HGV - Earnings call 3 2023 | Hilton Grand Vacations Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Hilton Grand Vacations Third Quarter 2023 Earnings and Acquisition Announcement Conference Call. A telephone replay will be available for seven days following the call. The dial-in number is 844-512-2921 and enter PIN number 13735180. At this time, all participants have been placed in a listen-only mode and the floor will be open for your questions following the presentation. [Operator Instructions]I would now like to turn the call over to Mark Melnyk, Senior Vice-President of Investor Relations. sir. ahead, go Please

Mark Melnyk

are and and the note Acquisition to website updated operator, along. to Third that Grand Quarter slides that Relations Investor XXXX Announcement our for welcome you, you Hilton follow to Vacations we've available Thank Call. Please

differ statements.For of our Risk statements. differ, filings. discussion could These the of today. effective as from certain a that statements actual reminder, these measures. include We statements, by of obligation update this of are revise discussions As to or non-GAAP SEC results could a those to please to undertake factors some We'll will indicated be morning our cause Factors forward-looking results referring actual materially financial also the forward-looking publicly see section no these only

related to project under recognizing in details in our make you recognitions Table and comparisons, can the sales period period-to-period you components can on XXX, reflect is period such financial GAAP which on in press expenses current when earnings results XXX, all at ASC discussed definitions XXXX. You find and to certain as release. we those of is then of adopted for a reconciliations hold-off revenues until well non-GAAP release non-GAAP and TX website earnings and deferrals help completed.To defer of ASC made our construction and rules we're revenues find under and as reported Under and today the in expenses measures construction investors.hgv.com.Our and of when required our more our historical accounting numbers, periods meaningful

our the results and our adjusted results refer construction will and a real on Investor today, of of Mark recognition deferrals and section addition impact operations and Wang, for Chief found company comparability ease the be in go and from For our our net Financial highlights Mark's accounting the activity Dan for estate discussion all complete simplify President for the provide themselves moment make recognitions details your will our me Mathewes the questions.With let quarter and our excluding financial Officer Officer, related of then our our CEO, our on Relations comments Mark? comments, EBITDA an quarter. Excel to and historical call turn website.In format deferral over update can Mark The of Financial the announcement. will Reporting Mark periods. reporting of to to Dan that Executive in will through available President today's After and strategy acquisition and Chief Wang. current to the

Mark Wang

and joining this Morning, being for and everyone, thanks flexible our call morning. earlier

go today, As you've a of seen from our things lot to through. have announcement we

nation's announce is along this building walk that transaction new into I resilience third shortly avenues first happy earnings. Resorts, quarter for Pro outdoor company the of value. agreement it business and definitive Bass a JV long-term details The premier open marketing those agreement the Bluegreen will after our We'll that with exclusive get to also while and through our excited and conservation with and We're Shops. XX-year enhancing up really think our I'm to acquire about growth

the efforts to we providing people in many process, the on Before the they support rebuilding of and local team Maui the including extend like team our wildfires during my live their members work continue We're committed started, best our August. community wishes get island. who to I'd recovery as the members to our and from to devastating

XXXX's and our the the some were XX% we the grew $XXX in Turning levels EBITDA challenges of ahead despite was our for target third $XXX in within with quarter results. Contract million, sales million, of saw was XX% and Tours quarter, margins unique of our to XX%. quarter. the range VPG

Maui our business The first impacted was directly. wildfires a devastating that

HGV challenges, our growth Additionally, the have business. they has our a owners the business attract program continued more and has in of has for Max strength member cross macroeconomic quarters. the prior played remained overall as resonate our membership more to these resilient our with upgrade quarter Max and to we a In exceeded owner that growth in deepen face member QX role of believe and into than owners the results source our we of our engagement. currents was our during

terms sales through in new inflation transaction and of the side, driving the segment in of our positive and softening tours solid our in move growth start sales. with quarter, our buyer in the absolute interest for July, contract of of short we But mentality as coming growth tours expectations. resulting the On was buyers affected quarter compounding more saw performance we a the solid in rates in owners. mid-teens effects contract the in believe VPG than and new We after

given people here touring to the the in share and committed minutes. channel QX, some our remain near-term updated However, Maui Dan seeing. our said, guidance outlook we ongoing the new offerings. few details we some our health of as we we're thing and with the is in impact for our trends more business.That align transactions good a these that will growing do of headwinds, news previewing with more to the still that long-term buyer and saw expectations to along better believe We on it's grew our right

take quarter. were in a which driven in tours, the third VPG. at in our Contract the the expected in let's performance offset quarter declines Now sales growth by look

the the than our as growth exceeding I'm Tours year-over-year acceleration tour versus channels growth most new Our XXXX. more remain with showed owner resilient losing QX basis a faster than unforeseen grew further Maui tours buyer against how quarter. tours in despite from on case headwinds again And really year-over-year pleased owner our an as in our XX%. Owner of with for well of

remain expected was high quarter, over particularly moved within August, in in trends rates for September. the our loss the earlier, close of As of stabilized I XXXX. through the tour was softening and as levels our saw with trends nicely roughly ahead in we which mentioned of Maui although despite range just quarter we And VPG QX sales. our $X,XXX, line were VPG

to indicators. for Turning XX%. the quarter Occupancy our was demand

Our are year that step-up build solid remain occupancy support the And activations growth also currently indicating forward. are fourth in highs our I'm of flow the tour base prior record that arrivals going will year the growth and to half a a of next quarter pipeline in in marketing near ahead and first of levels. encouraged

