Berry on Fractions & Shared Ownership

January 2011

2011-01-09T13:55:00.000-08:00

January 2011

Our acute surgery program at Dye Villas is paying some dividends. Our developer 'close out' at $30k per 1/13^th + HOA dues for a year + closing costs + extras, all cash at #34,650 down from $60k has gotten us 8 closed sales in the past 60 days with the pipeline filling up. We began this program at the start of the holiday season, so up hill with our customers to come to the project. We have about 12 other, solid deals in the works. All the buyers are regional to Myrtle Beach.

We plan to continue this 'close out' through the first quarter. Here's the scenario:

Dye Villas was built and opened in late 2005. It sold very well thru early 2008 and then began to slow and stopped on September 8^th of that year.

Not much happened 'till the spring of '10 when we became involved. In the mean time a 1/12^th share had been approved by the DRE in South Carolina, down from the 1/6 share previously offered at up to $150k. By 2010 it was down to $120,000, so the $60,000 for the then amended to 1/13^th share was a good price. But, no traction, so in November of 2010 we began with the 'close out' plan.

The concern was to: [1] make sales and bring in some cash, [2] bring in more HOA dues to cover the subsidy and [3] most important to not let the project go stale, to not let it be seen as old and older inventory although it's been kept in impeccable condition.

So, what do we know of the recession? Cut, cut and cut the prices and some prospects will move off center. Not very clever, but what can work; can work.

We have reconfigured our sales team in the process, stepped up our relationship selling skills, filled our toolboxes with contemporary data and figuratively 'married' any prospect that will raise their hand. We are with them until they 'divorce' us.

At Whitefish it's still hand-to-hand combat to get decisions made. For every sale we close we loose two that had deposits and paperwork. For all of 2010 we closed just a handful. I mentioned the turning on us of the Canadian market, who used to buy real estate in the US as a hedge to the Canadian economy. Now, they tell us the US is worse off than Canada, so why buy?

I'm speaking at the London fractional conference in February, interested to see if there is any advisory work to keep our team busy.

Will the tax rate extensions and the change of power in the House of Representatives make any difference in consumer confidence? We'll see….

January 2011

2011-01-07T14:10:00.000-08:00

January 2011

We plan to continue this 'close out' through the first quarter. Here's the scenario:

Dye Villas was built and opened in late 2005. It sold very well thru early 2008 and then began to slow and stopped on September 8^th of that year.

So, what do we know of the recession? Cut, cut and cut the prices and some prospects will move off center. Not very clever, but what can work; can work.

I'm speaking at the London fractional conference in February, interested to see if there is any advisory work to keep our team busy.

Will the tax rate extensions and the change of power in the House of Representatives make any difference in consumer confidence? We'll see….

Carl

2010-09-24T15:27:00.000-07:00

September 2010 Blog

Just back from England. Among the meetings I had: Nick Turner of Registry Collection, Piers Brown of Fractional Life and James Dawson former operating officer of Premier Resorts.

England is in the trough as is the US, so very little action. But, a couple of bright spots: Pier's Miami conference was very well attended especially with delegates from the Caribbean and Central and South America. He has a Middle East conference coming up in November, so that participation will be interesting to follow. Lastly, Piers has his annual London-based conference in February and his numbers will be key to addressing the economic revival 'over there'.

Nick Turner's approach is to go out and bring the message to the market; country-by-country beginning December in Ireland and then in 2011 in Portugal, Spain and Italy plus other countries. These daylong meetings will feature a primer on fractions in the AM and then face to face contacts with practitioners in the afternoon. This is a kick-start for the local developers to get going with their planned projects.

From the trenches, so to speak, James Dawson is laying low [he bought a country inn in Wales] until he sees movement in the marketplace. One of his past sales execs is still doing very well working the high-income folk to buy sun-country homes at the current lower prices. His concern, as well as others, as well as us here in the US, is with prices for second homes; will they go lower than they now are?

Back here in America I am awaiting the mid-term elections, which will dictate the 2011 market. If the Republicans win back one of the Houses of Congress then I expect the market to open up a bit as there will be gridlock which we love to hate.

Progress on our deals? Slow but sure. We continue to be buffeted by buyers offering low-ball prices for our fractions. As those of us in the business for some time know this just did not happen 'back in the day'. Now, it's a free-for-all. The buyer expects to offer and get a price break not necessarily taking into account the inherent price break in the fraction itself.

So, Whitefish moves along. Interesting that Canadians, long-time buyers of Montana real estate, are now lecturing us on how lousy our economy is being managed compared to theirs as a reason for not buying.

At Dye Villas we are making sales while ramping up our marketing programs and our mini-vac lead generation programs. No home run numbers yet, but if there is any market in the Southeast we'll get it at Dye; the product, amenities and pricing are just too good for the buyer not to act -- if our sales team correctly handles the buyer.

ULI's semi annual meeting coming up in a few weeks, so more reports from the front line. And, keep a lookout for the Kelsey-Norden research report on buyers and non-buyers that they will be shortly previewing…I head it got some really good info in it.

2010-06-29T07:33:00.000-07:00

July 2010

Pushing the economy uphill? We are trying it again after our start at the Whitefish Lake Residence Club a year ago. That gamble turned out pretty well. The market did not bang down the doors, but we made enough headway to keep going, and anticipate a very good summer.

Now we are re-launching Dye Villas, Barefoot Resort, Myrtle Beach SC.

Myrtle Beach you say? You say very middle class, so what kind of fractional location is that for a PRC? Well I went from an $8.50 excellent clubhouse sandwich to a $42.50 filet mignon on successive nights. So there! Pay your price and pick your enjoyment. Our market research shows that there's lots of money on the Grand Strand.

Barefoot Resort has four golf courses, three rated in the top 100 in the USA: Dye, Love, Fazio and Norman plus 110 retail shops, 10 restaurants and three big time attractions. Over 130,000 rounds played a year. Definitely hot stuff!

Dye Villas, purpose built three bed/three full bath condos, at the Dye Clubhouse. Owners get full golf memberships at all four courses whether in residence or not. Hot stuff!

Before the financial collapse Dye was 50% sold on a 1/6th basis. Now, we have both 1/12 and 1/6 interests to sell, and we're going at it.

Hart Rist, major fractional pro is our project and sales director, which grounds us big time. Our team has activated: Ron Frank for the SRG University sales education, Mac MacEwan for all marketing and lead generation, Scott Tracy for escrow, admin and legal and Bob Wengel for overall project leadership.

So are we concerned about the results of the Wall Street Journal/NBC poll out at this writing? Sure, but never shy we are moving ahead… big time!

2010-04-05T07:45:00.000-07:00

April 2010

It's the week after the Ragatz Conference, which had a smaller attendance than in the past, but it made networking all the better. Surprisingly for me there were some quality deals there. Here are my top line impressions:

1. No bank money now and probably not 'till well into 2011, so go the private capital route. The banks are still whipsawed between what the White House says to do and what the FDIC examiners demand not to be done = lend money.

2. Take out the bottom-feeders and there are few buyers. A handful of projects report decent sales volume, but I question that in light of our experiences.

3. Broad agreement that buyer motivations have changed, and for the foreseeable future, too. More cautious, value and quality oriented and as usual the Harrison Group gave a very interesting report.

4. Discussions about cutting prices, and for those who do the length of time it will take to raise them back up to pre-financial collapse levels vs. using other incentives. Will the prices ever get back to yesterday's levels?

5. Conversions from whole units to fractions got a broad 'thumbs down' due to the innumerable hurdles involved.

6. Still no success with the conversion of single-family homes to fractions.

7. Some thought that fractions will become a points-based product.

8. Rental income is a necessity today for owners.

9. Star is the only full service company of its kind still in business today.

2010-03-23T12:32:00.000-07:00

March '10 Blog

Signs of life out there? It seems so. The phones are ringing, development partners are talking, are the banks lending? Well, two out of three isn't bad compared to 2009.

Ragatz conference is upcoming next week; chock filled with lawyers and suppliers and woefully short of marketers and developers - a sign of the times. We'll be there.

ARDA last week - many upbeat, but the timeshare business has really been decimated. And, with fewer new sales and more defaults it brings back the scary scenario of a tidal wave of resales swamping developer sales. Far too long has this issued been ignored.

ULI coming in three weeks where the meeting landscape will be littered with stalled deals and deals gone back to lenders and underfunded HOAs. Those will probably be the common topics…how and when a workout occurs.

Consumer uncertainty has been the largest impediment to buyers, other than bottom feeders, coming back into the market. One part of that uncertainty the House of Representatives took care of last Sunday with their vote on the health. Like the higher taxes or not, worry about available quality medicine aside at least one, large social issue has been decided. Energy is next.

Once that has been decided, and we have the November election buyers will come back. I predict that the winter season 2010-11 will be terrific. Like the social policy or not, like the higher taxes or not, like who controls Congress; at least those who wanted 'change' have it, and we all need to get on with our businesses.

Our Whitefish MT project continues to chug along. We are looking at moving into two other, major deals. So, count Star with the glass half full crowd…at least maybe filling to the half level.

2009-12-30T09:56:00.000-08:00

12/31/09

Who would have thought that we’d close the decade having gone through what we have as an industry? For fractional interests, private residence clubs and shared homes the past 14 months have really been something to live through.

What do I see for 2010? Article after article in business journals and the Wall Street Journal point towards the economy recovering and some discretionary spending coming back. That should mean good news for fractional interests.

Net worth is on the rise thanks to the stock market. Personal income is on the increase in many cities outside of the rust belt. Stock portfolios may transition more to bonds and other fixed income products. Maybe we can siphon off some of that cash as it goes from equities to the fixed market?

At Star have stripped down our business model and built it back up again to be more responsive for 2010. We’ve recast our marketing, selling and management services to be more flexible and responsive to take advantage of the openings for business as they occur. We’ve cut expenses to the bone. We are lean and competitive.

Developers we are working with, including ourselves, are deciding to move past the planning phase and commit money to their projects.

We’re going to focus more on Canadians and the political moderates and liberals. No reason to listen to the conservatives bitch about Washington DC and not buy our products. In 2010 we will make sales happen and darn the customer who stands in our way!

2009-10-28T16:12:00.000-07:00

Here’s what I know, short and sweet!

So, what to write about with a lousy market and uncertainty about what Congress will do that might add more taxes and governmental interference?

Here’s what I do know. Let me speak to our Whitefish MT project, small as it is.

We began with modest goals last May – to sell 12 shares by the end of the year. Well, as of this month we had sold 10 shares. Hooray!

Not so fast. We sold seven shares to residents of the USA and three to Canadians. The bottom line? All three Canadians closed and all seven from our USofA dropt out after having money in escrow!

So, not a lot of confidence in the US market right now with our team.

