lawsuit sterman v marriott - any more info?

[JIMinNC]

Correct, I was referring to the Trust for simplicity but the same is true for weeks in the Exchange Company. Once enrolled weeks are deposited, the specific "use period" must be reserved before it can be doled out to DC members.

In the Exchange Procedures document for the Destination Club Program and Exchange Company, there is this paragraph. It is bolded in the document for emphasis:

Exchange Company shall have the right to forecast anticipated reservations and use of the Accommodations and is authorized to demand balance, reserve, deposit, or rent the Accommodations for the purpose of facilitating the use or future use of the Accommodations or other benefits made available to Members through the Program in its sole discretion.

There is similar language in the MVCD Trust Reservation Procedures:

Trust Manager and Program Manager shall have the right to forecast anticipated reservation and use of the Accommodations of the Trust Plan and are authorized to reasonably demand balance, reserve, deposit, or rent the Accommodations for the purpose of facilitating the use or future use of the Accommodations or other benefits made available to Trust Owners through the Trust Plan or an Exchange Program.

To me as a layman, this would seem to give them the right to forecast anticipated deposits into the Exchange Company as well as Trust reservations for purposes of allocating inventory for reservations in each reservation window.

 

[tschwa2]

And let's hope it doesn't come to that. That is the way Starwood works it with the exchange companies. If you are going to deposit you get a blended value for your season and Starwood deposits what it thinks will be most beneficial to the Network. Most of the folks with more money, benefit from the increased prime time availability within the network and don't care about the lack of premium deposits in II, so no lawsuits that I am aware of.

 

[davidvel]

In the Exchange Procedures document for the Destination Club Program and Exchange Company, there is this paragraph. It is bolded in the document for emphasis:

Exchange Company shall have the right to forecast anticipated reservations and use of the Accommodations and is authorized to demand balance, reserve, deposit, or rent the Accommodations for the purpose of facilitating the use or future use of the Accommodations or other benefits made available to Members through the Program in its sole discretion.

There is similar language in the MVCD Trust Reservation Procedures:

Trust Manager and Program Manager shall have the right to forecast anticipated reservation and use of the Accommodations of the Trust Plan and are authorized to reasonably demand balance, reserve, deposit, or rent the Accommodations for the purpose of facilitating the use or future use of the Accommodations or other benefits made available to Trust Owners through the Trust Plan or an Exchange Program.

To me as a layman, this would seem to give them the right to forecast anticipated deposits into the Exchange Company as well as Trust reservations for purposes of allocating inventory for reservations in each reservation window.

No. Marriott's self-imposed restrictions/rights in its DC program cannot alter the deeded rights to reserve which are set forth in the underlying weeks/resorts.

Sure, they can decide to reserve any dates that it wishes based upon what it expects people in its "club" to likely want (see my reference to this in above post), but in reserving the weeks it is simply an owner of those weeks and thus is subject to the same underlying deeded rights.

I understand that to many people, lay or not, this is a difficult concept to get their hands around given Marriott's marketing of the DC. I have been beating this drum here since 2010, but the legalities have not changed: The Club has no more rights to reserve Use Periods than is allowed in the governing documents for the underlying Use Week (that you or me are subject to).

 

[JIMinNC]

No. Marriott's self-imposed restrictions/rights in its DC program cannot alter the deeded rights to reserve which are set forth in the underlying weeks/resorts.

Sure, they can decide to reserve any dates that it wishes based upon what it expects people in its "club" to likely want (see my reference to this in above post), but in reserving the weeks it is simply an owner of those weeks and thus is subject to the same underlying deeded rights.

I understand that to many people, lay or not, this is a difficult concept to get their hands around given Marriott's marketing of the DC. I have been beating this drum here since 2010, but the legalities have not changed: The Club has no more rights to reserve Use Periods than is allowed in the governing documents for the underlying Use Week (that you or me are subject to).

I still do not see how what we're all debating here is substantially different from what has been happening for years in traditional weeks exchange transactions - when resort companies do bulk banks with II/RCI, they are essentialy taking inventory away from deeded weeks owners - sometimes well in advance of when deeded owners can even reserve a week themselves - based on anticipated booking patterns (my HGVC example above). These are all deeded owners with deeded reservation rights in their season.

While I agree the Trust itself can't actually book weeks it doesn't actually own, the MVCD Exchange Company doesn't seem to be significantly different, as an exchange entity, from II or RCI. So why can't Marriott forecast anticipated deposits into the Exchange company and make the necessary allocation in the same way that deposits are forecasted and allocated/bulk banked into II and RCI all over the timeshare industry? The program documents delegate the role of reservations manager to Marriott for all of the Affiliate Programs (what they call the individual resort owners associations), so why would this projection/demand balancing not be part of those affiliation agreements?

 

[davidvel]

I still do not see how what we're all debating here is substantially different from what has been happening for years in traditional weeks exchange transactions - when resort companies do bulk banks with II/RCI, they are essentialy taking inventory away from deeded weeks owners - sometimes well in advance of when deeded owners can even reserve a week themselves - based on anticipated booking patterns (my HGVC example above). These are all deeded owners with deeded reservation rights in their season.

While I agree the Trust itself can't actually book weeks it doesn't actually own, the MVCD Exchange Company doesn't seem to be significantly different, as an exchange entity, from II or RCI. So why can't Marriott forecast anticipated deposits into the Exchange company and make the necessary allocation in the same way that deposits are forecasted and allocated/bulk banked into II and RCI all over the timeshare industry? The program documents delegate the role of reservations manager to Marriott for all of the Affiliate Programs (what they call the individual resort owners associations), so why would this projection/demand balancing not be part of those affiliation agreements?

