This is an interesting move by MVW, "Marriott Vacations Worldwide Appoints Christian Alejandro Asmar to Board of Directors"

[pedro47]

To billymach4, your last paragraph is right on point and I totally agree with your opinion the current demographic population are a totally different breed. IMOP.

 

[jp10558]

Gen X and millennials are likely smart enough to avoid purchasing direct sales (Yes I know there are plenty of examples to the contrary I am speaking in broad terms).

I think this is misplaced hope. I am an Elder Millennial so strattle those generations. I really really hoped growing up that we'd be tech savvy. I know that was the zeitgeist in the 90s. It just didn't happen - there are the techies from every generation (I worked with some boomers who were running minicomputers etc in the late 60s and doing legacy VMS stuff through 2016 before the retired) but there's just a much larger cohort of "just like every other generation". The "Gen Z" "Digital Natives" didn't end up with much but even lesser ability to read and type from what I can tell. Plenty of younger people can be brought into buying direct. I only was saved because I have a freeze on my credit and can't unfreeze from my phone - then during cooldown I remembered there was resale.

My overall opinion is that MVC is having a hard time selling to this current demographic due to the proliferation of Social Media info

I think Social Media info is so all over the place on any topic that I feel (just like always) younger people can find a group to reinforce whatever they want to believe. It's also more customized and fragmented, so outside of TUG, I never see anyone even talk about timeshares, forget about resale or truth. It's real easy to be on reddit and never see the timeshare section, facebook and never see a TS group, etc.

and the bad reputation of timeshare ownership. There are plenty of news stories regarding the pitfalls of Timeshare scams and abuse all over the news, talk shows and social media.

This is very true, but it's also the case that the sales people know how to frame it as "not a timeshare" or "those news stories are about 'old' timeshares" or something. And of course given the fragmentation of social media - I think there's basically 2 groups out there. The credulous who believe the tiktok conspiracy theories about giza pyramids being power plants and the earth being flat - i.e. they'll believe anything they stumble on if presented by a good "sales person". These people will buy retail at high interest rate loans. They just don't have functioning epistemology or can be made to "want to believe" by good sales people. Then there's the "I don't trust anything on social media" cynic who's going to discount all that quite a bit. These are the people who in the past would have noticed the Gell-Mann Amnesia Effect. These are the people who would either take a pass cause they don't care, or would probably find TUG doing a little research.

To billymach4, your last paragraph is right on point and I totally agree with your opinion the current demographic population are a totally different breed. IMOP.

They're a different breed, but I don't think they're broadly less susceptible to TS sales (or any sales) techniques, just need current ones. TBH, I still maintain that there's a finite amount of people who TS make sense for, and way less at retail prices. And as the population both shrinks and becomes more bimodal between the top IDK 8% or so and the rest of the market for earnings, additional shrinkage in people who could possibly afford TSs. Which will shrink that market even more.

This is where I am speculating T&L and HGV are doing better, moving that potential to afford down the curve more than MVC is doing. But they're all going to have an issue unless they work out a way to reduce costs and bring down MFs and buy in, or we have a major reversal in economic or demographic trends somewhat suddenly.

 

[tamu_bu]

My overall opinion is that MVC is having a hard time selling to this current demographic due to the proliferation of Social Media info and the bad reputation of timeshare ownership. There are plenty of news stories regarding the pitfalls of Timeshare scams and abuse all over the news, talk shows and social media

I also think there is a generational fall off. The young folks are more "plan in the moment" types. Long range planning is a hassle. If you have kids or grands around, notice that when they make plans those plans are set in sand. Notice how often those "plans" change or fall apart within hours or minutes of the planned even. The immediacy and omnipresence of communication has changed how they/we interact with the world.

I also equate it to how the internet has changed purchasing. How many people click amazon because of the convenience? I saved $150 recently on a purchase that was available on Azon but I found online at home depot. Most people don't bother and just click Azon. The tech generations default to Air B&B for now until the next new thing comes along. Compare the convenience of renting an Air B&B to the labyrinth of timeshare rules and the commitment involved. Not a pretty comparison.

