Wyndham Worldwide Corp., the franchiser of Days Inn hotels and Super 8 motels, plans to buy more brands or acquire the operations of struggling competitors, Chairman and Chief Executive Officer Stephen Holmes said.

“There’s quite a bit of distressed real estate,” said Holmes, 52, in a Sept. 28 interview at Wyndham’s Parsippany, New Jersey, headquarters. “It’s an opportunity to add new brands or convert underperforming hotels” to a Wyndham brand.

The U.S. recession may cause as many as one in five hotel loans to default through 2010 as companies spend less on travel and perks, according to Kenneth Rosen, who heads the University of California’s Fisher Center for Real Estate and Urban Economics in Berkeley.

Wyndham has more than doubled in New York Stock Exchange composite trading this year, increasing the company’s market value to $2.9 billion. Marriott International Inc., the largest U.S. hotel chain, gained 43 percent in that period while Starwood Hotels & Resorts Worldwide Inc., the U.S. owner of luxury brands including St. Regis and W Hotels, rose 85 percent.

“They have stepped up the caliber of their management team recently,” said Patrick Scholes, senior equity research analyst at FBR Capital Markets & Co. “Financially, they are also in a better position than at the beginning of the year to accomplish some of these plans. There are a lot of independent hotels looking to become part of a larger reservation system.”

Microtel Purchase

Wyndham, which operates about 590,000 hotel rooms around the world, reported second-quarter earnings that beat analysts’ estimates after focusing on services for travelers taking shorter vacations.

In June 2008, the company agreed to buy Global Hyatt Corp.’s Microtel Inns & Suites and Hawthorne Suites hotel brands to add 5 percent more rooms. Wyndham sees potential in adding hotels, particularly under its namesake brand, Holmes said. The company had about $174 million in cash as of June 30.

“There used to be a lot of private equity money chasing transactions and some firms were paying a price that didn’t make any sense to us,” Holmes said. “Obviously, these firms aren’t as active anymore.”

Holiday Homes

Wyndham, the largest seller of timeshare vacation homes, also intends to add to that business by converting whole ownership projects into timeshares, according to Holmes.

“The whole ownership market is the hardest hit,” said Scholes. “Converting a whole ownership project into a timeshare project allows the whole pizza pie to be broken up into affordable slices.”

U.S. timeshare sales dropped 8.5 percent last year to $9.7 billion from a peak of $10.6 billion in 2007, excluding the luxury fractional business and private residence clubs, according to an Ernst & Young LLP study prepared for the American Resort Development Association in Washington.

In December, Wyndham said it would cut 4,000 jobs as it restructured its timeshare unit. The company said it would halt some construction and eliminate some sales offices and marketing programs.

“If credit markets stay where they are right now, which is open and somewhat fluid, I don’t anticipate us to have to make any further cuts,” said Holmes.

U.S. vacation timeshare sales may fall the most this year since the industry gained popularity in the 1970s as consumers forgo spending to ride out the recession.

Sales may drop 30 percent this year from 2008, said Howard Nusbaum, president and chief executive officer of the American Resort Development Association, a Washington-based trade group. The market “will be a challenge for at least the next 18 months,” Patrick Scholes, senior equity research analyst at FBR Capital Markets & Co. said this month.

“Timeshares are just very, very discretionary items,” said Chris Woronka, an analyst at Deutsche Bank Securities in New York. “It’s the perpetual vacation. I am prepaying for the ability to take a vacation every year. Under the current circumstances, people are more reluctant to pay for that.”

U.S. timeshare sales dropped 8.5 percent last year to $9.7 billion from a peak of $10.6 billion in 2007, excluding the luxury fractional business and private residence clubs, according to an Ernst & Young LLP study prepared for ARDA. The decline was the industry’s first since 1975 and is being driven by tighter credit, a higher personal savings rate and the loss of 6.9 million jobs since the recession started in December 2007.

Marriott’s Charge

Marriott International Inc., the largest U.S. hotel chain, said last week it will take a third-quarter pretax charge of $760 million in its timeshare business. The company will cut prices, halt development at some residential resorts and at some luxury fractional ownership properties, and sell some undeveloped land.

“We have enough inventory to last a few years,” Laura Paugh, senior vice president of investor relations at Marriott, said in a telephone interview. “Prices are not likely to turn around in the near term. Given the development risk, we plan to complete the inventory we have under way, but not develop any more.”

Wyndham Worldwide Corp., the largest seller of timeshare vacation units, in December said it would cut 40 percent of those sales in 2009.

Timeshares give owners the right to use a property for a set period of time each year, typically a week. Fractional ownership plans usually offer longer stays at a property and tend to include more services and amenities, according to ARDA.

For hotel companies, the businesses can build customer loyalty, Marriott’s Paugh said.

