# DRI in the news again regarding their high pressure sales tactics



## TUGBrian (Jan 22, 2016)

http://www.nytimes.com/2016/01/24/b...using-hard-sell-to-push-time-shares.html?_r=0


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## artringwald (Jan 23, 2016)

Thanks for sharing the article. I thought the reporter did a great job conveying both sides of the story. Too bad she didn't mention how TUG has helped so many DRI owner's give back their ownership, and how TUG also helps sellers connect to buyers.


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## pedro47 (Jan 23, 2016)

artringwald said:


> Thanks for sharing the article. I thought the reporter did a great job conveying both sides of the story. Too bad she didn't mention how TUG has helped so many DRI owner's give back their ownership, and how TUG also helps sellers connect to buyers.



To the OP. I also thanks you for sharing this article. I also agreed that the comments about the reporter was very fair. The reporter gave both sides  a chance to explain what is going on. Now the court system will be the judge and jury.


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## MULTIZ321 (Jan 23, 2016)

TUGBrian said:


> http://www.nytimes.com/2016/01/24/b...using-hard-sell-to-push-time-shares.html?_r=0



Sorry Brian, didn't see your post before I also posted the link.



Richard


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## mjm1 (Jan 23, 2016)

Thanks for sharing. I agree that the reporter presented a balanced view of timeshares. It will be interesting to see if the consumer protection agency makes any changes around timeshare sales. Either way a consumer needs to be cautious. TUG is a great resource for people who want to research timeshares and decide if they are right for them.

As all of us on TUG know, it's an investment in a vacation lifestyle, not a financial investment. That said, some people have made it into a nice business.

Mike


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## artringwald (Jan 23, 2016)

Does anyone know if laws exist to prevent timeshare companies from overselling points? Do points have to match up with deeds? Even if that is regulated, a developer (such as DRI) could include many undesirable resorts in a collection with a small number of desirable ones. Buyers could feel betrayed if they buy points in the collection and then have a difficult time booking the places they really want to go. Is this a problem with other timeshare companies besides DRI?


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## jbercu (Jan 23, 2016)

artringwald said:


> Thanks for sharing the article. I thought the reporter did a great job conveying both sides of the story. Too bad she didn't mention how TUG has helped so many DRI owner's give back their ownership, and how TUG also helps sellers connect to buyers.



Tug has played an invaluable role in educating owners and timeshare Board members, as well as helping owners make informed decisions about their membership or ownership.  Unfortunately, many timeshare owners find this site after they were subjected to a hard sell presentation, and purchased.

I hope the article reaches future prospects, and encourages them to do more research and find TUG before the presentation.

Thanks Brian!


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## johnrsrq (Jan 23, 2016)

*I mentioned Grand beach's increase on this tug thread with pdf*

http://www.tugbbs.com/forums/showpost.php?p=1810653&postcount=8.

Last years preliminary budget was pleasant, not so this year. Aside from this years structural issues in the Grand Beach budget (to the tune of several million over a few years), the management fee renewal contracts soars over 214% . The local hoa indicated we've had a lower than market management fee for the last 6 years (guess that helped launch Diamond). In $ terms, the fee does go from $365,597 to $1,150,850. The lid (management) on the other costs looked reasonable. The local HOA for Grand Beach working with Diamond has done a great job


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## Michael1991 (Jan 23, 2016)

jbercu said:


> Unfortunately, many timeshare owners find this site after they were subjected to a hard sell presentation, and purchased.



European timeshare law requires a “cooling off” rescission period of 14 calendar days and prohibits any advance payments. 

Such a rule would help if it were required in the US.