 

[billymach4]

I also think there is a generational fall off. The young folks are more "plan in the moment" types. Long range planning is a hassle. If you have kids or grands around, notice that when they make plans those plans are set in sand. Notice how often those "plans" change or fall apart within hours or minutes of the planned even. The immediacy and omnipresence of communication has changed how they/we interact with the world.

I also equate it to how the internet has changed purchasing. How many people click amazon because of the convenience? I saved $150 recently on a purchase that was available on Azon but I found online at home depot. The tech generations default to Air B&B for now until the next new thing comes along. Compare the convenience of renting an Air B&B to the labyrinth of timeshare rules and the commitment involved. Not a pretty comparison.

You absolutely nailed it. It's impossible for me to plan a TS vacation with my DS his wife and 3 grandkids. He is well aware of my TS and II account. He used a few Getaways
To Orlando years ago after #1 grandkid was born.

He will not be a TS owner. I will not force my ownership on him in my estate either. My plan is to divest myself of TS when the time comes.

 

[ljmiii]

Compare the convenience of renting an Air B&B to the labyrinth of timeshare rules and the commitment involved. Not a pretty comparison.

I do (or at least did) until I found that making an Air B&B reservation means less than nothing. Not a pretty comparison indeed.

After my second in a row Air B&B reservation was cancelled at the last minute and Air B&B simply didn’t care, I realized that I wasn’t the customer - the people who pay Air B&B to rent out their homes or apartments are. As a renter I was just an annoyance who expected a refund.

 

[Superchief]

The bulk of MF are determined by each resort board. From what everyone here states is that as the budget increases the management fee will in turn increase. What I am saying is that MVC does not directly increase MF's, however MVC benefits in the overall Management fee as the budget increases over time. In other words MVC would have a hard time justifying an across the board increase in their management fee.

MVC management also causes increases to MF's by initiating new brand standards that each resort has to pay for. They also never hold themselves accountable for poor decisions that add to resort costs. As an owner at Ocean Pointe, I don't think the owners should have paid for the roof repairs that were due to inferior construction. MVC was responsible for managing the construction and therefore should have paid those costs.

 

[dioxide45]

The bulk of MF are determined by each resort board. From what everyone here states is that as the budget increases the management fee will in turn increase. What I am saying is that MVC does not directly increase MF's, however MVC benefits in the overall Management fee as the budget increases over time. In other words MVC would have a hard time justifying an across the board increase in their management fee.

There are ton's of dirt cheap resales in weeks and points flooding the market. The flood of resale availability is most likely having a drag on new points sales. It almost feels like 2008 - 2010 when MVC had to reinvent their sales model to Points and severely limit new development in properties.

As far as attrition? Please define that further. What metric are you looking for with respect to attrition?

Why are so many resales on the market. For one the older Boomer Generation from 1945 to 1960 is age 80 - 65. Certainly the 70ish and 80 yr old set is aging out. Dying or having health issues affecting their travel lifestyle. The 65yr to 80yr set is not likely to buy new into MVC. The younger Boomers post 1960 - 64 are likely more tech savvy and have heard about resale.

Gen X and millennials are likely smart enough to avoid purchasing direct sales (Yes I know there are plenty of examples to the contrary I am speaking in broad terms).

My overall opinion is that MVC is having a hard time selling to this current demographic due to the proliferation of Social Media info and the bad reputation of timeshare ownership. There are plenty of news stories regarding the pitfalls of Timeshare scams and abuse all over the news, talk shows and social media.

The annual maintenance fees are proposed by Marriott. The board then reviews and approves them. Some boards may make adjustments and some may just rubber stamp.

 

[billymach4]

The annual maintenance fees are proposed by Marriott. The board then reviews and approves them. Some boards may make adjustments and some may just rubber stamp.

