NEW Info on Marriott/Westin/Sheraton Consolidated Product

[GregT]

It's probably worth adding one more cautionary comment. I own Worldmark, which is owned by Wyndham. I kept waiting for an overlay/integrated product between the two systems because it is a logical evolution. When it finally came, the points requirements were excessive making it basically unuseable. The analogy would be 3,250 points for a 2BR at Marriott Shadow Ridge, but 4,000 points for a 2BR at Westin Desert Willow -- both in the same city very close to one another. On the reverse side, 81,000 StarOptions for a 1BR at Westin Desert Willow via Vistana, but 90,000 StarOptions for a 1BR at Marriott Shadow Ridge. The exchange ratio just doesn't make sense in Worldmark and we may see the same here.

It will be best for us if there is a clear exchange ratio that is the same whether going from StarOptions to DC Points, or the other way. I think somewhere we have speculated on 30:1, so that 81,000 StarOptions (standard for the best Platinum 1BR properties) is worth 2,700 DC Points, and 148,100 StarOptions (standard for the best Platinum 2BR properties) is worth 4,900 DC Points. That will be the easiest way to integrate it (IMO) and what will be most interesting will be if they allow resale units (many of whom have lost their ability to convert to StarOptions when they were sold in secondary market) to enroll, just as we did in 2010 with our resale units.

I don't know which of the Starwood properties will be attractive to Marriott DC point users. Cancun is clearly a new destination, as is Nassau. St. John is a high profile destination in Starwood, but we already have two properties on St. Thomas so it's not as "new" a destination. I love Westin Princeville but that's just a different part of the same island and we have three Kauai properties.

It's interesting to contemplate and I think the program will be structured in manner to try to entice Vistana owners to buy DC Points, so the exchange ratio might be lower than 30:1, and perhaps they won't offer automatic enrollment without the purchase of DC Points (I'm assuming DC Points will be the common currency).

We will see and will be interesting to follow...

Best,

Greg

 

[jont]

Starwood does not have many destinations I would be interested in other that Cancun. Hyatt, on the other hand, has lot of attractive locations as far as I'm concerned. I believe it will be much harder for Marriott owner to book Hyatt locations due to their smaller resort size and limited locations. But I can always hope for the best.

 

[jwalk03]

Starwood does not have many destinations I would be interested in other that Cancun. Hyatt, on the other hand, has lot of attractive locations as far as I'm concerned. I believe it will be much harder for Marriott owner to book Hyatt locations due to their smaller resort size and limited locations. But I can always hope for the best.

I agree Hyatt has more destinations that compliment the existing Marriott portfolio. Key West, Puerto Rico, Aspen, San Antonio, Bonita Springs, Siesta Key, Breckenridge are all VERY appealing! But I agree that there is no way Hyatt is ever going to be truly intergrated and Marriott is not going to invest to expand a competing timeshare brand.

 

[JIMinNC]

I agree Hyatt has more destinations that compliment the existing Marriott portfolio. Key West, Puerto Rico, Aspen, San Antonio, Bonita Springs, Siesta Key, Breckenridge are all VERY appealing! But I agree that there is no way Hyatt is ever going to be truly intergrated and Marriott is not going to invest to expand a competing timeshare brand.

If you read my summary of John Geller's presentation above, you will read that Marriott Vacations Worldwide does have keen interest in expanding the Hyatt timeshare brand. While they clearly stated that they will not/cannot integrate Hyatt into the upcoming combined Marriott/Westin/Sheraton product, Geller was very clear they see Hyatt as a very attractive expansion opportunity. For Marriott Vacations Worldwide, Hyatt is not a competing brand; they license that brand from Hyatt in the same way they license Marriott/Westin/Sheraton from Marriott International - they pay a licensing fee to use the brand. If they can sell a $30,000 Hyatt ownership interest, that adds the same thing to their bottom line as selling a $30,000 Marriott timeshare interest. Since Hyatt is a smaller network and has more gaps in their locations, since they can't combine that product with Marriott/Westin/Sheraton, they see it as a ripe expansion opportunity to make that product more marketable and to add locations for that base of owners/prospects.

