Marriott/Vistana overlay

[dioxide45]

I don’t understand why Vistana made the CA properties non-mandatory. Does anyone know?

They did it because they wised up and realized people could buy cheap resale and still get the benefits of using StarOptions.

 

[bizaro86]

They did it because they wised up and realized people could buy cheap resale and still get the benefits of using StarOptions.

Exactly. I think their original plan was to make everyone pay SVN fees, then they realized it was more effective to use SVN access as a cudgel to get folks to pay tens of thousands of dollars upfront vs collecting the small fee every year...

 

[SteelerGal]

Actually it hurt them. By not having SO transfer nor aggressively buying back, Westin Deserts w/ some of the highest MFs are selling for a buck.

 

[VacationForever]

Actually it hurt them. By not having SO transfer nor aggressively buying back, Westin Deserts w/ some of the highest MFs are selling for a buck.

Marriott's Desert Springs I MF is higher than Westin Desert Springs.

 

[dioxide45]

Actually it hurt them. By not having SO transfer nor aggressively buying back, Westin Deserts w/ some of the highest MFs are selling for a buck.

That doesn't hurt Vistana. They made their money upfront and the resale price means little. Though it can help them buy stuff cheap or offer to take it back for free. It did of course hurt those that bought there from Vistana.

 

[TravelTime]

Keeping the 3 (Hyatt, Marriott, Vistana) and many subsets (Sheraton, Westin, Nanea, Aventura) programs separate lets them sell points many times over.

As usual, VacationForever added a strategic point of view with a long term perspective. I agree with VacationForever's assessment. MVC could easily let resale owners enroll for "cheap" for short term gain but that seems like a long term mistake.

 

[TravelTime]

If I were MVC/Vistana executive, I would vote for NO for low fee enrollment based on one fact: what tugbbbs proposes always hurts the company financially. The notorious one: Don't buy direct!!!
If they need more inventory, they can always pick up from ROFR. Even hybrid package (MVC)/ Retro (Vistana) is better idea than low fee enrollment, IMHO.

I totally agree!

 

[mjm1]

As usual, VacationForever added a strategic point of view with a long term perspective. I agree with VacationForever's assessment. MVC could easily let resale owners enroll for "cheap" for short term gain but that seems like a long term mistake.

Based on how MVC allowed Marriott weeks owners to enroll in the DC program for a small fee ($595 to $1,995 IIRC depending on developer or resale purchase and number of units) in order to get a quick potential inventory of units in the program in as many resorts as possible and to give current owners exposure to the benefits of the DC program, I disagree that it was a short term gain. Many owners enrolled and have bought additional points after using the DC system. The program has been a success and I think they would have a similar view for Vistana owners. The enrollment fee may increase, but the concept would be similar. Time will tell.

Best regards.

Mike

 

[SteelerGal]

Marriott's Desert Springs I MF is higher than Westin Desert Springs.

It’s connected to the hotel and can use its amenities. For many, it’s important.

 

[SteelerGal]

Based on how MVC allowed Marriott weeks owners to enroll in the DC program for a small fee ($595 to $1,995 IIRC depending on developer or resale purchase and number of units) in order to get a quick potential inventory of units in the program in as many resorts as possible and to give current owners exposure to the benefits of the DC program, I disagree that it was a short term gain. Many owners enrolled and have bought additional points after using the DC system. The program has been a success and I think they would have a similar view for Vistana owners. The enrollment fee may increase, but the concept would be similar. Time will tell.

Best regards.

Mike

I agree. MVC sees the possibilities and will make sure the Flex programs are re marketed to get more ppl to buy into the program.

 

[TravelTime]

Based on how MVC allowed Marriott weeks owners to enroll in the DC program for a small fee ($595 to $1,995 IIRC depending on developer or resale purchase and number of units) in order to get a quick potential inventory of units in the program in as many resorts as possible and to give current owners exposure to the benefits of the DC program, I disagree that it was a short term gain. Many owners enrolled and have bought additional points after using the DC system. The program has been a success and I think they would have a similar view for Vistana owners. The enrollment fee may increase, but the concept would be similar. Time will tell.

