Vacation Timeshares Drop at Record Pace as Americans Cut Back
Sept. 29 (Bloomberg) — U.S. vacation timeshare sales may fall the most this year since the industry gained popularity in the 1970s as consumers forgo spending to ride out the recession.
Sales may drop 30 percent this year from 2008, said Howard Nusbaum, president and chief executive officer of the American Resort Development Association, a Washington-based trade group. The market “will be a challenge for at least the next 18 months,” Patrick Scholes, senior equity research analyst at FBR Capital Markets & Co. said this month.
“Timeshares are just very, very discretionary items,” said Chris Woronka, an analyst at Deutsche Bank Securities in New York. “It’s the perpetual vacation. I am prepaying for the ability to take a vacation every year. Under the current circumstances, people are more reluctant to pay for that.”
U.S. timeshare sales dropped 8.5 percent last year to $9.7 billion from a peak of $10.6 billion in 2007, excluding the luxury fractional business and private residence clubs, according to an Ernst & Young LLP study prepared for ARDA. The decline was the industry’s first since 1975 and is being driven by tighter credit, a higher personal savings rate and the loss of 6.9 million jobs since the recession started in December 2007.
Read the rest of this article at Bloomber.com
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