Earnings call transcript Q4 2022

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Operator

Greetings, and welcome to the Marriott Vacations Worldwide Fourth Quarter 2022 Earnings Call. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Neal Goldner, Vice President, Investor Relations for Marriott Vacations Worldwide. you. Thank

begin. may You

Neal Goldner

Terry, and Earnings the today Call. and and Geller, Melissa, Chief President Fourth Officer. Financial by Vacations Quarter President Tony Officer; Executive XXXX I Chief Executive welcome you, Vice Marriott and to Worldwide John our Thank am joined

our need everyone to laws. securities in of by to cause as These are subject that I risks could our not and are described federal today comments. to our those statements filings, and facts under remind numerous future uncertainties materially historical differ implied are expressed many which comments SEC considered forward-looking statements or in results from

well Forward-looking effective updated the statements we website as and added when that we the as on release our made be presentation our call this issued as last only will comments are that actual press night not to unfold. and morning events in this

to information. the make financial call, non-GAAP references will we Throughout

non-GAAP can in of You as referred and our as Relations release our the a remarks website schedules well Investor to page our find attached ir.mvwc.com. press of to reconciliation financial at measures the

what Vacation year, As earnings sales and $XX release provide this benefit. in our our as reported Marriott, release our in The night, would result our across million show aligning we results a the last recorded saw revenue the an terms Sheraton to of for last brands of Westin contract have reconciliation been quarter. schedules you a earnings Ownership additional without to fourth

to refer results million alignment, to the after EBITDA. our adjusting discussion benefit the Our including commentary today for $X will and adjusted

CEO, to turn John my now Geller. call the it's pleasure over that, to With

John Geller

felt vision to time for of and thank I around joining potential for X I'm earnings fourth with growth months a role possibility. The past the as first lot Thanks, a like the leadership have me stepped for a team strong XX of years full call. you when us. our and just ago, Neal. into Good welcome and company over quarter CEO. you joined I've morning, this happy ahead

travel travel If to year. survey, already leisure nearly In following research surveyed is pre-pandemic. than people that trip, there conducted is this would said an of them from the different their of said, trend consider a excited XX% are year, leisure extend remotely working looks That as the it destination recent you've know Recent did of and XX% XX% vacation been while way begun this researching industry, optimistic of they continue. travel to travel we to on view length expected respondents this a a revealed you trips. have

deliver. travelers So teams us? It ever what that resort more stay service does our our that spacious unparalleled mean our for top on-site villas visit and than means destinations, the experience that can in

averaged XX% With for the strength demand travel, leisure we've we've for occupancy seen accommodations. leisure the the nearly year, illustrating in high continued

members by generated to over $X.X XX,XXX million growing Ownership active sales of XX%. our free and also over flow Vacation business, delivered interval We cash XXXX. new added contract in adjusted And we owners billion while of $XXX

year, continue to This we expect momentum. that

technology, investments will on forward. people in strategic our business experiences products, We our propel customer build that and

and I'm members, which we vacation passionate guests in unparalleled and communities continue the owners, we the to report and dedicated delivering the to around proud and communities day we strategy impact to have formalizing new experiences we to operate in the our every a good we're positively being recently our ESG published teams serve. environment We which world that are to and live also say ensure and stewards work. we

our have students Weisz the Endowment, we Since University hired Management at of Florida. to while of providing scholarships that former College the proud hospitality than CEO. is make support Rosen the establishment our XXX development investment honoring to this was of at of leaders, able I'm the Central UCF legacy example One the future Stephen to and very company more of graduates, XXXX, such the Hospitality

a ended strong results. note. Marriott Now prior with the Pacific year Vacations, XXXX a moving to XX% fourth and compared very Hawaii we over on great XX%, was year Occupancy the doubled for for running occupancies year. while to Asia our quarter, was the

year-over-year levels. by With XX% we the our just pre-pandemic occupancy, with fourth strong grew basis, below towards on tours quarter a

