Marriott Vacations Worldwide 3Q Sales Decline; Stock Tanks

[Hindsite]

It will be interesting to see if the way Hyatt RC inventory in II is breaking the mould is some form of pilot. The 2 Key West properties have extensive Getaway availability from end of April to end of Dec 2026, with only the 4th July and Xmas weeks actually being priced in excess of 2026 maint fees. Exchange inventory seems to be all over the place depending on what the deposit is, but it doesn't seem to match the getaway dates.
Historically HRC didn't appear in II more than 5-6 months ahead, so its quite a big change.

 

[jwalk03]

Its also important to remember that when and where you are staying will have a huge influence on the ages of the people attending the presentations. If you are in Palm Desert or South Florida or Hawaii in Jan/Feb for example the vast majority of the guests at the resort are going to be older retirees and then the people you see attending the presentations are going to be older retirees vs say Orlando during school breaks when there will be a ton more families and thus you are a lot more likely to see younger people attending the presentations as well.

They do provide a very high level data point on this in the quarterly presentation- 65% of new owners are Millennials or Gen X. Boomers are only 30% of new owners. Now it would be interesting to see what the breakdown is of ALL SALES- instead of just new owners. I assume that would skew much older since they are far more successful at selling more to existing owners than adding new ones- but they do not provide us this data.

 

[DanCali]

My take: MVC Executives and Board members have no understanding of where and why MVW is failing.

They are failing because the product they are selling is no longer affordable - it's that simple.

7000-8000 points for a 2BR OV in Hawaii is about $6000 just in current annual MF cost. Most people would wince at $900/night regardless of what the rack rate is. And you also have to pay ~$120K+ upfront for the privilege to own those vacation points. And then they wonder why people prefer to rent...

Whoever thought that greenlighting a 30%-35% MF increase over 2 years under the guise of "inflation" made a horrible choice. Yes, there was inflation. No, most people didn't have their salaries increase by 35%, or even 10% for that matter. And clearly, they can control MF costs when they want to...

 

[Eric B]

Just what I thought. Another one added to the list.

has been on my ignore list for months now

There are lists and then there are lists. There are a few names that I recognize on my list that I might unignore to see what they had to say and then there are those I'll never unignore because they evidently aren't trying to add value and provoke annoyed responses.

 

[vail]

A lot of the newer properties are hotel rooms.
To purchase points to stay in a hotel room is evidently not selling.
They tried something new and it did not work.
The older model may no longer work as well because of the costs involved?

 

[travelhacker]

I think a pretty consistent them has been that the product is too expensive to start out with, and I agree with that take completely. I don't know exact costs, but I believe the minimum is 1500 points and at $19 a point that's almost $30K. To add salt to wounds, it's hard to get much value out of that $30,000 purchase and $1200 + club dues or so in maintenance fees.

If I were in charge I would consider the following:

1) Allow owners to rent points directly from Marriott for reservations. I don't know what the limitations would be (perhaps 10% of your annual allotment) up to what's available. This does a couple of things:
- Allows Marriott to get some revenue from some of their carrying costs...but I bet they could charge $1.10 - $1.20 per rented point and a good chunk of users would do it when they are 100 points short of a reservation.
- Allows people with smaller contracts to do a bit more.

2) I'd consider allowing resale owners to enroll their weeks for a significant charge, but far less than what they require for their enrollment specials. Being able to enroll my Vistana weeks for 10K for the first and 5K for additional seemed like a price that made sense for me. They could have charged me an enrollment fee of $1500-$2000 per week and I'd probably still pay it. Heck, I'd consider 500 points at full retail if it let me enroll a week.

3) I'd come up with some type of intro product as others have mentioned -- maybe a 5 to 10 year term. Let's say the smallest package would be to charge $5000 upfront for the option use 2000 annual points for 5 years (first year of fees included) and for those 5 years you charged $1.20 per point used (in 2026 maintenance fee dollars). There are plenty of places where someone could be reasonably pleased with their options. You wouldn't have any objections from people not wanting to use it, and you could run a promo that reduced the cost by a few thousand dollars to convert to a promo product.

