Marriott points and internal exchange program - the latest info

[Pit]

I have to agree. While the written information may say otherwise, all of our sale reps have told us that these are a great investment and would only go up in value.

Furthermore, stating that it is not an investment is not equivalent to stating they are worthless.

 

[RandR]

Absolutely. If something is going to loss at least half it's value right out of the gate, no one would consider that an investment. But is still does have some value.

 

[hotcoffee]

"They were sold to us as "pre-paid vacations." We were not concerned with resale value."


This is the best post i've seen on this subject. It looks like you purchased direct from Marriott, because Marriott outright states you are purchasing a prepaid vacation, not an investment. All this talk about resale value is irrelevant! When you purchase a timeshare, this is part of the agreement. If you come back later and complain about your resale value, they can point to the original contract.

As Ingrid stated, we have to focus on what options this program offers for trading. Not resale value!

I believe that the issue is Marriott intentionally and knowingly destroying resale values in order to prevent people from buying resale. None of the previous arguments involves depreciation or anything resembling it.

We don't know at this point whether Marriott will exclude resale purchases from the new program (if an when it is implemented). But should they do so, it would be a planned and calculated action in which the only purpose would be to hinder resales. It would be an example of a strong-armed tactic employed by a wealthy corporation to extract extra profit from the public.

As Perry has pointed out several times in this thread, Marriott has already sold every timeshare at developer prices once. So, they made their money. A resale is nothing more than an original buyer transferring ownership to someone else because he no longer wants his timeshare. He should have that right. It does not harm Marriott for an owner to sell his timeshare. Whether it is the original owner or a resale owner, it should not matter to Marriott. Either one who comes to their resort spends money.

 

[Latravel]

"While the written information may say otherwise, all of our sale reps have told us that these are a great investment and would only go up in value."


And you believed a timeshare salesman?

As someone pointed out above, it's true, the salesperson did say this was an investment in our future and all the other stuff they say. Only after we said we wanted to buy a unit did the truth come out on paper. BUT, even without the documents, common sense would tell us a timeshare is not an investment.


"I believe that the issue is Marriott intentionally and knowingly destroying resale values in order to prevent people from buying resale."

There is no resale value as far as Marriott is concerned. You sign away that right when you purchase a Marriott timeshare. They feel no obligation to your resale value and they put that in writing. This could be because they want to cover their butts (as someone put it) or because that is their business model. So if a business decision must be made that affects your resale value, they may not happily change but they will for the sake of business. They made that clear.

I'm going to find the documents we signed in all our moving junk. Once I do, i'll post word for word.

 

[davidvel]

There is no resale value as far as Marriott is concerned. You sign away that right when you purchase a Marriott timeshare. They feel no obligation to your resale value and they put that in writing.

Absolutely agree and would add to "feel no obligation": "have no obligation."

But, I would like to see where Marriott put in writing that they actually "feel no obligation to your resale value."

I'm going to find the documents we signed in all our moving junk. Once I do, i'll post word for word.

That would answer the above, and would be very helpful to this ongoing discussion.

 

[Latravel]

Ok, I found the document in my Timberlodge purchase documents. This was for a purchase in Dec. 2007.

The document covers the following categories: Ownership Rights, Use Options, Lockoff, Split Week, Marriott Rewards, Exchange through Interval Iinternational, Internal Exchange, External Exchange, Maintenance Fees and Miscellaneous.

It is titled:

Quality Assurance Checklist

Guest satisfaction results from your complete understanding of all components of the Marriot Vacation Ownership Program. Please take the time to review the following and sign in the space provided indicating that you understand each component.

Miscellaneous
Item #18:
I acknowledge that no representations have been made to me by my salesperson or any other representative of the Developer as to investment potential, resale potential, or rental income potential.

Item #19:
The Resort currently does not offer a resale program.

Item #20
I acknowledge that I am purchasing this interest for my personal vacation uses.

Any terms capitalized in this document have the same definition as provided in the Public Offering Statement.


Next to each sentence, my spouse and I were asked to initial. The entire document was signed and dated at the bottom.

 

[davidvel]

Ok, I found the document in my Timberlodge purchase documents. This was for a purchase in Dec. 2007.

It is titled Quality Assurance Checklist

Guest satisfaction results from your complete understanding of all components of the Marriot Vacation Ownership Program. Please take the time to review the following and sign in the space provided indicating that you understand each component.


Item #18:

I acknowledge that no representations have been made to me by my salesperson or any other representative of the Developer as to investment potential, resale potential, or rental income potential.

