Feb. 20, 2010: AFTER THE RAPTURE: My favorite new scam scheme. TAKE THE MONEY & RUN: Four former directors of a timeshare firm get smacked down. But where is Number 5? RCI IS SHOCKED, SHOCKED I TELL YOU!: What? Scammy outfits are using bogus claims about being affiliated with RCI? Who could have guessed? WHO’S HOT & WHO’S NOT: Is smaller better in today’s economy?
Welcome to this weekend’s rundown of stories that didn’t make the front page!
AFTER THE RAPTURE: This has nothing to do with timeshare but it’s so delicious in a perverted kind of way that I couldn’t resist sharing it. You know how there are many fundamentalist Christians who are convinced that Armageddon is near and soon they will be raptured up into Heaven to be with Jesus until the Second Coming? Well, their pets will unfortunately be left behind and that apparently worries some of them. What will become of Fifi and Fido? Answering the call is a group of atheists who will NOT be raptured, and thus will be available to rescue those pets. They call it, “The next best thing to pet salvation in a Post Rapture World.” For a small fee, you can register with this group and if rapture happens within the next 10 years they will go to your home, rescue your pets and care for them until your triumphant return (or until they die, whichever comes first). The company calls itself “Eternal Earth-Bound Pets”, and you can find them online HERE. Is this a scheme or a scam or just a case of finding a need and filling it? I dunno, but on the Value per Gossip meter it has a very high percentage. And the best part: There are no maintenance fees, no special assessments, no closing costs and no 90-minute tours to attend and there are no NQs. Are you smiling yet?
TAKE THE MONEY & RUN: Across the pond in the UK there was a timeshare firm called Worldwide International UK Limited. The people running it were not very nice. Following an investigation by the Companies Investigation Branch (CIB), 5 members of the firm were disqualified for a total of 32 years. But only 4 of them, all members of the same family, hung around long enough for the “sentencing”. Bruce John Goss, controlling director of the mostly family-run firm, failed to co-operate with the investigation and is now believed to live in India. Apparently, he took the money and ran, leaving his family behind to take the heat.
According to the CIB, besides persuading hundreds of people to buy shady holiday ownerships from or via the company for a total of around £3.5 million, the company failed to keep proper accounts and to pay its debts.
A forensic accountant’s report claimed the financial situation of the company was caused by selling holiday inventory at a loss to generate cash. The Goss family also had a “propensity” to transfer surplus funds to their own accounts
In her judgment, disqualifying Bruce Goss in his absence, High Court Registrar Christine Derrett said: “I am therefore satisfied that the allegations made against Mr Goss disclose persistent and serious dishonesty.
“I am satisfied that Mr Goss has caused the company systematically to take substantial sums of money from customers based on false information and high pressure sales tactics.
“Even when the company’s financial situation was clearly hopeless he allowed it to continue to take money from customers and those customers who sought explanations were lied to and deceived. I am satisfied that Mr Goss is to be regarded as principally responsible for the actions of the company.
“His co-directors and employees, most of whom are members of his family, have all stated that he was the guiding mind, the person behind the network of companies.”
Bruce Goss was disqualified as a director for eight years, and his associates were all barred between four and eight years.
There’s scum and there’s SCUM. Bruce Goss is SCUM.
RCI IS SHOCKED, SHOCKED I TELL YOU!: RCI just recently learned that “entities with no affiliation with RCI are contacting timeshare owners and incorrectly stating or implying that they are affiliated with RCI. These third party entities may offer to assist in the sale or rental of owners’ timeshare interests for an upfront fee, or they may invite an owner to attend an informational dinner to discuss updates to RCI exchange programs.
…”RCI also has been informed that certain resale service providers are offering to sell an owner’s timeshare (including RCI members) and thereby relieve the owner of her or his ongoing maintenance fee obligation, in exchange for payment of upfront fees and execution of a power of attorney to sell the owner’s timeshare.”
Oh my, how long has THAT been going on? (rolling eyes)
Anyway, RCI has issued a warning to members about this issue, urging them to use caution if approached by such outfits. Specifically named by RCI as companies that are not affiliated with RCI: Global Destinations Consulting, Inc. (also known as “GDC”); A+ Advisors, Inc. (also known as “RCI Management” or “World Points Management”); RCI Acquisitions and Rentals, Corp.; Equity Marketing Corp. (also known as Resort Equity Marketing); RCI Financial Management, LLC; Timeshare Relief, Inc.; and APEX Professionals, LLC.
Why was RCI, like, you know, the last one to find out???
