Bring on the Chateaus & Van Goghs!
We're giving two parties, sent the invitations, got the table set, but will anyone come? Isn't that the pervasive question?
To use the same metaphor we're also planning a couple of parties with high hopes that, when the guest lists go out, that we'll have a great response. Today, most developers would rather be in this group vs. the former one.
The wealth effect, or more accurately the negative wealth effect, is controlling sales these days. A lot of our customers have the money to spend to buy a fractional interest, but they 'feel' as though they don't, so they aren't. It's as straight forward as that.
We may even be living the negative wealth effect ourselves. Gave up our storage locker the other day…why spend $2400 per year for it? Just toss all that stuff away, or more appropriately give it away.
I saw on Fox News the other day that $300,000 invested in the S&P500 a year ago would now be worth $160,000. Take any variation on that number and our customers know that. So, go from a portfolio of $7 million to $3.8 million - that's still a cut worth thinking twice about.
The fraction is a personal use purchase. Each of the 'buying unit' needs to sign off on that use. In these times one of the buying couple is sure to be more 'tucked in' than the other, and there goes the sale!
So, on the Spectrum Clusters I say bring on the 'CEO with a Lexus to Go' and the 'Chateaus & Van Goghs'. These are the folks to whom we have the best chance to sell this winter.
You remember the Xerox sales training program….the selling for benefits and not features? Now's the time for that for one buys what benefits them most. The adjustment in the sales pitch today will be vital to snag those sales than can be snagged!
I hope Santa's coming to your project!
Tuesday, December 02, 2008
Sunday, November 02, 2008
November Blog
Greetings all you practitioners of fractional interests! Keeping the faith?
Just back from ULI and the Recreational Development Council meeting. The best reports were that sales were 50% of projected sales reduced as they year went on, but the great majority of projects just had one sale here and one there over the summer all as hard as heck to get closed.
Lots of prospects coming up to the bar but backing off - similar to our experiences at SRG.
Some comments:
*The major banks are firmly being controlled by their credit departments, so no new loans are going out unless its to a 'platinum-plated' repeat customer.
•A major SE resort doing a St. Kitts project now going hard on deposits: 135 reservations >> 30 conversions.
•A comment from a multi resort developer - on one hand no use spending marketing dollars, but can't go invisible, so still putting some money in their markets.
•Tales of lender defaulting on construction loans.
•Tales of no buyer loan money and no hypothecation loans.
•Naturally a great time to planning a project and a louse time to be in sales.
•Marginal hopes of winter 09 and not much better for summer 09. Will we be surprised?
•All eyes on 2010
•From Paul Volker: the capital markets won't come fully back until the trust and confidence is restored between banks worldwide. As that trust has been smashed he feels it will take two or more years to fully come back.
On the more positive side of things: another report from a research company on wealth as of September 23rd. Conclusions? The top 10% of wealth is not buying anything let along resort real estate. Maybe some interest in bottom feeding for investment real estate.
•Last year these wealthy segments were in a psychological recession. Now, they acknowledge that it's a real recession.
•They plan to cut their spending by an average of -6%
•Only family-oriented spending will hold up.
•If the past years were 'I want it'
•Then the most recent period was 'I need it'
•Now it's 'We need it' -- reflecting that family hunker down approach.
•This opens up avenues for sales to focus on 'what's real' for family use which goes to service, usable amenities and robust activities.
And, hey, these folk are still optimistic on America…they believe 09 will be a better year for them than 08 and also for America.
Greetings all you practitioners of fractional interests! Keeping the faith?
Just back from ULI and the Recreational Development Council meeting. The best reports were that sales were 50% of projected sales reduced as they year went on, but the great majority of projects just had one sale here and one there over the summer all as hard as heck to get closed.
Lots of prospects coming up to the bar but backing off - similar to our experiences at SRG.
Some comments:
*The major banks are firmly being controlled by their credit departments, so no new loans are going out unless its to a 'platinum-plated' repeat customer.
•A major SE resort doing a St. Kitts project now going hard on deposits: 135 reservations >> 30 conversions.
•A comment from a multi resort developer - on one hand no use spending marketing dollars, but can't go invisible, so still putting some money in their markets.
•Tales of lender defaulting on construction loans.
•Tales of no buyer loan money and no hypothecation loans.
•Naturally a great time to planning a project and a louse time to be in sales.
•Marginal hopes of winter 09 and not much better for summer 09. Will we be surprised?
•All eyes on 2010
•From Paul Volker: the capital markets won't come fully back until the trust and confidence is restored between banks worldwide. As that trust has been smashed he feels it will take two or more years to fully come back.
On the more positive side of things: another report from a research company on wealth as of September 23rd. Conclusions? The top 10% of wealth is not buying anything let along resort real estate. Maybe some interest in bottom feeding for investment real estate.
•Last year these wealthy segments were in a psychological recession. Now, they acknowledge that it's a real recession.
•They plan to cut their spending by an average of -6%
•Only family-oriented spending will hold up.
•If the past years were 'I want it'
•Then the most recent period was 'I need it'
•Now it's 'We need it' -- reflecting that family hunker down approach.
•This opens up avenues for sales to focus on 'what's real' for family use which goes to service, usable amenities and robust activities.
And, hey, these folk are still optimistic on America…they believe 09 will be a better year for them than 08 and also for America.
