Maintenance Fee Increases - What should we do to bring these down?

[DRH90277]

I don't think any of us as timeshare owners know the extent to which we are charged for the personnel who may serve the interests of VAC, the public company. I doubt the BOD's of the individual timeshares even look at this. My point in all this is that we don't know and will probably never know.

In a business there would be pressure applied to properly align expenses with revenues for the benefit of the owners/shareholders. I see no evidence of this in the relationship between MVC and those they serve as timeshare/point owners - I think it is too easy to just increase MF's thinking we will accept them. It might be like government; they spend until they run out of other people's money.

The 50% decline in the stock price of VAC stock over the past year might be a sign of trouble ahead. Hang onto your wallet.

 

[SueDonJ]

I don't think any of us as timeshare owners know the extent to which we are charged for the personnel who may serve the interests of VAC, the public company. I doubt the BOD's of the individual timeshares even look at this. My point in all this is that we don't know and will probably never know.

In a business there would be pressure applied to properly align expenses with revenues for the benefit of the owners/shareholders. I see no evidence of this in the relationship between MVC and those they serve as timeshare/point owners - I think it is too easy to just increase MF's thinking we will accept them. It might be like government; they spend until they run out of other people's money.

The 50% decline in the stock price of VAC stock over the past year might be a sign of trouble ahead. Hang onto your wallet.

While I fully expect Marriott to approach resort budgets with an eye on their Management Fees as well as resort enhancements that will bring new buyers (customers) to the table, and I know that Marriott delivers the budgets to the individual resort BOD's for approval, I don't think that the individual resorts all rubber-stamp what's given to them and I don't think that Marriott has unfettered reign to jack the services/amenities/costs to infinity and beyond. They - the budgets and the company - are subject to professional audits on a routine basis and any blatant overages would at least be questioned, if (as I expect) the professionals who perform the audits are acting correctly in their scope.

 

[Hindsite]

I don't think any of us as timeshare owners know the extent to which we are charged for the personnel who may serve the interests of VAC, the public company. I doubt the BOD's of the individual timeshares even look at this. My point in all this is that we don't know and will probably never know.

It may be a question of degree of "knowing".
I certainly understand the breakdown of maint fees for the resorts that I own at, as that is published in the accounts and I read them.
I also know that there is more on site than is covered by maint fees and I discuss that with management when I am on site to verify for myself that there is no systemic "bleeding" of maint fees into other areas. I also make it clear that I do not want to pay for further populist frills that are not part of my contract.
From reading the notes from the owner board meeting, and my discussions with the management team, I know that owners do put pressure on the resort management team to align the revenue and costs and they also dig into the details, often more that I feel is value added.
Where I have questions I contact the owner board members and ask for them to address it. They do seem to take it forward.
I completely disagree with your assertion that BODs don't look at this. All my experience is that they most certainly do and I am very, very grateful that the individuals use their own time to work for my interest.
If you have taken the time to inform yourself on the particulars of your resort ownership and found the BoD lacking then by all means work to rectify that, but please do not presume that others do not more than pull their weight or do a great job for all of us.
Could things be better? Possibly, but the level of effort I would need to put in to achieve that is more than I find worthwhile.
I see no direct relevance in the VAC shareprice for owners. It is good to have a healthy corporate undertaking the management role, but the capital markets run to a different beat to resort management and multi-decade maintenance and development. I fully expect that MVC employees support the interests of their employers, that is quite normal in business, and does not mean that it runs counter to the interests of owners. All the employees that I have met and spoken with seem to go well out of their way to deliver excellent service.
Ultimately as long as I find the experience on resort pleasant and my costs for vacation lodging remain below that which I could achieve by other means, I'm delighted with ownership. If that changes then I'll review, adapt and divest as needed. I've had great value for decades and expect that to continue.

 

[dioxide45]

While I fully expect Marriott to approach resort budgets with an eye on their Management Fees as well as resort enhancements that will bring new buyers (customers) to the table, and I know that Marriott delivers the budgets to the individual resort BOD's for approval, I don't think that the individual resorts all rubber-stamp what's given to them and I don't think that Marriott has unfettered reign to jack the services/amenities/costs to infinity and beyond. They - the budgets and the company - are subject to professional audits on a routine basis and any blatant overages would at least be questioned, if (as I expect) the professionals who perform the audits are acting correctly in their scope.

