Speculation About Marriott's New Timeshare Structure [merged]

[l2trade]

But anyone with kids or school teachers will need the times when they are off from school and people who ski or want the beaches at the best times will only have a limited window that they will want to reserve. Plus, right now it is only people from that ts in the proper season that can try and get a prime week. In the points system it will be opened up to so many more people.

Good points. I guess it all depends on the spread and how these variables offset each other. If II availability and getaways are any indicator, I would guess that a prime time week equals many off season weeks. By artificially narrowing that wide spread of points, you increase the demand (fighting) for the best weeks.

 

[MOXJO7282]

Good points. I guess it all depends on the spread and how these variables offset each other. If II availability and getaways are any indicator, I would guess that a prime time week equals many off season weeks. By artificially narrowing that wide spread of points, you increase the demand (fighting) for the best weeks.

I don't see a bigger demand for prime weeks just because a points system is implemented. In fact I could see less. In a weeks program exchangers don't have to pay for anything beyond the exchange fee so they say what the heck I'll request a trade, and the demand is huge because everyone is trying to exchnage in. Under a points program now you have to actually pay alot more by purchasing more points for prime Maui weeks and you just can't get lucky anymore with an exchange.

To me that adds up to less demand because its still not going to be cheap to buy enough points t get to Maui. Just because a points program is released doesn't mean people will buy enough points to get to Maui, anyone than they will pay more to buy a Maui week or rent one.

 

[GregT]

L2Trade,

Do you have any idea if future resale purchases can be entered into the system? I was actually very very close to buying a Ko Olina EOY, but ultimately decided the uncertainty about the system was too much (and that there is tons of inventory at Ko Olina that will somehow find its way into II).

Please advise and thanks!

 

[m61376]

yep. same supply of prime weeks, more demand, since reservations will be opened to anyone who has enough points. how that will result in prime week reservations being easier to come by escapes me.

One big question, yet to be answered, is the timing of when reservations will be opened up for each group. Will there be home resort booking priority for a month or two before reservations are opened up to the general points pool?

 

[NJDave]

Some quick notes about the new system rolling out Jun 20th -
1. Existing owners will retain home resort deed, same MF commitments from that home resort and the ability to trade under the old week rules, regardless if they upgrade to the points program or not.

2. If existing owners upgrade their ownership to the points program, this will be an annual decision to use either weeks or points. An owner may convert to points one year and decide to stick with weeks the next.

3. The upgrade cost will be lowest during the introductory period. Owners who upgrade after that period will pay more to do so.

4. All unsold Marriott inventory on Jun 17th from all timeshare resorts will be placed into the points Trust. Going forward, this is all Marriott will sell. You will no longer be able to buy a specific resort, size, season, etc via retail. The only decision when buying Marriott retail will be how many points to buy. The MF for those points will be based on the overall Trust holdings.

5. Points received for converting week will vary based on what season/week you own.

6. Point requirements for reservations will vary per night, size, location, week of the year, etc... Marriott will manage point values within the inventory similar to cash values for nightly hotel rentals.

7. Owners who trade under the old weeks system will continue to control which reservations they relinquish to II. I was told that Marriott has learned from the mistake Starwood made. They will not interfere with owner deposits.

8. It appears that developer inventory units will be converted and stored in the Marriott point system for points owners, rather than the bulk banking into II as we've frequently seen in the past. This could be bad news for those not in the points system and encouragement to join it. The point system will be prepped on day one each year with lots of great availability from developer and unsold inventory weeks.

Based on #5 & #6, there will be scenarios where an existing platinum week owner may convert into points that is worth less than the points cost of a week during the highest demand week and worth more than the points cost of a week during the lowest demand week of that season.

The point system is designed to appeal to owners of non-lockoff two bedroom and/or high conversion value weeks, who can get additional nights by staying off season or in smaller units or during lower demand week nights. The point system is designed to appeal to owners of off-season or smaller unit weeks who will be happy to receive fewer nights in exchange for a prime time stay, or bigger unit, or view upgrade, etc. Most significantly, the point system is designed for Marriott, who will be able to convert smaller resorts / hotel rooms to points and increase the breadth of the points system network & the diversity of the Trust without the significant capital costs of building future, massive, villa style timeshare resorts. Marriott will start start to manage timeshares more like hotels and get access to more empty room nights that in the past they could not touch.

I predict many owners (non-Tuggers) will like this new system. I do not. I expect this system will make things more 'fair'. By 'fair', I mean that owners like me who plan early and often will have far less opportunity to benefit from the failing of owners who don't. In a word, I say !$#@+!.

