Skift Take
Timeshares are basically a real estate product wrapped in a financial product wrapped in a vacation. And Travel + Leisure Co. CEO believes the model has several distinctive advantages over other travel businesses.
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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.
1. Courting Financially Resilient CustomersOn 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.
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