Speculation About Marriott's New Timeshare Structure [merged]

[PerryM]

The Godfather...

Scene opens with the theme from "The Godfather" playing:

-Knock on Front Door of Nephew's home -

Godfather's Nephew:
"Godfather, Godfather I haven't seen you for 10 years - it's good to see you"

Godfather:
"You're my favorite nephew and I'm here to make you an offer you can't refuse"

Nephew:
"But Godfather, I paid off your loanshark's 14.99% loan after 10 years and am free and clear now"

- Camera Focuses in on Godfather's Marlon Brando like face -

Godfather:
"Yea, that's the problem kid - I need more than $1,000 a year from you"

Nephew:
"What do I get from you and how much will it cost my family?"

Godfather:
"I'm gonna let you stay in your used house for $1,500 and $99 extra a year"

Nephew:
"But what kind of deal is that?"

Godfather:
"It's protection money kid - I'll make sure nobody takes over your house while you're on vacation at the Jersey Shore at your timeshare".

Nephew:
"Thanks Godfather, you're my favorite Godfather and here's the deed to my house - you do what's best for me"

Godfather:
"Hey, I'm always look'n out for my favorite nephew."

- Scene ends with nephew's family eating spaghetti around the dinner table -

Nephew:
"Thanks to Godfather's generosity we have to decide - do we not pay the mortgage payment, car payment, and health-care payment, or eat dog food this month?"

- Scene fades to black as little Tony, the Nephew's son, getting out the can opener -

 

[jlf58]

Doug,

The reason that thier EOY weeks are cheap is they have come out and said they dont convert in the new system so anyone with EOY's is SOL.
I know what you are saying but this is what MVCI has said !

Maybe that's true but I sort of doubt it. If this is a trust based program, it would be relatively easy to convert the EOY week to trust based points at 50% of the EY units value, then just make the lower point total every year points. One would then have to borrow/save points to achieve EOY usage. It really doesn't seem to be a difficult step IMHO.

 

[dougp26364]

Doug,

The reason that thier EOY weeks are cheap is they have come out and said they dont convert in the new system so anyone with EOY's is SOL.
I know what you are saying but this is what MVCI has said !

Then it makes my decision easier. Ocean Pointe is a week we use rather than trade. Grand Chateau is the combination of two EOY weeks and we have traded it the last two years. Looks like I might not have to be concerned about the new system after all. I would have considered putting out Ocean Pointe week in only because I was figuring on putting the Vegas weeks in but, if the Vegas weeks don't go, neither will the Ocean Pointe week.

Since Marriott sold a good number of EOY weeks, this will make a number of owners angry. It will also remove one base of weeks from their new system. My guess would be there aren't enough EOY weeks to really make a difference to Marriott.

Of course, the EOY weeks didn't seem cheap to me when we bought them. We paid 60% of the EY week's price for the first week with the option to buy the corresponding week at 50% of the EY week price should we decide to "upgrade" to EY usage. Of course, rather than have one deed we ended up with two EOY deeds. I never saw that as "cheap" when I made my purchase. I suppose Marriott see's them as cheap because they only view them as half sales. I was once told by a saleman at Ocean Pointe that the only reason people buy Silver season weeks is because they can't afford Platinum season. This was before he realized we were silver season owners at Ocean Pointe. It taught me how some of the Marriott sale staff viewed their customers.

 

[dougp26364]

good morning...

Fletch this one is for you...

Please explain to me the logic of MVCI excluding EOY's from the "points-internal exchange" option. It seems to me that the more inventory in the "points" program the more appealing the program will be to both owners/converters AND new purchasers... My simple mind cannot come up with any possible motive/profit by this exclusion!!!

wow- that would be surprising- Marriott in essence telling even developer bought purchasers that they're not wanted. All those people who paid a premium to buy an EOY week, or bought 2 EOY weeks to different destinations, or believed the salesperson who told them buy an EOY now and take a year to decide whether to buy another one (but still ended up with 2 EOY units).

Keep in mind that while Fletch has been much closer to the source than any of us, he's no longer with Marriott and, he's going by the scuttlebut from the salesfloor. I have less reason to doubt him and more reason to believe him but, until I see it from Marriott, then nothing is final. There are very few people who know the details of what's going to be offered. No matter which way Marriott rolls with this, I'm still happy with the resorts we purchased and, I still know how to exchange via I.I.

