I just returned from Urban Land Institute's annual meeting and the semiannual meeting of the Recreational Development Council. Here's some of the news:
No one is enjoying robust sales, though a few, like Martis Camp in the Sierra Nevada, have seen good sales in 2011.
The bottom fishing is still going on with prices in Vail; some are even 30+% below 'back then'. Second-tier resort properties are discounted higher. The worst possible holding is entitled land without improvements. It's currently priced as the agriculture land it once was.
Buyers of resort projects, the big lot sales deals, have mainly been the very wealthy who are buying and holding. Interestingly, the buys, both personal and institutional, were at 20-30% of debt in 2010; in 2011, they are lower, like 10-15%. So, the sellers are realizing how bleak the landscape is. And some of the institutions are facing reality.
Consumer research [presented by Peter Yesawich of Y Partnership and Brooke Warrick of American Lives] validates that permanent changes have occurred with the wealthy post September 2008. There is a greater inward focus versus conspicuous showing off, and more emphasis on family. For sure, the youngest boomers and the Gen Xers take their kids everywhere, as we all have seen. And, as we know, everyone is placing more emphasis on value.
So, the wealthy are cutting back on the conspicuous areas, but not cutting out their interest in those things that benefit their family. Then, there's the multi-generational movement that continues to pick up speed.
Our workweeks have increased to 48 hours, the highest in the world for tier-one economies. And work is not ever left behind. We in the business need to provide the facilities to efficiently stay in touch. Then, there's personalization that we all are getting more and more used to. We want everything our way, and can usually get it. What does that say for vacation homes, use plans and amenities and activities?
Walking and bike paths— the least costly amenity (or no cost, such as in Whitefish, where the city has supplied them)—are among the most valuable amenities for reasons of health and sharing time. The happiest folk are those who have human interaction for at least six hours a day.
Peter continues to be a major fan of shared ownership as fitting all the trends of vacationing Americans. One reason is that buyers of resort property do not believe in appreciation anymore, so the shared product, bought for use, makes the most sense. Let it roll, Peter!
Tuesday, November 01, 2011
Friday, July 01, 2011
Catching up with Carl - July/August 2011
Friends of Resort Development and Shared Ownership,
In past newsletters, I've pretty much passed along what we are doing
and seeing here at Star Resort Group. I've been reminded by our Scott
Tracy that the resort world does not center about Star, and it may be
more meaningful for we at Star to ask YOU for your thoughts and
opinions.
So, here goes:
and will report in August when the dust settles. In the meantime, our
friend Paul Nabor of Fractional Exchange reports that he now has
90+ members from Austria Haus in Vail. Way to go.
While still a fan of Registry Collection, the 'side' markets do serve a
purpose for some owners, and gives the developer a real and tangible
benefit.
From the Carolinas, fractional professional Hart Rist asks what types
of advanced technologies marketing and sales are using. Are apps on
smart phones and the like making relationship selling easier? What
are you doing in this area?
I welcome you to take a few minutes to send me your thoughts.
In past newsletters, I've pretty much passed along what we are doing
and seeing here at Star Resort Group. I've been reminded by our Scott
Tracy that the resort world does not center about Star, and it may be
more meaningful for we at Star to ask YOU for your thoughts and
opinions.
So, here goes:
- What do you see happening with the market today?
- Are new projects starting, old ones being revitalized?
- Is there money out there?
- Who is providing the financing?
- What's the market telling you? Are they ready to buy?
- What are your hopes and aspirations for the rest of 2011?
- What are you looking for or need? If you have money behind you, what are you looking for? Nothing works like networking to fine opportunities, and we may know of just the thing you are seeking. Let us know what you have—or want—and perhaps we can be the clearinghouse?
and will report in August when the dust settles. In the meantime, our
friend Paul Nabor of Fractional Exchange reports that he now has
90+ members from Austria Haus in Vail. Way to go.
While still a fan of Registry Collection, the 'side' markets do serve a
purpose for some owners, and gives the developer a real and tangible
benefit.
