Speculation About Marriott's New Timeshare Structure [merged]

[indyhorizons]

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.

Michelle, you're absolutely right, this would be ridiculous, especially in this economy. What I am thinking they will do is incentivize people by offering tons of MR points (where are the points junkies?) and/or making the new resorts points based only, so as to lure those who might not otherwise convert. Honestly, unless it is free to convert, I think I will be staying with II also. It's been a great ride, but I'm afraid for more money, I will have to be getting off at the next stop.

 

[jlf58]

Although I might have an unfair advantage predicting , and this is not from new information as I have nothing new, last I heard would make it more like
$400 to upgrade
$1500 for resale owners ( This is a guess as I was just told more than developer owners)






Originally Posted by PerryM
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.

 

[AwayWeGo]

I Resemble That Remark.

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.

Exactly right.

There is no such thing as a new timeshare.

All timeshares are used-used-used.

By the time any owner -- new, old, recent, long-established, newbie, oldie, savvy, doofus, etc., any owner -- shows up & checks in, chances are other people will have previously been staying there, occupying that very timeshare unit.

That's used any way you shake it.

So the timeshare companies are not only competing for sales against other timeshare companies, but they're also doing all they can to push back against resales -- which are the same product for next to nothing that the companies are trying to sell for big bux. Otherwise, as word leaks out & starts to spread about the reality that all timeshares are used-used-used, the timeshare companies are in a rough place.

The timeshare companies' options are to keep on hoping on the 1 hand that we rubes won't catch on about resales, or on the other hand to set up a proprietary points-based system or some VIP-style status gimmick intended to lure in some full-freight buyers anyway.

TUG is the only way I know of to push back against the pushback.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

 

[indyhorizons]

Although I might have an unfair advantage predicting , and this is not from new information as I have nothing new, last I heard would make it more like
$400 to upgrade
$1500 for resale owners ( This is a guess as I was just told more than developer owners)



.

Honestly Fletch, even at the prices you have quoted above, I believe I would be hard pressed to convert. Maybe I'm just a dinosaur who is digging in their heels, but I agree with Michelle, I refuse to give Marriott another dime. What with all other expenes skyrocketing (exchange fees, maintenance fees, airfare) this is becoming less and less fun, and I for one refuse to be held captive for a purchase I made 10 years ago.

I will use what I have bought however, I see no advantage to upgrading or whatever you want to call it, even if it is a one time fee. I know there are plenty of people who have points based systems and love them; however, the disadvantage, imho is that you can not control how many points it "costs" to vacation. Whereas with my deeded week, I know that if I pay my ever increasing maintenance fees, I can vacation, at minimum, where I bought. Period. If I'm lucky, I can pay an exchange fee and go somewhere else. End of discussion...

 

[potchak]

At $400 I would probably consider it, depending on what I would get for that, but even $1500 for my 1 resale week I think is too high. I stayed at a non Marriott this past weekend, and even though it was a Gold resort, it was no where close to Marriott quality, so I have seen the light in that regard. If there is a Marriott in the area vs some other gold resort (with the exception of the Four Seasons/Westins/Hyatts/etc) I will definitely select to go with Marriott. But they have to make it affordable and maybe some major incentives to do it. I would have to look at each one of our weeks and determine if it is worth it to buy into their points program. But I have a feeling I am not going to get the value I get today with my two Manor Club weeks (locking off 1 and getting 3 weeks with it, and trading back into 2bds.)

 

[BocaBum99]

I'd definitely pay $1500 to get access to flexchange units that are primarily Marriott developer units. If that is the price, it's a winner. I could sell it myself.

 

[m61376]

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.

I am a bit confused as to how lower value weeks will potentially be better off. I understand the concept of combining points, but I'm not so sure people will be thrilled about paying several years of MF's for a single week, versus the uptrading that many have managed to achieve through II.

This outlook is a complete 180 from what Fletch had posted way back- that lower season owners would be less likely to join.

