Exclusive Resorts Party 9-20-07 -> UN-Invited!

[Kagehitokiri]

IMHO it depends on what exactly happened though.. i mean, if this guy was told something by someone else for example, we dont know what they told him.. it seems unclear to me based on his followup email.

seems bill told him he was HCC member at some point later on? but where did the "blogger" reference come from?

 

[travelguy]

7. ER should strongly consider adding a new category to their membership to focus on homes that cost $1-2m and have 2-4 week membership plans that would have an average cost per night in the $500 range…or think about buying HCC. I am not kidding about this as I personally think this level of membership represents the “DC Sweet Spot” and the number of members that would join could easily be over 10,000 in a few years. At these numbers, this category would produce more revenue than their current offerings. Is anyone listening?

I don't believe that ER has the ability to be profitable at this price point, let alone be competitive. The reason that High Country Club is successful in this niche is because of their corporate efficiency and other attributes that I won't get into here. You can bet that other DCs and outside players have all done the biz model mock-ups of a DC at the HCC price points and determined that they are better off at the mid and upper price points.

 

[Kagehitokiri]

in addition to HCC, PE had their $800K tier, and some of portofino's "$1.5MM" tier seem to me to be more comparable to $800K > $1MM..

but i agree, ER is more concerned with maximizing profit/number of homes, and any additional "watering down" especially with a new lower tier doesnt serve their model. look how long it took them to add the affiliate membership. and not that many people join at that level anyway. its like they offer it more to get people in at a lower price in the hopes that theyll upgrade (they probably ran studies/models/etc and have been vindicated through experience i would imagine)

 

[travelguy]

IMHO it depends on what exactly happened though.. i mean, if this guy was told something by someone else for example, we dont know what they told him.. it seems unclear to me based on his followup email.

seems bill told him he was HCC member at some point later on? but where did the "blogger" reference come from?

Kag (with all due respect),

Totally disagree with you on this one.

It's does not matter WHY the ER sales rep responded in the manner that he did or where the info came from ... the issue is HOW he responded! The manner in which he responded is totally irresponsible for any salesperson and, based upon the circumstantial evidence, is part of a larger corporate culture attitude.

 

[Kagehitokiri]

IMHO there IS the "what if" - what if someone told scott that bill had "blogged" that he had tricked ER into letting him attend even though he wasnt interested or something.. (something negative/etc)

i mean, thats kind of like if a journalist said something negative about someone before going for an interview. or that they were going to spin in a negative light. and the subject of the interview overheard this. IF bill was a blogger. i guess im just saying im reserving final judgement on just how bad it was since i dont know exactly what happened. - just the 2 messages from scott to bill.

i am NOT looking to provide a general defense for his actions.

i DO agree ER's sales arent the greatest. (more like TS, car, or a too-hip-for-its-own-good club)

but i also am NOT sure that sales mgmt etc REALLY reflects on things like customer service, beyond things like not taking certain comments/criticism to heart - like if someone was making property selection suggestions that do not fit with ER's model of buy bulk cheap.. (and even if other clubs have much better service - that doesnt necessarily mean that ER's is terrible)

hopefully we will hear some more experiences from the 1-2 ER members on the forum over time..

 

[PerryM]

Only one thing matters....

There's only one thing that matters - free food.

If there's free food or adult beverages then Bill should go, if not screw them.

This is like comps at a casino - no comps, just leave.

If Bill does go I think the clowns at ER now realize that insulting an individual can have repercussions that can bite them in the ass. Maybe these guys are just figuring this out, if so we have provided a valuable life lesson and they should thank us - free food would be nice. Outback steak house coupons are a great way to say "I'm sorry".

 

[LTTravel]

lets be fair here. ER is not the only club that the sales people make mistakes. I have spoken to other clubs who have told me "If you don't join us, join anyone else, but don't join ER". I have been told that members of ER can't get any reservations. That they are all unhappy.(which I have been told by members is not true) I don't mind other DC's comparing themselves to ER but compare based on the facts, such as a refund of 100% the first year if you are unhappy like Quintess, or a lower yearly membership dues increase such as CPI + 2% instead of CPI + 4.5%, or no adjustment to market every ten years, or direct comparision of all their homes to all of ER's homes, not just their lower valued homes. If you are able to dish out $450,000 for a membership, you want to be treated different than someone who wants to buy a cheap TS where they feed you runny eggs and bacon and pressure sell you. This does not mean that ER should be disrespectful, which I think happens occasionally, but I think that it may happen at other companies and it is easy to pick on #1 which has been increadibly successful in increasing membership while other clubs, which appear to be a better value, have been struggling. I think that the comparisons should be based on the merits of the clubs, not a mistake a salesperson made.

