I believe Marriott will aggressively acquire weeks into Points Trust

[Fredm]

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 stopped exercising ROFR because of a company-wide capital expenditure freeze. This was caused by the credit market dislocations a couple of years ago. Marriott could not securitize their timeshare loans. Their capital was required to continue to finance sales on a much more limited basis.

The credit situation has since improved. However, terms are such that bundled loans are no longer providing an income stream to Marriott.

I believe Marriott will do exactly what Boca suggests.
We have no way of knowing what Marriott requires to manage its points inventory. They will do what is required to balance the inventory consistent with it functioning successfully. Somewhere in the mix will be the selective exercise of its ROFR. The what and when is beyond our ability to see.

Regarding the debate on Marriott's concern for profits vs existing customer satisfaction, they cannot be separated.
Of course Marriott has a huge stake in the overall integrity of its brand. But, MVCI cares about owner satisfaction because it is critical to sales performance and profitability.

Every Project Director and Sales Manager knows that owner referrals close at ~50%. General tours close at < 20%. The profitability associated with owner generated tours is what makes or breaks overall sales performance.

Even at the sales rep level, given a choice there is not a single sales rep who would not prefer to tour an owner referral. That is why the most successful sales reps take good care of their owners. They want to benefit from the referrals generated.

The notion that this new D Club does not care about making it a winner to its 400,000 + existing owners defies logic and common sense.
It is good for sales, good for profitability, good for brand integrity. Good for business, period. To think otherwise is a very narrow view of what makes Marriott, or any successful enterprise, tick.

 

[BocaBum99]

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.

Have you ever managed a capital budget? I have. Do you think they will NEVER have a capital budget again?

It is possible that Marriott comes up with a reduced capital intensive method for inventory acquisition. Or, it could do what Wyndham and Bluegreen are doing in fee for services. But, since they created the Trust, that gets them into the inventory management business.

 

[BocaBum99]

Marriott stopped exercising ROFR because of a company-wide capital expenditure freeze. This was caused by the credit market dislocations a couple of years ago. Marriott could not securitize their timeshare loans. Their capital was required to continue to finance sales on a much more limited basis.

The credit situation has since improved. However, terms are such that bundled loans are no longer providing an income stream to Marriott.

I believe Marriott will do exactly what Boca suggests.
We have no way of knowing what Marriott requires to manage its points inventory. They will do what is required to balance the inventory consistent with it functioning successfully. Somewhere in the mix will be the selective exercise of its ROFR. The what and when is beyond our ability to see.

Regarding the debate on Marriott's concern for profits vs existing customer satisfaction, they cannot be separated.
Of course Marriott has a huge stake in the overall integrity of its brand. But, MVCI cares about owner satisfaction because it is critical to sales performance and profitability.

Every Project Director and Sales Manager knows that owner referrals close at ~50%. General tours close at < 20%. The profitability associated with owner generated tours is what makes or breaks overall sales performance.

Even at the sales rep level, given a choice there is not a single sales rep would would not prefer to tour an owner referral. That is why the most successful sales reps take good care of their owners. They want to benefit from the referrals generated.

The notion that this new D Club does not care about making it a winner to its 400,000 + existing owners defies logic and common sense.
It is good for sales, good for profitability, good for brand integrity. Good for business, period. To think otherwise is a very narrow view of what makes Marriott, or any successful enterprise, tick.

It's refreshing to see someone who clearly understands the big picture. You think like a general manager.

 

[Fredm]

It's refreshing to see someone who clearly understands the big picture. You think like a general manager.

Just a business owner who knows where his bread is buttered.

Also, having worked at MVCI for some years, I do have some insight to what drives them.

 

[winger]

I agree, IMHO, unless Marriott gets a whole bunch of people to join their system, t (OR aggressively acquire weeks) the trust will not have a lot of inventory and be a failure.

I agree Marriott must have as much availability as possible. Why join and wait for confirmations when you can do the same with the current II ?

