Dear CPV Timeshare Owner,

We would firstly like to take this opportunity of thanking you for your continued support, and trust that you have all had enjoyable holidays over the past year.

2008 will go down as the year with the most difficult trading conditions ever known. A severely weakening pound and rapidly rising Spanish inflation led to large income shortfalls in most Costa del Sol located resorts. Many resorts were forced to issue their owners with an additional maintenance invoice during the year in an effort to shore up their finances.

As you will note, this was an option that has been resisted by CPV.

CPV instead, have continued with it's cost saving consolidation program, and we forecast that despite a 5.4% rise in Spanish inflation, our Spanish costs will fall by a further 3% in 2009 as a direct result of this program.

Despite the reduction in costs, when setting the invoice in sterling terms we have to take account of the Sterling Euro exchange rate and as I am sure you are aware there has been an historic fall in Sterling's value when compared to nearly every other currency, and against the Euro in particular.

If we had been setting the invoice solely in Euro's CPV would be requesting a 3% rise in fees for 2009, despite all of the inflationary pressures indicated above. However, when expressed in Sterling terms and accounting for the huge fall in the exchange rate, this equates to an average rise in fees of 23.9%.

As the owners of nearly two thirds of our weeks owned are based in the U.K. we understand that this rise is extremely large, but this increase in Sterling terms has occurred solely because of the weakness in Sterling, which is totally outside of our control. We also note that for nearly 20% of our owners this rise will represent a below inflation increase and for over 50% of them this rise will actually represent a fall in terms of their local currencies.

To partially offset the increased GBP based fees we propose to increase the prompt payment discount offered to timeshare owners. Hence you will receive a discount on your maintenance fees of £15 per week owned as long as payment is received at the Spanish administration office by no later than 15th November 2008. This equates to a 2.98% discount off of your fees for prompt payment.

We are aware of the difficulty that such GBP based fee rise may cause many of our owners and we are therefore introducing, a new post dated cheque instalment plan. This will allow you to offset the payment of your maintenance fees over a seven month period. To take advantage of this scheme just tick the post dated cheque instalment plan box on your remittance advice and send the form back to us by no later than 31st October 2008, complete with four equal post dated cheques dated 31st October 2008, 31st December 2008, 28th February 2009 and 30th April 2009. Unfortunately, this scheme is currently only available to U.K. residents, but we are looking at various options to extend this to other nationalities in future.

We are also very aware that these increases affect the low season week owners the most, as package holiday deals are available at these times that are cheaper than the maintenance fee owed. We are therefore also offering TWO low season bonus weeks to all of our timeshare owners who own weeks 44 to 52 and weeks 1 to 13. There are no strings attached, just ensure that your maintenance fees are paid up to date and that the completed form is returned back to us by no later than 31st January 2009.

These two extra low season weeks can then either be banked in the RCI system if you are a member, or can be used at CPV Resorts during specific times during 2008 and 2009. There are no additional maintenance fees to pay or any charges for the use of these additional weeks. You are therefore receiving the equivalent of 3 weeks holiday in 2009 for your one maintenance fee.

So what does the future hold?

Firstly, we are looking to protect our U.K. based owners from such future wild swings in the GBP/Euro exchange rate. As over 90% of our costs running the resort are incurred in Euros, it is prudent to change the currency that we invoice in. Hence, after discussions with the Residents' Committee we have agreed to start invoicing in Euros from the September 2009 mailing onwards. This will ensure that we have no repeat of the events this year, where our costs have fallen but our fees in GBP terms have substantially increased, solely because of the international currency markets.

We are also launching in December 2008, a staff restructuring program within the resort. Although there will be a reduction in the mid week shuttle bus service within the resort, we do not expect any of the other changes we intend to make to have a noticeable impact to the on site services we provide. All redundancy and restructuring costs for this exercise are being paid for by CPV and are not included in the maintenance fee charge for 2009. Our current estimates indicate that this restructuring will lead, at current exchange rates, to a reduction in maintenance fees of £41 per week owned from 2010 onwards.

We will shortly be reviewing a further range of measures to be implemented at the start of 2010 which we believe can further reduce the maintenance fees from 2011 onwards by a similar amount, whilst maintain the quality of service provided at the resort. We will be discussing this and other maintenance fee reduction plans with your Residents' Committee at our next meeting in March.

We would like to encourage owners with access to the Internet to view our website at www.cpvresorts.com. Here you will find updates on key staffing, what is happening at the resort, answers to commonly asked questions as well as other useful information when planning for your holiday at CPV.

Finally, may we remind all owners that any correspondence to your Management Company should only be addressed to our Spanish office at Aztec Country Club, Calle Libra s/n, Urb. Riviera del Sol, 29649 Mijas Costa, Málaga, Spain.

The management and staff, as always, wish you happy holidays.

Yours sincerely,

For and on behalf of
CPV MANAGEMENT SERVICES LIMITED