Important News about The Royal Caribbean. June 4, 2018

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June 4, 2018

We would like to share some important information about The Royal Caribbean and the termination of the membership program.

As you know, the final interval is week 43 and the resort will close on November 3, 2018.

The membership agreement stipulates that The Royal Caribbean must be sold in a public or private sale and the net proceeds of the sale, after deducting taxes, commissions and other appropriate charges and expenses, divided among the members in good standing and the Company, with members having first priority.

Rombec S.A. de C.V., the company that owns The Royal Caribbean property, hired three valuation and appraisal firms to carry out independent market valuations of the property. HVS Consulting and Valuation, CBRE Valuation and Advisory Services, and JLL Hotels & Hospitality Group are all leading international valuation companies with years of experience in the hotel and real estate sector.

Each firm presented a valuation of The Royal Caribbean based on the best use of the property and current market conditions in Cancun and they are as follows:

HVS US$56,000,000.00
CBRE US$51,800,000.00
JLL US$54,800,000.00

After reviewing the appraisals, Royal Resorts decided to buy The Royal Caribbean and keep it in the Royal Resorts family.

An affiliate company in the Royal Resorts group will purchase The Royal Caribbean and will pay the highest appraised market value (the HVS valuation), a purchase price of $56 million dollars.

Advertising a resort property for public sale entails marketing costs, broker commissions and legal fees. This decision means The Royal Caribbean will be sold at the best market price and the fees and expenses associated with the sale will be kept to a minimum.

There will be no marketing expenses or broker commissions to pay which results in fewer deductions from the net proceeds available for Residual Rights distribution.

The fact that The Royal Caribbean will be remaining in the Royal Resorts group means that members at the other clubs will still have access to the facilities.

The company has obtained a loan to purchase The Royal Caribbean and will be formalizing the credit agreement in the coming months. The sale will happen on November 5, 2018, right after the last occupancy date. As a result, there will be no additional expenses associated with the upkeep of the resort to pay after the sale takes place.

Once the sale of the resort is formalized and the final report of resort operations and other expenses is available, we will be sharing additional information relating to the Residual Rights distribution, the payment process and timeline.

Residual Rights will only be paid to Members that have these rights stipulated in their membership agreement and are in good standing in accordance with the terms of said agreement. The amount they will receive would be distributed from the net proceeds resulting from the sale of the resort and its assets, after the deduction of expenses such as staff severance payments, debts, taxes and any legal and administrative fees associated with the sale. Any remaining cash reserves available at termination will also form part of the proceeds to be distributed; this includes the club cash reserve and hurricane cash reserve.

We estimate that Residual Rights payments will be sent in the first quarter of 2019.

In order to be eligible to receive their Residual Rights, members must be current with their annual Club Service Fee payments or any other debt on the date of the termination of the Membership program. Members who are currently in arrears are urged to settle their financial obligations now by contacting Interval Servicing.

We know that many members have concerns about The Royal Caribbean employees. They will receive severance payments when the resort closes, in accordance with the Mexican labor laws in effect in November 2018. It is likely that some of them will decide to retire or pursue their own business interests. The purchasing company also intends to hire many of the current employees in the future.

On May 24, Royal Resorts management representatives met with The Royal Caribbean Advisory Council members to brief them on actions taken to date and to present the plan for the sale of the resort. Click here to read their letter endorsing the decision to keep The Royal Caribbean in the Royal Resorts family.

We hope that this information is useful. We have prepared a FAQ section to answer any questions that you may have about the sale of the resort and the Residual Rights distribution. We will also be sharing additional details with you in the months to come.

This information was sent to The Royal Caribbean members by email.

