Diamond Resorts Quietly Expanding Empire: A Look at the Timeshare Club/Trust Concept

Las Vegas based Diamond Resorts International® has been quietly expanding its timeshare holdings; continuing a trend of buying assets of bankrupt developers. Having established itself as a leader in the timeshare industry, with several successful Las Vegas timeshares including the popular Polo Towers, Diamond Resorts made headlines in 2007 with their purchase of  the Sunterra Corporation, a developer with a long history of financial woes. By most accounts, the Sunterra acquisition was a successful one – providing stability for Sunterra’s 326,000 timeshare owners. In recent months, Diamond Resorts has set its sights on two more troubled developers: ILX Resorts and Tempus Resorts.

Los Abrigados Resort & Spa - Sedona, AZ

ILX Resorts is the Arizona based developer of ten resorts, including the Premiere Vacation Club at Los Abrigados Resort & Spa in Sedona. Tempus Resorts, headquartered in Orlando, Florida, is the developer of the Mystic Dunes Resort & Golf Club, located just 3 miles from the Walt Disney World® complex. Diamond Resorts’ plans have owners at both resorts wondering what to expect from the new management. If the Sunterra acquisition is to serve as an example, then Tempus and ILX owners should find themselves in good hands, but there will be changes…

Mystic Dunes Resort & Golf Club - Celebration, FL

Ownerships sold by both Tempus and ILX are “deeded” weeks, while Diamond Resorts’ vacation ownership product is a Club/Trust arrangement. Deeded owners will, or course, be able to retain their deeded weeks – but there will be enticements for Tempus/ILX owners to upgrade to the Club/Trust, and over time many likely will. This scenario highlights one of the paradigm shifts occurring throughout the timeshare industry: the move from deeded owner-managed resorts to Club/Trust developer-managed resorts. We’ve seen this trend with Blugreen, Festiva, Welk Resorts, and others, but what are the implications for the individual owner?

Real Estate Investment vs. Use Product

We’ve touched on this issue in previous posts: how should timeshare be perceived, as an investment or a use product. In the case of a deeded timeshare, owners are wise to acknowledge they have made a real estate investment. Once developer sales have ceased, the owners (through the HOA/POA) will be largely responsible for decisions regarding upkeep and amenities at their resort. This can be a double-edged sword, as resorts with an active owner base have been able to keep maintenance fees low and timeshare resale values stable, but resorts with unengaged owners often suffer from soaring costs and abysmal resale values. Ultimately, owning a deeded timeshare is a responsibility – one that few developers explain fully at the time of sale.

The Timeshare Club/Trust Concept

With a Club/Trust timeshare product, owners receive a true “use product.” While specifics vary from brand to brand, in a Club/Trust arrangement the timeshare is deeded to either the developer, or more often to a non-profit Trust created by the developer. Decisions about upkeep and maintenance at the resort are made by the developer or trustee. Since individual ownerships are not directly tied to real property, maintenance fees are calculated as a fraction of the aggregate upkeep costs of all resorts in the Club/Trust. In theory, this arrangement puts the entity with the most knowledge of resort operations (the developer) in complete control, and as long as the developer continues selling Club/Trust timeshares they have an incentive to manage costs carefully in order to attract new buyers. In practice, the results have been mixed; with some owners happy to have less responsibility, and others complaining of excessive maintenance fees.

Choosing The Right Form of Ownership for You

Owning timeshare, in any of its variants, is a smart choice for regular travelers – a means to save money, and a hedge against inflation (During the height of the recession timeshares remained over 80% occupied.) Both deeded and Club/Trust ownerships have advantages and drawbacks, and each family is different. If you’re considering buying timeshare, consider the level of involvement you want to have with your resort. A Club/Trust ownership represents a sharp departure from the ideal of timeshare – owning a fraction of the vacation home that would otherwise be unaffordable – but delivers on the promise of timeshare as a use product. For those ready to make the departure from deeded property, Diamond Resorts timeshare stands out as the clear choice!

