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Delay in New VIP Levels Due to Corona Virus

Worker

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Does anyone think Wyndham will delay New VIP Levels due to Resorts Shut Down and the Corona Virus Economy?
 

HitchHiker71

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Does anyone think Wyndham will delay New VIP Levels due to Resorts Shut Down and the Corona Virus Economy?
I think it’s a bit early to tell, given we don’t yet know the economic impact. I suspect Wyndham will wait to see what Q1 and Q2 2020 has to say economically both from a macroeconomic perspective and from a microeconomic (read Wyndham) perspective, before making any announcement. That said, I would surmise any change will be delayed into 2021, or until the economy comes out of recession, whichever takes longer. Right now most economists are predicting at least two quarters of recession, although some are predicting 3-4 quarters of recession before we see any recovery - depending on how long and deep the forced shutdown lasts.


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Sandi Bo

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My best guess would be it'll depend on if they think it will increase sales (to implement or delay). They'll do whatever makes the most sense for their bottle line.
 

chapjim

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I'm with Sandi Bo. I don't think the virus will necessarily be a factor. Wyndham execs will don their strategic thinking caps and try to come up with something.

Since it appears the travel industry will bite the big one (already has?), Wyndham will have many more matters to consider than when to roll out the new VIP levels.
 

HitchHiker71

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I'm with Sandi Bo. I don't think the virus will necessarily be a factor. Wyndham execs will don their strategic thinking caps and try to come up with something.

Since it appears the travel industry will bite the big one (already has?), Wyndham will have many more matters to consider than when to roll out the new VIP levels.
Honestly I’m not sure just how long Wyndham will survive in its current form. They just drew down on a $1B line of credit - yet they only have about 1.2B in cash and cash equivalents after doing so. Q1 is generally their weakest revenue quarter and their most costly expense quarter especially given the dividend payouts (which just increased 11% this year) that must occur before end of March. The CEO and execs have already announced either complete or significant pay cuts. I figure layoffs are coming next soon after. They have enough cash to last for perhaps six months at most given their cash burn and current leverage of 2.7x.

I hope I’m wrong of course - but am not encouraged from what I’ve learned so far in looking at their financial numbers. They will also have to pay back that credit line at some point of course. Tough times ahead for anyone in the timeshare and hotel sectors for sure.


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dgalati

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Honestly I’m not sure just how long Wyndham will survive in its current form. They just drew down on a $1B line of credit - yet they only have about 1.2B in cash and cash equivalents after doing so. Q1 is generally their weakest revenue quarter and their most costly expense quarter especially given the dividend payouts (which just increased 11% this year) that must occur before end of March. The CEO and execs have already announced either complete or significant pay cuts. I figure layoffs are coming next soon after. They have enough cash to last for perhaps six months at most given their cash burn and current leverage of 2.7x.

I hope I’m wrong of course - but am not encouraged from what I’ve learned so far in looking at their financial numbers. They will also have to pay back that credit line at some point of course. Tough times ahead for anyone in the timeshare and hotel sectors for sure.


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I guess cutting the maintenance fees while resorts are shut is out of the question then?
 

dagger1

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I guess cutting the maintenance fees while resorts are shut is out of the question then?
I thought Maintenance Fees went to the resorts?
 

55plus

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Yes, they go to the resorts except for a management to pay for the reservation system, etc.
 

dgalati

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Yes, they go to the resorts except for a management to pay for the reservation system, etc.
Whats the chance they forgive management of reservations fees?
 

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I think with fewer staff, fewer reserve funds for marketing,fewer buyers of timeshares, closure of properties till May 1 (for now), Wyndham will delay New VIP Levels.
 

dagger1

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Whats the chance they forgive management of reservations fees?
Isn’t Wyndham still providing reservation and other management services? Why wouldn’t they get paid their management fee’s?
 

Braindead

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I guess cutting the maintenance fees while resorts are shut is out of the question then?
Whats the chance they forgive management of reservations fees?
Complete nonsense!!
When a snowbird goes south for months in the winter, are they responsible for the monthly expenses on their house?? Of course they are
Same way for those with a second home-vacation home do they only pay the monthly bills for the property that they are currently residing at or both homes? Both

If you had any common sense at all, you wouldn’t be asking these ridiculous questions trying to stir the pot!

