Since the economic crisis broke out in 2007, it still significantly affected most companies this year despite some forecasts that we’re on our way to recovery. For the timeshare industry, the past months of this year were still characterized by low sales followed by several owners who are trying to get out of their timeshares. One such company, the Walt Disney Co.’s during its year-end financial filing reveals how significantly Disney Vacation Club was affected by tight credit conditions.
Early on in Disney’s 2009 fiscal year which is in December 2008, the banker Citigroup stopped buying timeshare mortgages from Vacation Club. As a result, Disney Vacation Club was able to securitize only $17 million worth of mortgages during the year that ended Oct. 3. That was 88% less than the $147 million worth of mortgages it sold in fiscal 2008. As Disney said, the securitization resulted in a gain of $4 million in fiscal 2009. That was a decrease of 88% from a year ago, when it gained $32 million.
Meanwhile, the drop was one of the big headwinds buffeting Disney’s overall theme-parks division in 2009 when the overall operating profit shrank 25 percent. Moreover, the company recently disclosed that Disney Vacation Club, lost access to a long-standing line of credit it had been tapping to raise cash by selling bundles of the timeshare mortgages it issues to individual buyers.
The case of Disney company is just one of the few cases of severe hit by the recent economic downturn. During those hard times, sales were bare and many owners want to get rid of their timeshares. Some owners even hire a timeshare transfer company such as the Transfer Smart just to get rid of such property.