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Category: Bluegreen Vacations (BXG)
Date: 2 March 2021 Stock price of Bluegreen Vacations (BXG): $8.70 We take a more detailed look at Bluegreen Vacations (BXG) a leading vacation ownership company that markets and sells VOIs and manages resorts in popular leisure and urban destinations. Their resort network includes 45 Club Resorts (resorts in which owners in the Bluegreen Vacation Club (“Vacation Club”) have the right to use most of the units in connection with their VOI ownership) and 23 Club Associate Resorts
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We strive to be the top one or two producer in the ready-mixed concrete markets we serve and operate in some of the fastest growing and most attractive metropolitan markets in the United States, including New York City, Philadelphia, Washington, D.C., Dallas-Fort Worth and the San Francisco Bay Area. These markets represent five of the top 12 metropolitan statistical areas"
More About Bluegreen Vacation Corporation
We are a leading vacation ownership company that markets and sells VOIs and manages resorts in popular leisure and urban destinations. Our resort network includes 45 Club Resorts (resorts in which owners in the Bluegreen Vacation Club (“Vacation Club”) have the right to use most of the units in connection with their VOI ownership) and 23 Club Associate Resorts (resorts in which owners in our Vacation Club have the right to use only a limited number of units in connection with their VOI ownership). Our Club Resorts and Club Associate Resorts are primarily located in high-volume, “drive-to” vacation locations, including Orlando, Las Vegas, Myrtle Beach, Charleston and New Orleans, among others. Through our points-based system, the approximately 218,000 owners in our Vacation Club have the flexibility to stay at units available at any of our resorts and have access to nearly 11,300 other hotels and resorts through partnerships and exchange networks. We have a robust sales and marketing platform supported by marketing relationships with nationally-recognized consumer brands, such as Bass Pro and Choice Hotels. These marketing relationships are intended to drive sales within our core demographic, which is described below. Prior to 2009, our vacation ownership business consisted solely of the sale of VOIs in resorts that we had developed or acquired (“developed VOI sales”). While we continue to conduct such sales and development activities, we also derive a significant portion of our revenue from our capital-light business model, with the goal of utilizing our expertise and infrastructure to generate both VOI sales and recurring revenue from third parties without the significant capital investment generally associated with the development and acquisition of resorts. Our capital-light business activities include sales of VOIs owned by third-party developers pursuant to which we are paid a commission (“fee-based sales”) and sales of VOIs that we purchase under just-in-time (“JIT”) arrangements with third-party developers or from secondary market sources. In addition, we provide resorts and resort developers with other fee-based services, including resort management, mortgage servicing, title services and construction management. We also offer financing to qualified VOI purchasers, which generates significant interest income
Our Vacation Club has grown from approximately 170,000 owners as of December 31, 2012 to approximately 218,000 owners as of December 31, 2020. The typical Vacation Club owner is 48 years old and has an average annual household income of approximately $81,000. According to U.S. census data, households with an annual income of $50,000 to $100,000 represents approximately 29% of the total population. We believe our ability to effectively scale our transaction size to suit our customer, as well as our high-quality, conveniently-located, “drive-to” resorts are key to attracting our core target demographic.
Our Vacation Club has grown from approximately 170,000 owners as of December 31, 2012 to approximately 218,000 owners as of December 31, 2020. The typical Vacation Club owner is 48 years old and has an average annual household income of approximately $81,000. According to U.S. census data, households with an annual income of $50,000 to $100,000 represents approximately 29% of the total population. We believe our ability to effectively scale our transaction size to suit our customer, as well as our high-quality, conveniently-located, “drive-to” resorts are key to attracting our core target demographic.
Operating Segments Of Bluegreen Vacations
We report our results of operations through two reportable segments: (i) Sales of VOIs and financing; and (ii) resort operations and club management. Our sales of VOIs and financing segment includes our marketing and sales activities related to the VOIs that we own, our VOIs we acquire under just-in-time and secondary market inventory arrangements, our sales of VOIs through fee based service arrangements with third-party developers, our consumer financing activities in connection with sales of VOIs that we own, and our title services operations through a wholly-owned subsidiary.