Here are his exact words:

"Hyatt is its own separate platform, and we've got sixteen resorts in Hyatt today. We see that as a huge opportunity over time to really grow the Hyatt brand. We were getting to that - we had to get a consent from Hyatt on the change of control - and we had just kinda got through that pre-COVID, and then COVID hit, so now we are excited when we get out of COVID to start getting after our Hyatt growth plans. So, it's a much smaller platform today, but the ability to grow that hopefully faster over time is a great opportunity."

 

[jwalk03]

If you read my summary of John Geller's presentation above, you will read that Marriott Vacations Worldwide does have keen interest in expanding the Hyatt timeshare brand. While they clearly stated that they will not/cannot integrate Hyatt into the upcoming combined Marriott/Westin/Sheraton product, Geller was very clear they see Hyatt as a very attractive expansion opportunity. For Marriott Vacations Worldwide, Hyatt is not a competing brand; they license that brand from Hyatt in the same way they license Marriott/Westin/Sheraton from Marriott International - they pay a licensing fee to use the brand. If they can sell a $30,000 Hyatt ownership interest, that adds the same thing to their bottom line as selling a $30,000 Marriott timeshare interest. Since Hyatt is a smaller network and has more gaps in their locations, since they can't combine that product with Marriott/Westin/Sheraton, they see it as a ripe expansion opportunity to make that product more marketable and to add locations for that base of owners/prospects.

Here are his exact words:

"Hyatt is its own separate platform, and we've got sixteen resorts in Hyatt today. We see that as a huge opportunity over time to really grow the Hyatt brand. We were getting to that - we had to get a consent from Hyatt on the change of control - and we had just kinda got through that pre-COVID, and then COVID hit, so now we are excited when we get out of COVID to start getting after our Hyatt growth plans. So, it's a much smaller platform today, but the ability to grow that hopefully faster over time is a great opportunity."

I hope thats the case, but I am skeptical. I think it would be far more likely for them to unload Hyatt if they could find a buyer. It just adds complexity and cost and there is no way they will ever be able to integrate it. Also I would think Marriott would be inclined to try and force their hand on which brand(s) to expand and focus on, especially once it comes time to re-negotiate on those tradmark licesnes.

 

[controller1]

. . .

• They have another $90 - $140 million of property to be disposed of. Some of this property is operating hotels that came with the ILG acquisition. He said they may convert some of that to timeshare, but that they do not want to be a long term owner of operating hotels. They will find a third party that wants to own the hotels and sell to them. He said they were in "first rate locations" and specifically mentioned Kauai and Puerto Vallarta.

The ILG acquisition brought with it three operating hotels: The Sheraton Kauai, The Westin Resort & Spa - Cancun and The Westin Resort & Spa - Puerto Vallarta.

 

[JIMinNC]

I hope thats the case, but I am skeptical. I think it would be far more likely for them to unload Hyatt if they could find a buyer. It just adds complexity and cost and there is no way they will ever be able to integrate it. Also I would think Marriott would be inclined to try and force their hand on which brand(s) to expand and focus on, especially once it comes time to re-negotiate on those tradmark licesnes.

I doubt Marriott International really cares how much MVW expands Marriott vs. Hyatt, since that doesn't really impact MI's bottom line. Marriott International spun off their timeshare operations for a reason (they didn't want to be in that business any more), and now, as long as Marriott Vacations Worldwide pays their licensing fees and the resorts with the Marriott signs are maintained to brand standards, I expect MI is fine with that.

Also, given that the person that made those statements was the MVW CFO, John Geller, and it was at an investor conference, they have to be very careful what they say so as not to mislead the investment community. Certainly everything is for sale at a price, and corporate strategies can change over time, but I doubt MVW would have gone to the trouble to negotiate the new agreements with Hyatt, and Geller would not have made the statements he did at that conference, if there was any current thinking that Hyatt is not a strategic asset that they hope to grow and enhance. The time to sell it would have been right after the completion of the ILG acquisition, just as they began selling off the non-strategic real estate assets they acquired from ILG.

