Are Smaller/Independent Resorts in Trouble?

[AnnaO]

I just got off a zoom call with our resort BOD annual meeting. We are in dire financial situation because over half of units are in hands of institutional owners (MROP and Capital Vacations) and they stopped paying dues and/or special assessment. MROP is apparently insolvent and Capital Vacation is following their lead. Out of 1200 units in the resort only about 500 are current. On the call someone mentioned that another resort they own is in a similar situation and started a dissolving process… Is this a major shift in the industry or just isolated incidents?

 

[dioxide45]

MROP certainly has issues and they had a large special assessment IIRC. As for weeks owned by Capital Vacations and not in MROP, Capital Vacations should be paying the annual maintenance fees for those as they are actively selling their points product.

 

[AnnaO]

MROP certainly has issues and they had a large special assessment IIRC. As for weeks owned by Capital Vacations and not in MROP, Capital Vacations should be paying the annual maintenance fees for those as they are actively selling their points product.

BOD took legal action, but it takes time

 

[dioxide45]

BOD took legal action, but it takes time

What is this the BOD for? MROP or an individual resort? Did MROP stop paying dues to the resorts?

 

[TolmiePeak]

I think many systems are struggling to get younger owners to buy. They are going to have big problems when the older owners die and no heirs take over their timeshares.

 

[chriskre]

I think many systems are struggling to get younger owners to buy. They are going to have big problems when the older owners die and no heirs take over their timeshares.

Sad but true and the land is very valuable to developers in many of these resorts like my little Enchanted Isle beach resort which sits on prime Hollywood beach front lots. A developer would love to throw up a mega resort on the lot and I am sure the city would prefer the revenue too. It’s only a matter of time before the death of my frumpy little timeshare. The manager is trying to save his job by renting out vacant units on Expedia, hotels.com and vacatia.com so he claims it’s improving the cash flow but it forces owners to surrender their use of the week and if it doesn’t rent out then you can’t use it last minute like in the past. Plus now all owners share in the profits so my oceanfront 2 bedroom will more than likely rent as opposed to the 1 bedroom poolside that may not but I have to share my profit with that owner now so basically subsidizing their crappy units. I don’t think so.

 

[AnnaO]

Sad but true and the land is very valuable to developers in many of these resorts like my little Enchanted Isle beach resort which sits on prime Hollywood beach front lots. A developer would love to throw up a mega resort on the lot and I am sure the city would prefer the revenue too. It’s only a matter of time before the death of my frumpy little timeshare. The manager is trying to save his job by renting out vacant units on Expedia, hotels.com and vacatia.com so he claims it’s improving the cash flow but it forces owners to surrender their use of the week and if it doesn’t rent out then you can’t use it last minute like in the past. Plus now all owners share in the profits so my oceanfront 2 bedroom will more than likely rent as opposed to the 1 bedroom poolside that may not but I have to share my profit with that owner now so basically subsidizing their crappy units. I don’t think so.

So sad … for you and for us. We owned there for 20+ years, it was a family tradition. And like your unit we are on a prime land. Reed Hastings of Netflix bought the mountain we are located on and is developing his side into multi million $$ homes. He already cut us off from skiing on his terrain and raised lift tickets to insane amounts. Our days on the mountain we love are numbered

 

[AnnaO]

What is this the BOD for? MROP or an individual resort? Did MROP stop paying dues to the resorts?

BOD is for the resort, but MROP owns 300+ units and Capital Vacation bought 100 and is under contract to buy more. And ridiculously, they are also managing company after they bought VRI

 

[dioxide45]

BOD is for the resort, but MROP owns 300+ units and Capital Vacation bought 100 and is under contract to buy more. And ridiculously, they are also managing company after they bought VRI

So you are saying that both MROP and Capital Vacations are delinquent in paying their maintenance fees and special assessment?

 

[AnnaO]

So you are saying that both MROP and Capital Vacations are delinquent in paying their maintenance fees and special assessment?

Yes. First MROP failed to pay, then Capital Vacation decided with that delinquency we will not be solvent, so they will not pay, thus closing the vicious self fulfilling circle. I hope our lawyers get their hide.

 

[dioxide45]

Yes. First MROP failed to pay, then Capital Vacation decided with that delinquency we will not be solvent, so they will not pay, thus closing the vicious self fulfilling circle. I hope our lawyers get their hide.

So why would Capital Vacations opt to purchase more? I suspect the property's only remedy will be to foreclose on the weeks that are owned by MROP and Capital Vacations. The property should start looking at methods to dissolve the timeshare. They could consider the services of a company like Lemonjuice Capital Solutions if they haven't already.

 

[AnnaO]

So why would Capital Vacations opt to purchase more? I suspect the property's only remedy will be to foreclose on the weeks that are owned by MROP and Capital Vacations. The property should start looking at methods to dissolve the timeshare. They could consider the services of a company like Lemonjuice Capital & Solutions if they haven't already.

I believe they contracted to buy the other 250 back when they took over from
VRI. We are still praying for a miracle, so many of us owners have been going there for 20+ years And now that the rest of the world discovered our lovely mountain ( after Reed Hastings bought it) we are being squeezed out.

