Top Players in Timeshare Industry are Making Changes

With the recent economic downturn, the top players in the timeshare industry are making big changes to their business models. Here’s how Wyndham Worldwide, Marriott International and Starwood are tightening their belts.

Wyndham Worldwide
Wyndham is cutting a reported 4,000 jobs in its timeshare division due to a lack of financing. The company, whose brands also include Super 8 and Ramada, are estimating a drop in overall sales this fiscal year. They reported $2 billion in sales for 2008, and are expecting $1.2 billion in 2009. Financing options will be limited for those looking to buy Wyndham timeshares as well. Previously, if you were willing to buy a timeshare, simply signing the papers was enough to complete the transaction. But now a more stringent credit approval has been put into place and their 90% financing options are no longer available.

Marriott International
Many timeshare companies, such as Marriott, are now demanding that buyers have higher down payments and good credit scores to qualify for a loan. Only about half of all buyers are eligible to receive financing from Marriott, down from 80% previously. Also, the down payment required for a timeshare purchase amount has increased from 15 to 20% up from the 10 to 15% that was once the standard.

Starwood Vacation Ownership
Starwood reports the least amount of cut backs and changes. But, in an effort to “watch every dollar” they have reduced some of their owner incentives, like the free nights program.

All businesses, timeshare specific and otherwise, are riding out this economic storm the best way they can. It’s actually good that companies are being forced to take a hard look at their costs to do business. By getting out of their comfort zone and drilling down all aspects of their P & L, they will emerge running better and stronger than before, and when the economy does turn around, they will be in a better position to grow their business accordingly and add more value to their customers.
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