Timeshares Continue to Drop

The opening of 2008 has been a real crash for businesses especially for the timeshare industries. The recession has influenced the rising of goods and commodities’ prices as well as the services rates. It tightened the belts of many timeshare owners and so they think it is just fully sane to withdraw from their precious timeshare properties.

The popularity of timeshares in the 1970s has slowly died down. According to Howard Nusbaum, American Resort Development Association President and Chief Executive Officer, that timeshare sale may drop up to 30 per cent this year. The market for timeshares within the next 18 months will greatly be a challenge according to Patrick Scholes, FBR Capital Markets & Co. Senior Equity Research Analyst.

Deutsche Bank Securities New York Analyst, Chris Woronka, said that timeshares are considered to be discretionary items in which people are afraid to pay for it. He also stressed that the main obstacle faced by the industry will be “a semi-permanent reduction in demand” since people are not eligible to have it due to low credit scores and so timeshare buyers are lesser.
So far, the highest timeshare sales drop was in 2007 with $10.6 billion. This was the first downfall of the industry since it started its concept in 1975. Last year, it dropped to 8.5 per cent equivalent to $9.7 billion losses according to an Ernst & Young LLP study prepared for ARDA. In effect, there were jobs slashed down.

Three notable timeshare major hotels have been affected with the crisis. Marriott International Inc., have cut prices, stopped further constructions, and sold their underdeveloped lands. Senior Vice President of Marriott’s Investor Relations, Laura Paugh said in a phone interview that there will be no more developments given the risks, yet still they plan to finish the inventory made.

Wyndham Worldwide Corp., considered to be the largest seller of timeshare units, plans to cut 40 per cent sales made in 2009. Starwood Hotels & Resorts Worldwide Inc., sales dropped at 48 per cent as reported last January. With it, they have shut down nine sales centers across the world and slashed down 900 employees since early 2008. Scholes said that the industry is being tied up with the availability and/ or lack of financing for the timeshare units.

These are just some of the little news. The timeshare resale market keeps increasing day in and day out. Listings are being posted on websites so many can avail of the services that these timeshares have to offer.