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What changed in Travel & Leisure Co.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Travel & Leisure Co.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+351 added−351 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-21)

Top changes in Travel & Leisure Co.'s 2024 10-K

351 paragraphs added · 351 removed · 284 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

70 edited+8 added−14 removed93 unchanged
Biggest changeBased on published industry data, owners express the following primary reasons for buying and continuing to own their timeshare: • saving money on future vacation costs; • location of resorts; 4 Table of Contents • overall flexibility to use different locations, unit types, and times of year; • certainty of vacations; and • certainty of quality accommodations.
Biggest changeThis fee typically covers expenses such as housekeeping, landscaping, taxes, insurance, resort labor, a management fee payable to the management company, and an assessment to fund a reserve account used to renovate, refurbish and replace furnishings, appliances, and common areas and other assets, such as structural elements and equipment, as needed over time. 4 Table of Contents Based on published industry data, owners express the following primary reasons for buying and continuing to own their timeshare: • saving money on future vacation costs; • location of resorts; • overall flexibility to use different locations, unit types, and times of year; • certainty of vacations; and • certainty of quality accommodations.
In particular, the Separation and Distribution Agreement provided that, subject to certain terms and conditions: • The assets that have been retained by or transferred to Wyndham Hotels (“SpinCo assets”) include, but are not limited to: • all of the equity interests of Wyndham Hotels; • any and all assets reflected on the audited combined balance sheet of the Wyndham Hotels businesses; • any and all contracts primarily relating to the Wyndham Hotels businesses; and • all rights in the “Wyndham” trademark and “The Registry Collection” trademark, and certain intellectual property related thereto. • The liabilities that have been retained by or transferred to Wyndham Hotels (“SpinCo liabilities”) include, but are not limited to: • any and all liabilities (whether accrued, contingent or otherwise, and subject to certain exceptions) to the extent primarily related to, arising out of or resulting from (i) the operation or conduct of the Wyndham Hotels businesses or (ii) the SpinCo assets; • any and all liabilities (whether accrued, contingent or otherwise) relating to, arising out of or resulting from any form, registration statement, schedule or similar disclosure document filed or furnished with the SEC, to the extent such filing is either made by Wyndham Hotels or made by us in connection with the Spin-off, subject to each party’s indemnification obligations under the Separation and Distribution Agreement with respect to any misstatement of or omission to state a material fact contained in any such filing to the extent the misstatement or omission is based upon information that was furnished by such party; • any and all liabilities relating to, arising out of, or resulting from any indebtedness of Wyndham Hotels or any indebtedness secured exclusively by any of the Wyndham Hotels assets; and 14 Table of Contents • any and all liabilities (whether accrued, contingent or otherwise) reflected on the audited combined balance sheet of the Wyndham Hotels businesses. • Wyndham Hotels assumed one-third and Travel + Leisure Co. assumed two-thirds of certain contingent and other corporate liabilities of Travel + Leisure Co. and Wyndham Hotels (“shared contingent liabilities”) in each case incurred prior to the Distribution, including our liabilities related to, arising out of or resulting from (i) certain terminated or divested businesses, (ii) certain general corporate matters of Travel + Leisure Co., and (iii) any actions with respect to the separation plan or the Distribution made or brought by any third party. • Wyndham Hotels is entitled to receive one-third and Travel + Leisure Co. is entitled to receive two-thirds of the proceeds (or, in certain cases, a portion thereof) from certain contingent and other corporate assets of Travel + Leisure Co. and Wyndham Hotels (“shared contingent assets”) arising or accrued prior to the Distribution, including our assets related to, arising from or involving (i) certain terminated or divested businesses, and (ii) certain general corporate matters of Travel + Leisure Co. • In connection with the sale of our European vacation rentals business, Wyndham Hotels assumed one-third and Travel + Leisure Co. assumed two-thirds of certain shared contingent liabilities and certain shared contingent assets. • Except as otherwise provided in the Separation and Distribution Agreement or any ancillary agreement, the corporate costs and expenses relating to the Spin-off will be paid by the party with whom such costs were incurred, from a separate account maintained by each of Wyndham Hotels and Travel + Leisure Co. and established prior to completion of the Spin-off on terms agreed upon by Wyndham Hotels and Travel + Leisure Co. and, to the extent the funds in such separate account are not sufficient to satisfy such costs and expenses, be treated as shared contingent liabilities (as described above). • All of our assets and liabilities (whether accrued, contingent or otherwise) other than the SpinCo assets and SpinCo liabilities, subject to certain exceptions (including the shared contingent assets and shared contingent liabilities), have been retained by or transferred to Travel + Leisure Co., except as set forth in the Separation and Distribution Agreement or one of the other agreements described below.
