Marriott: Time to Buy...or Time to Bail?

[Lawlar]

Ain't It The Truth

Reminds me of that ad, where the old mechanic announces it's time to hang it up and sell the shop, and in the next scene, the shop purchase is the dream of the new retiree.

How do you think I feel when I read this post? I sold my bankruptcy law practice a few years ago when times were good. I could be making a fortune today filing bankruptcies, instead of enjoying my days at the beach.

I don't know how long this cycle will last. But another boom will come in time.

 

[jlayne9]

Marriott Mountainside

The question for me is...do I buy when it is at 24-25K and have a better shot of Marriott not exercising their ROFR or do I wait for the "in the right place at the right time" and get something REALLY cheaper but then have a greater risk of losing it on ROFR?
Also, for all of you veteran timeshare owners...
My wife and I have no children yet. We ski every year and have thought that it might be a better idea to buy a ski week and then trade the lockoff for somewhere else later in the year, thereby utilizing the other half for our ski week. This would allow us two good weeks of first class vacationing a year...one of which would be skiing. Otherwise, I have seen it utterly impossible to trade into a good ski week from owning somewhere else that might actually be cheaper on the buy in.
Finally, at this point in our lives my wife and i could technically rent hotel rooms at some of the same resorts for what the MF are, but it is hard to estimate the future value of a timeshare when you dont yet have children. So, I am wondering if it is a smart move to possibly buy in now at possibly a cheaper inital fee and have it later...or just wait and keep renting hotel rooms? Any help appreciated

 

[ondeadlin]

Time to bail.

I truly believe we're in a fundamental meltdown of the timeshare market that will impact resale prices for years, if not a decade.

I mean, seriously, when you take a step back, there is no reasonable economic justification for a single timeshare week being worth $10,000, let alone $40,000. None. Zero. It's completely illogical. That reality was covered up by some very good economic times in the U.S., but there's no covering it up right now.

I can think of few items people will immediately dump to raise cash faster than their timeshare when things go bad - even if it means taking a loss. That's what's driving the resale market down right now and will continue to drive it down for the foreseeable future.

From a developer standpoint, I can think of few items that are more reliant on disposable income. Now disposable income is in short supply, so the developers are really hurting.

How do you think they'll mitigate that hurt? Higher management fees at established resorts, which will go right to your MFs. Don't like it? Well, too bad, you can't afford to dump Marriott, because if you do, your best weeks will immediately be nearly worthless (doubt it? check out prime ski weeks at Marriott Streamside or how the ex-Marriott Hilton Head properties are faring).

There are some bargains to be had on the resale market. If you're very specific in your needs, get a very good price, and can tolerate the risk, this might be a buying opportunity.

But if you're contemplating buying developer, you better realize you might lose 80 percent of your value almost immediately.

And if you made smart resale purchases like Steve, might be time to take whatever profits you can get, or cut your losses, and sit on the sidelines for a while.

 

[ondeadlin]

I ski with my family every year.

Last year we stayed at Mountainside, Summit Watch and Westgate's property at The Canyons. This year we're already booked for Mountain Vista in Avon. In each case, we're targeting specific dates to line up with kids' vacations.

Every one of those weeks was obtained by trading a resale week I purchased for less than $500.

There's no need - none - to spend $25k on a timeshare if you want to ski.

 

[jlayne9]

I ski with my family every year.

Last year we stayed at Mountainside, Summit Watch and Westgate's property at The Canyons. This year we're already booked for Mountain Vista in Avon. In each case, we're targeting specific dates to line up with kids' vacations.

Every one of those weeks was obtained by trading a resale week I purchased for less than $500.

There's no need - none - to spend $25k on a timeshare if you want to ski.

Can you give me (as a neabie) some ideas of properties that would fall in this category of the property that you have and used for trade purposes to get in good resorts?

 

[timeos2]

The worst hasn't hit yet.

Time to bail.

I truly believe we're in a fundamental meltdown of the timeshare market that will impact resale prices for years, if not a decade.

Right or wrong in the long term I'm in 100% with your comments. If you already own, plan to use and are comfortable with the fees and where they are headed hang on to what you own. If you're looking to bail, plan on getting next to nothing but freedom from those annual fees (which may be worth the bail). Buy now? Except for the $1 deal on a week you covet to use for the next 10+ years - no way. Call me risk adverse but there is no way I'm risking my cash on the remote chance this will turn around anytime in the next decade. In fact my bet is we haven't started to see the worst of it yet.

