Sunset Harbor to vote on terminating Hyatt management contract

[Kal]

...This BOD member I talked to, owns more than one week, at HSH and doesn't use them anymore, just rents them out, and stays at another rental in town...

I'm curious here, are you suggesting that BOD member is a lesser person? I wonder if renting in Key West would give that person a heightened value being close to HSH for a lengthy period of time and has a insider's view of the pulse of both Key West and HSH members across many weeks. Just thinking...

 

[IslandTime]

I wonder if renting in Key West would give that person a heightened value being close to HSH for a lengthy period of time and has a insider's view of the pulse of both Key West and HSH members across many weeks. Just thinking...

My thoughts exactly. I trust he knows exactly what's going on and has much more insight than I do.

 

[AJCts411]

Was there an email regarding the vote? Or is this the announcement?

Every owner received a email.

 

[HenryT]

I think it's HIGHLY unlikely. Hyatt and II are both owned by Marriott. I think it's unlikely they're going to say, "No hard feelings, keep with II" if the owners vote to leave.

I could be wrong of course. But I think it will require a move.

I respectfully disagree with your perspective. I think Hyatt/Marriott would be shooting themselves in the foot by rejecting HSH owners from enrolling in II. They are fully aware of the demand for HSH and I think they will want those II exchange dollars.

If they made decisions based on being hurt that HSH left them, then they and their stockholders would have a bigger problem.

 

[AJCts411]

A few fun facts. Regarding another exchange company or II. Forgotten here is the fact the majority of owners use their weeks (including renting) and do not want the costs of a exchange company that they can no opt out of.
Hyatt preys on your emotions in their letter...workers there some 20 years. If Hyatt is so big and powerful in KW, why do they not absorb them or in reality, a new management company will need more staff, those their are the logical choice.
Hyatt says it is controling costs, would of gone up without them. Management fees are a percentage of what I will call maintence budget. That percentage is going up. Some cost savings. Remember as our costs for operating the resort goes up so does Hyatt fees and now they want a bigger cut. And no mention that Hyatt wants a cut of our reserves to now be include. about 150,000 more.
So easy to challenge Hyatt letter, 90% reads like it was written by a political spin doctor.
Like others I do not buy for one second the newbies are anything but shills for Hyatt. Oddly enough same shilling action on Facebook...were I am accused of belonging to a cabal, an operative of the BOD LOL. Shows one just how desperate the management company is.
Lastly I wonder the legality of Hyatt Management communicating directly with the owners in opposing of the elected board? Any owners here have access to the owners email?

 

[Digdot]

Breakaway fees? There is a management agreement, and a club agreement, Legal contracts end and are renewed. This is not Twitter. The BOD stated their reasoning to support this effort. Exact saving, not calculable until the new management proposals are reviewed. Want a guess, up to 40% by what other similar resorts are charged. The no votes seem to be using "not enough information" as their reasoning, yet raise fears by questioning the inapplicable. If you own you have a vote, my two are a yes.

I've read all of the information presented by the BOD and it is sufficient to gain my yes vote. I trust the BOD did the due diligence required, and I do not trust Hyatt to treat me fairly as an owner, it is in their sales pitches for portfolio "owners are the problem" and Hyatt stopped selling weeks. Now only pushing Portfolio. My question, where was the vote to allow portfolio?
The fear mongering on a evil cabal running the board is unfounded, all of the plotting against the owners has been by Hyatt.

My biggest concern is the cost of this possible transition
I KNOW it is not free
Legal fees alone could be extremely significant
I do not know the numbers cause obviously it was not disclosed. I feel that was intentional
Not happy and voting no!

 

[kwsunset]

I'm curious here, are you suggesting that BOD member is a lesser person? I wonder if renting in Key West would give that person a heightened value being close to HSH for a lengthy period of time and has a insider's view of the pulse of both Key West and HSH members across many weeks. Just thinking...

No not thinking them a lesser person at all, I quite like them actually. All I ment was if they aren't using their units any longer, why do they care if SH stays in the club or not.

 

[Kal]

No not thinking them a lesser person at all, I quite like them actually. All I ment was if they aren't using their units any longer, why do they care if SH stays in the club or not.

Skyrocketing charges from Hyatt

 

[AJCts411]

My biggest concern is the cost of this possible transition
I KNOW it is not free
Legal fees alone could be extremely significant
I do not know the numbers cause obviously it was not disclosed. I feel that was intentional
Not happy and voting no!

One can guess, imagine, etc., but significant costs would need to be disclosed by the BOD as a matter of complying to their legal duties. There is no hidden agenda as you like to imply to smear the BOD, but the thought makes for some degree fear mongering by shills, about all portfolio/club has left to offer. I say portfolio because they have 127 votes. The owners of Sunset via the elected BOD choose the management company and if they wish to remain associated with the club. Fact is, proof is that leaving has benefited the owners in Aspen. OH look no huge lawyer fees.
The below is copied from the Hyatt Facebook forum. No this is not a shill or a cabal member, a real long time owner.....

