# WYND costs



## Railman83 (May 4, 2020)

I’ve seen multiple posts about WYND stock as an investment.    I’m thinking they just got a $325M loan line to carry thru the short term and if a pinch comes, they have a dividend to cut.

What I wonder is how much costs are borne by owners vs. Wyndham?   The management and maintenance for resorts all seem covered from owner mf, including, one presumes some reserve for owner delinquency.    It therefore seems they will take a lower hit than a comparable hotel chain who pays all costs out of revenue.

I get that if owners bail they have a problem, but I suspect wit CWS and Ovations and other programs they have inoculated themselves a bit more than during the last recession.

Thoughts?


----------



## Eric B (May 4, 2020)

Don't forget that WYND also has RCI, The Registry Collection, AFVC, DAE, etc., as revenue sources that are likely taking a hit right now due to the reduction in exchanges being consummated.  In addition, their sales and extra holidays rental revenue streams must be lower.  While owners still pay MFs, the majority of those go to HOAs to cover costs; WYND gets some of that where they are providing the management and they also get the program fees.  I'm not sure I could estimate which would come out better in this type of situation.


----------



## dgalati (May 4, 2020)

Railman83 said:


> I’ve seen multiple posts about WYND stock as an investment.    I’m thinking they just got a $325M loan line to carry thru the short term and if a pinch comes, they have a dividend to cut.
> 
> What I wonder is how much costs are borne by owners vs. Wyndham?   The management and maintenance for resorts all seem covered from owner mf, including, one presumes some reserve for owner delinquency.    It therefore seems they will take a lower hit than a comparable hotel chain who pays all costs out of revenue.
> 
> ...


 A divi cut is very possible and is a great way to hold on to cash if needed. I would be suprised if Wyndham continues Ovations. Why take on the additional expense of maintenance fees if they have no sales for the Ovations inventory?


----------



## Railman83 (May 4, 2020)

dgalati said:


> A divi cut is very possible and is a great way to hold on to cash if needed. I would be suprised if Wyndham continues Ovations. Why take on the additional expense of maintenance fees if they have no sales for the Ovations inventory?


If you are going to take it back anyway in foreclosure it would be cheaper to deed back


----------



## dgalati (May 4, 2020)

Railman83 said:


> If you are going to take it back anyway in foreclosure it would be cheaper to deed back


If loan is paid in full Wyndham cares less if maintenance fees are current unless you are booking a reservation or selling. The HOA's have to foreclose on owners that are delinquent on maintenance fees.  This adds to higher Maintenance fees for all the other owners because the value of a timeshare is usually Less then the cost of a cup of coffee. If Wyndham doesn't have  enough sales to support additional Ovations inventory they will stop taking back. Especially if cash flow is tight. Why would they add the extra expense of maintenance fees on inventory that cant be sold?


----------



## Fredflintstone (May 4, 2020)

I do see short term pain with the entire travel industry. As for WYND, there may be a dividend cut but in the long haul, they will do well. Why? They have 875 k plus owners that will be itching to spend money once things stabilize. Even during this down turn, the fees are still flowing in.

What folks forget was there were more millionaires created in the Great Depression because as people ran for the hills, those who bought up cheap were well rewarded later on.

There are debates on whether we will see hyperinflation or deflation. My guess is inflation and in inflation gold and real estate fair the best. In deflation, the opposite is true.

All I know is when this is over the timeshare companies will fair the best BECAUSE they have a herd of owners having to fork out. Yes, some will be lost but overall the rest will remain paying all day long.

I know their arm businesses like RCI are still raking it in in fees. It’s a huge profit business. 

I can’t say the same for Cruise industries as they don’t have locked in owners. It’s going to be a tough road for them going forward. Airlines ditto. Most will recover but at a much longer period of time then timeshare companies with their locked in owner/payers.


Sent from my iPad using Tapatalk


----------



## Fredflintstone (May 4, 2020)

I should say my current strategy is I have an on stop buy at 15. I bought the majority of my position (14 k) at 15 on March 23.

Yes, I have lost on the 6k balance. I paid between 39.75 to 27 with those. However, I am still a bit ahead at 24 current price.

I am a long term holder. I still think they are going to do great in a couple of years.


Sent from my iPad using Tapatalk


----------



## HitchHiker71 (May 5, 2020)

The current COVID-19 scenario is something that is incomparable to anything else in Wyndham's history.  If this drags on and we see spikes and reinfections that further limit travel over the longer term - meaning many months into the future - which is a real possibility - I predict Wyndham will enter Chapter 11 bankruptcy by the end of the calendar year 2020.  Why? Let's look at Wyndham's numbers from last year:





