VSN Features/Benefits Reduction and Elimination Post Abound Launch [Call to Action]

[Ken555]

Maybe the plan if to offer that benefit at the "Emperor" level - those with 25K+ points

You’re thinking of the Unobtainium level.


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[rcv82]

IFor me the loss of the early checkin and late checkout hurts.

To me, this was the best part of being 5 star. I nearly always used the late checkout, although it has been getting tougher to get it. And this was definitely one of the benefits touted by sales in up selling to 5 star.

There is now almost no benefit to status in VSN, only when using Abound. I’m not happy at all about this.

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[DanCali]

For folks thinking VSN will always exist and Abound is just a layer… you’re probably right technically speaking. But practically, the insider is right.

Gresham’s law - Bad money drives out good money.

I own multiple weeks in Hawaii. I would never, ever, use these weeks in VSN again. Why? Because I can get two to three times the trading power of SOs by using Abound Club Points. The program will effectively remove the most valuable units from the network, dismantling it piece by piece until all that remains is a husk for legal reasons.

If tug is helping folks maximize their value, the recommendation to owners of any high value week becomes…. Use Abound to maximize what you can get for it. Beats SOs and then some. If there isn’t Abound inventory for those lower valued VSN properties, well, good thing there’s tons of other options in Abound.

If I owned WKORV I would probably feel the same way. But that does not necessarily mean the demise of VSN...

First off, with VSN Staroptions election was seamless and automatic when needed. The choice to elect Abound points by September/October in the prior year is foreign to VSN owners and many will hesitate to commit that early (especially those who typically book October/November/December every year) or simply forget to do it.

Let's assume all Maui weeks are eligible to enroll. But, if I understand correctly, every resale mandatory unit going forward will be in VSN but not in Abound. Sure, those owners will be offered the enrollment opportunity for $30K+, but would more than 1 in 5 take it? You can argue that those owners will use or rent before those weeks go into VSN inventory, but the point is that the flow of inventory may start going back the other way over time.

 

[Kujayhawks]

If I owned WKORV I would probably feel the same way. But that does not necessarily mean the demise of VSN...

First off, with VSN Staroptions election was seamless and automatic when needed. The choice to elect Abound points by September/October in the prior year is foreign to VSN owners and many will hesitate to commit that early (especially those who typically book October/November/December every year) or simply forget to do it.

Let's assume all Maui weeks are eligible to enroll. But, if I understand correctly, every resale mandatory unit going forward will be in VSN but not in Abound. Sure, those owners will be offered the enrollment opportunity for $30K+, but would more than 1 in 5 take it? You can argue that those owners will use or rent before those weeks go into VSN inventory, but the point is that the flow of inventory may start going back the other way over time.

 

[Kujayhawks]

So let’s be honest. If the Abound screw job is just too much to handle, there will be a class action lawsuit immediately against Marriot. Thats a fact of life and a reality that (Marriott) knows all too well.

 

[timsi]

If I owned WKORV I would probably feel the same way. But that does not necessarily mean the demise of VSN...

First off, with VSN Staroptions election was seamless and automatic when needed. The choice to elect Abound points by September/October in the prior year is foreign to VSN owners and many will hesitate to commit that early (especially those who typically book October/November/December every year) or simply forget to do it.

Let's assume all Maui weeks are eligible to enroll. But, if I understand correctly, every resale mandatory unit going forward will be in VSN but not in Abound. Sure, those owners will be offered the enrollment opportunity for $30K+, but would more than 1 in 5 take it? You can argue that those owners will use or rent before those weeks go into VSN inventory, but the point is that the flow of inventory may start going back the other way over time.

I do not think too many are sold resale every year and WKORV has ROFR so Marriott can keep most units that are sold post 8/9

 

[DanCali]

I do not think too many are sold resale every year and WKORV has ROFR so Marriott can keep most units that are sold post 8/9

But why would they keep those weeks? To prevent them from going only-VSN, which they own too? And at what cost? I don't really see the benefit to them in that regard.

