Sunset Harbor to vote on terminating Hyatt management contract

[dioxide45]

The information has been provided by the HSH Resort Manager. It is on an annual basis an is tabulated for all HRC resorts.

I was hoping that someone had some information that could actually be shared, but it mostly seems anecdotal. For those that go in February and March every year, sure they are going to always think owners are always using their weeks and never trading. All the people there in prime snowbird season are likely to be owners. Go in September and October and you might think owners never use their owned week and are always trading out because the mix of HRC/HPP point guests is probably much higher.

 

[Pathways]

There is a tremendous advantage in being associated with a major timeshare company

Agree- there certainly CAN be an advantage. I would love to stay with Hyatt. Just get rid of the double, triple, and quadruple dipping fees. Marriott fired the entire back office HRC staff and took it all in house, most assuredly without hiring anyone new. They handle the IT system now. Did any of their 'synergy savings' make it to us? Of course not.

For those who argue to stick with Hyatt, what say you if/when Marriott sells the Hyatt/Welk system? This has long been speculated since Marriott has made it clear they can't/won't merge the MVC system into a system branded with a 'competing' hotel chain.

I have not been on the side speculating this sale will happen. However, with the notice of the increase in management % and other minor actions we are seeing, I can't help but wonder if Marriott is simply fattening up the balance sheet to make it attractive to a buyer.

 

[dioxide45]

I have not been on the side speculating this sale will happen. However, with the notice of the increase in management % and other minor actions we are seeing, I can't help but wonder if Marriott is simply fattening up the balance sheet to make it attractive to a buyer.

It has been speculated that they could look for a buyer for HRC, but losing resorts certainly won't help with that...

 

[Pathways]

I was hoping that someone had some information that could actually be shared, but it mostly seems anecdotal. For those that go in February and March every year, sure they are going to always think owners are always using their weeks and never trading. All the people there in prime snowbird season are likely to be owners. Go in September and October and you might think owners never use their owned week and are always trading out because the mix of HRC/HPP point guests is probably much higher.

These figures have been published in the Hyatt Destination newsletters that are emailed to owners. If I find the time to search for old copies, I will pass it along. IIRC, owner usage is around 89% at SH. One copy actually had the numbers from multiple resorts.

Remember, that doesn't mean the owner STAYED there during their week, just that they USED their fixed week. (IOW, they may have rented it). So trading for points or II would NOT be owner used.

 

[bnoble]

A plus for Hyatt at BH and WP - Hyatt took most if not all of the unsold weeks and dumped them into the points program. A win for today for our budget as they are now paying MF's. Win for the resort long term? Don't know yet.

I own at a different resort in another system that faced a similar situation. My personal take is that it's probably on balance a good thing to have a developer willing to take non-performing inventory at little-to-no cost to the resort's current owners, and have someone be on the hook for paying the fees. The downside at my resort is that this is a one-way trip: the points product that the developer sells does not convey voting rights, and those remain with the developer. That's a significant cost to pay if Hyatt works the same way.

However, it's worth remembering that selling timeshare is hard to do. It's one thing having a week or two here and there that the Board is trying to sell to current owners and their friends/family by word of mouth and maybe a listing on the resort's web page. It's quite another when you have a significant chunk of unsold or otherwise non-performing inventory carried on the books. Focusing on the management fees and operating costs is fine as far as it goes, but I'd care more about two things. First, what's the trajectory of non-performing inventory? Is it small or large? Is it stable, growing slowly, or growing quickly? Second, if the answers are either "large" or "growing quickly" I'd want to know what the realistic plan is for dealing with that. "We will just (foreclose and) sell them" doesn't sound realistic if there isn't a substantial sales effort behind it with people working on the problem as their day job.

On the other hand, if the answers are "small" and "stable/growing slowly", respectively, then yes: the management fees/operating costs are the things to worry about.

