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spk02: 2024 earnings 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 the conference over to your host, Mr. Neil Goldner, Vice President Invest Relations for Marriott Vacations Worldwide. Thank you. You may begin.
spk01: Thank you, Melissa, and welcome to the Marriott Vacations Worldwide First Quarter earnings conference call. I'm joined today by John Geller, our President and Chief Executive Officer, and Jason Marino, 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 which could cause future results to differ materially for those expressed in or implied by our comments. Forward-looking statements in the press release that we issued last night, as well as 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 information, measures referred to in our remarks, in the schedules attached to our press release, and on our website. With that, it's now my pleasure to return the call over to John Geller. Thanks,
spk10: Neil. Good morning, everyone, and thank you for joining our first quarter earnings call. It was great to see so many guests enjoying time with their family and friends at our resorts, making lasting memories during the first quarter. That's why they come back year in and year out, and with a system-wide occupancy running 90% in Q1, we grew contract sales by 3% excluding Maui, despite having a difficult VPG comparison, with first-time buyer tours growing 9%. We also started taking reservations for our new Marriott Vacation Club Resort in Waikiki at the end of the quarter, which remains on track to open later this year, and reservations have been strong for this new property. Owners have consistently told us they wanted us to add a location in Waikiki, and this new resort is already bringing excitement to the system. Concurrent with the resort opening, we plan to open a new sales gallery that we believe could be a meaningful contributor as it ramps up over a few years. And with Japanese arrivals to Hawaii up almost 75% -over-year in the first quarter, the timing of this new resort couldn't be better. We've made good progress adding new marketing and sales executives in Maui, and still expect contract sales to be up around 5 million this year. International contract sales grew more than 25% -over-year, driven by double-digit sales. I'm also happy to announce that we recently signed an agreement to develop a new 60-unit Marriott Vacation Club Resort in Thailand. The resort will be co-located with an existing JW Marriott Hotel in Khao Lak, and will include a new on-site sales gallery when it opens in a few years. This will be our seventh resort in the Asia Pacific region, and the team is busy working on other potential development opportunities around the world. Our Hyatt business also continues to progress nicely. By leveraging proven branded channels, we've been able to grow our Hyatt package pipeline, while simultaneously replacing lower-quality tours with higher-quality, more cost-effective tours. Our Hyatt Vacation Club owners continue to utilize and enjoy the new owner benefits that we rolled out last year through the Beyond program, and we continue to work toward launching a consolidated Hyatt product. In our exchange and third-party management business, Interval International performed in line with our expectations for the quarter, with active members unchanged -over-year and membership and getaway revenue increasing. As previously discussed, last year we hired a new Chief Information Officer to drive our IT transformation efforts, and he spent a considerable amount of time analyzing where our opportunities lie. While this is a multi-year journey, our IT efforts this year will continue to be centered around consolidating legacy systems, modernizing our software, and increasing automation, while continuing to enhance our data and analytics capabilities to improve the efficiency of our marketing campaigns. Looking forward, we ended the quarter with 270,000 packages, and our team is working hard to get these customers on vacation. At the same time, the consumer shift to experience continues to benefit our business, with 84% of people recently surveyed planning to spend more or the same amount of money on travel this year compared to last year. International inbound travel to the U.S. continues to recover and is expected to approach pre-pandemic levels this year. Meanwhile, although the economy remains on a solid footing, consumers are concerned about elevated price levels, which could impact their spending. Finally, as we approach the important summer vacation months, keys on the books in both North America and internationally are up a few points -over-year. With that, I'll turn the call over to Jason to discuss our results.
