The J.W. Marriott Phuket Wants Out Of Bonvoy, And They're Suing

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The J.W. Marriott Phuket Wants Out Of Bonvoy, And They're Suing.

The J.W. Marriott Phuket Wants Out Of Bonvoy, And They're Suing - View from the Wing

The J.W. Marriott Phuket, whose ownership group also has the St. Regis Bangkok, believes that Marriott is mismanaging their resort property. The hotel failed to reach budgeted goals between 2013 and 2018 and there hasn't been a budget agreed to since. Even before the pandemic they were doing...

viewfromthewing.com

Richard

 

[bazzap]

The J.W. Marriott Phuket Wants Out Of Bonvoy, And They're Suing.

The J.W. Marriott Phuket Wants Out Of Bonvoy, And They're Suing - View from the Wing

The J.W. Marriott Phuket, whose ownership group also has the St. Regis Bangkok, believes that Marriott is mismanaging their resort property. The hotel failed to reach budgeted goals between 2013 and 2018 and there hasn't been a budget agreed to since. Even before the pandemic they were doing...

viewfromthewing.com

Richard

The author of this article and viewfromthewing have provided inaccurate and misleading information here.
Marriott International are the management company for this resort, using their JW Marriott brand.
The JW Marriott Phuket does not want out of Bonvoy.
The Minor Group are the owners of this resort and they do have an ongoing lawsuit with Marriott over reduced revenues.
This is completely different though to headlining that JW Marriott wants out of Bonvoy, which is wrong and a crazy thing to publish.
(It should be noted that many of Phuket’s high-end hotels have suffered a similar revenue fall due to increased competition, competitive pressures pushing room rates down and, especially over the past 12 months, a shift in tourist demographics.)

 

[n777lt]

I'm confused. The article includes the following AS A QUOTE, not their words (I've bolded the final sentence):
"According to Minor, Marriott unilaterally sets the rate it pays to the hotel for stays booked through Bonvoy. “Following the merger of the Marriott and Starwood loyalty programs in 2018, we were informed by Marriott that the base redemption rate for the JW Marriott Phuket would decrease from approximately $120 per night to $47 per night,” said Dillip Rajakarier, group CEO of Minor International and CEO of Minor Hotels Group.

“In effect, Marriott was requiring us to sell rooms at a below-market rate. This business [Bonvoy] is some of our lowest-margin business, yet we are forced to honor these redemptions — which hurts our profitability. We requested to cease participating in the program, which we consider to have an overall net negative effect on our hotel, and Marriott refused to consider this.”

Looks like departure has been sought as a solution to the revenues dispute, so the headline, while misleading if Bexit (sorry!) isn't part of the formal legal claim for relief, isn't wrong: they want out, AND they have a lawsuit pending.

 

[bogey21]

"Cease participating" or "Want's out" seem pretty close to the same thing to me but then English was never my best subject in school...

George

 

[bazzap]

I believe any confusion may relate to who said what, rather than just what was said.
Although it may not read like this, I am fairly sure the article refers to what the Minor Group said, as the hotel owners.
I am not aware of the JW Marriott as the hotel management company having said anything.
The only statement definitely made by Marriott International is this one published in the Thai media

”Marriott International acknowledges that a subsidiary of Minor International has initiated legal action in Thailand against Marriott and one of its Thai subsidiaries. Marriott reiterates that such claim is meritless and should be heard in confidential arbitration.

Our Thai subsidiary recently secured an interim injunction in arbitral proceedings restraining MINT’s subsidiary from pursuing the action in Thailand. We subsequently agreed with MINT to suspend the Thai proceedings pending the final outcome of our ongoing arbitration. As we intend to comply with our contractual confidentiality obligations, we are unable to provide more information at this time.

We consider JW Marriott Phuket Resort & Spa has performed well compared to the market. The dispute will have no impact on operations at the hotel, which continues to offer guests with world-class service and accommodations, a beachfront location and eleven culinary options.”

Minor International battles Marriott over popular Phuket hotel property in court | The Thaiger

Marriott International, the American international hotel company, has failed in its bid to secure an injunction in a Thai court

thethaiger.com

 

[kds4]

To enter litigation/arbitration to exit the Bonvoy program altogether means they are either ignorant of (or find inadequate the ability to) utilize several program management tools available to them that could mitigate the financial impact of the reduced compensation they receive from Marriott for room nights occupied on points reservations.

