How would you view Marriott differently if they retracted skim?

[BocaBum99]

Probably the single most explosive aspect of the recently introduced Marriott points system is the concept of skim. For those of you who don't know what that is, it's the idea that Marriott will give you a certain number of points for your enrolled week, but the points they give you isn't enough to enable you to reserve your own week using points. Estimates are that the amount of skimming off the top is roughly 7-10%. It appears to be a profit margin for Marriott for managing the internal exchange system above and beyond the annual fees and upfront fees they charge for enrolling into the program.

I am hoping that Marriott listens to its customers and decides that skim was a bad idea. The best case would be that they repeal it.

My question for you is this. Should Marriott repeal skim and grant owners points equal to the average required to book a unit in their own season, would you change your mind about Marriott?

Here are some possible choices:

1) Marriott permanently damaged my Trust in them by introducing skim. It doesn't matter what they do now.

2) Marriott will have earned more of my respect because they made a mistake and they admitted it and changed the policy to better meet customer needs.

3) I don't understand skim and quite frankly, I don't care about it. My view of Marriott isn't influenced by it one way or another.

4) Other: please explain.

 

[camachinist]

'Hello, Mr. camachinist, glad you could join us today. I'd like to talk to you about our new points system which we feel will be a great enhancement to your current ownership as a multi-week developer owner. We thank you for your patronage"

"Let's look at your reservation patterns. (pulls up reservation history on MARSHA). I see you've traveled to Hawaii a lot. Let's demonstrate how this new points system will help you do that even more easily than you already have. BTW, did I mention that your developer weeks can join the new system without charge and there is just a small annual fee? This is our thanks to you for being a loyal Marriott customer"

So, do you want to hear more?

BTW, this is how they sold us NCV developer in the first place, being a long-time Marriott hotel user. Positive, customer-oriented empowered employees. IMO, that Marriott is gone, but I can ressurect it in effigy if you want

To me, skim is just another stick in the eye of developer owners, of which own the majority of the resorts Marriott manages for *us*. They forgot who the boss was/is...

To answer your question directly, if they eliminated skim and allowed my developer weeks to enroll at no charge, I'd reconsider the DCP. Otherwise, not a chance, and I'll recommend my reasoning to any developer owner I meet.

 

[pipet]

I lean more to option 2) Marriott will have earned more of my respect because they made a mistake and they admitted it and changed the policy to better meet customer needs.

Everyone makes a mistake . Fix it! Come up with a solution that is satisfactory to your customer. That's what I expect out of a higher-end company.

BTW, did I mention that your developer weeks can join the new system without charge and there is just a small annual fee? This is our thanks to you for being a loyal Marriott customer

Wow, now that would make me happy! They sure made a crapton off those of us who purchased developer weeks, and it would be nice to get a little more compensation; saving 1K compared to those who bought resale and saved 10-30K doesn't quite cut it!

 

[MikeZ]

I lean more to option 2) Marriott will have earned more of my respect because they made a mistake and they admitted it and changed the policy to better meet customer needs.

Everyone makes a mistake . Fix it! Come up with a solution that is satisfactory to your customer. That's what I expect out of a higher-end company.

Totally agree! I would sign up the same day, if they made it equitable...

 

[Art]

From the sound of various comments that have come back from conversations with Marriott sales personnel, supervisors, whatever, the skim is part of the business model for the Destination Club. In particular, it seems to be the means by which Marriott will cover the operating costs of the Destination Club, and make its profit.

If it is a valid expectation that Marriott has costs to pay for this program and is entitled to make a profit, the original question should be modified.

Without echoing all the options, the question probably should be: What is a less controversial way than the "skim" for Marriott to use to maintain the economic viability of the Destinations Club?

For those who unhappy with the skim as the method of paying for the benefits of being in the Destination Club, what payment methods would be more palatable? Saying "No charge for it" is an unacceptable answer because there are start-up, and eventually, operating costs to be paid.

I've gone to enough points programs to know that the points ownership cost is higher than weeks ownership cost. For one specific example, check out past discussions when Shell was trying to convert Kona Coast weeks owners to the Shell Vacation Club.

Art

 

[pipet]

For those who unhappy with the skim as the method of paying for the benefits of being in the Destination Club, what payment methods would be more palatable? Saying "No charge for it" is an unacceptable answer.

My vote would be not to use an all-you-can-eat fee structure. I think a lot of II users would still be willing to pay exchange fees especially if they are less than what II charges. Another way to recoup costs could be to charge cleaning fees for short stays (or allow a certain number of short stays before a cleaning fee is incurred). This way the increased costs would be borne by those incurring the higher expenses.

