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What happens if Marriott sells any Vistana property?

DannyTS

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I've read comments that some Vistana resorts are up for sale. I assume it is also possible to sell only certain phases, not the complete resort.

1) What would the owners experience and what would happen with the VSE membership and the II priority?

2) What are the implications to those Flex trusts that may include units from those resorts?

3)Who would buy those properties? I assume another timeshare developer that does not have a presence in those areas?

I see several categories of owners:
voluntary resort retail
mandatory resort retail

voluntary resort resale
mandatory resort resale

Thanks everyone.
 

YYJMSP

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How can Marriott sell the properties, as we are the owners?

I think you are talking about a property changing brands...
 

DannyTS

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I assume that the management of the resort would be taken over by another company. In addition Marriott would sell all the units it owns. The owners would keep their ownership under a new banner
 

VacationForever

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You are over thinking it. I believe you are interpreting this from the Q3 update call. It does not affect existing developed and sold properties. I read it as undeveloped land.
  • As a result of the ILG Acquisition, the company performed a comprehensive review of its Vacation Ownership property and equipment including undeveloped parcels, future phases of existing resorts, operating hotels, and other non-core assets, to determine the best strategic direction with respect to these assets. As a result of the review, the company currently expects proceeds from future asset dispositions to be between $160 million and $220 million.
  • Some asset sales are already "in process."
 

SteelerGal

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Sea Six

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Marriott has sold Starwood Hotels, not time shares. One of my favorites was the Westin Key West, now a Margaritaville. Can't use my points there anymore.
 

DannyTS

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You are over thinking it. I believe you are interpreting this from the Q3 update call. It does not affect existing developed and sold properties. I read it as undeveloped land.
  • As a result of the ILG Acquisition, the company performed a comprehensive review of its Vacation Ownership property and equipment including undeveloped parcels, future phases of existing resorts, operating hotels, and other non-core assets, to determine the best strategic direction with respect to these assets. As a result of the review, the company currently expects proceeds from future asset dispositions to be between $160 million and $220 million.
  • Some asset sales are already "in process."
I am trying to find the quote from the Q3 earnings call you are referring to. I did not find the transcript but there is a recording on their website. The actual quote (7:15 of the call):
https://edge.media-server.com/mmc/p/pfhmotd6

http://ir.marriottvacationsworldwide.com/investor-relations

"As you know, earlier in the year we implemented our strategic review of our vacation ownership assets with the goal of disposing excess supply in certain locations. With the review now substantially complete we expect the disposition of these assets to generate cash proceeds between 160-220 million dollars over the next few years. It will begin with the assets that will have the highest yield; we already began the disposition process. We will keep you appraised of our progress."

As you can see it is more vague than the one you mentioned. To me excess supply means units not land but I hope you are right
 
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jmhpsu93

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There are two locations in Orlando adjacent to Lakeshore Reserve and Harbour Lake that were originally intended to be developed as additional phases for those resorts, and I believe MVC is actively pursuing to liquidate that land inventory.

Like Danny said, depends on what "assets" means but I would imagine trying to divest of specific resorts (or even phases) that are in the MVC trust or Sheraton flex trust would be a nightmare. With those liquidation costs, I doubt they would consider them high yield.

Then again, they could decide to sell the whole kit and caboodle tomorrow. :shrug:
 

DannyTS

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There are two locations in Orlando adjacent to Lakeshore Reserve and Harbour Lake that were originally intended to be developed as additional phases for those resorts, and I believe MVC is actively pursuing to liquidate that land inventory.

Like Danny said, depends on what "assets" means but I would imagine trying to divest of specific resorts (or even phases) that are in the MVC trust or Sheraton flex trust would be a nightmare. With those liquidation costs, I doubt they would consider them high yield.

Then again, they could decide to sell the whole kit and caboodle tomorrow. :shrug:
I assume that the lot next to Live Aqua Cancun is also up for sale
 

blondietink

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I assume that the lot next to Live Aqua Cancun is also up for sale

They own that big empty hole in the ground next to Live Aqua that we have been walking by for years?
 

