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COVID-19 and Maintenance Fees [MERGED]

SueDonJ

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Budget - an estimate of income and expenditure for a set period of time

Key word being "estimate".

Its their best guess what future revenue and expenses will be.

Every line item?!?! I am gobsmacked.
 

WBP

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I've tried to put my Thinking Hat on, to figure this issue out, and to make some predictions for our CY 2021 maintenance fees.

My assessment (in the case of Desert Springs Villas, and my knowledge of that owner base, and HOA Board (and their historical decision making):

(1) I think MVC is going to provide the HOA Boards at their resorts with leadership, in terms of budgeting, and anticipating the known/unknown. This is one of those moments when I think we should be pleased that we own with Marriott, and no matter how much we may like/dislike what Marriott suggests (and, I mean Marriott International as the First Tier, and Marriott Vacation Club, as the Second Tier), I think there are few to none, lodging/hospitality companies in the world, with the knowledge/skill/history of successful performance, than Marriott International, when it comes to responding to a disabling (socially and economically) worldwide event. It is Marriott's track record, in this regard, that makes Marriott International stock, in my opinion, a "BUY," at present. I'd expect that Marriott Vacation Club will take the strategic decisions/principles/plans that Marriott International makes, and apply them to the unique characteristics of Marriott Vacation Club (and timeshare);
(2) I expect that the DSV II HOA Board and MVC will be conservative about CY 2021 in terms of occupancy, revenue from resort operations, and liberal in planning for expenses, particularly staffing, insurance (remember, Marriott paid for health insurance for all furloughed employees), and bad debt from defaulting owners;
(3) I'd expect that the DSV II Board will plan for intensive staffing, in terms of housekeeping, loss prevention (or whomever may be responsible for monitoring social distancing), and Front Office Staff, who, for example, at DSV II, are making pool reservations for owners and guests, in two hour blocks of time (think about how much work that is, and how labor intensive monitoring that, will be at the many pools on the DSV campus);
(4) If DSV continues to socially distance guests at the DSV pools, as they have, I believe that that will have a negative influence on occupancy at DSV, as I don't know many owners who go to DSV, without the intent to spend some time at the pools, particularly during the hottest times of the year;
(5) Given the number of unemployed Americans, and the potential, if the incidence of Covid 19 continues to climb, that there will be a substantial number of owners who walk away from their ownership. The timing of this is very bad for the HOA, as by the time the HOA has an opportunity to put a lien on the timeshare week, they will have lost the opportunity to derive rental income on that timeshare week/usage; hence, lots of bad debt. I see this as having, perhaps, the greatest potential to collect whatever additional revenue that they can, from the owners who pay their 2021 maintenance fees, to cover the bad debt;
(6) Income and expenses at DSV will be influenced by governmental mandates for travel and tourism, based on the location of Covid 19 surges;
(7) I do not expect that if a vaccine is released in 2021 to mitigate Covid 19, that that will have any bearing on the traveling public's behavior;
(8) I think that MVC timeshare owners are more likely to vacation/travel, than non-owners (e.g. transient guests, renters);
(9) I expect that Marriott International and MVC will continue to be a leader in the lodging and hospitality industry, in Covid 19 mitigation, at MVC resorts.
(10) There will be some relationship between the physical size and maintenance/energy intensive assets, and operational expenses. For example, Marriott's Custom House, which is relatively self-contained, and without a lot of land to maintain (unlike Desert Springs Villas), I expect, will have lower operational expenses, than, for example, DSV.

Hence, I'm planning on a $200.00 increase, per week, for our DSV II timeshares, in CY 2021.

I may be entirely wrong, here, or partially wrong/right, these are my educated (close to 35 years of multiple weeks of Marriott ownership), best guesses.
 
Last edited:

vol_90

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I've tried to put my Thinking Hat on, to figure this issue out, and to make some predictions for our CY 2021 maintenance fees.

