| Ever increasing timeshare fees are like the weather… …everyone complains about it, but it seems nobody can do anything to change it. Well, until now. Meet Norman Zwicky. He’s a retired postal worker in Arizona who sued Diamond Resorts International just so he could find out the answer to a basic question: Why did Norman’s annual fees go up so much after Diamond took over his timeshare? Enjoying his timeshare at Kohl’s Ranch in Payson, Arizona used to be easy for Norman. It was the old-fashioned type – Norman bought a share of an actual property that he used every year. But in 2010, Diamond bought Kohl’s Ranch and grouped it with a bunch of other properties to form the Premiere Vacation Collection. As the lawsuit recounts, Diamond then converted the traditional timeshare properties in the collection to a points system. We can all forecast what that meant for Norman. “Under the [Diamond] regime, however, the cost of Zwicky’s Points and Annual Assessments were roughly triple what he paid to book a ten-day vacation at Kohl’s Ranch before [Diamond] acquired the resort…” “Therefore – including his up-front Points investment amortized over the period of seven years – Zwicky was effectively charged over $600.00 per day to enjoy an annual ten-day vacation under [Diamond’s] Points regime.” “Moreover, $600.00 per day far exceeded the ordinary commercial rates that Diamond charged the public for direct booking for all or most of the Component Sites in the Collection.” “For example, room rates during the March 2019 high season, as quoted for a direct booking of units in the Collection to the public through Expedia, were merely $132.00 at the Kohl’s Ranch Component Site, $199.00 per night at the Varsity Club of Tucson Component Site, and $291.00 per night at the Los Abrigados Site in Sedona, Arizona.” That put Diamond’s entire fee structure on Norman’s radar, so he sued to find out more. Norman’s lawsuit revealed that Diamond regularly hid corporate overhead costs in the annual assessments that were supposed to only cover the costs directly related to maintaining the timeshare properties such as maintenance, local taxes and general improvements. “[Diamond] invariably hires [Diamond Resorts Management], its own wholly-owned subsidiary, as the Managing Agent for [Premiere Vacation Collection Owners Association] and for each Component Site.” That’s the biggest hazardous condition alert we’ve ever seen. “The amounts [Diamond and Diamond Resorts Management] actually charged Private Members for management fees included [Diamond’s] Hidden Corporate Overhead Subsidies, thereby grossly exceeding the 15% cap on management fees specified by the Plan.” In other words, not only were Diamond timeshare owners being forced to pay overhead expenses for Diamond’s corporate operations, in addition to maintenance expenses for their property, but they also had to pay an additional 15% markup on the hidden corporate costs they should never have been charged in the first place! No wonder Norman’s annual assessments TRIPLED! “[Diamond] carried out this fraudulent scheme for many years…thereby extracting millions of dollars’ worth of massively inflated Annual Assessments from Private Members by automatically, systematically, deliberately, and illicitly passing on massive amounts of [Diamond’s] Hidden Corporate Overhead Subsidies to each Private Member.” Even Diamond had to admit it couldn’t wait out this storm, so they agreed to a multi-million-dollar settlement with Norman and other Premiere Vacation Collection owners. It seems like Diamond only responds to high pressure systems, so let’s email Mark Wang to find out why annual assessments continue to rise at Diamond. He’s the CEO of Hilton Grand Vacations, which purchased Diamond Resorts in 2021. Mark’s email is mark.wang@hgv.com We should also see whether markup schemes like Diamond’s prevail at other timeshare companies. Jason Gamelought to know. He’s the President and CEO of the American Resort Development Association (ARDA), which represents timeshare companies in Washington. His email is jgamel@arda.org Upset with the fee climate at your own timeshare? Use the information in this list of ARDA VIPs to let your timeshare’s leaders know. Have timeshare turbulence of your own to report? Put it on our radar at info@timesharefacts.com. PS: Follow us on social media. Twitter Facebook Instagram |
