ILX Resorts (AMEX: ILX) develops and operates timeshare resorts in the western United States.
|Segment (Year ending Dec. 31)||2007||2006||2005|
|Sales of Vacation Ownership Interests||25.19||32.07||33.70|
|Resort Operating Revenue||20.91||19.77||19.14|
|Interest and Finance Income||3.56||4.05||4.05|
|Estimated Uncollectible Revenue||-1.10||-1.40||0|
Resort operators such as ILX depend heavily on overall economic strength for its revenue, as people tend to travel only when they feel they have enough disposable income to afford such vacations. In the first half of 2008, however, the price of crude oil rose to $98.66/barrel, up 76.8% from the year before. With this increase came the obvious increase in the price of jet fuel, as prices rose from $850/metric ton at the beginning of 2008 to $1300/ton by June. As a result of these increasing prices, the International Air Transport Association drastically lowered their profit forecasts for the industry in June of 2008. The IATA now expects global airlines to collectively lose $2.3 billion if oil averages $107/barrel for 2008, and up to $6.1 billion if the price averages $135/barrel for the last six months of the year.
The increasing fuel costs lead to spikes in airline prices, which in turn drastically lower the numbers of people who can afford travel costs. This in turn takes business away from hotels, as it lowers the number of tourists in need of lodging.
|Company||2007 Revenue ($ in millions)||2007 Operating Income ($ in millions)||2007 Operating Margin|
|Walt Disney Company||35,510||7,725||21.75%|
|Starwood Hotels & Resorts||6,153||858||13.94%|