"We own at Beaver Creek Residence Club and Aspen and I can personally tell you that in the 6 mos since firing Hyatt (after interviewing competent and competitive management companies) hiring a leading Colorado management company, voting to drop Hyatt exchange program and becoming members of an ELITE EXCHANGE program our property values have risen in and our inventory has almost evaporated. The homeowners at Aspen are happy we FINALLY accomplished this change. Best thing that could have happened in Aspen.
Beaver Creek is still struggling with dropping values and so much inventory “Hyatts designated broker” says don’t list unless you’re willing to lose money….."

 

[magicjourney]

"We own at Beaver Creek Residence Club and Aspen and I can personally tell you that in the 6 mos since firing Hyatt (after interviewing competent and competitive management companies) hiring a leading Colorado management company, voting to drop Hyatt exchange program and becoming members of an ELITE EXCHANGE program our property values have risen in and our inventory has almost evaporated. The homeowners at Aspen are happy we FINALLY accomplished this change. Best thing that could have happened in Aspen.
Beaver Creek is still struggling with dropping values and so much inventory “Hyatts designated broker” says don’t list unless you’re willing to lose money….."

Glad to see insights from Aspen's owner. High MFs always drag the values down, especially you have to pay two club dues for most Hyatt Ski resorts as they are sold as fixed+floating weeks. Wondering if we can interview MVC?

 

[ScoopKona]

Wondering if we can interview MVC?

I think it's safe to say that MVC's perspective is in full-view, thanks to the new users who registered in the past week.

 

[AJCts411]

A bit off the Sunset topic, but there are rumblings by Beaver Creek owners to do the same as Aspen...
One has to speculate that ignoring the user owners, pushing portfolio, the talking points sales uses to push portfolio like how we owners are the problem, ( I add..not wanting to spend another 30K lol) how all of that is now biting them in the butt? Looking down the road, how viable will HRC be if more owner controlled properties leave HRC for greenr pastures? How does that play with portfolio sales, availability, viability?

 

[dioxide45]

I think it's safe to say that MVC's perspective is in full-view, thanks to the new users who registered in the past week.

Why only call out the newly registered users who are against the vote and not also call out those new registrants that are for Yes?

 

[echino]

I think Hyatt has to urgently make a difficult decision to start charging only one $157 club dues per owner, like other timeshares do. Then they maybe have a chance to sway a vote to hang on to SH. If Hyatt is greedy and not smart enough to do at least that, urgently, right now, they risk losing not only SH, but other resorts with high owner occupancy.

 

[Mongoose]

I think Hyatt has to urgently make a difficult decision to start charging only one $157 club dues per owner, like other timeshares do. Then they maybe have a chance to sway a vote to hang on to SH. If Hyatt is greedy and not smart enough to do at least that, urgently, right now, they risk losing not only SH, but other resorts with high owner occupancy.

More than that, they need to be laser focused on keeping their resorts by keeping their owners happy. It should be a no-brainer to keep the Hyatt brand. A loss like this and Aspen is not easily replaced. The question is, do they actually care?

 

[ScoopKona]

If Hyatt is greedy and not smart enough to do at least that, urgently, right now, they risk losing not only SH, but other resorts with high owner occupancy.

I agree. And I think that anyone who is thinking of buying a resale week at high owner-occupancy resorts should do so immediately. I envision Hyatt exercising ROFR on everything they can -- to put a thumb on the scale on any future votes. What I don't think will happen is MVC seeing this as a wake-up call to fix their problems. I think it is more likely they will try to tamp down secession votes the old-fashioned way -- buying them.

 

[dioxide45]

I would agree they need to change the pricing structure of their club fee. The $157+13% on every week owned is ridiculous. No other timeshare system I know of has such a structure. The problem is, if they change it at SH, they have to change it everywhere. That won't be easy to explain on the next investor call. MVW is all about stock price. Any perceived drop in revenue will result in a drop in the price of stock. Not only hurting the shareholders but probably many executives who have received stock options. Something else needs to give with the management fee. 13% going to 15% and being charged on operating and reserves seems to be in DRI territory. Change it to 10% and charge against operating and reserves or keep it at 13-15% and charge it only against operating. This is more in line with the management fee at other brands. You will never get a fixed management fee from a name brand timeshare operator.

 

[SteveinHNL]

I agree. And I think that anyone who is thinking of buying a resale week at high owner-occupancy resorts should do so immediately. I envision Hyatt exercising ROFR on everything they can -- to put a thumb on the scale on any future votes. What I don't think will happen is MVC seeing this as a wake-up call to fix their problems. I think it is more likely they will try to tamp down secession votes the old-fashioned way -- buying them.

Which resorts would be considered high owner-occupancy resorts?

 

[ScoopKona]

Which resorts would be considered high owner-occupancy resorts?

Sunset Harbor, Maui, Carmel, and the ski resorts (but anyone who bought spring or fall is a trader). Basically, the more high-dollar the zip code, the more likely they'll break away.

The good thing is that the trading power of what you own is based on its location, not the name on the lobby. And "Hyatt" may very well get schooled on that. Maybe we should start calling it HINO -- Hyatt in Name Only.

