Marriotts new policy

[davis6]

As an investor these kinds of rumors just have me fascinated. Folks are ready to make decisions based upon NO truth at all. I just marvel at how folks want to believe something that can’t be proven or is totally false but they want to believe it.

I’m a pilot and it just fascinates me and as an investor sometimes it's like a pilot who is flying blind in a snow storm. I can only trust what my instruments tell me what is happening and forget about what my body’s false signals say is happening.

Same here, Marriott would turn ALL their loyal owners into fierce enemies hell bent on revenge – that makes no sense at all.

As a pilot would you rely strictly on your instrumatation even if someone looking at a radar screen tells you there is a mountain in your path. Would you look into that a bit closer. I very much want to buy a Marriott T.S. but I think it is fair to know if they are going to change the rules.

I have read that other companies had a change similiar to this and if we dont think that Marriott could do the same we have our eyes closed.

On the other hand if they do change the rules and current owners are grandfathered with there current deeds could that make them have even more value???

 

[jimf41]

The hot skinny

Well here it is folks, the hot skinny, the real deal, the absolute truth straight from the horses mouth! I've got a cousin who drives a cab in NYC. He was talking to the parking garage attendant at the Marriott Marquis who is best friends with one of the livery drivers in Central Park. Bill Marriott himself was in his carraige taking a ride around Central Park and this is what he overheard.

First: Marriott is only going to let resale owners book 3 weeks out. All current resale owners will receive $150 in Marriott bucks to make up for this inconvenience. There will be no grandfathering. Too much of that going around already.

Second: Marriott is going to eliminate ROFR. Evidently with the first item enacted resale prices will go in the toilet and Marriott can buy them back cheaper on E-Bay.

Third: All sales contracts in the future will be done orally. You'll just have to believe what the salesman told you. No recording devices will be allowed in the sales gallery.

Fourth: All these changes will be implemented on 1 APR 08.

Now I realize that these changes will cause some financial hardships so out of the goodness of my heart I've decided to make thinze3 an offer on that Marriott Waiohai. Your going to lose your shirt on it when the new plan goes into effect so I'll offer you $3000 now to ease the pain. This offer is only good till midnight tonight.

Jim Freeman

 

[thinze3]

.....Now I realize that these changes will cause some financial hardships so out of the goodness of my heart I've decided to make thinze3 an offer on that Marriott Waiohai. Your going to lose your shirt on it when the new plan goes into effect so I'll offer you $3000 now to ease the pain. This offer is only good till midnight tonight.

Jim Freeman

Make it $2750 with MLE and you have a deal!
.

 

[timeos2]

And so it starts. Rumors do have a basis in fact

Well here it is folks, the hot skinny, the real deal, the absolute truth straight from the horses mouth! I've got a cousin who drives a cab in NYC. He was talking to the parking garage attendant at the Marriott Marquis who is best friends with one of the livery drivers in Central Park. Bill Marriott himself was in his carraige taking a ride around Central Park and this is what he overheard.

Read Dave M's post above yours. The action is for real - the impact unknown but unlikely to be good.

Seems that Marriott has really started down the Wyndham Road of devaluation of owner resales. Not a bad thing as it leads to GREAT deals for resale buyers (Wyndham is one of the greatest values in resale timeshares thanks to that sales centric approach). Except that Marriott also has ROFR at many resorts thus locking out the deals from buyers, grabbing the time for themselves and paying only the deep discounted prices this is likely to lead to the sellers. A double whammy for any Marriott owner that has to sell but, hey, it helps Marriott so I guess all is well. Oh - don't forget that Wyndham "grandfathered" owners that bought prior to the date they made changes but now, 5 years later, they are actively "un-grandfathering" them. What they change or bless you with they can also take away. Beware and make your decisions based not on what they promise but what they do. And protect yourself - Marriott sure won't.

 

[jimf41]

I did read Dave M.'s post. I'll quote it for you.

My latest info....
I can't stress enough that no definitive policy has as yet been decided upon.

