Speculation About Marriott's New Timeshare Structure [merged]

[PerryM]

Hey Perry. If you can stop your doom and gloom predictions for a moment.........

My question was after Marriott changes their sales program and only sells points would a person who bought into the new points system be able to sell their points privately or would all point transactions have to go thru Marriott? For a comparison how do the other point systems work?

I'm assuming that deeded weeks stay deeded weeks and that Marriott doesn't go insane and confiscate the deeded weeks into some master trust which morph into Points forever.

Under my assumption their is a disconnect between Marriott Points, usable only in their system, and deeded weeks which are what is sold resale.

If this is the case, then the resale market has absolutely no idea what the developer is selling a week for and total chaos. In that environment prices fall since all benchmarks are gone.

Wyndham resorts are very similar and a deeded week sells for 5 cents on the sales dollar - there is precedence here.

If Marriott confiscates weeks and makes them part of a master trust I have no idea how Points are sold resale - only Marriott can handle that transaction and not owners.

 

[Powerguy]

I'm assuming that deeded weeks stay deeded weeks and that Marriott doesn't go insane and confiscate the deeded weeks into some master trust which morph into Points forever.

If Marriott confiscates weeks and makes them part of a master trust I have no idea how Points are sold resale - only Marriott can handle that transaction and not owners.

Not sure how Marriott confiscates a deeded week. Not really possible. People can trade their deeded week for points in a new points based system but people with deeded weeks have title and rights to their timeshare week. All of the timeshare documents and agreements don't magically disappear at Marriott's whim. Marriott is extremely limited as to what they can change in the declaration of condominium as the developer and very limited in what they can change in the timeshare plan as the management company. Read the documents and see.

 

[PerryM]

Not sure how Marriott confiscates a deeded week. Not really possible. People can trade their deeded week for points in a new points based system but people with deeded weeks have title and rights to their timeshare week. All of the timeshare documents and agreements don't magically disappear at Marriott's whim. Marriott is extremely limited as to what they can change in the declaration of condominium as the developer and very limited in what they can change in the timeshare plan as the management company. Read the documents and see.

I agree but some here have suggested that on 6/15/10 all developer weeks become part of a master trust with Points being the currency Marriott deals in. That would require someone joining the exchange system to turn in their week for Points but Points can be only be sold by the developer.

That's why I'm suggesting a much simpler method - you turn your usage for 3+ years to Marriott and get Points to spend each year. Marriott may also demand you proxy your voting power to them to influence the HOA - if that's possible.

6/15/10 will tell us how Marriott chose to go and then we can work on concrete plans.

But I don't think Marriott is going to make it easy for resales - they seem to be at war with the owners - at least that's what I conclude from all the rumors.

 

[dougp26364]

Marriott can not "confiscate" what it already owns. Developer owned weeks are owned by Marriott.

 

[PerryM]

Marriott can not "confiscate" what it already owns. Developer owned weeks are owned by Marriott.

Obviously I'm not talking about developer inventory.

 

[Dean]

I have tried staying away from this thread , but guess I will post my experience. I had a email conversation with a sales executive in Orlando (the depart who can sell any available Marriott inventory). The conversation basically started with him asking how my Marriott ownership has been so far (we've now owned with MVCI over 2 years)...

I basically mentioned I wished Marriott would move to the points system, that we have recently (a couple of years ago) increased our Diamond Resorts 'points' and have been enjoying that flexibility points offer over weekly intervals such as Marriott's.

Strangely enough, his response yesterday (5/31) made NO mention of any pending Marriott changes to the weekly system. Not even a hint. I mean, if I were the rep in this situation and knew something was coming, I would either NOT even respond and wait for the official Marriott decision on points or no points, OR just recommend for me to hang tight as something maybe in the works which I would find interesting.

He just concluded the email by asking if I had more interest in adding more Marriott ownership.

I'm sure it's a violation of the employment rules to discuss an item that would be proprietary information, he could easily (and likely should) lose his job for discussion such issues. Various sales people are better at following the rules than others. Often the ground level employees aren't actually formally told about such issues until the last minute for this very reason.

Forget selling Points - they won't transfer with the deeded week.

Your deeded week is worth - what?

I have no idea after 6/15/10 - Marriott won't quote prices per week anymore - they are ZERO.

As a buyer I'd beat the seller over the head that Marriott values their week as ZERO!

