Marriott Vacations Worldwide (VAC) purchase of Interval Leisure Group (ILG) discussion!

[Ralph Sir Edward]

This is the big problem with Flex and why it a lot of people don't like it. It is good for booking properties in the trust, but you can't go outside of that for peak season weeks since those are usually booked by owners long before the eight month mark. Vistana also messed up and fragmented their trusts, which makes it harder to bring it all back together.

This is the inherent problem with most points system. The rights of week owners versus points owners. If I am paying a premium (both in purchase and maintenance fees) for a premium week, why shouldn't I get first right to book? Am I not paying for that privilege?

The Marriott DC system takes the opposite viewpoint. There is no inherent right to book first (before the point owners get to book) for existing weeks owners, merely an opaque division of inventory between the two. This the best possible system for a points owner, but not for a existing week owner.

 

[VacationForever]

This is the inherent problem with most points system. The rights of week owners versus points owners. If I am paying a premium (both in purchase and maintenance fees) for a premium week, why shouldn't I get first right to book? Am I not paying for that privilege?

The Marriott DC system takes the opposite viewpoint. There is no inherent right to book first (before the point owners get to book) for existing weeks owners, merely an opaque division of inventory between the two. This the best possible system for a points owner, but not for a existing week owner.

But with the opaque division of inventory, rights and priority of booking are not taken away from an existing week owner to book at what they own. I am not understanding the last sentence.

 

[SunandFun83]

I am wondering aloud whether this will pass the anti-trust scrutiny.

How can this be anti-trust when Marriott hotels was allowed to buy Starwood. I think the total number of timeshare rooms is tiny compared to hotel rooms. VRBO and Airbnb break a whole new world of vacation competition.

 

[Ralph Sir Edward]

But with the opaque division of inventory, rights and priority of booking are not taken away from an existing week owner to book at what they own. I am not understanding the last sentence.

To be more explicit. There are X weeks in a particular season. Furthermore, in every season, some weeks are in higher demand than others. How are the weeks divided between weeks owners (as a group) and points owners (as a group)? How does the splitting occur? Totally unknown. Does the DC trust "cream" the best weeks for the trust use? There is an inherent conflict between allocation for points owners and weeks owners for allocation of inventory.

I will give my real-life example. I was a single week Red (Platinum) owner of a Royal Palms. (Purchased resale, after 6/2010). I also has been given a White (hurricane/mud season) pre 6/2010, which I had enrolled in the Trust. In the particular case, I could book in May (low season) with the points from hurricane season. (Points system quirk.)

So at the 12 month window (no 13th month for a single Platinum week owner), I tried to get in. I missed the window by around 5 seconds (early) and couldn't get in for another 40 minutes. At which time the only Platinum season weeks left were in August. (I had been trying for Jan/Feb). 3 weeks later, my brother (a co-owner) called Marriott about the available choices. The response was most interesting. I could use my Trust points for the year in question and the next year can get the exact (high demand) week I wanted. No problem, they had lots of those unallocated weeks for my resort. . . (But no weeks inventory. . .)

So why could I not get it with my weeks but could get it with points? Well . . . . how is the inventory allocated? Clearly the DC Trust got the weeks before I could at 40 minutes in.

It was obvious that as a single week owner, I would always be at the last of the line. (II trade? More money for a maybe trade, to get what I couldn't get in the first place as an owner? No, not acceptable.)

Therefore, I sold back to Marriott, for almost enough money to buy at Bay Club in Hawaii. In the HGVC world, owning something means you get first crack at your ownership inventory, only competing with those owners who have the same ownership you do. Not being last in line. . .

 

[GregT]

To be more explicit. There are X weeks in a particular season. Furthermore, in every season, some weeks are in higher demand than others. How are the weeks divided between weeks owners (as a group) and points owners (as a group)? How does the splitting occur? Totally unknown. Does the DC trust "cream" the best weeks for the trust use? There is an inherent conflict between allocation for points owners and weeks owners for allocation of inventory.

