Timeshare Trends Blog

Experts continue to paint a bleak picture of the industry’s financing operations as discussed in recent meetings where timeshare executives gathered for the 11th Annual Vacation Ownership Investment Conference recently held at the Peabody Hotel in Orlando.

Not much has changed since the capital markets ceased last fall, making it difficult for timeshares to fund development and sales. The good news is that, after a year, developers have at least adapted to the new conditions. Because of a lack of financing, timeshare developers deliberately slowed sales this year. Total industry sales this year are likely to total between $6 billion and $8 billion, which is equivalent to sales in 2004.

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Marriott International is cutting back on the high-demand home development business and is cutting prices at some of its fractional ownership resorts. Marriott is also planning to halt its timeshare development in Europe. However, according to a recent Orlando Sentinel story, Marriott officials report that their timeshare business run by Orlando based Marriott Vacation Club International is doing better than its high-end counterpart.

According to Marriott’s president and chief operating officer, Arne Sorenson, the significant decline in demand for luxury residential real estate is reflective of today’s economy. It also reflects the relative strength and deeper market of the traditional timeshare business, which while impacted by the weaker economy has proved to be more resilient.

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Consolidated Resorts is a Las Vegas based timeshare operator and runs 14 properties that include the Tahiti Village, Tahiti and Club de Soleil timeshares in Las Vegas; as well as timeshare operations in Hawaii and Florida. The sales and marketing operations have at least temporarily closed, but the resorts have remained open for use by timeshare owners. According to a spokesman for Consolidated Resorts, the bankruptcy filing has nothing to do with the timeshare owners, and the owners are in fine shape.

Consolidated Resorts has 5,000 to 10,000 creditors, apparently including many timeshare owners as well as trade creditors and individuals and other parties involved in litigation with Consolidated. Consolidated Resorts listed assets of $50 million to $100 million and liabilities of $100 million to $500 million.

While the company has not spelled out any further financial details in their filings, a lack of financing for timeshare buyers and dwindling inventory contributed to the filings, a source involved in the case said. The filing has curtailed expansion of the Tahiti Village, once known as the fastest selling timeshare in the country.

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Marriott’s Shadow Ridge resort in Palm Desert, California, has completed phase 7 of a 14-phase development plan. Phase 7 construction at the timeshare resort included two buildings and 73 two-bedroom Marriott timeshare villas. Currently, 19 buildings have been completed, housing 523 timeshare villas of the planned 972 timeshare villas. Phase I development of this California timeshare property began in 1999, when a timeshare sales office and maintenance facility were started.

Today the property includes a clubhouse, restaurant, spa, registration center, 2000 square foot pool with bar, grill and children’s beach, along with the timeshare units. The golf amenities are considered outstanding and include a golf pro shop with swing studio, lockers, club fitting, and golf admin center, which adds to the pleasure of play and practice at the on site Marriott’s Shadow Ridge Golf Club and the Faldo Golf Institute by Marriott. Phase 8 at the 300-acre resort is scheduled to begin in 2010

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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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Three Marriott Vacation Club International resorts have received Florida Green Lodging Program designation from the Florida Department of Environmental Protection. Marriott recently revealed that the designation was given to its Grande Vista and Cypress Harbour facilities, along with the Crystal Shores resort on Marco Island. The One Palm label was given to the resorts after they met all of the requirements to officially become part of the environmentally friendly association.

Troy Asche, regional vice-president of operations for the Florida-Caribbean region of Marriott Vacation Club, said that environmental stewardship is a vital part of providing memorable holiday experiences for owners and guests. He added that group efforts of the timeshare organization can make a significant contribution to the preservation of the Florida environment by making resort operations greener. Marriott recently received positive news earlier this month as Marriott Vacation Club International was named as one of the best places to work by the Utah Department of Workforce Services’ Work/Life Awards.

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The nation’s tourism industry could be on the cusp of winning a long sought plum from Congress: a national advertising campaign. The US Travel Association says that leading lawmakers in the U.S. Senate have pledged to bring up the Travel Promotion Act immediately following the chamber’s August recess.

The legislation would create a publicly subsidized advertising campaign aimed at drawing more overseas tourists to the U.S. from countries where they do not have to obtain a visa as well from industry contributions. President Obama was a co-sponsor of such a bill when he served in the Senate.

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Guest satisfaction improved in 2009 for most hotels in a recent study conducted by the J.D. Power and Associates 2009 North America Hotel Guest Satisfaction Index Study. The six categories of hotel properties that were studied are luxury, upscale, mid-scale full service, mid-scale limited service, economy/budget, and extended stay hotels.

In 2008, all the scores remained steady from the prior year. In 2009, guest satisfaction in four of the categories actually improved. Only extended stay properties (and these are extended stay hotels, not timeshare resorts or vacation ownership) saw a decrease.

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Wyndham Hotels and Resorts, a member of the Wyndham Worldwide family of hospitality companies has opened its first brand in China with a newly constructed 588-room luxury hotel in Xiamen. Wyndham Hotel Group is the world’s largest U.S. based hotel company in China, currently franchising 175 hotels and five brands throughout the country.

The 26-floor, five-star Wyndham Xiamen features five food-and-beverage outlets, 37,000 square feet of meeting space, a 2,658-square-foot business center and diverse fitness facilities. The Wyndham Xiamen has a 66-foot-high waterfall, a 23-foot-tall lobby chandelier, a 23-foot-high statue at the entrance named the Goddess of Heping (the indigenous goddess of the sea), there are 161 suites, 130 serviced apartments that range in size from 500 to 1,065 square feet—and all with views of the ocean or city skyline.

The top five floors comprise the Wyndham Club, with 90 executive rooms, library, business services, meeting room and split-level lounge. Each guest room features high-speed Internet service, stunning glass-design bathrooms with separate shower and bath, feather-down bedding, 32-inch, flat-screen LCD TVs, a safety deposit box with power to recharge laptop, nightly turndown service, room cleaning and refreshed linens. There’s also a 13,558-square-foot, pillarless grand ballroom that can accommodate up to 1,000 guests.

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The Whitewater Village Resort in Ontario is the newest Canadian resort to be a member of RCI, the worldwide leader in vacation exchange. The resort is known for being environmentally friendly and is one of the first resorts in eastern Ontario designed and built using a fully sustainable development model. The buildings 50% more energy-efficient than typical cottages, and are built using FSC wood. The resort provides geothermal heating, solar water heaters, Energy Star appliances, solar-powered golf carts, and electric vehicles for transportation in the car-free village.

There are currently three cottages completed; 34 cottages will be available by the spring of 2010. Both pet-free and pet-friendly cottages are available to RCI members. Members may enjoy outdoor dining and scenic views from their private screened-in porch, as well as energizing water activities at the resort’s beach house, including canoeing and kayaking.

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