How many legacy timeshare resorts may be facing trouble?
Timeshare veterans Scott MacGregor, Lemonjuice Capital; Lori Entwistle, Synergy Management Solutions and Scottsdale Camelback Resort; Kevin Mattoni, Cunningham Asset Recovery Services; and Resort Trades Learning Center Host Sharon Scott Wilson, RRP recently discussed “Reimagining Resorts” (a Lemonjuice trademarked slogan) during an interactive session held on Resort Trades magazine’s Learning Channel entitled, “Aging Timeshare: Options for Legacy Resorts”.
The group missed addressing a question asked by Marge Lennon, of Lennon Communications, who asked, “What is Scott’s estimate as to the NUMBER of aging resorts that need the Lemonjuice infusion of capital and guidance?”
Scott’s reply was, “According to ARDA data, there are 1,580 timeshare resorts in the US. Of those, 76% are more than 30 years old, and 48% are more than 40 years old. That’s their age as timeshare resorts; many of those were older buildings before being converted to timeshare.
“The vast majority are experiencing at least some owner attrition, and certainly all are getting more expensive to maintain as they age. But many are still operationally vibrant and financial stable. So, it would be guessing to estimate the number that will really need reimagining in the next five years.
“But any for which the non-performing (HOA-owned + delinquent) intervals is more than 20%, that don’t have enough money in reserved to fully address the aging infrastructure, and/or that find it necessary to charge an owner more than the legal costs of processing a deed-in-lieu of assessments plus a year’s maintenance fee to exit should ask themselves if their owners may deserve some additional options.”
During the event (now available on YouTube/ResortTrades), the discussion began with a description of the changes being undertaken to revise certain aspects of Scottsdale Camelback Resort’s business model.
Another question was asked about the percentage of owners required to make the change.
To this Scott replied, “I’ll give an attorney’s standard response, even though I am not one – it depends.
“It depends on what you’re trying to accomplish, and things that will have a bigger impact on the Association and owners will require higher voting thresholds.
“It depends on the state in which the resort is located, as both the corporate codes and real estate statutes will have provisions for voting thresholds.
“It’s important to know that in most situations, a majority of owners can effect change and that it doesn’t always require a totality or super-majority of owners. Also, many things like “sunset” and partition are already anticipated in many resort documents and it takes a vote of a majority of owners to prevent it from occurring.
“Last, and very importantly, there is one situation where 100% of the owners might have to vote or agree, unlikely as that is – and that’s when the owners have become tenants in common as provided for in their documents and there isn’t a state statute that clearly spells out the process of governance thereafter. There are always solutions – but it’s certainly easier to address issues requiring votes when the ownership is active and engaged, rather than when the timeshare program has already sunset.” R. Scott MacGregor Senior Vice President, COO Lemonjuice Solutions (321) 236-6663
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