spk07: Thanks, John. Today I'm going to review our first quarter results, our balance sheet and our liquidity position, and our outlook for the rest of the year, starting with our vacation ownership segment. Coming into the year, we knew our most difficult sales comparison was going to be in Q1, so we feel very good about our first quarter results. Contract sales declined 1% due to Maui and the difficult BPG comp, while tours increased 4% -over-year. And as John mentioned, contract sales grew 3% -over-year, excluding Maui. As expected, development margin declined -over-year due to lower BPGs, higher marketing and sales costs and a higher sales reserve, as well as unfavorable reportability. Delinquencies and defaults continue to run higher than history would suggest, which is a continuation of last year's trends. We continue to work hard to get delinquencies down, and we believe our reserve is currently at appropriate levels, though we do need to see loan performance improve. Rental profit increased $12 million -over-year, driven by increased rental revenue and lower expenses, as more preview nights were used for marketing purposes. Financing profit declined 4%, driven by higher interest expense, partially offset by higher financing revenue, while resort management profit increased 8%. As a result, adjusted EBITDA on our vacation ownership segment declined 7% -over-year, driven primarily by lower development profit, while margins remained strong at 29% in the quarter. Moving to our exchange and third-party management business, adjusted EBITDA declined $5 million compared to the prior year, with lower average revenue per member and exchange volume being partially offset by higher getaways at interval, while profit at Aqua Aspen declined -over-year due to softness in Hawaii. As a result, total company adjusted EBITDA declined 8%. Moving to the balance sheet, we returned $78 million to shareholders during the first quarter, repurchasing $24 million of common stock and paying $54 million in dividends. And with the shares we've repurchased over the last 12 months, diluted shares outstanding declined 5% -over-year. Given the seasonality of our cash flows, we ended the quarter with net debt to adjusted EBITDA of 3.9 times and $855 million in liquidity. At the beginning of April, we refinanced our term loan, which is our only near-term maturity, extending it out to 2031. As a result, our next maturity isn't until Q1 2026. We also have nearly $1 billion of inventory on the balance sheet, including inventory and PP&E, enough to support more than two years of future sales. We also completed our first securitization of the year, raising $430 million at a blended interest rate of 5.5%, which is approximately 100 basis points below our last ABS deal. Moving to guidance, our full year adjusted EBITDA guidance remains unchanged at $760 million to $800 million. We still expect contract sales to grow -9% this year, with our strongest sales growth coming in the second half of the year as we lap the Maui wildfires, and for development margin to be down a few points, including in the second quarter. Financing profit will continue to be a headwind to growth this year due to higher securitized debt costs, and while we do expect rates to be a headwind again next year, financing profits should increase. Our rental business had a good first quarter, and we're working hard to drive incremental demand and manage our costs. And management profits should show fairly consistent -over-year growth over the balance of the year. In our exchange and third-party management business, we expect interval members to be down slightly, and for average revenue per member to increase. Finally, we still expect G&A expense to be slightly, up slightly, -over-year. Moving to cash flow, we expect our adjusted free cash flow to be in the -$450 million range this year. Our plan is to deploy our free cash to repay some of our corporate debt, as well as return cash to shareholders through dividends and buybacks, while targeting to get our leverage back to three times by the year. We're happy to answer your questions. Operator?
spk02: Operator Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Ben Chakin with Mizuho Securities. Please proceed with your question.
spk06: Ben Chakin Hey, good morning. Thanks for taking my question. Would I like to dig into the strength in rentals? It sounds like from the prepared remarks, there was more preview nights. Is that pretty lumpy through the year, or do you expect to stay elevated for the rest of the year? And then I guess related to the higher preview nights play a role in the higher VOI sales and marketing? If not, we'll drive that up. Thanks.
spk10: Ben
spk06: Chakin Sure.
spk10: Hey, Ben. Yeah, I think as you look at rentals for the year and what happened in the first quarter, you had a couple things. You mentioned the preview nights. And given all the packages we have and what we're seeing on the books, we do expect those to continue to be much higher than the previews that we've done last year. So that obviously helps from a tour perspective on the sales side. And with that, as you also mentioned, it's a bit of geography on the P&O. There was about $6 million of higher cost, right? We use rental inventory to supply those, and that cost gets charged over to marketing and sales. So it was a headwind on the development margin, but a benefit to about $6 million on the rental side of the business. The other area that outperformed a little bit in the first quarter over last year were our uses of plus points. So those are the single use points we give out as incentives. They were up in terms of the timing of those usage, and so that also benefited the first quarter year over year. So as we set up for the balance of the year, we feel better about rentals and where we're heading. The other thing I should mention too on the rental side, our red pack was up about 3%. So the actual rentals, we are mostly through occupancy. The rate was relatively flat, but we're able to do a lot of our marketing campaigns to continue to get those rentals on the books. We talked about overall occupancies being up a couple points as we go into the summer months. So people want to get on vacation, and we're seeing that in our rental results. Gotcha. And then just a quick follow
spk06: up. In Maui, it sounds like demand is coming back. I think your baseline expectation is limited year over year growth. In Maui, you mentioned 5 million of contract sales or so. Is the major headwind still on the sales side, meaning the personnel side? And then if so, what's being done to alleviate that? How do you think about the business going forward? Thanks. Sure.
