Marriott Destination Points...They have done it!!!!!! {Merged}

[DanCali]

The Cost of Converting

Skimming 7% = about $100

$1500 enrollment fee for resale owner has an oportunity cost of about 5% = $75 a year.

So overall you don't save that much...

So after giving it some more thought, here is the true cost to converters. I will give an example of a resale multiple week owner (worst case) for a 10 year horizon:

1) $2000 investment with opportunity cost of 5% is $100 a year.

2) The $2000 is a sunk cost and will not be recovered upon a resale so amortized over 10 years that's $200 a year. (An exception to this cost is that if a points unit sells for more than a weeks unit onthe resale market, this cost may be lower since you essentially do recover some of the $2000. This we won't know for a few years though.)

3) The 7% skimming is about 1/2 of a vacation day. In rental terms, on a $1400 weekly rental it's about $100 a year per week. For a multiple week owner, let's say it's $200 a year is they own 2 units.

4) Annual dues $200 a year.

These are all relevant costs that should be considered. They amount to $700 a year. Would that owner have paid $700 in II membership and exchange fees, and lockoff/split fees? Questionable...

For a multiple week retail owner (best case) this looks a bit beter, but the annual dues and skimmingcosts are still there. Opportunity cost and initiation fees sweeten the blow, but it's still over $500 in annual costs. So the so-called "savings" are not really there.

 

[m61376]

I'm more concerned with how this works than with who is wrong or right, and I think that the answer lies in the fact that the usage point charts we're reviewing are for exchange use and not for use at the home resort of the owned weeks. But I don't know the first thing about discovering if that or something else is the explanation.

It would shock me to learn that any timeshare company is allowed to pluck any number of points out of thin air willy-nilly to sell, and does not have to correlate those numbers to the intervals available for use. Presumably Marriott has filed all the necessary disclosures with all the proper licensing agencies - maybe our resident lawyers can find them.

I think the very fact that the points are for exchange use and not primarily for home resort use is what allows Marriott to legally skim points off the transactions; in reality, by charging more to reserve than they give for depositing, they are commandeering some of the value of each and every week being deposited into the points system. But, since people have the option of using weeks to reserve, they fulfill their legal obligations.

In reality, the points option is being marketed as merely an exchange option, and owners are paying for the privilege by giving up some of their week's value for the exchange (by virtue of the buy-sell gap).

The disappointing thing- or one of the disappointing things- is that it eliminates any increased flexibility in home resort use, since you need to convert to pints to use your home resort and, in many cases, booking the same weeks as usually traveled can approach 20% additional point cost.

Imagine how point devaluations will look in a few years if Marriott exercises their right to change valuations at up to 10% per annum.

 

[DanCali]

You save a bundle at $199 each year vs. current fees

This is just not true if you factor in all the costs. See my previous post.

 

[DanCali]

You misunderstand the system. You can enroll, reserve your week, deposit it in II, and make a WEEKS trade at no additional charge for internal Marriott exchanges. Just like today only cheaper if you make one trade.

Who told you this?

Because I talked to an II rep who told me weeks owners who trade with II trade weeks and points owners who trade through II will trade points. And if points owner trade points, I don't think you'll be able to deposit a week you reserved. Moreover, my guess is that the points will be what you are allotted, not what you reserved.

Did you see what you said in writing?

 

[m61376]

Who told you this?

Because I talked to an II rep who told me weeks owners who trade with II trade weeks and points owners who trade through II will trade points. And if points owner trade points, I don't think you'll be able to deposit a week you reserved. Moreover, my guess is that the points will be what you are allotted, not what you reserved.

Did you see what you said in writing?

I was actually told the same thing (that you would have the choice of converting to points or making a reservation at your home resort and depositing the week reserved either in whole or in part), and the agent verified it when I asked the same question several different ways. Of course, I'd like to see it in writing as well.

 

[rsackett]

Who told you this?

