Company Overview - Travel + Leisure is the largest vacation ownership and exchange company, headquartered in Orlando, Florida [2] - The company operates under two segments: Vacation Ownership (approximately 75% of the business) and Travel and Membership (approximately 25% of the business) [2][3] Financial Performance - The company generates roughly $4 billion in revenue, with EBITDA close to $1 billion [4] - Revenue grew approximately 4%, EBITDA increased by about 6%, EPS rose by 14%, and free cash flow per share increased by over 20% in the first nine months of the year [4]

Financial Data and Key Metrics Changes - The company generated approximately $4 billion in revenue, with EBITDA of nearly $1 billion, reflecting a revenue growth of about 4% and EBITDA growth of roughly 6% year-to-date [2][3] - Earnings per share (EPS) increased by 14%, and free cash flow per share rose by over 20% [3] - The company raised its guidance for gross vacation ownership interest sales, volume per guest, and Adjusted EBITDA, while modestly increasing the outlook for free cash flow [3] Business Line Data and Key Metrics Changes - The vacation ownership segment constitutes about three-quarters of the company, characterized by predictable revenue and strong cash flows [2] - The travel and membership segment, making up roughly a quarter of the company, has a member base of around 3 million, with high recurring revenue from multi-year contracts [2] - Approximately two-thirds of transactions come from existing owners, indicating strong repeat business [6][9] Market Data and Key Metrics Changes - The consumer base is primarily composed of individuals in their early 50s with an average household income of about $120,000, with 70% of buyers being Gen X, Gen Z, or millennials [6] - There are no significant fluctuations noted in consumer behavior across different geographies [7] Company Strategy and Development Direction - The company aims to focus on upgrading existing owners and attracting new owners, with a long-term target mix of 35% new owners and 65% existing owners [9] - New brands such as Sports Illustrated and Eddie Bauer are being introduced, with expectations for growth in 2026 [12][20] - The company is also looking to improve its consumer finance portfolio and expects a decline in loan loss provisions moving into 2026 [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of the consumer base and the company's ability to drive demand through proactive marketing strategies [3][10] - The company anticipates a lower loan loss provision in 2026 compared to 2025, with improvements in credit quality and collection capabilities [14][17] - Management noted that the travel clubs segment has shown strong growth, contributing positively to overall revenue [32] Other Important Information - The company is currently operating with a leverage ratio of approximately 3.3, with plans to reduce it to around 3.2 by year-end [41] - The optimal inventory level is targeted between two to three years, with current inventory at four to five years due to new brand requirements and inventory recycling initiatives [42][43] Q&A Session Summary Question: How is the consumer sentiment in the travel and leisure sector? - Management indicated that the consumer remains strong, with consistent trends in key performance indicators such as booking windows and arrivals [4] Question: What is the strategy for new owner sales versus existing owner sales? - Management highlighted that existing owner transactions are driving sales, with a focus on upgrades and direct marketing to new owners [9][10] Question: What are the expectations for the loan loss provision in 2026? - Management expects the loan loss provision to be lower in 2026 than in 2025, potentially settling at or below 20% [14][15] Question: How does the company view potential M&A opportunities in the timeshare space? - Management noted that while the universe of potential acquisition targets has narrowed, the focus remains on driving shareholder returns through internal investments and capital allocation [39][40] Question: How does the company differentiate itself from competitors like Airbnb? - Management emphasized the consistent quality and experience offered by Travel + Leisure timeshares compared to the variability often associated with Airbnb [57]