# The TravelGuy Approved Cost-Per-Night Summary!



## travelguy (Oct 18, 2007)

I've spent some time compiling a spreadsheet of the membership programs of the major Destination Clubs.  I've done this in an attempt to get an accurate comparison of the programs.  I believe I've managed to get not only one, but several "apples-to-apples" comparisons of the value of each DCs membership program.

There has been a number of discussions on the ways Cost-Per-Night (CPN) is determined and I've come up with the "TravelGuy Approved" method of CPN computations, or as I like to call it ... the Definitive CPN!  I spent many long decades developing my secret CPN methodology with the help of several wise monks, a thing called in-ter-net, caffeinated beverages from the Seattle area, the Star Wars soundtrack (episode 4, not that new crap), various fur bearing household pets and wives #3 and #4. SO, lets not beat up TravelGuy for his methodology of determine CPN ... let's all just bask in the warm glow of DC CPN information on ER, HCC, PE/UR and all the other acronyms.  

Here's part of the Assumptions used for my CPN calcs:

Assumes 10 year ownership of DC membership.
Amortizes the non-refundable portion of the membership deposit over 10 years.
Applies 5% A.P.R. opportunity cost to the refundable portion of the membership deposit.
Equity in the form of payments to members or increases in the value of refundable membership deposits are not factored in.
Here are the areas of comparison:

*Total Cost-per-Night *- You know what this is.
*Total Cost-per-Night per $1 Million of Home Value *- This is the CPN divided by the DC's average value of home.  This is what you pay per night for each Mil of house.
*Total Cost-per-Night per Bedroom *- This is the CPN divided by the DCs average bedrooms per property.  This is what you pay each night per bedroom
Also notice that I've throw in a timeshare for comparison.  It's a HGVC 5000 pt, 1 bedroom timeshare that can be reserved on Holidays and peak time periods.  Note - The timeshare is at the bottom of the list so you have to scroll down to see it.

Here is a summary of info from the spreadsheet.  TUG does not support the attachment of spreadsheet files at this date so some manually formated text (scribed by the monks) is what you get:



```
[B][COLOR="Purple"]                                           TOTAL COST  TOTAL COST  TOTAL COST
                                            PER NIGHT   PER NIGHT   PER NIGHT
 CLUB                   TIER                            /$1M HOME   /BEDROOM [/COLOR][/B]
 Exclusive Resorts      Elite                  $1,621       $540        $405 
 Exclusive Resorts      Executive              $2,073 	    $691        $518 
 Exclusive Resorts      Affilite               $2,247 	    $749        $562 
 Exclusive Resorts      Associate              [B][COLOR="Red"]$2,367[/COLOR][/B]       $789        [B][COLOR="Red"]$592 [/COLOR][/B]
 Private Escapes        Pinnacle               $1,226 	    $409        $273 
 Ultimate Resort Elite  Platinum Plan          $1,405       $468        $351 
 Ultimate Resort Elite  Gold Plan              $1,855 	    $618        $464 
 Ultimate Resort Elite  Silver Plan            $2,256       $752        $564 
 Ultimate Resort Elite  Bronze Plan            $2,256 	    $752        $564 
 Ultimate Resort        Platinum Plan            $948       $632        $237 
 Ultimate Resort        Gold Plan              $1,214       $809        $304 
 Ultimate Resort        Silver Plan            $1,460       [B][COLOR="Red"]$973[/COLOR][/B]        $365 
 Ultimate Resort        Bronze Plan            $1,454       $970        $364 
 Quintess               60 Night Non Holiday   $1,485       $371        $371 
 Quintess               45 Night Holiday       $1,683 	    $421        $421 
 Quintess               30 Night Holiday       $1,653 	    $413        $413 
 Quintess               15 Night Non Holiday   $1,742 	    $436        $436 
 BelleHavens            Explorer               $1,075       $537        $269 
 BelleHavens            Voyager                $1,115 	    $558        $279 
 BelleHavens            Adventurer             $1,163 	    $582        $291 
 BelleHavens            Traveler               $1,207 	    $604        $302 
 Private Escapes        Platinum                 $735 	    $490        $184 
 Private Escapes        Platinum Preview       $1,080 	    $720        $270 
 Private Escapes        Premiere                 $431 	    $539        $144 
 Private Escapes        Premiere Preview         $635       $794        $212 
 High Country Club      Group                    $367 	    $431        $122 
 High Country Club      Private                  $297       [B][COLOR="Blue"]$350[/COLOR][/B]         [B][COLOR="Blue"]$99 [/COLOR][/B]
 High Country Club      Affiliate                $349       $410        $116 
 High Country Club      Associate                $399       $470        $133 
 High Country Club      Trial                    $430       $506        $143 
 HGVC Timeshare	        5000 pts                 [COLOR="blue"][B]$228[/B][/COLOR] 	    $570        $228
```