Moving to our non-real estate segments.

great and margins. to Club stronger Rental in margins, and shareholders. turn rental securitization oversubscribed we with along both $XX benefit Our to to With pricing. the million And I'll improved showed finally, an numbers. returning profits maintained repurchased quarter. the Dan on revenues capital revenue during with new of that, second you shares, on worth nearly to we from to finance quarter, double-digit commitment continued our quarter, Club executed team growth it ongoing par solid our were Dan? demonstrating with growth, the financing talk our business the over and member through seasonally

Daniel Mathewes

good Thank morning, everyone. you, Mark, and

I'll deferrals the which we related increase of newest included results of this Sesoko the EBITDA more cash of net these to reduced performance quarter project, accurately deferrals, prepared EBITDA. by presales $XXX only reported dynamics note our metrics period. refer during press deferrals for to for our Before flow that which release in $X would phase to reflects Adjusting the reported of million net $X the million. reported excluding our million remarks, financial In start, our my

revenue expense expecting million property last growth in below ratio marketing still with profit operating XX% contract were half down quarter expense in the from billion to billion in in against for growth the $XXX with with saw of of resort were of Turning QX. cost sales offsetting quarter quarter. losing QX to cost the higher was revenue, drag the in reported XX% improvement XX% our of our strong in directly reimbursements. income of segments. QX. are And sequential tough the reimbursements rental quarter new of quarter just or $X,XXX the created with said, prior and the million our over first ancillary quarter and the were quarter. at QX interest strength prior and which levels, another excluding level quarter club for prior and in versus $XXX margins marketing deleverage expense $XX Combined This year versus year year. due was businesses segment our quarter Tours was just no show Cost of the was buyer the total million in margins XXXX In quarter. new down We $XX the X% sales. in of that the up XX% positive still despite for high total X,XXX Real were contract mix. to reduction ahead XX% the versus to receivables our for gross prior in Maui our contract VPG to the channel than for was business, tours for and estate to XX%, headwinds sales during despite being Within expense Maui. offset million expectations, of million. some sales sales the sales that real was and fixed real roughly over at our a financing, expectations product estate sales Coming buyer the of was VPG in tour same the and expense was million versus million with net range tours XX% was Total the XX% excluding VOI about closures in expected reflecting margins of was of and $XXX our $XXX is our comparison margins sales the our loss EBITDA carrying financing in our we XX% marketing $X.XX sales sales on $XXX of our owing up last revenue. XX% quarter. or against within and which improved year, third Maui quarter, XX% the ratio operations continued line revenue net year. of and profit a of estate, XXXX despite $X.XX with attributable against $XX and our by That over of and results $XX allowance, X% margins along QX adjusted sales and marketing when million Real or million. lower estate favorable

Our million the related bad acquired has balance debt Diamond to allowance of included $XXX million portfolio, a $XXX million. which of for $XXX

portfolios, prior to X.XX% the compared portfolios X.XX% rate including default the our Our Diamond annualized in was for consolidated underwritten and acquired quarter.

Our provision was or XX% debt million $XX owned contract bad sales. of for

the gains slightly ancillary were trends by of loss offset the XX%, NAV credit in in $XXX,XXX, was million million showing total between by in current basis last ADR was adequate. the termination $XX license normalizing As profit year. consolidated and of of million were number room loan of and previously provision versus quarter, million. with sequentially. was business, for government with segment gap consolidated due third $XX up loss nights X.X% see $X adjusted revenues EBITDA, of rental at margins discussed, and $XX our XX% was the we properties of we club occupancy corporate adjusted with and to $XX markets, segment that plans resort was Maui of Revenue our and count and profit our certain growth of X% believe continue G&A margins end the $XXX most the lower to dollar and $XXX was EBITDA was million, quarter. million stimulus our quarter million, the wildfires. segment the adjusted fees JV EBITDA improvement driven our high is Bridging Rental and X% XXX points In Revenue

quarter flow Our end adjusted included was confident rate excludes adjusted costs the in was timing the of the $XXX of recent range in flow And free year. and million, $XX the our quarter inventory low for cash conversion $XX we which cash acquisition-related of million The spending securitization. of free XX% for associated to achieving conversion due our remain flows target XX% XX% cash with the million. to

repurchased quarter, shares $XX $XXX additional under which availability Year-to-date, repurchased company we common of the with $XX of line for quarter. us And XXX,XXX have plan. remaining leaving During shares through with roughly XXXX October we quarter, $XXX stock million million. XX, per $XX average of for an the repurchase million, million an repurchased in per million of goal million have our is our X.X

$XX adjusted XXXX There of in the saw of million the an impact of in outlook, adjustment. adjustment of lowering guidance growth to to a drag $XX $XX EBITDA $X.XX impact and $X fourth prior are you for along wildfires billion. with guidance we $X.XX including sales The the from Turning to QX press further of $X.XX in as of for total are an million the to million X to contract release, billion billion to expected our million, our the Maui drivers million, QX expectation billion our of to $X quarter. $XX QX our impact

