Recent Destination Club News

[TarheelTraveler]

More info. on the A&K villa program, which has some very cool options:

http://www.sherpareport.com/destination-clubs/ak-residence-club-european-villas.html

"Ten of the villas are in Italy and twelve in France and include:

Villa Siepi, Tuscany (5 bedrooms, sleeps 10)
Built in the 1500's this charming castle, Villa Le Siepi, is located in the typical Tuscan village of Panzano in Chianti. The Italian gardens, stunning views, private swimming pool and tennis court make it a perfect place in which to enjoy a relaxing family villa vacation. The main piazza of the village with its colourful Sunday market and the typical "trattorias" can be reached by an easy walk from this family villa.

Villa La Terme, Tuscany (5 bedrooms, sleeps 10)
Fully-renovated farmhouse with views over the Chianti hills, near the medieval village of San Gimignano. This luxury villa retains its original charm while being tastefully furnished with modern amenities, including satellite TV, luxury spa, steam room, infinity pool and summer bar. The shaded outdoor terrace is a perfect place to relax.

La Fornace, Tuscany (5 bedrooms, sleeps 10)
This newly-renovated farmhouse -- with spectacular views over the Tuscan countryside -- is a peaceful retreat, centrally located for daytrips to Florence, Arezzo, Siena and Perugia. Fully-equipped for active families with bicycles, a heated swimming pool, soccer field, volleyball court, pool table, sauna and steam bath. Ideal for multi-generational families with two separate wings, each with a fully-equipped kitchen.

Cabasson, Cote d'Azur (6 bedrooms, sleeps 8)
A modern villa, fully equipped and furnished in contemporary French style, set amidst vineyards with enchanting sea views of the Porquerolles Islands and direct beach access.

L'Hameau des Bourgues, Provence (4 bedrooms, sleeps 8)
This spectacular hamlet dating back to 1422 is set in 15 acres of fruit and olive orchards, with stunning views over the Luberon Valley and mountains. This French provincial home with contemporary furnishings offers peace and tranquility with outdoor stone terraces for al fresco dining."

"... A&K also prides itself on providing "insider access", so members could take a VIP tour of one of the oldest Tuscan pasta makers in Lari, learn how pecorino and ricotta cheese are made in a Tuscan farmhouse located in the heart of Val d’Orcia, or embark on a private, underground tour of medieval Siena.

Earlier this year A&K Residence Club had 5 European villas available through this program, and last year had about a dozen European villas. All of these villas are managed through sister company A&K Villas."

ER Luxist Susan Kime Vdara residences article:

http://www.luxist.com/2010/05/06/viva-vdara-exclusive-resorts-adds-ten-new-residences-in-las-v/

"ER Members can experience shopping and dining at City Center, in the Crystals retail and entertainment district, exceptional gaming at the new ARIA Resort & Casino, and the new Cirque du Soleil production "Viva Elvis." They will also enjoy signing privileges at all Las Vegas MGM MIRAGE properties including The Mirage, Mandalay Bay, MGM Grand and the Bellagio, all connected by an indoor walkway."

 

[TarheelTraveler]

Forgot to post that ER has appealed the order in a Ca. court that its arbitration provision in its 2003 Agreement and 2010 Amendment are both procedurally and substantively unconscionable, and therefore unenforceable.

 

[TarheelTraveler]

Ultimate Escapes Q1 earnings

http://www.marketwatch.com/story/ul...y-may-13-2010-2010-05-10?reflink=MW_news_stmp

"Ultimate Escapes, Inc. (OTCBB: ULEI and ULEI-W) (the "Company"), one of the world's largest luxury destination clubs, today announced that it will report its first quarter 2010 results after the market closes on Thursday, May 13, 2010.

The company will hold a conference call with investors and analysts at 4:30 PM EDT on that day to discuss the results. The dial-in number for the conference call is (888) 466-4587 -- please dial the number 10 minutes prior to the scheduled start time. A live webcast of the conference call will also be available on Ultimate Escapes' website at www.ultimateescapes.com.

A replay of the call will be available two hours following the end of the call through midnight EDT on Thursday, May 20 at www.ultimateescapes.com and by telephone at (888) 203-1112; passcode 1064200...."

 

[Chicagomark]

More PE/UE litigation goes away.....

LaBella Vs PE/UE et al was dismissed with prejudice last week.......

 

[Kagehitokiri2]

LaBella Vs PE/UE et al was dismissed with prejudice last week.......

leaving maher and norris? wonder where the others are, like the new ER one.

 

[TarheelTraveler]

LaBella Vs PE/UE et al was dismissed with prejudice last week.......

Thanks for the update, CM. I think it's great to clear some of the outstanding litigation.

BTW, if you look at the document prior to the dismissal, you'll note that the plaintiff and defendants settled the case and jointly agreed to dismiss it (rather than the court dismissing the case on its merits). Anyone know anything about the settlement terms?

So it looks like LaBella and Sypris were both settled. Danielson, Maher, Cheigh and Norring are all out there best that I can tell.

