I believe Marriott will aggressively acquire weeks into Points Trust

[m61376]

When I found out how much Hawaii inventory they have, I have concluded that there will not be many ROFRs (unless they can pick up some real steals). My theory is that they will use some of that Hawaiian inventory for II exchanges. That is valuable inventory and will allow them to get nice exchanges for their points customers.

Then why should a week owner, converted or not, pay the exorbitant point cost for Maui? IF Marriott is depositing those Hawaii weeks, for ex., to get the point requested trades for the Caribbean, etc., why not just use the week exchange system to exchange for those nice weeks?

The problem with selling the dream that Fletch alludes to is we live in an age of communication. Look at the negative posts on Bill Marriott's blog. What happens when new owners pay those big bucks for points and find that they can't get those reservations that they bought the points thinking they'd easily get? We live in an age where a few disgruntled owners can make a big difference. It is easy to Google and get info. on just about anything and, let's face it, it only takes a few really peeved owners to create a stir. Look at the posts already to Bill Marriott's blog- certainly not very flattering wrt this system.

So I think they will find themselves in a pr quagmire if they don't try to secure inventory. And, since II is making it clear that Marriott has to provide commensurate weeks in trades, until/unless they have sufficient inventory we might see a lot of those Hawaii and Marco weeks that they have a lot of inventory left of.

 

[hotcoffee]

Then why should a week owner, converted or not, pay the exorbitant point cost for Maui? IF Marriott is depositing those Hawaii weeks, for ex., to get the point requested trades for the Caribbean, etc., why not just use the week exchange system to exchange for those nice weeks?

The problem with selling the dream that Fletch alludes to is we live in an age of communication. Look at the negative posts on Bill Marriott's blog. What happens when new owners pay those big bucks for points and find that they can't get those reservations that they bought the points thinking they'd easily get? We live in an age where a few disgruntled owners can make a big difference. It is easy to Google and get info. on just about anything and, let's face it, it only takes a few really peeved owners to create a stir. Look at the posts already to Bill Marriott's blog- certainly not very flattering wrt this system.

So I think they will find themselves in a pr quagmire if they don't try to secure inventory. And, since II is making it clear that Marriott has to provide commensurate weeks in trades, until/unless they have sufficient inventory we might see a lot of those Hawaii and Marco weeks that they have a lot of inventory left of.

Actually, I don't take some of the views being expressed here that they will not do any ROFRs. I think they will. But, they won't need to add any inventory that is too much like what they already have. I mentioned in another post that I think they will still try to get some weeks at resorts or with views where they have little or nothing to offer.

However, don't sell their privileged access to II short. They have a lot to offer that I think II will want to get their hands on. That gives the Marriott Club Manager a strong hand in winning exchanges for enrolled club members using points for exchanges. In fact, I'm pretty excited by the possibilities. My KBC was great at winning exchanges into the Caribbean. I was getting them almost instantly - two bedroom units each sleeping 8 with full kitchens for my 2 bedroom OF unit sleeping 6 with limited kitchen. However, I was not doing well with exchanges into other Hawaiian resorts. Now, with the points I will be getting for my week plus the points I'm buying, I have high hopes of pretty much going anywhere I want when I want (when exchanged inventory exists, of course).

I also do not take the view that Marriott will not implement any other options to their points program. I think they have made too big of a commitment to the new program not to pump some more money into it. This is not going to be an old coke/new code fiasco. They would be crazy to do an about-face and dump the new system to return to the old. If the numbers are not what they were hoping for, they will just make some changes to the program. To go back would be a public relations blunder equal to Coca Cola's. They would become the laughing stock of the industry. Ain't going to happen. The best the people who won't enroll can hope for would be for Marriott to re-introduce a weeks program running concurrently to their points program.