Low Cost is in *Blue*
High Cost is in *Red*

Interesting stuff eh?


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## Kagehitokiri (Oct 18, 2007)

very nice work 

although i must admit im quite partial to the choral pieces on the scores for SW episodes 1>3. 

BTW i believe as a tug member, you can attach files to your posts. 
(like the actual excel file)


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## Steamboat Bill (Oct 18, 2007)

Great job....it is amazing to see a DC cost $99 per night per bedroom...these are Motel 6 prices!

I also like the PE and BH price points.


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## Tedpilot (Oct 18, 2007)

Great job Doug, it would be great if you could attach the file to share...

Ted


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## travelguy (Oct 18, 2007)

Kagehitokiri said:


> very nice work
> 
> although i must admit im quite partial to the choral pieces on the scores for SW episodes 1>3.
> 
> ...



Thanks.  

Nope, you can't attach a spreadsheet or even paste one into a forum post.  See this thread where I asked the question: http://www.tugbbs.com/forums/showthread.php?p=408981#post408981


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## travelguy (Oct 18, 2007)

Tedpilot said:


> Great job Doug, it would be great if you could attach the file to share...
> 
> Ted



I would love to attach the .xls file but can't (see the previous post).  I even had to cut out a lot of information from the text file to get it to fit.


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## Kagehitokiri (Oct 18, 2007)

ah, 100K limit. yeah not gonna happen with an MS product


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## NeilGoBlue (Oct 18, 2007)

travelguy said:


> [*]Equity in the form of payments to members or increases in the value of refundable membership deposits are not factored in.




Travel,

I understand that you can't factor everything in.. but, since the main attribute of Bellehavens and Crescendo is equity appreciation (or at least protection), could you at least factor in a 1-3 percent per year appreciation for these clubs?


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## Kagehitokiri (Oct 18, 2007)

speaking of crescendo's appreciation >
http://www.heliumreport.com/archives/658-crescendo-real-estate-portfolio-appreciates-8-8-in-2006


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## vineyarder (Oct 18, 2007)

Travelguy,

Since PE is still offering unlimited usage, how many days per year are you basing your calculations on?  Clearly that will have a huge impact on the per night costs...  Someone who uses 28 days a year will be paying substantially more per night than someone who uses 60 or 70 nights per year...

Also, your figures for some of the clubs seems to be off; for example:

HCC trial membership; $20K deposit @ 5% = $1000 opportunity cost, plus $1750 dues, = $2750 total cost, divided by 7 nights = $393 per night, but spreadsheet says $430; perhaps your spreadsheet had the deposit as 80% refundable rather than 100% refundable? 

Same with PE Premiere Preview & PE Platinum Preview; they also seem to be higher on the spreadsheet than in actuality, maybe the same reason?


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## travelguy (Oct 19, 2007)

*So much for basking .....*

So much for basking in the warm glow of DC CPN information.  Somehow I knew there would be suggestions and questions on the TravelGuy methodology.  



NeilGoBlue said:


> Travel,
> 
> I understand that you can't factor everything in.. but, since the main attribute of Bellehavens and Crescendo is equity appreciation (or at least protection), could you at least factor in a 1-3 percent per year appreciation for these clubs?



I'm all for assigning a value to the "Equity" DCs, just don't know how to do it in a way that will be universally accepted by all mankind.  Future predictions on property appreciation are hard to predict, let alone this type of luxury vacation property.

Your appreciation factor of 1 - 3 percent per year seems quite reasonable.  I know some published appreciation percentages during the short history of DCs are much higher but may be very hard to sustain over a 10 year period.  I'm also not quite clear on how much of the actual market appreciation filters down to the member deposit.

