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Recent Destination Club News

NeilGoBlue

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CRD,

AK does not make money on the transferring of home from the developmental company to the member owned club, it does make money three ways:

a certain percent appreciation of club assets
10-15% of annual dues (can't remember exactly)
27.5% of the sale of a membership.
 

ClubsRDead

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That might have been a strategy that TH could have employed - freeze, or just lower prices. Who knows what that might have done to the run on the bank that they had.

I would say that (despite being sometimes price prohibitive, and a root of many cash problems) that the services were better at TH than at UR. And of course, there were more, and in my opinion, better homes.
 

ClubsRDead

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CRD,

AK does not make money on the transferring of home from the developmental company to the member owned club, it does make money three ways:

a certain percent appreciation of club assets
10-15% of annual dues (can't remember exactly)
27.5% of the sale of a membership.

Curiously, when is the last time AKRC bought a new asset? Has it happened since the acquisition?

Also, it's my understanding that AKRC members can book certain AK villa's, which I don't think they actually own any of. Does AK take a fee from AKRC for accommodating this availability?

I thought I just read in a prior post that AK reduced the management fee / commission, ie the 27.5%. Wasn't it this # since inception?
 

ClubsRDead

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the only point of nonrefundable is to have committed members only. random thought - could do "surprise" (not mentioned before joining) "dividends" after property sales.

that got me onto another track. a fund club that is perpetual. could make deposits here nonrefundable too. (could be transferable.) instead of selling all properties simultaneously after x time, you sell regularly. and every time you sell, the entire amount is divided by # of members, and members can either withdraw or "reinvest."

Still not seeing how this model works conceptually. Not saying it couldn't, but not on with it yet.

Constantly selling the properties would be a difficult process in the DC arena. Aside from the fact that resort real estate is often hard to sell, and takes time, members typically get accustomed to the properties. Not to mention the management companies in each destination going to tremendous lengths to get the homes set up and standardized. Churning the homes, IMO, would be difficult, and expensive. Don't you get back to where you've maybe paid $3M for an asset, it appreciates to say $5M, yet when sold you can't replace with a suitable alternate in a like area at a reasonable price? Seems to me in this scenario you have to count on a "up" in the market to realize a meaningful sale, but a "slump" in the market to find asset replacement.
 

Kagehitokiri2

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i didnt mean churning, i meant like the clubs that have sold properties. id like to use EE as an example, but i think all their replacing has been of leased properties. perhaps "regularly" was not the right word.

isnt your "conceptual" problem with DCs to begin with?

AK >
TarheelTraveler said:
Dues are divided as follows:

82.5% club operating expenses: property taxes, insurance, utilties and maintenance, members services, member travel benefits, etc.

12.5% Management fee to A&K manager (of course, this is not all profit, as they actually pay for the management of the club using this fee); to me this is analogous to a property manager for a condo complex or a HOA

5% goes into the capital reserve fund

Member contributions are divided as follows:
72.5% to the capital account for purchasing Club assets
12.5% for membership sales and marketing expenses
5% for general and administrative expenses
10% return or profit to A&K manager

2009 - 40 weeks (in jun jul aug) @ 12 villas
2010 - ? weeks @ 5 villas
(didnt they have more than 5 at some point in between?)

originally 13 european hotels (from bellehavens) now down to 4
 
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ClubsRDead

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isnt your "conceptual" problem with DCs to begin with?

No, I wouldn't say that's correct at all, having paid big dollars to join.

My problem with the concept is losing all my money. Sure, lost / wasted big chunks before and likely will again. But when this model was really tore into and broken down, it's no wonder the money disappeared, and odd that it hadn't happened sooner, and to more clubs in general.
 
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CRD,

AK does not make money on the transferring of home from the developmental company to the member owned club, it does make money three ways:

a certain percent appreciation of club assets
10-15% of annual dues (can't remember exactly)
27.5% of the sale of a membership.

Why am I starting to feel like I'm in the kid's book, "If I give a mouse a cookie, then..." or perhaps the movie Groundhog Day?:D

I think the first is actually if the membership prices increase, and the selling member would make money with a resale of the membership, I believe 80% of any gain would go to the member and the balance to A&K.

The 27.5% commission has been reduced to around 10% I believe for so long as that promotion is running.

