Ask RedWeek / June, 2016

Interval Leisure Group buys Starwood - what does that mean for owners?

I am a longtime owner in Starwood Vacation Network with generally good things to say about my timeshare ownership. But I heard recently that the club has been purchased by a different timeshare company, Interval Leisure Group. What do these corporate changes mean for owners? What's going to be different? Are they going to change my ownership or reservations programs?

To answer these questions, RedWeek contacted corporate executives who actively participated in the merger along with financial experts who track consolidations in the industry. For a reality check, we also talked to rank-and-file employees at the Sheraton Vistana resort in Orlando, Florida. The corporate executives had glowing things to say about ILG's merger with the Starwood timeshare group while analysts applauded the move as a big win on Wall Street. Those Starwood folks on the front lines — the employees who deal with these questions daily — knew very little beyond the fact that all of the signs and corporate insignia were changing on the fly in mid-May.

Vistana Signature Experiences Introduced

Everything changed on May 12, including names, websites and logos. That's the day ILG completed its acquisition of an entity known as "Vistana Signature Experiences" from Starwood Hotels & Resorts Worldwide, Inc. It's also the day that 5,000 Starwood employees started working, as a subsidiary, for ILG, while hundreds of thousands of Starwood owners received an innocuous email from Vistana's Chief Operating Officer, Stephen Williams, welcoming them to the family.

"We are now operating as Vistana Signature Experiences," Williams said. "This is an exciting time, and we look forward to our continued relationships with Westin and Sheraton as we remain their exclusive provider of vacation ownership. As an owner, you will be able to enjoy your timeshare resorts as you always have, while receiving the same valuable benefits, award-winning branded experiences, and preferred access to the industry-leading SPG (hotel rewards) program that you've come to know and enjoy."

That's the promise: big changes at the top, but no changes at the bottom — where most owners live with a week or two, per year, of (formerly) Westin or Sheraton timeshare intervals.

New Travel Options Promised to Owners

Williams also outlined a series of new resorts and vacation experiences that will become available to owners, including the Westin Nanea Ocean Villas resort on Maui's Ka'anapali Beach, which is due to open in the summer of 2017. He said the company also plans to open new timeshares within existing Westin and Sheraton hotel properties in Los Cabos, Cancun, Puerto Vallarta, Kauai and Steamboat Springs (CO).

On May 12, Vistana also unveiled its new website and a Frequently Asked Questions page to explain the merger and (non-changes) to owners. Here are some of the highlights:

  • With the acquisition, ILG became one of the most diversified timeshare companies on the planet. It now owns Aqua-Hospitality, Hyatt Vacation Ownership, Interval International, Trading Places International, Vacation Resorts International, VRI Europe and Vistana Signature Experiences. Based in Miami, the company employs 10,000 people and broadcasts a big presence in every aspect of timeshare — from sales to financing to resort management to exchange opportunities and hotel rewards programs.
  • No SPG benefits will change. The Sheraton and Westin brands will remain in place under an 80-year licensing agreement. The company now refers to those timeshare entities, however, as Westin Vacation Club and Sheraton Vacation Club. Mortgage processes, reservation procedures and customer service telephone numbers, remain the same.
  • Remember this new website: vistana.com.

ILG Getting Bigger, Gaining on Wyndham

The acquisition represents perhaps the most significant timeshare marriage in recent years, according to financial analysts who cover publicly-traded timeshare companies. Wyndham is the largest timeshare company that offers a granola mix of high-, mid- and low-end properties (and it owns exchange company RCI). But ILG is getting bigger and broader, with 550,000 owners, more luxury properties to attract higher-end customers and synergistic exchange opportunities with Interval International. Starwood Hotels, meanwhile, sheds a timeshare division that was not as profitable as its straight-hotel business model. (This is a common dichotomy in the hotel and timeshare world — and it explains why Marriott and Hilton, among others, have spun off their timeshare operations into stand-alone companies.)

Also on May 12, ILG doubled in size, expanding from 5,000 employees to 10,000. Williams and colleagues promised that the integration of the two companies would be "seamless," but anyone who has worked in large corporate environments (including this author) knows that there is nothing seamless about major corporate mergers, especially when one company, like ILG, takes over another. Internally, there are always winners and losers and merger-related "cost efficiencies" that trigger layoffs. Analysts predict that 1,000 or more employees will be escorted through the ILG/Vistana exit doors in coming months. It's a predictable part of consolidation. And part of the reason that companies merge.

Impact on Owners

Still, none of the corporate issues need to impact longtime loyal Starwood owners who try to rent, sell, or buy timeshares on RedWeek.com. The real question is whether the newly created company, Vistana, focuses on customer satisfaction, retail sales, or something else entirely.