I think there are plenty of options to book where someone could get value out of $1.20 per point (sadly not really any in Hawaii). You could throw in Interval for free and people would get access to getaways and be exposed to that whole ecosystem.

My good friend's sister purchased 1500 Marriott points retail because they went to a high pressure pitch and caved. Sadly they blew about 30K, and they get angry just thinking about it. It's a very, very sore spot for them.

I realize if you had a cheap option as a last resort to offer to customers, you may give up some of those $30,000 sales that you get people to cave on, but I do think giving a sample of the system would get more people in the door and using the product that would have a higher likelihood to convert.

 

[jp10558]

A lot of the newer properties are hotel rooms.
To purchase points to stay in a hotel room is evidently not selling.
They tried something new and it did not work.
The older model may no longer work as well because of the costs involved?

Yea, I can't see the interest in hotel rooms or even 1BR. I can usually book a TS Lite Homewood Suites or equivalent for way less than the points values (at least in HGVC, forget about MVC that I don't know for sure) and basically get the same thing. Certainly without buying any deed or commitment.

 

[jp10558]

I realize if you had a cheap option as a last resort to offer to customers, you may give up some of those $30,000 sales that you get people to cave on, but I do think giving a sample of the system would get more people in the door and using the product that would have a higher likelihood to convert.

I think this is 100% true - pretty much every system and ARDA's reports show that they have better (I think by as much as 2/3 to 1/3) sales to existing owners. You have to actually use the systems, and experience the value (such as Abound has) to really appreciate it I think.

 

[Dean]

I realize if you had a cheap option as a last resort to offer to customers, you may give up some of those $30,000 sales that you get people to cave on, but I do think giving a sample of the system would get more people in the door and using the product that would have a higher likelihood to convert.

It's often far more than $30K, I suspect the average sale is closer to $60K or more, esp to new buyers. Remember that marketing and commissions are a large % of the total which is more challenging with a lower cost option as you need more volume to break even beyond just the amount to get to the same total since admin/sales costs would be a higher %. Clearly MVC believes they'll do better long term by going after the larger sales in lower numbers. They've dramatically reduced the number of sales to current buyers from what I'm hearing because they've made retro enrollment so unworkable.

IMO timeshare have always been overpriced retail and it's just gotten worse. Still even the timeshares that have zero resale value once purchase continue to sell. Most timeshare buyers are not buying out of research and knowledge but out of emotion and sales pressure spur of the moment.

 

[JIMinNC]

Yea, I can't see the interest in hotel rooms or even 1BR. I can usually book a TS Lite Homewood Suites or equivalent for way less than the points values (at least in HGVC, forget about MVC that I don't know for sure) and basically get the same thing. Certainly without buying any deed or commitment.

We have been MVC owners since 2014 and HGVC owners since 2018. Other than our two owned MVC Hawaii weeks, which are both 2BR, I would say 90% of our points bookings in both MVC and HGVC have been 1BR. Most 1BR still have a kitchen for breakfast and many/most have a washer/dryer, so they beat hotel rooms. Not many Homewood Suites type of accommodations on the beach or with resort amenities.

Honestly, even in our two owned Hawaii 2BR properties, and for some points bookings at MVC properties that only have 2BR, the second bedroom often goes unused.

The hotel room comparisons are more valid for the urban City Collection type properties that MVC has, since those are usually similar to a hotel room. But there, I would never buy into MVC just for those locations, but having them in the mix has been beneficial from time to time. I consider them complementary elements of the MVC program.

 

[1Kflyerguy]

I have owned and followed HGV for many more years than MVC. I find it interesting that, for a long time before HGV purchased Diamond, a number of analysts had been asking HGV management about adding a trust option, so they would have an offering at a lower price than selling people a full deeded week. The theory was that additional sales would be easier because you can sell people smaller blocks of points, and people add to their accounts over time. The analyst continually pointed to competitors like MVC, with their trust products, as the superior approach.

It appears that MVC eventually lost its advantage over time due to its pricing strategy.

