Closed For Repairs: Is Your Timeshare Resort Prepared for Disaster?

On November 28, a devastating wildfire swept through the Great Smoky Mountains National Park and the area surrounding Gatlinburg, Tennessee. In all, nearly 18,000 acres burned, 14 people lost their lives, and 191 people suffered injuries. Thanks to the quick response of staff at Westgate Smoky Mountain Resort, the 900 guests on-site escaped unscathed. The 1,004 unit timeshare resort, unfortunately, did not.

According to officials at Westgate Resorts, 652 units and 70 of the 90 buildings were destroyed in the wildfire. Because 352 units and many of the amenities were unaffected by the blaze, including the 60,000 sq. ft. Wild Bear Falls Indoor Water Park, Marketplace, fitness center, swimming pool and original check-in building, portions of the vacation ownership resort were able to reopen just weeks later. Reconstruction of the damaged units is already underway and “the property will be rebuilt to an even better standard than before,” says David Siegel, president and CEO. “We appreciate the continued support of our team members, vendors, local authorities and community as we face all the challenges of the rebuilding process. Spirits are very high and everyone is pitching in to make sure we reopen the resort as quickly as possible and get everyone back to work again.”

While the Gatlinburg area, which attracts 11 million tourists each year, may be prone to wildfires, resorts in coast areas can be affected by hurricanes, inland resorts are subject to tornadoes, and floods and fires can happen almost anywhere. If a disaster occurs, is your timeshare resort ready? Resort Trades reached out to two resort management experts for steps you can take to make sure you are.

 

Plan for the Worst

 

Having a well-thought-out disaster plan is essential for the safety of both timeshare resort guests and staff members. “My suggestion would be to strategize for long-term, wide-spread disasters, (when the entire area or region is experiencing the same effects), for example, non-local data storage, IT support, telephony solutions and emergency notification options for team members, guests, strategic partners, and vendors,” says Michele Colson, senior vice president of operation at VSA Resorts. The plan should also identify locations that guests can be evacuated to. In some cases, such as fires, that may be other resorts under common ownership, but in situations such as hurricanes, they may need to go to Red Cross or other shelters.

In some cases, guests may resist leaving the property, even if an evacuation order has been given. “You have to insist that the resort is closing, and they have to leave,” says Scott Dravos, senior vice president of resort operations for Vacation Resorts International. “There’s potential damage to the resort and their vehicles. There’s also the potential for injuries. In the aftermath, there may be no water or electricity for several days.” In the event of a mandatory evacuation, police or civil defense officials may assist in removing noncompliant guests.

When assembling your plan, gather input from representatives of local emergency response agencies, the homeowners association, insurance agents, and employees from all departments. It should include a chain of authority, guest protection, utility concerns and medical care. Another important resource can be exchange companies, who can assist with notifying incoming exchange guests and possibly relocating them.

Communication is essential, and in the event of a power outage or massive disaster, mobile phones may not work and Internet connections may be lost. Battery-operated walkie-talkies can be a good back up, but make sure you have enough handsets for all essential staff.

Other items to consider are training staff in the location of utility shut-off points, a plan for communicating with owners from an off-site location, on-site security to protect against looting, and conducting drills to assess readiness.

The Aftermath

Once the immediate crisis has passed, resorts or parts of resorts sometimes must close for an extended period. “Once we had to shut two buildings out of six for 18 months because of fire damage,” Dravos recalls. The first option was to relocate those timeshare owners to the buildings that remained open. When that wasn’t possible, they worked with their exchange company to find them an alternate week. “You will need to deposit something for those owners and hopefully that’s of equal value,” he advises.

According to Colson, “the biggest challenge is to coordinate inventory requirements, negotiate inventory ‘pay back’ to ensure that depositing owners don’t lose their points or trading power with the exchange companies and relocate exchange guests who have already confirmed their vacations to different locations. These conversations are always easier if you are able to offer a location that is perceived as an upgrade or offer additional incentives to offset the relocation, such as complimentary mid-week cleaning, extended pool hours, continental breakfast, etc.

Covering these costs should be the business interruption coverage in your insurance plan. “As a rule, insurance adjustors aren’t well versed in how timeshare works,” Dravos says. “They get the part about loss of rental, that part they understand, but for the maintenance fee you have to go through an education process so that you can prove your loss.” Now is the time to make sure that the underwriting language acknowledges that the coverage includes maintenance fees.

 

Following Hurricane Isabel, VSA had to close a resort located on the Virginia Beach boardwalk for six months due to significant water intrusion and roof damages. “Fortunately, our insurance was at the proper levels and included the appropriate riders to ensure that we were able to continue to pay our non-operational staff for the entire period so that we retained our valuable teams,” Colson says. “But even with proper coverage it was a challenge to file. I highly suggest that all questions are asked and answered prior to an event, such as limits, how to file, what financial details will be required at the time of loss, and how often the payments will be received.”

 

In the event of a widespread disaster, finding contractors and supplies to repair a vacation ownership property can be difficult. Dravos suggests having relationship in place. “We have a national partnership with Belfor Property Restoration, which puts us in a priority position. In advance of a hurricane, they actually prepositioned some equipment trucks them so they could deploy quickly. When everyone is looking to hire someone, it’s good to be at the top of the list.”

Keep the Team Together

If the entire timeshare resort must shut down, there’s the question of employee compensation. Although unemployment insurance can be a last resort, there are other options. Often, resorts pay employees to assist with repairs. “They may find it enjoyable to do something different, but if they’re a front desk person, I don’t know that you can force them to paint,” Dravos says. “You also have to ensure that they have the skills to do the work safely. They may volunteer to do it, but you might not want all employees operating chain saws.”

Short-term closures may even have benefits. “A positive point is that a temporary closure usually offers the staff the option to complete deep cleaning, organizing or larger maintenance projects. There’s even the option for extended time off or vacations if their absence doesn’t affect the work being completed,” Colson says.

If it’s not possible to keep employees on staff or pay them during a shutdown, resorts may continue health insurance or other benefits as a sign that they are still considered part of the team.

The impact on team members sometimes goes beyond loss of income. They are part of a community that has been affected by the disaster. For example, at least 20 Westgate team members lost homes in the wildfire, and they certainly know many of the hundreds of other families who lost homes. To assist them, Westgate has embarked on a nationwide fundraising campaign. For more information, visit www.westgateresortsfoundation.org.