So Wyndham made 507MM on revenues of 4.043BB, with expenses of 3.299B.  How does Wyndham's revenues break down?  46% VOI (Vacation Ownership Interests - developer sales), 40% fee based revenues (MFs, Program Fees, RCI booking fees, etc.).  14% from "other" revenue sources.  So the majority of revenues are sourced from sales, which has tanked completely as we all know.  However, their expenses have not tanked.  Expenses net a cash burn of 3.3B/12 = 275MM per month.  Let's assume for a moment that Wyndham can reduce their cash burn by 30% - which is quite aggressive in reality - that puts 275MM*0.7=~193MM per month.  Let's round it up to 200MM/month for ease of analysis.  At the end of 2019, Wyndham total cash and cash equivalents of 355MM on hand.  In March, Wyndham drew down on a 1B credit facility, and they just secured additional 325MM at 85% draw - or 276.25MM.  At the end of Q1 2020 - Wyndham stated, after drawing down on their 1B credit line, they had "a little over 1B in cash and cash equivalents on hand."  That means they burned through whatever revenues they pulled in Q1 2020 - plus the majority of the 355MM they had on hand at year end - which makes sense as they would have burned through 275MMx3=825MM in Q1 2020.  Let's assume they started paring back operations in March in a big way - so their burn would probably decrease to 750MM during Q1 2020.  Point being, they have about 1.2BB in cash and cash equivalents including the credit facility drawdown and the 325MM securitized facility.  At a 200MM/month burn rate - with no sales revenues to speak of, that gives them six months maximum before their coffers run dry.  Even if we assume partial normalcy - a new normal - that's not going to be anywhere close to the old normal any time soon - and I don't see anyone buying luxury items in the foreseeable future with unemployment close to 20% realistically - and GDP taking a 4.8% hit in Q1 2020 - with a worse number expected for Q2 2020.  Wyndham is in trouble IMHO, along with every other debt laden organization out there with notable declining revenue to support the debt:


----------



## Eric B (May 5, 2020)

HitchHiker71 said:


> The current COVID-19 scenario is something that is incomparable to anything else in Wyndham's history.  If this drags on and we see spikes and reinfections that further limit travel over the longer term - meaning many months into the future - which is a real possibility - I predict Wyndham will enter Chapter 11 bankruptcy by the end of the calendar year 2020.  Why? Let's look at Wyndham's numbers from last year:
> 
> View attachment 20190
> 
> ...



Kind of nice seeing some actually data to supplement the speculation.  It makes me wonder how the constituent parts would do on their own if separated from sales.  That is, would Club Wyndham, WorldMark, and RCI be able to continue operating without or separate from the sales that drives Wyndham Vacations profits?  I get that it would likely eliminate the VIP benefits I get, but most of my ownership in Club Wyndham is at Bali Hai, which is about a third of the cost of CWA, so I can live without them and I don't use Club Pass anyway.  What I have in WorldMark is all resale, so the loss of TravelShare would have no effect, and I wouldn't use Club Pass there, either.  I'd miss having the opportunity to chat with some representatives for a few hours and get free coffee, a few pastries and some gift cards, but think I could put up with that in the end.


----------



## HitchHiker71 (May 5, 2020)

Eric B said:


> Kind of nice seeing some actually data to supplement the speculation.  It makes me wonder how the constituent parts would do on their own if separated from sales.  That is, would Club Wyndham, WorldMark, and RCI be able to continue operating without or separate from the sales that drives Wyndham Vacations profits?  I get that it would likely eliminate the VIP benefits I get, but most of my ownership in Club Wyndham is at Bali Hai, which is about a third of the cost of CWA, so I can live without them and I don't use Club Pass anyway.  What I have in WorldMark is all resale, so the loss of TravelShare would have no effect, and I wouldn't use Club Pass there, either.  I'd miss having the opportunity to chat with some representatives for a few hours and get free coffee, a few pastries and some gift cards, but think I could put up with that in the end.



I wonder aloud if this "new normal" may net a restructuring of Wyndham Destinations altogether.  Along the lines of operations vs sales and marketing entity separation.  The operations division (Owner Care, Finance, IT, etc.) pretty much supports itself via the MFs and underlying HOAs along with the Program Fees (which includes the cost of the VIP program to the best of my understanding).   The sales and marketing division covers a mix of continued developer investments along with self-preservation of the division itself (commissions, salaries, etc.).  If the sales aspects of timesharing are going to be effectively dead for the foreseeable future - then they will need to re-think their entire approach.  This whole COVID-19 scenario could easily end up being the change catalyst that results in major changes to timeshare sales and marketing.  Only time will tell.


----------



## Richelle (May 5, 2020)

HitchHiker71 said:


> I wonder aloud if this "new normal" may net a restructuring of Wyndham Destinations altogether.  Along the lines of operations vs sales and marketing entity separation.  The operations division (Owner Care, Finance, IT, etc.) pretty much supports itself via the MFs and underlying HOAs along with the Program Fees (which includes the cost of the VIP program to the best of my understanding).   The sales and marketing division covers a mix of continued developer investments along with self-preservation of the division itself (commissions, salaries, etc.).  If the sales aspects of timesharing are going to be effectively dead for the foreseeable future - then they will need to re-think their entire approach.  This whole COVID-19 scenario could easily end up being the change catalyst that results in major changes to timeshare sales and marketing.  Only time will tell.



I've always felt they should allow existing owners to buy more points online.  They should sell the Discovery packages online for new potential owners.  But that would mess with their sales model and salespeople wouldn't get their commissions.  I do hope all this does make a difference and change the way they do business.   I don't see them having many sales presentations.  I could see them pushing the surveys more, so they can sell from the comfort of the owner's room.  They also would not have to worry as much about social distancing 25 people in one room.  They do need another venue to sell points, at least in the short term.  Online sales may be one option.


----------



## dgalati (May 5, 2020)

@raygo123  I guess the HGVC purchase will not happen now?


----------



## dgalati (May 5, 2020)

Richelle said:


> I've always felt they should allow existing owners to buy more points online.  They should sell the Discovery packages online for new potential owners.  But that would mess with their sales model and salespeople wouldn't get their commissions.  I do hope all this does make a difference and change the way they do business.   I don't see them having many sales presentations.  I could see them pushing the surveys more, so they can sell from the comfort of the owner's room.  They also would not have to worry as much about social distancing 25 people in one room.  They do need another venue to sell points, at least in the short term.  Online sales may be one option.