DannyTS

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They own that big empty hole in the ground next to Live Aqua that we have been walking by for years?
my understanding is that they own that piece of land. It is not too big, probably more suitable for a boutique hotel.
 

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It will be interesting to see what happens if Marriott stops managing some of the Vistana properties. If they do, my guess is that the non Marriott members of the HOAs will have to fend for themselves...

George
 

chemteach

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I can see it now: "I went to a timeshare owner education seminar, and the salesman told me I should switch to the Flex program because my timeshare property is going to be sold to a different manager. What should I do?"

LOL

(I'm not making fun of the original post - I'm poking fun at timeshare salespeople who will use any tactic to try to get people to buy.)
 

VacationForever

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This is called over reacting and reading into something that is not there. Management of Vistana timeshare properties won't be sold.

Marriott makes 10% in management fees and will never want to let go of managing existing timeshare properties.

Selling land is a different matter. They will get out of yearly tax obligations by holding on to the land unless they develop the land which will cost them lots of money. Selling undeveloped land gets the money into the bank right away and make shareholders happy.
 
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GrayFal

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Marriott has stopped managing and taken their name off several properties but non since 2009 DC program. Paradise Island Beach Club was once a Marriott and two resorts in Hilton Head, Spicebush and Swallowtail. The HOA were not willing to upgrade the resorts to Marriott standards and on Hilton Head they started building their own resorts. I feel there might have been others but can’t recall.
 

DannyTS

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This is called over reacting and reading into something that is not there. Management of Vistana timeshare properties won't be sold.

Marriott makes 10% in management fees and will never want to let go of managing existing timeshare properties.
I agree with you, it does not make sense for Marriott to give away the hen that lays the golden eggs. And especially now that Sheraton is trying to improve the Sheraton brand, it would seem like a wrong step. I hope you are right. I had just seen people speculating on various FB pages.
 

JIMinNC

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I am trying to find the quote from the Q3 earnings call you are referring to. I did not find the transcript but there is a recording on their website. The actual quote (7:15 of the call):
https://edge.media-server.com/mmc/p/pfhmotd6

http://ir.marriottvacationsworldwide.com/investor-relations

"As you know, earlier in the year we implemented our strategic review of our vacation ownership assets with the goal of disposing excess supply in certain locations. With the review now substantially complete we expect the disposition of these assets to generate cash proceeds between 160-220 million dollars over the next few years. It will begin with the assets that will have the highest yield; we already began the disposition process. We will keep you appraised of our progress."

As you can see it is more vague than the one you mentioned. To me excess supply means units not land but I hope you are right

The text in the first bullet that @VacationForever posted was taken directly from the 3Q earnings press release that Marriott Vacations Worldwide issued. So that more specific terminology was officially from MVW. I would tend to agree that what they are talking about would seem to be excess land. Here is the link to that release:

http://ir.marriottvacationsworldwid...cations-worldwide-mvw-reports-third-quarter-0
 

dioxide45

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Marriott already sold the land that was undeveloped adjectives to Harbor Lake. There are also a number of other properties with undeveloped land; Lakeshore Reserve, Vistana Villages, Ko'Olina. Off hand I am not sure what other Vistana properties have undeveloped land just sitting there that they could liquidate. But there are several other Marriott properties with undeveloped land.

Selling this land really should have little impact on current owners, though there are some exceptions. At Lakeshore Reserve, more owners would help to spread out the maintance costs at the property which are quite high per unit week. More owners could help bring that down some. Though if they developed it, it would increase the crowding at the pools that may not be able to support the resort built out as was originally planned.
 

JIMinNC

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Off hand I am not sure what other Vistana properties have undeveloped land just sitting there that they could liquidate. But there are several other Marriott properties with undeveloped land.

The 2018 Marriott Vacations Worldwide 10-K lists the following properties with additional development potential. This does not include totally undeveloped land not associated with an existing resort.

