Marriotts new policy

[thinze3]

....My favorite airline enticed me way back in 1981 to be loyal to it by offering me FF miles for flying with them. They told me I could use 15,000 of those FF miles for a free ticket. Oops! They arbitrarily increased the requirement to 20,000 miles and then again to 25,000 miles. They also reduced the number of free seats available, especially on the convenient flights for which I am most likely to want such free tickets. Thus, the value of the FF miles I had already earned was significantly devalued and I could no longer use them as effectively as previously....

How does that impact the forthcoming reservation restriction? Several points:

1) Just as with the airline programs, Marriott says it can change its program rules at any time. It has made numerous changes over the years, some with an outcry from this forum, but none that failed when it came to Marriott's legal right to make such changes. As just one example, when Marriott disenfranchised (to a certain extent) single week owners by adding the 13-month reservation policy, there was no successful action against Marriott.....

Dave
I have not looked on my deeds, but do they mention reservations at all?
What about the contracts, do they mention anything about reservations?

I believe that the comparison to FF miles is apples and oranges. I believe that the comparison to the 13 month rule for multi-week owners is more realistic. Marriott specifically limited the number of weeks available to multi-week owners to be able to get past any litigation problems. I can only believe that there would also be some sort of compromise on the 6 month reservation changes as well. Obviuosly grandfethering the old weeks in would do it. IMO

.

 

[divenski]

.....And I believe most owners are more concerned about how the program works than what resale values are. I'm one of those. I have no plans to ever sell any of my weeks. But I worry every year about whether I'll be able to reserve my first-choice weeks.

Perhaps more importantly, keep in mind that TUG is a tiny blip on the Marriott map.

Dave,

If resales are only 5% of the TS market, then this proposed change shouldn't have much of an effect on your ability to get a first-choice week? Seems like a big change for a 5% effect.

Unless maybe, the resale market is growing, and/or the effect of places like TUG have more of an impact than the raw numbers suggest.

I still have to think that this change will apply to only NEW properties and sales. After all, for properties that are sold out, how many of them does Marriott still sell in any way? Even if Marriott is still selling a few units here and there, for any of the older properties, it will take many years for any existing owners to see any real benefit from this change.

 

[ladycody]

Say I owned a Platinum Week at Summit Watch – I can’t go weeks 51 & 52 but I can go the week of Sundance and Week 7 (President’s Week). Say I owned 4 Platinum weeks and used to lock in 2 Sundance and 2 President’s Week, used one an rented the others for mega bucks.

My Platinum Week is worth about $28k to me just about anytime I want to sell it.

Marriott now implements the 6 months reservation policy on resales. The guy I would sell the week to can NO LONGER get Sundance or President’s week but week 1 or 2 in Park City and that’s it.

Anyone here want to say that my week is still worth $28k?

Of course not, its worth a fraction of that – say half of it or $14k.

Now I need some cash and list the week at 14k and find a buyer – 10 minutes later I get the ROFR and Marriott steps in and snaps up the week for $14k and it sells it for $50k this afternoon. This is worthy of a 3rd world dictator’s tactics. Marriott would have to dump the ROFR instantly to make this work.

This would become such a huge class action lawsuit as to make Marriott’s lawyers smile since they will be spending many more billable hours on the job for the next 10 years. It wouldn’t take much to find 12 folks from Utah to find Marriott guilty of unscrupulous and predatory business activities. I wouldn’t be surprised if the auditors and lawyers cover their butts and issue warnings to the marketing guys that this half baked idea needs to be filed in the round filing cabinet today.

P.S.
Over a 40 year period just about EVERY unit at EVERY Marriott is going to be sold - that's a lot of business for the lawyers; bless their hearts.

P.P.S.
ARDA reports that of all timeshare transactions 7% are resale. All this for that 7% Marriott? Are you nuts?

Are you serious??? :hysterical:

 

[PerryM]

Whew!!!

I generally agree with your comments, Perry. But my guess is that there will be only a few lawsuits and they will go nowhere. Here's an analogy, which you can say (accurately) is different, but there are similarities....

