Speculation About Marriott's New Timeshare Structure [merged]

[DanCali]

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.....

Fletch estimated $1500 per resale week - I assume that is existing resale owners... If the cost for future resale owners is higher (some imply it might be), this looks worse of course.

I call this evaporation of value. We should have a new Marriott satisfaction survey 6 months into the system and compare the before and after... My guess is it will look like the Starwood satisfaction survey.

 

[BocaBum99]

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.

Nothing you or I can do to stop the conversions to points. Weeks will be fine for as long as owners want to stay there. I don't care if Marriott manipulates the system. As long as I have a loophole I can exploit now and my payback is less than 3 years, they can do anything they want. I love the idea of Flexchange units for 10000 points on that Asia scale. Totally worth the $1500 for that privilege. We will see what they numbers actually look like first, though.

 

[PerryM]

Fletch estimated $1500 per resale week - I assume that is existing resale owners... If the cost for future resale owners is higher (some imply it might be), this looks worse of course.

I call this evaporation of value. We should have a new Marriott satisfaction survey 6 months into the system and compare the before and after... My guess is it will look like the Starwood satisfaction survey.

Marriott is famous for "Step Pricing".

For Resale Memberships 1 - 1,000 - $1,500 a week
For Resale Memberships 1,001 - 2,000 - $1,600 a week
etc.

Marriott will simply use owners to establish a "correct" sales price and when sales slow down then they redo the "Step Pricing" to lower values.

I just don't see coming up with a "Fixed membership fee" - that just isn't in their blood - we, the owners, will fight to get that price higher.

P.S.

So yes, the membership fee might be $400 - for the first X number of owners, and then $500 for the next, and $600 for the next...

The pressure to not pay your mortgage and use that money to buy Marriott memberships will be great. Same with your car insurance, health insurance, and food.....

 

[bw3]

deeded weeks

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.

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.

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.

Some very good points being made in this thread. I was wondering when we would get to the issue of deeded weeks in a timeshare regime. As Tombo mentioned, some owners will keep what they have because they know what they have. We own 5 gold and 2 platinum weeks at Grande Ocean in Hilton Head. We have no intention of joining any points program. We have no need for it. We mainly stay at the same place. When we purchased our first weeks in 1992, we contemplated what might happen to timeshare and Marriott at that time. We only purchased because we knew that Marriott and Interval International might go away but we would still be happy vacationing at Grande Ocean. As an owner, I think of Marriott as a property manager. If they continue to do a good job, keep them. If they begin consistently performing poorly, fire them. I did not buy a Marriott week. I bought a Grande Ocean week. The points program brings an interesting issue for owners even if we do not participate. If people join the program by surrendering deeded weeks to a trust run by Marriott, then Marriott is an owner. Marriott could then vote all their weeks to retain Marriott as property manager in spite of how poorly they manage the property. They have done a spectacular job to date so I do not anticipate this happening tomorrow. But if they have little chance of losing the contract, they could increase the price or just reduce the staffing and service levels with no ramifications. This type of conflict of interest can cause major financial meltdowns. Think of what it could do to deeded ownership.

Then there is the question of what you get for your week. Bronze weeks are currently worthless at Grande Ocean. You cannot give them away. The maintenance fee is $1,062 this year for each week. If buyers are paying zero for these weeks, how many points would Marriott give them for a Bronze week? And if they give, just for example, 5,000 points for a bronze week and 10,000 points for a silver week, will the maintenance fees remain the same for each participant? Or will the silver week participant now pay twice the maintenance fee as the bronze week participant?

I recall looking into DVC at Hilton Head when I purchased Grande Ocean weeks. The points that I would be required to buy to get a week in the summer were about $24,000 when the Grande Ocean prices were under $16,000. And Disney was RTU and nowhere near the ocean. I am curious what the translation for points to weeks will be at peak times at peak resorts. All this is speculation. But I appreciate all the thoughts and comments from everyone in advance of actual release. It gets you prepared for all the questions that will follow. I guess I just like to prepare for the worst but hope for the best.

Going back to Pool Bar Jim's soon. Everything will be better then.

