Positive and Upbeat or Out of Touch With Reality?

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

The fearless style of leadership in timeshares is personified by executives like John Sutherland II, the senior vice president of sales operations at the Family of Orange Lake Resorts in Orlando, Fla. The timeshare operator has 3,000 units spread among its 26-year-old Orange Lake Resort & Country Club in Orlando and smaller facilities in Panama City, Fla., Lake Geneva, Wis., and southern Vermont.

A new eight-story tower with 156 units is under construction in Orlando and due to be completed in December. The firm already is considering next year's projects.

The $39 million construction cost of the latest tower, equal to $250,000 per unit, hardly seems to concern Sutherland and other executives at Orange Lake. They're confident that the shared condos, promoted as one-week units to be used biannually at prices averaging $20,000 apiece, will sell out in short order.

“We don't sit around worrying about the economy, because we can't afford to,” Sutherland declares. “We work right through a bad economy. The expression is, we keep reloading the wagon here. We don't worry about the mule going blind. And we don't worry about what the competition is doing.”

Sales and marketing are everything in timeshares. Orange Lake's profit-and-loss profile is typical: sales and marketing run a huge 55% of the cost of a new timeshare unit. According to Sutherland, the actual construction cost represents a mere 25%. Corporate overhead is 8% or less. The rest is all profit margin, with higher costs for cement and steel having little impact on the bottom line so far, Sutherland says.

No Time Out for Timeshares

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

Or is this reality?

$100 / 1br - Orange Lake 1 Bedroom Villa (Kissimee, Florida)

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Date: 2012-03-04, 8:51PM EST
Reply to: kjcmc-2874217125@hous.craigslist.org [Errors when replying to ads?]
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I have For Sale a 1 Bedroom Villa at Orange Lake Country Club in Kissimee, Florida. It is week 42 Unit 1009 which is located close by to the Main Resort Facility and swimming pools in west Village. The 2011 week is still available for use. Orange Lake does offer a Quit Claim Deed form which is fairly inexpensive. This unit will sleep 4 privately.

The buyer will pay all closing costs, and transfer fees.

Greg
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2BR ORLANDO Florida ORANGE LAKE Red Week TIMESHARE Deed...
PayPal/Visa/AMEX/MC/Discover - REDUCED Closing Costs!
0 Bids $1.00 Time left:1d 10h 15m

orange lake timeshare | eBay

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

Lean economic times can actually help developer timeshare sales. Several OBX timeshare resorts were built to be whole ownership condos but the economy turned sour, so they were sold, successfully, as timeshares when they would not move as whole ownership condos.

The marketing costs mentioned is in line with the numbers I have always heard, and illustrates why buying from a developer is such a bad deal.

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

As revered others on this forum have confirmed, the value of a resale at the resort mentioned is zip. Someone could obtain for free what is being sold there.

Yet, at the same time, the exectutives are flaunting their extravagance, saying they will have no problem selling out EOY units at $20,000 each, $2,000,000 per unit for something they say costs $250,000 (which seems to be a stretch).

Why is it that the powers-that-be can't see these things, or if they can, can't see something wrong?

Could it be that stuff like that is so important to Orlando, and Florida, that they just have to look the other way?

[Ridewithme38 Senior Member Find all posts View Profile Close Ridewithme38]

As revered others on this forum have confirmed, the value of a resale at the resort mentioned is zip. Someone could obtain for free what is being sold there.

Yet, at the same time, the exectutives are flaunting their extravagance, saying they will have no problem selling out EOY units at $20,000 each, $2,000,000 per unit for something they say costs $250,000 (which seems to be a stretch).

Why is it that the powers-that-be can't see these things, or if they can, can't see something wrong?

Could it be that stuff like that is so important to Orlando, and Florida, that they just have to look the other way?

Because people are locked into endless contracts with no feasible way out...As long as the MF's are still coming in, the resort *looks* healthy, so they keep building....The executives only see the bottom line, they don't see all the people going through hell trying to sell their ownerships on ebay

[PigsDad Senior Member Find all posts View Profile Close PigsDad]

As revered others on this forum have confirmed, the value of a resale at the resort mentioned is zip. Someone could obtain for free what is being sold there.

Yet, at the same time, the exectutives are flaunting their extravagance, saying they will have no problem selling out EOY units at $20,000 each, $2,000,000 per unit for something they say costs $250,000 (which seems to be a stretch).

Why is it that the powers-that-be can't see these things, or if they can, can't see something wrong?

Could it be that stuff like that is so important to Orlando, and Florida, that they just have to look the other way?

What "powers that be" are you referring to? Maybe I am reading your post wrong, but I think you are insinuating that Orange Lake or their executives are doing something wrong or illegal by creating a product, marketing it and successfully selling it for a profit. That is what companies do. There is obviously a market for developer-sold timeshare units, but just because there is little to no market for re-sale timeshare units, are you saying the companies should not sell timeshares?

A similar example. Best Buy sells USB cables for $15 all the way up to $40-$50. They put pretty packages on them, shine them up nice, etc. -- aka, marketing. But you can buy a USB cable that will do the exact same thing for 50 cents on ebay. Does that mean the "powers that be" should be looking into Best Buy and their sales of USB cables?

Just curious, what do others think?

Kurt

[rikkis_playpen Diamond Club Contributor Find all posts View Profile Close rikkis_playpen]

The buyer demographics for the two markets are entirely different.. You can't compare the two transactions unless you purposefully blur the lines to create controversy. I've experienced both environments, and the sales tactics are as different as night and day.

