Don't forget VRBO this holiday season...

[Bourne]

for those who have joined clubs, how transparent are they in terms of their financials?

I can vouch for HCC, PE and ER. All three of them were very open about it.

I could not justify ER even though I could afford it. Between PE and HCC, I liked the quality of HCC a bit better than PE. However, HCC membership was a bigger risk because that had about 14 properties.

Would I put down 400K for the likes of My Global Playground. Never. For that money, I'll go with ER. At 25K, I can take a calculated risk with the likes of HCC. Then again, I will not touch DHH for the same amount.

Due diligence and level of risk.

 

[pwrshift]

Naturally, buying direct means you pay more than resale on timeshares. That's a given because you have to pay the salesmen their $400k a year in commissions ... and the buyer incentives like Marriott Rewards.

I suspect you all feel the salesmen of DC's don't get paid those huge TS commissions as that's one thing that hasn't been speculated on this forum yet.

However, on Ebay you can pick up a Marriott Grand Ocean oceanfront TS for $24,000 resale which probably sold to the original buyer for less than $20k and included enough points for a 'world trip for two' back then. Same with Marriott Ocean Pointe and others. A Marriott Manor Club (MMC) week can be had for $8500 on Ebay.

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&rd=1&item=270163676675&ssPageName=STRK:MEWA:IT&ih=017

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&rd=1&item=290164527149&ssPageName=STRK:MEWA:IT&ih=019


So if you bought any of those resale today on Ebay you could sell them tomorrow on Ebay, in 7 days, for very close to what you paid, maybe more. I don't know about the lesser brands like Hilton TS, but there's a big Ebay demand for Marriott resales ... so, the knowledgeable TS buyer/seller can usually get 100% of his money in 7 days.

Can the DC buyer do that? Can he even sell his membership to another party?

Conversely, if you buy top of the line DC like ER for $400,000 and resign, you'll lose $80,000 when they decide to pay you out for the free loan of your money to build their shareholder equity ... and there is no 100% guarantee or timeframe! For just what you lose on that deal, you could buy up to 10 MMC weeks and stay 10 weeks in a row if you wanted and have 60 free rounds of golf on their 3 golf courses.

Correct me if I'm wrong, but none of you have any real inside stats of the actual financial status of any non-equity-based DC, and financial speculation otherwise is misleading to a novice buyer. ER could be going down too and only Steve Case and his buddies would know for sure until it was leaked to the public ... and then what would you think about the future of DC's? And where would the remaining DC's find the new customers in order to pay you when you wanted out too?

Brian

...Bottom line, I am looking at a 33 - 50% loss on the timeshare. An option that I have a DEED for. Does it buy me anything...NO...

The point I am making is that I will gladly take the 20% ding with my DC membership and a 2-1 out option. Correct me, but I have had a 100% chance of getting 80% back if my timeshare was a DC.
.

 

[Kagehitokiri]

Can he even sell his membership to another party?

yes, if he is a member of DHH. they are the first to have such a model.

ER could be going down

ER is a profit machine, because of their model of buying in bulk.

I suspect you all feel the salesmen of DC's don't get paid those huge TS commissions as that's one thing that hasn't been speculated on this forum yet.

relevance?

 

[pwrshift]

But did you actually see their corporate financial statements like you would see for a public NYSE corporation ... or were they just trying to sell you something?

I can vouch for HCC, PE and ER. All three of them were very open about it.

.

 

[Kagehitokiri]

plenty of DCs have indepedent audits. doesnt DCA require it?

for example, i believe it was TarheelTraveler who said he cant discuss any details because of an NDA.

 

[Steamboat Bill]

We are at an impasse

We seem to be at a proverbial impasse on the value of joining a Destination Clubs with "PerryM" and "pwrshift" and the current TUG members that are members of a DC.

I fully enjoy debating the pros and cons of joining a DC and comparing a DC to TS, condo-hotels, fractional, stocks, bonds, cash, VRBO, etc. but sometimes it seems like these discussions take on a life of their own and nothing ever gets resolved.

