Marriott Takes Next Step Towards Spinning Off Marriott Timeshare Entity June 30, 2011
Posted by John Stephens in : Marriott Timeshares, News & Events, Ritz Carlton, Timeshare Resale , trackbackThe Marriott Vacation Club is closer to becoming a separate timeshare company.
According to Forbes.com, Marriott International filed paperwork earlier this week with the U.S. Securities and Exchange Commission designed to transition Marriott Vacation Club into a separate publicly traded timeshare company by the end of the year.
The new company will be known as Marriott Vacations Worldwide Corporation.
In a press release issued by Marriott, Stephen Weisz, president and chief executive officer of Marriott Vacations Worldwide Corporation, said, “Our filing today is an important step toward our spin-off, as we continue to be on track to launch our new company by year-end 2011. With the spin-off of Marriott Vacations Worldwide, we look forward to tremendous opportunities to build our vacation ownership business and deliver value to our new shareholders. We’ll have a new corporate name to complement our new future but the names of our industry-leading brands, Marriott Vacation Club, The Ritz-Carlton Destination Club, and Grand Residences by Marriott, and our focus on delivering outstanding vacation experiences to our over 400,000 owners, won’t change.”
Marriott officials continue to state publicly that there will be no visible changes to consumers as a result of the transition. In the July issue of industry trade publication Developments Magazine, Weisz said that “this transaction will not affect our Marriott Vacation Club owners or Grand Residences by Marriott and Ritz-Carlton Destination Club members. They will see no changes in the branding of their properties, services, usage options, or use of Marriott Rewards points to access Marriott International’s hotels and other benefits.”
While Marriott owners are understandably concerned about the potential ramifications of such a move, the perception is that Marriott International is the one who stands to gain from the separation.
In that same issue of Developments, Marriott Vacation Club Vice President Ed Kinney said “we have $1.5 billion in inventory in our pipeline.” That’s some major inventory that Marriott isn’t moving anytime soon, considering that the entire U.S. timeshare industry reported total sales of $6.4 billion last year, only up 1.9% from 2009, according to the American Resort Development Association.
With stagnant sales and Marriott International’s stated desire to concentrate on the franchising and hotel management side of their business, it’s no wonder that they want to proceed with an amicable divorce.
The irony is that the Marriott timeshare brand is the strongest brand in the timeshare industry. Marriott timeshare weeks hold their resale value better than just about any brand in the industry and weeks tend to sell quicker than anyone else. It is this brand strength that owners are most concerned about losing if the spin-off leads to significant management changes at Marriott Vacation Club.
I can’t see where MVC would try to fix something that isn’t broken by tinkering with the brand or the level of accommodation and service that owners have come to expect. The issue is a long term one, since cutting the umbilical cord from the mother company could mean even slower development plans as the company reacts to its new status. And even more Wall Street pressure to perform with no hiding behind Mom’s skirt when times are tough.
The good news is that there are plenty of Marriott timeshare resales and timeshare rentals at wonderful resorts around the world. You can browse those weeks by clicking on the BuyaTimeshare.com website here.
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