I don't have any opinion about any other companies, but this is patently a legal violation. If Marriott is "taking inventory away from deeded weeks owners - sometimes well in advance of when deeded owners can even reserve a week themselves ," I will pay you thousands of dollars to provide me evidence proving this.

 

[JIMinNC]

I don't have any opinion about any other companies, but this is patently a legal violation. If Marriott is "taking inventory away from deeded weeks owners - sometimes well in advance of when deeded owners can even reserve a week themselves ," I will pay you thousands of dollars to provide me evidence proving this.

Has Marriott never bulk banked with II the way HGVC and other systems seem to bulk bank in advance with RCI? I'm new to the Marriott system, so have no experience with that.

But I DO have specific data to support how HGVC and DRI work from RCI.com and my own booking experience. HGVC and DRI weeks owners are all deeded week owners with rights to reserve a week in their season/category 12 months out just like Marriott weeks owners. But HGVC deposits regularly show up in RCI well before weeks owners can reserve their home weeks. If HGVC weeks at sold out resorts are available to reserve months before owners are allowed to do so, there must be a legal way to predesignate inventory for bulk deposit with RCI. Given that, if HGVC can do it with RCI, why couldn't Marriott do it with their own internal Exchange Company?

In the 16 years we have owned one type of timeshare or another, I have always understood bulk banking with RCI/II to be based on anticipated demand, where if for a given week, the program manager's experience was that, as an example, only 20% of the available units would be expected to be reserved by owners, they would designate some portion of the remaining 80% to deposit to an exchange company. They obviously wouldn't cut it so close as to deposit the full 80%, giving them some room for error since the 20% is just a projection. I may be incorrect in my understanding about how those programs functioned, but based on what Susan and others have posted on here, it sounded like the best information we have on how Marriott works today is very similar to that allocation model, just adapted for the DC Points system.

 

[answeeney]

Speaking as someone who likes the DC system and finds it beneficial (so far – but cynical me asks me for how long) I find this thread incredibly interesting – but also quite challenging. What I am getting from it (and I may be getting things completely wrong) is that:

1. An enrolled weeks-owner that exchanges a week for DC points does not load a week into the exchange company but merely gives up to the exchange company their rights to book a week.
2. Any trust inventory also gives the trust company booking rights for those owned weeks (although some trust inventory may be fixed weeks or even whole units) which once booked may be kept in the trust or deposited into the exchange company.
3. Marriott uses those rights to book a number of weeks in anticipation of demand from points-owners.
4. Legally, the trust/exchange company cannot book any weeks on more advantageous terms than other weeks-owners – they are bound by the same rules, such as the 13 and 12 month booking windows.
5. Only after being booked by the trust/exchange company can weeks be made available to points-owners.

Some key questions are:

1. Does Marriott follow these rules to the letter?

We don’t know because the system is opaque.

2. Does Marriott use their ownership muscle i.e. squillions of owned weeks, to book weeks early to the advantage of points owners and disadvantage of weeks owners - at one extreme to, say, book Christmas and new year 2017/18 now by using the 13 month booking window and a long string of consecutive ownership weeks, or at another, to simply be “on the phone” (via a computerised process) on the dot at 9.00 EST when inventory is released?

We suspect not but cannot be sure that there isn’t a little tweak in this direction because the system is opaque.

3. Does Marriott take out an “actuarially fair” proportion of the weeks-pool in advance of the booking windows opening?

Early bulk deposits into II make us a bit suspicious but really we don’t know (they may be wholly unsold units) because the system is opaque but anyway we think that would be illegal.

4. Has Marriott already busted the rules by extending the 13 month booking window beyond the class of owners to whom the rules originally gave it and that extension is now acting to the benefit of points-owners and to the detriment of owners of multiple weeks at a single resort?

We don’t know because the system is opaque.

For what it’s worth, I suspect that Marriott strives for fairness in whatever process they have adopted but my concern now, after reading this thread is whether they are acting legally. Also, although, on balance, I would like the DC system to continue, as the owner of some ineligible resale weeks I want to be sure that I am not going to regret this sentiment at some point in the future.

 

[davidvel]

Speaking as someone who likes the DC system and finds it beneficial (so far – but cynical me asks me for how long) I find this thread incredibly interesting – but also quite challenging. What I am getting from it (and I may be getting things completely wrong) is that:

1. An enrolled weeks-owner that exchanges a week for DC points does not load a week into the exchange company but merely gives up to the exchange company their rights to book a week.
2. Any trust inventory also gives the trust company booking rights for those owned weeks (although some trust inventory may be fixed weeks or even whole units) which once booked may be kept in the trust or deposited into the exchange company.
3. Marriott uses those rights to book a number of weeks in anticipation of demand from points-owners.
4. Legally, the trust/exchange company cannot book any weeks on more advantageous terms than other weeks-owners – they are bound by the same rules, such as the 13 and 12 month booking windows.
5. Only after being booked by the trust/exchange company can weeks be made available to points-owners.

Some key questions are:

1. Does Marriott follow these rules to the letter?

We don’t know because the system is opaque.