What did work, to get all sales to escrow, before dropping out, was a cut in the pricing [Whitefish Stimulus Plan] and a couple of years of HOA fees paid. So, that part worked, but the US market did not stand up and go to closing.

The US buyers were from all over the country, too, so not a geographical thing for the cancellations. Now, I think we’ll get back a couple of them, but that’s where we stand at the end of October.

Happier tales next month? Stand by.

2009-08-25T07:12:00.000-07:00

August 2009 - Take Charge of our own future!

We are getting the best sales and marketing minds together to discuss what has worked this past year, and what we believe will work for 2010.

Now's the time to clear our heads from a lousy 2009 and see what we will make of 2010.

Hart Rist, of Bald Head Island NC, and Star Resorts are making our move to be as prepared as we can be for next year. To that end we extend an open invitation to top marketing and sales execs to an interactive meeting.

At this moment in time there's no one in our business who has all the answers, or any of the answers, so let's construct the marketing and sales models we want for our own success.

When: Wednesday evening September 30th to Friday morning October 2nd.

Where: Caesar's Palace, Vegas

Rate: $100. Per night; each participant pays own way; no sponsorships

Program: A hands-on day of interaction: no one attendee will drive the
discussion. We will make of this what we want it to be.

Wednesday evening - hospitality

Thursday AM - fully interactive on programs tried in 09; what worked and did not work.

Thursday afternoon : handful to 30 minute presentations on program that did work and
discussions on the whys and hows

Thursday PM - cocktails provided by Star Resorts

Friday - depart or stay around

Want to attend? Call Carl at 415-519-1015 or write: cberry@starresortgroup.com

2009-07-23T15:25:00.001-07:00

July 2009

Summertime Blues?

Does anyone with the money to purchase a vacation home have any degree of confidence that Congress or the Administration is looking out for them? I doubt it.
But, in my opinion, if either heath care reform or trade and cap gets permanently sidelined or undergoes major modifications then our buyers may feel that they can begin to come out from under their blankets.

On the retail side we are, basically, in limbo. Our domestic project, Whitefish MT, is a great product and pricing with a terrific location and amenities and we still feel we'll snag some sales this summer. The pipeline is filling up; the interest levels are inching higher. So, our gamble to begin a new project in 'these times' is still waiting for validation.

On the developer side we are seeing pretty robust activity - compared to 'back in the day'. Seven developers, some we have been working with for over a year and others for weeks, seem prepared to spend the money to move ahead with the planning phase to come to market summer/fall for 2010, or out and out getting into business for this winter 09-10.

What new out there with you?

2009-06-14T08:06:00.000-07:00

Signs of fractional life? Yes!!! Finally, after all these months of darkness and some degree of despair the private residence club is coming back.

This week we had fractional sales, each, at Vallarta Gardens, Puerto Vallarta and at Anabui, Aruba. In each case the prospect had visited before. Our sales teams have worked hard to get customers back for a second look, and it has paid off.

Calls are beginning to come in, again, for ventures and or marketing assignments – another good sign. So far most of the calls are sub-par deals, but heck the phone is ringing! There are still a lot of fractional or shared ownership bailout schemes.
Also, a couple of deals we are working with who have bank problems are getting those sorted out, slowly, but moving ahead.

At Whitefish, our new project we began 60 days ago – we chose to be very contrarian with this start, and boy you should have seen the looks I got at ULI when I announced we were launching a new deal! It is 99% set and ready to go for the summer market.

The Registry Collection has been great to work with on Whitefish as we asked for a reassignment of some weekly values to fit the new use plan. Pat Hanes, shared ownership pro, via Teton Club, Front Four at Stowe, Fairmont in Dubai and Cordillera CO, our team. He lives in the area; a stroke of very good fortune for Star.

So, between Rick Abelson handling day to day sales and Bob Wengle as our project director backed up by Mac MacEwan for marketing, Scott Tracy for legal and escrow and Ash Offermann for quality control and cash flow we are throwing a lot of resources at this project. We believe in it!

2009-05-02T12:52:00.001-07:00

Read Carl Berry, May, Points Program for Ritz?

ULI Spring Councils meeting in Atlanta
Lani Kane King, on a marketing panel, teed up their announcement for the Ritz Carlton Destination Club; a parallel offering to their site-specific fractions. I always told my team that if Marriott went to points, in the USA, then I’d go. They are so darn conservative. Well, I’m on the ‘points-trail’ now looking into them for our Las Vegas project.

Other good info at ULI. From the American Affluence Research Center:

•91% negative rating on the current economy
•67% feel the economy will be same or worse
•64% feel the stock market will be same or lower
•46% feel their incomes will be lower
•60% have preservation of capital as their investment goal
•67% have no plans for major purchases
•Interest in purchasing a second home = 25% of 2005 levels

From the Norden-Kelsey Survey of Developers

•64% say recovery is 18 Months + away
•65% say sales velocities will not recover for 5+ years, 16 % say never
•61% say values have declined 20-30%
•56% say HOA and club fees need to drop by 20-30%
•75% say price recovery will take 3 to 6 years
•93% say developer credibility requirements will escalate
•92% say all amenities will need to be in place
•81% say product will be smaller

With all this digested there was more optimism that in October when we last met. Developers have either reconciled themselves to a slog or their projects are fully stopped do to the credit markets still being frozen for resort development.
SRG was alone is starting a new project, The Whitefish Club, a PRC on Whitefish Lake, Montana. So, our necks are really out there. Will our chests be puffed out when ULI next meets in November!

2009-04-13T17:40:00.000-07:00

April 2009

Launch a new fractional resort project now? You Bet!

There are contrarian investors, salmon swimming up stream, walking to a different drummer; all variations on the theme of not following the herd.

Star is launching a fractional real estate project in Whitefish Montana. Our team believes this is the moment in time for this product in this place and at the pricing we intend to offer. We have taken over a nascent offering and are in sales as of today.

The consensus of many in the resort business is that fractional real estate will be the product of choice as the market returns. We don't plan for a robust summer selling season, but we do plan to make the necessary sales to lead us into the ski and summer seasons of '09 and '10, and then really go to town with sales.

Whitefish Montana? Google it. We are right on Whitefish Lake, as in 20 feet from the water! Lakefront prices are still at $20,000+ a frontage foot.

We are right next to the premier resort in Montana, The Lodge @ Whitefish Lake. The Lodge itself a very successful condo hotel facility with a top lakeside restaurant and bar, spa, fitness center, marina and boat club with 85 slips, conferencing facility, etc. Our owners have access to all Lodge amenities as well as preferred access to Whitefish Mountain Ski Resort 10 minutes away. And all of this just 30 minutes from the West entrance of Glacier National Park, celebrating its Centennial. Montana real estate at it best!

This project is a venture of Vacation Whitefish, LLC and Star Resort Group, LLC.

Star has never been one to sit and mope. Are our frustration levels high with our currently selling projects? You bet! But, they will come back and we will continue to move on.

How many metaphors can Carl use?

2009-03-15T12:28:00.000-07:00

March Blog

Spoke at two conferences in March; Urban Land’s Recreational Development in Orlando and Ragatz’s Fractional in San Francisco.

Here's the Important Stuff

ULI Meeting - Great perspective from Pete Halter on what to expect the next 2-4 years, to wit:

The Tough News

o Demographics are passé. Psychographics rule – the motives behind why one will buy vacation property today especially after what we are going through.

o The age of mass affluence is gone for some years

o Obama will do zero for our buyers; he’ll take away from them with higher taxes and fewer deductions, so the wealth effect is gone

o Our buyers will have more important issues in their lives than buying a fraction or vacation home

o Our buyers 401k is down, their home value is down, their job may be at risk

o They need to rebuild their wealth, then will spend on deferred things like a new car, home improvements – all this before a vacation home.

o Condo projects, if their loans are to be bought by Fannie and Freddie, now need a 70% presale, yes, seventy percent.

So, the ‘good news?’

o Time is the enemy of the boomer…each day lost with family and friends in a vacation home cannot be regained

o Regional resorts will do better as the purchase can be better justified

o Fractions will be the product of choice: green [8 or 12 owners per home], value [pay just part] and smaller ongoing costs [sharing them]

o Post sale costs, however, will be looked at very closely – not so much the entry price but the annual costs

o Buyers will want to best deal, so new-to-market projects can price themselves accordingly; those caught mid stream need to collaborate with their owners to have them understand why prices may need to be reduced

o Innovative marketing and sales – a specialty of fractional developers - strong on relationship sales, usage of data bases and ‘owning’ the customer, the sales center as a retail experience, web animation, let the buyer be participatory in the selling process.

Fractions will come back first as a resort product....this said by many speakers who might not know a fraction if they stumbled over it! So, logical thinking wins out!!!

From Ragatz - I went with limited expectations and came away with a lot of good stuff and a bunch of qualified deals:

o Dick reported that sales of both PRC and Fractional projects were lower than in 07 minus 24% for PRC and minus 46% for fractions

o Dave Bansmer, who has my undying gratitude for buying Worlds Finest Resorts from us and blending it into Registry Collection, now with posh Sea Island off the Georgia coast reported closing 30, million dollar each quarter shares in the 4th quarter of 2007 – Yup, that’s right!

o As usual Gary Derck was a champ with is presentation on the Purgatory Lodge with 3 products in the mid-rise; whole, fractional and PRC. On the pre-sale conversions last fall the PRC performed best, fractions second and the wholes a distant third

o Not surprisingly the finance panel was a non-event even though moderator Art Spaulding pushed and prodded as much as possible. Hey, financial markets are still locked!

o Mel Grant has launched a new site: www.FractionalCollection.com not as an exchanage site, but a classy lead generation site. That’s Mel of San Francisco Exchange Company – SFX

o Bill Orwig, fractional sales from day #1, finally admitted that some timeshares were okay and some timeshare sales folk can make it in fractions. Talk about a long digestive period, but congrats Bill!

o Marketing internet panel was a dud…just not the right mix or those who actually use the electronic media for lead generation vs. the generalists. Shudda had our Mac MacEwan on the panel!

o Registry Collection, in the 4th quarter of 08, had their best ever affiliation count, so Gregg Anderson was a happy camper

o Sherman Potvin has launched a national franchise operation for single homes, Fractional Homes International, which I still don’t get, but that’s not the point. He’s off and running

o Howard Nusbaum, CEO of ARDA, stood his ground quite elegantly, amid some cries for a fractional association to bypass ARDA. His message got through at ARDA is a big-tent, so join and be part of the process. Steve just won’t give up!

o Jim Marmorstone predicts that fractions will evolve into points based programs.

o From ULI Rec Development Flights good to see Toni Alexander, Dennis Hillier, Gary Derck, Lynn Cadwalader, Geoff McGuire, Paul Courtnell, Ed McMullen Sr in addition to our Ash Offermann.

o Dick had about 400 folks there, so a darn good showing considering …

o I was bumped off the ‘meet the experts panel’ this year, so I don’t know what that says about your scribe. Well, gotta try harder next year.