They exercise ROFR because they buy points low and sell points high. That is their main criterion - it's all about profit margins. They could be more selective and buy at resorts with low MF/point for example, to lower the Trust points MFs - but they don't really do that. I have resale weeks that, based on enrolled point value, have MF/point of 0.30. Would be great for Trust points owners if MVC actually bought those to put in the Trust to lower MFs for all owners, but they don't do it because it's cheaper for them to buy weeks/points at other places.

They will exercise ROFR wherever is cheapest... If WKORV resale prices were low enough on a cost/point basis they will do it, and otherwise, they won't. They may actually find that $15K for 6200 points is attractive. But they won't find $35K-$40K attractive for the OF weeks with ~8000 points. If anything, this will buoy WKORV/N IV/OV resale prices.

 

[timsi]

My thoughts:

• No more exclusive rights to book during the home reservation period. What was the legal foundation for this change?

• VSN has become a second-class exchange network. Vistana sold VOIs based on the StarOptions chart and VSN was a pivotal point in the decision to purchase. Important features will be removed (like 2 years banking) and now Abound (an Exchange like VSN) will have 4 months of priority ahead of VSN.

• The fragmentation of inventory. Already too many buckets in Vistana (resort owners, flex owners, VSN, both resale and retail, units controlled by Vistana/Marriott). Placing Abound at the same level with the resort owners (12 months reservation period) will have a huge impact on VSN, especially for the weeks and resorts that are already hard to book. This will also likely lead to IT issues due to the increased complexity. There is also a (total) lack of transparency about how the different buckets are prioritized and the mechanisms in place to insure a fair distribution. Marriott has a potential conflict of interest because the rental revenue generated by the units it controls and because their energy will be focused on selling Abound and not the other buckets. The rules are intentionally vague (like in its own discretion, anticipated demand etc.), they do not offer real protection to the owners. Some of these are not new but the creation of Abound will take it to a whole new level, including giving other owners access during the home resort reservation period.

This comment above summarizes it well: “For folks thinking VSN will always exist and Abound is just a layer… you’re probably right technically speaking. But practically, the insider is right. Gresham’s law - Bad money drives out good money. I own multiple weeks in Hawaii. I would never, ever, use these weeks in VSN again. Why? Because I can get two to three times the trading power of SOs by using Abound Club Points. The program will effectively remove the most valuable units from the network, dismantling it piece by piece until all that remains is a husk for legal reasons. If tug is helping folks maximize their value, the recommendation to owners of any high value week becomes…. Use Abound to maximize what you can get for it. Beats SOs and then some. If there isn’t Abound inventory for those lower valued VSN properties, well, good thing there’s tons of other options in Abound.”

• Banked StarOptions will expire after 12 months (18 months for Presidential; 24 months for Chairman). This is a huge loss for those who do not own a gazillion points. Currently it's 24 months for all. (Impacts all except 5-Star Elite / Chairman, and resale voluntary)
• Banking StarOptions deadlines will be 31-61 days earlier for most Elite owners (Oct 31 for Chairman and Aug 31 for Executive or Presidential). Currently it's December 31 for 5-Star and Oct 1 for 3-Star and 4-Star. (Impacts mostly VSN Elite Owners)
• No more early check-in and late checkout. Currently it's a benefit for 5-Star Elite (Impacts 5-Star Elite Owners)
• No more concierge services
• The mandatory VOIs have the potential to have a lower resale value due to the changes. Any owner who buys mandatory resale after 8/9 will only have access to a seriously weakened VSN.
• What was the process to make sure the current Vistana owners’ rights would be protected with the creation of Abound? Who represented the Vistana owners to scrutinize the potential changes? The launching documents were signed by a Marriott executive who represented both sides (Vistana and Marriott).
• Deterioration of services since Marriott took over (call center, IT etc),
• The increase in MF well above the trendline even after taking into account inflation (personal experience, not sure if true for all the Vistana resorts)

 

[JIMinNC]

But why would they keep those weeks? To prevent them from going only-VSN, which they own too? And at what cost? I don't really see the benefit to them in that regard.

