# David Palmer is out as CEO



## nuwermj (Nov 28, 2016)

David Palmer is out as CEO, Matthew Avril (from Starwood) will be the Chief Executive Officer


http://www.businesswire.com/news/ho...s-International-Announces-Matthew-Avril-Chief


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## pedro47 (Nov 28, 2016)

Change is good.


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## Spartans (Nov 28, 2016)

Hope that's good news for all the members.


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## RLS50 (Nov 28, 2016)

nuwermj said:


> David Palmer is out as CEO, Matthew Avril (from Starwood) will be the Chief Executive Officer
> 
> 
> http://www.businesswire.com/news/ho...s-International-Announces-Matthew-Avril-Chief


What do you think on this?   I am curious to hear your take.

Was this just part of the natural progression where these guys were always going to ride off into the sunset with their tens of millions from the sale to Apollo?   Or did Apollo believe changes needed to be made when they made the purchase and in order to shake things up they see the removal of Cloobeck and Palmer and bringing in new blood and fresh ideas as important steps in that direction?

I will admit that I am at least optimistic someone with a background from Starwood / Vistana is coming on board.  

My experience with DRI so far is that while I have came into contact with a number of individuals inside the company that have been nice or helpful, DRI's overall processes and systems have seemed outdated and / or inefficient compared to my average experiences with Starwood / Marriott.  Requests that take Starwood / Marriott, (or even took Gold Key) a few minutes or few hours to process, frequently seem to take much longer inside DRI with their labyrinth of department silos and forms and supervisors that frequently need to get involved when anything goes wrong.


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## nuwermj (Nov 28, 2016)

RLS50 said:


> Was this just part of the natural progression where these guys were always going to ride off into the sunset with their tens of millions from the sale to Apollo?   Or did Apollo believe changes needed to be made when they made the purchase and in order to shake things up they see the removal of Cloobeck and Palmer and bringing in new blood and fresh ideas as important steps in that direction?



I guess I would lean more to the second hypothesis, than the first one. This "retirement" is, it seems to me, a huge embarrassment for David Palmer. In October 2015, two hedge funds released an open letter to Palmer and Company. Many Wall Street money managers had lost confidence in Palmer's growth strategy. The company was performing exceptionally well, generating more cash than any other timeshare company. Yet the company was, as noted in the FrontFour Capital and ADW Capital open letter, "materially undervalue." With little confidence in Palmer's ability to improve the company's valuations, Cloobeck and Guggenheim cashed out. Palmer made money, they always do, but it is, nevertheless, a huge embarrassment for him and his capital light strategy. It seems that his grand vision for the company has been deemed a failure. The man with the "new way" is out; his replacement is a industry stalwart.



RLS50 said:


> I will admit that I am at least optimistic someone with a background from Starwood / Vistana is coming on board.



I agree. I too am hopeful that something positive will come with the new management.


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## dwojo (Nov 29, 2016)

I am cautiously optimistic. Mr Palmer did nothing to make me feel good about DRI. Their customer service regressed from the direction Mr Cloobeck had them going. Hopefully they will right the ship now.


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## T_R_Oglodyte (Nov 29, 2016)

I'm not optimistic at all.  

Here's the way I see things.  Decision making is being driven by investment funds, who are not invested in long-term value generation.  Palmer was ousted because those he didn't "unlock value", so that they could cash out at a profit.  Ergo, Avril's marching orders are to increase the marketplace valuation, within an acceptable time frame, so that they can cash out. 

Since things such as owner satisfaction initiatives don't contribute to the bottom line in the short term, I see little motivation for anything in that regard except as bandages.  I think the funds are expecting Avril to use his knowledge of the industry to identify ways that to reduce costs and increase revenues to pretty up the P&L statement, and to interface with the broader investment community to convince them that the company is undervalued. I don't see where taking care of owners contributes in any significant way to what I suspect are Avril's marching orders.


