Trust vs. Legacy Bucket no longer relevant?

[Werner Weiss]

I stand by my earlier posts.

Let me try one more thing...

The Trust is more than a store of inventory. It's a legal entity that OWNS real estate. Trust point owners essentially own shares in the Trust, so they can book Trust assets directly.

The Exchange Company does not own real estate. It serves a different purpose than the Trust.

When you and I, as Enrolled owners, opt for points, it puts inventory into the Exchange Company. We are not turning our deeds over to the Trust. We are just providing usage.

The Trust also provides usage to the Exchange Company. The Trust cannot provide an unlimited amount of inventory to the the Exchange Company, only inventory to "pay" for the Exchange Company inventory that Trust owners want to book. The system can stay "whole" even if the Trust provides "currency" to book Trust inventory rather than providing actual usage nights. (In either case, it doesn't mean that enrolled owners have have unlimited access to inventory owned by the Trust.)

As much as possible, Trust Points and "Exchange Points" currently behave the same way, but they're two different things. Legally, they are required to be two different things.

If demand is balanced, it can even seem as if they are the same thing. User interfaces on an eventual self-service website and Owner Services computer terminals can be designed so that they appear to be the same thing. But there can be situations when Trust owners have access to inventory that Enrolled owners won't have access to, just as Enrolled weeks owners can choose to use their weeks themselves rather than opting for points.

 

[gblotter]

I stand by my previous statement.

This DC program is a mess as illustrated in this thread by the fact that intelligent and well-informed people have a hard time explaining to each other how it all works. And this after 18 months of dissecting the details from every possible angle. If it is this difficult for savvy tuggers, how on earth can less-obsessive people who don't spend hours and hours reading these threads have any chance of comprehending the system?

Marriott had a unique opportunity to enhance the world's best timeshare program in a truly wonderful way. Instead they were too clever by half and succeeded only in confusing and alienating some of their most loyal customers. In my view, this fiasco ranks right up there alongside the recent suicidal moves by Netflix. Marriott's latest attempt to untangle this hairball only confirms my opinion.

 

[hotcoffee]

. . . The Trust is more than a store of inventory. It's a legal entity that OWNS real estate. Trust point owners essentially own shares in the Trust, so they can book Trust assets directly. . . .

There are still far more unsold points in the trust than sold points. So, the legal requirement to ensure that all Trust owners have access to Trust inventory can still be maintained while making Trust inventory available to enrolled members.

Moreover, Trust points will always be exchanged for Explorer exchanges, cruises, etc. increasing still further the excess Trust inventory. I cannot think of any reason why Marriott could not make that inventory available to enrolled members who elect points and still fulfill its legal requirements to Trust owners.

 

[SueDonJ]

I stand by my previous statement.

This DC program is a mess as illustrated in this thread by the fact that intelligent and well-informed people have a hard time explaining to each other how it all works. And this after 18 months of dissecting the details from every possible angle. If it is this difficult for savvy tuggers, how on earth can less-obsessive people who don't spend hours and hours reading these threads have any chance of comprehending the system?

Marriott had a unique opportunity to enhance the world's best timeshare program in a truly wonderful way. Instead they were too clever by half and succeeded only in confusing and alienating some of their most loyal customers. In my view, this fiasco ranks right up there alongside the recent suicidal moves by Netflix. Marriott's latest attempt to untangle this hairball only confirms my opinion.

In some ways I think TUGgers are making all this more difficult than Marriott is, and it seems to have been instigated by posts that showed up on TUG within minutes of the release announced by Marriott on 6/20/10. The loudest and most-often repeated false criticism has been, "Oh no, the sky is falling, Enrolled Points don't have access to Trust inventory!" Taken at face value that statement is technically correct, but taken in the context of Marriott's entire DC program it's not functionally correct.

