In a move to maximize their timeshare holdings on Kaua‘i, Sunterra leaders announced Thursday they have entered into an agreement to acquire the balance of the percentage of Poipu Resort Partners L.P. which owns and operates the oceanfront Embassy Vacation
In a move to maximize their timeshare holdings on Kaua‘i, Sunterra leaders announced Thursday they have entered into an agreement to acquire the balance of the percentage of Poipu Resort Partners L.P. which owns and operates the oceanfront Embassy Vacation Resort Poipu Point (EVR).
Bryan Coy, director of investor relations for Sunterra, said company leaders purchased the remaining 69.57 percent partnership interest in a transaction valued at nearly $27 million.
Coy said that, with this transaction, Sunterra will acquire approximately 1,400 week-equivalents of unsold vacation interests (timeshare weeks) with an estimated retail value in excess of $30 million.
Coy said the reason for the investment is the desirability of the location.
“Our reason is clear. It’s a beautiful, pristine property that we were very happy to add to Sunterra’s portfolio. The team on site has worked together for quite some time, and are top performers,” he added.
“The property itself was already part of the Club Sunterra network, and was highly-sought-after by members,” Coy said.
“It is a timeshare property in total, though we do run the ‘unsold weeks’ part of the resort as a hotel, renting to the general public. Sunterra’s team is the existing property manager,” Coy said.
EVR Poipu Point is situated on 22 acres of overlooking Keoneloa Bay, and is immediately adjacent to the Grand Hyatt Kauai Resort & Spa.
The resort contains 219, two- and three-bedroom units.
The announcement comes a little more than three weeks after leaders of Starwood Vacation Ownership (SVO), the timeshare division of Starwood Hotels & Resorts Worldwide, held a groundbreaking ceremony on 18.5 acres of land at Princeville. The Westin Princeville Ocean Resort Villas there will be 179 timeshare villas and six hotel units.
Coy said Sunterra leaders are open to more timeshare opportunities, on Kaua‘i and in other locations.
“We’re excited to add this resort to the fold, and would certainly consider another just like it on the island. In short, we could utilize more time-share in Kaua‘i,” Coy said.
In the aftermath of Sept. 11, 2001, Kaua‘i’s tourism product was bolstered by its timeshare properties, while visitor economics on the other islands suffered as fewer people traveled across oceans to vacation. Economists surmised that the island’s economy benefited from having a high percentage of timeshare units, as those people who bought weeks at timeshare resorts on the island came to vacation here despite the terrorist attacks, having already paid for their accommodations.
Sunterra leaders will acquire approximately $22 million of performing mortgage receivables in the transaction, they said.
Coy said the closing of the transaction is subject to certain conditions, and is expected to occur within approximately one month, following which company leaders intend to release more detailed financial information regarding this acquisition.
Findings from the 2003 Hawaii Timeshare Industry Overview and Economic Impact Analysis prepared by officials with KPMG, LLP, with the assistance of SMS Research in a survey for the American Resort Development Association (ARDA), concluded:
- Hawai‘i’s vacation-ownership inventory has increased dramatically. Since 1999, Hawai‘i’s timeshare-unit inventory has grown by nearly 1,100 units, or more than 23 percent, to 5,666 units;
- Timeshare is aiding a growing diversification of Hawai‘i’s visitor industry. Timeshare accommodations are equivalent to 8 percent of the state’s 71,000 visitor units (compared to about 6.5 percent in 2000);
- More even distribution of new timeshare projects on all four major islands. The recent growth of the state’s inventory has resulted in new resorts translating to roughly comparable market shares of 18 percent (23 percent for the City & County of Honolulu and Hawai‘i county, and 28 percent to 33 percent for Kaua‘i and Maui counties).
More than 2,500 new units are currently proposed and due to be delivered in the next five to 10 years.
Timesharing in Hawai‘i is a half-billion-dollar industry. Total timeshare sales in 2003 were an estimated $538.9 million, with approximately 18,200 intervals sold (average price $27,200).
Sunterra is one of the world’s largest vacation-ownership companies, with more than 300,000 owner-member families and more than 90 branded or affiliated vacation-ownership resorts throughout the continental United States and Hawai‘i, Canada, Europe, the Caribbean and Mexico, according to a company spokesperson.
- Andy Gross, business editor, may be reached at 2453681 (ext. 251) or agross@pulitzer.net.