Let's see if we can get a consensus on this before I go back to the cave and revamp the spreadsheets.  I'd suggest a factor at 50% of the 5% A.P.R. opportunity cost to the refundable portion of the membership deposit.  This makes the equity appreciation factor at 2.5% A.P.R..  This allows both numbers to be conservative and equity would be adjusted upward as the investment return factor is adjusted upward.

I'd like to get thoughts from the board on this remembering to keep-it-simple.




vineyarder said:


> Since PE is still offering unlimited usage, how many days per year are you basing your calculations on?  Clearly that will have a huge impact on the per night costs...  Someone who uses 28 days a year will be paying substantially more per night than someone who uses 60 or 70 nights per year...?



PE is the only DC where I included some type of additional "days" for unlimited use even though several DCs have a similar membership program for "unlimited" use.  I believe that the use of PE properties is unlimited but the number of days booked at any point in time IS limited.  Therefore, the number of "unlimited" days that can realistically be used is in inverse proportion to the number of long-term reservations that a member has made.  The scribing monks refer to this as the "theory of quantum ulimitedusageability"".

I believe I've been generous to PE by assigning 40 days use plus 7 days of reciprocity for a total of 47 days.  This is more than any other DC membership except the Bellehavens Explorer membership which is 60 days.  I'd bet that most PE members use many less days which would actually drive their CPN higher.



vineyarder said:


> Also, your figures for some of the clubs seems to be off; for example:?



Hey now! Whoa! What the...!  I'm hurt.  Hate the play, not the playa!!  



vineyarder said:


> HCC trial membership; $20K deposit @ 5% = $1000 opportunity cost, plus $1750 dues, = $2750 total cost, divided by 7 nights = $393 per night, but spreadsheet says $430; perhaps your spreadsheet had the deposit as 80% refundable rather than 100% refundable?
> 
> Same with PE Premiere Preview & PE Platinum Preview; they also seem to be higher on the spreadsheet than in actuality, maybe the same reason?



Nope.  I have the data correct and as you state here.  However, you have forgotten your economics 101 and the magic of A.P.R.  The 5% pure opportunity cost is exponential so the total opportunity is higher than what you state.  Here's the abridged data on the HCC Trial membership hot from the Monk's scrolls:

*HCC Trial*
Initial Fee: $20,000
Annual Dues: $1,750
Nightly Fees: $0
Refundable Portion: 100%
Nights: 7
Average bdrms: 3
Average home: $850,000

Annual Dues/night = $250
Pure Opportunity Cost/night = $180 ($1260/week)
Non Refundable Initial Fee/night = $0
Nightly Fee = $0
C.P.N = $430
C.P.N. / $1Mil Home = $506
C.P.N. / Bdrm = $143

Ditto with the PE Preview programs; data is correct.

Finally, any and all errors and/or complaints on the CPN methodology should be directed at the scribing monks who tend to imbibe during data entry.  

And for the record ... I'm still with wife #1 after 20 years.  (Just in case my wife should read the part about wives #3 and #4)


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## NeilGoBlue (Oct 19, 2007)

travelguy said:


> So much for basking in the warm glow of DC CPN information.  Somehow I knew there would be suggestions and questions on the TravelGuy methodology.
> 
> 
> 
> ...



I personally would be very conservative.  I'd use a 2-3% yearly appreciation.  For Bellehavens' that would be 90% of 2-3% and I think for Crecsendo it would be 60% of 2-3%.


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## PerryM (Oct 19, 2007)

*Great Job!!!*

Travelguy,

Fantastic work – thanks a bunch!

Now let’s use those numbers and compare them to VRBO:



Park City, UT:

Also at http://www.summitpacificinc.com/grand-summit-resort.html
(4 Diamond resort next to main gondola at The Canyons)

At The Canyons, Park City, UT:
A Premium week goes for $650/nite[/URL]
Penthouse 2BR during Christmas week is $730 - $1,211/nite


Take Wailea Maui - 

Here’s a great Ekahi Village 2BR 
Christmas and New Years week is $470/nite

I can go on and on…………


Travelguy’s table just convinces me that I can get the same 4 diamond accommodations for about the same price and I don’t need to cough up $200k - $500k and hope the DC is around 10 years from now.


Me, I'm still a renter.


