Marriott Vacations Worldwide 3Q Sales Decline; Stock Tanks

[jmhpsu93]

I presume you are talking about Abound points? The person who posted this @tarkin79 owns 44,000 adventuras points, which I believe have MF of .02. So MF would be $800. They would have $400 left over, or maybe they own something else as well.

I got lost by your statement "cover many people's MFs"...my misunderstanding.

 

[wendyleighj]

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

Notice that previously announced HYATT ORLANDO 2027 is also missing.

 

[dioxide45]

Notice that previously announced HYATT ORLANDO 2027 is also missing.

It was also referenced in the footnote.

 

[jp10558]

New owners quickly discover that it’s not like booking a hotel on Bonvoy anytime they want it. I’m wondering if Hilton owners experience the same thing.

I'm not sure how widespread HGVC is at telling people they can book any time they want - I never got that far in my presentations. But I absolutely think they get the same stuff - HGVC isn't easy to book except right at 9 months when inventory opens up, or I guess your home week at a year out.

 

[davidvel]

I got lost by your statement "cover many people's MFs"...my misunderstanding.

What made you lost? Looking at all the MF threads and ads for intervals, there are tons of timeshares with MF around or under $1,300. Some are under $1,000.

 

[jp10558]

I think most here that see value in the points system own enrolled weeks that have maintenance fee per point that is lower than that of Trust Points. They also didn't directly see a high buy-in cost like Trust Point buyers do today. Sure, they had an upfront purchase price but by the time enrollment rolled around that was already a sunk and forgotten cost.

I think points from enrolled weeks can be good and enrollment overall is a great value. It always seems that to get the best value out of timeshare, you really need to own the legacy products. Everything from Vistana Flex programs, Hilton Vacation Club Collection Points (DRI), Hyatt Portfolio Points and Marriott Abound Trust Points. In almost every case, the predecessor product is superior in terms of value.

This is the problem, you can dilute and rejigger to make things less and less valuable, but eventually people stop buying.. at least from you. Even with Gambling, if it was known your Casino had a 5% payout rate and the one down the street had a 20% payout rate, you'd lose most business. And I know legally they're required to be higher, and I also know most people aren't getting statistics, but I am claiming that people get a feel for "good" and "bad" Casinos.

You can hide a lot, but eventually you hit the bottom of what people are willing to buy. I think back to the "bad old days" of American cars, a la the 1980s-2010 or so. They lost a LOT of market share and eventually they had to change a bit, and still keep flirting with bankruptcy etc.

The good news is, this is still plenty early enough to turn it around (for MVC and for the industry as a whole IMO). The question is will they see they might have to lower the profit margin to make it sellable.

 

[VacationForever]

Why does the foil show keys? It sounds very much like "Third Home". At my last presentation at Park City, their spiel was that if I were to buy from them, they would set up a Thirid Home account for me. Something like I cannot do it on my own.

 

[TolmiePeak]

I'm not sure how widespread HGVC is at telling people they can book any time they want - I never got that far in my presentations. But I absolutely think they get the same stuff - HGVC isn't easy to book except right at 9 months when inventory opens up, or I guess your home week at a year out.

It isn't? I've had no problem booking Chicago, W 57th, Washington DC, and Las Vegas this year. As long as you are flexible you can book.

 

[davidvel]

This is the problem, you can dilute and rejigger to make things less and less valuable, but eventually people stop buying.. at least from you. Even with Gambling, if it was known your Casino had a 5% payout rate and the one down the street had a 20% payout rate, you'd lose most business. And I know legally they're required to be higher, and I also know most people aren't getting statistics, but I am claiming that people get a feel for "good" and "bad" Casinos.

You can hide a lot, but eventually you hit the bottom of what people are willing to buy. I think back to the "bad old days" of American cars, a la the 1980s-2010 or so. They lost a LOT of market share and eventually they had to change a bit, and still keep flirting with bankruptcy etc.

The good news is, this is still plenty early enough to turn it around (for MVC and for the industry as a whole IMO). The question is will they see they might have to lower the profit margin to make it sellable.

I know what you are saying but if a casino had a 5 or 20% payout rate, no one would gamble there. Blackjack pays out 94-97% depending on the rules.

 

[chosshaul]

Should have paid attention more, sounds like this will be a good idea stock to short on any spikes and sell calls against. The value proposition of MVC is very poor right now and consumers are tightening their belts.

 

[TolmiePeak]

I know what you are saying but if a casino had a 5 or 20% payout rate, no one would gamble there. Blackjack pays out 94-97% depending on the rules.

Actually blackjack has a 99.5% payout rate. Even higher if you count cards.

 

[tarkin79]

Should have paid attention more, sounds like this will be a good idea stock to short on any spikes and sell calls against. The value proposition of MVC is very poor right now and consumers are tightening their belts.

Now we're talking my language

 

[jp10558]

It isn't? I've had no problem booking Chicago, W 57th, Washington DC, and Las Vegas this year. As long as you are flexible you can book.

Hmm, see this is where it depends on what you're looking for. None of those have 2BR Sat to Sat (or a week) except Vegas, and Vegas / Orlando are kinda the exceptions to booking rules as they're sooo overbuilt you can usually book something from anyone. I've had to book right out for McAlpin Plaza 2BR and only seen it in December, Ocean Oak for Feb... I think I jumped on MarBrisa also at or around 9 months. Usually when I look at say 6 months at multiple locations, all weeks are scarce, you can find 2-4 days here and there but not a full week.

