New Marriott timeshare at Disney?

[dioxide45]

Okay, found this on the Marriott press release regarding the completion of the merger.

Effective today, Marriott’s Board of Directors has increased from 11 to 14 members, with the addition of Bruce Duncan, Chairman, President and CEO of First Industrial Realty Trust, Inc., Eric Hippeau, Partner, Lerer Hippeau Ventures; and Aylwin Lewis, Chairman and CEO of Potbelly Corporation. Messrs. Hippeau and Lewis are also former Starwood board members. Full biographies on each of the three new Board members are available at www.Marriott.com/investor.

 

[SueDonJ]

Aren't both Vistana and MVW both competitors in this arrangement? MVW is a separate company just like ILG. Why would a Marriott managed hotel be able to contract with MVW and not with ILG? The only difference is that ILG/VSE doesn't have Sheraton or Westin in their names. For all other purposes, they are all separate and independent companies. I would expect at some time we will see them all renting out nights at some point on Marriott Internationals reservation platform.

What I'm thinking is that MI is allowing through a contractual arrangement with MVW for its franchisees (hotel owners) to make deals with MVW. Yes, I agree that MI could allow the same with Vistana. But if they don't want non-Marriott branded timeshares to be affiliated with hotels that carry their brands, I think MI has that say-so. I expect that eventually formerly-HOT hotel properties will be available via MI's reservation platform just like MI hotels and MVW timeshares are now, but I still am not understanding how/why Vistana timeshares would get there? (Unless something like what I added to my post #45 happens, making the DC Exchange Company a platform for Vistana?)

Also, I think it would be very hard to have a MVC property on site with a Westin or Sheraton hotel and not somehow use the Sheraton or Westin names in the marketing. I am not saying any of what is being discussed is not possible, I just don't think it is very probable. I would think any such cross branding between MVW and a Westin/Sheraton property or VSE and a Marriott property would meet quick legal challenge.

I guess another thing to consider. What happens if one of the mixed use properties ends up re-branding. Say the Mayflower. It is currently an Autograph Collection. Really just an independent hotel that has a franchise agreement with Marriott International. What if it decided to change flags and become a Westin or Sheraton. I would suspect Marriott International would never let them reflag to either the Westin or Sheraton brands.

I'm getting so confused, I think. MI now owns the Westin and Sheraton hotel brands, don't they? So they get final say over which properties have the right to re-brand to any of the brands under their umbrella, don't they?

If MI allows MVW to do MVC-Pulse or Explorer Collection inventory at any of the Starwood brand hotels, where would the legal challenge come from considering that MI owns those brands?

Look at this default marriott.com page. If the link loads correctly you'll see brand buttons for all Marriott- and Starwood-branded properties (except the Sheraton- and Westin-branded timeshares which are now Vistana/ILG) in between the phrases "Inspiration Times 30" and "Experience Our Unparalleled Collection of Brands." Below that there's a graphic that has the MI logo above all 30 brand logos, illustrating very well the concept of MI being the umbrella covering of all brands. That's what I'm expecting to see at all of the properties eventually, including any that keep any of the Starwood brands. So any MVC-Pulse branding at the properties, while in conflict with any retained Sheraton branding, would still come under the umbrella brand that will probably be prominent. I think?

 

[dioxide45]

If MI allows MVW to do MVC-Pulse or Explorer Collection inventory at any of the Starwood brand hotels, where would the legal challenge come from considering that MI owns those brands?

I think this is where the agreement between Marriott International and Vistana Signature Experiences comes in. A similar agreement of that between MI and VAC.

There would really be nothing on either side preventing one company from wholly acquiring a property from a property owner that was previously branded as Starwood or Marriott and converting that to timeshare. Vistana is currently doing so with four properties; The Westin Cancun Resort & Spa, The Westin Los Cabos Resort Villas & Spa, The Westin Resort & Spa, Puerto Vallarta and The Sheraton Kauai. These four resorts all still carry their respective brands and all but Los Cobos can be booked on SPG.com.

