Exit Strategies?

[Doggy50k]

We have all read of late that there are a number of members who are finding it beyond their means to retain their membership (though I would be curious to see if any had asked to use their points to offset some of their MF's)

Obviously there are some existing exit routes:

• Death of either member with no possibility of transferring to family members – copy of death certificate will be required.

• Bankruptcy or CAB/solicitor's involvement to resolve serious debt issues – specific documentary evidence detailing income, outgoings, assets and liabilities will be required.

• Over 75 years old with no possibility of transferring to family members – copy of birth certificate will be required.

• Medical problems/terminal illness necessitating reduced travel and/or decrease in financial resources to maintain membership – medical evidence will be required.

So

Let's have a proper debate over what we as members would see as being acceptable (to both us and the company) additional exit strategies?

So far it is my understanding that the removal of the resale only to existing members clause would be acceptable to the membership - and could result in more revenue for the company.

Another route might be to provide significantly more resorts within the UK of a high standard to give the aging membership more choice without having to relinquish membership.

Perhaps a higher value being apportioned to the points used to offset MF's

Any other ideas?

[Doggy50k]

Oh - and just to clarify my position on this:

We are not looking for an exit for many many years - our MF's this year are £2670, and for these we have booked 13 full and part week holidays next year.  Many of these are for us as a family but some are also for friends.  We are happy with the product and we are happy with the value for money we are getting from it.

We have two young children (and I am a school governor) so we are restricted to using our points in the school holidays (except for two weeks when My Mother is going to Lanzarote)

We sympathise with those who have insufficient points to make best use of the system - we found the best solution to that was to get more points.

[Keitht]

quote:Originally posted by Doggy50k



We sympathise with those who have insufficient points to make best use of the system - we found the best solution to that was to get more points.

What might be entitled the "Marie Antoinette" solution[]  People are trying to get out because they can't afford the maintenance fees, not because they aren't getting best use of their points.  Suggesting spending on more points really does sound like a DRI sales pitch.[]

[Doggy50k]

Sadly Keith there are lots of members out their with insufficient points to get decent holidays - more a case of not value for money (as they are saying on another forum) - mostly down to The Former Company sales people

As the basic fee is over £400 - the more points you have the better value for money it works out at.

As for calling me for "selling" - I dont think so some how - we are happy with our points, but yes perhaps they are not for everyone.  I dont think I mentioned letting anyone eat cake...[]

Please can everyone try to avoid, what should be a contructive thread, descending into chaos?

[Doggy50k]

Time for a little bump for this thread.

I think that, when we are considering exit strategies, we have to consider what the standpoint would be of those joining now.

Obviously DRI are not only selling additional points to existing members, but they are attracting new members too.

Those new members are going into the system with their eyes open with the cost of management fees.

What would they see as being an acceptable exit route?

[tonyc]

Doggy

This is an incredibly involved and far-ranging subject and one, I suspect, that could raise temperatures considerably.

In your opening post to this thread you mention the four "escape tunnels" that currently exist.  Qualification for these is governed by either (1) the ultimate escape clause, (2) bankrupcy or serious debt, (3) age, and (4) medical condition.

It is noticeable that at least three of the four you mention each have strict qualification requiring the production of proper certification verifying the claim.  The fourth, which appears to only require the production of a birth certificate to prove that you are over 75 years of age, seems somewhat strangely billetted with the others.

Assuming that you are over 75 is it sufficient for you to produce a birth certificate and merely state that none of your family is prepared to take on the membership?  I assume that is probably the case, because it is difficult to see any court in any land acknowledging that, when one signed up for membership (to 2054), any descendants either living or not yet born was obligated to take on the membership from you.  Can either you or anyone else enlarge on this point?  Perhaps "p71259" might be able to step in and advise please?

[tonyc]

I think I ought to provide a bit of an update on this thread as like the "graceful swan in the water, there is a lot of action going on below the surface".

Not surprisingly to me, within minutes of making the posting above at 21.02 on 10 January, I received a Private Message from Patrick Duffy - the Chief Experience Officer at DRI - promising to take up my questions and get me the necessary answers.  Proof - if proof were needed - that our friends in DRI keep an eye on what the membership is doing and the concerns they have and, as a result, are only to happy to respond to reasonable requests and questions.

I then took Patrick's offer of help to the ultimate by penning an email to him with a list of observations explaining my understanding of things and including a very lengthy list of further questions that I would be grateful to have addressed.  When printed I was surprised to see that my email ran into three A4 pages, so my questions were far-ranging on the subject of "exit strategies" and covered the subject in considerable depth.

Patrick has passed my email on to Sarah Hulme - DRI's Vice President of Global Club Operations.  Sarah has been in touch and I am pleased to report that, given the depth of questioning on my part, she has promised to let me have a detailed response to my questions in the next few days.  I will be out of the loop for a couple of weeks fairly soon, so I suspect any delay will be more down to me than anyone at DRI.

