Speculation About Marriott's New Timeshare Structure [merged]

[SueDonJ]

I usually just skim speculation/rumor threads so sorry if I missed these questions previously.

Will my MVCI property be devalued on the resale market if it is converted to a points system? Or, put another way, would the value MVCI property be greater as a week or a points system?

It's impossible to know until Marriott announces the terms of a new points system. As Dave said, some owners will love it and some won't. Right now there isn't any guarantee that a new system will be introduced at all.

If the owners at a particular resort aren't happy with the new system, what prevents them from getting rid of Marriott?

Nothing, except that the bylaws which specify the actions necessary to remove the management company must be upheld. Owners can't just get together and storm the castle ; they need to follow procedure.

 

[Twinkstarr]

I would be less likely to part with $30,000 if I knew Marriott was actively working to devalue my new purchase.

Which is why I didn't spend the $30,000+ for Surfwatch.

 

[DanCali]

I usually just skim speculation/rumor threads so sorry if I missed these questions previously.

• Will my MVCI property be devalued on the resale market if it is converted to a points system? Or, put another way, would the value MVCI property be greater as a week or a points system?
• If the owners at a particular resort aren't happy with the new system, what prevents them from getting rid of Marriott?

Darrell

The resale value is based on what a resale buyer can do with the purchase. If and when new rules come out they may or may not impact resale values. As you point out, so far it's all speculation and rumors.

Getting rid of management is not an easy task. Just ask Starwood owners whose MFs increased by 100%+ over 5 years (I own both systems)... You have to get at least 50% of owners to buy into the benefits of doing something that drastic. Do you even know how to communicate with 3% of owners at your resort? Also, don't forget that if you get rid of Marriott you likely lose the 24 day II priority for that resort... How do you think that will impact resale values?

 

[kjd]

Marriott recently changed the MRP Elite status to include stays at Marriott timeshares. It applied to everyone regardless of how you purchased your timeshare.

Marriott recently introduced a new benefit that will allow for one night's MRP credit for every $3,000 charged to a Marriott Visa credit card. It will allow many people with timeshare credits who previously wouldn't qualify, to reach the next Elite status level. It applied to everyone regardless of how you purchased your timeshare.

Marriott recently announced that Elite status members can rollover their excess nights credit to the following year. That also applied to everyone regardless of how you purchased your timeshare.

Now we are told that there is a secret plan that is being created specifically to do-in the resale buyers. Aside from a lot of heresay there has not been one bit of proof that it is being developed or will in fact occur. The best that can be offered is an imaginary point system that has invited paranoia and speculation. Marriott will of course act in it's own interests. Making present timeshare owners mad who are loyal customers, valuable credit card holders and reliable MF payers wouldn't seem to fit Marriott's overall business plan. (Not that there aren't some who wouldn't mind seeing resale buyers suffer.)

Therefore, I will believe any changes to the program when I see it and then will act accordingly. I can see no good reason why Marriott would want to conduct a vendetta against resale buyers. If any changes to the program are made I believe that they will be made for sound business reasons not for retaliation.

 

[DanCali]

Marriott has NEVER done anything to prop up resale value.

That's exactly why I don't think their sales model is sustainable in the long run - new system or not. On average there are 1-2 of these types of threads each week on the Starwood Board. I bet there are many other retail buyers who just read these threads and rescind without posting. This will not get better for developers and the voices telling retail buyers to rescind will only get louder if resale weeks are worthless.

Marriott figured a long time ago that current owners are more likely to buy a unit than others. That is why they came out with the 13 month rule. While that rule does not (or cannot) discriminte against resale buyers it promoted both retail and resale buying. Taking a "carrot" approach with multiple week retail buyers like offering extra perks (e.g. size/view upgrades at checkin, waitlisting for prime week reservations, no lockoff fee, no hotel point conversion fee, dedicated reservations line with shorter hold times, etc) may justify the extra cost even for many resale owners and spur additional informed retail sales. This is, in my view, a much more productive and long-term approach than the "stick" approach against resale buyers. Especially with a customer base of hundreds of thousands of existing owners.

