The news comes just a few days after the release of Wyndham's fourth quarter results, a loss of nearly $1.36 billion due to $1.38 billion in noncash charges related a restructuring of its business and lower asset values due to the recession. On the subsequent conference call with analysts, CFO Gina Wilson said the company had closed over 50 sales offices as part of the previously announced downsizing of its vacation ownership business but would be "finishing our existing construction projects which, combined with our completed inventory, will give us enough product to meet our reduced sales expectations as we look out into 2009 and 2010."
The skeleton for Desert Blue sits on portion of 14.75-acres on West Twain Avenue at Dean Martin Drive, near the Rio All-Suite Hotel and Casino. Desert Blue is the first phase of a planned 2,000-unit development on the site. Wyndham's Fairfield Resorts Inc. acquired the property for $1 million an acre in late 2005, according to Clark County property records.
With the completion of the Desert Blue, Wyndham Vacation Ownership would have about 2,400 time-share units in the Las Vegas market. The company's fourth property, WorldMark Las Vegas Tropicana, opened last spring. The company also operates the Wyndham Grand Desert; WorldMark Las Vegas; and the WorldMark Las Vegas Spencer Street.
In December, Wyndham revealed a plan to reduce its need to access term securitization markets by significantly reducing the size of its Vacation Ownership Group, a move that included 115 layoffs in Las Vegas. "We are well into executing our plans to reduce our development spend, eliminating our most costly marketing platforms, and closing our selected sales offices around the country," Wyndham CEO Steve Holmes told analysts last week. "Resizing our Vacation Ownership business will significantly reduce costs and capital needs while enhancing cash flow."
When the credit markets return to a more normalized condition, the company will not be moving as quickly as before, Holmes said. "We will not return to growing the timeshare business at the rapid double-digit rates we've seen in recent years," he said. "Rather, the future growth of this business will be tempered by our focus on cash flow generation and margin improvement."
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