I personally think PerryM is happiest owning a traditional timeshare and spending his time "trying" to beat the system and trading cheap Worldmark credits for Marriott ski weeks or Hawaii beachfront weeks. In fact, I will delete the word "trying" and simply state that he "regularly" beats the system. PerryM is a "timeshare trading pro". I also think Perry will be able to successfully rent $1m+ homes from VRBO and create a "PerryM DC style club" for no money down and will probably spend about $400 per night in rentals. What most TUGers fail to realize is that Perry has spend years perfecting his system and to learn it or reproduce it, is easier said than done. Perhaps Perry will join a DC someday, but I doubt it. I don't think it comes down to money, it comes down to the "art of the trade" and Perry is the timeshare equivalent of Donald Trump.

I personally think pwrshift is happy owning his Marriott BeachPlace timeshares as he obviously like to spend a month or two there. Hopefully, we will meet at Hooters when he in in town. Because pwrshift does not have a family and does not need 3-4 room properties, a DC is not really a good option for him. I do, however, think a HCC corporate membership would be a good deal for him and his company, but I am not privy to the size or revenue of his corporation.

For all the "non-traditional Interval Ownership" regulars that are members of DC's.....I have never seen such a happy bunch of travelers. I can't even begin to describe all the horror stories I have heard about timeshares and I have not heard one single complaint from a DC member....that alone is pretty impressive.

Now on to cocktail talks in Boca Raton. If I am ever brave enough to bring up the topic of timeshares, people look at me like I am a two-headed alien from Mars and quickly change the subject. If I bring up the topic of Destination Clubs, I seem to attract a crowd of people that are very interested in the concept. I find comparing destination clubs to joining a golf club to be the best analogy for DC newbies.

 

[TarheelTraveler]

I'm pretty sure the DCA does require an independent financial audit. Most of the DCs do so (including Crescendo). Most also verify through the audit process that they are meeting whatever covenants they have established, such as a net asset test (sufficient assets to meet the deposit obligations).

I agree with SteamboatBill that DC members are a satisfied bunch. You never hear complaints. Compare that to what people say about timeshares and any other product that is debated on an internet forum. It's not the right product for everyone, but it has struck a chord with a large number of very satisfied consumers. I have seen a number of member survey results from various DCs including Lusso, Quintess, Crescendo and others, and post-trip very satisfied feedback is in the 90's across the board (typically approaching 100%). This is from what I would think would be a pretty demanding set of consumers. Again compare this to any other product, particularly a travel product.

 

[Bourne]

Naturally, buying direct means you pay more than resale on timeshares. That's a given because you have to pay the salesmen their $400k a year in commissions ... and the buyer incentives like Marriott Rewards.

I suspect you all feel the salesmen of DC's don't get paid those huge TS commissions as that's one thing that hasn't been speculated on this forum yet.

However, on Ebay you can pick up a Marriott Grand Ocean oceanfront TS for $24,000 resale which probably sold to the original buyer for less than $20k and included enough points for a 'world trip for two' back then. Same with Marriott Ocean Pointe and others. A Marriott Manor Club (MMC) week can be had for $8500 on Ebay.

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&rd=1&item=270163676675&ssPageName=STRK:MEWA:IT&ih=017

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&rd=1&item=290164527149&ssPageName=STRK:MEWA:IT&ih=019


So if you bought any of those resale today on Ebay you could sell them tomorrow on Ebay, in 7 days, for very close to what you paid, maybe more. I don't know about the lesser brands like Hilton TS, but there's a big Ebay demand for Marriott resales ... so, the knowledgeable TS buyer/seller can usually get 100% of his money in 7 days.

Can the DC buyer do that? Can he even sell his membership to another party?

Conversely, if you buy top of the line DC like ER for $400,000 and resign, you'll lose $80,000 when they decide to pay you out for the free loan of your money to build their shareholder equity ... and there is no 100% guarantee or timeframe! For just what you lose on that deal, you could buy up to 10 MMC weeks and stay 10 weeks in a row if you wanted and have 60 free rounds of golf on their 3 golf courses.

Correct me if I'm wrong, but none of you have any real inside stats of the actual financial status of any non-equity-based DC, and financial speculation otherwise is misleading to a novice buyer. ER could be going down too and only Steve Case and his buddies would know for sure until it was leaked to the public ... and then what would you think about the future of DC's? And where would the remaining DC's find the new customers in order to pay you when you wanted out too?

