No Exchanges for Resales After 2010?

This topic was started under the "Interval International" thread but is signifcant enough to warrant its own thread.

Original post:

I attended an Owner's Presentation at Ko Olina yesterday. We were told that when Marriott withdraws from Interval International in 2010, that only owners who purchased directly from Marriott would be able to exchange their intervals. For those that purchased on the secondary market, Marriott guarantees that they can stay at their home resort but that is it.

Is this true?

Reply to littlestar's comment: "Let me guess, it was a salesman that said this, right?"

It's true that this came from the salesman making the Owner's Presentation. I spoke with another salesperson today. He had the same story as the first about Marriott pulling out of II in 2010 and that owners who purchased on the secondary market would not be able to use the "proprietary" new exchange system.

He said that one of the reasons was that Marriott wanted the exchange fees now being paid to Interval. Another reason was to "encourage" people to buy directly from Marriott.

He said that Marriott owners would still be able to exchange through II but that non-Marriott owners (HGVC, Starwood, etc.) would be able to see any available Marriott inventory as soon as it was listed.

I argued that it would diminish the resale value of Marriott timeshares but he said that after 7 years most properties would have increased significantly in value and even if you had to pay Marriott 40% to buy it back, you would still be ahead of the game.

Reply to swingforthefence's question: "Do you have a name of the person who said Marriott would withdraw from Interval in 2010?"

I have the salesman's name. I don't think I should post it so if you want to PM me, I will provide it to you.

I'm interested in purchasing another resale but am hesitant now.

Thanks in advance for your comments,

Dewnay

Dave M., are you reading this?

I hope TUGers with friends in high places are checking this one out? And, if anything, I would hope that folks that buy resale before 2010 are unaffected by the change.

Charles

Another TUGger just returned from Timberlodge where she was told that Marriott will never go to an internal system...

Salespeople don't get a commission on resales. Of course they are going to say that resales would be shut out of the new system.

This seems ridiculous to me, since one of the benefits marriott always talks about is exchanging to other Marriott properties - now anyone who buys resale must exchange through II instead? How can that help even owners who bought from Marriott? Sounds like a sales ploy to me!

Rumors, rumors, rumors!

I attended an owner's meeting at Horizons Branson on Wednesday and asked the manager directly if MVCI has any plans to leave II and do internal exchanges in-house and he laughed and said "No."

Believe whatever you want!

"Garbage", is all I can say.

I'll repeat most of what I posted in the other thread:

Marriott is NOT planning to withdraw from II. What Marriott IS doing is developing an internal trading system and, if all goes well in the development process, will take that piece away from II - probably in about three years. All Marriott external trades will still be handled through II.

This has been confirmed by knowledgeable Marriott personnel - not resort salespeople! - on numerous occasions and has been discussed here quite often.

Despite the fact that Marriott salespeople are generally among the most honest in the business, believing things they say about bad things that will or might happen if you buy resale is at your own risk. Unless, of course, of course, you get it in writing with a written promise that you can revoke your sale if it doesn't happen.

Dave M said:

Marriott is NOT planning to withdraw from II. What Marriott IS doing is developing an internal trading system and, if all goes well in the development process, will take that piece away from II - probably in about three years. All Marriott external trades will still be handled through II.

This has been confirmed by knowledgeable Marriott personnel - not resort salespeople! - on numerous occasions and has been discussed here quite often.

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Dave, yes, but the key question is whether resale owners would have access to the new internal system. If not, then they probably would have very limited access to other Marriott properties, because most "good" exchanges would be done within the internal system. The answer to this question could affect resale prices, a lot.

I find it hard to believe that resale owners would be out of a internal exchange system particularly those that purchased resale prior to the implementation of a new system. This would open Marriott to lawsuits and extremely bad publicity. They coud however make this a requirement of all new timeshares purchased after the implementation of the internal system. Owners who purchased pior to the implementation would be grandfathered into the system.

