|
 STREET TALK:
Week of June 25 - July 1, 2004
" The theory of a free press
is that truth will emerge from free discussion, not that it will be presented perfectly and instantly in any one
account." -- Walter Lippmann
Street Talk is a compendium of tips, facts, gossip,
rumors, speculation and editorial comment.
PUBLISHED ON FRIDAY
E-mail: news@thetimesharebeat.com |
Email: street@streettalkblog.com
Four
Seasons residences and residence club on the high seas?
Why not? Finland's Kvaerner Masa-Yards has signed a conditional contract with FS
Ocean Club, managed by Miami-based Ocean Development Group,
to build a 42,500-ton, 700-passenger " residential" vessel that will be branded, managed and operated
by Four Seasons. It will be fitted out with approximately 100 residences varying from 125 square meters to 320
square meters. Ten will be sold as timeshares and the remaining 90 will be sold as condos prices range from $4
million to $12 million.
All the cabins will be sold as residences and all of the units will be available to residents only instead of having
a mix of residents and cruise vacationers. The ship will, of course, be named the
M/S Four Seasons.
The agreement includes an option to contract a similar vessel
to be exercised within year 2005 as soon as the sales targets for residences have been reached for the second vessel.
Read more about it here: Kvaerner
Masa-Yards Inc. signs conditional contract for residence ship
Email: street@streettalkblog.com
|
IN THE WESTERN Half of the USA:
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ARIZONA:
PRESCOTT: We've talked about it
before and we're doing it again. Why is there no timeshare in this wonderful little city? It's got a restored old
downtown that is a pure delight it's got scenery it's got shopping it's got the world's oldest rodeo it's got
lakes it's got activities up the ying yang it's got a casino it's got charm-- it's got everything vacationers
could ask for in a destination. And it's only an hour and a half from Phoenix, up in the cool mountains. No smog,
no stress, and unlike the Valley of the Sun it isn't DAMNED
HOT in the summertime.
Last year someone proposed a parking garage downtown, with a
hotel/condominium project on top of it. Hilton was mentioned, and timeshare. Unfortunately that proposal died. Nor
has Robert Drake's Granite View Resort gotten anywhere, as far as we can determine. Lots of someones have been
sleeping on the job about this area, though retirees have discovered it. Land prices are still reasonable there.
It's only a short drive from Sedona, and just as beautiful out in the Granite Dells. Someone get on this, OK? Then
hire us to market it for you online. We like it there, and we know how to do it. 
- YOUR COMMENTS:
- June 26: --" For
anyone who lives in Arizona and works
in the timeshare industry Prescott is a dead end nowhere dump. Sure it is cute and quaint, and cooler than Phoenix
in the Summer. But Hades is cooler than Phoenix in the summer. Let's face it. It is like going to Lawrence Welk
in Cathedral City, CA. No one really wants to be there. They want the Escondido (San Diego) resort. Prescott is
too far from anything!!! To sell effectively today the resort, in this critic's opinion, needs to be somewhere
where people want to be. Florida is nice but if you are not in Orlando or on the beach who cares. In the great
state of Arizona, if a resort is not near the Grand Canyon, IN Sedona, Tuscon, or Phoenix, who cares. -Living in
and Loving Flagstaff"
- AND: --" RE:
To sell effectively today the resort,
in this critic's opinion, needs to be somewhere where people want to be.' That's typical of the shortsighted view
prevalent in the industry, and it's nonsense. You build it, then you make people want to be there. It's called
MARKETING. Who the hell would ever want to be in Flagstaff unless the place was marketed to them first?"
- June 27: --" If
Flagstaff is so hot why is there only
one resort there? What a moron. WorldMark has little properties in places in Arizona no one has ever heard of,
like Overgaard and Pinetop. A few years ago, who wanted to go to Branson? You put a place on the map by marketing
it, like the previous poster said. Prescott is a nice place, and it isn't too far from anything. Ever heard of
a Destination Resort? Prescott is doable."
E-mail street@streettalkblog.com
CALIFORNIA:
NAPA: STOP THE PRESSES! Some
of y'all are aware of how difficult (say nearly impossible) it is to get timeshare into the Napa Valley, a highly
desired ownership and exchange venue. Well, Shell Vacations has done it. A little birdie tells us that Shell has closed on the only
remaining piece of property in Napa that is zoned for timeshare. The mixed-use development will comprise of approximately
200 units and groundbreaking is anticipated within the next 90 days.