Then there is the sticky matter of the membership fee. Let's say that resale weeks can enter the new system for $3,500 and that membership fee doesn't transfer to the new owner. As a buyer I'm going to demand the seller pay for that $3,500 so I can use the week in the new Points system. (I'm simply going to lower my offer, what ever it is, by $3,500 and so will everyone else)


This isn't going to be pretty folks....

Perry, again an unrealistic slant that is likely worse than the worst case scenario in my book. Obviously any value ($$$ or otherwise) will depend on the specifics of the system and any conversion options. It's likely that many will be better off under a new system and depending on the specifics, it's possible that most will be better off under any new system (esp Gold and Silver and possibly bronze). The question is how do they get from old to new and what will it cost.

 

[GregT]

I'm assuming that deeded weeks stay deeded weeks and that Marriott doesn't go insane and confiscate the deeded weeks into some master trust which morph into Points forever.

Under my assumption their is a disconnect between Marriott Points, usable only in their system, and deeded weeks which are what is sold resale.

If this is the case, then the resale market has absolutely no idea what the developer is selling a week for and total chaos. In that environment prices fall since all benchmarks are gone.

Wyndham resorts are very similar and a deeded week sells for 5 cents on the sales dollar - there is precedence here.

If Marriott confiscates weeks and makes them part of a master trust I have no idea how Points are sold resale - only Marriott can handle that transaction and not owners.

Perry, I believe the reason Wyndham points are worthless is not becaues of the Trust-based points system (where deeds are held in a Trust) but because of the anti-owner rules that have been instituted by Wyndham. They've introduced a number of fees that are expensive, restricted the ability of owners to rent points to one another, and gone after the owners who have a rental business. However, it's a good system with very good quality properties.

HGVC on the other hand, has not been punitive to its existing owners, resale or direct purchasers, and it exercises ROFR. The stability of the system (and high quality of the properties) has helped it to sustain some of the value of its points in resale.

Marriott could easily incorporate the best of all systems because they've seen what works and what doesn't. I think we all agree that Marriott is doing this because it's in their best corporate self-interest (profitability), but that a points-based system doesn't preclude them from making new (and existing owners happy).

Their points system could be a big success if it has the following:

1) Home-resort booking advantage (HGVC/Wyndham)
2) Length of stay (and check-in day) flexibility (Wyndham/Worldmark/HGVC)
3) Resale price stability (either if they are a ROFR buyer of resale deeds for the points program or if deeds are perceived as desirable)
4) Reasonable up-front cost to join (with resale owners paying more to join)
5) Creative access to Marriott hotels (or Ritz Carlton Club)
6) Ability to book view desired (HGVC/Worldmark/Wyndham)
7) Ability to space-bank into II with good trading power (Worldmark)
8) Ability to rent vacant units last minute (Open Season in HGVC/Bonus time in Worldmark)
9) Ability to cancel reservation with reasonable notice, and no loss of points (Worldmark/HGVC/Wyndham)
10) Bank credits/borrow credits for different periods (HGVC/Worldmark/Wyndham)
11) The up-front payment covers all legacy Marriott properties, not just one property

I've been thinking about adding HGVC because I like HHV (at least what I know -- visiting in 2011) and it's dedicated 1BR units (and also the Big Island locations) but I'd take a hard look at a 2BR Ko Olina, specifically for the points program, if it had a home resort advantage (especially if I could book just a 1BR and keep the Studio points in the points bank).

I'm counting on Marriott studying all the other points programs hard and building a new points program that institutes the best practices of the others. I don't begrudge them at all if they will now be re-selling the existing locations (and saving themselves the development dollars) and giving themselves a stable recurring cash flow from the [modest - $99?] annual fees they earn and the [modest - $49?] reservation fees from booking outside of your home resort.

However, this will only work if they have a Trust-based deed system that is separate inventory from the weeks that are available for reservation by existing owners.

There will be an immediate deposit of weeks into the Trust from existing developer inventory and from those people that take the eye-watering incentives that are available to them to join. I suspect then there will be a gradual transfer of weeks into the Trust as Marriott ROFRs the desirable weeks that it needs to be able to provide inventory. And then they market the entire network of locations for the points-purchaser to visit -- but unlike Worldmark which built in new locations and diluted the existing inventory, Marriott is only diluting the properties that are in the Trust, and you have reasonable protection by your home-resort advantage.

Another significant positive from this is that Marriott remains committed to the timeshare industry and perhaps even continues to expand, then we all may be thinking about how to creatively get more points (as cheaply as possible) so that we can take advantage of that system.

