Proposed internal exchange program and restrictions on resale weeks

[Dave M]

... it may give the owners the right to reserve a week and then deposit that exact week - not the one Marriott chooses - to II.

I'm confused. Unlike some other resort chains, Marriott owners have that right today. That's what I always do and - as part of planning for the best exchange possible - is standard advice on this forum: Reserve the best week you can and then deposit that with II.

 

[jancurious]

Dave,
Once again...thank you for providing our forum with this information. I think the news is encouraging (resales being grandfathered) and it's nice to know approximately when to expect this since some of us put in exchange requests over 12 months out.

I think we will all be anxiously awaiting more details to find out how we can best tweak the new system to get the most value from our weeks.

Jan

 

[Hoc]

Marriott obviously isn’t thinking about the best interests of its customers or their legal rights.

That is a kind of shocking statement, coming from a retired attorney. For at least the past five years, it has been painfully obvious that Marriott never thinks about the best interests of its customers or their legal rights, except for how to get around them if necessary to maximize Marriott's profit.

I keep warning people out there: Do not think of Marriott as a beneficent uncle, waiting to make your life better. Marriott is a business, and an extremely avaricious one, at that. You own a Marriott timeshare because it gets you where you want to go, or because you like the timeshare you own for traveling. But if you are relying on Marriott's generosity, you will always be sorely disappointed.

 

[timeos2]

I'm confused. Unlike some other resort chains, Marriott owners have that right today. That's what I always do and - as part of planning for the best exchange possible - is standard advice on this forum: Reserve the best week you can and then deposit that with II.

Dave - If that is the way it works now, a rarity in most larger systems, then the process already gets that advantage. The only worry would be that Marriott might adopt the more restrictive approach of DVC/Wastegate and others that make the owners accept whatever week the management decides to place with II - not the week the owner requests, which could hurt trade power.

One thing for sure. Any change gets people worked up as there are always new winners and new losers compared to the way things are now. Most judge the value of a change by which side their ownership falls on.

 

[Hoc]

If I had to guess how Marriott will devalue resales in the future, and given what I have seen from Marriott in the past, this is the most likely scenario: Everyone who owns now will be allowed to participate in the new internal trading system (eventually paying an exchange fee that gradually rises). However, buyers who purchase resale after the implementation of the internal trading system date will have to pay a higher fee to trade internally.

Only a guess, but it's based on what I've seen from Marriott over the past few years.

 

[ciscogizmo1]

Let's say that a Marriott owner exchanges out for a Four Seasons week. A deposit needs to be made into II.

Then later, another Marriott owner who made a deposit with II sees a Marriott exchange and makes it.

This is exactly why I'm not for an internal trade system. I do this all the time. I say let's try a new resort and then, I see a Marriott that looks better. I've traded outside of Marriott 3 times out of my 7 exchanges. I think an internal system would limit our choices of resorts.

 

[Hoc]

I wonder if it's a good idea to get rid of all Marriott weeks now?

Depends on whether or not existing resale owners will be grandfathered in or not. If not, then you might consider getting rid of your resales. If you will be grandfathered in, it would be foolish to get rid of your resales, because you could only get them back with the same benefits if you repurchased from Marriott at triple the price.

When I decided that I did not like the situation at Streamside, I sold my Aspen unit a few months before their resale value went into the toilet. (The person who bought it has since become a fairly active tugger, and he is actually quite happy with the purchase because of the condition of the unit. I, on the other hand, am happy I sold.) At the time I sold it, I did not know about all of the huge annual fees and special assessments that were coming down the pike, but I sure am glad that I got out of it before they did.

The resale value of the unit is now almost nothing, so I am glad I got out. But it will probably go back up again in a couple of years, and as long as the new owner gets good use out of it in the interim, he really should not care about resale value.

So, should you sell now? It depends on your circumstances, your need for the unit, and what Marriott does with existing resale owners. All are in flux, and anything could happen.

 

[Lawlar]

Possible Restrictions Resale Purchasers

That is a kind of shocking statement, coming from a retired attorney. For at least the past five years, it has been painfully obvious that Marriott never thinks about the best interests of its customers or their legal rights, except for how to get around them if necessary to maximize Marriott's profit.

Even lawyers, retired or not, can engage in occasional folly. For now, I am hoping for the best from Marriott. I’ve enjoyed their hotels for many years and I enjoyed my recent stay at Timber Lodge.

