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Acquisition News [Gold Key Resorts] [MERGED]

RLS50 said:
With the average DRI weekly MF rate about 50% higher than the average Gold Key property week now, what would the impact be?
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You need to be a bit careful when making this comparison. For Gold Key owners MF are based on fixed weeks at a resort. They are paying to their HOA. In the case of Diamond point owners, we are paying fees to a trust fund and the trust fund pays the HOA. The trust fund adds an additional layer of fees to the point owners, which the fixed week owner will not be required to pay.

For example, HOA fees at the Diamond managed Grand Beach resort in Orlando were, last year, $965 for a three bedroom unit. That same unit costs 10,500 point for a summer week and 8,500 for an off-season week. Trust fund fees for 10,500 points are $1,748 and for 8,500 points are $1,456.

So, you will pay more if you convert to points. But I don't think fixed week owners will necessarily see MF increases. Following some of the previous acquisitions made by Diamond, MF increased significantly, but those resorts were in desperate need of updated. From what I've read, Gold Key resorts are in good condition. I'm thinking that your fees shouldn't change much.
 
From Wednesday's DRI Q3 financials conference call:

Q: Benjamin Chaiken - Credit Suisse

Looking your package acquisitions can you give us a rough percentage of owners that convert from fixed to points within the first 12 months or whatever timeframe the deals is…?

A: David Palmer - CEO & President

Yeah it depends Ben on the tactic that we take in conversion ... We have two different approaches. In the ILX acquisition we actually had an instant new membership that was granted to all the ILX members with an opt out provision over a period of time.

In the Tempest acquisition deal we actually did the opposite we actually did it where you came into the sales center and we sold you over time.

We haven’t disclosed publicly what those percentages are and I am not going to do that today. They have been very successful -- both of those approaches have been very successful there is pros and cons of each one, how you administer them.

In this case we’re going to use the latter where we use the Tempest acquisition program so we’re not going to give any instantaneous membership with an opt out. We’re going to deploy the same tempo that we used in the Tempest deal. So you will see that kind of roll in over the next three or four years. [That] is really the spectrum that you're talking about here not really in the first 12 months is really is kind of a three year program.

And that’s why you still see few years later -- and we do breakout in our 10-K that population of individuals of -- almost 20% of our sales last year was to that population is to whom we provide resort management services, but are not yet in the point systems and they’re very, very strong prospects. So we've in fact built a pipeline of future tours over the next three or four years in the structure that we're using.
 
Michael1991 said:
You need to be a bit careful when making this comparison. For Gold Key owners MF are based on fixed weeks at a resort. They are paying to their HOA. In the case of Diamond point owners, we are paying fees to a trust fund and the trust fund pays the HOA. The trust fund adds an additional layer of fees to the point owners, which the fixed week owner will not be required to pay.

For example, HOA fees at the Diamond managed Grand Beach resort in Orlando were, last year, $965 for a three bedroom unit. That same unit costs 10,500 point for a summer week and 8,500 for an off-season week. Trust fund fees for 10,500 points are $1,748 and for 8,500 points are $1,456.

So, you will pay more if you convert to points. But I don't think fixed week owners will necessarily see MF increases. Following some of the previous acquisitions made by Diamond, MF increased significantly, but those resorts were in desperate need of updated. From what I've read, Gold Key resorts are in good condition. I'm thinking that your fees shouldn't change much.
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Thanks for that info and comparison. But this information raises a question. Based on your example above, what benefits are the Diamond owners getting for what appears to be the large price difference between deeded week MF's vs. trust fund MF's?

Even if for argument's sake we just hypothetically assume any owner could convert to points for free (I don't believe that is true in reality?), why would an owner convert to points and pay the equivalent of almost double the MF for a summer week?

I get the idea of trading costs. So maybe a person with the deeded week needs to add their II or RCI annual fees and any annual trading fees ($200-$300 approx.) So maybe now for a summer week the deeded owners (true) costs are $1265 ($965 + $300). But still almost $500 cheaper per year than trust point MF's.

If one has a "home" or preferred resort they plan on using regularly, or occasionally renting out to family or friends if they can't use it, I am struggling to understand the benefits of being in the trust and paying the higher annual MF's?

Since it sounds like all former Gold Key owners are about to enter a period of years worth of sales pitches by DRI (based on information shares by NUWERMJ in the post after yours) it would be good to understand.

