Marriott Vacations Worldwide Future Business Plan from Annual Report

[majkirk]

One of my stock holdings is VAC Marriott Vacations Worldwide (MVW). Here are few tidbits that I found this year in the Annual Report.

Who is the customer base that MVW is targeting? You the current owner. Page 7 of annual report has a comment. Approximately 70% of VOI sales in 2023 were to existing owners. That means if you attend a presentation when vacationing seven out of ten of us are going to leave our trip with more points or a purchase. That is an amazing kill rate.

How do they do it? (page 8) We sell them on longer stays and that greater flexibility in their vacation choices. Sales to existing owners typically have significant lower sales and marketing costs than sales to new owners. Turnover of help is pretty low. The average manager or hourly employee turnover is amazing. Managers average 12 years and the worker bees six years. Good place to work.

Most products are through point-based program. They are trying to get you to use points for different vacation experiences like a cruise, safaris, guided tours or another innovative idea. Watch those points disappear!

They continue to sell weeks-based units. But, they are attempting to have folks voluntarily give up those weeks to move into the points-based program. This will entail payment of an initial enrollment fee and annual club dues.

The upscale tier vacation program is sold at resort-based centers and some off-site locations. They are located throughout the US and in 30 countries and territories around the world!! THE WILL FIND YOU!!!

Make sure your friends know about the secondary market for Marriott is going to work on its tour flow cost to better turn first-time guests with a better pitch to them.

Do you travel for work? If you are a Hyatt or Marriott customer and are staying at one of their resorts expect to be pitched. If you do a tour and do not buy do not fret they have a deal for you. You could purchase a return package to that resort and guess what the sell rate becomes...twice as likely. BEWARE!

The secondary market. They do not like it!! Why? You might not get all the ancillary benefits they offer such as Interval Membership. They, also, say they monitor the secondary market and in many cases if it is a property they own/manage and they have a right of first refusal in the contract. They will exercise this WHEN IT IS ADVANTEGOUS for us to do. (Page 12).

Addressed again ) Page 34 the resale market. Sales of VOIs by existing owners, which are typically at lower prices that the prices we would sell interests, can create pricing pressure on our sales model. Deceptive VOI resale schemes can also create negative damage to our reputation. This is more a long-term look that today,

The stock VAC is available on the NYSE. The range this year has been a high of $134.09 and a low of $72.78. Currently on Memorial Day weekend it is $90.22

 

[bizaro86]

Approximately 70% of VOI sales in 2023 were to existing owners. That means if you attend a presentation when vacationing seven out of ten of us are going to leave our trip with more points or a purchase. That is an amazing kill rate.

70% of sales to existing owners doesn't mean that 70% of owners attending presentations buy, the actual number would be much lower than that. It has to be given their disclosed volume per guest and a reasonable estimate of average sales prices.

All it means is that most of their sales come to people who already own not new buyers.

 

[dioxide45]

70% of sales to existing owners doesn't mean that 70% of owners attending presentations buy, the actual number would be much lower than that. It has to be given their disclosed volume per guest and a reasonable estimate of average sales prices.

All it means is that most of their sales come to people who already own not new buyers.

Yup, it is always easier to sell to an existing customer who knows the product than to sell to someone who doesn't.

 

[davidvel]

70% of sales to existing owners doesn't mean that 70% of owners attending presentations buy, the actual number would be much lower than that. It has to be given their disclosed volume per guest and a reasonable estimate of average sales prices.

All it means is that most of their sales come to people who already own not new buyers.

Correct. It means that of the people that buy, 70% of those are existing owners, and 30% are not. It says nothing about the conversion rate of presentations, either to owners or non-owners. Most likely this is because most of the people at presentations are existing owners.

 

[Fido Chuckwagon]

I wonder what that says for long-term viability as existing owners age out and die. 30 percent in a vacuum without the raw number of new owners being sold is hard to base that on though I guess.

 

[TolmiePeak]

I wonder what that says for long-term viability as existing owners age out and die. 30 percent in a vacuum without the raw number of new owners being sold is hard to base that on though I guess.

