DC4MS

Interview with Jim Tousignant, CEO Ultimate Escapes – July 7, 2008

I had the opportunity to interview Jim Tousignant, the President and CEO of Ultimate Escapes, the second largest Destination Club at their headquarters in Orlando, Florida. The interview was scheduled for Noon on July 7, 2008 and was anticipated to take about an hour. Although I prepared several questions of my own, the majority of my questions were submitted by readers of the DestinationClubForums.com website.

When I arrived, I was greeted by Jim Tousignant’s secretary and shown to the board room and offered some refreshments. Jim arrived a few minutes later with a laptop loaded with a custom Powerpoint presentation that gave an overview of Ultimate Escapes, their history, charts of their rapid growth, location map of all their properties, and brief plans for the future. It was a very impressive presentation and was even more complete that the one he gave at the Destination Club Symposium in Miami. He feels that the biggest challenge for all clubs is can they increase awareness of the Destination Club industry.

The interview was very relaxed and took place in a comfortable location that gave both of us an opportunity to ask questions of each other. Jim and I have a similar personality in that we both are excited by the Destination Club industry and we both like to talk (a lot). This meeting was less like a formal interview between a journalist (which I am not) and the CEO of a major company (which he is) and more like two friends sitting down to talk about their latest business ventures and travels. For every question I asked, Jim had an equal and appropriate question for me and I think we both enjoyed each other’s company.

Jim began to share with me his previous experiences at Morgan Stanley, Thomson Financial, and Multex, and his ultimate decision to leave New York City after the attacks on the World Trade Center on September 11, 2001. Jim and his wife decided that they would move to Florida and began investing in commercial and residential real estate. His “Ultimate Dream” was to create a business while enjoying fantastic vacations as everyone seems very happy and relaxed while on vacation.

I was surprised to learn that Jim was an also owner of a few timeshares (one was located on St. John) and that he loved to travel, but always felt that the experience could be better than what was currently being offered. He stated that when he first heard about Destination Clubs in the early part of 2003 from a good friend, he instantly thought…wow, what a great concept and how can I get involved in this industry.

After Jim moved to Florida, he started out small and recruited some of his trusted friends from his previous business like Phil Callaghan (Senior Vice President and CFO Ultimate Escapes) and Gregg Amonette (Senior Vice President, Business Development, Ultimate Escapes). He said the initial growth was slow, but the turning point came when they decided to buy the Tanner & Haley assets.

Jim explained that when he heard about the Tanner & Haley liquidation, he felt that his company (Ultimate Resort) could make a play for it as he felt the other companies like Exclusive Resorts and Quintess would not be interested. Jim always felt that the true value in this purchase was the membership base, not just the underlying real estate assets. Tanner & Haley had a lot of leased homes that were kept to satisfy membership demand and the less popular locations are slowly being deleted. Additionally, they structured the refund obligations and limits of Tanner & Haley club members to avoid the unsustainable expectations of the previous reservation policies and feels that they can now run a successful Destination Club.

One interesting statement that Jim made was in reference to various Destination Clubs size, scope, and scalability. He is a firm believer that it is difficult to run any Destination Club with less than 1,000 members as the cost to run this type of business is too great for smaller clubs to be sustainable. He is a little concerned about the future success of the smaller clubs and stated that Ultimate Resorts was not profitable before the Tanner & Haley merger. He stated that once they completed the merger, they finally began to show a profit. In fact, he unequivocally stated that they went from 80 members to over 800 members almost overnight and only when they added the members from the Tanner & Haley merger, did they finally become cash flow positive.

One interesting conversation revolved around the increased barrier to entry for new Destination Clubs as he feels that any new club would need in excess of $100 million to even begin to compete with the established clubs and unless they quickly add large membership numbers on a monthly basis, it will be hard to sustain a business. He fully expects that a brand name company will soon enter the Destination Club industry and he feels that this will increase awareness for all the existing clubs and be good for everyone. He believes that the brand name corporations are sitting on the sidelines studying the current players, watching their mistakes and successes, and waiting for a profitable business plan to emerge. He also feels that once one major brand enters the industry, a second and third brand name will quickly follow.

