Jeff Berger: “Business is down 25 percent compared to 2014”POSTED: 02/1/16 7:19 PM
Blames bad (and no) decisions in timeshare and cruise sectors
St. Maarten News – Dutch St. Maarten has no timeshare owner consumer protection laws. So when timeshare resorts “screw” timeshare owners (to use a word said on-air by the island’s most popular TV talk show host, Oral Gibbes), not only does the government usually fail to act, but also the timeshare developer receives no real punishment. Thus begins a story by Jeff Berger in his electronic newsletter St. Maarten Weekly News that reaches thousands upon thousands of timeshare owners in the United States and elsewhere.
“It has happened at many resorts,” Berger points out. “The most egregious examples are Pelican Resort (when it went bankrupt); Caravanserai Resort (when it was bought at bankruptcy auction and Ray Sidhom, the new owner, emailed timeshare owners telling them that their contracts were null, void, and worthless; Sapphire Resort, where timeshare owners allege that developers Jean and Philippe Verdier do not maintain the resort properly; Atrium Resort, where new owners levied huge fees after taking over; Simpson Bay Resort, where thousands of timeshare owners left when the resort levied huge Supplemental Maintenance Fees to pay for renovations that its owner, Royal Resorts, decided to do at timeshare owners’ expense; and Royal Palm Resort, where new owner Diamond Resorts, not exactly the most revered of timeshare operators (Google them), raised Annual Maintenance Fees to absurd levels allegedly not allowed in timeshare owners’ contracts.”
In untold thousands of cases, timeshare owners have sold their weeks for pennies on the dollar – literally, Berger notes. “Consequently, many thousands of those “distressed” weeks appear to have been bought by people who previously couldn’t afford timeshares at all. And many of those people bring food with them from home, cook in their rooms, seldom if ever eat out, and buy little if anything on the island. You see evidence of this everywhere”.
Most restaurateurs Berger talked to — and most Front Street merchants – told him business this year is down 20-25% from 2014. “Why? We are totally convinced it can be traced in part back to the total failure of the Dutch side government to enact meaningful timeshare owner consumer protection legislation, which has caused many tens of thousands of timeshare owners to walk away from their timeshare weeks — and from the island itself.”
“You shouldn’t punish merchants as well,” some merchants have asserted. But fleeing timeshare owners said, “You did nothing to help us.” The island appears to have mortally wounded the goose that lays the golden egg, Berger reports rather gloomily.
and there is more: Berger also addresses the cruise tourism sector. That goes like this: “Before the Great Recession, cruise lines were doing great and ordered lots of new ships. During the Great Recession, cruise lines were desperate to put warm bodies on ships and offered record low fares. Result: big ships loaded with passengers sailed into SXM, bringing upwards of 18,000 passengers some days. Bottom line: the low demographic of many of these passengers delivered hordes of window-shoppers to town, keeping stayover tourists (remember them? They’re timeshare owners) out of town because of the congestion. So, few sales.”
Most jewelers Berger talked to said business was down big time last year, 20-25%. “SXM has concentrated on attracting more cruise ship passengers and it got exactly what it wished for, but that demographic does not buy. The harbor, a government business, saw a rental opportunity near the port so it rented properties to a few businesses there. Shoppers visit those shops, then get lured to the airport or Orient Beach instead of Front Street. Result: major drops in retail sales downtown, which translates into drops of turnover tax those businesses pay the government. All of this is a major reason the government keeps claiming poverty — poverty it caused by focusing on attracting hordes of cruise passengers who don’t buy anything, instead of supporting timeshare owners who have historically spent a lot on each trip.”
Despite its problems, the government needs to solve this quickly. It has an elephant knocking on the door and that elephant will soon enter the room. Its name: Cuba. Things are not going to get any easier,” Berger warns.