In particular, the Separation and Distribution Agreement provided that, subject to certain terms and conditions: • The assets that have been retained by or transferred to Wyndham Hotels (“SpinCo assets”) include, but are not limited to: • all of the equity interests of Wyndham Hotels; • any and all assets reflected on the audited combined balance sheet of the Wyndham Hotels businesses; • any and all contracts primarily relating to the Wyndham Hotels businesses; and • all rights in the “Wyndham” trademark and “The Registry Collection” trademark, and certain intellectual property related thereto. 13 Table of Contents • The liabilities that have been retained by or transferred to Wyndham Hotels (“SpinCo liabilities”) include, but are not limited to: • any and all liabilities (whether accrued, contingent or otherwise, and subject to certain exceptions) to the extent primarily related to, arising out of or resulting from (i) the operation or conduct of the Wyndham Hotels businesses or (ii) the SpinCo assets; • any and all liabilities (whether accrued, contingent or otherwise) relating to, arising out of or resulting from any form, registration statement, schedule or similar disclosure document filed or furnished with the SEC, to the extent such filing is either made by Wyndham Hotels or made by us in connection with the Spin-off, subject to each party’s indemnification obligations under the Separation and Distribution Agreement with respect to any misstatement of or omission to state a material fact contained in any such filing to the extent the misstatement or omission is based upon information that was furnished by such party; • any and all liabilities relating to, arising out of, or resulting from any indebtedness of Wyndham Hotels or any indebtedness secured exclusively by any of the Wyndham Hotels assets; and • any and all liabilities (whether accrued, contingent or otherwise) reflected on the audited combined balance sheet of the Wyndham Hotels businesses. • Wyndham Hotels assumed one-third and Travel + Leisure Co. assumed two-thirds of certain contingent and other corporate liabilities of Travel + Leisure Co. and Wyndham Hotels (“shared contingent liabilities”) in each case incurred prior to the Distribution, including our liabilities related to, arising out of or resulting from (i) certain terminated or divested businesses, (ii) certain general corporate matters of Travel + Leisure Co., and (iii) any actions with respect to the separation plan or the Distribution made or brought by any third party. • Wyndham Hotels is entitled to receive one-third and Travel + Leisure Co. is entitled to receive two-thirds of the proceeds (or, in certain cases, a portion thereof) from certain contingent and other corporate assets of Travel + Leisure Co. and Wyndham Hotels (“shared contingent assets”) arising or accrued prior to the Distribution, including our assets related to, arising from or involving (i) certain terminated or divested businesses, and (ii) certain general corporate matters of Travel + Leisure Co. • In connection with the sale of our European vacation rentals business, Wyndham Hotels assumed one-third and Travel + Leisure Co. assumed two-thirds of certain shared contingent liabilities and certain shared contingent assets. • Except as otherwise provided in the Separation and Distribution Agreement or any ancillary agreement, the corporate costs and expenses relating to the Spin-off will be paid by the party with whom such costs were incurred, from a separate account maintained by each of Wyndham Hotels and Travel + Leisure Co. and established prior to completion of the Spin-off on terms agreed upon by Wyndham Hotels and Travel + Leisure Co. and, to the extent the funds in such separate account are not sufficient to satisfy such costs and expenses, be treated as shared contingent liabilities (as described above). • All of our assets and liabilities (whether accrued, contingent or otherwise) other than the SpinCo assets and SpinCo liabilities, subject to certain exceptions (including the shared contingent assets and shared contingent liabilities), have been retained by or transferred to Travel + Leisure Co., except as set forth in the Separation and Distribution Agreement or one of the other agreements described below.
Our environmental goals are to: • Reduce greenhouse gas (“GHG”) emissions intensity (Scope 1 + Scope 2 - location-based) by 40% by 2025 compared to our 2010 baseline. • Increase renewable electricity consumption (of our managed resorts) to 20% by 2030 compared to our 2010 baseline. • Reduce water withdrawal per square foot by 35% at our owned, managed, and leased assets by 2025 compared to our 2010 baseline. • Plant two million trees through our partnership with the Arbor Day Foundation by 2025.
Our environmental goals are to: • Reduce greenhouse gas (“GHG”) emissions intensity (Scope 1 + Scope 2 - location-based) by 40% by 2025 compared to our 2010 baseline. • Increase renewable electricity consumption (of our managed resorts) to 20% by 2030 compared to our 2010 baseline. • Reduce water withdrawal per square foot by 35% at our owned, managed, and leased assets by the end of 2025 compared to our 2010 baseline. • Plant two million trees through our partnership with the Arbor Day Foundation by 2025.
Specifically, each party will, and will cause its subsidiaries to, indemnify, defend and hold harmless the other party, its affiliates and subsidiaries and each of its and their respective officers, directors, employees and agents for any losses arising out of, by reason of or otherwise in connection with: • the liabilities each such party assumed or retained pursuant to the Separation and Distribution Agreement; • any misstatement of or omission to state a material fact contained in any party’s public filings, only to the extent the misstatement or omission is based upon information that was furnished by the indemnifying party (or incorporated by reference from a filing of such indemnifying party) and then only to the extent the statement or omission was made or occurred after the Spin-off; and • any breach by such party of the Separation and Distribution Agreement or any ancillary agreement unless such ancillary agreement expressly provides for separate indemnification therein, in which case any such indemnification claims will be made thereunder.
Specifically, each party will, and will cause its subsidiaries to, indemnify, defend and hold harmless the other party, its affiliates and subsidiaries and each of its and their respective officers, directors, employees and agents for any losses arising out of, by reason of or otherwise in connection with: • the liabilities each such party assumed or retained pursuant to the Separation and Distribution Agreement; • any misstatement of or omission to state a material fact contained in any party’s public filings, only to the extent the misstatement or omission is based upon information that was furnished by the indemnifying party (or incorporated by reference from a filing of such indemnifying party) and then only to the extent the statement or omission was made or occurred after the Spin-off; and 14 Table of Contents • any breach by such party of the Separation and Distribution Agreement or any ancillary agreement unless such ancillary agreement expressly provides for separate indemnification therein, in which case any such indemnification claims will be made thereunder.
HUMAN CAPITAL Employee Profile We recognize our employees as associates who bring our mission to put the world on vacation to life through their service to the world’s leading membership and leisure travel company. Oversight and Management Our human resources organization manages employment-related matters, including recruiting and hiring, onboarding, compensation and benefits, performance management, and professional development.
HUMAN CAPITAL Employee Profile We recognize our employees as associates who bring our mission to put the world on vacation to life through their service to the world’s leading vacation ownership and membership travel company. Oversight and Management Our human resources organization manages employment-related matters, including recruiting and hiring, onboarding, compensation and benefits, performance management, and professional development.
Climate Change Climate change is associated with extreme weather conditions and other natural disasters, such as increased frequency and severity of storms and floods, coastal erosion and flooding due to higher sea levels, increased temperatures, and increased forest fires. We manage properties exposed to areas which are susceptible to adverse effects resulting from these conditions and disasters.
Climate Change Climate change is believed to be associated with extreme weather conditions and other natural disasters, such as increased frequency and severity of storms and floods, coastal erosion and flooding due to higher sea levels, increased temperatures, and increased forest fires. We manage properties exposed to areas which are susceptible to adverse effects resulting from these conditions and disasters.
Volume per guest on these affinity marketing tours is generally higher than other tours, helping to increase margins on new owner sales. Add leisure or hospitality brands to our existing portfolio. The addition of brands will help us expand in existing markets or extend into new markets. New brands will also help with lead generation for new owner tours.
Volume per guest on these affinity marketing tours is generally higher than other tours, helping to increase margins on new owner sales. Add leisure or hospitality brands to our existing portfolio. The addition of brands will help us expand within our existing markets or extend into new markets. New brands will also help with lead generation for new owner tours.
