# Will Covid-19 Pandemic Bankrupt Some Florida Timeshares



## bbakernbay (Apr 10, 2020)

With the travel restrictions and major loss of income and pending business closures and bankruptcies, it is certainly probable that Timeshare Maintenance Fees are not going to get paid.  This situation will very likely cause many Timeshare Corporations to suffer a significant loss of income as many Owners decide to walk away, refuse to pay MFees and the Timeshare goes bankrupt shortly thereafter.


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## CalGalTraveler (Apr 10, 2020)

Perhaps the HOAs can apply for SBA and payroll loans from the stimulus package.


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## DannyTS (Apr 10, 2020)

it really depends on the timeshare. Marriott took a series of measures and they announced they expect to be cash flow neutral. The delinquency rate may go up but if it is not by a lot, it may just be covered by the the lower maintenance costs while the  resorts are empty in 2020. Ironically, if the delinquency rate does go up the developers may acquire good inventory for free and that may increase future earnings. The big question of course is how long this is going to last but my prediction is that the big ones that are very profitable in normal times, will be fine. 
I do not know how the smaller resorts that were just getting by will do. We may see some problems there.


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## TravelTime (Apr 10, 2020)

I have thought about whether some timeshare companies may go out of business. It is possible. I have also thought that many hotels/resorts will go out of business too. I wonder what will happen with the cruise lines. Some of them have a lot of cash but I wonder how long they can survive with no bailout (and rightfully so).


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## Talent312 (Apr 10, 2020)

I suspect that many have already collected enuff MF's to remain open for the return of owners later this year.  HGVC (Hilton Grand Vacations) has said that they've collected 90% of MF's for the year.

Next year may be an issue if a lot of owners are unable to pony up.
.


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## Passepartout (Apr 10, 2020)

Many travel related businesses and full industries as well as healthcare systems and economies, large and small will be under extreme financial pressure caused by Covid-19. The effect will be much bigger than one state's timeshare resorts. 

I'm not sticking my neck out too far to say that the financially strong will survive. Those without strong balance sheets will struggle.

Jim


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## b2bailey (Apr 10, 2020)

TravelTime said:


> I have thought about whether some timeshare companies may go out of business. It is possible. I have also thought that many hotels/resorts will go out of business too. I wonder what will happen with the cruise lines. Some of them have a lot of cash but I wonder how long they can survive with no bailout (and rightfully so).


I own one stand-alone timeshare at Gaslamp Plaza Suites in San Diego. As long as they can re-open for Comic -Con week, I think they will be okay.


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## b2bailey (Apr 10, 2020)

Off-topic, I saw a headline that said cruise lines not able to receive US financial assistance. Anyone else see it?


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## Luanne (Apr 10, 2020)

b2bailey said:


> Off-topic, I saw a headline that said cruise lines not able to receive US financial assistance. Anyone else see it?


I've seen several articles that address this.


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## TravelTime (Apr 10, 2020)

b2bailey said:


> Off-topic, I saw a headline that said cruise lines not able to receive US financial assistance. Anyone else see it?



Yes, that is correct. They are not getting any bail out money.


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## WVBaker (Apr 10, 2020)

let's hope they don't lay this at the feet of the owners by way of substantially increased maintenance fees. That, in and of itself, will cause many owners to simply drop their units and flee.


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## Passepartout (Apr 10, 2020)

b2bailey said:


> Off-topic, I saw a headline that said cruise lines not able to receive US financial assistance. Anyone else see it?


I saw that- they made their bed by flying foreign flags to avoid U.S. taxes and wage/hour laws. But I also read that a Saudi investment fund with links to Prince Bin Salman and he-that-cannot-be-named-on-TUG invested heavily in Carnival Corp. in recent days.


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## Sandy VDH (Apr 10, 2020)

prices were very low, I have considered it.


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## Panina (Apr 10, 2020)

I am not too worried about the timeshares I own, high demand places, high demand times and managed well.  That is the key, those that were not managed well and had financial problems prior and relied on rental income for a large percentage of units that the hoa got because owners walked away, can be in trouble.  

Even the ones I plan  on giving away I feel will be easy even in harder times.

I realize my mfs this year and next might be lost if I cannot go but also think once there is either good treatment or a vaccine anyone who can afford to go away will asap after not being able to go for so long. Especially in driving distance.


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## Roger830 (Apr 10, 2020)

We own weeks 4,5,6 at Hollywood Beach Resort. The mf was paid in December for the full year, so we're ok for this year, but with the resort now closed, some of those owner's might get discouraged. Also, traders might want to give it up.

We'll be ok for next Jan and Feb, those owners will pay, I am concerned about future years.


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## TravelTime (Apr 10, 2020)

I think in 2021 when MFs are due again, we will learn the fall out. I suspect we will hear many complaints in 2021 and 2022.


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## Maple_Leaf (Apr 10, 2020)

Panina said:


> I am not too worried about the timeshares I own, high demand places, high demand times and managed well.  That is the key, those that were not managed well and had financial problems prior and relied on rental income for a large percentage of units that the hoa got because owners walked away, can be in trouble.


