interesting notes from the Hilton quarterly filing

[Jason245]

From 10Q

"Additionally, we enter into agreements to sell timeshare units developed by third parties. Our supply of third-party developed timeshare intervals was approximately 109,000, or 83 percent of our total supply, as of September 30, 2015."

"Timeshare Adjusted EBITDA increased $19 million and $26 million for the three and nine months ended September 30, 2015, respectively, compared to the same period in 2014, primarily as a result of the increases in timeshare revenues of $39 million and $124 million, respectively, offset by the increases in timeshare operating expenses of $20 million and $109 million,"

From Press Release

"During the three and nine months ended September 30, 2015, 62 percent and 66 percent of intervals sold were developed by third parties, respectively. Hilton Worldwide's overall supply of timeshare intervals as of September 30, 2015 was approximately 131,000 intervals, or about six years of sales at current pace, of which 109,000, or 83 percent, were developed by third parties."



My opinion

They are making money a lot of money, selling a lot of units, and making even more profits than last year. This can only mean more price increases next year to drive more profits...

 

[weems637]

They have rid themselves of all the development costs of new properties, which inflates margins compered to prior years numbers.

 

[Jason245]

They have rid themselves of all the development costs of new properties, which inflates margins compered to prior years numbers.

That explains profit increase not revenue increase.

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[JSparling]

Great find, Jason.

Revenue growth could be explained by all the new properties in South Carolina, Hawaii, and Vegas over the past year or two. Or prices are going up as the economy goes up.

Hopefully this means the "are they going to sell" question can be put to rest for a while.

 

[raygo123]

Am I wrong, or does that make the average sale about $7000.00.? Not great. That's an EBITDA of just over a $1000/ unit. Granted, the gross margin is near impossible to determine, that's based on the writers 6yr inventory decided by six. The only unknown factor is turns, when and how the developer turns his inventory over to Hilton. Not a big business to hilton

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[1Kflyerguy]

Am I wrong, or does that make the average sale about $7000.00.? Not great. That's an EBITDA of just over a $1000/ unit. Granted, the gross margin is near impossible to determine, that's based on the writers 6yr inventory decided by six. The only unknown factor is turns, when and how the developer turns his inventory over to Hilton. Not a big business to hilton

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Not all of the revenue is from sales, the various fees also contribute to the revenue... not sure if they also get some revenue share from the rooms owned by HGVC that get rented out by the hotel division.. I assume they get something for those units..

As for the developer inventory, my guess is they only take ownership for a very brief period when they actually sell it. Sort of like a consigned model, HGVC sells it, but it really owned by someone else until the final sale to the customers.

 

[1Kflyerguy]

Great find, Jason.

Or prices are going up as the economy goes up.

Of course prices are going up... I did an owners update last week, and they even had graph showing the price increases each year for Las Vegas...

They were quit sure I needed to buy right away before the prices go up even more... :rofl::rofl:

Sadly i disappointed my sales rep and did not take advantage of the very special offers he had for me... just collected my gift certificate and enjoyed the rest of my trip..