Speculation About Marriott's New Timeshare Structure [merged]

[dioxide45]

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.

You know, if they have a big price tag like this on a new internal system, the timeshare presentations won't be for buying new weeks, they will be for touting the upgrade and trying to sell only that on top of what you already own. I would find it hard to believe that they could sell it for $5K without a big push at a TS presentation.

 

[Beverley]

$5000 ???? :hysterical: :hysterical: :hysterical: :hysterical: :rofl: :hysterical: :hysterical: :hysterical:

Beverley

 

[m61376]

Here is the previous link that I was referring to for the Asia Pacific program. I believe there was another thread as well last year.

At cursory glance, it doesn't seem like even a Hawaii week owner would have enough points for a like for like trade into a high demand resort with a TDI of 120-150. Certainly Phuket Plat. week owners can't trade for similar accommodations in Hawaii.

And Beverly that's what I thought when I first saw that figure.

If course, that may or may not be indicative of what Marriott is contemplating across the board, but it is certainly cause for concern because that wasn't just idle speculation- that was a program that they were actively promoting.

 

[JimIg23]

Here is the previous link that I was referring to for the Asia Pacific program. I believe there was another thread as well last year.

At cursory glance, it doesn't seem like even a Hawaii week owner would have enough points for a like for like trade into a high demand resort with a TDI of 120-150. Certainly Phuket Plat. week owners can't trade for similar accommodations in Hawaii.

And Beverly that's what I thought when I first saw that figure.

If course, that may or may not be indicative of what Marriott is contemplating across the board, but it is certainly cause for concern because that wasn't just idle speculation- that was a program that they were actively promoting.

Thanks for the link! Read the thread. In addition to the 5k, I think you would need to spend money taking a math class to figure out all the calculations for various weeks. No thanks, I'll just go to CA and FL......

 

[tidefan]

You know, if they have a big price tag like this on a new internal system, the timeshare presentations won't be for buying new weeks, they will be for touting the upgrade and trying to sell only that on top of what you already own. I would find it hard to believe that they could sell it for $5K without a big push at a TS presentation.

This is what Diamond Resorts International (DRI) is doing. It costs about $3,000 to join their points based system, which, for some is a winner (i.e. - High Season Weeks in HI, AZ, LV) and is a loser for others (see my shoulder season St Maarten unit). It all depends on how they value the week at each resort...

Of course, we just continue to use our week down there every year, so it really doesn't matter to us...

 

[DanCali]

This is what Diamond Resorts International (DRI) is doing. It costs about $3,000 to join their points based system, which, for some is a winner (i.e. - High Season Weeks in HI, AZ, LV) and is a loser for others (see my shoulder season St Maarten unit). It all depends on how they value the week at each resort...

That's what I have been saying all along. It cannot possibly be otherwise when you don't start as a points based system... When you convert to points it is a zero sum game - half will like that they get 12 days instead of 7 in a trade to Orlando and half will hate that they get 3 days in a trade to Hawaii instead of 7.

In the end, they will end up with around 50% (that's like 200,000) dissatisfied owners. I'm a Platinum week owner and may end up "happy" but certainly wouldn't like a system where half the owners are not... Things cannot end well that way, no matter how they spin this (still alleged) system. :annoyed:

That is why I still hope they come to their senses and never launch it

 

[dioxide45]

At cursory glance, it doesn't seem like even a Hawaii week owner would have enough points for a like for like trade into a high demand resort with a TDI of 120-150. Certainly Phuket Plat. week owners can't trade for similar accommodations in Hawaii.

So if a Hawaii owner can't trade for a high demand week in Phuket and a Phuket owner can't trade in to a high demand week in Hawaii, who can get those weeks. It seems that they averages out the amount of points people would get based on the season that they owned, but then did they assign higher and lower points to exchange in to different weeks within the same system? That doesn't make much sense if that is how it is working.

 

[dougp26364]

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.

There is no sense in worrying about something that might not even happen. People worry to much IMHO. Most of what we worry about or are concerned about either never comes to pass or wasn't really what they were worried about.

