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Just got this......[Franz Hanning retiring]

BellaWyn

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Timeshare is an aspirational purchase for most folks. They are on vacation, having the time of their lives, and someone promises them they can bottle that magical feeling for years to come "at today's prices." When they sign, they feel really good about the purchase, and most of them do not go looking for reasons why that decision was a bad one---at least, not until it is too late.

Completely agree with this... The TS industry, even with today's more immediate information, still banks on guests being on a "vacation crack" high when they sit down in a sales meeting and they have been working that euphoria since the industry began.

I suspect that there is enough slack in unsold inventory to cover that. I also suspect most of those extra points have either been (a) transients created in the switchover to no-cancel-points (so not systemic and easily recoverable) or (b) concentrated in very high-churn accounts (e.g. those currently frozen). They probably do not know how to solve (b) just yet, but that's not to say they won't ever. You are living in the middle of reason (b), but there just aren't that many of you.

Right, hospitality by it's very design, will always have some element of unsold (or contingency) inventory at any given time. It's not about not having enough units to cover the points, its about the points ACCOUNTING systems that are currently in place that were never designed to handle the increasingly complex rules that come on board every time they introduce a new "Club" with unique rules. At some point all those Clubs are still pulling inventory from the same giant pool of inventory product and points. It's a gross mis-management of the accounting processes.

How they are going to fix it is something only time will tell. I don't think the problem is unique to only high point owners or mega-renters. At some point, the system has got to get reconciled and that process will ripple throughout the entire ownership base, regardless of which Club the owner is a participant.
 

bnoble

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I really just think he simply retired. He's hit retirement age and it's time to take it easy.
I thought so at first too. He's 62, and while that's a *little* early, it's not too early given he's been making north of $5M per year recently. Not a bad time to kick back, enjoy the grandchildren, and do a little traveling while you still have your health.

But, the fact that his erstwhile boss is serving as his interim tells me that (a) this was not contemplated in advance and (b) there was no succession plan in place. If you're going to retire, and you are a C-level executive, you don't just walk into your boss' office and give him your two weeks notice. You sit down and say "In six months, I'd like to retire. Let's start planning how we handle that so that the right person is ready to take over."
 

nicemann

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You sit down and say "In six months, I'd like to retire. Let's start planning how we handle that so that the right person is ready to take over."

Great point. Think with a little notice they would have found someone. Maybe it was one of those force retirements.
 

ronparise

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I thought so at first too. He's 62, and while that's a *little* early, it's not too early given he's been making north of $5M per year recently. Not a bad time to kick back, enjoy the grandchildren, and do a little traveling while you still have your health.

But, the fact that his erstwhile boss is serving as his interim tells me that (a) this was not contemplated in advance and (b) there was no succession plan in place. If you're going to retire, and you are a C-level executive, you don't just walk into your boss' office and give him your two weeks notice. You sit down and say "In six months, I'd like to retire. Let's start planning how we handle that so that the right person is ready to take over."

Exactly
 

cayman01

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Look at it this way. if things were going along just swimmingly would he have retired? Probably not. But the proverbial crap is hitting the fan from all directions and he wants no part of it. Holmes is stepping in to try and clean up the mess. He has a very difficult job ahead while Franz goes sailing off into the sunset. I hope his severance is exactly zero.
 

TUGBrian

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wjappraise

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I really just think he simply retired. He's hit retirement age and it's time to take it easy.

Club Wyndham seems to be performing well financially, so I think it's just a regular retirement.

That might be the case, but don't ignore the elephant in the room: No replacement is taking over, his boss is filling his job in an interim status. If a football coach plans to retire the team has a new coach ready to take over, he may even work with the existing coach for years. If the football coach is fired or forced out, an "interim" coach takes over. Seems sudden to me, not planned.
 

gottashiner

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I never received this notice and I'm Platinum. Guess I've complained too much lately.
 

lcml11

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Could this be related to the State of Florida looking into the unwarranted suspensions of dozens of VIP owners, without due process?