spk10: Yeah, in Maui, it's a couple things. One, resort occupancies in the first quarter, we're in the low 90s. So not back. Typically in Maui, we're running 97% type occupancies. So occupancies are coming back. So that's obviously a bit of a headwind just in terms of in-house tour flow. But we expect to hopefully see that continue to come back over the balance of the year and get back to more pre-fire levels. And then it is on the sales and marketing talent. We've made good progress in terms of replacing some of the talent we lost. We're not completely back to fully staffed yet. The trade off a little bit is you're bringing in potentially new talent versus losing experienced talent. So there is a bit of a ramp up time getting those salespeople up to kind of that normal production. But the setup right now is pretty good. We expect it to continue to get better as we go through the year. And as you mentioned, and I talked about in my remarks, we should be up year over year. And obviously we got easier comps in the second half of the year in Maui with the impact of the wildfires last year.
spk06: Understood. Thank you. Nice quarter. Thanks, Ben.
spk02: Thank you. Our next question comes from the line of Patrick Schultz with Truer Securities. Please proceed with your question.
spk05: Hi. Good morning. Good morning, Patrick. I want to follow up on what I thought was a bit of a cryptic comment in the prepared remarks. This concern, the loan loss provision, you talked about needing to see performance improve. I assume that means if it does, am I correct to interpret that, if it doesn't improve, you would have to take another charge. Maybe you can flush out, talk a little bit more about that. Sure. Yeah.
spk10: I'll give you some comments and then Jason can add too. When we took the reserve last year in the third quarter, obviously we were seeing higher delinquencies, higher defaults. And we took an estimate as to how those would kind of play out. But we said at the time, the expectation would be over the next three, four quarters, we'd start to see the improvement, some of the timing and what we thought was the impact of the defaults really coming from some of the higher CPI inflation, things like that, that were impacting some of the customers. The good news in the first quarter was, well, delinquencies were higher than they were last year. Over the course of the quarter, we saw those delinquencies improve sequentially. And even through April here, we saw some more improvements. So the trends are still good, but yeah, if our delinquencies, I guess Patrick to answer your point, if your delinquencies never came down from what we were experiencing, yeah, that would potentially be more loan loss reserves we'd have to take. We feel good about where we're at in the trajectory, but we still need to see some more improvement here over the next quarter or two to get back to more normalized delinquency trends.
spk05: Okay. Thank you. And then some follow-up questions on Malley. Starting in August, you'd be laughing in the horrible fires of last year. John, in your view, do you think that sets you up for proverbial easy -over-year comparison, or do you think Malley is still going to be struggling where you wouldn't necessarily refer to it as an easy -over-year comparison beginning in August?
spk10: Well, simply, yes, it'll be an easier -over-year comparison because for a period of time, obviously we're shut down. We're running 90-plus percent occupancies, as I mentioned right now. We're back. We've got most of our sales force replaced, hopefully, as we get to August, right? A lot of those newer salespeople be hitting more normalized production levels for salespeople. And so, yeah, on an absolute basis, we should do much better August forward than we did last year, just given the trajectory of where we're at right now.
spk05: Okay, that does make sense. And then just a last question on Malley. John, you probably saw there was some news about some increased regulations around Airbnb. Can I get your initial take on that? Could that really be a needle mover for you folks? Certainly, regulations in New York City have really helped the hotel industry, but is this a non-event or could this be a potential needle mover for legacy properties like yourselves?