The more seasonal a weeks-based resort is, the more serious the non-performing problem becomes--blue week owners will tend to abandon their weeks at higher rates, because they are under water with fees vs. rental value and there is no point in owning them. Key West may not be that bad--there's probably only 2-3 months of slack demand in the peak hurricane window of late August to early October-ish. So, maybe it's not an issue for SH. But, the resort I have experience with is in an area that arguably has even less seasonal variation than Key West, and this was still a problem.

 

[AJCts411]

The current board has been completely ineffective the past few years and now wants to blame it all on Hyatt/ MVW. This is the dumbest idea yet. Every owner should vote no and throw out the current board. No, No, No!!!!

Many many OWNERS are quite happy with the BOD. Notice I said OWNERS. We elected them. The BOD is exercising a great deal of due diligence and exposed the exorbadant fees Hyatt management is forcing upon us OWNERS. Seems that the majority of owners are for Sunset to leave Hyatt. Why? A bad BOD? Ludicrous. Reducing our management fees to something comparable to Banyan or Galleon...comparable properties in KW. Contiue to allow Portfolio to deminish the value of our resort? Do you have any facts to support ypur comments other that yopu will lose being able to trade points into one of the Jewels of the current system? ANd I am not dumb...I am well informed.

 

[AJCts411]

To some degree, the bolded part seems to come across as a scare tactic to entice a Yes vote?

I'd call it a awakening. The truth. is the truth scary to you?

 

[Kal]

To some degree, the bolded part seems to come across as a scare tactic to entice a Yes vote?

FYI, I added the emphasis just to highlight the key issue on maintenance fee increases.

 

[ScoopKona]

Kai,
I know you previously, nastily accused me of being a Hyatt insider which I wholeheartedly disavow and refute, but I must ask are you (and ScoopLV) a SH owner? What is your interest here? Are you still in the real estate business? I know Scoop mentioned on this he was a former Hyatt salesperson...you too???

Kal literally wrote the user's guide to the Hyatt system. The official Hyatt manual is stupid. The worst tours I ever got were Hyatt owners who bought from someone who didn't really know how the system works (most older timeshare salespeople cling hard to the "buy a week, get a week, exchange a week, it's always a week) thing.

There is nothing nasty about having worked for Hyatt. I did. No point hiding it. It was a great job. It's the only big company I've ever worked for that I enjoyed. The rest of the big companies were like living in a Dilbert comic strip.

Frankly, I think he's right and you're wrong. Sunset Harbor is special. Nearly all the owners use what they own. It isn't "a little more than half." It's the overwhelming majority. If they vote to remove Hyatt, their ongoing fees will go down significantly at a stroke.

I think it is far more likely that all the Johnny-come-latelies to this one thread means that Marriott execs are crapping their expensive Italian suits over this.

There are three positions on full display:

1) Longtime SH owners (and members on this site): "Vote yes! Fees will immediately go down. Sure, we'll lose access to Hyatt properties, but there are other ways to get in if we want to."

2) The handful of SH owners who trade: "I'm not sure about this!" (Don't worry, guys, people like me will GLADLY trade our HWP and HBH weeks for your SH week if that happens. Bank on it. I'll feel a little guilty getting such a lopsidedly good trade if that ever happens.)

3) People who registered an account on TUG fifteen minutes ago: "No! The world will end! Don't do it! Think of the children!"

Frankly, from my perch, the people in group #3 look like paid shills. The sort of people Starbucks and Amazon sends to workplaces who are threatening to form a union.

 

[Pathways]

1) Longtime SH owners (and members on this site): "Vote yes! Fees will immediately go down. Sure, we'll lose access to Hyatt properties, but there are other ways to get in if we want to."

And I will add that these longtime owners are reacting with thoughtful deliberation. Plusses, minuses, let's add it all up.

As I said, I have voted. I did not disclose how I voted. TUG in general, and this thread specifically is for INFORMATION, it is NOT a campaign site.

3) People who registered an account on TUG fifteen minutes ago: "No! The world will end! Don't do it! Think of the children!"

