Marriott Vacations Worldwide (VAC) 1 Nov 222022 Q3 Earnings call transcript

Greetings, and welcome to the Marriott Vacations Worldwide Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Investor Marriott President, Worldwide. Vice Goldner, Relations Vacations for Neal Thank you.

You begin. may

by facts the and many call. are Worldwide our today Terry, Executive securities and our Melissa, Chief and you, that President Officer. to John are Marriott our comments historical are federal uncertainties statements comments. I not statements Weisz, President, could cause and Officer; welcome our joined laws. forward-looking risks Executive conference differ future Thank These in results everyone Tony in expressed by earnings I SEC to Vacations subject or those which need considered of numerous Geller; our remind under described Chief XXXX third to am and Vice today as from Steve Financial implied quarter materially filings, to

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

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

ownership terms brands of vacation during – Sheraton during call the for acceleration the across the Westin in night, aligned of As $XX last saw we the release revenue. in you contract earnings our our resulting quarter, million and sales Marriott,

show million in schedules for these our in notes our receivable acquired the what the benefits. without for a accounting the in ownership reserves and increase to reported for to reconciliation the a The vacation an by aligned earnings for would resulting results also been release offset have We our provided our notes. originated reserve on methodologies combined these decrease brands $XX notes reserve

commentary With adjusted and over turn results our the today, my the to to now our to adjusting for it's call including of will alignment CEO, EBITDA. after our that, refer call our benefit During Weisz. Steve discussion all the pleasure to million $XX

morning, Good quarter and for call. third joining earnings our Neal. Thanks, you everyone, thank

been Before of battered in by back a open power Ian tirelessly Despite this, Florida. been area it's and and their as personal working affected our since safely Many were to started, the our as homes property. quickly month Hurricane outages possible. associates damage have to they getting get and impacted as resorts

the of Our been thoughts to and in aftermath prayers leisure travel. It's Marriott as the Vacations a demand suffering remarkable storm. year see are still for continue with those high for we

they view examples; with are important travel Many proprietary an seeing X/X over leisure about saying trip contract; told travel In of as three months. are are us Day the for Air believe All economy; weekend of a first American next planning survey, time more fact, to exceeded as since roughly a here few if the worthwhile than half a economy XXXX concerned XX% our a the Labor that Americans in And were pandemic was even began; they investment that essential all travel the travel budget recent the owners priority in surveys and

members going to Regardless and the on to quite a make we and time. to lost our of up owners, and seen they delighted are be family of to just that in friends haven't experience people are We guests. reason, honored see vacations, while some for for part visit some

of our extend the to whom associates hospitality most my award companies XX happiest They best I'd news, all like this industry at that number exciting pandemic been satisfied list would Hurricane without I've is years sector. possible. most coveted are very first our Newsweek's and XXX I can during the work. Workplaces associates, and Top none recently, on given a has Another where managed Most to years four the the global company ranked Loved in appreciation This to of and the associates difficult attest and our hospitality two in are in business. the of for the who ones impacts are through be the Ian. been

year with of quarter in continued XXXX, continued from urban our our the we of from quarter increasing X% to both elevated, model. earlier. business third a Adjusted XX% the volatility quarter, strong the saw stock the and of XX% were quarter grew XX% million our the in Pacific XX% Asia recovery mountain, quarter. signs in relevancy core offering, illustrated inflationary the business during product demand interest approximately the generated year-over-year occupancies and year-over-year especially VPG contract environment. to We of illustrating the third higher demand, in while by on our golf third moving again occupancy So a with contract third XX% year-over-year grew to results, up leisure in increasing for sales tour year higher XX% pre-pandemic and rising beach, our the prior inflation, driven our once Tours Despite the than segments. representing our of rates, X% flow. markets of markets in remained and the today's $XXX EBITDA $X,XXX, sales within third by in a buyers first-time basis travel ran high on with growth XX% resiliency of

vacation by exclusive potential. Westin Vacation previously, currency. new Marriott-branded Vacations. a in XX new during owners. Marriott, a program, Abound sales portfolio a by of As leverage quarter, this Through world experiences We and Sheraton Sheraton to to under by launched during points brands direct will Marriott Marriott-branded strategy products owners unifying and vacation our interest the our meaningful multiyear thousands Marriott Westin second we name, unique the third resorts we've announced our increase launched around Abound umbrella our our a access at and and of of the majority digital our to we centers have seen journey ownership of Marriott, using started the Vacations more common Next, We than unlock growth by and quarter