spk10: Yeah, I think what you're referring to is the governor signed some legislation that kind of gives, I think, the power to the mayors of each island to potentially, and this is where we don't really know yet exactly what the outcome could be or how it might impact us positively or negatively, but have greater decision making around short-term rentals. So we're obviously watching it. We'll, one, make sure we understand exactly what's in the legislation, how it could potentially impact us, but part of it will be actually what actually the mayors decide to do, right? So kind of early days at this point, I don't necessarily see anything. Hopefully that will impact us in the near term, but we're going to keep an eye on it.
spk05: Okay, thank you. I'm all set in a moment. Great.
spk02: Thank you. Our next question comes from the line of Chris Warranka with Deutsche Bank. Please proceed with your question.
spk09: Hey, good morning, guys. Hey, John. So you mentioned the new development you're going to be doing in Thailand. I think you said it's part of a JW complex that already exists, and so I'm curious, looking forward, are you seeing more opportunities to do things on sites of existing hotels, whether domestic or international, because I think we're starting to see transactional activity pick up a little bit in the state, so I'm curious whether that's going to be an opportunity going forward.
spk10: Yeah, great question, Chris. The short answer is yes in both locations. We've always had more opportunity just given resort development, I'd say, in Asia Pacific, right? More opportunities, more resorts still getting done over there, brand new construction, but we've got some opportunities we're looking at here currently in the U.S. as well, so I would expect us to potentially do some more of those deals here in both locations as we go forward, but yeah, the development is coming back. It's just a little bit location by location, and yeah, as you know, the co-located ones actually work well where we can leverage in-house across the co-located hotel. At the same time, we've got our units and leverage the amenities in the facility, so it'll be a little bit facts and circumstances, but there are some good opportunities out there right now.
spk09: Okay, good to hear. Thanks, John. The follow-up is on kind of a loan portfolio, but in a different direction, which I'm curious what you're seeing on current day originations. Is the propensity of finance or down payment or any of that on new loans changing at all without effect, or how you think about that going forward?
spk07: Yeah, Chris, this is Jason. We haven't seen too much, too many changes in sort of day one behavior. Propensity was down a little bit in the quarter, a couple points, but Q1 is always seasonally our lowest propensity quarter, just given the mix of buyers, or 70% first-time buyers, sorry, 70% existing owners in Q1 this quarter, so that sometimes just goes with that mix as well, but nothing else really different.
spk09: Okay, very good. Thanks, guys. Thanks, Chris.
spk02: Thank you. Our next question comes from the line of David Katz with Jeffries. Please proceed with your question.
spk08: Hi, good morning, everyone. Morning, David. Thanks for, morning. Thanks for taking all the, for all the commentary and taking my question. John, you made what seemed like maybe a passing comment about, you know, pricing and consumers behavior toward pricing. Could you just go back to that and elaborate a bit more on sort of how that's showing up or, you know, what the sort of basis is, you know, for that, you know, hearing bits and pieces of it, you know, through earnings season in different ways and wanted to make sure we get yours right?
spk10: Yeah, sure. Yeah, as you saw, even adjusted for Maui, our VPGs were down slightly in the first quarter, and I would argue, you know, if you go back to last year, we had a strong first quarter. So it was a tough comp as we went through last year. We did see a little bit more normalization for lack of a better description of VPGs and then things, you know, for the most part, as we got through the third and fourth quarter, kind of stabilized, right? And so that's where we see it, you know, at the end of the day, David, is a little bit in the VPGs. I would say, you know, the broader macro, while the overall economy still, you know, headlines are pretty good, as we've talked about, no different than we've seen on the loan portfolio, right? Higher costs, you know, I think at some level when you see it in other businesses, right? There's some stress on the consumer. I think the good news, as I also said in my prepared remarks, is people seem, you know, in terms of their wallet spend, they're prioritizing experiences and vacations, right? That's what we're seeing are on the books or up as, you know, and they were strong last year, right, going into the summer and they're up a bit, right? People are getting on vacation. People are spending. And so that's a positive dynamic for us, the business we're in and where people want to spend their money. And that is, as we've always talked about a bit of the kind of the post-COVID, right? People have kind of shifted to how they want to spend their disposable income and get on vacation. So that's a good tailwind for us.