 

[PerryM]

It's going to hurt folks...

Although I might have an unfair advantage predicting , and this is not from new information as I have nothing new, last I heard would make it more like
$400 to upgrade
$1500 for resale owners ( This is a guess as I was just told more than developer owners)
...

For a Marriott bought week:
$400 to convert now
$1,500 lost on resale
-----------
$1,900 net cost per week to join


For a resale Marriott bought week:
$1,500 to convert now
$1,500 lost on resale
-------------
$3,000 net cost per week to join

For a Marriott owner who decides not to join:
$1,500 lost on resale per week



If the average Marriott owner has 2 weeks this new exchange scheme will cost EACH Marriott owner:

• Marriott bought 2 weeks and joins - $3,800
• Resale bought 2 weeks and joins - $6,000
• Marriott owner who does not convert 2 weeks - $3,000

All because Marriott wants to chuck selling timeshare weeks and get into the Point exchange club business.

Thanks a lot Marriott.....

 

[RedDogSD]

Although I might have an unfair advantage predicting , and this is not from new information as I have nothing new, last I heard would make it more like
$400 to upgrade
$1500 for resale owners ( This is a guess as I was just told more than developer owners)

I would do it for $1500. However, I will need to carefully hear about how the rules will be implemented. HGVC was pretty smart about it in that they kept the Home Resort Priority, but ONLY if you were willing to take the exact thing you bought. So, since many people want to use the lockoff feature, or go to a smaller unit to save points, they do not get home resort priority, so they compete for the same reservations as everyone else. I am ok with that. If all of the Marriott Hawaii owners get 3 months to make reservations before any of the rest of us can touch it, I will not be thrilled.

 

[m61376]

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.

That's actually one of the bigger pitfalls I see with a potential new program, unless Marriott ties the point valuations to an objective real market demand value; IF the points reflected retail rental prices, I could see that as being an equitable comparison of relative values, and could easily be equitably recalculated for future resorts, with figures adjusted to reflect natural cost increases due to inflation over time.

The natural progression of prices over time I see as a big issue- just as a resort constructed today is more expensive to construct than one built in 2000, resorts built in 2015 will be more expensive to construct than today. If they are equivalent properties, however, should they be assigned a higher point value? And, what's the limit- are there any built in controls? In reality, IF Marriott goes to a home resort based system where each property/view/size commands a certain number of points (versus simply a trust based points system), what prevents Marriott from assigning 25% or even higher point valuations just to attract buyers. For example, if/when they develop the Cancun property, they could arbitrarily entice people with 50% higher point values (this is not a crazy notion- Starwood actually did something similar), such that other prime Caribbean weeks couldn't trade in in equivalent seasons (or perhaps would have enough points for 4 or 5 days or a 1BR versus a 2 where they own).

 

[dougp26364]

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.

Either they're going to sell deeded weeks like they have in the past, only with a points total that goes along with the week for an internal exchange club/system, or they'll sell trusts.

With a trust all they have to do is assign the inventory they own a total number of points. There is no deeded week that goes with a trust. There is only a grouping of units owned and managed by the trust with a set number of points associated with those deeds. Points are then sold but, there are no deeded weeks or deeds to process. You only own the RTU within the trust based on the fraction of the trust you own. That fraction is reflected by the points. MF's are then set the the HOA's of the resrots in the trust, the trust pays it's share of the MF's based on the number of units the trust owns. The total MF's plus the expenses associated with managing the trust are then divided by the number of points in the trust to set the MF per point. Individual owners pay based on that fee X the number of points they own.

I know of no deeded weeks system in which an actual deed is issued where they sell points packages and then blindly issue deeds. That would create a nightmare of complaints as owners assigned weeks at resorts where HOA's set higher MF's would complain about owners who were assigned deeds at resorts with cheaper MF's. It's not a workable scenario to sell points packages and blindly tie deeds to that package.

