Increase on Marriott Prices Coming or Hoax by Marriott to drive sales?

[Latravel]

Heidi,
Can you expand or clarify what you mean by the part that I put in bold... Maybe I'm confused at the two "they" words... Thanks

Good catch...I shouldn't post so late at night. Marriott is selling more on the direct market at a faster rate than can be sold on the resale market.

 

[Latravel]

If 40 to 50% of Marriott owners are resale purchasers (sorry to go back to this point) I'd watch out if I were you! Marriott is going to find some way to make money off this group of owners since they didn't make money off you in the beginning. That's a lot of, what should I call it, leakage? of profit. If this number is true, this is a ripe group to tap into somehow.

 

[JimIg23]

If 40 to 50% of Marriott owners are resale purchasers (sorry to go back to this point) I'd watch out if I were you! Marriott is going to find some way to make money off this group of owners since they didn't make money off you in the beginning. That's a lot of, what should I call it, leakage? of profit. If this number is true, this is a ripe group to tap into somehow.

Every year, resale owners pay MFs, that they get a piece of. Every time resale owners go to a MVC property, they spend money there, which Marriott gets a piece of. When resale owner lock off or change reservations, they get money. They make money off of resale owners every year. If they were smart, they would make a point system and get as many owers in (including resalers) so they can earn a more yearly. Huge upfront costs will keep people away.

 

[m61376]

Every year, resale owners pay MFs, that they get a piece of. Every time resale owners go to a MVC property, they spend money there, which Marriott gets a piece of. When resale owner lock off or change reservations, they get money. They make money off of resale owners every year. If they were smart, they would make a point system and get as many owers in (including resalers) so they can earn a more yearly. Huge upfront costs will keep people away.

Don't forget to add that past resales are just that- in the past. I think the way Marriott decides to treat current resale owners will depend on what they think is in their best interests. On one hand, they can extract a higher fee to join any new system, thus imposing a penalty; this may generate a small amount of revenue, but is apt to create ill will as well. Or, they will recognize past resales as opportunities for direct sales already having been lost, but treat those owners as valued customers and as another market segment to join any new program; they benefit from increasing initial membership to get the ball rolling and from keeping a customer base happy and maintaining that relationship with an eye towards future sales. Since the success of any new system depends a lot on how quickly they can entice people to join, I think they will offer the option to everyone because it is just a better business decision for them.

I am inclined to think that any new program will be geared towards tipping the balance of the direct versus resale decision. Since they stand to make a lot of money if they can divert future resale buyers to purchasing direct, I think that it is likely that any new system will favor direct purchasers going forward. Whether that means that future resale purchasers will be excluded from joining (which I think would have other market ramifications which might be bad for Marriott in the long run) or that the trading for Reward points will be augmented somehow, I do believe there will be some more marketable distinction. Ideally, they would make the perk of trading for Reward points the perk it once was ans was designed to be; however, excluding future resale purchases from any new program would be easy and profitable int he short term (although it might have more far reaching impact wrt resale value and the way that may or may not impact direct sales as time goes on).

 

[davidvel]

If 40 to 50% of Marriott owners are resale purchasers (sorry to go back to this point) I'd watch out if I were you! Marriott is going to find some way to make money off this group of owners since they didn't make money off you in the beginning. That's a lot of, what should I call it, leakage? of profit. If this number is true, this is a ripe group to tap into somehow.

I don't get it. Is the developer that I bought my home from 7 years ago "going to find some way to make money off" my new neighbor who recently bought the house next door "resale," since the developer made nothing off him?

So every time someone buys a resale house/condo the poor developer considers it lost profit? So my new neighbor has to worry that the developer who sold the home new 7 years ago considers him ripe to be tapped into?

I just don't understand the logic, nor the ability to "tap into" anything.

 

[dougp26364]

I don't get it. Is the developer that I bought my home from 7 years ago "going to find some way to make money off" my new neighbor who recently bought the house next door "resale," since the developer made nothing off him?

So every time someone buys a resale house/condo the poor developer considers it lost profit? So my new neighbor has to worry that the developer who sold the home new 7 years ago considers him ripe to be tapped into?

I just don't understand the logic, nor the ability to "tap into" anything.

No, they consider it compitition.

Timeshares are not the same as full ownership condo's or homes. Timeshares do not appreciate in value like a full ownership condo or home would under normal econmic situations.

It's not in the timeshare developers best interest for resales to be a fraction of of developer pricing. On the other hand, it can work out well for the developer if they sell at full price, purchase back at the lower resale prices when someone want to get out and then resell that same timeshare at retail pricing.

 

[Latravel]

I don't get it. Is the developer that I bought my home from 7 years ago "going to find some way to make money off" my new neighbor who recently bought the house next door "resale," since the developer made nothing off him?

So every time someone buys a resale house/condo the poor developer considers it lost profit? So my new neighbor has to worry that the developer who sold the home new 7 years ago considers him ripe to be tapped into?

I just don't understand the logic, nor the ability to "tap into" anything.

If someone is looking to buy a timeshare and they decide to buy resale, Marriott just lost a sale. Ideally for Marriott, you buy all timeshares from them as well as resales. If you don't, that's a lost opportunity to make a sale. If too many people go to resale, they will reinvestigate their incentives or the program in general. Timeshares are not like real estate as you compare it. Timeshares are more like commodities.

