SVO Management

[Troopers]

Exercise ROFR and re-sell at a profit.

In this economy, doesn't make sense.

1. It would have to sell at same price as "new" units or otherwise compete against itself and never be able to sell at their developer price.

2. Increase inventory while reducing cash. Not good when sales are down.

Some resale prices on Starwood properties are so low that Starwood's acquisition cost would be far lower than building new. And some of those bargain resale prices are competing directly with the few, new developments Starwood does have in progress (eg. SBP Phase I competes with SBP Palmetto; Mission Hills competes with Desert Willows).

How can Starwood allow an SBP on resale to transfer for $2,500 when they are selling something new next door for about ten times as much (or at least trying to sell something new next door for ten times as much)?

I understand that it is hard to sell anything right now, but it is even harder if the same thing can be bought for 10% - 25% of the developer price rather than the historic 50% - 60%.

Remember their customer base is the uninformed. They do not lose any customers unless resales are nominally less (say 15%) than their price. Ultimately, Starwood growth depends on expansion not reselling units in developed properties.

 

[Cathyb]

clsmit: When you were buying your unit, you didn't see the chart that showed the Platinum Plus weeks involved? Wow, Starwood gets more devious by the day

 

[Cathyb]

oh I thought WDW meant Walt Disney World -- (just kidding). Do you have access to Mission Hills amenities? I am curious because I would like to check out the WDW amenities

 

[LisaRex]

For people who think I'm being hysterical:

http://streettalkblog.com/?p=2891

http://www.fool.com/investing/high-growth/2008/09/17/throw-this-stock-away.aspx


"Hotel chains aren't necessarily immune to the real estate crunch. A big sandbag in Starwood's report was a 29% dip in vacation ownership and residential sales."


"...Starwood's earnings will be practically flat with this year's showing, and that's with fewer shares outstanding after some aggressive share repurchases. I would normally applaud buybacks, but Starwood also has more than $4 billion of debt on its balance sheet."

That's billion with a "b."



That probably answers why they aren't building any more timeshares. The banks probably won't lend them any money.

 

[calgarygary]

For people who think I'm being hysterical:

http://streettalkblog.com/?p=2891

http://www.fool.com/investing/high-growth/2008/09/17/throw-this-stock-away.aspx


"Hotel chains aren't necessarily immune to the real estate crunch. A big sandbag in Starwood's report was a 29% dip in vacation ownership and residential sales."


"...Starwood's earnings will be practically flat with this year's showing, and that's with fewer shares outstanding after some aggressive share repurchases. I would normally applaud buybacks, but Starwood also has more than $4 billion of debt on its balance sheet."

That's billion with a "b."



That probably answers why they aren't building any more timeshares. The banks probably won't lend them any money.

Starwood is having absolutely no difficulty in acquiring new hotels and developing new hotel brands. There is plenty of $ available to Starwood, they have just been spending it where they receive their largest return. I firmly believe that in van Paasschen's mind, SVN is like an old pair of Nikes - not worthy of an investment.

 

[tlpnet]

oh I thought WDW meant Walt Disney World -- (just kidding). Do you have access to Mission Hills amenities? I am curious because I would like to check out the WDW amenities

To be totally honest, I don't remember. It's probably a good 10-15 minute drive from WDW to WMH and the Westin hotel. It seemed to me that they were trying to market it more as separate resort. It would be kind of weird, though, to exclude amenity sharing within the same area. I'll glance through my owner materials when I get home, and let you know if I find anything.

-tim

 

[stevens397]

In terms of Cabo, my partner went to the Westin Club Regina 4-5 years ago and toured Grand Regina. He and his wife fell in love and bought into the newer phase - and the foundation was already up.

They have since paid it off and are sucking wind. Got excited about two years ago when he got a letter from Starwood - not only would they complete the job but he would be in the Starwood program I had raved about. And again, nothing.

He has paid in full ( a load of money) and has extreme doubts it will materialize. I don't have the heart to share this thread with him - with the economy the way it was, it could be years, if ever, before this project is complete and he actually gets something.

My sense is that he should look for foreclosures in the first section and see if they will let him switch, but he also said that there has been a big cutback on services for those units.

Seems like a big screwing all around.

 

[TheUnitrep]

I haven't posted in a while but my dealings with Owner Services during the past few days led me to post in this thread.....

