New rules on upgrading resales !!!

[James1975NY]

Starwood is not really building new resorts, once they sell out of what they are building what are they going to sell ?. Also I understand increasing the retro prices, but what difference does it make for them how much they will give you back on your unit. Example now you would buy 2 cheap units on Ebay with one you would do the upgrade and the other one they retro. With the new way you would buy one unit on Ebay and one unit from Sheraton and have the ebay retro'd in to the system. Is my way of thinking wrong ?

I agree. Starwood should not focus on what you paid for the villa if you purchased on the secondary market....after all, they already sold it once before it hit the secondary market. Why would they shut the door on new business because the buyer will not get full credit for what Starwood originally sold it for.

 

[jerseygirl]

Why would they shut the door on new business because the buyer will not get full credit for what Starwood originally sold it for.

Because they're even more greedy than the average corporation (I work for a much larger corporation and we're greedy too -- but, compared to Starwood, we look like a charitable foundation!).

They can calculate their "additional" revenue when they make the policies more restrictive .... sit around, pat each other on the back, eat oranges, etc. But, they can't calculate what they're losing. My very first TS purchase was a Vistana Resort (resale). Since then, I've spent many tens of thousands of dollars on other mini-systems because I won't give in to their games (well, except for my WSJ poolhouse villa -- but they'll never profit from it via an SVN exchange or SO conversion --- so I forgive myself that one transgression!).

 

[pathways25]

I agree. Starwood should not focus on what you paid for the villa if you purchased on the secondary market....after all, they already sold it once before it hit the secondary market. Why would they shut the door on new business because the buyer will not get full credit for what Starwood originally sold it for.

Although this new policy is bad for us, it does seem to make a lot of sense. After all, what you're doing with an upgrade at full original sale value is that you're essentially getting Starwood to buy back the resale at full face value and absorb the depreciation. It's just like trading in your 3 year old BMW for this year's model but getting the full purchase price as credit on your trade.

You could say that a "used" timeshare shouldn't lose value like a used car, but Starwood will have to resell your trade and bear the heavy sales expense again.

 

[Garnet]

Don't most resale purchasers buy to go, not trade?

Hmmm...we purchased our (resale) WMH week to go there-not trade. We did NOT purchase because a salesperson talked up what a great place it is...PLUS all these other great places to trade EASILY into. (Hawaii, St. John, Florida...)

Don't most resale purchasers buy to go to that home resort? After all, they purchased knowing that they were not participating in (or currently getting) the options thing.

If we were offered to "join" the Starwood network, I doubt we would use it that often. Living in Nor. Cal. with 3 kids, I'm not sure I can afford to fly regularly to other Starwood resort locations even if I wanted to! Joining the Starwood network would be icing...but we really bought for the cake.

 

[Troopers]

Although this new policy is bad for us, it does seem to make a lot of sense. After all, what you're doing with an upgrade at full original sale value is that you're essentially getting Starwood to buy back the resale at full face value and absorb the depreciation. It's just like trading in your 3 year old BMW for this year's model but getting the full purchase price as credit on your trade.

You could say that a "used" timeshare shouldn't lose value like a used car, but Starwood will have to resell your trade and bear the heavy sales expense again.

I too think it makes a lot of sense although your analogy isn't quite right to me. Starwood sells every week, even a buy back week, as a new pricing levels. Whereas a 3 yr old BMW bought back can't be resold as if it was new.

My guess is that Starwood is now losing money when a week is upgraded. Here's why:

1. Starwood's inventory gets diluted. An upgrade results in a +1 low demand week and -1 high demand week (and $10k to ~$20k).

2. They will incur costs (spend, discount, write off, etc) to sell/get rid of the low demand week and burn through the monies earned from the upgrade transaction. This is magnified with no new properties (high demand weeks).

3. Upgrades are usually performed with a retro (this may not be the case but I don't think so). The retro costs Starwood money.

I think they would be better off selling the high demand week than they would have if they had not upgraded the low demand week.

 

[DeniseM]

Don't most resale purchasers buy to go to that home resort? After all, they purchased knowing that they were not participating in (or currently getting) the options thing.

Not necessarily, don't forget that resale owners still get the Starwood priority in II, so you can exchange an inexpensive, voluntary, resale, 1 bdm. for a 2 bdm. at WKORV or WPORV, or another of the expensive mandatory resorts.

 

[DavidnRobin]

Don't most resale purchasers buy to go to that home resort? After all, they purchased knowing that they were not participating in (or currently getting) the options thing.