They exercise ROFR because they buy points low and sell points high. That is their main criterion - it's all about profit margins. They could be more selective and buy at resorts with low MF/point for example, to lower the Trust points MFs - but they don't really do that. I have resale weeks that, based on enrolled point value, have MF/point of 0.30. Would be great for Trust points owners if MVC actually bought those to put in the Trust to lower MFs for all owners, but they don't do it because it's cheaper for them to buy weeks/points at other places.

They will exercise ROFR wherever is cheapest... If WKORV resale prices were low enough on a cost/point basis they will do it, and otherwise, they won't. They may actually find that $15K for 6200 points is attractive. But they won't find $35K-$40K attractive for the OF weeks with ~8000 points. If anything, this will buoy WKORV/N IV/OV resale prices.

If you look at www.ROFR.net you will see that MVC regularly exercises ROFR on Maui Ocean Club Lahaina/Napili Villas at prices north of $30k. I would expect similar at WKORV.

 

[TravelTime]

But why would they keep those weeks? To prevent them from going only-VSN, which they own too? And at what cost? I don't really see the benefit to them in that regard.

They exercise ROFR because they buy points low and sell points high. That is their main criterion - it's all about profit margins. They could be more selective and buy at resorts with low MF/point for example, to lower the Trust points MFs - but they don't really do that. I have resale weeks that, based on enrolled point value, have MF/point of 0.30. Would be great for Trust points owners if MVC actually bought those to put in the Trust to lower MFs for all owners, but they don't do it because it's cheaper for them to buy weeks/points at other places.

They will exercise ROFR wherever is cheapest... If WKORV resale prices were low enough on a cost/point basis they will do it, and otherwise, they won't. They may actually find that $15K for 6200 points is attractive. But they won't find $35K-$40K attractive for the OF weeks with ~8000 points. If anything, this will buoy WKORV/N IV/OV resale prices.

Why wouldn’t it be attractive to buy back an OF week for $35-$40K if they only need to rent out 7 or so weeks total at 8000 points per week to break even on the purchase?

Also Marriott owners tend to like to book the best views so OF gets booked the fastest. So I would think Marriott would prefer to buy back the best inventory that they can charge the most for in points. This is just a guess, of course. @JIMinNC ’s evidence seems to support this theory.

 

[JIMinNC]

Why wouldn’t it be attractive to buy back an OF week for $35-$40K if they only need to rent out 7 or so weeks total at 8000 points per week to break even on the purchase?

Also Marriott owners tend to like to book the best views so OF gets booked the fastest. So I would think Marriott would prefer to buy back the best inventory that they can charge the most for in points. This is just a guess, of course. @JIMinNC ’s evidence seems to support this theory.

Most likely the key metric is not what they can rent the unit for. As far as we know, most or all ROFR weeks go into the Trust to become a source of new points sales, so they have a target price that gives them the inventory cost they are looking for. These ROFR weeks have a much lower cost of acquisition than building a new resort, so that's why they do it. They also want to get inventory into the Trust that owners want to book, so that's probably a consideration also, but I think acquisition cost per point is the main driver. For example, a 2BR OF at Maui Ocean Club Lahaina/Napili adds 7475 ClubPoints to the Trust. If they ROFR that at $31,000, their cost/point is $4.15. They can then resell those at a list price of $16+ ( a typical discounted sales offer of $14-$15/pt).

 

[TravelTime]

Most likely the key metric is not what they can rent the unit for. As far as we know, most or all ROFR weeks go into the Trust to become a source of new points sales, so they have a target price that gives them the inventory cost they are looking for. These ROFR weeks have a much lower cost of acquisition than building a new resort, so that's why they do it. They also want to get inventory into the Trust that owners want to book, so that's probably a consideration also, but I think acquisition cost per point is the main driver. For example, a 2BR OF at Maui Ocean Club Lahaina/Napili adds 7475 ClubPoints to the Trust. If they ROFR that at $31,000, their cost/point is $4.15. They can then resell those at a list price of $16+ ( a typical discounted sales offer of $14-$15/pt).

