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Timeshare Industry Leaders Speak
by Sharon B. Drechsler, RRP
owner/operator
Drechsler Communications
We interviewed top echelon power-houses during the ARDA Convention in Las Vegas, this past month. We shot video of a number of the most prominent and high-profile vacation ownership/timeshare/fractional professionals and posted their interviews on MANDO TV – the new, YouTube-styled vacation ownership industry blog on www.askmando.com. Some of their insights were intriguing and provocative. Here, in alphabetical order, are some of the highlights:
Cathy Backus, Worldwide Director, CSA Travel Protection
While Lani Kane-Hanan and others on the East Coast were working on ways in which they could help women within the timeshare industry to connect and support one another, Cathy Backus and others were doing the same thing in the west! Backus’ group had already gone as far as to legally obtain non-profit status, establish a Web site and sign up some members. And so it naturally made sense for the two groups to connect and congeal into one, Women in the Industry, or WIN.
Says Backus, “I’ve been in the travel business for thirty years, now. Having been on the other side of the industry dealing with travel agencies, trade organizations, tours and cruise lines and in all these other organizations, you see a lot of women’s organizations. I came into the timeshare industry about seven years ago and really haven’t seen anything like that. So several years ago, I began talking to women and asking if they’d be interested in joining an organization like that. There was quite a lot of interest in that. So, I’ve been working for the last few years ago to start this organization.”
Once Cathy, Lani and others spoke on a conference call, the rest of the plan came together quite naturally. “It’s definitely something that’s been needed for a long time. For many years, vacation ownership has been a man’s industry. That’s how it started and that’s how it developed years ago, when timeshare first became popular. But more recently within the last ten-to-fifteen years, we’ve seen an influence of women in the industry and so we’re simply trying to create a forum for women to come together to network, to provide research and education, plus pursue philanthropy, both regionally, nationally and globally.”
WIN’s first newsletter was produced in time for the meeting and addresses the flexible work week, among other items. To get a copy of the newsletter or for women interested in more information about WIN, visit www.womenintheindustry.com.
John Rogers Burk, RRP, Attorney at Law
‘Roger,’ as he prefers to be called, is an attorney with thirty-four years in the resort-real estate field and specializes in non-deeded timeshare interests. He shared with us why the sale of timeshare as a non-deeded interest is more beneficial to a resort, than the more traditional, deeded interest. “Nineteen years ago the founders of Trendwest Resort came to me and wanted to set up a multi-site, non-specific timeshare club. I said, here’s how you do it: You convey the property to the club in exchange for the right to sell voting memberships in the club. And so members of that club have the same bundle of rights as if they’d been given a deed. They just don’t have the personal exposure for liability for what happens on the property. Plus, it’s much easier to foreclose if they walk away from their timeshare.”
Burk explains in the course of his interview how escrow companies are telling him they’ve processed hundreds of foreclosed weeks and nobody ever shows up to contest the proceedings. “They’ve either died or moved away. They just want to walk away from it.” He says that during a recent meeting of ARDA-Colorado, he heard talk that the state may soon allow non-judicial foreclosure. It’s still an expensive procedure to go through, as compared to the soft costs of sending a letter of cancellation to the owner of a non-deeded interest.
What can associations of sold-out resorts with deeded interests do, if they are able get the deed back? Burk says, “I’ve been preaching this for years. When they take back a week, just hold onto the deed and issue a membership. I’ve handled cases where, even under the governing documents, they didn’t specify that you had to use a deed to issue the timeshare interest and so they didn’t even have to amend their documents.”
Julie Crane, General Manager, The Banyan Resort
We caught up with Crane after her participation in an educational session entitled, “How To Go Green.” Her article advising managers of steps they can take to help the environment appears in the January/ February issue of Management & Operations magazine.
According to Crane, “The most important thing to realize in any green program is that you need to start with the baby steps, start with the low hanging fruit, and don’t just try everything at once. A good reference that I used during the presentation was you don’t climb Mt. Everest in a day. So you just don’t become green in one day. You definitely lay out a plan, set up a camp, get comfortable at that level and then move on.”
She advises that some of the simplest steps can become routine. “Simple things,” she elaborates, “like making sure that your ceiling fans are going in the proper direction, checking your coils on your refrigeration units, and making sure that the temperatures inside of those units, the refrigeration units, are set appropriately and not running too cold or too excessively can help a lot. The same is true with in-unit temperature gauges. Even if you don’t have an energy management system in place, it’s easy to just have the night security person walk around and check all the vacant rooms so that the air conditioners are at a favorable level.”
