Thursday, September 21, 2006


Becton Hands In Keys To Timeshare Venture

BECTON Property Group has decided to dump its timeshare joint-venture with hotels giant Accor Asia Pacific after finding the business an uncomfortable fit.

Becton, the company behind a controversial luxury resort project at Byron Bay, said the Accor Premiere Vacation Club (APVC) business fell short of expectations and failed to offer synergy benefits for the group.

This is despite APVC, which has a membership of more than 15,000 and projected 2006 revenues of $150 million, contributing a pre-tax profit of $2.4 million to Becton's bottom line.

Accor Asia Pacific will acquire Becton's half share in APVC for an undisclosed sum, although some market sources have pitched the deal at about $35 million.

The Robina-based APVC was established in 2000 and has since spent more than $80 million on property acquisitions.

A purchase yesterday of the boutique Grand Mercure Mt Lofty House in the Adelaide Hills for just above $5 million brings its timeshare hotel portfolio to 16 properties.

APVC is also expanding into Bali in January.

Becton has moved to sever ties with APVC after an announcement last week it intended to restructure itself into a stapled property group.

It plans to raise $183 million through the issue of stapled securities, to be underwritten by Macquarie Bank, in order to acquire properties through a trust structure. Although APVC contributed to the company's bottom line profit of $24.9 million for 2005-06, the contribution was 37 per cent below forecasts.

Becton's increased profit came from its development and construction divisions, property funds management and retirement village arms.

"In light of our recently announced proposal for stapling and associated capital raising, we believe it is an appropriate time to focus our attention on growing our funds management and retirement businesses, where greater synergy and shareholder value can be created," said Becton chief Hamish Macdonald.

APVC chief executive Martin Kandel said the group had 'benefited greatly from Becton's participation over the past six years. However our expansion plans into Asia, and Becton's changing focus on its retirement and funds management businesses, highlighted the need to link more closely with Accor for our future development.

"Timeshare has matured significantly as an industry since APVC was launched in 2000 and it is now considered the most dynamic sector of the hospitality and tourism industry."

Earlier this year, the Victoria-based Becton secured NSW Government support for its proposed $130 million development of the former Club Med site at Belongil Beach in Byron Bay. The 290-home project won approval after a decade-long saga of public debate, legal battles and public protests.

Tuesday, September 12, 2006


New Concepts In Timeshare Coming To San Antonio

A new high-rise under construction in downtown San Antonio is expected to feature many of the amenities common to other downtown condo high-rises, which are tacking on luxuries such as rooftop gardens and pools, valets, and exercise rooms.

But this new residence, Fairfield San Antonio at La Cascada, isn't really for locals, and it's not just condos.

The 10-story tower is under development by Fairfield Resorts Inc. and is the newest addition to the company's portfolio of more than 70 timeshare resorts around the world.

Fairfield is expected to open the 100-unit urban resort next summer.

"We're very excited to be coming to San Antonio," company spokeswoman Lisa Burby said. "We responded to where our owners want to go, and Texas and San Antonio is definitely a destination they wanted."

Timeshare, a vacation option that in the past has come under fire because of scammers and unethical sales tactics, has gained more respect in the last decade or so. The attitude adjustment came as major hotel chains started flying their flags over timeshare resorts.

Timeshare allows vacationers to buy the right to spend a set amount of time at a vacation property, either with a percentage ownership or a long-term lease. With timeshare, the purchase is not so much of a specific, physical property but of time at a resort.
San Antonio has drawn several big names in timeshare over the past few years, and some new concepts in timeshare are coming here soon.

Fairfield San Antonio at La Cascada for example, will be the first resort the Wyndham Worldwide-owned company has built in an urban setting.

The company found that timeshare buyers wanted big-city vacation amenities such as Broadway road shows and major league sports.

"It's a new trend for us," Burby said.

The company also is planning urban resorts in San Diego and San Francisco.

Another development, Villa Verona, is a "private residence club" that San Antonio-based RTK Development is planning alongside its ultraluxurious Piazza San Lorenzo condominiums, which RTK is planning on Soledad Street downtown.

Timeshare prices there are set, for now, at $140,000 for a two-bedroom, $195,000 for a three-bedroom and $280,000 for a four-bedroom. Owners get a one-tenth-share interest in the property and pay annual fees of $6,500, $7,500 or $9,000, depending on the unit.