As of consisted credit $XXX availability and XX, of our September liquidity of $XXX facility. million cash of position revolving under million our unrestricted

of Our available balance $XXX eligible comprised we nonrecourse Securitas customary of such milestones, At million we million $XXX of $X of of capacity mortgage approximately $X.X and was warehouse of certain another and billion payment, had million at end a following recording. facility, our debt notes leading debt we quarter end, debt had of as balance remaining corporate billion. being $XXX notes in quarter anticipate which to first and

over credit Mark to QX, this of transaction that, call our turn At on leverage basis the Mark? back to the to I'll Turning the metrics. through X.XXx. walk total With end announcement. was an morning's LTM company's net

Mark Wang

now highest And outdoor of us and definitive in nation's enable other XXX,XXX I'm with us we quality the us our that JV acquisition that experiential Diamond. over scale we vacation would expansion the agreement to acquire XX-year Dan. decade With our results, do we solidify organically. Pro Thanks, today, that's the premier and leadership add our to started ago taken of vacation our journey opportunity nearly a one ownership piece Bass with industry, X XX will a critical the excited and while to and Bluegreen it's travel strategic growth gives along with years resorts in of and more to of industry unique branded the positioning in EBITDA company, members, travel. the This a is share have contribution create Resorts, the acquisition right. and to Bluegreen for the we experiential Shops. discuss that leisure All recurring And our growing sector. resiliency free adding marketing the independently win business and and exclusive and cash ownership shareholders, agreement see to between to the by us space leader increasing membership operator, flow. create diversification announcement will adjusted convergence it value where It

Turning X. on Slide

Let of moment key me you take to walk a the through highlights the transaction.

locations, power and also enhanced of of First, HGV great base with and sales membership a upgrade new partnership, engage we would additional we'll to add their years Bluegreen drive by give additional of brand. through large the new lifetime will buyers for This members reach key scale be backed robust in our to growth. a of with opportunities points to many fit expand suite members, improving price of additional plenty acquisition the with whom the HGV. And an upgraded think options loyal yet upgrades earlier attractive us in with distribution business at haven't we our value. with in our stage providing brands enabling lives, has that our Hilton

Club HGV complement of our Second, over amazing leads our Access our critical driving ultimate allows not to adds and X have see that value. lead growth it lodging, a us embedded and flow, also across Pro our it undergone And which brand, all will a Hilton levered partnership program Bass enable membership improving infrastructure expand the our lead We Vacation ultimately with net to and us source leverage tour the importantly, fully that last as transaction and is owner generation, cycles. years, resilience business is diversifying to Max created evolution experiential we programs to with platform. this the perfect to and we generation

cost synergies the years we the million cost operations. front, in $XXX X expect generate On to within first of

as Bluegreen's strengthen conversion, the our and I'll is our Dan. improving executing outperforming synergy model finally, and recurring and than the the turn additional model. on acquisition inventory business Dan efficient We and synergy record trust free walk cash to earlier by you Diamond add structure transaction expected. the on financial of doing estimates resilience it our it of through EBITDA will have proven track capture with slide, a demonstrated next flow over also to And further

Daniel Mathewes

Thanks, Mark.

This synergies. the and COO; Mark Let of quick is was double-digit X/XX me a cost within Bluegreen target adjusted pro myself return including as our and identified free This months an management Board cash The Pro $X.X we're basis. to share the the start we of with and range CEO; and of HGV combined composition unchanged. overview entity our the as or and CFO, the EBITDA, will to with of Gordon Xx flow of is leverage all-cash Gurnik, accretive team per Xx remain X transaction. will transaction X.Xx, billion as will forma Wang, run deal XX acquiring for close. forma

realize years to synergy synergies with We run X revenue transaction rate future in opportunities. million also along $XXX within expect cost close, of

timing, about the talk transaction to Regarding little to anticipate the in it back first XXXX. now Mark closing half we turn of Bluegreen. more bit a I'll

Mark Wang

Dan. All right. Well, thanks,

be Slide at portfolio. ownership scale a unique a operator in has to we the we great complement Bluegreen successful that marketplace, looking overall vacation X, believe achieved as highly and HGV's view it So brand will

over buyers, a of focus their out upon build has its key our support XXX,XXX their on been growth, new vacation of have also members, with large of to strength a HGV. who industry a with others they've innovative geographically And strong over importantly, packages built have stood network robust visibility will for also which XXX,XXX scores. programs. preview Gen pipeline we the FICO most historically over to nearly younger out And enhance has diverse packages that or are Bluegreen HGV. which We XX% and base XXX,XXX the marketing X at shown perhaps partnerships, of they've Through with

to slide. turn the next You

breadth brand have their Bluegreen will with high-quality cultural to offering, our teams us members HGV. Their live XX And culture with XX once and that throughout country, Slide people to and additional with providing within focus enable be will to great portfolio HGV. X-hour us Bluegreen resorts, key readily the We exceptional brands. their and synergy HGV fit, business additional be in perspective, the our resorts which new We've believe think and and span we've impressed nature additional throughout quickly to consistent we our drive they'll a we Drive-to experiences geographies a with states the leadership. able entire our with properties. interactions here they'll be we of commitment the Hilton the we on the service seen X Honors their through of believe into resort, From the in see as to complements convert you Nearly over been XX% a a quality as including it, of providing X, a scale membership. partner creating Hilton integrate on of