I will give my real-life example. I was a single week Red (Platinum) owner of a Royal Palms. (Purchased resale, after 6/2010). I also has been given a White (hurricane/mud season) pre 6/2010, which I had enrolled in the Trust. In the particular case, I could book in May (low season) with the points from hurricane season. (Points system quirk.)

So at the 12 month window (no 13th month for a single Platinum week owner), I tried to get in. I missed the window by around 5 seconds (early) and couldn't get in for another 40 minutes. At which time the only Platinum season weeks left were in August. (I had been trying for Jan/Feb). 3 weeks later, my brother (a co-owner) called Marriott about the available choices. The response was most interesting. I could use my Trust points for the year in question and the next year can get the exact (high demand) week I wanted. No problem, they had lots of those unallocated weeks for my resort. . . (But no weeks inventory. . .)

So why could I not get it with my weeks but could get it with points? Well . . . . how is the inventory allocated? Clearly the DC Trust got the weeks before I could at 40 minutes in.

It was obvious that as a single week owner, I would always be at the last of the line. (II trade? More money for a maybe trade, to get what I couldn't get in the first place as an owner? No, not acceptable.)

Therefore, I sold back to Marriott, for almost enough money to buy at Bay Club in Hawaii. In the HGVC world, owning something means you get first crack at your ownership inventory, only competing with those owners who have the same ownership you do. Not being last in line. . .

What I believe happened in your example is that Marriott will hold back a certain percentage of the week’s to meet their projections for owners who will not be booking in owned week, and will instead Elect Points (or MRPs).

They will do this evenly across all weeks in the season, and not cherry pick the prime weeks. In your example, it would appear that the week owners had fully booked the available week reservations, but no point owners had yet chosen to spend their points on the supply that was available. Please note, they’re not holding back weeks specifically for point Reservations, they’re holding back weeks for the expected election of points by week owners.

It is a funny system, and I also prefer Hilton’s approach, however I do believe Marriotts does work and is fair. Remember they are are balancing the number of week owners that don’t book their week but elect points, and not the anticipated supply needed from people using their points on the remaining available weeks.

Best,

Greg

 

[Ralph Sir Edward]

But which weeks? The allocation between systems is opaque. An owner has no way of knowing, either way.

Dioxide45 pointed out that in the Vistana system, the owners of weeks get first choice to reserve the prime weeks, leaving their points system with the "leftovers". That is precisely correct. I merely pointed out that Marriott does that internally, and nobody on the outside can see how the choices are made. Maybe perfectly evenly, maybe not. But it is clear that weeks owners in the Marriott world do not have any preference over the points system owners, and that both group are competing for the same properties. I perceive that as a "step down" in weeks ownership. Others may not.

I expect that any merged system, or super system, will maintain the existing Marriott method of dividing inventory. Whatever that actually is. . . .

 

[Dean]

To be more explicit. There are X weeks in a particular season. Furthermore, in every season, some weeks are in higher demand than others. How are the weeks divided between weeks owners (as a group) and points owners (as a group)? How does the splitting occur? Totally unknown. Does the DC trust "cream" the best weeks for the trust use? There is an inherent conflict between allocation for points owners and weeks owners for allocation of inventory.

I will give my real-life example. I was a single week Red (Platinum) owner of a Royal Palms. (Purchased resale, after 6/2010). I also has been given a White (hurricane/mud season) pre 6/2010, which I had enrolled in the Trust. In the particular case, I could book in May (low season) with the points from hurricane season. (Points system quirk.)

So at the 12 month window (no 13th month for a single Platinum week owner), I tried to get in. I missed the window by around 5 seconds (early) and couldn't get in for another 40 minutes. At which time the only Platinum season weeks left were in August. (I had been trying for Jan/Feb). 3 weeks later, my brother (a co-owner) called Marriott about the available choices. The response was most interesting. I could use my Trust points for the year in question and the next year can get the exact (high demand) week I wanted. No problem, they had lots of those unallocated weeks for my resort. . . (But no weeks inventory. . .)