Full details should be forthcoming soon, so watch the timeshare news
section for the next week or so...
NEWPORT BEACH: JC Partners
International, LLC has submitted a letter to the City
Council, on behalf of Lido Marina Partners (LMP), requesting initiation of a zone change and specific plan for Lido Marina Village
and the abutting commercial properties on the north side of Via Lido. The letter indicates that their current thinking
includes development of a coastal resort with a boutique hotel and vacation ownership totaling no more than 90
units with ancillary retail, spa and waterfront dining. They also envision a new home for the Elks Lodge in the
planning area. Question: Who is involved in the timeshare portion of this proposed project?
SOUTH LAKE TAHOE: There's a
new kid in town. Sierra Shores, a new, exclusive development of 16 lakefront residences, is offering fractional
ownership in a gated community located on 270 feet of beach. Prices start at $550,000 for a quarter ownership and
$1.75 million for full ownership. Sales and construction are expected to commence in summer 2004, with completion
estimated for December 2005 or sooner. This is a Playground
Destination Properties Inc. (an Intrawest company)
project. Corinne Huntress
is the director of sales.
PALM SPRINGS: Fairfield
plans to build a 254-unit vacation timeshare project on South Palm Canyon Drive-- as we have mentioned more than
once in the past year or so.
The city Planning Commission has reviewed preliminary building location plans for the timeshare complex, which
is subject to more city reviews and hearings for architecture, landscaping and other issues.
The development would be built on the west side of South Palm
Canyon, between the Tahquitz Creek Channel and Mesquite Avenue.
The project has been in development for the past year, but there is no set timetable for beginning construction.
It is slated for a parcel that had previously been targeted for a 210-room hotel and 176 timeshare units, dubbed
Star Canyon Resort
under previous developer New Millennium Devlopment Inc. That project, approved in 2000, was slated to include a Radisson Resort
as well as timeshare units.
In addition to working with city planners, Fairfield is also coordinating excavation plans at the site with the
Agua Caliente Band of Cahuilla Indians, since part of the property being used for the development was once an Indian
burial ground.
Don't pack your bags yet, but the project is finally and officially on its way. You heard it here first.
E-mail street@streettalkblog.com
COLORADO:
ASPEN: The St. Regis Residence Club Aspen
is scheduled to welcome its first members in early 2005. The first fractional residential property under Starwood Hotels & Resorts'
St. Regis group of luxury hotels, The St. Regis Residence Club Aspen recently initiated the sales process, and
sales are strong. Membership prices for 1/11th fractional shares range from over $300,000 to over $1 million, depending
on the size of the residence and the membership plan. With only 25 two- and three-bedroom residences located in
the East Wing of the existing St. Regis Aspen hotel, availability is limited. Better hurry.
Yowza!
E-mail street@streettalkblog.com
OAHU
HONOLULU: It's time for ARDA to step up to the plate again in the great taxation fight, and make
no mistake: Amy Hirano,
executive director of ARDA Hawaii, is already at bat. A new bill introduced to the City Council would tax timeshares
in areas zoned for apartments considerably less than timeshares in a hotel/resort zone. The bill approved by the
committee would allow timeshare properties in apartment-zoned areas to be classified as an " apartment" and pay the lower apartment tax rate, currently $3.75 per $1,000 in valuation. The properties must have had 50
percent or less of their units in timeshare before Dec. 31, 1985.
The rate for property classified as hotel/resort is $10.63 per $1,000 in valuation, rising to $11.37 after July
1. That's a really big difference. Whose bright idea was that?
The bill now moves to the full Council for a public hearing
on July 14.
Hey, timeshare is timeshare. Go Amy!
HAWAII:
BIG ISLAND: Kamehameha
Schools has begun demolition of the old 454-room Kona
Lagoon hotel, completed in 1974 at a cost of $10.5 million,
as part of the recently announced efforts to upgrade the Keauhou Resort area south of Kailua-Kona. The Kona Lagoon
has been closed since 1988. The grounds of the Kona Lagoon feature archaeological evidence of a once-thriving Hawaiian
culture in the Keauhou-Kahaluu area. There are petroglyphs and three significant heiau, all of which will be carefully
preserved.
