Matus Kubala, CFA
Momentum, long/short equity, hedge fund manager, CFA

Diamond Resorts: High-Interest Loan Business With Significant Downside

Diamond Resorts International (NYSE:DRII) offers timeshares in almost 350 vacation destinations, including 99 company owned and managed resorts, and 250 affiliated hotels and resorts.

Members of the network pay for Vacation ownership interests (VOIS) in the form of points. Based on the number of points purchased, they can choose the place and time to stay during their vacation. The company has two segments: Hospitality and Management services, and VOI Sales. Let's briefly explain both.

VOI Sales

VOIs are flexible timeshares, where users can stay at resorts and dates they choose, depending on the number of points they bought. They do not own the property. VOIs are sold through presentations called "Tours." Potential customers receive various gifts or promotional

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