The high pressure sales tactics of their salespeople leaves a lot to be desired. But I’m optimistic (though watchful) that in the long term my relationship with Marriott will be positive.

I just reread Marriott’s Disclosure Statement for MOC and my deed. The Disclosure Statement contains language only a lawyer could enjoy reading. Nevertheless, the document makes clear that “owners” (which include those who purchase at resale) have the right to reserve their dates 12 months in advance (multiple owners can do it 13 months in advance). There is no language to indicate that Marriott can unilaterally change that right.

The Disclosure Statement does provide, in bold print, that Marriott can restrict participation in its rewards programs to the original owners who purchased through Marriott (and their heirs). There is no similar warning with respect to changing the rights of resale owners to select occupancy dates.

I don’t want to see Marriott do anything that would harm the long-term value of TSs. Restricting the rights of those who purchase at resale will lower the value of TSs. That is in no one’s best interest.

[I am glad that I purchased a fixed unit.]

 

[Carmel85]

dave,

Thank you for the info about Marriott. Any new info about II and other Hotel timeshares exchanges like Hyatt,Starwood,Hilton or DVC?

 

[Pit]

Grandfathering current resale owners will not protect them from devaluation. If resale weeks are devalued, then all resales are devalued. The resale week you now own will drop in value if reservation and/or exchange restrictions are put in place.

So, it could very well make sense to sell out before the devaluation, but there is too little known about these pending changes to make an informed decision now.

Marriott could implement an internal exchange system similar to SVN, in which case float owners exchanging through II would lose the ability to chose the deposited week. Still, there is no shortage of Starwood properties in II inventory. There are plenty of owners exchanging out of the Starwood system, despite an internal exchange system. I would expect that to hold true for Marriott as well.

 

[ciscogizmo1]

Marriott could implement an internal exchange system similar to SVN, in which case float owners exchanging through II would lose the ability to chose the deposited week. Still, there is no shortage of Starwood properties in II inventory. There are plenty of owners exchanging out of the Starwood system, despite an internal exchange system. I would expect that to hold true for Marriott as well.

One thing I like about the Marriott system over SVN is that you can trade at 12 months. With SVN the earliest you can trade internally is 8 months. I know that is fine for a lot of people but not for those with airfare miles. It would be hard for me to use my frequent flyer miles at 8 months. So, I'd really be disappointed if Marriott went this route. I own a Westin and I don't like their internal trading. I've gotten better trades with Marriott with less stress..

 

[timeos2]

Grandfathering current resale owners will not protect them from devaluation. If resale weeks are devalued, then all resales are devalued. The resale week you now own will drop in value if reservation and/or exchange restrictions are put in place.

And whats Grandfathered in can later be unceremoniously booted out. Ask the Wyndham resale buyers who were VIP & grandfathered in only to get a letter this year stating that going forward they are just more dirt - er, standard owners since they dared to buy sensibly at resale. The only thing you buy are the base rights. Those cannot be changed (or at least can be challenged as illegal moves by a corrupt management/developer). All the perks, non-disclosure items can and most likely will be changed or lost over time so never pay a premium to get those.

 

[Steve]

I think the most likely restriction on new resale buyers, if there is one, would be that future resale buyers might not be allowed to participate in the internal exchange system. If a Marriott owner who bought resale wants to trade into another Marriott, then they will have to use II. They can still make the trade, but not through Marriott. So they will have fewer Marriott weeks to choose from and won't have priority.

This is what Four Seasons does. Resale owners can still exchange their Four Seasons week into another Four Seasons week...but they have to go through II. They can't trade directly through Four Seasons. Owners who buy through Four Seasons (or an approved reseller) have a choice. They can exchange directly through Four Seasons or they can exchange from one Four Seasons to another (or to any other II resort) through II.

This makes sense to me. It creates a definite incentive to buy through the developer. But it still allows buyers who buy resale a chance to exchange to another Marriott...they just have to do so externally. So there should not be a collapse of the value of resale weeks. I think this type of policy would create a good balance.

On the other hand, I can't imagine Marriott completely prohibiting Marriott owners from exchanging into other Marriotts through a block in II. I also can't imagine them giving reservation preferences at an owner's home resort to those who buy from the developer as this would certainly lead to lawsuits. Time will tell, and it will be fun to watch.

