Predictions

[fernow]

It’s Difficult to Make Predictions, Especially About the Future - Neils Bohr, Yogi Berra, Whoever
Give the above, I am curious what you think the future holds for Timeshare and HGVC in particular. A lot of you know much more about the financial side of HGVC then I do.

One possibility is that after a month or two more, we go back to "normal". Seems a less than 50/50 possibility to me. Something will change. Possibly significantly.

What will happen to Timeshare sales? How long can HGVC go without new sales or substantially reduced sales? How high will maintenance fees go to cover other revenue shortfalls? How much industry consolidation is coming?

Hawaii is talking about substantially increasing Rental Car and Lodging taxes and trying to get fewer visitors who spend more money. https://www.westhawaiitoday.com/202...ng-reopening-hawaii-and-west-coast-economies/

Airlines are talking about no middle seats which would raise cost at least 33%. So seems likely travel costs are going to go up substantially.

Restaurants, particularly in resort areas, cannot survive on reduced capacity and increased regulation unless prices are substantially increased.

People's disposable ie Travel, income is falling or gone. Priorities are shifting. Fear has taken hold of the country. Fear is not good for travel and timeshare sales.

So...
1) Few months then back to normal
2) Few months then back to normal except at a higher cost. How much higher? Who is left to afford it?
3) Major disruption and reorganization of the Timeshare and travel industry inc HGVC but continuing in some unclear way, unlikely to resemble our previous expectations.
4) It's OVER

Broad question but this is a smart group. I am always impressed with your level on knowledge and insight. I am glad I got to enjoy the golden age of Timeshare. Now what?

 

[holdaer]

Being pragmatic vs alarmist? Who can predict? I can see there being a battle between the two in the short term.

 

[cbyrne1174]

I'm hoping this causes HGVC to merge with Club Wyndham 100%. Hilton has more upscale properties and would be a great addition to Wyndham's portfolio. Wyndham has the Presidential properties/rooms that are the same quality that Hilton owners are accustomed to as well. This would give Hilton owners more economical options as well without having to sacrifice much quality.

Both companies are also headquartered in Orlando, FL. If Hilton merges into Club Wyndham, they could operate more efficiently because they wouldn't need as many employees overall. They already have the workforce needed due to close proximity to each other.

 

[csodjd]

I think how things play out depends more on the broader economy than on infection. The infection fear will wane, that's human nature. Vaccine is possible. Treatments are possible. And quicker recognition with established medical protocols to decrease complications are certain.

But recession is another animal entirely. If we enter a sustained recession that WILL have a longer term impact. We can look to 2008-2010 and get an idea on how a recession may impact timeshares. Defaults may increase. That tends to increase MF since fewer people are sharing the costs. It also leads to lower prices to purchase as people just want out. And of course it may lead to bookings going down (which also actually decreases maintenance costs) making availability of the days/weeks you want better.

 

[tombanjo]

I don't see the demise of travel, and as posts here and on facebook indicate, people want to get back to traveling. Certainly, the hardship that many people and businesses are going through by being shut for weeks on end is a significant damper to the economy and there will be a people and business that suffer lasting and irreparable damage. So there will be no switch that flips and everything back to normal. But generally, timeshares are for people who at least had enough resources to initially buy or be eligible to buy. Obviously, people who wanted to exit timeshares before crisis will be in a worse place after, and there will be an increase in people who can no longer afford them, resulting in a depressed market for them. This will affect new sales and resales. Normally the top end of any market has more resilience than the bottom end, and I think that will be true here. The bottom end is where the pain is. Developers might need to review their high prices to get units sold to get MF's paid. Defaulted or unsold units are a drag which makes existing owners unwilling to carry larger and larger burdens. To break the cycle, developers might need to man up and review draconian sales and resale policies. That might be a positive lasting change in the industry. Overall, the business will continue, with a bit of a stagger and a limp, but march on.

 

[Sandy VDH]

Whatever the short term reality is, the long term will likely go back to something similar to what it was. Why we have short memory for disasters. They impact us hard when it happens but it usually is a blip on our lives. Ok this blip has been more extended than most.

We will have pains to get back to a new normal, but we will, collectively. That does not mean all companies and some individuals will weather the short term. Bankruptcies for business and perhaps people too, especially those who have lost their jobs. example 911 impact us all emotionally and traumatically. But 911 to those families immediately impacted, that day never really ends.

 

[csodjd]

But generally, timeshares are for people who at least had enough resources to initially buy or be eligible to buy.

