Props to ClubsRDead for giving bullet points and specifics for his/her viewpoint. This is MUCH better than the rhetorical non-sensical anti-DC rants that usually pop up when DCs are discussed.
Other than that, Kage and TT have pretty much covered the corrected facts and a knowledgeable response.
It's important to note that most of us who are interested in the DC concept typically LOVE the travel but are UNSURE about the future of the DC business model. Various levels of optimism and pessimism mixed in with semi-transparent DC facts make for any interesting forum read!
Got to agree, travelguy.
In response, the Intrawest argument is a total red herring that some salespeople in the industry have used to sell against A&K (I actually heard that straight from the horse's mouth once) when it has zero basis in reality. If Intrawest goes bust, the Fortress private equity fund loses all or most of the company just like a mutual fund that has invested in a company that has gone bust. As a practical matter, from what I've read, Fortress has already written down most of that investment to pennies on the dollar. Of course, this has nothing to do with A&K or the A&K RC.
There is no ownership crossover.
However, for argument sake (even though A&K is doing well) and just to respond to the next potential argument, let's say something happens to A&K. A&K owns the A&K management company, but
does not own the houses owned by the corporation owned solely by the members. Therefore, even if A&K went bankrupt, they have a zero ownership stake in those houses. It's like saying if I own a vacation house and the rental manager goes bankrupt, I'm going to lose my house. The downside to this scenario would be that the members would have to find a new manager, which I think would be relatively easy to do, but more importantly, they'd lose access to the houses that they haven't bought which A&K is letting the members use and you'd lose a strong backer and marketer, but again the houses bought by the members would not be tied up or lost as you note. This is so different than the non-equity scenario like T&H where the members owned nothing other than the right to use the properties owned by someone else.
On another point, sure, A&K put up money to buy BH and CR, and I have no idea whether A&K incurred debt to do so, but again that has nothing to do with the member's corporation that bought the houses. The CR members actually put up money in the deal to go debt free on those houses. The equity that was in the houses were transferred. I'm sure A&K had to put capital to essentially buy the management companies, and I'm sure that long term they want a return on that invesment with commissions from selling memberships, just like Ritz-Carlton wants a return on their DC invesment, but if they don't get enough return, you go back to the scenario above, which is not that bad of a doomsday scenario in my book.
I've seen the sales numbers in member updates and I've heard the YTD numbers. They are what they are. We'll get them in the financials next month. Last year was very heavy on the short trial memberships, which are better than nothing (as at least you've got people trying the product and hopefully buying the product eventually), but certainly not ideal. This year it's been either equity memberships or two-year trials, and they're on a good pace. So is Hideaways and EE. Again not sure about the rest.
As a member, I've got no real complaints about the pricing if I really step away and look at the big picture. Sure the new folks are paying less than me, but so are my new neighbors who just bought a house down the street. It's reality.
Where I'm going to agree with CRD is the need for regulation. I personally think that like the timeshare industry, there have been many crooks in the DC industry. Most of which are out of business. I personally think it ought to be criminal to take in money as deposits, promise perpetual vacations, not use the bulk of it to buy real estate, and instead blow it on operational expenses, with the hope that you have new members coming in later. There are still a few DCs out there that to my knowledge have no guidelines as to what is done with deposits. It wouldn't fly in the more regulated world of timeshares, and it shouldn't fly with DCs IMHO.
This forum is definitely a hodge podge of opinions depending on your personal experience with DCs. I've got no complaints so I'm more optimistic, but I can also understand the complaints of those who have been burned.