Anybody here any additional information on if the retirement and the suspension issues are linked?
 

ronparise

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so heres another theory regarding Franz Hanning's retirement.

We have speculated here that it might have just been time. He is 62 years old and has had a career that went from timeshare salesman to running the entire timeshare division at Wyndham Worldwide, Last year gross revenue at WVO was 2 billion dollars, as Steve Holmes said in the 4th quarter earnings call "The fourth reason I'm confident in our future is that we are recharging our Wyndham Vacation Ownership business, which is already an absolute powerhouse. Let me put that into perspective. While the business had some challenges in 2016, gross VOI revenue exceeded $2 billion. That's a first for any developer in the history of the timeshare industry and double the size of our nearest competitor"..

So Franz Hanning is going out on top, and there is no reason to suggest he was forced out for any reason. Perhaps its just time


We also speculated that the $20 million that a former salesman was awarded in a wrongful termination lawsuit and/or the suspensions mess that is still going on, might have been responsible for his early retirement. Lets face it, the suspensions wont cost wyndham any money and 20 million is just 1% of 2 billion.. That cant be the reasonn Franz is leaving (at least I dont think so

But heres something else that could be the answer.


someone asked a question in that earnings call about how the search for Hannings replacement was going and heres the answer (the underlining is mine)


Joseph R. Greff - JPMorgan Securities LLC

Steve, with respect to filling Franz's spot in Vacation Ownership, can you talk about the progress in that search, and then maybe focusing on that search. How important is the new person having public company or public company timeshare experience?

Stephen P. Holmes - Wyndham Worldwide Corp.

And the second part of the question is a interesting way of asking the same question you asked last quarter about the spin, I guess; very, very clever way of doing it. The answer is, it's important that somebody has public company experience, I'm not saying that we're looking for someone necessarily who's been a public company CEO. But certainly as the board has directed me, we want to keep our optionality open. So we want to be able to bring somebody in who is capable of leading an organization, if that's what the board chooses to do. But that's again, not making any more statement than I made last time about how the board is looking at all of its options and will continue to do so

for context heres the question and answer from the 3rd quarter call


Joseph Greff

All right. Then my final follow-up here, and I believe I've asked this before in the past both on conference calls even probably related to you, Steve, given the size of your company now versus when it's [indiscernible], why not here today or sometime today think about spinning out into two or three companies? The evaluation that it's hard for you to grow through inorganic means and M&A and spinning out might allow you to do that, how do you think about those things right due to more real world economic cycle? And that's it for me.

Stephen Holmes

Okay. Well just to show that I'm consistent, Joe I will give you the same answer I gave to when we were speaking privately. It's something that we constantly look at. The board is very active at looking at different opportunities and that is something that we have talked about before and we will probably talk about in the future, but if we had anything to announce, we would announce it today. We are constantly looking for ways to drive more shareholder value and more than that I can't say because the board has to deliberate and we have to all decide what the right thing is for the company



What the guy from JP Morgan was asking is this. Are you looking for a replacement for Hanning that has experience running a stand alone public timeshare company... so that if you spin off the timeshare division, you will have the right guy running it. And the answer, as I read it, was yes, thats exactly what the board has instructed me to do..

so heres my speculation Franz is just a good old boy from Pascagoula Mississippi. (ever wonder why we have a
Margaritaville Vacation Club? Jimmy Buffet is from the same town) who took the timeshare division from a few Fairfield Resorts when he started to a 2 billion dollar company today,, Good job; but to take it public they need someone with experience running a public company

Anyway food for thought.
 

lcml11

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so heres another theory regarding Franz Hanning's retirement.

