Marriott to suspend timeshare developments

“We believe that based on the demand trends that we’re seeing right now, that we have adequate inventory to meet those demand trends,” chief financial officer Carl Berquist said in the company’s earnings conference call last week.

The move comes as an indication of how the upscale timeshare market is suffering. Kevin Brass of International Property Journal describes Marriott as “an industry bellwether”.

"Marriott is a longtime believer in the timeshare and fractional business. Under the umbrella of several of its luxury brands, including Ritz Carlton, it was rapidly expanding the model, particularly in the Caribbean. But the company’s timeshare business has struggled for the last two years. Sales and service revenues declined 23 percent in 2009, according to the annual report. The company took an allowance of $83 million for cancelled contracts in 2009, compared to a $115 million allowance for cancellations in 2008,”says Brass.