Here it is an interesting article posted by the Timeshare Consumer Association on their website that I reproduce below to find it of interest as it provides some interesting facts about Marriott and their global timeshare business, the Marriott Vacation Club,
“As we all know, timeshare purchasers in the USA are entirely different animals to that of European consumers. The holiday industry in America continues to deal with the fallout of the pandemic with key markets like Hawaii sustaining big downturns in tourism, despite this there are still signs of continued sales, and of course profit emerging, as evidenced below.
Marriott Vacations Worldwide reported this week that fourth-quarter contract sales of timeshares, or vacation ownership, climbed 25% from the previous quarter to $178 million. This is a staggering figure. Although not an exact equation, the entry level timeshare in the States is around $19,000 so this would add up to over 9,000 new purchases.
Marriott only released a number of figures with the full 4th quarter results not being published until February 24th. The company did however say that it ended the fourth quarter with liquidity of about $1.3 billion. Liquidity is the money a company has after all expenses, taxes, debts etc are paid.
Even though there are signs that Marriott Vacations Worldwide has begun to turn its business around, it hasn’t escaped the pandemic’s grasp but with $1.3bn in the bank we guess they are far from worried.
Our thoughts
With $1.3bn in hand they have an awful lot of pocket money swilling around. As the saying goes “Turnover is vanity, Profit is sanity, Cash Flow is King” they certainly have cash flow!
Marriott’s regularly report that their occupancy rates are between 92 and 95%, in a normal year of course. Moving forward, if we factor in the impact of the pandemic then one has to wonder how availability will be affected when the world returns to the new normal. On top of this another 9,000 new owners will join the fray for availability.
Given that the majority of sales income is consumed by the corporate marketing budget, the bottom line profit and liquidity is fuelled by the annual maintenance fees paid by members/owners.
Marriott Vacation Club is the primary timeshare brand of Marriott Vacations Worldwide Corporation. The brand comprises more than 70 properties throughout the United States, Caribbean, Europe, and Asia and more than 400,000 owners.
So with more than 400,000 owners and if we assume that $1,000 is an average maintenance fee then this equates to $400,000,000 in fees per annum, naturally there will be defaulters but even taking that into account, the value to the business by the maintenance fee contribution cannot be underestimated. Taking this into account, it becomes obvious how Marriott has amassed $1.3bn liquidity.
Despite the fact that right now you can’t holiday because of the current pandemic, also trying to get where you want when you want in the future will be a challenge. Despite availability problems you can rest in the knowledge that the next time you receive your maintenance fee invoice from Marriott and pay up like the good owner you are, you will be assisting in adding your contribution to the already massive pot of gold residing in the vaults of Marriott Vacation Club. But as for your holiday, that’s anybody’s guess.”
You can read the original article by clicking here.