Speculation About Marriott's New Timeshare Structure [merged]

[Swice]

It sounds to me...

It sounds like to me this had nothing to do with the new "points" system.

I assume this was a marriott-coordinated "resale" ... the same kind of transaction that could have occurred at any point over the last ten years.

Marriott coordinated the "resale" transaction ... and earned a nice commission. Since the people used Marriott for the transaction, there were Marriott Rewards points thrown at them. People can use those Marriott Rewards points in about a hundred million ways (details on marriott.com).

The "rumor" on this board has been about timeshares converting from a "week" system to a "point" system. In simple terms-- your "week" equals a set number of points. Those "points" could be used to stay for 7-nights in a timeshare-- or -- more or less nights depending on location and time of year.

We assume the "points" system would be connected, but not exactly like the traditional "Marriott Rewards" point system. We don't know what the timeshare points system will be like -- yet.

Think of the Marriott Rewards points just like you do an airline Frequent Flyer program.

Others-- did I explain correctly?

 

[hipslo]

I assume this was a marriott-coordinated "resale" ... the same kind of transaction that could have occurred at any point over the last ten years.

Marriott coordinated the "resale" transaction ... and earned a nice commission. Since the people used Marriott for the transaction, there were Marriott Rewards points thrown at them.

Maybe, but paying 30k for a platinum ski week at mountainside (higher than current resale prices, but much lower than current developer pricing) and also getting points would be something of a big deal.

 

[hipslo]

Maybe, but paying 30k for a platinum ski week at mountainside (higher than current resale prices, but much lower than current developer pricing) and also getting points would be something of a big deal.

Actually, maybe I should take that back. MS weeks are currently going for around 20k, give or take, resale. Paying another 10k for 500,000 points does not seem like a good deal.

 

[davidvel]

I am curious how they are "earning" 500K points in the first year.

 

[moltenlava]

I was going to purchase a resale in Palm Desert area (DSV or SR), but this thread is now making me nervous. The plan was to purchase DSV or SR, and use this timeshare to exchange into oceanside resorts in Hawaii, Caribbean, or Mexico. I understand DSV and SR are a good value with low MF with relatively good trade strength.

Now I am having a second thought as Palm Desert Marriott may not be strong enough to trade into Marriott Hawaiian resorts and Caribbean resorts after the conversion to point system. If the conversion to the point system indeed happens, I think the points assigned to each resort will be more or less proportional to the MF for the resort. Point to MF ratio is the common metric used to determine the value of the resort today. I would imagine Marriott will keep the point to MF ratio the same, or very close to each other for their resorts.

If that's going to happen, then the current advantage of DSV with low MF will disappear after the point conversion. After all, Hawaiian and Caribbean Marriott resorts usually sell for 2x of DSV or SR, and MF for those resorts are also roughly 2x of DSV or SR. I think it's only fair to assign the points proportional to the MF.

Does it make sense? Any thoughts?

 

[billymach4]

I was going to purchase a resale in Palm Desert area (DSV or SR), but this thread is now making me nervous. The plan was to purchase DSV or SR, and use this timeshare to exchange into oceanside resorts in Hawaii, Caribbean, or Mexico. I understand DSV and SR are a good value with low MF with relatively good trade strength.

Now I am having a second thought as Palm Desert Marriott may not be strong enough to trade into Marriott Hawaiian resorts and Caribbean resorts after the conversion to point system. If the conversion to the point system indeed happens, I think the points assigned to each resort will be more or less proportional to the MF for the resort. Point to MF ratio is the common metric used to determine the value of the resort today. I would imagine Marriott will keep the point to MF ratio the same, or very close to each other for their resorts.

If that's going to happen, then the current advantage of DSV with low MF will disappear after the point conversion. After all, Hawaiian and Caribbean Marriott resorts usually sell for 2x of DSV or SR, and MF for those resorts are also roughly 2x of DSV or SR. I think it's only fair to assign the points proportional to the MF.

