Wyndham's Future?

[Jason S]

It seems like over the past few years there has been increasing availability of resale points at continuously decreasing prices. With more and more websites promoting these deals fewer people are going to buy through Wyndham. As of late Wyndham has been trying to entice more people by paying more to get them to come tour. They are using very shady sales tactics now, as I went to one recently before I decided to buy resale. I have toured at least a dozen different brands and they are among the worst now in my opinion. There were Gobs of sales people dressed like Don Johnson lining the walls like sharks waiting on their next victim. Trying to find the one person they could convince to pay for everyone elses beach trip by buying. But at the same time that they are increasing the cost of a sale they are still raising their prices, thus creating more disparity between their price and the resale market. Should we start expecting major increases in MF's to offset that loss of revenue for Wyndham. Is there a chance that they will start cutting corners in upkeep on the properties (it has happened to alot of other companies).

 

[BocaBum99]

Wyndham is in the worst shape of the resort developers I know. They simply don't seem to care about resale prices. That will bite them in the tail at some point in the future. The more they fight it, the harder it will be to correct when the retail buyers stop buying from them. There is evidence that they are already being impacted.

Then, they go and create a huge tax on owners who rent points by creating an onerous $99/129 guest fee. That's going to severely impact the one thing that was even keeping prices up where they are now.

 

[Kozman]

Guest Fees

Wyndham is in the worst shape of the resort developers I know. They simply don't seem to care about resale prices. That will bite them in the tail at some point in the future. The more they fight it, the harder it will be to correct when the retail buyers stop buying from them. There is evidence that they are already being impacted.

Then, they go and create a huge tax on owners who rent points by creating an onerous $99/129 guest fee. That's going to severely impact the one thing that was even keeping prices up where they are now.

Actually, all FSP members will get at least one free guest confirmation with increased complimentary confirmations for VIP levels.

§ FSP Member 1 Guest Confirmation

§ VIP Member 5 Guest Confirmations

§ Gold VIP Member 10 Guest Confirmations

§ Platinum VIP Member 15 Guest Confirmations per million

 

[BocaBum99]

Actually, all FSP members will get at least one free guest confirmation with increased complimentary confirmations for VIP levels.

§ FSP Member 1 Guest Confirmation

§ VIP Member 5 Guest Confirmations

§ Gold VIP Member 10 Guest Confirmations

§ Platinum VIP Member 15 Guest Confirmations per million

This distinction is not relevant to my assessment. An FSP getting 1 guest certificate is irrelevent when they own 1M resale points.

If the owner has a small rental business. Having one gc vs zero is not material.

Also, if an owner with 1M points just wants to have family members use their points, they have to pay a $99/129 fee after the first guest. That will reduce the number of points a family owns to what they feel they can reasonably use each year.

Both of these facts will serve to reduce resale demand for points which further hurts resale values.

Inreasing the express reservation rental rate to $8/1000 points will increase demand temporarily.

 

[Kozman]

This distinction is not relevant to my assessment. An FSP getting 1 guest certificate is irrelevent when they own 1M resale points.

If the owner has a small rental business. Having one gc vs zero is not material.

Also, if an owner with 1M points just wants to have family members use their points, they have to pay a $99/129 fee after the first guest. That will reduce the number of points a family owns to what they feel they can reasonably use each year.

Both of these facts will serve to reduce resale demand for points which further hurts resale values.

Inreasing the express reservation rental rate to $8/1000 points will increase demand temporarily.

I see your point if you restrict the issue to resale only. It looks like catering to resale points owners does not fit into their business plan.

 

[Jason S]

Aren't some of the other brands doing right of first refusals to keep the resale market from dropping that far. Do you ever see Wyndham doing that?

 

[AwayWeGo]

Widely Held Misconception Fueled By The Timeshare Companies.

Aren't some of the other brands doing right of first refusals to keep the resale market from dropping that far. Do you ever see Wyndham doing that?

ROFR doesn't keep the whole resale market from dropping down ever so far.

Even with ROFR, timeshares are resold at rock-bottom prices anyhow. Happens all the time.

So whussup with ROFR ?

Easy. What ROFR does is make it so that nobody but the timeshare company gets to buy the lowball resale timeshare bargains. And the timeshare companies holding ROFR don't have to buy'm back if they don't want to, so ROFR doesn't even work like a guaranteed buyback program, much less like a floor price on resales.