‘Buy the Hotel’

Timeshares first emerged in the 1960s, according to Group RCI, Wyndham’s vacation rental and timeshare unit. According to RCI’s Web site, a hotelier in the French Alps marketed the world’s first timeshare development with the slogan, “No need to rent the room, buy the hotel -- it’s cheaper!” The concept moved to the U.S. in the 1970s, initially in Florida, the state with the most timeshare resorts, according to RCI.

“The main obstacle for the industry is that there will be a semi-permanent reduction in demand because developers would sell to people with relatively low credit scores,” said Deutsche Bank’s Woronka. “That won’t be possible anymore. Your pool of buyers will be much smaller from now on.”

Starwood Hotels & Resorts Worldwide Inc., the third-largest U.S. lodging company, may also have to “recognize significant timeshare impairments” since it has more high-end timeshares than Marriott, David Loeb, an analyst at Robert W. Baird & Co., said in a note this month.

Demand Drops

Starwood’s fourth-quarter timeshare sales fell 48 percent, the company said in January. It closed nine sales centers and cut 900 employees from the division since the start of 2008.

K.C. Kavanagh, a Starwood spokesman, declined to comment.

“Our sense is that the timeshare industry is less optimistic about any near-term recovery than is the hotel industry, as the timeshare industry’s hands are tied by the availability -- or lack -- of financing,” Scholes said in a note this month.

On Sellatimeshare.com, a one-bedroom, one-week timeshare at the Marriott Aruba Surf Club is being offered for $25,900.

The Web site includes the testimonial of a client who sold her unit at the Renaissance Aruba Beach Resort and Casino for $5,000.

On Timeshareadventures.com, a two bedroom, two-bath one- week timeshare at Marriott’s Canyon Villas at Desert Ridge in Arizona was for sale for $25,000. The annual maintenance fees and taxes are $900. The property includes a golf course, tennis courts and spa.

Plenty of Ads

A one-week, every-other-year unit at Marriott’s Ko Olina Beach Club timeshare resort in Oahu, Hawaii, is advertised for $15,999. The annual maintenance and taxes on the two bedroom, two bath are $728.

Mark Massarelli, who runs Dynasty Limousine in Boston, has been trying to sell one of two timeshares in Hollywood, Florida, that he and his sister inherited from their mother. He has been advertising a one-bedroom, one-bath unit on Craigslist.org for six months. It’s at a full-service oceanfront property with access to an 18-hole golf course.

Massarelli, 46, hasn’t received any inquiries even after cutting the price twice.

“I am offering it at $3,995 but its value right now is probably around $8,000,” Massarelli said in a telephone interview. “I tried to sell it a couple of times for a higher price but nobody bit. The maintenance and taxes on the unit are getting expensive. So I cut the price to attract more buyers, but nothing so far.”

Hotel Deals

The average sales price for timeshares in the U.S. climbed to $20,152 in 2008 from $15,790 in 2004. Occupancy remained little changed from 2005 to 2008 at about 82 percent, according to Ernst & Young. Average maintenance fees increased to $646 from $471 from 2005 through 2008.

“This year in particular, timeshare sales are down because hotel deals have been so good,” said Woronka. “Owners may think ‘I could have stayed at a luxury hotel for $150 a night and I am paying much more for this timeshare.’”

The luxury timeshare segment, where units can sell from $100,000 to more than $1 million, also is being hit, according FBR’s Scholes.

Demand for such rooms “was soft in 2008 and weakened further in 2009,” Arne Sorenson, Marriott’s president and chief operating officer, said on Sept. 23.

“I don’t think timeshares are out of style,” said Marriott’s Paugh. “Customers really do like it. But the returns we currently receive on our investment are disappointing. For us it’s probably not the place we want to put our money.”

The Wisconsin Dells Common Council approved a plan for the first phase of the Silverleaf Resorts timeshare, after lengthy discussion of an easement for a road that will serve both Silverleaf and Chula Vista’s Wisconsin Dells Sports Center.

The precise implementation plan for Silverleaf was approved earlier this month by the Dells Plan Commission. The first phase calls for development of 20 acres of 51 the resort owns between Highway 13 and River Road near Coldwater Canyon. It also includes an entrance on Highway 13 for the resort that will also connect the Sports Center to Highway 13.

Alderperson Dan Gavinski raised the question of whether the easement for the road between Chula Vista and Silverleaf had been signed.

Nancy Leary Haggerty, an attorney with Michael Best & Friedrich, a Milwaukee law firm, said the easement is written but has not been signed by Mike Kaminski, CEO of Chula. She said questions were being raised about the shared cost of the road.
Kaminski, who attended the council meeting, said as Chula Vista made its original plans for a road, planning to buy property now owned by Silverleaf, it intended to construct a road that would be turned over to the city and be public.
Silverleaf, however, plans to keep the road private and thus taking the responsibility for maintenance and snow removal.

