Quintess Michael

What was the hardest part of joining a Destination Club?
This is a very complicated thing, that seems pretty simple at first.
The fact that it SEEMS simple, complicates it even more.

What was the most difficult part of the process for you ?
(besides writing the check

__________________
Michael Aumock
Director, Membership Development
Quintess, The Leading Residences of the World

Sandman

QM --

For me it was definitely the concern that I was being taken. I was not worried so much about perhaps overpaying per night, but more so concerned that someone will just close up shop and walk away with the cash (or perhaps as in the T&H (and Portofino?) cases, blow the funds in a tech-start-up-esque growth over substance manner.

In an odd way, I might have preferred having a broker (say a big real estate firm or investment house) in on the process so I could look to someone other than myself if the disaster scenario occurred. None of the DCs are big names that have a long track record and can be trusted off the bat. (A&K perhaps the best but they now have a major blot on their name in this arena.) This is not a knock on the current players just an admission that this is a relatively new field.

Being in the insurance field, it definitely seems there can be a win/win whereby an insurer takes a major financial review of any and all DCs and provides deposit insurance to prospective/current members. Assuming strong financials, the cost should be relatively minor and the benefit meaningful to all sides.

All the above said, having take the plunge, I still have some concerns about DC finances but done is done. I am now looking forward to the travels and not thinking about the deposit...

Kagehitokiri

some clubs are good about financial transparency, but its unfortunate that more are not.

Quintess Michael

Thanks Sandman...
Even with financial transparency it is hard to get across the financial stability.
Every possible doomsday scenario has another 2 or 3 moving parts to it. It really does make it harder to raise the comfort level, especially for someone who hasn't been surfing through this forum prior to starting their research.

Which club did you end up going with?

__________________
Michael Aumock
Director, Membership Development
Quintess, The Leading Residences of the World

3DH

Our biggest hurdle... getting "back on the horse" with another club (trusting them, wholely) after having a bad experience with a previous membership!

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"Boutique" is better! Another extremely satisfied LUSSO member!

LTTravel

Even "transparency" can be just smoke and mirrors. Look at MCI, Enron, etc.
Took the plunge with some information, hoping it is not like the $25 million offer I get from Nigeria every day in my email.

3DH

...you mean you haven't gotten your check, yet?

__________________
"Boutique" is better! Another extremely satisfied LUSSO member!

pwrshift

I have great difficulty coming to terms with giving money as a free loan to any DC for them to buy houses in which I can't have an equity position. I would also like to know how much each of the executives of the DC are making in salary, bonus, stock options, or whether there's any 'insider trading', and a dozen other things. Compared to public companies, DC transparency doesn't make the grade for me.

I wouldn't have concerns investing with a company like Marriott, Starwood, etc. when they enter the DC biz, but forking out half a mill to Steve Case won't be coming from me as that's what he probably takes home every week from member fees ... but we'll never know for sure ... other than you instantly lose 25% on it! Ted Turner probably regrets trusting Case so why should I? Sad thing is, unless the DC company is public you will know nothing until they go under. If you want to toss a few hundred grand at companies like Quintess then know the risk. I'd rather side with the SEC than believing the financial crap a DC turns out for prospects on a non disclosure basis.

A&K seems to be the first public company in the field. It's just a matter of time before the majors get into DC's ... just try to get your money back from private DC's then! These guys know how to move product -- Marriott already has over 3,000 buyers at just one new Rtiz complex in Hawaii - not a DC but it won't be long. Whatever you 'give' to a privately held DC, just make sure it's fun money that you won't miss when you eventually find out it's gone.

Kagehitokiri

>

TarheelTraveler

I'm not sure that I would call Enron transparent. Mind you this is from my watching an Enron movie, but I thought they would never fully disclose where the money was coming from (with the "Black Box," they could more or less print money, but couldn't divulge how this was so).

In any event {here is TT gettng on his soapbox), transparency is certainly better than the lack of transparency, audited financials by a big 4 firm are better than not having any, having a public company which is scrutinized by many shareholders and analysts is better than the opposite in most cases, having all the real estate owned by a separate entity owned by the members insulated from anything that might go on in the management entity is better than it being in one pot where you can't really tell what is going on, etc. The DC industry has come a long way in the last two years, but I expect we will continue to see more of the above improvements among most DCs as consumers demand it and as DCs become more mainstream. What's that saying - "a rising tide raises all ships"?