So....count me as a cautious optimist that is trying to find out how to benefit from the upcoming system.

Best to all,

Greg

 

[PerryM]

...

Perry, again an unrealistic slant that is likely worse than the worst case scenario in my book. Obviously any value ($$$ or otherwise) will depend on the specifics of the system and any conversion options. It's likely that many will be better off under a new system and depending on the specifics, it's possible that most will be better off under any new system (esp Gold and Silver and possibly bronze). The question is how do they get from old to new and what will it cost.

My experience with timeshare developers is the opposite - the more they tinker and the longer they tinker the worse off I get.

But who knows, maybe Marriott has a secret plan to enrich many of our lives....

 

[PerryM]

Perry, I believe the reason Wyndham points are worthless is not becaues of the Trust-based points system (where deeds are held in a Trust) but because of the anti-owner rules that have been instituted by Wyndham. They've introduced a number of fees that are expensive, restricted the ability of owners to rent points to one another, and gone after the owners who have a rental business. However, it's a good system with very good quality properties.

HGVC on the other hand, has not been punitive to its existing owners, resale or direct purchasers, and it exercises ROFR. The stability of the system (and high quality of the properties) has helped it to sustain some of the value of its points in resale.

Marriott could easily incorporate the best of all systems because they've seen what works and what doesn't. I think we all agree that Marriott is doing this because it's in their best corporate self-interest (profitability), but that a points-based system doesn't preclude them from making new (and existing owners happy).

Their points system could be a big success if it has the following:

1) Home-resort booking advantage (HGVC/Wyndham)
2) Length of stay (and check-in day) flexibility (Wyndham/Worldmark/HGVC)
3) Resale price stability (either if they are a ROFR buyer of resale deeds for the points program or if deeds are perceived as desirable)
4) Reasonable up-front cost to join (with resale owners paying more to join)
5) Creative access to Marriott hotels (or Ritz Carlton Club)
6) Ability to book view desired (HGVC/Worldmark/Wyndham)
7) Ability to space-bank into II with good trading power (Worldmark)
8) Ability to rent vacant units last minute (Open Season in HGVC/Bonus time in Worldmark)
9) Ability to cancel reservation with reasonable notice, and no loss of points (Worldmark/HGVC/Wyndham)
10) Bank credits/borrow credits for different periods (HGVC/Worldmark/Wyndham)
11) The up-front payment covers all legacy Marriott properties, not just one property

I've been thinking about adding HGVC because I like HHV (at least what I know -- visiting in 2011) and it's dedicated 1BR units (and also the Big Island locations) but I'd take a hard look at a 2BR Ko Olina, specifically for the points program, if it had a home resort advantage (especially if I could book just a 1BR and keep the Studio points in the points bank).

I'm counting on Marriott studying all the other points programs hard and building a new points program that institutes the best practices of the others. I don't begrudge them at all if they will now be re-selling the existing locations (and saving themselves the development dollars) and giving themselves a stable recurring cash flow from the [modest - $99?] annual fees they earn and the [modest - $49?] reservation fees from booking outside of your home resort.

However, this will only work if they have a Trust-based deed system that is separate inventory from the weeks that are available for reservation by existing owners.

There will be an immediate deposit of weeks into the Trust from existing developer inventory and from those people that take the eye-watering incentives that are available to them to join. I suspect then there will be a gradual transfer of weeks into the Trust as Marriott ROFRs the desirable weeks that it needs to be able to provide inventory. And then they market the entire network of locations for the points-purchaser to visit -- but unlike Worldmark which built in new locations and diluted the existing inventory, Marriott is only diluting the properties that are in the Trust, and you have reasonable protection by your home-resort advantage.

Another significant positive from this is that Marriott remains committed to the timeshare industry and perhaps even continues to expand, then we all may be thinking about how to creatively get more points (as cheaply as possible) so that we can take advantage of that system.

So....count me as a cautious optimist that is trying to find out how to benefit from the upcoming system.

Best to all,

Greg

These are all good points and hopefully Marriott has been looking at what works and what sucks.

I just have grave doubts from a company that for 20+ years could care less about owner to owner exchanges and dumped exchanging off to II.

I'm sure they will market the heck out of this thing but the customer has to decide if they just stick with II, a system they know, or spend more money on their timeshares where the net result has them right back where they are now.

In this climate why spend more money on timeshares?