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## vineyarder (Oct 19, 2007)

> I'm all for assigning a value to the "Equity" DCs, just don't know how to do it in a way that will be universally accepted by all mankind. Future predictions on property appreciation are hard to predict, let alone this type of luxury vacation property.
> 
> Your appreciation factor of 1 - 3 percent per year seems quite reasonable. I know some published appreciation percentages during the short history of DCs are much higher but may be very hard to sustain over a 10 year period. I'm also not quite clear on how much of the actual market appreciation filters down to the member deposit.
> 
> ...



My personal thoughts are to consider them a different species, and simply have two charts:  "equity DCs" and "non-equity DCs".  Since most equity DCS (other than the original PE annual dividend program) only 'pay-out' when you quit, I would keep the numbers as they are, but include a footnote that 'appreciation of the deposit may substantially offset the per night cost, if the membership is ever relinquished'.  



> I believe I've been generous to PE by assigning 40 days use plus 7 days of reciprocity for a total of 47 days. This is more than any other DC membership except the Bellehavens Explorer membership which is 60 days. I'd bet that most PE members use many less days which would actually drive their CPN higher.



I agree that is a reasonable figure to use...



> Nope. I have the data correct and as you state here. However, you have forgotten your economics 101 and the magic of A.P.R. The 5% pure opportunity cost is exponential so the total opportunity is higher than what you state.



I stand corrected; I was amiss in assuming simple interest...



> I believe I've managed to get not only one, but several "apples-to-apples" comparisons of the value of each DCs membership program.



Fascinating data, and I appreciate all the work you put into it... and while it really tries to compare apples-to-apples, in some ways it seems like it is using data to blur the fact that it is still apples-to-oranges-to-pears-to-peaches... even within the same club.  Not that I think that a better methodology exists, but just that there are so many other factors that are not included, even to the degree of individual usage patterns within clubs.

For example, how do you account for plans that allow variable amounts of holiday usage?  For example, in PE Platinum, within the next 6 months, I currently have reservations on the books for Thanksgiving, Christmas, and Spring Break.  To get that within another club I would have to buy additional holiday reservations (if they were willing to sell me them), at most likely a substantial upgrade cost (for example ER does this at a cost of somewhere in the vicinity of $100K extra deposit and $10K extra per year)... Or how do you account for reservation flexibilty, i.e. the ability to arrive and depart on any day, stay 1 - 14 days, etc.  Clearly this cannot be readily assigned a value, as it will be different for each member, so in my opinion, an apples-to-apples comparison isn't possible (or appropriate) since one is an apple and one is an orange; some will prefer apples and some will prefer oranges.

The 'cost per night per $1M home' and 'cost per bedroom' are very interesting, but also will vary considerably...  For example, let's say Lusso buys a $3M house in a new resort.  Then ER comes along and buys 20 identical houses in the same resort, but since they are buying 20 of them, they pay only $2.5M per house.  Dividing nightly cost for Lusso by $3M and nightly cost for ER by $2.5M would make it seem like Lusso has a nicer house, whereas in reality ER just got a better deal...  And cost per bedroom would also vary considerably with floor plan; let's say DC A and DC B each buy a 3000 sq ft house in the same development, but DC A has 4 bedrooms, while DC B build out the house to have 8 tiny bedrooms... the cost per bedroom for DC B is now half that of DC A, even though the square footage is the same, and the average member might prefer 4 large bedrooms to 8 tiny ones... So maybe cost per sq. ft. might be a better measure?  And how do you account for location and views?  DC A might have a 3000 sq ft 4 bdrm house 2 blocks from teh beach, while DC B has a 2500 sq ft 3 bdrm house right on the beach; how do you account for this significant, but nonfinancial, factor?  The current methodology gives DC A the clear advantage, but many people would prefer DC B's home... Perhaps using an 'equivalent rental rate per night'?

Another factor that is not included are the 'extra services'; some DCs include daily cleaning, some only midweek, some only between stays... Some DCs include a car, some have on-site local concierges, some have discounted or free golf, etc...

Lastly (finally), even within a specific fruit (DC), there will be significant variation based upon individual preferences and individual usage.  For example, lets say Dr. Smith and Dr. Jones both join HCC trial.  Dr. Smith uses his week to stay in NYC, so his cost per night is $430, his cost per $1M home is also $430, and his cost per bedroom is also $430.  Dr. Jones uses his week to stay at the Breckenridge Mountain Lodge, so his cost per night is also $430, but his cost per $1M is perhaps $172 and his cost per bedroom is $108.  Huge differences, based entirely on personal preferences and usage patterns.