So why could I not get it with my weeks but could get it with points? Well . . . . how is the inventory allocated? Clearly the DC Trust got the weeks before I could at 40 minutes in.

It was obvious that as a single week owner, I would always be at the last of the line. (II trade? More money for a maybe trade, to get what I couldn't get in the first place as an owner? No, not acceptable.)

Therefore, I sold back to Marriott, for almost enough money to buy at Bay Club in Hawaii. In the HGVC world, owning something means you get first crack at your ownership inventory, only competing with those owners who have the same ownership you do. Not being last in line. . .

I don't think it's as opaque as you do, it's simply about understanding the system. Basically resorts are either all weeks, all trust or a combination. It's the ones that have a combination of both (most resorts currently) that are in question. Basically a weeks owner can only reserve the rooms that are actually in the weeks system and a trust owner (initially) can only do the same. The enrolled owners can reserve trust inventory to the extent those trust owners have crossed over and the trust owners can only reserve the weeks inventory that has been exchanged for points by the owner (which may be Marriott themselves in some situations). Thus any weeks at your resort that were not available were either not available because those weeks were in the trust itself (little if any at RP) or where other owners reserved a week which they may have later converted to points. RP has a broad RED season, for others reading that may be new, inventory is released for a full weekend from the first check in date for that weekend which is Friday for RP. So Sunday is available from 13 or 12 months plus 2 days for example, some start on Thursday.

 

[Ralph Sir Edward]

Dean, I fully understand the system. Let me put it with the finest possible point, with a hypothetical situation.

I own at Marriott timeshare "X". Everybody else has sold their weeks back to Marriott (or converted them to DC points).

But I'm an old coot and want my week. I own one week.

Great, I can reserve my week from the pool of week owner's weeks. . .
Except. . . There's only one week in the pool. (Because there is only one owner with one week. . . )

Which week is it?

Marriott has followed the rules, legally. But in reality, I have no choice of weeks. Marriott chooses. And I don't even know how they chose. . .

 

[dougp26364]

Marriott accounted for this situation by making weeks and trust inventory very fluid. They maintained the right to move inventory BETWEEN the pools of availability. They also set up a system with II where they can capture deposited weeks by exchanging like for like, just so they can get the inventory they need for internal reservations.

It is a complicated system made worse for owners when salesmen either don’t fully comprehend the system or stretch the truth to scare someone into spending more $ than is necessary

 

[GregT]

Dean, I fully understand the system. Let me put it with the finest possible point, with a hypothetical situation.

I own at Marriott timeshare "X". Everybody else has sold their weeks back to Marriott (or converted them to DC points).

But I'm an old coot and want my week. I own one week.

Great, I can reserve my week from the pool of week owner's weeks. . .
Except. . . There's only one week in the pool. (Because there is only one owner with one week. . . )

Which week is it?

Marriott has followed the rules, legally. But in reality, I have no choice of weeks. Marriott chooses. And I don't even know how they chose. . .

This is a perfect hypothetical -- as I understand it, Marriott would have to choose between making the week available to you (who owns the only week) or guessing whether or not you plan to either Elect Points for your week or redeem it for MRPs, in which case they would want to hold back the week to balance these elections. If they guess wrong, then there is an imbalance in the system, and I suspect we experience imbalances that we do not recognize.

I do prefer the HGVC system -- either it is there or it is not, and I can understand when it is not.

Best,

Greg

 

[CalGalTraveler]

But which weeks? The allocation between systems is opaque. An owner has no way of knowing, either way.

