Marriott Vacations Worldwide Corporation

Greetings and welcome to Marriott Vacations Worldwide Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator 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 this conference over to your host, Mr. Neil Goldner, Vice President, Investor Relations. Thank you, sir. You may begin.

Thank you, Laura, and welcome to the Meritifications Worldwide Second Quarter 2022 Earnings Conference Call. I am joined today by Steve Wise, Chief Executive Officer, President John Geller, and Tony Terry, our Executive Vice President and Chief Financial Officer. 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 reference to non-GAF 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.mbwc.com. With that, it's now my pleasure to turn a call over to our CEO, Steve Weiss. Thanks, Neil.

Good morning, everyone, and thank you for joining our second quarter earnings call. I'd like to begin by recognizing and thanking our 20,000-plus associates. I'm continuously amazed by the hard work and dedication they give to our owners, members, and guests every day, especially this summer as leisure travel continues to boom. Our associates are at the heart of our experience and our culture, and I truly believe they are the reason why we were recently recognized as a most loved workplace by the Best Practice Institute and ranked fourth in LinkedIn's 2002 Top Companies in Travel and Hospitality to Grow a Career. These awards underscore why we're not only a great company to vacation with, but also a great company to work for. Well, I'm going to share with you some compelling statistics about the current state of leisure travel. The data this summer continues to show that leisure travel is back. In fact, 88% of those who remain concerned about COVID-19 still plan to travel and are not canceling trips. According to the GSA, the checkpoint travel numbers are close to pre-pandemic levels. Consumers are continuing to spend on travel expenses, with airline spending up 18% from last year and lodging up 34% from June 2021. According to the U.S. Travel Association, leisure travel spending exceeded 2019 levels in April for the first time since the start of the pandemic. This all indicates that leisure travel demand remains strong, which we saw in our remarkable second quarter results. We generated $506 million in contract sales this quarter, up 40% from the prior year, and adjusted EBITDA grew 55 percent, driven by strong development and real profit growth in our vacation ownership segment. Occupancies exceeded 90 percent during the second quarter, with Europe and most domestic markets in high demand by consumers, while Asia Pacific continued to recover. Tour flow continued to increase sequentially as a percent of 2019 tours, while VPG increased 7% year-over-year to more than $4,600, illustrating the continued demand for leisure travel experiences and the relevancy of our product offerings. During the quarter, we launched Vacation Next, a multi-year journey beginning with the introduction of Abound by Marriott Vacations, which unifies our Marriott-branded vacation ownership products. Through this new program, Marriott, Westin, and Sheraton owners now have direct access to more than 90 branded resorts around the world using a common points currency. The Vacation Next journey will continue to leverage our investment in technology for enhanced digital experience while transforming our marketing, sales, and service for owners and the next generation of travelers. We began pre-marketing the unified product at our Marriott, Weston, and Sheraton sales centers at the end of March, and I'm happy to say that as of today, the majority of our sales centers have started selling our newly unified product. While still early in the process, feedback from owners has been very positive. A quick update on the Welk and Hyatt Vacation ownership integration. As you know, we closed the Welk transaction over a year ago and continue to be pleased by the significant progress we've made integrating the two businesses under the Hyatt Vacation Ownership umbrella. We rebranded the Legacy Welk Points program to Hyatt Vacation Club in April and continue working to align the Hyatt Vacation Ownership business, which will include a harmonized service culture, owner and guest experience, and marketing and sales programs. Moving on to exchange and third-party management, membership at Interval International grew 21% on a year-over-year basis, primarily driven by the affiliations with Disney, El Cid, and Wealth Resorts. However, as we've discussed in the past, reduced travel during the pandemic has led to higher home resort usage by Interval members this year, reducing the amount of available inventory. Despite these near-term headwinds, Interval continues to do an extraordinary job maximizing inventory utilization. Overall, we've had a very solid first half of the year with the launch of abound binary vacations, strong profit growth, and margin expansion. We also disposed of two non-court assets generating more than $100 million in proceeds, and we've returned a substantial amount of cash to shareholders, which Tony will discuss later in the call. It's been a great start to the year for Merri Vacations worldwide, and I'm optimistic about the trajectory of our business for the months and years ahead. With that, I'll turn it over to John.