HGV - Earnings call transcript Q2 2024 | 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 Second Quarter 2024 Earnings Conference Call. A telephone replay will be available for 7 days following the call. The dial-in number is (844) 512-2921 and enter pin number 137-43187. [Operator Instructions] I would now like to turn the call over to Mark Melnyk, Senior Vice President of Investor Relations. Please go ahead, sir.

Mark Melnyk

welcome call. Hilton and quarter Vacations operator, earnings XXXX you, to Grand the second Thank

reminder, discussions those a only to results forward-looking As publicly our These as could statements. include statements. revise undertake differ Actual of forward-looking update today. materially no are or from statements indicated We these this by effective morning obligation will statements. these

filings. We'll differ, section of that certain measures. could results SEC to factors of to some Factors cause Risk the please be of discussion the non-GAAP a For see referring also our actual financial

numbers definitions well GAAP You components in and can find and discussed website measures reconciliations of our and such non-GAAP our non-GAAP press release investors.hgv.com. on as of earnings today as at financial

rules in defer sales we construction under ASC those until results the hold a reported related period and period Our XXX, and when off XXXX. expenses on required is to ASC project construction accounting adopted completed. XXX, certain we're is revenues in the when to expenses under for all made reflect revenues then Under which and recognizing periods

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

Mark Wang

and call. Good $XXX morning, our were in contract million quarter $XXX everyone, quarter and million below was EBITDA to of welcome margins second earnings the with which Reported were XX%, sales quarter. and saw to as quarter, expectations. both in We we've April solid start trends momentum in our had May carrying QX exited from the improve the a and built we first

As was it pullback we our however, and spending experienced all consumer particularly broad-based customer acute segments, we evident moved behavior. This June, shift into in across was a our brands in but consumer influence new perception in results. increased buyers on the hesitancy, noted purchase of this calls, prior there's which and We've continues to a no role our question decisions several segment. played

we addition, however, some execution faced In during quarter. the challenges also

and of improve marketing regionalization process As staffing. with increase the scale in organization areas: our with sales key we the flexibility completed to our and our restructuring integration an extensive part of and new just execution two Bluegreen,

we regional at improved Regarding destination their and to posting optimize which sales the markets to the continue and using first area, HGV's resources HGV properties, marketing marketing additional we've both will tours those more believe also while approach to local multiple empower centralized generate we'll level, smaller and VPGs. tools large efforts with moved additional markets

tour creates value buyer the over flow, been on year, we've embedded new lifetime focused addition, for HGV. driving significant which past In keenly

allocate which part future current new handle resources volume. them additional staffing buyer tour the also our organizational and optimal As lines, our we've sales effectively to of recent reevaluated design enable to should efforts, more to levels

which those execution business part in lowering the business, address some macro the for our flow control guidance when design of rolled So combined through the led with to across us our will new quarter's can't organizational to our while we challenging issues quickly changes expectation results, time year. we take the environment, however, as June. These macro a to spending environment moved more out we've

Now let's operational turn in sales and during our impacted were the quarter. to Contract tours decline VPG. by in the a year-over-year performance quarter both

spot XX% XXXX of our remains owner Looking demonstrating a our at channels. the the and each sales growth resilience month quarter, tours, consistent remain positive our supporting owner with in ahead segment of relative single-digit low owner of bright that

the in Our new trends. at the mine rebuild to adjustments year, end remain softer tours lower we last following marketing seeing as addition our made pipeline of poor we local

levels. Both consolidated by VPGs. tours a done tours continue operational for for similar on owners half expect saw on year we to our still metrics. basis, ahead will both our we But of mid-single-digit $X,XXX a respective prior legacy maintain range Bluegreen target marketing XXXX low XX% VPG activating similar and and our to organization. new the have operational XX% was back as also ahead end the of and earlier. the over to work marketing buyer through direct new to we factors in levels the in versus owing declines from half XXXX of or of packages great XX% teams as we we've But the HGV to recent And also back about adjustments channels, the pressure posted just expect combination improve pipeline. New our rebuilding with of talked local the year-over-year decline job of the changes the the quarter made,

on for Occupancy indicators, fourth a number tours look at marketing strong among focused our into to we've back transactions. strong year ability of was Looking arrivals convert XX%. And particularly at our the the last seen and in quarter our half, quarter. travel remain for rental and demand books improving in with the in on the quarters, intentions line Sales, we're consumers, those forward

segments. to Moving our estate non-real

and demand note well-subscribed several offerings. ABS great a do environment continues team managing meeting strong rate higher job to through with investor the financing the Our

