Acquisition News [Gold Key Resorts] [MERGED]

[tschwa2]

I think the $100 million dollar renovation at Beachwoods will still take place or at least some of it but instead of Gold key pumping that money into the resort (in addition to the Money brought in by the special assessment) DRI will put the entire amount on current owners and use that SA and additional SA fear to try to get another $10,000-$20,000 or so out of owners to convert to the club where they will be cushioned from the SA. Once the current owners get the property nice and shiny it will be easier to sell points to all the developer owned weeks and weeks that enter default due to the raised MF's and SA.

The other fear I have is that DRI won't consider non DRI owners as owners entitled to free ementies. I can see them charging for waterpark, paddle boats, and all the new amenities but offering them free to DRI owners.

Hope it won't be as bad as all that for at least the next several years. I just pushed buy it now on a summer week.

 

[harveyhaddixfan]

I'm hoping the same. I feel like this is the worst thing Gold Key could have ever done.

The 100 million includes building out the rest of the units originally planned. There are approx 83 units based on the number of owner & developer weeks mentioned in documents (4284). The $1681 (or $620 per year for 3 years due Jun 1 each year) special assessment for each week is right around $7,200,000.

Gold Key pledged $15 million as follows: 3.8 for welcome center & lobby, 4.95 for the indoor water park, 2.8 for the lounge & activities center, 1.1 for wellness/fitness center, 457k for outdoor pool, 851k for the north glen (outdoor area with tennis, basketball, playground, etc), 948k for the lake enhancements.

I'm pretty sure most of the work is done except for the water park. Since they completely gutted the building that had the indoor pool for the water park I'm sure they will finish it. It was slated to be done by the end of the year.

 

[glenmore]

We purchased a unit at Beachwoods when it was still Barrier a Island Kittyhawk and have it as RCI Points. We have no interest in DRI points

Will we be able to keep it in RCI Points?

 

[harveyhaddixfan]

All they have said is your ownership and exchange company will not change.

 

[avad88]

Unhappy

We purchased a unit at Beachwoods when it was still Barrier a Island Kittyhawk and have it as RCI Points. We have no interest in DRI points

Will we be able to keep it in RCI Points?

We also own at Beachwoods (8 years) with RCI points and have been happy until this year. We have used our points to stay at the resort some years and have traded with RCI other years. I was NOT thrilled when God Key bought the resort last year and raised our maintenance almost $200 per year and hit us with a huge assessment, but I was happy to see the improvements and was trying to think positive.
Now I AM SICK about Diamond Resorts buying it. I have read on TUG about DRI and can find almost nothing positive.
All the info we received from Gold Key says that our ownership will not change whether we are in weeks or points, but somehow I keep remembering that old saying about timeshare salesmen---"you can tell they are lying if their lips are moving".
Is there anything positive about DRI and can we avoid joining their DRI points program or membership?

 

[dwojo]

DRI has high maintenance fees but they take good care of the properties that they manage. My wife and I have not stayed at a DRI resort they have managed for more than a year that has been being upgraded or already upgraded. We have been treated very well at the resorts as well.

 

[johnrsrq]

We also own at Beachwoods (8 years) with RCI points and have been happy until this year. We have used our points to stay at the resort some years and have traded with RCI other years. I was NOT thrilled when God Key bought the resort last year and raised our maintenance almost $200 per year and hit us with a huge assessment, but I was happy to see the improvements and was trying to think positive.
Now I AM SICK about Diamond Resorts buying it. I have read on TUG about DRI and can find almost nothing positive.
All the info we received from Gold Key says that our ownership will not change whether we are in weeks or points, but somehow I keep remembering that old saying about timeshare salesmen---"you can tell they are lying if their lips are moving".
Is there anything positive about DRI and can we avoid joining their DRI points program or membership?

