Corporate Takeovers of Independent Resorts

Corporate interests appear to be again looking for independent resorts to take over. I turn to TUG for answers to the following:

• What resorts are currently under attack from corporate interests?
• What takeover techniques are being used?
• What is resort management doing to fight the takeover?

TUG responses may give us an indication of how widespread this is, how to recognize a takeover in progress at your resort and what to do about it.

It is up to the individual owners to make it work

Maple_Leaf said:

Corporate interests appear to be again looking for independent resorts to take over. I turn to TUG for answers to the following:

• What resorts are currently under attack from corporate interests?
• What takeover techniques are being used?
• What is resort management doing to fight the takeover?

TUG responses may give us an indication of how widespread this is, how to recognize a takeover in progress at your resort and what to do about it.

Click to expand...

Watch for elections that try to place Corporate employees on the Board vs individual owners. Buy outs of large blocks of inventory recovered on foreclosure or buy backs. Operation or extensions of management contracts with the original developer rather than an independent, owner focused management group working to properly operate and fund reserves/upgrades based on competitive bids rather than simple percentage fees, etc.

Many states limit the ability of developers to remain in charge after certain levels of sell out are reached but it is up to the owners to ensure th rules are followed. It is, IMO, always better for owners for non-Developer based management to step in after the resort is ready to stand alone on operation and maintenance going forward. You need a strong, owner supported BOD for that and it is well worth finding those willing owner volunteers in the long run.

Royal Dunes on HHI

Maple_Leaf said:

Corporate interests appear to be again looking for independent resorts to take over. I turn to TUG for answers to the following:

• What resorts are currently under attack from corporate interests?
• What takeover techniques are being used?
• What is resort management doing to fight the takeover?

TUG responses may give us an indication of how widespread this is, how to recognize a takeover in progress at your resort and what to do about it.

Click to expand...

Diamond Resorts International is evidently trying to take control of the HOA for Royal Dunes Resort on Hilton Head.

DRI has apparently been conducting an overt campaign to disrupt the resort. There are reports of DRI sales staff at other resorts spreading unfounded rumors about Royal Dunes including:

• The maintenance fees will double in 2011
• Unless you convert your Royal Dunes week to points you will lose access to the resort

DRI is soliciting Royal Dunes owners to convert their weeks to points. In another thread on this board as part of research into HHI sales volume and prices several of us identified apparent DRI purchase activity in the county deed records.

The HOA is fighting back. They have communicated this information about rumors and other unscrupulous activities to owners so that they are aware of what DRI is doing. And they have modified the proxy to make it easier for owners to assign their voting rights, e.g. going to an electronic proxy and a 3-year proxy.

Is this type of takeover activity happening anywhere else? Or are we the lucky ones?

Maple_Leaf said:

Corporate interests appear to be again looking for independent resorts to take over. I turn to TUG for answers to the following:

• What resorts are currently under attack from corporate interests?
• What takeover techniques are being used?
• What is resort management doing to fight the takeover?

TUG responses may give us an indication of how widespread this is, how to recognize a takeover in progress at your resort and what to do about it.

Click to expand...

Here is a thread referring to Wyndham's "fee-for-service" program called the Wyndham Asset Affiliation Model (WAAM). Instead of building or buying resorts, they can just market unsold units of other condos and resorts as UDI points.

http://www.tugbbs.com/forums/showthread.php?p=966553

In some cases it's not always "taking over" but rather "saving" the resort or condo building. Here is an example:

http://tugbbs.com/forums/showthread.php?t=124151&highlight=grove

In this economy, I think this should and probably will be the new modus operandi for the big players in the game. Supply exceeds demand as it is, no use to build more.

Safe for another year

timeos2 said:

Watch for elections that try to place Corporate employees on the Board vs individual owners. Buy outs of large blocks of inventory recovered on foreclosure or buy backs. Operation or extensions of management contracts with the original developer rather than an independent, owner focused management group working to properly operate and fund reserves/upgrades based on competitive bids rather than simple percentage fees, etc.

Many states limit the ability of developers to remain in charge after certain levels of sell out are reached but it is up to the owners to ensure th rules are followed. It is, IMO, always better for owners for non-Developer based management to step in after the resort is ready to stand alone on operation and maintenance going forward. You need a strong, owner supported BOD for that and it is well worth finding those willing owner volunteers in the long run.

Click to expand...

Royal Dunes had about a 50% participation in their HOA elections, keeping the DRI wolves at bay for another year. The board put in place a quorum of 30% and a three-year proxy to ensure adequate owner participation in future elections and reducing the chance of a DRI corporate hack getting on the board.