Marriott's Canyon Villas: 213 units built; 39 potential
Marriott's Shadow Ridge: 569 units built; 430 potential
Marriott's Harbour Lake: 312 units built; 588 potential
Marriott's Lakeshore Reserve: 85 units built; 254 potential
Marriott's KoOlina Beach Club: 546 units built;202 potential
Marriott's Willow Ridge: 132 units built; 282 potential
Marriott's Grand Chateau: 656 units built; 224 potential
Marriott's Fairway Villas: 180 units built; 90 potential
Marriott's Frenchman's Cove: 155 units built; 65 potential
Sheraton Vistana Villages: 892 units built; 734 potential
Sheraton Kauai Resort: 66 units built; 60 potential
Sheraton Broadway Plantation: 342 units built; 160 potential
Westin Desert Willow: 220 units built; 80 potential
Westin Resort & Spa Cancun: 44 units built; 204 potential
Hyatt RC Bonita Springs: 96 units built; 243 potential
Hyatt RC Wild Oak Ranch: 120 units built; 168 potential
 

SueDonJ

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Marriott has stopped managing and taken their name off several properties but non since 2009 DC program. Paradise Island Beach Club was once a Marriott and two resorts in Hilton Head, Spicebush and Swallowtail. The HOA were not willing to upgrade the resorts to Marriott standards and on Hilton Head they started building their own resorts. I feel there might have been others but can’t recall.

Two of the original five buildings at the StreamSide (Vail, CO) property are no longer managed by Marriott. Birch, Douglas and Evergreen remain; Aspen and Cedar, no.

The governing docs stipulate the percentage of owners who need to vote in favor of separating from Marriott, OR, Marriott can sever the Management Agreement as long as they're in compliance with the stipulated severance terms. Not surprisingly it is a much easier process for Marriott to sever than for owners to sever.

If/when it happens the Marriott name comes off the buildings and all affiliation agreements end - i.e. any Bonvoy-related benefits, any Destination Club-related benefits including the DC-related II corporate account, the Marriott preference in II individual accounts, etc. If you continue to own a formerly-Marriott Week (assuming the resort contracts with a new management company,) that Week will no longer count towards any Marriott ownership status levels.

[ETA] Having said all that, I agree that the statements in this latest update call appear to refer to undeveloped land, and it's not unusual for Marriott to sell parcels from time to time.
 

SteelerGal

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I’m sure the land in CA has a nice lovely price tag.
 

controller1

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The 2018 Marriott Vacations Worldwide 10-K lists the following properties with additional development potential. This does not include totally undeveloped land not associated with an existing resort.
. . .
Sheraton Kauai Resort: 66 units built; 60 potential
. . .
Westin Resort & Spa Cancun: 44 units built; 204 potential
. . .

I believe those "potential" units shown on the two above are currently hotel rooms.
 

jmhpsu93

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I believe those "potential" units shown on the two above are currently hotel rooms.

And given those conversions are underway, likely the numbers are different today. We were at the Westin in July 2018 and they were in the midst of TS conversion.
 

JIMinNC

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I believe those "potential" units shown on the two above are currently hotel rooms.

Yes. Correct. That fact was actually footnoted in the 10-K. I just didn't include that in my post. So those two would not be potential real property divestitures, but represent potential unit additions to the portfolio.

Having said that, I wonder if they decide those hotels are "non-core assets"(which are assets they might sell according to their press release), could they still sell the hotel, but then for any inventory that had already been conveyed to one of their flex trusts, they would just replace that inventory with other inventory from other locations? That location would then cease to be bookable by flex owners, but the flex trusts would still be "whole".
 
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controller1

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Yes. Correct. That fact was actually footnoted in the 10-K. I just didn't include that in my post. So those two would not be potential real property divestitures, but represent potential unit additions to the portfolio.

Having said that, I wonder if they decide those hotels are "non-core assets"(which are assets they might sell according to their press release), could they still sell the hotel, but then for any inventory that had already been conveyed to one of their flex trusts, they would just replace that inventory with other inventory from other locations? That location would then cease to be bookable by flex owners, but the flex trusts would still be "whole".

I don't know about that. Since Vistana is no longer selling weeks at many properties and is only selling Flex points I would hate to be that one who purchased Flex points because I wanted to be an owner of Timeshare A only to have Timeshare A cease to be part of the Flex product.
 
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