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Apollo Group looking to buy HGVC [Merged]

Discussion in 'Hilton Grand Vacations Club / HGVC' started by toontoy, Aug 20, 2019.

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  1. Tamaradarann

    Tamaradarann TUG Review Crew: Veteran TUG Member

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    Location:
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    Resorts Owned:
    HGVC South Beach, HGVC Las Vegas, HGVC Las Vegas on the Strip, HGVC Sea World, Misner Place
    I understand your dismay over the lack of resorts in your geographic area. HGVC places their resorts very strategically in areas that will attract not just some vacationers once in awhile but many vacationers frequently. We live near NYC which has the only HGVC resorts within reasonable driving distance. It is usually a plane trip to Honolulu, Florida or Las Vegas for our HGVC vacations; we have enjoyed at least 2 every year since we have owned. When we purchased HGVC it was our goal to be able to vacation in warm climates when it was cold in NY. Hawaii and Florida certainly give us that. If we wanted driving vacations we wouldn't have bought HGVC. Therefore, both HGVC and our vacation plans are on the same page. Resort locaateddds vacations would certainly be a secondary or inconsequential benefit.
     
  2. dayooper

    dayooper TUG Member

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    Oh, I agree. We love the locations in Vegas, South Carolina and Florida. I think I’ve talked my wife into going to Carlsbad at some point and we will do Hawaii some day, too. That being said, having a couple of different locales would be very nice. When we bought, it was for family vacations in Vegas and Orlando. This past year we went to Myrtle Beach and our kids loved it so much, we are going again next summer. We do other smaller vacations, but my wife and I love the amenities and flexibility of the system and wish we could use some of our points in a closer locale.

    Maybe at some point we should try renting a more locale MVC resort.
     
    escanoe likes this.
  3. Tamaradarann

    Tamaradarann TUG Review Crew: Veteran TUG Member

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    We are at a different stage of life than you and your wife. We are retired and usually vacation by ourselves so that paying for the flights to Florida, Las Vegas and Hawaii is not such a financial burden. When our kids were young we didn't have timeshares and we couldn't afford to vacation anywhere we couldn't drive. However, now in addition to our HGVC timeshares we have Misner Place which has RCI points. Using those points as well as some HGVC points through RCI we have gone on 8 hour driving vacations with our Daughter, Son-in-Law and Grandchildren to some great places in Williamsburg Virginia, Lincoln New Hampshire, Smugglers Notch in Vermont, Massanutten Virginia. Those places are a lot closer to you than Myrtle Beach. I don't know what RCI places are in your midwest location, but some of these locations may be able to be reached with a long one day drive and you could reserve using your HGVC points. By the way I don't know how old your kids are but when our Grandchildren were young teenagers they loved going to Smuggler's Notch. It is a large property with a complimentary shuttle around the property with activities specifically for teens. The Grandchildren loved taking the shuttle and being on their own; not having to be dropped off and picked up by Mommy and Daddy. Of course they had their cell phones in case they did need any assistance. While it is a winter ski resort it does have some excellent pools and summer activities.
     
  4. terces

    terces TUG Member

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    When I was trying to decide between MVC and HGVC, the tipping point was the $3 per point activation fee. 7000 points x $3 = $21,000 and that is a huge number on top of paying for the points, so HGVC was a no brainer, but it is also possible I did not analyse it properly given what you said that the activation fee for MVC does not apply to weeks. I know the answer is probably in the thread here, but it is moving so fast I'm not seeing everything so my question: if a person bought weeks can they easily be converted to, or used as points without further cost?
     
  5. terces

    terces TUG Member

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    I don't know about MVC's structure, but I think it is fair to say that HGVC has a mess of different ownerships, affiliation arrangements and fee structures - for example with Grand Pacific, whom I believe owns 17 resorts, HGVC has a relationship in three of them; an affiliate arrangement in Seapoint and Grand Pallisades and then they have a completely different Joint Venture partnership arrangement in MarBrisa. They also have a significant relationship with Hilton where they are converting rooms in some hotels to TS's. Then there is the twisted up business in Elara. And it just goes on and on. Everywhere you look there are different business models employed. HGVC is an unbelievably complex mess without a set format or model, and as far as I can see they have all kinds of relationships that they sort of negotiated and invented along the way. I can't fathom how this can every be folded into another system or consolidated. On top of this they have owners who pay massively different MF's for exactly the same point value; for instance if your 7000 point home resort is Hawaii you may be $1700, whereas someone can own the exact same 7000 point trading value in Vegas and pay $850. How the heck can they ever resolve that into a trust? This mess might just play into the current TS owners hands, because it is almost like a poison pill.
     