By fostering growth potential for all 10 Table of Contents associates at Travel + Leisure Co., we enable each individual to clearly understand their role in the context of the larger organization and to access courses designed specifically to further their development. • Programs focused on career progression include formal talent reviews, succession planning, associate development programs for all levels, executive coaching, leader onboarding plans, new leader orientation, and tuition and certification reimbursement.
By fostering growth potential for all associates at Travel + Leisure Co., we enable each individual to clearly understand their role in the context of the larger organization and to access courses designed specifically to further their development. • Programs focused on career progression include formal talent reviews, succession planning, associate development programs for all levels, executive coaching, leader onboarding plans, new leader orientation, and tuition and certification reimbursement.
Approximately 97% of our associates are eligible to participate in a company sponsored retirement plan or a mandatory pension plan in their country of residence, subject to plan terms. We also have an Employee Stock Purchase Plan which is available to 87% of our associates.
Approximately 97% of our associates are eligible to participate in a company sponsored retirement plan or a mandatory pension plan in their country of residence, subject to plan terms. We also have an Employee Stock Purchase Plan which is available to 86% of our associates.
Performance in our Vacation Ownership business is measured by the following key operating statistics: • Gross vacation ownership interest sales — Sales of VOIs, including sales under our Fee-for-Service program, before the effect of loan loss provisions. • Tours — Number of tours taken by guests in our efforts to sell VOIs. • Volume per guest (“VPG”) — Gross VOI sales (excluding telesales and virtual sales) divided by the number of tours.
Performance in our Vacation Ownership business is measured by the following key operating statistics: • Gross vacation ownership interest sales — Sales of VOIs, including sales under our Fee-for-Service program, before the effect of loan loss provisions. • Tours — Number of tours taken by guests in our efforts to sell VOIs. 5 Table of Contents • Volume per guest (“VPG”) — Gross VOI sales (excluding telesales and virtual sales) divided by the number of tours.
Similarly, state and federal regulations may place limitations on our ability to engage our consumers in electronic mail marketing campaigns, including requirements applicable to the transmission of email messages with the primary purpose of advertising or promoting a commercial product or service. We have adopted email messaging practices responsive to the requirements of such regulations.
Similarly, state and federal regulations may place limitations on our ability to engage our consumers in electronic mail marketing campaigns, including requirements applicable to the transmission 9 Table of Contents of email messages with the primary purpose of advertising or promoting a commercial product or service. We have adopted email messaging practices responsive to the requirements of such regulations.
Additionally, as of December 31, 2022, we have reduced our water withdrawal per square foot by 21%, compared to our 2010 baseline. In partnership with the Arbor Day Foundation, during 2023 we achieved our 2025 goal of planting two million trees. This accomplishment, two years ahead of schedule, underscores our commitment to enhancing biodiversity.
Additionally, as of December 31, 2023, we have reduced our water withdrawal per square foot by 14%, compared to our 2010 baseline. In partnership with the Arbor Day Foundation, during 2023 we achieved our 2025 goal of planting two million trees. This accomplishment, two years ahead of schedule, underscores our commitment to enhancing biodiversity.
We have excluded non-tour sales in the calculation of VPG because they are generated by a different marketing channel. 5 Table of Contents Sales and Marketing We employ a variety of marketing channels to encourage prospective owners of VOIs to tour our properties and attend sales presentations at our resort-based sales centers as well as offsite sales offices.
We have excluded non-tour sales in the calculation of VPG because they are generated by a different marketing channel. Sales and Marketing We employ a variety of marketing channels to encourage prospective owners of VOIs to tour our properties and attend sales presentations at our resort-based sales centers as well as offsite sales offices.
Our philanthropic efforts drive support for organizations including Give Kids the World Village, Jack and Jill Late Stage Cancer Foundation, as well as our internal Associate Relief Fund. Our decades long partnership with Christel House International supports educational opportunities for children in underserved global communities.
Our philanthropic efforts drive support for organizations including Give Kids the World Village, 12 Table of Contents Jack and Jill Late Stage Cancer Foundation, as well as our internal Associate Relief Fund. Our decades long partnership with Christel House International supports educational opportunities for children in underserved global communities.
We have a long-term, exclusive license agreement and marketing arrangements with Wyndham Hotels, the world’s largest hotel franchiser by number of hotels with approximately 9,200 affiliated hotels located in more than 95 countries.
We have a long-term, exclusive license agreement and marketing arrangements with Wyndham Hotels, the world’s largest hotel franchiser by number of hotels with approximately 9,300 hotels located in more than 95 countries.
Fees for property management services typically approximate 10% of budgeted operating expenses. As the owner of unsold VOIs, we pay maintenance fees in accordance with the legal requirements of the jurisdictions in which the resorts are located.
Fees for property management 6 Table of Contents services typically approximate 10% of budgeted operating expenses. As the owner of unsold VOIs, we pay maintenance fees in accordance with the legal requirements of the jurisdictions in which the resorts are located.
In total VOI upgrade sales represented 68% and 70% of our net VOI sales in 2023 and 2022. Our marketing and sales activities are often facilitated through marketing alliances with other travel, hospitality, entertainment, gaming, and retail companies that provide access to such companies’ customers through a variety of co-branded marketing offers.
In total VOI upgrade sales represented 68% of our net VOI sales in both 2024 and 2023. Our marketing and sales activities are often facilitated through marketing alliances with other travel, hospitality, entertainment, gaming, and retail companies that provide access to such companies’ customers through a variety of co-branded marketing offers.
The terms of the property management agreements are generally between three to five years; however, the vast majority of the agreements provide a mechanism for automatic renewal upon expiration of the terms. In connection with these property management services, we receive fees which are generally based upon total costs to operate such resorts.
The initial terms of the property management agreements are generally between three to five years; however, the vast majority of the agreements provide a mechanism for an automatic one year renewal upon expiration of the terms. In connection with these property management services, we receive fees which are generally based upon total costs to operate such resorts.
In connection with the Spin-off, we entered into a license, development and noncompetition 8 Table of Contents agreement with Wyndham Hotels, which, among other things, granted to Travel + Leisure Co. the right to use the “Wyndham” trademark, “The Registry Collection” trademark, and certain other trademarks and intellectual property in our business.