Does it make sense? Any thoughts?

Makes no sense whatsoever.......

There is absolutely no known fact regarding the so called point system, Internal Trade system or whatever you want to call it.

Up to now this whole discussion has been an inflated rumor. I will even tell you that Marriott can be preparing to stop all new development, and sell off the remainder of new inventory as of this year.

All we have seen here are silly rumors and statements that have been perpetuated by some well known insiders, and people that have been told lies by salespeople.

I have not seen or heard of any official statement from Marriott. Until I see any announcement from Marriott or MVCI I will continue to classify this whole subject a false rumor.

I firmly believe that we are self perpetuating this rumor. Marriott and Marriott employees read here on Tug, and can even post on Tug using an alias. This too has led to the rumor mongering of this subject.


That is my story and I am sticking to it!

 

[worldtraveler]

I think there is truth to the notion that Marriott will have some upcoming changes....I heard from a sales rep yesterday that Marriott will definitely have something...BUT that it's going to be "enhancements" to the owners (all inclusive or not -- I don't know). For sure, Marriott is not changing to "points" completely. We'll just have to wait and see.

 

[winger]

I am curious how they are "earning" 500K points in the first year.

Let me try. Assuming $30k price. Annual exchange-for-pts of 100k

Using Marriott Premiere Visa (Black one) $30k x 5pt/$ = 150,000 pts
Upfront Purchase Incentive = 150,000 pts
Current Year, Non-Use: 100,000 pts
Next Year, Non-use: 100,000 pts

Grand Total of funky points math = 500,000 pts

 

[Clark]

The "rumor" on this board has been about timeshares converting from a "week" system to a "point" system. In simple terms-- your "week" equals a set number of points. Those "points" could be used to stay for 7-nights in a timeshare-- or -- more or less nights depending on location and time of year.

We assume the "points" system would be connected, but not exactly like the traditional "Marriott Rewards" point system. We don't know what the timeshare points system will be like -- yet.

Think of the Marriott Rewards points just like you do an airline Frequent Flyer program.

Others-- did I explain correctly?

Uhhh -- Are you asking if you correctly explained the rumor which, being a rumor, could be correctly explaining something that is incorrect, which might be seen as incorrectly explaining the rumor, or if the rumor is correct and also correctly explained which should be seen as correctly explaining the rumor, but being a rumor, how can you tell if it you are correctly explaining a correct or an incorrect rumor, not to mention the possibility that you have incorrectly explained a correct (or maybe not) rumor which by just the plain luck of two wrongs making a right maybe resulted in a correct explanation. Or not.

In other words, I'm not sure ---

 

[taffy19]

I was reading my last post over and I referred to "deeded" points. What I really meant was that the points stay associated with the resort where people had bought before or are buying from here on as prices were or will be so different from one resort to another. I believe that Wyndham does their point sales like that and the Hilton too. You keep the advantages of reserving first at your home resort before other people can.

If there is no home resort then that would really make it difficult to book at your own resort because it depends who is ahead of you making reservations online or even on the phone, if everyone is treated the same.

I called Interval International the other day to deposit our 1 BR unit to get that extra bonus week and asked her several times if I will still be able to get a 1 BR unit back at our resort if the Marriott is going to have that rumored internal exchange system and she said yes.

I wonder how soon we will hear an announcement from Marriott or if we hear nothing at all.

 

[dioxide45]

I think if Marriott is wanting to unload the undesirable weeks that they have in inventory, they have no choice but to eliminate home resort priority. A person wants to buy enough points to go to Orlando every year, they deed you enough points at Marco to get you in to Orlando. The problem is that amount of points would only get you four days in Marco and that person didn't want Marco in the first place. The only thing that makes sense is no home resort priority.

 

[taffy19]

I think if Marriott is wanting to unload the undesirable weeks that they have in inventory, they have no choice but to eliminate home resort priority. A person wants to buy enough points to go to Orlando every year, they deed you enough points at Marco to get you in to Orlando. The problem is that amount of points would only get you four days in Marco and that person didn't want Marco in the first place. The only thing that makes sense is no home resort priority.