Again, great job on the numbers, but I think people need recognize that all DCs are not exactly alike other than cost, and so are not all apples.  The costs per night may be helpful as just one component when comparing different varieties of fruit, also taking into account the intangibles (reservation system, availability, destination choices, location at the destination, cleaning, extra services, etc.) that make them very different fruits.


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## TarheelTraveler (Oct 19, 2007)

I appreciate TravelGuy's work on this.  I know that I've personally spent days creating spreadsheets trying to analyze the various options.  It also takes some guts to put it out there for critique.  It's a tough crowd.  As Vineyarder pointed out, there are a lot of additional variables out there to consider, but I think that it's almost impossible to quantify most of them.

Being in the equity DC group, I, of course, think you have to assign some value to equity appreciation.  I find it hard to believe that over a sustained period of time that you would not have some level of appreciation.  History bears that out.  The people on this board clearly assign some value to ownership and equity, because it seems like that is a primary complaint you hear on the board about most of the DCs, as compared to straight up ownership, fractional ownership and timeshares.  The enthusiasm for the DC product, which I can certainly attest to, sometimes makes people forget that complaint though.

If you assign a value to opportunity cost, it seems like you've got to assign a value to equity appreciation which reduces opportunity cost.  I know that you have to resign in order to realize the appreciation, but isn't that the case for the 80-100% membership cost which is recouped and considered in the computations?  It seems like footnoting it is not much better than ignoring it.  I would instead prefer to assign a very conservative below historical appreciation rate.

When I did my spreadsheets, I determined that any appreciation significantly reduces the per night costs, and if you chalk up numbers in the 8%-10% range, you actually see *negative* per night costs.

With respect to Crescendo, I would multiply the appreciation by 60%, and personally, I think that 3% is a very fair conservative 10 year number.  If you look at actual historical appreciation for coastal, urban and ski properties, I suspect it would be much higher, because of the limited supply compared to overall U.S. and international real estate market.  With Bellehavens, my understanding (NeilGoBlue - correct me if I'm wrong) from speaking with them and doing my numbers is that there is essentially a 30% profit taken off the top going to the development company before the property is placed in the member owned entity, so when I ran my numbers, I used a 70% member appreciation cut.  The way I looked at it was Crescendo's management cut was on the back end, and Bellehavens was on the front end.


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## TarheelTraveler (Oct 19, 2007)

One more thing.  I *really* like the analysis based on cost per $1M home.  When doing my spreadsheets, I had not thought of that angle. It's a very good way to compare apples to oranges and more appropriate in my view than a cost per bedroom.  A Ritz-Carlton room is not the same as a Hampton Inn room.  However, the ballpark market costs of the homes in the various clubs do inherently factor in spec. levels, amenities of the home and neighborhood, location, etc.  From my perspective, it tends to show what I've always suspected, HCC is still a very good (but not ridiculous) value, Quintess gives you a lot of bang for the buck (bigger, more expesive houses at ER or less prices), and that ER and UR are potentially more expensive.


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## Steamboat Bill (Oct 19, 2007)

PerryM said:


> Me, I'm still a renter.



That is funny as this table confirms to me (again) that I made a smart decision (for my particular travel needs) to join HCC.

I save 50% or more per night when I stay at a HCC property vs renting.

I also HATE the VRBO website....it stinks!

I figure in 2-3 years, I am at the break even point (assuming I get $0) in return from my initial investment in joining HCC.

I also think there is real value in BH if they have 5% appreciation of your deposit. This, in essence, negates the lost opportunity costs associated with joining a DC. Thus, in my mind, someone joining BH should probably only consider their annual dues only.


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## PerryM (Oct 19, 2007)

Steamboat Bill said:


> That is funny as this table confirms to me (again) that I made a smart decision (for my particular travel needs) to join HCC.
> 
> I save 50% or more per night when I stay at a HCC property vs renting.
> 
> ...




Every time I buy something I can almost guarantee you that something even better comes along shortly thereafter and would have been an even better use of my money.


