Shortly after Hope and William Gagnon arrived in Cancún, Mexico, from Detroit, the couple were approached by a salesperson from a vacation club. About 21 hours later, they had agreed to pay $27,000 to join the club — a significant commitment for Ms. Gagnon, a customer feedback specialist, and Mr. Gagnon, a hospital courier.
They had bought what they believed the Unlimited Vacation Club was selling: free or deeply discounted weeklong stays at luxury resorts with opulent suites, pristine beaches, swim-up bars and private concierges.
But the Gagnons learned after they signed the contract that the club had numerous restrictions. The unavailability of many resorts, hidden fees and a requirement to pay extra for upgrades that would give them access to the swankiest rooms made it nearly impossible to book the kind of vacation that had impressed them during a pitch meeting.
“I was like, my God, we got had,” Ms. Gagnon said.
Vacation clubs are the latest twist on timeshares — an industry often criticized, and even mocked, for using aggressive sales tactics to persuade people to buy a share of a vacation property, giving them the right to use it for a certain number of days a year.
In a vacation club, there is no actual real estate ownership. Instead, people make a down payment to join, followed by monthly payments, to get discounted rates at a portfolio of resorts.
Though the vacation club has its devoted fans, dozens of current and former U.V.C. members who spoke to The New York Times said that the perks and flashy rooms never materialized or were out of reach because of blackout dates. The benefits were far more modest than described, or far more complicated: For example, a 25 percent discount off the market rate of a given room involved surfing the internet for price comparisons.
They said they were stuck with pricey contracts they had signed after lengthy pitches in beguiling surroundings, as copious amounts of complimentary alcohol were served to them. The pitches they heard diverged sharply from the agreement — which members described as a voluminous and dense document that they were not able to read: They were asked to sign the contract on an electronic tablet, where the text was so small it resembled the label on the back of a Tylenol bottle.
Shrewd salesmanship and abundant liquor were not the only factors at play. Most enticing was the trusted brand name behind the membership club: Hyatt.
Hyatt manages the club, deriving revenue from fees and royalties, according to the company’s public filings. But among the clauses buried in the contract is one stating that the membership is governed by the laws of Panama.
“The No. 1 reason I finally gave in is because my daughter plays softball all over the country, and we’ve stayed in any and every kind of hotel, motel, that you can imagine. And of course, with the name Hyatt, you think, you know, all this got to be legit,” said Joe Robinson, who owns a truck repair shop in Louisiana and who signed up this summer at a resort in Mexico managed by Hyatt.
The Better Business Bureau, a consumer protection group, has given Hyatt Hotels Corporation an “A+” ranking, its highest grade.
By contrast, since 2014, the vacation club has had an “F” rating, based on the volume of complaints and U.V.C.’s failure to respond to more than one-third of them, said Cinthya Lavin, a vice president for communications at the Better Business Bureau.
Thousands of Americans have taken to social media to tell others to stay away from the program. A Facebook group created in 2015 by a woman who believes she was deceived has grown to over 12,000 members.
The New York Times reviewed 29 contracts of current and former U.V.C. members and interviewed 51 people, including Mr. Robinson and the Gagnons, who say they were duped. Once new members begin to question the hefty financial investment they made, it’s often too late to turn back: They have only five business days to cancel, so the contract becomes legally binding while most new members are still on vacation.
A Times reporter visited the Secrets The Vine resort in Cancún and was taken on a tour of what appeared to be the same room that had been shown to several of the people interviewed for this article. It was in a tower, perched like an eagle’s nest above the ocean with views of the aquamarine water from the bedroom, the living room and even a free-standing bathtub.
“Imagine yourself in this room,” the sales representative told the reporter at the resort, before pulling up the suite on a booking website to show that it cost $1,300 per night. It’s the type of accommodation that club members could expect to get for as low as $299 for the entire week, the sales representative told the reporter.
During the three-hour sales presentation, alcohol was served, a printed contract was never offered, and blackout dates, booking fees and other caveats were not explained. What was repeatedly mentioned was the Hyatt name. “Have you heard of Hyatt?” a sales representative asked the reporter, before describing the vacation club as a program run by Hyatt. A handout prominently displayed the World of Hyatt logo at the top.
Unlimited Vacation Club did not respond to numerous messages and requests for comment on this article. In response to a detailed list of questions, a spokesman for Hyatt declined to answer specific queries regarding the serving of alcohol, the lack of a printed contract and the concerns of many consumers who said they could not read what they were asked to sign.
“Hyatt has an unwavering commitment to conducting business with a focus on care and works hard to uphold the highest standard of service,” Rodrigo Llaguno, the group president of Unlimited Vacation Club, Hyatt, said in an emailed statement. “U.V.C. receives a range of customer feedback, including 20 percent of members each year who choose to upgrade their memberships based on their positive experiences.”
‘The Nicest Room I Have Ever Seen’
The wooing of the Gagnons began with a salesperson at the Cancún airport who first offered them a discounted excursion to a Maya ruin. But to get tickets for the tour, they had to go to the Secrets The Vine resort the next day. They were staying in a cheaper hotel.
“It was like wowsers,” Ms. Gagnon, 47, said of the resort, which has a lobby of cathedral proportions facing the neon blue waters of the Caribbean.
What they thought would be a quick errand turned into an hourslong affair: The tickets would only be handed to them if they attended a sales presentation. And in return for signing, they would also be moved to the glitzy hotel for the remainder of their stay at no charge. During the sales pitch that followed, the Gagnons were taken to the exclusive suite with the floor-to-ceiling windows and the panoramic ocean view.
“That’s the nicest room I have ever seen,” Ms. Gagnon said. “And something I could never afford.”
Resorts, like the one that the couple had just stepped into, are part of a yearslong strategic pivot by Hyatt, which, like other big hotel brands, including Marriott and Hilton, has moved away from owning hotels to deriving fees from managing and franchising them, according to industry analysts. Hyatt now derives an overwhelming majority of its revenue from such fees, after its $2.7 billion acquisition of the Apple Leisure Group in 2021. The purchase included the Secrets, Breathless and Dreams brands, giving the hotel giant access to a footprint of 99 resorts in Mexico and the Caribbean, according to company statements.
It was the largest acquisition in Hyatt’s history, and bundled inside it was the Unlimited Vacation Club — “like the pickle that comes on the side of the cheeseburger, whether you want it or not,” said Patrick Scholes, an analyst who tracks Hyatt for Truist Securities.
This year, Hyatt abruptly sold its majority stake in U.V.C., but continues to manage the club, according to public filings. The hotel giant is projected to earn between $60 million and $70 million in royalties and fees from the club this year, a figure that is roughly equal to 5 percent of Hyatt’s adjusted cash flow, according to company statements and independent analysts.
Though timeshares are a $35.7 billion industry, they have long been associated with unfair sales practices, said John C. Crotts, a timeshare expert and the former director of the University of Hawaii at Manoa’s School of Travel Industry Management.
Dr. Crotts found that one out of every five timeshare buyers regrets the purchase, in a study he published last year.
The vacation club model has even less value than the timeshare system because members don’t own a share of a property, according to Brian Rogers, who runs an online forum for timeshare owners that his father started three decades ago after falling for a timeshare scam.
Joining a vacation club is not unlike paying thousands of dollars to buy airline points, Mr. Rogers explained: You might think you’re getting a free flight, but it’s not really free after taxes and fees, and booking is limited by blackout dates and seating availability.
For example, Doug Stallbaumer, 59, who lives on the shores of Lake Perry in Kansas, bought his U.V.C. membership believing that he and his wife could book ski vacations in Aspen — and then discovered that the only time the hotels were available was during the summer months, when there was no snow. He refused to pay the annual renewal fee last month, and their $52,000 membership was subsequently canceled.
The sales tactic of exaggerated perks, Mr. Rogers said, is part of the playbook that roped in his parents in the 1990s.
“It’s extremely rare for anyone to do any research,” he said in an email. “I have always found that particular point one of the most fascinating in my entire life — how the average person can spend so much time researching a big-screen TV or the latest iPhone, but not a $20,000 to $30,000 timeshare purchase before buying.”
The Gagnons were saved in part by the freebie that had enticed them in the first place: In the van on the way to the ruins of Chichén Itzá, Ms. Gagnon had hours to do research. What she found made her stomach drop: First, hundreds of Better Business Bureau complaints. Then, the Facebook group “Unlimited Vacation Club = UNLIMITED PROBLEMS.”
When she magnified the DocuSign contract she had just signed, the dream of paradise began to crumble: The 21 “free nights” she had been offered were governed by a “2 for 1” system, meaning that she would need to use two of the free nights to book one night at most resorts. Next, she discovered that the “free” nights would be doled out over a period of years — during which the couple was required to pay a monthly fee of nearly $520.