Steve

 

[CMF]

Steve is on to something.

There is nothing to prevent Marriott from giving a new benefit to direct sales buyers and denying the benefit to resale buyers. Resale buyers can't complain that they did not get something they never bargained for. This can still be detrimental to resale buyers if, for instance, the majority of direct buyers move into a system [taking their weeks with then] that the resale buyers can not participate in.

Charles

 

[CMF]

More

.. . . . Direct buyers would have access to all the weeks deposited with Marriott and resale buyers would only have the scraps deposited with II. The problem can be compounded if the other majors follow suit. And, even worse if the majors contract with II to block exchanges between their weeks.

This is a nightmare scenario for resale buyers.

Charles

 

[tombo]

I want to go to a Marriott sales presentation soon and have a salesman tell me that resales will have limited benefits in the future. I want him to tell me how smart I am to buy from marriott because anyone who buys resale will not get the same benefits (ie anyone I sell my high dollar purchase to). I will look him in the eye and ask him if I look so stupid that I want to buy something that I am being told in advance will be devalued by the resort costing me a lot of money and making it harder to sell if I ever want to or need to. I can't imagine buying any high ticket item after being told by the salesman that the seller is going to activelly try to make my purchase less valuable in the future!!

What a win for Marriott. They devalue weeks purchased from them by limiting how far in advance a reservation can be made if purchased resale and limiting internal trades. Then they ROFR the really low resale offers they created by devaluing resales. Now Marriott gets to sell the weeks they stole using ROFR for 10's of thousands of dollars with all the developer's rights included that weren't included when the poor previous owner took a bath trying to resell his week that Marriott sold him. Genius. Corporate greed at it's finest.

Obviously new Marriott customers are also looking to buy Automobiles that can be serviced Mon-Sat if purchased from the dealership, but can only get serviced on Tuesdays and Thursdays every other week if sold to someone else by you after you purchase it from the dealership. They must also looking to buy land with lake priviledges, that loses the lake priviledges if it is resold. I am sure that anyone the land is sold to won't care that they don't get the same benefits as their neighbors. We want computers that only get the internet if purchased from Dell, but if resold no internet, but they will still play video games.

Heck Marriott is tapping a whole new market of customers wanting to pay top dollar for something that will be almost useless if resold. I am sure other companies will not follow suit as people will not be treated that way and become repeat customers. My only Marriott is now for sale before the prices drop and I will not buy another Marriott ever again. Trick me once shame on Marriott, trick me twice shame on me!!

 

[JimIg23]

When we talk to grandfathering in resales, would that allow the current resale owners to have the right to use the internal trading system?

Also, What are people thoughts about the lenght of time Marriott will allow a deposit to exchange? In my case, I was looking for another EOY even so I can get the 13 month reservation, but I plan on depositing my cheaper week into II and trade for the following odd year. Do people think that the new system may make you trade in the same year? If so, I would rather buy an odd EOY now instead.

 

[CMF]

Educated consumers.

I want to go to a Marriott sales presentation soon and have a salesman tell me that resales will have limited benefits in the future. I want him to tell me how smart I am to buy from marriott because anyone who buys resale will not get the same benefits (ie anyone I sell my high dollar purchase to). I will look him in the eye and ask him if I look so stupid that I want to buy something that I am being told in advance will be devalued by the resort costing me a lot of money and making it harder to sell if I ever want to or need to. I can't imagine buying any high ticket item after being told by the salesman that the seller is going to activelly try to make my purchase less valuable in the future!!

What a win for Marriott. They devalue weeks purchased from them by limiting how far in advance a reservation can be made if purchased resale and limiting internal trades. Then they ROFR the really low resale offers they created by devaluing resales. Now Marriott gets to sell the weeks they stole using ROFR for 10's of thousands of dollars with all the developer's rights included that weren't included when the poor previous owner took a bath trying to resell his week that Marriott sold him. Genius. Corporate greed at it's finest.

Obviously new Marriott customers are also looking to buy Automobiles that can be serviced Mon-Sat if purchased from the dealership, but can only get serviced on Tuesdays and Thursdays every other week if sold to someone else by you after you purchase it from the dealership. They must also looking to buy land with lake priviledges, that loses the lake priviledges if it is resold. I am sure that anyone the land is sold to won't care that they don't get the same benefits as their neighbors. We want computers that only get the internet if purchased from Dell, but if resold no internet, but they will still play video games.