HGVC, who has deeded weeks with an internal points plan doesn't even do it as you're suggesting. Their solution was to sell deeded weeks but, all standard deeded weeks have the same points value. A platinum 2 bedroom standard unit/standard view is 7,000 points. A gold season standar unit/standard view 2 bedroom unit is 5,000 points. Ocean view, ocean front, upgraded amenities, penthouse units, event weeks all require more points.

Either Marriott will attach points to deeded weeks for their internal exchange program or they'll move to a trust based ownership where no one owns a deed. They'll just own a fraction of a trust with the RTU any week in that trust.

 

[dougp26364]

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)

If Marriott forces resale prices to fall, then that would be a good thing for those, like yourself, who live to buy resale at deeply discounted pricing. You get to enjoy the week you want and pay an even smaller fraction for the privledge. So what's the worry? Last year weeks were going for thousands. In your worst case scenario, by July 1 they'll be going for hundreds. Sounds like a good deal if you buy resale to me.

 

[dougp26364]

Although I might have an unfair advantage predicting , and this is not from new information as I have nothing new, last I heard would make it more like
$400 to upgrade
$1500 for resale owners ( This is a guess as I was just told more than developer owners)






Originally Posted by PerryM
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.

This seems to be a more reasonable guess than Perry's the sky is about to fall predictions.

 

[timeos2]

It would be a great deal at those prices

Speaking in the most general of terms a price of $1400 or so for the points would be a steal! We paid less than $1000 for our Club Sunterra membership back in the late 90's which today is at least $2995. It has turned out to be a great bargain and value although recent fee increases have negatively impacted the value and many more may cause us to drop it. Regardless we've got our money out and are happy we got in when it started. We're also EXTREMELY happy we held on to our deeded rights and the voting/home resort that goes along with that choice. We would never consider giving up our deed to be a points/trust member. In general Marriott properties are well above DRI's, although at much higher annual costs, so a similar cost to buy in should bring even better returns. We've had luck getting Marriott's at a discount easily from the DRI/II priority - I hope that doesn't end from a selfish view.

The doom and gloom about "points inflation" and "being locked out of newer resorts" is all hogwash as anyone in an existing points system (we belong to 3) can tell you. The very flexibility of points means IF you want to visit a newer resort or use a more popular toime or a larger unit - whatever - than what you own it is accomplished easily by poolin, renting, banking, borrowing or, as a very last and in over a decade unneeded for us, buying more points. The system is set up to accomplish that unlike weeks trades which has far more barriers to getting the newest or best with your old, deeded week and place & hope deposit with II/RCI ever could. Can you amass the points needed? Is the resort/time/size out there? Reserve it. Done. Week for week could never be as good.

Hopefully the program will be unveiled soon and all this insane speculation will finally end. As always if you are happy with the II week trade system then ignore whatever they may offer. But it will be tempting as they should have a real good story to tell and a product you will find useful. If it's as cost effective as Fletch estimates then it should be a big winner and plenty of owners - new and current - should be easily sold. Time will tell as always.

 

[PerryM]

Vultures take note....

If Marriott forces resale prices to fall, then that would be a good thing for those, like yourself, who live to buy resale at deeply discounted pricing. You get to enjoy the week you want and pay an even smaller fraction for the privledge. So what's the worry? Last year weeks were going for thousands. In your worst case scenario, by July 1 they'll be going for hundreds. Sounds like a good deal if you buy resale to me.

Why didn't I think of that?

Thanks Marriott - I'll just wait for the resale market to implode and then snap up juicy weeks for my own usage. Just have to get past the crying and blubbering about lost jobs, medical emergencies, divorce, death, and other reasons folks will sell Marriotts for $1 and I'm going to do them a huge favor.

See - I am a nice guy.