Thanks for the clarification. However my question/point is that MVC profits from the Management fee. The management few is a percentage of the overall Budget? Yes/No? So MVC will gain revenue/profit from the annual increasing budget? Unless of course MVC unilaterally increases their fee? So what is their fee. I recall reading something like 10% of the annual budget?

 

[billymach4]

MVC management also causes increases to MF's by initiating new brand standards that each resort has to pay for. They also never hold themselves accountable for poor decisions that add to resort costs. As an owner at Ocean Pointe, I don't think the owners should have paid for the roof repairs that were due to inferior construction. MVC was responsible for managing the construction and therefore should have paid those costs.

While I wholeheartedly agree with your argument.... the construction of Kingfish was over 20 yrs ago. The only individuals that would benefit from this would be the litigation attorneys on both side of the complaint. Marriott would never lay down and agree to assume responsibility for the $1 million roof repair. I think we should be happy that MVC waived the management fee for that particular repair project.

 

[Superchief]

Thanks for the clarification. However my question/point is that MVC profits from the Management fee. The management few is a percentage of the overall Budget? Yes/No? So MVC will gain revenue/profit from the annual increasing budget? Unless of course MVC unilaterally increases their fee? So what is their fee. I recall reading something like 10% of the annual budget?

Can MVC actually increase the % management fee? This is what it has been for all of the years I've owned, so I thought it was a contractual commitment. If they increased their %, I would get rid of all of my MVC resorts.

 

[billymach4]

Can MVC actually increase the % management fee? This is what it has been for all of the years I've owned, so I thought it was a contractual commitment. If they increased their %, I would get rid of all of my MVC resorts.

Well I am asking the same question. Don't want to over speculate. However that seems to be the question Du Jour here.

I would think if they really wanted to show some profit gain then I would say the answer is yes. However as you mentioned more people like yourself and possibly others would consider a quick exit. That in turn would lead to more delinquencies. Thus this cycle would lead to more profit loss.

We are just making wild predictions. So I think the answer is somewhere in the middle. That is to say nickel and dime erosion of amenities, perks, benefits. Maint fees will continue to rise as the years pass. We shall see. Time marches on.

 

[mountainboy]

They've acquired more shares.

Marriott Vacations Worldwide (VAC) Stock Price, News & Analysis

Should You Buy or Sell Marriott Vacations Worldwide Stock? Get The Latest VAC Stock Analysis, Price Target, Dividend Info, Headlines, and Short Interest at MarketBeat.

www.marketbeat.com

Per Barrons, Impactive now owns 11.7% of Marriott Vacations with > 4MM shares, a >2% bump in ownership a month...

 

[dioxide45]

Can MVC actually increase the % management fee? This is what it has been for all of the years I've owned, so I thought it was a contractual commitment. If they increased their %, I would get rid of all of my MVC resorts.

Based on another thread here, they are increasing the fee at Kaua’i Beach Club. Perhaps the management agreement was up for renewal.

 

[TST]

I would appreciate a cross-check, but what I can discern from piecing together data from various properties and the MVC Trust documents, it looks like the developer (MORI, which is a subsidiary of MVW) is carrying approximately 50% of the MVC Trust's inventory in addition to whatever they have in the build pipeline, as well as VOI's they hold but have not conveyed to the MVC Trust. This helps me understand the abysmal Q1 cash flow. I am waiting for Q2 cash flow report with bated breath. Does anyone have any additional insight from their specific property? I am particularly interested in bad debt statistics.

 

[bazzap]

Thanks for the clarification. However my question/point is that MVC profits from the Management fee. The management few is a percentage of the overall Budget? Yes/No? So MVC will gain revenue/profit from the annual increasing budget? Unless of course MVC unilaterally increases their fee? So what is their fee. I recall reading something like 10% of the annual budget?

Outside of the US MVC fees have always been higher.
In Europe and Asia, they are 15%


Sent from my iPad using Tapatalk

 

[pedro47]

Outside of the US MVC fees have always been higher.
In Europe and Asia, they are 15%


Sent from my iPad using Tapatalk

Are the resorts in Europe and Asia maintain better and that includes daliy housekeeping services?