 

[goodbadugly]

The number ONE challenge MVC has is providing/adding value to the point system. Why would anyone buy points retail when they can get them for less on the open market? There is absolutely no advantage (or penalty) by doing so. In addition, using points for cruises, tours, and etc. is a ridiculous concept when you are charged over 35% over retail prices. Even worse using points for hotel rooms! They obviously do not talk to MVC owners on what needs to be done. Maybe the stockholders who are worse "investors" than we are will finally wake up! Fortunately for them it is easy to get out. No so much for us owners!

 

[jp10558]

We have been MVC owners since 2014 and HGVC owners since 2018. Other than our two owned MVC Hawaii weeks, which are both 2BR, I would say 90% of our points bookings in both MVC and HGVC have been 1BR. Most 1BR still have a kitchen for breakfast and many/most have a washer/dryer, so they beat hotel rooms. Not many Homewood Suites type of accommodations on the beach or with resort amenities.

Honestly, even in our two owned Hawaii 2BR properties, and for some points bookings at MVC properties that only have 2BR, the second bedroom often goes unused.

The hotel room comparisons are more valid for the urban City Collection type properties that MVC has, since those are usually similar to a hotel room. But there, I would never buy into MVC just for those locations, but having them in the mix has been beneficial from time to time. I consider them complementary elements of the MVC program.

I'm talking about the city options that some on TUG have talked up about the new TS growth area. But even "on the beach" - Ocean Oak, Ocean Enclave and McAlpin all didn't have much of anything I'd call "resort amenities" beyond a hot tub. I've noticed some hotels now also having a guest laundry facility - yes it's not "in room", but TBH if I'm in a city I probably can find a laundromat if I really have to do laundry in my stay. The kicker for me though is just cost. Maybe MVC it's equal, but in HGVC it's so many points for a 1BR in NY or DC that I don't see it as a savings over a hotel room, especially if I can use points and FNC to defray costs.

 

[JIMinNC]

I'm talking about the city options that some on TUG have talked up about the new TS growth area. But even "on the beach" - Ocean Oak, Ocean Enclave and McAlpin all didn't have much of anything I'd call "resort amenities" beyond a hot tub. I've noticed some hotels now also having a guest laundry facility - yes it's not "in room", but TBH if I'm in a city I probably can find a laundromat if I really have to do laundry in my stay. The kicker for me though is just cost. Maybe MVC it's equal, but in HGVC it's so many points for a 1BR in NY or DC that I don't see it as a savings over a hotel room, especially if I can use points and FNC to defray costs.

I can't speak to Ocean Enclave or McAlpin in the HGVC network, but I am familiar with HGVC Ocean Oak in Hilton Head, and the pools/grounds/amenities there are certainly more than you would ever see at a typical Homewood Suites. Homewood Suites generally have a pool, but it's usually a small pool with limited seating. Also Homewood Suites and the similar properties that are under the Marriott International umbrella are usually near airports, office centers, and interstate highways, not on beaches. Ocean Oak definitely has a resort feel when compared to a mid-tier suburban/urban suite hotel like Homewood Suites.

As I said, I do agree that the city options don't seem to offer a compelling reason to make buying MVC or HGV points attractive primarily for that purpose. In a city, the resort amenities aren't what most people are looking for, so I also agree that in most cases for a city stay, a hotel works just fine either using cash or hotel points. The kitchens also aren't that beneficial as shopping for groceries in an urban city can be a pain for those of us used to driving to suburban grocery stores.

But for those of us who have access to MVC or HGVC points we bought primarily for resort stays, having the city locations we can book with timeshare points does give us another payment currency to evaluate alongside cash and hotel points. For example, if I had some extra MVC Abound points one year, and I was planning a few nights stay in New York midtown, then I would evaluate using those Abound points for the MVC City Collection location on 37th Street, along with the cash and hotel points options. I like having options, but I would really if ever use timeshare points for a city stay if I had resort options I was able to utilize.