To all on this forum, the only way to stop this nonsense is for all of us to STOP responding to any & all dgalati post!!
I’m joining others putting him on the ignore list for good!! Dgalati is NOT a Wyndham owner
 

55plus

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Is Dgalati a Wyndham troll?
 

dgalati

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I think with fewer staff, fewer reserve funds for marketing,fewer buyers of timeshares, closure of properties till May 1 (for now), Wyndham will delay New VIP Levels.
Buying HGVC is out of the question now also?
 

cbyrne1174

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I think they are going to have a lot of problems from people defaulting, so if anything they will improve VIP levels to lower amounts to get people to buy. I don't know if any else has come up with a plan for when times get tough (think depression, not recession). I'm assuming that my husband will make nothing the next to years and my teacher's salary is all that we will have, so if I need a new car, which is likely within the next 2 years, I will end up defaulting on a few things to get by and Wyndham is the first on the list if I can't rent out my points at cost (currently $5.6 per thousand).
 

dagger1

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paxsarah

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It seems unlikely in these uncertain times that any hospitality company is going to be in a position to buy another hospitality company, at least until we see how things shake out for them financially.
 

dgalati

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See quote below.

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[/QUOTE]
Honestly I’m not sure just how long Wyndham will survive in its current form. They just drew down on a $1B line of credit - yet they only have about 1.2B in cash and cash equivalents after doing so. Q1 is generally their weakest revenue quarter and their most costly expense quarter especially given the dividend payouts (which just increased 11% this year) that must occur before end of March. The CEO and execs have already announced either complete or significant pay cuts. I figure layoffs are coming next soon after. They have enough cash to last for perhaps six months at most given their cash burn and current leverage of 2.7x.

I hope I’m wrong of course - but am not encouraged from what I’ve learned so far in looking at their financial numbers. They will also have to pay back that credit line at some point of course. Tough times ahead for anyone in the timeshare and hotel sectors for sure.


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raygo123

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See quote below.

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[/QUOTE]And how much did they draw down? Is there cash flow less than expenses? By how much did they draw down? How much is $1.2 billion compared to normal cash reserves. I'm impressed you know all that!!! Maybe the draw down was to buy HGVC?

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raygo123

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Honestly I’m not sure just how long Wyndham will survive in its current form. They just drew down on a $1B line of credit - yet they only have about 1.2B in cash and cash equivalents after doing so. Q1 is generally their weakest revenue quarter and their most costly expense quarter especially given the dividend payouts (which just increased 11% this year) that must occur before end of March. The CEO and execs have already announced either complete or significant pay cuts. I figure layoffs are coming next soon after. They have enough cash to last for perhaps six months at most given their cash burn and current leverage of 2.7x.

I hope I’m wrong of course - but am not encouraged from what I’ve learned so far in looking at their financial numbers. They will also have to pay back that credit line at some point of course. Tough times ahead for anyone in the timeshare and hotel sectors for sure.


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How much did they draw down on the $1.2 billion? Why did they draw on the line of credit? What about club fees they didn't go go down or change.

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dgalati

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I think they are going to have a lot of problems from people defaulting, so if anything they will improve VIP levels to lower amounts to get people to buy. I don't know if any else has come up with a plan for when times get tough (think depression, not recession). I'm assuming that my husband will make nothing the next to years and my teacher's salary is all that we will have, so if I need a new car, which is likely within the next 2 years, I will end up defaulting on a few things to get by and Wyndham is the first on the list if I can't rent out my points at cost (currently $5.6 per thousand).
Unfortunately many will have to make some tough choices ahead.
 

HitchHiker71

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How much did they draw down on the $1.2 billion? Why did they draw on the line of credit? What about club fees they didn't go go down or change.

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Wyndam has access to a $1B credit line - they drew down on the entire line this month. Currently they have cash and cash equivalents of around 1.2B after doing so. Wyndham drew down because they need the cash to survive. Fees don’t amount to much in so far as revenue goes - the majority of Wyndham revenue comes from VOIs (Vacation Ownership Investments), or developer sales. Since all VOIs are suspended - their primary revenue source has disappeared through at least end of April, and probably well beyond that given the recession/depression that is all but inevitable at this point.


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OutSkiing

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It seems unlikely in these uncertain times that any hospitality company is going to be in a position to buy another hospitality company, at least until we see how things shake out for them financially.
If things are that bad for the Hospitality / Lodging industry, mergers and acquisitions may be the only way to survive. If Wyndham or HGVC or any other timeshare management company has their back against the wall, they may have to sell out.

But as Raygo123 said, we don't know what Wyndham is going to do with their 1.2 billion dollars of cash. Seems like a lot to draw all at once to cover operating expenses.

Bob
 
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