The focus of this study deals with the vacation ownership, or timeshare, industry, and is two-fold. First, it examines the passage of a criminal law in Florida that deals with the resale of timeshare properties and measures the law’s effects on the timeshare industry in terms of shareholder wealth. Second, the study examines the effect of the announcement of the sale of asset-backed securities in the timeshare industry, also in terms of shareholder wealth. The cumulative abnormal returns of publicly traded lodging corporations that operate in the timeshare industry are calculated and analyzed for both studies.
The passage of Florida’s Timeshare Resale Accountability Act had a somewhat of a significant, positive effect on the shareholder wealth of lodging firms, specifically centering around the date the law became enforceable, which was July 1, 2012, while other key dates in the legislative process had mixed results.
The impact of mortgage-backed securitization announcements of lodging firms that have timeshare operations had significant, positive effects on the shareholder wealth of these firms as well.
While similar event studies have been performed in the lodging sector, there is a paucity of event study research in the vacation ownership industry.  This research focuses on the impact of changes in the state of Florida that effect the timeshare resale market and also the impact that the securitization of mortgage-backed securities has on the shareholder wealth of lodging firms that have timeshare operations