Friday, March 6, 2015

Lifestyle Holidays Vacation Club

A few years ago, my sister visited Puerta Plata, Dominican Republic and fell in love with not only it, but one of it's residents.  She visited the relatively new Lifestyles Resort and she and her girlfriend attended one of the sales meetings.  That is if you can call a Time Slime pressure sales tactics a meeting.  My sister told me about this fantastic investment and I told her it sounded like a glorified Time Share.  She disagreed.

Now my sister and her friend are not stupid people by any means, but finding oneself on a beautiful island, enjoying a fantastic well-deserved holiday with music and drinks, tends to clouds one's judgement a little.  Needless to say, they both ended up buying memberships to the club for 50 years.  My sister bought the gold membership (I believe) for approximately $35,000, paying 1/2 down and committing to payments for the balance.  Her friend paid a little more for the platinum membership.

It wasn't long after that the 'Club' enticed them into buying one of and exclusive 50 shares in the resort; with promises of far greater benefits while vacationing, and not only that, the opportunity to put their shares to work for them in the form of a rental business.  The cost was only a minimal $85,000, and after a discussion back in Canada, the girls decided to buy in and form a business to recover their investment.

The promises made were:
1. Only 50 shareholders in the club
2. Dividends paid annually at $5,000 per share
3. Unlimited access to certain VIP beaches and restaurants only for shareholders
4. Availability of Villas and Cart Transportation on all of their vacations.

5 Years Later, what they got:
1. Almost 1,000 shareholders in the club
2. Dividends given in benefits at the resort, not cash
3. Now there are 1,000 shareholders using the VIP beaches and restaurants, not 50
4. Villas and Carts have to be fought for, and reservations not honored.

The girls have now discovered that they were given a false set of goods, and that their investment will not pay off in the way they had hoped.  The only way they can recover any of their money is to plan vacations at the resort (during non-peak periods to take advantage of their benefits), and use their dividends to pay their villa fees and all-inclusive fees.  At least in this way they can recover at least some of their investment.  They could still send guests using their share, but with services declining because of  increased numbers of shareholders, they would be embarrassed to send anyone.

I understand the owner, who lives on the resort some of the time, now has bodyguards on a 24 hour basis.  I think he needs them.

The moral of the story - don't be pressured into buying into these schemes.  Take a break from the salesmen and give it some serious thought.  Some people do like this form of vacation.  Finally, get everything in writing, and don't let them distract you when reading the contract.  I think I prefer living in Mexico for 7 months a year on just under $5,000.

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