After the dust has settled ( I think)

It seems that information posted that shows rental income was sent out to all WKV owners. It doesn't seem that Starwood is sending out "squat."

It seems the Starwood "screw you" clauses are being misinterpreted. They may not be "screw you" at all.

It seems that the 2010 WKV budget for rental income is based on the economy and used to be much higher for 2009.

And, what happens when Marriott or Hilton or Hyatt rents a timeshare? Does all the net rent go to the HOAs?

I am at least equally interested in an audit of the rentals that occur under this clause:

SVN Operator has the right, but not the obligation, to reserve a number of Floating Vacation Periods from time to time at any time thirty (30) days after the beginning of the Home Resort Fixed Priority Period, and any unreserved Vacation Period after the Home Resort Fixed Priority Period, for the purpose of depositing the reserved Vacation Periods with an External Exchange Program on behalf of SVN Members based on SVN Operator's
determination, in its sole discretion, of anticipated SVN Member demand to access an External Exchange Program or the Starwood Preferred Guest Program.

I'm not so concerned about the units they use for bulk banking, but let's rewrite this paragraph as it concerns SPG conversions only:

SVN Operator has the right, but not the obligation, to reserve a number of Floating Vacation Periods from time to time at any time thirty (30) days after the beginning of the Home Resort Fixed Priority Period, and any unreserved Vacation Period after the Home Resort Fixed Priority Period, based on SVN Operator's determination, in its sole discretion, of anticipated SVN Member demand to the Starwood Preferred Guest Program.

Boy did we give away the store on that one. Since Starwood permits SPG conversions very late in the usage year, there's nothing of any value left for them to rent and therefore I feel fairly certain they're taking full advantage of their headstart on the inventory. In fact, I think it may explain the following, among other things:

-- Why I've never been able to "float" my fixed week ownerships at the 10-month mark (the "2-month headstart owners get over non-owner SVN exchangers). And, I've spoken to many other owners who have had the same experience. Everyone I've ever spoken to about the 8-10 month "float period" at HRA and WSJ says it's a joke. If anyone on here has had a successful "owner float exchange," please feel free to tell me I'm wrong.

-- The availability of full-priced "SPG.com" 4th of July rentals at WKORV.

Although I signed the contract, I think it's very one-sided in Starwood's favor. What if they over-estimate the number of conversions? Who decides where the rentail income goes?

This is just another one of the "peel back the layers" items I've mentioned in previous posts. The issue is not necessarily reduced rental revenue at the resort (although it does come into play if they over-estimate). Giving Starwood a head start on prime inventory for the purpose of rental income to fund SPG conversions means less inventory available to the SVN-membership as a whole.

Is there a better way? Maybe not, given the way the club was set up. But, it certainly indicates the liberal SPG conversion process (4 and 5 star elite members can convert up to Oct 1 of the current usage year) may be a very nice perk for 4 and 5 star members, but it hurts everyone else.

Before I get jumped, I agree that 4 and 5 star members deserve extra perks. Heck, I get lots of them through my Hyatt and Continental statuses --- I even get an occassional cool upgrade as a lowly SPG gold member. And, I enjoy them as much as the next person. But, when I get upgraded, it's because a better room/first class seat was otherwise sitting empty. Nothing was taken from other customers/owners 11 months in advance. (Hope that analogy makes sense -- it's the best I can come up with.)

Was this a stupid move (allowing 4 and 5 star members to convert after all possible rental opportunities to recoup the costs of the conversion are gone) .... or a carefully calculated move to allow Starwood to maximize it's profit on SPG conversions:

An oceanview studio for July 3 - 10 commands $6019
An oceanview one-BR for July 3-10 command $10347

Let's just say SVO has to pay 3.5 cents/SP like everyone else. They collect $16K+ on a conversion that costs them less than $3000 to fund. Pretty good deal ... for them. Not so good for SVN members hoping to trade in that week.

Disclaimer -- This is a "what-if" scenario based on what the documents permit. I do not have any proof this is occuring. I just think we should be demanding full financial audits to determine just exactly where the money is going. As David has said .... follow the money .... follow the money. I'll add one more .... read your documents .... read your documents.

jarta said:

DanCali, ... If Starwood keeps all the rental income, wouldn't the rental income be $0?