From the Carolinas, fractional professional Hart Rist asks what types
of advanced technologies marketing and sales are using. Are apps on
smart phones and the like making relationship selling easier? What
are you doing in this area?
I welcome you to take a few minutes to send me your thoughts.
Sunday, May 01, 2011
Catching up with Carl - May 2011
At Star Resort Group, what do we see for the balance of 2011?
Looking back is not particularly encouraging: After the September 2008 financial collapse, we knew that business would be slow for a period of time. But did we expect it to be dormant this long? No. Consumer confidence is still in the dumper. We are worried about hyperinflation. Does the White House economic team know what they are doing? How do we get out from under the huge debt burden? What about entitlements?
We aren’t Americans for nothing! For amid all this uncertainty, our phones are ringing… not exactly off the hook, but ringing none-the-less. That has not happened for some time!
Who is calling? Developers, those wonderful folk who are either eternally optimistic or incredibly level headed. Projects in Wisconsin, Florida, Europe, Maine and upper New York are all coming alive.
Closer to home—at our own Residence Club at Whitefish Lake—we are ramping up our marketing to make a major push this summer to sell out our existing inventory and bring on new product. Drinking our own Kool-Aid? Yes we are.
Based on a solid marketing plan by our senior marketing guru Chris Cannon and aided by the visitor analysis created by Corey Ryan, we are dedicated to breaking open the sales log jam and get back into real business!
On that note, the 2010 Ragatz Study has just been released. It’s a bleak report, but we believe that it will stand as the industry’s nadir. So read it now; in eight months, we will be able to look back with pride at how far we’ve come since the dark days of 2009–10.
Here at Star we are off and running!
Looking back is not particularly encouraging: After the September 2008 financial collapse, we knew that business would be slow for a period of time. But did we expect it to be dormant this long? No. Consumer confidence is still in the dumper. We are worried about hyperinflation. Does the White House economic team know what they are doing? How do we get out from under the huge debt burden? What about entitlements?
We aren’t Americans for nothing! For amid all this uncertainty, our phones are ringing… not exactly off the hook, but ringing none-the-less. That has not happened for some time!
Who is calling? Developers, those wonderful folk who are either eternally optimistic or incredibly level headed. Projects in Wisconsin, Florida, Europe, Maine and upper New York are all coming alive.
Closer to home—at our own Residence Club at Whitefish Lake—we are ramping up our marketing to make a major push this summer to sell out our existing inventory and bring on new product. Drinking our own Kool-Aid? Yes we are.
Based on a solid marketing plan by our senior marketing guru Chris Cannon and aided by the visitor analysis created by Corey Ryan, we are dedicated to breaking open the sales log jam and get back into real business!
On that note, the 2010 Ragatz Study has just been released. It’s a bleak report, but we believe that it will stand as the industry’s nadir. So read it now; in eight months, we will be able to look back with pride at how far we’ve come since the dark days of 2009–10.
Here at Star we are off and running!
Friday, April 01, 2011
Catching up with Carl
What to make of the Ragatz Conference this past March? Attendance was down, but given current financial affairs, that was to be expected. We all continue to anticipate that the economy is improving, but there seems only incremental evidence to support that hope. However, Dick Ragatz quoted six projects that sold well. One such project was the Hyatt in Aspen, which was selling at 1/20thshares, certainly giving it the price advantage. It appears that smart developers are planning for 2012 and thereabouts, when most believe the buyers will come back.
I asked Dick’s daughter, Tracy, who does the annual surveys, to consider taking a sample and then calling the developers to really dig down and get the numbers and the numbers behind the numbers. It seems natural that some respondents err on the high side when they report their findings that then end up in the annual report. A more in-depth sample would be good data to use with lenders and others planning to come into the business.