2009-02-05T16:37:00.000-08:00

February 6, 2009

>If you read this blog two weeks ago - skip it. If not...

If not, there are some really excellent comments and predictions from experts in our business on when and how fractions will come back.

So, I'm sending again with the hopes that you may take a moment [it will take you a minute or two] to click through and read what they say.

If you're tired of me - this is not about me. It's about what others think of the business today.

Many thanks, Carl

January 23, 2009

So, here's the staying-in-business question: Once the market begins to come back will it be led by fractions? And, of course, WHEN?

This is a long blog, but I think the comments, below, are worthwhile reading. I hope you agree. Let me know?

Boy, that's the multi-million dollar question isn't it? To help clear up my crystal ball I ask a number of leading resort professionals what they thought. This is real time - in the past week. Where's Dick Ragatz? Good catch! He came out with a broadcast release last month stating that fractions would lead the comeback.

Now, I'm not the one to question Dick, but I thought I'd get a wider number of views than his ‘release-sponsor’ who was obviously generating business from the release.

So, among the respondents:

Greg Traxler of East West
John Veering fmr. Villa la Estancia and now Contact Development Corp.
Scott Burlingame of Vacation Ownership World
Greg Cory and Bob Chickering both of ERA
Mary Borgia of her own powerhouse consulting company
Dave Howe of Greenangels
Jeff Prostor of Brookfield Hawaii
Tom Goetchius - guru
Sherman Potvin of Luxury Fractional Guide
Dean Kneider of Resort to Resort
Tom and Bill Ward of Ward Financial
Jim Marmorstone of Tenstar and the inventor of points-based programs
Hart Rist of Bald Head Island at The Hammocks

Here are excerpts taken from their replies to the question: Once the market begins to come back will it be led by fractions?

>I believe more buyers will indeed consider fractional options as caution fades and market returns. One major factor in this opinion is the amount of consideration / interest we have seen with our fractional projects here through recent trends. As our prospects have discovered what previously was not an ideal purchase option, they have gained insight into the level of quality and benefits fractional projects offer

>The fractions really need to sold as a product that is thought out and is specially designed before the shovel hits the ground. It has to have particular elements that reflect product owned and used through the world but also the real estate investment and use to that particular local

>They need to be marked differently not cheaper but an alternative purchase in mix use and the only way to go in single use. Generous trade in policies are important.

>As affluent and semi-affluent consumers very slowly emerge from the fear and lack of confidence resulting from the steady drumbeat of dire news about the state of the economy, and get on with their lives and, in particular, their leisure lifestyle, they, I believe, will be more cautious and conservative about what they buy and how they buy it

>My gut check says yes…. We collectively thought there will be a whole segment of the baby boom market that will pass on the purchase decision altogether because they will be working longer and saving more to replace their paper and real losses in the market (me included). There will be another segment that will be risk adverse, and be looking for a lower priced alternative to whole ownership. There may be a moral suasion reaction too, where in an austerity environment owning the 'whole thing' may become viewed as wasteful and tacky.

>After all, Fractional Ownership was making a lot of sense before the economic collapse. Isn't it reasonable to predict that it makes even more sense in a post economic meltdown era.

>… that are no longer driven buy the Developer reaping the reward of a multiplier greater then 1.5 as the Greed factor in fractional was always the #1 reason for failure in my mind (along with poor use plans and high HOA fees, as close 2nd & 3rd)

>Fractional may lead as a value statement. Buyers may embrace the "buy only the time that you need" aspect of fractional ownership ( more of a statement and above Time Share still ) as they try to limit their financial obligations.

>The recession has made the barrier to entry come down in virtually every market, which was one of the key factors for fractionals in the first place.

>The fractional alternative will give the buyer all of the benefits of the vacation property but without the capital commitment of whole ownership. So when the US consumer finally does start to return they will behave differently and will be more financially conservative for quite some time to come. The fractional product will be a very good match for this new consumer behavior.

>As the market rebounds, a percentage of buyers will certainly find fractional products the product of choice...if it suits their family's needs... usage, size, location, price, etc... early buyers will be users and cautious as opposed to scavengers.

>… also believe there is be Fed policy and regulation that could severely impact our ability to do- have a business. The initial fix is on primary owner occupied housing - it appears.

>The depth of market that can pay cash - and not use the equity in another property is very limited ,,. and again that may want to use their cash for this purpose...

>I would think that the fractional product would be more appealing since buyers may be more reluctant to make a large investment in the whole unit purchase. On the other hand getting financing for fractions will be critical.

>We are probably going to emerge from this economic crisis slowly and in fits and starts. As the economy improves, people's confidence will gradually grow. They are more apt to re-enter markets in a cautious and piecemeal fashion given what they/we all have been through. (Use-)Value and utility are likely to be more important considerations in leisure real estate purchases than profit.

>All of the folks that have lost value in their second homes as well as those contemplating a second home purchase will think twice before stepping up to the plate for a whole ownership vacation home, they will all look at alternatives and will find the fractional industry attractive as their risk is minimized and they can continue their quality vacations with their families.

>I am clinging to the belief and hope that this malaise and bloodletting won't snuff out the dream of owning secondary real estate among boomers and Gen-Ys. People have short memories. . I want to believe that when the mushroom cloud dissipates, the roaches will emerge again from the cracks.

>Flight to value & downsizing are coming into vogue. No longer does conspicuous consumption sell. Products priced for status are likely to suffer. The planet can no longer afford the waste that 2nd home whole ownership connotes. Economy is no longer a demeaning word.

>The high-end market will be more challenging as job losses and downsizing has allowed companies to make cuts at the high end of market (in terms of compensation). My opinion is that some or many of these high-end positions will not be refilled in the short-run and thereby reduce the pool of eligible high-end buyers. Their return to the market will be more gradual than the middle market for whom timesharing will be affordable

>Further impacting this former high-end of the market will be that many will have suffered irreversible losses in their investment portfolios and real estate assets. This will further reduce the interest in second homes.

>As a result, value will become even more important to all buyers.

>In the next few years, to counter the inroads of fractional developers, I see timeshare developers offering point-based programs that have the attributes of fractional programs and products. Further, I see a move by fractional developers to offer points-based programs to become more competitive with the timeshare developers and increase the flexibility of the programs offered, thereby eliminating the need to sell fractions of a home (i.e. 1/12th, 1/10th, 1/8th, 1/4th, or other)

>…my assessment is that timesharing will be the first to experience growth and recovery. Next, will be the fractional market, driven by the desire of consumers for value and a reduced financial commitment as compared to whole ownership. Finally, whole ownership second homes will begin their recovery. Overall, the year ahead will be focused on rightsizing, stability, and reestablishing the financial conditions to support the industry. In 2010, I predict the recovery of the timeshare business as they begin to rebuild their marketing and sales organizations to align with an increased buyer base. In late 2010 and 2011, we’ll begin to see the recovery of the fractional market.

>First of all, through more education and public awareness! Secondly, as fear is replaced by more confidence and pent-up demand continues to build, I predict a surge in sales across the land. Thirdly, I see a burst in single family stand alone homes as brokers, buyers and sellers get more educated and exposed to this second home alternative.

So, what do you think? Good stuff in my opinion. Thanks for reading. Carl

2009-01-23T12:19:00.000-08:00

January 23, 2009

So, here's the staying-in-business question: Once the market begins to come back will it be led by fractions? And, of course, WHEN?

This is a long blog, but I think the comments, below, are worthwhile reading. I hope you agree. Let me know?

Boy, that's the multi-million dollar question isn't it? To help clear up my crystal ball I ask a number of leading resort professionals what they thought. This is real time - in the past week. Where's Dick Ragatz? Good catch! He came out with a broadcast release last month stating that fractions would lead the comeback.

Now, I'm not the one to question Dick, but I thought I'd get a wider number of views than his ‘release-sponsor’ who was obviously generating business from the release.

So, among the respondents:

Greg Traxler of East West
John Veering fmr. Villa la Estancia and now Contact Development Corp.
Scott Burlingame of Vacation Ownership World
Greg Cory and Bob Chickering both of ERA
Mary Borgia of her own powerhouse consulting company
Dave Howe of Greenangels
Jeff Prostor of Brookfield Hawaii
Tom Goetchius - guru
Sherman Potvin of Luxury Fractional Guide
Dean Kneider of Resort to Resort
Tom and Bill Ward of Ward Financial
Jim Marmorstone of Tenstar and the inventor of points-based programs
Hart Rist of Bald Head Island at The Hammocks

Here are excerpts taken from their replies to the question: Once the market begins to come back will it be led by fractions?

>I believe more buyers will indeed consider fractional options as caution fades and market returns. One major factor in this opinion is the amount of consideration / interest we have seen with our fractional projects here through recent trends. As our prospects have discovered what previously was not an ideal purchase option, they have gained insight into the level of quality and benefits fractional projects offer

>The fractions really need to sold as a product that is thought out and is specially designed before the shovel hits the ground. It has to have particular elements that reflect product owned and used through the world but also the real estate investment and use to that particular local

>They need to be marked differently not cheaper but an alternative purchase in mix use and the only way to go in single use. Generous trade in policies are important.

>As affluent and semi-affluent consumers very slowly emerge from the fear and lack of confidence resulting from the steady drumbeat of dire news about the state of the economy, and get on with their lives and, in particular, their leisure lifestyle, they, I believe, will be more cautious and conservative about what they buy and how they buy it

>My gut check says yes…. We collectively thought there will be a whole segment of the baby boom market that will pass on the purchase decision altogether because they will be working longer and saving more to replace their paper and real losses in the market (me included). There will be another segment that will be risk adverse, and be looking for a lower priced alternative to whole ownership. There may be a moral suasion reaction too, where in an austerity environment owning the 'whole thing' may become viewed as wasteful and tacky.

>After all, Fractional Ownership was making a lot of sense before the economic collapse. Isn't it reasonable to predict that it makes even more sense in a post economic meltdown era.

>… that are no longer driven buy the Developer reaping the reward of a multiplier greater then 1.5 as the Greed factor in fractional was always the #1 reason for failure in my mind (along with poor use plans and high HOA fees, as close 2nd & 3rd)

>Fractional may lead as a value statement. Buyers may embrace the "buy only the time that you need" aspect of fractional ownership ( more of a statement and above Time Share still ) as they try to limit their financial obligations.

>The recession has made the barrier to entry come down in virtually every market, which was one of the key factors for fractionals in the first place.

>The fractional alternative will give the buyer all of the benefits of the vacation property but without the capital commitment of whole ownership. So when the US consumer finally does start to return they will behave differently and will be more financially conservative for quite some time to come. The fractional product will be a very good match for this new consumer behavior.