 

[Kagehitokiri]

I have spoken to other clubs who have told me "If you don't join us, join anyone else, but don't join ER".

oh now im curious - which clubs? (you could say as long as you dont name reps, couldnt you?)

another thing that was kind of interesting is when i talked to ER, i had just wanted to ask about the centurion discount - i didnt even know if i was calling amex or ER. but they kept the conversation going or whatever - asked me lots of questions. (escalating the process / encouraging me to buy / etc) whereas when i called HCC and lusso, they just answered my questions nicely etc, and said to let them know if they can ever be of more help, that sort of thing. (letting me set the pace)

 

[johnmfaeth]

I normally avoid timeshare tours and presentations because no free gifts make up for the angst that I get sitting there and being hard sold somethng thats "way overpriced" (and that's being kind considering the lies and deceptions, had 5 other terms for what occurs that would be editted out as too crass).

If I want that anxiety, I can just skip vacation and deal with clients in NYC.

And what is a DC but a high end timeshare-type system? Should one expect less than duplicitous behavior from their sales types, of course not.

That said, curiosity of what the high end "timeshare" parties are like would make me lean towards going.

 

[Kagehitokiri]

destination clubs have NOTHING to do with timeshares.
- no ownership/deed
- no exchange
- properties within club or each club membership tier are same value (~$1MM+)
- because of those things > no weeks or points, just nights
- properties are usually single family (and 2BR+ NOT LO) instead of multifamily
- properties are acquired not developed (only 1 private development has been completed so far, and 2 more have been announced)

fractionals/private residence clubs MIGHT be called high end timeshares, but they include at least 2-3 weeks, and can often include much more usage. they are also not priced way over market value (at least at the high end - although since demand is so high and supply is so low, the margins are starting to increase) which is the whole business model for timeshares.

because their model is NOT based on ripping people off, there is no reason for them to flat out lie. even though they may be pretentious etc..

also re timeshare sales - i would imagine the sales people for the 2 four seasons timeshares are not high pressure. and ive heard a number of people say that when they were on starwood explorer programs (which required owner referrals) their sales presentation was much lower pressure. although i did read another report recently where they said it was high pressure.

 

[PerryM]

destination clubs have NOTHING to do with timeshares.

fractionals/private residence clubs MIGHT be called high end timeshares, but they include at least 2-3 weeks, and can often include much more usage. they are also not priced way over market value (at least at the high end - although since demand is so high and supply is so low, the margins are starting to increase) which is the whole business model for timeshares.

because their model is NOT based on ripping people off, there is no reason for them to flat out lie. even though they may be pretentious etc..

also re timeshare sales - i would imagine the sales people for the 2 four seasons timeshares are not high pressure. and ive heard a number of people say that when they were on starwood explorer programs (which required owner referrals) their sales presentation was much lower pressure. although i did read another report recently where they said it was high pressure.

Correct! Timeshares are a much safer "investment".

 

[Kagehitokiri]

this would seem more appropriate to me >

#1 high end fractionals / hotel condos / hotel residences
#2 high end timeshares
#3 equity destination clubs, which vary
#4 timeshares (not taking flipping into acccount)

personally, if i want an investment, id be looking at other things. even within real estate.

destination clubs are primarily designed to provide luxury (to a varying degree) travel. any equity/investment/etc is a bonus.

the vast majority of timeshares, especially purchased from the developer = anti-investment

 

[johnmfaeth]

From a legal perspective, fractionals are exactly timeshares. If you look at the deeds, they are typically "time sequenced condominiums" which is what a timeshare also is legally (oops bad grammer). The only difference is that you have more than one week. Some of Shawnee Northslope in PA was sold as a fractional with 12 weeks of ownership, one per month. It's still just a fancy name for timeshare.

No a DC is different in that you get to go as often as you wish to pay, with a certain minimum commitment. And the properties are often homes, not resorts or multiple dwellings.

However the concept is the same. Acquire a pool of properties, sell memberships, and make a big management overhead. And people are locked into your "system".

Having spent much of my career on Wall Street, working with investment bankers and institutional traders, the truly rich don't tie up their capital this way, they keep it invested in more traditional instruments. When they want to go away for a month, they rent a property for cash from one of the multitude of high end property management companies. Be it a villa in Tuscany, a place in St. Andrews, or a beachfront house on St. John. Same thing, less risk, no commitment, and about the same cost.

Yes, the sales types are more subtle, they must be as they clients are very successful in business and therefore sharper. But it is just a refinement of the same selling model.

