Starwood Spinning off Timeshare Division - Vistana Signature Experiences

[ocdb8r]

I know there have been some other threads on this, so mods, feel free to merge if you think best. I thought it worthy of it's own new thread...

It looks like Starwood has begun filing the required paperwork to spin off the timeshare business. As part of this process they've filed a Form 10 with the SEC (available here) and announced the name of the new timeshare business will be "Vistana Signature Experiences." Lots of interesting things to me with this name. A return to the Vistana brand and no mention of vacation ownership or timeshare but rather just "experiences." Curious if that means anything for the future...

I'll look at the Form 10 and post anything else interesting I see.

Edited to add...

The Form 10 is a good read for anyone interested in what's going on with the timeshare side of the business and where they see it going in the immediate future. Lots of details we've not had access to before. A few interesting things I noted:

Sales on the timeshare side have been relatively flat/stable over the past few years. There's a significant decrease in overall revenue reported but that is largely the result of the inclusion of the fractional/residential resorts in the group. Primarily the sales/sellout of the St. Regis Bal Harbor residential units which mostly occurred in 2012/13 and thus show a declining trend in overall revenue. It seems like they've just dumped these three properties into Vistana Signature Experiences to get them off Startwood's books. I don't see how they'll have much true relation to the timeshare group (other than presumably management fees) moving forward. I also find it odd Starwood is retaining rights to sales of the remaining inventory of these fractional/residential properties.

The currently non-timeshare properties they are transferring to the new company (and have indicated they plan to convert partially or wholly to timeshare units) includes : The Sheraton Kauai Resort, Sheraton Steamboat Resort, The Westin Resort & Spa, Los Cabos, The Westin Resort & Spa, Cancun and The Westin Resort & Spa, Puerto Vallarta. Sooo...basically we can look forward to more Mexico and Hawaii inventory.

They expect to achieve revenue growth from increases in the number of VOIs under management, the addition of new services for our owners and the addition of new members. Bolding added by me...I wonder what they have in store for us...

I'm sure others will pull out interesting tidbits they see...let the roller coaster begin.

 

[Weimaraner]

Sounds like they are taking a page from the Marriott playbook with the spinoff. It turned out ok so I'm good with it. What's funny is I've been so frustrated with the Sheraton Vistana name lately because I was trying to figure out which resort had the pirate pool (I believe it's Villages). Between the Resort, the Villages, the Fountains in RCI and Interval...it just seemed so confusing. I even saw online reviews with mixed up names /photos and people saying they booked the wrong resort so I don't think I'm alone. I guess I'll have to live with the Vistana name

 

[MommaBear]

I also think visually that the logo is very weak and bland. I also think that Vistana as a name reflects Starwood in its early days. I hope that is not indicative of where we are headed with Starwood!

I am looking forward to really finding out what this all means and what the impact will be on our vacation experience.

 

[tomandrobin]

Interesting read....

I am not a fan of the new name.

Vistana Signature Experiences (VSE) does not roll-off the tongue or gives me that warm fuzzy.

What was old is new again......Not.

 

[Transit]

I guess the Mods are going to have to change the title of this forum section from Starwood Vacation Ownership to Vistana Signature Experiences and possibly a ton of updating in the near future.

 

[TUGBrian]

here is a link with a larger story in it

http://www.businesswire.com/news/home/20150616005902/en/#.VYBHCkbMiMI

 

[lizap]

I think losing the Starwood name is not a good sign.. One huge thing that concerns me is another company, such as Wyndham, stepping in to purchase Vistana, which has a lower value.

 

[Ken555]

There must be a reason they didn't keep the Starwood name, though I've seen other spin offs do so. Unfortunate, unexpected, and at first glance a bad choice IMO.

And with more resorts in same or similar locations as current inventory, the only reason I would consider an additional SVN (err...VSE) timeshare would be to get to Maui. It's quite likely my next purchase will be in a different network.


Sent from my iPad

 

[lizap]

I think they didn't keep the Starwood name because they plan to sell the timeshare division/unit.

There must be a reason they didn't keep the Starwood name, though I've seen other spin offs do so. Unfortunate, unexpected, and at first glance a bad choice IMO.

And with more resorts in same or similar locations as current inventory, the only reason I would consider an additional SVN (err...VSE) timeshare would be to get to Maui. It's quite likely my next purchase will be in a different network.


Sent from my iPad

 

[GregT]

I was definitely surprised by the new name. Starwood is a brand that has value. Vistana Signature Experience doesn't have any name recognition to anyone but a timeshare owner, and Wall Street is a different population. Very odd choice and I can only think there was a reason they couldn't keep the Starwood name.

Will be interesting to see how VSE does.

Best,

Greg

 

[Ken555]

I think they didn't keep the Starwood name because they plan to sell the timeshare division/unit.

Yes. But, others have kept it in similar situations. In fact, I believe there are other companies with the Starwood name that are only peripherally related (if at all) to the hotel management company.