During our conversation, I asked him why the merger between Ultimate Resort and Private Escapes took so long while the merger between Ultimate Resort and Ventures Equity Vacation Club went pretty quick. He stated that the Private Escapes deal took much longer than the Ventures Equity deal due to the size of the merger and number and variety of homes and members. He stated that he also wanted the mergers to be completed much quicker than they were, but integrating the two systems with Private Escapes was much more challenging. He did clarify, that they had to review every single home, every single member contract, and had challenges with certain international locations that took significantly longer than anyone expected.

When I mentioned to him that some of the DestionationClubForums.com readers were concerned with a lack of information and communication from the club, he seemed surprised and stated that they answer hundreds of questions per week from their members calling them directly. In fact, he said that his company has a tendency to over communicate with their members with a variety of methods like phone, e-mail, newsletters, mailers, etc. He stated that the quiet period during the Private Escapes merger was simply a result of the tremendous amount of effort from both companies to complete this transaction.

During the course of the interview, I asked him several probing financial questions that he was not comfortable answering as he was concerned with giving away too much trade-secret information to me (and our readers). He explained to me that Ultimate Resorts is focused on running a successful business and that due to the competitive nature of competing clubs, there were certain questions that he would not answer in great detail. Of course, I wanted to know all the juicy details about how much they were making and what their cash flow looked like, but just like Coca-Cola…they want to keep their formulas for success top secret and I can’t fault them for this.

Jim told me that Ultimate Escapes is spending a tremendous amount of time and energy on “Rightsizing the Portfolio” which means that they are looking at each club, each membership level, every home and location and deciding which works best for the club and the members. They are in a long process of creating a workflow list of what every single home needs in terms of updates and improvements, technology, furnishings, carpeting, and paint. He indicated that several of the original Tanner & Haley homes need new electronics such as flat screen televisions, computers, wi-fi Internet access, and modernization. He indicated that this process will be costly and will not happen overnight.

Ultimate Resorts will have an internal schedule of updated electronics per home and the rebalancing of their home portfolio will be based upon member demand as they want to have good utilization of all their homes across all clubs and membership levels. In fact, Jim stated that the “optimization” of Ultimate Resorts is one of their top priorities.

Jim stated that their members are the most important aspect of their business and the homes are secondary. He told me that the Destination Club industry is an evolving business and he expect to see additional consolidation of several clubs (none were mentioned as potential acquisitions) and he feels strongly that size and scale does matter for long term success.

One of the challenges that Jim faces is how does he grow his business when 90% of his target demographics don’t even know what a Destination Club is all about. However, he is optimistic about future growth as he feels that once someone tastes a Destination Club experience, it is an addictive product. This is why Ultimate Escapes is creating special promotions like the American Express “Going Once” program that he considered very successful as it gave his club tremendous exposure to their targeted demographic group.

We spoke about his company’s attitude toward the green movement and conservation. He wants to make sure that all the Ultimate Escapes homes are green as they are a shared asset and by definition more green than individuals buying non-shared vacation homes. They are in the process of adding CFLs to all homes and pay special attention to their environmental footprint. In fact, green homes generally cost less to run on a monthly basis than non-green homes and this help with the bottom line for corporate profitability.

When the topic of member to home ratio came up, Jim was quick to point out that that occupancy and availability are two much more important metrics than the simple member to home ratio that is commonly used in the industry. The current occupancy rate is now about 50% for the entire Ultimate Escapes portfolio, but he expects to increase that to a 70-80% range in the future as the portfolio is rebalanced. He was proud to show me how they decide which homes to keep, which homes to sell, and what locations need to be expanded. He stated that a 30% occupancy for any home or location is a “sell” indicator and a 75% or more occupancy for any home is a “buy” indicator. Thus, the members ultimately get to decide the future of the club as membership demand will dictate where Ultimate Escapes puts their resources.

Jim and his staff keep a close eye on the total occupancy for the next 1-2 years as this is a gauge for their future direction. He feels that if any Destination Club has any homes with less than 50% occupancy is a potential signal that the club is not profitable, while any club with over 80% occupancy is a signal that membership reservations at that location are too tight and should be expanded.

Although, he did not admit to wanting to take Ultimate Resorts public, based upon his previous background and corporate experience, it is easy to extrapolate where Ultimate Resorts is heading. They are growing at a hyper speed rate with mergers, acquisitions, and aggressive sales and marketing. Perhaps they are trying to attract a larger player such as a brand name (Marriott, Hyatt, etc.) or perhaps they are planning on a multi-million dollar IPO, but one way or another, Jim has his sights set on running a club with hundreds of thousands of members and is not too focused on what the other clubs (i.e. Exclusive Resorts) is doing. It will certainly be fun watching them grow.

