Marriott Vacations Worldwide to Acquire ILG to Create a Leading Global Provider of Premier Vacation

[VacationForever]

I still believe that Marriott will seek to maximize sales and profits by keeping the 3 systems separate, but make each system more integrated within it. The conduit to book into the other systems will be based on whether the owners have converted their timeshare into each point system through developer purchase or requalification or maybe what some of you have indicated - some sort of expensive enrollment.

 

[Helios]

Can I second the motion?

I think there should be a point premium for the pool villa -- guessing at 500 points? They may call it a Deluxe unit to differentiate it from others and give it the extra points -- they did this at Lakeshore Reserve and Shadow Ridge Enclaves.

Best,

Greg

Sorry Greg, but for the process to be legit we’ll need a third to second the motion before we can get vote. I am assuming we have quorum...

 

[GregT]

I respectfully disagree. They need us as much as we need them.

I definitely agree that this is about sales - and selling the dream to their owners (and prospective owners).

I mentioned in the Marriott thread that Marriott sales offices will now prominently feature St John, Cancun and Cabo. Starwood sales offices will show Aruba, Big Island and Newport Coast. This will be a great selling point and it is about sales.

Time will tell how Marriott rolls this out. I understand your comment about poor cousins, but at the time of the original roll-out, I overestimated how much value Marriott placed on its partners (us, the rightful owners of the inventory that they’d just rolled out a point system to reserve at).

It was brilliant - they started selling points to make reservations at properties where they had no inventory. And they enticed the existing owners to enroll their weeks to provide that critical inventory (at skimmed values) and to buy more points.

All of my comments are based upon that experience, and the 8 years since studying these guys and how they pulled it off. My comments about them doing the ownership a favor by allowing enrollment is not original with me, I’ve heard that exact view from Marriott Customer Advocacy. Letting us enroll was the easiest way to get access to that inventory, and there were serious debates at Marriott about not allowing it, and what alternatives they had to fill reservations.

So now a similar situation occurs at Starwood. We have a good point system already and a weaker II trading system. I believe Marriott will keep both intact and tell us (correctly) that we need do nothing - and they’ve taken nothing away.

Then they will entice the owners of the Starwood inventory that they really want through the point allocations that Dioxide and I are talking about.

We will see.

Best,

Greg

 

[DannyTS]

I still believe that Marriott will seek to maximize sales and profits by keeping the 3 systems separate, but make each system more integrated within it. The conduit to book into the other systems will be based on whether the owners have converted their timeshare into each point system through developer purchase or requalification or maybe what some of you have indicated - some sort of expensive enrollment.

This is certainly the most likely outcome and the route with the lowest number of legal and PR issues.

 

[sail27bill]

FWIW, I am an owner of 2 developer weeks that I never trade through Vistana. Instead I have enjoyed great uptrades as I see them through Interval. I have been to the following Marriotts: Aruba, Hilton Head, Oceanwatch, Ocean Point etc all during platinum season using SVV. My Harborside I don’t trade (except for one time). I would totally enroll my weeks in the DC if offered the opportunity. Waiting for a trade to come through is sometimes lengthy, so if given the opportunity, and a fair allotment of points I would totally enroll and cut out the middleman. I am guessing so would others. I have been hoping that this deal would happen, so I for one am greatly excited.

 

[Helios]

I am very excited as well. Thinking about all new places I could have access. So, in a sense, I see it as a favor to the Vistana users.

Vistana is pretty limited on locations. I highly welcome the possibility of some many more locations.

 

[DannyTS]

I am very excited as well. Thinking about all new places I could have access. So, in a sense, I see it as a favor to the Vistana users.

Vistana is pretty limited on locations. I highly welcome the possibility of some many more locations.

Right now I am curious and excited but i will treat it as a favor when i see the details if that will be the case. Corporations do not generally do favors but i cherish the optimism of the group (I am optimistic in general too)

 

[CalGalTraveler]

Are the DC and Weeks inventories separate? If not, how does Marriott preserve weeks inventory at 12 months for owners at their home resort when there are also DC users vying for reservations at the same time?

To compare, the Hilton (HGVC) and the Starwood systems provides 12 - 9 (or 8 for Starwood) month preference to home (weeks) owners to reserve their week. At 9 months they open up what's left to points users (Club or SOs). This structure ensures that owners get first crack at the inventory they own.

If Marriott provides a DC overlay with a combined inventory, how do they ensure Vistana owners have first crack at the weeks they own? Wouldn't this also devalue SOs because SO users have to wait until 8 months to reserve when DC (and owners) can reserve all or most of the inventory at 12, leaving SO users with the crumbs if Marriott and HRC are also vying for the inventory.