Our the XXX,XXX over to continues it's healthy our also owners club business to of and and travelers flow see NOG in think with demand recurring from our quarter important rental we X.X%. I highlight cash also and resort segment generation. ended

produced adjusted of quarter, million free $XXX flow. cash This we

despite to some our amount capital to near-term during quarter shares produce a the So business we're still commitment support our for is repurchasing cash. significant million that X.X of the to $XXX able And of of stock challenges, using cash million. returns,

with this Diamond. keys, rebranded XX% the another rebrand on XX us X,XXX Turning to we an bringing additional and efforts; our we'll track next total. X,XXX quarter, for representing to an our of the targeted start remain we on second keys, of Through to end update integration year X properties properties,

management And all across platform. single our both sites, benefiting consumers We simplifying and our of major seamlessly We booking enabling and their enhance our is sales member our process dated members. sales also more technology unified a our and into team and we the points being our to integrated continue used combined team an launched recently products a to legacy platform two across trust websites brands. that and sales from experience, this integrate year, Diamond of now HGV member tool and sell improvements launched customer-facing have

And with front the Wolf vacation strong front, of We've on-property Wolf partnership Great like call using families on -- out a Resorts. and gate. the number indicate seen early the already for their programs. Wolf we've of members at strong packages Guests digital their On signs with Great in interest traction marketing stage our had [indiscernible] Great points across our transfer, and

as into launch for with smooth now make we Turning hard Recall launch place of among progress. The to to until continue of challenges Max, of integrated working to think organization Max base we're which will Dan that There's ahead ours, sales our tracking anticipation we're these why have the synergy in also we that Bluegreen key the shortly. integration continue member a during ensuring good and get rebranding. is the everything HGV to realization, addressing parallel now a will our in the scheduled execution run teams sales about of Bluegreen cover Salesforce be to workflow, will and Bluegreen, rollout. corporate and lot our

While on sense the with perspective working near And above here. confident quarter identified has control the our in difficult long-term maintaining acting on these our urgency issues can while we've I'm a it we're a we this from the in I Despite for been future confident what term. of that address us, to and improve are remain diligently and challenges, all, that business will optimistic path. I'm

best we've had. ever stronger have our geographic had more offering. We a diversity. We We've product got model business than much

and member free We base, generating ever we're have than cash before. flow a more larger

numbers. to I'll with to Dan over turn that, walk Dan? So you through the it

Daniel Mathewes

everyone. you, Thank good morning, Mark, and

deferrals, Tower sales related at reported phases Maui which note million for of start, this revenues results we $XX newest that projects. and Before to included of quarter villas reported Bay GAAP our presales and Ocean our our were reduced

results direct $X cash refer flow recorded full prepared would those deferrals, January of our of include to million excluding our deferrals. for financial million. In two more items I'll I'd during by for closed also period. to my increase only the recorded a metrics, dynamics also remarks, financial also $X release our on which in XX. We million that which accurately reflects press EBITDA net associated quarter of Adjusting today $XXX results performance Bluegreen, we note expense

$XXX quarter quarter target total reimbursements during within for of annualized billion, $XXX quarter; was on the or reimbursements. EBITDA the adjusted cost and the recognized months. was run $XX rate plan of synergies $XX for results million of million, cost with our of Bluegreen margins our to million Turning XX revenue, excluding XX%, excluding cost with a synergies included million EBITDA $X.X in

the in Turning $XXX of Within contract with were the for million $XXX sales Bluegreen real estate, to quarter, segments. contributing our quarter. sales million

contract from of quarter the the XX% first comprised points quarter, buyers in basis over New XXX level. sales improving

quarter just XX,XXX and was quarter. level, prior forma the were Bluegreen which below over For for contributed year's the tours slightly the pro $XXX,XXX, under

channels ahead single-digit owner remain the at Max. in resilience over and and our to explore quarter had XX% expanded growth want resort Our network of owner of low tours benefits demonstrating XXXX, our the continued HGV that of levels

continuing new is pressured new we're ahead as However, rebuild pipelines, improve over adjustments [indiscernible] buyer just as marketing. Mark local for to of XX% with quarter levels. $X,XXX mentioned, to along remain our was operational work XXXX which the to making VPG tours

our and press with transaction. These a coupled was from our premium new our factors items tables acquisition, slight and segment premium financing as growth the of business, for Mark net Our pays in of saw business, HGV product the amortized to and owned macro will owing the earlier. deterioration from year-over-year declined buyer in close that continue with for VOI second income and $XX lower for from rates for segment Cost percentage rates to were core associated by the just for and or amount, to still margins quarter of quarter of our but Diamond the our and noncash of marketing QX, quarter the XX% the Bluegreen over and the amortization mentioned underwriting with XX% clearly revenue that business updated quarter, acquired million slightly noncash our contract portfolio similar a the the XX% from of profit our both revenue was as execution down, expense VPG profit a million, million sales time estate sales profit a the impacted million contract estate own financing Bluegreen In $XX of by quarter. in for distinguish provision being the for quarter them bad XX%. core XX%. and we acquired $XXX and Real debt onto sales over $XXX with more receivables for was was release. Interest portfolio was we've was of the margins million decline $XXX sales. Real

of of Excluding the XX%. core temporary interest and impact had these underwriting margins business $XXX million the adjustments, of income

these create the we weighted the portfolios up interest business first but premium some noise financials, originated reported slightly to remained forward, expect the in Going on rate steady quarter. from with average amortization the continue core noncash XX.XX%, to of

quarter Combined billion gross allowance. rates interest $X.XX pressure benchmark net the some reduce for new of the $X.XX ABS the of of billion or were receivables should easing issuances. on the Additionally, recent help cost

