New Rental Policy for Pelican and Royal Resorts

2008 Pelican Rental Proceeds.pdf

Royal Resorts Management has made a number of changes concerning the Pelican Front Desk and some tasks that were handled at Pelican Resort have been relocated.  In addition to these changes all rentals (owners and non-owners) are now being handled through the Cancun Rental department. Royal Resorts is making changes to the rental program in different ways; one is by renting units with rates that use the “supply and demand” philosophy.  If there is limited inventory, rates will go up for that week. The idea is that by booking early owners will always get the best rate.  Another change is with regard to “extra night reservations.” These rentals are now being charged at double the current rental rate. Extra nights are considered Friday, Saturday and Sunday nights.

ISCO has never been responsible for the rental program for Pelican or Royal Resorts.  The function has always been controlled by "Royal Resorts" as part their management duties.  Rentals, for cash, will no longer be processed by Pelican Front Desk employees, as the computer system is based in Cancun.

For years, owners at Pelican (and the 8 Royal Resorts) have been renting 1-2 extra nights at the start and end of their stays to save money on airline tickets. It was great for the owner staying the extra 1-2 nights as they usually saved enough money on airline tickets to pay for the extra nights, and even their meals/drinks (i.e. the extra nights were basically free).

Unfortunately this program did not work out well for the owners who deposited their interval weeks in the rental program, and only 1-2 nights were rented (and the rest were wasted). The owners of these intervals were understandably upset, as they were getting net proceeds on only 1-2 of the 7 nights (far less than the AMF).  These owners began telling us that we must rent the entire week – not only 1-2 nights - or they would not use our rental program any longer. Now, owners, renters and exchangers both at Pelican and in Cancun who are willing to pay for the benefit can stay the extra nights without renting a full week.

To encourage and motivate owners to allow us to rent less than the full 7 nights (and meet the needs of other owners), we needed some reward (income) for doing so.  Now owners with their ”seven night” unit in the rental program receive a benefit if only part of the week rents. The previous program just wasn’t fair, and was simply going to end if we did not make a change.

So that owners are aware of the formulas, here is the breakdown for renting less than seven nights

Sat-Sat or Sun-Sun:

Saturday                                   = 200% of average nightly rate (when renting a full 7-night interval)

Sunday                                     = 150% of average nightly rate (when renting a full 7-night interval)

Mon to Wed                             = 100% of average nightly rate (when renting a full 7-night interval)

Thursday                                  = 150% of average nightly rate (when renting a full 7-night interval)

Friday                                       = 200% of average nightly rate (when renting a full 7-night interval)

Let’s assume the owner gets US$700 distribution proceeds for a full seven nights (of US$100 a night).  If we rent out the Saturday night only, the owner gets US$200. If we rent out the Saturday and Sunday, the owner gets US$350.  In both of these cases it is less than if we rent out the whole week, where the owner gets US$700.

Why would an owner ever allow us to rent less than the full seven nights?  Allowing less than the seven nights opens (expands) the pool of potential renters (and some income is always better than no income).  If somehow we can rent a combination of the nights that adds up to more than US$700, the owner actually gains by allowing us to rent less than seven nights.

What are the benefits?

Our timeshare income is improved with a new guest vs. no additional benefit from an owner/renter/exchanger staying 8 or 9 nights vs. 7 nights. 

The timeshare owner who gave up their week – now gets double the proceeds (which means some units will remain available for nightly rentals).  The owner of that interval was only getting a distribution for 1-2 nights (not covering their AMF), and in turn preventing us from renting anything but the whole week.

The resort earns more rental income (from nightly rentals and concessions) and the chance to sell Forced Re-sales and new Pelican Marina Residences product.  Our concessionaires pay us rent based upon sales. 

The timeshare owner who has an interval listed for resale has a better chance to sell it

Royal Resorts has the same policy at our Cancun properties and during March 2008 we tracked lost income at about US$33k, but booked income at over US$100k…with a higher net.

We trust that this new policy will aid more owners in finding solutions to their vacation needs.

Royal Resorts Management
March 2008

Send mail to Judy@navnet.net with questions or comments about this web site.
 

Design - Roy Martin @ roymartininc@yahoo.ca