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## RLS50 (Nov 29, 2016)

T_R_Oglodyte said:


> I'm not optimistic at all.
> 
> Here's the way I see things.  Decision making is being driven by investment funds, who are not invested in long-term value generation.  Palmer was ousted because those he didn't "unlock value", so that they could cash out at a profit.  Ergo, Avril's marching orders are to increase the marketplace valuation, within an acceptable time frame, so that they can cash out.
> 
> Since things such as owner satisfaction initiatives don't contribute to the bottom line in the short term, I see little motivation for anything in that regard except as bandages.  I think the funds are expecting Avril to use his knowledge of the industry to identify ways that to reduce costs and increase revenues to pretty up the P&L statement, and to interface with the broader investment community to convince them that the company is undervalued. I don't see where taking care of owners contributes in any significant way to what I suspect are Avril's marching orders.


That is a very interesting take.   There are obviously no guarantees this turns out better for owners, and although I have been a DRI owner for only a short period of time (not by choice), unfortunately I have already developed a distrust of them doing anything that would ever benefit me as an owner. 

But I do have a couple of questions for you.

When you say "so that they can cash out"...who is "they" in your mind?   Those investment funds got $30.25 for their shares and now that the deal has closed DRI is a private company.   So I don't think DRI answers to or needs to worry about those investment funds anymore?    Am I misunderstanding something about the deal?    However I do agree that DRI does now report to Apollo mgmt.    So "they" could be Apollo, who wants to improve DRI's performance so they can either increase profits or package them for resale.   So from that respect I can see your suggestion about decisions driven largely by short term profit motivation.

But when they hired a guy with 20+ years at Starwood wouldn't they assume he would / could want to incorporate many of the same processes and philosophies used to build that intrinsic value in the Starwood brand?    Starwood was successful enough to attract offers from China and Marriott for the hotel side and Vistana on the timeshare side.   As a Westin owner, I can say their properties on the timeshare side were/are mostly outstanding.   Better than DRI in my opinion.

I am not trying to talk myself into being positive.  As I stated I am not a big fan of DRI so far and have found their processes to be antiquated and inefficient compared to the other name brand timeshare companies we own and deal with. 

Since DRI did feel to me like a company that operated inside a hermetically sealed dome for too long with too many key decision makers who seemed unaware or uninterested that they were well behind or lacking compared to other major timeshare companies, I am very curious to see the impact of this new hire.   Assuming of course there is an impact that is noticeable.  

But if DRI started to become more like Starwood was, I would probably consider that a positive development.


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## Ty1on (Nov 30, 2016)

I think he means Apollo.  They aren't a hospitality company, they invest in assets with the intention of realizing a gain in the short-ish term.  I think Trog has it dead on.  

If Avril's charge is to turn DRI into a Starwood-like organization, and he is able to do it, then he's the one that should be tackling the national debt.  I honestly think his agenda will be to brush off the dust, line it with lace, and put it in a position where Apollo can flip it.


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## RLS50 (Nov 30, 2016)

To be clear, I am not disagreeing per se with Trog's comments.

What I am saying is that we do have some history to draw from here in respect to past Apollo acquisitions in the space or similar sectors (Norwegian, Great Wolf Lodge, etc).  That Apollo history suggests there are multiple possible outcomes.  

Apollo could flip it relatively quickly, or they could keep it under their umbrella for awhile with the belief they can transform the company.  In that scenario maybe they even want to take it public again someday under another brand name.  

For owners I think it is too early to assume it will only be negative or only be positive. For example if Apollo eventually flipped this to MVCI or Vistana that would be a more positive outcome (for owner) than remaining under the old legacy DRI management in my view.  On the contrary there are also potential future buyers out there that may not be as comforting if you are an owner.

For now, since I believe Starwood was a superior run company compared to DRI, with better and more efficient internal owner support processes and better managed properties overall, I see this hire as an upgrade at the CEO level.  JMO.

I appreciate the feedback and different perspectives.


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## T_R_Oglodyte (Nov 30, 2016)

As far I can tell, Apollo didn't take DRI over because they thought it was poorly run and owners were dissatisfied.  They took it over because they thought it was undervalued by the investment community.  They will pretty it up for a few years while they hold it privately, then cash out - most likely be bringing it public again via an IPO.  

