Hospitality Industry Weathers China Currency Devaluation

Recent stock reports show minor down trending in the hospitality industry in the weeks following China's currency devaluation when compared to industries such as commodities, oil companies, and those industries involved with foreign currency and marketing products to China.

A Look at a Few Major Hospitality Groups

We looked at a few of the major publically traded timeshare companies to get an idea of how their stocks are trending, comparing today's rate to one month ago. Today (August 24) the S&P 500 was down 3.94 percent compared to the Friday before.

August 24 July 24

Starwood         70.53            81.89

Wyndham  74.75 83.06

Hilton 23.88 27.90

Bluegreen/BBX Capital   15.77 15.86

Though the industry is experiencing some of the effects of the overall economic conditions, it's typical of other mainstream businesses and much less than those companies more directly involved with China.  

The China Effect

To give you a little idea about how China's devaluation of their currency affects us all we consulted, "A country's economy and is currency is impacted by the flow of funds between countries. The more money leaving a country, the weaker the country's economy and currency. Countries like China who predominantly export physical goods or services continually bring money into their countries. This money can be reinvested to stimulate the financial markets within the country." China has historically kept tight control of its currency with favorable exchange rates boosting exports and manufacturing over time, and forcing the U.S. government put up with China's artificially lowered rates.

Industry in a Good Position

The hospitality industry is in a good position to weather this current affront from China. Our industry has grown exponentially over the past few years as the economy improved. But also largely due to nature of the industry. We offer joy, fun, comfort, relaxation and entertainment. We offer the ability to experience other countries and other people, and the ability to adventure away from our everyday lives. What other industry can claim to do all that? 

Maneuvering the Timeshare Secondary Market

You're probably used to seeing a lot of advertising from "postcard companies" soliciting anyone looking to get rid of their timeshare. As timeshare popularity continues to grow, these solicitations stand out, because most owners are happy with their timeshare and are not thinking about selling. But, if this is a time in your life when you have a reason to sell, there are resources to help you maneuver your way through the timeshare secondary market, avoid the scams, and even find alternatives to selling.

Where to Start

The approved party line on the retail market is ARDA-ROC's Timeshare Resale Resource Center. Since its inception in the 70's, ARDA has offered information on the often confusing and frustrating secondary market. They have held symposiums, monitored resale companies and utilized industry leaders to come up with the best solutions. The Timeshare Resale Resource Center site can answer most if not all of your questions. 

First Steps

The very first step the site recommends is to consult your resort developer, manager or owners' association. Often homeowner associations or the management company have websites or newsletters for advertising your timeshare. They may also have a resale program or an affiliated licensed broker that handles resales. Find out how much past resales sold for, what was the commission, and answers to other concerns. And don’t forget the other owners at your resort. If they own weeks before or after you, or own only a small amount of points, they may wish to purchase more time.

Answers to all Concerns

With the Timeshare Resale Resource Center, ARDA-ROC is attempting to answer the concerns and provide information about all aspects of maneuvering the secondary market from buying to selling. Questions about what kinds of resale companies are around, how to prepare to sell and price your timeshare, how to know if a company offering to sell your timeshare is legitimate, and much more can be answered on this site. 

Alternatives to Resale

Don't forget that there are alternatives to selling - in fact selling is not always the best option to choose.  Consider donating your weeks to charity or philanthropic causes. Organizations like Send Me on Vacation, can make you feel good by making someone else feel good through a donation of a vacation to a breast cancer survivor. Give your family or friends the gift of a week or points, rent your timeshare, trade for a cruise, or check with your resort developer or manager about giving your timeshare back.

Continuing Research 

The National Timeshare Owners Association (NTOA) is working on their first executive study on timeshare resale issues. They are partnering with Dr. Tammie Kaufman, a timeshare professor at the University of Central Florida, industry professionals and timeshare owners to analyze and prepare data compiled by the associations Secondary Market Solutions committee.  NTOA wants to help meet the need to educate consumers on how to buy or sell timeshares safely in the secondary market because of the problem of unscrupulous telemarketing and resale operations. According to NTOA more than 10 billion in available inventory sits idle with more piling on each year due to these scammers.

For more information go to or 

More Proof that Timeshare is on the Upswing

We've heard the good news reports from industry leaders that the timeshare industry is experiencing an upswing. Reports of strong growth and positive comments are coming from all sectors of the industry. If you need more proof, this month’s Fitch Rating Outlook for timeshare should provide it. According to the rating agency, U.S. timeshare ABS delinquencies fell again in the past quarter to their lowest level in eight years. Fitch also reports consistent year-over-year improvement since 2012 with:
  • Delinquencies down for second quarter 2015 – 2.66% down from 2.79% in the first quarter of 2015 and 2.92% in second quarter 2014.
  • Defaults down for second quarter 2015 – 0.57% down from 0.67% in the first quarter 2015 and 0.66% in second quarter 2014.  On an annualized basis, defaults were 6.42% for second quarter 2015, down from 6.51% in the first quarter 2015. This represents three years of quarterly improvement, as well as the lowest level of defaults for timeshare ABS in six years.
Fitch's Rating Outlook for timeshare ABS remains stable due in part to the delivering (to decrease financial leverage) structures found in timeshare transactions and ample credit enhancement levels.

