Marriott to Spin Off Timeshare Business [merged]

[kjd]

There seems to be an assumption here about the rental market that may not be true. The assumption is that rental prices will always be lower than yearly maintenance fees. History tells us that will not be the case, even between different resorts at the same time. The rental market has a different set of conditions than the resale market. Just as the housing market has when it comes to renting vs buying.

Right now I'd agree it may make more sense to rent provided you're dealing with a legitmate owner and all of the risk-taking rentals involve. In the future the market for vacation resorts could become quite constrained, (particularly if more builders walk away) as well as inflationary pressures increase. Rental timeshares will always rent at a discount to comparable hotel space. Maintenance fees have nothing to do with it. The hotels and TS resorts would be faced with the same inflationary pressures causing a spike in their nightly rates and maintenance fees.

There was a time when the rental housing market was so constrained in certain areas of the country that rent controls had to be put on. There was a shortage of supply. If more companies like Marriott "walk away" one of two things could happen to the market. Older timeshare stock will not be replaced or properly maintained. Timesharing will become less appealing to the public thereby driving rental prices and property values down. Or, premium resorts like Marriott, if they are well maintained, will become more expense to rent or purchase. Maybe both could happen at the same time. Who knows?

 

[wof45]

There seems to be an assumption here about the rental market that may not be true. The assumption is that rental prices will always be lower than yearly maintenance fees.

the other variable is time of year.
if you look at the DC points schedules for choosing times, they reflect the demand for that time period at that place.

Historically, and even now, platinum rents are twice the MF. during gold time the rents typically exceed the MF and during silver time the rents are usually less than the MF.

Which just means that platinum is a much better deal as long as you don't pay retail for the TS week.

 

[camachinist]

Also, can someone enlighten me on the importance of TS rental rates - didn't we buy our timeshares for vacations?

Sure, the rental income provided me a cushion while I cared for my terminally ill mother and could not otherwise vacation. Hope that makes sense.

 

[MOXJO7282]

I'm including every area if you do your homework & make enough offers. Not every one will be under annual fees but has always been less than annual fees and a reasonable amount allotted for capitalized purchase cost (spread cost over 15 years) and rental rates are steadily declining everywhere as annual costs are nearly universally on the rise. One to five years and every resort is likely to be renting for less than fees especially if the "name fee" rises significantly due to recent changes. My bet is the fees will rise and rents will continue to fall.

With no disrespect intended I don't see how you have the experience with Marriott to make these statements. What Marriotts have you ever owned?

Have you owned at the Oceanwatch, Maui, Aruba, Grand Ocean Hilton Head, Newport Coast, or at any of the prime ski weeks resorts?


Those prime units still rent at a high premium well over MF. Yes costs are going up and rents have come down from really large profits (I "know" someone who rented an Aruba Surf OV for one year at $4700) to now about $3000-$3200. So even in worst case scenerio Aruba Surf MFs go to $1800 and rents come down to $2500, I'm still happy.

Just because you pound the pavement and can get lucky that doesn't mean that is the norm. Most don't have the savvy you would have. I have so much activity on all of my resorts and that is not about to change.


I still maintain its too early to tell the long term effects of this spin-off and even if it have a negative effect it won't be as extreme as the naysayers contend, especially at the locations I own

 

[timeos2]

With no disrespect intended I don't see how you have the experience with Marriott to make these statements. What Marriotts have you ever owned?

As it turns out never owned any - came very close twice to purchase - and now most likely never will.

Renting and trading for Marriotts has made getting any we've desired to visit very easy to obtain. Unlike most ownerships we don't have to worry about going back to the one or two we would own - we get our choice of ALL basically on demand. Between trade in with a much lower fee based / lower purchase cost resort or straight rental we have obtained only prime time units and in every case (over a dozen since 2007) at or below the annual fee for that unit - not even taking in the amortized purchase cost on top of that. It is why we ended up not buying - why pay more to get less choice?

