Travel + Leisure (TNL) Q3 2024 earnings summary

Executive summary

• Net revenues for Q3 2024 were $993 million, up year-over-year, driven by higher Vacation Ownership sales and property management fees, partially offset by lower Travel and Membership segment revenues.

• Adjusted EBITDA for Q3 2024 was $242 million, with a 24.4% margin, and adjusted diluted EPS of $1.57.

• Net income attributable to shareholders was $97 million for Q3 2024, down from $110 million in Q3 2023, primarily due to increased expenses and higher loan loss provisions.

• Vacation ownership business showed solid momentum, with VPG consistently above $3,000 and new owner tours up 9% year-over-year.

• Accor Vacation Club acquisition and integration expanded the international portfolio, exceeding initial targets and contributing over $3 million in adjusted EBITDA year to date.

Financial highlights

• Q3 2024 net revenues: $993 million; adjusted EBITDA: $242 million; adjusted net income: $110 million; adjusted free cash flow: $154 million.

• Gross VOI sales totaled $606 million for the quarter, up 1.3% year-over-year; tours increased by 4–4.5%.

• VPG was $3,012, exceeding guidance midpoint but down 3% year-over-year.

• Vacation Ownership revenues increased 2% year-over-year to $825 million; Travel and Membership segment saw flat adjusted EBITDA on a 3% revenue decline.

• Net cash provided by operating activities for the nine months ended September 30, 2024, was $366 million, up from $198 million in the prior year period.

Outlook and guidance

• Q4 2024 adjusted EBITDA guidance is $240 million to $260 million; full-year adjusted EBITDA guidance reaffirmed at $915 million to $935 million.

• Q4 gross VOI sales expected between $550 million and $600 million; VPG guidance of $2,900 to $3,000.

• Travel and Membership Q4 adjusted EBITDA expected at $45 million to $50 million.

• Interest rate headwinds expected to flatten and become a tailwind by late 2025; management expects lower interest expense following a Federal Reserve rate cut.

• Long-term growth expected from new owner pipeline, Accor ramp-up, and Sports Illustrated brand.