# New tactic to get us to go to presentation... no same day sales



## tperez (May 10, 2017)

We're staying up at Lake Tahoe for a quick two night weekday getaway and so have no interest in going to an update aka sales presentation.  Upon check-in we heard the usual about a "new" program that would allow us not to pay maintenance fees, about how big things are happening with Apollo being the new owners, etc.  Heard it all before.

But, after we continued to say no to an update, the salesperson then said that with Apollo's new ownership, DRI no longer does same day sales to current owners so we wouldn't have to worry about a sales pitch at the "owner's update".  Never heard this one before.  He said that we would get a price list that would be good for so many months, but no same day sales.  Also that it would only last 55 min, or maybe a little bit longer depending upon our questions!

My guess is that this would be like all our recent "owner's updates" where we go to a 3 hour marathon and get a ridiculous price sheet, something like you have to buy 10,000 points at $8 per point.  Then, someone from the back office finds an error which would allow us to buy about 5000 points at $3.50 each if we acted immediately.

Anyway, I was just curious if anyone else has heard of this 'no same day sales'.

We really like the DRI properties and they are great value for us retired folks who can get away on short notice for cheap rooms.  But these sales pitches are the worst!


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## sts1732 (May 10, 2017)

Interesting............wonder if his boss knew of the new time line......  I'll be willing to bet if you wore your "official" TUG Tshirt it wouldn't last 55 min. Let alone them even mentioning it.


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## pedro47 (May 10, 2017)

Does anyone at DRI realize they are losing sales with these unethical sales practices.


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## TUGBrian (May 12, 2017)

I dont think anyone in the industry cares much at this point for anything other than results....its a terribly cut throat profession with TONS of turnover and once you learn you are more successful in stretching the truth (or hiding it by omission)...and thus get rewarded with a higher salary for doing so...you arent going to stop doing it even if you know full well its against the rules.


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## T_R_Oglodyte (May 12, 2017)

The last two owners updates we have been to (at Pointe at Poipu) were no sales pressure whatsoever.  We were done in 55 minutes.  The person we met with said he was not being paid on commission.  He did lay out the features associated with different levels of ownership, and what the pricing would be if we were interested.  When we said we weren't interested that was the extent of the pressure.  He did check for any of the unexpired offers that might be in our account, and informed us of what those were.  Again, simply matter of fact.  None of "what an awesome deal.  I can't believe that wasn't canceled out ..." stuff that you often hear. 

All of that took about 20 minutes. The rest of the time was devoted to how to use points for different services.


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## artringwald (May 12, 2017)

T_R_Oglodyte said:


> The last two owners updates we have been to (at Pointe at Poipu) were no sales pressure whatsoever.  We were done in 55 minutes.  The person we met with said he was not being paid on commission.  He did lay out the features associated with different levels of ownership, and what the pricing would be if we were interested.  When we said we weren't interested that was the extent of the pressure.  He did check for any of the unexpired offers that might be in our account, and informed us of what those were.  Again, simply matter of fact.  None of "what an awesome deal.  I can't believe that wasn't canceled out ..." stuff that you often hear.
> 
> All of that took about 20 minutes. The rest of the time was devoted to how to use points for different services.



If I hear a dozen more reports similar to yours at the Point at Poipu, maybe I'll be able to convince DW to attend one.


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## wilma (May 13, 2017)

The last presentation (3 years ago) we went to at the pointe at poipu had the sales guy telling my spouse & me that we weren't smart enough to understand what a great deal he was offering! He then closed the meeting by telling us we were banned from future presentations because we did not buy anything. Now when we check in and they try to sign us up, we tell them we were banned from sales presentations.


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## dougp26364 (May 13, 2017)

I wonder if Apollo is trying to maintain the legal appearance of a timeshare sales/ management company while quietly reacquiring enough inventory into the trust that they can begin the process of breaking apart and selling off the assets at a profit? Isn't that what assets management companies do? Flip assets for profit. 

DRI has a number of quality resorts in various locations. I could see other timeshare companies being interested I specific resorts but not interest in the entirety of DRI. It would be easier to sell off the company in pieces vs the entire structure. 

Two locations that come to mind are Las Vegas and Sedona. Polo Towers has a good strip front location that, in the correct economic environment, could bring in big dollars. Sedona is all but controlled by DRI and I could see other companies interested if a few of the resorts there.