Once the reservation systems are merged, I would expect any property carrying a Marriott International brand to be available to book on what will be Marriott.com. That would go for Westin hotels and their affiliated timeshare properties. Same for the Sheraton properties. Sheraton and Westin timeshares should be able to be booked with cash on Marriott.com if such cash stays are available. Of course, ILG may use other outlets like getaways to rent stays or develop their own internal reservation system for nightly stays. Though the same could happen at VAC.

 

[SueDonJ]

I think this is where the agreement between Marriott International and Vistana Signature Experiences comes in. A similar agreement of that between MI and VAC.

There would really be nothing on either side preventing one company from wholly acquiring a property from a property owner that was previously branded as Starwood or Marriott and converting that to timeshare. Vistana is currently doing so with four properties; The Westin Cancun Resort & Spa, The Westin Los Cabos Resort Villas & Spa, The Westin Resort & Spa, Puerto Vallarta and The Sheraton Kauai. These four resorts all still carry their respective brands and all but Los Cobos can be booked on SPG.com.

Once the reservation systems are merged, I would expect any property carrying a Marriott International brand to be available to book on what will be Marriott.com. That would go for Westin hotels and their affiliated timeshare properties. Same for the Sheraton properties. Sheraton and Westin timeshares should be able to be booked with cash on Marriott.com if such cash stays are available. Of course, ILG may use other outlets like getaways to rent stays or develop their own internal reservation system for nightly stays. Though the same could happen at VAC.

I think we're pretty much on the same page except for one thing, and that might be a matter of me misunderstanding what you're saying. Is this assuming that MI and VSE will eventually come to an agreement similar to the one between MI and MVW? Because everything you're saying makes sense based on that assumption, but if it doesn't come to fruition then I don't understand how the bit about VSE (Sheraton and Westin) timeshare intervals being available on marriott.com would work?

 

[dioxide45]

I think we're pretty much on the same page except for one thing, and that might be a matter of me misunderstanding what you're saying. Is this assuming that MI and VSE will eventually come to an agreement similar to the one between MI and MVW? Because everything you're saying makes sense based on that assumption, but if it doesn't come to fruition then I don't understand how the bit about VSE (Sheraton and Westin) timeshare intervals being available on marriott.com would work?

I think that is where you may be misunderstanding. There is no agreement for MI and VSE to come to, because the agreement already exists. Both VSE and MI became party to the agreement that was previously made internally at Stawood that went in to effect at the time of the spinoff of VSE from Starwood. At that time there was then an agreement between VSE and Starwood regarding the affiliation and licensing of the Sheraton and Westin names to be used for timeshare marketing and VSE properties. That agreement was then acquired by Marriott International when MI acquired Starwood. VSE currently has licensing rights to use the Westin and Sheraton names for timeshare properties (and even some hotel properties). Those licensing rights would also include access to such loyalty program that is affiliated with the brands. Perhaps those more familiar with the agreement can provide more details. VSE is paying a heavy royalty and licencing fee to MI for the ability to use the two brand names just like MVW is paying to MI.

 

[SueDonJ]

I think that is where you may be misunderstanding. There is no agreement for MI and VSE to come to, because the agreement already exists. Both VSE and MI became party to the agreement that was previously made internally at Stawood that went in to effect at the time of the spinoff of VSE from Starwood. At that time there was then an agreement between VSE and Starwood regarding the affiliation and licensing of the Sheraton and Westin names to be used for timeshare marketing and VSE properties. That agreement was then acquired by Marriott International when MI acquired Starwood. VSE currently has licensing rights to use the Westin and Sheraton names for timeshare properties (and even some hotel properties). Those licensing rights would also include access to such loyalty program that is affiliated with the brands. Perhaps those more familiar with the agreement can provide more details. VSE is paying a heavy royalty and licencing fee to MI for the ability to use the two brand names just like MVW is paying to MI.