 

[jlf58]

So you think Marriott will all of a sudden create a budget for ROFR so some owners don't complain when they don't get into Hilton head ? The reality
was most MVCI owners hated II and that never slowed business so , sorry, I disagree with you 100%. Its all about the number. They will do what's best for THEM, period. Thats how big buisness works !

Then why should a week owner, converted or not, pay the exorbitant point cost for Maui? IF Marriott is depositing those Hawaii weeks, for ex., to get the point requested trades for the Caribbean, etc., why not just use the week exchange system to exchange for those nice weeks?

The problem with selling the dream that Fletch alludes to is we live in an age of communication. Look at the negative posts on Bill Marriott's blog. What happens when new owners pay those big bucks for points and find that they can't get those reservations that they bought the points thinking they'd easily get? We live in an age where a few disgruntled owners can make a big difference. It is easy to Google and get info. on just about anything and, let's face it, it only takes a few really peeved owners to create a stir. Look at the posts already to Bill Marriott's blog- certainly not very flattering wrt this system.

So I think they will find themselves in a pr quagmire if they don't try to secure inventory. And, since II is making it clear that Marriott has to provide commensurate weeks in trades, until/unless they have sufficient inventory we might see a lot of those Hawaii and Marco weeks that they have a lot of inventory left of.

 

[BocaBum99]

So you think Marriott will all of a sudden create a budget for ROFR so some owners don't complain when they don't get into Hilton head ? The reality
was most MVCI owners hated II and that never slowed business so , sorry, I disagree with you 100%. Its all about the number. They will do what's best for THEM, period. Thats how big buisness works !

Customer satisfaction definitely matters to Marriott executives. If you worked in the owner services organization for 6 months, you may get a different perspective on what a general manager sees and cares about. Sure, they need to take care of the sales force, but not at the total expense of customer service. It IS in the general managers best interest to pursue best efforts in keeping customers happy.

If you've only spent time working in a sales organization, I can see how you would form the opinion you have. Sit in the staff meeting of a general manager and you will get a completely different perspective on what is important to a top manager.

 

[hotcoffee]

So you think Marriott will all of a sudden create a budget for ROFR so some owners don't complain when they don't get into Hilton head ? The reality
was most MVCI owners hated II and that never slowed business so , sorry, I disagree with you 100%. Its all about the number. They will do what's best for THEM, period. Thats how big buisness works !

I don't think that it will be so much of creating a budget for ROFRs as sinking into the program the necessary capital to make it work. If the philosophy of not sinking any startup capital into a new business were followed by every businessman, there would be no startup businesses. This is a major change of direction for Marriott. It would be suicidal for them to not offer new buyers something in return for their money. What are they going to offer to entice people to buy points: three nights in a crowded Hawaiian or Caribbean resort? It is probably true that people are looking for shorter vacations to save money. But, I'm not convinced the allure of spending three nights in some far-off exotic location is going to be enough to entice people to give up thousands of dollars to travel to many of Marriott's existing resorts.

 

[DanCali]

Customer satisfaction definitely matters to Marriott executives.

So what do you think will they do about the comments from Bill Marriott's blog?

 

[hotcoffee]

So what do you think will they do about the comments from Bill Marriott's blog?

I don't think it will be to ditch the program. They might make some tweaks in an attempt to address some of greatest concerns of their customers. I would not be surprised if some changes will result from the negative feedback. It depends upon whether they think the bloggers truly represent the views of the majority of their customers. Most owners of weeks are not going to fly-the-coop. They are kind of a captive audience in a way. The market is not the best right now for selling.

 

[BocaBum99]

So what do you think will they do about the comments from Bill Marriott's blog?

I haven't seen the blog, but I'll assume that it's pretty negative. My guess is that blog is seen by less than 1% of Marriott owners. That's the first thing I would do. Determine how important it is and how pervasive the issue is.

In general, we would give a much greater weight to our own internal customer satisfaction polls as recorded through our call centers, call hold times, increased call activity and feedback from the sales teams than blogs and message boards.

