Timber Lodge Presentation

[Latravel]

I went today to a sales presentation at Timber Lodge and I felt like I was in the twillight zone. I'm still at a loss for words. My goal for spending 90 min of my time was to find out about upgrading my 2bd platinum ski week for a 2bd platinum plus ski week. I was also interested in the 3bd platinum ski units.

Well, it appears things are doing just fine in Tahoe. Prices have never been lowered and they are not offering any special pricing. They would not upgrade my current unit They offered a new 2bd unit for $65,000. The 3bd was in the range of $129,000. I told them I didn't think people would buy at such expensive prices in this economy and the manager told me, IN FACT, they just sold 4 units today alone.

My closing statements to the sales team was that I was open to purchasing something but they offered me nothing. No incentives, no special pricing, nothing. They told me they didn't have to since things were selling.

Other interesting points:
Marriott is going to implement a program which limits priviledges to resale owners. I told her I think they would grandfather in current resale owners and both the sales person and manager said, no. I told them Marriott could not interfere with a resale owners use of their unit and I was told that "resale owners would have a much harder time getting the weeks they want."

They said very few words about the upcoming points program. The manager did say owners could opt to join the points program or not.

When I told them I was worried about how Marriott was doing in this economy, the manager said that they are doing fine. They are closing unnecessary sales offices. They are cutting back on employee parties. They don't own their hotels so they have little debt. The company is taking the necessary measures in this economy but they are handling the current climate.

About the devaluation of points, they said the change in the program was in response to customer feedback. Customers didn't want 7 nights in one hotel, they wanted 5. Customers didn't want any blackout time periods so they got rid of that restriction. Also, customers didn't want the stay anytime double point requirement so now all stays are the same points requirement.

The resort was filled to capacity and every time slot was booked for presentations. I'm not sure what is going on but they didn't try to get my business. Amazing isn't it?

 

[ecwinch]

Did you mention to them the 2BR summer week that just went on e-bay for $5200?

And I bet within 30 days you get a call offering incentives.....

 

[davidvel]

I went today to a sales presentation at Timber Lodge and I felt like I was in the twillight zone. . . .

Well, it appears things are doing just fine in Tahoe. Prices have never been lowered and they are not offering any special pricing. . . . They offered a new 2bd unit for $65,000. The 3bd was in the range of $129,000. I told them I didn't think people would buy at such expensive prices in this economy and the manager told me, IN FACT, they just sold 4 units today alone.
. . .
Other interesting points:
Marriott is going to implement a program which limits priviledges to resale owners. I told her I think they would grandfather in current resale owners and both the sales person and manager said, no. I told them Marriott could not interfere with a resale owners use of their unit and I was told that "resale owners would have a much harder time getting the weeks they want."
. . .
When I told them I was worried about how Marriott was doing in this economy, the manager said that they are doing fine.

Obviously these salespeople don't own Marriott stock:

Well at least the humbolt ganga is still freely smoked in South Lake Tahoe. (Maybe the salespeople all have a same medical condition allowing them to smoke medical marijuana under California law...)

I would love to know the names of the sales person and manager that claim that Marriott will restrict reale owner's deeded rights.

 

[DeniseM]

Things are extremely slow up in Tahoe. This week's snow should help temporarily, but in the long run, I can't imagine what Marriott is thinking. Especially since right across the street from the Marriott there is a HUGE development that covers most of the block on which construction came to a halt a year ago. You just can't believe sales people. Buy resale!

 

[ecwinch]

I wonder what rights we have that they could restrict? Would'nt be wild if they figured out way to exclude resale owners from the Marriott only window on II?

Thats the only benefit I get from MVCI. And I bought thru Marriott Resale. What does that make me?

 

[Latravel]

Now that's an interesting point. They couldn't really talk much about any restrictions other than resale owners would have a harder time getting the weeks they want. That restriction would fit what they said but this is complete speculation.

They did imply any restriction would happen sooner rather than later. The points program probably wouldn't happen until 2010 since they don't have any details of the program.

 

[potchak]

Salesmen are always going to say that Marriott is going to restrict resale owners and this is to scare you into purchasing from them.

 

[kjd]

Tahoe a special case?

Tahoe might be a little different situation than a lot of other Marriott locations. I was there in September and did tour a three bedroom. It's not as nice as other Marriott three bedrooms. I received about the same story from the sales rep but did get an incentive offer. (It wasn't very generous.) I also asked about trading one of my MGC units but there was no interest. However, I did learn some things about Tahoe that made it a somewhat different situation in addition to the 10,000 points received for the tour.

Tahoe is a popular "drive to" location for many Northern California owners. Tahoe is a different place on weekends. Lots of people. You might not like that. Tahoe has a large percentage of owner occupied units. One of the highest in the Marriott system.

