Getting BIGGER in 2000 and Beyond

Staff Writer The Timeshare Beat
December 29, 2000
A considerable amount of consolidation and aggressive growth has been unfolding this year, with some of the world's largest timeshare companies surging ahead with expansion. The biggest news of the year in this regard is undoubtably Cendant's pending purchase of Fairfield Communities, which will put Cendant squarely in the thick of everything. There is a lot of controversy and unease about this acquisition, considering that Cendant also owns RCI. It will be interesting to watch how this unfolds over the coming year.

In addition to the purchase of Fairfield, Cendant also has announced that RCI Europe, a wholly owned subsidiary, has entered into an agreement to acquire 100 percent of the share capital in Vacation Exchanges International, Ltd, trading as RCI Southern Africa Ltd, from Avis Southern Africa Limited and other minority shareholders for $48 million in cash. The transaction is subject to customary regulatory approvals and is expected to close in the first quarter of 2001. Cendant feels that owning the license in that part of the world "enhances the overall strategic direction of RCI's leadership role in the global timeshare industry", according to Cendant Vice Chairman and Travel Division Chairman and CEO, Stephen P. Holmes.

Included in this acquisition is the remaining 50 percent ownership stake in RCI Pacific (Pty) Ltd not already owned by Cendant, 100 percent of the shareholding of Club Resorts International Operations (Pty) Ltd, 100 percent of Club Resorts International IPO (Pty) Ltd and 100 percent of RCI Management Services (Pty) Ltd.

There are many who are convinced that Cendant is not finished yet in the buying of timeshare companies and other timeshare-related things. Given free rein and enough time, they feel, Cendant will control the market entirely.

Another big development came with the December announcement that MeriStar Hotels & Resorts, the nation's largest independent hotel management company, and American Skiing Company, the nation's largest ski resort operating company, have signed a definitive agreement to merge. The merged company will be renamed Doral International, Inc. and will focus on international leisure and hospitality. Doral International will be headquartered in Washington, D.C. The new company will operate, own and develop Doral-branded, year-round mountain and beach resorts, vacation villages and conference centers. In addition, the company will manage upscale hotels for third-party owners, as well as operate corporate housing under its proprietary BridgeStreet Accommodations brand. The merger combines nine premium ski resorts, 23 resort hotels, 246 hotels, 15 golf courses and four conference facilities. The company also will control prime mountain and beach real estate available for future development of more than 14,000 units. There are people who feel that this merger was a preemptive strike to keep Starwood from grabbing American Skiing, with Texas billionnaire Robert Bass (Oakwood Capital) protecting his controlling stake in ASC.

Trendwest Resorts, a long time leader in the vacation ownership industry, has embarked on an exotic journey into the South Pacific with the formation last year of Trendwest Resorts South Pacific, Ltd. Within the last year, Trendwest has developed or acquired holiday resorts in Fiji, and Australia’s Gold Coast and Sunshine Coast as well as Cairns in Tropical North Queensland. Additional properties are planned in New South Wales resort areas serving the Sydney market, and Queenstown, New Zealand. In the same short year they have become the region’s largest, and fastest growing timeshare company. This new subsidiary of Trendwest has gone with Interval International as its vacation exchange provider for the Worldmark South Pacific Club, its points based holiday club. The agreement includes all resorts in the WorldMark South Pacific Club. The initial resort properties to be affiliated with Interval are:

Other major growth with Trendwest involves the development of thousands of acres in central Washington state as their new MountainStar Resort. This project, which will take years to complete, will involve full ownership properties, retail, timeshare-- everything you need to build a whole new town. Trendwest has also added several new resorts to its USA WorldMark, the Club base, including a former Sunterra property at Steamboat Springs, Colorado; a new property in Reno, Nevada; another resort in the mountains of Arizona; the resort in the Monterey Bay area of California, and others. Major shareholder Jeld-Wen gave up this year on selling Trendwest and pulled it off the market. Trendwest's growth throughout the year has been explosive.

In southern California, Oceanside's City Council has finally approved the scaled-down plans for the Manchester Project there. As currently defined, there will be no new buildings along The Strand, though Manchester will control the property. Originally, one square block would have been built by Jim Watkins, of Winners Circle Resorts fame. The new agreement with the City Council excludes Watkins' property. Watkins intends to build a 150-unit timeshare project in twin 6-story structures on the block bordered by Pacific Street, Pier View Way, Civic Center Drive and Myers Street. Winners Circle is currently marketing their Dolphin's Cove property in Anaheim, CA near Disneyland, and they're pretty excited about the prospect of selling this new resort in Oceanside.

Marriott International has plans to set up a total of nine hotels in India by 2003. Six of them will be spread across Mumbai and Chennai while the other three will be located in Delhi, Bangalore and Goa. Marriott initially plans to introduce three brands: JW Marriott (5-star deluxe), Marriott Executive Apartments and the Renaissance brands. But here's the big news for the timeshare world: the company plans to later make an entry with the Courtyard brand and other leisure brands like Vacation Club, Village Oaks and Horizons.

