- Joined
- Jul 19, 2007
- Messages
- 7,128
- Reaction score
- 1,886
- Points
- 599
- Location
- Carlsbad, CA
- Resorts Owned
- Marriott: Maui Ocean Club Lahaina Villas (3BRx5), Ko Olina, Shadow Ridge II, Willow Ridge, Aruba Ocean Club, DC Points HGVC: Flamingo, Sea World, I-Drive, Starwood Bella (x4), SDO, TradeWinds, Worldmark
I agree that management needs to answer to these issues. A lot of shareholder value has been wiped out since May 1. If you look at where the stock was on May 1 before their 1Q earnings, it was $32/share. After the 1Q miss and now the 2Q miss they are at about $26.50 - a 17% drop. By all accounts, it's because of the lack of high end inventory, mainly in Hawaii, so someone in management should have to answer to that.
The clear impression I got was that Ocean Tower sold out a lot faster than they had expected. Given the lead time on these kinds of projects - legal approvals, registration of each phase, etc. - maybe they couldn't accelerate it much, or maybe the 2020 target for Phase 2 is accelerated. I'm not sure what the original phasing plan was and if the current 2020 schedule was what was originally planned or an acceleration of the original plan.
Any idea how far along they are on selling-out Kings Land Phase III? Could that be already sold out? Or maybe that's the "mid-tier inventory" they spoke of trying to shift buyers into, but they didn't bite. Since a big part of their Hawaii sales is targeted to Japan, perhaps the Japanese are attracted to the hotel-like project at Ocean Tower as opposed to the more condo-like Kings Land.
I think you're right and they are seeing more people than expected trading in their Kings Land week for the Ocean Tower week. That creates two problems -- too much absorption of the higher demand stuff and too much supply of the mid-tier Kings Land (if I'm correct that this is happening). I don't know why they are making it so easy to upgrade, which creates this (predictable) problem.
Personally, I much prefer Kings Land so I'm happy to see more supply at KL -- that's where I want to use my HGVC points. Interesting. Thanks for posting this.
Best,
Greg