 

[jimf41]

My problem with the skim is not necessarily with the skim itself but the unequal way they implemented it. At Ocean Pointe there are weeks in the Silver and Plat seasons where you can actually come out ahead depending on what weeks you normally reserve. In the Gold season however, it appears that no matter what week you pick you wind up on the wrong side of the power curve. From what others have posted it looks like there are entire resorts that get skimmed on every week.

The only way I can figure that they arrived at these numbers is by using the II TDI. Gold weeks at Ocean Pointe actually have a lower average TDI than the Silver weeks. While the TDI might explain how they did it I cannot fathom why they did it. I think they really underestimated how the canned response,

"If you want to reserve at your home resort just reserve your week like you always do."

was going to go over with their current owners.

As far as it affects me I'll benefit by it with my Silver weeks. My platinum week I would get skimmed if I reserved it on points but I wouldn't do that so it doesn't have any effect on me. I usually trade that Platinum week however and compared to where I want to use it it benefits me to convert it to points.

Overall I think the assignment of points, both received and required, is very unfair system wide. It does benefit my usage patterns so I will take advantage of it. As long as I'm benefiting by it it's hard to say that I would be asking Marriott to repeal it. I would like to see a more equitable distribution of it however.

At MFC I get skimmed almost every week I use except for one. I'll reserve that one with points and the rest as weeks. Again a positive effect.

 

[RedDogSD]

You asked this question on other thread, but obviously, that was off-topic. So, I will paste my answer here as this is the correct thread for the conversation:

Depends on how they got rid of it. Would they give owners enough points to get anything in their season, or just the average? Most NCV owners would not be happy if they could still not get enough points for July, August and most desert owners would not be happy if we could not get enough points for March-April.

To duplicate the way that Disney, Hilton, etc have done it, they would have to reduce the number of different point reservation categories. They usually only sold 3 (sometimes 4) seasons, but now they have 6-8 different point totals for the year.

 

[camachinist]

I'll just say a healthy business doesn't capitalize start-up costs on the backs of its customers. That's all I'm going to say. Marriott is going about this all wrong, except perhaps for the next quarter earnings report.

Just like with easy money, watch and see...

 

[CMF]

I choose #2.

I also want a pony

Charles

 

[BocaBoy]

I have no problem with the "skim", as you call it. Marriott's new points system is a TRADING vehicle for weeks owners, not the way to reserve your own full week at your own resort. Other systems that keep getting cited as not having a "skim" (Hilton; Starwood, e.g.) are not good comparisons. Why? Because you receive enough points to reserve your own week AND YOU HAVE TO USE THOSE POINTS TO RESERVE AT YOUR HOME RESORT. You have priority if you own at the resort, but you still use your points to reserve. Obviously, such a system can not have what you call a "skim" because that would prevent you from reserving your own week.

 

[Whirl]

My vote would be not to use an all-you-can-eat fee structure. I think a lot of II users would still be willing to pay exchange fees especially if they are less than what II charges. Another way to recoup costs could be to charge cleaning fees for short stays (or allow a certain number of short stays before a cleaning fee is incurred). This way the increased costs would be borne by those incurring the higher expenses.

I agree. I would be happy to continue the "nickel and diming" as needed but have the costs not so painfully borne.

The flexibility is the draw of the new system for me and the assurance of getting the view requested ( or not, but at least being certain), not that annual fee structure, but that change alone may not be enough to cover costs.

Plus, I am quite chagrined as well, although unconfirmed, about the rumored loss of full II functionality, if true.

I am one who from the beginning totally understands the "skim" as it has been termed and realize and completely accept that they have to be economically viable. Viability is in everyone's interest. Unfortunately, I wish they had come up with a way that would not be interpreted so controversially.

I am in favor of changing it if gets lots of owners on board and because it is SUCH a hot button and strong deterrent from joining. Again, success of the program is my goal and if this brings on more current owners to convert so that more inventory is available in the program, then I am in favor.

But beware of offsetting factors. Not sure what they would feel they need to introduce to make it work...could be worse and they probably already considered it.

Better, again, for everyone.

Anyway, I think it is all a mute point ....not getting changed

 

[RedDogSD]

I have no problem with the "skim", as you call it. It is a TRADING vehicle, not the way to reserve a full week at your own resort. Other systems that keep getting cited as not having a skim Hilton; Starwood, e.g.) are not good comparisons. Why? Because you receive enough points to reserve your own week AND YOU HAVE TO USE THOSE POINTS TO RESERVE AT YOUR HOME RESORT. You have priority if you own at the resort, but you still use your points to reserve. Obviously, such a system can not have what you call a "skim" because that would prevent you from reserving your own week.

Yes and No Boca. If someone new walks in off the street and they want to own what you already have, they have to buy more points than they are giving you. Using my resort as an example, if a new owner always wants to go to Desert Springs during March every year, they need to buy 4225 points. However, I already have the right to do that.....but I am only given 3225 points. So, I dismiss your argument that we are comparing apples and oranges.

