Marriott Vacations Worldwide Closing North American Vacation Ownership Resorts for the Next 30 Days
Wednesday, March 25, 2020
Marriott Vacation Worldwide announced that they have made the difficult decision based on the increasing travel and business operating restrictions due to COVID-19 to close all North America vacation ownership resorts for the next 30 days as of today. Additionally, Marriott has closed all North American sales centers for two weeks, effective March 23, 2020.
“From Singapore to London to Hawaii, the effect on our business is both widespread and profound,” said Stephen P. Weisz, president and chief executive officer. “We have a resilient business model with nearly half of our Adjusted EBITDA Contribution coming from recurring revenue streams. While we’ve never seen anything of this magnitude, we have seen other disruptions in the past and we’ve been able to manage through them.”
Marriott started off 2020 strong, with first quarter consolidated contract sales up 10-percent through March 13, 2020. North America resort occupancy was also above 80-percent for the week that ended on March 16, 2020. Since then, Marriott Vacations Worldwide saw marked declines in occupancy, rentals, and contract sales due to the COVID-19 pandemic.
As a result, Marriott has taken a number of actions including:
- Marriott’s executive leadership team is taking a 50-percent salary reduction
- All new hires have been frozen (with the exception of mission-critical needs)
- Furloughs and reduced work hours have been implemented
- 401(k) matches have been deferred
- Plans are in place to reduce investment on capital expenditures and inventory by up to $240 million, if necessary
- Share repurchases under the share repurchase plan have been suspended
“We expect that we can make the changes needed so that we can run the business at close to cash flow neutral until the business returns to a more normal level,” said Mr. Weisz. “Thanks to the resilience of our business model and the extremely difficult decisions we are making, I firmly believe that we will come through this an even stronger company.”
Learn more about Marriott Vacations Worldwide and stay up to date on resort re-openings by visiting their website.