What happens to Starwood's owners at mandatory resorts when others have sold out?

[Transit]

I was under the impression that SVN members were also SVO members if that being so then any SVN member would have access to any SVO inventory isn't that what the whole II SVO priority based on. I'm in agreement with Davenrobin on this You can be SOL if you have a floating week at a V resort and you don't book at the 8th month mark that inventory will be booked by SVN members after that at some point it would be space banked to II for all SVO ,then general exhanges.FROM THE SVO WEBSITE What is vacation ownership ?

In the simplest terms, vacation ownership allows you to purchase, under deeded ownership, a certain amount of time you can use to take a vacation in one of our all-villa resorts, every year, or every other year.I belive Westin 5star is correct.

Depending on the type of villa, you may exchange or trade your accommodations, split larger accommodations into smaller accommodations for longer periods of time, or take advantage of the flexibility of exchanging your accommodations within the Starwood Vacation Network or with our Starwood Preferred Guest® program.

 

[DavidnRobin]

It isn't that I don't believe that you were told that. I simply saying that what Starwood told you is so outrageously unfair that I find it very hard to believe that it is true.

It is not only what they say - it is also stated via contract (and agreeing to CC&R,SVO,SVN, and other assocation conditions).

I just don't get the concern (why this is so unfair?) - sorry, maybe I am missing something...(or dense) It is relatively straight forward - they set the terms, you accept those terms. It is thier Biz Model (right or wrong - which can change...) and their system which a buyer agrees to by contract. Are the terms of the contract unfair?

If someone buys a V resort resale - the buyer cannot use the SVN system (cannot buy in), along with the others conditions as with buyers of resale M resorts (who can use SVN). A V resale buyer must reserve their deeded float week within their deeded season to get Home Ownership usage between the 12 to 8-month mark before it goes in to the SVN exchange system. There is no guarentee a week going to be available for them after this mark - this is true for every SVO Float Owner (V and M) whether they purchase from SVO or bought resale.

This is in the terms of the contract. An V owner may not be aware of these condition when they buy from SVO (although they should) - but a resale buyer sure should be.

I don't believe SVO is selling V resorts telling potential buyers that privledges they receive as a SVO owner is transferred to the resale buyer. They actually say this is one of the reasons why you should buy from them if asked about resales (true).

I do think the WPORV can buck the trend of value loss to a point. I expect the value may drop up to $10K - if more than that I will be disappointed - if less than this - gravy. Why? This is what I put our cost of the incentive SPs, Requal of WKORV, 3*Elite/Gold that we got upon purchase (which I shared here).

Of course - this is only a loss if we decide to sale. Is SVO obligated to tell me that our V purchase will be a loss? (right...)

 

[ketamine]

I dislike Starwood for destroying the resale values of voluntary resorts; I know that they lost a sale from us ..... of course they do not care (

I am so angry at how devalued my 2 WMH's units are that despite being a 3* elite I will NEVER buy Westin again. It is such a shame because the resort and the units are so beautiful. Being a voluntary network (which I did not undersand back then) I feel ripped off realizing I've lost over 50% of my initial costs. Unfortunately I didn't know about TUG or Marriott then. And to think the sales people at SVO bad mouth Marriott!!

 

[DavidnRobin]

I am so angry at how devalued my 2 WMH's units are that despite being a 3* elite I will NEVER buy Westin again. It is such a shame because the resort and the units are so beautiful. Being a voluntary network (which I did not undersand back then) I feel ripped off realizing I've lost over 50% of my initial costs. Unfortunately I didn't know about TUG or Marriott then. And to think the sales people at SVO bad mouth Marriott!!

Isn't this decrease in value true for most (almost all) TSs whether they are SVO, Marriott, or others? We only own SVO (all resale except WPORV) - so I don't have direct experience, but from what I read on TUG - this loss is common across TS companies and in some cases almost a total loss (please do not post the few instances that had an increase or held, because SVO also has these examples - e.g. WSJ-VG).

It is only an actual loss if you sale - other than that it is a paper loss. As a SVO buyer of a V resort you still get the 'benenfits' of ownership - especially the one that allows you to use SVN (as the others aren't really that big of a benefit). So with the relatively low MFs (and enough SOs - that can be combined as a SVO buyer) you can exchange into other SVN resorts. You said it yourself - you think the resort is great - you haven't sold (or are you trying to? are you forced to?) - then why be so angry over a paper loss? You still have every benefit available to you - and the use of a great resort from what you write.