Our debt total $X billion bad $X.XX XX.X% allowance the receivable billion balance on for was or that of portfolio.

consolidated portfolio stood our default for X.XX% annualized quarter. for rate Bluegreen at the of inclusive Our

provision to is uptick quarter. Our level sequential for the consistent the in underwritten new of of given was the contract important as in mid-teens carry in provision, impact which holding year than drivers and into owners, a that Digging third buyer expect sales remain note percent with mid-teens. Currently, the in due deeper we is the steady-state HGV provision similar new of any books the assumes our It the quarter. trust this of provision range This trends. do lower seasonal XX.X% can provision fourth in to that to the owner provision levels higher in provision levels the by the steady. our mix. followed quarter, buyers expectations quarter generally, sequentially levels a are of Recall with

the and we've seen have from accordingly. were Within integration underwritten originations higher our Bluegreen provision some to prior portfolio, losses increased our that

sales million While our this of for $XXX our Bluegreen's $X we the with added total profit elevated Diamond. balance the was with resort headwinds EBITDA adjusted end and adjusted of near higher member of X.X% we've in $XX and business. Breaking million much nights, non-controlling to and much consolidated at risk-based opening maintenance and revenues the the were on did business available process, be license the X%. G&A our expect XX%. inclusion much to million quarter. Revenue profit and of million gap million. million, fees term to segment segment through and was and attributable practices and with we room pricing, Rental second margins margin segment the $XX RevPAR. aligning our sheet along while the our some $XXX work interest of and due of $XXX,XXX addressed was between of and EBITDA, in in rental of EBITDA quarter impact $XXX $X In underwriting by driven EBITDA quarter by procedures, ancillary we do by lower JV of additional like $X inventory consolidating offset legacy Revenue slightly and million, business, for club count Expenses NOG expenses offset growth million was continued expense, fee developer of margins lower was

inventory which million. adjusted the included million, quarter flow free of in spending cash Our was $XX $XXX

the two maintain a Our as expectations cash flow ratio year's of we deals. XX% will timing range. our line from well the this for XXX% low is rate with inflows conversion exceeded in to our roughly owing as conversion ABS year, quarter, we that able And the to anticipate recent conversion in last be that

shares $XXX XXXX the During million, availability of the we for the quarter, company million of XX, X.X million. remaining for $XX.X an leaving repurchased common repurchased us shares stock July through X.X additional with million And plan. $XXX under million repurchase

an of returns approval XXXX remaining quarter of received our aggregate authorizing and $XXX free also and authorization. We million remain in our flow approximately We Directors our to excess which of is capital to existing repurchase from to maintain million, Board us primary use addition the will of per repurchases. as our amount base $XXX committed cash share of

or of outlook, tour outlook; debt our and lowering prior on have billion that Mark EBITDA more to we as $X.XXX the VPG from we headwind our lower guidance lesser $XXX for million bad continued are and, our our quarter mentioned, normalization pressures to and prior a owing adjusted to range on Turning mentioned mentioned that to the billion the challenging following trends calls. than to a primarily extent, guidance, we to $X.XXX

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

we prior deal end, coming balance And timing this customary free our should At adjusted I perspective, approximately nonrecourse adjusted anticipate market with incremental we we another notes at debt of being we in facility, and $X.X million had of available billion fall, comfortable recording. From we coming around ratio. half. in provide the securitize another warehouse of milestones, feel second remaining million $X.X which billion. and notes flow a to certain free our our corporate EBITDA debt cash our still adjusted payment anticipate million to our which balance as had first such flow eligible quarter end ABS comprised beating mentioned, as a conversion cash in assumption Our mortgage debt $XXX with to $XXX capacity was and of of of following quarter $XXX

company's while cost Xx points metrics. as XXXX repriced repurchasing from successfully still synergies, I'm and basis towards all a make progress $X net we loan year and to of of to to per our million report a was to a basis our happy XXX fee interest Turning of TTM basis of leverage also shares. we XXX term range inclusive savings. to Xx the spread cash QX, credit At spread anticipated leverage continue of nearly total our figuring X.XXx end the target points, in on

We the our to Operator? over forward your turn to look now will operator and questions. call

Operator

Katz from the with question Jefferies. of [Operator line comes first David Instructions] Our

David Katz

Two respect how around discussion and all you taken guidance more isolating for just is, me, arms can execution question sort got isn't adjustment comfort the your sort the little And of about right? Maui, seeing that the your comfortable bit we'll on touch a on issues, mean have that you're And around a enough, it? of with I'm please. you've you and of I to and out talk or have you if sort more feeling more? follow-up I the update updated sure we is not And do of there. there get what sort love

