# Former VCI-Royal Resorts owners, please clarify



## Phydeaux (Mar 15, 2011)

My understanding is that when the then named Vacation Club International, or Club International de Cancun, the first of the Royal Resorts in Cancun, term expired, members were given the option to either cash out and receive their residuals in full, or, re purchase for another term. Some members cashed out, while others reinvested, and the Resort is still operated under the Royal Resorts, now named The Royal Cancun. On another forum, a former VCI member wrote:

“No one got 100% of their investments back.  We had owned for about 17 years before the contract ended.  We did buy back in for $2500 for the next 30 years.  At the meeting when they told us they would not be paying 100% - many - and for good reason were very upset”.

Is this indeed fact? If so, it’s news to me. As a member of the Royal Mayan, I am very interested in learning if this is indeed true, or not. Again, I was told everyone that opted out of reinvesting received 100% of their residuals in installments. True or not?


----------



## tonyg (Mar 15, 2011)

Seems like a long time ago. The Royals were unable to sell the resort for enough to even get close to paying the residual, so they came up with the resale/rtu extension plan. Unfortunately the discussions here are long gone, but I seem to remember that they may have paid full residuals, but in two payments, with the second being delayed.


----------



## pjrose (Mar 15, 2011)

I think it was four payments.

You didn't ask, but in any case, 100% of the original investment is not promised in the contracts for the Royal Mayan or subsequent resorts.  It all depends on how much the resort sells for, minus taxes, legal fees, and so forth.  IF there are sufficient funds, the members get back the residual (original purchase price).  If not, not.


----------



## jschmidt (Mar 18, 2011)

I was a VCI member for 29 years.  The full, 100%, residual value was paid out in four payments over a four year period.  The payments were mailed on the exact day they were due and not a minute before.  There was an option to buy back in at a reduced rate with a restriction that you could not sell for two years so that you would not compete with the Royal Resort's sales.  I got 100% of my original investment back!

Tonyg is correct.  VCI could not be sold for enough to pay the full residual value.  It is believed that since the Royal Resorts were still selling Royal Sands units and were just starting to sell Royal Hacienda units that they decided to buy VCI back at full price and resell it.  This was probably done to keep sales moving.

When I was in Cancun last year I spoke with one of the original developers and was told that they would be lucky to sell the Royal Mayan for half of the residual value owed.  However, the way they’re spending money on the Royal Mayan, i.e. new roofs, key cards, villa floors, TV sets etc., indicates that there may be other plans for it.  With the glut of timeshares in the Cancun area and the poor success of reselling VCI units I don’t think it will be resold as a timeshare.  I’m thinking the Royal Resorts will buy it for a price just over the highest competitive bid and probably in a new corporation name.   Then, it will be sold as fractional or full-time ownership units.  I’m thinking this because I’m seeing three or four high rise full time ownership buildings just south of the convention center and the current building of a high rise development near downtown just to the north of Kukulkan Blvd.  Anyway, the rumors will be flying in the next three years, just like they did before the end of VCI.


----------



## Helene4 (Mar 18, 2011)

I would be VERY interested in fractional ownership of the Mayan, just as long as the prices are not as astronomical as their fractionals in Puerto Morelos. 

I could have a custom house built there for the price they are asking for a fractional and that would include the land price!


----------



## herestoya (Aug 28, 2011)

*Royal Mayan Residuals...*

I know this discussion was a while back, but am I to understand, my residual value that I was promised in the sales pitch is not guaranteed, nor is any portion if it? It was my understanding that the residual value of my interval was safe and we would be getting paid out that plus any value over and above that amount if it was sold. So, my question is...are we actually going to get railroaded here and get nothing back?


----------



## kenie (Aug 28, 2011)

If you recently received the e-mail survey regarding the Royal Mayan, the value of the payout they were using in the various scenarios was about $2500.
There were also lots of options to re-up at a reduced price for 10-15 years and the condo option was floated a few different ways. 
I would say it's very unlikely that there will be full residuals ..


----------



## jschmidt (Aug 28, 2011)

I’m out of town and don’t have my Royal Mayan Contract with me.  I remember looking at when the survey was sent out and read something to the effect that shares are paid out depending on the sale price minus selling costs.  If you check your contract, you can see the exact wording.  It was obvious that there is no guarantee of the amount of money that will be paid out!


----------



## tonyg (Aug 28, 2011)

jschmidt said:


> I’m out of town and don’t have my Royal Mayan Contract with me.  I remember looking at when the survey was sent out and read something to the effect that shares are paid out depending on the sale price minus selling costs.  If you check your contract, you can see the exact wording.  It was obvious that there is no guarantee of the amount of money that will be paid out!