Undesirable to whom? I wouldn't want to own a platinum week at the NCV's, for instance, as that is a time I would never want to be there so a gold week would be much more attractive to us and many other people too.

It may be the summer weeks in the desert or the mud weeks in ski areas that may be harder to get rid of but the shoulder seasons shouldn't make much difference. Again, JMHO.

 

[dioxide45]

Undesirable to whom? I wouldn't want to own a platinum week at the NCV's, for instance, as that is a time I would never want to be there so a gold week would be much more attractive to us and many other people too.

It may be the summer weeks in the desert or the mud weeks in ski areas that may be harder to get rid of but the shoulder seasons shouldn't make much difference. Again, JMHO.

They are obviously undesirable to many, or Marriott wouldn't still be holding on to lots of them in their unsold inventory. The statements made in the many threads is that Marriott wants to unload their difficult to sell inventory. I replaced "difficult to sell" with "undesirable".

I agree that platinum season isn't desirable to us, we just don't want to travel during prime times. For most people though, this is the desirable weeks and the shoulder and off season are considered undesirable.

 

[DanCali]

They are obviously undesirable to many, or Marriott wouldn't still be holding on to lots of them in their unsold inventory.

Actually they may be quite desirable - but very overpriced...

 

[dioxide45]

Actually they may be quite desirable - but very overpriced...

Which I would guess makes them difficult to sell, or undesirable. Just about anything is desirable if the price is right.

A nice fancy sports car is not desirable to me at $80K, but price it at $10K and it gets very desirable.

 

[Dean]

I think if Marriott is wanting to unload the undesirable weeks that they have in inventory, they have no choice but to eliminate home resort priority. A person wants to buy enough points to go to Orlando every year, they deed you enough points at Marco to get you in to Orlando. The problem is that amount of points would only get you four days in Marco and that person didn't want Marco in the first place. The only thing that makes sense is no home resort priority.

I think either system is workable with or without a home resort priority depending on specifics. Even with a home resort priority you likely would lose the season priority but might keep the underlying week priority. One of the problems with converting to a no home resort priority is in incorporating existing owners, many of whom have bought specifically at a give resort and season for a reason. Bluegreen, Club Intrawest, etc do not have a home resort priority, DVC does and Westin and Hyatt in a sense do from what I understand. It would be much easier and simply to convert existing members to any new points system with a home resort priority but likely easier to sell new resorts without one. It should be interesting to see what happens, if anything.

 

[taffy19]

Which I would guess makes them difficult to sell, or undesirable. Just about anything is desirable if the price is right.

A nice fancy sports car is not desirable to me at $80K, but price it at $10K and it gets very desirable.

So true.

My worry is how are they combining the two systems together? A new system and an old system, if people do not want to convert, it has to give problems eventually. It's not a problem we have to deal with because we bought a fixed week/unit but I would be very worried if I had a floating week/unit in a popular resort where I would like to return to often with two different systems.

I know how difficult it was reserving at our old resort where we loved to go to every year because we were a one week owner. How are you going to compete with the person who owns the most points in the new program? You will have to keep buying more points to stay in the game. It's great for the Marriott or any other timeshare developer but expensive for the timeshare owner.

 

[davidvel]

Actually, maybe I should take that back. MS weeks are currently going for around 20k, give or take, resale. Paying another 10k for 500,000 points does not seem like a good deal.

My post:

I am curious how they are "earning" 500K points in the first year.

and reply:

Let me try. Assuming $30k price. Annual exchange-for-pts of 100k

Using Marriott Premiere Visa (Black one) $30k x 5pt/$ = 150,000 pts
Upfront Purchase Incentive = 150,000 pts
Current Year, Non-Use: 100,000 pts
Next Year, Non-use: 100,000 pts

Grand Total of funky points math = 500,000 pts

Given your example (assuming they get 150K bonus), I restate: they don't get 500K for their extra $10,000. They only get 300k (if they have a Marriot Black card: 150K bonus+150K card). Without card they are buying 150K poins for 10 grand.

