odds of new SVN resorts?

[djp]

What do you think the odds of any new SVN resorts opening in the next 5-7 years are? Will Aruba and Cabo and WKORVNN happen in that time frame? I know that none of us know the future, I just dont want to be hopeful for eventual expansion if it is never going to happen.

 

[jarta]

What do you think the odds of any new SVN resorts opening in the next 5-7 years are?

Pretty much the same as real estate prices coming all the way back during the next 3-5 years.

Will Aruba and Cabo and WKORVNN happen in that time frame?

Aruba and Cabo - no. WKORV-N-N - perhaps yes, depending on the economy recovering and the permits not expiring. Right now Starwood is building at WDW and the rest of Lagunamar is ready for marketing. There is no pressure to build unless that inventory starts flying off the shelf. I doubt it will.

I know that none of us know the future, I just dont want to be hopeful for eventual expansion if it is never going to happen.

Until Starwood believes there are sufficient numbers of buyers for developer properties, there will be no expansion of the SVO. When Starwood believes there are sufficient numbers of buyers for developer properties, expansion will occur.

Sorry to be so vague. Don't get your hopes up for much happening in the next 3-5 years.

IMO, if anything occurs in the 3-5 year window, it might be contraction or reallignment of the SVO properties (Staroptions or resorts themselves based on relative MF at each resort). For example, I can perceive no good reason that SDO and WKV cost exactly the same number of Staroptions to visit. SDO is an OK place to stay in a pinch. But, it is no WKV. Nobody on TUG posts about actually going there. They just post about owning there and trading out of SDO because of low MF, low resale acquisition cost and a relatively high II trading power - accompanied by the Starwood II preference period. ... eom

 

[SDKath]

Probably close to zilch. Much higher odds that Starwood will get out of timesharing entirely. They are not sold out at any of their resorts (and have FINALLY started exercising ROFR at a few to help themselves out and keep prices from free-falling). People aren't buying too many TSs and the economy is terrible. My feeling is that what we have is what we will have in the next 5 to 10 years.

Would LOVE to be proven wrong though! Katherine

 

[tomandrobin]

I agree with both Katherine and Jarta.

We'll get additional phases at existing resorts only.

The only exception could be Maui, be that is only small, small chance.

Aruba was the resort I was really looking for Starwood to build. I waited patiently, they had bought the property, had drawings, etc....but in the end...nothing.

 

[MommaBear]

Maybe Starwood isn't building because too many of us have found TUG and will no longer pay full price!!!

 

[califgal]

We went to the owners update in WKORV( I wanted to get points because we're planning to go to Italy next year and need all the points we can get!) Wasn't painful..I specifically asked about any new resorts and the answer is no they are never building any new timeshare resorts. They are concentrating on building new hotels in China.

 

[KACTravels]

We went to the owners update in WKORV( I wanted to get points because we're planning to go to Italy next year and need all the points we can get!) Wasn't painful..I specifically asked about any new resorts and the answer is no they are never building any new timeshare resorts. They are concentrating on building new hotels in China.

Interesting -In early June, I went to an "owners informational meeting" (not officially an Owners Update because my husband didn't want to waste 90 minutes of his vacation) at WKORVN and the guy told me that they were moving forward with the construction at WKORVN-N. He even went into the whole spill that they won't be Lock Offs, so we should think about the "rare inventory" that comes in for WKORV and WKORVN, because they will even becme more rare when they start selling the N-N property. :zzz:

 

[jdds]

Probably close to zilch. Much higher odds that Starwood will get out of timesharing entirely. They are not sold out at any of their resorts (and have FINALLY started exercising ROFR at a few to help themselves out and keep prices from free-falling). People aren't buying too many TSs and the economy is terrible. My feeling is that what we have is what we will have in the next 5 to 10 years.

Would LOVE to be proven wrong though! Katherine

I don't have my contracts handy, and I'm sure this has been asked before, so I apologize, but if Starwood backs out of timesharing, what happens with what we bought? I'm sure I asked this question when I bought, but my memory is getting bad with age.