 

[SueDonJ]

Marriott recently changed the MRP Elite status to include stays at Marriott timeshares. It applied to everyone regardless of how you purchased your timeshare.

Marriott recently introduced a new benefit that will allow for one night's MRP credit for every $3,000 charged to a Marriott Visa credit card. It will allow many people with timeshare credits who previously wouldn't qualify, to reach the next Elite status level. It applied to everyone regardless of how you purchased your timeshare.

Marriott recently announced that Elite status members can rollover their excess nights credit to the following year. That also applied to everyone regardless of how you purchased your timeshare.

Now we are told that there is a secret plan that is being created specifically to do-in the resale buyers. Aside from a lot of heresay there has not been one bit of proof that it is being developed or will in fact occur. The best that can be offered is an imaginary point system that has invited paranoia and speculation. Marriott will of course act in it's own interests. Making present timeshare owners mad who are loyal customers, valuable credit card holders and reliable MF payers wouldn't seem to fit Marriott's overall business plan. (Not that there aren't some who wouldn't mind seeing resale buyers suffer.)

Therefore, I will believe any changes to the program when I see it and then will act accordingly. I can see no good reason why Marriott would want to conduct a vendetta against resale buyers. If any changes to the program are made I believe that they will be made for sound business reasons not for retaliation.

But where has it been said that Marriott is doing this specifically as a vendetta or retaliation against resale owners? Implementing a program that may stem the losses Marriott is suffering because of the now-mainstream external resale market IS a sound business reason!

As with any changes in existing policies, Marriott can expect that some current customers will be happy and some will not. With this particular rumored change, speculation is that all exchanges may be affected, and that silver/bronze developer purchasers may end up as unhappy as resale platinum purchasers. Don't know if it makes it any easier to take but this has the potential for equal opportunity unhappiness all around, except in the Marriott financial offices. That's their focus.

 

[SueDonJ]

... extra perks (e.g. size/view upgrades at checkin ...

I HATE this idea, hate it hate it hate it! IMO owners should always ALWAYS always be placed into the unit size/type/view that they purchased when they're staying on their owned weeks. Maybe a once every ten years exception when the ceiling in the only unit left caved in the night before, but that's it. You get what you paid for, period, regardless of whether you paid developer or resale dollars.

(This would benefit me, too, I'd love an upgrade to a platinum oceanvista, but I still HATE THIS IDEA. Nothing could be more unfair to other owners. GRRRRRRRR. The thought of it makes me growl.)

... waitlisting for prime week reservations, no lockoff fee, no hotel point conversion fee, dedicated reservations line with shorter hold times ...

I do like these ideas, would like to see reduced fees and a waitlist system implemented for every owner even if the new points program isn't.

 

[SueDonJ]

... Taking a "carrot" approach with multiple week retail buyers like offering extra perks (e.g. size/view upgrades at checkin, waitlisting for prime week reservations, no lockoff fee, no hotel point conversion fee, dedicated reservations line with shorter hold times, etc) may justify the extra cost even for many resale owners and spur additional informed retail sales. This is, in my view, a much more productive and long-term approach than the "stick" approach against resale buyers. Especially with a customer base of hundreds of thousands of existing owners.

(rant over, now on to your point ...)

I guess I see an internal exchange system that favors developer purchases as what you call a "carrot" approach toward retail buyers, and not as a "stick" against resale buyers. It's all in the perspective, sure, but wouldn't any changes that are selectively applied to certain owners affect one group positively and another negatively? If all of the carrots you mentioned were implemented for retail buyers, wouldn't resale buyers be negatively affected to some extent?

Regardless, Marriott isn't looking for ideas to foster customer appreciation. They want to generate revenue and stimulate sales, and an internal/points exchange system that is beneficial for the majority of their owners may do that.