Weeks resorts with high owner utilization will likely be fine. The ones that depend on renters may have a problem. Points resorts kind of have the look and feel of hotels so those owners that rent are now in the hotel business with all the resulting coronavirus headaches.


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## Sea Six (Apr 10, 2020)

b2bailey said:


> Off-topic, I saw a headline that said cruise lines not able to receive US financial assistance. Anyone else see it?


Yes, and they are grounded for another 100 days!  Maybe they will decide to pay their taxes to the USA? Tired of Ship's Registry - Panama.  George Town,  and so many other places in the Caribbean.


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## klpca (Apr 10, 2020)

b2bailey said:


> I own one stand-alone timeshare at Gaslamp Plaza Suites in San Diego. As long as they can re-open for Comic -Con week, I think they will be okay.


Comic con is not a for-sure thing this year. I'll see if I can find the article.


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## CalGalTraveler (Apr 10, 2020)

...


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## pedro47 (Apr 11, 2020)

I feel some smaller independent timeshare resorts could be brought by Wyndham or DRI not this fiscal year but next year because owners will not pay their 2021 maintenance fees because of their experiences with the Coronavirus in 2020. IMHO.


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## theo (Apr 11, 2020)

bbakernbay said:


> This situation will very likely cause many *Timeshare Corporations* to suffer a significant loss of income as many Owners decide to walk away, refuse to pay MFees and the Timeshare goes bankrupt shortly thereafter.



I'm not at all clear on what you mean by *Timeshare Corporations*, but the deep pockets "big chains" will certainly be just fine.

Personally, I wonder and worry more about small, independent timeshare operations, where there are *no* "deep corporate pockets" behind the scenes and where the owner population (at least in my own observation and experience) tends to be older. I know of (and own weeks at) several such places in Florida, each with just 20-40 total units. At one such property, the ownership (*not* with *my* vote) "opted out" of compliance with Florida's condo law which requires minimum financial reserves to be maintained. That a choice to "opt out" even exists at all is another conversation entirely, but that option does indeed exist and it is indeed sometimes exercised.

A vote to "opt out" of maintaining adequate financial reserves is (to me, anyhow) a relatively clear indication that a majority of folks there cannot or do not choose to look beyond the figure on their annual maintenance fee bill. With that much clear, what will those same folks do if / when their fees inevitably go up as a result of some unhappy owners having been "locked out" of their 2020 weeks (for which they already paid their fees) and bailing out? That would inevitably create higher maintenance fees for those still remaining;  I can almost hear the sound of the dominoes falling there now. Even those remaining will have a pain threshold for fee increases. There is a point at which intelligent cost / benefit analysis leads to a reasonable conclusion of "No Mas" --- and folks just simply walking away. At some point, the future and viability of such a property as a timeshare facility will be in clear and obvious jeopardy,


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## Big Matt (Apr 11, 2020)

I'm really confused by this thread.  Other than brand new resorts that are partially built, the timeshares are owned by the owners.  I also would expect that people who pay the fees are either still capable of paying them at year end or are already retired.  I really don't see this impacting timeshare owners that much.  Additionally, many are vacant right now and will be for a few months total, so operating expenses are going down.  Management companies like Marriott may feel the pinch from losses in marginal income, but we are still paying them out of our fees.


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## theo (Apr 11, 2020)

Big Matt said:


> I'm really confused by this thread.  Other than brand new resorts that are partially built, the timeshares are owned by the owners.  I also would expect that people who pay the fees are either still capable of paying them at year end or are already retired.  I really don't see this impacting timeshare owners that much.  Additionally, many are vacant right now and will be for a few months total, so operating expenses are going down.  Management companies like Marriott may feel the pinch from losses in marginal income, but we are still paying them out of our fees.



I hope that I haven't inadvertently contributed to your "confusion" with my input. I was trying to make a very clear distinction between small, independent resorts and the "big chains" since I was (and still am) unclear about the OP's original reference. The two are profoundly different and I suspect that the current situation will ultimately result in significantly different consequences.

At several small, independent places (of only 20-40 units) where we own some fixed weeks, I expect that a months-long closure will indeed have some very real financial consequences, but I would certainly be happy to be wrong.


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## Big Matt (Apr 11, 2020)

Theo, I don't think it's as simple as some people not paying their fees, but here is how it might unfold.  First, there would have to be so many that the timeshare HOA would realize very early in 2021 that they couldn't cover the operating budget, pay taxes, etc.  At that point the remaining owners would vote on a one time special assessment to stay open.  If it didn't pass, the only real option would be to cease operation and either try to sell the vacated weeks outright or sell them to a vacation broker or advertise on a travel agent site (Travelocity, Expedia, etc.) while determining other options with the owners.  Assuming the property was reasonably nice to begin with, I'm sure there will be buyers if the HOA wanted to dissolve and sell the real estate.   

I've always thought that at some point the smaller timeshares would be an ideal investment by a municipality for affordable senior housing.