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## tschwa2 (Jan 23, 2016)

johnrsrq said:


> http://www.tugbbs.com/forums/showpost.php?p=1810653&postcount=8.
> 
> Last years preliminary budget was pleasant, not so this year. Aside from this years structural issues in the Grand Beach budget (to the tune of several million over a few years), the management fee renewal contracts soars over 214% . The local hoa indicated we've had a lower than market management fee for the last 6 years (guess that helped launch Diamond). In $ terms, the fee does go from $365,597 to $1,150,850. The lid (management) on the other costs looked reasonable. The local HOA for Grand Beach working with Diamond has done a great job



That was 314% not 214%.  Typical management fees for Marriott and Starwood is 10% of the total budget. DRI's is typically 12%. It looks like your are now at 12.1% 

At Beachwoods, with Gold Key, the management fees were 8% of the total budget.  The reserves are ridiculously underfunded.  This year the first year that DRI took over, they didn't touch the reserves which are $23 per unit regardless of size from 1 br up to 3 br but they did make sure to increase the management fees from 8% to 12.7%


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## johnrsrq (Jan 23, 2016)

tschwa2 said:


> That was 314% not 214%.  Typical management fees for Marriott and Starwood is 10% of the total budget. DRI's is typically 12%. It looks like your are now at 12.1%
> 
> At Beachwoods, with Gold Key, the management fees were 8% of the total budget.  The reserves are ridiculously underfunded.  This year the first year that DRI took over, they didn't touch the reserves which are $23 per unit regardless of size from 1 br up to 3 br but they did make sure to increase the management fees from 8% to 12.7%



yes , the payment went up 314% but as a percentage of the prior yr, the increase represents a 214% sum. -1     785/365=214 

fortunately, it still works for me.


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## bjones9942 (Jan 23, 2016)

I almost choked when I saw one of my (non-DRI) places pictured on that article!  Newly elected board members at Lake Tahoe Beach & Ski gained their seats by convincing owners that DRI was about to snatch the resort up and take over (not out of the realm of possibilities, but probably won't happen for a few years).  Here I thought maybe the'd actually done it!  Good, well written article.


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## hvsteve1 (Jan 23, 2016)

Enjoyed the part about purchasers signing papers that say they don't rely on what was said verbally. Takes me back to my early days of timeshare sales pitches in the Poconos (some of the biggest crooks in the industry...no names) when the purchase session ended with a visit to a legal officer who had people sign an agreement that they recognized they were giving up their consumer rights. No kidding!


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## T_R_Oglodyte (Jan 23, 2016)

artringwald said:


> Does anyone know if laws exist to prevent timeshare companies from overselling points? Do points have to match up with deeds? Even if that is regulated, a developer (such as DRI) could include many undesirable resorts in a collection with a small number of desirable ones. Buyers could feel betrayed if they buy points in the collection and then have a difficult time booking the places they really want to go. Is this a problem with other timeshare companies besides DRI?



Within DRI points are directly connected to deeds - the deeds generate the points. That is distinctly from some clubs that have simply sold points without regard to balancing the two.  (Some Mexican timeshare operations come to mind.)

Worldmark is the outfit that I recall being the most notorious for ginning up points by building points in relatively low demand locales with lower construction costs (such as Iowa). So the new resorts they built were only partially full and almost available at reduced points requirements as last-minute options, while owners found it increasingly difficult to get into the most popular locations.


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## nuwermj (Jan 24, 2016)

T_R_Oglodyte said:


> Worldmark is the outfit that I recall being the most notorious for ginning up points by building points in relatively low demand locales with lower construction costs (such as Iowa). So the new resorts they built were only partially full and almost available at reduced points requirements as last-minute options, while owners found it increasingly difficult to get into the most popular locations.




Seems like DRI did about the same thing, just over a year ago, when it added three mainland resorts to the Hawaii Collection. The total number of points in the collection increased by 30% and potentially increased demand for weeks in the Hawaii resorts by a similar amount.


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## somerville (Jan 24, 2016)

*Contact Consumer Financial Protection Bureau*

The article says that DRI stock is down because the Consumer Financial Protection Bureau is considering regulations for timeshares.  I encourage everyone to contact the CFPB and express your support for consumer protection for timeshare sales and resort management.


