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Apollo Group looking to buy HGVC [Merged]

Discussion in 'Hilton Grand Vacations Club / HGVC' started by toontoy, Aug 20, 2019.

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  1. CalGalTraveler

    CalGalTraveler TUG Member

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    Sad but true. Who is in our corner?

    @dayooper nailed it when he said "It is the devil we know." Blackstone is more aligned with our interests than Diamond. Jury is out on Blackstone because they have been involved before and materially improved the company. But @Jason245 point is well taken.

    So far all I can find on Apollo is that they bought Great Wolf water parks, raised prices, added a few locations via acquisition and then sold. Not rocket science. Raising prices is not value add for customers unless they materially upgraded the properties or business model. But perhaps there is more to this story.
     
    Last edited: Sep 1, 2019
  2. Jason245

    Jason245 TUG Review Crew: Veteran TUG Member

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    You can look on the dri part of this forum.. but I remember a lot of unhappy customers fleeing for the hills.

    I also remember resale values falling alot..

    Sent from my SM-N950U using Tapatalk
     
  3. dougp26364

    dougp26364 TUG Review Crew: Veteran TUG Member

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    I fled DRI under Cloobeck when THE Club fees we paid increased from $135/year to $545/year with NO value added. That on top of MF’s approx those of Marriott but with DRI putting $50 into reserves while Marriott was putting $245 into reserves.

    It was my understanding Apollo stabilized some of these fee increase, in some cases lowering fees.

    One article I read (older) was the speculation Apollo was returning to its “junk bond” roots when it purchased DRI. Perhaps that article is right since they’ve hung into DRI instead of selling it off at a profit.
     
  4. goaliedave

    goaliedave Guest

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    nothing would change if HGVC was bought by Apollo or DR. DR bought highend Intrawest and left them as a separate (renamed Embarc) brand. We DR owners have no new access to Embarc.

    I also own at Sheraton VC which has gone thru a few buyouts. New owners haven't changed anything except the name. We haven't been integrated forcibly into any new ts or Marriott.

    my 2c

    Sent from my SM-J327W using Tapatalk
     
  5. dayooper

    dayooper TUG Member

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    Have the MF ‘s and fees substantially increased or have they been somewhat normal (HGVC has been around 4%). It’s good to know the systems are remaining the same. It’s my biggest fear is whomever purchases the system will make substantial changes.
     
  6. Bao Nguyen

    Bao Nguyen TUG Member

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    I have same concerned about MF increased.
    https://tugbbs.com/forums/index.php?threads/significant-mf-increase-at-polo-towers.294601/

    Harder to exchange from mainland to Hawaii . Diamond sell extra costs for Hawaii . HGVC is easy to exchange internal.
     
  7. dougp26364

    dougp26364 TUG Review Crew: Veteran TUG Member

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    Generally speaking, mergers present new options while leaving existing options in place. In this case, I doubt anything substantial would change for HGVC except they might be presented the option to join DRI’s THE Club with the opportunity to book all of those resorts. For some this would be a welcome option as there has been pent up demand for Maui. For us, we’re content to use HGVC for Vegas and maybe occasionally the Big Island of Hawaii.
     
    CalGalTraveler and dayooper like this.
  8. dayooper

    dayooper TUG Member

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    As long as my ownership stays close to where it is now, than I will be happy.
     
  9. goaliedave

    goaliedave Guest

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    everything is normal, same as if there was no purchase. when PepsiCo purchases a company they don't change it. maybe they resell it, but I dont know if any issues at hgvc so why would they change it?

    Sent from my SM-J327W using Tapatalk
     
  10. escanoe

    escanoe TUG Member

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    I am mostly hoping to avoid bad things as merger talk continues. One thing DRI has that I would not mind, however, is access to more Virginia Beach properties. I can get good enough in VB trading through RCI that I am unlikely to upgrade anything at developer prices, though.
     
  11. GT75

    GT75 Moderator

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    Thanks for the information.
     
  12. nuwermj

    nuwermj TUG Member

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    When Diamond acquired Club Intrawest (now Embarc) they had every intention of merging them into Club Diamond. There's good of evidence about this plan if anyone would like it. But Embarc members organized effective pushback and Diamond changed it's plans. This pushback is, in my view, the only reason fees haven't increased much more. Diamond has "kicked the can down the road" by under-funding capital reserves as a way to redirect more income to it's corporate overhead. So, when the resorts need upgrades a crisis of some kind will arise.

    I don't agree that nothing changed for Embarc members. Diamond has created (or modified) a tiered benefit system that is all but mandatory for new buyers and members wishing to add points. Diamond also aggressively rents inventory and members claim availability under Diamond is more difficulty to find.

    On a slightly different tangent: Who ever ends up with HGV, would it not be true that a trust fund based points system will be introduced?
     
  13. dioxide45

    dioxide45 TUG Review Crew: Veteran TUG Member

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    I would think one would be introduced no matter what. Their investors are asking why they don't have one yet when all the other big players are in that game. Sale or no sale, I suspect the next property to be trust based and perhaps a push to buyback intervals to put in the trust and upsell people in to pure points. Much like Vistana is doing today.
     
  14. terces

    terces TUG Member

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    I asked the question earlier in the thread if there is anything in the legalese that would bind HGVC to continue the Club? I should read the documents again, but do they have a way out of offering the Club?
     
  15. CalGalTraveler

    CalGalTraveler TUG Member

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    Really appreciate these perspectives on Diamond.