Bob

 

[tlwmkw]

1250 more to go!

This thread is catching up with the Aruba concerned owners group thread- in 1250 more posts it will be tied.

tlwmkw

 

[RandR]

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.

But, if you want to extend Perry's conspiracy theory, Marriott is hoping to crush resale prices. This way they can scoop up cheap, but valuable weeks with ROFR to add to their points system.

 

[PerryM]

But, if you want to extend Perry's conspiracy theory, Marriott is hoping to crush resale prices. This way they can scoop up cheap, but valuable weeks with ROFR to add to their points system.

I'm glad some of you are ready for your black helicopter visit from Marriott

That ROFR plays a very critical part of this new system - it is the spark to ignite the fuel to make this new sales engine a winner for Marriott stockholders.

 

[RandR]

Nothing you or I can do to stop the conversions to points. Weeks will be fine for as long as owners want to stay there. I don't care if Marriott manipulates the system. As long as I have a loophole I can exploit now and my payback is less than 3 years, they can do anything they want. I love the idea of Flexchange units for 10000 points on that Asia scale. Totally worth the $1500 for that privilege. We will see what they numbers actually look like first, though.

This is could be the first "loophole" in the new system. For people that can travel during Flexchange, right now, they can get 2 weeks by locking off their unit and trading the two parts. In a points system, it may be possible to get several weeks since the points needed may be much lower during Flexchange. As has been stated before....some will win and some will lose.

 

[RandR]

I'm glad some of you are ready for your black helicopter visit from Marriott

That ROFR plays a very critical part of this new system - it is the spark to ignite the fuel to make this new sales engine a winner for Marriott stockholders.

It would be interesting to see where the ROFR settles. Hopefully they only scoop up the real cheap ones and leave a few over for the rest of us.

 

[GregT]

It would be interesting to see where the ROFR settles. Hopefully they only scoop up the real cheap ones and leave a few over for the rest of us.

My personal opinion on this is that they'll ROFR the resorts that have been sold out for awhile (like MOC) that they want to credibly use as part of their sales pitch, but will be more judicious in ROFRing the ones they were still building/selling (Ko Olina) because they have sufficient developer inventory. Over time, they'll might expand the ROFR for the Ko Olina resales if the price is cheap enough.

I think we'll see a surge of ROFRs initially to communicate the message that Marriott is back in the ROFR business, but then they throttle back to just ROFR what they need.

I agree with Perry that ROFR is an important part of this system, or more specifically, the "threat" of ROFR. If we bid too cheaply, the deeded week could disappear forever into the pool.

 

[PerryM]

Bow wow ROFR ROFR...

The ROFR changes with the new exchange system.

Before 6/15/10 Marriott would exercise the ROFR to snap up high demand weeks - ones they already had customers for - they might have exercised the ROFR at 60% of resales in order to get that hot week.

After 6/15/10 Marriott has NO incentive to snap up high demand weeks - instead they will go doggy shopping and look for the dregs of weeks - the ones that no one wants like Silver and Bronze and get them for very low rates since they won't be joining the new exchange system.

The result will be NO support at all, if there ever was one, for hot weeks. I suspect Marriott will put on their rubber boots and go out hunting for dregs of the Marriott world. Those weeks will probably be Point inflated and Marriott's main focus from now on.

Marriott never needs to buy a high priced week 52 at MountainSide anymore...

 

[dougp26364]

But, if you want to extend Perry's conspiracy theory, Marriott is hoping to crush resale prices. This way they can scoop up cheap, but valuable weeks with ROFR to add to their points system.

ROFR has always artificially propped up resale prices. If Marriott starts back up with ROFR, that's a good thing for those wanting to sell. All one has to do is look at recent history to see what happens to resale prices when Marriott stopped exercising ROFR.

If Marriott makes the program reasonably priced to join and, if they program is as flexible as all the other points based reservations systems I've seen, Marriott won't need to scope up anything. They'll have owners paying to join the new program. Money comes in, units come in, no money goes out to buy a thing. Seems like the simplest solution to me. Easier than the doomsday predictions of Perry and considerably cheaper to boot.

