CNBC report on AG investigation of Manhattan Club [merged]

http://www.cnbc.com/id/102204943?trknav=homestack:topnews:10

Includes four minute video of the issues.

They make it sound like a timeshare is a new thing and it's all a scam. While this may sort of like a scam, in that they rent out rooms when people actually own them, it's not a scam.

Check out the math on this one:

$141,000,000 construction cost for 286 units. That's $493,006 a unit. That makes a unit $9480 just for the construction cost. So aside from inflated sales salaries, how do you pay $45,000 for a $10k unit? That's a hefty $35k profit PER WEEK! I don't know that most other developer direct sales have that much of a markup.

Manhattan Club

http://video.cnbc.com/gallery/?video=3000331987&play=1#.

mine was $1


Stephen

harveyhaddixfan said:

They make it sound like a timeshare is a new thing and it's all a scam. While this may sort of like a scam, in that they rent out rooms when people actually own them, it's not a scam.

Check out the math on this one:

$141,000,000 construction cost for 286 units. That's $493,006 a unit. That makes a unit $9480 just for the construction cost. So aside from inflated sales salaries, how do you pay $45,000 for a $10k unit? That's a hefty $35k profit PER WEEK! I don't know that most other developer direct sales have that much of a markup.

Click to expand...

20% of $45K equals $9K or intrinsic value.

Manhattan Club's escapades are old news!

http://tugbbs.com/forums/showthread.php?t=214664&highlight=manhattan+club

Following is break down of the largest Developer.

Wyndham's costs and profits circa 2012



Description------------------..........New Buyer........Current Owner



Selling price in thousands..............$17K...................$22K

Brick, Stick and Mortar...................20% ....................20%

Selling...........................................58.......................32
.

Bad debts.......................................16......................12

Profit..................... ..........................6 .....................36


Source: Main Man at security analysts presentations and SEC 10K

harveyhaddixfan said:

They make it sound like a timeshare is a new thing and it's all a scam. While this may sort of like a scam, in that they rent out rooms when people actually own them, it's not a scam.

Check out the math on this one:

$141,000,000 construction cost for 286 units. That's $493,006 a unit. That makes a unit $9480 just for the construction cost. So aside from inflated sales salaries, how do you pay $45,000 for a $10k unit? That's a hefty $35k profit PER WEEK! I don't know that most other developer direct sales have that much of a markup.

Click to expand...

I think you'll find other timeshare developers showing similar math equations; the developers are in it for the money, and if people are willing to pay it then it is what it is.

The beef with this particular developer is not the issue of price; the issue is the developer renting out units for nights/weeks, and thus preventing owners being able to book their weeks. Think of it as overselling the plane and not being able to obtain a seat with a paid ticket.





.

I have owned a half dozen timeshares and have never had a problem booking a room, or at least depositing my interval into a trading company. That being said, I learn the ropes and leverage what I can to my advantage. I have no sympathy to the owner who waits until late November and tries to book a week and finds out that there is nothing left in the month of December.

When I see/hear people with complaints like this, I wonder if they are last minute planners and try to book timeshares like hotel rooms.

gnorth16 said:

I have owned a half dozen timeshares and have never had a problem booking a room, or at least depositing my interval into a trading company. That being said, I learn the ropes and leverage what I can to my advantage. I have no sympathy to the owner who waits until late November and tries to book a week and finds out that there is nothing left in the month of December.

When I see/hear people with complaints like this, I wonder if they are last minute planners and try to book timeshares like hotel rooms.

Click to expand...

No, the Manhattan Club is a special case. Multiple owners have said that nothing is available there even when they book far in advance.

The State of New York seems to think so, too. A quote from the CNBC report: "After an investigation by the New York attorney general's office in July, the Manhattan Club was slapped with a cease-and-desist order and AG Eric Schneiderman called it a 'bait and switch' scheme." The New York attorney general would not have issued a cease-and-desist order if this were just a case of owners trying to book at the last minute.

I don't own at the Manhattan Club, but I own at a different timeshare (Sheraton Broadway Plantation) where I just called to make a reservation for 2015 and was told that every week in my entire season (which covers March through October) was unavailable and I therefore would not be able to book a week for 2015, even though the 2015 hasn't started yet and there should be a week available for every owner. (See my thread at http://www.tugbbs.com/forums/showthread.php?t=219766)

In my case, I eventually got a CS rep who said Starwood's inventory people would look into it and get back to me. But, you shouldn't assume that when a management company says nothing is available, it's because the owner booked too late.