ANALYSIS - Timeshare industry squeezed by credit crisis

By Mark McSherry

NEW YORK (Reuters) - The timeshare vacation home, that status symbol of the American middle class, has been hit by a double whammy amid the global credit crisis.

Credit for consumers to finance timeshare purchases is harder to come by, and the securitization market for hotel companies selling bonds backed by timeshare deals has mostly closed its doors.

"In the last few months, sales have really dropped off a cliff -- consumer credit is really disappearing in a lot of ways," said Jeremy Glaser, lodging industry analyst at investment research firm Morningstar.

"The syndication (securitization) market has all but gone," said lodging industry veteran Bjorn Hanson of New York University.

This is a double dose of bad news for big hotel firms like Wyndham Worldwide Corp, Marriott International Inc and Starwood Hotels & Resorts Worldwide Inc, for which timeshare had become a big earner in recent years.

Wyndham said on Monday it will cut about 4,000 jobs as it shrinks its timeshare business to reduce its reliance on a shaky securitization market.

Wyndham expects to reduce vacation ownership interest sales in 2009 to $1.2 billion from expected gross sales of $2 billion in 2008 by eliminating sales offices and marketing programs.

Marriott International's third-quarter profit fell 28 percent as timeshare slowed. Marriott has warned that 2009 will be tough and that its timeshare investment spending is expected to decline to reflect weaker demand.