on pipeline drive resort ownership key growth, leverage space. X. HGV, us vacation to synergistic our scale adding our additional We base, this the and package see network while So member our in partnerships acquisition enabling to position as reinforcing very leadership Slide to to

very featuring most destination Hotels, Bluegreen's NASCAR and Bass contributor retailer. as X, Bass brands, their organic has will with Pro, that's their enthusiasts here engagement, joint than and with to resorts about I'm X base. where service Bass passion extension the outdoor the year. of announce HGV. values been XXX under outdoors including high-quality base in customer from turn of Cedar partnership with they launch with their partnership importantly, across is pro's lead additional million the loyal venture excited leads providing we'll high-end leading also dedicated Choice currently with a that the drives along XXX with outside Slide Bass with over us to really key partnership provide Big that guide has loyalty channel, lodging mentioned, and us the their and more serve whom to brand. visitors our I why XX-year And tremendous And the a it generate a superstores culture wilderness Bluegreen much dedication the If U.S. customers marketing customer aligns source you nation's growth for at to the Pro efforts. diversification product, a lifestyle. And is a strategic This outdoor a flow of Pro, new group us leading per

strategic drives experiences members. with not really vision the more deal, at acquisition to stay. the with rationale leadership catering that vacation It's for a - the great and members by Looking and unforgettable we also Diamond just strategy builds that enhances for ownership our a had but than it just providing this loyalty our engagement

with Bass the Additionally, program Pro, quality with digital we looking analytics our Pro HGV's up existing be expand space the avenue of combining service And channels on will in Hilton. we know elevated the Bass in-store with our to already experiences We network platform outdoor appealing our and properties we is increasing an relationship guests that the attractiveness owner store that's the think the that access that seen business. a from capabilities. our differentiator ultimate aspects adventure-seeking at go memorable our and health by supports our of and of know success for network can X, of and the Access, to credibility and offerings We've long-term great of that traveler. HGV the experience our and new growth Pro value lead also be our for benefit customer providing opening Ultimate increased membership key and of will and engagement with with drives the marketing will experience customers, to a unique enhances further expanding incremental and Bass focus and relationship diversified Slide their the with in base growth flow

connection both new Bass the experiential that the a club in outdoor the formula outdoor and JV, adding with We potential the on properties several to locations and also Johnny Pro's market. targets met together see bringing highlights building experiences existing times of I've lot lifestyle a offering X of with and their power Morris, create for of the we're Hilton a our members. with Pro excited to of platform and brand the their Bass about customers HGV's outdoor to founder, expertise high-quality and the quality

next benefit On additional see already few processes you'll while programs how we'll the developed, from integration platforms. slides, the by proprietary growth and we've leveraging enabling the process, de-risking their

Over Bluegreen team solid best-in-class brand that a and years Ultimate experiential Hilton Hilton the past and years, systems their focus capabilities, the and offerings we've Access. of business, X also trust and furthers We've the membership offerings by new upon leveraging a new a add our new brand these of strength and members points. and deed We'll marketing through of across of new with forces, Bluegreen's expertise, differentiated our Club, wide also the enabling evolution, scale with foundation organic the better Vacation transformed The acquisition on our that of range personalization with launching steady Max sales laid has capabilities sell club buyers. and building with a team integrated built owner including HGV price this growth. to platform out driving growth

lot new we and infrastructure with and As less like perspective. beach programs Colorado locations like where growth and capabilities. Hilton with to member to integration penetrated of of have accelerate our value. additional that has Val distribution we states transformative East been resort destinations I embedded from without currently opportunity achieve leisure space don't What Coast. realize the largest benefit leverage our MAX And expanding is compelling or over of owners Ultimate of partnership yet presence, Bluegreen the sources of mentioned Texas, which into earlier, by and destinations; also upgrade Bluegreen is base to to see additional unlock a ours We'll the sought-out and key third a and would XXX,XXX an Florida additional those leverage value Access states Nashville, have of along add that along proposition sales HGV difficult and than the

you to Dan through the the Now I'll turn Dan? acquisition. it talk of of merits over to financial some

Daniel Mathewes

Mark. Thanks,

with XX, in in $XXX transaction efficiencies. and Slide G&A identified million count we've and along additional with at savings in financial this Looking operational synergies cost head

track recent those in the acquisition. we realize of are so XX within our months to our confident do very and ability record, synergies expect Given to closing

In there are we this addition, we next turn transaction. think of aspects a financial attractive of the if to number slide,

First, base additional sources resilience our the Bluegreen's business. will EBITDA, create robust financing business recurring member and of enhance of which further

this leverage the deleverage leverage to XX allow adjusted value. maintaining and cash flow member a shareholder support cost as drive conversion trust to cash product, attractive the under growth. Those it fueling allows of we is will transaction. is product our It attractive reducing value not to features our are on X And rapid focus of transaction ability we That into leverage of maintain we maximizing repurchases, to and to increased Bluegreen enabling preserving inventory our price flow. impact to In factors and X.Xx, embedded Next, points following also capital within will base free cash X Diamond. of sales HGV's enabling months, EBITDA strategy the many the Mark? of to creation. Xx. acquired general, of efficient Xx our reduce to more increased incrementality, we offer Pro consumers, close noted capital-efficient growing required will to same allocation recapture a importantly, inventory, as our shareholders share and when carries spending the level carries expect us maintenance lower of return and inventory forma pricing target through us

