Marriott points and internal exchange program - the latest info

[BocaBum99]

Certainly, many weeks go unreserved and many deposits go unused. No disagreement there. But, Marriott already has control of unreserved weeks. This is not something they gain by introducing a point system. Whether owners deposit or not is irrelevant, because Marriott cannot double-book a unit that is owner reserved. The only upside I see is that last minute owner cancellations would go back into Marriott inventory rather than II. Marriott could then recycle that inventory.



Yes, but unreserved weeks in a point system have no more value than unreserved weeks in the current system. Are you saying that there will be more unreserved weeks under a point system than the current system? Maybe so.

I'm not talking about today's unreserved units in Marriott. I am talking about reserved weeks that get deposited only because an owner wants to extend the life of their weeks. The beneificiary of those units is II. If Marriott takes that back, then that is a huge potential to reclaim weeks that II is profiting from.

Even for units that go unreserved in Marriott, an internal exchange system allows them to control who gets what weeks in external exchange. When owners sign over their weeks to Marriott, the owner loses the ability to choose which unit gets deposited into the exchange company. For instance, in the past, someone who owns a Maui Napili Village who wants to go somewhere else must deposit that week into II. If that owner is part of the internal exchange system, Marriott will give them a ton of points and if the owner wants to go to a non-Marriott resort, that Napili Village doesn't have to go to the exchange company. They deposit a much less valuable week. The difference in the value of that deposit is value that accrues to Marriott and/or owners.

 

[jerseyfinn]

time will tell . . . patience is a virtue

Well, I'm glad that I sort of missed all of this as I usually wander in once a week to TUG to see what's up. It takes me a long time to parse through the first two pages of this thread and then I quit reading . . . so excuse me if I miss something from pages 3 through 6. :deadhorse:

First off, sincere thanks to DaveM for his earnest info update. Hope you're having a nice holiday. I already know that you've become personally reacquainted with the old addage about "shooting the messenger" but I think most here do genuinely appreciate your efforts . Likewise I sincerely appreciate a chunk of the the commentary here as some posters are indeed thinking outloud and positing some good questions about "proposed changes". Some of you have given me ( and other TUGgers) some instructive thoughts to ponder.

As to the rest of it. I gotta be honest and say that there's so much speculation ( some of it is sounds more like Puritan heresay ) floating around on this thread that I really don't see anything useful flowing from it. Bottom line is that if you're an MVC owner, you've got to be interested in any talk of internal trades or a points system. But in truth, we have nothing at all to go on except that DaveM asserts that Marriott is seriously considering something -- and that's good enough for me at this moment.

So yeah, I'm concerned as we, like many folks here, are considerably invested in MVC. But I've always known that Marriott is in timeshare for the revenue, I'm comfortable witih that fact, & I hope that the integrity and creativity of Marriott comes through when they finally lay their cards on the table. There is indeed a lot at stake for all parties involved. All I can do is sit back, utilize my weeks, and wait for the letter from Marriott to arrive whenever that day will be.

Now back to speculating about how many angels fit on the head of a pin :zzz:

Barry

 

[gmarine]

It amazes me the number of posts and assumptions (guesses) being made about a program that doesn't exist. Sure it might be fun to talk about as far as potential but, those of you that are worried really shouldn't be concerned at this point. Nothing said in the almost 400 posts in this thread could be considered anywhere close to acurate. It's ALL a guessing game.

$2,000 to join? That's just a figure pulled out of the air. The "source" said it would be low enough that the majority would join. To me that means $500 or less. At $200 I'd jump on the band wagon. At $500 I'd still have to think about it. At $2,000 I'm betting a lot of owners will be more than happy to keep their ownership as it is.

Great point Doug.

Marriott is going to its best keeping the price low enough to entice ALL owners to join. The company is going to want the recurring revenue of exchanges and is going to want to show that the program works by very simply showing the large amount of owners who join. The developers of this program are not going to take a chance on rolling it out at a price that many owners will see as too high.

Any Marriott bashing isnt necessary since NOTHING is known about the program yet. NOTHING at all. It is all rumours,guesses and speculation.

Marriott is a very owner friendly timeshare company. There is no indication that they wont continue to be the same way.

And everything I've posted is still just another guess.

