The U.S. post-pandemic summer travel boom had a more significant beneficial impact than the effects of Hurricane Ian and growing economic anxiety, according to timeshare company Marriott Vacations Worldwide.
Marriott Vacations Worldwide saw 90 per cent occupancy in the third quarter, with tours falling only 5 per cent short of their pre-pandemic level. The business, which operates under Marriott Vacation Club and Hyatt Residence Club, earned $109 million in net income. In addition, it announced $1.23 billion in revenue, a 16 per cent increase from the prior year.
“Despite higher inflation, the volatility in the stock market, and rising interest rates, we generated $483 million in contract sales in the third quarter, up 27 percent from the prior year — with first-time buyers representing a third of our contract sales in the quarter,” said CEO Stephen Weisz during an earnings call.
Following its better-than-expected performance, the business increased its projection for 2022. Sales in the fourth quarter may only be reduced by $10–$12 million due to Hurricane Ian. About 70 per cent of vacation owners who participated in the company’s most recent study planned a trip within the following year.
The company’s executives said that because the expenses of their vacation ownership package are more predictable for owners, rising inflation has further strengthened the value proposition of their offering.
On the downside, a one-time accounting move left several analysts perplexed about how to interpret the company’s future. For instance, the exchange and membership indicators fell short of analyst forecasts.
Most of the company’s Marriott, Sheraton, and Westin sales centers implemented the unified sales program Abound by Marriott Vacations during the third quarter. Through the program, holiday owners have direct access to thousands of distinctive vacation experiences and more than 90 resorts bearing the Marriott brand. As a result, cross-selling might increase revenue and sales.
Growth through acquisitions may also be on the cards for Marriott Vacations Worldwide in 2023, which acquired Welk Resorts in 2021 for $485 million.
With the majority of its debt fixed at an average interest rate of 3.9 per cent and no corporate debt maturities until 2025, the corporation said its debt levels were under control.
In 2018, Marriott Vacations, a separate entity from Marriott International, acquired the timeshare division of Hyatt. On January 1, 2023, John Geller, the company’s president, will succeed Stephen Weisz as CEO of the timeshare giant.
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Photo credit: A Marriott Vacation Club property. Source: Skift and Marriott Vactions. Marriott Vacations Worldwide