forward, will our services continue improved with direct the success. our in Today, leverage technology our We've of has improve and direct programs for been digital marketing our campaigns to technology are Looking nearly a experienced engine new owners. to This our using in we've all reducing our we marketing significant our with investing costs. effectiveness investment technology. response the sales in marketing substantially marketing, also and while lift further great efforts our booking rates transforming

program expect This shared property six with Hyatt perspective is swimming other our the of venues end the Hyatt to and pools, already and which week. the with open hyatt.com portfolio, Hyatt delivering vacations the technology by Welk Points a In me we on co-located, this beverage to great to our of authentic integrating we year. the make amenities, a XX-unit our affiliated X-star legacy online our our experiences. outdoor offer and them Vacation We we legacy moved campaigns, food rentals to Welk and on We've are second in launch former great Vacation resort expanding the include use from cultural of the In to growth Interval promise Welk to offers with Club. continue plan Resorts International, the located business, progress Renaissance four Bali Nusa including to excuse and Bali guests villa – Dua platform rebranded next Ownership continued Resort businesses.

marketing on-site harmonized digital and sales our service consistent experience, plus integration efforts a culture, forward, Looking and will include a program.

enhanced value are year-over-year, We in Third-Party grew working driven plus for on also affiliations which XX% provide their will to signed our existing the ownership new primarily new incentive by additional vacation In for Exchange offerings & Interval we developing last our purchases. year. business, membership International provide Management owners,

increased adjusted increased revenue strong by and and which in EBITDA Excluding April, In at quarter from and Aqua-Aston, from substantial cash flow third a summary, EBITDA as cost-saving well driven and adjusted transaction fees to benefits adjusted profit deliver had VRI expansion Americas, getaways, expect exchanges free this sold with year. margin initiatives. as XX% we we our management growth higher

We cash amount we a product discuss are seeing which will Tony in Vacations interest return and Marriott free shareholders, to substantial launch great to of by Abound flow later. of the continue

macroeconomic John. very our optimistic of remain With trajectory the over Finally, call I business. despite long-term to about the backdrop, that, the I'll turn

and everyone. morning, rates good turn our outlook has liquidity the in of balance ownership with segment, today's lodging with of only levels. for vacation well the of as the and to pre-pandemic our Starting strength review proposition as product third position, compelling quarter vacation average Tony I our Steve, year. am our environment, ownership the above strong value our more the well sheet that, grown balance After Today, to to discuss Thanks, going call I'll results. over

for sales with a leisure quarter, improving capitalize contract travel demand the tours XX% and XX% to continue VPG We growing third during on year-over-year increase X%. strong in driving

X%, also We vacation. the financing adjusted resort was future of growth available profit packages prior maintained third unchanged XXX was year-over-year XX% prior X% well compared as year million prior a to quarter. available million. XX% million, improving our business quarter, Profit costs. rent. development by key basis our $XX XX% With tour contract $XX package strong of and those booked in $XXX increased package greater nearly year the Profit their by XX% from in per vacation pipeline, robust year offset increase improvement. the was to to business management preview points reduced in to development also parts to driven ownership the XXX,XXX business in inventory occupancy, quarter in with compared third Adjusted the the with lower rental a having compared ending stickier the customers owner quarter, a while revenue our already The $XX profit an in sales, margin million, to of increased rooms nearly transient which performed increase was profit

million adjusted Exchange In active result, Third-Party in the Interval delivered segment increased adjusted our $XXX XX%. quarter a approximately of year-over-year. to in margin Management we EBITDA and third XX% ownership increased EBITDA segment, our & vacation members As XX%

XX% XX%, Excluding VRI Americas, new year continue compared recovery onboarded by basis XXX Aqua-Aston Exchange VRI points on up. our as increased driven basis compared In year Management total, XX%. we RevPAR to adjusted year-over-year In year the ramp a EBITDA the up business, segment was and Third-Party Americas, segment the and earlier increased revenue more this XX% to in to accounts increased last increased Hawaii. margin EBITDA occupancy prior our to than adjusted & excluding in

