Travel + Leisure releases third-quarter financials

Vacation ownership and membership travel firm Travel + Leisure Co released its financial results for the third quarter of this year.

Financial results included in the report are those for the three-month period that ended on 30th September.

Among the highlights presented in the report are Travel + Leisure’s net quarterly income of US$97 million with net revenue of $993 million. The company likewise reported diluted earnings of $1.39 per share from continuing operations. 

Travel + Leisure also reported an adjusted EBITDA of US$242 million and adjusted diluted earnings per share of $1.57.

Keeping priorities in mind

According to Travel + Leisure Co president and chief executive Michael D Brown, the company’s third-quarter results show that it is executing well against its key priorities for 2024 in light of solid demand for its products and services.

Brown said: “We have good momentum in our vacation ownership business and were especially pleased with our VPG performance, which remains consistently above $3,000, even during our peak new owner mix quarters.

He added that Travel + Leisure is already making plans for 2025. Brown expects the momentum in the company’s vacation ownership business to continue, having achieved its targeted new owner mix, the ramping up of Accor sales, and easing of interest rate headwinds. 

More progress is also expected for Travel + Leisure’s ongoing travel and membership transformation which will enable that segment to stabilise.

Segment results in the third quarter

Vacation ownership revenue rose by two percent to $825 million in the third quarter of 2024 compared to the same period in the prior year. 

Net vacation ownership interest (VOI) sales increased by five percent year over year despite a higher provision rate and Gross VOI sales increased by one percent despite lower fee-for-service sales. 

These increases were driven by a four percent increase in tours compared to the same period last year, partially offset by a three percent decrease in VPG. 

Third quarter adjusted EBITDA was $202 million, flat to prior year, due to the revenue growth and lower cost of VOIs sold, offset by an increase in sales and marketing expenses. 

On the other hand, travel and membership revenue was at $168 million in the third quarter, down by three percent compared to the same period in the prior year. 

This was driven by an eight percent decrease in transactions, partially offset by a three percent increase in revenue per transaction. 

Third quarter adjusted EBITDA was $62 million, flat to the prior year period, as the revenue decrease was offset by higher margin transactions and effective cost management.

Chief financial officer Mike Hug said of the results: “We had a solid third quarter driven by strong volume per guest performance. The VPG, combined with our disciplined cost management, offset the majority of the $14 million year-over-year headwind from higher interest rates and variable compensation. The financial strength of our consumer remains solid and trends with our loan portfolio for the quarter were stable.”

Hug added that the company’s strong cash generation is evident in the $154 million of adjusted free cash flow produced in the quarter and the $105 million returned to shareholders through dividends and share repurchases.

Outlook for Q4-2024

Travel + Leisure also released guidance regarding its outlook for the fourth quarter of the year.

The company anticipates an adjusted EBITDA of $240 million to $260 million, along with gross VOI sales of $550 million to $600 million, and a VPG of $2,900 to $3,000

Adjusted EBITDA for the travel and membership segment is at $45 million to $50 million. 

The company also updated is previous guidance for the 2024 full year with an adjusted EBITDA of $915 million to $935 million (no change from prior outlook); gross VOI sales of $2.25 billion to $2.30 billion versus its prior outlook of $2.25 billion to $2.35 billion; and VPG of $3,000 to $3,025 versus the previous outlook of $2,950 to $3,050.