DC4MS

Good news...I have a live face-to-face interview with Ultimate Escapes CEO Jim Tousignant on July 7th at 12 noon at the their headquarters in Kissimmee (Orlando).

I am developing a few questions of my own to ask and would love to open it up to the DestinationClubForums.com members to also submit questions.

So, let's have it, the first "user generated Destination Club CEO interview"

Thanks for your input.

willmyclubmakeit

I think the #1 question will how will UE balance the unlimited use of Legacy PE members and the 2 year holiday window of the former UR members vs. 1 year window and lottery for legacy PE members as these two items seem to be the largest differences to reconicle and possibly motivation for Legacy PE members to move to UE. I think a discussion re: advantages/disadvantages of Legacy PE members moving to UE would be interestiing. How certain locations where former Signature/Platinum properties were moved to premiere, such as Beaver Creek, will be back fileld as there is no current Signature Vail/Beaver Creek property and only one Lake Tahoe and one Steamboat property (although rumor is the Elite property will move to Signature when the Steamboat Mark Twain rental is no longer availalbe). Which locations will UE acquire multiple properties similar to Nevis and in what time frame similar to Exclusive's multiple unit cluster strategy? When will communications be more uniform and consistent and what could they have done better or wish they had done better to ease the challenges of the merger with all the time between announcement and "closing". What happens to the PE ski medallions and the former UR MAP program? That should be a start.

Desties

Here are the questions on my mind that I'd love to see Jim answer:

1. Signature had a half-dozen properties go to Premiere without replacements. Are the member-to-home ratios in the three clubs the same as a result of that move?

2. The Tanner & Haley members that came over were offered 80% to 100% refunds of the UE member deposits in 5-7 years, without a physical deposit into UE. What is UE planning to do so there won't be a run for the exits from old T&H members in 4-6 years? Is that the reason for the scaling via consolidation? To grow big enough where it won't sting as much?

3. UR is based out of Kissimmee and had an open house at the Reunion property to show off to new and prospective members. However, that home is going away come mid-December. Why isn't a home being purchased there?

4. The 10-month courtship with Private Escapes was a rocky one. What was the low? What was the high?

5. Do you see more consolidaiton in the DC space, and will UE be a buyer?

willmyclubmakeit

I had the same worry and have discussed with UE management. I believe the T&H people only got bronze memberships and get 50% refunds at 5 years which climb by 10% each year until they get to 80%. Hence at year 6 they get approximately $63,000 and year 6 approximatley $75,000. Therefore for approximately $10.000 of dues they get about $12,000 of increased deposit return rights which should not motivate a rationale person to resign (as I figured they would wait it out until the cliff vest at year 5 initially before understanding this). Understanding this and the fact that these people had invested $250 to $500,000 and have continued making payments for 5+ years post-bankruptcy, I now believe there will NOT be a run on the bank by these former T&H members given the recurring payment of dues/behavior and lack of economic incentive at least until year 8 when they should have the same business case for continuing or resigning as other members.

nwtm74a

Another question, why would a UE Bronze member want to stay with only 1 advance reservation a year when legacy PE members have up to 28 days in the system at any time. This means that the legacy PE members can in theory have up to nine 3-day reservations in advance making it virtually impossible for a bronze member to get a space available reservation at a destination that is "in season".

willmyclubmakeit

same question even at higher levels how they will balance Legacy membership 28 dsay advance lockups when only Platinum members have that ability on the former UR side.

ChicagoMark

What does their new home/new location pipeline look like for the rest of 2008 & 2009 across all three levels?

Given all of the different contracts that they have between T&H, UR, and PE-What do the numbers really add up to in terms of total members nights per year, and across their clubs? If I was buying in now-that would be a crucial factor relating to availability. Said differently-how many member equivalents do they have adding up all of the full and partial membership?

ER's latest price hike makes UE's economics much more compelling than before on an apples to apples basis-are their new member sales since the deal closed up? Are they finding that consumers are buying into their new value proposition?

vineyarder

1) What have you found to be the biggest cultural differences between PE and UR, and how are these cultural issues being resolved?

2) Who do you consider to be your primary competition for each of the three clubs, and what do you feel is UE’s competitive advantage over these prime competitors?

3) Questions have been raised in the forum about the transparency of the resignation process in PE, in that a resigning member was not told where they are on the list and therefore had no way of knowing if the 3 in 1 out policy is being adhered to; will this process be more transparent in UE? How will a member know that the policy is being adhered to?

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DC Skeptic

Post-merger, what is your view of the member/property balance? Do you feel you have more properties than you would like for the current membership or the reverse? If you have more properties than you would like how many new members do you need to add to get the balance to your liking? What will you do with those new deposits if it is not going into real estate (pay down mortgages?)? If the number of new members required to achieve balance is seemingly high, do you think it will impact calendar availability for existing members in a meaningful way?

Is the combined club cash flow positive on an operating basis? Is part of that cash flow from new member deposits? What percent? What would happen to CF if new member growth slowed/stopped? What would cover the shortfall?

What is your member/property ratio today? How do you define full-time equivalent members for the various legacy parties, particularly T&H? What is your member/property target?

Bourne

1. Are there any members on the exit wait list? If yes, is there a structured weekly/monthly process of notifying them of the status and position in queue?

2. How many members have joined since UR/PE decided to merge? My count is 100 as it was 1200 going in and 1300 coming out. I consider it to be a spark that would rekindle stalled growth for both clubs prior to the merger. Do they have any opinions/projections around it?

3. How many members have resigned in the last 12 months? What was the average wait time?

4. UE Signature is considered a $2M club. However, it was formed with properties from two underlying clubs with property values averaging at $1.5M. Details on how $2M valuation is calculated. Did they add multiple properties valued consideravly higher to come to $2M average valuation.

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NeilGoBlue

These are awesome questions... i wonder what his reaction will be to the quality and detail of the questions...

willmyclubmakeit

I would still like to see a roll of the membership by year and year to date 2008 which would show new members and resignations by period. Also it would be good to have this split by club. Some information on pre tax net income break even level of membership (# members) and cash flow break even as well as when this is expected so that their is some transparency as to level of financial risk of memers deposits.

DC4MS

I agree.

I am sure that UE is monitoring this site/thread and he should be well prepared for these questions (hopefully).

3DH

If not, God help him when that interview rolls around! He may feel like he is in front of a firing squad!

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Desties

To be fair, you're comparing the UE Bronze membership -- that members can pay $125,000 to join today at the Signature level -- to the Signature legacy plan that PE members paid $200,000 for over the past two years.

The Platinum plan is the better financial fit (or Gold if you assume no deposit appreciation on the PE side for two years, but since UE is offering Platinum at the Gold price in its latest promo, Platinum is the best fit).

willmyclubmakeit

refresh my memory as what is the annual dues comparison between the UE bronze (about $10k) and the PE legacy as the annual dues is as relevant as the deposit (especially if the deposit is returned via the 80% of market terms). Also its interesting that I was told there are not that many platinum singature members although the economics are pretty compelling. I believe that the Platinum signature plan provides comparable stay benefits to PE Legacy with a slightly higher deposit (and not sure re: dues, but at the promtion level presume somewhat close) as few will use all 42 days or more and you get 28 of those days up to 2 years in advance (which is surely much more preferable and valuable if you believe ER pricing than PE Legacy at least Xmas holiday where you can only get Xmas holiday via lottery one year out--if there are any days left). How they will reconcile the 2010 and beyond Xmas holiday is a key issue which it would be interesting to hear Jim's comment about but I suspect that will be lever used to convert PE legacy to UE memberships (IMHO).