Marriott Suites Available for Less on the Timeshare Resale Market September 24, 2009
Posted by Bryan Connelly in : ARDA, General, Marriott Timeshares, News & Events, Ritz Carlton, Timeshare Rental, Timeshare Resale, Timeshare Resource, Travel , 1 comment so farMarriott International has decided to halt on building all new residential and timeshare projects. Shifting from spend to sell; the financially exhausting year of 2009 has forced the company to take a $760 million cut to the value of its timeshare sector. This write-down has triggered the hotelier to sell property, end timeshare developments, and to even sell off some of its undeveloped land.
Timeshare consumers have not only cut leisure spending, but they have chosen the online resale industry to save themselves thousands of dollars when buying or renting. And while a softening demand has left half-built luxury resorts idling around the globe, Marriott will continue to manage their properties and provide the same kind of quality that has made them so famous.
Though consumer spending has undoubtedly slowed as a result of layoffs, pay cuts and cutbacks, timeshare use is not at a significant low. People can’t afford to buy a high-end vacation property from the developer with weeks costing more than $18,000. Folks are still buying and renting timeshares by the throng but the resale market is where they are buying. During an all-out recession, the once booming timeshare concept is struggling without the financing available. Marriott’s Revenue per Available Room (RevPAR) is down 19%, but is better than the 20% to 24% drop projected. While profitability has gone down, people are steadily using these premium properties.
Marriott has begun harvesting whatever money is left in its own timeshare “investments.” The company recently reported that the write-downs reflect its plans to cut timeshare prices and development “to accelerate cash flow.” Roughly $300 million of the write-downs are at five luxury residential projects, a similar-sized write-down at nine North American fractional projects and $95 million at one other North American project.
BuyATimeshare.com has been able to fill suites at these properties for over a decade with timeshare vacation resorts for sale by owner. Aggressive prices offer premium luxury vacations for the price of a modest hotel. The recession has proven to be financially grueling for Marriott. The hotelier doesn’t expect “to pursue new Marriott-funded” residential timeshares, but does expect to continuing licensing and managing projects developed by others. The company said it expected profitability to improve at the timeshare segment, with cash flow there positive in 2009 and increasing in 2010.