 

[Kagehitokiri]

i just dont see how you can compare the TS model for use to the DC model for use.

also, the "huge overhead" is simply not there. while ER may be more focused on maximizing profit, they have to concerned with overall member satisfaction, because members can resign, and people could STOP joining. TS simply sell out, and theyre done. they have annual fees as income forever.

how are you locked in when you can refund for 100% or 100% + equity at any time? again, not like TS. i see no similarities. even the DCs that give 80% refund are still way better than TS that you have to RESELL for a small fraction of what you paid to the developer.

the increasing margin at high end fractionals like little nell is only because supply is so low and demand is so high.

you realize there are plenty of fractional villas as well, correct? like the $4MM castiglion del bosco, which has ~6 owners per villa, but allows unlimited usage by default, and even the reserving of multiple villas simultaneously. palazzo tornabuoni also allows the multiple reservations.

fractional ownership (jets, homes, vehicles) charter cards (jets, homes) and destination clubs are going to have an increasing effect on the luxury market.

clubs like ciel and solstice DO cater to very high net worth individuals.

yellowstone club world is clearly priced that way, requires yellowstone club membership etc, but i am confused as to why they seem to be developing mainly multifamily properties. that doenst seem like it would be as appealing to such consumers. but i dont know what their membership numbers are like..

also onekeyworld is like a charter card for homes - charging $2K - $2.3K per night, which can be up to a ~50% discount at some of their current properties.

id also like to see a timeshare that has the discounts that some destination clubs have >
http://www.tugbbs.com/forums/showpost.php?p=385650&postcount=15

or unlimited use for free.

 

[PerryM]

Hold on there partner....

i just dont see how you can compare the TS model for use to the DC model for use.

also, the "huge overhead" is simply not there. while ER may be more focused on maximizing profit, they have to concerned with overall member satisfaction, because members can resign, and people could STOP joining. TS simply sell out, and theyre done. they have annual fees as income forever.

how are you locked in when you can refund for 100% or 100% + equity at any time? again, not like TS. i see no similarities. even the DCs that give 80% refund are still way better than TS that you have to RESELL for a small fraction of what you paid to the developer.

the increasing margin at high end fractionals like little nell is only because supply is so low and demand is so high.

you realize there are plenty of fractional villas as well, correct? like the $4MM castiglion del bosco, which has ~6 owners per villa, but allows unlimited usage by default, and even the reserving of multiple villas simultaneously. palazzo tornabuoni also allows the multiple reservations.

fractional ownership (jets, homes, vehicles) charter cards (jets, homes) and destination clubs are going to have an increasing effect on the luxury market.

clubs like ciel and solstice DO cater to very high net worth individuals.

yellowstone club world is clearly priced that way, requires yellowstone club membership etc, but i am confused as to why they seem to be developing mainly multifamily properties. that doenst seem like it would be as appealing to such consumers. but i dont know what their membership numbers are like..

also onekeyworld is like a charter card for homes - charging $2K - $2.3K per night, which can be up to a ~50% discount at some of their current properties.

id also like to see a timeshare that has the discounts that some destination clubs have >
http://www.tugbbs.com/forums/showpost.php?p=385650&postcount=15

or unlimited use for free.

A DC can be made for ANY price point – they could be $250k condos or $10 M condos – it’s up to the marketing folks at the DC which price point they want to go after.

Beyond that timeshares are much safer of an “investment” than DCs. I can buy WorldMark credits this morning for 65¢ a credit, need 4,000 credits to stay at a $500k Marriott on the beach in Ft. Lauderdale next week and then sell those same credits for 65¢ a week later.

All the while there are all kinds of timeshare and real estate laws to protect my “investment”.

With DCs I got zip protection from ANY government agency – zilch, zero, none. I am really into unsecured loans to folks over the phone.

With my 65¢ WM credits I can actually rent all I want for 6¢ and stay at a Westin condo on Ka’anapali beach for just 10,000 credits or $600 + $135 exchange fee. That condo is worth $1 M. WM owners do this.

So let’s not poo-poo timeshares in the hands of owners who know how to use and maximize them.

Me, I’m waiting for the Ritz-Carlton or someone like that to decimate the DC industry and then either buy into it or buy DC’s for 10¢ on the dollar all those snooty DC's. I can wait for it.

These membership fees of $400k and above are just smoke and mirrors to begin with – you own NOTHING but an unsecured loan.

 

[Jestjoan]

Buy Belgium instead

According to a headline on Road Runner, it's for sale on EBay.

 

[johnmfaeth]

Now Belgium works for me, the home of French Fries, no they are not French after all. (oddiest thing about the Freedom Fries days).

Belgium also has the most breweries per capita of any country on Earth.

What's the current high bid?

 

[Kagehitokiri]

perry,

i think i was clear on my opinion of investments. i was also only addressing the the business model of TS developers, not the intelligent purchase/use of TS by consumers.

i explained my reasoning why IMHO its highly unlikely that RC/etc will enter DC market >
http://www.tugbbs.com/forums/showpost.php?p=393696&postcount=3

im curious because i presume you have reasons that you think they will enter the DC market, but you have not explained that reasoning. also, what might they offer that would "decimate" the current DCs?