Mark Wang

Yeah, David, is Mark. this

buyer has us of obviously, -- we've up bottom at So talking are their second while the the the macro guidance for the as lower third. net reflects been dollars. of the consumer When it And versus look and contract in from back the at a on what's performance, given and outlook between third we've that two-thirds for really you the two-thirds the of seen you VPG that we're on from look, And quite the expectations sales buyers, we pullback bottom think the close. in about year spent drive what the competing really discussion looking we new more about were, expect half the But been data we've I cohort. quarter's guidance continued the guidance, I'm through a constantly. pressuring our pressure top And when in variance seen And -- than right? so and the the our and continues expect two-thirds you components bottom lot our time the top to going to stabilized, right? And a has of worth when the new underperform year's going the a top rest look we at performance. of the look think, at

So expect buyer close new on we pressure rates.

the arrivals expectations, owner and rates conversion or we as well. As feel we're we're our see expecting by And tour up softness look we again, some perspective, local we're half books, offset ramp our is it we From the of direct an far be there. tour good business, goes, intact our on direct on our marketing. Though to versus XXXX. and flattening back in owners growth flow above a and still continue normalization flow seeing it's going marketing, but pretty in we're the performing year, about as Though marketing. the the by when will at to prior

it. I if So still we outperforming what see well. side. But contract off sales debt the owners around cover piece on the doing new our to are buyer we want components ultimately, don't on saw know, in on any bad of additional Dan, and you in the past pressure intact

Daniel Mathewes

our fact level piece sales, And flow-through impact. line. with know, a contract we the to. it have we bottom way have need one majority that expectations a we're David, you the will Tours I financing. then impact associated And is as of think Yeah. logical revenues perspective, derisked the from about extent to question, it. at And VPG. looking the obviously did that the pullback Bad driven an great just we previous thing that by to from when and think that was back the to a especially were a have to No, guide the it, pulling minimal high a is to of has debt modeling it's

is going up talked about, rates, side Bluegreen thought seen most year up thought accordingly. defaults that into obviously were we where some range year mid-teen we the delinquency next As we've and We today. always that that I mid-teens to exit previously consistent in this or in is would in go that ultimately increase on say provision there but that we'd end range we've notably we're accelerated. probably

a down associated just forward XX% pull that So and on little you generally guide, contract But there's pull to bit effectively in a savings of it's on a But bit front. at sales, look a -- of with were speaking, course. on [indiscernible]. seeing everything with if clearly with VPG on XX% notably of today, debt tried product. derisk guide But the we this lower offset are cost of of bad some side most from we as based associated and the to

Mark Wang

Yeah. And the then David, on update. Maui

believe hard -- it's to but X-year all, Maui. the the of today of wildfire anniversary first So it's of tragic is

happening so lot a And still recovery there. of

fully On the both operational. positive note, are our resorts

being lot are a intents locations And were for soon. that all purposes of tour -- said, won't were and generation Now be anytime that reopening shut those our new buyer down.

owner the on marketing Maui thought it of the still challenged, part is throughout staff near but rehiring say in performing our -- we but is the Villas, also sales not new to from West pre-fire. on It's So other Kihei, housing in lagging would But it Maui be well, really of that's we're selling property building where our of would our a network. related pressure and a well is -- Maui sales island come where project there. in [indiscernible]. That some I is standpoint, But has of for back. business Mali, product especially Bay the side only

Operator

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

Charles Scholes

a other some other What's and on expect your yen certainly, to number yen up changed gone Japanese A that show in your the then big or has questions positive headwind, actually when having but move a that for the impact? then And Mark, thoughts start so product? potentially really with was your see the questions. positive direction. demand you to Hawaii increased thoughts the way with strengthening now year of a are I'll -- here. what into I'll out one, might

Mark Wang

first been Well, quite challenging and currency all, Yeah. standpoint our overall strengthening, it's And the for Hawaii. right? Japanese a nice to it's for a from of for see yen Japanese tourism period members

-- Now really using us and owners opened was is high timing our Sesoko I our the a the occupancies into in effect when we're far strengthening but business the traveling good property, hopefully, Hawaii. are news Japanese good members, the and will on and is we the have the really tourism be we there Japan very, as as the for business off there from coming property lag where the yen -- new think in buyer very of there. But Japanese that's

general Our have faster Hawaii. strengthen than to back because commitment hoping of that's with back this and coming us. owners overall, they've yen that an being actually But that the improvement we're in the of come And owner they've the population part level and business. back, come really made that's the will

Charles Scholes

Okay.

some color or said companies. tends a purchase had about Can reorganization. the think that that that? My specifically to acquisitions, your I see. talked more where you that question, senior you level that had you give will And when within in middle some of about? is sales on us is in sales, is We more you happen next which exactly What

So more color, please?