We could both be wrong. But I'll bet we're right. $10,000 for a timeshare today? Dream on....

 

[tango]

I've wondered how timeshare financing works? Does cash raised by MF's get lumped in the same pot as cash raised by sales? Or are they sequestered, sales for building, MF's for maintenance?
Seems like developers need to make money somehow, and if they don't do it by sales, it has to come from the owners.
Thing is, people on this board who are knowledgeable have been benefitting from the ignorance of others who buy at developer prices; they subsidize our cheap vacations. However, this is a situation that cannot last, and actually this board, by spreading the resale gospel, is undermining it's own free lunch. The more buyers are educated against the tactics of the developer, the more difficult it is for Marriott to actually sell at developer prices. But the costs of building and maintaining our resorts remain. Someone has to pay.
I have confidence in this. In the future, I will still need to go on vacations. And while there may not be the huge disparity between timeshare and rental that there has been in the past, but, I still believe that it will be true that timesharing will be the equivalent of buying in bulk, as compared to piecemeal.
In the good times, there were many who felt that the developer prices, were worth the cost for the opportunity. I do not believe that human nature has changed all that much going forward. The good times will roll again.

 

[AwayWeGo]

Timeshare Company Has To Keep Its Mitts Off The Maintenance Fee Money.

Does cash raised by MF's get lumped in the same pot as cash raised by sales? Or are they sequestered, sales for building, MF's for maintenance?
Seems like developers need to make money somehow, and if they don't do it by sales, it has to come from the owners.

Timeshare maintenance fees -- consisting of components for (1) operations & maintenance, (2) reserves, & (3) taxes -- are paid to the condo homeowner association that actually runs the timeshare resort. But until a timeshare is sold out, or close to it, the HOA is apt to be under the control of the timeshare company.

Even so, the timeshare company's bottom line depends strictly on sales of "new" timeshare units (even though there's no such thing as a new timeshare unit, because except for the very 1st occupant the very 1st time, they're all used-used-used by the time anybody gets there & checks in).

Maintenance fee money is strictly to operate the timeshare resort, pay the taxes, & build up a cash reserve for future major renovations. That's supposed to be the case whether the timeshare company is calling the shots or whether resort management has been taken over by an independent, owner-controlled HOA.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

 

[timeos2]

Totally separate if run right

I've wondered how timeshare financing works? Does cash raised by MF's get lumped in the same pot as cash raised by sales? Or are they sequestered, sales for building, MF's for maintenance?
Seems like developers need to make money somehow, and if they don't do it by sales, it has to come from the owners.
Thing is, people on this board who are knowledgeable have been benefitting from the ignorance of others who buy at developer prices; they subsidize our cheap vacations. However, this is a situation that cannot last, and actually this board, by spreading the resale gospel, is undermining it's own free lunch. The more buyers are educated against the tactics of the developer, the more difficult it is for Marriott to actually sell at developer prices. But the costs of building and maintaining our resorts remain. Someone has to pay.
I have confidence in this. In the future, I will still need to go on vacations. And while there may not be the huge disparity between timeshare and rental that there has been in the past, but, I still believe that it will be true that timesharing will be the equivalent of buying in bulk, as compared to piecemeal.
In the good times, there were many who felt that the developer prices, were worth the cost for the opportunity. I do not believe that human nature has changed all that much going forward. The good times will roll again.

Although the lines get too blurred in far too many cases where developers hold on to ongoing management of resorts legally sales and operations are completely separate operations. Resorts should not have any dependence on sales to operate as once they are built and have individual owners those owners pay to operate the HOA. Sales revenue pays back the developer plus, in the past, a big profit margin IF the resort is a success. They have no claim on operational income (fees), but when they hang on as management who really knows? Does anyone think Wastegate wouldn't cook the books to survive? They seemingly pay no attention to other regulations and laws so why would accounting be any different?

In general once the resort is majority individually owned there should be no commingling of sales and operations/maintenance revenues. Doesn't hurt to monitor and make sure they issue an independent annual audit just to be sure.

 

[Vacation Dude]

I ski with my family every year.

