# questions about DRI / gold key



## Hubble (Sep 14, 2016)

Hello, I am new to the site, and have just been searching threads on DRI. 

My wife and I gave in at Gold Key presentation last September and now own a December timeshare at Beach Quarters.  We had turned down several offers for more expensive weeks elsewhere in Va Beach, but were told about the Interval Exchange program and how this cheaper property could work well.  There were several half truths and falsehoods in the presentation, but we ended up reasonably happy with things, having gotten pretty good exchanges for this year and next, along with several Getaways that we enjoyed.

In an owners meeting, however, we were given a high handed sales pitch
by DRI filled with threats and out and out bullying.  They would convert our week to 2750 points, but we'd have to pay about $12000 more to reach their minimum of 5000, and our MF would be 1500 instead of the 700 of this year.
I don't remember any discussion of a "US collection" offer that I see discussed here.  They threatened us with a huge increase in the MF and implied strongly that the Interval exchange system wouldn't be available soon.  So, by not converting, we'd be paying upwards of 2000 per year just to stay in Virginia Beach in December.  We turned them down as if felt like extortion, but wonder now if we did the right thing.  Can anyone provide us with advice about the situation?  Thanks for all suggestions.


----------



## tschwa2 (Sep 14, 2016)

You did the right thing.  To avoid that in the future, don't attend updates.  DRI is going to raise your MF's.  As a former gold key owner I know that they don't have sufficient reserves.  Instead of correcting that immediately DRI decided to take care of themselves and increase the management fees a couple of hundred dollars per week.  Next they will increase the reserves.   

IMO converting isn't going to help.  Your converted points or trust points will still be worth nothing and you will have additional fees and Mf's.  Everytime they raise the MF's at any of their resorts, you will feel that increase as a points trust owners maybe it will be diluted a little but you will still deal with the high cost of doing business with DRI.

You have three options- convert, which I think would be the most expensive upfront and ongoing but will give you more options depending on how much you are willing to spend (none of it worth it IMO)

You could keep what you have and continue to exchange through II and hope the fees don't increase too much and the exchanges continue to work for you.

If you have paid off the week and are ready to give up on option 2, you could try to deed back the week to DRI.  You could probably give it a few more years and then revisit options 1 or 3.  The conversion for a fee will always be there although they might charge you a little more.  The deed back option may not stick around but DRI has been offering it on and off for the last 4-6 years although there have been whole years during that time where it was not an option.


----------



## Hubble (Sep 15, 2016)

Thanks so much for your help.  Our '18 week should soon show up in II.  We were considering pre-paying the MF, depositing it in II, and deciding later about trying to divest ourselves of the deed.  If we were to do this, would it hurt our chances of them taking the deed back?  We are fully paid off for the TS, and have already booked our '17 week in Ocean City.   

Also, when we prepaid '17, we got the '16 rate.  Will they bill us for the difference in January, or are we now paid in full for next year?  Will we get the '16 rate for '18 if we prepay?

Thanks again.


----------



## Egret1986 (Sep 15, 2016)

*No.  You will be billed for the difference when the MF for that year is determined.*



Hubble said:


> Thanks so much for your help.  Our '18 week should soon show up in II.  We were considering pre-paying the MF, depositing it in II, and deciding later about trying to divest ourselves of the deed.  If we were to do this, would it hurt our chances of them taking the deed back?  We are fully paid off for the TS, and have already booked our '17 week in Ocean City.
> 
> Also, when we prepaid '17, we got the '16 rate.  Will they bill us for the difference in January, or are we now paid in full for next year?  Will we get the '16 rate for '18 if we prepay?
> 
> Thanks again.



Nice thought.  But you aren't going to be able to dodge fees by prepaying in order to deposit to the exchange company.


----------



## Hubble (Sep 15, 2016)

.
Okay, I suspected that would be the case, and it's helpful to know.  Do you think that pre-paying '18 and depositing it in II would affect the deed back option?  I mean, it's a bit of a psychological blow when deeding back, and having one more exchange to play with could make us feel better.