Mark Wang

time we in a wave and quarter, company quarter that of amount -- importantly, sales of in a spend organization, were acquisition Yeah the much of a sure. as of the disruption outcome very integrating growth. the Bluegreen, really sales restructured there significant and broader much And positive and the bit with for We next And our footprint. is Bluegreen. was it's quite larger of we're a marketing with marketing restructuring a we

historically, here, -- had of in was XX% little billion give markets. at $X.X very us a contract doing core we centralized. We outside were of you historical of five our data 'XX were to you if Just look we that sales.

call So markets. smaller we what that we're distribution five billion our distribution markets. of centers of Today, out of destination sales, would $X XX% really in contract our volume it five outside with was big -- core

on have markets destination from grown XX% those basis. I XX% represents -- sales XX So centers a about a the five mean centers regional to sales move

our to create sub-regions. that strengthened regions So and our focus increase there. in and our support and those and marketing leadership oversight to materially. And regions, execution has and makeup We changed for footprint smaller two destination X regions of support activities mid-level the we sales to from market multiple out better went the business to to really larger

named was Officer, Tonkin, leading a experience operations, Sales large running and who Chief also new great background, Dusty and We Marketing Dusty Bluegreen a organizations. great has

in the new quite disruption, And the But out It so can as move. We of you all of imagine. all, did rolled a middle in bit create a big June. happy structure new say been execution as I'm confident will this very Dusty to and I'm very structure that new the and done, improve work confident I has our think is forward. leader, our going

Charles Scholes

Dan. reserve a forward provision it's up did and When quarter what I loan increasing your but the you that of think get queue. you couple want the opposed and call for opposed percentage percentage of up your making, weeds to on A you're loss and decision-making Okay. taking important. to sales this going do ] is I charge ago sense. as doing getting to And into here or however maybe or I this taking your thoughts back I'll ask sausage one hope and [ question before in question it, competitor the what's Why that. take more the makes quarters the around as all a

Daniel Mathewes

simple bad about it I provision, there's could -- as Yeah. as can. of No, we're we a think sense. makes I mean think I into the go to talking all when I variables. debt keep lot that I'll try

yet. a integrated fully Bluegreen credit what Bluegreen not you foremost, not and I HGV/Diamond would is integrated separate we process First yet. Bluegreen the into operating entity. legacy tell have The is process as is fully

to and perspective, you portfolio, Once when their things to at reserve that look acquired to at recall, Similar roughly went well, we as Diamond, which -- of XX%. before their doing with value reserve due also that put acquired they was about gave, last Bluegreen, but portfolio is the the post Diamond, XX%, we portfolio. fair are audit, applied them we completed you it's reserve when XX% roughly Their XX%. And from level a said, the on then same reserve that we in their them, realm our accounting. But early -- right of books purchase just their January. just We acquired in reserve XX% was of was as now which did their that the was still on XX%. is had XX% diligence, exercise acquired under

with consistent Diamond. very So

that you component. So have

occur basis and the to that month a applied the are wild swings to and this that basis. to that, quickly addition would you third at prospective that model those is of our years based even then the I defaults. originated again, and how like is provision utilizes monthly to excess thing have capture on we a that's to off tell levels provision, our changes mitigates historical static XX current on that robust And any other then loss goes any of we run country later our monthly a basis. And this bucket don't previously and but various are And competitors, debt when items ceasing The done data pool debt And also helps prepayments are that loans extent insights the of applied I in bad bad look we you loan, and by on of even FICO stage in. in account loss And consideration trends can. origin. of updated takes in in a is for very models

been movement Now we balances when owners think I the But operator in upgrading an defaults previously. The quicker knew XXXX. and and to our it would uptick than it true and but in increase prepared were you those the their were any whenever increase. loan some getting timeshare delinquencies upgrade delinquencies extent, larger. alluded they've We you were in XXXX it comments, they defaults. they To that's expect faster can in for to comes upgrading Bluegreen, Bluegreen, people and balances,

I because we're I there a long-winded our here but rate we think answer, this long-term everything than for I the run than still did were That was obviously percentage, impact that sooner but it think but sooner looking year expected. you expected, we we very expectations for. captured in originally that anticipate mid-teens got

Charles Scholes

I with [ jump back appreciate on at keeping weeds going the level. I questions. a some into things. the from appreciate. more know in I'm ] I having you queue gotten to such high

Operator

Our question comes Montour from Brent line of the Barclays. with next

Brandt Montour

concentrated if Mark, the the manpower So the to these the of Diamond that and when we of had go that were footprint. legacy sort back you [indiscernible] the and that were you message new could at -- exiting the sales overwhelmed sales just was in beginning smaller guys resources centers year

extension that at same if lower of element a characterize a in centers? so the by different terms an those year-end or of may it sort purchasing deterioration of is in resources how third and capacity. compounded would It adjustment sort of understaffing with the the sort like it's adjustment Is you could sales seems of it 'XX bridge that made of of now. And sort into we be you going this problem of