Not every renter is going to know where to look or how to offer to get deals at or below annual fees bt more and more are and the trend is not good for owners. Fees are on an upswing while rental rates are in a virtual free fall as inventory - even prime times - are burying the market. It is as bad as it has ever been and little hope of improvement any time soon.

I love Marriott resorts and see why owners are protective of them. But as an outsider looking in (and renting /trading for the best there are at what is usually a low price) it is clear they are not worth what the owners want to believe they are. Try selling and you'll see for yourself.

Use and or rent what you own & enjoy for what it is - a quality resort for vacation and as long as you get what you consider good value things are good. I can see that happening now for current owners and I like it. Use & enjoy what you like. Thinking you have a valuabe asset to sell or one that will always be an easy rent for more than fees isn't reality but if it helps you feel better then believe it. It won't hurt until you go to collect and find a slightly different reality actually rules.

My resorts are THE BEST and hold value like no other TO ME. Unfortunately if I tried to sell them with numbers to reflect how I feel about them I'm going to be disappointed. The market is what it is and my likes or beliefs aren't going to matter when someone else has to write the purchase or rent check. Suddenly I'm competing with thousands of other timeshares over a rare thing - a buyer/renter - and they KNOW it's a buyers market like no other has ever been. They drive hard bargains now and rightfully so. Thats reality today.

 

[MOXJO7282]

As it turns out never owned any - came very close twice to purchase - and now most likely never will.

Renting and trading for Marriotts has made getting any we've desired to visit very easy to obtain. Unlike most ownerships we don't have to worry about going back to the one or two we would own - we get our choice of ALL basically on demand. Between trade in with a much lower fee based / lower purchase cost resort or straight rental we have obtained only prime time units and in every case (over a dozen since 2007) at or below the annual fee for that unit - not even taking in the amortized purchase cost on top of that. It is why we ended up not buying - why pay more to get less choice?

Not every renter is going to know where to look or how to offer to get deals at or below annual fees bt more and more are and the trend is not good for owners. Fees are on an upswing while rental rates are in a virtual free fall as inventory - even prime times - are burying the market. It is as bad as it has ever been and little hope of improvement any time soon.

I love Marriott resorts and see why owners are protective of them. But as an outsider looking in (and renting /trading for the best there are at what is usually a low price) it is clear they are not worth what the owners want to believe they are. Try selling and you'll see for yourself.

Use and or rent what you own & enjoy for what it is - a quality resort for vacation and as long as you get what you consider good value things are good. I can see that happening now for current owners and I like it. Use & enjoy what you like. Thinking you have a valuabe asset to sell or one that will always be an easy rent for more than fees isn't reality but if it helps you feel better then believe it. It won't hurt until you go to collect and find a slightly different reality actually rules.

My resorts are THE BEST and hold value like no other TO ME. Unfortunately if I tried to sell them with numbers to reflect how I feel about them I'm going to be disappointed. The market is what it is and my likes or beliefs aren't going to matter when someone else has to write the purchase or rent check. Suddenly I'm competing with thousands of other timeshares over a rare thing - a buyer/renter - and they KNOW it's a buyers market like no other has ever been. They drive hard bargains now and rightfully so. Thats reality today.

Again I respectfully disagree with your comments, and again question how you think you're a Marriott expert.

For example, this comment "Fees are on an upswing while rental rates are in a virtual free fall as inventory - even prime times - are burying the market. It is as bad as it has ever been and little hope of improvement any time soon." in simply not true. Rental prices for any prime week at the prime locations are not in a free fall. That I can tell you from my personal experience over the last 10 years of Marriott ownership.

Have they come down over the years? of course they have. However 2011 was a very good year, better than 2009 and 2010 and the demand was very high.

As for resale prices again they are coming down, but many weeks still have very good value. I know I have afew that are still have maintained good value.

