Sources of inventory

[puckmanfl]

good morning...


I knew this would get a juicy debate going....

I don't have a lick of legal training, but I do know the following. As of 6/20/10 MVCD is running a "competing" exchange company with II. If two competing entities in the same business combine to affect prices or supply of a product, I believe that is an anti trust violation.

If it can be proven that MVCD is in any way shape or form using its status to "jump the line" in II exchanges in order to provide inventory for a competing business it would be dicey...

Let me use this as an example. Perhaps MVCD snags a ski week in park City from II. In return, they give up a Koolina week from the Trustr. On the surface, this is a legitamit like/like exchange. However, what happens next ain't so kosher.

MVCD will then give that unit to a points customer. This transaction may be considered an exchange (for points) or a rental (currency is points). This violates the II policy on reexchange or rental of exchange units. IOW, if I re exchange (thru ownerstrade.com or redweek.com) a unit snagged thru II, I could be "booted" out of II. II exchange units as per II bylaws and membership code are for personal usage. Even if MVCD is doing like/like trades to snag inventory, the units they snag from II (owner deposits) are being used for comercial use (re-exchange or rental).

I have no proof that any of this is going on, but in the FAQ part of the DC website, it is specifically stated that inventory for points exchanges comes from II...

please don't get me wrong. I love the points flexibility and thrilled that there is availability in the exchange company but I do believe it is coming at a price to Legacy owners that want to play the old way....

just sayin'

 

[hotcoffee]

. . . It probably isn't likely that the MVD Exchange Company is doing direct exchanges with II. If it is, that would likely boarder on anti trust.

I'm sure the lawyers gave their blessing to however they set up the relationship. I've heard that they have already affected trades between them. So, however they handled the legalities, it has already been done.

 

[wof45]

I don't believe there is any way that the DC could fall under anti-trust legislation. There is no monopoly, and no discrimination in pricing. The same product is offered to any buyers at stated prices. In fact, Marriott uses II as its supplier including a corporate II account.

 

[puckmanfl]

good afternoon

just a few comments on the last few posts...

#1 I believe that I watch way too much law and Order!!!

#2 just because a corporation does something, doesn't mean it is legal!!!

#3 If the individual II customer used an II snagged unit for commercial use (re-exchange or rental) it would be considered against policy. MVCD is not using the supply of units for II for personal use and occupancy. This appears to be a violation of by laws.

#4 I believe that II has a fiduciary (Law and Order again) responsibility to provide equitable trades for "personal" use for its members

#5 High end Time share owners (Marritt, Disney etc) would make an incredibly unsympathetic plaintiff in any legal action. Don't think any jury would remotely care that poor old puckman can't get a ski week!!!

I am now done with this...just wanted to stir the pot a bit...

 

[SueDonJ]

A previous thread discussed the implications of the changes in T&C that were sent out for many resorts in November. Several included the following:

'The Management Company reserves the right, in its sole discretion, to cancel all of a Multi-Interest Owner's reserved usage for a given usage year if such Multi-Interest Owner cancels less than all usage which was reserved more than twelve(12) months in advance."

I think this raises the question regarding whether weeks reserved 13 mo. in advance can be deposited for II exchange without fear of cancellation by MVC due to violation of T&C. If depositing a week reserved 13+mos violates MVC T&C, how can Marriott rely on this as a source of inventory from II? I guess they can legally cancel these reservations for violating T&C, and then confiscate them for use in DC inventory.

Has anyone had any recent experiences regarding depositing 13 mo. advance reserved weeks for exchange?

Yeah, I've been waiting to see if the same notice is sent to Owners at resorts that didn't send them out in that first round, and to see if Marriott starts enforcing the new cancellation penalties that they've written. I said in that thread that I'm not volunteering to be a guinea pig for the new rule - losing an entire year's worth of reservations is too steep a price!

(Here's that thread if anyone's interested ...)

 

[GregT]

All,

Interesting comments -- and the speculation (including from me) may never be proven or disproven.

I believe Marriott and II could easily have agreed to a clause in their recent amendment (April 2010?) that lets Marriott "jump the line".

Marriott could argue that 13-month reservations were only intended for personal occupancy and not for II deposit, and therefore they aren't harming the Marriott week owner by jumping the line to reclaim the deposit.

Marriott could actually argue they are benefiting their existing Marriott week owner by not canceling the reservation, but letting them keep the deposit credit they received from II. Therefore Marriott can argue they are acting in the best interest of their existing week owner by not taking the punitive action that they could have.

