Marriott points and internal exchange program - the latest info

[tlwmkw]

Suedonj is right in this- Marriott specifically points out in all sales presentations that purchase of a TS is not an investment. They aren't stupid and know that if any class action lawyer challenges them that they are devaluing re-sales they can point this out to said lawyer and say "Our agreement is to provide a weeks vacation at a beautiful resort, we never promised to support prices for re-sellers or even original purchasers." I don't think anyone can find any documents that say that they promise to support prices for anyone so to say you can sue them later is really ridiculous.

Everyone needs to remember that this system will be an opt-in, you do not have to participate and can still use your week just as you have in the past- they cannot force you to change what you have and honestly I don't see many current owners paying for this change.

I believe that Marriott is also trying to take more control of re-sales- they currently have a re-sale department and with this new system I can see that it will be in their interest to expand it. There is no overhead in re-selling, especially when you already have an active sales staff up and running and can make a 40% profit. I believe we will be offered re-sales at the MVCI presentations as a routine in the future.

 

[hotcoffee]

I guess I just don't understand the contradiction. Folks here say, on the one hand, that it is guaranteed a developer purchase will immediately depreciate to a sometimes drastic extent the minute a buyer signs on the dotted line. That's the rationale behind choosing a resale over a developer-purchase every time, despite the fact that doing so contributes to the depreciation of a developer-purchase.

I'm more concerned with the ability to resell at any rational price. Let's take a worse case scenerio. If Marriott were to cut the reservation window to six months for resale owners, plus they don't allow resale owners access to the new exchange system, it might be very nearly impossible to sell a timeshare. That could affect you as well as me. If your spouse were to suddenly take sick (or worse), I suspect you might want to sell. It would be nice if that option were available.

It is pretty well known now that developer timeshare purchases will lose much of their value as soon as the sale is finalized. In like manner, if you purchased a new car, but had to sell it after the first year, you expect it to have lost much of its value. But, you would also expect to get the accepted value for that model year. You would certainly hope that you did not have to give it away just to get it off your hands. In fact, in the case of timeshares, it could conceivably be difficult to even give one away due to the maintenance fees. Imagine getting stuck with a timeshare where you could not reserve the weeks you want, could not exchange into good locations at the time you wanted, and had to pay high maintenance fees. Then, just to add insult to injury, you could not sell it because no one wanted it.

But on the other hand, those same folks say that MVCI should not be able to implement or contract any exchange system which will negatively impact the value of their resale-purchased weeks. Meaning what, exactly? Is MVCI expected to act in such a way that the resale buyers' investments are protected, when MVCI takes no such action to protect developer buyers' investments?

Yes. I think a timeshare should have some value - just like a used car. I would not pay $15,000 for a used car if I knew it were worth nothing if I needed to sell it. I can accept depreciation. That is not what I am talking about. IF Marriott deliberately destroys the value of my timeshare, and then makes it practically impossible to get rid of it, I think I would have a legitimate gripe.

Like I said, I have a very good unit in a very nice sold-out Hawaiian resort. So, they might take mine for resale; and if they do, I might even make some money over what I paid for it.

If you experience any type of situation that would cause you to want to sell, and the worse-case scenerio were to take place, you better hope that Marriott will take yours for resale; because, if you bought at developer prices, you could be out a lot more money than I am with mine.

However, I think it needs to be said that all of this is speculation because we don't know if the new system is going to kill resales or not.

 

[AceValenta]

Why do they have to reinvent the wheel and change everything.

1. Keep the system on a weekly basis.
2. Charge everyone $500 to join the Marriott internal exchange system at time of purchase. (This could be waived to entice sales.) $1000 if you were a resale purchaser.
3. Yearly fee, $100 to have the right to trade internally. This could be added to Maintenance fees.
4. Exchanges would be $50 if you are changing for like seasons and units (Plat to Plat or 1 BR to 1 BR) $100 to upgrade a unit size, lock-off or season per upgrade level. (1BR Gold to 2 BR Platinum = $200.)

Let's say 90% are direct purchase and 10% are resale:
90% of 350,000 owners x $500 = 157,500,000.
10% of 350,000 owners x $1000 = 35,000,000.

