Get Adobe Flash player
Truth in Lending One company’s commitment to educating lenders By Sharon Scott, RRP It’s a rainy June morning in Cromwell, Connecticut – a Hartford bedroom community – as 50 or so businessmen and women don their name badges and claim their seats in a meeting room at the Crowne Plaza directly off the interstate. They are an audience of bankers, accountants and attorneys gathered to attend a half- day forum being presented by Colebrook Financial Company, whose goal on this day is to provide educational instruction about the timeshare resort industry. Colebrook principals Bill Ryczek, Jim Bishop, Fred Dauch and Mark Raunikar – long-time financiers specializing in lending to timeshare resort developers – are the hosts. Their intent is to share information about the industry with those unfamiliar with timeshare, while updating those already doing business with Colebrook. This session being held on June 11, 2013 is the fifth such event Colebrook has presented. The quality of past years’ events is evidenced by the fact that many in the audience come each and every year. Clearly, there’s a strong interest in timeshare as an asset class, and today, the energy of the crowd is high. Rightly so. They’ve got a top-notch panel of speakers. This year’s panel includes American Resort Development Association (ARDA) President Howard Nusbaum, Stuart Allen of Vacation Ownership Sales, Butch Patrick of Zealandia Holdings (fka Festiva Resorts) and Joe Cantrell of King’s Creek Plantation. Last year’s audience attended to the remarks of Nusbaum, Bluegreen Corporation President and CEO Dave Pontius, Craig Nash CEO of Interval Leisure Group and Wyndham Vacation Ownership EVP and CFO Mike Hug. It’s a panel of stars; but why? What’s to gain? “The previous four educational forums have provided an excellent introduction to the timeshare industry for many institutions, and have been an informative update for those already doing business with Colebrook,” explains Ryczek. “In addition, the session is an opportunity for networking among the institutions and allows them to share experiences. Colebrook now has 15 banking partners, several of which have established a relationship during the past two years. The increased capacity enables Colebrook to structure larger financing packages on more competitive terms.” The Colebrook Partners: (standing l. to r.) Tom Petrisko, Fred Dauch and Bill Ryczek; (seated l. to r.) Mark Raunikar and Jim Bishop. One attendee who has shown up for several years running is Region Manager, SVP Richard J. Iovanne of People’s United Bank. “I’ve attended several of these seminars and there’s always a good panel,” says Iovanne. “The speakers characteristically represent diversified interests and are very informative. It’s a great forum for those of us participating in this asset class. We are given good performance metrics and information that makes us comfortable continuing to maintain the relationship.” The audience is given the good, the bad and the not-so-good. For example, Nusbaum doesn’t pull any punches when he describes the challenges involved in educating government officials about the resort industry. “Because of some earlier, outrageous practices of a few unscrupulous marketing companies, timeshare was regarded as the Rodney Dangerfield of the hospitality business,” he quips. He describes how ARDA has worked relentlessly since those early days to self-regulate the activities of participants in the industry, as well as to help guide legislators and regulators to introduce fair legislation. “The recent economic downturn has prompted greater creativity 60 Perspective Magazine North America January/February 2014 and entrepreneurship on the part of resort developers,” he adds. “As a result of these measures and a gradually rebounding economy, the marketplace is responding.” Ryczek enjoins that when developers faced the financing shutdown, they tightened their processes and in some cases, became more profitable. “Many developers stopped selling to customers with a sub-par credit score,” he says. “And because the credit scores of those they were selling to were important to them, they were more likely to pay on time. We found that our resort clients’ receivables performed well during the recession because of these stable owners.” He also observed that the dollar size of a timeshare note, typically from $5,000 to $20,000, was more affordable to these owners. “The paper held up well during the recession,” he adds. “These days, lenders are vigilant in looking for a sound FICO score.” In his remarks, Stuart Allen, CEO of Vacation Ownership Sales (VOS), mentions that Vacation Internationale (VI) (for which VOS performs sales) will celebrate 40 years of being in business in 2014. The company’s four decades of providing a points-based vacation ownership product