Royal Mayan News - Onsite Owners called to Special Meeting

[gdeluca]

Our friends called yesterday from the Royal Mayan and told us they had received a voice mail requesting their attendance at a special "owners only" meeting the following day.

At the meeting they were told that the developers were not going to bid on the property at the expiration of the lease. They said that they were already getting bids so high that it would not be a practical business decision to keep the Royal Mayan intact and that more than likely a highrise building would be built in its place. They stated an email would be going out in the near future to all Royal Mayan owners with more details.

They also stated they are building fractional ownership residences in Puerto Moreles in the near future.

Distressing news to me because that is my favorite Royal and I have been going there since I was in my early 20s.

Anyone else hear anything?

 

[neash]

But why would they release news like this now, 5 years before the actual end of lease term.
Somehow, does not sound right to me.

 

[jlhemenway]

We just returned from 2 weeks at the Mayan, and also heard the same from some long term "Tri-Royal " employees. They said would be torn down and rebuilt and sold as "Fractional Timeshares". ALSO it really does not have 5 total years left. Owmership ends Dec. 2012 - does not extend into the year 2013.

 

[buceo]

I've had the new Royal projects describes this way:

Grand Residences by Royal Resorts will be announced on June 21, initially by private viewing to members leaving a $10,000 refundable deposit. One month later all other members can view it. Full time ownership and quarter shares in Riviera Morelos and Cabo Cortes. A 1 billion dollar investment by Royal Resort.

Can anybody explain the difference between a "fractional ownership" and a timeshare with residuals? I get the feeling fractionals are a larger purchase, typically many weeks. Must be more lucrative than selling "timeshares"?

 

[x3 skier]

Can anybody explain the difference between a "fractional ownership" and a timeshare with residuals? I get the feeling fractionals are a larger purchase, typically many weeks. Must be more lucrative than selling "timeshares"?

Fractionals are usually deeded 1/4 or 1/8 shares. The "standard" arrangement is one week a month or every other month. I own one in Steamboat and use the off season week(s) for trading and rent the others or use for guests who are visiting.

Check this thread for a primer http://www.tugbbs.com/forums/showthread.php?t=48645

Cheers

 

[gdeluca]

The way it was told to our friends at the meeting, the Royals would not be the ones building on the site. Instead they are, as posted above, building residences in Puerto Moreles (and Cabo Cortes). Fractional was being touted as being able to buy at least one month. I like the sound of that, but at what cost? One of the members at that meeting was a financial advisers and did some quick calculating. While not knowing the particulars of fees, etc. he said it may be possible for RM owners to receive not only their full residual, but an additional 10k to 20k. Of course, we shall see about that once RR lists all of its costs and what not.

 

[jschmidt]

ALSO it really does not have 5 total years left. Owmership ends Dec. 2012

The trust expires at the end of December 2013, which means there are approximately 5-1/2 years remaining.

 

[pjrose]

I would just hate to see the Mayan (and presumably then the other two Tris) torn down. How sad.....
I hope that's not what happens.......

 

[Blue Skies]

I just read about the Mayan not being renewed on the owner's message board at www.royalresorts.com I wasn't sure whether to belive it or not.

A few months ago, we participated in an email survey from Royal Resorts regarding our interest in fractional ownership if Royal Resorts would build in Playa del Carmen, Puerto Vallarta or Cabo. It was a rather lengthy survey.

The new Pelican Marina Residences in St Martin is being sold as fractional ownership.

It sounds like this is the direction they are going with some of their new construction.

 

[jschmidt]

he said it may be possible for RM owners to receive not only their full residual, but an additional 10k to 20k.

This number will change many times over the next 5-1/2 years as we sit by the palapa bar and discuss it over a cervesa or two. I know! We did the same thing at VCI as the end drew near. At least we know that the operation will be sold outright to a new developer. Hopefully we will get our payout in one payment.

 

[Riggo]

Is it definite that the Royal Mayan will not be renewing? Five years out seems way too early to be making such announcements. Does anyone have any hard evidence or is this only rumor?

 

[Ellis2ca]

Money makes the world go 'round

Is it definite that the Royal Mayan will not be renewing? Five years out seems way too early to be making such announcements. Does anyone have any hard evidence or is this only rumor?

Nothing is definite in this world, and less, if we try to predict what is going to happen in 5 years.... but... to illustrate the example:

Supposing they are getting offers for the land for... say... ten billion dollars...

And suppose there are 400 x 50 week-Villas at the Royal Mayan... That is 20,000 Villa weeks.

That would mean that if they renew, then the value of the LAND for each villa week is $500,000 dollars... (10,000,000,000 / 20,000)

The owners get half of the 10 billion dollars in the example, if they sell out...

