In our continued efforts to review the Grand Mayan Timeshare and the different 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 Mayan Timeshare” has dramatically changed the contract terms? It is a general rule of thumb in business to think that the ideal result of buying a product is a win-win situation for buyer and seller. Let’s proceed with our analysis of the Grand Mayan Timeshare 10 Year Registered Week Contract!
Q. Is there a “real” tangible difference between the two contract offers?
A. The tangible difference noted is that the Ten Year Registered Week contract cannot be renewed as the Twenty Five Year Registered Week contract. 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).
Q. What is a registered week?
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 particular week(s) of inventory 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. With regards to the Ten Year Contract the registered deed will terminate in ten years and cannot be renewed. However, the Twenty Five Year could be renewed by paying an additional fee. The new agreement appears to only offer 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.
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. When making reservations one would have to decipher if the registered weeks have more priority. 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? 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 potential risk would be that one may feel 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 point to consider what will be the future resale value of the Ten Year Contract offer? If in the future the “Certificate Weeks” do not fulfill the buyers reservations expectations resulting in the need of investing more money, such information would have to be factored in when analyzing the real worth/value of the timeshare with regards to resale. The obvious question that would come to mind for the new buyer would be, “How much money will I have to invest 10 years from now?
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 benefit from clients who choose to upgrade as well as from clients who choose to not upgrade due to the increase in the registered week sales price ten years later. Then the existing Grand Mayan clients who don’t upgrade and are left without a registered week they now leave space for new sales to new clients at a higher price point. Making new 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 terminate 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 hotel developer. I think the correct term to explain such action is-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 or calculated every ten years to protect their family vacation investment. How will this factor into the retirement funds? Will somebody else in the family such as the children have to foot the additional investment cost ten years from now? If a future upgrade investment 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. There are certainly worse things to accept in life. For some the situation may pose a critical risk in the perceived resale value of the contract. For some resale buyers it would greatly diminish the perceived market value since prospective buyers would have to factor the unknown future upgrade costs.
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 contract states 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 experience additional 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)Whatever decision that is made be in the best interest overall of the company and its financial performance going forward, and 2)What would be the best method of executing whatever decision that is made so as to maximize company profits all the while limiting any possible 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 ALL the factors involved when analyzing possible future outcomes.
For more resourceful information about Mexico Timeshares go to Mexico Timeshare Advocate.com. A resource that is Always Advocating For You!