I agree, however, the power of professional TS salespeople, I believe, leads some (if not many) that really don't have the resources to buy, and often at the highest of prices. I think retail TS sales by developer salespeople is the worst part of the TS business. It runs very counter to FMV, arms-length negotiation, and good old fashioned capitalism. And it creates a "marginally affordable" class.

 

[escanoe]

I'm hoping this causes HGVC to merge with Club Wyndham 100%. Hilton has more upscale properties and would be a great addition to Wyndham's portfolio. Wyndham has the Presidential properties/rooms that are the same quality that Hilton owners are accustomed to as well. This would give Hilton owners more economical options.

This is what I decided would be the best merger option for me (if one were to happen) back when we were all talking mergers. But with Hilton owning the branding rights for HGVC, I think this is fantasy land unless the Hilton and and Wyndham mother ships end up merging.

I hope we get back to using timeshares normally soon. With my (relatively young family) I suspect we will be willing to take some risks once travel restrictions are lifted. If any of my family members were older or in a more vulnerable category, we would probably be waiting on a vaccine.

The old timers here on TUG know what a recession means for the industry. All of us are going to have to watch and learn what the pandemic will mean ... without knowing how it will play out writ large, we sure don’t know what it will mean for timeshares.

If my financial situation holds, I am likely to roll the dice on buying some more good trading Vegas points as we go through the recession. I hope it it is a short and shallow recession for everyone’s sake.

 

[JIMinNC]

Travel will be changed forever. Air travel changed immensely after 9-11 and this will likely mean more profound changes. There will be fewer international routes and less service domestically for many years. Both the CEOs of Delta and American have already said as much.

I have no idea what else will change, but I suspect it will be significant. I think we are going to be dealing with this new virus in one way or another for a long time.

Medical screenings will be the new TSA.

 

[JDHPE]

This could end up increasing timeshare demand versus hotels for the primary benefit of being able to avoid the 2-3 daily visits to restaurants. If there is broad based reluctance to eating out, timeshare marketers may want to focus on the safety of self-prepared meals.

 

[elaine]

cruising will be forever changed. Those 60+ will think long before taking a cruise. They will still want to travel (and many delayed traveling while working), so higher end TS might do OK, as they would drive to TS or even fly to a destination vs. cruise.
After 9-11 travel changed, but 5 years later, even leisure was fairly strong again. In 2 years, there's likely either a vaccine, treatment or herd immunity, IMHO. The next year, not so much. We'll drive for all travel for the next year and stay in TS to reduce contact and restaurants.
I think traditional TS are pretty much toast. Points systems of hotel TS will be OK as it's a recognizable name/standard and can pull from that reputation. I think lower entrance fees/capital costs (such as EOY packages) might be needed to sell new ones.

 

[cbyrne1174]

I don't think all traditional timeshares are toast. Owning a Marriott week is more cost effective if you usually stay 7 nights at a time Vs using DC points. A savvy Marriott owner would have both and use points for short stays and weeks for long stays.

 

[elaine]

meant traditional weeks at non-branded TS (not Marrriott, Hyatt, HGVC, etc.). I also think points at non-branded will be harder to sell as well.

 

[fernow]

The virus is very polar. it is a "Novel" Corona virus. It produces minor "cold" (Corona virus has always accounted for 20-30% of colds) or it makes you very sick and may kill you. Small percentage of the latter thankfully.

Vaccine is a hope but unlikely. Been trying to find a cure for the common cold forever. Treatments may emerge to reduce death rate but will never be zero. Viruses mutate so viral infections of various severity we will always have with us with yet another vaccine needed. Herd immunity? Maybe, to some extent. See "mutate".

Fear of contagious disease in general and societies allowance for individual decisions are the real determining factors in the future of timeshare and travel... and restaurants and sporting events and weddings and...

Does no good for me to decide to take a "risk" and desire to travel somewhere if society will not allow that decision and/or the residents of the destination fear outsiders.

Where the society goes from here is the big question.

 

[HGVC Lover]

This could end up increasing timeshare demand versus hotels for the primary benefit of being able to avoid the 2-3 daily visits to restaurants. If there is broad based reluctance to eating out, timeshare marketers may want to focus on the safety of self-prepared meals.

I agree.....we did a variety of ways to traveling each year from cruising, to time sharing to staying in international hotels for several weeks at a time. We are happy we have a lot of HGVC points and are seeing ourselves mostly going to HGVC's for vacationing this year and next year. I think it will be a much more secure way of traveling then being on a cruise ship for a couple of weeks and it still feels like having all the advantage of being at home.