Conference Transcript - VAC 2026-06-16

David Katz, Analyst — Jefferies

Morning everybody I'm David Katz gaming lodging and leisure analyst with Jeffries and we are going to have a discussion this morning with what I've classified as the easiest upgrade of a stock I've made in quite some time in a very very complicated market Marriott vacations CEO Matt Avril is is joining us this morning and I wanted to talk about first if we could just some of the near term execution priorities and what are some of the first things you've done since taking over versus the prior regime and just

Matthew Avril, CEO

executing the business. Well I think you hit the key word which was executing the business. When I joined in mid-November the focus was we knew we had to re-earn some confidence and that was internally as well. We had to develop a mindset of how we were going to win as a company and clearly from you know the stock price is sort of a voting mechanism and that had had a very clear performance over a couple year period of time we needed to get back on the fundamentals of our business we sent a message internally and externally and they were always the same which is we were focused on our capital discipline we were focused on our execution and we were going to improve the speed of decision-making and operating the business and those were the messages day one and from an overall perspective I think anytime you step into a situation like that you go into evaluation of who do you need in order to execute and then what do

David Katz, Analyst — Jefferies

you need to do and that's what I got after pretty quickly. Right and has the strategic direction of

Matthew Avril, CEO

the company changed at all since joining versus prior? Fundamentally I would not say it was strategic direction as much as it was execution and I would also say that some of the feedback that we got from our key shareholders and the constituents and analysts that looked at us in terms of, and I've mentioned it, capital discipline and execution. And, you know, sometimes you want to make it more complicated than what the real drivers are. And for us, it was those two.

David Katz, Analyst — Jefferies

I'd love to just get a quick update on your commentary in terms of the business. I know you've talked about very high resort occupancy, looking out into the future. What does the summer hold for Marriott Vacations and the business? And, you know, what can you share with us?

Matthew Avril, CEO

Sure. First of all, we're very excited about what's ahead generally. And then specifically with regards to the summer, when you look across our portfolio of resorts, clearly the summertime is very attractive in all of our destinations. If you look at an environment like Orlando, where we're very well represented system wide, we're looking at 90 percent occupancy across the system. And we've said that in the past on a full year basis, we always run in the high 80s, 90 percent occupancy. And that's a testimony to our owners. With 700,000 owners in our system, they love the product. And so we see great owner participation. And in the markets where we have the ability to then invite transient guests, very strong demand.

David Katz, Analyst — Jefferies

Can we talk about some of the recent initiatives in a bit more detail? I know you and your management team have made some changes to how the business is being done. I'd love to get some detail on those.

Matthew Avril, CEO

And, again, it's starting to go back to a phrase I just used. It's sort of first two, then what, and a big decision in the who category, if you will, was our ability to bring on Mike Flasky as our president and chief operating officer. And Mike has a deep, rich history in the industry, and we've known each other for a long time. So I knew very much what Mike was capable of and what he had delivered elsewhere. And those specific initiatives that we got after was to update and provide more value, first and foremost to the owners which then gives your sales executives and your sales teams that much more motivation and enthusiasm if you will about what we're doing so that first initiative we rolled out May 1st was an enhancement to our owner benefit levels which you'll hear us refer to as OBLs we both updated the ones we had and added two more and so we were able to bring more benefits and services to our higher tier customers which then in turn goes to their incentive to want to own more of our product we also have then June 1st rolled out and introduced it our premier vacations and for us that was a modification most companies obviously in this industry provide a first-day benefit to consumers who choose to buy and in our case we modified that benefit in a way that keeps and brings customers back into our system And so that Premier Vacations not only helps us now because it's an attractive proposition to the buyer today, but the use of that product brings them back into our system in a way that we can manage. And we've featured five of our key markets for the use of that Premier Vacation. And then lastly, we have our Inner Circle events platform. We have our first event next Monday, June 22nd. It'll be Lee Bryce in Orlando. And those event platforms are, again, do a number of things. And this is, again, something that Mike and some of the additional team members we've been able to bring on since then are very familiar with. But it's an owner engagement, because in the end, we're not a commodity. We're an experienced provider, both from the quality of our properties, our owners' loyalty. They think of themselves as owners, not customers, not transient guests. And the inner circle events give them more reason to associate very positively with our brand. And it also improves our ability to bring owners that are on property into our sales galleries to meet with our teams.

David Katz, Analyst — Jefferies

Understood. You know, one of the questions we get all the time is, you know, what we're seeing from the underlying core consumers. Right. And obviously you service a range. What are you seeing from your range of core consumers?

Matthew Avril, CEO

You know, I think from, like, clearly we skew towards those that have both a penchant for travel and people spend their discretionary money in different ways. Somebody else may be off, you know, they're dreaming about their next car. We have people that have a penchant for travel. So that's number one. And when you look at all of the indicators around travel generally and leisure travel specifically, the macro trends around that are spectacular. And you've seen that going on, I would argue, for the last 25 years, that shift from stuff to experience. So we see that. We skew towards the up-right. When you look at our brands with Marriott and Weston and Sheraton and obviously Hyatt as well, we skew up. So whether you want to call it a case-shaped economy or any of those things, our customer is resilient, strong. And I do think as the tide raises, I mean, if you look at some of the consumer sentiment polls, they've been at historically low levels. I think you're going to see those start moving up, both from an economic standpoint, hopefully stability in the Middle East. That's not a driver for us internationally like it is for others. But just in general, when people feel more optimistic about what's ahead, it's better for everybody's business, certainly including ours.

David Katz, Analyst — Jefferies

And while we make long-term fundamental calls on stocks, I do need to ask about the short-term, too. Can you remind us what you've said about pacing for May, pacing for June?

Matthew Avril, CEO

Sure. I think what we've said, I mean, clearly for when we did our last call, we commented that April was up 8% year-over-year. And we have typically not done interim monthly kinds of reporting like that. We thought it was very important in that setting. And we have at a recent conference we commented on that we're really pleased with the momentum we've seen since then in the business. So while we haven't commented on specific numbers, we really began some momentum in April around the discipline and operating what we call tour logistics, how we operate the sales galleries. That was enhanced immediately. And we began to see those results in April. Since then, we've been able to introduce some of these additional initiatives that I just spoke about. We're pleased with the momentum that's continued in the business.

David Katz, Analyst — Jefferies

Appreciate you being here and doing this with us. As I mentioned earlier, this is one of our top picks for this year. And frankly, in a complicated world, we have found the execution story easy.

Matthew Avril, CEO

Thank you. We appreciate it. We're excited about what's ahead for Marriott Vacations.