VPG expected, remained than XX% declined As higher XXXX. year-over-year, but

desirability fourth offerings. the sales business compared our our contract and expanded the the to our model As year EBITDA resiliency by XX% a adjusted margin, product result, and of prior quarter we of the grew in illustrating

booking Last the significantly booked Vacation vacations year, for These back, ILG in ended to higher brands. we our having the for continue with and XXX,XXX more rates, consumer than our Westin ability allow predictive in XXXX, X/X a across our roughly year customers Club modeling their vacation and improve Sheraton and successfully already to when goal the opportunities implemented those enjoy campaigns. to packages was provide our and acquired resulted preview response of initiatives online we pipeline, engine access previews in for XXXX. with expanded we Marriott, first direct owners Taking marketing step

offerings of we've then, which we Marriott with working year Abound last set systems launch and by and Vacations. the up technology fulfill to this Since to the achieved our been expand promise,

brands multiyear our Vacation leverage to digital our and Next help potential. program, growth through our we to expect strategy forward unlock Looking

more efficiencies service line available how top market, expect our this options us acquisition resulting products in online. allow sell service make to costs in and satisfaction we owner increased lower create customer we and growth, We will as

business, Ownership to allowing exchange beginning Later use to the Beyond, Vacation a Hyatt this called Hyatt Vacation ownership available tours galleries Club. to Hyatt owners year, cruises, resorts plan sales that all hotel with and summer, Hyatt stays. and Legacy expand new Welk Legacy for vacation option them experiences rebranded announced be our and this their we we integrating January, of we Welk. progress In our great will make continue to In

The this Marriott branded announce Charleston, historic resort month, I'm on-site destinations in entitled steps of to parcel city of for also XXXX, owner make one excited a new a scene, City walkability charm. owners. the fully culinary Located Charleston the intend land new of will we XX-unit Carolina. destination acquired by earlier easy of we from sales early city, as develop its thriving great ranks continuously the including South a Market, heart Charleston the southern for gallery. Overlooking to resort our and a new top this that

our Third-Party In signed we the the business, year ended million year-over-year new driven late XXXX. nearly improvement affiliations X.X interval by & with XX% members, a Management Exchange in

which well sold Management adjusted April, our in in by was last increased and the XX% exchange at results management driven Exchange Third-Party EBITDA average increased & fees increased the Americas, higher as as Aqua-Aston. Excluding VRI gateways fees business of quarter,

should for dozen a the you the amount role? asked and CEO turning know, into to of they me Tony significant of what guidance, As objectives had step number call as to leadership a our into and XXXX and investors input Before discuss the have I've over been over way. senior I a along fourth a years our position quarter expect results in strategies

us. remain I I excellence we at operational delivering committed our short, from our in Investor of expect laid goals customers that So the deliver the last out against Day. also lever expect to to

about growth. into opportunities Long us core can add to efficiency to the find And while long-term leisure-focused diversifying model, I of never the new we to The and our data top business exciting drive look growth business our power want businesses our optimism ways finally, core term, greater. analytics that to of expect remain by where line for the are timeshare our capabilities. ahead improve unlock to I us has leverage through exchange been adjacent my future advanced and to lie and we

I'll over to the turn that, call With Tony.

Anthony Terry

morning, balance as results, Thanks, strength good everyone. I'm John, going our as to outlook. position XXXX fourth and sheet review our our and the of well Today, quarter liquidity

mentioned earlier the Marriott last the of the Vacations, aligned terms in Abound year by quarter, in the our I Vacation Marriott and brands. launch we unification of Ownership contract connection products our interest sale across with of the Marriott for As

contract and EBITDA. the result, of brands. change our Vacation to of Ownership As following million resulted quarter recognized revenue additional of an acceleration period, million for and a the adjusted in the branded recession fourth being Marriott now Sheraton in revenue products the $XX consistent This expiration Westin our benefit a sales are as with $X

alignment completed, do going this not material the we any from impact expect With forward.