CM - have you ever checked for state court cases against PE, UE or any of the other clubs (other than the ones that you've noted like the ER and Quintess cases)? I typically only check for federal cases, because it's easy and free.

 

[Kagehitokiri2]

If you did not notice UE did just raise in March over $5 Million from members who volunteered to pay an extra year in dues for additional reservation days and other benefits.

ah, by doing it this way they can avoid breaking out non-recurring income.

Q1 GAAP >

$7,315,000 revenue incl $1,499,000 "other revenue"
($1,183,000) EBITDA
($6,472,000) net

adjusted non-GAAP >

$8,289,000 revenue
($156,000) EBITDA
($5,498,000) net

Membership Deposits To Be Refunded – Members may resign from the club after 18 months and receive a partial refund of their membership fee subject to the redemption procedures identified in the Club Membership Agreements. At March 31, 2010, December 31, 2009 and 2008, the Company had 1,229, 1,214 and 922 active members, respectively. In addition, at March 31, 2010 and December 31, 2009, there were 52 and 46 members, respectively, who had resigned. The redemption assurance obligation (as described below) to these resigned members at March 31, 2010 and December 31, 2009 was $5,084 and $5,037, respectively, and is refundable to the respective members within the next 12-18 months in accordance with their Club Membership Agreements.

As of March 31, 2010 and December 31, 2009, we operated a total of 135 and 141 club properties, respectively, located in various resort destinations. Of these properties, 103 and 104, respectively, are owned, and 32 and 37 are leased.

conference call - 10 minutes, no callers

previously >

conference call - 16 minutes and 1 caller

 

[wilkes591]

SAD!

Fighting for survival, while burning cash like a drunken sailor on leave! How can G&A and Salaries and Contract Labor increase?

Looks like Capital Source is going to let UE "wind down". Collect what ever cash it can from UE, while demanding property sales to pay down the debt. Smart approach considering the alternative, Capital Source will minimize it's loss over the next year or two. The outcome is obvious, it is a matter of when. 12/31/2010 look like the next line in the sand with a $5 million payment due to Capital Source. Will Capital Source modify the loan again as on 04/19/2010? Who knows?

What JT pulls out of a hat this time, I can only guess. Something will have to happen by October/November, either a member assessment/equity attempt or a secondary after a 10 for 1 reverse split, or UE sells enough Real Estate by 12/31/2010 to satisfy Capital Source. UE is trying to sell over $6 million in RE, so it is most likely Capital Source just continues the "wind down" and UE will lease more properties. One thing is for sure UE is spending every dollar that comes through the door.

We will see how long it last, good luck to all!

 

[Desties]

Steve Young

Steve Young to the rescue?

http://www.ultimateescapes.com/syoung/

Obviously Steve Young is being compensated/comped for his endorsement in this very tricky time, but it's still good to see. This guy is carving out a sweet reputation -- in real estate investing no less -- and he is pretty public (one of the hosts during ESPN's draft coverage last month).

 

[EOD]

You have to give the clubs some credit, they have managed to stave off the inevitable for much longer than any of us predicted.

 

[SciFrog]

Welcome back EOD. Still resigning?

 

[TarheelTraveler]

How can G&A and Salaries and Contract Labor increase?

Isn't that because of the addition of PE employees? In other words, higher revenue (if you exclude the assessment of last year) from the addition of PE members, but also higher property and staffing costs. I wonder how it all balances out (i.e., whether it's a net positive or negative). I assume positive otherwise they wouldn't have done the deal I would think.

I guess one way to look at it on a rough basis would be to say what is the additional revenue (which is primarily from the addition of PE members). I guesstimated 1.831M of additional revenue from the financials. And it looks like costs may have gone up $2.030M (property operating costs, lease costs, salaries and G&A)(I assume also primarily from the PE additions). However, I assume over time, you can tweak the cost side down as you continue to merge functions and reduce staffing.

 

[Kagehitokiri2]

Received $2.3M in new capital contributions

30% of members upgraded

unclear whether upgrades are included

also curious

AK discount extended through june, increase after that still a lot less than original pricing. must annoy people who joined before this...have there been any partial refunds?...discount started mid december.

 

[wilkes591]

UE is not merging functions, PE still runs out of CO and UR runs out of FL with the same functions. An accounting office in KC. Two high paid CEOs in JT and RK and a high paid CFO. Very TOP heavy with executives, COO, Chief Sales and Marketing Officer with no marketing budget, Senior VP of Business Planning, Chief Technology Office, and very heavy on executive salaries. Then UE added Directors, look at McMillian's sweet deal. Not exactly a company cutting salaries back to stay alive.

I guess the way to look at it now is what ever cash UE leaves laying around, Capital Source will want it, so just spend it. This company could make it, it is just not trying to make it. The Cash flow is the place to focus on, look at the burn rate and the cash on hand. UE will make it through the 2nd QTR and the 3rd QTR. UE will be forced to do something around October/November.