Mark Wang

Well, All Dan. right. thanks,

a ownership leader expand add Bluegreen our that in corporate will complementary to as solidify not members. memorable So to exclusive this our our a business. with to position industry, providing conclusion, our the also vision asset but has acquisition only will experiences we'll vacation scale in

financial partnership sources Max and lead strategic and Bass of of free resilience cash flow and expand flow upside by unlock proposition our strong the recurring EBITDA will and HGV will our Ultimate with new Pro value the diversify generation. Access Our opening strengthening will improve business by of leveraging our channels, for additional the growth, avenues

achieving Diamond processes with turn We We're our the over line a upon our integration the back the for successful of to Resorts. this building record the And have track that, of transaction. on confident questions. and synergies tools ability and our to I'll call open execute to operator Operator? from cost in

Operator

this Scholes Patrick back session. is At of Securities. our And time, a with question question-and-answer to the today [Operator Thank Truist you. we'll Instructions]. from first begin line

Charles Scholes

be on on And probably as maybe acquisition. reentering acquisition. I'll Is almost the called Diamond Mark, about categorize this it Congratulations lessons related congratulations Diamond to plug done be let's acquisition the the now this you've and the recent suspect you as Dan, you if applying learned I with line. Mark, from play I queue that this? that X well. for the And to point? acquisition. X something questions. that, to talk fair would then at be your the summarize But believe this for Certainly, could any Diamond would or first, you that top you're

Mark Wang

where We've been for space. And XXX,XXX what Diamond Yes, sense done. us what largest perfect improves and members, have scale focused complement now XX and -- We're for a overall these With and the Bluegreen, add lot built aware and on and we're think that very, in over long -- the partnership is with going guys last is obviously, And states And And over strategic in new important, getting industry great We pipeline we you an they've accomplish you think pursue years very partnership, for super we're the of it centers and -- know and we've one That's we've for our very an third really a right? got time. them opportunity. innovative the so of we've announcement scale. been at their very have I long diversity think to they've Bluegreen X to a XXX,XXX is this XX HGV. of them, to a the today's The to And made new from when excited buyers. distribution. get standpoint, it a time. that known evolution is additional we of and company. -- think what in we buyers, what clearly about new X about a with we to acquisition. distribution new people new been pipeline XXX,XXX. able properties, obviously, this our their in No our innovative. it's

new XXX,XXX on have basis. pipeline collective buyers We in a our

been haven't to So with they we parties -- able they've really to and this Hilton like third leverage the do been have. database like able because

the biggest been think, they have Bass super clearly and Bass And of those, So With with I have with them. generator relationship plans, with perfectly. we fits it big also Pro, think has but to some Choice ahead But really I a NASCAR. them. Pro work anyways, excited

a Access, create to a going to I the I platform, with of be be membership As able did Hilton And We what experiential under said, with evolution we Diamond. to Bass with this Ultimate Pro our brand apply stand all whole into new Pro. be that We Patrick, it's Baas especially new to think mentioned, an program, we'll Club. announcement plugs which agreement we've new we're Hilton able a as to fortunate things it were able Vacation acquisition. you that, expand achieved. created with to really up to And new this

really kind They've think, all, been focused Very So like really look consistent. their our I And it are I of new properties very, buyers. when I Their deal. de-risks growth. at very Bluegreen strategic at legacy Bluegreen, all HGV. in look as on in

all happy. learned lessons always all, very, Look, you do I a So in when transaction. think very

the extremely I the lot lessons to through we think just is apply the biggest learned can transaction think continuing here I Diamond of one work hard a we've that the integrate to teams.

I even do a good did with think with we to Diamond a and better job Bluegreen. we're job going

Charles Scholes

does Okay. approved Hilton by be been to Has this need or approved? it Corporation

Mark Wang

it need yesterday. does approved, was It to approved be and

aligned very appreciate So will we're most their support. transaction. are importantly, They investment all really Hilton thankful our always into and partner, with biggest there. for Hilton's our we their and be We're partner cooperation biggest this

Charles Scholes

Okay.

quarter on guidance. the move the to Let's to and

current You was think called macroeconomic out some concerns after August. beginning, I and it cross

this -- -- legacy rates, market a bit more that. of where business you VPG, hit seeing in Diamond? this? going your your your your higher-end close more tour drill you to you -- the are Specifically, little this if be or are this down where to in seeing on mass can Is a flow, Is

Mark Wang

Yes.

and though, third behaving in I for the for had the expectations, year buyer high you'd focused maybe line you and consumer with had year. buyers. unexpected in bit what from and had new in we situation. expect sales the high finally quarter, So XX% think rapidly And year-over-year, of a pressure we is on the detail what tour we But new on obviously, Dan were And where and periods. through that we've walk And we flow kind transactions that. more now that's actually our we're right? Maui I'll rates inflationary that half of controlling second said, expectations rose control, little And grew versus last Look, interest rising more can the then given sustained unfortunate by execution. have the

Daniel Mathewes

Mark. Thanks, Yes.

