Original Message:
Re: Open Letter to Steve Cloobeck, Diamond Resorts International CEO (by Robert R.):
jeff_reports wrote:Urge all Diamond owners to read quarterly reports filed by Diamond with SEC, and also to listen to CEO David Palmer discuss Diamond business returns on quarterly conference calls. They are all open to the public.s Bottom line, you will discover that Diamond focuses on several ways to increase profits, and raising maintenance fees is not the primary vehicle. First, they buy back lots of inventory at favored resorts thru foreclosure and/or tax sales. That is how they replenish their own pipeline. On average, Diamond pays $1500 per timeshare interval, then resells it for close to $20K. That's an amazing profit. Secondly, they make good ongoing revenue by managing properties, charging a 15 percent fee of all revenues collected during the year. The 15% is also pure profit, according to Diamond's quarterly and annual reports. Third, they make major league money every time they sell a new timeshare package of points to new or repeat buyers. Last presentation I attended, July 2015 in Maui, points were selling for more than $10 per point. Couple years ago, the same points cost $3 each. So the price inflation on points is also giving Diamond a huge increase in profit and revenue. All of the above info is included in Diamond's own reports on their "investors page" on diamondresorts.com.Finally, Palmer replaced Cloobeck as CEO in January when Diamond bought out Cloobeck while allowing him to remain on board for two more years. He no longer runs Diamond, but, like many former CEO's, is still getting paid like a king.
Thank you for this very informative post. What a racket. Raise the maintenance fees until the owner walks away, then buy it back cheap and resell to another sucker.