2. Does Marriott use their ownership muscle i.e. squillions of owned weeks, to book weeks early to the advantage of points owners and disadvantage of weeks owners - at one extreme to, say, book Christmas and new year 2017/18 now by using the 13 month booking window and a long string of consecutive ownership weeks, or at another, to simply be “on the phone” (via a computerised process) on the dot at 9.00 EST when inventory is released?

We suspect not but cannot be sure that there isn’t a little tweak in this direction because the system is opaque.

3. Does Marriott take out an “actuarially fair” proportion of the weeks-pool in advance of the booking windows opening?

Early bulk deposits into II make us a bit suspicious but really we don’t know (they may be wholly unsold units) because the system is opaque but anyway we think that would be illegal.

4. Has Marriott already busted the rules by extending the 13 month booking window beyond the class of owners to whom the rules originally gave it and that extension is now acting to the benefit of points-owners and to the detriment of owners of multiple weeks at a single resort?

We don’t know because the system is opaque.

For what it’s worth, I suspect that Marriott strives for fairness in whatever process they have adopted but my concern now, after reading this thread is whether they are acting legally. Also, although, on balance, I would like the DC system to continue, as the owner of some ineligible resale weeks I want to be sure that I am not going to regret this sentiment at some point in the future.

In my professional legal opinion, you nailed it. [Not to be construed as legal advice. ]

 

[SueDonJ]

I'm not home but will be taking a look at my Weeks docs when I get there to see what I can find (realizing, of course, that they're different in some ways from the docs for other resorts in Marriott's system.) This thread is as fascinating to me as any other related to the legalities, geeky as that may be.

I understand that Marriott/The Trust/the Trustee/etc can't have the power to usurp every other Weeks Owner's rights; they can't pre-book any intervals prior to when the Reservation Windows open as stipulated in the governing docs. But aren't they on equal footing to the other Weeks Owners for the Weeks that have been conveyed to the Trust? So, they should have access to reserve the floating usage of the conveyed Weeks on the same basis as the other like Weeks Owners?

A question: is a Trustee - in this case The Trustee for the DC Trust - legally allowed to delegate in some way certain rights and privileges to the Members of a Trust? If so, and if the DC Trustee is delegating real-time reservation rights to DC Members, wouldn't it follow that MVW doesn't have to pre-reserve anything prior to the DC Windows opening because a reservation system set up to consider the allocation metrics would in itself prevent both Weeks Owners and Trust Members from accessing in real time a disproportionate amount of inventory?

Am I reading you correctly, David, that when the Reservation Windows open for Weeks MVW is reserving the Trust's allocated inventory based completely on projections, which specific reservations they then make available to DC Members when the DC Reservation Windows open a few days later? I just don't see that extra step being necessary, plus it allows for far more breakage and unused inventory than if DC Members are allowed to book what they want up to the proportionate allocations in real-time. It also creates another "bucket" from which DC Members can pull intervals, one that I think is unnecessary if DC Members are delegated by the Trustee the access to book real-time reservations.

Like Jim I keep going back to when Weeks were the only game in town and there wasn't this pervasive suspicion that MVW was mismanaging inventory, despite them having to pre-designate (for Owners, Marriott Rentals, MRP and II exchanges, etc) Weeks inventory prior to any Reservation Windows opening. It's always been a first-come-first-served system that didn't allow access prior to any Reservation Windows opening and didn't appear to allow over-booking by either MVW or the Owners; why isn't it feasible that DC-related inventory structures are simply more metrics added to the established real-time system?

If MVW's Weeks product were all fixed week/unit intervals then it would be so easy to incorporate DC allocations into the existing real-time system. But consideration has to be given somewhere to the fact that for every Week conveyed to the Trust and for every enrolled Week exchanged by the Owner for DC Points, the usage rights and limitations of those Weeks convey as well. So if MVW is pre-reserving intervals to which they then give DC Members access, it seems to me that the DC Members' rights are being usurped as far as their access to all floating usage rights of the Weeks in their Trust and Exchange Company.

Hmmmmm. Lots to think about.

 

[davidvel]

I'm not home but will be taking a look at my Weeks docs when I get there to see what I can find (realizing, of course, that they're different in some ways from the docs for other resorts in Marriott's system.) This thread is as fascinating to me as any other related to the legalities, geeky as that may be.

I understand that Marriott/The Trust/the Trustee/etc can't have the power to usurp every other Weeks Owner's rights; they can't pre-book any intervals prior to when the Reservation Windows open as stipulated in the governing docs. But aren't they on equal footing to the other Weeks Owners for the Weeks that have been conveyed to the Trust? So, they should have access to reserve the floating usage of the conveyed Weeks on the same basis as the other like Weeks Owners?

Yes, it should be on the same basis (putting aside if they get 13 mo advantage, as this seems to differ in various CC&Rs.) But see below as to how "equal" can be achieved.

A question: is a Trustee - in this case The Trustee for the DC Trust - legally allowed to delegate in some way certain rights and privileges to the Members of a Trust? If so, and if the DC Trustee is delegating real-time reservation rights to DC Members, wouldn't it follow that MVW doesn't have to pre-reserve anything prior to the DC Windows opening because a reservation system set up to consider the allocation metrics would in itself prevent both Weeks Owners and Trust Members from accessing in real time a disproportionate amount of inventory?

A lot of scenarios here. I don't see any particular issue relating to the trustee, and delegation of any rights it has. While it could in theory give a DC member the power to reserve a Use Period for any Timeshare Unit it controls (ie. reserve a full week like you or me), clearly it does not do this; nor could it in a practical sense. Somehow the DC has to reserve weeks, then dole them out (single day, full week, etc) to DC members.