When I was on the top management team of a public company we took input from all external stakeholder groups in determining our response to issues of all kinds including product introductions. I can tell you without a doubt that online message boards and blogs were the most vicious outlets of feedback. Sometimes we just ignored them completely. Other times, we took action if we found a real issue that needed to be addressed that we didn't anticipate previously. My guess is that Marriott didn't anticipate how much attention skim would get. They may seek to address it after rethinking it. That's what I would do.

 

[jlf58]

I am not talking about owner service or sales. I am talking about people who decide this. Thanks but I have a very good prospective on all aspects in order to form this opinion.

Customer satisfaction definitely matters to Marriott executives. If you worked in the owner services organization for 6 months, you may get a different perspective on what a general manager sees and cares about. Sure, they need to take care of the sales force, but not at the total expense of customer service. It IS in the general managers best interest to pursue best efforts in keeping customers happy.

If you've only spent time working in a sales organization, I can see how you would form the opinion you have. Sit in the staff meeting of a general manager and you will get a completely different perspective on what is important to a top manager.

 

[jlf58]

I think they think, crap, we will make less money, thats all !! Anyone who expects anything to change is sadly mistaken.

So what do you think will they do about the comments from Bill Marriott's blog?

 

[BocaBum99]

I am not talking about owner service or sales. I am talking about people who decide this. Thanks but I have a very good prospective on all aspects in order to form this opinion.

Actually, I don't think you do. I've been on the top management team of big companies making these decisions. In fact, Marriott was one of my clients. And, I've seen employees such as yourself making such claims on message boards. So sure that they were right and couldn't be further from the truth. I'm sure you are a great sales guy. General manager, certainly not yet.

 

[Luckybee]

I think they think, crap, we will make less money, thats all !! Anyone who expects anything to change is sadly mistaken.

Obviously you have a much more educated perspective than any of us here on the entire situation. What Im curious about is what do you think they might do if the points program does flop? In other words, if the discontent is such that they not only continue with the bad publicity from current owners but also new point sales go way down? Will they still say"crap...etc" as you indicated above? Or are they flexible enough to tweak the system then?

 

[RedDogSD]

Actually, I don't think you do. I've been on the top management team of big companies making these decisions. In fact, Marriott was one of my clients. And, I've seen employees such as yourself making such claims on message boards. So sure that they were right and couldn't be further from the truth. I'm sure you are a great sales guy. General manager, certainly not yet.

Yeah, sorry Fletch, but I also consult to big companies management teams and they really care ALOT about brand equity. In the Hotel business, Brand is everything. They have a commodity product which is a square room with a bed inside. Why do people pay more for a Marriott/Hilton/Hyatt than other brands, some of whom offer the same nice product. Simple. You associate the brand name with quality. You associate the brand name with value. When new Hotels open up in a city, if they are no-name brands...even if they are 4* hotels with great restaurants...they will have to spend a lot of time and money giving away their product for virtually nothing until they build a reputation.

Marriott lives on their reputation. If their timeshare brand becomes worthless like the Wyndham brand (notice that the Worldmark brand remains seperate), they will be in trouble.

 

[windje2000]

Yeah, sorry Fletch, but I also consult to big companies management teams and they really care ALOT about brand equity. In the Hotel business, Brand is everything. They have a commodity product which is a square room with a bed inside. Why do people pay more for a Marriott/Hilton/Hyatt than other brands, some of whom offer the same nice product. Simple. You associate the brand name with quality. You associate the brand name with value. When new Hotels open up in a city, if they are no-name brands...even if they are 4* hotels with great restaurants...they will have to spend a lot of time and money giving away their product for virtually nothing until they build a reputation.

Marriott lives on their reputation. If their timeshare brand becomes worthless like the Wyndham brand (notice that the Worldmark brand remains seperate), they will be in trouble.

I might temper that observation just a little as they have a captive customer base in the timeshare business, which is unlike the hotel/hospitality business.

