Consumer Advocacy
The UK Ultimatum
Relations continue to sour between Scotland’s biggest independent hotel chain and their first timeshare resort
In July of 2008 Scotland’s largest and most powerful hotel company, Macdonald Hotels, ordered the owners of Loch Rannoch timeshare development to rectify a bill of £450,000. Macdonald warned that if the bill were not paid in due time, it would stop providing the resorts with water and power.
This ultimatum is in and of itself a fascinating move, a window into the mad world of business power struggles that has become synonymous with the real estate (as well as timeshare) industry. But equally interesting is the history behind the ill will and the entangling alliances that have led to this predicament.
In 1976, Barratt International and entrepreneur Frank Chapman built 85 cottages adjacent to Loch Rannoch in Perthshire to sell at fractional ownership – effectively the UK’s very first timeshare resort. They were quite successful for several decades, but in 1991 Macdonald Hotels, owner of other resorts in area, bought out several of Barratt’s properties, including the one at Loch Rannoch. By 1996 it owned the entire company's holdings. Owners of the timeshares, particularly at Loch Rannoch, were displeased by the move; part of the appeal of the fractional ownership system was the ability to escape the influence of large resort companies (a laughable premise today). Very soon thereafter, owners clamored for repairs and Macdonald responded by hiking maintenance fees.
In 2003 a small group of timeshare owners at Loch Rannoch designed a plan to take control of the properties back, successfully transferring management control to a third party – Timeshare Management Services. Macdonald, furious at the development, banned certain members of this group from their hotel facilities. Offers later in the decade to settle the matter were rejected on both sides.
Despite the shift in management power, Macdonald has continued to supply the timeshares with utilities. They have now decided to use this as leverage in a desperate last attempt to exercise their power over the Loch Rannoch development.
Timeshare Management Services rejects the veracity of this fee. "We paid for the electricity but we paid it under condition they accepted the cheque as the settlement of the liability between us and them,” a representative said. "They owe the club some management fees but they refuse to accept that condition." Macdonald claims that it has failed to pay these management fees because it is still in legal dispute with the committee itself. It has rejected the group’s payment for the electricity (about a fourth of the entire invoice).
While they continue to battle these issues out, it might come at the cost of power for the owners themselves. Timeshare Management Services is fighting for their management fees while Macdonald would like to see their managerial duties restores and the TMS group disbanded entirely. The issue will likely go to court.
Quotes from "Macdonald tells 3,000 timeshare owners: 'Pay up'" by Erikka Askeland, published at Scotsman.com, July 15, 2008.