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## csalter2 (Jan 24, 2016)

*Owners Helping Owners*

I am happy for all the support that TUG provides for owners.  I would also like to let DRI owners know that there was also input to the writer of this article from the Facebook group, Diamond Resorts International Members.  We are owners who help other owners get the most out of their timeshares.  We are not  connected to DRI in any way other than our ownership.  We now have over 5000 member from all over the globe.  We have increased our US presence on the site GREATLY and would welcome as many DRI owners as possible to come to our site to band together to share insights and perspectives on their DRI experiences.


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## 1Kflyerguy (Jan 24, 2016)

artringwald said:


> Does anyone know if laws exist to prevent timeshare companies from overselling points? Do points have to match up with deeds? Even if that is regulated, a developer (such as DRI) could include many undesirable resorts in a collection with a small number of desirable ones. Buyers could feel betrayed if they buy points in the collection and then have a difficult time booking the places they really want to go. Is this a problem with other timeshare companies besides DRI?




Not sure how all the programs work, but with HGVC there is a deed behind every ownership, you get a deeded week which equates to certain amount of points.  Not sure how you can validate the true points programs where you own  membership in a trust of points.


Overall i thought this was a great article,...


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## T_R_Oglodyte (Jan 25, 2016)

nuwermj said:


> T_R_Oglodyte said:
> 
> 
> > Within DRI points are directly connected to deeds - the deeds generate the points. That is distinctly from some clubs that have simply sold points without regard to balancing the two.  (Some Mexican timeshare operations come to mind.)
> ...


It comes down to a question of what the relative points assignments are.  If Hawaii weeks are higher demand and have higher point requirements then it balances out.  Worldmark didn't do that.  

FWIW - among the reasons why I kept my deed out of the trust when I jointed the Club was specifically so that I specifically retained my right to reserve any available unit for a week without regard to the number of points involved.  If DRI decides that to increase the points required to trade into Poipu, I'm protected. Plus I can reserve primo times like Christmas/New Years without paying a premium.


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## jbercu (Jan 25, 2016)

DRI replies to New York Times article.

http://yahoo.brand.edgar-online.com...id=908692&ppu=%2fdefault.aspx%3fcik%3d1566897


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## presley (Jan 25, 2016)

jbercu said:


> DRI replies to New York Times article.
> 
> http://yahoo.brand.edgar-online.com...id=908692&ppu=%2fdefault.aspx%3fcik%3d1566897



Actions speak louder than words. Saying that they don't tolerate sales lies isn't the same as going resort to resort and firing anyone who is doing it. Weak attempt at saving face.


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## nuwermj (Jan 25, 2016)

presley said:


> Actions speak louder than words. Saying that they don't tolerate sales lies isn't the same as going resort to resort and firing anyone who is doing it. Weak attempt at saving face.



I agree 100%. Here's what I wrote to the NYTimes author on Saturday:

Dear Ms. Morgenson 

Thank you for today's article on Diamond Resorts International. My wife  and I are DRI owns who had a very bad experience with the Diamond sales  staff in Las Vegas. 

I have a hard time believing that Diamond has a "zero tolerance for  anyone who goes off script," as you quote Mr. David Palmer. The claims  adjuster at my insurance company is monitored with a survey after each  contact he makes with a client and also at the conclusion of the claims  process. If his survey marks are too low, he's done. This is a great  incentive for the adjuster to be respectful and helpful. There's no  reason DRI sales can't do something similar. Moreover, Diamond knows  exactly which sales representative worked with which customer and they  have customer phone numbers and addresses. DRI sales could follow-up  with customers a week or so after the presentation. If they were  serious, that is. 

My bank (and numerous other customer service organization) record  conversations "for quality assurance purposes." The organization reviews  those tapes for accuracy and other quality indicators. The fact that DRI  sales division does nothing of the sort leads me to doubt the  seriousness of Mr. Palmer's claims. 

Diamond Resorts know full well how to improve quality. The company has a  very extensive quality monitoring and assurance program on the  hospitality side of their business. In fact, I think they are quit good  in the hospitality space. There is no reason they couldn't monitor their  sales staff with similar programs. If they were serious, that is. 

I am very grateful that you took the time to write this article. I have  no doubt that regulation is needed and I'm pleased that you raised this  possibility in today's piece.