Or maybe Apollo is just a genius and the rest of the industry are idiots when it comes to selling timeshares?


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## nuwermj (May 13, 2017)

Regrading Doug's questions: Diamond has sold resorts out of the European Collection (White Sands Country Club, Benal Beach, Garden Lago) and has "for sale" signs on Broome Park (6 million Pounds), and the two resorts in Normandy, France (which nobody wants). DRI also sold a large chunk of the PV Collection  inventory at The Carriage House in Las Vegas.

Nevertheless, I am skeptical that Apollo is planning a company wide asset stripping path.

Here are some numbers to get a sense of the magnitudes involved with selling-off assets. The Hawaii Collection owns about 5,700 weeks at Polo Towers Villas and the US Collection owns about 7,900 weeks at Polo Towers Suites. Timeshare inventory costs about $7,700 per week ("just-in-time" units), so Polo Towers' inventory could sell for about $105 million. Apollo has $2.2 billion invested in DRI so they would need to sell about 21 resorts like PT just to break even.

Moreover, although Diamond has the power to withdraw inventory from the collections, it would need to replace the weeks withdrawn with intervals elsewhere.

An alternative strategy would be to improve DRI's image among Wall Street bankers and sell the company whole. In September 2015, many Wall Street analysts expected DRI, Inc. to be worth $45 per share or $3.2 billion. This valuation was based on sales, revenue, and cash flow. If Apollo can improve DRI's image and, within three or four years, float a public offering at $40 or $45 per share, I think they will get a better return compared to the return they can get by stripping assets. The Great Wolf Resorts model is an example of Apollo following this strategy.

On the other hand if DRI's new CEO fails to improve the image, then the Caesars model of asset stripping is an example to watch for. See this article: http://fortune.com/2015/06/05/caesars-losing-las-vegas/


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## RLS50 (May 13, 2017)

I am very curious to see what Apollo does.   As Doug says, there are areas where DRI has some maybe valuable assets or collections of properties.   Doug mentioned Las Vegas and Sedona.  But I also think DRI has a monopoly type position in Virginia Beach (thanks to their purchase of the ex-Gold Key properties) that has value.   On a personal level, I would be thrilled if an Apollo flipped the Virginia Beach assets to a company like Marriott.

But I also see a lot of redundancy in the majority of DRI resorts / assets with the other big companies capable of buying them or the pieces (i.e. Marriott, Wyndham, etc).   So in that respect I am guessing Nuwermj is probably closer to the Apollo plan, at least for now.   But as he also correctly stated, Apollo is looking to profit from their initial investment, and I am guessing that goes well beyond the annual interest they get on the $1B in debt DRI is now carrying on the books, and eventually Apollo will do whatever they need to do in order to make that happen.

I have mentioned this before, but I do personally suspect DRI is guilty of getting way out in front of their skis over the past 5-7 years.  In my opinion it appears like the senior management inside DRI was determined to get a buy out / cash out on their stock options and that may have been the dominant element driving their strategy.   And no doubt this contributed to what now amounts to their near industry high fees and aggressive annual MF increases during that 5-7 year time period.  The increases DRI passed on to their customers has far exceeded annual rates of inflation or wage growth.

I don't care what company you are or what you are selling, unless you have a unique product or widget nobody else has, you can only do that for so long before it stops working.   Eventually you will drive a larger segment of your customer base out of your product (or into default) faster than you can add new customers to replace them.  Even more dangerous, typically companies that follow this type of "growth" model find themselves getting so increasingly desperate for new growth that they begin accepting new customers with lower and lower credit worthiness to keep the music playing.  Is that why DRI was reported by some sources to have the highest loan default rates in the timeshare industry just before going private?

We'll see.


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## dougp26364 (May 14, 2017)

Keep in mind they may not have to sell the assists to another timeshare company. I suspect if Apollo collects and holds enough inventory, somewhere in the fine print is a clause allowing them to "retire or remove" a property from a collection. Even if there is no such clause there always seems to be one that, with a vote, any and all rules can be changed. When the management company holds enough of a stake in the trust to change the rules or control the vote, then owners are simply along for the ride. You just have had to hope you like where the company is going.

It's one of the reasons I kept my deeds instead of handing them over for a trust interest. If for no other reason I had a vested interest in a single property and, if the trust removed that property, adaquet compensation would likely need to be provided. Granted there'd probably try to get an owner to accept a deed at another property or a trust interest but, I felt I'd still have a small amount of legal leverage as to what would be acceptable compensation.

