Marriott Vacations Worldwide 3Q Sales Decline; Stock Tanks

[daviator]

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...

MVC acknowledges that owners have the right to rent what they own and they are not proposing to crack down on those who sometimes rent what they own.

They are proposing to crack down on those who have turned their ownership into a business and either rent their owned units all the time, or accumulate ownerships from groups of owners and reserve and rent stays as a business. Commercial activity has always been prohibited in the ownership rules we all agreed to when we purchased.

They intend to crack down on the commercial operators, not on those of us who use our ownership but might rent something out now and then.

I agree that Sales has sometimes been overzealous in telling people they could buy something with the intent of renting it out. In actuality, the terms have never allowed you to rent your ownership out all the time; doing so is pretty clearly commercial use in my book. As with everything else, the written terms are the ones that govern, and anybody that relies on the verbal promises of a sales person and not on what's in the contract is likely to be disappointed, whether they're buying a timeshare, a car, or any other big-ticket item.

 

[davidvel]

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.

Maybe people that rent already know that is far cheaper to do so in almost all all cases vs. buying points from MVC for the same interval. Also likely younger people utilizing direct rentals with less discretionary income and assets.

So they are less inclined to buy than owners (most of whom bought from MVC) that already got sucked in once, and continue to fall for the smoke and mirrors about upgrading status, getting better inventory, etc.

 

[davidvel]

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."

Someone needs to archive this for the time they start coming after the mom and pops.

 

[davidvel]

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.

"including realigning sales and marketing field incentives to drive strong productivity"

Instead of worrying how to incentivize sales and marketing (body snatchers), they should just stop allowing tours to anyone who has attended more than a few times and never purchased. Wouldn't be good for me and many here, but this would fatten the pig considerably, while saving all that incentive money.

 

[daviator]

"including realigning sales and marketing field incentives to drive strong productivity"

Instead of worrying how to incentivize sales and marketing (body snatchers), they should just stop allowing tours to anyone who has attended more than a few times and never purchased. Wouldn't be good for me and many here, but this would fatten the pig considerably, while saving all that incentive money.

I am sure this is a common discussion item internally. One one hand, I imagine that statistically, those who have purchased before might have a higher likelihood of purchasing again than the average person off the street. And just using myself as an example, I purchased, then said "no" at many presentations before eventually buying something more... and later something more. So there is probably some benefit to them in chipping away at current owners.

But a lot of current owners are now in their 60s and 70s and I think that becomes a tougher and tougher pill to swallow, since for a purchase to make sense, you need to be able to amortize the purchase cost across a number of years of use. Even a completely healthy 70-year-old would be hard-pressed to assume that they were going to get 20 years of use out of a new timeshare purchase. So I do think they need to attract younger buyers. Part of that problem is that the value proposition that existed 20 years ago just doesn't exist today.

My interpretation of the highlighted phrase is that they're going to increase sales incentives, which will almost certainly lead to higher-pressure presentations and more deceptive claims. It's unfortunate that they focus on "selling harder" instead of on trying to deliver a better value that might be easier to sell.

 

[JIMinNC]

"including realigning sales and marketing field incentives to drive strong productivity"

Instead of worrying how to incentivize sales and marketing (body snatchers), they should just stop allowing tours to anyone who has attended more than a few times and never purchased. Wouldn't be good for me and many here, but this would fatten the pig considerably, while saving all that incentive money.

I totally agree with this. If they were more selective in who they bring in, they could probably cut headcount in sales, drive up the close rate and the VPG.

I guess you could read the quote you highlighted to include that possibility - i.e. - realigning incentives to bring in better more salable prospects rather than just any warm body that wants a freebie.

 

[dioxide45]

"including realigning sales and marketing field incentives to drive strong productivity"

Instead of worrying how to incentivize sales and marketing (body snatchers), they should just stop allowing tours to anyone who has attended more than a few times and never purchased. Wouldn't be good for me and many here, but this would fatten the pig considerably, while saving all that incentive money.

It might drive up VPG but it might not move the needle on total sales. They just don't have as many people moving through the sales floor and the same number of people buying. That should be good overall but tour flow volume seems to be a big indicator of success.

 

[JIMinNC]

My interpretation of the highlighted phrase is that they're going to increase sales incentives, which will almost certainly lead to higher-pressure presentations and more deceptive claims. It's unfortunate that they focus on "selling harder" instead of on trying to deliver a better value that might be easier to sell.

That would be the normal assumption based on the typical timeshare sales paradigm, but "realignment" doesn't automatically mean "increase". Since they also noted they want to move toward a FICO-based qualification for tours, it could mean they have seen they light and realized that quality may be more important than quantity. So, I suppose "realignment" could mean changing the incentive structure for the lead/tour generators (the "body snatchers") to give sales higher quality prospects. That could also be wishful thinking on my part, even though we don't do tours any more. Haven't done one since November 2020 when we finally paid the piper and enrolled our resale weeks.

 

[jp10558]

Maybe people that rent already know that is far cheaper to do so in almost all all cases vs. buying points from MVC for the same interval. Also likely younger people utilizing direct rentals with less discretionary income and assets.