My Grand Ocean gold OF was purchased for $13.8K in 2004. I'm pretty sure I'd get that or a tad more. Also my Oceanwatch OS July 4th would sell for around $20k. Still good value in my book.

So things are not as dire as you predict from my and any Marriott prime week owner

 

[saturn28]

Again I respectfully disagree with your comments, and again question how you think you're a Marriott expert.

For example, this comment "Fees are on an upswing while rental rates are in a virtual free fall as inventory - even prime times - are burying the market. It is as bad as it has ever been and little hope of improvement any time soon." in simply not true. Rental prices for any prime week at the prime locations are not in a free fall. That I can tell you from my personal experience over the last 10 years of Marriott ownership.

Have they come down over the years? of course they have. However 2011 was a very good year, better than 2009 and 2010 and the demand was very high.

As for resale prices again they are coming down, but many weeks still have very good value. I know I have afew that are still have maintained good value.

My Grand Ocean gold OF was purchased for $13.8K in 2004. I'm pretty sure I'd get that or a tad more. Also my Oceanwatch OS July 4th would sell for around $20k. Still good value in my book.

So things are not as dire as you predict from my and any Marriott prime week owner

I just paid in November $1500 for a Marriott Surfwatch Gold Oceanfront week on Ebay. So, don't think you are going to get $13,800 or more for a Marriott Grand Ocean Gold week.

 

[timeos2]

I just paid in November $1500 for a Marriott Surfwatch Gold Oceanfront week on Ebay. So, don't think you are going to get $13,800 or more for a Marriott Grand Ocean Gold week.

THAT is exactly what I mean. Sitting back and stating "My Grand Ocean gold OF was purchased for $13.8K in 2004. I'm pretty sure I'd get that or a tad more. Also my Oceanwatch OS July 4th would sell for around $20k. Still good value in my book." is easy - when they actually try to SELL at those levels they find out the cold slap of reality (MUCH lower price if they really want to sell).

You don't have to own to know what the market is doing. And in many ways not owning allows a much clearer view of things as I have no money in play to protect.

People can convince themselves what they own has high value X ad until they actually try to get it and can't no amount of proof that the real number is a much lower value will get through to them. It hurts to realize that and its easy to believe it isn't so. Human nature at work.

 

[MOXJO7282]

I just paid in November $1500 for a Marriott Surfwatch Gold Oceanfront week on Ebay. So, don't think you are going to get $13,800 or more for a Marriott Grand Ocean Gold week.

Boy how did I miss that one! I find that hard to believe, sure it wasn't silver season? Even so that is a total aberration, and that is what the naysayers hang their hat on. If it was a gold season OF you could easily flip that for $5k or more, heck I'll offer that to you right now.

Anyone else take a SW gold season OF for $5k?



I don't know the Surfwatch market so maybe its not that desirable as GO but just the other day and often on ebay I see GO gold oceanside sell for approx $5k so perhaps GO is way more valuable that Surf Watch.

As for Oceanwatch, you obviously don't know the market like true owners do.

What do the naysayers think an Oceanwatch Pat + would retreive resale?

That is one of the highest demand propoerties out there. A straight plat with OS or OF view would definitely garner $13-$15k resale. If you don't think so you're misinformed.

 

[MOXJO7282]

I'll also add comments about Newport Coast. Resale prices through the DC and currently NCV plats are selling for $8-9K. Many many sell at that price point.

So how to explain that performance? Now you'll say that won't last, but you said the same dire stuff after the DC, and resales prices have stayed firm and rental prices have acutally risen slightly, at least for me.

 

[MOXJO7282]

Here a list of recent ebay sales (sales not just listings) I've been watching. This doesn't reveal what the naysayers are espousing.

Now these are just from the last few weeks/months. I'd love to see the flood of ebay resales like the $1500 SW gold OF that should be out there if things are as bad as suggested.