  6. JIMinNC

    JIMinNC TUG Member

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    Destination Club Trust
    HGVC:
    HGVC at Sea World
    No. Marriott resale weeks bought after June 2010 can generally only be used at your home resort or traded in Interval International. They cannot be converted into points. For the last few summers, Marriott has offered limited-time promotions which allow those ineligible weeks to be enrolled into the points system (enrollment just adds the option to convert to points to the standard home resort and II usage options), but only if the owner buys about $35,000 worth of Trust points - i.e. - 3,000 points. (There have also been variations on that deal where you could buy an Aruba week or some other international weeks direct from Marriott to do the same same thing, but they also require about a $35k spend).

    The Marriott owners who own enrolled weeks that can be converted to points (generally those bought before June 2010 or others that have taken advantage of one of the special promotions) have the same situation with differing maintenance fees costs per point at different resorts. The Trust maintenance fees are different still. For example:

    Marriott Grande Ocean Hilton Head 2BR Platinum Ocean Front: MF= $1491.38; Points=5075; cost per point = $0.29
    Marriott Maui Ocean Club Lahiana/Napili Villas 2BR Platinum Mountain View: MF=$2697.35; Points=5500; cost/point = $0.49
    Marriott Destination Club Trust Points, maintenance fee per point = $0.58

    The way Hilton could resolve theirs could be the same as MVC did - the Trust maintenance fee is equal to the maintenance fees of all the weeks owned by the Trust, plus Trust operating/admin expenses. They do not have to be the same. Everyone pays the MF for their ownership and the cost per point varies with what you own. Think of a trust as a single resort entity, but the units in that resort are spread throughout multiple locations rather than just one geographic location. So just as the Hawaii resorts have their maintenance fees and the Vegas resorts have theirs, the "Trust Resort" has their maintenance fee. HGVC could certainly create a trust for new sales. The biggest complication would be the many fee for service projects they have, where someone else owns the real estate that Hilton is selling. To do a Trust, HGVC would likely have to buy the intervals in batches from the development partner to feed the Trust.
     
    Last edited: Oct 13, 2019
    escanoe likes this.
  7. terces

    terces TUG Member

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    Am I correct to assume that it was 2010 that MVC first offered a trust format? What exactly happened to those who owned prior to 2010 and had MF's that were much lower than the Trust MF's? Did those owners somehow get the shaft from MVC, or was it a benefit at that time to have legacy (re-sale) weeks? (I'm itching to add some HGVC points and trying to assess the risk)
     
  8. chemteach

    chemteach TUG Member

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    The people who owned pre 2010 could keep their deed and their regular maintenance fees. They could choose to pay around $200 per year to "enroll" their week in the Trust. That means they still pay their original maintenance fees, but they could get however many DC points their deeded week provided - as assigned by Marriott. Thus, many people who own deeded weeks pay much less than $0.58 per point in maintenance fees. There is a yearly cost (somewhere around $200) to have the ability to convert the deeded week to points each year. Owners could also choose to just stick with their original deeded week and not use the trust points.
     
  9. CalGalTraveler

    CalGalTraveler TUG Member

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    MVC has two systems for points 1) Deeded Weeks with Enrolled Points (similar to HGVC today except enrollment is optional for MVC owners); 2) Destination Club - pure points trust program based on portfolio of deeds.

    When an MVC owner makes a points reservation they may be offered a combination of VOIs from these two programs.
     
  10. terces

    terces TUG Member

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    Thank you - that is good information. What happens today with a sale/purchase of those pre- 2010 units. Do all the rights and obligations carry forward to the new owners, or are there any penalties or restrictions?
     
