Skift Take
The timeshare company wants to put the Maui wildfires in the rearview mirror. Sluggish demand and a tight labor market in the area impacted by the fires have slowed its post-pandemic momentum.
Marriott Vacations Worldwide found strong demand for timeshares at its destinations in the first months of the year — except in Western Maui, which continued its slow recovery from last August’s wildfires.
Marriott Vacations Worldwide said the consolidated contract sales of its timeshares rose 3% year-over-year to $428 million after excluding its Maui properties during the first quarter. Lingering sluggishness in Maui cost the company $17 million.
While 3% growth is good, it wasn’t the typical pace that the company enjoyed during the post-pandemic boom. Timeshare sales lost growth momentum because of higher marketing and sales costs, executives said Tuesday.
Maui’s slow return
In Maui, travel demand is weaker than before the fire, and hiring workers has also been a struggle.
Marriott Vacations Worldwide typically enjoyed resort occupancies of 97% in the winter months, but it was “in the low-90s” this past year.
Hiring sales and marketing staff has also been slow, and they’re not completely back to fully staffed yet.
Rentals are up
Demand to travel to resort destinations across the Marriott Vacations Worldwide network continued to be broadly strong, however.
“Reservations for the upcoming summer months are up over last year both domestically and internationally, and travel demand for Maui is close to pre-wildfire levels, setting us up to grow contract sales 6% to 9% this year,” said John Geller, president and CEO.
One signal was rental bookings. Marriott Vacations Worldwide also markets some of its units as one-off vacation rentals to make money on otherwise vacant resort lodgings. While the rental business is a minority operation, it generated $158 million in the quarter.
“Operating profit in this [rental] segment was up 34% year-over-year,” noted analysts Patrick Scholes and Gregory Miller at Truist Securities. “Revenues were higher and costs were lower than Wall Street analysts’ forecasts.”
“For actual rentals, rates are relatively flat but occupancies are up a couple of points as we go into the summer months,” Geller said. “People want to get on vacation, and we’re seeing that in our rental results.”
The “rental” category is also where the company reports “preview nights,” which are stays that travelers take at a discount in return for listening to a timeshare sales pitch. Geller said that reservations already on the books suggest that the company will have a higher volume of preview nights this year than last.
Strategic developments in timeshare
- A new Marriott Vacation Club Resort is set to open in Waikiki later this year, with strong reservations already noted.
- Executives anticipated continued growth in their international markets, especially in Asia Pacific. New properties will help drive sales. The company announced a new development agreement for a 60-unit Marriott Vacation Club Resort in Thailand.
- The company reaffirmed its guidance for contract sales to grow between 6 to 9% for the full year.
First-quarter results
- Marriott Vacations Worldwide generated $71 million in adjusted net income, down 34% year over year.
- It produced $1.195 billion in revenue, a 2% increase year-over-year.
- Looking ahead, the company reaffirmed its full-year 2024 guidance, expecting adjusted EBITDA in the range of $760 million to $800 million.
Accommodations Sector Stock Index Performance Year-to-Date
What am I looking at? The performance of hotels and short-term rental sector stocks within the ST200. The index includes companies publicly traded across global markets, including international and regional hotel brands, hotel REITs, hotel management companies, alternative accommodations, and timeshares.
The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more hotels and short-term rental financial sector performance.
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