The hotel will be replaced with a cultural preserve at the historically
significant north end, and timeshare units at the south end. There is no exact timetable when the timeshares development
will commence, and we don't know yet who will brand/sell/market, etc. the project or how big it will be. Anyone
have any info on that?
E-mail street@streettalkblog.com
NEVADA:
LAS VEGAS: Colony Capital has gotten final approval from Nevada gaming regulators for a license,
clearing the last remaining hurdle for the company to complete its $280 million purchase of the Las Vegas Hilton
from Caesars Entertainment.
The company plans to spend nearly $60 million immediately to upgrade and remodel the rooms, reconfigure the casino
and replace all the slot machines with the latest ticket-in, ticket-out technology, and revamp all of the property's
restaurants and bars.
The long-term future of the hotel is still in the air. Some rumors have suggested Colony may want to convert some
of the 3,000-plus rooms to timeshares or even demolish some or all of the hotel to start over, but those plans
are way down the road.
By the way, Hilton's timeshare tower on that property is a separate
deal and was not included in the sale.
MINDEN: It looks like developer
John Serpa
might not to get to build his Clear Creek Ranch project after all. A Minden judge recently ordered the denial of the
project at the head of Clear Creek Canyon in Northern Douglas County, saying the June 3 approval by the county
commissioners was arbitrary.
District Judge Dave Gamble ordered Douglas County commissioners to deny the Clear Creek Ranch subdivision.
The plan proposed by Serpa would develop 221 one-acre lots and
155 8,000-sq-ft lots. The development consists of 366 single-family homes and 18 timeshare or guest lodges associated
with a private golf course.
Deputy District Attorney Tom Perkins said the next step will be up to county commissioners. Stay tuned.
E-mail street@streettalkblog.com
OREGON:
SALEM: In 2002 Fairfield
opened a call center in Salem, which they closed 18 months later. They blamed the National Do Not Call Registry
for the shutdown. Now Trendwest is taking over Fairfield's former offices, opening a new call center that should
create about 120 full-time jobs and maybe another 80 part-time jobs.
Workers at the new operation won't be making cold calls or selling timeshares directly as Fairfield's workers once
did. We guess that means they'll be calling from lists and setting appointments?
E-mail street@streettalkblog.com
TEXAS:
GALVESTON: Escapes! has begun
construction on its eighth resort, Escapes! to the Gulf
at Galveston. Slated to open in 2005, the resort is
a public-private partnership between Galveston County, Texas, and Escapes!, in which the two entities are sharing
resources to construct a beachfront public park and a private, mid-rise condominium on Galveston Island.
The joint projects, on Galveston Island's West End, include a $16 million, approximately 75-unit condominium resort
for Escapes! members-- the only resort fronting the beach-- a newly completed 3,314-square-foot public beach pavilion,
an educational wetlands preserve, beach access points and public and private parking.
Escapes!' timeshare resorts include: Escapes! to Bella Vista
Village, Escapes! to Hot Springs Village, and Escapes! to Cherokee Village, all in Arkansas Escapes! to StoneBridge
Village and Escapes! to Branson Yacht Club, both in Branson, Mo. and Escapes! to the Gulf at Orange Beach, Alabama.
A resort in Panama City Beach, Fla., will open later this year.
We'd like more information about the resort in Panama City Beach.
Anyone?
E-mail street@streettalkblog.com
WASHINGTON:
BELLEVUE: Vacation Internationale
(remember, they wrested control away from Sunterra Pacific a while back and took back their original name) is both the oldest points-based
timeshare company in the US and now the largest owner-controlled timeshare company in North America (not being
controlled by any developer). The Board of the Owners Association recently passed a $15 million assessment to accelerate
the refurbishment and upgrade of hundreds of condominium units throughout the VI resort system. By use of previously
designated reserves, the Board has designed a program to complete the work in 2 years but allow owners to pay for
it over 3 years. Not a bad deal, and we'd bet the owners will be glad to have those units brought up to snuff!
