According to the Mortgage Bankers Association, (1) an incredible one in ten mortgages in the USA are now one month or more behind in their mortgage, or in foreclosure. This was up 7.3% from a year earlier.

Florida continues to share the brunt of the foreclosure crisis (look up by zip code here(1A)). The statistics specific to the metro Orlando vacation home market are difficult to assess, but they do appear to be on the front line of the foreclosure crisis.

USA unemployment has surged losing 533,000 jobs in November (2) alone.  This was the most in 34 years. The unemployment rate also increased to 6.7% according to the labor department. Many economists are predicting a 8+/-% unemployment rate nationwide (3) by mid 2009.

Unemployment is also hitting Florida hard, especially in markets such as Orlando where the hospitality industry has been laying off thousands of employees (4).  In addition, metro Orlando has begun to see systemic drops in the number of tourists visiting the area in November 2008 (5) .

There are rumors major Orlando hospitality employers may be making larg cut backs in January 2009 which may only add to the overall local economic problem.

Yesterday Wyndham Worldwide announced it is laying off 4000 people nationally. Previously, Westgate Resorts also announced it is making major lay offs. Both companies are major employers in the Orlando hospitality market and vital to the local economy. In addition, hotels around Orlando have been quietly laying off hundreds of employees every week and some major restaurant companies have even closed. Other hotel and timeshare companies based in the Orlando area have yet to publicly announce similar cut backs, but rest assured, they are underway.

Hospitality corporations in the Orlando area are cutting back on previously sacred items such as Christmas parties and even birthday cakes for long term loyal employees. Some theme parks according to Reuters may also be looking at significant scaled job cuts . Hotel revenues recorded a free fall in November 2008 in the metro Orlando area and everyone employed in hospitality is now feeling the pinch.

Convention groups are cancelling at record rates, and the ones that are coming are booking very slowly. Companies who were about to book groups in the Orlando area are hesitant to do so, as they are looking for ways to trim budgets.

Orlando’s largest international market, the UK, has seen the British Pound drop like a stone and the cost for a British tourist to visit Orlando shoot up 30%+/- in the last 3 months alone. The UK booking window for the peak summer months is typically done in January. Orlando can expect to see a significant decline in the number of British for the summer of 2009 as the UK economy falls apart. The British will most likely go to destinations much closer to home such as Spain and within Great Britain itself.

All these concerns indicate that the vacation home industry will also get hammered over the next year or two. This is of particular concern to us.

There is no sugar coating this scenario. The world economic crisis impact on the Orlando hospitality economy is having a very bad effect, and about to get worse, much worse. We anticipate the worst economic downturn in Orlando possibly since the great depression, but then no one can predict the future, including us. We are incompetent non professionals just expressing an opinion.