What This Means to Us

To owners, developers, managers and everyone with an interest in timeshare, this is very good news. It supports the positive attitude about timeshare currently trending in our industry. When people are happy with their timeshares, they pay their bills and they don't default. 

Business 101 Review

In case you were wondering, ABS stands for Asset-Backed Security. A definition from says it's essentially the same thing as a mortgage-backed security, except that the securities backing it are assets such as loans, leases, credit card debit, a company's receivables, royalties and so forth. It is not backed by real estate or mortgage-backed securities.

The Fitch timeshare ABS index is an aggregation based on pools of securitized timeshare loans originated by various developers. Expected cumulative gross defaults on underlying transactions can range from 9% to above 20%. Delinquencies and defaults may vary on an absolute basis, but most transactions supporting the index exhibit similar overall trends.

The Fitch timeshare performance index summarizes average monthly delinquency (over 30 days) and gross default trends tracked in Fitch’s database of timeshare asset backed securities (ABS) dating back to January 1997. It is available on a quarterly basis. For more information go to 

Hark! What are Users of Social Media Saying About Timeshare?

Social media monitoring, one of the latest marketing tools, is getting much attention lately. One user is the timeshare industry's trade association, ARDA. As part of ARDA's Social Listening Initiative, the organization is using online listening tool Radian6 to monitor social media news from sites such as Facebook and YouTube, plus news, blogs, forums and more, to find out the chatter about timeshare. The results are published in the Hark Report.

Hark Report

How does it work? The listening tool monitors unsolicited reviews of what individuals are saying about the timeshare industry. Keywords, like "value" or "love" along with "timeshare" are searched and then run through a calibrated industry profile. ARDA then weeds through relevant posts to find digital conversations that reveal what people are feeling and sharing about timeshare. As a timeshare executive, you can use the information to adjust your marketing strategies. As an owner you may find valuable suggestions and answers to your questions.

The Tide is Turning to Positive

The feedback from social listening shows that the tide of attitude about timeshare is getting more positive. People are realizing the benefits of timeshare owning and they're sharing it. Here are some of the notable conclusions and relevant comments gathered from the data:

  • Timeshare makes vacationing a financial possibility for larger families. This was posted on the Forum Post, "We bought for a NICE and large enough space for our big family. We wanted nice, we wanted convenient, and we wanted LOCATION. We look at our timeshare as prepaying our trips. So is it worth the money? Yes, because we have a family of six, and are adopting again and my mom and her partner plan to join us on a trip or two. To stay in a nice resort that would hold ALL of us would cost a fortune."
  • Location continues to be of significant importance and there is still appeal in going to the same place every year. From Facebook, an owner posted, "We've loved going back to Maui every year. The kids love going to the beach and swimming at all the different pools at the resort. It’s just a fantastic."
  • People want to know how to use their timeshare after the prime "family vacation" years. Here are questions posted to the DIS Board Forum, "Still thinking about long term family changes and vacation needs as time goes on BEFORE purchasing. I have 2 small children now and know they will grow and change. Do you mind sharing how your family has changed and if you still enjoy DVC now? Would you do it again? Do you enjoy going without kids? Have you traded in to try RCI?"
  • Timeshare employees remain an important, integral part of the overall vacation experience for guests and owners, as unique and interesting people. From a personal blog, "I spent a couple of days on Kauai and stayed in Princeville because I could use a timeshare for free. I did no planning for this island. The timeshare had a concierge on duty, so I stopped in a couple of times to find help making plans for the day. Enter Kai—one of the concierges, and a Kauai native. She has lived all over the world and lives an adventure lifestyle when not helping people like me navigate their way through her island."
  • When people explain the benefits of timeshare, they consider it the best of all worlds.  From a Forum Post, "For personal travel, if it’s just the two of us or our immediate family, I prefer staying in privately rented condos or timeshares vs. staying in a hotel. I own a Westin timeshare and really love their resorts. I love that they blend the conveniences of a condo (including separate bedrooms and TV's, kitchen, washer/dryer, and grills) with the amenities of a hotel, such as a great pool, hot tub, tennis court, and poolside service. That IMO, is the epitome of my type of vacation."