Who cares about the sales weasels getting a commission? Wyndham will have to change their sales model if they want to survive.  Same as car dealers not willing to or embracing change. On line sales is the future. If new car dealers and Wyndham don't change their business model it will cost them in near future.


----------



## cbyrne1174 (May 5, 2020)

They also need to change their type of ownership. Not everyone wants a deed or a trust. They should sell memberships as right to use in increments of 5 years and make it cheaper per year the longer the person signs. They should also keep a VIP model for how many points you buy rights to.


----------



## Richelle (May 5, 2020)

dgalati said:


> Who cares about the sales weasels getting a commission? Wyndham will have to change their sales model if they want to survive.  Same as car dealers not willimg to embracing change will cost them in near future.



I personally don't care about their commission, and I don't think many here would care either.  Wyndham cares though.  Or at least they did before all this. I was once told that 93% of their points sales come from resorts, so they are very protective of that area.  I was told this because I was one of 100 people that told the owner to rescind.  After talking to them for a while, they asked for a telesales referral.  I gave them one.  They were not happy when they found out I told him to rescind and then sent him to telesales.  They didn't care that I was only one of a hundred voices.  You would think they would be happy they at least salvaged the sale.  There were 100 other people telling them to run away or buy resale.  But nope, they did not care.  After that, there was a rule put out that if a telesales rep finds out an owner is in their rescission period or currently at a resort, they were not allowed to even speak with them until they left the resort or the rescission period is over.  Telesales is not as well protected, but I think things will change for them, at least in the short term, since they will be one of their few sources of revenue at the moment.  

What I would love to see is piggyback deeds come up for sale without the requirement to buy points at regular cost.  if it counted towards VIP, they would sell out fast.  It would be a quick way to unload deeds currently in default.


----------



## Richelle (May 5, 2020)

cbyrne1174 said:


> They also need to change their type of ownership. Not everyone wants a deed or a trust. They should sell memberships as right to use in increments of 5 years and make it cheaper per year the longer the person signs. They should also keep a VIP model for how many points you buy rights to.


That was one of the things they said they were working on at the Austin meeting.  In my opinion, it would have to be a stripped-down version like Discovery.  Otherwise, owners who made the commitment to become full-fledged owners will ask why they should keep their ownership when they can have a commitment-free option that is exactly the same as owning.


----------



## cbyrne1174 (May 5, 2020)

Not if a deed is cheaper in the long run. They could set the break even point to 20 to 25 years.


----------



## OutSkiing (May 5, 2020)

HitchHiker71 said:


> The current COVID-19 scenario is something that is incomparable to anything else in Wyndham's history.  If this drags on and we see spikes and reinfections that further limit travel over the longer term - meaning many months into the future - which is a real possibility - I predict Wyndham will enter Chapter 11 bankruptcy by the end of the calendar year 2020.  Why? Let's look at Wyndham's numbers from last year:
> 
> View attachment 20190
> 
> ...


I wonder where sales commissions and the cost of keeping the sales offices going come into the p&l? The marketing line?  I always thought sales expense was over half of the cost of developer purchased  recycled inventory. I am sure commissions have hit $0 which would save on expenses.  
Not that I’ve felt Wyndham stock was a big performer. I guess I’ve overlooked dividends.

Bob


----------



## Richelle (May 5, 2020)

cbyrne1174 said:


> Not if a deed is cheaper in the long run. They could set the break even point to 20 to 25 years.



Many don’t care about the long term. They are looking at what it is now. Someone who paid a membership fee to get something I spent $20,000 for. If they limit it like they do Discovery, it would keep owners happy, and give the sales people another way to see the product. “If you pay $20,000, you’ll never have to pay a membership fee every again AND you’ll get access to even more resorts”. They will conveniently leave out the part about the monthly maintenance fees.


----------



## cbyrne1174 (May 5, 2020)

I'm just suggesting that they offer multiple ways of ownership. DVC is a right to use system where it expires after 50 years. I like the idea of having an expiration date on being a member.


----------



## Richelle (May 6, 2020)

cbyrne1174 said:


> I'm just suggesting that they offer multiple ways of ownership. DVC is a right to use system where it expires after 50 years. I like the idea of having an expiration date on being a member.



Can I ask why you l.ike the expiration date?


----------



## cbyrne1174 (May 6, 2020)

To release me from liability when I'm too old to travel. In 50 years, I'll be 80 years old.


----------



## HitchHiker71 (May 6, 2020)

Eric B said:


> Kind of nice seeing some actually data to supplement the speculation.  It makes me wonder how the constituent parts would do on their own if separated from sales.  That is, would Club Wyndham, WorldMark, and RCI be able to continue operating without or separate from the sales that drives Wyndham Vacations profits?  I get that it would likely eliminate the VIP benefits I get, but most of my ownership in Club Wyndham is at Bali Hai, which is about a third of the cost of CWA, so I can live without them and I don't use Club Pass anyway.  What I have in WorldMark is all resale, so the loss of TravelShare would have no effect, and I wouldn't use Club Pass there, either.  I'd miss having the opportunity to chat with some representatives for a few hours and get free coffee, a few pastries and some gift cards, but think I could put up with that in the end.



