News has reached us the Paradise Kings Club in Paphos Cyprus is to close its doors to timeshare owners on the 26th March 2023. A letter was sent to all owners recently outlining the position, unfortunately to those affected it doesn’t make good reading. A transcript of the communication is shown below:
“Dear Sir/Madam
We are writing to advise you of the situation of Paradise Resorts Management Cyprus Ltd.
In 2012 Paradise Resorts Cyprus Ltd (PRC) the mother company was placed in receivership by the funding bank. In agreement with the bank, the receiver and the trustees, Paradise Resorts Management (Cyprus) Ltd was retained by the appointed receiver to continue operations for the benefit of the members.
Today the bank has allowed this company to remain active until 26th March 2023. Any client that has holidays here up to this point will have access to the resort for their holidays.
For clients that own weeks after 26th March and have paid their 2023 Fees we have managed to find alternative accommodation for 2023 with full facilities at a nearby hotel at the same rate as your Management Fees (subject to the trustee paying direct to the alternative accommodation). The same will apply to clients that have already deposited with RCI.
For clients that have paid their fees and do not wish to holiday in alternative accommodation can obtain a refund from FNTC for their 2023 fees as promised.
For clients that have paid their 2023 fees and wish to come to the alternative accommodation and would like an alternative check in date please send us your details so we can negotiate with the hotel by the end of this month.
We advised in the Management Fee letter that the fees were no longer covering the operation of the resort. The Management Company has been struggling for the last 10 years to keep the resort open.
From all the staff that have been with you all of these years we want to say thank you and wish you all the best.
A hard copy of this correspondence will be sent via post.
Kind Regards,
Paradise Management Services”
Well they don’t come much clearer than that
TCA conclusion
Regular visitors to this site will have no doubt read about the plight of many European timeshare resorts, sales to new owners are simply not happening, without the capital injection created by new sales, resorts struggle to make ends meet. Annual maintenance fees are simply not enough to cover all the expenses experienced by resorts; this is clearly demonstrated in the letter:
“We advised in the Management Fee letter that the fees were no longer covering the operation of the resort. The Management Company has been struggling for the last 10 years to keep the resort open.”
The Paradise Kings Club is the second Cypriot resort to close in less than a year. In May 2022 we reported on Club Aphrodite in Limassol closing its timeshare business. In the USA they have a term for small resorts and developers, they are referred to as legacy resorts these are the very resorts that are struggling for the reasons outlined in our recent article.
Both Kings Club and Club Aphrodite come under the description of legacy resorts. Large developers such as Wyndham or Hilton don’t suffer in the same way. Due to their size they can cross fund resorts that aren’t performing well, they also have the funds to update or even redevelop resorts; unfortunately legacy resorts don’t have that luxury.
As a concept, timeshare in the traditional sense has outlived its usefulness, maybe with the exception of the USA. Signals became very apparent when the mighty Diamond Resorts shut their entire European sales division back in November 2017, no matter what the business, no company in their right minds walks away from a buoyant profitable market.
Whilst it’s fair to say that the Paradise Kings Club was not the prettiest timeshare resort on the planet, we doubt the result of this insolvency will see the bulldozers move in. Once the dust has settled we are in no doubt that a buyer will be found with the resort either being sold as real estate holiday homes or repurposed into an apartotel. Fundamentally there is nothing wrong with the property or location, the demise was caused by neither, timeshare became its greatest enemy.
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