Interval Leisure Group buys Starwood, then Starwood and Marriott merge. Means what?

[theo]

I know absolutely nothing about Starwood, but I recently read an article indicating that Starwood sold its' timeshare business (reportedly called Vistana Signature Experiences) to Interval Leisure Group (ILG), the corporate bohemoth that also owns Interval International (II) and Vacation Resorts International (VRI).

I'm just idly curious what this sale / acquisition potentially means, if anything at all, for Starwood owners, in light of Marriott and Starwood also (soon after the above mentioned sale) merging to create what is reportedly now the world's largest hotel company.

I have no personal ownership in any of these entities, but I am curious nonetheless.

 

[DeniseM]

theo - We have no idea - just speculation so far.

*Look on the next page and you will see some long discussions about both acquisitions.

 

[lizap]

II also acquired Hyatt a while back. So far, nothing has changed except we were all upgraded to Interval Gold.

 

[sjsharkie]

I will say that I have noticed a larger number of Getaways for Hyatt properties (mostly in Hawaii) being posted for rental versus exchanged after the acquisition was finalized.

I have a bad feeling that now that ILG will have control over unsold/unrented inventory (assuming the acquisition is completed and finalized), they may choose to rent higher value properties versus putting them into the pool for exchange as Starwood does today.

It will also remain to be seen how they handle the current blended exchange rate versus Marriott and Hyatt where an actual week is deposited. I imagine they will keep it status quo as it is to their advantage to pick and choose which weeks go into the pool versus leaving it up to the owner.

-ryan

 

[SueDonJ]

In the Starwood forum:
Marriott to acquire Starwood hotels
Interval Leisure Group to buy SVO

In the Marriott forum:
Holy Moly. Marriott is acquiring Starwood [Hotel Business, not Timeshares]
Marriott to Spin Off Timeshare Business [merged]

Marriott timeshares were spun off in 2011 (to Marriott Vacations Worldwide,) long before Starwood entered into either of these agreements to spin off their timeshare division to ILG and sell their remaining business to Marriott, Int'l., which means it's important to note that these specific transactions won't result in a merge of the Starwood and Marriott timeshares. I do expect that with each company's timeshare divisions being affiliated with their respective hotel loyalty award programs, eventually when all the transactions are complete then all of the timeshare owners will have at least a minimum affiliation with the Marriott Rewards program.

Interesting times, no doubt. I'm excited to see the end results.

 

[tschwa2]

Hyatt may have a fixed week attached to their points but Hyatt always decided which weeks and resorts were actually deposited into II and which weeks stay in the internal (non II) exchange pool. I don't see II reversing the starwood system and allowing owners to deposit actual weeks into the II exchange pool.

 

[sjsharkie]

Hyatt may have a fixed week attached to their points but Hyatt always decided which weeks and resorts were actually deposited into II and which weeks stay in the internal (non II) exchange pool. I don't see II reversing the starwood system and allowing owners to deposit actual weeks into the II exchange pool.

This is true. Although we don't exactly know how it was decided, it wasn't solely in Hyatt's control -- likely similar to Starwood there was some structure in the contract which said which groups of weeks were allowed based on points allocated in the deposit.

Agree with your second point. It is to ILG's advantage to keep the status quo.

-ryan

 

[PClapham]

Starwood, Marriott timeshares, and Hyatt timeshares all now owned by II (ILG)?

Is this true? II really controls all three groups?

Anita

 

[sjsharkie]

Is this true? II really controls all three groups?

Anita

II already controls Hyatt's former timeshare business. II will control Starwood's former timeshare business once the transaction closes.

II has no control over Marriott's publicly traded vacation club business. Marriott signed an agreement to purchase Starwood's hotel business but that transaction has yet to close.

