Most of you reading this message are either long-time WorldMark owners or prospective owners trying to “get the lay of the land” before making the plunge into ownership. Regardless of your owner status, the reality is we are in a bear market for WorldMark credits as of this writing. In other words: This is perhaps the best time in many years to make take the jump into the market for more credits because the pricing and selection of memberships available has never been better.
“What’s going on?” you might ask. The portfolio of properties you can vacation at is continually expanding as are the amenities of the newest resorts coming on line. This seems like a good thing, (it is) and it seems as if this that would cause prices to rise (it has-but only at the retail end of the game.) Membership is above 261,000 members and climbing, so more and more people are coming to understand WorldMark is for real and Ownership really does confer some outstanding vacation opportunities to the traveling public. These demand indicators suggest pricing should be going up, yet prices seem soft and there appears to be a lot of sellers in the market.
No question about it, many of our prospective buyers are monitoring our website, some of them every day, looking for that deal of all deals. We get tens of thousands of folks looking at our site every month, and over half of them are repeat viewers who came directly to the TLS page. They know who we are and what they do. They weren’t searching; they came right to our door. While we try to make our website informative and fun, I know better than to think these folks are just reading up. They’re shopping, but aren’t ready to commit until they sense the bottom is at hand.
Here’s the deal: In early November, 2006, Wyndham modified (very slightly in our view) the WorldMark program as it is offered at their retail sales offices. This modification, called Travel Share, has, in a word, devastated the after market for WorldMark credits. I don’t say this lightly, nor do I say it judgmentally. The nature of business is to seek profits, and Wyndham is chasing profits by incrementally changing the nature of its retail offerings to discourage their customers from becoming mine.
For many months after the introduction of Travel Share our listing inventory grew. Historically, we’ve maintained around 300,000 credits in inventory and turned that in a 30 day cycle. Our challenge was to be able to secure enough credits in inventory to offer to our many buyers. Post Travel Share, we reached a peak inventory of just over 1,100,000 credits. Price softening was one way we could manage that inventory back to today’s level of 424,000 credits in inventory. Knowledge was another. As more prospective owners see through the fog of Travel Share to the core value of WorldMark credits, credits sales in the aftermarket have begun to pick up again.
Frequent visitors to our TLS website can see this plainly; prices are lower today than they were 5 years ago. For the cautious among you, I encourage you to abandon your quest to buy at the bottom of the cycle, BECAUSE YOU CAN’T TIME IT ANY BETTER THAN FINANCIAL FOLKS CAN TIME THE BOTTOM OF THE STOCK MARKET!
Be content with a great deal and top off your WorldMark account before you plan your next vacation.
Let us help! To spur sales upward and to provide liquidity for your fellow WM owners who need to sell, we’re offering FREE CLOSING COSTS, a value of $250, on all purchases thru the end of 2007. Help us close out another great year by setting yourself up, at bargain prices, for a lifetime of vacation memories.
Friday, November 21, 2008
Credits vs. Second Home
Buyer clients will often ask me “Do you own WorldMark credits?” to which I can honestly answer “Absolutely.” Unlike many salespeople, I really do believe in what I’m selling. I think WorldMark credits represent a certain and growing value as a vacation product, and they can serve as a hedge against economic uncertainty, too.
In fact, I’m such a believer in WorldMark credits that my wife, Carla, and I have begun to assemble a large number of credits into what we term “our second home account.”
We have 25,000 credits in this membership, and our plan is to continue to add six to eight thousand credits to that account each year until we retire. This would leave us with 100,000 plus credits to vacation with every year until we run out of years or energy. Furthermore, we feel this package would ensure our 3 kids and their families could vacation for their lifetimes, too, all the while building in value while saving on vacation expenses at the same time.
Consider: if you bought a vacation home in California, Nevada, Hawaii, or Florida recently, you’re probably uncomfortable with the amount of your investment you could recoup if circumstances forced a quick sale. You may even have paid cash for it, but you still might not be able to borrow against or liquidate your property due to the current financial upheaval in the housing and mortgage marketplace. WorldMark credits, however, are VERY liquid. Our inventory is currently turning over in a 40 day cycle. That’s right. We sell membership on average in 40 days. And we’ve been doing this now for over 14 years!