I agree with what you are saying. It seems like a win-win for Marriott to have Maui OF in the trust. First so they can resell the points at a much higher price point like you said. Then second they have the most desirable inventory in the trust forever that they can rent at the highest cost per point. I am always looking to spend my points on 2BR OF and there is never enough inventory. It books up within minutes of the booking window opening. I am not their business strategist but I would probably prefer to re-purchase the best inventory to rent points over the long term than to have a one-time resell opportunity. I get they keep re-selling points but just looking at that one particular week, it is a one time buy back/re-sale vs renting the underlying points in infinity. Correct me if I am wrong on any of this thinking.

 

[dioxide45]

Most likely the key metric is not what they can rent the unit for. As far as we know, most or all ROFR weeks go into the Trust to become a source of new points sales, so they have a target price that gives them the inventory cost they are looking for. These ROFR weeks have a much lower cost of acquisition than building a new resort, so that's why they do it. They also want to get inventory into the Trust that owners want to book, so that's probably a consideration also, but I think acquisition cost per point is the main driver. For example, a 2BR OF at Maui Ocean Club Lahaina/Napili adds 7475 ClubPoints to the Trust. If they ROFR that at $31,000, their cost/point is $4.15. They can then resell those at a list price of $16+ ( a typical discounted sales offer of $14-$15/pt).

I think in the past they have indicated that they want to keep the cost of this reacquisition of inventory below 30%. In some cases they could get it close to 0% plus their fixed costs (recording, legal). I am not sure the actual cost to MF is all that important or even the resort the inventory is coming from. They can already sell the 90+ resorts and it doesn't matter if the points come from Hawaii or Orlando. Lost of people still want to go to Orlando too. As for MF/point, given the amount of points now in the trust, I doubt the volume of inventory they bring in via ROFR, deedback or foreclosure is really going to move the needle on the MF per trust point. It all comes down to buy low sell high.

 

[DanCali]

Why wouldn’t it be attractive to buy back an OF week for $35-$40K if they only need to rent out 7 or so weeks total at 8000 points per week to break even on the purchase?

They are not in the rental business. They are in the business of selling points.

 

[dioxide45]

They are not in the rental business. They are in the business of selling points.

They also don't get anything if people book higher end weeks via points. I see a lot of Marriott wants these weeks or those weeks for the trust so they can offer them out for lots of points to Abound members. When it comes to points reservations, it really doesn't matter if it is a high end week or a low week. They make no more or no less on it. It is all about buy low and sell high.

 

[DanCali]

If you look at www.ROFR.net you will see that MVC regularly exercises ROFR on Maui Ocean Club Lahaina/Napili Villas at prices north of $30k. I would expect similar at WKORV.

I know people here like ROFR.net. But it's also subject to abuse where sellers can just enter bogus numbers to try to get a higher price for their weeks. I'd take it with a grain of salt...

They also want to get inventory into the Trust that owners want to book, so that's probably a consideration also, but I think acquisition cost per point is the main driver. For example, a 2BR OF at Maui Ocean Club Lahaina/Napili adds 7475 ClubPoints to the Trust. If they ROFR that at $31,000, their cost/point is $4.15. They can then resell those at a list price of $16+ ( a typical discounted sales offer of $14-$15/pt).

This is kind of what I was alluding to. My point was that they can add:

6200 points for $15K (OV/IV prices at WKORV/N) - this is $2.40/point
~8000 points for $35-$40K (OF weeks) - this is about $4.50/point

So they would purchase the IV/OV weeks, not OF. They sell the points at the same retail price so margins would be higher...

 

[TravelTime]

They are not in the rental business. They are in the business of selling points.

Then why are there MFs and points charts? Does MVC make any money off MFs?

Wouldn’t this be like saying Apple is in the business of selling iPhones and not service income?

 

[Jayco29D]

I don’t want anything from Marriott even it’s free. It worth zero to me, or negative value. Marriott please take everything back, just don’t let Marriott people book Vistana. I’m fine with everything Vistana provided before.

