I have no idea what the topic is

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

Resort economics are based on getting maintenance fees in rather than the crapshoot of rentals. Excess inventory also tends to be much more likely to fall at times that rentals are more uncertain. That is why rentals are generally not a good way to go.

I agree with this. And, Bluegreen has generated a surplus of 18% over and above the underlying maintenance fees. They do it by very effective operations and creating a program that is worth more to owners than the underlying fixed weeks, so they gladly pay more for those privileges.

And, because there is an active rental program by owners and Bluegreen, additional revenues are captured for under utilized resorts. Those profits keep Bluegreen satisfied and maintenance fees amongst the lowest in the industry which keeps owners satisfied.

There is one thing that you will like about the rental program. Owners pay pretty much what is equivalent to the maintenance fees for bonus time. Non-owners pay about triple that amount. When I stay at the Fountains for bonus time, for instance, I pay $59/night. A non-owner going to Bluegreen Rentals is paying between $150-175/night.

When you are commanding 3 times the underlying MF, you can have 2 nights vacant for every night rented and still cover costs. Anything more than that is profit.

How many OBX resorts have a 30% growth rate and generates 18% revenue above maintenance fees?

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

As far as management groups, I would strongly disagree with you. The best managed resorts on the OBX are those with a strong hands-on HOA board which hires it own manager, rather than relying on a management company. This is not something I would want to give up.

VRI did take over management of Sea Ranch II on the OBX, which had had a very bad experience with an inept local management company, and before that a bad situation with their developer. While they seem to be getting good marks on quality issues, there has been quite a bit of grumbling among owners about the increases in maintenance fees. I do not know how this has impacted exchanging (the resort is II-only, so VRI's special relationship with RCI would not come into play), as the people I know who own there own to use and don't exchange. As far as the quality issues are concerned, it would appear to me that they could have done as well with a hands-on HOA board and a hired manager, probably for lower m/f's.

The absolute best run grocery stores in California got killed by Safeway and Vons and Stater Bros. The absolute best run hardware stores got killed by Home Depot and Lowes. And, those retail outlets were run by true entrepreneurs and smart business people. And, they got their butts kicked by a manager in a big bureaucracy. Resistance is futile.

There is no doubt in my mind that there are benefits that a small mom and pop operation has in providing certain types of services. However, the economies of scale of the larger player always wins out in the end except for in niche situations.

My cousins, as an example, own a very successful standalone grocery store in Dinuba, just outside of Fresno, Ca. They were successful because they provided good service and decent prices in an area that couldn't take advantage of the scale economies of the larger players. But, try that business model in any large metro area, they would have been slaughtered and they know it. That's why they settled in Dinuba. The same will be true for timesharing.

I don't know much about VRI. I do know that RCI owners love the VRI advantage. More of this will occur over time because it makes sense to aggregate exchange power. And, many people love VRI management. Others hate it.

The same can be said about Walmart. Lots of people hate Walmart and think their stores are pretty boring and don't provide effective customer service. And yet, they put a lot of very well run retail outlets out of business. They did it with a superior business model.

I claim that large scale resort groups such as the Marriotts, Starwoods, Hilton's, Hyatts, Bluegreen, Fairfields, etc. Will continue that trend with a superior business model to the standalone timeshare resort.

The good news is that resorts will be able to choose. They can stay standalone if they want. But, they will be given the opportunity to become part of bigger groups. The smart ones will do it sooner rather than later.

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

Many resorts simply do not have revenue streams other than the m/f (or in the alternative a rental fee if they rent weeks). When they do, it is not always a positive revenue stream, like a loss-making restaurant attached to the resort. In many smaller resorts, there are no practical alternative revenue streams.

There are, however, costs associated with use of a unit - cleaning, utilities, etc. that would not occur if the unit were not used. If RCI rents the week, keeps all of the money, and the resort gets nothing, its costs have exceeded its return and it has lost money. That is the usual situation with an RCI rental.

If any management team cannot improve the resort bottom line by increasing utilization, they should be fired. All you need to do is generate more revenue than the variable costs. That's easy to do even with cheap rentals.

Now, if the resort were a failure due to a bad concept, then that's understandable. Building a timeshare resort in Antarctica would be an example.

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

It would appear that Bluegreen's m/f is close to the average m/f on the OBX, perhaps slightly higher, so management seems to be doing equal jobs, if perhaps in different ways.

The OBX resort with the best track record of turning deedbacks/foreclosures quickly into resales, The Windjammer, has always had the lowest m/f on the OBX, often by a significant margin. Those two things feed each other in a positive way. This is the most effective path to sound resort finances, not rentals.

As to growth, that is really not a valid area for comparision since only one resort on the OBX is still in sales, and the rest are sold out. The problem is that prices for oceanfront land went too high for timeshare development some time ago, and potential developers are even having trouble finding sites for timeshare development off the beach. Fairfield tried a couple of years ago and couldn't find a site.