My assessment (in the case of Desert Springs Villas, and my knowledge of that owner base, and HOA Board (and their historical decision making):

(1) I think MVC is going to provide the HOA Boards at their resorts with leadership, in terms of budgeting, and anticipating the known/unknown. This is one of those moments when I think we should be pleased that we own with Marriott, and no matter how much we may like/dislike what Marriott suggests (and, I mean Marriott International as the First Tier, and Marriott Vacation Club, as the Second Tier), I think there are few to none, lodging/hospitality companies in the world, with the knowledge/skill/history of successful performance, than Marriott International, when it comes to responding to a disabling (socially and economically) worldwide event. It is Marriott's track record, in this regard, that makes Marriott International stock, in my opinion, a "BUY," at present. I'd expect that Marriott Vacation Club will take the strategic decisions/principles/plans that Marriott International makes, and apply them to the unique characteristics of Marriott Vacation Club (and timeshare);
(2) I expect that the DSV II HOA Board and MVC will be conservative about CY 2021 in terms of occupancy, revenue from resort operations, and liberal in planning for expenses, particularly staffing, insurance (remember, Marriott paid for health insurance for all furloughed employees), and bad debt from defaulting owners;
(3) I'd expect that the DSV II Board will plan for intensive staffing, in terms of housekeeping, loss prevention (or whomever may be responsible for monitoring social distancing), and Front Office Staff, who, for example, at DSV II, are making pool reservations for owners and guests, in two hour blocks of time (think about how much work that is, and how labor intensive monitoring that, will be at the many pools on the DSV campus);
(4) If DSV continues to socially distance guests at the DSV pools, as they have, I believe that that will have a negative influence on occupancy at DSV, as I don't know many owners who go to DSV, without the intent to spend some time at the pools, particularly during the hottest times of the year;
(5) Given the number of unemployed Americans, and the potential, if the incidence of Covid 19 continues to climb, that there will be a substantial number of owners who walk away from their ownership. The timing of this is very bad for the HOA, as by the time the HOA has an opportunity to put a lien on the timeshare week, they will have lost the opportunity to derive rental income on that timeshare week/usage; hence, lots of bad debt. I see this as having, perhaps, the greatest potential to collect whatever additional revenue that they can, from the owners who pay their 2021 maintenance fees, to cover the bad debt;
(6) Income and expenses at DSV will be influenced by governmental mandates for travel and tourism, based on the location of Covid 19 surges;
(7) I do not expect that if a vaccine is released in 2021 to mitigate Covid 19, that that will have any bearing on the traveling public's behavior;
(8) I think that MVC timeshare owners are more likely to vacation/travel, than non-owners (e.g. transient guests, renters);
(9) I expect that Marriott International and MVC will continue to be a leader in the lodging and hospitality industry, in Covid 19 mitigation, at MVC resorts.
(10) There will be some relationship between the physical size and maintenance/energy intensive assets, and operational expenses. For example, Marriott's Custom House, which is relatively self-contained, and without a lot of land to maintain (unlike Desert Springs Villas), I expect, will have lower operational expenses, than, for example, DSV.

Hence, I'm planning on a $200.00 increase, per week, for our DSV II timeshares, in CY 2021.

I may be entirely wrong, here, or partially wrong/right, these are my educated (close to 35 years of multiple weeks of Marriott ownership), best guesses.
That's a lot of thinking and appreciate the basis for your projected increase. I'll take a much easier approach and estimate that MF increases for 2021 will average around 5% for all MVCI properties. Some will be more and some will be less (Preferably Phuket, DSV II, Canyon Villas, Destination & Asia Pacific points). For 2021 MF budgeting purposes I just multiplied my 2020 MF's by 1.05 so I'm estimating $20,115 for 2021.
 
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Superchief

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That's a lot of thinking and appreciate the basis for your projected increase. I'll take a much easier approach and estimate that MF increases for 2021 will average around 5% for all MVCI properties. Some will be more and some will be less (Preferably Phuket, DSV II, Canyon Villas, Destination & Asia Pacific points). For 2021 MF budgeting purposes I just multiplied my 2020 MF's by 1.05 so I'm estimating $20,115 for 2021.
I agree. I think the avg increase will be 5%, with higher increases at Ocean Pointe and Oceana Palms, based on my recent experiences with their management approaches. I believe some resorts set their budget with the approach: "how big an increase can we get away with', and then budget expenses with that in mind. Any savings in expenses will be countered with reserve increases.
 