This is what I'm wondering. We recently went to the owners social at Waiohai. I was the only person there under 60. Plenty looked to be 80+. Not good for long term viability of the product.

 

[dioxide45]

I think this is a reason that VAC is seeing their sales starting to flatline some. Yeah, they say "maui maui maui" and how they are x% over 2019, but fact is you can only go back to the well so many times before the well runs dry.

 

[bizaro86]

I think this is a reason that VAC is seeing their sales starting to flatline some. Yeah, they say "maui maui maui" and how they are x% over 2019, but fact is you can only go back to the well so many times before the well runs dry.

Indeed. Once someone has 3-4-5 etc weeks of vacation there's a level where they become not a realistic buyer any more. As the owner base ages that group starts to mix with the "looking to slow down travel" group and becomes sellers not buyers.

 

[rickandcindy23]

I wish people would find TUG before they buy more with Marriott. We have seen several people here on TUG who were nearly talked out of their Mandatory SO's for some crappy Flex product that also works in Abound.

 

[HappyClam]

So where do l begln? Flrst, we own July, redweeks, flxed weeks flxed unlt at Bluewater Resort Hllton Head. Been wlth Splnnaker slnce 1997. Old man Taylor passed last year, hls klds run the shop now. We are happy owners. A few mlnor glltches but almost always resolved amlcably. He got a lot of my money but that ls on ME. We upgraded, added weeks, went from floatlng to flxed, and then flxed a unlt we loved. But lts what we want and what we use. Our klds love lt and soon the grands wlll too. We have exchanged successfully. We get Developer Bonus Weeks unlmlted at DEEP dlscounts (baslcally the annual dues for a week of usage), space avallable. We also belong to lnterval and have exchanged and also used Getaways. All ln all we are very happy. But yes, tlmeshare ls baslcally a forever contract and lt passes to your klds elther ln a wlll or probate or trust and they have to pay the dues. Or they foreclose. But amortlzed over 28 years usage? We dld VERY well, and another 40 years? Amazlng value. Flexlble to move around FREE wlthln Splnnaker group of resorts, just call reservatlons. lnterval ls generally better quallty than RCl Resorts but Marrlott owns Interval and now Hilton bought Dlamond Resorts so we have access to all those, plus Sheraton Vlstana Resorts. We cant access Rltz Carlton however. And many Hyatts are ln the Interval lnventory onllne or the book. RCI was bought by Wyndham and they will do them well....
Slnce we own Hilton Head, a hlghly deslred vacatlon locale, lnterval glves us 2/1 automatlcally. The certlflcate ls better than an Accommodatlon Certlficate but does have some restrlctlons. ln Addltlon Platlnum and Gold Members at Interval can use the Short Stay Getaway plan and turn thelr deposlted week lnto two 6 nlght stays....essentially two weeks so that makes three weeks out of 1. You can book that as one vacatlon or split lt up as needed and of course what ls avalable and your tradlng power depends on when you deposlt and what you own.
l tell people that nobody forced you to buy anythlng. A blt of sales pressure but easily stopped by gettlng up from the table and saylng "where ls my partlng glft?" The end. YES, they sell a lot to present owners who want more tlme. More polnts. l am deeded, so thats what we wanted. Flxed cost except for the dues, whlch by the way, Splnnaker among lowest ln lndustry. At some polnt I expect Wyndham or Marrlott or Hllton or Hyatt to buy Splnnaker now that old man Taylor has passed. Thats flne.

Dld we make a good declslon over the years? YES. Love the resort, many frlends, and can trade extremely well, plus Getaways and also Developer Bonus weeks lnternally. NOT TRAPPED to my flxed weeks elther, just call reservatlons. Dues cover taxes, lnsurance, repalrs, furnlture refreshlng, grounds, pool, utilltles, ....housekeeplng. Use, enjoy and leave. No worrles. Rents reasonably well too. Thats all folks.

 

[rickandcindy23]

Wyndham is likely to take over Spinnaker. Marriott will not. They have enough resorts in Hilton Head. Glad you own what you love.