The residence club is a new concept in timeshare, in which owners choose 14 days in the first half of the year and 14 days in the second half. The club also will set aside 10 units for last-minute vacation plans. Subject to availability, owners may stay at one of the 10 units for up to a week without paying extra.The annual fees cover valet, housekeeping, gratuity and a stocked fridge, among other luxuries.

John R. Kazanjian, the company's chief executive officer, said he expects that Mexican nationals will buy as much as half of the time at the resort.

Los Angeles-based HollyHills Development also is planning downtown timeshare condos.

The plan calls for 17 stories of luxury at 120 Villita, which is a one-story office building now. The development will include timeshare, several condos and retail at street and river levels.

"Timeshares will take up the vast majority of it," said T.J. Connolly, HollyHills' spokesman.

HollyHills doesn't expect to start on that project until 2010.

Coming sooner is the company's Briggs Ranch Grand Vacation, which is under development near U.S. 90 West and Texas 211. The company broke ground on the 58-acre 1,000-unit timeshare resort in June. The resort will include a 2-acre water park and is near the Texas Golf Club, which is considered one of the nation's best public courses. HollyHills is spending $2.5 million to update the course, including $1.2 million for 75 state-of-the art golf carts with wireless Internet and global positioning systems.

"Would this work in Peoria, Ill.? Probably not. But it can work in San Antonio," Connolly said. "You can play golf almost any day of the year here."

Prices at Briggs Ranch start at $4,990 for one week every other year, and top out at $20,000, which might include two weeks in a four-bedroom unit. All timeshares include golf and discounts at the clubhouse.

The first 100 units are expected to open in January, and HollyHills plans to add 100 or more every year until the development is finished in 2014.

Other new timeshare developments in San Antonio already are on line.

Hyatt Vacation Club has had so much success with its Wild Oak Ranch in Northwest San Antonio near Loop 1604 and Highway 151 that it has added a new sales office downtown, which could employ as many as 30 seasonal workers.

The Hyatt compound includes an indoor-outdoor pool, water park with water slides, shuffleboard, horseshoes, a game room, a media room, a fitness center and a 27-hole golf course.

Prices range from $6,350 for one week every other year to $43,500, which could pay for as many as six weeks of vacation time per year. The prices include a certain number of points each year that can be used for time at other resorts or at Hyatt hotels. The high-end packages include enough points for as many as six weeks of vacation.

A franchisee of Shell Vacation Systems has opened five timeshare units at its Salado Creek Villas, near Harry Wurzbach Road and Loop 410.

The Villas, owned by franchisee Gary Beckley of Winnipeg, Ontario, is a renovation of part of Hill Country Inn and Suites hotel, which he expects to complete in 2011.

"It's a work in progress," he said. "We add units every month."

Part of the complex will remain a hotel. The company also works on the point system and packages start at close to $10,000.

Beckley is in the hotel and timeshare business in Canada, but the Salado Creek Villas is his first project in the States.

Financial experts say timeshares aren't usually considered good real estate investments because they depreciate quickly. But they can make sense for people who like to vacation extensively at the same location.

"The real bargains are in the resales," said William Rogers, founder of Timeshare Users Group, a user-owned consumer group based in Orange Park, Fla. "The savings can be 50 percent or greater."

Rogers started the group in 1993 after he and his wife got duped in a timeshare exchange.

The most important thing about buying a timeshare, he said, is to make sure you understand exactly what you're getting before putting up the cash or taking out a loan.

"Education before you buy instead of after you buy. Unfortunately, that's not always the way timeshare sales go," he said.

Wednesday, September 06, 2006


Timeshare Ownership Comes With Problems

Lawmakers have chased away most of the con men who roamed the timeshare industry in its early days three decades ago. But in their place, Corporate America has swallowed the market and filled it with fine print.

Much of the industry is now a well-oiled machine that often nicks consumers at every level of purchasing, owning and getting rid of a time share. Unsuspecting buyers face:

--High-pressure sales tactics

--Expensive financing

--Convoluted reservation systems

--Volatile and steep annual fees and questionable management

--A dismal resale market in which owners virtually must give away their units in order to get rid of them.

