, with the same maintenance fees you pay today (adjusted for normal increases). Only those who choose to buy into the the new trust would be impacted. As Ralph suggests, there could be some additional competition for home week bookings from the Trust, but that would only be a big issue at existing resorts if HGVC really ramped up ROFR and actively built Trust inventory at existing sold out resorts.


----------



## terces

This has been a very informative thread.  We have gone a long way down the MVC rabbit hole to try to figure out what the future could hold.  More realistically we might have some fun looking right at Diamond for their MO as Apollo/Diamond is the group that have presented the offer and could very well be the owners of HGVC.

What about a scenario like this:  They (Diamond) is (hypothetically) successful with their Offer to Purchase.  They roll the EMBARC and HAWAII Collection into HGVC.  They then overlay a Diamond style Trust on the entire HGVC.  Following this process they "entice" all existing HGVC owners by making the booking window for the Trust ahead of both the Club and Home Week Window and then offering to "let" the legacy weeks owners join the Trust, for a fee of course. All owners would then pay the MF associated with the Diamond Trust and any owners of lower MF resorts would be forced to pay much higher MF's.  All hypothetical of course.

Whereas we may have had some comfort that Hilton would have had to approve the ongoing use of the brand, at the end of the day it is all about profit, and the above scenario would create a much larger HGVC for Hilton to earn a royalty off of, so in fact Hilton could potentially embrace this.


----------



## JIMinNC

Ralph Sir Edward said:


> By paying an extra MF premium, I get an effective priority at the initial booking window, for the particular resort season. I pay extra for that. TANSTAAFL. With a MVC type trust system, that get hammered.
> 
> In the existing system, the points system does not become effective as competition for booking weeks until after the home booking window completes. In an MVC trust type system, those weeks are being competed against from the start of the home booking week.
> 
> Consider -  who would use a proposed trust? People who book in their home week window? No, people who current book in the Club Season window. So let's look at my example again.
> 
> Instead of 375 people getting "first crack" at weeks at the start of the window, you now get 375 + 188 more (the trust weeks) or 563 competing for those 750 weeks. (Why would people already using the Home Booking advantage join a Trust to get exactly the same advantage they already have?) That would be a clear deterioration of the Home Booking advantage, for which I am paying for, for no benefit to me. (By your numbers, the 50% group would grow to 75% trying for those initial weeks. 563/750.) This would be giving the Club Season booking people (who join the Trust) a better crack at the inventory, at the cost of those who already paid extra for that privilege.



Here is how I think it would work for Home Week bookings:

*Status Quo Today*
There are 750 weeks for regular home week owners. If half of those opt to wait to use Club Season, then you have 375 people competing for the 750 weeks. Two weeks for every one home week owner.

*Trust Owns 10%*
Trust books their 75 units, leaving 675 for regular home week owners. If half of those opt to wait to use Club Season, then you have 338 people competing for the 675 weeks. Still two weeks for every one home week owner.

*Trust Owns 25%*
Trust books their 188 units, leaving 562 for regular home week owners. If half of those opt to wait to use Club Season, then you have 281 people competing for the 561 weeks. Still two weeks for every one home week owner.

*Trust Owns 50%*
Trust books their 375 units, leaving 375 for regular home week owners. If half of those opt to wait to use Club Season, then you have 188 people competing for the 375 weeks. Still two weeks for every one home week owner.

If, for any given inventory release, the Trust only takes a portion of the availability equal to their ownership of that season/category, I don't think Home Week owners are harmed. As long as a meaningful portion of the remaining owners opt to use Club Season instead of booking their home week, there should still be adequate inventory for home week owners. So, owning where you want to go should still work well for owners like you.

One other thing to comment on from the above:



Ralph Sir Edward said:


> Why would people already using the Home Booking advantage join a Trust to get exactly the same advantage they already have?



You wouldn't. Since HGVC uses a preferential home week window that precedes their internal exchange system, that serves to protect home week owners. There should be no reason for an existing HGVC owner who likes using what they own as a home week (or Club Season) to buy into any new HGVC Trust unless they want/need more points or want direct, home week access to any of the new resorts that become 100% owned by any Trust.