 

[indyhorizons]

The doom and gloom about "points inflation" and "being locked out of newer resorts" is all hogwash as anyone in an existing points system (we belong to 3) can tell you. The very flexibility of points means IF you want to visit a newer resort or use a more popular toime or a larger unit - whatever - than what you own it is accomplished easily by poolin, renting, banking, borrowing or, as a very last and in over a decade unneeded for us, buying more points. The system is set up to accomplish that unlike weeks trades which has far more barriers to getting the newest or best with your old, deeded week and place & hope deposit with II/RCI ever could. Can you amass the points needed? Is the resort/time/size out there? Reserve it. Done. Week for week could never be as good.



Let me start my saying, why should I pool my points to get what I want in the new system, if I can take the 1 week I own and exchange like for like. I know there are people who like the flexibility of points, and to each his own. I prefer 1 week intervals just fine, and am hoping the attempt to attract new owners/buyers, they don't find a way to make what we have always enjoyed no longer appealing.

 

[m61376]

For a Marriott bought week:
$400 to convert now
$1,500 lost on resale
-----------
$1,900 net cost per week to join


For a resale Marriott bought week:
$1,500 to convert now
$1,500 lost on resale
-------------
$3,000 net cost per week to join

For a Marriott owner who decides not to join:
$1,500 lost on resale per week



If the average Marriott owner has 2 weeks this new exchange scheme will cost EACH Marriott owner:

• Marriott bought 2 weeks and joins - $3,800
• Resale bought 2 weeks and joins - $6,000
• Marriott owner who does not convert 2 weeks - $3,000

All because Marriott wants to chuck selling timeshare weeks and get into the Point exchange club business.

Thanks a lot Marriott.....

While your analysis does have merit, I doubt that most people will look at it this way. They will think about what it costs them now, and not what they potentially will lose on resales.

I do agree, however, that ultimately whatever cost is entailed will be reflected in the sales price, unless the membership in the points system passes along with the sale. In that case, either the current owner pays to convert or the buyer pays (and theoretically lowers the sales price), but there is a single cost.

I think the bigger issue would be IF Marriott were to exclude future resales, and only have either a complete or fee based grandfathering of current resale owners. That would severely impact the resale market, imho.

So, while I know many here feel that resales are an inconsequential consideration, I really disagree. It boils down to expectations at purchase; some people feel that since Marriott makes it clear on the paperwork that there is no guaranteed underlying value, that they bought without consideration of retained value. I bought expecting some retained value and, perhaps erroneously, but since I bought on the resale market I assumed that over the long term there wouldn't be significant depreciation (of course, subject to the market conditions which loosely reflects real estate trends). I do know people who bought at initial pre-construction who expected to retain value as well.

So, while I have no idea of whether I am in the majority or minority wrt an expectation of some retention of value, I do know others feel the same way. If Marriott was to cannibalize resale values, I think it would be bad overall for the company, because I do think many people would think twice about shelling out thousands of dollars in advance purely for pre-paid vacation rights; destination clubs were built and collapsed on this concept (while it is true they did hold appeal, primarily dues to their higher end properties, many have fallen by the wayside). I may be wrong, but I think many (if not most) buyers, when deciding whether a purchase makes sense, count on a selling value in the calculations. In fact, the calculator here on Tug a few years back included that, and when salespeople have espoused how great a deal buying was, they did allude to the concept of retained value. Without the notion of retained value it is value, it makes it harder to justify purchase prices, esp. as they climb well into the five figures.

 

[indyhorizons]

Speaking in the most general of terms a price of $1400 or so for the points would be a steal! We paid less than $1000 for our Club Sunterra membership back in the late 90's which today is at least $2995. It has turned out to be a great bargain and value although recent fee increases have negatively impacted the value and many more may cause us to drop it. Regardless we've got our money out and are happy we got in when it started. We're also EXTREMELY happy we held on to our deeded rights and the voting/home resort that goes along with that choice. We would never consider giving up our deed to be a points/trust member. In general Marriott properties are well above DRI's, although at much higher annual costs, so a similar cost to buy in should bring even better returns. We've had luck getting Marriott's at a discount easily from the DRI/II priority - I hope that doesn't end from a selfish view.