-ryan

 

[vistana101]

Read through a bit of the S-4 regarding the ILG and SVO acquisition, and found a bit more about their agreement with Starwood (bolding is mine):

In connection with the License Agreement, Starwood and its affiliate, Preferred Guest, Inc., and Vistana will enter into the SPG Affiliation Agreement, which will provide for the continued participation of Vistana, the Westin®, Sheraton®, St. Regis® and The Luxury Collection®, branded properties and certain licensed unbranded vacation ownership properties in Starwood's Starwood Preferred Guest® loyalty program. The SPG Affiliation Agreement permits Vistana and its affiliates to offer Starpoints® to SPG Members as an incentive upon purchase of a Vistana vacation ownership property, for conversion of a licensed vacation ownership interest or property, to resolve certain customer service issues or otherwise as a gesture of goodwill, and for certain promotional purposes. The SPG Affiliation Agreement provides the terms on which Starpoints® awarded in connection with the foregoing uses will expire or be forfeited as well as for their redemption, transfer and use. Unless otherwise terminated earlier as a result of certain defaults, the SPG Affiliation Agreement will terminate in connection with the termination or expiration of the License Agreement.

The document also stated this later on: "The SPG Affiliation Agreement to be entered into in connection with the Separation will allow the Vistana Vacation Ownership Business to continue to offer preferred membership in one of the industry's leading loyalty programs, the SPG Program."

So it looks like, at least with SPG, we will still be able to convert to starpoints and have elite membership levels (SPG Gold and Plat). Hopefully this agreement remains intact even with the Marriott merger.

 

[pacman777]

Read through a bit of the S-4 regarding the ILG and SVO acquisition, and found a bit more about their agreement with Starwood (bolding is mine):



The document also stated this later on: "The SPG Affiliation Agreement to be entered into in connection with the Separation will allow the Vistana Vacation Ownership Business to continue to offer preferred membership in one of the industry's leading loyalty programs, the SPG Program."

So it looks like, at least with SPG, we will still be able to convert to starpoints and have elite membership levels (SPG Gold and Plat). Hopefully this agreement remains intact even with the Marriott merger.

I highly doubt Marriott will keep two separate rewards programs after they acquire Starwood. Most likely Marriott's program will remain with maybe some slight modifications or adoption of some of SPG benefits. Where does that leave Vistana? I'm concerned about their tie-in with Starwood and its brands.

 

[dioxide45]

Is this true? II really controls all three groups?

Anita

II already controls Hyatt's former timeshare business. II will control Starwood's former timeshare business once the transaction closes.

II has no control over Marriott's publicly traded vacation club business. Marriott signed an agreement to purchase Starwood's hotel business but that transaction has yet to close.

-ryan

As indicated II only has (or will have) control over Hyatt and Starwood timeshare businesses. They don't have ownership of Marriott Vacation Club. Marriott International is acquiring Starwood's hotel business. This last transaction is in no way tied to any of the timeshare transactions.

 

[Ron98GT]

As indicated II only has (or will have) control over Hyatt and Starwood timeshare businesses. They don't have ownership of Marriott Vacation Club. Marriott International is acquiring Starwood's timeshare business. This last transaction is in no way tied to any of the timeshare transactions.

Oops, I think you meant Hotel Business.

 

[dioxide45]

Oops, I think you meant Hotel Business.

Sure did, fixed it.

 

[djp]

I can't help but wonder if in next year or two if ILG will acquire Marriott timeshare biz- it just seems to make sense- a giant Marriott hotel biz that includes Starwood in strategic partnership with ILG on the timeshare side, and in effect the Starwood and Marriott timeshares are under one umbrella under ILG.

 

[SueDonJ]

I can't help but wonder if in next year or two if ILG will acquire Marriott timeshare biz- it just seems to make sense- a giant Marriott hotel biz that includes Starwood in strategic partnership with ILG on the timeshare side, and in effect the Starwood and Marriott timeshares are under one umbrella under ILG.

The giant Marriott hotel biz won't be in a partnership with ILG because a) Marriott's timeshare company (Marriott Vacations Worldwide) has since 2011 been a completely separate company from Marriott's hotel company (Marriott, Int'l,) and b) Starwood's timeshare company (to be named Vistana) will have been spun off to ILG by the time Starwood's hotel company is bought by MI.

ILG could of course acquire MVW at any time but if/when it does, the only partnership it will have with MI is what exists now - an affiliation for the timeshare owners with the Marriott Rewards loyalty program that comes under the MI umbrella.

