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Time Share Business Gives Wyndam a Boost

CNBC
Tuesday, 26 Oct 2010 | 3:33 PM ET

The chairman and CEO of Wyndam Worldwide told CNBC Tuesday that he’s bullish on the economy this year, unexpectedly.

“I think everyone went in a little cautions, going into 2010, but 2010 has been very strong,” said Stephen Holmes. “All the indicators, all the fundamentals are behind the business growth.”

Wyndam reported better-than-expected quarterly earnings on Tuesday. Revenue is up nearly 5 percent this year over last: $1.078 billion in the third quarter versus $1.02 billion a year ago.

Hotels represent a fifth of the company’s business, but half of its revenue comes from time-shares: Wyndam is the world’s biggest time-share operator. Another big piece of its revenue comes from vacation exchanges and rentals.

Checking in with Wyndham CEO
Hotel operator Wyndham Worldwide is beating the Street, with Stephen Holmes, Wyndham Worldwide Chmn. & CEO.

“Wyndam is clearly a diversified hospitality company,” said Robert LaFleur, a gaming, lodging and leisure analyst for Hudson Securities, which makes a market in securities of Wyndam Worldwide.

“The hotel industry had very strong [quarter], the vacation rental business in Europe is always great, because Europeans vacation all the time. Even the time-share business—a business that some investors love to hate—was very strong in the quarter,” added LaFleur. LaFleur has a buy rating and a $35 target price on Wyndam.

“And really the upside there, one of the big items was the reduction in their loan loss provision, which shows you that the time-share funding business is much, much stronger than people anticipated.”

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