To what level do those audits go? I don't know, so if someone does, perhaps they can answer. I doubt they look at things like :did they need five people to do a job that could be done by four:, or did they really need to buy that big screen TV by the pool. I suspect auditors are just making sure the numbers jive and there isn't money being syphoned away somewhere due to fraud.

As for the resort budgets and how much control the BOD has. Marriott is the one preparing the budget and brining it to the board for approval. I haven't been to a BOD meeting in a few years, but the ones when I was there I didn't see a lot of pushback. Did Grande Vista really need to spend millions of dollars for tile in the hallways that would never make financial sense vs repainting them as needed or installing a cheaper product that holds up almost the same. Probably not, but they spent it anyway because that was the advice of Marriott. Same with the $200,000 big screen tv by the pool. We did just fine without it for many years and I suspect it was added to help prop up survey numbers, or there was a bunch of money they needed to spend or they would have to cut the budget for next year. Of course $20,000 went to Marriott in the form of management fees just because they asked the board to install one.

Resorts need to start looking at 6 year refurbishment cycles to bring costs down, or at least stop them from going up at the current rates. 6 year cycles would instantly save 20% on renovation costs. I just watched a video from this year of Harbour Lake 2BR villa tour and it looked fantastic. It was last renovated in 2020. Our most recent newsletter was talking about how they are working on the next soft goods for 2025 and going with a Key West theme again. WTF. Soft goods should just be paint touchups or repaint if needed, new carpet and perhaps new furniture and bedding. We don't need new artwork and the draperies will probably work just fine. We don't need to repaint everything for a different color.

Here is what the fall 2023 Harbour Lake newsletter says about renovations in 2025;
We continue to move forward with the planned refurbishment of buildings 14, 15, 30 and 31. This exciting action plan will replace all the soft goods for these buildings (currently planned for 2025) and return the villas to the original ‘Key West’ theme. At the fall meeting, the board reviewed the proposal from Design Poole, the firm who did such great work on the front desk area in the key house, the new conference room and multi-purpose room in the same building.

Why do we need a new design along with costs associated with a new interior designer? It is a soft goods refurb, we shouldn't be changing the design. It seems that MVC is trying to suck costs associated with a full refurb every five years.

 

[Hindsite]

did they really need to buy that big screen TV by the pool.

Completely agree, it happens a lot across resorts. There has been some debate about the quality and sophistication of kitchen appliances for one of my ownerships and the diversity of views from owners is staggering.
The recent microwave replacement is 2 dials, power and time. Much to my relief, I no longer have to learn how to programme the device or randomly stab buttons, just to nuke dinner. Other owners confessed to not even knowing that there was a microwave as they don't go on vacation to cook while others expressed frustration that they could not programme it down to the accuracy of 1 second. The inadequate number of shelves in the replacement fridge has also been a pain point for some and loungers also seem to vex many.
Faced with the above I am thankful that there is a management team that make a call, any call, to find a path through and take the associated grief. I don't know where the cost/benefit point is for appliance selection, and possibly the management have taken the view to vary it in each replacement cycle.
I've decided that I may need to pay for facilities that I find pointless (spa tubs in units) as long as there is enough elsewhere that suits me. If I wanted absolute control over the environment and responsibility for defining and managing it I'd have bought a vacation home. With my ownership I can get vastly better facilities that I like without the need to go to the personal effort of maintaining it, at a cost that is comparable with what I would pay for less facilities.

 

[Superchief]

We have owned MVC resorts since Royal Palms opened in the 80's, and now own at 6 resorts plus 2500 VC points. The MF increases were at or below inflation for the first several years. The increases in recent years have far exceeded inflation and are causing us to have concerns about MVC and resort management. Since we own several Gold and one Silver weeks, our MF cost per VC point is higher than the trust point cost. It also appears that MVC is actually trying to drive the MF's at our 'Value' resorts to exceed the trust point cost. Ocean Pointe and Mountainside were our two best resorts for cost per point, but now both are higher than the trust point cost.

Enrolled owners of platinum weeks continue to get great point value for their weeks, so are likely less likely to sell or deed their weeks back to MVC as MF's increase. Therefore, MVC will be more likely to be adding primarily lesser value week /points to the trust. This will drive up their costs and is likely why the MF's for trust points increased more than in the past. If MVC continues to aggressively take advantage of owners, more of us will be getting rid of weeks that aren't worth the cost. I plan to find every social media and pool conversation opportunity I can to inform potential MVC buyers of corporate's increasingly greedy practices. If we can spread the word and reduce their revenue, perhaps they will recognize that unhappy owners will start impacting their bottom line.