Thanks for posting this information. There are over 200 posts since this one even though it is a recent post. I quoted it for others that don't read the 200prior posts.

We own a Platinum resale in Orlando. I originally thought that a points program was going to be good for us. However, after reading many negative posts, I was beginning to believe that change was bad. I now feel differently after this post. Flexibility provides alot of value to us and it appears that there is not much down side; just some additional minor costs. This program may actually increase the value of our timeshare (depending on restrictions on future resales).

 

[dioxide45]

Prime time nights will cost more points (money) than low demand nights. This is similar to the way hotel pricing varies by seasonal demand.

This is a big change from the legacy weeks model. Under that model, every owner pays the same home resort MF per week, regardless which week they end up reserving. There will be a greater incentive for points only owners to travel off season if they want to stretch their points into more nights. This would not be the case if the MF prices were held the same per night year round, as they are today.

Legacy week owners can continue to book their home resort week or trade with II weeks via the old rules. However, some owners will find it advantageous to convert their week to points and stretch those points at other resorts to travel additional nights (or weeks).

I highly doubt every points owner will be fighting over the top resorts and times, if they now cost the most in points. If it were me, more often I'd probably look to stretch my travel points by not picking the most expensive time to stay.

This is what a number of people do in DVC. The low priced times to travel point wise are actually in fairly high demand within the DVC system.

This is different though in a way still the same with a possible Marriott conversion. These people are the equivalent of those here on TUG that have learned how to take a silver or gold lock off week and turn that in to two, three or possibly even four weeks (yes you can get four weeks out of a 2BR lock off unit) in like or possibly even higher demand times. These are people in the know. The people who bought in to DVC and discovered this little gem and have the flexibility to use it also exist in the current Marriott system and suck up those low season weeks no one else want.

You won't see the average family using their prime Beach or HHI week to turn in to two or three doggy weeks in September or October. Their schedules won't allow it. The same type of people stretching weeks currently will be the same type of people stretching points in the future.

 

[dioxide45]

Thanks for posting this information. There are over 200 posts since this one even though it is a recent post. I quoted it for others that don't read the 200prior posts.

We own a Platinum resale in Orlando. I originally thought that a points program was going to be good for us. However, after reading many negative posts, I was beginning to believe that change was bad. I now feel differently after this post. Flexibility provides alot of value to us and it appears that there is not much down side; just some additional minor costs. This program may actually increase the value of our timeshare (depending on restrictions on future resales).

I think you will see decent points valuations in Orlando. They will have a tough time explaining to people who bought in Orlando that their units are only good for four days in HHI or elsewhere. Then you won't see many Orlando deposits in to points and then demand will be through the roof for those few weeks. I think it will be fairly easy to move between domestic resorts within the same season with the points you get for your home unit. Remember, Orlando is still the highest demand and most traveled to destination in the world.

 

[dioxide45]

One big question, yet to be answered, is the timing of when reservations will be opened up for each group. Will there be home resort booking priority for a month or two before reservations are opened up to the general points pool?

The million dollar question...

 

[bwenzel]

Will there be two pools of inventory going forward, one for deeded week owners/users and one for points? If so, any new resorts to be built, or existing ones with large amounts of unsold inventory, might be difficult/impossible for me to trade into without converting my deeded weeks into points.

If there will only be one pool of inventory, AND I'm assuming point owners/users get the same priority/reservation rules as deeded week owners, I am concerned that it will make it much more difficult to secure my floating weeks at my home resorts because there will be many point owners wanting those same weeks, i.e. 4th of July at Barony.

Thoughts?

 

[m61376]

I agree that, at least on the surface, the details that have been posted may be the sketch of a consumer friendly plan. We'll have to wait, though, for the big questions to be answered- what exactly does home resort booking priority mean, what is the flexibility wrt partial unit use (can half be used for trade?), banking/borrowing, etc., and the all important determining factor perhaps- how are point values assigned?

IF it truly is a program that costs $595 for one week or $695 for multiple weeks to join and if it is an opt in/opt out type of system on an annual basis, the only real issue is that it entails a $169 annual fee. The added convenience, though, of being able to adjust ownership use would likely be worth the minimal annual expense, while potentially generating a pretty impressive source of annual revenue for Marriott (if 400,000 owners opted in, this would be an easy 67 million plus per year). Besides the benefits of selling points for sales, this has the potential of a lucrative revenue stream.

If it is as outlined and the home resort priority remains intact, the program seems like a winner. Admittedly, people who have gamed the system will still be better off in II, because those uptrades will probably be harder to achieve. However, assuming that point valuations reflect real relative value between properties (which will likely be subjective depending upon what you own), I can see it having broad appeal.

