Starwood Spinning off Timeshare Division - Vistana Signature Experiences

[lizap]

Sounds like a similar arrangement that Interval has with Hyatt..

Interesting.

From Page 20:

A: We will enter into the License Agreement with Starwood which will, among other things, provide us with the exclusive right to use the Westin and Sheraton brands, in the vacation ownership business for the term of the agreement, and the right to use the St. Regis and The Luxury Collection brands in connection with the existing St. Regis and The Luxury Collection fractional residence properties for the term of the agreement. The License
Agreement also will provide that we must comply with certain physical and operating standards and policies. We will agree to pay royalties to Starwood under the License Agreement, including a fixed annual fee of $30 million and certain variable fees to Starwood. The License Agreement will also require us to obtain Starwood’s consent to use the Westin and Sheraton brands in connection with resorts or other programs that we acquire or develop after the distribution date. We may also propose new vacation ownership projects to Starwood, including fractional projects, under one of Starwood’s brands other than Westin and Sheraton, subject to Starwood’s review and approval, in its sole discretion, and agreement on economics and other terms of a separate license agreement for any such project. Additionally, prior to conversion we will have the right to continue to operate the Transferred Properties as hotels under the Westin and Sheraton brands. After conversion, we expect the Transferred Properties to operate as vacation ownership resorts under the Westin and Sheraton brands pursuant to the License Agreement. For more information, see “Certain Relationships and Related Party Transactions—Agreements between Starwood and Vistana Relating to the Separation.”

So, let me get this straight. In 2015, SVO made a net income of $25 million (page 15), and in 2016, they will pay Starwood $30million PER YEAR for the right to call our timeshares Westins and Sheratons.

Wow.

 

[Ken555]

Since they are keeping the Westin and Sheraton names, I suspect they will market the timeshares under those names as well. The new Vistana name will likely be used for contracts and general use. At least, that's what I would hope will happen, based on the little info we have at present.

In this scenario, from an outside perspective, the resorts will remain the same.


Sent from my iPad

 

[grgs]

Since they are keeping the Westin and Sheraton names, I suspect they will market the timeshares under those names as well. The new Vistana name will likely be used for contracts and general use. At least, that's what I would hope will happen, based on the little info we have at present.

In this scenario, from an outside perspective, the resorts will remain the same.

I agree with Ken's assessment. If they ever do change the Westin/Sheraton branding, that would likely have a negative impact on sales, rentals, etc.

Glorian

 

[cubigbird]

I think losing the Starwood name is not a good sign.. One huge thing that concerns me is another company, such as Wyndham, stepping in to purchase Vistana, which has a lower value.

With the new name being a clear divorce from Starwood, and with fairly limited inventory as compared to DRI, Wyndham, MVC and HVC etc, I can't see VSE over the long term being that competitive and would have to be sold. New (and many) destinations must come online!!!

As stated many times before. Own where you want to go - they can't change that.....the rest is just "benefits."

 

[wrstlpunkca]

I work in the hotel industry in addition to being a timeshare owner w/ Hyatt and Starwood. I don't think this bodes well and believe they have more surprises in store for us further down the road. It has been speculation in the hotel industry for the past few months that Starwood is going to merge or be acquired by another large hotel company. Removing "Starwood" from the timeshare company name sets them up for any pending transaction so that the timeshare entity is no longer associated with Starwood Brands. What other reason could it be: If Starwood Hotels merges with Hilton, Wyndham or InterContinental Group as is the rumor in popular press, they need to have that cleaned up & removed so that the hotel company merger is clean. All these other entities have their own branded timeshare names, so in effect the Starwood name would become redundant to a competing associated brand. Not good news for us as this means dilution in the value of what we own of which the brand name was such a strong component. I'm not happy. Check this artcile:

http://www.thestreet.com/story/1315...ime-share-spinoff-and-merger-speculation.html

 

[canesfan]

That $25 million is for first qtr. 2015. They made over $100 mil in 2014 and on track to make $135 mil in 2015.
We'll be able to afford the agreement with Starwood.

I hate the name. It's a sad day to learn that we are losing the Starwood name. I bought because of the Starwood / Westin name. I'm not a very happy owner right now.

 

[Julian926]

That $25 million is for first qtr. 2015. They made over $100 mil in 2014 and on track to make $135 mil in 2015.
We'll be able to afford the agreement with Starwood.

I hate the name. It's a sad day to learn that we are losing the Starwood name. I bought because of the Starwood / Westin name. I'm not a very happy owner right now.

I share the same concern. It feels like my starwood timeshare just dropped in value overnight. I wonder how this affects resale value.

 

[YYJMSP]

Vistana Signature Experiences (VSE) does not roll-off the tongue or gives me that warm fuzzy.

Forget warm fuzzy, it's leaving a bad taste in my mouth -- what a silly name, why not just go back to Vistana Vacation Club...

 

[YYJMSP]

Are the individual resorts going to keep the Westin/Sheridan names?

From the spin-off FAQs:

Will my resort continue to be operated as a Westin or a Sheraton brand?