I still have my old Polo Towers documents. I seem to recall there was a project termination clause that spelled out my rights if/when the timeshare was dissolved. I know there was a clause concerning the right of way of the view towards the strip stating nothing could be built in front of Polo Towers obstructing the view above 4 stories UNLESS it was bought out, and if the easement concerning the view was bought out, it spelled out the compensation that was to be paid to owners per interval owned.

Why do I recall that provision? Because at one time the Hawaiian Market Place was Polo Plaza and there was a deal on the table to buy that land plus all the land up to the corner of Harmon ave. The plan was to wipe out Polo Plaza, Travel Lodge and the Harley Davidson Cafe and build an Elvis themed casino and hotel on that parcel. Somewhere I had read that there was an agreement to buy out the easement that Polo Towers held involving the height restriction on anything built on the Polo Plaza property.

I was madder than an old wet hen when I went to my original contracts and found out that could be done. So, while it might be improbable, I can imagine that if a trust hold enough interests to amount to every interval in a property, they could essentially remove that property along with those intervals now owned by Apollo and pocket any profits. Own enough and I would imagine Apollo could dissolve the entire trust and pay off the remaining owners with whatever is in the fine print of the contracts. Where it would get sticky is with the owners who have held onto their deeds. Even then I'm relatively certain there's a project termination clause that would allow the timeshare to be dissolved and spells out the compensation, if any, owed to the remaining deeded owners.


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## youppi (May 14, 2017)

Virginia Beach is an interesting destination for less than 6 months per year and most of those weeks are already sold. That's the biggest problem for DRI. Trying to convince people who own peak season to put money on the table again to have the same thing an d a little more. So, I don't know if Marriott's will be willing to spend a lot of money to face the same problem and to add a tons of low season in Virginia Beach in their network and have to put a lot of money to bring those resorts at the Marriott's level. I think that Marriott's prefers to convert some portion of their hotel to TS and have all the 52 weeks available for their members.

Embarc members have now access to Palazzo Catalani, Royal Regency and Club Mougins.
Is it 3 resorts that they can book like any other affiliated resort or DRI have move some weeks in the Embarc Collection to increase the number of Embarc points they own to have more control on Embarc Collection?
Or are DRI is pumping some resorts in the Embarc Collection to move out some original Embarc resorts later to another Collection or to sell them (points in the trust must be guaranteed by a deeded week but probably not by the same deeded week purchased by the member) ?
If they can do that then DRI have a lot of crap resorts that they come with all their acquisition that they can move to Embarc Collection to swap resorts later and force Embarc members to buy in THE Club if they want to access what they own today.


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## cd5 (May 28, 2017)

youppi said:


> Virginia Beach is an interesting destination for less than 6 months per year and most of those weeks are already sold. That's the biggest problem for DRI. Trying to convince people who own peak season to put money on the table again to have the same thing an d a little more. So, I don't know if Marriott's will be willing to spend a lot of money to face the same problem and to add a tons of low season in Virginia Beach in their network and have to put a lot of money to bring those resorts at the Marriott's level. I think that Marriott's prefers to convert some portion of their hotel to TS and have all the 52 weeks available for their members.
> 
> Embarc members have now access to Palazzo Catalani, Royal Regency and Club Mougins.
> Is it 3 resorts that they can book like any other affiliated resort or DRI have move some weeks in the Embarc Collection to increase the number of Embarc points they own to have more control on Embarc Collection?
> ...



DRI have moved some of their inventory at the 3 European clubs into Embarc (as part of the Embarc collection). The points have yet to be transfered into the trust although they have confirmed that this is what will happen and that the process has been started. This is obviously to increase the number of Embarc points they own since in April they were at approx. 160,000 points out of the 4,400,000 total points in Embarc. We have no deeded weeks. Embarc is completely "point-based" except for a very few "Advantage" weeks in Zihuatanejo (the Villas).


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## youppi (May 28, 2017)

cd5 said:


> DRI have moved some of their inventory at the 3 European clubs into Embarc (as part of the Embarc collection). The points have yet to be transfered into the trust although they have confirmed that this is what will happen and that the process has been started. This is obviously to increase the number of Embarc points they own since in April they were at approx. 160,000 points out of the 4,400,000 total points in Embarc. We have no deeded weeks. Embarc is completely "point-based" except for a very few "Advantage" weeks in Zihuatanejo (the Villas).


