In a brief, one-way zoom “meeting”, Cristobal Villalobos, director of Excel Hotels and Resorts gave owners the bad news. He told them they would not be receiving any net income for 2019 and 2020.
The owners are furious. The business had a fantastic year in 2019 – the hotel occupancy was high and the money flowed in. With a contract that is based around a “profit-share” with the hotel, this should have been a bumper year. After being paid, albeit very late for 2018, they expected a good year for 2019.
Instead, owners were told that the resort made a loss because of non-payment of a debt from Signallia Marketing Distribution. Many owners had no idea what this referred to and had never heard anything about this before. One owner described this as “bulls*!t” and another as “smoke and mirrors”. They are both correct and we explain why below…
Who has taken the money?
Our simplified explanation of what happened is as follows: Signallia and Excel were part of a group of companies related to the notorious failed timeshare group Silverpoint Vacations SL. Far from being independent, we believe they were controlled by the same individuals and have been used to syphon money away from the people to whom it is really owed. In 2019 it seems as though money went to Signallia when clients booked their holiday and then wasn´t paid to Excel.
Subsequently Excel has written to owners to specify that the amount of this “bed debt” was a massive €3.234.971. This gives a convenient excuse for Excel to not have any profit to share with the property owners.
During the meeting Cristobal repeatedly highlighted the “generosity” of the hotel for paying community fees and utility bills on behalf of the owners. But no-one is fooled. This is not altruism. If the complex does not have water and electricity, they cannot run a licensed hotel. Likewise, if the community fees are not up to date, those apartments do not have the right to vote in the owner´s community and Excel automatically lose their control.
Do NOT sign any new contract from Excel / ONA Group
In conclusion we cannot stress enough – owners should NOT be tempted to sign a new contract with Excel Hotels and Resorts, or their parent company ONA Group. The new contract offers a “fixed 3% on the original purchase price of the apartments”, however our calculations show that in many cases owners will receive a NET ZERO after all expenses are deducted. What is worse is that the new contracts are for a duration of 10 years!
To try to sweeten the deal and trap people into another terrible contract the hotel is offering to pay the expenses of the apartments for the first year. Therefore, the first year will give a true “3%” return. But this does not compensate owners for the 9 years of low or nil returns to follow. The contract will render the apartment unsalable at a reasonable price.
What can you do?
Our advice is to make sure you officially give notice not to renew the current rental contract. Most owners have until mid-2021 to do this. You can contact The Nordic Consulting if you want one of our lawyers to convey this request officially.
Another option is to take Excel to court, for non-compliance with their rental contract obligations. Our lawyers have already evicted Excel from an apartment on the complex and we expect to see more evictions shortly.
Finally, we urge all owners to unite and support the project being run by Trudy Woolley. If you own in Beverly Hills Club, make sure you register on the website BHCOwners.com – Trudy will then contact you with advice on how to delegate your proxy vote to put control of the community back in the hands of the owners.