With Marriott running Blue-Light specials of 20% - 25% and more discounts in order to sell timeshares, what makes them so sure getting into the timeshare exchange business is any easier?

 

[Bruyerebrit]

If this is true...thank god the'll be tied up during our visit.

Ha! You can use the time to get a root canal instead

 

[Dean]

My experience with timeshare developers is the opposite - the more they tinker and the longer they tinker the worse off I get.

But who knows, maybe Marriott has a secret plan to enrich many of our lives....

There really are 2 issues, what the new plan (if any) is and then how to get there. It's very possible that each and every one of us who has learned the ins/outs of the system and used it to our advantage, will be worse off, but that doesn't mean everyone will be. Even with Wyndham points being so low currently (and other companies as well), many of those owners are still better off than comparable owners were under their old system. The question then becomes how they got to where they are now and how much did those changes (?improvements) cost them. I am confident that if Marriott rolls out a points system it will be something of value to many, whether it offers value to me, or at least enough to justify my $$$ and weeks to participate in, remains the question. Equally, or even more important to me, is how will my non developer weeks be treated in such a system as they're the ones I'm likely to want to convert. Basically I see good trading options also being good conversions options and good usage/renting weeks to be less value in converting. Keep in mind this is relative as I'm sure a Platinum week at HH will be worth more than a Silver or Gold week would be, it's just the what I'm giving up would likely be of even more to me without converting.

In many ways each and every week/contract we own in timeshares was worth nothing from the day we acquired it.

 

[taffy19]

I'm assuming that deeded weeks stay deeded weeks and that Marriott doesn't go insane and confiscate the deeded weeks into some master trust which morph into Points forever.

Under my assumption their is a disconnect between Marriott Points, usable only in their system, and deeded weeks which are what is sold resale.

If this is the case, then the resale market has absolutely no idea what the developer is selling a week for and total chaos. In that environment prices fall since all benchmarks are gone.

Wyndham resorts are very similar and a deeded week sells for 5 cents on the sales dollar - there is precedence here.

If Marriott confiscates weeks and makes them part of a master trust I have no idea how Points are sold resale - only Marriott can handle that transaction and not owners.

It is too early to worry about this. I mentioned it once and they told us that they would sell the week for us. They do this already if they need your week and they are sold out. They sold your weeks too, Perry. Did you do an upgrade or got rid of the week? I don't remember that but you did OK. I know for a fact that you will end up with more money if you go through the Marriott than on the re-sale market. Eventually, the economy will turn around too and everything will get better again.

We had another couple doing a courtesy update on our last day and we tagged along with them. The salesman told them that he would send them an email the moment he was allowed to do so and send us information too. I have a feeling that most of us will get an email from the last person who gave us an update at the Marriott once the new program is official. We may even receive two because we had done our own update already.

Changes are coming or why would they take the beautiful display down at the sales office on Maui? That wouldn't make sense. They may start selling any resort by virtual tour from any sales office that are still left. I saw one the other day but can't find it right now. Who knows what is going to happen but they can't force us to join. For many people, it may be even better.

I hope that we start a new thread once the new program has been introduced or this thread will be the longest one yet. I believe that we are #2 now.

 

[taffy19]

Perry, I believe the reason Wyndham points are worthless is not becaues of the Trust-based points system (where deeds are held in a Trust) but because of the anti-owner rules that have been instituted by Wyndham. They've introduced a number of fees that are expensive, restricted the ability of owners to rent points to one another, and gone after the owners who have a rental business. However, it's a good system with very good quality properties.

HGVC on the other hand, has not been punitive to its existing owners, resale or direct purchasers, and it exercises ROFR. The stability of the system (and high quality of the properties) has helped it to sustain some of the value of its points in resale.

Marriott could easily incorporate the best of all systems because they've seen what works and what doesn't. I think we all agree that Marriott is doing this because it's in their best corporate self-interest (profitability), but that a points-based system doesn't preclude them from making new (and existing owners happy).