 

[GregT]

I don't have my contracts handy, and I'm sure this has been asked before, so I apologize, but if Starwood backs out of timesharing, what happens with what we bought? I'm sure I asked this question when I bought, but my memory is getting bad with age.

I'm not sure what happens to your specific property/contract, but there is precedent (Marriott) of what happens when one of these big guys backs out of timesharing. For my situation, I continue to have usage to my deeded week, and it continues to trade through II, and there continues to be an HOA managing the property.

Marriott (the hotel company) is spinning off its timeshare business, which will attempt to be successful through on-going management of its legacy timeshare properties, and sales of its new points-based product.

An Information Statement was just filed with the SEC (for the Marriott stockholders to explain this new share of stock they'll get -- in the new company) and its interesting reading from a perspective of the challenges of the timeshare business. No surprise, Marriott remains highly dependent on asset sales for its revenues, and its an unknown if sales of its new points product will be robust enough to sustain an independent organization.

Presumably, Starwood is very similar, and highly dependent on (volatile and presumably declining) asset sales for its recurring revenues, but is fortunate/smart to not have the bloated inventory that Marriott has. Accordingly, Starwood can have a reasonably profitable business by ROFRing existing properties and then reselling those units at the higher price, and avoiding all the risks of development.

I'm not sure if that's an exciting enough business for Starwood to remain in however (if the glory days of timeshare sales are behind us). I've speculated elsewhere that Marriott, which must find new sources of revenue, may begin to acquire other timeshare organizations to expand its management revenue and expand its exchange capabilities (to compete with II and RCI). It's not clear if one hotel company would sell to another hotel company, but business is business, and if Starwood grows tired of the lower revenues from the timeshare division, they could sell the management rights (and remaining unsold units) to either Marriott or Hilton.

These are interesting times -- and this is all speculation on my part to what might happen to Starwood. My opinion is limited to reading Marriott's Information Statement, and my belief that the timeshare industry is ripe for consolidation.

Best,

Greg

 

[califgal]

so we should think about the "rare inventory" that comes in for WKORV and WKORVN, because they will even becme more rare when they start selling the N-N property.

That is so funny! I heard a timeshare salesperson tell a prospective customer that WKORV was completely sold out before it was built. Famous for telling so many lies! :hysterical:

 

[jarta]

califgirl, ... "I heard a timeshare salesperson tell a prospective customer that WKORV was completely sold out before it was built. Famous for telling so many lies! :hysterical: "

Actually, since there are/will be three separate phases (with three separate HOA boards) WKORV, WKORV-N and what is referred to as WKORV-N-N, the statement that WKORV was sold out before it was built is closer to an overstatement. WKORV was virtually sold out before the structures were completed.

Back then, for lots of reasons that have changed (the economy, lower MFs and Maui and Hawaii's tax policy being the main ones), sales at WKORV were pretty brisk.

What's for sale now at WKORV from Starwood is ROFRed inventory re-acquired by the developer on the open market. ... eom

 

[mlpmd56]

Starwood resort sales to other companies

Isn't there precedent for Starwood selling properties to other companies? Someone told me that the Marriott I own on Kauai (Kauai Beach Resort) was originally a Westin property and that is why the grounds are so beautiful and it resembles WKORV (that I also own). There are similarities, and I love staying at both! Marcy

 

[ocdb8r]

I'm curious to see what Marriott's move to selling points based ownerships will mean for SVO (and Hilton). While SVO has a points overlay that allows them to reap some of the benefits (such as the yearly SVN fee they collect), however it doesn't allow them to sell small packages of ownership like a ture points product does. Moving forward it will be interesting to see if Marriott's move will put sufficient pressure on the full week ownership model.

Whatever the result may be, the direction Marriott has taken along with the docs filed in connection with the spinoff have made it clear that the traditional timeshare development model is likely a thing of the past. The financial crisis has moved the market sufficiently that I don't see SVO or any of the major timeshare operators doing much development in the near or medium term.

