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Re: Marriott System (by Eric F.):

Kekouri you said: “On the TUG & Forums BBS, they report the only difference is the availability of points....and many don't feel thats a good value ( Marriott was selling them last spring for a penny each?). They go down in value, while the maint fees & taxes go up? (Remember, you can give your week back, for points, but still have to pay that fee plus the weeks maint fees and taxes...around $1000 a week.”

My reply: Based on this quote and your other posts, it is clear that you do not think that the Marriott Rewards Points do not have enough value to offset the higher purchase price offered by Marriott Vacation Club International. Of course our owners, that are using the points option for air/hotel packages from their ownership, would usually disagree with you.

Before I show you the value of using air and hotel packages in addition to using villa weeks, we need a basis of comparison. The purchase of a Marriott Vacation Club International 2BR (with lock-off option) floating Platinum week (red exchange) at a Florida resort that can be exchanged for points every year can be purchased for about $21,000 directly from me and Marriott. The exact same property and week can be purchased from a Redweek advertised resale for about $11,000. I’ve chosen this inventory for the excellent exchange power and the points options and lock-off option flexibility. The annual HOA maintenance and tax expense is identical for both buyers. Closing costs are about the same. I’ll use “today $” values and ask you to remember the inflation factor of airfares and hotel/villa rental rates. And lets presume that the Marriott direct buyer deducts a % of the financing interest expense to offset some of that pre-tax expense.

Both owners could lock-off and use or exchange up to 20 weeks every 10 years of ownership. Or both owners could rent their 2BR unit out for a week 10 times (peak rental value seen on Redweek today) @ $300 p/nt for a total of $2100 times 10 = $21,000. So if both owners just used the villas for occupancy and or rental each owner would get the same money value for their usage instead of renting from others. In this scenario, the resale buyer paid less for the same usage than the Marriott direct buyer.

Now let’s look at our resale buyers other expenses for a trip for two passengers to Hawaii from 12/14/07 to 12/21/07, flying from JFK to Honolulu via AA coach seating and reserving a standard room at the JW Marriott Ihilani at Ko Olina (Oahu) for 7 nights. I checked on it today w/ an Orbitz search: the air is $1700 and the hotel w/tax is $2657 for a total of $4357

Now let’s look at why people choose to purchase directly from Marriott. When I put together their purchase they will have access to 1,200,000 (one million two hundred thousand) or more Marriott Reward points during the first ten years of ownership! Then they could use the points exchange option for 100,000 points every year beyond that.

Now let’s look at that trip to Hawaii for my owners. They could convert 220,000 points for the exact same trip that the resale purchased out of pocket with after tax dollars for $4,357. Remember those 1.2 Million points… well my owners simply pay $104 times 5 years = $520 for 500,000 of those points. The other 700,000 points came from Marriott incentives and financing payment incentives. Now my owners went to Hawaii using their points. How much was each point worth with that usage of 220K points? 220,000 divided by $4,357 = $50.49 each! The cost ($208) is pennies on the dollar!

What should my owner do with the remaining 980,000 points? Would you go 4 more times to Hawaii or the Caribbean in the next 9 years or wait until later (the points don’t expire) and build up more points to travel later when the points are worth even more travel dollars? If our happy owners take 4 more trips using 220K points, they’ll still have 100K points left over!

So the added value of 5 trips worth $4,357 (today $) = $21,785 in the first ten years of ownership. Now add the value of 5 weeks of 2 BR villa usage (recall we only exchanged for points 5 times in ten years) is $2100 times 5 = $10,500. So with conservative valuation, I used today dollars only, that is $10,500 + 21,785 = $32,285 worth of accommodations and airfares.

Kekouri also said:

“I once thought it was great the Marriott protected its owners with the ROFR, but know I feel thats has nothing to do with owner protection......”

My reply: So let’s look at the dark side of timeshare. Resale. I think the MAR ROFR is a benefit for Marriott direct owners. It protects the value of everyone’s equity in their property. If my Marriott owner uses the Marriott resale program and gets back 60% of the sale proceeds 10 years from now and let’s presume that the historic trend continues for Marriott values. Note to all: I am not promising what will be future value! So with a what if scenario, of a sale price in 10 years of maybe $32,000 times 60% equals a return of $19,200 to the Marriott owner. Remember that the originally purchased for $21,000 from Marriott.

So which owner comes out ahead? I think it is clear that the Marriott direct purchaser gets far more value from their ownership than the resale purchaser.

This post took way too much of my time, LOL, but I enjoy the debate and thanks for inviting me to participate. I hope it helps someone in the “listening audience”. BTW, should we start a new thread?

Regards, Eric