HGV Quarter 2 2024 Investor Call Highlights

[WaikikiFirst]

"Priced for the bottom third," if it even exists, probably just means EOTY dog deeds at the lowest-tier resorts with the highest vacancies

Most likely. That is the Toxic Detritus they create to suck in the "aspirational" who shouldn't be buying, as you said.
IT is toxic, predatory marketing. #2 reason I don't go to TS "updates" ... these people spend their days on toxic, predatory marketing. Unless I have some burning new issue that I really need to talk about (which I won't), I really don't want to be in the same room as them for more than 90 seconds.

people least able to afford a timeshare are now buying into the most disadvantageous rung of the timeshare ladder

This is a std marketing approach in many "aspirational" items. Take "Kona Blend" coffee. WTH is that? What makes Kona coffee so valued is its smoothness, clean taste. You put anything in it other than water and the other, lesser, thing takes over. I'm sure a bunch of people can give more examples.

 

[HuskerATL]

I honestly think this is also the continuing follow on to the "forced" wage increases. You can insist your inventory is worth some arbitrary amount, but especially with things like campervans, they depreciate over time just sitting there, you presumably pay storage costs, likely your own loans for inventory etc. And there's few things as discretionary as buying a campervan for most people. There's little reason to not wait, especially as I'm seeing so many RVs and camper trailers for sale on the side of the road - someone will eventually offer a good price just to be rid of the thing.

It seems to me retail timeshares are even more discretionary and there's just a limit, even with all the "loan sleaze in the world" won't make a palatable monthly payment for someone. People can be enticed to go for longer than they should loan terms etc, but at some point, more and more people will just say - I literally cannot make that monthly payment. When that comes up in the room you lose the sale. Also, at least IME, timeshares do some shady things to originate the loans, but they're not "buy here pay here" - they still do some sort of credit check and if your credit is frozen, they won't lend to you. Presumably there's a credit score they won't loan to also then.

HGV / BG can dance around this all they want, they don't have a product priced for the bottom third. What may be worse is I'm not sure one can have a product priced there. The entire market for timeshares might just be smaller now.

It means selling dream vacations while taking out crappy loans, opening an Amex card while pitching 0% interesting for the first year, and so maxing it out. They intentionally have ways to sell to the bottom third and don't worry about it being in their best interest... Just make the sale.

And then wonder why folks default.

 

[jp10558]

I've said before, but I really think it's astonishing the retail sales are even possible given the horrible reputation the concept has. Going back to the other thread - it really makes me question the import of branding at all - plenty of companies seem to do fine with horrible brand reputation, or none at all when it comes to things on like Temu and Amazon.

 

[dioxide45]

I've said before, but I really think it's astonishing the retail sales are even possible given the horrible reputation the concept has. Going back to the other thread - it really makes me question the import of branding at all - plenty of companies seem to do fine with horrible brand reputation, or none at all when it comes to things on like Temu and Amazon.

But the timeshare companies live off the brand of the Hotel companies. People trust the Hilton, Marriott or Westin names and thus incorrectly assume that the timeshare of the same (similar) name is also to be trusted.

That said, Westgate has a horrible reputation, especially for sales, but people still buy direct.

 

[GT75]

"Priced for the bottom third," if it even exists, probably just means EOTY dog deeds

From the above chart, I am wondering if the "Priced for the bottom third" is referring to selling HVC trust points and now BG. I can not find it but I thought that it was during an investor call where I believe that Mark Wang explained the sales approach with the purchases of DRI and BG. He said that we first sell them on HVC (and now BG) and then continue to upsell them down the road. The problem that I see is that the HVC product seems to be priced the same as HGVC on a retail cost/pt. IMO, If the BG and HVC are indeed entry level products, then they should be priced less than HGVC and HC. In practice, I think @ernststarhemberg statement is correct.

 

[dayooper]

I've said before, but I really think it's astonishing the retail sales are even possible given the horrible reputation the concept has. Going back to the other thread - it really makes me question the import of branding at all - plenty of companies seem to do fine with horrible brand reputation, or none at all when it comes to things on like Temu and Amazon.

The salesmen are very good at their job and the sales department trains them what to say and how to frame everything. The Hilton name plays a big part in it as well.