My favorite airline enticed me way back in 1981 to be loyal to it by offering me FF miles for flying with them. They told me I could use 15,000 of those FF miles for a free ticket. Oops! They arbitrarily increased the requirement to 20,000 miles and then again to 25,000 miles. They also reduced the number of free seats available, especially on the convenient flights for which I am most likely to want such free tickets. Thus, the value of the FF miles I had already earned was significantly devalued and I could no longer use them as effectively as previously.

Result? There was a single successful lawsuit in the 1980s and it was successful only because American and other airlines had not given sufficient notice of the changes to the program rules. Subsequent lawsuits over other devaluations have gone nowhere. The key to the airlines' successful defense was that their program rules clearly stated that they could change any of the terms of the program or even the very existence of the program at any time.

How does that impact the forthcoming reservation restriction? Several points:

1) Just as with the airline programs, Marriott says it can change its program rules at any time. It has made numerous changes over the years, some with an outcry from this forum, but none that failed when it came to Marriott's legal right to make such changes. As just one example, when Marriott disenfranchised (to a certain extent) single week owners by adding the 13-month reservation policy, there was no successful action against Marriott.

2) Nowhere in any of the Marriott materials is there any written guarantee that Marriott won't take actions that adversely impact the value of what we own. In fact, Marriott, just like the airlines, takes frequent action that affect our timeshare value and other actions that devalue the Marriott Rewards points that we own. Life goes on.

3) Marriott undoubtedly has the best legal minds that money can buy looking at every aspect of this forthcoming change. And no matter how incensed we might get about the change, the task of anyone who believes that Marriott will be ordered by a court to pay for adversely impacting our resale value will be to prove that those legal opinions that Marriott is getting are flawed. Yes, a lot of people will likely be unhappy. But none of those here who claim what Marriott is doing can't be legally supported has done 1% as much legal research on the issue as Marriott has.

As for who is likely to be successful in a possible legal battle on this issue, I would give overwhelming odds to Marriott. I think its wishful thinking to suggest otherwise.

I see what you are saying, but class action lawsuits have a life of their own and I can see where 12 folks could be convinced that Marriott harmed hundreds of thousands of owners who, just like a homeowner, has the heavy hand of the developer squashing the ability of the little guy to get the resale price that used to be available.

I've presented my opinion and my 1 Gold week at Summit Watch isn't about to be hurt and my ability to exchange into wonderful Marriotts isn't about to change.

So let's see if I win or lose my bet against myself (what?). I believe that some grown up at Marriott will come to their senses and stop this.

I am glad I did sell my 5 Marriotts - whew!!!!!

 

[PerryM]

Are you serious??? :hysterical:

Well WM owners will have no problems with Marriott's attack on their resale market.

Maybe Marriott and Wyndham are looking at a merger?


Makes sense to me...

 

[divenski]

5% of what?

Many people have stated that the resale market is about 5-7%, but the question is of what?

Does 5% represent the total of all TS units owned at the moment by resale owners or the amount of sales each year that are resale? If the latter, then it is likely that older properties have a much higher % of resale owners, which of course means that a lot of original owners sold resale without Marriott's "help".

 

[Icarus]

My favorite airline enticed me way back in 1981 to be loyal to it by offering me FF miles for flying with them.

That's not even close. You didn't pay for the miles and sign a contract for them and receive a deed for them guaranteeing you use of those miles at a specific rate in perpetuity.

-David

 

[PerryM]

Many people have stated that the resale market is about 5-7%, but the question is of what?

Does 5% represent the total of all TS units owned at the moment by resale owners or the amount of sales each year that are resale? If the latter, then it is likely that older properties have a much higher % of resale owners, which of course means that a lot of original owners sold resale without Marriott's "help".

ARAD quote:

Vacation owners are savvy travelers who shop around.

57.4% of recent buyers purchased directly from a developer; 24.9% purchased from a home owners’ association; 10.5% acquired their timeshare as a gift, inheritance, or from some other source; 7.2%purchased from a pervious owner.

The average recent buyer attended 2.6 sales presentations before making a purchase.


I did find the ARDA link!

 

[wuv pooh]

That's not even close. You didn't pay for the miles and sign a contract for them and receive a deed for them guaranteeing you use of those miles at a specific rate in perpetuity.

