Hotel & Motel Management - April 21, 2008 - (Page 28)

28 Timeshare DEVELOPMENT H&MM April 21, 2008 | HotelMotel.com www.HotelMotel.com/digital_edition Experts weigh new builds vs. conversions IN THE details Development decisions For vacation-ownership companies, the decision between building from the ground up and property conversion includes issues such as building regulations and lending requirements. New builds often cheaper Conversions often quicker Conversions can limit design By Christine Blank CONTRIBUTING EDITOR ON time Marriott Vacation Club International launched a corporate green initiative, which will include recycling and efforts to reduce energy consumption. Wyndham Vacation Ownership acquired 20 newly constructed vacation ownership units in New Braunfels, Texas, from Blewett, Allen, Bingham LLC. The company also entered into a contractual agreement to purchase 26 additional units and a club house, anticipated to occur later this year. Scheduled to operate under the WorldMark by Wyndham portfolio of products, the resort is anticipated to open for owners in late summer 2008. The property will include two- and three-bedroom condominium-style units as well as three-bedroom penthouse units. hen developers evaluate properties for conversion to timeshare units versus building from the ground up, several factors should come into play. Consultants shared tips at the American Resort Development Assn.’s annual Conference & Expo in Las Vegas in April. “Eight out of 10 times, it is cheaper to build from the ground up than to acquire a property,” said Jay DiGuilio, a founder of consulting ﬁrm Boutique Hotel Group, New York. “For the most part, renovations require many dollars to be spent on the infrastructure to bring it back up to speed and customer quality.” At the same time, it can make more sense to redevelop a historic property. For example, the architecture on the historic Marriott’s Custom House in Boston is irre- W SunStream Hotels & Resorts in Fort Myers, Fla., converted a hotel property to a combination hotel and vacation ownership property. It recently began selling units at the Diamondhead Beach Resort in Fort Myers. placeable, DiGuilio said. “You couldn’t build 34 stories of limestone,” he said. “The cost to replace something historic or iconic is one of the ﬁrst things we look for.” Another example is the renovation of the Harborview Hotel in Martha’s Vineyard, Mass., built in the late 1800s. Developers are renovating the property in three phases, creating 63 luxury cottages and suites. “It is an iconic property, so the revenue per square foot makes this product successful … despite the budget,” DiGuilio said. DiGuilio and others have found ways to evaluate projects for acquisition, sales and redevelop- ment. The most important consideration is deciding when the property will bring in revenue. “Conversions are often cheaper and quicker to get to market,” said Rob Webb, a partner in Baker Law, Orlando. To that end, SunStream Hotels & Resorts in Fort Myers, Fla., converted a hotel property to a combination hotel and vacation ownership property. It recently began selling units at the Diamondhead Beach Resort in Fort Myers. “We looked at gross sales if we converted this to timeshare, fractional or some sort of mixed use. In this case, it put us in a much better position than if we would have sold the entire asset,” said Mitchell Moore, principal of MRM Group Consulting in Sanibel Island, Fla., who consulted on the project. In addition, government regulations in redevelopments can be less cumbersome. Typically, a renovation takes less permitting and regulation changes. “Some states do not differentiate between the regulation of new construction, while others states have a tremendous difference in how they treat conversions,” Webb said, adding that New York has a conversion law that requires more expenses and disclosure than in other states. “You have to make sure the zoning is correct for whatever you are trying to do, whether it is fractional, timeshare or other types of properties,” Moore said. Developers also need to determine whether lenders will support the type of property they choose, in advance of conversion. “Lenders are sometimes more skittish about converted products,” Webb said. The cost of converting ﬂoor plans to timeshare units may affect the product options. “If the property is just a straight hotel, room size is a problem,” Moore said. “There are limits in what you can do in terms of combining units to make a bigger unit,” Webb said. “There may be a ventilation shaft or elevator shaft that prevents you from combining units.” hmm@questex.com SUNSTREAM HOTELS & RESORTS Future timeshare design features high-tech ideas By Christine Blank CONTRIBUTING EDITOR Las Vegas–Star Trek-type technology might be a part of the timeshare unit of the future, designers speaking at ARDA’s annual Convention & Expo in Las Vegas in April predicted. Margit Whitlock, principal and creative director of Architectural Concepts, San Diego, said timeshare units could potentially have hologram-type images to entertain or provide a speciﬁc environment. There could be an ionized screen on the wall, where owners could plug in an aquarium scene, a garden scene or other images, Whitlock said. “The whole room could change its mode or its visual appearance completely,” she said. In addition, Whitlock said timeshare owners would have more control over their environments to help set the perfect mood. “What if you were able to check-in with your Palm or BlackBerry, and the temperature and everything is correct before you check in?” Whitlock said. That type of feature especial- ly would work well in a fractional product, she said. In addition to the owner’s desired groceries sitting in the unit, the resort likely would set the temperature according to the owner’s liking, chill wine and make sure the atmosphere is tailored to the individual. “It is what people are expecting when they go for an extended product,” Whitlock said. Meanwhile, current technology in timeshare units follows the popular consumer trends. All timeshare units should have iPod docking stations, if they don’t already, said Merilee Elliott, principal of Merilee Elliott Interiors, Chicago. “All these old-fashioned stereos and DVD players are obsolete because now Blu-ray is coming in and everybody travels with an iPod,” Elliott said. In addition, designers are ﬁnding creative ways to hide the wiring for ﬂat-screen TVs. “We’re working with manufacturers to make a back panel that is integral with the piece of furniture, so you don’t have to pull wires through the wall,” Elliott said. hmm@questex.com Starwood Vacation Ownership launched sales at its newest resort in Steamboat Springs, Colo. Sheraton Steamboat Resort will undergo a complete renovation that will include converting a portion of the property to 45 luxury two-and three-bedroom vacation ownership villas. The company will now have four ownership resorts in the state including its ﬁrst fractional resort, the St. Regis Residence Club, Aspen. The Sheraton Steamboat Resort will begin construction at the conclusion of this year’s ski season. The ﬁrst phase is expected to open in late 2008. The ﬁrst phase of construction includes a total renovation of the common areas and the conversion of the Morningside Tower into 21 vacation ownership villas and a new sales gallery. This phase is expected to open in the fall of 2008. Compiled by Heather Gunter, hgunter@questex.com http://HotelMotel.com http://www.HotelMotel.com/digital_edition

Table of Contents Feed for the Digital Edition of Hotel & Motel Management - April 21, 2008

Hotel & Motel Management - April 21, 2008 Contents Vista Affirms Fair Franchising Doctrine HOTEC Panel Explores Green Procurement Spa Revenue Drives Overall Profitability Perspective Legal FAQ Sales Clinic Travel Trends Guest Column Trends & Stats Owners and Operators Feel Pressure to Switch to HD Protect and Clean Stone Floors Coffee On Demand Fitness Equipment Experts Weigh New Builds Vs. Conversions Transactions Ad/Edit Index Marketplace Classifieds Checking Out

Hotel & Motel Management - April 21, 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.