Marriott points and internal exchange program - the latest info

[indyhorizons]

Exactly! That is why I believe a bonus time program ala the HGVC Open Season program would be worth a $1000-2000 premium over resale price to enroll a week.

Marriott wants to control all of the inventory. They can do it if all owners automatically deposit their week into their internal program. That gives them the flexibility of offer bonus time, trade ups, etc.

The biggest source of real gain in a weeks based system such as Marriott currently has is in recapturing value from breakage in weeks. That breakage is hugely valuable. FAR more than an exchange fees that Marriott can get.

So by breakage in weeks, are you referring to (using II as an example, as I don't own any timeshare beside Marriot) the new short stay exchange where you can split your week? Why is that valuable? Because you have to pay for 2 exchanges? I'm not sure I follow.

 

[BocaBum99]

Back of the envelope business case for Marriott.

I think it may be helpful to characterize a potential view of the economics for an internal exchange program for Marriott. This is just a guess. But, it provides a ball park view and an idea of the relative contribution of various program elements.

Let's just use a couple of simple assumptions. Dave mentioned that there are about 700,000 Marriott intervals in the system. Let's go with that number. In addition, Marriott had sales of $212M in the second quarter of this year. Assuming a $23,500 average revenue per sale, that is about 9000 sales per quarter or 100 sales per day. Seems roughly in the ball park.

Conservatively, I'd say that Marriott will set a price for a membership into an internal exchange program of between $2000-5000. Let's be conservative and set it at $2000.

Then, we can guess some quarterly revenue potentials.

1) If such a program could add a premium to a Marriott sale of $2000 per sale, that would be 9000 * $2000 = $18M per quarter or about 8% revenue increase. Obviously, they would probably discount this value to zero for all platinum owners to get critical mass early. But, over time, this could be the value they extract from the program in upfront fees. In fact, what I would do is waive it completely for the first year and then start increasing it until it reaches the maximum. They could set the MSRP at $5000 to scare people into joining, but never actually ever charge that much.

2) I would waive all exchange fees or make it $49 at most to be competitive with their primary competitors. And, I would charge and annual fee of $75. If Marrott gets 250,000 weeks enrolled or about 35% of current owners.

250000* 75 / 4 = $4.6M per quarter just in quarterly fees.

100,000 exchanges per year => 25000 * 49 = $1.2M per quarter in exchange fees. => NOT MUCH. They are NOT doing this to get exchange fees.

3) Reclaiming value from breakage. Breakage are weeks that expire and go unused. These are either owner weeks that leave them go empty or unreserved. Or, it is deposits that owners make into II that they never use for exchange. If Marriott can reduce breakage by just 10%. Look what happens to economics:

700,000 intervals * 10% breakage reclaimed *$800 minimum rental value / 4 quarters = $14M per quarter. This is the untapped potential of controlling inventory. Note that it is almost as much as it is in selling the product in the first place.

4) Getting extra value from resale customers. I don't know the number, but assuming there are 5% of the total population resells their week every year and 50% of those convert back into the program at a $2000 fee. Here is the contribution:

700000 intervals * 5% owner churn * 50% conversion rate * $2000 per conversion / 4 quarters per year = $8.75M per year in resale revenue.

Total quarterly impact:

1) $18M for retail conversion fees (probably waived for first few years of program)

2) $5.8M in exchange fees and dues

3) $14M in reclaimed breakage rented off

4) $8.75M in resale upgrade fees

Total: $46.5M per quarter or 22% increase in revenue. Anything that has the potential of increasing revenue by that much is a huge winner and a no brainer.

If Marriott creates the program and gives away the program to all retail buyers forever, here is still what the program does: $28.5M per quarter = 13.5% of revenue.

Here is where that money comes from.

1) Retail Program fees. Marriott doesn't really care about the first fee much. Even if they give it away, it's hugely positive for the company. They will try to get as much of it as they can, though. If there is a charge, this is a tax on the retail buyers.

2) Exchange fees. This is a wash for current owners since they pay these fees anyway for exchanging in II.

3) Breakage. This comes out of II. The great thing is that this doesn't cost owners anything. It's free money that was going down the drain.

4) Resale Program fees. This is coming out of the hide of everyone. Whatever the resale program fee is, all ownerships will immediately be reduced by that amount. That's because when they go to sell, their product will sell for a reduced amount roughly equal to the resale program fee. You don't fee that upfront. But, you definitely experience it when you go to sell. Grandfather people into the program doesn't matter. The loss is incurred when you sell. If you never sell, you never take this loss.

