What are the things you don't like about the new Marriott points program?

[indyhorizons]

this year, we paid the $1995, and we did not pay the $130 three times for selecting marriott rewards points, and we did a lockoff and deposit for one of this year's thansgiving weeks so no lockoff fee and two trade fees we won't pay. We also cancelled the other two thanksgiving weeks and got DC points for them, then used DC points at half price for a december week at Oceanna Palms and used DC points for a February 2011 week at Beach Place towers.

So we also did not have to pay the membership fee this year or next year, and received an extra 800 DC points for converting.

I think we'll have recouped our $1995 in two years, and can now also get MRP points for the two resale weeks. We use MRP since I only get 5 weeks vacation, the rental market is terrible and we already have 5 weeks deposited in II.

So for us, the DC club works really well

Is all this canceling and rebooking a normal year for you? If so, no offense, I would just recommend that you plan better, that would reduce alot of fees... Just my two cents.

 

[wof45]

perhaps you don't understand --
we have 5 weeks so used to pay a lot of fees since we have had these weeks for 10-20 years and do not use them the way we did in the past.

we get rewards points for 2 or 3 of the weeks since we have a limited number of vacation weeks, and the rental markets are so bad that points are better than what we get in rent.

For trades, we usually split the lockoffs and trade on II, so there is a fee to split and then a fee to book the weeks.

last year was 2 fees for MRP, 1 fee for lockoff, 2 fees for booking through II, and 2 weeks left to use for Thanksgiving.

When no-one could come this year, we were able to get DC points for the two thanksgiving week -- using one weeks points for Oceanna Palms in December and the other week for Beachplace towers in February.

If we can continue to get the times we want using DC points, we will be happy with DC even if we never got reduced fees.

 

[Tommy_Boy]

Where Marriott gets the inventory

Bill, per below (just based on my reading from various threads), I have always been under the impression that they would have only the same ability to take inventory from II that anyone else with weeks to deposit would have. If they can truly raid II, that would be of GREAT concern to me, but I don't see how that would realistically work. what do you think?

Is this true??

I thought that rather than taking inventory from II ( deposited by owners) that Marriott simply would no longer be depositing un-sold inventory into II any longer.

 

[wof45]

the scenario I see for Marriott raiding II is:

someone deposits a great Marriott week into II

Marriott has a program that recognizes great weeks

Since it is Marriott, it has a first look at inventory when other Marriott owners do, except that they have a program that automates the decision and exchange

Marriott does an exchange of a week in its inventory for the great week in II

Pretty Scarey, Huh?

 

[burg1121]

aren't you assuming that there is no request for that prime week and that marriotts program is faster than II's match program? Or do we now think that II is giving marriott first dibs on deposits.

 

[wof45]

I don't think Marriott needs first dibs. there really aren't that many requests outstanding. although, it would not surprise me if Marriott did have first dibs on Marriott weeks since we already know that a Marriott owner will match a Marriott Deposit when they first happen and are not yet made available to non-member II members.

Since we have some non-Marriott traders, I also guess that the Marriott desk that used to apply to these won't work for me any longer as a points owner. Maybe I need to buy another Marriott resale

 

[judys19058]

As long as this thread is still on going, I'll put my 2 cents in.

A big negative is there would be not more trading up. I am very successful trading lock-offs for 1 and 2 bedroom units. No more under the new system.

Also, you give up your right to vote on some issues in your home resorts. I would never give up my right to speak on any issue, not with the high maintenance fees we currently pay.

 

[OldPantry]

A Points Analysis, money actually spent

I'm a Ko Olina mountainview owner, looking for a realistic comparison with what I have now. Here's what the "real" costs would be for buying enough points to get a 2BR in low season:
4050 points, @ $9.2/point = $37260.
Yearly opportunity cost for investment @ 5%:
$1863.
Maintenance fee ($.40/point)
$1620
Yearly fee:
$165
Total
$3648, or $521 a night!
Sorry, but where are the savings? Even Marriott will rent you a villa for $3223 (I just looked it up with the MOD discount). And nobody in their right mind would go through Marriott if they could buy a week from an owner (which seems to be available for around $2000-2500). Even just getting a AAA discount through Marriott would be the exact same cost as above, $3654. Bottom line: you'd have to be nuts to lock up the money.
BTW: this is a low season analysis, and doesn't reflect the rate hikes they're promising ($10/point).
A comparison with an existing $30,000 lockoff unit, purchased from Marriott before the Vacation Points era:
$30,000 @ 5%
$1500
Maintenance
$1620
Fees
$250? Less, if just doing a lockoff, not exchanging out of home resort.
Total: $3370, or $240/night for 1BR 7 nights + lockoff 7 nights. The 2BR (7 nights) would cost $446/night.
By the way, buy a week as a resale (I just got an even year for $8500), and the costs drop considerably. Figuring Even/Odd at $17,000, nightly cost goes down to $194/night. An annual week can probably be had for even less.
The comparison with buying enough Marriott points for the same usage?
4550 points @ $9.2 = $41860.
Opportunity cost @ 5% = $2093
Maintenance @ $.40 = $1820
Fees: $165
Total = 4078, or $291/night.
Note about opportunity cost: I've guessed 5% as a conservative minimum. That would be what you might get from a long term corporate bond, or a utility. The cost would probably be higher, if you borrowed the money. At any rate, there IS an opportunity cost for the money paid to Marriott (or a resale owner), and you'd be foolish to ignore it.