$X Finally, including intelligence G&A higher third capabilities. artificial procurement year-over-year and increased transformational and expense corporate million of result primarily compensation quarter as a the initiative in spending,

up quarter, the XX%, company the higher, Adjusted XX% of quarter, compared was over points, adjusted the XX margin strength of business leisure and travel initiatives. demand million was Tony. that, With model, $XXX our to demonstrating XX% the the compared the to total in XXXX. compared to leisure-focused the for EBITDA transformation basis increased and quarter I'll XXXX year benefits to For of call to prior our turn third EBITDA

ended very under our in billion Thanks, $X approximately securitization also revolver. gross John. $XXX our I of liquidity, including $XXX receivable of quarter happy and strong million the cash, am of eligible million quarter with third notes million for capacity results. with We $XXX available

our debt had outstanding with volatility which the XXXX. the net corporate of leverage at X $X.X corporate in the revolver debt X.X convertible We times notes within end used million markets times, debt-to-adjusted this our range. our EBITDA Given X.X $XXX the to the of was year, ratio quarter that times to we matured of repay billion targeted at in September

the we debt rate an with and fixed rates interest have are on environment, our XX% as positioned interest well debt corporate the maturities corporate rising we addition, rate average of until In XXXX. X.X% no are despite roughly

debt this We securitization $X.X a quarter. of we securitized and year the complete mentioned, related billion receivable we also previously – expect discussed we fourth in as our notes had to non-recourse as to second

share We've to Finally, with the global various in amount headwinds receivable and a this defaults and despite line well repurchases notes levels portfolio XXXX. returned of also cash the through is market our shareholders year. dividends experienced in experiencing, significant to perform economy continues with delinquencies

shareholders in million During million the or stock. we and $XXX through of third October. returned September, million common shares at stock than to Year-to-date, our a more common declared repurchased of price the per $XXX $XXX we've million paid $XXX per share end X.X $X.XX average of we repurchase of of the dividend, quarter, share including an which

interest the ownership of unification rescission the and while for brands been recognized the of vacation were by during our with products sales As Neal is our which historically Marriott-branded takes period Historically, Marriott Marriott Abound Sheraton in brands the after generally mentioned, interest we to and XX connection recorded sales of as for of quarter. third our which days, Vacations, have Westin the of revenue the aligned Marriott vacation contract typically closing, days. our after sale revenue ownership launch ends, XX across XX the terms

Marriott This launch revenue of following and Following acceleration million of Abound for EBITDA change sales resulted $XX contract now benefit with rescission, and a the our expiration brand of of vacation revenue by adjusted are Sheraton third brands. our recorded $XX Marriott Westin ownership as of consistent million. the in in to quarter the Vacations,

and and resulting reserve the notes in receivable. million $XX ownership vacation notes our Marriott, between aligned reserve on In Sheraton addition, originated brands, receivable methodology we and for shifting of acquired combined Westin

a in million decrease and $XX a While this didn't in profit. development impact profit reserve adjustment million result total it to did financing increase $XX our levels,

our to on guidance. XXXX Moving

the broader macroeconomic levels. tours of to the Despite we quarter, fourth As to we to expect the this, expect enter headwinds approach we environment. continue fourth battle quarter pre-pandemic

our we first-time more levels. expand mix to VPGs remain and As buyers, channel above would XXXX add well normalize, but I expect

negative million contract fourth to Hurricane $XX million Our quarter also guidance Ian. impact reflects sales from a $XX

to we down expect in XX% roughly to business, keys preview the and As average the fourth the key for In midpoint at we rental by per transient contract be the packages. fourth grow period expect revenue in to of usage year. our a owner but slightly our result, to same sales quarter quarter, increase rented due last increased guidance over

we quarter rental result, to fourth expect profit $XX $X to our million. million between a be As

also $X Ian. offset million X% at $X partially the Hurricane expect a For EBITDA due the midpoint, we impact the by related decrease benefit adjusted grow quarter, the fourth to roughly of including to million alignment, a to

this increased in the at remaining will the in related pronounced have expire fourth have to the quarter. year points negative profit That by on that As discussed EBITDA quarter. reduces the of XX previously, owner we points roughly the fourth negative usage our adjusted forecasted impact a impact COVID end rental growth percentage

have new Turning to Waikiki we excess for cash though capital-efficient with with now in do of structure place, plan to the low-cost XXXX, flow, currently inventory. $XXX no in continue Resort we ended we and the material our for quarter inventory million new repurchasing inventory reacquired commitments

between to the XX% adjusted be to XX% year cash flow EBITDA flow and be million. We this expect $XXX cash our conversion $XXX free adjusted our rate free million to in range and for to

growth always, business. compelling cash use As In of free we strong use acquisitions. shareholders. development third to or to absence will free our of by driven remains had summary, strategic look it the our quarter a our best cash flow returning primarily for excess acquisitions, organic In we flow

we've our time fourth achieved. forward, ever to levels and XXXX full the quarter backdrop highest is expected and expected began, Looking adjusted the the the to volatility are despite markets, tours the year approach economic in XXXX be first the for EBITDA pandemic since