Also, expanding Hyatt does not mean they won't also invest in new Marriott/Westin/Sheraton locations. His clear point was because Hyatt is smaller, there are more gaps in their network, so their network has more room for growth. Marriott/Westin/Sheraton already have most of the high demand locations covered, so expansion opportunities there will likely be more limited. I think that's why much of the MVC growth in the last several years has been the Pulse brand in the cities - they have most of the major beach/golf/ski resort areas covered, and until those areas need more unit capacity, expansion opportunities are more limited with their legacy brands.

 

[JIMinNC]

The ILG acquisition brought with it three operating hotels: The Sheraton Kauai, The Westin Resort & Spa - Cancun and The Westin Resort & Spa - Puerto Vallarta.

Yeah, he didn't mention Cancun, so that makes me think their long term goal may be to convert that to 100% timeshare. Sounds like they don't have plans to convert all of Kauai and Puerto Vallarta to timeshare, so may seek to sell the hotel portions to a third party. If they would ultimately decide not to convert all of Cancun to ownership, then that hotel portion would likely be sold as well.

 

[jwalk03]

Yeah, he didn't mention Cancun, so that makes me think their long term goal may be to convert that to 100% timeshare. Sounds like they don't have plans to convert all of Kauai and Puerto Vallarta to timeshare, so may seek to sell the hotel portions to a third party. If they would ultimately decide not to convert all of Cancun to ownership, then that hotel portion would likely be sold as well.

I saw in the number of villas thread that their filing from 2018 mentioned plans to convert the PV Hotel to timeshare units. I wonder if they are still planning to do that? or if they will just try to sell the whole thing off instead?

 

[JIMinNC]

I saw in the number of villas thread that their filing from 2018 mentioned plans to convert the PV Hotel to timeshare units. I wonder if they are still planning to do that? or if they will just try to sell the whole thing off instead?

Yeah, the 2018 filing does say they have 280 hotel units in Puerto Vallarta, but it footnotes that those units "May potentially be converted into 139 vacation ownership units." Given that he specifically mentioned Puerto Vallarta as one of the hotel properties they may sell, it would seem to hint that maybe they are no longer going to convert the whole property to timeshare or maybe none of it. I do seem to recall earlier in his presentation he did mention Puerto Vallarta as one of the Mexico locations that the new "consolidated product" will bring to the table, so that would seem to contradict that they were planning to sell the whole hotel. Maybe they will structure a deal where they convert part of the hotel to timeshare and then sell the remaining hotel portion to a third party with some sort of long term affiliation agreement to ensure the hotel portion stays Westin-branded. That's just speculation on my part, though.

 

[controller1]

Maybe they will structure a deal where they convert part of the hotel to timeshare and then sell the remaining hotel portion to a third party with some sort of long term affiliation agreement to ensure the hotel portion stays Westin-branded. That's just speculation on my part, though.

The problem with that is risk to having something happen like the current situation with Westin Mission Hills where the ownership and management group has changed and even though the hotel remains a Westin the owners/guests of the Westin Villas are no longer able to take a shuttle to the property or walk along the path to the hotel. If one wishes to use any of the hotel's amenities one must purchase a wristband.

 

[JIMinNC]

The problem with that is risk to having something happen like the current situation with Westin Mission Hills where the ownership and management group has changed and even though the hotel remains a Westin the owners/guests of the Westin Villas are no longer able to take a shuttle to the property or walk along the path to the hotel. If one wishes to use any of the hotel's amenities one must purchase a wristband.

I assume they could address such a situation with a contract of sale that requires timeshare owners to retain amenity access. I also assume, unlike the Mission Hills villas, which are essentially on a separate property (with its own amenities) from the actual hotel, the Puerto Vallarta situation is different in that the current hotel is a single property. In the PV case, the amenities would likely truly be shared if the hotel was split into a combo hotel/timeshare, so some sort of contractual guarantee of amenity access would seem to be a more critical element of any sale and ongoing management arrangement there.

 

[dioxide45]

I assume they could address such a situation with a contract of sale that requires timeshare owners to retain amenity access. I also assume, unlike the Mission Hills villas, which are essentially on a separate property (with its own amenities) from the actual hotel, the Puerto Vallarta situation is different in that the current hotel is a single property. In the PV case, the amenities would likely truly be shared if the hotel was split into a combo hotel/timeshare, so some sort of contractual guarantee of amenity access would seem to be a more critical element of any sale and ongoing management arrangement there.