If Marriott attempts to hit owners with a $5,000 price tag to join, I predict a resounding flop that will be heard throughout the timeshare indsutry. Very few will join, owners will be mad and satisfaction will go down. I doubt that's what they do but hey, I always doubted that Toyota would have a big enough recall to ever damage their corporate image or that investment banks would make such bad investments that they took the world economy down. So anything is possible. I'm just not going to be overly concerned until they lay it out in front of me and then I can make decisions about whether or not it's a good thing or a bad thing.

 

[dougp26364]

That's what I have been saying all along. It cannot possibly be otherwise when you don't start as a points based system... When you convert to points it is a zero sum game - half will like that they get 12 days instead of 7 in a trade to Orlando and half will hate that they get 3 days in a trade to Hawaii instead of 7.

In the end, they will end up with around 50% (that's like 200,000) dissatisfied owners. I'm a Platinum week owner and may end up "happy" but certainly wouldn't like a system where half the owners are not... Things cannot end well that way, no matter how they spin this (still alleged) system. :annoyed:

That is why I still hope they come to their senses and never launch it

So what the 50% that doesn't like the points system should do is just stick with the weeks based exchange system and call it good. For them, nothing is likely to change. You'll still have your week and you can still trade within the weeks based exchange system that is I.I.

But, it's ALL just speculation. What if they switch to a points based system like Hilton? All two bedroom units in a particular season have a set value. Premium views (ocean front, ocean view, garden view) or units with premium amenities (penthouse units with upgraded showers/linens/kitchens) cost more in points. Seasons also have different points values wtihin the HGVC system but, all basic 2 bedroom units have a set value.

Everyone feels Marriott is going to fall on a sword with any change and maybe that will happen. Then again, maybe we're all just getting our knickers in a knot for no good reason at all.

 

[DanCali]

So what the 50% that doesn't like the points system should do is just stick with the weeks based exchange system and call it good. For them, nothing is likely to change. You'll still have your week and you can still trade within the weeks based exchange system that is I.I.

If I didn't like what I was getting with the new system I'd stick with II. In the scenario I described, the Gold/Silver/Bronze weeks that stick with II will still get their 7 days, but getting 7 days into a platinum season may be even harder than ever before if those Platinum owners go to the points based system.

But, it's ALL just speculation. What if they switch to a points based system like Hilton? All two bedroom units in a particular season have a set value. Premium views (ocean front, ocean view, garden view) or units with premium amenities (penthouse units with upgraded showers/linens/kitchens) cost more in points. Seasons also have different points values wtihin the HGVC system but, all basic 2 bedroom units have a set value.

Everyone feels Marriott is going to fall on a sword with any change and maybe that will happen. Then again, maybe we're all just getting our knickers in a knot for no good reason at all.

I totally agree that it's all speculation. Some people are talking like it's a foregone conclusion, but what if they don't switch at all? Arguably, Marriott benefits even from all these rumors flying around as some buyers are now afraid to touch resale units. I have yet to see anything official from Marriott in writing about this program. As far as I'm concerned, it may never even see the light of day.

My opinion, as I've said all along, if that it is crazy to do something so radical when they already have nearly 500,000 (mostly) happy owners. If there are no more growth opportunities, they can do very well living off their well-deserved management fees at their 50 resorts. A good business should know when it's time to move on from a "growth" phase to a "cash cow" phase (the BCG Matrix idea). Any extreme changes to the system with the intent to boost short term profits may prove to have unintended consequences and be disastrous a decade from now.

But I won't lose any sleep over it, at least until an official announcement comes out...

 

[dougp26364]

If I didn't like what I was getting with the new system I'd stick with II. In the scenario I described, the Gold/Silver/Bronze weeks that stick with II will still get their 7 days, but getting 7 days into a platinum season may be even harder than ever before if those Platinum owners go to the points based system.




I totally agree that it's all speculation. Some people are talking like it's a foregone conclusion, but what if they don't switch at all? Arguably, Marriott benefits even from all these rumors flying around as some buyers are now afraid to touch resale units. I have yet to see anything official from Marriott in writing about this program. As far as I'm concerned, it may never even see the light of day.

My opinion, as I've said all along, if that it is crazy to do something so radical when they already have nearly 500,000 (mostly) happy owners. If there are no more growth opportunities, they can do very well living off their well-deserved management fees at their 50 resorts. A good business should know when it's time to move on from a "growth" phase to a "cash cow" phase (the BCG Matrix idea). Any extreme changes to the system with the intent to boost short term profits may prove to have unintended consequences and be disastrous a decade from now.

