More Bad News for New York's Manhattan Club

Things still aren't looking good since our last update on New York City's Manhattan Club timeshare. Last December, we mentioned the timeshare in our blog on maintenance fee complaints. At that time, Manhattan Club owners were complaining that their rising maintenance fees weren’t getting them anything in return. Complaints about the inability to book rooms, or sell their shares were voiced by many owners. Manhattan Club developer Bruce Eichner was facing a New York State Supreme Court lawsuit in which timeshare owners alleged he sold over 14,000 ownerships for 286 rooms resulting in a minimum shortage of 69 rooms.

Bait and Switch Scheme

Developer Eichner and his partners are on their way to court again. Referring to the Manhattan Club as a "bait and switch timeshare scheme", Eric Schneiderman, New York's Attorney General, halted sales of timeshares and foreclosures of timeshares at the club last Friday.  Schneiderman's court order also requires Manhattan Club developers to appear in court on August 1 to answer questions about their sales pitches and other practices.  

Undercover Work

The court order was in response to continuing owner complaints on rising maintenance fees (some owners said they were forced to sell their shares for just $1 to avoid the fees), and their inability to book rooms while at the same time rooms were still available to the general public. Earlier this year, undercover investigators from the Attorney General’s office attended and recorded a sales presentation at the Manhattan Club. The investigators found evidence that the club’s sales tactics were much like a "bait and switch scheme." Buyers were told they could easily reserve rooms and that the hotel did not rent rooms to the public. Investigators found that the club’s offering plan stated that rooms were rented to the public, but the Attorney General's office says the club illegally withheld the plan from buyers until after they had bought their memberships. 

Developers Will Cooperate

The developers of the Manhattan Club, issued a statement through their spokesman, Eric Yaverbaum who said, "We intend to fully cooperate with the attorney general’s investigation and look forward to bringing clarity to the entire issue."  Because of the ongoing investigation, a spokesperson from the attorney general’s office would not comment on whether the attorney general would seek refunds for the property owners. The Manhattan Club has been the subject of at least two lawsuits from members. One suit was settled out of court, and the other was dismissed by an appeals court. The appeals court ruled in part that the club had disclosed to buyers that rooms could be rented to the public.

Help from Industry Experts Keeps Legacy Resorts Moving Forward

It isn't just the newer, larger resorts that can provide all the "bells and whistles" to keep up with the competition. The more mature "legacy" resorts have lots to offer, and industry experts are helping them to keep moving forward competitively while also maintaining a healthy HOA.

Compass Resort Group

One of the industry experts working with legacy resorts is Compass Resort Group. The company helps single-site resort developers and HOA’s that are responsible for mature resorts in need of assistance.  Headed by two long-time timeshare industry pros, Jay Finley and Chuck Frey, Compass Resort Group concentrates on resorts that may be experiencing issues related to maintenance, shrinking reserves and escalating debts. The company does a thorough analysis of each applicant’s needs before embarking on a course of improvements. 
Compass Resort Group has assisted resorts such as Branson Yacht Club (find it on to become more profitable, gain new owners and recover lost revenues. The group also offers assistance with software training and conversion, project development, financial advice, and in developing successful marketing and sales efforts.  A specialty of Compass Resort Group is selling HOA owned inventory in a way that maintains price integrity and preserves value for current and prospective owners.

RCI Affiliate Access Program

RCI is another industry expert helping legacy resorts.  The RCI Affiliate Access Program, includes a partnership with leading service providers and vendors from the timeshare industry.  Through these partnerships, RCI affiliate resorts have the opportunity to develop preferred relationships with quality vendors and suppliers, and to negotiate the best prices for products. RCI Affiliate Access has 86 partners including such companies as guest generation system Leisure Link, customer survey system CustomerCount™, and timeshare accounting firm Averett, Warmus and Durkee. 
Other services offered under the Affiliate Access program are state of the art call center capabilities, marketing analytics, and forecasting and pricing tools. 

RCI Legacy Resorts Outreach – Lunch and Learn

As part of the Affiliate Access Program, RCI is presenting a series of HOA-focused "Lunch and Learn" events in 13 locations around the country through October of 2014. The luncheons bring RCI sales and servicing teams and RCI Affiliate Access Program partners together with board members and resort industry leaders for a ¾ day, no-cost information session. Participants have a chance to talk face-to-face with RCI representatives about best practices to get the most out of vacation ownership.  It’s also the perfect opportunity for participants to get acquainted with Affiliate Access Partners, learn cost saving methods, share ideas and have lunch! For more information contact:

Improve the Guest Experience for Greater Owner Engagement

Is a beautiful resort abounding with comfort and luxury in a coveted location all it takes to attract and keep owners, guests and potential buyers coming back to the resort? Probably not—more is needed.  For complete owner engagement, resorts must provide many varied activities and amenities.  