II can argue that the amended terms are in the best interest of their customer base AND their shareholder base because it was a requirement to renew the Marriott agreement with this jump the line feature. II can argue that Marriott is still providing a valuable week in exchange for the 13 month ressie that it exchanged (maybe Marriott gives II a week with 9 months to go, still a valuable week). And also that Marriott promised to give more of something in exchange (maybe XX bulk deposits or FlexChanges) that will result in more exchange fees for II stockholders, and more weeks to choose from for the II customer base.

All conjecture on my part -- but I am confident that if Marriott and II wanted to agree to something like this, they could.

I do not know if this is the actual mechanism -- what I do know is that there is still 13 month inventory for Aruba in the DClub, and II is dry.

And I still can't figure out a credible alternative for such a quantity of inventory to be available, other than from II.

What will disprove my theory is if someone gets an exchange from II right after the 13 month reservation -- and the week that they received is a prime week that Marriott would have wanted and doesn't exist in the Trust.

For example, if in June 2011, someone gets confirmed by II into a July 2012 SurfWatch or Grand Ocean reservation, that would be a serious blow to my theory. I'm sure there are other similar situations of no Trust inventory/high TDI weeks, but that's one that comes to mind.

I appreciate all the comments and theories --

Best to all,

Greg

 

[wof45]

I can't comment on what MVC is actually doing, but they have the mechanism in place to make this happen.

An owner can make a 13 month reservation
That reservation can be deposited in II
The deposit goes into MVC inventory for 3 weeks
DC can trade an equivalent DC deposit (from a bulk deposit) in II for the 13 month week
DC would now own the 13 month week

is this happening, or is MVC just being very inept in its trading systems?

 

[Superchief]

All,

Interesting comments -- and the speculation (including from me) may never be proven or disproven.

Marriott could argue that 13-month reservations were only intended for personal occupancy and not for II deposit, and therefore they aren't harming the Marriott week owner by jumping the line to reclaim the deposit.

Marriott could actually argue they are benefiting their existing Marriott week owner by not canceling the reservation, but letting them keep the deposit credit they received from II. Therefore Marriott can argue they are acting in the best interest of their existing week owner by not taking the punitive action that they could have.

Greg

This is interesting speculation. The existing week owner would also 'benefit' by not having all of their reservations cancelled due to 'violation' to the new T&C. Perhaps Marriott modified the T&C's related to the 13 mo reservations to protect themselves if they are, in fact, jumping the line to grab prime weeks from II at 13 mo. It would not surprise me.

 

[wof45]

This is interesting speculation. The existing week owner would also 'benefit' by not having all of their reservations cancelled due to 'violation' to the new T&C. Perhaps Marriott modified the T&C's related to the 13 mo reservations to protect themselves if they are, in fact, jumping the line to grab prime weeks from II at 13 mo. It would not surprise me.

We know there is what I would consider unethical behavior already in the 13 month reservations. for example, people who reserve a 13 month week 50 so that they can also reserve week 51 and week 52. And then later go in and cancel the week 50 reservation.

I 'm not arguing about how the reservations are used, but it seems to me that if the first week is canceled, the other weeks should also be canceled.

 

[hotcoffee]

#3 If the individual II customer used an II snagged unit for commercial use (re-exchange or rental) it would be considered against policy. MVCD is not using the supply of units for II for personal use and occupancy. This appears to be a violation of by laws.

#4 I believe that II has a fiduciary (Law and Order again) responsibility to provide equitable trades for "personal" use for its members...

Okay. How about the following scenerio:

You are running a request-first search in II with a week that Marriott has a waitlist request for that it uses for a search. Marriott deposits a week that either satisfies your search (or satisfies another search which via a cascading fashion satisfies your search). That causes your week to be deposited. Since the Marriott-deposited week satisfies II's like-for-like requirement, Marriott's search is satisfied (which, in turn, satisfies their waitlist request). Would Law-and-Order's legal team take Marriott and II to court over that?

 

[hotcoffee]

. . . I do not know if this is the actual mechanism -- what I do know is that there is still loads of 13 month inventory for Aruba in the DClub, and II is dry. . . .

I do not think the normal II/Marriott trades would account for what you discovered. My understanding is that Marriott and II engage in trades when DC waitlists are involved.

I also understand that enrolled weeks and non-enrolled weeks are handled differently. Enrolled weeks are part of the DC program and visible to the internal exchange system when they are deposited into II. Non-enrolled weeks are not. For non-enrolled weeks to get into Marriott's internal DC inventory, it does not sound like they could have gotten there via the method I have heard is actually taking place. That makes me question whether they are getting there via II at all.

 

[dioxide45]

I do not think the normal II/Marriott trades would account for what you discovered. My understanding is that Marriott and II engage in trades when DC waitlists are involved.