Mark Wang

think that pretty I well. Brandt, characterizes Yeah, it

as mentioned structure this integration impacted rolled work. the process -- final was lot in leadership June. quarter. teams from we the performance we've this redesign. unfortunately this And went completed the the back And had the think We rework, out by And result. a it distracted we we previous through through work of right? answer, I our I We until

team of appreciate living they're going to going to needles pins you out on lot people a they're to and to where As be trying what and can going here. or they're be on whether position figure play the

knock-on So kind knock-on towards a it and disruption in hiring then a lot some the a had then which the of lag you because marketing effect staff, availability. And from of in limiting of sales did was staffing standpoint, have from effect that. it

it's identified just what really, behind then this on on we last we've that, so fix We're And out issues those hiring. coming the and a bottom, lot behind organization on got And frankly, structure the on that recruiting. quite seen the see have of disruption performance new has of time. now than We're But fallen behind and long staffing. on we've did bottom in seen we've are. third seen We a just for but there from us, go And more top to other of we're the customer bottom year. of variability the a there. And than in new the pressure standpoint stabilization the in buyers buyers we've apart for things. just

saw July Now to trends stabilized relates contract good we some it July, stabilization. news and in is we May. as what VPG And line with performance, more April in saw and in

reorg teams pressure of think the to to the standpoint. But the talking And seeing it of stabilize helped we've there pressure customer So consumer spend once I required be hesitancy. from is club. were increased make disruption sales discretionary level the just are these just on commitments part at that what to our some [indiscernible], got have we of

it down our wait-and-see I work where said And people that and the the year. we But going for we're just improve think we've some of the to to felt guidance them. situation, think issues we was important being a bring approach. macro rest to are more of current But hard. taking identified that -- I continue bring with the

Brandt Montour

assuming in into we the more question, a good to Are to consideration that question really something to is the half what you my When next at outperformance. something had level and I'm segue did what assume follow-on VPGs into rates. into VPG experiencing. July the David's you -- uptick been or saw half similar takes back Okay. is regards bake back the guidance didn't actually trying earlier. year look With but that which of close That's was a to for the get VPG, really you you conservative? that It to second half which guide,

we happen way. didn't what a say nullify me Let in that saw It different QX.

into does it risk So take consideration.

Operator

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

Benjamin Chaiken

going morning. Sorry, on there's a lot this

to So something. clarify just want

macro then one you're cut, maximize provide on the accordingly adjustment don't to and efficiency? For the bigger follow-up. And to sales force point the execution the guidance mix issues? a you a need I and side, Is commentary. simply sales did today and between guess align I that company marketing totally follow execution just the And then

Daniel Mathewes

macro it's of Yes. and us there's think With because difficult built with a in bottom amounts high referenced heard you clearly it's that bad just a that force. down your macro. guidance, flow to disruption a on breakdown, extent, not estimate driven it of ultimately, did to think line to little debt offset primarily are I through break lesser COP. probably a, Ultimately, has bit specific pressures by the and say, VPGs on the just from it to a macro we've I and regards a And sales we between

that talk want XX-XX notably on XX% the split the a is sales, to about breakdown the just little debt, So offset we really VPG and contract between being COP.

Mark Wang

and for look execution. we really regional markets. one, the Yes, smaller areas. critical we 'XX over centers. We And side, you I decision number our to reinforce in again, [indiscernible] to prepare years regional realign needed outperforming also wave overall talked improve organizations to of importantly, to leader. all center our one couple markets, about Ben, we sales on needed five ourselves sales of our the under I of They're dedication from growth, the made markets at the leadership to business, think right? And greater looking sales more again, but five that XX restructured mid-level When today, the big next execution we've markets. went we at And on regional and destination the these last model also Bluegreen's oversight learned

around of part just was disruption lagging sales ratios, on around sequence perform and key of are our it was for organization areas organization, we that important that's got in We all execution, around problem the restructuring. But levels. and in marketing staffing execution noise lost the out well, part because our of the efficiency. certain also of our So the

some there missteps new of the working proper oversight. not will occur structure there with so that now the miss identified we're And those on. and we and occurred we have that that things this the because are And I think

Benjamin Chaiken

Okay.

sorry, plans and on this noticed is kind quarter was related you [indiscernible]. Just -- scrambled and something the was of you choppy and or intra restructuring rollout this reacted then

Mark Wang

number -- a was in This people XX out. figure and room of let's a this in days for put a

of so a There's and was And time. into spent this. work it a that of planned, lot lot thoughtful went we

the on focused going that work a So discussion we're a this not leaders were lot optimal of there lot necessarily of why were the and design. it a execution get to because of through to lot took

July. So XX. bounce the decent. June I rework -- again, say, saw May kind just the again, fell we apart. on again, And was announced, And of would in June think, April, were but -- I it back

a as sequential was from July actually as a standpoint So good month had. we've

about that. feel good we So

pressured out we're buyer new said, cohorts being being lower still on that side particularly the Now with wealth there. the

Daniel Mathewes

additional something color. And some to just add look, just that, to

knew it's methodologies a day we Diamond, think literally restructuring picked closed to on the and -- Diamond day on we X. they I we compared on acquired picked Diamond. X. worth had headcount also out. contrasting out, did had sales the When stood We Everyone leaders where we

With the the for identify for talent region. the to there acquisition point, that right the oversimplified was of Bluegreen right right XX in room earlier days a the to Mark's and team leaders

bit clearly the you've to up end better business should entity. a that of identified a does in is it's what to. run because the distraction, a right consolidated Now as you time ultimately, Mark But alluded run

this a it So call I know thoughtful process. I don't more of processes thoughtful run those. you complete would when if as say, I you choppy, disruption a bit was you have sometimes would But hey,