E-mail street@streettalkblog.com
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EASTERN HALF & MIDWEST USA
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MARCO ISLAND: The 7-story Sunset Cove Resort and Suites
at 571 W. Elkcam Circle celebrated a June 17 topping off. Bruce
Sonneborn, one of three general partners in the development,
said they have pre-sold about 40 percent of the inventory so far, to the tune of some $15 million.
The resort will have 36 units: 24 three-bed two-bath units and 12 three-bed three-bath. Apparently many people
are buying multiple weeks, and Sonneborn expects to end up with a total of about 500 owners for the 1,836 weeks
available. Three people, for example, have bought 16 continuous weeks, and others have bought between eight and
11 weeks. What was the commission on those, and who deserves kudos for those sales?
Costs per weekly unit run between $20,000 and $40,000 depending
on location and time of year.
Besides luxury fittings, the complex will offer room service, maids, a concierge, a fitness center, a 14-slip marina,
a bar/restaurant, and a theater on the ground floor.
To refresh your memory, Sonneborn and his partners -- Lawrence Duprey and Stanley Lieberfarb
-- make up Sunset Cove Development, LLC. On Marco Island there are five timeshare projects. Four of them are
owned by Hilton Grand Vacations the other was developed by Sonneborn and Lieberfarb. All of those projects,
built in the 1980s, sold out in the early 1990s. The developers purchased the land for the project in 2001 for
$1.5 million. Sunset Cove is affiliated with RCI.
E-mail street@streettalkblog.com
ILLINOIS:
NORTHBROOK: Shell Vacations recently
announced that the company had its most profitable first quarter on record with net vacation ownership sales just
under $39 million of its Shell Vacations Club points-based product.
The company, with its thirteen on-site and off-site SVC Preview Centers also reached record closing percentages
and volume per tour (VPT) numbers, increasing the company-wide VPT by about 20% for the same period in 2003.
KUDOS
to all of you guys and gals in the trenches who did the deal! We hope you're grinning all the way to the bank!
E-mail street@streettalkblog.com
SOUTH CAROLINA:
MYRTLE BEACH: Despite protests
and threats from the timeshare industry, Horry County officials will push ahead with plans to impose a $5 nightly fee for nonowners.
After months of debate, it remains to be seen whether Horry County Council will support the fee or postpone a final
decision until a study can be conducted into the local economic impact of time shares.
The council's Administration Committee voted June 21 to send the proposal back to the full council. The second
of three votes on the fee is now scheduled for the council's July 6 meeting. See the full story in The Sun News:
(external) Time-share fee gets another vote
E-mail street@streettalkblog.com
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Rumors Rumors Who's Got the Rumors?
|
•
Is there any truth to the rumor that Amy Lawrence, who had been a director of marketing in New York for the Hilton Vacation Club,
will soon become the DOS for HGVC in Orlando?
- YOUR COMMENTS:
- June 25: --" Amy
Lawrenece D.O.S. at The Orlando Hilton
Vac. Club?????? Where did you get that from? Mike Carter is doing a great job, they'd have to be crazy to replace
him!!!!! Everyone really likes Michael, he is a great guy to work for! ... So please put this silly rumor to rest!!!!!"
- June 26: --" Amy
is the Director of Owner programs in
Hgvc's marketing dept. She's incredibly talented and would be successful in whatever capacity she served Hilton."
•
Is there any truth to the rumor that Summer Bay
Resort is in the process of wrapping up an offer for
a very old timeshare in New Orleans?
•
Is there any truth to the rumor that Harold Derrah the former president of Trendwest
South Pacific/ Australia joined Marriott Vacation Club International
to expand MVCI into the South Pacific, Asia, Australia,
New Zealand and Middle East?
E-mail street@streettalkblog.com
| Quotable quotes: " The secret of life is honesty and fair dealing. If you can fake that, you've
got it made." -- Groucho Marx |
• We continue to get questions concerning the rumors that Cendant is
buying or negotiating to buy Sunterra Resorts. (If such a deal is going down, would Cendant marry Sunterra to Fairfield
or keep it as a third separate brand?) We asked Cendant spokesman John Barrows if there is any truth to those rumors
and here is his response: " It is a
matter of longstanding Cendant Corporation policy that we do not comment on rumors or speculation surrounding potential
transactions." We know what we think that means, but
what do YOU think?