So of were where at the when out is take versus seen look add, portfolio nothing it to business line, a slightly HGV actually but just other thing modest Patrick, we some -- movement portfolio, in XXXX. little some we've a legacy the I up. material, HGV portfolio. Sequentially, is against the up break in trying you Diamond sequentially, bit movement nonetheless, the ahead would

we've have holds improved. And at about today various the levels. they Diamond, significantly time underperforming talked look you when historically that actually well modestly been points XXXX at in they've how sequentially, Now true as

bases, this, at annualized seeing flow itself. you as side driving Mark's just you That default securitization, between still some the saw the compression recently, a QX. of impact because X%, this. that's with new in the lot margins anticipating growth will finance rate you macro not different see that When you're clearly new but of you're of tour you'll That are material a financing we to just compression the in coupled is under is lot what margin consumer balance from really the segments, and guidance, clearly look the will. a we an completed on upon causes in if heavy seeing point, movements So side. From buyer

of benefit because strong the is play. QX Club when really Resort side, transaction On fees though for lot a come and into that's

has our always that been when comes So strongest then QX it front. have historically some And on to seasonality. rental, you'll

to with be levels down will prior year QX. line it margin in finished where we So slightly

you that's implied lot fires. previous number guide, a So to on the guidance, at you got things the of but addition Maui gives we've going lower a in obviously, when look than QX, the

Charles Scholes

Right. on And then the I'll I follow-up myself a come and have question in queue. that, back and back

similar that material sizable major it the you players a the had any like didn't I of other loan correct loss seeing charge correct? I -- in Or that that delinquencies? Is correct, point? here One Am this provision. you're at in not sound and did take charge issues am

Daniel Mathewes

all to trends charge at definitely we they're didn't if deal been this the mean, year, modest rates, talking annualized that the with No, a we've about look at the we delinquencies take very at point. I material we look and consistent mean. reversion some

at our contract Our see, any this a reason of north time, material portfolio. just against as take charge percent of XX%. sales We provision not do to was a

Charles Scholes

lines think you cruises? a you maybe Do trend also was Okay. more normalization thought? driver that's than you're or a And normalization. long traveling Do that impactful you major that of being another by of also primarily initially of it's abroad, of sort company Americans and taking sort here caused just think domestic

Mark Wang

I I we think, saw acceleration effects the And all previous in consumer arrivals, there. we but around -- strong back the bottom now what the right earlier, as arrivals was than expectations line just softening the we our saw I some out compounding still think better with year. into mentioned half Patrick, in an we of information the is And year. is there's saw some the

So of And our not a -- level expected rates. we in and saw. VPGs there's to moderation in we but the that bit conversion that the our moderation

stabilization back of saw saw also we and Now we it September. early half in in October, the

performing flow. high at expectations. of I But all, you So just relative look think in yes, overall very it it was think from all expectations, high when a the well at day, still tour end just in I transactions the standpoint very was

Operator

comes of The next line Barclays. Brandt question Montour from the with

Brandt Montour

Congrats the on announcement.

together on that if you or X sort run of there between you curious the how for and sort Mark how organizations? of share came was to process how -- price premium Dan, sort was if willing Bluegreen got to you're So or that a of

Mark Wang

innovative cash cetera. value for value, lot the value the mentioned and that buyer business they're that about deal, a And a of a strategic EBITDA, we've pipelines, on flow think we the this Bluegreen us. earlier, a talked of very And Bass was through and in think there synergies. long the we for when I operator. of a inclusive I went cost new And as Yes, process, the we the million process. has And think known I lot et a Pro future deal We time. $XXX

if Dan, that's the you value. how the to But to basis got So on we want any...

Daniel Mathewes

got that based of Bluegreen traded, went that synergies you where see, structure, on had it role it When Yes, through the some synergized AV a flow the the historically trades. which Brian, impact a was a today always when add they've we this at cash Look, just on discounted valuation classic color stock can that. to look to But multiple the into little valuation. how in disclosed a kind structure, basis. we as play key translates the process, then you to

look years. basis. what when multiple acquired Diamond think far a -- transactions, to full we're I landed basis. where almost a entity you Xx our at actually on And less than happy X the turn a the very we paid they last on for we X X/XX X by synergized And synergized for in actually it's are LTM lowest at any

pleased pretty we're ended we've So up. with where

Brandt Montour

synergies? on system? $XXX would well, XXX sales, the XX how that -- calculate would And is million the think the VOI that about number, And Hilton then LTM is synergy in the and guys. cost -- -- Bluegreen excellent on That's million-odd how -- color, how fees do included that how we that to do hitting we the

Daniel Mathewes

the include not does synergies fees. license cost The

So okay. there's --

synergy components million X-year So roughly of increase So a $XX more to $XXX which opportunity offsets revenue there's the $XXX then outs; than license synergies they oversimplify, ramp. and did fee with a to right? lot because And they the There million, down ins at there's cost very and of rate different synergy a and couple on million, hit here, outs Hilton. consistent of fee that's Mark did boils that you between end is ins and it's earlier that low increase some the of to that color some X%, revenue where when transaction, ramp mentioned X%, that to but this to. that's similar we it The it the and where and floating pieces, Diamond at did around in perspective. oversimplify on invest what fashion would be license fee in today. which mid-XXs, transaction, just Hilton are the run a give are X%, there's and effectively X%

Mark Wang

those for these where obviously think obviously also we the to have they performance in seen and estimates, us cost there And I actual we've lower especially other with Diamond the informed around that the partnerships are the side. invested drive a relationships because And partnership around cost license Pro Yes. related deal. Bass fee those partnerships