They pay over $2000 in MF for another 200K points (where any couple can buy those points for $2500 over those 2 years without owning a timeshare at all.)

 

[DanCali]

My worry is how are they combining the two systems together? A new system and an old system, if people do not want to convert, it has to give problems eventually. It's not a problem we have to deal with because we bought a fixed week/unit but I would be very worried if I had a floating week/unit in a popular resort where I would like to return to often with two different systems.

The only solution to that issue that I can see is having two separate reservation systems. One for the VOIs in the points system (if there is one) and one for the VOIs not in the points system. Anything less is a class action waiting to happen and likely even violates state laws, at least in some places that already thoght of these types of situations.

For example - Hawaii statute rules(http://hawaii.gov/dcca/pvl/programs/timeshare/statute_rules - click on 514E and scroll to 514E-8.6)

Note the following:

An operator shall not offer or dispose of a timeshare unit or a timeshare interest unless the one-to-one use night requirement is currently satisfied and will continue to be satisfied for the duration of the timeshare plan.

If the timeshare plan has more than one class of timeshare interest, then the requirement must be satisfied within each class.

A use night counted to satisfy the requirement for one class may not also be counted to satisfy the requirement for a competing class.


If they don't separate the inventories, points owners could fill desirable locations while owners may not be able to obtain any week in their season even if they call before the season starts. For example - Platinum season at NCV runs from week 23 to 51 (with a Platinum Plus week 26). Right now, as long as Platinum week owners call before week 23, they should be able to get some week during the season they own. It may not be a desirable week, but they should get a week. If points system owners can exchange into all NCV weeks up to a year in advance (without separation of inventory), a Platinum owner not in the points system may not be able to book any week even if he calls before the season starts. I'm sure that would violate a few things written in CCRs...

 

[taffy19]

You are right that there have to be two complete separate inventories. It was simple with the 13 months' reservation advantage because the inventory was split 50/50 but this is going to be a nightmare with the number of weeks and total points changing constantly but it can be done with a good computer software program, I guess. This may be the reason why it is taking so long to get all the kinks out of the new system.

I am sure that they have smarter programmers than RCI and smart attorneys too. They make sure that they will not get sued which is good for every one concerned as nobody is getting any better off than the attorneys who handle the class action lawsuits (RCI comes to mind ) and that takes a long time too.

 

[puckmanfl]

good morning....

The concern is now the developer controls sales and inventory....

If MVCI puts unsold inventory and rental inventory ( from units returned for points etc.) into the points "pool" this program could look great for points owner. For example, how many times have exchangers tried to get a ski week to no avail while being able to go on marriott.com and rent a unit...

The problem for MVCI is that much of their unsold inventory are gold, silver weeks in less than thrilling places. The plat. ski weeks, aruba, HHI etc. have sold well. With points they can sell access to these plat weeks that are also sold!!!

Initially in order to get good reviews MVCI will probably place unsold and rental inventory into the points pool (instead of depositing a bunch of Ko olina weeks in II getaways or sept FC weeks in the exchange pool. This will be done to create the illusion that internal exchanges can only be done thru the points side!!! The problem becomes down the road when things start to change ever so slowly under the "generic" clause of "rules can change without notice at the decision of the developer".

 

[PerryM]

Woof woof....

good morning....

The concern is now the developer controls sales and inventory....

If MVCI puts unsold inventory and rental inventory ( from units returned for points etc.) into the points "pool" this program could look great for points owner. For example, how many times have exchangers tried to get a ski week to no avail while being able to go on marriott.com and rent a unit...

The problem for MVCI is that much of their unsold inventory are gold, silver weeks in less than thrilling places. The plat. ski weeks, aruba, HHI etc. have sold well. With points they can sell access to these plat weeks that are also sold!!!

