Trouble - Marriott Grand Residence Tahoe [Management Agreement in Jeopardy?]

[dioxide45]

I may be wrong, but I don't believe the GRC Association receives any reimbursement from the Trust for any Abound reservations originating with Trust points (or any other points for that matter). It doesn't appear in any budget as a revenue source. And Housekeeping costs at GRC have always been a tricky issue. MVW pays that, not the Association. And MVW collects a housekeeping fee from owners in two different ways:
1 - An owner (or their guest) using their deeded week pays a one-time Departure Cleaning Fee based on room type. That ranges from $111 for a Studio all the way up to $375 for a 3 BR penthouse (and typically increases each year).
2 - An owner renting their deeded week out through the Marriott Rental Program gets a DAILY deduction from the gross rental amount, before the Marriott commission is applied.
3 - Abound guests (and I think also Interval, but they are typically few) do not pay any cleaning fee. So this does undermine MVW's budget since no collection occurs.

Sorry, I forgot (didn't fully realize) that GRC owners pay separate housekeeping fees when occupying. This changes my statement which applies to other weeks based intervals at other MVC properties.

So for those intervals/shares owned by the trust, who is covering the maintenance fees? Doesn't the budget have a housekeeping revenue line item since owners are paying these fees when occupying?

 

[SueDonJ]

In a similar way to people choosing resorts and unit types to get the best II trading power for the maint fees, there ae people who specifically target weeks to enroll or are enrolled that give a low MF/club point.
From above and other info on TUG it appears that the number of club points you get for a GR ownership is good, compared to some other enrolled ownerships. e.g the rental rate per club point from elected GR club points is less than the maint fees per club point of Trust club points.
That's one of the reasons we've seen a tightening on high volume transfers in to broker accounts of club points. GR owners, and others, have been electing and then "selling" their club points to brokers who then book via Abound and rent out that booking.
Hope that is clearer is not @Dean may be able to be clearer.

Yes, thank you, now I get it.

Somewhere back in this thread I mentioned that for quite some time GRC-Tahoe has been the favored resort for anyone looking to purchase a Bundle Package (enrolled Weeks plus Club Points) because the Weeks are allotted a decent number of Points for a relatively low MF cost, but, this thread is now bringing to light exactly why the economics were so advantageous! It'll be interesting to see what the next Bundle darling will be.

 

[TimGolobic]

Sorry, I forgot (didn't fully realize) that GRC owners pay separate housekeeping fees when occupying. This changes my statement which applies to other weeks based intervals at other MVC properties.

So for those intervals/shares owned by the trust, who is covering the maintenance fees? Doesn't the budget have a housekeeping revenue line item since owners are paying these fees when occupying?

The Trust pays the MF for the units they own, which is over 20% of the property. Ironically (if that is a proper use here), keeping the MF lower is also a substantial benefit to the Trust.

Housekeeping revenue goes to MVW, not the Association. So no line item on the Association budget for that.

A different can of worms is that the Association receives zero revenue from valet parking, that's all MVW revenue. Despite the Association having to pay all upkeep of the garage area.

 

[dioxide45]

The Trust pays the MF for the units they own, which is over 20% of the property. Ironically (if that is a proper use here), keeping the MF lower is also a substantial benefit to the Trust.

Housekeeping revenue goes to MVW, not the Association. So no line item on the Association budget for that.

A different can of worms is that the Association receives zero revenue from valet parking, that's all MVW revenue. Despite the Association having to pay all upkeep of the garage area.

That makes sense. So, most likely, there is an internal transaction between the Trust Association to MVW that covers the additional maintenance fees for those Abound point reservations. I understand there is a line item in the Trust budget to cover housekeeping fee for trust point reservations at all the properties. Not sure exactly how they cover it for elected points at a resort like GRC.

 

[TimGolobic]

That makes sense. So, most likely, there is an internal transaction between the Trust Association to MVW that covers the additional maintenance fees for those Abound point reservations. I understand there is a line item in the Trust budget to cover housekeeping fee for trust point reservations at all the properties. Not sure exactly how they cover it for elected points at a resort like GRC.

