Unreasonable Fee on U.S. Virgin Island Timeshare Owners

The ARDA-Resort Owners’ Coalition (ARDA-ROC), a non-profit organization representing over 1.6 million timeshare owners with the mission of protecting and enhancing vacation ownership, today has filed a lawsuit in the District Court of the Virgin Islands against the U.S. Virgin Islands (USVI) government to challenge the constitutionality of the new Environmental / Infrastructure Impact Fee on timeshares. Effective today, the Fee will impose a $25 per night fee for each night an owner occupies his or her own timeshare unit. The lawsuit asked the court to declare the Fee unconstitutional and unenforceable.

“This fee is discriminatory and will drastically impact the future growth and health of the timeshare industry in the U.S. Virgin Islands,” says Ken McKelvey, ARDA-ROC Chairman. “Timeshare owners in the USVI already pay the highest real estate property tax rate in the territory making this particular fee an exorbitant burden on the ability of the territory to compete with similar markets.”

The lawsuit contends that the Fee violates the Commerce Clause and Equal Protection Clause of the U.S. Constitution, by discriminating against interstate commerce and intentionally targeting non-resident timeshare owners. It places an unreasonable financial burden on timeshare owners and will have an overall negative effect on the local tourism industry. In proposing the law, the USVI Governor solidified his intention to discriminate against non-residents.

Adoption of the Fee will prove detrimental to the region’s tourism economy, as timeshare has been the only sector of the industry that has seen sustained growth and development over the last 25 years, bringing visitor spending, jobs and income for residents of the region. Currently, the timeshare occupancy rate averages 70 percent in the USVI, due to the region’s attractive vacation destination appeal. Rather than bringing additional revenue to the USVI government, this excessive fee will likely cause owners and their guests to look elsewhere in the Caribbean to take their vacations, causing occupancy rates to fall, tax/fee revenues and consumer spending to drop over time, and eventually reducing the number of jobs and revenue to the local economy.

“This fee will hurt the local economy, discourage tourism to the USVI and negatively impact the continued growth of timeshare in the USVI. Fighting this fee will benefit the local economy, and those USVI residents whose incomes and livelihood depend on the local tourism industry, specifically timeshare,” said Ken McKelvey.

For more information on this fee, ARDA-ROC’s efforts to oppose this legislation and to read the official complaint, visit www.ardaroc.org/USVI