 

[PerryM]

Then it makes my decision easier. Ocean Pointe is a week we use rather than trade. Grand Chateau is the combination of two EOY weeks and we have traded it the last two years. Looks like I might not have to be concerned about the new system after all. I would have considered putting out Ocean Pointe week in only because I was figuring on putting the Vegas weeks in but, if the Vegas weeks don't go, neither will the Ocean Pointe week.

Since Marriott sold a good number of EOY weeks, this will make a number of owners angry. It will also remove one base of weeks from their new system. My guess would be there aren't enough EOY weeks to really make a difference to Marriott.

Of course, the EOY weeks didn't seem cheap to me when we bought them. We paid 60% of the EY week's price for the first week with the option to buy the corresponding week at 50% of the EY week price should we decide to "upgrade" to EY usage. Of course, rather than have one deed we ended up with two EOY deeds. I never saw that as "cheap" when I made my purchase. I suppose Marriott see's them as cheap because they only view them as half sales. I was once told by a saleman at Ocean Pointe that the only reason people buy Silver season weeks is because they can't afford Platinum season. This was before he realized we were silver season owners at Ocean Pointe. It taught me how some of the Marriott sale staff viewed their customers.

Sounds like the Godfather is going to make you an offer you can't refuse either.

Just a WAG on my part....

 

[puckmanfl]

Perry, Doug, Fletch,Dean, Jon Boca , SueDon or any other TUGGER out there

I am still waiting for someone to explain why it would make any sense to exclude EOY's. Just when I am coming down from my "Perrymeter" and seeing some hope for this. I get to the part where it may be "moot" and 1/2 of my ownership won't even hear from the "GODFATHER"

I am new to this, just need to understand any gains that could come to the "mother" company by this exclusion. My logic states , that if they are going to risk alienating a portion of the owner base, it must come with some $$$ reason...

please help...

 

[GregT]

The reason that thier EOY weeks are cheap is they have come out and said they dont convert in the new system so anyone with EOY's is SOL.
I know what you are saying but this is what MVCI has said !

This is interesting -- I have been thinking that the reason EOY weeks are cheap is because this is Marriott's last opportunity to sell a specific deed.

IE if they have 100 2BR EOY Ocean View Ko Olina in inventory on May 1, 2010, and they know that on June 16, 2010 they'll stop selling KOL inventory, why not blow out that inventory?

It doesn't really matter to a points system if they have 10 2BR's in inventory on 6/16/2010 or if they have 50 2BR's -- they'll still price the points the same and still use the same sales pitch. So get what money you can for those remaining 2BR's in May and June while the deed still has individually sale-able value.

If the final system does in fact exclude EOY weeks from participating, I think Marriott made a very serious miscalculation in having such a high profile EOY sale and then preventing a class of owners from participating.

When we do a financing in the world of private companies, we do something called a Rights Offering, meaning that every individual stockholder (subject to investment accreditation) has the opportunity to invest so that the Company can't be criticized of favoritism/preferential dealing with certain stockholders. To not do a Rights Offering increases the Company's legal risk.

Now, Marriott doesn't have to make this new program available to everybody (like in a Rights Offering), but they would certainly have increased their legal risk by not doing so, especially if they just had a high profile promotion selling EOYs. I would expect that Marriott legal would require a specific disclosure signed by new purchasers that EOY weeks would not participate in a new program (if any), but we would have heard that by now on TUG?

This is indeed puzzling. With apologies, Fletch, I expect EOY weeks will be included. We will see what happens!

Greg

 

[Asia2000]

Direct Quotes From MVCI Sales Rep

These statements were made to me around April 20th of this year.

"Yes it is correct that we will be rolling out the points to the USA this year and June has been the proposed date."

Here I had asked about the future and not being able to trade into newer, more desirable resorts.

"Also remember one of the benefits of becoming a member is that collectively amongst members you pay your annual club dues which maintain our resorts to a high standard. Also around about 50% of our business comes from our member referral program! We rely on you as members and we don’t want to upset you and feel like you are being squeezed out! This is not the Marriott Way! I don’t believe this would be very good business practice!"

If they are going to be like the Godfather, MAR (stock symbol for Marriott) will be taking a dip.

 

[rovitm]

This is interesting -- I have been thinking that the reason EOY weeks are cheap is because this is Marriott's last opportunity to sell a specific deed.

