|Q. Why did the Dispute with ONAWimpen begin?|
|A. The dispute with ONAWimPen began when Mr Pengelly sold his management business, WimPen Leisure SA, to Onagrup Vacations without advising owners of his intentions, or providing advice and support to their representatives which he is required to do in his role as Club Los Claveles Administrator. The sale included the management contract for Los Claveles which had approximately 2 years to run. Instead, he placed a complete confidentiality clause on the sale of his business to Onagrup, claiming that it was Onagrup that insisted on it, which they later denied. (Further evidence subsequently emerged that Mr Pengelly had previously applied the same condition to the prospective sale of his business to other potential buyers). Members of the Club committee were informed officially by email on the 22nd January 2015 after the sale had been completed.|
Mr Pengelly reassured the committee and later owners, when he eventually met with them, that there would be no change and therefore there was no need to speak to either the committee or the owners. He did not respond to requests to speak at owners’ meetings at Los Claveles until 3 weeks after the sale. His argument was that owners had nothing to worry about and he asked them to trust his judgement. More importantly he turned down committee requests to meet Onagrup the new owners as a matter of urgency. He only arranged for the committee to meet the new owners of his business in March, two months after the sale was announced.
|Q. Why did the Club Los Claveles committee terminate the management contract with ONAWimPen?|
|A. The Club Los Claveles committee terminated the management contract with ONAWimPen when Onagrup began to make changes, many behind the scenes, within weeks of purchasing WimPen, without any consultation. This included:|
* changes to the resort’s name – Ona Los Claveles on their own and public websites – misleadingly presenting it as if it was owned by Onagrup
* significantly changing rental methods and charges without discussion or notice
* reducing the minimum age requirements for renters
* reducing the minimum length of stays to as little as one night
* not adhering to Friday to Friday bookings
* increasing cleaning schedules as a result of short stay renters
* providing hotel style toiletries for renters
* including electric and safe charges in the rental charge
Many of these changes were in breach of the Club constitution which states that guests must be over 21 and that the resort is a Friday to Friday resort.
Large numbers of owners contacted committee members to voice their concerns and their anger at what was happening. So much so that when the committee assembled at Los Claveles for the meeting with Onagrup in late March 2015 they knew they had to stop Onagrup ignoring the constitution. (Their concerns were exacerbated by a several hour presentation, all in Spanish, which in effect told the committee what the owners and the resort needed). Committee members unanimously agreed that the most effective way to do this was to invoke their constitutional right to give notice of termination for breaches of contract. They gave ONAWimPen 4 months’ notice, which satisfied the minimum 3 months requirement stated in the constitution, plus one month to allow owners to vote on the decision at the June 2015 AGM.
Q. What do we know about Onagrup?
|A. Onagrup’s own history page says its parent company, Clubotel La Dorada, was started in 1996 by Carlos Barrau and originally traded as Gruphotel although official papers say it was started in October 1997. In 2010/11 it restructured and began trading as Onagrup along with Onahotels, Onagrup Vacations, OnaProject, OnaCondotel, Onafood and more. These were later bought together under the Ona Corporation brand.|
|Q. Who owns Onagrup now?|
|A. Inmaculada Farran Codina is the main shareholder of Onagrup; Carlos Barrau is still involved as the CEO though he is has never been listed in Spanish Business registries as being a director.|
Q. What is the basis for Onagrup’s poor history and reputation that is often referred to by the Club committee, and others?
|A. At some of Onagrup’s resorts in mainland Spain owners speak of their fixed weeks being converted to floating weeks (See web link below 1) and that they are then unable to book anything other than in the low season. These floating weeks are still sold today even though the Spanish courts have ruled floating weeks are illegal as the Law of Horizontal Property which governs communities says that ownership must stipulate a specific week and property.|
There have also been numerous successful court proceedings against the parent company and its trading entities with the most recent case being in Italy in June 2015 (See web link below 3). Onagrup is also said to be very vigorous in their action against owners who fail to pay their maintenance fees.
Carlos Barrau, Onagrup’s CEO, has been involved in numerous companies including Total Mundi SL, Líneas Acción Marketel SL, Gruphotel and Clubotel la Dorada SL (See web link below 4), all of which have had successful legal action against them, mainly for mis-selling but also breach of trademark which resulted in a fine of €36184 in 2010 and in which the claimants cited Gruphotels poor reputation and that it could possibly harm their business (See web link below 8).
Q. Last year WimPen supplied certified letters of reference from RCI, DaE and II in support of Onagrup – doesn’t that mean that they are a good company?
|A. RCI, Dial an Exchange and Interval International can only speak of their experience in dealings with Onagrup although the factual content is somewhat questionable.|
RCI claimed to have had a commercial and active relationship with Onagrup since 1992.
Interval International claimed their relationship with Onagrup began in 1991.
DaE said Onagrup had over 20 years of experience in the sector.
Onagrup’s own brochure and history page on its website both say that it was started in 1996. Upon being challenged on their letters of endorsement the companies then said that the relationship began with Total Mundi SL, a company formed by Carlos Barrau in 1992 which he left in April 1996, not Onagrup as it is today.
|Q. Why is the Club committee, and many owners, so opposed to Onagrup running Los Claveles?|
|A. Initially, after a little research, Onagrup’s poor history and reputation at their resorts gave the Club committee, and some owners, cause for concern. From the information available Onagrup appears to be a marketing company. Their style is neither a natural, complementary fit for Los Claveles, nor is it necessary. In a Club committee meeting previous to the sale WimPen reported their success in renting out 88% of weeks available. They have never had a proactive rental strategy and we are told that the majority of previous rentals on the resort were to owners’ friends and family together with long term renters who return year after year. |
The Club committee is confident that this can be grown in a much more sympathetic way.
Onagrup’s approach at Los Claveles has been to do things without consultation with the Club committee, and to disregard the Club’s constitution. And even when this was drawn to its attention, Onagrup did not change its approach. The final straw was when Sr Castro, their General Manager would not accept a service level agreement from the Club Chairman which would have brought their approach into line with the Club constitution.
Perhaps one of the worst aspects of Onagrup’s behaviour is that it has sought to intimidate and threaten Club committee members to implement its plans, and it has influenced FNTC, the Trustees, who should be completely independent, to put pressure on the Club chairman to give in to its demands. ONAWimPen has frequently claimed that we are being told lies and untruths by the Club committee but has not substantiated these claims, despite being asked to do so. ONAWimPen tried to persuade the Club’s Spanish lawyer to stop working for the Club by offering her work for all 7 former Wimpen resorts if she did so. She is prevented by her profession from providing a statement to this effect, but she has agreed to the Club committee recounting the story.
Throughout, Onagrup has failed to put forward a business plan for Los Claveles which would have given owners a clear view of its intentions. In the absence of this, many owners are deeply concerned that Onagrup’s intentions are to take ownership of the resort over time by changing the business model from timeshare ownership to hotel/rental management.
|Q. Does Onagrup manage other resorts previously managed by WimPen?|
|A. Yes, Onagrup now manages all 7 resorts previously managed by WimPen, plus the common parts of another resort, having bought WimPen from Mr Pengelly. Many of these resorts are in the Canary Islands which has all-year-round appeal because of the climate. There are also restrictions on building more hotels on the island. Onagrup’s business is centred on mainland Spain and so WimPen’s Canary Island resorts are particularly attractive to them in expanding their winter rental programme. Two of Onagrup’s Spanish resorts close for the winter and another closes for May and June after the ski season has ended but before summer.|
|Q. What is the feedback about Onagrup from owners at these other resorts previously managed by WimPen?|
|A. Most of the owners at the other resorts previously managed by WimPen are Escritura owners who possess the deeds to their weeks and feel that this protects them from losing their weeks. There are also reports that other resorts are in significant debt, unlike Los Claveles which has a strong balance and a good ‘sinking fund’ for emergencies. Some resorts (including our own) report that they are already finding that renting extra weeks via ONAWimPen is substantially more expensive and less flexible than previously. Whilst nothing appears to have changed, subtle changes are taking place. For example, following the sale the committee opposed Ona’s planned (but unannounced) changes including a new telephone system, booking system and staff training in ‘Ona style’ service and they were put on hold. These changes have a ready taken place at other resorts and reception staff now ring prospective renters to welcome them to the Ona hotel regardless of their country of origin. It is not clear who is paying for this service. The Los Claveles Club committee has made it clear that this system is not to be installed without full consultation.|
Owners at these resorts do not have the elected committee structure that Los Claveles has. They only have owners representatives who report back to owners decisions made. This makes them all the more vulnerable to changes that are more in Onagrup’s interest than owners’. Experience elsewhere has shown that unless owners are aware and alert to what is happening with their resort, they can find it very difficult to control the changes. Despite Mr Pengelly’s repeated assurance that ONAWimPen cannot make changes without committee agreement and an AGM vote, he has stated repeatedly that ONAWimPen will undertake the multi-thousand euro refurbishment at Los Claveles. He also advised the Club chairman that he intends to spend large sums on renewing the swimming pool and has already made a commitment to this expenditure.
|Q. Onagrup has told us that it has increased rentals and income, is this not good for us?|
|A. On the face of it, it does appear to be very good for us that Onagrup can increase rentals and income, but Onagrup do not achieve this on their own. It uses digital strategy partner Bookassist to provide the online booking engine for its website. Any resort or hotel can make use of this facility. The downside of using Bookassist is that Onagrup says resorts have to accept Bookassist rules which have 18 as minimum age requirement. Other booking agencies respect resorts own rules.|
Although Onagrup says it gets a better discount with Bookassist than individual hotels would, this is offset by the total commission of 32%. In 2014, WimPen reportedly achieved 88% rental occupation without a proactive rental strategy and only charged 15% commission.
The Club committee has no way of knowing whether the Club benefits from the rentals, other than covering the maintenance. Renting on a nightly basis leaves the Club and owners open to the possibility of 6 days loss of rental income.
Equally the Club committee does not know the booking priorities that ONAWimPen is applying to rentals, i.e. which weeks are rented first – owners weeks, cancelled weeks, WimPen weeks (if still owned on the resort), or Onagrup weeks?
The long list of questions about Onagrup’s rental practices goes on. Their claim of increased income needs to be explained and verified as to who benefits from this. Is it the owner, the Club or Onagrup?
Onagrup say the rental price is inclusive of taxes (7% IGIC); WimPen did not charge this, to owners at least.
Onagrup is quoting rental fees inclusive of a charge for electricity which leaves unanswered the question of who is paying for electricity used in excess of the inclusive amount?
|Q. Why is ONAWimPen describing Los Claveles as a hotel on holiday websites when it is a time ownership resort?|
|A. ONAWimPen has been advertising Los Claveles as a hotel on holiday websites which is part on Onagrup’s marketing approach and is probably why it offers rental guests hotel-style toiletries in their studios/villas. Spanish hotel regulations state that to be rated, each apartment must meet certain minimum criteria. One criterion is that each apartment must have a telephone. Inevitably owners are questioning whether this is behind new telephone systems being installed at the other resorts. (See web link below)|
We have also found out that in Spain Timeshares are registered as Aparthotels.
|Q. Where can I find out more information about Onagrup?|
|A. There are references to web links below|