Here’s Why Investors Should Retain Marriott Vacations (VAC) Now

Marriott Vacations Worldwide Corporation VAC is likely to benefit from solid contract sales, digital initiatives and vacation ownership business. This and its focus on owner benefit and exchange program bode well. However, increased expenses are a concern.

Let’s discuss the factors that highlight why investors should retain the stock for the time being.

Factors Driving Growth

Marriott Vacations continues to witness robust recovery during first-quarter 2023. While occupancies and tours are witnessing growth in the first quarter, VPGs remain well above 2019 levels. The company reported benefits from its development and rental businesses. VAC reported contract sales of $434 million in the first quarter of 2023, up 10% from $394 million reported in the prior-year quarter. Given the rise in tours and strength in vacation ownership products, VAC anticipates contract sales to grow in the range of 5-9% (year over year) in 2023.

Marriott Vacations emphasizes on increasing the use of digital tools to strengthen its infrastructure, grow online package sales, enable self-service bookings, make real-time offerings to enhance the overall customer experience and drive back-office efficiencies. Management is optimistic about integrating further data analytics into its marketing strategy. Also, it emphasizes on implementing an online booking engine (for previews) and improving predictive modeling (for marketing campaigns) to drive growth.

Marriott Vacations focuses on high vacation ownership business to drive growth. In April 2022, the company rebranded Welk’s points program as the Hyatt Vacation Club Platinum program and allowed the conversion of Welk sales centers to sell Hyatt-branded vacation ownership products. The Platinum program includes expanded vacation benefits and access to a collection of upscale resorts. In 2023, the company intends to rebrand all legacy Welk Resorts into Hyatt Vacation Club. Also, it stated plans to expand its vacation offerings with the launch of the Beyond program.

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