April 24, 2010: THINKING OUT OF THE BOX: When times are tough and timeshare owners/members are having a hard time paying their maintenance fees/exchange fees, many will simply default or try to sell their interest or otherwise fall behind. That’s stressful both for the owners/members and for the company, which wants those fees.
Well, Petchey Leisure, with resorts in Portugal, Mainland Spain, Tenerife and the UK as well as inventory at a number of other resorts in both Europe and worldwide, went proactive instead of reactive about the issue by developing an “Easy Pay” program. Easy Pay allows you to pay your 2011 annual fees in six equal payments starting from June 1, 2010. Not only does this hopefully help with budgeting, but it guarantees that your 2011 annual fees will be paid at the same rate as 2010. So, whatever the increase next year may be, you will not be affected. And, of course, you will be able to enjoy your holidays. You can make your monthly payments by Direct Debit and there is no charge for that option.
Good idea, don’t you think? How many other timeshare companies are doing that?
D.I.V.O.R.C.E. Following an acrimonious battle between Four Seasons and Broadreach Capital Partners over management of the luxury Aviara Resort in Carlsbad, CA, an arbitration panel has granted the pair a divorce, with custody of the kids split between the two companies. Broadreach has chosen Park Hyatt to be the new manager of the luxurious 329-room resort. Four Seasons will continue to manage the Aviara’s 132 timeshare/residence club villas.
It’s been an ugly fight, with Broadreach trying to fire Four Seasons last year and Four Seasons responding by barricading the property and blaming the resort’s financial problems on Broadreach’s debt load. Months of nasty legal wrangling ensued, with a federal judge finally sending the case to arbitration last May.
The arbitration panel decided that the two companies shared responsibility for the failure of the marriage, and as part of the divorce Broadreach was ordered to pay alimony to compensate for the 30-year lease Four Seasons signed in 1995 to manage Aviara (with three 20-year options to renew).
How long will Four Seasons’ management contract for the timeshare portion last? That little detail was not disclosed. And what about owners’ ability to use the facilities of the hotel– the tennis courts, children’s camp, etc. Will fees rise? Will the value of the memberships drop?
Anyhow, if you were under the impression that high falutin’ luxury outfits were somehow above the fray and always played nice, think again…
VERY BAD BOYS: The timeshare resale business has really hit the news in a negative way lately, and some of the “operators” are seriously not nice. Take Palm Beach, FL for instance. A recent report in the Palm Beach Post revealed that officers and registered agents in timeshare telemarketing businesses (mostly resale-related) in Palm Beach County have been arrested at least 76 times(!) on charges ranging from cocaine possession to assault. Outrage about timeshare resales makes it the No. 1 complaint to a Florida state fraud hot line, surpassing even mortgage problems.
Highlighted in the article was Helmut Goellnitz, who pleaded guilty last February to arson charges in connection with the torching of a North Palm Beach salon last June (because his girlfriend didn’t like the job the salon did on her eyelashes). That’s in addition to his alleged sins as registered agent, vice president, secretary and treasurer of Nationwide Marketing Solutions, a company that weasled up-front fees from timeshare owners with promises of pending sales. But of course no sale ever materialized, and the victims didn’t get their money back, either.
That scenario is a common refrain in more than 10,000 complaints from all over the country against Florida timeshare resale firms since 2007.
The article also said:
In many cases, employees arrive at time-share telemarketing firms with a past of their own. Some have been spotted wearing ankle monitors at on-site visits by state regulators, said Sasha Velez, senior financial investigator for the state’s Department of Agriculture and Consumer Services. In at least one instance, an executive said she was “mentoring” women who were coming out of drug rehab, she said.
Nationwide Marketing is one of 17 timeshare resale firms subpoenaed last month by the Florida Attorney General’s Office. Ten of those firms are based in Palm Beach County.
Well, it’s about time that action was taken to curb some of the abuses that have for so long plagued the resale business. Those guys and gals give timeshare salespeople a bad name.
HOW NOT TO ROB A BANK: Does anyone know Robert Williams McKelvy? White male, blond, 43 years old, about 6 feet tall, heavy Southern accent? Apparently he used to sell timeshare in South Carolina, though I don’t know details of who he worked for and when. I ask because the guy has been arrested for bank robbery on Hilton Head Island. Unfortunately his getaway car, parked about a block from the bank, wouldn’t start and he couldn’t get a jump from anyone. Yeah, I know; but it gets funnier, in a twisted sort of way. You can read all the details in The Island Packet. It’ll have you shaking your head…
This was not McKelvy’s first brush with the law. In December 2006 he pleaded guilty to criminal check fraud charges, and he is also wanted by the Nevada County, Calif., Sheriff’s Office in connection with his failure to appear in court on other unrelated charges, according to a Nevada County Sheriff’s Office most wanted list. I don’t know if he was any good at selling timeshare but if he did rob that bank, apparently he’s not a very good criminal…
ILX STOCKS RISING? Maybe someone can ‘splain this to me: According to China Analyst, which recently published a report on the momentum of US-listed Chinese Stocks, ILX Resorts Incorporated (OTC:ILXRQ) had the 10th highest price momentum in that segment of the market as of April 14. It was trading at 100.0% of 52-week high. Its price performance was 550.0% for the last 4 weeks. Say what? Is that the same ILX Resorts that Diamond Resorts is possibly purchasing out of bankruptcy? Are investors hoping to actually see some profit off that stock when/if the Diamond deal goes through? Educate me.