I didn't join (actually was very surprised I did) DRI's club until after approx 5 years elapsed since they took over mgmt of my home resort of two weeks of my large three bedroom suites - one mile from Disney. The RCI exchanges still worked for those years, I could still kick DRI out and go back to RCI exchanges to this day. I am still deeded to those weeks. I paid an extra to the club and acquired some points- that's the expensive part. However, my 2 full weeks now allow me to get close to 4-6 weeks depending on premium time and location. The voracious stories for some are true but they lead back to the finances of the resort(s) that were taken over. Many of their resorts are very nice although reading in TUG you would never no it. Their fees are not inordinately higher for my experience and in fact, when I have compared to Marriott's Grande Vista in Orlando MF's vrs MF's and II trading in addition to other nuance differences, I happen to fair better by cash $265 per week per year. The club fees and their points are (3k developer points 0.16cents, my week points @0.10 cents) plus couple hundred bucks for other bs.

So, basically, you don't have to be sick if your resort and its finances were ok up to this point. You keep it as is. You study it over time. There are many folks that like me and potentially you, have entered by way of legacy weeks. I would never fork over the kinds of money that all the systems are asking for at retail.

Good luck.

 

[harveyhaddixfan]

I wasn't too sure about Gold Key at first either until I heard all the plans. And they didn't raise the maintenance fees almost $200. They went from $625 in 2014 to $710 in 2015. I'm more worried about DRI trying to raise them to over $900.

 

[nuwermj]

The other downside for shoulder and off season gold key owners who used priority with II to upgrade into a higher season. Before you were only competing with owners at the 5 Gold Key during the priority period in II. Now you may be competing with every DRI owner for that inventory, if DRI even has priority period with II.

Diamond will be required to maintain two inventories. The current unsold inventory will, as it is sold, be placed into one of DRI's trust funds. Also, the deeds from current weeks owners who convert to Diamond points will be transferred into the trust. DRI's Club members will have access only to the intervals in the trust fund. Current owners will continue to have access to the intervals not held in the trust fund or not owned directly by DRI as unsold units.

The primary risk to deeded owners is that too many other deeded owners will convert to trust ownership, with their deeds then being moved into the DRI controlled trust inventory. This will reduce the inventory of weekly intervals available to the remaining weeks owners.

 

[tschwa2]

Since all of the gold key properties were sold as fixed weeks that shouldn't be a problem. Many were sold as floating units within a view category. It would not be nice if DRI decided to give the better views (higher floors) within a view category to DRI members and the less desirable units to the deeded owners. It will also mean the developer dumps into II will probably go through the club before making its way into II and the better shoulder weeks won't make it at all.

 

[nuwermj]

There is no doubt that DRI will try to squeeze current owners. Some of your worries expressed in this thread will come to pass. DRI makes money first by selling points (about 60% of their net revenue). The other 40% comes from managing resorts (fees charged to HOA) and services to their trust fund members (reservations, billing, etc.). Converting fixed week owners will earn big money and it will be high pressure sales.

Be that as it may, my experience with DRI room assignments is that they are left to the local resort managements. And the Hospitality and Management services division is actually very reasonable to work with. It's the sales division that is so bad.

Edit:

The other fear I have is that DRI won't consider non DRI owners as owners entitled to free ementies. I can see them charging for waterpark, paddle boats, and all the new amenities but offering them free to DRI owners.

Do you think DRI can do this successfully? I thought rules governing amenities at a resort were up to the HOA. Even if DRI's votes control the HOA, shouldn't the policy apply to all owners? At the HOA level there are only owners and guests, or so that is my understanding of such things.

 

[nuwermj]

In my experience, the annual cost of ownership for fixed week units is significantly lower than the annual cost of point ownerships. I have seen in resale ads that annual maintenance fees at Ocean Beach Club are $864 for a 2-bedroom unit and a 2-bedroom at Turtle Cay is $907. For those wishing to exchange their week, the annual membership for an exchange company like II and the exchange fee must be added to estimate the full cost. Still, Diamond is considerably more expensive. The annual cost of points needed to reserve an average
[*] 2-bedroom unit for seven nights is about $1500. This does not include the annual fee for The Club dues, which add another $225.


