Change in SVO policy regarding upgrade/retro

I was just informed by an SVO representative that effective today you may upgrade but you may not retro any mainland unit unless you spend a minimum amount of $40,000.00 for Hawaii/Caribbean sale or $20,000.00 for a mainland sale.

In other words, the possibility of upgrading a resale unit (by spending something around $10,000) and retroing another resale unit with the upgrade has now been eliminated. You have to dish out a minimum of $20K for retroing any resale unit, period.

One would expect that with the economy the way it is, SVO would try to provide more options to people to spend their money with SVO. Instead, they seem to be doing the opposite. But hey, they know their business better than we do, right?

Oh well. Honestly, SVN is looking less and less attractive and II is looking more attractive anyway. Why?

1) Only platinum owners are given a decent number of SOs to trade with. I wouldn't buy a gold or silver unit, resale or otherwise, unless I wanted to use it.

2) As more voluntary resorts trade hands, it will become more difficult for SVNers to trade into those resorts because those units are booted out of SVN. So if I want to get into WMH or SDO, I'll have just as good, or perhaps even better chance, of getting in with II.

3) In SVO, a 1 bdrm gold owner at WMH or WKV has ZERO chance of getting a 2 bdrm in WKORV because Hawaii has stupidly been coded as platinum all year. But in II, they have a pretty good chance of getting a 1 or even a 2 bdrm in exchange for a 1 bdrm gold.

4) SVO just invited a whole bunch of new owners into SVN, which means SVNer's chances of getting into the major 2 (WSJ or HRA) resorts will be even more diminished. All other resorts can be exchanged into pretty easily via II, especially in low/shoulder season.

5) SVO has stalled on new developments. I've only been in the system for 3 years and I'm already feeling claustrophic. In a few years, I'll likely do a direct exchange with a Marriott owner or exchange into another system via II because I've exhausted all the places I want to see in SVN.

LisaRex said:

2) As more voluntary resorts trade hands, it will become more difficult for SVNers to trade into those resorts because those units are booted out of SVN. So if I want to get into WMH or SDO, I'll have just as good, or perhaps even better chance, of getting in with II.

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As time goes on, this will become more and more true.
Starwood is shooting themselves in the foot by not exercising a ROFR or instituting a 'buy-back' program

It is, to me, even more egregious that they create "back doors" for people to requalify resorts on their march to 5* and then, with no warning, change the rules. How many people have started the process, only to be shot down before completion?

The good news is that the properties are wonderful. I agree that it is remarkable that they have done this in the current economy, when all other businesses are jumping thru hoops to gain business. My wife and I began discussing an Alaska cruise tonight on a major, luxury cruise line. Free airfare, free excursions, and 2 for the price of 1. Starwood's answer - screw you!

Glad I love going to Kierland!

GrayFal said:

Starwood is shooting themselves in the foot by not exercising a ROFR or instituting a 'buy-back' program

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...or just dispensing with this ridiculous and confusing "mandatory vs. resale" distinction altogether and simply allowing all SVO owners to use SVN. They aren't making a dime on all these resale transactions and the more they push resale owners into II, the less of a selling point SVN is. If they allowed everyone in, they could collect the $109 SVN fee from everyone!

nilias said:

I was just informed by an SVO representative that effective today you may upgrade but you may not retro any mainland unit unless you spend a minimum amount of $40,000.00 for Hawaii/Caribbean sale or $20,000.00 for a mainland sale.

In other words, the possibility of upgrading a resale unit (by spending something around $10,000) and retroing another resale unit with the upgrade has now been eliminated. You have to dish out a minimum of $20K for retroing any resale unit, period.

One would expect that with the economy the way it is, SVO would try to provide more options to people to spend their money with SVO. Instead, they seem to be doing the opposite. But hey, they know their business better than we do, right?

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Are you working with an experienced rep who specifically told you that the rules had changed? Your first paragraph is NO change to the policy that they have always had - a retro has always required the $20K/$40K purchase.

Were you told that 1.) they no longer allow upgrades, 2.) that they no longer allow retros with upgrades, or 3.) that you have to spend $20K/40K "new" money to reto with upgrade?

What you've stated doesn't sound like a departure in existing policy, but maybe an inexperienced or "sly" sales rep attempting to get you to spend more money. Could you please elaborate?

-tim

Yes, the 20k/40k rule has been in place for some time (it's been at least two years since I first ran into it).

tlpnet said:

Are you working with an experienced rep who specifically told you that the rules had changed? Your first paragraph is NO change to the policy that they have always had - a retro has always required the $20K/$40K purchase.

We you told that 1.) they no longer allow upgrades, 2.) that they no longer allow retros with upgrades, or 3.) that you have to spend $20K/40K "new" money to reto with upgrade?