If they didn't pre-reserve, the best weeks would be reserved by weeks owners, and thus unavailable once the DC window opens. It is my opinion that any system/metric/algoritim is inconsistent with the reservation procedures in the governing docs. Clearly it is not "equal footing" as you and I can't use our own system/metric/algorithm to reserve weeks in proportion that we think is "fair."

Fundamentally, the problem I see is that "the old way" was a bunch of individuals calling/logging in trying to get the weeks. Now Marriott gets to change that and impose a "system" to ensure its new "club" (which other weeks owners are prohibited from setting up) gets the weeks it thinks it deserves.

Just because there is no practical way to maintain the status quo (individuals competing equally by calling in) and run their "club" as they hope to, does not allow it to be changed, or make it right.

Am I reading you correctly, David, that when the Reservation Windows open for Weeks MVW is reserving the Trust's allocated inventory based completely on projections, which specific reservations they then make available to DC Members when the DC Reservation Windows open a few days later?

The problem is I, nor anyone else, really knows what they do. What I think they do is use some system/metric/algorithm as this has been relayed from Marriott insiders to many people.

I just don't see that extra step being necessary, plus it allows for far more breakage and unused inventory than if DC Members are allowed to book what they want up to the proportionate allocations in real-time. It also creates another "bucket" from which DC Members can pull intervals, one that I think is unnecessary if DC Members are delegated by the Trustee the access to book real-time reservations.

Like Jim I keep going back to when Weeks were the only game in town and there wasn't this pervasive suspicion that MVW was mismanaging inventory, despite them having to pre-designate (for Owners, Marriott Rentals, MRP and II exchanges, etc) Weeks inventory prior to any Reservation Windows opening. It's always been a first-come-first-served system that didn't allow access prior to any Reservation Windows opening and didn't appear to allow over-booking by either MVW or the Owners; why isn't it feasible that DC-related inventory structures are simply more metrics added to the established real-time system?

If MVW's Weeks product were all fixed week/unit intervals then it would be so easy to incorporate DC allocations into the existing real-time system.

But consideration has to be given somewhere to the fact that for every Week conveyed to the Trust and for every enrolled Week exchanged by the Owner for DC Points, the usage rights and limitations of those Weeks convey as well. So if MVW is pre-reserving intervals to which they then give DC Members access, it seems to me that the DC Members' rights are being usurped as far as their access to all floating usage rights of the Weeks in their Trust and Exchange Company.
Hmmmmm. Lots to think about.

I'm not exactly sure what you mean here about DC members "rights." They only rights they have are what's stipulated in the DC Club docs (assuming those rights exist to convey). They cannot be given more "rights" by the Trust than the Trust has itself. Any any contract between the DC and its members cannot usurp the governing documents.

I have no opinion (nor particularly care) as to what the DC does with the weeks after they properly reserve them on an equal footing with weeks owners in according with the governing docs.

Merely because they may have done it in the past (or others do is) does not factor into my analysis.

 

[Ralph Sir Edward]

Please note - the CC&Rs may not be valid at a particular point in time. If the writer of the CC&Rs places a unilateral right to change the terms and conditions clause, then the written CC&Rs are simple words on a piece of paper, with no legal enforcement capability.

 

[ljmiii]

If they didn't pre-reserve, the best weeks would be reserved by weeks owners, and thus unavailable once the DC window opens...Just because there is no practical way to maintain the status quo (individuals competing equally by calling in) and run their "club" as they hope to, does not allow it to be changed, or make it right.

I've heard this argument for a while now - that Marriott couldn't maintain the old reservation system and still have good weeks available to DC members. But it isn't true.

To begin with there were all the 'slush' weeks that Marriott owned or kept in reserve for II that could/would have been available for DC reservations. But more importantly Marriott could have only accepted actual reserved weeks to be traded for DC points - and then paid/charged a DC value high enough for those weeks for supply to equal demand.

Disney has some of the same issues but at your home resort it isn't any harder to reserve during Christmas week than during low season - because rooms cost about twice as many points. I'm sure that over time Marriott would have to modify the prices of days/seasons/rooms to better match supply with demand - as Disney has done.

But as near as I can tell the only reason it wouldn't work is that Marriott didn't want to pay existing weeks owners the true DP value of those weeks. And perhaps didn't want to 'surprise' potential DP customers with the cost.

 

[JIMinNC]

I’ve done some additional thinking and research on this and think it can be boiled down to two main questions. To illustrate, I’ll use a mythical MVC resort with 100 2BR units (all same view category) and a 10 week-long Platinum season, which results in 1000 bookable Platinum 2BR intervals.

 Let’s assume that 800 of those intervals are owned by weeks owners and 200 are owned by the DC Trust.
 Let’s further assume that 100 of the 800 Weeks owners elect to relinquish their week and convert to DC points, Rewards Points, etc.
 This results in 700 Platinum intervals eligible for booking by the 700 remaining Weeks owners, and 300 intervals eligible for use by the DC Program Members.

Under this simple scenario everyone is whole. The Weeks owners each have the right to one interval on a first-come first-served basis. There will be one for everyone. The DC Points members will have the right to use the other 300 intervals, also on a first-come first-served basis.