I also understand that enrolled weeks and non-enrolled weeks are handled differently. Enrolled weeks are part of the DC program and visible to the internal exchange system when they are deposited into II. Non-enrolled weeks are not. For non-enrolled weeks to get into Marriott's internal DC inventory, it does not sound like they could have gotten there via the method I have heard is actually taking place. That makes me question whether they are getting there via II at all.

This was posted earlier in either this thread or another.

From the DC FAQ:

Where will the inventory come from to fulfill vacation reservations within the Marriott Vacation Club Collection?Inventory throughout the Marriott Vacation Club Collection will be available for reservations for Enrolled Owners via other Marriott Vacation Club Owners who enroll their weeks and elect Vacation Club Points, and non-enrolled Owners who trade their usage for Marriott Rewards points or exchange their week through membership in Interval International.

So it seems that Marriott can exchange for unenrolled owner deposits in II. One would think that when they wrote this they expected all enrolled owners to be calling their VOA to deposit their week, so they would have first choice on what to deposit in II and what to keep for themselves when making II deposits over the phone.

I think what is likely the cause of the Aruba inventory in DC is MRP trades. Or at leaset inventory that Marriott has forecasted that it can take for MRP trades. They know from 20 years of experience that x percent of y season owners at z resort trade for points. They know long before 13 months that they can keep x% of inventory to put in to DC.

 

[windje2000]

I do not know if this is the actual mechanism -- what I do know is that there is still loads of 13 month inventory for Aruba in the DClub, and II is dry.

Greg,

If I put canned soup across the shelf 10 cans wide, but 1 can deep, there would be the appearance of a boat load of inventory.

An alternative to your theory is that there's lots of demand for those weeks in II, and they get snagged by ongoing requests, combined with little demand in DClub for the same occupancy.

Aruba is a plane ride from everywhere, so folks would want to stay more than 1,500 points worth (average DClub purchase).

Not sure Aruba is the best 'canary in the coal mine.'

 

[puckmanfl]

good afternoon

Don't know what Jack McCoy would do, but my answer is "maybe"....

If MVCD has a good faith request for exchange and a like for like exchange starts a cascade that gets my request frist exchange to be confirmed then it is all good. However, if there is some"inside info" available to MVCD that lets them know that I have a request first deposit with a unit that they want and they use this info to get the"cascade" moving, then there is some "insider trading"....

How do we reconcile that fact that a new player (MVCD) is exchanging in II to obtain units for commercial (re-exchange) purposes, whereas that is forbidden for you and I....

Perhaps, it can be justified by the fact that it will "prime the pump" for good MVCD inventory in II and more requests will e confirmed...

 

[hotcoffee]

. . . I think what is likely the cause of the Aruba inventory in DC is MRP trades. Or at leaset inventory that Marriott has forecasted that it can take for MRP trades. They know from 20 years of experience that x percent of y season owners at z resort trade for points. They know long before 13 months that they can keep x% of inventory to put in to DC.

My guess is MF delinquencies.

 

[puckmanfl]

good afternoon...

Since we are in the law and Order genre...

I am reminded of two of the greatest "gaffes" in TV casting history. Leading the list is McClean Stephenson giving up the role of Lt. Col Henry Blake to star in "Hello Larry" followed closely by Michael Moriarity's surrender of the role of A.D.A Ben Stone.

In both these cases, the subsequent "star" outlasted the original!!!

This has nothing to do with the issues at hand but provide a brief moment of levity....

 

[ocdb8r]

The difference here is that Marriott and II are both an Exchange Company. You can't have a maker of one product colluding with another maker of the same product. That is illegal.

I don't have a lick of legal training, but I do know the following. As of 6/20/10 MVCD is running a "competing" exchange company with II. If two competing entities in the same business combine to affect prices or supply of a product, I believe that is an anti trust violation.

I think you both watch a bit too much TV. There are volumes of cases and court decisions that set out standards by which anti-competitive behavior is set out. You assumption that any joint venture between companies with similar business lines is per se illegal is not correct. Delta/Northwest, Continental/United...these are just two prime examples of a much larger industry with much larger implications for anti-competitive behavior where business combinations were approved and held to be in line with the anti-trust laws in the U.S...and before you go there, remember that before these companies actually merged they operated as partners with sales and profit sharing agreements for several years.

Finally, think a bit about what you are saying here. Remember, even if Marriott and II are colluding in the most sinister of ways suggested here, in no way has anyone suggested the purpose is to reduce competition or raise prices of timeshare exchanges....the only argument is that what they are doing could benefit one group of exchangers over another. That would not run afoul of anti-trust laws.