IE if they have 100 2BR EOY Ocean View Ko Olina in inventory on May 1, 2010, and they know that on June 16, 2010 they'll stop selling KOL inventory, why not blow out that inventory?

It doesn't really matter to a points system if they have 10 2BR's in inventory on 6/16/2010 or if they have 50 2BR's -- they'll still price the points the same and still use the same sales pitch. So get what money you can for those remaining 2BR's in May and June while the deed still has individually sale-able value.

If the final system does in fact exclude EOY weeks from participating, I think Marriott made a very serious miscalculation in having such a high profile EOY sale and then preventing a class of owners from participating.

When we do a financing in the world of private companies, we do something called a Rights Offering, meaning that every individual stockholder (subject to investment accreditation) has the opportunity to invest so that the Company can't be criticized of favoritism/preferential dealing with certain stockholders. To not do a Rights Offering increases the Company's legal risk.

Now, Marriott doesn't have to make this new program available to everybody (like in a Rights Offering), but they would certainly have increased their legal risk by not doing so, especially if they just had a high profile promotion selling EOYs. I would expect that Marriott legal would require a specific disclosure signed by new purchasers that EOY weeks would not participate in a new program (if any), but we would have heard that by now on TUG?

This is indeed puzzling. With apologies, Fletch, I expect EOY weeks will be included. We will see what happens!

Greg

Greg,

Very good point. I have asked this question today in an email to my rep. Why purchase a EOY if I can't particpate in the new program. Also, shouldn't there be a diclsosure informing me of this. It would be misrepresentation if you tell me during the sale that I will have all the benefits of the program but then less then two weeks later I learn that I don't.

 

[GaryDZ]

I am new to this great community of Marriott owners. I own a 1 bedroom at the Aruba Ocean Club and am considering buying an additional 2 bedroom (both Platinum). I am a bit shell shocked after reading this thread. Should I hold off my purchasing decision until this works itself out?

 

[brigechols]

I am new to this great community of Marriott owners. I own a 1 bedroom at the Aruba Ocean Club and am considering buying an additional 2 bedroom (both Platinum). I am a bit shell shocked after reading this thread. Should I hold off my purchasing decision until this works itself out?

Welcome to Tug

IMHO, if you found a great deal on the 2 bedroom platinum and plan to primarily stay at Ocean Club and not exchange the unit, go for it. If you found an okay deal and are sitting on the fence, then wait it out.

 

[DanCali]

I am new to this great community of Marriott owners. I own a 1 bedroom at the Aruba Ocean Club and am considering buying an additional 2 bedroom (both Platinum). I am a bit shell shocked after reading this thread. Should I hold off my purchasing decision until this works itself out?

It is likely too late to buy at this point to have it grandfathered in (rumored deadline to register deed in your name is June 30?)

So if you will be part of "future resale buyers" you may as well get the "future resale buyers'" prices. Based on the title of this thread and Perry's comments, prices are headed down.

(based on the logic of "a paper loss is not a real loss", a guess a "paper opportunity gain" shouldn't matter either... - sorry, I just had to say that )

Of course there is also a possibility the program will suck, few will convert, and deeded weeks will be even more valuable - so if you wait it may cost you more.

Personally, I was thinking about buying another unit myself but at this point I'll wait...

 

[m61376]

It is likely too late to buy at this point to have it grandfathered in (rumored deadline to register deed in your name is June 30?)

So if you will be part of "future resale buyers" you may as well get the "future resale buyers'" prices. Based on the title of this thread and Perry's comments, prices are headed down.

(based on the logic of "a paper loss is not a real loss", a guess a "paper opportunity gain" shouldn't matter either... - sorry, I just had to say that )

Of course there is also a possibility the program will suck, few will convert, and deeded weeks will be even more valuable - so if you wait it may cost you more.

Personally, I was thinking about buying another unit myself but at this point I'll wait...

I'd agree; personally, I'd hold off buying anything right now. IF someone was going to purchase a developer week, why shell out the $$'s and then more to join a new system and why not learn what you may be getting into before taking the plunge. IF buying resale, I think it's too late to be included in any (if there is any) grandfathering and, IF the program seems to lack universal appeal and deeded weeks become more valuable (and I think that a program akin to the Asia Pacific offering will be a business fiasco, esp. in this economy, for several reasons- cost to join and the point assignments), there will still be a sizable buying opportunity on the resale market- prices won't escalate overnight, again esp. in this economy.