compelling. Moving value Ownership remained and to our demand strong on quarter, product our capitalized Leisure these a Vacation product. travel core We in contract Vacation the grown driving segment. the trends contract fourth year-over-year ending in quarter with Ownership levels. remains million continued proposition fourth the sales impact sales pre-pandemic excluding of in $XX have increase of And just illustrating shy XX%, tourists for from demand the our hurricanes, the would the XX%

adjusted the over sales, owner remaining their before With profit the we the In contract $XXX again, million basis our owners higher COVID to than expired points quarter XX%, development cost XXX XXXX. to occupancy use expected, points last compared as grew increased of and as rental prior and to year the year. end growth continue business, XX% in explore margin they rose in at was,

substantially, up packages negatively preview for renters. helped impacted sales, availability addition, which In contract fuel were but

million. Ownership and The XX% result, our declined increase a rental segment X% fourth well. Ownership a key in in business, quarter, revenue available As stickier parts year-over-year by in of transient to Vacation again, offset declined rented the Vacation $XX performed partially keys per our profit

financing business $XX Profit year-over-year to increased to million. while resort X% profit from million, $XX our XX% management increased

receivable line quarter, experienced levels portfolio in well perform defaults in notes with delinquencies also the in Our and continued largely to with XXXX.

our million margin the quarter, fourth points XX%. adjusted the the For nearly hurricanes excluding grew to $X basis Ownership XXX Vacation improving from with XX%, EBITDA segment impact in

active we XX% prior driven segment, Management in members Third-Party new by signed to increased & the the year, affiliations Exchange our In late interval compared XXXX.

from continued ramp average Aqua RevPAR accounts increased Hawaii. expected, by driven our transactions in Aston improvement the decreased per as as In new XX%, up. business, revenue While member to

the of results to & and Third-Party compared Americas, XXX increased Management EBITDA year points at the XX% increased VRI basis Excluding prior margin to our adjusted segment XX%. Exchange

was the Finally, unchanged largely to year. corporate G&A compared prior

increased result, impact leisure-focused a by of hurricanes continued the year-over-year, X% the points, leisure excluding travel and improved strength model. the demonstrating our EBITDA basis business of demand the and margin XXX adjusted As for

strong demand In in our portion a notes The Moving of $XXX we significantly X.XX% common revolver, of from million used to investors. stock. oversubscribed, the our was $XX sheet. December, And reflecting issued secured due down convertible repurchased pay notes January, We redeemed XXXX. XXXX. our of senior million proceeds X.XXX% offering balance to due

As into the we day the transaction where launched this effective of notes issuance, economic increasing our share, part to trading offering. per a the over spread conversion on the call double $XXX price we was of entered stock

of million Pro $XX quarter with securitization cash, $XXX ended eligible fourth billion forma for revolver. million receivable capacity the gross liquidity, the note $XXX in for our redemption, and of we million of available $X.X under including notes

We $X.X it rate average interest also an X.X%. of billion fixed of with had debt corporate of at XX%

adjusted Our targeted EBITDA maturities debt net we the ratio was until have debt X.Xx range, the X.Xx our corporate to leverage to Xx XXXX. within end at no and quarter of

also under X.X% advance and issuing timeshare fourth We receivable weighted of XXXX the market's the in an at million rate the owners. notes overall in the completed $XXX our XX% of illustrates our just average securitization interest rate of continued quarter, belief strength second of

a Board continue also common quarterly $XXX of we of $XXX shareholders. to repurchased just return increase of under authorized per In amount cash quarter, to our price an at stock fourth dividend. Directors average substantial the in We our share, of million XX% and a

For million shareholders, $XXX to more more million including our than the repurchase than year, we of stock. common the $XXX returned of

very to concerns a was surrounding COVID-XX XXXX XXXX growth and on pandemic our back as strong for Moving company people vacation. year got began our to the on wane guidance.