That's standard MO for private investment firms. 

Any efforts to improve member/owner satisfaction will take place only to the extent that is needed to buff up the image for the cashout - not as part of any long-range plan.  

DRI functioned well when Cloobeck was in charge because Cloobeck was interested in building a brand and valued customer service because that was part of the goal.  Cloobeck stepped back, and the financiers have taken control.  And the perspective has totally changed.

******

A similar pattern happened with a previous employer of mine.  I joined the company when they were 200 people, and became a principal/shareholder shortly after.  When I left 10 years later we were close to 2000 people.  The founding partners of the company were all involved and focused on long-term value.  A few years after I left, and the founding partners started retiring, they needed to obtain some long-term financing, and had to bring in equity partners.  The rest, as they say, is history.  The company culture changed entirely.  I continue to have contact with senior people in the company, and it clearly is not the same place it was when I was there. Nor is it now a firm I would ever consider working for.


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## RLS50 (Dec 3, 2016)

T_R_Oglodyte said:


> DRI functioned well when Cloobeck was in charge because Cloobeck was interested in building a brand and valued customer service because that was part of the goal.  Cloobeck stepped back, and the financiers have taken control.  And the perspective has totally changed.


I think your statement above really encapsulates the disconnect I feel sometimes when I hear longtime DRI owners talk about their ownership vs newer DRI owners like myself (who became DRI owners by acquisition).  I have no personal experience with Cloobeck or how he ran the company.   My only experience with DRI is under the recent Palmer model.

And without going into a long explanation, I personally wonder if DRI internally was under some pressure to sell themselves to protect their stock options?   I personally question the long term sustainability of the growth and sales model they were touting to Wall St.  There were some other murmurings / comments from various places in the last 12 months that while DRI’s sales and revenue growth was impressive on paper, the quality of that growth and sustainability of it was maybe not as strong and stable as it may have looked.

When I review the company history over the last 5 or 6 years I see a company that looks like it was mostly committed to jamming their owners everywhere hard with aggressive annual MF increases that have bordered on usurious while providing owner services that have reduced in quality, are highly inefficient, or flat out broken.

Cloobeck may very well have started with the idea / concept that he wanted to build a quality brand centered around owner loyalty.   But at the end, before the Apollo purchase, DRI felt and acted like a company (IMO) whose primary mission was to try and impress Wall St with revenue growth at the expense of their customers and longer term viability.  Dealing with them made me feel like the company CEO was actually Gordon Gekko and the company motto was “screw the brand concept, how much can we squeeze these lemmings for to get our PPS up.”   Once could argue this ended up working out for senior management since they all walked away incredibly wealthy after the Apollo deal.

I do agree that much remains to be determined on how this Apollo deal will impact owners…for better or worse.  But since I believe the DRI sales and growth model was not sustainable, and had maybe become one of the worst models in the timeshare industry (for actual owners), I was not unhappy to see change. 

Again, this is all just my opinion obviously.

Thanks for sharing your perspective and your past experience.   I can relate based on my own work experiences.


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## T_R_Oglodyte (Dec 3, 2016)

During the early years, after Diamond acquired Sunterra, Diamond was privately held.  At some point they went public, and that was the beginning of the end.


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## nuwermj (Dec 4, 2016)

Cloobeck's company acquired Sunterra in April 2007 and Palmer became the company's CFO at that time. Before this, Palmer had no involvement in the timeshare industry that I can verify. He became the President of DRI, Inc. in September 2010. Cloobeck remained the CEO. Palmer was appointed CEO on January 1, 2013, Cloobeck remained Chairmen of the Board. Diamond's initial public offering (IPO) was made July 24, 2013.

I suspect that Cloobeck stepping down as CEO and the IPO are connected, but I have no evidence to support that claim.


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## bradfordHI (Dec 9, 2016)

nuwermj said:


> David Palmer is out as CEO, Matthew Avril (from Starwood) will be the Chief Executive Officer
> 
> 
> http://www.businesswire.com/news/ho...s-International-Announces-Matthew-Avril-Chief



Wow that's great. He is smart. He is a growth guy. Will make buying more properties a big priority. Great hire.