Our resort operations and club management segment includes our provision of management services for the Vacation Club and for a majority of the homeowners associations (“HOAs”) of the resorts within our Vacation Club. In connection with those services, we also provide reservation services, accounting services and billing and collections services to our Vacation Club and certain HOAs. Additionally, we generate revenue within our resort operations and club management segment from our Traveler Plus program, food and beverage and other retail operations, our third-party rental services activities, and the management of construction activities of certain of our fee-based clients
Our resort operations and club management segment includes our provision of management services for the Vacation Club and for a majority of the homeowners associations (“HOAs”) of the resorts within our Vacation Club. In connection with those services, we also provide reservation services, accounting services and billing and collections services to our Vacation Club and certain HOAs. Additionally, we generate revenue within our resort operations and club management segment from our Traveler Plus program, food and beverage and other retail operations, our third-party rental services activities, and the management of construction activities of certain of our fee-based clients
Products Of Bluegreen Vacations
Vacation Ownership Interests
Since entering the vacation ownership industry in 1994, we have generated over 733,000 VOI sales transactions, including over 181,000 fee-based sales transactions. Our Vacation Club owners receive an annual or biennial allotment of “points” in perpetuity (supported by an underlying deeded VOI held in trust for the owner) that may be used to stay at any of our 45 Club Resorts and 23 Club Associate Resorts. Vacation Club owners can use their points to stay in resorts for varying lengths of time, starting at a minimum of two nights. The number of points required for a stay at a resort depends on a variety of factors, including resort location, size of the unit, vacation season and the days of the week. Under this system, Vacation Club owners can select vacations according to their schedules, space needs and available points. Subject to certain restrictions and fees, Vacation Club owners are typically allowed to carry over any unused points for one year and to “borrow” points from the next year. Each of our Club Resorts and Club Associate Resorts is managed by an HOA, which is governed by a board of directors or trustees. The board hires a management company to which it delegates many of the rights and responsibilities of the HOA, including landscaping, security, housekeeping, garbage collection, utilities, insurance procurement, laundry and repairs and maintenance. Vacation Club owners pay annual maintenance fees which cover the costs of operating all of the resorts in the Vacation Club system, including fees for real estate taxes and reserves for capital improvements. If a Vacation Club owner does not pay such charges, his or her use rights may be suspended and ultimately terminated, subject to the applicable lender’s first mortgage lien, if any, on such owner’s VOI.
We provide management services to 49 resorts and the Vacation Club through contractual arrangements with HOAs. We have a 100% renewal rate on management contracts from our Club Resorts. Our Vacation Club’s points-based platform offers owners significant flexibility. As reflected in the chart below, basic Vacation Club ownership entitles owners to use their points to stay at any of our 45 Club Resorts and 23 Club Associate Resorts, as well as to access more than 4,200 resorts available through the Resort Condominiums International, LLC (“RCI”) exchange network. For a nominal annual fee and transaction fees, Vacation Club owners can join and utilize our Traveler Plus program, which enables them to use their points to access an additional 44 direct exchange resorts, and other vacation experiences. Vacation Club owners can convert their Vacation Club points into Choice Privileges points, which can be used for stays in Choice Hotels’ properties. In addition, Traveler Plus members can directly use their Vacation Club points for stays in Choice Hotels’ Ascend Hotel Collection properties, a network of historic and boutique hotels located in the United States, Canada, Europe, Australia and Latin America. Overall, there are more than 7,100 hotels in the Choice Hotels network, located in over 40 countries and territories, and Choice Hotels’ brands include the Ascend Hotel Collection, Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, Clarion Pointe, Cambria Hotels and Suites, MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge, Rodeway Inn, WoodSpring Suites and Everhome Suites. We continuously seek new ways to provide value to our Vacation Club owners, including enhanced product offerings, new resort locations, broader vacation experiences and further technological innovation, all of which are designed to increase guest satisfaction
Approximately 64% of Vacation Club owners were enrolled in Traveler Plus as of December 31, 2020. During the year ended December 31, 2020, approximately 4% of Vacation Club owners utilized the RCI exchange network. Historically, the owner utilization of RCI has been between 4% and 7%.
Vacation Club Resort Locations
Vacation Club resorts are primarily located on the U.S. East Coast and Midwest. The 44 direct-exchange resorts available to Traveler Plus members are concentrated along the West Coast and Hawaii. We believe that, together, this provides a broad geographic offering of resorts available to our Vacation Club owners.
Vacation Club resorts are primarily “drive-to” resort destinations as approximately 88% of our Vacation Club owners live within a four-hour drive of at least one resort. Our resorts are generally located in popular vacation destinations, such as Florida, South Carolina, North Carolina, Tennessee, Virginia, Texas, Louisiana, and Nevada, and represent a diverse mix of resort and urban destinations, allowing Vacation Club owners the ability to customize their vacation experience. Our resort network also offers a diverse mix of experiences and accommodations. Unlike some of our competitors that maintain static brand design standards across resorts and geographies, we seek to design resorts that capture the uniqueness of a particular location. The goal of our resorts offer authentic experience and connection to the resorts’ unique and varied locations. Our resorts typically feature condominium-style accommodations with amenities such as fully equipped kitchens, entertainment centers and in-room laundry appliances. Many resorts feature a clubhouse (including a pool, game room, and lounge), hotel-type staff and concierge services. We also own a 51% interest in Bluegreen/Big Cedar Vacations, which develops, markets and sells VOIs at three premier wilderness-themed resorts adjacent to Table Rock Lake near Branson, Missouri: The Bluegreen Wilderness Club at Big Cedar, The Cliffs at Long Creek and Paradise Point. The remaining 49% interest in Bluegreen/Big Cedar Vacations is held by Big Cedar, LLC (“BC LLC”), an affiliate of Bass Pro.