But I won't lose any sleep over it, at least until an official announcement comes out...

I don't think Marriott benefits from all the rumors. I'd wager that the population of owners that are even aware off this discussion is less than 1%.

I am very curious about what Marriott may be offering. Almost enought that i'd attend another sales presentation. I'm not really there quite yet. At least not for a March trip to Kauai. Maybe our May trip to HHI I might listen. If they still have any kind of sales office when we're in Breckenridge in June, the chances are higher. If not June then maybe when we're at Ocean Pointe in November.

The thing is, I'm not really in any big hurry to jump into a point system with Marriott as I have no issues using my home resorts and, trading the lock-offs, even if it's for non-Marriott resorts, will still work fine for me. Now if they offer something that's along the lines of HGVC's points based reservations system and it's either no cost of very low cost to switch, I'll have increased interest in the program. If it's along the lines of what little I've read about the pacific rim system chances are I'll never change, even if the cost is very low or free to current owners. This will only be a benefit to Marriott if the system is more attractive than the system they have now. If it isn't, only new purchases will end up in the new system and it will flop long before it gets off the ground.

 

[m61376]

Doug- Well said!
And, just fyi, I know when I use the term "concerned" I am using it loosely, only when referring to the discussion at hand. This isn't anything to lose sleep over because, as you said, if it isn't attractive to most owners it isn't going to be successful anyway and II will always be a viable option, IF it ever comes to fruition.

I didn't bother wasting vacation time sitting with a salesperson recently either, because there is nothing definitive for them to reveal and, basically, what's been bandied about here and elsewhere is just a whole lot of conjecture. I have no doubt that Fletch is being forthright (I'm not implying otherwise) but even he can reveal only what has filtered down, which clearly is different from what has been filtered down to a different but I'd say at least equivalently placed source. So anything is possible at this point. The only real example of a points based system that Marriott has offered is the Asia Pacific program which we can only guess was a test run for this.

Since that's at least 6 months old at this point, any info. on how successful it's been? While owners here likely would find tons of faults with it, I wonder how the average consumer (and I don't think Tuggers represent the average timeshare owner) views it. Has it been embraced?

I did hear that one of the reasons that Marriott has stalled was that the Ritz point program was a big problem (as in a bust), but I don't remember if that was from anyone with any credibility or just someone making an assumption.

 

[PerryM]

Oh No - He's Baaaaccckkkk....

I know, I know, I said I'd go to the beach the remaining week in Maui but someone sent me an eMail and I think they had a valid point:

Marriott is a resale buyer - who are they to disparage resale buyers?

EVERY ROFR is a resale purchase, every time they buy a unit, for whatever reason, on the resale market they become a resale buyer.

And they want to set up a caste system of "Developer Owners" Vs "Resale Owners"?

Folks this is all about corporate greed and how much money they can still wring out of your pocket - all the while acting like they are better than you are.

This was a great point I thought.

Back to the beach unless someone sends me an eMail.....

 

[winger]

Well, we paid the $3k (or roughly this much - through some developer hocus pocus upgrade+conversion+a nice grandfathering clause) or so conversion fee to buy into DRI's system two years ago - and we have been pleased with the point-based and internal system flexibility so far. We figure that money is well spent for the next 30+ years of traveling 'flex stays' versus 'fixed 7-night weeks' (like long three-day holiday weekend stays in Tahoe (we done alot of those!), 6 nights in Sedona upcoming spring break, etc.).

 

[DanCali]

Marriott is a resale buyer - who are they to disparage resale buyers?

EVERY ROFR is a resale purchase, every time they buy a unit, for whatever reason, on the resale market they become a resale buyer.

And they want to set up a caste system of "Developer Owners" Vs "Resale Owners"?

But unlike any other "resale owner," Marriott can resell the resale unit at retail prices and/or rent out the unit at high prices and greater flexibility (nighly basis, 3-day cancellation policy etc). Given this, they probably wouldn't care much resale prices go off a cliff. Why spend $10K and resell for $30K when they can spend $1K and resell for $30K?

 

[SueDonJ]

I know, I know, I said I'd go to the beach the remaining week in Maui but someone sent me an eMail and I think they had a valid point:

Marriott is a resale buyer - who are they to disparage resale buyers?

