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From the
June 2004 issue of:


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ARDA Provides Convention Attendees with "Passport to the Future"
 
by Alan N. Schlaifer
Principal
Law Offices of Alan N. Schlaifer, P.C.
 

For 2004, the American Resort Development Associationproduced a spectacular show in Las Vegas. It included thoughtful ideas and techniques that work enterprising leaders from the timeshare industry and beyond, plus dazzling entertainers, many stimulating sessions, a capacity Awards Gala, parties to celebrate the industry's strong growth, and a trade show made for profitable networking and even business.

ARDA President Howard Nusbaum said, "Feedback from our members during the convention was uniformly positive. Our several VIP lounges were a real home run for our Trustee members, offering them an opportunity to meet colleagues and discuss business in a relatively private setting."

He added, "The creative design combining the exhibition hall with the general session made it easy for everyone to get together and find the elements most important to them."

During May, this was the largest convention in town. And while Vegas was built on the contributions of those hoping to beat the house, all attendees and exhibitors, plus ARDA itself, were big winners at ARDA's timeshared house. With industry revenues expected to exceed $11 billion this year and owner loyalty remaining strong, as growth continues, vacation ownership has shown it is anything but a house of cards.

Dubbed "Passport to the Future," ARDA's Annual Convention hit record highs and achieved other measures of success in key categories as it provided gateways for members to boost sales and profits:

Total attendance, over 3,900, an increase of nearly 15% from last year in Orlando

Trade show exhibitors, with over 160, with many returning, plus a new high in first time. Strong brands, including HBO, Yum! Brands (Kentucky Fried Chicken, Pizza Hut, Taco Bell), Sealy, and Serta added their strong brand presence

Show flow: Entry into the trade show after the general session on Tuesday, with an incredible 2,800 passing next door through the portals into the show for lunch, networking and doing business. The town idea has evolved very well, and with all exhibitors in one large area, achieved its best success to date.

Educational sessions that were filled: most programs were SRO - standing room only - and seats had to be added. Attendees rated most speakers very highly and were eager to hold onto their seats, and the notes distributed, as valuable tips were provided at the varied sessions on everything from more successful use of the Internet, to environmentally friendly resort design and operation, to global issues, to coping with Do Not Call and other challenges. Expert speakers presented a wide range of ideas that work, not merely theoretical concepts.

Funds to support the ARDA International Foundation and its valuable industry research and educational efforts exceeded $62,000, with $27,000 from the live and silent auctions and $35,000 from Interval's "Bringing Down the House" party.

While the Passport provided the passage to new ground, it sailed through the customs that have become ARDA hallmarks. After the strong content and ARDA's efficient operation of programs and the trade show during the day, the thousands of attendees had many reasons to celebrate winning in Vegas.

And celebrate they did at high-energy parties. The kickoff came at ICE's Monday night bash at Studio 54 at the MGM Grand. Whether watching the acrobatic entertainers or out on the dance floor, the pace was sizzling. This continued at the Gala on Tuesday, featuring headline entertainer Lily Tomlin.

The final chapter came at Interval International's party on Wednesday night. More than 1,000 attendees, jet-lagged or not, came to enjoy the as-always mystery group, this time, The Wallflowers, led by Jakob Dylan, a/k/a Bob Dylan's son. Unlike James Bond's beverages of choice, the audience was shaken and stirred by the entertainers.

As ARDA looks ahead to next year's return to Orlando, members and staff have positive memories. Next year's convention will be at a new venue, Walt Disneyworld's remodeled Dolphin & Swan. Reflecting members' strong preferences for the Sunday to Thursday time slot to avoid a weekend away from their families, Catherine Lacey, ARDA Vice President of Meetings & Conventions, said that ARDA has listened and chosen to hold next year's convention from April 24 to 28, 2005 to meet that objective.


 

ARDA at Center Stage

 

Besides holding the convention, ARDA plays other vital roles for the resort industry. One occurs throughout the year, as the industry's protector and defender on the legislative and regulatory frontlines, as well as in building the industry's image based on owners' positive vacation experience. The second is at the Annual Awards Gala of Excellence in recognizing those individuals and companies that have raised the bar of achievement.