 

[JimIg23]

No, they consider it compitition.

Timeshares are not the same as full ownership condo's or homes. Timeshares do not appreciate in value like a full ownership condo or home would under normal econmic situations.

It's not in the timeshare developers best interest for resales to be a fraction of of developer pricing. On the other hand, it can work out well for the developer if they sell at full price, purchase back at the lower resale prices when someone want to get out and then resell that same timeshare at retail pricing.

I dont see see this either. It is a deed and is taxed like real estate, so says my tax bill from CA. It falls in value, but many here liken it to a car, which also falls in value. If Marriott does not want resales and wants to sell every single unit, including selling the same deeds 2 or 3 times, they should buy back every unit an owner does not want. If they dont, i dont understand how a company gets upset about a resale when they already made a profit on the deed. They still make money with MFs and lock offs, etc. I know it is the way most TS company do business (save Disney) but it does not mean that it is right. Also, this brings me back to a point system. Lets say that there is 100k resales owners (and yes, no one knows how many there are out there), if you want to make long term money on them, let them into the point system at a price point (or none) that will induce them to join so they can give their money to Marriott every year. Making a buy in cost (or not allowing them in) wherein 0% to 10% join does not give Marriott additional steady income for the next 20 years.

 

[PerryM]

Mental problems are best solved by trained professionals....

If someone is looking to buy a timeshare and they decide to buy resale, Marriott just lost a sale. Ideally for Marriott, you buy all timeshares from them as well as resales. If you don't, that's a lost opportunity to make a sale. If too many people go to resale, they will reinvestigate their incentives or the program in general. Timeshares are not like real estate as you compare it. Timeshares are more like commodities.

How many times does the developer get to sell the same time slice over and over and over again? They sold it initially, made a boat load of money and now want to do it again? If so, that's a mental problem on their part.

Marriott does not have a buyback program - i.e. EVERY Marriott owner can NOT instantly get cash for their unit which Marriott must buy back. Sure they act as the broker and charge 40% and occasionally will exercise the ROFR and buy a unit if they believe it can be flipped for a quick buck or two.

Marriott is like ANY owner - they run ads, find prospective buyers, conclude a deal, hire a closing agent (themselves) and collect the money or find someone who will finance the deal.

Corporate greed might have the salesreps and management view their owners as pond scum and take a sale out of their mouths but that's a mental problem on their part.

Marriott has every right to jack up their sales prices - that's a mental problem too - so are imaginary friends like their new exchange program that will rescue them.

I have said the following for about 10 years now:

"The ONLY reason the timeshare industry exists is because ignorant consumers make foolish decisions".

The problem is that the consumer is becoming smarter and smarter and that's something the timeshare industry has a problem with. Each morning they pray for dumb folks to come marching through their sales gallery. Those folks don't have any money now and that's what's killing Marriott.

Smart folks use the internet for just about everything now - they simply time in the word "timeshare" and TUG appears as #11, "Timeshare help" TUG is #2.

The smart folks have money and want to use it efficiently and so enter the resale market where Marriott can't be found. Marriott ONLY appears in the NEW timeshare market where full price is charged - all their owners operate in the RESALE market at a much lower price.

This is what's so crazy about developers - they cry when they don't compete in the resale market and blame it all on the owners - that's a mental problem too.

(Thanks for the few folks that listen to my keyboard pounding away)

P.S.

For those of you who don't believe timeshares are not real estate try not paying your property tax and find out what happens......

 

[jlf58]

This is just my guess, I would say with the collapse of the ROFR, it's probably about 6-8%

Only Marriott knows the exact number of resale owners there are in the system. I doubt that information is subject to any public filing, so we will never know. I dont think I would trust a salesperson's number because they have a reason to down play the number.

 

[PerryM]

This is just my guess, I would say with the collapse of the ROFR, it's probably about 6-8%

Any guess what percentage of current sales, by Marriott, are from recycled units? E.g. Marriott sells 100 units today around the country, what percentage of those are from developer inventory which has never been sold.

Thanks,

 

[cncarruthers]

Hilton calls both their HGVC points and HHonors Club points. I don't think Marriott will have an issue calling points points.

There is a conversion figure for HGVC points to HHonors points but, since I have never made that exchange, I couldn't swear to the exact number. I believe it's something like a 17:1 ratio.

At any rate, you're back to majoring in the minors again. Points, units, credits......who cares. What they call a point won't matter so much as what changes might be made. In short, who really cares what they're called.

Conversion rate is 1:25 HGVC to HHPoints

 

[kschauberger]

I just received a call to talk about a new program coming up. They would like to sit down with us at the end of the month. Is it possible they are trying to sell us their new point program, or something else.

 

[dougp26364]

I just received a call to talk about a new program coming up. They would like to sit down with us at the end of the month. Is it possible they are trying to sell us their new point program, or something else.

Marriott called you to come to your home for an interview? I'd be a little suspicous of that if it were me. I recently had a company posing as Marriott wanting to talk to me about our Grand Chateau ownership. In the end, they never directly stated they were Marriott. After a brief converstation it became obvious it was a scammer and not Marriott calling me.

 

[JimIg23]

I agree, be careful. Do they want to meet at a Marriott where you can verify with a Marriott manager that they work for marriott?