 

[dioxide45]

So this thread isn't really about the "timeshare industry" in general, but rather is your resort in trouble.

I think small independent resorts will have challenges with aging populations and non paying owners. I don't know that this is really a huge industry wide phenomenon. At least not for the big timeshare brands.

 

[AnnaO]

So this thread isn't really about the "timeshare industry" in general, but rather is your resort in trouble.

I think small independent resorts will have challenges with aging populations and non paying owners. I don't know that this is really a huge industry wide phenomenon. At least not for the big timeshare brands.

So why is MROP insolvent?

 

[chriskre]

So this thread isn't really about the "timeshare industry" in general, but rather is your resort in trouble.

I think small independent resorts will have challenges with aging populations and non paying owners. I don't know that this is really a huge industry wide phenomenon. At least not for the big timeshare brands.

Our independent timeshare is managed by the Berkeley group which is under the umbrella of Daily Management Resorts. I don’t think small resorts can survive without guidance from a bigger company but then again these groups also have conflicting interests because they also have affiliation with their own development partners.
I am sure they strategically manage some of these assets into the ground for their own interests.


Sent from my iPhone using Tapatalk

 

[jp10558]

I think the problem for smaller resorts is there are very limited situations in which they appeal on their own. They have to be in a great location and likely one where the big players aren't, they need to have comparatively low MFs but not slide into disrepair. Then they need to probably also manage a secondary market somehow / sales of people leaving for whatever reason. Finally I think they need to work with all possible exchange companies. These can appeal if they trade OK in the systems for low MFs or get people access to a place they want to go every year, and if people can even know about it.

 

[dioxide45]

So why is MROP insolvent?

They had a very large special assessment. Something like 35% of MROP owners were already not paing fees which resulted in the special assessment. I suspect many more owners didn't pay it and have started to walk away from their membership/ownership in MROP.

MROP Special Assessment [Multi Resorts Ownership Plan]

Just got a letter dated April 1 from MROP with a special assessment of $1,057 payable on April 30 - three days from now. Any MROP members with thoughts about this? Seems like MROP is not financially viable and hasn't been for a while - and that the board did not disclose this.

tugbbs.com

 

[FunnyFarm]

Which resort is this?

 

[Fido Chuckwagon]

So this thread isn't really about the "timeshare industry" in general, but rather is your resort in trouble.

I think small independent resorts will have challenges with aging populations and non paying owners. I don't know that this is really a huge industry wide phenomenon. At least not for the big timeshare brands.

I suspect the timeshare industry as a whole may be facing a demographic bomb at some point. How many timeshare owners do you know who are younger than 40?

 

[dioxide45]

I suspect the timeshare industry as a whole may be facing a demographic bomb. How many timeshare owners do you know who are younger than 40?

Perhaps, but that has almost always been true of the timeshare industry. It was never filled with 20 and 30 somethings. Their target demographic has always skewed older. Yes, today 20 and 30 somethings probably don't want to own timeshare and prefer hotels and Airbnb/Vrbo. As their travel patterns shift as they age and grow families, their reluctance to purchase timeshare may change also.

 

[TUGBrian]

I dont think new sales are the issue with the industry today...they continue to set sales records year in and year out.

aging/smaller/independent resorts are most certainly a huge issue for the industry however!

 

[AnnaO]

I dont think new sales are the issue with the industry today...they continue to set sales records year in and year out.

aging/smaller/independent resorts are most certainly a huge issue for the industry however!

Can you elaborate about the independent resorts being a huge issue? In the case that prompted my post the issue started with MROP failing to pay maintenance fees on the 300+ units they own In our resort.

 

[TUGBrian]

few reasons...but mostly because they are no longer in active sales and likely havent been for some time and thus are poorly equipped to deal with returning/delinquent/etc inventory.

defaults/delinquencies just snowball more for smaller independent resorts that cant keep the lights on so to speak, which lets the resort fall behind the curve...which causes more people to want out...and so on and so on.

 

[Sandy VDH]

This will be the death of independents. RCI and II exchange companies will only keep existing because they are owned by someone bigger, like wyndham and marriott. When everything left that NO big TS points play wants is left, then they will likely implode from too many owners walking away and being delinquent, it will make it too expensive for those remaining. Convert to apartments or condos, or sold and bulldozed for the next new thing.

Points and Big systems will be all that remains. Hence the consolidation of companies that has been happening for some time. Points and MFs based on points and not on underlying weeks, is honestly the only way this house of cards does not fall. WM with pure points play, and Wyndham with only selling UDI on new builds, has realized this. Disney has realized this.

Surprisingly HGVC has not yet figured it out, as there MFs are still based on underlying weeks and season. Low season weeks are always going to bail when in a pinch.

Marriott stayed in the week world the longest, and has an unfair points program, because of the skim.

So time will tell.

 

[TolmiePeak]

Last time we were at the Waiohai the average age at the owners social was 75. I'm 55 and was by far the youngest person there.