bazzap

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In almost 20 years of MVC ownership at 5 resorts, I can only immediately recall one of those resorts in one year having a MF increase > 5 %.
For 2020, those increases ranged from 0% to 2.82%.
I would expect bad debt provision to be the only really serious risk factor in setting 2021 MFs.
 

pedro47

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Next year MF are going up over 7% IMHO . We can blame it on COVID-19 and some greedy folks in the ivory tower of management.:sneaky::mad: IMHO....
LOL.:LOL:
 

Fredflintstone

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Next year MF are going up over 7% IMHO . We can blame it on COVID-19 and some greedy folks in the ivory tower of management.:sneaky::mad: IMHO....
LOL.:LOL:

IMO, I can see folks having knots in their stomachs sweating the increases....and for good reason.

Hmmm. To me, vacationing is about freedom and stress free. Not being locked into a system or contract where you have no control over costs now and in the future. Where you dance to the bidding of the HOA. Where they are your master and you a slave.

For me, renting timeshares or condos is freedom. I don’t like the terms, goodbye. I don’t like the rental price, next. I don’t like requesting certain times and maybe get it fulfilled...or maybe not. With renting, I book when I want, where I want. If it’s not available....next until I succeed. Disease or pandemic hits? No problem, I’ll rent later. With renting, I choose the time, the amount, where I stay and get what I want every time with no added fees to do so. It almost reminds me of waiting for the axe to fall on my head come January. Am I getting a sharp axe or a dull one? I choose no axe at all.


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Superchief

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In almost 20 years of MVC ownership at 5 resorts, I can only immediately recall one of those resorts in one year having a MF increase > 5 %.
For 2020, those increases ranged from 0% to 2.82%.
I would expect bad debt provision to be the only really serious risk factor in setting 2021 MFs.
I wish I could say the same. Canyon Villas increases have been over 5% in 5 of last 7 years. Ocean Pointe and Oceana Palms are typically 5%, but were over 7% last year under new GM's.
 

Bodie

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Why should we pay fees when we can’t use the properties during the coronavirus crisis?

First and foremost, MVC is in business to make a profit. Don't think for a moment we are going to be compensated for any loss of use. Don't expect lower fees. To the contrary, because of the loss of business, I would expect them to go up. Possibly, significantly. Any red ink will be passed on to us. MVC has calculated the risk of owners having to leave the program. They will actually make money on resales. MVC's overall concern is the shareholders.
 
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Dean

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First and foremost, MVC is in business to make a profit. Don't think for a moment we are going to be compensated for any loss of use. Don't expect lower fees. To the contrary, because of the loss of business, I would expect them to go up. Possibly, significantly. Any red ink will be passed on to us. MVC has calculated the risk of owners having to leave the program. They will actually make money on resales. MVC's overall concern is the shareholders.
I don't agree with most of your assertions. We are responsible for maintaining the resorts including any additional costs due to covid and to spread the costs over a smaller based of owners if there are defaults. MVC as a separate company including sales is legally separate and those losses will not be passed on to owners in terms of cost. Now it may be we see a lower level of service and erosion of some non guaranteed options like cash type exchanges. Risk wise owning a timeshare is exactly like owning a condo other than you have a smaller vote.
 

pafort

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[QUOTE = "bazzap, publicación: 2446091, miembro: 39950"]
Porque todos somos propietarios de los resorts.
Tienen importantes costes operativos, de mantenimiento y probablemente también de mejora del proyecto incluso durante el cierre.
[/CITAR]
And instead, to give an example, Marriott Son Antem is completely abandoned: dry golf courses, swimming pools with spacing, closed SPA, canceled housekeeping service (they rely on an external company, and clean only after check out), restaurant "the terrace. " closed
I believe that there is absolutely no need to pay the 2020 quotas, also because, like ALL European companies, they have received aid from the Spanish country
 

pafort

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[QUOTE = "dioxide45, publicación: 2446103, miembro: 12397"]
No alquila una habitación durante una semana, es dueño de una parte de una unidad de condominio. Si hubiera sido dueño de una casa de vacaciones, los costos de mantenimiento no desaparecerían debido a la situación actual.
[/ CITAR]
I am not the owner of the resort, I am the owner of a right of use
 