Today Wyndham released their Q1 2020 results, here's a link to the full press release:



			https://s22.q4cdn.com/457996430/files/doc_financials/2020/q1/WYND-1Q-2020-Earnings-Release.pdf
		


Here's the bullet points from the release:

• Net VOI sales of $90 million; gross VOI sales of $413 million(1)
• Diluted loss per share from continuing operations of $1.54 (adjusted diluted loss per share of $0.98)
• Net loss from continuing operations of $134 million and negative adjusted EBITDA of $44 million
• In anticipation of increased defaults due to the impact of COVID-19, a $225 million provision charge impacted revenue, resulting in a $170 million negative impact to adjusted EBITDA
• Completed a $325 million private securitization in April
• Net cash provided by operating activities from continuing operations of $57 million (negative adjusted free cash flow of $78 million)
• Expect net cash provided by operating activities from continuing operations and adjusted free cash flow to be positive in the first half of 2020
• Cash and cash equivalents of $1.0 billion at the end of March
• The Company's Board of Directors reaffirmed its dividend policy and intends to declare the second quarter cash dividend of $0.50 per share in mid-May   

So what can we glean from the numbers?  Their cash position deteriorated by 78 million during Q1 2020.  Cash is king during downturns like this - so don't pay much attention to the net losses and so forth since those are all GAAP based calculations.  At the end of March, they had $1B in cash and cash equivalents.  Here's the commentary on their cash balances:



> Cash Flow— For the three months ended March 31, 2020, net cash provided by operating activities from continuing operations was $57 million, compared to $152 million in the prior year period. Negative adjusted free cash flow from continuing operations was $78 million for the three months ended March 31,2020, compared to positive adjusted free cash flow from continuing operations of $249 million in the same period of 2019. The Company is pursuing actions to further improve liquidity by reducing annual capital expenditures and inventory spending, which have been reduced by approximately $100 million for 2020. Additionally, the Company is reducing operating expenses, which is expected to result in incremental savings of approximately $205 million annually.



Here's the chart version:





It's difficult to decipher the financials embedded in their statements and the GAAP methods of reporting leave gaps where it's harder to figure out the actual cash burn of a company.  The above listed chart is scoped only to a subset of "operating activities" and is not truly representative of the cash burn.  On the surface it looks like they're only burned 78MM net negative cash flow for all of Q1 2020 - but that's not really the case.  We know Wyndham had 355MM in cash and cash equivalents at year end 2019, and we also know that Wyndham only had 1B in cash and cash equivalents on hand as of the end of March - and that _includes _the 1B drawdown on their credit line. This means that Wyndham burned through at least 355MM in cash on hand between end of year and end of March, plus whatever actual cash they brought in during Q1 2020. I would estimate a cash burn of 150MM/month based upon the new data. So the numbers I originally provided get a bit better since my initial cash burn assumption was 200MM/month. With roughly 1.3B on hand - that gives them about 8.5 months - assuming revenue stays neutral which is unlikely. Since the lockdown didn't really negatively impact Wyndham until March 2020, I think Q2 2020 will actually deliver worse financial results than Q1 2020 did. Q2 2020 results will tell the tale. Hopefully by then we're seeing some real economic recovery - but I think there's still a lot of uncertainty surrounding any substantive economic recovery in the short term especially in the hospitality sectors.


----------



## needhelp (May 14, 2020)

Wyndham could offer a resale to developer conversion package for a limited time.


----------



## ronparise (May 14, 2020)

good stuff here

*


			https://seekingalpha.com/article/4347033-wyndham-destinations-after-earnings-stock-be-heading-for-zero?utm_medium=email&utm_source=seeking_alpha&mail_subject=wynd-wyndham-destinations-after-earnings-the-stock-could-be-heading-for-zero&utm_campaign=rta-stock-article&utm_content=link-0
		

*


----------



## HitchHiker71 (May 14, 2020)

needhelp said:


> Wyndham could offer a resale to developer conversion package for a limited time.



Interesting idea - how do you see this working?


----------



## Richelle (May 14, 2020)

HitchHiker71 said:


> Interesting idea - how do you see this working?



I would assume they would take away the resale designation from one or more resale contracts with the purchase of new points. They did that in the past I believe, but that was a long time ago. I am not sure Wyndham would go that route because it would mean someone who spent $1 on 300,000 points, can turn around an buy 105,000 points and end up with Advantage VIP status for the price of 105,000 points. It’s one thing to do it with PIC, which has been around since the Fairfield days. Its been around a long time and not a big secret. It is published in the directory many new owners do not bother to read. This would be a policy change. A policy that has been in place for many years. A policy that has given owners a reason to pay full retail if they wanted VIP. It would be like any company giving away a product or service people spent a lot of money for. It’s possible they would do it if they were REALLY hurting. They would do a lot of things to stay afloat. If they’ve gotten to the point where they have to reduce the value of their product that much, it may not be a good idea to invest anymore money because they are in serious financial trouble.


----------



## cbyrne1174 (May 14, 2020)

Why dont they just do what Marriott and Hilton have done and make the transfer fee a lot higher. Marriott charges a minimum of $4,500 to transfer the smallest point allotment you can own.


----------



## Eric B (May 14, 2020)

cbyrne1174 said:


> Why dont they just do what Marriott and Hilton have done and make the transfer fee a lot higher. Marriott charges a minimum of $4,500 to transfer the smallest point allotment you can own.



Interesting idea, but there might be contractual issues with it.  I'd have to go back and look over my contracts to see if they specify the transfer fees - that's included on some of my other TS.  Raising the transfer fee from $299 to something like $4,500 would probably result in quite an uproar from current owners that sell their contracts, though it's probably a small percentage based on some earlier threads.  Raising barriers to resales might result in increased defaults on MFs and get them over the coals with the HOAs, too.


----------



## cbyrne1174 (May 14, 2020)

Eric B said:


> Interesting idea, but there might be contractual issues with it.  I'd have to go back and look over my contracts to see if they specify the transfer fees - that's included on some of my other TS.  Raising the transfer fee from $299 to something like $4,500 would probably result in quite an uproar from current owners that sell their contracts, though it's probably a small percentage based on some earlier threads.  Raising barriers to resales might result in increased defaults on MFs and get them over the coals with the HOAs, too.