It gets more complicated when we drill down below the season level to the individual week. Let’s assume that Week 5 of this mythical Platinum season is a popular holiday week with heavy demand, but only 100 available units/intervals. That brings us to the questions that I think we are debating in this thread:

1. Does Marriott have the legal authority to enforce the same 70%/30% season-wide allocation of inventory down to the individual week level in the interest of fair allocation of high demand weeks?
2. Does Marriott have the legal authority to forecast anticipated week conversions to Points, etc. and allocate inventory on the basis of those forecasts rather than actual points conversions?

I looked in the Public Offering Statement for Barony Beach Club dated June 2014 and found the following language in Exhibit G to the Master Deed:

(d) In the event either the Agent or the Association determines that the current reservation system in unmanageable or is, for any reason, unfair to some or all of the Owners, the Agent or the Association may, without the consent of the owners and in its reasonable business judgment, revise the reservation system from time to time and cause the system to contain one or more of the following features:

(i) A system which assures that each Owner will have an equal opportunity to make a reservation for the more popular holiday periods,
…
(iv) Such other conditions restrictions and limitations as the Agent or the Association shall deem necessary under the circumstances to assure a manageable and fair system.

So, it seems to me that this language in the Master Deed would give Marriott the right to allocate available intervals to be fair to both Weeks Owners and DC Points Members. I can think of two ways they could do this (again using the example above):

Option 1: Simply set a parameter in the system that prevents Weeks owners from reserving more than 70% of the intervals or DC Points Members from reserving more than their 30% share. I think this was what Sue suggested is happening in several of her posts above.

Option 2: Since Weeks reservations windows open on Wednesday and Points windows open the following Friday (I’m just focusing on the 12 month window here for simplicity), I guess Marriott could program the system to, at exactly 9:00:00 on Wednesday, actually reserve the 30% share for Points Members. That inventory then becomes available for Points members to book on Friday.

As far as the second question on forecasting, that seems to be answered in the “Barony Beach Club Amended and Restated Procedures for Reserving Usage” dated June 1, 2010 and which is part of Exhibit G to the Master Deed. I assume a similar amendment was filed for all other MVC resorts at the inception of the Destination Club.

(h) The Management Company may forecast anticipated reservation and use of Units and is authorized to reasonably reserve, deposit, or rent the Units for the purpose of facilitating the use or future use of the Units or other benefits made available through the Time Sharing Plan.

That language was added to the June 2010 version of the Reservation Procedures and was not included in the original version dated March 8, 1999, so it seems to have been added to accommodate the needs of the Destination Club and is consistent with the language in the Trust and DC Exchange Company procedures I quoted above in post #101.

I would assume those are at least some of the provisions that Marriott is relying on for the legal authority to do whatever they do, but - as answeeney noted above - the fact that their processes are so opaque only heightens the thoughts and suspicions of some people that they are playing loose with their allocations.

I guess lawyers could argue that these provisions of the Marriott deeds and agreements somehow violate some state or federal law and therefore harm the interests of Weeks owners - and that may be what davidvel is trying to say in his posts. I don't know. I guess that's why we have so many lawyers in the US - were it not for the ambiguities in contracts, agreements, and laws, we wouldn't need nearly as many people in that profession.

 

[WFP]

I really like this thread as I am only a novice at this game, and it is a game in many ways as we compete for available inventory. JIMinNC that is a very good post above. Regarding the Opaqueness, It would be interesting to see a real-time inventory as some websites provide. That would at least provide an idea of how much is currently in each bucket...they could even go further and provide how many of those have been consumed. But the further you go down this rabbit hole the harder it gets because you would have to do it on a day by day basis.

/WFP

 

[ljmiii]

I guess lawyers could argue that these provisions of the Marriott deeds and agreements somehow violate some state or federal law and therefore harm the interests of Weeks owners - and that may be what davidvel is trying to say in his posts. I don't know. I guess that's why we have so many lawyers in the US - were it not for the ambiguities in contracts, agreements, and laws, we wouldn't need nearly as many people in that profession.

Indeed. Marriott is relying on the enforceability of the clauses it put in the contracts that state (basically) "notwithstanding any of the language above, we have the right to amend this agreement so that we can do whatever we want." I know similar clauses do fail in employment law, I have no idea what would happen on this border between commercial and real estate law. But I AM sure it would vary state by state.

Similarly, on the TUG boards I have read that Marriott has language dealing with uncooperative HOAs (though I have not read it myself). But I don't know if that language would matter if a majority of the ownership of a resort decided to remove Marriott as property manager. Such a dispute sits on a more basic layer of property rights - and again I AM sure that varies wildly state by state.

 

[windje2000]

I’ve done some additional thinking and research on this and think it can be boiled down to two main questions. To illustrate, I’ll use a mythical MVC resort with 100 2BR units (all same view category) and a 10 week-long Platinum season, which results in 1000 bookable Platinum 2BR intervals.

 Let’s assume that 800 of those intervals are owned by weeks owners and 200 are owned by the DC Trust.
 Let’s further assume that 100 of the 800 Weeks owners elect to relinquish their week and convert to DC points, Rewards Points, etc.
 This results in 700 Platinum intervals eligible for booking by the 700 remaining Weeks owners, and 300 intervals eligible for use by the DC Program Members.

Under this simple scenario everyone is whole. The Weeks owners each have the right to one interval on a first-come first-served basis. There will be one for everyone. The DC Points members will have the right to use the other 300 intervals, also on a first-come first-served basis.