Explain something to me, are you saying you paid a total of $1000, or are you saying in addition to xxx for the initial outlay your were requested/required to pay another $1000 to convert to a new system? If it is the latter, then where is the bargain? I am obviously missing something.

 

[indyhorizons]

Why didn't I think of that?

Thanks Marriott - I'll just wait for the resale market to implode and then snap up juicy weeks for my own usage. Just have to get past the crying and blubbering about lost jobs, medical emergencies, divorce, death, and other reasons folks will sell Marriotts for $1 and I'm going to do them a huge favor.

Good one Perry. :rofl:

 

[dougp26364]

For a Marriott bought week:
$400 to convert now
$1,500 lost on resale
-----------
$1,900 net cost per week to join


For a resale Marriott bought week:
$1,500 to convert now
$1,500 lost on resale
-------------
$3,000 net cost per week to join

For a Marriott owner who decides not to join:
$1,500 lost on resale per week



If the average Marriott owner has 2 weeks this new exchange scheme will cost EACH Marriott owner:

• Marriott bought 2 weeks and joins - $3,800
• Resale bought 2 weeks and joins - $6,000
• Marriott owner who does not convert 2 weeks - $3,000

All because Marriott wants to chuck selling timeshare weeks and get into the Point exchange club business.

Thanks a lot Marriott.....

You're basing your cacluations on Marriott charging per week. DRI charged ONE fee no matter how many weeks you owned. What basis makes you believe Marriott will charge a per week fee?

It appears to me that you keep pulling stuff out of the air in an attempt to scare the pants off of everyone. The drama is entertaining but it falls flat when it comes to facts.

 

[indyhorizons]

You're basing your cacluations on Marriott charging per week. DRI charged ONE fee no matter how many weeks you owned. What basis makes you believe Marriott will charge a per week fee?

It appears to me that you keep pulling stuff out of the air in an attempt to scare the pants off of everyone. The drama is entertaining but it falls flat when it comes to facts.

Perry wasn't the only one who implied or stated there would be a per week owned fee...

 

[PerryM]

Back to the future...

Does anyone here think their Marriott ownership will increase in "worth" after paying the membership fees and loss of resale value? If so, then pay more bucks and get more "worth" is how to exploit this.

Is Marriott is going to do a better job of exchanging reservations than II?

I don't assume that for a moment and when this new system hits and years go by we will be back to where we are today except it will have cost us a lot of money up front and in the rear.

For every problem solved there will be 2 more that take its place.

The only winner here is Marriott - you do know that right?

 

[DanCali]

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.

That would be a great sales pitch - pay us $50K for an asset you won't be able to sell for $5K ten days from now, or whenever we make changes that suit us in the future.

Unfortunately, they are not that honest when they sell the product...

 

[timeos2]

Own to use in points can be many resorts rather than one

Explain something to me, are you saying you paid a total of $1000, or are you saying in addition to xxx for the initial outlay your were requested/required to pay another $1000 to convert to a new system? If it is the latter, then where is the bargain? I am obviously missing something.

We paid $1000 to add our existing deeded ownership into the Club Points system. The same as paying $149 to join RCI as an exchange option as all of these are just different exchange options. We could have simply stayed with RCI/II week for week but found the points system a better choice. Until 2008 the annual fee for Club was $139 or less - it has skyrocketed to $279 in the past three years which is making it less and less desirable. Of course RCI & II fees have also gone up but not as drastically. As always it is best to own to use and a good points system allows "use" to mean many resorts rather than just one you own at and the need to trade for the rest using outside and costly services.

 

[potchak]

Well, if it is $400 per account, then I think I would be happy with that, but somehow I seriously doubt it. And would they make it be an all or nothing or could we pick and choose which ones we want in the program?