>As the market rebounds, a percentage of buyers will certainly find fractional products the product of choice...if it suits their family's needs... usage, size, location, price, etc... early buyers will be users and cautious as opposed to scavengers.

>… also believe there is be Fed policy and regulation that could severely impact our ability to do- have a business. The initial fix is on primary owner occupied housing - it appears.

>The depth of market that can pay cash - and not use the equity in another property is very limited ,,. and again that may want to use their cash for this purpose...

>I would think that the fractional product would be more appealing since buyers may be more reluctant to make a large investment in the whole unit purchase. On the other hand getting financing for fractions will be critical.

>We are probably going to emerge from this economic crisis slowly and in fits and starts. As the economy improves, people's confidence will gradually grow. They are more apt to re-enter markets in a cautious and piecemeal fashion given what they/we all have been through. (Use-)Value and utility are likely to be more important considerations in leisure real estate purchases than profit.

>All of the folks that have lost value in their second homes as well as those contemplating a second home purchase will think twice before stepping up to the plate for a whole ownership vacation home, they will all look at alternatives and will find the fractional industry attractive as their risk is minimized and they can continue their quality vacations with their families.

>I am clinging to the belief and hope that this malaise and bloodletting won't snuff out the dream of owning secondary real estate among boomers and Gen-Ys. People have short memories. . I want to believe that when the mushroom cloud dissipates, the roaches will emerge again from the cracks.

>Flight to value & downsizing are coming into vogue. No longer does conspicuous consumption sell. Products priced for status are likely to suffer. The planet can no longer afford the waste that 2nd home whole ownership connotes. Economy is no longer a demeaning word.

>The high-end market will be more challenging as job losses and downsizing has allowed companies to make cuts at the high end of market (in terms of compensation). My opinion is that some or many of these high-end positions will not be refilled in the short-run and thereby reduce the pool of eligible high-end buyers. Their return to the market will be more gradual than the middle market for whom timesharing will be affordable

>Further impacting this former high-end of the market will be that many will have suffered irreversible losses in their investment portfolios and real estate assets. This will further reduce the interest in second homes.

>As a result, value will become even more important to all buyers.

>In the next few years, to counter the inroads of fractional developers, I see timeshare developers offering point-based programs that have the attributes of fractional programs and products. Further, I see a move by fractional developers to offer points-based programs to become more competitive with the timeshare developers and increase the flexibility of the programs offered, thereby eliminating the need to sell fractions of a home (i.e. 1/12th, 1/10th, 1/8th, 1/4th, or other)

>…my assessment is that timesharing will be the first to experience growth and recovery. Next, will be the fractional market, driven by the desire of consumers for value and a reduced financial commitment as compared to whole ownership. Finally, whole ownership second homes will begin their recovery. Overall, the year ahead will be focused on rightsizing, stability, and reestablishing the financial conditions to support the industry. In 2010, I predict the recovery of the timeshare business as they begin to rebuild their marketing and sales organizations to align with an increased buyer base. In late 2010 and 2011, we’ll begin to see the recovery of the fractional market.

>First of all, through more education and public awareness! Secondly, as fear is replaced by more confidence and pent-up demand continues to build, I predict a surge in sales across the land. Thirdly, I see a burst in single family stand alone homes as brokers, buyers and sellers get more educated and exposed to this second home alternative.

So, what do you think? Good stuff in my opinion. Thanks for reading. Carl

2008-12-02T18:56:00.001-08:00

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!

2008-11-02T17:06:00.001-08:00

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.

2008-09-24T16:00:00.001-07:00

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!

2008-08-26T09:17:00.000-07:00

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.

2008-07-09T06:39:00.000-07:00

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…

2008-06-04T12:17:00.000-07:00

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!

2008-05-11T15:25:00.000-07:00

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!

2008-04-27T19:12:00.000-07:00

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.

2008-03-22T17:07:00.001-07:00

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.

2008-01-30T17:24:00.000-08:00

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!

2008-01-10T15:50:00.001-08:00

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.

2007-12-07T17:32:00.000-08:00

December 6th

The reach of fractions continues to surprise me. In the past week inquiries from a Manhattan area golf and residential community, a luxe hotel in Miami expanding to CO ski and Manhattan, a fancy golf course outside of Denver, the best located of all Santa Fe deals and a couple of left-fielders from Panama! Those are just the calls I got to return.

Mac MacEwan, our marketing guru, and I are advising a nifty project in Hyannis, Cape Cod. No, it's not the windmill farm that the Kennedys are so excited about, but a full service, amenity-rich resort hotel property expanding into fractions. It's great to work with, in this case, entrepreneurs, who 'get it' and are on the move.

A new destination spa, major water park, and beach house are being added to go along with the current amenities. The beach house, right on the beach, and not inexpensive to say the least brings this project to the ocean. A shuttle will take owners to Hyannis for shopping and to the private beaches [owners only] that surround Hyannis. As this is a fee product the owners are, well, owners. Only in Hyannis, where the Kenneyds preach for the little guy can there be private beaches! So says a California guy, were we are proud to share our beaches with any bum that comes by!

15 fractional condos will be built on top of hotel wings [259 room resort hotel] and on top of the destination spa building, two and three bedrooms, lock-offs, robust rental program and fully leveraged HOA budget with all hotel personnel and services right there. The one missing spot right now is the fractional experienced sales director for a February soft opening.

Mike Bosch, our advisory team leader, and I have finished a stint in Atlantic City for a luxury condo tower that chose not to sell the top floor units so it can have a fractional project. Atlantic City? Yup. Only $11 billion going into new development on top of the $11 billion already invested. As they have seen the regional [Indian] casinos take away a lot of the day business they are transforming themselves into more of a Vegas, destination location.

Morgan Stanley's gaming company has launched a 3900-room hotel and when it is 'all in' the tab will be $2.5 billion, not to mention the new MGM Grand and a deck of others. Atlantic City is a happening place. . A new, twice-a-day train from Penn Station will begin this summer.

There are some 50 fractional condos, 1/6th shares, eventually. All amenities are in and in the building, and of course Atlantic City is the big amenity. There's a need for a sales director here, too. The good news is that the developer is very experienced in PA and well-established in Atlantic City.

Star is launching its 'Star Sales Education Center' in January. It's purpose is to inculcate the Star-way of selling to our new sales directors and sales teams, and not loose our grasp on how we have grown up with the fractional selling business.

2007-11-14T08:43:00.000-08:00

Carl's November Blog

Notes from the Star front lines:

•At Snowbird, going into our second, selling season we are really set up. What a difference it makes - start-up one year to 'roll-out'' in year two. Great developers, great sales team and wonderful buyers!

•Vallarta Gardens in Puerta Vallarta just the opposite; the jumble of tasks for a start up getting into sales - a full time job for five, but handled expertly by Ron Frank and Ash Offermann from Star.

•Finishing the main selling season at Meriwether in Montana, owner occupancy of homes, adding operations to sales, and if initial owner users are indicators - the project's a winner.

•Success story or is it genetic? Josh, son of Sherman Potvin, sales exec extraordinary with Ritz and others, came to Meriwether as 'green 'pea' last December and this November he's the #1 salesperson and just escrowed a three-lot purchase in addition to all his fractional sales! We think it's our sales education program designed by Ron Frank. What's say, Sherman?

ULI's annual conference held last month in Vegas at the Venetian. My question: how big is too big for Vegas hotels…how many towers do there need to be and how long a trek is long to get to your room and back to the conference center? That aside - Recreational Development Council day focused on Lake Las Vegas a star-crossed development now 20 years in the making. From our discussions beyond Lake LV:

•The sub-prime crises and the availability of development money is affecting community developers not unexpectedly. The niche players with well located projects or the fractional guys continue to sell well. No 'crisis' in sight for them. As a couple of Council members said, 'We're in an emotional recession".

•Responses to developer's laments on slow moving inventory - get out there and sell the product! The order taking years are over! That's not news to those of us in the shared ownership business as we've always been advancing our shared products, and have sharply honed sales skills.

•Great presentation by Jim Taylor of Harrison Group on wealth in America and how that relates to buying vacation homes. Some of his points:
•Most of the wealth today has been accumulated in the past 15 years.
•The wealthy today have come from the middle class and retain many of
those values
•Discretionary income above $25k per year is the real, target for our
business, and families with discretionary income of over $125k and
up to $499k either own fractions at a good percentage and/or
plan to buy them at a higher rate than a wholly owned home. Over
$500k the percentages flip back to the fully owned home.
•Plumtv.com….if you have to ask…no, seriously a web site for selected,
mega wealthy resort areas that tells owners what's happening, so
they can plan before their arrival. And, in these towns when they do
arrive, in season, they take over the place. Think Nantucket, Sun
Valley, Aspen, etc.

•Auctions for failed fractional projects? I've seen two so far…in Santa Barbara and Big Bear CA. Both filed - do we call that 'failed squared'? Why, beats me, but common sense would say that the buying public is not yet aware enough to jump on these deals. Or, the stigma of a failed deal and how will owner services be provided and the HOA costs, etc?

2007-09-28T22:11:00.000-07:00

October 2007

Hawai'i Fractions:
Just back from the second, Ragatz/Pacific Rim/Trans Pacific Mortgage Hawaii seminar on fractions. Following their July seminar Pacific Rim and Trans Pacific are committed to educating the Hawaii market to fractions, so as the offerings grow they will grow with intelligent development, marketing and sales.

The one, very major impediment to a fast start to projects is the exemption for six interests or less, but use has to be for sixty consecutive days. So, sell two, fixed 60-day periods, sell two, rotating sixty-day periods, but sixty days it must be. Owners, however, can internally trade within those blocks of time, but that ability to trade can't be a material part of the offering. This probably rules out 70% of the easy market for sales.

Registration under the timeshare act is occurring with a few projects and more need to come along, so use plans can be designed commensurate with a broader market demand.

Dick Ragatz, as usual, gave a compressive update on the fractional business and it's explosive growth.

The One-Off House

Old Republic Mortgage has a database of some 40 one-off houses being offered as fractions on the 1/6 exemption basis. So that's 240 potential sales. They list 15 in escrow.

Dick Ragatz will have a pronouncement on this one-off product by or at his upcoming March conference. But in the meantime my take is that while some of these houses in the $10-14 million dollar category, so shares are being sold in the $2.5 to $3 million range; others are in the $85,000 range, and all in between; the systemic problem is post-sale management. Who's going to provide and at what price? Some buyers may be okay with standard property management services, but the upper-end will need the specialized and dedicated service that only a 'project' can offer. So, whadda 'ya do?

•Snowbird's Night in New York event was two weeks ago, and over 250 showed up in midtown on a weekday night! Real loyalty. Our sales team met with all reservation holders in that market, naturally, to secure their deals.

•Up at Meriwether Ranch Josh Potvin, Sherman's son, has emerged as our top salesperson for 2007. Congrats.