 

[PerryM]

It amazes me the number of posts and assumptions (guesses) being made about a program that doesn't exist. Sure it might be fun to talk about as far as potential but, those of you that are worried really shouldn't be concerned at this point. Nothing said in the almost 400 posts in this thread could be considered anywhere close to acurate. It's ALL a guessing game.

$2,000 to join? That's just a figure pulled out of the air. The "source" said it would be low enough that the majority would join. To me that means $500 or less. At $200 I'd jump on the band wagon. At $500 I'd still have to think about it. At $2,000 I'm betting a lot of owners will be more than happy to keep their ownership as it is.

I suggest that worst case scenarios be used since you can believe that Marriott is rumoring the best case scenario for Marriott.

This is Marriott's rumor that they plug hundreds of times a day - if the Marriott owner base gets all riled up its their fault.

There is NO valid reason for Marriott to spread rumors that frighten Marriott owners - none but stupidity.

 

[BocaBum99]

It amazes me the number of posts and assumptions (guesses) being made about a program that doesn't exist. Sure it might be fun to talk about as far as potential but, those of you that are worried really shouldn't be concerned at this point. Nothing said in the almost 400 posts in this thread could be considered anywhere close to acurate. It's ALL a guessing game.

$2,000 to join? That's just a figure pulled out of the air. The "source" said it would be low enough that the majority would join. To me that means $500 or less. At $200 I'd jump on the band wagon. At $500 I'd still have to think about it. At $2,000 I'm betting a lot of owners will be more than happy to keep their ownership as it is.

There is nothing wrong with speculation about a future program that is very likely to be implemented. It's only a problem if it brings worry to the person doing the speculating.

People who make the most money in business are those who can successfully anticipate what happens in the market. With a little bit of thought and understanding about what motivates businesses and people in business, it's not hard to get in the ball park. A clear understanding of the likely outcomes can help a saavy person get into a good position to capitalize on programs as they reveal themselves.

When this thread started, I was thinking very negatively about the possibility that Marriott would charge a large fee for resale owners to get into the program. Now that I have thought through it like a Marriott product manager would, I have decided that it may not be as bad as I originally anticipated and in fact, it could be something that can be very good for a saavy buyer.

All timeshare systems have loopholes which we as tuggers exploit. It enables us to do great trade ups in II and RCI by knowing which traders are the cheapest to buy and maintain that will get us the biggest exchange possible. It's clear to me that Marriott's system will also have such features for us to exploit. The question is what will those features be and how much will it cost to get in. You have a year to get your portfolio ready to anticipate some type of grandfathering. If it happens, great. If not, it was a good bet.

Regarding $2000. That is a guess. We have seen a $5000 price point in Asia. I know that $2000 would be easy to sell if let it go at that price with the features I mentioned earlier. My guess is the retail price will be set somewhere between $2000-5000. And, there will be waiving of most of it for developer purchases and a street price for everyone else. This is a guess. But, it's not an uninformed guess. For instance, I am very confident that it won't be $10,000.

In addition, doing scenario planning can help remove fear if you use it to help understand potential outcomes and plan appropriately for each major scenario that is likely to occur. Once a person has a chance to think through the scenarios and they have a plan of attack for each of the possible scenarios, it gives a person tremendous confidence about their abiltiy to navigate an ambiguous future state.

So, speculating can be very healthy if used in this way.

 

[PerryM]

$3,500 is my guess

Great point Doug.

Marriott is going to its best keeping the price low enough to entice ALL owners to join. The company is going to want the recurring revenue of exchanges and is going to want to show that the program works by very simply showing the large amount of owners who join. The developers of this program are not going to take a chance on rolling it out at a price that many owners will see as too high.

Any Marriott bashing isnt necessary since NOTHING is known about the program yet. NOTHING at all. It is all rumours,guesses and speculation.

Marriott is a very owner friendly timeshare company. There is no indication that they wont continue to be the same way.

And everything I've posted is still just another guess.

Well that's a rumor to a rumor - why assume that? I don't see Marriott reducing their sales prices by a penny. They have temporary cash rebates but they haven't backed down a single penny on sales.

Marriott can do whatever they want to us and the vast majority of Marriott owners will go with it.

My guess is $3,500 to deposit a week into the new internal exchange program - the price sounds right to me. This is for a Platinum Plus Holiday week, I have no idea what a Bronze will cost.