 

[NJDave]

I try to keep a positive outlook. The change to points could end up being better to existing resale owners.

We own two resale platinum units in Orlando. If there is a fee to convert similar to what Hilton charges (e.g. $499 for Bay Club?), we could end up with a more flexible system for little cost. It all depends on the cost to convert and the number of points assigned to the unit.

We own Hilton and Marriott and like the Hilton "system" better (although Marriott is better due to the number and quality of resorts and its affiliation with Interval rather than RCI). I welcome a change (at a reasonable cost) to a points system similar to Hilton even though the new system could result in the need to use more points than our timeshare would obtain if we were to exchange for example into a Hawaii unit with a view. We could end up with flexibilty to split or extend our week, splurge on an upgraded / larger unit, downsize to save points when the larger unit is not needed or obtain excess short stay inventory for cash if a Hilton type point system is implemented.

 

[laurac260]

finding all this jargon difficult to sift thru...

Perhaps because I am still new at this? At any rate, we bought a Grande Ocean platinum week in Hilton Head to use at Grande Ocean. We are beach people. We have no desire to travel internationally, nor do we ski, golf, etc.
We bought resale. Do I have any reason to be concerned about any new program that may be on the horizon? (not to discount anyone else's concerns, just wondering if I need to keep following this thread considering our present status).

 

[JimIg23]

We own two resale platinum units in Orlando. If there is a fee to convert similar to what Hilton charges (e.g. $499 for Bay Club?), we could end up with a more flexible system for little cost. .

If converting costs about 500 per week and the benefits are pretty good, I would buy in. 1-3k, no way, it would not matter how good it would be.

 

[ocdb8r]

First, I don't think Marriott is suffering losses from resales much larger now than in the past. ROFR propped resale prices up but I fail to see how they drove REAL business to Marriott directly. Because Marriott has never offered special perks to direct buyers other than Marriott reward points, most who were aware of the resale market were likely to buy there for the savings, no matter how little that savings was...and in many cases, despite ROFR, the savings were still quite substantial. I think the REAL impact to Marriott's sales has been the same as it is for all timeshare sellers - the economy. I doubt the pullback of ROFR has made things that much worse.

Second, as has been pointed out, Marriott has a history of treating resale owners on a level playing field with direct buyers. There really isn't anything in their actions that points to a change in this attitude. Further, it's not like the sort of tactics employed by the other timshare companies have been particularly successful. I would be surprised to see Marriott go down the same failed path as others.

Third, even if they do decide to make such an unwise decision, I am confident existing resale owners will be grandfathered in to the new system. If a new points based system is to be successful, it is going to require as much participation as Marriott can garner in the beginning. There are too many resale owners out there for them to exclude those units from a trading system if they expect to successfully match trades. Inventory is king and they are going to want as much inventory as possible.

Finally, I believe the primary motivation for such an offering is not to prop up direct sales, but rather to create an additional revenue stream. I can't see why Marriott would want to deny itself the rewards of full participation. This is the big error I think Starwood is making...they are losing out on LOTS of exchange fees by denying resale owners participation in their internal exchange system. I have forked over thousands to II for exchanges right back into other SVO resorts...why Starwood doesn't want a piece of those fees I don't understand. I think lazy sales people have convinced some executives that they get some sort of "real" advantage from holding this over possible direct purchasers...but at the end of the day this is just NOT the case.

 

[kjd]

Where has it been said that Marriott is doing this specifically as a vendetta or retaliation against resale owners?

It's been said or implied throughout this thread by several people. There is considerable discussion of an imaginary point system and the effects it will have upon resale owners in particular. Right now, a point system doesn't exist so all of it is speculation and should be taken as such.

There are over 400,000 members of MVCI. Many of them have the Marriott Visa credit card and pay their maintenance fees promptly. They also spend a lot of money at various Marriott entities throughout the year. That includes resale buyers as well as direct purchasers. Often they are the same persons. They are loyal customers.