Marriott As your that, With be always, we'll answer we questions. Worldwide. appreciate Melissa? Vacations your happy to interest in

Instructions] line comes question. Ben with question the of first Credit your [Operator Chaiken proceed with Suisse. Our you. Please from Thank

Good morning, Ben.

Hey, is it how going?

Fine. How are you?

think of development for in we color kind of believe, XXX,XXX margin about development margins, other guess, process To if that an not that, tour both of mentioned I point, think we if more fair those. looking rentals, guess flow then on thought mitigations XXXX? this positive any should flow, tour you mistaken. of the about which how you'll booked. I on should there in is side is a for So to A, next think the am XXXX, a on in impact year, have B, for I material way packages, I in capacity any? tailwind and XX% I terms is Just

tag We'll team this.

question, As the more at the in nights did currently give to XXXX owner we first books looking on it – the I relates as point XXXX. from and room example to about time on our specific have XX% the only think books, your nights, in can our preview quarter you package on than we today address we an XXXX, same room forward at

from tell out We'll as is nights robust see, there owners of increased and wait the continues obviously, obviously, to about how that very still room number at So owner even of will tours. through play that and I that occupancy fourth I is XXXX year to use XX% demand this the looking continues was, QX. quarter than you build. mean, it the year, higher again, in

your that's, in deduced standpoint, I I misunderstood question not of believe I'm at for from – So I if takeaway, availability rental going that but, you manifest itself. we're will from maybe that. more fact, sure a an least that, to – lot my have necessarily capacity wouldn't

back see the flow there. back we next talked Yes. it and And little as on in-house. linkage bit how tour off are add we're lot We've we've a going just about said, more there packages more a pre-COVID what of the we getting and little to to in-market, tour year. growth Steve turning But think markets are we up. a about penetration growth COVID we opportunity I'll during forward, back turned bit going other getting going our just talked just you in rates to continue on tour into just that about lot a get from of then

the COVID Abound, obviously, but and that's remain program new come year, the and So, overall the for points to owner at of the take from about reason and owners of call capacity another good the hear high in news want should is usage expiring the, tour. with it, end the launch to here

in-house, to continuing drive tours think buyers setup well board, owner well for the tours both well is I across in-market year. the other and as as as as So, next first-time growing

term, do better And development repurchases, a costs the to of from to cost. in excess years. of books. a for we the as on just given couple past, our said manage longer continue inventory to we're the great we We'll we've the Ben, product do remain margin, but product on because expect no spot those commitments think that next now in material right now, right continue to low our best here I

opportunity the talked marketing costs, technology driving The in efficiency normalizing Steve margin. potentially is as and sales and down is mentioned the VPG on The side that to name sales that. script marketing about, of to his more in notwithstanding other and the and all game it we've bit a is get

good and keeping where as So the them margins XXXX forward. we're about above well go development at we here we feel

first That's helpful. the of this was suggesting was kind is year. rollover points Yeah, on super what point, – I expire just that I those

that that were a You up year, super would rentals. or process capacity talking the that playing for role either XXXX some would this mini-vacs thus, my XQ Thank up that in you. kind thought about in color But of open and helpful. is all open

you. Thank

you. Thank

from comes Truist question the next with Securities. Patrick of question. your line Our with Please Scholes proceed

division everyone. Good here. Hi, questions Did called as hit hurricane. Patrick. morning, due your out experience couple well? the that II to some from material anything A T&L's EBITDA division had RCI

Interval XX anything resorts the and their material of has in Not closed, currently, are portfolio because hurricane. that still

We from those deposits bulk any are taking further not resorts.

