Recent Destination Club News

[TarheelTraveler]

How's the food?

 

[wilkes591]

Here is the June 4 filing:
http://www.sec.gov/Archives/edgar/data/1402364/000114420410031992/v187261_s1.htm


There is an amortization payment of $10.3 million due to CapitalSource on June 30. The loan was amended on April 19, 2010 with this amortization payment due, so CapitalSource won't be too happy or flexible if there is a default 75 days later.

Any word of how UE will pay that or whether they have been able to buy another extension? They only had $4.7 million in cash as of 3/31, of which $2.9 million was restricted (Capital Source requires an interest reserve). There is no discussion in the S-1 as to how the June 30 amortization payment is to be made or any arrangements to extend the due date.

Here is the part you left out from the 10Q:

"However, the maximum loan amount was reduced to $95,093. In addition, revised minimum loan amortization amounts have been established that require cumulative amortization of $10,300 by June 30, 2010 and $17,800 by December 31, 2010, with the remaining balance due on April 30, 2011 if we do not elect an extension. If we exercise the first one-year extension, then cumulative amortization must be $22,800 by June 30, 2011 and $25,300 by December 31, 2011, with the remaining balance due on April 30, 2012 if we do not exercise the second extension. If we exercise the second one-year extension, then cumulative amortization must be $27,800 by June 30, 2012 and $30,300 by December 31, 2012, with the remaining balance due by April 30, 2013."

So, UE has extensions until 2013. CapitalSource will let them SELL the properties and wind down. If you are a member in good standing you know which ones are already pending. It is very sad, what management is taking as salary and benefits and not even trying to save the company.

Keep on saying the end is near, eventually U will be right. As for 6/30/2010, please learn how to read a Financial Statement. This process will take a few years, CapitalSource is not going to sell these properties in FORECLOSURE. They will let the member's pay the dues, maintain the properties, and UE will eventually be a club of leased properties. Once Management and CapitalSource has squeezed everything out of the existing Real Estate, then you can say the end is near.

Until then safe travels!

 

[AKTHUE]

revised minimum loan amortization amounts have been established that require cumulative amortization of $10,300 by June 30, 2010 and $17,800 by December 31, 2010, with the remaining balance due on April 30, 2011 if we do not elect an extension. If we exercise the first one-year extension, then cumulative amortization must be $22,800 by June 30, 2011 and $25,300 by December 31, 2011, with the remaining balance due on April 30, 2012 if we do not exercise the second extension. If we exercise the second one-year extension, then cumulative amortization must be $27,800 by June 30, 2012 and $30,300 by December 31, 2012, with the remaining balance due by April 30, 2013.
It is very sad, what management is taking as salary and benefits and not even trying to save the company.

I can read statements but I skipped the word cumulative.

Do you have any idea how much of the $10.3 million cumulatively due June 30 has been paid down? The S-1 only lists about 8 or so properties as held for sale.

Agree on what management is paying themselves.

 

[travelguy]

From UE E-mail today (6/16/10):

MEMBERS ASKED. WE LISTENED.
Our Members want more residence availability to vacation where they want, when they want. Ultimate Escapes has responded by adding access to 27 NEW RESIDENCES and TWO NEW DESTINATIONS to our already robust club residence portfolio.

Members will see increased availability through an expanded selection of residences in the Premiere, Signature and Elite Clubs. New residences are located at classic ski resorts such as Telluride, Lake Tahoe and Beaver Creek, and at popular beach destinations including Turks & Caicos, Key West and St. Thomas.

Members will also have the opportunity to vacation in two new exciting destinations: Clearwater Beach, Fla., and San Diego, Calif. Each of these additional destinations will meet the high-standards of luxury, amenities and service that Ultimate Escapes is committed to providing its Members.

 

[wilkes591]

I can read statements but I skipped the word cumulative.

Do you have any idea how much of the $10.3 million cumulatively due June 30 has been paid down? The S-1 only lists about 8 or so properties as held for sale.

Agree on what management is paying themselves.

Nope, no more then any other member. I just know, like everyone else that UE is selling the properties and Capitalsource is getting the cash at closing. CapitalSource is happy to let UE do this and Management is happy doing this and collecting their salaries.

Whatever it is UE has the extensions, which is what really matters and also skipped. Any way even if UE did not, what is CapitalSource going to do? The properties sold via FORCED sales would get pennies on the dollar. This is an orderly wind down with management cooperating with Capitalsource, if UE needs more time to sell the properties, they will get it.