and despite As our we any we've VPGs sales to in packages. growth XXXX, X% this targeting coming preview weakness seen potential from contract normalize in-house a to bookings X% in recession, and to continuing largely with are concerns enter and not tour year demand date, about forward growth

we above fixed marketing this continued digital remain efforts product XX% our volumes, sales ability benefit the development costs, to for low higher to margin expect and these leverage and our of year. costs, With transformation

alignment and benefit owner profit expected the in propensity expected While is to due lower utilization. XXXX sales to higher offset driver and of to sales expected the year, for of to be increased are QX unchanged largely recorded do financing compared the to year the this prior more expect contract to growth Vacation expected contract higher though to by Ownership than we excluding in preview a it are Financing cost funds. XX% the we higher segment, in profit is be be increase year, be primary rental as

projected adjusted new network segment, continues higher to market. the to are remain member, the For is X% to and appeal revenue Exchange Third-Party this stable, term, affiliations X% to & Longer per relatively platform grow to driving to our our members a expected year. strategy EBITDA and and to and expanding include Management properties target interval benefits broader adding

We expect leverage well to up us focus to business which year, advanced as ILG work our and data more integration enable initiatives Hyatt to resources capabilities. and our improve allocate as wrap our self-service this to on our analytics customer will

XX% These costs, in XX% labor corporate year-over-year initiatives, G&A result combined increase costs. higher to with in a could

benefit at EBITDA midpoint recorded billion result, the a of $X expect As to the million XXXX. year-over-year excluding alignment $XXX in growth year in adjusted million guidance, we X.X% to our generate we this implying $XX

$XXX and currently free to million with excess million inventory. inventory it new material year low-cost lowers no our continue have benefits adjusted We the repurchasing XXXX, $XXX plan Moving though for we of costs. in to generated product the and ended flow flow. reacquired inventory commitments system We XXXX do cash of cash as

will resorts where manner add a preferably a to We to do look this and new we'll for continue in leverage center, opportunities can efficient sales to continue capital possible. where also we

We free to and this for million be expect ratio be flow between XX%. $XXX $XXX cash EBITDA approximately million our adjusted year free our conversion to flow cash to and adjusted

use In of for cash absence cash acquisitions, continue organic to flow compelling best free it will shareholders. for strategic free to We our acquisitions. returning growth our excess use of flow or remains the

a strong summary, to the was fourth year. close quarter In the

from leisure demand investments growth. economic digital and travel growth that brands great As our high the uncertain despite our XXXX benefit we the products in position and look in we're believe forward, supporting outlook, I and continue initiatives in with a to in to

Marriott Worldwide. in always, interest As we appreciate Vacations your

to we'll with answer that, And be questions. Melissa? your happy

Operator

[Operator Instructions].

of Montour Barclays. with first Brandt Our question comes the from line

Brandt Montour

contract sales the growth just in implied on So contract your first sales. guidance and

have And the Just you little that I you just bit was, question that that should to between a VPG said, want 'XX. XX% I'm at was above quarter you getting what to VPG. in fourth number, hoping and answer down could break is the because on like And tours we consider you can relation contract going overall need number, that if Or that sales to, a that that's all that is tour that hit VPG little new the bit level? up sense? from that lift makes the obviously, growth normal maybe implication growth to

John Geller

data Yes. Brandt, thanks here. for the question. I'll give you a couple points of

VPG the You We of talked would see of from VPG not we back stabilized to bit line, you start quarter we about then VPG. better as go the quarter fourth declines VPG. little seen for a in earlier. trending fourth expect first have did had We the quarter some that expect kind straight continue do slightly. but up year, through a to we'll necessarily the And

expect contract right, that sales going I it of for 'XX the going slightly about the and pent-up demand. that what's we're in when from yes, last a On tour slightly basis, VPG, to the year, year. the your because how is look we on But we right a the year-over-year lower of to meaning first think VPG strong we with first VPGs quarter. we're do is drive at with to But now. year year-over-year growth probably really it up half tough your were saw lower all with half Now full comp trend be said, so thinking last what you fourth obviously,