Owners who enroll their Week(s) in the DC cannot directly access Trust inventory, but the system is designed so that Trust inventory can be imported to the DC Exchange Company where it is available to Enrolled Owners who convert their Week(s) to DC Points. The number of successful Trust inventory reservations that have been reported by Enrolled Owners has proven this out since the very first day that we were able to make reservations. That bolded statement is really all we need to know. (Talking about usage here, I mean. Keeping Marriott honest is what requires us to understand more fully the technical nuances of the program.)

We have forced Marriott to counter that "sky is falling" assertion from the first day the program was announced. Every time they try to give their sales reps a blanket statement that they can use to simply explain the system's functionality, somebody in a sales presentation or on TUG comes back with the "aaaiiieee! Enrolled Points don't have direct access to Trust inventory!" technicality. So Marriott tries another explanation and the same thing happens, so they try again, and again, and again ... Of course it doesn't help that the sales reps go off-script as often as they possibly can which adds even more confusion to the mix. Marriott needs to be made aware when their reps say things that are completely at odds with what's written in the DC governing docs (such as what the rep said to this thread's OP,) so that they can correct those misrepresentations as soon as possible.

All this is why I'm convinced this TUG discussion is going to go on FOR-EV-ER. Marriott and the sales reps are going to continue to focus on the functionality while some TUGgers are going to keep focusing on the technicalities. Here on TUG the people who don't like the DC will use the technicality as "proof" that Weeks must not be equal players in the DC, while the people who see (and are getting!) usage value from the DC will say that their success with Trust inventory reservations is all the proof they need that their Enrolled Points play well with others.

 

[SueDonJ]

My apologies - I read your post, but not carefully enough. Still, I'm from MIssouri (the show me state) on all this.

Show me, . . . in writing, . . . in plain english.

But will "plain english" satisfy you? I can't see how Marriott could just announce one day that Points from enrolled/converted Weeks can directly access Trust inventory. It's not possible unless and until they amend several of the DC governing docs - and I'd guess those amendments wouldn't be "in plain english." I know I won't believe what the OP's rep said until I see the amendments.

Just like Marriott has had to satisfy legal and accounting regs with respect to Weeks purchases, inventory and availability for all these years, they now have to do the same with Points purchases, conversions, inventory and availability. The system they've set up with the Trust and the Exchange Company does just that. If they try to do something contrary to the governing docs and the system (which is what the OP's sales rep suggested) then they risk losing their licenses to sell Points and run the Exchange Company. They're not going to risk their entire business model in order to appease the folks who are made confused by the technical and functional aspects of it.

 

[Whirl]

In some ways I think TUGgers are making all this more difficult than Marriott is, and it seems to have been instigated by posts that showed up on TUG within minutes of the release announced by Marriott on 6/20/10. The loudest and most-often repeated false criticism has been, "Oh no, the sky is falling, Enrolled Points don't have access to Trust inventory!" Taken at face value that statement is technically correct, but taken in the context of Marriott's entire DC program it's not functionally correct.

Owners who enroll their Week(s) in the DC cannot directly access Trust inventory, but the system is designed so that Trust inventory can be imported to the DC Exchange Company where it is available to Enrolled Owners who convert their Week(s) to DC Points. The number of successful Trust inventory reservations that have been reported by Enrolled Owners has proven this out since the very first day that we were able to make reservations. That bolded statement is really all we need to know. (Talking about usage here, I mean. Keeping Marriott honest is what requires us to understand more fully the technical nuances of the program.)

We have forced Marriott to counter that "sky is falling" assertion from the first day the program was announced. Every time they try to give their sales reps a blanket statement that they can use to simply explain the system's functionality, somebody in a sales presentation or on TUG comes back with the "aaaiiieee! Enrolled Points don't have direct access to Trust inventory!" technicality. So Marriott tries another explanation and the same thing happens, so they try again, and again, and again ... Of course it doesn't help that the sales reps go off-script as often as they possibly can which adds even more confusion to the mix. Marriott needs to be made aware when their reps say things that are completely at odds with what's written in the DC governing docs (such as what the rep said to this thread's OP,) so that they can correct those misrepresentations as soon as possible.

