Timeshare and the economic crisis: a roundup

November 27, 1:34 PMTimeshare ExaminerMark Silverman

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What others are reporting

The economy must be impacting the timeshare industry, at least in terms of sales.
The Street Talk Blog, primary source of industry chatter, reports rumors of layoffs and sales operation cut backs at companies ranging from Starwood to Westgate, Marriott to Welk Resorts.

It’s not all doom and gloom. Also from the Street Talk Blog, are accounts of Disney expanding from it’s southeast strong hold, opening a mixed use timeshare/hotel property in Oahu, Hawaii.

And industry expert analyst Dr.Richard Ragatz sees high-end fractional properties leading the way to financial recovery, ironically enough, due in part to the financial crisis the country is facing.

“The fundamentals of the vacation home market have changed,” Ragatz stated. “The days of buying a three-million-dollar house on the beach or at a ski resort with the expectation of 20% annual appreciation are gone for the foreseeable future.”
Ragatz noted that most luxury vacation homes sit empty for the majority of the year. “In the past, owners could justify the high cost and low utilization based on a significantly higher re-sale price,” he said. “Based on recent events, it’s difficult to imagine that scenario continuing in the next few years.

And the final item reported by the Street Talk Blog:

Tempus Resorts International on Nov. 18 presented the American Cancer Society with a donation of $30,805 as a result of the company’s recent “Pink Ribbon” fundraising events in support of the American Cancer Society’s “Making Strides Against Breast Cancer” annual campaign.
Tempus Resorts’ month-long fundraising efforts included a variety of employee activities to raise money and awareness about the need for continued support of breast cancer research.
Fundraising activities included bake sales, themed lunches, commemorative pink ribbon sales, “pink and blue jeans days”, and other events

The Orlando Business Journal reports that Bluegreen Resorts is cutting 182 people and lowering sales, construction and acquisition plans in response to the economic crisis.

The Timeshare Daily reports that some resale specialists are focusing on tourists visiting the United States from overseas. The declining dollar creates both an influx of visitors and favorable exchange rates, although the sales process is somewhat more complicated.

The Hawaii Reporter relates that most categories of US visitors to the Hawaiian Islands are dropping, whether by air or by cruise ship. There are fewer tourists; the ones that arrive spend less time, and less money while there.
There is an increase in international visitors to the Hawaiian Islands.
And the percentage of tourists staying in timeshares (thus the inclusion of this item in the column) is up as well. But I’m not certain if that is a result of more timeshare visitors or the same number of timeshare visits represents a higher percentage because the other numbers have gone down. Clearly, I’m not a statistician.

And finally Forbes reports that delinquencies and defaults in timeshare loans has been steadily increasing. I suppose when paying the mortgage is a challenge, the timeshare resort is not that much of a priority.