The resale buyer of a V resort does not get this benetfit, but then they paid a lot less for their TS. Would have you preferred that? Some who choose the 5* Elite Requal route actually use these low V values to their benefit.

I am not trying to minimize your value loss, and I certainly not a shill for SVO - I luckily found TUG in time. We are very happy with our choices and like the SVO system over the Marriott (our other choice that we considered) - although we could have saved more with better research and patience - but we prefer to look forward in how to maximize value with what we have.

TS sales is a slimy business - and I believe this only hurts them over time (most people I discuss TSs with generally talk about some bad experience) the industry can use improvement and business model could be improved (from what I understand SVO, Marriott and others are doing this), but no where did they hold a gun to someones head and forced them to buy. There may not be upfront and honest about V and M, resale and direct sales, owner experiences, devaluation , etc. - their business is to sell TSs and hopefully a great vacation experience - it would be a pretty lousy sales tactic to be totally honest?

 

[KOR5Star]

I am so angry at how devalued my 2 WMH's units are that despite being a 3* elite I will NEVER buy Westin again. It is such a shame because the resort and the units are so beautiful. Being a voluntary network (which I did not undersand back then) I feel ripped off realizing I've lost over 50% of my initial costs. Unfortunately I didn't know about TUG or Marriott then. And to think the sales people at SVO bad mouth Marriott!!

It's always greener on the other side of the fence... until you get over there.

Good luck with Marriott. My sister owns there. You had better own more than one week if you want any chance at high demand weeks.

 

[duke]

I am so angry at how devalued my 2 WMH's units are that despite being a 3* elite I will NEVER buy Westin again. It is such a shame because the resort and the units are so beautiful. Being a voluntary network (which I did not undersand back then) I feel ripped off realizing I've lost over 50% of my initial costs. Unfortunately I didn't know about TUG or Marriott then. And to think the sales people at SVO bad mouth Marriott!!

Have you ever purchased a car?

 

[Bill4728]

Starwood’s policy of opening up all units to any network owner at 8 months is illegal!! It doesn’t matter what the CCR say, it is illegal! It because Starwood policy of pooling all (network and non-network) units together at a voluntary resort is illegal..

Before you all flame me, let me explain.

We all agree that it is illegal to sell more shares than there are units. RIGHT? Starwood policy of allowing network access at 8 months to non-network owned units (resale units at voluntary resorts) is basically the same thing. They are required to have units available for the owners of the units. If in the CCR, they say “at 8 months you have access to any network unit not just the units at your deed resort” is fine because they are still working with a pool of units (just a bigger pool), which haven’t been oversold. BUT, if you say to one owner ( the vouluntary resale owner), we promised you a unit at resort “A” but gave all the units to people from resort “B”. You must offer the “A” owner a unit in resort “B” or you have basically oversold. This is very different than saying to someone in December trying to reserve a December unit, sorry we don’t have a unit for you (because the unit sat empty in March).

So, Starwood policy toward voluntary resales is illegal, unless Starwood starts to separate the pool of units, which are network vs. non-network unit. OR Starwood must allow some access to non-network owners to some network inventory (even if it is II banked units) because their current policy is “overselling of the TS intervals”.

 

[DavidnRobin]

Starwood’s policy of opening up all units to any network owner at 8 months is illegal!! It doesn’t matter what the CCR say, it is illegal! It because Starwood policy of pooling all (network and non-network) units together at a voluntary resort is illegal..

Before you all flame me, let me explain.

We all agree that it is illegal to sell more shares than there are units. RIGHT? Starwood policy of allowing network access at 8 months to non-network owned units (resale units at voluntary resorts) is basically the same thing. They are required to have units available for the owners of the units. If in the CCR, they say “at 8 months you have access to any network unit not just the units at your deed resort” is fine because they are still working with a pool of units (just a bigger pool), which haven’t been oversold. BUT, if you say to one owner, we promised you a unit at resort “A” but gave them all to people from resort “B”. You must offer the “A” owner a unit in resort “B” or you have basically oversold. This is very different than saying to someone in December trying to reserve a December unit, sorry we don’t have a unit for you (because the unit sat empty in March).

So, Starwood policy toward voluntary resales is illegal, unless Starwood starts to separate the pool of units, which are network vs. non-network unit. OR Starwood must allow some access to non-network owners to some network inventory (even if it is II banked units) because their current policy is “overselling of the TS intervals”.