What you've stated doesn't sound like a departure in policy, but maybe an experienced or "sly" sales rep attempting to get you to spend more money. Could you please elaborate?

-tim

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Yes, I am working with an experienced rep who knows exactly what she's saying.

I agree that the $20K/$40K rule has been in effect for sometime. What has changed, however, is that you cannot now spend about $10K to upgrade a resale unit (using credit for the original developer price for that unit) while retroing another resale unit.

For example, I recently upgraded a 1BR SVV resale unit to a 2BR SVV unit while retroing a Harborside resale unit with the upgrade. Since the 1BR SVV was originally sold for $14.9K by the developer, SVO gave me credit for that amount which was applied toward the purchase price of $25.9K for the 2BR SVV unit. Thus, I incurred an out-of-pocket expense of only $11K to do the upgrade/retro. This type of transaction is not allowed any more; one has to spend at least $20K toward any sort of retro transaction.

I hope this clears up the confusion.

I think what may have changed is that Starwood is no longer allowing a retro to be rolled into an upgrade. I say may because I have no experience using that way to retro a non-developer purchase. I can remember people talking about trying it, but I have no clear recollection of anyone announcing they actually retroed a non-developer purchase into the upgrade (i.e., making a floating week fixed).

I do remember someone saying that - as part of the upgrade - the week upgraded was itself taken back into the SVO system. It seems that occurs automatically.

Otherwise, I agree that if you wanted to retro a non-developer week you had to spend $40K or more with Starwood at Hawaii or "the Caribbean" or $20K elsewhere for a new week's use. Lagunamar has always qualified as not Caribbean so I used 2 Lagunamar $21K purchases to retro 2 non-developer purchases.

But, stop a moment and think. If, on a smaller scale, a bank gives a free toaster for buying a CD and you do not take advantage of the offer to buy the CD, whose fault is it that when you go finally decide to buy the CD and the offer has expired that you don't get the toaster? Sometimes opportunity only knocks once.

Sounds like a failure to communicate, though. ... eom

nilias, ... I stand corrected. Guess they won't let you do it twice. (I was writing when you made the last post.) ... eom

nilias said:

Yes, I am working with an experienced rep who knows exactly what she's saying.

I agree that the $20K/$40K rule has been in effect for sometime. What has changed, however, is that you cannot now spend about $10K to upgrade a resale unit (using credit for the original developer price for that unit) while retroing another resale unit.

For example, I recently upgraded a 1BR SVV resale unit to a 2BR SVV unit while retroing a Harborside resale unit with the upgrade. Since the 1BR SVV was originally sold for $14.9K by the developer, SVO gave me credit for that amount which was applied toward the purchase price of $25.9K for the 2BR SVV unit. Thus, I incurred an out-of-pocket expense of only $11K to do the upgrade/retro. This type of transaction is not allowed any more; one has to spend at least $20K toward any sort of retro transaction.

I hope this clears up the confusion.

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Got it! Thanks for the clarification. Are upgrade/retros still allowed then, the change being that you need to spend $20K "new" money in the transaction?

Thanks!
-tim

Confirmation of new rules

I also have heard of this change that started today from my experienced and honest rep. The only change is that you need to spend 20,000 NEW monies to retro in a unit. I did an upgrade AND retro on Friday prior to this change.

Tom

tlpnet said:

Got it! Thanks for the clarification. Are upgrade/retros still allowed then, the change being that you need to spend $20K "new" money in the transaction?

Thanks!
-tim

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Yep, that's right.

Hey LisaRex, I hear you but my thoughts below:

LisaRex said:

1) Only platinum owners are given a decent number of SOs to trade with. I wouldn't buy a gold or silver unit, resale or otherwise, unless I wanted to use it.

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As it should be, right? In general, shouldn't a unit trade like for like?

LisaRex said:

2) As more voluntary resorts trade hands, it will become more difficult for SVNers to trade into those resorts because those units are booted out of SVN. So if I want to get into WMH or SDO, I'll have just as good, or perhaps even better chance, of getting in with II.

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I'm confused. How does an SVNer's ability to trade within SVN dependent on the number of SVN units at a particular property?

LisaRex said:

3) In SVO, a 1 bdrm gold owner at WMH or WKV has ZERO chance of getting a 2 bdrm in WKORV because Hawaii has stupidly been coded as platinum all year. But in II, they have a pretty good chance of getting a 1 or even a 2 bdrm in exchange for a 1 bdrm gold.

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I actually love that Hawaii is platinum year round. It doesn't restrict when I can go. I think Hawaii is fabulous year round.

LisaRex said:

4) SVO just invited a whole bunch of new owners into SVN, which means SVNer's chances of getting into the major 2 (WSJ or HRA) resorts will be even more diminished. All other resorts can be exchanged into pretty easily via II, especially in low/shoulder season.

