Losing Vacation Club Points when the resort closes

[Superchief]

MVC, like Marriott and many other large corporations appear to be forgetting that customer loyalty is critical to long term growth and profitability. In most industries, 70%+ of revenue comes from 30% of customers. The Marriott family built their empire by realizing that loyal customers keep coming back and influence friends/ families by their recommendations. Many of us expanded our timeshare portfolios (and hotel stays) due to the Marriott operating philosophy. I expect a large proportion of MVC timeshare purchases came from portfolio expansion of current owners as well as owner referrals.

Now the focus is on revenue per stay, regardless of the impact to current owners. This will cost MVC in the long run because current owners will no longer make referrals or purchases when they aren't respected as stakeholders.

 

[Superchief]

Fair enough but the decisions needed to be at the corporate level for such issues.

While I agree that corporate should provide some guidelines and policies regarding how to handle these situations, I believe that individual resort management needs to have some flexibility based on the situation. Many legacy resorts still have majority ownership by owners, while others have significant trust ownership. I can understand corporate setting the policies for majority trust owned resorts, but not legacy, especially when the resorts are partially open. Corporate management are the farthest removed from the customer and conditions at the resort, and therefore are in the least informed position regarding the potential impact of their decisions. Best in class companies always provide flexibility to customer facing managers. I've worked for 'corporate control' oriented companies and they all suffered from this management approach in the long run. There needs to be a balance.

 

[bizaro86]

Vistana used it's own inventory to accomodate WSJ owners with points elsewhere. Marriott wasn't even willing to use its skim to accomodate elsewhere.

Ymmv

Fair enough but the decisions needed to be at the corporate level for such issues.

Making the right decision is more important than who makes it.

 

[Dean]

While I agree that corporate should provide some guidelines and policies regarding how to handle these situations, I believe that individual resort management needs to have some flexibility based on the situation. Many legacy resorts still have majority ownership by owners, while others have significant trust ownership. I can understand corporate setting the policies for majority trust owned resorts, but not legacy, especially when the resorts are partially open. Corporate management are the farthest removed from the customer and conditions at the resort, and therefore are in the least informed position regarding the potential impact of their decisions. Best in class companies always provide flexibility to customer facing managers. I've worked for 'corporate control' oriented companies and they all suffered from this management approach in the long run. There needs to be a balance.

I completely disagree, this should have been a corporate decision with resort input rather than the reverse. It would have been inappropriate IMO to leave it up to each resort. Exchangers should have been treated as such regardless of the other decisions but stratified between Marriott exchangers and non Marriott.

Making the right decision is more important than who makes it.

IMO they didn't make a bad decision, they made a reasonable one. And while on the surface I would have done it resort by resort, we don't have all the information they had.

 

[bazzap]

I completely disagree, this should have been a corporate decision with resort input rather than the reverse. It would have been inappropriate IMO to leave it up to each resort. Exchangers should have been treated as such regardless of the other decisions but stratified between Marriott exchangers and non Marriott.

IMO they didn't make a bad decision, they made a reasonable one. And while on the surface I would have done it resort by resort, we don't have all the information they had.

Perhaps if MVC corporate had at least more openly shared some of they key information they based their decisions on, then those directly affected might have been more understanding of the considerable impact it had on them (or not)?

 

[Dean]

Perhaps if MVC corporate had at least more openly shared some of they key information they based their decisions on, then those directly affected might have been more understanding of the considerable impact it had on them (or not)?

No doubt they could have done it better and been more forthcoming and interactive. But just looked at with the information we have, treating Marriott exchangers as exchangers was reasonable. Even had they done it by resort, they still would have prioritized exchangers at the bottom as they should have. And unless treating HHI as a group were outside the rules/contractual situation, it's impossible to call it an unreasonable choice.

 

[bazzap]

No doubt they could have done it better and been more forthcoming and interactive. But just looked at with the information we have, treating Marriott exchangers as exchangers was reasonable. Even had they done it by resort, they still would have prioritized exchangers at the bottom as they should have. And unless treating HHI as a group were outside the rules/contractual situation, it's impossible to call it an unreasonable choice.