All this is why I'm convinced this TUG discussion is going to go on FOR-EV-ER. Marriott and the sales reps are going to continue to focus on the functionality while some TUGgers are going to keep focusing on the technicalities. Here on TUG the people who don't like the DC will use the technicality as "proof" that Weeks must not be equal players in the DC, while the people who see (and are getting!) usage value from the DC will say that their success with Trust inventory reservations is all the proof they need that their Enrolled Points play well with others.

Very rational and well articulated viewpoint, SueDonJ. I think the assessments of technicalities here on TUG are interesting and well researched and likely quite accurate. That degree of analysis is what makes TUG a fascinating place and learning the ins and outs over the years to a greater degree than the vast majority of timeshare owners is what makes TUG a great place to learn how to squeeze the most value out of any timeshare system and in many cases even exploit inefficiencies in the system to trade and exchange for value far greater than that owned.

All that said, Marriott, nor any system designs it for the minority that will pick apart every nuance. Instead it is designed to hopefully largely meet the needs of the majority of owners who take the basic rules at face value ( and many do not even ever learn the basics).

When I was younger and had way more time ( and less money) I was all about exploiting the ways to get max value from the system. Lifestyles and needs change and now I just want to make simple exchanges that are hopefully what I want more of the time than not. If not, I can go where I own and I am happy with that, so I have restructured to keep it easy. All my weeks cost way more than the ones I had earliest on...even bought developer after first resales, because it suited my longer term needs for simplicity.

Functionally, as Sue says, the system is simple....and that has value to many, I would think. MOST, dont care one bit about all the technicalities of things like trust vs. exchange and with Marriott being less focused on the trust vs. exchange pool distinction, things are simplified, whether it is still going on behind the scenes or not, they seem to be reducing some systemic complications.

I take some comfort in the fact that they are being reflective and trying to simplify the administration of the program.....good for all, I think. Yes, time will tell, but the intention seems to be well placed.


And yes...this debate will go on FOR-EV-ER.

 

[Werner Weiss]

There are still far more unsold points in the trust than sold points. So, the legal requirement to ensure that all Trust owners have access to Trust inventory can still be maintained while making Trust inventory available to enrolled members.

That assumes that Marriott (Marriott Vacations Worldwide) wants to GIVE AWAY that inventory instead of monetizing it through Marriott.com and through income from Getaways at Interval International.

I do think that Marriott now has a business incentive to use some of that inventory to prime the Exchange Company. In the long run, however, there will be less unsold inventory, and, when the economy improves, more demand for rentals. So, in the long run, I don't really expect Marriott to shovel unsold inventory usage in to the Exchange Company without expecting anything in return.

Moreover, Trust points will always be exchanged for Explorer exchanges, cruises, etc. increasing still further the excess Trust inventory. I cannot think of any reason why Marriott could not make that inventory available to enrolled members who elect points and still fulfill its legal requirements to Trust owners.

That's incorrect. When any owners choose options such as cruises and other Explorer options, Marriott has to pay real money to the cruise lines, hotels, safari providers, and so on. Unless Marriott can monetize inventory corresponding to the points used for such options, Marriott will be under water. This is NOT "excess" inventory, either for use by Trust owners or to fatten up the Exchange Company inventory. Marriott needs to find people who will pay real money so that Marriott can pay the providers.

 

[dioxide45]

I guess the big questions is, why did Marriott have to set the system up the way that they did? Why did they need to create an exchange company. Why couldn't those weeks from owners that elect points just go directly in to the trust. Then legacy owners could reserve trust inventory and trust owners could reserve legacy inventory. The problem is with how trusts work. The trust owns real estate. Marriott is selling a sliver of that real estate to everyone who buys trust points.

I don't really see how Marriott could have set this up any other way while being able to give legacy and trust owners access to each others inventory.

The true problem, and it has been mentioned before, is that legacy owners can not do request first searches in the DC program. If that were opened up it would do a lot to level the playing field between legacy and DC points.