Heck Marriott is tapping a whole new market of customers wanting to pay top dollar for something that will be almost useless if resold. I am sure other companies will not follow suit as people will not be treated that way and become repeat customers. My only Marriott is now for sale before the prices drop and I will not buy another Marriott ever again. Trick me once shame on Marriott, trick me twice shame on me!!

But most folks will still buy from Marriott because they won't know to ask these questions. They'll be wowed with pictures of beautiful resorts and promises and sign on the doted line.

I'd like to know how many Marriott owners are resale buyers? Is it 7%?

Charles

 

[cp73]

Internal Exchanges
Grandfathering? Yes, Marriott plans to grandfather all owners, presumably as of the date the change is announced or implemented.

This is interesting and I am glad to see it. All previous buyers/owners will be treated the same. No special treatment to Marriott buyers in the past. Your deal is over. Both groups will pay fees. Only future new buyers will be incentivized in this deal to purchase directly from Marriott. Maybe their annual fees will be free, or how about free trading. It will be factored into the future purchase prices, not the purchases that you or I made. I guess they decided the points weren't enough. But we all knew that.

I think this can only be good for us. Now we will have a choice of systems to trade through (Marriott & II). I dont expect II to stand still and let Marriott take all their business. There are approximately 650,000 Marriott timeshare owners out there now today. We will not be forgotten.

Also I haven't read on this board many complaints about II.

 

[dioxide45]

.. .And, even worse if the majors contract with II to block exchanges between their weeks.

This is a nightmare scenario for resale buyers.

Charles

I don't see any benefit for II do contract with the majors to do this. Remember, II is a business that needs to offer a service. If they don't offer a service of value, then they don't make any money. Ultimatly II could start their own trading preference among brands, much like they have today for Marriott. They could say that those with Marriott can have a preference of 3 days over the other non Marriott's, similar to today. The same for the other majors. This would entice people to trade their weeks back in to II rather than with their resort chains.

 

[Pit]

They could say that those with Marriott can have a preference of 3 days over the other non Marriott's, similar to today. The same for the other majors. This would entice people to trade their weeks back in to II rather than with their resort chains.

Well, except for those that own non-majors.

It seems likely that II will get the leftovers from the internal system, similar to their relationship with SVN. But, there will be plenty of nice leftovers. It does Marriott no good to let units sit empty -- that represents lost revenue and a lost opportunity to sell. I don't see any benefit for Marriott to block II trades.

 

[Pit]

When we talk to grandfathering in resales, would that allow the current resale owners to have the right to use the internal trading system?

Yes, according to the information Dave posted. Should you decide to sell, the right to use the internal system does not transfer, thereby devaluing your ownership interest. This is similar to the way SVN operates at their so called "voluntary" resorts.

 

[bobcat]

The easiest for Marriott to stop it would be for Marriott to terminate its relationship with II, something it doesn't plan to do.

However, it’s possible that Marriott could put a block in its agreement with II that would prevent a Marriott owner from exchanging his/her Marriott into another Marriott through II. That would merely be an extension of a variety of blocking agreements that II currently has with numerous resort chains. I have no idea whether Marriott contemplates doing that.

We were at HH in Sept. Went on a tour of Surfwatch. Salesman said changes will be made to their system. He said ,right now if you called Marriott they could tell you if you purchased resales. A letter is placed next to your name. I never heard of this. We own a Marriott on HH resale. He went into reasons why we should have purchased from Marriott. We would not buy his reasons to pay alot more .

 

[dlpearson]

He said ,right now if you called Marriott they could tell you if you purchased resales. A letter is placed next to your name. I never heard of this.

That's true. In the Marriott system there is an "R" next to your week/name if you bought resale. I'm not sure if II gets that info (and if they do, they currently don't care).

I had a couple of Marriott sales people tell me this over the years, and I saw it firsthand when we took a tour in Boston a few months ago. The sales rep looked up our existing info (we have 1 developer, 1 resale week) and he could tell me which we bought from Marriott and which we bought resale.

David

 

[Dave M]

He said ,right now if you called Marriott they could tell you if you purchased resales. A letter is placed next to your name. I never heard of this.

That is correct and has been discussed here previously. That's how Marriott can determine that, if you are a resale owner, you aren't eligible to trade the use of your week for Marriott Rewards points.