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PUBLISHED EVERY FRIDAY "If you don't want it printed, don't let it happen." --unknown September 29, 2000 FLASH UPDATE Oct 2: The Street has been informed that Century 21 in Florida won a case in state court that allows up-front appraisal fees. We will provide more information as soon as we get the details.
Let us put it to you this way. If you sneak in to Street Talk every week, read it surreptitiously and hurry away without having noticed the thousands of press releases, factual articles, original columns and other items in The Timeshare Beat, and then you dismiss The Beat to others as simply a National Enquirer-type rag that spreads rumor and innuendo and has no value; and if you never submit your own positive information about your company or organization, never submit press releases or suggest corrections to information you feel is faulty, never contribute-- then you are probably part of the problem rather than part of the solution. The Street just loves the word innuendo. It has such a sneaky feel. Thanks. HOT UPDATE Sept. 26: We're including this in case you didn't see it in the last edition's updates. Interesting stuff. The Street hears that Sunterra has informed the bankruptcy court that it intends to sell Sunterra Europe (Grand Vacation Company). No surprise there. And that a spokesperson for RCI has confirmed that Cendant is interested in purchasing it. No surprise there, either. It appears there have been on-again-off-again complicated negotiations and all that for some time-- but it also appears Cendant is performing due diligence as a serious prelude to a takeover. We've been hearing for awhile that Paul Dean was involved in negotiations of some kind with Sunterra Europe, but couldn't learn who it was for, though we and others suspected it might be Cendant. Of course there are plenty of other suitors for GVC's hand in marriage, and he may have been working with some other really big name-- it would have to be a big rich name to take GVC in one piece. (We assume that is the same Paul Dean of Dean & Associates, which merged with TRI Hospitality Consulting to become TRI Hospitality Consulting Timeshare Services. A member of the Timeshare Council in the UK and on the International Committee of ARDA; co-author of "The Law and Practice of International Timesharing".) Other names we've heard were looking, but for which we have no confirmation, include: Starwood; Accor; Hilton; Fairfield; Bass Plc; Carlton and Wyndham. But Cendant has seemed the most likely purchaser from day one, don't you think so? Assuming that Cendant does indeed purchase GVC, we wonder if they'll go after Fairfield, too, if the share price should ever become attractive enough-- say, below 6 or so... By the way, Wyndham has withdrawn its offer for Sunterra's Carambola property. They say it would cost too much to upgrade it. But there are also rumors that the Virgin Islands government will not release the deed until someone pays some back taxes owed on the property. And Trendwest is probably going to end up with Sunterra's Steamboat Springs property. Also about Sunterra, we received this plea: --"Can someone please make
an offer on the NON Bankrupt entities? We're tired of management making wrong decisions or not making right decisions
soon enough, it's hurting us bad. At the rate they're going, the rest of us will end up in the same pot, unnecessarily
of course. PLEA for someone with good ethics, all others need not apply." Seems to be more reorganization going on with Starwood, as illustrated by this email which we received on Sept. 26: --"Al Morrell, Vistana's Settlement Mgr., was terminated yesterday. 11 yrs with the company. He will be missed. Heads continue to roll as the cheese continues to get moved. Watch for more in the relatively near future! Growth is painful to some." Yes, growth and change is always painful to some. Often it's painful to many-- including the companies themselves. But we'll mostly survive and thrive, sooner or later. COMMENT from you Sept. 30: --"Growth is painful? That must be the understatement of the year. It is truly discouraging to hardworking, loyal employees when you hear about the changes going on in your own company in The Timeshare Beat before any announcements are made internally." Hang in there. It'll all be OK in the end, one way or another. When will Starwood begin an aggressive expansion into Europe with its Vacation Ownership brand? And who will
they get to oversee it? Some of those CIGA properties they picked up earlier this year would make real nice
