Ask RedWeek / February, 2021

How are timeshare brands dealing with the pandemic?

How are major resort brands adjusting to pandemic-related challenges? Can any owners expect their ownership benefits to change in 2021?

Rebounding from its worst year in a decade, the timeshare industry is poised for a recovery that started late last year as people started travelling again — particularly to timeshare resorts that offered many more safety and health benefits than nightly hotel stays. But with the pandemic (and vaccine distribution) still in charge of the overall economy, industry executives are proceeding cautiously while extending owner options to use unused 2020 reservations in 2021 and 2022. The demand for travel is strong, and will certainly rebound as soon as the general public feels safe.

Here is a roundup of major changes that will impact owners as timeshare travel resumes in 2021.

Final Curtain for Welk Resorts and a New Beginning for Hyatt

After 57 years of family ownership, Welk resorts agreed to sell its timeshare properties for $430 million to Marriott Vacations Worldwide, the #2 timeshare company in the world. When the deal is finalized this quarter, Welk's eight iconic resorts and 52,000 owners will be folded into the Hyatt Residence Club, which has 16 resorts and 33,000 members. In addition to owning its own portfolio of resorts, Marriott owns the Vistana vacation clubs (Westin and Sheraton), Hyatt Residence Club, and Interval International, among other companies.

Launched by the king of champagne and televised polka parties, bandleader Lawrence Welk created a family-friendly empire that included high-end resorts in California, Colorado, Missouri, New Mexico and Cabo San Lucas. As one of the largest privately held timeshare companies, Welk also managed to withstand the consolidation movement that has enabled the largest companies, such as Marriott, to get bigger during a downturn while smaller companies succumbed to the economic pressures of a pandemic that has crippled the worldwide travel industry.

Until now.

"It's definitely bittersweet," said Welk CEO Jon Fredricks, who has run the family enterprise since 1999. "After working 57 years through four generations and utilizing the Welk name, I think our team has an affinity for the name as do our owners."

Marriott CEO Stephen Weisz said he had "deep respect for the strength of the Welk name, operation and legacy" and looked forward to integrating those strengths into the Hyatt brand.

"We think their legacy of resorts and how they got where they are is a great story," added Ed Kinney, VP of global communications for Marriott. "It was family developed and legendary. We have no plans of abandoning it at all."

From a business standpoint, analysts say the acquisition will provide a huge boost to Hyatt's portfolio and branding position. The Welk resorts are located in ideal places for Hyatt to establish or reinforce its footprint, such as Lake Tahoe, Breckenridge, and Cabo San Lucas.

For owners, the acquisition could become the equivalent of enjoying Christmas in July. Over time, when all transition details are completed, Welk owners will be able to reserve stays at any of the properties in the expanded 24-resort Hyatt portfolio. Hyatt members will also be able to access the Welk properties.

Welk Acquisition Boosts Prospects for Timeshare Recovery

Marriott's acquisition of Welk resorts offsets a string of terrible financial quarters for all of the major timeshare companies. No surprise, since travel dried up in mid-March during the COVID-19 shutdowns.

Last month, Marriott announced preliminary financial results for the 4th quarter of 2020. Sales increased 25 percent from the third quarter while exchanges rose 17 percent. While far off from 2019 numbers, these snapshots give the industry reason to hope for a much stronger 2021.

Marriott's reaction to the pandemic is typical. The company furloughed employees to cut costs, switched to work-at-home virtual environments as much as possible, adopted Zoom technology to improve communications, and implemented state-of-the-art cleaning protocols at all resorts. With 2020 maintenance fees already in hand, the company pursued construction and renovation projects while owners stayed home. The company also extended reservation windows and offered Interval certificates for owners unable (or unwilling) to travel in 2020.

Marriott and other major companies, however, did not offer refunds or rebates to owners affected by the pandemic. Instead, according to our review of 2021 maintenance fee bills from several companies, owner fees generally increased for 2021 as HOAs set more money aside for reserves to cover potential shortfalls this year. The reaction from owners so far? Acceptance.

Wyndham Launches Rebranding Effort

Wyndham Destinations, the world's largest timeshare company, has used the industry pause from the pandemic to launch a comprehensive rebranding effort for all of its companies, including RCI. This month, the company's name will change to Travel + Leisure Co., reflecting its recent purchase of the Travel + Leisure brand and its existing travel clubs.

"I took the position that the shutdown was a time to accelerate innovation, not to slow down," said Wyndham CEO Michael Brown. "The acquisition of the trusted Travel + Leisure brand and its existing travel clubs broadens our ability to service new travelers interested in travel clubs at different price points."

Time will tell what ownership changes will follow this re-branding.

Brands and Cancellation Policies During the Pandemic

Although the situation changed rapidly throughout the last year, we compiled a list of the major brands, and what they're currently doing for owners who have reservations affected by the ongoing pandemic. Check the list to see if your brand is there - please update us if you have been affected by a COVID cancellation and how your resort handled your situation.

About the author

This answer was provided by RedWeek contributor, Jeff Weir. Jeff is a California-based journalist who has covered California, Congress, and the White House. He also has roots in Silicon Valley, where he directed public relations and marketing programs for high-tech companies. He is also a timeshare owner and member of RedWeek.com.

Comments (5)

    Avatar for Rubén R.
    Rubén R.
    Feb 11, 2021

    I have 4 week at Fairway Village at Shawnee Resort Shawnee-on-Delaware, Pennsylvania, but I have them into points with RCI. how is that work?

    Avatar for Jeff W.
    Jeff W.
    Feb 12, 2021

    you need to call RCI for answers for ways to use your points.

    Avatar for Dorothy E.
    Dorothy E.
    Feb 13, 2021

    Biden’s administration is banning travel to Florida. Marriott has a large footprint of timeshares that I want to vacation at. What are we to do? I have my 2 shot vaccine. I want to go to Florida and feel FREE. HELP😢

    Avatar for RedWeek Support
    RedWeek Support RedWeek.com
    Feb 13, 2021

    Dorothy: Not sure where you got that report, but there are no current travel restrictions to Florida.

    Avatar for Linda B.
    Linda B.
    Mar 30, 2021

    I have 7,000 pts to use with Marriott, that expires May 31,2021. All yr, we have been reluctant to travel, waiting for the vaccine. While waiting for our turn to get the vaccine, we have just endured 4 weeks of a father-in-law who fought a losing battle with Covid and just passed. Marriott has shortened their phone hours, and I have yet to reach anyone to ask for dispensation on these points that cost $4,500 in maintenance fees. Do you know how, or if, there is any way to handle this situation which we don’t feel comfortable traveling?