Marriott Vacations Worldwide Corporation

assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Tony Terry, Executive Vice President and Chief Financial Officer for Marriott Vacations Worldwide. Thank you. You may begin.

Thank you, and welcome to the Marriott Vacations Worldwide First Quarter 2022 Earnings Conference Call. I am joined today by Steve Wise, Chief Executive Officer, and our President, John Geller. I need to remind everyone that many of our comments today are not historical facts and are considered forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties, as described in our SEC filings, which could cause future results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the press release that we issued last night and the presentation we added to our website this morning, as well as our comments on this call, are effective only when made and will not be updated as actual events unfold. Throughout the call, we will make references to non-GAAP financial information. You can find a reconciliation of non-GAAP financial measures referred to in our remarks in the schedules attached to our press release. as well as the investor relations page of our website at ir.mvwc.com. It's now my pleasure to turn the call over to our CEO, Steve Wise.

Thanks, Tony. Good morning, everyone, and thank you for joining our first quarter earnings call. Before we share our financial results, I want to recognize the continued uncertainty in the world today. From significant geopolitical issues, supply chain disruptions, and inflationary pressures impacting our day-to-day lives to adjusting to a new normal as the pandemic wanes, the world definitely continues to be a complex place. However, despite these uncertainties, I couldn't be more proud of our associates and their continued dedication to our owners, members, guests, and each other. I want to take a moment to acknowledge every one of them at our destinations across the world, our corporate and regional offices, and our sales center. Their continued dedication is the driving force behind our success. While we are operating in a challenging landscape, there is something that remains true. People want to spend time and create memories together, and one of the best ways to do this is through a vacation, and we are perfectly positioned to make that happen. As I look at some of the compelling statistics about the state of leisure travel right now, I see that despite some of the inflationary headwinds, Americans continue to spend on travel. In fact, in one survey, 61% of Americans said that travel will be a high budget priority over the next three months, reflecting strong leisure demand. As specific to our owners, over 108,000 destination searches were completed on our owner website in March, a 20% increase versus March of last year. So that tells me that demand for leisure travel continues to be robust. Consumer sentiment around international travel is also showing some green shoots. And for us, that means international travelers are starting to come back to key domestic markets like Florida and Hawaii. In fact, though not returning to pre-pandemic levels yet, according to the US Travel Association, international travel to the US is forecasted to be significantly higher in 2022 than it was in 2021. So let's transition to our results for the quarter. Adjusted EBITDA for the quarter totaled $188 million and contract sales totaled $394 million, both representing significant improvements over the prior year and exceeding pre-pandemic levels. In fact, Even excluding Welk and despite some headwinds from the Omicron variant in January, this was the highest first quarter contract sales result we've had as a public company, showing the strength in our business. We continued to see strong occupancies in the first quarter in our vacation ownership business, even as inflation persisted and gas prices rose toward the end of the quarter. Our total occupancy levels were 88% in line with pre-COVID-19 results. despite a lag in the recovery in certain urban and international markets. BPGs once again far outpaced our expectations, reaching over $4,700 in the quarter, showing the continued demand for leisure travel experiences and the relevancy of our product offering. At the end of March, we began pre-marketing our new combined product offering at our Marriott, Weston, and Sheraton sales centers, and we expect to complete the development of the related technology and officially launch the product later this summer. The combined product offering will bring our Marriott, Westin, and Sheridan branded vacation ownership products together, allowing owners of each product more flexibility across our Marriott branded portfolio. Early feedback from owners has been quite positive to the offer of more destinations and flexible usage options. Before we move on to the exchange and third-party management, I want to touch on the integration of the Welk and Hyatt Vacation Ownership businesses. You may recall that we completed the acquisition of Welk Resorts just over a year ago, and I am pleased with the significant progress we continue to make integrating the businesses under the Hyatt Vacation Ownership umbrella. This past April, we introduced Hyatt Vacation Club and rebranded Welk's Vacation Ownership program. is the Hyatt Vacation Club Platinum Program, converting former Welk sales centers to now sell a Hyatt branded vacation ownership product. The Platinum Program includes expanded vacation benefits and access to a collection of upscale resorts and highly desirable vacation destinations. Most of these former Welk resorts are now available for rentals on stays on hyatt.com and beginning later this year, owners will be able to exchange their annual usage for World of Hyatt Loyalty Club points. We look forward to sharing a more in-depth overview of our new Marriott combined product offering, as well as the Hyatt Vacation Ownership Initiatives with you at our Investor Day on Thursday, June 16th at the New York Stock Exchange. Moving on to exchange and third-party management, and specifically to Interval International, we experienced 9% year-over-year member growth as a result of the new agreements and affiliations that I discussed last quarter. In addition to these new affiliations, we just renewed our agreement with Westgate Resorts, one of the largest privately branded timeshare companies, thereby extending one of our most tenured affiliations for another five years. From an exchange perspective, inventory availability at Integral International continues to be challenging, primarily due to lower member direct deposits. As you might imagine, lower owner travel during the pandemic has led to a higher than historical average owner usage as travel restrictions eased. That higher owner usage directly impacts member inventory deposits international. However, despite the lower deposits, Interval has done a fantastic job managing the inventory they do have with an inventory utilization above pre-pandemic levels. On the third-party management front, I'm pleased to announce that we closed on the sale of our VRI Americas business last week for approximately $60 million of net proceeds, or 15 times 2022 full-year adjusted EBITDA. As a reminder, VRI Americas is an independent manager of unbranded vacation ownership resorts, which we acquired as part of the ILG acquisition in 2018. In 2021, after evaluating the growth prospects of VRI relative to our other businesses, we entered into the process to find VRI a home with an operator that could better unlock its growth potential and provide enhanced value to its managed homeowner boards and associations. Given VRI's limited contribution to the company's overall adjusted EBITDA, the sale does not impact our guidance for the year. I'd like to thank the VRI associates for their dedication to MVW and their customers. Overall, I'm very pleased with the strong start we've had to 2022. I'm excited about the innovations we have planned for the months and years ahead. And with that, I'll turn the call over to John to provide a deeper overview of our first quarter performance.