 

[NJDave]

I think you will see decent points valuations in Orlando. They will have a tough time explaining to people who bought in Orlando that their units are only good for four days in HHI or elsewhere. Then you won't see many Orlando deposits in to points and then demand will be through the roof for those few weeks. I think it will be fairly easy to move between domestic resorts within the same season with the points you get for your home unit. Remember, Orlando is still the highest demand and most traveled to destination in the world.

My thought is that Orlando will get a decent amount of points becasue Marriott still has alot of inventory to sell in Orlando and they want to be able to sell more points. A platinum Hilton sells for more than my platinum Marriott. The Marriott should be more valuable if this program is what I think it will be since the network is much better. We own an Orlando Hilton as well.

 

[m61376]

My thought is that Orlando will get a decent amount of points becasue Marriott still has alot of inventory to sell in Orlando and they want to be able to sell more points. A platinum Hilton sells for more than my platinum Marriott. The Marriott should be more valuable if this program is what I think it will be since the network is much better. We own an Orlando Hilton as well.

Except that Marriott will be selling generic points going forward and not "Orlando" points, so it doesn't matter how much Orlando inventory is left.

I think it will depend upon how Marriott defines value. If they take the stance, like HGVC, that most resorts are valued similarly for a given season, than we may only see a few different point structures. However, IF they value each resort on its own merit, possibly taking their own rental rates into consideration (since there was some reference to a hotel type value structure), Orlando's value may reflect the relatively cheaper rates that the properties can be rented for on the open market, and on Marriott's own website.

 

[taffy19]

The million dollar question...

I feel that week owners, who want to stay a whole week at their resort, will have the first opportunity to reserve that whole week. That right is in their deed and documents and cannot be denied.

 

[Asia2000]

Will there be two pools of inventory going forward, one for deeded week owners/users and one for points? If so, any new resorts to be built, or existing ones with large amounts of unsold inventory, might be difficult/impossible for me to trade into without converting my deeded weeks into points.

If there will only be one pool of inventory, AND I'm assuming point owners/users get the same priority/reservation rules as deeded week owners, I am concerned that it will make it much more difficult to secure my floating weeks at my home resorts because there will be many point owners wanting those same weeks, i.e. 4th of July at Barony.

Thoughts?

Yes. I believe Marriott will add resorts to the system. The new resorts will, in my opinion, give booking priority to point program participants as there are no home resort deed holders. After a while, when say, 2 or 3 new resorts or buyouts occur (Marriott purchases a resort from another company and converts it or Marriott adds one of their existing resorts into the system), everyone will wish or wish that they had, taken to option to convert. If I'm reading correctly, a one-time fee of $595 for a single week deed owner? If this is the price, I think many will join.

 

[PerryM]

I feel that week owners, who want to stay a whole week at their resort, will have the first opportunity to reserve that whole week. That right is in their deed and documents and cannot be denied.

This is how it works with our little independent resort where some people have converted to a point based system. I am still glad that we didn't because the weeks are floating but with a fixed week/unit, it may be different as they cannot take that right away of that particular week/unit ever, I believe. There has to be fine print in the documents where everything is explained black and white and we all better read it. It's too important not to read it.

But the deeds in the trust or committed to this system say exactly the same.

This is probably one of those questions that Marriott will declare a trade secret and not tell us how it works - just that everyone is treated the same. Which means their computer system will work thousands of times faster than our hand trying to click a mouse.

No matter how the "flavor" of this system seems now this is still a sales tool for Marriott to sell Points and to satisfy their customers so they will buy more Points.

We'll see how much specificity the documents give us that form the rules of this new system.

 

[PerryM]

More puzzle pieces please....

Yes. I believe Marriott will add resorts to the system. The new resorts will, in my opinion, give booking priority to point program participants as there are no home resort deed holders. After a while, when say, 2 or 3 new resorts or buyouts occur (Marriott purchases a resort from another company and converts it or Marriott adds one of their existing resorts into the system), everyone will wish or wish that they had, taken to option to convert. If I'm reading correctly, a one-time fee of $595 for a single week deed owner? If this is the price, I think many will join.

This brings up a good question - Can folks, who opt not to join, ever get into a new Marriott?

My guess is no.

Marriott has negotiated a new contract with II and they might have told them that at the new resort II will not get developer weeks since II is a competitor to Marriott in the exchange world now, and new sales will NOT be week oriented at the new resort.

I'm not sure Marriott will give us any guidance on what they will do but 4 years of "Better not buy resale" mean something - new Marriotts are off limits to outsiders.