Since entering the vacation ownership industry in 1994, we have generated over 733,000 VOI sales transactions, including over 181,000 fee-based sales transactions. Our Vacation Club owners receive an annual or biennial allotment of “points” in perpetuity (supported by an underlying deeded VOI held in trust for the owner) that may be used to stay at any of our 45 Club Resorts and 23 Club Associate Resorts. Vacation Club owners can use their points to stay in resorts for varying lengths of time, starting at a minimum of two nights. The number of points required for a stay at a resort depends on a variety of factors, including resort location, size of the unit, vacation season and the days of the week. Under this system, Vacation Club owners can select vacations according to their schedules, space needs and available points. Subject to certain restrictions and fees, Vacation Club owners are typically allowed to carry over any unused points for one year and to “borrow” points from the next year. Each of our Club Resorts and Club Associate Resorts is managed by an HOA, which is governed by a board of directors or trustees. The board hires a management company to which it delegates many of the rights and responsibilities of the HOA, including landscaping, security, housekeeping, garbage collection, utilities, insurance procurement, laundry and repairs and maintenance. Vacation Club owners pay annual maintenance fees which cover the costs of operating all of the resorts in the Vacation Club system, including fees for real estate taxes and reserves for capital improvements. If a Vacation Club owner does not pay such charges, his or her use rights may be suspended and ultimately terminated, subject to the applicable lender’s first mortgage lien, if any, on such owner’s VOI.
We provide management services to 49 resorts and the Vacation Club through contractual arrangements with HOAs. We have a 100% renewal rate on management contracts from our Club Resorts. Our Vacation Club’s points-based platform offers owners significant flexibility. As reflected in the chart below, basic Vacation Club ownership entitles owners to use their points to stay at any of our 45 Club Resorts and 23 Club Associate Resorts, as well as to access more than 4,200 resorts available through the Resort Condominiums International, LLC (“RCI”) exchange network. For a nominal annual fee and transaction fees, Vacation Club owners can join and utilize our Traveler Plus program, which enables them to use their points to access an additional 44 direct exchange resorts, and other vacation experiences. Vacation Club owners can convert their Vacation Club points into Choice Privileges points, which can be used for stays in Choice Hotels’ properties. In addition, Traveler Plus members can directly use their Vacation Club points for stays in Choice Hotels’ Ascend Hotel Collection properties, a network of historic and boutique hotels located in the United States, Canada, Europe, Australia and Latin America. Overall, there are more than 7,100 hotels in the Choice Hotels network, located in over 40 countries and territories, and Choice Hotels’ brands include the Ascend Hotel Collection, Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, Clarion Pointe, Cambria Hotels and Suites, MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge, Rodeway Inn, WoodSpring Suites and Everhome Suites. We continuously seek new ways to provide value to our Vacation Club owners, including enhanced product offerings, new resort locations, broader vacation experiences and further technological innovation, all of which are designed to increase guest satisfaction
Approximately 64% of Vacation Club owners were enrolled in Traveler Plus as of December 31, 2020. During the year ended December 31, 2020, approximately 4% of Vacation Club owners utilized the RCI exchange network. Historically, the owner utilization of RCI has been between 4% and 7%.
Vacation Club Resort Locations
Vacation Club resorts are primarily located on the U.S. East Coast and Midwest. The 44 direct-exchange resorts available to Traveler Plus members are concentrated along the West Coast and Hawaii. We believe that, together, this provides a broad geographic offering of resorts available to our Vacation Club owners.
Vacation Club resorts are primarily “drive-to” resort destinations as approximately 88% of our Vacation Club owners live within a four-hour drive of at least one resort. Our resorts are generally located in popular vacation destinations, such as Florida, South Carolina, North Carolina, Tennessee, Virginia, Texas, Louisiana, and Nevada, and represent a diverse mix of resort and urban destinations, allowing Vacation Club owners the ability to customize their vacation experience. Our resort network also offers a diverse mix of experiences and accommodations. Unlike some of our competitors that maintain static brand design standards across resorts and geographies, we seek to design resorts that capture the uniqueness of a particular location. The goal of our resorts offer authentic experience and connection to the resorts’ unique and varied locations. Our resorts typically feature condominium-style accommodations with amenities such as fully equipped kitchens, entertainment centers and in-room laundry appliances. Many resorts feature a clubhouse (including a pool, game room, and lounge), hotel-type staff and concierge services. We also own a 51% interest in Bluegreen/Big Cedar Vacations, which develops, markets and sells VOIs at three premier wilderness-themed resorts adjacent to Table Rock Lake near Branson, Missouri: The Bluegreen Wilderness Club at Big Cedar, The Cliffs at Long Creek and Paradise Point. The remaining 49% interest in Bluegreen/Big Cedar Vacations is held by Big Cedar, LLC (“BC LLC”), an affiliate of Bass Pro.
Marketing And Sales Of Inventory Of Bluegreen Vacation Corporation
VOI sales are typically generated by attracting prospective customers to tour a resort and attend a sales presentation. Our sales and marketing platforms utilize a variety of methods to attract prospective customers, drive tour flow and sell VOIs in our Vacation Club. We primarily utilize marketing alliances with nationally-recognized brands, which provide access to venues which target consumers generally matching our core demographic. In addition, sales prospects are sourced through programs which generate leads at high-traffic venues and in high-density tourist locations and events, as well as through telemarketing and referrals from existing owners and other guests at our properties. While in the past historical performance provided a basis for estimating VOI sales based on packages sold, as a result of the COVID-19 pandemic, this has not been the case as purchasers of packages have not traveled to the same extent as they did previously pre-pandemic. Many of our marketing programs intended to attract new customers involve the sale of a discounted vacation package that typically includes a two to three night stay in close proximity to one of our resort sales offices and requires participation in a sales presentation (a sales tour). Vacation packages are typically sold either in retail brick and mortar establishments, such as Bass Pro and Cabela’s stores and malls, through our call transfer program with Choice, or via telemarketing.