We have speculated here that it might have just been time. He is 62 years old and has had a career that went from timeshare salesman to running the entire timeshare division at Wyndham Worldwide, Last year gross revenue at WVO was 2 billion dollars, as Steve Holmes said in the 4th quarter earnings call "The fourth reason I'm confident in our future is that we are recharging our Wyndham Vacation Ownership business, which is already an absolute powerhouse. Let me put that into perspective. While the business had some challenges in 2016, gross VOI revenue exceeded $2 billion. That's a first for any developer in the history of the timeshare industry and double the size of our nearest competitor"..

So Franz Hanning is going out on top, and there is no reason to suggest he was forced out for any reason. Perhaps its just time


We also speculated that the $20 million that a former salesman was awarded in a wrongful termination lawsuit and/or the suspensions mess that is still going on, might have been responsible for his early retirement. Lets face it, the suspensions wont cost wyndham any money and 20 million is just 1% of 2 billion.. That cant be the reasonn Franz is leaving (at least I dont think so

But heres something else that could be the answer.


someone asked a question in that earnings call about how the search for Hannings replacement was going and heres the answer (the underlining is mine)


Joseph R. Greff - JPMorgan Securities LLC

Steve, with respect to filling Franz's spot in Vacation Ownership, can you talk about the progress in that search, and then maybe focusing on that search. How important is the new person having public company or public company timeshare experience?

Stephen P. Holmes - Wyndham Worldwide Corp.

And the second part of the question is a interesting way of asking the same question you asked last quarter about the spin, I guess; very, very clever way of doing it. The answer is, it's important that somebody has public company experience, I'm not saying that we're looking for someone necessarily who's been a public company CEO. But certainly as the board has directed me, we want to keep our optionality open. So we want to be able to bring somebody in who is capable of leading an organization, if that's what the board chooses to do. But that's again, not making any more statement than I made last time about how the board is looking at all of its options and will continue to do so

for context heres the question and answer from the 3rd quarter call


Joseph Greff

All right. Then my final follow-up here, and I believe I've asked this before in the past both on conference calls even probably related to you, Steve, given the size of your company now versus when it's [indiscernible], why not here today or sometime today think about spinning out into two or three companies? The evaluation that it's hard for you to grow through inorganic means and M&A and spinning out might allow you to do that, how do you think about those things right due to more real world economic cycle? And that's it for me.

Stephen Holmes

Okay. Well just to show that I'm consistent, Joe I will give you the same answer I gave to when we were speaking privately. It's something that we constantly look at. The board is very active at looking at different opportunities and that is something that we have talked about before and we will probably talk about in the future, but if we had anything to announce, we would announce it today. We are constantly looking for ways to drive more shareholder value and more than that I can't say because the board has to deliberate and we have to all decide what the right thing is for the company



What the guy from JP Morgan was asking is this. Are you looking for a replacement for Hanning that has experience running a stand alone public timeshare company... so that if you spin off the timeshare division, you will have the right guy running it. And the answer, as I read it, was yes, thats exactly what the board has instructed me to do..

so heres my speculation Franz is just a good old boy from Pascagoula Mississippi. (ever wonder why we have a
Margaritaville Vacation Club? Jimmy Buffet is from the same town) who took the timeshare division from a few Fairfield Resorts when he started to a 2 billion dollar company today,, Good job; but to take it public they need someone with experience running a public company

Anyway food for thought.

Or, maybe since he apparently hit the earlier retirement age, he just did not want to take the reduction is SSA monies associated with make to much money.
 

ecwinch

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Haven't most of the other hotel companies spun off their timeshare divisions (Marriott, Starwood, etc).
 

theo

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Brian, did you post a link on the DRI CEO? If so, I can do a search for it because that would be an interesting read also.

I you're interested, over on RedWeek.com Jeff Weir has written and posted several articles about the "DRI Chronicles". You can (no RW membership required) access the articles via "From the RedWeek Blog" link found toward the bottom of RedWeek's home page. RedWeek discussion forums are lame beyond belief or comprehension, but Jeff Weir is a great writer and a real asset as RW's "chief correspondent".

