VAC/ILG shareholder activism speculation [THREAD CLOSED]

[VacationForever]

I know that. But, how do you explain the Marriott free week enrollments and Starwood allowing owners from resorts they bought to become VSN owners?

Marriott built a brand new internal trading / booking system, aka the "Trust". They needed to fund the "Trust" and hence they allowed existing owners (pre June 20 2010) to enroll so that they could help fill up the "Trust" with inventory. It was for a small fee initially and later on free for some if they went to an owners' update. Marriott needed the inventory and hence they allowed pre-June 2010 owners to enroll.

I am not understanding what you meant by Starwood allowing owners from resorts they bought to become VSN owners. If Marriott were to buy ILG, they will likely need to do something about the fragmented Vistana system - voluntary, mandatory, Sheraton Flex, Aventuras, St John CV and SB... They are smarter than me and I do not have a clue how to transform it into a consolidated/coherent Vistana system. But there is no way they will just allow Marriott owners to internally book Hyatt and Vistana inventory, and vice versa. There is no money in it for them.

 

[dioxide45]

I know that. But, how do you explain the Marriott free week enrollments and Starwood allowing owners from resorts they bought to become VSN owners?

Marriott doesn't offer free week enrollments. Initially they were $595 up to $1995. They had a lot of owners enroll their weeks under that fee structure until they move to a flat $2395 enrollment fee. They are only now offering free enrollments for the last hold outs as long as they offer up their time to sit through a presentation. Vistana does not allow anyone buying resale to become members of VSN unless they they buy at a mandatory resort. If Vistana could, they would do away with mandatory resorts, but they wrote the the governing documents for those properties in such a way that they are stuck with them. Anyone buying direct from Vistana is in VSN. You can re-qualify a voluntary ownership if you pay big bucks to buy more from the developer. Marriott has offered similar at different times. But Marriott is all about fees for enrollment and if they allow cross use between programs, expect to have to pay for it.

 

[tschwa2]

I know that. But, how do you explain the Marriott free week enrollments and Starwood allowing owners from resorts they bought to become VSN owners?

Marriott's free week enrollment is only for owners of pre-2010 weeks who have refused enrollment multiple times with continually improving offers. Marriott has there own reasons for trying to get them to enroll which may include trying to further erode Marriott availability in II or just wanting addition fees in the form of the annual fee paid to them. By making Marriott inventory more scarce through II, they increase the value of their product DC points. By allowing too many people to enroll for peanuts they would significantly decrease the value of DC points sold through Marriott.

Which resorts has Vistana/Starwood allowed to enroll in the points program?

 

[VacationForever]

Marriott's free week enrollment is only for owners of pre-2010 weeks who have refused enrollment multiple times with continually improving offers. Marriott has there own reasons for trying to get them to enroll which may include trying to further erode Marriott availability in II or just wanting addition fees in the form of the annual fee paid to them. By making Marriott inventory more scarce through II, they increase the value of their product DC points. By allowing too many people to enroll for peanuts they would significantly decrease the value of DC points sold through Marriott.

Which resorts has Vistana/Starwood allowed to enroll in the points program?

There are 5 resorts that were sold as "mandatory" and because it is written into the governing documents, they retain the right when resold. Many times Vistana sales people have said unashamedly that if Starwood were to have done it again, they would never have made any resort mandatory as it kills of the revenue for new developer sales.

 

[BJRSanDiego]

I had a discussion with a Marriott GM earlier this week and (s)he stated that (s)he was on a telecon with Steve Weisz who said that there was no truth to the rumor and that it is all untrue. So, either it is nothing but a rumor or Marriott wants to keep everyone guessing what is going on. Or....

 

[dioxide45]

I had a discussion with a Marriott GM earlier this week and (s)he stated that (s)he was on a telecon with Steve Weisz who said that there was no truth to the rumor and that it is all untrue. So, either it is nothing but a rumor or Marriott wants to keep everyone guessing what is going on. Or....

Marriott or ILG won't announce anything until they have an agreement and approval by the boards. They won't even tell higher up people (like GMs and top level sales managers) until they make the same announcement to the public. Steve certainly wan't going to corroborate a rumor, if true, on a conference call with GMs.

 

[BJRSanDiego]

Marriott or ILG won't announce anything until they have an agreement and approval by the boards. They won't even tell higher up people (like GMs and top level sales managers) until they make the same announcement to the public. Steve certainly wan't going to corroborate a rumor, if true, on a conference call with GMs.

I've read stuff on some financial blogs and sites about this. But has either Marriott VC or ILG made any press releases on any of this?

 

[dioxide45]

I've read stuff on some financial blogs and sites about this. But has either Marriott VC or ILG made any press releases on any of this?

No announcement from VAC or ILG, no press release, nothing. Just some "source" mentioned that VAC made an offer of $30 a share.

 

[BJRSanDiego]

No announcement from VAC or ILG, no press release, nothing. Just some "source" mentioned that VAC made an offer of $30 a share.

