HCC Associate vs. PE Premier Preview

[Steamboat Bill]

At the present time I view the DC market as:

ER is the top dog
UR/PE will agressivly try to beat ER
HCC will be the value leader
BH will continue to offer postential deposit appreciation

 

[LTTravel]

At the present time I view the DC market as:

ER is the top dog
UR/PE will agressivly try to beat ER
HCC will be the value leader
BH will continue to offer postential deposit appreciation

I would say UR/PE are trying to keep up, at best with ER. They MUST emphasize their benefits to potential members: lower yearly fee increases, transferability, family use, no reset to market, etc, not try to tell people that there is no availability at ER and to your list I would say:

Yellowstone, Ciel, ultra luxury, elite, limited memberships
Solstice, Ultra Luxury leader, but expect slow growth
Quintess: The higher end boutique leader (They have well over 400 members)
Lusso: Boutique, higher service level competitor (waiting to break out)
Portofino: don't know enough about them
DHH: late starter, international, best for those who love boats.
Canadian, European DC's: don't know enough about them.

 

[Kagehitokiri]

i personally look at DHH and HCC as "cheap" and worldwide private residences as "free"

 

[GOLFNBEACH]

At the present time I view the DC market as:

ER is the top dog
UR/PE will agressivly try to beat ER
HCC will be the value leader
BH will continue to offer postential deposit appreciation

If UR/PE wants to agressively go after ER, I think they will need to spin off the lower $1MM PE Premier club. It's extremely difficult to cater to 3 different groups. A Lexus shopper doesn't want to see a Camry at the same dealership. IMO UR/PE will look into spinning off the PE Premier club. I really see a good fit with HCC there.

IF the UR/PE merger is successful I could see them looking into BelleHavens, Quintess, etc.

 

[LTTravel]

There is no reciprocity in the trial memership, however, do you think that ALL of the UR destinations will be defined as reciprocity to Premier Members in the merged club. If I joined as a Premier Member would I have use of any of the UR houses, or only on a reciprocity basis? If that is the case, then there is little benefit of the merger to PE Premier members.

I checked the PE web site again and found that all three clubs have access to the other two club levels on a reciprocity basis (up to 7 days per year) When I had looked at PE some time ago, the Pinnacle level homes were not available to the Premiere and Platinum members, but apparently, that has changed.
So if you are a full Premiere member, you do have access to the $3million homes up to 7 days per year. But again, I believe that that is only on a space available basis.

 

[vineyarder]

So if you are a full Premiere member, you do have access to the $3million homes up to 7 days per year.

Yes, there is still reciprocity for new members between all 3 PE clubs, so Premiere can use Platinum or Pinnacle for 7 nights per year. This should be grandfathered in for people who join PE before the merger. On the other hand, if reciprocity is maintained for new members who join after the merger, it may well be '1 up or 1 down', meaning $1M can use $2M homes, $2M members can use all three levels, and $3M can use $2M or $3M... Just an educated guess...

But again, I believe that that is only on a space available basis.

Actually not; it can be booked as far in advance as you wish; even 2 years, 3 years or more in advance... There are limitations on how many nights per quarter each individual home can be booked for reciprocal usage, but that is shown on the online booking calendar, so you can see if it is open for reciprocal booking the days you want, and generally availability is quite good. Reciprocal bookings are not permitted on Holidays (Xmas/New Years) or certain other 'peak demand' periods (Thanksgiving, Easter/Spring Break, President's Week).

 

[GOLFNBEACH]

Does anyone know if the 100% refund on the PE Premier Preview is subject to 2 in, 1 out or similar rules?

 

[vivalour]

Does anyone know if the 100% refund on the PE Premier Preview is subject to 2 in, 1 out or similar rules?

I don't think this rule applies to preview, but don't know for sure.

Seems like a controlled risk for security-minded folks to sign on if it's a simple matter of a one-year trial with your money back if you get cold feet. I would also want to know that it is only a year, and with money refunded within a reasonable time. My husband and son are drooling over the photos in the PE kit and we are moving toward the PE premier preview. We plan to call PE later this week with all our questions.

 

[GOLFNBEACH]

I don't think this rule applies to preview, but don't know for sure.

Seems like a controlled risk for security-minded folks to sign on if it's a simple matter of a one-year trial with your money back if you get cold feet. I would also want to know that it is only a year, and with money refunded within a reasonable time. My husband and son are drooling over the photos in the PE kit and we are moving toward the PE premier preview. We plan to call PE later this week with all our questions.

