TIMESHARE operator Diamond Resort International has stepped in to defend its record as opposition mounts to increases in management fees due to be paid this month.President Simon Crawford-Welch has assured members of his timeshare points club that their concerns will be taken seriously.
He said: "Listening to and communicating with our owner and member base is always a primary component of our strategic direction and consumer-centric operational approach, be it through one-on-one discussions, various forums, e-mails or through third party mechanisms such as newspapers like Scotland on Sunday."
As a points-based timeshare
club, owners can use their points to buy holidays at any of the 133 worldwide resorts, which even disgruntled points-owners admit are of a very high standard. Members are also protected by timeshare
Facilities have expanded considerably since the original owner Grand Vacation Club, from which many Scottish consumers bought their points, started with only four resorts. Diamond Resorts International acquired the company in April 2007.
Points owners are obliged to pay an annual management charge and it is recent increases in these fees which has caused concern. Open meetings between the company and members in Lancashire on February 2 and Staffordshire on February 3 look set to be stormy.
Members claim they have risen by around 37% compared with last year, although DRI maintains that on average the increases are closer to 19%. The discrepancy may be due to an interim levy last May. As such, compared with the levy in January 2008, the increase may be nearer to 37% for some members but only 19% when the fees for the whole of 2008 are compared with those being demanded this month.
The company points out that the fees are discussed and agreed by members of the owner committees at every resort. DRI is effectively a management company.
The points club, which in Europe is called the Diamond Resorts European Collection, is owned by the points owners in that investments and assets are held in a trust controlled by an independent trustee and operated for their benefit. In Europe, DRI owns 10% of the points, with private owners controlling the remaining 90%.
DRI's European director of legal services, Susan Crook said: "The setting of the budgets is a transparent procedure. Every report committee is provided with a detailed draft budget at a dedicated budget meeting and committee members are able to discuss, dissect and amend them as appropriate. There are a minimum of two timeshare
owners on each committee with fixed property or fixed week timeshare
and one points owner. The maximum company representation is two. The majority of the members that make up the committees are British."
She said that fees had increased to fund a refurbishment programme, bills had climbed in general, particularly utilities, and labour costs in Spanish resorts had soared following new agreements with the unions.
But she confirmed, as Scotland on Sunday reported last week, that the annual charges had been subsidised by the previous management company and this subsidy had now ceased.
She said: "The new owner, Stephen Cloobeck, did not feel it was appropriate to subsidise the management charges. If expenses are legitimately incurred for the benefit of the resorts then he believed that the members should pay them."
An action group of more than 40 members has now formed in Scotland and plans to join forces with another larger group operating south of the border.
They remain unhappy with the fee increases, and many would like to rescind their points, but the company says this is against the terms and conditions which they signed when they joined.
According to the company, they can dispose of their points, by selling them, giving them away or converting them to a fixed week and trying to sell this via a resale agent.
Crook said: "We note that some members say they are unable to sell their points. However, we continue to sell our product successfully to new members and have some difficulty in accepting that they are unable to do so."
Members are only able to rescind their points if someone dies, becomes bankrupt, is over 75 or has health problems.
Crook added: "DRI is prepared to listen and consider every member's request to relinquish his or her membership. Indeed, we believe we are more considerate in taking into account the personal circumstances of our members than most other businesses who have entered long-term contractual and financial commitments."
Nevertheless, many members are very unhappy at being tied into what they see as an open-ended arrangement, which locks them into rising management fees until 2054. They are adamant this risk was never pointed out to them when they bought their points. Particularly badly hit are any owners who took out loans to buy into the club.