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## karibkeith (Dec 28, 2016)

Acquisitions
I was disappointed that DRI let an acquisition of Blue Green slip through their fingers and that they watched Shell resorts bought up by another company.
Let's hope the new guy is more aggressive.
While on the subject of acquisitions: what is the story with Club Intrawest.  Instead of the resorts being integrated into DRI, they are not available to DRI members and the named is changed to Embarc which appears to operate as a separate entity. A real bummer as this group of resorts has some very desirable properties.


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## T_R_Oglodyte (Dec 29, 2016)

karibkeith said:


> Acquisitions
> I was disappointed that DRI let an acquisition of Blue Green slip through their fingers and that they watched Shell resorts bought up by another company.
> Let's hope the new guy is more aggressive.


They didn't let it slip through their fingers.  They were ready to close the deal when the credit crunch hit and their lenders for the acquisition terminated financing.  They actually negotiated a six-month extension to the agreement to give more time to line up new financing, but the credit markets had totally collapsed.  

They were also going to acquire Raintree, but that got scuttled as well. 


karibkeith said:


> While on the subject of acquisitions: what is the story with Club Intrawest.  Instead of the resorts being integrated into DRI, they are not available to DRI members and the named is changed to Embarc which appears to operate as a separate entity. A real bummer as this group of resorts has some very desirable properties.


They are dealing with Intrawest the same way they do with all of their acquistions.  Basically, they set up the existing acquisition as a new "Collection", which operates with all of the rules of the old system.  That way, all of the existing owners have all of the rights and privileges that were granted to them when they made those purchases.  That's, or some similar, approach is necessary since Diamond can't unilaterally changes the terms of what the existing owners bought. 

Inventory from Club Intrawest is not available to DRI Club members because the Club only has rights to units that are owned by Club Members.  Since, at this point, there are virtually no Intrawest owners who are Club members, the Club has almost no Intrawest inventory.

DRI sales will certainly be pitching Intrawest owners to join the Club.  To the extent that happens, more Intrawest Inventory will appear in the Club.  

This is the same pattern that exists with all DRI Collections.


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## DanZale2000 (Dec 29, 2016)

T_R_Oglodyte said:


> They are dealing with Intrawest the same way they do with all of their acquistions.



When Diamond's management signed the acquisitions papers in November 2015 they were planning to deal with Club Intrawest the same way they dealt with their other acquisitions. But, by January 2016, they had run into much more push-back from Club Intrawest members than they had expected. The Club Intrawest (now Embarc) members are very knowledgeable and, above all, they are very well organized.  

In the case of all the other acquisitions, Diamond stopped selling that product (Monarch points, PVC points, deeds) and offered the acquired members an opportunity to buy into The Club. Diamond is currently doing that with Gold Key owners. But nothing similar is happening with Embarc. Instead Diamond is selling Embarc points and they have introduced a loyalty benefit program which encourages incremental sales similar to the program offered by The Club. 

In early 2016 I was fully expecting Diamond to follow the same pattern that exists with all DRI Collections. In fact David Palmer told Wall Street analysts in an earning call that that was the plan. But by spring 2016 it was becoming clear that Diamond's plans were changing and the past patterns would no longer apply for Embarc.


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## nuwermj (Dec 29, 2016)

karibkeith said:


> I was disappointed that DRI let an acquisition of Blue Green slip through their fingers



There is speculation that Bluegreen is, or soon will be, for sale. Since 2013 Bluegreen has been owned by BFC Financial, but the company is tremendously undervalued and in need of capital. BFC's market capitalization is only about $400 million, while estimates indicate that Bluegreen alone is worth between $600 and $800 million. Many analysts believe that only a sale of Bluegreen will unlock the substantial value in BFC.

And, on Diamond's end, Avril did acknowledge in the press release the company's tremendous growth "through strategic M&A opportunities" and suggested that he would continue to focus on these "strategic goals and initiatives." Such an acquisition would certainly help to buff up Diamond's image for a cashout of it's own. So, who knows, maybe the third time will be the charm.


