Marriott International 1Q17 Earnings Call Notes

Arne M. Sorenson – Marriott International, Inc.

*Home sharing phenomenon has been less impactful than imagined

“You know, it’s a good question, Ryan. I think, the answer is that Airbnb and the home-sharing phenomenon has probably been less impactful to the RevPAR numbers that we’ve posted the last number of years than folks might first have imagined. And similarly, is probably less impactful today even with what’s happening on the regulatory side in a number of cities and states. Now, we will continue to analyze this data as much as we possibly can to understand it, but I think by and large, they are serving a mostly different customer than what we serve at Marriott. They are skewed much more towards leisure. They are skewed much more towards a value-centric customer in the bulk of their business, and if their business is under pressure because of a regulatory environment, I’m not sure necessarily that that customer immediately pops up and shows up in our hotel suites.”

Marriott Vacations Worldwide 3Q16 Earnings Call Notes

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.”

John Geller

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”

Vail 4Q16 Earnings Call Notes

Vail Resorts’ (MTN) CEO Rob Katz on Q4 2016 Results

Season pass sales up 24% in units

“Turning now to our 2016-2017 season pass sales for our US resorts; we are extremely pleased with our season pass sales to date. Through September 18, 2016, US ski season pass sales increased approximately 24% in units and 29% in sales dollars, compared to the prior year period ended September 20, 2015.”

Growth driven by “increasingly sophisticated marketing”

“Our growth continues to be driven by our increasingly sophisticated and targeted marketing efforts to move destination guests in to our season pass products, with this segment representing over half of this year’s growth. As always, we do expect our season pass growth rates to decline through the end of our selling season, given that some of the increase is driven by our efforts to encourage guests to purchase their passes earlier in the year.”

Goal is to get people to buy season passes and increase renewal rate

“And so for us our goal is really to move people from buying daily (inaudible) to buying season passes because we know that the renewal rate or the return rate on a season pass is much higher than if they are just buying a (inaudible). And then our goal once they are in the season pass program is to get them to renew that first year and second year, and one of our top priorities for this year has been to increase that first year renewal rate because obviously we are adding so many people to the program and we’ve been very successful with that.”

Renewal rate goes way up in second or third year

“The key obviously is, once you see a second year or a third year, all of a sudden the renewal rate goes way up. So one of the things that is driving our growth is increasing that renewal rate and a big part of that is us being smarter and more sophisticate in terms of how we talk to people, the message we send and how we get them to come back in to the program.”

Stable dollar should help international sales but will be tough to get to where it was 2 or 3 years ago

“I think as we go in to this year, we are seeing a better stability, one the currency having (inaudible) to the US dollar remained strong, but if you think about a year ago it was really in the middle of especially we think about a year ago last summer or spring, the US dollar was strengthening dramatically causing some instability there. I think now with the currency having stabilized we feel like that positions us pretty well going in to this year in terms of really for those countries where we did see some decline to really kind of moderate those declines if not eliminate them in some cases. We are also quite hopeful to be able to continue to drive growth from Australia. That said, with the strong US dollar, I don’t think we can necessarily get back to where we were 2.5, 3 years ago without seeing some shift in currency. ”

We have not seen a slowdown in the high end consumer

” I think we – what I’d say is that we have not seen a slowdown in the high end consumer. I don’t know that our confidence is any higher today than it was a year ago in the high end guest and their discretionary spending. Obviously there have been some wild wolves or whatever in high end consumer spending seen in some parts of travel, some parts of retail in particular. But what we are seeing is, it feels like vacation spending in particular has so far been strong and certainly over the summer we didn’t see any signs of some kind of slow down. I think people are still booking trips and may be this trend towards buying experiences, spending money on experiences versus buying luxury goods. Obviously that would help us.”

Carnival 3Q16 Earnings Call Notes

Carnival Corporation’s (CCL) CEO Arnold Donald on Q3 2016 Results

Industry cruise capacity in China to rise 31% next year

“Our capacity growth in China is expected to be 26% next year compared to 66% this year. Industrywide growth in china is expected to be 31% in 2017 compared to 100% this year. Those numbers sound big, but keep in mind that the large year-over-year percentage increase is over a very small base. So these growth rates are directionally equivalent to adding less than one 3,000-berth vessels to our China fleet and roughly two 4,000-berth vessels to the industry fleet overall in 2017 in China.”

Booking curves in US look strong

” So no real guidance yet for 2017 on that except what David shared in his comment about where the bookings were for Asia overall. In terms of the North America brands in Europe, again our booking curves look strong, and look good as do our pricings, but you’re asking about third quarter 2017, obviously that’s ways off.”

Ships sailing full in China

“Yes. Right now, our charter activity is strong in China. Our occupancies this year were very good. We anticipated as we said in the opening comments that we would see yield decline, but China is profitable, occupancy levels are high, which means the increased capacity was absorbed in terms of having guests on the ships. The ships are sailing full. And chartering for next year at this point is in process, but solid. We don’t see any consternation around occupancy for next year.”

The Chinese government sees the cruise industry as an important industry

“cruise is in the 5 year plan for China. So that means the government has committed to developing the Cruise industry. The reason for that is pretty self-evident. We’ll employ, overall with port development and infrastructure, and supply chain, and training as well as ship building that will employ millions, and millions, and millions of Chinese. So the government is very interested and they see cruise as an economic engine going forward. So you’ve got the support of the central government and the various provincial municipal governments, so that’s very important”

China is an embryonic market

“Beyond that clearly as we anticipated, as you guys have identified through your assessments and stuff that yields declined, we see China as a unit volume, a unit growth story as ultimately accretive to earnings, which it has been for us and overall helping us optimize yields across the global fleet and it’s working really well. Having said that, there is a gap with distribution. It’s an embryonic market. Distributors are finding their way for the first time in cruise. It is a charter market, a B2B market, so then it reduces possibilities of discontinuities that you might not see if you had a direct to consumer kind of a market.”

No material impact from Zika

“We’ve seen no material impact from Zika. We didn’t get any cancelations or they’re not enough to mention. We didn’t see any impact on booking volume or timing or anything. So we have not seen an impact from Zika. Having said that, you know, could there be a little bit of noise? That is just overwhelmed by the great demand that there is for the Caribbean would have been even greater and hypothetically you can say that, but we have seen nothing to suggest there was impact from Zika.”

Historically there’s an election slowdown

“Also, we’ve anticipated a bit of an election slowdown, as historically there’s always been a little fall off in booking volumes around election time. And so there could be some of that, but in our case again, right now we’re doing so well, and we’re so far ahead and the pricing is strong. We’ve got great close-in pricing right now and so it’s been very good. But relative to what the other companies, other cruise lines, I wouldn’t have a comment, but other than to say I’m sure it’s a combination of the relative moves they made in deployments and stuff, but I have no idea.”

There’s always something going on

” every year there’s geopolitical tensions. There’s some kind of disease consternation. There’s macroeconomic malaise. There’s isolated or concentrated over-capacity in the cruise industry. Every year in some markets around the world, those things happen and it’s part of our business. So we manage that. We anticipate it. We change deployments. We do good revenue management practices, manage around it and that’s basically it. So to us it’s normal business. I wish it wasn’t that way. Every now and then hopefully we’ll get lucky and there won’t be those incidents because we think we would do better”