Westin Aruba?

[Docklander]

Anyone hear anything more about when they're going to be marketing this? Still nothing on the website (that I can see) and I thought September had been mentioned as a possible start date.

 

[LisaRex]

MyStarCentral only says construction will begin "soon."

Of course, given that a hurricane (Felix) just passed over Aruba, construction may well be delayed depending on what sort of damage the island incurred.

 

[Ken555]

The WKORV sales reps yesterday wouldn't comment on Aruba other than "did you hear about the storm down there?", and that nothing has really happened yet. They were clearly pushing Maui and Princeville as the only options at the moment.

 

[nodge]

On Aug 2, 2007 SVO’s parent corporation reported the following regarding the status of Aruba, Maui (Further North), and the Sheraton Kauai . . . ..

Q2 2007 Earnings Call to Shareholders & Investors, Aug 2, 2007

Vasant Prabhu – CFO – Starwood Hotels & Resorts Worldwide Inc.

“In our vacation ownership business originated sales growth is strong in Orlando and our project in Cancun is also selling very well. We expected originated sales trends to pick up in Hawaii, as new owners were among some of our best customers for additional weeks, take possession of their units in the second phase of our Maui project which opens in July.

SVO remains on track to deliver as per expectations in 2007. However, SVO has experienced some delays on new projects in Aruba, the next phase at the western Maui and the Sheraton Kauai. As a result sales and construction starts are later than previously anticipated for these projects. We have received all necessary approvals in Aruba at this point and the project is moving ahead. We're also making good progress in both Maui and Kauai.

We expect to receive all necessary approvals in Maui and start the project in the second half of 2008 with Kauai starting in 2009. However, all these projects will not be as far a long as previously anticipated on the percentage of completion basis by the end of 2008. As a result of these delays we expect that SVO reported profits could decline by as much as a $125 million in 2008, versus where they will end up in 2007. Since these projects are moving ahead and will be completed these projects will be recognized with a 12 month to 24 month delay, versus prior expectations.

Business fundamentals in the vacation ownership business in terms of tour flow, close rates and pricing remain healthy for projects currently in sales. And 2009 profits at SVO should be up sharply and in line with prior guidance. While it is too early to provide 2008 guidance, given the significant impact on 2008 of the SVO delays, we wanted you to have this information.”

Source of Transcript: Seeking Alpha (307 words copied above, less than the 400 authorized limit) Hear the full call via this link

Let’s see where do I begin . . . ..

I guess the official report on Aruba is SVO “has experienced some delays on new projects in Aruba, the next phase at the western Maui, and the Sheraton Kauai,” These projects all have a “12 month to 24 month delay, versus prior expectations.” So I guess we can assume that since Aruba at least has its permits, it must have the least delay. Accordingly, its delay must only be 12 months (plus any new delay associated with the hurricane).

Gee, I wish I could sweep a US$125,000,000 shortfall away that easily. Somehow, I think my creditors would ask a few more questions regarding that one.

The biggest surprise to me from Starwood’s comments was this sentence:

“We expected originated sales trends to pick up in Hawaii, as new owners were among some of our best customers for additional weeks, take possession of their units in the second phase of our Maui project which opens in July.”

First of all, if you are speaking on August 2, 2007 about something that happened in July 2007, why would you only talk about expectations? Either sales “picked-up” at Maui in July or they didn’t. Why tell your shareholders only that you had “expected” the sales to pick-up, unless of course they didn’t. Then you would just keep silent regarding this issue, which SVO and Starwood certainly have no problem doing.

Moreover, the reports here on TUG suggest that many WKORV-N owners, all of whom bought their units sight unseen based on a glossy brochure and written promises from SVO of a lazy river (earliest purchasers only), king sized beds in the lock-off side (all purchasers) and full ovens in the large one-bedrooms (all purchasers), were disappointed when they first arrived in July (apparently with their frozen turkeys in their luggage) only to find that all of these promised features are missing from the actual units they purchased.

Did Starwood really “expect” that new owners would line up to purchase “additional weeks” when those owners are surprised, after finally seeing their purchased unit for the first time, with the news that what SVO promised them isn't what SVO actually delivered?

On the plus side, at least SVO’s parent company recognizes the value of us existing SVO owners to its bottom line. Maybe some of that recognition will trickle down to the top management at SVO someday. But for now, they seem way too busy trying to put lipstick on that US$ 125,000,000 shortfall.

-nodge

 

[Ken555]

Moreover, the reports here on TUG suggest that many WKORV-N owners, all of whom bought their units sight unseen based on a glossy brochure and written promises from SVO of a lazy river (earliest purchasers only)

I inquired about the lazy river yesterday in my "update meeting", and was told that it was never part of the plan. Of course it wasn't! After all, they can't admit to making that mistake...

I really like what they've done here. BUT... there is a pond and grass lawn and not much else for quite some distance near the restaurant. It couldn't have been that difficult to use some of that space to extend the pool.

But for now, they seem way too busy trying to put lipstick on that US$ 125,000,000 shortfall.

The way I understand it is that they can't claim the money until occupancy is allowed in the buildings. The money remains in a trust account (or similar) waiting for that time, and only then can they declare it as revenue. Of course, if this is true then the only risk on the money is a building problem... purchasers would have difficulty reclaiming their purchase price.

 

[nodge]

I really like what they've done here. BUT... there is a pond and grass lawn and not much else for quite some distance near the restaurant. It couldn't have been that difficult to use some of that space to extend the pool.

Plus they need someplace for all of us existing owners to stand while we wait in line to buy our additional weeks.

I figured that whole $125 million thing could be attributed to one of those pesky accounting requirements. But $125 million here, and $125 million there, and you are eventually talking real money.

-nodge