Because I talked to an II rep who told me weeks owners who trade with II trade weeks and points owners who trade through II will trade points. And if points owner trade points, I don't think you'll be able to deposit a week you reserved. Moreover, my guess is that the points will be what you are allotted, not what you reserved.

Did you see what you said in writing?

There is much confusion about this! What I understood is, if you take points for your week you can trade into other Marriotts through Marriott at no additional charge (after skimming fee ), OR you can resurve a week at your home resort and use it as you do now. If you want to trade the week you resurve it can be deposited in II and you pay IIs exchange fee for the week you get, Marriott or not.

Ray

 

[DanCali]

There is much confusion about this! What I understood is, if you take points for your week you can trade into other Marriotts through Marriott at no additional charge (after skimming fee ), OR you can resurve a week at your home resort and use it as you do now. If you want to trade the week you resurve it can be deposited in II and you pay IIs exchange fee for the week you get, Marriott or not.

Ray

I was actually told the same thing (that you would have the choice of converting to points or making a reservation at your home resort and depositing the week reserved either in whole or in part), and the agent verified it when I asked the same question several different ways. Of course, I'd like to see it in writing as well.

You guys should talk to an II rep to reconcile this, because i spoke to two II reps yesterday and they told me otherwise. Of course, yesterday was the first day for points so they may be misinformed, but I definitely wouldn't trust Marriott on this unless I see it in writing.

 

[VacationPro]

Whether or not you join the points system, you will still have all of the use options that are available to you now. Thus, you can still choose to reserve two consecutive or concurrent weeks for a particular year at 13 months. Or, if you join points, you can elect points for that year and be subject to the points rules.

This is why I am having a hard time understanding all the angst regarding the program. It seems to be me that everyone would get the exact same benefits as before (trading weeks for weeks through II) PLUS extra flexibility, for a cost that is lower than the cost of II and a single exchange. If you don't want that flexibility (which comes at a point cost), don't use it--stay in weeks and use II the way you have always used it.

I would have liked for Marriott to avoid the discrepancy in the points given and required and to have a lower flexchange valuation for last minute travel, but overall the program seems reasonable.

 

[BocaBum99]

So after giving it some more thought, here is the true cost to converters. I will give an example of a resale multiple week owner (worst case) for a 10 year horizon:

1) $2000 investment with opportunity cost of 5% is $100 a year.

2) The $2000 is a sunk cost and will not be recovered upon a resale so amortized over 10 years that's $200 a year. (An exception to this cost is that if a points unit sells for more than a weeks unit onthe resale market, this cost may be lower since you essentially do recover some of the $2000. This we won't know for a few years though.)

3) The 7% skimming is about 1/2 of a vacation day. In rental terms, on a $1400 weekly rental it's about $100 a year per week. For a multiple week owner, let's say it's $200 a year is they own 2 units.

4) Annual dues $200 a year.

These are all relevant costs that should be considered. They amount to $700 a year. Would that owner have paid $700 in II membership and exchange fees, and lockoff/split fees? Questionable...

For a multiple week retail owner (best case) this looks a bit beter, but the annual dues and skimmingcosts are still there. Opportunity cost and initiation fees sweeten the blow, but it's still over $500 in annual costs. So the so-called "savings" are not really there.

Your financial analysis is directionally correct. But you are inappropriately mixing depreciation and opportunity cost.

Instead, you should use a loan amortization model. You can use a 10 year loan paid monthly or annually. That is best way to compare monthly or annual costs of the upfront fee of $2000.

To convert that into a monthly amount, you use a 10 year loan @ 5% interest. Your monthly payment on such a loan would be: $21.21/month or $254.56/year. That's a lot less than the $300 you come up with.

The reason this works is that instead of paying an upfront fee, you are financing it over the 10 year period. At the end of the period the loan is fully amortized and your terminal value of the asset is zero. You should probably use a rate higher than 5% because you can't get a consumer loan easily for that low of a rate.