 

[TolmiePeak]

The number ONE challenge MVC has is providing/adding value to the point system. Why would anyone buy points retail when they can get them for less on the open market? There is absolutely no advantage (or penalty) by doing so. In addition, using points for cruises, tours, and etc. is a ridiculous concept when you are charged over 35% over retail prices. Even worse using points for hotel rooms! They obviously do not talk to MVC owners on what needs to be done. Maybe the stockholders who are worse "investors" than we are will finally wake up! Fortunately for them it is easy to get out. No so much for us owners!

I wouldn't take the points if they gave them to me for free. I just rent points from other owners when I need them.

 

[ljmiii]

Yea, I can't see the interest in hotel rooms or even 1BR. I can usually book a TS Lite Homewood Suites or equivalent for way less than the points values (at least in HGVC, forget about MVC that I don't know for sure) and basically get the same thing. Certainly without buying any deed or commitment.

To say the least a 1BR at Homewood Suites is in no way the equivalent of a 1BR Penthouse at the Quin in NYC (or at GW in Hilton Hawaiian Village or using Abound Points a 1BR at the Ritz Carlton Club in SF).

Over in the HGVC forum someone wondered why someone else (not me) would pay $8000 a year in MFs to spend a week in a Penthouse at the Quin. And the answer is simple...comparable hotel suites are somewhere between more expensive and WAY more expensive.

For the dates that they had booked at the Quin...

Le Meridian - Jr suite was $11.5K and 1BR suite was $13K.
Luxury Collection Hotel (previously the Conrad Midtown) - 1BRs are $9.5K- 31.5K
Essex House - Rooms w/1K bed are $9-$12K and 2BRs are $80-90K (no 1BRs available)
Ritz-Carlton - 1BRs are $22-$105K

And their Penthouse at the Quin has views of both Central Park and the Thanksgiving parade. Only the Essex House (and arguably the RC) have comparable views.

 

[goodbadugly]

I wouldn't take the points if they gave them to me for free. I just rent points from other owners when I need them.

Absolutely...that's why the system is broken!!

 

[m61376]

A bit off topic, but maybe not- when they introduced the point system, they allotted more points to drive to destinations like HH, even though they rented for far less on Marriott.com than high demand places like Aruba. What I've wondered about is if their actuaries feel that drive to destinations are a higher demand product, why they haven't really tapped the drive to market for the Northeast. There's a huge market area and might appeal to the lower priced buyer.

 

[VacationForever]

I won't stay at Homewood Suites or Residence Inn if I have a choice of a 1BR MVC timeshare at the location and that I can afford to pay MF each year. It is just not the same, whether it is the feel and finish of the unit, or the quality of the bedding and bathroom.

 

[CalGalTraveler]

Depends on the location, I've stayed in some old and outdated Residence Inn's.

 

[JIMinNC]

What I've wondered about is if their actuaries feel that drive to destinations are a higher demand product, why they haven't really tapped the drive to market for the Northeast. There's a huge market area and might appeal to the lower priced buyer.

Probably has to do with the very short resort seasons for most places that are easy drive to locations for the NE. The city locations in NYC and Boston are not as weather dependent, but the Northeast vacation season is short, leaving lots of low value low season weeks. Yes, with all new inventory going into the Trust they would no longer have to worry about selling those low value weeks, but with such low demand in winter, the total salable points allocated to that resort would have to be less than at locations with longer vacation seasons. The cost to build would be as high or higher than warmer locations which could generate longer seasons and hence more salable points to add to the Trust.

 

[jwalk03]

Probably has to do with the very short resort seasons for most places that are easy drive to locations for the NE. The city locations in NYC and Boston are not as weather dependent, but the Northeast vacation season is short, leaving lots of low value low season weeks. Yes, with all new inventory going into the Trust they would no longer have to worry about selling those low value weeks, but with such low demand in winter, the total salable points allocated to that resort would have to be less than at locations with longer vacation seasons. The cost to build would be as high or higher than warmer locations which could generate longer seasons and hence more salable points to add to the Trust.

Exactly this. For timeshare locations to be successful they need to have vacation appeal for a majority of the year. Timeshares that lack appeal for multiple months of the year are rarely successful- the economics just don't work.