$192,500,000 raised just by convincing people to use the system. Each new resale must pay the $1000 if they want to stay in the system.

350,000 x $100 anual fee: $35,000,000 raised annually just on dues.

That wouldn't even account for the trading fees. Pure profit. No complicated point numbers and everyone wins. Still allow trading with II but people would have to pay a separate fee to keep II an open option.

So, if Marriott is watching or for everyone else what are the thoughts on this?

 

[hotcoffee]

Suedonj is right in this- Marriott specifically points out in all sales presentations that purchase of a TS is not an investment. They aren't stupid and know that if any class action lawyer challenges them that they are devaluing re-sales they can point this out to said lawyer and say "Our agreement is to provide a weeks vacation at a beautiful resort, we never promised to support prices for re-sellers or even original purchasers."

You are absolutely right. If you bought a beautiful new 6-cylinder Ford, and in the contract it stipulated that if you sell the car to anyone other than another Ford dealer, you had to remove the six cylinder engine and replace it with a four cylinder, and had to put in a gas tank only 1/2 the size, you would have no complaints since that was in the contract. Somehow, though, it just wouldn't seem right.

I believe that Marriott is also trying to take more control of re-sales- they currently have a re-sale department and with this new system I can see that it will be in their interest to expand it. There is no overhead in re-selling, especially when you already have an active sales staff up and running and can make a 40% profit. I believe we will be offered re-sales at the MVCI presentations as a routine in the future.

This would satisfy me. If I don't like the new system and think it might eventually make it difficult for me to reserve the most desired weeks, and if Marriott would take it for resale, that is all that I can expect. I only ask they play fair. If I don't like the heat in kitchen, let me get out it.

 

[laurac260]

Let me be the first to say WOW. About a year and a half ago you dropped the bombshell 6 month reservation window for resale owners. I assume that this source is not the same one. IF Marriott is definitely doing this why let it out a year ahead of time. One reason, just like with the 6 month resale res window deal they want to see what the owners reaction is before they do it.

I bought all my weeks direct and even if they give me free entrance into this system I don't see the benefit to me over the current system. To "buy" into something there would have to be a big advantage over II. From the rumors going around about how it would work, none of them appeal to me.

Can't wait to see the posts on this one.

Hi, did I understand you correctly, do resale purchasers have a SIX MONTH window for which to book their weeks??? We are currently trying to decide developer vs resale purchase. We need platinum season, so this would be a big deal breaker for us.

 

[Pit]

Hi, did I understand you correctly, do resale purchasers have a SIX MONTH window for which to book their weeks??? We are currently trying to decide developer vs resale purchase. We need platinum season, so this would be a big deal breaker for us.

No, this would be in violation of the CCRs. Which is the only reason they won't do it. Continue reading, specifically post #68.

 

[hotcoffee]

Hi, did I understand you correctly, do resale purchasers have a SIX MONTH window for which to book their weeks??? We are currently trying to decide developer vs resale purchase. We need platinum season, so this would be a big deal breaker for us.

Last year at a sales presentation, a Marriott salesman who talked about the new exchange system also told me that he believed Marriott intended to eventually cut the reservation window to six months for any owner who bought resale. They have not done that yet, and most people here do not think that they will actually do it.

If I were contemplating a timeshare purchase now from Marriott, knowing about the upcoming changes, I think that I would wait a year and see how things work out. According to posts here, they plan to roll the new system next year.

 

[bobcat]

Last year at a sales presentation, a Marriott salesman who talked about the new exchange system also told me that he believed Marriott intended to eventually cut the reservation window to six months for any owner who bought resale. They have not done that yet, and most people here do not think that they will actually do it.

If I were contemplating a timeshare purchase now from Marriott, knowing about the upcoming changes, I think that I would wait a year and see how things work out. According to posts here, they plan to roll the new system next year.

Here is what I think. Marriott will need weeks in their points system to work. If owners do not join and use their weeks there will be a shortage of inventory. I do not like points. When you have the deed in your hand you own a piece of that resort.

