• The TUGBBS forums are completely free and open to the public and exist as the absolute best place for owners to get help and advice about their timeshares for more than 30 years!

    Join Tens of Thousands of other Owners just like you here to get any and all Timeshare questions answered 24 hours a day!
  • TUG started 31 years ago in October 1993 as a group of regular Timeshare owners just like you!

    Read about our 30th anniversary: Happy 31st Birthday TUG!
  • TUG has a YouTube Channel to produce weekly short informative videos on popular Timeshare topics!

    Free memberships for every 50 subscribers!

    Visit TUG on Youtube!
  • TUG has now saved timeshare owners more than $23,000,000 dollars just by finding us in time to rescind a new Timeshare purchase! A truly incredible milestone!

    Read more here: TUG saves owners more than $23 Million dollars
  • Sign up to get the TUG Newsletter for free!

    Tens of thousands of subscribing owners! A weekly recap of the best Timeshare resort reviews and the most popular topics discussed by owners!
  • Our official "end my sales presentation early" T-shirts are available again! Also come with the option for a free membership extension with purchase to offset the cost!

    All T-shirt options here!
  • A few of the most common links here on the forums for newbies and guests!

How are the maintenance fees going to be impacted?

DannyTS

TUG Member
Joined
Mar 24, 2018
Messages
5,753
Reaction score
3,076
With the announced furloughs, resorts closures, I am wondering how the maintenance fees are going to be impacted. Any thoughts?
 

andysnovel

TUG Member
Joined
Aug 18, 2008
Messages
218
Reaction score
102
Location
Clayton, NC
Resorts Owned
Sheraton Flex, Vistana Bella Section, BlueGreen Charleston,SC
Maint payments are going to take a big hit, folks out of work etc. Reduced rental income etc.
 

Luanne

TUG Review Crew: Expert
TUG Member
Joined
Jun 6, 2005
Messages
19,749
Reaction score
10,604
Location
New Mexico
Resorts Owned
Maui Lea at Maui Hill
San Diego Country Estates
My thought is that maintenance fees will continue to be collected.
 

bankr63

TUG Review Crew
TUG Member
Joined
Apr 5, 2009
Messages
556
Reaction score
101
Location
Ottawa, ON, Canada
Resorts Owned
Vistana Resort Orlando (2BR, Deeded Wk10) , Silver Lake Resort Orlando (3BRLO)
Overall, I would expect them to go down a bit. With staff layoffs, the overall costs of maintaining the resort should be reduced for the year. Loss of rental income shouldn't make any difference, Vistana has to compensate for the MF for the units they hold just like any other owner; they should not penalize us for their not being able to rent their holdings. I don't expect Vistana to compensate me for the last minute cancellation of the rental we had lined up for our VOI last week.
 

ski_sierra

TUG Member
Joined
Mar 17, 2019
Messages
517
Reaction score
330
Location
SF Bay Area
Resorts Owned
Too many
I'm curious what is going to happen but I am not sure Vistana has any incentive to reduce the MF. I doubt they will make efforts to reduce MF as that reduces their management fee. They need it more than ever at a time when their revenues from timeshares sales are going to take a hit. Not much we can do about it. I hope Vistana proves me wrong by finding out ways to reduce MF.
 

bankr63

TUG Review Crew
TUG Member
Joined
Apr 5, 2009
Messages
556
Reaction score
101
Location
Ottawa, ON, Canada
Resorts Owned
Vistana Resort Orlando (2BR, Deeded Wk10) , Silver Lake Resort Orlando (3BRLO)
Our MF's aren't set by Vistana, they are set by the HOA (which I admit is largely controlled by Vistana). However, the MF's are set based on actual expenses to operate, so if we DON'T see a significant reduction on the wages and salaries line we should be VERY suspicious. Now they might swallow some of that back in extra cleaning, which hopefully they are doing. I would like to think that some of that staff is reassigned to different roles that come up during a crisis like this.
 

ski_sierra

TUG Member
Joined
Mar 17, 2019
Messages
517
Reaction score
330
Location
SF Bay Area
Resorts Owned
Too many
Our MF's aren't set by Vistana, they are set by the HOA (which I admit is largely controlled by Vistana).

yeah.. I don't even waste my time in writing that MFs are set by HOA since the boards are controlled by Vistana. I use the short form method of saying fees are set by Vistana.
 

