Idle Speculation - Does it make sense for DRI to acquire Raintree?

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

Got the glossy brochure yesterday and was again reminded that Diamond and Raintree swapped a teeny slice of inventory with each other so that each of them could tell their members about these additional exchange options.

But that got me thinking - doesn't it make sense for the two systems to combine? Could this swapping of inventory be DRI and Raintree swapping pecks on the cheek as a potential prelude to some heavy necking - or more?

Seems to me that the resort systems are complementary. I own in both and the operating policies aren't much different. Some of the Raintree properties are more upscale, but Diamond probably wants to head that direction anyway.

And Raintree seems to me to be a logical target for someone to acquire.

Anybody else care to offer thoughts, speculations, and similar wildly unsupported hypotheses??

[dale7 Senior Member Find all posts View Profile Close dale7]

Got the glossy brochure yesterday and was again reminded that Diamond and Raintree swapped a teeny slice of inventory with each other so that each of them could tell their members about these additional exchange options.

But that got me thinking - doesn't it make sense for the two systems to combine? Could this swapping of inventory be DRI and Raintree swapping pecks on the cheek as a potential prelude to some heavy necking - or more?

Seems to me that the resort systems are complementary. I own in both and the operating policies aren't much different. Some of the Raintree properties are more upscale, but Diamond probably wants to head that direction anyway.

And Raintree seems to me to be a logical target for someone to acquire.

Anybody else care to offer thoughts, speculations, and similar wildly unsupported hypotheses??

I like it when I have more places to trade into with out fees and upscale. I like the way DRI is going but I hope the higher maintenance fees do not hurt some of members who can not afford it.

[Xolodno Member Find all posts View Profile Close Xolodno]

It would be a good match merger wise. Both companies have resorts in places the other would like. When you consider the cost of actually aquiring and developing another property vs. just putting two companies together to form one. I would also gather its a lot easier to sell a resort system to someone with a huge portfolio of resorts vs. a small one or just one.

Plus it there are cost savings to both companies when they merge (less duplication of management).

Then you also become more competitive against the other juggernauts (Wyndham, Marriot, etc.).

An "affiliation agreement" is a good way to test the waters to see if it brings in more "sales". If both companies do notice a profit bump after an affiliation, both would be loathe to end it and would want to see it become permanent.

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

It would be a good match merger wise. Both companies have resorts in places the other would like. When you consider the cost of actually aquiring and developing another property vs. just putting two companies together to form one. I would also gather its a lot easier to sell a resort system to someone with a huge portfolio of resorts vs. a small one or just one.

Plus it there are cost savings to both companies when they merge (less duplication of management).

Then you also become more competitive against the other juggernauts (Wyndham, Marriot, etc.).

An "affiliation agreement" is a good way to test the waters to see if it brings in more "sales". If both companies do notice a profit bump after an affiliation, both would be loathe to end it and would want to see it become permanent.

I see it much the same way. I think Raintree is an attractive target for somebody.

The biggest issue that I see with DRI/Raintree is that DRI is closely embedded with II, whereas RVC is extremely tight with RCI. Of course, Raintree would be an attractive target for Wyndham as well as DRI. There's a similar fit in terms of locations, and there wouldn't be issues involving switching primary exchange companies.

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

I love the idea of Raintree's acquisition, but I believe it will be unlikely due to the fact that DRI recently acquired Sunterra (capital capital capital). You would have to assume unless Raintree becomes cheap to aquire that it would not be likely in the near future. If Raintree was acquired, I hope we could have a dual exchange system in which we could use either RCI or Interval I believe BG offers this feature I might be mistaken anyways just my 2 cents.

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

I love the idea of Raintree's acquisition, but I believe it will be unlikely due to the fact that DRI recently acquired Sunterra (capital capital capital). You would have to assume unless Raintree becomes cheap to aquire that it would not be likely in the near future. If Raintree was acquired, I hope we could have a dual exchange system in which we could use either RCI or Interval I believe BG offers this feature I might be mistaken anyways just my 2 cents.

My first preference would also be Diamond. I would love to combine our Raintree points with Diamond Points, while having home resort advantages to Hawai'i and to the Raintree resorts in MX and Whistler.

[Xolodno Member Find all posts View Profile Close Xolodno]

I love the idea of Raintree's acquisition, but I believe it will be unlikely due to the fact that DRI recently acquired Sunterra (capital capital capital). You would have to assume unless Raintree becomes cheap to aquire that it would not be likely in the near future. If Raintree was acquired, I hope we could have a dual exchange system in which we could use either RCI or Interval I believe BG offers this feature I might be mistaken anyways just my 2 cents.