IMHO the luxury chain to watch is Rosewood, to see whether they start doing any fractionals or DC type thing.

 

[travelguy]

Well, at least this thread has stayed on topic .....

 

[Kagehitokiri]

This thread was started two days ago and already has 51 posts and 781 page views.

The MOST amazing thing happens when you Google the following phrase -> "Exclusive Resorts Party"

http://www.google.com/search?hl=en&q=exclusive+resorts+party&btnG=Google+Search

wow, in the non-traditional forum, this thread is >

#1 by replies
#5 by views

 

[PerryM]

Snobs R us......

perry,

i think i was clear on my opinion of investments. i was also only addressing the the business model of TS developers, not the intelligent purchase/use of TS by consumers.

i explained my reasoning why IMHO its highly unlikely that RC/etc will enter DC market >
http://www.tugbbs.com/forums/showpost.php?p=393696&postcount=3

im curious because i presume you have reasons that you think they will enter the DC market, but you have not explained that reasoning. also, what might they offer that would "decimate" the current DCs?

IMHO the luxury chain to watch is Rosewood, to see whether they start doing any fractionals or DC type thing.

Some large named hotel chain, who has lots of folks constantly looking for real estate, is going to enter this field at some point - it's just too easy to enter the DC field and instantly take it over.

If it's not the Ritz it could be Marriott or Westin or Hyatt - name the hotel brand and it would be little challenge to enter the field.

Buy 50 condos around the world and sell 500 memberships each for $400k and the market would be impacted with this introduction. Make it 100% equity and charge 8% of the membership fee to manage the condos and allow folks to sell their membership on the free market with a ROFR.

Then, next month, do the same thing.

This is what folks who are snobbish in the first place want - a Ritz-Carlton or a St. Regis name or better and not some DC that their friends have never heard of.

Live by the snob, die by the snob.

Now I have nothing to back this up but my own desire to own a DC with the name Ritz-Carlton on it and backed with 100% equity and sell it on the open market for a profit later.

 

[Kagehitokiri]

i see what youre saying now.

but why not buy a fractional? some of RC's hold value quite well. and someone on this forum said they allow internal exchanges within 45 days where you can use your annual nights or pay $250/nt.

do you prefer the DC usage model?

10:1 is not a good member to property ratio...
worldwide private residences is looking to do that, as an equity club with a 10 year maturity and no annual fee. they say "minimum 5 weeks" so not sure if they allow unlimited space available use. im definitely watching them with the hopes that they are successful and expand to their planned 300 members / 30 properties. but not sure it looks good, considering they launched with 3 properties, and are now down to 2. (would only accomodate 20 members)
http://www.tugbbs.com/forums/showpost.php?p=364095&postcount=71
http://www.tugbbs.com/forums/showpost.php?p=338075&postcount=9

also, im personally not as interested in condos. nor am i particularly interested in the current hotel partnerships that bellehavens and ultimate resort have in place

and not sure about the whole snob comment, because if the DC owns luxury properties, including luxury hotel managed properties, or has butlers etc en-residence, how is that not the same as owning / renting / etc directly with the luxury properties?

 

[Jestjoan]

EBay was happy to take Six' advertisement.

"It was a really fun listing made by a Belgian," Peter Burin, PR manager of EBay Belgium. "This person, in a very funny way, reminded the Belgians what a great country Belgium actually is and it would be a shame to sell it."

However, the company decided to pull the ad Tuesday after receiving a bid of $14 million.

"We decided to take it down, just to avoid confusion," he told APTN.

 

[PerryM]

Look at this...

Look at the 107 Ritz-Carlton condos for sale in Maui.

I've called them 10+ times and they won't return a phone call - they are only speaking to folks who already own Ritz fractionals and then us common folks. I'm told that they will stop at 1,000 reservations for those 107 condos.

At the IntraWest resort 1 mile away they took over 2,500 reservations for the 310 condos sold.

Those 107 condos could be put into a DC and if Ritz wanted they could keep the units and sell $400k memberships with no equity ownership - just like 95% of the DC world.

Then, next month buy 100 condos somewhere else..... they use your money and you pay them rent - the definition of a DC!

P.S.
Look at the pull down menu - 29 similar Ritz residences. Think Ritz couldn't own the DC universe in a few days?

Then try to sell your membership for your 80% - how long will you have to wait to get your money out and go Ritz like everyone else?

 

[Kagehitokiri]

so the fractionals that are available for resale now are only the ones that dont hold value as well?

id think you might contact brokers, and see if there is anyone who might be interested in selling, but isnt listed right now...

i would personally not be interested in an RC DC.