So they are less inclined to buy than owners (most of whom bought from MVC) that already got sucked in once, and continue to fall for the smoke and mirrors about upgrading status, getting better inventory, etc.

I think you're right - the people who bought once are already filtered right? It's why they often get disappointed with seeing you're resale - because any resale is going to mean you know the price is many times too high. My thought is just - eventually they need new customers, and you can only squeeze any one person for so much till they just can't afford any more. It's self limiting if you are locked in to just increasing sales to existing customers. That would be one of those "secular declines" I think - getting the most money you can right now before you go out of business. Never a good look IMHO, but if you can't pivot what can you do?

 

[jp10558]

"including realigning sales and marketing field incentives to drive strong productivity"

Instead of worrying how to incentivize sales and marketing (body snatchers), they should just stop allowing tours to anyone who has attended more than a few times and never purchased. Wouldn't be good for me and many here, but this would fatten the pig considerably, while saving all that incentive money.

I have wondered why some companies (Wyndham) don't filter who they try and get to come to presentations. It seems very wasteful the current model of it doesn't matter if last week you went and passed, or 5 times this year you passed, oh and look ,you're all resale ownership... Like - you're just giving money away at this point.

 

[jp10558]

I am sure this is a common discussion item internally. One one hand, I imagine that statistically, those who have purchased before might have a higher likelihood of purchasing again than the average person off the street. And just using myself as an example, I purchased, then said "no" at many presentations before eventually buying something more... and later something more. So there is probably some benefit to them in chipping away at current owners.

But a lot of current owners are now in their 60s and 70s and I think that becomes a tougher and tougher pill to swallow, since for a purchase to make sense, you need to be able to amortize the purchase cost across a number of years of use. Even a completely healthy 70-year-old would be hard-pressed to assume that they were going to get 20 years of use out of a new timeshare purchase. So I do think they need to attract younger buyers. Part of that problem is that the value proposition that existed 20 years ago just doesn't exist today.

I don't know what the value proposition was 20 years ago, but I will say I believe there is a value proposition now, just not at retail prices. If they lowered their prices enough I think they sell - and I don't think they have to change MFs at all. Well, MVC is on the pretty high end there too, but they do have the premium product.

My interpretation of the highlighted phrase is that they're going to increase sales incentives, which will almost certainly lead to higher-pressure presentations and more deceptive claims. It's unfortunate that they focus on "selling harder" instead of on trying to deliver a better value that might be easier to sell.

This is the thing that I would have thought will eventually catch up to any company (that sells discretionary stuff) - eventually you have to provide something of value to the customer or they just don't buy it any more. Whatever some think of my business acumen (Hey, I don't claim to be skilled in that), we see it with camera film - there's still a healthy niche market, but you're just not selling it to huge numbers of people. There was nothing Kodak could do to get people in 2005 to keep buying film.

The problem I see is - a) most companies can't / don't want to shrink against shrinking demand, and b) Usually in that niche products it's even more luxury and even higher priced, but I don't think Timeshares play there - fractionals is what's "hot" from my ads - i.e. 1/8 or larger ownership of a luxury vacation home. Or as we keep saying, at higher price points people just use VRBO...

 

[GTLINZ]

I am concerned that when they come after the "mega renters" that they will go further and go after the ones who do any renting.

I understand that owners may benefit from them doing this. It is just a slippery slope. I keep seeing many of my ownership value stories eroding, and am weary of the game. The rules keep changing for the worse.

The issue is that Marriott and Hyatt (and likely others) have had another points system overlayed on top of their ownership that initially were filled with the lower season weeks in a trust. Brilliant on their part. I suspect it only works ok because people enroll valuable weeks for a large percentage of the inventory. The pyramid is starting to show it's true colors when peak weeks more often owned as weeks are not available.

The original system was a lot more transparent.

 

[JIMinNC]

I am concerned that when they come after the "mega renters" that they will go further and go after the ones who do any renting.

The way I look at it, I think they have a disincentive to go after casual renters. Giving regular owners occasional rental as another usage option helps Sales pitch the sale.

If they target the bigger renters, they will likely get sued by some of these mega-renters, so they need a legally sound stance to prove there is a commercial activity going on. Targeting casual rentals also might undermine that argument.

I would think the statement below indicates they are going to use technology to look for patterns of excessive bookings that are then transferred to another guest. The next sentence on enforcement likely refers to building a sound, defensible legal strategy.

“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."

 

[Dean]

"including realigning sales and marketing field incentives to drive strong productivity"

Instead of worrying how to incentivize sales and marketing (body snatchers), they should just stop allowing tours to anyone who has attended more than a few times and never purchased. Wouldn't be good for me and many here, but this would fatten the pig considerably, while saving all that incentive money.

On the surface I would assume this to be true but since everyone seems to do this there must be enough sales to those owners who would be excluded to justify the sales force and footprint. We can be certain they have that data and track it closely.

