Recovery of timeshare space is 'very encouraging' post-coronavirus: Marriott Vacations Worldwide CEO

Marriott Vacations Worldwide CEO & President Steve Weisz joins Yahoo Finance’s On The Move panel to assess the state of the travel industry as well as weigh in on the outlook for timeshares.

Video Transcript

JULIE HYMAN: Well, a lot of you out there, a lot of us as well, are itching to go on vacation. There are a lot of questions, though, surrounding safety of vacations-- will people want to get on planes, for example? For more perspective on all of this, we're joined now by the CEO and president Marriott Vacations Worldwide-- it's the timeshare business. Steve Weisz is joining us from Orlando, Florida. Steve, thank you for joining us. So as you all look at the timeshare business-- and these-- it's different, obviously, from a hotel. It's more like an Airbnb or one of those businesses because it's a self-contained unit-- an apartment, in many cases. What kind of demand pickup are you seeing from your owners?

STEVE WEISZ: Well, it's been very encouraging, particularly in the last several weeks starting in the middle of May when many of the resorts were able to be more back at full capacity in terms of some of the governmental restrictions and limits on amenities, et cetera. We've started to see, particularly in the drive markets as you mentioned, where our owners are coming back and occupancies are now, in many of those drive markets, back in the kind of 50% to 60% range. And our current forecast for the next several weekends, as an example, is into the 70s and 80% occupancy levels, which is a far cry from where we were just a month ago when the numbers were kind of low single-digits.

ADAM SHAPIRO: Hey, Steve, Adam Shapiro here, itching to take a vacation, like millions of Americans. I'm curious-- Marriott Vacation actually put into place less restrictive cancelation policies because of COVID-19. What-- do you have a percentage as to how many of your guests had to take advantage of that? And also on the timeshare side, what percentage of timeshare owners might have had to postpone payments or will have to do make-goods on payments?

STEVE WEISZ: Sure. So the first part-- obviously, from, call it, the middle of March to the end of May-- or the middle of May, actually-- we reached out to every one of our owners that had a reservation to make sure that they knew exactly what they were going to be seeing when they arrived at their resort. We actually only closed 35 of our resorts of our 110. The remainder remained open.

As you might imagine, when people heard that either the pool was going to be at very limited occupancy or there was not going to be a food and beverage on site, et cetera, a number of people chose to cancel that reservation. And we restored their usage so that they could use it at a later date. So pretty much everybody-- as I said, we had low single-digit occupancy, so pretty much everybody during that timeframe chose to do something else.

As far as those people that have asked for some sort of forbearance on their mortgage, only 20% of our owners-- we have $660,000 owners, only 20% of them have a mortgage. And about 2%, 2.5% of the people reached out to see if we were doing something from an accommodation standpoint. We said we'd be happy to try to help them.

The only two stipulations were either they had to have lost their job or lost 30% of their income. And those folks eventually said, well, I really don't qualify then. So it came back to about 1% of our owners have asked for some help in extending their mortgage payments. And we're happy to do that-- no harm on their credit rating, no extra interest or anything else until we can get through this onto the other side, and then we can [INAUDIBLE] once again.

BRIAN CHEUNG: Steve, it's Brian Cheung here. You're talking about existing reservations or existing owners-- I'm wondering from a demand side what's been the interest in new owners or new reservations, let's say in the next 12 months or so? Have you had to lower prices to attract those interested in maybe having a timeshare, for example? Or have you seen it quite rigid with some of the reopenings?

STEVE WEISZ: Well, there's a couple of things that have happened. We closed all of our sales galleries on March 23. And they remained closed until-- through the end of May. We opened six last week. We've seen some encouraging signs from those. And largely, those openings are consistent with as occupancy begins to build our resorts. In the interim period, we actually have about 150 of our sales executives who are normally selling face to face. We actually train them to sell over the telephone.

And we generated, call it, about $17 million worth of sales. We did that. We did put a promotional pricing program in place, which certainly has resonated with people-- oftentimes to our existing owners who want to buy more of our product. They saw this was a great time to do that. The other thing I'd add is when you look at the sales tours, which are scheduled for the second half of the year, we have 43,000 tours on the books for the remainder of the year, which is very, very healthy. We see and, in fact, we booked another 4% in the last 30 days. So we're very encouraged by what we see here. Is it normal yet? No. We think we're getting back in that direction.

JULIE HYMAN: Direction is good. All right, Steve Weisz, thank you so much. He's the Marriott Vacations Worldwide CEO and president. Thank you, sir.