During a recent TBMA Conversations Series Webinar, panelists Alex Chamblin, Capital Vacations’ senior vice president resort operations, and Paula DiPaola, board president at Magic Tree Resort in Kissimmee, FL, discussed owner engagement. Magic Tree Resort and the Sea Club IV in Daytona Beach, FL, managed by her husband, Michael, have similar programs and work closely with Capital Vacations.
Objectives of owner engagement
Chamblin and DiPaola agreed that a key objective of owner engagement is to keep owners paying their maintenance fees. Failing to have a program for engaging owners could place the resort in financial jeopardy.
Chamblin: “A resort’s program for engaging owners also should result in having owners interested in, and committed to, their ownership and in future vacations. The effort should include finding out what is in their thoughts and on their minds, and reducing their exposure to misinformation.
“Property-management company teams must be engaged with their boards and employees to help assure that their owners will want to use their timeshares. All of us have to be proactive in helping to keep our associations healthy.”
DiPaola: “Owner engagement is extremely essential. Otherwise, you don’t have a viable association. We make every effort to talk to owners on a daily basis. We wish them happy birthday, Happy New Year and Merry Christmas, or other holidays. Communications are on-going. Tell your owners you miss them, and that you hope they are safe and healthy, and that they will be ‘coming home soon.’
“Engage owners when they are at the resort. Magic Tree is known for one really important thing. We have a 90-degree heated pool, and boy, do owners love it. We ask the usual health questions, and if they have had their temperatures taken. The whole time they are on property, a wristband must be worn. They are required to wear a mask in any enclosed area such as our lobby when they come in to get supplies.
“A program of owner engagement should not be a one-way street. The staff at Magic Tree takes incoming calls very seriously. The resort opened in 1982. Back then the average owner was 50. So how old are they now? I have heartfelt conversations with owners. Often, they are afraid of COVID-19 and are afraid to travel. We have to let them know about everything we’re doing to keep them safe. We have strict protocols, and Capital Vacations has helped us with those protocols.”
Chamblin: “Because of the vulnerability about future payments, it was important for us to use our operations team to fast-track getting the budgets prepared.
“We were able to work with the processes and tools that we have in place to build those budgets and get them mailed early. This was very advantageous by working diligently and making sure that we are communicating with our owners and speaking with our boards who are learning new and novel payment options.
“We have current technology available to us to deal with high volumes of collections. We can quickly get maintenance bills out and follow up more quickly. We utilize e-mail, and other means such as SMS text messaging to communicate that those bills are on their way, to confirm receipt, and to thank them for their payment. Many European and Canadian owners have expressed concerns about their ability to travel. Effective tools for communications enable us to provide timely answers about cancelations, rebooking, and exchange options that enable them to get benefit out of their ownership.
“During these critical times, resorts should embrace the use of carefully drafted surveys of their owners. They also need tools for disseminating and assessing those surveys. The feedback we get results in helping associations prioritize their owner engagement efforts.
“Resorts must also have the tools to manage owner communications on various social-media platforms such as TripAdvisor and Yelp. Owner satisfaction is an essential element in owner engagement.
“Technology also enabled us to get ahead of the budgeting process that the associations were waiting for. We recently released what we are going to call the ‘Capital Board Series,’ which consists of scheduling monthly phone calls with our board members. These calls will cover various issues and solutions from Capital’s perspective. That way, we are actively engaging our boards to help them with their messaging for the benefit of the associations on a much larger scale.”
DiPaola: “Our resorts send out our safety guidelines 30 days in advance of arrival. The collaboration with Capital Vacations helps us in dealing with our aging owner base. Generations have been affected by the economy, and management is seeing significant increases of owners saying, ‘I know I just can’t afford to pay. Do I have to pay if I can’t travel, if I can’t use it?’
“Owners have serious questions and concerns; it’s essential to respond. You don’t want to keep them waiting. Thank goodness for e-mails and phone calls. Today, mortgage companies are helping them, gas companies are helping them, and the government is helping them. Of course, we have to help them. So, we have implemented payment plans for those in need, and those owners are happy about that.
Dealing with deedbacks
All legacy resorts have been grappling with this issue for years. Not having an answer to the question, “Will you take back my deed?” has led to the rise of exit companies that take in millions of dollars each year from owners asking to get out of obligations to pay maintenance fees.
Chamblin and DiPaola agreed that being able to articulate a resort’s policy about a deedback program is necessary for a meaningful owner-engagement program. Each resort board must collaborate with its own legal counsel when preparing a plan for deedbacks. Some resorts have liberal deedback policies, others charge various fees, and some avoid dealing with the issue. Not having a policy that works can lead to delinquencies, defaults, and costly foreclosures.
Chamblin: “A deedback plan also should include a revenue-generation program through sales and rentals. Rental revenues have been an increasingly important part of funding resort operations. It takes sophisticated tools to manage and maximize rental revenues. Too many resorts are relying on outdated systems. Without the right resources, they are leaving needed money on the table.”
The financial health of an association is a critical component of owner satisfaction. Owners react negatively when they get hit with surprises, especially with respect to maintenance-fee increases and special assessments. If a resort is falling into disrepair because of deferred maintenance, owner satisfaction declines and reviews from transient guests and exchangers can hurt future revenues.
Chamblin: “Resorts have to be aware that, when COVID-19 struck, probably 85 percent to 90 percent of the maintenance fees were paid in the first quarter of last year. There was a tail-off of the pace of collections at the end of 2020. Now, most of our associations are slightly off, but probably not as bad as originally contemplated. Nonetheless, we have to remain cognizant about challenges with international owners, and owners on fixed incomes who do not want to spend their money on something they cannot use. Owners within driving distance to their resorts should be high priority. Until the vaccine has fully materialized, predicting what first-quarter revenues with be like is a challenge.
“We organized our teams to ensure that we were able to get the budgets prepared for our boards, to get them reviewed, and send them out as early as humanly possible. We work diligently to make sure that we are communicating with our owners and speaking with our boards about implementing new and novel payment options, such as paying electronically. The goal is to help assure that payments from owners, domestic and international, are received as early as possible.
DiPaola: “About a year ago, we determined that we wanted our budgets done by March or April, so we can bill July 1, 2021, for payments that are due January 1, 2002. This schedule gives owners time to pay. We also extend flexible payment plans to make it easier to pay over six months, if necessary. We are then very strict if they do not pay when due.”
“My team and I worked diligently to ensure that our database and our owners’ community information was updated and current. Staying on top of this information is challenging but necessary because there are so many moving parts, such as assuring mail delivery, managing return mail, and achieving accuracy in ownership.
“It is a lot of work. We did a three-year campaign of going into the courthouse, getting everybody’s deed, and attaching it to their accounts. You have to know who is on the deed, or who is no longer on it. You must determine who can use their timeshares, who is responsible for paying, whom to bill, and who will need a payment plan. It has been a collaborative effort between us and Alex’s team.”
Implementing an effective owner-engagement program is a complex endeavor that requires dedication, collaboration, essential resources, and communications with counsel. Please send comments to email@example.com.