If the rental is of a delinquent week, wouldn't any net rent over the delinquent MF and late fees be the property of the delinquent owner? ... eom

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jarta - Yes and yes...

On the other hand - what type of revenue sharing agreement is there? Why is it not spelled black on white?

Here are some extremely conservative assumptions on rental income:

5% vacancy rate at 60 days (given the bad economy argument this is probably more)
starwood rents only 20% of these (hotel occupancy rates can't be this low even in a recession)

So that's 1% of available villas get rented under the 60 day rule - or about 4 one BR units per night.

Assume an average rental rate of $200 per night per 1BR ($350 platinum season, $150 summer - sample rates from spg.com)

And I'll assume only 300 days per year in case I was overly aggressive somewhere above.

so under these conservative assumptions you have 4 units * $200 * 300 days so thats $240K per year. And if they rent 40 units per night, just add a zero... So how in the world does the HOA end up with only $40K? Unless you really think I was overly aggressive with my assumptions...

And then there is the issue raised by jerseygirl which I don't even know what to say of...

It's good to have someone defend Starwood from what may be unjust attacks. But I can't believe that all this doesn't seem fishy to you at all...

DanCali said:

And then there is the issue raised by jerseygirl which I don't even know what to say of...

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Say something ... anything ... please!

This is at least the second (if not the third or fourth) time I've brought it up and NO ONE else seems concerned. I feel like I'm over-compilcating it or something. Every single SVN member (even the 4 and 5 star elites) has a stake in this one. Possibly even the non-SVN members if inventory is not being properly segregated as some suspect.

Where's the outrage?!

Again, I'm not suggesting anything illegal is being done. But, if we're not demanding audits ... then we're all nuts!

OK - I'm on it! (Thinking...)

jerseygirl - I got your back!

jerseygirl, ... "But, if we're not demanding audits ... then we're all nuts!"

Then I guess I'm the only sane one on TUG. As I said earlier today, my request for the latest WKV annual financial report is going in as soon as I get back home.

Everyone else is just wringing their hands, misinterpreting documents and making wild guesses.

I'll pdf the latest WKV annual financial report (might be 2009) when I get it and post the pdf copy. Stay tuned.

In the meantime, it would be nice to see what Marriott and Hilton and Hyatt do with the rental income. If it's relatively the same for everyone, it may be industry standard procedure and not a cause of the higher assessments at Starwood resorts. ... eom

jarta said:

Everyone else is just wringing their hands, misinterpreting documents and making wild guesses.

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You might want to consider the fact that "everyone else" is not sharing what they're doing with you. Heck, some of us even have official conference calls! You're a little late to the party -- seem to be only recently coming around to the possibility that everything might not be rosy at SVO.

jarta said:

I'll pdf the latest WKV annual financial report (might be 2009) when I get it and post the pdf copy. Stay tuned.

Click to expand...

That will be helpful, thanks. Of course, a standard financial report will probably not answer the inventory assignment questions at the root of these questions, but it's a start. We need to know how much rental income was attributable to the HOA and to SVO on a resort-specific basis -- and how those figures were derived. Good luck getting that -- I truly mean that (no sarcasm whatsoever). I guess I'm just a little skeptical that a financial report will reveal the answers to the underlying questions (but, it's been about 30 years since I majored in Accounting --- and I'm just thinking of my own VERY LARGE company. We have all the financial reports you could ever want ... audited by the very best ... but unless you know the questions to ask, the answers are buried in the details not present in the reports themselves).

jarta said:

In the meantime, it would be nice to see what Marriott and Hilton and Hyatt do with the rental income. If it's relatively the same for everyone, it may be industry standard procedure and not a cause of the higher assessments at Starwood resorts. ... eom

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I'm done doing homework for others, but I think the reason no one is really concerned with what Marriott, Hilton and Hyatt are doing is because they don't have the same problems with out-of-control escalating maintenance fees. It's a matter of trust .... I didn't worry about Starwood's handling of the finances until the "recent unpleasantness." But, that's just me. As long as the following continues, I won't waste my time checking into things:

-- My Hyatt and Hilton maintenance fees only increase by amounts in line with the CPI

-- I recieve solicitations to run for the BOD, then full bios and position statements for those who choose to do so -- all of which is received on a timely basis.

