Devaluation to owners - Why?

[cp73]

After reading all these posts one of the reasons everyone is upset is because the points they receive if they trade in their unit will not get them the point value it did when they first purchased into the system. In other words, the points they are given have not kept up with the pace of points required for trips by Marriott. Why would Marriott do this? I concluded the following maybe reasons why Marriott has done this:

1. On average the weeks people are surrendering are worth less than the weeks/trips they want for Marriott points. How many times have you reserved a prime week at your resort and then traded it in for points? Probably never. I would guess a lot of the weeks people surrender for points may sit empty for part of the week and are not the prime rental weeks. Why should Marriott take these type of weeks and surrender something of greater value? Marriott can't end up on the short end of the stick. They have to receive something of value to make these trades.

2. I can't think of another reason. It just goes back to the value of the weeks being surrendered are less then what people want to trade points for.

I suspect in the near future you will see Marriott offering more bonus points to new purchasers as incentives to buy.

 

[sernow]

"I suspect in the near future you will see Marriott offering more bonus points to new purchasers as incentives to buy."

That's exactly right. Their sales are in the dumps and they need a way to sweeten the pot to get new buyers. But instead of Marriott using it's own sugar, they'll just use your sugar instead (by diluting it) because they can.

Marriott is taking more money out of existing owners pockets who bought direct from Marriott to help Marriott's bottom line, which comes as no suprise.

 

[KathyPet]

When you opt to trade your weeks for points you do not reserve any week at your resort. You just simply click on Trade for points and bypass the entire "reserve a week" process so in the great "inventory control system in the sky" Marriott knows that they now have a week in your season that they now control the use of. What week they choose is up to them.

 

[Latravel]

We got a lot more incentive points when we bought this past July than when we bought just last December. They obviously were using more incentive points to entice people to buy, and it worked. They basically made up for the difference in price between direct vs resale. I'm sure they have to offer even more points now that the price difference is greater. People have to be able to justify the price difference and the only way to do that now is with more incentive points.

 

[Bill4728]

In other words, the points they are given have not kept up with the pace of points required for trips by Marriott. Why would Marriott do this? I concluded the following maybe reasons why Marriott has done this:

1. On average the weeks people are surrendering are worth less than the weeks/trips they want for Marriott points. How many times have you reserved a prime week at your resort and then traded it in for points? Probably never. I would guess a lot of the weeks people surrender for points may sit empty for part of the week and are not the prime rental weeks. Why should Marriott take these type of weeks and surrender something of greater value? Marriott can't end up on the short end of the stick. They have to receive something of value to make these trades.

2. I can't think of another reason. It just goes back to the value of the weeks being surrendered are less then what people want to trade points for.

Boy Chris, I couldn't disagree more. The points that Marriott gives its owners is greatly undervalued. For a platinum owner getting 150K MR pts ( many get 125K) are giving up a 2 bd at a Marriott resort in prime season. The 150K pts will only get them a regular hotel room for 7 days.

IMHO, Marriott is making out like a bandit when it takes in these rooms.

 

[jerseyfinn]

After reading all these posts one of the reasons everyone is upset is because the points they receive if they trade in their unit will not get them the point value it did when they first purchased into the system. In other words, the points they are given have not kept up with the pace of points required for trips by Marriott. Why would Marriott do this?

My thoughts on the MRP aspect is this.

• First off, all owners should remember that the reason they purchase TS is to occupy/trade their week.
• The MRPs option is an ownership enhancement giving one an additional way to utilize TS other than the usual occupy/trade/rent paradigm.
• Tying MRPs to developer purchases creates an additional sales incentive for Marriott to close the deal.
• Devaluation of MRPs has always been an implicit reality whether one participates as a hotel MR-point earner, or as an MVC owner. It will indeed happen, we just don't know when and how.
• The effect of devaluation will be different for MVC folks because we acquire our points on a different basis than do the hotel folks.
• The cost of one's MFs has always been the basic calculus for an MVC owner to evaluate the relative cost ( and hence relative worth ) of a points strategy. MVC folks who employ a cents per MRP calculus err when they do so.

Do keep in mind that the MR program is a hotel loyalty program to which Marriott hitches the MVC TS wagon as an adjunct -- and it has worked quite well for many years. For MVC owners, the invisible red line where it becomes less worthy of pursuing the trade-for-MRPs option has been MF costs measured against the value of the MRPs thusly acquired. MFs are always inching up and it's a matter of time before MVC owners decide that it's not worth the cost of MFs for the points. For example, in Hawaii where the MFs are already high, there has already existed a disincentive to take the MRP option. This latest MR devaluation is significant because rising MFs combined and less bang for the MR point tends to make more owners at many other MVC resorts question the wisdom of pursuing a points strategy.

For me, the more interesting aspect of this latest devaluation is how MVC is going to deal with developer sales. I think that the clock is now ticking on how much longer Marriott can plausibly push the MRP TS option at these current levels of resort trade-in redemption rates. We may be approaching a point a which MVC may have to readjust and increase the points we receive for trading a week. It's not out of the question, though it is a complicated process to accomplish on the Marriott side.