Why don't we start a pool? No money but just bragging rights. My guess is $3,500 as the highest fee charged.

 

[BocaBum99]

I suggest that worst case scenarios be used since you can believe that Marriott is rumoring the best case scenario for Marriott.

This is Marriott's rumor that they plug hundreds of times a day - if the Marriott owner base gets all riled up its their fault.

There is NO valid reason for Marriott to spread rumors that frighten Marriott owners - none but stupidity.

What I recommend is figure out what a likely worst case scenario is and have a plan should that scenario play out. However, worst case scenarios rarely ever happen. You should also determine what you believe is the likely scenario. I'll bet that the likely scenario is something that will be palitable to most owners.

In thinking this through, I am okay with an overlay internal exchange program with a fee and a higher fee for resale buyers as long as it isn't ludicrously high. $5000 would ludicrously high. And, there are a set of features, if they include them in the program, I will buy in at the right price.

I would be okay as long as the separate system of II and the 12/13 month reservation window is in place. That's because owners will have a choice to keep what they have or pay a premium to get a premium product.

 

[BocaBum99]

Great point Doug.

Marriott is going to its best keeping the price low enough to entice ALL owners to join. The company is going to want the recurring revenue of exchanges and is going to want to show that the program works by very simply showing the large amount of owners who join. The developers of this program are not going to take a chance on rolling it out at a price that many owners will see as too high.

Any Marriott bashing isnt necessary since NOTHING is known about the program yet. NOTHING at all. It is all rumours,guesses and speculation.

Marriott is a very owner friendly timeshare company. There is no indication that they wont continue to be the same way.

And everything I've posted is still just another guess.

Marriott is NOT doing this for the exchange fees. The revenue from such an endeavor would be very very small.

 

[Pit]

I'm not talking about today's unreserved units in Marriott. I am talking about reserved weeks that get deposited only because an owner wants to extend the life of their weeks. The beneificiary of those units is II. If Marriott takes that back, then that is a huge potential to reclaim weeks that II is profiting from.

We must not be viewing this the same way, because I don't see how a points program changes this behavior. Owners who currently reserve and deposit with II to extend their weeks, will simply continue the same practice under a point system (rather than allow their points to expire). Likewise there will always be some that do not use their ownership, whether it be weeks or points. In the end, it boils down to unreserved weeks, because that's all Marriott has to work with.

Even for units that go unreserved in Marriott, an internal exchange system allows them to control who gets what weeks in external exchange. When owners sign over their weeks to Marriott, the owner loses the ability to choose which unit gets deposited into the exchange company. For instance, in the past, someone who owns a Maui Napili Village who wants to go somewhere else must deposit that week into II. If that owner is part of the internal exchange system, Marriott will give them a ton of points and if the owner wants to go to a non-Marriott resort, that Napili Village doesn't have to go to the exchange company. They deposit a much less valuable week. The difference in the value of that deposit is value that accrues to Marriott and/or owners.

This is a very good point regarding control of deposits to II. Marriott can profit by increasing the quality, rather than quantity, of the weeks they control. This is what Starwood does today through SVN.

 

[BocaBum99]

Well that's a rumor to a rumor - why assume that? I don't see Marriott reducing their sales prices by a penny. They have temporary cash rebates but they haven't backed down a single penny on sales.

Marriott can do whatever they want to us and the vast majority of Marriott owners will go with it.

My guess is $3,500 to deposit a week into the new internal exchange program - the price sounds right to me. This is for a Platinum Plus Holiday week, I have no idea what a Bronze will cost.

Why don't we start a pool? No money but just bragging rights. My guess is $3,500 as the highest fee charged.

I think that is a good guess.

 

[PerryM]

Make it up in volume?

Marriott faces the age old problem of price sensitivity.

Out of all the existing Marriott weeks sold probably 80% were sold by Marriott and the other 20% are resales at this point - just a wild guess.

Marriott really has no competition here - the 80% will just do what Marriott says. Here is my guess of all seasons:

• $3,500 Platinum Plus/Holiday week
• $3,000 Platinum
• $2,500 Gold
• $2,000 Silver
• $1,000 Bronze

No discounts for multiple weeks of ownership.