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## lovesexy (Jan 4, 2017)

I just left the Diamond Apollo presentation...voodoo math is a understatement...the sales person was nice but she must have thought that I would not catch her with her misleading sales pitch. I am at Mystic Dunes on a sampler and I own IHG vacation club and Sheraton Vistana. She went into this spill that I would save money by depositing my two timeshare points or weeks into the diamond system to get more points that I can use on my total entertainment. She of course did not mentionthe yearly maintenance fee plus the cost of the mortgage...which for me is an additional mortgage. . .plus every theme park ticket sold on Diamond properties is gate price or higher...plus I caught her in a very big lie....she told me thatDiamond Points do not expire ever and are the same as cash.. I knew this was not true and forced her to admit that Diamond points expire every fouryears max and that the trust is void even if paid off if my kids do not pay the maintenance and taxeswhich rise every year even after the mortgage is paid...I told her that she could not give me a unitfor free and that I was going to dump my Sheraton property before I decided to exchange my weeks for marriot points. I also told her that the only reason why I keep my IHG is because the IHG points accumutate as long as I have some activity and I figure I can always get to a holiday inn.


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## theo (Jan 4, 2017)

nuwermj said:


> There is speculation that Bluegreen is, or soon will be, for sale. Since 2013 Bluegreen has been owned by BFC Financial, but the company is tremendously undervalued and in need of capital. BFC's market capitalization is only about $400 million, while estimates indicate that Bluegreen alone is worth between $600 and $800 million. Many analysts believe that only a sale of Bluegreen will unlock the substantial value in BFC.
> 
> And, on Diamond's end, Avril did acknowledge in the press release the company's tremendous growth "through strategic M&A opportunities" and suggested that he would continue to focus on these "strategic goals and initiatives." Such an acquisition would certainly help to buff up Diamond's image for a cashout of it's own. So, who knows, maybe the third time will be the charm.



Interesting. During the last two years, BlueGreen has been actively buying up fixed weeks at a small independent facility in FL at which we own a few intervals. BG now apparently owns about 10% of the total inventory there --- enough to "influence" Board elections and decisions if they should ever opt to do so.

I won't pretend to know (or care) about the big corporate takeover picture, but from my narrow perspective I just *never* want to see the likes of DRI anywhere even remotely *near* our little independent timeshare property.


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## bradfordHI (Jan 5, 2017)

theo said:


> Interesting. During the last two years, BlueGreen has been actively buying up fixed weeks at a small independent facility in FL at which we own a few intervals. BG now apparently owns about 10% of the total inventory there --- more than enough to "influence" Board elections and decisions if they should opt to do so.
> 
> I won't pretend to know (or care) about the big picture, but from my narrow perspective I certainly don't *ever* want to see DRI anywhere *near* our little facility.



Bluegreen is in trouble. It was almost bought by DRI and will be soon. 

The thing they offered you is interesting. I did it once and it worked for me. It's a great resale and developer combo. I know what ur talking about. I do it. 

But it doesn't make sense in Orlando. 

Thanks for the info. But I agree blue green is near BK and will be bought by DRI very soon. It almost happened 3 years ago and it sucks but I've heard runours that it will happen this year. Blue is in trouble. I just sold all of my BG.


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## pedro47 (Jan 5, 2017)

How can DRI purchase Bluegreen?


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## theo (Jan 5, 2017)

bradfordHI said:


> Bluegreen is in trouble. It was almost bought by DRI and will be soon.
> 
> The thing they offered you is interesting. I did it once and it worked for me. It's a great resale and developer combo. I know what ur talking about. I do it.
> 
> ...



You've quoted my post, but I'm unclear what you're actually responding to. BG hasn't actually offered *us* anything (and we're not interested in selling our intervals anyhow, neither to BG nor to anyone else). BG has essentially bought up many non-performing, HOA-owned fixed weeks at our *independent* place (while not acquiring undesirable "floating" weeks with inherent booking restrictions), so the unexpected influx of BG dollars into our coffers is just fine with me.
If BG folded or bailed from our independent facility, those BG weeks would just go back to being non-performing (as they were before being acquired by BG).

