LeisureLink Shuttered: Resorts Feeling the Burn

In late September, Kelley Ellert, director of marketing at Defender Resorts, received some unwelcome news. “LeisureLink sent us an email saying they had ceased to operate,” she says. “We had blocked them from new reservations because they were behind in paying us, but now we will have to pay owners for inventory that we’re probably not going to get paid for.”

In the notice, LeisureLink said all employees were being terminated and the platform turned off, after its management was unable to raise additional equity to fund the company. LeisureLink said it had been working with an investment bank in the last 12 months expecting to have an influx of money this summer. However, after interest from strategic buyers and investors, management realized that it was unlikely to complete a transaction before the end of the year and entered into an Assignment for Benefit of Creditors to manage an orderly disposition of the company’s assets.

Sources tell Resort Trades that resorts aren’t likely to be considered secured creditors, meaning they are probably at the end of the line for payment from any bankruptcy proceeding.

ARDA Southeast’s Regional Meeting, held September 27-28 in Myrtle Beach, was abuzz with resort managers lamenting LeisureLink’s demise, which came as quite a shock. “They had been reassuring us that investors were in the due diligence process and payment would come very soon,” Ellert says. As an ARDA member with partnerships with leading timeshare software and exchange companies, LeisureLink had appeared to be the opposite of a fly-by-night OTA.

Michele Colson
Michele Colson

“It wasn’t an official topic at the meeting,” recalls Michele Colson, president of the homeowners association at VSA Resorts, “but it was a main subject of conversation.” VSA used a third party to list inventory with LeisureLink, and Colson believes that may provide them with some protection. “Our contract is with Kees Vacation Rentals, and they are working with Expedia and other sites to get us paid.”

Rentals have become a key tool for both HOAs, who rent both association and owner inventory, as well as developers who appreciate getting new prospects who are already aware of the benefits of condo-resort vacations.

The question for many resorts is, “what do we do now?”

Sunil Aluvila
Sunil Aluvila

Sunil Aluvila, president and CEO of VacayStay Connect, is hoping that many resorts will turn to his company’s rental platform, which lists their inventory on the VRBO and HomeAway sites. “They now have to find a distribution channel that can help, and we come from the resort space, so we understand what resorts require,” he says.

Linda Mayhugh
Linda Mayhugh

Linda Mayhugh, COO, of Advantage Travel LLC, which also does business as Accommodations Unlimited, is also rolling out a rental platform for resorts to turn to. She learned of LeisureLink’s demise through her role as president of the Cooperative Association of Resort Exchangers (C.A.R.E.). “The news came as quite a shock,” she says. “We share information in our group so that we can alert each other to problems in the marketplace. If companies have had issues in the past, we won’t allow them to come back in another guise and repeat bad behavior.”Another problem for some resorts will come if they have booked members into inventory secured through LeisureLink. “If you have paid for that inventory, you may have to resecure that inventory,” she says. “You should contact the resort directly and pay for it if necessary, and then file a claim. You don’t want your members showing up and not having promised accommodations.”