Michael J. Brown, senior director planning and development for Silverleaf, said the resorts were willing to have the road public, but the Wisconsin Department of Transportation said if it was public it would have to go through to River Road.
“We felt the city did not want more traffic on River road,” Haggerty said.
“We don’t want to be in the position where these two parties use the city to negotiate,” Mayor Eric Helland said. “We’re being used as a tool.”
From the beginning, the city wanted Sports Properties to have an exit on Highway 13, Gavinski said, and “We have to ensure that’s done.”

Assistant City Attorney Joe Hasler said that in 2007 when the Sports Center’s development agreements called for it to assume all the costs of putting in a road to Highway 13. The easement, he said, “appears stuck on the point of ways to pay costs despite Sports Properties paying the full boat before. At some point, Silverleaf and Sports Properties will have to get together and work out the costs,” Hasler said, but that did not need to be done to approve the plans before council.

Haggerty asked the council to approve the plans and let the two parties work out the differences on the road.
Kaminski also said the agreement should wait because of the grant Adams County has applied for to put in bike paths that includes rebuilding River Road to Chula Vista.

“I’m glad we’re all getting along so well,” Helland said. He said he would like to see the road get 50 percent of the cost from the state, and it would be foolish not to have it be a public road.

Since the road issue is in a state of flux, Hasler said the two resorts need to negotiate and “at the end of the day if they do not agree, the city can go in and build the road and assess the owners.”

Helland said the council could approve these plans but not approve phase two of Silverleaf if the easement is not settled.

Questions were also raised about an easement for the city to be able to hook a sewer line into the Silverleaf lift station at a future date. The city wants the easement should development occur in the future on the east side of Highway 13.
Alderperson Dar Mor said he was concerned whether a 10 foot wide easement was sufficient.

Public Works Director Mike Horkan said a sewer line could be put in on that wide an easement, although it would be more expensive. Adjourning property is owned by Jody Ward, and it had been proposed that the city also get an easement from him. However, Ward’s property is not in the city.

Helland noted that any cost associated with putting a sewer line across Highway 13 would be passed on to the developer so the easement is a non issue.

In other action, the council did the following:
• Named Kathleen Helland to the Kilbourn Public Library Board.
• Approved the quota plus license supplemental form.
• Approved hiring Benjamin Wiese as a full-time officer, whose salary and benefits for three years will be paid by a federal grant.
• Passed an ordinance expanding the definition of a vicious animal to include one that attacks other animals. Police Chief Bret Anderson said he would notify the owner of a dog that has attacked two other dogs on Monday that he must remove the dog from the city.
• Passed a change in zoning for a parcel by Trapper’s Turn where owner Todd Nelson intends to build a new home.
• Approved the low bid from Janke General Contractors for repairs to the boat launch on River Road.
• Made illegal entry into an unlocked car an offense.

Recent Florida state legislation offers important protections for timeshare owners, according to the American Resort Development Association.

In addition to ensuring that timeshare owners will not pay tax on timeshare exchange transactions, the HB 61 bill codifies a common industry practice regarding the taxation of transient stays at timeshare resorts and allows timeshare developers to offer “debt cancellation” products.

Though no state or jurisdiction currently collects a tax on timeshare exchange, it has become an increasing concern as state and local governments seek new revenue to fill ever-growing budget shortfalls.

Florida is the third state to pass legislation specifically protecting timeshare owners from taxes on exchange—one of the major attractions for timeshare buyers. HB 61 protects the ability of Florida timeshare owners to effectively use the exchange process by preventing taxes that could raise the cost and lower the desirability of exchanges into the state.

“For 40 years, ARDA has worked with federal and state government officials in support of legislation to protect consumers,” said Howard Nusbaum, ARDA president and CEO. “The value of our industry rests in the continued trust of our owners and members.”

ARDA, along with its Resort Owner’s Coalition, has advocated that state legislation guarantee timeshare owners are protected from such taxes.

“Without the consistent and strong support from sponsors, Sen. Mike Haridopolos and Rep. Steve Precourt, HB 61 could not have been enacted,” said Jason Gamel, VP of State Government Affairs of ARDA. “This ARDA-backed measure clarified the existing tax status of exchange, which had been questioned by some jurisdictions as they searched for revenue in a down economy.”

Over a lifetime of escapes to the Oregon coast, it remains as breathtaking to you as ever, but with every visit you're saddened by yet another loss of what was so enchanting in your youth.

In the Eisenhower era you loved riding to the beach in your dad's Nash sedan, sipping 7-Up in the backseat to keep from getting carsick over the winding Coast Range road. The drive seemed endless, but upon arrival you were immediately spellbound -- not just by the natural wonders along the ocean but also by the charming coastal commercialism of the funky fifties and sixties.