Last year we stayed at Mountainside, Summit Watch and Westgate's property at The Canyons. This year we're already booked for Mountain Vista in Avon. In each case, we're targeting specific dates to line up with kids' vacations.

Every one of those weeks was obtained by trading a resale week I purchased for less than $500.

There's no need - none - to spend $25k on a timeshare if you want to ski.

If you consistently want to get a Feb-March ski week, you MUST own a ski week.....trading is a shot in the dark for ski weeks.

If you think you can consistently get a Marriott MS/SW during Feb-March with a $500 trader, you are dreaming.

Marriott SW/MS can be rented on vrbo, redweek, etc and that is also an option rather than buying.

But buying MS/SW for under $20k would be a fantastic deal for the original poster and their idea of squeezing two weeks out of it.

 

[tombo]

Thing is, people on this board who are knowledgeable have been benefitting from the ignorance of others who buy at developer prices; they subsidize our cheap vacations. However, this is a situation that cannot last, and actually this board, by spreading the resale gospel, is undermining it's own free lunch. The more buyers are educated against the tactics of the developer, the more difficult it is for Marriott to actually sell at developer prices. But the costs of building and maintaining our resorts remain. Someone has to pay.

Would you suggest that we sit silently by while the uneducated get fleeced? We can't save everyone but we can at least attempt to save those that find this site. I have actually told people with new owners packets that they made a huge mistake and that they needed to rescind when I saw them leave a sales presentation. Whether they did or not, at least they were warned.

If no more timeshares are ever built most of us already own enough to vacation the rest of our lives. I don't feel that we have profited on the mistakes of others, the developers are the one's who profit on the uninformed. We simply buy weeks that people no longer want or can't afford at resale prices. I can sleep a lot better knowing that I saved a few people a lot of money than I would keeping quiet hoping that many more unfortunate people will pay to build new resorts that I can buy cheap down the road. I don't care if any developer ever sells another week, but I do care that many people are tricked into spending a lot of money on a week that is worth almost nothing as soon as they buy it.

 

[Latravel]

Tango and Tombo, which Marriott do you currently own?

 

[ondeadlin]

If you consistently want to get a Feb-March ski week, you MUST own a ski week.....trading is a shot in the dark for ski weeks.

If you think you can consistently get a Marriott MS/SW during Feb-March with a $500 trader, you are dreaming.

Marriott SW/MS can be rented on vrbo, redweek, etc and that is also an option rather than buying.

But buying MS/SW for under $20k would be a fantastic deal for the original poster and their idea of squeezing two weeks out of it.

I'm sorry, but you're completely wrong on both points.

In the last three years, my family has traded into Mountainside, Summit Watch, Grand Timber Lodge, Streamside, Sheraton Mountain Vista and Timber Lodge (could have had a great Grand Residence trade first week of April 2 years ago as well, but was out of vacation time).

Those trades have spanned the gamet from January to early April. They were almost all for 2BR. Almost none of them came in flex.

A Summit Watch week went for $13k recently on Holiday, incidentally.

It always strikes me as funny when people who have never tried to trade into ski season with a cheap resale week insist it can't be done ... mostly because that's what they've been told by salespeople to feel good about spending $20k to $45k on a ski week.

But, hey, more power to you man, without guys like you, there'd be no great trades for guys like me.

 

[dioxide45]

Thing is, people on this board who are knowledgeable have been benefitting from the ignorance of others who buy at developer prices; they subsidize our cheap vacations. However, this is a situation that cannot last, and actually this board, by spreading the resale gospel, is undermining it's own free lunch. The more buyers are educated against the tactics of the developer, the more difficult it is for Marriott to actually sell at developer prices. But the costs of building and maintaining our resorts remain. Someone has to pay.

TUG represents probably less than 0.5% of the TS owners. So our impact on the overall TS market will be minimal. For each of those people who find us before plunking down tens of thousands on a TS there are hundreds of others that don't. I don't think we are going to bust the TS developers banks by educating those few who find these boards.

 

[tango]

Didn't mean to imply that people shouldn't be warned about making mistakes. Only that whenever there is a price disparity, the market tends to equalize in the long run, so those who have been on the benefitting side of the equation shouldn't really be distressed when eventually the disparity is corrected.
And, I wasn't really afraid that the information on this board would change the world. I know that the vast majority still are unaware of the info provided here. Thence, once the economy improves, that vast majority will be back.
However, it does seem that from the other answers, that rising MF's are a different subject. I still think though that in the end market forces will prevail on MF's and they will still end up to be more of a bargain than renting (especially if you get your TS for a buck).
We're in the process of owning at Ko Olina.

