Wyndham Strategy - Ovations

[ekajun1957]

Anyone else wondering what is Wyndham's corporate strategy in reference to the Ovations program? Why would they take these back? More inventory for them to rent out? Resell to some other unsuspecting person? I would think that timeshares sales must be down with the current negative view of them and they not asking for them back to resell as they must have inventory to sell at most locations. So just wondering if any of you who know so much more than I about the whole timeshare business have an idea and if this may someway affect us owners or has it yet?? I do know that it is only certain places they take back so surely they know how much more they can make on rentals of those buy backs or resell. Know this has been discussed previous but now that we know more of how it works wanted some opinions. Also for those in resell market has it affected resell prices yet on any properties or what?

 

[jebloomquist]

Anyone else wondering what is Wyndham's corporate strategy in reference to the Ovations program? ... Also for those in resell market has it affected resell prices yet on any properties or what?

I cannot speak for the intentions of Wyndham, but looking at Ovations from a pure supply-demand standpoint, this might be the result.

With Ovations, Wyndham does not affect the demand for ownership, but it does affect the supply of resale ownership properties. This should move the supply curve such that resale prices will rise. In many cases the $1 resale price may turn into the $1,000 and $2,000 price. This should then make the developer/resale price comparison look less onerous to any prospective buyer in Wyndham's favor.

At that point, more owners might be willing to sell, which would move the supply curve such that resale prices would fall somewhat.

In the end, there will be market prices established for various properties in the resale market. Still, Wyndham will pay nothing to acquire a property, but will forfeit the $299 that it would receive as a result of a resale.

One might suggest that as a result of Wyndham’s acquisition through Ovations, it will no longer receive maintenance fees. However, it might be possible that Wyndham benefits, because some of the properties are already in default on the maintenance fees such that nothing there is actually lost. Plus, to qualify for Ovations, all fees must be paid up to date such that Wyndham gets maintenance fees that it otherwise would not get. Also, Wyndham will have more properties to sell that it has acquired for virtually nothing.

I don’t know what the thoughts are of the economic theorists at Wyndham, but if I were one of them, these would be my thoughts.

Jim

 

[bnoble]

Primarily, I believe they are acquiring CWA inventory to resell as "new." Wyndham's development costs are about 20% of sales prices, so anything below that is better than new development. Since there is no notion of home resort, this can com from anywhere as long as they get a mix of high and low $/K deeds. Finally, moving deeds into CWA retains the voting rights on those deeds for Wyndham.

 

[ronparise]

Wyndhams has long had an "asset light" approach to developing timeshares,

1) their goal is to keep their cost of goods at about 16%.

They sell this stuff for something in the neighborhood of 20 cents a point which means that a condo that costs us 200000 points a week represents 10,000,000 points (50 weeks x 200k). at 20 cents a point thats $2million.. so they want to pay something like $300,000 for one of these condos. On a per point basis thats about 3 cents a point

Taking points back at zero cost that they can sell at 20 cents each helps them maintain that 16% cost of goods target

2) they dont want to tie up corporate money developing this stuff

Consider the development of Bonnet Creek. They had to buy the land, get the permits, develop the land (sewer, water, elec service etc. then build the buildings and maintain them until we bought the points and started paying our fees. There was a long development period where Wyndham was spending money with no return... They dont like that. I think Bonnet Creek was the last project that they developed from the ground up.

What they do now is to look for partners that do the building and developing and then Wyndham buys the finished product "just in time" to sell to us. That way no corporate money is tied up. (the new resort in Las Vegas is an example. Guggenheim Partners was the developer or at least the money behind the development)


So why is wyndham taking back inventory? I think for two reasons: 1) it helps keep the cost of goods sold way down (and profits up) and 2) They have to. Their ownership base is getting older. Just like every new car dealer has a used car lot on site to take in trades and "recycle" the inventory, so to the timeshare developers have to find a way to "recycle" what they have sold. This is Wyndhams way

 

[Cheryl20772]

I agree that Ovations is a CWA project. They sell Access as the timeshare of the future.

If I own a week with a deed, and I sell or give it away, that does nothing to convert it to the Wyndham vision for the future. If Wyndham takes it back, they can put it into their CWA account holdings and accomplish two things:

1. increase the availability pool for current CWA owners,
2. accelerate transition to majority of the resort weeks being Access owned.
3. this also gives Wyndham more control or voice in the running of the individual resorts at the owner voting level.

We can see today remnants of past ways to timeshare. In Wyndham resorts there are still fixed weeks and unconverted float weeks owned by individuals. I think these remnants will continue, but the day will come when Wyndham will be mainly Access owned.

 

[ronparise]

I agree that Ovations is a CWA project. They sell Access as the timeshare of the future.