Wednesday, September 24, 2008
I hoped 09 might be better for sales than 08. I get the feeling of, "not so fast" thanks to the last month on Wall Street. Was September a good sales month for anyone out there?
I'm holding my breath 'till after the election. One of the great parts of the Harrison Group's presentation to the ULI Recreation Development Councils a year ago was the focus on discretionary income of a family as the driver for the purchase of resort real estate vs. household income.
So, I assume that if Obama is elected that two of the key drivers for discretionary income, dividends and capital gains, will have their tax rates increased from the current 15%. Not good for our sales.
However, I used to assume that if McCain were elected that these rates would be kept at present levels. I'm not so sure now. He may be forced to increase them due to all the current economic dynamics he'll have to live with. Not good for our sales.
This does not take into account the marginal rates being increased for all those 'rich' people, via Obama, making over $200k, which is a gross number. Forget the discretionary part that's left. Not good for our sales
2010 here we come - I hope. Does all this put a spotlight on fractional sales? I think so.
Did you know that on Vegas' South Strip there's a hotel with 1200 horse stalls underneath? Don't volunteer for the maintenance crew!
I'm holding my breath 'till after the election. One of the great parts of the Harrison Group's presentation to the ULI Recreation Development Councils a year ago was the focus on discretionary income of a family as the driver for the purchase of resort real estate vs. household income.
So, I assume that if Obama is elected that two of the key drivers for discretionary income, dividends and capital gains, will have their tax rates increased from the current 15%. Not good for our sales.
However, I used to assume that if McCain were elected that these rates would be kept at present levels. I'm not so sure now. He may be forced to increase them due to all the current economic dynamics he'll have to live with. Not good for our sales.
This does not take into account the marginal rates being increased for all those 'rich' people, via Obama, making over $200k, which is a gross number. Forget the discretionary part that's left. Not good for our sales
2010 here we come - I hope. Does all this put a spotlight on fractional sales? I think so.
Did you know that on Vegas' South Strip there's a hotel with 1200 horse stalls underneath? Don't volunteer for the maintenance crew!
Tuesday, August 26, 2008
Aug Blog
Dog days of summer…what's going on around the business?
We wanted to schedule a sales manager round-table, for a day, to get ten or twelve pros together and see what's working or not. We all have a program or two that works regardless of outside conditions. Couldn't put it together as there were too many personal conflicts.
On one hand one might say, "What's more important than selling or keeping your job?" On the other hand, these were pros and they know what they know and as we all know personal time is to be kept away from business.
Hart Rist of North Carolina was venturing with us, and I want to thank him for his energy and efforts to make the Eastern half of the round-table go.
Those developers who have breathing room have gone on 'hold' and are planning to come out strong, when the buyers return. Other developers, who don't have much space left, are doing their best. We do know that in fractions lowering the price does not make much of a difference. The 'bail out' guys seem to have come and gone.
At Meriwether the summer sales are beginning to drop. It's been very taxing to get buying decisions made. All the buying signals are there. And, as reported earlier most all the buyers want financing to leverage their purchase, and there's very, very little of it out there. We gone to the old favorite of local bank financing for a handful of deals.
View-up here…Rick Abelson, one of our Meriwether sales pros, did his own video to show clients. Now, this is really using technology in a smart way.
www.video.google.com and then type in Meriwether Ranch. The video, parts 1 and 2 were shot in one day, and, no, the wildlife were not paid to show…they were just there as they always are.
NextStar is in the market, but their underwriting procedure has us baffled. Textron is in the market, they are pros, but do not lend direct, which in this environment may have to be okay. Tom Ward is doing a good job in moving them into more of the main stream for fractions vs. timeshare where they have resided for decades.
Vallarta Gardens is coming together for a strong winter opening. We expect there to be a market, but we'll need to wait and see. The same for Tierra del Sol in Aruba. Pam Temples is applying her talents to the project's interiors.
Sales are going down at the Cape Codder Residence Club in Hyannis, though a bit slower than planned, but at least sales are being made.
We continue to have good experiences transitioning selected timeshare sales pros into fractions. They need mentoring at the outset to change the mind-set, but once they get it they really go to town especially in this environment as they do know how to close in a more direct line. That's a delicate balance, but the good ones we have use their past experiences to their benefit.
June and July were just dead for us in terms of new deals coming our way. August has been very busy so far, and maybe that's an indication - or not.
ULI is two months off and I'm looking forward even now to hear how the
Recreational Development crowd did over the summer.
Dog days of summer…what's going on around the business?
We wanted to schedule a sales manager round-table, for a day, to get ten or twelve pros together and see what's working or not. We all have a program or two that works regardless of outside conditions. Couldn't put it together as there were too many personal conflicts.
On one hand one might say, "What's more important than selling or keeping your job?" On the other hand, these were pros and they know what they know and as we all know personal time is to be kept away from business.
Hart Rist of North Carolina was venturing with us, and I want to thank him for his energy and efforts to make the Eastern half of the round-table go.
Those developers who have breathing room have gone on 'hold' and are planning to come out strong, when the buyers return. Other developers, who don't have much space left, are doing their best. We do know that in fractions lowering the price does not make much of a difference. The 'bail out' guys seem to have come and gone.
