HGV agrees to purchase BlueGreen Vacations

[Venter]

Hilton Grand to buy Bluegreen Vacations in $1.5 billion deal

Vacation property operator Hilton Grand Vacations said on Monday it would buy peer Bluegreen Vacations in a $1.5 billion deal including debt, to attract younger customers for its timeshare properties and expand offerings.

www.reuters.com

 

[Mowogo]

I'm an avid skier and the Ikon, Mountain Collective and other multi-resort passes do make access to multiple timeshare locations kind of appealing. The problem is most ski weeks in most systems are very high demand. After owners and various internal priorities, I just can't see much leftovers being accessible to peons like me. It sort of makes sense, if a system couldn't fill a ski resort even during ski season, how could they ever cover costs? No skier buys a ski week and then doesn't use it. And since ski weeks are expensive, most ski weeks are bought by skiers.

Honestly this is where a fractional is a better system. ie, 24 families share ownership of 4 ski chalets in Mammoth, Big Sky, Jackson Hole, Taos. Each chalet $3 million = $12 million investment. Each family = $500,000 all in up front plus maintenance fees but gets access to 4x52 = 208 weeks/24 = 8.5 weeks each, probably 2 ski, 2 summer, 4 mud. But access is nearly guaranteed, you get wide variety of locations, etc. August fractionals in Europe is doing something like this with classic European renovations in Paris, Barcelona, Mallorca, London, etc. Very appealing... if you can afford it.

Skiers absolutely buy and don’t use. Now, the units in this case aren’t likely to fall to a point where MAX would be able to access them. The best chances would be through the exchanges (You start looking in advance and you will be amazed at what you can find) or within their specific sub system. Fractional may be better in access, but you are also talking substantially higher investment than a timeshare even bought at retail.

 

[Clifbell]

We are DRI members. We have no desire to join MAX. Nor do any of the DRI Owners we have talked to.

That seems to be common among DRI owners.... I own both, so to me it is not clear why DRI owners don't want to join MAX. Curious Why not?

 

[Clifbell]

In theory, if Max does take off with time and is truly treated like its own exchange … there may be a significant pool of inventory that opens up for Max members at 6 months out, truly shielded for Max until the 6 month mark. That may work good for people with Max someday. However, we are not at the point that such a thing is creating a reasonable clamoring for Max — certainly not enough to make a developer purchase to get it.

I don't think they have finished their integration of the inventory... I see a lot more inventory on the Diamond side than shows up on HGV side... Seems like they have to manually allocate inventory... If there systems get more integrated, there may be a lot more inventory available for all

 

[GT75]

I don't think they have finished their integration of the inventory... I see a lot more inventory on the Diamond side than shows up on HGV side... Seems like they have to manually allocate inventory... If there systems get more integrated, there may be a lot more inventory available for all

You are in an unique position to verify this but we believe the Max program is an exchange program similar to how RCI works. Your comments do seem to support this because HGV has had enough time to figure out inventory by now. That could explain why you don't see the same inventory when looking at the HVC vs. the HGVC side.

 

[geist1223]

That seems to be common among DRI owners.... I own both, so to me it is not clear why DRI owners don't want to join MAX. Curious Why not?

To name a few reasons. The cost. The 6 month Booking Window. We normally Book at 10 to 14 Months. Do not need more locations. Loss of DRI Benefits. We can Book most of the HGVC locations through RCI. Usually at more than 6 months. We can pay a lot (years worth) of RCI exchange Fees for the cost of joining MAX.

MAX access to Inventory inlarge part will be controlled by how many HGVC Members join MAX and Book through MAX; and, how many DRI members join MAX and book through MAX. The fewer that join/Book MAX the smaller the available Inventory.

 

[dioxide45]

You are in an unique position to verify this but we believe the Max program is an exchange program similar to how RCI works. Your comments do seem to support this because HGV has had enough time to figure out inventory by now. That could explain why you don't see the same inventory when looking at the HVC vs. the HGVC side.

I am not sure how to understand @Clifbell comment between "side". Is it that he sees less HGVC properties in Max than he does HVC properties? Or is it that when looking through the portal from the HVC system there is more available than when looking at it when coming from HGVC? I suspect it is the latter. HGV is really pumping the legacy DRI trusts to "upgrade" people into Max. This would mean more HVC resort inventory in Max than HGVC.

I was also under the impression early on that Max was just added booking restrictions as a member of THE Club. Meaning, you sign up for Max you are now part of the legacy Diamond points exchange system that allowed points members to reserve any resort at 10 months. Max just added additional reservation windows at 6 months. If this is true, any unreserved DRI inventory that is in The Club at 6 months would then open up to Max members. HGVC inventory doesn't start out in THE Club and can only get there if a Max member exchanges for something through Max.

 

[dioxide45]

News is making waves on the backend. Sitting in the airport minding my own business and some guy's phone next to me is ringing off the hook - whatever business he's in has lucrative contracts with Blue green so his company is frantic.

Perhaps he worked for Choice Hotels?

 

[zjhasan1976]

Somebody had posted this on a FB group from a presentation.

