At Royal Resorts we work hard to keep Grand Residences looking beautiful and Club Service Fee increases to a minimum. However, external economic and pandemic factors have had a serious impact on resort finances in 2020 and 2021. This was especially the case in 2021 and left us with no option but to increase the Club Service Fee.
In 2021, resort finances have been hit by a less favorable exchange rate. The 2021 resort operating budget was prepared using an estimated average exchange rate of 22.58 pesos to the dollar, based on the Bank of Mexico’s forecasts and the consensus of major financial institutions. However, the average exchange rate this year is actually 20.10 pesos to the dollar. This represented a big negative variation of -11 percent and accounted for a significant loss in resort operating income. Most resort expenditures are in pesos and price rises and an inflation rate of 5 percent also have played a role.
Grand Residences has also had additional expenses such as: the COVID-19 testing program to comply with new travel rules issued by the CDC in the United States and Canadian reentry requirements; ongoing purchases related to Royal Care Standard health and hygiene measures to keep members, guests and employees safe; beach cleaning and sargassum disposal; and clean ups and landscaping in the aftermath of the 2020 October storms, Delta and Zeta (US$262,780 in damages) and Hurricane Grace in August of this year.
In order to absorb some of the impact and start building the club cash reserves, Royal Resorts Management proposed a 7 percent increase in the Club Service Fee for 2022 for fractional and points memberships at the Grand Residences Advisory Council meeting in October. The motion was put to the vote and was unanimously approved by your Advisory Council representatives.
|Villa||Normal 2 Bedroom||Normal 3 Bedroom|
|3% Occupancy Tax||59.70||69.68|
|Villa||W/Roof Garden 2 Bedroom||W/Roof Garden 3 Bedroom||W/Roof Garden 4 Bedroom|
|3% Occupancy Tax||63.68||73.64||83.58|
|Villa||W/Pool 2 Bedroom||W/Pool 3 Bedroom|
|3% Occupancy Tax||61.72||71.67|
|Points||Base||Variable||CSF||VAT||Occup.||Total||CSF Per Point|
|2,740||3,300||$ 202.34||$ 0.1573||$ 531.93||85.11||15.96||$ 633.00||0.2310|
|3,301||4,000||$ 241.69||$ 0.1573||$ 639.49||102.32||19.19||$ 761.00||0.2305|
|4,001||4,800||$ 310.26||$ 0.1461||$ 752.10||120.34||22.56||$ 895.00||0.2237|
|4,801||5,700||$ 370.96||$ 0.1461||$ 900.84||144.13||27.03||$ 1,072.00||0.2233|
|5,701||6,600||$ 427.17||$ 0.1461||$ 1,058.82||169.41||31.77||$ 1,260.00||0.2210|
|6,601||7,500||$ 494.62||$ 0.1461||$ 1,226,05||196.17||36.78||$ 1,459.00||0.2210|
|7,501||8,600||$ 562.07||$ 0.1348||$ 1,321.84||211.49||39.67||$ 1,573.00||0.2097|
|8,601||9,800||$ 562.07||$ 0.1348||$ 1,446.21||231.39||43.40||$ 1,721.00||0.2001|
|9,801||10,900||$ 584.55||$ 0.1348||$ 1,601.68||256.27||48.05||$ 1,906.00||0.1945|
|10,901||12,100||$ 595.79||$ 0.1348||$ 1,735.29||277.65||52.06||$ 2,065.00||0.1894|
|12,101||13,500||$ 635.14||$ 0.1348||$ 1,904.20||304.67||57.13||$ 2,266.00||0.1873|
|13,501||15,800||$ 657.62||$ 0.1348||$ 2,082.35||333.18||62.47||$ 2,478.00||0.1835|
|15,801||$ 680.10||$ 0.1348||$ 2,361.34||377.81||70.85||$ 2,810.00||0.1778|
Over the last six years, the average increase in the Grand Residences Club Service Fee has been 1.85 percent. Taking into account the 7 percent increase for 2022, the average for seven years is 2.85 percent. In addition, when comparing Grand Residences to other Private Residence Club resorts of a similar size, the Grand Residences Club Service Fee is 3% above the industry average per week (US$ 2,300) but -30% lower per square foot and offers owners and members more amenities to enjoy during their stay.
The Royal Resorts Management team will continue to look for savings at Grand Residences, while offering the highest level of service and exceptional vacation experiences. One thing we can announce is that Royal Resorts has signed another agreement with an energy provider starting January 1, 2022, which will represent savings in the resort electricity bill next year. The Grand Residences Advisory Council meeting report and financial statement will be uploaded to the Owners Area (owner log in required) in the weeks to come.
We hope that this information is helpful.