That's great news if true it means it eliminates Marriott from my list of potential next resale timeshare purchases. Starwood/Hilton/fairfield here I come

Marriott the new Wastegate? Say it's not so

I thought Marriott was above the petty games and lies most developers of timeshare deal in. In fact Marriott was one of the few that let the resorts sell themselves. But the recent actions involving rentals, the ongoing ROFR nonsense, the history of "tiring" of resorts and walking away and now the innuendo's from sales all sound exactly like every other timeshare hustler. Too bad.

As for can they do an internal exchange that shuts out II - yes. I'm only surprised they haven't done it yet. Will it matter to those trading OUT of the Marriott system? No. If you are trading within the system I'd sure like to know how they could explain to the owners paying the bills and annual fees why what they own isn't as good as the next owners. What possible impact does the purchase method have on the ongoing use?

If they stoop to this type of sleaze they are no better than Wastgate. Or maybe that makes Wastegate as good as Marriott (lord knows the King already thinks so). Either way, not good.

As for possible resale limitations, again, "Garbage!

Think about it. Marriott really needs a decent resale system. It has one now that is adequately supported by a demand for the product combined with its ROFR option (at most properties). That resale system makes it easy for Marriott to sell weeks. Marriott's best customers are those who already own Marriotts, many of whom (including me) buy more from Marriott. We know that buying from Marriott early in the selling phase for a particular resort has very little long-term economic risk, because resale prices tend to rise on most Marriott properties over time to and above initial selling prices. (I'm not necessarily advocating purchasing from Marriott.)

If the bottom drops out of the resale market because Marriott tips the balance with a drastic change of the rules, that wouldn't be good for sales.

Also, does it really make sense that Marriott might three years from now take away the priority from existing owners? I could be wrong, but I don't think there is any chance of that. I suppose it's possible that Marriott could anno0unce, "For resales from this day forward...", but even that seems remote.

Lastly, note who is making such statements: Salespeople, whose #1 objective is to get prospects to buy from Marriott, not on the resale market. Also, note ArBravesFan's post. If the rumor were really true, wouldn't you think all key resort people would have the same info?

As usual- thanks Dave!!

The bottom line is...well, the bottom line- Marriott will do what is best for Marriott. Marriott sells its timeshares as an investment. Whether or not any timeshare is an "investment" is, of course, another matter, but historically Marriott is one of the few companies where, at least, early purchasers can make that claim. Whether or not ROFR supports it or not (which I personally feel it helps but I know others disagree), the strength of the resale market is very good for business. Marriott won't undermine than because a rapid sudden devaluation of the properties in the resale market would likely generate a lot of notice. They don't want disgruntled owners making a lot of noise; adverse publicity is bad for sales.

Marriott will be adding several new properties over the next several years. In order to charge what they do, owners have to be convinced that their value will be retained and appreciate over time.

If you listen carefully to what the salespeople say and rethink the exact words, sometimes they have a different meaning than what they first appear to. I know in my numerous conversations I was sure they meant something else (which is what I am sure they meant to convey), while masking the real truth. So they may just be fabricating what the new system will be, or they may be skewing the conversation so that it appears to be one way when the details are really unknown.

I own a Marriott resale. Lack of internal trades would upset me for sure however that would not make me buy from Marriott direct. Why would Marriott would want to upset thousands of resale owners?

timeos2

What do you mean about tiring resorts and walking away? (I don't know how to quote from your post.) My understanding was that Marriott has only ever dropped management of two resorts in Hilton Head that they did not build and where the owners declined additional fees to upgrade the resort. Marriott then felt they could not keep the resorts up to the Marriott quality. Is this not true? Would be interested if this is not so.

My opinion about this thread is that it is still all a rumor. Also Marriott is a public company and trying to maintain/retain value for shareholders as well as their timeshare owners. I don't think they would do something that would so radically damage their timeshare position since it would also decrease sales and lower their share value. If you look at what Marriott is doing much of their profit comes from the loans they are generating when selling timeshare (13-14%) so they really have an interest in keeping the value in their timeshare operation and keeping the values up so people will buy and finance the purchase. While these high rates seem bad they also help current owners since Marriott has an incentive to keep them happy.

