Timeshare Industry relative to the Hotel Industry
May 9, 2020
Timeshare companies seen recovering quicker than hotels
May 5, 2020 12:08 PM ET|About: Wyndham Destinations, Inc. (WYND)|By: Clark Schultz, SA News Editor
Nomura Instinet thinks leisure travel will be under pressure for the next 12 to 24 months, but sees timeshare companies in better shape than hotel operators due to built-in demand from existing owners, sticky management fees and revenue from existing loan portfolios.
"We believe vacation ownership companies are well positioned to weather the travel shutdown, supported by management and financing revenues that are not attached to current sales as well as highly flexible cost structure," writes analyst Brian Dobson.
Nomura lowers its price target on Wyndham Destinations (WYND +0.4%) target moves to $43 from $62, while the PT on Marriott Vacations Worldwide (VAC +0.9%) is dropped to $109 from $136. The PT on Hilton Grand Vacations (HGV -1.0%) is reduced to $23 from $33. Buy ratings are kept on WYND and VAC.
Although price targets are dropping and each of the companies mentioned in the article are experiencing cash shortages because of property closures, the industry itself appears to be on stronger footing than the Hotel industry because of the strong links to timeshare memberships. Cash is king now!
If true, Vidanta should be in good shape to weather the current economic and pandemic crisis. We all look forward to returning. Stay tuned....