-- Fully transparent information about resort finances .... quarterly newsletters keeping me abreast of resort conditions, changes, etc. (not monthly advertisements sent under the cover of newsletters!). Gasp -- ours are even resort-specific.

-- Contact information for board members.

-- I could go on, but I think I've made my point.

jarta said:

In the meantime, it would be nice to see what Marriott and Hilton and Hyatt do with the rental income. If it's relatively the same for everyone, it may be industry standard procedure and not a cause of the higher assessments at Starwood resorts.

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As far as I know, Marriott has a very straight forward approach with timeshare rental: Marriott only takes a certain number of the units and they pay the owners upfront. They may make a lot of money (the difference between what they get from renters and what they pay to the owners) in renting but it's not at owner's expense.

jerseygirl said:

Say something ... anything ... please!

This is at least the second (if not the third or fourth) time I've brought it up and NO ONE else seems concerned. I feel like I'm over-compilcating it or something. Every single SVN member (even the 4 and 5 star elites) has a stake in this one. Possibly even the non-SVN members if inventory is not being properly segregated as some suspect.

Where's the outrage?!

Again, I'm not suggesting anything illegal is being done. But, if we're not demanding audits ... then we're all nuts!

Click to expand...

Yes. As a non-SVN owner, I am very outraged about this. I believe Starwood has no justifiable right to preemptively select inventory for anticipated SPG conversions on behalf of SVN owners from a shared inventory pool belonging to all owners. This practice never existed during the creation of the deeds or CC&Rs which everyone agreed to. Since I am not eligible to join SVN, I never agreed to accept the SVN rules.

The audit we will ultimately need to do must go far deeper than the summaries we have now. We need all the detailed chronological line item transactions to prove whether or not the inventory management system is executed in the best interests of all owners according to the founding documents and the law. I suspect it is not.

l2trade, ... This is a serious question.

What are you talking about?

"I believe Starwood has no justifiable right to preemptively select inventory for anticipated SPG conversions on behalf of SVN owners from a shared inventory pool belonging to all owners."

What "anticipated SPG conversions?" SPG is short for Starwood Preferred Guest, a Starwood HOTEL term.

If you are against all internal trading systems, just say so. But, you cannot run any internal trading system without someone setting up a system of reserving unreserved weeks for other owners trading into the resorts. ... eom

SPG conversion = converting your week to Starpoints (hotel points)

jarta ... read post #102

Pit said:

jarta ... read post #102

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Probably won't help. :ignore:

Does someone have someone else's back? See post 105. ... eom

jarta said:

you cannot run any internal trading system without someone setting up a system of reserving unreserved weeks for other owners trading into the resorts.

Click to expand...

Sure you can.
If an owner does not :
1. convert to points, or,
2. request a trade (internal or external).

then, the inventory should remain available to the owner for a reservation request until the 60 day window.

As Starwood selects the offsetting inventory with item 2, they retain the discretion to dispose of it as they see fit. But, an allocation system is not required to accommodate internal exchanges. The inventory has either been released by an owner, or it has not.

Of course, this flies in the face of the owner reservation preference period. Therein lies the real problem with the internal exchange mechanism as it currently operates.

A resort owner should not be relegated to second class status because they did not make a reservation 8 months in advance.

The exchange concept is not, nor should be, complicated. Inventory for an exchange should be made available when the home resort owner decides they wish to go elsewhere. All the rest is designed to raid the system for the benefit of the operator.

The reason Marriott owners are generally happy is because Marriott has, thus far, adhered to this simple principle.

"-- The availability of full-priced "SPG.com" 4th of July rentals at WKORV."

Starwood can rent out the units it owns any way it wants to. There are Starwood owned units at WKORV. If it uses them for SPG rentals, it is not "premptively" taking them from any "owners pool." If that's what it is doing, it is merely renting units it owns and keeping the rent - just like any other owner at WKORV could do. ... eom

Fredm, "If an owner does not :
1. convert to points, or,
2. request a trade (internal or external).

then, the inventory should remain available to the owner for a reservation request until the 60 day window."

That's exactly what the SVN documents posted for WKV provide. See posts #79-85.

However, for its own units, Starwood can rent those units whenever and to whomever it wishes. And, apparently, that's what it does. So, rentals appear before the 60 day period.