----------



## RLS50 (Sep 16, 2016)

Hubble,

In addition to meeting their sales quotas (obviously), I believe DRI wants former Gold Key owners to convert to points mainly because they don’t have enough points inventory in Virginia Beach they want or need for their other DRI owners.   Virginia Beach is now one of DRI’s best East Coast beachfront locations (maybe the only one that is direct oceanfront?).    

In fact, I think Virginia Beach deed owners should be very careful that if they convert to points (especially owners between April-Oct) they could end up having more difficulty finding availability in Virginia Beach in points versus if they had just kept their deed, and / or traded thru Interval International.   Of course they would still be able to use their points elsewhere in the DRI network, but they could find it harder to now stay at their home resort in Virginia Beach.

Don’t let the DRI sales people scare you about maintenance fees.  It is true, I have no doubt all of our maintenance fees are going up in Virginia Beach.   That will be true whether you own points or you keep your deed.   But it is very likely MF’s were going to go up under Gold Key anyway.   It just may go up faster and higher now under DRI.     

The reality is that Gold Key sold DRI a bunch of properties where almost all of them have reached the point where they needed major renovations / refurbishments.   Ironically one of the downsides of Gold Key having relatively low maintenance fees, was that the reserves at some of the properties are low.   Some of the former Gold Key properties appear to have current reserves capable of funding a significant refurbishment (i.e. Ocean Beach Club) and some of those properties probably do not (i.e. Beach Quarters).    

The one concern I would have as an owner at Beach Quarters is the low reserves.     I did hear thru the grapevine that DRI is getting ready to do a complete property condition audit at Beach Quarters?   And it wasn’t from the sales people.    Beach Quarters needs a lot of work and I am wondering if owners might get hit with a Special Assessment at some point to make up the difference?    In fact, I believe that if Gold Key had never sold to DRI, they could have eventually leveled a special assessment to Beach Quarters owners to make the needed updates to the structure and interiors (similar to what was levied to Beachwoods owners).

Just something to consider.


----------



## tschwa2 (Sep 16, 2016)

The current deed back program with DRI does not seem to impacted by future deposited use.  The one they had around 2010 (in which I don't think deeded non points properties even qualified) required that you pay the following years MF's and not use any points.  If you had you would have to wait until the following year to re-apply.  They weren't charging per say but they really were charging a full year's pre paid MF with no use for the owner.


----------



## artringwald (Sep 16, 2016)

RLS50 said:


> Hubble,
> 
> In addition to meeting their sales quotas (obviously), I believe DRI wants former Gold Key owners to convert to points mainly because they don’t have enough points inventory in Virginia Beach they want or need for their other DRI owners.   Virginia Beach is now one of DRI’s best East Coast beachfront locations (maybe the only one that is direct oceanfront?).
> 
> ...



Sounds like the scenario when DRI bought Sunterra. Sunterra had neglected property maintenance, and let the reserves run low. After DRI purchased Sunterra, they started making the necessary property improvements, and started putting more money into the reserves. They also greatly increased the amount the HOA paid to DRI for managing the property, so of course, the MF's kept going up. They twisted the arms of deeded owners to pay big bucks to convert to points, but the points weren't always enough to book the same view category that deeded owners were able to book. The overhead of the collection also meant that points owners were paying up to 50% more in MF's than deeded owners. Membership in the Club makes booking easier than exchanges, but I decided to hold onto our deeds. If you ever decide to get rid of your ownership, deeds are much easier to sell than points. One of the reasons points are hard to sell is that Club membership is not transferable to new owners.


----------



## RLS50 (Sep 16, 2016)

artringwald said:


> Sounds like the scenario when DRI bought Sunterra. Sunterra had neglected property maintenance, and let the reserves run low. After DRI purchased Sunterra, they started making the necessary property improvements, and started putting more money into the reserves. They also greatly increased the amount the HOA paid to DRI for managing the property, so of course, the MF's kept going up. They twisted the arms of deeded owners to pay big bucks to convert to points, but the points weren't always enough to book the same view category that deeded owners were able to book. The overhead of the collection also meant that points owners were paying up to 50% more in MF's than deeded owners. Membership in the Club makes booking easier than exchanges, but I decided to hold onto our deeds. If you ever decide to get rid of your ownership, deeds are much easier to sell than points. One of the reasons points are hard to sell is that Club membership is not transferable to new owners.


