Speculation About Marriott's New Timeshare Structure [merged]

[m61376]

I understand what you're saying about the economy affecting everything, but circumstances dictated that some places were hit harder than others. Marco Island is one of those places. It would be unfair for Marriott to not acknowledge that in a points exchange system.

The only problem is that you are assuming that the area will rebound in a reasonable time period and that the resort will reflect the presumed demand. I don't think any valuations should be placed on what might have been or what should be in the future, but on the here and now. Valuations can always be adjusted in the future if the situation dictates it.

Some areas will likely command higher values (or lower) just because of where they are located. Tropical resorts (Hawaii, Caribbean, etc.) command high prices just because of where they are, and for these destinations the location rather than the property amenities may dictate the valuation. For other perhaps "lesser" locations, the resort quality may have a larger factor in the valuation. Certainly I can understand where adjacent properties like Ocean Pointe/Oceana Plams and the new Maui villas/original Maui Ocean Club will command different valuations, as I'd expect the market rental rates would reflect.

We were on a roll agreeing - I guess we'll have to disagree here, because I don't think it is fair for Marriott to assign point valuations based on what their perception is; frankly, I think the only fair way to assign points would be to assign them according to an objective reality, which is why I was pontificating that the rental rates would be a market reflection. If Marriott feels free to randomly assign values as to what they'd like them to be, we embark on a slippery slope, with the likelihood of property inflation just to enhance sales. I think that IF they create a fair system that accurately reflects market realities it will go a long way to engender consumer confidence; that would make for a very successful product.

 

[SueDonJ]

Maybe we can compromise. If Marriott agrees to revisit Crystal Shores' point values when the transition is complete, then I might be okay with them at the roll-out not allotting full point values commensurate with the expected product.

Hmmmm. Except that the folks who bought in paid a huge chunk of money, and their exchange value should be somewhat equal to the investment Marriott determined was necessary for the product. And Marriott's pricing structure at the time wasn't in place simply because Crystal Shores was a new resort; it was supported by the product and area. That's apparent when you see the similar development all up and down the beach.

This is the reason that Marriott pays somebody other than us the big bucks to figure out this stuff. They know exactly how much they've sunk into the project and what it's going to take to turn things around. And it's for sure that Crystal Shores owners are voicing their opinions to them - I would. Man, those employees must go home every day with gigantic headaches.

 

[SueDonJ]

We are very lucky. We live on the Southern Coast. There are more things to do here then any timeshare we ever stayed at. So we do not need a Platium week. We have Gold. I still say, we will keep our Gold Barony and use it every year Labor Day week as we have in the past.

Yep, we love the seasons that we get at Hilton Head with our Gold Barony and SW weeks; we bought the Plat SW week to use primarily as the anchor for reserving Memorial Day at the 13-month mark, and because it's a stronger trader for exchanges.

 

[Steve]

A bit about Naples...

Admittedly I am not that familiar with the areas as you are, but my impression from talking to friends (although I could be wrong) is that Naples was not the vacation destination that HH was even before the recession, so I am not sure that the lesser demand for the area is just a byproduct of the economy affecting Marco more than HH.

I'm not sure where the impression that the Naples area is not a highly desirable vacation destination comes from. I love Hilton Head Island, but Naples is actually more upscale...and it is considered an extremely desirable place to both live and vacation. The fact there are not one, but TWO Ritz Carlton hotels in Naples should give some indication of the area's appeal:

http://www.ritzcarlton.com/en/Properties/Naples/Default.htm

http://www.ritzcarlton.com/en/Properties/NaplesGolf/Default.htm

There is also a very elegant Hyatt:

http://coconutpoint.hyatt.com/hyatt/hotels/index.jsp

And a Hyatt timeshare:

http://hyattcoconutplantation.hyatt.com/hyatt/hotels/index.jsp

Naples also offers more sophisticated shopping, dining, and galleries than you will find at Hilton Head Island. While Marco Island per se may not offer all that Hilton Head does, the Naples area is pretty classy.

Steve

 

[m61376]

And I also think it is clear that Marriott made a mistake when they priced Marco. Perhaps they made it nicer than the area would command; a similarly appointed resort may have done much better in a different locale. They may be smart, but they're not infallible. They misjudged the market. Fletch alluded to that when he stated that they'd have to rely on a points system to sell there. That's why even at a 35% discount they still lie fallow (and I do feel sorry for the original purchasers).