The attraction of ski weeks makes trading difficult both from within Marriott and from outside. Many of the owners reserve and lockoff their units in order to get more use from their unit. Two bedrooms are in short supply for traders. I'm not sure if owners can split weeks like Vegas but I believe they can.

One of the most important facts about Tahoe is that Timber Lodge is a relatively small resort as Marriotts go. (I was told about 500-600 units) They had recently relased more units for purchase and people were snapping them up. I believe the buildout is now complete.

There was a giant hole in the ground across the street where a huge non-Marriott timeshare is to be built. The bad economy has probably stopped construction for a while but Tahoe IMHO remains a special place. It will be interesting to see if the recent e bay sale of $5,200 is ROFRed.

 

[Lawlar]

Love Those Little White Lies

Well, it appears things are doing just fine in Tahoe. Prices have never been lowered and they are not offering any special pricing. They would not upgrade my current unit They offered a new 2bd unit for $65,000. The 3bd was in the range of $129,000. I told them I didn't think people would buy at such expensive prices in this economy and the manager told me, IN FACT, they just sold 4 units today alone.

Amazing isn't it?

When I was there two weeks ago the salemen were standing outside with nothing to do. They weren't selling anything. The guests I talked to that week were saying that they would only buy resale (the word must be getting out). I didn't meet anyone who had bought that week.

One of the salesmen told me that his partner (Marriott salesman) was very lucky because he had recently found a night job as a security guard!!!! Wouldn't it be funny if you ran into that salesman who gave you the upbeat presentation while he was wearning his security uniform on his way to his night job. Priceless!!!! Take a picture for me if you see it.

Anyone who buys a Timber Lodge villas at those quoted prices will be ripped off by Marriott's ponzi scheme.

By the way, I paid $299 for my week at Timber Lodge.

 

[CMF]

There are January and February weeks sitting in II right now. Pulled them with an AC even.

Charles

 

[thinze3]

I Call B.s. On Your Salesman!

B.S. about things being all hunky dory in Sout Lake Tahoe.
B.S. about Marriott not offering incentives.
B.S. about Marriott not allowing upgrades.
B.S. about resale owners not having equal rights.
B.S. about customers wanting 5 days vs. 7 days.
B.S. about Marriott having little debt. (debt to equity is over 2)


B.S., B.S., B.S., B.S. ....


Terry

.

 

[m61376]

I think the best evidence that Marriott has been hit as hard as everyone else is their reluctance to exert ROFR. They are letting "drool-over" prices slip through their fingers. I don't think they are so magnanimous that they wouldn't nab them in a second if business was booming.

Curiously, though, top salespeople tell me that sales are still being made.

 

[Dave M]

I think the "best evidence" that they have been hit hard is their own announcements, such as discussed here.

 

[Lawlar]

Bankruptcy Lawyer Looking For Work

I wonder if Marriott would pay me in reward points to handle their Chaper 11? I would come out of retirement for those incentives.

Then again, as soon as I finished their Reorganization Plan, they would probably devalue their points again. [I already have 20 years worth of points that I have saved that just took a big hit. Maybe we can draw on the TARP funds to reimburse ourselves for our rewards deflation?]

 

[Dave M]

Marriott probably has the strongest balance sheet in the hospitality industry. Their earnings will be lower, but they aren't even in a danger of incurring a loss, let alone filing for bankruptcy.

Points Devaluations
Also, I'm still amazed that anyone who has been in any type of frequent points/miles program for at least several years is surprised at devaluations. This is Marriott's third major devaluation in the past 12 years. Marriott is now matching what other large hotel chains have been doing in the past year or so. And almost all of the major airlines have again devalued their programs within the past year or effective early next year.

I have been preaching the devaluation mantra on this forum for at least the last 7 years. It happens and will continue to happen. Although it's a hard hit to timeshare owners, those who stay in Marriott hotels would eventually earn disproportionate numbers of points for their stays compared to the value of Rewards if Marriott didn't devalue occasionally.

Inflation Example
Here is a ridiculous but dramatic example that I post every now and then showing why devaluations are necessary:

Assume average inflation in hotel room prices of 4% per year. Also, assume that a Marriott hotel room for a night has a current average cost eligible for Marriott Rewards points of about $150. At that 4% rate of inflation, the average cost 100 years from today would be $7,575 per night. ($150, compounded annually at 4% for 100 years = $7,575.)

Someone staying two nights at that average rate might earn 18 points per dollar spent (5 points on Marriott Premier Visa and 13 points - depending on elite status - for the stay). 18 points x $7,575 x two nights = 272,700 points earned for a two-night stay.

Thus, assuming Marriott doesn't ever devalue its program from where it is today, the person paying for a mere two nights at a Marriott would earn enough points for an air-hotel travel package that would include 120,000 FF miles and a 7-night stay in any Marriott hotel worldwide!