timeshare projects. About ARDA. Comment from you, regarding last week's info from the Fall Conference: --"Did we attend the same conference? Plenty of people stayed in the President's reception. Howard did circulate and he seemed to be well-received by the industry. Give the guy a chance! He is extremely well qualified and knows how to run an association, something past management had no clue about." As we mentioned last week, we're perfectly happy to give the guy a chance nor are we prepared at this point to make any judgements about Mr. Nusbaum's qualifications. Time will tell what direction ARDA takes from this point on and how it all works out. But we don't control the thoughts or opinions of others, who write to us to give their take on things-- just like you did. Just like we hope more people will. Do you have something more positive to report on the Fall Conference? Then don't sit in the corner fuming and fussing, send it in! We welcome everyone's opinions, from both sides of The Street. (You should all remember: these ARE opinions, and not necessarily those of The Street or The Beat.) We also especially welcome straight facts, verifiable and true. Any time you all want to send some in that won't get you fired if we use it... COMMENT from you Oct. 1: --"ARDA Fall Conference comments:
The Street believes there was more to this message, but the ICQ messenger could only handle this much. Nevertheless, thank you for sending it in. It's always refreshing to get alternate points of view. MORE COMMENT from you Oct. 2: --"did you know that Howard Nusbaum (new ARDA Pres.) came from an association with a budget of 750K and a staff of 6?? Compare to ARDA 6 mil budget and staff of 30+. And with NO Timeshare experience. This was the best candidate?? Ask yourself why ARDA really wanted Howard & Rhonda (Gen Counsel) to have no TS experience? They seem like nice people, though who is training them & from what perspective?" The Street: ARDA's General Counsel is William Ingersoll of Holland and Knight (he has been so for decades). Rhonda is the in-house attorney. She does, however, administer the work of the Ethics Committee. Said one reader: --"It is an error to attribute policy decisions to hired staff. Decisions of substance are all made by the volunteer leadership." MORE Oct. 3: --"I attended the Fall Conference and met with Howard several times. He is extremely capable and a solid leader with staff and industry alike. Critics of ARDA should look in the mirror. How are you contributing to ARDA? The industry and the association are changing for the better. More dynamic, efficient and professional." (The Street: Lots of passion accompanying this topic, from both sides of the issue. From the communications we at The Timeshare Beat have been receiving, it looks like there's quite a bit of polarization going on. Many who are not within the inner sanctum at ARDA seem to be taking a wait-and-see attitude, with their questions being less "How can I contribute?" than "Will ARDA continue to be an asset to everyone, or are they getting in bed with the brands and leaving the rest of us out in the cold?" Time will tell. Meanwhile, we just report what you all are thinking. Pretty interesting stuff, too.) AND: --"Did you know that ARDA has been given an updated Anti-Trust warning for the second time in four years?" No we didn't. True? Not? COMMENT from you Oct. 3: --"ARDA
itself has not been involved in any antitrust issues. Individual ARDA members
have been involved with the Federal Trade Commission (FTC) three times in recent memory. For the second time in
two years, members of ARDA have been charged with advertising and promotion fraud." THIS WEEK we hear: --"Kevin Singletary resigned from Peppertree
and will be starting next week as Sales Manager for (Bluegreen) Shore Crest Galleria. Current Sales Manager,
David Hubbard, (is moving to) Inhouse Sales. Chip has recruited half a dozen TO's and line salesmen
from Peppertree." Stuff about Branson (there's so much going on there!):
Word on The Street has Bob Hagedorn leaving Orlando to head up the Berkley Group's brand
new Las Vegas resort. True? Not? And which resort in Vegas is Berkley Group opening, and under what name
will it be sold? The Maxim, possibly? Or is that place too tied up in legal bickering? Some other? Darn, this group
is quiet about its plans. Feed us, please. You guys and gals know everything... About Sedona Pines in Arizona. Sometimes we're the last to know. We hear that Choice Vacation Resorts' marketing contract was terminated on June 6, 2000! Sedona Pines, LLC, the developer, assumed control. More details? We also hear this: --"I concur the rumor (about bankruptcy) is just
that. However I did leave (the company) over monetary concerns. You don't get your 'spiff' until 2 weeks after
you get your commission check. It's crazy trying to track it. I concur that it's impossible to get a straight concise
answer from the managers. Perhaps they're in the dark too?" The Street would love to know if the writer of the following had a specific resort in mind, and which one it is. This scenario could fit so many, including Sunterra: --"How is it possible that the same story repeats itself time after time. Company formed by timeshare pros grows gets taken over by accountants cuts out all the timeshare guys and goes broke. There must be some huge egos in the accountant business." Ain't it the truth? According to Word on The Street, DK-- who was writing $400,000 per month at Epic Resorts Las Vegas--
departed quickly after Bill Stoddard was appointed as Sales Director. Rumors are rampant as to why. Is Bob Haslip going to take over Sean Barrett's position at Orange Lake in Orlando? COMMENT from you Sept. 29: --"News from Hilton Grand Vacations in Orlando. FACT! Sean Barrett interviews, but for which position?