Marriott required that legacy weeks must enroll in their new internal points Exchange Company because they had no internal points exchange program prior to their Trust and they needed a way for legacy owners to be able to exchange into Trust inventory and for Trust owners to access legacy inventory that is deposited into the MVC Exchange Company. HGVC doesn't need to do that. They already have an internal exchange system that the Trust can play within. How they will actually set it up if they do it remains to be seen, but I think any HGVC Trust will wind up looking more like the Vistana Westin Flex and Sheraton Flex trusts than the MVC Trust. Vistana, like HGVC, had a pre-existing points exchange system with a home week window that the Trusts had to play within. I think HGVC owners would do better to use those systems as proxies for what HGVC might develop rather than looking at the unique situation faced in 2010 by Marriott, which bears little resemblance to HGVC.

Obviously, my opinions assume HGVC retains the existing structure of home week/Club booking windows and their hypothetical Trust operates within that framework, as Vistana did when they started their trusts a few years ago. Could HGVC change the whole system to something much less owner-friendly, sure, but why would they risk alienating their existing customer base? That would create a big goodwill and profit hole to dig out of.


----------



## Ralph Sir Edward

terces said:


> This has been a very informative thread.  We have gone a long way down the MVC rabbit hole to try to figure out what the future could hold.  More realistically we might have some fun looking right at Diamond for their MO as Apollo/Diamond is the group that have presented the offer and could very well be the owners of HGVC.
> 
> What about a scenario like this:  They (Diamond) is (hypothetically) successful with their Offer to Purchase.  They roll the EMBARC and HAWAII Collection into HGVC.  They then overlay a Diamond style Trust on the entire HGVC.  Following this process they "entice" all existing HGVC owners by making the booking window for the Trust ahead of both the Club and Home Week Window and then offering to "let" the legacy weeks owners join the Trust, for a fee of course. All owners would then pay the MF associated with the Diamond Trust and any owners of lower MF resorts would be forced to pay much higher MF's.  All hypothetical of course.
> 
> Whereas we may have had some comfort that Hilton would have had to approve the ongoing use of the brand, at the end of the day it is all about profit, and the above scenario would create a much larger HGVC for Hilton to earn a royalty off of, so in fact Hilton could potentially embrace this.



Agreed. And for the HGVC developed resorts, quite possible. The legality of "front running" the existing owners is legally questionable, but who has the bucks to fight it? The affiliates can always choose to exit HGVC. And under that type of scenario, quite possible it would pass. Use today, and see what the morrow brings. (I can always take the credit hit, if need be. . . )


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## 1Kflyerguy

JIMinNC said:


> If you read the MVC board, I think you will find that most MVC owners are happy, love the resorts, and like the flexibility of the Destination Club Points system. While there are some who don't feet they need points (they primarily use their home resorts or aren't turned off by trying in II, etc), and there are some that feel like there has been negative impacts to the traditional weeks system since the Points overlay was added in 2010, I think most MVC owners would say those voices are the minority. The MVC points system is very flexible, works well, and most report being able to book what they want, unless they are booking those special high demand weeks that are hard to book in any system.



You can count me as a very happy owner with Marriott DC points owner.  We almost never travel for exactly a week, so we like like the flexibility points provide with both HGVC and Marriott.


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## JIMinNC

terces said:


> What about a scenario like this:  They (Diamond) is (hypothetically) successful with their Offer to Purchase.  They roll the EMBARC and HAWAII Collection into HGVC.  They then overlay a Diamond style Trust on the entire HGVC.  Following this process they "entice" all existing HGVC owners by making the booking window for the Trust ahead of both the Club and Home Week Window and *then offering to "let" the legacy weeks owners join the Trust, for a fee of course. All owners would then pay the MF associated with the Diamond Trust and any owners of lower MF resorts would be forced to pay much higher MF's. * All hypothetical of course.



