HRC to acquire Welk Resorts [MERGED]

[Tenga]

Think again!
Any HRC owner is delusional to think MVC anything less then its bottom line is to its share holders not HRC/ Welk owners.

"Mergers fail more often than marriages" If you have experienced a merger from the inside, you may sympathize.

Strategically speaking, investors prefer takeovers that are likely to lead to cost cutting to those that entail putting different businesses together and trying to increase revenues. Welk is an example of a cost-cutting deal, and one might reasonably expect that, if completed, it will be shown to have created value. However, the deal is so big and complicated that there are many other factors at play, and it is tricky to make any definite prediction about what will happen.

"The view of this TS merger as an exercise in repetitive failure".

Despite Losses, Marriott Vacations Remains Optimistic as Sales Centers Reopen, Occupancy Returns - hotelbusiness.com

ORLANDO, FL—Marriott Vacations Worldwide Corporation has reported second quarter 2020 financial results and provided an update on business conditions in light of the COVID-19 [...]

www.hotelbusiness.com

So why do do this deal? MVC has had four years to integrate HRC into its system. What did it conclude? Well 4 years tells me it doesn't fit or work out. So how to go forward?

Only two, well actually three options exist. First do nothing, this stance does nothing to the shareholder bottom line and increased value. Second option. Expand the brand, keep in mind the expansion still can't get integrated into MVC system. Third, put this expanded model on the open market to gauge interest to the wealth of the sale into another timeshare system. i.e. who is in the market to expand. This is the cycle and the path in the timeshare industry. The timeshare industry — which is led by corporate giants such as Marriott Vacations, Wyndham Destinations Inc., Hilton Grand Vacations Inc. and the Walt Disney Co.’s Disney Vacation Club. Take your best guess who is going to be the next owner or HRC/Welk? Look at past performances to guid you to future sales. How many times in the past 15 years has ILG/HRC been spun off! I can name 3 off the top of my head!

In no way can this be construed as a positive sign to any HRC/Welk owner. The only one who benefits is the Marriott shareholder. Pure and simple!
Regards,
Tenga

 

[heathpack]

I've been a Marriott "owner" since 2004. Over the years, it's seemed to me that changes in the timeshare industry tend to benefit the timeshare companies and rarely benefit me. I put the word owner in parentheses because my rights and power as an owner feel so limited.

I don't own either Hyatt or Welk, but I have stayed at a limited number of resorts in both programs. I find Hyatt to be classy resorts and, to me, many are aspirational trades. In my mind, Hyatt had some exclusivity to it. Welk is OK, but I would place their resorts a rung lower in desirability.

So once again, I view this change as dilution, lowering the value of my ownership. It may become harder for me to trade into Hyatt resorts, and that's unfortunate. If I were a Hyatt owner, I would also not be pleased. Welk owners may be mild winners, however.

If my initial impression is wrong, and this might benefit me as a Marriott owner, please go ahead and explain how.

I think the Marriott transition to DC was reasonably fair to existing Marriott weeks owners and that DC is definitely an enhancement to the Marriott system. Yes, it is expensive but its one of the few points purchases that I can see making sense for some people. DVC- yes. MVC DC point- yes. HPP- no way.

I've frequently hoped that Hyatt would see the light and move more towards a MVC DC model.

 

[RunCat]

This may just be some special arrangement facilitated through RCI?

Actually they were week-unit purchases made by Welk; but the units were still managed by the respective companies. Welk just handled the reservations and communication with the respective properties.

 

[alwysonvac]

Welks also owns weeks at
Eagle Crest Resort,
El Corazon de Santa Fe,
Four Seasons Residence Club Aviara,
Four Seasons Residence Club Scottsdale at Troon North,
Villas of Cave Creek, Arroyo Roble Resort,
Red Wolf Lodge at Squaw Valley,
Red Wolf Lakeside Lodge,
Montane Lodge, and
Pono Kai Resort

The number of weeks at each resort is documented in their Public Report webpage -

https://welkresorts-prod.azureedge.net/sites/default/files/2020-02/public-report.pdf

For example

 

[Tucsonadventurer]

In our Marriott presentation 2 weeks ago they spoke of possibly selling Hyatt. This is a twist. Better than being sold to Diamond!

 

[Tucsonadventurer]

Think again!
Any HRC owner is delusional to think MVC anything less then its bottom line is to its share holders not HRC/ Welk owners.

"Mergers fail more often than marriages" If you have experienced a merger from the inside, you may sympathize.

Strategically speaking, investors prefer takeovers that are likely to lead to cost cutting to those that entail putting different businesses together and trying to increase revenues. Welk is an example of a cost-cutting deal, and one might reasonably expect that, if completed, it will be shown to have created value. However, the deal is so big and complicated that there are many other factors at play, and it is tricky to make any definite prediction about what will happen.

"The view of this TS merger as an exercise in repetitive failure".