Sorry - I must be dense and not following your logic (and certainly wouldn't flame a open/fair discussion - whereas if you had some unreasonable beef because you bought without reading and understanding Owner documents...).

Of course they cannot sell more than they have, BUT... how are they doing this? They are not selling more than they have - if a resale owner of a V resort does not reserve their unit (because they are clueless - or what to challenge the system) they lose their week (by contract).

Is SVO responsible because an resale V owner doesn't adhere to the contrated conditions. This unreserved week goes into a pool for SVN exchange.

Resale owners of V resorts cannot use the SVN system to exchange - 2nd sentence (did I read correctly that you stated that they can do this? did you mean to say 'not allowed'? or did I misinterpret?)

SVO is not required to have a week available if the resale V owner does not reserve their week at the 8th month mark - this doesn't mean they are cut out of being to get a week at their Home resort if weeks are still available.

If an owner (SVO or resale) of any resort (V or M) waits until the 8 month mark to reserve a week 50 (for float 1-50 weeks in this case) and the week is sold out - the SVO owners and resale M owners have other recourse at this point - the resale owner of a V resort - does not.

Sorry - maybe I am missing the point here in this hypothetical discussion if the perfect storm for the resale V owner were to occur. (no flame intended - actually this has no impact for me that I can foresee - I have total understanding of the limitatons placed on us for our WPORV week)

 

[dcdowden]

It sure seems clear to me that Starwood would claim that an owner at a Voluntary resort is guaranteed a unit if they reserve in the 8-12 month window. After that, it would seem that they are taking a very big risk. Do these owners have access to II for external exchanges? Maybe Starwood would offer that as an alternative if their home resort is totally reserved for the whole year.
Doug

 

[Transit]

Starwood does not support resales ...if you buy a resle unit at a V resort you are entitled to only what the deed states there are lots of details in those deeds unless your a lawyer, have one or really know what you doing be carefull.I think the voluntary/ manditory issue is done purposely to deter resales.I really don't know if there are 2 pools of units or exactly how those units will be distributed in the future but much of the contracts wording states "At Starwoods Discression" and "Subject to change" .I think your missing the flavor of how the V/M works. All Starwood units are SVO .If you own a M resort you are required to join SVN. You may join SVN if you buy fron Starwood at a V resort or you can opt not to. Now if you buy a resale it becomes the choice of Starwood weather or not to let you join SVN. When buying resale some privleges may be lost.I don't think(hope) Starwood overlooked a simple legality issue like overselling resorts.Or then again I could be completely wrong

 

[jerseygirl]

I think Duke is correct and that the various state timeshare regulations will require Starwood to book/hold something for those "clueless" SVN members who do not reserve something at the 8-month mark -- even if it's a bunch of off season weeks deposited to II.

I'm not debating the language in the CCR (I haven't seen a "post SVN voluntary" one), but I'm sure we've all worked with enough attorneys to know they don't think of every possiblity when they're putting these things together.

 

[Bill4728]

SVO is not required to have a week available if the resale V owner does not reserve their week at the 8th month mark - this doesn't mean they are cut out of being to get a week at their Home resort if weeks are still available.

If an owner (SVO or resale) of any resort (V or M) waits until the 8 month mark to reserve a week 50 (for float 1-50 weeks in this case) and the week is sold out - the SVO owners and resale M owners have other recourse at this point - the resale owner of a V resort - does not.

Let me ask this another way. Can SVO rent out units at resort "A" at 8 months to the general public, just because they haven't been reserved yet by the owners and not offer the owners some compensation? I don't think so. .


And as far as overselling. A resort can't sell all the intervals then rent them out just because they were not reserved early enough. SVO must either let the unit sit empty or keep it available for owners or offer the owner some compensation. They can't say "tough, you didn't reserve before 8 months so you're out of luck" If you substitue "rent" for "allow use by another SVN owner", you are doing the same thing. SVO is allowing someone to use a unit which SVO doesn't have the right to allow.

 

[Transit]

After rereading and thinking about this post Bill4728 may be right in that there are probably 2 pools of units . This is done at Vistana where only Lakes and Cascades are in SVN. Vistana Villages is now also V and M in different sections.Cave Creek and Jensen beach are SVO but SVN members need to book through II.I think the 8th month mark is of concern only because its the last chance to get a prefered week.I believe at some point of the year Starwood can provide an owner with a unit (maybe not a good one) , weather there are 2 seperate pools of units or not.