I just find timeshares to be a great leverage of our money.  Someday I have no doubt that a DC will come along that we will buy into.  Not the ones wanting me to give them a personal loan of $200k - $500k but something that I deem as a "Throw away investment" - I probably can get great usage out of it before all hell breaks loose.

To me, HCC is just too expensive and outside of my "Throw away" threshold.

Maybe they'll start a HCC II and start it at $25k with 80% of the CURRENT membership fee when you leave - that I'd snap at instantly.


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## NeilGoBlue (Oct 19, 2007)

TarheelTraveler said:


> With respect to Crescendo, I would multiply the appreciation by 60%, and personally, I think that 3% is a very fair conservative 10 year number.  If you look at actual historical appreciation for coastal, urban and ski properties, I suspect it would be much higher, because of the limited supply compared to overall U.S. and international real estate market.  With Bellehavens, my understanding (NeilGoBlue - correct me if I'm wrong) from speaking with them and doing my numbers is that there is essentially a 30% profit taken off the top going to the development company before the property is placed in the member owned entity, so when I ran my numbers, I used a 70% member appreciation cut.  The way I looked at it was Crescendo's management cut was on the back end, and Bellehavens was on the front end.



Tarheel,

You are correct, I wasn't sure the best way to factor that in, but 70% of the appreciation is probably the best way..


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## Steamboat Bill (Oct 19, 2007)

PerryM said:


> Maybe they'll start a HCC II and start it at $25k with 80% of the CURRENT membership fee when you leave - that I'd snap at instantly.



Technically that sounds like the "new" 7 night companion plan to me.

http://www.highcountryclub.com/about/News/20071019.asp


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## Kagehitokiri (Oct 19, 2007)

PerryM said:


> Me, I'm still a renter.



some DCs have properties that CANNOT be rented.

also, your points are basically why im more interested in higher end clubs with higher end homes, AND unlimited use. so id be getting a great nightly discount, plus could really use the hell out of it when i have the flexibility. 

i remember you liked the onekeyworld model, but id also be curious to hear your take on the WPR model, where you pay X down, and no annual fees, get X weeks per year, then after the 10 year maturity comes around, you get paid back your deposit plus interest. (WPR's estimates work out to ~6% APY IIRC)



travelguy said:


> I believe that the use of PE properties is unlimited but the number of days booked at any point in time IS limited. Therefore, the number of "unlimited" days that can realistically be used is in inverse proportion to the number of long-term reservations that a member has made.


 ciel for example allows basically unlimited use, and up to 7 or 9 reservations (1-week) at one time, depending on plan.



Steamboat Bill said:


> Technically that sounds like the "new" 7 night companion plan to me.


 but without the equity he wants.


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## TUGBrian (Oct 19, 2007)

how big is the xls file?

send it to me and ill get it up for you if I can.


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## Steamboat Bill (Oct 19, 2007)

TUG Improvements! said:


> how big is the xls file?
> 
> send it to me and ill get it up for you if I can.



That's what you call "super mod" capabilities!


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## TarheelTraveler (Oct 19, 2007)

Neil - I'm correcting myself.  I guess it would really be 60% for Bellehavens as with Crescendo (30% on front end and 10% on the back end).  I forgot that it was 90% of current value on back end.


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## NeilGoBlue (Oct 19, 2007)

TarheelTraveler said:


> Neil - I'm correcting myself.  I guess it would really be 60% for Bellehavens as with Crescendo (30% on front end and 10% on the back end).  I forgot that it was 90% of current value on back end.



Technically, that only comes into play if they wind down the club.

Since the appreciation in your deposit 10 years from now is actually a function of the current deposit (90% of current deposit), it might not come into play.  Also, management's take is about 15% (about 300K on a 2mm property).

So, I don't know the most accurate way to project the appreciation.  But in my heart (and my head) 2-3% net appreciation seems conservative and appropriate.


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## BocaBum99 (Oct 19, 2007)

I think you need to factor in occupancy rate into cost.  If the average occupancy is 70% across the industry, then for every person who uses 100% of their alloted days, there is someone who uses only 40%.  If you don't adjust for actual usage or occupancy rate, then you are deluding yourself in terms of how low your costs really are relative to renting the same accommodations with cash on demand.

I also like the idea of adding in the equity expectation.  Assuming zero is too conservative.