Despite Losses, Marriott Vacations Remains Optimistic as Sales Centers Reopen, Occupancy Returns - hotelbusiness.com

ORLANDO, FL—Marriott Vacations Worldwide Corporation has reported second quarter 2020 financial results and provided an update on business conditions in light of the COVID-19 [...]

www.hotelbusiness.com

So why do do this deal? MVC has had four years to integrate HRC into its system. What did it conclude? Well 4 years tells me it doesn't fit or work out. So how to go forward?

Only two, well actually three options exist. First do nothing, this stance does nothing to the shareholder bottom line and increased value. Second option. Expand the brand, keep in mind the expansion still can't get integrated into MVC system. Third, put this expanded model on the open market to gauge interest to the wealth of the sale into another timeshare system. i.e. who is in the market to expand. This is the cycle and the path in the timeshare industry. The timeshare industry — which is led by corporate giants such as Marriott Vacations, Wyndham Destinations Inc., Hilton Grand Vacations Inc. and the Walt Disney Co.’s Disney Vacation Club. Take your best guess who is going to be the next owner or HRC/Welk? Look at past performances to guid you to future sales. How many times in the past 15 years has ILG/HRC been spun off! I can name 3 off the top of my head!

In no way can this be construed as a positive sign to any HRC/Welk owner. The only one who benefits is the Marriott shareholder. Pure and simple!
Regards,
Tenga

makes sense. Marriott just told us they were strongly considering selling Hyatt in our presentation.

 

[travelhacker]

In our Marriott presentation 2 weeks ago they spoke of possibly selling Hyatt. This is a twist. Better than being sold to Diamond!

I think @Vacation1 nailed it. Hyatt was never a good fit for MVC, but it came with ILG. Buying Welk gives them a system that could be viable on it's own.

In the short term, they can cut redundant costs with Welk by folding it into their existing operations (as they've already done with HRC). In 3-5 years after they've got some sales under their belts, and travel has mostly normalized, it can be spun off, or it can be a separate division under the wider VAC umbrella that is mostly independent but shares costs with the larger VAC group.

 

[RunCat]

I think @Vacation1 nailed it. Hyatt was never a good fit for MVC, but it came with ILG. Buying Welk gives them a system that could be viable on it's own.

In the short term, they can cut redundant costs with Welk by folding it into their existing operations (as they've already done with HRC). In 3-5 years after they've got some sales under their belts, and travel has mostly normalized, it can be spun off, or it can be a separate division under the wider VAC umbrella that is mostly independent but shares costs with the larger VAC group.

Tend to agree. There is probably more similarity between the two products than differences. Welk owners , through the Experience Collection, already have access to the Hyatt properties in Carlsbad and Scottsdale.

 

[jjking42]

I am checking into Northstar this weekend with HRC points . I wonder what the sales weasel will have to say ?
I don't see Northstar available very often and I assume that is because Welk owners have a longer booking window than the 6 months we get as HRC Pinon Point owners. I considered buying Welk Platinum Plus points via resale to get better access to Northstar but their MF are much higher than my HRC MF. I live closer to Heavenly Ski resort than Northstar so Marriot Timber lodge would be better fit for me but I dont want full weeks and MVC resale points are not a good value. Honestly I am only 30 minutes from Hevanly and my BIL has a condo in Tahoe city if i want to Ski the north side so I wont be buying anything but i did look into it.

 

[Shankilicious]

I am checking into Northstar this weekend. I wonder what the sales weasel will have to say ?
I dont see Northsar available very often and I assume that is because Welk owners have a longer bookingwindow than the 6 months we get as HRC Pinon Point owners. I condered buying Welk Platinum Plus points via resale to get better access but thier MF are much hgher than my HRC MF.

Yeah, we can book northstar 15 months out.
And welk MF is $1500 for 240k points which is mid-low lever two bedroom unit.

Sent from my SM-G892A using Tapatalk

 

[heathpack]

Tend to agree. There is probably more similarity between the two products than differences. Welk owners , through the Experience Collection, already have access to the Hyatt properties in Carlsbad and Scottsdale.

Hyatt Residence Club does not have properties in Carlsbad and Scottsdale.

 

[PerryKing]

Hopefully it will be good for everyone...

 

[jjking42]

Yeah, we can book northstar 15 months out.
And welk MF is $1500 for 240k points which is mid-low lever two bedroom unit.