Best regards.

Mike

I would assume if allowing people to enroll legacy weeks for little to nothing was profitable, then they would have allowed post-2010 weeks to be enrolled. I suspect there were legal reasons for allowing pre-2010 owners to enroll at a cheap - almost free - price. If there are legal reasons to do it again, then MVC has no choice. However, if they are doing it to make a short term profit, I think it is not a strategic move. While people think CEOs only care about sales and their own bottom line, and this is often true, they also care about their reputation and their legacy. Remember, these guys and gals already have enough money so then other factors tend to become more important. A huge driver for CEOs and company founders is their legacy. Creating a short term easy gain is not going to create a legacy. In fact, people will dismiss it as easy and that will make the CEO look bad, even if it fills his/her pockets with a short term gain.

 

[dioxide45]

I would assume if allowing people to enroll legacy weeks for little to nothing was profitable, then they would have allowed post-2010 weeks to be enrolled. I suspect there were legal reasons for allowing pre-2010 owners to enroll at a cheap - almost free - price.

I don't think there were legal reasons preventing them from allowing enrollment of post 6/2020 resale weeks. I think it was simply practical in order to protect their developer sold DC points product. Who would pay $10 a point (price in 2010) for DC points when you could buy a cheap resale and get the same thing. Protecting the product is also why they have such a high initiation fee to enroll resale points.

 

[TravelTime]

I don't think there were legal reasons preventing them from allowing enrollment of post 6/2020 resale weeks. I think it was simply practical in order to protect their developer sold DC points product. Who would pay $10 a point (price in 2010) for DC points when you could buy a cheap resale and get the same thing. Protecting the product is also why they have such a high initiation fee to enroll resale points.

That is not what I said. I think it could have been the opposite. There might have been legal or liability reasons for allowing pre-2010 weeks to be enrolled cheaply. I suspect they did not allow post-2010 weeks to get enrolled cheaply because it is a bad strategic move.

 

[dioxide45]

That is not what I said. I think it could have been the opposite. There might have been legal or liability reasons for allowing pre-2010 weeks to be enrolled cheaply. I suspect they did not allow post-2010 weeks to get enrolled cheaply because it is a bad strategic move.

Okay, sorry. I read it wrong and thought you said there must have been legal reasons for not allowing post 2010 weeks to enroll. I just woke up, forgive me

I don't think there were legal reasons behind it at all. With the early DC program, Marriott needed inventory. Now they could have perhaps blocked resale owners from enrolling. I don't think there was anything that could have stopped them. The same legalities that would have stopped them should have also stopped them from charging a lot more to do it. I think it was just the business decision at the time.

 

[TravelTime]

Okay, sorry. I read it wrong and thought you said there must have been legal reasons for not allowing post 2010 weeks to enroll. I just woke up, forgive me

I don't think there were legal reasons behind it at all. With the early DC program, Marriott needed inventory. Now they could have perhaps blocked resale owners from enrolling. I don't think there was anything that could have stopped them. The same legalities that would have stopped them should have also stopped them from charging a lot more to do it. I think it was just the business decision at the time.

Okay, then for what MVC needed in 2010 to fund the trust, it made strategic business sense to grandfather in existing owners. My real point is I do not think it is strategic to allow owners to enroll cheaply for a short term financial gain. I think they need a strategic business reason to do so.

 

[dioxide45]

Okay, then for what MVC needed in 2010 to fund the trust, it made strategic business sense to grandfather in existing owners. My real point is I do not think it is strategic to allow owners to enroll cheaply for a short term financial gain. I think they need a strategic business reason to do so.

If they allowed those post 6/2010 weeks to enroll, then it made them easier to sell developer trust points. I know many resale weeks owners that added points to their ownership. By not allowing them to enroll, it would have disenfranchised them. They may not have been willing to buy points to enroll the weeks, but just selling them new points because they were already part of the program was probably a lot easier.