To get the program off to a running start I'd offer "Pre-construction pricing" for the new exchange system:

• First 10,000 weeks get 50% off
• Next 10,000 weeks get 40% off
• Next 10,000 weeks get 30% off
• Next 10,000 weeks get 20% off
• Next 100,000 weeks get 10% off

The first day would probably sell 20,000 weeks with little difficulty.

Just a guess...

 

[BocaBum99]

We must not be viewing this the same way, because I don't see how a points program changes this behavior. Owners who currently reserve and deposit with II to extend their weeks, will simply continue the same practice under a point system (rather than allow their points to expire).

Ah, that is where you are incorrect. Most point systems allow you to save your points for another year. Or borrow points from the future. You can't do that with a weeks based system like Marriott. The inventory is there or it expires. So, there is a sense of urgency around an expiring week or float period. When you can save points into another year, you have NO NEED TO BOOK A RESERVATION AND DEPOSIT IT.

As a side note, Wyndham's point pool creates an incentive for owners to deposit expiring points into RCI because there isn't an automatic points saving feature. They don't really care because they own RCI. If they didn't, they should change it so that points save automatically. It would create much more breakage that they would control and profit from.

And, having seen literally thousands of owner accounts. The majority of the ones I see have 2 years of points in them. They happen to be sellers accounts who want to sell because they aren't using their ownerships. There would be more if they didn't allow them to expire for 3 years instead of two. Expiring points is the dark matter that explains how all points systems and exchange companies can even operate. If it weren't for those who own and get nothing or deposit and get nothing, customer satisfaction would be horrible since it would be impossible to get much of what you wanted out of a system.

 

[BocaBum99]

Marriott faces the age old problem of price sensitivity.

Out of all the existing Marriott weeks sold probably 80% were sold by Marriott and the other 20% are resales at this point - just a wild guess.

Marriott really has no competition here - the 80% will just do what Marriott says. Here is my guess of all seasons:

• $3,500 Platinum Plus/Holiday week
• $3,000 Platinum
• $2,500 Gold
• $2,000 Silver
• $1,000 Bronze

No discounts for multiple weeks of ownership.

To get the program off to a running start I'd offer "Pre-construction pricing" for the new exchange system:

• First 10,000 weeks get 50% off
• Next 10,000 weeks get 40% off
• Next 10,000 weeks get 30% off
• Next 10,000 weeks get 20% off
• Next 100,000 weeks get 10% off

The first day would probably sell 20,000 weeks with little difficulty.

Just a guess...

I think they just set a flat rate of $3500 and they discount it to zero for the 1st year to get as many weeks enrolled as possible.

Then, over time, they can give bigger discounts to platinum owners who are the key to the whole internal system success.

 

[AceValenta]

I am with some of the people that this is just hearsay and speculation. Marriott has neither announced or denounced such a system. So, who is to say if it is true or not.....

To speculate cost, resale or develper, and amount of points purely conjecture at most.

When it is released, we can all make our respective decisions. As someone stated before, maybe Marriott is negotiations with II or even a return to RCI and they are trying to get a bigger piece of the pie.

No one as suggested the costs of running such a program for Marriott. Setup, employee, rental space and promotional expenses to name a few.

It will be interesting to see how this all plays out for Marriott and its group of owners. Until we know the full effects we can "guess" all we want.

I have read every post and there have been some valid points. They have all been very valid. However, some have taken a pea sized rumor and turned it into a boulder of speculation.

It will be interesting to see how many of these ideas come to fruition, if any, in the next year.

Also, don't forget about the economy. Many people's disposable income has decrease over the past few years here in the states. Marriott may shoot itself in the foot by asking for large amounts of money to join a program such as rumored.

It is interesting to see that they picked a launch date around tax time and after dues have been paid. Just odd timing if you ask me and adding less validity to the rumor.

Who knows? It is what it is and it will be what it will be....in the meantime we have no control of the future.

 

[PerryM]

Resale owners program

I think they just set a flat rate of $3500 and they discount it to zero for the 1st year to get as many weeks enrolled as possible.

Then, over time, they can give bigger discounts to platinum owners who are the key to the whole internal system success.

Could be there are dozens of ways to rake in the money.

