It is a well-known fact in the timesharing industry: One of Wyndham’s long established business model’s is to absorb and gain full control of timeshare resorts. By controlling the Association Boards, each resort’s agenda becomes… Wyndham’s agenda.
Why is this bad for KBV? Once Wyndham owns enough weeks (they already own approximately 20% of our resort), they will have the votes to gain greater and greater control of our Board. Look how quickly they’ve gained a majority control of our board…. in just the past two elections! And, in 2015, even though Wyndham was stopped from acquiring additional KBV intervals (by our Owner controlled board at the time), now that they have control of our Board, one can imagine that someday soon that restriction will likely be lifted?
The decisions made by a Wyndham controlled Board will be for the benefit of Wyndham: Our maintenance fees, Wyndham’s fees, who gets the rental revenue, your reservation rights, etc., etc. Imagine having a Board that doesn’t care first and foremost about our interests and… we can’t vote them out?
It’s not as though Wyndham wasn’t given a chance. In 2006, Wyndham bought their way into KBV when they acquired the lobby/clubhouse, maintenance building and other facilities from the original developer. In the process, Wyndham was granted a 10-year “sweetheart”, no-termination contract (except for cause) to manage our resort. Over the next few years, Wyndham, using their Foreclosure Agreement, acquired 20% of the KBV intervals for their Wyndham Vacation Club (instead of reselling the intervals to individual Buyers).
During this same 10-year period, Wyndham underperformed as our management company. Rental income was anemic, bad debt soared, Action Items weren’t completed on a timely basis and on-site activities declined (or were designed specifically to support Wyndham’s sales efforts). Instead of managing our resort at the superior level that it deserved, Wyndham focused more on “harvesting” our Owners and exchange guests to take timeshare tours and purchase Memberships in Wyndham’s timeshare club.
Finally, in early 2016, after a decade under the control of Wyndham, our Board of Directors was able to fight back. Your Board sought out a new management company with a clear business model to make our resort the best it could be – with a track record to prove it. The Board gave Wyndham notice to terminate their Rental, Foreclosure and Management Agreements, and entered into agreements with an independent management company, Grand Pacific Resorts Management, to become effective January 1st, 2017. In the one short year that our new management company has been in place, services and performance have improved dramatically. Rental revenues have more than tripled, satisfaction scores are climbing and overall management of our resort has improved dramatically.
How did Wyndham respond to being rightfully terminated? By using their voting proxies to elect and appoint Wyndham employees and supporters to our KBV Board. Today, Wyndham controls or influences 80% (4 of 5) of our board seats (yet still only owns 20% of KBV’s intervals). This leaves only Trish Harrington on our Board as the one truly independently elected KBV Owner!
Do any of us really want to go back to Wyndham (and their massive conflicts of interest) as our Management Company? We don’t think so, but that’s exactly where we’re headed if we don’t act NOW!