I know the club pays A&K for the trips on a wholesale basis. Not sure about the villas.

A&K acquired some assets post acquisition but all were announced as part of the acquisition. As I mentioned before, I think they tried to go too big at introduction and then we had the economic collapse. Since then, they've been trying to scale back down to reflect the reality of the market and eliminate the A&K subsidy to the club. The thought was why are we leasing assets when we don't need to be leasing assets, as we've got plenty of houses. On top of that, we've got the A&K trips if you needed availability for a certain time period. No assets have been sold or acquired, but the leases have been cut.

CRD - So I assume you were a T&H member originally based on your post? Just curious, are you one of the members that joined when A&K licensed its name to T&H and are you part of any of the litigation against A&K?
 
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http://www.marketwatch.com/story/re...-of-marketing-2010-03-15?reflink=MW_news_stmp

"Arthur oversaw the process for Frontier Airlines that led to the development of the airline's wildly successful "A whole different animal" branding campaign. He was also responsible for rebranding the Beaver Creek ski resort into one of the leading resorts in North America through the "Not Exactly Roughing it" campaign, and he developed the successful "There's no place like together" brand for Exclusive Resorts. He also served as director of Marketing for Nike, one of the most recognized brands in the world."

I loved that ER marketing campaign. Probably the best DC marketing out there in my view.
 

ClubsRDead

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CRD - So I assume you were a T&H member originally based on your post? Just curious, are you one of the members that joined when A&K licensed its name to T&H and are you part of any of the litigation against A&K?

Yes, originally T&H on the high side of things. AK was loosely affiliated at the time, or so I thought, but I believe the relationship had terminated or was in wind down when my monies cleared from what I now know. The option to take AK trips / journeys was a part of my "deal" and I actually did take a few. At the time I think TH housed a AK travel person in their service center in Kansas City. The marketing materials from the time I began to review the club until when I actually joined did change.

I'm not part of the branding / licensing suit. Been asked many times and don't believe there is a basis there. I was told upfront if it was my last dollars to not join the club. I made the decision on my own accord, talked to numerous members at the time and all were more than happy (now we know why).

Some argue there is merit to the litigation. I see it merely as pouring good money after bad. I wish AK had been more proactive in resolving it, and I think they could have made offers at inception, certainly at least when Fortress got involved, and induced members over to their new club. The economics would have been an issue to resolve but I don't believe an insurmountable one.

At the end of the day, I don't think most are mad about the money. I think feeling swindled more accurately depicts it. I consider myself fairly smart, have been economically successful (like many of the other members) and to make 6 and 7-figure mistakes isn't all that common...
 

Kagehitokiri2

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No, I wouldn't say that's correct at all, having paid big dollars to join.

My problem with the concept is losing all my money. Sure, lost / wasted big chunks before and likely will again. But when this model was really tore into and broken down, it's no wonder the money disappeared, and odd that it hadn't happened sooner, and to more clubs in general.
That might have been a strategy that TH could have employed - freeze, or just lower prices. Who knows what that might have done to the run on the bank that they had.

I would say that (despite being sometimes price prohibitive, and a root of many cash problems) that the services were better at TH than at UR. And of course, there were more, and in my opinion, better homes.
im at a loss here. TH owned 67 properties for 874 members, used member deposits for venture capital (unrelated real estate developments etc) and had no limitations on their "rent on demand."

PerryM says rent http://tugbbs.com/forums/showpost.php?p=871788&postcount=28
my response http://tugbbs.com/forums/showpost.php?p=871790&postcount=29
TarheelTraveler response http://tugbbs.com/forums/showpost.php?p=871886&postcount=30
AKTHUE response http://tugbbs.com/forums/showpost.php?p=871895&postcount=31

ClubsRDead says rent http://tugbbs.com/forums/showpost.php?p=878252&postcount=71
my response http://tugbbs.com/forums/showpost.php?p=878276&postcount=72

ClubsRDead says rent again http://tugbbs.com/forums/showpost.php?p=879615&postcount=110
i point out that ive already responded http://tugbbs.com/forums/showpost.php?p=879616&postcount=111

ClubsRDead questions value(point/concept) of DCs http://tugbbs.com/forums/showpost.php?p=880629&postcount=128
my response http://tugbbs.com/forums/showpost.php?p=880648&postcount=129