ACCOUNTING MATTERS: Remember a few years ago when Central Florida Investments’ David Siegel bought a majority share of Bluegreen stock? That would have given Siegel control of Bluegreen. Bluegreen promptly enacted a “poison pill” to prevent that, and eventually Bluegreen and Siegel reached an agreement about the whole thing that left Bluegreen and its major investor, BFC Financial Corporation, in control.
Well, last November BFC, indirectly through a wholly-owned subsidiary, purchased approximately 7.4 million shares of Bluegreen’s common stock from CFI for an aggregate purchase price of approximately $23 million. BFC now owns approximately 16.9 million shares, or approximately 52%, of Bluegreen’s issued and outstanding common stock. What that means is that BFC essentially “owns” Bluegreen.
BFC is pretty grateful now, I’d bet. You see, BFC recently posted $103 million in profits for the quarter ended Dec. 31, a dramatic turnaround from a $53.3 million loss a year earlier. And where did those gains come from? The company consolidated Bluegreen’s financial statements into BFC’s own results. That accounting change resulted in a $183.1 million gain in the fourth quarter. Without that boost, BFC would have lost $80.1 million in the period.
Accounting matters. It’s all in the way that you write it.
WHO WILL BUY? In a somewhat related category, Carlton Exchange, which is looking to auction off $350 million worth of property owned by David Siegel, has opened the properties for public inspection. Carlton has organized open houses for the top assets in the portfolio. Siegel has said the assets are extraneous to his core business of timeshare development and management, even though some of them are in fact timeshare properties.
Carlton says they’ve already received offers and is optimistic that the market is turning and buyers are out. In all, there are 60 Prime Multifamily, Hospitality, Timeshare, Office, Retail and Land Assets listed, with a bid date of April 30. Better hurry…
MARRIOTT TURNING THINGS AROUND? Sales were up 10 percent in the first-quarter at Marriott Vacation Ownership International, excluding an $8 million allowance for fractional- and residential-contract cancellations.
The company said its timeshare operation reported stronger demand and has been more efficient at closing sales.
Note, however, that this good news does not change Marriott’s current view that no NEW timeshare projects will be built in the near future. They have enough inventory already on line to last for a while…
EXCHANGE FEES: A little birdie tells me that in July Interval International will be raising its exchange fees by a whopping $10. True or Not True? That would make the charge $149, and since II has held it at $139 for several years that’s not too bad. Especially since RCI members are already paying $179 for Internet Exchanges and $194 if they use a Vacation Counselor.
Still, since exchange fees are sooo much less via other exchange companies (RedWeek, Dial an Exchange, SFX and others) one wonders why more ts owners don’t make the switch…
LONG TALL SALLY: Ya gotta love a yacht named Long Tall Sally. And if she’s being sold in fractions, it’s even better. Being built in Holland and sold by Dutch brokerage company De Valk, she’s an Expedition Sailing Yacht and is set for delivery in 2011.
A 33m sailing ketch with all the toys, Long Tall Sally will be sailing an unconventional route around the world at high latitudes to places like Spitsbergen, Greenland, Northwest Passage, Antarctica and Kamtsjatka. Fractions are available at €150,000.-, or multiples thereof, with a maximum of 16. One fraction allows you to enjoy your expedition yacht, or another twin-yacht within the fleet of identical yachts, one month per year, with two persons in one double cabin. Annual costs per fraction are budgetted at €28,000, including victuals, bunkers and regular running costs. Four fractions suffice for the exclusive use of the ship for one month per year. Ideally, 4 owners with 4 fractions each would jointly own the explorer yacht.
You can find out more about the yacht and the program by clicking here. It’s pretty neat. Wish I could afford it. Wish I knew something about sailing. Wish I didn’t get sea sick… 😐
PEOPLE: Joel Lazar gets around. He’s served on ARDA’s Board of Directors and as chairperson of the ARDA Membership Committee; Corporate Vice President of Sales and Marketing for Transeastern Homes; CEO, Cimarron Resorts Inc.; President & C.O.O. at Century Marketing International; formed the McLaughlin Lazar Group with Bill McLaughlin; and was briefly Vice President, Marketing, Eastern Region, for DRI.
More recently he partnered with Art Falcone and Charles L Strasser, forming Concept Marketing International d/b/a CMI. CMI advertises itself as providing turn key sales and marketing and consulting services for Resort real estate projects and Private Residence Clubs. And CMI is now marketing a travel club called All Inclusive Excursions out of a new sales room in Gulf Shore, Alabama.
And that’s what Joel Lazar is doing these days.
And that’s it for this weekend. See ya next weekend, and watch that VPG… Oh, and if you enjoyed this, tell a friend!
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