The MVCI/MVD Exchange company relationship is the same as the RCI/Wyndham relationship. Marriott and their MVD Exchange company are a developer exchange company relationship, just the same as RCI and Wyndham.

I don't think you've got this correct either. Wyndham has their own internal exchange program (via points) just as Marriott now does. In addition to that, you can also exchange outside Wyndham using RCI. Wyndham and RCI are owned by the same company (at one time called Cedant, but now called Wyndham Worldwide after they bought Wyndham Vacation Ownership). My point was that if anti-trust regulators didn't have a problem with this full scale combination, I doubt they are going to have any problem with the Marriott/II cooperation.


Listen, I am no Marriott or II apologist. I don't agree that what has suggestion should be going on. I just don't think it's illegal based on anti-competition laws.

 

[ocdb8r]

Puckman, I truly appreciate the spirit of your posts...but there is a flipside to every argument...

#1 I believe that I watch way too much law and Order!!!

Well, it's hard not too...there are just so many of them...

#2 just because a corporation does something, doesn't mean it is legal!!!

Similarly, just because a corporation does something you don't like, or even something that is blatantly "unfair" doesn't make it illegal.

#3 If the individual II customer used an II snagged unit for commercial use (re-exchange or rental) it would be considered against policy. MVCD is not using the supply of units for II for personal use and occupancy. This appears to be a violation of by laws.

II's by-laws and terms of use are theirs to enforce as they see fit. They are designed to promote II's (as a company) best interest. If they choose not to enforce them, it is THEIR choice. Their by-laws and terms of use create no legal obligation on their part to enforce them.

#4 I believe that II has a fiduciary (Law and Order again) responsibility to provide equitable trades for "personal" use for its members.

I believe they should do this, but they have no legal obligation to do this...and keep in mind that "equitable" is a relative term that is up for debate.

 

[dioxide45]

I don't think you've got this correct either. Wyndham has their own internal exchange program (via points) just as Marriott now does. In addition to that, you can also exchange outside Wyndham using RCI. Wyndham and RCI are owned by the same company (at one time called Cedant, but now called Wyndham Worldwide after they bought Wyndham Vacation Ownership). My point was that if anti-trust regulators didn't have a problem with this full scale combination, I doubt they are going to have any problem with the Marriott/II cooperation.

But is Wyndham's internal system a true exchange system like MVD? Or is it rather an internal point reservation system. If the latter, it is far different than what Marriott is doing. The MVD Exchange Company is an exchange company that is exchanging inventory. It is regulated as such. If Wyndham is just a points reservation system, they are far different and can't be used for comparison.

By definition what someone calls an internal exchange system may not in fact be an exchange system at all. Just a mechanism that is setup to allow owners to reserve other resorts at a different reservation window. What Marriott has created is a exchange company that by definition would compete directly with II if the two were not working together.

 

[puckmanfl]

good evening....

please don't get me wrong....

I love this points thing (have made great trades) and I hope there is tons of inventory in the system. I was just bored here on TUG and wanted to prime the pump with some new interesting debate....

p.s. I watch WAY too much TV. I don't watch the medical shows but just can't get enough Law and Order. Can never watch too much Hockey either...

The HBO special 24/7 Capitals?penguins was just TV at its finest. Must see TV especially in HD. Not for little ears however, some naughty language....

 

[GregT]

So.....maybe I'm farther down the line in trade requests then I thought, and there are more Marriott owners willing to "down-trade" their 1BR or 2BR for that Ocean Club studio then I anticipated.

An alternative to your theory is that there's lots of demand for those weeks in II, and they get snagged by ongoing requests, combined with little demand in DClub for the same occupancy.
'

Windje,

I totally agree -- I even put that in my very first post (#1) -- but please recall I'm talking about a Studio for Studio trade, and it's hard for me to think there are (many) stronger Studios on Deposit than my Summer MOC Lahaina Towers Ocean-Front Lock-off deposited 12 months in advance for maximum trading power.

So, I really don't think there are (many) other Studio's in front of me, so I should be near the head of the line. I'm confident I'll get the trade, just not today. I also agree about your comment that the breadth of the inventory could be misleading, if they have 10 cans wide, but 1 deep as you say.

I also don't understand how it could be MRP redemptions since we are so far ahead of that date? Who would be redeeming their 2012 week for MRPs now???

But this is fascinating -- let's see what happens with Hilton Head when Summer 2012 rolls around -- I'll bet there is inventory in DClub and II traders don't get confirmed straight away....