Initially in order to get good reviews MVCI will probably place unsold and rental inventory into the points pool (instead of depositing a bunch of Ko olina weeks in II getaways or sept FC weeks in the exchange pool. This will be done to create the illusion that internal exchanges can only be done thru the points side!!! The problem becomes down the road when things start to change ever so slowly under the "generic" clause of "rules can change without notice at the decision of the developer".

These are great points...

What will doom the new Internal Exchange System to a life of mediocrity will be the Bronze, Silver, and Gold weeks dumped into the system and exchanged for Platinum weeks. The system will be awash with doggie weeks. Bow Wow!

Marriott won't care since they don't really care about how well the new scheme works as an exchange system - only that it helps sell doggy weeks.

It's just like car insurance (used to be health insurance) the 20% of the folks who always account for 80% of the usage are kept out - they can go somewhere else and drain that system.

Redweek has the right idea - they decide if your week is in demand and then offer you Points to deposit it into their exchange system. The doggy weeks never enter their system to clog it up with weeks nobody wants.

So look for a very expensive replacement to II that is no better and probably worse - at least as an exchange system for owners.

The dogs will rule the day...

 

[puckmanfl]

Hi...

I am not completely negative on all of this. I am just not sure as how to proceed when the "moment of truth" arrives. This system could be great or truly miserable. I am trying to encourage discussion so I can figure out the "next step". Sounds like the general consensus from Tuggers is to evaluate the roll out and proceed with caution. I believe that most plat. week owners mostly occupy and only and occasionally exchange and will not be rushing in to this to exchange for points!!! I think that I will be sitting tight as well and occupying my home units if exchanging for value becomes difficult...

 

[PerryM]

MRE - Meals Ready to Eat?

Hi...

I am not completely negative on all of this. I am just not sure as how to proceed when the "moment of truth" arrives. This system could be great or truly miserable. I am trying to encourage discussion so I can figure out the "next step". Sounds like the general consensus from Tuggers is to evaluate the roll out and proceed with caution. I believe that most plat. week owners mostly occupy and only and occasionally exchange and will not be rushing in to this to exchange for points!!! I think that I will be sitting tight as well and occupying my home units if exchanging for value becomes difficult...

Personally I believe Marriott will come out with "The hammer" - offers that expire in hours/days that will attract a lot of owners. There will be little time to do any "head scratching" - just panic to get the "pre-construction" goodies that Marriott will entice owners with.

By the time we get around to do a real analysis the goodies will be fond memories.

Will Marriott bring out a true internal exchange system to make Marriott ownership even more rewarding - I don't think that's what Marriott cares about.

It is a sales tool for the salesreps and will be marketed as the hottest thing since the timeshare.

Will I pay to enter our 1 Gold Summit Watch week? I can't say until about 5 minutes after Marriott releases the details. My guess is no - it won't improve our Marriott ownership; but that's just a guess at this point.

P.S.
If you simply look at what's happening in the USA and the rest of the world you might come to the conclusion I've come to - I'm not spending a single penny on anything but food and fuel in 2010 and probably 2011. Spending money on more timeshares, in any way but MFs, is very very dangerous in my way of looking at things right now. I would have to violate this reasoning to buy into the new exchange system (assuming it will cost more than $100 for the week)

In this climate Marriott may decide to chuck their old way of selling timeshares and come up with a new way? Then expect owners to cavalierly shell out money for an unproven exchange system? I wish you luck Marriott.

 

[puckmanfl]

Perry...

Please forgive this query but I can't possibly come up with any GOOD reason for the owner of a ONE gold week to convert to points. I am assuming your unit is a 2 bedroom lock off. With your skills and know how you can probably convert this to TWO plat weeks (especially if you are flexible and can use FLEXCHANGE). Since you only have 1 unit, you cannot combine points to TRADE UP.

THe only possible benefit is that you could possibly get a few "short stays" with points!!!

Please let me know if I am missing anything!!!