Fair enough if it is your view that this approach was reasonable, it is not my view though.

 

[Dean]

Fair enough if it is your view that this approach was reasonable, it is not my view though.

Barry, my views are these.

• There were tough choices to be made.
• There were only losers, no winners but some lost more than others.
• In order for the choices made to be inappropriate one would have to argue they were outside what was contractually allowed by the POS or other legal documents.
• That a Marriott owner who was exchanging is still an exchanger at the core and that the underlying ownership would only be a tie breaker just as it is for unit assignments at the corporate level even though a few resorts tweak this issue somewhat.
• It's certainly fair to say that one feels there were better choices, I feel that way as well but we all have to admit we don't have all the data they had.
• Marriott made the choice to favor owners and others over exchangers by crossing resort lines, for some this was out of bounds but if contractually allowed I'd argue it was a viable choice.
• That they could have done a better job of communication.
• That arguing directly with an exchanger who happened to be an owner is a mix bag, directing them back to II was likely the best approach though not returning a call as the first call was inappropriate (back and forth with multiple calls likely was not).
• I suspect II was likely more involved in the decision than they communicated as well, that's not to say they agreed with it if only looking out for their own best interest.

 

[bizaro86]

• In order for the choices made to be inappropriate one would have to argue they were outside what was contractually allowed by the POS or other legal documents.

I don't agree that the right thing to do is solely defined by ones legal obligations.

I try to treat others as I would like to be treated, and find the golden rule has usually worked out well for me in life. There is no reason marriott couldn't have done better by its guests (Vistana did).

I am actually think MVCI did at least as poorly in giving holding points back to those whose points reservations they cancelled.

Again, somewhere where their material skim could come in to play for the benefit of their customers not just their bottom line.

 

[Dean]

I don't agree that the right thing to do is solely defined by ones legal obligations.

I try to treat others as I would like to be treated, and find the golden rule has usually worked out well for me in life. There is no reason marriott couldn't have done better by its guests (Vistana did).

I am actually think MVCI did at least as poorly in giving holding points back to those whose points reservations they cancelled.

Again, somewhere where their material skim could come in to play for the benefit of their customers not just their bottom line.

Vistana's options and situation may have been different internally. Maybe they had more inventory to play with, I don't know but it's entirely possible. I don't think anyone can argue Marriott couldn't have done differently or better but I don't see how they can legitimately argue the choices made were inappropriate even if they thought there were better choices.

 

[bazzap]

Barry, my views are these.

• There were tough choices to be made.
• There were only losers, no winners but some lost more than others.
• In order for the choices made to be inappropriate one would have to argue they were outside what was contractually allowed by the POS or other legal documents.
• That a Marriott owner who was exchanging is still an exchanger at the core and that the underlying ownership would only be a tie breaker just as it is for unit assignments at the corporate level even though a few resorts tweak this issue somewhat.
• It's certainly fair to say that one feels there were better choices, I feel that way as well but we all have to admit we don't have all the data they had.
• Marriott made the choice to favor owners and others over exchangers by crossing resort lines, for some this was out of bounds but if contractually allowed I'd argue it was a viable choice.
• That they could have done a better job of communication.
• That arguing directly with an exchanger who happened to be an owner is a mix bag, directing them back to II was likely the best approach though not returning a call as the first call was inappropriate (back and forth with multiple calls likely was not).
• I suspect II was likely more involved in the decision than they communicated as well, that's not to say they agreed with it if only looking out for their own best interest.

Dean, I wouldn’t question that MVC were contractually allowed to make the decisions they did.
I just believe that as others, including Vistana, took a more positive approach in recognition of their owner exchangers, MVC fell short from a moral perspective in caring for their loyal owners.
This is only my opinion, but opinions do significantly influence how we judge and engage with companies going forward.