- YOUR COMMENTS:
- June 25: --" If
Cendant does buy Sunterra Resorts, it
will be given to Fairfield to ruin... er, I mean, added to the Cendant Timeshare Resort Group with Fairfield and
Trendwest to grow and prosper."
- June 26: --" The
relevant phrase there is `potential
transactions'. If there were nothing going on, those words wouldn't have been used. Cendant would just say No."
•
This
(long) message came in too late to post in last
week's discussion of resales, but we think it needs
to be read. What do you think about it? --" Sticking
one's head in the sand is not the way to fight resales.
The previous poster thinks RCI Points are the solution. Really? So, what are the buyers of RCI Points to be told
at your table? " If you ever do decide to sell what we are selling you, it will be worthless, because you will
transfer a week which then must be 'upgraded" at major expense" .
I think not. So, you can choose to not disclose
and take the fall, or realize that new timeshare sales requires content that adds value to justify the higher price.
Can't do that? The good news is that you could sell resales. In fact, even if you could do that, resales is not
a bad idea. I mean, what's wrong with selling the same product for half the price of the guy across the street
who is still bellyaching about it?
Besides, the same poster is looking for a resale
'antidote' in the wrong place. Every idea and scheme I have ever heard share one fatal flaw: Their intent is to
diminish the resale's functionality as a means of making the developer's appear more attractive. Hence worth more
by comparison.
The public is simply not that stupid, and in
the long run, it actually costs more sales than it saves. I see it every day. Timeshare guests are told something
like: " The only way to receive the full functionality and value our product is capable of delivering, is to
buy it directly from us. If you buy a resale, you cannot take advantage of x,y, and z."
Do you not believe that the prospect can't figure out what the real message is! Apparently not. You are the one
who doesn't get it.
Yep, it's just another way of saying " If you ever have to sell what you buy from us, your timeshare will
be worthless because the buyer can't do x,y and z" .
Timeshare sales people are victims of the developer's
(and their own) success. So much timeshare sold, so lots of owners selling. The real problem is that the developer
never put any of the huge profits aside to support the price. If they did , then a market could be made for a repurchase
at a reasonable price to the seller with some left over for a smaller profit (again) at sale. Everybody wins. Except
the developer takes less profit the other times around. So does the sales rep. But, beats the heck out of complaining
about the wrong problem.
The industry got drunk on the profits from timeshare
sales in the heyday, without so much as a thought to what happens when all that inventory starts to turn. There
wasn't time. Everyone was way too busy counting their money. Well, time to sober up. Stop counting long enough
to come up with a solution that isn't just another way to screw the buyer. The economics of the deal just changed,
and you don't know it."
- YOUR COMMENTS:
- June 25: --" RE:
`Except the developer takes less profit
the other times around. So does the sales rep. But, beats the heck out of complaining about the wrong problem.'
Cendant/Fairfield is already in a position to best support this idea.Through Fairfields PIC program that allows
owners to receive points for the deeded week they own with another company, they offer higher value for a week
that the owner wants to sell by receiving FFD points instead. Maybe Fairfield should just buy the undesired weeks
for pennies on the dollar and convert these pink elephants into points packages within their own system and sell
them for a few pennies more. Now you have a brand name in the resale game, with hundreds of tour no buy leads being
sent to the " office" every day of the year. Do you think it can't or won't be done? Give it some time
and hide and watch. Makes for a great rumor if nothing else. Someone at the Cendant/Fairfield corp office is reading
this now and saying, " Damn, they're on to us" or " We need to rethink this thing" .
- AND: --" I
for one hope that its just a rumor.
And if it isn't, I hope the deal falls, crashes, burns and explodes. As an owner (first with Epic, now Sunterra),
I have not heard too many good things about Cedant. Person in the cubicle next to me owns at Trendwest and before
Cedant bought them, she used to rave about Trendwest. After the buy out, she now can't stop ranting about the horrible
service."
- AND: --" I
do not agree with the statement that
incentives to buy from the developer is a message that timeshare will be worthless. A while back when legislators
did not understand the business they made the idea of the developer selling his own properties in resale a conflict
of interest. This was wrong. If developers responsibly handled their own resales these independent companies wouldn't
stand a chance.