Jim Freeman

 

[kjd]

Question about new policy proposal.

If you bought direct from Marriott and they limited the rights of resale owners to six months advanced reservations why wouldn't that benefit the direct owners? That assumes that you were not interested in selling. It would seem to me that with two classes of owners the direct owners would have a better chance of getting their desired reservations and therefore have a substantial benefit.

 

[mariawolf]

I have to say that I think I agree with the last poster--maybe it will drive prices down but we all know timeshares aren't a good investment so if those of us who bought direct now have a better ability to make reservations I am not sure it is a bad thing. Like a car, timeshares de value as soon as you "drive" off the lot so at least they are giving owners something of value while they own--unlike Starwood who took away any benefit to being an elite!
Maybe I am the exception but I don't plan to sell--plan to pass on to my kids/grandkids and all I care about is whether I can use mine when I want to and if this helps me do that I don't think it is all bad. I was trying to talk myself in to another one to get the 13 month advantage but seems to me this would help me without buying another one!

 

[m61376]

Admittedly, my brain is a bit fuzzy these days...but I don't understand how Marriott could implement such a drastic change. Not to sound morbid, but realistically we have to accept that sometimes the unexpected happens, and there are many life changes which force owners to sell. I would venture to guess that the majority of Marriott timeshares on the market for resale are being sold by people who have sufferred a loss or illness, had a downturn in their financial circumstances, a change in their family situation and/or a change in residence due to their job situation.

Most buyers buy timeshares expecting to use them for the rest of their lives, but there wouldn't be so many for sale if things always worked out as planned. Up to now, resale prices remained high because the buyer was obtaining the same product and the same use, with only the inability to trade for points. So, a buyer who just wanted to use his/her timeshare essentially bought an equivalent product. By changing the rules, useage opportunities for resale buyers would be dramatically affected. Thus, even original purchasers would see a dramatic decrease in the value of their "investment." All those nice new units, just bought for $$$, would be difficult to unload if the need arises, since buyers would be relegated to only the least desirable weeks in a season.

Personally, I am shocked that Marriott would implement such a change. Maybe I am missing something, but I just don't understand the busioness rationale behind it. All it will take is a few really angry lawyers who just bought some expensive Maui or Marco Island weeks, for example, to realize that they'll take a bath if/when they decide to sell, to institute a class action suit and the negative publicity would be, IMHO, extremely detrimental.

Effectively, Marriott will be telling people buy our product, enjoy using it, but accept that it will be virtually worthless if you ever want to sell it.

 

[CMF]

On the other hand . . .

. . . if the restriction is put in place going forward, that is, for weeks bought directly from Marriott and sold after the change is in place, wouldn't that be a boon to sellers and buyers of weeks that were originally sold by Marriott before the modification? To put it another way, anything that Marriott sold before the change would carry the original benefits in perpetuity. This would allow me to pass on the rights as a grandfathered resale owner to a buyer should I decide to sell my weeks.

The decent thing for Marriott to do is grandfather existing rights in perpetuity. I think I read somewhere that the resale market is about 7%. The number will diminish in the future as Marriott continues expand and the modification tips the scales all the more to Marriotts favor. Only new Marriott direct buyers will be affected by the change. The rest of us will own weeks that have all the rights of weeks sold by Marriott and the value of our weeks will increase dramatically.

Charles

 

[sdtugger]

Depends on what "is" is . . . .

What does "grandfather" mean in this situation? If Marriott is planning to make this change apply ONLY to weeks sold by Marriott after the implementation date, then I don't see a risk of lawsuits. Could this be what they mean by grandfather? In other words, resales of current weeks would remain grandfathered?

I'm trying to figure out what Marriott is thinking based on DaveM's posts. Could this be a possibility? If not (i.e., if Marriott says that any resales by anyone after the implementation date lose rights to reserve at 12-13 months), then I can't see how Marriott avoids a costly legal battle. And, no rational company intentionally jumps into that kind of situation.

