Don't forget VRBO this holiday season...

"inconvenient customer" - that's me

vineyarder said:

Of course you're a better judge of whether or not a DC is right for you...

but with statements like:

"the DC industry is built on a house of cards and it would not take much for it to implode. Just look at what happened to the founding DC - it ain't no more....."

and "This "DC Math" is the reason I am not a member of HCC or any other DC - the numbers never seem to make sense to me"

and "I don't need to loan a DC a lot of money to do this. I can choose from 88,200 homes/condos to rent in just about any location I can dream of"

and "Something tells me that as a renter I can spend much less and stay at the same place as the DC member"

you make it abundantly clear that YOUR OPINION is that a DC isn't right for you!

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I'm not sure why you want to put words in my mouth - wrong ones too.

I am not a DC owner today because not a single DC has convinced me to part with my money - it's just that simple.

Here is all that is required for any DC to get my business:

1) I want 80% of the CURRENT membership fee returned to me when I leave the DC

2) I want a performance bond (or something equivalent) put up to guarantee that I will get that 80% back

3) I want a 1 in/ 1 out to leave and no more than 90 days to get my money


Beyond that I'd have to study the residences the DC has and if they fit our vacationing needs. I'd also need to review their holiday policy since 75% of our vacations revolve around standard US holidays.


Will the DC market ever meet my demands? I hope so - especially if they want my business.

There is one exception to all the above - a new DC who is offering most of the above (during the initial startup phase - want 4 weeks too) and the membership fee is what I would call "throw away", which to me is $35k.

So far the DC industry is tied with the airline business for treating me like an "inconvenient customer" - one they hold their nose and are forced to do business with; a pesky consumer who wants a lot more than what's thrown at them.

PerryM said:

I'm not sure why you want to put words in my mouth - wrong ones too.

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I'm NOT 'putting words in your mouth'; these are all VERBATIM quotes from this one thread alone! Why do you make these statements if you don't mean them?

Here is all that is required for any DC to get my business:

1) I want 80% of the CURRENT membership fee returned to me when I leave the DC

2) I want a performance bond (or something equivalent) put up to guarantee that I will get that 80% back

3) I want a 1 in/ 1 out to leave and no more than 90 days to get my money

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Interesting; do timeshares fulfill these requirements?

Will the DC market ever meet my demands? I hope so - especially if they want my business.

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Perhaps... but 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.

So far the DC industry is tied with the airline business for treating me like an "inconvenient customer"

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Interesting observation, and very different from my experiences. I have found that every DC that I've spoken with was very interested in my business, to the point of being willing to offer customized packages to meet my particular needs (yes, even ER). In addition, they were all very professional, with no 'hard-sell' tactics. OTOH, my experience with the airline industry is also different from your experience; while airlines with whom I have no elite status are generally very poor at customer service, as a 3 million mile, lifetime Platinum member of AA, I find AA is exceedingly attentive to my needs, so I make every attempt to fly them whenever I can.

"Trust me"...my BS-O-Meter is pegged....

vineyarder said:

...

Interesting; do timeshares fulfill these requirements?

...

Interesting observation, and very different from my experiences. I have found that every DC that I've spoken with was very interested in my business, to the point of being willing to offer customized packages to meet my particular needs (yes, even ER). In addition, they were all very professional, with no 'hard-sell' tactics. OTOH, my experience with the airline industry is also different from your experience; while airlines with whom I have no elite status are generally very poor at customer service, as a 3 million mile, lifetime Platinum member of AA, I find AA is exceedingly attentive to my needs, so I make every attempt to fly them whenever I can.

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I am a proud timeshare owner – own a bunch of them. Each comes with:

1) A deed or ownership of the deeds
2) The ability to resell to ANYONE I’d like
3) Tons of state real estate laws to protect me – from the right to rescind to making sure the unit I bought wasn’t sold over and over again.

Let’s take one example – the prevention of the same unit sold over and over again. I have state laws, in whatever state I buy in, that track my unit and insure that it can’t be sold multiple times. We own WM credits and WM credits are illegal to be sold in Hawaii – they don’t track back to a deed that resides in the bowels of a state of Hawaii. Other states allow this and I believe I have protection on my side.

So where is the protection for a DC member to know that if 8 memberships are being sold for each condo and 9 weren’t sold? Who would really know? Is there a state real estate law protecting the DC owner? How about fraud statutes – would they apply in this case?

I can go thru example after example where I don’t like the answers provided by the DC industry – they always boil down to “Trust me” – and that comes from a guy over the phone that I’ve never met.

So who here has proof positive that ONLY 8 memberships are sold per residence and not 9? Where are the independent CPA audits backing up just this one claim? Maybe a single DC has it, don't know who it is, but this should be the #1 priority of the DC industry - backing up their claims with CPA verified documents since no state laws exist to do so.

So to conclude, there is a VAST difference between DCs and timeshares – too vast for my tastes at this time. Maybe a large corporation, one with deep pockets, will enter the market and I have a feeling that they would care about bad press and the typical BS that salesreps spout.

