A well-run legacy timeshare resort need not falter, flounder, and ultimately fail—but what qualities keep an aging resort rejuvenated and robust?
Magic Tree Resort in Kissimmee, FL, illustrates one recipe for enduring success. Its ingredients include a prime location, a devoted cadre of long-time owners, an engaged and fiscally responsible board of directors, and an efficient and welcoming staff.
Also, the size is right. With 62 one-bedroom units and 30 two-bedroom units, the resort has 4,692 unit-weeks in a 51-week year (with the 52nd week reserved for maintenance), and about 3,500 individual owners.
What owners say
We asked several owners why they appreciate Magic Tree. They cited its intimacy—a welcome contrast to a vast, impersonal Orlando-area resort hotel that may check in hundreds of thousands of guests annually.
“I like the smallness of it, and the friendliness of all the people,” says Joan Morris of Poughkeepsie, NY, an owner since 2008. “You’re off the main road, but close to the parks.”
“Everything at Magic Tree is compact, within a short distance from your unit,” adds Mary Ann Verostko-Heary of Alden, NY. She began coming to the resort in the 1980s, and became an owner in the 1990s.
“They keep the place up beautifully,” says Wayne Allswede of Rockford, MI, “and there’s not one person working here who isn’t pleasant and sweet.”
“I have three kids,” says Jean-Luc Gingras of Ottawa, ON, Canada, a former Royal Canadian Air Force pilot who has owned at Magic Tree for 32 years.
“When they were little, they wanted to go to Disney World, but Magic Tree is smaller and better than a room in a big hotel.”
“The romantic element of this place has stood the test of time,” says Tommy Eldridge of St. Catherine’s, ON, Canada. “Housekeepers who say ‘Good morning,’ attentive front-desk clerks—I don’t get that kind of experience from my hotel loyalty program.”
Never high pressure
Located nine miles from the gates of Walt Disney World’s Epcot and Magic Kingdom theme parks, the property that is now Magic Tree Resort began life in 1975 as an Admiral Benbow Inn motel surrounded by orange groves.
Disney World had opened just four years before. The motel was a harbinger of the rampant development that would engulf the U.S. Highway 192 corridor on Disney’s southern flank.
By 1982, the Admiral Benbow chain was failing. Treco Inns of Orlando, Inc., a timeshare developer, acquired the Kissimmee property and began to convert it. “In 1986 when we first came, two of the four buildings were still operating as a motel,” recalls Allswede.
Word of mouth generates many sales at Magic Tree. Existing owners tell their friends and relatives. Some come for the first time as renters, exchangers, or guests, and come back as owners Owners of long standing say they were never subjected to high-pressure sales tactics. “It was more like the clientele trying to get in,” says Verostko-Heary, who owns seven weeks.
A critical mass of happy owners developed and perpetuated itself. That trend continues today. After staying at the resort as renters, Allswede and his wife, Joyce, became timeshare owners in 2002. Their children, now grown, still use the resort as a stop-off point for other travels. “Their names are already on the deeds,” he says.
Access through exchange
Demand for inbound exchange to Magic Tree is usually high, but assuming available space, Magic Tree has multiple pathways to exchange. The resort holds RCI Gold Crown status, and also participates in Dial an Exchange, Interval International, RTX (Resort Travel & Xchange), SFX (The San Francisco Exchange Company), and WIVC (World International Vacation Club).
Among exchange guests who have bought at Magic Tree after experiencing its vibe are Jeff Beckman and Greg Stevenson of Dugald, MB, Canada. They initially exchanged into the resort through WIVC, and then became Magic Tree owners in 2016.
“We came with friends whom we’ve known for years and years,” Stevenson says. “Magic Tree is far more intimate and encompassing,” Beckman adds. “It’s the way we want to travel.”
Some of Beckman and Stevenson’s friends with financial acumen have bought at Magic Tree. “First they looked at the resort’s financials, and they said ‘This place is very well run,’” Stevenson reports.
While many resorts have increased maintenance fees annually and made up budget shortfalls through special assessments, Magic Tree’s costs of ownership remain stable and predictable.
The resort has a $2 million reserve fund from which renovations and improvements are funded.
The only special assessment in its history was a quarter-century ago: $125 per unit-week, payable at $25 a quarter for five quarters, to repave the parking lot and upgrade the drainage.
Maintenance fees—$519 for one-bedroom unit-weeks and $590 for two-bedroom unit-weeks—haven’t risen in 12 years.
A good board
Beckman says the board members “have our best interests at heart. They look out for us.” Other owners praise the board’s accessibility and wise decisions.
Continuity helps Magic Tree’s board of directors function effectively. The seven members range in age from the 50s to the 80s, serve two-year terms, and have no term limits.
Paula DiPaola has been board president for 12 years, a board member for 18 years, and an owner for 35 years. Although she’s a volunteer, she works full time—40 to 60 hours a week. “I do this for the love of Magic Tree,” she says.
Initially, she brought her mother, who was disabled. “My door was always open,” DiPaola recounts. “She sat in her wheelchair and talked with everybody who walked by.” DiPaola still keeps the door to her unit open most of the time, making her highly accessible to owners.
Every time her mother came to the resort, DiPaola purchased an additional week. “Now each of my daughters has a week, my sister has three, and I have three—eight weeks altogether in our family,” she says.
Much of the board’s work passes first through committees, which usually consist of one or two board members and two or three other owners.
Of current importance is the Sunset Clause Committee, preparing for voting to determine whether to continue or terminate the timeshare. Magic Tree has two deadlines, in 2022 for fixed weeks, and in 2023 for floating weeks.