You were fascinated by the warm saltwater pool in Newport's Nye Beach Natatorium, the clam fritters at Seaside's Crab Broiler, the cheese curds at Bandon's cheese factory and the delightful whimsy of Pixieland amusement park near Otis.

All are gone now. So are countless other unique old attractions, replaced by what sometimes seems like 300 miles of coastal condos, casinos and plasticized franchise joints just like the ones back home.

But you could always take solace in the survival of a few hardy relics. Foremost among them was a blast from the past called the Shamrock Lodgettes at Yachats on the central coast. The Shamrock, still operating today, features a cluster of cozy log cabins that have lured tourists off Highway 101 since the early 1950s.

Each features knotty pine details, hardwood floors, stone fireplaces, kitchenettes, picture windows and carports big enough for Dad's big bathtub-shaped Nash Ambassador. The five-acre property has been expanded in recent years to offer more updated accommodations, but every time you have taken your children and later your grandchildren there, you have always stayed in the old cabins, even though they have seemed increasingly in need of repair.

Frommers, the respected travel resource, confirms your deep affection for the place, saying it "bewitched us the first time we saw it."

And this explains the deep sense of melancholy you feel today upon hearing news about the Shamrock. It will close forever at the end of October. The owners, financially pinched after buying the place just before the recession rolled in like a sneaker wave, will tear down the old structures and redevelop the place with timeshare townhouses.

It's understandable, given the circumstances. But that doesn't make it any easier to swallow.

Mercifully, there still remain some vestiges of mid-19th century commercial charm on the Oregon coast. You can still dine, for example, at the 63-year-old original Mo's in Newport or the 65-year-old Spouting Horn in Depoe Bay, and you can still go to the 70-year-old aquarium at Seaside and the 77-year-old Sea Lion Caves attraction near Florence.

You hope they'll be around forever. But given what's happening to the beloved Shamrock Lodgettes, you're thinking you should go back sooner rather than later.

The timeshare industry has been pummeled during the past year as consumers have curbed spending on travel. But even though the market has been experiencing some tough times, demand is expected to return.

The need to drive sales these days is paramount, and an over-reliance on building in markets such as Orlando, Hawaii and Las Vegas have caused a glut of product. With all the news out there in regard to the trouble timeshare developers are having, it’s no wonder investors are skittish about building new resorts. But like anything seen on the evening news, there are two sides to every story.

In fact, timeshare experts cite there are still myriad opportunities out there for developers to create winning products. And only a few markets are overbuilt. Developers only need to find the right markets to put their product in. Realizing this, Group RCI recently commissioned a study to better understand the supply-demand equation to more effectively pinpoint the best places for development.

“Yes, we are seeing saturation in places such as Las Vegas or Orlando, but there is great depth for development in other markets,” said Gordon Gurnik, President, North America, Group RCI, which is owned by Wyndham Worldwide.

The results are somewhat surprising. Incredibly, when looking at the top 100 tourist destinations in the U.S., 27 do not currently contain any resort timeshare projects. This includes nine urban destinations and 18 vacation destinations.

Gurnik cites people’s desire to stay closer to home as a strong business driver for timeshare projects. Take the Adirondacks, for example. This tourism region in New York State, just a few hours’ drive from New York City, hasn’t much timeshare development at all. Yet it’s a favored destination for getaways for city-folk looking to restore and refresh. The same is true for areas outside Atlanta, Dallas and more.

“We know it’s going to be a little time before the economy comes around, but it is still a great opportunity for those looking to use real estate to create vacation ownership opportunities to create return as a developer,” said Gurnik.

According to the survey, the penetration rate among all households in the U.S. is 3.9 percent when it comes to timeshare. More relevant, said Gurnik, is that it’s just 5.4 percent among households with incomes over $50,000. They’re the ones most likely to purchase a timeshare. That equates to 56.6 million households.

If the overall depth of the timeshare market is 10 percent, the remaining market depth for resort timeshare ownership among income-eligible households residing in the U.S. is about 2.7 million. It is 5.5 million if using the 20 percent scenario. This means that 45 percent of the market remains at a 10 percent penetration rate, and that 62.5 percent remains at 20 percent.

With an average purchase price per interval of $25,000, a 10 percent penetration rate will generate demand for about 4.1 million additional intervals and a gross sales volume of $100 billion. At a 20 percent penetration rate, these figures would be about 8.2 million intervals and a gross sales volume of about $200 billion.