 

[dioxide45]

Somebody had posted this on a FB group from a presentation.

View attachment 83826

Looks like an updated version of one provided a while back when they acquired HVC and were integrating in Max. Just seems to indicate that Bluegreen will move up into a HGV brand. Still not sure what that brand will be. HGV probably doesn't even know yet. I am sure they will employ some marketing agency and pay them lots of money to come up with something witty.

 

[nuwermj]

MAX access to Inventory in large part will be controlled by how many HGVC Members join MAX and Book through MAX; and, how many DRI members join MAX and book through MAX. The fewer that join/Book MAX the smaller the available Inventory.

Plus all new purchases (by new and current owners) are automatically enrolled in MAX (there is no opt-out option). This will grow MAX inventory over time.

 

[geist1223]

Unless you buy resell.

 

[GrayFal]

Plus all new purchases (by new and current owners) are automatically enrolled in MAX (there is no opt-out option). This will grow MAX inventory over time.

Retail purchases only. Not resale.

 

[Daytripz]

--In the press release, they talk about four co-branded resorts that BG had with Bass Pro Shops. Has anyone ever stayed at any of these? Are they nice? Do they offer different kinds of outside, action-oriented activities (say, kayak day trips, for example?) Those sound kind of intriguing.

I have not stayed at the Big Cedar Lodge, but we did go eat dinner there one night. It's gorgeous. Right on the lake. Great food. Charming restaurant. I would definitely return to stay there.

 

[GT75]

What I find interesting is that for this purchase by HGV of another TS system, we are not trying to "cherry-pick" BG resorts. I am not making a statement about the quality of BG resorts, because I really don't know anything about them. If you remember back when DRI was purchased, many of us evaluated those resorts and wanted to move several into HGVC. During this acquisition, we already understand what is going to happen (they will remain their own separate club and the Max program will be used as an exchange method between the various clubs).

 

[CalGalTraveler]

In many ways the way HGVC is approaching this seems fair. In other words, owners bought into each system for the locations and benefits (HGVC, DRI, BG). The owner still has full access to those systems with nothing (or little) taken away. If you want more (access to Hilton Honors, more locations) you pay to upgrade to MAX.

The challenge for the HGVC folks is that we already have the access to Hilton Honors and most of the inventory in these acquisitions AFAIK is lower quality rating (e.g. Hampton vs. HIlton Hotel quality). With maintenance fees continuing to rise, some of the best former Diamond resorts cost more in points at peak than many HGVC, yet the quality is not to HGVC quality as of yet. It is difficult to justify spending expensive maintenance fee points to go down a level in quality, when I know I can trade in the MVC/Vistana system or II with our Westin and get equivalent quality at the same locations offered by HGV and BG.

Although I haven't heard that BG deferred maintenance - many of the Hamptons are quite nice and I would stay there, but we are paying for HGVC points so will stick with those properties except on occasion when we need a specific location that HGVC does not provide.

 

[GT75]

In many ways the way HGVC is approaching this seems fair. In other words, you bought into the system for the locations and benefits (HGVC, DRI, BG). The owner still has full access to those systems with nothing taken away. If you want more (access to Hilton Honors, more locations) you pay to upgrade to MAX.

Well stated.

Although I haven't heard that BG deferred maintenance - many of the Hamptons are quite nice and I would stay there, but we are paying for HGVC points so will stick with those properties except on occasion when we need a specific location that HGVC does not provide.

It is similar to using HC points to book HGVC stays.

 

[CalGalTraveler]

Well stated.


It is similar to using HC points to book HGVC stays.

Well said! We never use our bHC points outside of NYC.

 

[Eric B]

In many ways the way HGVC is approaching this seems fair. In other words, owners bought into each system for the locations and benefits (HGVC, DRI, BG). The owner still has full access to those systems with nothing (or little) taken away. If you want more (access to Hilton Honors, more locations) you pay to upgrade to MAX.

The challenge for the HGVC folks is that we already have the access to Hilton Honors and most of the inventory in these acquisitions AFAIK is lower quality rating (e.g. Hampton vs. HIlton Hotel quality). With maintenance fees continuing to rise, some of the best former Diamond resorts cost more in points at peak than many HGVC, yet the quality is not to HGVC quality as of yet. It is difficult to justify spending expensive maintenance fee points to go down a level in quality, when I know I can trade in the MVC/Vistana system or II with our Westin and get equivalent quality at the same locations offered by HGV and BG.

Although I haven't heard that BG deferred maintenance - many of the Hamptons are quite nice and I would stay there, but we are paying for HGVC points so will stick with those properties except on occasion when we need a specific location that HGVC does not provide.

My perspective on the two acquisitions is that the purpose HGV had for purchasing DRI and BG was not to provide a greater inventory of resorts for owners of HGVC and bHC resorts to exchange into. Instead, the purpose was to add to their customer base for purchasing/upgrading ownerships with Max being an exchange mechanism for exposing owners in the DRI and BG systems to the ones up the ladder and tempt them to move up. I would expect that self-interest will drive HGV to make more developer inventory available to DRI and BG through Max or DEX in order to keep it "in the family" as opposed to the amount being made available to RCI. We'll see what happens there as things progress. I wouldn't expect that there will be a lot of exchanging down to DRI or BG from HGVC or bHC owners though there are a few spots that would make it worth it - I'm going to Cabo Azul this coming year for example, so there will be at least some flow that way. I would also consider some of the European resorts as options to use.