To use opportunity cost, you have to have compare one CAGR (compound annual growth rate) and compare it to an alternative investment with a different CAGR. If you normally invest into projects with 8% CAGR, then if you make an alternate investment at 3% CAGR, your opportunity cost is 5%.

 

[cruisin]

It does seem a little illogical of Marriott to behave this way - how do they expect to get (scarce fixed-week) inventory from owners such as yourself in order to offer them to other points members at the very high rates you mention?

Marriott doesnt need the scarce weeks, they can sell the promise of these scarce weeks, even if one week 52 at a resort is not in the pool, it "could be". If its available when at the time of booking, it can be yours. Big ifs.

Marriott does not need to build nice resorts anymore, they need create points, they have plenty of nice resorts to sell them from already.

I can see it now, Come to Marriott's beautiful new resort just across the street from the beach. the beach by the way, will be that beautiful, but non swimmable stretch of waterfront.


For the first time in Marriott's history, Thousands of the new points owners will not be able to book what they want, there will be a massive resell market for these points, just like the other points based systems. Boca might have just found his next big enterprise.

The scariest thing in any timeshare system, is when a developer does not have to build a resort that they have to sell on its own merits. As a whole, from this day forward Marriott will only get worse, never better.

 

[catharsis]

This is why I am having a hard time understanding all the angst regarding the program. It seems to be me that everyone would get the exact same benefits as before (trading weeks for weeks through II) PLUS extra flexibility, for a cost that is lower than the cost of II and a single exchange. If you don't want that flexibility (which comes at a point cost), don't use it--stay in weeks and use II the way you have always used it.

I would have liked for Marriott to avoid the discrepancy in the points given and required and to have a lower flexchange valuation for last minute travel, but overall the program seems reasonable.

There is much confusion about this! What I understood is, if you take points for your week you can trade into other Marriotts through Marriott at no additional charge (after skimming fee ), OR you can resurve a week at your home resort and use it as you do now. If you want to trade the week you resurve it can be deposited in II and you pay IIs exchange fee for the week you get, Marriott or not.

Ray

My interpretation is that one can use the internal exchange scheme, 'free' if you are a member, to swap using POINTS. Marriott to marriott swaps using points will be free and there will be no requirement to pay $109 or whatever as it is already paid for by your membership (and the bid/offer spread Marriott are skimming)

HOWEVER, your rights to deposit a week into II are unaffacted - BUT you must maintain a separate personal 'weeks' II membership to achieve this and any Marriott-Marriott exchanges will still require the internal exchange fee.

Anyone believeing that they will pay the club fees and then exchange weeks internally without paying exchange fees are misled, would be my guess. Why would Marriott create a points system and at the same time subsidise those people who do not wish to use it?

A second question will arise as to whether the deposit of a 'trust' members week into II can even be done, or whether enrolling gives the right to marriott to get into 'SVN-style' tricks where they can deposit a week of their choice on your behalf instead (and rent out for points or cash your prime week).

Neither of these questions is yet answered to my satisfaction.

 

[mickeypops]

I'm glad I simply use my week at my home resort, have never exchanged and have no intention of ever doing so.

This system may seem straightforward enough to the seasoned and experienced amongst you. Me? I've got a headache just trying to understand what it's all about.

I bought my timeshare to enjoy some quality holidays at a place we love, not to have to become a forensic accountant.

(OK, I'll get my coat.........)

 

[Asia2000]

I'm glad I simply use my week at my home resort, have never exchanged and have no intention of ever doing so.

This system may seem straightforward enough to the seasoned and experienced amongst you. Me? I've got a headache just trying to understand what it's all about.

I bought my timeshare to enjoy some quality holidays at a place we love, not to have to become a forensic accountant.

(OK, I'll get my coat.........)

Smart man. Do not waste your time with all of the confusion this program offers. It does not appear to be worth it in the slightest.