Not necessarily - do not forget that resale Mandatory resorts can use SVN (and pay a SVN fee). We exchanged a resale WKV week for a WKORV week.

 

[silkey21]

Although this new policy is bad for us, it does seem to make a lot of sense. After all, what you're doing with an upgrade at full original sale value is that you're essentially getting Starwood to buy back the resale at full face value and absorb the depreciation. It's just like trading in your 3 year old BMW for this year's model but getting the full purchase price as credit on your trade.

You could say that a "used" timeshare shouldn't lose value like a used car, but Starwood will have to resell your trade and bear the heavy sales expense again.

If Starwood cared about values and resales all they would need to do is to exercise the right of refusal. I recently bought a SDO one bedroom small plat. season (1-21 and 51&52) on ebay for $52 (I just retro'd the unit) the original owner paid $17k. This unit was in the SVO system all they needed to do was pay $52. So Starwood pays all this attention and like someone said they have people watching these chatboards-- why not just repurchase some of the units ?. We try to stay everyyear at SVV and we go on these tours and they try to sell us the 81k options and when people say no they say well buy EOY or 67k options. If they could rebuy these units cheap they would be able to resell them and make alot of money. Another question when they put units for the Villas and the old Vistana into SVO does not that dilute our Staroptions ie making them less available for us.

 

[SDKath]

Because they can't sell it once they have exercised ROFR. They already have a huge inventory of unsold TS weeks. Why would they build up even a larger inventory -- especially at places where there are no more active sales (like SDO)? It would not be smart on their part to keep buying back every single week that is selling for under $100 (which seems to be most of the Sheraton weeks!) and getting stuck eating the MFs for all these units...

K

 

[DavidnRobin]

and yet we have a 'report' here that stated that SVO did excercise their ROFR at SDO - you would think that for $52 they would have done here also - but I did not give credence to the ROFR report here... (IMO)

 

[silkey21]

Because they can't sell it once they have exercised ROFR. They already have a huge inventory of unsold TS weeks. Why would they build up even a larger inventory -- especially at places where there are no more active sales (like SDO)? It would not be smart on their part to keep buying back every single week that is selling for under $100 (which seems to be most of the Sheraton weeks!) and getting stuck eating the MFs for all these units...

K

So why not have active sales in some of the older places like Vistana or SDO. Also if they have so many unsold TimeShares then they would not care about upgrading and they would not restrict upgrades like people are saying on this board.

 

[Troopers]

If Starwood cared about values and resales all they would need to do is to exercise the right of refusal.

I bet we're going to see Starwood exercise their ROFR.

 

[Troopers]

So why not have active sales in some of the older places like Vistana or SDO.

Here's my guess...before the market collapsed, there wasn't a steady supply of "cheap" resale weeks. It didn't make sense for Starwood to have active sales at soldout resorts for a limited supply of ROFR weeks. It would cost too much money to support the sales and to purchase ROFR weeks. But now, resale weeks are cheap and plentiful.

Also if they have so many unsold TimeShares then they would not care about upgrading and they would not restrict upgrades like people are saying on this board.

See my post #55.

 

[silkey21]

Here's my guess...before the market collapsed, there wasn't a steady supply of "cheap" resale weeks. It didn't make sense for Starwood to have active sales at soldout resorts for a limited supply of ROFR weeks. It would cost too much money to support the sales and to purchase ROFR weeks. But now, resale weeks are cheap and plentiful.



See my post #55.

Your are correct...... but when you go to Marriott and go on a tour there were plenty of times where the salesperson said they could get us in the system more cheaply and offering us different timeshare options then buying the timeshare property that we toured.
Starwood could do the same.... I guess it is what it is and owners would need to make the best of it..... I hope the mandatory places like SVV and WKV go up in value from distressed prices that we are seeing on Ebay.

 

[rickandcindy23]

I bet we're going to see Starwood exercise their ROFR.

Seriously? Are you talking about the new resorts, or are you taking about resorts that were originally Embassy, like SDO and SBP? The units I have purchased at both of those resorts were not Sheraton when the original owners bought. Why would they have any ROFR on those?

This goes right back to PAHIO's insistence of ROFR on weeks that never had that written into the contract. They added it in July of 2005, then they tried to buffalo people into a phony ROFR, and it worked, because they stopped many eBay sales.

If Embassy had it, then I suppose it transferred to Sheraton, but they need to prove they had it, and I don't know where I would look for it. I sure don't have any bylaws or declarations for either resort.