During the three-day conference, I attended a great panel on social media. It was the first one I’ve ever heard as it applies to our business. I am a believer, but it served to reinforce the necessity of having a staff person on all the two-way Internet avenues full time. Define yourself or be defined! I also heard at the conference—for the third time in two weeks—that of the last 50 million or so new Facebook accounts, the majority were women ages 45 to 65. If that is not directly in our roundhouse then nothing is! So, what used to be, “Get a Facebook account so the kids will think the project is cool,” is now “Get the project on Facebook, so the buyer will know you are legit.”
In other news, Chris Kelsey, of the Kelsey-Norden Reports, demonstrated that the Generation X folk, ages 30 to 45, are more interested in buying resort property than the Boomers, and certainly have a more positive attitude about being able to do so. This is a sea change in our business! Chris also pointed out that developers with inventory would have to build their way out of this economy (or their lenders will have to do so) as literally no one wants to buy a lot. On the other hand, 19% of consumers wanted to buy a fraction.
Other events worth a mention included a panel of PRC owners—very savvy folk from the San Francisco Bay Area—which was really interesting, and the new business card exchange hour, which was a terrific success. It was managed by Rob Webb andHoward Nusbaum, and they are a team-in-action to behold! What a free-for-all!
I asked Dick’s daughter, Tracy, who does the annual surveys, to consider taking a sample and then calling the developers to really dig down and get the numbers and the numbers behind the numbers. It seems natural that some respondents err on the high side when they report their findings that then end up in the annual report. A more in-depth sample would be good data to use with lenders and others planning to come into the business.
During the three-day conference, I attended a great panel on social media. It was the first one I’ve ever heard as it applies to our business. I am a believer, but it served to reinforce the necessity of having a staff person on all the two-way Internet avenues full time. Define yourself or be defined! I also heard at the conference—for the third time in two weeks—that of the last 50 million or so new Facebook accounts, the majority were women ages 45 to 65. If that is not directly in our roundhouse then nothing is! So, what used to be, “Get a Facebook account so the kids will think the project is cool,” is now “Get the project on Facebook, so the buyer will know you are legit.”
In other news, Chris Kelsey, of the Kelsey-Norden Reports, demonstrated that the Generation X folk, ages 30 to 45, are more interested in buying resort property than the Boomers, and certainly have a more positive attitude about being able to do so. This is a sea change in our business! Chris also pointed out that developers with inventory would have to build their way out of this economy (or their lenders will have to do so) as literally no one wants to buy a lot. On the other hand, 19% of consumers wanted to buy a fraction.
Other events worth a mention included a panel of PRC owners—very savvy folk from the San Francisco Bay Area—which was really interesting, and the new business card exchange hour, which was a terrific success. It was managed by Rob Webb andHoward Nusbaum, and they are a team-in-action to behold! What a free-for-all!
Tuesday, March 01, 2011
Catching up with Carl - March 2011
On February 17-18, I attended the Fractional Summit held in London. The meeting was presented by Fractional Life, the company’s third in the U.K. Fractional Life also produced a Miami conference in 2010 and have plans to host another in 2011.
The delegates came from England, Scotland, Ireland, France, Spain, Portugal, Italy, Denmark, Poland and Turkey, as well as Latin America, Canada and, of course, the United States.
I spoke on 'Lessons Learned from Star Resorts' and then was part of an 'Ask the Experts' panel. The seven ‘Lessons Learned’ that I presented were:
If there was common theme that resonated throughout the conference, it was increased transparency in the product presentation. On one hand, in the U.S., it’s all about transparency, so those discussions seemed old hat. On the other hand, it was obvious that due to past experiences, Star Resort Group would have an advantage in entering the European market.
Our intent in attending the conference was to 'make a market' in the U.K. and Europe. The countries are not as brand conscious as the United States, so there is more opportunity for the independent developer.
I came away with a handful of good leads and the reconnection with two talented execs from our world's Finest Days.
The delegates came from England, Scotland, Ireland, France, Spain, Portugal, Italy, Denmark, Poland and Turkey, as well as Latin America, Canada and, of course, the United States.
I spoke on 'Lessons Learned from Star Resorts' and then was part of an 'Ask the Experts' panel. The seven ‘Lessons Learned’ that I presented were:
- What is the fractional markup today versus yesterday?