So far, based on a recent daylong visit to Sheraton Vistana, a handsome resort and the mothership of Sheraton's timeshare brand, sales are still the most important thing in town (at least in Orlando), both to new customers and upselling existing owners. On May 22, while freshly minted Vistana banners hung from the rafters of the lobby and employees worked with nametags that had been stripped of their Starwood armor, the sales team was in full force to deal with 75 to 100 people huddled for presentations in the sales gallery. According to staff, this was just a normal Sunday SRO crowd for a non-holiday weekend in Orlando.

None of the sales staff, or support personnel, said they knew much about the Vistana changes or the ILG takeover. All they knew was that new T-shirts were on order and, more importantly, all vestiges of Starwood were being stripped away. Vistana billboards, meanwhile, blasted larger-than-life electronic welcome messages all over Orlando.

Sheraton Flex and What's to Come

On this Sunday, May 22, the Sheraton/Vistana sales team was aggressively pitching Sheraton's Flex product, a new points program that offers buyers six home resorts (rather than one) that they can reserve up to twelve months in advance (rather than eight). The home resorts include three in Florida — Sheraton Vistana, Sheraton Vistana Villages and Vistana Beach Club. The others are Sheraton's Broadway Plantation (SC), Sheraton Desert Oasis (AZ) and Sheraton Steamboat (CO).

The sales closers offered points packages starting at 52 cents per points — but one would have to buy nearly $30,000 worth of points to book a primetime week's equivalent at any of the home resorts. Existing owners can turn in their "qualifying" deeded weeks — for full face value credit — and buy whatever else they might need for 34 cents a point. That amounts to a $10,000 - $15,000 new investment to secure reservations earlier at six resorts. If one lives on the East Coast, perhaps a good deal.

Given our on-site experiences at the Sheraton Vistana in Orlando, RedWeek asked Vistana's executives if a new Westin Flex program is in the offing. Their answer: "not at this time."

One thing is certain: it will take some time for the Vistana Signature Experiences staff, and owners, to absorb whatever changes are afoot.

Final advisory to ex-Starwood owners in a hurry: Don't expect to get concrete answers soon from the owner services staff. In several recent calls to the "Elite" level owner hotline (1-888-786-3548), this reporter was given two messages: 1. None of the existing timeshare programs or procedures are changing. 2. All owners will be contacted by a new Vistana concierge to explain all of the changes and answer all questions.

About the author

This answer was provided by RedWeek's Chief Correspondent, Jeff Weir. Jeff is a California-based journalist who has covered California, Congress, and the White House. He also has roots in Silicon Valley, where he directed public relations and marketing programs for high-tech companies. He is also a timeshare owner and member of RedWeek.com.

Leave a comment

    2 Comments

  • Avatar for philiph102
    philiph102
    Aug 14, 2016 (10 months ago)

    Other than the 1st-class accommodations and the 1st-class-citizens treatment, the most important benefit a Starwood owner receives is the early-checking & early-checkout ability at all Starwood Hotels. What that means is, if your flight arrives at 6:00 AM on New York or Los Angeles, you can proceed immediately to your hotel, check in, get freshens up in YOUR room, and still make your 9:30 appointment. And, if your flight leaves at 10:00 PM, you aren't forced out at 11:00 AM. You can leave whenever you want. Terrific benefit for anyone... especially for business travelers. Will this important benefit be continued for deeded Starwood owners?

  • Avatar for esser1999
    esser1999
    Aug 24, 2016 (9 months ago) • Last edit by on Aug 24, 2016 07:37 PM.

    We went to an owner's presentation at Sheraton Myrtle Beach Plantation resort for the first time in a few years. We wanted to learn more about what the acquisition meant to our time share but we got the used car sales treatment to buy into the Flex program. After 2 hours of hearing about the sales person's awesome timeshare vacations, how great of a sales person he is, learning about his family, and told repeatedly that we need to go to Hawaii, about the only things we could glean: nothing changes for the current owners, and the Flex program may allow us to book resorts in peak times at lower amount of options. We already had 81,000 points for a re-sale at the Orlando resort that we purchased 10 years ago for about $13,000. For 81,000 options in the Flex program, the price was $28K. After trading in our current deed, the price was $15K. After we scoffed, the price dropped to $10K. The manager came out with a soft sell but did not really try to explain the benefits of the Flex program. Of course, the offer was only good while we were in the office and they would not let us take the quote sheets with us. Finally, we sat for an "exit interview" where the guy wanted $2000 to keep the same $10K offer available for 2 years + 5 days at the MB resort. We left feeling dirty about the whole experience. The sad part is that plenty of people will write a check for $15K to someone that was pleasant and scribbled a bunch of stuff on a piece of paper. The acquisition has certainly turned up the heat to sell nothingness - that is what we learned. We are concerned that this Flex program will make it more difficult for us to book resorts because others will be getting preferential treatment. As usual, the consumers lose out on big corporate mergers.