 

General Session Stardom

 

At the General Session, ARDA leaders began by recounting the victories and achievements of the past year. These are but a few of the many highlights:

 

• Legislative Advocacy is Job One

 

Rob Webb, ARDA's Chair of the Legislative Council and partner in the law firm of Baker & Hostetler, Orlando, Florida, says that members believe that the whole legislative and regulatory arena is ARDA's "most important job and tangible benefit for members.

Examples of the breadth of its focus range from:

—Changes to U.S. Housing & Urban Development (HUD) regulations on RESPA as related to timeshare

—Dramatic changes to the timeshare laws in Florida, California, Nevada and other states

—Tax battles everywhere

—Do Not Call regulations at the Federal level - the Federal Trade and Federal Communications Commissions - as well as in key states.

Webb stressed, "We cover details that vary state by state, and bureaucracy by bureaucracy. We have focused on making the timeshare industry better for both developers and consumers."

ARDA Chairman Burlingame commended Webb and others for their efforts in the past two decades on ARDA's behalf.

Attention then turned to state legislation. Mitch Imanaka, ARDA's volunteer Chairman of State Legislative Affairs, and a partner in Hawaii-based law firm of Imanaka and Kudo, noted, "One of the major areas of emphasis, in every state, will be regulatory uniformity," instead of the past hodge-podge of laws across the country. Imanaka emphasized that uniformity serves developers and consumers alike.

Stephany Madsen, ARDA's Senior Vice President of State Affairs with over 25 years of timeshare experience, commented that ARDA focuses on two major areas. One is "decreasing the regulation of the industry in every area, while still protecting the consumer." The second is "watching how the different states look at taxing us."

In addition to working on legislative and regulatory issues in several dozen states, ARDA is going elsewhere to help timeshare regulators. Madsen said they are "working with the Bahamian government to re-write their timeshare laws," and that the "Ministry of Finance from the Bahamas is attending this convention."

Nusbaum added, "I think one of the things that ARDA has developed a reputation for among the states is helping to devise plans that serve the consumer, the industry and the realities of governing. Now we have a new opportunity in helping the states actually govern our industry more effectively."

Madsen pointed out reasons for this situation: "State governments are looking for efficiencies. They respect our growth and our change. They see us as contributing to the state economic and social infrastructure." She concluded, "This is truly a time of opportunity for us."

 

• The Federal Side of the Aisle

 

States were not alone in proposing or enacting many measures with an impact on the industry. Their federal brethren were active as well, with the assistance of ARDA staff and member volunteers.

ARDA's work in building a solid relationship with the FTC was an excellent example of its impact and effectiveness. John Burlingame's commented, "This last year was clearly the year of Do Not Call. Not to mention do not E-mail, Do not Spam and all the rest. It's an issue with tremendous impact for us.

Joe Sanscrainte, Counsel at Call Compliance, Glen Cove, New York, said, "We are now seeing how ARDA's work here has paid off, with a leadership role from the start. The carveouts for pre-existing business relationships are victories."

Sam Depoy, ARDA's vice president of Federal Legislative Programs described how ARDA worked with the FTC to help re-write their timeshare information to consumers on their web site. "The earlier information was inaccurate. They needed information. ARDA provided it."

Another important issue is needed action to address the threat of class action lawsuits. Mike Clowdus. Chairman of ARDA's Federal Legislative Committee and a partner in the Ballard Spahr law firm, Denver, Colorado, said that efforts on Class Action Reform deal with issues such as mold and mildew, as well as ADA - the Americans with Disabilities Act.

He said, "We are working with our relationships in Congress to get relief in class action suits, rather than fighting the battles one at a time in the states." Allies he mentioned come from a wide collection of industries: real estate, hotels, restaurant, shopping centers, and apartment associations.

Parties who may be vulnerable to such a lawsuit, said Clowdus, include "basically everyone.  If you serve the public, you are a potential target for a class action suit." The potential plaintiffs and class members also embrace a huge number of people: "Just by entering a building you are eligible to be part of a class action suit."