 

[kjd]

Marriott's business approach

Let's face it. Marriott knows its' own business. Until I hear it from Marriott, I would not jump to any conclusions about the new policy. I happen to think that the talked about changes might benefit existing owners who bought direct.

The problem with the entire discussion about this issue is that somehow some owners have considered these timeshares an investment. They are not. They are merely a membership that allows owners a license to use the Marriott Vacation Club. Something like tennis or golf memberships that often become worthless as well. If you wanted an investment you should have bought Marriott stock. It has done rather well.

As far as the resale folks on this board are concerned I have noticed that there is a great amount of gloating about how wise they were for purchasing resale instead of us dummies who bought direct. They often counsel posters to buy resale. Owners buy at their own peril and cannot assume that changes will never be made. We may very well end up with two classes of MVCI ownership.

It's probably wise to forget any hope about a class action suit helping resale owners. Most trial lawyers who take these cases get large fees from any settlement and will leave the owners with very little money. It happens all of the time with securities litigation. Besides, Marriott has a legal department that could drag any litigation out for years. Your heirs will probably see a resolution.

 

[thinze3]

To: Dave, David, Perry, Charles, Pat, Bill & Brian (and others)

We all know that Marriott's stock has not been doing all that well recently (down 40%) . But here is some very discouraging news.

MAR's net tangible assets look like this: (yahoo finance)

$2.64B in '04
$1.86B in '05
$1.12B in '06
$0.11B in '07 (sept)

YIKES!!

With the real esate depression and credit crunch sweeping the nation, maybe Marriott's coming changes are an act of desperation. Maybe they are in a cash flow crisis and cannot afford to continue to develop new properties or finish the ones they have started. Maybe they realized that it would be cheaper to buy TS's back through ROFR at 10-20 cents on the dollar and make their money in the resale market. At the rate and direction they are going with their net assets Marriott may have to file bankruptcy before long

Hey, what's wrong with a few more rumors at this point.
Terry
.

 

[CMF]

It's probably wise to forget any hope about a class action suit helping resale owners. Most trial lawyers who take these cases get large fees from any settlement and will leave the owners with very little money. It happens all of the time with securities litigation. Besides, Marriott has a legal department that could drag any litigation out for years. Your heirs will probably see a resolution.

It's not about the money. It's about protecting a purchase. And I would not give the Marriott legal department credit just because they are a big company and can hire competent counsel. Good legal counsel is no guarantee that a company will not do something foolish.

Charles

 

[m61376]

But the issue here is not just that it is bad for resale buyers, it is bad for those who bought direct as well. Imagine having plucked down some of those big $$$'s for some of the new resorts and then finding that, if you need/want to sell, your unit is virtually worthless because resale buyers would be relegated to only the worst weeks for reservations. Many direct buyers have bought with the feeling that they could break even 5-10 years down the road (esp. ones buying early pre-construction). Such a change in rules would devalue their investment.

Even if you don't consider it an investment, most people do feel purchasing a timeshare retains some value. Otherwise, it would be no different than a destination club, but with lower priced properties available for visiting. By making such a change, Marriott would be effectively removing most of the inherent value and I can see a basis for litigation here...I'd be interested to see what the lawyer owners have to say on the subject.

 

[thinze3]

It's not about the money. It's about protecting a purchase. And I would not give the Marriott legal department credit just because they are a big company and can hire competent counsel. Good legal counsel is no guarantee that a company will not do something foolish in an act of deperation!
Charles (not)

How dare you write something like that!! :ignore:

 

[PerryM]

Seems clear to me...

I buy a car worth $40k and 2 years later the dealer informs me that today they implemented a new policy:

Unless the car is sold back to the dealer for a healthy discount the resale owner I find can only use the car 3 days a week. A computer chip installed when the car was built will be activated when a change of owner on the title occurs that did not go thru the dealer.

The Blue Book value of my 2 year old car was 60% of the current selling price.

Oh, the dealer now gives only 25% back on a 2 year old car too.

