Scoop du Jour: Who Loves You Baby?
-by Scoop
March 26, 2010 — While Stephen J. Cloobeck, Chairman and CEO of Las Vegas-based Diamond Resorts International (DRI), is the keynote speaker this week during the TATOC (Timeshare Association) conference in Europe, I am wondering if Mr. Cloobeck will be sharing with the audience his reasoning for a contractual arrangement to have a third party company sell DRI points (to consumers) at a “fraction of the price”.
According to the UK-based Travel & Leisure Group, Ltd (TLG) they are now able to assist buyers to do just that, to “acquire DRI Points for the European Collection at a fraction of the price, and enjoy the wonderful locations and many benefits Diamond Resort International offer all their members.”
In fact TLG is so excited about this opportunity that on their website they have a humongous banner on the top (center) front page announcing this arrangement and ask consumers to also ponder: “Why pay the retail price to the resort? Buy privately, without pressure and save…”
And yet, fast forward to the DRI website and there is no mention of this special arrangement informing consumers how to avoid paying “retail price” all the while enjoying “the wonderful locations and many benefits Diamond Resort International offer all their members” (who paid full pop)!
No, instead what consumers (aka: prospects) will find on the DRI website are those “special offers” to rent discounted accommodations on the condition that the renter meets specific qualifications and attend(s) a “120 minute” sales presentation.
Of course, if a prospective buyer (sales guest, attendee, prospect) does a tad more online research they’ll also discover in a nano-second that entities such as ‘Sell My Timeshare Now’ also has DRI inventory, I mean “points”, listed for (believe it or not) as low as $350 (“Sale includes 5,000 Annual Points! Terrific Price”!) for the DRI “Diamond Resorts California Collection”.
The ‘resale’ issue continues to impact sales at the developer level (aka “retail”) daily as well as accounting for ‘kicks’ (rescissions) within the cooling off period and developers have had decades to resolve this situation…
Yet, other than a few ‘cutie’ type clauses in the ‘buyers’ (owners) contract restricting reselling, etc., most developers simply continue to ignore the problem as if a donkey just dropped a gigantic ‘load’ in their front yards that is absent any odor, is biodegradable and will disappear over time…
Now I mean no disrespect to Cloobeck or any other developer but if I were sitting on the tables while John or Mary whipped out their ‘hand-held’ device and pulled up this sort of ‘info’ and it cost me a deal, well, I would certainly request a ‘brief and informative’ meeting with my developer and inquire as to whatzup with this …!
Got a comment, topic, perspective, feed-back or a general rant to share? Leave a comment or Contact: scoop@insidethegate.com
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Good one Scoop! Couldn’t agree more. Say, did I see you at ARDA last week?
Weren’t you the person carrying the sign in the main hall with the words “Resales, The Ultimate Drop” printed on it? LOL!!!!
Bentley Reply:
March 26th, 2010 at 8:48 am
Funny haha Mr. Cash, the ultimate drop and all that. This is a serious issue, too bad developers didn’t see the resale issue coming and then ignored it once it raised its ugly head. Anyone have a good idea on how to get that toothpaste back in the tube?????
BJ Reply:
March 26th, 2010 at 1:24 pm
Bentley asks:
You bet!
Have the developers and upper management sit on the tables (and toss in their Bean counters too) and deal with the trench realities and you watch, they’ll get it—in no time at all!
Scoop, this what a great article. The only thing I take issue with is that you wrote; “I mean no disrespect to Cloobeck” Why not? Disrespect the guy! He’s an idiot.
BestGirl Reply:
March 27th, 2010 at 8:18 am
Cloobeck an idiot? Maybe, but DRI is one of the few companies getting bigger instead of smaller these days. He must be doing something right.
new era Reply:
March 28th, 2010 at 2:46 pm
You are right. Not an idiot. I was reacting to the manner in which he has treated some very fine people. I lashed out. That was wrong. I think back to the “all star” team he assembled; Jim Danz, Brad Benson, Bill Tsao, Marty Kandel, Michael Finn, Hector Maldonado, Jerry Tracy, Sandy Knapp, Jim Gioiosa and of course Simon. How is it so many people with proven track records keep getting fired? Let’s face it. We know who calls all the shots. So, why doesn’t the decision maker take ownership of the failed programs? Look at this article. Does this sound like a good program? Getting bigger does not always mean getting better.
No need for name calling:)
I would sure like to know how many real defaults are out there.
On the news last night the taking-heads were yapping about a second wave of general real estate foreclosures so one can only believe there will me many more TS owners walking away from their units leaving more resale inventory on the market.
There was another interview with two Repo guys and they are out making a killing picking up high end planes-jets, boats, yachts and so on.
This mess leveled people in all income brackets!
new era Reply:
March 28th, 2010 at 2:47 pm
Cabo Mike. You are right. My apology. No need for name calling. Have a nice day!
What do you mean “too bad developers didn’t see the resale issue coming”?
They saw it coming, or at least the managers and closers, and grabbed it, seized it, embraced it and especially in the beginning that is how all those phony table buy-back schemes got started!
From there, with prices padded way above net, they’d even do ‘trade-ins’ (and some actually would take a trade-in for real)!
But what they didn’t see coming were thousands upon thousands of Timeshare owners who would be, due to the economy (and more), forced or desperately needed to unload their VOI.
There is another tidal wave coming down that will grow in numbers. That is the perpetuity aspect with ‘Endless
Vacations‘ Maintenance Fees and special assessments.In hard times like many are having these days, when they sit down over coffee and pencil it out, paying out all the fees each year will force more owners to walk-away from their VOI’s.
This resale problem started back when the first owner came back to the first developer and wanted or needed to get out of their timeshare and that developer (basically) told that owner—sorry Pal, you bought it, you own it, it is your problem.
My guess is that would have been back in the late ’60’s to early ’70’s and the problem and reality has grown from there.
Year in and year out, over the past 40 years, timeshare owners had and have real life reasons (like divorce, death, health, change in lifestyle, income etc.) and needs to unload their ownership interests and for those same 40 years developers have told them to stick their issues where the sun don’t shine!
Timeshare developers can be really stubborn!
Calling developers stubborn is like saying cats really don’t like chasing birds.
Resale inventory and the associated problems are swarming like Africanized bees and for those who (still) live in denial or under a rock just google “timeshare” and see for yourself.
What I find odd, especially since developer are always bitching about costs is that within their ownership base, they have thousands of owners who would be more than happy to pay them a fee to get out of their TS interests and the developers still haven’t figured that one out (either).
The developers could charge the appropriate fee(s), process the docs, take back the inventory and, OMG, sell it again!
“Stubborn”? How about:
Unreasonably obstinate; Tenaciously unwilling or marked by tenacious unwillingness to yield—or cussed: stubbornly persistent in wrongdoing (and) too persist stubbornly as in being obstinate against all rational arguments!
Speaking of defaults.
I know there are suppose to be millions of owners just in the USA; and if that number is as some claim, 5 million, and considering the nature of home owners etc. in trouble, job losses etc. then the picture gets spooky.
5 Million owners @
1% default the past 12 months = 50,000 weeks.
3% default the past 12 months = 150,000 weeks.
5% default the past 12 months = 250,000 weeks
8% default the past 12 months = 400,000 weeks.
Where those weeks wind up is anyone’s guess but if the % is actually in the double digits……..