Do Hilton Grand Vacation need to ‘offload’ up to 40 Diamond resorts?
Worrying analysis from timeshare industry experts suggests that Hilton Grand Vacation may have to unload around 40 recently acquired Diamond resorts, despite retaining the 380,000 Diamond members
Huge takeover, but initial concerns
In August 2021 Hilton Grand Vacations (HGV) announced a $1.4 Billion takeover of Diamond Resorts, incorporating 92 Diamond Resorts and 328,000 Diamond owners. Hilton now ranks as the second largest timeshare company worldwide, with a total of 154 resorts and 725,000 members. Only the mighty Wyndham is now bigger.
Diamond owners who woke up one day to find themselves newly minted Hilton owners had several concerns. They had been told that their resorts would be classed as Hilton Vacation Club — HVC (as opposed to the premium Hilton GRAND Vacation Club — HGV).
The fear was that while HGV members would probably be able to downgrade and take holidays in HVC resorts, surely HVC owners would be targeted for more money by HGV inhouse sales staff to upgrade and access the ‘premium’ resorts?
This was also expected to affect HVC members’ resort availability as the ‘higher standard’ HGV members had access to the ‘lower standard’ HVC resorts, but not vice versa.
Are Diamond Resorts HGV compliant?
New fears have been expressed by industry observers as to whether many of the former Diamond resorts are going to be kept in the Hilton portfolio.
“From what our researchers have uncovered, the problem lies with the HGV licensing agreement which is key to use of the trademark ‘Hilton’,” explains Daniel Keating, Information Officer for the Timeshare Consumer Association (TCA).
The Hilton Licensing agreement states:-
- That HGV can only apply the Hilton name to resorts that Hilton approve as being acceptable to themselves.
- That HGV cannot without permission operate any resorts under a different name/label in order to circumvent the above.
- That HGV cannot hold inventory where the services are provided by a rival of Hilton.
“By applying Hilton’s own criteria it seems that many former Diamond resorts may not be able to remain under the Hilton banner. For a start there is a high number of affiliated resorts.” (right of use in a complex or hotel run by a competitor — Ed)
“Hilton’s definition of ‘competitor’ ranges from major hospitality chains to someone with one-bed apartment on Air BNB. In one example, in Malta, Diamond owned the inventory outright but it lies within the Intercontinental Hotel who, in turn, provide many of the services. Unacceptable by Hilton’s criteria.
“By this rule, Hilton would have to disaffiliate 5 of their 6 resorts in Portugal; all of their 5 resorts in Greece & Crete; 2 resorts in Ireland; 1 resort in Bulgaria; 1 resort in Norway; 5 of 6 resorts in Austria; 1 of their 3 resorts in France; 1 resort in Germany; 6 of their 11 resorts in U.K. There are potentially 5 more destinations in canal boat marinas, although they are ‘affiliated,’ and 1 of their 14 Spanish resorts. A total of 33 affiliate resorts potentially lost.”
Potentially another 8 resorts removed
In addition to the above 33 resorts, there another potential 8 that may be problematic because of their standard, or because they are part of a separate complex (ref SEC report from HGV — Section ‘Risk Factors)
- Club del Carmen (Lanzarote): This resort is small and dated, with few services
- La Quinta (Spain): The apartments are scattered throughout a large residential complex
- Pine Lakes (UK): Ex gravel pit and motorway service station
- Sunset Bay (Tenerife): Apartments are scattered throughout a large residential complex, without its own reception.
- Sunset Harbour (Tenerife): Again, the apartments are scattered throughout a large residential complex, shared reception.
- Royal Tenerife Country Club: Part of a residential complex
- Diamond Suites (Malta): Run by Intercontinental Hotels, located within the hotel itself
If these 40 resorts were removed from the HGV timeshare groups, that also would mean that HGV had lost 4 countries altogether from its destination list. The remaining resorts would mainly be in the UK and Spain.
“This would be a severe blow to members who bought into the Diamond points system because of the loss of choice available to them,” says Keating. “Basically the same 725,000 members would still need their holidays, but be competing for a lot less inventory. They could potentially have to accept second or third choices, of both destination and preferred week slots.
“If the above scenario does materialise, then expect the TCA phone lines and email inbox to become busy with requests for help from HGV timeshare members who want to find a way out of their contracts. This isn’t the deal many of them bought in to”
For free, confidential advice on this, or any other timeshare related issue, get in touch with our team, at the Timeshare Consumer Association
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First published on MyNewsDesk February 2022