Yes. We will retain a long-term affiliation with the Westin and Sheraton brands, ensuring the same level of quality and experiences you have come to expect.

 

[Henry M.]

As long as the Westin and Sheraton brands aren't eliminated by a Starwood merger with another hotel chain...

 

[wrstlpunkca]

Starwood is likely to be acquired very soon. They need to distance the timeshare company from the brands as soon the new entity will have many more brands under one fold - depending on who the Starwood Hotel Company merges with or is acquired by....

http://www.thestreet.com/story/1315...ime-share-spinoff-and-merger-speculation.html

 

[ocdb8r]

I work in the hotel industry in addition to being a timeshare owner w/ Hyatt and Starwood. I don't think this bodes well and believe they have more surprises in store for us further down the road. It has been speculation in the hotel industry for the past few months that Starwood is going to merge or be acquired by another large hotel company. Removing "Starwood" from the timeshare company name sets them up for any pending transaction so that the timeshare entity is no longer associated with Starwood Brands. What other reason could it be: If Starwood Hotels merges with Hilton, Wyndham or InterContinental Group as is the rumor in popular press, they need to have that cleaned up & removed so that the hotel company merger is clean. All these other entities have their own branded timeshare names, so in effect the Starwood name would become redundant to a competing associated brand. Not good news for us as this means dilution in the value of what we own of which the brand name was such a strong component. I'm not happy. Check this artcile:

http://www.thestreet.com/story/1315...ime-share-spinoff-and-merger-speculation.html

This is the primary motivation for not retaining Starwood, but I don't share the exact same concern (or line of reasoning). They don't want to retain "Starwood" as there is a very good chance that umbrella name will go away given the expectation Starwood is trying to sell/merge. It's very likely whomever buys them would retain the individual hotel brand names and bring them under their own umbrella or possibly a new umbrella name. Given they are retaining/contracting rights to the individual brand names, I'm not overly concerned. They'll focus on those for marketing. I'm not sure I say much value in "Starwood" alone...all the value was vis-a-vis "Sheraton" and "Westin."

 

[tante]

I better burn my spg points. If they do a 1 for 1 with any program but hyatt, i will lose a lot of value.

 

[DeniseM]

I better burn my spg points. If they do a 1 for 1 with any program but hyatt, i will lose a lot of value.

You can transfer them to an airline for safe keeping.

 

[YYJMSP]

You can transfer them to an airline for safe keeping.

Unless you're planning on using them up in the short term, parking your points in an airline is subject to risk of loss due to the continuing devaluation in those frequent flyer programs...

Personally I try not to have more points sitting somewhere than what I expect to use within 12mos

 

[tante]

You can transfer them to an airline for safe keeping.

Good point. I may just book some vacations

 

[canesfan]

I'm burning a good chunk of SPG points this summer. It couldn't be better timing!

 

[Sicnarf]

Another scenario is that Starwood will merge with a high end brand like Intercontinental thus expanding the hotel base for point stays and potentially increasing the value of VSE timeshares. I assume the merged hotel company will continue to manage the timeshare properties as it is today as incentive for the hotel exchange privileges. Just my 2 cents.

 

[ThreeLittleBirds]

I recently got some $50 Starbucks cards with my SPG points. I didn't have too, too many to worry about, but happy w/ my gift cards

 

[Sugarcubesea]

I'm bummed that this is happening… I might have to think about selling my SDO

 

[Henry M.]

I'd be happy going to my owned properties no matter what name they are managed under. The important thing to me is that they be maintained to the same standards they are today. I love Maui and St. John. Hopefully they'll stay associated with a higher end hotel brand.

A change could possibly break any schemes of buying cheap traders to go to more expensive locations, though. From the time I bought Maui I noticed they have some sort of Pacific club and can change SVN rules at will. I don't know how other properties are organized. We'll see what actually happens.

 

[okwiater]

I'd be happy going to my owned properties no matter what name they are managed under.

I completely agree. Having just reached 5*, I would certainly be somewhat disappointed if something happened to significantly devalue StarOptions, Starpoints, or Elite benefits, but that was never our primary reason for purchasing. We love all the resorts in our portfolio and would be happy even if everything else went away.

 

[Transit]

I'm cautiously optimistic in hoping that the new version of SVN or whatever SVN will be called will have a lot more new destinations added to the collection. I've enjoyed travel with SVN for many years and hope to continue to do so. This announcement leaves current owners with more questions than answers. Omitting details on how current ownership will be incorporated is frustrating.

 

[tomandrobin]

I'm cautiously optimistic in hoping that the new version of SVN or whatever SVN will be called will have a lot more new destinations added to the collection. I've enjoyed travel with SVN for many years and hope to continue to do so. This announcement leaves current owners with more questions than answers. Omitting details on how current ownership will be incorporated is frustrating.

I am taking a wait and see approach to see where the pieces fall.

Currently, the resorts I own are worth having regardless of company. But the tie to Starwood has a very broad appeal to us.

 

[tomandrobin]

I see others post about the hotel side being bought by another chain or merger. What about the new timeshare company being bought, merged with another timeshare entity?