In connection with the Spin-off, we entered into a license, development and noncompetition agreement with Wyndham Hotels, which, among other things, granted to Travel + Leisure Co. the right to use the “Wyndham” trademark, “The Registry Collection” trademark, and certain other trademarks and intellectual property in our business.
ITEM 1. BUSINESS Company Overview Travel + Leisure Co. is the world’s leading membership and leisure travel company. We provide vacation experiences and travel inspiration to millions of owners, members, and subscribers through our products and services.
ITEM 1. BUSINESS Company Overview Travel + Leisure Co. is the world’s leading vacation ownership and membership travel company. We provide vacation experiences and travel inspiration to millions of owners, members, and subscribers through our diverse portfolio of products and services.
Environmental Progress Our environmental strategy is anchored through three main tenants: reducing our environmental footprint, expanding our renewables portfolio, and prioritizing biodiversity in locations where we live and work. Our commitment to environmental 11 Table of Contents management extends beyond fully owned assets, encompassing all assets we own, manage, and lease.
Environmental Progress Our environmental strategy is anchored through three main tenants: reducing our environmental footprint, expanding our renewables portfolio, and prioritizing biodiversity in locations where we live and work. Our commitment to environmental management extends beyond fully owned assets, encompassing all assets we own, manage, and lease.
Our loan portfolio was 95% and 94% current (not more than 30 days past due) as of December 31, 2023 and 2022. See Note 9— Vacation Ownership Contract Receivables to the Consolidated Financial Statements for further information on the performance of our loan portfolio.
Our loan portfolio was 95% current (not more than 30 days past due) as of both December 31, 2024 and 2023. See Note 9— Vacation Ownership Contract Receivables to the Consolidated Financial Statements for further information on the performance of our loan portfolio.
Environmental Compliance Our compliance with federal, state and local laws and regulations relating to environmental protection and discharge of hazardous materials has not had a material impact on our capital expenditures, earnings or competitive position, and we do not anticipate any material impact from such compliance in the future.
Environmental Compliance Our compliance with federal, state and local laws and regulations relating to environmental protection has not had a material impact on our capital expenditures, earnings or competitive position, and we do not anticipate any material impact from such compliance in the future.
We use a consumer credit score, Fair Isaac Corporation (“FICO”), which is a branded version of a consumer credit score widely used within the U.S. Our weighted average FICO score on new originations was 739 and 736 for 2023 and 2022.
We use a consumer credit score, Fair Isaac Corporation (“FICO”), which is a branded version of a consumer credit score widely used within the U.S. Our weighted average FICO score on new originations was 744 and 739 for 2024 and 2023.
Furthermore, our Audit Committee discusses compliance risks related to human capital matters and periodically reviews and updates our Code of Conduct to promote ethical behavior by all of our associates. As of December 31, 2023, our global team was comprised of over 19,000 associates, 4,200 of whom work outside the U.S.
Furthermore, our Audit Committee discusses compliance risks related to human capital matters and periodically reviews and updates our Code of Conduct to promote ethical behavior by all of our associates. As of December 31, 2024, our global team was comprised of 19,000 associates, 4,600 of whom work outside the U.S.
This level of financing is prior to the application of cash received for the full payment of a loan within 60 days of origination. After the application of these early repayments, we financed 56% of VOI sales during both 2023 and 2022.
This level of financing is prior to the application of cash received for the full payment of a loan within 60 days of origination. After the application of these early repayments, we financed 54% and 56% of VOI sales during 2024 and 2023.
Health & Safety The health and safety of our associates is of the utmost importance. Travel + Leisure Co. remains responsive to health-related issues, including COVID-19, for the safety and well-being of our associates, guests, and customers.
Health & Safety The health and safety of our associates is of the utmost importance. Travel + Leisure Co. remains responsive to health-related issues for the safety and well-being of our associates, guests, and customers.
All of our managers participate in an annual incentive plan that most closely aligns with their role. Sales and marketing associates at all levels across our business lines participate in variable compensation plans aligned to their role. As of December 31, 2023, 41% of our associates participate in a variable pay incentive pay program.
All of our managers and above participate in an annual incentive plan that most closely aligns with their role. Sales and marketing associates at all levels across our business lines participate in variable compensation plans aligned to their role. As of December 31, 2024, 42% of our associates participate in a variable pay incentive pay program.
Through our collection of vacation exchange brands, we have 3.5 million paid member families. Annual member retention is high and over the last three years we have retained on average 85% of the exchange memberships through our Exchange networks.
Through our collection of vacation exchange brands, we have 3.4 million paid member families. Annual member retention is high and over the last three years we have retained on average 88% of the exchange memberships through our Exchange networks.
The following summaries do not purport to be complete and are qualified in their entirety by reference to the full text of each agreement, which is incorporated by reference into this Annual Report on Form 10-K included in Part IV, Item 15 as Exhibits 2.4, 10.62, 10.63, 10.64, and 10.65.
The following summaries do not purport to be complete and are qualified in their entirety by reference to the full text of each agreement, which is incorporated by reference into this Annual Report on Form 10-K included in Part IV, Item 15 as Exhibits 2.3, 10.60, 10.61, 10.62, and 10.63.
The Wyndham Hotels loyalty program, Wyndham Rewards, has over 106 million enrolled members, many of whom fit our target new-customer demographic, providing us with a substantial customer sourcing opportunity to drive future VOI sales. We plan to increase this sales channel with initiatives such as enhanced call transfers, online marketing, in-hotel marketing, and online rentals of vacation ownership resorts.
The Wyndham Hotels loyalty program, Wyndham Rewards, has approximately 114 million enrolled members, many of whom fit our target new-customer demographic, providing us with a substantial customer sourcing opportunity to drive future VOI sales. We plan to leverage this sales channel through initiatives such as enhanced call transfers, online marketing, in-hotel marketing, and online rentals of vacation ownership resorts.
Visit our website at travelandleisureco.com/esg-commitment for additional information on our social responsibility activities and initiatives, along with our 2022 ESG report. Information on our website, including our 2022 ESG report, is not part of, or incorporated in, this Annual Report on Form 10-K.
Visit our website at travelandleisureco.com/esg-commitment for additional information on our corporate responsibility activities and initiatives, along with our 2023 Environmental, Social, and Governance report. Information on our website, including our 2023 Environmental, Social, and Governance report, is not part of, or incorporated in, this Annual Report on Form 10-K.