This group seems to think it IS a campaign site. I would like to accept that these are simply well meaning owners who have happened upon TUG and want to impart some knowledge, take away some wisdom, and help all timeshare loving owners to maximize their usage and enjoyment.

But reading their posts, it APPEARS to be words of a shill(s). Funny how 3-4 day new posters constantly repeat how they would vote, strongly encourage others to do the same, and repeat debunked statements.

 

[ScoopKona]

As I said, I have voted. I did not disclose how I voted. TUG in general, and this thread specifically is for INFORMATION, it is NOT a campaign site.

Excellent point.

And although as a owner at a neighboring KW property, I will be very sad to see SH go, I also wish everyone well. The way the owners are being treated is patently unfair. And the company line boils down to, "So go buy a week at the Galleon. Leave. And quit yer [sniveling]."

HBH and HWP owners didn't buy six weeks at a clip and consider the property their vacation house. Because that's what it is. It's timeshare in the original Swiss model of timesharing. "I can go home and work 11 months of the year, as long as I get my one month here for the rest of my life."

Being forced to pay for something they don't want and haven't used for decades is galling. I'd be angry about it, too, if this applied to me. And the response, "Don't like it? Well, we'll raise the fees. Then you really won't like it," is rather short-sighted on management's part.

 

[KWLover1946]

The current board has been completely ineffective the past few years and now wants to blame it all on Hyatt/ MVW. This is the dumbest idea yet. Every owner should vote no and throw out the current board. No, No, No!!!!

You obviously have very strong feelings about our current board. They may be legit. Would you care to share the details of why you feel so strongly.

I would also be curious; have you ever taken the time to attend a SH board meeting and observe their methodology, reasoning, prioritization process, decision making, etc? I have, and as I previously posted, I was both surprised and impressed with the heartfelt diligence I witnessed. They anguished and debated over every decision. I left feeling much more comfortable than I had in the past. Plus, the idea of having decisions made by someone that i can down next too at the pool, or call, or email is much better than a decision by some unidentified corporate pinhead in Chicago or New York or wherever.

 

[BAT]

Yes, yes,yes,and yes. However I have better things to do in Key West to sit at a 4 hour BOD meeting watching and listening to a group that wants to micro manage SH.
No doubt a lot of own will vote yes, but there is no way two-thirds will.

 

[KWLover1946]

Yes, yes,yes,and yes. However I have better things to do in Key West to sit at a 4 hour BOD meeting watching and listening to a group that wants to micro manage SH.
No doubt a lot of own will vote yes, but there is no way two-thirds will.

So, I take it that you are a "no" and a "no" vote. I'm trying to decide. Can you share your reasoning?

 

[Pathways]

So, I take it that you are a "no" and a "no" vote. I'm trying to decide. Can you share your reasoning?

He doesn't have a vote - He doesn't own HSH,

He's just trying to influence those who do own there.

 

[Pathways]

So, I take it that you are a "no" and a "no" vote. I'm trying to decide. Can you share your reasoning?

It's actually becoming quite humorous. First it was that the board is a do-nothing board, should have done more in the past, should work harder now.

Then, when a person who has actually attended the meeting comments about how hard they are working for the owners, (and I can tell by your description that yes, you have actually attended) they make the comment that the board is micro managing.

 

[dioxide45]

So, I take it that you are a "no" and a "no" vote. I'm trying to decide. Can you share your reasoning?

didn't they say yes, yes, yes and yes?

 

[KWLover1946]

It's actually becoming quite humorous. First it was that the board is a do-nothing board, should have done more in the past, should work harder now.

Then, when a person who has actually attended the meeting comments about how hard they are working for the owners, (and I can tell by your description that yes, you have actually attended) they make the comment that the board is micro managing.

Oh well, ??? Thank you for your kind words. I am new to this site so I am behaving myself. I have noticed however the number of people that are convinced that the rising oceans and the next hurricane will wash the resort away.