We own nowhere near Orlando (it's several hours away), so I am unclear about that particular geographic reference. My primary intended point was simply that I hope never to see *any* DRI presence or influence at our particular resort at any time in the future --- I'm just not a fan. On the other hand, our own intervals are all deeded fixed weeks at a non-chain, independent property, so there is nothing any entity (whether BG or DRI or anyone else) can ever really do about that fact, except perhaps to arbitrarily boost maintenance fees upward if they acquired enough intervals and voting power to actually gain Board control.


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## nuwermj (Jan 6, 2017)

pedro47 said:


> How can DRI purchase Bluegreen?



Bluegreen's EBITDA (i.e. discretionary cash generated) was $143 million in 2015. Diamond paid 4 times EBITDA for Gold Key and for Club Intrawest. And they sold them-self for 5 times EBITDA. So something like $572 to $715 million is what would be needed. _If Apollo thinks an acquisition of Bluegreen will make DRI more attractive to a public offering_, then they could fund this with their deep pockets. They could use the leveraged buyout, that is, loan DRI $715 million for the purchase and use Bluegreen's $143 million cash to pay the interest. Apollo's loan would be paid off when DRI is sold (from the proceeds of that sale). 

Moreover, if the purchase of Bluegreen adds value to Diamond, then Diamond's capitalization would be higher and Apollo would make more money as the equity owner. This means Diamond would need to sell for more then $3 billion ($2.2+0.7) when it is taken public again.


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## bradfordHI (Jan 6, 2017)

theo said:


> You've quoted my post, but I'm unclear what you're actually responding to. BG hasn't actually offered *us* anything (and we're not interested in selling our intervals anyhow, neither to BG nor to anyone else). BG has essentially bought up many non-performing, HOA-owned fixed weeks at our *independent* place (while not acquiring undesirable "floating" weeks with inherent booking restrictions), so the unexpected influx of BG dollars into our coffers is just fine with me.
> If BG folded or bailed from our independent facility, those BG weeks would just go back to being non-performing (as they were before being acquired by BG).
> 
> We own nowhere near Orlando (it's several hours away), so I am unclear about that particular geographic reference. My primary intended point was simply that I hope never to see *any* DRI presence or influence at our particular resort at any time in the future --- I'm just not a fan. On the other hand, our own intervals are all deeded fixed weeks at a non-chain, independent property, so there is nothing any entity (whether BG or DRI or anyone else) can ever really do about that fact, except perhaps to arbitrarily boost maintenance fees upward if they acquired enough intervals and voting power to actually gain Board control.




Is there such thing as a floating week? I read my documents and from what I understand, wife is an attorney, she thinks it's the "club" that allows it to float.

 No real estate contract I have read said it's a floating week. It can't be sold as a floating week, in states where it is deeded real estate sold my licensed real estate agents. 

What's you opinion on that? Very curious and if you have any paperwork that says it's a floating week. 

I can't find one that is sold as a floating week. It says it can be allowed but not guaranteed. So it's really a fixed week. 

Thanks.


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## theo (Jan 6, 2017)

bradfordHI said:


> Is there such thing as a floating week? I read my documents and from what I understand, wife is an attorney, she thinks it's the "club" that allows it to float.
> 
> No real estate contract I have read said it's a floating week. It can't be sold as a floating week, in states where it is deeded real estate sold my licensed real estate agents.
> 
> ...



My comments were offered in the specific context of the *independent*  (i.e., not in any way DRI-associated) FL resort where we own several intervals, where *BlueGreen* (perhaps soon to be acquired by DRI) has been buying up fixed weeks. I further stated that BG was not acquiring "floating" week ownerships there.

There are indeed "floating" week ownerships at our (again, *independent*) timeshare property. Whether "floating" weeks even exist at all in DRI or in its' "Club", I frankly have absolutely no idea. Sorry if I inadvertently somehow created a point of potential confusion or misunderstanding.


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## bradfordHI (Feb 3, 2017)

Sorry. Just asking a question. You seemed knowledgeable that's all.


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