 

[BocaBum99]

I've heard the Open Season HGVC term used and owners are pretty happy with it. Boca, why don't you explain how it works to the Marriott group.

Open Season is a feature of owning HGVC points. If any 2 night stay is available at any HGVC resort, an owner can choose to pay a cash rate for that unit which ranges anywhere from $80/night and up for a 2br unit depending on day of the week and unit type. It's a great feature for owners to get more HGVC nights without having to own a lot of points. And, it reduces the amount of vacant units. Win-win-win. I don't know if the Open Season revenues goes to reduce maintenance fees. Maybe part of it does.

 

[Pat H]

My Marriott source has watched this dialogue and contacted me. He didn't provide any additional info. However, he was amused at the speculation and found the comments to be very interesting.

I doubt that anyone in Marriott will make any decisions based on this thread. If that's what they were seeking by feeding info to us, I think we would have gotten more details about the tentative plans.

I'm sitting in the United Red Carpet lounge at DC's Dulles International Airport, waiting for my flight to Amsterdam. In a couple of days, I'll get on a cruise ship in Rotterdam for a Baltic cruise. Internet connections on most cruise ships are notoriously slow and unreliable. That's why I'll likely be out of touch for most of the next two weeks.

Oh, sure, start a brouhaha and then take off for a month and make us envious to boot! :hysterical:

 

[m61376]

Based on the comments we have been hearing, it looks like they would come up with a system to resell units. Maybe an expanded version of what they have now.

Tom- If you've been on this board for a while, you'll know that Marriott reserves the right to change the Vacation Club program as they wish. It's also very clearly stated in the documents I signed when I purchased my properties. That's how I know.

It really doesn't matter how much they plan on reselling units- there still has to be buyers for them. Unless Marriott wants to do a complete change and no longer maintain fixed pricing (although they have run recent specials, they have always maintained a fixed price policy) they can have the best of intentions of helping owners well their units. But the resale market depends upon supply and demand. People have to be willing to buy and the potential pool of buyers willing to pay full price will likely be lower than the pool of buyers willing to pay lower resale prices, especially at sold out resorts that no longer have an active sales force on site. And Marriott can't even afford to maintain an active sales force at properties it is currently trying to build and promote, so it would be foolhardy to assume that they suddenly will be actively on-site marketing resales at every location for owners who need to sell. So even if they make a concerted effort to resell units, the reality is that the waiting list will likely be years long- and some people just can't wait and continue to pay annual MF's that long.

The bottom line is that Marriott may be so intent on bolstering its bottom line that they make decisions which are even bad for them in the long run. Sabotaging the resale market also devalues each and every ownership. Although some have pointed out that timeshares are not an investment in the traditional sense of the word, I think the majority of buyers have bought anticipating that if they ever decide to sell (and certainly if they need to sell) that their would be retained value in their property. I think it will be hard for a salesperson to pitch buying something and shelling out $40 or 50,000 that would have little inherent value (after all, hasn't Marriott prided itself on selling deeded properties and differentiated itself from other ventures because of equity ownership?).

And, yes, you are right that they have the right to make certain changes. While I don't think it will be good for the system in the long run to sabotage the resale market, I think changing the system for future owners is vastly different then excluding any current owner from a new system. I know we don't agree on this. It appears to me that you feel that developer purchasers should enjoy additional privileges than perhaps they originally bought into, even if at the expense of other owners who would lose some of the privileges they enjoyed at the time of their purchase. Personally, I couldn't enjoy something that was gained at someone else's expense, but that's me. Since all current owners bought into a system with certain exchange privileges, my opinion is that it is only equitable that Marriott extend the same opportunities for future use and exchanges to all current owners (after all, we all have been supporting the properties with our MF's).

Even IF Marriott has the right to penalize people retroactively, it doesn't make it right to do so. Future resale buyers would be in a different situation, because they'd be buying into a limited system, aware of the limitations of their purchases. While I don't think that would be good for any owner (because it would make all Marriotts plummet in value similar to Starwood's voluntary resorts) and I think it would be bad for Marriott in the long run, I don't feel that Marriott has any moral obligation to future resale buyers who purchase aware that they are buying a second class product.