DC4MS

Questions and responses for Jim Tousignant from DC4MS

1. What are your impressions of our website – DestinationClubforums.com and how actively does Ultimate Escapes monitor our content and respond to our members concerns?

He feels that DestinationClubForums.com does a good job educating the public on what Destination Clubs are and the interaction between all the users is a fantastic resource. He stated that he occasionally logs onto the site and reads some of the threads, but has not posted any messages. He indicated several other Ultimate Escapes employees also monitor the site, but so far they have not posted in any of the forums. If a significant problem or member concern is discussed online, they will try to quickly resolve the issue, but would rather members contact them directly than post it on our forums. He currently feels that if they answer one post, then they will be setting an expectation for them to respond to every question or concern in a public open forum.

2. Some Destination Clubs have expressed concern to me about the unfiltered content and anonymous nature of our discussion forum website. Is this a concern for Ultimate Escapes and is there anything that you think we can do better?

He has mixed feelings on the anonymous nature of any website as he personally would rather know who the posters are and thinks this would offer a more realistic experience. He does admit that the most important issue is making sure posts and threads contain factual material as there are no barriers to someone creating an online account and posting whatever they want, even if they may not be involved with any Destination Clubs. He feels that social networks will be very important in the future and they are exploring ways for their own club to take advantage of new online technologies. He also stated that the member experiences and online sharing of trips is very valuable as this is not only good for Ultimate Resorts, it is good for the entire industry.

3. How does Ultimate Escapes view the Internet in terms of exposure for the Destination Club industry?

He stated that his background in technology and software were solid and that he intends to use all the technology tools to manage Ultimate Resorts. He stated that they put a lot of time into their new website redesign and continue to improve the backend software for reservations and member services. He feels that the Internet gives Ultimate Resorts great exposure and has even considered leveraging all the new online tools like YouTube, discussion forums, social networks, and Blogs. He is also very concerned with making sure their online image has factually correct information.

DC4MS

Questions and responses for Jim Tousignant from DC4MS readers (i.e. you guys and gals)

1. How will Ultimate Escapes balance the unlimited use of Legacy Private Escapes members and the 2 year holiday window of the former Ultimate Resort members vs. 1 year window and lottery for legacy PE members as these two items seem to be the largest differences to reconcile and possibly motivation for Legacy PE members to move to UE?

He stated that Ultimate Escapes will always honor a member’s original contract, but will provide incentives to try to get all members to fit into their current membership offerings. He stated that all the previous benefits of membership will be honored, but demonstrated several scenarios where most members would want to take advantage of the current membership plans. He does not see any problems with supporting multiple systems, but would like to see a unified system in the future as this is easier to manage. He disclosed that the current Private Escapes legacy members actually only book 26 nights per year and thus, this is not really an unlimited number as advertised. Jim never liked the phrase “unlimited” as this implied false expectations as every Private Escape has some type of limit on the number of reservations they can have on the books at one time. He currently feels that the Private Escapes members would be better served with an Ultimate Escapes Gold plan that offers 28 nights.

2. Which locations will Ultimate Escapes acquire multiple properties similar to Nevis and in what time frame similar to Exclusive Resorts multiple-unit cluster strategy?

He indicated that the days of buying one or two homes per location are behind them and he feels that clustering of several properties (he did not indicate an exact number) is the wave of the future for his club and other clubs as there are economics of scale that make it more profitable and allow better membership services with a multiple purchase of several homes. He also indicated that Ultimate Escapes will only buy new homes in locations where Destination Clubs are fully welcomed and embraced. He indicated that they have 7 homes in Nevis and 2 under construction and feels that they will ultimately have 14-15 homes at that popular location and will also have about 20 full-time employees at that location.

Cabo San Lucas has 16 homes in 4-5 different developments and he would like to see better consolidation. New York City is one of their most requested locations and they currently have 12 properties there and may add more. Jim indicated that the key market locations should support about 3-4 homes per cluster (or more) so that each location can support a full-time Ultimate Resort concierge.

3. When will communication to UE members be more uniform and consistent and what could you have done better or wish you had done better to ease the challenges of the merger with PE and all the time between announcement and "closing" the deal.

