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.
Tuesday, February 01, 2011
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.
Thursday, February 05, 2009
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
>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
Friday, January 23, 2009
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
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
Tuesday, December 02, 2008
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!
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!
Sunday, November 02, 2008
November Blog
Greetings all you practitioners of fractional interests! Keeping the faith?
Just back from ULI and the Recreational Development Council meeting. The best reports were that sales were 50% of projected sales reduced as they year went on, but the great majority of projects just had one sale here and one there over the summer all as hard as heck to get closed.
Lots of prospects coming up to the bar but backing off - similar to our experiences at SRG.
Some comments:
*The major banks are firmly being controlled by their credit departments, so no new loans are going out unless its to a 'platinum-plated' repeat customer.
•A major SE resort doing a St. Kitts project now going hard on deposits: 135 reservations >> 30 conversions.
•A comment from a multi resort developer - on one hand no use spending marketing dollars, but can't go invisible, so still putting some money in their markets.
•Tales of lender defaulting on construction loans.
•Tales of no buyer loan money and no hypothecation loans.
•Naturally a great time to planning a project and a louse time to be in sales.
•Marginal hopes of winter 09 and not much better for summer 09. Will we be surprised?
•All eyes on 2010
•From Paul Volker: the capital markets won't come fully back until the trust and confidence is restored between banks worldwide. As that trust has been smashed he feels it will take two or more years to fully come back.
On the more positive side of things: another report from a research company on wealth as of September 23rd. Conclusions? The top 10% of wealth is not buying anything let along resort real estate. Maybe some interest in bottom feeding for investment real estate.
•Last year these wealthy segments were in a psychological recession. Now, they acknowledge that it's a real recession.
•They plan to cut their spending by an average of -6%
•Only family-oriented spending will hold up.
•If the past years were 'I want it'
•Then the most recent period was 'I need it'
•Now it's 'We need it' -- reflecting that family hunker down approach.
•This opens up avenues for sales to focus on 'what's real' for family use which goes to service, usable amenities and robust activities.
And, hey, these folk are still optimistic on America…they believe 09 will be a better year for them than 08 and also for America.
Greetings all you practitioners of fractional interests! Keeping the faith?
Just back from ULI and the Recreational Development Council meeting. The best reports were that sales were 50% of projected sales reduced as they year went on, but the great majority of projects just had one sale here and one there over the summer all as hard as heck to get closed.
Lots of prospects coming up to the bar but backing off - similar to our experiences at SRG.
Some comments:
*The major banks are firmly being controlled by their credit departments, so no new loans are going out unless its to a 'platinum-plated' repeat customer.
•A major SE resort doing a St. Kitts project now going hard on deposits: 135 reservations >> 30 conversions.
•A comment from a multi resort developer - on one hand no use spending marketing dollars, but can't go invisible, so still putting some money in their markets.
•Tales of lender defaulting on construction loans.
•Tales of no buyer loan money and no hypothecation loans.
•Naturally a great time to planning a project and a louse time to be in sales.
•Marginal hopes of winter 09 and not much better for summer 09. Will we be surprised?
•All eyes on 2010
•From Paul Volker: the capital markets won't come fully back until the trust and confidence is restored between banks worldwide. As that trust has been smashed he feels it will take two or more years to fully come back.
On the more positive side of things: another report from a research company on wealth as of September 23rd. Conclusions? The top 10% of wealth is not buying anything let along resort real estate. Maybe some interest in bottom feeding for investment real estate.
•Last year these wealthy segments were in a psychological recession. Now, they acknowledge that it's a real recession.
•They plan to cut their spending by an average of -6%
•Only family-oriented spending will hold up.
•If the past years were 'I want it'
•Then the most recent period was 'I need it'
•Now it's 'We need it' -- reflecting that family hunker down approach.
•This opens up avenues for sales to focus on 'what's real' for family use which goes to service, usable amenities and robust activities.
And, hey, these folk are still optimistic on America…they believe 09 will be a better year for them than 08 and also for America.
Wednesday, September 24, 2008
I hoped 09 might be better for sales than 08. I get the feeling of, "not so fast" thanks to the last month on Wall Street. Was September a good sales month for anyone out there?
I'm holding my breath 'till after the election. One of the great parts of the Harrison Group's presentation to the ULI Recreation Development Councils a year ago was the focus on discretionary income of a family as the driver for the purchase of resort real estate vs. household income.
So, I assume that if Obama is elected that two of the key drivers for discretionary income, dividends and capital gains, will have their tax rates increased from the current 15%. Not good for our sales.
However, I used to assume that if McCain were elected that these rates would be kept at present levels. I'm not so sure now. He may be forced to increase them due to all the current economic dynamics he'll have to live with. Not good for our sales.
This does not take into account the marginal rates being increased for all those 'rich' people, via Obama, making over $200k, which is a gross number. Forget the discretionary part that's left. Not good for our sales
2010 here we come - I hope. Does all this put a spotlight on fractional sales? I think so.
Did you know that on Vegas' South Strip there's a hotel with 1200 horse stalls underneath? Don't volunteer for the maintenance crew!
I'm holding my breath 'till after the election. One of the great parts of the Harrison Group's presentation to the ULI Recreation Development Councils a year ago was the focus on discretionary income of a family as the driver for the purchase of resort real estate vs. household income.
So, I assume that if Obama is elected that two of the key drivers for discretionary income, dividends and capital gains, will have their tax rates increased from the current 15%. Not good for our sales.
However, I used to assume that if McCain were elected that these rates would be kept at present levels. I'm not so sure now. He may be forced to increase them due to all the current economic dynamics he'll have to live with. Not good for our sales.
This does not take into account the marginal rates being increased for all those 'rich' people, via Obama, making over $200k, which is a gross number. Forget the discretionary part that's left. Not good for our sales
2010 here we come - I hope. Does all this put a spotlight on fractional sales? I think so.
Did you know that on Vegas' South Strip there's a hotel with 1200 horse stalls underneath? Don't volunteer for the maintenance crew!
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