Sorry, I'm not drinking Perry's Koolaid. In Perry's world, there's a Marriott monster hiding under every timeshare bed just waiting to devour Marriott timeshare owners. He'll be able to claim a few victory's no doubt from his many doomsday predictions but, when it comes down to the final analysis, I doubt it will be anywhere near as bad as he wants everyone to believe it's going to be.

I think Perry's been playing with his Westgate purchase a little to much and has become paranoid at the hands of how King David of Westgateland treats his owners. He's been badly fooled once. Now he's seeing shadows and jumping at ghosts.

 

[PerryM]

Goal.....

ROFR has always artificially propped up resale prices. If Marriott starts back up with ROFR, that's a good thing for those wanting to sell. All one has to do is look at recent history to see what happens to resale prices when Marriott stopped exercising ROFR.

If Marriott makes the program reasonably priced to join and, if they program is as flexible as all the other points based reservations systems I've seen, Marriott won't need to scope up anything. They'll have owners paying to join the new program. Money comes in, units come in, no money goes out to buy a thing. Seems like the simplest solution to me. Easier than the doomsday predictions of Perry and considerably cheaper to boot.

Sorry, I'm not drinking Perry's Koolaid. In Perry's world, there's a Marriott monster hiding under every timeshare bed just waiting to devour Marriott timeshare owners. He'll be able to claim a few victory's no doubt from his many doomsday predictions but, when it comes down to the final analysis, I doubt it will be anywhere near as bad as he wants everyone to believe it's going to be.

I think Perry's been playing with his Westgate purchase a little to much and has become paranoid at the hands of how King David of Westgateland treats his owners. He's been badly fooled once. Now he's seeing shadows and jumping at ghosts.

I can always determine how effective my debating becomes with folks wanting to change the topic.

Who cares what I say in the grand scheme of things? Marriott could care less and if I cause folks to scratch their heads and think before they panic then I've accomplished my little goal.

 

[brigechols]

dougp26364 and PerryM,

I have not been a Tugger as long as the two of you so it's hard to tell whether you are best buds or frenemies. Your back and forth banter reminds me of Jack Lemmon and Walter Matthau - quite entertaining

 

[AceValenta]

I still think this is rumor mongering by sales people to scare people into purchasing weeks in a down economy. I guess, I will find out in a few days if it is fiction or non-fiction.

I just received my MVCI Insider news letter and nothing about the points program. Googled Marriott, MVCI and Marriott Vacation Club and clicked on news, guess what nothing.

I got a call from a sales rep and he said June 7th is now the day and it is going to be modeled after the Asian Points Program. He even mentioned TUG and how they have figured it out. Wanted me to buy a week now before it is too late!!!


This is too big of an item for everyone to be silent on the issue.

You would think if Marriott would be coming out with this program they would be emailing all current owners about an exciting change coming to their program to build up the hype and get the quick flip.

"Only 30 days until your ownership will give you more!"

I may be wrong here but I am still not buying it, until I see it!

 

[taffy19]

I'm glad some of you are ready for your black helicopter visit from Marriott

That ROFR plays a very critical part of this new system - it is the spark to ignite the fuel to make this new sales engine a winner for Marriott stockholders.

You are starting to worry me Perry as I just read this. This is a very nice timeshare resort also on Maui. Is this what we can expect in the future? I hope not.

I start to believe that the less timeshares you own, the better off you are. I am glad that we only own one Marriott and will rent from an owner if we need an extra week. That may be the smartest thing to do from here forward.

 

[PerryM]

Exchanging the exchange company....

You are starting to worry me Perry as I just read this. This is a very nice timeshare resort also on Maui. Is this what we can expect in the future? I hope not.

I start to believe that the less timeshares you own, the better off you are. I am glad that we only own one Marriott and will rent from an owner if we need an extra week. That may be the smartest thing to do from here forward.

We stayed at the Ka'anapali Beach Club for a week this past February - just as nice as the old part of the MOC; it had a FULL kitchen in our 1-bedroom (Who cooks while in Maui?).