I am not sure this is always the case. There is a situation of Hyatt Hacienda Del Mar timeshare owners losing out on amenities in the shared property. So simply being co-located may not mean much unless there is also co-ownership. Any contract can be broken given the right circumstances.

Hyatt Hacienda Del Mar owners your attention is needed

Dear fellow Hyatt Hacienda del Mar owner’s and every Hyatt owner. The Hacienda de Mar in Dorado Puerto Rico is at a critical point and we are needing owners to fight for its onsite amenities and it’s long term survival. If you’re a club owner you can no longer remain silent, today your action...

tugbbs.com

 

[Dean]

I am not sure this is always the case. There is a situation of Hyatt Hacienda Del Mar timeshare owners losing out on amenities in the shared property. So simply being co-located may not mean much unless there is also co-ownership. Any contract can be broken given the right circumstances.

Hyatt Hacienda Del Mar owners your attention is needed

Dear fellow Hyatt Hacienda del Mar owner’s and every Hyatt owner. The Hacienda de Mar in Dorado Puerto Rico is at a critical point and we are needing owners to fight for its onsite amenities and it’s long term survival. If you’re a club owner you can no longer remain silent, today your action...

tugbbs.com

IMO this should be contracted up front so this doesn't happen down the line. That doesn't help the properties already in that situation but would for those going forward.

 

[bobpark56]

That is the new standard for enrolled Marriott weeks. Since enrolled weeks have no exchange fee, you also now don't pay an exchange fee when trading into Vistana properties.

Interesting. So how do MVCI points values match up with StarOptions? We have both. If we want to trade from MVCI to Vistana (or vice versa), just how does this work?

 

[JIMinNC]

Interesting. So how do MVCI points values match up with StarOptions? We have both. If we want to trade from MVCI to Vistana (or vice versa), just how does this work?

You can't trade between MVC and Vistana with points yet. All that has been implemented so far is the week-for-week trading within Interval International that has always been possible, just now with no trade fee for MVC to Vistana or vice versa.

 

[dioxide45]

You can't trade between MVC and Vistana with points yet. All that has been implemented so far is the week-for-week trading within Interval International that has always been possible, just now with no trade fee for MVC to Vistana or vice versa.

To clarify, the vice versa has a discounted exchange fee ($154).

 

[JIMinNC]

To clarify, the vice versa has a discounted exchange fee ($154).

Do Vistana-to-Vistana trades cost $154 as well? If that is the case, then I guess it makes sense to charge the same for a Marriott trade. I assumed Vistana-to-Vistana trades were free like in MVC.

 

[dioxide45]

Do Vistana-to-Vistana trades cost $154 as well? If that is the case, then I guess it makes sense to charge the same for a Marriott trade. I assumed Vistana-to-Vistana trades were free like in MVC.

Yes, $154 fee for Vistana to Marriott. I beleive the discount is $55 for Vistana to Vistana/Marriott exchanges.

 

[GregT]

All,

I don’t have any actionable information here, but posting this speculation to see if this is consistent with what others are hearing.

I am at WKORV now and was walking on the beach walk north and south and walked past my beloved MOC (which remains my preferred Maui spot). There was a rep at the stand and I stopped to ask if there was any news on an integrated product.

He confirmed what we’ve heard (was supposed to be out this year/delayed because of the virus/Marriott owners will be able to book Starwood and vice versa - but not Hyatt).

But the thing he said that was most interesting to me was that Westin was considered a modestly superior product to Marriott - and Sheraton is considered an inferior product to Marriott.

I’ve not stayed in enough Westin properties to know if this is accurate but I believe Westin Kaanapali 2BR is comparable to Lahaina Villas 2BR and Lahaina Villas 3BR is superior to Nanea. Westin 2BR is likely considered superior to MOC.

I will be very curious to see if Westin owners are given attractive election values to entice them to participate (the opposite of skimming) whereas Sheraton owners might get a reduced election value if they want to play.