Yes, originally T&H on the high side of things. AK was loosely affiliated at the time, or so I thought, but I believe the relationship had terminated or was in wind down when my monies cleared from what I now know. The option to take AK trips / journeys was a part of my "deal" and I actually did take a few. At the time I think TH housed a AK travel person in their service center in Kansas City. The marketing materials from the time I began to review the club until when I actually joined did change.

in my post here i quoted "licensing agreement terminated in August 2005"
http://tugbbs.com/forums/showpost.php?p=879106&postcount=98
(although licensing fees earned $1.5MM in 2006)

re lost deposits >

yellowstone club world chapter 7 had 3 people seeking $1.5MM each

15 members of TH paid a $1.3MM deposit, then $80K > $160K in dues for legendary retreats before TH filed chapter 11 about a year later. including opp cost, thats ~$1.6MM for a max of 56 nights.

8 solstice sky members paid deposits up to $2.49MM
 
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ClubsRDead

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I don't understand the point of your post and re-quotes above. That's okay, I don't have too. Hopefully it wasn't just to rub in the pain.

No doubt I have said, ie the "club concept is dead," (evident by sales) that one is more likely to rent and pay as they go.

TH only sold like 52 properties to UR. Some UR just didn't take at the last minute, but not sure that it was 15 of them.

I don't think anyone disputes that short-term rentals were a problem.

So too was unlimited travel days - not just in the rentals, but in the owned assets. The rentals, for the most part, or long-term leases, were often nicer than the owned inventory. I still say that UR's best assets, some of them now since the acquisition, were often TH's "worst," or put differently, least utilized.

At the LR level, it turned out we didn't own any homes. There was some weird arrangement on a couple with some equity-split, etc but I have no idea how that turned out. That' why LR members have become "Platinum" members at UR / UE. And now booking travel in what used to be DR and PR level homes at TH. Not that exciting...
 

Kagehitokiri2

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you were legendary? ouch. :( hope you used a bunch of nights.
At the LR level, it turned out we didn't own any homes. There was some weird arrangement on a couple with some equity-split, etc but I have no idea how that turned out.
sounds like they might have been doing some lusso-style arrangements with property owners.

IIRC i got the both numbers from an article on bankruptcy filing.
No doubt I have said, ie the "club concept is dead," (evident by sales) that one is more likely to rent and pay as they go.
thats not what you said... you repeatedly said 'why would anyone join instead of renting?' (in other words 'DCs are worthless' & 'people who would join are stupid') and you ignored any responses to these statements/"questions."

* for those who want to rent, there are DC trials

* DCs can provide things rentals cannot

re unlimited use, i could post details on the main fractional system
 
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ClubsRDead

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thats not what you said... you repeatedly said 'why would anyone join instead of renting?' (in other words 'DCs are worthless' & 'people who would join are stupid') and you ignored any responses to these statements/"questions."

No, we had a whole thread on this, where you challenged "everyone is an idiot," and I said - but there's plenty.

I'm not sure if this is intended to be a useful board and trade of information, or just a few out there wanting to pick everyone's comments apart?
 

Kagehitokiri2

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how about explaining your repeated positions that DCs can never offer anything of value, and rentals are always better?

also, statements that imply all DCs have the same exact financial structure are pretty ridiculous.

I'm not sure if this is intended to be a useful board and trade of information, or just a few out there wanting to pick everyone's comments apart?
It's uncanny how many of the DC4MS folks moved over here. As with the prior forum, nothing gets nor can be resolved here.
depends on how you define resolved. but its not about resolution, its about information. (as you now agree :confused:)
 
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PerryM

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Wikipedia

Do a search for "Destination Club" in Google and the Wikipedia definition is 4th from the top - http://en.wikipedia.org/wiki/Destination_club

I'd suggest that any DC member who cares about DCs update the definition and supply a list of current DCs and some stats for each. Anyone can add their knowledge of DCs for the rest of the world to read.

That would be a lot more help than you guys playing catch with knives.....
 

Kagehitokiri2

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TH owned 67 properties for 874 members (13:1)

ive said this was ridiculolus in the past.

however, just remembered this re EE's plan and debt cap. >

ratio
Equity Estates has a 10:1 member to home ratio for "Purchased" homes and they have a 7:1 member to home ratio for total homes

lease (~30%)
we expect to have invested over $100 million into 30 to 35 residences and we will lease 13 to 15 residences. We intend to have 43 to 50 vacation residences

debt
The maximum allowable debt is 23% of total assets or 30% of net assets.