 

[JimIg23]

HOWEVER, your rights to deposit a week into II are unaffacted - BUT you must maintain a separate personal 'weeks' II membership to achieve this and any Marriott-Marriott exchanges will still require the internal exchange fee.

.

Has anyone verified this with II or MCV?

 

[vacationlover2]

Mickeypops,

That is the funniest thing ever. Good for you.

 

[timtax]

II Account

Has anyone verified this with II or MCV?

I called II (Marriott Desk) and they transferrred me to Marriott Owner Services. They told me that I would keep my existing account (which is paid for thru 2014) and that I would receive an AC upon joining the new program and another AC in 2 years. Furthermore, since I have several weeks on deposit with exchange requests pending, I was told that I could cancel my pending requests, get the fees back and request the exchanges now with no fees. This would affect my place in line though. This would return 2 exchange fees to help pay for enrollment I guess.

 

[SMB1]

If I join the points program with my deeded week, then I decide to sell my timeshare for good...would I be selling points then or selling my deeded week then?

It is my understanding that you still own your deed. You should be able to sell it as you always have. You can also opt out (un-enroll) your week from the points program, which puts you right back where you are right now....

 

[SMB1]

I'm at Frenchman's Cove which is still in the process of being built. I'm wondering if it will become more popular in the coming years as it is finished and more people know about it. If so, it's value would go up; yet I have to accept the points I'm being given now while it is less popular/known.

Once I join, I'm locked in to the points they say it's worth right now instead of potentially more at a later date?

Not necessarily. Just like others have been upset about the fact that Marriott can change the values in the future; I imagine.. believe...hope this is so values can fluctuate with with demand.

 

[JimIg23]

I called II (Marriott Desk) and they transferrred me to Marriott Owner Services. They told me that I would keep my existing account (which is paid for thru 2014) and that I would receive an AC upon joining the new program and another AC in 2 years. Furthermore, since I have several weeks on deposit with exchange requests pending, I was told that I could cancel my pending requests, get the fees back and request the exchanges now with no fees. This would affect my place in line though. This would return 2 exchange fees to help pay for enrollment I guess.

Interesting. I am in the same exact boat. member to the end of 2013 and two pending requests.

However, my pending requests are for HI next year (All Marriotts, except for a Weston). I would be very iffy about canceling them now and lose my place in line

 

[timtax]

Pending Requests

Interesting. I am in the same exact boat. member to the end of 2013 and two pending requests.

However, my pending requests are for HI next year (All Marriotts, except for a Weston). I would be very iffy about canceling them now and lose my place in line

I agree that the savings may not be worth the risk of not getting your exchange but it does appear that there will be only one II account which will maintain the ability (although possibly reduced) for week to week exchanges both with Marriott and externally.

When I factor in the reduced lockoff exchange fees, waiving the 2011 club fee and the 800 Bonus Points offered by Marriott, the $695 enrollment fee doesn't seem too bad. I will probably join but still use my weeks as I always have (trade through II or occupy).

 

[ArtsieAng]

This is why I am having a hard time understanding all the angst regarding the program. It seems to be me that everyone would get the exact same benefits as before (trading weeks for weeks through II) PLUS extra flexibility, for a cost that is lower than the cost of II and a single exchange. If you don't want that flexibility (which comes at a point cost), don't use it--stay in weeks and use II the way you have always used it.

I would have liked for Marriott to avoid the discrepancy in the points given and required and to have a lower flexchange valuation for last minute travel, but overall the program seems reasonable.

It's not that simple! The problem is that II will never again be what it once was. It is undeniable that this new system will forever change your chances of exchanging through II the way you had in the past. Your chances of getting a Marriott exchange will be greatly diminished.

As far as the "flexibility" in the new program goes, it is coming at a substantial price to current owners. The value of your ownership has been significantly devalued in the point system. Therefore, you are short the number of points you would need to exchange through Marriott into a comprable week without either buying more points, or taking them from another week/year usage.