IMHO, the effect on a particular DC of the entry of a major (assuming they actually could get comfortable that there is enough of a profit margin) will vary dramatically from DC to DC, depending on obviously financial strength and how much growth the DC requires to keep going. I do think that if a major entered the market (assuming you don't consider A&K/Intrawest/Fortress to be a major), it would be through an acquisition rather than starting out from scratch and probably on the lower end like HCC. Cendant/LHW already tried the upper end and realized how difficult it was to compete against ER and others. While I agree with pwrshift on a lot of points, I don't believe in the doom and gloom that it would wipe out the more established players.

LTTravel

Big Four major audit firms
(Audit firms are listed, followed by select clients ensnarled by accounting scandals)

Deloitte & Touche: Adelphia, AES, Duke Energy, El Paso, Merrill Lynch, Reliant Energy, Rite Aid, Parmalat
Ernst & Young: AOL Time Warner, Dollar General, PNC Bank, Cendant, HealthSouth
KPMG: Citigroup, Computer Associates, ImClone, Lernout and Hauspie, New Century, Peregrine, Xerox, Siemens AG, Banco Nacional S.A. (Brazil), BMW Group
PricewaterhouseCoopers: Bristol Myers, HPL, JP Morgan Chase, Kmart, Lucent, MicroStrategy, Network Associates, NKFS, Tyco

TarheelTraveler

I'm definitely not saying that a Big 4 accounting firm's financials guarantee no problems. However, I am saying that it is better than not having audited financials at all or having financials from smaller firms. If nothing else, you've got deeper pockets to sue. The Big 4 have paid out some significant sums as a result of some of these accounting issues.

TarheelTraveler

In answer to Michael's question, like Sandman, I also had the hardest time with getting financial comfort (not that this would surprise anyone on the board). I was comfortable with and knew that we would have great vacations in amazing homes and would create incredible memories with my family and friends.

When I first looked into it, I thought this is an amazing idea and satisfies our needs perfectly at not much of an additional cost. But I could never get comfortable with the idea that I would get only 80% of my money back, not have any appreciation, and not have any ownership or asset protection. As a side note, I actually thought Dreamcatcher/Quintess had the best homes and answered most of my issues (particularly as compared to your main competitor). I would have definitely joined Quintess if you guys could have hit all of those issues. In lieu of ownership, if you had "deposit insurance" as Sandman suggests from a reputable carrier, you would have signed me up.

People obviously weigh factors differently when deciding on a DC and it's interesting to me to see how people make the decision. Great idea for a thread, Michael.

rwhaugan

Since I have not yet joined a club, I don't know that I am well suited to post on this thread, but the greatest difficulty for me is understanding all the nuances of the clubs prior to my decision. Unfortunately, even for most of the information which might seem basic (for example the fact that ER bases its member/property ratio on 60 day memberships rather than 30 day membership) it takes a fair amount of research. I have never previously researched timeshares so I am unfamiliar with the "system." It is therefore very difficult for me to really compare the clubs. Perhaps I simply need to research more.....

And while I view any $ I spend in a DC an "experience" rather than an "investment", I would be most unhappy to only experience 5 years or so before my club went broke, so I feel unsettled regarding the financial model of the clubs.

Combine the two together and you have decisional paralysis!

caribbeansun

The most difficult part of the analysis is that every club does things their own way and as a result you have a large number of variables that you need to somehow distill down into something understandable and comparable.

Refund deposit - entry, exit, capped exit, etc.
Cost of properties - $1, 2, 3, 4 Million
Annual dues - all over the map
History of club
Reviews of properties
Smoke and mirrors around future destinations
Advanced reservations
Holiday reservations
Service levels
Included vs. extra fees for services

I find it interesting that something that is designed to be hassle free is so full of variables. The analytical side of me says I should go through each variable, assign it a weighting and then determine a decision matrix.

I'm not sure it will be possible to feel comfortable with an ultimate decision - it's more like jump and hope it stays together...

NeilGoBlue

Exactly!

Quintess Michael

Wow! You guys make some great points.

I really want this thread to NOT be a sales pitch from me or from Quintess, but rather a thread that addresses the hurdles that EVERYONE faces when they are looking at DCs.

I think it will help prospective members who look at this thread feel more comfortable with the fact that other have had, and overcome the same fears that they have.
If Quintess gets a member or two from it, great. But if the industry as a whole becomes more adept at raising the comfort level of every prospective member, then it will be good for the whole industry... prospects, AND existing members. "The rising tide raises all ships".

__________________
Michael Aumock
Director, Membership Development
Quintess, The Leading Residences of the World