As of December 31, 2022, we have reduced our Scope 1 + Scope 2 GHG emissions intensity by 36% and continue to increase our renewable energy consumption. This progress has been accomplished through a combination of increased operational efficiency, onsite solar projects, and one offsite solar project.
As of December 31, 2023, we have reduced our Scope 1 + Scope 2 GHG emissions intensity by 39% and have increased our renewable energy consumption to 3%. This progress has been accomplished through a combination of increased operational efficiency, onsite solar projects, and one offsite solar project.
Information on our website is not part of, or incorporated by reference into, this Annual Report on Form 10-K. ENVIRONMENTAL, SOCIAL, AND GOVERNANCE We are committed to making a positive impact on our world while delivering stakeholder value through our Environmental, Social, and Governance (“ESG”) strategy, Full Circle.
Information on our website is not part of, or incorporated by reference into, this Annual Report on Form 10-K. CORPORATE RESPONSIBILITY We are committed to making a positive impact on our world while delivering stakeholder value through our Corporate Responsibility strategy, Full Circle.
Our strategy is to accelerate the growth of our global businesses by broadening the strength of our cornerstone timeshare and exchange businesses and creating depth of leisure travel products and services through growth of our travel clubs.
Our strategy is to accelerate the growth of our global businesses by broadening the strength of our cornerstone timeshare business through a multi-brand expansion strategy, and our exchange businesses by creating depth of leisure travel products and services through growth of our travel clubs.
Additionally, through contributions to Step Up for Students, we support providing low-income families in Florida the opportunity to choose the best education for their children. Most recently, we established the Travel + Leisure Charitable Foundation. This foundation embraces a diverse and inclusive community through a variety of programs, including leadership training, mentoring opportunities, and educational support.
Additionally, through contributions to Step Up for Students, we support providing low-income families in Florida the opportunity to choose the best education for their children. We established the Travel + Leisure Charitable Foundation. This foundation embraces a diverse and inclusive community through mentoring opportunities and educational support.
In addition, based on the water risk assessment we conducted in 2023, we identified 53 managed resorts in high or extremely high-water stressed locations.
In addition, based on the water risk assessment we conducted in 2024, we identified 59 managed resorts in high or extremely high-water stressed locations.
Our vacation exchange business has relationships with 4,100 affiliated vacation ownership resorts in 104 countries and territories located in North America, Latin America, the Caribbean, Europe, the Middle East, Africa, and Asia Pacific.
Our vacation exchange business has relationships with 3,600 affiliated vacation ownership resorts in 101 countries and territories located in North America, Latin America, the Caribbean, Europe, the Middle East, Africa, and Asia Pacific.
As of December 31, 2023, based on insurable property values, approximately: • 37% of our managed properties are located in Tier I windstorm exposure areas, • 23% are in states prone to high-risk wildfire, and • 20% are situated in areas with a high level of flood risk.
As of December 31, 2024, based on insurable property values: • 36% of our managed, leased, or owned properties are located in Tier I windstorm exposure areas, • 22% are in states prone to high-risk wildfire, and • 20% are situated in areas with a high level of flood risk.
While the minimum down payment is typically 10%, our average down payment on financed VOI sales was 19% for both 2023 and 2022. During 2023, we generated $1.43 billion of receivables on $1.93 billion of gross VOI sales, net of Fee-for-Service sales, resulting in 74% of our VOI sales being financed compared to 64% during 2022.
While the minimum down payment is typically 10%, our average down payment on financed VOI sales was 20% and 19% for 2024 and 2023. During 2024, we generated $1.53 billion of receivables on $2.15 billion of Gross VOI sales, net of Fee-for-Service sales, resulting in 71% of our VOI sales being financed compared to 74% during 2023.
On January 5, 2021, we acquired the Travel + Leisure brand and all related assets from Dotdash Meredith (formerly Meredith Corporation). The acquisition created a strategic alliance between Travel + Leisure Co. and Dotdash Meredith, with Dotdash Meredith continuing to operate and monetize Travel + Leisure branded multi-platform media assets across multiple channels under a 30-year royalty-free, renewable licensing relationship.
The acquisition created a strategic alliance between Travel + Leisure Co. and Dotdash Meredith, with Dotdash Meredith continuing to operate and monetize Travel + Leisure branded multi-platform media assets across multiple channels under a 30-year royalty-free, renewable licensing relationship.
As of December 31, 2023, we had more than 245 vacation ownership resorts in the U.S., Canada, Mexico, the Caribbean, and Asia Pacific that represent 26,800 individual vacation ownership units and 804,000 owners of VOIs.
As of December 31, 2024, we had more than 270 vacation ownership resorts in the U.S., Canada, Mexico, the Caribbean, and Asia Pacific that represent 27,700 individual vacation ownership units and 809,000 owners of VOIs.
Through the addition of more inventory options for exchange and more travel products and services, RCI Travel Club seeks to enhance its core exchange business lines’ growth through greater share of consumers’ travel spend, increased member engagement, and reduced churn. 7 Table of Contents Expand B2B travel solutions.
Through the addition of more inventory options for exchange and more travel products and services, RCI seeks to enhance its core exchange business lines’ growth through greater share of consumers’ travel spend, increased member engagement, and reduced churn. Expand B2B travel solutions. We seek to expand B2B partnerships across multiple sectors driving incremental transaction revenue.
Since its formation, the Travel + Leisure Charitable Foundation has partnered with the School Board of Orange County, Florida, to create the Travel + Leisure Eatonville scholarship program, which strives to promote educational excellence within the Eatonville community, the oldest African-American-incorporated municipality in the U.S., by providing scholarships to eligible students. 13 Table of Contents Governance For detailed information about our governance practices, see “Governance” in the Proxy Statement for our 2024 Annual Meeting of Shareholders.
Since its formation, the Travel + Leisure Charitable Foundation has partnered with the School Board of Orange County, Florida, to create the Travel + Leisure Eatonville scholarship program, which strives to promote educational excellence within the Eatonville community, the oldest African-American-incorporated municipality in the U.S., by providing scholarships to eligible students.
This strategy remains an integral part of our company culture and is reflected in our global business operations. We prioritize protecting the environment and strengthening the communities where we live and operate. We strive to cultivate an inclusive environment, in which our associates, customers, suppliers, and communities feel appreciated, respected, and valued.