 

[Westin5Star]

Let me ask this another way. Can SVO rent out units at resort "A" at 8 months to the general public, just because they haven't been reserved yet by the owners and not offer the owners some compensation? I don't think so. .


And as far as overselling. A resort can't sell all the intervals then rent them out just because they were not reserved early enough. SVO must either let the unit sit empty or keep it available for owners or offer the owner some compensation. They can't say "tough, you didn't reserve before 8 months so you're out of luck" If you substitue "rent" for "allow use by another SVN owner", you are doing the same thing. SVO is allowing someone to use a unit which SVO doesn't have the right to allow.

If no one has made a reservation and the room is open then Starwood reserves the right to rent the room. This is exclusive of the 8 month or less rule so Starwood can do this at anytime. Starwood does not have to compensate anyone when they do this.

It would be really nice if people started quoting what is in the Starwood documents and not what they "think" is legal unless they are an expert on the laws in the given territory. It would have prevented many of the posts on this topic from even taking place. We can all say what we think is right and wrong. At the end of the day the legal documents will govern these issues unless the courts find them unlawful.

Starwood cannot oversell units. However and as stated before, the exchange policies for mandatory and direct voluntary purchases could squeeze resale voluntary owners out of their stays at the 8 month point! Again, I don't agree that this is right but it is what is written; I will assume that it is legal until the courts determine otherwise.

 

[jerseygirl]

I thought it was common sense, but if you want legalities, start here with HRS Chapter 514E:

http://www.hawaii.gov/dcca/areas/pvl/programs/timeshare/statute_rules/

Scroll down to section 514E-8.6

Some notable quotes:

An operator shall not offer or dispose of a timeshare unit or a timeshare interest unless the one-to-one use night requirement is currently satisfied and will continue to be satisfied for the duration of the timeshare plan.

If the timeshare plan has more than one class of timeshare interest, then the requirement must be satisfied within each class.

A use night counted to satisfy the requirement for one class may not also be counted to satisfy the requirement for a competing class.

This section shall not be deemed to prohibit the timeshare instruments from including provisions permitting rental by the association or the developer, or reservation and use by owners, of use nights which remain unreserved as of sixty or fewer days in advance of the use night.

 

[jerseygirl]

If no one has made a reservation and the room is open then Starwood reserves the right to rent the room. This is exclusive of the 8 month or less rule so Starwood can do this at anytime. Starwood does not have to compensate anyone when they do this.

As the property manager, Starwood must attribute the rental compensation to the rightful owners, less a healthy commission of course. You should be seeing this line on your annual financial reports -- I know it shows up on the five Starwood resorts I've owned over the last six or seven years.

 

[Bill4728]

So we all agree " no matter what the starwood documents say, their policy of releasing non- network units to network owners at 8 months is not legal" (at least in Hawaii).

 

[jerseygirl]

We'll never all agree, but we can read the statute and draw our own conclusions.

 

[Westin5Star]

I thought it was common sense, but if you want legalities, start here with HRS Chapter 514E:

http://www.hawaii.gov/dcca/areas/pvl/programs/timeshare/statute_rules/

Scroll down to section 514E-8.6

Some notable quotes:

An operator shall not offer or dispose of a timeshare unit or a timeshare interest unless the one-to-one use night requirement is currently satisfied and will continue to be satisfied for the duration of the timeshare plan.

If the timeshare plan has more than one class of timeshare interest, then the requirement must be satisfied within each class.

A use night counted to satisfy the requirement for one class may not also be counted to satisfy the requirement for a competing class.

This section shall not be deemed to prohibit the timeshare instruments from including provisions permitting rental by the association or the developer, or reservation and use by owners, of use nights which remain unreserved as of sixty or fewer days in advance of the use night.

Thank you for forwarding this and I am sorry that to me this was not and is not common sense.

It "appears" that according to this document and Starwood's policies in Hawaii that there may be a discrepancy. However, it also "appears" that Starwood has a legit out from this; when Starwood allows for the deposit of the week into II, it satisfies the "use night requirement".

This is how I read it but I will definitely contact Starwood to get their response of this "seeming" discrepancy. I would invite David to review his Princeville (voluntary Hawaii) documents for any meaningful input.

 

[msweaver]

Starwood cannot oversell units. However and as stated before, the exchange policies for mandatory and direct voluntary purchases could squeeze resale voluntary owners out of their stays at the 8 month point! Again, I don't agree that this is right but it is what is written; I will assume that it is legal until the courts determine otherwise.