Just because you & I can't buy cheap, thanks to ROFR, that doesn't mean that owners out there aren't selling cheap. They are. Lots of'm. The thing is, because of ROFR (where that applies) only the timeshare company gets in on the bargain resales. ROFR is a 1-way street.

ROFR does nothing for the timeshare owner, & obviously nothing for the would-be bargain resale timeshare buyer -- only for the timeshare company, at its sole discretion.

ROFR = ROFL. You could look it up.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

 

[timeos2]

ROFR is NOT a good thing (unless you are the developer)

Aren't some of the other brands doing right of first refusals to keep the resale market from dropping that far. Do you ever see Wyndham doing that?

ROFR does nothing to support resale prices only to help developers make even more. Plus since the general economic downturn it seem even the more active ROFR places have stopped the practice (again proving it does nothing to protect buyers as a buy back program would) so its a moot point in any case. Resale prices are in a free fall and the market rules. If you want to buy there are great bargains - if you are selling it's the ultimate bad timing.

 

[timeos2]

Wyndham is fine on the operations side

Wyndham is in the worst shape of the resort developers I know. They simply don't seem to care about resale prices. That will bite them in the tail at some point in the future. The more they fight it, the harder it will be to correct when the retail buyers stop buying from them. There is evidence that they are already being impacted.

Then, they go and create a huge tax on owners who rent points by creating an onerous $99/129 guest fee. That's going to severely impact the one thing that was even keeping prices up where they are now.

Nothing new about the Wyndham moves to devalue resales. They can't really do much more harm as resales are already near rock bottom. Where the trouble is falls on the retail end. How can they hope to sell retail now when resale is 95% cheaper? For the bogus and changeable VIP nonsense? How many will be sucker into spending $20,000 or more for that "savings"?

Fortunately the FSP system is not a trust type operation which can set fees at whatever rate they desire along with overhead and no direct owner input. Most Wyndham resorts have a separate HOA running the resort with owner elected Board members then the FSP owners place their time into the FSP. Control and costs are still in the individual owners hands. MUCH better than the Trust type systems where total control resides with the Developer / Operator rather then owners. Wyndham and the FSP system is rock solid. Wyndham the developer / timeshare sales is in deep doodoo.

Huge tax? Not on those who ourchased to use and not make it a business. It was never meant for that.

 

[T_R_Oglodyte]

ROFR:

There is a basic, fundamental principle of microeconomics. Supply and demand are inversely related. If the price of something increases, more providers are willing to sell more of it. Meanwhile, buyers want less of it. Price equilibrium results when the supply of equals the demand.

The inevitable corrollary is that anything that artificially forces prices to some other level causes oversupply (if the price is forced higher) or shortages (if the price is forced lower).

To the extent ROFR succeeds in driving up prices higher than they would otherwise be, it inevitably causes oversupply. This shows up as owners who are ready and willing to sell their properties, but they can't find buyers at the prevailing, higher than equilibrium pricing. Potential purchases know that the ROFR is likely to be exercised so they have less reason to put in offers on those properties. So owners have listings that they can't sell.

--------

Of course, those owners might then simply drop their prices to attract buyers. But if that happens then the ROFR really isn't supporting the price; it's merely ensuring that the developer gets all of the best buyback opportunities. Moreover, when buyers know there is a resort ROFR they are less likely to try to buy a property; why bother putting in an offer that is likely to not result in a sale? To entice buyers the seller then needs to drop the price even lower to create an incentive for knowledgeable buyers to go ahead and put in offer with the hope that it might get through ROFR.

To the extent that ROFR causes desperate owners to drop their prices even lower to get interest, the ROFR will actually depress resale prices, and provide even better deals for the developer to buyback.

Further,

 

[bnoble]

There is evidence that they are already being impacted.

I think you may be mis-reading this. Yes, sales are down recently. I don't believe that it is due to resale values tanking. Resale has been a dime on the dollar, or lower, for at least two years now, but prior to the credit crunch, Wyndham was reporting steep sales growth.

As long as there are ignorant consumers, the spread doesn't matter. I'm guessing that Wyndham has not exhausted the pool of ignorant consumers.

All the better for me, I suppose, as I'm profiting from their ignorance as well.

 

[AwayWeGo]

In Other Words . . .

ROFR:

There is a basic, fundamental principle of microeconomics. Supply and demand are inversely related. If the price of something increases, more providers are willing to sell more of it. Meanwhile, buyers want less of it. Price equilibrium results when the supply of equals the demand.