At current market prices, any of us could assemble 100,000 credits for as little as 75 to 80 thousand dollars. Annual dues on this membership would be $4282.16. If one booked only one bedroom, all blue weeks, you’d get 24.60 weeks per year for your dues, so you’d pay $174.05 dues per week of vacation. If you booked only one bedroom, all red weeks, you’d vacation 11.59 weeks per year at a cost of $369.44 in dues per week of vacation.
Advantage: CREDITS! No maintenance headaches. No rental agreements. No property taxes or HOA fees (these are all paid for you thru your WorldMark dues.) No vandalism, no mortgage fees, no mortgage insurance. No single location, unless you choose. No limit on unit size, or even units used at one time. No worries about liquidity if you need out FAST.
My staff and I will be expanding on this expanded use of credits in lieu of vacation property over the coming months. As we develop the analytics, we’ll be sharing them with you, our loyal audience of enthusiastic WorldMark owners. Stay tuned.
In fact, I’m such a believer in WorldMark credits that my wife, Carla, and I have begun to assemble a large number of credits into what we term “our second home account.”
We have 25,000 credits in this membership, and our plan is to continue to add six to eight thousand credits to that account each year until we retire. This would leave us with 100,000 plus credits to vacation with every year until we run out of years or energy. Furthermore, we feel this package would ensure our 3 kids and their families could vacation for their lifetimes, too, all the while building in value while saving on vacation expenses at the same time.
Consider: if you bought a vacation home in California, Nevada, Hawaii, or Florida recently, you’re probably uncomfortable with the amount of your investment you could recoup if circumstances forced a quick sale. You may even have paid cash for it, but you still might not be able to borrow against or liquidate your property due to the current financial upheaval in the housing and mortgage marketplace. WorldMark credits, however, are VERY liquid. Our inventory is currently turning over in a 40 day cycle. That’s right. We sell membership on average in 40 days. And we’ve been doing this now for over 14 years!
At current market prices, any of us could assemble 100,000 credits for as little as 75 to 80 thousand dollars. Annual dues on this membership would be $4282.16. If one booked only one bedroom, all blue weeks, you’d get 24.60 weeks per year for your dues, so you’d pay $174.05 dues per week of vacation. If you booked only one bedroom, all red weeks, you’d vacation 11.59 weeks per year at a cost of $369.44 in dues per week of vacation.
Advantage: CREDITS! No maintenance headaches. No rental agreements. No property taxes or HOA fees (these are all paid for you thru your WorldMark dues.) No vandalism, no mortgage fees, no mortgage insurance. No single location, unless you choose. No limit on unit size, or even units used at one time. No worries about liquidity if you need out FAST.
My staff and I will be expanding on this expanded use of credits in lieu of vacation property over the coming months. As we develop the analytics, we’ll be sharing them with you, our loyal audience of enthusiastic WorldMark owners. Stay tuned.
Wyndham’s Development and the Cost of Credits
On Monday, October 6, 2008, Associated Press announced “Shares of Wyndham Worldwide, Corp. plunged with the broader market on Monday after the hotel company announced changes to its timeshare business and restructuring charges. Wyndham shares dropped 87 cents, or 6.9%, to $11.83 in afternoon trading. They hit an all-time low of $11.05 earlier in the session. Wyndham plans to refocus its timeshare business beginning in the fourth quarter. The Parsippany, N.J.-based company will shift its sales and marketing efforts to consumers with higher credit quality…AND CUTBACK ON TIMESHARE DEVELOPMENT.”
I’ve addressed the value of credits before in this column. As a general rule, timeshares of ANY type represent poor collateral value. That is, they are not generally pledged as security for a loan due to the difficulty and cost associated with selling them. Despite this fact, I’m fascinated by the role reversal of WorldMark vacation credits and financial instruments which have (historically) served as a store of wealth. Consider:
October 20, 2007
Dow Jones Industrial Average: 13,806
Standard and Poors 500: 1535
Nasdaq Composit: 2804
WorldMark Credits: Based on TLS “adjusted value” index: 54 cents per credit
October 20, 2008
Dow Jones Industrial Average: 9,033 (Down 35%)
Standard and Poors 500: 955 (Down 38%)
Nasdaq Composit: 1696 (Down 40%)
WorldMark Credits: Based on TLS “adjusted value” index: 47 cents per credit (Down 13%)
That’s right. An investment in credits, while worth 13% less than if purchased one year ago, lost SUBSTANTIALLY less value than the 3 main gauges of financial health noted above. This data, along with the news from AP that Wyndham is curtailing development goes to the heart of the issue. NOW IS THE BEST TIME EVER TO INVEST IN WORLDMARK CREDITS.