Dioxide45 pointed out that in the Vistana system, the owners of weeks get first choice to reserve the prime weeks, leaving their points system with the "leftovers". That is precisely correct. I merely pointed out that Marriott does that internally, and nobody on the outside can see how the choices are made. Maybe perfectly evenly, maybe not. But it is clear that weeks owners in the Marriott world do not have any preference over the points system owners, and that both group are competing for the same properties. I perceive that as a "step down" in weeks ownership. Others may not.

I expect that any merged system, or super system, will maintain the existing Marriott method of dividing inventory. Whatever that actually is. . . .

HGVC also has a similar method of enabling owners priority reservations to reserve their week, then whatever is left over is given to points. What is also different is that points are automatically assigned to the units at Hilton and enrolled upon sale - $599 enrollment is mandatory. My sense is that because a points system did not exist originally with Marriott, they wanted to monetize enrollment and then followed the industry with trust points.

IMO adding a points trading assignment to weeks similar to Vistana and Hilton makes sense. However a pure points trust system overly-complicates the Marriott system and causes such reservation system ideosynchracies and potential for devaluation.

They should have kept it simple like HGVC but they got greedy with the trust points to make up for the fact that they could not force all weeks owners to enroll given the original design of the weeks program. At Hilton enrollment and points are designed from the ground up so not an issue.

The reason some systems went to points trusts was to avoid defaults and foreclosures on silver season weeks at certain resorts. In the HGVC system, trading is easy and fluid so that even a silver season owner can get some value at another resort during prime season by saving/borrowing points or shortening their week. This reduces defaults and need to deposit such units into a trust points system to keep HOAs solvent.

 

[frank808]

The reason some systems went to points trusts was to avoid defaults and foreclosures on silver season weeks at certain resorts. In the HGVC system, trading is easy and fluid so that even a silver season owner can get some value at another resort during prime season by saving/borrowing points or shortening their week. This reduces defaults and need to deposit such units into a trust points system to keep HOAs solvent.

Also lots of bronze weeks.

Sent from my SM-T217S using Tapatalk

 

[Dean]

Dean, I fully understand the system. Let me put it with the finest possible point, with a hypothetical situation.

I own at Marriott timeshare "X". Everybody else has sold their weeks back to Marriott (or converted them to DC points).

But I'm an old coot and want my week. I own one week.

Great, I can reserve my week from the pool of week owner's weeks. . .
Except. . . There's only one week in the pool. (Because there is only one owner with one week. . . )

Which week is it?

Marriott has followed the rules, legally. But in reality, I have no choice of weeks. Marriott chooses. And I don't even know how they chose. . .

Maybe you do understand it, I wasn't sure where you were. The very fact you questioned it made we wonder because the system is working as it should. This is the nature of both a points system and a floating weeks system. You are indeed competing against other owners. At the resort in question (RP) against other red week owners which is a fair chunk of members given how broad the red season is there. But the demand across those red weeks are not equal so in reality it's more difficult to reserve some weeks over others and more people want those more difficult to reserve weeks. This is inherent to the floating weeks system. The reason you couldn't get the week you wanted was because others had reserved it, not because they were in the trust or Marriott had grabbed them up inappropriately. Now they may end up in the trust because other owners take points and thus Trust owners will reserve weeks during that season as well but in reality this could help a weeks owner in some situations. OF course the owner could trade those points for cruises or similar and then Marriott could step in and pick up rental weeks and I don't know how they do that. For DVC they are not aggressive in doing so, I don't know how aggressively Marriott does so. They still are supposed to follow the same reservation rules but if they're aggressive in doing so they have an inherent advantage over you or I.

IMO the trust is even worse in this regard because there's not home resort or other priority one can get into other than the VIP system. In general I do prefer the home resort priority type of points system but each side is good or bad depending.

As for your extreme example and as I understand it, the only week available would be the one you are deeded to. Such is another risk of a floating week system, that it may change at some point so one has less or different options. And it has changed over the years, the 13 month reservation option came out of the HHI experience. That too will likely change at some point.