You may remember that originally Marriott had the option to develop timeshare at 5 ASC resorts. Marriott dropped The Canyons location and Westgate snapped it up last April. The other locations in the original deal were at Sunday River, Maine (which has been dropped by Marriott); Heavenly, at Lake Tahoe CA/NV; Steamboat, Colorado; and Killington, Vermont. Marriott has decided to build at the Tahoe location and is going through the process for getting things rolling.

Also new or in the works this year for Marriott: new timeshare resorts on Kauai, Maui and Oahu in Hawaii; another Horizons brand, this time in Branson, Missouri, and more more more.

American Skiing Company and Westgate Resorts have closed on the sale of land and timeshare development rights at The Canyons near Park City, UT. The land will be used for the construction of the ``Westgate at The Canyons'' timeshare project in the resort's village core. Westgate purchased the land and development rights for $7.4 million and has already broken ground. Westgate's new resort in Gatlinburg, Tennessee has come fully online this year; final plans for this luxury-style resort include a health and fitness facility, swimming pools, a spa, restaurants, a theater, shopping and meeting facilities.

Ritz-Carlton is planning a 315-acre golf resort and spa in Jupiter, Florida (Palm Beach County). The Ritz' plans call for a private golf course, driving range, 94 golf villas and 21 houses on half-acre lots, a combination clubhouse and spa, and a restaurant. It will probably sell its vacation intervals here in one-fifth or sixth increments and it will have the services and amenities that made Ritz famous, such as personal concierges, stocking and preparing the units for the owners' arrival, marbled baths and other luxury touches. The Ritz's Jupiter project, scheduled to begin construction next year, is still in the early stages and the town hasn't held public hearings yet. Neighboring developments include the Bear's Club, Frenchman's Creek and Admiral's Cove.

Surrey Resorts-- having sold out their inventory in their Branson resorts-- is changing its name to Grand Crowne Resorts to better represent the direction in which the company is moving. The new organization will oversee the sales and marketing for all Surrey branded resorts, including the new Grand Crowne Resort and Country Club, located in the Thousand Hills Golf Resort in the heart of Branson. The new units at the new resort will have about 2200 sq. ft of space per unit. This is a pretty impressive sounding resort (their newest). All of these new condos are 3-bdm lockoffs, all have three kitchens and great views of Thousand Hills Golf Course. There will be a total of 315 condos at buildout, a 40,000 sq. ft. club house, 2 indoor pools, tennis courts and walking paths. The penthouse units have 25 ft. vaulted ceilings and a beautiful furniture package.

Berkley Group is quietly getting bigger, with reports that they are expanding westward into Las Vegas, Arizona and Mexico. Also, under their Patriot Resorts name, Berkley is building a resort in the Berkshires, at Jiminy Peak in Massachusetts and is branching out elsewhere whenever the right opportunity presents itself.

Carlson Vacation Ownership, Inc., created by Carlson Hospitality Worldwide as an extension of its hospitality business into the rapidly growing vacation ownership segment, and Island One Resorts, a leader and pioneer in the timeshare resort development business for nearly two decades, have signed a multi-year partnership agreement. Under the terms of the agreement, Carlson Vacation Ownership will provide marketing support to Island One Resort's current and future vacation ownership resorts, which includes support of Club Navigo, a vacation club for its resort owners.

In addition to the marketing support, Carlson Vacation Ownership will also provide value-added benefits through Carlson's global vacation ownership brands Radisson Vacation Villas and Country Vacation Villas By Carlson and sister companies which include Carlson Leisure Group and Gold Points Rewards, a network based loyalty program.

Orlando-based Island One Resorts will also develop vacation ownership resorts affiliated with Carlson Hospitality Hotel brands under the names Radisson Vacation Villas and Country Vacation Villas By Carlson, and are already actively reviewing potential sites for purpose-built Radisson Vacation Villas or Country Vacation Villas By Carlson developments in Central Florida. Both Carlson and Island One have long-standing relationships with Interval International, and future resorts will be Interval-affiliated.

Under the leadership of Deborah Linden, Island One has also formed an alliance with Ron Jon Surf Shop to create and brand a new line of timeshare resorts: Ron Jon Resorts.

In November, Carlson Vacation Ownership announced that Club Regent’s first Florida luxury development will be constructed on Ft. Lauderdale beach. Club Regent Fort Lauderdale Beach, a fractional offering, will feature 34 furnished vacation residences to be offered through individual “fractional ownerships.”

Carlson has branched out into the Caribbean, too, with a recent deal with American Resorts International for The Oyster Bay Beach Resort in St. Maarten. And there are more things going on with Carlson Vacation Ownership... Definitely getting BIGGER.