Three months ago I thought buying beforehand was a safe bet. I still feel that current resale owners will be in good shape. What I am not so sure about its where future resale buyers will fall, and I think, as suggested, there will be a cut-off date, which will likely be a "closed by" and "recognized as an owner by" date, rather than a date of contract. Of course, that's only speculation on mine or anybody's part.

As for puckmanfl's query about the potential exclusion of EOY weeks- it doesn't make sense to me either; it would seem to be an easy thing to do- either assign half points every other year as MF's are paid, or have them assigned EOY as the ownership dictates; assuming there will be carry-over and borrowing, either would be seemingly workable. Maybe it is one more bookkeeping task they'd rather not undertake. There are potentially thousands of EOY owners and, IF the program is as appealing as Marriott is going to tout it as being, then why antagonize thousands of owners by telling them their purchase (many of whom have paid a premium to buy) aren't good enough. Marriott sold people on the concept of two half ownerships at different locales as well; I don't get what would motivate a business decision to exclude this subset of direct purchasers. These, like any direct purchasers, should be especially coveted owners.

But, then again, I didn't get the Asia Pacific program, nor do I understand how it is a program enhancement for more owners even if it was free- but especially at a 5K per week pricepoint- personally, I think that the majority of owners would fare much worse than the current II exchange system, and can see the appeal only for a limited number of owners (Ko'Olina owners seem to be on the winning end there).

Then again, most people won't analyze it like we do here- and that's what Marriott will be banking on. On the other hand, it is real easy to "google" the topic and access a thread like this. Success of a program akin to the AP program (IF that's what they introduce) will largely depend on whether owners act like sheep and simply take the "newest and greatest" offer at face value or whether they step back and do a little research first; today people are more hesitant to shell out $$'s, so Marriott may encounter a level of consumer questioning that they didn't anticipate. That could make things a bit interesting.

 

[potchak]

I'm thinking Manor Club or maybe Willow Ridge in Branson might be the equivilent

I am hoping so! I have 2 manor club weeks!

I would also very disappointed if EOY are not included in the program

 

[taudelt]

So does anyone have the actual Marriott announcement about this?

So, forgive the noobie comment here, but with 63 pages of commentary on this topic, I would appreciate some help:

What is the official deal from Marriott? Does anyone have a formal statement of the changes?

I'm in an awkward situation as I bought 2 weeks at the Marriott Harbour Lake in Orlando through the resale market with the deeds recorded 29 March 2010. Marriott still has not transferred the weeks from the original owner to me due to an error with the selling agency only sending the transfer fees for one week instead of two. Marriott is now telling me that the transfer will not occur before 30 July 2010. To top things off the sellers banked the 2 weeks for 2010 with II prior to the sale.

Can someone tell me if I have deeded weeks or points? What happens with the II banked weeks under this change?

Appreciate the help.

 

[DanCali]

So, forgive the noobie comment here, but with 63 pages of commentary on this topic, I would appreciate some help:

What is the official deal from Marriott? Does anyone have a formal statement of the changes?

I'm in an awkward situation as I bought 2 weeks at the Marriott Harbour Lake in Orlando through the resale market with the deeds recorded 29 March 2010. Marriott still has not transferred the weeks from the original owner to me due to an error with the selling agency only sending the transfer fees for one week instead of two. Marriott is now telling me that the transfer will not occur before 30 July 2010. To top things off the sellers banked the 2 weeks for 2010 with II prior to the sale.

Can someone tell me if I have deeded weeks or points? What happens with the II banked weeks under this change?

Appreciate the help.

These are two separate issues.

First, you bought deeded weeks. If Marriott launches a points program and grandfathers existing resale owners I assume this will apply to you since the transaction closed and the units are already deeded to you at the Florida county recorder. The fact Marriott didn't transfer the ownership seems to me like just a technicality. Obviously, it's not up to me though - it's just my opinion.

In regards to 2010 usage - did you reimburse the seller for 2010 MFs? If so they had no business depositing the 2010 weeks into II... If you agreed to start using in 2011 then the seller can use the 2010 weeks as he pleases.

 

[taudelt]

did you reimburse the seller for 2010 MFs?

For 2010 usage, we paid 2010 MFs, but knew that the weeks were banked before we bought. We have the paperwork to transfer ownership of the weeks with II to send them once our ownership is cleared through Marriott. My question is more of the effect of the changes Marriott is making and how that relates to they are seen by II.