So how much is my car worth now?

This to me smacks of restraint of trade, but I’m no lawyer.

 

[thinze3]

Global warming is dead??

US: July 3, 2007


"NEW YORK (Reuters Health) - An increase in summertime heat waves from global warming could mean more deaths among Americans each year, a study by Harvard researchers suggests.

Using weather data and death rates for 50 US cities between 1989 and 2000, researchers found that, on average, a two-day cold snap increased death rates by 1.6 percent. Heat waves, on the other hand, triggered a 5.7 percent increase."

Perry - Global warming is dead?? Rumors!! Don't believe it!! :hysterical:

Gotcha!
.

 

[Eric]

Since you are new, the way it goes is people on here mock people who bought developer as dumb or heaven forbid, tricked. Now those same resale buyers( me included) can turn out to be the dumb ones. At least I am not whinning about the change screaming lawsuit ( good luck with that ). I knew what I was getting my self into and will just keep my resale week. The reale market is 5% people. Thats means 95% of the people could care less about this change.

Let's face it. Marriott knows its' own business. Until I hear it from Marriott, I would not jump to any conclusions about the new policy. I happen to think that the talked about changes might benefit existing owners who bought direct.

The problem with the entire discussion about this issue is that somehow some owners have considered these timeshares an investment. They are not. They are merely a membership that allows owners a license to use the Marriott Vacation Club. Something like tennis or golf memberships that often become worthless as well. If you wanted an investment you should have bought Marriott stock. It has done rather well.

As far as the resale folks on this board are concerned I have noticed that there is a great amount of gloating about how wise they were for purchasing resale instead of us dummies who bought direct. They often counsel posters to buy resale. Owners buy at their own peril and cannot assume that changes will never be made. We may very well end up with two classes of MVCI ownership.

It's probably wise to forget any hope about a class action suit helping resale owners. Most trial lawyers who take these cases get large fees from any settlement and will leave the owners with very little money. It happens all of the time with securities litigation. Besides, Marriott has a legal department that could drag any litigation out for years. Your heirs will probably see a resolution.

 

[CMF]

Not true.

I knew what I was getting my self into and will just keep my resale week. The resale market is 5% people. Thats means 95% of the people could care less about this change.

I honestly doubt that you saw this one coming Eric. If you did, it would have been nice of you to clue everyone else in. I hope that Marriott is big enough to let bygones be bygones and let the 5% of us that bought resale alone and clue in future direct buyers. Also, there is a big difference between whining and complaining. There can be legitimacy attached to the later. The initial stage of a lawsuit is called a complaint - not a whine. Further, the folks that will be hurt the most if this change does not take the benevolent route I attempted to describe, are the the 95% full freight buyers who need to sell their week(s) due to unforeseen personal circumstances.

Charles

 

[Icarus]

My latest info....

The sales "rumor" about a six-month restriction on making reservations for owners of resale weeks is no longer a rumor. It comes from Marriott's highest levels. That six-month restriction is the most likely scenario. As I stated earlier, the change would likely grandfather from the new policy those resale weeks as of the date the new policy is announced or implemented.

I can't stress enough that no definitive policy has as yet been decided upon. There are still a number of issues being worked out. When? What are the details? Still being worked on. Ultimately, the actual change might look much different from this six-month proposal, but there will be a change.

However, Sales has been given the advance info that some change is coming so that they can respond to the question we might ask: "Why buy from Marriott when I can buy the same resale week for much less?"

I have posted a link to this in the OP of the other thread on this general topic.

Dave,

Thanks for the update.

So is the implication that any week sold at resale after the new policy goes into effect (no matter how the seller purchased their week) going to have the new restriction?

Yes, I realize this isn't definitive yet. It's hard to see how they can make this work from both a legal and moral view. (Remember, Marriott was supposed to be "different".)

Thinze: It seems you were right to be more concerned about this than I was.