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## jbercu (Jan 25, 2016)

presley said:


> Saying that they don't tolerate sales lies isn't the same as going resort to resort and firing anyone who is doing it.



They actually did not say that they do not tolerate sales lies.  They said  "Our company has a zero tolerance policy for any member of the sales team who does not follow protocol" and "We have in place a strict set of sales policies and practices aimed at protecting the consumer that are in-line with industry best practices."

Tahoe Beach and Ski Club deeded owners attending DRI sales presentations in Williamsburg, VA were told DRI owns Tahoe Beach and Ski Resort.  Owners attending presentations in Hawaii were told the same thing.  Owners attending presentations in Tahoe were told the same thing.

In other words, the lies are institutionalized, and sanctioned from the top using industry best practices protocols.  DRI would like to take the whole industry down based on their sanctioned protocols which include lies to consumers attending presentations.


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## davidvel (Jan 25, 2016)

nuwermj said:


> I have a hard time believing that Diamond has a "zero tolerance for  anyone who goes off script," as you quote Mr. David Palmer.





jbercu said:


> They actually did not say that they do not tolerate sales lies.  They said  "Our company has a zero tolerance policy for any member of the sales team who does not follow protocol" and "We have in place a strict set of sales policies and practices aimed at protecting the consumer that are in-line with industry best practices."
> . . .


You nailed it. Clever corporate spokes-hole speak. No one's off script if high pressure half-truths, generalities, etc. are in the script.


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## artringwald (Jan 25, 2016)

jbercu said:


> They actually did not say that they do not tolerate sales lies.  They said  "Our company has a zero tolerance policy for any member of the sales team who does not follow protocol" and "We have in place a strict set of sales policies and practices aimed at protecting the consumer that are in-line with industry best practices."



I also think it's significant that they did not describe any details of their protocol and sales policies. Their policy could be to tell the customer anything they want to help close the sale. Saying you're in line with industry best practices doesn't mean much in the timeshare business either.


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## Michael1991 (Jan 25, 2016)

Why Diamond Resorts International Inc.'s Stock Plunged 11% Today

A New York Times article is shining a light on the darker side of Diamond Resorts International Inc.'s business. 

http://www.fool.com/investing/gener...d-resorts-international-incs-stock-plung.aspx


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## RLS50 (Jan 25, 2016)

I always wonder when I read articles like this...

Does anybody alive anywhere read a story like this and really believe that timeshare companies, and their management who are veterans in the timeshare industry themselves, don't know exactly what happens at a typical timeshare sales presentation?    

Isn't it interesting that the guys running the timeshare companies always act like they are shocked and offended by these (incredibly frequent) allegations and deny this is the norm?

Ask any consumer who has been to one or more timeshare presentations themselves what they experienced.  Everybody who has been to even one timeshare presentation knows exactly what takes place and the tactics used.


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## Iggyearl (Jan 25, 2016)

*Where is all the cash coming from?*

Diamond was down today by 17% to $18.41/share.  Between 10/1/14 and 12/31/15, they spent $179.5 million buying back stock.  Average price of $28.23/share.  They also purchased Gold Key Resorts for $167.5 million. (these numbers can be confirmed by Inside the Gate).

Makes me wonder who is actually paying for all this spending.  Certainly not the shareholders.........

I believe they have grand plans for themselves and the industry, but any more news of this sort will certainly put a crimp in their style.  And Lord have mercy if any of these reporters ever does a undercover timeshare tour...


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## TUGBrian (Jan 25, 2016)

apparently DRI is attempting to stop the bleeding in the market by sending this letter to all shareholders:

http://www.sec.gov/Archives/edgar/data/1566897/000119312516436185/d127988dex991.htm


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## artringwald (Jan 25, 2016)

I bought DRI shares when they first went public. I got bugged with them when they started changing The Club rules, and tried sneaking optional travel insurance into the maintenance billings, so I sold all my shares. The stock was still going up at the time, but I didn't want a part of it anymore. With the negative publicity, the stock price appears to be head back to it's IPO price.


