MVC Trust Proposed 2016 Maintenance Fee

[JIMinNC]

I just received the meeting notice for the MVC Trust Owners Association Board Meeting with the proposed 2016 budget. Based on that, it looks like the proposed 2016 maintenance fee is $125.62 per beneficial interest (250 points) or $0.5025 per point compared to $0.4750 in 2015. (A $0.275 increase or 5.8%.)

The proposed Destination Club dues are $185 for Owners and Select in 2016 compared to $175 for 2015. (A $10 or 5.7% increase.)

Dues for Executive and Presidential are proposed at $225 and Chairman at $250.

 

[NYFLTRAVELER]

I just received the meeting notice for the MVC Trust Owners Association Board Meeting with the proposed 2016 budget. Based on that, it looks like the proposed 2016 maintenance fee is $125.62 per beneficial interest (250 points) or $0.5025 per point compared to $0.4750 in 2015. (A $0.275 increase or 5.8%.)

The proposed Destination Club dues are $185 for 2016 compared to $175 for 2015. (A $10 or 5.7% increase.)

Unless new resorts are rolled out (not merely a block of rooms in an existing hotel) I think it will soon get to the point where owners will start to push back. I for one did not join MVCI DC program in order to obtain glorified hotel rooms. I bought into the program (resale) based on the array of resorts and the family-friendly amenities and accommodations at those resorts.

 

[SueDonJ]

I just received the meeting notice for the MVC Trust Owners Association Board Meeting with the proposed 2016 budget. Based on that, it looks like the proposed 2016 maintenance fee is $125.62 per beneficial interest (250 points) or $0.5025 per point compared to $0.4750 in 2015. (A $0.275 increase or 5.8%.)

The proposed Destination Club dues are $185 for 2016 compared to $175 for 2015. (A $10 or 5.7% increase.)

I've been wondering how the Club Dues would shake out following the status tier changes back on April 30th. Are you being advised of only your amount or the varying amounts for all Members?

 

[BocaBoy]

I just received the meeting notice for the MVC Trust Owners Association Board Meeting with the proposed 2016 budget. Based on that, it looks like the proposed 2016 maintenance fee is $125.62 per beneficial interest (250 points) or $0.5025 per point compared to $0.4750 in 2015. (A $0.275 increase or 5.8%.)

The proposed Destination Club dues are $185 for 2016 compared to $175 for 2015. (A $10 or 5.7% increase.)

The MVCI maintenance fees remain totally out of control. This is an essentially no inflation environment and now even energy costs are down, but these fees continue to increase dramatically every year. DC trust maintenance fees will be up something like 25% in 6 years. They did a much better job of controlling costs in the earlier days of higher inflation.

It does not have to be this way. I have lived in a full service luxury high rise condo building (150 units) for the past 8 years, with a full time staff and nearly as many amenities (excluding food) as most MVCI resorts. The building is almost 40 years old and we keep it in top condition. The roof, windows, elevators, etc., have all been replaced in the past 7 years. And the maintenance fee? Exactly 6.7% higher today than it was in 2007.

 

[dioxide45]

I've been wondering how the Club Dues would shake out following the status tier changes back on April 30th. Are you being advised of only your amount or the varying amounts for all Members?

That would be good to know. Will they have more price tiers for each level or go the route of just two? My guess is that Select and below will be $185 and Executive and above will be $225 for Executive and above. A $10 increase across the board.

 

[JIMinNC]

I've been wondering how the Club Dues would shake out following the status tier changes back on April 30th. Are you being advised of only your amount or the varying amounts for all Members?

Forgot to include that - the membership dues are shown as follows:

Owner and Select: $185
Executive and Presidential: $225
Chairman: $250

I'll edit the top post to add that. Thanks for the reminder.

 

[JIMinNC]

The MVCI maintenance fees remain totally out of control. This is an essentially no inflation environment and now even energy costs are down, but these fees continue to increase dramatically every year. DC trust maintenance fees will be up something like 25% in 6 years. They did a much better job of controlling costs in the earlier days of higher inflation.

It does not have to be this way. I have lived in a full service luxury high rise condo building (150 units) for the past 8 years, with a full time staff and nearly as many amenities (excluding food) as most MVCI resorts. The building is almost 40 years old and we keep it in top condition. The roof, windows, elevators, etc., have all been replaced in the past 7 years. And the maintenance fee? Exactly 6.7% higher today than it was in 2007.

I guess it all depends upon your frame of reference...when I see just a 5% increase, I'm happy. When we were Diamond owners it was worse. In our last 6 years of Diamond Kaanapali Beach ownership we had two years with about 10% increases and one year with a 19% increase. Compared to that 5% looks great.