Please take of all the NCV, and the Aruba Surf that sold and the Barony Beach OS, and the GO gold OS that sold for $5k




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[BarbS]

A silver Grande Ocean oceanfront week went for about $1100 several weeks ago. A gold Aruba Surf Club oceanfront week went for about $13,000 a couple of months ago. I've been keeping my eye on mostly OF weeks, which seem to be pretty rare.

I don't recall seeing that gold OF Surfwatch week. Besides......I didn't think they had any with OF views.

 

[kjd]

At Surfwatch I think Building 56 is considered oceanview. I'm not sure of the number but I know it's closest to the beach bridge.

 

[SueDonJ]

Yes, it's 5600, named Ocean Dunes. The view type is classified "oceanvista."

 

[Tikub]

Positive development

We thank you for being a loyal Marriott customer and we promise to continue to work hard to deliver the “Unforgettable Experiences” that you have come to expect from us. We will continue to provide you with updates of this transaction as the year progresses. Thank you for your continued support.
Best regards,
Steve Weisz
President[/LEFT]
Marriott Vacation Club International
[/COLOR][/SIZE][/FONT][/COLOR][/SIZE][/FONT][/COLOR][/SIZE][/FONT]

Marriott so far has delivered such unforgettable experiences as declining ownership values, rising fees, exchanging deeds for points, and Spinco.
Since Marriott has been selling deeds until recently, should Spinco not be spun to the deed owners or to the Points Trust?
Is Spinco the first publically traded Pure Timeshare Management Company?
If one is interested in purchasing a Marriott timeshare isn’t it better to buy 40000 shares of Spinco and use the dividends to rent the unit of one’s choice?
Every new purchaser of a Marriott points should demand 10,000 shares of Spinco as a hedge against mismanagement or gouging.
Everyone converting from deed to points should demand 10,000 shares of Spinco as a hedge.
Timeshare owners have a great opportunity to purchase and own the company which manages their timeshare. As stock owners they can ensure that their “Unforgettable Experiences” are positive.
IMHO

 

[BocaBoy]

People can convince themselves what they own has high value X ad until they actually try to get it and can't no amount of proof that the real number is a much lower value will get through to them. It hurts to realize that and its easy to believe it isn't so. Human nature at work.

You seem to take certain examples of sales and conclude that you have the whole picture. I have sold two Marriott units (Hawaii and Orlando) both of which I purchased at developer prices and both were sold for a profit. Orlando I owned for 20 years but Hawaii I bought in 2007 and sold three years later. What do I conclude from that? Not that you can expect to sell your timeshares at a profit, but rather that generalizations are dangerous, often inaccurate and must be taken with a grain of salt. I am glad things are so black and white (even though often wrong) for you.

 

[wof45]

Marriott so far has delivered such unforgettable experiences as declining ownership values, rising fees, exchanging deeds for points, and Spinco.

I don't understand the point of this post --

how do you exchange a deed for points?

 

[dioxide45]

do you actually believe that the units are worth 1 million each?
or is that the assessed value for the property taxes you are paying?

Individually on the real estate market, likely not. However, remember that common areas at the resort are shared among all owners. If MGV was to dissolve tomorrow, how is that $900MM divided?

Also, assessed value usually comes in lower than appraised value.

 

[equitax]

The Real Value of YOUR timeshare

Good evening all,

I'm going to be a little preachy here, not everyone will agree but I think you will see my point.

YOUR timeshare's value is directly proportional to the non-monetary enjoyment you get out of it.

If you just spent two weeks at the OC in Aruba, and got sweet talked into buying a week (or even two) direct from the developer, YOUR time share would have been worth the 30K (or now 55K) that you signed on the dotted line for, otherwise you would not have done it right?