  11. jabberwocky

    jabberwocky TUG Member

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    All resale weeks lose all rights in the MVC DC Exchange but they can still be used to book a home resort in season or trade in II. If you think about it upon sale the unit a pre-2010 week becomes a post-2010 week. The new owner would have to enroll the week back into the system. There are several threads in the MVC Forum on this.
     
  12. brp

    brp TUG Member

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    So, I may have this sideways, but I thought that there were some (like 5) Vistana locations that would retain the ability to trade to other locations even on resale. But maybe, even though Starwood is now part of Marriott, Vistana is not part of MVC?

    Even with this restriction we might, at some point, be interested in MVC in Maui, with the intent to use in Maui, so we could still be OK with this.

    Cheers.
     
  13. jabberwocky

    jabberwocky TUG Member

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    There are some Vistana properties (called Mandatory properties) that have to be part of the SVN system - so the benefits transfer to resale owners (2 resorts on Maui, some phases of SVV in Orlando, WKV in Scottsdale and Harborside).

    While Vistana and MVC have the same corporate parent they are at present completely different systems - although access is possible via II exchange.

    My preference would be to go with one of the Vistana properties on Maui as the booking window is more even for all owners (single week and multiple week both have priority access 8-12 months out) and the two original phases there have the SVN benefits transfer to resale owners (with the exception of converting to hotel points).
     
  14. JIMinNC

    JIMinNC TUG Member

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    Destination Club Trust
    HGVC:
    HGVC at Sea World
    It is important to remember that the pre-2010 legacy weeks and the Trust are two totally separate and different things. The Trust is totally separate from the legacy weeks. The legacy weeks are never "enrolled in the Trust." The only way legacy weeks generally become part of the Trust is for Marriott to reacquire that week through one of their inventory reacquisition channels - ROFR, foreclosure, or buyback. Those weeks become part of the Trust and essentially form the underlying equity used to fund the points sold by Marriott. People who buy points from Marriott own a beneficial interest in this trust and their maintenance fees are determined by the maintenance fees paid by the Trust for the weeks owned by the Trust (plus Trust admin costs).

    The legacy weeks people own are not, and have never been, part of the Trust in any way. They are not enrolled in the Trust. These weeks can be enrolled in the MVC Exchange Company, which is an entity within MVC designed to facilitate exchanges between Trust owners and enrolled weeks owners. Each enrolled week is assigned a "Destination Points" point value, but the reservations are generally fulfilled from the MVC Exchange, not the Trust.

    So, people who own Trust points pay the Trust maintenance fee; enrolled weeks owners pay their regular week's maintenance fee. Their cost per point will be different. Some weeks owners with high value/low cost weeks could have a maintenance fee cost per point considerably less than a Trust owner. Owners of lower value weeks may have a cost per point much higher than a Trust owner.

    As long as the enrolled owner owns his/her week(s), for any use use year, they can choose to 1) use their week at their home resort as always, 2) deposit their week to II to trade, 3) convert their week to Bonvoy points, or 4) elect their week for MVC Destination Points.

    If #4 is chosen, the owners gets the point value of that week deposited into their points account (lets say the week is worth 4500 points). Their week then goes into the MVC Exchange and those nights become available to other points users. The owner then can use the 4500 points in their account to make their own reservations from the inventory available in the MVC Exchange. That inventory is a mix of weeks from other enrolled owners or the weeks controlled by the Trust.
     
    Last edited: Oct 14, 2019
  15. geist1223

    geist1223 Guest

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    Maybe this long involved discussion of Marriott's should move tomthe Marriott thread.
     
    lindsey1 likes this.
  16. dougp26364

    dougp26364 TUG Review Crew: Veteran TUG Member

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    I’ve been wondering if this is a Hilton thread or MVC thread.

    The fascination over similarities and differences between the two systems confounds me. Other than using points as a currency to book, the two systems and the two companies are VASTLY different. One not really better than the other except for personal preference.

    We own both. Neither compares to the other except both now have a points mechanism that can be used to make reservations. After that, the similarities all but end.

