"In order for Royal Resorts to continue to manage Pelican Resort Club we must first ensure the financial stability of the resort, therefore anything other than our interest in seeing success for Pelican is completely ludicrous," said Richard Corso, CEO of Royal Resorts Caribbean. "If Pelican fails, we are out of a job and therefore only financial success will enable both Pelican and Royal Resorts to continue together," he added.
Royal Resorts has a 13-year history of implementing cost savings for Pelican, many dating back to August 1997 when the company first came on the scene to manage the property. At the same time, the company has continued striving to improve the guest experience at the resort. Royal Resorts brings 35 years of resort management experience to Pelican Resort Club.
Royal Resorts added new machinery to provide a Reverse Osmosis system in order to serve the needs of guests at Pelican, and, at the same time, saves more than US$300,000 a year. The company purchased and installed a trash compactor which saves the resort US$25,000 a year. And when Royal Resorts installed an industrial laundry, the annual savings increased another US$100,000 a year.
Additionally, Royal Resorts retrofitted 100 villas with central air conditioning saving US$25,000 a year and implemented a "Going Green" program which reduced costs by US$30,000 annually.
Royal Resorts Caribbean, as the management company for Pelican, also got insurance costs reduced which produced an annual savings of US$150,000 and managed legal issues which saved another US$250,000 a year and provided many IT (Information Technology) and Property Management System (PMS) resources for free.
Royal Resorts has also moved management offices out of the Great House which saves Pelican US$264,000 per year in rent.
These cost savings, instituted over the past 10 years, amount to a reduction of expenditures of more than US$1.1 million each year.
Some of the recent complaints have centered on the need to operate Pelican at a drastically reduced budget which the Board of Directors of the Tenants Association Pelican Resort Club (TAPRC) ordered earlier this year as a result of the continued economic downturn. Royal Resorts instituted requested budget cuts, which resulted in additional aggravation from Union officials as some of the regular workforce had to cut back hours.
A major issue arose when some of these Union workers retired or took other jobs and was replaced, by outsourced workers at a cost savings to the TAPRC of 50% or more.
"We had no choice but to follow the wishes and orders of TAPRC and take every opportunity to cut costs, but only did so when it did not impact a current employee," Corso said.
Additional complaints by some of the new TAPRC Board members indicated that they were upset with what some have termed "a cozy relationship between the old Board and Royal Resorts."
Corso's answer is simple: "We have always tried to maintain a good relationship with the Board of Directors because we work for TAPRC and it is not in anybody's interest to have an adversarial relationship with the Board of our owners' association. But that does not mean that there were any improprieties or irregularities. We did what we could to keep everyone happy."
Corso added: "We still attempt to make everyone happy, but occasionally some of the Board members have their own personal agenda and that often is contrary to the interest of TAPRC and we then find ourselves at differences."
Royal Resorts has been managing and protecting the interests of the owners of Pelican Resort Club in a variety of ways over the past 13 years including deferring management fees so the resort can stay open. Royal Resorts has also provided the resort millions of dollars in interest free operational loans and have used its position in the global marketplace to secure additional lenders to cover operational shortfalls over the years.
For example, in 2008 Royal Resorts renegotiated the Long Term Lease for Pelican Resort saving US$30,000 a year and extending the lease term from the year 2050 to 2068. At the same time, Royal Resorts renegotiated the Union Worker contract to get performance based pay increases rather than automatic increases, thus protecting the resort financially.
Corso also notes: "At the same time, we strongly support our workers as can be seen from our recent payment, from Royal Resorts' own funds, of US$9,000 to help the uninsured mother of one of our workers when she had a brain aneurism that required an air ambulance from St. Kitts to Puerto Rico. We also found medical support for her."
With more than a decade of management experiences with Pelican Resort Club there are many other stories that demonstrate Royal Resorts' unending support for Pelican owners and workers including:
When Royal Resorts took the management contract in August 1997 there were 32 villas on the first floor of 'B' building that were completely out of service and neglected by the previous management. Royal Resorts put them back into operation by 1999. In addition to those 32 villas, the company also put Villa A-11 back into operation with funds personally invested by Richard Sutton, Chairman of Royal Resorts, from the purchase of 40 weeks for that villa.
In 2000, Royal Resorts helped to sell off 4,004 non-performing Pelican Resort Club intervals at no cost to the current Pelican owners or TARPC. Funds from this sale were used to help resort reach financial stability at that time.
In 2004, Royal Resorts found a lender to bail out the resort from operational shortfalls despite the fact that TARPC had no credit worthiness.
In 2005, Royal Resorts voluntarily transferred a Tax Holiday to Pelican Resort Club at no cost providing significant annual value to the timeshare owners to this day.
Also in 2005, the resort would have been closed with significant negative impact on the timeshare owners if not for the needed emergency loan of US$3.185 million found by Royal Resorts to protect the resort and owners. TAPRC attorneys Roozen & Matsunaga reported that "the risk was quantified by a threat from Vlietman entity to force the Resort into an involuntary bankruptcy. The risk could have added up to US$6 million and for less than that amount, the settlement gave a release of those issues and cleared the way for the resort to go forward financially."
In 2007, when worldwide oil prices spiked at US$150 a barrel, Royal Resorts volunteered to defer US$700,000 of payments interest free so the resort could stay open.
Royal Resorts also funded and opened the first computer training room on the island to benefit employees of Pelican.
Royal Resorts Caribbean operates four resorts in three destinations with more than 400 employees. The company manages more than 49,000 timeshare intervals for nearly 25,000 families. The management company provides a variety of services for resorts including full operations management, vacation ownership sales and vacation rentals.
The Royal Resorts Group was founded in 1974 in Cancun, Mexico. Now with over 60,000 members, Royal Resorts has been rated among the top-rated resort companies in the world since 1975. The resorts have received the coveted Five Star Rating from Interval International every year since 1983 when the rating was first established. Since 2008, they have also been classified as Premier Resorts in the Interval International Resort Recognition Program, the highest distinction awarded to resorts that offer an outstanding vacation experience.