And we'll never know. Ask that question and you'll get my favorite reply "sorry, that's proprietary information", since it's all internal MVW and doesn't go through the Association.

 

[daviator]

I didn't check in on TUG over the weekend, and this post went crazy. So I apologize for stepping back several pages to comment on a point that was made many comments ago.

A couple of people opined that they'd rather see lower maintenance fees and lower reserves, and just have special assessments when money needed to be spent that exceeded the reserves, seeing this as more financially efficient for them. This is a bad idea, and it's also quite unfair to other owners. I also see it as unethical.

It's a bad idea because many owners may not have extra money available to pay for Special Assessments, and every time there are such assessments, it creates issues with collections, delinquencies, and even foreclosures. It's much better to collect the reserves in advance via MFs so that when it's time to replace the roof (for example), the money is there and the job can proceed and, for most owners, it's a complete non-event.

But the other extremely important reason – and I'm surprised that nobody made this point – is that collecting for reserves is more than just collecting money for a future expense. It's the way that owners pay-as-they-go for the ongoing depreciation to the various reserve items as they are occurring. For example, if you buy a VOI at a property which has a new 20-year roof, you and other owners should be paying the cost of 1/20 of a new roof each year, because you (and other owners) are using up 1/20 of the roof's value every year. Failing to collect sufficient reserves mean that the bill for YOUR roof usage must be borne by the owners in 20 years, some of whom may have just bought into the property. Failing to sufficiently collect reserves would allow someone to use a property for years without paying their fair share, and then get out right before major renovations were necessary and foist those costs onto others. That's unfair and probably not even legal – most jurisdictions REQUIRE that sufficient reserves be collected every year, often based on third-party reserve studies by companies/consultants who are expert in doing that stuff.

Personally, I would much rather pay a little more each year and know that I'm not likely to be hit with an unexpected assessment. It's much better for my budgeting and financial planning and it's fairer all around. Collecting insufficient reserve funds is kicking the can forward to future owners and is virtually guaranteed to create problems down the line. To me, it's selfish and unethical.

 

[timsi]

I am not sure that is the case. It seems that housekeeping, front desk and other costs of elected points reservations are passed on to owners via the annual budget. When electing points, it increases the number of checkin/checkout occurances. Thus increasing the staffing needs for things like housekeeping and front desk. It may also increase costs related to Owner Services who take and make the reservations. If most of the intervals are kept as weeks, then it limits the number of checkin/checkout occurrences.

Trust points are different in that the association receives funds from the Trust Association to cover these additional costs.

HOA should start asking MVC to compensate for the elevated housekeeping and front desk costs. If they have done it at one resort, they should do it at all the resorts.

 

[dioxide45]

HOA should start asking MVC to compensate for the elevated housekeeping and front desk costs. If they have done it at one resort, they should do it at all the resorts.

Which HOA? This issue doesn't seem to apply at GRC.

 

[Fasttr]

But the other extremely important reason – and I'm surprised that nobody made this point – is that collecting for reserves is more than just collecting money for a future expense. It's the way that owners pay-as-they-go for the ongoing depreciation to the various reserve items as they are occurring. For example, if you buy a VOI at a property which has a new 20-year roof, you and other owners should be paying the cost of 1/20 of a new roof each year, because you (and other owners) are using up 1/20 of the roof's value every year. Failing to collect sufficient reserves mean that the bill for YOUR roof usage must be borne by the owners in 20 years, some of whom may have just bought into the property. Failing to sufficiently collect reserves would allow someone to use a property for years without paying their fair share, and then get out right before major renovations were necessary and foist those costs onto others. That's unfair and probably not even legal – most jurisdictions REQUIRE that sufficient reserves be collected every year, often based on third-party reserve studies by companies/consultants who are expert in doing that stuff.

Personally, I would much rather pay a little more each year and know that I'm not likely to be hit with an unexpected assessment. It's much better for my budgeting and financial planning and it's fairer all around. Collecting insufficient reserve funds is kicking the can forward to future owners and is virtually guaranteed to create problems down the line. To me, it's selfish and unethical.