A totally separate threat comes from terrorism: Depoy said that terrorism risk insurance is "due to expire in 2005." If the right to terrorism insurance isn't extended, it could be "potentially devastating. Insurance companies will not offer terrorism insurance if they don't have to. Yet, lenders require some type of terrorism risk insurance.

She urged ARDA members, "Make sure our voice is heard where it counts. Write letters to U.S. Secretary of the Treasury, John Snow," starting with the model letter on ARDA's web site.

 

 

• A Piece of the ARDA-ROC and PAC

 

Howard Nusbaum, along with Lynn Weas of Chrystie Lodge, Avon, Colorado, and Ken McKelvey, President, Defenders Resort Management, Myrtle Beach, South Caroline, reviewed the background and accomplishments of ARDA's Resort Owners Coalition. In addition to a brochure, "What has ARDA-ROC done for you recently," Weas said this group "never strayed from its initial focus, advocacy on behalf of owners only. Owners were solicited to contribute between $3 and $5 per year. Key issues were funded through its funds, with an estimated total of 550,000 timeshare owners now contributing.

He pointed to one success, battling against a proposed huge tax increase in South Lake Tahoe. By spending less than $90,000, they were able to save owners $10 million over the first six years when that would have applied.

McKelvey cited successes in his home state. "Thanks to ARDA-ROC, we avoided an imputed tax on timeshare exchanges and had a successful constitutional challenge to a South Carolina tax.

Nusbaum added that as a result of ARDA-ROC's efforts, "we dodged two bullets.

ARDA's Political Action Committee, ARDA-PAC, focuses on developer issues. John Burlingame of Hyatt and ARDA's Chairman said, "Without your support, we would not be able to continue this very impressive effort. We are very careful not to mix owner and developer issues."

He thanked Craig Nash of Interval International for heading ARDA-PAC.

 

• Accounting Rules & Resort Realities

 

During the General Session, ARDA leaders reviewed a host of other key achievements. In brief, they were:

—By the numbers: More favorable - and realistic - consideration from the AICPA (American Institute of CPAs) and FASB (Financial Accounting Standards Board) on the proposed treatments of down payments in sales and bad debts.

—ARDA International Foundation (AIF): summary review of research, education of students interested in careers in the industry, consumer education with partners in the travel industry as a whole, and industry professional.

Former ARDA Chair Deb Linden, Island One Resorts, said, "We're in our second year of publication and testing on the Timeshare Industry Resource Manual. We have a new CD out on the Principles of Timeshare. But I'm most pleased that ARDA is finally taking the lead in the area of sales training and is introducing a national consumer-centric sales training program."

Those travel partners include USA Today and American Express. ARDA has established an ongoing campaign for consumer advertising in USA Today. With four placements a year and possibly more, Johanna DeBonte, Vice President of Advertising Sales at USA Today, cited some of the demographics that create an overlap in target markets with ARDA members:

 

• Median household income: $117,204

• Professional or Managerial: 54% (Activity engaged and capable of  buying and investing in real estate)

• 98% own a home

• 970,000 Own weekend/vacation home

 

Travel and leisure:

• 60% took 3 air trips per year

• 17% Golf

• 22% Sail

• 15% Play tennis

 

It is also participating with American Express at highly visible and important venues, such as the New York Times Travel Show.

 

—Research:Jim Peters, Chairman of the AIF's Education Committee, and Scott Berman with Pricewater-houseCoopers reviewed current research projects that can assist member efforts in communications with real estate commissions, legislators, the press, and financiers. Initiatives include:

 

• The new Economic Impact Study

• The Financial Performance Study.

• Studies on Mexico, Hawaii,    and the Caribbean.

• The Future Timeshare Buyers Profile.

 

—The Global Alliance for Timeshare Excellence (GATE): With nearly 600 convention delegates from outside the U.S., it was an apt occasion for former ARDA Chairman Tony Genth to review actions and priorities for this truly global industry. For the past several years, one of the first parts of the program has been an in-depth Global Marketplace, and a visitor this year was Mexico's Minister of Tourism, Rodolfo Torres.