 

[SueDonJ]

Read through a bit of the S-4 regarding the ILG and SVO acquisition, and found a bit more about their agreement with Starwood (bolding is mine):



The document also stated this later on: "The SPG Affiliation Agreement to be entered into in connection with the Separation will allow the Vistana Vacation Ownership Business to continue to offer preferred membership in one of the industry's leading loyalty programs, the SPG Program."

So it looks like, at least with SPG, we will still be able to convert to starpoints and have elite membership levels (SPG Gold and Plat). Hopefully this agreement remains intact even with the Marriott merger.

Is there language elsewhere that says the affiliation between the timeshares and SPG is not guaranteed to exist forever, that the company is free to end or change the affiliation at any time, that the associated benefits can be revoked/amended for various reasons? I'd expect there is.

I'm with pacman in highly doubting that MI will keep two completely separate loyalty programs intact when the Starwood acquisition is finalized. Instead I think SPG will be merged with Marriott Rewards and the Vistana timeshares will still have an entitlement to the resulting hotel loyalty program incantation.

 

[okwiater]

Is there language elsewhere that says the affiliation between the timeshares and SPG is not guaranteed to exist forever, that the company is free to end or change the affiliation at any time, that the associated benefits can be revoked/amended for various reasons? I'd expect there is.

There is a 75-year affiliation agreement. So it's guaranteed to exist for quite a bit longer than I expect to exist. I would imagine, but don't know for certain, that the agreement would also be applicable to any future program designed to replace/absorb SPG.

I'm with pacman in highly doubting that MI will keep two completely separate loyalty programs intact when the Starwood acquisition is finalized. Instead I think SPG will be merged with Marriott Rewards and the Vistana timeshares will still have an entitlement to the resulting hotel loyalty program incantation.

I agree, and the Marriott chairman has said as much. I think they will stay separate for 1-3 years while a comprehensive brand integration and loyalty strategy is developed, at which point they will both dissolve in favor of a replacement program that is neither Marriott Rewards nor SPG.

 

[SueDonJ]

There is a 75-year affiliation agreement. So it's guaranteed to exist for quite a bit longer than I expect to exist. I would imagine, but don't know for certain, that the agreement would also be applicable to any future program designed to replace/absorb SPG.



I agree, and the Marriott chairman has said as much. I think they will stay separate for 1-3 years while a comprehensive brand integration and loyalty strategy is developed, at which point they will both dissolve in favor of a replacement program that is neither Marriott Rewards nor SPG.

I doubt MI will see a need to sink that much money into changing the name of its loyalty program because of this acquisition.

Another TUGger mentioned in a related thread that MI could keep SPG separate in the same way that they kept the Ritz-Carlton loyalty program separate from Marriott Rewards when R-C was absorbed by MI. My guess is that keeping the programs separate like that would cost MI far less to implement, but as you say the MI Chairman has indicated something different.

 

[vistana101]

SPG Affiliation Agreement ends when License Agreement ends, in 2095.

Also, found this today:

Merger of Programs. In the event the SPG Program is combined with or becomes part of another Loyalty Program, Starwood shall treat Owners who hold Starpoints in a manner consistent with other SPG Members other than with respect to the rights described in Sections 4(a) and 6(a).

Note that Section 4(a) deals with 6 year expiration of starpoints, and 6(a) deals with elite status offerings (bolding is mine):

(a)Elite Offerings. Vistana may provide (i) Gold Preferred Guest status in the SPG Program to any Owner of a Licensed Vacation Ownership Property (other than Specified Fractional Properties) or a Licensed Unbranded Property until such Owner is no longer an Owner of such Vacation Ownership Property; (ii) Platinum Preferred Guest status in the SPG Program to any initial purchaser of fractional units at Specified Fractional Properties during such initial purchaser’s term of ownership of such fractional unit; and (iii) Platinum Preferred Guest status in the SPG Program to any Owner who is a Five Star Elite member (as defined in the Vistana Specific Use SOP) until such Owner is no longer an Owner of Licensed Vacation Ownership Properties or Licensed Unbranded Properties or fails to meet the Five Star Elite member requirements which are set forth in the Vistana Specific Use SOP (collectively, the “Elite Offerings”).