Operator

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

Chris Woronka

Hilton its see I mean at this, is is back And did what with also looked the pool that Bluegreen also when more of kind you of if kind I area at few And with opportunity business. of the, a where years the of that we customer the what the buyer fact announcement. makes and guess call and of kind higher-level you, initiatives Mark, on similar guess, lodging growing, congratulations guess, some growth the shifting I that kind the you sense? Diamond. mid-scale biggest you you there a when for into I question looked to is of any, is correlation unit

Mark Wang

great No, question. Yes.

was at of younger, or or we the XX% good above at Gen one It's very still to the score Bluegreen a looked X right? -- deal, younger was demographics, FICO think, are attractive this owner. when things look, the I that members us very X.XX. a of

consistency of time, through in system ability earlier the is of the the attracting member So we the for grow solid -- stage we HGV them of properties. our have, the as perspective, the over And like base. customers to as portfolio. the move earlier, From brand thing through have with that and Hilton's And their growth Bluegreen really Ultimate us, one life our of well quality them the property with fully you auto Max Access, and as just a do they about portfolio, align important. is we mentioned

So still -- Chris and fastest-growing the members, last know, Hilton, it's million as hotel-royalty and XXX -- announced you now week, they program. Kevin

our value So in owner it continue to growth we thought it support really the allow to and made a lot and will net of us sense build embedded strategically business.

Chris Woronka

appreciate any it's acquisition? to a But that kind as maybe a that's in this whether going or indirect higher But a retail I Pro, unique these of or a angle. avenue thoughts more do Okay. Bass a at for a companies higher question there's with maybe some partnerships like focus to going becoming way It way. on Obviously, And think that of to on question level guess, guess, theoretical asset. source an maybe I have I is secondary in an whether angle somewhat color, you. travel customers that, Mark. outdoor that new for level, customer forward, very that's kind another, of be you then seems new,

Mark Wang

to I Yes. opportunity with and don't -- right? Bass And and Pro brand they've Bass able had portfolio access And their their then Bluegreen extremely ultimate to pipeline our unique platform we Look, the superstores, just commitment, stores, big we being able but And his excited mentioned just if seater experiential in well, themselves, we're had It's they're that. do unto our team are to to And their more one right? done a I've the the about itself, visit focus leverage and -- they the and their quality of going a Johnny and at work amazing was platform. destination destination on look, than much because you've know be meet of with think it's and opportunity Pro believe with as and of earlier, conservation. lodges, our diversification in I of opportunity now our to us, them for so marketing impressive. with it's is massive

opportunities be but best found yes, acquiring other think So the are out we we for and could one have there, there sure.

Chris Woronka

is to third there any a and a of start is is and the as piece. Just, lower look I or customer, guess, at they're this we there out out dissect even kind up conversion any the big for Is quick geographically the on we more of Hawaii But be outlook or quarter if it quarter obviously if could. look rate where kind need than not theme maybe fourth common now, common QX, the follow-up quarter? the I theme lower, where to you though it's showing whatever that, of might probably

there's of Just you whether pinpoint trying to to anything get a sense as to specific can one identify the area softness.

Mark Wang

won't talked I one dive to Hawaii, which into unfortunately, continuing to to APAC. come is, also drags we're we've strong. has noise say been expected, look driven would some more just Yes. of it's Tour what's But for Japanese essentially at But historical been on back Maui, Orlando that is so has right? I it we levels we overall, And think were had around our recovered owners, and the partially flow around VPGs. -- at has The going and some important. there. Disney for for than of is you when business, real the there. impact us the There's Mainland though, And really been about softening wait cost just that.

well. are about of And XX%, that more but is Now general, about the pretty It's are pre-pandemic. part less from -- in back currency. now. really, our still down coming And owners the Japanese XX% pandemic the it's

business all, it good generally we It's And a longer in in shape and in than business, So than say mainland it's our Orlando. APAC softness going will I all really around to just back. more other is our would little expected. take come

Operator

line question a follow-up next The Scholes Patrick is with of from Truist. the

Charles Scholes

that does expires, is how licensing that Hotels. for? agreement? it a be you'll with Okay. Right that now, agreement realistic And One, longer expect Choice dropping to has last much when Bluegreen agreement

Mark Wang

and with discussions we in diversified the we'll and going nice they partners active going context flow get deal in of company we not sharing Choice. and good what with to talk would little we've And We're place it's Yes. source agreement in been a built incremental to to the Bluegreen. the on with for plan small. go work the here. lead about in a X%, formed more the have leads, detail But and aware the combined about nice partnership those been have again, a are brand look, further share excited to say, But to more, I of of believe reader. the Bluegreen we're all customer with them we've And as and And structure, look as the forward to we closing. and the we pipeline they've around guardrails tour about the closer structure. Patrick, and them, you down appropriate company, -- got a It's be. basis a flow the of X% accommodate putting to combined will But relative and we're

Charles Scholes

up for think what for would a similar that folks as maintenance them year, going year? And last say the then next fees, will you And be maintenance inventory. higher other week might a I going their that be would for last about for up question my challenge talked you major here. be next any unsold Curious competitor mid-teens fees and cost your well?