As an aside, I get a kick out of how virtually ALL timeshare owners here on this chat room know that BS is the number one sales tool to sell timeshares but when it comes to DCs no BS seems to be needed to sell them? My BS-O-Meter is pegged when DCs are mentioned – I just know there is a bunch of it out there. You can almost smell it in the air....

PerryM said:

So to conclude, there is a VAST difference between DCs and timeshares – too vast for my tastes at this time. Maybe a large corporation, one with deep pockets, will enter the market and I have a feeling that they would care about bad press and the typical BS that salesreps spout.

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I own several timeshares, several condo-hotels, used to own several condos, I am a member of one DC, and I even rented a house via VRBO. They are all different animals and any of those can satisfy different people.

Here is my "opinion" on the following:

1. Hotels - Ultimate in flexibility - just pay cash for what you want. This is fine for me on business travel or an occasional 5-star trip with my wife, but they really don't cater to family travel well.

2. Timeshares - if you buy a property at a good rice (usually resale) at a location and time (floating/fixed) and room type (1 bedroom vs 3 bedroom) in a single location you like to visit every year, then this is probably the lowest priced option for many people. I find trading a hassle and the quality of most timeshares leaves much to be desired. I like DVC, Marriott, Four Seasons.

3. Hotel-condos - my personal experience tells me that these are scam ripoffs for most buyers. Maui may be the only exception to this rule.

4. VRBO - interesting concept that can be executed much better. Where is VRBO 2.0? I personally hate the layout of their web site and find searching for a property equivalent to a visit to a dentist.

5. condos/vacation homes - offers the most upside, but also offers the most headaches. Been there, done that....not interested in doing it again any time soon. I may consider selling my house and buying 2-4 condos/townhomes in different areas when the kids are off to college.

5. Destination Clubs - these are my first and ultimate choice for anyone desiring upscale travel with families. I joined HCC, but also like ER, UR, PE, BH, DHH, Quintess....just about all of them. It is a RARE day to hear any complaint about the DC industry from a DC members.

PerryM said:

There is one exception to all the above - a new DC who is offering most of the above (during the initial startup phase - want 4 weeks too) and the membership fee is what I would call "throw away", which to me is $35k.

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Perry,

Why have you NOT taken advantage of the HCC trial offer or the PE preview memberships?

They both offer 100% refunds of your membership fees and very little risk.

Perry, what would you spend max on a club that fit your requirements?

Another DC bites the dust?

We were just about to take the plunge with trial membership at HCC, when we read about "Premier Destinations" suspending its activities. This is the second destination club to run into problems in two years.

Does anyone have any thoughts about how to evaluate the risks of an HCC membership? Since it is unsecured, aren't you really just rolling the dice and hoping for the best?

http://www.tugbbs.com/forums/showpost.php?p=408930&postcount=40
http://www.tugbbs.com/forums/showpost.php?p=412914&postcount=42

if you werent looking at joining them, not sure why that would make you feel uncomfortable... my global playground im not sure how many members/properties they had, but premier destinations never even really got off the ground... so it didnt "run into problems."

clearly larger clubs are not "running into problems" and no club is acting like T&H in terms of the terrible business model/practices/lack of transparency.

<<As an aside, I get a kick out of how virtually ALL timeshare owners here on this chat room know that BS is the number one sales tool to sell timeshares but when it comes to DCs no BS seems to be needed to sell them? My BS-O-Meter is pegged when DCs are mentioned – I just know there is a bunch of it out there. You can almost smell it in the air....>>

Personally, I've had very limited experience with the TS industry; we've never owned one, and have few friends who do. My brief brush with TS sales people (who impressed me as near-morons) did leave a strong odor of BS and I find the whole scene too dicey for my taste.

The concept of DCs is simple as pie by comparison. And by comparison, both risks and rewards of DCs are pretty apparent (as PerryM and others have outlined here) and so, imho, this product is much less BS-prone. It's true, you're taking big leaps based on trust rather than legal protection, but in the end, enforcing/protecting individual legal rights is usually pretty costly anyway. So as with any consumer item, you pays your money and takes your choice....

right, DCs are like any other club type entity. that seems to be part of what Perry doesnt like..

TS, OTOH, make their insane profits by ripping off initial buyers, mainly by misrepresenting the details (not technically lying).

Steamboat Bill said:

Perry,

Why have you NOT taken advantage of the HCC trial offer or the PE preview memberships?

They both offer 100% refunds of your membership fees and very little risk.

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If I remember correctly, and I could be wrong, I can't use that membership to vacation at holiday times. That's what "rings a bell" why I've not taken up that offer. It could also be that we are 100% booked 13 months ahead of time and that we have used all of our 4 weeks of vacation already - the DC would have to be beyond the 13 month mark.

That's what I thought. Not much there other than the word and reputation of the company. And since these are small, fledgling companies, you are taking a chance.

Sorry I missed the other threads.

Timeshares are often regulated, and to the extent they are real estate, your investment can be secured, although the ease with which you can enforce the security will vary depending on the jurisdiction it is in. I agree with Steamboat Bill's analysis of the downside of timeshares, though.