The only way, I believe, to "let the legacy weeks owners join the Trust" would be for HGVC to repurchase the week (and then they deed it into the Trust) or do as Vistana has done and offer to take back the legacy week deed as a credit toward the purchase of Trust points - basically similar to what HGVC does today with "upgrades". Remember, the only way to "join" the Trust is for the Trust to actually own the week.

I believe the "upgrade" approach would be the most likely given that is similar to what HGVC has already been doing with HGVC upgrades in some cases. I also recall from our previous Diamond ownership (sold in 2014), that when Diamond started their "Collection" trusts, they offered a similar approach - turn in your deed for a credit against the purchase of the Collection trust. As I recall though, back then, even Diamond did not undercut our basic owner booking rights for our deeded Maui week and did not try to "front-run" our booking rights for benefit of the trust. They tried to sell the "benefits" of the trust (which for a Hawaii owner was a lower maintenance fee, if I recall correctly, since the trust incorporated some lower MF resorts that averaged down the cost for booking a week).

But as others have said, just because Apollo owns Diamond doesn't mean if they prevail that the Diamond business model will prevail. Apollo's only goal is to make as much money as they can for their investors, so if they feel the HGVC brand and management is the superior model, they would perhaps be more inclined to impose that on Diamond than vice versa. Perhaps a "Hampton Vacation Club" or a rebirth of the old "Embassy Vacation Resort" brands as a way to signify brand differentiation and erase the Diamond stigma?

There are a lot of ways this could go.


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## 1Kflyerguy

JIMinNC said:


> But as others have said, just because Apollo owns Diamond doesn't mean if they prevail that the Diamond business model will prevail. Apollo's only goal is to make as much money as they can for their investors, so if they feel the HGVC brand and management is the superior model, they would perhaps be more inclined to impose that on Diamond than vice versa. Perhaps a "Hampton Vacation Club" or a rebirth of the old "Embassy Vacation Resort" brands as a way to signify brand differentiation and erase the Diamond stigma?



I don't recall if it was Hilton call or HGV investor call, but one of the firms mentioned expanding the existing licensing agreement by creating new timeshare brands, exactly like you mentioned.  As they continue to add luxury to the newer HGV resorts, i can see  a market for more modest resorts with differentiated naming to make the concept clear.

One issue for HGV with the trust model would be all the fee for service resorts.   HGV does not own that inventory, and never actually does own it.  They get paid to manage and sell the resort, but don't own the unsold the units.  I believe the ROFR rights one these resort remain with the developer, not HGV.  It would be hard to add these resorts to a trust without a large capital expenditure to purchase the inventory.  That would really impact their capital light model.


----------



## JIMinNC

1Kflyerguy said:


> One issue for HGV with the trust model would be all the fee for service resorts.   HGV does not own that inventory, and never actually does own it.  They get paid to manage and sell the resort, but don't own the unsold the units.  I believe the ROFR rights one these resort remain with the developer, not HGV.  It would be hard to add these resorts to a trust without a large capital expenditure to purchase the inventory.  That would really impact their capital light model.



Yes, Mark Wang addressed that very issue of how the fee-for-service partnerships would integrate into any trust when the analysts asked him during the last investor call about whether HGV would consider a trust. They could just gradually buy the inventory as they need it to fund their inventory of trust interests without having to buy and hold a lot of inventory. That's how MVC acquires the inventory from their development partners - slowly in small bites - so they don't tie up a lot of capital for a long time. But since they do have multiple fee-for-service partners, the bigger issue is whose inventory does HGV buy first? Who has to wait to get paid? Here is what he said:
*
"But we also have to cognizant around the fact that we have a robust fee-for-service business. And it would be really, really difficult to have a trust product with multiple fee-for-service partners like we have now. We have half a dozen fee-for-service partners, and I just don't know how you negotiate whose product goes into the trust first. Whereas today, we can sell multiple fee-for-service deals simultaneous."*


----------



## nuwermj

1Kflyerguy said:


> One issue for HGV with the trust model would be all the fee for service resorts.   HGV does not own that inventory, and never actually does own it.  They get paid to manage and sell the resort, but don't own the unsold the units.  I believe the ROFR rights one these resort remain with the developer, not HGV.  It would be hard to add these resorts to a trust without a large capital expenditure to purchase the inventory.  That would really impact their capital light model.