And the new developers could then say to us: We can sell your villa back to you for $500,000 or else we tear it down and we build 200,000 Villa-weeks on the same land, and we sell them for $50,000 each... If enough owners don't accept to pay $500,000 per week, we have to tear it down and build 200,000 villa weeks.

What would YOU do? Would you PAY $500,000 for your Villa week, or would you take $250,000 ?

=================
NOTE: I predict there will be FIGHTS and LAWSUITS if there is big money involved when they announce how residual values will be shared, because some will say it should be divided evenly by number of weeks, and some will say it should be divided per dollar of residual value...
=================

I wish I could pay $500,000 for each of three weeks that I own, but I won't be able to. So I will have to accept the end of the Royal Mayan, if it comes to that.

In any case, the developers really have the right to decide if they sell their part to somebody else, and if they sell out, then we sell out too... As long as we get treated fairly, the original contract was that we were buying for 30 years, and that's it. We were not guaranteed that they would renew the lease at the end of 30 years.

What the heck, I will rent and pay to go somewhere else... The Fiesta Americana Vacation Club in Can Cun will allow me to stay at the Coral Beach, which is like TWO Royal Mayans in one, so it is a great option, for me, and I am already a member. I will have to pay more, but $50,000 or $250,000 will compensate for that... And it is, in fact, much more luxurious than the Royal Mayan. (Private Message me, if interested in more info...)

So... I will miss the Mayan, if it goes, but that will not mark the end of my vacations in Can Cun.

I suppose that if your great grandfather owned a mansion on Fifth Avenue in Manhatten, or Champs Elysees in Paris, at some point in history one of your ancestors or you would have been faced with this same dilemma. And they probably sold out, because there are very few mansions left on Fifth Avenue or Champs Elysees... etc.

Yes, it will be sad if it is torn down... but this is the way of the world... we are overcrowded, and the value of land and especially centrally located beach property goes UP and UP...

The grace of the Royal Mayan is that it is not overcrowded, and it has a lot of garden areas... these will have to go... and it is only 8 floors high, and new buildings in Can Cun are 20 floors high... and it is in a great spot... so...

There will be a new bigger building... with more crowding... less graceful... more money...

"Money makes the world go 'round... Money, money, money, money, makes the world go round." - from: "Cabaret"

- Ellis

 

[tonyg]

It would be a shame to demolish the buildings which have withstood several hurricanes that knocked down other not-so-well built structures. My favorite of all the Royals.

 

[Riggo]

Believe nothing you read/hear at this point in time. We heard the same crazy rumors with VCI and that was only a year before the trust expired. 5.5 years out?? The only thing we can predict with any accuracy is that maintenance fees will be going up.

 

[geoffb]

Supposing they are getting offers for the land for... say... ten billion dollars...

If you are going to run numbers use some real ones or at least mildly optimistic ones. VCI was valued in 2006 at around $40 million. Maybe assume for the sake or argument that the Mayan has a much higher assessed value despite similar market conditions.... let's say triple? Would that even cover residuals?

-G

 

[pjrose]

If you are going to run numbers use some real ones or at least mildly optimistic ones. VCI was valued in 2006 at around $40 million. Maybe assume for the sake or argument that the Mayan has a much higher assessed value despite similar market conditions.... let's say triple? Would that even cover residuals?

-G

Hmmm....about 200 villas times 51 weeks = about 10,000 intervals. times an average of maybe $6,000 each that's 60 million. So roughly, yes.....assuming the taxes, legal fees, and so forth don't eat up too much.

 

[Ellis2ca]

If you are going to run numbers use some real ones or at least mildly optimistic ones. VCI was valued in 2006 at around $40 million. Maybe assume for the sake or argument that the Mayan has a much higher assessed value despite similar market conditions.... let's say triple? Would that even cover residuals?

-G

I KNOW I used an extreme figure... it was intentional, to ILLUSTRATE the point... that is: if the value of the land is truly so high that the developers are going to sell their interest in the Royal Mayan, then this would be what we would be faced with.

Actually, if anybody would buy one of my Villas right now for residual value plus some more thousand, I might sell it, wouldn't you?

And if you would sell it, it is almost the same as if the Royal Mayan is knocked down for that week.

I DON'T THINK the land is worth 10 billion dollars... this was ONLY to illustrate what would happen. I don't think they will sell it, but if they do, then we will get our residual value and it is not the end of the world.

Whoever will be the new owner might decide to knock down the building and rebuild and or they might decide not to knock down the buildings and to continue running it as a timeshare, perhaps affiliated to the Royals. And if they knock it down, then... that's too bad, but it is not the end of the world for me.