Brian

2 Things...

1. You missed this.

Before we start going into the resale vs developer purchase discussion, remember that the resale market makes up for only 10% of all timeshare sales in terms of total sale price.

Yes, i made 25% profits on both FS Resales and a grand on Hilton Craigandarroch but I am in a minority. If all timeshare owners out there were TUG members, timeshare industry will cease to exist.

2. I put my money where my mouth is. I trusted HCC with my membership dollars and my investment dollars. I would not be where I am if I did not do due diligence on my financial deals. And took calculated risks.

Then again, I bought a HGVC Ordlando 7000 pts from the developer. I'm going to take that one to the grave. :rofl:

 

[PerryM]

OK - so the answer is no, timeshares also do not fulfill your 3 requirements.

Had me confused for a moment, since I was pretty sure that Four Seasons will not guarantee me 80% of the current selling price of its timeshares, nor will they put up a performance bond to ensure that I will get back at least 80% of what I pay, nor will they guarantee me that someone will buy it within 90 days. But I guess that's OK, since once a big luxury hotel brand gets involved in timeshares, they will certainly put in place all these protections, and then it will be safe to buy... But wait a minute... Isn't Four Seasons a big, reputable, luxury hotel brand... Now I am really confused... When Four Seasons, Hyatt, Marriott, etc., moved into timeshares, they basically conformed to industry norms... but if/when they move into the DC market, they will ignore the industry norms and instead follow Perry's rules (which only apply to DCs, not TSs...) verrry interesting...

I am addressing DC's in this thread - there is NO reason why a DC can't:
1) Return 80% of CURRENT selling price. HCC did it.
2) Guarantee the refundable part of my deposit - simple; have the principals pledge their homes and property to cover the deposits.
3) 100% transparent in operations and CPA verified audits of critical things like 8 memberships being sold and not 9 per unit.


I guess I've given everyone enough time to respond to my challenge of ANY DC verifying that they are NOT overselling their memberships with a CPA statement of the fact.

Come one guys; if the DCs can't even verify this fundamental principle (Not overselling memberships) this qualifies DCs as a "House of Cards" in my book.

 

[Kagehitokiri]

1. m private residences = 92% current
2. http://www.tugbbs.com/forums/showpost.php?p=413495&postcount=67

to clarify, would you say "house of cards" = slotmachine?

 

[PerryM]

Mmmmmm...goose for dinner....

1. m private residences = 92% current
2. http://www.tugbbs.com/forums/showpost.php?p=413495&postcount=67

to clarify, would you say "house of cards" = slotmachine?

A "House of cards" is any organization that can implode in a second - the DC industry is a prime example. ONE bad news article by the Drive-By media on TV and attention would be focused on DC's - focus that could instantly dry up sales.

And a lack of sales (fresh meat) is something the DC industry might find some DCs folding up one night and the founders splitting the proceeds. The carcass of what's left would find the members fighting for scraps, after everyone else.

No sales prevents DC owners from exiting the DC - how much is your membership worth then? Answer: not even one penny. That's why I factor in the DC membership into the overall cost and haven't bought one yet.


I guess I could post another challenge to DC owners - show me a document that prevents my above scenario from happening.... I know that the fat cats that start DCs don't want to kill the Golden Goose, but if that goose gets cooked my guess is that they will be the first to eat it.

 

[vineyarder]

there is NO reason why a DC can't:
1) Return 80% of CURRENT selling price. HCC did it.
2) Guarantee the refundable part of my deposit - simple; have the principals pledge their homes and property to cover the deposits.
3) 100% transparent in operations and CPA verified audits of critical things like 8 memberships being sold and not 9 per unit.

Yes, of course they could... I already addressed this:

"my guess is that it will come with a much higher pricetag; back to same old higher cost/lower risk vs. higher risk/lower cost equation. And it is certainly reasonable to choose higher cost/lower risk (it appears that is Kag's choice; he'd rather pay more but be more certain of what he is getting). On the other hand, that flies in the face of your earlier comments about "DC math" and how you can do much better with rentals...

Right now the majority of DCs are still in the phase of appealling to early adopters who are willing to take on higher risk to get lower costs (appropriate for this stage of the industry). At this stage they are not staying up nights worrying about how to get Perry M as a member. Once the industry matures, and the 'early adopter' market is saturated, then they will begin to tailor their approach to appeal to more risk-averse customers."