WM did this to II when it switched to RCI - the basket of resorts that went into the generic unit given to II for exchange purposes let out ALL new resorts after they switched to RCI.

This might weigh heavily on one's decision to join for just the ability to get into all new Marriotts.

 

[taffy19]

But the deeds in the trust or committed to this system say exactly the same.

This is probably one of those questions that Marriott will declare a trade secret and not tell us how it works - just that everyone is treated the same. Which means their computer system will work thousands of times faster than our hand trying to click a mouse.

No matter how the "flavor" of this system seems now this is still a sales tool for Marriott to sell Points and to satisfy their customers so they will buy more Points.

We'll see how much specificity the documents give us that form the rules of this new system.

Perry, this is exactly why I believe that a person, who wants to stay a whole week at their deeded resort, has to have an advanced booking window. Split week stays or single nights come after that. It may be fair game for everyone to try to book at any resort but not before all owners have reserved their full week at their own resort for floating or fixed units because the deed to the real estate hasn't changed. There has to be a deadline they can do this in. I believe that Hilton and most other developers have this feature too where they sell for a full week's stay.

 

[PerryM]

Perry, this is exactly why I believe that a person, who wants to stay a whole week at their deeded resort, has to have an advanced booking window. Split week stays or single nights come after that. It may be fair game for everyone to try to book at any resort but not before all owners have reserved their full week at their own resort. There has to be a deadline they can do this in. I believe that Hilton and most other developers have this feature too where they sell for a full week's stay.

My guess is that next week we still won't know the answer and it will take months or a year to empirically figure out the answer.

 

[taffy19]

Oh, I still say its all just a rumor...

You will receive an email on Monday. I hope we do so we can start a new thread.

 

[rsackett]

...They've dropped 9 so far. I've posted that I suspect a few are already on the chopping block and likely won't be included in any new program, we'll see. Ultimately what happens if Marriott drops a resort is those who own at that resort or are in a trust from that resort cease to be a member of the club.....

I disagree with your analysis. Once a deed is in the Trust and sold as points all those that own points own some of that resort. No one will be in the Trust from just that resort.

If Marriott blocks some resorts from joining and keeps all deeds in individual owners’ hands then they could be dropped just as they are now.

Ray

 

[l2trade]

L2Trade,

Do you have any idea if future resale purchases can be entered into the system? I was actually very very close to buying a Ko Olina EOY, but ultimately decided the uncertainty about the system was too much (and that there is tons of inventory at Ko Olina that will somehow find its way into II).

Please advise and thanks!

I do not know the answer to this question. I was careful not to ask too many questions about resale from the perspective of a potential resale buyer. The Marriott sales reps are there to sell a retail product. Otherwise, there is no point for them to talk with me. I imagine that would have ended the conversations and/or yielded unreliable answers to discourage my interest in purchasing resale.

I am eager for the detailed answers about resale, like everyone else. I will watch this closely and not buy anything yet.

 

[Captron]

Prime time nights will cost more points (money) than low demand nights. This is similar to the way hotel pricing varies by seasonal demand.

This is a big change from the legacy weeks model. Under that model, every owner pays the same home resort MF per week, regardless which week they end up reserving. There will be a greater incentive for points only owners to travel off season if they want to stretch their points into more nights. This would not be the case if the MF prices were held the same per night year round, as they are today.

Legacy week owners can continue to book their home resort week or trade with II weeks via the old rules. However, some owners will find it advantageous to convert their week to points and stretch those points at other resorts to travel additional nights (or weeks).

I highly doubt every points owner will be fighting over the top resorts and times, if they now cost the most in points. If it were me, more often I'd probably look to stretch my travel points by not picking the most expensive time to stay.

The MF would not remain the same PER NIGHT it would remain the same PER POINT and since it takes more points for a higher demand week, those buying enough points for a higher demand week will pay more MF. Take a look at the Worldmark model:

WORLDMARK MAINT. FEE SCHEDULE


5001 - 7000 CREDITS $474.24
7001 - 10,000 CREDITS $584.81
10,001 - 12,500 CREDITS $695.37
12,501 - 15,000 CREDITS $786.26
15,001 - 17,500 CREDITS $894.12
17,501 - 20,000 CREDITS $1001.98
20,001 - 22,500 CREDITS $1109.84
22,501 - 25,000 CREDITS $1217.70

The problem is that newer resorts end up costing more so the weeks demand more points as they have to charge new owners more to keep growing. (Construction costs rarely go down over long term averages) That is why, using Worldmark again, 12000 credits USED to get you any 2BR in the system, not any longer with Anaheim and West Yellowstone. Older owners complain this is a devaluing of the points.... just like it now takes more miles to fly on any program or costs more points to stay in a hotel room.... The interesting thing to watch for will be if they FIX the points for each type of room at each resort. WM did this so you can still get 2BR Hawaii for 12000 credits. The credit amount is FIXED on build or enrollment and cannot change without a HUGE vote with an overwhelming majority. If Marriott DOES NOT do this..... the potential for real devaluation over time is enormous. If they do not increase legacy owners point allocation received when they increase point requirements that will be a BIG problem!


