By Michael Kocon, President Board of Directors, Telemark Northwoods Lodging
In the world of timeshares, Telemark Northwoods Lodging has had a unique journey. As President of the Board of Directors for the past 13 years and a proud owner and Board member for 15 years, I’ve witnessed our transformation firsthand thanks to an innovative approach to short-term ownership
The spark: TBMA 2017
In 2017, Telemark’s latest transformation began when our General Manager and I attended TBMA, an event that proved to be a pivotal moment in our history. During a presentation by Dennis DiTinno, president Liberte Resort Management, we learned about short-term ownership ─ a concept with a five-year term. We saw potential in this model, particularly for attracting millennials who weren’t keen on lifelong ownership.
Identifying the issues
Returning from TBMA, our board addressed a set of challenges. Telemark was grappling with aging owners, and physical infrastructure. Our next generation, including my own kids, was reluctant to take over ownership. New timeshare buyers were scarce, and the specter of exit scammers loomed. Our reserve fund was meager, and it was clear we needed to address these pressing issues.
The five-year solution
We made the decision to take a serious look at short-term ownership as a potential solution. As we delved into this concept, my wife and I investigated the competition, particularly timeshare exit company scammers. It was eye-opening to see the prices they charged. If, and only if, the owners were fully current on their dues, these outfits wanted from $3,999 to a staggering $7,999. Their victims must also immediately surrender their timeshares. We had a clear competitive benchmark to beat. Our owners would pay significantly less and have 5 years of prepaid use for themselves and their families before leaving Telemark.
Pricing the transition
For Telemark, the answer was five-year timeshare leases called Interest for Years, (IFY) set at 5.5 times the annual dues, plus the $300 closing costs of deed registration. The 5.5 factor meant that an “IFYer” had any possible dues increases covered. The key was to align our pricing and terms with the market competition. The goal was to engage those seeking short-term ownership while addressing our financial needs and the needs of our current owners.
Five years of transformation
We initiated our new approach in 2018, and Telemark has seen a significant transformation. In its five years, the program has attracted interest from 325 owners who embraced the concept. The five-year contracts are now reaching their sunset dates and due to IFYer interest, the Board has approved an extension, offering owners who don’t want to gracefully exit just yet, a choice to extend for as little as another 3 year term for $150 closing costs and 3.3 times the current year’s dues.
The results and future
Telemark raised approximately $1.4 million through the five-year leases. While there were concerns about whether this approach would damage our base of income, the reality is different. A remarkable 72% of the weeks returned were highly rentable red weeks. These weeks are ideal for rentals at a minimum of 1.5 times the maintenance fees. While it has presented challenges in terms of staff availability, this shift has grown our income stream.
We reinvested the funds, catching up on maintenance and improvements, such as replacing roofs and HVAC, upgrading FF&E, and undertaking significant projects like replacing our old plant with a new $760,000 wastewater treatment system.
A beacon for the future
Telemark’s success story is a testament to the industry’s adaptability and innovative thinking. What was initially presented as a means to attract millennials and provide short-term ownership options became an honorable exit program. The willingness to evolve and embrace change has allowed us to emerge stronger and more financially sound.
Telemark has demonstrated that legacy timeshares, even those with a mature owner base, can thrive by adapting new strategies and catering to shifting preferences. It’s a signpost for the industry, guiding resorts to reimagine their approach, engage new audiences, and ensure sustainable growth. Telemark’s story is one of evolution, resilience, and the potential for a brighter future in the timeshare industry.
About Telemark Northwoods Lodging
Telemark began in the late 1940s as a ski resort. It offered downhill skiing, dining, and lodging as part of the “Wisconsin Highlands”. In the 70s and 80s, Duke Ellington played in the ballroom and Emril Legasse labored in the kitchen.
It was redeveloped as a timeshare in the mid-80s. In 1999 the owners’ association took over the resort and after much effort and struggles, Telemark has emerged as an ever-stronger lodging entity offering vacation opportunities to Telemark Owners, timeshare traders and transient guests.
Telemark Northwoods Lodging offers 52 condo in the heart of Northern Wisconsin’s skiing, biking, hiking, snowmobiling, and ATV country. The units range in size from 8 suites, 40 one-bedroom condos and 4 two-bedroom condos,
Telemark also has 4 two-bedroom condos and 2 four-bedroom condos 12 miles away at the headwaters of the Namekagon River and St. Croix National Scenic Riverway. The 3 buildings sit on 7 acres and 700 feet of lakefront offering every lake and river sport one can think of using our fleet of boats, pontoons, paddleboats, canoes and kayaks.