2024 HGV Quarter 4 Earnings Transcript

[dayooper]

Moderator added Previous Earnings Calls:
2023 Q3 Earnings Call
2023 Q2 Earnings Call
2023 Q1 Earnings Call
2022 Q3 Earnings Call
2022 Q1 Earnings Call
2021 Q3 Earnings Call

Highlights

• EBITDA - $1.26 Million Slightly over guidance converting $530 million into cash flow
• Contract Sales - $572 Million for the quarter and $2.3 Billion for the year
• Tour Growth was up 7% (lower than what they had expected).
• Occupancy Rates Up . . . but
• VPG (Volume Per Guest) down 14%
  • VPG is how much a timeshare guest spends on Club Memberships units and other timeshare related products and services.
  • Maui and a temporary system outage partially blamed
• The Jan closing of the BlueGreen acquisition was much earlier than expected.
• Having gone through the Diamond transaction led to a smooth process for BlueGreen
• BlueGreen finished strong with a total of $193 million in sales for the year.
• There were 152,000 tours in the 4th quarter, up 7%
• The VPG was $3,730, down 14% from last year (very high year), but still higher than 2019
• 500,000 Packages in “the pipeline”
  • Not sure what constitutes a package. I know we’ve had this discussion before,but I read packages as the VIP packages. If so, 500,000 is A LOT of packages.
• Occupancy was at 82%, up from last year. Nov and Dec were strong.
• 36,000 experience events were held this year with 120,000 participating in them.
  • Again, what constitutes an experience event, I don’t know. It might be as simple as a luncheon on checkin day so there’s a place to grab an appetizer and a drink while waiting for a room. They don’t elaborate.
• There was growth in transient travel (hotel stays) was due to both occupancy and rate.
• Total of 529,000 HGV member across all brands with 144,000 being Max members (70,000 being new to Max)
• During Quarter 4, HGV bought back 2.6 million shares of stock (8.7 million for the year) costing $365 million cash.
• Mark Wang feels they have the widest offering of price points and products in the industry. They have better experience platform as well.
• Maui fires and a 3rd party system system outage in the first part of the quarter brought sales down 10% from kast year
• 26% of sales was to new members (goal stated in previous calls was 40% new members)
• While the VPG was lower than they wanted, they were still up 5% on the 2019 benchmark. If the 2 Maui fires ans system outage hadn’t happened, they feel they would be at the goal of 10%-15% of 2019 levels
• Besides Ka Haku (new Oahu HC property), no new construction mentioned.

My thoughts - They held steady this past quarter. They blamed the lack of high sales growth on a couple of things (Maui, system outage impacting sales). I know that Marriott also blamed Maui for their performance. While they EBITDA came in higher than expected, it wasn’t what they wanted. Not sure how Travel and Leisure is doing (Wyndham Vacation Club), but Marriott is struggling more than HGV. The keep using the 2019 data as benchmarks (pre pandemic), but they were struggling a bit then. That’s when talk of a Diamond takeover was the big news (it went the other way as, we all know). I’m interested in how the BlueGreen acquisition will affect their financials. Was it a good choice or will it sink them? Only time will tell.

Footnote - I’m not well versed on the financial aspects of the business. These are just my thoughts. I could be totally wrong.

Link to the transcript:
https://seekingalpha.com/article/46...ions-inc-hgv-q4-2023-earnings-call-transcript

Link to HGV Report:
https://s27.q4cdn.com/757306400/fil...-Q4-2023-Earnings-Release-2-28-2024_FINAL.pdf

 

[GT75]

Thanks @dayooper