Timeshare Trends Blog

Disney takes more of the burden of troubled timeshare mortgages from Citigroup. With the growing number of timeshare buyers defaulting on their loans, the Walt Disney Company recently assumed more than $200 in liability to preserve a credit agreement between its timeshare subsidiary and banking giant Citigroup.

The maneuvering involves a 1999 agreement in which the Disney Vacation Club would bundle together timeshare mortgages it issued to individual buyers and sell them to Citigroup. It was a lucrative way for Disney to make money, but Citigroup has virtually stopped buying mortgages from Disney, so in order to maintain an agreement, Disney has assumed more liability and will reacquire trouble Vacation Club loans from Citibank.

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The new Waldorf Astoria Orlando will be opening in October of this year and will have key amenities that will set it apart from its New York counterpart. It will have an 18-hole championship golf course created by course architect Rees Jones. The clubhouse will be completed and open for play on October 1, which is the same day the Waldorf-Astoria and the Hilton Bonnet Creek Hotels will open. Both properties are located close to the award-winning Wyndham Bonnet Creek Resort.

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Still on schedule are 50 new units that will open later this year in Disneyland in Anaheim, California, along with three recently opened timeshare properties right in Disney World in central Florida. The ambitious growth in the Disney Vacation Club is coming at a time when sales at the Celebration, Florida based timeshare business fell during the last three months that ended on March 28. It is the first quarterly decline that Disney has recorded in its Disney Vacation Club timeshare arm in several years.

According to the Orlando Sentinel newspaper, this has added more pressure at Disney’s worldwide them park division, which has relied on its vacation club to help fuel its profit growth in recent years. The new resorts in Disney World in Florida include the Kidani Village, Treehouse Villas, and Bay Lake Towers. In Anaheim, the Villas at Disney’s Grand Californian Hotel & Spa is on schedule, the resort in Hawaii remains under construction and is scheduled to open in 2011. Finally, Disney has purchased 15 acres just outside Washington DC with plans to build a family resort and timeshare units.

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Group RCI, the global leader in vacation exchange, and Disney Vacation Club, one of the world’s fastest-growing brands in the vacation-ownership industry, announced the agreement, which now allows subscribing members access to an even broader array of vacation opportunities.

RCI now becomes the exclusive third-party exchange provider for Disney Vacation Club, enrolling Disney Vacation Club’s more than 135,000 member families into RCI’s global exchange network. RCI has one of the most expansive portfolios of high-end affiliated vacation resorts, as well as more choices in more countries than any other exchange network.

Disney Vacation Club Members will now be able to enjoy vacations at a variety of destinations across six continents and 25 countries and have access to a significantly broader range of resorts, including all-inclusive options, more nightly exchanges and a selection of luxurious, high-end fractional properties. Similarly, RCI’s more than 3.6 million members will now also enjoy the opportunity to exchange into Disney Vacation Club resorts throughout the year.

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Disney timeshare’s newest accommodations are open at the Disney Animal Kingdom in Orlando, Florida. The Kidani Village, is an extension of the timeshare lodging already available at the Animal Kingdom Lodge. The timeshare resort’s name comes from the Swahili word for “necklace” and references the physical layout of the resort.

Of the 340 timeshare units that are part of the resort, approximately 60% are now in use. The remaining units are scheduled to be available by the end of the summer. The property will feature nearly 350 timeshare units at build-out. Amenities include a restaurant that serves African cuisine infused with the flavors of India, a water-play area, and the Samawati Springs Pool that features a 128-foot water slide and two whirlpool spas. Other amenities include a pool bar, merchandise shop, room service, fitness center, arcade, community hall, tennis courts, and valet parking. Units consist of every size from studio, to two-story, three-bedroom grand villas. Occupancy ranges from four to twelve adults.

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Disney plans to open three new timeshare properties in Orlando and one in Anaheim later this year despite a tightening credit market and slower growth of their Disney Vacation Club timeshare program.

The Bay Lake Tower at Disney’s Contemporary Resort will open on August 4. The roughly 300-unit tower will be linked to the Contemporary Hotel by a fifth floor pedestrian bridge. It will be the first timeshare resort ever sold by Disney that will be within walking distance of the Magic Kingdom.

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The timeshare arm of the Walt Disney Company, is experiencing huge losses now that it has lost its access to a long standing line of credit it had been tapping to raise cash by selling bundles of its timeshare mortgages it issues to individual buyers.

Disney sold $17 million in Disney Vacation Club memberships in its last quarter compared to $41 million one year ago. With Disney being forced to carry the timeshare mortgages as opposed to cashing them out will end up slowing Disney Vacation Clubs earnings and growth.

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Disney has confirmed it is in talks with the Chinese government about building a mainland China Disneyland theme park in Shanghai, but repeated that there will be no park before 2010. “On theme parks, we have ongoing discussions with the Chinese government about a park in Shanghai.” Disney’s Bob Iger was quoted as saying on Hong Kong’s Cable TV. There was no indication of any timetable on the new theme park for Shanghai, China’s biggest city and business hub.

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Disney Vacation Club continues unprecedented growth with two new development projects in Disney World.

Two highly anticipated resort developments announced today will expand the Disney World experience and continue the rapid growth of Disney Vacation Club, Disney’s vacation-ownership program. The 15-story Bay Lake Tower at Disney’s Contemporary Resort is scheduled to open in the Fall of 2009, and the Treehouse Villas at Disney’s Saratoga Springs Resort & Spa, is scheduled to open in summer 2009.

Bay Lake Tower sales began in September 21 for Disney Vacation Club Members. Disney’s Saratoga Springs Resort & Spa sales will begin at a later date.

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