MarketBeat’s Marriott Vacation Worldwide (VAC) stock history chart (estimated earnings in white)
Stock analyst David Katz at Jeffries Group, a multinational investment bank and financial services company, rated Marriott Vacation Worldwide (VAC) a buy, while downgrading Hilton Grand Vacation (HGV) and Travel and Leisure (Wyndham) (TNL) to a hold. We attribute Marriott’s success to being one of the only developers to support a viable secondary market. At After Inside Timeshare, we’ve received few complaints from Marriott timeshares buyers, compared to other developers.
In 2016 I wrote an article, Battle of the Marriotts, published by TheStreet, an investment news service offered by the legendary stock guru Jim Cramer of CNBC’s Mad Money. The article looked into whether it was better to buy Marriott International (MAR), the hotel chain, or Marriott Vacation Worldwide (VAC), the timeshare company.
Back then I reached out to David Cortese of Magical Realty, as they specialize in Marriott timeshare resales. Those seeking to purchase a Marriott timeshare program on resale, for a fraction of the cost, will find a ready market by calling a licensed timeshare resale broker. Also, Marriott offers a buyback program for members who are at certain levels. Another Marriott expert we spoke with explained that the buyback is for select weeks. In a follow-up article, we will explain further Marriott’s secondary market restrictions.
Another advantage to buying from a resale broker is that you will receive unbiased opinions to help you evaluate what would be the best timeshare for your family. In other words, take time to comparison shop.
It’s important to look into restrictions that apply to secondary market purchases. In most cases, the savings outweigh the restrictions. However, one Developer requires that anyone who purchases their points on resale must buy 50% of the number of secondary points purchased directly from them, to “clean” dirty points. The many licensed brokers I’ve talked to will not even accept a listing for that Developer. Listing services that charge money upfront to list have no problem accepting a listing.
Legitimate resale brokers function like traditional real estate agents. They get paid at closing. No money is charged upfront for the listing.
Timeshare critics say that there is no financial justification for buying a timeshare, noting that the cost of the initial investment can run into the thousands of dollars, plus rising maintenance fees, and the resale market is uncertain. Considering that the contract is signed for a lifetime, the commitment requires a consumer’s leap of faith.
According to David, “Timeshares are great for those who are looking for an alternative to paying hefty hotel prices. You pay less than you would by renting directly from a hotel or resort.”
As far as the critics, David explains why some timeshares don’t make financial sense: The inferior timeshares always rent for less compared to maintenance fees. If you like staying in 2 or 3 star brand timeshares, it’s not worth owning. However, if you like staying in 4 or 5 star brand timeshares the break even point on a timeshare purchased directly from a developer can be 20 plus years, whereas the breakeven point on a timeshare purchased in the resale market is usually within 3-5 years.
When booking using timeshare points, it’s always a good idea to do your timeshare math by equating what it would cost to book online, factoring in the initial cost by prorating that amount over your life expectancy. A timeshare might make financial sense at age 50, but not at 70.
Our family has owned a 2 BR Maui Hill unit for decades. Maintenance fees for 2023 are about $1,300 a year. Compared to booking online, the price for a 2 BR week stay in 2023, for the same week we own, is $4,833 (not including 10.25% tax, 4.17% city tax, and a 3% Tourism fee)!
As I look back at over 1,000 reports from timeshare members and owners we’ve received since 2016, those who reached out primarily to report unfair and deceptive sales and lending practices, there might have been one or two complaining Marriott owners. Attorneys who practice timeshare law tell me that they rarely hear from Marriott owners.
The lack of a fluid and organized secondary market spawned the exit industry. Recently, the U.S. Treasury Department sanctioned a Mexico cartel that supplies the U.S. with Fentanyl and timeshare exit scams. The Missouri exit company, Square One, the lofty-sounding Consumer Law Protection, and other named defendants, made off with millions in exit scam revenue.
Think what would happen to the primary home market if you could not sell a house with an outstanding mortgage, or were not able to give it away, even without a mortgage. The Internet is flooded with complaints from members who, either because of being deceived or falling on hard times, find they are unable to give back or sell their timeshare. While some resorts do offer a responsible exit, there are too many that force the member to fight an uphill battle. When timeshares are voluntarily surrendered, they are typically surrendered at no value to the owner. The developer takes the points back and resells them for full value. Most charge a fee.
Stocks Bonds and Timeshares
Having read the comment by Charles below, as a former stockbroker, I can attest that many people buy stocks on impulse. I call it the greed/fear factor. To sell something, disturb the buyer or dangle a carrot.
I served for almost a year as manager of Duval County, Florida, Seniors vs Crime (SVC), a Special Project of the Office of the Attorney General (OAG). The Florida timeshare division, DBPR, had started to refer timeshare complaints to our office, which was located at a sheriff’s substation. Unfortunately, one of the Developer law firms demanded that I be removed unless I agreed to never take a timeshare call again, even on personal time. I could not agree with that. A DBPR supervisor explained to me that DBPR is not a consumer protection agency, and cannot compel a company to cancel a contract, or mediate a dispute. Seniors vs Crime can. Also unfortunately, after I left, I was informed by another sleuth that volunteers were no longer allowed to accept timeshare complaints.
The late Seniors vs Crime undercover Super Sleuth Glendora Goodwin, (known as GG to her friends), warned that she always is suspicious of a scam if: “You’re told to act immediately, or you must act on the offer the same day. Like timeshare sales agents, stockbrokers touting hot stocks are guilty of this too.
Super Sleuth Glendora Goodwin
Another of Ms Goodwin’s warnings is to suspect a scam if:
“A company has a name that is intended to sound like a government agency or a well-known company.”
Like Consumer Law Protection
Let us know about your timeshare experience – good or bad.
Related Article: Should I Buy a Timeshare or Rent One?
Thank you, Irene, I have absolutely no idea about stocks and things, any mention of “investing” and I automatically think “scam“, I attribute this to not having any knowledge of the subject and probably due to past headlines of huge “frauds” in that field. In a way, timeshare has become a bit like that, with no actual knowledge of what the product is, just the wonderful “dream” told by the sales agent. There is a difference between the two, with timeshare you purchase on the day and it is only after that you get to check things out, going for the stocks etc you will more than likely do your homework or like me don’t get involved.
Moving to Marriot, the only inquiries that AIT has received have all involved the contracts sold in Spain, even then they have been few and far between. When they have come in, it is a result of a “cold call” and they want to verify what they have been told, and very few have actually asked for a genuine law firm to consult, they all appear to be fairly “happy” owners. It should also be said that Marriot is the first to comply with all court judgments within days of receiving them, they may be appealing but they are following the correct procedures. They also included the court cases in their annual reports along with how much they are setting aside, well, they are responsible to their shareholders.
Timeshare is not the only “industry” which suffers from scams, but it is one that seems to have much more than its fair share, and they appear to be never-ending with new ones emerging on a regular basis. I often ask the question, if you knew about all the potential scams and the amount of money lost, would you have purchased your timeshare? Not surprisingly the answer has always been no. The reason you don’t know about them is very simple, it began at the very first presentation, everything you were told in order to convince you to buy there and then with no ability to do any checking first. That is the root of all the timeshare problems, the pressure to purchase immediately.
That is all for this week, please note that next week we shall only be publishing on Friday, everything is on hold as I take a break, Baby Dog is not happy about this because I’m off without him. Have a great weekend.