The Timeshare Credit Crunch Saga: Part II December 10, 2008
Posted by Bryan Connelly in : ARDA, Customer Comments, Fairfield Timeshares, General, New Features, News & Events, RCI, Timeshare Rental, Timeshare Resale, Timeshare Resource, Travel, Westgate Timeshares, Wyndham Timeshares , add a commentScary times for everyone during this holiday season. The cheer this year is high yet sung with bated breath as U.S. employers already cutting 533,000 jobs since November. It is no wonder the tension is hitting home. This is the largest number of job losses since 1974. Numerous manufacturing and service companies are cutting employment by the throng. Timeshare demand is still high however, and travelers are still taking vacations. It is reliving to know that a much needed vacation, or holiday trip is still within a frugal grasp.
Westgate has laid off more than 3,000 employees and is looking at possibly cutting another 1,000. Wyndham is another struggling developer cutting costs (staff) where they can. Though other brands have made dramatic cut-backs, Wyndham has cut a whopping 13 percent of its workforce! Times got real tough once the credit market dried up. Wyndham immediately eliminated sales offices and marketing program. Since Wyndham Worldwide Corps., which finances 70 percent of their timeshare sales, did so by lending the customers the money to buy their vacation properties.
Developers then sell the loans into the market as securities backed by the receivable payments. A global credit freeze triggered by U.S. residential property defaults has abolished investor demand for all types of assert-backed securities. This has forced companies to tighten criteria and provide more limited financing. After the troubled housing market plummeted, investors worry that defaults on timeshare loans will spike. Those concerns have weighed particularly on Wyndham’s stock, which has lost more than 75 percent of its value this year.