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Speaker 1: Bloomberg Audio Studios, podcasts, radio news Well, shares of Travel

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Speaker 1: and Leisure reached an inter day record, rising fifteen percent.

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Speaker 1: That was back on October twenty second. This was the

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Speaker 1: day the company lifted the low end of its adjusted

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Speaker 1: EBITDA forecast for the full year. Shares the four point

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Speaker 1: one billion dollar market cap company are up around twenty

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Speaker 1: nine percent so far this year.

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Speaker 2: Yeah, that's quite a run. We want to bring in

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Speaker 2: our next guest, Mike Brown, President and CEO of the company,

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Speaker 2: which has close to twenty resort, travel, club and lifestyle

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Speaker 2: brands including Margaritaville, Vacation Club, Club Windham and more. He

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Speaker 2: does us from I believe a Chili Orlando on this Tuesday.

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Speaker 2: It's a little chili up here as well.

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Speaker 3: Mike.

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Speaker 2: Great to have you back with us. You operate in

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Speaker 2: a specific segment time share, So talk a little bit

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Speaker 2: more about who exactly is your customer.

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Speaker 4: Remind our audience, Well, ultimately we're one hundred percent leisure

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Speaker 4: travel company and our demographic is around one hundred and

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Speaker 4: ten thousand dollars of average income, average FICO over seven

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Speaker 4: hundred and thirty average FICO score, age group upper forties,

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Speaker 4: low fifties, and really what when you start to think

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Speaker 4: about who likes to travel with us, no matter the brand,

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Speaker 4: they want bigger accommodations, they want consistency of brands, and

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Speaker 4: they want good value for their money. And that's really

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Speaker 4: the space that we operate in. And if you think

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Speaker 4: about these last five years, where inflation is running high

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Speaker 4: and you've already locked in your vacation dollars, the value

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Speaker 4: component has been really strong.

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Speaker 3: It has propelled our growth here in the last five years.

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Speaker 1: How much of your business is sales of new memberships

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Speaker 1: versus people actually just using what they bought maybe years.

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Speaker 4: Ago, right, It's actually one of the best endorsements of

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Speaker 4: people's love of the product is that every year about

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Speaker 4: sixty five percent of our income mental purchases are from

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Speaker 4: people who already own with us and want either more

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Speaker 4: space or more vacation time. The rest are from our

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Speaker 4: new owner base who are dipping their toe in the

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Speaker 4: water and seeing what this.

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Speaker 3: Type of vacation travel is all about.

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Speaker 4: So not only are we getting two thirds of our

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Speaker 4: sale roughly from people who already own with us, what

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Speaker 4: we also see is the people who've paid for their

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Speaker 4: ownership already. There's a ninety eight percent retention rate, so

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Speaker 4: two massive validations that once people own they really love

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Speaker 4: the product and keep buying more.

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Speaker 1: So, you know, time shares they get a bad rap.

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Speaker 1: I mean they have a bad rap. I mean, if

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Speaker 1: you like, just Google, get out of timeshare. There are

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Speaker 1: legal companies that specialize in getting you out of time shares.

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Speaker 1: Is yeah, I mean you know this. You know the industry.

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Speaker 1: Is your product different than what people know as time shares?

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Speaker 1: And why that?

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Speaker 3: Yeah?

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Speaker 4: Wrap, Look, it's interesting because I can even feel the

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Speaker 4: a little bit uncomfortableness of asking the question because it

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Speaker 4: has a history that predates the Great Financial Crisis. But

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Speaker 4: I think the untold story here and why I love

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Speaker 4: coming on shows like yours, beyond it being a great show,

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Speaker 4: is that the industry has dramatically changed. Eighty five percent

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Speaker 4: of the sales today are by companies that you might

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Speaker 4: book your business day, whether it's Merritt, Hilton, Wyndham, Margueriteville,

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Speaker 4: Holiday and Disney. All of these are the brands that

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Speaker 4: have come to the forefront in the last ten years.

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Speaker 4: And the value proposition, the way of vacationing with a

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Speaker 4: brand you trust, is not the reputation that it gained

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Speaker 4: great financial crisis where it was independent real estate developers,

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Speaker 4: And I would just encourage everyone to do your own

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Speaker 4: research about these type of advertisements. There's a lot of

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Speaker 4: press out there that's shown some really negative stories about them.

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Speaker 4: That's for your people to do that our own research.