Mark Wang

going various in pressures we fees insurance. probably not property Look, ballpark. up, cost going maintenance mostly mid-single mid-teens, plus be by anticipate that will driven But up ours digits

Charles Scholes

Okay.

than line So with in as inflation. higher opposed more to inflation much

Mark Wang

That's correct.

Okay.

Operator

Thanks.

the with is Brandt line from next Barclays. a Our question follow-up of Montour

Brandt Montour

ready of kind because little you to So platform had The wanted bit I And $XXX the ones I better sound like feel around one. time go. on announcement. you million more dig to of in million another was it a think synergies. you have Diamond about integration cost synergies just little the these this made Mark, bit $XXX a I at versus

was learnings owner But undersold, is it is plug else and play. all said probably Bluegreen sounds more also got was -- whereas Diamond like -- could oversold. the system the like You've base is and that the argue it these we someone but

dichotomy. that's though. side, so the Is of expect firmly interesting And that on synergy I revenue sort an would

So you guess, assessment? I do agree that with

Mark Wang

approach And revenue up our synergy of VPGs lies about generating ours. agree double owners in We're totally almost new we're that those. in pretty that. between somewhere kind actually double I a not the around what owners. hold think Yes, and VPGs opportunity is well I to buyer looking VPGs conservative No. Bluegreen taking against today. to Their of really When are

synergy On have acquisition. to we I of very the cost cost synergies we track achieve pretty our And a And side, think; approach. looked XX being achievable been we've in at it very, XX these thoughtful record I think to are months. able carefully. in we've Diamond those very now the And through think good

Daniel Mathewes

Yes.

of that who talk requiring transaction, redundancy is where million where much certain in that's process process. comfortable we've with learnings is here the to -- cost I million going that cost Diamond think will. where hey, through And headcount, cost we when think really synergy going Now we is by we and a easier ones synergies synergies, $XXX I'd to have you applied thing we're around cost a made probably in in here it's still Diamond estimates $XXX really is Bluegreen, not and lot of Brandt, the we're had if to right? deep have get about thought synergies the But there. those cost cut is to right? it's obviously, driven identified, roughly too synergies, the we history regards thoughtful which when we plays too the well, confident. But situations, learned, to But garnish, the only you you work, And in the different add, Diamond lessons. learn roughly XX% and about

So that's good.

Brandt Montour

the change the say fair us -- where Bass sort confusion as to The again, those no Bluegreen and that maybe sensitive the there's with is But know that removal from Is consumer brand around. right? asset of from and Bluegreen to of or contrasting then you cover lay. Pro And don't expect really of that brands is consumer consumer process, it for always that Diamond. well, the affinity friction the

is no-risk situation. And of Is so that Bluegreen Hilton process cutting right? that sort a sort of out of

Mark Wang

are those utilize that was. X the Diamond on Hilton the Brandt, properties the then be to their what means properties, what them to means Access trusts. properties just going club there's the Yes. forward. say that you and excited We And ability for move be right? And you brand. XX Part move revenue ability question. going great is believe for simpler reason those I one kind and really think when of that good of to And members synergy And Bluegreen proposition are of has about of done business actually and able the is you When within to their because XXX other ecosystem we job acquired back I than thing Bluegreen care goes at the the the that brand. going trust think be into being Hilton opportunity and they're to taking iconic is revenue versus And Bluegreen such about understand is say that Diamond an program. by their Ultimate to model side, value across think would and synergies those to when had for the building improve Bluegreen that compelling on this customers, put the lodging like loyalty top a very them. owner about they're But powerful, Hilton has your

product companies, Bluegreen right? it tuck-in and has from They trust companies. acquisition so a Diamond's various reason more So organic Diamond was there's is and And more the And been M&A lot weren't of because day had many strategy acquiring other XXX% so was complexity. any X.

much born just to So cleaner in simpler the all And we're I tuned -- us starting lot be HGV company more a was for just forward. club is -- lot to this away it's with It's it's one at it in a point way, connect going wouldn't together. a X lot say simpler. a

Operator

Our of next follow-up question a Chris is from line Bank. the with the Woronka Deutsche

Chris Woronka

to Hilton how follow-up, is kind of know percentage Just members Honors to possible have it, announcement may compares at or I what acquisition? and percentage a quick but were that what of it that are missed I Diamond members apologize the already maybe if Bluegreen Honors today and of owners members time of

Mark Wang

that into No, in we us, don't -- haven't we -- we information that. front looked haven't and really don't have of

And programs. obviously going But our are, members Bluegreen -- there's some as all million -- of going crossover. to when in XXX various So have members typically getting members to but built loyalty though be goal members of be When our forward. going hospitality on are you has you is those Hilton know, out to be people there.

Operator

you. Thank

I end, the Mr. over turn for Wang remarks. closing back we Before any call Mark to will

Mark Wang

look exciting Thank also thank to Lopez our for and his team. I'd to working working team, you. entire we welcome. thank to I leadership I thank great this Pro to also the forward want how and with Johnny Ray my want front about Levan, And Morris confidence shops excited to strategy, We us also joining entire morning. everyone, I Bluegreen opportunity Alan I you. am organizations. Bass to in the and and their reiterate in want thanks, of these future you warm us for look forward with an the say

Operator

your This for participation. you today's Thank will conference. conclude

time. You this may now disconnect your lines at

Hilton Grand Vacations (HGV) 6 Nov 232023 Q3 Earnings call transcript