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Concerned about rising maintenance fees with Grand Pacific Resorts

klpca

TUG Review Crew: Veteran
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SDO, Quarter House, Seapointe, Coronado Beach, HGVC Bay Club, Carlsbad Inn
From the 2017/2018 Coronado Beach Resort budget, under the heading "Owner Services" the line item called GP Vacation Services was $47,316 out of a total operating expense of $2,152,569. Payroll (front desk, housekeeping, guest activities, maintenance, and administration) were far and away the biggest chunk of the budget (just over $1mm). Utilities were $214k. I honestly don't know if those management fees are out of line but I would suggest that you contact the board of directors for more information.

Btw I noticed this at the bottom: 2017/2018

studio (5 units) - operating $621, reserve $170 Total $791 (2015/2016 total = $766)
1 bed (36 units)- operating $711, reserve $198 Total $909 (2015/2016 total = $884)
2 bed (12 units)- operating $761, reserve $211 Total $972 (2015/2016 total = $942)

per the letter, the % increase was 3.2% (I did not check their math)

Maintenance fees go up. It's the nature of the beast.
 

GrampaTim

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Carlsbad Seapointe
Check it out and you will find the boards are GPR staff, not owners. Some may claim they "own" a week but they are managers of GPR, and the operations are geared to making significant profits for the company, not the timeshare. There is no chance that actual owners will get a seat on the board. The sitting board casts all the votes under their power to re-elect their own no matter how many highly qualified candidates run. If someone resigns, a member of the GPR staff is appointed to fill the seat.

In addition, they are making revisions too frequently because the contractors they hire are very poor quality. The recent remodel at Seapointe is a perfect example. A lot of money was spent on work that did not fit, was not mounted properly, and is already sustaining damage. Owner input is ignored in deference to some "designer" known to the board, and the results are not good. Of course, the mishung door in the lobby should be one's first clue that the quality of work is extremely poor.

It's also important to note the reduction of staff and services that has taken place even though assessments keep rising each year. It's now more of a "hotel" and the benefits go to the renters and special services not provided to the owners. It's a far departure from the promises made at the time of the original sale. However, with a corporate board, there is simply no chance for any changes, and the maintenance fees will continue to rise.

As for resale, while HGVC will gladly sell you a 2 bedroom summer week for a fee in excess of $35,000, the resale market sits at around $7,000. Under the board approved policy, if they take back a unit in arears for maintenance fees, and resell it for such an exhorborant price, the past due maintenance fees are never reimbursed to the HOA. Instead they go to the sales department.

The only benefits are 1). The grounds now are beautifully maintained by a landscaper who takes great pride in his work, and 2) it is still less expensive then renting a 2 bedroom condo for a week in the area.
 

ski_sierra

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Worldmark, HGVC Craigendarroch, MGC (EOYE), SDO (EOYO), Cliff Club Snowbird
You guys are really down on GPR. I thought I had found a gem. I dislike large beach resorts because you have to walk half a mile within the resorts to get to the beach. I like small beach resorts and GPR has some amazing beach locations.

It's still less expensive than owning Marriott. Would you guys recommend Marriott over GPR?
 

VacationForever

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I looked at GPR recently for friends. GPR MF is much lower than Marriott's although it is a smaller chain and brand name but it has awesome locations. I don't think the MFs are out of line given the locations and they are mostly in California where labor costs are higher.
 

klpca

TUG Review Crew: Veteran
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SDO, Quarter House, Seapointe, Coronado Beach, HGVC Bay Club, Carlsbad Inn
You guys are really down on GPR. I thought I had found a gem. I dislike large beach resorts because you have to walk half a mile within the resorts to get to the beach. I like small beach resorts and GPR has some amazing beach locations.

It's still less expensive than owning Marriott. Would you guys recommend Marriott over GPR?
Actually, I like GPR. I love the Coronado location, and the Carlsbad locations are great as well. Their in house exchange program is easy to use. We are not big resort people so the GPR resorts are just the right size for us. I would say that the maintenance fees are a bit on the high side, but not out of line. And for what we own, it is certainly less expensive than booking a hotel room or airbnb type place.

I used to own a Marriott (and may consider owning again maybe/maybe not) but the resorts are just too big for us. The maintenance fees aren't any bargain that's for sure. In fact that was one of the main reasons that we sold our unit. It would be great to own Marriott if we always wanted to stay at a Marriott, but since they are busier and larger than we like, the smaller resorts are a better fit for us.

Buy where you want to go and you will never be disappointed.

One more thing, we drove around San Diego and visited each location before buying. If possible, I highly recommend seeing the place(s) in person before buying.
 

GrampaTim

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First, though the maintenance fees are high, they are still less than some of the other companies, and especially Marriott. Also, those places ( we own at Seapointe ) are on the ocean, and anyone who owns property by the beach knows the maintenance needs are very high ( and thus costly ). I would have to disagree about the quality of the upgrades done at Seapointe. I found them to be poorly done and management was very resistant to making the contractors correct significant errors. The board is all Grand Pacific people, and thus owners really have no input. I also get the impression that many of the contractors have special arrangements with the company. For what they put in, I believe the pricing is quite high. Reviewing the budget, a huge amount of money is taken out for "management", and that is not at the building level. It's going to corporate, and on to their "investors" who contribute nothing to the facility. We've also seen cutbacks, which may seem small, but more happen each year which cuts costs, increases profits, but the fees still go up 2% per year. Another interesting problem is that the board agreed to a contract whereby if an owner defaults, and the unit is placed back in inventory, HGVC sells it at absurd prices, and does not have to reimburse the association for the delinquent assessments or receive any compensation for the value of the property. Finally, owners are encouraged to place units into the Rental pool which means people can't trade into Seapointe easily since the inventory is greatly reduced. Since Grand Pacific handles the rentals, they keep a significant percentage of any revenues, and evaluating this strategy, owners are essentially subsidizing a "hotel operation" by guaranteeing the maintenance fees, and maybe reaping ( but no guarantees ) a small amount of that paid money back. As owners, we have no voice in the operations, and reselling the property usually results in a loss. BTW, offer a property for $8,000 online, and HGVC will snap it up and resell it for $40,000.

We escape this mostly because we have a fixed vacation week, 3 units, a large family ( 25 ) that fills it, and the tradition is so strong that everyone wants to be there for at least part of the week. It's not cheap, but it's less expensive than any other accomodations we could get for this crew anywhere else along the SoCal coast.

In the end, remember that Greed Has NO Limits and thus MF's will continue to rise. You just have to decide if you are getting enough value from them.
 
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