If I were Marriott, I would do this as soon as I could.

 

[indyhorizons]

3) Reclaiming value from breakage. Breakage are weeks that expire and go unused. These are either owner weeks that leave them go empty or unreserved. Or, it is deposits that owners make into II that they never use for exchange. If Marriott can reduce breakage by just 10%. Look what happens to economics:

700,000 intervals * 10% breakage reclaimed *$800 minimum rental value / 4 quarters = $14M per quarter. This is the untapped potential of controlling inventory. Note that it is almost as much as it is in selling the product in the first place.


3) Breakage. This comes out of II. The great thing is that this doesn't cost owners anything. It's free money that was going down the drain.

Interesting. I guess I couldn't relate to your term "breakage" because none of those scenarios has ever happened to me. As yet, I have always used my deposited weeks. Also, the one time I wasn't able to use my AC, I sold the week on e-bay (I know that's a no-no).

Anyway, I'm still opposed to the MEP (in this speculative discussion) because I am not prepared to pay $2,000 MORE to enjoy what I already have. I did not purchase at one of the high-end resorts, we own at MHZ and it was what we could afford at the time. It has proven to be a good purchase for us, we've been happy with our trades. Do I think it is worth $2000 more to continue to use the priveleges I have become accustomed to? No. Fortunate for me, in YOUR scenario, I may have my fee waived (if I decide to opt-in) because we are platinum week owners.

 

[BocaBum99]

If the above are the conservative economics of a Marriott internal exchange program, even though the real cost to all owners would be equal to the resale program enrollment fee, they gain back new features they never had in a points program and bonus time. As I mentioned, that really is a fair fee for such a program.

If Marriott launched a program with the above economics, I'd say that they are a great company that is owner friendly.

It is possible for Marriott to use the same model that I have provided and be very greedy by setting the values very high and really extracting as much as possible from owners. There is a chance that they would do that. But, there is a limit which is the pain the owners are willing to bear for this program enhancement.

Also, I should note, that with these economics, Marriott does NOT need to change the 12/13 month rule for resale consumers. I believe they may just be using it to scare people into buying into the program or from the developer. This program is so profitable, there is no need to subject themselves to bad PR, owner class action lawsuits and the energy drain it takes from the organization. Both systems can co-exist.

In fact, Marriott can create a light program where you get no new features, but you turn over your week to Marriott automatically and you get access to bonus time. That would be a way to get more people to enroll, control more inventory to take more revenue away from II in reclaimed breakage, and to receive an upgrade opportunity.

As you can see, there are so many new avenues for Marriott to make revenue that this program is a no brainer for Marriott management.

 

[BocaBum99]

Interesting. I guess I couldn't relate to your term "breakage" because none of those scenarios has ever happened to me. As yet, I have always used my deposited weeks. Also, the one time I wasn't able to use my AC, I sold the week on e-bay (I know that's a no-no).

Anyway, I'm still opposed to the MEP (in this speculative discussion) because I am not prepared to pay $2,000 MORE to enjoy what I already have. I did not purchase at one of the high-end resorts, we own at MHZ and it was what we could afford at the time. It has proven to be a good purchase for us, we've been happy with our trades. Do I think it is worth $2000 more to continue to use the priveleges I have become accustomed to? No. Fortunate for me, in YOUR scenario, I may have my fee waived (if I decide to opt-in) because we are platinum week owners.

In my scenario, you get the point system, higher and lower point values for smaller units, units with a view and season. And, you get access to bonus time. That is much more than II provides today.

And, even if you get in for free, your ownership is losing value equal to the resale program fee. It's a hidden cost that isn't obvious or realized until you decide to sell. But, it is a real cost nonetheless.

 

[chris5]

No, these "documents" are irrelevant to resale purchasers because they didn't contract with Marriott to buy their timeshare/condo interest.

This goes to the heart of nearly all my posts and my goal to inform and educate people about what deeded "rights" people have vs. what are simply contractual "add-ons" which Marriott contends it can change at will (ie. bonus MRP points on its egregious loans, trading for points, your personal adviser, etc.)

I would love to see the documents that everyone always refers to which (at least according to all the posts I read from direct buyers) evidence the illusory contract that they entered into with Marriott (ie. Marriott promises things that they can at their own whim change or rescind, etc.) Note: if one side in a contract can change the terms when they want, it is not a contract... but I digress.