things, and So not the concerned scope total but be something terribly in that all it about. – to sizable is of

over at picture were the Welk acquisition. the now towards a then, the million time EBITDA, expected to laid Okay. its that of go of projections guess, Originally, the million How of Welk to Welk year $XX question, would you say expect your That's original projections I to want three initial $XX time about to $XX back see and you're and stated that. on out sort at double years. over since a been, the about was which of bigger next acquisition? million XXXX I tracking you the revisit had you. cost adjusted four Thank some And synergies to

longer very progress reportability instance, kind there. it forward-looking I – the the no right a the track has and from we pleased of we program as we say it Yeah, the you general making we what a is are separately. been can call We've at Welk The thought or expect broad we that, sales, how the are for whole or mean, brush we – of Hyatt integrated answer it acquisition performing now ahead look to acquisition I standpoint. we be at. out slightly contract underwrote XXXX into to with you on

you, my I very – it So head million where do. pleased about the the Springs just and properties last speak it's John don't with one was maybe $XX Tony But as your at we're that to pleased to we're not Welk are associates where million $XX tell the the going. week number. have the but off I just are, well. can very stands. I of specific about of I or in transition owners excited I Palm only or can't top

with pleased very making. progress we're we're the So

lastly, then, your know at earnings last this be the will I year. And Great. end retiring you're - the Is Steve, us? of this with call

be, will closing you've a little Patrick. and of steam remarks, my It out taken

thank Steve, for well, done. Yes, you you've everything

I certainly You're true this missed. you'll in absolutely and legend look to adventure. forward next your And you a hope be industry,

So thank you.

I you, to the stands it for watching from you look about excited front where and that's sidelines business comments. Patrick. am But much it and very in progress. future how the to and the thank continues forward your seeing of Thank I very

Steve. you, Thank

you. Thank

from proceed question line next comes with your Our question. Jefferies. Katz Please the of with David

morning, David. Good

marketing taking And are topic apart? I'd it's sales. Is my we digital and that there everyone. around or of greater question. to independent engagement of that digital that you've separate and through ago initiatives years efficiencies Bonvoy. part you're discussed the those back And about what forwarding of Good and just sort and driven Marriott morning, to comments a from technology like one thanks go made for you referencing

package from People we'd now or then center. a where center they and so used customers Marriott had emblematic Marriott package with and to then work, would eventually, activity, in a the to comes a to booked using want contact speak. technologies have we us our identify approach, are to used package. XX% can advantage done and we've get the Bonvoy. go the an how book what Clearly, it any that through We Bonvoy of remember hand lead. a digital the Currently, that it's And new we booked then of online. through you contact we'd that, without packages this They book and They call go can duration. activate with XX-month call, off, themselves package, go human the can forward may

We cost. are very our lowered excited, and increased it's rates penetration and obviously our

So that's example. an

for We doing able been continue to around, activate retargeting, people as other to we some not to which channels means be good looking to at reach look have that. that ability remarketing our before, And them. to also the also have plus, we're been were we site that to out and that

of things positive. those are All very

As we be at continue about things pace to a to obviously you catch continue try David, be we've progress the up. will done forward. to how our rapid world, best imagine, to forward-thinking in to then digital try to want very to the and might challenge move But

– can lately. it's asked it I ask it number a sound one. a going like times of been I'll I've if But call And a Understood. negative and a to question harder

and As levels about think and in recession we any way into could can VPG flow of year? still that? Is flow measure VPG, us how a VPG? that the help approaching top-line there next and of you half demand about with Should us kind well back moderate tour get tour of we at you and the look is think elevated, help XXXX drivers

people to timeshare conversation to it's from draw economic VPG backdrop what acquiring direct macro approaching can is and this away a from our call component percentage more and a in growth the of of the timeshare any happens several not to VPG. us terms a take you I to as it, if with difficult degree outsized a interest what over what closing the, correlations level, should isn't possibly perception, and in in have it heard of discretionary last growth. clearly, - a contributes insignificant would that is Clearly, they what rates around impact -- some in this remarks that of Closing an seen continue while rates. years exception. At between we've negative itself I that going what a are people you can But purchase. in To with VPG obviously program, is repeat

on optimistic maintaining some what of on And VPG what well we are largely we're bullish the doing of very about front. we've the pre-pandemic levels are because whole We channels, that. the done VPG any that am on concerned confident aren't I economic feel holding about not way we've in in the trying in what we about that's to, But Clearly, we digital were thinking. very backdrop. our pretty suggest seen. that above they