Even if they did this at some time, I think they would hesitate in this economy, as Marriott has not been exercising their legitimate ROFR.

 

[Troopers]

Seriously? Are you talking about the new resorts, or are you taking about resorts that were originally Embassy, like SDO and SBP? The units I have purchased at both of those resorts were not Sheraton when the original owners bought. Why would they have any ROFR on those?

Yup. I think we'll see a general trend where Starwood exercises their ROFR. If Starwood lacks ROFR at weeks/units as you described, then of course they won't/can't excercise ROFR. If they can, I think we'll start to see them do it.

 

[Patty]

What does "mandatory" and "voluntary" mean for these resorts?

 

[tlpnet]

and yet we have a 'report' here that stated that SVO did excercise their ROFR at SDO - you would think that for $52 they would have done here also - but I did not give credence to the ROFR report here... (IMO)

David - I also did not give credence to the ROFR report here. Because the ROFR poster really wanted the unit she had purchased, and I had a little experience dealing with the ROFR dept at Starwood, I PM'ed the poster and we PM'ed back and forth. I firmly believe that in this case (Platinum Week at WMH) that they definitely did exercise ROFR in this one case.

This has been the only recent report of ROFR exercised, but it gives me hope that maybe this IS a random smart move on Starwood's part. Maybe we will see it happen more.

-tim

 

[Captron]

I know for the Point at Poipu, which was also a Embassy resort, they did have ROFR. I would have to dig up my old docs for Embassy MB to check there, but I believe they did there too. I would believe it would be stated as the developer having ROFR, so I would think that ROFR would transfer with the sale.

 

[SDKath]

I am sorry but I don't get it. Why would they start exercising ROFR again??? Even Marriott, which had a VERY strict ROFR policy all these years, stopped exercising them about 6 months ago! They too have way too much inventory (my guess) to make it viable for them to buy back every cheap sale. I just don't understand why one would think that in a really bad economy with minimal TS sales possible, a company would actively want to increase their inventory (and costs) just to keep $52 TSs from being on the market?!

K

 

[calgarygary]

What does "mandatory" and "voluntary" mean for these resorts?

Patty, if you visit the FAQ at the top of this forum, you will get a great primer in Starwood. Basically, there a few resorts that when ownership transfers, membership in SVN transfers with the ownership (mandatory) and thus the resale buyers have the opportunity to use staroptions to trade into other SVN resorts. The voluntary resorts (all new resorts/developments seem to be voluntary) mean that membership with SVN does not transfer when the original owner sells. Resale buyers of voluntary resorts can not participate in SVN unless they go to the expense of retro'ing their voluntary resort. Mandatory resorts have a much higher resale value than voluntary all things being equal because of the value of trading within SVN.

 

[calgarygary]

It is a no brainer, Starwood will not start exercising rofr in great numbers as they need the mf to be paid by owners. Take a look at Starwood's 1st qtr. results, operating income is down almost 60% for Starwood as a whole while revenue from timeshare sales alone is down 51.3%. Where is the income to increase rofr by anything other than a marginal amount.

 

[golfpro60]

I am sorry but I don't get it. Why would they start exercising ROFR again??? Even Marriott, which had a VERY strict ROFR policy all these years, stopped exercising them about 6 months ago! They too have way too much inventory (my guess) to make it viable for them to buy back every cheap sale. I just don't understand why one would think that in a really bad economy with minimal TS sales possible, a company would actively want to increase their inventory (and costs) just to keep $52 TSs from being on the market?!

K

A SVV 2BR/2BA UNIT, ANNUAL,1-52 FLOAT SOLD FOR $1 + CLOSING COSTS, WHY IS THIS NOT A GREAT DEAL? I'm new to TS ownership. Thanks

 

[LisaRex]

A SVV 2BR/2BA UNIT, ANNUAL,1-52 FLOAT SOLD FOR $1 + CLOSING COSTS, WHY IS THIS NOT A GREAT DEAL? I'm new to TS ownership. Thanks

2 reasons:

1) It may be located in one of the SVV sections that are currently undergoing refurbishment. So $1 is actually $2500 or so.

2) Most weeks you can book a week at SVV/SVR via II Getaways for less than you'll pay in MFs.

 

[Politico]

2 reasons:

1) It may be located in one of the SVV sections that are currently undergoing refurbishment. So $1 is actually $2500 or so.

2) Most weeks you can book a week at SVV/SVR via II Getaways for less than you'll pay in MFs.

I've never heard of an SVV 1-52 float. What section is this?