One thing your condo unit doesn't have to worry about is stock price. Marriott has to keep the boys on Wall Street happy who expect earnings to increase well ahead of inflation every quarter. If it doesn't and their bonuses suffer, they punish you.

Also, not every category of inflation is the same and I suspect that overall travel costs lead food, clothing, housing, energy (which is negative inflation), the largest categories in overall inflation.

 

[dioxide45]

Forgot to include that - the membership dues are shown as follows:

Owner and Select: $185
Executive and Presidential: $225
Chairman: $250

I'll edit the top post to add that. Thanks for the reminder.

That is a pretty stiff increase for Chairman's Club owners. $35 increase, or just over 16%.

 

[GregT]

I just received the meeting notice for the MVC Trust Owners Association Board Meeting with the proposed 2016 budget. Based on that, it looks like the proposed 2016 maintenance fee is $125.62 per beneficial interest (250 points) or $0.5025 per point compared to $0.4750 in 2015. (A $0.275 increase or 5.8%.)

The proposed Destination Club dues are $185 for Owners and Select in 2016 compared to $175 for 2015. (A $10 or 5.7% increase.)

Dues for Executive and Presidential are proposed at $225 and Chairman at $250.

Wow, that's a big number for the Trust Point MFs. I'm really sorry to see this -- it has never been economical, but it is rapidly becoming ridiculous. Wasn't it $0.45 two years ago?

The addition of the Ritz Carlton properties have to be putting upward pressure on the MFs, but that can't be all of it. The new points properties that Starwood is rolling out are equally expensive from a points perspective. Very strange and very far from the original thesis for timeshares that they are prepaid (and economical) vacation alternatives.

Interesting. Thanks for posting this.

Best,

Greg

 

[GregT]

That is a pretty stiff increase for Chairman's Club owners. $35 increase, or just over 16%.

It's also interesting because in combination with the new promotion, I suspect there will be many brand new enrolled owners who are instantly Chairman's Club.

The annual dues don't really move the needle -- this financial model is still heavily dependent on point sales -- but it's nice to have recurring revenue.

Best,

Greg

 

[JIMinNC]

Very strange and very far from the original thesis for timeshares that they are prepaid (and economical) vacation alternatives.

Maybe not. According to this article from CNBC, hotel rates are projected to climb by 5.4% annually this year, very similar to the last two years MVC increases. If that proves to be true, then the overall economic comparison between timeshares and hotels won't change much. See link below:

CNBC hotel inflation article

I also looked at some data from the US Travel Association, and from 2013 to 2014 hotel rates went up 4.5% when the general inflation rate in the economy was just a little over 1.5%

 

[GregT]

Maybe not. According to this article from CNBC, hotel rates are projected to climb by 5.4% annually this year, very similar to the last two years MVC increases. If that proves to be true, then the overall economic comparison between timeshares and hotels won't change much. See link below:

CNBC hotel inflation article

I also looked at some data from the US Travel Association, and from 2013 to 2014 hotel rates went up 4.5% when the general inflation rate in the economy was just a little over 1.5%

Understood, but I guess I was thinking more that timeshares are intended to be a more economical vacation option than hotels -- not merely keep pace with them.

Wow -- at $0.50 per point, it's really hard to find the intrinsic value at that ever-escalating price.

I believe (and this comment only diminishes my ownership) that Marriott needs to find ways to ascribe value to Trust Point ownership, like new properties need Trust Points, etc. Or different Luxury Collection options to owners of Trust Points.

Interesting stuff.

Best,

Greg

 

[VacationForever]

Makes owning weeks of location where you want to go much more compelling.

 

[JIMinNC]

Understood, but I guess I was thinking more that timeshares are intended to be a more economical vacation option than hotels -- not merely keep pace with them.

Wow -- at $0.50 per point, it's really hard to find the intrinsic value at that ever-escalating price.

I believe (and this comment only diminishes my ownership) that Marriott needs to find ways to ascribe value to Trust Point ownership, like new properties need Trust Points, etc. Or different Luxury Collection options to owners of Trust Points.

Interesting stuff.

Best,

Greg

Yes, I can certainly see where $0.50/point looks super expensive to you guys with lots of enrolled weeks and a cost per point in the $0.25-$0.35 range. But to someone like me who first entered the system when Trust points were $0.45, frankly $0.50 doesn't feel that much different to me. If the numbers worked a year ago at $0.45, they probably still work next year at $0.50. In fact, since our single enrolled week is a low point value week, the Trust points are actually our cheapest points. Because of that, starting in 2017, we're going to experiment with trading that week through II and trying for an up-trade, rather than electing points as we did in 2015/2016. We'll likely use point rentals to replace the points foregone by not electing.

