Dear Meadow Lake Owners,
We have received many questions in regards to vision and direction of Vacatia’s ownership of Meadow Lake Resort. With a goal of increased communication and transparency we would like to share our response to current questions of Meadow Lake owners.
Since my initial Zoom call I have engaged with some owners individually, but I would like to take this opportunity to provide all owners with some of the explanations and updates that I felt all owners would appreciate. During this time, the team and I have been hard at work aiming towards our vision for the company.
Our vision is quite simple, but it will take tremendous time, resources, and support to iterate on the program and execute well. For reasons I mentioned on my Zoom call, the old way of selling timeshares needs to change as the current consumer makes purchase decisions differently. Ultimately, we need to give customers flexibility and choice so they can engage with Meadow Lake Resort in a manner that fits their lifestyle – either as a timeshare owner, short-term member, or a renter – all of which benefits the owners long-term by generating revenue to offset dues and developing a natural customer lifecycle so owners can choose to enter into or exit from their timeshare more flexibly.
The short-term membership product will start as a straight-forward annual program. A member selects a week to vacation at Meadow Lake Resort, and also receives “Vacatia Points” which can be used to book a stay at any participating managed/affiliated timeshare resort when the property is not expected to be full. Optionally, members can choose to use their Vacatia Points to book through the Interval International network for a larger number of resort options. We hope many members are happy with their experience and choose to renew every year, or upgrade to timeshare ownership.
Because the membership program is annual, it falls under rental governance rather than real estate. “Vacatia Points” are structured similar to credit card points or other pre-paid currency types, rather than timeshare points-based clubs. It works on top of the existing fee simple structure that exists today. Thus, there is no need for a complicated document upgrade or developing a real estate trust (such as Wyndham’s club model). The membership program can be sold online or by any employee (not just licensed real estate professionals), giving us more flexibility in sales & marketing. It also allows an owner to augment their ownership if their additional travel needs are short-term. While our lawyers made sure the program is structured as a rental, our goal is to attract members that have more of an ongoing connection to Meadow Lake Resort than a one-time transient renter, so we can grow and strengthen the tight community.
To enhance the stay experience for our owners, we have been busy implementing several initiatives at Meadow Lake Resort. We recruited a more experienced hospitality GM, as you are aware, and Michael has made major improvements in day-to-day operations and staff. His work will never be done, so please continue to provide input to how things can be done even better. Our technology team is in the process of making major upgrades to your infrastructure. Examples include upgrading your property management system so it can better communicate with other technology systems, such as a housekeeping and maintenance app that makes the team much more efficient and they are able to receive/reply to owner requests by text. We are training the team and testing out the integration and will surely let the owners know when they check-in of this convenient benefit when we’re ready. Michael is also working closely with our restaurant manager to upgrade the menu, wine list, and service to develop a popular “watering hole” for our owners/members and the local community to meet and mingle. We also instituted a customer review software that pulls reviews from online websites, RCI and direct feedback into one convenient place. Michael reads and responds to each review and ensures the operational improvements address the aggregated trends.
These upgrades provide the foundation for us to continuously improve the experience at the resort. They also allow us to support the soon-to-launch membership program I described previously. We are aiming for a summer launch, fingers crossed. There is significant behind-the-scenes work in progress to make this happen, including integrating with third parties such as Interval that provide certain program benefits. We noticed that third parties all are slower to respond as most travel-related companies unilaterally were closed or reduced their staff because of the impact of COVID to their business.
We will continue to improve on our communication with owners. During the pandemic, we tightened our resources and prioritized tackling the unexpected as issues came up. Thankfully, there appears to be a light at the end of the tunnel although we remain vigilant. More frequent owner communication is a renewed priority for us. Surely, we will have to tune-in on the right amount of detail, so we are informative without distracting from the key interests/concerns of most owners. I will ask our team to keep your recommendations (website, newsletter, social gatherings when pandemic lifts, etc.) in mind.
Regarding the document refresh project, the process and the method of voting has been vetted by our Montana counsel. Like other areas of business and law, there has been more active technology adoption including electronic voting accelerated by the realities of the pandemic. I’m aware there were several discussions prior to Vacatia’s involvement about the targeted changes from the Lynch family, focused on creating financial fairness and eventually owner flexibility.
The document update does not change the fee simple ownership of the affected owners. Owners who are happy with what they have can continue their ownership as-is. At present, the rotations are not allowed to be subdivided. This inflexibility has prevented owners from downsizing their ownership or selling/transferring their timeshare in smaller allocations.
At present, St. Andrews owners are only allowed to use amenities during their owned weeks as stated in their documents. So, if local owners are using Kintla, Rocky Bar-O, pools, and/or hot tubs outside of their timeshare week, technically they are in violation of the governing documents. While restriction should be enforced during peak times (or COVID), we feel that allowing locals like you to use the resort amenities at other times is the right long-term answer. This is the impetus for this change and hopefully one that will be embraced by our local community too.
The potential for pets has been an item of great interest to a large number of our owners. At present, the policy is no pets except for ADA mandated service animals. We want to be clear that the proposed change will not allow renters to bring pets unilaterally. It simply allows MLDC to create a pet policy in units in which all owners consent to the change.
A main focus of these changes is to get delinquent inventory productive again and decrease the cost to current and future owners. The right of first refusal that you mention is a tool used by many vacation ownership companies to ensure that scam groups do not victimize owners with false promises of exit, subsequently with deeds transferred to a “viking ship” that makes it difficult and expensive to get the deed returned. This particular scam is a growing concern of the entire industry and I speak to my timeshare colleagues frequently about this problem at our ARDA board meetings.
Owners will not need any permission from MLDC to rent and, as always, can freely let family and friends use their units. The change is for 3rd party rentals to use MLDC approved platforms so that MLDC can control reputation, service quality, and offer price parity which we are contractually obligated to do in all major rental channels. We also know from experience that if owners are looking to rent to outsiders (not family or friends), we can generate more revenue for them through our distribution capabilities.
As far as managing delinquent inventory, this is an expensive and burdensome task, as the St. Andrews board knows unfortunately all too well from dealing with their one delinquent unit. We believe we should insulate owners and volunteer board members from this headache as much as possible. MLDC currently serves the external HOA boards as a vendor for maintenance and accounting, and ensures that all dues are paid to external HOAs so they do not have to deal with delinquency on their books. To no surprise, I have confirmed from our employees and the Lynch family that our volunteer HOA boards have not formally expressed willingness to take on the responsibility of accumulating delinquent inventory. Our website (under the news tab) includes materials that were sent to St. Andrews owners that detail each change, the current problem it is addressing, and how it improves the situation.
Regarding financial questions, I will start with addressing the savings from resort closure. As you are aware, the closure did not save us on fixed costs but we were able to save on variable expenses that go up/down based on occupancy. We calculated the savings from these variable expenses and credited it back to interior reserves. Trying to determine which of these savings should go back to exterior vs. interior reserves, or how to fairly split up the savings among different owners and associations was too complicated. Refunds, when split between all owners, were not meaningful enough to incur the costs to issue checks. We chose to credit to interior reserves at it was simple to implement and fair to all owners.
I wish I can snap my fingers and execute on our initiatives flawlessly, yesterday, but developing the building blocks to accomplish our “simple vision” takes time and iteration. I hope to have our owners’ support while we are working to ensure continued vibrancy and improvements at Meadow Lake Resort.
Best Regards,
Caroline Shin
CEO, Vacatia