Their points system could be a big success if it has the following:

1) Home-resort booking advantage (HGVC/Wyndham)
2) Length of stay (and check-in day) flexibility (Wyndham/Worldmark/HGVC)
3) Resale price stability (either if they are a ROFR buyer of resale deeds for the points program or if deeds are perceived as desirable)
4) Reasonable up-front cost to join (with resale owners paying more to join)
5) Creative access to Marriott hotels (or Ritz Carlton Club)
6) Ability to book view desired (HGVC/Worldmark/Wyndham)
7) Ability to space-bank into II with good trading power (Worldmark)
8) Ability to rent vacant units last minute (Open Season in HGVC/Bonus time in Worldmark)
9) Ability to cancel reservation with reasonable notice, and no loss of points (Worldmark/HGVC/Wyndham)
10) Bank credits/borrow credits for different periods (HGVC/Worldmark/Wyndham)
11) The up-front payment covers all legacy Marriott properties, not just one property

I've been thinking about adding HGVC because I like HHV (at least what I know -- visiting in 2011) and it's dedicated 1BR units (and also the Big Island locations) but I'd take a hard look at a 2BR Ko Olina, specifically for the points program, if it had a home resort advantage (especially if I could book just a 1BR and keep the Studio points in the points bank).

I'm counting on Marriott studying all the other points programs hard and building a new points program that institutes the best practices of the others. I don't begrudge them at all if they will now be re-selling the existing locations (and saving themselves the development dollars) and giving themselves a stable recurring cash flow from the [modest - $99?] annual fees they earn and the [modest - $49?] reservation fees from booking outside of your home resort.

However, this will only work if they have a Trust-based deed system that is separate inventory from the weeks that are available for reservation by existing owners.

There will be an immediate deposit of weeks into the Trust from existing developer inventory and from those people that take the eye-watering incentives that are available to them to join. I suspect then there will be a gradual transfer of weeks into the Trust as Marriott ROFRs the desirable weeks that it needs to be able to provide inventory. And then they market the entire network of locations for the points-purchaser to visit -- but unlike Worldmark which built in new locations and diluted the existing inventory, Marriott is only diluting the properties that are in the Trust, and you have reasonable protection by your home-resort advantage.

Another significant positive from this is that Marriott remains committed to the timeshare industry and perhaps even continues to expand, then we all may be thinking about how to creatively get more points (as cheaply as possible) so that we can take advantage of that system.

So....count me as a cautious optimist that is trying to find out how to benefit from the upcoming system.

Best to all,

Greg

They took a very long time to get it off the ground so you may be right.

 

[PerryM]

It is too early to worry about this. I mentioned it once and they told us that they would sell the week for us. They do this already if they need your week and they are sold out. They sold your weeks too, Perry. Did you do an upgrade or got rid of the week? I don't remember that but you did OK. I know for a fact that you will end up with more money if you go through the Marriott than on the re-sale market. Eventually, the economy will turn around too and everything will get better again.

We had another couple doing a courtesy update on our last day and we tagged along with them. The salesman told them that he would send them an email the moment he was allowed to do so and send us information too. I have a feeling that most of us will get an email from the last person who gave us an update at the Marriott once the new program is official. We may even receive two because we had done our own update already.

Changes are coming or why would they take the beautiful display down at the sales office on Maui? That wouldn't make sense. They may start selling any resort by virtual tour from any sales office that are still left. I saw one the other day but can't find it right now. Who knows what is going to happen but they can't force us to join. For many people, it may be even better.

I hope that we start a new thread once the new program has been introduced or this thread will be the longest one yet. I believe that we are #2 now.

The 5 Marriotts that I flipped I sold myself; all of the resorts, at that time, were still in construction and resales were not allowed.

With a Point system, there is no "Pre-construction" or "Post-construction" and I don't know if Marriott will still be in the real estate agent game anymore - doubt it.

To all those folks waiting for years to have Marriott sell their weeks - June 15 is going to be a kick in the head....

 

[taffy19]

OK, you did even better. I know that I have read here that some people sold through the Marriott and came out ahead. We also were offered quite a bit more than we paid for our developer purchase when we upgraded but Uncle Sam had to spoil it. Still better than a loss that we would have ended up with doing it ourselves.

Personally, I think that Marriott will do re-sales or start the ROFR again with the new program. It will make the conversion go much faster and they can wait a little longer with starting to build new resorts until the economy is strong again. JMHO as I have no idea what they will do.

 

[dougp26364]

.....With a Point system, there is no "Pre-construction" or "Post-construction" and I don't know if Marriott will still be in the real estate agent game anymore - doubt it.

This may be true of trust based ownerships but, there are deeded week point based reservation ownerships (HGVC for excample) where a deeded week is assigned a point value and pre-construction pricing can still be done. When HGVC units sell on the re-sale market, it's the deeded week that is sold, not the points. The points still follow the week but you are buying a specific resort and you are assigned a specific week and unit number on your deed.