Interesting - a fair number of Westin owners have the opportunity to utilize StarOptions and may not feel the need to elect for points, so Marriott has that competing interest as well.

Has anyone else heard this view of relative resort quality and do you agree with it?

Best,

Greg

 

[Dean]

Has anyone else heard this view of relative resort quality and do you agree with it?

That is consistent with my take if you take MVC as a whole. I'd put Westin as minimally superior overall but equal if you take the properties I tend to visit. I would look at the Vistana options I've seen as a step below, some 2 steps.

 

[Mroze]

All,

I don’t have any actionable information here, but posting this speculation to see if this is consistent with what others are hearing.

I am at WKORV now and was walking on the beach walk north and south and walked past my beloved MOC (which remains my preferred Maui spot). There was a rep at the stand and I stopped to ask if there was any news on an integrated product.

He confirmed what we’ve heard (was supposed to be out this year/delayed because of the virus/Marriott owners will be able to book Starwood and vice versa - but not Hyatt).

But the thing he said that was most interesting to me was that Westin was considered a modestly superior product to Marriott - and Sheraton is considered an inferior product to Marriott.

I’ve not stayed in enough Westin properties to know if this is accurate but I believe Westin Kaanapali 2BR is comparable to Lahaina Villas 2BR and Lahaina Villas 3BR is superior to Nanea. Westin 2BR is likely considered superior to MOC.

I will be very curious to see if Westin owners are given attractive election values to entice them to participate (the opposite of skimming) whereas Sheraton owners might get a reduced election value if they want to play.

Interesting - a fair number of Westin owners have the opportunity to utilize StarOptions and may not feel the need to elect for points, so Marriott has that competing interest as well.

Has anyone else heard this view of relative resort quality and do you agree with it?

Best,

Greg

In aggregate [not comparing individual properties] I agree about quality in that order.

1. Westin
2. Marriott
3. Sheraton

Its always possible to find a specific property that is slightly better [e.g. Marriott Lahaina V Westin Los Cabos].
Based on my experience across all 3 brands over the last 2 decades, in general I agree with the comment.

 

[needvaca]

In aggregate [not comparing individual properties] I agree about quality in that order.

1. Westin
2. Marriott
3. Sheraton

Its always possible to find a specific property that is slightly better [e.g. Marriott Lahaina V Westin Los Cabos].
Based on my experience across all 3 brands over the last 2 decades, in general I agree with the comment.

I’m a Vistana owner (Westin and Sheraton) and I agree with this ranking. I’ve stayed in 6 MVC resorts and they are great, but not quite as lux as the Westins, especially the kitchens and bathrooms. But I love them all and the different locations, and I bought my first Marriott last year.
I don’t mind if there’s never any overlap, especially if they expect me to pay for it. I just want to keep going to my home resorts, use my Staroptions and occasionally trade in II

 

[mjm1]

Thanks for the update Greg. I agree that it depends on the resort and we prefer MOC Lahaina/Napili to the Westin Maui resorts. I can see where some of the Westin resorts are marginally higher quality than Marriott's. Westin Riverfront over the Marriott resorts in the Vail and surrounding area, WKV over the Marriott in Phoenix come to mind.

Enjoy your time in Maui. We wish we were there too!

Best regards.

Mike

 

[vistana101]

Interesting point...I have always heard that MVC positions Sheraton lower than Marriott Vacation Clubs - certainly the case for many resorts, but not all. Sheraton Vistana Villages is quite comparable to most of the other Marriott Orlando resorts, like Grande Vista, in my opinion. Of course, Lakeshore Reserve is a significant step above, but I think that resort is a step above most. If I had a choice between a Sheraton/Westin/Marriott in most places, I'd likely choose a Westin first (thinking of the large difference in quality between the Westin and Sheraton resorts in Arizona, for example).

One observation that I think is an indication of changes to come: Marriott assigns different point values to resorts in the same locations (i.e. Lakeshore Reserve vs. Grande Vista vs. Harbour Lake all have different point values in Orlando, for example), whereas Starwood/Vistana has rarely done that. Both Sheratons in Orlando require the same amount of points/options, and both the Sheraton and Westin timeshares in Arizona require the same amount of points/options. Not sure that will fly in a combined program.