At Meriwether the summer sales are beginning to drop. It's been very taxing to get buying decisions made. All the buying signals are there. And, as reported earlier most all the buyers want financing to leverage their purchase, and there's very, very little of it out there. We gone to the old favorite of local bank financing for a handful of deals.
View-up here…Rick Abelson, one of our Meriwether sales pros, did his own video to show clients. Now, this is really using technology in a smart way.
www.video.google.com and then type in Meriwether Ranch. The video, parts 1 and 2 were shot in one day, and, no, the wildlife were not paid to show…they were just there as they always are.
NextStar is in the market, but their underwriting procedure has us baffled. Textron is in the market, they are pros, but do not lend direct, which in this environment may have to be okay. Tom Ward is doing a good job in moving them into more of the main stream for fractions vs. timeshare where they have resided for decades.
Vallarta Gardens is coming together for a strong winter opening. We expect there to be a market, but we'll need to wait and see. The same for Tierra del Sol in Aruba. Pam Temples is applying her talents to the project's interiors.
Sales are going down at the Cape Codder Residence Club in Hyannis, though a bit slower than planned, but at least sales are being made.
We continue to have good experiences transitioning selected timeshare sales pros into fractions. They need mentoring at the outset to change the mind-set, but once they get it they really go to town especially in this environment as they do know how to close in a more direct line. That's a delicate balance, but the good ones we have use their past experiences to their benefit.
June and July were just dead for us in terms of new deals coming our way. August has been very busy so far, and maybe that's an indication - or not.
ULI is two months off and I'm looking forward even now to hear how the
Recreational Development crowd did over the summer.
Wednesday, July 09, 2008
Professionals and practitioners of resort development….what’s selling?
I’ve been through the gas lines of 1973-4, the Carter recession with 21% interest on my San Francisco Suites loan [youth never sees a down side] the Clinton generated ‘we’re in the biggest recession since the 30s' minor dip of early 90s, the dot-bomb and now today. One thing for sure - the media has it down pat – doom and gloom.
Hiking in England last week, looking at BBC news for a 9-day period I never heard one positive economic statement. It was a lot of, “Current inflation is 3.2% but it could go to 12%! That kind of junk.
Back to the first statement. Are we selling? Yes, but slowly. This rundown will not be news to any readers. At Laguna Beach we are very close to the major market [SoCal] but getting them to put up a buck is tough. At Meriwether [see more below] if we can get ‘em there we can sell them, but being a national market getting them off the dime and getting them there has been very difficult.
In Vallarta, off-season, those who come to see us; we have a good closing percentage. Maybe that’s key indicator…if you’re in a resort counter-season you’re a good prospect.
At Cape Cod they are just coming into high, high time and have high hopes with Boston so close. First sale is down! More next month on their sales. In Aruba we plan to target the high-end buyer, who has already made a decision for the Island as Aruba has the highest repeat visitor percentage in the Caribbean.
Meriwether? Okay, if you know the outdoors you know Chris Dorsey of Orion Multimedia. He stars in 30 Beretta Outdoors episodes yearly and he produces another 150 half-hour segments of hunting and fishing adventure TV shows. Special episodes for the Ultimate Lodge will include: the Ultimate Gun Library & Trophy Room," a "Liar's Bar (aka: Fisherman's Watering Hole," "Master Mud Room & Labrador Lounge," "Eat-Like-a-Wild-Man Kitchen;" and many other custom house elements designed for the series.
Each segment will include features staring Jeff Foxworthy, America's favorite and funniest outdoorsman and will showcase amazing design elements from several outdoor lodges from around the nation. The network's 65 million viewers across America will be treated to DIY's newest phenomenon, "The Ultimate Sportsman's Lodge" series!
Great PR, huh?
We are really having to scrabble for buyer-fractional end loans….in the past with 90% of the buyers paying cash we paid only nominal attention to the sourcing of these loans. Now it seem almost all buyers inquire about financing and many are serious about it. The market has shrunken a lot, so it's tough sledding.
More next month…
I’ve been through the gas lines of 1973-4, the Carter recession with 21% interest on my San Francisco Suites loan [youth never sees a down side] the Clinton generated ‘we’re in the biggest recession since the 30s' minor dip of early 90s, the dot-bomb and now today. One thing for sure - the media has it down pat – doom and gloom.
Hiking in England last week, looking at BBC news for a 9-day period I never heard one positive economic statement. It was a lot of, “Current inflation is 3.2% but it could go to 12%! That kind of junk.
Back to the first statement. Are we selling? Yes, but slowly. This rundown will not be news to any readers. At Laguna Beach we are very close to the major market [SoCal] but getting them to put up a buck is tough. At Meriwether [see more below] if we can get ‘em there we can sell them, but being a national market getting them off the dime and getting them there has been very difficult.
In Vallarta, off-season, those who come to see us; we have a good closing percentage. Maybe that’s key indicator…if you’re in a resort counter-season you’re a good prospect.
At Cape Cod they are just coming into high, high time and have high hopes with Boston so close. First sale is down! More next month on their sales. In Aruba we plan to target the high-end buyer, who has already made a decision for the Island as Aruba has the highest repeat visitor percentage in the Caribbean.
