Marriott Vacations Worldwide 3Q Sales Decline; Stock Tanks

[RebelR]

I plan on asking them at my encore in December if I can enroll my week for $715 like Hilton allowed. I fully expect to get turned down but the difference in policy is quite staggering.

 

[dayooper]

Hmm, see this is where it depends on what you're looking for. None of those have 2BR Sat to Sat (or a week) except Vegas, and Vegas / Orlando are kinda the exceptions to booking rules as they're sooo overbuilt you can usually book something from anyone. I've had to book right out for McAlpin Plaza 2BR and only seen it in December, Ocean Oak for Feb... I think I jumped on MarBrisa also at or around 9 months. Usually when I look at say 6 months at multiple locations, all weeks are scarce, you can find 2-4 days here and there but not a full week.

The only place I have had issues booking is Hilton Head. We always book at 9 months. Now, I’ve tried to book a ski weekend or a SW Florida affiliate. I have booked Elara at 6-7 months, though.

 

[TUGBrian]

lots of pages (and fun stuff to discuss tonight on the live show)....but as someone pointed out earlier marriott is an outlier here with other systems meeting or exceeding expectations on their statements.

what is MVC doing differently than hilton to see such a sales decline? or perhaps its just a single quarter aberration and they pick right back up where they left off to end the year.

 

[JIMinNC]

lots of pages (and fun stuff to discuss tonight on the live show)....but as someone pointed out earlier marriott is an outlier here with other systems meeting or exceeding expectations on their statements.

what is MVC doing differently than hilton to see such a sales decline? or perhaps its just a single quarter aberration and they pick right back up where they left off to end the year.

Given that MVW has now replaced their CEO and their #2 guy suddenly decided to retire the next day, it sure seems like whatever is going on is more than a single quarter aberration.

 

[davidvel]

lots of pages (and fun stuff to discuss tonight on the live show)....but as someone pointed out earlier marriott is an outlier here with other systems meeting or exceeding expectations on their statements.

what is MVC doing differently than hilton to see such a sales decline? or perhaps its just a single quarter aberration and they pick right back up where they left off to end the year.

They pivoted from a reasonably wholesome TS product that had been successful for years, because they only had trash inventory left that no one wanted to buy at their exorbitant rates (and excruciatingly high MF equal to platinum inventory), to a smoke and mirrors fake overlay points system.

The have been trying to sell the dream of a Hawaii vacation to people in a trust that is filled with low season trash (Myrtle Beach) weeks. Per the recent report, they have focused on owners who know the system and its limitations. The rise of the internet and social media has resulted in a flood of information to those that buy this garbage and rescind, or refuse to buy at all. They are running out of lemmings.

Also, they continue to hide the decline in sales with increased profits from management fees, which increased MF, and makes it harder to sell.

 

[TUGBrian]

They pivoted from a reasonably wholesome TS product that had been successful for years, because they only had trash inventory left that no one wanted to buy at their exorbitant rates (and excruciatingly high MF equal to platinum inventory), to a smoke and mirrors fake overlay points system.

you could likely paint hgvc with that same brush (and dri, and hyatt, and hicv, etc etc)....and they all appear to be doing just fine in comparison.

the industry continues to set new records in sales year in and year out, so for a single company who most people would consider to be at the top of the heap with a household moniker as strong as marriotts to fall off the gravy train is pretty shocking!

 

[davidvel]

you could likely paint hgvc with that same brush (and dri, and hyatt, and hicv, etc etc)....and they all appear to be doing just fine in comparison.

the industry continues to set new records in sales year in and year out, so for a single company who most people would consider to be at the top of the heap with a household moniker as strong as marriotts to fall off the gravy train is pretty shocking!

I know nothing in detail about those systems and whether they followed the same path. MVC's trajectory with this fake points overlay has been discussed since its introduction in 2010.

 

[jabberwocky]

you could likely paint hgvc with that same brush (and dri, and hyatt, and hicv, etc etc)....and they all appear to be doing just fine in comparison.

the industry continues to set new records in sales year in and year out, so for a single company who most people would consider to be at the top of the heap with a household moniker as strong as marriotts to fall off the gravy train is pretty shocking!

I think it's more about what MVC isn't doing that HGVC and others are. MVC decided to really forget about the "lower income" customers and decided to focus on the premium market. They really don't have an entry-level product anymore, unlike HGVC and others. Listen to the conference call and you'll hear the disdain the (now former) CEO has for the lower-income customers at the two Sheraton properties in Orlando.

The closest analogy I can think of is if United Airlines decided to rip out the economy seats in their planes and decided only to sell United First seats. Their revenue per seat sold may go up, but overall revenue undoubtedly would go down as potential customers go to American and Delta who would have the product at the right price-point.

The pain isn't over this quarter. It is likely to continue until they at least get new management in place to stabilize things. My guess is the new CEO (when they find a permanent one) will come in and the company will take a big bath (i.e., write downs) to set up a future where they look cleaner.

 

[chosshaul]

I think it's more about what MVC isn't doing that HGVC and others are. MVC decided to really forget about the "lower income" customers and decided to focus on the premium market. They really don't have an entry-level product anymore, unlike HGVC and others. Listen to the conference call and you'll hear the disdain the (now former) CEO has for the lower-income customers at the two Sheraton properties in Orlando.

The closest analogy I can think of is if United Airlines decided to rip out the economy seats in their planes and decided only to sell United First seats. Their revenue per seat sold may go up, but overall revenue undoubtedly would go down as potential customers go to American and Delta who would have the product at the right price-point.

The pain isn't over this quarter. It is likely to continue until they at least get new management in place to stabilize things. My guess is the new CEO (when they find a permanent one) will come in and the company will take a big bath (i.e., write downs) to set up a future where they look cleaner.

Plus the Marriotts and Sheratons in Orlando simply aren’t that exclusive like some of the other MVC properties. All of them can be rented on 3rd party sites between $100-200 a night. The sell of an Orlando timeshare isn’t that great with so much cheap inventory.

Maui sales have still been hit from the wildfires and MVC is very concentrated in Kanapali. Hilton doesn’t have the same kind of exposure there.

Since Orlando is struggling, makes me wonder if we start seeing reports of MVC struggling in Vegas next.

 

[jabberwocky]

Plus the Marriotts and Sheratons in Orlando simply aren’t that exclusive like some of the other MVC properties. All of them can be rented on 3rd party sites between $100-200 a night. The sell of an Orlando timeshare isn’t that great with so much cheap inventory.

Maui sales have still been hit from the wildfires and MVC is very concentrated in Kanapali. Hilton doesn’t have the same kind of exposure there.

Since Orlando is struggling, makes me wonder if we start seeing reports of MVC struggling in Vegas next.

MVC doesn't have as large a footprint in Vegas - that is pretty much HGVC territory.

And yes, Orlando is much more affordable, but that also means the average customer there is likely to have a smaller budget than the one on Maui. What is the smallest points Abound points package MVC will sell? 1500 points for $25k+? I think we're routinely seeing HGVC victims customers coming here and reporting that they've spent as little as $7k and are looking to back out of the deal. I know MVC layers on incentives to drop the price down, but I'd still say there is no entry level product here.

When they first rolled out Abound we were told (at a Sheraton sales office) that they were no longer selling weeks or Flex packages - it was all Abound (the exception was Lagunamar). But it seems to have shifted, and we've been offered our choice of a week or Flex points at two Westin locations in the past year.