This strategy remains an integral part of our company culture and is reflected in our global business operations. We prioritize protecting the environment and strengthening the communities where we live and operate.
Wyndham Hotels’ employees no longer participate in Travel + Leisure Co.’s plans or programs, and Wyndham Hotels has established plans or programs for their employees as described in the Employee Matters Agreement. 15 Table of Contents Tax Matters Agreement We have a Tax Matters Agreement with Wyndham Hotels that governs the respective rights, responsibilities and obligations of Wyndham Hotels and Travel + Leisure Co. following the Spin-off with respect to tax liabilities and benefits, tax attributes, tax contests and other tax sharing regarding U.S. federal, state, local and foreign income taxes, other tax matters and related tax returns.
Tax Matters Agreement We have a Tax Matters Agreement with Wyndham Hotels that governs the respective rights, responsibilities and obligations of Wyndham Hotels and Travel + Leisure Co. following the Spin-off with respect to tax liabilities and benefits, tax attributes, tax contests and other tax sharing regarding U.S. federal, state, local and foreign income taxes, other tax matters and related tax returns.
BUSINESS DESCRIPTIONS We report results of operations for the following reportable segments, which are described in more detail below: • Vacation Ownership, substantially comprised of Wyndham Destinations. • Travel and Membership , comprised of Exchange and Travel Club. Our business segments generate diversified revenue streams and significant cash flow.
BUSINESS DESCRIPTIONS We report results of operations for the following reportable segments, which are described in more detail below: • Vacation Ownership, substantially comprised of the vacation ownership product lines: Club Wyndham, WorldMark by Wyndham, Margaritaville Vacation Club, and Accor Vacation Club. • Travel and Membership , comprised of Exchange and Travel Club.
Vacation Ownership Overview Our Vacation Ownership reportable segment is substantially comprised of our Wyndham Destinations branded business line, which is the world’s largest vacation ownership business based on number of resorts and owners.
Vacation Ownership Overview Our Vacation Ownership reportable segment is substantially comprised of the vacation ownership product lines: Club Wyndham, WorldMark by Wyndham, Margaritaville Vacation Club, and Accor Vacation Club; and is the world’s largest vacation ownership business based on number of resorts and owners.
In addition, many jurisdictions, including many in the U.S., require that we file detailed registration or offering statements with regulatory authorities disclosing information regarding our VOIs, such as information concerning the intervals being offered, the project, resort or program to which the intervals relate, applicable timeshare plans, evidence of title, details regarding our business, the purchaser’s rights and obligations with respect to such intervals, and a description of the manner in which we intend to offer and advertise such intervals. 9 Table of Contents When we sell VOIs, local law grants the purchaser of a VOI the right to cancel a purchase contract during a specified rescission period following the later of the date the contract was signed or the date the purchaser received the last of the documents required to be provided by us.
In addition, many jurisdictions, including many in the U.S., require that we file detailed registration or offering statements with regulatory authorities disclosing information regarding our VOIs, such as information concerning the intervals being offered, the project, resort or program to which the intervals relate, applicable timeshare plans, evidence of title, details regarding our business, the purchaser’s rights and obligations with respect to such intervals, and a description of the manner in which we intend to offer and advertise such intervals.
RCI is the world’s largest exchange company with 3.5 million members and 4,100 affiliated resorts in its network. Our Travel Club business line includes: our RCI travel club, which seeks to capture a greater share of our members non-exchange travel budgets; and our business-to-business (“B2B”) travel clubs, which offer white-label solutions to associations, organizations, and other closed user groups.
Our Travel Club business line includes: our RCI travel club, which seeks to capture a greater share of our members non-exchange travel budgets; and our business-to-business (“B2B”) travel clubs, which offer private-label solutions to associations, organizations, and other closed user groups.
Our Travel Club business competes more broadly with the larger sector of leisure travel options including traditional travel agents, online travel agents, and travel clubs. INTELLECTUAL PROPERTY Our business is affected by our ability to protect against infringement of our intellectual property, including our trademarks, service marks, logos, trade names, domain names, and other proprietary rights.
INTELLECTUAL PROPERTY Our business is affected by our ability to protect against infringement of our intellectual property, including our trademarks, service marks, logos, trade names, domain names, and other proprietary rights.
Competition Our global exchange business competes with other vacation exchange companies, most notably Interval International, certain timeshare developers, and clubs that offer vacation exchange through their own internal networks of properties. This business also competes with third-party internet travel intermediaries and peer-to-peer online networks that are used by consumers to search for and book their resort and other travel accommodations.
Competition Our global exchange business competes with other vacation exchange companies, most notably Interval International, certain timeshare developers, and clubs that offer vacation exchange through their own internal networks of properties.
We promote four competencies for all associates: Customer Obsession, Decision Velocity, Transparency, and Empowerment. Associates are encouraged to master these competencies through individual development plans, performance reviews, and training.
Our internal pipeline of talent is strengthened by our ability to help associates develop knowledge, skills, and a network of supporters throughout their career. We promote four competencies for all associates: Customer Obsession, Decision Velocity, Transparency, and Empowerment. Associates are encouraged to master these competencies through individual development plans, performance reviews, and training.
We strive to cultivate an inclusive environment which enables people to be their authentic selves, and where each associate feels appreciated, respected, and valued as a contributor at every level within the organization. • Our inclusive talent acquisition strategy focuses on developing a diverse pipeline of candidates that includes applicants from a variety of backgrounds, cultures, and experiences.
We understand that a culture of rich inclusion and diversity enhances our performance and fortifies our ability to serve our customers. We strive to cultivate an inclusive environment which enables people to be their authentic selves, and where each associate feels appreciated, respected, and valued as a contributor at every level within the organization.
On July 31, 2006, Cendant distributed all of the shares of its subsidiary, Wyndham Worldwide Corporation (“Wyndham Worldwide”), to the holders of Cendant common stock.
On July 31, 2006, Cendant distributed all of the shares of its subsidiary, Wyndham Worldwide Corporation (“Wyndham Worldwide”), to the holders of Cendant common stock. 3 Table of Contents On August 1, 2006, we commenced “regular way” trading on the New York Stock Exchange (“NYSE”) under the symbol WYN.