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## T_R_Oglodyte (Jan 26, 2016)

The place just hasn't been the same since Stephen Cloobeck relinquished direct control.


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## pedro47 (Jan 26, 2016)

T_R_Oglodyte said:


> The place just hasn't been the same since Stephen Cloobeck relinquished direct control.



Point well taken. Maybe they need do to an "Undercover Boss" television special with the new CEO as the undercover boss.


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## Michael1991 (Jan 26, 2016)

RLS50 said:


> Ask any consumer who has been to one or more timeshare presentations themselves what they experienced.  Everybody who has been to even one timeshare presentation knows exactly what takes place and the tactics used.



I definitely understand your point. For sure there are questionable industry wide practices. But there are depths below depths. I regularly read the Facebook groups for Diamond members and for Wyndham members. The quantity of complaints about sales rep's lies and pressure tactics on the Diamond group is far greater than anything on the Wyndham group.


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## TUGBrian (Jan 26, 2016)

while not scientific...when i browse to the resort pages on facebook and see the "reviews"....its literally a different world when looking at the diamonds/wyndhams...and especially westgates (welks too oddly enough)...where its just complaint after complaint regarding the sales tactics.

something you hardly ever see in the marriotts/hiltons/disneys/etc.


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## pedro47 (Jan 26, 2016)

TUGBrian said:


> while not scientific...when i browse to the resort pages on facebook and see the "reviews"....its literally a different world when looking at the diamonds/wyndhams...and especially westgates (welks too oddly enough)...where its just complaint after complaint regarding the sales tactics.
> 
> something you hardly ever see in the marriotts/hiltons/disneys/etc.



Maybe upper management does not review/read facebook and the other social media complaints regarding their sales tactics. 

Maybe their stock holder's and wall street should start reading facebook.


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## TUGBrian (Jan 26, 2016)

oh...im under no illusions that anyone who has worked long enough in the timeshare industry to rise to upper management of a Timeshare developer is somehow "unaware" of what happens during sales presentations.

its absolutely ridiculous to argue anything otherwise.


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## SmithOp (Jan 26, 2016)

I have seen so many DRI booths "pop-ups" lately at events I've attended, the county fair, a 5k/10k charity walk, and a concert venue.  They hire attractive young women to hand out magnetic swipe cards to "see if you've won a prize".  I'm sure everyone "wins" a 4 day/3 night stay with a mandatory presentation.  I also get calls every day since I stayed at a DRI resort and had to give them my cell number.  Their aggressiveness knows no boundaries IMO.


Sent from my iPad Mini 4 using Tapatalk


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## Maple_Leaf (Jan 26, 2016)

*DRI sales weasels lie about failed takeover attempts*



jbercu said:


> Tahoe Beach and Ski Club deeded owners attending DRI sales presentations in Williamsburg, VA were told DRI owns Tahoe Beach and Ski Resort.  Owners attending presentations in Hawaii were told the same thing.  Owners attending presentations in Tahoe were told the same thing.
> 
> In other words, the lies are institutionalized, and sanctioned from the top using industry best practices protocols.  DRI would like to take the whole industry down based on their sanctioned protocols which include lies to consumers attending presentations.



DRI sales weasels spread the same lies about Royal Dunes after they failed to get their henchmen on the Royal Dunes board.  They spread lies that Royal Dunes was in bad financial shape and due for a huge special assessment.


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## harveyhaddixfan (Feb 7, 2016)

tschwa2 said:


> At Beachwoods, with Gold Key, the management fees were 8% of the total budget.  The reserves are ridiculously underfunded.  This year the first year that DRI took over, they didn't touch the reserves which are $23 per unit regardless of size from 1 br up to 3 br but they did make sure to increase the management fees from 8% to 12.7%



Don't forget the "corporate allocation" of almost $540k. That plus the management fee is about 25% of the budget. And if it wasn't for the "developer subsidy", we'd be at $968 MF up from $710 instead of the $820 they billed this year. Attached is the budget. It's a joke.


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