It will take about two years to sell all the "good" properties, then when only the distressed property is left like Lake Las Vegas and others, the end will be near.

 

[wilkes591]

From UE E-mail today (6/16/10):

MEMBERS ASKED. WE LISTENED.
Our Members want more residence availability to vacation where they want, when they want. Ultimate Escapes has responded by adding access to 27 NEW RESIDENCES and TWO NEW DESTINATIONS to our already robust club residence portfolio.

Members will see increased availability through an expanded selection of residences in the Premiere, Signature and Elite Clubs. New residences are located at classic ski resorts such as Telluride, Lake Tahoe and Beaver Creek, and at popular beach destinations including Turks & Caicos, Key West and St. Thomas.

This is the Financial Fantasy Island that management is living on! UE has just enough cash on hand to meet current obligations. Let's go out and hire more executive staff like a COO while we got two CEO's and many another execs. Now let's pretend we have a bunch of 4 month seasonal leases and let the member make reservations, BRILLANT. UE is taking reservations, but does not have the leased properties yet. They are all going to be short term leases increasing operating expense and decreasing cash flow. Perhaps the end is closer then I think.

 

[NeilGoBlue]

How's the food?

It was good. (not phenomenal) Very expensive. But we were blown away by the architecture and the design of the resort.

 

[AKTHUE]

This is the Financial Fantasy Island that management is living on! UE has just enough cash on hand to meet current obligations. Let's go out and hire more executive staff like a COO while we got two CEO's and many another execs. Now let's pretend we have a bunch of 4 month seasonal leases and let the member make reservations, BRILLANT. UE is taking reservations, but does not have the leased properties yet. They are all going to be short term leases increasing operating expense and decreasing cash flow. Perhaps the end is closer then I think.

Perhaps the announcement is intended to encourage a batch of members to pay/renew dues, or buy more advance reservations and/or to distract from the reality of sales of owned properties.

 

[UnhappyInCT]

This is the Financial Fantasy Island that management is living on! UE has just enough cash on hand to meet current obligations. Let's go out and hire more executive staff like a COO while we got two CEO's and many another execs. Now let's pretend we have a bunch of 4 month seasonal leases and let the member make reservations, BRILLANT. UE is taking reservations, but does not have the leased properties yet. They are all going to be short term leases increasing operating expense and decreasing cash flow. Perhaps the end is closer then I think.

This is exactly what happened during Tanner & Haley's final days / months / years. Unfortunately for me there were no publicly available financial statements and no bulletin boards like this one to scare me away from what turned out to be an investment in a ponzi scheme.

 

[travelguy]

This is exactly what happened during Tanner & Haley's final days / months / years. Unfortunately for me there were no publicly available financial statements and no bulletin boards like this one to scare me away from what turned out to be an investment in a ponzi scheme.

Just imagine what the action would be like on DC4MS if it was still around!

 

[TarheelTraveler]

Just imagine what the action would be like on DC4MS if it was still around!

While the debates and dialogue got ridiculous at points, it was definitely a heck of a lot more interesting. At least the UE comments keep things somewhat interesting for better or for worse.

Interesting article which makes some really good points:

http://www.travolution.co.uk/articl...s-fractional-ownership-the-new-timeshare.html

"Another alternative might start taking shape over the next few years, one which both tour operators and agents might want to think about engaging with.

Last week in this column on I mentioned Geoffrey Kent of Abercrombie and Kent's successful Residence Club model. In passing I mentioned that business was brisk but I probably understated its importance - for Mr Kent this is a big part of his future.

According to the Abercrombie and Kent founder, as people come out of this recession they are "analysing seriously their second homes" and opting for a pooled or fractional ownership model a la his destination Club.

It is by far his "hottest and biggest" product, and apparently uptake of the $300,000-plus service in the first few months of 2010 has already exceeded the total for 2009.

This buzz is echoed by one of Mr Kent's former business partners, David Rogers at a company called Rocksure.

The travel industry veteran is now pioneering a fascinating model which involves wealthy types such as accountants, lawyers and CFOs investing between £50,000 and £200,000 in a range of property syndicates that then buy into a pool of luxury, serviced villas around the world.

This equity based model is similar to The Hideaways Club but marketed at a slightly more humble crowd, and with a clearer syndicate ownership structure.