DannyTS

TUG Member
Joined
Mar 24, 2018
Messages
5,753
Reaction score
3,076
I'm curious what is going to happen but I am not sure Vistana has any incentive to reduce the MF. I doubt they will make efforts to reduce MF as that reduces their management fee. They need it more than ever at a time when their revenues from timeshares sales are going to take a hit. Not much we can do about it. I hope Vistana proves me wrong by finding out ways to reduce MF.
Many costs are fixed, others will probably go down naturally like labor, utilities, cleaning, owner services. I am curious if some resorts, if permitted in the area, will take advantage of this period to update units and do other maintenance work that would otherwise be a nuisance to the guests.
 
Last edited:

VacationForever

TUG Review Crew
TUG Member
Joined
Dec 5, 2010
Messages
16,996
Reaction score
12,052
Location
Somewhere Out There
a lot of resorts reported reduced working hours for the staff even before being closed. Many costs are fixed, others will probably go down naturally like utilities, cleaning, owner services. I am curious if some resorts, if permitted in the area, will take advantage of this period to update units and do other maintenance work that would otherwise be a nuisance to the guests.
This sort of maintenance work is considered non-essential during Shelter-in-place.
 

DannyTS

TUG Member
Joined
Mar 24, 2018
Messages
5,753
Reaction score
3,076
This sort of maintenance work is considered non-essential during Shelter-in-place.
right but the country may open the restrictions gradually depending on the area
 

DannyTS

TUG Member
Joined
Mar 24, 2018
Messages
5,753
Reaction score
3,076
My guess is that a lot of MFs won't be paid. Either a lack of funds or lack of desire to travel...

George
I wish we had an " I agree" 1585269447140.pngemoji on Tug. I agree with comments like yours but I do not like the fact that it may happen so the "like" sign may not be the most appropriate
 
Last edited:

DannyTS

TUG Member
Joined
Mar 24, 2018
Messages
5,753
Reaction score
3,076
When that happens, vacationers will be back...
Yes and no. Some areas may open faster than planes going back to the regular schedules. I guess a lot of maintenance can be done with resorts at 30-50% occupancy. I am not saying they should do things just to keep people busy but some maintenance and projects might have been postponed waiting for the "right" moment
 

ocdb8r

TUG Member
Joined
Jan 10, 2008
Messages
1,648
Reaction score
889
Have we seen any evidence that MVC/Vistana/HGVC Timeshare resorts are laying people off? I say this because unlike hotel operations, MVC is a) incentivized to keep staff on as most of their management contracts calculate their fee based on the resort's overall budget and b) timeshare resorts will not suffer the same lack of cash to pay resort employees as maintenance fees are being collected regardless (now, I admit, there will be some impact on revenue from ancillary services). I personally haven't seen anything reported either way so I'm genuinely curious if anyone has seen anything specific to timeshare resort layoffs (and I'm not talking developer and/or sales staff).

I think there's a decent probability maintenance fees increase as expenses are kept fairly flat (or with very minimal reduction) and "bad debt" (those not paying/defaulting on MFs) increases.
 

DannyTS

TUG Member
Joined
Mar 24, 2018
Messages
5,753
Reaction score
3,076
Have we seen any evidence that MVC/Vistana/HGVC Timeshare resorts are laying people off? I say this because unlike hotel operations, MVC is a) incentivized to keep staff on as most of their management contracts calculate their fee based on the resort's overall budget and b) timeshare resorts will not suffer the same lack of cash to pay resort employees as maintenance fees are being collected regardless (now, I admit, there will be some impact on revenue from ancillary services). I personally haven't seen anything reported either way so I'm genuinely curious if anyone has seen anything specific to timeshare resort layoffs (and I'm not talking developer and/or sales staff).

I think there's a decent probability maintenance fees increase as expenses are kept fairly flat (or with very minimal reduction) and "bad debt" (those not paying/defaulting on MFs) increases.
we shall see about the bad debt, most resort MF were paid in January so they should not be very different this year. 2021 is another story but I am not sure if that is reflected next year in the budget, maybe only in 2022. What is interesting in this business, when everything (eventually) normalizes, MVC would have acquired a lot of free inventory and be in a position to make a lot of money by selling it.

Many resorts are either closed or run at 20% capacity. The ones that are still open operate with a reduced staff (comments on FB) but I do not know the level for each. I agree with you though that MVC has an incentive to keep the expenses high but I just do not see how they can justify the same budget when the resort is almost empty or closed.
 