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## theo (Apr 11, 2020)

Big Matt said:


> Theo, I don't think it's as simple as some people not paying their fees, but here is how it might unfold.  First, there would have to be so many that the timeshare HOA would realize very early in 2021 that they couldn't cover the operating budget, pay taxes, etc.  At that point the *remaining owners would vote on a one time special assessment to stay open*.  If it didn't pass, the only real option would be to cease operation and either try to sell the vacated weeks outright or sell them to a vacation broker or advertise on a travel agent site (Travelocity, Expedia, etc.) while determining other options with the owners.  Assuming the property was reasonably nice to begin with, I'm sure there will be buyers if the HOA wanted to dissolve and sell the real estate.
> 
> I've always thought that at some point the smaller timeshares would be an ideal investment by a municipality for affordable senior housing.



To the best of my knowledge and belief, no "approval vote" is ever required for a  BOD to impose a special assessment on all owners, when warranted.  Once so imposed, the issue would then obviously become one of how many owners would accept and pay that special assessment. At very small resorts, if not enough owners pony up, a downward spiral begins.


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## montygz (Apr 11, 2020)

The threat to the timeshare industry is more defaults by existing owners, and less travel bringing in fewer fish for the sales staff and a slide in rental income for the resort itself.

I think all these will happen, but to what extent depends on how fast we rebound after this crisis fades. 

The timeshare industry made it through the Great Recession and they can weather this. People will want to get back out and travel.


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## Bwolf (Apr 12, 2020)

For the small, independent resorts, especially in Florida where there are streamlined foreclosure procedures, I think it will run something like this:  Owners who don't pay their 2021 MFs will be charged penalty fees and denied use of their unit until all fees are paid.  By a certain date, foreclosure proceedings begin. If the owners pay up, they are restored to  good standing and may use their unit and exercise all the rights of ownership.  If they don't, foreclosure transfers ownership of the unit to the BOD, as representatives of all owners, and the unit goes up for sale.  

Some independent resorts in Florida are popular, have good management and active resale programs, and will survive.  Then again there are resorts like those that Theo mentioned...


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## Sugarcubesea (May 24, 2020)

I own at Pinestead Reef in Traverse City and this is a true independent owner owned resort.   During Covid-19 some summer weeks have come on the market and it’s a bidding war to get them. So for this resort I feel we will be fine.  I also own at Quarter House in NOLA, due to how hard hit  Covid-19 hit this area I’m concerned for this independent resort but I hope this resort will be ok


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## b2bailey (May 24, 2020)

Big Matt said:


> Theo, I don't think it's as simple as some people not paying their fees, but here is how it might unfold.  First, there would have to be so many that the timeshare HOA would realize very early in 2021 that they couldn't cover the operating budget, pay taxes, etc.  At that point the remaining owners would vote on a one time special assessment to stay open.  If it didn't pass, the only real option would be to cease operation and either try to sell the vacated weeks outright or sell them to a vacation broker or advertise on a travel agent site (Travelocity, Expedia, etc.) while determining other options with the owners.  Assuming the property was reasonably nice to begin with, I'm sure there will be buyers if the HOA wanted to dissolve and sell the real estate.
> 
> I've always thought that at some point the smaller timeshares would be an ideal investment by a municipality for affordable senior housing.


I'm not familiar with any process that allows owners to vote for /against a one time assessment. More likely a Board action.


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## silentg (May 24, 2020)

We have owned independent timeshares and for various reasons have had special assessments. Snow damage in Vermont. Changes in management companies.  One timeshare in Florida was assessing very high fee so we opted out and it was a good thing, because they are no longer a timeshare. 
Our timeshare in Virginia asked for a minimal extra fee to fix old structures, balconies and railings. 
We have paid our maintence fees for all our weeks( 3) and have banked points in RCI and IHG and HIVC. Re arranged all travel plans for next year. We do have a river cruise scheduled for November, but we probably will postpone it to 2021 or 2022.
If we do go anywhere will probably be just in Florida drivable vacation. Maybe day tripping this summer.
Stay safe and Healthy


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## Big Matt (May 24, 2020)

b2bailey said:


> I'm not familiar with any process that allows owners to vote for /against a one time assessment. More likely a Board action.


I agree, that the board would vote.  I was lazy in my answer.  I assumed that the folks who were voted onto the board would vote.


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## wkl471 (May 28, 2020)

Apologies for reviving this older thread, but this was the first place I thought to ask. Exit company B just called me, saying most resorts were going to be charging "Special Assessments" and it was imperative that I contact them immediately. I am not stupid, I deleted the voicemail, but I'd be lying if I said it didn't concern me. We own at HGV in Orlando (Parc Soleil) and if they really do levy this "special assessment" I will have no choice but to bug out. I'd rather not do that, and there is absolutely zero so far on searching for any information out there on TS companies considering this option. Has anyone here heard anything yet about this?


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## Bwolf (May 29, 2020)

I wonder if the special assessments that Exit company B claims "most resorts" will charge will be less than the fees the company charges for its services?

I don't know about HGV, but I doubt that "most resorts" will charge a special assessment.  A brand new scare tactic, using the pandemic.


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