Marriott Vacations Worldwide Corporation

Greetings. Welcome to Marriott Vacations Worldwide's fourth quarter 2024 earnings call. 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, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Neil Goldner, Vice President, Investor Relations. Neil, you may begin.

Thank you, and welcome to the Marriott Vacations Worldwide Fourth Quarter Earnings Conference Call. I am 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 the federal securities laws. These statements are subject to numerous risks and uncertainties, which could cause future results that differ materially from those expressed in or implied by our comments. Forward-looking statements in the press release 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 could find a reconciliation of non-GAAP financial measures in the schedules attached to our press release and on our website. With that, it's now my pleasure to turn the call over to John Geller. Thanks, Neil.

Good morning, everyone, and thank you for joining our fourth quarter earnings call. We had a solid fourth quarter, reflecting our team's hard work and the resilience of our leisure-focused business model, demonstrating that our proactive steps to strengthen performance are working. One notable area of strength in the economy continues to be leisure travel, and the steps we've taken to expand our sales reach and adjust our promotions are enabling us to capitalize on this. I've always believed that people prioritize their vacations, and following the pandemic, this has been even more pronounced. This trend continued in the most recent quarter, where we ran system-wide resort occupancy of 90%, including 95% occupancy in Hawaii, and we remain committed to meeting the needs of our customers as they prioritize spending on vacation to enjoy time with their families and friends. We believe our resorts, with their extensive amenities and spacious accommodations, are the best place to do it and our customers agree with us. Before we get too deep into the fourth quarter results, I'd like to reflect on what we accomplished last year, as well as give you my view for 2025. Our owners and our other customers continue to put a high value on our brands and the experiences we offer. but they also are facing economic pressures. So last year we launched a number of initiatives focused on driving revenue, expanding our sales reach, and adjusting our promotional strategy. We also expanded our use of virtual tours and non-traditional sales channels like road shows and owner cruises. The result was a 7% increase in contract sales in the fourth quarter, with first-time buyer sales growing even faster. It was also great to see Hawaii's sales grow double digits year over year in the quarter. On the development side, during 2024, we opened our new Waikiki Resort and announced plans to build a new Marriott Vacation Club in Thailand, additional units in Bali, and the first Hyatt Vacation Club in Orlando. We also reopened a second Bali sales center in June, which will help us drive outsized tour growth in Asia Pacific in the first half of this year. We rebranded our Pulse locations as our City collection last year. Designed for those who want to use their ownership to explore urban locations, this collection includes our resorts in places like New York, Boston, San Diego, Bangkok, and now Waikiki. And I'm excited to announce that we plan to develop a new 168-unit Marriott Vacation Club in downtown Nashville, including a new on-site sales center. Known as Music City, Nashville will make a great addition to our city collection for owners looking to enrich their vacation experiences. We plan to acquire this new purpose-built project from a developer when it opens in late 2027. In our exchange and third-party management business, Interval welcomed 12 new all-inclusive resorts to our global exchange network last year, bringing our total all-inclusive network to over 150 resorts, offering more ways for members to enjoy their membership. Across the business, we're making great strides in harnessing the power of data and analytics to boost efficiency and growth. We continue to digitize consumer capabilities, allowing owners to transact as they prefer. and we see further opportunities to enhance customer interactions and drive efficiencies through technology. Looking forward, research shows Americans still have a strong desire to travel, with 80% of adults planning to take a vacation this year, while international travelers to the U.S. are expected to increase this year, and travelers from Asia Pacific are leading the way when it comes to international travel. We believe we are in a great position to capitalize on these growth trends. As we discussed last quarter, we believe we have substantial opportunities to boost our growth and enhance operational efficiencies through our business modernization work. As you know, we've made a number of strategic acquisitions over the years to bolster our market position while disposing of a number of smaller non-core businesses to focus on key growth areas. Our primary motivation for pursuing this initiative now is to speed decision-making across your organization, ensure we have the right cost structure for the future, and optimize our IT platforms while providing funds to invest in high potential leisure-focused businesses to accelerate revenue growth. This initiative encompasses all areas of our organization, and we expect some of the largest buckets of savings will come from increased automation, inventory optimization, procurement, and corporate overhead. This initiative also includes substantial opportunities to accelerate revenue growth. For example, in our vacation ownership business, by continuing to refine our tour mix and upgrading our sales center technology, we believe we can drive improvements in VPG. And by leveraging a new state-of-the-art revenue and inventory management platform, we expect to be able to drive increased occupancy and higher ADR. All in, we expect this initiative to generate an additional $150 to $200 million in annualized adjusted EBITDA by the end of 2026, with half coming from cost savings and efficiencies and the other half from accelerating revenue growth. Jason will provide more details on the timing of the savings and the investments needed to achieve them in a minute. We realize the past 18 months haven't been easy, but through it all, we've never stopped obsessing about delivering the experience our owners and others expect of us, which is why our guest satisfaction scores are higher today than they were last year and in 2022. Our overall strategy remains the same, though our tactics certainly have evolved over time. We will continue to deliver operational excellence and meet and exceed our customers' expectations. This is the most important thing we can do as an organization. Our core offerings will continue to evolve and expand through the development of new properties and travel experiences. We will further harness the power of advanced data and analytics to improve efficiency, enhance the customer experience, and increase profitability, and we will look for additional ways to drive growth through the launch of our new leisure-focused businesses. We are planning on hosting an Investor Day in New York later this year, and I hope to see many of you there. With that, I'll turn it over to Jason to discuss our results in more detail.