The inevitable corrollary is that anything that artificially forces prices to some other level causes oversupply (if the price is forced higher) or shortages (if the price is forced lower).

To the extent ROFR succeeds in driving up prices higher than they would otherwise be, it inevitably causes oversupply. This shows up as owners who are ready and willing to sell their properties, but there aren't any buyers at the prevailing. Potential purchases know that the ROFR is likely to be exercised so they have less reason to put in offers on those properties. So owners have listings that they can't sell.

Loose Translation: Roffer is a thumb on the scale.

Even looser translation: ROFR = ROFL.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

 

[BocaBum99]

Most Wyndham resorts have a separate HOA running the resort with owner elected Board members then the FSP owners place their time into the FSP. Control and costs are still in the individual owners hands. MUCH better than the Trust type systems where total control resides with the Developer / Operator rather then owners.

You can't be serious! Show me the ballot for ANY Wyndham Resort where Wyndham owners voted on the $99/129 guest certificate fee.

You just completely discredited your entire argument regarding Trust type timeshare plans in one fell swoop.

 

[timeos2]

You have to trust the Trusts. Sorry, no sale.

You can't be serious! Show me the ballot for ANY Wyndham Resort where Wyndham owners voted on the $99/129 guest certificate fee.

You just completely discredited your entire argument regarding Trust type timeshare plans in one fell swoop.

The operation of FSP is under Wyndham control but it only represents a fraction of Wyndham annual fees. The majority of the annual fee comes from the individual resorts where the owners hold the votes. Example: Kingsgate Williamsburg. Resort fee $520. FSP Fee $120. So the control sits with the owners. The overhead for FSP is clear and reasonable. Compare that to the trust systems where both sides are set, with no recourse, by the developer /operator. Another example - THE CLUB from Diamond. Those of us in the original, voluntary non-trust based version control the fee we pay at our resorts and then make an annual decision if remaining in THE CLUB is valuable or not. $179/year if we stay - $0 if we don't. The vote for fees/resort operations is ours through our votes and owner controlled Board. THE CLUB trust based versions hold all control, has raised prices at will and across the board with zero trust member input. And they have virtually cut off resales. Thats the way it is with most trust based systems. No thanks.

 

[muskitties]

Interesting thread. As someone who has recently purchased two resale contracts, I have greatly benefitted by Wyndham's business practices that have allowed the resale market to tank. Nonetheless, I still wonder somewhat whether Wyndham can retaliate against resale purchasures by increasing our fees.

For example, I understand that as a deeded owner, Wyndham could never restrict the use of my points to access and use my home resort. But could Wyndham charge a special Fair Share Plus access fee for resale points that are used at other resorts? Similar to the recent restrictions on guest passes, could Wyndham claim that such a fee for using resale points at non-home resorts is "fair" in order to protect the access rights of VIP retail buyers?

Perhaps I'm just paranoid, but this concern keeps me from purchasing any additional resale points. Can anyone tell me that I have no reason to fear such moves by Wyndham to retaliate against us resale purchasures who bought our points at step discounts?

 

[Charlie D.]

It would probably be best to stay out of this discussion but I can not help myself. As a VIP owner let me put in my 2 cents (oh, pardon me) $18,000 worth. First off, OP has been a Wyndham resale owner for a few days now and already concerned about resale values? Good grief, the price of about everything resold (houses, cars, timeshares, etc,) has gone down. Why are the resale owners with 1MM points screaming about the GC costs? As it has been pointed out on this site many times, with the jillion dollars saved over a retail purchase they can afford hundreds of those GCs and still come out ahead. Have to rent some housekeeping credits? No problem – once again should be able to rent a million of those babies.

The increase in GC costs was pretty drastic. I got five free ones compared to one before the change. I don’t think Wyndham is too awful concerned about people who bought their points resale and trying to make a business out of renting them. Since their development sales are down, my guess is they are trying to generate some income in their FSP service department. My guess is that most retail owners are not affected too much by the new fee schedule. I would also venture a guess that Wyndham is more concerned with keeping a few thousand VIP owners happy at the possible dissatisfaction of a few mega-renters and mega-resale owners.

Charlie D.

 

[ragtop]

Watch out for Wyndham - its stock has dropped about 85% in the past year. How low can it go before something drastic happens? Obviously bankruptcy laws protect the timeshare owners, but will Wyndham be around to manage them?