Item #19:

The Resort currently does not offer a resale program.

Item #20
I acknowledge that I am purchasing this interest for my personal vacation uses.

Next to each sentence, my spouse and I were asked to initial. The entire document was signed and dated.

Thank you Heidi! That is great info.

Any contract is only pertinet in context of the whole document. It would be great if you could scan the documents redacting your personal info of course, so us resale people o ) could see it in its entirety. I would be happy to host at my personal website where I posted the Shadow Ridge CC&Rs (and will post any other Marriott TS docs.)

 

[Latravel]

I think that is a very good idea. I'll do it by Monday.

 

[SueDonJ]

Quality Assurance Checklist

We initialed one of those, too, with our Contract to Purchase SurfWatch dated 6/2/06; the items pertaining to value aren't on that form but rather contained in the Contract under "VII. ADDITIONAL TERMS, 4. PURCHASER'S ACKNOWLEDGMENTS: ... Purchaser acknowledges that the purchase of the Time Sharing Interest(s) is made for the Purchaser's personal use, and that neither Seller nor any of its agents, employees and/or affiliates has made any oral or written representations that the Purchaser would derive economic benefits or expectations of profit from appreciation in the value of the Time Sharing Interest(s) being purchased or profits to be derived from the entrepreneurial or managerial efforts of the Seller ..."

Here's a scan, although the quality may not be very good:

 

[Latravel]

After reading your post, I looked over the rest of my documents. I found the same thing:

10. Covenants, Representations and Warranties of Purchaser and Seller.

(b) Purchaser covenants, represents and warrants to Seller as follows:
Purchaser is purchasing the Timeshare interest (s) for his or her own personal use and account and not for any other purpose, and does not intend to place the Timeshare Interest(s) in any rental pool or rental agency or vacation club or similar type arrangement. Seller has not authorized any representation of the investment potential of the Timeshare Interest(s), and has specifically not authorized the representatioin of any potential for rental income, resale at a profit, or any expected tax benefit. Nothing in this subparagraph shall be deemed to prevent Purchaser, individually or jointly, from renting an Assigned Unit during his or her reserved Use Period to a member of the general public.

It looks like the checklist was an added document that singles out the most important points so you can't say you didn't read the fine print.

Well folks. There it is in writing.

 

[SueDonJ]

Our Barony week was a resale by Marriott. That Contract For Purchase dated 11/23/07 also included a "Marriott's Barony Beach Resort Re-sales Ownership Assurance Checklist" with this item:

"I acknowledge that no representations have been made to me by my salesperson or any other representative of MVCI as to investment potential, resale potential or rental income potential."

Here's another poor scan:

 

[IuLiKa]

Perry and Quimby thank you for the update. I cannot follow this thread there are more than 50 posts a day some times. I will check back soon and ask for another update.
Iulika

 

[Dean]

I believe that the issue is Marriott intentionally and knowingly destroying resale values in order to prevent people from buying resale. None of the previous arguments involves depreciation or anything resembling it.

We don't know at this point whether Marriott will exclude resale purchases from the new program (if an when it is implemented). But should they do so, it would be a planned and calculated action in which the only purpose would be to hinder resales. It would be an example of a strong-armed tactic employed by a wealthy corporation to extract extra profit from the public.

As Perry has pointed out several times in this thread, Marriott has already sold every timeshare at developer prices once. So, they made their money. A resale is nothing more than an original buyer transferring ownership to someone else because he no longer wants his timeshare. He should have that right. It does not harm Marriott for an owner to sell his timeshare. Whether it is the original owner or a resale owner, it should not matter to Marriott. Either one who comes to their resort spends money.

I'd say it's speculation at best to accuse Marriott of purposefully destroying resale value. It's possible that any actions may do so and any attempt to steer buyers to retail may inadvertently reduce resale. And it's possible that whatever the next change is (there's always one around the corner for any system) will decrease resale values. I don't believe there's anything Marriott could do that would destroy resale values of good weeks at good resorts. I think market forces will be in effect as we're seeing right now with the economy. And it's true that off season and shoulder season weeks have likely been over priced due to the perception of benefit being with Marriott (rightfully so or not) and those values likely will fall IF the value is decreased based on internal changes. One will always be able to reserve, use and potentially trade their own resort which is all that is promised up front anyway. But one who bought mostly to trade because it was a MARRIOTT may indeed lose out just like those that bought Spicebush and Swallowtail just before the separation lost some of their value. I remember the venomous thread's at the time.