I think Hilton is similar to DVC in that they have a home resort priority. It's been years since I looked at Hyatt but IIRC it was similar to the DC points in that you owned a week and traded for points.

 

[Fairwinds]

I’d like to be able to manage timeshare weeks, points and II deposits and trades from one MVC log in. Combine the best features of each website.

 

[youppi]

Hybrid system like HGVC, VSE, HRC are the best if you own a peak season at the resort with the lowest MF to get the highest point/$ ratio. Otherwise it's bad (think Harborside in low season vs Kierland in peak season). A pure trust point with 100% of the inventory is more fair where everybody pay the same MF per points and all have the same chance to book any resort except if they add the stupid loyalty level where people with more points (rich people) have advantage of booking earlier, get size upgrade and room selection. The problem with most trust points is they have been created to late (too many weeks have been sold, most best/prime weeks have been sold in the weeks system). The MF per point is too high because there is almost only low seasons weeks (low points weeks) in the trust and MF is the same for any weeks at a given resort.

 

[BigMac]

Interesting article by Motley Fool on the amount of debt VAC will end up with from the ILG purchase through the assumption of ILG's debt and debt raised to make the aquisition.
https://finance.yahoo.com/news/hitc...n-214000632.html?soc_src=community&soc_trk=ma

 

[AJCts411]

Interesting article by Motley Fool on the amount of debt VAC will end up with from the ILG purchase through the assumption of ILG's debt and debt raised to make the aquisition.
https://finance.yahoo.com/news/hitc...n-214000632.html?soc_src=community&soc_trk=ma

Interesting. The article uncovers, a higher debt to equity ratio, and "focus will be on debt reduction". So then are we to expect more focus on increasing cash flow...higher fees...and less focus on capital expenditures... new projects, proprieties, ROFR buys?

 

[GregT]

Interesting. The article uncovers, a higher debt to equity ratio, and "focus will be on debt reduction". So then are we to expect more focus on increasing cash flow...higher fees...and less focus on capital expenditures... new projects, proprieties, ROFR buys?

Yes, somewhere on this thread (or one of the others), we speculated that there will be less ROFR activity and that Marriott will be content with their $3/point junk fee when points trade hands. This will (IMO) cause further pressure on Trust Point resale pricing - and $2/point may become the new target price point to pass ROFR.

Best,

Greg

 

[Tn1911]

Will we have access to all Westin and Sheratons resorts ???

 

[VacationForever]

You are asking the question 2 to 3 years too soon.

 

[VacationForever]

Link to the thread that the discussion has been taking place:

https://tugbbs.com/forums/index.php...interval-leisure-group-ilg-discussion.273384/

[Threads merged.]

 

[dougp26364]

Probably, maybe, it could happen. IOW, time will tell.

 

[SeaDoc]

Will we have access to all Westin and Sheratons resorts ???

Doubt it. They will all operate separately as they do today. Time may change that, but don't expect any changes in the short term...

Sent from my SM-N950U using Tapatalk

 

[MALC9990]

As already stated, Time will Tell. However, I would like to think that there would be the option to book via D.C. points in some way and also improved opportunities via II exchanges.

 

[dougp26364]

Doubt it. They will all operate separately as they do today. Time may change that, but don't expect any changes in the short term...

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I’m curious about this thought. It seems to me that, as other systems have merged, all resorts have been folded into the availability pool. DRI has probably been the most active in purchasing and merging systems. I can’t think of any others off the top of my head. At any rate I don’t see as much value if MVW can’t merge the inventory of both stystems. It does seem to me that it has taken DRI years for their members to have reasonable access into new resorts purchased/merged by DRI.

While I hope they do as there are a couple of Hyatt locations we’d like access too, I’m not holding my breath as to a timeframe. If they merge the inventory great. If they don’t it’s no big loss. At least it’s not for us at this point in our lives.