I read something from Bloomberg and from Kramer. They usually don't shoot from the hip. This will be interesting as it proceeds....

 

[dioxide45]

I read something from Bloomberg and from Kramer. They usually don't shoot from the hip. This will be interesting as it proceeds....

Kramer had the CEO of VAC on his show and asked him about the rumors, which Steve Weisz refused to comment on. I think Kramer and Bloomberg were just talking about the initial rumors, not going off of anything official.

 

[VacationForever]

Kramer had the CEO of VAC on his show and asked him about the rumors, which Steve Weisz refused to comment on. I think Kramer and Bloomberg were just talking about the initial rumors, not going off of anything official.

But if it is not true, then Steve could easily have said that. Silence tells me that there is something to that rumour.

 

[dioxide45]

But if it is not true, then Steve could easily have said that. Silence tells me that there is something to that rumour.

I would agree. I suspect they did make the offer of $30 a share that is rumored. It is quite possible that ILG turned down the offer or is out shopping other offers.

 

[SueDonJ]

Marriott built a brand new internal trading / booking system, aka the "Trust". They needed to fund the "Trust" and hence they allowed existing owners (pre June 20 2010) to enroll so that they could help fill up the "Trust" with inventory. It was for a small fee initially and later on free for some if they went to an owners' update. Marriott needed the inventory and hence they allowed pre-June 2010 owners to enroll. ...

MVW can't use enrolled Weeks "to fill up the 'Trust' with inventory" because owners who enroll their eligible Weeks do not give up ownership of their Weeks. What's been conveyed to the Destination Club Trust are Weeks that MVW hadn't sold at the time the DC was established and since then, Weeks that MVW has purchased back or foreclosed upon and Weeks that have come online as either build-outs of existing resorts or new resorts. The Trust conveyances, not enrolled Weeks, seed the pool from which DC Trust Points can be purchased.

Enrollment is different. It simply gives Weeks Owners another usage option, which is to annually elect to convert enrolled Weeks to DC Points. Those points can then be used in the DC Exchange Company or for any of the other offers made available through the DC. Enrollment is not a permanent exchange of the Weeks for DC Points and Owners retain all of the original usage options, so it can't be said either that enrollment automatically seeds the DC Exchange Company.

 

[Helios]

Which resorts has Vistana/Starwood allowed to enroll in the points program?

I did no go through this so my info is fuzzy but, didn’t SVO allowed legacy Vistana resorts to join SVN. SVR and the rest of the FL resorts and SBP joined SVN.

 

[Helios]

There are 5 resorts that were sold as "mandatory" and because it is written into the governing documents, they retain the right when resold. Many times Vistana sales people have said unashamedly that if Starwood were to have done it again, they would never have made any resort mandatory as it kills of the revenue for new developer sales.

Agree, seamless integration would kill developer revenue. But the MVC management revenue can be increased if they allowed cross reservations and charge a fee. I am sure some MVC or Hyatt owners would like try say HRA or WSJ (once it gets back online)

 

[Helios]

In any case, I am just an owner with significant Vistana VOIs (in network), one resale post 2010 MKO unit, and one Hilton unit. It is nice to dream about using the first two systems combined like I am using the Marriott and Starwood Hotels now.

 

[dioxide45]

MVW can't use enrolled Weeks "to fill up the 'Trust' with inventory" because owners who enroll their eligible Weeks do not give up ownership of their Weeks. What's been conveyed to the Destination Club Trust are Weeks that MVW hadn't sold at the time the DC was established and since then, Weeks that MVW has purchased back or foreclosed upon and Weeks that have come online as either build-outs of existing resorts or new resorts. The Trust conveyances, not enrolled Weeks, seed the pool from which DC Trust Points can be purchased.

Enrollment is different. It simply gives Weeks Owners another usage option, which is to annually elect to convert enrolled Weeks to DC Points. Those points can then be used in the DC Exchange Company or for any of the other offers made available through the DC. Enrollment is not a permanent exchange of the Weeks for DC Points and Owners retain all of the original usage options, so it can't be said either that enrollment automatically seeds the DC Exchange Company.

Enrollment and owners that are converting their weeks to points does give Marriott inventory that they can use to help trust owners to book inventory through the exchange company. When Marriott started it all, the resorts in the trust were rather limited. Many trust owners would have been very disappointed in the product they purchased if Marriott never created the exchange company. The exchange company and enrolled weeks is what gives them the ability to sell a resort anywhere, even if the trust had no ownership in it. I think this is perhaps how VF was trying to convey, just perhaps the wording wasn't right? While Trust does not equal Exchange Company, Marriott is using the enrolled weeks that have converted to points to feed Trust owner reservations.

