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Monday, August 2, 2010

Transfer Smart News: Wyndham Cites Revenue Boost in Timeshare Business

Although many owners are trying to get out of their timeshare contracts these days, a number of timeshare companies are already showing revenue boosts as the economy is on its way to full recovery. One of these companies is the Wyndham Worldwide Corp which recently lifted its 2010 outlook, citing increasing strength in its lodging, timeshare and vacation exchange businesses, and its shares shot up as much as 10.1 percent.

The company, which franchises hotels under the Days Inn, Ramada and Super 8 brands, stated that it also is benefiting from a revised tax structure this year. This year, it forecasts full-year earnings per share of $1.78 to $1.88. This beat out analysts' expectations of $1.68.

Meanwhile, the full-year revenue is projected to fall between $3.7 billion and $4 billion. Analysts on the other hand had forecast $3.8 billion. According to Chief Executive Stephen Holmes, each one of their businesses was ahead of their expectations, and they felt that momentum would help them through the rest of the year.

Wyndham's timeshare segment makes up about half of its overall annual revenue. Vacation exchange and rentals make up 31% while lodging makes up almost 20%. The bulk of Wyndham's more than 7,100 hotels fall into the low-cost or economy segment which typically do not see the dramatic swings in room rates and occupancy that luxury and upscale hotels tend to experience.

Although there are a number of owners trying to get rid of their timeshares, Wyndham's domestic revenue per available room or revpar, rose in June and it continue during the first three weeks of July. As Holmes said, they're seeing a strengthening and some momentum building and they have continually said the recovery will be gradual. Wyndham predicts revpar will rise as much as 3% in 2010, compared with the previous projection of flat to down 3%.

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