 

[Dean]

Dean, I wouldn’t question that MVC were contractually allowed to make the decisions they did.
I just believe that as others, including Vistana, took a more positive approach in recognition of their owner exchangers, MVC fell short from a moral perspective in caring for their loyal owners.
This is only my opinion, but opinions do significantly influence how we judge and engage with companies going forward.

That is fair, I would take the stance that they could have done better and being inappropriate are two totally different issues. For me personally to see it as an appropriate I would have to see it as outside the contractual boundaries even if they had disagreed. Otherwise it’s just personal preference with no other basis. And if that was my take on the situation, I would likely be looking to move out of their system completely.

 

[Superchief]

I totally disagree that MVC corporate should make the decisions for the individual resorts regarding inventory policy unless they own all of the inventory. A majority of the inventory at Ocean Pointe and most Hilton Head resorts is owned by individual owners, not by MVC. We have ownership representation on the boards for each resort, and they work with resort management to determine maintenance fees and key decisions regarding projects at their resort. MVC corporate has no interaction with or input from resort owners. Corporate can establish corporate standards and policy guidelines, but should not be able to control inventory they don't own. Not only do owners pay their maintenance fees, but also have to absorb the repair costs for their resort.

I'd be surprised if contract obligations weren't broken at Hilton Head and Ocean Pointe when the resorts were open with limited inventory. The fact that Encore packages were honored when II exchanges were denied is an example of potential conflict of interest or breech of contract. Each II exchange week was already paid for by an owner who deposited their week. MVC could easily refund or reschedule Encore reservations, while owner/exchangers lost their Maintenance fees and ownership rights. Probably the most fair allocation approach would be to allocate inventory based on the % of reservation types scheduled for that week, although I don't have a problem with weeks owners and DC point stays getting priority. Either way, the resort management should have significant input in this decision.

These are things that I think MVC corporate did poorly:

• No proactive communications with impacted owners
• Priority given to Encore Package stays over owners/ MVC II exchangers
• Poorly trained customer service reps who were rude to owners and refused to provide supervisor access
• Total lack of transparency regarding how they were allocating inventory (Learned that Encore Package people were being accommodated via TUG and Resort Owner websites)
• No refunds of points or reschedule weeks even though resorts were accepting some guests
• No response from management to emails requesting explanations or updates
• II exchangers didn't learn of exchange cancellation until the last minute (I was in contact with II daily waiting for the updates from MVC)
• MVC sponsored travel insurance had hidden restrictions and limits that disallowed many valid claims (60 day restriction and 2 year limit on use period that weren't communicated in policy description)

MVC obviously now prioritizes their profits over ownership concerns. I hope they learned from their mistakes but I don't see any signs of change. They just buy their competitor who treated their owner more fairly. If corporate management increases their involvement in local resort decisions or inventory management, I will likely start selling off my MVC inventory.

 

[Dean]

I'd be surprised if contract obligations weren't broken at Hilton Head and Ocean Pointe when the resorts were open with limited inventory.

If one holds the opinion that this is true, it would follow to feel Marriott acted inappropriately and legal action should be on the table. If they feel it MIGHT be the case then their absolute opposition should be conditional as well. To me a large part of the discrepancy is that for many this was an act against members but in reality is affected exchagangers who also happen to be members and that is the important distinction IMO.

I will likely start selling off my MVC inventory.

I feel that is the appropriate response for one who truly feels as you do. It would be mine if I felt this way.

I don't get the idea that people feel Marriott should donate their inventory or that other members should shoulder the burden by giving full use points back. They could have but to expect it seems entitlement to me.

 

[dioxide45]

I don't get the idea that people feel Marriott should donate their inventory or that other members should shoulder the burden by giving full use points back. They could have but to expect it seems entitlement to me.

I guess the main question is, whose ownership should take priority in this situation? The company with complete control of the allocation of inventory, or those at the mercy of said company?

 

[bizaro86]

I guess the main question is, whose ownership should take priority in this situation? The company with complete control of the allocation of inventory, or those at the mercy of said company?