Frequently Asked Questions for The Royal Caribbean Members

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  1. Who is purchasing the assets of The Royal Caribbean property?
    The assets are being purchased by an affiliate company of the Royal Resorts Group. The Company decided to keep The Royal Caribbean in the family for the benefit of Members, employees and ultimately to secure the Company´s interests long term.
  2. Does the Royal Resorts have the financial resources to purchase and pay cash for The Royal Caribbean property?
    Yes, Royal Resorts has raised the equity and secured a loan to ensure the payment in cash of the price offered at the time that the sale of the assets takes place.
  3. Was The Royal Caribbean advertised for sale?
    No, the property was not advertised for a public sale; instead three market valuations were carried out by three different independent professional brokerage and valuation firms. The resort is being sold through a private sale as permitted by the membership agreement.
  4. Which firms conducted the market valuations?
    The market valuations were carried out by HVS Consulting and Valuation, CBRE Valuation and Advisory Services, and JLL Hotels & Hospitality Group, all well-known international firms.
  5. What were the bases and the US dollar amounts of each market valuation conducted by these firms?
    The three firms concurred on the same business model for the best use of the property. The US dollar amount of each market valuation is shown in the following table:

    MARKET VALUATIONS
    USD
    CBRE $ 51,800,000
    JLL $ 54,800,000
    HVS $ 56,000,000
  6. What was the price originally offered by Royal Resorts management for The Royal Caribbean property?
    The price offered is the highest of the three market valuations: US$56,000,000 dollars.
  7. Why did the Advisory Council endorse the private sale when Royal Resorts Management expressed their interest in acquiring the property?
    The endorsement of the Advisory Council was for the following reasons: to receive the maximum market value for the sale of the property, to save broker commissions and marketing expenses associated with the sale and to ensure that The Royal Caribbean remains in the Royal Resorts family. See attached letter.
  8. What are the benefits of a direct sale to a Royal Resorts affiliate?
    The benefits are: (a) The property is being sold at the highest appraised market value; (b) there will be no marketing expenses or broker commissions; (c) The Royal Caribbean property will remain in the Royal Resorts family and the members of the other Royal Resorts will not lose access to facilities at The Royal Caribbean; (d) the purchasing company intends to hire many of the current employees working at The Royal Caribbean and (e) The Royal Islander members can continue to have access to The Royal Caribbean facilities.
  9. Roughly what is the amount of money required to cover staff severance payments?
    This amount varies but it will be in strict accordance with Mexican Labor Laws in effect in November 2018. The initial estimate is over US$1 million dollars.
  10. How many of the current The Royal Caribbean employees are expected to be hired by the company that will operate the resort?
    We expect there to be many; however at the moment it is difficult to estimate a number. It will depend on the needs of the resort once it is remodeled and the desire of the employees to continue working for a Royal Resorts affiliate since some might prefer to retire once they have received their severance payment.
  11. How much money is expected to be in Club Service Fees (CSF) reserves at the end of the membership period and are these funds added to the amount to be distributed to Members?
    Please refer to Royal Resorts Life magazine for a breakdown of reserves as of 2017 and be aware that these amounts may vary by November 3, 2018. All reserves existing on this date will indeed be part of the funds to be distributed to Members in good standing.
  12. What will happen to the Hurricane fund reserves when the property is sold?
    The funds remaining in the Hurricane Fund on November 3, 2018 will form part of the reserves that are returned to Members. However, in the unlikely event of a hurricane happening before November 3, 2018 the cost of the resulting damage will be taken out of the existing reserves.
  13. What is the approximate number of The Royal Caribbean memberships?
    There are approximately 10,557 memberships.
  14. What percentage of these memberships is in good standing?
    Currently there are 10,225 memberships in good standing. That is 97% of all memberships.
  15. What are Residual Rights?
    “Residual Rights” is the amount of financial proceeds that a Member would receive at the termination of their Membership Program.
  16. Where does the Residual Rights amount to be distributed come from?
    The amount to be received by Members will come from the net proceeds resulting from:

    • The liquidation of assets (the sale of the resort including buildings, equipment, furniture and fixtures)
    • After payment of liabilities (debts; staff severance payments; municipal, state and federal taxes; legal fees and administrative and brokerage expenses associated with the sale of the resort)
    • Plus any cash reserves available at termination
  17. Would Residual Rights be paid to all The Royal Caribbean Members?
    No, Residual Rights will only be paid to Members who have Residual Rights stipulated in their Membership Agreement and are in good standing according to the terms of said agreement as of November 3, 2018.
  18. How will the members be notified about the Residual Rights payment process?
    Members of The Royal Caribbean who have Residual Rights stipulated in their Membership Agreement and are in good standing according to the terms of said agreement will receive detailed information by email.
    It is important to have your contact information up to date in order to receive this in a timely manner. Members may contact Interval Servicing to make updates.
  19. What is the estimate of Residual Rights proceeds to be paid to Members compared to the Membership price paid?
    At this point in time it is too early to give you an estimate. As soon as we have an accurate percentage, we will advise Members.
  20. When will the distribution of Residual Rights take place?
    The distribution and payment of Residual Rights will take place during the first quarter of 2019.
  21. Will the sale of The Royal Caribbean affect the value of The Royal Islander?
    It is very early to say, the value of The Royal Islander will depend on the demand and the economic conditions prevailing in Cancun at the time of sale.
  22. Will the properties across the street also be sold (Captain’s Cove) when selling The Royal Caribbean?
    No, that property is owned separately.
  23. If Royal Resorts keeps The Royal Caribbean, will there be any membership programs available for the current members?
    Yes; the plan is to have points-based memberships backed by The Royal Caribbean inventory once this resort is remodeled. They will be available for members and non-members to purchase.
  24. What is the latest price offered by Royal Resorts management for The Royal Caribbean property?
    This information, as well as the specifics of the sale will first be presented to the Advisory Council of The Royal Caribbean during their meeting at the end of October; once it is validated we will inform the Members accordingly.

New in La Rotonda Bar, Wednesday Wine Tasting at The Royal Haciendas

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It’s #WineWednesday in La Rotonda Bar at The Royal Haciendas, our Riviera Maya resort. Don’t miss the new Wine Tasting at The Royal Haciendas every Wednesday afternoon from 4 to 5 p.m.

Your host Alejandro Cruz is a mine of information on the world of wine and he will share his passion and knowledge with you.

You will be sampling wines from Mexico and learning about the history of wine production in the country, which dates back to the 16th century and the grapes grown by missionaries in the gardens of the first monasteries and on haciendas.

However, despite its long history, the Mexican wine industry really took off in the 1980s. The Guadalupe and Santo Tomás Valleys near Ensenada in Baja California and the Parras Valley in Coahuila have both produced international award winning wines in recent years and the number of wineries is growing. On this occasion you’ll be trying Mexican wines made from Zinfandel, Merlot and Cabernet Sauvignon grapes.

The cost is US$20 per person and space is very limited. Reservations are required, ext. 66214.

#winewednesday

SEPTEMBER WINNER OF MONTHLY RAFFLE FOR MEMBERS ATTENDING MARKETING EVENTS

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Stephen Eugene Prather, member at The Royal Islander, was the latest winner of the monthly raffle for members attending Marketing events such as the Orientation Briefing, Taco Party or the Welcome Party. 

All members who go to the social events organized by the Marketing department during their vacation are eligible to participate in a monthly draw. The prize is a one-week stay for two in a room at The Royal Haciendas. The names of the lucky winners will be published in Members News each month.

Congratulations to Mr. Prather, the September winner

AUGUST WINNER OF MONTHLY RAFFLE FOR MEMBERS ATTENDING MARKETING EVENTS

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Minerva Padron Rojas, member at The Royal Sands, was the latest winner of the monthly raffle for members attending Marketing events such as the Orientation Briefing, Taco Party or the Welcome Party. 

All members who go to the social events organized by the Marketing department during their vacation are eligible to participate in a monthly draw. The prize is a one-week stay for two in a room at The Royal Haciendas. The names of the lucky winners will be published in Members News each month.

Congratulations to Mrs. Padron Rojas, the August winner

Improving facilities at The Royal Haciendas

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We have some news for The Royal Haciendas members traveling to the Riviera Maya this September. We are working on improvements to facilities at your resort that affect La Palapa del Sol and the motor lobby. Work will take place during Maintenance Week from September 8 to 14 but will continue in week 37 until September 21. We have taken steps to keep the impact on guests to a minimum and apologize for any inconvenience caused by this essential work.

