Westin SVO in 10/20/30 years

[nycmaui]

Hello,

First, thanks for the wealth of information. I found this site after I purchased my WKROV-N two years ago from a developer. Unluckily for me, I found your site after the rescind period. I'm back on the site because of my recent visit.

I just came back from visiting WKROV-N for the first time (2nd visit to WKROV) and had a great time. The North units felt much smaller but the view was good.

Anyway, my question is about the future of our vacation home. When purchasing the unit, one of the selling points was that we would own this vacation home for a lifetime, but it's starting to set in that there's a finite period that our vacation home will hold value.

I guess as long as our MF fees are significantly lower than the room rate at the hotel, we should be ok.

My question is:
1) Do you think the MF fees will ever rise above the room rental rates?

2) At how many years forward do you think our MF fee will be almost equivalent to the rental rates?

3) Can Westin at any point just drop their name from our vacation home? Does Westin currently own the units or do they just manage it? Having the Westin name adds credibility and I'm wondering if they can just sell to a generic timeshare developer.

4) What do you guys think is the realistic lifespan of these units?

Thanks in advance. I hope to contribute to the community in the future.

 

[SDKath]

I can't answer your questions very well as I am new to Starwood but what you wrote reminded me of a DVC conversation I had with a Disney owner about 6 months ago. I told him how I thought it was a downside to Disney that their contracts are only for about 50 years of ownership.

He replied that that is an upside to the ownership in his view. Resorts age quickly and newer (and nicer) resorts pop up all the time. What is hot now will not be so hot in 50 years. To own something forever with the plans to pass it down to your children may be a liability rather than an asset. THe MF go up always and when resorts need a makeover, there are all sorts of special assessments.

And companies go under, merge, get bought out, etc. Basically, he thought owning for a finite period is a good thing. What will all those Orlando or desert properties be like in 100 years? Who knows? Will Starwood survive our economic downturns and not sell off older properties to cut debt -- who knows? All we can do is enjoy what we have to the fullest now.

Katherine

 

[Denise L]

1) Do you think the MF fees will ever rise above the room rental rates?

2) At how many years forward do you think our MF fee will be almost equivalent to the rental rates?

3) Can Westin at any point just drop their name from our vacation home? Does Westin currently own the units or do they just manage it? Having the Westin name adds credibility and I'm wondering if they can just sell to a generic timeshare developer.

4) What do you guys think is the realistic lifespan of these units?

Welcome to TUG! Looking into my crystal ball, here is what I see....

I don't see the MFs rising above rental rates. Look at the Kea Lani Villas, for example (we used to stay there before buying at WKORV). They used to rent out a 2-bedroom villa for $1400/night. I have no idea what the rate is today, but I can't see our MFs going up that high.

Westin could probably sell off whatever resorts it wants to, or be bought out at any time in the future, but it seems like most of the big name hotel chains are here to stay. The Westin Maui and Sheraton Maui hotels have been around for ages. I expect WKORV/N to be around for many years to come.

I am planning to enjoy my vacations as much as I can :whoopie: !

 

[nycmaui]

Thanks.
I hope Starwood treats us well after all their units are sold. I hope it wan't a quick money making strategy for them.

I estimate that Westin is collecting about $23 million in maintenance fees from the North resort. I hope they put that money to good use and also make the shareholders happy.

 

[nodge]

I think the biggest long term threat to the sustainability of the Starwood system is its decision to make all future resorts voluntary. As these voluntary resorts are resold, fewer and fewer units remain for exchange within the SVN system. Eventually, the entire SVN exchange system will be rendered useless due to lack of inventory.

Burried deep within my developer purchase documents is a discussion of how SVO makes no promises that its internal exchange system will remain functional. It expressly states that its functionality is dependent on how many owners actually participate in it. In a separate section, the purchase paperwork reveals that resale buyers of voluntary resorts are excluded from participating in the SVN system. But nowhere in these documents does SVN put the two issues together to expressly say:

1. People need to be members of our internal exchange network in order for us to have inventory for exchanging and thereby render our exchange system functional;

2. Resale buyers of voluntary resorts are excluded from participating in our internal exchange system;

3. Most current properties in sale and ALL future properties will be voluntary resorts;

4. Eventually, virtually all of our developer purchased properties will be resold and thereby lose their SVN status; and,

5. You do the math on the long term survivability of our exchange system under these circumstances.

Oh yeah, if you read your purchase documents, you’ll see that Westin and Sheraton names are licensed to each property, and can be pulled by Starwood at the drop of a hat.

All of this could be easily overcome if SVO management were on the ball and remotely interested in promoting the long-term survivability of the program. Unfortunately, I suspect we owners are currently viewed as nothing more than a captive cash cow by current SVO management, so this and other issues of importance to us are just ignored.

-nodge

 

[LisaRex]

I think that the MFs will ensure the viability of the properties. No matter how I view the long term viability of SVN, I think the individual properties will do fine.

The bigger worry for me, personally, is the long term viability of Maui, with over-development and soaring housing costs (and MFs) being my two biggest concerns.

 

[nodge]

I think that the MFs will ensure the viability of the properties. No matter how I view the long term viability of SVN, I think the individual properties will do fine.

I agree with Lisa. Given what we all are paying in MF's at our home resorts, they will all individually do fine over time. I just think that the SVN internal exchange system is toast in the long run. More reason to buy where you really want to go.

Who knows, maybe having SVN collapse wouldn't be a bad thing. We'd probably all have to rename our resorts, but the folks managing each resort wouldn't all be in the pocket of a corporate deathstar/mothership whose only confirmed plan is to maximize new sales at the expense of everything else, including the needs of its existing owners.

-nodge

 

[grgs]

I think the biggest long term threat to the sustainability of the Starwood system is its decision to make all future resorts voluntary. As these voluntary resorts are resold, fewer and fewer units remain for exchange within the SVN system. Eventually, the entire SVN exchange system will be rendered useless due to lack of inventory.

-nodge

But don't you think that if Starwood needed to get some more voluntary units back into the fold, they would just offer owners a "limited time opportunity" join SVN (for a fee, of course)? As FredM has stated several times, there's nothing to prevent them from doing this. That's what I expect would happen. Not only would they be able to get more units back in, but it would provide a new revenue stream. I'm surprised they don't just let voluntary owners buy their way back in now (well, that's kind of what they're doing with requalifications).

Glorian

 

[SDKath]

Yes, that would be nice. Except that would completely turn people off from buying for the rediculous prices directly from the developer. And then Starwood would be in even more trouble as they would never be able to justify that $36,000 IV EOY WKORV price that some poor soul posted paying last week.

Kath