 

[dioxide45]

Agree, seamless integration would kill developer revenue. But the MVC management revenue can be increased if they allowed cross reservations and charge a fee. I am sure some MVC or Hyatt owners would like try say HRA or WSJ (once it gets back online)

The basis for Marriott's entire Destinations Club model is no nickle and dime fees. They have a single annual DC fee that covers most fees related to your ownership. It is possible that if this happens, they could integrate the programs. I think it is a rather easy thing to do. They could charge an additional enrollment fee if you want to begin being able to exchange your Vistana weeks in the DC Exchange company. Who knows. Right now it is all rumor because no agreement has even been made for the two companies to merge.

 

[VacationForever]

deleted.

 

[Helios]

The basis for Marriott's entire Destinations Club model is no nickle and dime fees. They have a single annual DC fee that covers most fees related to your ownership. It is possible that if this happens, they could integrate the programs. I think it is a rather easy thing to do. They could charge an additional enrollment fee if you want to begin being able to exchange your Vistana weeks in the DC Exchange company. Who knows. Right now it is all rumor because no agreement has even been made for the two companies to merge.

This could be a way, charge a fee to join an exchange program. Or, like it was said before, buy a unit and bring one into a merged system. There are a lot of ways this could be done while they still make money. Will they do anything, time will tell.

 

[VacationForever]

I did no go through this so my info is fuzzy but, didn’t SVO allowed legacy Vistana resorts to join SVN. SVR and the rest of the FL resorts and SBP joined SVN.

Let me touch on 2 components of the "fuzzy" info:
Sheraton Flex program comprises these resorts - SVV, SBP, SVR, SDO and Sheraton Steamboat and Jensen Beach. This is a "Trust" that Vistana is selling points at a high cost. As long as they are bought from the developer, they can book at these resorts at 12 months out and resale owners retain the use of this. Only when bought from the developer, can the points be used as Star Option booking at 8 months out at other Vistana resorts. When they are resold the new owner loses this ability, making this points voluntary - no SOs booking in SVN/VSN.

SVR has many phases that were sold prior to Starwood buying the resort from the Vistana corporation (yes, the original developer was called Vistana). When Starwood bought SVR in around 1999, 2 phases were in active sales - Lakes and Cascades (1997-2000). Newly sold Lakes and Cascades units were automatically part of SVN when Starwood formed the program in around 1999. Owners who had bought from Vistana for the same 2 phases - Lakes and Cascades could join SVN. In 2007, when significant special assessments were levied on SVR owners - all phases, Starwood also offered the owners from the other phases to join SVN when they paid the special assesments. But Lakes and Cascades resale owners were not allowed into SVN even after they paid the special assessments. I suspect Starwood needed inventory from the other phases to fill SVN. I do not believe SBP and other Florida resorts were "allowed" into SVN.

 

[Bunk]

Enrollment and owners that are converting their weeks to points does give Marriott inventory that they can use to help trust owners to book inventory through the exchange company. ...I think this is perhaps how VF was trying to convey, just perhaps the wording wasn't right? While Trust does not equal Exchange Company, Marriott is using the enrolled weeks that have converted to points to feed Trust owner reservations.

Sorry Dioxide, i haven't followed this all that closely, but can't MVC also take, for the benefit of the trust, attractive MVC weeks that Unit Owners have deposited into Interval International and replace them with less desirable weeks. E.g, if an owner deposits Oceana Palms into Interval, can Marriott take that week for the benefit of the trust owners and substitute Fairway Villas in NJ )

 

[Helios]

Thanks for clarifying. Obviously I did not know al the details.

 

[SueDonJ]

Enrollment and owners that are converting their weeks to points does give Marriott inventory that they can use to help trust owners to book inventory through the exchange company. When Marriott started it all, the resorts in the trust were rather limited. Many trust owners would have been very disappointed in the product they purchased if Marriott never created the exchange company. The exchange company and enrolled weeks is what gives them the ability to sell a resort anywhere, even if the trust had no ownership in it. I think this is perhaps how VF was trying to convey, just perhaps the wording wasn't right? While Trust does not equal Exchange Company, Marriott is using the enrolled weeks that have converted to points to feed Trust owner reservations.

I agree, minus the Exchange Company the DC wouldn't have a chance at success because like you say the Trust Members would have had a very limited inventory available to book reservations, and also because there would have been no mechanism for existing Weeks Owners to participate at all. It's surprising, though, how many owners still believe that enrolling a Week equates to a permanent exchange of the Week for DC Points, so it's still important to clarify whenever something posted might be misconstrued.

 

[SueDonJ]

Sorry Dioxide, i haven't followed this all that closely, but can't MVC also take, for the benefit of the trust, attractive MVC weeks that Unit Owners have deposited into Interval International and replace them with less desirable weeks. E.g, if an owner deposits Oceana Palms into Interval, can Marriott take that week for the benefit of the trust owners and substitute Fairway Villas in NJ )

Yes, MVW can manipulate II and other inventory through the DC Exchange Company in order to fulfill reservation requests from DC Members. That doesn't benefit the Trust to which Weeks have been permanently conveyed to seed the DC Trust Points pool, but instead benefits all DC Members - Trust and Exchange/Enrolled Members - who reserve intervals via the DC Exchange Company using DC Points.