Good point for sure. I believe @dioxide45 also touched on that in post #719

 

[Hindsite]

"Owners" are owners, regardless of their usage selection; no quotes necessary. I understand the rest of your sentiment, but similarly, all owners want costs low, regardless of usage selection, not just points elections.

And the budget doesn't change if 1% or 100% of weeks are elected for points.

I don't believe that the drivers for cost prioritisation are at all the same between owners who choose to stay vs those who only/mainly use the ownership for exchanging, either via Abound, II or to rent out. Those different drivers will have an impact on how individual BoD members advocate in the budget discussions. I see a large diversity of spend prioritisation among owners within the ownerships I have. e.g When units are refurbished should the kitchen equipment be high specification and have many features or as simple as practical with a decent lifespan? People can get quite heated about that sort of thing, right from "It's my home away from home and I expect the equipment to be the best" to "I don't go on vacation to cook so don't want to pay for fancy stuff". The list of things like this goes on and adds up.

The current popularity of buying in Spain to enroll resale weeks has nothing to do with the quality of the resort or budgeting by the HOA. I've not even seen anyone comment on that in the discussions.

 

[vacationtime1]

If I were an owner at GRC who elected points and rented them on an ongoing basis, I would be terrified about the possibility of Marriott dropping the property. Saving a few pennies per point compared to losing the ability to rent those points is penny-wise and pound-foolish.

 

[timsi]

If I were an owner at GRC who elected points and rented them on an ongoing basis, I would be terrified about the possibility of Marriott dropping the property. Saving a few pennies per point compared to losing the ability to rent those points is penny-wise and pound-foolish.

There was no chance of Marriott dropping the property. I am surprised how many believed the bluff at the time, and apparently still believe it today.

 

[bizaro86]

If I were an owner at GRC who elected points and rented them on an ongoing basis, I would be terrified about the possibility of Marriott dropping the property. Saving a few pennies per point compared to losing the ability to rent those points is penny-wise and pound-foolish.

I think the idea MAR would make MVW drop GRC over brand standards is absurd, especially when the things involved are some activities and valet parking.

We've seen MVW let hotel owners do pretty much whatever they want, and brand standards take a back seat to retaining hotel contracts. The CEO said hotel owners are their customers, and meant it.

If the HOA held firm on not funding activities or valet parking there's no way either MVW or MAR would say "yep, we're canceling this capital light stream of fees for the sanctity of our brands"

 

[dioxide45]

I think the idea MAR would make MVW drop GRC over brand standards is absurd, especially when the things involved are some activities and valet parking.

We've seen MVW let hotel owners do pretty much whatever they want, and brand standards take a back seat to retaining hotel contracts. The CEO said hotel owners are their customers, and meant it.

If the HOA held firm on not funding activities or valet parking there's no way either MVW or MAR would say "yep, we're canceling this capital light stream of fees for the sanctity of our brands"

Usually, negative reviews and customer scores is what impacts the BOD and perhaps brand standards the most. If a property starts to score low on those post stay customer surveys, big Marriott takes notice. Actives and "freebies" seem to be a driver of higher customer survey scores. I don't know if lack of valet would drive scores down.

I think the issue was that some owners (perhaps BOD members) were willing to break the management agreement. Not necessarily a concern over MVW walking away. Should a few BOD members be able to make such an important decision? I suspect they would have had to take it to the owners for a vote like Hyatt Aspen and Hyatt in Key West did. The former was successful in getting out from under MVW, the latter was not.

 

[TimGolobic]

I don't know if lack of valet would drive scores down.

Valet parking isn't going anywhere at GRC. Self-parking at this location is basically impossible. The garage is too tight, the valet double-parks 2-deep. It is a recipe for liability claims and daily vehicle damage.

 

[davidvel]

I didn't check in on TUG over the weekend, and this post went crazy. So I apologize for stepping back several pages to comment on a point that was made many comments ago.

A couple of people opined that they'd rather see lower maintenance fees and lower reserves, and just have special assessments when money needed to be spent that exceeded the reserves, seeing this as more financially efficient for them. This is a bad idea, and it's also quite unfair to other owners. I also see it as unethical.