I think they may have already started selective purchases from the resale market. My Manor Club sales rep mentioned overnight, there were approx 60+ MMC platinum weeks and a couple of gold weeks that showed up in the Trust due to Marriott purchasing from owner's on MMC's resale 'wait list'.

The question was any TUG'er on the Manor Club resale wait list prior to June 20th, and if so has Marriott taken the week off your plate?

 

[winger]

One reasonable question wrt this which remains IMO is will Marriott cook the back end of the reservation system to favor the trust? IOW, at any resort, in any peak period, their desired reservations for the trust will simply be executed first, before any 'external' owners reservations can be processed? ....

My sales rep has repeatedly alluded to this - weeks from deeded owners who deposit their weeks (to II) to receive Club points will do this through their specially Club (not pre-Club normal VOA) Marriott VOA, and that VOA will match up the deeded owner's week with pending Club requests first...before giving that week to II .

IF this were true, yes, this amounts to 'cooking' the backend if there is such a thing and this is a better reason to join the Club.

Or this could all be BS on the part of my sales rep trying to make a sale.

 

[camachinist]

For clarity, and I agree that the trust might and perhaps should operate in the best interest of its members with II, I meant that Marriott will cook the back end of the MVCI reservation system whereby they select out the prime weeks with their ownership and advantage of being the reservation system operator, at the expense of deeded weeks owners trying to reserve at their home resorts. I expanded upon that instinct elsewhere, so won't do it here.

Even with a ton of NCV points in the trust, I believe Marriott has a dearth of platinum weeks there, so will be watching that deeding activity closely. The county recorders office doesn't lie

 

[dioxide45]

Even with a ton of NCV points in the trust, I believe Marriott has a dearth of platinum weeks there, so will be watching that deeding activity closely. The county recorders office doesn't lie

What recording activity will there be to see? I think now that all deeds are conveyed to the land trust, all those deeds for NVC should now be deeded over to the trust and recorded. Now going forward it would seem that all deeds for points will be recorded in Orange County Florida, all deeds will just show the number of points purchased. Much like how DVC deeds points.

Or are you suggesting that they didn't deed all NCV weeks to the trust? This has been shown to happen at other resorts with some resorts with unsold inventory not being conveyed at all.

 

[BocaBum99]

I agree Marriott must have as much availability as possible. Why join and wait for confirmations when you can do the same with the current II ?

I think they may have already started selective purchases from the resale market. My Manor Club sales rep mentioned overnight, there were approx 60+ MMC platinum weeks and a couple of gold weeks that showed up in the Trust due to Marriott purchasing from owner's on MMC's resale 'wait list'.

The question was any TUG'er on the Manor Club resale wait list prior to June 20th, and if so has Marriott taken the week off your plate?

I do believe Marriott will do some to get advantage in II trades. However, one of the key points of my thesis of this thread is that it won't be enough. The inventory needs to be in the Trust for the club to be viable long term.

 

[BocaBum99]

I agree Marriott must have as much availability as possible. Why join and wait for confirmations when you can do the same with the current II ?

I think they may have already started selective purchases from the resale market. My Manor Club sales rep mentioned overnight, there were approx 60+ MMC platinum weeks and a couple of gold weeks that showed up in the Trust due to Marriott purchasing from owner's on MMC's resale 'wait list'.

The question was any TUG'er on the Manor Club resale wait list prior to June 20th, and if so has Marriott taken the week off your plate?

If this can be independently verified. This proves my thesis. In fact, it's even more aggressive. They are buying out inventory instead of simply exercising ROFR.

 

[camachinist]

Or are you suggesting that they didn't deed all NCV weeks to the trust? This has been shown to happen at other resorts with some resorts with unsold inventory not being conveyed at all.