 

[lizap]

Certainly will be interesting to follow. We stay at both Westin and Marriott hotels as well as TSs. They cater to a different market. Westins have a more modern, upscale feel. While Marriotts are very nice, generally they feel and look more traditional. IMO, Marriott beats Starwood on service. Some of the products are not interchangeable. It would not surprise me to see Marriott keep the Westin, Aloft, W, and St. Regis brands while merging Sheraton and Hampton into its current system.

There is a 75-year affiliation agreement. So it's guaranteed to exist for quite a bit longer than I expect to exist. I would imagine, but don't know for certain, that the agreement would also be applicable to any future program designed to replace/absorb SPG.



I agree, and the Marriott chairman has said as much. I think they will stay separate for 1-3 years while a comprehensive brand integration and loyalty strategy is developed, at which point they will both dissolve in favor of a replacement program that is neither Marriott Rewards nor SPG.

 

[Ron98GT]

Certainly will be interesting to follow. We stay at both Westin and Marriott hotels as well as TSs. They cater to a different market. Westins have a more modern, upscale feel. While Marriotts are very nice, generally they feel and look more traditional. IMO, Marriott beats Starwood on service. Some of the products are not interchangeable. It would not surprise me to see Marriott keep the Westin, Aloft, W, and St. Regis brands while merging Sheraton and Hampton into its current system.

Hampton (Inn) is part of the Hilton family of hotels.

Sheraton has a big brand name following, so I can't see Marriott changing the name.

Be interesting to see what happens to the Sheraton hotel on Kauai, in Poipu. They are converting some of the hotel units to TS's. Bet they are glad that none of the OF units are being converted.

Wow, that made me think about the Sheraton hotel on Maui next to Black Rock, along with the Westin hotel, next to Whalers Village and down fro the Marriott TS's. Marriott is going to have a large presence on Ka'Anapali, just like they do in Aruba, just larger.

 

[okwiater]

Be interesting to see what happens to the Sheraton hotel on Kauai, in Poipu. They are converting some of the hotel units to TS's. Bet they are glad that none of the OF units are being converted.

What makes you say only some of the units are being converted to timeshare? My understanding is that the entire property is being transferred to the newly spun-off timeshare business, and I can only imagine that this means they would eventually all be converted.

 

[lizap]

Oops, of course. I can see some Sheratons being changed to Marriotts, especially those in large urban areas..

Hampton (Inn) is part of the Hilton family of hotels.

Sheraton has a big brand name following, so I can't see Marriott changing the name.

Be interesting to see what happens to the Sheraton hotel on Kauai, in Poipu. They are converting some of the hotel units to TS's. Bet they are glad that none of the OF units are being converted.

Wow, that made me think about the Sheraton hotel on Maui next to Black Rock, along with the Westin hotel, next to Whalers Village and down fro the Marriott TS's. Marriott is going to have a large presence on Ka'Anapali, just like they do in Aruba, just larger.

 

[Ron98GT]

What makes you say only some of the units are being converted to timeshare? My understanding is that the entire property is being transferred to the newly spun-off timeshare business, and I can only imagine that this means they would eventually all be converted.

Just do a Google search. There are a number of news articles that specifically state that "a number of" units will be converted to timeshares. I couldn't find the one that stated that no OF units will be converted to TS's though.

http://honolulu.suntimes.com/hnl-news/7/100/50782/kauai-sheraton-plans-conversion-to-timeshares

http://www.sellmytimesharenow.com/blog/sheraton-kauai-resort-converted-timeshare/

http://www.staradvertiser.com/hawaii-news/kauai-sheraton-plans-conversion-to-timeshares/


UPDATE: I found it (red highlite added my me):

“Currently, the proposed plan includes keeping the ocean wing as a hotel, while converting the garden wing and undeveloped land adjacent to the property to Starwood Vacation Ownership product,” Chan said ...

http://advantagevacation.com/starwood-timeshare-plans-for-sheraton-kauai/


Hmmm, I don't remember the vacant property next door to the Sheraton, although I was only on the beach down from the Marriott, but Starwood reserved the right to build a TS on the vacant land. Interesting.