Two days ago, I decided to book a unit at WKORV-N in mid-January. My first call to Owner Services was merely an availability check. Phone number (even though I inputted it via the key pad seconds before), name, address and email provided to the rep. The rep I spoke with told me there was plenty of availability in the type of unit I was requesting for my check-in day (Sat). Of course the rep added the usual "availability is always subject to change, yada, yada, yada." When I asked the rep about availability at WKORV, the rep said there was even more units open there.

Yesterday, when our plans were finalized, I called Starwood again. After providing the required security information, I asked about availability at WKORV-N. The rep said nothing available for the unit type I was requesting for a Sat check-in. What!!! Just yesterday, there was "plenty of availability." Oh well, I thought, it was my fault for not making the reservation the previous day. I decided to hold off since I really wanted to try the new resort.

This morning, I called Starwood again. Voila, tons of availability at WKORV-N and WKORV in our unit type and check-in day. Didn't make the reservation, but called home to make sure we wanted the unit. Five minutes later I called Starwood back. No availability at WKORV-N for our requested unit type on our check-in day.

I thanked the rep, hung up, waited 30 seconds and called Starwood again. New rep, same security hurdles to get over. This rep tells me tons of availability at both WKORV-N and WKORV.

Unbelievable......

It's not amazing to me in the least when it comes to Starwood's actions in the myriad of issues being discussed in this thread. Get with it Starwood...I got three different answers within 10 minutes on an issue as simplistic as unit availability at a resort.

Reservation availability is not rocket science. Hey Starwood, how about getting an online reservation system. Stop making us get up when it's still dark on the West Coast just so we can get that most coveted "time stamp."

I'm tired of the seconds that tick by waiting on hold listening to the AMEX advertisements; I'm tired of inputting my phone number and then asking to giving my name, phone number, email address to get past security; I'm tired of getting incorrect information from vacation counselors.

On a separate note....

I shutter to think about how large of an increase I will see in Maintenance Fees when they are released later this year. Fees went up at one of the resorts we own by nearly 25 percent last year. The resort is only five years old. What's going to happen when Starwood resorts require major renovations?

This is the biggest issue I see facing Starwood owners. Yes, in my opinion, it's much larger than changes in elite benefits; or changing the requirements for 5* status.

I believe that MFs are not kept in check due primarily to the fact that the majority of HOA Board Of Director positions are held by Starwood employees. If owners filled these positions, I'm certain MFs would not rise as sharply.

Of course this is merely my opinion.....

Jerry

 

[LisaRex]

Jerry, I've only called the number a few times and each time the agent was very helpful. I don't believe the problem is with the agents but with the database, or spreadsheet, or whatever it is that they use. I think we all pine for a better system.

BTW, even though Starwood says they'll charge a fee for changing reservations, they don't usually this. So for future reference, I'd have booked the villa the first go-around in order to get the best timestamp. Then if I decided not to go that week, I'd call back to cancel and reserve another week. Some of these villas do go quickly and it's better to be safe than sorry.

 

[DavidnRobin]

I called just this morning (and for the last 2 Fridays) to reserve our WKORV and WPORV for next year w/o an issue. I got thru right away and the associates were friendly and knowledgable (and understood that it was early for me). I haven't had to enter my phone number in to get thru to an associate (nor press 1 for english...) for a while. I am calling the Elite line - so I do not know if that makes a difference. Total time is about 5 minutes - on at 6AM (w/o wait) and off by 6:05AM.

I do agree about the database entry system - I feel like I am in that episode in "Meet the Parents" when Ben Stiller's character is trying to board the airplane - certaining a lot of typing going on.

One new issue - is that they have changed their reservation confirmations (assume because it was getting caught in spam filters), and while I do not have a problem with that - the really strange thing is that for our WKORV Dlx OF units - the confirmation no longer states 'Deluxe'. I called and checked with them on this - mainly because I rented out the studio and my rental contract states 'Deluxe'. They told me not to worry and I will get my unit type, but... given the mistakes that they are prone to - how can I not worry?

Another small issue - is that only about 1 in 4 times do that ask me for my 'password' that I asked to be placed on my account.

 

[Lewis]

Our SVO experience has been great

We only own 1 timeshare (resale), but have used StarOptions several times to book reservations at WMH, WKORV, and our home resort, WKV. We also deposited the small side once, and got our same resort/season deposited to II.