The problem, as I see it, with sanctioning Marriott to allot points based on the prices they set for the resort is twofold- you can't really compare resorts prices of resorts built during different time frames and secondly, the potential is there for Marriott just to assign higher point values to enhance sales.

If I own a Platinum week somewhere, I want to be able to trade into an equivalent property for the same size unit and the same number of days. Just because something is newer doesn't mean it is better or more desirable. It shouldn't be put out of my reach for exchange just because Marriott artificially enhanced its price tag. If I am giving up something with a certain value/demand, then I should be able to redeem it for something of comparable value. The fairest way to ascertain value is what a reasonable and average person would pay, and I suggest that the market rental rates already in place reflect that. So, if Marriott chooses to charge $500 per night for the property I am trading in, then I should be able to trade into a property that costs $3500- whether that means I get 7 days in a $500 per night property or 14 days in a $250 per night, or want to live it up for 4 days in an $875 per night resort. I wouldn't mind getting fewer days if I was truly getting something better (but better has to mean of a higher value- better amenities and/or location such that the total value was higher). Then I'd feel like a got an equitable trade and would embrace the system. I think if it was developed and sold that way even owners of lesser weeks who will likely be more resistant to the change would see the value and sense of such a program, IF such a program was introduced.

Steve- I didn't mean to infer that it wasn't a nice area. What I was saying is that if the villas are superior and if they command the same prices as the HH ones (as Sue indicated they did), then it would follow that the area perhaps wasn't quite as desirable, since hotel rates reflect quality and location. The area may be beautiful, but it stands to reason that if the resort is that much nicer it would command a higher price if the destination was at least as desirable. A lot of factors enter into vacation appeal; of course, quality is one, but location and access are also important factors that may make one area preferable over another.

 

[Steve]

Steve- I didn't mean to infer that it wasn't a nice area. What I was saying is that if the villas are superior and if they command the same prices as the HH ones (as Sue indicated they did), then it would follow that the area perhaps wasn't quite as desirable, since hotel rates reflect quality and location. The area may be beautiful, but it stands to reason that if the resort is that much nicer it would command a higher price if the destination was at least as desirable. A lot of factors enter into vacation appeal; of course, quality is one, but location and access are also important factors that may make one area preferable over another.

If Hilton Head Island is a superior area, then how do you account for the fact that rates at the Marriott hotel on Marco Island are far higher than rates at the Marriott hotel on Hilton Head Island?

Perhaps this is just a timeshare phenomenon. Marriott timeshares are very well known on HHI. It is where Marriott first entered the timeshare market in 1984, and Marriott is extremely well established in the timeshare market there. In contrast, Marriott's Crystal Shores is new, and Marriott is not well known for timeshares in Southwest Florida. This may, or may not, play a role in the lesser popularity of Crystal Shores compared with the Hilton Head Marriott timeshares. But it is significant.

Or perhaps Sue is simply incorrect when she states that the rates at Crystal Shores and Hilton Head are about the same. Checking dates in April on www.marriott.com, I find Crystal Shores commanding $689.00 per night versus $446.00 at Grande Ocean. Oops.

Finally, as you can see from the links I provided...if you take the time to look at them...the Naples area has far grander hotels than anything on HHI. Naples is considered a truly first class vacation destination not only here in the USA...but also in Europe. I think you need to learn more about the Naples area before passing judgment just based on the supposed rental rates (which might not even be correct) at Marriott's Crystal Shores.

Steve

 

[SueDonJ]

I'm getting confused because the rates I was comparing are the ones you found, m, in this post here. Remember? I tried to contrast them all for the first weeks of June and July but didn't come up with rates because there was no availability.

Steve, I am surprised that there's not more of a discrepancy between Marriott's Hilton Head and Marco Island timeshare rental rates because I think Marco should be higher! Crystal Shores is a higher-quality product and Marco Island is more upscale than Hilton Head, which is why I believe that all the development money poured into the place will pay off when the economy turns around. Based on what we saw, Marriott didn't overprice Crystal Shores but it's definitely been impacted by this economy.