Indeed. It seems like a potential extension of contract proferentem to me (the doctrine that ambiguous contracts are interpreted against the party who drafted them) or the ancient rule known by children and parents alike that whoever divides the candy picks their share last.

If my business depended on my customers absolute trust that I was treating them fairly (like say if I was selling "points" and promising people vacations) I would go out of my way to make sure my policies treated people fairly. IMO it's too bad nobody litigated that on HHI, because without a specific rule saying they can allocate inventory between resorts in the governing docs I doubt a judge would consider that appropriate, but unless it gets tried it's still ambiguous.

 

[Dean]

I guess the main question is, whose ownership should take priority in this situation? The company with complete control of the allocation of inventory, or those at the mercy of said company?

I would agree that who should take precedence is part of the issue. The main issue is what does the contractual agreement say and it doesn't specifically address this issue I don't believe other than giving them free range on the reservation aspects. I would question the framing of it as control vs non control as an emotional response. Personally it's internal vs exchange in my book, that some of those exchangers happen to also be owners really isn't particularly applicable from a technical standpoint.

 

[csalter2]

At the risk of seeming insensitive, I don’t understand the problem. You make a reservation for hurricane season, but you complain because it occurs? Purchase the insurance. Don’t blame Marriott for Mother Nature’s actions. It’s like the people who build houses near volcanoes, on cliffs and other places that have possible and/or several natural disasters. They knew it before they bought there and should take the appropriate steps to plan for the worse. Some places can’t even get insured. That should give you a hint not to buy a house there.

 

[bizaro86]

At the risk of seeming insensitive, I don’t understand the problem. You make a reservation for hurricane season, but you complain because it occurs? Purchase the insurance. Don’t blame Marriott for Mother Nature’s actions. It’s like the people who build houses near volcanoes, on cliffs and other places that have possible and/or several natural disasters. They knew it before they bought there and should take the appropriate steps to plan for the worse. Some places can’t even get insured. That should give you a hint not to buy a house there.

I think if you made a reservation for a resort that was not closed by a hurricane, then your reservation should be honored.

What marriott did, was put guests who they would have to reimburse from a resort that was closed into rooms at a resort that was still open.

 

[Superchief]

Ownership of the inventory should dictate how the inventory is allocated. When I purchased my legacy week, I established ownership of 1 of 52 weeks of a 2 BR villa with a right to use in my purchased season. When I purchased from Marriott, they promoted that I actually owned this inventory and I had the added benefit of being able to exchange it for MR points (now worthless) or exchange through II (who then used my one week deposit to exchange to another timeshare that that owner had deposited). All exchanged weeks were based on a deposited week for which I paid my annual MF's. Marriott (now MVC) only had access to inventory for the weeks exchanged for MR points or for unsold inventory. When the DC program was initiated, MVC gained additional access to inventory purchased by the trust or inventory for enrolled weeks that were converted to points. My understanding is that DC inventory is supposed to be used for DC reservations, but not for MVC rentals or Encore packages. How would MVC justify the decision to use limited inventory for Encore packages while totally withholding inventory from II exchangers who had ownership based deposits for which MF's had been paid?

Basically, MVC is devaluing an important benefit (II internal exchanges) they promoted to convince us to buy their products so they can offer special packages to nonowners so they can lie to them to get them to buy their 'modified' products. II exchangers are not 'outsiders', and all II exchange inventory required a deposit from an owner and an investment from another owner (mostly MVC). How is it fair or a good business decision to give Encore package discount shoppers with no skin in the game priority over a MVC owner who uses the II exchange with their paid for owned week? Dean seems to be forgetting that many II exchangers are owners who have paid for their week and right to exchange them for other MVC weeks. Now that II is owned by MVC's parent company, would they make a similar decision?

I learned three valuable lessons with my experiences:
1. Don't Exchange through II because they no longer indicate MVC or home resort exchange source, and MVC may cancel these exchange reservations.
2. Don't trust MVC corporate management to value the needs or concerns of owners who have invested significant resources in their MVC portfolio.
3. Don't buy the MVC sponsored travel insurance because the fine print will disallow a high percentage of claims.