-David

I think it is pretty close. Program rules are subject to change. What you buy from Marriott is a deed to one week of time per year. You will always receive that. Everything else is subject to change including exchanging, reservation timeframes, trading for points, floating vs. fixed weeks, renting, locking off, who manages the property, etc, etc. Some changes require the cooperation of the HOA, or the amendment of the condo documents, but everything is potentially up for grabs except the occupancy of the specific week you are deeded in a specific building. That is why the advice/disclosures is to buy where you want to go and not based on current program rules or investment potential.

I think it will be interesting to see how things work out. I would be interested in seeing greater benefits to people who buy direct vs. resale and have made several suggestions to Marriott in the past on the issue. It should be an eventful year.

 

[timeos2]

That's not even close. You didn't pay for the miles and sign a contract for them and receive a deed for them guaranteeing you use of those miles at a specific rate in perpetuity.

-David

Agreed. Clearly FF miles are a bonus program subject to the whims and rules of the issuing airline. With Marriott (and others) we are talking about a legal contract for property or RTU with specific rights & obligations. Completely different thing.

 

[Palguy]

If my deed states a specific unit for a specific week (which is does for the purpose of insuring the same week is not continuously resold by the developer) and Marriott picks it up for say 25¢ on the dollar because it is a resale with restricted reservation rights. They then turn around and sell the exact same unit, is it not if fact a resale? Would not any jury in the country consider it so? That being said, shouldn't Marriott be held to the same standard they set for current owners as resellers? I understand they can add purchase bonuses and the such, or create a new in house trading program, but to sell the exact same deeded unit under a different set of conditions and saying it is not also a resale? I am no legal expert by any means, and they may very well be able to do it, but if I were setting on a jury and I would assume a majority of the people who would could see very well what they are doing. It will be interesting to see what they finally decide to do, but I would be surprised to see such a major change.

But then again, what do I know, little or nothing. Marriott holds all the cards and it is like playing Yu-Gi-Oh with my 9 year old grandson. He knows everything about the game and I don't, he stacks the deck well in advance, he makes the rules as he goes along, the same rules don't apply to me and I haven't beat him yet.

 

[Dave M]

Agreed. Clearly FF miles are a bonus program subject to the whims and rules of the issuing airline. With Marriott (and others) we are talking about a legal contract for property or RTU with specific rights & obligations. Completely different thing.

...and....

That's not even close. You didn't pay for the miles and sign a contract for them and receive a deed for them guaranteeing you use of those miles at a specific rate in perpetuity.

-David

Nor did anyone here sign a contract or receive a deed that guaranteed any particular resale value. Nor will any future resale buyer get any guarantee from Marriott about how far in advance that buyer can reserve a week. So I'm missing your point.

My point is that my airline enticed me to spend money in expectation of getting a specific benefit that was in a written program that has a provision allowing changes. That program changed. No foul, according to the courts. Similarly, Marriott enticed us to spend money in expectation of getting certain benefits that were in a written program that has a provision allowing changes. That program has changed and will change. Likely, no foul. That's the similarity.

To clarify, because the question has come up previously, I'm not on Marriott's side on this issue. I'm not taking sides. I'm merely trying to look at possible or logical outcomes from an objective - not emotional - standpoint.

 

[timeos2]

...and....
Nor did anyone here sign a contract or receive a deed that guaranteed any particular resale value. Nor will any future resale buyer get any guarantee from Marriott about how far in advance that buyer can reserve a week. So I'm missing your point.

My point is that my airline enticed me to spend money in expectation of getting a specific benefit that was in a written program that has a provision allowing changes. That program changed. No foul, according to the courts. Similarly, Marriott enticed us to spend money in expectation of getting certain benefits that were in a written program that has a provision allowing changes. That program has changed and will change. Likely, no foul. That's the similarity.

To clarify, because the question has come up previously, I'm not on Marriott's side on this issue. I'm not taking sides. I'm merely trying to look at possible or logical outcomes from an objective - not emotional - standpoint.

