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Re: Marriott Going to Point Syst (by J E.):

Yes, Marriott just announcede it is spinning off the timeshare operation.

While sales to existing customers were up (probably because of the cost to buy into the new program) sales to new owners were down -- which is not a good sign.

It it my judgment that this is NOT a good sign for Marriott Timeshare owners. The new company will just be leasing the Marriott name, so Marriott will no longer be involved. At first things will be similiar. However, over time it will be a very different operating company -- which of course, is one of the reaons for spinning it off so it can be different. It would not be surprising for the Boards of Directors of some Marriott properties to hiring Hyatt, Hilton or some other well known timeshare company to manage specific units. Bottom line: this is a very significant change with a very unknown outcome.

Here is the quote on Marriott timeshare financials:

"In the fourth quarter, Marriott’s timeshare business continued to focus its efforts on educating existing customers about the benefits of its new points product. The program allows customers to purchase timeshare in smaller increments than the traditional one-week product and allows greater flexibility of use. In the fourth quarter alone, over 30,000 existing owners joined the points program, continuing to exceed the company’s expectations. Contract sales to existing owners increased 47 percent in the fourth quarter compared to the year-ago quarter. With fewer sales to new customers year-over-year, fourth quarter adjusted Timeshare segment contract sales declined $2 million to $201 million (excluding a $4 million allowance for residential contract cancellations recorded in the quarter). In the prior year’s quarter, adjusted Timeshare segment contract sales totaled $203 million (excluding a $28 million allowance for fractional and residential contract cancellations).

In the fourth quarter, Timeshare sales and services revenue totaled $372 million and, net of expenses, totaled $43 million for the quarter. Adjusting for restructuring and other charges, as well as the impact of consolidating securitized notes had that occurred at the beginning of 2009 rather than 2010, fourth quarter 2009 adjusted Timeshare sales and services revenue would have totaled $373 million and, net of direct expenses, would have totaled $64 million. These adjustments and reported results for the 2009 quarter are shown on page A-11.

Fourth quarter 2010 Timeshare sales and services revenue, net of expenses, declined largely due to $8 million of costs related to the new points-based program, a $6 million impairment charge related to a few fractional projects, higher carry costs on unsold units, and lower interest income on mortgage notes. These unfavorable variances were partially offset by higher rental income and lower expenses associated with reacquired inventory.

Timeshare segment results include Timeshare sales and services revenue, net of direct expenses, as well as base management fees, equity in earnings (losses), gains and other income, interest expense and general, administrative and other expenses associated with the timeshare business. Adjusted Timeshare segment results for the 2010 fourth quarter totaled $42 million (as shown with reported results on page A-9) and included $15 million of interest expense related to the consolidation of securitized Timeshare notes, as well as a $20 million gain on the sale of real estate, both of which were included in the company’s fourth quarter 2010 guidance. In the prior year quarter, adjusted Timeshare segment results would have totaled $28 million, adjusting for the restructuring costs and other charges, as well as the impact of consolidating securitized notes had that occurred at the beginning of 2009 rather than 2010, as shown with reported results on page A-11. Adjusted Timeshare segment results for the year-ago quarter included $26 million of interest expense related to the consolidation of securitized Timeshare notes."