Premier Destinations Stumbles Early

What about the four others that got merged because they could not scale.

I am not talking about PE and UR merger.

That makes it 7.

Close the doors. No, Run for the hills. Call SEC. Take DNA samples. Anything. Anything.

PerryM said:

RIP DCs:​

1. Tanner & Haley (2006)
2. Premier Destinations (2007)
3. My Global Playground (2007)

.

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Any idea how many timeshares have failed. Do you have a timeshare RIP list?

There is some risk associated with all investments. Determine if the risk / reward trade-off is acceptable to you. Simple.

I don't want to continue this debate much further, but I still believe that only ONE Destination Club can truly be considered a failure and that was T&H.

T&H started in 1999 and was bought by UR in 2006. T&H had a 7 year run and members were given an option to join UR, but they did not live up to their original promise and members did lose deposits. T&H overpromised and underdelivered and that is why they failed.

To classify Premier Destinations and My Global Playground in the same category is a disservice to all Destination Clubs as they tried to jump on the destination club bandwagon, but couldn't make it.

Perry has posted dozens of times about how easy and quick it would be to start a new DC (overnight), but the current market conditions indicate that this may be MUCH harder than he or anyone else realizes. Starting a DC may be easy, but growing it is obviously much harder.

Thus, I only consider T&H to be included on the RIP list and because 600 or so members transfered to UR, I would hardly consider that a Titanic disaster. Of course, there are about 200 or so individuals that may not have fared so well.

The stock market crashed in 1929 and 1987, and was clobbered in 2000-2002 but people are still buying stocks (including DIA).

It is highly doubtful that Exclusive Resorts (the largest DC with 3,000 DC memebrs) would ever go bust.

GOLFNBEACH said:

Any idea how many timeshares have failed. Do you have a timeshare RIP list?

There is some risk associated with all investments. Determine if the risk / reward trade-off is acceptable to you. Simple.

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I'm sure a number of "Mom and Pop" timeshares have done a Dinosaur too - but there is a HUGE difference here - a timeshare owner is an owner with a deed and can continue to use the timeshare as long as the HOA decides to continue.

A DC is a completely different animal - there is NO ownership of these 3 DCs and they may or may not continue and the members may or may not have the same membership rights.

Again, I am willing to remove any deceased DC from the RIP list if that DC had NO members but the founders. If we can't determine that we should err on the side of caution and include the DCs.

I have not doubt that starting a DC is a weekend project and that there will be hucksters out there that take advantage of the fact that there are NO laws to protect DC owners. Perhaps the 2 DCs in question fall into this category - a con and why should they not be in the RIP list?

There is a lot of misinformation being posted here.

IMHO, there are 7 on the RIP list. I am not settling for 3.

Make it 7.

Bourne said:

There is a lot of misinformation being posted here.

IMHO, there are 7 on the RIP list. I am not settling for 3.

Make it 7.

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Actually, I thought about starting one, but was too lazy to continue, so make it 8.

vineyarder said:

Actually, I thought about starting one, but was too lazy to continue, so make it 8.

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Ditto. Make it 9.

He he...you all are killing me. I wonder if there are any official statistics on "businesses" that were never started but considered failures?

Uh, No...because they weren't business failures, they were business ideas that never came to fruition.

PerryM said:

I'm sure a number of "Mom and Pop" timeshares have done a Dinosaur too -

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So you consider Sunterra (Timeshare) with 300,000 customers a "Mom and Pop"? Yes, they filed for backruptcy.

And why don't you consider Premier Destinations and My Global Playground "Mom and Pops"?

GOLFNBEACH said:

So you consider Sunterra (Timeshare) with 300,000 customers a "Mom and Pop"? Yes, they filed for backruptcy.

And why don't you consider Premier Destinations and My Global Playground "Mom and Pops"?

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Because it wouldn't fit the fallacy:

All apples are purple.
This apple is red.
Ergo, this is not an apple.

GOLFNBEACH said:

So you consider Sunterra (Timeshare) with 300,000 customers a "Mom and Pop"? Yes, they filed for backruptcy.

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This is new news to me...I don't follow Sunterra...but 300,000 customers is a lot!

Steamboat Bill said:

This is new news to me...I don't follow Sunterra...but 300,000 customers is a lot!

