Speculation About Marriott's New Timeshare Structure [merged]

[KathyPet]

I am currently in escrow for my First resale purchase at St. Kitts. I am paying 60% of Marriott's price. I would like to have been able to get a better price but considering that there are only 88 units at St. Kitts and it has only been open for sales since 2007 the resale inventory is very limited.
I have negotiated my way through the Marriott system since 1994 when we purchased our MMC direct. That was followed in 97 by a 1 BR purchase at Kauai Beach Club when there on vacation (using those Marriott points). We never went back to Kauai (too long a trip) so in 2002 we used the equity trade program to buy a week at Barony Beach and a week at Grand Ocean (gold time) since we knew we would actually use that location. In 2008 we sold Barony using Marriott resales and took a $8000 loss (net to us after Marriott's 40% commission)
We gave serious consideration to purchasing direct at St. Kitts but decided to go resale for two reasons (1) Marriott not offering enough incentive points to make it worthwhile especially when I can buy 100,000 points for $1250 per year. and (2) we still have our two direct purchase weeks to trade in for points.
I don't know how Marriott will treat its resale purchasers under the new program but to be frank I really don't care. I have always wanted a place to go to during the cold winter months and I love St. Kitts. I do not expect to want to trade out of there but really expect to go year after year so I am a happy camper. With our third week we now have a "extra" week that we can offer to our daughter and her new husband to take a vacation with each year.
I am hoping that our St. Kitts week will hold its value as I am convinced that sales will pick up again after the current economic situation improves.

 

[jimf41]

Among the many mistruths, mistakes and gibberish utterances by our sales rep last week the one thing he stated that I agreed with was that if you only wanted to use and not trade you were better off buying resale. I think he realized what he said didn't jive with the rest of his pitch and quickly changed the topic.

There might be other reasons to buy resale but that is definitely one of them.

 

[taffy19]

This is the internal exchange system that I am really hoping they will implement. Or at least, it's one that I would seriously consider workable and maybe perfect for our family.

Beyond that, we're having to make too many assumptions in order to say if one way or another or another could work. The one thing I am sure of, is that the brainiacs on TUG will be (once more) worth their weight in gold when/if the time comes to analyze an actual new product.

I also believe that it will be like that but when the new point system has been introduced, they will go over to a pure point system and every sale of a deed that will go through Marriott direct, will change to an RTU point system ownership.

They may even give an incentive to sell through Marriott rather than on your own as you may get a higher price than on the resale market. It happened to us once before.

 

[kjd]

Instead of having a suppressed feeling of guilt because you bought resale (I bought three resales and three direct) and therefore think that Marriott is out to punish you, why not look at the other side of the issue? These are the same folks who brought you the "Florida Club".

I'm sure there was a lot of angst when that program was being considered. The Florida Club atrophied as a result of it's own uselessness. It was originally conceived as a benefit for owners and was highly touted by the sales staff. Today it's hardly mentioned except by those of us who have to pay into it. When I bought my last Florida Club timeshare the seller gave me an apology.

The new imagined points system (I'll believe it when I see it) could go down the same road. Initially it will be proposed as a new innovative owner benefit but then debunked once owners figure out the empty benefits of the change. I'm sure that if Marriott decides to offer an alternative points system it will be directed at new customers and multiple unit owners. Their own analysis shows that. It will have to prove itself as a benefit to all owners before it really means something.

Maybe some of the sales staff would like to punish the resale owners but no successful company would design their business plan around it. If you bought resale--relax. You're not that important to them.

 

[SueDonJ]

I look at the whole of Marriott ownership as, Marriott is going to charge whatever fees folks will pay. That's how they've always done things, that's how they'll continue to do things. Their timeshares have always been priced relative to what the market will bear - on all three developer, resale by Marriott and external resale markets - and for the most part they are higher priced among the competion. They charge usage fees (reservation changes, exchanges, etc.) simply because they can. If they can charge higher initiation fees in this program to resale buyers in order to generate revenue that has up until now not been available to them, why wouldn't they?