Meriwether? Okay, if you know the outdoors you know Chris Dorsey of Orion Multimedia. He stars in 30 Beretta Outdoors episodes yearly and he produces another 150 half-hour segments of hunting and fishing adventure TV shows. Special episodes for the Ultimate Lodge will include: the Ultimate Gun Library & Trophy Room," a "Liar's Bar (aka: Fisherman's Watering Hole," "Master Mud Room & Labrador Lounge," "Eat-Like-a-Wild-Man Kitchen;" and many other custom house elements designed for the series.
Each segment will include features staring Jeff Foxworthy, America's favorite and funniest outdoorsman and will showcase amazing design elements from several outdoor lodges from around the nation. The network's 65 million viewers across America will be treated to DIY's newest phenomenon, "The Ultimate Sportsman's Lodge" series!
Great PR, huh?
We are really having to scrabble for buyer-fractional end loans….in the past with 90% of the buyers paying cash we paid only nominal attention to the sourcing of these loans. Now it seem almost all buyers inquire about financing and many are serious about it. The market has shrunken a lot, so it's tough sledding.
More next month…
Wednesday, June 04, 2008
June 2008
This month it’s Aruba, Laguna Beach, and Puerto Vallarta – Star having all the fun it can stand.
We are working with the wonderful Tierra del Sol project on Aruba - the Caribbean Island with the largest percentage of repeat visitors. http://www.Tierra delSol.com Aruba’s only planned development and only 18 hole golf course – Robert Trent Jones II – is launching a fractional project to go along with their extensive development comprised of homes, villas and condominiums plus spa, fine dining, etc.
Mac MacEwan, Ash Offermann and I were there over the past week to launch Star’s marketing and sales program with the Dutch owned luxury resort project. Tough assignment with the sapphire Caribbean calling….
Marriott Vacation Ownership ‘owns’ the timeshare action on the Island. If there ever was a juggernaut of VO development this is it. Three huge buildings; two sold out and the third within a year of sell out. Walking through the lobbies, pools and beaches they are all awash with blissfully pleased Marriott owners. Divi’s OPC are on the street, annoying, but nowhere as bad as in Mexico or Spain.
Is Aruba a long way from SRG’s headquarters in Scottsdale? You bet, but worth the trip!
Our project in Laguna Beach, Sunset Cove, began SoCal Wall Street Journal adverts this week after working with the extensive past renter guest list. Dede Bacon, down from her Tahoe base, has been heading up sales. http://www.sunsetcovelaguna.com Due to local ordinances we have what might appear as a kind of convoluted ownership structure, but just another innovation for us. Sixths and twelfths are being sold right on the beach, I mean right on the beach…sand between the toes!
Down Mexico way our Puerto Vallarta project, Vallarta Gardens, is selling away all the while trying to keep out of the way of the seemingly ever changing registration requirements of the state in which we’re located. Another groundbreaking set of use plans for the two unit types; the Corals and the Sea Stars.
Both tenths but with a combination of fixed, float and rotating to meet US and Mexican National demands. Nothing like it before, but then that’s us. By the way…dealing with the Registry Collection/Mexico is like being in another galaxy far away!
We count our blessings – 75% of our Kirkwood sales team is still with us, but at different deals: Dede Bacon at Laguna Beach, Linnea Stanhope at Meriwether and Melissa Maxey still living in the Carson Valley but heading up telemarketing for Meriwether. First class performers all!
This month it’s Aruba, Laguna Beach, and Puerto Vallarta – Star having all the fun it can stand.
We are working with the wonderful Tierra del Sol project on Aruba - the Caribbean Island with the largest percentage of repeat visitors. http://www.Tierra delSol.com Aruba’s only planned development and only 18 hole golf course – Robert Trent Jones II – is launching a fractional project to go along with their extensive development comprised of homes, villas and condominiums plus spa, fine dining, etc.
Mac MacEwan, Ash Offermann and I were there over the past week to launch Star’s marketing and sales program with the Dutch owned luxury resort project. Tough assignment with the sapphire Caribbean calling….
Marriott Vacation Ownership ‘owns’ the timeshare action on the Island. If there ever was a juggernaut of VO development this is it. Three huge buildings; two sold out and the third within a year of sell out. Walking through the lobbies, pools and beaches they are all awash with blissfully pleased Marriott owners. Divi’s OPC are on the street, annoying, but nowhere as bad as in Mexico or Spain.
Is Aruba a long way from SRG’s headquarters in Scottsdale? You bet, but worth the trip!
Our project in Laguna Beach, Sunset Cove, began SoCal Wall Street Journal adverts this week after working with the extensive past renter guest list. Dede Bacon, down from her Tahoe base, has been heading up sales. http://www.sunsetcovelaguna.com Due to local ordinances we have what might appear as a kind of convoluted ownership structure, but just another innovation for us. Sixths and twelfths are being sold right on the beach, I mean right on the beach…sand between the toes!
Down Mexico way our Puerto Vallarta project, Vallarta Gardens, is selling away all the while trying to keep out of the way of the seemingly ever changing registration requirements of the state in which we’re located. Another groundbreaking set of use plans for the two unit types; the Corals and the Sea Stars.
Both tenths but with a combination of fixed, float and rotating to meet US and Mexican National demands. Nothing like it before, but then that’s us. By the way…dealing with the Registry Collection/Mexico is like being in another galaxy far away!
We count our blessings – 75% of our Kirkwood sales team is still with us, but at different deals: Dede Bacon at Laguna Beach, Linnea Stanhope at Meriwether and Melissa Maxey still living in the Carson Valley but heading up telemarketing for Meriwether. First class performers all!