I think it is important that we know what the rules are if we are to discuss this in any detail and, hopefully, have a sensible debate that might even provide "food for thought" to the Diamond Resorts hierarchy.  If we can come up with something that helps those members that are really suffering to meet their financial obligations and that is also acceptable to DRI, then that must be good.  If we can't - well, at least we tried!

[daveandmaureen]

Good evening all,

I intended to respond to this thought provoking thread when Doggy first opened it. I am surprised that there have not been more resonses.

I could comment in a really lllooonnngg post on numerous aspects of this thorn subject but I'm sure you can all live without me doing that!

I will comment on one aspect alone.

Elsewhere on here I read this evening that another poster had sold 120(00) points on E-Bay for 6p!!! They thought it was a modest return (my entry for the understatement of the century) for what had been £15,000 of expenditure laid out less than 10 years ago.

TonyC has advised that DRI are considering some of his points on this matter although to date we haven't had any response (not a public one anyway).

The crucial point IMHO is this.....
Currently how well are DRI doing selling points to brand new customers or for that matter additional points to existing Points Members?

One thing is certain if "Joe (or Josephine) Public was aware of the lady who sold £15Ks worth of points on E-Bay and was relieved to get 6p because it took away the worry of funding MFs on an ongoing basis then it would be a brilliant salesman who could sell such a product even in a helpful financial climate. A total genius of a salesman if he could sell such a product in today's credit crunch days.

We are advised by DRI that they currently are the holders of 10% of the issued DRI points (so their MFs must be enormous) but of course they DO need some inventory to use to attract freebie guests in the hope of selling them the DRI Points Club product.

If DRI are currently having much (any) success selling points then it would surely be a good business practice for DRI to offer disaffected Points Members (disaffected for whatever reason) the opportunity to hand in their Points Certificates and walk away. DRI could then sell the points they had acquired for free (they could even make it a condition that MFs are fully paid up and the points thus acquired would be absolutely free for the next 12 months).

Name another business where a retailer can have trading stock that has been sold once already handed back to it "free gratis" and then sell it again for more money than they sold it for the first time around.

The fact that DRI seems disinclined (other than on a very rare and short occasion like last summer I believe) to allow Points Members to hand in their Certificates and walk away suggests to me that the "Sales" side of DRI is not currently booming.

I will do the same as Doggy and advise that at present my wife and I are happy with our DRI investment (170(00) points currently costing me £1,460 in MFs payable at £135 per month on Direct Debit). I must however add one qualification, I reach the age of 60 later this year and will retire having served the same employer for over 42 years. By comparison with many my Works Pension will be generous but I must confess I will have to think very seriously about continued DRI Points Membership if MF increases of 30%+ on an annual basis are to become the norm.

Our MFs for 170(00) points cost £869 in Jan 2006, three years later they cost me £1460. I hear and I understand the comments about why the MFs have increased. Notwithstanding these explanations my income will halve for the next 5 years (until I receive the OAP) the current increases will quite simply price me out of the Market.

Regards

Dave K

[Keitht]

Dave,

The 75 years of age 'exit route' has potential.  If an existing member has a parent of qualifying age it would seem that all that is needed is for said parent to purchase the minimum permitted points, or excess inventory, and then 'buy' the points from their offspring.  A letter stating that their offspring will not accept transfer upon the demise of the parent would seem to fulfil the other requirement.
The only problem I see is that DRI will find a way of changing what seems to be a simple exit route.

What I should add is that I think the 'exit' problems being experienced by DRI are going to become far more common both for them and other developers / resorts.  Timeshare in general has such a bad reputation, much well earned but some not deserved, that disposal by sale is likely to become more and more difficult.  That automatically means that those who purchased back in the 80's and early 90's, before the problems were widely reported, and reaching towards the retirement years, are likely to be stuck with a commitment which they simply can't service.  Will the t/s companies seriously go the route of taking 100's or 1000's of OAPs through the courts??

[Doggy50k]

Hi Keith

Do you know how much the "minimum" buy in costs nowadays?

I think it would probably pay for the next 7 to 8 years management fees - probably not an option for anyone claiming to be unable to afford management fees.

[Keitht]

quote:Originally posted by Doggy50k

Hi Keith

Do you know how much the "minimum" buy in costs nowadays?

I think it would probably pay for the next 7 to 8 years management fees - probably not an option for anyone claiming to be unable to afford management fees.

Answer - Obviously not.  Must start looking for plan B. []

[tonyc]

quote:Originally posted by daveandmaureen


TonyC has advised that DRI are considering some of his points on this matter although to date we haven't had any response (not a public one anyway).

Dave

I won't rise to the "bait".  Suffice to say that, on 16 Jan, I remarked that Sarah Hulme promised me a response in a few days and that, as I was going to be out of the loop for a couple of weeks, I said that I suspected that any delay would probably be down to me, not her.