Pitches and promises

Helen Allston does not have the luxury of luxury. The 56-year-old Summerville resident has been on disability from her job at the Postal Service since her car was rear-ended in 1997. She is the main support for her 32-year-old son, who is learning disabled and works as a custodian. She has learned not to count on promises, which were exactly what she heard when her boyfriend wrangled her into a timeshare sales pitch on Edisto Beach in 1998.

"I had no intention of buying them and I told him so," Allston said. "I watch my money. ... I wouldn't spend this much on something like this."

The salesman, however, sensed that the boyfriend was won over and attacked Allston's skepticism. He said he was disgusted that the pair would even think of turning him down after he offered up confidential information, Allston recalled.

"He was actually making me feel like dirt for not wanting it," she said.

The guilt tactic worked and the couple paid $3,600 before leaving the office that day - most of which went directly into the pocket of that salesman and his on-site managers, according to other time share salesmen interviewed for this article.

Timeshare promoters have to abide by strict state rules these days. They are not allowed to pitch units as an investment or discuss their possible resale value. They are not allowed to tell potential buyers that the properties can be rented for income.

But sales offices are pressure-cookers and most timeshare owners interviewed for this article said the salespeople they dealt with either broke the rules or came close to illegal territory.

Meredith Exum, a Fairfield saleswoman at the SeaWatch Plantation resort in Myrtle Beach, skillfully stayed within the rules when responding to a Post and Courier reporter who inquired as a member of the public a few weeks ago: "We're not licensed Realtors, so I can't tell you anything about selling or renting them," she said. "Now, do I have owners that do both of those things? Yes. I'm not going to lie to you."

Another Myrtle Beach timeshare salesman, who asked to remain unnamed to avoid retribution from his employer, said good salespeople can earn between $90,000 and $120,000 a year along the Grand Strand. Top sales promoters on Hilton Head Island regularly gross more than $200,000, he said.

Between 2000 and 2004, 14 percent of time share revenue went to paying sales commissions, according to a March report analyzing the industry by PricewaterhouseCoopers, a New York-based auditor.

"Honestly, a salesman is probably going to tell you anything that works, because it's commission," the Myrtle Beach salesman explained. "And they'll finance anybody. They don't give a crap if they have credit or not."

Since the start of 2005, at least six lawsuits have been filed against Hilton Head-based Trew Holdings LLC, alleging that the company's salesmen lied while pitching time shares at its Coral Sands resort, one of four time share properties the company owns on the island.

Archie Elliott, a former salesman, detailed the deception in November for a lawsuit filed by 66 owners, testifying in a sworn affidavit that the staff knowingly promised to rent the units for would-be buyers, buy them back if they ever wanted to sell and grant an extra week's stay, even though none of those provisions were offered in the contract.

Trew Holdings' defense attorney did not return phone calls for this article.

The S.C. Real Estate Commission, which regulates more time share resorts than any state but Florida, has received about 60 complaints about Trew Holdings' properties in the past five years. Most of the gripes involved sales tactics similar to those outlined in lawsuits.

John R. Pitts, Jr., the commission's administrator, acknowledged that misleading sales pitches are a problem industrywide, although the state fields few complaints about some of the biggest players in the market.

"What (buyers) are told verbally and what's in the contract often are two different things," Pitts said. "I would love it if this article would warn the consumer to read the contract before buying, don't just take someone's word on it."

Illegal sales pitches, he added, are particularly hard to prosecute, because they usually pit the buyer's word against the seller's. The contract, which many consumers don't look at closely, often has a disclaimer that says buyers should not "rely upon representations other than those" on the paper in front of them.

Giving, then taking

The points system

and talk to a different agent.

"It was a little bit of a hassle, but you learn how to do it," Terre said. "You learn how to play the system, and that's what it is, playing the system."

But after almost three decades as a time share owner, Terre recently reached his breaking point. He was sitting in the indoor pool of a Myrtle Beach resort when pieces of the ceiling fell in the water around him. A few months later, after checking into a brand new Myrtle Beach resort, the keys didn't work and the appliances were so noisy that he couldn't talk on the phone.

"I'm just thoroughly disgusted with all of it," Terre said. "I'm not going to buy any more points and I wouldn't recommend them to anyone."

Terre also said most of the people he talks to at time share resorts feel the same way and want out.