Jim stated that there was a period of several weeks during the merger that multiple levels of communication were being sent out by different individuals. They had several thousand contacts in several databases that were very complex. He indicated that their staff went thru every contact and cross referenced it with all databases in an attempt to create one unified system and that simply took a tremendous amount of staff effort to organize. Of course, he wished the merger would have been completed faster than they originally planned, but was pleased with the final result.

4. What happens to the PE ski medallions and the former UR MAP program?

He was not aware of the exact details of the Ski medallion program and wanted the concerned members to speak with their representative about this and said that the MAP program is no longer offered. Jim did reveal a future member promotion that they are working on to reward members rather than offer cash incentives for referrals. He indicated that the new membership reward program will be designed to show appreciation to members that refer a new member to Ultimate Escapes. Although they have offered American Express points in the past, the new reward program will be used for members to take advantage of free golf, dinning, and spa packages. He stated that this is actually better than cash or annual dues rebates as their members indicated that they don’t want their friends to think they are only interested in a cash reward for referring them to the club.

5. 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?

All three clubs maintain an equal member to home ratio and they are in the process of rebalancing their homes in all clubs. He stated that new members like to join the Premier Club and generally upgrade to the Signature or Elite clubs within a year as they are impressed with the home offerings. He also wanted readers to know that the published price average per home (i.e. $2m home values for the Signature Club) is an average guide and not a firm dollar per home price and feels that too many people that are comparing the different Destination Clubs get hung up on this number and think one club with a $3.5m average is significantly better than a club with an advertised $3m average.

6. 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?

Ultimate Escaped did not assume a liability with the Tanner & Haley members, in fact, they still have an outstanding lawsuit against the former club. However, Ultimate Escapes offered about 660 Tanner & Haley members a lifetime Bronze membership at the Signature level and a one-half of the members paid an upgrade price to join at the Elite home level club. The plan would be for 5 years and a member could then get 60% of the current membership fee refunded on a (3:1 basis) and after the 6th year a 70% refund, and finally after 7 years a 80% of current price refund. Jim stated that they have a 99% membership renewal rate across all clubs and plans and this includes all the tanner & Haley members.

7. Do you see more consolidation in the DC space, and will UE be interested in buying a club like High Country Club?

Jim feels that there will be more mergers and acquisitions in the future and he thinks High Country Club is well managed and he has a lot of respect for the Kirschner brothers and feels that they are one of a few clubs left that would make a good merger candidate. He quickly changed subject and showed me a pyramid diagram with a large base of Premiere Club members, medium level of Signature Club members, and small top level of Elite Club members as the future model of Ultimate Escapes. He feels that by offering three different levels, it allows members to upgrade or downgrade to a club that may better suit their needs in the future. He admitted that he originally underestimated how many members would want to upgrade their membership and was pleased to report that there have been several hundred upgrades in the past year alone and he expects this trend to continue. He also stated that a Destination Club that is not growing, it is probably dying as sustaining a profitable business with a flat membership is very difficult, unless they have well over 1,000 members.

8. UE now has 15 different membership plans. Do you ever plan on publishing the breakdown of UE total membership base?

Ultimate Escapes does not plan on publishing the exact membership breakdown, but he stated that the Signature Club is their largest membership, followed by the Elite Club, and then the Premiere Club and that the Bronze membership plan is the most popular plan and accounts for about 40% of all memberships. They currently have only one sales team for all membership levels and plans and he does not see any problems as they try to advise people to join a club that best suits their current needs as their upgrade policy allows members to change club levels at a later date.

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

He laughed at this question and wished that members would focus on enjoying the current 50 locations that they already have, but indicated that the following areas are potential future locations – Anguilla, Barbados, British Virgin Islands, and several areas in Florida.

He also went on a tangent to state his disappointment with the Reunion Orlando location. He said that that location has been unfriendly towards Ultimate Escapes and he could not, and will not buy a home in an area where the club is not welcome or an area that prevented their members from enjoying all the resort amenities. He indicated that they were in the process of buying two additional homes in the Reunion location and cancelled their contracts and will remove the current homes soon.

Jim mentioned the new Ultimate Collection that offers hotel stays around the world as a great membership tool. He stated that this gives members a preview of certain locations and the club an idea of membership demand. They have already booked over 1,000 nights within the Collection.

10. How many member equivalents does UE have adding up all of the full and partial memberships?

This is not public information.

