From the Associated Press via www.forbes.com comes an update about the timeshare giants Wyndham and Marriott. Wyndham announced it is laying off 4,000 employees, (they called it "cutting 4,000 jobs") in response to a decline in their timeshare sales projected for 2009 of $1.2 billion from $2.0 billion in 2008. Wyndham's projected $1.2 billion in timeshare sales still sounds fairly strong with all things considered. Credit continues to be the issue with Wyndham financing about 70% of their sales. They will no doubt raise the bar when qualifying their buyers. So far this year, Wyndham's stock has plummeted 75%.

I look in on Marriott's blog from time to time. The Chairman and CEO of Marriott International writes on their blog fairly often. Yesterday a guest writer, Arne Sorenson, Marriott's chief financial officer, seemed quite positive in saying "Today, we're increasingly nimble in responding to demand trends. This includes our timeshare business, which we believe will weather the downturn just fine." This is likely due to a good balance sheet and a $1 billion line of credit still in place for Marriott. These days, it is all about the credit.

If you have ever had the experience of being in the "wheel house" of a big ship, you know that if you want to make a sharp turn, you have to have some speed going into the turn, and turn the helm at the right time. Our economy, like a big ship, cannot turn on a dime, but sectors of our economy whether it is hotel and tourism, manufacturing, or oil and gas can make the changes they need to survive. Let us all hope that their respective "helmsmen" are making the changes they need to keep up in this rapidly changing economy.

Ships in San Diego Bay, courtesy of www.PDPhoto.org

In a word, nothing. The value of your timeshare will not be determined by the price of the timeshare resort developers stock price. Just because Wyndham's stock dropped by 7% on Monday, does not mean you should panic. The same goes for Marriott timeshare owners. The quality of service you receive as a timeshare owner will not likely be affected either.

These companies are still very profitable and any cuts they make in the short term will have more to do with new sales and new developments than current operations.  From the Associated Press, "Wyndham's stock has dropped more than 20 percent since Marriott International Inc. (nyse: MAR ) said Thursday that its timeshare sales have dried up amid the tight credit market and cutbacks in business and consumer spending." Large timeshare developers who have significant hotel business depend on the steady cash flow of timeshare sales. This cash flow is stopped when other businesses will not buy their loans. The emerging strategy is to focus their marketing on buyers with a higher credit rating.

As a side note, Starwood has taken a similar hit on their stock price but maintains an "outperform" rating by Oppenheimer. Starwood resorts include big names like Westin and Sheraton.

Chances are, when this economic storm passes, the big players in the timeshare world like Wyndham, Marriott, and Westgate will once again "lower the bar" to make more sales.

"History teaches us that we never learn from history."

PS: Anyone know if this has stopped resorts from exercising their "right of first refusal" on a timeshare resale?

MAR - Marriott, WYN - Wyndham, HOT - Starwood

Lately, any question involving a loan application would be enough to make anyone nervous. Let alone, a loan for a timeshare.  But, if you want to sell your timeshare, it would be helpful to know that there are lending institutions out there to help you with the process.  Seizing the moment, several lenders have developed a process to address this need.  Recently, www.businesswire.com ran a story about FirstAgain LLC "an online consumer lender focusing on individuals with excellent credit, continues to gain momentum with an easier and faster way to fund anything, including home improvement projects. The company’s AnythingLoan, a revolutionary, unsecured loan product that combines low rates with an unparalleled customer experience, is a convenient alternative to ever-shrinking home equity financing options." (source)

Another lender to consider would be Tammac Financial Corp.  From their website: "Andy G. Roosa, President, Chief Executive Officer and a founding officer of Tammac has been involved in the resort financing industry since 1978. Through his direction, Tammac has been responsible for the financing, acquisition and servicing of over a billion dollars of resort related contracts throughout the United States and the Caribbean." (source)

Most importantly, don't pay too much in the first place.  Buy a timeshare on the resales market from a timeshare specialist like those at www.rpmls.com.