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MVC presentation at Jefferies Virtual Consumer Conference - June 24th 2020

BigMac

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<> Right. So look, I want to make sure we touch on the notion of construction and development of inventory. How much inventory do you have? Do you need to do some building this year or have some building occur this year in order to shape out your inventory?

> Yeah, no, I mean, we didn’t have anything under development on our balance sheet, right, even plan for 2020. We were actively pre-COVID-19 looking for new deals to bring on new flags, et cetera. Obviously in the near-term, we’ve put a pause on that. Coming into the year to answer your question, David, we had over two years of inventory based on call it a $1.6 billion annual contract sales space, obviously that has slowed down. We’ll see how that recovers, but that just extends out our need for inventory. We’ve got some commitments still on our asset light deals first quarter of next year, assuming we don’t look to push these out. If we don’t need the inventory contractually, we have roughly $140 million do in the first quarter of next year, which would be taking down the remainder of New York, some more of our San Francisco asset light deal, as well as two smaller international deals, one in Costa Rica and some units out in Bali at a New Renaissance that’s getting delivered there, which is just going to be a fabulous resort. So with that, we’ll still plan to open sales centers in Costa Rica and Bali as we open those new sites, if you will. But for now, we still have the ability to repurchase inventory on the secondary market and Waihekes and other one, but that was always slated to be built as a capital efficient deal and most likely not get delivered or pay anything until, call it end of 2022, 2023 timeframe. So, once we get a better sense and the other opportunity that could come out of this would be some distressed properties, right. Specifically, if you look at some of the deals that we’ve done on the development side in some of our urban locations, like Washington, where we took a floor out of the Mayflower Hotel, there could be some opportunities where just given where owners are and maybe excess capacity that they’d want to potentially take some money off the table and we could co-locate if you will, at an existing resort somewhere. So, we’re going to continue to get back into development longer term. It’s just right now, we’re – we don’t, we’re not, I wouldn’t say have too much inventory assuming sales start to ramp back up here, but we’ve got some time to given the near-term slow down before we start committing ourselves to new deals.

<> If I can follow that up for a minute and just talk about geographies in particular by Hawaii is a discussion, frankly, that touches an awful lot of our coverage universe. And in many respects is arguably the ideal timeshare location, except when it’s not, what is your strategy for Hawaii today? Do you look to be opportunistic with the expectation that it returns to normal or do you look elsewhere and just take a bit more of a wait and see, because there may be opportunities that show up that are compelling under the current circumstances, right? <> Yeah. Yeah. Clearly nothing, Dave – I mean, once I think we get past this, it might for Hawaii, it might take a little bit longer, but I think when we look at our owners and we’ve done some surveying of our owners and their propensity to fly on their next vacation and not surprisingly, like I mentioned in St. Thomas and St. John, where we have resorts that are open, owners are coming back, people want to go on vacation and I don’t see Hawaii longer term losing that desirability of where our owners want to go. So yes, there were – clearly there were opportunities in Hawaii, Maui those types of locations that absolutely those would be things that we’d be taking a hard look at. And that’s where I go back to my earlier statement; some of those things, not necessarily Hawaii, but in other market the question becomes, yes, are there some interesting opportunities because of longer term issues with an existing property, et cetera. So we’ll obviously keep an eye on it, but there’s nothing that we’re hearing or seeing that would lead us to believe that Hawaii as a destination isn’t going to continue to be highly sought after.
 

GregT

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Marriott: Maui Ocean Club Lahaina Villas (3BRx5), Ko Olina, Shadow Ridge II, Willow Ridge, Aruba Ocean Club, DC Points HGVC: Flamingo, Sea World, I-Drive, Starwood Bella (x4), SDO, TradeWinds, Worldmark
Did I miss an announcement of a property in Washington? That's interesting -- and I like the model of taking out an entire floor of an existing hotel, that really opens up opportunities. Thanks for posting this!

Best,

Greg


Edited: just did a search -- I guess it's been there for a couple years! Thanks again for posting this...
 
Last edited:

hangloose

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Joined
Aug 8, 2012
Messages
1,275
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NC
Resorts Owned
Marriott's Grande Vista (x2)
Marriott's Maui Ocean Club
Marriott's Ko Olina Beach Club
Marriott's Ocean Pointe
Did I miss an announcement of a property in Washington? That's interesting -- and I like the model of taking out an entire floor of an existing hotel, that really opens up opportunities. Thanks for posting this!

Best,

Greg


Edited: just did a search -- I guess it's been there for a couple years! Thanks again for posting this...