Crane urged her audience to encourage others, such as suppliers, to be more environmentally conscious. She emphasized the need to adapt a mindset in our daily routine.
“It’s more about awareness and once you become environmentally aware it’s amazing the number of things that just pop in your mind. Once you have this heightened awareness, little things – like even seeing somebody throwing away a recyclable item – just send you through the roof. So you can really keep in mind the little things. As long as you have a good plan for implementation you’re going to have a successful program.
“We’ve talked with our suppliers and gone the rounds with them, because they’ll send excess packaging that’s non-recyclable. They would use all these plastic bags, plastic popcorn nuts and everything for one little tablet of paper, for instance. We’re constantly battling, constantly requiring people that we do business with to meet our guidelines.
Crane explains that by implementing a plan that begins with low-hanging fruit, you can actually save money, rather than creating another line item in a resort’s budget.
“It’s more looking at your overall operation and monitoring your utilities usage, monitoring your temperature in your units, monitoring even your trash that goes out. Once you start recycling it doesn’t cost you anything to recycle. We’ve actually eliminated two trash pick-ups per week as a result of our effort. So all we’ve seen is a savings and the most amount of money that we’ve put into it right now is about $500 for our compost tumbler. Everything else had already been installed prior years. A lot of things just make good economic sense and now, as it turns out, they’re part of being green. A few years back when we replaced our decking with this post-consumer recycled plastic lumber, it was because it doesn’t require any maintenance for 25 years. And now it’s a green sustainable item.”
Jon Fredricks, President, The Welk Resort Group
Jon has been chairman of ARDA for more than a year and has sacrificed a copious amount of time, travel and intellectual capital as a volunteer on behalf of the industry. We asked him what drives him to devote his energies at this level. He replied that Welk Resorts has been a corporate member of ARDA since 1985. He, himself, started in the timeshare industry in 1987. He remarks that they’ve been beneficiaries of ARDA’s work through the years, whether legislatively, from education, research or just networking and connections. “When I saw the opportunity to give back by serving in a leadership role, I jumped at it,” explains Jon. He points out that the association’s staff makes his job a lot easier because of their intensive involvement and extensive capabilities.
When asked about what challenges for the industry he perceives coming on the scene, he replies without hesitation, “ARDA’s legislative agenda has grown from a one or two-person department to five or six, plus the involvement of lobbyists in twelve states working on a state level. Nationally, this is a challenging time. Being an election year, there’s certainly a tendency on the part of legislators to pass legislation addressing the sub-prime and mortgage crises. Timeshare can inadvertently be sucked into some of that legislation. We’re battling challenges all over the place in that regard.”
Fredricks was referring to ARDA’s current battle over the 2008 Foreclosure and Prevention Act (H.R. 3221), which presented an overwhelming challenge to sellers of timeshare. ARDA federal affairs staff rallied ARDA members to engage in a grassroots effort helping elected officials understand the unintended consequences of the bill, persuading them to carve timeshare out of the bill. Otherwise, without clarification, H.R. 3221 might have compelled timeshare developers to provide buyers with a truth-in-lending statement 7 business days prior to the date a potential purchaser visits the resort. ARDA’s efforts will now turn to the U.S. House of Representatives as they consider their legislation.
Fredricks mentions the public relations project being undertaken by the association. “We’re launching a public relations initiative that includes a consumer Web site to disseminate information about the industry. We’ll have a proactive campaign where we go out to communicate to the media about timeshare and the wonderful lifestyle opportunity it offers. We need to get our story off the real estate pages and generate positive stories in the travel section, where our news belongs.”
Alan Grindstaff, President & CEO, Mastercorp Inc.
MasterCorp offers turnkey resort housekeeping services. “We come in and literally do everything for housekeeping that the resort needs,” says Grindstaff, “whether it’s laundry, ‘general cleaning’ if you will, carpet cleaning…whatever is needed.”
“The biggest advantage is that housekeeping for most developers and management companies is a headache. It is very labor intensive, in fact, that’s all it is, is labor, and to be able to meet the needs of the industry, being higher standards as far as cleanliness, timeliness, and everything to do with quality, that’s really our focus, and we do it very well.”
Mastercorp’s clients select a housekeeping service for the peace of mind and freedom to concentrate on running their businesses. Adds Grindstaff, “In fact, the whole guest experience is incredibly important, and a major part of that guest experience is housekeeping. So we address that and take that headache away from them.”
