Our MF's aren't set by Vistana, they are set by the HOA (which I admit is largely controlled by Vistana).
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.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.
This sort of maintenance work is considered non-essential during Shelter-in-place.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.
right but the country may open the restrictions gradually depending on the areaThis sort of maintenance work is considered non-essential during Shelter-in-place.
When that happens, vacationers will be back...right but the country may open the restrictions gradually depending on the area
What about using a sad face?I wish we had an "agreed" emoji on Tug. I agree with comments like yours I do not "like" the fact that it may happen
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" momentWhen that happens, vacationers will be back...
not the sameWhat about using a sad face?
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.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.
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.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.