People who post here in amazement that they can't trade in because the resort is full - yet Starwood is offering SPG rentals - just don't get it. They are Starwood owned units that Starwood has reserved at 12 months. Then Starwood rents them out - just like any other owner could do with the unit he/she has reserved. ... eom

jarta said:

Fredm, "If an owner does not :
1. convert to points, or,
2. request a trade (internal or external).

then, the inventory should remain available to the owner for a reservation request until the 60 day window."

That's exactly what the SVN documents posted for WKV provide. See posts #79-85.

However, for its own units, Starwood can rent those units whenever and to whomever it wishes. And, apparently, that's what it does. So, rentals appear before the 60 day period.

People who post here in amazement that they can't trade in because the resort is full - yet Starwood is offering SPG rentals - just don't get it. They are Starwood owned units that Starwood has reserved at 12 months. Then Starwood rents them out - just like any other owner could do with the unit he/she has reserved. ... eom

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Agreed. Starwood can dispose of its units as they see fit.
Again, the real problem is the owner reservation preference period.
The wheels fly off the milk wagon at that point.

Fredm, ... When Starwood lists its own units for rent to SPG members and others at full price, it is merely doing what TUG members do (like mariawolf renting her week 51 and week 52 at Harborside through Atlantis Family Fun or anyone else renting out their St. John week).

Both the TUG members who rent out their units and Starwood keep the full net rental. They give nothing back to the associations except the annual MF.

It's actually quite simple to understand and, IMO, only fair. I don't understand the implication that Starwood is "stealing" someone else's week when it rents out its own units. ... eom

"The wheels fly off the milk wagon at that point."

The reservation preference period for all who want to go to their home resort (12 months-8 months) is exactly the same whether someone is SVN or not-SVN.

At any point after 12 months out (and even before for fixed weeks - I think - I am not an II expert), any owner can deposit their owned week into II.

What do you mean by the "wheels flying off the milk wagon" when the home preference period ends? All that happens is the internal trading period begins to run so there is more competition for the remaining available weeks. That's bad? How so? ... eom

jarta said:

Fredm, ... When Starwood lists its own units for rent to SPG members and others at full price, it is merely doing what TUG members do (like mariawolf renting her week 51 and week 52 at Harborside through Atlantis Family Fun or anyone else renting out their St. John week).

Both the TUG members who rent out their units and Starwood keep the full net rental. They give nothing back to the associations except the annual MF.

It's actually quite simple to understand and, IMO, only fair. I don't understand the implication that Starwood is "stealing" someone else's week when it rents out its own units. ... eom

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My comments went to your statement :"you cannot run any internal trading system without someone setting up a system of reserving unreserved weeks for other owners trading into the resorts".

Yes, they can. They choose not to.
I do not dispute that they have the legal right to operate the exchange as they do. However, the mechanism provides Starwood the ability to skim, steal, appropriate, allocate, or what ever verb you wish to apply, inventory for their use.
In the process, home resort owners are shortchanged.

Granted, all operators cherry pick inventory when the owner converts to hotel points. The operator then "owns" the converted inventory. Fair enough. But, Starwood stands alone in appropriating inventory at its sole discretion when an exchange request is made.
Hence, what may be available at the 60 day window is wrung out.
Starwood has maximized its take.

At the bottom of it is a system not unlike what RCI has been doing by "anticipating" demand, and renting the prime inventory for its own benefit.

Fred, ... "However, the mechanism provides Starwood the ability to skim, steal, appropriate, allocate, or what ever verb you wish to apply, inventory for their use."

I agree the ability is there. It's a pretty serious allegation you make, though. And, it implies the complicity of the HOA board.

Do you have any proof that inventory is not deposited fairly within the assigned season when the II trade request is made? I haven't seen anyone post on TUG saying they deposited their Platinum week and Starwood deposited an out-of-season Gold or Silver week.

And, even more importantly, do you have any proof that Starwood is appropriating the II deposited inventory for Starwood's own use - as opposed to leaving it in the resort pool (until 60 days out) so that any owner at the resort can reserve it? ... eom

jarta said:

"The wheels fly off the milk wagon at that point."

The reservation preference period for all who want to go to their home resort (12 months-8 months) is exactly the same whether someone is SVN or not-SVN.