Bluegreen has transitioned to a fee-for-service inventory and they sell only trust fund points.


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## Ralph Sir Edward

How many of them still have sizeable inventories? AFAIK all of them are basically sold out. And yes, HGVC does not have ROFR on any of them (AFAIK).

Plus some (most?) of the SW Florida Fee-for-service are fixed unit fixed week timeshares.


----------



## JIMinNC

Ralph Sir Edward said:


> How many of them still have sizeable inventories? AFAIK all of them are basically sold out. And yes, HGVC does not have ROFR on any of them (AFAIK).
> 
> Plus some (most?) of the SW Florida Fee-for-service are fixed unit fixed week timeshares.



Several of the newer properties they are building are fee-for-service. Here is a list of all fee-for-service based on info in another thread:

*Property Name / Ownership / Location / Units*
Las Palmeras, a Hilton Grand Vacations Club _Fee-for-service_ Orlando, FL 226
Elara, a Hilton Grand Vacations Club _Fee-for-service _Las Vegas, NV 1,201
The Grand Islander by HGVClub _Fee-for-service_ Honolulu, HI 418
HGVClub at Anderson Ocean Club _Fee-for-service_ Myrtle Beach, SC 172
Ocean 22 by Hilton Grand Vacations Club _Fee-for-service_ Myrtle Beach, SC 230
Ocean Enclave by Hilton Grand Vacations Club _Fee-for-service _Myrtle Beach, SC 330
Ocean Oak Resort by Hilton Grand Vacation Club _Fee-for-service_ Hilton Head, SC 125
Sunrise Lodge, a Hilton Grand Vacations Club _Fee-for-service_ Park City, UT 83
HGVClub at MarBrisa _Fee-for-service_ Carlsbad, CA 232
HGVClub at Borgo alle Vigne _Fee-for-service _Italy 31

I think the under construction Charleston bHC may also be fee-for-service and the mentioned upcoming resort in the Smoky Mountains was disclosed as fee-for-service during the earnings call, not sure about the other upcoming properties.


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## Tamaradarann

JIMinNC said:


> Yes, in MVC, booking with Trust points is more expensive than using a legacy week or trading that week through Interval International. But the important thing to remember is that higher cost only impacts people who actually *buy* *trust points*. It doesn't impact legacy owners. People who owned weeks prior to the start of the MVC Points system/Trust still pay their legacy maintenance fee, even when converting their week to MVC Points (These weeks can be enrolled into the Points system for a nominal fee, sometimes even free). So if HGVC instituted an MVC-like Trust, it should not impact the maintenance fee of your 6 HGVC timeshares. You would pay the Trust maintenance fee only if you added to your ownership by buying new HGVC Trust points.
> 
> For example, in MVC, someone who owns a couple legacy enrolled 2BR Platinum Oceanfront weeks at Marriott's Grande Ocean in Hilton Head gets 5075 MVC Points for each of those weeks at a maintenance fee cost of $1491 per week. That's $0.29 per point. MVC doesn't have anything in Honolulu, so I'll use some other Hawaii examples instead. Here is the cost for that legacy owner for using their points to book a Studio in Hawaiii:
> 
> *Oahu, Ko Olina*
> Marriott's Ko Olina Beach Club MV Studio, Peak Season: 1970 points @ $0.29 -- $571
> Marriott's Ko Olina Beach Club MV Studio, Shoulder Season: -- 1705 points @ $0.29 -- $494
> 
> Marriott's Ko Olina Beach Club OV Studio, Peak Season: 2070 points @ $0.29 -- $600
> Marriott's Ko Olina Beach Club OV Studio, Shoulder Season: -- 2335 points @ $0.29 -- $677
> 
> Marriott's Ko Olina Beach Club PHOV Studio, Peak Season: 2740 points @ $0.29 -- $795
> Marriott's Ko Olina Beach Club PHOV Studio, Shoulder Season: -- 2425 points @ $0.29 -- $703
> 
> *Maui, Maui Ocean Club*
> Marriott's Maui Ocean Club MGV Studio, Peak Season: 2525 points @ $0.29 -- $732
> Marriott's Maui Ocean Club MGV Studio, Shoulder Season: -- 2175 points @ $0.29 -- $631
> 
> Marriott's Maui Ocean Club OV Studio, Peak Season: 3100 points @ $0.29 -- $899
> Marriott's Maui Ocean Club OV Studio, Shoulder Season: -- 2700 points @ $0.29 -- $783
> 
> Marriott's Maui Ocean Club OF Studio, Peak Season: 3325 points @ $0.29 -- $964
> Marriott's Maui Ocean Club OF Studio, Shoulder Season: -- 2925 points @ $0.29 -- $848
> 
> As you can see, if you are using a lower cost MF week like Grande Ocean, that MVC owner can get costs in the same ballpark as what you have experienced for a studio. And with this example, the 10,000+ points a two-week Grande Ocean owner would have at their disposal enough points to book 3-5 studio weeks, depending on date and view desired. Since resale weeks don't get this points option, that's not a viable example for a *new* owner post-2010, but for existing owners, the numbers can look really good if you own low mf/point weeks. But that isn't relevant for HGVC since they have a legacy points system prior to any Trust. MVC had no points system prior to the Trust.
> 
> So, if HGVC implements a Trust, I would still expect that you would be able to use your existing 6 weeks, much as you do today, with the same maintenance fees you pay today (adjusted for normal increases). Only those who choose to buy into the the new trust would be impacted. As Ralph suggests, there could be some additional competition for home week bookings from the Trust, but that would only be a big issue at existing resorts if HGVC really ramped up ROFR and actively built Trust inventory at existing sold out resorts.