IMO, saying they've sold each week once and they've made their money has no bearing on the argument at hand. They still have retail resorts to sell which are competing with resale weeks/resorts and they still have a fairly active resale department. Their responsibility on the sales side is to further those options. Certainly there's a right and wrong way to do so and we'd all likely disagree on what those were anyway. IF they can further those benefits by excluding resale buyers or charging them an inclusion fee that makes it not worthwhile, that is their right for anything over simply reserving at your resort. I doubt they will do so exclusively without options for existing resale members but they might and the options might not be "reasonable" even if offered in the eyes of many, including myself.

The bottom line IMO is that unless Marriott takes away the fundamental ability to reserve a week at one's home resort, they really haven't done anything of substance from a right and wrong standpoint.

 

[Dean]

Ok, I found the document in my Timberlodge purchase documents. This was for a purchase in Dec. 2007.

The document covers the following categories: Ownership Rights, Use Options, Lockoff, Split Week, Marriott Rewards, Exchange through Interval Iinternational, Internal Exchange, External Exchange, Maintenance Fees and Miscellaneous.

It is titled:

Quality Assurance Checklist

Guest satisfaction results from your complete understanding of all components of the Marriot Vacation Ownership Program. Please take the time to review the following and sign in the space provided indicating that you understand each component.

Miscellaneous
Item #18:
I acknowledge that no representations have been made to me by my salesperson or any other representative of the Developer as to investment potential, resale potential, or rental income potential.

Item #19:
The Resort currently does not offer a resale program.

Item #20
I acknowledge that I am purchasing this interest for my personal vacation uses.

Any terms capitalized in this document have the same definition as provided in the Public Offering Statement.


Next to each sentence, my spouse and I were asked to initial. The entire document was signed and dated at the bottom.

Those are pretty standard things included in most POS as well and in many cases, much of that info is required by law to be provided. The reason is that some timeshares tout resale and rental as a way to make money for the buyer. While helpful, any type of product understanding checklist may not a true legal document at least as I'm told by the State of Florida.

 

[PerryM]

Anti Owner Marriott Programs - just the start

I'd say it's speculation at best to accuse Marriott of purposefully destroying resale value. It's possible that any actions may do so and any attempt to steer buyers to retail may inadvertently reduce resale. And it's possible that whatever the next change is (there's always one around the corner for any system) will decrease resale values. I don't believe there's anything Marriott could do that would destroy resale values of good weeks at good resorts. I think market forces will be in effect as we're seeing right now with the economy. And it's true that off season and shoulder season weeks have likely been over priced due to the perception of benefit being with Marriott (rightfully so or not) and those values likely will fall IF the value is decreased based on internal changes. One will always be able to reserve, use and potentially trade their own resort which is all that is promised up front anyway. But one who bought mostly to trade because it was a MARRIOTT may indeed lose out just like those that bought Spicebush and Swallowtail just before the separation lost some of their value. I remember the venomous thread's at the time.

IMO, saying they've sold each week once and they've made their money has no bearing on the argument at hand. They still have retail resorts to sell which are competing with resale weeks/resorts and they still have a fairly active resale department. Their responsibility on the sales side is to further those options. Certainly there's a right and wrong way to do so and we'd all likely disagree on what those were anyway. IF they can further those benefits by excluding resale buyers or charging them an inclusion fee that makes it not worthwhile, that is their right for anything over simply reserving at your resort. I doubt they will do so exclusively without options for existing resale members but they might and the options might not be "reasonable" even if offered in the eyes of many, including myself.

The bottom line IMO is that unless Marriott takes away the fundamental ability to reserve a week at one's home resort, they really haven't done anything of substance from a right and wrong standpoint.

Folks, Marriott is taking the fundamental ability to exchange reservations among Marriott owners away - sure they can do it but what's in it for Marriott owners?

By the time such a system is released 80%+ of all Marriott resorts have been sold out and Marriott cleans the toilets there now. Right now EVERY owner in these mature resorts can exchange reservations with every other Marriott owner within the same building and other Marriott resorts.

Now Marriott wants to take that ability away - after 20 years in the business all of a sudden Marriott owners are barred from exchanging reservations with each other.

Who the hell does Marriott think they are?

What the hell right do they now have to bar one Marriott owner from exchanging reservations with another Marriott owner?

That's what this is all about. Because resale owners will be pond scum at a Marriott resort good luck on your resale. Timeshares are real estate and you should fight to keep what you have.

I can understand Marriott doing this on day-one with no owners - that's ok. But Marriott is going to have a horrendous impact on their loyal owners - and for our benefit?