- The buyer profile
- Generation X buyers and the opportunity to sell to them
- Fractions—the most difficult product to sell
- Marketing and lead generation
- Selling the fraction
- Meeting expectations—post sale management
If there was common theme that resonated throughout the conference, it was increased transparency in the product presentation. On one hand, in the U.S., it’s all about transparency, so those discussions seemed old hat. On the other hand, it was obvious that due to past experiences, Star Resort Group would have an advantage in entering the European market.
Our intent in attending the conference was to 'make a market' in the U.K. and Europe. The countries are not as brand conscious as the United States, so there is more opportunity for the independent developer.
I came away with a handful of good leads and the reconnection with two talented execs from our world's Finest Days.
Tuesday, February 01, 2011
Catching up with Carl - February 2011
Resort sales haven’t recovered, but with a little creativity and
minding the realities of the market, resort product can be
moved. Our acute surgery program at South Carolina’s Dye
Villas resort is paying some dividends. Our developer 'close
out' at $30k per 1/13th + 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 uphill
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 through early 2008 and then began to
slow and stopped on September 8th of that year.
Not much happened until the spring of 2010 when we became
involved. In the meantime, a 1/12th 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
$120k, so the $60k for the then amended to 1/13th share was a
good price. But there was 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
importantly, 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 Whit ef ish in Mont ana, it's still hand- to- hand combat to
get decisions made. For every sale we close we lose two that
had deposits and paperwork. For all of 2010, we closed just a
handful.
I’ve previously talked about the turn of the Canadian market,
which used to buy real estate in the U.S. as a hedge to the
Canadian economy. Now, they say the U.S. is worse off than
Canada, so why buy? I’ll be speaking at the London fractional
conference in February, and am interested to see how
European resorts are fairing.
minding the realities of the market, resort product can be
moved. Our acute surgery program at South Carolina’s Dye
Villas resort is paying some dividends. Our developer 'close
out' at $30k per 1/13th + 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 uphill
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 through early 2008 and then began to
slow and stopped on September 8th of that year.
Not much happened until the spring of 2010 when we became
involved. In the meantime, a 1/12th 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
$120k, so the $60k for the then amended to 1/13th share was a
good price. But there was 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
importantly, 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 Whit ef ish in Mont ana, it's still hand- to- hand combat to
get decisions made. For every sale we close we lose two that
had deposits and paperwork. For all of 2010, we closed just a
handful.
I’ve previously talked about the turn of the Canadian market,
which used to buy real estate in the U.S. as a hedge to the
Canadian economy. Now, they say the U.S. is worse off than
Canada, so why buy? I’ll be speaking at the London fractional
conference in February, and am interested to see how
European resorts are fairing.
Sunday, January 09, 2011
January 2011
January 2011
Our acute surgery program at Dye Villas is paying some dividends. Our developer 'close out' at $30k per 1/13th + 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 8th of that year.
Not much happened 'till the spring of '10 when we became involved. In the mean time a 1/12th 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 1/13th 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….
Friday, January 07, 2011
January 2011
January 2011
Our acute surgery program at Dye Villas is paying some dividends. Our developer 'close out' at $30k per 1/13th + 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 8th of that year.
Not much happened 'till the spring of '10 when we became involved. In the mean time a 1/12th 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 1/13th 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….
Carl
Friday, September 24, 2010
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.
Tuesday, June 29, 2010
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!
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!
Monday, April 05, 2010
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.
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.
Tuesday, March 23, 2010
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.
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.
Wednesday, December 30, 2009
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!
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!
Wednesday, October 28, 2009
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.
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.
Tuesday, August 25, 2009
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
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
Thursday, July 23, 2009
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?
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?
Sunday, June 14, 2009
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!
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!
Saturday, May 02, 2009
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!
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!
Monday, April 13, 2009
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?
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?
Sunday, March 15, 2009
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 pass̩. Psychographics rule Рthe 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.
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 pass̩. Psychographics rule Рthe 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.
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