Has anyone any idea as to what is going on with Global Great Hotels, because at TCA we really haven’t got a clue, or at least, not much of one. Looking at the back history and comment on the internet it appears that GGH had glowing praise, but towards the middle to the end of last year this praise turned sour with many negative comments, some of which we will look at later,
So what’s this all about, bearing in mind we are uncertain, it might be a good place to start by looking at what we do know.
GGH Investment scheme
First who are GGH, well according to their website, this is what they say:
“Global Great Hotels is an exclusive hotel club which was founded in 1997”
In practice, a “hotel club” is more akin to timeshare, but with some fundamental differences. In the first case, the EU Timeshare Directive of 2008 strictly prohibits the marketing of any long term holiday product or timeshare as an investment, this seems to be at odds when again, visiting the GGH website, we see this statement:
“Joining our elite club is simple and represents a real investment for the future, which is not limited to a specific property or a fixed length of time a year. Quite the opposite, at Global Great Hotels our members enjoy real estate periods throughout the year for an unlimited duration. In this way, they can stay with their family at either of our luxury resorts as many nights a year as they decided to book, whenever availability allows it.”
Further, to reinforce the link to a financial investment we see the following:
“By making this investment, not only can you share these privileges with your loved ones, you can also use your ownership to make money. We put at your disposal special programmes to help you get more profit out of your investment as time goes by.”
Just to ensure our understanding of investment is correct, below is the Cambridge Dictionary definition of the same:
“The act of putting money, effort, time, etc. into something to make a profit”
So now begs the question, is this a long term holiday product or an investment? Well according to the website, this “hotel club” seems to be both. Those who pay money into the scheme get an allocation of periods to use for holidays, and also something called “reassignment” revenue, this supposed income stream is generated from rentals of the holiday properties members have invested in to other non owner holidaymakers.
On the surface we seem to have a hybrid product, a cross between a timeshare, a fractional ownership product and a collective investment scheme.
Where is the problem?
If we ignore the fact that the product may be in contravention of the EU timeshare directive, we see a product where sums to purchase were way in excess of normal timeshare purchase. In Europe, a one week timeshare is now costing around £20,000, with the GGH scheme, £50,000 to £100,000 is not uncommon. In one enquiry received via our chat service, the couple invested £120,000!
Historic comments on Tripadvisor were all very positive, not only commenting on the quality of resorts but also on the financial returns, this all seemed to change in March 2023 when GGH issued an email to “members”. TCA had sight of this email, excerpts from which are shown below:
Further on we see:
Naturally there is a deal more content in the communication, but for the purposes of this article we post the final comment:
This communication would seem to imply that GGH are in a far from healthy financial position and have side stepped their accountability passing all responsibility to Onagrup in Barcelona.
Onagrup are an extremely large hotel and timeshare conglomerate, to our knowledge they offer straightforward hotel accommodation and normal timeshare products. Given that we cannot definitively state that the GGH product is timeshare in the purest sense, as it leans more towards to investment, this sort of product is not in the Onagrup portfolio at present and we doubt it fits within their current business model.
In mid 2023, the effect of the GGH communication started to impact on owners. Tripadvisor comments went from complimentary to scathing overnight:
TCA – Further investigation
We attempted to carry out our normal pattern of research starting with the company. Having checked various possibilities of the corporate name, we could find no details of the company registration. Generally there is a legal requirement to publish registration details on the corporate website, no such mention exists.
Whilst on the website, we could find no reference to a trading address or the obligatory cookies opt out. Neither were there any website terms or privacy policy, again, legal requirements.
May be a clue to location could be in the telephone number, no luck, the number begins with 902. In Spain 902 numbers are Non Geographic Numbers, also, 902 numbers are premium rated if calling Spain from overseas.
After much more digging we have established that the legal entity for GGH is in fact registered as a company in Andorra. This may be coincidence but Ona also have a number of entities based in Andorra.
A number of complainants mention a “J Casse” (Julie Casse), this person seems to have been responsible for replying very promptly to those who placed positive comment on Tripadvisor, however when the comments turned turtle, all replies seem to have stopped.
Remortgaging
Given the financial size of the investments into the scheme we have established that a high proportion of funds required were raised by the recommendation that the investors remortgage their properties to raise the capital. Given that financial advice in the UK is highly regulated by the Financial Conduct Authority, we wondered who was arranging these remortgages.
In correspondence we spotted a clue:
From the same email there was a list of the circulation:
It would appear that Neil Page works or worked for J W Homes Financial Services. This company is an estate agency based in Wales. A check of the FCA register states that they are registered as an Appointed Representative, this means that they don’t have their own registration but are registered and regulated under the umbrella of a network, in this case Mortgage Next Network Limited.
The J W Homes website is mostly incomplete with dead links, notably the link referring to mortgages. According to Google maps street view street view, the address quoted on the site is a vacant property. Companies House also registers the company as dormant.
The author of this article spent the majority of his career in the Financial Services industry, prior to retirement, and was a regulated Independent Financial Advisor (IFA). Using this knowledge it can be categorically stated that no lender would offer finance for any form of investment purchase except maybe buy to let or similar. When TCA questioned the individual who kindly shared his GGH correspondence with us, we asked what reason he gave the lender to arrange the remortgage? He said he was told by the IFA (presumably Neil Page) to state the reason was home improvements! The FCA will certainly have something to say about that!
TCA Comment
As we stated previously, we don’t really have a handle on what is, or has happened to GGH, suffice to say, something is badly amiss. We understand that the sales team selling this product aimed at big numbers resulting in many buyers remortgaging their properties through UK finance institutions. The loans, possibly fraudulently arranged, were taken on the premise that the investment income would pay off the loan, now it would appear this is not happening.
Earlier we mentioned the EU Timeshare Directive, herein may lurk a problem. TCA understand that the majority of sales took place in Spain, mostly at Ona properties in Mallorca; therefore it could be assumed that both the EU Directive applies and also Spanish timeshare law in the guise of Ley 4/12. That said, the parties to the contract being Global Great Hotels and CED Mundial Club SL are both registered in Andorra, which is not an EU member state.
Of interest however, the contract dispute disclaimer states the following:
According to this clause, the jurisdiction of arbitration will be that of the place of signature, as we said earlier, Mallorca features heavily as the place where sales took place and contracts were signed, therefore is it not reasonable to assume that both EU and Spanish law should be applicable?
We will carry on our investigation to see if we can get to the bottom of what is actually going on. If you are involved with GGH, especially if you remortgaged your home to invest, we would like to hear your experiences and of importance whether you can throw more light on the subject. Naturally, we will report further as and when we have additional information and a greater understanding.
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