OK so if a Legacy MVC owner who paid the high developer cost when buying their weeks they can deposit them int eh Trust and exchange to Studios with the effective maintenance costs above.  Of course since all of my HGVC weeks are resale if HGVC followed that same model we would be out of luck with the deals you presented above.  That is one of my fears.  Keeping the HGVC club reservation systems as is is my most important point in my fear of a new owner who will change the system.


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## dayooper

nuwermj said:


> Bluegreen has transitioned to a fee-for-service inventory and they sell only trust fund points.



The partners knew they were going into a trust when they were built, if I remember correctly. New fee for service HGVC could easily be put into a trust knowing that from the beginning. Existing fee for service partners may not be willing to go along with that. I find it hard to believe that Strand Capitol fronted a ton of money on very expensive beachfront property in Myrtle Beach just to be potentially shorted on the sale.


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## dayooper

Tamaradarann said:


> OK so if a Legacy MVC owner who paid the high developer cost when buying their weeks they can deposit them int eh Trust and exchange to Studios with the effective maintenance costs above.  Of course since all of my HGVC weeks are resale if HGVC followed that same model we would be out of luck with the deals you presented above.  That is one of my fears.  Keeping the HGVC club reservation systems as is is my most important point in my fear of a new owner who will change the system.



If I remember correctly, weren’t resales purchased prior to 2010 treated the same as developer bought units?


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## JIMinNC

Tamaradarann said:


> OK so if a Legacy MVC owner who paid the high developer cost when buying their weeks they can deposit them int eh Trust and exchange to Studios with the effective maintenance costs above.  Of course since all of my HGVC weeks are resale if HGVC followed that same model we would be out of luck with the deals you presented above.  That is one of my fears.  Keeping the HGVC club reservation systems as is is my most important point in my fear of a new owner who will change the system.



Just for clarity - it may seem like semantics, but it's not; it's key to truly understanding how things work - MVC legacy week owners *do not* deposit their enrolled legacy weeks into the MVC Trust. They deposit their weeks into the *MVC Exchange* as an annual election (to deposit or not to deposit). The Trust also typically deposits their owned weeks into the MVC Exchange. It is inside this Exchange where most all reservations are fulfilled. Think of the Trust just as another resort. The only difference, is the Trust's weeks are spread around amongst all MVC resorts, not just at one location. The only way to own something from the Trust is to actually *buy* an interest in the Trust from MVC or on the resale market; and the only way weeks inventory can actually go into the Trust is for the Trust to actually acquire that week through purchase, ROFR, new resorts, etc. The Trust is an owner of weeks just like anyone else.

