Marriott Vacations Worldwide 3Q Sales Decline; Stock Tanks

[JIMinNC]

Marriott Vacations Worldwide announced their 3Q 2025 earnings on Wednesday, reporting that contract sales in the quarter declined 4% compared to the prior year period. As a result, the stock is down 24% this morning to about $51/share as a write this. They said tours in the quarter were down 1% year-over-year and VPG (basically sales per tour average) was down 5%. They posted a loss of $2 million for the quarter.

President and CEO John Geller said:

“We are not satisfied with this performance and are taking concrete actions to return to growth, including realigning sales and marketing field incentives to drive strong productivity, curbing third-party commercial rental activity to drive higher owner arrivals and satisfaction, and implementing FICO-based screening to enhance lead quality and drive improved VPGs. We continue to expect a $150 million to $200 million Adjusted EBITDA benefit from our modernization program by the end of 2026.”

I missed the conference call this morning, but it will be available as an archive by this afternoon, so I may skim though it.

I'm very glad I sold my VAC shares a while back.

 

[JIMinNC]

Here is a slide from the presentation deck showing upcoming new locations. Interestingly the Westin announcements for Savannah and Charleston are not listed.

 

[SueDonJ]

...

President and CEO John Geller said:

“We are not satisfied with this performance and are taking concrete actions to return to growth, including realigning sales and marketing field incentives to drive strong productivity, curbing third-party commercial rental activity to drive higher owner arrivals and satisfaction, and implementing FICO-based screening to enhance lead quality and drive improved VPGs. We continue to expect a $150 million to $200 million Adjusted EBITDA benefit from our modernization program by the end of 2026.”

I missed the conference call this morning, but it will be available as an archive by this afternoon, so I may skim though it.

I'm very glad I sold my VAC shares a while back.

That's interesting, the comment that I increased the font. I wonder what, if any, practical changes might look like?

We sold our VAC stock when we bought our HHI home, and we're also very glad we're not still in it. I wish we'd had the foresight to unload a few others, too.

 

[dioxide45]

Here is a slide from the presentation deck showing upcoming new locations. Interestingly the Westin announcements for Savannah and Charleston are not listed.

View attachment 117921

Perhaps now that Savannah and Charleston aren't happening till 2028 they just left them off since they didn't have enough spots for them? Certainly hoping they didn't shelve those plans.

 

[dioxide45]

That's interesting, the comment that I increased the font. I wonder what, if any, practical changes might look like?

We sold our VAC stock when we bought our HHI home, and we're also very glad we're not still in it. I wish we'd had the foresight to unload a few others, too.

Here is more of the full statement of what John said on the call.
...working to curb third party rental activity by a small subset of owners, which has suppressed owner arrivals at some of our most attractive destinations in recent years. By curbing this practice, we expect to make more inventory available for occupancy by our owners, which should drive higher owner satisfaction and incremental arrivals at our most productive sales centers benefiting tours and VPG.

 

[JIMinNC]

Perhaps now that Savannah and Charleston aren't happening till 2026 they just left them off since they didn't have enough spots for them? Certainly hoping they didn't shelve those plans.

I’m assuming you meant 2028?

 

[dioxide45]

I’m assuming you meant 2028?

Yeah, I did. Fixed my post.

They also stated they will have an Investor Day on December 17th at the NYSE. Will also be webcast.

 

[JIMinNC]

I would suspect, given the abysmal performance of VAC stock since Steve Weiss retired and handed the CEO position to Geller, that pressure must be building for better results or a change at the top.

 

[jwalk03]

There is a footnote about Savannah, Charleston and Orlando. I would say this change from previous presentations definitely indicates the plans have at least been delayed.

 

[jwalk03]

Compared to what it looked like on the Q2 presentation:

 

[jwalk03]

Geller was specifically asked about the commercial rental activity in the Q&A session here is his reply:

"We know we have seen higher owner rentals, and lets be clear- our owners can rent the product. That is an option for the typical owner. What we are seeing is a small group of owners that appear to be running commercial businesses. and they are obviously going after the better inventory, the better weeks in a lot of the higher end markets to try and rent those and make money. That is the commercial rental activity. So anything we can do to make sure they are adhering to the rules- our points programs do not allow commercial rental activity and we have employed some technology to track that and we are working on how we are going to enforce those rules here going forward. That will take a little time to ramp up but we are focused on that."

 

[JIMinNC]

There is a footnote about Savannah, Charleston and Orlando. I would say this change from previous presentations definitely indicates the plans have at least been delayed.

View attachment 117925

Good catch. I did not see the footnote.

 

[Hindsite]

What is FICO-based screening?

 

[dioxide45]

What is FICO-based screening?

Perhaps they can use scoring products sold by the major credit bureaus to better screen income guests? Kind of like the pre-qualified offers that lenders and such to send loan and credit card solicitations in the mail. These don't require consent of the customer and don't have a negative impact on credit score.

 

[jp10558]

That's interesting, the comment that I increased the font. I wonder what, if any, practical changes might look like?

We sold our VAC stock when we bought our HHI home, and we're also very glad we're not still in it. I wish we'd had the foresight to unload a few others, too.

I agree that you want to try and have owners be satisfied, but otherwise I still don't see why whatever rentals happen wouldn't give you the same potential presentation opportunities, unless the MFs are over rental rates in which case that's the problem you have to fix.

