Travel + Leisure CEO Mike Brown Talks Travel Market
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Well, shares of Travel and Leisure reached an intraday record, rising 15%. That was back on October 22nd. This was the day the company lifted the low end of its adjusted EBITDA forecast for the full year. Shares of the $4.1 billion market cap company are up around 29%. So far this year.
Yeah, that's quite a run. We want to bring in our next guest, Mike Brown, president and CEO of the company, which has close to 20 resort travel club and lifestyle brands, including Margaritaville Vacation Club, Club Wyndham and more. He joins us from, I believe, a chilly Orlando on this Tuesday. It's a little chilly up here as well. Mike, great to have you back with us. You operate in a specific area. segment, timeshare. So talk to us a little bit more about who exactly is your customer. Remind our audience.
Well, ultimately, we're 100% leisure travel company, and our demographic is around $110,000 of average income, average FICO over 730, average FICO score. Age group, upper 40s, low 50s. And really, when you start to think about who likes to travel with us, No matter the brand, they want bigger accommodations, they want consistency of brands, and they want good value for their money. And that's really the space that we operate in. And if you think about these last five years where inflation is running high and you've already locked in your vacation dollars, the value component has been really strong and has propelled our growth here in the last five years.
How much of your business is sales of new memberships versus people actually just using what they bought maybe years ago?
Right, it's actually one of the best endorsements of people's love of the product is that every year, about 65% of our incremental purchases are from people who already own with us and want either more space or more vacation time. The rest are from our new owner base who are dipping their toe in the water and seeing what this type of vacation travel is all about. So not only are we getting two thirds of our sale roughly from people who already own with us, What we also see is the people who've paid for their ownership already, there's a 98% retention rate. So two massive validations that once people own, they really love the product and keep buying more.
So, you know, timeshares, they get a bad rap. I mean, they have a bad rap. I mean, if you like just Google, get out of timeshare, there are legal companies that specialize in getting you out of timeshares. Yeah, I mean, you know this, you know the industry. Is your product different than what people know as timeshares? And why that bad rap?
Yeah. Look, it's interesting because I can even feel the a little bit uncomfortableness of asking the question because it has a history that predates the great financial crisis. But I think the untold story here and why I love coming on shows like yours, beyond it being a great show, is that the industry has dramatically changed. Eighty five percent of the sales today are by companies that
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