[*] I averaged “high” demand points (for a 2-bedroom) at Polo Towers, Las Vegas NV; Lake Tahoe Vacation Resort, South Shore CA; The Suites at Fall Creek, Branson MO; The Ridge on Sedona Golf, Sedona AZ; Grande Villas Resort, Orlando FL; and Daytona Beach Regency, Daytona FL.

I also compared these five DRI resorts with Wyndham resorts in the same locations. For Windham I used the Club Wyndham Access rate (i.e. Wyndham's points system that is most like the DRI system). The average MF for DRI is $1517, while the Wyndham average is $1086. (The Wyndham resorts are: Grand Desert, Las Vegas NV; South Shore, Lake Tahoe NV (side); Branson at The Falls, Branson MO; Wyndham Sedona, Sedona AZ; Cypress Palms, Orlando FL; and Ocean Walk, Daytona FL)

 

[Sugarcubesea]

I really hope starwood does not sell to DRI

 

[Maple_Leaf]

I don't think so...

The primary risk to deeded owners is that too many other deeded owners will convert to trust ownership, with their deeds then being moved into the DRI controlled trust inventory. This will reduce the inventory of weekly intervals available to the remaining weeks owners.

I doubt it. My understanding is that Beachwoods weeks are fixed so a fixed week owner will always have access to their deeded week. DRI may use their swarms of management lackeys and sales weasels to successfully pressure other owners into converting their fixed weeks into Confederate money but that won't affect the availability of your week. What DRI will do is take over the HOA to amend the by-laws, adjust the maintenance fees and levy special assessments to further their corporate interests. That's your primary risk.

 

[nuwermj]

... My understanding is that Beachwoods weeks are fixed so a fixed week owner will always have access to their deeded week.

Yes, of course. But my reply to tschwa2 was in relation to fixed week owners loosing access to exchanges for weeks that are not the deeded week. That is, the "off season gold key owners who used priority with II to upgrade into a higher season."

 

[nuwermj]

What DRI will do is take over the HOA to amend the by-laws, adjust the maintenance fees and levy special assessments to further their corporate interests. That's your primary risk.

This is not a risk, this is a certainty. There will be no getting around higher maintenance fees, short of liquidating the deed. Given that a Gold Key owners does not sell, then the key question is keep the deed or convert to DRI points.

For what it worth, one advantage of points is that special assessments at one resort are spread over all the trust fund members. This might not be important to some owners, it might be to others.

 

[avad88]

I wasn't too sure about Gold Key at first either until I heard all the plans. And they didn't raise the maintenance fees almost $200. They went from $625 in 2014 to $710 in 2015. I'm more worried about DRI trying to raise them to over $900.

Sorry, you are right--I meant to say "they raised maintenance fees almost $100", in fact it was $85, but still the jump was more than we have ever experienced in our 8 years of ownership. In addition to the big special assessment at the same time, it hit our retirement budget hard.
Thanks for the insights, everyone. For now, I am assuming our RCI points account doesn't change with the takeover.
I will take johnrsrq's advice and not do anything rash, but try to stay informed and hope our maintenance doesn't go out of sight!

 

[johnrsrq]

In my experience, the annual cost of ownership for fixed week units is significantly lower than the annual cost of point ownerships. I have seen in resale ads that annual maintenance fees at Ocean Beach Club are $864 for a 2-bedroom unit and a 2-bedroom at Turtle Cay is $907. For those wishing to exchange their week, the annual membership for an exchange company like II and the exchange fee must be added to estimate the full cost. Still, Diamond is considerably more expensive. The annual cost of points needed to reserve an average
[*] 2-bedroom unit for seven nights is about $1500. This does not include the annual fee for The Club dues, which add another $225.