Developers sell to consumers who are generally unfamiliar with the product. They use gifts to entice consumers into a sales presentation, and then use advanced sales techniques to create impulse buying decisions in their target. Resorts also sell to current owners who purchased in this manner, many of whom have no idea a resale market exists.

Developers did extremely well primarily because of the massive population bump of the baby boomers, which was their main target demographic. As that demographic was saturated (in other words a growing percentage had already been toured and given an opportunity to learn about timeshares and were no longer that "virgin" prospect that is so coveted), developers have struggled to find a new niche. Most have turned to internal sales, repackaging their product to sell as points. Those prospects too will eventually become saturated and no longer produce new sales.

In the future, timeshare developers will have to change tactics again. Direct sales will continue to slow, and rentals will become far more important. Hopefully they focus on providing increased value over increased hype.

The resale buyer and the developer buyer are not the same.. The secondary market has always had to provide strong value versus cost as resales are sold to a more savvy demographic. Over my years in the industry, I've supervised close to fifty thousand resale transaction sides and I would estimate that at least 90% of those buyers already owned at least one timeshare that was purchased directly from a timeshare developer at full price. Resale buyers generally know the product they purchase, and shop around for the best price possible. Resales are not impulse decisions.

[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

Why anybody will buy from the developer is rather simple. In general the public is not great at math and even those that are get rather confused by all the numbers in the unrealistic or fraudulent sales pitch. I signed for a developer buy once a long time ago, but when i sat down and crunched some numbers that night, rescinding was the only option. Though the cost of construction for a timeshare week may be around $ 5,000---the resale value for almost all timeshares will generally fall greatly under that amount as the resort ages. Only the best of weeks at the best of resorts will continue to hold or exceed their construction value.

[Hobbitess Senior Member Find all posts View Profile Close Hobbitess]

Actually, they have discovered that "positive and upbeat" is, by definition, "out of touch with reality."

...don't feel too angry with your vain brain for shielding you from the truth [about yourself and your situation]. There is in fact a category of people who get unusually close to the truth about themselves and the world. Their self-perceptions are more balanced, they assign responsibility for success and failure more even-handedly, and their predictions for the future are more realistic. These people are living testimony to the danger of self-knowledge. They are the clinically depressed.

Cordelia Fine, in "A Mind of Its Own"

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

unless you purposefully blur the lines to create controversy.

That's all that had to be said.

Of course execs know the truth.

Of course they know the same thing they are selling has a hard time getting a dollar on eBay. Or, more precisely, what they sold previously has a hard time getting a dollar on eBay, and what they're selling now won't fare much better, if any.

Of course they won't take back for free something they are telling folks is worth $20,000 today.

Of course they don't care.

Of course the powers-that-be, i.e those entrusted to protect the consumer, know these things. The Internet is not something only one side can see.

How much longer can it go on?
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Ten years ago it might have been a case of buying resale v. buying from the developer. Now, just the ongoing fees make a free resale purchase questionable. We own six resale weeks . . . three from associations and three from PCCs, at just about as low as one can give, and can't justify the fees.

IMO, the biggest problem is the proliferation of reasonably price accomodations with no obligation of ownership. That, IMO, is the main reason why you can't even give them away, and charities no longer take them.
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I also think that some just won't wake up and smell the coffee.

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

Actually, they have discovered that "positive and upbeat" is, by definition, "out of touch with reality."

Wrong crowd.

[taffy19 Gold Contributor Find all posts View Profile Close taffy19]

That's all that had to be said.

Of course execs know the truth.

Of course they know the same thing they are selling has a hard time getting a dollar on eBay. Or, more precisely, what they sold previously has a hard time getting a dollar on eBay, and what they're selling now won't fare much better, if any.

Of course they won't take back for free something they are telling folks is worth $20,000 today.

Of course they don't care.

Of course the powers-that-be, i.e those entrusted to protect the consumer know these things. The Internet is not something only one side can see.

How much longer can it go on?

As long as people do not read contracts or do the math. The lucky ones may research afterwards on the Internet what they got themselves into and arrive here and find out that it wasn't a smart purchase and get the recommendation to rescind while they still can.

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

As long as people do not read contracts or do the math. The lucky ones may research afterwards on the Internet what they got.

Or trust people.

[Ridewithme38 Senior Member Find all posts View Profile Close Ridewithme38]

As long as people do not read contracts or do the math. The lucky ones may research afterwards on the Internet what they got themselves into and arrive here and find out that it wasn't a smart purchase and get the recommendation to rescind while they still can.

I don't see how the TSing thing will ever end, even after everyone that has bought a TS has died or gone into foreclosure(The only ways out) their kids will be stuck with them for another generation until death or foreclosure, this will continue indefinitely till either everyone on the planet is dead, or everyone has a foreclosure on their record....

You ever think the evil plan of the Timeshare industry is to crash the credit market? If EVERYONE has a foreclosure on their credit report no one will qualify for a loan or credit card, or car or even be able to get a job or an apartment...The only ones left will be the timeshare companies...they will own and control everything

[PigsDad Senior Member Find all posts View Profile Close PigsDad]

Of course the powers-that-be, i.e those entrusted to protect the consumer, know these things. The Internet is not something only one side can see.

Who do you think these "powers-that-be" are? Is it your belief that there should be some governmental agency to protect us poor, helpless consumers from overpaying for purchases? As you say, the internet is not one sided, so why the need for some agency to "protect" a consumer from overpaying? Buyers should do their own due diligence, plain and simple.

There is a need for some consumer protection when it comes to product safety, etc., but price? No thank you.