Is that why Marriott MF are so much higher? I thought they just put more $$ in their units and resorts.


----------



## Eric B (May 14, 2020)

No idea - I don't own any Marriott, primarily because the MF are so much higher.


----------



## paxsarah (May 14, 2020)

Eric B said:


> Interesting idea, but there might be contractual issues with it.  I'd have to go back and look over my contracts to see if they specify the transfer fees - that's included on some of my other TS.  Raising the transfer fee from $299 to something like $4,500 would probably result in quite an uproar from current owners that sell their contracts, though it's probably a small percentage based on some earlier threads.  Raising barriers to resales might result in increased defaults on MFs and get them over the coals with the HOAs, too.



I'd be surprised if it's contractual, because they raised it from $99 to $299 around 9 years ago without issue. If there was some sort of contractually specified transfer fee, it would have come up at that point.


----------



## dgalati (May 14, 2020)

Eric B said:


> Interesting idea, but there might be contractual issues with it.  I'd have to go back and look over my contracts to see if they specify the transfer fees - that's included on some of my other TS.  Raising the transfer fee from $299 to something like $4,500 would probably result in quite an uproar from current owners that sell their contracts, though it's probably a small percentage based on some earlier threads.  Raising barriers to resales might result in increased defaults on MFs and get them over the coals with the HOAs, too.


Why would anyone pay a $4500 transfer fee for a resale ownership that is worth less then $100. It would be easier to walk away and use non-judicial  anti-deficiency laws. These laws were intended to protect timeshare consumers from a high transfer fee like this. Wyndham also counts on resale buyers to pay maintenance fees. A higher transfer fee would create a problem for HOA's WHEN OWNERS WALK AWAY AND STOP PAYING MAINTENANCE FEES.


----------



## dgalati (May 14, 2020)

paxsarah said:


> I'd be surprised if it's contractual, because they raised it from $99 to $299 around 9 years ago without issue. If there was some sort of contractually specified transfer fee, it would have come up at that point.


I personally feel the $299 transfer fee is to high. A $4500 transfer fee would be equal to the beating the Transfer companies are giving the owners. It would also help Ovations take back more free deeds.


----------



## cbyrne1174 (May 14, 2020)

dgalati said:


> Why would anyone pay a $4500 transfer fee for a resale ownership that is worth less then $100. It would be easier to walk away and use non-judicial  anti-deficiency laws. These laws were intended to protect timeshare consumers from a high transfer fee like this. Wyndham also counts on resale buyers to pay maintenance fees. A higher transfer fee would create a problem for HOA's WHEN OWNERS WALK AWAY AND STOP PAYING MAINTENANCE FEES.



Marriott doesn't have any difference between resale and developer. You can get point discounts with resale points., up to 30%. This discount is only if you own 10,000 points, which has an annual MF of $6,300. It's the MF cost that drives people away from Marriott more than the buy-in. A 2 bedroom for a week at Grande Vista (analogous to Bonnet Creek) costs around $1900 a week in their "prime season" using points. It's $1486 using a deed and not paying exchange fees. A 2 bedroom at Bonnet Creek in the prime season costs $1545 using CWA points.

I don't know exactly why their MF are so high compared to Wyndham. It could be subsidizing defaults or high maintenance costs. They also don't charge reservation transactions, housekeeping credits or guest certificates to help offset MF costs. If I were to ever buy DC trust points, it would be for the sole purpose of short stays because of not having to worry about housekeeping. Lakeshore reserve is the best Orlando timeshare property in all systems including DVC in my opinion. The theming is beautiful and you have access to JW and Ritz-Carleton amenities.

I'm just saying if Wyndham needed to change the resale rules to stay afloat, they should charge a per point "validation" fee and allow current resale owners the ability to book Club Pass and make any new owners pay it as well. They could give non VIP benefits to "validated" resale points. I don't think they should let resale points count towards VIP, but I don't think they'll step on too many toes of VIP members to let resale owners use Club Pass. It's not like we can't just buy WM resale to bypass the block. I would still probably just buy a small WM account anyways just because renting points from other owners is really easy using WMowners.com, but if they changed the rules about renting actual points from other owners, I would probably eventually spend the couple grand to have full access to WM with a CW membership just because it's easier to keep track of just 1 membership and all the rules vs 2 memberships. WM is nothing like CW and it takes a lot of reading and researching to understand how to efficiently be a member of both clubs. 

WM has a completely different system with how to calculate MF. It's calculated based on how much you own in intervals of 2,500 credits. So when you are buying credits, 8,000 credits have the same MF as 10,000 credits, so you have to be really careful the amount that you buy. Cleaning every unit size costs exactly 1 housekeeping token and you only get 1 token per 10,000 credits you own. The cash cost to clean each size does vary though. I know it's $66 for studios and $87 for one bedrooms, but I don't have any other numbers memorized. So if you stay 2 nights in a 3 bedroom or 2 nights in a studio both cost 1 token, but it's about $100 more in cash to clean the 3 bedroom. I think a lot of resale only owners would fork over some money to have access to Club Pass for convenience over being a member of 2 clubs and having to learn all of their differences.


----------



## cbyrne1174 (May 14, 2020)

dgalati said:


> Why would anyone pay a $4500 transfer fee for a resale ownership that is worth less then $100. It would be easier to walk away and use non-judicial  anti-deficiency laws. These laws were intended to protect timeshare consumers from a high transfer fee like this. Wyndham also counts on resale buyers to pay maintenance fees. A higher transfer fee would create a problem for HOA's WHEN OWNERS WALK AWAY AND STOP PAYING MAINTENANCE FEES.