 

[KACTravels]

What's for sale now at WKORV from Starwood is ROFRed inventory re-acquired by the developer on the open market. ... eom

Correct...he also said that they had access to inventory from Mortgage defaults and also HOA inventory due to MF delinquencies. (Please pardon any specific legal detail discrepancies - this was just my pedestrian understanding of what he was trying to peddle)

 

[jarta]

Pedal?

o__
_.>/ _
(_)_\(_)

... eom

 

[maph]

Isn't there precedent for Starwood selling properties to other companies? Someone told me that the Marriott I own on Kauai (Kauai Beach Resort) was originally a Westin property and that is why the grounds are so beautiful and it resembles WKORV (that I also own). There are similarities, and I love staying at both! Marcy

A bit off topic, but I was told by a Marriott salesperson at Waiohai that this is true - it was a Westin until it was badly damaged by Hurricane Iniki in 1992. After the hurricane Westin decided not to rebuild the property and instead sold it to Marriott.

 

[gregb]

Starwood has said many times that they want to get out of the hotel ownership business, and concentrate on the management and services aspect of the business, keeping the Starwood brands. In the hotel business, it is very common for the owner of a hotel property to contract with a name brand chain, like Westin, Hilton, etc. to operate their hotel. You will even see hotels change brand names, from say Hilton to Sheraton, without changing ownership of the property.

This stated strategy would be consistent with Starwood not developing any more TimeShares, but continuing to manage and operate the existing SVO network. I believe that Starwood makes as much money operating an SVN resort as it would for operating a similar sized hotel. If that is so, then I would not expect them to sell SVN, as is seems to mesh with their stated strategy for the corporation.

Greg

 

[DeniseM]

A bit off topic, but I was told by a Marriott salesperson at Waiohai that this is true - it was a Westin until it was badly damaged by Hurricane Iniki in 1992. After the hurricane Westin decided not to rebuild the property and instead sold it to Marriott.

I don't think Starwood was even IN the TS business in '92 - I don't believe it!

 

[pathways25]

I don't think Starwood was even IN the TS business in '92 - I don't believe it!

It was a hotel, the Westin Kauai, from 1987 to 1992.

 

[GregT]

Starwood has said many times that they want to get out of the hotel ownership business, and concentrate on the management and services aspect of the business, keeping the Starwood brands. In the hotel business, it is very common for the owner of a hotel property to contract with a name brand chain, like Westin, Hilton, etc. to operate their hotel. You will even see hotels change brand names, from say Hilton to Sheraton, without changing ownership of the property.

This stated strategy would be consistent with Starwood not developing any more TimeShares, but continuing to manage and operate the existing SVO network. I believe that Starwood makes as much money operating an SVN resort as it would for operating a similar sized hotel. If that is so, then I would not expect them to sell SVN, as is seems to mesh with their stated strategy for the corporation.
Greg

That is a very interesting comment -- I had not thought of it that way. Thank you very much!

Best,

Greg

 

[maph]

It was a hotel, the Westin Kauai, from 1987 to 1992.

Right, thanks! Follow the link...

http://www.hemmeter.com/project-Westin-Kauai.htm

 

[mindy35]

It was a hotel, the Westin Kauai, from 1987 to 1992.

I remember it to be a rather opulent resort. there was a zoo, paid property tours on both wooden boats and carriages pulled by clydesdale horses. The restaurants were destination worthy and the golf course was one of the best of all the islands.

Marriott took it over as a hotel first and sold off the golf to a private club. In my view, the property continued to loose it's luster as they converted to TS's. OK property but never the glory of its original self.

 

[LisaRex]

I remember it to be a rather opulent resort. there was a zoo...

In my view, the property continued to loose it's luster as they converted to TS's. OK property but never the glory of its original self.

You can say that for lots of places. Once the giraffes leave, the place goes downhill.