11. Exclusive Resorts latest price hike makes UE's economics much more compelling than before on an apples-to-apples basis. Are there new member sales since the PE deal closed up? IS UE finding that consumers are buying into their new value proposition? Are you concerned about competition from Exclusive Resorts, Quintess, or High Country Club?

He was pleased with the recent price increases of Exclusive Resorts as it makes it easier for Ultimate Escapes to compete on a dollar per night basis. He also indicated that he feels that the “unbundling” of various club offerings like days, holidays, and family access is a great concept that he thinks will be embraced by most of the clubs. He also thinks most Destination Clubs will be moving more to a fee based system and that Ultimate Escapes will always compete on prices and attempt to offer better value than any of the other clubs.

12. What have you found to be the biggest cultural differences between T&H, Ultimate Resort, Private Escapes, and Ventures Equity, and how are these cultural issues being resolved within Ultimate Escapes?


Integrating the cultures of Tanner & Haley with their club was a pretty easy process as there was no club culture at Tanner & Haley as they were so dysfunctional. Jim had to personally explain the new culture of responsible membership to several irate Tanner & Haley members, but once they understood the ground rules and that he was serious about running a profitable business, no more debate was needed. The integration with Ventures Equity was also easy as they only had 17 members. However, the integration of the Private Escapes was the most difficult as they had similar cultures, but had different ideas and processes on how to manage reservations and most Private Escape members were happy with their current system. Thus, Jim and Richard Keith sat down to form a process where they took the best offerings from both clubs and used them with the new club. The Ultimate Escapes goal is to get all members on the same plans.

13. 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?


An interesting statement was made in reference to the refundable membership deposit of certain clubs. Jim believes that a 100% money refund that is offered by some is risky for the club and is a danger sign. He thinks a 3:1 ratio of new members to resigning members prevents a run on the bank. Jim stated that Ultimate Escapes had the best new member growth in the past 2 months ever and that all three clubs are getting broader and deeper memberships. He feels that his club offers more locations and better value than either Exclusive Resorts or Quintess and offers better upgradeability than High Country Club.

14. 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? Are there any members on the exit wait list?

There is currently no one on the Ultimate Escapes resignation list and the delay in the past was probably due to the merger. Ultimate Resorts does not publish a list of where a member may be on the list and only 1% of current members resign each year under a 3:1 new member to resignation member ratio. He was careful to explain that members should not expect immediate liquidly of a club as they have a lot of resources tied up in non-liquid assets. He stated that Ultimate Resort had zero members on the list and Private Escapes had a few during the merger, but there is nobody on the list now.

15. 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?

He is focused on “rightsizing” the club during the next 12-24 months that will be based upon demand and membership occupancy as this is the most important factor as to why a property gets added or deleted. They are now at a 50% occupancy level, but he expects that to slowly rise to 70%.

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

Ultimate Escapes is currently cash flow positive due to their large size and scale as compared to when they were cash flow negative when they only had 80 members. He feels that the club can still be profitable to run even with zero new membership growth, but would expect to lay off a significant amount of staff if this was to ever occur to reduce costs, especially in the sales and marketing departments.

17. Ultimate Escapes has grown rapidly with mergers and acquisitions starting with the bold purchase of Tanner & Haley assets. How are the T&H members adjusting to Ultimate Escapes and how is member retention progressing.

The Tanner and Haley members are very happy since Ultimate Escapes took over their memberships as they were in a no win situation with their previous club. The 2007 survey indicated that Ultimate Escapes had a 95% member satisfaction rate, 99% member renewal rate, and 50% of all new members were a direct result of current member referrals, especially the former Tanner & Haley members.

willmyclubmakeit

Bravo. Thanks for taking the time to interview Jim and sharing the results with us.

governor

I would suggest to Jim that they publish for members and have available for prospects on a quarterly basis (1) quarterly balance sheet including the net asset test, (2) new members signed and upgrades, (3) resignations, (4) number on resignation list, and (5) number of leased properties. I'd want cash flow stmt too but perhaps asking too much. The DC concept is a winning concept held back only by the potential stigma of "Gosh how dumb was I. Of course, these are Ponzi schemes I should have known." While some people can say "well it's money i can afford to lose" this caveat is not the way to make DC's a 100,000 member market. The market of people willing and prepared to lose 100k - 500k is much much smaller than those willing to deposit it.