During the year ended December 31, 2020, we sold approximately 132,000 vacation packages and 19%of our VOI sales were made to customers who had previously purchased a vacation package and attended a sales presentation. As of December 31, 2020, we had a pipeline of over 121,000 vacation packages sold to prospective new customers. In addition, we had a pipeline of nearly 15,000 vacation packages that were purchased by customers who already toured and indicated that they intend to tour again. Bluegreen Vacations Unlimited (“BVU”), our wholly-owned subsidiary, has an exclusive marketing agreement with Bass Pro, a nationally-recognized retailer of fishing, marine, hunting, camping and sports gear, that provides us with the right to market and sell vacation packages at kiosks in Bass Pro’s and Cabela’s retail locations and through other means. We believe that Bass Pro has a loyal customer base that strongly matches our core demographic. During the years ended December 31, 2020, 2019, and 2018, VOI sales to prospects and leads generated by the agreement with Bass Pro accounted for approximately 12%, 13% and 14%, respectively, of our VOI sales volume. As of December 31, 2019, we had sales and marketing operations at a total of 83 Bass Pro and Cabela’s Stores. In March 2020 as a result of the COVID-19 pandemic, we temporarily closed our retail marketing operations at Bass Pro and Cabela’s stores. Beginning in mid-May 2020, we started the process of recommencing our sales and marketing operations and by December 31, 2020, we were operating in a total of 98 Bass Pro and Cabela’s stores.
We also have an exclusive strategic relationship with Choice Hotels that involves several areas of our business, including a sales and marketing alliance that enables us to leverage Choice Hotels’ brands, customer relationships and marketing channels to sell vacation packages. Vacation packages are sold through customer reservation calls transferred to us from Choice Hotels and through outbound telemarketing methods utilizing Choice Hotels customer database. Our strategic relationship with Choice Hotels began in 2013 and was extended in August 2017 for a 15 year term, with an additional 15-year renewal term thereafter unless either party elects not to renew the arrangement.
We believe that our diverse strategic marketing alliances (including those with Bass Pro, Choice Hotels and other retail operators and entertainment providers) provides a potential strategic advantage over certain of our competitors that rely primarily on relationships with their affiliated hotel brands to drive lead generation and new owner growth. Our goal is to identify marketing partners with brands that attract our targeted owner demographic and to build successful marketing relationships with those partners. In addition to the programs described above, we may also engage in other local and national marketing programs from time to time. In addition to sales to new customers, we also seek to sell additional VOI points to our existing Vacation Club owners. These sales generally have lower marketing costs and result in higher operating margins than sales generated through other marketing channels. During the years ended December 31, 2020, 2019, and 2018, sales to existing Vacation Club owners accounted for 64%, 55% and 52%, respectively, of our system-wide sales of VOIs. We target a balanced mix of new customer and existing Vacation Club owner sales to support our goal of sustainable long-term growth. We believe that the variety in our marketing relationships has historically facilitated a healthy mix of new owner sales vs. existing owner sales that compare favorably to our competitors. We operate 24 sales offices, typically located adjacent to our resorts and staffed with sales representatives and sales managers. As of December 31, 2020, we had over 2,400 employees dedicated to VOI sales and marketing.
We typically utilize a uniform sales process and offer ongoing training for our sales personnel with the goal of maintaining strict quality control policies. During the year ended December 31, 2020, 97% of our sales were generated from 20 of our sales offices which focus on both new customer and existing Vacation Club owner sales. Our remaining 4 sales offices are primarily focused on sales to existing Vacation Club owners staying at the respective resort. We also utilize our telesales operations to sell additional VOIs to Vacation Club owners
During the year ended December 31, 2020, we sold approximately 132,000 vacation packages and 19%of our VOI sales were made to customers who had previously purchased a vacation package and attended a sales presentation. As of December 31, 2020, we had a pipeline of over 121,000 vacation packages sold to prospective new customers. In addition, we had a pipeline of nearly 15,000 vacation packages that were purchased by customers who already toured and indicated that they intend to tour again. Bluegreen Vacations Unlimited (“BVU”), our wholly-owned subsidiary, has an exclusive marketing agreement with Bass Pro, a nationally-recognized retailer of fishing, marine, hunting, camping and sports gear, that provides us with the right to market and sell vacation packages at kiosks in Bass Pro’s and Cabela’s retail locations and through other means. We believe that Bass Pro has a loyal customer base that strongly matches our core demographic. During the years ended December 31, 2020, 2019, and 2018, VOI sales to prospects and leads generated by the agreement with Bass Pro accounted for approximately 12%, 13% and 14%, respectively, of our VOI sales volume. As of December 31, 2019, we had sales and marketing operations at a total of 83 Bass Pro and Cabela’s Stores. In March 2020 as a result of the COVID-19 pandemic, we temporarily closed our retail marketing operations at Bass Pro and Cabela’s stores. Beginning in mid-May 2020, we started the process of recommencing our sales and marketing operations and by December 31, 2020, we were operating in a total of 98 Bass Pro and Cabela’s stores.