 

[wof45]

while I support the idea of just renting in today's economy and not owning at all. I believe you are a little sloppy in your comparison.

in this environment, you would not get 5% in any sort of conservation investment, more likely no better than 1 1/2%

In your points version, you used a 2BR, but went with a 1BR and Studio and divided by 14 days in your second analysis

congrats on your low price purchase.

 

[ocdb8r]

2. If you pay the annual $165 fee and you choose to use your unit as you do today and trade thru II, you still have to pay the II trade fees.

This is correct. You pay the annual $165 even if you decide to occupy or deposit your week with II. The II exchange fee (either internal or external) is on top of this.

In my experience, this is NOT correct. I reserved a unit at my home resort, locked=it off, and deposited into II without paying any fee. I have now requested exchanges for both halves of my unit and no fee was charged as long as my request only include Marriott resorts.

 

[ocdb8r]

while I support the idea of just renting in today's economy and not owning at all. I believe you are a little sloppy in your comparison.

in this environment, you would not get 5% in any sort of conservation investment, more likely no better than 1 1/2%

In your points version, you used a 2BR, but went with a 1BR and Studio and divided by 14 days in your second analysis

congrats on your low price purchase.

30-year T-Bill is currently yielding 4.49% so he's not THAT far off...and that's the MOST conservative investment you can get IMO...you can certainly stay conservative and increase your yield.

 

[wof45]

30-year T-Bill is currently yielding 4.49% so he's not THAT far off...and that's the MOST conservative investment you can get IMO...you can certainly stay conservative and increase your yield.

you actually can't invest in a 30-year t-bill without a million dollar investment.
in the real world, rates are much lower.

 

[wof45]

I think it would surprise most people what the US t-bill rates actually are --

4 week t-bill is 0.10%
13 weeks - 0.15%
26 weeks - 0.19%
52 weeks - 0.27%

the Money Market treasuries funds overnight are 0-0.14

 

[gabrielij]

In my experience, this is NOT correct. I reserved a unit at my home resort, locked=it off, and deposited into II without paying any fee. I have now requested exchanges for both halves of my unit and no fee was charged as long as my request only include Marriott resorts.

did you get a match? If yes, was it a like-kind exchange or were you able to trade up as we all used to do in the past?

 

[davidn247]

The discussion regarding the cost of purchasing ($10 per point) and maintenance (40 cents per point/year) is very interesting. I do not know how they came with this, but it seems not very economical.

In general, resale owners bought approx. 2 to 3 times lower than official price and could be now experiencing maintenance costs converted to points similar or lower than 40 cents (3BR Grande Vista = 0.335 cents, 3'725 points divided per $1'250 maintenance incl. all others).

If you are looking for MCV points, look on Ebay. Some owners are selling their (maintenance) points at 0.55 cents per points. This seems to be a better deal.

Frankly, I do not see the value of further buying points from them. When you think about it, what are you really buying? Can someone tell me? A currency that you do not control and can be devaluated at their discretion? Maybe I missed something, but it seems Marriott became like the Fed... Not sure how all this is regulated (how does the Trust work) but their can decide overtime to request more yearly points to book days/weeks at key resorts.

 

[wof45]

I don't know all the details, but basically, the trust is a real estate trust set up in Florida. points come in 250 point batches. The total of the value of all point batches is the value of the weeks that marriott put in. The total points that can be taken out of inventory is the same total, so they have point values for day reservations that total over all weeks in the trust. So, if the point cost for one reservation goes up, the point value for another reservation must go down.

I believe they can change the point value awarded to legacy points to interface with the trust points. It wouldn't surprise me if they made these changes to make supply = demand, between legacy points and trust points, just as they will make supply = demand for reservations within the trust.

 

[ocdb8r]

you actually can't invest in a 30-year t-bill without a million dollar investment.
in the real world, rates are much lower.

But you can easily gain exposure to long term treasuries via investments open to individuals in much smaller amounts. The iShares Barclays 20+ Year Treasury ETF is just one example.