The company also has a worker authorization process. “On the spot, we’re able to tell if an applicant is work authorized, or not. And when you consider we work everywhere from San Diego, up to Atlantic City and down to the Keys, and everywhere in between, you know we’re covering a broad market. Being able to tap into every one of the labor pools is very important. Ensuring workers are authorized is critical because it reduces liability that not only the developer or management company is exposed to, but also the board of directors and so on, so we’re very proud of that aspect.”
Grindstaff explains that his company has been in the timeshare industry for 26 years. “It’s been a long time. We’re working for every major developer in the market excepting a very, very few and we work for most management companies. Literally, we’re in nineteen states now, and anywhere you have a concentration of timeshare, I’m very proud to say we’re there serving those particular resorts.”
Lani Kane-Hanan, RRP, Sr. VP of feasibility & business planning, Marriott Vacation Club International
Interviewed during the Women in the Industry (WIN) networking reception, Kane-Hanan explained the newly-formed group’s mandate: “Over the last several years various women in our industry have gotten together at the ARDA Convention, as well as at the Fall Conference. We talk about how we can do more for one another, to support each other, to help foster each other in the industry and to create opportunities for new or younger women to join the industry. We thought to formalize this effort and create a networking opportunity.” Simultaneously, a group on the West Coast headed by Cathy Backus, CSA Travel Protection had created a group called Women in Timeshare. The two groups were merged and as Lani describes, “WIN is a result of the work of women who are passionate about the business and are veterans; who want to foster networking and the creation of opportunities, support philanthropic efforts and who want to give back to the community.”
Kane-Hanan explained that the evening’s networking event was the very first WIN event after years of trying. “We’re going to have an inspirational keynote speaker. And, we’re going to talk about what we want WIN to be; what our meetings will focus on, organizing regional chapters, a Web page and educational programs. When many of us started in the business, there were very few women and we didn’t know it was a viable career for us. Each of us had either a male or female mentor that helped us be successful. We thought how great it would be to help the next generation…to help educate them about things like work-life balance, gender differences, trends and opportunities.” According to her, WIN will be a way for women in the industry to not only obtain advice, but to get a sounding board. “It seemed natural to come together to help others, just as we were helped in our careers,” she says.
Shari Levitin, President & CEO, Levitin Group
Levitin was exultant that her company was celebrating its 11th ARDA Convention. As she puts it, in the early days “our goal is to help people develop personally, as well as professionally and to change the way the product is sold. We believe it’s the greatest product and program in the world and there’s a right way to sell it. We’ve been training salespeople via live training and in DVDs and that’s been good. What we’re finding today is that people need a different way of accessing the information and one of the first things we came up with in the fall was the iPod.”
Shari revealed that her company has recently struck a deal with Apple. Shari says they contacted Apple in the fall and asked, “Is it possible for us to take all the classic DVDs we’ve created and embed them in the iPod? And can we continue to update them so there can be something new – not just every month, but every week, every day?”
The answer was a resounding “yes,” and Levitin Group’s content is now available for purchase, with free podcasts soon to be available on www.levitingroup.com. The Group is planning to offer training not only on sales and marketing, but also management and leadership training. Shari has plans to offer industry-based news on her site, as well. “We found that the better sales people, leaders and managers in this industry want to know more and want to grow all the time.”
The company has plans to offer an online community and eZine that will include a broad range of news: “Whether it’s information about product knowledge; whether it’s finding out who the president and ceo is of a new company,” she explains these and more will constitute some of the content.
Jim Lewis, President, Disney Vacation Club
We asked Lewis, who will become the voluntary Chairman of ARDA next year, what moved him to accept an appointment that is famous for demanding a significant investment of time. “First of all,” he replies, “it’s an honor. It’s also a privilege and it’s extremely important. Our industry has experienced tremendous amount of growth since we’ve been in existence. We’re doing extremely well, but there are some threats out there. I think we’re familiar with legislation that a lot of the states want to pass that would really hinder the growth of the industry and increase the cost of doing business in a very unfair way. We need to make sure that we take that on. There’s also a tremendous opportunity for this industry to grow outside of this country. And when you look at the fact that more than 95 percent of the world’s population lives outside this country and with the emerging middle classes that you see in a lot of places across the globe, there’s a tremendous opportunity for this industry to continue to grow.
“So, I think my timing is great. I’m getting the opportunity to lead ARDA at a very fun time. There are going to be some challenges, but it’s going to be a lot of fun. I’m just really thrilled to be a part of this.”
