Lemonjuice Solutions has provided key indicators for timeshare resorts during the COVID-19 crisis

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Older resorts should begin a process for evaluating their options to determine their viability

This current crisis is bringing many of those longer-range concerns into more immediate focus.

R. Scott MacGregor, Senior-Vice President/COO, of Orlando based Lemonjuice Solutions, LLC brings into focus the need for timeshare resorts and their owners’ associations to carefully consider short- and long-term contingencies based on evolving conditions caused by the pandemic.

Consumer travel plans will affect maintenance fee payments
Resorts need to gauge the impact the crisis is going to have on the willingness and ability of travelers to go on vacation. We are already hearing, anecdotally, that older travelers may be postponing or shortening their trips. With the hard-hit economy, many folks will have to recover lost income before they spend money on leisure travel. So, we believe that there is going to be some longer-term impact particularly on those resorts that were already marginal in various aspects of their operations. They may have been relying too heavily on rentals vs owners for viability. This is certainly going to be impactful to them in the long term. It is going to be interesting to see how maintenance fees hold up as we go into 2021.

Maintenance Fees and Other Revenue
Overall, we have been seeing declining revenues from maintenance fees. As a result, resorts are trying to fill in the gap with rentals, leases, and the sale of short-term ownership products. Rental revenues for the year have already been severely impacted. So, we are carefully watching booking rates, pick-up rates, and rental rates as leading indicators for 2021. In the longer term, we are going to focus on maintenance fees as we get into the new billing cycle, on defaults and on the timeliness of payments.

Longer Range Concerns
This current crisis is bringing many of those longer-range concerns into more immediate focus. Many resorts were already behind in scheduling major investments in things like windows, roofs, parking lots, and technology. For most resorts, that revenue gap is widening, thereby leading to higher maintenance fees, higher special assessments, and/or lower funding of reserves.

Timeshare resorts need to explore options
Lemonjuice Solutions can help timeshare resorts re-evaluate their assets, their resources, and their options in order to focus on a long-term plan for sustainability. Each resort is dealing with unique circumstances. Resorts that lack the expertise or resources to undertake the planning that is required can be at a higher risk financially and possibly face insolvency. Trying to maintain the status quo, will most likely place a resort in a high-risk category. During a crisis such as what we are experiencing, contingency planning is essential. Lemonjuice Solutions takes a customized approach to evaluating each resorts’ assets and providing the best options to move forward.    

Access to Capital
Access to capital is going to be a major concern for many older resorts. Investors and lenders will require the resorts to demonstrate their ability to repay loans and declining ownership and an unstable rental market will make that difficult. Bulk-buyers and renters may also be reluctant to commit to funding if timeshare sales do not rebound or if the operating shortfalls affect the physical state of the property. Resorts that are dealing with operating budget shortfalls, will have to consider restricting, right-sizing, and/or selling of their real estate. Lemonjuice Solutions can assist resorts in determining the best path to finding capital or repositioning the property. Resorts need to evaluate their options prior to the end of 2020, because of all the uncertainties of what conditions will be like next year.

Lemonjuice provides customized and strategic options for timeshare resorts. For information visit htpp://http://www.lemonjuicesolutions.com or contact R. Scott MacGregor, Senior Vice-President, COO at 321-236-6663 or scott.macgregor@lemonjuice.biz

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R.Scott MaCGregore