Absolutely not! I am a former voluntary resale owner at Sheraton Mountain Vista, so I have some experience with this situation. The legal contract that a voluntary (resale) owner has with the developer for a "floating" week ensures that they will be able to book a week in that season as long as weeks are available. While it is technically possible some weeks early in a season could go unoccupied, thereby leading to owners not being able to reserve their units, such a situation would be an exception rather than a rule, and would be the result of the owner's lack of prudence.

However, if SVO opens up all that available inventory to other SVN owners at 8 months out, the possibility of voluntary owners being denied space would increase. In raising this issue with sales reps at SMV (yes, sales reps), I was assured that there is separate pool of units per season set aside for resale use, and those units are not made available to SVN. In fact, one of the legal statements you can get from Starwood is a listing of their resorts and the amount of units participating in the SVN program. Some of the older units (Vistana, Desert Oasis) have surprisingly low participation.

My own experience was that ski weeks at SMV were available much later than I would have thought (beyond the 8th month window) which anecdotally supports the idea that resale units are kept in a separate pool.

 

[Westin5Star]

As the property manager, Starwood must attribute the rental compensation to the rightful owners, less a healthy commission of course. You should be seeing this line on your annual financial reports -- I know it shows up on the five Starwood resorts I've owned over the last six or seven years.

As I said Starwood does not have to compensate "anyone" for renting a room; the obvious exception is when we deposit our time into their rental pool with the expectation of receiving rental income. It is in all of our interest for Starwood to rent rooms when they are not used as we "are all" compensated which supposedly will help to keep our fees lower.

 

[Westin5Star]

We'll never all agree, but we can read the statute and draw our own conclusions.

Yes we will not all agree until we get the proper answer directly from Starwood; and even then we might not do so until a court rules on this. I will be forwarding Starwood the legalease from my docs and the Hawaii requirements that you forwarded. I will post my findings, hopefully with direct quotes and backup from Starwood. Thanks again for providing me with that great information!

 

[Westin5Star]

Absolutely not! I am a former voluntary resale owner at Sheraton Mountain Vista, so I have some experience with this situation. The legal contract that a voluntary (resale) owner has with the developer for a "floating" week ensures that they will be able to book a week in that season as long as weeks are available. While it is technically possible some weeks early in a season could go unoccupied, thereby leading to owners not being able to reserve their units, such a situation would be an exception rather than a rule, and would be the result of the owner's lack of prudence.

However, if SVO opens up all that available inventory to other SVN owners at 8 months out, the possibility of voluntary owners being denied space would increase. In raising this issue with sales reps at SMV (yes, sales reps), I was assured that there is separate pool of units per season set aside for resale use, and those units are not made available to SVN. In fact, one of the legal statements you can get from Starwood is a listing of their resorts and the amount of units participating in the SVN program. Some of the older units (Vistana, Desert Oasis) have surprisingly low participation.

My own experience was that ski weeks at SMV were available much later than I would have thought (beyond the 8th month window) which anecdotally supports the idea that resale units are kept in a separate pool.

How did the TS sales person assure you? I hope that they did it in writing. I had Starwood direct tell me that they do not have two separate pools (this was either from legal or Sr. Mgmt. as the call had to be escalated from sales); and it was in their interest to tell me otherwise. I would not have accepted their telling me that there was two pools without getting it in writing. Please forward me the assurance that the TS sales rep gave to you. I would love that for future use and I will also forward it to Starwood with the clarification that I will be requesting from my last post. Starwood is obviously telling different people different things so all we have is what we have in writing. We are all on the same team / side here and they (Starwood) owes it to us to give us clarification.

 

[KOR5Star]

I was curious, so I spoke to Orlando (SVN headquarters) regarding a resale at a voluntary resort.

It's very simple and it's as I suspected. It's not the unit that doesn't belong to SVN, it's the owner.

A resale owner, not in the SVN, has no rights to trade their week in the system. They are subject to the same rules as everyone else in regards to securing their home resort. If they don't book it fast enough, they may not get their week... no difference. They are neither discriminated against nor favored. But the unit is available to the entire SVN. It never loses it's membership unless Starwood ceases to manage the property.

There is absolutely no illegality. No rights or priveleges of the non-member are being denied. The only thing being denied is their ability to trade in the SVN... which Starwood is completely up front about and it's spelled out in contracts.

 

[jerseygirl]

I give up!