You are right, there are only 200 Villas, not 400... and 200 x 50 = 10,000, not 400 x 50 = 20,000. But what I was trying to iillustrate is valid. (I will try to edit my previous post.)

If the developers are only going to break even, then they will sell the property to new owners, who will not knock down the buildings, but if they do, that's too bad.

As I said, that is not the end of my trips to Can Cun... although perhaps going to Can Cun is not going to be as pleasant as it has been, if they knock down the Royal Mayan and build a 20 floor monster in its place.

- Ellis

 

[riverdees05]

Isn't it a RTU and at the end of the use period, everything goes back to the developer?

 

[Jim in Cancun]

1.- Yes, it is a RTU and everything goes back to the developer who will then decide whether to sell it, continue to run it as is, change it to full time or fractional or tear it down and build something else.

2.- As a general rule of thumb in Cancun, a "module" can be valued at $100,000 usd. (This number, of course depends on a lot of factors but in general it is a good number. It may be low for the ME and high for the Oasis for example.)A regular hotel with regular hotel rooms that has 100 rooms would be worth about $10,000,000 usd. Since the Royal Resort units are actually 3 "modules" each, you can multipy the number of "units" by 3 and then by $100,000.

3.- So if the Royal Mayan has 200 rooms which I think it does, it would theoretically be worth $60,000,000. (Value as timeshare is not taken into consideration as it is only a way of operating the hotel in a RTU.)

4.- Tendencies currently are towards tearing down low-density (8 floors, 200 rooms, right?) and building skyscrapers with a maximum number of rooms that the local government can be "convinced" into authorizing. Can you say "donation?" This could be done there in the "hotel" format or in the full-time condo format.

5.- And in the end, something is really only worth what someone else is willing to pay for it.

6.- As mentioned, 5 years is a long time and gas prices, airlines, natural and environmental considerations (http://good-times.webshots.com/photo/2723674100044351485CXNFbl ), the economy, wars, disasters and even common sense and logic may come into play to make or change any decisions about the future. JMHO

 

[pjrose]

Isn't it a RTU and at the end of the use period, everything goes back to the developer?

At the Royal Resorts the contracts specify that at the end of the use period the resort must be sold to the highest bidder. Individual interval owners get something back IF there are enough funds after paying taxes, legal fees, and so forth.

At the Mayan, owners would get back the original cost of their unit ("residual") and then the developers would get back a like amount. Then the remaining funds (if any) are split between owners and developers.

The arrangement is similar at the Royal Caribbean.

At the other Royals, the owners' payout is not dependent on the original purchase price of the unit; everyone gets a like amount.

All, of course, is dependent on the sales price - that is, the payout is not guaranteed because the sale might not produce enough revenue.

 

[geoffb]

Well if the value is up and the developer would have to match it and then find a way to make a profit from reselling the property they may feel that the math doesn't add up. Sales at VCI may be a factor in their thinking.

If the villas were really flexivillas then they might be more inclined to go for it.

-G

 

[Riggo]

You raise an interesting point. Does anyone know how sales at VCI are going? Percent occupancy? Recent sales pricing?

 

[pjrose]

If the villas were really flexivillas then they might be more inclined to go for it.

I don't understand what you mean. They aren't at the CIC, but they are at all the other Royals.....???

You raise an interesting point. Does anyone know how sales at VCI are going? Percent occupancy? Recent sales pricing?

We did the tour last week; pricing ranged from $5,200 for Lagoon View in the Fall to $29,500 for beachfront C units week 52. The majority of prices were in the teens and even below $10K. I didn't see much activity. They seemed to be pushing the RH first, and then if it was too expensive they pulled out CIC prices. I don't know percent occupancy, but the day we were there during week 26 it seemed deserted.

 

[KarenLK]

CIC not selling?

This was an issue brought up at an owners only meeting with Corso back in week 11 or 12. He said, and probably rightly so, that it was important to sell Haciendas, esp. for sales staff, as their commissions were higher. We did not see a lot of sales people touring prospective owners there. I have heard a number of guesstimates, mostly in the 40-45% range. But it was at that level a year ago too.
They have been offering deals on the internet (that meeting also was called in regards to complaints that non-members were getting bargain basement weeks while owners were paying a lot more in maintenance fees per week. They said that would be rectified.) I haven't looked recently to see if they are higher now that we caught on and complained.
Something is going on and I don't like it

 

[geoffb]

I don't understand what you mean. They aren't at the CIC, but they are at all the other Royals.....???

I have been told that the wooden shutters that have to be closed and locked when a Royal Mayan unit is split are seen as an issue.

-G