When asked about customers having trouble booking, time share developers and the industry trade group invariably blame the problems on misinformed customers, not complicated booking systems or oversold resorts.

Thornhill, with Bluegreen, said learning how to use a time share is a big education process. "We do our best to work with customers," she said. "But a lot of times they don't understand the legal obligations that they sign and read."

Skyrocketing fees

Reservation or no reservation, time share owners get billed regularly, coughing up fees to pay for maintenance and occasional refurbishments. These charges generally run between $150 and $1,000 a year and can add up to the original sales price of a unit over 10 or 15 years.

A lot of buyers fall behind on these payments. In 2004, the average week of time share ownership cost $479 in annual maintenance fees, according to an industry trade group. The March study by PricewaterhouseCoopers said some 7.4 percent of time share owners were delinquent in paying those fees.

In addition to sales revenue and high-interest loans, many developers collect a steady stream of recurring fees by managing the resorts that they built, a practice that has sparked criticism. Their employees often dominate the ownership committees that set the annual charges and hire contractors. Some publicly traded time share companies highlight these arrangements in filings with the Securities and Exchange Commission.

Byron Wiegand, a former time share developer who owns California-based Timeshare Resale Alliance, said this is a "total conflict of interest" that is gouging consumers.

"You've got the weasel in charge of the henhouse," he said. "And they're just fee-ing them to death ... stuffing the money in their pockets as fast as they can."

Individual buyers own such a miniscule portion of a resort that they often don't bother exercising their voting rights. Once developers are in charge, Wiegand said, problems often start. Fees go up, maintenance is neglected and one-time "assessment" charges are levied.

Cutting losses

Time shares, like most cars, immediately plummet on the resale market. That's one of the reasons banks won't finance them directly.

Fairfield, for example, was charging $155 for 1,000 points earlier this year. Reserving a week at the company's two-bedroom Myrtle Beach units in the middle of summer requires at least 21,000 points. Yet those same points were fetching less than $20 per 1,000 in recent eBay auctions - roughly 13 percent of the retail value. A Summer Bay Resort time share in Las Vegas recently sold for $26, according to a list of completed eBay auctions.

Wiegand's Timeshare Resale Alliance won't play with points.

"We just tell people, 'I'm sorry that you bought them,' " he said.

Some developers discourage people from buying on the resale market by telling them they won't have as much booking clout or privileges if they buy a second-hand unit. And the industry is still plagued by shady resale firms, boiler rooms full of hucksters who promise great results - even profits - in exchange for a few hundred dollars. Most states outlawed these operations from charging an up-front listing fee, but some operators skirt the rules by calling the payments "appraisal" or "assessment" fees.

Pat Pendleton, who resells time shares out of her Surfside Beach realty office, said most resale companies will "tell people anything" to get the up-front fee. "The majority of them are just advertising companies," she said. "They aren't even licensed to broker a sale. ... And they don't even have to sell them, because they're making so much money up front."

One of the biggest time share fans interviewed for this article was Jack Brewer, a restaurateur from Charleston, W.Va., who bought on the resale market. Over the years, Brewer purchased four time shares from Pendleton Realty, each for about what he would have paid to stay at a hotel for a week.

"It all works for me," Brewer said. "Resale time shares, as far as I'm concerned, is the way to go."

Adding it up

Helen Allston, however, could have rented a lot of nice hotel rooms for the thousands of dollars she and her boyfriend paid to a time share developer. And the thrill of being the owner of a vacation getaway wore off quickly for her, the day she received the gifts that helped clinch the deal.

"The steaks (they sent) were so tough that nobody could eat them; the grill was one of these dime-store Wal-Mart ones," she said.

Allston and her boyfriend have paid off the unit - $353 a month for seven years, including $11,031 to cover the developer's 14.4 percent interest rate. Even though she has never stayed at the Edisto Beach property, Allston still pays $1,440 a year in maintenance fees. She also has forked over another $700 to a Florida resale company that has yielded no results. Now, she's not even trying to recover her money. She's just hoping to get out of her contract and to stop the payments. If Allston stops sending checks, the developer will eventually take back the unit, but not before planting some red flags in her credit report.

"There's no way we could have used this thing enough to make our $15,000 or $20,000, or whatever we've got invested, worthwhile," she said.