Many people often say that resale purchasers "lose the right" to exchange for points, or other perceived benefits. I see it from a different perspective. There are two parts to a Marriott timeshare ownership (the following should be a sticky named YOUR MARRIOTT "RIGHTS" 101):

1. DIRECT and RESALE BUYERS have equivalent deeded rights
Your rights in your deed=Your right to reserve a week in your season, at your resort, 12/13 months in advance, and use it as you wish (yourself, friend, family, rent out, any exchange program you choose to contract with). MF you pay are up to your HOA (mostly controlled by Marriott but legally distinct.) Marriott doesn't own your TS or project, you do. Any "documents" you signed as a direct purchaser have nothing to do with these rights other than that Marriott had to transfer the deed to you, after which they are done. As a resale purchaser, you got the same deed. The deed and accompanying CCRs, etc. do not distinguish between direct purchasers and resale purchasers.

2. Other stuff
anything other than 1, above, is (apparently) subject to change at any time at the whim of Marriott or any other vendor. In reality this "other stuff" isn't part of your rights as a "Marriott" timeshare owner, but a "side deal" or deals that may have been promised to you as part of the sale, or something you perceived you were getting. You should not think that this is a "right" that you have.

This other stuff (which may or may not be available to a direct or resale purchaser) includes: right to trade unit for points for round the world trips or weeks in Paris (which of course will never be devalued), glorious promises about trading your unit with II's program (salesman:"You can lock off this mud week and trade the studio for a 2BR in Maui..."), promises in your sales presentation about bonus MRP each year you repay your loan (which of course won't be withdrawn), the new Marriott internal trading program, redweek, is subject to change, renegotiation, etc.


In fact, few people realize that legally Marriott has no ongoing direct obligation to you at all. They have an indirect obligation as a manager of your resort for the HOA. They don't have any legal obligation as manager to do anything other than 1, above, or what it contracts with the HOA to do, which contract can end. This means that your resort called "Marriott's XXXXX resort" could become "XXXXX resort," once the management contract ends (and this has happened.) This is the leverage Marriott has to demand high management fees (and thus higher MF).

So, hopefully, the above puts all the commentary about what can or can't be done (positive statements), and what should or shouldn't be done (normative staments), in context.

Well, your commentary does not exactly end the matter. I think you have the basic stuff right, as far as rights that might run with a deed of real property (in this case fractional time interests in a condominium) Marriott conveyed to owners, as opposed to obligations anchored in promises that Marriott has made to owners in its contracts.

However, this is a gross oversimplification of whether the owners are entitled to "relief" that extends beyond the rights transferred or promises made. That relief might be grounded in antitrust or consumer protection statutes that might prevent Marriott from engineering the scenario laid out by Perry in post 211. I'm sure there's an enterprising lawyer out there, grounded in antitrust or consumer protection/fair practices law, who thinks that if Marriott has deliberately set up a process that could deflate and manipulate the "resale" market to benefit its ROFR option, to the detriment of existing owners, that this could conceivably violate federal or state antitrust or consumer protection laws.

You all give a lot of credit to Marriott in that many of you believe they have teams of lawyers who must have assuredly have thought out this entire scenario. In many cases that might be true, but I never underestimate the ability of even the most talented and highly paid corporate lawyers and corporate managers to miss something or be clueless about some other area. And it never surprises me that some enterprising lawyer (whether a class action specialist or a government lawyer in the DOJ or the FTC or 50 State AG offices) might come up with a novel way to challenge behavior that is arguably unfair, as Perry and others appear to speculate.

 

[hotcoffee]

I fear for everyone's resale values, and for the impact that this may have on the Marriott brand overall, if they decide to exercise this right and only convey partial usage rights to future resale purchasers.

I really believe that hoping or expecting Marriott to grandfather current resale owners into the new program misses the point. If Marriott were to deliberately trash resale values (which affects every owner regardless of whether resale owners are grandfathered into the new system or not), I wonder if anybody in Congress would be interested. There was a time when politicians were interested in taking on the timeshare industry. Maybe there still would be some interest. It seems to me that a timeshare company stopping their owners from being able to sell their timehares at prices consistent with what is (or had been) their market value would be very anti-consumer. And some politicians have in the past been noted for being consumer advocates.

Sure, I would like to be grandfathered into the new system and have the same reservation and trading rights as anyone else, but I still want my right to sell preserved. If Marriott were to enter the resale business themselves (in a bigger way than they currently are), and they would broker the sale of their timeshares, I personally would be satisfied by that as long as any buyer has the same reservation and trading rights as any current owner. Anything short of that will cause resale values to plummet.