Best,

Greg

 

[ocdb8r]

But is Wyndham's internal system a true exchange system like MVD? Or is it rather an internal point reservation system. If the latter, it is far different than what Marriott is doing. The MVD Exchange Company is an exchange company that is exchanging inventory. It is regulated as such. If Wyndham is just a points reservation system, they are far different and can't be used for comparison.

By definition what someone calls an internal exchange system may not in fact be an exchange system at all. Just a mechanism that is setup to allow owners to reserve other resorts at a different reservation window. What Marriott has created is a exchange company that by definition would compete directly with II if the two were not working together.

First, I am not sure where you are getting your "definition" of what qualifies as an "exchange system". These are not legally defined terms...we can all define them however we want. I could just as easily call MVCD a "point reservation system".

Second, I don't know what you mean by "regulated as such". There are no legal regulations specific to timeshare exchange systems (at least none that I have seen).

Third, Wyndham works just like Marriott. There are resorts where owners own outright weeks and may choose to convert their week ownership into points. These are typically at older pre-points resorts developed by Wyndham or at a growing number of resorts that Wyndham is gaining affiliation from (never Wyndham developed). In addition to those, there are Wyndham developed resorts where all that is sold is point packages. In addition, there is no one single "trust" with Wyndham - when you buy a points package you are buying it at a single resort, therefore in this sense Wyndham is even more of an exchange company that MVCD as even point owners are "exchanging" when they use their points outside their resort. While I am not completely clear as to the internal structure of the Wyndham program, the bottom line is they operate very similarly to the new Marriott organization.

 

[dioxide45]

First, I am not sure where you are getting your "definition" of what qualifies as an "exchange system". These are not legally defined terms...we can all define them however we want. I could just as easily call MVCD a "point reservation system".

Second, I don't know what you mean by "regulated as such". There are no legal regulations specific to timeshare exchange systems (at least none that I have seen).

Third, Wyndham works just like Marriott. There are resorts where owners own outright weeks and may choose to convert their week ownership into points. These are typically at older pre-points resorts developed by Wyndham or at a growing number of resorts that Wyndham is gaining affiliation from (never Wyndham developed). In addition to those, there are Wyndham developed resorts where all that is sold is point packages. In addition, there is no one single "trust" with Wyndham - when you buy a points package you are buying it at a single resort, therefore in this sense Wyndham is even more of an exchange company that MVCD as even point owners are "exchanging" when they use their points outside their resort. While I am not completely clear as to the internal structure of the Wyndham program, the bottom line is they operate very similarly to the new Marriott organization.

Perhaps you need to read this document from Marriott. https://www.my-vacationclub.com/common/vc/en-us/pdfs/enrollment_legal_docs/program_disclosure_guide.pdf. Marriott didn't create if just for kicks and grins. They must file this document with the state of Florida every year because of this statute . So exchange companies, at least in Florida where MVD operates, are a regulated industry.

It is very possible that there is a Wyndham Exchange Company like MVD. However is Wyndham pulling weeks from RCI to fulfill internal exchanges in their internal system?

 

[DanCali]

'The Management Company reserves the right, in its sole discretion, to cancel all of a Multi-Interest Owner's reserved usage for a given usage year if such Multi-Interest Owner cancels less than all usage which was reserved more than twelve(12) months in advance."

I think this raises the question regarding whether weeks reserved 13 mo. in advance can be deposited for II exchange without fear of cancellation by MVC due to violation of T&C. If depositing a week reserved 13+mos violates MVC T&C, how can Marriott rely on this as a source of inventory from II? I guess they can legally cancel these reservations for violating T&C, and then confiscate them for use in DC inventory.

All that says is that if you cancel a week reserved more than 12 months in advance, Marriott can cancel all those reservations booked along with it. In reality (and I've gotten consistent answers on this from every rep) you can cancel one of those reservations at less than 12 months out and you are fine. They only cancel all of them if you cancel between 12 and 13 months.

I am not sure I see how depositing a week violates anything. And while a confirmed exchange technically is a "cancellation", you can easily get around that but depositing at 12 months out or less.

 

[dioxide45]

All that says is that if you cancel a week reserved more than 12 months in advance, Marriott can cancel all those reservations booked along with it. In reality (and I've gotten consistent answers on this from every rep) you can cancel one of those reservations at less than 12 months out and you are fine. They only cancel all of them if you cancel between 12 and 13 months.

I am not sure I see how depositing a week violates anything. And while a confirmed exchange technically is a "cancellation", you can easily get around that but depositing at 12 months out or less.

I agree, in fact when looking online at the check availablity page on my-vacationclub.com, the ussage options listed include exchanging the week though II. So Marriott considers exchanging a usage option.