 

[dioxide45]

I agree that you want to try and have owners be satisfied, but otherwise I still don't see why whatever rentals happen wouldn't give you the same potential presentation opportunities, unless the MFs are over rental rates in which case that's the problem you have to fix.

Even if the MFs are under prevailing rental rates, it can still be a hard sell when someone is looking at a $50,000 purchase price. I suspect they are seeing a lower percentage of tours from non-owner guests than they see from owners staying at the property.

 

[jp10558]

Even if the MFs are under prevailing rental rates, it can still be a hard sell when someone is looking at a $50,000 purchase price. I suspect they are seeing a lower percentage of tours from non-owner guests than they see from owners staying at the property.

Well, my answer to that of course is the current market may not bear developer prices.

 

[vacation dreaming]

I agree that you want to try and have owners be satisfied, but otherwise I still don't see why whatever rentals happen wouldn't give you the same potential presentation opportunities, unless the MFs are over rental rates in which case that's the problem you have to fix.

I suspect they have more success with current owners in general.

 

[dioxide45]

Well, my answer to that of course is the current market may not bear developer prices.

I don't disagree. They are trying to fit their business model into something that may not work that well anymore. Timeshares kind of created a product for a problem that didn't really exist. That said, I think many people can make them work and save lots of money in the process.

 

[jp10558]

I don't disagree. They are trying to fit their business model into something that may not work that well anymore. Timeshares kind of created a product for a problem that didn't really exist. That said, I think many people can make them work and save lots of money in the process.

What I wonder is now - how are the competitors doing? We've discussed at length the higher costs in MVC might make them a bit of a canary, or at least exposes them to various price based market issues sooner. If this is a hard market change then adjusting the business model could make sense. I think the developer purchase prices at least theoretically made sense when you put it like a easier cheaper version of a vacation home. Now that we've left that behind, it seems harder to justify as what may be morphing into a "membership". The markets where $50k buy ins to a membership is much higher up the income levels (think country clubs) than timeshares have historically targetted. I kinda think the much smaller market (for the current prices) won't sustain the same sort of system. The money may have to come from management.

I wonder if they ought to take more of a lesson from the hotel companies, where they're basically a franchise management company and third parties run the hotels. It seems to me like that has worked well for HGVC in SC in Strand - they're building a new tower in MB for instance, so they seem to be doing well. Although for that to work I think you're back to not doing Trust systems, but points exchanges like HGVC, or things like II for MVC.

 

[daviator]

I'll be happy to see some serious crackdown on the big commercial operators. Those hurt all the other owners and that conduct is pretty clearly prohibited. I think MVC is absolutely right that the owners who suck up the best weeks at the best properties to rent them out drive down owner satisfaction across the board.

 

[klpca]

I'll be happy to see some serious crackdown on the big commercial operators. Those hurt all the other owners and that conduct is pretty clearly prohibited. I think MVC is absolutely right that the owners who suck up the best weeks at the best properties to rent them out drive down owner satisfaction across the board.

It is a lot harder to convince people to buy more when they are already having difficulty booking a desired week.

 

[GTLINZ]

Here is more of the full statement of what John said on the call.
...working to curb third party rental activity by a small subset of owners, which has suppressed owner arrivals at some of our most attractive destinations in recent years. By curbing this practice, we expect to make more inventory available for occupancy by our owners, which should drive higher owner satisfaction and incremental arrivals at our most productive sales centers benefiting tours and VPG.

I am not a Marriott owner, but an owner. On principle, this really chaps my shorts.

I would love to see a someone gather affadavits confirming that they were told by sales that they could offset their ownership costs by renting. I know you cannot effectively sue them for all of the sales lies, but perhaps enough volume would prove useful eventually. I know i have been sold that particular lie over and over ...

Just dreaming, i guess...

 

[davidvel]

I am not a Marriott owner, but an owner. On principle, this really chaps my shorts.

I would love to see a someone gather affadavits confirming that they were told by sales that they could offset their ownership costs by renting. I know you cannot effectively sue them for all of the sales lies, but perhaps enough volume would prove useful eventually. I know i have been sold that particular lie over and over ...

Just dreaming, i guess...

But do they say you can run a commercial operation amounting to many, many weeks, for profit vs. usage? I've never heard them say that. And I am far from an MVC apologist.

 

[JIMinNC]

I am not a Marriott owner, but an owner. On principle, this really chaps my shorts.

I would love to see a someone gather affadavits confirming that they were told by sales that they could offset their ownership costs by renting. I know you cannot effectively sue them for all of the sales lies, but perhaps enough volume would prove useful eventually. I know i have been sold that particular lie over and over ...

Just dreaming, i guess...

I think you need to read the full quote that @jwalk03 posted above. Here is the relevant part:

"...lets be clear- our owners can rent the product. That is an option for the typical owner. What we are seeing is a small group of owners that appear to be running commercial businesses. and they are obviously going after the better inventory, the better weeks in a lot of the higher end markets to try and rent those and make money. That is the commercial rental activity."

The Marriott Vacation Club governing documents have never prevented renting, but they do prohibit renting as a "commercial activity." They allow someone to offset their costs by renting instead of using. The problem comes from that small subset of owners who have acquired many deeded weeks or points with the express purpose of running a rental business. There are a number of owners that own dozens of weeks in Maui, Aruba, and elsewhere (many bought resale) who could never use all of that time. They scarf up the best weeks and rent them. That is what MVW is trying to stop. They are sometimes refried to as "mega-renters".