 

[indyhorizons]

In my scenario, you get the point system, higher and lower point values for smaller units, units with a view and season. And, you get access to bonus time. That is much more than II provides today.

And, even if you get in for free, your ownership is losing value equal to the resale program fee. It's a hidden cost that isn't obvious or realized until you decide to sell. But, it is a real cost nonetheless.

Which is a point that I made quite a few points back. THere will be drawbacks that will not be apparent to the average owner. Heck, without this discussion on tug, quite possibly I wouldn't not have been able to identify the potential drawbacks. Having said that, I think that if Marriott spins/promotes/markets it right, they will not have any problem getting the average owner to join this program. If people feel they are getting more than they already had, then they will view it as a win-win. Perhaps they will never have to sell in which case, joining will have been a great deal for them.

 

[SueDonJ]

... I think it may be helpful to characterize a potential view of the economics for an internal exchange program for Marriott. This is just a guess. But, it provides a ball park view and an idea of the relative contribution of various program elements. ...

Thanks, that was very helpful.

Wow! That's a lot of revenue despite the conservative factoring that you've used. Good stuff.

 

[Dean]

In a nutshell, if you purchase resale, no, you do not get the same documents. The agreement that was sent to me yesterday to buy a resale WAS NOT a Marriott document.

But legally the documents and often the deed, are written in such a way that you assume the responsibilities and requirements thereof.

 

[m61376]

I understand what a few posters are saying that they had an expectation of how the system was when they bought therefore Marriott has a moral obligation to continue.

It has never happened that way in the past so why would it happen in the future? Marriott can and will change the system now and in the future. There have been some negative changes: Point devaluations, removing the points for financing program. And there have been some positive changes: including stays at Marriott timeshares toward Elite credit, removing black out times.

They have to change to be competitive, to be in alignment with other timeshare companies, to be profitable, to offer new programs to attract new customers. Is this morally wrong? Were you cheated? NO!!!! As others have said, we still have the right to use our one week a year at our resort and they cannot alter this right. There just may be some changes to the other perks but that was a risk you took when you purchased outside the Marriott system because you didn't feel those perks were worth paying the extra cost. You didn't pay for those benefits upfront.

I don't feel Marriott can do what ever they want. I just don't have the same anxiety that others may feel. I bought direct from Marriott for this peace of mind. How much is this worth to you?

I don't know why, but you continue to miss the point here. The only perk which was at risk (actually it was a known fact that it was unavailable) was the ability to trade for points.

And, as I stated before, the point devaluations should have been recognized by buyers in advance, because there has been historical precedent for this over time.

There were no other risks that were even remotely on the horizon when many resale purchases were made. In fact, buyers were repeatedly assured by owner modifications and even salespeople that the ONLY difference in ownership was the ability to trade for points. That was the singular distinction and the one discussed repeatedly. So, to assume that resale buyers didn't pay for other benefits up front is just plain wrong- we paid for having the same benefits of usage as every other owner, including the same ability to trade our weeks, the same ability to book our units, and the same priority in room assignment. We opted not to pay for a single perk- the ability to trade for points.

So, implying that resale purchasers basically deserve whatever limitations Marriott decides to throw at them because we decided not to pay for the privileges is really quite arrogant.

 

[m61376]

Hotcoffee- I agree with you- don't get me wrong- I am not in favor of penalizing future resale owners as long as current ones are grandfathered in, for the very reasons you mention. My point is that legally and morally I think they are two different situations, because former resale buyers bought under a given set of legal documents and assumptions based on precedent, which could be interpreted as an implied contract. IF Marriott was to change the program going forward, unless some political or other force as you suggest decided to intervene, I don't think buyers could cry foul if they were aware of the limitations at the time of their purchase.

I think the only basis for outside intervention would be the negative impact such restrictions would have on the inherent value of the property (resale value) but, since the documents all specify that the units are not investment property, that may insulate Marriott from any such claims.

Boca- what a great analysis!

 

[Eric]

I hate to stop the ramblings but did anyone read Dave's post?? ( see below)
If he is correct, everyone will be invited so if you want to start arguing about what the fee is, fine, but why argue about something that Dave never said ??? geez, Marriott will probably change their minds 5 times before they make the change, but don't let that stop the bickering





______________________________________________________
Those who bought directly from Marriott will pay a relatively low fee if they choose to join the points program. Marriott intends to make the fee low enough so that many, many owners will join. Those who bought resale will pay a higher fee, possibly much higher, if they wish to join.