 

[dioxide45]

I would appreciate a cross-check, but what I can discern from piecing together data from various properties and the MVC Trust documents, it looks like the developer (MORI, which is a subsidiary of MVW) is carrying approximately 50% of the MVC Trust's inventory in addition to whatever they have in the build pipeline, as well as VOI's they hold but have not conveyed to the MVC Trust. This helps me understand the abysmal Q1 cash flow. I am waiting for Q2 cash flow report with bated breath. Does anyone have any additional insight from their specific property? I am particularly interested in bad debt statistics.

There is no way that VAC is sitting on 50% of unsold trust inventory. Realize that their unsold inventory numbers also include Hyatt and Welk.

 

[bazzap]

Are the resorts in Europe and Asia maintain better and that includes daliy housekeeping services?

In Europe, there is a simple daily tidy service, normally in and out in around 5 minutes (as attached) and a mid week clean.
In Asia there is a full daily service.

Sent from my iPad using Tapatalk

 

[pedro47]

In Europe, there is a simple daily tidy service, normally in and out in around 5 minutes (as attached) and a mid week clean.
In Asia there is a full daily service.

View attachment 112555


Sent from my iPad using Tapatalk

Thanks bazzap, for posting The Daily Tidy Service for Europe and Asia.

 

[TST]

There is no way that VAC is sitting on 50% of unsold trust inventory. Realize that their unsold inventory numbers also include Hyatt and Welk.

Thanks. I found other flaws in my methodology as well. The amount of Trust inventory they have to sell remains a mystery, but I have set up a few trackers that will at least give me trend in terms of increasing or decreasing with respect to already built properties.

 

[jp10558]

I also think there is a generational fall off. The young folks are more "plan in the moment" types. Long range planning is a hassle. If you have kids or grands around, notice that when they make plans those plans are set in sand. Notice how often those "plans" change or fall apart within hours or minutes of the planned even. The immediacy and omnipresence of communication has changed how they/we interact with the world.

Is this broadly true though? I know people who are older than I am who always had plans set in sand as you say - half the time as we were in the car on the way to some event it still wasn't even 90% sure we'd do the even (I'm going to allow anyone the horrible possibility of some accident on the way or other emergency or just the restaurant not having space or screwed up the reservation or whatever)... We often joked we weren't sure we were actually doing the thing in the moment we were doing with these family members etc. Some of my same age relatives have become basically this bad since getting married and having kids. This I don't believe is a matter of planning, just that the wife doesn't want to hang out with our family and my relative doesn't have the bandwidth to force it much - so I basically have to kinda show up at their house to see the kids and my cousin.

I could believe that age independent it's broadly true that people plan less than they used to because they don't really have to as much. That said, I also think that many people are more successful in getting whatever done if they plan. I guess it's just a skill that I think most people could develop if they cared to do so. The technology is also there to enable it more than ever with widely cheap or free availability of shared calendars and other scheduling assistance tools along with the communication and collaboration tools (like online spreadsheets of "places to go" and the like.

I also equate it to how the internet has changed purchasing. How many people click amazon because of the convenience? I saved $150 recently on a purchase that was available on Azon but I found online at home depot. Most people don't bother and just click Azon.

Yes, not all people care to do the work to comparison shop. If you don't do so, you just at least implicitly accept that can cost you money. Is it worth paying more for convenience? Broadly I think many people think that it is.

The tech generations default to Air B&B for now until the next new thing comes along. Compare the convenience of renting an Air B&B to the labyrinth of timeshare rules and the commitment involved. Not a pretty comparison.

The old "quick, cheap, good - pick any 2" still applies. At least for me, the TS benefits are the cheap + good, but they're not quick/easy. I "pay for it in time", though TBH, I find that longer trips are still easier for me to plan way out because of plane ticket costs plus parking last minute plus fitting it into my schedule. AirB&B just tends to cost more, but that cost pays for the convenience.

