Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover. -Mark Twain
Tuesday, February 2, 2010
ILX Resorts, With Planned Resort in Puerto Penasco, May Have New Buyer
In March, 2009, I wrote a bit about a timeshare company with ties to Puerto Penasco which had filed for bankruptcy. To recap: Headquartered in Phoenix, AZ., ILX Resorts is a relatively small player in the timeshare industry with a total of 11 timeshare resorts, mostly in the Western United States. Its most famous resort is Los Abrigados in Sedona, AZ. The company bought land in the Las Conchas area way back around 1998 to build its second Mexico timeshare resort, but it wasn't until late 2007 that they opened up a sales room there, with a location in one of the new RP plazas for booking tours. That didn't last very long, though. I suppose the meltdown of the US economy had something to do with that, along with the rough competition from the Mayan Palace timeshare touts who still own the streets in Rocky Point in terms of recruiting tourists for presentations.
Well, ILX is in the news again, this time because a much larger timeshare company has offered to buy most of ILX's assets. That company is Las Vegas-based Diamond Resorts Corporation, one of the biggest timeshare companies in the world since its purchase of Sunterra Resorts in 2007. Diamond has more than 160 branded and affiliated resorts and over 24,000 guest beds in 26 countries with destinations throughout the continental United States and Hawaii, Canada, Mexico, the Caribbean, Europe, Asia, Australia and Africa.
Diamond Resorts’ offer includes a $100,000 deposit and a promise to pay off ILX’s debts of $34.5 million. In exchange, Diamond would assume control of all of ILX’s assets, which include its resorts; its real estate holdings (which includes 2.1 acres in Puerto Penasco, MX); all its sales and marketing centers; physical property such as equipment, company vehicles, furniture, etc.; and resort management contracts.
ILX also owns the Sea of Cortez Premiere Vacation Club in San Carlos, adjacent to the San Carlos Plaza Resort, which opened its doors in mid 2001. So this would be the second Sonoran timeshare resort to be added to Diamond's portfolio if this purchase goes through.
The SEC’s decision is expected sometime this month.
So the question for Puerto Penasco, if the deal goes through, is twofold: Will Diamond keep the property in Rocky Point and develop it, or will they try to sell it? And if they decide to develop it, how soon could we look forward to that?
Why is this important? Well, timesharing brings a considerable amount of money into every area where it exists. It is not exaggeration to say that Los Cabos really found its groove when the timeshare industry began to invest heavily in the area during the late '80s and early '90s, bringing fresh bodies into the region by the thousands. Timeshare owners don't come for a weekend, they stay a full 7 days or more and they're spending while they're on site. In addition, the dreaded timeshare sales and marketing people support the local economy, along with the jobs created for housekeeping, maintenance, office personnel, etc. So don't knock it too hard.
However, to reach the point where timeshare really becomes viable in Rocky Point, the new airport needs to have some regular flights from parts other than Arizona...
I'm still not completely sure where the ILX property is actually located, other than it is not beachside and it supposedly is somewhere near the entrance to Las Conchas. If anyone knows the precise location, I'd be happy to learn of it.