Call from Vistana re merger

[jackball]

I received a call from Vistana wanting to discuss the merger. Has anyone had a similar call? I’m wondering what to expect.

 

[DannyTS]

Maybe we should all give them the same answer: not interested in a discussion until we see the program rolled out and we can read all the details.

 

[CPNY]

I received a call from Vistana wanting to discuss the merger. Has anyone had a similar call? I’m wondering what to expect.

I’ll tell you what to expect.

We will take back what you own and you can pay thousands more to “upgrade” into flex. If you don’t you won’t be able to book into Marriott resorts......

DONT DO IT

 

[dioxide45]

Are you booked to go to a resort in the next few weeks? I suspect it is a pre-arrival call/ploy to sign you up for an "Owners Update".

 

[cubigbird]

Anytime Vistana calls out and wants to “discuss something new.” It is ALWAYS a sales call. Given low occupancy at resorts and fewer guests, I know they have increased their phone campaigns to get people to attend virtual owners updates and sell remotely vs in-person.

 

[CPNY]

Anytime Vistana calls out and wants to “discuss something new.” It is ALWAYS a sales call. Given low occupancy at resorts and fewer guests, I know they have increased their phone campaigns to get people to attend virtual owners updates and sell remotely vs in-person.

They are trying to “pick off the tree”. Get unsuspecting owners who want to hear about the merger to engage in a sales presentation. Get people excited to go to Marriott resorts, then tell them the only way to do it is to buy flex. We are already starting to see flex only inventory on the vistana dashboard. This is coming from owners who cannot book their home resort period even though availability is showing. Are they already squeezing inventory from the VSN?

 

[Tucsonadventurer]

We went to a Marriott presentation in Maui and were told 6 months before a merger and they don't know the details

 

[jackball]

We are going to Maui (Nanea) in July. Seems a little early for a sales pitch but we will see. We scheduled a call for noon tomorrow (Texas time). I will report back.

 

[critterchick]

They are trying to “pick off the tree”. Get unsuspecting owners who want to hear about the merger to engage in a sales presentation. Get people excited to go to Marriott resorts, then tell them the only way to do it is to buy flex. We are already starting to see flex only inventory on the vistana dashboard. This is coming from owners who cannot book their home resort period even though availability is showing. Are they already squeezing inventory from the VSN?

As far as I know (not very), when in the home resort booking window, the only availablity for Flex owners will be for properties that are deeded into Flex, and the only availability for deeded owners will be the deeded properties. How do you see flex-only inventory, anyway?

 

[KACTravels]

We went to an Owners Update this week out of pure curiosity about the merger and 5* elite status Platinum for life (or while you have enough SOs to qualify) going to Titanium. They flat out said they don’t know anything and if they did would not feel right saying anything because they know until it is official, they wouldn’t know that they were absolutely correct. I respected that for sure. She checked inventory and actually tried to sell us Maui with the equity of our FLEX! I was really surprised that she offered for our FLEX to be “traded in“ for Deeded weeks. We told her we were not going to do anything until we knew what the new merged program was going to be. She respectfully said OK, call me if you want me to piece something together for you. I thought she was really great. Now we are watching whales from our pool rented loungers and umbrella on the beach with the $125 Resort Credit.

 

[CPNY]

As far as I know (not very), when in the home resort booking window, the only availablity for Flex owners will be for properties that are deeded into Flex, and the only availability for deeded owners will be the deeded properties. How do you see flex-only inventory, anyway?

I’m hearing some people are seeing availability within 12-8 months in their home resort on the dashboard. When they go to book the unit they are getting a message saying the room cannot be booked until xxx date (8 months). They have called vistana and were told the inventory that is showing available is actually in the flex trust.

 

[Henry M.]

I've had that happen. I think in the past, it was Staroption inventory rather than home resort inventory. Perhaps Flex is included with that.

 

[NorthStarGirl]

I’ll tell you what to expect.

We will take back what you own and you can pay thousands more to “upgrade” into flex. If you don’t you won’t be able to book into Marriott resorts......

DONT DO IT

I agree with your assessment. When they don't have much new inventory to sell, they will build a sales presentation around repackaging old inventory. This is especially true in Florida, I think. When they offer to "take it off your hands" pay attention to which property they want from you. That's the one to keep.

 

[cubigbird]

I agree with your assessment. When they don't have much new inventory to sell, they will build a sales presentation around repackaging old inventory. This is especially true in Florida, I think. When they offer to "take it off your hands" pay attention to which property they want from you. That's the one to keep.

I wonder what the next repackage will look like? They certainly aren’t bringing in new inventory and eventually these trusts will reach max sales. They can’t sell what they don’t have. It’s all finite unless new resorts come online.

 

[vacationtime1]

I wonder what the next repackage will look like? They certainly aren’t bringing in new inventory and eventually these trusts will reach max sales. They can’t sell what they don’t have. It’s all finite unless new resorts come online.

They won't ever need to "repackage" the new trusts if they can make trust points worthless for resale -- something which is already happening. Marriott's formerly $2/point, now $3/point, "education fee" reduces resale value and will increase until it wipes it out. Hyatt's new HPP system has no resale value whatsoever. Many RTU resorts (principally in Mexico) have transfer fees so high that there is no remaining value to sell.

Developers can then magnanimously offer an exit plan -- they will relieve you of the lifetime obligations from your points or RTU (for a small fee, of course) -- and then resell the points or RTU's as new.