For example (from the program terms re: No Blackout Date Policy): i. Participating Properties from the following Brands may cap the number of standard rooms available for redemption on a limited number of days: The Ritz-Carlton®, EDITION®, JW Marriott®, Marriott Hotels®, Delta Hotels®, Autograph Collection® Hotels, Renaissance® Hotels, Gaylord Hotels®, Courtyard®, SpringHill Suites®, Protea Hotels®, Fairfield by Marriott®, AC Hotels®, Moxy® Hotels, Residence Inn®, TownePlace Suites®. - So, properties participating in the 'No Blackout Date Policy' have wiggle-room to limit when rooms can be reserved on points. Not sure how low the cap can be set at (1 points room per day?) and/or how many days of the year it can be imposed (364?) This ability to limit rooms for points reservations enables them to keep more rooms free for cash stays.

An even more restrictive step the J.W. Marriott Phuket could take would be to join other properties who already chose to 'opt-out' of the 'No Blackout Date Policy' altogether:

iii. The following Participating Properties or Brands either do not participate in or do not fully participate in the No Blackout Dates benefit at this time:

• Boscolo Exedra Nice, Autograph Collection
• The Dedica Anthology, Autograph Collection
• JW Marriott Scottsdale Camelback Inn® Resort & Spa, Scottsdale, AZ
• Marriott Vacation Club and Marriott Grand Residence Club – all properties
• Participating Vistana properties
• Rome Marriott Grand Hotel Flora, Rome, Italy
• Waikoloa Beach Marriott Resort & Spa, Hawaii
• Wailea Beach Resort – Marriott – Maui, Hawaii

Seems to me they have taken the 'nuclear option' by trying to exit Bonvoy altogether. Is it still a Marriott if it gives no benefits? As a traveler, talk about getting the 'Big Bonvoy'... Ouch.

 

[bizaro86]

To enter litigation/arbitration to exit the Bonvoy program altogether means they are either ignorant of (or find inadequate the ability to) utilize several program management tools available to them that could mitigate the financial impact of the reduced compensation they receive from Marriott for room nights occupied on points reservations.

For example (from the program terms re: No Blackout Date Policy): i. Participating Properties from the following Brands may cap the number of standard rooms available for redemption on a limited number of days: The Ritz-Carlton®, EDITION®, JW Marriott®, Marriott Hotels®, Delta Hotels®, Autograph Collection® Hotels, Renaissance® Hotels, Gaylord Hotels®, Courtyard®, SpringHill Suites®, Protea Hotels®, Fairfield by Marriott®, AC Hotels®, Moxy® Hotels, Residence Inn®, TownePlace Suites®. - So, properties participating in the 'No Blackout Date Policy' have wiggle-room to limit when rooms can be reserved on points. Not sure how low the cap can be set at (1 points room per day?) and/or how many days of the year it can be imposed (364?) This ability to limit rooms for points reservations enables them to keep more rooms free for cash stays.

An even more restrictive step the J.W. Marriott Phuket could take would be to join other properties who already chose to 'opt-out' of the 'No Blackout Date Policy' altogether:

Seems to me they have taken the 'nuclear option' by trying to exit Bonvoy altogether. Is it still a Marriott if it gives no benefits? As a traveler, talk about getting the 'Big Bonvoy'... Ouch.

I suspect something like more limits ends up being the solution here. Minor group doesn't manage the hotel, Marriott does, so the people deciding how many rooms to release for points reservations are the people getting sued.

 

[Dean]

To enter litigation/arbitration to exit the Bonvoy program altogether means they are either ignorant of (or find inadequate the ability to) utilize several program management tools available to them that could mitigate the financial impact of the reduced compensation they receive from Marriott for room nights occupied on points reservations.

For example (from the program terms re: No Blackout Date Policy): i. Participating Properties from the following Brands may cap the number of standard rooms available for redemption on a limited number of days: The Ritz-Carlton®, EDITION®, JW Marriott®, Marriott Hotels®, Delta Hotels®, Autograph Collection® Hotels, Renaissance® Hotels, Gaylord Hotels®, Courtyard®, SpringHill Suites®, Protea Hotels®, Fairfield by Marriott®, AC Hotels®, Moxy® Hotels, Residence Inn®, TownePlace Suites®. - So, properties participating in the 'No Blackout Date Policy' have wiggle-room to limit when rooms can be reserved on points. Not sure how low the cap can be set at (1 points room per day?) and/or how many days of the year it can be imposed (364?) This ability to limit rooms for points reservations enables them to keep more rooms free for cash stays.

An even more restrictive step the J.W. Marriott Phuket could take would be to join other properties who already chose to 'opt-out' of the 'No Blackout Date Policy' altogether:

Seems to me they have taken the 'nuclear option' by trying to exit Bonvoy altogether. Is it still a Marriott if it gives no benefits? As a traveler, talk about getting the 'Big Bonvoy'... Ouch.

And will the owners or Marriott renew their affiliation one the term expires? My guess is this location is headed to not being a Marriott at all if they don't resolve the issue within the limits of the program.

 

[bazzap]

And will the owners or Marriott renew their affiliation one the term expires? My guess is this location is headed to not being a Marriott at all if they don't resolve the issue within the limits of the program.