It's a bad idea because many owners may not have extra money available to pay for Special Assessments, and every time there are such assessments, it creates issues with collections, delinquencies, and even foreclosures. It's much better to collect the reserves in advance via MFs so that when it's time to replace the roof (for example), the money is there and the job can proceed and, for most owners, it's a complete non-event.

But the other extremely important reason – and I'm surprised that nobody made this point – is that collecting for reserves is more than just collecting money for a future expense. It's the way that owners pay-as-they-go for the ongoing depreciation to the various reserve items as they are occurring. For example, if you buy a VOI at a property which has a new 20-year roof, you and other owners should be paying the cost of 1/20 of a new roof each year, because you (and other owners) are using up 1/20 of the roof's value every year. Failing to collect sufficient reserves mean that the bill for YOUR roof usage must be borne by the owners in 20 years, some of whom may have just bought into the property. Failing to sufficiently collect reserves would allow someone to use a property for years without paying their fair share, and then get out right before major renovations were necessary and foist those costs onto others. That's unfair and probably not even legal – most jurisdictions REQUIRE that sufficient reserves be collected every year, often based on third-party reserve studies by companies/consultants who are expert in doing that stuff.

Personally, I would much rather pay a little more each year and know that I'm not likely to be hit with an unexpected assessment. It's much better for my budgeting and financial planning and it's fairer all around. Collecting insufficient reserve funds is kicking the can forward to future owners and is virtually guaranteed to create problems down the line. To me, it's selfish and unethical.

I'm not sure it was more than 1 person.

Regardless, in CA where GRC is located, reserves must be fully funded for all known/anticipated capital expenses. Also, no HOA (especially TS) would ever survive if large capital expenditures had to be funded through SAs when the work needs to be done, even if MF were otherwise much lower. People overall are not capable of setting aside such funds, which is the same reason we have tax withholding.

 

[davidvel]

Valet parking isn't going anywhere at GRC. Self-parking at this location is basically impossible. The garage is too tight, the valet double-parks 2-deep. It is a recipe for liability claims and daily vehicle damage.

Correct, same with Timber Lodge and Vegas. It is not as much a brand standard issue as a limited parking infrastructure issue. It is a necessity almost as much as electricity and water.

 

[WBP]

This thread reminds me of refried beans and regurgitated vomit. There has not been one substantive addition to this thread, in months, other than the recent GM Newsletter to owners.

 

[ocdb8r]

Yes, thank you, now I get it.

Somewhere back in this thread I mentioned that for quite some time GRC-Tahoe has been the favored resort for anyone looking to purchase a Bundle Package (enrolled Weeks plus Club Points) because the Weeks are allotted a decent number of Points for a relatively low MF cost, but, this thread is now bringing to light exactly why the economics were so advantageous! It'll be interesting to see what the next Bundle darling will be.

I don't think this changes anytime soon, even at the proposed Budget GRC still beats most weeks deeds (on a MF/point ratio) except certain event weeks. When you couple this with the fact the buy in for a single chunk of weeks (fractional interest) that generates 20k+ points each year will mean it will continue to be a favored option for so long as it's still affiliated with MVC (and no major changes to points allocations).

I don't believe that the drivers for cost prioritisation are at all the same between owners who choose to stay vs those who only/mainly use the ownership for exchanging, either via Abound, II or to rent out. Those different drivers will have an impact on how individual BoD members advocate in the budget discussions. I see a large diversity of spend prioritisation among owners within the ownerships I have. e.g When units are refurbished should the kitchen equipment be high specification and have many features or as simple as practical with a decent lifespan? People can get quite heated about that sort of thing, right from "It's my home away from home and I expect the equipment to be the best" to "I don't go on vacation to cook so don't want to pay for fancy stuff". The list of things like this goes on and adds up.

The current popularity of buying in Spain to enroll resale weeks has nothing to do with the quality of the resort or budgeting by the HOA. I've not even seen anyone comment on that in the discussions.

I don't think that's true - budgeting by the HOA does provide a big incentive. Platinum Spain weeks generate a very favorable MF/point ratio due to the lower budgeted annual dues. I think this, combined with the fact you can still purchase a "week" to requalify other weeks (as opposed to needing to purchase points) is what drives many people there for a purchase.

