Wife's good question....

So my wife asked me a question today that I couldn't answer as we discuss buying another Marriott week on the resale market. I hope you gurus have some insight. What happens to our weeks and/or points if Marriott files bankruptcy?

I froze when she asked me this question and don't know. Can someone please help me with an answer.

Thanks

Bill

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The weeks that are deeded are sheltered from bankruptcy I believe. The destination points I believe are in a trust that is also sheltered. Not to say that a bankruptcy couldn't cause chaos, but I think the properties either directly owned by owners or in Trust would be sheltered. Maybe someone else can add to this conversation or correct me if I'm mistaken.


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CrackCorn said:

So my wife asked me a question today that I couldn't answer as we discuss buying another Marriott week on the resale market. I hope you gurus have some insight. What happens to our weeks and/or points if Marriott files bankruptcy?

I froze when she asked me this question and don't know. Can someone please help me with an answer.

Thanks

Bill

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My advice when it comes to timeshares is don't spend any money you can't afford to lose.

I wouldn't worry about Marriott

Well some of us already made that decision and are owners, like the poster. But yes, I wouldn't worry about Marriott. I am a little unsure about the movement into the Destination Points program - I enrolled my three weeks and am having some remorse about the future of timeshare vacations because it allows them to oversell their capacity. And it's complicated - I don't know if I want to think that hard about reserving lodging.


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I don't think I'd lose much sleep over Marriott's filing BK. Buying resale insulates you from much of the downside risk anyway. And as Ron said, Timeshare is not investment. Don't spend money you can't afford to lose, but if you enjoy the time spent enjoying the timeshares, it's money well spent.

Jim

Marriott manages the resorts - they don't "own" them, although they may own a small percentage.

So if Marriott went bankrupt, another management company would buy them out and/or the BOD's at each resort would hire new management companies.

Look what just happened with Starwood - they didn't go bankrupt, but they sold out, and now Interval Leisure Group is the new owner of the management company, and Starwood is gone. We all survived.

Thanks for all the replies. I realize/know the money that is spent on a timeshare is not an investment for financial gain. We purchased our timeshare as an investment in 'family time' and it has already paid off in our experiences with it. I appreciate your feedback.

Bill

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Marriott Vacations Worldwide name would likely survive a bankruptcy. They just restructure their debt but in many cases the company lives on. IN the event of liquidation, the courts would hold an auction to sell off their assets. One of those assets is the management contracts that MVC has with their properties. Your property would end up being managed by someone else. In this case, you could lose the ability to reserve within the network and DC owners may lose the ability to exchange in the MVC Exchange Company, but could continue to own weeks held in the trust. As a weeks owner, you would always be able to reserve a week in the season you own at the resort you own.

I agree with Ron about "don't spend any money you're not willing to lose."

I firmly believe that timeshares (and a few other things) should only be purchased with extra cash and in full. I don't think anyone should finance a timeshare purchase - that's just a disaster waiting to happen IMO.

CrackCorn said:

What happens to our weeks and/or points if Marriott files bankruptcy?

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Just want to throw this out there but there are lots of companies that if they went bankrupt might affect your life. Last year my health insurance company went bankrupt! It was extremely frustrating scrambling to find new insurance, new doctors, new pharmacy, new lab... all the while trying to maintain scripts etc. I can't even imagine what it would have been like if we had more serious health conditions. Point is: have an emergency savings fund.

No Problem

I own at a TS whose figurehead company went bankrupt (Consolidated resorts). When the dust settled, the owners learned that Consolidated (who built timeshares and sold them - - the developer) went bankrupt but the group managing the resorts (the management company) were separate. So it had no effect on the owners. We kept paying our MF, using our weeks and nothing changed. The only thing that slightly changed was Consolidated either owned or had claim to some units at our TS that were used for sales purposes. Those reverted back to the Vacation Club.

Another example is Sunterra. They went bankrupt and were bought by Diamond. The owners continued to use their resorts and pay their MFs.

Another way to look at this is "which Marriott would be going bankrupt"? If Marriott Hotels ? It doesn't affect the timeshares. Marriott food services? No effect. Marriott timeshares? Then it affects people involved with the development. But the management company part is separate and is running a money printing press - - they charge a maintenance fee and they pocket either 10 or 15% of everything they spend. It would be very hard for them to go bankrupt. But if they did, then the Vacation Clubs could hire another managment company to provide mgmt services.

I think that the chance that Marriott timeshares (the part that you own and would be affected by) is the same as the chance of another major ice age during our life time.

VegasBella said:

I agree with Ron about "don't spend any money you're not willing to lose."

I firmly believe that timeshares (and a few other things) should only be purchased with extra cash and in full. I don't think anyone should finance a timeshare purchase - that's just a disaster waiting to happen IMO.


Just want to throw this out there but there are lots of companies that if they went bankrupt might affect your life. Last year my health insurance company went bankrupt! It was extremely frustrating scrambling to find new insurance, new doctors, new pharmacy, new lab... all the while trying to maintain scripts etc. I can't even imagine what it would have been like if we had more serious health conditions. Point is: have an emergency savings fund.

Click to expand...

Thanks for your input everyone. I am feeling more confident in our decision to buy another week because our strategy is in line with what people are sharing (like the ones you mentioned and other posts in this forum).

One question that I have is the comment you made about a disaster waiting to happen. I don't understand the disaster you refer to. What disasters loom for prospective owners other than the obvious one, default on the loan.

Awesome answers! Thank you, I will just have my wife read this for the answer to her question.

Bill

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