There are currently 1,640 resort timeshare projects in the U.S, according to the survey, containing about 179,220 units for an average size of 109 units. Currently the top 100 destinations for resort timeshare ownership in the U.S. generate 80.5 percent of the 6.75 million purchased intervals. The remaining 19.5 percent are scattered over a wide variety of locations throughout the country. That means there is plenty of opportunity in untapped markets. Top untapped urban markets include Los Angeles, Chicago, Dallas, Atlanta, Denver, San Antonio, San Francisco, New York City, Boston and Seattle. Untapped vacation markets include: Long Beach, CA; Albuquerque, NM; Savannah, GA; Niagara Falls, NY; Boulder, CO; Jacksonville/St. Augustine, FL; Anaheim (Disneyland), CA; Monterey/Carmel, CA; Nashville, TN; the Oregon Coast; and Austin/Hill Country, TX.

“People are looking for something convenient for them, a product with good value and amenities at a reasonable price point. For us, this survey was about pairing up those people with where you can put locations to appeal to them,” said Gurnik. “People are more cost-conscious and want to make sure if they are purchasing timeshare they will actually use it and that it meets needs of family.”

Marriott International Inc (MAR.N) said it would cut prices and scale back development plans for its luxury timeshare segment, resulting in a $760 million charge, because of soft demand in this business.

The operator of the Marriott and Ritz-Carlton hotel chains plans to sell a portion of its fractional ownership inventory. Marriott also expects to lower prices of its residential units, convert certain proposed projects to other uses, and sell some undeveloped land.

Demand for Marriott's luxury timeshares has weakened significantly in the past year, the Bethesda-based hotel operator said, citing a weak economy and a large supply of high-end residential real estate on the market.

"We believe the discounted prices will help (Marriott) generate sales activity and sell its remaining inventory," JPMorgan analyst Joe Greff wrote in a research note.

Marriott's timeshare segment accounts for 5 percent of the company's earnings before interest, taxes, depreciation and amortization, down from 25 percent in 2007, FBR Capital Markets analyst Patrick Scholes said in a note.

The luxury segment only accounts for 10 percent of all of the company's timeshare earnings, Scholes added.

Marriott is taking the impairment charge in the third quarter ended on September 11. The charge will be noncash except for about $45 million that will be funded over the next two to three years and was already included in Marriott's spending forecasts.

Customers of Marriott's luxury timeshare segment, known as the Ritz-Carlton Destination Club, can buy three- to five-week intervals or purchase residential units outright.

Marriott said it had increased returns on its traditional U.S. timeshare business by cutting costs and delaying new projects.

The company said it expected profitability to improve at the timeshare segment, with cash flow there positive in 2009 and increasing in 2010.

Marriott said North American revenue per available room, or RevPAR, fell 19 percent in the third quarter, better than its previous outlook of a 20 percent to 23 percent decline.

Industry specialists have responded to recent comments that fractional may not be the best way to buy overseas property due to current economic conditions.

Linda Travella, media spokesperson for the National Association of Estate Agents (NAEA), recently commented: "I don’t think that fractional is necessarily the way to go because of the recession." Citing falling prices for whole ownership, she argued that it is easier for buyers to pick up bargains overseas and, even if not as luxurious as fractional offerings, she felt that sole ownership still gives an affordable route to overseas ownership and the prospects of better returns.

The comment follows an NAEA warning for consumers to also ensure their fractional purchases are not actually ‘dressed up’ timeshare schemes, as reported on Newskys.

However, shared ownership commentators have argued that, during the recession, the value of fractional ownership is actually magnified.

Paul Doyle of The Crane, a fractional ownership resort in Barbados, responds:“The main arguments for fractional ownership for many remain the same in difficult economic times, and in fact take on even more weight, given that potential owners are watching their finances even more carefully. Fractional properties are still available for a fraction of the cost of purchasing a residence outright, and owners are able to buy only the amount of time they wish to use each year (and not worry about the rest of it). People are still buying fractional because the desire to vacation is as strong as it ever was.”

Fractional consultant David Disick agrees: “I think today's buyer realises that actual vacation home use is rarely more than a few weeks in a year. Accordingly, they similarly recognise that fractional ownership makes sense, especially in the current economic climate, where a lower price point is appealing.”

Part of the value-add with fractional can be the exchange element of the purchase, with Doyle noting: “Potential buyers who wish to enjoy holidays around the world can benefit from the opportunity to exchange their fractional units for other vacation destinations using one of the established exchange companies.”

Surveying the market in the Middle East, Jeff Tisdall, Middle East managing director for Group RCI,agrees, noting that they have seen increased exchange activity over recent months: “The cooling of the Dubai property market and the approaching completion of flagship tourist developments has ironically created significant opportunity and intensified interest in vacation ownership and private residence clubs. Today’s market for leisure real estate is quickly moving from its investor orientation of recent years towards an end-user and leisure focus. By creating ownership interests that offer an annual allotment of personal usage to match consumer needs, shared ownership is the ultimate end-user product.

“We have certainly observed a heightened interest in vacation ownership, fractional and private residence clubs. Positively, shared ownership owners continue to travel during market downturns as they have already purchased at least one shared ownership interest and therefore own an asset which they can exchange for vacations worldwide. Interestingly, we have seen an increase in exchange activity by our Middle East members over the last 12 months.”

Another benefit of fractional is identified as access to locations you otherwise still wouldn’t be able to buy into, and demand is still present for these offerings. Consultant Dick Ragatz, writing in Vacation Ownership World, notes that "more than three in four fractional developers felt that the sales performance was as good or better than that of whole ownership developers in their local market area., While sales were down last year and there were fewer projects in active sales, sales are still being made in the so-called iconic locations that will always have a highly perceived value. They are situated in places with limited land being sold at very high prices."

Les Milton, chairman of The Fractional Ownership Consultancy, adds that an additional attraction of fractional is the ‘hassle-factor’: “During recessionary times, buyers prioritise what is important to them, and many decide they no longer want the costs and hassle associated with whole ownership purchases.”

Ultimately, Brad Lincoln, CEO of fractional consultants The Best Group, argues that the decision whether to buy fractional or not shouldn’t rest on a decision over the concept – it is all about finding the right way to buy the right property: “The first piece of advice I would give any buyer is not to buy a ‘fraction’ – rather buy the place they want to own. It’s not about buying into a concept - it’s all about access to the dream home. It should be ‘I want to own a villa in Provence, not ‘I want to own fractional property’. So, ask how often you will realistically use the property and how much you can afford to spend. Then go and see where the value is – look at full and fractional ownership, and make an informed decision.”

Consumer demand for sharia-compliant hotels is strong, but confusion surrounding the term means many brands are reluctant to commit. Louise Birchall seeks to clarify what it takes to comply.

Two-to-three years ago ‘sharia’ was the buzz word repeated by ambitious, international hotel chains intent on tapping into the rich, intraregional Arab tourism market by offering a unique and traditional Arabic experience.

Eager to differentiate themselves, hotel brands witnessed the success of sharia-compliant banking and investment systems compared to conventional institutions and saw an opportunity to apply the concept to hospitality.

The Wisconsin Dells Plan Commission approved plans Wednesday for the Silverleaf Resort timeshare project off Highway 13 near River Road.

Nancy Leary Haggerty, an attorney with Michael Best & Friedrich, a Milwaukee law firm, and Bradley R. Boettcher, an engineer with General Engineer of Portage, presented Silverleaf’s precise implementation plans for the first phase of the timeshare resort and the first amendment to the developer’s agreement with the city.

The first phase calls for development of 20 acres of 51 the resort owns between Highway 13 and River Road near Coldwater Canyon. The company plans to build two “presidential” style buildings with 16 residential units, two lodge style buildings with 12 units, a member services building, sales building, registration building, pool and some recreational activities as well as parking lots and roads.
The project was first approved by the city in May 2008. The resort will have an access road to Highway 13 that will also connect with Chula Vista’s Wisconsin Dells Sports Center. It will be a private road, but Chula has an easement to its property from Silverleaf.

The only concern raised was a sewer at the resort. The resort will have a sewer lift station. In the staff report from the public works department, concerns were raised about being able to run a sewer line from that lift station to land on the east side of Highway 13 if it is developed.

Assistant Public Works Director Chris Tollaksen told the commission that receiving permission from the state’s Department of Transportation for a road off Highway 13 is not easy. Now that Silverleaf has secured that, the most desirable land for development will be across from that intersection. Since the sewer lift station will be on private property, the city cannot run a sewer line from it because it has no easement.

Haggerty said Michael Brown, senior director planning and development for the company, is willing to give an easement of 10 feet for that line.
Public Works Director Mike Horkan said 10 feet would be sufficient but a wider easement would make putting in a line less expensive.

The line would also have to cross property owned by Dells Assistant Police Chief Jody Ward and his wife. That land is not in the city, and Ward, who was at the meeting, said he had talked about it, but was not ready to say he could give the easement. He said he and the city would come to an agreement on the easement. He did not want to say in a public meeting what the question or issue about the easement was. Then Ward gave a note to plan commission members, but the contents was not released at the meeting.

From the city’s standpoint, it would not want to operate two lift stations there, said Mayor Eric Helland, chair of the commission. He said the city will work with both parties so the plans can be approved.
The commission approved the plans and amendment unanimously. It now goes to the city council for approval.

In other action, the commission approved a rezoning change for part of Trapper’s Turn from commercial to single-family residential.
Todd Nelson, owner of the golf course, said he and his wife Sherri plan to build a new home for themselves there, and he will eventually develop other single family residences at the site. While he has plans to build other homes there, he said he did not want to rush the development but preserve the area and “keep it nice.” Nelson said he plans to start construction in October and have the home ready to move in by June.

Nelson asked permission to put a well in instead of hooking up to city water. Running water lines to the site, he said would be prohibitive, but he would be hooking up to sewer.