[Deleted: Political comments are not permitted on TUG.]

 

[Pathways]

I have noticed however the number of people that are convinced that the rising oceans and the next hurricane will wash the resort away

Welcome to TUG! A word of warning, keep political names/etc out of your posts or it will be deleted. Cutting it kinda close in your last post.

 

[KWLover1946]

didn't they say yes, yes, yes and yes?

Sorry, I thought that the "yes,yes, yes, and yes" was only a strong affirmation to my question about his strong feelings about the board rather than an indication about how he voted. But, by now, who cares, . I just got back from voting "yes", and "yes".

I began to think about the months it took to get the pool renovation done despite the Covid mess. It was all outside work, everything else in the world was on hold, and Hyatt is an account that no manager, architect, or GC could or would ignore. Still, the project stood dormant for months. I recall standing and looking out of my window and wanting to strap on my own tool belt and go out to "get-er-dun"already for God's sake. Maybe I was just being too harsh, or ?????????? maybe justifiably PO'ed?

 

[KWLover1946]

Welcome to TUG! A word of warning, keep political names/etc out of your posts or it will be deleted. Cutting it kinda close in your last post.

OK, thx for the heads up.

 

[chrisbellows]

We are brand new owners at Sunset having recently closed on a unit that we bought to use. We also have owned 6 other Hyatts for more than 20 years so not new to the system. We have become increasingly disillusioned with Hyatt/Interval/Marriott/HPP and now Welk. Although Welk is now a separate entity, I believe that it will be integrated into the HPP in the near future and further dilute internal trading much as HPP has done. None of the original sales promises were kept. They only devised ways to try to sell us (again) what we had already bought! I missed a very good reservation this morning (my computer kept spinning after final SUBMIT and in the meantime an HPP person grabbed 6 nights of my 7 night reservation leaving only the Saturday night— but I digress. Back to Hyatt- I now have 7 Interval memberships- one for each ownership. That has always been unfair in my mind. We also pay 7 membership fees, etc. Hyatt put all of this in place, but Marriott will continue to escalate the fees—all resorts are going up. We have been lucky enough to trade into Sunset Harbor every winter for more than 15 years so decided to buy a week and unit that we want to use. We are still on the fence about the vote. My biggest positives are self-control of costs and no need for the Hyatt name—remember that Hyatt can take the name anyway, it’s only a license to use. Also we don’t have to worry about an influx of Welkies in the future. Negatives, If we leave, we will still have the HPP units available to those members and all other Hyatt members at 6 months. We have to worry about upkeep of the property to high standards- equal to what we have now or even better. This Board has high standards, but future ones may want to reduce costs and lower the standards. Resale value and personal enjoyment both depend upon the quality of the resort. Being the oldest resort and on the water comes with major maintenance issues. Insurance is a concern, too. We surely don’t want to be another Puerto Rico although I don’t believe that being a Hyatt really saved those owners any money although they could at least use the other Hyatt resorts while they were being re-built so the maintenance fees were not a complete waste. Those are my thoughts. By the way, we have been very happy owners and wish that Hyatt had delivered what they promised, but things are changing and maybe it’s time for new management at Sunset.

Wow, all great points going to both sides. Thanks.

 

[magicjourney]

It's definitely a hot topic. Hyatt Residence Club just sent out an email:

Re: Hyatt Residence Club Key West, Sunset Harbor — HV Global Management Corporation ("HV Global") Dear Sunset Harbor Resort Condominium Association Member: Since joining the management team, I have enjoyed spending time meeting with boards and visiting the fabulous resorts in the Hyatt Residence Club portfolio, and I can immediately understand why you love Sunset Harbor so much. I am writing today because we have just been made aware that the board of directors of Sunset Harbor Resort Condominium Association has scheduled a meeting of the association membership for July 14 to vote on whether to terminate the Management Contract and terminate the Club Resort Agreement currently in effect. Upon learning this news, we wanted to connect with you as a valued Owner and to thank you for your ownership. In our view, we are part of the fabric of Hyatt Residence Club Key West, Sunset Harbor, having provided quality services for over 20 years, and we believe it is critically important that you also hear from us as part of this process. Serving Sunset Harbor since 1994 Since 1994, HV Global Management has had the pleasure of serving as the management company for Hyatt Residence Club Key West, Sunset Harbor, and we have a strong desire to continue serving as your management company. Our goal at opening was to create a product that would provide flexibility and the highest quality home resort for all Sunset Harbor Owners. In addition to creating a dedicated window in which every Owner would have the guaranteed right to reserve their fixed unit/week, we also created the option of exchanging into other Club Resorts, Interval International®, and World of Hyatt®. While some Owners may have no desire to exchange, we want to remind all Owners that these flexible use options are provided by Hyatt Vacation Ownership and would cease immediately upon termination of the Club Resort Agreement. As additional benefits are expected to be added to the program in the future, we hope that you will view those as additional travel opportunities for you and your family. Hyatt Residence Club is and has always been dedicated to providing quality branded experiences for our Owners. The ability to do that is only possible through our team and the lasting relationships that they’ve created with Owners over the span of three decades. Sunset Harbor’s long-term tenured resort colleagues (some as long as 20 years) see you all just like family and are deeply committed to you and your ownership experience. I imagine each of you can think of a familiar face or two who has repeatedly helped you make unforgettable memories during your time in Key West. You may have heard that Leidys Torres, General Manager, has recently moved from Key West after a six-year stint to be closer to family. Though we know many of you will miss Leidys, we are actively in the search and interview process to fill this integral role. Thankfully, we have two other sister Hyatt Residence Club properties in Key West, which allow us to support and assist you during this interim as needed, and a task-force manager from another Hyatt Residence Club resort filling the current need. We consider ourselves fortunate to be able to continue providing this level of support during a time of transition in such a challenging labor market. As your management company, we have a solid and strong reputation in the vacation ownership industry and specifically within the Key West market. In addition, we recently dedicated a core group of leaders — myself included, along with Stephanie Butera (who wrote to you earlier in the year) — who are 100 percent dedicated to Hyatt Vacation Ownership. That team has been working hard over the last year to build the future for the brand, which includes maintaining exceptional service and management support, listening to Owners, and addressing Owners’ concerns and ideas. There are many positive changes being worked on that balance the needs of Owners who simply want to use their home resort while also enabling Owners who want to explore new vacation options. Upcoming Vote — Hearing from Us As your management company, we believe it is important that you receive comprehensive information regarding the issues you are being asked to vote on. To assist you in making a fully informed decision about your management company, we have outlined a few points for your consideration: Association Funds and Rental Income Over the past five years the management company, working with the board of directors, has managed to keep the maintenance fee growth to an average increase of only 3.2%. HV Global takes its role as a good steward of your association’s funds very seriously and works in partnership with your board of directors. There are many ways HV Global and the Hyatt Vacation Ownership business successfully support Sunset Harbor including insurance programs as part of a broader master portfolio, buying power using a national procurement service provider, Avendra, as well as through parent company, MVW, and even specifically leveraging our buying power in Key West as we manage multiple resorts in the market. Each year, the management company works to negotiate favorable and competitive insurance coverage on behalf of the associations that it manages. As the volatile insurance market continues to deteriorate, our risk management team actively works to procure insurance programs specific to timeshare resorts, like Sunset Harbor. By participating in our portfolio insurance programs (versus stand-alone), the management company is able to procure insurance programs with a breadth of coverages for which the association benefits. Club Rental income benefits all Owners in your annual budget, and the details are outlined in the Club Resort Agreement. The rental income benefited the HOA budget and all Owners by over $88,000 in 2019, 2020, and 2021. In addition, rental income for the past five years exceeded $433,000. Fees Resort fee income refers to fees collected from all renters at Sunset Harbor. HV Global has worked with the board of directors to increase this fee to offset increased costs, which helps reduce maintenance fee increases. The resort fee income benefited the HOA budget and all Owners by over $31,000 in 2021. Parking fee income has also been a focus for HV Global and the board of directors. There is no on-site parking for Sunset Harbor Owners and guests, so a parking agreement remains a cost of doing business for the association. The expense of parking is funded by maintenance fees as well as nightly fees for non-Owners. In 2021, HV Global successfully collected over $91,000 in parking fees and a significant share of that association income came from non-Owners, including renters and exchangers. Collection Process HV Global has worked hand in hand with your board over the past few years to improve collection processes and outcomes. HV Global has continued to improve the collection process, provided collection forecasts to your board, and has shown positive results in improved collections. All these efforts support the board’s resale program and improved financial results for all Owners. It should be made clear that while most Sunset Harbor Owners pay their annual maintenance fees on time, some Owners do not. With these efforts, HV Global has driven reductions in year-end delinquencies over the past three years:

Year​ Delinquency Rate​ 2019​ 2.7%​ 2020​ 2.2%​ 2021​ 1.6%​

Operational Costs The board communication provides an example regarding the landscaping contract for the resort and associated costs. We would like to provide you with more detail regarding this example. HV Global partnered with your board in this effort. Ultimately, HV Global reduced the schedule and scope for the landscaper, while remaining focused on maintaining the property to the standards Owners have come to expect. HV Global utilized its in-house landscape manager, at no additional cost to Sunset Harbor, to align the best scope of work in the request for proposal and to ensure the bids met the needs of the association and were in line with the market. Additionally, HV Global was able to use its buying power of its Hyatt Residence Club Avendra agreement to negotiate a lower cost for Sunset Harbor. HV Global worked with the board toward a better outcome for the Owners and to date has seen improved financial benefits while achieving the needed resort experience. It is also worth noting that the vendor recently requested an increase in its rate mid-contract, but with HV Global’s leverage with a national procurement company, HV Global was able to stave off any immediate increase. In terms of housekeeping costs, HV Global continues to bid all work competitively with contracted services on a regular basis, in an effort to find the best value for the association and its members. The Key West labor market has seen extreme level of cost increases (most notably in the housekeeping area), which are affecting all local businesses. This challenging labor market has resulted in off-cycle wage increases for housekeeping, front desk, and engineering staff in order to retain crucial staffing levels. Additionally, the local housekeeping provider notified last summer that a 30% increase would be needed to maintain current staffing levels at the resort. HV Global immediately sought competitive bids from other providers while negotiating with the current vendor. Working with the board during detailed budget reviews, HV Global eventually determined that the best value for the association was to retain the current vendor. However, HV Global was successful in negotiating improved staffing efficiencies and processes and reduced the projected cost increase by 12%. HV Global provides updated expense information on a monthly basis to your board of directors, as well as an analysis of the increases in materials and labor costs in the Key West market. We Value You and Are Here to Listen The Hyatt Vacation Ownership team is actively working to address important issues that have been raised by Owners, such as transaction fees and reservation windows. We are working to ensure that existing Owners wanting to stay at their home resort continue to retain all the rights they have today, while adding incremental options for Owners who would like to use their ownership to access new vacation possibilities. We hope that you find this information useful and, if you have any questions, we are available to answer them. We are planning a webinar to help address any outstanding questions on June 22, 2022, from 5:30 PM to 6:30 PM Eastern Time.

 

[INCHWORM]

To some degree, the bolded part seems to come across as a scare tactic to entice a Yes vote?

Agreed

 

[ScoopKona]

and Hyatt is an account that no manager, architect, or GC could or would ignore. Still, the project stood dormant for months. I recall standing and looking out of my window and wanting to strap on my own tool belt and go out to "get-er-dun"already for God's sake. Maybe I was just being too harsh, or ?????????? maybe justifiably PO'ed?

Nothing happens in Key West until all the proper palms are greased. The corruption there is breathtaking.