We also have an exclusive strategic relationship with Choice Hotels that involves several areas of our business, including a sales and marketing alliance that enables us to leverage Choice Hotels’ brands, customer relationships and marketing channels to sell vacation packages. Vacation packages are sold through customer reservation calls transferred to us from Choice Hotels and through outbound telemarketing methods utilizing Choice Hotels customer database. Our strategic relationship with Choice Hotels began in 2013 and was extended in August 2017 for a 15 year term, with an additional 15-year renewal term thereafter unless either party elects not to renew the arrangement.
We believe that our diverse strategic marketing alliances (including those with Bass Pro, Choice Hotels and other retail operators and entertainment providers) provides a potential strategic advantage over certain of our competitors that rely primarily on relationships with their affiliated hotel brands to drive lead generation and new owner growth. Our goal is to identify marketing partners with brands that attract our targeted owner demographic and to build successful marketing relationships with those partners. In addition to the programs described above, we may also engage in other local and national marketing programs from time to time. In addition to sales to new customers, we also seek to sell additional VOI points to our existing Vacation Club owners. These sales generally have lower marketing costs and result in higher operating margins than sales generated through other marketing channels. During the years ended December 31, 2020, 2019, and 2018, sales to existing Vacation Club owners accounted for 64%, 55% and 52%, respectively, of our system-wide sales of VOIs. We target a balanced mix of new customer and existing Vacation Club owner sales to support our goal of sustainable long-term growth. We believe that the variety in our marketing relationships has historically facilitated a healthy mix of new owner sales vs. existing owner sales that compare favorably to our competitors. We operate 24 sales offices, typically located adjacent to our resorts and staffed with sales representatives and sales managers. As of December 31, 2020, we had over 2,400 employees dedicated to VOI sales and marketing.
We typically utilize a uniform sales process and offer ongoing training for our sales personnel with the goal of maintaining strict quality control policies. During the year ended December 31, 2020, 97% of our sales were generated from 20 of our sales offices which focus on both new customer and existing Vacation Club owner sales. Our remaining 4 sales offices are primarily focused on sales to existing Vacation Club owners staying at the respective resort. We also utilize our telesales operations to sell additional VOIs to Vacation Club owners
Customer Financing Of Bluegreen Vacation Corporation
We generally offer qualified purchasers financing for up to 90% of the purchase price of VOIs. The typical financing provides for a term of ten years and a fixed interest rate that is determined by the FICO score of the borrower and the amount of the down payment and existing ownership, is fully amortizing in equal installments, and may be prepaid without penalty. Purchasers may receive an additional 1% discount on the interest rate by participating in our pre-authorized payment plan. As of December 31, 2020, approximately 92% of our serviced VOI notes receivable participated in our pre-authorized payment plan. During the year ended December 31, 2020, the weighted-average interest rate on our VOI notes receivable was 15.0%. VOI purchasers are generally required to make a down payment of at least 10% of the sales price. As part of our efforts to manage operating cash flows, we currently incentivize our sales associates to encourage cash sales and higher down payments on financed sales, with a target of 40-45% of the VOI sales price collected in cash. We also promote a point-of-sale credit card program sponsored by a third-party financial institution. As a result of these efforts, we have increased both the percentage of sales that are fully paid in cash and the average down payment on financed sales as compared to historical levels. Including down payments received on financed sales, approximately 42% of our system-wide sales of VOIs during the year ended December 31, 2020 were paid in cash within approximately 30 days from the contract date
Collection Policies
Financed VOI sales originated by us typically utilize a note and mortgage. Collection efforts related to these VOI loans are managed by us. Collectors are incentivized through a performance-based compensation program. We generally pursue collection efforts with respect to Vacation Club owners with outstanding loans secured by their VOI by mail, telephone and email (as early as 10 days past due). At 30 days past due, we mail a collection letter to the owner if a U.S. resident advising that if the loan is not brought current, the delinquency will be reported to a credit reporting agency. At 60 days past due, we mail a letter to the owner advising that he or she may be prohibited from making future reservations for lodging at a resort. At 90 days past due, we stop the accrual of, and reverse previously accrued but unpaid, interest on the note receivable and typically mail a notice informing the owner that unless the delinquency is cured within 30 days, we may terminate the underlying VOI ownership. If an owner fails to bring the account current within the given timeframe, the loan is typically defaulted and the owner’s VOI is terminated. In that case, we mail a final letter, typically at approximately 127 days past due, notifying the owner of the loan default and the termination of his or her beneficial interest in the VOI property.