I might be leaving the impression that the place is a ghost town now and things are boarded up? I dunno. That's not how it is, though - most of the buildings all along the beach are finished, but going by the real estate mags the new/rehabbed condo units haven't sold yet. And of course, Marriott's timeshare resort is only complete through Phase 1. Everything else - the restaurants and shopping, etc. are open for business.

 

[m61376]

I compared the rates for Crystal Shores to Aruba, assuming they were both desirable locations with perhaps the Caribbean destination having more location appeal and Marco more "wow" factor to the units themselves, and I tried to compare several time frames. I never compared the prices to HH. If, as Steve posted, the rates are different for perhaps a lot of the year (maybe the time frame Sue looked at was higher in HH than usual- I don't know- as I said, I was basing my assumption of equivalence based on the posts that they were similar in rates; it appears that Marco's rates drop over the summer, at the time when I'd assume HH's are the highest, and maybe that's what caused the confusion), then it would make sense that the amenities of the resort is what commands the higher price point. The 446 versus 689 rates you posted for an April week are very significantly different, and certainly indicate a more desirable product.

I did not mean to malign Marco as a destination. And I was really just picking HH as a popular high demand location for comparison. My point was, and still is- and, actually, Steve, if the price points differ and Sue made a mistake when she thought they were similar overall, it illustrates the point I was trying to make- that the overall market for demand is generally reflected in the market rental rates. Things are worth what people are willing to pay for them, which is a combination of both location and resort construction/amenities, and the only way to objectively ascertain and assign value is to use some objective criteria.

I'd welcome a system where the point values were set based on something real- of course, how nice a villa is a biggie (just as a Ritz commands a higher rental than a Marriott everything else being equal), but location and designation demand are big factors as well (which is why the same hotel, or the same villa, with exactly the same amenities may command far different prices at different locations or at different times of the year).

Of course, Marriott will assign points based on the way they want to assign them, and they will likely reflect their desire to promote sales in particular areas. That's a potential pitfall when developers embark on a points system; it can be unfairly manipulated, as Starwood has done in the past. IF they take the high road and set points according to a measurable demand factor (which is why I'm harping on rental rates, because that's one that's already in place and presumably accurately reflects real demand for both the area and the property in the area), they would have, in my opinion, a very attractive program. If the perception is that people truly are getting their money's worth- and, in you example, that might mean trading 7 days in that Aprill HH week for 4 or 5 days in a Marco week. Points in a trading system are in lieu of currency, and their exchange rate should be similar.

 

[kjd]

This is a real interesting discussion about the relative value of points and comparing one area to another. I find myself agreeing with posts that seem to contradict one another.

It is my impression when looking at point systems (Hyatt, Hilton, Starwood) that they have a built-in system of equity. Hyatt for example, simply requires more points to stay in the more expensive locations and therefore your initial point purchase costs you more. I could be wrong but that what it looks like to me.

As far as the issue of Crystal Shores and Hilton Head goes I think the two areas are alike in some respects but not in total. A major difference is that Naples/Marco Island is below the sub-tropical line. That means there are no traditional seasons like winter and spring etc. We have only two seasons: wet and dry. Hilton Head has four seasons and therefore is designated accordingly by Marriott, as platinum, gold, silver and bronze.

As previously mentioned CS has a better climate for longer stretches of the year. February is generally considered as the best climatic month but I think November may be just as good if not better. Certainly, that's been the case this year. That should result in a longer platinum season which gives CS owners and other Marriott owners more availability during high seasons. Hence, another reason for a higher buy-in price for CS owners who rightfully should also enjoy more trading power. I'm not sure that CS owners do with I.I.'s present trading system.

There is no question that Naples/Marco Island has been one of the hardest hit areas in the country in this recession. Unemployment is around 12% only because many without work have left the area. Otherwise it would be higher. We simply are not a diversified economy with only tourism, agriculture and construction as our main sources of jobs. However, don't feel sorry for us because this area is far from being depressed. Maybe we can get the Cubs to move here from Arizona.

As mentioned in an earlier post we are one of the only places in the US that has two Ritz-Carltons. We have the most millionaires in Florida living here. (Passed up Palm Beach several years ago). The most expensive single family home in this area sold for $46,000,000 and there is one presently on the market for $60,000,000. Naples airport has as many private jets flying in and out of it as anywhere.