Benjamin Chaiken

And then really quick follow-up.

some something Is new to color? 'XX positions through So I you those the it ramp-up correctly, sounds and look percolate like some new is if any interpret like? or the going the year of mid-managers you've leadership rest got into or what of that's this

Mark Wang

that's that positions a little new identified But family Everybody with moves some and been disruption of part, the But there's all most stuff like that put with dealing us. are have has have [indiscernible] behind getting people involved still people do relocation and in that's place. been stuff But are moved. most There's we the into for still that. named, here. and their

Operator

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

Chris Woronka

the I maybe financing minute about was we of a buyer it's spend and behavior And the more could about generally hoping kind talk first-time questions side. on buyers. obviously,

just figure anything finish matter trying deposits to are are incentives deposit like are to close are someone so alter any line anywhere are or and over the initial line point? the the not financing no seeing you that out get they And is your trying getting you or that. at to finish offering to -- lower I'm there? you change strategy trying mean, or I

Daniel Mathewes

great Yes, it's a question, Chris.

it various we'll in has I'd So rev routine a fairly our do if of hasn't in the when definitive when drive sometimes worked it we where definitive want required say level equity because has which that's from It take until to a defer buyers needle, answer for that deposit owners the it is not meaningful say, I center moves deposits lower rev on you're the and cases definitely a it's looking time a policies, a as to they implications time, when sales run to financing at it's comes depends over internal ownership. comes it or because we down. rec into it also would see others. It's promotions one XX% sometimes is to element doesn't. not, some works to distribution helps promotion step really and not rec new have our as

will it from always on run to as down where might minimum. additional not there's put cetera. how equity that bare When a comes potential et upgrades, just well to much have look different we owners depending for metrics they've equity existing So built,

them be uptick to the from So I time, solution helped. they to we close don't and new But definitive think time that run rate. via is can

Chris Woronka

need is you you've think then and does make want obviously, as just in of Bluegreen you as bit it guess be all hear a for to made Okay. of do I implicitly table it's we follow-up, you smaller the there's kind or kind And this a do. environment Is changes which fits that vacation, other travel think sales kind more a a of for product helpful. evaluate centers But a post you on something to That in into current you little from a like companies. exporter as whether if this we're these that while? budget going something environment, the new

Daniel Mathewes

our Chris, us right, I puts widened scale. We've Chris. made our diversified think we acquisitions We've widened our and position. the that product in great Ben, offering actually, really I product, actually a Well, apologize, we've

our in in And think an really a we're offering. good place so I brand inventory from standpoint

at So the And on broader a -- with importantly, out diversified new well. new pricing top do the taking we've there. I comment the to these some middle got base. look world-class our buyer on partners that and of okay. performing buyers we've lead of a flow side been cohort and our And still the this. is customer make we've good performing And third back, is you if want

a for bottom intact. buyer third. in cohort XXXX top has new not transaction buyers it is XX% like biggest the so falls apart, it's new bottom And It's average price it apart, really challenge falling makes Our than still -- today the -- is -- higher and was challenging. and it it's when been that the the when you

be means believe this but point, at them, difference to through a our other Max, meet have course, we through. we're we made bottom right when to until is get out big this to once have legal now will Green a of now, of is what steps hesitancy on have business on we through. And from there are successful some considerations number we a us the walk not And walk they're make of end on because waiting rollout. we acquisition make third. communicating to the of year as is as the we we of we've probably Blue a will there adjust that for to this to that looking means Bluegreen Bluegreen got that overall the go that roll that we right introduction in But towards our so system process get to that at system number ways And product have communication we

Operator

question Truist. next question Patrick Scholes from is with Our follow-up a

Charles Scholes

local if the address Can you're the demand this local -- here. number markets a more or to that? have And little reorganization and if of about is so, Dan, how bit related do I of a softness? of some you questions in follow-up seeing talk, market Mark does some

Mark Wang

Patrick. a that's good question, No, really Yeah.

and talked talk about direct our pipeline we've related comes our what -- But our owner flow some about of marketing. pipeline. it's there. the direct So buyers. and to staying it's on what we're and very on current marketing frequent are is XX% had. And for guests We the now. definition And new better, I new is we pullback macro pipeline And books. about of business, execution tour property. our owner a more marketing think we less seen actually lot it's see about buyers we've local our on have to this the our an we And challenges the that a that is markets give in marketing that to a hiring, first guests an And that I about, softness right in. just those the on rental guests of And do focused are It's And you can identified We've of talked as is -- this place. our half. the that changes that in all we're but lagging some been area saw are it. of hiring we in local we've area

we'll that the of believe the get bit move a turned we back we will so it take into little time. as And But half of year. around

Charles Scholes

Okay. I have three more questions here.