[*] I averaged “high” demand points (for a 2-bedroom) at Polo Towers, Las Vegas NV; Lake Tahoe Vacation Resort, South Shore CA; The Suites at Fall Creek, Branson MO; The Ridge on Sedona Golf, Sedona AZ; Grande Villas Resort, Orlando FL; and Daytona Beach Regency, Daytona FL.

I also compared these five DRI resorts with Wyndham resorts in the same locations. For Windham I used the Club Wyndham Access rate (i.e. Wyndham's points system that is most like the DRI system). The average MF for DRI is $1517, while the Wyndham average is $1086. (The Wyndham resorts are: Grand Desert, Las Vegas NV; South Shore, Lake Tahoe NV (side); Branson at The Falls, Branson MO; Wyndham Sedona, Sedona AZ; Cypress Palms, Orlando FL; and Ocean Walk, Daytona FL)

Well, the MF's for the DRI Grand Beach Orlando 3 bedroom units are $955. They command more exchanges as they can be split. Maybe those DRI resorts referenced above were not managed as well by their respective HOA. All I can share is my experience. The resale points I have cost me $0 and the MF's are $.16. The non resale account cost .12 all in.

Maybe Gold Key is financially in great shape. It would be nice if the current Beachwoods/Gold Key owners could share a pdf of last years/prior years budgets.

 

[harveyhaddixfan]

I'd be happy to do that when I get home to my PC!

 

[nuwermj]

Well, the MF's for the DRI Grand Beach Orlando 3 bedroom units are $955. They command more exchanges as they can be split. Maybe those DRI resorts referenced above were not managed as well by their respective HOA. All I can share is my experience. The resale points I have cost me $0 and the MF's are $.16. The non resale account cost .12 all in.

A 3-bedroom unit at Grand Beach in the "high" season, the summer months, requires 10,500 points. At $0.16 a point, that is $1680. I think this reinforces my point: the cost of ownership for fixed weeks units is significantly lower than the cost of point ownership. Am I missing something?

 

[harveyhaddixfan]

actually, here is a screenshot of what I had.

 

[harveyhaddixfan]

Wrong one. This is 1 of 2 I was looking for.

 

[harveyhaddixfan]

2 of 2

 

[johnrsrq]

A 3-bedroom unit at Grand Beach in the "high" season, the summer months, requires 10,500 points. At $0.16 a point, that is $1680. I think this reinforces my point: the cost of ownership for fixed weeks units is significantly lower than the cost of point ownership. Am I missing something?

no doubt about that. My week costs me $955 annual (up from 600 in 1995). If I withdrew my week from the club, I could use my week there for that total. I could also open an rci/II/DAE account and deposit my for exchange purposes if I did not want to stay there. Being in the club however, I still pay on my HOA fee of $955 and mf's that are attributable to the initial "developer" point I purchased to get into the club, as well as another $255 for the club fee. So I get a second bill for 3,000 points @ .16=480 +250= $730.

Why did I decide to do that. I can take as little 2 to at least 7 day reservations, borrow future points for current needs, mid week check in's, For me, it was being able to get more weeks and more places. I also use 13 month window reservation for prime locations. I do take advantage of the discounts 14 day/ 60 windows for very cheap stays. That's it , not a DRI sales person here... just why it works for me. flexibility. more time and more places.

 

[johnrsrq]

I'd be happy to do that when I get home to my PC!

thank you. I will study. At first glance the 2015 current fees look subsidized by 50% (says 45%) and the real jewels are from July 1 through the end of August. (my family just sold our NJ oceanfront house in of 47 yrs. and last 10 we rented out- $6,500 week). I would not expect Diamond to poorly treat the owners of those expensive weeks and if anyone of them were to join the "club", there'd better be a very large allocation and accommodation.

just my current opinion. will continue to follow. wish you all the best.