Travel + Leisure CEO's Plan: New Markets and Sports Tourism

08.11.2024 - 17:27 / skift.com / Sean Oneill

Travel + Leisure Co. is trying to get past its traditional timeshare roots.

Michael D. Brown, president and CEO, told Skift in an interview that his team wants to evolve the group beyond pure vacation ownership toward a broader hospitality platform while also diversifying its geographic exposure.

Here are 5 key themes in the CEO’s strategy.

On the demand side, Brown’s team has been pushing upmarket.

Its customers’ average FICO (credit) scores have risen from 725 to 742 over four years.

The tactic of seeking customers with greater financial wherewithal is already producing benefits, Brown said. Transaction values are holding steady above $3,000 per guest — a 30% increase that he said has proven “sticky.”

But the more upmarket customers also help fortify the company’s consumer finance portfolio. Travel and Leisure Co. finances a little over half of purchases when selling timeshares — creating an attractive loan portfolio. Those loans then get securitized, freeing up capital to sell more timeshares.

Another side benefit is making better use of labor.

“By having each staff member generate more revenue per consumer on average, you can focus more on your higher performing associates,” Brown said. “Your recruiting and training and talent acquisition model completely changes.”

Brown has also been looking at cost-effective ways to reach new customers, such as through strategic partnerships. It recently signed a marketing partnership with Allegiant Air, for example.

Brown wants to boost Travel + Leisure Co.’s geographic diversification.

Orlando and Las Vegas each represent roughly 10% of company revenue. Both cities remain “the two capitals of vacation travel in the world,” Brown said.

Thanks to its integration of Accor Vacation Club earlier this year, the company now gets roughly 8% to 9% of total revenue from the Asia Pacific region.

And the company sees Mexico as an untapped opportunity, with only a few resorts in the country so far.

Many hotel groups and other travel companies have reported surges in demand related to so-called live tourism, such as sports events and music concerts. Travel + Leisure Co. also sees opportunities.

It recently introduced a Sports Illustrated-branded resort initiative, which it believes could eventually generate “about $300 million to $400 million in sales” a year through multiple properties.

Its first location at the University of Alabama suggests a blueprint: combining cultural tie-ins with gathering spaces and fitness amenities to differentiate from traditional timeshare offerings.

Another example: A new Live Nation collaboration offers concert experiences at venues like the Sphere in Las Vegas and concert tickets to its vacation ownership customers and prospects as sales