You should also include an inflation rate for maintenance fees.

And, 5% isn't a true opportunity cost.  That's the rate you would lose if you had your money in a money market account or treasury bills over the 10 year planning horizon.  I doubt that people with $200k in excess cash would just let it sit there in a money market account over 10 years.  Paying off your mortgage would yield a better return.  Cost of capital is a more realistic amount to use.  Because that would be comparing it to the equivalent rental rate.  But, you can use your whatever number you want.

You also need to forecast rental rate increases.  Those increases would make your comparison more favorable.

Of course, my model allows you to compare the option of investing your cash and simply renting accommodations in Million dollar homes.  If you don't want to allow that in your comparison, then your model is sufficient in comparing the alternatives.


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## travelguy (Oct 20, 2007)

*Methodology, Monks and Maui, oh my!*

Interesting thoughts on the methodology to determine factors for Equity, Rentals, Quality of properties, etc.  It appears that we can quantify most, if not all, of these and add them to the CPN spreadsheet for DC comparison.  I have some ideas but don't have time to get into them right now.  I also need to update the new HCC programs and might throw in data on the PE/UR post-merger pricing.

The scribing Monks and I are off to the airport for an all day flight from the East Coast to the HCC Maui property and two-weeks in Paradise!  The Monks thing we're headed to Munich for Oktoberfest but they won't mind as long as they can imbibe in some fruity cocktails.   

In a day or two (depending on jet lag and imbibe "fatigue") I'll update the board on my ideas to update the TravelGuy approved CPN spreadsheet.  Once updated, I'll get it to Super-Mod Brian to see if we can get the spreadsheet to the masses.

Gotta go, wife #1 says we gotta round up the Scribing Monks and get the airport!


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## vineyarder (Oct 20, 2007)

> The scribing Monks and I are off to the airport for an all day flight from the East Coast to the HCC Maui property and two-weeks in Paradise!



Have a fabulous time!

BTW, is the HCC Maui property an exception to the 1 week occupancy rule, or are you staying there 1 week and somewhere else the other week?


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## tombo (Oct 21, 2007)

Several people here have stated how much they like the unlimited usage that comes with their purchase. No vacation club model will function with owners getting unlimited usage. Eventually all the weeks will fill up with owners and no extra weeks will be available unless some people don't utilize what they own. If you buy a 1 million dollar home and 13 owners get 4 weeks each (leaving none open for maintenance) it will take an investment of $76,923 per member to purchase it. Where are the unlimited weeks? If you are paying less than $77,000 to join the club can only be buying locations by financing using your money as a down payment. This is an even scarier scenario because you are now financially obligated to the loans on all new properties they purchase.

Also there is the inherent risk in these ventures. If the vacation club is run poorly it can go broke and file Bankruptcy. If sales become slow or non-existent the Vacation Clubs will not continue to acquire new properties and might even walk away all together if they are no longer making money. If the joining fees and annual fees keep increasing to the point at which no new owners want to buy, then the moneyback guarantee is useless. The 100% or 80% buyback is only good after they sell 2 ,then  they buy one back. If hundreds of owners want to sell and very few people are buying then you will never get your refund and be obligated to pay the yearly fees until death or foreclosure. 

These are new concepts and only time will tell how much (if anything) they will be worth in the future. Remember in the 70's and 80's  everyone was told that by buying timeshares you were locking in a lifetime of vacations at the prices of the 70's and 80's. We now know that wasn't true becuase maintenance fees keep rising and assessments are common. The vacation clubs are hot now, but if they cool off or die out, the lost investment will be much more than was lost by purchasing timeshares from developers. When these start being sold cheaply on e-bay by people who can't get out and are tired of paying fees you will know that the bubble has burst. 

There are very few places in the world where I can't stay in luxurious accomodations (by doing a little internet research) for $300 a night or less with no investment risk required. I think the ability to stay in nice accomodations does not outweigh the huge investment and risk required. Take your favorite Vacation Club locations and call or google to inquire about homes for rent in those areas. For example a 5 bed room 4 bath house on the ocean with private pool in Gulf Shores Alabama goes for about $1500 a week from labor day till spring break if you negotiate a little. There are so many houses on golf courses in Hilton Head that many times you can get someone to really come down on the price if you look a little, especially in the off season. I have a friend who rents a month in October in a $1,000,000 oceanfront 3 bed room 2 bath condo with indoor and outdoor pools at Orange Beach Alabama for $1400 for the whole month. 

