Together with the purchase of Aruba’s largest tower, Starwood Vacation Ownership [Starwood’s timeshare unit] announced the development of The Westin Ocean Villas. This project was going to be one of the most exclusive timeshare resorts in the Caribbean region. Starwood prepared adjacent terrain to the Westin Resort for construction. The project included the cutting down of several decades old trees which became a controversy with some environmental organizations on the island. In November of last year I wrote about this project and provided a link to Starwood’s site, which now is dead.
Today I learned that Starwood has stopped all developments altogether. I would be speculating at this point as to why they decided to drop this project. In reality, Starwood posted its financial figures last month which wasn’t all positive. In fact, the resort chain lowered its forecast for 2008. Furthermore, in their annual report it expects a drop in demand for their timeshare units for upcoming fiscal year. Apparently it was hinted in December of last year in Aruba that the project was in jeopardy.
Constructing, selling, managing a timeshare resort is an investment for the long haul. Investors who put money into these projects need to understand that return on investment won’t be reached rapidly. In other words, when investing in timeshare resorts, you need to be able to go through with it, through economic expansion and contraction. Despite having an economic background I don’t understand this move completely. On the other side, I’m sure smart people within Starwood, who know much more about this, decided it is in the company’s best interest to stop the development. Perhaps the numbers didn’t add up for Starwood.
I’m a positive individual who likes to look ahead. There is a nice piece of open terrain right at (the entrance) of Palm Beach ready for development. As always Marriott’s name is mentioned as a possible developer. Marriott has managed to build many resorts and commercialize them highly successfully in Aruba. Reportedly Marriott has inquired about the possibilities on purchasing other pieces of terrains at Palm Beach or Oranjestad to develop more units. I’m not sure Marriott inquired about this particular terrain.
Another sector which is eagerly looking for prime land at Palm Beach is condo investors. Coming months is going to be interesting to learn whether Marriott or another party decides to acquire the terrain.