We had a discussion about this on our Facebook group. The 3 European resorts come from DRI inventory (rental pool) and not from the European Collection (European Collection didn't lose any units interval as per DRI).

About increasing Embarc points that was my theory: they will add more inventory in Embarc to increase the number of Embarc point to sell  and to increase their % of ownership they have in Embarc to control it because their position was low (Embarc was almost sold out). 

What I think also, is if they move enough inventory in Embarc to cover members points, they will be able to move out some Embarc units interval for renting them or move them to others Collections.


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## pedro47 (May 28, 2017)

T_R_Oglodyte said:


> The last two owners updates we have been to (at Pointe at Poipu) were no sales pressure whatsoever.  We were done in 55 minutes.  The person we met with said he was not being paid on commission.  He did lay out the features associated with different levels of ownership, and what the pricing would be if we were interested.  When we said we weren't interested that was the extent of the pressure.  He did check for any of the unexpired offers that might be in our account, and informed us of what those were.  Again, simply matter of fact.  None of "what an awesome deal.  I can't believe that wasn't canceled out ..." stuff that you often hear.
> 
> All of that took about 20 minutes. The rest of the time was devoted to how to use points for different services.



All DRI timeshare salespersons are paid by commission. They are independent contractors.


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## T_R_Oglodyte (May 28, 2017)

pedro47 said:


> All DRI timeshare salespersons are paid by commission. They are independent contractors.


So maybe the "owners update" rep we met with wasn't lying when he said he wasn't part of sales.  He certainly didn't act likes someone whose salary was based on making sales.


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## JohnPaul (May 31, 2017)

nuwermj said:


> DRI also sold a large chunk of the PV Collection  inventory at The Carriage House in Las Vegas.



We own in Vacation Internationale who bought the inventory at The Carriage House.  Since so many people want to go to Las Vegas it seems to have been a win for VI even if Las Vegas isn't at the top of my list.

I am wondering what you can tell me about The Carriage House ownership/management structure.  What is/was "The PV Collection". Is DRI doing the management?  Are the non-VI inventory made up of individual owners or something else?

Just had a brief stay there and it seemed more like an independent resort.

Thanks for any information you can provide.


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## nuwermj (Jun 1, 2017)

PVC = Premiere Vacation Collection. It is one of Diamond's points based trust funds. Originally the ILX company purchased 2,241 weeks at the Carriage House, and held the intervals in a trust fund for its members. In 2011, Diamond purchased ILX. As far as I know, Diamond does not have the management contract at this resort. Diamond members do not have individual deeds. 

Here are the two announcements posted on the VI website:
<quote>
VI [Vacation Internationale] Announces Trade for Additional Las Vegas Resort Inventory

The VIOA Board has approved an inventory swap with Diamond Resorts by which VI will gain additional weeks equating to more than 25 units at VI’s Carriage House in Las Vegas, NV in exchange for VI’s inventory at the Villas de Santa Fe, NM.

After reviewing the owner occupancy levels, operating cost, rental income and exchange company value of both Villas de Santa Fe and Carriage House, and the requirements of the VI Trust Agreement, the Board approved the transaction. The trade will close in January 2015.

If you currently have a reservation at Santa Fe for 2015 your reservation will be honored.

VI has negotiated an exchange agreement with Diamond, so that Villas de Santa Fe condominiums will be available to VI Owners on the VI Instant Exchange program starting in 2016.

*VI Inventory Trade*

Included in the VIOA Board approved inventory swap for additional weeks at VI’s Carriage House in Las Vegas, NV will be an exchange for most of VI’s inventory at Tahoe Beach and Ski, S Lake Tahoe, CA.

As with the Villas de Santa Fe evaluation, the VIOA Board reviewed the Tahoe Beach and Ski owner occupancy levels, operating cost, rental income and exchange company value, plus the requirements of the VI Trust Agreement before approving the transaction. The Tahoe Beach and Ski trade was announced separately due to legal filings that needed to be recorded and approved. All files are now in order and the agreement is final. Current reservations at Tahoe Beach and Ski for 2015 will be honored.

VI members have two additional options in the VI Program for vacationing in Lake Tahoe, The Lodge at Lake Tahoe and Kingsbury of Tahoe. Several other Tahoe resorts are available for VI members on the VI Instant Exchange program.
</end quote>


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