Different classes of Marriott timeshares?

I guess my concern with Marriott is the quickly excalating price on new TS compared to the lowest resale values on some of the others. When they can grab a MMC for ROFR $8000 and resell it onsite for $20,000 what will the ROFR be on Marco when it's complete?

If direct prices range from $20k to $110k within the Marriott 'family' and private resale prices following a similar range but at lower prices, is it possible that Marriott will someday say it takes 4 MFV to get 1 MOC for example. II might even follow suit, once their arrangement with MAR changes.

Bargain hunters beware.

Brian

Here are some of my thoughts on the topic.

First, I believe the primary driver for Marriott creating an internal exchange system is to improve their product for SALES. They can certainly make some additional revenue if they create an internal exchange system and take the revenue away from II. But, I do not believe that revenue stream is the primary motivator for this internal exchange system. All of their hotel brand competitors have internal, points based reservation systems. In my view, Marriott needs to move toward that type of system to be competitive long term.

Second, the current weeks based system is a barrier to moving to such a points based system. If they were to move toward a deeded trust where all points are committed to a reservation system, then weeks must be converted into the point system. My guess is that Marriott will create a point system and allow customers to convert their weeks into it. If Marriott is like every other timeshare developer, they will require a small purchase from the developer to make such a conversion. This new system will have a lot of benefits that are really appealing to owners.

The flaw in this model is that it will not have critical mass of customers in it to work well. This type of point system only works if there is a singificant conversion rate at ALL resorts in the system. So, they need to have a really attractive offer to stimulate mass conversions. This will make or break the system.

Third, if Marriott were to move to such a new system, then all fixed/floating weeks customers would remain in their current system and would not have access to it unless they convert. This would be true for ALL customers even if they purchased directly from Marriott.

Fourth, all new Marriott's after a certain point would be sold only in the new system. To fully access full benefits, you would need to purchase from Marriott or upgrade your current weeks.

Fifth, to accommodate all Marriott owners, they would probably offer just an internal weeks exchange program for a nominal fee while trying to upgrade people into the new system.

Sixth, Marriott would most likely grandfather people into some type of program if they change it dramatically from how it works today. All other timeshare developers do that. I don't see it being any different with Marriott.
So, perhaps, Marriott would allow a simple week for week exchange with basic trading power requirements if you dont joint the point system. If you want more, you need to convert.

It will be interesting to see what Marriott does.

pwrshift said:

I guess my concern with Marriott is the quickly excalating price on new TS compared to the lowest resale values on some of the others. When they can grab a MMC for ROFR $8000 and resell it onsite for $20,000 what will the ROFR be on Marco when it's complete?

If direct prices range from $20k to $110k within the Marriott 'family' and private resale prices following a similar range but at lower prices, is it possible that Marriott will someday say it takes 4 MFV to get 1 MOC for example. II might even follow suit, once their arrangement with MAR changes.

Bargain hunters beware.

Brian

Click to expand...

I doubt that will ever happen, either within Marriott's internal system or within II. As far as II is concerned, you already have vastly inequitable trades; the prospect of getting the great deal is good for business. Although most trades aren't those amazing ones, it is the hope of getting one that keeps people coming back.

As for Marriott- Marriott's biggest selling point is the ability to trade to other locations. Marriott doesn't make a distinction between properties. To tout one by making it necessary to trade 4 weeks at another, as you suggested, would be to denigrate the other. Their biggest selling point is being able to trade a week one place for a week's stay at another. If they were to require several weeks stay to trade from one place to some others, then it would be telling some buyers that their week had little value and would only get them a vacation once every few years if they wanted to go elsewhere. Marriott has based its business on being a week based system and I don't think it is going to make such radical changes.

