survival secrets of the past few years

THE
RE-MAKING
INDUSTRY
OF AN
SURVIVAL S
ECRETS OF
BY MARGE
LENNON
THE PAST F
EW YEARS
he recent economic downturn
resulted in a serious struggle
for survival for many companies in our industry. In
addition to developers, some
of those hardest hit were irms
that specialize in architecture, construction,
and design.
We asked a few ARDA members how the
current situation impacted their businesses,
what creative measures they have taken to
“reinvent” themselves, and what their vision
for the future was. Each did something different to stay aloat as they navigated their
companies through the turbulence.
THE FIT WHO SURVIVE
Almost all of the supplier members predict
that new development for the nearly
starved construction industry will continue
to remain slow, due to lack of inancing,
excess inventory, and economic uncertainty.
During this time, renovations and refurbishments will be critical to ill the space
until new construction returns.
be proactive, increase their marketing, and
reach out to new customers.
“You can’t hunker down in the bunker
because the bombs may be dropping on
your head,” he says.
ConTech’s staing is now back to prerecession levels, with a greater focus on
hospitality industry projects.
Trinity Design & Construction Group
For 11 years, David Knight worked for
Marriott Vacation Club International in
the land planning, design, renovation, and
project management departments. Ater
a system-wide reduction in personnel, he
made a courageous decision to open Trinity
Design & Construction Group in Orlando
last June, focusing on project management
for hospitality and timeshare renovations.
he risk was great but with 25 years of experience, he tapped strategic partners with
specialized resources to keep overhead low,
while remaining lexible and competitive.
“I hit the reset button,” he recalls. “Now,
ater one year in business, I’m glad I took
“The last thing to fade in
any situation is hope…”
(Jeff Forrest, Winter Park Construction)
ConTech Restoration
In some cases, entirely new types of
companies have emerged. Founded in
Winter Garden, Florida, in 1993, ConTech
Construction was a general contractor
and a concrete contractor. Several years
ago, when restoration projects for existing
structures increased from one-third to
one-half of their business, the company
re-branded itself as ConTech Restoration to
focus on restoration (including painting and
waterprooing).
Along with the re-brand, company
founder Alan Haughey broadened his
company’s geographic range of work (as far
as Virginia), expanded their services, and
greatly increased their marketing eforts. A
highly successful Web site video campaign
featuring their $6.5 million restoration of
the Royal Floridian generated a tremendous
response. Haughey advises businesses to
36 — Developments arda.org
ownership of my circumstances by creating
a new opportunity. his is the ideal time to
focus on renovations since developers and
COA boards recognize the need to maintain
quality accommodations backed by practical budgeting solutions.”
Trinity recently provided project
improvement services for a $1.1 million
timeshare renovation in Hilton Head Island,
South Carolina, and is overseeing a multiphased renovation project at a branded
resort in Orlando. His company is currently
assisting a hospitality industry energy
management solutions provider.
Winter Park Construction
With little new timeshare construction in
the past two years, general contractor Winter
Park Construction (WPC) refocused their
sales and marketing eforts on renovations,
completing over $7 million in timeshare
resort renovations during 2010. hey also
formed a strategic alliance with other general
contractors around the country to geographically broaden their capabilities.
“While new timeshare construction is
barely moving, we continue to do signiicant
multi-unit projects, breaking ground on
four of them in the irst quarter of this
year alone,” explains WPC President Jef
Forrest. “Our conservative culture has kept
us inancially sound in good and bad times.
When the slowdown came, we had money
in the bank and zero debt.”
Forrest believes the last thing to fade in
any situation is hope.
“It’s a natural instinct. I believe people
feel better now about the economy but
are not acting on those feelings, so we
will have to maintain our conservative mentality a little longer.”
Graham Downes Architecture
For over 18 years, Margit Whitlock, AIA,
owned Architectural Concepts, a boutique
irm providing luxury architectural and
interior design services to the timeshare
industry.
“When timeshare building came to a halt,
our services were not in alignment with
what resorts needed,” she recalls. “Today,
budgets are lower than ever, so we began
to provide levels of services over a longer
period of time so clients could still achieve
a high-end look that was better adjusted to
their cash low needs. To remain competitive, I joined forces with Graham Downes
Architecture, a irm with a strong hotel
client base. We are now using social media
as a tool to maintain name recognition,
conident that when the dust settles, we will
still be visible to our potential clients.”
Like others, she is counting on renovations to be the primary source of future
income for the company.
Morris Architects
James Younglove, principal at Orlandobased Morris Architects, says: “As we felt
the market constrict, we took steps to resize
our staf by a variety of programs and began
to pursue a much broader client base. Ater
the implosion that followed, we found that
streamlining our basic processes…was the
best way to ride out the storm. Since we
worked in multiple marketplaces, not all
slowed and some actually expanded.”
