This is a real treat: "How Marriott Vacations Worldwide Thinks About Loyalty with President, Mike Flaskey” podcast

[WBP]

How Marriott Vacations Worldwide Thinks About Loyalty with President, Mike Flaskey - Alex and Annie: The Real Women of Vacation Rentals

In this episode, we welcome back Mike Flaskey, President and Chief Operating Officer of Marriott Vacations Worldwide.Mike shares what brought him back to the industry, what his new role looks like, and how Marriott Vacations Worldwide is approachi...

www.buzzsprout.com

 

[dioxide45]

You can watch it on YouTueb too.

 

[dioxide45]

I've only listened to the first few minutes so far. I find it interesting how they tout that Mikey sold Diamond resorts. The reality is that Apollo took a pretty big loss. They paid Mr Cloobeck $2.2 billon and then sold at a valuation of only $1.4 billion. It doesn't seem like he added a lot of value to DRI before it was sold off.

He also does explain how the whole "cash based" travel options, like tours, cruises and events, are monetized by the industry through rental. He also touches on the Owner Benefit Level changes, though nothing significant.

 

[CULox99]

I was curious about him in the buying/selling of diamond resorts so did a quick search:
Apollo Global Management did not suffer significant losses—and likely made a profit—on its investment in Diamond Resorts, contrary to some early reports of a loss. Apollo took Diamond private in 2016 for $2.2 billion and later sold it to Hilton Grand Vacations in 2021 for a combination of stock and cash valued over $1.4 billion, while retaining a significant equity stake in the combined, higher-valued.
Final Outcome: While the cash portion of the deal was lower than the initial purchase price, Apollo received roughly 13.7 million shares in Hilton Grand Vacations (HGV), which represented a significant ownership stake. As HGV stock performed well, this investment allowed Apollo to realize value, with reports highlighting it as a successful turnaround rather than a loss

 

[dioxide45]

I was curious about him in the buying/selling of diamond resorts so did a quick search:
Apollo Global Management did not suffer significant losses—and likely made a profit—on its investment in Diamond Resorts, contrary to some early reports of a loss. Apollo took Diamond private in 2016 for $2.2 billion and later sold it to Hilton Grand Vacations in 2021 for a combination of stock and cash valued over $1.4 billion, while retaining a significant equity stake in the combined, higher-valued.
Final Outcome: While the cash portion of the deal was lower than the initial purchase price, Apollo received roughly 13.7 million shares in Hilton Grand Vacations (HGV), which represented a significant ownership stake. As HGV stock performed well, this investment allowed Apollo to realize value, with reports highlighting it as a successful turnaround rather than a loss

I found this too and it seems to come from AI. What I notice is that the HGV stock is only up about ten bucks since they acquired Diamond. If they had 13.7 million shares, it means they are up about $137 million. Still a big gap to make up in the $800 million initial loss that the sale of Diamond seemed to indicate. Perhaps they've earned dividends to narrow the $650 million they are still down? Or perhaps I am not looking at it correctly at all.

 

[vacationtime1]

It is extremely probable that Apollo received substantial amounts in the form of fees, dividends, and commissions from Diamond during the time it controlled Diamond. It is also extremely probable that Apollo received a hefty commission for arranging the sale of Diamond to HGV.

The $137 million of increased value on the HGV shares Apollo received doesn't count the value of the shares themselves at the time they were received.

I don't pretend to know all of the numbers here, but private equity firms are very good at paying themselves.

 

[dioxide45]

It is extremely probable that Apollo received substantial amounts in the form of fees, dividends, and commissions from Diamond during the time it controlled Diamond. It is also extremely probable that Apollo received a hefty commission for arranging the sale of Diamond to HGV.

The $137 million of increased value on the HGV shares Apollo received doesn't count the value of the shares themselves at the time they were received.

I don't pretend to know all of the numbers here, but private equity firms are very good at paying themselves.

Was the value of the shares received included in the $1.4 billion?

 

[vacationtime1]

Was the value of the shares received included in the $1.4 billion?

I have no idea. My comments were more about how private equity firms have multitudinous ways of being paid.

Post #4 above suggests that the $1.4 billion was the cash portion of the sale proceeds, but again, I don't know that.

 

[amsunshine]

Hilton Grand Vacations to Acquire Diamond Resorts, Creating the Premier Leisure Operator With the Broadest Offering in the Vacation Ownership Industry

Hilton Grand Vacations Inc. today announced that it has entered into a definitive agreement to acquire Diamond Resorts International, Inc. from funds managed by affiliates of Apollo Global Management, Inc., funds managed by affiliates of Reverence Capital Partners, and other Diamond...

www.apollo.com

This link seems to suggest: "Under the terms of the agreement, the Apollo Funds and the other Diamond stockholders, including the Reverence Funds, are expected to receive 34.5 million shares of HGV common stock, valued at approximately $1.4 billion, subject to customary adjustments. Upon transaction close, existing HGV shareholders will own approximately 72% of the combined company and the Apollo Funds will own approximately 28% of the combined company."

No mention of cash?

 

[1Kflyerguy]

I went to the HGV Investors page, and from a Mar 10 2021 press release, no mention of cash, just stock:

Transaction Details Under the terms of the agreement, the Apollo Funds and the other Diamond stockholders, including the Reverence Funds, are expected to receive 34.5 million shares of HGV common stock, valued at approximately $1.4 billion, subject to customary adjustments. Upon transaction close, existing HGV shareholders will own approximately 72% of the combined company and the Apollo Funds will own approximately 28% of the combined company.

 

[dioxide45]

I went to the HGV Investors page, and from a Mar 10 2021 press release, no mention of cash, just stock:

Transaction Details Under the terms of the agreement, the Apollo Funds and the other Diamond stockholders, including the Reverence Funds, are expected to receive 34.5 million shares of HGV common stock, valued at approximately $1.4 billion, subject to customary adjustments. Upon transaction close, existing HGV shareholders will own approximately 72% of the combined company and the Apollo Funds will own approximately 28% of the combined company.

Then it would seem the value rise in the shares is higher than I indicated in post #5 as that was based on 13.7 million shares. It narrows the game some more and perhaps dividends makes up more of the difference. Still, for what is nearly a 10 year old investment by Apollo, the return would seem rather low. Mr Cloobeck seems to be the one who came out on the positive end of things.

 

[1Kflyerguy]

He also does explain how the whole "cash based" travel options, like tours, cruises and events, are monetized by the industry through rental. He also touches on the Owner Benefit Level changes, though nothing significant.

I listened to the whole YouTube. While many people on Tug really downplay cash-based travel options, they seem popular with the general population. We did a Marriott Exclusive Collette tour a few years back. It certainly wasn't the lowest-cost way to travel, but my wife really wanted that particular tour, and it was only offered through Marriott.

I think the whole tour had about 20 or 25 people on it, and while I was chatting with them, I learned that almost all of them traded their MVC for the tour every year. I have a few co-workers who also seem to routinely trade their timeshares for hotels, cruises, etc.

We really enjoyed our tour, but i would not consider using my timeshare for that with any regularity.

 

[1Kflyerguy]

Then it would seem the value rise in the shares is higher than I indicated in post #5 as that was based on 13.7 million shares. It narrows the game some more and perhaps dividends makes up more of the difference. Still, for what is nearly a 10 year old investment by Apollo, the return would seem rather low. Mr Cloobeck seems to be the one who came out on the positive end of things.

Agreed, and perhaps they looked around and decided that Diamond would have a hard time competing with ever-larger competitors like HGV and MVC.

Originally, Diamond proposed buying HGV, but I think Hilton Hotels blocked that via their licensing agreement.