July 24, 2010: WHAT’S ON THE MENU THIS WEEK? It’s a short stack. Or a stack of shorts? Whatever. Would you like extra butter and syrup with that?
THEY MIGHT BE GIANTS: Did you catch Scoop’s tribute this week to the guys and gals who were founders of our beloved industry? There was a bit of history, too, to remind us of how far we’ve come– and the type of folks who are likely to take us to the next level. It’s a good read. Head on over to “The Giants of Our Industry”, and feel proud!
Timeshare. It’s a GOOD thing!
CLUB LA COSTA COMES TO CENTRAL FLORIDA: Club La Costa Resorts & Hotels has reportedly purchased Encantada Resort in Kissimmee, FL, its first resort in the Orlando area. Set on its own natural lake just 3 miles from Walt Disney World, Encantada is a gated townhome community which has been selling units as full ownership and I don’t have much info yet on precisely what CLC purchased, but I’m sure more details will soon follow, so stay tuned.
CUTTING A DEAL WITH THE IRS: It’s good news for Wyndham’s bottom line! Wyndham Worldwide Corp. and its former parent, Cendant (remember them?) have reached a settlement with the Internal Revenue Service about a long-running dispute involving a deferred tax liability.
The move will result in a roughly $40 million gain for Wyndham in the third quarter. (Second-quarter results are due on July 28.)
Wyndham expects to pay about $145 million in the period to resolve issues involving Cendant’s 2003 through 2006 federal tax returns. For noobs or the memory impaired, Cendant broke up four years ago, with Wyndham being one of the offshoots. Wyndham had set aside $185 million for the IRS matter.
NEW FRACTIONALS ON BANDERAS BAY: Garza Blanca Preserve, a development of two- and three-bedroom penthouse residences on an 88-acre property near Puerto Vallarta, Mexico, has started fractional ownership sales. On the hillside overlooking the bay there are seven 12-story residential buildings, with two units per floor, and four private pool areas. The beach area consists of 46 residences, while on the south side of the beach are two beachfront buildings with 18 residences and two penthouses each, equipped with underground parking.
Peter Humber is the Director of Sales. Remember Peter? Among other things, about a decade ago he was assistant vice president of Interval International in Las Vegas. I wonder how he ended up down Mexico way?
MEXICO’S AMDETUR CONVENTION 2010: AMDETUR (which stands for Asociación Mexicana de Desarrolladores Turísticos) is otherwise known as the Mexican Resort Development Association and acts as the national association for the timeshare and fractional ownership industry in Mexico. The 24th annual convention for the association will be held October 27-29, 2010 at the Hilton Mexico City Reforma Hotel under the theme “2010, Tourism Facing the New Challenges”.
There will be awards handed out by Mrs. Gloria Guevara Manzo, Minister of Tourism, to Promoters, Liners and Closers from Mexico’s major tourism destinations, “who have distinguished themselves by their dedication and work within the Timeshare Sector.” AMDETUR considers that through such actions, they “help to promote the professionalization, as well as the integral development of human resources and productivity within the Timeshare Industry.” YEAH!
IS THIS GOOD NEWS OR BAD NEWS? Comtex SmarTrend recently issued a report listing the top five companies in the Hotels, Resorts & Cruise Lines industry as measured by the price to cash flow ratio. (Often companies with the lowest ratio present the greatest value to investors, according to Smartrend, and I’m in no position to argue since my favorite investment vehicle has a snout, a curly tail and a slot in its back). ANYhow, at the top of the list was Bluegreen, with “a price to free cash flow ratio of 4x based on a current price of $3.14 and a free cash flow per share of $0.78.” I thought maybe that was a good thing, but the notice then goes on to say “SmarTrend is bearish on shares of BXG and our subscribers were alerted to Sell on May 07, 2010 at $5.04. The stock has fallen 47.9% since the alert was issued.” Your guess is probably better than mine…
MORE SLOTS! The South Point Hotel, Casino & Spa in Las Vegas has announced a $20 million, 55,000-square-foot expansion of its casino, with the first phase already open.
This phase includes 600 slot, video poker and video keno machines, a newly designed 175-seat race book, a new poker room and an entertainment area called the Grandview Lounge. The Grandview is named, of course, for the South Point’s neighboring timeshare development, The Grandview at Las Vegas (a Berkley Group project). This resort will celebrate its 6th birthday this year on October 4.
South Point is the largest locals hotel-casino in the Las Vegas Valley, and I’ll bet the proximity of the Grandview has been real helpful in keeping it successful in recent years.
THOUGHT FOR THE DAY: Canadian novelist Doug Coupland noted that brain research tells us that only twenty percent of human beings have a sense of irony, which means that eighty percent of the world takes everything at face value. I don’t know about you, but I find that more than a little bit unnerving.
DEAD SKUNK IN THE MIDDLE OF THE ROAD AWARD: Timeshare resale fraud. Does it never end? Apparently not, if recent headlines from all over the country are any indication. This has been a problem for years, but with the current economic conditions impelling a swelling (nice alliteration, yeah?) of the ranks of timeshare owners who want/need to sell, the skunks have come out in full force to stink the place up.
Who to start with this week? You’ve got the BBB serving Central Oregon warning about VP Coast Properties, aka Coast to Coast Timeshare and Coast to Coast Vacation Properties. Then there’s the Massachusetts AG Office, which has obtained a preliminary injunction against Timeshare Advocates, My Timeshare Advisor, All Resorts Marketing LLC, Jeffrey Riebman, Charles and Valerie Whiteman, Catherine Stevens, and Carol Riley for allegedly providing unlicensed legal advice and defrauding owners of timeshare intervals at the Edgewater Beach Resort in Dennisport, MA of over $250,000. In Florida, the AG’s Office has has filed lawsuits against Timeshares By Owners, Gold Crown Property Management Inc., and International Marketing and Finance Group (and its president, Christopher Lee Hutson) for using deceptive and unfair practices.
But my favorite for the week may be the federal indictment against Florida-based Real Timeshare Marketing, filed in East St. Louis, Illinois. Included in the indictment are company owners Darnell Disroe, 38, Michael Lentine, 32, and Michael Starace, 42. Boynton Beach, FL police and U.S. postal inspectors cooperated in an investigation that found more than 600 victims were bilked for more than $1.3 million in 46 states and Canada.
As it turns out, those three men already have more than 20 arrests among them. Disroe has been arrested three times since 2005 on charges including drug possession and fraud, receiving probation in two cases. Lentine has been apprehended six times, most recently for shoplifting in 2008, but that charge was not prosecuted. Starace has 12 arrests, one of which resulted in a short jail stint on drug charges in 2004.
In this case the stakes are higher than simple fines and orders not to do it again. Federal authorities are pursuing charges of mail fraud and other offenses that carry up to 25 years in prison or fines up to $250,000 per count. Personally, I hope they go the prison route because the skunks who perpetuate these kinds of scams don’t seem to be deterred by the threat of fines (which they will never pay).
So here’s a big raspberry to the stinkers of the week: Timeshare resale companies that charge big fees and never deliver the goods!
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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