The same is true about revenue above manintenance fees. OBX resorts are into reselling inventory they get back, not renting it. From the m/f numbers that stategy seems to be successful.

I agree with this. And, Bluegreen has generated a surplus of 18% over and above the underlying maintenance fees. They do it by very effective operations and creating a program that is worth more to owners than the underlying fixed weeks, so they gladly pay more for those privileges.

And, because there is an active rental program by owners and Bluegreen, additional revenues are captured for under utilized resorts. Those profits keep Bluegreen satisfied and maintenance fees amongst the lowest in the industry which keeps owners satisfied.

There is one thing that you will like about the rental program. Owners pay pretty much what is equivalent to the maintenance fees for bonus time. Non-owners pay about triple that amount. When I stay at the Fountains for bonus time, for instance, I pay $59/night. A non-owner going to Bluegreen Rentals is paying between $150-175/night.

When you are commanding 3 times the underlying MF, you can have 2 nights vacant for every night rented and still cover costs. Anything more than that is profit.

How many OBX resorts have a 30% growth rate and generates 18% revenue above maintenance fees?

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

Retail is quite different from a service industry like hospitality. There are very few of the components where cost savings can be achieved by volume. That is probably even more true in timesharing than in hotels or other parts of the hospitality industry. On the other hand, adding layers of bureaucracy can add to costs.

As to the branded resorts taking over, the market doesn't show that. There was quote from a hospitality industry trade journal quoted a few months ago in The TimeshareBeat, which I posted on TUG and perhaps here, which scted numbers showing that a significant majority of timeshare units now in the pipeline were being built by independent developers, not the branded chains.

What the mini-systems offer is far too limited for those of us who like to exchange, and of no use to those who own to use at their home resort.

I love Charleston and would like to find a good deal to own there, but I would first look to Isle of Palms Beach Club to buy rather than LAI, even though I would be quite happy to trade into either.

One other problem with mini-systems is owner control. All but one of my resorts (and that one is for sale) have meaningful owner control of their administration. That is possible in a stand alone resort, but many chains are set up so that the developer stays in charge. With many owners in the mindset of owning a tiny piece of a big system, there is no identifcation with a particular resort and desire to participate in its governance even if it may technically be possible. Does Bluegreen have an HOA for each resort or is it one large association, where it would be difficult for anyone outside management to realistically have a voice? That was one question I asked on the LAI tour that the sales rep never did provide an answer for.

At three of my resorts (two on the OBX and one in SA), the owners organized and kicked out the developer. A like to see a structure that allows owners to take control when they need to.

The absolute best run grocery stores in California got killed by Safeway and Vons and Stater Bros. The absolute best run hardware stores got killed by Home Depot and Lowes. And, those retail outlets were run by true entrepreneurs and smart business people. And, they got their butts kicked by a manager in a big bureaucracy. Resistance is futile.

There is no doubt in my mind that there are benefits that a small mom and pop operation has in providing certain types of services. However, the economies of scale of the larger player always wins out in the end except for in niche situations.

My cousins, as an example, own a very successful standalone grocery store in Dinuba, just outside of Fresno, Ca. They were successful because they provided good service and decent prices in an area that couldn't take advantage of the scale economies of the larger players. But, try that business model in any large metro area, they would have been slaughtered and they know it. That's why they settled in Dinuba. The same will be true for timesharing.

I don't know much about VRI. I do know that RCI owners love the VRI advantage. More of this will occur over time because it makes sense to aggregate exchange power. And, many people love VRI management. Others hate it.

The same can be said about Walmart. Lots of people hate Walmart and think their stores are pretty boring and don't provide effective customer service. And yet, they put a lot of very well run retail outlets out of business. They did it with a superior business model.

I claim that large scale resort groups such as the Marriotts, Starwoods, Hilton's, Hyatts, Bluegreen, Fairfields, etc. Will continue that trend with a superior business model to the standalone timeshare resort.

The good news is that resorts will be able to choose. They can stay standalone if they want. But, they will be given the opportunity to become part of bigger groups. The smart ones will do it sooner rather than later.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

This one is for Carolinian. Lodge Alley Inn on eBay now.

Carolinian,

Here is your chance to buy a converted fixed week at Lodge Alley Inn. Week 33. One bedroom suite. It has already been converted to Bluegreen points. And the maintenance fees are only $270/year.

Lodge Alley Inn for Carolinian


You can use it every other year if you want EXACTLY like a fixed week. You can exchange it through RCI or II. And, if you want to use it with DAE, just book white studio units at Big Cedar in January and deposit them with DAE. With 10,000 points already available, that is 5 exchange credits. Why get 1 exchange with them every other year when you can have 5 instead? SFX will take this resort as well.

If you buy it, I will pay for your first year Bluegreen dues. This timeshare has your name written all over it.

Just think, if you actually use it, you can really come up with good stuff on why points are bad. Or, you may find that it is a good program and you might like it.

Really. Bid on it. If you win, I will pay for your first year's Bluegreen fees. That is a bona fide offer worth about $125.