 

[kjd]

Time to buy or sell?

Everyone has a different perspective but inho the time to buy (developer purchase or resale) is when you have the money to spend and want to have the timeshare experience for a number of years at places you want to vacation. Market conditions are secondary.

Timeshares are not an investment. They are like a golf membership or a car lease. They are merely a license to use a property under certain terms and conditions. Therefore there is no loss of money. There is only a loss of opportunity if you didn't make full use of the opportunity.

While the resale prices are somewhat negotiable they are a bargain in the current economic enviornment. However, resale buyers also give up the advantages of points which are most important to some Marriott owners. If points are not important then resale is a better option. Points can be a terrific advantage for foreign travel or if traveling becomes more expensive in the future.

Most sellers in todays' market cannot expect full value. Even if you bought resale. Cash is king these days. It's a buyers market.

 

[Latravel]

If you bought from Marriott, I wouldn't sell.

Since I bought my units from Marriott, I haven't paid for a hotel stay in years. I know I will continue to travel for many years in the future and without my units, I would have to pay those expensive hotel costs. Since hotel costs keep going up, my timeshares are worth more to me each and every year because of this unique ability.

That is what separates Marriott from those other cheap timeshares (I have one of those too), that are being sold for next to nothing on the resale market.

 

[Vacation Dude]

My point about trading into Marriott Park City for ski weeks is if your kids have spring break the first week of March they you are limited to trying to trade into a 2 bedroom MS/SW at that exact time only.

There may be studios, 1 bedrooms, etc for various trade times, but not CONSISTENT 2 bedrooms ski weeks 11 months out.

Then consider you generally like to book air fare ASAP, especially if you use FF points.

If someone can buy MS/SW 2 bedroom TRUE ski week (thanksgiving-tax day) for $13,000 or so, then I take my hat off to you as I have never seen one for under $20,000.

 

[sernow]

...without my units, I would have to pay those expensive hotel costs. Since hotel costs keep going up, my timeshares are worth more to me each and every year because of this unique ability.

Heidi,

Please help me understand your thinking here. I don't know how many points you received initially from Marriott from buying, but will stipulate that these bonus points clearly have value (although I'm not sure of the exact value) and must be deducted from the initial cost to determine the actual cost of the timeshare. What I don't understand is the contention that your ability to trade your timeshares for points makes them more valuable each year because hotel costs keep going up.

You can only trade your week in for a fixed amount of points, and that amount was determined when you bought. That fixed amount of points are continually devalued as maintenance fees go up and as Marriott requires more and more points for rewards. Add in the exchange fee of $104, which I'm sure goes up too, and you can see my confusion.

In addition, anyone can buy up to 50k points per calendar year from Marriott for $625. A spouse is entitled to do the same and these points can be combined at the time of redemption. Points can also be earned through a the Visa rewards card. The ability to earn points aren't exclusive to MVCI ownership.

What is your reasoning behind the claim that trading a very expensive to buy and maintain timeshare for points is a good deal and the value of doing so increases each year?

 

[ondeadlin]

Since hotel costs keep going up, my timeshares are worth more to me each and every year because of this unique ability.

That is what separates Marriott from those other cheap timeshares (I have one of those too), that are being sold for next to nothing on the resale market.

The problem with this theory is that Marriott just seriously devalued the points program by raising the points required for awards.

The points program, always a very marginal investment, is now flat-out a bad deal unless you're wracking points on business travel.

 

[Steve]

Since I bought my units from Marriott, I haven't paid for a hotel stay in years.

This could work if you only want to stay in Marriott hotels, I suppose, but what if you want to stay other places? For example, two of my favorite vacation destinations are Jackson Hole and Santa Barbara. Not only do these locations not have Marriott timeshares, they don't even have ANY brand of Marriott hotels. I also love the Glacier National Park area of Montana and the Oregon Coast. Again, no Marriotts. Despite how large Marriott is, there are tons of locations all over North America and Europe without Marriott hotels.