IN the end it comes down to the ability of all owners to get the reservations they want, and so far it seems that most people are successful. Perhaps more so than legacy owners trying to reserve some of their home resort weeks. If enrolled and trust owners are getting what they want, the mechanics don't matter.

 

[dioxide45]

That assumes that Marriott (Marriott Vacations Worldwide) wants to GIVE AWAY that inventory instead of monetizing it through Marriott.com and through income from Getaways at Interval International.

The same holds true when the trust sells down a lot of that inventory. Just like in the past with weeks being dumped in to II, Marriott is dumping weeks in to the Exchange Company. When there isn't as much unsold inventory to dump in to the exchange company, it will be much more important on owners electing points and trust owners using the exchange company rather than owners just reserving what they own.

[/QUOTE]I do think that Marriott now has a business incentive to use some of that inventory to prime the Exchange Company. In the long run, however, there will be less unsold inventory, and, when the economy improves, more demand for rentals. So, in the long run, I don't really expect Marriott to shovel unsold inventory usage in to the Exchange Company without expecting anything in return.


That's incorrect. When any owners choose options such as cruises and other Explorer options, Marriott has to pay real money to the cruise lines, hotels, safari providers, and so on. Unless Marriott can monetize inventory corresponding to the point used for such options, Marriott will be under water. Marriott cannot simply use such "excess" inventory either for Trust owners or to fatten up the Exchange Company inventory. Marriott needs to find people who will pay real money so that Marriott can pay the providers.[/QUOTE]

I agree. Currently Marriott is feeding the system with weeks converted to MR Points, cruises, explorer packages and unsold inventory. There is no requirement that they do this now or in the future. By putting this kind of inventory in to the exchange company, Marriott is taking a 100% loss on money that flows for those weeks (MR points are not free).

 

[windje2000]

But will "plain english" satisfy you?

Sue, my comment was intended to be sardonic. Let me make it perfectly clear that I have no expectation whatsoever that I will ever see any writing from VAC (in plain english or otherwise) that states what the OP wrote, which is:

He advised that they "just made a change in the system" that makes the distinction between trust vs. legacy points irrelevant. He followed up by saying that they now have permission to combine trust and legacy points for reservations without any restrictions.

I simply do not believe any representations made orally by anyone at VAC absent the ability to verify the assertions made through the legal docs.

I think VAC has done/is doing some customer research and is in the process of identifying the elements of DC that folks are having problems understanding and/or they find offensive. I was asked for my opinions and responded to a very detailed and probing survey about DC a few weeks ago.

My view is what the rep said is simply spin to address what they are learning from their customers.

Note also that I would be happy to eat those words if DC changes for the better.

Like I said . . . and like you said

I know I won't believe what the OP's rep said until I see the amendments.

when it comes to DC I'm from MIssouri. Show me.

 

[newportbeach]

No impact on a pure Legacy Owner

I called Marriott to inquire about changes. I was told about how legacy and trust points are not being treated and there appears to be a change but not what I was hoping for. If someone owns both trust and legacy points they may combine them to qualify for a trade whether it is a legacy or trust inventory item. However, I confirmed that since I own only legacy, I am not entitled to a unit that is in the trust inventory. Makes me think that they have come up with another cleaver sales angle to promote the sale of say 2,000 bi annual points? I am not prepared to buy now, and will not until I see the Trust actual perform well over the next few years and offer new and interesting locations.

Just look at how long it is taking them to get on line direct booking, that is as of today still not working.

 

[SueDonJ]

I guess the big questions is, why did Marriott have to set the system up the way that they did? Why did they need to create an exchange company. Why couldn't those weeks from owners that elect points just go directly in to the trust. Then legacy owners could reserve trust inventory and trust owners could reserve legacy inventory. The problem is with how trusts work. The trust owns real estate. Marriott is selling a sliver of that real estate to everyone who buys trust points.

I don't really see how Marriott could have set this up any other way while being able to give legacy and trust owners access to each others inventory.