Yes. So?

At any point after 12 months out (and even before for fixed weeks - I think - I am not an II expert), any owner can deposit their owned week into II.

Any owner can request an exchange using a week "value" preassigned by Starwood. Not an actual week. This affords Starwood the latitude to compensate I.I. with a week in the season owned, selected at its sole discretion, after the fact.

What do you mean by the "wheels flying off the milk wagon" when the home preference period ends? All that happens is the internal trading period begins to run so there is more competition for the remaining available weeks. That's bad? How so? ... eom

Click to expand...

As mentioned, the home resort owner loses primary reservation rights. In so doing, control over the reservation calendar has been subverted. Starwood has the "right" to do it, but owners are increasingly becoming aware of its implications.
This is the singular source of all the skepticism. Rentals or otherwise.

If Starwood actually permitted an owner to control the week deposited for exchange, there would not be an issue. There are 52 weeks to be accounted for. But, when Starwood selects the weeks surrendered, the weeks it "anticipates" internal demand for, AND cherry picks the weeks it wishes to compensate for point conversions, it should not surprise anyone that Starwood has appropriated prime inventory for its purposes.

Again, I do not believe this is being accomplished illegally. It is how the system is constructed, per the Documents.

Does this tangentially weaken the exchange process, and result in lower rental revenues to the HOA? I think so.

jarta said:

Fred, ... "However, the mechanism provides Starwood the ability to skim, steal, appropriate, allocate, or what ever verb you wish to apply, inventory for their use."

I agree the ability is there. It's a pretty serious allegation you make, though. And, it implies the complicity of the HOA board.

Do you have any proof that inventory is not deposited fairly within the assigned season when the II trade request is made? I haven't seen anyone post on TUG saying they deposited their Platinum week and Starwood deposited an out-of-season Gold or Silver week.

And, even more importantly, do you have any proof that Starwood is appropriating the II deposited inventory for Starwood's own use - as opposed to leaving it in the resort pool (until 60 days out) so that any owner at the resort can reserve it? ... eom

Click to expand...

Jarta,

It is not a serious allegation.
It is the way the system is constructed. That's all.

I have not ever stated, or implied, that Starwood is depositing out of season weeks. Simply that it has preassigned seasonal values to exchange requests.
I have, from the very beginning, said that Starwood is within its rights to do so. But, it enables them to control which weeks it actually surrenders. There is NO QUESTION that this practice weakens the deposit clout of the best weeks in a given season. Why?
Because the best weeks do not get deposited. If they did, there would be no reason whatsoever to implement such a system.
Again, Starwood has the right to do it. I simply recognize the motive.

Where seasonality is not involved, as with Hawaii, you can bet the ranch that an ocean front unit will not be deposited. It will be retained, irrespective of the date. Again, who benefits?

It is the system. There is no reason to implement a system such as this unless it is for the benefit of the operator. It is far simpler, completely transparent, requiring less admin overhead, etc., to allow owners to control the inventory. The mechanism is designed to permit Starwood to milk the deal. That's not a serious accusation.

Starwood understands it.
I.I. understands it.
I understand it.
Most who know how the machinery operates understand it.
They just don't like it.

jarta said:

Does someone have someone else's back? See post 105. ... eom

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No, I just needed to sleep last night. I can't help it if other folks easily understand and agree with each other's posts. I just read your question when I woke up this morning. I respect everyone is entitled to their own opinion. Please respect mine. In your post #110, I feel you are twisting and misrepresenting my opinions again. IMHO, others pointed out the obvious by answering for me.

To be clear, again:
1. I NEVER took issue with Starwood making a reservation for a deeded week Starwood actually OWNS.

2. I NEVER took issue with Starwood making a reservation AFTER an owner called and converted their weeks to points.

3. I ABSOLUTELY take issue with Starwood grabbing the best weeks for ANTICIPATED point conversions, far in advance, on BEHALF of what they think an owner MIGHT DECIDE to do.

4. I ABSOLUTELY take issue with Starwood grabbing reservations from ALL owner inventory, to support a program NOT available to ALL owners. And, by grabbing reservations, I mean that Starwood does NOT OWN the week and the SVN member has not yet called or taken any explicit action to relinquish said week.

5. No. I am NOT AGAINST all internal trading systems.