bazzap

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[QUOTE = "bazzap, publicación: 2446091, miembro: 39950"]
Porque todos somos propietarios de los resorts.
Tienen importantes costes operativos, de mantenimiento y probablemente también de mejora del proyecto incluso durante el cierre.
[/CITAR]
And instead, to give an example, Marriott Son Antem is completely abandoned: dry golf courses, swimming pools with spacing, closed SPA, canceled housekeeping service (they rely on an external company, and clean only after check out), restaurant "the terrace. " closed
I believe that there is absolutely no need to pay the 2020 quotas, also because, like ALL European companies, they have received aid from the Spanish country
Several owners we know are staying at Club Son Antem now.
It is certainly different with Covid-19 restrictions and facilities are limited.
The cleaning between guest stays and during multi week stays has been considerably enhanced though, taking
2-3 hours per townhouse.
The pools in the mainly occupied roads are open with lifeguards and they are being cleaned regularly.
The MarketPlace is open 24x7
The Terrassa restaurant is offering takeaway meals
The Finca restaurant is open on a number of days during the week
The West golf course is open, as I understand it
The East golf course is under maintenance
So it is not an ideal situation, but nothing really is anywhere just now. They are trying to offer as nany services and facilities as they can though.
We own 5 weeks there, so I would welcome a refund of my Maintenance fees for not being able to enjoy our usual stays, but that is unrealistic and will never happen.
As with all of our MVC resort weeks, we have had to cancel and deposit our weeks with Interval or if we had booked using points from our enrolled elected weeks we have banked those for future years.
I wish there were a different solution, but this is definitely better than just losing all of our weeks.
 
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Dean

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[QUOTE = "bazzap, publicación: 2446091, miembro: 39950"]
Porque todos somos propietarios de los resorts.
Tienen importantes costes operativos, de mantenimiento y probablemente también de mejora del proyecto incluso durante el cierre.
[/CITAR]
And instead, to give an example, Marriott Son Antem is completely abandoned: dry golf courses, swimming pools with spacing, closed SPA, canceled housekeeping service (they rely on an external company, and clean only after check out), restaurant "the terrace. " closed
I believe that there is absolutely no need to pay the 2020 quotas, also because, like ALL European companies, they have received aid from the Spanish country
If you don't pay, they will hold you delinquent, lock your account and eventually foreclose. I can't speak to any government help they've received but if so and directly to the resort, that should offset any costs/fees, no more or less. There are no guarantee of there other services, even the pool could have been closed for maintenance during a normal stay.
 

pafort

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Estuve 2 semanas en agosto, de 9 a 24 ...
a pesar de ser propietario en Marbella y Paris, vivir en Barcelona me encanta Son Antem. Ver los campos de golf secos es un verdadero dolor; la piscina grande está abierta y hasta te dan botellas de agua.

Desde 2006 que me incorporé al MVC, habré pasado 40/50 semanas en Son Antem.
Como he dicho, viviendo en España soy consciente de las ayudas que se han dado a los operadores turísticos, así como a los trabajadores de limpieza externos, especialmente mujeres árabes, a los jardineros, muchos si no todos jóvenes negros; el gobierno español pagó 3 meses de desempleo.
Por esta razón creo que en 2021, la participación de MF no debería ser superior al 20%.

La Finca no es propiedad de Marriott, sino del mallorquín que vendió el terreno a Marriott en la década de 1990, manteniendo la propiedad del hotel (gestión no renovada después de 20 años ....). Está abierto de miércoles a domingo.
pero repito, a pesar de todo, pasé 15 días maravillosos.
Vivir Mallorca sin turistas, parecía estar en los 70: un auténtico lujo
 
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TXTortoise

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Google Translate>>>

I was 2 weeks in August, from 9 to 24 ...
Despite being an owner in Marbella and Paris, living in Barcelona I love Son Antem. Seeing the dry golf courses is a real pain; the large pool is open and they even give you bottles of water.