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Sunterra declared bankrupty in May 2000 with $850 million in debt. The company was delisted from the New York Stock Exchange that summer.

And yes...they made a comeback.

Kagehitokiri said:

another gone. website is down.
http://www.premierdest.com/
http://www.heliumreport.com/archives/322-interview-with-premier-destinations-ceo-vicki-vorhees
looks like they only had 1 property and needed 20 members to launch 9 more properties, and they only got to 15.

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Kagehitokiri said:

was just reminded of something while looking, im pretty sure oyster circle's miami property was acquired from my global playground.

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there are a number of other clubs that went nowhere. im not going to look them up. although i believe one was called emperor's club. one could search helium report, and use waybackmachine. bill also mentioned a couple here IIRC.

worldwide private residences looks like the next to go, unfortunately. i really like their model. they went from 3 properties down to 2. so they cant have any more than 20 members right now.

any comments on this point based club PerryM? >

Kagehitokiri said:

another thing that comes to mind, from what youre talking about is a club theyve got in australia with homes, cars, yachts, etc - more like a car club with other stuff. (point based) ill try and find it again and link it. again, not something im really interested in personally, because usage of the high value stuff is so limited. although i really dont remember what i worked out for the daily costs etc.. here it is >
http://www.limitededition.com.au/

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ive got some unique ideas for a DC, but itll be a while before i can get the kind of capital i would need

Anybody can create any type of list they want. I simply think that classifying a start-up DCs that never launched into the same category as a up and running DC is a disservice. There are dozens of DC clubs that are in the planning stage and one is in Ft Lauderdale (Abundant Life I think) but they may never reach critical mass. I believe there are different types of risk for a start-up DC vs an established DC. If T&H never went bankrupt, we would never have these conversations.

The failure to launch for new DCs is actually a good signal for the industry as this means it is harder for a new company to enter the market.

I have always advised sticking with the top DCs in terms of membership numbers.

and again just look at T&H's business practices.. no security, no transparency, so they blew all the deposit money gambling, rather than buying properties.

compared to, for example, ER. ER has sold (and replaced) a number of properties already, and they could always flip some of the ones they bought in bulk to make quite a bit, basically instantly. for things like Poro Poro, they could sell to a developer who could then expand, and charge whatever they wanted for the homes.

The Destination Club Association was formed in 2006 created a Code of Conduct and Best Practices for the Destination Club Industry.

Current DCA members include - High Country Club, Solstice, Private Escapes, Ultimate Resort, Exclusive Resorts, and Quintess.

Not that this is any guarantee, but I would only recommend someone joining a club that is a member of the DCA.

Kagehitokiri said:

and again just look at T&H's business practices.. no security ...

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I'm curious what you mean by the word "security".

Membership deposits are an unsecured obligation at all of the big clubs. In fact, since all of the clubs have mortgage debt encumbering their properties, the membership deposits are actually subordinated debt.

GOLFNBEACH said:

Sunterra declared bankrupty in May 2000 with $850 million in debt. The company was delisted from the New York Stock Exchange that summer.

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Unless I missed something, this case illustrates how DC members have a financial risk that timeshare owners don't have.

The principal impact of the bankruptcy was on the creditors of Sunterra, i.e. the entity that managed and developed the timeshares. Because timeshare purchasers bought deeded property, the owners continued to own the same real estate they owned before the developer/managing agent went bankrupt.

That's a significant difference versus the treatment of DC "members" when a DC goes under. The "members" are close to the bottom of the capital structure and get wiped out unless there's something left after the secured creditors that have liens on the properties have been paid.

RLG said:

Unless I missed something, this case illustrates how DC members have a financial risk that timeshare owners don't have.

The principal impact of the bankruptcy was on the creditors of Sunterra, i.e. the entity that managed and developed the timeshares. Because timeshare purchasers bought deeded property, the owners continued to own the same real estate they owned before the developer/managing agent went bankrupt.

That's a significant difference versus the treatment of DC "members" when a DC goes under. The "members" are close to the bottom of the capital structure and get wiped out unless there's something left after the secured creditors that have liens on the properties have been paid.

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This is/was my point - timeshares are protected with hundreds of real estate laws spread over 50 states and that deed really means something - ownership.

A DC is just a pile of paper inflated with salesrep's promises. Not one law to protect a DC owner, not one bureaucrat to insure the i's were dotted and the t's crossed, not one real estate lawyer to make money by insuring that the paperwork was filed correctly with the state - nothing.