Yes. The Mayflower is a Pulse property in Wash DC. We stayed there a year or two ago. It is a fantastic property in a great location within walking distance (in my opinion) to major sites. A lot of history in this hotel.
 

davidvel

TUG Member
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Location
No. Cty. San Diego
Resorts Owned
Marriott Shadow Ridge (Villages)
Carlsbad Inn
<> Right. So look, I want to make sure we touch on the notion of construction and development of inventory. How much inventory do you have? Do you need to do some building this year or have some building occur this year in order to shape out your inventory?

> Yeah, no, I mean, we didn’t have anything under development on our balance sheet, right, even plan for 2020. We were actively pre-COVID-19 looking for new deals to bring on new flags, et cetera. Obviously in the near-term, we’ve put a pause on that. Coming into the year to answer your question, David, we had over two years of inventory based on call it a $1.6 billion annual contract sales space, obviously that has slowed down. We’ll see how that recovers, but that just extends out our need for inventory. We’ve got some commitments still on our asset light deals first quarter of next year, assuming we don’t look to push these out. If we don’t need the inventory contractually, we have roughly $140 million do in the first quarter of next year, which would be taking down the remainder of New York, some more of our San Francisco asset light deal, as well as two smaller international deals, one in Costa Rica and some units out in Bali at a New Renaissance that’s getting delivered there, which is just going to be a fabulous resort. So with that, we’ll still plan to open sales centers in Costa Rica and Bali as we open those new sites, if you will. But for now, we still have the ability to repurchase inventory on the secondary market and Waihekes and other one, but that was always slated to be built as a capital efficient deal and most likely not get delivered or pay anything until, call it end of 2022, 2023 timeframe. So, once we get a better sense and the other opportunity that could come out of this would be some distressed properties, right. Specifically, if you look at some of the deals that we’ve done on the development side in some of our urban locations, like Washington, where we took a floor out of the Mayflower Hotel, there could be some opportunities where just given where owners are and maybe excess capacity that they’d want to potentially take some money off the table and we could co-locate if you will, at an existing resort somewhere. So, we’re going to continue to get back into development longer term. It’s just right now, we’re – we don’t, we’re not, I wouldn’t say have too much inventory assuming sales start to ramp back up here, but we’ve got some time to given the near-term slow down before we start committing ourselves to new deals.

<> If I can follow that up for a minute and just talk about geographies in particular by Hawaii is a discussion, frankly, that touches an awful lot of our coverage universe. And in many respects is arguably the ideal timeshare location, except when it’s not, what is your strategy for Hawaii today? Do you look to be opportunistic with the expectation that it returns to normal or do you look elsewhere and just take a bit more of a wait and see, because there may be opportunities that show up that are compelling under the current circumstances, right? <> Yeah. Yeah. Clearly nothing, Dave – I mean, once I think we get past this, it might for Hawaii, it might take a little bit longer, but I think when we look at our owners and we’ve done some surveying of our owners and their propensity to fly on their next vacation and not surprisingly, like I mentioned in St. Thomas and St. John, where we have resorts that are open, owners are coming back, people want to go on vacation and I don’t see Hawaii longer term losing that desirability of where our owners want to go. So yes, there were – clearly there were opportunities in Hawaii, Maui those types of locations that absolutely those would be things that we’d be taking a hard look at. And that’s where I go back to my earlier statement; some of those things, not necessarily Hawaii, but in other market the question becomes, yes, are there some interesting opportunities because of longer term issues with an existing property, et cetera. So we’ll obviously keep an eye on it, but there’s nothing that we’re hearing or seeing that would lead us to believe that Hawaii as a destination isn’t going to continue to be highly sought after.
Translation:

"Ha, ha ha. We'll just keep gobbling up weeks as people can't afford to keep paying MF, to convert to our trust so we can sell more points. Doesn't matter if they are in good locations or not.

Of course we'll be telling all the buyers they can go to Maui in the summer, despite the weeks we acquire being in the mountains in May and October, or hurricane weeks in Florida. As long as we have points to sell it doesn't matter what underlying weeks they are tied to. Our sales force isn't dumb enough to tell buyers that it will be really hard to get where they really want to stay, and they are fighting for inventory that includes lots of dog weeks. They'll say "Points are flexible, it's just like booking a hotel."

We pray that people complain about lack of inventory at prime locations. Then our sales people can tell them they are so far behind and need to buy MORE points to get them priority, because they were cheapskates and don't care about their family's vacations, cause they bought so few points to begin with. Then they can sell even more points.

This whole points club is the best thing we've done. Total smoke and mirrors. No transparency in any public documents regarding how we reserve the weeks for our club over those silly old legacy owners. Stock price is what matters."
 
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