What they will ultimately do with different season or size exchanges will be where I think we may see some big changes. I think there is a lot of grey area there for them to try to equalize, at least somewhat, different property values, by giving increased exchange power to high cost properties. For example, Marco Plat. weeks or Maui weeks, esp. in the new towers, may have such good value that smaller units can get bigger units elsewhere even far out and, comversely, weaker weeks (whether less desirable locations and/or seasons) will have much less chance of good trades until very close to the travel date. The days of bronze Summit week lock-offs nabbing 2 BR's in Hawaii, Aruba, ski weeks, etc. at 59 days may land up being a thing of the past; on the other hand, who knows...Marriott will still need to exchange units which are either deposited late or slipped through the exchange system, because they will still make more money from exchange fees and resort purchases from excahngers then by letting them sit fallow.

Dave M said:

If the bottom drops out of the resale market because Marriott tips the balance with a drastic change of the rules, that wouldn't be good for sales.

Also, does it really make sense that Marriott might three years from now take away the priority from existing owners? I could be wrong, but I don't think there is any chance of that. I suppose it's possible that Marriott could anno0unce, "For resales from this day forward...", but even that seems remote.

Click to expand...

Dave, I see what you're saying, and I agree that Marriott would be stupid not to let resale owners be part of the new internal program at least initially, however...

Starwood Vacation Ownership has recently gone to new heights to irritate their owners, with the changes to their "elite" system for multiple week owners. And, they are apparently discontinuing building "mandatory" resorts so that future resale owners will not have access to their internal trading system. So here's an example of a timeshare developer that is clearly placing greed above customer service.

On the other hand, Hilton Grand Vacation Club gives resale owners all the same privileges as those who purchase direct, including their internal points system, so here's an example of a company valuing all owners.

It will certainly be interesting to see which direction Marriott chooses...

No matter what Marriott ultimately does, there will be some way that they determine what equates to an equal trade. It could be done one for one, based on rental rates like Redweek is trying to do, or based on some hidden trading power formula like most exchange companies. It really doesn't matter.

What matters is that smart timesharers will figure out the loopholes and will exploit them. Right now, many of us buy cheap traders with low maintenance fees and get fantastic Marriott's for bargain basement prices. With Marriott moving to an internal system, it will make it harder to trade into a great Marriott without having a Marriott. But, it won't be impossible. The game will simply shift to which Marriott to own.

And, we will learn new and improved loopholes which we will all be able to learn and to capitalize on. That's the way it works. I can't wait to see what they will do and what our response will be.

Don't believe it.

Don't believe this goofy rumor.
Here's why:
1. Marriott NEVER announces future system modifications. Too many variables along the way make accurate reporting impossible. Most "ideas" being considered never materialize into program substance.

2. Any program addition, or modification, will be in writing BEFORE it is announced.

3. Resort based personnel are the last to know of actual changes. Sales personnel are the last at the resort to be informed. Usually, at a Saturday morning sales meeting, the day it becomes effective. This is done precisely to avoid sales reps heating up the issue.

Anyone in the field organization who makes statements about futures can be easily challenged. Simply ask for the written basis of the statement. If it cannot be produced, its hype. Period.

The use of FUD (fear, uncertainty and doubt) is the oldest sales objection handler in existence. Witness the reaction here to a sales based and originated rumor.

Build it, use it up, leave it

tlwmkw said:

What do you mean about tiring resorts and walking away? (I don't know how to quote from your post.) My understanding was that Marriott has only ever dropped management of two resorts in Hilton Head that they did not build and where the owners declined additional fees to upgrade the resort. Marriott then felt they could not keep the resorts up to the Marriott quality. Is this not true? Would be interested if this is not so.

Click to expand...

There have been at least a half dozen resorts - some that Marriott at least helped buid and definitely managed - that Marriott has walked away from claiming that they couldn't meet standards. My question is if they were the management then how did THEY let them get to that point? Of course they have no answer.

It is simply the same philosophy they (and many other hotel chains) have used for years. Build a new hotel, brand it a Marriott (or Holiday Inn or Hilton or whatever top tier brand). 10-15 years later quietly terminate the franchise and let it re-brand as a second tier (Quality Inn, Ramada, etc). 5 or ten years later it either drops to a "Bills Roadside Inn" or gets a fresh infusion of capital and re-brands again. But Marriott builds a new one a short ways away and eventually the pattern repeats itself. it would appear that they have the same idea about timeshares based on the results to date. If I owned an older Marriott - even if they built it - I'd be worried as the resort ages that it may be cut loose. History says it will happen.

timeos2 said:

There have been at least a half dozen resorts - some that Marriott at least helped buid and definitely managed - that Marriott has walked away from claiming that they couldn't meet standards. My question is if they were the management then how did THEY let them get to that point? Of course they have no answer.