It gets more complicated when we drill down below the season level to the individual week. Let’s assume that Week 5 of this mythical Platinum season is a popular holiday week with heavy demand, but only 100 available units/intervals. That brings us to the questions that I think we are debating in this thread:

1. Does Marriott have the legal authority to enforce the same 70%/30% season-wide allocation of inventory down to the individual week level in the interest of fair allocation of high demand weeks?
2. Does Marriott have the legal authority to forecast anticipated week conversions to Points, etc. and allocate inventory on the basis of those forecasts rather than actual points conversions?

I looked in the Public Offering Statement for Barony Beach Club dated June 2014 and found the following language in Exhibit G to the Master Deed:



So, it seems to me that this language in the Master Deed would give Marriott the right to allocate available intervals to be fair to both Weeks Owners and DC Points Members. I can think of two ways they could do this (again using the example above):

Option 1: Simply set a parameter in the system that prevents Weeks owners from reserving more than 70% of the intervals or DC Points Members from reserving more than their 30% share. I think this was what Sue suggested is happening in several of her posts above.

Option 2: Since Weeks reservations windows open on Wednesday and Points windows open the following Friday (I’m just focusing on the 12 month window here for simplicity), I guess Marriott could program the system to, at exactly 9:00:00 on Wednesday, actually reserve the 30% share for Points Members. That inventory then becomes available for Points members to book on Friday.

As far as the second question on forecasting, that seems to be answered in the “Barony Beach Club Amended and Restated Procedures for Reserving Usage” dated June 1, 2010 and which is part of Exhibit G to the Master Deed. I assume a similar amendment was filed for all other MVC resorts at the inception of the Destination Club.



That language was added to the June 2010 version of the Reservation Procedures and was not included in the original version dated March 8, 1999, so it seems to have been added to accommodate the needs of the Destination Club and is consistent with the language in the Trust and DC Exchange Company procedures I quoted above in post #101.

I would assume those are at least some of the provisions that Marriott is relying on for the legal authority to do whatever they do, but - as answeeney noted above - the fact that their processes are so opaque only heightens the thoughts and suspicions that they are playing loose with their allocations.

I guess lawyers could argue that these provisions of the Marriott deeds and agreements somehow violate some state or federal law and therefore harm the interests of Weeks owners - and that may be what davidvel is trying to say in his posts. I don't know. I guess that's why we have so many lawyers in the US - were it not for the ambiguities in contracts, agreements, and laws, we wouldn't need nearly as many people in that profession.

That analysis lays out this issue with the best clarity yet. Exactly what are they doing? They won't say and that is the real issue.

Absent some transparency by MVC, someone (who believes their property rights were affected by the reservation policy) will assume the worst. That is the inevitable consequence when MVC wears multiple hats and assumes multiple roles with the potential for conflicts of its interests with those of legacy weeks owners, and is exactly the kind of situation requiring transparency.

Whether or not that worst case assumption is justified remains to be seen. Where there is smoke there is usually fire.

 

[JIMinNC]

That analysis lays out this issue with the best clarity yet. Exactly what are they doing? They won't say and that is the real issue.

Absent some transparency by MVC, someone (who believes their property rights were affected by the reservation policy) will assume the worst. That is the inevitable consequence when MVC wears multiple hats and assumes multiple roles with the potential for conflicts of its interests with those of legacy weeks owners, and is exactly the kind of situation requiring transparency.

Whether or not that worst case assumption is justified remains to be seen. Where there is smoke there is usually fire.

I agree that lack of transparency can cause people to assume the worst, and I also agree that where there are potential conflicts of interest transparency becomes even more important.

But I do not agree with the implication of the last sentence - "Where there is smoke there is usually fire." Just because a person or company has the opportunity to do something sneaky, doesn't mean they are actually doing it. Sometimes companies feel secrecy is needed to protect certain intellectual property or business strategies from competitors. It doesn't mean they are engaged in any shenanigans. It's sort of like the suspicious husband or wife who is convinced his or her spouse is having an affair just because they had the opportunity to have one.

Maybe these lawsuits can force more transparency from Marriott. That is what happened with the class action lawsuit against RCI a few years ago over their "trading power" algorithms that led to the creation of the more transparent TPU system for RCI Weeks.

 

[answeeney]

I’ve done some additional thinking and research on this and think it can be boiled down to two main questions. To illustrate, I’ll use a mythical MVC resort with 100 2BR units (all same view category) and a 10 week-long Platinum season, which results in 1000 bookable Platinum 2BR intervals.

 Let’s assume that 800 of those intervals are owned by weeks owners and 200 are owned by the DC Trust.
 Let’s further assume that 100 of the 800 Weeks owners elect to relinquish their week and convert to DC points, Rewards Points, etc.
 This results in 700 Platinum intervals eligible for booking by the 700 remaining Weeks owners, and 300 intervals eligible for use by the DC Program Members.

Under this simple scenario everyone is whole. The Weeks owners each have the right to one interval on a first-come first-served basis. There will be one for everyone. The DC Points members will have the right to use the other 300 intervals, also on a first-come first-served basis.

It gets more complicated when we drill down below the season level to the individual week. Let’s assume that Week 5 of this mythical Platinum season is a popular holiday week with heavy demand, but only 100 available units/intervals. That brings us to the questions that I think we are debating in this thread:

1. Does Marriott have the legal authority to enforce the same 70%/30% season-wide allocation of inventory down to the individual week level in the interest of fair allocation of high demand weeks?
2. Does Marriott have the legal authority to forecast anticipated week conversions to Points, etc. and allocate inventory on the basis of those forecasts rather than actual points conversions?