Resale companies (especially the ones that list properties - period, with no inkling of how to sell anything) are
no help to the industry or the consumer. Look at the background of most resale agents - they got where they are
because they had no sales ability. So they became professional listers.
There is no resale industry to compete with. The customer simply needs the knowledge of how bad the resale industry
is and why. If someone is selling weeks through a resale company - chances are it didn't work for them. Do you
think it will work for you any better? Isn't the Century 21/ Tri-Realty debacle evidence enough? Tri-Realty has
been generating serious complaints for years. Someone should look into why they were such a good thing for Century
21. Century 21 needs to be held responsible. Check with the South Carolina Real Estate Commission. They got more
complaints on C21/Tri than any developer or exchange company. Although, RCI took a close second place! Why was
Tri-Realty allowed to be an ARDA member for so long?
- June 26: --" It
is not purchase incentives that diminish
the value of timeshares. Purchase incentives are a concrete value that does add justification to buy from the developer.In
restricting the use options of a resale buyer, the developer is consciously, intentionally, deliberately, creating
two classes of ownership. By definition, an owner who chooses to sell their timeshare, is forced to sell a second
class product , when they paid for a first class one. The buyer knows they are getting a second class product.
So, it is worth less to them. Any developer who rigs the deal that way is most certainly telling the buyer that
they are screwed if they need to sell. The developer simply hopes that the buyer does not translate the message..
at least not right away.Then life would be perfect. A hollow scheme that cost nothing gets presented as value-added
and the entire problem is solved.
THAT circle jerk is exactly how the industry
got into this mess. WAKE UP! The previous poster does not believe that there even is a resale market. I'm speechless.
Who were those sales reps complaining about? It wasn't the front fee listing companies. Listings don't kick sales
deals. Sales of listings kick sales deals. Geez, the wheels are falling off the milk wagon now. I give up. Happy
selling to you all."
- June 27: --" I
beg to differ! What kicks deals are resale listings.
The industry is as affected by the customer who didn't buy, who sees a ridiculous 'resale listing' and doesn't
buy anything! The majority of the time the customer who purchases from a developer, then sees a resale listing,
kicks and doesn't buy the resale. They either don't have cash for the resale or the resale outfit doesn't have
their stuff together enough to make it a comfortable transaction. Resale companies trade on bashing at the credibility
of the industry. The result is many people don't buy anything.
All to often I've witnessed advertising that pictured a property and a $4000 price for a week that the resale company
didn't even have listed! Their aim - kick the developer deal whether we get the business or not. Where do they
get their clients? Try the parking lots of credible developers who paid for the tour in the first place!
It has been said that Americans know the price of everything and the value of nothing! I have talked to numerous
customers who bought a resale, they either couldn't check in or deposit for exchange because of improper efforts
toward title transfer - they arrive on vacation to be told 'that unit isn't in your name'. What do they do then?
They are either done with it or they come to a reputable developer and purchase a week that will work for them.
The whole idea of the points product being handled by 'resale companies' is really scary. Anyone 'in the trenches'
experiences the above again and again. Talk to timeshare management companies about customers who show up to check
in and their name isn't on anything associated with the week or weeks they think they own. Half price on something
that doesn't work isn't a great value - it's a rip-off!"
- AND: --" I
don't know where the person who posted
a comment about legislators making Re-sales a conflict of interest. That sounds like the pitch that most developer
reps use to explain why they don't have a re-sale program. Legislation prohibits representations about the PROFIT
in re-selling as part of a sales presentation. There is a fine model for all in the industry to follow: Marriott.
Marriott offers a resale program to their owners. They sell resale inventory for the current fair market value.
If someone wishes to resell theirs outside of Marriott they can do so but it doesn't come with the Marriott Rewards
program. Fair enough. IF you don't want to pay commissions to Marriott to sell yours, you can resell on your own
but it will not come with all of the bells and whistles provided by the developer. It is the owner's choice. Re-sell
through MVCI and everything goes with it. That protects the owner, Marriott and the product's integrity. Much of
Marriott's older inventory is ONLY available via re-sale. Most of their resales are done through their Telesales
dept. and that helps to lower the cost. Seems like a perfect model to me."