I agree completely! As well, there is no way Marriott could have designed a system that allowed Weeks owners direct access to Trust inventory unless Weeks owners would sign over their ownership to Marriott. I'm sure Marriott wouldn't want that much inventory on their books, and as an owner the last thing I'd want to do is give up usage of my Weeks as originally purchased. What they've designed allows Weeks owners to elect annually to play in their new sandbox while retaining all the benefits of home resort usage, AND as long as the features of the DC are attractive to Weeks owners then it gives Marriott access to Weeks inventory without them having to assume the costs for it. It's a win-win for Marriott and many owners of high-demand Weeks inventory.

The true problem, and it has been mentioned before, is that legacy owners can not do request first searches in the DC program. If that were opened up it would do a lot to level the playing field between legacy and DC points.

This is a problem and for some owners it ranks right up there with not having DC online reservation capability. BUT, the lack of an ongoing "request first" feature similar to II's does not mean that Enrolled Owners have to convert their Week(s) to DC Points and then wait and hope for the best while fumbling all over creation with crossed fingers. We can call in repeatedly and the VOA's will be able to tell us before we commit to converting our Week(s) whether or not the intervals we want are immediately available. Granted, again, that's not a true ongoing request equal to II's. But considering the TUG mantra that it's helpful to call in occasionally to II when you have an ongoing request because sometimes that causes inventory to mysteriously appear ... well, that more evenly levels the playing fields.

IN the end it comes down to the ability of all owners to get the reservations they want, and so far it seems that most people are successful. Perhaps more so than legacy owners trying to reserve some of their home resort weeks. If enrolled and trust owners are getting what they want, the mechanics don't matter.

I wouldn't go so far as to say they don't matter - like you and others have pointed out it is important to understand how and why inventory moves, and try to project how it will continue to move as the system develops. But I think some folks get stuck on this certain aspect of the mechanics - "aaaiiieee! Enrolled Weeks can't directly access Trust inventory!!" - and don't follow it through the design plan to the logical functionality - "Direct access isn't necessary because of the Exchange Company."

 

[SueDonJ]

... I agree. Currently Marriott is feeding the system with weeks converted to MR Points, cruises, explorer packages and unsold inventory. There is no requirement that they do this now or in the future. By putting this kind of inventory in to the exchange company, Marriott is taking a 100% loss on money that flows for those weeks (MR points are not free).

But if/when the inventory they're feeding into the Exchange Company is then taken by an Enrolled Member with their converted Week(s), can't Marriott take those Weeks and mingle them among their "buckets" to offer them for cash in some fashion? Is there a requirement that every deposit of an enrolled/converted Week must remain in the Exchange Company for Trust or Exchange Member usage? Could be but I don't remember seeing it.

(Of course you and Werner are correct - while Marriott is feeding excess inventory into the Exchange Company they're losing money on every interval that sits there unused. I'm just asking here if what I'm thinking is possible - that they're free to take whatever inventory out of it that will make them some money?)

 

[SueDonJ]

I called Marriott to inquire about changes. I was told about how legacy and trust points are not being treated and there appears to be a change but not what I was hoping for. If someone owns both trust and legacy points they may combine them to qualify for a trade whether it is a legacy or trust inventory item. However, I confirmed that since I own only legacy, I am not entitled to a unit that is in the trust inventory. Makes me think that they have come up with another cleaver sales angle to promote the sale of say 2,000 bi annual points? I am not prepared to buy now, and will not until I see the Trust actual perform well over the next few years and offer new and interesting locations.

Richard, this is exactly the technicality that we're talking about here. Unless Marriott has filed amendments to the governing docs then they are not legally able to make the change that you were told they've made. It would simply make it impossible for them to reconcile their inventory, and if they can't satisfy the ongoing inventory audits then they'll lose their licenses. (I'll be sitting at the table beside windje eating my words if they produce the amendments.)

