The $60-million pipeline of acquisitions and development will generate $300 million in revenue for the company, Douglas Bech, Raintree's CEO, tells GlobeSt.com. As the 12-year-old club hoists its 2008 sails, Bech says a Boston-based investment banking firm is in the midst of negotiations with equity investors to finance Raintree's plan to acquire and develop additional resort properties.
The Diamond Resorts' agreement is "a test to see if this is a good way" to add locations for members,Bech explains. "It's all about member satisfaction at properties. We think they'll be happy with this. We think this is a good way to do it."
Raintree has 15 destinations in the Western US and Mexico. Diamond has 110 branded and affiliated resorts in Hawaii, Canada, Mexico, the Caribbean and Europe. The 1,000-week trade-off provides five more locations for Raintree members, setting up inroads in the Southeast and Lake Tahoe plus adding a second resort in Hawaii. Bech says Diamond is getting access to Raintree's seven resorts in Mexico and resorts in Palm Springs, CA, Park City, UT, Telluride, Whistler Bridge in British Columbia, Birch Bay, WA and its second Hawaiian resort.
"It's a reasonable kind of test arrangement," Bech points out. "Both run a club so this made it easy." Raintree's club has 50,000 members and Diamond has 360,000 members.
Raintree is poised to close on its 16th location for the vacation club. It has 30 finished condos under contract in Scottsdale and an option, which Bech says will be exercised, for another 90 condos at the same North Scottsdale resort.
Bech says a closing is at hand for the $6.5-million purchase of the 99-room Hotel Nautilus at Paseo de la Marina Sur 210, which will undergo a $3.8-million renovation and re-branding to Villa Vera, a Mexico resort chain that Raintree bought a few years ago. The company is projecting the retooled boutique hotel will generate $80 million of gross timeshare sales.
The Hotel Nautilus, completed in 1995, was branded as a Howard Johnson hotel three years ago. Located directly across the street from Raintree's Club Regina, the hotel has five four-story towers and is a five-minute drive from Puerto Vallarta International Airport. Its neighbors in the prestigious Marina district include four- and five-star hotels of Marriott, Westin, Mayan Palace and Melia.
Bech says Raintree's other 2008 plans include adding to its weekly inventory at the River Club in Telluride, where it also has a fractional ownership property, the Franz Klammer Lodge. On the development front, Raintree is planning to add 28 units to its 130-villa Club Regina in Los Cabos, Mexico.
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