I am not sure what you are referring to? "Internal Exchange"? I think you mean Right of First Refusal? They could strip deposits from their internal exchange (MVC Exchange or II) and rent those. But that has nothing to do with sales of new timeshare points.
Interesting piece on MVC in WSJ this morning. They rate the stock a buy.
Don’t Buy a Timeshare—Buy a Timeshare Seller
Marriott Vacations Worldwide has sold off as consumers grow cautious, but it has other ways to make money.www.wsj.com
It seems that tour flow was higher in second quarter (4%) but revenue per tour was down (14%0) from prior year. This may be twofold. In 2022 the resorts were packed and people had money to burn. This year people are probably tightening their spending and if someone bought last year, they probably aren't inclined to tour this year again as they really haven't used the product. I think the rollout of Abound on the Vistana side also hurt them. They are seeing double digit decline in revenue at Visana sales centers that converted to selling Trust Points vs a smaller drop in sales at sales centers that are still selling legacy Vistana products. The new product of Abound is new and possibly confusing to Vistana owners and they aren't ready to embrace it enough to buy more points.
Not to mention it's more expensive. While it can be difficult to establish what an equivalent purchase would be, existing Vistana owners, even those who purchased retail, are used to lower price points for both initial purchase and MFs for the amount of points it takes to stay for a week.
Upon resale, the new owners are no longer enrolled in the 2 internal exchanges VSN and MVC. This way Marriott can buy the units cheaper and resale them as brand new with all the features. The process of adding back the enrollment to the internal exchanges is virtually cost-free. There is a value associated with these features and it is most obvious with the junk fees or with the difference in resale price between the Vistana resorts that have mandatory and voluntary phases.
Thanks for clarifying. I think your wording just confused me. They are stripping the ability of resale weeks to elect club points and perhaps that depresses resale values resulting in them being able to pick up weeks through ROFR on the cheap. I beleive in the past they claimed they wanted to keep their acquisition costs below 30%. So if they acquire weeks on average of 30% of the value they can sell the equivalent points for, then they are making a pretty decent 20% if their marketing and commissions are about 50%.
From their statement, their acquisition cost is in average less than 10%. I assume 30% is the maximum they would want to pay for those units that they would not be able to acquire for free?
Perhaps. The 30% number comes from a few years ago and I can't read the article because it is behind a paywall. I haven't read through all their Q2 earning statements. I do see where you quoted what looks to be a 8%-9% number. If they are only averaging 10%, that would seem to indicate that they don't target high value weeks to convey to the trust.
It is more sensible to keep the best inventory for the rental business and give the remaining to the trusts.
You claim that they do this all the time but have never provided proof that this is what they're doing. In my experience searching, generally during the prime times such as holiday weeks there is very little available for rent via marriott.com at the most sought-after timeshare resorts. There are occasional exceptions, but generally I have a much easier time finding availability using Abound or VSN.
Please disregard - need to figure out how to erase.
Oh, so you seem to believe that they convey to the trust the best units and they keep the junk to rent out. It makes a lot of sense. Your searching "experience" means nothing and it does not explain half a billion dollars a year in rental revenue.
The best units generally get passed around on the resale market and don't really get picked up by MVC because they're priced above what MVC is willing to pay for ROFR. Most of the good stuff is available because of weeks owners electing to use Club Points or StarOptions. But on occasion MVC does get some good ones, and based on the fact that people generally can book them using Abound/VSN and not so much via marriott.com I would say they probably do put at least some of them in the trust. They just don't acquire many of them to do so.
That's not what @sponger76 said.
Marriott does not disclose the inventory they own and use to rent and convey to the trust so nobody knows for sure. However, it makes business sense to try to optimize the rental revenue by keeping the best units to rent. From your own portfolio, would you get rid of your best weeks or the worst? I am not saying I know, as no outsider knows, but it makes sense. For now, I am not impressed with the Vistana inventory conveyed to the Marriott trust (at least the last posts I read a while ago about it). Is this "proof"? No, but an indication I may be right.
I beleive they convey it all to the trust. It doesn't make a lot of sense to carry that inventory when they can instead sell it for a 1000% markup. Money in timeshare is in contract sales. While they make a lot of money from rental income, it is secondary or even further down the list. And they can also rent out primo weeks if they so choose as they have access to inventory from so many sources (owned, cruise/tours exchanges, convert to Bonvoy, etc).
The indication would be that people would not be able to book prime time stays via Abound/VSN, only via cash stays on marriott.com, so I'd say there's nothing even close to "may" about you being right. But yet you keep harping on this conspiracy theory of yours. You almost never post anything on TUG unless it's to show that you still have some kind of axe to grind with MVC about what you *think* they *might* be doing. It gets to the point where you have nothing actually useful to share with anyone. Your posts just end up being an opportunity for me to exercise my eyes by rolling them. I guess I should thank you for keeping whatever muscles control that in shape.
) . If I divided $3,968 into the ideal volume per guest for a tour ($25,500) - I come up with an unbelievable 15.6% take rate on these presentations. If my arithmetic is correct, this is an amazing percentage on these presentations. No wonder Marriott keeps doing this and no wonder, they continue to entice people to attend with reasonably attractive offers. I'm also shocked that there these many folks that buy during the presentations! Gotta hand it to Marriott, they know how to run their business. As for me, I'll continue to hold on to my legacy weeks, thank you very much!Do they actually own 31,692 keys and they use all those all units for rent or the number represents the total number of keys available at all the 122 resorts? It may be the latter which means they may only own a small fraction of that number of keys so not sure your calculation is correct at all.
I've always been impressed by how innovative Marriott (either MAR and now VAC - Marriott Vacation Worldwide) in the hospitality business. My understanding is that they were one of the first to recognize that they didn't really need to own the assets, just manage where they could generate maximum value. This asset-light strategy was also used by Pepsi many years ago and has now been widely adopted by many - Uber for one is an example of a supremely asset-light business! Anyway, the article was interesting although JIMinNC who seems to follow the company probably has much better perspective on the company. One very interesting part was the information on the "amount it takes in per tour/Volume per guest of $3,968" and the 400,000 tours a year where the minimum number of "volume per guest" - if successful - would be $25,500. I tried to figure out what the "fish bite rate" or conversion rate of these tours (or in TUG vernacular - "lies, lies and more lies"