• Also at Meriwether Dede Bacon, fresh from her excellent results at Kirkwood, has been filling in, to meet mini vac demand, this fall. She has, naturally, snagged her share of sales. Thanks, Dede!

•At Vallarta Gardens, in PV, Ron Frank, Mac MacEwan and Ash Offermann are moving ahead to get that project structured for fractions, amenitized, marketed and set-up for sales. Fortunately, the project's location, on the Bay of Banderas, is exploding, so opportunies are now available for local lead generation programs.

•Star has sold the Nautical Inn, Lake Havasu, to its investor group on a pre-arranged purchase agreement. So, we are out of the muscle-boat business.
And, out of the condo-hotel and timeshare businesses, too.

When does Mel Grant's fractional exchange company open up?

2007-09-16T14:01:00.001-07:00

Rolling into the fall from a busy summer…at Mt. Superior Club - Snowbird, Dave Ruff, our new sales manager has made superb progress getting solid on our reservations, thereby getting to the next price levels and preparing for the “Snowbird Comes to Big Apple” event.

Mt. Superior also released a handful of whole units with one being snapped up at $3.3 million and two others in process.

Dave is backed up by Ash Offermann, and he in turn by the crack Snowbird resort team of Bob Bonar, Tom Jones and Jerry Giles. The NYC event has over 400 respondents, so far and that means the sales team will be very, very busy.

Trans-Pacific Bank is sponsoring a second Ragatz one-dayer on September 27th. in Honolulu. This follows their successful seminar in July. The invited guests here will be realtors. I have the opportunity to speak, again, on marketing and sales. It will be interesting to see how the real estate community responds, and to if they really want to make a business out of fractions in the Islands. Certainly, all indicators are that fractions are ’made’ for Hawaii.

Destination Clubs…the Wall Street Journal had an article last week about consolidation and self-regulation. I wonder what Steve Peterson, who heads the ARDA club regulatory group, will have to say about ‘their’ view on regulation vs. what the hurdles shared ownership industry has to jump over. Not one mention of Exclusive in the article, so congrats to them for keeping their head down.

Back from Croatia and their Dalmatian Coast on the Adriatic Sea. Just gorgeous water and weather, and great hiking on the islands. One RCI sign for a resort. Now that Croatia is on the other side of the war development money is pouring in from all over Europe, and vacation villas are everywhere, so fractions will follow at the appropriate time for the European market. It’s a long commute from the US.

August was my opportunity to join the ranks of ‘air service does not work’ in America team. All four segments from Kalispell to Providence and back to SFO either did not go or did not work to any timeframe that was expected. Hell, I got to Croatia faster than I got from Rhode Island to San Francisco!

2007-07-23T15:20:00.001-07:00

July 23, 2007

Just returned from Hawaii's first fractional seminar sponsored by Pacific Rim Bank, ResortQuest Hawaii and TransPacific Mortgage. Dick Ragatz put on the daylong program. Invited attendees numbered about 75 plus some local speakers notably market-maker lawyers Charlie Pear and Steve Lee.

Coming down from the Mainland in addition to Dick and Tracy Ragatz: Art Spaulding on legal issues, Steve Dering on marketing in general, Jim Beckham and myself on implementing marketing, sales and HOA budgeting, and Tom LaTour on hospitality management.

The 'big boys' have yet to move into fractions on the Islands. It's a matter of time. The business there is getting started, which as usual for a new product, involves small developments or 'one off' homes of which there are by some count 30 or 40 being offered in one from or another. Most of these will go nowhere.

Due to the convolutions of Hawaii real estate law and timeshare being managed by the consumer affairs department a 'stand-up' fractional project, registered as timeshare [as we do up here] needs to be in a transient or hotel zone.

The other option is to offer the fraction under the registration minimum, which means a 1/6th interest. To complicate the immediate future; the regulators apparently have attempted to better define what 60 day use means, and have come up, so it looks, with a 60 consecutive day stay. That's not workable for a fractional, so there's work being done to clear up the definition. Hawaii's a 'small town' when it comes to real estate development, and with the rough-shod past of timesharing there is a knee jerk reaction, by many, to any shared ownership product.

Due to whole unit pricing in the Islands fractions will become a big business - it's as natural as fractions in Aspen, Vail or other steroid-driven home priced areas.

For me it was a sweet homecoming of sorts. In the early 70s, when we aggregated the condo rental inventory and brought it to the lower 48 in association with United 'Airlines, we had offices on each, major island and Mainland offices in San Francisco, LA, Denver, Chicago and New York.

We sold that company to join a Hyatt subsidiary, and that resulted in the World's first fee timeshare at Brockway Springs, Lake Tahoe CA.

I've been back to Hawaii as a visitor since, naturally. If find it kind of amazing that there are not only business associates from that period still there, and how great to see them, but some of the same old haunts. Dinner at Huggos, over the water, in Kailua was and still is a treat.

Dick Ragatz will repeat next year.

2007-06-22T14:24:00.001-07:00

June 22, 2007

Star execs just completed their annual retreat, taking a breath after the ski season and before the summer season gets into full swing. It was held at my Montana home in the Flathead Valley. Rain for a day and a half and glorious sun for the other day and a half.

Again, we wondered at the myriad of 'deals' throughout the USA and Mexico. Last month I mentioned how Hawaii and Mexico seemed to come alive, and that has not abated.

Our Mike Bosch just completed an advisory assignment for two sites on the Black Sea in Russia. He reports that Moscow, other than being the most expensive city in the World now, is a very hip place with cell phones on every ear and the under 40 crowd crowded into very European-type bars and restaurants.

Anyone want to go over there to sell? Heck, after Pat Hanes went to Dubai…who knows?

On the move…
Dave Ruff has joined us as sales director for Mt. Superior Residence Club in Snowbird as Bill Orwig has flown the mountains for the Caribbean. Dave has worked with Ron Frank for a decade and is cut from the same mold.

Also on the move, from our Kirkwood sales team, Melisa Maxey has moved into a lead generation role for most of our projects. Suzanne Heron continues her lead generation work. Both are doing a superlative job.

And, back on the Snowbird front, Bill Raddinger, has joined our sales team bringing the team members to three.

Also, up at Meriwether Ranch Teri Walsh is now the GM for the HOAs. Teri, a butte native, wife to the Sheriff [no foolin' around up there!] came to us with a broad range of hotel management experiences.

And, Rebecca Ramsey is our sales administrator for Meriwether plus outdoor expert first class. Her husband makes those $3000 fishing rods we read about now and then.

www.residentialcrusieline.com is the place to go for a very exciting fractional product. Unlike other cruise ships, like The World, which is a retirement residence that floats, Magellan is a Vegas on the water with really mainstream pricing for fractions. Randy Jackson, the 'developer' is the sales program on the move. What to participate? Contact me.

2007-05-23T17:44:00.001-07:00

Fraction homes preceded jets, but jet shares got all the attention in the 90s as vacation-home fractions were defining themselves and picking up speed.

We now know that all types of property are being fractionalized: jewelry, cars, boats and the like.

So, it's not surprising that cruise ships are next. I spent an engaging afternoon with Randy Jackson, CEO of Residential Cruise Line and owner of the soon-to-be" keeled" Magellan a 860 foot, 15 deck vessel with 210 private residences sold both on a whole, fractional and club basis. Makes that other ship look like a shrimp!

The whole units go from $1.8 to over $7 million.

The fractions, for a month, range from $275,000 to $585,000 with annual fees from $9,500 to $20,000. Both sales and dues are certainly in the sweet spot for fractional products.

There's also a Club Membership for two weeks a year, floating unit, from $90k to $315k with dues from $4,000 to $10,000, which seems like pretty good deal. Matter of fact both the fractions and the clubs are both priced attractively.

www.residencecruiseline.com

Back to Randy…he's planned for some time to wed real estate, as he's a developer, to travel, cruising, aviation and high-styled amenity-action in one product. Sales so far, introductory level, are more fractions than whole units as one might expect, but, and here's the BUT, prospects are calling FOR the fractions! Sought good? Do those delicious words ring a bell?

A thought; is the fractional tipping point approaching? We've seen evidence over the past few months, not only with Magellan, but in many resort markets, that buyers are seeking out the product, and also those illusive real estate brokers may be coming around. Too good to be true? We'll see.

What part have the destination clubs played if the point is tipping? I don't know, but there is confusion out in the market place between the two products that may help both in the midterm period.

Lots of Hawaii calls recently….coming alive down there?

2007-05-14T20:46:00.000-07:00

Just back from ULI's Council meeting in Chicago, and the four Recreational Development flights.

I was joined by other Star execs: Ron Frank and Ash Offermann and key alliance-guy Chirs Tivey he of Gravity.

Many old friends of 25 years including Bob Miller or Marriott, Ed McMullen, Sr. of hisself, Ed Spears among them.

Bob Miller recounted, yet again, his total praise of Howard Nusbaum as CEO or ARDA, and the job he has done to bring ARDA into the very mainstream of real estate lobbying groups. And, that the timeshare homeowner's PAC now raises some $3.5 million a year from $2 and $3 voluntary contributions from owners. Bob thought it up and Lynn Weas has been the honcho to bring it from pennies to multi millions.

The glamour side of the Rec Development function: Toni Alexander, as usual, lookin' LA great and Bryadyn Criswell 7 months PG, and looking very good, too. I can’t say as much for the ‘guys’ but I will state this: after Bob Miller and Ed McMullen, Sr showed up tieless for both Wednesday PM and all day Friday I sure has heck am not wearing mine next year

I was lamenting that we had not figured out how to sell fractions on an ‘event basis’ vs. tempo sales. Well, Randal Bone just opened up my thoughts with his Toscana experiences in selling, and how they 'evented' their way through the project by selling use vs. investment. Good stuff. Back to the drawing board, Carl.

As usual,, Mary Borgia, Red Flight Chair did a masterful job of programming and keeping the flight on track including that e mail sent at 3:45AM on the bus schedule!

Mary constructed a wonderful day of interactivity between members of the Red Flight that included round tables and panel discussions covering the whole spectrum of resort development and finance.

The Red Flight has such talented members. It's always a humbling experience to attend and learn. Sure, I've got the fractional side covered, but being a specialist of sorts can sometimes lead me to have tunnel vision. I certainly come away with my eyes wide.

2007-04-19T05:45:00.001-07:00

April 18th Orlando

Attending the IMN conference on fractions and destination clubs. Some interesting stuff:

•Dick Ragatz says, from the podium, that hotel companies are looking to buy into the destination club market. Hummmm

•Those darn destination club founders/CEOs/managers are continuing to admit they were flying blind [my term] when it came to understanding member services. No one home there with all the PRC and other condo management experiences? Well, at least they are paying attention, now.