One of the secrets to his company’s
survival is that they never neglected their
best clients.
“In the good times, it is natural to lirt
with the new glimmering clients and
projects. In the bad times, you must focus
on those clients that appreciate the extra
value you bring to them. We also learned
is that you can never relax when it comes
to collections. While we have seen some
movement in the marketplace, it is still
premature to say it is turning and predict a
slow, cautious recovery.”
Grand Vacations Club-MarBrisa resort in
Carlsbad, California, the two new projects
involve strategic collaborations with
market-leading partners and distinctively
strengthen HGV’s resort portfolio.
According to President Mark Wang,
“Innovative development strategies
are critical to our ongoing success.
We realize we can’t predict the future,
but we have efective response channels in place for the unexpected.”
ADAPTATION, NATURAL SELECTION
From the developer perspective, they too
were not immune from the levels of stress
across the market and the need to “adapt”
to survive.
Bluegreen
he secret of survival and key lessons for
this developer involved a combination of
creativity and sheer discipline.
Says President David Pontius: “We really
didn’t have time to try things, let them
incubate, and move forward. We had to get
out of the blocks quickly and show immediate success. It was imperative to do our
homework to have a greater understanding
of what it would take to make a new initiative successful. hat’s where the discipline
comes in.”
He adds, “We used to be vertically
integrated, doing our own development,
design, and management. As we moved
away from development and into the fee-for
service world, we thought these skill sets
would fade to the background. Not true. We
are just as busy in development as ever, not
for ourselves but for our clients, providing
turnkey day-to-day operating services in
many arenas [or]...helping clients repurpose
their properties…from hotels to timeshares,
fractional to timeshares, and whole ownership to fractional. We don’t know where
[this business] is going to end up, but we are
determined to help write the new roadmap
for the future.”
Hilton Grand Vacations
As a privately held company, Hilton Grand
Vacations’ (HGV) development structure has
not been dependent upon capital markets,
and the integrated alignment with Hilton
Worldwide also enabled them to navigate the
economic downturn with agility.
In May 2011, the company announced
plans for new Hilton Grand Vacations Club
resorts in Myrtle Beach, South Carolina,
and Honolulu. As with the brand’s Hilton
38 — Developments arda.org
Marriott Vacation Club
According to Ed Kinney, vice president
of corporate afairs at Marriott Vacation
Club International, “We have $1.5 billion
in inventory in our pipeline… we slowed
development for awhile to be conservative
goods and services. he net efect was signiicantly improved cash low despite a reduced
top line. Our new ‘best practices’ will serve
us well into the recovery.”
Wyndham Vacation Ownership
“During the last ive years, the economy
forced us to make some diicult decisions
that ultimately beneited our long-term
success,” says Franz Hanning, president and
CEO of Wyndham Vacation Ownership
(WVO). “We quickly changed the way we
market and sell our product, focused more
on managing our cash low and—above
all—remained laser-focused on delivering
exceptional customer service.”
WVO continues to develop traditionally
and through its Wyndham Asset Ailiation
“I hit the reset button. Now, after
one year in business, I’m glad I took
ownership of my circumstances by
creating a new opportunity.”
—(David Knight, Trinity Design & Construction Group)
with capital expenditures but are moving
forward with planned properties in multiple
locations. We’re creating a highly functional
and cost-eicient product to meet the
customer’s desires and business needs. Since
it is now a more competitive market, we
are approaching everything with greater
scrutiny. Due to our transition to a pointsbased product, we can now buy units in a
pre-existing property and have a smaller
inventory scaled to the demand of the
buyers, as we’ve done in Asia. his has had a
signiicant impact on our business model.”
Shell Vacations
You cannot deny the impact the most simple
of changes made to the bottom line. As
Tracy Sherles, president and COO of Shell
Vacations, notes: “he dramatic impact that
this economy had on inancing escalated
our need to create and conserve cash low.
We were successful in driving cash at point
of sale, negotiating reduced ixed costs such
as leases, consolidating oices,…and using
available inventory to barter for essential
Model (WAAM), enabling them to acquire
world-class inventory without major
construction costs.
“In the last 19 months through WAAM,
we added Towers on the Grove in Myrtle
Beach and Reunion Resort in Orlando,
Smugglers’ Notch, our irst resort in
Vermont, and Emerald Grande, our ith
resort in Destin,” notes Hanning. “he
demand for our product continues to be very
strong so I am optimistic about the future.”
LOOKING AHEAD
he economy has clearly changed the nature
of our industry. Without a crystal ball to
make predictions, these tips and examples
of re-invention and creative adaptation may
help guide your company through the coming years into the unknown future.
Marge Lennon owns Lennon
Communications, a PR irm, and has worked
many years in the industry. Her e-mail is
[email protected].