P.S. I am intrigued by the idea of a points exchange and renting or selling points. Cannot do this with HGVC and SOs

 

[controller1]

Are the DC and Weeks inventories separate? If not, how does Marriott preserve weeks inventory at 12 months for owners at their home resort when there are also DC users vying for reservations at the same time?

. . .

If Marriott provides a DC overlay with a combined inventory, how do they ensure Vistana owners have first crack at the weeks they own?

. . .

P.S. I am intrigued by the idea of a points exchange and renting or selling points. Cannot do this with HGVC and SOs

I'm also very interested in this!

 

[GregT]

Marriott has a Trust that includes deeds for all properties, with varied coverage for the different properties. This is one bucket of inventory available to cover point reservations. The weeks inventory is a separate bucket of inventory, some of which will be made available for point reservations.

Marriott will estimate/forecast/project the number of weeks that will be:

1) Redeemed for Marriott Reward Points
2) Redeemed for Vacation Club Points (called Elected Points)

They will “hold back” these projected weeks from what is available to deeded week owners.

50% of these net available weeks are released 13 months out for owners to make a week reservation.

The other 50% is released 12 months out, again for a week reservation.

Therefore what is available for Points reservations is the combination of #2 above (the projected number of weeks that will be redeemed) plus whatever inventory is in the Trust. Dioxide and I monitored the Trust filings carefully for a number of years and I believe the Trust holds (as of a few years ago) about 20% of all Maui Ocean Club OF weeks so there is a reasonable/consistent source of weeks for that important property.

With respect to Starwood, I would think Marriott would do the same process - estimating how many weeks would be redeemed for Marriott DC points, and hold those back from release in the same manner.

I would suspect Starwood is doing somewhere similar now, and that the 8 month mark represents the difference between expected owner reservations and actual reservations. Is that correct? That would still be the same under the new system (this is hypothetical) except that there would be the new impact from forecasted point elections. This is my theory of course.

Best,

Greg

 

[DeniseM]

I would suspect Starwood is doing somewhere similar now, and that the 8 month mark represents the difference between expected owner reservations and actual reservations. Is that correct?

Vistana does not disclose it's practices, so who knows!

 

[CalGalTraveler]

Vistana does not disclose it's practices, so who knows!

Is this because of Flex? For HGVC it's very straightforward. Either the reservation dates are available after home week reservations are taken, or they are not. So there is nothing else to compete with the pool other than estimating what to deposit in RCI for owners that exchange but I imagine that is not significant because they have leeway to deposit the silver weeks, with parking lot views - it's usually what no one else wants.

 

[vikingsholm]

I still believe that Marriott will seek to maximize sales and profits by keeping the 3 systems separate, but make each system more integrated within it. The conduit to book into the other systems will be based on whether the owners have converted their timeshare into each point system through developer purchase or requalification or maybe what some of you have indicated - some sort of expensive enrollment.

I'm not so sure of that, assuming I'm interpreting what you're saying correctly. I speculate somewhat of a variant on this.

I think they will make it cheap and easy for existing owners (of all systems in the merger) to get into a trading pool of whatever sort they devise for the multi-system points overlay, at least at a basic or entry level. I bet they'll want to increase that availability pool of reservable units among the different systems pretty fast up front, and that's a good way to do that. Marriott, Vistana, and Hyatt owners who have already either enrolled in points systems or purchased additionally into points or weeks may feel somewhat tapped out already, especially if they ponied up more cash beyond their original purchases already. As a Marriott-only owner, I wouldn't mind better access for example to Westin Princeville or a few of the Hyatts where Marriott doesn't have properties, but there are still other decent trading alternatives outside of those systems in most of those areas. So I'm not about to pay anything much more than an additional pittance to access those, at least at a basic level.

I think where the sales and revenue will be focused is on new points buyers with starry eyes about this shiny new expanded system, and owners of very few weeks/points currently who can upgrade their access to all of the multiple systems by buying more points - through Marriott setting different levels of access to the other systems based on level of points/weeks owned within any of the existing systems.

Then, the access within our own systems that we currently have would not be changed that much, IMO, as that's sort of what Marriott did by adding DC points options to legacy weeks, but making all that optional. Certain favoritisms that now exist for trading within one's owned system currently will probably largely stay intact as well. All of that tends to favor existing owners of multiple weeks and higher number of points, and I think Marriott may continue that approach as it develops the new system, but extend those favoritisms to the owners of more weeks/points with Hyatt and Vistana too. The incentive for those people with fewer points or weeks would be that buying even more points will give better access in some ways to trading into both one's own and the other new systems (that may exist in some overlay system).