BTW has anyone found out what the yearly fee will be for point members? Add that on the $595/695 conversion fee. For Starwood it is $129. ....and will the legacy owners have to pay it if they DO NOT convert to points that year???? Sounds like a fantastic revenue stream to me...if you are a share holder!!! (this may be the downside people were looking for for legacy owners!!!)

 

[Captron]

I don't see a bigger demand for prime weeks just because a points system is implemented. In fact I could see less. In a weeks program exchangers don't have to pay for anything beyond the exchange fee so they say what the heck I'll request a trade, and the demand is huge because everyone is trying to exchnage in. Under a points program now you have to actually pay alot more by purchasing more points for prime Maui weeks and you just can't get lucky anymore with an exchange.

To me that adds up to less demand because its still not going to be cheap to buy enough points t get to Maui. Just because a points program is released doesn't mean people will buy enough points to get to Maui, anyone than they will pay more to buy a Maui week or rent one.

With points you do not get the "trade up" you have to pay the points for that unit straight up. It is a lot less easy to "work the system" as some here say. Some at Starwood even deposit lesser 2BR with an exchange company trying to get greater season etc. AT THEIR HOME RESORT because they can then get a better unit using one years points rather than more than that. This is a gamble some are willing to take. This does not happen in a points system. The days of getting a 2BR for a 1BR will end in a couple of days....for new purchasers and those that buy them later resale.

Many of the Kauai, St John, and Harborside Starwood owners, if not using their week, will rent it and use the proceeds to go to Orlando and have "$ in the pocket" rather than deposit for points. If you are willing to deal with teh hassle you end up much better in mosts opinion. Others use teh points to stay for 2-3 weeks although the difference in MF is not sufficiently reflected in the points for most of these resorts.

 

[dougp26364]

I agree that it appears one has nothing to lose by joining. But if you consider it carefully, you'll see that's not necessarily the case.

First off, even if you can jump in and out, you'd probably still owe $169 when using home resort or doing an II weeks exchange. That's around a 15% hike to the average annual MFs one currently pays. You also have the upfront fee which, if the upgrade doesn't transfer on resale, would be money you'd never see back (if it does transfer on resale, I'm assuming an upgraded unit will be more valuable on the resale market than a legacy week).

This is all about changing the way you make exchanges - home resort use would be more costly in the points system due to annual fees. So if one bought mostly to use, there is no real need to join. If one exchanges, it's a matter of where you exchange to. As I said before, I believe Hawaii and Caribbean Platinum exchanges from a mainland location will not be feasible without buying more points. One would normally have a better shot with II be depositing a strong trader... Of course if all the Hawaii and Caribbean owners join the points system, II exchanges may be tougher but the competition will also be smaller so it could be a wash.

Rather than say one has nothing to lose by joining, I say it's better to wait and see unless you really think you'll benefit and the conversion price down the road is much higher... Even then, I'm sure there will be conversion "specials" down the road, whenever the points system needs more inventory.

It would be a downside if you had to pay a significant membership fee ($150 to $200 per year) AND still had to pay an exchange fee. The devil will be in the details.

 

[Asia2000]

It would be a downside if you had to pay a significant membership fee ($150 to $200 per year) AND still had to pay an exchange fee. The devil will be in the details.

I could not agree more. $595 (one-time), $169 + II fees (annually) could get expensive. If you trade you Marriott into II for non-Marriott properties, it would seem that points are not the way to go. If you trade into Marriott properties only, then points are good as long as you do not have additional II fees. However, I think that would mean not being a member of II altogether as they have to charge you an annual fee for being a member (smaller amount of $, but it still adds up).

Then, if new resorts are added in locations that you prefer to visit, then it would seem that points would be the best way to go in order to receive preferred booking. I think a picture of "good for all" will be painted in the beginning, but over the next few years as resorts are added, the picture will look "less inviting" for deed owners who did not choose points and later decide that they want to exchange into the newer resorts. It is hard to say how "less inviting" it will be.

It would be good to know the amount of time that a deeded week owner has to pay his $595 or $695 (one-time fee). One month? One year? Can sign up anytime in the future? Any speculators out there?