Exactly !  Actually to get any more than the residual amount an equal amount to all the residuals would go to the Royals first then any remaining proceeds would be split between the members and the Royals. The exact wording is on page 3 of the membership agreement under the heading "Member's Priority in Residual Rights". There is no guarantee included.


----------



## lonola (Sep 17, 2011)

I'm a RM owner, this is what I learned recently from RR.  In 2005 RR did a survey with VCI owners that asked if VCI owners would re-buy at the end of their 30 year term.  64% responded that they would re-buy which gave RR a high level of confidence to proceed with the resale/rtu extension plan.  Unfortunately, when it came time to actually re-buy only 32% of owners bought in.  This caused a huge problem for RR as they now did not have enough money to pay off the other 68% who didn't buy-in and wanted their residual value.  It takes RR 4 years and 4 payments to pay those owners their residual value.

Fast forward to August 2011 where RR sends a similar survey to some RM owners (not all RM owners were sent this survey, only those who owned 2+ weeks and rarely trade their week).  RR quickly learns that most will not re-buy.  So the only option they have left is to try to sell the RM.  The problem is, they again realize that the current value of the RM property will "probably" not be enough to cover the residual values.

So, it is very likely that RM owners will not receive their residual values at the end of 30 years.  As a result, RR will have a huge credibility problem on their hands.  Many RM owners where told by their sales rep that, at the end of 30 years, they would get their money back.  But, if they read their contracts closely they realize that there is no guarantee of any residual value.  These owners will fill ripped off as RR previously paid full residual value (even if they didn't have to) to VCI owners but now are not doing the same for RM owners.  

As a result, these same owners will be less likely to buy any additional RR properties, i.e. "fool me once shame on you, fool me twice shame on me".

So, get ready for some bad RM news over the next 2 years.


----------



## KarenLK (Sep 17, 2011)

I can't remember the timeline for sure, and I re-bought, so I did not get the residual payments. I thought they were paid out in less than 4 years....that would take us up to NOW for the final payment. The trust ended in June of 2007. Can anyone else clarify??

Most of the people I spend time with at VCI currently are originals, so I can't ask them either...wait, one of them did not repurchase. I will try to email him and ask him how it worked for him.


----------



## Phydeaux (Sep 17, 2011)

lonola said:


> I'm a RM owner, this is what I learned recently from RR.  In 2005 RR did a survey with VCI owners that asked if VCI owners would re-buy at the end of their 30 year term.  64% responded that they would re-buy which gave RR a high level of confidence to proceed with the resale/rtu extension plan.  Unfortunately, when it came time to actually re-buy only 32% of owners bought in.  This caused a huge problem for RR as they now did not have enough money to pay off the other 68% who didn't buy-in and wanted their residual value.  It takes RR 4 years and 4 payments to pay those owners their residual value.
> 
> Fast forward to August 2011 where RR sends a similar survey to some RM owners (not all RM owners were sent this survey, only those who owned 2+ weeks and rarely trade their week).  RR quickly learns that most will not re-buy.  So the only option they have left is to try to sell the RM.  The problem is, they again realize that the current value of the RM property will "probably" not be enough to cover the residual values.
> 
> ...



Very interesting. I'd be very interested in learning your source, esp. for the details highlighted, please.


----------



## KarenLK (Sep 17, 2011)

I did not keep all the paperwork with percentages at VCI, BUT that part sounds credible. Last winter they were bragging about all the sales, but they did not produce additional new owners, just owners who changed out their weeks and units...I moved from a parking lot [lagoon] view to a Japanese garden view...same price but I had to pay 5000 to do it. Others consolidated their weeks into one unit. But NEW owners, I don't think so. Yet they have told me it is 75% sold out. No way!


----------



## ocdb8r (Sep 17, 2011)

Can VCI owners confirm exactly what the terms of their contracts were and the re-buy deal offered were?  

I was under the impression that the VCI contracts did in large part guarantee a specific residual and that is why RR repurchased and offered the re-buy incentives.  I thought the purpose of the survey was for them to determine if it would be better financially to buy the resort and offer the re-buys or just sell the resort and be stuck making up the difference in residuals owed.  They chose the former because of the healthy response that indicated interest in re-buying.  In the end this didn't materialize and they got stuck with both the resort and covering a large portion of the residuals.  It's been so long now, but this was my distinct impression at the time.

However, it was also made clear at the time that the contracts for the tri-royals we're written in such a way as to only guarantee a portion of the sale price of the property (depending on the value of your initial contract), up to a certain maximum residual (basically, no minimum guarantee as with VCI).  Hence the reason no one expects the Royals to offer the same sort of deal they did with VCI.

Did I somehow understand this all wrong?