(if TH owned figure was 70% then 30% lease, total ratio would be 9:1)

***

SciFrog, looks like 3 contracts at FS vail were canceled, and prices (at least on top units) have been dropped
http://residences.fourseasons.com/private_residences/vail/your_private_residence/ownership_overview/
FS = 1 vail rd

http://www.vaildaily.com/article/20100320/EDITS/100319453/1021&ParentProfile=1065
owners start moving into solaris next month
solaris = 141 e meadow dr
 
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travelguy

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TH owned 67 properties for 874 members (13:1)

ive said this was ridiculolus in the past.

however, just remembered this re EE's plan and debt cap. >

As we've discussed ad nauseum on DC4MS, I believe there are serious questions about not only the EE biz plan but also the statements from the EE Execs themselves! The EE execs were caught up several times in their contradictory statements about how their finances were applied to their biz plans. IMO, EE has benefited greatly from the demise of the info posted on DC4MS. ;)
 

Kagehitokiri2

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travelguy,

for me, the "unanswered question" is what is tied to interest payments.

i think my calculation was something like 7.5% over 10 years, and i got ~$10K per member per year

thats in addition to mgmt fee of ~$3K per member per year

although i guess there is no reason they cant still have debt at sale time, and just deduct it from distribution.

changing 10 years to 30 years would drop it 40%? that would be ~$6K per member per year.
 
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travelguy

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for me, the "unanswered question" is what is tied to interest payments.



although i guess there is no reason they cant still have debt at sale time, and just deduct it from distribution.

changing 10 years to 30 years would drop it 40%? that would be ~$6K per member per year.

I also don't believe the EE execs various answers for the source of the "operating costs". We are to believe that the lower than "market" (or what's left of the market) membership costs will support their current and future overhead in addition to providing equity in the properties?

One thing that EE has is momentum in new membership income and true believers that continue to fund the club while defending it's fuzzy numbers. This scenario seems very familiar to me ..... :eek:

Really wish we had the cached pages of DC4MS to quote from.
 

ClubsRDead

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TH owned 67 properties for 874 members (13:1)

ive said this was ridiculolus in the past.

This is really a mute point since it's all long gone. But their member to home ratio was not 13-1 when you count also the short term rentals, longer term rentals - and long term leases. Plus, you had maybe 15-20 other homes in the mix of things that came thru various (and odd) member deals. Availability was never an issue at TH (thus a big part of their downfall).

McGrath had some wacky formula that for every 6 you should buy (wasn't followed at the end, and certainly not after AK separation), plus you bring on a long term lease and something like bring on a rental for every 12. I can't remember how he explained or justified it, it didn't work. But you could pretty much book where you wanted, when you wanted. And LR members could book downwards too, meaning take a DR or PR level home if it was in a place you wanted and available within a certain time frame.

I do know this, there were not 67 properties sold to UR. It was 52 or 54. Some of the properties you refer to from quoting BK figures must include the empty lots, Carnegie Abby (not bought by UR), and some other fractional interests. They were considered properties or interests, but didn't go forward into UR / UE.
 

Kagehitokiri2

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just looking at (current) dues, they really arent that different once you break them down. (i compared with AK.)

hideaways is ~$500/nt as well.

m private residences is ~$500>$800, and is allowing resales again.

OTOH, if lack of transparency wasnt silly to begin with, surely the state of the industry/etc has made it so.

looking at rocksure again, definitely resembles luxus. fund B has 1.5 units left. not sure where they stand on capital fund. theyve started marketing that to corporate market. theyve also started exchange between funds now, although it involves cash.
 
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travelguy

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I ask what I asked above, again - what club do you belong to?

Club Kage! :D

Maybe Kage is too smart to join a DC at this point?

Personally, I think it's a benefit that Kage does not belong to a club (that I'm aware of) and can be an impartial skeptic, as am I.
 

PerryM

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Club Kage! :D

Maybe Kage is too smart to join a DC at this point?

Personally, I think it's a benefit that Kage does not belong to a club (that I'm aware of) and can be an impartial skeptic, as am I.

Well. does that include me too? :)
 
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