Don't buy a Marriott now either direct from Marriott or resale until Marriott shows just how much damage to our ownerships they intend to inflict for a few bucks of profit.

P.S.

You don't think for a second Marriott will stop here do you? This opens the floodgates for all kinds of VIP programs just like Wyndham has.

Marriott resales used to command 60% of current sales prices - in 5 years you broke even if you bought from Marriott. Once these anti-owner programs are implemented expect to join Wyndham where their resales are 5% of current sale prices.

Count on it...

P.P.S.

There is a fundamental difference between a mature Marriott and one under construction - we, the owners own the damn thing - lock stock and barrel. We elect members to the HOA who can kick Marriott out if they are detrimental to the wellbeing of the resort.

If something horrible happens to the resort Marriott is going to turn their back and shout "this is not our resort" - well they are right. Now they want to screw around with our resorts - hopefully at least one HOA won't stand for this assault on their owners at their resort.

These are our resorts not Marriott - Marriott seems to have lost sight of that fact.

 

[potchak]

I agree. I think it ludicrous to suggest that Marriott has an obligation to maintain resale value for the owners that have purchased. I do think that it's smart business to do so up to a point and poor business to institute actions that would severely reduce them beyond the usual levels we've seen historically.

I wholeheartedly disagree with you. Our timeshares are a real estate transaction and we have deeds to those propertiies. Our COA's have hired Marriott to manage these properties, therefore Marriott most definitely has a responsibility to consider the resale values just like our local HOA's. With this in mind, I am pretty certain they will not go the route of Wyndham or Starwood with voluntary/mandatory resorts.

I have a feeling that they will try to take the best of all the programs out there. DH and I love our DVC because of the flexibility- many resort choices, room size choices etc, and the fact that you can book as many nights as you want within your point value. I am sure Marriott will incorporate some of that into their new system.

I am trying to be optimisitic that Marriott will not just do what is right for Marriott, but for their owners as well. Considering most Marriott owners not only have purchased developer, but purchased multiples from them, I do not think they want to alienate us.

JMHO.

 

[Dean]

I wholeheartedly disagree with you. Our timeshares are a real estate transaction and we have deeds to those propertiies.

Your option of course. Having a deed has no bearing on the discussion from an obligation standpoint, IMO. Resale value is not a management issue. To be clear, my statement is Marriott has no obligation to owners to protect resale values. However, they do have other responsibilities that will indirectly do this and do have responsibilities to shareholders. If they keep the property in good shape and run a resort in a well oiled manner that makes people want to go there, this will aid value while the reverse will rob value. IMO, it is in Marriott's best interest to have a viable resale market, it's just good business. They should want it to be reasonable but not too good because they want to sell retail as much as possible and not have those potential buyers go resale instead more than necessary. It is, and always has been, an adversarial love/hate relationship. Technically Marriott the seller and Marriott he manager are two different and unrelated companies.

I too am optimistic that IF anything happens, it can be a win-win situation for many. But it will not be for everyone just like DVC's reallocation was not. And even if win-win, it will likely cost us some money to make it so.

 

[Latravel]

"While helpful, any type of product understanding checklist may not a true legal document at least as I'm told by the State of Florida."

This language is also included in the purchase documents which are true legal documents. The checklist is just to make sure you really understand the important points and you must initial by each point. No way around this. Marriott is protecting themselves from any obligation to protect resale values.

If you have an expectation of a resale value, that is your option. Your expectation does not match the legal documents you signed so you may be disappointed. You may expect all you want but it is not based on reality.

 

[SueDonJ]

... The checklist is just to make sure you really understand the important points and you must initial by each point.

I found that it was very easy to understand the purchase because our salesperson used the checklist during the presentation - we went through each item line-by-line while she explained each in detail. It was a good tool to make sure some of the more important (but often not covered in detail, judging by horror stories related on TUG?) items were covered. Although, of course, we didn't initial or sign anything on that sheet until after we'd agreed to the purchase and the Contract was drawn up.

 

[Dean]

"While helpful, any type of product understanding checklist may not a true legal document at least as I'm told by the State of Florida."

This language is also included in the purchase documents which are true legal documents. The checklist is just to make sure you really understand the important points and you must initial by each point. No way around this. Marriott is protecting themselves from any obligation to protect resale values.

If you have an expectation of a resale value, that is your option. Your expectation does not match the legal documents you signed so you may be disappointed. You may expect all you want but it is not based on reality.

It certainly has been in every POS I've looked at. However, the product understanding check lists often give additional information or cover areas not addressed directly in the POS and that's where their legality tends to fall down.