Since the first day Marriott has been trying to figure out how to make the new product attractive to Weeks owners, while at the same time dancing around the technicality that Weeks owners are not completely shut out of Trust inventory. Both statements the rep made to you are technically correct now and have been since the day the new system was rolled out. BUT, what they don't say is that all it takes for Trust inventory to be made available to Enrolled Owners is for the inventory to be routed through the DC Exchange Company where both Trust and Legacy Points can access it, and that has been happening since the first day.

They are now in the sorry position of having to downplay the technicality in order to entice Weeks Owners to enroll because they need that inventory to fuel the Exchange Company, while on the other hand, they still need to make the technicality appear to mean more than it does in order to entice Weeks Owners to purchase their new product, DC Trust Points. WE don't have to get sucked into their juxtaposition, though! Just take a look at what you own, how many DC Points your Week(s) are worth, how many DC Points it costs to go to wherever you may want to exchange into, and make your decision whether the initial and annual cash outlays make sense to you based on your usage pattern. (Same thing, by the way, when considering a DC Points purchase - figure out what it will get you and what it will cost you, and if you like the product, can afford it, and can get good vacations with the terms, buy it! If not, don't buy it! The decision doesn't have to be as difficult as some want to make it, and it certainly doesn't have to be reached by a consensus of TUGgers!)

Just look at how long it is taking them to get on line direct booking, that is as of today still not working.

Again, this is something that has a great deal of value for some owners and not as much for others. For example, owners who use the 13-mos reservation window for Weeks have always had to call in so for them this might not make a bit of difference, while busy folks who don't have time during business hours to call in might have a legitimate beef with the logistics. No right or wrong here, just a personal plus or minus.

 

[windje2000]

I guess the big questions is, why did Marriott have to set the system up the way that they did?

snip

The trust owns real estate. Marriott is selling a sliver of that real estate to everyone who buys trust points.

I don't really see how Marriott could have set this up any other way while being able to give legacy and trust owners access to each others inventory.

They likely could only have set it up differently by electing not to sell deeded interests . . . in the form of a land trust.

That's a business decision . . . that probably traces its origin to Marriott's decision to sell timeshare weeks as deeded interests in real property back in 1984.

 

[hotcoffee]

. . . When any owners choose options such as cruises and other Explorer options, Marriott has to pay real money to the cruise lines, hotels, safari providers, and so on. Unless Marriott can monetize inventory corresponding to the points used for such options, Marriott will be under water. This is NOT "excess" inventory, either for use by Trust owners or to fatten up the Exchange Company inventory. Marriott needs to find people who will pay real money so that Marriott can pay the providers.

When Trust owners choose options such as cruises and other Explorer options, they give up their purchased points to do so. My point is that they then cannot reserve any Trust inventory with those points for their entire usage period. While it is true that Marriott will always opt for rentals rather than bulk deposits, there is no reason for them not to allow an exchanger to reserve days that are available in the Trust. If Marriott had been able to rent every unsold week in its inventory, there would never have been any bulk deposits into II.

 

[Werner Weiss]

When Trust owners choose options such as cruises and other Explorer options, they give up their purchased points to do so. My point is that they then cannot reserve any Trust inventory with those points for their entire usage period. While it is true that Marriott will always opt for rentals rather than bulk deposits, there is no reason for them not to allow an exchanger to reserve days that are available in the Trust. If Marriott had been able to rent every unsold week in its inventory, there would never have been any bulk deposits into II.

When any owner ("Trust Member" or "Exchange Member") uses points for a cruise or other "Collection" vacation, they have used those points. The corresponding inventory is then no longer Trust inventory or Exchange inventory. It becomes Marriott Vacations Worldwide (VAC) rental inventory.

VAC has a responsibility to its shareholders to monetize that inventory. Otherwise VAC is giving away free cruises and other free vacations.

 

[hotcoffee]

I got out of the habit of posting comments about DC and points because it was patently clear that the negativity was never going to go away regardless of how successful DC members were in gettng their desired reservations. It has already gotten me vacations that I could not have gotten otherwise. In the end, that is all that counts. To each his own. . . .