I have no interest in DRI, but always enjoy reading Weir's articles on assorted timeshare industry foibles. He collects and assembles accurate and complete facts, understands the inner workings of the industry very well, is a timeshare owner himself --- and pulls no punches in his excellent writing. Definitely worth checking out. I'm not Jeff Weir, nor am I his agent or his promoter; I just enjoy his writing ;).
 
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ronparise

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Cendant the didn't spin off their timeshare division. Cendant broke up Nothing was left and cendant ceased to exist

The Wyndham part that resulted from the cendant break up was the Wyndham worldwide we see today (hotels exchanges and timeshare)

What I am speculating here is a breakup of, or spin off from Wyndham worldwide And the creation of a stand alone timeshare company. That's different that cendant's breakup
 
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bnoble

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so heres my speculation Franz is just a good old boy from Pascagoula Mississippi. (ever wonder why we have a
Margaritaville Vacation Club? Jimmy Buffet is from the same town) who took the timeshare division from a few Fairfield Resorts when he started to a 2 billion dollar company today,, Good job; but to take it public they need someone with experience running a public company
But, if that's the goal, why not do this in a more reasonable succession plan, keeping Hanning on until you find the right guy? I suppose that was the plan, and Hanning said "Let me do the spin out or I quit right now," and his resignation was regretfully accepted. But, that's an awfully thin skin for someone who made their bones selling timeshares.
 

ronparise

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But, if that's the goal, why not do this in a more reasonable succession plan, keeping Hanning on until you find the right guy? I suppose that was the plan, and Hanning said "Let me do the spin out or I quit right now," and his resignation was regretfully accepted. But, that's an awfully thin skin for someone who made their bones selling timeshares.
Or they have a buyer subject to a new CEO on board (perhaps one of their own choosing)
 

Ty1on

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Wyndham has historically been the buyer, not the buyee. Anything could happen, though.

I would think that if this were a leadership alignment tied with a tender offer, the acquiring corporation's person would be in place by now. Also, the acquisitions I've followed have gone: Announcement, then completion, then leadership transition.

I really think this sudden retirement had to do with a business direction that wasn't working. I doubt it is the points fiasco.
 

ecwinch

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I guess it is possible that WVO is being taken private. Top of the market is an unlikely time for private equity to step in however. Their model is more a leveraged buyout, then shortly afterward refinance to pay themselves a special dividend. Paying top dollar for the asset makes that more difficult.
 

lcml11

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... "What I am speculating here is a breakup of, or spin off from Wyndham worldwide And the creation of a stand alone timeshare company. That's different that cendant's breakup"

Difference noted.
 

Iggyearl

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The Patricia Williams whistle-blower announcement ($20 Mil) was made late on 11/17/16. The Hanning separation announcement was made on 11/28/16. His employment agreement called for 2 years base pay ($794K/yr.) as a settlement if he wasn't terminated for cause - which he wasn't. Some may have not noticed, but his resignation calls for him to assist in a transition until his final date of 3/1/2017. Whether he is there now, who knows.

Of note is the fact that there were originally 5 sales people who sued Wyndham in California. Four of the original plaintiffs settled out of court. It was only Ms. Williams' fortitude and tenacity that got her through 4 years of litigation. I would fashion that this case and the negative press it got Wyndham (as well as the money) is what lead to Mr. Hanning's departure. For comparison, I would direct you to the following article which was written and published less than a month before he departed.

http://resorttrades.com/the-remarkable-franz-hanning-rrp/ I don't think Mr. Hanning was filing retirement papers when this was written.
 

Don40

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Being a timeshare sales person, if his lips were moving we know there are lies forth coming. I have more respect for him now than before for growing the company.
 

CO skier

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Being a timeshare sales person, if his lips were moving we know there are lies forth coming. I have more respect for him now than before for growing the company.
He was the ultimate sales weasel. He made a lucrative career out of it. How can anyone have any respect for him?
 
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