My understanding is that with PE Premier Preview you get 100% back at any time (not just in year 1). You can continue in Preview if you are happy with 14 days of use. Let me know what you find out when you call later this week.

 

[vivalour]

My understanding is that with PE Premier Preview you get 100% back at any time (not just in year 1). You can continue in Preview if you are happy with 14 days of use. Let me know what you find out when you call later this week.

Yes, money back anytime is right, but we're considering a year-long trial. Will be glad to share what we learn.

 

[GOLFNBEACH]

Does anyone know if the 100% refund on the PE Premier Preview is subject to 2 in, 1 out or similar rules?

I was told there are no restrictions on the 100% refund other than you need to be with the club for 12 months. No 3 in, 1 out requirements. I'm think I'm getting close to joining.

 

[vivalour]

I was told there are no restrictions on the 100% refund other than you need to be with the club for 12 months. No 3 in, 1 out requirements. I'm think I'm getting close to joining.

Good for you! This would be our first choice too, with the intention of trading up if things look solid.

Btw, fanatical researcher that I am, I looked up Perry M's thread from 2006 when he was very enthusiastic about DCs and on the verge of joining HCC but decided not to. He details lots of very valid concerns then -- that he apparently still has now.... I have the impression that he thinks most DCs are not that far removed from Ponzi schemes (am I right Perry???).

Although we also love the concept of DCs, we are a bit spooked by the many recent scandals in the corporate world where there is lack of transparency on financials, and management get away with major coverups -- even in the most respected biz orgs. To me most familiar are Tyco (I was a stockholder but came out fine) and several here in Canada.

So before joining, my husband & I need to get clear on exactly how the DCs (in particular PE/UR & maybe HCC) are financing and maintaining their properties. And what if they have a dry spell in cash flow -- due to fall off in new memberships? Do they have retained earnings as a cushion? Why does PE have their properties under three separate companies? Is this to limit liability or ease financing arrangements? All a big mystery to us right now.

We have had to postpone our PE phone call to next week because of our tight daytime schedules, so may email ahead some of the questions we have. Fellow newbies, pls feel free to add to our list....

 

[GOLFNBEACH]

Valid questions and concerns. My understanding is that once you sign an NDA and provide a $3K deposit PE will provide you with an audit done by KPMG. They will also let you chat with the CFO if you have any questions.

Having said that, there are no guaranties. PE/UR could run into problems and go out of business due to mismanagement, fraud, competition or any other reason. That is one reason I like the Preview membership because you can get 100% back at any time and there are no 3 in, 1 out restrictions. This provides slightly more protection.

PE Premier claims 7 full memberships per property on average. This equates to $700K cash for a million dollar property. This suggests a 30% leverage which seems reasonable.

 

[vivalour]

Valid questions and concerns. My understanding is that once you sign an NDA and provide a $3K deposit PE will provide you with an audit done by KPMG. They will also let you chat with the CFO if you have any questions.

Having said that, there are no guaranties. PE/UR could run into problems and go out of business due to mismanagement, fraud, competition or any other reason. That is one reason I like the Preview membership because you can get 100% back at any time and there are no 3 in, 1 out restrictions. This provides slightly more protection.

PE Premier claims 7 full memberships per property on average. This equates to $700K cash for a million dollar property. This suggests a 30% leverage which seems reasonable.

Sounds good.

 

[vineyarder]

PE Premier claims 7 full memberships per property on average. This equates to $700K cash for a million dollar property. This suggests a 30% leverage which seems reasonable.

Actually, right now the Premiere properties average $850K, so the leverage is more in the range of 18%. After the merger, the membership fee will incease by 25 - 30%, so if it goes to $125K, the leverage will drop to about 12.5% on new $1M properties. The average value will also be brought up by shuffling of a few of the lower-priced Platinum and UR homes into the $1M club...

 

[vivalour]

Actually, right now the Premiere properties average $850K, so the leverage is more in the range of 18%. After the merger, the membership fee will incease by 25 - 30%, so if it goes to $125K, the leverage will drop to about 12.5% on new $1M properties. The average value will also be brought up by shuffling of a few of the lower-priced Platinum and UR homes into the $1M club...

Do you know if PE is still capping membership in the different clubs -- or are most clubs, as well as PE, moving away from the idea?

I guess if mergers are the way of the future, caps are a thing of the past. Looking at the entreprenuerial backgrounds of the execs managing PE & UR (buy/ develop/sell), we are wondering where they are heading with this merger.