Tuesday, September 05, 2006


Real Estate Agenta Aids In Timeshare Cast-Offs

Pat Pendleton is a bit of a softie. Her Surfside Beach real estate office is full of stray cats that she did not have the heart to turn away.

Pendleton has the same problem when it comes to distraught timeshare owners - the hordes of financially anemic consumers deserted by the industry. They call her in tears. They come into her office and beg.

"There are so many injustices in the business," she said. "They think I'm the greatest thing since white bread."

This is why Pendleton, at a spry 64 years old, has not hit it big by flipping million-dollar beach homes. She spends almost all of her time collecting timeshare cast-offs and matching them up with savvy buyers, bargain hunters happy to snap up a time share unit for thousands of dollars less than developers are selling them for. Not all of Pendleton's sellers are thrilled to hear how much money they will lose on their investment, but Pendleton is a realist about the dismal resale value of time shares.

"I say 'I can either tell you the truth or tell you what you want to hear,' " she explained.

Pendleton started selling real estate in Columbia 25 years ago. She moved to Myrtle Beach in 1987 and, as a relatively green broker in a new office, she started handling time share sales. A few years later she incorporated Pendleton Realty Inc., now a six-person business that almost exclusively handles fractional properties.

"I guess it just became my niche," she said.

Building the business has not been easy. Developers don't want to lose market share and don't want word to get out that their timeshare units can be had for 30 percent to 50 percent less, on average, than the prices they set. They often don't let Pendleton on their properties, and they try to scare consumers away from the resale market by telling them "used" timeshares don't come with the same perks and reservation clout.

"It's just lies really - baldfaced," Pendleton explained.

And then there is the constant image battle. For years, the timeshare resale industry comprised boiler rooms of swindlers calling owners and promising to flip their unit at a profit if they pay a few hundred dollars up front. Most of those shops never advertised any units, let alone sold them. Lawmakers and attorneys general have cracked down on some, but not all, of those operations.

Meanwhile, Pendleton has kept shuffling around her cramped strip-mall office; punching on a speaker-phone to listen to the sobs of another potential client; spinning through her vast Rolodex of time share fans; and shooing stray cats off of her cluttered desk.

"I've never had a complaint from a buyer," Pendleton said. "And I don't know how many timeshare developers can say that."

Friday, September 01, 2006


Timesharing Is Caring

I think you’re giving out a little bit of bad advice when you say to never take timeshare companies up on their offers [“The Hard Sell,” issue 31]. I agree that the weekend vacations they offer may sometimes not be worth it. The cash and ticket discounts they offer, however, are almost always worth it. The trick is to not do what either you or your girlfriend did. Her mistake was making them believe that you had money available to spend on their overpriced product. Your mistake was your irrational behavior. Think about it. For most people, paying thousands of dollars for what these companies offer is in and of itself an irrational act. Your behavior said you were exactly the type of person that would purchase from them.

Also, NEVER let them drive you ANYWHERE. If they are leaving the property, tell them you will drive yourself. Here’s my approach. I’m one of those professionals you referred to in your article. My wife and I go in and immediately let the salesperson know that we already know everything about timeshare and how it works. We let them know that their offer must beat the great deals we already get via the Internet and that the offer must also be better than what can be found in the timeshare resale market. Some salespeople will immediately send you on your way with whatever gifts were promised to you. Others will attempt to show how their plan is better financially. It doesn’t take a math whiz to find the flaws in their math. Point out those flaws and they’ll either acknowledge that you’re not a potential customer or they’ll conclude you’re too much of hassle to bother with. If they try to stretch it to their 90-minute limit, at the end of the 90 minutes stand up, let them know that you’re not interested.

I made $800 cash and got free VIP seating at the Marriott Resort’s Luau (purchase price for tickets in the VIP section are $300) while in Maui. I made $700 cash and got free tickets to Sea World, Disney, and Busch Gardens while in Orlando. I made $600 cash and got free tickets to the aquarium while in Gatlinburg. This is just the short list of the tours we’ve taken. I’ve stayed at some presentations for as little as 15 minutes. The max I’ve ever stayed is 90 minutes. I always schedule them early in the morning (which usually includes as free breakfast as well). This frees up the rest of the day to spend all the cash you make.

There is a way to make these timeshare offers work for you. It just takes a small amount of time and even lesser amount of effort.

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