Thereafter, we may seek to resell the VOI to a new purchaser. In certain cases, at our discretion, we may not default the loan and terminate the underlying VOI, in which case the loan would remain delinquent. Allowance for Loan Losses We estimate uncollectible VOI notes receivable based on historical amounts for similar VOI notes receivable and do not consider the value of the underlying collateral. We hold large pools of homogeneous VOI notes receivable and assess uncollectibility based on pools of receivables as we do not believe there are significant concentrations of credit risk with any individual counterparty or groups of counterparties. In estimating future loan losses, management does not use a single primary indicator of credit quality, but instead evaluates our VOI notes receivable based upon a combination of factors, including a static pool analysis that incorporates the aging of the respective receivables, default trends, and prepayment rates by origination year, as well as the FICO scores of borrowers. Substantially all defaulted VOI notes receivable result in the holder of such receivable acquiring the related VOI that secured such receivable, typically soon after default and at little or no cost. The reacquired VOI is then available for resale in the normal course of business.
Collection Policies
Financed VOI sales originated by us typically utilize a note and mortgage. Collection efforts related to these VOI loans are managed by us. Collectors are incentivized through a performance-based compensation program. We generally pursue collection efforts with respect to Vacation Club owners with outstanding loans secured by their VOI by mail, telephone and email (as early as 10 days past due). At 30 days past due, we mail a collection letter to the owner if a U.S. resident advising that if the loan is not brought current, the delinquency will be reported to a credit reporting agency. At 60 days past due, we mail a letter to the owner advising that he or she may be prohibited from making future reservations for lodging at a resort. At 90 days past due, we stop the accrual of, and reverse previously accrued but unpaid, interest on the note receivable and typically mail a notice informing the owner that unless the delinquency is cured within 30 days, we may terminate the underlying VOI ownership. If an owner fails to bring the account current within the given timeframe, the loan is typically defaulted and the owner’s VOI is terminated. In that case, we mail a final letter, typically at approximately 127 days past due, notifying the owner of the loan default and the termination of his or her beneficial interest in the VOI property.
Thereafter, we may seek to resell the VOI to a new purchaser. In certain cases, at our discretion, we may not default the loan and terminate the underlying VOI, in which case the loan would remain delinquent. Allowance for Loan Losses We estimate uncollectible VOI notes receivable based on historical amounts for similar VOI notes receivable and do not consider the value of the underlying collateral. We hold large pools of homogeneous VOI notes receivable and assess uncollectibility based on pools of receivables as we do not believe there are significant concentrations of credit risk with any individual counterparty or groups of counterparties. In estimating future loan losses, management does not use a single primary indicator of credit quality, but instead evaluates our VOI notes receivable based upon a combination of factors, including a static pool analysis that incorporates the aging of the respective receivables, default trends, and prepayment rates by origination year, as well as the FICO scores of borrowers. Substantially all defaulted VOI notes receivable result in the holder of such receivable acquiring the related VOI that secured such receivable, typically soon after default and at little or no cost. The reacquired VOI is then available for resale in the normal course of business.
Strategy Of Bluegreen Vacations
Grow VOI sales
Our goal is to utilize our sales and marketing platform to achieve VOI sales growth through the expansion of existing alliances, continued development of new marketing programs and additional VOI sales to our existing Vacation Club owners. We believe there are a number of opportunities within our existing marketing alliances to drive future growth, including the potential expansion of our marketing efforts with Bass Pro. In addition, through our agreement with Choice Hotels, we plan to enhance our marketing program through Choice Hotels’ call-transfer programs. In addition to existing programs, we hope to utilize our sales and marketing expertise to identify unique marketing relationships with nationally-recognized brands that resonate with our core demographic. We will also continue to actively seek to sell additional VOI points to our existing Vacation Club owners, which typically involve significantly lower marketing costs and have higher conversion rates compared to sales to new customers.
Our goal continues to be to expand and update our sales offices to more effectively convert tours generated by our marketing programs into sales. To this end, we have focused on identifying high traffic resorts where we believe increased investment in sales office infrastructure will yield strong sales results.
Continue to enhance our Vacation Club experience
We believe our Vacation Club offers owners exceptional value. Our Vacation Club offers owners access to our 45 Club Resorts and 23 Club Associate Resorts in popular vacation destinations, as well as access to nearly 11,300 other hotels and resorts and other vacation experiences, through partnerships and exchange networks. We continue to seek to add value and flexibility to our Vacation Club membership and enhance the vacation experience of our Vacation Club owners, including through the addition of new destinations, the expansion of our exchange programs and the addition of new partnerships offering increased vacation options. We also continuously seek to improve our technology, including websites and applications, to enhance our Vacation Club owners’ experiences. We believe our focus, combined with our high-quality customer service, will continue to enhance the Vacation Club experience, supporting our objective to entice guests to vacation and drive sales to new owners and additional sales to existing Vacation Club owners.
Increase higher-margin, cash generating businesses
We seek to continue to grow our ancillary businesses, including resort management, title services and loan servicing. We believe these businesses can grow with little additional investment in infrastructure and potentially produce higher-margin revenue.