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Speaker 4: But what I will tell you is that our retention rate,

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Speaker 4: as I mentioned, ninety eight percent, two thirds buy more.

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Speaker 4: And this is now a massively branded industry that it

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Speaker 4: wasn't when it gained that reputation you're referring to.

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Speaker 2: So what's like the trickiest component of your business? Is

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Speaker 2: it properties? Management, labor? I'm just curious.

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Speaker 3: Yeah, it's a complicated business.

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Speaker 4: We run a sales and marketing business, we run a

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Speaker 4: management business. We operate the club so that we can

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Speaker 4: get people from one of our two hundred and eighty

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Speaker 4: resorts to another, and we access the ABS market three

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Speaker 4: times a year to.

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Speaker 3: Sell our notes and gain cash flow. I think it's.

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Speaker 4: The management of all of that together. When you look

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Speaker 4: at our company's performance, the satisfaction of our customer base,

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Speaker 4: and the growth of our brands. We've been highly successful

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Speaker 4: and shown growth and showed a way to grow, and

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Speaker 4: it's shown through in our equity, But it's the experienced

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Speaker 4: leadership to combine several very complicated businesses together to make

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Speaker 4: sure that it's seamless for the consumer and that we're

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Speaker 4: also ultimately fulfilling our mission, which is getting people on

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Speaker 4: great vacations. So I would say it's the complexity of

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Speaker 4: the management as opposed to an individual component that's really

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Speaker 4: hard to operate. I would just add that one component

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Speaker 4: that has become more complex is the development of real

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Speaker 4: estate has become a lot more expensive ground up, so

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Speaker 4: we've moved to a conversion strategy and a lot of

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Speaker 4: our new resorts.

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Speaker 1: So I want to talk a little bit more about

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Speaker 1: the demographics here of your clientele, and certainly, you know

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Speaker 1: with twenty different brands, it depends on what actual brand

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Speaker 1: we're talking about. You did give us some age demographics

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Speaker 1: and where people are generationally, but in terms of space

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Speaker 1: and what are they spending, what do you know about

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Speaker 1: where you know in terms of their other demographics like

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Speaker 1: household net worth and what part of the economy you're

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Speaker 1: able to get.

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Speaker 4: Right, Well, what we find in our product is the

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Speaker 4: vast majority, irrespective of the brands, are going to want

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Speaker 4: to be in a situation where they want to know

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Speaker 4: what they can expect from their vacation, and a Margaritaville

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Speaker 4: guest is going to want a sand, a drink in

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Speaker 4: your hand, that type of lifestyle.

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Speaker 3: Whereas our newest.

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Speaker 4: Brand, Eddie Bauer, these are people that want to hike

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Speaker 4: in Zion National Parker or get to the great outdoors

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Speaker 4: and enjoy a family reunion.

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Speaker 3: Either way.

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Speaker 4: Our financial demographics or what I explained earlier, but what

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Speaker 4: we see as the travel trend is people want experiences

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Speaker 4: that match their personal lifestyle as opposed to four walls,

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Speaker 4: and then they have to go find their experience outside

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Speaker 4: of the resort. So that's why we're launching Sports Illustrated

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Speaker 4: brand and Eddie Bauer. We have Margaritaville Club Wyndham. You mentioned.

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Speaker 4: We see an opportunity to customize your experience inside the

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Speaker 4: resort and outside as opposed to over separating the financial demographics.

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Speaker 4: I will say one of our big focus is to

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Speaker 4: pull the average age down as we launch new brands

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Speaker 4: over the upcoming years.

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Speaker 2: You know, it's interesting, like I do think about like

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Speaker 2: how consumers relate to a specific brand. I mean that

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Speaker 2: really moves the needle, doesn't it whether it's Sports illustrated.

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Speaker 2: I'm just curious, and how do you guys think about

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Speaker 2: what brands you want to affiliate yourselves with?

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Speaker 4: Right? If you know, I have two children that are

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Speaker 4: children young men that are at a university.

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Speaker 2: Always were always to us, Right, are there always kids?

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Speaker 4: Yeah?

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Speaker 3: They really are, They really are.