I do see Marriott offering a one-time-only offer to existing resale owners:

Resale owners can enter the program if they pay double the Marriott owner's rate. So for resale owners here is what they would pay:

* $7,000 Platinum Plus/Holiday week
* $6,000 Platinum
* $5,000 Gold
* $4,000 Silver
* $2,000 Bronze


Resale owners get the following discounts:

* First 20,000 weeks get 50% off
* Next 20,000 weeks get 40% off
* Next 20,000 weeks get 30% off
* Next 20,000 weeks get 20% off
* Next 20,000 weeks get 10% off

That would put pressure on resale owners to join and Marriott bought owners will feel they got something for buying Marriott.

 

[m61376]

I think they just set a flat rate of $3500 and they discount it to zero for the 1st year to get as many weeks enrolled as possible.

Then, over time, they can give bigger discounts to platinum owners who are the key to the whole internal system success.

I tend to agree with some of the principle points you've outlined. To get the product off to a good start and to entice owners, I'd also venture to guess there will be an initial free enrollment period, or a very minimal fee. I think what happens here MAY end up being a reflection of what happens with the Asia Pacific points program. I'm guessing the buy ins there are not necessarily a precursor, but a testing grounds of sort for here. If owners there balk at the $5000 price, then it is more likely we will see significant grand-opening specials.

As for current resale owners, my guess is that at the end of the day there will be a grandfathering, and they will make the same initial offer to all owners, but I think that window overall will be shorter than the year you suggest (perhaps 6 months). I think they want to start off with a bang, and it is human nature to push the papers aside. A 6 month initial offering would get the ball rolling and, if met with success, will force others to join so the program will become self-sustaining.

And I think that at the end of the initial enrollment- which might entail more of a small sign-up fee to cover costs-the discount will slowly decrease (possibly 50% after 6 months, 40% after 7 or 8 months, etc.) so that a year after inception there is a fixed price- a MSRP, as you suggest. This sign-on fee will likely be waived as special offers to entice buyers to buy direct, with different promotional offerings much akin to different up front point incentives.

Perry, of course, you may end up being right, but I like to think of Marriott as a company more positively, and I think they are concerned with their customers. I may be naive, but at the end of the day I think that, at least initially, resale owners will receive the same offering. They don't want to create bad will towards a program at its inception, and if they alienated current resale owners there would likely be a lot of negative publicity from a significant group (and, since many resale owners are also direct purchasers of one or more properties, it would likely be a significant group), and I believe there would be credibility to complaints that a system that they bought into was being changed so that they would no longer enjoy the same benefits relative to other owners. While Marriott reserves the right to change the program in the future, there was no language indicating that they reserved the right to subjugate a certain subset of owners. I do agree that it is likely the distinction will be made for future resale buyers, even though I prefer it wasn't.

Of course, that's just my musings based on your speculation, nothing more.

I think an important consideration that there hasn't been much conversation about is the very real probability of point devaluation over time IF Marriott decides on a variable point system (wherein different properties of like season/view are awarded different point values at the onset). Just as many developer purchasers never thought about the future of Marriott Rewards devaluation and there was a huge outcry when that happened, I think that is a very real probability if the system is designed in that fashion. Even owners of the category 7 properties, who will be the winners in such a system, may find themselves losers 5 years down the road even when booking what Marriott consider equivalent properties. I'd hate for my 7 days to be suddenly worth 5 days when exchanging (of course assuming they'd be fixed when booking my home resort, which may or may not be an assumption that can be made). The precedent has been set by devaluation of the perk of trading for reward points, an explanation for why that is necessary over time has been validly offered; there is every reason to expect that IF Marriott adopts a variable point system where different Platinum weeks, for example, at different resorts are awarded different point values based on 2010 parameters, that down the road a new resort will likely be more expensive and will likely be awarded more points.

And, just like the decrease in resale value, this also affects EVERY owner.

 

[Pit]

Ah, that is where you are incorrect. Most point systems allow you to save your points for another year. Or borrow points from the future. You can't do that with a weeks based system like Marriott. The inventory is there or it expires. So, there is a sense of urgency around an expiring week or float period. When you can save points into another year, you have NO NEED TO BOOK A RESERVATION AND DEPOSIT IT.

As a side note, Wyndham's point pool creates an incentive for owners to deposit expiring points into RCI because there isn't an automatic points saving feature. They don't really care because they own RCI. If they didn't, they should change it so that points save automatically. It would create much more breakage that they would control and profit from.

