Fitch: Finite Upgrade Sales Benefiting U.S. Timeshare

NEW YORK--(BUSINESS WIRE)-- Positive U.S. consumer sentiment and spending trends should support 5%-7% industry sales growth next year, based on 2%-3% volume gains, 0%-2% price increases and 2%-3% growth in selling outlets, according to Fitch Ratings' new outlook report on U.S. Timeshare. The transition towards cheaper, less capital intensive inventory sources (i.e. discounted repurchases and home ownership association [HOA] defaults) will temper new supply.

However, timeshare fundamentals are benefiting from some potentially unsustainable trends. 'The high level of sales to existing customers, which exceeds 50% of total sales for some companies, is unsustainable through the cycle.' says Stephen Boyd, Director of Lodging & REITs. 'Upgrade sales to owners carry high margins and suggest a level of owner satisfaction with the product. However, there are natural limits to existing owner demand, making new owners important for long-term system health.'

Fitch also views select capital-light inventory sources as arguably unsustainable. 'Fee-for-service sales opportunities are declining as stalled developments from the last cycle are finished and sold.' Some companies have also struggled to consistently procure attractively priced third-party capital partners for new developments, making it risky to rely on this inventory source for long-range planning.

Timeshare companies continue to have healthy access to the securitization markets, although timeshare ABS deal rates have increased ahead of a potential Fed rate rise. Fitch believes timeshare companies will be able to pass through higher funding costs to borrowers.

The full report, '2016 Outlook: U.S. Timeshare,' is available at www.fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

2016 Outlook: U.S. Timeshare (Solid Fundamentals, Helped By Some Potentially Unsustainable Trends)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=875284

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20151211005893/en/

Fitch Ratings
Stephen Boyd, CFA, +1-212-908-9153
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Media Relations, New York
Alyssa Castelli, +1-212-908-0540
[email protected]

Source: Fitch Ratings

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Outcrop Silver to Present at the Precious Metals & Critical Minerals Virtual Investor Conference on July 23rd
• Aimwell Partners Inc. (OTC: AIMN) Enters Final Negotiations to Acquire Healthcare Intellectual Property Independently Valued at $10 Million
• Prima Launches in Nearly 500 Kroger Stores Nationwide, Bringing Grass-Fed Beef Tallow Protein Bars to Millions of Americans