Commissioner Bill Brown asked Fire Chief Tory Wolfram whether the house not being hooked to city water would be a concern to the fire department.

Wolfram said not hooking up would not be a problem because it was a single house.
After the commission approved the change, Helland said, “Welcome back to the city.”

Danny Pang, an Orange County financier who was the subject of a fraud investigation by the Securities and Exchange Commission, has died.

The Orange County coroner's office says the 42-year-old Pang died Saturday at a hospital, one day after after being taken from his Newport Beach home by paramedics.

The cause of death is unknown.

Pang pleaded not guilty in July to federal charges of evading currency reporting laws. The case had initially been set to go to trial next week, but was delayed until next year.

In a separate case, Pang was accused of cheating investors and running his Irvine company, Private Equity Management Group, like a Ponzi scheme.

Pang, a Taiwanese immigrant, is accused of bilking investors in his $4 billion firm by falsely portraying returns as coming from investments in timeshare real estate and life insurance policies of seniors. Prosecutors said he in fact he ran a Ponzi scheme, using money raised from newer investors to pay earlier ones.

Pang's companies, Private Equity Management Group Inc. and Private Equity Management Group LLC, are based in Irvine, Calif. Charles Sipkins, a spokesperson for the Pang family told CNBC,‬‪ ‬‪"Our entire family is shocked and saddened by Danny's sudden and tragic passing. Danny was a wonderful husband, loving father, and honest businessman. For the past 5 months, Danny was subjected to a relentless attack of innuendo and false allegations, and was denied any opportunity to defend himself. It is distressing that Danny had to endure such a mean-spirited assault on his character and reputation, and the seizure of all his property, without ever having been found liable of anything and without ever having a chance to defend himself. We remain steadfast in our belief that Danny would have been vindicated if he had been given that opportunity. In this time of mourning, we ask that our privacy and feelings of grief be respected."‬‪ ‬‬ ‪

The Securities and Exchange Commission froze Pang's assets in April, ordered him to surrender his passports and bring back to the U.S. any assets he had sent overseas. He stepped aside as chairman and chief executive officer.

Pang was arrested days later by the FBI on charges of gradually withdrawing about $360,000 from a company account so he wouldn't have to report the transactions to regulators.

Robert P. Mosier, a court-appointed received in charge of Pang's companies, said in court documents that Pang managed his investments as a "personal piggy bank" to fund a lavish lifestyle, including spending $35 million on a fleet of jets, $1 million on a cruise for employees and $1.5 million on a China vacation for his staff.

In a separate civil lawsuit, the SEC alleged Pang and his companies have been engaged in the fraudulent offering of securities for at least five years, raising hundreds of millions of dollars from investors mostly living in Taiwan. In one case, investors were presented with a forged $108 million insurance policy to support a false claim that an investment was guaranteed, while the actual insurance policy was valued at $31 million, according to the SEC.

Pang first appeared in the news when his wife, 33-year-old former topless dancer Janie Louise Pang, was shot and killed in their home in 1997.

Pang's attorney, Hugh "Randy" McDonald, was charged with the killing but his jury could not reach a verdict and prosecutors did not attempt to try him again. An autopsy is scheduled for Sunday.

n an attempt to clarify and regulate the emirate's real estate market, Dubai's property regulator has started issuing colour-coded identity cards to brokers, with timeshare sellers identified by red cards.

The Real Estate Regulatory Agency (RERA) will issue registered agents one of four types of colour-coded cards allowing them to sell a particular type of property in a specified area of the emirate, according to UAE newspaper the National.

"This initiative is the next major landmark in the process of safeguarding property buyers, owners and investors' interests by consolidating the rigour, accountability and transparency that is so crucial to the market," Yousef al-Hashemi, the director of licensing at RERA, told the newspaper.

Red cards will be issued to timeshare brokers. Holders of a blue card will be allowed to conduct all types of property sales and operate throughout Dubai. They can also operate within free zones. A yellow card will be given to those licensed by a free-zone authority to only conduct sales within freehold areas owned by the authority. Holders of green cards will only be able to sell property on behalf of specific developers.

Fractional Life has contacted RERA to clarify which cards apply to sellers of deeded fractional properties, and will report as soon as we can.

The promise of a free meal, a $100 gift card or even a few nights gratis lodging may pull you into the sales presentation at a timeshare resort.

The question of whether it makes sense to invest tens of thousands of dollars may send you away puzzled — or worse, second-guessing the decision you made to sign the papers.

While real estate prices have plunged across the nation in the past two years, there’s been no parallel decline in what developers charge for timeshares. For an average $20,000, buyers get the right to stay at a resort — usually in a 1-or 2-bedroom condominium with at least a mini-kitchen — for a set period of time each year. While some resorts cost less than $15,000, the price can double for certain locations and time slots.