I have always experienced great customer service, and can't think of a single glitch. We have also had excellent results with resort availability, although we do tend to travel in the shoulder seasons, and have not tried WSJ or Harborside.

In fact, on a few occasions, we have not been charged the $29 change fee when we could have been.

In some ways, I would welcome the idea of having an on-line booking system but I can't honestly say the current system has been a problem. And, I would hate to see an expensive computer system somehow result in MF increases.

Considering the resort quality, availability, and the customer service we've received, SVO has worked great for us.

 

[StarwoodCanadafan]

Hi.. Thread was asking for experiences with SVO Management..

.. not just experience booking resorts and general customer service.

Thanks though..

We only own 1 timeshare (resale), but have used StarOptions several times to book reservations at WMH, WKORV, and our home resort, WKV. We also deposited the small side once, and got our same resort/season deposited to II.

I have always experienced great customer service, and can't think of a single glitch. We have also had excellent results with resort availability, although we do tend to travel in the shoulder seasons, and have not tried WSJ or Harborside.

In fact, on a few occasions, we have not been charged the $29 change fee when we could have been.

In some ways, I would welcome the idea of having an on-line booking system but I can't honestly say the current system has been a problem. And, I would hate to see an expensive computer system somehow result in MF increases.

Considering the resort quality, availability, and the customer service we've received, SVO has worked great for us.

 

[StarwoodCanadafan]

In this economic environment...

Vacation Ownership would be the first to dry up, as people reduce their discretionary spending. I agree...

In this economy, doesn't make sense.

1. It would have to sell at same price as "new" units or otherwise compete against itself and never be able to sell at their developer price.

2. Increase inventory while reducing cash. Not good when sales are down.



Remember their customer base is the uninformed. They do not lose any customers unless resales are nominally less (say 15%) than their price. Ultimately, Starwood growth depends on expansion not reselling units in developed properties.

 

[ckg]

I've speculated that for a few months, based on two main things:

a) Sales are way below projections
b) There's a lack of new developments, which is the lifeblood of timeshares. Given that it takes 2-3 years to get a resort built, there's nothing to sustain SVO in the near and mid-term.

I could not agree more with this. I "own" at DVC and their location (an IMO flexibility) are their key assets. I have been looking at ideas for another non Disney timeshare I can reasonably trade and use and so have been looking at Starwood an Marriot. I see no new resorts at Starwood which stinks. Not much appeal in expansions (big whoop!). Also I think there offerings are essentially limited to US properties which as the kids get older will get boring.

I am surprised they do not do a ROFR like Disney to reduce secondary market sales. There really is very little incentive for those in the know to buy direct as far as I can see (really only SVN at some properties). That has gotta hurt their bottom line.

Wish they had more interesting locals than HI and a couple of Carribean locals.

 

[StarwoodCanadafan]

With this market, time share sales are going to suffer first..

.. which makes their decision to raise the bar without notice on the Plat ownership very very curious. Something else is going on...

I could not agree more with this. I "own" at DVC and their location (an IMO flexibility) are their key assets. I have been looking at ideas for another non Disney timeshare I can reasonably trade and use and so have been looking at Starwood an Marriot. I see no new resorts at Starwood which stinks. Not much appeal in expansions (big whoop!). Also I think there offerings are essentially limited to US properties which as the kids get older will get boring.

I am surprised they do not do a ROFR like Disney to reduce secondary market sales. There really is very little incentive for those in the know to buy direct as far as I can see (really only SVN at some properties). That has gotta hurt their bottom line.

Wish they had more interesting locals than HI and a couple of Carribean locals.

 

[SDKath]

I honestly don't think so. I think they legitimately saw a dilution of Platinum benefits (upgrades to suites) and when that imaginary 2000 cap got close (probably now), they decided to raise the bar to slow down the growth to Platinum, at least until more hotels can be built.

What they didn't anticipate I bet is this huge recession we just hit (although I don't know how anyone didn't see this coming). Their hotels are now going to be sitting empty, PFL upgrades will be more available again, and things will balance out. Except that they raised the SOs permanently -- stabbing their TS clients in the back big time.

But hey, at least their high flying business clients will still keep those hotels full. Oh wait, were those execs from AIG and Lehman and Merrill.