That's not what is intended. Thus, as inflation marches on, occasional devaluations are necessary to keep the earning and award equation in balance.

We don't like a points devaluation when it happens, but it makes sense for Marriott to do it.

 

[m61376]

Dave-
While your illustration clearly depicts the reality that point devaluation is almost a necessity as a balance to inflation over time, I think what is really irksome is that the number of points given for trading a developer purchased unit is fixed at the time of purchase.

If, for example, the number of points given when trading a timeshare unit was linked to the MF's, or the number of points given was increased by the proportionate increase in MF's, many here would likely look upon the system more favorably. As it is now, the value for trading is set at initial offering, and generally remains fixed over time (with a few exceptions, most notably later sales being offered every year trade-for-points versus EOY options).

Like hotel fees, MF's rise annually and, coupled with point devaluation, the whole idea of trading for points, which may have made sense at the time of purchase, becomes increasingly less worthwhile. A more equitable system would be to similarly increase the trade value of each timeshare to offset the point devaluation.

 

[Dave M]

Although it's a hard hit to timeshare owners, those who stay in Marriott hotels...

I agree with your comments and quote the above as a lead-in to the following.

For a comparison of the relative unimportance of timeshare owners in the Marriott Rewards program compared to hotel guests, try this calculation, which is based solely on my uninformed estimates and a few facts.

There are about 660,000 timeshare weeks in the Marriott system. (See the FAQs for a partially accurate listing of number of units. I multiplied that by 51 weeks. Not all timeshares have been sold.) If 15 % of owners trade for points each year (some can trade only EOY) and can trade for an average of 100,000 points each time, Marriott would give timeshare owners about 10 billion points each year, not including one-time incentives on the sale of weeks.

Marriott has about 3,000 lodging properties. I assumed the average property has 150 rooms and is 70% full each night at an average rate of $130 (including meals and incidentals) and that 80% of occupants are Marriott Rewards members who earn points at an average rate of 12 points per dollar spent (including credit card and Elite bonuses). That works out to about 400 million points given out per night.

At that rate, it would take only 25 nights of hotel stays for points given to hotel customers to equal what Marriott gives to timeshare owners each full year for trading for points. Even though my figures might well be off, I believe the comparison is valid. Hotel customers take most of the Marriott Rewards points in a year.

Adding: Yes, the number of points a timeshare owner can exchange for is fixed at date of purchase. That seems unfair. Yet, devaluations are not new. Anyone who had been a member of any frequent stay/flyer program for a number of years before buying from Marriott should have been aware that devaluations happen. They are a regular occurrence. But I fully realize that's not something we focus on when we sign our purchase contracts!

 

[m61376]

As usual, everything you said makes absolute sense. What perplexes me, though, is especially since the points-for-trading timeshare units is such a blip in the overall scheme of the Marriott rewards program, is why Marriott hasn't devised something more equitable to its timeshare owners. After all, they are an important part of its customer base. Happy owners generate business; they stimulate sales from friends/co-workers, etc. and they tend to be repeat customers.

Maybe its naive to think this way, but it seems it would be so easy for Marriott to ease its owners frustrations and adjust trading values proportionately to MF values (since that's an annualized cost); the few extra points wouldn't make a dent in their profit scheme but would make a big impact on consumer satisfaction- and keep happy Marriott timeshare owners looking forward to purchasing that next resort built.

For years, the exchanging for points program has seemingly been the major distinction between buying from Marriott and buying on the resale market and, especially in tough economic times, it doesn't make sense to me for Marriott to give people a reason to look elsewhere.

Then again, they've certainly built a successful business, so maybe I'm missing something....

 

[Dave M]

The "Marriott Concierge", a group of Marriott employees officially designated by Marriott to answer selected questions on the Marriott forum at FlyerTalk, has stated that Marriott is considering some type of adjustment to the number of points an owner would get when trading for points. Whether it will happen is anyone's guess.

 

[Lawlar]

Inflation for Marriott / Deflation for The Rest Of Us

Points Devaluations

Although it's a hard hit to timeshare owners, those who stay in Marriott hotels would eventually earn disproportionate numbers of points for their stays compared to the value of Rewards if Marriott didn't devalue occasionally.

Inflation Example
Here is a ridiculous but dramatic example that I post every now and then showing why devaluations are necessary:

Assume average inflation in hotel room prices of 4% per year. Also, assume that a Marriott hotel room for a night has a current average cost eligible for Marriott Rewards points of about $150. At that 4% rate of inflation, the average cost 100 years from today would be $7,575 per night. ($150, compounded annually at 4% for 100 years = $7,575.)