Folks are going to have to be fast and have cash to benefit from the tsunami that is about to turn Marriott upside down. Prices that we have been joking about just might start to show up with Marriotts.

I'm guessing but 15 minutes after reading the new exchange system is all I need to make decisions, about events, that will present themselves minutes later.

If you thought 8:00 AM CST was nerve racking making an exchange how about exchanging exchange companies?

There's a good chance a lot of once-in-a-lifetime opportunities might pop up. I'm going to be ready....

 

[dougp26364]

dougp26364 and PerryM,

I have not been a Tugger as long as the two of you so it's hard to tell whether you are best buds or frenemies. Your back and forth banter reminds me of Jack Lemmon and Walter Matthau - quite entertaining

I like Perry. I just think we need a little balance to the chicken little routine he's doing about something he has no good intell on. It's one thing to be concerned. It's quite another to pull numbers from the air to support a theory in order to whip the masses into a frenzy. The theory of if you don't know it, make it up and make it sound horrible doesn't work so well with me.

We all have to remember that we don't know. It's only educated guessing. Most importantly there's nothing to be worried about..........yet. Much of what we worry about either never happens or is something we have no control over. So worrying about anything is generally counter productive. Speculation is fine. Creating worry by producing statements and making them sound as if they are facts is counter productive IMHO. Perry crossed that line a long way back.

 

[PerryM]

dougp26364 and PerryM,

I have not been a Tugger as long as the two of you so it's hard to tell whether you are best buds or frenemies. Your back and forth banter reminds me of Jack Lemmon and Walter Matthau - quite entertaining

I don't know a Doug, but I'm certain we would have a great time sipping Margaritas watching the sun set on the old Marriott - if he buys

 

[dougp26364]

I still think this is rumor mongering by sales people to scare people into purchasing weeks in a down economy. I guess, I will find out in a few days if it is fiction or non-fiction.

I just received my MVCI Insider news letter and nothing about the points program. Googled Marriott, MVCI and Marriott Vacation Club and clicked on news, guess what nothing.

I got a call from a sales rep and he said June 7th is now the day and it is going to be modeled after the Asian Points Program. He even mentioned TUG and how they have figured it out. Wanted me to buy a week now before it is too late!!!


This is too big of an item for everyone to be silent on the issue.

You would think if Marriott would be coming out with this program they would be emailing all current owners about an exciting change coming to their program to build up the hype and get the quick flip.

"Only 30 days until your ownership will give you more!"

I may be wrong here but I am still not buying it, until I see it!

You could be closer to reality than anyone else. Who knows, Marriott has said nothing. TUG could just be a pawn in the game of Marriott's sales force.

The only thing is, there's been mention of this by three people who apparently have connections to Marriott. DaveM who has been decidedly silent on this thread. Fletch who was a former salesman for Marriott. From Timeshareforums Rikkis Playpen made mention of word of it from a business gathering he was at for a law firm who was assigned the task of getting the new program approved in every state in which Marrriott wants to sell (which was supposedly the big hold up).

It has the feel that something is actually up this time. On the other hand, when we were in Hilton Head a couple of weeks ago, the conceirge knew nothing about their sales offices closing down for retraining. In fact I told her I wasn't sitting through another presentation until after the new program was rolled out. Which is true even if Marriott didn't roll out a new program. I won't sit through another "owners update" until there's something I feel I need updating on. Even then I'll probably get it from TUG rather than Marriott.

Marriott sale members are still timeshare salesmen. Most of the time they don't know their own product much better than anyone off the street and, it's pretty obvious that at least some will use anything they can as leverage to make a sale. Using the rumored new system isn't going to be beneath some of them if they think they can get away with it. Managers looking to prop up sales will look the other way if it increases the number of sales their office is making.

 

[dougp26364]

We stayed at the Ka'anapali Beach Club for a week this past February - just as nice as the old part of the MOC; it had a FULL kitchen in our 1-bedroom (Who cooks while in Maui?).

Folks are going to have to be fast and have cash to benefit from the tsunami that is about to turn Marriott upside down. Prices that we have been joking about just might start to show up with Marriotts.