Last edited:

ocdb8r

TUG Member
Joined
Jan 10, 2008
Messages
1,648
Reaction score
889
we shall see about the bad debt, most resort MF were paid in January so they should not be very different this year. 2021 is another story but I am not sure if that is reflected next year in the budget, maybe only in 2022. What is interesting in this business, when everything (eventually) normalizes, MVC would have acquired a lot of free inventory and be in a position to make a lot of money by selling it.

Many resorts are either closed or run at 20% capacity. The ones that are still open operate with a reduced staff (comments on FB) but I do not know the level for each. I agree with you though that MVC has an incentive to keep the expenses high but I just do not see how they can justify the same budget when the resort is almost empty or closed.

Agreed, I wouldn't expect any effects of bad debt until next year...and it will slowly materialize. It will be curious to see how much (if any) inventory MVC picks up. I would suspect they are in cash conservation mode and will be waiving most ROFRs. They will pick up any defaults on loans, but that has as much a cost to them as a benefit to inventory. Defaults on MFs don't automatically go back to MVC - the HOA Board often has some discretion on how to deal with these (resell themselves, resell via MVC or sell back to MVC)....and whatever they may want to do, MVC also has to agree (meaning if they're still short on cash, they may not offer to pick up much).

On the resorts, just because they're closed or running at near nil capacity, doesn't mean MVC has to lay off or stop paying the employees...Disney is paying all hourly employees until at least mid-April while the parks are closed. My point is, with little incentive to reduce costs and no cash shortage (as the resort HOAs are paying the staffing bills from MFs), nothing stopping MVC from keeping payroll as normal. If this continues for a long sustained period, they may get pressure from HOA Boards to reduce costs, but if we're only talking about two-three months, I suspect they can explain their way out of not making any big changes.
 

DannyTS

TUG Member
Joined
Mar 24, 2018
Messages
5,753
Reaction score
3,076
Agreed, I wouldn't expect any effects of bad debt until next year...and it will slowly materialize. It will be curious to see how much (if any) inventory MVC picks up. I would suspect they are in cash conservation mode and will be waiving most ROFRs. They will pick up any defaults on loans, but that has as much a cost to them as a benefit to inventory. Defaults on MFs don't automatically go back to MVC - the HOA Board often has some discretion on how to deal with these (resell themselves, resell via MVC or sell back to MVC)....and whatever they may want to do, MVC also has to agree (meaning if they're still short on cash, they may not offer to pick up much).

On the resorts, just because they're closed or running at near nil capacity, doesn't mean MVC has to lay off or stop paying the employees...Disney is paying all hourly employees until at least mid-April while the parks are closed. My point is, with little incentive to reduce costs and no cash shortage (as the resort HOAs are paying the staffing bills from MFs), nothing stopping MVC from keeping payroll as normal. If this continues for a long sustained period, they may get pressure from HOA Boards to reduce costs, but if we're only talking about two-three months, I suspect they can explain their way out of not making any big changes.
For the US resorts, would they not apply for the government money like everyone else? I do not pretend I know the details of the bill that just past but that may be a contributing factor as well in their budget for the next 4 months. Seeing how the market reacted to their stock (60% up from the low, although a long way to where it was 2 months ago), I have a feeling that there is something for them in that bill.
 

goaliedave

Guest
Joined
Jan 5, 2019
Messages
1,298
Reaction score
855
Resorts Owned
Raintree, Diamond (bought by Hilton), Shell (bought by Wyndham), Sheraton (bought by Marriott), Palace Resorts, a few independants
Increase due to lost profits and more defaults.

Sent from my SM-A505G using Tapatalk
 

okwiater

TUG Member
Joined
Mar 9, 2010
Messages
1,714
Reaction score
276
Resorts Owned
WKV 2B Plat+ (x2)
WSJ 3B Plat+ (VGV/BV)
WLR 2B Plat+ Oceanside
SMV 2B Plat+
Sheraton Flex (x2)
With the new bills that passed, Vistana should be able to keep everyone employed, and take large portions of those wages as employment tax credits.

the trick is ensuring those tax credits flow through to the HOA to reduce maintenance fees.
 

Sea Six

TUG Member
Joined
Oct 15, 2005
Messages
4,045
Reaction score
872
Location
Marco Island, FL
Resorts Owned
Club Regency - Marco Island
Lagunamar - Cancun
Vistana Villages Key West (2) - Orlando
I would like to see the fees go down a bit based on reduced costs. Also let the landscaping get a little rough instead of daily manicuring.
 
Top