I think the fear of Marriott people booking into Vistana inventory is overblown. In fact, Marriott people are more worried about Vistana people taking Marriott’s much better inventory from them. Also Abound only gets inventory from Vistana if a Vistana owner elects points. That means the Vistana owner values getting Abound points more than using their home weeks or SOs. It is a free market so let Vistana owners elect Abound points if they want. Anyone who wants what they already have in Vistana will still have it. Vistana owners who want Vistana resorts only will still play by themselves in the Vistana pool.

 

[Jayco29D]

I know people here like ROFR.net. But it's also subject to abuse where sellers can just enter bogus numbers to try to get a higher price for their weeks. I'd take it with a grain of salt...



This is kind of what I was alluding to. My point was that they can add:

6200 points for $15K (OV/IV prices at WKORV/N) - this is $2.40/point
~8000 points for $35-$40K (OF weeks) - this is about $4.50/point

So they would purchase the IV/OV weeks, not OF. They sell the points at the same retail price so margins would be higher...

WKOVRN 2BR OF was about $14,000 for EOY (including closing costs) when I bought it not all that long ago and gets 8300+ points EOY. Works out to about $1.70 pp.

 

[JIMinNC]

I know people here like ROFR.net. But it's also subject to abuse where sellers can just enter bogus numbers to try to get a higher price for their weeks. I'd take it with a grain of salt...

While you are correct it could be abused, when you look at the entries for Maui Ocean Club Lahaina/Napili that I quoted, quite a few of the entries are from well known TUGgers, so I trust those entries for sure.

This is kind of what I was alluding to. My point was that they can add:

6200 points for $15K (OV/IV prices at WKORV/N) - this is $2.40/point
~8000 points for $35-$40K (OF weeks) - this is about $4.50/point

So they would purchase the IV/OV weeks, not OF. They sell the points at the same retail price so margins would be higher...

The reality is they might buy both of those. I know specifically of multiple people who have lost MOC units to ROFR north of $31k. The break point seems to be somewhere around $35k for MOC-L/N

 

[pchung6]

I think the fear of Marriott people booking into Vistana inventory is overblown. In fact, Marriott people are more worried about Vistana people taking Marriott’s much better inventory from them.

Why would Vistana people take Marriott inventory if it is exchange? Also most Marriott resorts are inferior to Westin or Sheraton resorts. Vistana people are more worried Marriott will play dirty, most likely Marriott will…

 

[Jayco29D]

Why would Vistana people take Marriott inventory if it is exchange? Also most Marriott resorts are inferior to Westin or Sheraton resorts. Vistana people are more worried Marriott will play dirty, most likely Marriott will…

I do not think you understand the new program and how it works. I also think you are an extreme pessimist. Plus only Vistana owners who see value in Abound will elect Abound points. You are essentially saying that Vistana owners should not have free choice to elect Abound points if they see value in Abound. If Abound is as bad as you say, then no Vistana owners will elect Abound points.

 

[Ken555]

I do not think you understand the new program and how it works. I also think you are an extreme pessimist. Plus only Vistana owners who see value in Abound will elect Abound points. You are essentially saying that Vistana owners should not have free choice to elect Abound points if they see value in Abound. If Abound is as bad as you say, then no Vistana owners will elect Abound points.

I wouldn’t be surprised if for the first few years many Vistana owners exchange for Abound to test the new system, especially those who don’t know or participate here (i.e the majority of owners).


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[timsi]

They are not in the rental business. They are in the business of selling points.

140 million dollars in rental revenue last quarter is not exactly pocket change

 

[pchung6]

I do not think you understand the new program and how it works. I also think you are an extreme pessimist. Plus only Vistana owners who see value in Abound will elect Abound points. You are essentially saying that Vistana owners should not have free choice to elect Abound points if they see value in Abound. If Abound is as bad as you say, then no Vistana owners will elect Abound points.

Sorry, I just can’t figure out what to do with these Abound points. So far I see more value with my Staroptions points than Abound points. I might change my mind later, as I’m still figuring out. I still don’t see any Marriott resorts I like to go with these points yet. If I like Vistana/SPG/Starwood more than Marriott has to be called pessimist, just let it be. But I do own Marriott timeshare.