I consider myself to be rather knowledgeable and savvy when it comes to finance and investments - Houses, commercial buildings, industrials buildings, other businesses, cars, boats, etc. Owned them, sold them rented them - Most of the time for a profit. I was the scavenger buyer, waiting for the right time, or a desperate seller. Would never overpay for a building, I would just find another one, that sort of thing. Why then did I find myself sitting in my 2BDR OC unit rented direct from Marriott.com for 299/night "doing the math" and actually thinking that 27000 for a gold week, or 68000 for two fixed platinum plus weeks was a good deal? The answer is simple - Was looking at numbers, but not the finance, and its all a matter of perspective. At the time, I was thinking about the great time I had in Aruba, the awesome accommodating, the friendly staff... I could have "owned" that setting for life - for me and my family - just by signing on the dotted line. Besides, the first trip would have been "free", My next trip would be booked before I left, easy as pie for one low maintenance fee. And to top it all off, I would have gotten something like 4 billion MR points - between the one MVCI through in, the ones from slapping 62K on the credit card...

And also, why (at the time) would you think about the day you want to get rid of it? who wants to say bye bye to Aruba for good? no more vacationing with the family?

At the time, and based on my perspective, it would have been the best deal in the world.

So you can't compare apples to oranges.

The people that sell their timeshare on ebay, or those that give it away here have a completely different perspective that the people that buy direct from the developer, and there's a reason why the two don't always meet.

And contrary to popular belief, not everyone that buys from the developer is an idiot, because without those initial buyers, there just wont be anyone to pay for new resorts.

Situations change, finances change, the markets meltdown, whatever.

Look at it from Marriott's side for a minute - with the mortgages defaulting, the foreclosures, and the like the picture for THEM is not great either - when MVCI repos the timeshares because the mortgagor defaults, they end up with more inventory, the HOA ends up having to charge more MF to the "good" owners which in turn makes it harder to sell the next one.

The TS business can be turned around over time, and I suspect this will happen because there is a lot of capital at stake.

When Marriott Resorts Ownership Inc.s portfolio of bad mortgages on legacy properties is under control, they (or Spinco) will offer legacy owners an "in" to the points program. they will make it sufficiently worth our while to give up our floaters for DP and many of us will. We will then be on the hook for higher ROFR fees if we want out, which will drive the floor price of an interest in a Marriott resort up. The holdings in the land trust will balloon, and MF will begin to normalise (they will still go up, that's just the way life is.)

The fact that MVCI does not make a dime when a resale unit changes hands is bad for owners at MVCI resorts whether or not we like to admit it. MVCI is in the process of changing this with the new points program and the USD 1.00 per point that they are allowed to charge for waiving ROFR. How many will be willing to give away your 3000 pts and have it cost YOU $3000? How many of you will take a "free" 3000 points but pay $3000 for them?

The future (and I am not talking next week but within next 2-3 years) you will see Marriott or Spinco to start exercising ROFR and to add value back to its product.

I look at the Official records to see how many DP they have been cranking out, and there are many. A percentage of those buyers will want out, and when they do MVCI will get a piece of the action before anyone else...


So the short answer is if you want out because you;'re fed up, its worth what you can get for it. If you're really fed up, what's it worth to YOU for someone to take it off your hands?

 

[equitax]

Division if dissolved

Amongst legacy owners, with certain restrictions, - as tenants in common, but here is the kicker - Anyone that has converted to points i.e given back their week, the trust owns that interest. POINT owners have no "remainder over in fee simple absolute" value of a resort as the trust would have to terminate, the likelihood of which approaches zero.

Individually on the real estate market, likely not. However, remember that common areas at the resort are shared among all owners. If MGV was to dissolve tomorrow, how is that $900MM divided?

 

[dioxide45]

Amongst legacy owners, with certain restrictions, - as tenants in common, but here is the kicker - Anyone that has converted to points i.e given back their week, the trust owns that interest. POINT owners have no "remainder over in fee simple absolute" value of a resort as the trust would have to terminate, the likelihood of which approaches zero.