Sunday, May 11, 2008
May 11, 2008
Just back from the Urban Land Institute’s spring meeting in Charleston SC. Our group, a sub part of the over 30,000 ULI members, is the Recreational Development Council comprised of about 220 members. Rarefied Atmosphere. I was there with Rich Feldheim and Ash Offermann.
Not a lot working for most developers, so the creative juices were flowing on how to get around the ‘emotional recession’ so named by Jim Taylor of the Harrison Group. As the country is not in a recession by the Government’s standards, not withstanding the incessant media harping that we are in one…the income demographic for vacation home properties is solidly on the sidelines.
This was an observation: this so-called recession is the first in memory not to have high interest rates. A way to create urgency for sales had been to buy-down the interest rate, but that’s a non-starter this time around. So, where is the urgency now with the buyers on the sidelines?
Here are some thoughts that came out of our meetings during this period and to focus on the strong sales that will occur in the coming years.
•Focus on ‘intellectual’ amenities in addition to the hard amenities. Build in programming for the mind and soul.
•Pay attention to ‘lifestyle’ brands in addition to hotel brands.
•In these times you have to ‘block and tackle’ – get back to fundamentals
•Concept of a ‘greater California’ meaning NV, AZ, OR, WA and ID.
•There may not be the appreciation in the coming years for vacation homes, so developers will need to focus more on the use aspects to make the property more valuable in that sense.
•Follow-on – service will become even more important to provide that side of value to the owner.
•Micro-economy – defined as an area with very limited supply of housing and therefore high demand.
•Bootstrapping Developer – ah, how often have we seen him?
•Tennis, after being dead in past years, grew 14% last year. Come back?
•Zip Code Brands i.e. the zip for an Aspen or Sun Valley. Remember Plumtv.com? Those areas.
•Best of all, from a selling vantage: QTR = Quality Time Remaining to have your vacation home and do all the things you want. This from Jim Hill at East-West.
Bottom line…the market is wide open for free-range fractions!
Just back from the Urban Land Institute’s spring meeting in Charleston SC. Our group, a sub part of the over 30,000 ULI members, is the Recreational Development Council comprised of about 220 members. Rarefied Atmosphere. I was there with Rich Feldheim and Ash Offermann.
Not a lot working for most developers, so the creative juices were flowing on how to get around the ‘emotional recession’ so named by Jim Taylor of the Harrison Group. As the country is not in a recession by the Government’s standards, not withstanding the incessant media harping that we are in one…the income demographic for vacation home properties is solidly on the sidelines.
This was an observation: this so-called recession is the first in memory not to have high interest rates. A way to create urgency for sales had been to buy-down the interest rate, but that’s a non-starter this time around. So, where is the urgency now with the buyers on the sidelines?
Here are some thoughts that came out of our meetings during this period and to focus on the strong sales that will occur in the coming years.
•Focus on ‘intellectual’ amenities in addition to the hard amenities. Build in programming for the mind and soul.
•Pay attention to ‘lifestyle’ brands in addition to hotel brands.
•In these times you have to ‘block and tackle’ – get back to fundamentals
•Concept of a ‘greater California’ meaning NV, AZ, OR, WA and ID.
•There may not be the appreciation in the coming years for vacation homes, so developers will need to focus more on the use aspects to make the property more valuable in that sense.
•Follow-on – service will become even more important to provide that side of value to the owner.
•Micro-economy – defined as an area with very limited supply of housing and therefore high demand.
•Bootstrapping Developer – ah, how often have we seen him?
•Tennis, after being dead in past years, grew 14% last year. Come back?
•Zip Code Brands i.e. the zip for an Aspen or Sun Valley. Remember Plumtv.com? Those areas.
•Best of all, from a selling vantage: QTR = Quality Time Remaining to have your vacation home and do all the things you want. This from Jim Hill at East-West.
Bottom line…the market is wide open for free-range fractions!
Sunday, April 27, 2008
Bob Wengel joins Star Resort Group
Beginning April 15th Bob joined SRG as a senior executive and principal of the company. Initially, Bob will manage Meriwether Ranch and then assist SRG in expanding their project base from the current four to eight in the coming 12 months. This also allows Star to handle projects in the Eastern half of the country and the Caribbean.
Bob is the former COO of Diamond Resorts the major Las Vegas timeshare development company with annual sales of $180 million and over 1600 employees. He was with Diamond and its predecessor, Jockey Club, for 22 years.
A native to Butte, Montana Bob came back to Butte for some time off, and when he decided to get ‘back in the business’ Star met his requirements, and we welcome him.
He can be reached at : bwengel@starresortgroup.com and his cel is (406) 498-5606.
It’s been a month since the Ragatz Conference and the calls keep coming in from developers wanting to enter the fractional business. The good news is that most projects are not bailouts of unsold condos or condo hotels…at least the ones we have seen.
The relationship of share size and use plan is still not well understood and ill-started projects are destined for a tough time. We’ve seen a bunch of these. Also, as Ron Frank’s talk at Ragatz pointed out, there’s really very little known about how to sell a fraction, save those of us who have learned by trial and error over the years. The number of real estate brokerage companies who feel they can jump in and sell fractions is startling.
