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How long can SVO last as is?

tomandrobin

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Just a wandering thought.....

How long can Starwood stay status quo?

There are no new resorts in construction or under development. Starwood hasn't done much to enhance ownership or the resorts in general. If there is no growth, nothing new.....everything is just stagnant, is it a matter of time before Starwood sells their clubs? Why keep the resorts if there is no growth? Starwood makes a lot more money on selling new properties, then just collecting maintenance fees.

Even if Starwood started building a new resort, it would be 2013 before the first phase would open....and we all know that's not happening.
 

jarta

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tomandrobin, ... "Starwood hasn't done much to enhance ownership or the resorts in general"

Enhancing ownership? What about banking SVN StarOptions?

Enhancing resorts? What about the ongoing renovations at the existing ones - some of which were very extensive?

There are 2 parts to the Starwood presence in timeshares - sales of timeshare weeks and management of timeshare resorts .

When the inventory of weeks for sale further dwindles, Starwood will decide if it's in Starwood's best interest to develop new timeshare resorts by investing the money necessary to build them and sell off the weeks.

And, if managing the resorts is not sufficiently profitable, Starwood will pull out of the timeshare management business. If Starwood pulls out of the timeshare management business, some other entity will have to manage the internal trading system now called SVN. Or, like Villas of Cave Creek just did, the SVO resorts will have to find another manager and, perhaps, another trading system.

The resorts will survive if Starwood no longer manages them. Starwood will survive too - without timeshares. ... eom
 

vacationtime1

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There are 2 parts to the Starwood presence in timeshares - sales of timeshare weeks and management of timeshare resorts. ... eom

Starwood is making money and will continue to make money in each area.

Starwood still has inventory to sell: Princeville, Lagunamar, and everything it grabs via ROFR. The fact that it is actively acquiring additional inventory via ROFR (something we have seen recently in Maui) shows that it is confident that it can sell at least some inventory even in this economy. Starwood may not need to build new projects to create inventory, but there is no indication that sales departments are being closed.

The big hotel companies now make money managing hotel properties owned by investors, and Starwood is no exception. No construction risk, no ownership risk, no risk of functional obsolescence. Let others take those risks; in this case, it is we, the owners of the timeshares, who act as those investors. Starwood just collects management fees and manages the property at a hefty mark-up.

I see nothing in the short term that would have Starwood out of the business.
 

GregT

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Marriott: Maui Ocean Club Lahaina Villas (3BRx5), Ko Olina, Shadow Ridge II, Willow Ridge, Aruba Ocean Club, DC Points HGVC: Flamingo, Sea World, I-Drive, Starwood Bella (x4), SDO, TradeWinds, Worldmark
Tom,

I would think Starwood could maintain the Status Quo for awhile -- they can ROFR actively to obtain needed inventory which they still resell at whatever pace buyers can be found, they've depressed their inventory re-acquisition cost by making resorts voluntary, and they'll slowly come up with new fee income, like increasing the annual SVN fee and the new banking fee -- can a borrowing fee for StarOptions be far behind?

I've been trying to anticipate what other changes might come to SVN. I don't believe that they will allow other Voluntary resorts to participate, because that does kill a major sales tool for new product (and would increase the ROFR prices for their future inventory). I believe it would be difficult to take away the Mandatory designation from the others, and there is a recurring fee stream from them anyway so not sure how useful that would be.

We may find the Status Quo exists for awhile while they tinker around the fee edges, looking for low hanging fruit.

Best,

Greg
 

DavidnRobin

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SVO also owns VOIs at each resort that in turn are rented at a high mark-up compared to MFs
 

YYJMSP

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Even if Starwood started building a new resort, it would be 2013 before the first phase would open....and we all know that's not happening.

There is new construction at WDW and WLR...
 

levatino

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Well, there is theoretical new construction at WLR and WKORV but it is really just moving dirt. There is certainly no energy behind it. WLR could be completed and opened in a week, if Starwood wanted, and Kaanapoli is on hold and they move dirt to keep the permits active.

I know nothing about WDW however.
 
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Ken555

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A building was under construction at WDW when I was there a few months ago.
 

ronparise

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The op has a valid question, at least its a question that some of the other timeshare developers have asked and answered for themselves

Marriott spun off theit timeshare division and it looks like they will go the the way Marriott has gone in the past with other of their businesses. ie move from being a developer, and operator to operator to franchisor. When Marriott does what they do and do it right, all they do is sell their name

Wyndham isnt developing anything either. But they are still growing, They have purchased units to add to their inventory for sale, and they have entered into fee for service arrangements, whereby they become the sales staff for a failed condo development and manage the project

Bluegreen recently purchased the unsold units at Club La Pension in New Orleans and took over management

Starwood dosent have to build anything new to grow. But I agree if they dont grow they will die. They have to eat or be eaten
 

levatino

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" They have to eat or be eaten"

I might argue they are gorging themselves on our maintenance fees.

Does that count?
 
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