•On an allied note the subject of how to define levels of service continues to come up as well it should. At SRG we chose to 'loose' a management proposal to 8050 Mammoth, some years back, by stating in the first line of our proposal that there was no 5* in fractional management. Well, there isn't. And, as one of the destination club guys said today, giving him credit, it's not about what hotels do for their ratings [AAA or Mobile], but about what the owner/member expects. Kind of common sense, but it says it well.

•Was told that forbes.com is the largest business web site - period.

More on the destination club 'guys' as they say that they are very, very referral-centric. Makes sense, but the lengths they go to - to work with their members to refer might offer some tips to PRC developers.

•Suggested to Dick Ragatz that he 'up' his price-per-square-foot definition of a PRC to above $1000, as per his stats the average is now $1800.

•Our Bill Orwig is here leading a panel on PRC sales. Chris Tivey on the marketing panel, I was on the 101 and 'stump the CEO' panel.

*Next week heading to Sioux Falls to speak at an event - extending the boundaries of fractional marketing by Jim Farmer, talented developer of Tatanka Spirit in the Black Hills. Through a selected invitation list he has designed an evening presentation on the project with the hook to 'win' a Toyota J Cruiser! We'll follow up with results.

•Then to Montana to interview the top candidates for HOA and Ranch Manager for Meriwether Ranch as the project 'opens' in June. Side note: posted jobs at Western Montana University for wranglers, drivers, housekeepers etc and nary a response. Not interested in the work, underneath them, or other opportunities?

•SRG's marketing guru, Chris Tivey, starting up his own company, Gravity. We wish him well. He's around the corner from SRG - HQ in Scottsdale, and will continue to collaborate on our projects.

•The aforementioned Jim Farmer of Tatanka Spirit won four, count 'em 4, Gold Ardys last month for project collaterals and advertising. Congrats Jim!

•Mid-tier fractions - more. You might recall that I was on an ARDA panel of this topic, and a good one it was. No sooner than finished at ARDA I was thrust into mid-tier land; Nisswa MN a few hours NE of MSP at the Grand View Lodge a family run operation since the 30s. Grand View is a fabulous, full service resort on Gull Lake. Now, they are adding 20 cabins for fractions, quarters, for this historical weekend retreat location. More as this product comes to market as it will be hit.

•Pat Hanes in Dubai? Yup, so reports Cindy Shaklee of Fairmont Heritage. Pat is sales manager of the Heritage project 'over there'. Now, that's a commute from Bigfork MT to Dubai right Cherlye? Also, Cindy reports that Fairmont announcing fractional projects, it seems, on a monthly basis. Some growth curve.

2007-03-28T17:39:00.000-07:00

Just back from ARDA’s convention in Orlando…it just gets bigger including the exhibition hall. There seems no end to the expenses exhibitors will go to, or maybe ARDA is just catching up other trade groups. Is there really that much money in travel certs?

I ran into two ‘old timers’ and ARDA stalwarts; Bill Ingersoll and his partner Stu Bloch. We compared our first ARDA/ALDA meetings. Stu and I were 1972 and Bill 1971, but heck, his father founded the organization! Are we in a rut or what?

Of worthy note, ARDA was at the Dolphin/Swan two years ago, and one of the bartenders swears he remembers some of us. Now, that’s an indelible impression.

Generally, the rooms are lousy, the elevators great, the concierge lousy, the food good and unlike Vegas [the other end of the alternate year switch] one can get out into the air humid as it might be.

I presented on a fractional panel dealing with mid-tier product vs. the PRC we all talk about so much. Congrats to the usually uninspired meetings committee for a very interesting topic and to John Sweeney, chair of the panel, for really excellent topics and questions. Geeze, I had to really think about what to say, which ended up in a self-serving white paper on them.

I shared the panel with Jeff Yamaguchi, ex MGM and now Global Resorts, and Dean Kneider of Intrrawest two really thoughtful pros. Dick Ragatz prodded us on as John Sweeney had a family illness and could not attend at the last minute. I think we made some sense…at least I know Jeff and Dean did.

The non-PRCs are really a fertile market and no one seems to pay much attention to them. Dick Ragatz defines them as selling for under $ik per square foot. To that I add regional locations, service levels and HOA fees to fit the buyer with family income of $150k vs. the PRC of $300k and up. Heck, if PRC’s are now selling at an average of $1800 per square foot that leaves a lot of room underneath for other product.

I did one of these fractions in Sunriver OR back in 1988-89. It’s a neat market. At times I wonder who really needs all the flash and dash of the uber-PRC? Of course, I say this as SRG is going three of them in sales!

Godsend this week: 18” of Sierra snow so Kirkwood can get a last shot at two skiing and selling weeks. As I landed in Salt Lake this AM, on the way back from Orlando, it was snowing, so Snowbird will be ecstatic, too. Durango is out of this snow pattern, and their season is all but over…a sub-par year for snow. Building continues at a great pace at Meriwether Ranch in Montana.

Next week I’ll be up in Minnesota, north of MSP, so if there’s a ‘burrr’ left I may get it.

2007-03-10T10:39:00.000-08:00

Saturday, March 10, 2007

Big week: Ragatz Fractional Conference + Mt Superior Club, Snowbird UT.

The 7th Ragatz conference…tension between the North Course [RCI] guys who were shut out as they used to own Ragatz, and open arms to Interval International, who used to be shut out as competitive to RCI. The guard changes.

That said; sell out crowd of over 500 attendees. Almost too big to work the crowd effectively. Lots of new faces - where do they all come from?

Big topic for me was all the mini developers who are planning to do homes, one -off to three to colonies of them. Must have been 15 I met or heard ask questions. Probably many more.

Unanswered: how to manage them and will buyers buy with so few interests and homes?

Also, some statements of, 'forget the intensive service' out buyers just want a second home. Interesting if that comes true with sales?

The Flags keep expanding. Ritz, Fairmont, St. Regis and Intrawest can't get product to market fast enough. They are real believers.

The role of the independent? Unlimited with superb location and smaller projects that the Flags can't afford to develop.

A semi surprise to me on Ragatz's survey results on price per square foot for 3 beds at $1,516 and 4 beds at $1,803. Does this include Little Nel in Aspen? Did not ask. But, kinda puts perspective to our $2000 per square at Mt. Superior Club at Snowbird at being 'so high'

Later in the week at Snowbird. We had a buyer come in a take 'one of each' comprised of a 3 bed, 4 bed both 8ths and a 1/4th 3 bed and ¼ 4 bed each at over $1,3 million. That's the kind of buyer we like!.

Back to Ragatz, good to see some ULI types there bridging the gap between the large mixed use developers and the single site fractional developers.

The business is hot out there!

2007-02-10T17:55:00.000-08:00

This past week SRG brought to HQ the sales managers for all the fractional projects it is selling: Mt. Superior Residence Club, Snowbird UT, Expedition Lodge, Kirkwood CA, Meriwether Ranch, Melrose MT and Purgatory Lodge/The Pinnacles, Durango CO,

The daylong training meeting headlined Bill Orwig; the most experienced fractional sales exec in the World. Beginning with the Deer Valley Club up through and to the Mt. Superior Residence Club at Snowbird, Bill represents the
The whole history of PRCs and how they are best presented and sold.

Needless to say this was a vastly rewarding experience. Now, the site sales figures need to reflect the investment in taking a day during the selling season to hone skills.

I believe I have failed to spotlight the fact that Ron Frank, RRP joined SRG as its Corporate Vice President of Sales in December. With over 25 years in the shared ownership business Ron has made effective selling his life’s work. SRG is very fortunate to have Ron come aboard after completing stints in Vancouver BC, Breckenridge and with Sunterra.

SRG has always had good sales skills within its core team, but the addition of Ron keeps us head and shoulders above our competition, and most importantly delivers sales to the projects in which we are involved.

Melding marketing to sales in a ski resort has been an extraordinary challenge to SRG these past months as three of the projects we are marketing and selling are in ski locations. The time sensitivity of the diminishing days in a ski season as reflected in the production of project materials and site sales tools cannot be ignored. Honestly, we have been late in our assignments are now racing to catch up, so our sales staffs have the leads in hand to make their sales goals.

This key area of project development has not been focused on enough at industry meetings. Behind all the ‘happy talk’ is reality; the reality that when the lifts close new winter customers will not come for another eight months.

Our team is strong and dedicated to our assignments and to success. Our legs and lungs are burning, but we will finish strong.

Thanks for reading….

2007-01-12T20:02:00.000-08:00

It's January 12th, and I'm in New York City at my Manhattan Club. We began searching for the right building in 1992 and got into full planning in 1995 and pre sales in 1996. Sold out now of the original 242 suites. Then last year additional and more luxury suites were built in the penthouse, which were sold to the original owners. Now on the sales floor luxury studios are being built. Talk about maximizing a building as the sales demand has been so strong over these years.

Kudos go to Scott Lager and his development team to keep the inventory in synch with sales over the past decade. Also, more kudos go the property management team of Josh Wirshba, Sal Real and Vince Caster, and their departmental managers, for running a first class property at 90% occupancy with daily use. That's a real challenge, and they've done a superior job at their jobs. Josh began as head of HR at the hotel before the conversion, and Sal was an assistant GM of the hotel.

I've received many notes of support to my recent release on the continued dangers of 'guaranteed use' with the destination clubs and hybrid fractional projects. There is no reality to 'guaranteed use' and all buyers should beware of any company offering that.

We issued another release yesterday in a Q and A format to assist buyers in assessing a purchase of a fractional interest.

I'm seeing more innovations in use plans offering some fixed use based on the highly successful Old Greenwood model. Bill Fiveash, and his team, was very, very original in that use plan, and they deserve credit to advance the whole area of use plans. We've always said that the use plan, or the reservation plan, is the central focus of the fractional product. Much overlooked and mis-understood, the correct use plan goes a long way to ensure success. The opposite is also true.

Initial response to reservations at Snowbird's Mt. Superior Club have been excellent in the $2000 per square foot band.

Don't forget the Ragatz Conference coming up in March.

2006-12-25T18:02:00.000-08:00

Greetings All,

Do you have a Google alert for 'fractions'? Once a day links to articles and blogs arrives from them.

What these daily reports demonstrate is the rapid growth of the fractions business in the usual and some quite unusual locations. I continue to wonder how many of these projects will find their way to an effective reservations plan, a realistic budget and most importantly to a very realistic view on the service level the project is to offer its owners.

Question: can a fractional project ever offer five star service levels as defined by either Mobile or AAA? I think not? Your opinion?

I look back at the Deer Valley Club, first in the world in its class, and then to our Northstar Club, now up and running for over five years and observe what owners value, what they are wiling to pay for - forget what the developer thought they would pay for - and what service levels are really offered post sell out. Comments and Observations?