La Palapa del Sol

Repairs will be carried out on the metallic structure sustaining the roof of La Palapa del Sol restaurant and the thatch will be replaced. The restaurant will be closed while work is carried out but Members and guests will be able to enjoy normal La Palapa del Sol restaurant service in alternative locations for their dining pleasure. The schedule for breakfast, lunch, dinner and the theme nights is as follows: 

September 8 -14

The Royal Haciendas Maintenance week 

Saturday, September 15

9 a.m. A la carte breakfast in Los Murales available

10 a.m. Room Service 24-hour service

10 a.m. Sol Grill opens, 10 a.m. to 4 p.m. for lunch

10 a.m. Luna Grill opens, 10 a.m. to 7 p.m. for lunch

5 p.m. Los Murales opens for dinner, 5 p.m. to 10 p.m., daily

6 p.m. Gala event to celebrate Independence Night: Fiesta Mexicana, 6 p.m. to 10 p.m., Phase I stage 

September 16 to September 21

7 a.m. to 11:30 a.m. Breakfast, a la carte and buffet service, La Rotonda Bar and Los Murales

Room Service available 24 hours

Sol Grill open from 10 a.m. to 4 p.m. for lunch

Luna Grill from 10 a.m. to 5 p.m. for lunch

La Palapa del Sol Theme Nights will take place in the Luna Grill, 6 to 10 p.m.*

Saturday Cookout at Sol Grill 6 to 10 p.m.

Los Murales open for dinner 5 to 10 p.m., daily

* In the case of bad weather, the La Palapa del Sol theme nights will be held in the Sales Room.

As La Rotonda will be used for breakfast during week 37, the Members Lounge will be temporarily relocated to the main lobby in front of the Front Desk.

Replacing the thatch on the motor lobby palapa

The thatched roof of the motor lobby palapa will also be replaced during Maintenance Week and week 37. Work will be carried out in the afternoon and evening.

Important information for The Royal Haciendas members

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The Management of the Grand Coral Golf and Residential Community where The Royal Haciendas is located has made some changes to its admission policy at the entrance checkpoints to further improve security on the grounds. While the majority of the new rules apply to hotel employees, vendors, building contractors and other visitors there are several that will affect resort members and guests.

The Royal Haciendas members and guests arriving and departing in vans and taxis will not be asked to show ID but their drivers will.

Rental Cars

Members and guests who pick up a rental car in Cancun Airport will be asked for their reservation number upon arrival at the main entrance to Grand Coral. If they rent a car during their vacation The Royal Haciendas will issue them with a card that must be displayed in the car and shown to the security guards at the Grand Coral entrance as ID.

Bicycles

Guests using bicycles will be identified by the resort registration number on the bike or by their All-Inclusive bracelet (if applicable).

Day Visitors

Day visitors arriving by car will be asked to show official photo ID such as a driver’s license or Mexican voter card at the entrance to Grand Coral. Security personnel will ask them where they are going and for how long they plan to stay. They leave their ID at the checkpoint and will be given an admission card to display in the car during their visit. On departure they will hand in the card and the guard will return their ID.

Update on Travel to the State of Quintana Roo

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August 23, 2018

You may have seen media reports this week mentioning Cancun. We hope that this update answers any concerns that you might have about the area. Our advice is to continue with your vacation plans. It is safe to travel to Cancun, the Riviera Maya, the Yucatan Peninsula and many other parts of Mexico.

Cancun, Playa del Carmen, Riviera Maya, Cozumel and other destinations in the state of Quintana Roo and the Yucatan Peninsula as a whole have always been, and remain, among the safest places in the world for visitors. However, violence associated with organized crime can occur anywhere in the world and unfortunately, Cancun has seen a number of homicides in recent days linked to disputes between rival criminal groups. These incidents took place in districts of the city that are not frequented by tourists and that are miles away from the Hotel Zone on Cancun Island.

A number of articles published in the United States report that a new US State Department travel advisory for Mexico was issued in response to these incidents. This is false. There are no Travel Warnings about Cancun, the Riviera Maya or any other destination in the state.