Its difficult to take $700MM write-off in the hotel business. You don't own the real property and are marketing your brand name and reservation system. No question protecting brand equity is paramount there.

In the timeshare business, you have your customers by the b***s and when you have them by the b***s, their hearts and minds are sure to follow.

They may not think one business affects the that other much. They may be right. And they have a boat load of written down inventory to unload.

I wonder if the best way to hedge is to buy the stock!

 

[BocaBum99]

I might temper that observation just a little as they have a captive customer base in the timeshare business, which is unlike the hotel/hospitality business.

Its difficult to take $700MM write-off in the hotel business. You don't own the real property and are marketing your brand name and reservation system. No question protecting brand equity is paramount there.

In the timeshare business, you have your customers by the b***s and when you have them by the b***s, their hearts and minds are sure to follow.

They may not think one business affects the that other much. They may be right. And they have a boat load of written down inventory to unload.

I wonder if the best way to hedge is to buy the stock!

Actually, it doesn't matter that it's associated with timesharing. The fact that they are using the Marriott brand means that they need to protect it.

In fact, what Marriott is most known for is bringing some level of legitimacy to the timeshare business. Many on this board may be disgusted with their current actions in points, but Marriott in fact successfully leveraged its brand into timesharing and became the biggest/second biggest timeshare company in the World. It has tremendous brand equity.

If it indeed were true that this point system were going to damage the Marriott brand, top management would take immediate action. Almost nothing else matters as much to that company.

 

[jlf58]

First off, there are no general managers in the vacation club upper management so please stop saying that. If they were a client of yours, I would think you know that. I am comfortable with my statement and for you to assume what I know and don't know, says alot about you since you don't know anything about me except that I am a salesman now.
As far as you, glad you updated me on how high level you were because you couldn't tell it from your posts. Good to know ..

Actually, I don't think you do. I've been on the top management team of big companies making these decisions. In fact, Marriott was one of my clients. And, I've seen employees such as yourself making such claims on message boards. So sure that they were right and couldn't be further from the truth. I'm sure you are a great sales guy. General manager, certainly not yet.

 

[jlf58]

You certainly will see minor tweaks in the next year or so but there is no such thing as going back, thats for sure.

Obviously you have a much more educated perspective than any of us here on the entire situation. What Im curious about is what do you think they might do if the points program does flop? In other words, if the discontent is such that they not only continue with the bad publicity from current owners but also new point sales go way down? Will they still say"crap...etc" as you indicated above? Or are they flexible enough to tweak the system then?

 

[jlf58]

You are reading to much into this. All I said was the bottom line was money. I never said they don't care what thier owners think. They won't bring back ROFL because of cost, thats all I said. Not forever but for the next couple of years. You might see a steal taken now and than but thats about it.

Yeah, sorry Fletch, but I also consult to big companies management teams and they really care ALOT about brand equity. In the Hotel business, Brand is everything. They have a commodity product which is a square room with a bed inside. Why do people pay more for a Marriott/Hilton/Hyatt than other brands, some of whom offer the same nice product. Simple. You associate the brand name with quality. You associate the brand name with value. When new Hotels open up in a city, if they are no-name brands...even if they are 4* hotels with great restaurants...they will have to spend a lot of time and money giving away their product for virtually nothing until they build a reputation.

Marriott lives on their reputation. If their timeshare brand becomes worthless like the Wyndham brand (notice that the Worldmark brand remains seperate), they will be in trouble.

 

[windje2000]

Actually, it doesn't matter that it's associated with timesharing. The fact that they are using the Marriott brand means that they need to protect it.

In fact, what Marriott is most known for is bringing some level of legitimacy to the timeshare business. Many on this board may be disgusted with their current actions in points, but Marriott in fact successfully leveraged its brand into timesharing and became the biggest/second biggest timeshare company in the World. It has tremendous brand equity.