Thanks.
 
Side point:
In the Diamond system, members pay their maintenance fees and they pay additional Club dues. These dues are $225 or more depending on how many points are owned. The Club provides reservation and exchange services similar to II.

Main point:
I may not be the best person to answer questions about the value of converting to points. I did not convert a fixed week at a Diamond location. I have a fixed week at a non-Diamond location and I added 4000 Diamond points a few years ago. If I could do it over again, I would not have bought Diamond points. Knowing what I know now, I think Bluegreen or Wyndham are better values for someone who wants the advantages of points. But there is no resale for me to liquidate my ownership.

That said, from what I've read on TUG and elsewhere, Diamond point owners like the flexibility of a points system. In Diamond members can use points for short stays--any number between 2 and 6 nights. Some like weekend stays, others like Sunday through Thursday combinations because the daily point cost is lower. If a week costs 10,000, then each of the five nights between Sunday and Thursday cost 1000, while Friday and Saturday cost 3000 each. (Yes, this sums to 11000; it's by design. It's a small "penalty" for breaking up the week. Not all point systems assess this penalty.) Because of the ability to make short stays, points are sometimes seen to be more flexible than fixed weeks. Similarly, some people like 10-12 day stays using a mid-week check-in.

Some people also like the "last minute" discounts offered by Diamond and they see this as a way to get more vacation days out of their points. Diamond gives a 50% points discount for week long reservations within 60 days of check-in, and within 30 days they give 50% discounts for nightly stays (there is a two night minimum). I've never been able to use this as I don't live within driving distance of a Diamond resort and I am restricted to school calendars. Nevertheless others like it.

Finally, I personally prefer the Diamond reservation system over exchanges through II. When I deposit my fixed week with II there is quite a bit of uncertainty. I have to submit a request for an area and a date range, and then wait. When I get a call informing me something is available, I have 24 hours to accept. And I have no idea if something better might be available next week. With Diamond, I can see the full availability at all of their locations 10 or 13 months in advance.

For the person who owns a preferred resort they plan on using regularly, I think the general opinion on the internet is don't convert to points. People who have made the conversion note that it becomes more difficult to get a reservation at their (former) home resort. They are now competing with 100s of thousands of other owners. Further, they pay a lot for the conversion and they pay higher annual fees, but they don't feel they really get much more for that money.
 
If I could do it over again, I would not have bought Diamond points. Knowing what I know now, I think Bluegreen or Wyndham are better values for someone who wants the advantages of points. But there is no resale for me to liquidate my ownership.
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Michael1991 - if you don't owe anything on your points, Diamond may take them back for a $250 fee. Please see the long sticky thread at the top. Good luck!
 
Regarding why someone might convert a fixed week to DRI points, have a look at messages #32 and #49 in this thread. JOHNRSRQ is a fixed week owner who finds benefit in joining the DRI Vacation Club.

DRI has at least two way they convert owners at acquired resorts to their Vacation Club point system.

1. Selling a Club membership where the owner retains their deeded week
2. Selling a Club membership where the owner swaps their deed for a trust interest

I believe ILX owners were given option 2 only. They could convert what they owned to Diamond points but they had to surrender their deeds.

Tempus Resorts had two locations: Dunes Village in Myrtle Beach and Mystic Dunes in the Orlando area. I haven't heard anything about the situation at Dunes Village, but it appears that Mystic Dunes owners are offered the first option above (they might have a choice between 1 and 2 I'm not sure). Regarding option 1, after the owner pays to join the DRI Club, one such owner explains: "You assign the rights (keep the deed) and pay the same maintenance fees plus you pay more maintenance fees for the additional points you get for the assignment. You can terminate assignment with a determined notice period but you are still stuck with the additional points (and annual maintenance fees)." This sounds to me like the same deal JOHNRSRQ has.
 
All the Gold Key resorts are now on the DRI website.
 
how does availability look for next summer through DRI?
 
Gold Key Resorts did not charge for estoppels or ownership transfers.

I recently purchased a week at Beachwoods (after the official DRI acquisition date). The closing company informed me that DRI charges $50 for estoppels and $300 for the ownership transfer. I was not willing to pay these extra fees. I got the seller to accept these additional fees (since they weren't disclosed previous to signing the contract).

