Your calculations are perfectly correct and they panic when they have a savvy prospect seated in front of them. They usually don't expect prospects to question them back about the Rewards program because the sales presentation dangles so many freebees in front of them that they get google-eyed.
What we need out there are more prospects like you that question various elements of their presentation.
We did the tour last October. The 3BR townhome is an impressive value @ $26.5K; $1K MF, 125K EOY pts, 250K incentive pts plus 40K pts self-referral. Including the pts for the tour, over 300,000 pts was very tempting; but we passed.
I fully agree with the principle of Fair Value Exchange. As stated previously, MVCI and Marriott Rewards need tighter brand integration. Discounting is a very smart strategy. Offer added value through exclusive Owner-Elite Rates and Pointsavers.
Postscript 6/10: Video featuring Bill Marriott regarding the Marriott Vacation Club 25th Anniversary:
Click image to activate
We just went on a sales tour for Marriott's Vacation Club at Shadow Ridge in Palm Desert. The next phase of the Enclaves is in pre-construction.* LesliePamel's post about the pricing at Lake$**** Reserve prompts this post to provide another point of reference.
For July 4th, $hadow Ridge is 100% booked including the model units at the Enclave. We looked at 2 units in the $ales model including a 2 bedroom 2 bath w/lock-off and a deluxe 2 master bedroom 2 bath w/lock-off.
According to MVCI sales, 25th Anniversary ~di$count~ pricing for Enclave villas is as follows:
2 Bedroom 2 bath w/lock-off
Gold $17,900 w/75,000 Pts EOY
Platinum $25,500 w/110,000 Pts EY
Deluxe 2 Master Bedroom 2 bath w/lock-off
Gold $22,500 w/75,000 Pts EOY Maintenance $908
Platinum $32,400 w/110,000Pts EY Maintenance $919
Here are the purchase points incentives for the Deluxe:
100,000 (Incentive)+ 50,000 (Self-Referral)+ 75,000 (2009 occupany)=225,000 Marriott Rewards points
150,000 (Incentive)+ 50,000 (Self-Referral)+ 110,000 (2009 occupancy)=310,000 Marriott Rewards points
Tempting? You should have seen the stunned look when we passed. For one, the Enclave units are tiny and feel like standard hotel guest rooms with queen size beds, modern finishes and furnishings There is very little storage and closet space so you would feel like you were living out of your luggage throughout your vacation. Even if you did take your clothes out, you'd have to place empty luggage in the car! The master bathroom is slightly smaller than a hotel bathroom and there is no jacuzzi or tub but a shower!
Aside from the space issues, the sales person seemed to lack any point of reference about what you get when trading for points and redeeming 75,000 or 110,000 points for nights in a Cat 6, 7 or 8 hotel. That's when I realized that Marriott associates are ineligible to participate in Marriott Rewards and cannot be expected to understand owner expectations about Fair Value Exchange. It's a total disconnect.
For exterior and interior photos of Marriott Vacation Club Enclaves at Desert Ridge in Palm Desert, see Marriott Vacation Club Enclaves@Shadow Ridge in Palm Desert
Marriott Vacation Club Enclaves at Shadow Ridge in Palm Desert
DO YOU RECALL THE 1988 'HONOURED GUESTS AWARDS '?(THE FORERUNNER TO MR.)
TWO Q8 LEVEL AWARDS FOR 280,000 POINTS WOULD PROVIDE YOU WITH:
16 NIGHTS IN ANY MARRIOTT HOTEL WORLD WIDE OR;20 NIGHTS AT SELECTED RESORTS; 4 DINING CERTIFICATES FOR MARRIOTT HOTELS; 14 DAYS FREE RENTAL FROM HERTZ (NOT JUST 25% OFF LIKE TODAY);TWO ROUNDTRIP AIR TICKETS ANYWHERE ON THE SYSTEM-JAPAN-AUSTRALIA EUROPE ETC; 50% OFF A CRUISE WITH THE PURCHASE OF ONE TICKET.