If they make an internal exchange system attractive enough to a majority of their ownership base, including owners who bought both direct and resale, then they can get away with charging initiation fees. Whether those fees are justified will be for each individual owner to decide. If the difference between direct and resale is only $1K, then most resale owners are still ahead of the game when this premium is tacked on to their purchase price. After all, how many resales have there been where the difference between direct and resale is only $1K?

That's why I'm not understanding this overall doom-and-gloom attitude that Marriott will "decimate" and "destroy" the resale value of every week simply by implementing sliding initiation fees. Sure, the resale market will be impacted so that Marriott can get a slice of that pie that they've previously not gotten, but I just don't see that it will be to the extent where we all need to panic. Where has this panic been all this time, over the years that developer purchasers have had to accept a much more substantial devaluation between the developer and external resale markets?

It is what it is, as Bill Belichek would say. Take a look at the specifics when/if the program is rolled out and see if it works for you. But don't make it mean any more than it should, that's not helpful in any analytical discussion.

 

[fraser921]

marriott new rules

this will devalue Marriot values

Wyndham did this and prices fell 50 % or more.

The sales people cant compete with resales so they will give people that buy from marriott better access etc. So at the end of the day there will be 2 classes of owners: those who bought resale and those who bought from the developer.

Beware and raise heck.

 

[SueDonJ]

... The fact is that current resale owners bought into a system where they were told that they would enjoy the same ownership rights and privileges as all other owners, except that they couldn't trade for points. ...

m, I have to ask since you keep bringing up this point - who told you this? And what exactly did s/he say? Because the fact is that no owner, direct or resale, could be correctly told that, " ... they would [not] enjoy ..." with respect to this particular usage option. It is correctly explained to direct purchasers as, (paraphrased) "... currently only direct owners enjoy the MRP-exchange benefit but there is no guarantee the option will continue - as is or at all - in the future."

As with everything else, what's NOT directly stated in the contract or governing docs is as important as what is. Resale buyers and developer buyers alike are always subject to Marriott implementing changes that impact their ownerships, whether positively or negatively, as long as the contracts don't prohibit such changes. It follows that any owners are misinformed if they believe that their rights extend to their ownership never being any different than on the day it was purchased.

 

[timeos2]

They can't change what you bought

this will devalue Marriot values

Wyndham did this and prices fell 50 % or more.

The sales people cant compete with resales so they will give people that buy from marriott better access etc. So at the end of the day there will be 2 classes of owners, resales with limited booking, and [some] that paid full price with better booking privleges.

Beware..

Wyndham resale owners suffer no limitations of booking as the deeded rights are the same for all. They do lack a few bonus "benefits" which, if available at a reasonable price, would be nice to have but do not represent any value when you consider the thousands of upfront dollars required to get them. Add that they are not part of any sale so they can, and are, changed at Wyndhams will and there is no loss to the resale owner.

Should Marriott actually step over the line and try to impact rights granted in the ownership prospectus they aren't just acting badly they are breaking laws. It would no longer be a whimsical discussion here but a serious court case they wold without a doubt lose. The rights granted in the original sale are sacrosanct. Mess with those and they will find out what trouble really is. They can play with the bonus/optional features all they want. If you don't like that then don'y buy or ignore it while using your legal rights. It's an option ad nothing more.

 

[Latravel]

...Maybe some of the sales staff would like to punish the resale owners but no successful company would design their business plan around it. If you bought resale--relax. You're not that important to them.

I totally agree. Some of the responses written here just makes me shake my head. Someone who was from inside Marriott (Fletch) is directly telling you that resale puchases are not a big concern to Marriott yet people still write how Marriott is punishing them. Like you said, relax!

 

[SueDonJ]

this will devalue Marriot values

...

Beware and raise hell

You know, not only does this post contain an inarguably offensive word, it is one of the most blatantly insulting posts toward direct buyers that I've ever seen in any of the TUG discussions which include a resale v. direct aspect.