Brandt Montour

bit more the ago? and could And there continues little XX look go leverage, a to generating you're M&A on we which, the cadence. going John, that on sitting about we cash it on year for there? and down a months you to and Is using into share Maybe idea that, down really go John deeper. touch it's warmer Any at of further, flow color free like looks of, out point Tony, thinking maybe be you would out or market you this M&A next buyback even bit little looking that at strong that going sort year-over-year opportunity great. Great. how you're your Okay. look on versus cash felt the depending Are here more just if

John Geller

Yes.

those the views continue number we've back brands going go as opportunities strategic about, an we not Our again if look or once haven't something that up leverage in unbranded, big it's perspective to our from opportunities to is side, We're to acquisition changed. talked on size the of big Vacation And it right right? the And where at -- is Ownership are fit, can in those. not and upscale.

we'll look at So to but continue that -- opportunity.

I and your by now bringing and as and in lot, through first, learned can that owners value and go we to to for we've with creating the adding owners map a vacation. think you on create really flags efficiencies work opportunities more the wealth ILG the driving

at So to continue to we're that. look going

business, from VO and or can And we And scale, that side of run to going really travel the exchange something grow for an business. either talked business see there's do there. look we're going that's that's going adjacent capabilities on build the to me if the look the today, travel then of enhance of whether about and leveraging a We're offerings on potentially to type stuff We're the side into our we're going expand to exchange offering. the We've core too making we're or the opportunities even side there at platform. continue to not businesses. something our to

return we'll excess opportunistic that, we'll right capital we've But the back things. we if there see So shareholders. to said, like be of short

Operator

Credit the from Ben of comes Chaiken question Suisse. next with line Our

Benjamin Chaiken

longer and one One just term. term quick near

mentioned XQ in heard a was in was but think January. that owner the remarks issue, you 'XX So if expire an is dynamic points you occupancy. -- headwind that from not My rentals prepared that as my think well, the a FY those I understanding was correctly, rollover higher I would but understanding -- I an issue in

open that can that all? So did at persisting into we quantify you that headwind is 'XX? did slightly? why Like up XQ [indiscernible] And you

John Geller

Yes.

So allowed a in you less occupancy, occupancy it's it point hasn't and in nothing with right? was with you right? has owner gotten now had It level. better first recovery, 'XX. more rentals, do more the normalized less quarter. owner had you're that, owner QX the occupancies, really back quarter general in a general, of 'XX, owner to back the if just normalized in of drive And really occupancy and to last coming from also Omicron go you to just And -- first quarter us time, to back But just at the the expiration. Omicron first opportunity So

So first outcome there. you quarter bit last year little better gave a

normalized more much First year, occupancy, the inventory got just to contract quarter packages drive using about we you're packages. higher to and our this and owner sales. package quarter in back We're We've pipeline. rental talked first our

We otherwise was year second the owners those the So making that with points, that could as last half rentals were the we all of prior [indiscernible] rent did easier COVID available point. we of right? year usage to for we we for an because in related have COVID will inventory and normalize, have comp arguably year, talked as

where and the So easier I second that's -- quarter-to-quarter. comp, we're to now year going year, of half or guide second not think much

being rental talked about XX%. about Tony profits the full For year,

Anthony Terry

expire I'd the half And into those now points people in you dynamic on half using And year the COVID second that year mentioned. And our last year, happening did of we have the little do other John that were is the as we of second those last the just year year, those add confirm points to of use also the owners that, Collection. a this end at use towards as points get the that Explorer more. COVID

cost first more I'm sorry, half was a if did that half, that as had or a they points of more, like in mentioned, John they So on Explorer well also but we -- means the in not higher as the explorer availability bit traded little the well. they're a occupy, the little little using COVID cost year because it bit the rental the only for explorer but second

Benjamin Chaiken

your just I do got step example. back goals feel target? XXXX feel on contract sense. makes the lot I of Day context for if you it. EBITDA it a on sales? sales, in Investor is contract how And of ask guess Do we like stretch? I either That you that bit, little or Or the a you guys And about right get

if reach in of as you of mentioned, a And guide, Investor midpoint I to you 'XX an would the goals. that bit midpoint the suggest contract 'XX of X% sales. use think and acceleration So 'XX little that those Day the

about kind just the next how the cadence from years curious you of guys So here? couple of are about over I'm thinking