News’ Best Companies to Work For, • Newsweek’s lists of both World’s Most Trustworthy Companies and Most Trustworthy Companies in America, • National Veteran-Owned Business Association’s Best Corporations for Veteran’s Business Enterprises, • National LGBT Chamber of Commerce’s “Best-of-the-Best” Corporations, • National Business Inclusion Consortium’s (“NBIC”) Top 50 Best-of-the-Best Corporations for Inclusion, and the • Human Rights Campaign’s 2023-2024 Equality 100 award for leaders in LGBTQ+ workplace inclusion.
News’ Best Companies to Work For, • Newsweek’s Most Trustworthy Companies in America, • Newsweek’s list of America’s Most Responsible Companies, • National Veteran-Owned Business Association’s Best Corporations for Veteran’s Business Enterprises, and the • National Business Inclusion Consortium’s (“NBIC”) Top 50 Best-of-the-Best Corporations for Inclusion.
Our programs allow us to market and sell our vacation ownership products in variable quantities and to offer existing owners “upgrade” sales to supplement their existing VOIs. During 2023, we entered into an agreement to acquire the rights to the vacation ownership business of Sports Hospitality Ventures, LLC (“SHV”), a hotel and resorts licensee for the Sports Illustrated brand.
Our programs allow us to market and sell our vacation ownership products in variable quantities and to offer existing owners “upgrade” sales to supplement their existing VOIs. In 2023, we introduced a new concept for a network of sports-themed resort and lifestyle complexes in popular college towns and leisure destinations under the Sports Illustrated Resorts brand.
Travel Club offers discount travel to consumers as well as custom travel technology solutions to B2B affinity partners including large employers, banks and retailers, trade associations and others via their operations in the U.S. and Mexico.
Travel Club offers discount travel to consumers as well as custom travel technology solutions to B2B affinity partners including large employers, banks and retailers, trade associations and others via their operations in the U.S. and Mexico. 7 Table of Contents Strategies Our goal is to grow our cornerstone vacation exchange business, optimize cash flow, and broaden our reach into the leisure travel markets to accelerate overall growth for the segment through our travel clubs.
On August 1, 2006, we commenced “regular way” trading on the New York Stock Exchange (“NYSE”) under the symbol WYN. 3 Table of Contents On May 31, 2018, we established Wyndham Destinations, Inc. and completed the spin-off of our hotel business (“Spin-off”) into a separate publicly traded company, Wyndham Hotels & Resorts, Inc. (“Wyndham Hotels”).
On May 31, 2018, we established Wyndham Destinations, Inc. and completed the spin-off of our hotel business (“Spin-off”) into a separate publicly traded company, Wyndham Hotels & Resorts, Inc. (“Wyndham Hotels”). This transaction was effected through a pro rata distribution of the new hotel entity’s stock to shareholders of Wyndham Worldwide (the “Distribution”).
Revenues and Operating Statistics Travel and Membership derives the majority of its revenues from annual membership dues and fees for facilitating exchange and non-exchange transactions and other travel accommodations and services.
We offer private-label solutions to associations, organizations, and other closed-user groups in order for these groups to offer travel benefits to their communities which increases engagement and loyalty. Revenues and Operating Statistics Travel and Membership derives the majority of its revenues from annual membership dues and fees for facilitating exchange and non-exchange transactions and other travel accommodations and services.
In addition, at certain newly-developed resorts, we may enter into subsidy agreements with the property owners’ associations to cover costs that otherwise would be covered by annual maintenance fees payable with respect to VOIs that have not yet been sold. 6 Table of Contents Seasonality We rely, in part, upon tour flow to generate sales of VOIs; consequently, sales volume tends to increase in the spring and summer months as a result of greater tour flow from travelers, generally resulting in higher revenue from sales of VOIs in the third quarter than in other quarters.
Seasonality We rely, in part, upon tour flow to generate sales of VOIs; consequently, sales volume tends to increase in the spring and summer months as a result of greater tour flow from travelers, generally resulting in higher revenue from sales of VOIs in the third quarter than in other quarters.
This business line is included in the Vacation Ownership segment. Strategies Our goal is to strengthen our leadership position in the vacation ownership industry and generate consistent and long-term value for our shareholders.
We are still early in the development of the Sports Illustrated Resorts portfolio. We anticipate developing properties in this portfolio using an asset-light development financing model. Strategies Our goal is to strengthen our leadership position in the vacation ownership industry and generate consistent and long-term value for our shareholders.
Employee Development We seek to attract and retain top talent through our commitment to shared values and competencies, and the development of each associate as an integral contributor to our business and our culture. Our internal pipeline of talent is strengthened by our ability to help associates develop knowledge, skills, and a network of supporters throughout their career.
Less than 1% of our associates are subject to collective bargaining agreements governing their employment with our company. 10 Table of Contents Employee Development We seek to attract and retain top talent through our commitment to shared values and competencies, and the development of each associate as an integral contributor to our business and our culture.
In 2023, we generated 42% of our revenues from the sale of vacation ownership interests, and 44% from our fee-for-service revenue streams. Our businesses have both domestic and international operations. During 2023, we derived 89% of our revenues in the United States (“U.S.”) and 11% internationally.
Our business segments generate diversified revenue streams and significant cash flow. In 2024, we generated 45% of our revenues from the sale of vacation ownership interests, 42% from our fee-for-service revenue streams, 12% from our consumer financing revenue stream, and 1% from other ancillary revenue streams. Our businesses have both domestic and international operations.
Travel + Leisure Co. has the following segments: • Vacation Ownership includes our Wyndham Destinations business line, which is the world’s largest vacation ownership company with 804,000 owners and more than 245 vacation club resort locations. • Travel and Membership includes our Exchange and Travel Club business lines.
Travel + Leisure Co. has the following segments: • Vacation Ownership includes the world’s largest vacation ownership business with 809,000 owners and more than 270 vacation club resort locations. We provide vacation ownership experiences under some of the most popular hospitality and leisure brands, including Club Wyndham, Margaritaville Vacation Club, and Accor Vacation Club.
For further details on our segment revenues, profits, assets and geographical operations, see Note 23— Segment Information to the Consolidated Financial Statements. VACATION OWNERSHIP Industry The vacation ownership industry, also referred to as the timeshare industry, enables consumers to share ownership of fully-furnished vacation accommodations.