 

[Bill4728]

I hate to stop the ramblings but did anyone read Dave's post?? ( see below)
If he is correct, everyone will be invited so if you want to start arguing about what the fee is, fine, but why argue about something that Dave never said ??? geez, Marriott will probably change their minds 5 times before they make the change, but don't let that stop the bickering

Stop bickering?!

What fun is that??

 

[Pit]

3) Reclaiming value from breakage. Breakage are weeks that expire and go unused. These are either owner weeks that leave them go empty or unreserved. Or, it is deposits that owners make into II that they never use for exchange. If Marriott can reduce breakage by just 10%. Look what happens to economics:

700,000 intervals * 10% breakage reclaimed *$800 minimum rental value / 4 quarters = $14M per quarter. This is the untapped potential of controlling inventory. Note that it is almost as much as it is in selling the product in the first place.

I don't see any new revenue here. Unreserved weeks are already available to Marriott for rental to the general public. Regarding unused weeks -- where a reservation is made but the owner or the exchanger is a no show -- how is Marriott to know, in advance, that the owner or exchanger will be a no show?

Perhaps you're suggesting owner deposits to the internal system that go unclaimed will expire well ahead of the use date, and Marriott can then rent the deposit (i.e. rent units out instead of making them available for owner exchange). Sounds very RCI-like.

I believe they are doing this to differentiate the developer product from resale. Because today, there's just no justification for the price delta. They want to draw (or keep) prospective buyers away from the resale market and be able to offer some rational explanation if buyers pop the resale question. Otherwise, they would just include everyone in the point system and allow points to transfer with the resale - as Hilton and Hyatt do.

 

[chris5]

I think the only basis for outside intervention would be the negative impact such restrictions would have on the inherent value of the property (resale value) but, since the documents all specify that the units are not investment property, that may insulate Marriott from any such claims.

Not so; it seems to me, that restraints on alienation (like the ROFR), which are generally disfavored in the law unless reasonable, when coupled with a manufactured mechanism for depressing resale value, could all amount to an unfair, deceptive or anti-competitive practice. The legal documents don't insulate one from practices that are contrary to antitrust or consumer protection public policy under state or federal statutes. This was the point I perhaps didn't make clear in an earlier post.

 

[BocaBum99]

I don't see any new revenue here. Unreserved weeks are already available to Marriott for rental to the general public. Regarding unused weeks -- where a reservation is made but the owner or the exchanger is a no show -- how is Marriott to know, in advance, that the owner or exchanger will be a no show?

Perhaps you're suggesting owner deposits to the internal system that go unclaimed will expire well ahead of the use date, and Marriott can then rent the deposit (i.e. rent units out instead of making them available for owner exchange). Sounds very RCI-like.

I believe they are doing this to differentiate the developer product from resale. Because today, there's just no justification for the price delta. They want to draw (or keep) prospective buyers away from the resale market and be able to offer some rational explanation if buyers pop the resale question. Otherwise, they would just include everyone in the point system and allow points to transfer with the resale - as Hilton and Hyatt do.

I have my perspective because I have seen utilization statistics for various resort groups and exchange companies. There is a surprising amount of under utilized resorts and expiring or sell off weeks. Why do you think that RCI and II have such a huge rental pool of getaways and extra vacations. When the developer maintains control of those expiring weeks, they can profit from them. When owners control inventory by booking reservations and making deposits into exchange companies, those deposits become under the control of the exchange company instead of Marriott. Huge money left on the table.

When owners own points, they don't have to book anything to keep their points. Lots of owners allow points to expire. An amazing number do. The unreserved inventory due to the points not being booked creates excess inventory for rent via bonus time. Just look at all the systems that have bonus time. It is very plentiful. Expiring points = bonus time usage + empty units.

 

[BocaBum99]

I believe they are doing this to differentiate the developer product from resale. Because today, there's just no justification for the price delta. They want to draw (or keep) prospective buyers away from the resale market and be able to offer some rational explanation if buyers pop the resale question. Otherwise, they would just include everyone in the point system and allow points to transfer with the resale - as Hilton and Hyatt do.

It seems a bit cynical to believe that the only reason Marriott is doing this is to suck more value out of the ownerships of their current customers.

At least in my approach, owners are gaining a new set of features and they are paying for it with equity in their current ownerships instead of an upfront fee.

 

[dioxide45]

I don't see any new revenue here. Unreserved weeks are already available to Marriott for rental to the general public. Regarding unused weeks -- where a reservation is made but the owner or the exchanger is a no show -- how is Marriott to know, in advance, that the owner or exchanger will be a no show?