It is simply the same philosophy they (and many other hotel chains) have used for years. Build a new hotel, brand it a Marriott (or Holiday Inn or Hilton or whatever top tier brand). 10-15 years later quietly terminate the franchise and let it re-brand as a second tier (Quality Inn, Ramada, etc). 5 or ten years later it either drops to a "Bills Roadside Inn" or gets a fresh infusion of capital and re-brands again. But Marriott builds a new one a short ways away and eventually the pattern repeats itself. it would appear that they have the same idea about timeshares based on the results to date. If I owned an older Marriott - even if they built it - I'd be worried as the resort ages that it may be cut loose. History says it will happen.

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I think any future purchases we make will only be at resorts we plan on using on a regular basis. So even if something does get cut loose, it will be where I want to go. The recent Starwood changes are really sad - it makes me think about the 70's leisure suit spooky guy stuff. Hopefully Marriott doesn't follow the same path when they make their changes. At least Hilton, Hyatt, and Disney treat their owners, whether they be developer or resale, with class. Disney has no differences at all for resale buyers (even if you only buy 25 points resale - you still get treated the same as someone that buys 500 points from Disney when it comes to exchanging internally).

timeos2 said:

There have been at least a half dozen resorts - some that Marriott at least helped buid and definitely managed - that Marriott has walked away from claiming that they couldn't meet standards. My question is if they were the management then how did THEY let them get to that point? Of course they have no answer.

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Please name those resorts.

timeos2 said:

It is simply the same philosophy they (and many other hotel chains) have used for years. Build a new hotel, brand it a Marriott (or Holiday Inn or Hilton or whatever top tier brand). 10-15 years later quietly terminate the franchise and let it re-brand as a second tier (Quality Inn, Ramada, etc). 5 or ten years later it either drops to a "Bills Roadside Inn" or gets a fresh infusion of capital and re-brands again. But Marriott builds a new one a short ways away and eventually the pattern repeats itself. it would appear that they have the same idea about timeshares based on the results to date. If I owned an older Marriott - even if they built it - I'd be worried as the resort ages that it may be cut loose. History says it will happen.

Click to expand...

As to hotels, Marriott is a hotel management company, not necessarily a hotel builder. We don't always know why marriott discontinues management of a given hotel. Often it is decided buy the actuall owner of the hotel.

swing4thefence said:

Please name those resorts.

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For starters, Spicebush, Swallowtail and a group of several small timeshares (e.g., Night Heron) in Hilton Head. Add Paradise Island Beach Club in the Bahamas to the list. Like those already listed, one can easily argue whether Marriott or the owners were responsible for the debacle involving the individual timeshares that make up Streamside, but that unhappy episode was played out on this forum in several lengthy threads, including this one. Aspen and Cedar are the Streamside timeshares that are no longer designated as Marriotts.

In all cases, the lack of amenities that most Marriott owners have come to expect at a Marriott timeshare and/or the lack of keeping the property at standards acceptable to Marriott led to the eventual demise of each property as a "Marriott" property.

swing4thefence said:

Please name those resorts.



As to hotels, Marriott is a hotel management company, not necessarily a hotel builder. We don't always know why marriott discontinues management of a given hotel. Often it is decided buy the actuall owner of the hotel.

Click to expand...

If I remembered the names I would have listed them. I'll be lucky to even remember the areas. I think two where on the east coast - Myrtle Beach? - anyway they were on or very near the ocean. One in Fl also ocean. Then there were 3 or even four in the mountains - Colorado? - that ended up being operated by VRI. Someone here must now the actual resort names but, not owning there, I only remember the cries of owners when it occurred. Now most seem to think they are better off without Marriott - they may be right.