Marriott is not going to set fire to their business by devising a scheme that will be directed at the resale market. As mentioned before, Marriott should be doing everything they can to prop up timeshare values for their own benefit. If there are any future changes they likely will benefit all owners, as they have done so in the past.

 

[DanCali]

If all of the carrots you mentioned were implemented for retail buyers, wouldn't resale buyers be negatively affected to some extent?

The "carrots" I mentioned may make resale buyers feel a bit more like second class citizens but I don't see those carrots as having a negative impact on resale prices (they wouldn't be taking anything you have right now). Ultimately, that's the best determinant of how much any changes really matter.

 

[SueDonJ]

There is considerable discussion of an imaginary point system and the effects it will have upon resale owners in particular. ...

With all the discussions it seems the only thing that's been said that may have any validity to it at all is that resale owners may be charged a higher initiation fee to join the points program, and there is some question as to whether a grandfather clause will be included. All of the salespeople's rumors about different reservation policies or inferior unit assignments, etc. have pretty much been dismissed as ridiculous.

The "carrots" I mentioned may make resale buyers feel a bit more like second class citizens but I don't see those carrots as having a negative impact on resale prices (they wouldn't be taking anything you have right now). Ultimately, that's the best determinant of how much any changes really matter.

Well, I guess if Marriott had a history of taking actions to protect the future resale prices of their developer inventory, then I'd be more inclined to believe that it would be a consideration for them now. Resale history, though, leads me to believe that their primary concern is with being able to move their own inventory, not their owners' inventory.

 

[Latravel]

Why would anyone buy from them if they treat resale units differently and consequently drive resale values to zero? QUOTE]

I don't think they really care what you do with your unit or it's resale value once you buy from them. Timeshares are NOT investments. You were never guaranteed a rate of return. They just want you to buy directly from them to get more money for their company and shareholders.

Only a very small percentage of people buy resale (less than 7%) and i'm sure most have internet access. A person who has bought directly from Marriott buys an average of 4 weeks from Marriott.

Which demographic or group of people do you think they will concentrate their efforts on? Who do you think they will target? Is this really a surprise?

 

[James1975NY]

The "carrots" I mentioned may make resale buyers feel a bit more like second class citizens but I don't see those carrots as having a negative impact on resale prices (they wouldn't be taking anything you have right now). Ultimately, that's the best determinant of how much any changes really matter.

I would agree with this. At the least, it will take quite a bit of time to have an impact on resale prices.

 

[SueDonJ]

Perhaps because I am still new at this? At any rate, we bought a Grande Ocean platinum week in Hilton Head to use at Grande Ocean. We are beach people. We have no desire to travel internationally, nor do we ski, golf, etc.
We bought resale. Do I have any reason to be concerned about any new program that may be on the horizon? (not to discount anyone else's concerns, just wondering if I need to keep following this thread considering our present status).

Laura, I think the owners who stand to be less or non- impacted by any new internal/points exchange system are the owners like you who bought your weeks for the sole purpose of using your home resort.

The only group of owners which may be protected more than you (against any inherent devaluation in such a program) is the group of developer purchasers who also bought for that sole purpose, because they would presumably pay less to join than you would if your future plans include exchanges.

Overall, I'm not certain that any weeks will be devalued as much as the resale buyers here seem to think will happen, especially if Marriott offers the option to all buyers in the future. Each will just have to determine if the applicable initiation fee is worth the exchange privilege.

It really is a wait-and-see game, though, and none of us can be certain of anything unless and until Marriott actually announces and implements any changes.

 

[rsackett]

I heard from a good source that as of June 30th resale buyers will no longer be able to make reservations at their home resorts more that one week in advance. Marriott will also charge resacle owners a $200 "Reservation Fee" to make their reservation. Direct purchasers from Marriott who opt into the new points program will have the option of displacing resale owners who have fixed weeks if the owners have not called in at exactly 331 days prior to their fixed week check-in day to confirm their use for that year.