If the various trusts are large enough (i.e. enough variety of destinations), there will be enough destinations to sell more points to repeat customers as well as some points to new buyers ("all in one convenient package"!). Marriott has bought Vistana, Hyatt will take over Welk, DRI has swallowed up many, etc. and each becomes large enough to internalize the benefits of the churn.

 

[dioxide45]

I suspect that with a combined program that Marriott will want to get out of selling Flex. At some point they will either sell out of or stop selling the Flex programs in favor of the DC trust. Any new USA resorts will get added to the DC trust and new sales will be from that trust. Or they will setup a new trust for all future properties. That seems rather cumbersome, but it may be the easiest way to manage the system. With the DC Exchange company, owners making reservations is a pretty seamless process since all trust inventory is usually dumped into the exchange company at the 12-13 month mark.

 

[dioxide45]

They won't ever need to "repackage" the new trusts if they can make trust points worthless for resale -- something which is already happening. Marriott's formerly $2/point, now $3/point, "education fee" reduces resale value and will increase until it wipes it out. Hyatt's new HPP system has no resale value whatsoever. Many RTU resorts (principally in Mexico) have transfer fees so high that there is no remaining value to sell.

Developers can then magnanimously offer an exit plan -- they will relieve you of the lifetime obligations from your points or RTU (for a small fee, of course) -- and then resell the points or RTU's as new.

If the various trusts are large enough (i.e. enough variety of destinations), there will be enough destinations to sell more points to repeat customers as well as some points to new buyers ("all in one convenient package"!). Marriott has bought Vistana, Hyatt will take over Welk, DRI has swallowed up many, etc. and each becomes large enough to internalize the benefits of the churn.

I am not sure that they can meet income and growth expectations off of churn. They need massive amounts of new inventory in order to meet that need and I don't think deedbacks and foreclosures are enough to do it.

 

[RunCat]

They need massive amounts of new inventory in order to meet that need and I don't think deedbacks and foreclosures are enough to do it.

I guess it depends on the numbers. . . getting "new" inventory from a deed back that has $0 development cost can have pretty high profit margins.

 

[vacationtime1]

I am not sure that they can meet income and growth expectations off of churn. They need massive amounts of new inventory in order to meet that need and I don't think deedbacks and foreclosures are enough to do it.

I haven't dissected their earnings statements, but my understanding is that increasing percentages of timeshare company profits now come from management of ongoing timeshares and financing. Timeshare companies' "asset lite" approach has been ongoing; we have seen far fewer new timeshare resorts this past decade than we did in previous decades. Obviously they need something to sell (and deedbacks may or may not be sufficient), but sales has become a smaller percentage of profits than before.

Of course they cannot make money from financing if they are not selling, so it's not only a matter of comparing profits from timeshare operators' various components, but the trendline is there.

 

[dioxide45]

I haven't dissected their earnings statements, but my understanding is that increasing percentages of timeshare company profits now come from management of ongoing timeshares and financing. Timeshare companies' "asset lite" approach has been ongoing; we have seen far fewer new timeshare resorts this past decade than we did in previous decades. Obviously they need something to sell (and deedbacks may or may not be sufficient), but sales has become a smaller percentage of profits than before.

Of course they cannot make money from financing if they are not selling, so it's not only a matter of comparing profits from timeshare operators' various components, but the trendline is there.

Sales still makes up about 35% of VAC revenue. Management is about the same if not a little less. THey can't grow management fees except by either increasing the amount of inventory they manage or increasing maintenance fees. Churn won't help increase management fees since they are already earning revenue from the week.

 

[jackball]

Call rescheduled to Monday. Will post an update then.

 

[jackball]

My wife and I just had a 35 minute call with with Anna Todriff with Vistana. Her email signature says she is a sales executive but she described herself as working in "customer satisfaction" or something to that effect. The call was not a sales call. I'm reporting below what she told me - this post is my first step in verifying the information she provided.

The big takeaway is that she was pushing a new and improved Interval International platform as an option for Vistana owners. She said Marriott purchased II at the time of the merger, and that II is now a reservation system rather than simply an exchange system. She said we can access II and use our 148,100 Nanea options to book 3000+ resorts, including those in the Marriott Vacation Club Portfolio. She also said the max points required to book a week (meaning peak season) are 110,000 for a 2BR; 70,000 for a 1BR and 60,000 for a studio. So apparently we could go somewhere for a week (including a MVC or VSE property, if available) and save 38,100 points. No more "deposit first" or "request first" choices.

To make a booking through II, go to www.intervalworld.com, sign in, hover over "Exchange" in the menu bar and then select "My Units". I've tried it only briefly. It is still a little clunky in my opinion, but seems better than before.

Maybe this all existed before, but I always found II difficult to understand and use. She also said Marriott/Vistana owners have exclusive access to Marriott/Vistana properties for the first 21 days they are in the II system.

She never asked us to buy anything, convert to Flex, etc.

 

[dioxide45]

This isn't new. This is how you use Home Options (Flex, Nanea, WSJ, Aventuras) in II. The maximum point requirements are lower than using StarOptions at eight months. The only issue is availability. II is still indeed an exchange system and someone has to deposit their week in order for you to exchange into it via II. This was how they tried to sell us on Sheraton Flex at our last timeshare sales presentation. There are certainly many situations where you are better to use your Home Options in II vs using StarOptions at eight months. Though there are other situations where you are better to use StarOptions. The key will always be availability in II which looks great right now because of COVID, it may not always be that way.


Here is the II TDI chart from the Flex FAQ.