I think that when Marriott bought the old Raddison property they paid a price at the top of the market. Obviously, they crunched the numbers and thought that the original CS prices were justified. The timeshare market everywhere has changed and Marriott needs to re-adjust their pricing. That said, it is my feeling that CS will still command one of the highest prices within the Marriott brand. In the future if sales are still slow CS may morph itself into a "boutique resort". The consequences of that is something to think about.

 

[MOXJO7282]

I'm familar with Marco Island(BIL owns a condo, engaged there), Hilton Head (specifically Grand Ocean and Sea Pines nature preserves), and Naples(close friend has lived there many years, visited 2 times) I would say the difference in price relates to the supply side of the equation and not which is how much nicer than the other.

All have premium attributes in my book, but IMHO Naples and Marco Island have a smaller supply than overbuilt HHI, so I think that is a big part of it.

Personally as a guy with a young family from the northeast, I'd go GO at HHI, Marco Island and Naples.

GO with the great beach location and proximity to the Sea Pines nature preserve is just a special place for us. Marco Island has nice beaches but not as nice as GO IMHO, and there isn't too much else to do.

Naples is very nice. Some spots super highend and high brow as well, so that isn't a place a young family would think of first as a fun vacation spot.

 

[SueDonJ]

Oh what a gigantic dopeslap I need! I looked at "SC" in m's post about eight times and thought "South Carolina" every time.

So here's some comps using Crystal Shores and Grande Ocean (the only HH resort available all four dates):

3/24-25, 2BR, Platinum CS, Silver HH
CS ~ $649-$729
GO ~ $310-$322

4/21-22, 2BR, Platinum CS, Gold HH
CS ~ $489-$569
GO ~ $405-$417

6/9-10, 2BR, Gold CS, Platinum HH
CS ~ $489 (only available, no ocean view)
GO ~ $450 - $462

8/4-5, 2BR, Gold CS, Platinum HH
CS ~ $409-$439
GO ~ $495-$507

and for the two hotels (MI Marriott Resort and Spa and HH Marriott Beach Resort, Golf Club & Spa,) both Cat6 for Marriott Rewards, lowest price for 1K/2DBL:

3/24-25 ~ MI $469 and HH $209

4/21-22 ~ MI $359 and HH $209

6/9-10 ~ MI $279 and HH $279

8/4-5 ~ MI $279 and HH $279

When you take seasons into consideration, with the resorts it looks like CS is valued a little bit higher but still not as much higher as I would expect. I really think it's because of how much more Hilton Head is established, both like Steve says as an MVCI base as well as the transitional aspect of Marco Island.

We stayed at the HH hotel this past December and visited the MI one in November. From what we saw, I'd say both are completely established so these hotel numbers do make sense. MI is, again, a superior product to HH's, June and August are low season at MI and high at HH, so that should balance out to equal rates the way it does. The large discrepancy during the other two months reflects MI's spring high demand, again makes sense.

None of this has changed my mind. Crystal Shores was perhaps doomed to slow sales because the demographic for that price point in a timeshare should be a smaller target group than the traditional Marriott customer. But the pricing structure did make sense based on the overall area and the development money being poured in all over, and the resort and unit design plans. The fact that development began at the height of a booming economy and was suspended in the following recession should be a factor when considering an exchange points value there, I'm convinced of that. When the economy rebounds it will be a superior product to anything on Hilton Head in an area that offers a longer beach vacation time period than Hilton Head, even without further development. What's there is only Phase 1 but even if the other two buildings and one pool are not completed, what is in place offers a complete vacation experience to the owners who bought in at a price point that made sense at the time. That price point should be a factor for future exchanges. Simply, we thought when we exchanged a 3BR high-quality HH unit for a 2BR CS unit, we got a deal. I don't expect that exchange to be available to us every year.

And now let's all have a final say about CS and be done with it. Who knows how much more I'll screw up responding to anything that any of you DON'T write. :hysterical:

 

[SueDonJ]

I'm sorry, one more thing about Crystal Shores and then I promise I'll be done with it. It's a Eureka! moment, a day late and a dollar short.

I keep thinking, "why is Marriott renting those so cheaply, when the hotel rates just down the beach appear to be supported even though the area is affected by the economy?" And bam!, it hit me. The rental rates are introductory/promotional to get people in the door to see the product. Those rates aren't reflective of what Marriott thinks the product value is or what the demand is.

