Ritz Carlton DC and other Halogen predictions

TarheelTraveler · 07-23-2008, 05:37 PM

Halogen Guides | Halogen Guides Predicts Six Big Stories That Will Have The Destination Club Industry Buzzing

Interesting prediction on Ritz-Carlton. Anyone have thoughts on that? Do you think their properties are generally comparable to higher-end DC properties? Is their name big enough to win people over despite a fairly limited portfolio of destinations?

It is also interesting that they've got a comparison to non-equity DCs on their website:
The Ritz-Carlton Club® - Types of Ownership

I don't know that I agree with all of the characterizations. Shouldn't family legacy say "varies" instead of "no" and isn't one of the main points of DCs "worry-free maintenance?" Last I checked, I don't think any of the DCs expect the members to maintain the properties.

Kagehitokiri · 07-23-2008, 07:19 PM

funny they didnt mention lusso is the only club besides Q to state they have considered having multiple clubs. only clubs with caps like those 2 would really have that choice.

RC is probably most likely out of aman/FS/MO, and a few other luxury chains. but i really dont know how likely it is. starting one would make their DC sales (especially bulk) a mistake, and im not sure their residential portfolio is ready yet. for example, their only villas are in florida, arizona, virginia, plus mexico & caribbean. (only 3 current and 7 upcoming)

OTOH if they went in a new direction. >

Quote:

Originally Posted by Kagehitokiri

something focusing solely on metropolitan FS/RC/MO/etc condos (regardless of size - so studio/1BR +) would be interesting. not sure how many are possible for DCs though. something along those lines might get more interest from travelers like those in the luxury hotels forum on flyertalk. also, perhaps a "portfolio value" metric would be better for such a club than the "average value" metric. as pwrshift mentioned elsewhere, this might be marketable to business travelers as well, depending on reservation system etc.

IMHO, it seems likely ER has some sort of long-term contract with RC. if thats the case, maybe ER wanted a non-compete clause. that could be another reason to consider the new direction, as it would not really compete with ER.

edit - not sure if i mentioned it elsewhere or not.. speaking of aman (amanresorts) apparently they dropped their planned partnership with setai club. whether setai club is expanded beyond setai miami remains to be seen. AFAIK there are only 2 setai properties in some stage of development - norman's cay (bahamas) and jose ignacio.

Jack · 07-24-2008, 11:41 AM

seems like a PRC then a DC

DC4MS · 07-24-2008, 09:28 PM

I have also heard this "rumor" from the CEO of UE, but the name Ritz was not used.

Perhaps there is some truth to these two "primary source" statements about the Ritz. I personally would love to see them enter the DC industry as it would bring huge respect to the industry and competition is generally a good thing.

The fractional business is not doing so well and clubs like the Ritz are suffering incredibly LOW member satisfaction in terms of their usage and trade ability. I also think they could easily get a few thousand members within the first few months just off name recognition.

Even if they just start with their current unsold fractional properties and then add other locations and reserva a floor or two (like the Disney Animal Kingdom did for DVC) they could offer a huge range of properties very quickly.

I know that many people that are afraid of pulling the trigger on joining a DC, would seriously consider joining a Ritz Carlton Destination Club.

Kagehitokiri · 07-24-2008, 10:09 PM

Quote:

Originally Posted by DC4MS

I have also heard this "rumor" from the CEO of UE, but the name Ritz was not used.

>

Quote:

Originally Posted by DC4MS

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.

TarheelTraveler · 07-24-2008, 11:49 PM

I personally think it would be good for the industry as a whole for Ritz-Carlton to get into the DC market. The biggest hurdle out there in my view is the low awareness and even lower understanding of destination clubs. The second biggest hurdle IMHO is concern about financial stability. Overcoming those two hurdles with brand name and/or size could really make DCs mainstream.