An interesting note from a fractional session at ARDA is to cover a co-brokerage commission into the marketing budget as a cost of lead generation vs. putting it in the sales, commission line. The sales team has to handle the client from front to back, so it really is a generated lead. That is if brokers ever refer in any substantial numbers!
Off to ULI week after next where we’ll see what the ‘big guys’ have planned.
Beginning April 15th Bob joined SRG as a senior executive and principal of the company. Initially, Bob will manage Meriwether Ranch and then assist SRG in expanding their project base from the current four to eight in the coming 12 months. This also allows Star to handle projects in the Eastern half of the country and the Caribbean.
Bob is the former COO of Diamond Resorts the major Las Vegas timeshare development company with annual sales of $180 million and over 1600 employees. He was with Diamond and its predecessor, Jockey Club, for 22 years.
A native to Butte, Montana Bob came back to Butte for some time off, and when he decided to get ‘back in the business’ Star met his requirements, and we welcome him.
He can be reached at : bwengel@starresortgroup.com and his cel is (406) 498-5606.
It’s been a month since the Ragatz Conference and the calls keep coming in from developers wanting to enter the fractional business. The good news is that most projects are not bailouts of unsold condos or condo hotels…at least the ones we have seen.
The relationship of share size and use plan is still not well understood and ill-started projects are destined for a tough time. We’ve seen a bunch of these. Also, as Ron Frank’s talk at Ragatz pointed out, there’s really very little known about how to sell a fraction, save those of us who have learned by trial and error over the years. The number of real estate brokerage companies who feel they can jump in and sell fractions is startling.
An interesting note from a fractional session at ARDA is to cover a co-brokerage commission into the marketing budget as a cost of lead generation vs. putting it in the sales, commission line. The sales team has to handle the client from front to back, so it really is a generated lead. That is if brokers ever refer in any substantial numbers!
Off to ULI week after next where we’ll see what the ‘big guys’ have planned.
Saturday, March 22, 2008
March Blog
Just back from the front lines of fractional development and sales at the sold out Ragatz 08 conference. It was smashing in all areas; the most qualified attendees I’ve ever seen at any resort conference for new entrants, really good panels with as little hype as possible and some real substance.
Tooting the Star horn – Ron Frank gave the first ‘how do you sell’ a fraction presentation at any conference, Ragatz, ARDA, ULI or other…he worked on it to be specific and not BS. It was great. If you want a copy of the power point let me know.
Ash Offerman let the panel on product structure/use plans and delved into excellent examples of the varied nature of use plans and how they specifically relate to the market.
I had the 101 session and a brief 10 minutes in the sun, but I think the overview was comprehensive. That power point is available, too.
From Dick’s annual report the one statistic that stood out was that 91% of Robb Report subscribers had heard of fractions. The other one was that when asked where they would want to buy 83% said ‘give me the beach!’. Well, I guess that’s one reason we’re in Puerto Vallarta!
The tales one hears of deep Africa where there is a place that bull elephants go to die…you know that one? Well, we had our own version as it applies to former ARDA Chairmen. In chorological order George Donovan, Jerry Andres, yours truly and Ed McMullen, Sr. all present and standing.
There were lots of ‘deals’ floating around from Paris to Bermuda, to The Keys, to Costa Rica, to Toronto urban, to Idaho, the California desert back up to the Oregon coast over to Washington state and to Hawaii. That’s geography, and we did not get to the guys from India or Australia!
The consensus on the economy? Gonna wander a bit, but so far fractional sales are holding up just fine, and we expect them to continue. Going back to Dick Ragatz’s report…this mini-lull just hyper extends the pent up demand for fractional buyers.
Last notes: None other than Gordon McMahon, the originator of the luxury fractional product, was there. Originally at Tahoe in the 80s, [yes, there was a before, before the Deer Valley Club] and now the Oregon coast. A real treat to have the founder with us! Sons following fathers; Michael Kosmin, son of Alex, now with Lowe Enterprises and as competent as his dad; Malcolm McMullen presenting while dad Ed looked on; Allen Ten Broek getting lunch advice from son Bryan.
Jim Marmorstone with yet more fine ideas on how to make the product better for the buyer; Mel Grant finally launching his fractional exchange program [fractionalcollection.com]; Hart Rist of Bald Head Island, Carolinas, who named his dog after Dick ‘Ragatz’; Dick Bass of Snowbird still generating a big wake in his path; Mary Borgia, my ULI flight leader, who for reasons unknown came to 101 a second year in a row; Keith Cox the only guy to make the ‘one-offs’ work and now he has ten at Tahoe + others in SF, Hawaii and Tuscany;
Good folk all and many more.
Just back from the front lines of fractional development and sales at the sold out Ragatz 08 conference. It was smashing in all areas; the most qualified attendees I’ve ever seen at any resort conference for new entrants, really good panels with as little hype as possible and some real substance.
Tooting the Star horn – Ron Frank gave the first ‘how do you sell’ a fraction presentation at any conference, Ragatz, ARDA, ULI or other…he worked on it to be specific and not BS. It was great. If you want a copy of the power point let me know.
Ash Offerman let the panel on product structure/use plans and delved into excellent examples of the varied nature of use plans and how they specifically relate to the market.
I had the 101 session and a brief 10 minutes in the sun, but I think the overview was comprehensive. That power point is available, too.