Alsio all resale owners MUST where a red "R" at all times when on site.

Ray

 

[EducatedConsumer]

I'm confused by the title of this thread and some of the discussion.

Is this really a case of Marriott "devaluing" someone's timeshare, or Marriott finally placing a quantifiable measure on its timeshares, so that the peak season owners enjoy benefits that the non peak season owners may not enjoy? (e.g. thereby dispeling the old TUG myth that a winter week at Spicebush or Swallowtail could get its owner practically anywhere they wanted to go in the Marriott system).

If anything, it sounds like Marriott may be leveling out the playing field to me, and drawing upon some of the best practices of Disney and the (very) few best practices of Starwood.

Of course, until any of this is communicated by Marriott, it's all speculation.

 

[Stefa]

Only a very small percentage of people buy resale (less than 7%)

Which is why I don't think Marriott will make much of a distinction between the two groups beyond the suggested higher buy-in price for the points system. There is little reason for them to do so.

 

[SueDonJ]

I heard from a good source that as of June 30th resale buyers will no longer be able to make reservations at their home resorts more that one week in advance. Marriott will also charge resacle owners a $200 "Reservation Fee" to make their reservation. Direct purchasers from Marriott who opt into the new points program will have the option of displacing resale owners who have fixed weeks if the owners have not called in at exactly 331 days prior to their fixed week check-in day to confirm their use for that year.

Alsio all resale owners MUST where a red "R" at all times when on site.

Ray

Ray

None of this is worth squat if there aren't fresh flowers and a teal ottoman in my unit when I get there.

 

[JimIg23]

They will make the resale owners cut the flowers and fluff the pillows.

 

[Latravel]

Which is why I don't think Marriott will make much of a distinction between the two groups beyond the suggested higher buy-in price for the points system. There is little reason for them to do so.

Very possible. This is probably true for the initial roll out of the product because they already lost the sale. But, for future sales, I can see them making more of a distinction between resale and developer.

 

[dougp26364]

I HATE this idea, hate it hate it hate it! IMO owners should always ALWAYS always be placed into the unit size/type/view that they purchased when they're staying on their owned weeks. Maybe a once every ten years exception when the ceiling in the only unit left caved in the night before, but that's it. You get what you paid for, period, regardless of whether you paid developer or resale dollars.

(This would benefit me, too, I'd love an upgrade to a platinum oceanvista, but I still HATE THIS IDEA. Nothing could be more unfair to other owners. GRRRRRRRR. The thought of it makes me growl.)



I do like these ideas, would like to see reduced fees and a waitlist system implemented for every owner even if the new points program isn't.

In the two points based systems I own, owners do get the exact size unit, season and view they paid for. They simply have the option to move up, move down or change seasons. Each has a home resort priority window where owners at that resort can snag the unit type/view they own before anyone else has a chance. It's very similar to the floating weeks system Marriott has now in that regard.

After the home resort window has passed, owners of other seasons, views and sizes of units can pick from what's left over after the home resort resrevation window has passed. If you don't need that three bedroom unit, reserve a one or two bedroom unit instead. Want the ocean front rather than ocean view? Borrow points from next year and move up in view for a year. Need a larger unit for a family reunion? Borrow points and reserve a three bedroom unit rather than the one bedroom unit you own. Can't stay 7 nights this year because there is some other obligation or you recently changed your job? Reserve a couple of weekend stays rather than a full weeks stay.

You only hate it because you don't understand it and, mostly because it's all just rumor as of right now. It's easy to hate the idea of something when you don't have any of the details. Generally speaking, the two points based reservations systems we own are much more flexible than what Marriott presently has but, we still have the same rights of unit type, view and season that Marriott offers. The difference is I can move up, move down and change season so much easier with a points based system than I can with Marriott.