You're making to many assumptions and banking on them being fact. You could be correct but it's to early to toss the baby out with the bath water.

 

[DanCali]

...Equally, or even more important to me, is how will my non developer weeks be treated in such a system as they're the ones I'm likely to want to convert.

An equally important question is how will future resale owners be treated. If they are treated in an adverse manner this affects everyone's equity (retail and resale owners) and there will be a huge evaporation of value...

It seems that some here would be more upset if lawmakers took 2% of our retirement savings to cover deficits than Marriott destroying 20%-50% of timeshare market value by unilaterally changing the rules... The fact that it's a discretionary item doesn't mean it's worthless. And any loss of market value between now and 4-6 months after a new program launches (if it launches) can be attributed to the new rules.

Remember what Marriott did to your equity value before you throw more dollars at them.

 

[PerryM]

An equally important question is how will future resale owners be treated. If they are treated in an adverse manner this affects everyone's equity (retail and resale owners) and there will be a huge evaporation of value...

It seems that some here would be more upset if lawmakers took 2% of our retirement savings to cover deficits than Marriott destroying 20%-50% of timeshare market value by unilaterally changing the rules... The fact that it's a discretionary item doesn't mean it's worthless. And any loss of market value between now and 4-6 months after a new program launches (if it launches) can be attributed to the new rules.

Remember what Marriott did to your equity value before you throw more dollars at them.

Good grief, both are losers and hopefully won't happen...

 

[PerryM]

This may be true of trust based ownerships but, there are deeded week point based reservation ownerships (HGVC for excample) where a deeded week is assigned a point value and pre-construction pricing can still be done. When HGVC units sell on the re-sale market, it's the deeded week that is sold, not the points. The points still follow the week but you are buying a specific resort and you are assigned a specific week and unit number on your deed.

You're making to many assumptions and banking on them being fact. You could be correct but it's to early to toss the baby out with the bath water.

I doubt Marriott is going to move 1,000,000 weeks to trusts - the legal expense will be astronomical and unnecessary.

I'm assuming that Marriott will sell "blind" packages of Points. E.g. 100,000 Points made up of 4 deeded weeks that you won't know until you sign the paperwork to buy them. The MFs will be tied to those deeded weeks.

Salesreps won't know what weeks go to make up the package just the number of Points and the MFs that go with it. Some packages will have lower MFs than others.

Just a guess and a simple way to hide the weeks from the owners. Once the owner signs the paperwork Marriott will just care about owners selling the deeds without telling Marriott but the ROFR prevents that from happening.

 

[Dean]

An equally important question is how will future resale owners be treated. If they are treated in an adverse manner this affects everyone's equity (retail and resale owners) and there will be a huge evaporation of value...

Not necessarily. Frankly, I expect future resale buyers to have less, maybe a lot less, value and options going forward as in most points systems I am aware of. I also respect the right of the developer to distinguish themselves from the resale market. As I said previously, I don't think it's Marriott responsibility to protect OUR values, only theirs but obviously some disagree.

 

[PerryM]

WMR - Weapon of Mass Revenge...

Not necessarily. Frankly, I expect future resale buyers to have less, maybe a lot less, value and options going forward as in most points systems I am aware of. I also respect the right of the developer to distinguish themselves from the resale market. As I said previously, I don't think it's Marriott responsibility to protect OUR values, only theirs but obviously some disagree.

Timeshare developers have always had a hard time dealing with resales - because what they sell is a resale! There is no such timeshare as "Brand spanking new" - they sell units that are well worn just like you and I.

Hence there is this developer mentality of "Us versus 400,000 owners" which can only take place when what they sell is so full of pork that there is a difference to begin with.

Marriott had a very benign difference, as a developer, the MRP. Starting about 4 years ago Marriott seems to have decided that it wasn't enough to take on 400,000 owners. The new internal exchange system is years and years of pent up rage directed at you and I, the loyal owner.

Make no mistake about it, the new internal exchange system is a weapon of mass revenge against the 400,000 owners for all those lost sales over the years...

 

[JCerniglow]

We own both disney and marriott. Disney is a point based system. We absolutely love the flexibility. Short stays. borrowing and banking points from year to year. We bought marriott for the locations and have said repeatedly that we wish it would have disney's flexibility. Our member fees are attached to the number of points we own. we can also buy small add on point packages (25 for cash and 50 for financing) to increase our membership to book larger rooms, go during peak season or stay longer. It does, however,require more planning than booking one week each year in your purchased resort. Also, I would hope that the point system would improve the chances of internal trades so that one is not at the mercy of an exchange company. At disney I have a home resort advantage. Specifically, I can book my home resort at 11 months before the stay and any other disney resort at 7 months. It could not be easier. Change is always hard but not always bad.