I'm guessing but 15 minutes after reading the new exchange system is all I need to make decisions, about events, that will present themselves minutes later.

If you thought 8:00 AM CST was nerve racking making an exchange how about exchanging exchange companies?

There's a good chance a lot of once-in-a-lifetime opportunities might pop up. I'm going to be ready....

It might not take you that long to calculate the cost vs benefit to you.

It will be interesting to see what happens to resale values if a new points ownership program is instituted. What will really be of interest to me is to see if Marriott starts in with ROFR again. Without ROFR, prices have steadily fallen. It could be debated which came first the chicken (Marriott not exercising ROFR) or the egg (new program has owners running).

As for Kaanapali Beach Club, there are other factors to consider. Many owners at DRI resorts WANT to be in their points based system. Resale buyers have a tough time getting into that system so resale prices are low. DRI doesn't exercise ROFR. DRI also has increased MF's and enforced rules since taking over from Sunterra. Sunterra held to an unwritten rule about view and where owners should be placed. DRI went by what was in writting and it upset some of those owners.

There is also animosity between owners at the Point of Poipu and DRI. You only have to go to the Hawaiian forums to see that issue. Mostly at issue are the MF's which went through the roof when DRI took over.

But back to Marriott. If resales are prohibited from any new program Marriott might come out with AND (that's a big and for a reason) Marriott doesn't exercise ROFR in the future, my guess is you'll see prices fall drastically on the resale market. This is a good thing if your a buyer and it's only bad if you're wanting to sell. Essentially, it shows the true value of the timeshare.

Now if I were wanting to add a unit for personal usage, say at the Kauai Beach Club, changes Marriott might make could be beneficial to me. I might be able to get rid of my Branson week and turn around and buy something with Marriott that we'd really like to own. It all depends on how you look at this sitution. If you're wanting to sell, then the glass probably looks half empty. If you're wanting to buy then you're cup may runneth over. If all you want to do is own and enjoy your present weeks, then it's likely you'll barely notice a ripple on the water. If you're into exchanging your weeks, better get your reading glasses on and study up on Marriott's offer.

 

[dougp26364]

I don't know a Doug, but I'm certain we would have a great time sipping Margaritas watching the sun set on the old Marriott - if he buys

If we're ever in Vegas on NYE, We'll wave towards your Westgate unit from Marriott's roof top bar. Or we could just find a bar and sip margarita's and debate timeshares until they close the place down.

 

[PerryM]

If we're ever in Vegas on NYE, We'll wave towards your Westgate unit from Marriott's roof top bar. Or we could just find a bar and sip margarita's and debate timeshares until they close the place down.

You'll have to wave at my renter - we will be staying at Polo Towers this NYE!

 

[rthib]

You could be closer to reality than anyone else. Who knows, Marriott has said nothing. TUG could just be a pawn in the game of Marriott's sales force.

Put me in the "This is nonsense" camp.

Something like this would be a big change for Marriott and would have at least some impact on their earnings. With all the shutdowns, legal filings, re-training etc... someone would be leaking the info. And yet from the folks I know who monitor Marriott from a financial view point - nothing. No one there has heard of anything - and they live on rumor.

I think this is a figment of the TUG imagination.

Still this is great fun:
But my favorite part is people who are upset at Marriott for what is wrong with this program. A program that doesn't exist.

 

[Dave M]

Put me in the "This is nonsense" camp.

As I stated in another thread, responding to one of your pooh-poohs of the forthcoming points / internal exchange program, the "rumors" are based in fact.

I won't repeat the rest of that post except to say that my sources within Marriott have not been wrong (other than with respect to timing) on any topic that I have posted here based on those sources over the past five years.

And as a CPA who spent 31 years working on SEC filings for public companies and what type of business change is reportable under SEC rules, I can assure you that this change won't even be a blip on the screen for Marriott in terms of how the market will view it. The financial considerations are extremely unlikely to be significant enough to warrant advance reporting.

And if you don't believe the info about the new program hasn't been leaking, you haven't been reading the many consistent reports on this forum.

It's coming. I still haven't been able to obtain the details, but it will be here soon.