I discussed the point shortage yesterday with Marriott. when I told them that I did not have enough points to exchange into my home resort, their answer to me was to buy more points........They suggested that I pay $9,200 to use the week that I have already purchased from them at a premium price, not resale.

The only thing that the "flexibility" in the new program is allowing, is for you to trade down.

Edited to add: Reserving your home week will also become much more challenging. There is no home resort priority. So, the system will never be what it once was. It is not a situation where if you do like the new system, you can simply use the old system......The "old system" is gone!

 

[SMB1]

I think the reason for the difference in points from what you receive and what Marriott receives to prevent an over glut of bookings for your week. If it requires more points for the Prime Weeks, then people will be less likely to fight for them. Thus, leaving the prime week members that reserved them through their week's program, not the Destinations Points.

According to John this is a benefit of a points program. I guess if you are buying points staring today you are already buying the # of points you need to go where you want and are not buying the average of the "old seasons". This is why is is hard for us to wrap our hands around this concept. Unless we want to buy the extra few hundred points need to get what you want in the season size unit you already own we might be better off sticking with what we have. I'm undecided. I might join for the flexibility, take advantage of the lower fee, and play the trade down in size or season game occasionally if that fits my needs for a certain year.

Just curious...If Marriott had made it so that weeks owners who enroll had to book their week first then give it up for a # of points based on the week reserverd (so now you are not getting the average points for the season) and some are getting more points than others for their same resort/season (even though they paid the same for their unit and pay the same maintenance fee), ala redweek, would we have more people happy about the new program or still have people complaining that they are getting ripped off. In this senario we would still have everyone competing to reserve the best weeks just to trade or convert to points, which is brings us back to what his post started with.

 

[wsrobinson]

So after giving it some more thought, here is the true cost to converters. I will give an example of a resale multiple week owner (worst case) for a 10 year horizon:

1) $2000 investment with opportunity cost of 5% is $100 a year.

2) The $2000 is a sunk cost and will not be recovered upon a resale so amortized over 10 years that's $200 a year. (An exception to this cost is that if a points unit sells for more than a weeks unit onthe resale market, this cost may be lower since you essentially do recover some of the $2000. This we won't know for a few years though.)

3) The 7% skimming is about 1/2 of a vacation day. In rental terms, on a $1400 weekly rental it's about $100 a year per week. For a multiple week owner, let's say it's $200 a year is they own 2 units.

4) Annual dues $200 a year.

These are all relevant costs that should be considered. They amount to $700 a year. Would that owner have paid $700 in II membership and exchange fees, and lockoff/split fees? Questionable...

For a multiple week retail owner (best case) this looks a bit beter, but the annual dues and skimmingcosts are still there. Opportunity cost and initiation fees sweeten the blow, but it's still over $500 in annual costs. So the so-called "savings" are not really there.

Don't the 800 points they give you initially have some value? As such, it throws your equation off. I can make a decent case they're worth an easy 1K based on what I've seen. I plan on using mine to book a 4-5 night stay off-season at Manor Club. At $250/night, that's $1000 or $1250 depending on nights. I actually have points left over as it's 100 pts/night.

 

[wsrobinson]

Is that correct- since it appears that it only "costs" 3,325 points to book a 2BR Gold OS room there? Am I reading something wrong?

Ultimately, I think the 4550 will be split in half. There have been some point irregularities noted here. Marriott has worked through some. My guess is that they will adjust these downward accordingly.

 

[hipslo]

I discussed the point shortage yesterday with Marriott. when I told them that I did not have enough points to exchange into my home resort, their answer to me was to buy more points........They suggested that I pay $9,200 to use the week that I have already purchased from them at a premium price, not resale.

Were they actually able to say this with a staright face?

Again, its no wonder that fletch left.