 

[PerryM]

Perry's Timeshare Rule #17

I love making predictions - it forces me to try to think ahead and plan for contingencies. I'm human so many of my predictions are wrong and I've got to live with my average.

My focus, in this debate, is to present the worst case scenario and get ready to live with them. I sure hope I didn't miss something so horrible that I sloughed it off as being ridiculous.

Maybe Marriott will come out with a fantastic new program and we can all hold hands and hum. (That's not a forecast on my part)

Just 2 weeks and we can actually make decisions - and this all boils down to 400,000+ decisions made.

But one thing I'm certain of the more the developers disparage resales the more the resale prices fall and hence the more they feel they must disparage them even more. I'm going to take credit for that fundamental timeshare rule - that would be Perry's Timeshare rule #17. (Don't ask about 1-16)

 

[potchak]

My guess is that a Marriott bought week can become part of the new Points exchange system for $2,500.

Resales are able to do the same thing but cost more - my guess is $3,500.

In 2 weeks we will find out just how much money Marriott want's to extort/////charge you to become part of this wonderful new way to do what II does already.

Frankly as I have said, I have absolutely no interest in spending 3 months of mortgage payments for "more flexibility". I think the most I would spend per week is $500, and even that is pushing it since I own 4 weeks with Marriott (2 EOY, 2 EY). Perry, if what you say ends up being the truth, I would owe them $11K to join their program which is not something I am willing to fork over when we are worried whether or not we are going to have a job tomorrow, which by the way, is now almost a years worth of mortgage payments. Not going to happen in this economy.

Perry, I believe the reason Wyndham points are worthless is not becaues of the Trust-based points system (where deeds are held in a Trust) but because of the anti-owner rules that have been instituted by Wyndham. They've introduced a number of fees that are expensive, restricted the ability of owners to rent points to one another, and gone after the owners who have a rental business. However, it's a good system with very good quality properties.

HGVC on the other hand, has not been punitive to its existing owners, resale or direct purchasers, and it exercises ROFR. The stability of the system (and high quality of the properties) has helped it to sustain some of the value of its points in resale.

Marriott could easily incorporate the best of all systems because they've seen what works and what doesn't. I think we all agree that Marriott is doing this because it's in their best corporate self-interest (profitability), but that a points-based system doesn't preclude them from making new (and existing owners happy).

Their points system could be a big success if it has the following:

1) Home-resort booking advantage (HGVC/Wyndham)
2) Length of stay (and check-in day) flexibility (Wyndham/Worldmark/HGVC)
3) Resale price stability (either if they are a ROFR buyer of resale deeds for the points program or if deeds are perceived as desirable)
4) Reasonable up-front cost to join (with resale owners paying more to join)
5) Creative access to Marriott hotels (or Ritz Carlton Club)
6) Ability to book view desired (HGVC/Worldmark/Wyndham)
7) Ability to space-bank into II with good trading power (Worldmark)
8) Ability to rent vacant units last minute (Open Season in HGVC/Bonus time in Worldmark)
9) Ability to cancel reservation with reasonable notice, and no loss of points (Worldmark/HGVC/Wyndham)
10) Bank credits/borrow credits for different periods (HGVC/Worldmark/Wyndham)
11) The up-front payment covers all legacy Marriott properties, not just one property

I've been thinking about adding HGVC because I like HHV (at least what I know -- visiting in 2011) and it's dedicated 1BR units (and also the Big Island locations) but I'd take a hard look at a 2BR Ko Olina, specifically for the points program, if it had a home resort advantage (especially if I could book just a 1BR and keep the Studio points in the points bank).

I'm counting on Marriott studying all the other points programs hard and building a new points program that institutes the best practices of the others. I don't begrudge them at all if they will now be re-selling the existing locations (and saving themselves the development dollars) and giving themselves a stable recurring cash flow from the [modest - $99?] annual fees they earn and the [modest - $49?] reservation fees from booking outside of your home resort.

However, this will only work if they have a Trust-based deed system that is separate inventory from the weeks that are available for reservation by existing owners.