I looked in the Public Offering Statement for Barony Beach Club dated June 2014 and found the following language in Exhibit G to the Master Deed:



So, it seems to me that this language in the Master Deed would give Marriott the right to allocate available intervals to be fair to both Weeks Owners and DC Points Members. I can think of two ways they could do this (again using the example above):

Option 1: Simply set a parameter in the system that prevents Weeks owners from reserving more than 70% of the intervals or DC Points Members from reserving more than their 30% share. I think this was what Sue suggested is happening in several of her posts above.

Option 2: Since Weeks reservations windows open on Wednesday and Points windows open the following Friday (I’m just focusing on the 12 month window here for simplicity), I guess Marriott could program the system to, at exactly 9:00:00 on Wednesday, actually reserve the 30% share for Points Members. That inventory then becomes available for Points members to book on Friday.

As far as the second question on forecasting, that seems to be answered in the “Barony Beach Club Amended and Restated Procedures for Reserving Usage” dated June 1, 2010 and which is part of Exhibit G to the Master Deed. I assume a similar amendment was filed for all other MVC resorts at the inception of the Destination Club.



That language was added to the June 2010 version of the Reservation Procedures and was not included in the original version dated March 8, 1999, so it seems to have been added to accommodate the needs of the Destination Club and is consistent with the language in the Trust and DC Exchange Company procedures I quoted above in post #101.

I would assume those are at least some of the provisions that Marriott is relying on for the legal authority to do whatever they do, but - as answeeney noted above - the fact that their processes are so opaque only heightens the thoughts and suspicions of some people that they are playing loose with their allocations.

I guess lawyers could argue that these provisions of the Marriott deeds and agreements somehow violate some state or federal law and therefore harm the interests of Weeks owners - and that may be what davidvel is trying to say in his posts. I don't know. I guess that's why we have so many lawyers in the US - were it not for the ambiguities in contracts, agreements, and laws, we wouldn't need nearly as many people in that profession.

As others have said this is an excellent analysis. A further thought, extrapolating on your example, is - what if there is a sub-set of especially motivated weeks-owners who target that week 5? They like it so much that they have bought a second week at the property and get on the phone at 9am each year in order to maximize their chances of securing that coveted week. It would be reasonable to assume that this group is less likely to exchange their weeks for DC points compared with the other weeks-owners who value greater flexibility in their plans. Prior to DC all 100 weeks were presumably up for grabs. Now apparently that might only be 70. As DC develops that 70 might get a lot lower. Do these owners have any cause to grumble?

 

[JIMinNC]

As others have said this is an excellent analysis. A further thought, extrapolating on your example, is - what if there is a sub-set of especially motivated weeks-owners who target that week 5? They like it so much that they have bought a second week at the property and get on the phone at 9am each year in order to maximize their chances of securing that coveted week. It would be reasonable to assume that this group is less likely to exchange their weeks for DC points compared with the other weeks-owners who value greater flexibility in their plans. Prior to DC all 100 weeks were presumably up for grabs. Now apparently that might only be 70. As DC develops that 70 might get a lot lower. Do these owners have any cause to grumble?

Since as you suggest, multi-week owners may have less incentive to convert to DC points, in the situation you describe, that would seem to me to have the potential to actually increase the total number of weeks available to weeks owners and reduce availability for DC members. If lots of people buy second weeks to take advantage of 13 month booking, that would have the potential to reduce availability for single week owners at 12 months and reduce the number of weeks converted to points, making DC reservations harder to come by as well.

To some degree the situation you propose seems to already exist in some high demand resorts during peak weeks - not because of the DC - but because of overly long Platinum seasons. In those cases you have many more owners from a long Platinum season chasing the few highest demand weeks within that season and the further impact of multi-week owners booking at 13 months. I've read frequent complaints on TUG from weeks owners at Newport Coast complaining about that resort's long Platinum season and I've also read about Maui Ocean Club where many multi week owners string together weeks making certain February reservations very difficult to get.

 

[answeeney]

Since as you suggest, multi-week owners may have less incentive to convert to DC points, in the situation you describe, that would seem to me to have the potential to actually increase the total number of weeks available to weeks owners and reduce availability for DC members. If lots of people buy second weeks to take advantage of 13 month booking, that would have the potential to reduce availability for single week owners at 12 months and reduce the number of weeks converted to points, making DC reservations harder to come by as well.

To some degree the situation you propose seems to already exist in some high demand resorts during peak weeks - not because of the DC - but because of overly long Platinum seasons. In those cases you have many more owners from a long Platinum season chasing the few highest demand weeks within that season and the further impact of multi-week owners booking at 13 months. I've read frequent complaints on TUG from weeks owners at Newport Coast complaining about that resort's long Platinum season and I've also read about Maui Ocean Club where many multi week owners string together weeks making certain February reservations very difficult to get.

Multiple weeks ownership isn’t really central to what I was trying to get at.

To try and bring my point out let me use a simplified version of your example – one where all 1000 units are owned by individuals i.e. no trust inventory.
There are 1000 units, 10 weeks in the season, 100 units each week. Week 5 is the prime week. In the pre DC world let’s say owners of 200 of the units target that week as a first choice. Owners of a further 600 units target various other weeks and the remaining 200 owners would settle for any week because they are flexible or they plan to deposit in II. Those targeting week 5 would therefore have at worst a 50/50 chance of getting it and they can improve the odds by owning two or more weeks or getting on the phone quickly.

