In these days of economic downturn, reports of businesses struggling come from all sectors. From banking to investment, to small business, to technology, and even to travel: almost no industry is untouched by the struggling worldwide economy. While consumers are already feeling the strain, timeshare owners may need to be especially aware as Marriott reported a first-quarter loss.
Marriott, which is the largest chain of hotels in the United States, released the figures today: a loss of $23 million dollars in the last twelve weeks. This massive loss equals about six cents a share, and is a stark contrast to the profit of $122 million they put on the books at this time last year. These overall numbers include the individual gains and losses of its many hotels, including popular North American chains like Courtyard, Residence Inn, Fairfield Inn, and even the more upscale Ritz-Carlton.
It is not a completely unexpected turn of events, as the travel industry has suffered as more people are pinching their pennies. With fewer people choosing to travel, Marriott saw a fall in their overall revenue by about fifteen percent, which took their quarterly earnings to a meager $2.5 billion, a figure that does not even include all expenditures. Because of this, the hotel giant has adjusted its projected earnings, suggesting a decline in profits by up to twenty-five percent over the coming year.
In order to compensate for the loss of revenue, Marriott has already undergone a number of cost cutting measures to help soften the monetary blow on its worldwide operation. So far, Marriott has reduced its level of investment as well as cutting employee costs by shortening the hours employees work per week as well as putting a hold on new hires.
While these decisions may be smart for Marriott’s bottom line, consumers need to be aware of what this could mean for them. Timeshare owners in particular could be hit especially hard by these cost cutting measures. With hotel staff working fewer hours and fewer assets to plug back into renovation and service, timeshare owners could see a decline in the quality of their property and a reduction in the services they have previously enjoyed.
Worse than that, in order to help compensate for the lack of funds needed to maintain their facilities, Marriott could hit timeshare owners with a jump in maintenance fees over the coming year. After all, Marriott also reported that its timeshare operations suffered a thirty-one percent loss in revenue according to the most recent numbers. Since maintenance costs cover normal upkeep expenditures as well as less routine improvements, the fewer people contributing fees, the higher the fees have to be for everyone else in order to maintain the same level of service and investment back into the property. With fewer perks and a higher cost, timeshare owners with Marriott could be in for some hard times themselves.
Marriott has not specified any particular cost-saving measures in regards to its timeshare facilities, and it should be noted that investors still see Marriott as a viable company, as its stock has even seen a comeback despite the most recent negative revenue projections. Still, with official word suggesting that the hotel chain may not see any real profit growth for at least a year, the possibility of extra charges for lower quality service is very real.
Timeshare owners at Marriott need to watch their rates carefully, and should consider the costs against the quality of their timeshare experience. With the rest of America downsizing, getting out of a lackluster timeshare is not a bad decision when times are hard.
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:
In addition to what you have written, you really should look at what is happening at Marriott’s Aruba Ocean Club. There is a major effort by a large group of owners to hold Marriott accountable for the building which they sold as their own and turns out was bought from a defunct builder after the building was exposed to the Aruba environment for over 5 years.
Many efforts by the owners have been thwarted by MVCI, such that legal council has now been retained in Aruba, and potentially in the US as well to go after Marriott. This was not the approach wanted but MI lack of customer service and couldn’t care less attitude have driven the owners to this. Also a 35% increase in MF and 2 assessments over the next 2 years has people angry.