If it indeed were true that this point system were going to damage the Marriott brand, top management would take immediate action. Almost nothing else matters as much to that company.

Time will tell. I have no personal experience with them except as a customer.

But I will say this. What's likely the very first thing anyone will want to know about a shift to points? How many will I be allocated. The second? How many will be charged for what I own.

First impression for most - things that make you go . . . hmmmmm.

IMHO - they would have been much better off saying a week is a week, but if you want days you pay extra for the privilege.

But I do think they have tarnished the brand. And they do themselves no favors by not having a comprehensive one stop information source or ombudsman to at least make sure everyone is dealing with facts and hard information and not rumors and speculation or the self serving babble that comes from the mouths of sales staff.

 

[Luckybee]

Time will tell. I have no personal experience with them except as a customer.

But I will say this. What's likely the very first thing anyone will want to know about a shift to points? How many will I be allocated. The second? How many will be charged for what I own.

First impression for most - things that make you go . . . hmmmmm.

IMHO - they would have been much better off saying a week is a week, but if you want days you pay extra for the privilege.

But I do think they have tarnished the brand. And they do themselves no favors by not having a comprehensive one stop information source or ombudsman to at least make sure everyone is dealing with facts and hard information and not rumors and speculation or the self serving babble that comes from the mouths of sales staff.

I absolutely agree with you on this. It would have made far more sense if they would have upted the ante for using points for single days(use of less than a week or over a week), checking in on a day other than standard days, upgrading views, size, seasons. From what I've seen on Tug, the Marriott blog, and my own conversations with Owner services the 2 biggest issues seem to be the points skim (reduction, breakage allowance or whatever one wishes to call it) and the inability to get the same "correct" answer from more than one person at Marriott that isnt coated with how wonderful the program is....until of course they're hit with the tough questions...which then inevitably leads to "the program wasnt meant for week owners"
For us the voting issue is also a large problem but I strongly suspect for most it is a complete non starter.
It wouldnt have taken much for Marriott to have made a great program. Instead of the negative impact....can you imagine how good it would have been for sales if they had the internet buzzing with that info instead !

 

[BocaBum99]

First off, there are no general managers in the vacation club upper management so please stop saying that. If they were a client of yours, I would think you know that. I am comfortable with my statement and for you to assume what I know and don't know, says alot about you since you don't know anything about me except that I am a salesman now.
As far as you, glad you updated me on how high level you were because you couldn't tell it from your posts. Good to know ..

I guess you do not know what a General Manager is. Typically, a General Manager is the key executive who has total Profit and Loss responsibility for a business. In the case of the Marriott Vacation Club International, that would be Stephen P. Weisz.

Here is the bio for Stephen Weisz: Stephen Weisz Bio.

 

[jlf58]

Ah, yes I know Mr Weisz and have talked to him on a few occasions. He is a very impressive person. He is the President of MVCI. Sounds like you need to revisit the MVCI hierarchy titles.... just sayin

I guess you do not know what a General Manager is. Typically, a General Manager is the key executive who has total Profit and Loss responsibility for a business. In the case of the Marriott Vacation Club International, that would be Stephen P. Weisz.

Here is the bio for Stephen Weisz: Stephen Weisz Bio.

 

[m61376]

So you think Marriott will all of a sudden create a budget for ROFR so some owners don't complain when they don't get into Hilton head ? The reality
was most MVCI owners hated II and that never slowed business so , sorry, I disagree with you 100%. Its all about the number. They will do what's best for THEM, period. Thats how big buisness works !

I think you misunderstood what I posted. I never indicated that I expected Marriott to ROFR lots of weeks to get the inventory they need. I was referencing the large number of Maui, Marco, Ko'Olina, etc. weeks that are already in the trust and, that since if Marriott wants a week that is deposited in II for a points owner, that week traders may see those developer weeks placed in II as replacements for the weeks that Marriott takes from II to fulfill point requests. So I was musing that week owners may get those high point trades just by trading weeks and not need to convert to points and use the exorbitant point cost entailed.

