Hilton Buying Back Stock Shares Amidst the COVID-19 Crisis.


Ever since the Coronavirus began wreaking havoc on Americans and the U.S. economy, timeshare owners have been patiently awaiting resolve from the resort. If you’ve been following along in recent weeks, we’ve been rather critical of the industry’s lack of action in the midst of a pandemic. Mostly because of the direct inconvenience it’s caused for those that were eager to vacation this year. Some people just bought the timeshare and are now facing quite a bit of unknown. 

While timeshare resorts scramble to sustain, many owners are struggling to pay for their permanent residences. What happens when fractional owners don’t get to use their interval in 2020? Will they be compensated for the loss or incur some of the burden from the resort’s profit losses? Will they be forced to pay either way? Although it’s hard to tell, Hilton finally broke the industry’s silence by providing a little insight on what they’ve been preparing for. 

Hilton Plans to Overcome the COVID-19 Pandemic.

When a company that counts on millions of shareholders steps to the microphone to address the COVID-19 crisis, you’d think their primary focus would be to comfort the hand that feeds them. But by the looks of it, Hilton seems to be more interested in reassuring those that rely on the timeshare industry for significant earnings. While it may seem like their “plan” to buy back company shares will benefit vacation owners, it has nothing to do with them. We mention this because several owners have already assumed this to be true. 

This is why researching online information is so important. In actuality, Hilton is processing company buy-backs in the form of stocks to keep their company stable and strong during this pandemic. It’s setting them up to recover nicely if the ban is lifted soon. Purchasing intervals back from timeshare owners to relieve them during the COVID-19 crisis isn’t the end goal here. 

Even if it was, you have to understand timeshare companies aren’t just going to bail out buyers because they can’t afford the purchase anymore. What makes the entire situation intriguing is the simple fact the travel industry is already lobbying Congress and the White House for $250 billion in federal aid – of taxpayer money. A few weeks ago, Hilton purported that they’d already set aside $200 million to buy back shares amidst the COVID-19 outbreak. But what does this actually mean?

Hilton Advocates Attempt to Explain Their Plan.

“While the situation is rapidly evolving, we continue to believe in the resiliency of our business over time, which we have witnessed during prior periods of volatility,” said Hilton spokeswoman, Lauren George. “We believe we can continue to prudently and opportunistically return excess capital to shareholders.” But what can timeshare owners expect when the risky business of the timeshare hasn’t always benefitted them? Why aren’t timeshare companies considering them?

One of the lobbyists for Hilton, The American Resort Development Association (ARDA), doesn’t believe the COVID-19 crisis is impacting timeshare owners. President and CEO, Jason Gamel says a majority of timeshare owners “drive to their resorts, rather than fly.” In other words, the numbers of those that are affected by the pandemic aren’t high enough to be considered. Due to perpetual contracts, timeshares can’t expect too much of a loss here. Gamel went on to say, “We’re kind of uniquely positioned.”

What to Make of Hilton Buying Back Timeshare Stocks.

So it seems as though Hilton’s plan is to continue collecting contractual payments and annual fees from timeshare owners while they wait on the federal government’s decision to reimburse them for bolstering their business. Since resorts haven’t directly addressed vacation owner’s concerns, we have to assume the same rules still apply. Hilton’s ability to bill for binding agreements during the COVID-19 crisis must be comforting. We just wish they’d actually consider those keeping the lights on.

Hilton Grand Vacations Inc. in Orlando is one of the most profitable conglomerates in the world. Although they’ve seen a 60% drop in share prices over the last month, they still made $216 million in 2019. Lauren George says, “[Hilton] has an ample cash cushion to ride out the COVID-19 crisis.” At the end of the day, they’re banking on a travel resurgence once the market reopens. At this point, timeshare owners will probably be more than eager to use what they’ve paid for. 

After a month of isolation, it’s safe to say all of us will want to seek out some sort of vacation. Because of this, it might be harder than most timeshare owners think to use their property. By the looks of it, Hilton seems to be more focused on their recovery and a high demand for retail bookings could be rather tempting. So, we’ll keep an eye on how they continue to “evolve” along the way.


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