There will be an immediate deposit of weeks into the Trust from existing developer inventory and from those people that take the eye-watering incentives that are available to them to join. I suspect then there will be a gradual transfer of weeks into the Trust as Marriott ROFRs the desirable weeks that it needs to be able to provide inventory. And then they market the entire network of locations for the points-purchaser to visit -- but unlike Worldmark which built in new locations and diluted the existing inventory, Marriott is only diluting the properties that are in the Trust, and you have reasonable protection by your home-resort advantage.

Another significant positive from this is that Marriott remains committed to the timeshare industry and perhaps even continues to expand, then we all may be thinking about how to creatively get more points (as cheaply as possible) so that we can take advantage of that system.

So....count me as a cautious optimist that is trying to find out how to benefit from the upcoming system.

Best to all,

Greg

I would also like to see lower points for within the old Flexchange period of less than 59 days or something. I know Worldmark does this. You can get any size room within I think 60 days for 3000 pts or something, so it is like 20% of the normal. I am not totally familiar with the Worldmark program, but I remember I loved this ability. I think that could really enhance the program as well. They could also offer these as internal "getaways" if people do not have enough points to cover the week.

Just another thought.

We own both disney and marriott. Disney is a point based system. We absolutely love the flexibility. Short stays. borrowing and banking points from year to year. We bought marriott for the locations and have said repeatedly that we wish it would have disney's flexibility. Our member fees are attached to the number of points we own. we can also buy small add on point packages (25 for cash and 50 for financing) to increase our membership to book larger rooms, go during peak season or stay longer. It does, however,require more planning than booking one week each year in your purchased resort. Also, I would hope that the point system would improve the chances of internal trades so that one is not at the mercy of an exchange company. At disney I have a home resort advantage. Specifically, I can book my home resort at 11 months before the stay and any other disney resort at 7 months. It could not be easier. Change is always hard but not always bad.

We own Disney as well and love the ability to select how long we want to stay. I am definitely feeling like Marriott will be going that way with their new points system. Makes sense. Their current reservation systems can already handle that since their Hotels do that every day.

I have to admit, I am very curious as to what they are going to come up with because I am hopeful that it will be great. What I am not hopeful about is how much it is going to cost me. I spent a ton of money buying these things from Marriott, and if they are telling me they want another boatload of money, they can forget it, I will keep my II membership and exchange that way.

 

[tombo]

With regards to Marriott taking the deeded weeks to own and giving the prior owners points, yes they can do that very thing, Festiva is doing that at resorts every day. When you join Festiva's Adventure Club you give Festiva your deeded week (and $1000's of dollars) to become a member who has x number of points for 30 years but who no longer owns the week, it is now owned by Festiva. They can't and don't "take" owner's deeded weeks, they convince them that if they don't convert to points that the deeded owners will never be able to exchange for a good week because the entire system is moving to points. It is a stupid move but many people are convinced to do that.

Will Marriott simply assign points to the deeded week you own rather than make you give up your deeded week for points? Probably, but Marriott will begin the threats and warnings very soon informing you that your week will become useless if you don't join the points program. The scenario of only getting February at the Beach or October at the ski resort as the only choices available to those who don't convert to points will be rolled out shortly. Many Marriott owners will convert to points, and every time someone converts there will be less weeks for weeks owners to trade for. The points people will deposit their weeks internally with the Marriott points system instead of with II shutting out non points owners from access to weeks they had access to in the past. The more people they can get to convert to points, the harder it will be to trade for prime times/locations if you are not in the points program. However far fewer people will convert to points than Marriott will lead you to believe.

The full court press is coming to a Marriott resort near you. Don't fall victim. Points are a thing that can be manipulated. You get 1000 points to convert and new retail buyers get the same 1000 points each year, plus a 500 point annual bonus for buying today. New retail buyers in the future with the same underlying deeded week as you own might get more points. The new resorts as they are built will get and require more points than you own locking you out of new locations unless you buy upgrades, new points, etc. If you own a platinum week you know exactly what you own and what it will trade for. If you convert to points you have converted to an exchange medium with no real fixed value which can be manipulated and changed within the points system at the whim of Marriott.

I would remain a deeded week owner as long as it worked well for me and sell when it no longer works well which is exactly what I am doing at a resort I own where Festiva took over. I will never let them to convince me to convert to points and to just trust Festiva, Marriott, or any developer to do what is best for me in the future with regards to what my points are worth. A deeded week is a deeded week, points are an imaginary currency with no real value. Just say no to points.