Even at $0.50/point the 650 points we used for 4 days next spring at Harbour Point during Heritage PGA week are only $325 vs. over $1500 to rent those same 4 days on Marriott.com. Even the $3725 "cost" of our 2BR OF week next summer at MOC is a decent deal compared to Marriott.com where even 1BR OF units rent for $700-$800 or so per night in summer. I've never even seen a 2BR OF online there.

 

[Ralph Sir Edward]

Understood, but I guess I was thinking more that timeshares are intended to be a more economical vacation option than hotels -- not merely keep pace with them.

Wow -- at $0.50 per point, it's really hard to find the intrinsic value at that ever-escalating price.

I believe (and this comment only diminishes my ownership) that Marriott needs to find ways to ascribe value to Trust Point ownership, like new properties need Trust Points, etc. Or different Luxury Collection options to owners of Trust Points.

Interesting stuff.

Best,

Greg

I wonder when the resale transfer fee (currently at $2 a point, I believe) will be raised. That's the real elephant in the tent...

 

[suzannesimon]

I'm very happy I have enrolled weeks vs Trust points (even though I never use them). The same amount of trust points would be costing over $2,000 more in fees.

 

[BocaBoy]

I think people miss the point when they compare maintenance fee increases to travel costs, including hotel room rates. The real comparison should be to luxury condo fees because that is what they are. They are the costs to maintain the property. Of course timeshares will cost more than a residential condo, but here we are talking about percentage increases in these fees.

 

[BocaBoy]

Forgot to include that - the membership dues are shown as follows:

Owner and Select: $185
Executive and Presidential: $225
Chairman: $250

I hope they are planning some real enhancements for Chairman's Club, because right now you don't get much at all for the extra $25 over Presidential.

 

[BocaBoy]

One thing your condo unit doesn't have to worry about is stock price. Marriott has to keep the boys on Wall Street happy who expect earnings to increase well ahead of inflation every quarter. If it doesn't and their bonuses suffer, they punish you.

But stock price should not affect maintenance fees at all. The Association Boards set them. (I do realize Marriott controls many of these Boards.) And Marriott itself pays the fees on many many units. The maintenance fees are spent to maintain the property.

 

[Ralph Sir Edward]

But stock price should not affect maintenance fees at all. The Association Boards set them. (I do realize Marriott controls many of these Boards.) And Marriott itself pays the fees on many many units. The maintenance fees are spent to maintain the property.

But Vacation Club point fees aren't actually maintenance fees. A MVC point owner owns no property to pay MF on. They are paying a fee for access to a slice of the pool of timeshares owned by the MVC. The MVC is a middle man. Do you expect them to work for no profit...

(Note: there are pluses and minuses to this construct. YMMV,,,)

 

[suzannesimon]

I haven't seen any budgets but for those of us who own coastal US timeshares, hold onto your hats because FEMA has greatly increased the areas requiring Federal Insurance and have increased the premiums. My Delaware condo board said that the flood insurance will be increasing 18 percent a year until the Flood Insurance program is solvent again due to Katrina and Sandy. My guess is that is having an impact on our fees.

 

[ilene13]

As someone who is Chairman's Club I personally have a problem with a $250 a year fee as opposed to $185 or $225. I get nothing special from the membership. I enrolled my weeks strictly for the possibility of having flexibility. I have to have a separate II account for my non Marriott weeks and in my Marriott weeks none of my units are lock offs. I'd like to know what I am getting for the extra 25/65 dollars!

 

[mjm1]

I too am disappointed that the MF's are increasing this much given the current rate of inflation. We love our timeshares, but with retirement not that far in the future and a fixed income, we will have to reconsider what we keep in our portfolio. Even if we keep working, this level of increases makes owning more challenging.

It will be interesting to see how much our traditional weeks increase too.

Mike

 

[krj9999]

Well, the proposed MF increase for Willow Ridge is 8.3% (reserve fee up 10%; operating up 7.2%). So I'm not surprised by 5.8% for the Trust.

Regarding inflation, there may be deflation in fuel prices, some airfare and some technology products, but everywhere else for the most part, I see higher prices for products and services locally.

 

[bogey21]

The simple truth is that those who own are at Marriott's mercy which is driven by VAC's desire for profits. Bottom line is you can either sell or enjoy. The choice is yours. I made my choice years ago and sold but I do understand why some choose to hold and enjoy.

George