The closing company just contacted me with this information.

"I just spoke to the Diamond Resorts rep at the resort and they do not currently have a transfer or estoppel fee as they are not included in DRI's system yet."

So, at this moment, the additional fees aren't being charged for the GKR timeshares.
 
nuwermj said:
Regarding why someone might convert a fixed week to DRI points, have a look at messages #32 and #49 in this thread. JOHNRSRQ is a fixed week owner who finds benefit in joining the DRI Vacation Club.

DRI has at least two way they convert owners at acquired resorts to their Vacation Club point system.

1. Selling a Club membership where the owner retains their deeded week
2. Selling a Club membership where the owner swaps their deed for a trust interest

I believe ILX owners were given option 2 only. They could convert what they owned to Diamond points but they had to surrender their deeds.

Tempus Resorts had two locations: Dunes Village in Myrtle Beach and Mystic Dunes in the Orlando area. I haven't heard anything about the situation at Dunes Village, but it appears that Mystic Dunes owners are offered the first option above (they might have a choice between 1 and 2 I'm not sure). Regarding option 1, after the owner pays to join the DRI Club, one such owner explains: "You assign the rights (keep the deed) and pay the same maintenance fees plus you pay more maintenance fees for the additional points you get for the assignment. You can terminate assignment with a determined notice period but you are still stuck with the additional points (and annual maintenance fees)." This sounds to me like the same deal JOHNRSRQ has.
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Yes, that is fairly accurate. The joiner fee was combined with the cost for the few thousand points I bought entering "The Club". I think they waived the first year or more of mf fees as an incentive. Now, if I wanted to cut and run, I would still be obligated for the mf on those few thousand trust points. My deeded units would come back to me and I could use them at the resort for the weekly intervals or I could set up an RCI account (still in operation there) or a seperate II account etc.. I could legally without violation of any club rules ,etc, advertise them commercially and profit from them. Otherwise , one can not ; I guess if I really wanted out, I too may have to pay a $250 relinquish fee to DRI for those initially purchased developer points.

On the resale point accounts which I took over, which they combined into a reale account- called a regional account- US collection only in my case, I never recall signing any documents which would allow any negative credit consequence to my credit. In fact, if they did, I would sue them and win. But they won't because they do not have me on an application , credit appl. note payment or anything for that matter. I could foresee them harassing me by telling me all of my accounts would be in default if resale mf's were not paid.

I am not there at this point (exiting right stage) because I do use the programs to my benefit. Works for me currently but it does take a little time and effort.
 
Just received the new Fall Diamond Resorts International Newsletter for Beachwoods

Outdoor Pool, Temporary Sales Center & Shoreline Fishing
OPEN

North Glen Recreation Park
OPEN

Welcome Center
(Guest Registration and Sales)
OPEN

Lake and Dock for Paddle Boating and Dockside Fishing
OPEN

Lakeside Lodge with Fireplace Lounge
EARLY OCTOBER

Vacation Home Renovations Complete
LATE OCTOBER

Pavilion Fitness Center
MID-NOVEMBER

Lakeside Lodge & Waterpark
MID-DECEMBER

Oasis Pool Snack Bar
SPRING 2016

These are part of the FAQs

Q: Can I exchange my week for a week with Diamond Resorts International®?

You will have the opportunity to purchase points which will allow you to exchange with Diamond Resorts and visit all of their properties and affiliates.

Q: Will my maintenance fees go up now that Diamond Resorts has acquired the resorts?

Maintenance fees will continue to be determined annually by the Board of Directors for work, refurbishment and ongoing operation for each individual resort property. Your fees will continue to be based on the specific needs of your home resort. Remember, your fees are determined based on items like reserve for replacement – which is the constant refurbishment of items like furniture, to ensure the best vacation experience possible. Maintenance fees also encompass insurance, taxes, utilities, and other resort-related expenses. You should continue to expect inflationary costs to affect the annual budget.

Healthy and financially sound Owners’ Associations are important to ensure we provide quality vacation experiences, and deliver unforgettable hospitality experiences that families can forever treasure. This is the core of our business philosophy at Diamond Resorts.

Q: Will I be able to convert my week into points now?

There are no changes to your ownership. Diamond Resorts intends to offer owners the opportunity toconvert their week into points if they wish, in connection with purchasing into the points program.