 

[jp10558]

I do (or at least did) until I found that making an Air B&B reservation means less than nothing. Not a pretty comparison indeed.

After my second in a row Air B&B reservation was cancelled at the last minute and Air B&B simply didn’t care, I realized that I wasn’t the customer - the people who pay Air B&B to rent out their homes or apartments are. As a renter I was just an annoyance who expected a refund.

I don't know how common it is, but in what seems like A LOT of travelling, I've never - not ONCE - had a hotel or TS cancel a reservation on me. I think people forget that AirB&B is basically eBay or Redweek rentals - they're just a middleman, and you are taking on the risk of if the person renting it to you is legit.

And the few times I've heard of a hotel having to cancel, they tend to make alternate arrangements for the customer (I suppose absent something like a hurricane wiping out entire cities).

 

[dioxide45]

I think we forget that people's travel patterns also change over time. WHen I was younger, we traveled differently than now that I am nearing 50. Younger people today may travel differntly than those that are older, but that doesn't mean those younger people will do the same later in life. They will likely travel similar to people in the older generation today.

Has Airbnb and others like it changed things? Sure, but it isn't like there weren't whole home rentals available in the past. Just that the reach might have been different. ARDA claims that about 50% of new sales are going to Millennials and below. That is probably true, but that metric might not have really changed all that much over the years. Much of that metric is also probably in the older Millennial generation which is the same age range that timeshares were targeting in the 80s, 90s and early 2000s.

 

[jp10558]

I think we forget that people's travel patterns also change over time.

100%. I haven't been willing to camp / sleep on the ground in a tent since I was 16 I think. I haven't been very willing to sleep in a below Hampton Inn hotel since I was 27.

Has Airbnb and others like it changed things? Sure, but it isn't like there weren't whole home rentals available in the past. Just that the reach might have been different.

I will say, the "whole home rentals" outside of the AirB&B and competitors that I'm aware of do tend to be quite LARGE homes, that tend to cost quite a lot if you're not splitting it across multiple people. I think the last one I heard about was ~$12,000 for a week, but they split it 8 ways for all the bedrooms IIRC. I think the reach is much greater now for smaller 1-3 bedroom houses, as well as for less than 1 week increments with the newer platforms.

ARDA claims that about 50% of new sales are going to Millennials and below. That is probably true, but that metric might not have really changed all that much over the years. Much of that metric is also probably in the older Millennial generation which is the same age range that timeshares were targeting in the 80s, 90s and early 2000s.

I think 40s is probably the sweet spot for developer sales. I think there's few people who even want to consider a $25k or more TS purchase in their 20s - if they had that lying around (very few do), they'd probably put it towards buying a house. Even financed, I don't think in my 20s I'd have felt very comfortable doing that, not to mention just being way less established in life so I had no idea what my yearly vacation might be like or if I'd get time off from "unknown job" at all.

What age do "many people" kinda know what their job will be like, what time off they'd get, and would see financing $25k as potentially reasonable, with a smaller group having that as spare cash? Probably 40s. These are also the people who likely have kids and see how much more complicated it might be to take them in hotels, or in 2 days here, 2 days there, 4 days here sort of road trips etc. I can see the appeal of travel somewhere, stay a week, travel home. Hell, even without kids just the medical stuff (CPAP) and hobby stuff (photography) makes me less interested in the "backpack" style of go see all relatives in Finland in 9 days with a day in Estonia for fun. It's a lot harder to do the more stuff you have to wrangle. I think this is why resort stays and cruises become more popular. And especially at locations with stuff to entertain your kids if you have them.

 

[Superchief]

When we bought most of our timeshares, it was when many people were buying second homes in vacation destinations. We thought timeshares would be a good alternative and we didn't have to worry about our investment being ruined by natural disasters. The cost of a timeshare was much lower than investing in second homes/ condos. I don't think this is the case any more because the cost of housing has increased so much that most young people don't have the discretionary money to spend. Many young people with money prefer to travel more spontaneously to more exotic destinations.