Disclosure is/should be a competitive advantage. The value of a brand is a sense of comfort. Provide that sense of comfort today and build yourself into the company of transparency and value before an existing brand (i.e. Starwood, etc) comes in and eats your lunch. Don't wait for those big brands to dominate. They will grow the DC space but steal marketshare fast.

The amount of overhead and mgmt time spent "managing information flow" and "explaining financial position" is taxing and expensive. UE should be bold and forthright ASAP.

Desties

Thanks DC4MS! That was definitely worth the wait.

I like most of what Jim said, though I know I couldn't have been alone in raising eyebrows when he used terms like rightsizing and rebalancing the portfolio.
I'll admit that current members are spoiled with healthy availability. However, the implication that occupancy rates will climb hints at a strategy where membership growth will outpace property acquisitions. I have complete faith in Rich and am starting to warm up to Jim, so I trust they will do right by the membership base in the end.

One thing that I didn't entirely agree on is judging a property's appeal by its occupancy rate. Outer Banks will never have more than a 50%-55% occupancy, but it would be a disaster to unload its presence there. Whether we're talking about great ski properties in areas that don't have much of a summer scene or summer homes in places like Lake George or Kiawah Island or Outer Banks that tend to go mostly unusued during the winter, the lack of year-round desirability actually makes these places that much more attractive when they are in season.

I have nothing wrong with UE eyeing the Caribbean and Florida for properties that can be milked all year long, but a lot of these limited season properties -- like the lakefront home in Connecticut -- are usually the deal-makers for prospective members.

Timeshares and fractionals are all over the 12-month destinations because it's good business. Since DCs are replacements for vacation properties in areas that are rarely 12-month destinations, every club worth its salt needs to have several charming seasonal properties.

Note to self - Make sure this is the first and last time you use the word "charming" on DC4MS.

TarheelTraveler

Well said as always Desties. Every club has a few "dogs" with ridiculously low utlization that ought to be cut, but you do need to have some seasonal driving distance destinations for members or ski destinations that will probably hover around the 50% mark.

I know you're not a reporter, DC4MS, but nonetheless, great reporting. Got a lot more out of this than any articles I've read about a specific DC.

star1000

Every quarter PE published on its web site a chart with membership numbers and growth as well as the "Enterprise Value" of the firm (roughly what percentage of member deposits could be covered out of net assets). I would hope that this basic information will reappear in the future as it has disappeared from the web site.
I am alos curious what happened to the members represetatives on the board of managers. Does this still exist.

willmyclubmakeit

UE had not shown membeship numbers (it was tough to get consistent membership numbers when I joined) but it has provided excellent utilization and availability information by property and property type (and by month and holiday). You are right that the ski properties are capped at a much lower utilization and the highest occupancy properties were city and beach due to year around potential. I'm sure as they selectively add properties they realize the leveage benefit of going with the beach locations but I hope that management also realizes when the ski properties are approaching theoretical capacity and that many join UE for the excellent mix of ski, golf, beach, and city locations--key is to continue having availabilty in the mix.

governor

I think there's some validity to Jim's comments on utilization but it is not the only rule of thumb. They should keep ski and seasonal locations accessible to northeasterners (like OBX, etc). But I'd question whether places like Bend and the places in the FL Panhandle will ever get the right utilization. To me those felt more like spec real estate appreciation plays (which work in a bull market but not in the market we are in) not member-centric decisions. Cut your losses and sell those properties, and buy more Turks & Caicos and Miami locations.

smtravelor

I raised the question of the reason behind the Bend, Oregon property directly with Rich Keith and I mentioned that it was not a location listed on the real estate strategy memo. He replied that Bend was purchased based upon the requests of members in the Northwest since there were no properties in that part of the country. As for WaterColor, since it requires a change of planes from most parts of the US including the NE, it is less desirable IMO. I agree that Miami, Hawaii and other more popular beach locations would be much preferable.

DestiFan

I disagree with the Bend and Watercolor comments...remember there are a lot more members of UE that don't live in the NE area. TX, GA, Northern CA, FL, all will use the Bend and Watercolor properties a lot.

Also, Watercolor soon will be a direct flight from NYC when the Panama City airport opens in 2010.

Since I have stayed at both these houses....trust me - you don't want to get rid of them. Both are truly incredible. In fact, Watercolor may be the best family destination in the whol portfolio for Beach properties.