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Maybe not a big deal because as you said, as voluntary resorts trade hands, they get booted out of SVN.

LisaRex said:

5) SVO has stalled on new developments. I've only been in the system for 3 years and I'm already feeling claustrophic. In a few years, I'll likely do a direct exchange with a Marriott owner or exchange into another system via II because I've exhausted all the places I want to see in SVN.

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Sounds like an issue with SVO, not SVN. In any case, I do agree. I wish they offered more places.

Troopers said:

I'm confused. How does an SVNer's ability to trade within SVN dependent on the number of SVN units at a particular property?

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At a voluntary resort, every time a unit is resold, it leaves the SVN. So those units can no longer be converted to Staroptions, and therefore are not available for Staroption exchanges into the resort. Resales at a voluntary resort can only be deposited with outside exchange companies like II and RCI.

TomH said:

I also have heard of this change that started today from my experienced and honest rep. The only change is that you need to spend 20,000 NEW monies to retro in a unit. I did an upgrade AND retro on Friday prior to this change.

Tom

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Rules change every day and with every sales rep you call. Call someone else, preferrably outside the Orlando main office, where they are very pressured to adjust to and obey the new rules. Try a local sales rep at one of the on site offices. Guaranteed you will get different answers. Better yet, show up in person when you are ready. They will ignore MANY rules to get your purchase through! Just be sure to have all your ducks lined up before you go....

Katherine

I'm confused Katherine. If it is, indeed, a moving target, how can anyone be certain their ducks are, in fact, in a row?

Had the "tour" at SVV on 4/16. Was discussing retroing with my sales guy.He brought over his boss "head of BS I mean sales" who when he heard what I wanted to do (upgrade to 3 BDRM for only a few $ and retro another SDO) his comment was basically, Do you think we are idiots we follow the web chatter, come to my office you will be suprised by what web site is on my screen right now. Then he told me about the new rule coming into place and said there will be more changes to come (the context was of retroing). I believe this Director of Sales name was Rob (he is a youngish, Jewish guy from NY. BTW I only use that description because I am youngish, Jewish and from NY).
He did appear to be in charge, flitting from table to table to offer advice and shmooze. Don't know his last name or title. Hey Rob, what's your last name and title.

Troopers said:

Hey LisaRex, I hear you but my thoughts below:
As it should be, right? In general, shouldn't a unit trade like for like?

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Absolutely. However, we have two platforms with which to trade, only one of which works "like for like" (SVN). In the other program (II) folks are able to routinely upgrade. 1 bdrm platinum SDO owners who use II are reporting that they are snagging 2 bdrm platinum units in WKORV. Meanwhile 1 bdrm platinum SVR folks who paid an upcharge to buy from the developer to use SVN, aren't able to even get a studio because they don't have enough SOs. So, if you were choosing to buy a unit now, which one would you choose? SVN is shooting itself in the foot.

I'm confused. How does an SVNer's ability to trade within SVN dependent on the number of SVN units at a particular property?

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See DeniseM's answer above. To note, a recent WLR owner (who bought from the developer) recently reported having difficulty trading into WMH for weekend stays in April. Other posters reported seeing WMH available for II Getaways during this time. In other words, she could get in via II but not in with SVN. That's crazy. And since resale WMH owners cannot use SVN to exchange, as time goes by, WMH (and SDO and WLR, etc.) will be MORE difficult to exchange into via SVN.

I actually love that Hawaii is platinum year round. It doesn't restrict when I can go. I think Hawaii is fabulous year round.

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It is fabulous year round, but in reality, far fewer people travel to Hawaii during these months. End result is that people who own voluntary resorts and using II are able to snatch up nice upgrades (in terms of season and unit size) during these months...while SVNers cannot, because Starwood erroneously coded Hawaii as platinum all year. So folks dependent on SVN cannot get into Hawaii at all while folks not dependent on SVN can. That's craziness.

I really think that Starwood didn't foresee how splitting their resorts into "mandatory" and "voluntary" would affect the viability of SVN. The inequities are making mandatory units less and less attractive and voluntary resorts more attractive.

Personally, I think they should invite/allow everyone in, enjoy the $109 SVN fee from everyone, and let the system work as it was intended, e.g. a gold 2 bdrm would trade for a gold 2 bdrm, etc., with occasional great deals via II during low season.

But the way the system works now, II is kicking the crap out of SVN. I'd never own in Orlando because I could get into SVR/SVV with II Getaways for less than folks pay in MFs most weeks. I'd never buy a Hawaii unit if I was content traveling there in the spring/fall because why spend that kind of money buying and maintaining a villa when I can easily trade in with my $5k/$800 MF SDO unit via II?