 

[vineyarder]

Do you know if PE is still capping membership in the different clubs -- or are most clubs, as well as PE, moving away from the idea?

After surveying members, PE removed the cap about a year ago; members said they'd prefer more destinations vs. a cap...

I guess if mergers are the way of the future, caps are a thing of the past. Looking at the entreprenuerial backgrounds of the execs managing PE & UR (buy/ develop/sell), we are wondering where they are heading with this merger.

Not sure either...

 

[vivalour]

After surveying members, PE removed the cap about a year ago; members said they'd prefer more destinations vs. a cap...
Not sure either...

Interesting... BTW, how are you enjoying your HCC trial --- up to your expectations?

 

[travelguy]

Looking at the entreprenuerial backgrounds of the execs managing PE & UR (buy/ develop/sell), we are wondering where they are heading with this merger.

I'm wondering the same thing. The sales and marketing ends of both companies are saying a lot but there are still MANY questions about the resulting PE/UR business model when the smoke clears. In addition to the obvious financial questions, a 30% increase in new membership fees AND potential 30% increase in annual fees for ALL members does not bode well for the lower tier membership. From way on the outside looking in, it appears that PE/UR may be moving to a "mid-level" DC club model. If so, what happens to the existing lower tier members (and those that buy-in immediately pre-merger)?

Another question is what happens when all the non-equity PE members demand that their membership be made into an equity membership since PE is now offering that to new members!

 

[vineyarder]

a 30% increase in new membership fees AND potential 30% increase in annual fees for ALL members

This is not correct; the annual fees will only go up for NEW members; current members will still keep their current dues structure, subject to the annual 5% maximum increase (with no 'reset to market' clause)...

From way on the outside looking in, it appears that PE/UR may be moving to a "mid-level" DC club model. If so, what happens to the existing lower tier members (and those that buy-in immediately pre-merger)?

I really don't think so; they seem to be quite committed to a 3 tier system... and current members at all tiers keep their dues structures, refund policy, etc.

Another question is what happens when all the non-equity PE members demand that their membership be made into an equity membership since PE is now offering that to new members!

I'm sure that this will be brought up, but it doesn't seem fair to ask to have it both ways... most of the PE members bought in when it was a 100% refund, and that is still in place for them... Those that bought in at a fixed 80% will undoubtedly want to be 'upgraded' to 80% of then current, but it seems to me that if they are going to honor all committments they've made to members wrt dues structures, members should also be expected to honor the deal that they signed on to... That being said, I wouldn't be surprised if those members were offered, ona voluntary basis, the opportunity to convert to 80% of then current as a refund policy in exchange for a fixed number of days per year, rather than unlimited...

 

[vineyarder]

Interesting... BTW, how are you enjoying your HCC trial --- up to your expectations?

Can't really comment yet... Since the trial 'membership' is really one trial 7 day vaction, I won't know for sure until I stay at a HCC home... and between PE, Four Seasons, Marriott and Ritz Carlton, plus an old-fashioned second/summer beach house, my vacation schedule is booked far in advance... so I won't be using my HCC week until early next summer (thinking Playa del Carmen or Costa Rica).

But what I love about the trial membership is that it lets me lock in current pricing for a year, so I can follow availability and how the real estate portfolio grows over the course of the year, then stay in a home, and then decide whether to committ to a full membership. All with essentially zero risk! That's why if I were in your position, I'd do both the PE preview and the HCC trial - get to know both clubs with essentially zero risk.

 

[GOLFNBEACH]

Looking at the entreprenuerial backgrounds of the execs managing PE & UR (buy/ develop/sell), we are wondering where they are heading with this merger.

Not sure I understand the question. Entreprenuerial managers look at all the options and mergers/acquisitions are often one of the fastest and most efficient growth strategies.

 

[GOLFNBEACH]

... and between PE, Four Seasons, Marriott and Ritz Carlton, plus an old-fashioned second/summer beach house, my vacation schedule is booked far in advance... .

You have a full time job just planning vacations...

 

[Kagehitokiri]

has anyone seen/heard anything about how theyre going to break down the 5 plans for the $1MM tier?

 

[vivalour]

Not sure I understand the question. Entreprenuerial managers look at all the options and mergers/acquisitions are often one of the fastest and most efficient growth strategies.

I was looking at the bios of the CEOs and founders of both UR & PE. They have a trail of start-ups behind them which they have sold, either privately I guess, or through IPOs. With this in mind, I am wondering about their future intentions (say three to five years from now) for these DCs. Merge again? Create a REIT?