.

I don't think Marriott rents unreserved weeks on Marriott.com. Those weeks you see there are weeks turned in for points or developer owned weeks. I believe owned unreserved weeks get bulk banked with II and go in to the exchange or getaway pool.

 

[RandR]

I hate to stop the ramblings but did anyone read Dave's post?? ( see below)
If he is correct, everyone will be invited so if you want to start arguing about what the fee is, fine, but why argue about something that Dave never said ??? geez, Marriott will probably change their minds 5 times before they make the change, but don't let that stop the bickering

_____________________________________________________
Those who bought directly from Marriott will pay a relatively low fee if they choose to join the points program. Marriott intends to make the fee low enough so that many, many owners will join. Those who bought resale will pay a higher fee, possibly much higher, if they wish to join.

Eric, everyone may get invited but if it costs direct buyers $500 and resale buyers $5000, they have effectively not invited resale buyers.

 

[PerryM]

Flushed down the toilet...

Eric, everyone may get invited but if it costs direct buyers $500 and resale buyers $5000, they have effectively not invited resale buyers.

It's much worse than that - WE, the owners, are going to be kept from exchanging our units with other Marriott owners - why is Marriott interfering with this basic right of timeshare ownership?

Take a sold out resort, like MountainSide, and I want to exchange my week 52, which I bought resale, for a week 7, and that owner bought Marriott and is in the new system. These are the ONLY weeks 52 and 7 that aren't being occupied by the owners or rented for big bucks. Neither owner can exchange with the other owner.

We both pay MFs, elect the HOA members who then decide who will be the management firm, which is Marriott, and then pay Marriott to clean the toilets.

Now how does Marriott get to interfere with the two Marriott owners enjoyment of timeshare ownership at their own resort which Marriott cleans the toilets.

Marriott made their commission when both units were first sold - they were happy back then. Now they want to interfere with the descendants of the original owners (not family but resale owners).

I just don't see where Marriott has any right to interfere with the owners' enjoyment of ownership of the timeshares.

Somebody show me where this is perfectly OK; beyond the legal fine print that allows them to bully us.

Marriott is erecting barriers for one owner to exchange with another owner.

I understand that both owners can still use II but why do we owners tolerate Marriott screwing around with our exchanging ability. They need to clean the toilets better and stop messing with us.

 

[Pit]

I have my perspective because I have seen utilization statistics for various resort groups and exchange companies. There is a surprising amount of under utilized resorts and expiring or sell off weeks. Why do you think that RCI and II have such a huge rental pool of getaways and extra vacations. When the developer maintains control of those expiring weeks, they can profit from them. When owners control inventory by booking reservations and making deposits into exchange companies, those deposits become under the control of the exchange company instead of Marriott. Huge money left on the table.

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.

When owners own points, they don't have to book anything to keep their points. Lots of owners allow points to expire. An amazing number do. The unreserved inventory due to the points not being booked creates excess inventory for rent via bonus time. Just look at all the systems that have bonus time. It is very plentiful. Expiring points = bonus time usage + empty units.

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.

 

[Pit]

It seems a bit cynical to believe that the only reason Marriott is doing this is to suck more value out of the ownerships of their current customers.

At least in my approach, owners are gaining a new set of features and they are paying for it with equity in their current ownerships instead of an upfront fee.

Well, I am a bit cynical when it comes to timeshare developers. However, I think you misunderstood me. I believe they are doing this in an effort to improve developer sales. They want to differentiate their product from the Marriott week on ebay. They also need to compete with Starwood, Hyatt, and Hilton, who already offer internal point systems.

Marriott might surprise me here. For me, the most revealing detail will be whether or not they allow the point system to transfer with the resale for free (as do Hyatt and Hilton). Marriott has the option to do this without depressing resale values. I'll reserve judgement until I see which path they choose.

 

[Pit]

I don't think Marriott rents unreserved weeks on Marriott.com. Those weeks you see there are weeks turned in for points or developer owned weeks. I believe owned unreserved weeks get bulk banked with II and go in to the exchange or getaway pool.

I don't know if they rent the excess days/weeks via marriott.com or not. I was just pointing out that Marriott has already granted themselves the right to rent unreserved weeks. It is written into the CCRs. Nor do I know the details of the II-Marriott agreement, but I suspect that Marriott profits from rentals (i.e. getaways) through II.

 

[dougp26364]

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.