And one it's said, I what not Steve economic the thing add to think backdrop. to just even

a about long you from anywhere from work travel up people now. I think every could the it has way weekend weekend vacation changed. talked world now and and somebody because some the and be I has changed have And can think even of pick that airlines the

proposition, forward, backdrop product a well. So is way help are then will we people right are think the concerning, some encouraging. of leisure those instances but then our as going us value that long good a And now as as little is macroeconomic for bit traveling

that, relative And points upper is on to the I side, think thing a remember, one average upscale price are focused luxury We differentiates only our on company to little other household add us timeshare bit the target income. right? just customer, the

about you see recession, customer that some worth Our good impact Not deeper that that, a efficiency. $X.X that, very of like target demographic on a owners and wouldn't to that a feel we strong self-reported and point resilient consumer. million But saying in have we strong is have Steve's very things closing so a too. net do we

stock stock the would everything. going Understood. call. not think you've go And the take post Thanks and about up to at been I really your the time on should would Steve, look day it of I chart is that for in earnings good there last spin the I pretty that. personally you feel

Thank very much. it I David. you, appreciate

with line question your comes Instructions] [Operator from Please Montour with proceed Our question. Brandt you. the Thank of Barclays. next

good Hey, Good here. I want And to add morning. to Hey, my Steve congratulations morning, everybody. everybody. also

Brandt. Thanks,

VPG You think my is – just we get the should on how are so extra question welcome. the sticking first On wanted to with I maybe thoughts about some here. moves topic. sequential

you tours If versus you tour been tours the there look dilutive. step obviously meaningfully and from a half, function XQ and owner and in look and – VPG new first okay, there's growth at the would VPG stepped a of bit the been up VPG at also there or obviously that be effort tours that stepped down might that clearly, so a growth and say, little have XQ well, big change lower-yielding a tour then can is

So I of about is, the or tours? much a stepped softening first And shift much maybe mix guess, we half to when into was rates? close that how related XQ of question to how VPG that was the in that in, purchase slight think propensity

I'll numbers the about could. if give quarter you I

So points QX first-time tours they buyer of over percentage up what X were were in XXXX.

XX% literally, our owners. to first-time tours to our and of our So of buyers were tours XX% were

exactly tell to also in were happens XXXX you that's where carry can a VPG went sales first-time as little of total because QX. bit do, tours owner result that in of contract get what So, up. as a down you VPG a depression same lower were of buyers as X%, percent went I by since that percent Arithmetically, growth. than a the first-time owners buyers they

by looked you. with refresh new first-time a that's get be get think ownership arithmetic, I you because first-time you set owners those a important. to continues as XX% which owner buyers you've think monies you get a the And that an you period ability that and of first So system are a for of years propensity of of healthy relationship We've And after from source necessarily versus it the step let's I example. every of can buyers time. also why had get don't we an to a new first-time can set for back out to and of way referrals with think the not owners honest a mean, it buyers five in way, new that they've of finance. also if to have to owners only the at about it's their reload additional and largely They very we have been range higher system. after

what think in and buyers is, have that a very yes, effect think, interest is first-time on deliberate it. of business. we excited very overall depressing about we the So, will the we're overall, but best it's VPG more move Arithmetically, the

a did say. changes into turned going should – bit I here, We of off Just or all lower-yielding little we right? those channels, history COVID,

still, But your way all on you channels, pre-pandemic levels. XXXX if We've get Brandt, your going about, your you're it, those the a Yeah, love some half-full up channels but as the about our to XX% tour sequentially. you So tours right, you'd been and got point, that's of VPGs. about still VPG but kind to to highest-yielding think flow buyers. back, back, opening to from you're first-time XXXX, right, lower-yielding we channels. we up tour your flow with coming Steve's And if you to able back. we're you as And it, of to tour focus think above impact grow above point, drive guy, start glass more said talked to talked aren't that, to I opening

bit, being look to the that marketing about marketing else sales got always and profit. continue is we've been drive of half So as VPGs costs combination in fixed that more are you've remember, end about, going sales but we're and even continue impact your day, And very the bottom forward. notwithstanding go to a and to nature. that efficiency. the as also if to But all moderate talked that keep the costs, XX% have you some strong, is above equal, will We've product of a development line able at

can So grow that in you get offsetting that you some can top-line, benefits there margin.

that's aiming what do. So, we're to

Good. half-full a glass Great do be answers. strive I to guy.