I've seen deeding activity in the 'other' Orange County, which is where NCV is located, between Marriott and a Marriott trust (TR) subsequent to June 20. Next time I'm down there, I'll spend part of a day looking at the actual deeds. Information is a good thing. The people at the recorders office are very friendly. I dealt with them during the early stages of my divorce while accessing all my legal records.

 

[jlf58]

I said I doubt they will start ROFR at this point, I didn't say forever. As far as you managing capital budgets, all I can say is WOW, good for you.

Have you ever managed a capital budget? I have. Do you think they will NEVER have a capital budget again?

It is possible that Marriott comes up with a reduced capital intensive method for inventory acquisition. Or, it could do what Wyndham and Bluegreen are doing in fee for services. But, since they created the Trust, that gets them into the inventory management business.

 

[jlf58]

So lets see, now sales people tell the truth when we agree with what they say ?
geez, I was expecting her to say, "We could care less that we don't have Platinum Manor Club weeks ".... NOT

If this can be independently verified. This proves my thesis. In fact, it's even more aggressive. They are buying out inventory instead of simply exercising ROFR.

 

[m61376]

My sales rep has repeatedly alluded to this - weeks from deeded owners who deposit their weeks (to II) to receive Club points will do this through their specially Club (not pre-Club normal VOA) Marriott VOA, and that VOA will match up the deeded owner's week with pending Club requests first...before giving that week to II .

IF this were true, yes, this amounts to 'cooking' the backend if there is such a thing and this is a better reason to join the Club.

Or this could all be BS on the part of my sales rep trying to make a sale.

Enrolled deeded owners will not be depositing their weeks to II to receive club points. They will either be depositing their weeks to II or exchanging with Marriott for club points. Marriott can use the weeks that deeded owners are exchanging in for club points to fulfill point owner requests, but weeks deposited into II have to be exchanged for something comparable- whether it is Marirott making the request (to fulfill a point owner's request) or another week owner looking for a trade.

Theoretically, according to what Marirott reps have stated and as per the posting on II's website, Marriott will be exchanging like everyone else. Whether or not they put a finger on the scales, so to speak, or "cook the back end" remains to be seen. I think we'd be foolish not to have an element of suspicion but, at the same time, we can't condemn them for their potential ability to act unfairly when they have yet to demonstrate it. I'm guessing there will be lots of scrutiny there. IF Marriott is good at its own word, then trading in II via weeks should show little change in the coming months and years. Time will tell....

 

[AUtigerfan]

Enrolled deeded owners will not be depositing their weeks to II to receive club points. They will either be depositing their weeks to II or exchanging with Marriott for club points. Marriott can use the weeks that deeded owners are exchanging in for club points to fulfill point owner requests, but weeks deposited into II have to be exchanged for something comparable- whether it is Marirott making the request (to fulfill a point owner's request) or another week owner looking for a trade...

Are float week owners booking a week and then exchanging that week for club points, or do they just call Marriott and say "I want points for next years gold season floating week". Marriott could then pick a coveted week for the points because they control reservations, inventory, etc.

 

[hotcoffee]

Are float week owners booking a week and then exchanging that week for club points, or do they just call Marriott and say "I want points for next years gold season floating week". Marriott could then pick a coveted week for the points because they control reservations, inventory, etc.

My understanding is that we do not reserve our week prior to trading for points. Marriott will decide which week to reserve (probably based upon what exchangers are looking for).

 

[m61376]

My understanding is that we do not reserve our week prior to trading for points. Marriott will decide which week to reserve (probably based upon what exchangers are looking for).

You are correct in that you do not make a weeks reservation when you are converting.

Marriott has stated that their policy is to allow an equal distribution of each week in each inventory pool, according to the percentage of units in each pool. So- week owners will be competing with other week users according to the week percentage of ownership, and similarly for point owners. Marriott has assured me that they will not commandeer a disproportionate number of premium weeks in the season. They have stated it is similar to what they currently do now when owners turn weeks in for points- they distribute that inventory over the season and don't just grab the best weeks because they can. They appear committed to making this part of the process, at least, equitable.