I'm pretty sure resale owners can "walk away" anyways with resale only memberships. Wyndham doesn't have our SSN on hand to easily ding our credit.


----------



## Richelle (May 14, 2020)

cbyrne1174 said:


> I'm pretty sure resale owners can "walk away" anyways with resale only memberships. Wyndham doesn't have our SSN on hand to easily ding our credit.



I'm not sure about CWA, but with Wyndham select, there is a deed involved.  If the member doesn't pay maintenance fees, it gets foreclosed on.  Even if the member doesn't have a loan, defaulting on maintenance fees can result in foreclosure.  It's called an HOA foreclosure.  They can put the foreclosure on your credit if they choose to do so.  They don't need your SSN to ding your credit with a foreclosure.  A foreclosure is a legal process and can get added to your credit report.  None of my doctor's offices have my SSN, but I forgot to pay an x-ray bill and five years later it showed up on my credit report.  Thankfully, paying it off got it removed, but it would have been my fault if it didn't.  It sounds like it's sporadic with timeshares and not everyone gets a dinged.  Maybe it varies by resort.  Maybe the people who didn't get a ding were defaulting on a timeshare that wasn't Wyndham.  It's hard to say, but I wouldn't take the chance.  Not when there is Ovation.  If they have a loan, they CAN ding your credit for both missed payments and foreclosure.  Whether they do it or not can be a crapshoot.


----------



## cbyrne1174 (May 14, 2020)

Richelle said:


> I'm not sure about CWA, but with Wyndham select, there is a deed involved.  If the member doesn't pay maintenance fees, it gets foreclosed on.  Even if the member doesn't have a loan, defaulting on maintenance fees can result in foreclosure.  It's called an HOA foreclosure.  They can put the foreclosure on your credit if they choose to do so.  They don't need your SSN to ding your credit with a foreclosure.  A foreclosure is a legal process and can get added to your credit report.  None of my doctor's offices have my SSN, but I forgot to pay an x-ray bill and five years later it showed up on my credit report.  Thankfully, paying it off got it removed, but it would have been my fault if it didn't.  It sounds like it's sporadic with timeshares and not everyone gets a dinged.  Maybe it varies by resort.  Maybe the people who didn't get a ding were defaulting on a timeshare that wasn't Wyndham.  It's hard to say, but I wouldn't take the chance.  Not when there is Ovation.  If they have a loan, they CAN ding your credit for both missed payments and foreclosure.  Whether they do it or not can be a crapshoot.



Don't doctors offices have access to that info with your insurance provider?


----------



## Richelle (May 14, 2020)

cbyrne1174 said:


> Don't doctors offices have access to that info with your insurance provider?



Nope.  Insurance providers do not provide doctors office with SSN.


----------



## needhelp (May 18, 2020)

Richelle said:


> If they’ve gotten to the point where they have to reduce the value of their product that much, it may not be a good idea to invest anymore money because they are in serious financial trouble.


The resale package should not be done as a last ditch effort, but soon after re-opening for a very limited time.  Alot of people are expecting travel to be heavily discounted once travel resumes. So post-pandemic deals would not be warning sign to investors.
I do not follow the WYND financials like many on the site, so I have not idea what the break-even would be to make this profitable for Wyndham.


----------



## HitchHiker71 (May 18, 2020)

Richelle said:


> I would assume they would take away the resale designation from one or more resale contracts with the purchase of new points. They did that in the past I believe, but that was a long time ago. I am not sure Wyndham would go that route because it would mean someone who spent $1 on 300,000 points, can turn around an buy 105,000 points and end up with Advantage VIP status for the price of 105,000 points. It’s one thing to do it with PIC, which has been around since the Fairfield days. Its been around a long time and not a big secret. It is published in the directory many new owners do not bother to read. This would be a policy change. A policy that has been in place for many years. A policy that has given owners a reason to pay full retail if they wanted VIP. It would be like any company giving away a product or service people spent a lot of money for. It’s possible they would do it if they were REALLY hurting. They would do a lot of things to stay afloat. If they’ve gotten to the point where they have to reduce the value of their product that much, it may not be a good idea to invest anymore money because they are in serious financial trouble.



I like the idea on the surface.  If we accept the numbers that were shared with us about resale contracts were accurate, which was around 20k resale contracts (I question contracts vs accounts that hold resale contracts), then this wouldn't have a broad impact overall, so I'm not sure they would go for it as a result - but it's worth a mention.  I would certainly consider converting my 689k resale points if this option were to be offered up to me.  That would take me from Champion to Founders under the new Privileges program.  If they did this as @needhelp said - I would only offer it for a limited time - like through 12/31/2020 for example.


----------



## dgalati (May 18, 2020)

HitchHiker71 said:


> I like the idea on the surface.  If we accept the numbers that were shared with us about resale contracts were accurate, which was around 20k resale contracts (I question contracts vs accounts that hold resale contracts), then this wouldn't have a broad impact overall, so I'm not sure they would go for it as a result - but it's worth a mention.  I would certainly consider converting my 689k resale points if this option were to be offered up to me.  That would take me from Champion to Founders under the new Privileges program.  If they did this as @needhelp said - I would only offer it for a limited time - like through 12/31/2020 for example.


If they are as strapped as the finacials say I would imagine Ovations is not taking back much inventory. I will start a new thread on this to see if anyone has returned inventory the last 2 months.