- AND: --" `Drop' after `drop' after `drop' and
then an `exit program' is what " diminishes value" in the consumers view..."
- AND: --" Hi,
here are my 2 cents worth under “Idle
Thoughts” and timeshare resales. Just checked eBay and they had 932 timeshares up for resale. Thousands and thousands
of timeshare resale transactions take place on eBay thru the year. I belong to TUG (Timeshare Users Group) and
I don’t see many problems with resales that other doom and gloom folks here do. I spend at least an hour every
day chatting with timeshare owners and these horror stories are straight from the “Twilight Zone”.
Sounds like a representative of the timeshare developer’s organization is planting false rumors. Check out the
largest group of timeshare owners on the Internet, TUG, and see for yourself."
- AND: --" This
thread began because salespeople were and are complaining
about rescission rates caused by the resale marketplace. They feel under siege, and frustrated. There is nothing
worse that can happen to a salesperson than selling a prospect on the concept, then the program, then the specific
product that is right for them, bring the sale home and close it, only to hear several days later that the customer
bought the concept, the program, and even the recommended product, but from someone else for less money, all because
the salesperson did their job so well.
Resales are a fact of life. Owners have a right
to dispose of their property. Prices go down for lots of reasons, but at the end of the day it simplistically boils
down to more supply than demand. Sellers compete for buyers. The soft price is made much worse when the product
being sold is crippled with restrictions imposed by the developer. That creates even less demand. The seller is
screwed, the sales rep is screwed, and the developer's margin is untouched.
Yes, Marriott's program is ok. At least they
have a program, but it works poorly in addressing the sales rep's issue, and only marginally for the seller if
they are patient and do not have to sell. There is a model that works, and works very, very well. So well in fact
it is amazing that no one else has adopted it. Disney actually publishes a price that it will buy its points back
for. Not act as a broker for, but actually buy for cash. It costs them capital to maintain, and lowers their performance
margins because they can't make as much money reselling them compared to its new inventory. But, try to go to the
marketplace and buy a Disney resale. There are very very few available, and the price is high. You never hear about
Disney customers grousing about their investment. The only grousing heard is from others wanting to exchange to
a Disney resort and can't. Sales reps may complain about other things at Disney, but resales are not one of them.
If Disney can do it, so can the others. The
difference is that Disney is satisfied with its margin. Heaven forbid there be a soil on Mickey's ears. What would
the grandchildren think when its time for them to own vacations.
The rest is so much hyperbole from an industry that gave new meaning to the word."
- AND: --" I
spoke with a family last week that had
bought an Orange Lake week from an area Orlando resale office. They found out the maintenance and taxes had not
been paid for 7 years shortly after closing. After they paid over $4000 in over due maintenance and taxes and late
fees they discovered something. It would have been much cheaper to have bought directly from the DEVELOPER, Orange
Lake. This tragic event is the norm more than the exception with many resale houses. Buyer Beware!!"
- AND: --" How
many resorts do you know of that lets
owners get 7 years out on dues without foreclosing - and why would they? And name me a county taxing agency that
will go that far without the week being dumped at a tax sale. And whether its ebay or resale companies, there is
a little known, to this idiot anyway, process that goes on called ESCROW with a title search and in some cases,
title insurance. That pitiful spiel is word for word what we've all been trained to tell tours that mention resale.
Resale is a big problem getting bigger because of the trend in the tour/sales structure at more and more tracks.
Tours are harder and more expensive to get and mooches when you do get them and therefore are no longer cost effective
at many properties. So the solution is to convert everything to in-house. The guests are already there, they're
already timeshare buyers - we can give them a plate of shrimp at Red Lobster and we'll all get rich. There are
also several properties where the in-house line is 4 to 5 times larger than the retail line. But this is where
the resale problem looms largest. You can tour a lot of people on a retail line that maybe have never heard of
resale, but how many T/S owners have you talked to that aren't familiar with the " 40 to 70% off" resale
pitch?
" But you can't get Marriott points if you buy resale, dear guest" . (WHO CARES??? Sit down sometime and
analyze how many nights you can (try to) get at a category 5 or 6 Marriott hotel and how far you can go on United
by trading your week in for points - not many and not far. And this, of course, is usually available to you only
every other year and after you pay an extra fee for the privilege and after you pay your HOA dues and after you
calculate your annualized cost of that $20,000 to $35,000 week at 15.9% interest. Blackout periods, you say. No
problem - if you use a 50% premium on your points, you can go anytime or anywhere - almost.