 

[muskitties]

Charlie D., I'm not concerned about resale costs. I don't want to sell my recently purchased Wyndham resale point timeshares. And I'm not a mega-renter, I plan on using my points for travel with my family. However, I do wonder if Wyndham might further attempt to restrict or "tax" through fee increases the rights of resale buyers to participate in accessing non-home resorts in the FairShare Plus system.

 

[Jya-Ning]

In the same peiod, Starwood stock drop from 40 to 20 since last year Oct. Marriott's stock drop from 30 to $18. Wydham's stock from 18 drop to 10.

It just a bad economic outlook by investor.

At this moment, I doubt any company can get any credit. To predict all of them will bankrupcy or any of them will survive is pure guess.

If Wyndham really tanked, to say what it will do and how it will do is pure guess. Wyndham has 3 branch, Hotel, TS, RCI rental/exchange. I doubt you will see rental/exchange part tank. In fact, I think they are expanding at this moment. For TS, before this credit crisis, my understanding is they believe they have enough credit to purchase more cheap discount properties as recently as this July, after this crisis, they are just trying to preserve their cash flow. As for hotel business, look like they will going to shrink in all over the world the occupancy rate is even below 911.

If Wyndham really bankrupt, I am pretty sure owner will take over the VOA, and assign new VOA management company. And most location POA will replace current Wyndham mangement to a new management company.

If Wyndham just pure increase its management fee for each resort, at certain point, th POA of older resorts will be take over by majority of owner, and replace the management company (new resort, with less ownership, it wll be controlled by Wyndham). So more likely, Wyndham can only increase its management cost for the FSP program. If that happens, at certain point, I am pretty sure there will be a big law suit involved.

If Wyndham just use the owner's reserve money, they have suit some company did that before and put company's CEO in jail, I am pretty sure the samething will happen again.

Jya-Ning

 

[Don40]

The scary part of WYN is the TS portion as we owners really have no control of the VOA trust. Yes there is some control of the individual resorts but the system really only works with the trust to facilitate the points. Without points we are back to the traditional TS product and who wants that. The trust is ok as long as people pay the maintenance fees, but with foreclosure rates sky high, I am sure numerous HOA's are feeling the pinch as reflected in the resale points going for 95% of retail.

It appears that the economy will slowdown more and that does not bode well for a leisure product. Look at boat sales, when you are out of work you pay only the essentials and the rest will have to wait until your finances improve. With WYN stock price now at $6 things do not look so good and we all hope it gets better. With the stock price this low the market is currently saying the TS and Hotel portions of the company are worthless. The only value is RCI, and if people stop travelling that too will become less valuable. This is my humble opinion.

Don

 

[Jya-Ning]

The scary part of WYN is the TS portion as we owners really have no control of the VOA trust. Yes there is some control of the individual resorts but the system really only works with the trust to facilitate the points. Without points we are back to the traditional TS product and who wants that.

Consider what happens to FAX and Equivest Club plan. Nothing is guaranteed, that is the risk you will have to take with every ownership.

Jya-Ning

 

[PA-]

At what point does Fairfield (or worldmark, for that matter), decide that it makes better business sense to buy credits from owners and resale them than it does to build resorts to generate credits.

Not only can they potentially get the credits cheaper, they can then drive up the resale prices.

If Wyndham instructed their customer service reps to direct owners who call in asking how to get rid of their ownerships to a wyndham subsidiary, they could theoritically buy them at prices lower than even ebay gets.

 

[Jya-Ning]

The problem is always on selling. Their cost of building based on their quota, is only 25%. So getting all these recycled week is saving 25%. Worldmark maybe, Wyndham, will you like to buy Cypress Palm or BC given the same amount of money?

If they can figure a way to sell at a cost people sell on eBay, and get enough income, they will do it.

Jya-Ning

 

[PA-]

The problem is always on selling. Their cost of building based on their quota, is only 25%. So getting all these recycled week is saving 25%. Worldmark maybe, Wyndham, will you like to buy Cypress Palm or BC given the same amount of money?

If they can figure a way to sell at a cost people sell on eBay, and get enough income, they will do it.

Jya-Ning

It costs 25% of retail price to build credits, but it costs less than 2% of retail to buy them on the resale market. It would seem to me an effective strategy in the short term, at least.

 

[acesneights]

The problem with buying up resales is re-selling them. They would wind up selling deeded points at old resorts and then how do you justify $200/K for "used" timeshares?

Also they would be deeded all over the place, you couldn't show people their "new" unit that they just bought a 1/10,000 th share of.

There might also be legal issues with selling so many different properties in so many different states.

Stan