Last week I spent a delightful few hours in the Napa wine country at Carneros Inn and their Orchards at Carneros Inn a 17-unit luxury fractional project a-building and ready for delivery this summer. Project exec. Phil Carville is an old pal from the Squaw Valley timesharing days. He has engineered an excellent development to complete the master plan of this mixed-use property: luxury hotel, terrific spa, three restaurants, etc. The hotel and fractions are managed by Plump Jack, who has a winery in the Napa Valley, restaurant in San Francisco and hotel in Squaw Valley -- no connection to Phil's earlier deal there.

Reed Anderson, late of Hemingways in Ketchum Idaho, is project sales manager. He's a talent. His spouse, Ann, is equally excellent in the hospitality set up side of the business. She's just finished a stint at the Rancho Santa Fe project.

How's the Registry Collection doing? I hear some talk of another independent exchange coming on line. Is it needed?

Pencil in the Ragatz Conference March 5-7 in San Francisco.

Here's to a grand 2007 for the business and for all of us!

2006-12-06T06:32:00.000-08:00

As the winter selling season kicks off; our Star projects are under full sales. I'd like to commend our sales personnel for the excellent job I know they will do in the coming months. All these are fractional or private residence club products.

At the The Pinnacle, Purgatory Lodge, Durango CO, Michael Davis leads the team with both PRC and fractional products.

Expedition Lodge at Kirkwood Mountain Resort CA, Dede Bacon, Melisa Maxey and Gwen Niccoli are the sales pros.

For the Mt. Superior Residence Club, Snowbird Ski & Summer Resort UT, Bill Orwig and Peggy Wright will set new per square foot sales levels for the Rockies.

Meriwether Ranch, for the Meriwether Land & Cattle Company MT, Ron Frank, Jami Duffy and Josh Potvin are fortunate to have the Big Hole River in their back pocket.

Additionally, we welcome Bill Orwig as our sales director at Snowbird. Bill's one of the true pros in the business going back to the very start of the PRC business.

Like many companies Star uses the survey tool to generate prospects. At Snowbird and Freestone in WA [more about this property in later blogs] we have received record responses [for us at least] from those interested in buying fractions.

Jim Parker, another real sales pro, uses the acronym "PMS" with customers.
New to me, but probably old hat to others, it stands for, no, not that! but:
photos, memories and souvenirs from a vacation.

Another nice twist: "The Ritz Carlton of Private Residence Clubs" seen in their recent print ads.

2006-11-18T15:02:00.000-08:00

November 18th...

"Incremental becomes core"

When marketing a fractional project the added advantage is to have a project that controls the flow of customers like Snowbird, Purgatory/Durango and Kirkwood/Lake Tahoe. These developers own their ski mountain, all or much of the housing and food, beverage and retail operations, so their databases are the primary customers for the fractional purchase. What a great position to be in!

Well, what up if this is not the case. Our experience has shown that in way too many cases the marketing plan shotguns so broadly that it is ineffective.

Ron Frank, marketing and sales guru, coined the opening line. Incremental pockets of interest, small targets collectively become the core and primary market and the foundation of the overall marketing plan.

We see this at Meriwether Ranch in Montana, and building at Saguaro Ranch in Tucson. It takes discipline and innovation to find the small markets and aggregate them to make a major market to sell the fractions at a brisk pace.

Tatanka Spirit, Black Hills, has opened up their first fractional home. Being an owner at Tatanka I plan to use the home in January for a quick get-a- way. Jim Farmer, developer, has done a magnificent job with the FF&E including original ironwork and art. I can taste the juicy Buffalo steak right now!

2006-11-04T11:59:00.000-08:00

November now. What a year it’s been so far!

The fractional world has exploded with new projects in all parts of North America. Destination clubs have taken a real ‘hit’ with the ‘bk’ filing of Private Retreats, nee, nee, nee.

Tom Fulton, ex Private Retreats and now Ephinany Club is still offering guaranteed access. Learned his lesson? I guess not.

Dave Bansmer strikes at Sea Island, where he headed after getting the Registry Collection back on track. They are offering a membership with use nights for a mere $875,000, founder’s pricing, with a 100% buyback guarantee. They can do it, and who would ever back out of Sea Island and risk loosing their reputation for being elite down there in Georgia?

Birth of a true 5* resort taking place in NW Tucson at Saguaro Ranch. Talk about ‘doing it right’ with the infrastructure, the sites, and now the village core including condo hotel casitas that will be gorgeous and expensive….how does $4-5 million sound?

Snowbird, Mt. Superior Residence Club, the survey returns are flooding in, huge response numbers and very, very favorable for the $2000 per foot sales price for the three and four bedroom condos.

Why is it so hard to get sales reporting systems straight? At almost every project we have it seems that there are kinks to getting fractions presented and closed in a straightforward manner. There are good reasons, sure, but ‘clear the decks’ has been our task over and over again as other realize that fractions are not an add-on product that the general sales line can sell as an after [or fore] thought.

Star’s sales manager ‘Sales Management 403’ will debut in December, with all our manages coming for this ‘senior’ level course before going on to a grad level program in 07.

2006-10-20T14:25:00.000-07:00

It's Friday, October 20th, and I've just returned from the ULI Convention in Denver. For all ARDA folk - this is where the action takes place outside of timesharing. And, I'm including fractional products in that statement. The resort component of the 32,000 membership of ULI is in their Recreational Development Councils. As I've written before, among these resort developers, there is significant [make that in caps!] interest in the fractional product. Many have projects under way, others in planning and still others learning about fractions and all their derivatives.

I believe that major fractional players, who are not in ULI, need to be there.

I was also reminded that fractional interests are still a rather new product, and there has been and still is a lot of trial and error in the use plans that are designed and reciprocity programs. There will be some failures.

As seems common there was some confusion, but less this year, about fractions and non-equity clubs. Are they the same? No! Can the term 'private residence club' be used for a non-equity club? Not in our universe! One of the breakout groups had a panel with Exclusive and a former exec from the failed Private Retreats/A&K/Tanner & Haley. Until these clubs accept some form of regulation and ensure for their members that the dwellings they purchase for them are debt free the major risk continues.

On the flip side - hey, great for we fractional developers standing there with deed in hand!

At this meeting Star Resorts was 'fully loaded' with Chris Tivey, Rich Feldheim and Christine Zahedi all there and participating in the resort groups.

My view of an explosion of fractional programs from very established developers should give rich fodder for Dick Ragatz and his next conference all the while leaving ARDA pretty much out in the cold due to their requirement that all speakers be members of ARDA. At this juncture most all fractional practitioners see no value in ARDA membership, hence, the panels dealing with fractions are only half-loaded. Wasn't there an expression....the chicken or the...?

What's lacking for fractions to continue straight up without hitches?

#1. Separation from the non-equity folk.
#2. Detailed programs to understand the nuances of the business of which there
are a multitude.
#3. Experienced talent in product formation, marketing & sales
#4. Exchange options
#5. Media support so buyers will understand that fractions are the 'smart choice'

2006-10-03T18:18:00.000-07:00

How Thin is the Fractional Marketplace?

That's 'thin' on talent on the side of those of us 'in the business'.

Star just finished a two-day planning session, and we got talking about how to gauge ourselves, best practices, etc. We came to the conclusion that there are very, very few companies that focus exclusively on luxury fractions, and of that few, few are really good at it.

So, our goal to 'continue to be the best' in our universe, upon analysis, became a limiting goal rather than an inspiring goal. We have set our sites substantially above any other company in the business to make sure we deliver the goods for our projects and those of our developer clients.

What's that say about the fractions business? It's a partial indicator of a new niche business. But, it's also a statement that many developers assume they can successfully expand their offerings to include fractions and use their same sales staff to handle the addition.

Not so in our experience, but time will tell.

The timeshare selling model is well known, like it or not. The fractional sales model is being designed and developed each and every day. Those in the business for a long time, like Star, have learned the best performing lessons, and we continue to refine our capabilities to stay on point.

We recently promoted Ashley Offermann to VP of Project Management. His portfolio includes Purgatory Lodge, Durango CO and Mt. Superior Residence Club, Snowbird UT.

Also, joining Star is Chris Cannon designer and marketer of the first rank. He's worked with us for a number of years, but is now full time. We are handling multi million dollars in marketing budgets and he leads that effort along with our Chris Tivey who continues his duties as President and COO.

Lastly, Gary Bixler has joined us as VP Project Management with the Expedition Lodge, Kirkwood CA and Saguaro Ranch, Tucson AZ has his portfolio.

I continue to have Meriwether Ranch and all the new business development.

2006-09-13T18:12:00.000-07:00

Mac MacEwan, marketing guru, recalled that at the Ragatz conference last Spring it was said that the next evolvement with fractions would be vertical market projects focusing in on one, particular activity.

As mentioned in an earlier blog Star Resorts is fortunate to be working with The Meriwether Ranch located on the famous Big Hole River in Western Montana. This is a fishing resort first, with a host of other activities available including use of a compnay owned guest ranch up in the Pioneer Mountains at exclusive rates.

A few months ago I published, borrowing from our Chris Tivey's speech at Ragatz, the 10 elements for a successful fractional project. Well, very few apply to a vertical resort to use that term

So, here are my top eleven -- 11 -- elements for a successful vertical resort property with apoligies to Chris:

*Located in a superb area for the primary activity
*The best location within that area
*Credible developer
*Goods and services available within reasonable drive
*Very expensive property for sale in the surrounding area
*A long, major season that fits the primary activity
*First to market or close to it
*Access to past and repeat visitors
*Access via a commercial airport or jet approved private strip
*Great history or storytelling opportunities
#11 a use plan designed to match the buyer's use of the Club probably the most important of them all!

So, when the owner of Meriwether Ranch told me that my top ten list did not apply; well I hope this one does!

2006-09-06T20:53:00.000-07:00

The beat continues...more and more fractional projects being discussed, planned, financed and launched. The talking stage, as previously reported, is huge. Projects are coming out of the woodwork many with little or no skilled folk behind them.

At Star we still maintain that fractions are the hardest sell we have ever accomplished. There are so many pitfalls for the inexperienced developer or salesperson from the product to the use plan to how best to present the reservations cycle and the budget.

We are launching sales in 5 projects this fall: Durango, Kirkwood, Tucson, Snowbird and Dillon Montana.

Without Salesforce's web based lead tracking system we'd be in a deep hole. We have adapted the 'off-the-shelf' program to our specific needs.

Joining Star is Chris Cannon making our own dynamic duo with Chris Tivey. Tivs has always beenn the best in the business, and now he has a mirror image to not double efficiency, but to cube it.

2006-08-06T15:04:00.000-07:00

Well, the other shoe hit the deck with Tanner & Haley nee Private Retreats. It was common knowledge that they were headed that way. The Wall Street Journal has had two pieces on them. Glad Star is not in that business! This is, however, a wonderful opportunity for deeded fractionals to pipe up and let their universe know that fractions are the way to go along with the exchange option via Registry Collection nee World's Finest Resorts.

