- Jun 13, 2007
- Reaction score
- North Carolina
Hoping for the best for all of the HCC members on here.
Not perfect, but I'm struck by their integrity and absence of weasel words in their letter to members. IMO this is impressive for a (young) CEO these days.Looks like the tuff sledding that hit the timeshare, vacation home and fractional ownership industries (and the world economy as a whole) is also affecting the Destination Club industry.
I appreciate the fact that High Country Club is being proactive and has come up with an option that may be acceptable to many of it's members.
Hoping for the best!
It's not pretty out there. I tend to forget about all of the ski resorts Intrawest owns (or has a major interest in) like Steamboat, Winterpark, Copper Mountain and Whistler (http://www.steamboatpilot.com/news/2008/oct/25/intrawest_optimistic/). They've also got major timeshare, PRC and residential developments, which are probably also hurting.Thank you.
I see that the major financial backers of Abercrombie & Kent (Intrawest and Fortress Financial) are also experiencing rough times. The latest news on Intrawest is that they managed to re-negotiate their billion dollar loan, but at a high rate of interest. So much for living the high life on borrowed money....
<<The operators of the Whistler-Blackcomb ski resort in B.C. say it's business as usual, despite reports the owners are struggling to stop it from becoming a victim of the international credit crisis.
The Intrawest ski resort company has $1.68 billion in debt due Oct. 23, and the company's owner, New York-based Fortress Investment Group, is struggling to rearrange financing to keep the operation afloat, according to a report published in the Financial Times.>>
5) In the event the business is liquidated, will there be anything left for members?
At the end of 2007, our net asset test showed that the net assets of HCC exceed the amount of our member refundable deposit obligations. During 2008, we have seen a significant decrease in our property values ranging from 20% - 50% off of our 2007 appraisals, which means that the equity in our portfolio has greatly diminished over the past 10 month period. In addition, we anticipate that the real estate market will continue to decline over 2009. Due to the current economic conditions, we believe that once the mortgage holders are paid there will not be any equity left for us to refund to our members. Management and investors of HCC would not receive any compensation from a liquidation unless our members were fully paid their refundable deposit.
My response by numbers:Some thoughts:
3. As bad as this is, the entire Destination Club industry should not be blammed as it is still a viable business that is very attractive for high-net worth individuals. In fact, Exclusive Resorts, Equity Estates, and A&K are still looking very solid. UE, Quintess, Lusso, DHH, and several more are still operating without major complaints.
6. Let's not forget how MUCH more has been lost by millions of people buying expensive timeshares from a developer, heck, even my resale Marriott MMC that I bought for $8k has lost a lot of value recently.
7. Did HCC suffer from mismanagement, poor business plan, or a bad economy? I don't know and perhaps all of the above.
This is the answer to my question. If all a member has to do is stop paying maintenance fees and they are terminated, then members will jump ship in droves when they sense that they will be the only ones left on the ship.Some thoughts:
5. Once an HCC member stops paying dues, they are terminated.
Ask him how much money he's made on his Condo Hotel in Daytona Beach. Or, his purchase into the Penthouse unit at Planet Hollywood in Las Vegas.Perry ... I'd like to get your updated thoughts on the Condo Hotel market. I suspect they've had their problems over the last year or so too, perhaps even more than DC's have had.
You may remember, I almost bit on a condo hotel (JW Marriott - Red Leaves Muskoka) a couple of years ago and didn't do it, after you were good enough to provide some warning signs...and that place still hasn't opened, and is not yet sold out. It was supposed to open in June this year, got delayed to the Fall, and still no word on opening day.
...I do however own at the Delta Whistler and it is a condo-hotel and I this is the only one that I have seen that actually makes any money as it is a 3 star, not 5 star resort. I have a 6% ROI just on the monthly rents and I do no work. I have owned a unit there since 2003 and it is still awesome and the prices are stable, but there is not a ton of demand for buyers.
Thanks for reminding me that my investment just dropped 20% on the currency exchange alone! No matter, I am hoping for an Olympic bounce in 2010.Bill ... guess you know the Can$ dropped like a rock this last month ... got down to around $.78 at one point and recovered a bit to low 80's.
Wouldn't you have been better to have SOLD your coin collection 25 years ago and put that money in a fixed compounding savings account or roll-over CD and you probably would be up 300% or so.This is a great quote by Warren Buffett on 10/17/08:
A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful.
Using Buffett’s rule you should be buying things that folks are begging you to buy at 25 cents on the dollar; that would be the condo hotel, and condo market in Florida right this second.
Just like we held on to our rare coins for 25 years and finally sold them for a nice profit so we will do with our other holdings – no matter what the situation.
You guys don't think the timeshare market will get thru this without its own set of problems do you?
Wait until a chain declares bankruptcy and then another one of my predictions will come true:
The Timeshare Bubble!
Let me clarify my Timeshare Bubble prediction - it will come true when Marriott (any Marriott) lowers their asking price just 1 penny just once. That should be an easy number to watch and when it happens expect blood in the timeshare streets. The timeshare bubble has burst and expect resale prices to assume room temperature just like condos in Florida - at least for a while.Thanks for reminding me that my investment just dropped 20% on the currency exchange alone! No matter, I am hoping for an Olympic bounce in 2010.
Wouldn't you have been better to have SOLD your coin collection 25 years ago and put that money in a fixed compounding savings account or roll-over CD and you probably would be up 300% or so.
Another Buffett observation - make sure to have plenty of CASH to buy as that appears to be the rate limiting step for non-Buffettheads.
I don't think Warren would EVER buy a condo-hotel....the numbers just don't work for the buyer....only the developer makes money.
Timeshare Bubble???? - how much lower than $1 can some go?
DVC, Marriott, and even Park City ski weeks are GREATLY lower over the past 6 months and are NOW cheaper than I have ever seen in the past 8 years.
Can't believe that I am 100% in agreement with PerryM!Solving the stock market debacle is very simple:
1) 100% cash (just like your IRA) no leveraging of stocks
2) NO shorting of stocks allowed (How would you "short" a local business in real life? It can't be done)
That would have the stock market rocketing back in a heartbeat.