As for founders pledging their personal assets to guarantee the return of your deposit, I cannot see that happening... I've been a founder or director of a dozen start-ups, and an investor in a dozen others, and we have never pledged our personal assets; on the contrary, they are always protected as best we can by the corporate viel... and that has not stopped us from getting $4m - $90M in investments, from investors that are not risk-averse...

I guess I've given everyone enough time to respond to my challenge of ANY DC verifying that they are NOT overselling their memberships with a CPA statement of the fact.

PE does do this annually, and also publishes (on the members-only website) quarterly updates on memberships sold, ratio of members to homes, and occupancy rates for the quarter, and includes a link to download the quarterly financials and minutes of the board of directors minutes. In addition, the statutory board (as well as an advisory board) has member representation.

 

[NeilGoBlue]

I am addressing DC's in this thread - there is NO reason why a DC can't:
1) Return 80% of CURRENT selling price. HCC did it.
2) Guarantee the refundable part of my deposit - simple; have the principals pledge their homes and property to cover the deposits.
3) 100% transparent in operations and CPA verified audits of critical things like 8 memberships being sold and not 9 per unit.


.

Bellehaven's meets your criteria.

1. It returns 90% of current pricing
2. There is no debt and the members own 100% of the homes. So, in a liquidation, we would get 90% of the sales prices of the homes, (10% to bellehavens)
3. I believe that Bellehaven's CPA audit would meet your criteria.

 

[vineyarder]

A "House of cards" is any organization that can implode in a second - the DC industry is a prime example.

Technically this is not correct; an organization cannot, by definition, implode. An implosion concentrates energy and matter; this does not occur in a bankrupty or business failure. A 'house of cards' could implode, but that would require the strategic and calculated application of external forces. A 'house of cards' may (or may not) be an unstable structure at risk of collapse. If you are saying that DCs have an inherently unstable business structure, then they at risk of failure (not implosion), and the appropriate 'house of cards' analogy would be 'collapse', not implosion.

 

[vineyarder]

Bellehaven's meets your criteria.

1. It returns 90% of current pricing
2. There is no debt and the members own 100% of the homes. So, in a liquidation, we would get 90% of the sales prices of the homes, (10% to bellehavens)
3. I believe that Bellehaven's CPA audit would meet your criteria.

Great - Perry, let us know where you decide to go on your first Bellehaven's vacation!

 

[PerryM]

You say explode, I say implode....

Great - Perry, let us know where you decide to go on your first Bellehaven's vacation!

I've looked at Bellehavens - it is the closest to what I envision in a DC. However, just because they meet it does not mean they won't be sucked into a whirlwind of the DC marketplace being hit with bad press due to the shakiness of DCs.

I view DCs as unproven - they are about 10 years old and just look at what happened to the Sub-Prime market - hundreds of lending institutions belly up in the blink of an eye. Look at the consumers sucked into an imploding market - bankruptcies and ruined lives.

I see little difference between the high-rollers who ran those sub-prime companies and DC's - somebody show me the difference.

Conclusion:
Bellehavens is close to what I want, but it can suffer just as bad as any other DC if they should meet a fate like the Sub-Prime folks. I can easily see this happening.

 

[Bourne]

I've looked at Bellehavens - it is the closest to what I envision in a DC. However, just because they meet it does not mean they won't be sucked into a whirlwind of the DC marketplace being hit with bad press due to the shakiness of DCs.

I view DCs as unproven - they are about 10 years old and just look at what happened to the Sub-Prime market - hundreds of lending institutions belly up in the blink of an eye. Look at the consumers sucked into an imploding market - bankruptcies and ruined lives.

I see little difference between the high-rollers who ran those sub-prime companies and DC's - somebody show me the difference.

Conclusion:
Bellehavens is close to what I want, but it can suffer just as bad as any other DC if they should meet a fate like the Sub-Prime folks. I can easily see this happening.

I hate to make a personal comment but...

what you want is a perfect DC based on your requirements...

Bellehavens comes VERY close but the DC industry is not mature enough...

By the time the DC industry matures, it will be the price point because DCs will command a price point that would not make sense to you on a cost per night basis.