It also could be that someone bought a resale garden view week and really wanted to stay in ocean front. The sale pitch was that you could simply add 1,000 Vacation Club Point and you can now book an ocean front. We know that it perhaps wasn't possible in practice at the time, but that was the pitch.

 

[vacationtime1]

I agree that it made strategic business sense to grandfather in existing (i.e. pre-6/2010) owners at a modest price. Marriott gained by populating the DC trust with inventory.

What I didn't understand (even though I benefited from it) was the decision to later lower the price to enroll pre-2010 units. We enrolled our units about three years ago virtually for free (we had to sit through a sales presentation). Perhaps Marriott still needed inventory, but it seemed to me that they slighted the owners who paid $595/$1,995 to enroll units.

I find this discussion fascinating because we are sitting on a couple of prime units (WKORV-OF and WKV plat plus); what will Marriott do to incentivize me to enroll these high value units?

 

[GregT]

I would assume if allowing people to enroll legacy weeks for little to nothing was profitable, then they would have allowed post-2010 weeks to be enrolled. I suspect there were legal reasons for allowing pre-2010 owners to enroll at a cheap - almost free - price. If there are legal reasons to do it again, then MVC has no choice. However, if they are doing it to make a short term profit, I think it is not a strategic move. While people think CEOs only care about sales and their own bottom line, and this is often true, they also care about their reputation and their legacy. Remember, these guys and gals already have enough money so then other factors tend to become more important. A huge driver for CEOs and company founders is their legacy. Creating a short term easy gain is not going to create a legacy. In fact, people will dismiss it as easy and that will make the CEO look bad, even if it fills his/her pockets with a short term gain.

They debated whether or not to allow the existing owners to enroll, but decided to do so for perceived legal protection, and also because they needed that inventory to be available to fill point reservations. Plus they created an immediate purchaser base because the owners would need more points to be able to effectively utilize the system. They periodically offer post June 2010 resales to be enrolled with the purchase of points (similar to the requalification of Starwood weeks).

Long term, they need to keep selling points and I believe that Vistana owners are the next group that Marriott views as an attractive target customer. I'm sure they have studied how many Marriott owners are also Starwood owners and have an understanding of how many genuinely new prospects exist.

We will see if they offer a simple enrollment fee for Vistana weeks, or if it requires a purchase of Marriott Trust Points (or some third option).

Best,

Greg

 

[TravelTime]

If they allowed those post 6/2010 weeks to enroll, then it made them easier to sell developer trust points. I know many resale weeks owners that added points to their ownership. By not allowing them to enroll, it would have disenfranchised them. They may not have been willing to buy points to enroll the weeks, but just selling them new points because they were already part of the program was probably a lot easier.

It also could be that someone bought a resale garden view week and really wanted to stay in ocean front. The sale pitch was that you could simply add 1,000 Vacation Club Point and you can now book an ocean front. We know that it perhaps wasn't possible in practice at the time, but that was the pitch.

It is super expensive to enroll post-2010 weeks. I enrolled two of them for what I thought was a bargain: approx $23,000 including the purchase of the second week. Most of the offers are more expensive than this. Usually at least 3000 points at $11-$12 per point for 1 week.

I think it is more strategic for MVC to keep enrollment of weeks into DPs as expensive as possible.

 

[GregT]

I agree that it made strategic business sense to grandfather in existing (i.e. pre-6/2010) owners at a modest price. Marriott gained by populating the DC trust with inventory.

What I didn't understand (even though I benefited from it) was the decision to later lower the price to enroll pre-2010 units. We enrolled our units about three years ago virtually for free (we had to sit through a sales presentation). Perhaps Marriott still needed inventory, but it seemed to me that they slighted the owners who paid $595/$1,995 to enroll units.

I find this discussion fascinating because we are sitting on a couple of prime units (WKORV-OF and WKV plat plus); what will Marriott do to incentivize me to enroll these high value units?