Increase sales and operating efficiencies across all customer touch-points
We actively seek to improve our operational execution across all aspects of our business. In our sales and marketing platform, we utilize a variety of screening methods and data-driven analyses intended to identify and attract high-quality prospects to our sales offices We intend to seek to leverage our size, infrastructure and expertise to increase operating efficiency and profitability and hope to gain further operational efficiencies by streamlining our support operations, such as call centers, customer service, administration and information technology.
Maintain operational flexibility while growing our business
We believe we have built a flexible business model that allows us to capitalize on opportunities and quickly adapt to changing market environments. We intend to continue to pursue growth through what we believe to be an appropriate mix of capital-light sales vs. developed VOI sales, sales to new customers vs. sales to existing Vacation Club owners and cash sales vs. financed sales, all based on market factors, our financial condition and operating needs, and other factors that our management may deem relevant.
Pursue strategic transactions
As part of our growth strategy, we may seek to acquire other VOI companies, resort assets, sales and marketing platforms, management companies and contracts, and other assets, properties and businesses, particularly where we believe significant synergies and cost savings may be available. These acquisitions may be pursued directly or in partnership with third-party developers or others, including pursuant to arrangements where third-party developers purchase the resort assets and we sell the VOIs in the acquired resort on a commission basis. We believe our flexible sales and marketing platform may make these transactions possible in a variety of economic conditions
Our goal is to utilize our sales and marketing platform to achieve VOI sales growth through the expansion of existing alliances, continued development of new marketing programs and additional VOI sales to our existing Vacation Club owners. We believe there are a number of opportunities within our existing marketing alliances to drive future growth, including the potential expansion of our marketing efforts with Bass Pro. In addition, through our agreement with Choice Hotels, we plan to enhance our marketing program through Choice Hotels’ call-transfer programs. In addition to existing programs, we hope to utilize our sales and marketing expertise to identify unique marketing relationships with nationally-recognized brands that resonate with our core demographic. We will also continue to actively seek to sell additional VOI points to our existing Vacation Club owners, which typically involve significantly lower marketing costs and have higher conversion rates compared to sales to new customers.
Our goal continues to be to expand and update our sales offices to more effectively convert tours generated by our marketing programs into sales. To this end, we have focused on identifying high traffic resorts where we believe increased investment in sales office infrastructure will yield strong sales results.
Continue to enhance our Vacation Club experience
We believe our Vacation Club offers owners exceptional value. Our Vacation Club offers owners access to our 45 Club Resorts and 23 Club Associate Resorts in popular vacation destinations, as well as access to nearly 11,300 other hotels and resorts and other vacation experiences, through partnerships and exchange networks. We continue to seek to add value and flexibility to our Vacation Club membership and enhance the vacation experience of our Vacation Club owners, including through the addition of new destinations, the expansion of our exchange programs and the addition of new partnerships offering increased vacation options. We also continuously seek to improve our technology, including websites and applications, to enhance our Vacation Club owners’ experiences. We believe our focus, combined with our high-quality customer service, will continue to enhance the Vacation Club experience, supporting our objective to entice guests to vacation and drive sales to new owners and additional sales to existing Vacation Club owners.
Increase higher-margin, cash generating businesses
We seek to continue to grow our ancillary businesses, including resort management, title services and loan servicing. We believe these businesses can grow with little additional investment in infrastructure and potentially produce higher-margin revenue.
Increase sales and operating efficiencies across all customer touch-points
We actively seek to improve our operational execution across all aspects of our business. In our sales and marketing platform, we utilize a variety of screening methods and data-driven analyses intended to identify and attract high-quality prospects to our sales offices We intend to seek to leverage our size, infrastructure and expertise to increase operating efficiency and profitability and hope to gain further operational efficiencies by streamlining our support operations, such as call centers, customer service, administration and information technology.
Maintain operational flexibility while growing our business
We believe we have built a flexible business model that allows us to capitalize on opportunities and quickly adapt to changing market environments. We intend to continue to pursue growth through what we believe to be an appropriate mix of capital-light sales vs. developed VOI sales, sales to new customers vs. sales to existing Vacation Club owners and cash sales vs. financed sales, all based on market factors, our financial condition and operating needs, and other factors that our management may deem relevant.