First Things First

Smart management will do their research before they incorporate large scale amenities. Prior to embarking on a new project, management may want to make sure they have the answers to several important questions:
  1. Is there buy-in from the HOA?
  2. Is there enough money to handle the expenses?
  3. Does the amenity fit the demographics of the resort? To find out study historical influences; the tradition and philosophy of the resort, cultural and social influences, weather and time of year.
  4. What is a good activities program? Does it add a standard of quality and value that translates into repeat business?  Activities should be creative in a way that relates to the uniqueness of the resort's environment. Activities should make the vacation special. A well-trained and enthusiastic staff will complement the specialness. 
  5. Are there activities geared to all ages, including an active, separate children’s program? Safety should be a prime consideration in all activities.  Children should be grouped by age-appropriate activities. Guests should have many options to choose from with activities to match their interests and ability levels.
  6. How will the resort review and monitor the activities program? An ongoing performance review of the program is very important. Frequently monitor guest engagement using activity cards, social media reviews, and informal walk-throughs on the property to talk to guests, and staff for feedback. Check to determine if activities can be directly related to such things as increases in direct resort revenue, and increases in length and frequency of stays.

Build Projects to Add Excitement and Create Memories

Positive answers to these questions encouraged Exploria Resorts’ Summer Bay Orlando to go ahead with a big project.  They were already on the way to enhancing guest experiences when they had the opportunity to make lemonade out of a lemon.  After a devastating sink hole last year caused severe damage and swallowed two buildings, the resort decided to make the most of the area left after removal of the wreckage. To create an additional marketing draw and expand the overall resort experience to every family member, Summer Bay Orlando enlisted Extreme Engineering, to create a new pirate-themed Adventure Park attraction. This exciting family activity features a floating dock, bumper boats, rock climbing wall, zip line, bungee jumping and a wipe-out style inflatable zone with picnic areas and a food and beverage outlet. 

More Than a Beautiful Location

The owners of Grand Pacific Palisades Resort didn’t rest after building their resort in the beautiful beach city of Carlsbad, California.  Though the resort is located in a prime location with spectacular views of the Pacific Ocean and the world-renowned Carlsbad Flower Fields, and next door to LEGOLAND, it wasn’t enough. Grand Pacific also made sure that owners and guests have plenty of other amenities and activities to make their stays memorable—multiple pools and spas, an onsite interactive water park, fitness center and outdoor activity center. In addition, guests have access to a near-by 18-hole championship golf course and a luxurious full-service spa.

Companies That Make Your Resort Stand-out

Extreme Engineering is the world’s largest supplier of adventure activities for the resort industry and amusement parks. It’s one of the companies dedicated to building projects that make a resort stand-out from all the others. With projects like Summer Bay Orlando, Extreme Engineering projects and activities will satisfy even the most seasoned thrill-seekers.  Guests will want to stay a little longer and come back more often. As Extreme Engineering says, it’s about "creating memories through excitement."
Crystal Lagoons, is a pioneer in converting even the most impossible areas into gorgeous lagoons with crystal clear waters.  The company works with real estate developers to "transform any location into an idyllic beach paradise" suitable for all water activities. Not only does the company convert unsuitable coastal areas, but its projects also bring beach life to unimagined places such as inland and urban areas. The company is currently involved in over 200 projects in 50 countries. 

Timeshare Keeps Getting Better - Even After a Few Setbacks

The 60’s - Timeshare Gets Started - Europe Paves the Way

Many things have changed since the 60’s, including the timeshare industry. The concept was first developed in Europe and in 1964, a French company gets the credit as the first to take the plunge into timeshare with a ski resort in the French Alps.  At this time, commercial air travel had taken off, and it was the height of the travel boom.  Travel company, Society des Grand Travaux de Marseille, decided to take advantage of the vacation demand. The company offered an alternative to those who couldn’t afford a second vacation home, but could afford to buy a week of time in a resort condominium that guaranteed an opportunity to regularly ski in the Alps.

Timeshare Catches on in the U.S.

By 1965, the Hilton Hale Kaanapali in Maui broke ground as the first hotel-condo complex. It was quickly followed in 1969 when Vacation International began selling timeshare weeks on a leasehold basis in Kauai. Soon companies in Florida and California followed and timeshare expansion across the U.S. began in earnest. 

The 70’s

In the 70’s timeshare resorts grew to a total of 350 and ownership grew to 200,000. The timeshare industry consisted of small regional developers, the industry was unregulated and the emphasis was more on getting the sale, rather than the vacation experience. In 1974, Resort Condominiums International (RCI) became the world’s first exchange company, and at the same time, Vacation International, Ltd. initiated the first U.S. points based system. Timeshare now offered a little more flexibility and owners weren’t just limited to one week at the same location.