 

[DeniseM]

Is this because of Flex?

No, it's because Vistana, and Starwood before them, were secretive about what goes on behind the scenes. We know they manipulate the inventory, but we don't know how or why. For instance, 2 years ago, at 8 months before check-in, they did not release any summer inventory in Hawaii - none. Then several months later, they released a small amount of summer inventory all at one time. If you ask about this, you can't get any answers. Now that there are multiple, but separate flex programs, it is even murkier than it was before.

 

[DannyTS]

No, it's because Vistana, and Starwood before them, were secretive about what goes on behind the scenes. We know they manipulate the inventory, but we don't know how or why. For instance, 2 years ago, at 8 months before check-in, they did not release any summer inventory in Hawaii - none. Then several months later, they released a small amount of summer inventory all at one time. If you ask about this, you can't get any answers. Now that there are multiple, but separate flex programs, it is even murkier than it was before.

Is it possible that they keep a certain amount of weeks to rent them through online travel agencies (Expedia etc) for pure profit?

 

[CalGalTraveler]

Marriott has a Trust that includes deeds for all properties, with varied coverage for the different properties. This is one bucket of inventory available to cover point reservations. The weeks inventory is a separate bucket of inventory, some of which will be made available for point reservations.

Marriott will estimate/forecast/project the number of weeks that will be:

1) Redeemed for Marriott Reward Points
2) Redeemed for Vacation Club Points (called Elected Points)

They will “hold back” these projected weeks from what is available to deeded week owners.

50% of these net available weeks are released 13 months out for owners to make a week reservation.

The other 50% is released 12 months out, again for a week reservation.

Therefore what is available for Points reservations is the combination of #2 above (the projected number of weeks that will be redeemed) plus whatever inventory is in the Trust. Dioxide and I monitored the Trust filings carefully for a number of years and I believe the Trust holds (as of a few years ago) about 20% of all Maui Ocean Club OF weeks so there is a reasonable/consistent source of weeks for that important property.

With respect to Starwood, I would think Marriott would do the same process - estimating how many weeks would be redeemed for Marriott DC points, and hold those back from release in the same manner.

I would suspect Starwood is doing somewhere similar now, and that the 8 month mark represents the difference between expected owner reservations and actual reservations. Is that correct? That would still be the same under the new system (this is hypothetical) except that there would be the new impact from forecasted point elections. This is my theory of course.

Best,

Greg

Thanks. This is helpful. I am assuming that they allocate the type of unit based on what is actually in the trust or enrolled e.g. OF for OF, Island for Island.

How does MVC handle seasonality for DC in a place like Maui where they could technically reserve all 20% of inventory in summer and whale season with platinum float inventory. Is it evenly spaced out across the year?

 

[DeniseM]

Is it possible that they keep a certain amount of weeks to rent them through online travel agencies (Expedia etc) for pure profit?

Yes and no: Until 60 days before check-in, they are only supposed to rent weeks that they own, or weeks that the owner has converted to Starpoints, etc. But at 60 days before check-in, Vistana can hoover up any unreserved reservations, put them in their own inventory, rent them, and put the proceeds in their pocket.

 

[DannyTS]

Yes and no: Until 60 days before check-in, they are only supposed to rent weeks that they own, or weeks that the owner has converted to Starpoints, etc. But at 60 days before check-in, Vistana can hoover up any unreserved reservations, put them in their own inventory, rent them, and put the proceeds in their pocket.

i got it. but who is keeping them honest?

Sent from my SM-G930W8 using Tapatalk

 

[dioxide45]

Dioxide, good comments here -- my only adjustment would be that I think WKORV is more in line with Lahaina/Napili than the original MOC, and I will edit and clarify my original note. I believe a 2BR OF at MM1 redeems at 7,650 points.

Good point about WKORV. I do agree it should be compared to Lahaina Napili. I was comparing to MOC.

 

[DeniseM]

i got it. but who is keeping them honest?

No one...

 

[DannyTS]

No one...

Some owners complained that in the last 2-3 years it has been much more difficult to book 51 and 52 at Lagunamar. Is there an explanation for that? Since i understand that there is no one looking over their shoulder, is it impossible that they "save" 30 apartments and release them 60 days before check in through Expedia ( or Hotwire, even better since you don't even know the hotel in advance) ?

Do not forget that, besides the (alleged) possible direct profit, they would have another motive to do it: a fresh crop o prospects.