Actually, capital is not too huge of an issue as one may think and doesn't have to be an "aquistion" in the traditional sense. The purchase can be a pure stock one (everyone in Raintree gets "X" shares in the new company)...not a single dime could change hands.

But one other thing, isn't Diamond privately owned now? If so, it could be incorporated and sell shares (anything less than 50% and Mr. C still controls the company) and raise funds or use those shares in a trade with Raintree's owners.

But the other question.....is Raintree privately owned? Two private companies merging changes all the rules and once again, capital is a non-issue.

As for the RCI and II contracts....remember these are contracts with the company. If Raintree ceases as an entity...RCI has a contract with a non-existent company. Sort of like hiring an independent contractor to do some work on your house, if he dies, he's not going to be able fufill his terms while six feet under. Likewise, you no longer have to pay him. The same would apply to II. There may be some clauses in the event of such a scenario, but I doubt either company would shackle itself so tightly that it could never take an opportunity to grow because of an exchange company.

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

but I doubt either company would shackle itself so tightly that it could never take an opportunity to grow because of an exchange company.

Like Sunterra did in 2002 Chap11.

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

Raintree and Diamond status came up in the presentation we attended yesterday in Po'ipu. The sales person and her supervisor said they had merged. I challenged that statement, so they got the Regional Sales Manager. The "official" word from him is that the exchange of inventory is a courtship situation. Both companies are interested in completing a merger, but want to get to know each other better.

I don't know how it was actually told to staff; I suspect that, like a game of Post Office, somewhere along the information chain, "exploring merger" became "merged".

*****

The Regional Sales Manager (knowledgeable fellow, by the way, who is quite knowledgeable of the industry) said that if a deal goes through he expects that Raintree members will be offered access to THE Club at a nominal fee. He cited the situation with Epic, in which he said Epic members were offered the opportunity to convert to Club for a several hundred dollars.

******

I spent an hour last night reviewing the updated Disclosure Agreement for THE Club. Cloobeck has THE Club well structured to add additional entities such as Raintree to THE Club. Essentially, THE Club is a reciprocal inventory exchange program among groups of resorts. For the old Sunterra resorts, each of the Sunterra Trusts is one such entity. Bluegreen will enter the club as another entity. Raintree, if acquired, will become another.

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

A reciprocal exchange program is NOT the same as a merger of Clubs. In effect, both Clubs operate as always and there is inventory exchange through some set of exchange rules and according to a set of demand balancing principles. Both Clubs maintain their point values and new values are assigned for the new inventory for each Club in their respective currencies. Bluegeen has that today with Select Connections with Shell Vacation Club. They can do that without buying any of the resort developers or management entities.

The reason to make an acquisition is to gain synergies in operations and/or sales and marketing and/or new resort development or purchasing power for furnishing resorts.

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

What Raintree properties are affliated with the club? If i am not mistaken, Raintree owners have access to the follwoing:
ORLANDO Cypress Pointe Resort, Grand Villas and Grand Beach Resort
MAUI - Ka'anapali Beach Club
LAKE TAHOE Lake Tahoe Vacation Resort
LAS VEGAS - Desert Paradise Resort
But which resorts did Raintree allow Diamond owners to?

[idofabric Member Find all posts View Profile Close idofabric]

How can we tell which resorts are Raintree other then going into their site and DRI site and compairing what we can exchange into? It sounds like it coudl be nice, for those that need a unit in the west, but I did not see much on Raintrees site for the east coast.

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

How can we tell which resorts are Raintree other then going into their site and DRI site and compairing what we can exchange into? It sounds like it coudl be nice, for those that need a unit in the west, but I did not see much on Raintrees site for the east coast.

I think the easiest way to tell is to simply look at the resorts listed in DRI's announcement about the reciprocal exchange program with Raintree. Failing that, I would go to the Raintree web site and look at the resorts listed on their site.

Raintree has nothing on the east coast. They are strongest in Mexico and Whistler, with a few other high end resorts in the west (including Teton Club in Jackson). That's what makes them a good fit for DRI.

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

would love to goto Teton, but in Whistler it's a collection of resorts in Whiski Jack, for instance next year we have a 2 bedroom in Westin via Raintree

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

would love to goto Teton, but in Whistler it's a collection of resorts in Whiski Jack, for instance next year we have a 2 bedroom in Westin via Raintree

That's a first class property. If you are there skiing you probably can't do better; the Whistler gondola literally is next door.

During ski season the only property I might prefer to Westin is Powders Edge, which fronts onto the plaza where the Whistler gondola is. Though older, the Powders Edge units are larger (about 1600 sf) and have en suite jacuzzi and steam room. Powders Edge units also sleep 8 people (two bedrooms plus loft).

The WJ Whistler units span a variety of quality levels.