Since 2006 when I joined the MVC, I will have spent 40/50 weeks in Son Antem.
As I have said, living in Spain I am aware of the aid that has been given to tour operators, as well as external cleaning workers, especially Arab women, gardeners, many if not all young blacks; the Spanish government paid 3 months of unemployment.
For this reason I believe that in 2021, MF's share should not exceed 20%.

La Finca is not owned by Marriott, but by the Mallorcan who sold the land to Marriott in the 1990s, keeping the property of the hotel (management not renewed after 20 years ...). It is open from Wednesday to Sunday.
but I repeat, despite everything, I spent 15 wonderful days.
Living Mallorca without tourists, it seemed to be in the 70s: a real luxury


Estuve 2 semanas en agosto, de 9 a 24 ...
a pesar de ser propietario en Marbella y Paris, vivir en Barcelona me encanta Son Antem. Ver los campos de golf secos es un verdadero dolor; la piscina grande está abierta y hasta te dan botellas de agua.

Desde 2006 que me incorporé al MVC, habré pasado 40/50 semanas en Son Antem.
Como he dicho, viviendo en España soy consciente de las ayudas que se han dado a los operadores turísticos, así como a los trabajadores de limpieza externos, especialmente mujeres árabes, a los jardineros, muchos si no todos jóvenes negros; el gobierno español pagó 3 meses de desempleo.
Por esta razón creo que en 2021, la participación de MF no debería ser superior al 20%.

La Finca no es propiedad de Marriott, sino del mallorquín que vendió el terreno a Marriott en la década de 1990, manteniendo la propiedad del hotel (gestión no renovada después de 20 años ....). Está abierto de miércoles a domingo.
pero repito, a pesar de todo, pasé 15 días maravillosos.
Vivir Mallorca sin turistas, parecía estar en los 70: un auténtico lujo
 

Dean

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I was 2 weeks in August, from 9 to 24 ...
Despite being an owner in Marbella and Paris, living in Barcelona I love Son Antem. Seeing the dry golf courses is a real pain; the large pool is open and they even give you bottles of water.

Since 2006 when I joined the MVC, I will have spent 40/50 weeks in Son Antem.
As I have said, living in Spain I am aware of the aid that has been given to tour operators, as well as external cleaning workers, especially Arab women, gardeners, many if not all young blacks; the Spanish government paid 3 months of unemployment.
For this reason I believe that in 2021, MF's share should not exceed 20%.

La Finca is not owned by Marriott, but by the Mallorcan who sold the land to Marriott in the 1990s, keeping the property of the hotel (management not renewed after 20 years ...). It is open from Wednesday to Sunday.
but I repeat, despite everything, I spent 15 wonderful days.
Living Mallorca without tourists, it seemed to be in the 70s: a real luxury
Thanks for the translation, couldn’t get it done using the ipad today.

Pafort, you didn’t chronicle any payments direct to the resort or Marriott and I’m not sure that anything you mentioned would even indirectly reduce the costs of managing the resort or not. Regardless, at the end of the day, whatever the resort costs to run is what the owners will have to pay even if it was not available or had reduced services. Of course the golf course, any restaurants and the like should be separate issues not directly related to the resort fees.. If there are savings because of the supports you mentioned, it should offset fees but if the other costs are higher, fees will still go up. BTW, they did in 2008-2010 and with 9/11 as well where applicable even though many lost their jobs and some other costs went down. This is the way ownership works, it’s just with a timeshare you spread the costs over a larger group but you have an even smaller vote. In addition the BOD is tasked with anticipating and planning and some of those things have costs as well.
 
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SonAntemOwner

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Estuve 2 semanas en agosto, de 9 a 24 ...

Por esta razón creo que en 2021, la participación de MF no debería ser superior al 20%.

It is clear that there are savings on operations in 2020 but there are also increased costs for extra cleaning and safety.
Any savings on operations in 2020 will be carried over to 2021 and thus mean a reduced maintenance fee.
The big unknown is how many weeks where no maintenance fee has been paid. Normally, MVCI will rent out those weeks after which they will revoke weeks and sell them again. Rental income will normally cover unpaid maintenance fees but as there will probably not be much rental in 2020, the HOA may have to cover unpaid maintenance fee which may lead to a drastic reduction in savings.
Any losses related to golf and restaurant are not covered by HOA


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