And, having seen literally thousands of owner accounts. The majority of the ones I see have 2 years of points in them. They happen to be sellers accounts who want to sell because they aren't using their ownerships. There would be more if they didn't allow them to expire for 3 years instead of two. Expiring points is the dark matter that explains how all points systems and exchange companies can even operate. If it weren't for those who own and get nothing or deposit and get nothing, customer satisfaction would be horrible since it would be impossible to get much of what you wanted out of a system.

Well, rolling over points would seem to just postpone the eventual owner deposit, rather than eliminate it. Eventually, the owner has to use the points or make a deposit to avoid forfeiture. But, I'll take your word for it that a point system results in a greater number of unreserved weeks.

That conclusion in itself, does not bode well for owners. Marriott keeps the revenue and owners pay the MFs. Pure profit for Mariott at owner expense. An owner-friendly approach would seek to increase owner utilization, rather than profit from decreased owner utilization. See why I am cynical?

 

[BocaBum99]

Well, rolling over points would seem to just postpone the eventual owner deposit, rather than eliminate it. Eventually, the owner has to use the points or make a deposit to avoid forfeiture. But, I'll take your word for it that a point system results in a greater number of unreserved weeks.

That conclusion in itself, does not bode well for owners. Marriott keeps the revenue and owners pay the MFs. Pure profit for Mariott at owner expense. An owner-friendly approach would seek to increase owner utilization, rather than profit from decreased owner utilization. See why I am cynical?

Yeah, you are right to be cynical. Developers set themselves up for scorn with their sales and marketing model. I just think there is some balance that needs to be put into the discussion. I think Marriott will be good to its owners at the same time it profits. Just like Disney.

It's true that owners will wait until the last minute to deposit expiring points. But, there are two things that can mitigate it. There can be limitations placed on points that are saved. Or, at a minimum, Marriott deposits a weak trader with low rental possibilities and retains the better weeks for owners.

Marriott will return the benefit to the owners by offering bonus time. Or, they should anyway. Every system I've seen that has it, the owners love it, use it and would pay extra for it. Those discounted rates are the benefit to owners. Those units would have gone expired anyway, only II would have benefited otherwise in terms of the getaways they sell off. And, non owners would be getting those benefits from their ACs. With an internal system, owners get the benefit. II's loss is Marriott's and owners gain.

 

[gmarine]

Marriott is NOT doing this for the exchange fees. The revenue from such an endeavor would be very very small.

As everything else about the program, this is pure speculation. Companies love recurring income. The program could also have a yearly fee as II currenlty does.

My guess is that the fee to join this points program is going to be relatively small. Marriott is going to want to show the program as a success by the amount of owners who join. A price of a few thousand dollars will be prohibitive for many owners
IMO, of course, since again, there is NOTHING known about the program

 

[jerseyfinn]

Let's go with what we know is fact and spinkle in some reality. I try to avoid speculation and hubris, as well as stepping on pins with angels on them.

The facts:

• We're MVC owners here.
• The overwhelming majority of MVC owners have walked in through the developer purchase door.
• We select our resorts/seasons/villa type in accordance with our own individual goals.
• Marriott lays down the fundamental T&C of MVC ownership & we sign on.
• We each proceed to put our own individual spin on how we utilize our weekswithin MVC
• Marriott is pondering significant changes to the exchange/ownerhsip process
• None of us can speak with certitude of what this new program will or will not be.

The reality:

• Life is not a static process. No surprise that MVC & Marriott do not hold still.
• Marriott TS is not the only game in town, it competes against other products.
• TS ownership carries risks/advantages
• TS of any type is a discretionary purchase.
• A real value can be pegged to any TS week ( but one may not like the price )
• Prior to this present economic downturn, a significant segment of MVC owners could utilize MVC developer pricing as a yardstick to gauge resale prices for their own weeks.
• The economic downturn has temporarily thrown this pricing mechanism into disarray
• Marriott's effort to change the program predates the economic downturn.
• It's not possible to accurately gauge future TS resale values at this moment.
• Marriott has quite a headache upon it's hands in terms of timing, but it must none-the-less move on & execute it's business plan.
  

