The volume of responses that we have received since we launched this survey back in April 2020 has way exceeded our expectations. Having had time to analyse the results there are a number of common threads. Quite obviously a large number of respondents feel that having lost their holiday this year due to the COVID-19 pandemic, it would be only right and proper for the timeshare companiesto offer a refund; either in part or full,of their 2020 maintenance payment.
At the TCA we would agree that in the quest for fairness; understanding and considerationsome kind of monetary restitution would be an equitable solution. However, it is unfortunately evident the larger resorts and management companies do not seem to share the samenotion.
A number of respondents have already contacted their resorts requesting a refund and have kindly shared the replies that they have received:
Azure
No refunds, the only assistance offered is that bookings lost for this year will be able to be carried forward to March 2021.
Anfi
No refunds, despite being closed, Anfi state the resort is still being maintained.
Club la Costa
No refunds, CLC state that around 90% of the maintenance fee collected each year goes to pay for holiday accommodation with the balance covering call centres and administration.
Cameron House Owners Club,
Good news here, a reduction of the 2020 maintenance charge amounts to 72% for those who have lost their holidays. Those who have paid will receive this as a refund.
Marriott
Most unhelpful, no refund, instead a suggestion to either bank with Interval International (II) and have a 50% reduction of their fee to $99. Alternatively claim against holiday insurance. See: https://www.marriottvacationclub.com/covid-19/
One respondent was advised by a Marriot employee that 90% of the yearly maintenance covered the cost of the resorts cleaning bill. If true then their resorts must be sparkling!!
Scandinavian Village
Scandinavian Village in Aviemore, Scotland have made the amicable decision to refund all maintenance fees to owners who have not been able to use their allocation in 2020 due to the COVID-19 pandemic. To the directors of Scandinavian Village, you are a shining example to the entire industry, so well done you!
Los Claveles
Los Claveles Development Association , which combines the DOA and Escritura Ownership, but not Club Los Claveles , which is run separately. Wimpen are contracted by the communities to manage the resort. Below see a statement from the president;
“At the start of the pandemic, I reviewed with Wimpen possible financial predictions to see what savings could be made by furloughing the staff and other savings. The total savings amounted to around 35% of maintenance fees paid. However, I was concerned about financial hardships many owners would be facing, so as we had a good reserve fund, I decided we should offer a discount of 50% for weeks owners were unable to use.”
Profit or Loss?
If you are a regular reader you will know that we often work through figures to prove a point and our survey is no exception. Globally COVID-19 has forced the closure of all forms of hospitality including, of course, timeshare resorts. As a consequence of being closed, the resorts normal running costs were cut considerably. Staffing costs are commonly the largest drain on corporate finance andbeing that most governments introduced furlough schemes to maintain at least up to 80% of salary, we are sure that most resorts successfully alleviated the majority of this cost. There was no requirement for chambermaids, bar or restaurant staff, sales or administration personnel, so other than security, gardeners and a small contingent for maintenance workers, what other staffing costs would they have incurred?
So let’s take a look at a hypothetical situation during lockdown:
Period of closure – 16 weeks
Number of apartments on the resort – 100
Annual maintenance per week – £500
So, here is the maths:
100 X 16 = 1,600, this is the total number of ownership weeks during lockdown. With each one week of ownership coming to a bill of £500 annual maintenance fee, so £500 X 1,600 = £800,000!
If it is accepted that during lockdown period there was little expenditure at the resort, then the answer to the question that we have posed “Profit or Loss”, must surely be “Profit”.
Online or Ownership
Those still using their timeshare will be oh too familiar with the “outsiders” at the resort, by this we mean non-owners. Long gone are the days that timeshare resorts were exclusive and solely accessible to its owners. One of the main reasons why the general public are now able to vacate at a timeshare resort without spending thousands of pounds in purchasing an ownership is because timeshare; especially in Europe, is becoming less favourable and therefore sales to new owners have dissipated. We have recently heard that a long established resort in southern Spain bodes an occupancy rate of only 27% inactual timeshare owners. This is due in part to its elderly owners passing away and the management’s difficulty in selling to new owners. Needless to say this resort now appears on virtually every online booking website and furthermore, it is also apparent that as a consequence of these issues, the family that own the complex are currently actively trying to sell-off the real estate.
Taking a realistic view; due to the COVID-19 pandemic, resorts are either still closed or if open are limited in their capacity. So even those who have been offered a week later in the year will be hard pushed to get a reservation. Factor in the non-owning general public who have booked via external sources and the situation becomes even worse. If the resort cancels the holiday booked via a third party; such as a travel agency, it will have to pay back these costs. Yet; as we have established, in most circumstances this is not the case with annual maintenance fee payments.
What the Resort Development Organisation (RDO) says…
The RDO are the self appointed governing body of the European timeshare industry, yet it is important to point out that they do not actually have any regulatory powers.
“RDO’S enforcement department, operated on its behalf by KwikChex, has been receiving requests for information from owners as to what the policies will be of timeshare companies and resorts if owners are not able to take their timeshare holiday due to the Coronavirus emergency. KwikChex has already seen individual, positive examples of how this is being handled and in the first instance are recommending that owners make contact with their timeshare developer or resort to check on a case by case basis.”
Please note that the aforementioned article was posted in March 2020 and there have been no further updates since.
Given the readers’ comments found below the announcement, it is clear that there are a lot of other disgruntled timeshare owners who feel mistreated and neglected by their resorts. Many complain that they are not receiving any answers or assistance from their management companies and with the RDO equally limited in its desire to help, it is clear upon which side of the fence they are perched.
Conclusion
We are still receiving completed surveys and naturally we will continue to report on our findings in due course, but for now we would like to thank all who have taken the time to participate.
We’re seeing so many businesses throughout all walks of industry put their profits aside and reach out to help consumers; including a number of independent timeshare resorts, but generally the larger timeshare companies are still demanding the payment of sky-high maintenance fees and refusing to reimburse consumers who are unable to travel. Owners need help, but instead of taking this opportunity to assist their customers, the timeshare industry has largely decided to “throw them to the curb.”
Breaking News!!!
As of midnight on Saturday 25th July 2020, all passengers arriving from Spain and her islands will be subject to 14 days of self quarantine. Failure to abide by this rule will bring a fine of £1,000 with the possibility of a prison sentence for repeat offenders! Not a very nice way to finish your holiday is it?
A big question that revolves around the timeshare industry as to whether the resorts will be able to sustain another period of severely diminished profits or will they join the ranks of many other global businesses falling into bankruptcy or voluntary liquidation?
Taking into account the level of dissatisfaction surrounding this year’s maintenance payments as demonstrated by many of those who completed our survey, as an owner will you want to suffer another year of the same or is it about time you reviewed your ownership. For unbiased and concise advice on this matter, please do not hesitate to contact the TCA team!
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk