Wyndham Shares Plunge, Marriot Lay Offs

We've been rigorously tracking the effects of the current economic downslide here at the Timeshare Relief blog. Back in August we reported that Wyndham published signs of a slump. Now the Forbes headline reads a full-on plunge:

http://www.forbes.com/feeds/ap/2008/10/06/ap5515025.html


Shares of Wyndham Worldwide Corp. plunged with the broader market on Monday after the hotel company announced changes to its timeshare business and restructuring charges.
Indeed, and the effect on earnings will only be ascertained after the quarter's end. What changes can we expect? One humorous comment on the article suggests that Wyndham will be taking refrigerators out of their timeshare rooms and replacing them with mini bars...

Wyndham plans to refocus its timeshare business beginning in the fourth quarter. The Parsippany, N.J.-based company will shift its sales and marketing efforts to consumers with higher credit quality and cut back on timeshare development.

So, in other words, we can expect more timeshare resales...

Wyndham said its timeshare business "performed well" in the third quarter with slight year-over-year gains in sales, tours, and volume per guest. The company said its consumer finance portfolio also continues to perform within expectations.
But the 4th?

Wyndham's stock has dropped more than 20 percent since Marriott International Inc. (nyse: MAR - news - people ) said Thursday that its timeshare sales have dried up amid the tight credit market and cutbacks in business and consumer spending.

Indeed, and the stock market's nervous activity in the last week certainly will not assist this.

Marriot has problems of its own:

http://www.etravelblackboardasia.com/article.asp?id=56113&nav=109

"Marriot Profit Plummets in Uncertain Times"
Marriott adds that its profits in 2009 will be difficult to predict in this current economic instability.


Don't forget that title transfers through companies like Timeshare Relief remain an excellent method of escape for individuals who simply cannot break free. With the economy crumbling around us, it will become even more difficult to make monthly maintenance fees on an unused timeshare, and many may find their property unsellable at any price. Timeshare Relief is here to assist these individuals who may be burdened by their timeshare.

Timeshare Presentations Still A Source of Humor

A highly relevant news item about Las Vegas was published by Reuters yesterday. Heading off the article:

Sue Garrett, in Las Vegas for a birthday party earlier this month, went to what she considers extraordinary lengths to hold down the cost of her trip.

"We decided to sit through one of those blasted timeshare presentations to get a free hotel room," said Garrett, who lives in Los Angeles. She turned down the timeshare but earned herself and her husband a stay on the Las Vegas Strip for her trouble.

If only others had the same will power! Nevertheless, the article details how Las Vegas is finally starting to feel the burn, as it were, of the recent economy downturn, and the development makes sense. As we've covered extensively in other blog articles, folks have less money to spend on gas and airfare to get them to vacation spots, and less money to spend once they arrive. To pick up the slack, many non-timeshare resorts are offering discounts and vouchers just to attract more travelers. For Las Vegas hotels, the emphasis is on gambling, and in order to keep the necessary cash flow pumping most hotels need their slot machines and card tables full of consumers.

The same is true of timeshares, but -- in the case of fractional ownership timeshares -- the individual is already paying for, and owns, a resort that they cannot use. It's a bit like being a business owner in a tough economy -- you live and die with the ebb and tide of money.

That's part of why Timeshare Relief exists...to give some hope to those investors who bought more than they bargained for. And by the way...we don't recommend Sue's method for a budget vacation!

Hawaii = Safe Timeshare Harbor?

According to kauaiworld.com, timeshare sales have remained strong despite the flagging economy and its effects on the hospitality sector.

In their words:


Timeshare exceeded hotel occupancy by nearly 20 percent statewide, according to an American Resort Development Association’s Hawai‘i Chapter report last week. The association predicts Hawai‘i timeshare will continue to maintain its high occupancy figures throughout third quarter 2008, evidenced by the confirmed bookings through the month of September reported by Hawai‘i timeshare operators. Timeshare represents about 10 percent of the state’s total accommodations inventory, but is seen in a greater concentration on Kaua‘i.

“These figures demonstrate once again that even during downturns in tourism, timeshare continues to stand out as a reliable source of revenue for Hawai‘i’s economy and provide jobs for Hawai‘i’s people,” Mitch Imanaka, ARDA Hawai‘i chair, said.


There are a few issues with this however -- Hawaii is something of an anomaly compared to the contiguous US, being primarily a tourist economy. Timeshares in Hawaii are also more likely to retain their value than others in the contiguous 48, although the fact that Hawaii can only be reached by expensive airfare is likely to have some negative effect. In fact, the jury is still out on just exactly how the economy is changing the timeshare market. The numbers in Q1 of 2009 may tell an entirely different story.

Read the article.

Timeshare Sales...UP?

Apparently they are, but there's an explanation: timeshare resales are booming.

The blogosphere has been buzzing with this news lately, but Timeshares Daily has the scoop:

In a study released last week by the American Resort Development Association (ARDA), research prepared by Ernst & Young, LLP, shows that sales of new timeshares increased by 6 percent in 2007 over the previous year, totaling $10.6 billion in the US alone. Although gains were less than in previous years, the sale of new timeshare from 2003 to 2007 has increased by an amazing 66 percent.

But why?

Howard Nusbaum, ARDA president and CEO, says, "The continued growth of the timeshare industry in today's economy is a direct indication of strong consumer satisfaction and demand. Vacation ownership, with its flexibility and spacious accommodations, continues to be a preferred travel choice for American families."

The problem with this explanation, however, is that is doesn't make sense. Preferred choice or not, every area of the economy is feeling the pressure from recent issues, and travel seems a likely target for cut-backs -- especially considering the price of gas. But, Jason Trembley of Sell My Timeshare has another explanation:

"As good as the numbers sound for the sale of new timeshares, the report doesn't mention the huge segment of the timeshare industry that deals with timeshare resales, and that side of the business is really booming."

Of course. It would make sense that resale numbers are up, since owners are probably dropping extraneous expenses. Those that still can afford timeshare, then, are cleaning up in the aftermarket.

Information on the numbers of people buying resale timeshare is limited because the secondary market includes individual timeshare owner transactions as well as sales consummated by traditional industry specialists. In 2005, 7.2 percent of buyers bought timeshare from an existing owner, according to an ARDA profile of vacation owners. While this indicates a resale industry in the hundreds of millions of dollars, these figures are very conservative, as the survey did not include alternative sales methods such as the Internet.

We doubt the timeshare industry will be entirely immune to recent economic difficulties, but for now it seems to be carving out a pattern all its own -- which, for the industry, is very common.