I am amazed the post is still here, and I'd really like to not see it quoted in its entirety. Thanks, all.

 

[Latravel]

..What you (and perhaps even Fletch, although I respect his opinion greatly) miss in your logic and statements is that many, perhaps even most, resale owners also own one or more developer weeks... Many bought resale because that better suited their needs at the time... many have already bought through the developer and all candidates for future direct purchases.... I think the majority of resale buyers would buy direct if the right opportunity came along. ...many formerly direct buyers have felt that resale purchases made more sense to them... ... I don't think the majority of resale owners are only bargain hunters in general.

I don't think blanket statements apply since there is no way one could know the thinking process and purchasing habits of the entire Marriott population. Personally, my mathematical mind can't do anything with this kind of information, that's why I only post on the 93% vs 7% ratio which has been studied. But, it's very interesting to read different points of view.

 

[hipslo]

I am amazed the post is still here, and I'd really like to not see it quoted in its entirety. Thanks, all.

agree, my reaction exactly

 

[Beverley]

Without a doubt. If I were a 3 or 4 week owner, I would be very careful to deicde which to convert to points. The St Thomas Platinum week that I bought for trade power, without a doubt. The Gold GV week, NO WAY !

Fletch, thanks for your response.

Now I am going to unveil my "stupidity" here for all to see .. .. when you say without a doubt on the St Thomas and no way on the gold GV, do you mean you would put St Thomas into the points system or the other way around?

If yes, you would put the better property into the points system is that because you would get more points and be able to stretch the time? I was thinking along the reverse.... putting in my weaker units (silver) into point or a unit that I would not necessarily be going to every year.

For instance, we go to HHI every summer, I would be afraid to put my summer week into a point system and then not be able to book a week in my season. Whereas, I have a silver HHI unit that we only use to trade for MR points or trade for other locations (sometimes back into HHI plat season) so that one I might consider going points ...

What are your thoughts.

Thanks.

Beverley

 

[NWL]

You know, not only does this post contain an inarguably offensive word, it is one of the most blatantly insulting posts toward direct buyers that I've ever seen in any of the TUG discussions which include a resale v. direct aspect.

I am amazed the post is still here, and I'd really like to not see it quoted in its entirety. Thanks, all.

agree, my reaction exactly

I reported this post as well. I prefer to be insulted by someone with a better vocabulary.

Cheers!

 

[dioxide45]

There are two numbers for resale buyers. The number I have seen quoted a lot in this thread is 7%. This 7% only reflects the number of resale transactions in a year, it does not reflect the percentage of owners that bought resale. That number is undoubtedly higher.

 

[kjd]

7% vs 93%

Wouldn't it also be true that the number of direct buyers would be 93%? If that ratio was a constant over a number of years then there would be 28,000 resale purchasers and 372,000 direct purchasers from Marriott. It's based upon the often quoted 400,000 members of MVCI.

If this is so as it seems to be, it is pretty clear to me which group Marriott would concentrate their marketing efforts on. An old saying is that "If you go duck hunting--you have to go where there are ducks". Unless there was a big surge of resale buyers in a given year, resale buyers are still 7% of MVCI no matter what years you look at.

 

[dioxide45]

Wouldn't it also be true that the number of direct buyers would be 93%? If that ratio was a constant over a number of years then there would be 28,000 resale purchasers and 372,000 direct purchasers from Marriott. It's based upon the often quoted 400,000 members of MVCI.

All retail buyers become retail owners in the ownership pool. All resale buyers become resale owners and take away from the existing resale owner pool. So over time, that retail owner pool gets depleeted for the sake of resale owners. At some point in time after a resort is out of active sales, all owners become resale owners.

 

[Beverley]

All retail buyers become retail owners in the ownership pool. All resale buyers become resale owners and take away from the existing resale owner pool. So over time, that retail owner pool gets depleeted for the sake of resale owners. At some point in time after a resort is out of active sales, all owners become resale owners.

