After announcing the temporary closure of all sales activity in October 2020 (Download Below), Club la Costa group issued a communication this week confirming that this move has now been made permanent.
In layman terms this means that no CLC resort will have a sales team and the three sales offices in the UK will not re-open. Furthermore the companies created within the CLC group that were responsible for sales are being placed “into a controlled administration process; as when trading entities become unviable for an extended period of time the Directors have specific responsibilities according to the communication.
What does this mean?
To owners at CLC this is of no real significance, for now, and probably means that you won’t be hounded by the sales department to upgrade, buy more points or weeks every time you holiday at their resorts. CLC have gone to great lengths to reinforce this point and we quote:
“The closure of Club La Costa’s timeshare sales companies has no impact whatsoever on CLC World’s members, Real Estate owners, or their resorts, all of which continue as usual.”
To the overall business model, this is not so clear. Any company that has products to retail needs some form of sales outlet be it external or internal, and timeshare is no exception.
It has often been argued that there is little profit to developers for the actual sale of the ownership, with major profit instead stemming from ongoing maintenance fees. Whilst this is probably true, income lost from owners passing away or exiting their ownerships will certainly affect the bottom line with no new owners to take their place.
It can be argued that timeshare; in its many guises, is certainly becoming less attractive as time goes by, with many commentators stating that the product has not evolved to accommodate the trends and tastes of today’s holiday maker. Even taking this into account, developers such as CLC still need fresh blood and without dedicated sales teams one has to wonder how this will ever be achieved.
As we have said on many occasions, timeshare has to be sold because the majority of owners don’t just have a flash of inspiration that makes them rush out to the nearest resort and pay vast sums of money to buy one. The way in which timeshare is marketed is certainly a far cry from a spontaneous buy.
The Future
This is very hard to say, but it doesn’t take a rocket scientist to work out that the development cost of a single apartment; when sold in one week ownership contracts, will have paid for itself dozens of times over. Factor in the years of paid maintenance fees and the profits really mount up.
It is well known that CLC have an active property sales division, CLC Estates which sells property within their resorts. Recently we published information on some name changes within the CLC Empire including the creation of Jade Realty Ltd in October 2020; “Realty” being the American expression which roughly translates to estate agent.
By not selling new ownerships and the demise of existing owners; for whatever reason, the result could be the freehold of apartments becoming available to sell on the open market. The eventually would be the whole resort ending up in private ownership with the inherent extra profit created by the property sales and potential community fees. Now that’s a very good business plan!
This is an interesting hypothesis although it must be stated that this is exactly that, a hypothesis based on pure speculation. We have no concrete evidence that this idea is even a twinkle in the eye of the CLC management, but given the number of smaller resorts that have gone down this very same route, it certainly offers food for thought.
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