 

• Celebration of 35 years:

 

Two industry pioneers, attorney Bill Ingersoll and the inimitable Stuart Marshall Bloch, invited all attendees to a party celebrating ARDA's 35th anniversary. A special guest was ARDA's first president, Garry Terry.

 

• Another Celebration: The Gala

 

A capacity audience recognized some of the industry's most accomplished individual and corporate leaders. While the convention was named "Passport to the Future," this gala was labeled the "Passport to Excellence."

And excellent it was. Here are a few highlights of the show, hosted by the ever-popular J.P. Ottino of the Berkley Group, Ft. Lauderdale, Florida. While we have mentioned a few of the highlights, all of the award recipients and all nominees are truly winners in our view.
 

 

ACE Lifetime

Achievement Award:
 

George Donovan,
President & CEO,
Bluegreen Corporation

 

A life defined by superlatives. His impact on this industry, on this association and on our profession is profound and enduring. He was among the very first to introduce timesharing to the United States. The first company he led would go on to become one of the country's largest timeshare companies.

The company he now leads is one of the top developers in the world. In just ten years, their overall growth rate has exceeded 2,000%. He always pushed his company to be among the leaders. He restructured the firm for long term growth by making timeshare its central focus. He pioneered leading-edge innovations such as partnerships with retail outlets. By the turn of the century, Forbes Magazine had named his firm one of the fastest-growing companies in the United States.

But his vision and capacity for leadership extended well beyond his own corporations. For 30 years he has been an active leader at ARDA. He has served as our Chairman, helping to change our name to better reflect our purpose. He worked on the ARDA Executive committee, the Long Range Planning committee, the ARDA Inner Circle, the committees for Ethics, Membership, and Public Relations.

When the industry struggled, he was there to lead and encourage. He always believed in the promise of the timeshare product, and the integrity of its people. He has confronted every major issue to face the industry with extraordinary focus and commitment. He is the consummate team-builder and serves as a role model for thousands of professionals to this very day.

There are many outstanding examples we could give to describe his remarkable character. But he has a standard phrase that he uses that perhaps sums up his commitment: "When a sale is made, an obligation begins."                                                                        

 

Association Producer
of the Year:

Robert J. Webb,
Baker & Hostetler, LLP.

 

His "recruitment efforts result in the most new member revenue for the Association.  He worked to raise the level of member participation with the industry, particularly in the area of VIP memberships. Relentless in his pursuit of increasing participation at all levels, his record over the past 10 years is unparalleled."    

 

The Membership
Producer of the Year:

 

David Callaghan,

Assistant Vice President,
Eastern Region of
Interval International,
(for the third year in a row.)

 

This goes to the ARDA member who has demonstrated the most ARDA-team spirit in the effort of recruiting new members. Criteria for this award include:

The number of direct referrals for membership; the number of new member companies; and the spirit of teamwork inspired by the producer.                                    

 

Ingersoll/Bloch
Advocacy Award:

 

Max Morris, Esquire,
the individual most responsible for bringing
the legal standards of timeshare into the 21st century,

 

A few of his contributions include:

• Being the first Chairman of ARDA's State Legislative Committee, and molding that committee into a high-level forum for exchanging ideas about state legislation and regulation.

• He also recommended many regulatory reforms that helped the industry in doing business, that also kept consumer protections in place – a standard that ARDA continues to follow to this very day.                      

• Also, he counseled ARDA-Florida during the very difficult 1980s, working with regulators and legislators in that state. His negotiation skills eventually led to the profound change in attitude toward timesharing.                 

• Negotiated major changes in Florida's timesharing law through the 80s and 90s, including the extensive Florida Vacation Club amendments.

• Led ARDA in adopting the 1994 Model Vacation Club Act.

• Moved his own practice from his law firm to a competitor's practice, because he saw that the timesharing industry would be better served from another platform.                                   

• One of the industry's greatest supporters, who always believed that consumers would fully embrace the product. And he nourished the continual improvement and expansion of timeshare with the guidance of appropriate state laws.                                           

• One In conclusion, "His record of legal counsel to the timeshare industry is nothing short of inspirational."    

 

ACE
(ARDA Circle of Excellence)
Employee of the Year
:

Susan Vaz,
Assistant Vice President

for Consolidated Resorts

 

She is one of this industry's great success stories. She worked her way up to a resort manager, then moved over to marketing and began to make an enormous impact. She re-invented the company's entire program for attracting, booking and selling mini vacations to tour their Las Vegas property.

And here's the best part: she based it entirely on full disclosure to the consumer. Instead of cold calls, she launched a radio ad campaign with celebrities describing timeshare vacations and giving out the company's toll-free number to call. Now, the prospects are calling the developer… asking about timeshare vacations. The result: the number of mini vacation tours has increased by 30%.

To further take care of new prospects, our winner created a Concierge Department. They stay in contact with the prospect and reinforce the full disclosure approach.

In addition, she manages the payroll for the telesales and field marketing departments, with budgets in the tens of millions. She also composed job descriptions for all employees in those departments and created standardized operating procedures for the entire operational side of the company. The result was a record-breaking sales total in 2003.

But more importantly she has established a system of marketing, based on full disclosure that is now a model for the rest of the industry. Our winner is truly the future of timeshare.    
 

 

Employer of the Year:
Fairfield Resorts, Inc.

 

How do you create a workforce full of people like Susan Vaz? How do you motivate them? How do you support them? How do you make them successful so that your whole company
is a winner?                              

Loyalty Rules!
How Today's Leaders Building Lasting Relationships

 

That is the title of the book by Frederick F. Reichheld, the enthusiastically received keynote speaker at the General Session. An honors graduate of Harvard's College and Business School, he is the founder of Bain & Company's Loyalty Practice, their Director Emeritus, a Bain Fellow, and the author of a The Loyalty Effect (HBS Press, 1996).

Reichheld's basic premise is that companies may achieve superior results - such as increased revenues and profits, along with higher employee retention and productivity - through improvements in customer, employee, partner and investor loyalty. Indeed, Reichheld's work, which has earned him recognition as one of the world's top 25 consultants from Consulting Magazine and praise from The Economist as the "high priest" of loyalty, has measured and demonstrated the linkage to loyalty to profits and growth. The New York Times says Reichheld "put loyalty economics on the map."

With our ARDA 2004 Passports in hand, Reichheld how his concepts have worked for some of America's fastest growing, most profitable businesses that are leaders in their industries and the world's leading businesses.

He began by declaring, "I'm the only person who cares about loyalty, but everyone cares about growth." He then asked, "What happens when you earn customer's loyalty?"

The answer, he said, is that "your costs are 85% of the competition, but your growth is 220%. Custom retention is a really important driver of profits. Loyalty leaders grow twice as fast as the competition."

Four firms he cited other paragons of loyalty are in the hospitality or travel industries: Four Seasons Hotels, Southwest Airlines, Scandinavian Airline System (SAS), and Chick Fil-A. Those in other businesses include Vanguard (mutual funds), Enterprise Rental Cars, Northwestern Mutual, Harley-Davidson, and eBay.

ARDA President Nusbaum said, "Fred Reichheld is right on point with the message our industry needs to hear."

The answer is easy: you follow the example of this year's winner of the ACE Employer of the Year Award.

There is a difference between a good employer and a great employer. Our winner of the ACE Employer award is working in the realm of greatness.        

They begin by offering employees the personal support of a powerful benefits package that recognizes opposite and same-sex partners. The company reimburses up to $6,000 to employees for completing college course work.

They provide substantial discounts on childcare costs, mortgage rates and up to $5,000 in adoption assistance per child.                    

Their professional development programs support every phase of employment. New employees begin with a new-hire orientation. After 30 days on the job each worker returns a New Hire Survey. There's also a Pulse Survey taken frequently, and face-to-face coffee chats in every department.      

All staff members, regardless of title, attend an annual training session for harassment, discrimination, ethics and integrity related to company policies.