Hmmmm. I understand that VSE retained the naming rights for Sheraton-branded timeshares when that division was spun off and renamed, and that those rights continued after ILG acquired VSE. I also understand that when MI acquired the Sheraton hotel business it was with the understanding that the acquisition was conditional on those VSE/ILG rights continuing as is. On that we understand each other, as well as with the ramifications for the two loyalty programs.

But when it comes to the two timeshare companies and whatever access there is to them via MI, I think there is a separate agreement between MI and MVW that covers all of the affiliated reservation rights, MVC-Pulse considerations, DC Explorer Club opportunities, etc, that's been in effect since MVW was spun off from MI which was then amended/expanded/extended when the DC was established. Are you saying that in addition to the naming rights contractual agreement that is continuing between VSE/ILG and MI, there is also another agreement similar to the one I think exists between MI and MVW that would allow VSE timeshares to integrate as seamlessly with MI as the MVW timeshares do now? Obviously that's a new thought process for me.

 

[bizaro86]

Some of the terms of the agreement between Starwood (now MI) and VSE (now ILG) were redacted. So although we don't know what they pay for a star point, we know their agreement to buy star point specifically contemplated the merger or replacement of the star points program

VSE will have the right to give out MRP after the programs merge, and will still have exclusive rights to use the Westin and Sheraton names for timeshare marketing.

MVW can't buy those rights from MI, because MI doesn't own them.

 

[dioxide45]

Look at this default marriott.com page. If the link loads correctly you'll see brand buttons for all Marriott- and Starwood-branded properties (except the Sheraton- and Westin-branded timeshares which are now Vistana/ILG) in between the phrases "Inspiration Times 30" and "Experience Our Unparalleled Collection of Brands."

I checked this out. While Vistana Signature Experiences is not a brand within MI. Westin and Sheraton certainly are. Vistana markets these properties under the Westin Vacation Club and Sheraton Vacation Club, but all those properties still carry the Westin and Sheraton names. Those brands are included in the list of brands under the MI umbrella.

But when it comes to the two timeshare companies and whatever access there is to them via MI, I think there is a separate agreement between MI and MVW that covers all of the affiliated reservation rights, MVC-Pulse considerations, DC Explorer Club opportunities, etc, that's been in effect since MVW was spun off from MI which was then amended/expanded/extended when the DC was established. Are you saying that in addition to the naming rights contractual agreement that is continuing between VSE/ILG and MI, there is also another agreement similar to the one I think exists between MI and MVW that would allow VSE timeshares to integrate as seamlessly with MI as the MVW timeshares do now? Obviously that's a new thought process for me.

I don't think there is any such separate agreement outside of the license agreement that was written when MAR spun-off VAC. DC came about before the spin-off, so there was no amendment to be made to the agreement when DC came about. MVC-Pulse is not a brand within MI, at least not listed on the page linked above. Pulse is strictly a brand that Marriott Vacation Club is using to market their city locations. Pulse is different from Explorer. Pulse are properties that VAC actually bought to sell DC points from the inventory. Explorer is just an agreement between the property owner and MVW. I don't think there is any agreement between MVW and MAR that pertains to Explorer Collection options. Those are individual agreements made between MVW and each individual property owner to offer nights to MVC owners using DC points. When a DC owner uses points for an Explorer Collection stay, MVW pays the property owner in cash for the stay and then monetizes the DC points my renting out other available inventory. If the agreement was between MVW and MI for Explorer options, we would see a much bigger program where X number of DC pionts is worth X $ to use toward a hotel stay at any Marriott branded property. That isn't the case. As MVW comes to new agreements with individual property owners, they add the option to the Explorer Collection. I don't think MAR really has much of a say.

Here is the proxy statement relating to the VSE spinoff from HOT. I don't have the time to read thoruhg it all, but there may be some details in there that relate to the agreement between HOT and VSE/ILG that is now between MI and ILG/VSE.