John Geller

changed. you Yes. a We out lay necessarily when for be less, years, -- little year, you're feel we some like bit out. your Obviously, it's X year, laid goals each given years the it's growth to has a never straight this great about line, Nothing that going might It's look on time, going go of example, growth at kind this right? because plan and no turn you June necessarily we interest we'll -- is our have or when through substantial last year, side, So we much will expect around get that business but the the as financing over as there. not right? didn't growth high, financing and really any growth rates we

example. that's So an

same contract side, sales thing. the But on

we contract Tony we've with continue about in bit right, partnered us drive being growth, to are We technologies VPGs, efficiencies, And -- as a higher and We're that our in the to sales continuing going G&A Salesforce. higher. about talked talked past, little marketing. invest, help

difference depreciated of it, if IT, free we being in right? we on meaning is right? know costs. you therefore, capitalized out a the will. more cash so of built CapEx, your it about So came were the the under G&A shop, higher flow bit And people GAAP, difference build because and that I you the side, IT ask historically little a being And The

last where use to to service, those GAAP. of want the As IT the over The is an less a want transformed business qualify of we've capitalization as costs from we you years don't difference an and from accounting software perspective think Salesforce. we go, more couple under like about for partner perspective and

be have higher of you it's X-year expense. you period. -- million because nuances going thing $XX your different. go right? per slightly out to right type to to right-hand lower. it's might I spend, a Investor I'd of it's we're but is over million $XXX million, doesn't -- if But So cash bit you really year terms are even right, se, at back look right, -- Day, it through million the run a $XX guiding little the what the and our mean, $XX left-hand, of flow to a it if where that, So point in CapEx impact And this year,

and side create that with going growth the and more to better more contract the and that those going sales get to and efficient of drive type opportunities leveraging forward and marketing unlock that's customers technology, But sales. on target

numbers the I go to we the we're back to So we move part of good yes, here. about that June. in Investor back out forward feel question, And excited answer laid very guess your first Day

Anthony Terry

period through XXXX that. that on normalize we XXXX, we one in we do thing John that the is whole Ben, And did that said bit a expect to little to mention I'd that VPGs doesn't mean tack what for

the So again we year. to start growing after do current that expect

as well, development that margin. driving at we So look that's something

Operator

[Operator Instructions].

Chris Our Deutsche comes Woronka next the question from Bank. of line with

Chris Woronka

more anything in -- need -- in question, a you anything wanting extrapolate first prepared development or we should forward? small do Charleston more just I going thing is you and the willing So read comments, a Is John, obviously, to that of should of great there a know in think for from market. bit parcel land terms mentioned it's that development. inventory? little Or we into -- that? you're do Or you a

John Geller

No.

Tony growth. hit we're do inventory we with And sales excess over contract on, million that value. down That's future of have Just $XXX as to the at about still. book looking

as development So probably cap -- local takes we that of big So development, and XX right? have a about in but do in to We how limitations there's unit loved Charleston would of time, XXXX. kind there. terms that's bigger talked

be So to property. it's as to going forward we a and going great more hear would go this you're I opportunities things expect year.

is to of to some a I And going if expect some to. units be years to CapEx. next that Now Charleston much it's we've if what years development, that CapEx like here look couple I stuff, XX they're over inventory take terms to we'll deals, done But of isn't development. few like do it's ground-up of with going projects, in get on said, the would at historically do bigger capital-efficient work partners

a of good got we've So centers. at sales new we're that things pipeline looking in new destinations will bring those

in like pretty $XXX a out got it 'XX delivering year, as get that million, each 'XX, sounds burn that off your 'XX, when quick. burning right, you're inventory $XXX we about you'll lot million because we to $XXX but thinking sheet -- balance So be million, while through

Anthony Terry

sales, XX that's that's And of that. X.X for units, months the if

project. smaller a that's So

of bit and we which well. as do events with sales look through to We more We distribution, us business little projects, newer in that some but our will going a already add market do we distributions forward which with contract along on like. growth will come help whatnot,

