Stephen J. Cloobeck opened his first major development, the Polo Towers of Las Vegas, in 1992, pioneering the first purpose-built, high-rise vacation ownership property. In 2007, he led the acquisition of Sunterra Corp. in a $700 million buyout through his privately held Diamond Resorts, becoming one of the industry’s largest vacation ownership companies, rivaling such giants as the Wyndham hotel chain and Marriott’s vacation ownership division. Diamond was sold to Apollo Global Management in 2016, then sold by Apollo in 2021 to Hilton Grand Vacations.
As described by Michael Milken in the forward to Cloobeck’s 2018 book, “Checking In”, “His mission was always much more grand than building a profitable timeshare business. He wanted to change the world by changing an entire industry and creating a new level of excellence to which all subsequent companies would aspire.”
In 1983, Cloobeck graduated from Brandeis University with a degree in psychobiology. “I started out wanting to be a surgeon but after graduation decided that wasn’t for me. I should have gone to business school, but it wasn’t in the cards at that time,” Cloobeck told a business publication in 2015.
After college, he went to work for his father Sheldon, selling timeshares.
Cloobeck started his entrepreneurial career at the age of 25, building and leasing shopping centers in and around California. He survived his first business test in the late 1980s during a real estate recession, when both his general contractor and lender went bust at the same time while working on a project in Lake Forest, California. As he described the episode in his book, he stepped in and did much of the construction and leasing work himself to complete the project. To solve the debt problem, he transferred the assets – without penalty – to the Resolution Trust Corporation, a government-run asset management company charged with disposing of assets of insolvent savings and loans.
In addition to gaining a better understanding of architecture, construction and other elements of building, the experience taught Cloobeck a valuable lesson about risk and leverage. As he explained it in his book, “The difference between what you can leverage and what you should leverage. Most importantly I learned that if you’re going to bet on something, you better bet on yourself.”
He then teamed up with his father to build the Polo Towers in Las Vegas, building, designing, and operating of the property – from concept to concrete – while his father handled the financing. When Polo Towers opened its doors on December 29, 1992, it came in on time and on budget, a rarity in the construction business.
Cloobeck later created a new timeshare company, Worldstar Resorts: Diamond Resorts LLC. He took out a 60-month loan to finance the operation, and paid it back within three years and eight months, which gave him 100% ownership of the company. He sold the business in 2003 to Marriott, but kept the name, then started looking for his next business venture, landing on previously bankrupt timeshare developer Sunterra Corp.
Combining his usual mixture of confidence, courage and bravado, Cloobeck’s Diamond Resorts acquired Sunterra in March 2007 for $700 million, including $375 million of existing Sunterra debt, making Diamond one of the largest timeshare companies overnight. As Cloobeck would later write in his 2018 book:
“What if I took a bet on myself, and leveraged my experience with Polo Towers – admittedly only a single property, not a portfolio of several dozen, let alone nearly one hundred – and tried to resuscitate Sunterra? I could keep the company largely intact, whereas other investors were looking to tear it into piecemeal components, stripping off parts like it was an old car abandoned in a junkyard. What if I poured my energies into learning Sunterra from the ground up—not just examining its books, but visiting its properties, talking to owners and guests, holding listening sessions with team members? As an outsider, maybe I could complete a full audit of the company’s cultural and performance woes to get to the bottom of what really went wrong.”
Cloobeck navigated the company through the recession, then went on an acquisition spree, acquiring seven smaller timeshare companies that contributed to Diamond’s rapid growth. He took the company public in 2013 and was rewarded for his efforts in 2016, when funds affiliated with Apollo Global Management paid $2.2 billion for Diamond. Hilton Grand Vacations acquired the company from Apollo in 2021.
For all his business accomplishments, Cloobeck may be best known to the general public for his appearances on two of the most-watched episodes of the CBS program “Undercover Boss” in 2012, when he appeared in disguise at Diamond’s resorts and represented himself as an ordinary worker. In a 2020 interview with Michael Milken, Cloobeck explained his initial reluctance to participate in the show, then how he came to embrace the experience:
“The idea was to show the humanity of a corporation, of a business. When I was asked to do it, I actually said no, because I thought they would hurt my brand. What I learned – I actually was fired the first day on the set. I actually quit at the same time. But we rekindled that relationship really quickly and ended up creating some fabulous shows –and I learned about my team members, things I did not know, going undercover, creating the crazy characters, and then at the end of the show I could reach out with the goodness of my philanthropic heart to help those in need in my company. I created a crisis fund within the company to help all of my team members, which was monitored by different folks to teach philanthropy within my company. It was a probably one of the best business experiences that I had ever done that I was afraid to do at the beginning.”
Cloobeck’s surprise donations to his workers at the end of each Undercover Boss episode has earned him the description of “the most generous undercover boss seen on the show” and the top ranked executive on a list of “Undercover Boss: The Most Generous Company Giveaways”.
Following the 2016 sale of his company, Cloobeck has overseen his personal portfolio of investments, including a stake in CLEAR, the biometrics identity and access company found at more than 50 airports, stadiums, and other venues nationwide.
He co-founded the news and social media website Factz with blogger and author Nik Richie. The website debuted in September 2022 with a compelling mixture of news and scoops about politics, entertainment, business, and other topics approached from the political middle – or what they call a “purple party”.