I was going to look at picking up a Phuket BC EOY or maybe EY on resale after my KBC sale, but now, I'm not so sure about that. Situations change. They did for me. I knew I would loose a fair amount of my purchase price when selling it if I had to sell it. Of course, when I went in, I had no plans to sell, but things change.

-David

 

[Eric]

Again, a very small number resell their weeks and most can sell thru Marriott and live with the 60%.
As far as whinning, I still say it's whinning. Buying resales is a gamble and that gamble doesn't always pay off. The same people that are whinning love to brag about how they traded there week that they paid 50% of developer into Maui or something. It's only money, enjoy the week and it won't effect 98% of the owners.

I honestly doubt that you saw this one coming Eric. If you did, it would have been nice of you to clue everyone else in. I hope that Marriott is big enough to let bygones be bygones and let the 5% of us that bought resale alone and clue in future direct buyers. Also, there is a big difference between whining and complaining. There can be legitimacy attached to the later. The initial stage of a lawsuit is called a complaint - not a whine. Further, the folks that will be hurt the most if this change does not take the benevolent route I attempted to describe, are the the 95% full freight buyers who need to sell their week(s) due to unforeseen personal circumstances.

Charles

 

[PerryM]

US: July 3, 2007


"NEW YORK (Reuters Health) - An increase in summertime heat waves from global warming could mean more deaths among Americans each year, a study by Harvard researchers suggests.

Using weather data and death rates for 50 US cities between 1989 and 2000, researchers found that, on average, a two-day cold snap increased death rates by 1.6 percent. Heat waves, on the other hand, triggered a 5.7 percent increase."

Perry - Global warming is dead?? Rumors!! Don't believe it!! :hysterical:

Gotcha!
.

My only reply, as not to turn this away from the OP's thread. Click

 

[Icarus]

Again, a very small number resell their weeks and most can sell thru Marriott and live with the 60%.

As far as I understand the current resale program:

If you want to sell in a new development where there are still new sales going on, there is no resale program.

If you want to use Marriott's resale program if it's available, you get on the end of a long waiting list. When I put my KBC unit on the waiting list I was told the waiting list was four years long. I sold at resale and got at least 60% of the current developer price in a few months instead of waiting for four years and getting the same or less.

Marriott may also offer to buy your unit outright, but the offered prices have been ridiculously low. (I was offered 12k less $400 closing costs to sell a KBC EY 1BR OV to sell outright to Marriott.)

So, no, it doesn't really work out Eric. It's not the same thing at all.

Edited to add:

It's quite easy to post numbers and generalizations without a source as if they are true. Many people will take those numbers and generalizations as facts.

Why exactly is purchasing at resale a gamble? You are purchasing a warranty deed. A deed is no different no matter where it is purchased. The rules at the time of the purchase were known, and the only difference today is that resale buyers cannot participate in the trade for Marriott Rewards points program, and that is well-known and disclosed at the time of the original purchase. As far as I know, the warranty deed does not provide for less rights to reserve and occupy your own unit depending on how you purchased it.

-David

 

[CMF]

Maybe tempest in a tea kettle.

Again, a very small number resell their weeks and most can sell thru Marriott and live with the 60%.
As far as whinning, I still say it's whinning. Buying resales is a gamble and that gamble doesn't always pay off. The same people that are whinning love to brag about how they traded there week that they paid 50% of developer into Maui or something. It's only money, enjoy the week and it won't effect 98% of the owners.

I hope you are right Eric and we are just making a big deal about this because we love to talk timeshares. But, let's keep the puzzle on the table - this is not just about resale buyers. Those that bought directly from Marriott have something to loose as well. And, with respect to your money down the drain gamblers attitude, for some of us, getting a good deal and playing the system is part of the fun. I hate to loose, so I'll go down kicking and screaming (for fun of course) if Marriott turns on me.

Charles

 

[thinze3]

.... I hate to loose, so I'll go down kicking and screaming (for fun of course) if Marriott turns on me.
Charles

EEEK!


Added:
By the way, the figures I wrote above about Marriott's net assets value, was not a rumor!
.