I disagree. The problem with Dave's math is that it doesn't account for the fact that for 20 years I have paid Marriott's high rates for a room, often at less convenient locations, so that I can earn a free week after, say 150,000 points.

Hypothetically, lets say I had to pay for 28 nights in order to get 7 free nights. Once I earn those points by paying for 28 nights I shouldn't discover later that I now need to stay 35 nights because Marriott just devalued the points it gave me (which were the equivalent of staying for 28 nights).

I paid the hotel rental rate at today's prices. Once I've earned the benefit of receiving 7 free nights, that shouldn't be taken away from me because Marriott increases its prices in tomorrow's dollars. The points should remain equal to what was earned.

The effect of Dave's calculations is that it allows Marriott to continually increase its hotel rates while continually decreasing the value of my points. If the system was fair to the customers, Marriott would allow the points and rental rates to appreciate at the same rate.

 

[Dave M]

So does that mean that, following my example, you should be able to get a Travel Package (mega FF miles + seven hotel nights) 100 years from now merely by staying two nights in a hotel? That doesn't seem reasonable and there's no way Marriott could afford it. Granted you won't likely be alive then, but Marriott still needs to devalue to avoid that type of result, even though it's not so dramatic 10, 20, 30 or 50 years from today.

It would be nice if Marriott could find a way to devalue future earnings to take care of my example and keep the value you have earned. Unfortunately, I don't know of any frequent stay/flyer programs that have tried that. So I won't hold my breath.

The partial solution to your quandary is to do what almost all FlyerTalkers recommend. Use your points as you earn them. Don’t hoard them. Or wait until a devaluation is announced, such as this one, and make your reservations to use your points for a stay within the 14 months or so (e.g., reserve by January 14, 2009 and stay by January 14, 2010) that you'll have before the new devaluation impacts you.

Further, and most importantly, my math has nothing to do with equity for us. It has everything to do with why it's absolutely necessary for Marriott's fiscal health to devalue occasionally.

 

[Latravel]

I understand what everyone is writing but the reality is, units are selling in Lake Tahoe. I ridiculed the prices they offered but more than one person in the sales department said units are selling. All 3bd in the current phase sold out quickly. They are only taking reservations for the next phase. The bottom line: their actions matched their words - they didn't make an effort to close a sale with a potential and willing customer, unlike Shadow Ridge.

 

[Pit]

It would be nice if Marriott could find a way to devalue future earnings to take care of my example and keep the value you have earned. Unfortunately, I don't know of any frequent stay/flyer programs that have tried that. So I won't hold my breath.

Here's a simple solution. Whenever Marriott decides to inflate point requirements, they should inflate existing MR account balances by an equivalent percentage.

The dollars spent many years ago to earn points are worth much more in today's dollars. Take your hypothetical example of someone who spent $150 at Marriott 100 years ago. They spent the equivalent of $7,575 in todays dollars. Their Rewards balance today should reflect that fact.

 

[Lawlar]

Its Fun To Disagree

Merry Xmas Dave M and Happy New Year. I look forward to our debating these issues in 2009.

Merry Xmas Marriott. I did enjoy my stay at your Timber Lodge. I can't wait to get to MOC in January.

[I won't be cranky on Xmas day.]

 

[UWSurfer]

My most recent trip is an example of what you are talking about.

Over the summer I ended up being reimbursed by my employer for 3 units paid with my credit card in Denver for concurrent stays, totaling about 20 nights (combined) in a Residence Inn. Knowing that it was going to be a significant amount of stays I enrolled in the Marriott Rewards program and earned something like 33,000 points.

Later in the fall I won a 2 night stay in Key West in an unrelated drawing. After taking into account the blackout dates of the 2 night stay, it was adventagous to make the trip in mid-December and I extended the trip by booking two nights in Ft. Lauderdale with the Reward points and a additional night in Islamorada at a Hampton Inn using Hhonors points I had, making a 5 day trip. My out of pocket was basically meals, rental car and air fare which I was frugal on.

It made for a nice trip down and back flying in & out of Ft Lauderdale and I got to use those points for something I wanted to do rather quickly.

A bit of irony though, the key west portion was tied to a dive operator and was supposed to have two days of diving coupled with it. A storm moved through the area those days and we didn't dive. I've got a trip to Orlando over spring break with the family and am planning on making a bonzi run down to get the dives in then. Only problem I'm having is I'd like to use RCI points to book a couple of nights in or near Key West that week and nothing is coming up in the RCI system. The best thing I can figure right now is to convert some HGVC points into Hhonors and book a Double Tree in KW with the Hhonors points, saving about $350 cash that way. I have a bunch of RCI points though and I'd prefer to use those for this trip, if I could figure out a way.

In any event, that's an example of work/hotel stays providing some leisure stays in the Marriott Rewards system.