----------



## lonola (Sep 17, 2011)

I got these numbers/info from a RM rep.  I went to talk to them after reading TUG and all the threads about the VCI resale problems.  I went to them asking what the probability was that RM owners would receive their full residual value.  The quick answer is, they don't know.  What they do know is that they are going to sell the property.  I just hope they don't play any "funny" games by inventing another company to purchase the RM at a depressed price level and then say "sorry, that's the best we can do" to all the RM owners while at the same time still owning control of the RM.  I'm not getting a warm/fuzzy feeling that RR is going to take care of their RM owners.  They have bit off more then they can chew.


----------



## buceo (Sep 17, 2011)

*low expectations*

Considering that here in US the primary residence housing market is in the tank, the vacation home market is in the toilet, and Expedia is renting Royals for dirt cheap I can't see any profitable scenario in now selling a timeshare resort in MX. I only know our Royal's contracts are "any profits will be divided up", right now that'd be a zero in my thinking.


----------



## KarenLK (Sep 17, 2011)

It's been a while, but we were told how much we had in residuals...I think I had something like 15 or 16 thousand total for 2 units. They waited to see who wanted the residuals and who wanted to stay, and then the newly available units were put on a website available via password where we could search for a specific week and then a specific unit type. A price was given, and we could double the residuals, if I remember the deal. I would have to dig the info up from here on TUG.


----------



## KarenLK (Sep 17, 2011)

This was posted by Geoffb way back a few years ago, but I think it explains a lot. BTW, I did a search on VCI residuals. There is a lot more there if anyone wants to read it all.

"The meeting was a presentation and Q&A with Roger Sherman (head of Royal Resorts sales and marketing) and Richard Sutton. I took the opportunity to thank Mr. Sutton in person for 29 great years at VCI after the meeting.

The presentation outlined the history of the trust and the proposal made in September 2005 to the members and then went on to describe a revised plan based on the survey that members received at that time. The stated goal of the plan presented is to offer "maximum value to members."

They stated that VCI will be offered for sale on the open market later in 2006 to guage the market value and see if the assessment done recently is accurate (approx. $40 million).

At the same time members will be asked to decide if they want to reinvest their residual rights and renew their membership at VCI for an addtional 30 years. If 75% of the 10,251 memberships reinvested the trust will be renewed and the remaining membership residuals will be paid in full. If not... the resort will be sold and all members will get approximately 45% of their residual rights in cash if the assessed value is accurate.

IF the trust is renewed for 30 years....

* based on owner feedback, the $20 million renovation to the property proposed in September 2005 will be reduced to an $8 million infrastructure upgrade. Members do not want major upgrades to the villas. Also, the resort will not be closed for 6 months for a further savings of $2.4 million.

* current VCI members who choose to renew will have first right of refusal for their current unit/interval and may be asked to make this decision as soon as April 30, 2006.

* current VCI members may also choose to purchase different units and intervals, and may also choose to purchase additional intervals. (How to do this fairly is being worked out now.) Members who want to change their unit and interval may be asked to make this commitment as soon as June 30, 2006, to lock in the 50% discount.

* all renewals and new purchases by VCI members would have any residual rights applied at 100% cash value and also a 50% discount on the list price of the unit. In my case this means I can renew my week 11 unit at VCI for 30 years for less than $2,000 after the discount and residual rights credit.

* members at other Royal Resorts are NOT eligible for the 50% discount.

* at the time of purchase/renewal the unit can be retitled. After that units may not be retitled until 2009 except in the case of death of an owner.

* VCI would remain a Royal Resort (probably with the same name, a suggestion by an owner at the meeting to change the name to The Royal Cancun was NOT popular). Maintenance fees would rise 3-10% due to new ammenities like heated pools.

It was acknowledged that the April 30 and June 30, 2006, deadlines may not be realistic and are subject to change.

All VCI owners should watch the mail for a postcard with information for registering for updates on the trust online or by phone. We were told that the mailing had probably gone out after we arrived in Cancun and some cards may need to be sent again because of an error by the mailing house.

This is a brief summary of the meeting from my handwritten notes, there was an extended discussion with the members present after the presentation. I do not speak for the Royal Resorts but I would be happy to try to elaborate or answer any questions if I can.

-G"


----------



## pjrose (Sep 17, 2011)

ocdb8r said:


> . . .
> 
> However, it was also made clear at the time that the contracts for the tri-royals we're written in such a way as to only guarantee a portion of the sale price of the property (depending on the value of your initial contract), *up to a certain maximum residual* (basically, no minimum guarantee as with VCI).  Hence the reason no one expects the Royals to offer the same sort of deal they did with VCI.
> 
> Did I somehow understand this all wrong?