It is similar to the degree that the original purchase documents included wording that they could be altered. Through no grand plan (simply dumb luck of buying what we liked at that time) all of our existing ownerships are based on a deed that clearly spells out a unit, size and use procedures. None of which are subject to change as they are defined in the recorded deed right down to reservation periods and how they are used. On top of that is a set of maulable Association rules and regulations (how many people in each size unit, what time check in can start and checkout occurs, if smoking is or isn't allowed, etc) but none of those impact the ability to occupy, reserve or sell the rights attached to the deed. If the deeded time Marriott offered, and buyers agreed to, included the right to change those use / ownership /sale rights then it wasn't very protective of the buyer (I'm surprised it passed state review) but it is what it is. In that case Marriott can do as they please just like those FF mile programs and you really don't have much if any say or control. Not much of a deed IMO but again it is what the buyer agreed to and now must live with.

 

[Icarus]

.So I'm missing your point.

...

To clarify, because the question has come up previously, I'm not on Marriott's side on this issue. I'm not taking sides. I'm merely trying to look at possible or logical outcomes from an objective - not emotional - standpoint.

I guess we'll simply have to agree to disagree.

The Marriott Rewards program has changed too, and those changes affected the value that we all got for the option to exchange for MR points, but that also was expected as with all rewards programs. But, I don't think the changes to the MR program are comparable to the changes in the reservation policy for reserving a week at your home resort no matter how you purchased the unit. And it has nothing to do with a "guaranteed resale value" either.

I wonder if there's some line that they might cross that might get you to change your mind. What if they just changed the program so that resale weeks could only reserve their weeks one month out? How about changing it so that you can't reserve any week if you purchase resale? Would that be ok?

-David

 

[Icarus]

I think it is pretty close. Program rules are subject to change. What you buy from Marriott is a deed to one week of time per year. You will always receive that.

We're not talking about resorts/deeds with fixed weeks. We're talking about resorts/deeds with one (or more) seasons of all floating weeks. KBC has a single season, like most, if not all the Hawaii resorts. A few offer some fixed weeks that will not be affected by the change being discussed in this thread.

-David

 

[Dave M]

The key in my mind is the specific language that allows Marriott to change the reservation program. It's tough to get around that, no matter how much we dislike changes.

Yes, there are some changes that would upset me more than others. But if they completely dumped the current program and implemented an entirely new reservations system, that would appear to be Marriott's right to do so.

 

[timeos2]

I guess we'll simply have to agree to disagree.

The Marriott Rewards program has changed too, and those changes affected the value that we all got for the option to exchange for MR points, but that also was expected as with all rewards programs. But, I don't think the changes to the MR program are comparable to the changes in the reservation policy for reserving a week at your home resort no matter how you purchased the unit. And it has nothing to do with a "guaranteed resale value" either.

I wonder if there's some line that they might cross that might get you to change your mind. What if they just changed the program so that resale weeks could only reserve their weeks one month out? How about changing it so that you can't reserve any week if you purchase resale? Would that be ok?

-David

Or simply reverse the plan. The HOA suddenly gets controlled by owners and they decide that only RESALE buyers get to reserve at 13 months while Developer buyers going forward (newbies - they deserve less) get a 6 month window. See any issue with that? Fair is fair no matter who makes the rules and anytime one group gets favored unfairly over another no matter what the rational at least the perception of an unfair game becomes a problem. If you happen to be on the "winning" side it's great but remember that the next change may hurt you and favor someone else. Best to simply work to keep everyone whole and no one with a "favored" status.

For what its worth I think its clear Dave M isn't saying he agrees (or disagrees) with the plan but is merely providing the most factual details available at this time. A classic don't shoot the messenger situation.

 

[hipslo]

As I said,

"Ultimately"

I am not sure I understand. Are you suggesting that "ultimately" any grandfathering of EXISTING resale owners would no longer apply? Or that "ultimately", once there are a lot of new resale owners that are not grandfathered, others would have an easier time making reservations? If the former, is that just a hunch or is it something more? If the latter, implicit in that is that buyers would continue buying resale, at prices that would not cause Marriott to trigger rofr, even if they are subject to a new 6 month reservations window. That seems like a pretty darn small universe of people, but I suppose you never know.