Pursue strategic transactions
As part of our growth strategy, we may seek to acquire other VOI companies, resort assets, sales and marketing platforms, management companies and contracts, and other assets, properties and businesses, particularly where we believe significant synergies and cost savings may be available. These acquisitions may be pursued directly or in partnership with third-party developers or others, including pursuant to arrangements where third-party developers purchase the resort assets and we sell the VOIs in the acquired resort on a commission basis. We believe our flexible sales and marketing platform may make these transactions possible in a variety of economic conditions
Competition Of Bluegreen Vacations
We compete with various high profile and well-established companies, many of which have greater liquidity and financial resources than we do. Many of the world’s most recognized lodging, hospitality and entertainment companies develop and sell VOIs in resort properties. Major companies that now operate vacation ownership resorts directly, through subsidiaries or through strategic relationships include Marriott Vacations Worldwide Corporation, the Walt Disney Company, Hilton Grand Vacations, Travel + Leisure Co. (formerly Wyndham Destinations), and Diamond Resorts International. We also compete with numerous smaller owners and operators of vacation ownership resorts and from alternative lodging options available to consumers through both traditional methods of delivery as well as new web portals and applications, including private rentals of homes, apartments or condominium units, which have increased in popularity in recent years. Our ability to remain competitive and to attract and retain customers depends on our customers’ satisfaction with our products and services as well as on distinguishing the quality, value, and efficiency of our products and services from those offered by our competitors. In our fee-based services business, we typically compete with Hilton Grand Vacations and Travel + Leisure Co. In addition to competing for sales leads, prospects and fee-based service clients, we compete with other VOI developers for marketing, sales and resort management personnel
Seasonality Of Bluegreen Vacations Earnings
We have historically experienced, and expect to continue to experience, seasonal fluctuations in our revenue and results of operations. This seasonality has resulted, and may continue to result, in fluctuations in our quarterly operating results. Due to consumer travel patterns, we typically see more tours and experience higher VOI sales during the second and third quarters. However, due to the impact of the COVID-19 pandemic, including the temporary closures of our marketing operations and VOI sales centers, we experienced significantly decreased sales of VOIs in the second, third and fourth quarters of 2020 as compared to prior years and currently expect such adverse impact to continue into 2021
Employees Of Bluegreen Vacations
As of December 31, 2020, we had 4,637 employees, 458 of whom were located at our headquarters in Boca Raton, Florida, compared to 5,873 and 520 respectively, as of December 31, 2019. As of December 31, 2020, a total of 27 of our employees were covered by two collective bargaining agreements, which address the terms and conditions of their employment, including pay rates, working hours, certain employee benefits and procedures for settlement of labor disputes. We believe that our employee relations are good and our employees are important to achieving our business objectives.
On March 23, 2020, we temporarily closed all of our VOI sales centers and our marketing operations in connection with the COVID-19 pandemic. Further, some of our corporate offices, Club Resorts and Club Associate Resorts were closed in accordance with government mandates and advisories in connection with the COVID-19 pandemic. We also commenced remote work protocols for those employees that, based on their position, were capable of working from home. Beginning in mid-May 2020, we started the process of recommencing our sales and marketing operations and our closed resorts began to reopen as government mandates were lifted. Upon reopening, we had COVID-19 prevention protocols designed to minimize the spread of COVID-19 at our resorts and workplaces. These protocols, which remain in place, meet or exceed the Centers for Disease Control guidelines and where applicable, state mandates. We continue to encourage a remote work protocol for portions of the workforce due to the continuing pandemic. Further, we continuously evaluate our operations in light of recent resurgences of COVID-19, federal, state and local guidance, evolving data concerning the pandemic and the best interests of our employees and customers.
Bluegreen seeks to offer competitive compensation and benefit programs for our employees in our effort to attract and retain superior talent. In addition to competitive base wages, additional programs include: Incentive Compensation Plans, Long-Term Incentive Plans, a company matched 401(k) plan, healthcare and insurance benefits, a tuition assistance program, health savings and flexible spending accounts, paid time off, family leave, and employee assistance programs. We are committed to foster an inclusive work environment that supports our workforce and the communities we serve. It is our policy to seek to hire the best qualified employees regardless of gender, ethnicity or other protected traits and to fully comply with all laws applicable to discrimination in the workplace.
On March 23, 2020, we temporarily closed all of our VOI sales centers and our marketing operations in connection with the COVID-19 pandemic. Further, some of our corporate offices, Club Resorts and Club Associate Resorts were closed in accordance with government mandates and advisories in connection with the COVID-19 pandemic. We also commenced remote work protocols for those employees that, based on their position, were capable of working from home. Beginning in mid-May 2020, we started the process of recommencing our sales and marketing operations and our closed resorts began to reopen as government mandates were lifted. Upon reopening, we had COVID-19 prevention protocols designed to minimize the spread of COVID-19 at our resorts and workplaces. These protocols, which remain in place, meet or exceed the Centers for Disease Control guidelines and where applicable, state mandates. We continue to encourage a remote work protocol for portions of the workforce due to the continuing pandemic. Further, we continuously evaluate our operations in light of recent resurgences of COVID-19, federal, state and local guidance, evolving data concerning the pandemic and the best interests of our employees and customers.
Bluegreen seeks to offer competitive compensation and benefit programs for our employees in our effort to attract and retain superior talent. In addition to competitive base wages, additional programs include: Incentive Compensation Plans, Long-Term Incentive Plans, a company matched 401(k) plan, healthcare and insurance benefits, a tuition assistance program, health savings and flexible spending accounts, paid time off, family leave, and employee assistance programs. We are committed to foster an inclusive work environment that supports our workforce and the communities we serve. It is our policy to seek to hire the best qualified employees regardless of gender, ethnicity or other protected traits and to fully comply with all laws applicable to discrimination in the workplace.
Bluegreen Vacations (BXG) stock price chart over the last 5 years
The image below shows the stock price chart of Bluegreen Vacations (BXG) over the last 5 years. And it's not been a good time for Bluegreen Vacations stockholders. Over the last 5 years the stock of Bluegreen Vacations decreased by-33.1%. Pretty sure no investor would be happy with those kind of returns.
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