Don't get me wrong, I still recommend the system. If anyone asked me "what brand of timeshare should I buy?" I would still recommend this. Losing Sunset Harbor would be a blow -- but not an insurmountable one. And everything else in Florida, Texas and Arizona is quite safe. Unless MVC decides to gut the system because they can't figure out a way to make piles of cash by exploiting us.

 

[SteveinHNL]

So if I want to buy High Sierra "one day" I should consider expediting that instead of buying something with the intention of trading into it as frequently as I am able.

 

[Kal]

Resort pricing in the near term is a hard one to call. For HSH, if this effort fails, then the Maintenance Fees increase substantially and no other financial changes occur, there will be widespread owner anger. First by the lost, then the gouging. Next year, it would be easy to vote Hyatt off the island. In the meantime, prospective buyers and sellers won't know what to do. My first thought would be resale prices will increase, but there will be some cherry picking of owners who want to bail. Uncertainty always breeds change. I would say HSH will remain in HIGHER DEMAND because the HRC outsiders will try harder to get in because access could be limited in out years. For me, I'm a "buyer" because I'm confident Hyatt can't weather a 2 year storm and owners will kick their silly butt out the door.

 

[ScoopKona]

So if I want to buy High Sierra "one day" I should consider expediting that instead of buying something with the intention of trading into it as frequently as I am able.

Depends. How often do you think you'll use what you own? If the answer is "almost never," just trade in and hope they don't leave. If the answer is, "I'm buying to use my week," start searching. Be patient, yes. But if a deal pops up, pounce on it.

I would say HSH will remain in HIGHER DEMAND because the HRC outsiders will try harder to get in because access could be limited in out years. For me, I'm a "buyer" because I'm confident Hyatt can't weather a 2 year storm and owners will kick their silly butt out the door.

It will be interesting to see how many resales are ROFR'd at SH in the event of a no vote. If the answer is 100%, we know how MVC feels about the possibility of losing SH. I don't know how many resales happen in a given year, or if this vote could lead to a spike in resales.

I imagine MVC's calculus is, "We don't want to lose SH because then we can't sell it again. We don't want to change the fees because of all that sweet, sweet free money. If we give an inch to one resort, EVERY resort will want the same treatment. So let's buy all the weeks we can and put our thumb on the scale!"

 

[Kal]

Depends. How often do you think you'll use what you own? If the answer is "almost never," just trade in and hope they don't leave. If the answer is, "I'm buying to use my week," start searching. Be patient, yes. But if a deal pops up, pounce on it.



It will be interesting to see how many resales are ROFR'd at SH in the event of a no vote. If the answer is 100%, we know how MVC feels about the possibility of losing SH. I don't know how many resales happen in a given year, or if this vote could lead to a spike in resales.

I imagine MVC's calculus is, "We don't want to lose SH because then we can't sell it again. We don't want to change the fees because of all that sweet, sweet free money. If we give an inch to one resort, EVERY resort will want the same treatment. So let's buy all the weeks we can and put our thumb on the scale!"

I don't think there is a medication that will cure MVC's terminal illness of being DIRT CHEAP. Besides, they are knee-capped in dealing with their own overhead cost structure in buying a resale then "selling" it to the Portfolio.

 

[ScoopKona]

I don't think there is a medication that will cure MVC's terminal illness of being DIRT CHEAP. Besides, they are knee-capped in dealing with their own overhead cost structure in buying a resale then "selling" it to the Portfolio.

The big picture problem with the industry is OPCs and "gifts." It's the only way they know how to sell a timeshare. And it is also the worst way to go about it.

Make a system that works, and is in people's self-interest to buy one, and they don't need the game-show hosts dangling free prizes in front of couples on vacation. A truly excellent system wouldn't even need salespeople -- just order takers and notaries to take care of the contracts. If I recall correctly, we had somewhere between a 10-20% success rate in Key West. So that meant we had to pay the OPC between 4 and 9 times, and do 4-to-9 giveaways; all on top of paying the van driver, the desk clerks, two commissions (broker and salesperson), and the contract people. That's an awful lot of mark-up just to sell something people want to own.

At least once a month, someone simply walked in and asked to buy a week. Usually it was because they were paying through the nose for Bike Week, Boat week, Lobster mini season, Fantasy Fest or Christmas/New Year's. I would run them through how everything works. And these people almost always paid in full with a credit card.

I'd love to prove it to them -- Build a resort in Asheville, NC. And then no OPCs, no brokers or commissioned salespeople, and watch how fast it sells out selling at "cost plus a reasonable profit for the developer." They'd never even try it. They only know how to run a game show.

 

[dioxide45]

I'd love to prove it to them -- Build a resort in Asheville, NC. And then no OPCs, no brokers or commissioned salespeople, and watch how fast it sells out selling at "cost plus a reasonable profit for the developer." They'd never even try it. They only know how to run a game show.

One would think if it works, someone somewhere would have already tried the business model. DVC is perhaps about the only timeshare product out there that sells itself. It usually doesn't offer cash based incentives to get people in the door. But it also has a unique product. The fact remains that almost no one wants to buy a timeshare. Generally the construction cost is 40-50% of the sales price. Even if they cut the prices in half, people wouldn't be clamoring to buy them. Timeshare is a sold product through and through.