 

[Latravel]

Dean-
Did you see SueDon's post where she included a scan of the purchase agreement? The language from the checklist is there. I also looked in my purchase documents and it was there hidden the many pages. Like i've said, the checklist does not stand alone. It recaps the important points to make sure the buyer is fully aware. It does not list additional information. It is a recap.

 

[kjd]

Marriott's resale values

Marriott makes no commitment to upholding resale values and should't make any. It's the same thing with most large purchases. No car dealer makes any commitment to uphold resale values either. If they do, it's a rare exception and they would probably go out of business.

When you drive out of a car dealership with a new car you are immediately "upside down" in terms of your resale value and/or your car loan. If you paid cash, you have also lost a lost of money in the event that you had to sell. Most people look at cars as a depreciating asset. I think that we should look at timeshares in the same manner. A timeshare is not an investment.

The value of a timeshare is in its' usage. I think a time horizon for me of ten years is about right. You may have a different one. Just like an auto, a person must add the cost of ownership over time (including maintenance fees) and subtract the resale value when you are finished. That puts it on a cost per year basis.

For most timeshare owners that could average anywhere from $3,000 to $5,000 per year. Whether you purchased from Marriott or as a resale buyer is immaterial. The real question, just as with automobiles, is did you get value for your money. Each timeshare owner has to answer that for themselves. There is no one right answer.

 

[hotcoffee]

"I believe that the issue is Marriott intentionally and knowingly destroying resale values in order to prevent people from buying resale."

There is no resale value as far as Marriott is concerned. You sign away that right when you purchase a Marriott timeshare. They feel no obligation to your resale value and they put that in writing. This could be because they want to cover their butts (as someone put it) or because that is their business model. So if a business decision must be made that affects your resale value, they may not happily change but they will for the sake of business. They made that clear.

I'm going to find the documents we signed in all our moving junk. Once I do, i'll post word for word.

There is a fundamental difference between resale values diminishing on their own and the developer deliberately destroying them. The issue is not whether a timeshare appreciates or depreciates, or even whether timeshares at a given resort have any value at all to most people (which is probably true of off-season weeks at seasonal resorts). None of the documents you later posted have any verbiage in them like "the customer understands that Marriott reserves the right at any time at their discretion to greatly diminish your ability to sell your timeshare should you ever wish to do so." I suspect if you read anything resembling that in the documents, you would not sign them. I would not. The issue is whether Marriott will engage in sleaze tactics to build their profits, or whether they will let their reputation build their profits.

Note that I try to keep my posts in the subjunctive mood when referring to what Marriott might or might not do regarding the upcoming trading system. I don't think that they will necessarily do any of the things we have talked about. I cannot think of a good reason why they would want to exclude some top-notch inventory held by resale buyers out of any new trading system.

 

[RandR]

For those that bought direct, did your salesperson talk about how you would be able to trade your week? If so, how did s/he describe it?

 

[hotcoffee]

Marriott makes no commitment to upholding resale values and should't make any. It's the same thing with most large purchases. No car dealer makes any commitment to uphold resale values either. If they do, it's a rare exception and they would probably go out of business.

When you drive out of a car dealership with a new car you are immediately "upside down" in terms of your resale value and/or your car loan. If you paid cash, you have also lost a lost of money in the event that you had to sell. Most people look at cars as a depreciating asset. I think that we should look at timeshares in the same manner. A timeshare is not an investment.

The value of a timeshare is in its' usage. I think a time horizon for me of ten years is about right. You may have a different one. Just like an auto, a person must add the cost of ownership over time (including maintenance fees) and subtract the resale value when you are finished. That puts it on a cost per year basis.

For most timeshare owners that could average anywhere from $3,000 to $5,000 per year. Whether you purchased from Marriott or as a resale buyer is immaterial. The real question, just as with automobiles, is did you get value for your money. Each timeshare owner has to answer that for themselves. There is no one right answer.

Again, your post misses the point. Depreciation of an automobile is the natural result of market forces. Neither the dealer nor car manufacturer makes any attempt to deliberately destroy your ability to sell your car. It is considered a good thing for car models to have good resale value. If you bought a second car, and your spouse died, you would probably want to sell one of the cars. Hopefully, someone would buy it because it still has SOME value. Otherwise, you would have to just park it in your yard until you can find some way to get rid of it. With a timeshare, we pay yearly maintenance fees. So, if we cannot use it, I think most of us would want to sell it as soon as we can. I suspect it might become hard to sell if buyers become aware that they will be significantly discriminated against should they ever want to do an exchange.