Kath

 

[BradC]

I think SDKath is right on the money -- as the cap got close, they wanted to make it just a little harder to reach. It's a lot like how the developer prices skyrocket when they're down to the last few remaining units for sale at a property.

 

[StarwoodCanadafan]

Hmm .interesting..

But, again, why no notice? It would have been fine had they not changed without notice and screwed the folks who were in process.

I think SDKath is right on the money -- as the cap got close, they wanted to make it just a little harder to reach. It's a lot like how the developer prices skyrocket when they're down to the last few remaining units for sale at a property.

 

[jarta]

But, again, why no notice? It would have been fine had they not changed without notice and screwed the folks who were in process.

There really is no "in process." Unless you have a signed, written option to purchase a timeshare for a set amount of time, you must have a signed, written purchase agreement. You have either signed a document or you haven't. You either have contract rights or you don't.

Until you have a purchaser's contract rights, what is actually included as part of the purchase can be changed by the seller.

Every time I have talked with a Starwood salesperson, they have urged me to buy that day. I never considered myself "in process" when I told them: "No, not today."

Having said that, I do feel your pain at making a decision on how and when to get to Five Star Elite that turned out to be flawed.

Several weeks ago I bought one even and one odd week at Lagunamar to get to Five Star Elite before the change. Since then, there have been reports that the prices at Lagunamar have dropped. So, did I "overpay?" In my mind, no! A deal is a deal. (And I won't complain about the windfall bargain received by those who waited a few weeks to buy at Lagunamar.)

 

[pointsjunkie]

There really is no "in process." Unless you have a signed, written option to purchase a timeshare for a set amount of time, you must have a signed, written purchase agreement. You have either signed a document or you haven't. You either have contract rights or you don't.

Until you have a purchaser's contract rights, what is actually included as part of the purchase can be changed by the seller.

Every time I have talked with a Starwood salesperson, they have urged me to buy that day. I never considered myself "in process" when I told them: "No, not today."

Having said that, I do feel your pain at making a decision on how and when to get to Five Star Elite that turned out to be flawed.

Several weeks ago I bought one even and one odd week at Lagunamar to get to Five Star Elite before the change. Since then, there have been reports that the prices at Lagunamar have dropped. So, did I "overpay?" In my mind, no! A deal is a deal. (And I won't complain about the windfall bargain received by those who waited a few weeks to buy at Lagunamar.)

congratulations,i hope you will be very happy as we are.

 

[Troopers]

But, again, why no notice? It would have been fine had they not changed without notice and screwed the folks who were in process.

I agree advance notice should or a grace period provided. My guess why they do not provide notice is 1. not required by law and 2. damage control (why "stir things up" and get the majority of owners who aren't affected a reason to question the change when this really impacts a small % of owners)

 

[oneohana]

I agree advance notice should or a grace period provided. My guess why they do not provide notice is 1. not required by law and 2. damage control (why "stir things up" and get the majority of owners who aren't affected a reason to question the change when this really impacts a small % of owners)

Many here are talking that *wood gave no advanced warning. I heard it had so have others. A few took them seroiusly and speeded up their process to get to 5*.
I know that I'll get flamed for this.

My last requal I was calling Starwood every week to make sure things were going ok. I had everything in writing, but after what they did to myip I was still worried. There were a few bumps, but they all got straightened out in the end.

 

[Troopers]

Many here are talking that *wood gave no advanced warning. I heard it had so have others. A few took them seroiusly and speeded up their process to get to 5*.
I know that I'll get flamed for this.

I had not heard that.

Duck when Tuggers fire away.

 

[LisaRex]

Many here are talking that *wood gave no advanced warning. I heard it had so have others. A few took them seroiusly and speeded up their process to get to 5*.
I know that I'll get flamed for this.

Not sure why you think you'll get flamed for speaking the truth. Others had not heard, nor had the salesmen they were working with, unless you're talking about the rumor that they were reaching the 2000 PFL cap soon. If it was another advanced warning that you're speaking about, then I'm know a few folks here would have sure appreciated a heads up.

 

[calgarygary]

If Starwood had given advance warning to some, then this is just another example of poor communication within the company and with their customers. A change in program is a powerful sales tool to move people off the fence about purchases. The fact that several have posted here that this information was not used tells me that not even the sales force had complete and accurate information about the changes and sales have been lost in both the short term but especially so in the long term.