If I own a week with a deed, and I sell or give it away, that does nothing to convert it to the Wyndham vision for the future. If Wyndham takes it back, they can put it into their CWA account holdings and accomplish two things:

1. increase the availability pool for current CWA owners,
2. accelerate transition to majority of the resort weeks being Access owned.
3. this also gives Wyndham more control or voice in the running of the individual resorts at the owner voting level.

We can see today remnants of past ways to timeshare. In Wyndham resorts there are still fixed weeks and unconverted float weeks owned by individuals. I think these remnants will continue, but the day will come when Wyndham will be mainly Access owned.

No question Cheryl is right about this. Whether they take something back through foreclosure or Ovation, it probably ends up in CWA. But the question remains . was Ovation created to feed CWA or was Ovation created as an alternative to foreclosures and Cwa just happens to be the obvious place to put the stuff

It really doesnt matter, CWA is still the future of Wyndham timeshares;

does anyone know whether the newest resorts Chicago, New York and Desert Blue are 100% CWA or have they sold deeded ownerships

 

[vacationhopeful]

<snip>
does anyone know whether the newest resorts Chicago, New York and Desert Blue are 100% CWA or have they sold deeded ownerships

Ron,

My bet would be any leasehold they contract for ... not an owned resort ... would be ONLY SOLD in CWA.

 

[ronparise]

Ron,

My bet would be any leasehold they contract for ... not an owned resort ... would be ONLY SOLD in CWA.

what makes you think these are leaseholds

 

[vacationhopeful]

what makes you think these are leaseholds

I would think the Hotel resorts (like Chicago or NYC) might be leaseholds.

 

[Cheryl20772]

Ron,

My bet would be any leasehold they contract for ... not an owned resort ... would be ONLY SOLD in CWA.

CWA also sets them up to be able to more easily shed problem resorts. In past, if they began selling intervals at a property and then ran into trouble they could leave it, but would continue to have those weeks they sold deeds to hanging on in the pool of owners.

I'm thinking of Coconut Malorie in Ocean City...now an "Associate Resort" that we can only obtain if an owner there decides to pool their week. If Wyndham had sold those as Access, it would have been easy for them to sell or negotiate those deeds out of the pool if they wanted to. That resort could just disappear out of the Directory. When they are selling Access they emphasize the list of resorts and not any single one.

 

[vacationhopeful]

Cheryl,

We are saying pretty much the same thing. The Associate Resorts could have been a subset of units/weeks that Wyndham picked up at some time. Now they are orphans ... in a resort NOT managed by Wyndham.

 

[ronparise]

talk about orphans. i own points deeded at places that arent associates or affiliates. I own there but I cant reserve there

Royal Vacation Suites
and
Causeway on Gull

 

[schoolmarm]

Leaseholds

I think that Chicago is a long-term lease. NYC (according to a non-NYC salesperson, so take that with a grain of salt) owns 7 floors and leases the rest. When I was in NYC last year, they were still working through the mechanism to sell in NYC and all of the ownership. At that point they were selling CWA or Bonnet Creek with "special" options to NYC because you bought in NYC.

Has anyone had Chicago or NYC offered as a UDI?

 

[Cheryl20772]

We laugh that no timeshare is "new" but when looking at deeds in the public record, it's possible to find an occasional deeded one that might be complicated in it's usedness when it comes to transferring ownership. For real estate that's why there is title search and title insurance.

"Used" Ovation titles going into CWA would simplify this (probably small) risk for Wyndham. If a title problem popped up somehow later, it would be embarrassing for Wyndham to have to notify someone they sold a retail deed to, but if it's in the CWA pool, they can pull it out and no one would even know.

 

[Lerose]

Former Hotel 71

what makes you think these are leaseholds

http://www.chicagobusiness.com/real...121109851/hotel-71-to-get-new-name-renovation

 

[ronparise]

http://www.chicagobusiness.com/real...121109851/hotel-71-to-get-new-name-renovation

Thanks for that link

Now if Linda is right (and Linda is almost always right) Chicago should be a CWA resort

It's not

I'm having trouble wrapping my head around that

 

[raygo123]

Nope, not in CWA. It is VIP. My daughter and husband was there with her 3 yr old when it first opened. They really liked it.

Sent from my Nexus 7 using Tapatalk

 

[ekajun1957]

Nope, not in CWA. It is VIP. My daughter and husband was there with her 3 yr old when it first opened. They really liked it.

Sent from my Nexus 7 using Tapatalk

So these lease holds may be a tactic just to entice big owners all the way to Platinum VIP or whatever that top level is called.

 

[ronparise]

So these lease holds may be a tactic just to entice big owners all the way to Platinum VIP or whatever that top level is called.

Dont be influenced by Rays post.. The only resorts restricted to VIP owners are the Margaritavill resorts

Chicago is open to any owner that has enough points

What I trying to figure out is: is Wyndham selling contracts (not deeds) based on Leases now similar to Bentley Brook