So, our choice come sown to the possibility of a superior product versus the risk of the company going belly-up.

And since these are small, fledgling companies, you are taking a chance.

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What don't you get about that? DC's are tiny, relative to leading timeshare companies-Hilton, Disney, Four Seasons, Intrawest, etc.

they are mostly in the luxury market.

luxury markets are smaller than the general market.

thats exactly what i want.

Agreed. But that's not my concern.

Mama didn't raise no fools, and I don't like to spend that kind of money without some guarantees.

examples of financial structures for several clubs >

http://lussocollection.com/page/assurance.jsp

http://www.bellehavens.com/me_protection.php

http://www.heliumreport.com/archives/658-crescendo-real-estate-portfolio-appreciates-8-8-in-2006

http://www.heliumreport.com/archives/487-interview-with-jonathan-harding-president-and-coo-of-ciel
"100% refundable...60% of deposit goes to capital reserves to acquire real estate; 40% in T-bills"

http://www.sherpareport.com/index2.php?option=com_content&do_pdf=1&id=117

http://www.tugbbs.com/forums/showpost.php?p=386513&postcount=67
DHH's resale model

you realize you sign a contract that would have these financials in it, correct?

range_life said:

That's what I thought. Not much there other than the word and reputation of the company. And since these are small, fledgling companies, you are taking a chance.

Sorry I missed the other threads.

Timeshares are often regulated, and to the extent they are real estate, your investment can be secured, although the ease with which you can enforce the security will vary depending on the jurisdiction it is in. I agree with Steamboat Bill's analysis of the downside of timeshares, though.

So, our choice come sown to the possibility of a superior product versus the risk of the company going belly-up.

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A secured "investment" does not buy me anything...nor does a deed...

Over time I have owned 4 TS weeks. 2 FS Aviara and 2 Hiltons. First Hilton was purchased from the developer back in '01. The rest were resales...

Sold all but the first Hilton after buying HCC membership.

The last one is being a pain. Bought it for 18K. The average market price for it is around 12-12.5K. A "secured investment" with deed gets me 33% less.

I'll bit the bullet if I'll get that price. After being on the market for 8 months, the best offer I can get is 10K...with fuzzy math on the contract to get it through ROFR.

Called up a broker known around Tug with whom I have done business in the past. Has an offer for 11.0K but will net me 8.5K after commision.

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 may have had a 100% chance of getting 80% back if my timeshare was a DC.

Before be 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.

Interesting, thanks. I hadn't compared these structures to HCC. Some seem to offer a greater level of security than does HCC. I have read HCC recent audit, but it seems to me that if the company folded, members' deposits would come second to investors and secured creditors.

The level of protection with respect to a DC varies from club to club. Exclusive Resorts has size and deep pockets behind it. Private Escapes/Ultimate also rely on their size. Others use legal structures such as Lusso. Some guarantee that a certain percentage of deposits are used towards the acquisition of real estate. Some offer a combination like Bellehavens and Crescendo (real estate is owned by the members and 70-90% of deposits are used for the acquisition of the underlying real estate and furnishings). The fact that neither My Global Playground nor Premier got off the ground isn't a negative. To me, it just means that the industry is maturing and people are doing their due diligence more and that upstarts are going to have a tough time competing without some sort of differentiation.

The destination club guides from The Helium Report and Sherpa are very useful in evaluating and doing the due diligence on destination clubs.

range_life,

what club has practices like T&H?

what large club is in financial trouble?

Perry,

what would you spend max on a club that fit your requirements?

TarheelTraveler said:

To me, it just means that the industry is maturing and people are doing their due diligence more and that upstarts are going to have a tough time competing without some sort of differentiation.

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agreed. its the same as people who join ER because its all they know, and then switch after learning about other clubs that might be more appealing to them.

PerryM said:

Here is all that is required for any DC to get my business:

1) I want 80% of the CURRENT membership fee returned to me when I leave the DC

2) I want a performance bond (or something equivalent) put up to guarantee that I will get that 80% back

3) I want a 1 in/ 1 out to leave and no more than 90 days to get my money

Click to expand...

Originally Posted by vineyarder
Interesting; do timeshares fulfill these requirements?

Click to expand...

Originally Posted by PerryM
I am a proud timeshare owner – own a bunch of them. Each comes with:

1) A deed or ownership of the deeds
2) The ability to resell to ANYONE I’d like
3) Tons of state real estate laws to protect me

Click to expand...

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 agree with vineyarder's above analysis.

its fine for perry to have requirements for a DC, and i agree with his/everyone's analysis of TS (although i dont consider TS and DCs comparable) but i disagree with his "conclusions?" regarding DCs.

With 99% of these DC companies private, you really have no idea as to whether they have financial trouble. Only the owners do ... or shareholders ... and DC members are not privy to that info. Even Steve Case could go under ... he's done it before and laughed all the way to the bank while his shareholders (Turner) lost their fortunes.

Brian

Kagehitokiri said:

range_life,


what large club is in financial trouble?

.

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