It seems to me that you are a risk taker but at lower numbers. You are risk averse with your money when the numbers get larger. Makes perfect sense.

IMHO, a DC is not right for you. Not in its current format and not where it is going to be in terms of price point for a mature industry. Period.

What I question is your judgement regarding other people's ability to handle risk. With respect to DC's, many members are taking a higher risk than you but it is still within reasonable limits as a whole.

Anyone taking a higher risk than you is not doomed for failure.

 

[vineyarder]

I've looked at Bellehavens - it is the closest to what I envision in a DC. However, just because they meet it does not mean they won't be sucked into a whirlwind of the DC marketplace being hit with bad press due to the shakiness of DCs.

Huh?

Here is what you said 2 days ago...

Originally Posted by PerryM
Here is all that is required for any DC to get my business:

So Bellehavens steps up to the plate and meets your criteria, but you're not mailing in a check? OK, so those criteria are 48 hours old by now. What are today's requirements for a DC to get your business??

Originally Posted by Bourne
IMHO, a DC is not right for you. Not in its current format and not where it is going in terms of price point for a mature industry. Period.

Amen. Exclamation Point.

 

[PerryM]

Huh?

Here is what you said 2 days ago...



So Bellehavens steps up to the plate and meets your criteria, but you're not mailing in a check? OK, so those criteria are 48 hours old by now. What are today's requirements for a DC to get your business??



Amen. Exclamation Point.

It takes, what 24 hours, to start a DC:

• There are NO real estate statutes to worry about.
  
• There are no SEC rules to worry about.
  
• There are no DC laws that I'm aware of to worry about.

Hell, Jack the Ripper could start one and I'd bet he'd do a ripping business.


Seriously, a felon could start one - that's the status of the DC market right now.

It seems that there is an endless supply of folks who don't mind plunking down large sums of money to join a DC.

I just don't see where its unusual to assume the DC market is in for a rough time ahead and that some will go belly up. Is anyone here suggesting that 100% of the existing DCs will be here 20 years from now?

If so, I'll have Jack give you a call....

 

[TarheelTraveler]

It takes, what 24 hours, to start a DC:

• There are NO real estate statutes to worry about.
  
• There are no SEC rules to worry about.
  
• There are no DC laws that I'm aware of to worry about.

Hell, Jack the Ripper could start one and I'd bet he'd do a ripping business.


Seriously, a felon could start one - that's the status of the DC market right now.

It seems that there is an endless supply of folks who don't mind plunking down large sums of money to join a DC.

I just don't see where its unusual to assume the DC market is in for a rough time ahead and that some will go belly up. Is anyone here suggesting that 100% of the existing DCs will be here 20 years from now?

If so, I'll have Jack give you a call....

I think that you seriously underestimate what it takes to start a DC, particularly a successful DC. Based on what I saw when looking at the various options, I was surprised at the level of legal documentation and work that goes into what seems like a fairly simple idea. The devil is always in the details.

Not all DCs will make it, but does it mean that the members or investors will lose all of their money or is it more likely that the weaker clubs get absorbed into the stronger ones or maybe you don't get all of your deposit back once the properties are liquidated. In any event, you can't suggest to me that every timeshare or real estate development will be there 20 years from now or that you won't lose all or a portion of your money.

The T&H bankruptcy did not curtail the growth of the DC industry. It led to more protection for the consumer and better business practices. Given the complete financial mismanagement of that DC, I was pleasantly surprised with the positive result for most members.

Like anything else, there are definitely risks with DCs, but also ways of mitigating those risks.

 

[vineyarder]

It takes, what 24 hours, to start a DC:

• There are NO real estate statutes to worry about.
  
• There are no SEC rules to worry about.
  
• There are no DC laws that I'm aware of to worry about.

Hell, Jack the Ripper could start one and I'd bet he'd do a ripping business.


Seriously, a felon could start one - that's the status of the DC market right now.

It seems that there is an endless supply of folks who don't mind plunking down large sums of money to join a DC.

unless this is a new development within the past 48 hrs, these comments are irrelevent vis-a-vis your prior statment as to what a DC needed to do to get your business:

Here is what you said 2 days ago...