Four Seasons Resort Club, in the luxury category of vacation ownership, has construction ongoing with Phase IV of the Aviara Four Seasons Resort Club project in Carlsbad, California. Expected to be completed in summer 2001, this big project will consist of a 23,000-sq. ft. administration building and seven 3-story timeshare villa buildings totaling 90,000 square feet.

Each building will hold four to six villas in three communities of about 80 units. Each 1,670-square-foot villa will have a fully equipped kitchen; a high-ceilinged living room with fireplace, electronic entertainment equipment and seating for six, a dining area for six, two bedrooms, three bathrooms, private balconies and laundry facilities. The total buildout of 240 units is slated for completion by 2002 and is valued at $19.5 million.

Shell Vacations LLC and Greater Pacific Limited Partnership recently announced the signing of a joint venture agreement. The agreement calls for the development of an additional 150-200 two-bedroom, two bath units containing approximately 1,300 square feet at the Holua Resort at Mauna Loa Village on the Big Island of Hawaii. Under the terms of the agreement, Greater Pacific Limited Partnership, based in Honolulu, Hawaii, will contribute prime property with both ocean-front and golf course views to the venture and Shell Vacations LLC will develop, market and sell the 150-200 vacation ownership property units.

Located in the Keauhou Resort area of Kailua-Kona on the Big Island, the Holua Resort at Mauna Loa Village recently completed refurbishment of 74 one- two- and three-bedroom villas overlooking the Kona Country Club golf course. Amenities include multiple swimming pools with adjacent hot tubs. The resort is located six miles south of the village of Kailua-Kona, with its specialty shops and fine dining. The company's point-based Shell Vacations Club is being sold at the property, which is now open for both sales and owner occupancy.

Starwood Vacation Ownership Pacific, Inc. (SVO Pacific, Inc.), which previously had taken over Quintus Resorts' portion of the stalled Kaanapali Ocean Resort on Maui, got a sweet deal when Amfac sold them its share of the deal as well for $19.5 million. SVO Pacific, with Starwood's financial might behind it, can afford to finance the whole thing itself if it wants to. SVO's "Rip" Gellein promises a first class effort, 'marketed and sold in a first-class manner.' That means no sales on Front Street, and they also won't use discounted activities such as luaus to lure potential buyers. Starwood has also been nosing around the island of Kauai, where they already own the Sheraton Kauai Resort and Princeville Resort, and it is expected that they will come up with timeshare resorts on Oahu and the Big Island, too.

Starwood is also getting ready to build the long-awaited Westin Kierland Resort on the Scottsdale-Phoenix border in Arizona and at the heart of a flourishing commercial and tourism corridor. It is expected to open first quarter 2003. In the works somewhere down the road will be the addition of a luxury timeshare component to the famous The Phoenician, in the same area. Look for SVO to move very aggressively in 2001 to add inventory to its current stable-- and keep an eye on Europe and Asia for the addition of SVO inventory there, too.

Intrawest is expanding again, this time into Vancouver, British Columbia. Club Intrawest - Vancouver at Wall Centre is set to open in the summer of 2001. This will be Intrawest's first urban Club location as part of the Wall Centre being built in the heart of downtown Vancouver, just blocks from everything-- including the beach. This will be very upscale, with concierge service and everything, and Club Intrawest has dreams of expanding their urban destinations into some pretty exciting places. Club Intrawest is also building a new ski resort high in the Canadian Rockies for those who like more of an adventurous vacation than is available at the busy Whistler/Blackcomb resort. This is the Panorama Resort, in British Columbia. They are also expanding at their current timeshare resorts: Tremblant is getting 2 new buildings; the size of the Palm Desert resort is being tripled, with as many as 600 new units; and special areas for kids are being worked into the plans for all of them (so they can be as noisy as they want without bothering anybody) in addition to pool expansions and other general improvements.

Club Corp. got into fractional ownership with its own brand of private residence club, called "The Owners Club by Club Corp". Current Owners Club communities include Barton Creek in Austin, TX; Hilton Head Island, SC; The Homestead in Hot Springs, VA; Marina Vallarta in Puerto Vallarta, Mexico; and Telluride, CO (multi-unit lodge homes). Membership prices range from $70,000 to $210,000, depending on location. John Maloney is the SVP of Sales and Marketing for the Owners Club.

Hapimag. Anyone been noticing how this famous Swiss company has been continuing to grow? They will open two new resorts in the Spring in lovely old Budapest. Late this year they opened the famous Bad Gastein in Salzburg, Austria. And they now have a new resort under construction in Interlaken, Switzerland, expected to open in 2002. Hapimag is also opening new properties for its members in Florida: 144 units in Fort Lauderdale and 100 townhouses in Orlando-- both open to member useage in 2002-- and one in New York City as well. Hapimag was the first company in the world to sell timeshare-as-we-know-it and the first with a 'points' type system, too.

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