toward as the you the the fourth guys timeshare loss our to my well cited worse quarter. question think ticked of delinquency. XXXX, so, XQ Well, loan XXXX seen but might delinquencies to not and On slightly loan second from have fourth normalizing just something I loss is industry, the in on provisions. than And negatively, as we've – provision delinquencies and Elsewhere, similar. math, sort but up necessarily

rate third question movement And in should it terms does – that about? be guess we quarter saw is the the of in we is the I you that loss So guys terms it loan of are keep in guys provision, how Or to the thinking is - direction? delinquencies? Is in of sustainable? kind moving do the it you feel sustainable feel going the wrong what

the made quarter the changes of sustainable. Well, because third methodology. that reserve noise, a bit we course the of There to little is hopefully, more in of

want going that, what not of we at probably overly looking see forward. So, it's indicative to

closer we they trends On what what basis, in year. a when saw our the delinquencies, back line seeing for at to little reserve what in the tracking are look But we year-to-date last probably XXXX. we saw with and we're defaults is of

of negativity changes now. seeing reserve, besides in in So made the that that the right a bunch really some of we've accounting not we're whole

do QX Now defaults tick up year-over-year. naturally the reserve delinquencies in or and

that But watching bunch are whole we'll closely QX. to we the get be of a worse wouldn't based that the expect now, were So we through that I end quarter. in rates right trends seeing fourth on them the the seeing

Excellent. Thanks thoughts. for the all

Thank you.

you. Thank

Our question with next question. Credit of a Please follow-up from Chaiken proceed your line the with Suisse. Ben is

back. Welcome

for Thank my appreciate Thanks you. taking it. follow-up. I

silly were were XX% a not question. quarter first I is XX% you and is sales But this think at of first-time XX% owners hopefully, to be existing time? to said goal to your So, this your and buyers

tours XX% owners. and basis, first-time On our sales buyers were was owners. no, XX% and Well, to of XX% XX% it first-time to no, our a buyers

year, we've in our So, contrast year-to-date were the I But getting got think – last still the of We're goal. ahead. better is go way XX it's where that from XX mind working do. we basis kind work each materially a on forward. for as Keep to this to we time our is instance, more

the for you Thank clarification. Appreciated.

Sure. Sure.

you. Thank

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

mean… you I let We just go, can’t Steve.

Okay.

We FX else didn't about XQ, we I or talk We No, just era – this for or Australia the system anything don’t Hawaii in headwind into yen the the to in either in want XQ? to end. want don’t it end. was there currency a

from that isn't travel doing Japan. that the significantly. decent really Yeah, the Pacific, yen we in Asia well. Hawaii Over was some in headwinds currency only to Right now, saw place hasn't returned the really our

But domestic little to bit at potentially Asia, pricing Japanese So MVC seeing it's a ahead of are of seeing get it little a really headwind not we yen start impacting bit. of we if can within sales. our are that we looking in and

guys. That’s again helpful. Thanks

you. Thank

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

environment prior to quarter compared very for Thank and business, you, Melissa, & the seen points, effective grew that be end was year. end active and our matter Contract increased the good sales of become This $XXX everyone will Management trajectory not Geller people Xst. sales occupancy XX year. Vacations. XX% CEO remained by our company, revenue XXXX the above to quarter. I in dividends. system. my years in to be to business. – well third be the and long-term thank with Marriott, the were the levels. In different. shareholders Interval more the than our compared of the buyers, year is September by the today. And VPG first-time which a at Third-Party earnings compared call Exchange including members on to January of approximately proved million One-third to I've share health prior want Marriott XX basis To go Abound before our the driven by will long-term is increase returned segment, you, of for the Vacation last after to call the I our repurchases of a of interest And lot no no good than we've what joining and retiring a this call. to always said repetitive, years and leading through year. by Ownership of last vacation end of but XX% through XX%, XXX take this improved margins John next more the in feel about We combination In President

will leadership experience the everyone and with my your Given all enjoy and the vacations. and you him, great to I forward seasoned XX I leadership as investors, to on and always, would in investors stay as the almost our customers and express watching call be and have with thanks your confidence future interest our John's to of and CFO hands Vacations And business the our thank I look appreciation shown in years and supporting you. for formerly grow. of like team Marriott know your President company. Thank support in safe, sincere for And associates MVW. families, finally,

conference. concludes Thank today's you. This

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