Legacy owners who convert to points are not giving their ownership to the trust. They are only assigning over the usage of that week for the given year. Owners of the resort which includes the trust at many resorts would get a piece of the pie if it were dissolved and assets sold off. It doesn't matter if they converted or are enrolled in DC or not.

 

[equitax]

Not so sure...

In the official records, there are many individuals who deed their unity and week back to MROI, who in turn deposit those weeks into the trust...

Legacy owners who convert to points are not giving their ownership to the trust. They are only assigning over the usage of that week for the given year. Owners of the resort which includes the trust at many resorts would get a piece of the pie if it were dissolved and assets sold off. It doesn't matter if they converted or are enrolled in DC or not.

 

[dioxide45]

In the official records, there are many individuals who deed their unity and week back to MROI, who in turn deposit those weeks into the trust...

Correct, but those are reacquired weeks, they don't have anything to do with people converting to DC points or enrolling in DC.

 

[OldPantry]

YOUR timeshare's value is directly proportional to the non-monetary enjoyment you get out of it.

If you just spent two weeks at the OC in Aruba, and got sweet talked into buying a week (or even two) direct from the developer, YOUR time share would have been worth the 30K (or now 55K) that you signed on the dotted line for, otherwise you would not have done it right?
At the time, and based on my perspective, it would have been the best deal in the world.
So you can't compare apples to oranges.

they (or Spinco) will offer legacy owners an "in" to the points program. they will make it sufficiently worth our while to give up our floaters for DP and many of us will. We will then be on the hook for higher ROFR fees if we want out, which will drive the floor price of an interest in a Marriott resort up.

The fact that MVCI does not make a dime when a resale unit changes hands is bad for owners at MVCI resorts whether or not we like to admit it.

Wow, so much to respond to!
If you've sunk $30,000 (or $55,000) into a developer week and you're still pleased as punch, well great. That's because you're practicing the power of positive thinking. At the time, and apparently now too, the week had subjective (non-monetary) value to you. That's in your own brain. Extending that approach a bit, if you concentrate hard enough, your week will be worth millions!
There is an objective measure, though. That is what a buyer would pay. So, it isn't apples and oranges, it's just what those apples (or oranges) are worth, NOW. That a function of supply and demand, and, ultimately, what a rental could bring in excess of maintenance fees.
As to being permitted into the DP program, you seem to share the misconception that your points will be salable, and therefore subject to ROFR fees. That's incorrect. Legacy owners exchange their weeks for points on a yearly basis (if they wish to). Only "new" points you buy from Marriott would be subject to ROFR penalties (yes penalties).
And why is it "bad" that Marriott makes only a small profit on timeshare resales? They sold the damn things once (at an enormous profit, by the way); why a double dip? The same logic should apply to points: aren't they making a huge profit by selling them now? Why burden a points owner who wishes (needs) to get out with ROFR penalties that might make a resale impossible? If I want to sell my Jetta, I don't expect to hand Volkswagen another $3000 when I sell it to my neighbor!

 

[josh1231]

The fact that MVCI does not make a dime when a resale unit changes hands is bad for owners at MVCI resorts whether or not we like to admit it. MVCI is in the process of changing this with the new points program and the USD 1.00 per point that they are allowed to charge for waiving ROFR. How many will be willing to give away your 3000 pts and have it cost YOU $3000? How many of you will take a "free" 3000 points but pay $3000 for them?

If Marriott priced their weeks for their actual value, instead of charging many times their worth while making maintenance fees shockingly high, they wouldn't have this problem because resale weeks would be selling for similar to developer weeks, and they would be able to unload their own weeks at a quicker pace. The entire model is broke, and they know it, thus the spin-off. How long will they be able to continually sell a $750K condo for $2M in Aruba, then charge 50K a year in association dues for a 2bd unit.

Granted their are a few more services than your average condo, but not 45k a unit more.

I've never sold or owned a condo, but does the condo association charge you money when you sell one? I don't believe my homeonwners association does. This is why I don't understand how one can justify this.