There has to be a time period in there where Wyndham is holding the inventory with intent to sell it. As far as I've ever read, it isn't like it belongs to the Dr. until Mr. & Mrs. McSucker buy it from a salesmen, and then the deed is conferred from Dr. to the McSuckers.
I'd presume that the rentals are being offered based on forecasted transfers of unit blocks from builder to Wyndham.
I would also guess that Wyndham would also forecast availability needs for new purchasers and leave availability for those needs. Their attention at this point would be new Clearwater UDI owners being able to get the reservations they want, not particularly CWP at large.
Perhaps they take one condo at a time or a block of condos at a time but I'm confident they don't own anything for long
The "just in time" approach is an outgrowth of WAAM
The whole WAAM thing interests me a lot. I find it fascinating that a company can make money with little or no at risk capital.
Heres a short summary that was given in the 2nd quarter 2013 earnings call. The speaker here is Stephen P. Holmes - Chairman, Chief Executive Officer and Chairman of Executive Committee
Note that in the original WAAM Wyndham acted as sales agent for the owners of the property
"In addition, we've completely revolutionized the timeshare industry by introducing a fee-for-service model, which results in even better cash flow and returns. We introduced the Wyndham Asset Affiliation Model, also known as WAAM, in the spring of 2009. Our first iteration, WAAM 1.0, is a pure asset-light fee-for-service model, where Wyndham Vacation Ownership uses its sales and marketing platform and expertise to sell completed inventory for third-party developers.
WAAM 1.0 has great returns, but there's a trade-off. Since we don't finance the consumer purchases, we give up EBITDA and growth. To address this issue, we introduced WAAM 2.0. In WAAM 2.0, Wyndham Vacation Ownership purchases completed inventory from a developer on a just-in-time basis, allowing us to finance the sale and capture the attractive consumer finance spread. In addition, it significantly collapses the time the asset is on our balance sheet, improving overall cash flow and returns compared with our traditional model. With WAAM 3.0, as with 2.0, we purchase the inventory on a just-in-time basis and we finance the consumer purchases. But in this case, we are working with a financial partner to make strategic investments for our future use.
This inventory is built to our specifications. It could either be ground-up development or using inventory from our balance sheet. In our first WAAM 3.0 transaction, our financial partner for this deal, Guggenheim, purchased from us land and work-in-process in Las Vegas for $87 million in cash and in note. They will finish the development and deliver it to us on a just-in-time basis.
We have approximately $180 million of land and work in process remaining on our balance sheet after the Las Vegas transaction, most of which is suitable for WAAM 3.0. In addition, we are already in discussions on ground-up development opportunities utilizing the WAAM 3.0 model. As we said on the last call, we believe that the majority of our timeshare sales within the next 3 to 5 years could be in an asset-light form, significantly improving the cash flow and returns from the business, a primary strategic focus of Wyndham Vacation Ownership and Wyndham Worldwide overall."