They NEED to sell those units. Their investment is losing money every day. Not only that, they're incurring fees for the developer inventory they're holding. But it's Marketing 101 (I think) - they can't sell them if people don't see them. Sales were slow to begin with because of the limited target demographic and then all heck broke loose with the economy, and sales slowed further to the point where Marriott closed the onsite sales center. So how could they generate customer traffic and any possible revenue? Get people in the door with discount rental rates!

There, that's the eureka moment, and another reason why I think the rental pricing there is temporary and should not be used as a barometer of how many exchange points should be allotted in a new system (if blah blah blah...)

 

[pianodinosaur]

SueDonJ:

A Eureka moment is a Eureka moment no matter what the time!! Good thinking.

 

[vacationmama]

I think Marriott must be asleep at the switch to think that in a time when people are having trouble paying for food on the table and their mortgages that this is a time to roll out a program where we shall have to pay for a program that most don't want and certainly don't want to be forced to pay for to exchange what has worked for us all for so long. Am I nuts to think this way? How many will stay with II out of financial necessity and how many will feel compelled to join something just to use a property they paid mightily for in the first place?

 

[JimIg23]

I would be surprised if this flies if the buyin price is high. Direct or resale, in these times alot of people cant spend the money. Low or no buyin costs, if it is good people will join and Marriott gets the yearly trade fee for alot more people.

 

[PerryM]

Here is how the Marriott Owner Internal Exchange System should work..

I thought of you guys tonight while on another website www.itravex.com - this is a website owned by TripAdvisor and would work great for Marriott owners.

Basically members deposit weeks into iTravex and get Points and you then go shopping with those Points for other places to vacation at. Instead of $1 you use 1 Point. You don't have to deposit first you can shop first, see if the owner is interested in depositing the week and find out how many Points are needed before you deposit your week(s). Marriott already knows what the rent is for every day and unit in their system.

Marriott could implement this in 1 man month and have this system up and running 4 years ago if they wanted. This is not rocket science and what Marriott wants to do is done by dozens of companies right now.

Anyway, thought you would want to see what Marriott could have been doing for 4 years instead of scaring the daylights out of their members.

Catch you guys later....

 

[hipslo]

New "Portfolio" Sales Gallery at sold out resort - Precursor to Points?

Marriott Mountainside has been sold out for some time. I have owned there for 4 years now, and there has not been an on-site sales office during any of that period. A year or so ago, the sales office on Main Street in Park City closed.

Today, I received in the mail the meeting minutes from the Jan 26, 2010 Board meeting. One item that piqued my curiosity was a reference to a discussion by the general manager of "a potential new Portfolio Sales Gallery operated by Marriott Ownership Resorts Inc inside the resort". No further details were given.

Anyone care to guess what they are likely to be trying to sell? Since they don't have any units left at Mountainside to sell?

 

[bobcat]

Marriott Mountainside has been sold out for some time. I have owned there for 4 years now, and there has not been an on-site sales office during any of that period. A year or so ago, the sales office on Main Street in Park City closed.

Today, I received in the mail the meeting minutes from the Jan 26, 2010 Board meeting. One item that piqued my curiosity was a reference to a discussion by the general manager of "a potential new Portfolio Sales Gallery operated by Marriott Ownership Resorts Inc inside the resort". No further details were given.

Anyone care to guess what they are likely to be trying to sell? Since they don't have any units left at Mountainside to sell?

Points,let this thread has stated.

 

[DanCali]

Marriott Mountainside has been sold out for some time. I have owned there for 4 years now, and there has not been an on-site sales office during any of that period. A year or so ago, the sales office on Main Street in Park City closed.

Today, I received in the mail the meeting minutes from the Jan 26, 2010 Board meeting. One item that piqued my curiosity was a reference to a discussion by the general manager of "a potential new Portfolio Sales Gallery operated by Marriott Ownership Resorts Inc inside the resort". No further details were given.

Anyone care to guess what they are likely to be trying to sell? Since they don't have any units left at Mountainside to sell?

IMO the title of this thread totally misrepresents what the last 700 or so posts have been discussing...

Perhaps it's time to let this thread go and open a new one titled "More speculation about an unconfirmed potential new points system?"