 

[Superchief]

At the risk of seeming insensitive, I don’t understand the problem. You make a reservation for hurricane season, but you complain because it occurs? Purchase the insurance. Don’t blame Marriott for Mother Nature’s actions. It’s like the people who build houses near volcanoes, on cliffs and other places that have possible and/or several natural disasters. They knew it before they bought there and should take the appropriate steps to plan for the worse. Some places can’t even get insured. That should give you a hint not to buy a house there.

The issue here isn't cancellation for a closed resort due to a hurricane. If this was the case, I wouldn't expect compensation. The issue is how MVC allocated inventory for resorts with limited inventory due to hurricane damage several weeks after the hurricane. MVC gave Encore package guests priority over all II exchangers. Also, the insurance was worthless for anyone checking in 60+ days after the storm due to the fine print in the policy. MVC did similar things at Hilton Head resorts that weren't damaged at all.

Hurricane season in Florida runs from July through October, so there is some risk of a storm for extended periods each year. Our reservation was for the end of October, but the inventory limitation was due to a storm over two months earlier. Should I avoid making any reservations for 6 months to avoid hurricane risk? I had the insurance but it didn't cover the situation.

 

[csalter2]

The issue here isn't cancellation for a closed resort due to a hurricane. If this was the case, I wouldn't expect compensation. The issue is how MVC allocated inventory for resorts with limited inventory due to hurricane damage several weeks after the hurricane. MVC gave Encore package guests priority over all II exchangers. Also, the insurance was worthless for anyone checking in 60+ days after the storm due to the fine print in the policy. MVC did similar things at Hilton Head resorts that weren't damaged at all.

Hurricane season in Florida runs from July through October, so there is some risk of a storm for extended periods each year. Our reservation was for the end of October, but the inventory limitation was due to a storm over two months earlier. Should I avoid making any reservations for 6 months to avoid hurricane risk? I had the insurance but it didn't cover the situation.

If the insurance would not cover it, then I personally would not have made that reservation. However, I can understand the dilemma one would have in making the reservation which is why that season is lower priced.

 

[Dean]

The issue here isn't cancellation for a closed resort due to a hurricane. If this was the case, I wouldn't expect compensation. The issue is how MVC allocated inventory for resorts with limited inventory due to hurricane damage several weeks after the hurricane. MVC gave Encore package guests priority over all II exchangers. Also, the insurance was worthless for anyone checking in 60+ days after the storm due to the fine print in the policy. MVC did similar things at Hilton Head resorts that weren't damaged at all.

Hurricane season in Florida runs from July through October, so there is some risk of a storm for extended periods each year. Our reservation was for the end of October, but the inventory limitation was due to a storm over two months earlier. Should I avoid making any reservations for 6 months to avoid hurricane risk? I had the insurance but it didn't cover the situation.

It's actually June through Nov technically, half the year. We travel routinely during Hurricane season and the only time I get the insurance is when it covers multiple trips. I also cruise an average of once a year and never get the insurance there either though for cruises you historically could cancel up to 60-75 days before for a full refund though lately some have started offering cheaper non refundable rates similar to what Marriott often does with some hotels.

 

[dioxide45]

It's actually June through Nov technically, half the year. We travel routinely during Hurricane season and the only time I get the insurance is when it covers multiple trips. I also cruise an average of once a year and never get the insurance there either though for cruises you historically could cancel up to 60-75 days before for a full refund though lately some have started offering cheaper non refundable rates similar to what Marriott often does with some hotels.

For us, we never buy insurance for trip cancellation. If an instance like this impacted us, we would just cut our losses and move on. We wouldn't be happy, but it is the risk we take. For cruises, we take travel insurance for medical coverage and emergency evacuation with hospital of choice as an option. I have seen people medivaced off a cruise ship. That certainly isn't cheap.

 

[VacationForever]

From last year's reports on TUG, MVC returned points to the Holding Accounts. This thread is indicating that you will lose the points. Is this from current and real experience?