WHO’S HOT & WHO’S NOT: So who’s maintaining their status quo or growing in this economy and who’s not doing so well? Perhaps surprisingly to some, a few of the bigger outfits (especially those specializing in luxury products) have had a particularly hard time. Maybe they, like so many others, suffered from what Alan Greenspan called “Irrational exuberance” and failed to heed the warning signs?
Take East West Partners, for instance, the group that has been concentrating on the Northstar-at-Tahoe project for the last several years. According to Reuters, the company’s East West Resort Development V, which controls the Lake Tahoe developments, has been forced into Chapter 11 bankruptcy as its real estate sales fell about 60% and it couldn’t secure funding to maintain its properties, including its $100 million Tahoe Club.
East West Resort Development has filed a reorganization plan and will probably come out OK on the back end, but they’re going to have to rethink their sales and marketing strategy.
Also in the luxury real estate/fractional category: Ultimate Escapes, which lost its AMEX listing even as it continues to grow and is currently trading on the OTC Bulletin Board while it waits for market conditions to improve. (As an aside, in a kind of “Where are they now” thing, Ted Curtis was recently appointed chief sales and marketing officer for the company. Did you know that?)
Even the Star Resort Group’s redoubtable Carl Berry is frustrated, saying in a December ’09 blog post:
At Star have (sic) stripped down our business model and built it back up again to be more responsive for 2010. We’ve recast our marketing, selling and management services to be more flexible and responsive to take advantage of the openings for business as they occur. We’ve cut expenses to the bone. We are lean and competitive.
Developers we are working with, including ourselves, are deciding to move past the planning phase and commit money to their projects.
We’re going to focus more on Canadians and the political moderates and liberals. No reason to listen to the conservatives bitch about Washington DC and not buy our products. In 2010 we will make sales happen and darn the customer who stands in our way!
You can find out why Berry seems disenchanted with conservative Americans by reading a couple of his earlier posts in his blog…
The giant Starwood has been regrouping and says it will not start any new timeshare projects and won’t develop some sites and future phases of certain existing projects.
Marriott says it won’t invest in any new timeshare developments in the near future, either. Marriott expects the timeshare business to pick up in 2010, but consumer demand has not picked up enough to warrant any new investment in inventory any time soon. The company also said that though they still see timeshare as “a great business” they believe timeshares are unlikely to return to the levels of their heyday, when they accounted for as much as 30 percent of the company’s profits. They opine that timeshare will end up being a smaller part of their business than it was at the peak.
Meanwhile some of the smaller developers, who tend to slip under the radar in media attention, are getting bigger. One to look at: Florida’s Spinnaker Resorts, which is forging ahead on two fronts.
Work began in January on a $6 million renovation project to upgrade the Royal Floridian in Ormond Beach, and ConTech Construction, lead contractor, also announced that noted filmmaker George Billard will document the nine-month construction project so you can all watch. Those interested can track the project’s progress via short videos on ConTech’s Web site, www.contechrestoration.com The renovation should be complete in October, 2010.
At the same time, construction is ongoing at their $11.2 million south tower at the Royal Floridian, the Royal Floridian South, which will be an Interval International Premier Resort. Located on the beach, February construction updates show pilings have been installed, pouring of grade beam and pile caps has commenced, and the garage was started the week of February 8th. When complete, the seven-story structure will house 53 units, bringing the total to 168 units. The new tower is scheduled for completion in February 2011.
Shell Vacations, which has been around forever and made it through some tough times in the past, had been very quiet recently and I wondered about them. Then, in January, Shell announced it had received a substantial investment from York Capital Management, a leading global investment firm. Interestingly, Shell said it intends to use the proceeds from the recapitalization to grow its operations and pursue opportunities in related businesses. Related businesses? And what would those businesses be? Shell ain’t sayin’ but it sure got my VPG antennas up.
In the Northeastern USA, InnSeason Resorts is getting bigger. After six years of EPA and DES testing, approvals, waiting and more waiting, the company was finally able to start work on the site of Riverwalk Resort at Loon Mountain. Replacing the old Franconia Papermill will be a 170-unit mixed-use resort development complete with world-class luxury accommodations and amenities, including a 400-seat performing arts theater, and conference center, outdoor four-season pool, spa facility, dining, and retail shops. InnSeason is planning for a 2012 opening for the resort.
So who has a higher VPG? Smaller or bigger?
And that’s it for this weekend. See ya next weekend, and watch that VPG… Oh, and if you enjoyed this, tell a friend!
Published every Saturday, or whenever there’s something that hits Woody’s VPG-ometer.
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