spk08: Understood. And one more, and if we're, you know, triple clicking on this, apologies, but the depreciation change that's embedded in the guidance, could we just be clear about, right, it's sort of changing the EPS guide but not the EBITDA? And I just wanted to make sure we totally understand that.
spk10: Sure, David. At a high level, we changed some estimates versus our guidance in terms of the timing of depreciation just when some newer assets were, you know, going online, estimated useful lives of assets. So it's not a cash flow impact by any means. It's just the timing of some of the depreciation versus what we estimated, you know, at the beginning of the year from a guidance, just fine-tuning that a bit.
spk08: Okay, fair enough. Thank you.
spk10: All right, thanks, David.
spk02: Thank you. Our next question comes from the line of Sean Kelly with Bank of America. Please proceed with your question.
spk04: Hi, good morning everyone. Good morning, Sean. Good morning, John. Thanks for taking my question. I just want to go back to the loan loss commentary for a minute, or the provision commentary. I'm just kind of trying to follow the, you know, more just the expectation that you guys have embedded here. So, you know, obviously there was a, you know, there was an increase last year, and I think the way you packaged it in the answer to the former question was that the expectation was that would normalize a little bit after we kind of got through some issues last year with the consumer. But as we just kind of look at it on a percentage base, it looks like it's actually continuing to increase sequentially. So my question is sort of what level of normalization were you kind of embedding or are you embedding today? And, you know, if we were to stay at the current run rate and just sort of current behavior, you know, what would that imply or how big of an impact would that have?
spk07: Yeah, Sean. So to your first question, when we looked forward as of 2-3 last year and looked at the environment that we were in, we knew it was going to take some time for those delinquencies and then ultimately the defaults to kind of run through the system. So we're seeing that today, and it's continuing as we thought. So I think when we provided the guidance here in February, we indicated that the loan loss was going to be higher year over year in Q1, and that's what we're seeing. So really as we look forward in terms of estimating any kind of future delinquencies and defaults, it's hard to give you an estimate as to what the impact could be. As John mentioned, as I mentioned on the call too, we do need those delinquencies to improve here, and that's what we've been seeing over kind of the end of the first quarter and here into April.
spk10: So Sean, the other thing I'd add there I think in terms of a more normalized run rate, we did talk about because the way the models work on the defaults, right, if you have higher defaults, that goes into your static pools and therefore you're using that to predict the future. So we talked about our run rate loan loss for this year and going forward could be 100, 150 basis points higher, right, in terms of higher, more normalized loan loss. So that does get kind of embedded into the future in terms of new loans. So that's embedded in our overall development margin and what we've talked about is that we are going to need to continue to provide for new loans at a slightly higher rate than we've done historically because of the higher defaults we've experienced.
spk04: So John, just to recite that back to you then, sort of 100, 150 basis points off of let's call it a normalized level would be what's kind of embedded in the outlook as you see it today. We're obviously a little bit above that percentage. I think if we look at it year on year, it's like closer to 200 basis points. Is that, am I kind of in the ballpark of how to think about it?
spk07: Yeah, that's right. And remember the first quarter of last year was before we started seeing some of this increased delinquency activity. So Q1 last year was lower than the rest of the year. So that's why the first quarter looked year over year worse than kind of the guidance for the full year.
spk04: Yeah, okay. I followed that, Jason. Thank you. And then my follow up would be just sort of the puts and takes between development and rental margins as you outlined it. So if I caught it correctly, I thought coming into the year that with rental, the issue was going to be that you were going to have higher HOA fees and then that was going to be a bit of a headwind on the cost side because you were having to pay to support some of that inventory that you hadn't sold yet. So perhaps I misunderstood that. But where does that kind of net out today? Because obviously you're able to utilize some of this rental pool and move some of those dollars between. But on an aggregate basis for the year, including Q1 now, how do you think about that rental profit? And then I think development, you just said a couple hundred basis points for the year below last year. Is that kind of the right ballpark for those two line items? Thanks.