Could he be taking over in-house? Is Marie Sarno moving up or out? Why cannot Hilton promote from within? Could
it be that the remuneration is too little, the hours too long or the Gestapo tactics from upper management? What
a shame when the product is so great." COMMENT from you: --"You know, if everyone would just practice what they preach in this industry, the world would be a better place. There are far too many drunks and coke heads (with families needing them) in this industry. It is sad. This business has been the demise of many good men and women. It is repulsive and sad." The Street agrees and disagrees. It isn't that the business has been their demise, it is that the business attracts those who are already prone to this behavior (or already exhibit it) and then the hype and buzz and power struggles and ego and stress levels sometimes push them over the edge. There are a lot of drunks and coke heads working in non-timeshare companies, too, who don't have half the 'justification' for it. The Street would like to know, though, what the heck happens to otherwise fine and well-liked people who get promoted to management and suddenly lose all concept of what it was that got them there. The power surge, the new management 'hat', the swelled head, the thrill of giving orders, etc...? A shame, and it happens so often! We've known people who were willing to work for half a point on a track where they were making waaaayyyyyy more money closing deals-- and dealing with waaaaayyyyyy less stress-- just for the 'prestige' of being 'management'. Fine. But will they still respect you in the morning? COMMENT from you Sept 29: --"re:
'manager-itis': some of the sanest, most successful people in the biz are ones
who have worn the manager hat, then went back to closing." And
The Street said, Amen. Fairfield has the second phase of the $70 million Palm-Aire building project under way. This master planned property in western Pompano Beach, Forida, which was re-master planned when Fairfield took over, will have 389 units in three 10-story towers. The first tower was completed in 1998 and the second is now under way with completion scheduled for 2001. The third is estimated to be started next year with a predicted completion date for sometime in 2003. Also regarding Fairfield: Earlier this month the company successfully sued to win a temporary injunction barring Timeshare Consultants LLC (a Delaware corporation) and Peter Bresko (individually) from interfering with Fairfield's timeshare contracts. In the lawsuit Fairfield maintained Bresko and Timeshare Consultants presented themselves as investigators of timeshare transactions for "legal or technical violations". The lawsuit also alleges that Timeshare Consultants individually solicited owners of Fairfield timeshare resorts, convinced them they were misrepresented by Fairfield and told them they had the right to reverse any timeshare purchases. If the owner agrees, Timeshare Consultants allegedly gains the owner's power of attorney and a considerable fee as part of efforts to get a refund from Fairfield. Fairfield also alleges that the refund amount Timeshare Consultants demands often exceeds the amount the owners paid to buy timeshare weeks and includes claims for maintenance fees, interest and other costs. The judge in the case was rather harsh in his condemnation of Timeshare Consultants LLC, and his ruling enjoins the company, Bresko, the company's employees and independent contractors from contacting owners of Fairfield's timeshares to cancel contracts and from misappropriating Fairfield's trade secrets and confidential information. AND they have to return any confidential info regarding Fairfield customers' addresses and lists. Of course, this fight is probably not over yet but score the first round to Fairfield. Regarding last week's news about Russ Gilman leaving KSL for Starwood, we received the following: --"The 'Rapture' of FOD's (Friends of Dave) from the industry and Marriott should come as no surprise to anyone. (Dave) Broderick will gather all of his cronies around him. Brace yourself Marriott, you ain't seen nothin yet!!" In Marriott's financials, released Sept. 28, they say "Marriott Vacation Club International's contract sales surged 55 percent in the third quarter, benefiting from new brands and locations, as well as higher tour flow and prices at existing locations. Marriott Vacation Club resorts in Maui, Aruba, Newport Coast, and Ritz-Carlton Club's new resort in Aspen, reported particularly strong results. At the end of the quarter, 20 resorts were in active sales, 25 resorts were sold-out, and an additional 4 resorts were under development." Pretty impressive. Applying to Marriott in an oblique way is the announcement by the Ko Olina Resort that they might purchase
one of the Nautilus submarines left high and dry when Nautilus went bankrupt. If they buy it, they will berth it
