Wyndham Timeshare Announces Cut Backs
Wednesday, October 8, 2008
In yesterday’s The Timeshare Authority Blog, we reported on recent comments and releases by Marriott timeshare, Westgate Resorts timeshare, and Wyndham Hotels and timeshare. Today we are following that timeshare blog post with news of an announcement by Wyndham timeshare that they will be scaling back their timeshare business.
According to an AP release that appeared on Yahoo Finance and other news outlets:
“Wyndham plans to refocus its timeshare business beginning in the fourth quarter. The Parsippany, N.J.-based company will shift its sales and marketing efforts to consumers with higher credit quality and cut back on timeshare development.
Wyndham said its timeshare business “performed well” in the third quarter with slight year-over-year gains in sales, tours, and volume per guest. The company said its consumer finance portfolio also continues to perform within expectations.”
When any company says they will ‘shift their sales and marketing efforts to consumers with higher credit quality’, you have to wonder what that says about their past practices. Are some timeshare development companies guilty of the same types of behavior that led mortgage companies to extend credit to subprime consumers? What does a company have to gain by writing loans to customers who may not have the income and creditworthiness needed to carry the debt? The answer is simple: loans equal assets. Assets enable a company to borrow money, expand, or generally improve the look of their portfolio.
If Bill and Mary’s Bakery lets you buy donuts on credit, then the loan document that defines your credit obligation has a value to Bill and Mary as a source of incoming cash. And when Bill and Mary want to splurge on colored sprinkles, they can go to the bank and show your debt document as part of their own security needed to incur debt themselves.
But if you can’t afford to pay your donut debt, then all the lender holds is bad paper.
When you don’t pay Bill and Mary on time, then they in turn can’t pay the bank. And pretty soon, legislators are called in to write a bakery bail-out bill.
Let’s hope the reason some of the big timeshare companies are feeling the impact of the economic downturn is because of the cost of gas and increases in the price of durable goods, and not because they have been playing their own version of the subprime lending game. And if you don’t want to be caught up in any portion of the game, consider buying timeshare on the resale market, dealing directly with the person who owns it. Dollars to donuts, you will always find the best values in timeshare on the resale market.