Quote:
Originally Posted by PerryM
Here is all that is required for any DC to get my business:

So Bellehavens steps up to the plate and meets your criteria, but you're not mailing in a check? OK, so those criteria are 48 hours old by now. What are today's requirements for a DC to get your business??

Quote:
Originally Posted by Bourne
IMHO, a DC is not right for you. Not in its current format and not where it is going in terms of price point for a mature industry. Period.

Amen. Exclamation Point.

Originally Posted by PerryM
Seriously, a felon could start one - that's the status of the DC market right now.

That is the status of the vast majority of industries in the USA; there are very few businesses that a felon cannot start! A felon can become a physician, a lawyer, or even the President of the United States. But this aside, you could, without much effort, obtain background checks on the principals of any DC that you were seriously interested in joining... This 'Jack the Ripper' line of reasoning is reeeeally stretching the credibility of your arguments! To paraphrase: 'Yes, Bellehavens meets my criteria of what I wanted in a DC 48 hours ago, and teh industry hasn't changed in the last 48hrs, but OMG, maybe it was started by a felon!'

I'm getting the idea that maybe you're just posting here as a case study in fallacial logic for some high school class to have fun analyzing?

 

[Steamboat Bill]

I view DCs as unproven

It surprises me that nobody compares joining a DCs with joining a private golf club or even a resort like the Boca Raton Resort and Spa.

There are 10s of thousands of people that join golf clubs and resort spas. The Boca Resort has a 5:1 new member to refund ratio and costs about $50k to join. Donald Trump charges $100k or more to join Mar-a-Largo club and $300k to join his private golf club in WPB.

Nobody who joins these clubs ever worries about if they are proven or not or that the "math does not work". They just enjoy the amenities of the club. A DC is the same concept.

Too often TUGers compare a DC to a TS and they should really compare it to a private golf or spa club.

In fact, I am the only one of my Boca friends that is not a member of a private golf club or the Boca Resort. It's not that I don't want to join, I just don't see much value as I don't play golf that much or go to "the club" that often. I get invited all the time for free!

Now a DC represents great value to me and some of my Boca friends are beginning to see the light.

 

[vineyarder]

If you only have a hammer, everything looks like a nail...

It surprises me that nobody compares joining a DCs with joining a private golf club or even a resort like the Boca Raton Resort and Spa.

Too often TUGers compare a DC to a TS and they should really compare it to a private golf or spa club.

Perhaps, just perhaps, this has something to do with this forum being hosted by the Timeshare Users Group? Over at the Country Club Users Group forum, they are always comparings DCs to Country Clubs....

http://www.ccug.com/forums/destclubs.php?f=32

 

[travelguy]

Still In Hawaii

I'm still in Hawaii enjoying my High Country Club membership. I logged in to see what's going on at the TUG Non-Tra forum and I see it's still many happy DC members fighting against the DC misinformation of a few.

I'd join in but I have to get back to enjoying my DC membership now. Keep up the good fight!

P.S. - The High Country Club Maui house is not made of cards, rather hurricane resistant concrete with a beautiful stucco finish. Oh, and the sky is not falling but is a vibrant blue and sunny.

P.P.S. - Perry, Thanks again for letting me know about DCs when you were going to buy a HCC membership last year. Best decision I ever made!

Aloha!

 

[Steamboat Bill]

P.P.S. - Perry, Thanks again for letting me know about DCs when you were going to buy a HCC membership last year. Best decision I ever made!

Here is one of the original threads on Destination Clubs started by PerryM on July 19, 2006

http://tugbbs.com/forums/showthread.php?t=28527

Wow….HCC has really ramped up their prices.

HCC July 2006 prices:

An Affiliate membership gives you 3 weeks of usage per year and costs $20K to join and $4,200 MF per year. A Private membership gives you 6 weeks of usage and costs $30K to join and $7,200 MF per year.

Here is the Steamboat Bill’s “Cost per Night Calculation” price breakdown:

2006 Affiliate = $1,000 lost opportunity costs + $4,200 MF = $5,200 total costs / 21 nights = $248 per night.

2006 Private = $1,500 lost opportunity costs + $7,200 MF = $8,700 total costs / 42 nights = $207 per night.

----------------------------

I missed this price level as I joined in December 2006, but I beat the two most recent price increases.