Jim Tousignant Responds To Questions On Ultimate Escapes Conference Call

By: Destination Club News
Date: April 17, 2010

On Thursday of last week, Ultimate Escapes conducted a conference call to discuss their fourth quarter and year end results with investors and the general public. Following the prepared remarks of President and Chief Executive Officer Jim Tousignant and Chief Financial Officer Philip Callaghan, Tousignant answered questions from listeners.

Trends and Renewal Rates

"2010 is starting to show some positive signs. Our sales pipeline is the highest it's been in the past 18 months. Renewals have been very strong. We saw a reduction in annual membership renewals in 2009 versus 2008. Historically, the company has had extremely high renewal rates averaging about 99% a year. In 2009, that dropped almost all due to the economic environment to about 96% annual renewal rate, still very, very strong. So far in 2010, our renewal rates have been more in line with our more historical perspective so I think we are starting to feel better about the opportunity pipeline, better about member satisfaction, better about our renewal of our larger base of members this year. I think it is still a little bit of a question as to when our target potential buyers will really start to feel even more comfortable, given much of the buying appetite is driven obviously by the overall economic sentiment, but I think as we all have seen, the stock market has seen some strong robustness. I think the debt markets are starting to improve. There are clear signs in the real estate market that while we aren't out of the woods yet, it looks like that when you look at some of the national price indexes, that average prices for residential real estate continue to show improvement over the last seven or eight months. I think we are guardedly optimistic that 2010 should be a better year than we experienced in 2009, which for us was obviously a relatively strong year in a tough market."

Property Portfolio

"We have spent the last 12 months rightsizing and rebalancing the real estate portfolio given the bulk of properties we acquired over the last three years through various acquisitions. That involves obviously some bringing on of some new properties and the disposition of some existing properties, mainly because of member demand and some other factors including property operating costs or occupancy levels that didn't meet our minimum target. It is a great opportunity to be buying luxury real estate. Probably the best market environment that we have seen in our history and we are going to be selectively acquiring new properties particularly in destinations and markets that our members have strong appetites for and we are seeing some very strong deal opportunities to be able to acquire these properties at relatively substantial discounts versus what we think their intrinsic values are. Again, we are bullish that during 2010 and 2011, there will be some selected buying opportunities that are going to be very attractive."

Tousignant would also spend time discussing the possibility of refinancing at more attractive rates from their 8.75% average interest rate. As the world's second largest destination club, Ultimate Escapes is also the world's first publicly-traded club, ushering in a new era of disclosure to members and prospective members alike.

Check back early next week as we will recap Ultimate Escapes' Annual Report and the various information disclosed in the 70+ page document.