Marriott Vacations Worldwide’s (VAC) CEO Steve Weisz on Q3 2016
Not able to reopen Hilton Head locations because of Matthew
“But first let me take a moment to address Hurricane Matthew, which has taken a heavy toll on the southeastern coast of the United States. My heart goes out to the victims of this powerful storm, and we are hopeful that its impact will subside as soon as possible for those affected from Miami to the hardest hit Carolinas.
As it pertains to our operations, ensuring the safety of our owners, guests and associates has been our top priority. Fortunately, our results on the — our resorts on the East coast of Florida were reopened over the weekend sustaining minimal damage and have begun their efforts to get back to normal operations.
Further to the north into the Carolinas we have still not been able to reopen our properties in Hilton Head and Myrtle Beach. I am very pleased to say that there are no injuries to report but we have been closed there since the storm and are still ascertaining the extent of any damage. Presumably, there is nothing that can’t be fixed and we can be back to full operations in short order.”
Should reopen by this weekend or next
“The only two sites that are currently impacted by the storm of Matthew are our sales center on Hilton Head and on Myrtle Beach. Our current understanding is that there is a chance that Myrtle Beach will open by this weekend, but more than likely, not because of physical or structural damage but because there are other infrastructure problems on the island. It may be towards the middle to the end of next week before Hilton Head is up and operational again.”
Do have some business interruption insurance
“Sure. Patrick, its John. Yes we do obviously have business interruption insurance. The deductible for the storm and you have to look at it in terms of all the projects together is $10 million. And so we’re working on what the impact is going to be. But that covers everything from COAs and the on-site locations in our properties as well as marketing and sales disruptions. And so we’re still kind of penciling what that’s going to be and we’ll know more and we’ll update here in the fourth quarter.”
Latin america defaults increased as dollar declined
“Yes. Let me give you a little color here are just on. Yes, it’s clearly as we’ve talked about in prior calls, you had the foreign currency declines against the U.S. dollar, which occurred, call it, early third quarter of last year. For the most part, I think we see that the higher default activity really over the last year or so, not surprisingly is related to the loans that were originated not too far before that. And so had the least amount of payments if you will, against those loans is not across the board that way but generally. The good news is, based on where we’re at that end of the third quarter, is the overall Latin delinquencies are back in line with call it, June of last year. So we think we’ve seen the bulk of those defaults move through the pipeline if you will, as we’ve gotten back”