DeniseM said:

At a voluntary resort, every time a unit is resold, it leaves the SVN. So those units can no longer be converted to Staroptions, and therefore are not available for Staroption exchanges into the resort. Resales at a voluntary resort can only be deposited with outside exchange companies like II and RCI.

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I get the first and last sentence. It's the middle sentence that doesn't sound right. Shouldn't it based on availability? Is this written anywhere?

LisaRex said:

Absolutely. However, we have two platforms with which to trade, only one of which works "like for like" (SVN). In the other program (II) folks are able to routinely upgrade. 1 bdrm platinum SDO owners who use II are reporting that they are snagging 2 bdrm platinum units in WKORV. Meanwhile 1 bdrm platinum SVR folks who paid an upcharge to buy from the developer to use SVN, aren't able to even get a studio because they don't have enough SOs. So, if you were choosing to buy a unit now, which one would you choose? SVN is shooting itself in the foot.

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I understand your point buy I'm not sure if "SVN is shooting itself in the foot". SVN is an equitable system. Are you suggesting a studio in a desert resort should have equal staroptions as a 2 bdrm platinum Hawaii? That doesn't seem right.

In II, for every trade up isn't there a trade down? My bet is we just don't hear about it.

Troopers said:

I get the first and last sentence. It's the middle sentence that doesn't sound right. Shouldn't it based on availability? Is this written anywhere?

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Let's say there were 100 plat weeks at WMH bought through SVO, and are in SVN. Over the years, 50 weeks get resold, since it's a voluntary resort the new owners are not eligible for SVN. So the inventory in SVN for WMH is now down to 50 weeks.

Now I'm not figuring in a % of owners who use their week, rent it out, do a private exchange with another TS owner or deposit their week with an independent exchange company(get around SVO giving you an Aug week as a deposit in II). So the remain 50 unit might be less when it comes to the 8 month window, especially for the prime season in Palm Springs.

stevens397 said:

I'm confused Katherine. If it is, indeed, a moving target, how can anyone be certain their ducks are, in fact, in a row?

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Well, whatever you have in your contract on the given day is what goes. So when you agree to buy from Starwood, you need to have your upgrade property and your retro property in your name and recognized by Starwood. You really can't walk in and say "I want to buy SVV but I will buy a resale first and then retro it, ok?"

What you need to do is say "I have unit X at resort X and I want to upgrade it by buying SVV (for example). I also want my unit Y at resort Y to retro. I will sign all the paperwork today."

That's it. Then there are no questions unanswered and no "new rules" that come into effect. Get it all in writing.

1) Upgrades have a contract sheet that states that you will receive X dollars for the unit. That should be in your written packet. If not, they are not upgrading you! It should clearly state the difference you will need to pay including the $550 closing cost. If it is not in there or they say they will do it later, DON'T SIGN. There is no later. It should be in there from day one, which is why it's important to have your upgrade unit ready to go.

2) Retro's have their own set of paperwork (about 5 pages long). Get that too right away. Do not send a contract back without it. And insist on copies, esp. of the retro paperwork as those tend to "disappear" into the retro department like mine did twice.

If you have it all in writing from the very first day you sign the papers, you are protected from any changes that take place afterward.

Katherine

Troopers said:

I understand your point buy I'm not sure if "SVN is shooting itself in the foot". SVN is an equitable system. Are you suggesting a studio in a desert resort should have equal staroptions as a 2 bdrm platinum Hawaii? That doesn't seem right.

In II, for every trade up isn't there a trade down? My bet is we just don't hear about it.

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SVN is equitable but it's competing against a sytem that is not. That's a problem, IMO, because if I were looking to buy today I'd buy the cheapest voluntary platinum unit I could find in SVN and simply trade into WKORV (where I really want to go) or HRA in low season with the SVN 3-day priority in II rather than buy at either place and pay the hefty purchase price and MFs. So the presence of II might be hurting resales of the more expensive resorts.

I honestly don't know how many people trade down in II. I know that I do regularly hear of people successfully trading into Hawaii and Harborside during shoulder seasons.

LisaRex said:

SVN is equitable but it's competing against a sytem that is not. That's a problem, IMO, because if I were looking to buy today I'd buy the cheapest voluntary platinum unit I could find in SVN and simply trade into WKORV (where I really want to go) or HRA in low season with the SVN 3-day priority in II rather than buy at either place and pay the hefty purchase price and MFs. So the presence of II might be hurting resales of the more expensive resorts.

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Right! II may be more favorable now as a trading vehicle than SVN. My guess is that it's a direct result of travel habits in this economy.

SVN certainly has it's issues but I don't think SVN is the problem. Marriott owners can pull similar trades.