RLG said:

Unless I missed something, this case illustrates how DC members have a financial risk that timeshare owners don't have. .

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Seems to me the financial risks are different. TS ownership does not guarantee TS owners the ability to resell -- you're at the mercy of the marketplace. As well, TS owners have limited -- or no control on MFs, which can be jacked up out of sight. OTOH "investment" in most DCs involves a significant one-time membership fee ($30,000+++) and on-going dues, with no legal protection beyond the contract with the club. However, a few high-end DCs are designed to give members legal entitlement to a share of the club's properties. It really depends on the particular DC's business model.

PerryM said:

This is/was my point -
.

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Perry - let's look at the facts. You indicated that a number of "Mom and Pop" timeshares may have gone through bankruptcy. I supplied facts that Sunterra, one of the largest timeshares with 300,000 customers filed for bankruptcy back in 2000 with $850MM in debt.

Last week it was misinformation about Dow Diamonds and their performance compared to the S&P 500. I supplied you with the correct facts and historical graphs to prove it.

It might be easier to make your points with accurate information.

RLG said:

Unless I missed something, this case illustrates how DC members have a financial risk that timeshare owners don't have.

The principal impact of the bankruptcy was on the creditors of Sunterra, i.e. the entity that managed and developed the timeshares. Because timeshare purchasers bought deeded property, the owners continued to own the same real estate they owned before the developer/managing agent went bankrupt.

That's a significant difference versus the treatment of DC "members" when a DC goes under. The "members" are close to the bottom of the capital structure and get wiped out unless there's something left after the secured creditors that have liens on the properties have been paid.

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Good point, however, both timeshare "owners" and DC "members" have significant risks in the event of a bankruptcy.

Real estate law is very complicated and there are differenet types of timeshare contracts, and various forms of bankruptcy. Rules vary by country and state. Disclaimer...I am not a RE or bankruptcy lawyer. Nuff said.

A timeshare may also be "deed/title" or a "right to use." With a right to use, you are generally out of luck if the develper goes out of business.

Even with a deed there is significant risk. A timeshare developer often uses timeshare purchase money or receivables to fund the construction, often as collateral for loans. If the develper goes bankrupt the project may never be finished.

A timeshare contract may or may not have "escrow," "non-disturbance" or "non-performance" clauses. Look these up and understand them.

With a completed project a deed does provide some security, however, it may also make the owner responsible for a lot of debt not paid by the management/resort. A deed carries responsibility to pay for the cost to operate the resort. Special assessments may be required to help pay for unexpected maintenance, repairs, taxes, lawsuits, etc.

The DC vs TS debate will probably never end on this bbs when it comes to the security of a deed (TS) vs the security of a contract (DC).

The interesting thing is that DCs model very closely to private golf clubs and I wonder how many people lose money as a result of a private golf club closing down.

Several private golf clubs have membership fees well over $100k.

IIRC in Japan in the 80s, golf memberships sold above the $5MM mark.

theyre coming back now, read an article recently, dont remember what the current ceiling is like.

im very much a "club" person, not so much in terms of country clubs or private clubs, but in terms of things that have membership benefits. sometimes you can do better by joining something with access to multiple clubs etc, rather that joining a particular club directly. thats kind of how i view the difference between fractionals and DCs.

i really like the DC model in general. i also like WPR's model (being basically "free"). and i also like onekey's model, offering discounted rentals.

GOLFNBEACH said:

Perry - let's look at the facts. You indicated that a number of "Mom and Pop" timeshares may have gone through bankruptcy. I supplied facts that Sunterra, one of the largest timeshares with 300,000 customers filed for bankruptcy back in 2000 with $850MM in debt.

Last week it was misinformation about Dow Diamonds and their performance compared to the S&P 500. I supplied you with the correct facts and historical graphs to prove it.

It might be easier to make your points with accurate information.

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I don't know what you are talking with DIA - must have missed that one.

My point was and is very simple - DCs are totally unsecured and offer NO sort of consumer protection what so ever. This compared to timeshares.

Show me ONE I say ONE timeshare where the owners have lost their deeds - their access to the units they bought.

Just one is all I'm asking for - just one.

DC's have NO protection at all.

That's my point.