Sent from my SM-G892A using Tapatalk

this chart say two bedroom standard red ski season is 420k Welk points and the 2019 MF on 420K is $ 2,110
IN HRC that week cost me 2200 HRC points and my MF is aprox $ 1,200

 

[PerryKing]

 

[travelhacker]

I am checking into Northstar this weekend with HRC points . I wonder what the sales weasel will have to say ?
I don't see Northstar available very often and I assume that is because Welk owners have a longer booking window than the 6 months we get as HRC Pinon Point owners. I considered buying Welk Platinum Plus points via resale to get better access to Northstar but their MF are much higher than my HRC MF. I live closer to Heavenly Ski resort than Northstar so Marriot Timber lodge would be better fit for me but I dont want full weeks and MVC resale points are not a good value. Honestly I am only 30 minutes from Hevanly and my BIL has a condo in Tahoe city if i want to Ski the north side so I wont be buying anything but i did look into it.

My understanding is that there were just 5 units that Hyatt had sold inventory from. The inventory in those 5 units is managed completely separately from Welk inventory.

 

[Pathways]

this chart say two bedroom standard red ski season is 420k Welk points and the 2019 MF on 420K is $ 2,110
IN HRC that week cost me 2200 HRC points and my MF is aprox $ 1,200

Alright, alright, don't rub it in with your $1200 Sedona MF!

Most HRC MF's are closer to the 2110 than your 1200

 

[liongate88]

Welks also owns weeks at
Eagle Crest Resort,
El Corazon de Santa Fe,
Four Seasons Residence Club Aviara,
Four Seasons Residence Club Scottsdale at Troon North,
Villas of Cave Creek, Arroyo Roble Resort,
Red Wolf Lodge at Squaw Valley,
Red Wolf Lakeside Lodge,
Montane Lodge, and
Pono Kai Resort

The number of weeks at each resort is documented in their Public Report webpage -

https://welkresorts-prod.azureedge.net/sites/default/files/2020-02/public-report.pdf

For example

View attachment 31549

Would this mean HRC will have access the experience collection also? It purchased only the 8 resorts owned by Welk.

 

[Shankilicious]

this chart say two bedroom standard red ski season is 420k Welk points and the 2019 MF on 420K is $ 2,110
IN HRC that week cost me 2200 HRC points and my MF is aprox $ 1,200


View attachment 31551
View attachment 31552

Truth. However, 240k will get you a two bedroom in san diego and Branson. Tahoe and Breck are a lot more but we could go Sunday to Friday for 210k and book 9months out.

Sent from my SM-G892A using Tapatalk

 

[PerryKing]

this chart say two bedroom standard red ski season is 420k Welk points and the 2019 MF on 420K is $ 2,110
IN HRC that week cost me 2200 HRC points and my MF is aprox $ 1,200


View attachment 31551
View attachment 31552

One thing however regarding Northstar: I have always understood that Hyatt actual has ( or controls) very few of the units at the NorthStar property.

Thus explaining the always limited availability. So is that true ? Maybe a deal like the one proposed could open thing up more for all members at NorthStar ?

Or am I whishing to much or my information is wrong ?

 

[RunCat]

Hyatt Residence Club does not have properties in Carlsbad and Scottsdale.

Oops my mistake. I was thinking of the Four Seasons.

 

[Pathways]

One thing however regarding Northstar: I have always understood that Hyatt actual has ( or controls) very few of the units at the NorthStar property.

Thus explaining the always limited availability. So is that true ? Maybe a deal like the one proposed could open thing up more for all members at NorthStar ?

Or am I whishing to much or my information is wrong ?

My understanding is that there were just 5 units that Hyatt had sold inventory from

I had heard the same info that travelhacker is posting. There were very few Hyatt units sold

 

[jjking42]

there is two bedroom for 3 night available right now for check on Friday 1/29 on HRC. But if you don't already have lift ticket reservations you probably cant get them. Lots and lots of snow expected this week.

 

[jjking42]

Alright, alright, don't rub it in with your $1200 Sedona MF!

Most HRC MF's are closer to the 2110 than your 1200

I know Sedona is low . I was was expecting Welk Northstar to be more in the $1500 range than $ 2100.

 

[BJRSanDiego]

One thing however regarding Northstar: I have always understood that Hyatt actual has ( or controls) very few of the units at the NorthStar property.

Thus explaining the always limited availability. So is that true ? Maybe a deal like the one proposed could open thing up more for all members at NorthStar ?

Or am I whishing to much or my information is wrong ?

I have stayed at Northstar twice when Welk was still associated with Interval. Both times I thought that the "bones" of Northstar were good but thought that the maintenance and operation of the facility was poor. No - - the maintenance was very poor and there was a lack of quality touches. So, perhaps after the acquisition, Northstar will improve.

 

[jjking42]

One thing however regarding Northstar: I have always understood that Hyatt actual has ( or controls) very few of the units at the NorthStar property.

Thus explaining the always limited availability. So is that true ? Maybe a deal like the one proposed could open thing up more for all members at NorthStar ?

Or am I whishing to much or my information is wrong ?

I was hoping for more availability but if HRC member are limited to booking 6 months out and Welk members can book 9- 15 months out we will not see much of a change for prime ski weeks. I guess we could try the request list at 18 months but I have never gotten a match from that.