Marriott has long prided itself on the Marirott name and its reputation. I can only hope it will continue to do so.

 

[tango4u]

If we opt out of their new point system...

Do we have to convert to their point system? Can they force us to do so?
If they can not force us, and if we decide NOT to buy into their new point system, and we own some resale weeks, can we still be able to reserve the weeks within our season (12 month)? Can we still be able to lock-off the unit, use one and deposit another to II? Or Marriott will take it away as well, and we will only be able to deposit the whole unit into II for exchange (equal trade, but not trade-up)?
Guess that we will have to wait until next year to find out!! Can't wait...

MN

 

[KathyPet]

Interesting to read all the comments made by resale purchasers justifying why Marriott won't do anything to change their current ownership rights. Is anyone getting just a wee bit nervous here?

 

[SueDonJ]

Open Season is a feature of owning HGVC points. If any 2 night stay is available at any HGVC resort, an owner can choose to pay a cash rate for that unit which ranges anywhere from $80/night and up for a 2br unit depending on day of the week and unit type. It's a great feature for owners to get more HGVC nights without having to own a lot of points. And, it reduces the amount of vacant units. Win-win-win. I don't know if the Open Season revenues goes to reduce maintenance fees. Maybe part of it does.

This sounds similar to II's Getaway options, except that HGVC offers less-than-a-week stays while II doesn't.

Or, am I way off base here?

 

[tango4u]

Interesting to read all the comments made by resale purchasers justifying why Marriott won't do anything to change their current ownership rights. Is anyone getting just a wee bit nervous here?

Well, I travel a lot for business and every year, I accumulate approx. 200,000 MR points, plus 250,000 miles. I always can reserve the weeks using my points... I just wonder how the new point system will work for resale owners, I am not nervous because I bought the weeks fairly cheap and will not loose money when I decide to dump them back to resale market, or even give them to charity and get my tax credits.

Now I think that Marriott can not force you buy into their point system because you own a "deed" week, it's within your right to be able to use a week within the deeded season. However, they can make it harder for you to utilize your TS weeks/usages....

MN

 

[BocaBum99]

This sounds similar to II's Getaway options, except that HGVC offers less-than-a-week stays while II doesn't.

Or, am I way off base here?

Yeah, that's a good analogy. The prices are fixed and only available to owners. And, you can use points or cash subject to the reservation rules (e.g. 2 nights minimum for open season, 3 night minimum for points).

Plus, like I said, benefits accrue to owners and not to II.

 

[ecwinch]

Suedonj is right in this- Marriott specifically points out in all sales presentations that purchase of a TS is not an investment. They aren't stupid and know that if any class action lawyer challenges them that they are devaluing re-sales they can point this out to said lawyer and say "Our agreement is to provide a weeks vacation at a beautiful resort, we never promised to support prices for re-sellers or even original purchasers." I don't think anyone can find any documents that say that they promise to support prices for anyone so to say you can sue them later is really ridiculous.

Goes further than that. Most states require the specific disclosure in the public offering statement that the purchase is not an investment. Here is one from WA:

INVESTMENT POTENTIAL: NONE OFFERED

RCW 64.36.140(17) "XXXX AND ITS AGENTS WILL NOT BE SELLING OR ADVERTISING THE XXXX VACATION OWNER PROGRAM FOR INVESTMENT PURPOSES AND ANY SALES PERSON MAKING SUCH A REPRESENTATION HAS NO AUTHORITY TO DO SO AND IS IN VIOLATION OF THE STATE'S TIMESHARE ACT AND THE CONDITIONS TO THE PROMOTER'S REGISTRATION"

This a document the purchaser usually signs for in most states, indicating receipt.

 

[SueDonJ]

Here's a thought. What if MVCI doesn't allow the transfer of a week's inclusion in this speculated Internal Exchange Point Value System* with ANY resale, regardless of whether the week being sold was a developer- or resale-purchase? Instead, ALL new owners are offered the option by MVCI to be included after the sale - subject to the buy-in costs and point valuations - and MVCI will be afforded an opportunity to profit from every sale.