 

[brigechols]

What is the official deal from Marriott? Does anyone have a formal statement of the changes?

There has been no official announcement from Marriott.

Can someone tell me if I have deeded weeks or points?

You have a deeded week.

What happens with the II banked weeks under this change?

Nothing since the rumored change concerns Marriott and not II. You will still have two banked weeks with II.

 

[DanCali]

For 2010 usage, we paid 2010 MFs, but knew that the weeks were banked before we bought. We have the paperwork to transfer ownership of the weeks with II to send them once our ownership is cleared through Marriott. My question is more of the effect of the changes Marriott is making and how that relates to they are seen by II.

can you just call the Marriott transfer department, explain the situation and ask what it would take to make it happen. If they tell you they need to get paid ask if you can pay them directly via credit card (I assume it's around $100 or less) and hopefully that will get the ball rolling. You can then try to sort things out with the closing company or broker who messed up. Hopefully you can get the ball rolling that way.

 

[mjkkb2]

I just spoke with my rep trying to get the II memebership accelerated that they pay for and he mentioned that he was in training for last few days.

I have asked him what kind of training, and he said that there's some new exciting things coming for Marriott owners and that I'll love it.

Hm... wondering if I really will.....

Regardelss, a change is coming.

 

[Dean]

Perry, Doug, Fletch,Dean, Jon Boca , SueDon or any other TUGGER out there

I am still waiting for someone to explain why it would make any sense to exclude EOY's. Just when I am coming down from my "Perrymeter" and seeing some hope for this. I get to the part where it may be "moot" and 1/2 of my ownership won't even hear from the "GODFATHER"

I am new to this, just need to understand any gains that could come to the "mother" company by this exclusion. My logic states , that if they are going to risk alienating a portion of the owner base, it must come with some $$$ reason...

please help...

Personally I'm not sure it does make sense. The only reason it would make sense is if they simply don't work well with any model they might end up using. I doubt it'll make sense for the member for one with a week they use and 1 or 2 EOY weeks to convert though given there will likely be a conversion fee per week and a yearly club fee. But they might do an end run and only convert if you upgrade to an EY points package and trade in you EOY week. Though I don't doubt Fletch's info was accurate at one time, and may still be, I agree with Doug that it's a decision that could easily change and likely will in some way. It might even be a fat no initially and change later.

 

[GregT]

Though I don't doubt Fletch's info was accurate at one time, and may still be, I agree with Doug that it's a decision that could easily change and likely will in some way.

The two views could be reconciled if Marriott allows EOY weeks into the point system (as many of us expect) but does not sell future EOY point packages, only annual point packages (which would then be consistent with what Fletch has heard).

We will need a new thread once hard facts are known about the program.

This puppy is pushing 1,575 posts since February 2010. If Perry brings out another film spoof, we could blow through 2,000.

For comparison, the infamous Aruba thread only has 2,750 posts after almost two years.

 

[m61376]

The two views could be reconciled if Marriott allows EOY weeks into the point system (as many of us expect) but does not sell future EOY point packages, only annual point packages (which would then be consistent with what Fletch has heard).

We will need a new thread once hard facts are known about the program.

This puppy is pushing 1,575 posts since February 2010. If Perry brings out another film spoof, we could blow through 2,000.

For comparison, the infamous Aruba thread only has 2,750 posts after almost two years.

And IF this does come to fruition in the next few weeks and continues in this thread, I suspect this will easily surpass the Ocean Club thread in a week after the announcement.:hysterical: :hysterical:

 

[PerryM]

Recap to date...

As a public service gesture here is a recap of this thread to date:

[...................]

I hope you got that.

Marriott is going to make some kind of announcement "soon" and it probably has something to do with an Internal Points Exchange System and perhaps a total upheaval of how they sell timeshares.

Oh, and the Marriott salesreps say "we will like it".

That just about sums it up - and a lot of guessing on just about everyone's part.

So here it is again:

[...................]

 

[rsackett]

As a public service gesture here is a recap of this thread to date:

[...................]

I hope you got that.

Marriott is going to make some kind of announcement "soon" and it probably has something to do with an Internal Points Exchange System and perhaps a total upheaval of how they sell timeshares.

Oh, and the Marriott salesreps say "we will like it, Unless you bought/buy RESALE, then your week will be worthless!"

That just about sums it up - and a lot of guessing on just about everyone's part.

So here it is again:

[...................]

I made one correction to your post.

Ray