From Dick’s annual report the one statistic that stood out was that 91% of Robb Report subscribers had heard of fractions. The other one was that when asked where they would want to buy 83% said ‘give me the beach!’. Well, I guess that’s one reason we’re in Puerto Vallarta!
The tales one hears of deep Africa where there is a place that bull elephants go to die…you know that one? Well, we had our own version as it applies to former ARDA Chairmen. In chorological order George Donovan, Jerry Andres, yours truly and Ed McMullen, Sr. all present and standing.
There were lots of ‘deals’ floating around from Paris to Bermuda, to The Keys, to Costa Rica, to Toronto urban, to Idaho, the California desert back up to the Oregon coast over to Washington state and to Hawaii. That’s geography, and we did not get to the guys from India or Australia!
The consensus on the economy? Gonna wander a bit, but so far fractional sales are holding up just fine, and we expect them to continue. Going back to Dick Ragatz’s report…this mini-lull just hyper extends the pent up demand for fractional buyers.
Last notes: None other than Gordon McMahon, the originator of the luxury fractional product, was there. Originally at Tahoe in the 80s, [yes, there was a before, before the Deer Valley Club] and now the Oregon coast. A real treat to have the founder with us! Sons following fathers; Michael Kosmin, son of Alex, now with Lowe Enterprises and as competent as his dad; Malcolm McMullen presenting while dad Ed looked on; Allen Ten Broek getting lunch advice from son Bryan.
Jim Marmorstone with yet more fine ideas on how to make the product better for the buyer; Mel Grant finally launching his fractional exchange program [fractionalcollection.com]; Hart Rist of Bald Head Island, Carolinas, who named his dog after Dick ‘Ragatz’; Dick Bass of Snowbird still generating a big wake in his path; Mary Borgia, my ULI flight leader, who for reasons unknown came to 101 a second year in a row; Keith Cox the only guy to make the ‘one-offs’ work and now he has ten at Tahoe + others in SF, Hawaii and Tuscany;
Good folk all and many more.
Wednesday, January 30, 2008
Going through the looking glass…gaining a totally different perspective? That’s what I did last week in attending the annual convention of Safari Club International. 22,500 attendees and 1100 booths at the Reno Convention Center.
I was there as part of Meriwether Ranch, which was a co-sponsor of the mega booth of our GM Teri Walsh’s brother, supreme wildlife artist John Banovich. Get this, in addition to his oils, all pre sold at north of $50-$100k he has a NASCAR deal and painted the hood of one that was auctioned off!
Safari Club is big on hunting and conservation. Booth position is based on the donations made to supported conservation programs. Good idea, no? Maybe ARDA or ULI could take note?
Thru the looking glass as I tramped the exhibit hall; no less than 182 outfitters and guides from the African Continent. Talk about jet lag in the faces of the exhibitors – a long haul from there to Reno! South Africa naturally, but lots of Mozambique, Namibia, and Rhodesia. Then, how about 13 outfitters from Asia including China, and 44 from the South Pacific [didn’t know that New Zealand was such a robust hunting venue], and 16 from Europe – lots of Spain. Of course tons from the USA and Canada.
Then there were the 10 ammo companies and how about the 14 optics companies [the better to see you with my Water Buffalo] and the 17 knife guys and then the 70+ gun and rifle manufacturers. All the famous names: Purdey, Bretta, Kreighoff, Remington, Smith & Wesson, Sturm, Ruger; Weatherly and Winchester.
I had not seen so much ‘money on the hoof’ so the $25,000 knife, or the $145,000 gun did not turn away the crowd. Lots of camo, too.
The logistics of getting the stuffed specimens to Reno much have been Herculean…no end of the aforementioned Water Buffalos, but full-size Crocs, scads of Mountain Sheep varieties from the World over…outfitters going to Iran and Kazakhstan and the other Stans, too; numerous leaping Lions, too many to count world record racks for Elk, Moose and deer, and Elephant and Giraffe heads – at every turn another display of the hunter’s success.
Did we sell any Meriwether fractions? Certainly, and Elk sausage and Roe Deer meat was grand, too, prepared by the NSACAR chef!
But, then there were the educational sessions: Designing Your Trophy Room, Sharpening Your Blades at Home and in the Field, Dark Secrets of Scope Sights Revealed, and then of course in the PM there was Dana Carvey and The Oak Ridge Boys. I was a babe in the woods!
Back to fractions next month!
I was there as part of Meriwether Ranch, which was a co-sponsor of the mega booth of our GM Teri Walsh’s brother, supreme wildlife artist John Banovich. Get this, in addition to his oils, all pre sold at north of $50-$100k he has a NASCAR deal and painted the hood of one that was auctioned off!
Safari Club is big on hunting and conservation. Booth position is based on the donations made to supported conservation programs. Good idea, no? Maybe ARDA or ULI could take note?
Thru the looking glass as I tramped the exhibit hall; no less than 182 outfitters and guides from the African Continent. Talk about jet lag in the faces of the exhibitors – a long haul from there to Reno! South Africa naturally, but lots of Mozambique, Namibia, and Rhodesia. Then, how about 13 outfitters from Asia including China, and 44 from the South Pacific [didn’t know that New Zealand was such a robust hunting venue], and 16 from Europe – lots of Spain. Of course tons from the USA and Canada.
