Marriott International (NYSE: MAR) announced today its plan to take $760 million in pre-tax impairment charges on its timeshare segment this 3rd quarter. Sharp economic downturns have equated to a major reduction in national consumer spending on travel and leisure activities. Marriott noted that what was already a soft demand for its timeshare products in 2008 has weakened dramatically in 2009.
A write-down is an accounting term that shows the decrease in value of an impaired asset. This is most commonly used in scenarios where an economic change drops the book value of a holding or asset below the purchase price. The excess price is documented on the buying or holding company’s account as “written down” to the value that it may be resold as. Write-downs differ from the tradition write off by remaining in the balance sheet at the lower value rather than being completely dropped.
Last quarter we reported on the 76% decrease in profit for Marriott and this recent announcement seems to be a continuation of the downward trend we’ve seen for this company over the past year. Marriott also stated that they would be discontinuing funding for construction of new residential timeshare developments as well as reducing the price of its current holdings, some of which will be converted to other uses. Undeveloped parcels are slated for liquidation.
Marriott will be announcing its third quarter financial results Oct. 8, and is predicting the results will show about a 19 percent decline in revenue per available room, compared to the same time period last year.
What this means for those in the timeshare industry, be it developers or consumer timeshare owners, is that the value of and demand for timeshare properties are decreasing significantly. Apex Professionals recommends that prospective timeshare purchasers take this information into account before making any investments in timeshare properties. Marriott International represents one of the largest timeshare developers in the industry. If they are showing signs of weakness you can be assured that the industry as a whole is suffering and that property resale values will reflect this change.
About the Author: The timeshare experts at Apex Professionals, LLC, concentrate on helping disillusioned timeshare holders to rid themselves of unwanted maintenance fees, unnecessary assessment costs, and to do away with those annoying high-interest mortgages by offering to take over unwanted timeshare agreements instantly. Related posts:
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