Chris Woronka

-- follow-up, Tony, down any a mentioned as think putting just sure kind rates higher more financing to to there is is the flat try the a of that payment you encourage the propensity that the as or seen you profits offset less expectation. down people in Or anything stays guys to And change same? payment I Have level? year-over-year Great. you then keep to and make are finance doing

Anthony Terry

we That program last you're But low through probably us year, anything financing. well for place. us keep the program the XX to down in with a in to with has and the we I as we months. do to there. of encourage to as XXs pre-COVID, range. different seen people XX%, financing were finance closer have in percent Yes. And with out been And XX% aware, were place at payment a haven't the

we where because gotten be XXs low back to to be. So want We again endeavor to quite for a the profitable we us. it's want haven't in

want training propensity keep through we doing up can sign to that everything to But make paper. right for So a we we now, the program to get and through sure people financing are as going sales forward. we also of

keeping in with increased rates to We've to financing but and been seeing point-for-point little a pretty, as people take what the general, steady. that last pretty year, don't upped well. have helps We you're our them they market bit interest go our in

Operator

next line Securities. Our Patrick from Truist question the comes Scholes of

Charles Scholes

Tony, little you or year? the a percentage-wise granularity are more packages by that much period if like you John about rates year-over-year, for it tour in share? are this sounds can could whatever growth the but up you wonder give you I How

John Geller

package talking tour pipeline? You're about the

Charles Scholes

you mean much how Yes. I up versus I'm in past, that anything statistics on the the you've share if can is comparable wondering given period. similar.

Anthony Terry

XX% a tell you vacation, We're can want the and/or in higher ended options first package balance than can into we Trade the a Bonvoy get maybe then between our do for developer-owned make place that to previous the inventory. packages inventory. we it's our to is Explorer thing I Yes. that do, at so do on get can package we if through tour owners the we -- look want you I so that our sure owners And you including year year is different the inventory you or that always -- tell this it, pipeline, did pipeline. Tony. put

right? then So that we that's always make aside that want we packages inventory for and inventory. we excess, rent what preview [indiscernible] put to And the sure

game. put we believe in. balanced to So more we this we to could packages ultimately, if had those starts inventory more packages become And sell it

started actually within and optimizing marketing we've and pipeline So our stratifying cost. package it's guess, customers after to cost marketing the our the, that that us package helped most profitable production really we're pipeline customers, going really in I the and

Charles Scholes

bit follow-up that. a on Okay. little And then

of to be up sort visibility in somebody time tour the typical Let's would say, as package of December think of package XX, the or lead What [indiscernible]. booking your kind pipeline? I'm you're for pipeline. in about trying

John Geller

on I even right, somebody talk for lot little of have what the Yes. on package, have looking bit of it and they're because is demand pre-COVID, I and of vacation farther. longer because not people they right? a vacations stats, buying little some these or to X, we sell probably more months, would about books, that people Historically, a Patrick, packages, next pent-up I remember, more out used some. X current XX their maybe but we next a well, So maybe that, a their the bit don't mean -- expect was

they're But happened I multiple sooner. is think plan right, people bit getting more a little bit a on XX vacation. months, these packages, expect that I activation a maybe vacation COVID activating during bit they're coming didn't out, buying and would have little that longer, on normalized what's and little but basis, and probably them vacations, to how of probably and maybe on think people X that's probably a kind getting less, to about

Anthony Terry

the have automated in more generally forward. time are trying going that activate sell they we make packages to And to. to those the XX-month think do so I want people we're range, if And

Operator

Instructions]. [Operator

of question next Kelley line comes of the from Shaun with Our Bank America.

