May 1, 2010: NAME CHANGE: Did you notice? I didn’t like the old title for this column; it didn’t reflect my bubbly personality. So I’ve renamed the place to make it more classy. Same bat time, same bat channel, same snarky bat attitude, just a different marquee…
WHAT’S ON THE MENU THIS WEEK?
DEAD SKUNK IN THE MIDDLE OF THE ROAD AWARD: The Dead Skunk award this week goes to a Tucson, AZ-based company called Travel Premium Awards Agency on behalf of local travel club, Southwest Travel.
Travel Premium Awards has been sending out a mailer that closely resembles a W-2 form, with the words “personal and confidential,” in large, bold letters on the reverse side, and the words “official documents enclosed,” and “Notice Urgency: EXTREME,” on the front. In smaller print, the front of the envelope also states that, “this is not a government document.”
When opened, the letter says that enclosed is an “airline ticket voucher” good for two roundtrip airline tickets to anywhere in the continental United States, but the “voucher must be certified to be valid.” Which means, of course, that you have to attend a presentation for the travel club to get the voucher (which will turn out to be virtually unusable). My my, have the complaints been rolling in!
Some of the many names associated with this outfit: Patterson Bell, Sutton Perry, Thompson Fuller, Morrison Banks, and most recently Zimmerman Cain.
Since November the company, which solicits clients for Southwest Travel and other travel clubs across the nation, has changed the name under which it sends its mailings at least 12 times. They don’t like to talk to anyone other than their
marks victims potential customers, you know, like officials of any kind or the press. And they’ve been very cagey about revealing an actual address… Hmmm. Wonder what name they’re using now?
ON THE ROAD TO RECOVERY? There’s no real figures I can find about how many timeshare sales & marketing reps were laid off over the last couple of years, though we know the figure is in the thousands. If it’s accurate that sales are down over 40% industry wide in the USA then I’d bet that at least a similar percentage of TS pros have found themselves looking for a new gig.
Where did you all go? What are you doing to keep body and soul together these days? The sales environment outside of timeshare is ugly and mostly not very profitable. If you can even find a sales gig that is legitimate, where you know you’ll get paid come Friday and the company will still be in business next week, then you’re one of the lucky ones.
There are signs that the ship is finally starting to turn around, though, with an increasing number of companies cautiously starting to advertise for help again as they begin to rebuild their sales & marketing teams.
On a side note, don’t you hate having to go through the HR department to find a job? What do they actually know about sales anyway, how to determine from a resume or even a phone conversation who’s good and who’s not? Never sold a week in their lives…
FINANCES: Vacation Ownership sales are up and down. At Starwood, revenue on the hotel side is up but on the timeshare side it’s down. Vacation ownership revenue fell 2.2% as contracted timeshare sales dropped 4.9%. The average price per vacation-ownership unit fell 7.5%. The performance was in contrast to growth posted by Wyndham on Wednesday.
Wyndham’s Gross Vacation Ownership Interest (VOI) sales were $308 million in the first quarter of 2010, up 10% from the first quarter of 2009, reflecting an increase of 25% in volume per guest, partially offset by a 10% decrease in tour flow consistent with the Company’s planned restructuring of the business.
Total segment revenues were $444 million in the first quarter of 2010 compared with $462 million in the first quarter of 2009, which included the recognition of $67 million of previously deferred POC revenues. This unfavorable impact was partially offset by the increase in gross VOI sales and a reduction in the provision for loan losses of $21 million, primarily related to improved credit metrics of the portfolio.
Make of it what you will…
APPLAUSE: Trading Places International, in Laguna Niguel, CA, has been around for a long time (36 years!) and the company has been steadily growing all that time. Through all those years, amid all the turmoil surrounding the TS industry, they have pretty much avoided the bad press and garnered a solid reputation for their services: Resort management, vacation exchange, rental, owner resales, reservation services, golf, and traditional travel. They currently oversee more than 71,000 timeshare owners at over 30 resort locations in Hawaii, Mexico, South America, and mainland United States.
Now Trading Places has been awarded an A+ national accreditation rating – the highest honor achieved from the Better Business Bureau (BBB). No small thing, that!
So here’s a thumbs up for Michael Kizerian, Marcus C. Wood & R.J. Jackson, who run the company, and the people who make things happen there!
TO PONZI OR NOT TO PONZI? Some years ago Michael Kelly, of Avalon Resorts infamy, set up an investment scheme in his “timeshare” universe that scammed thousands of mostly elderly people out of some $450 million. Many warnings were issued against the scam, but it took two or three years for its true nature as a Ponzi scheme to become apparent enough for the long arm of the law to take notice. He was nabbed by the DOJ during a trip to the USA and sent to the slammer (but not before he was scheduled as a speaker at an ARDA Convention as a Mexico timeshare mogul!). Lately, many of the people who were selling the investment in the USA have been sued, fined, and otherwise held responsible.
Now it looks like it’s Frederick and Derek Elliott’s turn in the hot seat. Will history repeat itself? A father/son duo from Canada, the Elliotts are being sued over an alleged $170-million US Ponzi scheme related to resort property investments in the Dominican Republic. The Elliotts, 38 of their companies and several other individuals are named as defendants in the lawsuit.
Remember the Sun Village Resort in Puerto Plata and a former Sheraton Hotel in Juan Dolio, about which many warnings were issued by various sources over a period of a couple years? Yeah, that’s the Elliotts I’m talking about.
Both of the Dominican properties have since been foreclosed upon and were sold at auction last fall. The former Sun Village is now in the hands of Lifestyle Holidays Vacation Club.
The lawsuit contends that Frederick and Derek Elliott, through a web of offshore companies and other entities, improperly used investor cash for such things as a yacht, a private plane and investments in movies and to pay off gambling debts.
The Elliotts not only deny any wrongdoing but initiated a $120-million US countersuit in February against the investors who launched the court action.
Meanwhile, U.S. District Judge Alan Gold of Miami, who is presiding over the case, became so concerned about possible criminal activity having taken place that he issued an order on Feb. 11 stating he was contacting a long list of law enforcement and regulatory agencies in Canada and the U.S. and asking them to begin criminal investigations of a number of the defendants, including the Elliotts.
The alleged criminal activity cited by the judge includes racketeering violations, securities violations, wire fraud, tax fraud, money laundering and a Ponzi-type scheme.
No criminal charges have been laid against the Elliotts or their companies in relation to the Dominican investment properties, so the presumption of innocence must be noted.
So, Ponzi or not Ponzi? It’s up to the courts to decide, but in the meantime a quick tour through Google will give you more information than you ever knew you wanted. Or, you can start here…
And that’s it for this week’s Roadkill. See ya next weekend, and keep your eyes on the road… Oh, and if you enjoyed this, tell a friend!
Published every Saturday.
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