spk10: Sure. Yeah. On the development margin side, for the full year, we expect the development margin. And we talked about this in our original kind of guidance for the year to be down a couple hundred basis points year over year. You know, some of that is, you know, the higher loan loss reserves, right? That's a deduct from revenue and impacts your margin. And some higher marketing and sales costs. Yes, on the preview packages, as we do more preview packages and allocate the rental income, you are charging because of the higher unsold maintenance fees and costs of that inventory, you are charging over to marketing and sales a slightly higher cost. But there's also a lot more keys getting into that. And that's something that's getting used in the previews. So that was the six million or so I mentioned earlier, which is just a bit of geography, right? That's improving the rental profits. It's an impact on your development margin a little bit. Yeah, for the full year for rentals, we're feeling better just given as, you know, as the year is shaping up, as I talked about, our occupancy was up, you know, call it about two and a half, three percent year over year. And last year was a good first quarter. So teams doing a great job getting rentals there. And, you know, as we've also talked about, when you think about the cost of our rentals overall, you know, about 85% is a bit fixed coming into the year. So for us to really drive better profitability, and that's what we did in the first quarter, we got occupancies up, right? We were able to keep the average rate fairly flat year over year. So our setup for the year is looking better, you know, still a bit early days, but we're hopeful that, you know, maybe rentals could be where we're at last year or maybe a little bit better. So we'll see how the year goes. But we got off to a good start here in the first quarter. Thanks
spk04: so much.
spk10: Thank you.
spk02: Thank you. Our next question comes in line of Ryan Lambert with JP Morgan. Please proceed with your question.
spk03: Hey, good morning. Thanks for taking my question and congrats on some of the progress you're seeing with demand at your new Waikiki property. In terms of some of the puts and takes with guidance changes, it looked like, at least to me, and correct me if I'm wrong, a little bit more spend this year on inventory. I'm wondering if that's just a function of timing or if you're seeing anything on the development side with higher input costs.
spk07: Yeah, Ryan, this is Jason. What you're really seeing there is the add back from net income or adjusted EBITDA. So it's really, we had a little bit lower product costs and we think that's going to continue versus our initial expectations. So it's not necessarily on the spending side. It's really on the add back and really impacted by a little bit lower product costs than we had originally anticipated.
spk03: Okay, great. And following up on some of the rental comments, it sounds a lot more positive for this year. When you look into next year with some additional inventory, are your expectations for 2025 incrementally better or would that just be kind of a continuation of the trends you're seeing in 2024?
spk10: Yeah, it's a great question. It's a little early for 2025, I guess, in terms of working through all that. But given Waikiki coming online, that, to your point, I think, will give us additional keys, right? Some of those will obviously be used by owners and all that, but that'll create other rental availability at other properties depending on where people stay. So I think we'll know more as we get through the year. Like every year, the way to go rentals is driving your rep pack every year and also big focus this year on keeping maintenance fee increases back to more historical levels, which will help on the cost of that inventory given our unsold maintenance fees we have. So, but yeah, if we're able to continue to drive some rate and occupancy as we go into 2025 on potentially some more keys, if you will, with some of the new inventory coming online, that should bode well.
spk03: Great. Thank you. Thank you.
spk02: Thank you. Our next question comes from the line of Patrick Scholes with Truer Securities. Please proceed with your question.
spk05: Hi. Good morning again. Yeah, you're breaking up
spk10: a little bit. Go ahead, Patrick.
spk05: Okay. Can you hear me okay? You can. Yeah. Yeah, great. So I'm just trying to follow up a little bit on the Bound Sales Program. You know, had been an issue last summer. You know, can you, I guess, safely say sort of those hiccups have been put to rest here and, you know, how has the I believe the challenges were with the legacy Weston customer? You know, how is that going with that customer at this point? Thank you.