I think that some several other capable TUGgers have already laid out the fabric of questions that each of us should be asking as MVC owners. I leave it to individuals to figure out which posts constitute fact and reality and which posts might be better suited for the virtual rubbish heap.

I myself am trying to wrap my imaginination around all of this as I'm pretty happy with my purchases and how we utilize them within the present 7 day scheme. I'm an owner with a long-term point of view so my other concern is what is gonna happen to the value of my weeks when we elect to divest ourselves of these weeks some 15 plus years hence. I'm a relativist, so I can afford to be patient whilst trying to adjust to change and reality.

I don't feel any particular urge to berate or deride Marriott nor do I feel especially cynical or vindictive. I'm certainly not gonna advocate litigation at this stage,though I do wonder about what kind of nightmare Marriott is presented with whenever it ponders a change in any rule given that you're talking about 50 individual states, each with their own arcane rules regarding TS. If you live in NJ like we do, you know exactly what I mean about FUBARed government. So I myself wish Marriott well in negotiating the barbed wire of rampant litigation which has become an American pasttime.

All I know is that I hope that Marriott presents/develops something cogent, thoughtful, and useful for the bulk of MVC owners. Oh yeah, another reality pops into my mind - all MVC weeks are not precisely equal. A problem for Marriott, but a reality indeed that could pop up for a small strata of owners. Is it time to call Obama and his crew to "fix" all of this? I sure as hell hope not.

Let's allow this thing to move forward while the good people at Marriott work out all of the kinks and go home each night with all of the headaches of change. I'm not in Fairey Tale mode at this moment although I do anxiously await real information from Marriott itself. I don't think that any of us are on the MVC VIP list, so I guess we'll just have to utilize our weeks and wait for word to trickle out from MVC about what the future holds. Let's hope that by then, the economy has turned a bit more favorable and MVC gets a little wind in it's sails ( or should I say sales? ) as it remains in all of our interests for MVC to remain vibrant and successful.

Barry

 

[BocaBum99]

Well, rolling over points would seem to just postpone the eventual owner deposit, rather than eliminate it. Eventually, the owner has to use the points or make a deposit to avoid forfeiture. But, I'll take your word for it that a point system results in a greater number of unreserved weeks.

That conclusion in itself, does not bode well for owners. Marriott keeps the revenue and owners pay the MFs. Pure profit for Mariott at owner expense. An owner-friendly approach would seek to increase owner utilization, rather than profit from decreased owner utilization. See why I am cynical?

Oh, I forgot to mention. What Marriott can do is create a foreign timeshare, one time, trade in program as an incentive for purchasers of the developer product. Wyndham calls it PIC. Bluegreen calls it AIM. Diamond calls it Club Select. WorldMark calls it exchange plus. What this program would do for Marriott is as follows. Non-Marriott owners who are dissatisfied with their timeshare can buy a Marriott and annual deposit their non-Marriott timeshare for points.

This type of program does a number of things for Marriott.

1) It provides a nice incentive for an existing owner of a non-Marriott timeshare to buy in by taking an objection off the table.

2) When the owner deposits these weeks, Marriott can use these deposits to get exchange credits for owners who are depositing expiring points. They keep the Marriott inventory for owners. And, the point value for what they offer for the non-Marriott unit is considerably less in value than the initial deposit.

The bottom line is that when Marriott has total control of the inventory, this gives them huge negotiating leverage with 3rd party exchange companies, it allows them to keep the best stuff for owners, and it helps to create a strong differential value to a resale product.

So, inventory control is what Marriott is seeking as much as anything. It gives them huge revenue opportunities that I have explained in prior posts.

 

[BocaBum99]

As everything else about the program, this is pure speculation. Companies love recurring income. The program could also have a yearly fee as II currenlty does.

My guess is that the fee to join this points program is going to be relatively small. Marriott is going to want to show the program as a success by the amount of owners who join. A price of a few thousand dollars will be prohibitive for many owners
IMO, of course, since again, there is NOTHING known about the program

I agree that companies love recurring revenue. What they love more is a defensible beach head that allows them to reap revenues from lots of new sources. I claim that the exchange revenue is the minor part of the equation. Look at my prior post that outlines some possible revenue lines.

 

[BocaBum99]

Let's go with what we know is fact and spinkle in some reality. I try to avoid speculation and hubris, as well as stepping on pins with angels on them.