Companies like Ritz-Carlton and A&K have huge marketing resources and customer bases that can be tapped into. ER, the DC industry giant, and hopefully now UE have got the members to have the marketing budgets and member referral base to be successful. Quintess is working on a very nice portfolio and member base. HCC is focusing on a huge entry-level market (and would be a great buy for a higher-end timeshare operator to get into the DC market). Many of the other DCs such as Lusso and DHH have their niche and could do well if they're not dependent on rapid member growth. However, I am skeptical that any of the new non-brand name DCs can make it in this enviroment against the established or the new brand name DCs. The barriers to entry have changed dramatically in just the last two years, since I started looking at DCs. You can no longer put a porfolio of 5 to 10 houses together and look to sell many memberships, particularly if you're not able to sustain big losses on those early sales.

ChicagoMark · 07-26-2008, 08:59 AM

The only fractionals/timeshares that I ever considered seriously were Four Seasons Aviara & Ritz Carlton St Thomas in the secondary market as there are so many units for sale at both by owners at substantial discounts to the prices that FS/RC is still selling them.

At the end of the day the rules, regulations, booking complexity, poor liquidity, and very substantial maintenance fees made it a non-starter. The availability to rent from stuck owners at both of those properties is so high and really economical-why buy when you can rent so cheaply? Spring break this year we stayed at Aviara in a big unit (2BR/3bath) for the week for $3000 taxes included.

Could a Ritz Carlton DC work-sure! The caveat is that the economics that they require on a property by property, and room by room basis would create a really, really fully priced offering that might not be competitive on any kind of a financial basis. Any Aviara or Ritz St Thomas owners want to comment on the historical trend of HOA fees? My guess is double digit increases every year.

Kagehitokiri · 08-04-2008, 08:44 PM

Halogen Guides | The Halogen Guides Take: Is Ritz Carlton Testing The Destination Club Waters?

as TarheelTraveler mentioned in OP

>

Quote:

Originally Posted by Amy Gunderson

The Ritz compares (see screenshot from their website below) its fractional product to what it calls a “non-equity destination club” on several factors...

DC4MS · 08-04-2008, 09:07 PM

It is hard to tell if Halogen Guides knows anything specific about a Ritz-Carlton Destination Club or they are purely speculating like the Donald Trump Destination Club speculation a while ago.

I personally think it would be a fantastic idea if the Ritz (or Donald Trump) entered the DC market.

ER Traveler · 08-05-2008, 12:56 PM

I'm sort of doubting that they'll make the jump unless they focus on the full-ownership developments that would be more competitive with the other luxury DC's. I think it's easier for them to just sell some blocks of homes to DC's rather than build a club from scratch. It also seems there's going to be some fallout or more mergers on the horizon and they might wait until the next phase in the evolution of the industry.

Kagehitokiri · 08-13-2008, 09:48 PM

Halogen Guides | Ritz Carlton Adds Fractionals In The Bahamas

very interesting...

step #1 - DC comparison on the RC fractional site
step #2 - RC abaco fractionals have point system

point pricing >
500 - $110K
1000 ~$220K?
1500 ~$330K?

points per week in summer >
98 - 1BR cabana
252 - 4BR fairway
252 - 2BR cliff
301 - 3BR cliff
336 - 3BR beach

16 units total

Kagehitokiri · 08-27-2008, 04:15 AM

older halogen article >
Halogen Guides | Helium Report Analysis: How Ritz Carlton Can Get Into Destination Clubs

i see halogen has nielsen doing surveys as well.

pwrshift · 08-28-2008, 10:08 PM

DC's get your orders in. Ritz Carlton Montreal news:

Ritz-Carlton Montreal | Luxury hotel in Montreal

Kagehitokiri · 09-05-2008, 12:39 AM

Ritz-Carlton Club Expands to The Bahamas - SherpaReport

Quote:

...If the points based model is expanded to other locations and the points becomes interchangeable between locations, then Ritz-Carlton will essentially have created its own destination club...

...several folks over on destinationclubforums.com have recently been discussing the high level of supplementary charges and the daily resort fee at the Abaco Club...

:thumbsup:

TarheelTraveler · 09-05-2008, 09:11 AM

Good luck to any buyers trying to trade out of the Abaco Club to another RC location.

Maybe if the points system is applied to other locations you'll have a better chance of trading into something else, but then again, you'll probably have to use a lot of points to trade into the more attractive locations.