 

[timsi]

I believe that if we do not start asking more specific questions, we will continue to receive general answers that lack meaning. The Board of Directors should be equipped with detailed responses on various topics. I am confident that others can contribute to these inquiries.



Revenue



A) Bank/Investment Interest and Maintenance Fee Interest Income

Is the income received in line with the current rates for high savings accounts?



B) Club Rental Revenue

What is the number of units rented, and what formula is used to calculate the revenue?





C) Maintenance Fee Reimbursement

Is Marriott reimbursing us the maintenance fees for the units that are not reserved but are rented by them? (not owned/ controlled by them, just unreserved) Are we receiving fair revenue from delinquent units taken over by the HOA and available for rent?







Expenses



A) Administration

Can they provide a detailed explanation of what falls under administration expenses?



B) Bad Debt Expense

Are we indirectly subsidizing Marriott's acquisition of inventory?



C) Common Assessment

Is Marriott utilizing separate lines and paying for telephone, internet, electricity, insurance, postage, printing, and other utilities? Is there proof for each resort that they do not use any of our resources? Are they paying a fair market value for the spaces they occupy at our resorts (restaurants, sales offices, concierges, etc.)?



D) Housekeeping

Do Bonvoy and Sales tour guests receive daily housekeeping, and if so, does Marriott reimburse us for the additional cleaning? If yes, at what rate?



E) Concierge Services

Who pays for concierge services? If we cover the cost, why do concierges seem more focused on arranging sales meetings than other guest services, leading some guests to feel harassed?



F) Credit Card Fees

Do we incur fees for Bonvoy and Sales Tour guests? Shouldn't Marriott cover these fees from their rental/restaurant revenue?



G) Reserve Funds Management

We hold substantial reserves for each resort. How are these reserves managed, and what fees do we incur for maintaining these accounts?

 

[Steve Fatula]

It may be a question of degree of "knowing".
I certainly understand the breakdown of maint fees for the resorts that I own at, as that is published in the accounts and I read them.
I also know that there is more on site than is covered by maint fees and I discuss that with management when I am on site to verify for myself that there is no systemic "bleeding" of maint fees into other areas. I also make it clear that I do not want to pay for further populist frills that are not part of my contract.
From reading the notes from the owner board meeting, and my discussions with the management team, I know that owners do put pressure on the resort management team to align the revenue and costs and they also dig into the details, often more that I feel is value added.
Where I have questions I contact the owner board members and ask for them to address it. They do seem to take it forward.

I have the same experience at Desert Springs, I question things and even talk on the phone at time to BOD members. They do seem quite receptive and interested for sure, they definitely do not rubber stamp things. I certainly don't like increases though. But, when they break down the expenses more than the meeting notes show, it actually makes sense sometimes. If one cares about their MF, they should definitely pursue it with their BOD and get active if need be or unsatisfied.

 

[DanCali]

While I fully expect Marriott to approach resort budgets with an eye on their Management Fees as well as resort enhancements that will bring new buyers (customers) to the table, and I know that Marriott delivers the budgets to the individual resort BOD's for approval, I don't think that the individual resorts all rubber-stamp what's given to them and I don't think that Marriott has unfettered reign to jack the services/amenities/costs to infinity and beyond.

What's been going on the past 2 cycles lends a lot more credibility to the line exit companies constantly use - "why give your timeshare resort a blank check?"

Obviously lots of scammers in that industry but these days it certainly FEELS like they have are making a good point...

 

[bazzap]

There may be other factors in play, not least the relative remoteness from the US and as a result a greater level of independence and a good collaborative relationship with the local resort management team…
It can be no real coincidence though that at Phuket Beach Club several of us as Tuggers have been BOD members / chairmen at different times for much of the life of this resort and MFs are amongst the very lowest in MVC worldwide with increases normally around local inflation rates or lower (3.5% in 2024, as just confirmed in this Forum) whilst the standards and quality continue to be rated very highly by owners.
Long may this continue and hopefully at other resorts too.

 

[Bucky]

Like what another already posted, it is what it is! Every year when MF come out these type of posts pop up. Many vent their frustrations. Nothing unusual. You have a few options: suck it up since everybody should have been well aware how MF’s worked before signing on the dotted line, or selling/giving back their unit if they cannot afford it. All I know is I will keep my units until Renting them won’t cover the MF and then I’ll move on.