AHHH, THEM WERE THE DAYS - BEFORE MARRIOTT BECAME A RATHER MEAN UNREWARDING COMPANY.
My sentiments agree with Lyonswife; but I think there is more to be said. Anticipating a Guest Satisfaction Survey from our rather long stay at Desert Springs, I kept a list of the associates we interacted with. What's so amazing is that the list includes nearly 20 associates.
These are the associates who made check-in a pleasant experience to pouring ice water during dinner or giving directions so we wouldn't lose our way. What about the engineer who comes to fix a loose patio door cylinder and does so beaming with pride; or the housekeeper who rings the bell to deliver extra towels an instant after you call? These are the touchpoints that add up to make a stay truly memorable so that you want to go back.
Marriott Rewards is a wonderful benefit for our loyalty, but Rewards would be meaningless to me w/o the spirit of service. I think it is really important to remind ourselves once in awhile that experiencing knock-your-socks-off service while staying at Marriott is the reason for high expectations and Rewards is a PLUS.
Marriott Rewards still deserves a lot of credit, even in these hard times.
The focus of the program is on value added, in my view, and as a Platinum Premier member I see the extra mile that every associate goes to make me a satisfied and returning customer. I also value the input and comment process--this ensures that I get my point(s) across to the folks at the top of each property.
I cannot ever remember another loyatly program (and I have belonged to many) that rewarded me as much in big and little (but appreciated) ways as does Marriott Rewards.
Yes, the cheap rewards (around the world etc.) are gone but in their place we have rewards at reasonable levels we can enjoy.
Keep up the excellence Marriott Rewards--I appreciate the loyalty of your loyalty program!
"Yes, the cheap rewards (around the world etc.) are gone but in their place we have rewards at reasonable levels we can enjoy."
For the record, I understand where that's coming from but "cheap" is not a sentiment I agree with. LesliePamel started this discussion with a focus on Rewards Points for timeshare exchange when electing to 'Trade for Points'. The ~expectation~ of 'Fair Value Exchange' supercedes what is conveyed by 'cheap,' in my opinion. To date, the sales tours I've experienced have failed to address this expectation.
Marriott International and Marriott Vacation Club clearly understand the Marriott Rewards incentive as a way to sell timeshare. I do not find fault with that. The lack of 'Fair Value Exchange' when trading for points REDUCES the overall value proposition especially for a seasoned timeshare owner like myself.
Now, when one of your referrals purchase, the referring owner receives 100,000 Marriott Rewards points. In the case of the Enclaves, you get more points from a referral than you do when trading for points. There's a HUGE disconnect there, IMO.
If Marriott were to consider adjusting Marriott Rewards UPWARDS when trading for points, it would REINFORCE the VALUE OF VACATION OWNERSHIP. Owners like myself would not feel shortchanged when electing this usage option and recommend without reservation the value of vacation ownership with Marriott. The contention expressed by so many owners and non-owners that the 2009 Program Changes was a devaluation is firmly rooted in the principle of Fair Value Exchange.
While Marriott may be the best award-winning loyalty program out there, the principle of Fair Value Exchange is an ingredient yet to be mastered by the Customer Experience and Marriott Rewards departments. I do have high expectations that Marriott will step up and make adjustments in this direction.
Gshock, I also have an HGA award list from 1988. That was the first year I joined Marriott timeshare. I liked to use 2 x the Q8 level ~ 4 flights, 20 days in an hotel discount cruises,and a free rental car for 16 days. NOW THAT WAS A VACATION.
I appreciate Reward levels must increase in proprtion to the cost of hotel rooms. However back in 1988 Marriott gave me 110,000 points for exchanging my timeshare . THEY STILL OFFER ME 110,000 points. As you know that hardly buys a pack of potato chips now - well 3 nights in a cat 6 hotel actually. But that is no comparison to the good days of'88.
I have in front of me one of many HGA statements from the 80's and on the back is the award schedule.