For 4 weeks vacation a year I can purchase 4 timeshares for $6000 or less and my annual MF's will be less than $2500 a year with the ability to trade for anywhere in the world. I won't have 3 or 4 bedrooms, but I will stay on the beach and not a short drive from the beach. I will  consider Vacation clubs when they go resale and get cheap.


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## Kagehitokiri (Oct 21, 2007)

outside of Asia and South America, you would be hard pressed to find a luxury villa for ~$300/nt. in such areas, you can also get incredible properties for ~$600+.

i was looking at beachfront properties (detached single family) on the east coast for the end of this past summer, and the lowest weekly rates i recall seeing were ~$1500.

unlimited use is controlled by limiting advanced reservations. ciel allows the most advanced reservations, 7 or 9, depending on plan, BUT the farthest out is 1 year.

also, vacation club = TS rental broker. destination club = owns portfolio of mid>high end properties which can be used by members.

IMHO there is no comparison between TS and destination clubs whatsoever. the comparison would be between high end fractional ownership and destination clubs. http://www.heliumreport.com/ul/images/v1/destination-club-analytic.jpg

me and my opinions >
http://www.tugbbs.com/forums/showpost.php?p=409643&postcount=27


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## Steamboat Bill (Oct 21, 2007)

tombo said:


> I will  consider Vacation clubs when they go resale and get cheap.



tombo

There are so MANY inaccurate statements in your post, I don't even know where to begin and feel it is probably a waste of time point out the many mistakes.

Please read the many excellent DC threads on this forum before posting such misinformation again.

Bill
Moderator


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## travelguy (Oct 21, 2007)

vineyarder said:


> Have a fabulous time!
> 
> BTW, is the HCC Maui property an exception to the 1 week occupancy rule, or are you staying there 1 week and somewhere else the other week?



I'm writing this on the patio of the High Country Club Maui property.  After 13 hours of flying to get here, I've "recovered" with several hours of Nascar and NFL.  It's weird to have a race start at 7:30am.

I'd like to stay 2 consecutive weeks at the High Country Club Wailea property but that's against the rules.  We are moving to a timeshare for the second week.  This will be the third time we've done a HCC + Timeshare two week trip. It will be interesting to see if there is as much of a letdown to go to the timeshare for the second week as we've experienced the first two trips.

More later.  I need to "recover" from the morning race and football games with several hours of beach therapy.


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## Steamboat Bill (Oct 21, 2007)

Doug

Have a great time in Maui...I want to see a review and photos. My next HCC trip is Stowe for New Year Week.


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## vineyarder (Oct 21, 2007)

> I have a friend who rents a month in October in a $100,000 oceanfront 3 bed room 2 bath condo with indoor and outdoor plumbing at Orange Beach Alabama for $1400 for the whole month.



OMG!!!  Orange Beach Alabama!!!  Isn't that where people from Cashiers NC go on their honeymoon?  Wow - that is definately a bargain at half the price!!  I doubt that Exclusive Resorts, PE, HCC  or any of the Destination Clubs will ever manage to get a place there!!  Oh well... I guess I'll drown my sorrows in Tucsany, Cabo, Turks & Caicos, Abaco, Punta Cana, Cap Cana and all those other second tier desinations while the aristocracy are partying away in Orange Rind Alabama...  

Seriously, though, I had assumed that this post from from "tombo" was a satirical post from Steamboat Bill, until I saw his response... (? TOMBO = The Only Moderator Boca Ordered?)... But maybe he responded in order to make us THINK that it WASN'T him being funny....


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## Steamboat Bill (Oct 22, 2007)

vineyarder said:


> Seriously, though, I had assumed that this post from from "tombo" was a satirical post from Steamboat Bill, until I saw his response... (? TOMBO = The Only Moderator Boca Ordered?)... But maybe he responded in order to make us THINK that it WASN'T him being funny....



That is pretty funny...I am definitely NOT tombo.

I find some of his posts 100% incorrect and glad other TUGers agree with me on this.

I have no problems with people who post that they would never join a DC or buy a $15,000 timeshare (in their own personal opinion), but I get upset when they post false assumptions as facts.


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