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Annual General Meeting Q & A

1.  Why were only 48% of membership fees received by 31 December?

The club bills membership fees at the end of November with a due date in January.  48% is therefore very good because it indicates the number of people who have paid in December. It is very positive that members have paid and that they do so, so quickly.

2.   Will members be refunded their 2020 annual membership fee if they were unable to use their villa.

From the inception of the club it has always been the case that membership fees are due annually and are not refundable. Membership is effectively shared ownership of the club and, as if an individual owned a property directly, the expenses continue whether it is used or not.  While expenses have been reduced wherever possible we have lost the bar and restaurant surplus and a large part of the commissions from rentals and resales and will continue to do so for as long as there is reduced occupancy.  Our hope is that the reduction in expenses will balance the reduction in income, but only time will tell.  We are still dealing with travel restrictions from our key markets and a second wave, or just an increase in infections, could also lead to local restrictions being re-introduced. A number of members have successfully made travel insurance claims.

3.  In view of Covid-19 and the fact many members will be suffering financial uncertainty and the real prospect of losing their jobs will the board confirm annual membership fees will at least be frozen or indeed reduced considering the good financial health of the Club and state assistance you received.

It is not possible at this stage to be able to say what the effect on next year’s fees might be.  The membership fees, which are set in November each year, reflect what we estimate will be the net costs of running the club, after deducting the revenue we expect to generate, plus the allocation of 12.5% of fees to the sinking fund which funds the capital expenditure required to keep the club up to date. Our budget for the year is to broadly break even.  However a surplus of around €500K in the summer months covers a similar deficit through the winter.  As we move into the peak summer and early autumn months we will necessarily need to incur the costs, which have been increased by the additional measures we need to take to protect staff and our members and guests, but only time will tell if we are able to cover those costs let alone achieve any small surplus, which we would prefer to do in a normal year.
As mentioned in the answer to the previous question, the revenue which is generated is very important in keeping fees as low as possible.  We will lose, from the middle of March, a very large part of that income, which last year amounted to more than €3 million. We moved very quickly to reduce all costs possible. We have also had support from the government for the temporary lay-offs for the majority of our staff.  However, while the help has been significant it does not cover all of the payroll costs.  Currently the position with regard to lay-offs going forward is unclear and we are waiting clarification of the detail. What is certain though is that the benefits will be reduced. At the same time, we also know that with facilities opening up and the need to bring staff back to work that the cost of doing that will be greater than the income that we will be able to generate. While the club is in good financial health in normal circumstances these are exceptional times. In a worst-case scenario, the cash flow forecast to the end of the year shows the club can survive but, at that time, would be entirely reliant on its reserves and to continue we would be dependent on the income from the 2021 fees. Clearly we hope that it will be better than this but as yet it is far too early to say.
As far as costs are concerned, we have always maintained very tight control and have sought to strike a healthy balance between costs and quality of service. As will be clear from the foregoing, a waiver of fees is not possible, but even reduced fees could mean that our quality of product and service would inevitably suffer. The board of directors have always tried to keep fees as reasonable as possible and to react in circumstances where necessary e.g. during the most difficult years of the recession we reduced the allocation to the sinking fund from member fees from 12.5% to 10%, stopped most capital expenditure and with very careful management were able to keep membership fees at the same level in 2012, 2013 and 2014. The fees are simply set on the basis of what is required to run the club.  Until we have more experience about the effects of the pandemic and the propensity of members to travel, we cannot commit to the level of fees for next year.

However, the above all said it does not mean that the matter is just being left to one side and this subject was in fact discussed at length at a virtual board meeting that was held during May and in fact revisited again at the virtual board meeting which preceded the AGM. What that did however was to clearly illustrate that there is enormous complexity and multiple and varied layers within this. As a board we do understand and empathize with individual members who were not able to use their weeks and with those facing any financial uncertainty or at risk of losing their jobs. A number of the directors of the club have also been affected. However, it still remains too early to be able to know what, if anything, might be possible to do at this stage or indeed what ultimately we might actually be facing.

4. Why is there no forum for members to discuss Club matters online without censorship, especially as the proposed rule change only intends to limit members ability to speak freely about the Club online.

You refer here to two different things. An online forum for members to discuss things is something that we have had in the past, on the members section of the website. It was discontinued because it wasn’t used. If it is something that members’ want and would use, then we would be very happy to reinstate that. However, in referring to the rule changes that is a different issue and is the use of online review sites for club matters and those are not the place for that. If a member has any questions or issues that relate to the operation of the club then there are adequate means to do so. Social media and its use through negative comments especially on review sites can in fact be very damaging to the club, in which we all have an investment.

In your correspondence on this subject, copied to the board, you stated: Why shouldn’t a member be allowed to name and shame the Club online, all feedback is good as it keeps organisations on their toes. “Sticks and stones may break my bones your words will never hurt me”? People need to man up! That would be a very exceptional view which, from the weight of feedback we receive, would not be shared by the vast majority of members of the club, if indeed by any other member at all.

One of the reasons that we sought members consent to the rule change relating to aggressive physical or verbal behaviour is that we have had occasions, albeit extremely rare, when members, or renters, have threatened to use social media to get their own way when a perfectly reasonable explanation has been given, which they choose not to accept.

5.  Why did the General Manager ignore my request to forward my villa rental enquiry to members with a villa during weeks 23 - 26? I know members would have been glad to recover something instead of having their villa go empty.

Firstly this was not ignored; you were offered a very good rate which represented a very significant discount which was declined. The reason for that being that you felt that the rate applied should be just €400 for the week, which represented a payment in effect of just 15% of the normal weekly rate at that time for the unit size requested. The club’s policy is to try to maximize the income from the rental pool for the members of each week. Promotions are put in place to promote sales where demand falls. We use price adjustments and promotions to promote interest and the rental pool gives us more flexibility to be able to do this. Decisions regarding rentals are made for the benefit of the members in the rental pool in any week and the club in general and not for the individual who might wish to take advantage. In the most recent situation related to Covid-19 any rentals and the return from those had to take into consideration the cost to the club, and therefore the membership in general, of bringing people back to work from lay-off.  As with so many things it is a question of balance and our judgement was that those costs, and associated organisational impact, would exceed the revenue offered, if this was the benchmark price being set.

6. Instead of re-electing the same board members wouldn’t it be a good idea to encourage members to take a more active role in running their club? I am sure the current board do a great job, but new people have new ideas.

Any member can apply to be a member of the board and we have on regular occasions sent out an invitation for people to do so. The last was at the beginning of this year, not at this stage to replace anyone but just to look to the future as it is important that we maintain the right balance of skills, experience and background of those involved. Those that applied at the time have been informed that the process is currently on hold given the situation that we now find ourselves in but there will be a number of interviews that will take place when it is practical to do so.  New board members joined in 2015, 2018 and 2019 so there is renewal but we have also found that there are substantial benefits from continuity and it can take some time for new board members to get up to speed on the various facets and complexity of running the club.

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