Bottom line is that 5% was not off base to calculate a rate of return for a long time horizon. 52-week t-bill returns are certainly not a good basis of comparison for a long term purchase such as a timeshare.

 

[ocdb8r]

did you get a match? If yes, was it a like-kind exchange or were you able to trade up as we all used to do in the past?

I did not get a match yet, however based on searches of what is currently available (instant exchange) I would be able to trade up (and NOT only for units inside the flexchange window). For example, I can see 2 and 3 bedroom units at Club Sol Antem with my lock-off...granted they are in March and November (shoulder seasons) but I think that's a result of what happens to be in inventory and/or the power of my Gold season unit.

 

[wof45]

But you can easily gain exposure to long term treasuries via investments open to individuals in much smaller amounts. The iShares Barclays 20+ Year Treasury ETF is just one example.

Bottom line is that 5% was not off base to calculate a rate of return for a long time horizon. 52-week t-bill returns are certainly not a good basis of comparison for a long term purchase such as a timeshare.

an ETF is hardly a conservative investment.
perhaps you should take a look at the chart for TLT.
this is 3.4% for the past year, -11.9% for the past 3 months.

the better the economy does, the worse this ETF will do.

 

[ocdb8r]

an ETF is hardly a conservative investment.
perhaps you should take a look at the chart for TLT.
this is 3.4% for the past year, -11.9% for the past 3 months.

the better the economy does, the worse this ETF will do.

Again, over a longer time horizon returns will approximate the return of the bonds held, less the expense ratio. We're not talking about short-term 12 month time horizons. If you're happy to accept 1.5% as a "conservative" investment return, more power to you. I disagree that 5% was an off-base estimate for a long term time horizon.

This isn't an investment forum, so rather than take my or wof45's word for it, anyone interested in doing a comparison of owning vs. renting can use the Spreadsheet posted here on Tug. http://www.tug2.net/advice/Timeshare_Ownership_Cost_Comparison.xls That way you can put in whatever investment return YOU feel is reasonable.

 

[OldPantry]

Guys,

I'm thrilled at the vibrant response to my analysis. But sloppy? SLOPPY?
Well, my wife might agree.

I would emphasize what ocdb8r says about returns. Since a timeshare is a long term commitment, the opportunity cost should also reflect a long-term investment alternative. There are tons of bonds out there yielding over 5%, if bought long term. Just one example: Goldman Sachs 6.75% due 10/1/37, valued today at 101.8 to yield 6.6% rated A2/A-. I know these bonds well ... I own a ton of them. Yeah, they're way out there. But guess what, your Marriott "investment" is eternal! So, end of discussion, 5% long term is totally doable, and pretty safely.

As to wof45's comment about my points analysis. I think he's accusing me of an apples and oranges comparison. I think I was simply running through the two most likely points scenarios.

My first analysis assumes the purchase of enough points to nab a low-season Ko Olina 2BR. The second explores the real cost of mirroring what many weeks owners do: exercising their lockoff privilege to get two weeks of usage for the single week. Since this would now require extra points, I thought it would be interesting to explore that too. I did use Ko Olina point requirements; but that's not exactly improbable (at least for a Ko Olina owner). I think other resort/week scenarios would be very similar.

My fee estimates were a guess. I don't think they matter much, as they represent a fairly tiny part of the real costs.

The $9.2/point cost going up to $10 is straight from a Ko Olina salesman (Jeff Miller), as is the annual $.40/point maintenance fee.

 

[CatJ114683]

We are currently at Grande Vista and have just come from our 3rd explaination of the point system. (Earlier sessions at HHI and Williamsburg) I am not quite sure why we would give up our deeded week in return for a very small slice of a much larger pie. Since this new points system is basically a REITs investment, we have not been able to get any clear cut answer on what would happen if Marriott were to fail, although we did get an emphatic 'No it is not really a REIT.. " In a true REIT, if it fails, you are out. Can anyone tell me what would happen in the instance of Marriott failing?
Also, the cost to invest more $$ in this new trust does not seem to be a very good return on investment. For nearly 15K you can buy 1500 additional points and incur an additional $600 per year maintenance charge. Perhaps the Marriott program is just now to rich for our blood. On the other hand, if "everybody" is buying into the new program and will not be trading through II, that will make our deposit into II that much more desirable.