    Better to discuss HGVC matters on the HGVC forum rather than debate the finer points of 2 dis-similar systems
     
  17. mrharris03

    mrharris03 TUG Member

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    I just got a stock alert, and HGV's stock has just popped a few dollars.

    Apparently, Bloomberg is reporting that Apollo is making a bid of "near $40 per share" for HGV. See https://thefly.com/landingPageNews.php?id=2975111 (Apollo said to bid near $40 per share for Hilton Grand Vacations, Bloomberg says)
     
  18. JIMinNC

    JIMinNC TUG Member

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    This discussion of MVC was prompted by HGVC owner questions about how trusts like MVC work, should HGVC choose to add a Trust product. Most MVC owners understand all of this, so some cross-pollination of knowledge seems like it could be helpful on this forum for that limited purpose. Based on the comments above there is definitely misunderstanding of how trusts work in regards to legacy weeks owners in any system.
     
  19. chemteach

    chemteach TUG Member

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    Interesting. I actually own Diamond Resorts. I read earlier in this thread that Diamond is supposedly (this is all rumor of course...) going to move it's Hawaiian collection to a new joint program with HGVC if Apollo purchases HGVC. All these timeshare changes with so many different systems makes me agree with others that one can never depend upon anything but what a deed states. These systems keep merging/dividing/creating new programs with the idea of making more sales/money. But you never know how what you think you bought might change on you - except the ability to book your home week in accordance with what your deed states.

    I feel sorry for HGVC owners if Apollo/DR takes over. Diamond is known for increasing fees, charging crazy management fees (It's only 10% at one of my resorts, but then they have another 10% in hidden fees. The board members are 80% Diamond Resorts employees.) Good luck! I do like my Diamond membership, but maintenance fees are too expensive for what you get. :-(
     
  20. mrharris03

    mrharris03 TUG Member

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  21. brp

    brp TUG Member

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    Maybe being late in the process of buying more HGVC points is not the best place to be :)

    Cheers,
    Bruce
     
  22. CalGalTraveler

    CalGalTraveler TUG Member

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    Aha! I knew Blackstone would get involved...

    If Apollo bids $40 and Blackstone bids $38 is the board required to go with the highest bidder?
     
  23. Cyberc

    Cyberc TUG Member

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    What is blackstones track record in terms of buying companies like HGV and what can we expect if they “win” the bidding?
     
  24. mrharris03

    mrharris03 TUG Member

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    No - as a technical matter, the Board is required to exercise its business judgment to recommend the bid that is the best deal for shareholders, which may not be the highest monetary consideration, particularly if there would be significant issues in consummating a transaction (e.g., license agreements whose termination could be triggered). At the end of the day, the Board could decide that it is in the best interests of the company to continue to be independent (though I think that is an unlikely conclusion if they've already essentially started a bidding process, as news reports suggest). The board could recommend one of the offers they receive, and it would ultimately be up to the shareholders to approve the transaction. Given Blackstone's history with Hilton and its ownership/development involvement in some of the HGVC projects, my hope is that it emerges the preferred bidder. Apollo's stated purpose of integrating HGVC with DRI does not seem like a winning proposition for current HGVC owners (whose interests, perversely, are only relevant to the extent it affects the bottom line).
     
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  25. CalGalTraveler

    CalGalTraveler TUG Member

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    Blackstone owned HGVC as part of the Hilton buyout. This is considered one of the most successful and largest buyouts by private equity. Blackstone sold their share in 2018, but were/are the backers of building developments such as Elara and W57. HGVC operated well under Blackstone ownership and Blackstone understands the relationship with Hilton so I consider them a preferred option over Apollo Diamond.

    https://www.bloomberg.com/news/arti...aid-to-plan-sale-of-remaining-stake-in-hilton

    IMHO...Diamond is the place where old timeshares go to retire. Apollo knows this and wants to spread the HGVC goodwill over Diamond to revive the brand and tie new business with a hotel system so they can package and sell. However, Hilton owns the brand license and could pull so they will have a huge say as to whether value will be realized in this deal.
     
    Last edited: Oct 14, 2019
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