 

[ocdb8r]

This thread reminds me of refried beans and regurgitated vomit. There has not been one substantive addition to this thread, in months, other than the recent GM Newsletter to owners.

Thanks for your valuable "substantive addition"...

Owner Services is a disaster, the MVC website is a disaster, and Marriott’s Product Supply Management/Inventory Management is scandalous. I am unimpressed with MVC’s villa refurbishments.

On the Marriott Lodging side of the Marriott business, I believe that Marriott Bonvoy is amongst the worst brand loyalty programs in the world.

This is not the Marriott that we knew 50 years ago, and not the MVC that we knew 40 years ago. One would have expected these enterprises to get better with time, but, they’ve gotten worse.

Great examples of your "substantive" contributions to threads. Lot's of superficial conclusions with no explanations. I apologize that you had to troll through this thread of us trying to have a detailed conversation about this topic.

 

[SueDonJ]

This thread reminds me of refried beans and regurgitated vomit. There has not been one substantive addition to this thread, in months, other than the recent GM Newsletter to owners.

Gotta hand it to you - it's not often we see the perfect self-own.

 

[Hindsite]

I don't think this changes anytime soon, even at the proposed Budget GRC still beats most weeks deeds (on a MF/point ratio) except certain event weeks. When you couple this with the fact the buy in for a single chunk of weeks (fractional interest) that generates 20k+ points each year will mean it will continue to be a favored option for so long as it's still affiliated with MVC (and no major changes to points allocations).

I don't think that's true - budgeting by the HOA does provide a big incentive. Platinum Spain weeks generate a very favorable MF/point ratio due to the lower budgeted annual dues. I think this, combined with the fact you can still purchase a "week" to requalify other weeks (as opposed to needing to purchase points) is what drives many people there for a purchase.

The fashion was once St Kitts, then Aruba, now Spain. The Spain resorts don't have some secret sauce for maint fees being low quite the contrary, mine have gone from being the lowest to the highest in my portfolio. You can read the outrage at the scale of the increases in any of the resort specific FB pages. The current popularity is driven by the favourable exchange rate for US purchasers. If that changes the fashion will change, just as it has previously. 30% of the increase in my maint fees can be attributed to currency fluctuations so it makes a big difference.
Great if GRC remains favourable for election, I'm sure there are many very large scale owners, with a vested interest, in ensuring that is the case and they will apply pressure accordingly. They would be silly not to.

 

[bizaro86]

Usually, negative reviews and customer scores is what impacts the BOD and perhaps brand standards the most. If a property starts to score low on those post stay customer surveys, big Marriott takes notice. Actives and "freebies" seem to be a driver of higher customer survey scores. I don't know if lack of valet would drive scores down.

I think the issue was that some owners (perhaps BOD members) were willing to break the management agreement. Not necessarily a concern over MVW walking away. Should a few BOD members be able to make such an important decision? I suspect they would have had to take it to the owners for a vote like Hyatt Aspen and Hyatt in Key West did. The former was successful in getting out from under MVW, the latter was not.

I think both the owners and MVW benefit from the affiliation, but I don't think lower survey scores would be anywhere near enough to get them dis-affiliated. MAR/MVW sells the ongoing fee stream part of their business to Wall Street as justification for stock price improvement, and they care about growing that more than anything else. They wouldn't cut GRC loose unless it was egregious, and a drop in satisfaction related to activities isn't nearly close enough.

 

[dioxide45]

This thread reminds me of refried beans and regurgitated vomit. There has not been one substantive addition to this thread, in months, other than the recent GM Newsletter to owners.

It's a slow time of year on TUG, this is an interesting topic that could impact just about any resort. Why so much hate? No one made you read through it.

 

[daviator]

This thread reminds me of refried beans and regurgitated vomit. There has not been one substantive addition to this thread, in months, other than the recent GM Newsletter to owners.

I think this has been an interesting thread, which is why I've tried to keep up with it. The natural tension between owners and the developer – and how that plays out with each property's VOA and its control – should be of interest to all of us.

One might ask: if what you see on the plate is regurgitated vomit, why do you continue to eat?