There is an opportunity cost for current HGVC owners, though. That is the potential for diminishing access during the Club season at bHC resorts where the opening date is the same as for the Max season. I'm not sure how much difference that will make, though. There will also be a diminishing availability in open season throughout the HGVC and bHC.

 

[CalGalTraveler]

@Eric B Good assessment. I believe HGVC is looking ahead in trying to expand their customer base to a younger demographic as a means to upsell aspirational VOIs. The HGV/DRI events and Bass Pro Shops also play into this trend since millennials want experiences over things.

HGVC owners might be considered a second priority for sales and upgrades because the value proposition is not there for MAX. I always sensed this with the DRI/HGV acquisition.

BTW...Cabo Azul is excellent - HGVC quality. Love how you can walk to restaurants in town and the art walk. We are returning next spring via an exchange.

 

[dayooper]

My perspective on the two acquisitions is that the purpose HGV had for purchasing DRI and BG was not to provide a greater inventory of resorts for owners of HGVC and bHC resorts to exchange into. Instead, the purpose was to add to their customer base for purchasing/upgrading ownerships with Max being an exchange mechanism for exposing owners in the DRI and BG systems to the ones up the ladder and tempt them to move up. I would expect that self-interest will drive HGV to make more developer inventory available to DRI and BG through Max or DEX in order to keep it "in the family" as opposed to the amount being made available to RCI. We'll see what happens there as things progress. I wouldn't expect that there will be a lot of exchanging down to DRI or BG from HGVC or bHC owners though there are a few spots that would make it worth it - I'm going to Cabo Azul this coming year for example, so there will be at least some flow that way. I would also consider some of the European resorts as options to use.

There is an opportunity cost for current HGVC owners, though. That is the potential for diminishing access during the Club season at bHC resorts where the opening date is the same as for the Max season. I'm not sure how much difference that will make, though. There will also be a diminishing availability in open season throughout the HGVC and bHC.

The bolded part is spot on. Mark Wang even mentioned this in the Q3 Earnings Call as a reason why BG was purchased. They want the lower buyin price that would be attractive to younger families. Then they would have a greater ownership span throughout their life. Many systems target older owners. If you go to the Grand Pacific page, it's littered with retired couples with their families around them. I think Mark Wang said in the call that 75% of BG owners were Gen X or younger. With the Bass Pro Shops and NASCAR partnerships, BG was/is courting a younger client. Once they purchase into BG, now they have several upgrades throughout their life to go up the ladder. Who knows if it will work?

I said this further upstream that I wonder if they will look for a new more luxurious system to purchase. Not sure what's out there, but would an international system like Anantara (all international resorts in Europe, Asia and South America) get some HGVC and bHC owners to bite? I know many are looking to travel internationally. I know MVC has quite a few of international resorts and they seem pretty popular.

I also think this consolidation HGVC is doing is probably the end of building new properties for the immediate future. Looks like we have what we have. Maybe if they can get a thrid party to front the money for construction like the SC properties, it might work, but I don't see a lot of that happening.

 

[Eric B]

The bolded part is spot on. Mark Wang even mentioned this in the Q3 Earnings Call as a reason why BG was purchased. They want the lower buyin price that would be attractive to younger families. Then they would have a greater ownership span throughout their life. Many systems target older owners. If you go to the Grand Pacific page, it's littered with retired couples with their families around them. I think Mark Wang said in the call that 75% of BG owners were Gen X or younger. With the Bass Pro Shops and NASCAR partnerships, BG was/is courting a younger client. Once they purchase into BG, now they have several upgrades throughout their life to go up the ladder. Who knows if it will work?

I said this further upstream that I wonder if they will look for a new more luxurious system to purchase. Not sure what's out there, but would an international system like Anantara (all international resorts in Europe, Asia and South America) get some HGVC and bHC owners to bite? I know many are looking to travel internationally. I know MVC has quite a few of international resorts and they seem pretty popular.

I also think this consolidation HGVC is doing is probably the end of building new properties for the immediate future. Looks like we have what we have. Maybe if they can get a thrid party to front the money for construction like the SC properties, it might work, but I don't see a lot of that happening.

We ran into several owners of Marriott Spanish resorts while in Costa Rica at the Marriott there - that would give them another customer base, too.

 

[muscae]

I think it would be awesome if HGVC bought Anatara! I would also like them to buy somerpointe. If the latter happens, I will be Centum! Come on Mark, do it!!!

 

[pedro47]

There are two threads with the same subject/topics by the same OP?

 

[dayooper]

There are two threads with the same subject/topics by the same OP?

The other post I made was about the Quarter 3 Earnings Call on Monday, Nov 6. There was much talk of the buyout in that transcript.