EVERY ROFR is a resale purchase, every time they buy a unit, for whatever reason, on the resale market they become a resale buyer.

And they want to set up a caste system of "Developer Owners" Vs "Resale Owners"?

Folks this is all about corporate greed and how much money they can still wring out of your pocket - all the while acting like they are better than you are.

This was a great point I thought.

Back to the beach unless someone sends me an eMail.....

Get a crackberry, Perry - then you can stay on the beach and enjoy your email at the same time!

I'm just not getting this "victim" attitude. IF Marriott rolls out a new exchange program that has higher initiation fees for resale buyers, it will be so that Marriott can get revenue from a source that's previously not been available to them. That's it! So you're right, it's about corporate profits. That's business - always has been, always will be. It's not about punishing any certain owners.

It it were, then it could be said that Marriott has been punishing its direct buyers for years by not exercising ROFR to the extent that resale buyers were able to drive that market to substantial devaluations. It seems it was very easy for some of you to see the other side of the coin you're flipping now, when you were able to take advantage of that devalued market that's been in effect for years. So again, if you think you're being victimized now, where was your sympathy for the victims of Big Bad Marriott for all those years?

 

[Stefa]

I'm just not getting this "victim" attitude. IF Marriott rolls out a new exchange program that has higher initiation fees for resale buyers, it will be so that Marriott can get revenue from a source that's previously not been available to them.

I agree with this. Actually I believe that if Marriott were to do something that significantly "devalued" resales the biggest "victims" would ultimately be developer purchasers who needed to sell for some reason.

I think the title of this thread is unfortunate because it has set a negative tone for the discussion. The devaluation the OP was concerned about was regarding policies that Marriott would not implement such as limiting access to your home resort.

 

[winger]

I agree with this. Actually I believe that if Marriott were to do something that significantly "devalued" resales the biggest "victims" would ultimately be developer purchasers who needed to sell for some reason.

....

NOT TOO FAR BEHIND THE 'BIGGEST LOSERS' column will be Marriott itself - IF more developer purchase candidates have the sense to ask the following (or similar) before signing on the dotted lines and understands what 'the results' of their question means (ie. retained value of what they are about to possibly purchase):

"What would I expect to get in return if I were to sell my unit next year (for any reason)? Can you provide me example(s) of recently sold units, say like one from eBay?"

 

[m61376]

I agree with this. Actually I believe that if Marriott were to do something that significantly "devalued" resales the biggest "victims" would ultimately be developer purchasers who needed to sell for some reason.

I think the title of this thread is unfortunate because it has set a negative tone for the discussion. The devaluation the OP was concerned about was regarding policies that Marriott would not implement such as limiting access to your home resort.

I agree- developer purchasers would be the biggest loser IF Marriott takes that route. Ultimately, how will this affect developer sales? The market is significantly different than it was even 5 years ago. Today, virtually everyone has Internet access (at least people with the means to make substantial purchases). Just like 95% of home buyers look at multiple listing services on the web, more and more people are either versed or will be in the timeshare market.

Whether or not Marriott touts their units as primarily a lifestyle investment, at least many people like to think that there is some retained value. If the value plummets, so might sales (although that's just speculation on my part). So, ultimately, everyone may stand to lose.

There are many other concerns wrt devaluation, besides limiting access to your home resort. There's limiting exchange opportunities, the likely limitations on like for like (size and number of days) for many trades, etc.. And I know Sue (and I'm guessing some others) feel that Marriott doesn't owe any allegiance to resale buyers, but devaluing a product that was bought under a certain set of rules is a valid concern. So, as long as we are embarking on a speculative discussion of a possible points system which may or may not ever come to fruition, I think the various topics discussed herein are pertinent.

 

[SueDonJ]

[deleted] Thanks, Winger.

 

[winger]

But some developer purchasers have had the sense to ask exactly that question prior to buying and were still able to determine for themselves that their investment dollars would buy usage value.

Imagine! Developer buyers with sense! Unbelievable, isn't it?

(Yes, that's irritated sarcasm. I'll take it back if you say that yours is sarcasm also, that you're kidding with the inference that no developer purchaser has sense.)

I just updated my wording -

 

[SueDonJ]

... the likely limitations on like for like (size and number of days) for many trades, etc..

