In our continued efforts to review the Grand Luxxe Timeshare and the different timeshare products offered by Vida Vacation Club, we felt it best for our readers to get a better understanding of the Ten Year Registered Week Contract Offer compared with the Twenty Five Year Registered Week Contract offer. The main question we cannot answer at this point is why the timeshare company Grand Luxxe Nuevo Vallarta has dramatically changed the contract terms from the original written offer? We like to think that in business the ideal result of buying a product is a win-win situation for buyer and seller. In this particular case, we will leave the reader to deduce their own opinion(s) if such is true in regards to the current Grand Luxxe Nuevo Vallarta 10 Year Registered Week Contract offer!
Q. Is there a “real” tangible difference between the two?
A. The tangible difference noted is that the Ten Year Registered Week contract cannot be renewed. It is only for a period of Ten Years. The Twenty Five Year contract Registered Week can be renewed 3 additional times to make a term of 100 years. If a buyer today is buying a one Registered Week contract compared with the previous contract terms then instead of 100 Registered Weeks(over 100yrs) the buyer is only purchasing 10 Registered Weeks(over 10yrs). We have noted that the price for the 10 year agreement is not 1/tenth the price of the old 25 year registered week renewable contract as it should be when comparing apples to apples. Interestingly enough, it is selling for much more money than the older 25 year registered week agreements!
Q. What are the differences, if any?
A. A week that is registered has a public deed number and a week that is not registered does not. A week that is registered with the authorities denotes that the necessary unit/inventory has been allotted for that week purchased. If you wish to see if a developer is overselling, simply look at the amount of weeks sold compared with the amount of units that have been registered with the proper authorities. After Ten Years the public deed terminates but not with the Twenty Five Year contract if client chooses to renew by 5 extra maintenance fees per registered week. The Ten Year contract does not offer the buyer the option to renew. The new agreement only offers the buyer to renew the “Certificate” Weeks which does not have a public deed number. In fact the “Certificate” Weeks program clearly states that it is without cost and without obligation to use the program. It is an independent program that is not related to any other product, service or contract of any kind. Could this be interpreted that it is not related to the Registered week that is available for 10 years?
Q. What are the potential risks posed to the buyer of such contract terms?
A. The most obvious risk would be in the ability to make reservations after the registered week term terminates. Does the reservations department currently take priority in reserving the registered weeks first during the peak seasons? That would give a clue as to how the company prioritizes the different classifications of inventory. The main point of a deed is to guarantee the buyers “inventory”. If the “Certificate Weeks” are not registered what controls are in place to prevent an overselling of the inventory which could make reservations even harder to come by? Another potential risk is that the available inventory during the most expensive seasons could go to the highest bidder who generally is a non timeshare owner looking to rent and is willing to pay more than the lower weekly maintenance fee amount. Another would lie in the buyers feeling the need to make another unexpected upgrade to retain ownership of a registered week shortly before the expiration date of the Ten Year Contract Agreement. Another is the future resale value of the Ten Year Contract offer. If the “Certificate Weeks” reservation requests are restricted during the peak season months then for travelers during those months an upgrade every ten years will have to be factored into the financial equation. How much will the upgrade and the new maintenance fee be?
Q. What are the benefits to the developer of such contract terms?
A. The developer could benefit simply by the contractual need for owners to upgrade to keep ownership of their registered week(s) for an additional ten years. The unknown future upgrade price should be more expensive so the developer will make out on clients who choose to upgrade as well as from clients who choose to not upgrade due to the increase in price. Then the existing Grand Luxxe clients who don’t upgrade and are left without a registered week they now leave space for new fresh sales to new clients. Making new fresh sales on units that are already built and paid for will result in a higher profit margin 10 to 15 years from today for the developer. The other avenue the developer could take is after the ten year periods end then he/she will give more inventory to travel agencies and make the switch from a mainly timeshare operation to a part timeshare/part hotel which is probably the best overall business model in terms of cash flow for any developer. Isn’t that term called “making money on both sides of the fence”!
Q. What are the possible risks going forward for buyer?
A. The buyer could feel that they now have to spend much more money than earlier anticipated every ten years to protect their family vacation investment. How will this factor into my retirement funds? Will somebody else in the family have to foot the upgrade ten years from now? If a future upgrade is out of the question and peak season access is not available then changing the vacation schedule from February to an off-season month like May will have to be considered. Due to the terms of the signed agreement each buyer agreed to the terms and conditions of the product. A quite critical risk is that the perceived resale value of the contract would greatly diminish since prospective buyers would have to factor the unknown future upgrade costs based on the written contract. This would present the two following perspectives: 1) The perceived value of a Grand Luxxe contract without Registered Weeks and only “Certificate Weeks” to use and 2)The perceived value of a Grand Luxxe contract with Registered Weeks but with the understanding of the need to have to pay substantially more money every ten years to retain the same rights.
Q. What are the possible risks going forward for developer?
A. The biggest risk in our mind is having upset clients who find themselves without legal options since the signed contract stated the agreed upon terms and conditions. If the company follows the written contract to the letter, so to speak, then members who are left with Certificate Weeks will have more restrictions with regards to making reservations. The contract also states that the registered week is purchased for ten years and that the certificate weeks are provided at no cost. But let’s face it, the developer is in business to make a profit so chances are exceedingly high that all future business decisions will be viewed and taken from two angles: 1)Will this decision be the best in making the company overall more money in the end?, and 2) Best method of executing decision so as to maximize company profits all the while limiting damage to the brand.
Being that our current topic involves the timeshare industry, public perception may be cynical but we challenge you to genuinely think of the factors involved. As we said earlier , we would leave it up to you to make your own conclusions and/or opinions as to what the future holds in store for the Grand Luxxe Nuevo Vallarta Ten Year Registered Week Contract Owners.
(The above photographs are not to be taken as representations of Grand Luxxe Nuevo Vallarta, rather they are random photographs of Puerto Vallarta)
For more resourceful information about Mexico Timeshares go to Mexico Timeshare Advocate.com. A resource that is Always Advocating For You!