6 comments January 5th, 2011

Orbit One Timeshare – Space Age Cool, Unbeatable Orlando Location

During the early 1980′s, tourism collided with the space age in Orlando, Florida. Walt Disney World introduced EPCOT Center in 1982, featuring the Spaceship Earth ride inside its iconic sphere. Just two short years later, Florida developer Island One, debuted its ORBIT One timeshare resort. With modern glass and steel architecture, and buildings with names like Saturn, Mercury, and Venus, Orbit One Vacation Villas captivated the imaginations of Orlando’s tourists.

Both EPCOT and ORBIT were originally conceived of as acronyms: EPCOT being the Experimental Prototype Community of Tomorrow, and archived records refer to O.R.B.I.T. as being the resort’s proper name, though no one there could tell me what the acronym stood for – perhaps someone who reads this could shed some light.

Over nearly 30 years, things change. Now that we’re in the future, our “communities of tomorrow” bear little resemblance to EPCOT Center; itself rechristened as simply Epcot. When sales commenced at Orbit One, the nearest neighbors were grazing cows, but today development has transformed the former cattle town of Kissimmee, Florida into a tourist epicenter.

As the Walt Disney World theme parks have grown in numbers, so have the various access roads that serve its many visitors. The street Orbit One is located on, Entry Point Boulevard, has perhaps fulfilled its original promise by becoming an “entry point” to the Disney complex. As anyone who has spent hours of their vacation stuck in Orlando traffic will tell you; the closer the better. Timeshare owners and guests at Orbit One Vacation Villas need only to drive across the street to get into the theme parks.

Had the resort been allowed to stagnate, the space age theme might seem dated and kitsch, but Island One has done a superb job of maintenance and upkeep – the overall effect being somewhat retro and charming. Each two-bedroom villa at the resort features a full kitchen, private patio, washer/dryer, and jetted tub. On-site “galactic” amenities include a second pool with water slides, fitness center, tennis courts, and game room.

If you’re considering buying timeshare in Orlando, or are just a regular visitor to Central Florida, don’t overlook the Orbit One Vacation Villas. Between a sluggish economy and a resale market in turmoil, prices are lower now than they’re likely ever going to be again. For those willing to look beyond the horizon, there is an undeniable value in owning a well-maintained timeshare this close to Disney.

1 comment September 14th, 2010

Timeshare at Westgate Lakes Still Delights Visitors to Orlando

With over 80 timeshare resorts in the Metro Orlando area, and new developments popping up regularly, it’s easy to overlook some old favorites. There are certainly a few Orlando timeshares that continue to delight, long after their fifteen minutes have past. One property that warrants a second look is Westgate Lakes Resort & Spa.

When Westgate Lakes debuted in the mid 1990′s, the design of its condominiums was nothing short of revolutionary. While other developers began offering ever-complicated points-based ownerships, Westgate Resorts focused on offering consumers a better product: units featuring big-screen televisions with surround sound, master suites with enormous jetted tubs, leather sectional sofas, and private screened patios.

The resort’s architecture closely mirrors that of the million-dollar residential developments just across the Big Sand Lake. Probably the best testiment to Westgate Lakes‘ thoughtful design is that it doesn’t look dated – even after 15 years. In fact, thousands of families continue to purchase timeshare intervals at the popular resort each year.

If there is one criticism that’s commonly leveled against Westgate, it’s the high-pressure approach of its sales team. Regardless of the validity of that assessment, buying timeshare resale means never having to speak with a salesperson. Interested buyers will find great deals on Westgate Lakes timeshare resales, often at thousands less than developer pricing!

Planning a vacation to Orlando, but not sure you’re ready to buy timeshare? Consider a Westgate Lakes Resort timeshare rental – you’ll stay as an owner-guest with full-access  to resort amenities, no room taxes at check-in, and no timeshare tour required!

Not using a Westgate ownership? Now may be the perfect time to sell your timeshare.

See all Orlando Timeshares – See all Westgate Timeshares

2 comments February 10th, 2010