Employees can take a wide range of on line courses in areas such as negotiating, project development, interpersonal communications and stress management. Senior managers also can take day courses in leadership, time management, team building, and much more.

There is even a Succession Planning program to prepare the company's leaders of the future. To make sure employees play as hard as they work, the company provides major discounts on the purchase or rental of vacation properties, and discounts on travel costs.

Out in the community, their "Matching Grants Program" supports many local non-profit causes. And all employees are encouraged to volunteer their time to worthy causes.

Who wouldn't like to work here? 8,000 people already do and it's easy to see why.
 

 

Innovators of the Year:

 

American Express, for their sales and marketing initiative, "Life. Divided by Vacations," an interactive, on line information module for consumers that is a milestone in timeshare marketing. Visitors to the site can learn about timeshare and the benefits of vacation ownership. The site provides information, quick facts, and interactive activities to learn about how timeshare works. There's also a glossary of timeshare terms, and answers to Frequently Asked Questions.

Concord Servicing Corporation, which delivered breakthrough technology that solves a traditional obstacle for the industry: real time portfolio management. Until now there has never been a way for both managing groups and their customers to view and work on portfolio account information. This was particularly true of developers without the resources to generate a full-scale IT solution.                                               

Our winner has changed all that. The new on line service provides consumers with a real-time communications channel to their loan and maintenance fee information. It allows them to make on-line payments, compute payoff quotes and view their own account histories.
 

 

Volunteer of the Year, "the Annie," in honor of
the late (and as all readers who knew her, truly great) Anne Crawford:

 

Jim Danz,
Princeton Resort Group

 

In describing this year's recipient of the ACE Volunteer Award, it sounds more like we're describing a brigade of workers, not just one individual.               

People say of him: "Pure, unstoppable energy. Genuine commitment. Optimistic and enthusiastic." That's everything you would want in a leader and especially in an ARDA volunteer.            

Danz served first as a member of the Meetings Committee and then stepped forward to take on the enormous task as Chairman of the Committee. He became not only the leader but also the Committee's coach, biggest fan and cheerleader rolled into one.

Danz has moved on to become co-chair of the ARDA Sales & Marketing Forum. He is already spearheading the effort to create the industry's first set of Best Practices in Sales & Marketing.        

He is a tireless force for the industry and this association. He is a visionary leader and selfless worker, inspiring his peers to new heights of performance.

 

2004 ACE Project of Excellence Award winner:

 

Marriott's Newport Coast Villas

 

[A]n expression of grace and accomplishment, not only by the facility but also by the entire development team. Located 30 minutes south of Los Angeles, the property was envisioned as the re-creation of an Italian Hill Town, the kind you seen in the Tuscan region of Italy.                                        

The challenges came in every possible area: the environment, the topography and most notably, the residents of the local community. The Newport Coast communities are statistically the most expensive in the country. Those residents wondered how a "timeshare" project could possibly fit in to this setting. Our award winning company focused a great deal of attention on answering those questions, explaining the intent, and building a positive foundation of good will for the project.

The resort itself is a luxurious adventure. Imported tiles and mosaics from Italy. Hand-forged ironwork. Hand-stenciled wall details. Hand-blown glass in custom light fixtures and heavy timbers. Every detail remained true to the Old World Mediterranean atmosphere. And yet what emerged was a formality you can enjoy with sand on your bare feet.          

In the end, a Tuscan dream opened to free-flowing praise from everyone involved, most importantly the new owners. In fact, the crowning satisfaction is that 10% of new sales have come from residents of the Newport community. This project is simply a stunning achievement.                            

 

Loyalty to ARDA

 

Under its dynamic volunteer leaders and staff, under the direction of President Howard Nusbaum, ARDA has done much to win member loyalty.

If your company is an ARDA member, or even if you are in the resort, you have no doubt gained much from what ARDA has done. If you attended the recent convention, you can help ARDA by providing input on your convention experiences and opinions online at their website feedback form atwww.arda.org" target="_blank">http://www.arda.org">www.arda.org.





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