spk10: Yeah, sure. Yeah, as we talked about on the last call, yeah, you know, the transitions are behind us, right? You know, the impact we saw, you know, in more in the second quarter, because if we recall third quarter last year, we actually saw VPGs improved significantly off of what we kind of saw at the transition site in the second quarter. Yeah, it was really around just the marketing sales teams selling the product, getting up to speed better and getting confidence in selling the new product. It was a different sell, selling the system and all the abound exchange opportunities. But we also talked about and we talked about the fact that more people in the legacy Vistana systems, your Weston and Sheraton, are now enrolled in a bound. They're using the product, right? There's that getting familiarity with the benefits of the program and actually using it. So those two things continue to go well. And, you know, we've seen we've seen those VPGs, you know, over the balance of last year really kind of come back to where we were before we launched about. So I behind us, like we said last call, I don't expect any impact going forward.
spk05: OK, good. And then just the last follow up question here on last year you had announced two new Weston Club projects, Charleston and Savannah. Do you have opening dates? Is that next year or the following? And then related to that, are those going to be part of the bound trust? Do those go into the trust system or will they be separate? Thank you. Those
spk10: will go into the trust into the, you know, now Marriott Vacation Club Trust, right? As we've talked about feeding all kind of new U.S. inventory into that trust. So both of those will will create points in the trust. You know, from an opening date perspective, I think we've got Charleston in twenty six and and then Savannah's twenty seven.
spk05: OK, and did I hear correctly previously the Waikiki new Marriott Vacation Club Resort, is that still scheduled to open in the back half of this year and the sale center, correct?
spk10: I was just out there visiting our teams in Hawaii. I got to see and tour the new Waikiki property. It's coming along great. And it'll open up. We started taking reservations already beginning in October, so we're on track there.
spk05: Great. I think that's it for me. Thank you.
spk10: Thanks, Patrick.
spk02: Thank you. Our next question is a follow up from the line of Ben Chagin with Mizzouho Securities. Please proceed with your question.
spk06: Hey, thanks for taking this all. Thank you. I think you said in the prepared remarks, the management business profit should be constant through the year. If I heard you correctly, just to kind of like double click on that. Are you referring to the management profit within VO that was plus eight or are you referring to kind of like the consolidated P&L management and exchange profit that was plus two? Just to clarify.
spk07: Yeah, that was probably a comment on the vacation ownership management business.
spk06: The plus eight management business within VO, correct?
spk07: Yes.
spk06: Great. And then we'd love to dig back into Maui, I guess. Going back to kind of one of the previous answers, what do you think closes the gap between the 90% and 97% occupancy? The 90% that you're experiencing today and the 97% you've had historically and then kind of part two on the sales personnel side, not to belabor the point, but do you have all the bodies in place? Is this just a function of learning and ramping or are you still trying to hire an onboard? Just want to kind of like learn more about that process. Thanks.
spk07: Yeah, Ben, just on the occupancy, we were running, call it 93, 94% in Maui. So just a couple points off. I think what closes the gap is just people continuing to go to Maui talking about how great it is and things like that. You know, John was just there and the devastation is still quite real around the properties and that's going to take several years to come back. So we do think it comes back, but how fast it gets back from 93 to 94 to 97, time will tell. And then your second question was about the sales exit. Can you repeat the second part?
spk06: Yeah, I was saying on the sales personnel side, it sounds like there's still a ramp. And my question was, do you have everyone in place? Do you have all the hires that you want and now they're just learning and ramping or are you still trying to source sales personnel? Yeah,
spk10: for the little tour flow that we have because we're still down a little bit, yes, we've got the teams in place. We need to get a little bit more on the sales side as occupancies continue to ramp and tours continue to ramp. So we're in a good spot relative to handling the demand for tours right now, but we still aren't back to kind of 100%, if you will. So we'll continue to manage through that as occupancy and tours come back. Got it. Thank you. Appreciate it. Thank you.
spk02: Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Geller for any final comments.
spk10: Thank you everyone for joining our call today. As I hope you can tell, we feel very good about the way the year started. We ran 90% occupancy in the quarter, contract sales grew 3% excluding Maui, and first time buyer tours grew by 9%. And with a pipeline of 270,000 packages, international inbound travelers returning to the US, and reservations on the books for the summer months up a few points, we feel good about the balance of the year. On behalf of all of our associates, owners, members, and customers around the world, I want to thank you for your continued interest in our company and hope to see you on vacation soon. Thank you.
spk02: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
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