Then there were the 10 ammo companies and how about the 14 optics companies [the better to see you with my Water Buffalo] and the 17 knife guys and then the 70+ gun and rifle manufacturers. All the famous names: Purdey, Bretta, Kreighoff, Remington, Smith & Wesson, Sturm, Ruger; Weatherly and Winchester.
I had not seen so much ‘money on the hoof’ so the $25,000 knife, or the $145,000 gun did not turn away the crowd. Lots of camo, too.
The logistics of getting the stuffed specimens to Reno much have been Herculean…no end of the aforementioned Water Buffalos, but full-size Crocs, scads of Mountain Sheep varieties from the World over…outfitters going to Iran and Kazakhstan and the other Stans, too; numerous leaping Lions, too many to count world record racks for Elk, Moose and deer, and Elephant and Giraffe heads – at every turn another display of the hunter’s success.
Did we sell any Meriwether fractions? Certainly, and Elk sausage and Roe Deer meat was grand, too, prepared by the NSACAR chef!
But, then there were the educational sessions: Designing Your Trophy Room, Sharpening Your Blades at Home and in the Field, Dark Secrets of Scope Sights Revealed, and then of course in the PM there was Dana Carvey and The Oak Ridge Boys. I was a babe in the woods!
Back to fractions next month!
Thursday, January 10, 2008
January 10, 2008
Greetings to the New Year!
I'd like to share more information from the Harrison Group's presentation to the Recreational Development Councils at the Urban Land Institute October meeting. In my November bog I mentioned some of the material, but over the past two months I've though more and more about the data.
Source: Harrison Group for American Express Publishing
The concept that I had not thought much about was 'discretionary income' vs. household income. Sorry if I'm behind the curve on this. I know we are in the discretionary product market with vacation homes - that's clear , but, I had always thought of the 'household' part, NOT the part they had to spend of the household income. I guess assuming if the income was high enough they would buy.
Here' s how Harrison delineates wealth categories:
Affluent = annual, discretionary income of $125,000 to $249,999
Super Affluent = annual discretionary income of $250,000 to $499,000
Wealthy = annual discretionary income of $500,000+
Here's how the vacation ownership break down:
Own 2nd Home
Affluent 32%
Super Affluent 34%
Wealthy 49%
Own Timeshare
Affluent 20%
Super Affluent 15%
Wealthy 14%
Own Fraction
Affluent 15%
Super Affluent 12%
Wealthy 13%
Their Intention to buy:
Buy a Second Home
Affluent 21%
Super Affluent 28%
Wealthy 37%
Buy a Timeshare
Affluent 15%
Super Affluent 19%
Wealthy 11%
Buy a Fraction
Affluent 15%
Super Affluent 23%
Wealthy 14%
Wow, wow and wow on the 23% of the Super Affluent!
As we design the physical fractional home here's how these groups look at and how they play out with brands. We kind of know to use quality stuff, but….
Quality - 97% want quality and the reputation of quality
Craftsmanship - 96% want to have their property be reflective of this
Design - 81% go for who has a reputation for this
All you marketing folk read up here: What the wealthy are collecting?
Fine art 20%
Sound systems/media 18 %
Books/Rare books 18%
Fine Watches 18%
Yachts/Boat 17%
Vintage cars 14%
Great stuff, no? Gimme those Super Affluents almost a quarter of which want to buy a fraction!
Best to all.
Greetings to the New Year!
I'd like to share more information from the Harrison Group's presentation to the Recreational Development Councils at the Urban Land Institute October meeting. In my November bog I mentioned some of the material, but over the past two months I've though more and more about the data.
Source: Harrison Group for American Express Publishing
The concept that I had not thought much about was 'discretionary income' vs. household income. Sorry if I'm behind the curve on this. I know we are in the discretionary product market with vacation homes - that's clear , but, I had always thought of the 'household' part, NOT the part they had to spend of the household income. I guess assuming if the income was high enough they would buy.
Here' s how Harrison delineates wealth categories:
Affluent = annual, discretionary income of $125,000 to $249,999
Super Affluent = annual discretionary income of $250,000 to $499,000
Wealthy = annual discretionary income of $500,000+
Here's how the vacation ownership break down:
Own 2nd Home
Affluent 32%
Super Affluent 34%
Wealthy 49%
Own Timeshare
Affluent 20%
Super Affluent 15%
Wealthy 14%
Own Fraction
Affluent 15%
Super Affluent 12%
Wealthy 13%
Their Intention to buy:
Buy a Second Home
Affluent 21%
Super Affluent 28%
Wealthy 37%
Buy a Timeshare
Affluent 15%
Super Affluent 19%
Wealthy 11%
Buy a Fraction
Affluent 15%
Super Affluent 23%
Wealthy 14%
Wow, wow and wow on the 23% of the Super Affluent!
As we design the physical fractional home here's how these groups look at and how they play out with brands. We kind of know to use quality stuff, but….
Quality - 97% want quality and the reputation of quality
Craftsmanship - 96% want to have their property be reflective of this
Design - 81% go for who has a reputation for this
All you marketing folk read up here: What the wealthy are collecting?
Fine art 20%
Sound systems/media 18 %
Books/Rare books 18%
Fine Watches 18%
Yachts/Boat 17%
Vintage cars 14%
Great stuff, no? Gimme those Super Affluents almost a quarter of which want to buy a fraction!
Best to all.
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