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Speaker 4: But I'll tell you if I were to go go

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Speaker 4: up to ann Arbor and I have the option to

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Speaker 4: stay in an unbranded hotel with four walls or something

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Speaker 4: that affiliates itself closer to the university, there's a natural

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Speaker 4: pull to it. And I can apply that if you're

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Speaker 4: going to go to a beach destination and you have

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Speaker 4: a chance, and if you're a parent head and you

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Speaker 4: want to be in that Margaritaville environment versus a resort.

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Speaker 4: That's a brand that has thousands of resorts everywhere from

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Speaker 4: the highways to the resort destinations. You're going to go

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Speaker 4: to the Margaritaville location. And our club Windom has a

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Speaker 4: similar type of affiliation. So we just find that people

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Speaker 4: are moving more and more to the lifestyle that attracts them,

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Speaker 4: and we are therefore developing brands that allow them to

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Speaker 4: just do that naturally. To enjoy their lifestyle inside of

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Speaker 4: the resort and outside, and it's it's already been received

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Speaker 4: with a lot of great reception and we're excited about

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Speaker 4: what we can do going forward.

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Speaker 1: What's the brand? You have so many different brands. You

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Speaker 1: mentioned Margaritaville, we talked about wind, Eddie Bauers. What are

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Speaker 1: you missing?

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Speaker 3: I think there's a few things that we have to consider.

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Speaker 4: We don't have anything in the luxury space today, what

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Speaker 4: I would say pure luxury. There's a lot of opportunities

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Speaker 4: to tie our type of product.

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Speaker 3: To the crew to crewise type of companies.

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Speaker 4: And then, as is always the case, someone you know

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Speaker 4: five years ago would have said, well, Eddie Bauer is

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Speaker 4: not a hospitality name, but you immediately put that to

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Speaker 4: an outdoor, outdoor living lifestyle. And I think our challenge

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Speaker 4: is there's the typical hospitality verticals, which would include luxury,

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Speaker 4: but there's also just niche, niche lifestyle opportunities that we

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Speaker 4: will look for. But you know, if I could just

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Speaker 4: step back a second, the key to our success is

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Speaker 4: whatever we do, we execute against it and we deliver

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Speaker 4: on what we promise the street, and that success allows

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Speaker 4: us more and more access to more and more brand,

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Speaker 4: So I would expect that to allow us to move

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Speaker 4: into these spaces that we currently aren't in.

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Speaker 2: Well, I'd love to be sitting at Margaritaville Vacation, a

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Speaker 2: Margarita vacation club with the Margarita in my hand. But

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Speaker 2: having said that, before we go, Mike, any signs of stress,

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Speaker 2: any signs of you know, economic you know, concerns as

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Speaker 2: you look at your business, or maybe what it tells

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Speaker 2: you about the outlook here.

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Speaker 4: Well, I would say my personal sentiment and what I'm

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Speaker 4: seeing in our business is very similar to it was

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Speaker 4: thirty days ago, which was they're still uncertainty out there,

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Speaker 4: which causes us to be looking intently every day with

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Speaker 4: any metric internally that would that would signal the economies

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Speaker 4: going one way or the other. Thirty days on from

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Speaker 4: our earnings call, I would say that our performance and

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Speaker 4: our outlook on the economy looks very similar than it

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Speaker 4: did at the end of October when we reported our

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Speaker 4: leisure travel demand and is looking good for Q four.

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Speaker 4: With the sound that the shutdown is coming to an end,

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Speaker 4: I was starting to worry that we might start to

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Speaker 4: see changes in behavior between air and drive to traffic.

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Speaker 1: Are you seeing that at all, just very briefly, we have.

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Speaker 4: Not, And in fact, it looks like our twenty five

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Speaker 4: bookings here in Q four are at or slightly above

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Speaker 4: where they were last year. And we haven't seen a

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Speaker 4: dramatic change. We've seen ever so slightly that changed from

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Speaker 4: fly to drive to but I'm really confident that it

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Speaker 4: hadn't gone on another week or two into the Thanksgiving season,

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Speaker 4: we would have saw a noticeable shift of people in

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Speaker 4: New York saying, look, let me just get to a

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Speaker 4: drive to destination as opposed to flying to Orlando. I

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Speaker 4: don't want to deal with the hassle with my free time. Fortunately,

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Speaker 4: it looks as if we will avoid that. But at

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Speaker 4: this point we have not seen an indication that that

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Speaker 4: has caused changing leisure travel.

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Speaker 2: Mike Brown, President and CEO of Travel and Leisure Company,

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Speaker 2: joining us from Orlando