ARDA

This is the first in a three-part The Timeshare Authority blog post taking an in-depth look at how the timeshare industry is weathering the US economic recession. Part I begins by looking at some very insightful information that appeared in HOTELS magazine earlier this month on the current state of timeshare sales and the timeshare industry.

In an article on 2/1/09, HOTELS Magazine observed that as recently as last October, they were still reporting that vacation ownership (timeshare sales) “defies the downturn“. Candidly, it seemed to most people in the timeshare industry that the historically proven success of timeshares sales would carry the industry through this economic recession. Here at The Timeshare Authority, we were delivering much the same message. In so many ways, it appeared that the proven strength of timeshares sales would even help some hotelier/developers compensate for weak hotel bookings.

But as the HOTELS article so aptly put it: “And then the sky fell.” Howard Nusbaum, the American Resort Development Association (ARDA) President explained, “We’ve never had a situation like this before, where we’ve been unable to monetize consumer paper. There were timeshare developers who were still having robust sales, but there was no way to monetize the consumers’ debt, so those developers had to slow their sales down. That has been very problematic for the industry.”

People didn’t lose their desire and interest to buy timeshare and timeshare developers weren’t failing in their goal of keeping plenty of enticing new timeshare resorts on the market. Instead, there simply wasn’t the available credit to finance the purchase of new timeshares. And the problem hit everyone … at least to some degree.

Disney Vacation Club Timeshare Dealing with the Challenging Economy

The Orlando Sentinel reported that in December, even Disney Vacation Club hit a snag when a line of credit the company had used since 1999 expired and was not renewed. In the past, Disney Vacation Club has helped approximately 75 percent of its timeshare buyers finance their purchase. Timeshare sales averaged between $20,000 and $30,000 for one-week of timeshare ‘ownership’ in a two-bedroom timeshare unit at a Disney timeshare resort.

After helping timeshare buyers take ownership of new timeshares, Disney Vacation Club often bundled timeshare mortgages together and resold them to investors. This securitization of mortgages was a source of profit for Disney Vacation Club timeshare, and according to the Sentinel report, “Disney Co. Chief Financial Officer Tom Staggs said during a December conference with analysts that the practice generated about $40 million in operating profit last year for Vacation Club.”

But Disney Vacation Club has the wherewithal of the Disney corporation behind them as a safety net. The depth of the company enables them to carry timeshare mortgages instead of selling them for profit. By doing this they will still realize the proceeds from the financed timeshare sales; it will just take the lifetime of the timeshare mortgage rather than the quick cash-out available when the mortgages are resold.

How much does this really hurt Disney Vacation Club timeshare? According to Morgan Stanley financial analyst, Benjamin Swinburne, Disney Vacation Club timeshare will see a “small increase” in 2009 rather than the estimated 18 percent growth it experienced last year.

In tomorrow’s The Timeshare Authority post, we will look at measures other timeshare companies are taking during these challenging times.

ARDA, the American Resort Development Association has announced an impressive line-up of Signature Sponsors for its 2009 American Resort Development Association (ARDA) Convention and Exposition to be held at the Orlando World Center Marriott in Orlando, Florida.

Among the 2009 ARDA Signature Sponsors are Group RCI, Holiday Inn Club Vacations, American Express, International Cruise and Excursions, Inc. (ICE), Interval International, Holiday Systems International (HSI), Textron Financial Corporation, Starwood Vacation Ownership, Inc., VacationGuard, Inc., and Whirlpool Corporation. The convention is scheduled for March 29 through April 2 and is the number one event held each year in which timeshare and vacation ownership companies and the industries that service them come together for education, networking, and the opportunity to learn about the most current trends in the timeshare and vacation industries.

ARDA President and CEO, Howard C. Nusbaum, says, “We are grateful for the 2009 Signature Sponsors whose support enables us to continue to bring cutting-edge programs and high-quality events.”

To learn more about this special timeshare industry event, contact Bob Craycraft at 202-371-6700, or bcraycraft(at)arda.org

Following yesterday’s news in The Timeshare Authority about reallocations of Disney timeshare points, comes this interesting news about a new Disney Vacation Club sales center.

Scheduled to open this summer, in Long Island, NY, is Disney timeshare’s new timeshare sales center, Disney’s Doorway to Dreams. The center will showcase the Disney Vacation Club resorts and feature model accommodations, discussion areas, and a supervised children’s play center; it will be located in the Roosevelt Field Mall.

Jim Lewis, president of the Disney Vacation Club says, “Our first Disney’s Doorway to Dreams location has been very popular and a great way for Chicago-area residents and visitors to learn more about the family vacation experiences available through Disney Vacation Club. We are now delighted,” he adds, “to bring Disney’s Doorway to Dreams to New York, which is one of the top markets for our rapidly growing membership base, so that more people can discover all that Disney Vacation Club has to offer.”

Good News for Timeshare Sales and Good News in the Job Market

Following weeks of The Timeshare Authority reporting on layoffs by Westgate timeshares, Marriott timeshare, Bluegreen timeshares and others, it is great to be delivering this news about a new timeshare sales center, which will no doubt mean the hiring of new timeshare sales staff. As Howard Nusbaum, CEO of the American Resort Development Association (ARDA) explains, “Disney has always been a unique and innovative leader in the timeshare industry. Now Disney’s Doorway to Dreams allows New York-area families the chance to experience how a timeshare ownership can help ensure years and years of memorable family vacations.”

And while we all know that the recession is not over yet, news like this is a very good sign for timeshare sales, the American family, and the big picture on the economy.

In Saturday’s The Timeshare Authority, we quoted Sandy Grey as a critic of the new timeshare regulations recently put in place by the European Union. Grey, essentially, was saying that the new timeshare laws are not yet tough enough to protect tourists from themselves. His statement appeared to say less about the laws and more about his lack of confidence in the consumer’s ability to make sound decisions.

Timeshare Industry Critic in Hot Water

The November 24 edition of the OTE e-News (Organisation for Timeshare in Europe) reported that the High Court in London has ruled that Sandy Grey, chairman of the Timeshare Consumers’ Association (TCA), is the man behind Crimeshare, a website found guilty of libeling many reputable individuals and businesses affiliated with the timeshare industry. According to eNews, “From the High Court judgement, it now appears that for a number of years Grey has been responsible for the publication of a web site that contained serious and defamatory allegations about many of the leading brands in the European timeshare industry.”

The OTE’s newsletter went on to explain that the Crimeshare website appeared under five domain names, and included personal attacks against both employees of and the directors of timeshare companies. Additionally, the website published blacklists that included reputable timeshare businesses. Among the 200 or so companies appearing on Crimeshare’s blacklist have been the American Resort Development Association (ARDA); Resort Condominiums International (RCI); and the Organisation for Timeshare in Europe (OTE).

In tomorrow’s The Timeshare Authority, we will look at the role Bob Trotta, well-known pioneer of the timeshare industry in Europe, played in bringing the case against Grey. And remember, to share your timeshare news and talk with other timeshare owners, visit The Timeshare Forum at Sell My Timeshare NOW.