The opportunists of the world never cease to make it difficult for the rest of us. From the get-go Private Retreats was a flawed model shamelessly promoted to the wealthy.

Fractions continue to boom!

At Star we just couldn't be busier with Snowbird, Durango, Kirkwood, the Black Hills, Tucson, Carmel Valley and a host of new projects that may come our way in the Florida Keys, out in the Hamptons, Southern Montana Manhattan and others. We continue to see very qualified developers enter the business with well-conceived business plans. It's a joy to work with those who know their business!

2006-06-29T12:43:00.000-07:00

Yesterday, June 27th was a bittersweet day: Dave Ellsworth’s memorial service. As befitting Dave’s life it seemed that most of the hundreds of attendees had flown into San Francisco to honor Dave. Not make light of a terrible event, but Dave’s closet has to be packed full of frequent traveler miles. Reports of Puerto Vallarta for lunch, Hawaii for breakfast, DC for dinner and then the red eye back.

Guests came from Anchorage, Honolulu, Washington DC, and lots from LA, where Dave used to live, Phoenix and all over the USA. I’m glad I didn’t have meetings this morning with all who took red eyes to get back on schedule. Delta, American and United reported the Dave fan club took most of their first class seats!

I guess about a quarter of those there were from our business. Befitting a multi-dimensional guy, as was Dave, he had friends from many cross sections of life. His son and daughter, and their spouses, his life partner and other family members got through the service focusing on what Dave/Dad had given them as much as how they were going to miss him. But, the loss was still there. The great portrait size photo of Dave in font of Gleneagles and the last Power Point slide of Dave sitting in a chair, on the beach, looking right at the camera with that ‘I love life’ grin on his face.

The common theme of the afternoon: Dave thought big, lived big, covered big geography in his business and was singular in his dedication to his family. For certain he had a big heart.

2006-06-19T18:05:00.000-07:00

June 18th was a very sad day for the resort development business and for all the friends of Dave Ellsworth, who had a massive heart attack in Palm Springs and passed away.

What a guy!

I first met Dave as board members of American Resort in the early 80s. He was a top flight lawyer in LA with a specialty in Mexico about, well, 15 years ahead of his time. But, he helped to build the Mexican resort industry through his legal work, later his financing work and development and marketing skills.

Dave's home was perched atop 999 Green Street on San Francisco's Russian Hill. He moved in and I out, ,just half a block away. We stayed in contact, off and on, over the years until three years ago, when he gave me the gift of my business life by sponsoring me into ULI [Urban Land Institute] and onto one of their Recreational Development Councils.

We talked last Monday, the 12th about a deal in Montana. As usual Dave's vision was broad and vivid, his facts sound and he was in the 'do' mode.

His son, Brett, and son in law, Kevin Roberts, are both top flight businessmen, and I know they will be successful in carrying forth Dave's life work.

2006-06-04T13:43:00.000-07:00

June 4th

Star has signed to advise, market and sell villa-hotel units and then fractions at a simply georgeous resort in Tucson, Suguaro Ranch [saguaroranch.net] The developer, Stephen Phinny, has designed a masterpiece of a property.

So, I just finished answering the 10 top questions in the fertile mind of Scott Burlingame regarding the future of fractions. I had lots of stuff to give him as the business is booming. But, I've said that before.

A wonderful trip to Idaho on Thursday to see 600 acres across Cascade Lake [McCall area] from Tamarack the hot, new ski and summer resort. The property will be mixed use leading with lakefront fractional homes and the unual other mix for 500 total units. What a great area!

Mac MacEwan, marketer par excellence, has moved to Boise, so we made the ride together, and discussed ways Star and Mac can move forward our mutual goals.

2006-05-27T14:55:00.000-07:00

Saturday, May 27th

Got back into TripAdvisor.com, a site that gives user ratings for rental properties. So, decided to look up projects I've done or been involved in. Is this a self serving statement, but they all rated either four of five or five of five. Hummm. Well, we knew we wanted quality, and at least through this site it's being deliverd. For the shared ownership projects the reviews are from the sales period, when rentals occurred, or after sales if there is a rental program.

So, Manhattan Club scored big time, as did Northstar Club and Snowmass Club as well as Cristi Club. And, a-way back in 1974 we did Vail run, and lo and behold, 4 of 5 today! That is a suprise.

Our Avenue Plaze in New Orleans a kinda suprise 4 or 5. I thought it would average out at a 3.5 to 4.0. So much for what I know.

Not listed were Brockway Springs, the 1st timeshare in the World that gave a deed, Casa de la Playa in LaJolla, Cliff Club at Snowbird, Schooner Landing in OR, Kingsbury Crossing in NV and the Cottages at National, Pinehurst.

2006-05-24T14:32:00.000-07:00

2006-05-22T18:36:00.000-07:00

It's May 22nd rushing to June and the summer. I've been back from Ragatz for a few days now; time to reflect on the bonanza of deals there. There, and at ULI and those coming to Star via our reputation. This is not the feast or famine of the past. It's the wave that been building for some time.

We are now working with four sets of lawyers on different deals for Robles del Rio, Saguaro, Durando/Kirkwood and Tatanka Spirit. All involve the usual CC&Rs, but more importantly the use plans/reservation plans that really make the project go. From the timeshare days through to PRCs we have always been advocates of the proper use plan.

That does not mean the simple use plan, but the right use plan for the prospective owners at a project.

More on this later.

2006-05-20T18:11:00.000-07:00

Saturday, May 20th, returned from the Fractional Conference in San Diego...last Ragatz/RCI meeting; next year they'll compete against each other. No love lost?

Georgi Bohrod had a great party Thursday night complete with lotsa pals. The quality of deals there was amazing to me. Last year the deals were speculative, no money, no zoning, no permits and in most cases no sense. This week they were ready to go in almost all elements. What a statement for the business!

The Star team saw potential projects from the SoCal coast to the Florida Keys, up to the Hamptons and out to Idaho with a stop at Snowbird, UT. I have an appetite to move forward, but our execution "guys", Chris, Christine and Ron, have the hard slogging to make them work. So, we’ll see which we can do.

. How good to see the lawyers four: Art Spaulding and Scott Turner, Steve Peterson and Roger Burk all in the flesh and not on the phone. As usual wonderful to see Annette Ragatz and Marcia Fabian the dynamic focus group pair. John Sweeney charges on as usual, amazing fellow. Ed, Sr. equally, and the same for Dick Bass squared! Lani from Ritz/Marriott is probably the best presenter and savvy big company exec I know, save for Big Bob of course. Howard N. continues to 'rap' the real stuff for ARDA.

Then, Dick Ragatz his self who has always looked down right ‘power exec’ in his navy blue suit, hosted his biggest clam bake since exception. I’m with him next year; staking out my allegiances.

Most vivid message to me: resident poet Jamie Klein from St Regis, for comparison of a timeshare sale to a fractional sale; the former took 90 minutes and the latter 250,000 minutes! No far off.

Plane ride back to Oakland was the cherry on the top with Rick Hulbert and Len Silverfine…two fine gents.

So, as many speakers used the term ‘from soup to nuts’ I have always thought who wants nuts for desert, so went to Google:

“Meaning: the whole thing from beginning to end
Origin: For centuries, any foods served at the beginning or end of a meal stood for the entire thing: the start and finish and everything in between. This expression was "from eggs to apples" and "from pottage to cheese." In the United States in the middle of the 20th century, the expression developed into "from soup to nuts." At many meals, soup is often the first course and a dessert with nuts is sometimes the last. The expression does not have to refer to only to meals, however. It could be the selection of goods for sale or classes offered.”

2006-05-15T09:47:00.000-07:00

Life is Berry Berry Good
I've just been a part of the Commencement at my alma mater, the University of Idaho. Lots of changes since graduation in the '60s...naturally. Among the most clearly delineated was the call, by all the spakers in various ways, for community involvement as the cornerstone of our democracy. One speaker quoted lyrics from a song that went something like: "when the music plays you can it it out or you can dance."
Idaho is adding service learning into its curriculum, so students get a taste of the outside world while taking their classes. The "me-too" attitudes that seem so prevalent at times in our society can be revived to a "with you" attitude. The understanding that one gets more than they give is a valuable lesson to learn early on.
ARDA, the trade group for divided interested real estate, took years to get into the outreach business long after many projects had done so themselves. It took Christel DeHaan, after selling RCI to Cendant, to really move ARDA forward into community thinking with her charity, Christel House.
I spent last week at ULI's Spring Council meetings, rubbing shoulders with the "big guys" in our industry.
Urban Land Institute has a long tradition of giving back. Maybe urban developers began out of self-interest, but regardless...the concept is fully imbedded with ULI. Good for them!

2006-05-15T09:29:00.000-07:00

Life is Berry Berry Good: May 2006The Star Resort Group Newsletter will be out shortly, with details about our May 8 move to our new headquarter's location in Old Town,Scottsdale, on Craftsman Court, which we purchased a few months ago. Our other tenant is the Scottsdale Chamber of Commerce. Old Town is in a renaissance with major, mixed-use retail and residential projects going up on all sides.

2006-05-15T09:23:00.000-07:00

Life is Berry Berry Good
Lake Havasu, AZ, home of the London Bridge, with its beginning as a land development deal, the first project to have an air force to fly in bueyrs and put them under the ether. Now, 40 years later: lo and behold it's a city of 50,000 and the #1 draw for the muscle boat crowd from Southern California and Arizona. I was there on Saturday May 6th for Star's condo hotel sales event coverting one of the hotel buidlings. With the background of the deep-throated roar of the power boats leaving our marina we sold out the building to our timeshareowners.

The next building will be sold to past guests of the Nautical Inn. Star owns the hotel and timeshare complex, golf coures, food and beverage operations, etc. Naurtical has the prime location on all of Lake Havasu. Our Rich Feldheim, Ron Taskey and Christine Zahedi managed the event along with Vern Porter, who has recently transferred from our Northstar at Tahoe fractional project sold out four years ago.

2006-05-06T15:53:00.000-07:00

Life is Berry Berry Good
Our world is full of concentric circles and that holds true with the fractions business.

The Black Hills of South Dakota..who'da thought that next to Mt. Rushmore, where the buffalo roam, that fractional resort real estate would flourish. We're proving that right now. The folks there say the Black Hills are the highest mountains between the Pyranees (separating Spain and France) and the Rockie. That's a divided interest statement, a marketing statement. Sell the condo once and you say Alps to the Rockies. Divide up the condo (hey, that's a marketing idea!) and you've got fractions.

When I was in Patagonia last January, hiking the Andes, we got an offer to see a proposed fractional project in that general venue. Too far away from the markets, so we did not go and check it out; but it's proof that it is not hard to bump into fractions these days.

2006-05-04T12:03:00.000-07:00