 

[TolmiePeak]

Hmm, see this is where it depends on what you're looking for. None of those have 2BR Sat to Sat (or a week) except Vegas, and Vegas / Orlando are kinda the exceptions to booking rules as they're sooo overbuilt you can usually book something from anyone. I've had to book right out for McAlpin Plaza 2BR and only seen it in December, Ocean Oak for Feb... I think I jumped on MarBrisa also at or around 9 months. Usually when I look at say 6 months at multiple locations, all weeks are scarce, you can find 2-4 days here and there but not a full week.

Yes W 57th doesn't have 2 bedroom units. We just book 2 studios when there is 4 of us.

 

[Huskerpaul]

Actually blackjack has a 99.5% payout rate. Even higher if you count cards.

If you can find a table still offering 3:2 odds on a player blackjack.

 

[TolmiePeak]

If you can find a table still offering 3:2 odds on a player blackjack.

I like the $15 double deck blackjack game at the El Cortez. The also have some pretty good 25 cent video poker machines there. On the jacks or better they pay 9:1 on a full house and 6:1 on a flush. I believe the payback on that game is 99.5% also.

 

[Dean]

I like the $15 double deck blackjack game at the El Cortez. The also have some pretty good 25 cent video poker machines there. On the jacks or better they pay 9:1 on a full house and 6:1 on a flush. I believe the payback on that game is 99.5% also.

And it's just a cool older hotel. While not the oldest technically it feels like the oldest to me.

 

[davidvel]

Actually blackjack has a 99.5% payout rate. Even higher if you count cards.

It is next to impossible to find a 3:2 game these days. Going to 6:5 reduces the payout by almost 1.5% alone. Add restrictive doubling, dealer hitting soft 17, etc. reduce it further. But I was responding to someone describing payouts as 5-20%.

 

[TolmiePeak]

It is next to impossible to find a 3:2 game these days. Going to 6:5 reduces the payout by almost 1.5% alone. Add restrictive doubling, dealer hitting soft 17, etc. reduce it further. But I was responding to someone describing payouts as 5-20%.

Agree with you that even the suckers aren't going to tolerate a 20% payout rate....

Just go to the places listed here if you want 3:2....

Blackjack Survey - Gaming Guides - Wizard of Vegas

Survey of blackjack rules in Las Vegas and surrounding areas

wizardofvegas.com

 

[pedro47]

IMHO, Marriott's needs to change their sales tactics to focuses on the new Generation X population and focuses less now on the baby boomer's generation.

 

[chosshaul]

Do DEX EU and DEX US share inventory? Anyone compared two? So far I prefer a Craig 1-bed to unlock DEX EU (and I also get HGVC points) than a Polo Tower 1-bed to get access to DEX US (no HVC or HGVC points), but if the inventory is different, need to think more about it.

IMHO, Marriott's needs to change their sales tactics to focuses on the new Generation X population and focuses less not on the baby boomer's generation.

I’m sure they want to but Gen x and below are all struggling with debt. MVC has a high cost to entry, high maintenance fees, and major competition with Airbnb, etc. I don’t talk time shares too much with my fellow gen x and millennial peers because a lot of them are living paycheck to paycheck.

 

[davidvel]

Agree with you that even the suckers aren't going to tolerate a 20% payout rate....

Just go to the places listed here if you want 3:2....

Blackjack Survey - Gaming Guides - Wizard of Vegas

Survey of blackjack rules in Las Vegas and surrounding areas

wizardofvegas.com

I should have added, "with reasonable minimums." Those strip minimums are far beyond my gambling for fun money.

 

[TolmiePeak]

I should have added, "with reasonable minimums." Those strip minimums are far beyond my gambling for fun money.

The best place to play near the strip is Treasure Island and Ellis Island.

 

[jabberwocky]

I’ve finally had some time to go through the Q3 financials - and it isn’t pretty. Most of the highlights have already been covered here, but there are a few nuggets I’d be interested in hearing others comments on.

- as we know, VAC relies on securitization for a good part it’s financing. Given the recent stresses/defaults within the broader market for receivables financing (First Brands etc), I think VAC is setting itself up for not being able to take advantage of this as heavily by setting up a longer term debt facility instead of a revolving facility (which was terminated). This was a $500+ amount. The term debt is around 1.5% higher in terms of interest rates than existing securitization facilities - so this is an additional $7.5 million in interest cost locked in until early next decade.

- They had an impairment charge of over $30 million to recognize that the inventory value of property to sell was more than the market value. Hence the write-off.

- The “Modernization” initiative is interesting. They are expecting to spend $100 million each this year and next towards upgrading “advisory services” and outsourcing some of their internal functions. My guess is they’ve joined the AI bandwagon here. Before you get excited, that their IT will be upgraded - I’ll note than only $1 million of $53 million for modernization has gone towards Vacation Ownership IT.

It’s not directly in the financial statements, but VAC is now trading below book value. I wouldn’t be surprised if they become a takeover target or private equity gets involved to take them private.

 

[RENTER]

The Covid money-printing orgy is so evident on that market-cap chart above. It's consistent across many consumer discretionary categories. It broke a lot of business models because for a few years it felt like easy money for lots of companies. Now they have to adjust back to the reality of the resulting inflation and reversion to the mean.

The question I'm asking myself if whether to start loading up on the stock now because that $0.79 per share dividend (6.7% annualized). Can they maintain it?

If I buy about 400 shares, my MFs are paid for with dividends

Their stock would not be for me despite the high dividend. Why buy a company whose owners are online criticizing it when there are better companies out there with better reputations paying a high dividend also.