 

[dioxide45]

I think an issue might be that some of the people operating in the rental space don't really own that much. They are mainly point broker who use points from hundreds, if not thousands, of owners. They are provided credentials to access the owner accounts and make reservations for the number of points they've agreed to rent for the owner. Much like how some DVC point rental brokers operate. I don't think there are a lot of players on the MVC side, but they are still there. These brokers act much like a large point owner might in gobbling up large swaths of prime inventory, but MVC may not really know they are there because all the rentals are coming through hundreds of owners, not a single account.

Does MVC worry about this type of situation? If they do, how do they go about preventing it? Do they go the route that Bluegreen has in locking online access of owners they know have shared their credentials with such a rental operation? Can they do that?

 

[CalGalTraveler]

I am not sure about how prevalent the abuses by commercial renters are or whether this is smoke to avoid the real topic of why there is a decline in sales. I highly doubt that new buyers showing up in their presentations are aware of inventory issues. I was enrolled in Abound and follow TUG and I was not aware of significant availability issues (but I didn't use Abound much.)

The real question is their customer strategy. Aside from the poor economy and increases in inflation for everyday goods, MVC doubled down on their existing high(er) end customer base and on their MVP Abound points system. As it was stated earlier, much of that base is aging (from go-go to slow-go) and with high MF on the Abound points, I don't see much incentive for this group to add points to their existing deeds; perhaps those that would have upgraded already did so or perhaps the existing base heard about lack of inventory- either way MVC may have gotten the juice out of those oranges and the opportunity may be saturated.

I am not sure the younger generation has the money to buy into the higher end MVC system given the average age of a first home buyer is now 40(!)

To compare, HGV went a down market with BlueGreen and DRI acquisitions to create lower price points and to incent those existing bases to upgrade to HGVC/Embarc or DRI with the addition of Honor points conversions and higher quality accommodations. They went after a lower end base that is already aware (locked in?) to timeshares and may be seeking upgrades.

Although inflation will affect all providers as a discretionary product, it would be interesting to see how these companies compare financially given the differing customer strategies.

 

[TolmiePeak]

"including realigning sales and marketing field incentives to drive strong productivity"

Instead of worrying how to incentivize sales and marketing (body snatchers), they should just stop allowing tours to anyone who has attended more than a few times and never purchased. Wouldn't be good for me and many here, but this would fatten the pig considerably, while saving all that incentive money.

I think you mean to people like myself? At least at Ko Olina when I demanded 50,000 Bonvoy Points so I could waste their time they refused. I respect them for that.

I fully expect they won't be so smart when I check into Cypress Harbour next month. I'll ask for $300 + $100 Charlie's gift card like they gave me last year. More than they will initially offer. I'm sure they will agree.

 

[TUGBrian]

doubt it would be difficult or require any sort of significant "sleuthing" skills to easily identify a number of entities that fall into this category of megarenter.... should they actually start driving down that road.

 

[pchung6]

Maybe MVC should consider to bring back Staroptions and phase out this stupid Abound points. Abound is just not very attractive and bad program. Vistana Staroptions are much better program. If they restart to sell Staroptions, maybe people will buy more.

 

[dioxide45]

Maybe MVC should consider to bring back Staroptions and phase out this stupid Abound points. Abound is just not very attractive and bad program. Vistana Staroptions are much better program. If they restart to sell Staroptions, maybe people will buy more.

Vistana still sells HomeOptions at certain Vistana sales center. Though usually to existing owners. StarOptions are still around, just for now, they just don't sell deeded weeks that come with VSN. Though you can still get them at most of the sales centers.

 

[CalGalTraveler]

I was offered WKV deeds last year during a sales preso at that site.

 

[VacationForever]

I was offered WKV deeds last year during a sales preso at that site.

I was only offered WKV gold weeks. They said that platinum weeks were bought by internal staff.

 

[dioxide45]

I was only offered WKV gold weeks.

Yeah, I suspect most of what they have to offer is reacquired weeks (deed back and foreclosures). Most people probably aren't loosing Plat+ WKV to things like that. Any Plat+ that might come across their desks probably gets snapped up real fast, even at the exorbitant retail pricing they place on them.

 

[CalGalTraveler]

@VacationForever My offers were also gold - low season. $10k for deeds that people here on TUG had to deed back because no one wanted them for free. Perhaps they offered a deed that a Tugger had deeded back? They also offered to requal 1 resale deed for that price - they didn't realize that one of the deeds was already grandfathered into Abound so they kept touting that one. The other was WKV SO mandatory and we are satisfied with Vistana SOs. We walked away.

 

[Hindsite]

Does MVC worry about this type of situation? If they do, how do they go about preventing it? Do they go the route that Bluegreen has in locking online access of owners they know have shared their credentials with such a rental operation? Can they do that?

I don't know how the Delegate role works in practice and whether that is a way that brokers are getting access, as opposed to logging in as the owner. I can't find a reference, but I'd be very surprised if sharing your login wasn't somehow against terms and conditions for use of the website, as its usually a basic security requirement. If sharing login details isn't against some terms and conditions that's likely to be something that they can, and should, introduce.

If using a Delegate is a way that is being used now, that may be a change that they make to the Exchange procedures.

They will need to leave a mechanism for those who have their ownership set up in a Trust, to still be able to operate the ownership and get the associated Bonvoy status.