Not necessarily as Marriott considers a buyer a direct buyer if they purchase their resale through Marriott. We purchased two resales, however, they were bought through Marriott at Marriott's price so they are considered a developer purchase. The resorts were older Marriott properties and had been sold out of "new" weeks for years.

Beverley

 

[JimIg23]

Marriott has a point system already in Asian. I wonder if this will be similar. Does anyone know how that system works?

 

[dioxide45]

As 7% of buyers buy resale, this causes the resale owner base to actually increase at a rate of ~.5% more than that of the retail owner base. Those resale buyers are buying from people who previously bought retail, that means that the retail ownership base isn't growing as fast as resale owner base. At some point resale owners will outnumber retail owners.

 

[hipslo]

As 7% of buyers buy resale, this causes the resale owner base to actually increase at a rate of ~.5% more than that of the retail owner base. Those resale buyers are buying from people who previously bought retail, that means that the retail ownership base isn't growing as fast as resale owner base. At some point resale owners will outnumber retail owners.

once a resort is sold out why would marriott be even remotely concerned about resales? if they want to sell the same unit yet again, and profit again on the very same unit that they have already sold, they can buy via rofr and do so. if they choose not to do so, the resale purchase is not taking a sale away from marriott. given that, why would those who have purchased resale at a sold out resort ever be treated differently than developer buyers? this has never made any sense to me.

 

[kjd]

It's a small point and not worthy of much discussion but the pool of new buyers probably will not be outnumbered for a long time. I think you are confusing a new buyer with someone who doesn't buy from Marriott. There are always new buyers and many of them will be buying direct from Marriott. That's because:

1. Marriott handles resales now and will in the future
2. If the economy expands Marriott will start offering new projects. They just cancelled several of them
3. In many resorts there is no such thing as a new unit buyer. They are buying Marriott inventory built years ago.
4. If Marriott decides that they no longer want to develop new projects they will target the resale market exclusively. Many who bought from Marriott will list with Marriott when they sell.

 

[dioxide45]

It's a small point and not worthy of much discussion but the pool of new buyers probably will not be outnumbered for a long time. I think you are confusing a new buyer with someone who doesn't buy from Marriott. There are always new buyers and many of them will be buying direct from Marriott. That's because:

1. Marriott handles resales now and will in the future
2. If the economy expands Marriott will start offering new projects. They just cancelled several of them
3. In many resorts there is no such thing as a new unit buyer. They are buying Marriott inventory built years ago.
4. If Marriott decides that they no longer want to develop new projects they will target the resale market exclusively. Many who bought from Marriott will list with Marriott when they sell.

It is true that resales will not outnumber retail owners for a long long time. But to speak on number 1 and 4, the assumption is that these are part of the 93% number, and not considered a resale purchase. They are considered developer purchases, not resale. The truth is that the resale ownership base will always be increasing at a faster rate than retail owner base as long as there is a resale market. This will cause the breakdown of owners to not be 93/7%.

 

[dougp26364]

this will devalue Marriot values

Wyndham did this and prices fell 50 % or more.

The sales people cant compete with resales so they will give people that buy from marriott better access etc. So at the end of the day there will be 2 classes of owners: those who bought resale and those who bought from the developer.

Beware and raise heck.

Why Wyndham? Why not more like Hilton Grand Vacation Club where the only difference between resale and developer purchase is developer purchase can qualify for elite status, which doesn't amount to much.

I really think that TUG members are way overthinking this and are looking at it in the worst possible light. What happened to Marriott owners who use to say if Marriott married the number of resorts they own in great locations with HGVC's point based reservations system, they'd have an unbeatable product? Now, here we are on the possible threshold of that happening and everyone thinks Marriott is out to kill the product.

 

[m61376]

Marriott has a point system already in Asian. I wonder if this will be similar. Does anyone know how that system works?

Starbucks I believe posted the description awhile back. Frankly, I thought it was awful and most of the comments posted by others here weren't positive either.

Doug- actually, that's why I am concerned. As they say, the devil is in the details. I was kinda shocked at the Asia Pacific points program, and the $5000 initial pricetag for joining.