result cause it some to you large maintenance large a surprising belief initial over next a very it put sort First certain the the what what fee to -- you quit surprises. maintenance might maintenance year. resorts of not be? percent sort Any loan this -- for I've to reason might any going normal your year? losses increase And one, next increase and be up, product I come just of your indication digits very number for and in that level, growth Is is had you and and would of a have just XX% yours customers initial this bring when and shocks mid-single a from expect high and in competitor year the fee XX-ish indication

Daniel Mathewes

So during doing, pandemic COVID. I'm the competitors we're sure during utilize even the -- are we but not what digits. expecting And normal mid-single consistently we

fees digits. We continue kind maintenance move up our to mid-single of that

requirement catch-up there's So no now.

to mid-single-digit be year. more going than anybody not coming we're a this So surprising anything with increase

Charles Scholes

Okay. Good. Then two more questions here.

initially imply point? with bottom And at is related behind the Bluegreen your acquisition? your synergies underwriting for your stand for doing targets this not unfortunately well. to that do tracking third about versus where that, really Does you talked You this that

Mark Wang

I'll take I'll about front the end the that, of synergies. talk Dan and let to you

moved KPIs we're on across a at down all Diamond VPGs brands everything similar legacy. looking our is HGV basis. the and So And look, and

difference no the the businesses. discernible So I across there's that or would is really pressure any there of say customer. on declines Bluegreen some

around mentioned just to that few to of out seeing I roll minutes that's what and think that just going kind I ago HGV members, is announcing we'll Bluegreen benefit going waiting this later a the be year. and

where at we're synergies, as on can take it maybe far Dan, As through that. you

Daniel Mathewes

Yes. that to our the from right as from it of $XX-plus-million We're et rate No, we track a of cost headcount original today. rate think absolutely. you cetera. That expectations. -- synergies run of a on cost $XX-ish-million item are on of synergies, at comes When you includes run reduction, primary think when cost synergies,

million towards driving we'll So XXXX start more mind, don't when point, centers sales of that that expect changes consolidation be I to that, we for our space even revenue change $XXX in issue. From rate original expectations. line like start a office with health resorts savings of the more in rebranding the perspective, balance 'XX have benefits realizing yet you synergies at to year, but of the keep any items such a from or is this the which when you run that's materially consolidate in

a So the although zero it's bit, it's expectations. not line [ it's with in ],

and good on from XX. track a in perspective June a of think we're So I synergy place as actually

Mark Wang

Patrick, just then I'd -- And add on that.

this you we've larger just about you to feel about non-branded got built network, I XX% sources, there. We today. direct that into the XXX,XXX we our these especially our diversified our talked XX% become. Pro And going acquisition these -- with XXX,XXX We've size. brand good our to scale did of all, all resort deals XX% think that resorts. talked free We've feel about Bluegreen We from recurring flow -- man. we've how increased Bass and company. the tripled our it's when distribution got ability marketing long-term XX% acquisitions. partners moved really the to in First our much about the today. benefit great we provide We've EBITDA as And of how leverage much cash above conversions from across over it's members, about packages importantly, both our and lead know, And the

of cycle. this really So ultimately, supports more a really going our great this the is flow to return we additional cash shareholders capital feel throughout lot that to good return capital to a

Charles Scholes

And ever And this your one quite number this new was morning. -- of Okay. respond is and it's and I'll on to then person I a around preface here, member a would don't earnings question last in or you your but qualifications the that with this I've that really really Board joining announcement before call, and Board morning. alternatively, concerns this those an I questioning topic have control? of regarding question asked this received experience How inbounds not think

Mark Wang

we has yesterday, was was approach in and business. Well, was qualified. background is on we very us But rights She And with announced first within deal that than up and board the Board Apollo thoughtful board and leader we been We quite very -- more to first just business. first we the she that our Diamond her at and new believe she end strong she was in believe board meeting did active very has and, -- two her speed the in of our the had her yesterday, with have understands importantly, the seats. frankly, day, the check meeting morning this to the member Apollo.

really So I choice. good think we made a Apollo think

Daniel Mathewes

think add a to to been can involved. I more, has I And only add just mean the little bit Yes. sentiments. I she

We 'XX going have -- since to known back back her even XXXX.

for in industry years. involved She's number engaged. the been a much of she's So very

that board. excited we're she's So on the

Charles Scholes

good That's to hear. Okay.

with folks alleviate of that those have think to reached will out concerns. Thank me I this who you. the some morning

Operator

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

Mark Wang

Well, thank right. All you.

acknowledge that wildfires is not remiss wrap the be up, we Before I'd Maui. the today of to anniversary in tragic X-year

you through for we this resolve another. and the all but occasion, work to their will will teams speaking As and to look recover, take that and Thank support hard to They forward our to and and us joining the time the you. service members as guests of somber work local thank today, long we Maui to thank tragedy, and it be you for our term. soon. courage mark one for we West for to know there fully we communities community, we our show the to like to I'd Again, initial tremendous team

Operator

Ladies and teleconference. does today's this gentlemen, conclude

your a time. lines You disconnect you have participation, for at wonderful your Thank may this and day.

Hilton Grand Vacations (HGV) 8 Aug 242024 Q2 Earnings call transcript