Travel + Leisure Co. Q4 FY2025 earnings call

2025 was an outstanding year with adjusted EBITDA exceeding the Q3 outlook. The company advanced its brand expansion strategy, activated new partnerships, and invested in its digital roadmap. It focused on delivering exceptional vacation experiences and converting owner engagement to recurring demand. The Resort Optimization Initiative was underway, with aged resorts being removed and replaced by higher demand ones, resulting in a net growth of over 30 resorts in the last three years. For 2026, early trends are consistent with expectations, and the company expects revenue growth, EBITDA margin expansion, and robust free cash flow.

The Vacation Ownership business saw 8% gross vacation ownership sales growth in 2025, with VPG up 6% and tour flow growth improving, including 5% in the fourth quarter. Segment EBITDA was $252,000,000 with margin expansion. The Travel and Membership segment delivered $228,000,000 of EBITDA in 2025. In the fourth quarter, Travel and Membership had revenue of $148,000,000 and EBITDA of $47,000,000, down due to exchange headwinds. Overall in 2025, the company had 4% revenue growth and 7% EBITDA growth.

The company expects 2026 EBITDA to be in the range of $1.03 billion to $1.055 billion, reflecting 4% to 7% year-over-year growth. Gross vacation ownership sales are expected to increase 1% to 5% year over year to a range of $2,500,000,000 to $2,600,000,000. Volume per guest is expected to be in the range of $3,175 to $3,275. For the first quarter of 2026, gross VOI sales are expected to be in the range of $520,000,000 to $540,000,000 and EBITDA in the range of $210,000,000 to $220,000,000, with volume per guest in the range of $3,200 to $3,250.

The Resort Optimization Initiative may impact sales and management fees initially, but lower expenses are expected to offset the revenue impact. Exchange headwinds continue to affect the Travel and Membership segment. Loan loss provision could be influenced by factors such as down payments and credit performance, with expectations of it being lower in 2026 than 2025.

Questions from analysts covered topics like resort optimization, consumer behavior, loan loss provision, Sports Illustrated sales, marketing approach, cruise industry interaction, Blue Thread partnership, VPG mix shift, Travel and Membership profitability, sales optimization impact, and older resort outreach. Answers included details on resort closure effects, consumer demand drivers, provision trends, Sports Illustrated sales progress, marketing strategies, cruise interactions, Blue Thread partnership status, VPG mix rationale, Travel and Membership outlook, sales optimization impact, and older resort outreach efforts