(of course) at the new Ko Olina Marina-- which will give new owners at Marriott's timeshare resort there easy access
to a wonderful way of viewing sea life without getting wet-- once that resort gets built, that is. This new timeshare
resort, combined with the new Hilton resort at the Hilton Hawaiian Village in Waikiki, will breathe new life into
timeshare on Oahu. Will it also pave the way for more? There are some excellent locations available for timeshare
on that island. And some of them are Starwood properties... LAST WEEK we asked: And while we're in Hawaii, when will The Bay Club announce Phase II? THIS WEEK we hear: --"The Bay Club's tentative date for
the start of phase II is March 2001." The big news from Mesquite, Nevada is that as of 9/28/00 Festiva Resorts has reportedly pulled out of the deal to take over and market Grand Destination for The Oasis Casino. The question is, if they have indeed pulled out is it permanent or have they left the door open? And is the sticking point who we hear it is? UPDATE Sept. 30: The Street has heard from you all
out there, and word is that this is PERMANENT. Festiva has packed its bags and hit the road. We understand that
the Oasis would like to keep a small sales force working, but how that will work out is still up in the air. We
also hear that the sticking point may have been a strong anti-sales attitude held by a certain person-- and not
for the first time. Ruminations: The Street has noticed an anti-sales attitude many times from many developers
and their ilk over the years; they claim they dislike the tactics, the heavy-handed high-pressure (et al) ambiance
connected with sales-- and other similar stuff. Probably got talked into buying something expensive once and have
never gotten over it. But in the end, if you dig deep enough, it usually comes down to not wanting to pay real
professionals what they're worth to sell your product. It's always money, isn't it? People on the move:
COMMENT from you: --"Regarding RCI employees vacations. The policy has not changed. We have always only been eligible to get excess inventory (I have been with the company for 9 years that is my 'always'.)" Thank you very much for responding. People are asking, "where is":
And finally, The Shadow received an awful lot of mail about last Monday's newsletter (the one written with tongue firmly in cheek). Mostly only The Shadow ever sees these communications, but this letter was so fine we were asked if we would like reprint it here-- anonymously, of course. We're happy to comply. So, for your further rumination: "You're on the money with this one. To Err on the side of caution is the rule of the day. Unfortunately, with soooo many new resorts opening unless developers start thinking of new ways to improve an old system, they are in for a ride. The ride downhill is a lot faster than the ride uphill. Hence the hesitation to experiment. Even the BIG name brands are stuck in traditional marketing and sales programs. They are so hung up on name brand recognition that they overlook certain basics. Such as a competitive commission. However, the people in the trenches from PD down are basically from the same DNA as the rest of the timeshare family. This is evidenced by the self preservation theory employed in your article "don't hire your replacement." As a personal witness to this preservation tactic, I am amazed at the ability of some people to stay in their positions while failing at their task. Take for example this scenario. Project "X" is off budget in double digit percentage. There is no Sales Director in place and none planned at present. Prior to this vacancy, one was hired with no time share experience and failed? The project director is more concerned about disrupting the managers by hiring a new DOS than correcting a declining sales performance. If this doesn't appear to be protectionism at all costs, then I don't know what would. Several qualified people have applied for this position and been denied access. Makes you wonder who really runs that name brand show! I have to say that that is the norm and not the exception as I traverse through this wonderland of paranoia. Sour grapes aside. I find your articles to be refreshing yet sometimes depressing because it reveals an ugliness we don't want to be reminded of. All the mascara and face paint we apply in the guise of change cannot hide our true self from ourselves. In the end all of us must look into the mirror of life and face the reality of our true reflection. And that my shadowy friend will be a shocker to some. For many years I have been asking myself, why would a politician spend millions of dollars of his/her own money to get elected to a job that paid $50,000 or so? The answer eludes me because I don't relate to things like power hungry or selling my soul to the devil. Honest days wage for an honest days work. Stay well, keep passing on your philosophy, and above all else, stay true to yourself."
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