Moving further down the wealth ladder we'll also see a profusion of fractional ownership structures emerge in the next few months. Some will be based on something approaching the old timeshare model, others the Rocksure ownership model, and yet more closer to the Holiday Property Bond model, where there's no direct link between the investment and the properties but the backing of a general insurance bond (business is booming here as well).

Middle class consumers want some choice in the range of properties they can access, as well as proper service when they get there, plus some sense that this is an investment in an expensive product which isn't entirely being flushed down the drain.

The fractional ownership sector is certainly limbering up to supply this demand, in part because the fears surrounding the old timeshare model are fast fading away but also because the real estate industry now has a glut of properties it is looking to shift using innovative new financial models.

The pitch is also increasingly simple - give us between £20,000 and £50,000 and we'll give you access to a range of serviced, well maintained properties in which you also have some investment potential.

The actual model might be a hotel club or the Rocksure full equity ownership model - both have a place but the missing ingredient is the channel. Who's going to sell this product?

Step forward the existing travel industry chains and operators. Many were undoubtedly burnt by the time-share disasters of old but a huge opportunity awaits for those with the right brand, and the right product set.

Provide me with a model where my accommodation money is not seen as a wasted expenditure but a potential investment for the future, and give me excellent service and I'd suggest there are hundreds of thousands of potential customers out there, many flushed with cash from having sold their second homes...."

I tend to agree with the author that there is a serious need for an equity destination club from a major travel player in the timeshare/step up from timeshare segment ($20-100K rather than in the $200K-400K space). Like HCC but with major backing and actual member ownership in the properties.

Intrawest had the potential and interest in doing this, but seemed to get waylayed by their own debt and financial issues.

UE has the three levels, which in my opinion makes a lot of sense. Get people in the door at a lower price and then they'll likely upgrade once they realize how enjoyable the travel is, but obviously, UE is non-equity and has had some serious issues which would certainly discourage a member from plunking more money down.

Marriott seems to be moving in the equity DC direction with their supposedly soon-to-be-announced points based system and a trust ownership concept for the timeshares similar to the Ritz-Carlton DC model that they released last year. Best part of that model for the traveler in my opinion is the ability to trade up or down based on need and type of vacation (from a hotel room at a Fairfield to a timeshare condo to a Ritz-Carlton hotel room or condo). But it's also great for Marriott, as you're much more likely to use them for all of your lodging needs, instead of using a competitor like Hilton. Of course, the devil will be in the details, and we'll see how it gets implemented for existing and future owners.

 

[Kagehitokiri2]

Q on the web >

http://twitter.com/quintessclub
http://www.flickr.com/photos/quintesslrw/
http://www.facebook.com/QuintessClub
http://www.youtube.com/user/QuintessLRW
http://quintess.com/membership/m910

8K ft2 @ meadowood napa

 

[Kagehitokiri2]

LTTravel was always raving about avis chairman as ER benefit.

20 available for $1200 and lasts through july 2011 >
https://dailygetaways.discoveramerica.com/OfferDetails.aspx?pid=3dbb1B2b-2aa1-478b-bc36-5bbd838f5c88

also, 50% off $50/$100/$150 alamo rental
https://dailygetaways.discoveramerica.com/OfferDetails.aspx?pid=33f12042-607a-4927-a9e6-545fca5dc0c8

https://dailygetaways.discoveramerica.com/Default.aspx
https://dailygetaways.discoveramerica.com/OffersList.aspx

 

[TarheelTraveler]

Marriott seems to be moving in the equity DC direction with their supposedly soon-to-be-announced points based system and a trust ownership concept for the timeshares similar to the Ritz-Carlton DC model that they released last year. Best part of that model for the traveler in my opinion is the ability to trade up or down based on need and type of vacation (from a hotel room at a Fairfield to a timeshare condo to a Ritz-Carlton hotel room or condo). But it's also great for Marriott, as you're much more likely to use them for all of your lodging needs, instead of using a competitor like Hilton. Of course, the devil will be in the details, and we'll see how it gets implemented for existing and future owners.

Anyone read enough of the Marriott threads to know whether under their new points program, you can get into the Ritz-Carltons from the timeshares, or conversely from the RC DC into the timeshares?