I think they lowered the price because it is more potential customers for point sales.

I do think you will find an attractive option to enroll your WKORV weeks because those are the type of weeks that Marriott expects will always be in high demand. Theoretically, WKORV is already accessible to me with StarOptions, but the reality is that high demand seasons are not. Marriott wants to structure the overlay in such a way that WKORV is always accessible with Marriott Points no matter the season. In the Marriott system, even the most highly demanded weeks have availability (right at inventory release) and the overlay needs to continue this for the most highly demanded Westin weeks (that are currently incredibly scarce 8 months out).

If Marriott simply offers an exchange ratio of [2,500] Marriott points for [81,000] StarOptions but leaves the reservation system/method intact, then it won't improve the reservations experience and people won't use it as much. I think the more successful approach would be to find a way to bring the Vistana week into the Marriott system and give each week a points value, meaning there will be winners and losers. You will be a winner in that system. I can't see you exchanging your WKORV week for [5,500] Marriott points, which would be the value if it was based on a fixed Marriott:StarOption conversion ratio like the 2,500/81,000 that I suggested above. However, if they treat WKORV like Maui Ocean Club, and you are receiving [7,500] Marriott Points for your week, then you may be willing to play in the Marriott system because there is alot you can do with 7,500 points. But that's too high a ratio to broadly apply to the other StarOptions weeks, which would overweight Vistana owners versus Marriott owners. We will see and it will be interesting.

Best,

Greg

 

[CalGalTraveler]

With Sheraton Flex enrollment the owner loses mandatory status thus affecting resale value. If Marriott uses that same policy that will be a deal breaker. If we can enroll and keep mandatory then we would consider.

 

[mjm1]

With Sheraton Flex enrollment the owner loses mandatory status thus affecting resale value. If Marriott uses that same policy that will be a deal breaker. If we can enroll and keep mandatory then we would consider.

I believe those two issues are mutually exclusive. An owner who enrolls there unit does not have any impact on the status or use of the unit that it current has. The DC program just provides an alternative use and potential benefit.

Best regards.

Mike

 

[CalGalTraveler]

I believe those two issues are mutually exclusive. An owner who enrolls there unit does not have any impact on the status or use of the unit that it current has. The DC program just provides an alternative use and potential benefit.

Best regards.

Mike

That's because Marriott Weeks don't have a mandatory benefit that can be grandfathered to resale buyers. When a buyer purchases a Marriott week resale (even if enrolled by the seller) the buyer cannot trade into the points system without enrolling/paying $. With Vistana mandatory your resale buyer automatically gets the benefit of trading via StarOptions into other Vistana resorts.

The resale value will be impacted if the mandatory designation is removed from the week. That's why enrollment is a deal breaker if Marriott removes it. Marriott hasn't had to honor this type of arrangement before. The developers hate mandatory and would have removed it long ago but it is somehow deeded into the properties. This is something I would not give up easily. I hope they honor it.

 

[mjm1]

That's because Marriott Weeks don't have a mandatory benefit that can be grandfathered to resale buyers. When you purchase a Marriott week resale you cannot trade into the points system without enrolling/paying $. With Vistana mandatory your resale buyer automatically gets the benefit of trading via StarOptions into other Vistana resorts. The resale value will be impacted if the mandatory designation is removed from the week. That's why enrollment is a deal breaker if Marriott removes it. Marriott hasn't had to honor this type of arrangement before. I hope they honor it.

I understand that. I don’t see MVC changing how Vistana works as that would disenfranchise Vistana owners, which is the opposite of benefiting them long term. They bought ILG et al to generate an increase in value not destroy a loyal customer base. Enrolling a unit in the DC program if available would only provide more options/flexibility to Vistana owners.

Best regards.

Mike

 

[CalGalTraveler]

I hope you are right. However Marriott is a for profit enterprise. I suspect that they will try it because enrollment is optional and Flex does this today. I wouldn't be surprised if they bury it in the fine print so you don't know you are giving up mandatory property rights.