 

[dioxide45]

My understanding is that we do not reserve our week prior to trading for points. Marriott will decide which week to reserve (probably based upon what exchangers are looking for).

Marriott won't pick or reserve a week. If you convert your gold week at resort X to points. Marriott now knows it has a gold week at resort X for points inventory. Now when someone calls in to reserve in to resort X for gold season using points, Marriott confirms that and takes the week out of available points inventory.

 

[jlf58]

Boca,

You made my day. He agrees with you so clearly he is right, that's classic. I also learned what a "take a way is " today. Keep teaching us, can we do "trial closes" tomorrow ? That always sounded to legal for me ..

It's refreshing to see someone who clearly understands the big picture. You think like a general manager.

 

[camachinist]

Marriott won't pick or reserve a week. If you convert your gold week at resort X to points. Marriott now knows it has a gold week at resort X for points inventory. Now when someone calls in to reserve in to resort X for gold season using points, Marriott confirms that and takes the week out of available points inventory.

Assuming a the 'deposited' week is unreserved within a floating season, how exactly does Marriott go about giving the ultimate requestor of that day/week their exact dates? What happens if all villas are reserved for those dates? I guess it would return 'unsuccessful sell' like MARSHA does. Any guidance here?

Here's a scenario. I just reserved a killer week, this week, next year at NCV. I caved and enrolled my developer weeks into DCP next week. I decided, wth, I'm going to deposit that week into points (before September 30th, right?) and maximize the flexibility of the points system for 2011. When Marriott takes that week, they of course cancel my reservation in MVCI's system (perhaps it will show as 'exchange' or 'deposit for points') and in MARSHA. But, do they really cancel the reservation at the resort and place those days (DCP is about use periods, not weeks) into the 'trust account' as random platinum season days, relevant to total available days but not any specific days? How would this affect a deeded week owner looking for that July reservation. Would they see it? Unlikely. Why? Interesting.

Help me understand this better....

 

[dioxide45]

Help me understand this better....

When converting to points the reserved week is canceled. That week that was reserved and now canceled is available to anyone eligible to reserve that time, either because they have enough points or they own in the same season as the canceled week. That week isn't "saved" for points use or weeks use. First come first serve based on availability.

 

[camachinist]

Yes, so, who gets it, the points owner waitlisted or the deeded owner looking at his or her calendar? Interesting...... and look at who controls both

BTW, the answer is the waitlisted points owner...

Edited to add that, at a resort where the trust apparently 'owns' few Platinum weeks, and where deeded owners rarely release in-demand summer reservations, this dynamic, in light of requests, could be substantial reason for Marriott to pursue acquiring more platinum weeks in the secondary markets. I suspect such micro-conditions exist at certain other resorts as well. It'll be interesting to follow the trustee sales and ROFR activity moving forward.

 

[dioxide45]

I agree that it will go to the point waitlist first. However if no waitlist exists, it goes to who calls in first.

 

[camachinist]

Thanks for that. I'll pursue that nuance in another thread, as it's OT here.

 

[winger]

Really, they only need as much inventory as people they have join the system. They have significant inventory at almost all properties, and if only 15 people join the points program, they only need enough inventory for those 15 people, and those 15 people by definition have deposited their weeks, so therefore they have enough inventory for those people. Their additional unsold inventory is going to be above and beyond what people are actually trading in to book.

When you also consider that the 15 people who deposited their week for points, only have enough points to reserve 13 of those weeks, you have even less need for additional inventory.

But you have to take into consideration all the new purchasers of points, who have NOTHING to deposit week-wise. MVC needs to already have good inventory to satisfy these new members. Imagine a new customer paying upwards of $60,000+ worth in points (that's what a week in a 2-BD Maui or Ko Olina ocean view requires in points during high season) and NOT have easy-to-obtain inventory. He will be one unhappy new customer.