And as for that winning Marriott resale program. Marriott will not necessarily sell your week for you, sir - they
will LIST it for you. At a price that they set, which is about 25% higher than the current resale market, and at
a substantial commission to you. There are hundreds of Marriott owners (at just one property that I'm familiar
with) that have been waiting over two years for Marriott to sell their weeks.
And finally (I promise), if the developer creates a resale market, selling at less than retail prices, why would
anyone buy anything but a resale? And if the resale becomes a drop only for a tour no-buy, what is to prevent the
starving (and aren't they all) agent from going directly from " Hi, where are ya'all from" to " wanna
buy a resale?"
NO EASY ANSWERS, ARE THERE?"
- June 29: --" Just
thinking... Do the developers really care
if the public is buying resales? Humor me for a moment here...Lets say the Joneses buy a timeshare from ABC resort
after going through a presentation. The family gets the standard nosebleed drop, purchases with all the bells and
whistles, and commences to use their interval for 5 years. Then, for whatever reason, they decide to vacation differently
and sell their interval. Said interval is then listed with a resale company with all dues up to date, and listing
fees paid, at which time the resale company sells the interval in question to the Smith family, who continue to
utilize the resort, pay the maint. fees, and eventually upgrade through the resort to the newest program...(points,
club, whatever...).
My question is this: Does the developer not still benefit from the new owners? After all, they are staying up to
date with all fees, the developer made money on the original transaction, commissions were paid, exchange companies
continue to receive dues, etc....the only thing that has changed is the name on the deed (or whatever)...and in
the process, the interval has been attatched to a family whose needs it now meets. I know a bunch of sales reps
will be up in arms to defend their commissions, but we live in a society where people are free to choose, and to
shop, and to sell property and to purchase property. Seems to me that the only one left unaffected by the entire
transaction is the Developer. Come on, folks, why is everyone acting as though resales have just become an issue.
They have been, and always will be, just another reason to try and sell value, and should be, if they aren't already,
another way to keep Developers from charging more than they should for their intervals in the first place. The
old adage of " you get what you pay for" goes both ways... the public, as well as the visitors to this
site, are much more informed when they get to your table, and have done the research before the first " survey" is filled out. In other words, we have let the ball drop in all aspects of the business. They now know much more
about us than we do about them. It is time to get off of our rumps and catch up....this applies to marketing, sales,
TO's, Exit, OPC's... every soul in the equation... just a thought..."
- AND: --" Take
a look at the bigger picture folks.
You are all partially right, but no one is talking about this from the perspective of what is happening globally.
Welcome to the world of disintermediation that is being force on the world by ever-present knowledge of market
conditions, prices and inventory coupled with the growth of mega merchants. You are not the first to suffer, but
you may be one of the last. It's taken almost 10 years for this phenomenon to happen in timesharing. Just what
happened to your corner bookstores when Amazon came around. You could either fight it out on the internet, learn
and deploy those skills, or sink against them and their effective global retail competitiors like Borders and Barnes
& Nobles. How do you think all the high margin computer box makers of the 80's and early 90's like it. They
went away. All of travel is under the gun to be ever present and lowest cost for the quality tier provided. I know
we don't shed a lot of tears for the travel agents of the world, but, guess what... the same thing is happening
here. Everyone has been adapting to this for almost a decade. The small re-sale outfits are the ones doing the
better job of product delivery at the lowest price than the developers. They will take the resale listings. The
smart ones do know how to market them, and are doing just fine. In the middle are all of us middle people working
for the developers who are getting squeezed. It's not going to get better as you are playing against a major trend
and shift in societal purchase behavior. We've all talked about how necessary it is to lower sales and marketing
costs. Now you get to understand just whose costs are being lowered. If you can't get big, then get small, creative
and competitive if you want to survive."
E-mail street@streettalkblog.com
- Audra Williams (nee Larsen) has been brought back into Bluegreen
Resorts at Shenandoah
Crossing as a sales manager/trainer. Welcome back!
GO TO Street Talk International (Last updated June
25)
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