True to her word, Sarah sent me a lengthy email response on Friday 23 Jan and, as I was in the process of packing for a week's break in bracing Cromer, I did not look at the response in any great detail.  Instead, I decided it could wait for my return when I could look at it's content more closely.  I only got back from Cromer last night and hope to put something together for posting over the course of the next few days.

[Keitht]

quote:Originally posted by tonyc
I was in the process of packing for a week's break in bracing Cromer,

Wow.  You really do travel to the most exotic locations Tony. []

[robnx2]

free? No strings attached just free 2500 sunoptions points. Contact me at newbielink:mailto:robnx2@yahoo.com [nonactive]

quote:Originally posted by Doggy50k

Sadly Keith there are lots of members out their with insufficient points to get decent holidays - more a case of not value for money (as they are saying on another forum) - mostly down to The Former Company sales people

As the basic fee is over £400 - the more points you have the better value for money it works out at.

As for calling me for "selling" - I dont think so some how - we are happy with our points, but yes perhaps they are not for everyone.  I dont think I mentioned letting anyone eat cake...[]

Please can everyone try to avoid, what should be a contructive thread, descending into chaos?

[daveandmaureen]

Afternoon all, Tony C in particular,

On 1 February Tony posted as follows "I only got back from Cromer last night and hope to put something together for posting over the course of the next few days".

Have you considered your update or have I missed it posted on a different thread.

Cheers (this is a serious enquiry not baiting at all honest!)

Dave K

[staffs_paul]

you can change your points for weeks (at no cost or at least it was when i did it 18 months back)  this is cheaper on the maintenance fees. it also allows you to sell to anyone not just DRI memebers.

Is the age get out still an option for these fixed weeks i wonder, if i signed my 2 weeks over to my mother (she is 78) then at some point she was not able to continue & i did not want them back, would that fullfill the get out clause conditions?

[Mavo]

quote:Originally posted by staffs_paul

you can change your points for weeks (at no cost or at least it was when i did it 18 months back)  this is cheaper on the maintenance fees. it also allows you to sell to anyone not just DRI memebers.

Is the age get out still an option for these fixed weeks i wonder, if i signed my 2 weeks over to my mother (she is 78) then at some point she was not able to continue & i did not want them back, would that fullfill the get out clause conditions?

 As far as I am aware there is no official age get out.
I do understand that there are thoughts and minds being put towards a number of issues and some form of exit strategy could well be part of that agenda but there is nothing forthcoming at the moment. So speculating around it is not really an option.

[Cogland]

The impression I get from having attended 2 recent meetings is that its only a matter of time before some sort of resale program is put in place. The solution as to what happens when members are no longer able to enjoy their membership has been discussed in detail on many forums and some interesting ideas have been suggested.I think the company is aware of the problem and wishes to work towards a solution because it is in its own interest to do so. I hope they succeed.

[seasiders1]

I believe a revised exit strategy is needed, both for new and existing members.

With regards new members, most will be as naive regarding timeshare as we all were at the outset, and may not realise the implications of being tied into potentially high fee increases. Prior to the DRI takeover, i don't think any of us had experienced such increases with no way of getting out, so it was never really an issue, and as long as the company is run correctly, should never arise again.

As a result, i don't believe that interest from new members has fallen or being put off by the lack of exit strategy, only those referred by existing members, as until most of the portfolio has been refurbished, i don't feel i can recommend the club to anyone at the current fee level.

We would hope that an avenue is put into place for those wishing to get out other than converting to owned weeks, and trying to sell that way, but feel certain restrictions should be put in place to slow down a potential mass exodus.

Yes we should be able to sell on the open market, as you can owned weeks, but perhaps only after say 5 or 10 years membership, where after that you should have got your initial investment back.
There should be no minimum value to the points as when we all joined, we knew we weren't buying an investment, but a shared experience.

As was rightly pointed out before, you may not receive anything for your points, and even end up paying the transfer costs, but you are then free of the fees liability.

I wouldn't want to go down the road of people expecting a return or even compensation just because it wasn't to their liking. Yes at present the rules are very one sided, but i certainly don't want to reach a situation where a minority can ruin it for the majority.

On the flip side, perhaps it could be arranged that you can leave early on, but at a massive loss to your intial investment on a sliding scale similar to the system for products like mortgages and investments.

I shall leave you to ponder these thoughts

[Cogland]

I had some information from HPB Management about something called The Holiday Property Bond.

I read the leaflet with interest and noticed that they have resorts throughout the UK and Europe.They seem to have answers to many of the problems that we face because you can cash in your bond at any time after 2 years for its unit value which is quoted in The Financial Times. They do warn that doing so in the early years will affect the value.

Maintainance costs are said to be met from investment so they claim annual fees to be just £100 per annum. I have no knowledge of this company but they seem to have been around for a long time and overcome many of the problems which we trying to find answers for namely a fair exit policy and affordable annual fees.

I have no connection with this company . I am a Diamond member and have spent 6 weeks at DRI resorts in the last 12 months. I wondered if there is anything to learn from the way these people organise themselves.
Regards