What do you do about that? Do you just skip locations that don't have Marriott hotels? Even in cities that have Marriotts, sometimes they aren't where I want to stay due to location or various other factors. Timeshares are somewhat restrictive by themselves. The last thing I want when I go on a non-timeshare vacation is to be restricted to only one hotel chain.

It's interesting that people who buy directly from Marriott often cite the increased flexibility of being able to exchange their weeks for Marriott Reward Points as worth the extra cost. If this leads you to only travel to places that have Marriott hotels, however, then I find that confining. I don't want to be locked into just Marriott hotels because I spent so much on my timeshares from Marriott that I can't justify paying for hotels on my non-timeshare trips. That just takes a lot of the fun out of travel.

Steve

 

[csalter2]

You need to think "It's gravy"

I have been reading a lot about people being so upset about the devaluation of Marriott Rewards Points and the ability to stay at a timeshare or hotel.

The bottom line is this. There is flexibility with your timeshare and sometimes you can trade for the points. As a buyer from the developer that is merely an option. However, any of these points if used wisely should just be considered gravy. That's all. Or if you don't like gravy, call it icing on your cake.

I will never pay $625 dollars for points. However, I use my premier visa and get 5 points on the dollar. I pay for everying on on Visa. I pay my monthly bills, all my goodies every month and I get all of these points each month. My wife travels all over North America using our Visa for business. We build up all of these points each and every month and that along with her airline miles gets us to places. Last summer we traveled to Puerto Rico, Orlando and Japan on Marriott Rewards points along with her Continental FF miles which we pay for with Marriott's Visa. My total cost was $75.00 which is the cost of the card. Gravy baby, Gravy. Nothing out of pocket. Oh, and when she and her mother stayed at the Marquis in New York for a week. That was icing. Nothing out of pocket.

This should be the way everyone should be using the MR system. There should not be any additional costs if you use it as a reward like it is suppose to be. You are being rewarded for being a frequent customer. You have to spend the money anyway, so use your Visa and pick up the points. I only own one week with Marriott at Ko Olina. I don't go to Hawaii all of the time, but I exchange it or use points. I like that flexibility. The points come in handy if I am traveling to places that don't have timeshares. It is just another option.

I would suggest that people stop complaining so much when this is really something that you could get for nothing if you do it right. I have a huge line of credit with our Marriott Visa and we pay it each month and it cost us to travel to very nice places the cost of the card. If you put things in the proper perspective and think about what you're doing you really have no need to complain.

Think gravy baby, gravy. It is a perk. No more no less.

 

[ondeadlin]

Think gravy baby, gravy. It is a perk. No more no less.

Hey, if it makes you happy, that's what matters.

But with MR points being the only significant thing you get for paying between $10,000 and $30,000 more than resale for ... I'd call it a pretty expensive perk.

 

[Latravel]

It's amazing to me that people only mention the "devaluation" of points but never mention that hotel stays are costing MUCH more than they used to. The amount of points needed for a hotel stay seem to be in corelation to the hotel costs. I agree, why complain when it's a free perk!

If I didn't have this perk, all my unit would be good for is just using that week. We know that the value of this week just keeps tanking.

Regarding being forced to stay in Marriott. It's true it's a little more confining. When we were trying to book a Marriott hotel in Venice using points, there was only one option that wasn't very good. On the other hand, at least the hotel stay is FREE. Not a bad trade off if you ask me. But the bottom line, having the option to stay in hotels is a lot more flexible than just staying at timeshares.

 

[ondeadlin]

On the other hand, at least the hotel stay is FREE. Not a bad trade off if you ask me. But the bottom line, having the option to stay in hotels is a lot more flexible than just staying at timeshares.

The hotel wasn't free, though.

Not even close.

If you traded your timeshare for it, it cost you the better part of two years MFs, plus the premium you paid to buy developer.

Now, you can make various economic arguments to show it was a better deal using points - powershift is probably best at it - but even he wouldn't use the word "free", because it's not free, not by any means.

Even if you got just used the credit card and charged $170,000 to get the points, that wouldn't mean it was free. I've get 1.5 percent cash back on my Amex (5 percent on groceries and gas), so if I charged the same amount, I'd get back at least $2,250 back. I don't consider it free money, though, it's the rebate I contract for.

It's all relative and there are various strategies, but it's nowhere near free.