The 80’s

Growth continued in the 80’s. The number of timeshare resorts increased 400 percent, timeshare owners increased 300 percent, and sales volumes were up 500 percent. The 80’s saw the floating time concept introduced, and regulators established rescission, disclosure, and escrow requirements. Conversion of wholly owned condominiums, the first urban timeshares, fractional ownership, and a trend to larger resorts, all emerged during the 80’s. In 1983, Marriott Corporation led the breakthrough of major hotel chains involvement in timeshare with its purchase of American Resorts. 

The 90’s

The 90’s brought an industry change of focus to the vacation experience instead of the previous focus on getting the sale.  Major hotel chains entry into timeshare, an emphasis on full-service resorts, an increasing use of points and clubs, and the use of more sophisticated marketing and sales techniques, contributed to major geographic growth in the 90’s. Timeshare’s image also started to improve.

The 2000’s

Two events in the first decade of 2000 impacted the timeshare industry significantly. In 2001, the residual effects of 9/11 left many Americans fearful and reluctant to travel, and in late 2008, the collapse of the economy was devastating. By 2009, jobs were lost, companies cut-back or went out of business, travelers were not traveling, and construction of new resorts stalled and sales of timeshares plummeted. 

The Future Looks Bright

The year 2011 saw a turn-around for the travel industry and tourism seemed to rebound quicker than most other industries. The American Resort Development Association’s (ARDA) 2012 report, World Wide Shared Vacation Ownership, shows timeshare to be one of the fastest growing industries.  The report has North America topping the timeshare global list with 2500 resorts or 46 percent of the total market.  According to Vacation Ownership World (VOW), vacation ownership sales grew 7% in 2013 which when combined with the 10% rise in 2012, was the biggest back to back growth in years. New timeshare growth is also rising globally with 5300 resorts in 108 countries and new markets on the rise.
The timeshare industry has been spurred on by an improving economy, renewed interest in travel, continued timeshare flexibility using points and rewards systems and flex time. Also contributing to growth is the use of more sophisticated marketing tools such as the internet, social media and analytic data, and the use of these tools in aiding the process of exchanging, renting and selling.  Continued focus on the resort experience, identification of potential new timeshare buyers, and the addition of new global markets, all contribute to a positive direction for the industry.

Sources of information: ARDA, GlobalSpec, Timeshare Marketplace

Timeshare Growth on the Rise in New Global Markets

Timeshare’s future will include new growth in global markets, according to information from ARDA’s 2012 World Wide Shared Vacation Ownership Report. The comprehensive report on the state of the industry reports that 5300 resorts in 108 countries support more than 1.1 million jobs. Those resorts generated over $45 million in direct economic output in 2010.  Here’s how the global timeshare properties market shares stack up:
  • Europe - 25 percent  
  • Central and South America - 10 percent 
  • Asia - 6 percent
  • The Caribbean - 5 percent
  • Africa - 4 percent
  • Australasia (Australia, New Zealand, New Guinea and neighboring islands in the Pacific) - 2 percent 

Hot Markets

Brazil, Russia, India and China
Findings from ARDA’s report show that ownership is likely to expand to numerous countries, particularly Brazil, Russia, India and China.  The report shows that though currently these countries have very small amounts of timeshare owners, "factors such as a growing middle class, a positive attitude toward timeshare and consideration of future timeshare ownership among non-owners, are indicative of timeshare growth in these countries."

Another global market on track to become one of the world’s fastest timeshare markets is Dubai. Influences such as an increase in tourists, real estate prices, and hotel room rates are fueling Dubai’s timeshare growth. Additionally, Dubai will receive another market boost in six years by a projected 25 million visitors expected to attend the World Expo 2020 being hosted by Dubai.

Making the most of the Global Trend
With timeshares available all over the world and new developments cropping up all the time, why stay in one place? Timeshare owners are realizing an extra benefit of their timeshare purchase—the ability to travel the world. Exchanging, increasing scheduling flexibility, and taking advantage of points programs, enable owners to experience worldwide destinations. You can even go around the world as was recently proven by the company Worldwide Timeshare Hypermarket, which undertook a virtual journey designed to circumnavigate the globe in 80 days. Their successful virtual trip started in London, went across Europe and then into the East as far as China. 
Roy Forsdick, commercial director of the company, explained how they accomplished their feat using only three great value cash holidays provided by exchange company RCI. Said Forsdick, "Our strategy was to stick to studio and one-bedroom apartments wherever possible and make use of late availability discounts, which can shave up to 50 percent off the amount of points needed to book a particular holiday. As we set off on March 8 the seasonality was to our advantage, since the points value of accommodation is cheaper outside the peak season."