Marriott have increased their hotel portfolio in Phuket, especially following the Starwood acquisition.
The JW Marriott Phuket Resort & Spa continues to be one of their most prestigious locations in South East Asia though, so I would be amazed if Marriott doesn’t do whatever it needs to for it to continue as such.

 

[Dean]

Marriott have increased their hotel portfolio in Phuket, especially following the Starwood acquisition.
The JW Marriott Phuket Resort & Spa continues to be one of their most prestigious locations in South East Asia though, so I would be amazed if Marriott doesn’t do whatever it needs to for it to continue as such.

But my point was that if they put themselves out on an island and exit the system when that isn't currently an option, would they continue to be a Marriott property. While the property owners and Marriott have a benefit to continuing the relationship, I'd be very surprise if they did long term in the situation described. And I wouldn't be surprised if this action gives Marriott the option to void the management contract early.

 

[bazzap]

But my point was that if they put themselves out on an island and exit the system when that isn't currently an option, would they continue to be a Marriott property. While the property owners and Marriott have a benefit to continuing the relationship, I'd be very surprise if they did long term in the situation described. And I wouldn't be surprised if this action gives Marriott the option to void the management contract early.

I understand that and if that were the case you may well be right.
My point though is that I believe that the whole basis of the original article is incorrect.
The issue here is an external one between the Minor Group and JW Marriott/Marriott International, not an internal one between JW Marriott and Marriott International.

 

[Dean]

I understand that and if that were the case you may well be right.
My point though is that I believe that the whole basis of the original article is incorrect.
The issue here is an external one between the Minor Group and JW Marriott/Marriott International, not an internal one between JW Marriott and Marriott International.

Obviously none of us know enough about this to predict the outcome. My point was an if, then. I've seen too many times over the years where people said a given property was too important to be affected. Whether it was Spicebush/Swallow tail being cut lose, Vail being split or BPT/AOC being issued an ultimatum (MVC); I don't believe any single or small group of properties is important enough to see Marriott cave though often there is room for reasonable compromise. I don't see anything here that suggests this is between the JW system and M itself but rather the group and hotel in question and M Intl. which increases the risk of this actually happening IMO. Now it may be that Marriott Intl will compromise and maybe adjust the revenue though they'd likely have to do so system wide if they did. The numbers quoted for reimbursement is quite a change and I can understand them being concerned if those are indeed accurate. Now if a load of others sign on it could affect the outcome if there's enough solidarity.

 

[bazzap]

Obviously none of us know enough about this to predict the outcome. My point was an if, then. I've seen too many times over the years where people said a given property was too important to be affected. Whether it was Spicebush/Swallow tail being cut lose, Vail being split or BPT/AOC being issued an ultimatum (MVC); I don't believe any single or small group of properties is important enough to see Marriott cave though often there is room for reasonable compromise. I don't see anything here that suggests this is between the JW system and M itself but rather the group and hotel in question and M Intl. which increases the risk of this actually happening IMO. Now it may be that Marriott Intl will compromise and maybe adjust the revenue though they'd likely have to do so system wide if they did. The numbers quoted for reimbursement is quite a change and I can understand them being concerned if those are indeed accurate. Now if a load of others sign on it could affect the outcome if there's enough solidarity.

I agree that noone really knows for sure what will happen.
The only reason I comment at all and am fairly confident in what I say is that I am in regular contact with the resort management and I know that some of the points made in the original article are wrong so I thought it might be helpful to mention this.

 

[Dean]

I agree that noone really knows for sure what will happen.
The only reason I comment at all and am fairly confident in what I say is that I am in regular contact with the resort management and I know that some of the points made in the original article are wrong so I thought it might be helpful to mention this.

Thanks for your info, the additional inside information is always welcome and helpful.

 

[Ann in CA]

With the Marriott Vacation Club on either side of the hotel grounds, that would be rather awkward! We loved our week there in the villas, and the grounds and hotel facilities were a big part of enjoying our stay on that spectacular beach. Can't imaging breaking them up. The villa owners bring lots of business to the hotel as well, but they likely assume they would still get out walking business even if they can leave Marriott management. Top of our list to go back.

 

[bazzap]

With the Marriott Vacation Club on either side of the hotel grounds, that would be rather awkward! We loved our week there in the villas, and the grounds and hotel facilities were a big part of enjoying our stay on that spectacular beach. Can't imaging breaking them up. The villa owners bring lots of business to the hotel as well, but they likely assume they would still get out walking business even if they can leave Marriott management. Top of our list to go back.

It would be awkward, but manageable as we had a similar issue at Club Son Antem when a new management company took over the running of the hotel (also surrounded by the MVC villas) from Marriott.
This did have both operational and financial implications though, so hopefully there will be no change in Phuket.