 

[GregT]

Thanks. This is helpful. I am assuming that they allocate the type of unit based on what is actually in the trust or enrolled e.g. OF for OF, Island for Island.

How does MVC handle seasonality for DC in a place like Maui where they could technically reserve all 20% of inventory in summer and whale season with platinum float inventory. Is it evenly spaced out across the year?

Yes it is spread evenly throughout the year (at least that is what I have been told). The exception is fixed weeks - which are fixed of course. It’s the floats that are spread evenly.

Best,

Greg

 

[bobpark56]

It is interesting that the Marriott press releases specifically called out St. John and the Mexico properties, but was silent on Harborside. I suspect that it is because there is significant unsold inventory at these properties that could be placed in the Marriott Trust.

I agree with Dioxide and that VSN will remain intact and that Marriott will offer an overlay that permits Starwood owners to enroll their weeks (for a fee) and get Marriott Elected Points to use to exchange to Marriott properties. I believe that unsold inventory at St. John and the Mexico properties (and others) will be placed into the Trust.

I don't think there will be a blanket 40:1 or 30:1 exchange, but I think that is the right range. I believe Marriott will (correctly) place premiums on certain properties, as they did with their own properties.

Accordingly, I would propose the following point values (in the Marriott system), based upon my opinion of how Marriott valued it's own portfolio.

WKORV OF - 7,500 points (consistent with Maui Ocean Club -- edited: MOC new towers)
WKORV OV - 6,000 points
WKORV IV - 5,000 points
WPORV - 4,500 points
Harborside Platinum - 6,000 points
WSJ 3BR Platinum - 6,000 points
WSJ 2BR Platinum - 4,000 points (consistent with Frenchman's Cove)
WSJ 1BR Platinum - 3,000 points
WSJ Studio Platinum - 2,000 points
SVV 2BR Platinum - 2,000 points
SVV 1BR Platinum - 1,000 points
WDW 2BR Platinum - 3,500 points (consistent with Shadow Ridge)

These are the properties that I track most in Starwood system -- my opinion is that Marriott overweighted the Hawaii properties because they need them available for exchanges, and underweighted everything else because they needed customers to buy points. The same will apply, IMO, to Starwood weeks. I think Marriott will want those owners to buy points, and will give them a good base of points, but not enough to widely exploit the system. Plus, they know that many owners can already exchange with points to other Starwood properties, so there is a built-in "competitor" to Marriott point systems, so that is a consideration.

Finally, I think Marriott will adjust the seasons, and fix some errors -- like Harborside in the summer will be at a higher point value than currently attributable with StarOptions. And voluntary resale properties (that close prior to the merger) will finally have a point value.

It's a fascinating consideration. I thought about buying a WPORV (because I love that property) and I believe it will be eligible for enrollment -- but I can't see Marriott assigning more points to it then they did their own properties (Waiohai/Kauai Lagoons in particular) and the MFs are still too much of a hurdle for a non-core property for me. And like Dioxide, I think StarOptions will be viable for the medium term and I don't need to own WPORV to access it. Interesting stuff.

Best,

Greg

Edited: I clarified that voluntary properties need to close prior to the merger to be eligible for enrollment. I believe those post-merger resales will be blocked, like they are with Marriott.

I doubt the numbers will all be that even. Marriott currently assigns odd values (xx25 and xx75 DPs) to some ownerships so that they cannot be traded for xx00 units without breakage...points that Marriott often pockets when folks can't use their leftover small increments. Sounds like another form of skim, no?

 

[dioxide45]

I doubt the numbers will all be that even. Marriott currently assigns odd values (xx25 and xx75 DPs) to some ownerships so that they cannot be traded for xx00 units without breakage...points that Marriott often pockets when folks can't use their leftover small increments. Sounds like another form of skim, no?

With the ability to bank any amount of points for free, breakage of a small number of leftover points should be minimized.

 

[controller1]

Some owners complained that in the last 2-3 years it has been much more difficult to book 51 and 52 at Lagunamar. Is there an explanation for that? Since i understand that there is no one looking over their shoulder, is it impossible that they "save" 30 apartments and release them 60 days before check in through Expedia ( or Hotwire, even better since you don't even know the hotel in advance) ?

Do not forget that, besides the (alleged) possible direct profit, they would have another motive to do it: a fresh crop o prospects.

Perhaps more of the fixed week owners are electing to utilize their fixed week reservations?

Also, @DannyTS you're definitely interested in timeshares and have been a prolific poster for the past six weeks. I invite you to become a TUG Member and support this forum that way also....