----------



## dgalati (May 19, 2020)

cbyrne1174 said:


> I'm pretty sure resale owners can "walk away" anyways with resale only memberships. Wyndham doesn't have our SSN on hand to easily ding our credit.


@Grammarhero may have more info on the statistics of owners walking away and if their non payment reported or affected their credit score.


----------



## Grammarhero (May 19, 2020)

dgalati said:


> @Grammarhero may have more info on the statistics of owners walking away and if their non payment reported or affected their credit score.


Out of seven (7) Wyndham defaults as reported on TUG, two (both mortgages) got their credit affected.  The MF defaults seem to be in the clear.


----------



## dgalati (May 23, 2020)

HitchHiker71 said:


> Today Wyndham released their Q1 2020 results, here's a link to the full press release:
> 
> 
> 
> ...











						Hertz files for U.S. bankruptcy protection as car rentals evaporate in pandemic
					

With nearly $19 billion of debt and roughly 38,000 employees worldwide as of the end of 2019, Hertz is among the largest companies to be undone by the pandemic.




					www.cnbc.com


----------



## Eric B (May 23, 2020)

Hertz isn’t collecting maintenance fees from car owners whether or not they use them.


----------



## dgalati (May 23, 2020)

Eric B said:


> Hertz isn’t collecting maintenance fees from car owners whether or not they use them.


 Hertz is a car rental company not a fractional ownership. You only pay for the time you use it. Does Wyndham make any profit on HOA'S collecting for maintenance fees?


----------



## Jan M. (May 23, 2020)

dgalati said:


> Hertz is a car rental company not a fractional ownership. You only pay for the time you use it. Does Wyndham make any profit on HOA'S collecting for maintenance fees?



Wyndham does get the program fee portion of our maintenance fees. I've never seen an accounting of how often and how much Wyndham turns over to the individual resorts. I would guess that Wynhdam is able to make some interest off those monies while they are holding them.


----------



## Eric B (May 23, 2020)

dgalati said:


> Hertz is a car rental company not a fractional ownership. You only pay for the time you use it. Does Wyndham make any profit on HOA'S collecting for maintenance fees?



... so what you're saying is that the posting of a news article about Hertz declaring bankruptcy was a red herring completely off the topic for this thread?  Interesting, in a way.

On the thread's topic, Wyndham does collect some income from the management of some of the resorts for the HOAs.  I couldn't speculate how much of that is profit for the company.  They also get the program fee portion of what owners pay for use in running Club Wyndham.  Similar revenue streams exist for the other systems they run (e.g., WorldMark).


----------



## dgalati (May 23, 2020)

Eric B said:


> ... so what you're saying is that the posting of a news article about Hertz declaring bankruptcy was a red herring completely off the topic for this thread?  Interesting, in a way.





HitchHiker71 said:


> The current COVID-19 scenario is something that is incomparable to anything else in Wyndham's history.  If this drags on and we see spikes and reinfections that further limit travel over the longer term - meaning many months into the future - which is a real possibility - I predict Wyndham will enter Chapter 11 bankruptcy by the end of the calendar year 2020.  Why? Let's look at Wyndham's numbers from last year:
> 
> View attachment 20190
> 
> ...



 It was in reply to previous posts and how the pandemic has affected all the travel industry finances. As @HitchHiker71  posted  above "Wyndham is in trouble IMHO, along with every other debt laden organization out there with notable declining revenue to support the debt:"


----------



## HitchHiker71 (May 23, 2020)

Eric B said:


> ... so what you're saying is that the posting of a news article about Hertz declaring bankruptcy was a red herring completely off the topic for this thread? Interesting, in a way.
> 
> On the thread's topic, Wyndham does collect some income from the management of some of the resorts for the HOAs. I couldn't speculate how much of that is profit for the company. They also get the program fee portion of what owners pay for use in running Club Wyndham. Similar revenue streams exist for the other systems they run (e.g., WorldMark).



If anyone happens to know the gross points in play across all Wyndham resorts (CWS/CWA) this would be fairly easy to reverse engineer. Here’s two pics from the annual owners meeting along this line that I took:










What I cannot remember is what the scope of the member points owned was. CWA vs CWS for example. But as the second slide shows the revenues from program fee assessments are minimal compared to total revenues, coming in at only 91MM per annum or so (FY 12/31/2018). Given we have estimated their cash burn is 150MM/month at a minimum at present. 

If we take the first slide at face value and assume an average MF rate from CWA (what is it these days?), lets use $7/1000 for this analysis:

111B/1000*7=777MM

How much of that does Wyndham skim? Even if we assume 20% - which is probably on the high side, that’s only about $155M or one month of cash burn. Not much really. 


Sent from my iPhone using Tapatalk


----------



## sb_sparky (May 27, 2020)

ronparise said:


> good stuff here
> 
> *
> 
> ...




I would like to read this but am not able to get into the article. Are you able to copy and paste it in here please?