The Quintana Roo Tourism Promotion Council issued a statement on August 22, 2018 saying: ”We are aware of recent media reports falsely stating that the U.S. Department of State has issued a new travel advisory for Mexico due to a recent event in the state of Quintana Roo.

There is no new travel advisory for Quintana Roo from the State Department. There are currently zero U.S. State Department Travel Warnings against any destination in the state of Quintana Roo and there are zero Travel Warnings against any international tourist destination in Mexico…”

Click here to read the complete statement issued by the Quintana Roo Tourism Promotion Council.

Safety of visitors is a top priority for Mexico

Mexico is one of the world’s most popular travel destinations, welcoming over 39 million visitors in 2017. The safety of visitors wherever they are in the country is a priority for the government. The authorities are extremely vigilant in all tourist destinations and major cities.

Millions of tourists visit the Mexican Caribbean each year and the authorities work closely to ensure the safety of visitors and residents. Security has been further upgraded this year with the implementation of additional monitoring measures and extra police patrols for the cities of Cancun and Playa del Carmen.

Interpreting travel advisories

The US State Department travel advisory system classifies threat levels in countries around the world from 1 to 4, with 1 being the lowest threat level and 4 the highest. Mexico is in the Level 2 category, which is the same as many European countries such as Germany, France, United Kingdom, Spain and Italy and the recommendation is for ‘Visitors to Exercise Caution.’

The current US State Department Mexico travel advisory places no restrictions on visiting Cancun, Riviera Maya, Puerto Vallarta or Los Cabos, some of the world’s most popular vacation spots.

Some Mexican states that have seen an upsurge in violence associated with organized crime are classified as having a higher threat level. In some of these cases, specific regions of the state that may be off the tourist track anyway are mentioned, for example, remote mountainous or border areas and certain highways, towns or specific neighborhoods in cities.

The key to safe travel anywhere is common sense

Major cities in the US and around the world have neighborhoods with a reputation for crime and gang violence and this is also the case in Mexico. Common sense is the key to safety wherever you travel, whether at home or abroad, and may we suggest that you take certain precautions, just as you would if you were going to a new city in your own country or elsewhere.

Always be aware of your surroundings and stay alert, stick to reputable restaurants, bars and other establishments in well-known tourist areas of the city and drink responsibly. Do not display expensive jewelry or large amounts of cash in public. Take care when visiting unfamiliar areas and avoid walking alone at night through poorly lit neighborhoods or isolated areas.

Don’t drive in isolated areas at night and always use toll roads for longer journeys

The sale, possession and consumption of illegal drugs is a federal offence in Mexico.

 

Security at Royal Resorts

Royal Resorts has the security and comfort of its members and guests as its top priority. Security guards patrol the resorts and the beaches 24 hours a day. There are closed circuit cameras in public areas and other key locations.

There is no reason for you to change your travel plans. You’ll enjoy your stay in Cancun, the Riviera Maya and the Yucatan.

JULY WINNER OF MONTHLY RAFFLE FOR MEMBERS ATTENDING MARKETING EVENTS

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Michael Jerome Flamer, member at The Royal Haciendas, was the latest winner of the monthly raffle for members attending Marketing events such as the Orientation Briefing, Taco Party or the Welcome Party. 

All members who go to the social events organized by the Marketing department during their vacation are eligible to participate in a monthly draw. The prize is a one-week stay for two in a room at The Royal Haciendas. The names of the lucky winners will be published in Members News each month.

Congratulations to Mr. Flamer, the July winner

 

 

JUNE WINNER OF MONTHLY RAFFLE FOR MEMBERS ATTENDING MARKETING EVENTS

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Julius Harlan Harris, member at The Royal Sands, was the latest winner of the monthly raffle for members attending Marketing events such as the Orientation Briefing, Taco Party or the Welcome Party. 

All members who go to the social events organized by the Marketing department during their vacation are eligible to participate in a monthly draw. The prize is a one-week stay for two in a room at The Royal Haciendas. The names of the lucky winners will be published in Members News each month.

Congratulations to Julius Harlan Harris, the June winner