“We’d like to get the meetings done before the deadlines,” DiPaola says. “We’re starting June 1, 2018, which gives us three years to collect proxies. At check-in, with voting materials, any time we communicate with owners, a proxy will be attached.”
The resort’s governing documents now require the owners’ approval to continue the timeshare regime, but the board wants to change the documents to renew automatically unless the owners vote for termination. “We have two lawyers working on this,” DiPaola says.
Within the past year, the board voted to change management companies, formed a committee to write a request for proposals, and sent it to 10 companies.
The previous management company, located three time zones away, lacked a continuing presence in Florida. “If we had a computer problem, they couldn’t address it until noon our time,” DiPaola complains.
Ultimately the board selected American Resort Collection (ARC), which has other Florida resort clients and an office in Sarasota. At this writing, ARC and the board were preparing to choose a new resort manager.
Rentals and sales
Even Magic Tree has not been immune to the industry-wide increase in non-performing inventory. Fifteen years ago, Magic Tree’s delinquency rate was just five percent; now it’s 18 percent (844 unit-weeks).
In addition, the resort owns about 200 units acquired through an exit program for owners who want to relinquish their timeshares.
The cost is the equivalent of a year’s maintenance fee, plus legal fees for deed preparation, transfer of title, and recording: a total of $825 for a one-bedroom unit-week, $925 for a two-bedroom unit-week. “If I can find someone to pay the legal fees and take over the week, the exiting owner saves about $300,” DiPaola says.
“At least I’ve balanced out the non-performing inventory with an active rental program,” she notes.
Rentals bring in more money, but also more headaches, including higher turnover, and guests who don’t care about the resort and leave a mess in their units.
Apples in the basket
Magic Tree rentals are available on Booking.com, Expedia, Travelocity, and other online travel agencies. ARC has SiteMinder software that monitors pricing and availability at nearby properties and adjusts Magic Tree’s rates accordingly. DiPaola and Patricia Clark, guest services supervisor, also keep close personal track of the rental market.
“You have to know what people around you are charging, and you have to be a good salesperson,” Clark says. “Anything is bargainable depending on how many apples you have in your basket.”
However, Scott MacGregor, ARC’s president of US operations, warns that relying on rentals to generate revenues from weeks without active owners constitutes “competitive marketing in a bad way. We want to get that inventory sold and keep it in the hands of fee-paying owners.”
In addition to its management role, ARC is an aggregator, moving owners from failing properties to strengthen more viable ones.
At Magic Tree, ARC has purchased 100 unit-weeks and will acquire 50 more in each of the next two years.
The firm will use some of those weeks to offer a non-deeded travel club, Freedom 365, as a sales enhancement that includes a timeshare unit-week, plus cruise and discount consumer benefits. “It’s a trial program for younger buyers and a solution for people who need an exit from ownership,” MacGregor explains.
A decade ago, Magic Tree’s board wrote a 10-year strategic plan that included architectural designs to be implemented in phases as funds became available—without an increase in maintenance fees or a special assessment. To date, three of the four buildings have been completed.
Cherry Hill Custom Interiors of Daytona Beach, FL, designed the interiors, which gave the bedrooms a bright, cheery color scheme of red, orange, and gold. The new mattresses, linens, and bed coverings; window treatments and carpets; ceiling fans; and wall-mounted flat-screen TVs give the space a warm, inviting appearance.
In the living rooms, the sofas, coffee tables, and end tables are new. White wrought-iron tables were retained and painted black; the accompanying black chairs are new. The credenzas were retained, with Formica tops added for a more modern appearance. The mirror walls, a typical design feature in many early timeshare resorts, remain because they make the space look larger.
Energy-efficient LED lighting has been installed throughout the resort, including floodlights, lamps, and kitchen and bathroom fixtures. All table lamps have electrical outlets built into their bases for charging cell phones and other electronic devices.
The bathrooms were completely remodeled, with Kohler plumbing fixtures, taller-than-normal toilets, and fiberglass tub/shower units with low-flow shower heads. Because low water pressure was a problem, the low-flow cartridges had to be removed, so the heads now function much like high-end rainfall showers.
The renovated buildings have double-pane impact-glass windows and hurricane-rated fiberglass doors. The flat roofs have a rubber exterior coating with a 20-year warranty, and roof-mounted air-conditioning compressors on hurricane-resistant stands.
Spending money wisely
Magic Tree’s motel-style site plan includes four two-story buildings surrounding a central courtyard. An elevator provides handicapped access to the second-floor units and makes transporting luggage up and down much easier.
Within the courtyard, a swimming pool, wading pool, hot tub, and deck with lounge chairs and tables with umbrellas provide a variety of opportunities for owners and guests to swim and sunbathe.
Around the margins of the fenced pool enclosure, recent renovations have added several picnic areas with gas barbecue grills, two fire pits, a shuffleboard court, a bean-bag toss, and an outsized ground checkerboard.
More than just a place to stay, the resort is increasingly a place to relax and spend quiet recreational time away from the frenzy of theme parks and other high-energy attractions.
Extensive landscaping gives the grounds a lush, tropical appearance. To maintain this greenery, the board recently replaced its sprinkler system with drip irrigation to save water, and dug an irrigation well to reduce its city-water bill.
Also targeted for replacement was Magic Tree’s porte-cochère, originally a long, low wooden structure. “We took the roof down, found arches inside, and found they could be refurbished,” DiPaola reports. “That saved us almost half a million dollars.”
Pool area at night