Still, anything with Vistana in the name makes me think of humidity.


Sent from my iPad

 

[tomandrobin]

There are a number of risks associated with the spin-off and ownership of Vistana common stock. We discuss these risks under “Risk Factors” beginning on page 22


Oh Joy!

 

[lizap]

Wonder how many of us would have purchased a Vistana, or would it have influenced our decision? I see very little impact to owners in the short-run, but the odds favor a less than favorable impact over the intermediate to long-term..

 

[suzannesimon]

I think it is a mistake to lose the Starwood name and this must have been a decision of Starwood's to not want to allow the brand. I can't believe the timeshare entity would have made that decision. Marriott allowed the Marriott name for their spin-off. I agree that it isn't a good sign. Are the individual resorts going to keep the Westin/Sheridan names?

 

[lizap]

Another argument to buy where you want to vacation..

 

[okwiater]

I wonder what a Signature Experience is...

On the positive side, the marketing video (https://www.starwoodvacationnetwork.com/news/?IM=OWNCOM_SPIN_SVO_201506_SVN_NEWS) is quite relaxing and almost makes you forget that the name is pretty lame.

 

[DeniseM]

Doesn't Starwood already have a product that they call "signature" something or other. It's like special events or packaged travel deals.

Another dumb move by Starwood….

 

[LisaRex]

Yuck, yuck, yuck.

If I dumped in a bunch of dough to attain 5* with the intent of getting Platinum for Life benefits with Starwood hotels, I'd be really nervous.

 

[rickandcindy23]

I dislike the name. Vistana units/ weeks have very little value. I think of old Vistana immediately with this name, and it was not originally Starwood's product at all, was it?

I went on a presentation many years ago, around 1998, and the product was standalone, as far as I knew then.

Stupid name.

 

[GregT]

Marriott allowed the Marriott name for their spin-off.

There is a significant franchise fee associated with it -- I think it was $50M for the first year and then 2% of gross revenues in subsequent years -- so Marriott International is still making money off of Marriott Vacation Club.

Maybe SVO couldn't make the same payment and the compromise was to go with Vistana Signature Experiences. Marriott Vacation Club was helped that the spin-out came with >$1 billion in inventory. With a B.

Best,

Greg

 

[DeniseM]

I wonder if they can still use "Westin" and "Sheraton."

 

[LisaRex]

What's in a name?

Interesting.

From Page 20:

A: We will enter into the License Agreement with Starwood which will, among other things, provide us with the exclusive right to use the Westin and Sheraton brands, in the vacation ownership business for the term of the agreement, and the right to use the St. Regis and The Luxury Collection brands in connection with the existing St. Regis and The Luxury Collection fractional residence properties for the term of the agreement. The License
Agreement also will provide that we must comply with certain physical and operating standards and policies. We will agree to pay royalties to Starwood under the License Agreement, including a fixed annual fee of $30 million and certain variable fees to Starwood. The License Agreement will also require us to obtain Starwood’s consent to use the Westin and Sheraton brands in connection with resorts or other programs that we acquire or develop after the distribution date. We may also propose new vacation ownership projects to Starwood, including fractional projects, under one of Starwood’s brands other than Westin and Sheraton, subject to Starwood’s review and approval, in its sole discretion, and agreement on economics and other terms of a separate license agreement for any such project. Additionally, prior to conversion we will have the right to continue to operate the Transferred Properties as hotels under the Westin and Sheraton brands. After conversion, we expect the Transferred Properties to operate as vacation ownership resorts under the Westin and Sheraton brands pursuant to the License Agreement. For more information, see “Certain Relationships and Related Party Transactions—Agreements between Starwood and Vistana Relating to the Separation.”

So, let me get this straight. In 2015, SVO made a net income of $25 million (page 15), and in 2016, they will pay Starwood $30million PER YEAR for the right to call our timeshares Westins and Sheratons.

Wow.

 

[rickandcindy23]

How much is that going to cost all of the "lucky" owners of the weeks?

 

[okwiater]

We will agree to pay royalties to Starwood under the License Agreement, including a fixed annual fee of $30 million and certain variable fees to Starwood.

That does seem excessive. Does anyone know how many units there are across the 22 properties that will become a part of VSE? My SWAG is that this will cost approximately $150 per 1/52 ownership. But would it be better not to have the Starwood/Westin/SPG affiliation in place and save the $150? Probably not...

 

[suzannesimon]

So all 3 brands that I own have been spun off - Hyatt to Interval, Marriott and now Starwood. This is the only one that didn't keep the brand. Unless they do a lot of marketing, Vistana will be a no-name brand, but Westin and Sheraton will be around for the time being. It remains to be seen how badly this will impact sales and rentals. Since I own Harborside, I never had the brand name, so it may not won't impact too much there. I hope the folks at "Vistana" know what they are doing and can maintain the reputation.