The facts:

• We're MVC owners here.
• The overwhelming majority of MVC owners have walked in through the developer purchase door.
• We select our resorts/seasons/villa type in accordance with our own individual goals.
• Marriott lays down the fundamental T&C of MVC ownership & we sign on.
• We each proceed to put our own individual spin on how we utilize our weekswithin MVC
• Marriott is pondering significant changes to the exchange/ownerhsip process
• None of us can speak with certitude of what this new program will or will not be.

The reality:

• Life is not a static process. No surprise that MVC & Marriott do not hold still.
• Marriott TS is not the only game in town, it competes against other products.
• TS ownership carries risks/advantages
• TS of any type is a discretionary purchase.
• A real value can be pegged to any TS week ( but one may not like the price )
• Prior to this present economic downturn, a significant segment of MVC owners could utilize MVC developer pricing as a yardstick to gauge resale prices for their own weeks.
• The economic downturn has temporarily thrown this pricing mechanism into disarray
• Marriott's effort to change the program predates the economic downturn.
• It's not possible to accurately gauge future TS resale values at this moment.
• Marriott has quite a headache upon it's hands in terms of timing, but it must none-the-less move on & execute it's business plan.
  

I think that some several other capable TUGgers have already laid out the fabric of questions that each of us should be asking as MVC owners. I leave it to individuals to figure out which posts constitute fact and reality and which posts might be better suited for the virtual rubbish heap.

I myself am trying to wrap my imaginination around all of this as I'm pretty happy with my purchases and how we utilize them within the present 7 day scheme. I'm an owner with a long-term point of view so my other concern is what is gonna happen to the value of my weeks when we elect to divest ourselves of these weeks some 15 plus years hence. I'm a relativist, so I can afford to be patient whilst trying to adjust to change and reality.

I don't feel any particular urge to berate or deride Marriott nor do I feel especially cynical or vindictive. I'm certainly not gonna advocate litigation at this stage,though I do wonder about what kind of nightmare Marriott is presented with whenever it ponders a change in any rule given that you're talking about 50 individual states, each with their own arcane rules regarding TS. If you live in NJ like we do, you know exactly what I mean about FUBARed government. So I myself wish Marriott well in negotiating the barbed wire of rampant litigation which has become an American pasttime.

All I know is that I hope that Marriott presents/develops something cogent, thoughtful, and useful for the bulk of MVC owners. Oh yeah, another reality pops into my mind - all MVC weeks are not precisely equal. A problem for Marriott, but a reality indeed that could pop up for a small strata of owners. Is it time to call Obama and his crew to "fix" all of this? I sure as hell hope not.

Let's allow this thing to move forward while the good people at Marriott work out all of the kinks and go home each night with all of the headaches of change. I'm not in Fairey Tale mode at this moment although I do anxiously await real information from Marriott itself. I don't think that any of us are on the MVC VIP list, so I guess we'll just have to utilize our weeks and wait for word to trickle out from MVC about what the future holds. Let's hope that by then, the economy has turned a bit more favorable and MVC gets a little wind in it's sails ( or should I say sales? ) as it remains in all of our interests for MVC to remain vibrant and successful.

Barry

Excellent post. I would only add that owners can get an insight into what Marriott might do by looking at what their competitors have done. The Marriott product manager definitely spends a lot of time doing this to ensure that their program is competitive.

Also, since Marriott will want to be an innovator, there is a good chance that we will be positively surprised by some features they add that we never considered.

 

[BocaBum99]

As everything else about the program, this is pure speculation.

Sure, it's speculation. But, it is speculation based on insight and mathematics. Exchange fee revenue would be roughly 1-2% of total revenue using reasonable assumptions about the likely take rates for the program.

Companies don't launch into major new initiatives for 1% revenue potential. There are too many other things that they can do to increase profitability at a higher rate for less work. An easy one would be to cut everyone's operating budget by 5%. Easy to do. Much greater impact. No extra work.

 

[gmarine]

I agree that companies love recurring revenue. What they love more is a defensible beach head that allows them to reap revenues from lots of new sources. I claim that the exchange revenue is the minor part of the equation. Look at my prior post that outlines some possible revenue lines.

Certainly a valid point as well.