Move on now to the post DC world. Say 200 owners convert to DC points. Which of the owners are more likely to convert? Those targeting week 5 or those owners who don’t really mind what they get? I would suggest it would be heavily weighted towards the latter. If Marriott uses a straightforward proportionate approach to unit allocation between weeks and points the ‘don’t cares’ walk away with 20% of week 5 inventory where before they would have got none. Those buying into that resort and season specifically to target week 5 might feel they have had their ability to book their desired week compromised.

 

[JIMinNC]

Multiple weeks ownership isn’t really central to what I was trying to get at.

To try and bring my point out let me use a simplified version of your example – one where all 1000 units are owned by individuals i.e. no trust inventory.
There are 1000 units, 10 weeks in the season, 100 units each week. Week 5 is the prime week. In the pre DC world let’s say owners of 200 of the units target that week as a first choice. Owners of a further 600 units target various other weeks and the remaining 200 owners would settle for any week because they are flexible or they plan to deposit in II. Those targeting week 5 would therefore have at worst a 50/50 chance of getting it and they can improve the odds by owning two or more weeks or getting on the phone quickly.

Move on now to the post DC world. Say 200 owners convert to DC points. Which of the owners are more likely to convert? Those targeting week 5 or those owners who don’t really mind what they get? I would suggest it would be heavily weighted towards the latter. If Marriott uses a straightforward proportionate approach to unit allocation between weeks and points the ‘don’t cares’ walk away with 20% of week 5 inventory where before they would have got none. Those buying into that resort and season specifically to target week 5 might feel they have had their ability to book their desired week compromised.

I understand what you mean now. Thanks.

Gotta think about that some because at first blush, it seems to me that those 200 "don't care" owners who convert to points would most likely no longer be competing for bookings at the home resort at all. I would think if an enrolled owner converts to points, its because they want to go somewhere else or in a different season, etc. So instead of characterizing those 200 owners as "Don't cares", wouldn't it be more accurate to call them "Don't want to go at alls?" So they go somewhere else in the MVC network, opening up DC point reservations for other Points members, and some of those folks, in fact, may have week 5 as a priority. I think you are correct that the week 5 inventory is still reduced for those 200 "week 5 first choice" owners, but its not like the "don't care" folks are being forced to book the high demand week. Other DC Members are coming in from outside to capture those weeks, but the impact of that may not be much different than if some of the "week 5 first choice" owners book the week and then give the week to II or rent it. I recall similar debates on TUG where weeks owners have complained about inventory being reduced because other weeks owners reserve holiday weeks just to trade or rent.

It all gets really complicated to think about and I suspect whatever allocation/algorithm Marriott uses could actually be more complex and or multi-variable based than just a simple 70/30 split like our simplistic examples.

 

[kds4]

I agree that lack of transparency can cause people to assume the worst, and I also agree that where there are potential conflicts of interest transparency becomes even more important.

But I do not agree with the implication of the last sentence - "Where there is smoke there is usually fire." Just because a person or company has the opportunity to do something sneaky, doesn't mean they are actually doing it. Sometimes companies feel secrecy is needed to protect certain intellectual property or business strategies from competitors. It doesn't mean they are engaged in any shenanigans. It's sort of like the suspicious husband or wife who is convinced his or her spouse is having an affair just because they had the opportunity to have one.

Maybe these lawsuits can force more transparency from Marriott. That is what happened with the class action lawsuit against RCI a few years ago over their "trading power" algorithms that led to the creation of the more transparent TPU system for RCI Weeks.

"And what are you wearing, Jake ... from State Farm ...?" :rofl:

 

[windje2000]

snip

But I do not agree with the implication of the last sentence - "Where there is smoke there is usually fire." Just because a person or company has the opportunity to do something sneaky, doesn't mean they are actually doing it. Sometimes companies feel secrecy is needed to protect certain intellectual property or business strategies from competitors. It doesn't mean they are engaged in any shenanigans. It's sort of like the suspicious husband or wife who is convinced his or her spouse is having an affair just because they had the opportunity to have one.

snip

I can think of no good reason to keep the reservation policy secret from the owners.

They're OUR resorts - we (collectively the legacy AND points owners) own them.

 

[KauaiMark]

Pesonal DC usage experience of a legacy owner...

We are a weeks (one week to be exact) owner at Marriott's Kaua'i Beach Club (KBC) since 1996.

Like everyone else I was leery about how the DC points system would impact our usage. We did elect to enroll our week and I have to say it's been a plus for us so far.

We've exchanged used our legacy points for a week at Newport Coast,CA as test run and the deal went smoothly 1-for-1 with a few points left over.

One of my wife's "bucket list" trips was to bring the family (kids & grand-kids) to Kaua'i for vacation. Something not easily accomplished with a single 1br/2ba week at KBC.

One of the selling points, for us with DC points is the ability to bank a week and/or borrow a week for longer stays or, in our case, use three accommodations for the same week.

We just completed Claudette's bucket list trip last week by banking our 2014 week, using our legacy 2015 week and released our 2016 week for points for three separate 1ba/2ba units at KBC for all 6 of us adults and 4 grandkids (who really get a kick out of using the "hidden bed" in the wall).

...Mark

 

[SueDonJ]

Back to the lawsuit ...

law360.com: 5/11/15 - Marriott Tells 11th Circ. No Arbitration In Timeshare Row

Any of you lawyers want to tell the rest of us what's happening with this, and anything else you can find? Thanks!