And when she logged in to the reservation site to mock up a future trip, every date she chose came up as “no results,” she said.
The Gagnons managed to cancel their contract within the five-day free cancellation period. When U.V.C. claimed they were obligated to pay for the two free nights and other benefits they had enjoyed at the resort, Ms. Gagnon successfully filed a complaint with her credit card and was eventually reimbursed.
Many others interviewed by The Times were not so lucky, missing the critical deadline.
Amanda Gomez, of Yonkers, N.Y., said she and her boyfriend have been fighting to get out of a $24,000 contract they signed last year. During what Ms. Gomez said was a five-hour sales presentation, her drink was immediately refilled each time she took a sip of tequila, she said.
“Looking back on it, it’s pretty clear that they were intentionally trying to get us drunk,” said Ms. Gomez, 32.
Satisfied Versus ‘Swindled’
The vacation club also has its share of satisfied customers, and Hyatt provided The Times with a handful of the club’s fans. The content customers said they found value in one the vacation club’s core benefits: a 25 percent discount off the market rate of a given room, even as they had to learn how to navigate the booking system.
Donna Barsalou, 72, of Amherstburg, Ontario, said she paid $2,400 for a week in February at the Secrets resort in Puerto Vallarta on Mexico’s Pacific Coast. The same suite on the same dates costs $6,000 on Expedia.
A member for over a decade, Ms. Barsalou acknowledged the system for getting these savings is cumbersome: She plans her vacations a year ahead, making the reservation in the U.V.C. portal and accepting the best available price. Then, in the months leading up to her trip, she scans and re-scans a list of approved websites, including Expedia. Once she spots a better deal, she screen-grabs the page and emails it to U.V.C., which then gives her 25 percent off the lower price, reimbursing her the difference, she said.
Ms. Barsalou runs a Facebook group for fellow U.V.C. members where she has posted tutorials teaching others how to use their membership.
She recently upgraded to a higher tier of membership, in part to get access to premium pools and lounges, she said.
Hyatt points to customers who choose to upgrade, like Ms. Barsalou, as evidence of the program’s success.
For other members, though, the upgrade has felt like another sales trick.
Shannon Hunter, of Meadow Vista, Calif., bought her initial $19,980 package in 2020 at a resort she visited with her fiancé in Los Cabos, Mexico. The couple was unable to travel because of the pandemic, and when they finally took a vacation this year, they spent most of their free nights to book a basic room at the Secrets Akumal resort, more than an hour’s drive south of Cancún.
Just before reaching the gleaming grounds dotted with palm trees, the couple paid an extra $1,000 to be upgraded to a “swim-out room” — a suite that opens onto a private pool.
According to the complaint they filed with U.V.C.’s quality assurance department, they were lured to a second sales presentation where they were told that if they upgraded to the next tier, they would get the swim-out room every time — free.
The upgrade locked them into a 40-year, $51,000 contract. What they had already paid toward the first contract was rolled into the second.
But when they tried to book their next vacation, they discovered that there were no swim-out rooms available — at least none that were free. Ms. Hunter, 49, who runs a small business selling crystals, recorded a video of her laptop screen as she tried to book, confirming that the room was available for an additional $3,000 per week.
If the couple cancel their membership, they will lose the more than $20,000 they have already spent, because their earlier membership was voided when they upgraded.
“It makes me feel like just completely swindled and taken advantage of,” Ms. Hunter said.
Getting relief is difficult, especially because the program sold to customers as a Hyatt product is in fact governed by the laws of Panama, according to the contract’s fine print.
One U.V.C. member, Paul Broni, 57, a senior vice president of a bank in Milton, Ga., sent a certified letter to the chief executive of Hyatt, explaining that guarantees that he would never pay more than $118 per person per night were wildly inaccurate.
When no one responded, he contacted a lawyer in Panama and then, like others, reached a dead end. The lawyer advised him that litigation would be costly, could take years and might be a dry hole: It’s unclear if U.V.C. has any assets in Panama that could be seized to repay creditors.
Mr. Broni isn’t sure what he will ever get for his 40-year membership that cost him $27,954.
“They made a big deal about how it was a Hyatt business, which I took a lot of comfort in,” Mr. Broni said. “If Hyatt is involved, like, this can’t be bad, right? I mean, they wouldn’t risk their reputation on something like this.”
The post Lured by Luxury Vacations, They Were Stuck With Debt appeared first on New York Times.