You hear so many complaints about trying to trade out of a fractional property into another one, regardless of whether it is RC or FS, for example. That's definitely one of the achilles heels of fractionals and another reason why I ultimately chose a DC membership over a fractional. It's one thing to offer and tout your exchange program, but the devil as always is in the details. If you buy a fractional, you better love the location you bought into to. Even then, I've seen friends that had an incredible vacation experience, bought in that location, never thought they'd grow tired of the place and put it up for sale 5 years later.

vineyarder · 09-05-2008, 10:24 AM

Quote:

Originally Posted by TarheelTraveler

You hear so many complaints about trying to trade out of a fractional property into another one, regardless of whether it is RC or FS, for example. That's definitely one of the achilles heels of fractionals and another reason why I ultimately chose a DC membership over a

07-24-2008, 11:41 AM	#3
Jack Member Join Date: Mar 2008 Posts: 54 Club: Strip	re: Ritz Carlton DC and other Halogen predictions seems like a PRC then a DC

07-24-2008, 09:28 PM	#4
DC4MS Administrator Join Date: Oct 2007 Location: USA Posts: 1,698 Club: DC4MS.com	Re: Ritz Carlton DC and other Halogen predictions I have also heard this "rumor" from the CEO of UE, but the name Ritz was not used. Perhaps there is some truth to these two "primary source" statements about the Ritz. I personally would love to see them enter the DC industry as it would bring huge respect to the industry and competition is generally a good thing. The fractional business is not doing so well and clubs like the Ritz are suffering incredibly LOW member satisfaction in terms of their usage and trade ability. I also think they could easily get a few thousand members within the first few months just off name recognition. Even if they just start with their current unsold fractional properties and then add other locations and reserva a floor or two (like the Disney Animal Kingdom did for DVC) they could offer a huge range of properties very quickly. I know that many people that are afraid of pulling the trigger on joining a DC, would seriously consider joining a Ritz Carlton Destination Club.

07-24-2008, 11:49 PM	#6
TarheelTraveler Senior Member Join Date: Nov 2007 Posts: 508 Club: A&K Residence Club	Re: Ritz Carlton DC and other Halogen predictions I personally think it would be good for the industry as a whole for Ritz-Carlton to get into the DC market. The biggest hurdle out there in my view is the low awareness and even lower understanding of destination clubs. The second biggest hurdle IMHO is concern about financial stability. Overcoming those two hurdles with brand name and/or size could really make DCs mainstream. Companies like Ritz-Carlton and A&K have huge marketing resources and customer bases that can be tapped into. ER, the DC industry giant, and hopefully now UE have got the members to have the marketing budgets and member referral base to be successful. Quintess is working on a very nice portfolio and member base. HCC is focusing on a huge entry-level market (and would be a great buy for a higher-end timeshare operator to get into the DC market). Many of the other DCs such as Lusso and DHH have their niche and could do well if they're not dependent on rapid member growth. However, I am skeptical that any of the new non-brand name DCs can make it in this enviroment against the established or the new brand name DCs. The barriers to entry have changed dramatically in just the last two years, since I started looking at DCs. You can no longer put a porfolio of 5 to 10 houses together and look to sell many memberships, particularly if you're not able to sustain big losses on those early sales.

07-26-2008, 08:59 AM	#7
ChicagoMark Member Join Date: Jan 2008 Location: Chicago, IL Posts: 35 Club: Ultimate Escapes-Elite	Re: Ritz Carlton DC and other Halogen predictions The only fractionals/timeshares that I ever considered seriously were Four Seasons Aviara & Ritz Carlton St Thomas in the secondary market as there are so many units for sale at both by owners at substantial discounts to the prices that FS/RC is still selling them. At the end of the day the rules, regulations, booking complexity, poor liquidity, and very substantial maintenance fees made it a non-starter. The availability to rent from stuck owners at both of those properties is so high and really economical-why buy when you can rent so cheaply? Spring break this year we stayed at Aviara in a big unit (2BR/3bath) for the week for $3000 taxes included. Could a Ritz Carlton DC work-sure! The caveat is that the economics that they require on a property by property, and room by room basis would create a really, really fully priced offering that might not be competitive on any kind of a financial basis. Any Aviara or Ritz St Thomas owners want to comment on the historical trend of HOA fees? My guess is double digit increases every year.