I think that this MR latest devaluation is taking Marriott closer to the Timeshare Rubicon. That is, IMO, a stronger incentive now exists for Marriott to execute internal trades themselves. And from this need it looks very logical to me that MVC would also offer trade perks to developer purchasers over resale purchasers. It's an extension of the developer paradigm which already utilizes MRPs to gussy up the TS developer purchase product. It also creates a synergistic revenue stream for Marriott which dovetails with the main business of TS sales. It could also potentially make life easier for MVC owners who predominantely trade to other MVC resorts. Given this MR devaluation, parity could possibly become a hotly debated term in MVC.

My point is that this MR devaluation is simply business as usual in the Marriott universe. The real quantum leap which might follow this hiccough is Marriott moving into internal trades. Note already the new point system innovations and product lines in Asia and at specific MVC resorts as well as new emphasis upon upscale and botique MVC products in the future.

Presently, this dire and dour economy puts the brakes on a lot of TS things for Marriott. But if I were an MVC owner, I'd be looking in this direction for the implications of even bigger changes which if executed correctly, could enhance the product experience for most.

Barry

 

[Latravel]

Well said, or written.

 

[Tony&Perry]

Disgusted 6 week MCVI owner

[Message deleted. Duplicate posts are not permitted on the BBS. Dave M, BBS Moderator]

 

[sandesurf]

Even though I'm not happy with the new program, I explicitly remember that Marriott could change the point program, or even eliminate it all together, being in the paperwork we signed when buying our timeshare 13 years ago. I guess I just don't understand why people are so surprised.

 

[Icarus]

Chris,

Did we really need another thread for the same topic?

Now there's at least 3 threads where this same thing is being discussed.

-David

 

[Tony&Perry]

Simple solution for Marriott

[Message deleted. Duplicate posts are not permitted on the BBS. Dave M, BBS Moderator]

 

[Charlie D.]

Thank you, Dave M. I had noticed that the poster had copy and pasted the same word document 3-4 times in different threads.

Charlie D.

 

[sernow]

Thank you, Dave M. I had noticed that the poster had copy and pasted the same word document 3-4 times in different threads.

Charlie D.

It's not too hard to understand why though. Many people who were loyal to Marriott and defended Marriott feel used and betrayed and need to vent their frustrations. I'd be ballistic if I was a multi-week owner who bought direct with points being a big selling point.

 

[fnover]

Even though I'm not happy with the new program, I explicitly remember that Marriott could change the point program, or even eliminate it all together, being in the paperwork we signed when buying our timeshare 13 years ago. I guess I just don't understand why people are so surprised.

I think that disappointed is a better word than surprised. For those of us that do trade for points, the continued devaluation of MRP just makes our original developer purchase seem less of a smart deal.
That said, I agree with you when we signed the paperwork we understood that the program could change at any time and we were contracting for a set number of points.

 

[jerseyfinn]

hiljaisuus on kultainen

It's not too hard to understand why though. Many people who were loyal to Marriott and defended Marriott feel used and betrayed and need to vent their frustrations. I'd be ballistic if I was a multi-week owner who bought direct with points being a big selling point.

Well, I'm a multiple week owner who has purchased developer and I do not feel betrayed or violated and my self esteem is perfectly intact. Then again, I purchased TS with the goal of occupying or trading my weeks which is the Rosetta Stone of timeshare ownership. And yes, along the way I played the MR game when it was advantageous for me to do so.

Let's be honest here. Marriott has not lied to, deceived, or mislead any developer purchaser when it comes to MRs. We're each given a description of the MR program ( which clearly states that the MR program is subject to change, even termination, at any time ). We actually sign something which acknowledges our receipt of this information, so disclosure is not an issue if you've actually read the papers handed to you during your purchase.

Now the disappointment felt by some is entirely understandable as we each do indeed have some thinking and adjusting to do here. But in no way are our basic user rights as timeshare owners affected here. And I'm not trying to be presumptive about anything here. This devaluation is indeed a significant one for MVC owners, but rather than whine, I'd suggest sitting down and looking closely at how this does or does not affect your ownership. And then send constructive feedback to Marriott. Remember, MR is a hotel loyalty program that we MVC folks have been using in an entirely different manner than the hotel people. Give Marriott and MVC feedback about what this particular change does to the MVC MR owner. I suspect that the MVC sales side of the equation most likely feels the same way that we do about this change as I do not see how they can push the MR options as a viable reason to purchase developer in the future.

What will Marriott do? Probably nothing in the short run as the change does not occur until January 2009. But constructive feedback about what these changes do to an MVC developer owner might help shape some revisions on the MVC side of the equation which better fit the new reality. I've already fired off a message to one of our reps letting him know what I think of the changes and the long term implications for MVC. I'm also working on something for MVC mangment. I urge others to do the same.

Patience is a virtue and we need to step back and let this thing play out while refocusing upon what TS ownership and usage is all about. Time will tell if MVC ends up dismantling the value of MR and developer ownership, or if it listens to the feedback of owners who want a partnership with MVC.

Given all of the ridiculous things happening with this subprime mess ( and the larger mess that Congress will make it with open-ended bailouts ) this current MVC problem at least has the prospect of being managed and worked out if we control our anger and hubris and talk to Marriott.

Well, that's just my opinion as a stubborn, steadfast Finn.

Barry