The bottom has dropped out of the resale market in the recession, however. An Internet search reveals hundreds of “for sale” ads for timeshare deeds, often for as little as $1, even for prime times in places like Cape Cod, South Carolina’s Hilton Head Island, Manhattan and Hawaii.

There are a variety of reasons people sell — from not using the vacation time to no longer being able to afford the annual maintenance fees—and the resale market is flooded right now.

How, then, can you decide whether or not a timeshare is a good investment?

The key, owners and industry experts say, is in the way you think about the purchase.

If your goal is to buy a timeshare and resell it for a profit, you’re going to be disappointed. Even before the economic downturn, resale prices were typically a fraction of what resort developers would charge for the same properties.

But if you buy hoping to lock in some nice vacation accommodations for the coming years, it may be worth your money.

The marketplace

“Timeshares are not an investment,” said Angela Gridelli, an interior designer and decorative artist who lives on Long Island, N. Y., and currently owns four timeshares.

“A timeshare is not like purchasing a condo or a home,” she said. “If anything, it’s like a car, where the value on your timeshare is going to depreciate every year.”

Gridelli said if she were to try to sell the two timeshares she purchased at full price — one in Aruba and one in New Jersey — she would take in 60 or 70 percent less than the roughly $25,000 each she paid. But she’s not looking to sell — she uses her timeshares as a way to travel extensively, typically getting nicer accommodations than she could otherwise afford.

The way she calculates it, Gridelli says over time, the total purchase price, plus her annual maintenance fees, compares favorably to how much it would cost for similar vacations staying in hotels.

The key is knowing how to exchange what you own for other travel opportunities. For instance, last year she traded time at one of her timeshares for a week in Spain. All she paid was the $333 maintenance fee for her timeshare, plus an $89 fee for the exchange. Her neighbors at the 2-bedroom condo were paying $500 a night to rent a similar unit.

The extra space in such facilities also means more comfort, and the potential to bring along more family members without having to pay for multiple hotel rooms.

Gridelli said she’s had so much success traveling using timeshares, she hopes to buy more on the resale market, especially since prices have dropped.

Multiple purchases are not uncommon. About 47 percent of sales are made to existing owners, according to the American Resort Development Association, the Washington-based trade and lobby group for timeshare developers.

Yet timeshares have a decidedly mixed reputation among the public at large, and Internet chat rooms can burn up with complaints from owners who are unhappy with various aspects of their purchases.

The sales pitch

One criticism is that the sales presentations can involve high-pressure pitches, and often require prospective buyers to meet with two or three different people who will try to convince them to sign the papers that day.

Many who take tours at these resorts do so multiple times, often to help supplement vacations with the free theme park tickets, gift cards, meals and other incentives offered for sitting through an hour or 90- minute pitch. The incentives don’t stop there. If you indicate you are interested, you might be offered an upgrade on the type of unit you’re getting, or some other inducement.

Types of deals

There are several different types of timeshare deals.

ARDA says about 67 percent of timeshare companies sell “intervals” — either specific weeks or “floating” weeks that can be used during certain parts of the year or sometimes every other year. Prime slots during holiday periods or at the height of a season— for instance ski season in Colorado or midwinter in the Caribbean — command higher prices.

The remaining third of developers use a points system or another flexible program that allows people to book vacations at different times, spending their points as they go — with more desirable locations and time slots and larger units costing more points.

All timeshares also require annual maintenance fees, which average $646 according to ARDA, and sometimes yearly membership fees as well.

With both intervals and points, owners can trade the time they have at their resort for locations elsewhere, typically by using an exchange company. There are two major exchange companies, RCI, a subsidiary of Wyndham Worldwide Corp., and Interval International, a segment of Interval Leisure Group. Both require membership fees to use their services — starting at $89 a year.

The exchange system

Beyond the hard sell approach, another common complaint from owners is lack of success trying to trade in what they own for time at other resorts.

Gridelli, who volunteers on the Web site Timeshareforums. com, a site for owners to share information and strategies, said you can’t get full value from a timeshare until you learn the ins and outs of exchanging.

Because she has learned how to upgrade what she owns when she exchanges, she’s able to get more vacation time — and knowing the system helps her book the destinations she wants.

Many of the owners she tries to help are unable to get the exchanges they want because they own in locations like Orlando, Fla., and Las Vegas, where over-saturation has reduced demand for trades. Or they don’t plan far enough in advance and the spots they’re looking for are taken.

Gridelli said it’s up to owners to research the value of different locations before they buy, and learn how to use the exchange system to their advantage. “Unfortunately, you’re not going to get a company to teach you,” she said.

“That free dinner or that free round of golf seems to draw people in, and they purchase things after just a sales presentation. Nobody should do that,” she added. “Would you just walk in and buy a car that way?”