Capital Source will sit back collect the interest and fees and just let UE sell the homes and pay down the debt while UE maintains the homes and collects from the members. Depending on how UE manages the members and cash flow determines how long this can continue.

The unbelievable part is UE is still getting new members with the PUBLIC financial statements. Clearly, the new members are not reviewing the financials. If this increases and only slightly perhaps UE will make it through the year with out a problem in October/November. Anyone resigning can forget about getting a deposit back, clearly UE does not have the money to give back. I would love to resign and get my money back, but let's be realistic.

Do any other member's see a different angle?

 

[EOD]

Welcome back EOD. Still resigning?

Yup, Nothing changing on that front. Of course, the act of resigning does not mean I'm ever getting out. They really seem to be trying some innovative ideas as of late, i'll give them credit for that.

 

[SciFrog]

Yup, the company looks solid, they cull the soso homes and bring on nicer ones, communication is good, finances look good...

I have a big decision to make soon, upgrade to holidays or quit...

 

[Kagehitokiri2]

http://destinationclubnews.com/News...cipate_At_Inaugural_Fractional_Summit_USA.php

The highlight of the two day event may come on the afternoon of September 1 in an event titled "Luxury Destination Clubs - Survival of the Fittest?" The brief overview describes this portion of the summit quite succinctly. "Representatives from the five remaining Destination Clubs talk openly and honestly about the outlook and challenges they face within the market."

presumably - ER UE Q AK EE

canadian - m private residences, luxus
european - hideaways, rocksure, oyster

 

[3DH]

Fractional Summit event website

 

[Desties]

I would love to resign and get my money back, but let's be realistic.

Do any other member's see a different angle?

It is a Catch-22. It would be great to resign and get our money back -- but the club would have to be healthy and actively recruiting for that to happen. And, well, if that were happening, then there wouldn't be this sole-nibbling desire to get out before it's too late.

Coming from the PE side of the merger, my plan at the time was to enjoy the club for several years but to make sure I got on the resignation list ahead of when the T&H majority could get out with money due back.

I guess we're all in limbo now, but at least the vacations are still spectacular. The upside is that the economy does appear to be showing signs of life. The downside is that the financials are iffy and this push to go public has been a disaster. The stock hasn't traded since last Monday -- and then it was for a measly 100 shares (yep, just $185 worth of stock). The RAP Conversion plan that was supposed to take advantage of the stock has burned its participants, so the club can't tap that well again. However, the club needs to do something to get back on the investing radar. An acquisition wouldn't be enough, but it would at least be a start. Organic growth, or lack thereof, isn't going to be enough to get the shares going again.

 

[Kagehitokiri2]

3DH, how has EE travel been going?

 

[3DH]

3DH, how has EE travel been going?

So far, we are very pleased... great residences, excellent service and open line of communication with everyone involved with the company! We like the new affiliation with Hideaways Club, but have yet to take advantage of any of their properties due to existing travel plans... hopefully next spring!

 

[TarheelTraveler]

unclear whether upgrades are included

also curious

On Kage's earlier A&K questions, I don't think member upgrades were included in the figure. The upgrades for 30% of members consisted of higher dues (same dues as new members) for additional benefits (same benefits as new members), but not increased deposits. The 2.3M of capital contributions would be from new members for the most part.

There was some grumbling initially at the pricing, but I think most people recognize that the buyers expect pretty significant discounts in today's real estate market. It helped at least with me that A&K was lowering its commission as part of the effort. I would have been happier with 30% and said the same, which is pretty much where they are going in July. As far as extending the pricing through June, there were no complaints/questions about it during the annual member meeting.

Gotcha, Wilkes. I would've assumed that once the PE merger was done, there would be some major cost cutting. Hopefully, that is coming.

EOD, SciFrog - Good to hear that management is coming up with some innovative ideas. I assume you are talking about the good PGA affiliation? So what do you think of Quintess/Tour Club exchange program?

 

[Kagehitokiri2]

glad to hear it 3DH.

I don't think member upgrades were included in the figure. The upgrades for 30% of members consisted of higher dues (same dues as new members) for additional benefits (same benefits as new members), but not increased deposits.

A&K was lowering its commission as part of the effort. I would have been happier with 30% and said the same, which is pretty much where they are going in July. As far as extending the pricing through June, there were no complaints/questions about it during the annual member meeting.

good info.

regardless of extensions, after it ends, the price increase is minimal, and much lower than originally. ah, so moving to 30% off original.

:thumbsup: re lowered commission - just the profit?

12.5% for membership sales and marketing expenses
5% for general and administrative expenses
10% return or profit to A&K manager

 

[twelve1208]

Equity Clubs

I am currently doing some due diligence on equity based clubs.

Could someone tell me the Pro's and Con's of the various equity based models out there?

 

[Kagehitokiri2]

http://tugbbs.com/forums/showpost.php?p=886398&postcount=222
http://tugbbs.com/forums/showpost.php?p=886362&postcount=219

http://tugbbs.com/forums/showpost.php?p=883904&postcount=194
http://tugbbs.com/forums/showpost.php?p=883743&postcount=192