It has been well reported that Club la Costa (CLC) has placed a number of companies into liquidation and from what we can gather this appears to be solely related to the sales departments meaning that CLC resorts won’t be selling any new timeshare or fractional products.
Apart from that CLC stated that, Covid permitting, it’s business as usual. Imagine our confusion when the largest English language newspaper for southern Spain, the Sur in English, which is owned by the Spanish daily publication, Diario Sur published the following headline:
Club La Costa goes into liquidation – Covid crisis and Brexit blamed
The article goes on to say:
“The bankruptcy administrator, Juan Carlos Robles, has told SUR that the liquidation affects seven companies in Spain and one in the United Kingdom.
The administrator stressed that this liquidation does not affect the real estate property titles – the ‘timeshare’ business.
Faced with the “avalanche” of calls, Robles has clarified that these will remain “intact”. He said however that a large part of the services will not be in full operation during the coming months.”
From this it would appear that the administrator believes that existing owners will not be affected, which coincides with what CLC are saying. The concerning point is a further statement from Snr Robles:
“Club La Costa World has around 700 workers who could lose their job, both at the Mijas headquarters and in Tenerife. Many of them have been laid off since last year through the Erte furloughing scheme.
Therefore, the administrator said that the first objective of this process is to try “at least” to save half of these jobs.
To do this, he proposes creating a series of “productive units” that can be sold off.
Robles clarified that he is trying to maintain a minimum activity in some areas – such as maintenance – because this would facilitate the sale of these units with “greater ease”.
Our question would be, what constitutes a “productive unit” and what exactly does the administrator intend to sell?
We have already reported on the fact that CLC has an active estate agency division who are selling complete apartments at their various resorts, does this figure in the equation? Maybe the administrator will outsource the sales division. Companies like Diversified Resorts already act as third party sales units for resorts. Like a cruise ship, maybe franchising everything that isn’t property related such as restaurants and other hospitality related services is under consideration. The answer is, we simply don’t know but what appears to be in black and white is that sales of some “productive units” will take place.
What we do know is that Snr Roble is quoted as saying:
“You can’t last a year with no activity”
This is probably the most important point in the whole article. Like most European resorts, CLC have been more or less closed for at least 10 of the 12 months Snr Roble alludes to. Add in the fact that the Covid-19 pandemic doesn’t appear to be going away any time soon, 2021 is looking to shape up as another disaster year for not only CLC but the timeshare industry as a whole, but is this true?.
A massive oversight
Snr Roble states that his priority is to save as many jobs as possible, laudable but maybe the facts have not been presented in the full light. Because of the closure of the sales division CLC have already made the majority of sales staff redundant, so no job saving there. Staff attached to the general running of the resort have their salaries paid by the CLC management company, who in turn are responsible for collecting the annual maintenance fees.
As an owner you will have no doubt have paid both your 2020 and 2021 fees. Snr Roble mentions the Spanish government ERTE scheme, this scheme has paid the salaries of many CLC staff, so a massive cost saving there. Given that the resorts have been mostly closed, little maintenance, housekeeping etc needs to take place but full maintenance fees have, and will be, collected. We can only assume that last year, and this year, could well be bumper years for the corporate bottom line.
So why is there a need to sell “productive units “to retain staff, more confusion?
The immediate future
It is clear that most owners at CLC resorts are from the UK, it doesn’t help signs of recovery when newspapers, such as the Daily Mail lead with headlines, such as the one below:
“Slow vaccine rollout could make lockdown last PAST Easter as Priti Patel blames AstraZeneca and Pfizer factory upgrades and supply chains – even though ’21million doses are already in the UK’ and Scotland ‘is sitting on 400k”(Published 20th January 2021)
With Easter Sunday falling on April 4th this year, this will certainly pass the “one year” deadline Snr Roble states.
It is hard to believe that and organisation the size of CLC is experiencing such a magnitude of problems, but they obviously are. Is the current action just the tip of a very large iceberg, is there more bad news in store for owners. Without wishing to second guess the final fallout from this information, it must be obvious to all readers that all is not moonlight and roses at CLC.
Naturally, TCA is keeping a close eye on developments and will publish updates as and when available. Being in limbo land is unsettling to all of us but for now we just have to accept it.
To read the full article in the Sur in English, please follow this link.
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