 

[DanCali]

From the sound of various comments that have come back from conversations with Marriott sales personnel, supervisors, whatever, the skim is part of the business model for the Destination Club. In particular, it seems to be the means by which Marriott will cover the operating costs of the Destination Club, and make its profit.

If it is a valid expectation that Marriott has costs to pay for this program and is entitled to make a profit, the original question should be modified.

Marriott charge owners a 15% management fee in MFs. In reality it is probably closer to 15%, since they hire "Marriott housekeeping", "Marriott Pool Cleaners", "Marriott Gardening" and take a share of their revenue too.

They charge an enrollment fee into the points program. Probably $1000 per enrollee on average. At 40K enrollments that $40M... wouldn't that cover much of the upstart cost?

They also charge $10/point for each point they sell and $0.40 every year. Since most of those legacy weeks were written off, this is also pure profit.

They also charge $165/$199 each year for everyone who enrolls in points. People who will use their home resorts pay this as an incremental cost which is pure profit to Marriott. On other users thay may make or lose money, depending on what they give up with lockoff fees, point conversion fees etc. But this is not a low fee; Starwood for example charges only about $109/$140 flat fees for single and multiple week owners and adds very few fees on top of that ($29 cancellation fees for reservation made 8 months out or less, and housekeeping if you have more than 2 stays a year).

In terms of costs, what are the incremental costs? They have the agents taking reservations anyway... they already try to get people into sales presentations at the resorts anyway... so yes, there was an upstart cost, but I would think the enrollment fees and selling points instead of silver weeks more than cover it! Anything else is gravy...

So if all of the above is not enough and they need to skim points from owners to make a profit, maybe the program is not viable economically? In that case "Don't launch it" should be the acceptable answer!

Without echoing all the options, the question probably should be: What is a less controversial way than the "skim" for Marriott to use to maintain the economic viability of the Destinations Club?

For those who unhappy with the skim as the method of paying for the benefits of being in the Destination Club, what payment methods would be more palatable? Saying "No charge for it" is an unacceptable answer because there are start-up, and eventually, operating costs to be paid.

Having said all that, assuming they do launch a program that is only viable if they make owners pay through the nose, why not charge a cash fee for converting to points each year ($50 for 0-2000 points, $100 for 2000-4000 points, $150 for 4000-6000 points, $2000 for 6000+ points)? Or they could charge exchange fees and housekeeping fees. That way is someone uses points in a manner that causes increased wear and tear they pay more.

There are plenty of other ways to do it that are less underhanded...

But I disagree with the premise that it's necessary to begin with.

 

[pipet]

I have no problem with the "skim", as you call it. Marriott's new points system is a TRADING vehicle for weeks owners, not the way to reserve your own full week at your own resort.

But it's a trading vehicle that prevents me from doing EQUAL exchanges. Do other systems prevent people from doing EQUAL exchanges?

 

[Nickfromct]

#2. I can't past the skim issue.

 

[Frisbeeace]

skimming has been there for ages

I'm also upset about the 5% skimming at my home resort but how is that this big fuzz didn't arise before with the outrageous skimming that we suffer when we trade for Marriott Rewards points? I get 110,000 MRP for a week that Marriott offers at 180,000. That's 64%!!! Or 7 nights at a 2 bdr villa for 3 nights at a hotel room. This skimming factor grew from 5% to 64% since I bought in 1993 and shows the path ahead and who are you dealing with. Marriott considers that your property ages and depreciates with time despite that they sell your nights at increased rates over time. So, as new developments open, you will see you fixed amount of points worth less and less without a chance to trade for anything but another low trader week like yours.

 

[windje2000]

As far as I'm concerned, Marriott has fallen off a cliff.

They're the Goldman Sachs of timesharing and traded their once stellar reputation for a buck. Maybe next they'll be selling timeshare tranches of securitized assets . . oooops, that's what they are doing..

If you try to fool me once, . . . you will probably try to fool me again, . . . and again . . . and again.

Anything they come up with will, of course, be carefully considered . . . with a large helping of skepticism.

 

[ArtsieAng]

I have no problem with the "skim", as you call it. Marriott's new points system is a TRADING vehicle for weeks owners, not the way to reserve your own full week at your own resort. Other systems that keep getting cited as not having a "skim" (Hilton; Starwood, e.g.) are not good comparisons. Why? Because you receive enough points to reserve your own week AND YOU HAVE TO USE THOSE POINTS TO RESERVE AT YOUR HOME RESORT. You have priority if you own at the resort, but you still use your points to reserve. Obviously, such a system can not have what you call a "skim" because that would prevent you from reserving your own week.

But it's a trading vehicle that prevents me from doing EQUAL exchanges. Do other systems prevent people from doing EQUAL exchanges?

I agree......It prevents you from making like for like exchanges. I am unaware of any other system that operates this way.

I think it provokes trusts issues, and is a PR nightmare. I don't know if Marriott would ever consider rethinking this decision, but I feel it behooves them to do so.

I vote for #2.

 

[DanCali]

I have no problem with the "skim", as you call it. Marriott's new points system is a TRADING vehicle for weeks owners, not the way to reserve your own full week at your own resort. Other systems that keep getting cited as not having a "skim" (Hilton; Starwood, e.g.) are not good comparisons. Why? Because you receive enough points to reserve your own week AND YOU HAVE TO USE THOSE POINTS TO RESERVE AT YOUR HOME RESORT. You have priority if you own at the resort, but you still use your points to reserve. Obviously, such a system can not have what you call a "skim" because that would prevent you from reserving your own week.

Technically what you are saying with Starwood is inaccurate. There is an internal difference in the booking system between (i) making a reservation with home resort priority at 12-8 months out and (ii) making a reservation at less than 8 months out at any resort, including home resort.

(i) is equivalent to booking your week as a week. You get your deeded view, and you don't pay a cancellation fee if you cancel the reservation later on (outside of 60 days)

(ii) is equivalent to electing to use points. It just happens that all weeks in a season are the same number of points to trade into, and owners get that same number of points too (with the exception of a couple of older Vistana resorts, where owners get the average of the legacy 1-52 season). Booking your "home resort" in this window is equivalent to any other exchange. You have no priority over others, you do not get your deeded view (but can get an upgraded view based on reservation timestamp), and you need to pay a cancellation fee if you cancel later on.

 

[WINSLOW]

If someone new walks in off the street and they want to own what you already have, they have to buy more points than they are giving you.

If someone new walks in off the street and buys the same amount of points Marriott gave us for St Kitts, they'd be paying $1300 less than we did 1 1/2years ago. (at the current $9.20/pt, don't know where the $10/pt is coming from, has the points gone up, is the $9.20 only for weeks owners? are they even selling to new owners yet?)

Same goes for St Thomas, they'd pay $1820 less than us 3 years ago.

Our Aruba points are better, I thought because we bought that awhile ago

I thought I read that the points were taken from what the current market price of your week is? I know about the 25% off sales and I guess we should just be happy that they didn't distribute points according to that.


Anyway, with the $1300 & $1820 we could have bought 339 points more if we had waited & not bought weeks, which would allow us to get into more weeks in our season but still not all.

I know you can't look at what you paid for your weeks as a margin, but having bought all developer weeks and 2 of which was not that long ago, the skim just makes me feel like more of an idiot for doing so.

So to answer your survey - I want to say 1 but am leaning more towards 2, if they actually changed things --- But they won't so I'm saying 1

I never thought that the Marriott name would turn into just another bad T/S cliché.

 

[jlf58]

Boca,

There is a ZERO percent chance they will get rid of the skim. Being all knowing, you should know they have never reversed any decision , no
matter how much bad press they got.

Probably the single most explosive aspect of the recently introduced Marriott points system is the concept of skim. For those of you who don't know what that is, it's the idea that Marriott will give you a certain number of points for your enrolled week, but the points they give you isn't enough to enable you to reserve your own week using points. Estimates are that the amount of skimming off the top is roughly 7-10%. It appears to be a profit margin for Marriott for managing the internal exchange system above and beyond the annual fees and upfront fees they charge for enrolling into the program.

I am hoping that Marriott listens to its customers and decides that skim was a bad idea. The best case would be that they repeal it.

My question for you is this. Should Marriott repeal skim and grant owners points equal to the average required to book a unit in their own season, would you change your mind about Marriott?

Here are some possible choices:

1) Marriott permanently damaged my Trust in them by introducing skim. It doesn't matter what they do now.

2) Marriott will have earned more of my respect because they made a mistake and they admitted it and changed the policy to better meet customer needs.

3) I don't understand skim and quite frankly, I don't care about it. My view of Marriott isn't influenced by it one way or another.

4) Other: please explain.

 

[RedDogSD]

Boca,

There is a ZERO percent chance they will get rid of the skim. Being all knowing, you should know they have never reversed any decision , no
matter how much bad press they got.

Do you not watch James Bond Movies? Never say Never. There is some chance, although it might be very small, that they will reverse course.

 

[jlf58]

You have a better chance of an arrogant old guy from TUG being made made newly appointed GM of Marriott.

Do you not watch James Bond Movies? Never say Never. There is some chance, although it might be very small, that they will reverse course.

 

[DanCali]

I too think they will not reverse this no matter what.

That said IF they reverse it, my answer is combination of 1 and 2. If they reverse it and replace it with nothing then it's 2. If they come up with other fees to make up for it, it's 1...