Sure, the IEPVS* changes the dynamics of exchanging as it currently stands by assigning a higher value on developer purchases (by virtue of the buy-in costs and exchange point value differentials,) and that higher value would not be negated by the non-transfer to new owners. But the non-transfer and buy-in option after every sale will not result in the "but my week will have zero value" doomsday predictions here.

It's just a thought.

*I think that I have invented a new acronym. Is there a tee shirt in my future or what? :hysterical:

 

[SueDonJ]

Yeah, that's a good analogy. The prices are fixed and only available to owners. And, you can use points or cash subject to the reservation rules (e.g. 2 nights minimum for open season, 3 night minimum for points).

Plus, like I said, benefits accrue to owners and not to II.

Well that's encouraging. Is there also something in HGVC to compare to the AC's offered by II when depositing an "in-demand" week? Because that's one perk with II that I would hate to give up.

 

[dioxide45]

Based on prior information, Marriott was planning to still use II to facilitate the internal exchange system. So they would still have to pay a chunk of any exchange fee to II. I don't think Marriott is looking to reinvent the wheel and they are not experts in the exchange business. I think they will utilize II to facilitate these exchanges even though users may go through a different GUI.

Based on the OP, it doesn't appear that there is a plan to exclude resale owners (that is all everyone else’s speculation). It was indicated that they may charge resale owners more to opt in to the program, not exclude them. If course, depending on the price, they may be excluding them.

I think Marriott is actually less concerned with resale owners than many here on TUG think. While there is plenty of speculation here about what will happen with resale purchases, I would find it doubtful Marriott is even taking them in to consideration.

Basically, whatever Marriott does we all have little control of. The only control some of us had was providing input via the survey last year. The new system will be what it is. From our standpoint, when and if it comes out, we will look in to it, see if it makes sense for us. Possibly try it out. If we find we are able to make it work for us and we can benefit from the system, then that is great. If not we would continue to utilize the current system as long as possible. If in the end all it no longer works for us then we would look at selling our weeks, even if they went for $1, we would feel that we got our monies worth since we paid a low enough price by buying resale.

We can't change what may or may not happen, just deal with it when and if it comes.

 

[Latravel]

"Interesting to read all the comments made by resale purchasers justifying why Marriott won't do anything to change their current ownership rights. Is anyone getting just a wee bit nervous here?"

I was thinking the same exact thing as you! Another observation is reading how people think it's just wrong to make any changes that could hurt resale buyers (for many reasons such as property values, investments, etc) yet in the same paragraph state it's ok for Marriott to make changes to future resale purchasers.

 

[Pit]

What if MVCI doesn't allow the transfer of a week's inclusion in this speculated Internal Exchange Point Value System* with ANY resale, regardless of whether the week being sold was a developer- or resale-purchase?

Were you expecting something else?

 

[SueDonJ]

Interesting to read all the comments made by resale purchasers justifying why Marriott won't do anything to change their current ownership rights. Is anyone getting just a wee bit nervous here?

I can't seem to get past the fact resale purchasers feel that they are entitled to protections from MVCI which have never been included with any purchase. As a developer purchaser I never had any expectations that MVCI would be responsible for acting in a manner which would preserve what little financial investment there might be in my weeks should I offer them for sale. I knew and accepted, as I thought we all did, that the financial risk involved in buying and possibly eventually selling a timeshare is not in any way a risk that MVCI assumes in any instance.

 

[SueDonJ]

Were you expecting something else?

Well I don't know what to expect - do any of us?! But some posts here have speculated that resales would be worthless without the ability to exchange. My thought is that if that ability is offered by MVCI after every sale as opposed to possibly not transferring at all from owner to buyer upon a resale, then resales wouldn't be worthless.

Like I said, it's just a thought.

 

[sandesurf]

Hi, did I understand you correctly, do resale purchasers have a SIX MONTH window for which to book their weeks??? We are currently trying to decide developer vs resale purchase. We need platinum season, so this would be a big deal breaker for us.

NO, you're not understanding that right. As far as I can tell, only ONE person made referance to that, and that was something they heard from ONE salesperson. That in NOT a fact, just a rumor, from ONE salesperson.