Thanks for sharing those comparisons.   

From what I have gleaned from you and other legacy DRI owners past comments, I think the main difference was that Gold Key did not have underfunded reserves across all properties.  Some properties have lower reserves than others, and some properties are in relatively good shape or are relatively new...

Oceanaire (2011)
Ocean Beach Club, B side, (2008)
Ocean Beach Club, A side, (2006) 
Boardwalk Resort and Villas (2001)
Turtle Cay (1997)
Beach Quarters (1990)

Beach Quarters used to be the Clarion hotel that Gold Key purchased, and I think it was their very first timeshare property in Virginia Beach.     They didn't do a full gut job, but it looks like they just chopped up the interior rooms of a hotel to turn it into a timeshare property.   Beach Quarters is pretty awesome in relation to amenities (it has a 7th floor outdoor rooftop pool deck, shares pools with Turtle Cay across the street, and has a great gym) and the fact that all rooms are oceanfront.   It is just that the entire interior probably should be gutted and redesigned.   I seriously doubt DRI will do that, but it feels like almost everything there on the interior needs to be remodeled / renovated / or refurbished.    I am not sure about the exterior structure.

So most of the properties that DRI got in the package deal from Gold Key were in relatively good shape and financial condition.  Gold Key properties were not a collection of distressed properties like past DRI purchases.   

But I have no doubt that DRI saw the average Gold Key annual maintenance fees of $850ish and probably saw $500-$600 of easy cushion they had to jack up the fees to the $1300ish level that seems common place for their US Collection properties.  JMO.


----------



## tschwa2 (Sep 16, 2016)

They under fund compared to Marriott levels (which DRI seems to stick with or go even a little higher).  Most Marriott 2 BR's put $250-$450 per annual unit toward reserves each year with the average being around $300.


----------



## RLS50 (Sep 16, 2016)

tschwa2 said:


> They under fund compared to Marriott levels (which DRI seems to stick with or go even a little higher).  Most Marriott 2 BR's put $250-$450 per annual unit toward reserves each year with the average being around $300.


At the end of the day, I agree with you that I think Gold Key should have had higher MF's directly related to reserves. 

I think that Gold Key compensated at some level for this (or tried to) by spending less than a Marriott does on luxury.  For example the soft goods at Ocean Beach Club, take the towels for instance, are no where near as thick and luxurious as what you find at a Westin or Marriott.   The bathroom towels at OBC look like the white $2 special available every Black Friday at Wal-Mart.   The bedding at OBC was also barely average.

Just a couple examples, but in many cases it seems like Gold Key made a conscious decision to try and keep lower MF's as a sales feature and compensated with lower quality soft and hard goods where they felt they could get away with it.  

I actually don't have a problem with increased fees from DRI related to funding reserves.   The Virginia Beach properties all have the potential to be outstanding if maintained and managed properly.


----------



## Hubble (Sep 16, 2016)

Thanks for the feedback.  One thing that has us concerned is several offhanded comments by the DRI salesmen that DRI will break up with Interval, and that our deeded week will no longer be eligible for exchange.  Do you think there's anything to this?

Also, in reference to a "special assessment fee" at Beach Quarters, what range do you think could happen?  Is it likely a few hundred dollars or thousands?
Similarly, MF's might be expected where.. 1000, 1500, 2000?

I know Beach Quarters isn't as fancy as the others, but we like their sauna, guaranteed ocean views and easy access to our car.  The 5AM chanting by
the soldiers running on the boardwalk is a problem for some units, but I'm getting used to it


----------



## Bill4728 (Sep 16, 2016)

I can tell you that a few years ago when DRI took over Monarch Grand (MGV)   They told everyone they spoke to that there would be a huge special assessment (SA) on MGV due to all the damage to the Cabo resort by a hurricane.  It never happened.  