It might be a side benefit to weeks owners using high demand weeks that Marriott has very little inventory of- because unless they ROFR and buy lots of weeks (which I don't think they will do, at least until they sell a lot of current inventory, and that may be a decade or so away), they will need to get that some of that inventory from weeks deposited in II and will have to give II something commensurate in return, which may very well be those nice weeks that they have lots of inventory in (such as Maui, Ko'Olina, Marco, etc). The circle completes when week owners, trading weeks in II, can now access that inventory.

I was just throwing that out as a possibility and musing whether it might be realistic.

 

[BocaBum99]

I think you misunderstood what I posted. I never indicated that I expected Marriott to ROFR lots of weeks to get the inventory they need. I was referencing the large number of Maui, Marco, Ko'Olina, etc. weeks that are already in the trust and, that since if Marriott wants a week that is deposited in II for a points owner, that week traders may see those developer weeks placed in II as replacements for the weeks that Marriott takes from II to fulfill point requests. So I was musing that week owners may get those high point trades just by trading weeks and not need to convert to points and use the exorbitant point cost entailed.

It might be a side benefit to weeks owners using high demand weeks that Marriott has very little inventory of- because unless they ROFR and buy lots of weeks (which I don't think they will do, at least until they sell a lot of current inventory, and that may be a decade or so away), they will need to get that some of that inventory from weeks deposited in II and will have to give II something commensurate in return, which may very well be those nice weeks that they have lots of inventory in (such as Maui, Ko'Olina, Marco, etc). The circle completes when week owners, trading weeks in II, can now access that inventory.

I was just throwing that out as a possibility and musing whether it might be realistic.

Marriott will most likely have an inventory manager/executive who is accountable for optimizing the inventory in the Trust.

Criteria for optimizing the Trust will include:

1) Forecasted sell off of points inventory vs. target.

2) Supply and demand forecast for Points/internal exchange owners.

3) Most severely out of stock weeks requiring re-acquisition

4) Sell off weeks needing off load to II and/or other rental venues

5) Expected weeks coming in through equity trade ins.

There will most likely be a budget for re-acquisitions that will optimize the above. As is true with all businesses, profit maximization will be the objective. But, to achieve it, management of some combination of the above will be built into someone's job description. Moreover, an inventory manager with some foresight will have a target profile they want for inventory in the Trust over a long period of time and create multi-year metrics for getting there from where they are today.

The way that we as Tuggers can capitalize on the situation is to carefully watch the behavior of how the new system and the existing II system is delivering inventory. And, by watching ROFR trends and equity trade in reports, we can figure out where the best opportunities lie and how to play them.

 

[jlf58]

Sounds great but you are most likely wrong again. When they stopped ROFR there was no long explanation of what they would buy back and what they would not. Some VP simply said, we have no budget for that, don't buy anything back.

Marriott will most likely have an inventory manager/executive who is accountable for optimizing the inventory in the Trust.

Criteria for optimizing the Trust will include:

1) Forecasted sell off of points inventory vs. target.

2) Supply and demand forecast for Points/internal exchange owners.

3) Most severely out of stock weeks requiring re-acquisition

4) Sell off weeks needing off load to II and/or other rental venues

5) Expected weeks coming in through equity trade ins.

There will most likely be a budget for re-acquisitions that will optimize the above. As is true with all businesses, profit maximization will be the objective. But, to achieve it, management of some combination of the above will be built into someone's job description. Moreover, an inventory manager with some foresight will have a target profile they want for inventory in the Trust over a long period of time and create multi-year metrics for getting there from where they are today.

The way that we as Tuggers can capitalize on the situation is to carefully watch the behavior of how the new system and the existing II system is delivering inventory. And, by watching ROFR trends and equity trade in reports, we can figure out where the best opportunities lie and how to play them.