Holding cash is a comfort for many of us in challenging economic times, but staying on the sidelines can be very costly if you miss a substantial move in the markets. A combination of factors suggests to me that after-market pricing for WM credits has hit the bottom:
1. Restricted supply of new credits (see AP quote above) means Wyndham retail sales units may get squeezed for inventory…and reselling credits which might otherwise have entered the secondary market would be one way Wyndham can keep its sales lines open.
2. TLS margins are getting squeezed as we must pay more to sellers for credits than we’ve had to historically.
3. If brokers don’t pay more, they can’t find sellers willing to sell, which means less inventory of credits on the aftermarket.
4. Financial data suggests credits, previously considered poor collateral, are holding up well against non-cash alternatives such as stocks, bonds and mutual funds.
5. Due to many factors, including softening in the broader economy and the introduction of “Travel Share,” the market for WorldMark credits is as soft as I’ve seen in my 14 years of making a market for WorldMark credits. The prices sellers receive, net of sales expenses, are approximately the cost to Wyndham of development. This factor, along with the planned reduction in development of new resorts, suggests a future shortage of used credits.
If you and your family have considered more credits, I sincerely believe this is the best time in 14 years to make the investment. Plus, have you ever enjoyed a stock, bond, or mutual funds as much as your vacation with WorldMark by Wyndham?
I’ve addressed the value of credits before in this column. As a general rule, timeshares of ANY type represent poor collateral value. That is, they are not generally pledged as security for a loan due to the difficulty and cost associated with selling them. Despite this fact, I’m fascinated by the role reversal of WorldMark vacation credits and financial instruments which have (historically) served as a store of wealth. Consider:
October 20, 2007
Dow Jones Industrial Average: 13,806
Standard and Poors 500: 1535
Nasdaq Composit: 2804
WorldMark Credits: Based on TLS “adjusted value” index: 54 cents per credit
October 20, 2008
Dow Jones Industrial Average: 9,033 (Down 35%)
Standard and Poors 500: 955 (Down 38%)
Nasdaq Composit: 1696 (Down 40%)
WorldMark Credits: Based on TLS “adjusted value” index: 47 cents per credit (Down 13%)
That’s right. An investment in credits, while worth 13% less than if purchased one year ago, lost SUBSTANTIALLY less value than the 3 main gauges of financial health noted above. This data, along with the news from AP that Wyndham is curtailing development goes to the heart of the issue. NOW IS THE BEST TIME EVER TO INVEST IN WORLDMARK CREDITS.
Holding cash is a comfort for many of us in challenging economic times, but staying on the sidelines can be very costly if you miss a substantial move in the markets. A combination of factors suggests to me that after-market pricing for WM credits has hit the bottom:
1. Restricted supply of new credits (see AP quote above) means Wyndham retail sales units may get squeezed for inventory…and reselling credits which might otherwise have entered the secondary market would be one way Wyndham can keep its sales lines open.
2. TLS margins are getting squeezed as we must pay more to sellers for credits than we’ve had to historically.
3. If brokers don’t pay more, they can’t find sellers willing to sell, which means less inventory of credits on the aftermarket.
4. Financial data suggests credits, previously considered poor collateral, are holding up well against non-cash alternatives such as stocks, bonds and mutual funds.
5. Due to many factors, including softening in the broader economy and the introduction of “Travel Share,” the market for WorldMark credits is as soft as I’ve seen in my 14 years of making a market for WorldMark credits. The prices sellers receive, net of sales expenses, are approximately the cost to Wyndham of development. This factor, along with the planned reduction in development of new resorts, suggests a future shortage of used credits.
If you and your family have considered more credits, I sincerely believe this is the best time in 14 years to make the investment. Plus, have you ever enjoyed a stock, bond, or mutual funds as much as your vacation with WorldMark by Wyndham?
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