It wasn't up to a maximum....for the RM and RC, it was the initial purchase price to owners IF there were sufficient funds after taxes, fees, and so forth, then an equal amount to developers, then if there was any more it would be split between owners and developers.  

For the RI, it was not based on the original purchase price, but split equally among all interval owners.  

In any case, there wasn't a maximum.....there was the pipe dream (but not promise) that "assuming" real estate values continued to climb, the property could/would be worth a lot more than the original value.


----------



## pjrose (Sep 17, 2011)

lonola said:


> I got these numbers/info from a RM rep.  I went to talk to them after reading TUG and all the threads about the VCI resale problems.  I went to them asking what the probability was that RM owners would receive their full residual value.  The quick answer is, they don't know.  What they do know is that they are going to sell the property.  *I just hope they don't play any "funny" games by inventing another company to purchase the RM at a depressed price level and then say "sorry, that's the best we can do"* to all the RM owners while at the same time still owning control of the RM.  I'm not getting a warm/fuzzy feeling that RR is going to take care of their RM owners.  They have bit off more then they can chew.



They have to sell to the highest offer.  Of course if there are no outside offers, then they could do that....


----------



## KarenLK (Sep 17, 2011)

I knew when I wrote my recollections I had it wrong...it should be 

* all renewals and new purchases by VCI members would have any residual rights applied at 100% cash value and also a 50% discount on the list price of the unit. In my case this means I can renew my week 11 unit at VCI for 30 years for less than $2,000 after the discount and residual rights credit.

That makes more sense.


----------



## lonola (Sep 21, 2011)

One thing is sure and that is, RM members will not get a sweet deal like VCI members.  VCI members could re-buy into VCI timeshare units at a 50% discount and apply 100% of their residual value towards this purchase.  Nothing close to this is being offered to RM members.  Recently I was offered a RS unit at a 20% discount (for being a RM member) and that was it.  They would not apply my RM residual value to this purchase.  Very disappointing.


----------



## younge58 (Oct 31, 2011)

*RM Owner*

We have been owners for the past 16 years at the Mayan and always been treated with respect until this past 9/11. After I pushed for answers on what was going to happen at the Mayan we were told to go home and read our contract then we were left at the Sands to find our own way back to the Mayan. After several attempts to talk with management I was given the cold silent treatment. After returning to the states I have sent several e-mails with no returned messages. Its funny how they said over the years that the members were there best sales people, looks like thats over and done with.
Its a shame but the Royal Resorts have become just another TIME SHARE.


----------



## geoffb (Oct 31, 2011)

In the lead up to the renewal at VCI we went from optimistic to pessimistic and actually bought a Sands unit to hedge our bets. Royal Resorts did not always tell me what I wanted to hear but I was never lied to.

If VCI had been just sold I expected to get a partial payment of my residuals and I was fine with that after 30 years of use. This was never an investment for us.

In the end I personally believe that Mr. Sutton had a lot of influence on the decision to make the renewal offer to members and I am not sure that can happen again.

-Geoff


----------



## Jennie (Dec 17, 2011)

I owned 4 weeks at VCI. All were bought as resales--most from Holiday Group (R.I.P). One of my first RCI exchanges, as a new owner of 2 timeshare weeks in Florida, was to VCI. While there I went on a no-pressure one-on-one lunch presentation at a nice restaurant with an VCI "concierge" who explained the residual value deal. 

She said that if I purchased a resale week, whether through her or any other source, the price paid by the original owner, known as the "residual value," would be paid in full to me when the Right to Use contract  expires in 2005, She had a list of weeks available as resales but none during weeks I would want. She said that she would notify me by phone if one became available. She called me several times during the year to let me know that she did not have the weeks I wanted but would keep looking. 

Meanwhile as soon as I had returned home from a wonderful vacation at VCI, I did research on the internet and located two timeshare resale companies--Holiday Group and Tri-west. Neither had any VCI weeks in inventory and had no idea what the residual value meant. I decided not to enlighten them, lest they raise the sales price to me. 

When notified of an available unit for sale, I would call ISCO, the management company in Florida for all of the Royal Resorts, and find out what the residual value was.  I was able to purchase four prime weeks in the 2-3K price range over a two year period. The units were all the same size prime season and all had excellent views--one was even oceanfront. 

I declined to re-up at the end of the contract and received residual values ranging between $4800. and $12,600. Each was paid in 4 checks over a two year period--in February and August.  

I was told along the way that VCI was the first timeshare property built in the newly minted Cancun area. A few model units were built but sales were slow and the two gentlemen who owned and developed it were on the verge of bankruptcy when they came up with the "residual value" idea which saved the deal.


----------