 

[TheTimeTraveler]

We are currently at Grande Vista and have just come from our 3rd explaination of the point system. (Earlier sessions at HHI and Williamsburg) I am not quite sure why we would give up our deeded week in return for a very small slice of a much larger pie. Since this new points system is basically a REITs investment, we have not been able to get any clear cut answer on what would happen if Marriott were to fail, although we did get an emphatic 'No it is not really a REIT.. " In a true REIT, if it fails, you are out. Can anyone tell me what would happen in the instance of Marriott failing?
Also, the cost to invest more $$ in this new trust does not seem to be a very good return on investment. For nearly 15K you can buy 1500 additional points and incur an additional $600 per year maintenance charge. Perhaps the Marriott program is just now to rich for our blood. On the other hand, if "everybody" is buying into the new program and will not be trading through II, that will make our deposit into II that much more desirable.

Who says anything about giving up your deeded week? Enrolling your week just allows you more options, but you never give up your deed.

You can use your week traditionally (as you always have), or you can enhance it's use.

Buying points is another issue, but there's no reason you really need to unless you really want to.




.

 

[OldPantry]

What if you just buy points?

Since the points program is clearly a hard sell for existing weeks owners, I thought I'd run a couple of scenarios for the real targets: new customers who don't own already.
1. Buy the minimum of 1500 points @ $10/point.
Here you're shelling out $15000. As a company, Marriott can immediately invest that money. If they can't make 5%, then they need new management. But you too can get at least 5% yearly on that money (invested long-term). So, opportunity cost, per year, is at least $750. Maintenance fee will now be $600. $165 all-inclusive fee. Total of $1515. That's $303/night, if you only get five nights (and you will, you will).
In most cases, 1500 points gets a low (mud) season villa for five week nights. A random example: three coastal Florida VCs, whose LOWEST nightly charge is 200 points, with some OK weeks (summer, pretty hot) at 300, but most of the desirable weeks at 500 or more for a weekday 2BR. I looked up charges for May 15-20, five 300 point nights. BeachPlace Towers will rent for $189/night, Ocean Pointe for $239 and Oceana Palms for $349. That's without any discounts (AAA, senior). Put in senior, and the prices drop to $161, 195 and 295. And with a MOD (weeks owner-yeah I know, a bit off topic) discount, even Oceana Palms drops to $227. Only Oceana Palms, without a discount, might possibly make sense, but keep in mind that it's probably the most popular VC in Florida, since it's new. Can you get the days you want on points?
2. Bite the bullet and buy 4600 points, enough (or nearly) to get a high season 2BR week in most VCs. Yearly opportunity cost on $46000 = $2300. Maintenance of $1840. Fee $165. Total = $4305. That's $615/night! $615!
No beach front, no ocean view, no 3BR (at least in Hawaii)! To rent, say Ko Olina, mountainview for July (4575 points) is $484/night, without a discount.

If you have any willingness to consider the time value of money, Marriott Vacation points make no economic sense whatsoever. You end up paying more for the weeks than you would simply buying direct from Marriott. Your "flexibility" depends on snagging the days/weeks you want, with no guarantee they'll be available. If you buy direct, then you know immediately what's available and plan accordingly.

Also, what happens if you want to sell your points later on? What if they drop in value, as has always been the case with traditional Marriott timeshares? You can then factor that loss into the nightly cost of your days and weeks, and get totally sick to your stomach.

AND, if you can't sell them, will you also have the maintenance charges hanging on you, just like regular timeshare users? I think so. You might not even be able to give your points away (impossible? Just ask all those guys trying to "sell" their timeshares on Ebay for $1).

 

[noodlethepoodle]

Hope to straighten a misconception. Anyone enrolled in the points program can still call owner's services and reserve a week in his/her season without incurring any extra charges or needing more points.

It is when somebody wants to TRADE into the resort using DC points that person has to use more points than Marriott would give the owner for that week.

ie. I own platinum at Cypress Harbor and Imperial Palms (Orlando). I called owner services 13 months in advance and reserved Feb. break week for 2012. I have a request 1st request using those weeks. If my request does not come through by 9/30/11 I can exchange those weeks for DC points.

Be aware, Marriott has imposed a Sept 30th deadline for exchanging for DCpoints. Also you must use your DC points in the year in which they are issued or by JUNE 30th you must tell Marriott that you want to bank the points for next year's usage. In addition, if you chaange your mind in say Sept. and you want to use the points that you banked you must now BORROW from the next year. What a cumbersome and user unfriendly system.

It would be much better if you could just accumulate and use DC points the way you can do with Marriott reward points.

My big Complaint is that when I bought DC points I was told that they could be used just as currency. Within reason I could reserve anything at anytime. Now, 12 months in advance I want to reserve a week in St. Thomas to go with the platinum week that I already own and reserved with owner services. I was put on a wait list because no owner has put his/her week at Frenchman's Cove in for DC points. So what's the difference between waiting for II to get me a week at Frenchman's Cove and being on the DC points wait list?

I also requested the same week using Imperial Palms. I'll let you know which wait list comes through 1st.