08-04-2008, 09:07 PM	#9
DC4MS Administrator Join Date: Oct 2007 Location: USA Posts: 1,698 Club: DC4MS.com	Re: Ritz Carlton DC and other Halogen predictions It is hard to tell if Halogen Guides knows anything specific about a Ritz-Carlton Destination Club or they are purely speculating like the Donald Trump Destination Club speculation a while ago. I personally think it would be a fantastic idea if the Ritz (or Donald Trump) entered the DC market.

07-23-2008, 05:37 PM	#1
TarheelTraveler Senior Member Join Date: Nov 2007 Posts: 508 Club: A&K Residence Club	Ritz Carlton DC and other Halogen predictions Halogen Guides \| Halogen Guides Predicts Six Big Stories That Will Have The Destination Club Industry Buzzing Interesting prediction on Ritz-Carlton. Anyone have thoughts on that? Do you think their properties are generally comparable to higher-end DC properties? Is their name big enough to win people over despite a fairly limited portfolio of destinations? It is also interesting that they've got a comparison to non-equity DCs on their website: The Ritz-Carlton Club® - Types of Ownership I don't know that I agree with all of the characterizations. Shouldn't family legacy say "varies" instead of "no" and isn't one of the main points of DCs "worry-free maintenance?" Last I checked, I don't think any of the DCs expect the members to maintain the properties.

08-05-2008, 12:56 PM	#10
ER Traveler Senior Member Join Date: Dec 2007 Posts: 114 Club: Exclusive Resorts	Re: Ritz Carlton DC and other Halogen predictions I'm sort of doubting that they'll make the jump unless they focus on the full-ownership developments that would be more competitive with the other luxury DC's. I think it's easier for them to just sell some blocks of homes to DC's rather than build a club from scratch. It also seems there's going to be some fallout or more mergers on the horizon and they might wait until the next phase in the evolution of the industry.

08-13-2008, 09:48 PM	#11
Kagehitokiri Super Moderator Join Date: Nov 2007 Posts: 1,620	Re: Ritz Carlton DC and other Halogen predictions Halogen Guides \| Ritz Carlton Adds Fractionals In The Bahamas very interesting... step #1 - DC comparison on the RC fractional site step #2 - RC abaco fractionals have point system point pricing > 500 - $110K 1000 ~$220K? 1500 ~$330K? points per week in summer > 98 - 1BR cabana 252 - 4BR fairway 252 - 2BR cliff 301 - 3BR cliff 336 - 3BR beach 16 units total Last edited by Kagehitokiri; 10-31-2008 at 08:27 PM.

08-27-2008, 04:15 AM	#12
Kagehitokiri Super Moderator Join Date: Nov 2007 Posts: 1,620	Re: Ritz Carlton DC and other Halogen predictions older halogen article > Halogen Guides \| Helium Report Analysis: How Ritz Carlton Can Get Into Destination Clubs i see halogen has nielsen doing surveys as well.

08-28-2008, 10:08 PM	#13
pwrshift Senior Member Join Date: Nov 2007 Posts: 344	Re: A Ritz Carlton DC in Montreal? DC's get your orders in. Ritz Carlton Montreal news: Ritz-Carlton Montreal \| Luxury hotel in Montreal

09-05-2008, 09:11 AM	#15
TarheelTraveler Senior Member Join Date: Nov 2007 Posts: 508 Club: A&K Residence Club	Re: Ritz Carlton DC and other Halogen predictions Good luck to any buyers trying to trade out of the Abaco Club to another RC location. Maybe if the points system is applied to other locations you'll have a better chance of trading into something else, but then again, you'll probably have to use a lot of points to trade into the more attractive locations. You hear so many complaints about trying to trade out of a fractional property into another one, regardless of whether it is RC or FS, for example. That's definitely one of the achilles heels of fractionals and another reason why I ultimately chose a DC membership over a fractional. It's one thing to offer and tout your exchange program, but the devil as always is in the details. If you buy a fractional, you better love the location you bought into to. Even then, I've seen friends that had an incredible vacation experience, bought in that location, never thought they'd grow tired of the place and put it up for sale 5 years later.