"Like for like" were not words used by my sales rep for exchanges, but rather that (paraphrased) "II uses a system of rankings and filters whereby areas/resorts/#BR are considered, but because 3BR inventory is extremely limited, you may only be successful with 2BR unit exchanges." That's been our experience, too, with every exchange. Now if you're talking about one week always getting one week in II, yes, but on the flip side, with a points system a premium week could get more than one week. That's not necessarily a bad thing.

... And I know Sue (and I'm guessing some others) feel that Marriott doesn't owe any allegiance to resale buyers, but devaluing a product that was bought under a certain set of rules is a valid concern.

If this is what you "know" from all I've ever contributed to resale v. direct discussions, then it appears you're not reading me correctly. My thought is that Marriott considers "allegiance" to any of its owners only to the extent that its profit margins are not unduly affected, and it makes business sense to me that they will look for revenue streams wherever they can find them. As well, Marriott has a history (13-mo res, not exercising ROFR, etc.) of devaluing its product for all existing owners - direct and resale alike. None of us is immune.

 

[m61376]

Sue- You're being way too sensitive. Winger's post was critical of Marriott and not a dig at direct purchasers. He bought directly himself after careful consideration at the time. Just because at least some people feel that many direct buyers might hesitate to purchase if they felt that they were buying something with no inherent retail value (with a value solely in usage) by no means disparages anyone who feel that the usage value is worth shelling out 30, 40, 50 or even 80 thousand for that benefit. Everyone is entitled to place their own value on the "use" factor.

 

[SueDonJ]

Sue- You're being way too sensitive. Winger's post was critical of Marriott and not a dig at direct purchasers. He bought directly himself after careful consideration at the time. Just because at least some people feel that many direct buyers might hesitate to purchase if they felt that they were buying something with no inherent retail value (with a value solely in usage) by no means disparages anyone who feel that the usage value is worth shelling out 30, 40, 50 or even 80 thousand for that benefit. Everyone is entitled to place their own value on the "use" factor.

Evidently Winger got my point, enough so that he chose to change the wording to which I objected.

 

[m61376]

"Like for like" were not words used by my sales rep for exchanges, but rather that (paraphrased) "II uses a system of rankings and filters whereby areas/resorts/#BR are considered, but because 3BR inventory is extremely limited, you may only be successful with 2BR unit exchanges." That's been our experience, too, with every exchange. Now if you're talking about one week always getting one week in II, yes, but on the flip side, with a points system a premium week could get more than one week. That's not necessarily a bad thing.



If this is what you "know" from all I've ever contributed to resale v. direct discussions, then it appears you're not reading me correctly. My thought is that Marriott considers "allegiance" to any of its owners only to the extent that its profit margins are not unduly affected, and it makes business sense to me that they will look for revenue streams wherever they can find them. As well, Marriott has a history (13-mo res, not exercising ROFR, etc.) of devaluing its product for all existing owners - direct and resale alike. None of us is immune.

Working backwards- as Dave posted, most (if not all) the resort documents contained wording about the 13 month rule- so most, if not all, people purchasing should have been aware of it when making their purchase decision. That is very different from changing rules/benefits after the fact. Marriott has never had 2 subsets of owners wrt usage of their property- which is why I still maintain that it is unfair for them to superimpose such a categorization., You are free to disagree- it doesn't make you right and me wrong (or vice versa, of course). I think I have read and understood your stance on this more than correctly; I think everyone here might be getting a little tired of that bantering, so let's agree to disagree.

As for the first part- yes, of course, there has always been a filtering system, and not even a Plat. premium week was guaranteed of a like for like trade. But, there was always at least the potential (subject to availability, of course) of a 2BR Platinum unit in one locale getting a 2 BR elsewhere for the same period of time (7 days). If you look at the Asia Pacific program (and I reference that only because it is a Marirott designed program that they felt was equitable and salable) some Plat. 2BR weeks will only qualify for smaller units and/or shorter time frames. So there stand the very real possibility that there will be a lot of unhappy Platinum week owners, to say nothing of Gold, Silver and Bronze week owners. In fact, if you look at the other program, even owners of premium Plat. resorts may not have enough points to trade back into peak weeks (and I am not just talking about holiday weeks- weeks with TDI's greater than 120). So that's what I referring to when I summarized it as limitations on like for like.