Also in front of me is an American Airlines AAdvantage statement dated 10/31/87. Award Code 30A (30k miles) was a confirmed upgrade for 2 passengers from any coach class ticket to first class. Code 60I (60k miles), two coach tickets to Europe from the lower 48.
I still cry when I pull out these yellowing pieces of paper.
This quote from Bill Marriot regarding 2nd Quarter results delivers unexpected good news:
"Our timeshare business rolled out a successful 25(th) Anniversary stimulus promotion in the second quarter, which significantly improved timeshare contract sales compared to first quarter levels, while significant cost reductions helped the bottom line. We expect timeshare to deliver positive cash flow in 2009."
Vacation ownership appears to have recognized value in a down economy. Smart timeshare owners know that the 'trade for points' usage option does not deliver a fair value exchange. With rack rates to rent a villa with two bedrooms hovering near $300 per night, an annual maintenance fee of around $1000 maximizes the bang per buck because the owner gets 7 nights. This works out to be about $72/bedroom per night plus you get a living/dining area and a fully-equipped kitchen with washer/dryer too.
With Marriott projecting timeshare to deliver a profit in 2009, I'm optimistic that Marriott will be even more innovative with initiatives to tighten brand integration with Marriot Rewards and retain and grow owner loyalty.
Thanks for posting the summary.
Comparing business segment performance (p13*), I calculated that Timeshare accounted for 13.8% of the revenue compared with North American Limited-Service which delivered 18.5% of the total segment revenues of $2,542 million in Q2/2009.
Measuring performance by number of Rooms/Suites (p16*), Marriott Vacation Club has 11,858 rooms/suites compared to 268,324 Rooms/Suites in North American Limited-Service which includes 5 brands: Courtyard, Fairfield Inn, Springhill Suites, Residence Inn and Towneplace Suites.
With less than 20% of the Rooms/Suites, Marriott Vacation Club's revenue performance is outpacing the revenue of 5 domestic limited service brands combined. Marriott's timeshare business model is working for them and a great value for owners.
Bill Marriott acknowledges that, "marketing worked". This includes the recent launch of Marriott-Vacations.com for the 25th Anniversary of Marriott Vacation Club. (A feature-rich website, btw) With the integration of Marriott Vacation Club resorts into hotel categories completed, and the Pointsavers promotion, 'Redeem 4 nights, Get the 5th night Free' positioned to deliver rental revenue, Marriott is very optimistic that "timeshare will show a profit in 2009."
I think it takes more than innovative marketing for timeshare to turn this around. Timeshare is highly dependent upon owner perception of value. As Marriott's Friends & Family Referral Program makes evident, owners are the best evangelizers of timeshare. Marriott values referrals so much that they will give 100,000 points to the referring owner when a sale is closed. In the case of the Enclaves, the incentive is more than the value of the points option.
I hope Marriott will rethink this tactic. By adjusting the value of 'Trade for Points' upwards to achieve 'Fair Value Exchange', owner confidence and trust in Marriott will increase. Referrals are more likely to follow, more sales are likely to close.
* Earning Reports
The July 4th observation supports a decision I made earlier this year to purchase a Gold Enclaves Deluxe 2 BD Master unit--never intending to stay there.
I reserved 2 separate 1BD Master units (split my 2) for July 4 week in 2010 and already traded one of them for my preferred week at Newport Coast Villas (September 2010) which has only 2 BD non lock-off units.
This allows me to turn in the NCV I own for 110,000 points or trade to another great property since I own Platinum there.
I also have another 1 bed Master reservation left over! Which presently would take me to a 2 bedroom in Tahoe, Sedona, Mexico etc.
In fact, we are going to Shadow Ridge (the first phase before Enclaves) over New Year's 2010 in a 2 BD full villa this year on a trade of 1/2 of the 2009 Enclaves we weren't even allowed to occupy this year because they weren't ready.
So, if used correctly, Enclaves can be a great value I think.