Shaun Kelley

wanted maybe or years drill few of next the to behind year, we as assumption sort of, ask your, the What's kind sales. VPG existing impact flow? what's And as versus this Just of new of versus member kind to tour mix? relates it broader expectation VOI of on members the kind in that

John Geller

Shaun. question, Yes. Great

they're about on tour or So tours is first-time to as last Strategically, talked understand ramping help. which typically are and for than about, year, there, packages to vacations? changes capture always is So up. XX% are would way. on expect side that stores for Abound? be our come consequences mean in rate those year the our staying when for of of the to and we when were buyers. right, that They to last do buyers, year, right, we XX% of are we've with the does what first-time we growth later it year, Hyatt owners these of this I drive was like What that what 'XX it higher about my call more full owners, is owners Abound new some the and more more are to want for program launch the products, the we're say with ownership I'd the going all this making talk well, What

tour, owners when typically, much a they have higher VPG. And

here, of talked package that but of think to not going to I'm on the take be time. that us that's we to to going first-time drive goal We're over is packages. about to as so XX-XX to kind And help the the next is sure buyer, continue high the years, going be about going we couple to selling the to But going more -- as to XXs, right? -- And XXXX. side, continue we're going some but it's to much push mid- move to

Shaun Kelley

would just that or that and believe mix prepared of And then also the And clarification development VOI I remaining sort or been it margins clear. catch that this margins was, follow-up be I up correctly? stable? remarks, you might year-on-year. my have section in is impacted by Did said Tony's the as Very in reflective

Anthony Terry

No.

it above on been that side, think, strong closer said margin We've pretty above we development which think would I a year. this running, is be XX% I XX% margin. development to the

our good line we So remain our to be and pretty year-over-year. going sales percentage the above a That to look cost are general, look will sales the And in then as when part. staying we we higher XX%. said that for costs We'll marketing in our leverage most product contract fixed on shape means in guided.

through, a and coming have lot low-cost So the don't term. do that we see of that we stopping inventory reacquired short for

John Geller

Yes.

back about XX-ish Shaun, you margins. think, I development running if we go pre-COVID, it, think were you when

given on is earlier, here tough year-over-year a the at right, most the I comp we're So driving notwithstanding, or we're key the little and that they'll likely XX% VPGs, mentioned through above, softer be flow. as tour growth

versus that tours when So about adding as tour fairly you you're channels, think -- likely grow -- growth was yes. up efficient our for So the we less right? in year that flat, as right? those the remember, more was XX%, full last 'XX when too, add VPG adding you VPG year and tours tours, you're

flow, getting and we're about marketing it there. of but to the so offset that's that product again we to then and And been year, sales there continuing VPGs drive side, get our for that the sales offering the drive smarter we've and able that feel minimize we're -- cost, on So on and with marketing on maintaining things some costs some marketing getting the and if by that our the margin get expect up to and our able do development to fixed packages this balance you all we efficiencies impact foreseeable that, keeping good more and growth on future. the leveraging the tour

Operator

for floor Ladies that our I'll final Geller session. to comments. concludes and gentlemen, back the turn question-and-answer any Mr.

John Geller

$XXX you, to a our our more Thank new today. and expanded contract Melissa. XXXX joining company. grew We the across than than million billion than more $X.X sales, shareholders. returned for year membership you, generated thank by call everyone, business, in Ownership Vacation our And in was owners board for more XX,XXX great added margins XX%, interval

Legacy Club summer, Marriott will Vacations Abound Hyatt and Vacation We also beginning of by launched Hyatt Resorts all that and brand. Welk under our align the the this announced recently

for year, midpoint range. of travel our we levels, enter the are at Demand strong. outlook VPG sales contract leisure X% remains by expect new never Occupancies brighter. pre-pandemic we has robust. for been company grow to and the the remains well year As above the this

adjusted $XXX or return We in our million cash to we also flow, use will expect free and which between to shareholders. business to million generate reinvest $XXX of

behalf To interest We Exchange want associates, see you on & you for our close, of Third-Party members, to of vacation hope your Thank soon. to owners, all company. on thank in our I you.

Operator

today's concludes This you. Thank conference call.

Thank your time. you at for this disconnect may lines You your participation.

Marriott Vacations Worldwide (VAC) 23 Feb 232022 Q4 Earnings call transcript