The important difference is MVC did not have a points system to work around when they created their Trust in 2010. HGVC already has a structure in place that will likely need to be respected. The MVC experience will not directly transfer to the HGVC model. As I have said in some other posts, the Vistana Westin Flex/Sheraton Flex programs are probably closer to what HGVC would have to do. Both of those programs were set up to respect/keep intact the existing legacy week reservation windows.

As far as your other point about developer vs. resale, see below.



dayooper said:


> If I remember correctly, weren’t resales purchased prior to 2010 treated the same as developer bought units?



Yes. This is correct. *Both* MVC developer-purchased and MVC resale-purchased weeks acquired prior to June 20, 2010 were given the option to participate in the MVC Exchange (the points system that started in 2010, after they created their Trust). The only difference was that the resale weeks paid a higher enrollment fee to participate; but both developer and resale weeks were allowed to play. I wasn't an MVC owner at the time, but I searched the forum and found these prices for pre-June 2010 weeks:
- $595 to "enroll" a single Week purchased direct from MVC
- $695 for multiple Weeks purchased direct
- $1,495 for a single Week purchased externally
- $1,995 for multiple Weeks purchased externally
These were the prices offered at the time. The price has since changed, but I believe the current price for any pre-6/2010 weeks - both developer and resale - is $2395, but that is often discounted to as low as free under certain incentives.

The key difference though is, again, MVC had no existing points or internal exchange system, so they had to start from scratch and they needed as much inventory as possible to feed their new system. HGVC doesn't need to do this, and IMHO, any Trust they might set up in the future would likely be set up to work within the existing HGVC Club structure, just as Vistana did with their trusts.


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## terces

HGV earnings Oct 31
https://finance.yahoo.com/news/hilton-grand-vacations-announces-third-203100067.html?.tsrc=rss


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## JIMinNC

terces said:


> HGV earnings Oct 31
> https://finance.yahoo.com/news/hilton-grand-vacations-announces-third-203100067.html?.tsrc=rss



On Halloween...might be scary


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## CalGalTraveler

The fear, uncertainty and doubt (FUD) stemming from Apollo cannot be good for sales. For both MVC/Vistana and HGV we have closed off our wallet to new purchases until the dust clears.

However this may cause some "can't be missed" buying opportunities, so we might strike if the right property comes along at the right price.


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## JIMinNC

CalGalTraveler said:


> The fear, uncertainty and doubt (FUD) stemming from Apollo cannot be good for sales. For both MVC/Vistana and HGV we have closed off our wallet to new purchases until the dust clears.
> 
> However this may cause some "can't be missed" buying opportunities, so we might strike if the right property comes along at the right price.



I would expect a very small minority of prospects that pass through the HGV sales rooms have ever heard of Apollo Group, let alone their interest in acquiring HGV. I suspect the words "Apollo" and "Diamond" are rarely spoken in HGV presentations unless the prospect asks.

I suspect similar might be true for MVC/Vistana, but given Marriott International's acquisition of the Westin/Sheraton brands and Bonvoy, the fact that there are now linkages between all of those brands is more common knowledge. Also, MVC and VSE sales reps have been spinning the merger in sales presentations for a while, and there has been some email communications with owners about that affiliation.


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## CalGalTraveler

True. On a positive note, all this FUD makes for easy "get out of jail free" cards from presentations.  We have two coming up (1 HGV and 1 MVC) and we'll just present those as "too much uncertainty to make such a large purchase" as the excuse.

I am so happy we bought resale. Can't lose much if you didn't pay much in the first place.


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## GT75

I am going to locked this thread because I think that it is getting too long and un-wieldy. Lets start a new thread when the HGV financial report or other HGV news is made.    I will reference this thread as appropriate there.


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