As timeshare HOAs finish their 2021 budgets, they need a contingency game plan for their resorts and their owners, especially during the COVID-19 crisis. Panelists Michael Edwards, General Manager, The Cove at Yarmouth; Lori Entwistle, Managing Agent/General Manager, Scottsdale Camelback Resort; Lee Johnson, President, Premier Resorts Group; and Joseph Takacs, President, TheMVPService offered their insights during the TBMA Conversations Series webinar Strategies and solutions for monetizing HOA owned inventory, held on October 1.
2021 outlook for HOA owned inventory from deedbacks and defaults
Monitoring delinquency rates is something all HOAs do in a normal year. However, 2020 was anything but normal. Plans need to be created for resort owners who may be on the edge, and not able to stay current with their payments.
One idea is autopay options, suggested Lori Entwistle, Managing Agent/General Manager, Scottsdale Camelback Resort. It’s an initiative to delay late fees for a short period of time.
“Working with owners to be able to do what’s best for the resort regarding deedbacks is a necessary strategy”, Lee Johnson, President, Premier Resorts Group proposed. There are definitely steps to be taken. Johnson pointed out that when owners are delinquent, they most-often have money, but do not know who to turn to. He believes the goal is to get them to “either keep paying or at least get the deed back to the association so it can be sold again.”
Expecting a one-point increase in delinquencies, Michael Edwards, General Manager, The Cove at Yarmouth, said, “We’re going to engage owners after the delinquency date and work with them on a one-on-one basis. Time will tell. If you have a new delinquency, you have to do some outreach and find out where they’re at.”
Joseph Takacs, President, TheMVPService agreed. “Make sure you’re on the front line talking to people,” he said. “You have to be there for them.”
Potential revenue gaps due to shifts in current sources
Timeshare HOAs certainly do not want to be in a position where hundreds of people quit paying. But people are struggling, as are HOAs that are looking at decreased revenue and decreased sales, according to Edwards.
However, Johnson believes there will be shifts. “It’s our job to bridge that gap,” he said. “Creating a situation with deedbacks where revenues are generated for the HOA versus having to go down the road to pay the cost of foreclosures.”
Entwistle shared, “We had an on-site resale company for the last twenty-plus years. For many years we sold fixed weeks. Arizona is beautiful in July for some; not all. They would purchase those for exchange. They were picking up inexpensive weeks because they were going to exchange them. That worked fine for a while as well.” But now, the consumer has a different mindset—more vacations, for shorter periods of time.
Edwards also feels that a traditional-week buyer is kind of gone by the wayside. “A term lease could be half of your maintenance fee,” he said. “That’s going to fare way better than any other rental program you could ever do in the off-season.”
Emerging resale products to fund operations
Blending in-season and off-season inventory gives the resort their own little club, according to Johnson, who is helping Entwistle with resales. “The term-based product is a collective breath of fresh air for consumers,” he said. “It’s a better fit for the grandchildren’s lifestyle as well. Owners could control how they want to move forward with the legacy of their ownership without kids having the timeshare forced upon them.”
How are resales being marketed?
Stepped up social media is now providing more opportunities for people to come to the resort, according to Johnson, even more so than pre-pandemic. That’s where flexibility and technology come in. When people want to buy, they want to know what the unit looks like. Virtual tours can be given via smart phones.
Takacs pointed out consumer access to 3D tours, unit floor plans and site maps are helping consumers as sales have become more virtual. “What’s the view from the third deck? Go to our website, I’ll show you,” he illustrated. Zoom calls are another way for people to learn about a resort value proposition and need to be something resorts are engaging in more and more.
But it’s a two-way street, according to Edwards. “Sales reps always want to get in front of potential customers as aggressively as possible. They’ll book as many as possible,” he said. “I try to limit that and see what’s reasonable. After twenty-eight years, I know the owner base and what they like and what they don’t like. It needs to be approached as ‘come and talk to us.’ The good way to get the ball rolling.”
Resorts maximizing communications with owners and other guests to monetize inventory
The virtual tools used to market resales also help resorts maximize communications. To get the message out, Entwistle encourages using as many methods as possible – newsletters, email blasts- and be consistent with the same logo and the same bullet points.
Edwards agrees that newsletters are very important, especially when advertising your bonus rates during off-seasons. “Groups love to come in the off-seasons,” he said. “We see it all the time.”
And while maintaining newsletters and stepped-up social media are great tools, Johnson also feels that all of it comes back to having a reason to place a phone call and explain what the options are.
Takacs shared that he has heard that 75 percent of people don’t read what is sent to them and he hopes it’s not true. “We’re here to help,” he said. If we continue to offer written material and add on virtual, we give our owners multiple ways to hear from the resort and stay in touch.