 

[Kagehitokiri2]

regardless of anything else, that would kill RC sales, and marriott is not that stupid (moving to points etc)

 

[TarheelTraveler]

regardless of anything else, that would kill RC sales, and marriott is not that stupid (moving to points etc)

I'm not sure that I follow you. So long as the pricing of the points is correct, it seems like you could allow that flexibility (for example, you might have to trade in 3 weeks at a Marriott timeshare to get the Maui RC for 1 week, but it seems like you could make it work). I know that I wouldn't mind having the flexibility in staying on occasion at a Marriott instead of an RC, if I were an RC DC member, particularly if the Marriott were in a location where there wasn't an RC. Would your concern be availability in the RC DC? I guess you'd need demand in both directions, and you'd have to watch and manage things pretty closely to make it work.

 

[Kagehitokiri2]

you cant even begin to compare TS maintenance fees with DC fees. 3 > 1 doesnt even come close.

although like you i have not looked at exactly how theyre doing point pricing for new sales, or what theyre doing with current members.

additionally the DC is just unsold fractional inventory. i mean, theoretically, what happens if they sell it..? some very very strange stuff.

http://destinationclubnews.com/News_Changes_Atop_The_Oyster_Circle_Executive_Tree.php
oyster CEO leaves company.

 

[Desties]

A&K Price Hike

Is the industry gradually turning the corner?

A&K will apparently be inching its prices higher for new members next month.

Is it the real deal or just a way to smoke out prospective leads?

 

[TarheelTraveler]

A&K will apparently be inching its prices higher for new members next month.

Is it the real deal or just a way to smoke out prospective leads?

I think both. In other words, they committed to raise the price on that date (and not extend). And price increases have been used by every DC across the industry to get people to commit. It seems like you particularly want to use that if you've gotten a bunch of trial members to give them an incentive to become equity members.

 

[Kagehitokiri2]

am i the only one that finds the "inch" purely symbolic?

 

[TarheelTraveler]

It's definitely not a big increase. I personally thought the 40% discount was too big to begin with, but got OK with it given A&K dropped its commission significantly. The new pricing is still pretty darn good, and I'm not sure how much you can raise prices in this kind of economic environment.

 

[Kagehitokiri2]

It's definitely not a big increase. I personally thought the 40% discount was too big to begin with, but got OK with it given A&K dropped its commission significantly. The new pricing is still pretty darn good, and I'm not sure how much you can raise prices in this kind of economic environment.

hmm, so its also about "right sizing" the discount. have these things been part of discussion with members?

 

[TarheelTraveler]

hmm, so its also about "right sizing" the discount. have these things been part of discussion with members?

I know a few members including myself expressed to management the thought that the discount was too big, but I got comfortable with it given the commission reduction piece which they did not have to do at all (but did for the members). I feel like the pricing in July is probably more reflective of the real estate market.

 

[Kagehitokiri2]

http://destinationclubnews.com/News_Equity_Estates_President_Adam_Capes_Appears_On_Fox_Business.php

Adam Capes, President of Equity Estates, appeared on Fox Business on Wednesday of this week to discuss his equity destination club, comparing the structure to one of the most widely known vacation options available: timeshares.

"I think I get what you are doing. It is kind of like timesharing, isn't it?" began Host David Asman.

"It's a little different from timesharing, David, because our homes are private villas and residences in some of the most sought after destinations around the world and generally $3 million homes on average," Capes replied. "Our owner members can go to the properties really whenever they want based on availability, which is very high in our portfolio."

Fox Business goes as far as describing the short interview as "Equity Estates President Adam Capes on how he is revamping the idea of a timeshare."

"Our owner members have made an investment that is a small fraction of the price of what they would pay if they were buying any one of these individual homes. The annual dues they pay are a shared cost of the expenses of maintaining these homes and all the services we offer."

may 17 article
http://smallbusiness.m.foxbusiness.com/quickPage.html?page=20967&content=38556861&pageNum=-1

on jun 23 about 90 seconds
http://video.foxbusiness.com/v/4250961/profitable-getaways/
at least they got their name out there. as usual for EE no mention of "destination club" which im not sure about.

 

[Desties]

EE on FOX

Any publicity is good publicty, so kudos to EE.

I wouldn't read too much into the lack of "destination club" usage. It was a short segment, and I'm sure Capes would have gotten to it, in time.

The brevity of the segment likely kept him from clarifying the investment-related nature of the initial deposit -- the real winner in the equity club model -- because the segment made it seem as if it's a non-recoverable cost.