I almost hate to ask this one, but assuming the worst, and that existing resales are not grandfathered, any idea what sort of arrangement Marriott might care to work out with resale owners who wouldnt want to be treated as second class owners, for those of us who might consider throwing good money after bad (or perhaps bad money after good might be a more apt characterization).

 

[Icarus]

The key in my mind is the specific language that allows Marriott to change the reservation program. It's tough to get around that, no matter how much we dislike changes.

Yes, there are some changes that would upset me more than others. But if they completely dumped the current program and implemented an entirely new reservations system, that would appear to be Marriott's right to do so.

I don't believe I've argued that they don't have the right to make changes to the program.

What I have said is that I don't think that the proposed changes benefit current or future owners. I also hypothesized about the reason for leaking the proposed changes, but we've already discussed that part of it, and that was just a theory.

-David

 

[thinze3]

Or simply reverse the plan. The HOA suddenly gets controlled by owners and they decide that only RESALE buyers get to reserve at 13 months while Developer buyers going forward (newbies - they deserve less) get a 6 month window. See any issue with that? ....

That's a good point. But don't forget, by that time the resort would not have Marriott's name in front of it.

I would, however, like more resorts to play hardball in their negotiationswith Marriott similar to what one of the Aruba resorts is doing at this time.

.

 

[hipslo]

The key in my mind is the specific language that allows Marriott to change the reservation program. It's tough to get around that, no matter how much we dislike changes.

My recollection of that language, at least at Mountainside, is that changes can be made so as to more equitably allocate reservations among owners. No distinction is drawn between developer and resale owners. Marriott would need to show that it is "fair" to discriminate against resale owners in this way. This could be difficult (not impossible, but difficult) to do, at least as to existing resale owners who purchased in reliance upon the existence of a system that did not discriminate in this way.

 

[timeos2]

I almost hate to ask this one, but assuming the worst, and that existing resales are not grandfathered, any idea what sort of arrangement Marriott might care to work out with resale owners who wouldnt want to be treated as second class owners, for those of us who might consider throwing good money after bad (or perhaps bad money after good might be a more apt characterization).

You already have that plan. You would have to find a buyer, most likely at a greatly reduced price as the changes will negatively impact resale values, then Marriott will grab the week from you and your buyer at the greatly reduced price with ROFR. Is the power plant to light the street lamps on line yet? Developer control, unfettered rights to make changes, ROFR, etc are all negatives and none help owners. None of them. Basically continued Developer control/management of resorts is a negative no matter what brand name we may be speaking of. Sales always trumps owners in those cases.

 

[thinze3]

lost trading power

Everyone seems to be looking at the reservation system only and how it relates to furue resale value. What about the lost value in trading through II or through Marriott if Marriott developes an internal trading system. Depositing a week 5-6 months out makes you trading power much less than one deposited 11-12 months out. IMO

Also:
What happens if you own TWO resale weeks.
Would you be able to book 7 months out for contiguous weeks?

 

[hipslo]

You already have that plan. You would have to find a buyer, most likely at a greatly reduced price as the changes will negatively impact resale values, then Marriott will grab the week from you and your buyer at the greatly reduced price with ROFR.

I meant some other plan designed specifically to deal with this scenario.

I agree that use of rofr in this specific scenario would be abusive, which is why I would think that part of the rollout of the plan, unless there is grandfathering, would need to address the issue. But hey, at the end of the day, business is business. Sometimes you win, sometimes you lose. No need to get emotional, the key is to reevaluate and work out contingency plans.

Or we can all spend our time and energy debating what SHOULD be. I prefer to deal with what IS .

 

[timeos2]

I meant some other plan designed specifically to deal with this scenario.

I agree that use of rofr in this specific scenario would be abusive, which is why I would think that part of the rollout of the plan, unless there is grandfathering, would need to address the issue. But hey, at the end of the day, business is business. Sometimes you win, sometimes you lose. No need to get emotional, the key is to reevaluate and work out contingency plans.

Or we can all spend our time and energy debating what SHOULD be. I prefer to deal with what IS .

What IS is why would they want to offer anything except whats already in place? They are trying to reduce the value of resale with moves like this - they already have a system in place to grab any low cost weeks. Why offer anything different? It's dumb luck if they even offer "grandfathering" - beyond that is a pipe dream.