So DRI salespeople lied for a long time to MGV owners trying to scare them.  IMHO they are still trying to scare new owners with stories of SA


----------



## RLS50 (Sep 16, 2016)

Hubble said:


> Thanks for the feedback.  One thing that has us concerned is several offhanded comments by the DRI salesmen that DRI will break up with Interval, and that our deeded week will no longer be eligible for exchange.  Do you think there's anything to this?
> 
> Also, in reference to a "special assessment fee" at Beach Quarters, what range do you think could happen?  Is it likely a few hundred dollars or thousands?
> Similarly, MF's might be expected where.. 1000, 1500, 2000?
> ...


As far as any Special Assessment goes, that is complete speculation on my part.   I did not hear that from anyone at DRI.   This may never happen.  I only made those comments based on the fact that Beach Quarters has lower reserves than some of the other VB resorts, but is the oldest and might need the largest investment.  The HOA by-laws do not allow for any extra reserves at another location, like Ocean Beach Club, to be shared and used to upgrade Beach Quarters.

In relation to increased maintenance fees, the HOA by-laws only allow a certain percentage increase a year in MF.  I am not sure what that limit is (I have to look it up), but we know it allows at least a 10% increase per year.   I say that because that is the percentage DRI increased fees last year at most of the Virginia Beach resorts.  DRI increased fees even higher at Beachwoods in NC.  They raised MF's there 15% in one year.  

Hard to say how fast and how high DRI may take annual fees.  They are going up.  I think for us the bigger question is how well will they manage the properties at Virginia Beach?   If DRI is going to charge more, the expectations should go up as far what they deliver.

As far as anything you were told about cancelling Interval International, I would not believe anything a DRI sales rep told you about that.  Like Bill mentioned in his comment, DRI sales people appear to be trying to hard sell Virginia Beach owners into points by scaring them just as they have done at other properties in other states.


----------



## Hubble (Sep 16, 2016)

The DRI sales people were basing threats of huge MF increases ("could well double overnight") on a claim that 48% of deed holders "have been delinquent", and that the good people will have to make that up.  I've since seen a report that 3.6% was the delinquency rate for the month ending March 30, and 7.6% for the year ending on that same day.  The 48% figure must have involved some creative thinking.


----------



## RLS50 (Sep 17, 2016)

Hubble said:


> The DRI sales people were basing threats of huge MF increases ("could well double overnight") on a claim that 48% of deed holders "have been delinquent", and that the good people will have to make that up.  I've since seen a report that 3.6% was the delinquency rate for the month ending March 30, and 7.6% for the year ending on that same day.  The 48% figure must have involved some creative thinking.


I have come to the conclusion that in order to work in timeshare sales, especially for some of the worst companies out there, one has to have no conscience or moral compass.

When ones job is to specifically target inexperienced people in order to try and convince them (in a high pressure situation) to pay you some absurd amount of money in return for a product that is really only worth maybe 10% or less of your asking price, I find that offensive.   It might be legal, but it is still immoral.


----------



## harveyhaddixfan (Sep 18, 2016)

I was at an update at Beachwoods about two weeks ago. They were really trying to push the points on to me. They went on and on about how if they need another special assessment it's all going to be left to the deeded owners and not the points owners to pay. 

They were also saying that they are no longer going to be with RCI And would no longer be able to exchange through RCI points.  I'm not quite sure how they can discontinue RCI points after people paid out big bucks to get into it.

Another one that made me laugh is when they said that they were  about to buy interval international and that RCI would be going away because everybody wants to be in a points program now. 

They wanted to push 6000 points on me at a cost of about $4.50 a point saying that gold key is subsidizing my purchase and if I don't buy they would be happy to have their money back. I couldn't help but laugh at that. I said  I could just buy points from someone on the secondary market if I wanted them. The salesman there said that that would be "cheating the system." Another big laugh.

 They seriously think that everyone that comes in there is it idiot and has no idea how timeshares work or what they're talking about.  :hysterical:


----------



## RLS50 (Sep 19, 2016)

harveyhaddixfan said:


> Another one that made me laugh is when they said that they were  about to buy interval international and that RCI would be going away because everybody wants to be in a points program now.


I guess nobody should be all that surprised, but in the pantheon of lies sales people tell, that one has to be near the top.


----------