    To answer your question on HGV trust: It's quite possible. HGV is different (see below), however they may be forced by Wall St. in order to have inventory available to sell and avoid a revenue hiccup similar to this past quarter.

    HGV has a large Asian (especially Japanese) customer base. According to the HGV CEO, Asians don't trust and won't buy trust points portfolios. (IMO for good reason - I don't either)

    Historically, MVC didn't have a points program for trading prior to introducing their DC trust in 2010. So the value prop of using points to book shorter/longer stays instantly online instead weekly OGS via II was strong. Although DC has a higher MF, the system allows owners to rent or rent out their points, so owning a basic level of points and renting could make sense since their trust is now more robust.

    With this value proposition it has been 9 years and only 60% of the deeded weeks owners have enrolled in the system because they charge a fee. MVC has not resorted to reported strong-arm Diamond-like tactics because they are viewing this long-term and know that customer satisfaction and repeat business is important in the timeshare world. HGV gets this too.

    Vistana points are tied to deeds automatically similar to HGVC. Because Vistana owners already has a points system, the Vistana Flex Trust hasn't been popular. Key difference is you can book at 12 months for the trust inventory for a collection of properties instead of just your home resort (i.e. Westin, Sheraton, Mexico) instead of 8 for their "club reservations." The problem is you are limited to the weeks that are in the trust which are mainly low value mud weeks from defaults, ROFR and none of the OF/OV units for Kaanapali.

    Vistana was luring people with Hawaii (IV only), or a limited number of ski weeks and were asking owners to pay $10 - $30k to turn in their unit for a similar points with a higher MF and limited inventory! In addition Flex points have zero resale value because resale buyers only can book in their limited home resort trust and don't have access to StarOptions (system-wide Club) inventory. Certain Vistana mandatory deeded legacy weeks i.e. WKORV north and south, WSJ (specific building), SVV (Bella, Key West), and WKV give resale buyers full access to their Staroption points program in their CC&Rs. Why would any rational person give up that value (and pay money for) a flex week with uncertain inventory and zero resale value that would be difficult to sell?
     
    Last edited: Sep 2, 2019
  16. dioxide45

    dioxide45 TUG Review Crew: Veteran TUG Member

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    Mainly because they aren't rational or don't have all the information. Many people have no idea about the resale market or what a mandatory week even is. People are indeed turning their mandatory weeks in to Vistana and buying new Flex. People have even turned in WKORV and bought Nanea. A similar trust product, but at least it has Hawaii 8-12 months out at a specific resort.
     
  17. nuwermj

    nuwermj TUG Member

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    Thanks for the feedback. The question was only slightly genuine, it was mainly rhetorical. If Blackstone takes HGV private it will be to protect it from investors so that substantial changes (like a trust fund point system) can be made. I don't see Blackstone getting involved and just letting things continue as they are.
     
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  18. GT75

    GT75 Moderator

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    I know there are approximately 22K Embarc members with 9 Embarc resorts. How many total diamond members are there?
     
  19. nuwermj

    nuwermj TUG Member

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    In their press propaganda, Diamond claims "more than 400,000 members". They count anyone with a relationship to the company. Diamond manages about 110 resorts. On average about half the deeds at these resorts are owned by individuals and the rest are in the various trust funds (there are nine trust funds). Owners in the trust funds are members of Diamond's Club and some deeded owners are members. However, many deeded owners have no relationship with the Club. They own their use-rights (fixed week or flex) and use RCI or II for exchanges. All points and deeded owners are included in Diamond's 400k number. The last time I saw figures for Club membership was the beginning of 2018. At that time the figure was about 180,000.
     
    Last edited: Sep 3, 2019
  20. terces

    terces TUG Member

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    Interesting stats. The HGVC Las Vegas Boulevard has 714 units x 52 weeks = 37,000 weeks total, potential members could be much more than this considering eoy - lets just guess a total of +50,000 from one resort, vs Diamonds 400,000 in 110 resorts...…?
     
  21. terces

    terces TUG Member

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    Wondering outloud why Bershire Hathaway doesn't buy Hilton and HGVC. They like to buy entire companies so they can get their hands on the cash flow AND leave management in place.
     
  22. Bao Nguyen

    Bao Nguyen TUG Member

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    Diamond all small resorts. They just bought Modern Honolulu about 350 rooms. Waikiki and big island all HGVC mega resorts.
     
  23. GT75

    GT75 Moderator

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    I would estimate < 30K members for Boulevard then because many members own more than 1 property.

    I think that HGV has ~300K members. Of that 20% are Japanese. Now, I would think that most members are part of the club but I know that you don't need to be in some of the affiliates (I haven't seen any statistics on the number).
     
  24. Sandy VDH

    Sandy VDH TUG Review Crew: Elite TUG Member

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    Elara has 1201 units X 52, that is over 62K just for Elara. Yes again, someone can own more than 1 unit.

    I also assume the 1201 listed is the HGVC number of units, EXCLUDING the Westgate inventory.
     
  25. CalGalTraveler

    CalGalTraveler TUG Member

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    FWIW...Wikipedia cites 260,000 members for HGVC. No listing for Diamond. Note: Page also contains warnings as to accuracy because these are figures cited on their websites but not corroborated. Privately held like Diamond could be grossly inaccurate because they are not under SEC scrutiny.

    upload_2019-9-3_8-37-27.png
     
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