Inside Talk

The latest on the legacy resort industry

30 years ago, Liberte broke new grounds in the timeshare industry. Selling to Vacatia means I can pass the torch to the next-generation of innovators. I’m excited to see what’s next for our combined company.

Dennis DiTinno
Liberte Management Group

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Back to Great

Back to Great

April 22nd, 2021

By Vacatia Partner Services

For one legacy resort unable to keep up with needed maintenance, TripAdvisor reviews had become brutal. “Stay Away – Room and all furniture dated and nasty.” “Decor, furniture and overall appearance was severely outdated.” “Everything about this place is bad.”

What these comments don’t mention is the resort’s premier beachfront location, amenities including a spacious pool, and a location within walking distance of local restaurants and attractions. Rates at nearby resorts were twice as high for standard rooms without a kitchenette. Clearly, the potential was there for a turn-around, but with owners already disillusioned, a special assessment had little chance of bringing in the needed funds and might have even caused more owners to bail. The resort was in the dreaded death spiral.

Stories like this are exactly why Vacatia Partner Services has partnered with Glacier Creek Capital to help bring resorts back from the brink. “Although we have multiple products and services, this is the service I’m most excited about,” says Grant Miller, Head of Growth at VPS. “Through them, we offer a revolutionary — and I don’t use that term lightly — form of financing for HOAs. They can qualify for up to $20 million to improve units and amenities. With these funds, resorts can get back to a level of quality that creates a great vacation experience for families. We think this will be extremely important to the future of many legacy resorts.”

New Financing Model

What makes this offering different, says Seth Metsker, Glacier Creek’s Co-founder and Head of Real Estate and Credit, is they view this as an opportunity to partner with HOA’s by providing them with the funds to do all the needed improvements at once, as well as the expertise to do it right. “Often, we see properties that really haven’t been touched in 20 years,” he says. “We focus on improving and updating the property to bring it as close to current as possible, which could improve the owner experience, attract new rental revenue and, eventually, a new stream of owners. With our program, we are looking at the future potential of the property, not just past performance. We have a creative approach that recognizes that once renovations are complete, the revenue streams will look completely different.”

To help resorts reach their full potential, Glacier Creek can provide a turnkey solution that includes contractors, designers and other professionals who ensure that the funds deliver maximum value. “Our background is in real estate development as well as hospitality generally, so we can see exactly where the potential is and how to achieve it.” Metsker says. “We’re not just writing a check and moving on; we have a three- to five-year loan product that’s based on our being an active partner to really drive results.”

While resorts are not required to use Glacier Creek’s roster of professional services, all contractors must be vetted to ensure they are qualified for the project. “Resorts will find they usually get better deals because of our national volume so they save money on the overall project,” Metsker explains. “We focus on renovations to position the resort to drive long-term owner value. We can help them see exactly where they’ll get the biggest bang for the buck.”

“What makes this perfect is that Glacier Creek is not just a financing partner, they actually understand property management and what draws owners and rental guests,” Miller adds.

Before and After

It’s not just about changing out countertops and bedding, the renovations often solve functional issues that lead to guest dissatisfaction. At the resort with the bad reviews mentioned earlier, Glacier Creek’s data-driven approach meant that the team pored through past reviews and comment cards from owners, potential owners and returns to determine exactly where the pain points exist and then did a cost/benefit analysis. The biggest issues? Less than ideal room layouts made the units feel cramped and lacked functionality with aging Murphy beds.

Now that three model rooms have been completed, the new units feel much larger. “We partnered with a national designer to come up with a plan to eliminate the Murphy beds and reconfigure the kitchenette along the wall as well as a complete refresh of the bathroom, FF&E and appliances,” Metsker says. “It was mostly about the function of the space. Before, when the Murphy bed was down, you couldn't walk around it to get to the kitchen which was a long-lasting complaint. We were able to identify the true pain points and solve them to drive value for the owners and create an almost brand-new unit.”

Before the renovations, the units have not sold consistently and the resort’s average daily rate (“ADR”) ranged from $90 to $100, depending on the type of unit. Once renovations to the 80-key resort are complete, this should improve owner’s odds of selling their unit while rental ADRs could potentially double. This will put the resort in to improve the value for owners and ultimately attract new owners.

“When talking with resort HOAs, we will help them establish the project’s scope, come up with recommendations on the best tactics, and then facilitate the entire project,” Metsker says. “By tightening the timeline, you don’t have renters seeing one type of unit online and then being disappointed that their room looks nothing like that. Rental revenues will increase dramatically, and some of these renters will want to become owners. Sometimes, this will be the only way that independent properties can remain timeshare resorts.”

“At VPS, we are dedicated to the success and growth of legacy resorts and their vibrant owner communities,” Miller adds. “With Glacier Creek Capital, we can offer a vital service that no one else has. I predict that once people understand exactly how fresh and innovative this approach is, we’re going to be contributing in a big way to the overall health and growth of the timeshare industry.”

Ready to learn more? Connect with Vacatia Partner Services here or call us at (720) 449-6738!

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