And a personal note from Bruce Thompson in this letter included in the Newsletter.

"On a personal note, I am not riding into the sunset; I plan on vacationing with my family at Beachwoods regularly. I look forward to fishing in the lake and playing in the waterpark with my grandchildren."
 
Does DRI charge maintenance fees by the unit size?

harveyhaddixfan said:
Also worth mentioning is the MF at Beachwoods is the same no matter what size unit you have.
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Yes, we've always paid the same MF at this resort, no matter what size unit. Charging according to unit size seems like a more equitable way to assess MFs.
 
No new information provided at Beachwoods 2nd Annual BBQ

Basically, it was reiterated what has previously been in print in the newsletter and email communications.
"The future is bright and holds the promise of enhanced vacation experiences for you all. Remember, nothing has changed with your ownership other than you will have more opportunity and flexibility in your vacation planning than ever before."​

The future's so bright, I gotta wear shades! :cool:

There were representatives stationed throughout the buildings and models, as we toured through the resort. We didn't ask questions. We just explored the areas and I took lots of pictures.

It was a great day. I am extremely excited about this resort. I liked what I saw last Saturday and look forward to the completion of all the amenities.

I have reported the day's events and added pictures on my most recent blog posting.

http://www.timesharevacationsblog.com/2015/11/beachwoods-2nd-annual-owners-bbq/
 
Egret1986 said:
Basically, it was reiterated what has previously been in print in the newsletter and email communications.
"The future is bright and holds the promise of enhanced vacation experiences for you all. Remember, nothing has changed with your ownership other than you will have more opportunity and flexibility in your vacation planning than ever before."​

The future's so bright, I gotta wear shades! :cool:

There were representatives stationed throughout the buildings and models, as we toured through the resort. We didn't ask questions. We just explored the areas and I took lots of pictures.

It was a great day. I am extremely excited about this resort. I liked what I saw last Saturday and look forward to the completion of all the amenities.

I have reported the day's events and added pictures on my most recent blog posting.

http://www.timesharevacationsblog.com/2015/11/beachwoods-2nd-annual-owners-bbq/
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Thanks for keeping us all informed. Especially appreciate all the pictures you provide.

We enjoy your blog posts. Hope you find the time to keep them coming!
 
And there we have it. We all knew it was coming. Beachwoods MF are showing in my account on goldkeyowners.com. They were $625ish in 2014, then Gold Key understandably raised them to $710 for 2015. Now they show as $820. Not a happy camper right now. I'd like to see the justification compared to last years numbers.
 
And so it begins.....

harveyhaddixfan said:
And there we have it. We all knew it was coming. Beachwoods MF are showing in my account on goldkeyowners.com. They were $625ish in 2014, then Gold Key understandably raised them to $710 for 2015. Now they show as $820. Not a happy camper right now. I'd like to see the justification compared to last years numbers.
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Of all the former Gold Key Resorts timeshares, Beachwoods had the biggest jump. Ocean Beach Club had an $85 increase.

Thanks for the heads-up, Chris.
 
I am sure everybody expected the jump at Beachwoods. There was no way it was staying under $800, especially with DRI now involved.

But I am a little surprised at the 10% jump at OCB. I am a big fan of the Gold Key properties at VB, and had a chance to either stay in or tour them all. But they certainly aren't the quality of the oceanfront Marriott resorts all along the eastern seaboard. If they keep bumping up MF's at this kind of annual rate they are going to need to do a lot of work on the properties and addressing all the little details to make the MF's even close to worth it.

JMO.
 
Wow, up 15%

harveyhaddixfan said:
And there we have it. We all knew it was coming. Beachwoods MF are showing in my account on goldkeyowners.com. They were $625ish in 2014, then Gold Key understandably raised them to $710 for 2015. Now they show as $820. Not a happy camper right now. I'd like to see the justification compared to last years numbers.
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So DRI raised MF 15% at a newly renovated resort. It looks like owners get to help pay DRI shareholders for some of the cost of buying their own resort. What a value proposition!
 
Maple_Leaf said:
So DRI raised MF 15% at a newly renovated resort. It looks like owners get to help pay DRI shareholders for some of the cost of buying their own resort. What a value proposition!
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lol, I think that's next year. At the very least, even to ardent to anti-DRI budgeting department factions, not this year.
 
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