----------



## dgalati (May 27, 2020)

sb_sparky said:


> I would like to read this but am not able to get into the article. Are you able to copy and paste it in here please?





			https://seekingalpha.com/article/4347033-wyndham-destinations-after-earnings-stock-be-heading-for-zero?utm_medium=email&utm_source=seeking_alpha&mail_subject=wynd-wyndham-destinations-after-earnings-the-stock-could-be-heading-for-zero&utm_campaign=rta-stock-article&utm_content=link-0


----------



## folgema (May 30, 2020)

cbyrne1174 said:


> Marriott doesn't have any difference between resale and developer. You can get point discounts with resale points., up to 30%. This discount is only if you own 10,000 points, which has an annual MF of $6,300. It's the MF cost that drives people away from Marriott more than the buy-in. A 2 bedroom for a week at Grande Vista (analogous to Bonnet Creek) costs around $1900 a week in their "prime season" using points. It's $1486 using a deed and not paying exchange fees. A 2 bedroom at Bonnet Creek in the prime season costs $1545 using CWA points.
> 
> I don't know exactly why their MF are so high compared to Wyndham. It could be subsidizing defaults or high maintenance costs. They also don't charge reservation transactions, housekeeping credits or guest certificates to help offset MF costs. If I were to ever buy DC trust points, it would be for the sole purpose of short stays because of not having to worry about housekeeping. Lakeshore reserve is the best Orlando timeshare property in all systems including DVC in my opinion. The theming is beautiful and you have access to JW and Ritz-Carleton amenities.
> 
> ...


Is there a forum for advice on buying WM for a CW resale owner?  I am all resale, and don't really care about VIP.  But, I am interested in figuring out the best way to get access to WM.  Thanks!


----------



## Eric B (May 30, 2020)

There is a separate Worldmark forum that is a good starting place.  There is also a different site used by Worldmark owners:





__





						WorldMark Owners
					

Open discussion of WorldMark The Club and other timeshare topics



					www.wmowners.com


----------



## cbyrne1174 (May 30, 2020)

folgema said:


> Is there a forum for advice on buying WM for a CW resale owner?  I am all resale, and don't really care about VIP.  But, I am interested in figuring out the best way to get access to WM.  Thanks!


 
If you only need 1 reservation a year, just find a 5k account for $569/year. It comes with 1 housekeeping token a year; any extra stays, you will have to pay for a cleaning. Credits usually rent out for $65 per thousand, so a 10,000 credit reservation will cost you $895 in combination with renting 5k and owning 5k. A 12,000 credit rental will cost $1025 by owning 5k and renting 7k. MF are $1087 for 12,000 credits and still only gives you 1 HK token. That's why I suggest owning 5k and renting whatever you need extra. 

If you plan on staying on average at least 2 weeks a year using WM, then 20,000 credits makes the most sense because you only get 1 housekeeping token per ten thousand. 3 Weeks would be 30,000 credits. If you want only 1 week a year but don't want to have to rely on renting credits off others, you can get a 10,000 credit acount for $915 a year. The reason why renting credits is something that you can easily do with WM is because MF are calculated in a way where the more you own, the less you pay per thousand. A lot of people will own huge accounts and rent out what they don't need.

You can also use their inventory special and bonus time inventory for $72 per thousand plus tax. That includes housekeeping. It's good for short stays because then you don't have to waste a housekeeping token. I want my WM account to get bonus time at Reunion. It's the nicest Wyndham in Orlando and only has 3 bedroom units, so every time I want to stay I have to use up 140 housekeeping credit. 

Any time you do an owner update, you can argue that with a dual resale ownership, you get 100% access to both clubs as well as Interval Invernational. All the good WM units are next to impossible to book with club pass at 9 months because owners have them reserved 13 months out. WM also has waitlisting where a WM owner will get the unit before someone can book it with club pass because as soon as the person who has it reserved cancels, the waitlist person scoops it up. Club Pass is pretty useless and charges a $99 booking fee. No matter what your VIP status is, you can't get access to WM at the 13 month window when the good units book and you can't get access to Marriott through II. If that's what you care about, a retail purchase is pointless. That argument always gets me gifted with an AMEX within 10 minutes of the video presentation being over. Either that or I say "I'm planning on getting two 3 bedroom PICs and using Telesales to get VIP gold for a 200,000 point purchase at $134 per thousand", then ask if they have anything cheaper for permanent VIP Gold.  Since they can't offer you anything cheaper, they usually just try to push a basic package on you, then you say you're not willing to pay more than Telesales prices at $134 per thousand. I keep the Telesales number in my phone and say the person I spoke with when I called this number quoted me $134 a few months ago.


----------



## geist1223 (May 30, 2020)

folgema said:


> Is there a forum for advice on buying WM for a CW resale owner?  I am all resale, and don't really care about VIP.  But, I am interested in figuring out the best way to get access to WM.  Thanks!



Check out www.wmowners.com/forum


----------



## weleftmn (May 31, 2020)

Interesting tidbit








						Why Wyndham Destinations Is Rallying This Morning | The Motley Fool
					

Its latest presentation reveals possibly improved second-quarter EBITDA, 23 months of cash.




					www.fool.com


----------



## folgema (Jun 6, 2020)

cbyrne1174 said:


> If you only need 1 reservation a year, just find a 5k account for $569/year. It comes with 1 housekeeping token a year; any extra stays, you will have to pay for a cleaning. Credits usually rent out for $65 per thousand, so a 10,000 credit reservation will cost you $895 in combination with renting 5k and owning 5k. A 12,000 credit rental will cost $1025 by owning 5k and renting 7k. MF are $1087 for 12,000 credits and still only gives you 1 HK token. That's why I suggest owning 5k and renting whatever you need extra.
> 
> If you plan on staying on average at least 2 weeks a year using WM, then 20,000 credits makes the most sense because you only get 1 housekeeping token per ten thousand. 3 Weeks would be 30,000 credits. If you want only 1 week a year but don't want to have to rely on renting credits off others, you can get a 10,000 credit acount for $915 a year. The reason why renting credits is something that you can easily do with WM is because MF are calculated in a way where the more you own, the less you pay per thousand. A lot of people will own huge accounts and rent out what they don't need.
> 
> ...


Thank you, thank you!


----------