No offense to anyone. I'm all for free speech but I shudder whenever I see the title of this thread, especially since this is all based on rumors and speculation that have been going on for years...

 

[hipslo]

IMO the title of this thread totally misrepresents what the last 700 or so posts have been discussing...

Perhaps it's time to let this thread go and open a new one titled "More speculation about an unconfirmed potential new points system?"

No offense to anyone. I'm all for free speech but I shudder whenever I see the title of this thread, especially since this is all based on rumors and speculation that have been going on for years...

i guess my post (the 767th on this thread) is the proverbial straw the broke the camel's back for you.

for me, regardless of the name of this thread, I have come to view it as the official "points speculation" thread, though perhaps it has been unfortunately named. for those interested/ inclined to speculate, it seemed to me that the formally announced, coming opening of a sales office in a resort that has been sold out for years was worthy of note.

since this is as you point out already the "points speculation" thread, after 766 other posts on the topic, I didnt see the need to start a new thread.

 

[GTLINZ]

I am not a Mariott owner but have been considering purchasing another timeshare (please do not solicit) and doing research. This may have already been mentioned in this incredibly long thread but I heard that what Mariott is doing is pooling the hard to move gold and silver inventory and packaging it as points. The problem is that unless Mariott can "convince" enough platinum owners to join this effort that there will be more owners with points and very little prime inventory either available or traded for exchange. I understand why they would get creative to move this inventory and it seems to me that it will just plain make the competition more fierce to use points if they are able to move a lot of this inventory. Conversely, it will bring in folks to pay MFs. You guys know your system and can debate this but this rumor sure makes sense to me.

 

[dioxide45]

but I heard that what Mariott is doing is pooling the hard to move gold and silver inventory and packaging it as points.

Perhaps you heard wrong, Marriott isn't doing anything... Yet, if ever.

 

[timeos2]

Weasel facts can often have a sliver of basic truth - enough to impact you

Perhaps you heard wrong, Marriott isn't doing anything... Yet, if ever.

Tick tock. June is getting close.

Marriott is in the timeshare business primarily to sell although they also make nice money, too much IMO, running the resorts they never want to give up control over. So right now selling weeks - especially extremely high priced timeshare weeks - is very tough going. So a new plan to SELL not only to new buyers but as a real option with real money to existing owners has to look really really good to them. Do you think they won't pull the trigger and roll out a program to MAKE MORE SALES now? I wouldn't bet against it. If it is anywhere near ready to go they will unveil it and ASAP. The wait is nearly over OR it never has and never will exist. Far too many rumors and well informed "leaks" to say it doesn't exist so it will be reality very soon. Even a weasel can be right on occasion and many have talked up this occurring.

 

[DanCali]

Do you think they won't pull the trigger and roll out a program to MAKE MORE SALES now? I wouldn't bet against it.

If they have any long term vision - they won't pull the trigger on such a drastic change.

I've mentioned this a couple of hundred posts ago but IMO there is no way a points system can be launched into a very successful existing weeks system and keep even half of the owners happy. I'm sure MVCI head of sales and whoever report to him want it, but hopefully the people above them realize this could be a disaster for MVCI if happy, loyal and affluent owners become miserable owners. With half a million owners, it is about much more than sales at this point.

There is absolutely nothing wrong with the current system. I just recently purchased 2 weeks and everything went smoothly with the purchase. I read the post that the #1 complaint from owners is II but I already traded one of my 2010 weeks for week 7 in 2011 at Waiohai - I thought it was pretty close to "like for like" and it got confirmed in less than 3 days! I think it's great that many of the best weeks are available for exchanges - this totally beats the Starwood points system where I kept getting "no availability" for Harborside trades when the window opened at 8 months out and finally settled on a less desireable week in a small 500 sq ft 1 BR. So far I am even more pleased with MVCI than I expected to be!

 

[SueDonJ]

... There is absolutely nothing wrong with the current system. ...

That's a matter of opinion, isn't it? According to Fletch (an insider, remember) the number one complaint from owners is II's system. It's great that you're happy with your exchanges - you're one of the lucky ones. I've been satisfied so far, too, but that's only because I knew from the beginning that "like for like" wouldn't be possible most of the time. If they can roll out a new exchange system that gives me and others like me value equal to what we're depositing, then probably we'll be all ears.