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News has reached us that the Royal Park Albatross in Tenerife has been put up for sale by the current owners, MGM Muthu Hotels.  Originally owned and operated by Petchey Leisure the property has 160 apartments capable of holidaying 8,000 families each year. Accommodations are mostly timeshare owned via the Infinity Point system, so what does this move mean to points owners?

The immediate future

Put simply, if the sale proceeds, because timeshare ownership neither deeded (Escritura) or fixed week but points related, there are no actual owners of the real estate so the sale will simply mean less holiday choice to Infinity point owners. An important problem this will cause is the fact that there a significant number of points owners who used the property regularly in the past who will now have to holiday elsewhere within the MGM group, the result is that availability and timeframes may become more difficult with a contracting inventory. This could mean as many as 8,000 more owners vying for holidays with a lesser number of properties in the Infinity Point system.

Naturally, membership to RCI, the nominated exchange company, will be the same as usual but of course only for those Infinity Point owners who are members and pay their annual dues.

Longer term

Would we be pessimistic in saying this is yet another example of a contracting timeshare market in Europe, we don’t think so. In the past 18 months a number of timeshare developers have closed their sales operations in Europe most notably Diamond Resorts who after their acquisition by Hilton ranks them in the top three developers globally, even they have accepted that timeshare in Europe is contracting and no longer viable.

When a timeshare company begins to sell off their accommodation as real estate it’s always concerning. Members are contracted to pay their annual maintenance fees whether they use the accommodation or not. So why sell an apartment that is always going to make them profit? The pandemic has not cost MGM any money as each apartment has generated them an income throughout.

This argument is slightly flawed because points owner pay the same every year whether there is one property or one thousand but you can see the logic.

Petchey Leisure started by Sir Jack Petchey CBE Kt with his first major timeshare development being Club Praia Da Oura in Albufeira Portugal, known in the industry as CPO. If MGM proceed with asset stripping, who knows maybe CPO will be the only resort left, or maybe even CPO will be sold, as we said, who knows?

Sir Jack Petchey CBE Kt

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