Stephany Madsen, Sr. VP of special projects, American Resort Development Association
Resort Trades profiled Madsen for the April 2008 issue. We caught up with her during the reception of Women in the Industry (WIN). Madsen began working with ALDA, which later became ARDA, and has worked industriously with state and regional regulators and legislators to protect the industry from unfair legislation and taxation for many years. There is no question that without her participation in maintaining relationships and a watchful eye for threats, the vacation ownership industry would not be as successful as it is today.
We asked Madsen to give us an idea of what are a few of the issues she is working on at the present time. “This year, we’re working on non-judicial foreclosure in several states. As probably any resort manager knows, sometimes an owner will just disappear. You can’t find him or her and in a lot of states it’s expensive to foreclose on a judgment lien judiciously. In Arizona, we’re introducing a bill on that and it’s moving along quite nicely. It should pass the House in another week or two. We’re also working on a bill in Colorado and in Massachusetts, where there are a number of older resorts. Older resorts tend to have this happen to them a lot more frequently. So we’re excited about that. We’re hoping that non-judicial foreclosure will become the standard after this in all the New England states. The ‘biggie’ this year is in the timeshare state of Florida where we’re working with the Department of Revenue to clarify that in Florida, sales tax and tourist development tax does not apply to timeshare exchanges.” She believes we’ll be seeing that pass shortly.
We commended Madsen on the role she has played in the development and progress of the industry. She has been a quiet and selfless champion of the industry whose work often goes unlauded and under-recognized.
Howard Nusbaum, President, American Resort Development Association
Howard Nusbaum has been a Moses-like figure, leading the timeshare industry steadily toward the Promised Land. He explained why the Annual Convention is such a vital part of our business and what attendees at the event could expect.
“No matter what your discipline is in the industry, whether you’re in the development side, the resort operations side, the marketing side or finance, it doesn’t matter,” says Nusbaum. “This is a time when everyone comes together for professional development. For instance, this morning we had a CEO panel that was incredibly compelling in describing how the future of our industry will be assisted by ARDA’s new PR initiative. The energy is amazing – especially when you think about the buzz you hear out there about what’s going on in a negative way about our economy right now – to see record-breaking attendance numbers, to see people coming together and to feel the vibrancy of vacation ownership. So for those of you that didn’t have a privilege to come this year, I’m going to personally invite you to come next year. I encourage you all to go to www.arda.org, which is our website. There will be a lot of photos from the Convention as well as a Convention update talking about some of the key issues being discussed. I also encourage you to take a look at next issue of Developments magazine which will be a round-up of the Convention. But it’s an exciting time to be in the business. This morning we passed out a Tool Box, which I was really excited about. It has a video that is only four minutes long, in which owners express how this product has changed and enhanced their lives. It also has a PowerPoint presentation that industry players put together. I’m glad to send this to anyone who emails me at HNussbaum@arda.org. I’d be glad to email you this PowerPoint to use when you go to your local convention and visitors bureau, Kiawanas club, Rotary or Chamber of Commerce. It will help them understand the economic impact of our industry and the footprint of timeshare in such a positive way. I think that sometimes in local communities we’re not understood, so I guess I’m inviting everyone to be a foot soldier.”
Richard “Dick” Ragatz, Ph.D., President, Ragatz Associates
We were honored to have an opportunity to interview Dick Ragatz, whose research and study has been so instrumental to resort industry professionals over the years. We asked Dick to speak to his history within the vacation ownership industry and to bring us up to date on his current focus, that is, providing consulting services to fractional and private residence club (PRC) developers.
“I’ve been doing research on the resort timeshare industry,” says Ragatz. “I think the first study was back in 1978. It was the first study ever done on the timeshare industry. And at that time the industry fathers were really wondering, and a little scared, about how people liked what they bought, so we did the first consumer satisfaction survey, and much to the delight of the industry, found there to be an 85 percent satisfaction rate. As part of that study, we also determined the economic impacts of a resort timeshare development on the local community. So, armed with that ammunition, the industry went out to a lot of the media, got very positive attention and that survey formed one of the bases for moving forward with the industry, demonstrating that consumers really liked what they purchased and that the benefit to the local community was really significant.
“Over the years we have done probably 500 surveys of timeshare consumers and potential consumers on a worldwide basis, along with satisfaction surveys, demographic surveys, reasons for buying and reasons for hesitating. Perhaps most directly related to your audience, we studied what type of services they want, what type of consumer they are, what owner benefits they want on top of amenities. Our research has really helped structure the most appropriate timeshare resort possible for many developers and operators.
We acknowledged that Ragatz has provided a tremendous amount of leadership to professionals in the fractional, or PRC industry. He was enthusiastic about the growth of interest in this segment. “For each of the past eight years we’ve organized a national conference,” he adds. “And just to demonstrate the growth of that industry, the first conference we had in Denver eight years ago, we had 55 people, and the last conference we had in San Francisco about three weeks ago, we had about 750 people. So we think there’s a major opportunity for the resort industry, developers, managers, and so forth, to take a look at this industry, which is complimenting the resort timeshare industry, aimed at a little higher income consumer, but also providing shared ownership. So we have been doing research in that industry also, but encourage your readers, your audience, to take a look at fractionals and PRCs, addition to timeshare.”
David M. Rice, CHA, VP of resort operations, Welk Resort Group
We were delighted to have a chance to interview Rice, who has been in the industry more than twenty-five years. He was able to tell us a little about his responsibilities at Welk as the Vice President of Resort Operations.
“My responsibility encompasses everything but the sales side,” says Rice. “So all of the other aspects of the business, whether they be housekeeping, food and beverage, reservations, front office, golf and theater operations, all fall under my supervision and direction. We presently have three projects and we have a fourth under development in Cabo. We have properties in Escondido, California, Palm Springs and Branson, Missouri.”
We asked him how he faces the challenge of meeting guests’ and owners’ expectations on a daily basis and even going beyond those expectations. He responds, “Certainly at Welk we are continuing to offer, and it sounds like a cliché, but we are continuing to offer what we call “superior guest service” and exceeding the expectations of our guests. However, I believe it is essential for us as a company to continue to offer much better training to our teams. We have looked at various ways and very recently, with the assistance and direction of our corporate HR Director, Tracy Ward, we’ve been very fortunate to secure the assistance of a coach. What we have found in the very short term that she’s been there is that she’s been very helpful in really establishing the fundamentals.
“It’s important to us as a business to always provide our associates with the best foundation in our business, because we ask them to go on the front lines every day and offer superior service. But at times we’ve found in the past, especially for us, that we haven’t always provided them with the best tools. As such if we are able to create that environment where our teams understand why they are doing something, not just doing it, we certainly believe that we are on the right path.
“Also, as a company we are also encouraged to provide an environment for our teams to have good advancement. You know it’s always important, I think, if you work in an organization to know that if you do well, work hard, there is possible growth and there’s potential. And we believe that as for us two of the major issues and aspects of our business sense: training, but also the potential for growth.”
Rice sees that there is sometimes a temptation to subordinate the responsibilities and training aspect of the business to computers. “Really and truly, in our business what we are seeing more and more is that our customers – our guests – are very knowledgeable. People may feel they are demanding, I don’t think they are demanding at all. I believe that our service should be commensurate with what people pay for the service. They have so many examples of good service and of places they can go and be treated personably. So I think individualized, personalized service. We try not to think of our arrivals as 150 arrivals, but as 150 different individuals who are coming to have, for them, a very personalized experience, and that’s really what our focus continues to be.”
Clark Rowley, RRP, director of marketing & public relations, Scottsdale Camelback Resort
As chairman of the Professional Development Committee, Rowley explains his group works with ARDA’s designations of Registered Resort Professional (RRP) and Associate Resort Professional (ARP), which are awarded to demonstrate an individual’s knowledge and experience, as well as commitment to the industry and the ARDA Code of Standards & Ethics. Applicants must successfully complete the AIF Qualification Test. ARPs should have a minimum of 2 years of industry experience and 6 credits, while RRPs need at least 5 years of experience and 10 credits. Credits are earned in various ways, which include on-the-job experience, studying and participating in the industry. The Designations are explained in greater detail in the AIF Professional Development section of www.arda.org. The ARDA International Foundation (AIF) – ARDA’s educational arm – has recently launched a designation that will include suppliers. Of the committee’s ongoing work, Rowley explains, “We’re working with various universities and colleges’ hospitality departments to inspire kids to get involved in the industry. It’s a good opportunity for leaders in the industry to meet them and for kids to define their career path.” Clark explains further that his committee had helped arrange for ten students to attend the Las Vegas Convention on scholarships.
Clark mentioned consumer-centric research sponsored by his committee, which was to be presented at the Sales & Marketing Forum held during the course of the Convention. He said the committee has also undertaken “a number of initiatives to better the product, broaden the consumer base and create educational opportunities.” The committee is also working to enhance the textbook used in preparing for the AIF Qualification Test, the Timeshare Industry Resource Manual.