Financial Troubles Hit Timeshare Companies and Seeks for Relief

The financial crunch caused timeshare companies nowadays to announce write downs. This decision frees them from suffering from the ensuing financial difficulty they have with their timeshare businesses. This is akin to the decision of timeshare owners to seek for timeshare relief and get rid of their packages instead of keeping them during this financial breakdown.

The recent financial crisis revealed some timeshare companies closing down and others writing down some of their assets. Starwood Hotels and Resorts Worldwide, Inc. disclosed their $362 million write down in time with their announcement of their fourth quarter earnings last Thursday. The company is cancelling the construction of some of its timeshare resorts. The amount of a raw land was included in the write down. They will no longer use the land which they intended to use for timeshare complexes. The plan will be cancelled for the meantime.

Vasant Prabhu, Starwood’s chief Financial Officer, explained that they found it a beneficial adjunct to include timeshares in their business because of the good return of investment that timeshares was providing the company. It also offers them a good spread of their capital. However, with the financial crisis, the economy has seized to be receptive to the timesharing system. Nowadays, timeshare experiences a slowdown of its business. This made capitalization for timeshares not too viable causing Starwood to forego their timeshare business.

If the crisis will continue, timeshare owners will also keep on getting rid of their timeshares and timeshare companies will also seek for means to lessen the effect of the crisis to the point of writing down their assets.