VACATION OWNERSHIP Industry The vacation ownership industry, also referred to as the timeshare industry, enables consumers to share ownership of fully-furnished and professionally managed vacation accommodations.
Of our global associates 14,900 support Vacation Ownership, 1,900 support Travel and Membership, and 2,200 comprise our corporate group. Less than 1% of our associates are subject to collective bargaining agreements governing their employment with our company.
Of our global associates 15,900 support Vacation Ownership, 1,800 support Travel and Membership, and 1,300 comprise our corporate group.
Our Full Circle strategy is recognized through the prestigious honors we have earned, including: • Fortune magazine’s World’s Most Admired Companies, • U.S.
We strive to cultivate an inclusive environment, in which our associates, customers, suppliers, and communities feel appreciated, respected, and valued. 11 Table of Contents Our Full Circle strategy is recognized through the prestigious honors we have earned, including: • Fair360’s (formerly DiversityInc) Top 50 Companies for Inclusive Workplaces, • Fortune magazine’s World’s Most Admired Companies, • Forbes’ America’s Best Large Employers, • U.S.
This transaction was effected through a pro rata distribution of the new hotel entity’s stock to shareholders of Wyndham Worldwide (the “Distribution”). In connection with the Spin-off, we entered into certain agreements with Wyndham Hotels. See “ Key Agreements Related to the Spin-Off ” for more information.
In connection with the Spin-off, we entered into certain agreements with Wyndham Hotels. See “ Key Agreements Related to the Spin-Off ” for more information. On January 5, 2021, we acquired the Travel + Leisure brand and all related assets from Dotdash Meredith (formerly Meredith Corporation).
We are continuously monitoring climate change risks and taking actions to mitigate impacts, as deemed appropriate. Inclusion & Diversity We understand that a culture of rich inclusion and diversity enhances our performance and fortifies our ability to serve our customers.
We are continuously monitoring climate change risks and taking actions to mitigate impacts, as deemed appropriate. Philanthropy With a focus on improving the lives of children and families through vacations, we support charitable organizations with a similar focus and mission.
Removed
This fee typically covers expenses such as housekeeping, landscaping, taxes, insurance, resort labor, a management fee payable to the management company, and an assessment to fund a reserve account used to renovate, refurbish and replace furnishings, appliances, and common areas and other assets, such as structural elements and equipment, as needed over time.
Added
The business is developing a new experiential product celebrating the Sports Illustrated brand in the U.S. • Travel and Membership includes our Exchange and Travel Club business lines. RCI is the world’s largest exchange company with 3.4 million members and 3,600 affiliated resorts in its network.
Removed
Strategies Our goal is to grow our cornerstone vacation exchange business, optimize cash flow, and broaden our reach into the leisure travel markets to accelerate overall growth for the segment through our travel clubs.
Added
During 2024, we derived 88% of our revenues in the United States (“U.S.”) and 12% internationally. For further details on our segment revenues, expenses, profits, assets, and geographical operations, see Note 23— Segment Information to the Consolidated Financial Statements.
Removed
We seek to expand B2B partnerships across multiple sectors driving incremental transaction revenue. We offer white-label solutions to associations, organizations, and other closed-user groups in order for these groups to offer travel benefits to their communities which increases engagement and loyalty.
Added
In addition, at certain newly-developed resorts, we may enter into subsidy agreements with the property owners’ associations to cover costs that otherwise would be covered by annual maintenance fees payable with respect to VOIs that have not yet been sold. We utilize rental channels to monetize the unsold VOIs to assist in offsetting a portion of such fees.
Removed
This includes women, diverse ethnicities, veterans, LGBTQIA+, those with disabilities, generational diversity, and more. • Our Global Inclusion and Diversity Council (“GIDC”) is comprised of a CEO-led team of diverse senior and executive leaders representing our worldwide operations.
Added
Any income earned from these monetization activities is recorded as a reduction of the associated expense.
Removed
The mission of the GIDC is to foster, cultivate, and design actions to strengthen our culture and global communities, through inclusion, equitable opportunities, and social justice. • We host voluntary, associate-led Diversity Resource Groups (“DRGs”) for our Asian/Pacific Islander, Black/African American, Hispanic/Latinx, LGBTQIA+, Veteran, and Women associates.
Added
This business 8 Table of Contents also competes with third-party internet travel intermediaries and peer-to-peer online networks that are used by consumers to search for and book their resort and other travel accommodations. Our Travel Club business competes more broadly with the larger sector of leisure travel options including traditional travel agents, online travel agents, and travel clubs.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

77 edited+16 added−17 removed76 unchanged
Biggest changeOur business is subject to numerous business, financial, operating and other risks common to the timeshare industry and the leisure travel industry more broadly, such as adverse changes with respect to any of the following: • consumer travel and vacation patterns and consumer preferences; • increased or unanticipated operating costs, including as a result of recent inflationary pressures, and which may not be offset on a timely basis, or at all, by our ability or actions to increase our product pricing or maintenance fees; • increased energy costs, labor shortages and increased labor costs as well as increases in minimum wage and health-care related costs, which may not be fully offset by price or fee increases in our business or otherwise; 19 Table of Contents • product and supply chain disruptions; • desirability of geographic regions where resorts in or affiliated with our businesses are located; • the supply and demand for exchange services and products, and travel subscription services and products; • our ability to accurately plan for, predict, and satisfy future timeshare inventory needs, which can be adversely impacted by events and occurrences that affect vacation ownership tours and VOI sales, such as the COVID-19 pandemic, as well as timely acquire and balance our supply of new and existing timeshare properties with consumer demand for those properties; • our ability to continue to attract customers for VOI purchases and upgrades at the levels we expect; • our ability to operate our affiliated resorts and conduct tours of our properties; • seasonality in our businesses, which may cause fluctuations in our operating results; • the availability of acceptable financing and the cost of capital as they apply to us, our customers, our RCI affiliates and other developers of vacation ownership resorts and timeshare property owner associations; • the quality of the services provided by affiliated resorts and properties in our exchange business or resorts in which we sell VOIs or by participants in the Wyndham Rewards loyalty program, which may adversely affect our image, reputation and brand value; • success of any actions we may take to increase our exchange membership levels; • our ability to develop and maintain relationships with marketing partners; • market perception of the timeshare industry and our ability to effectively respond to any reputational issues that may arise from negative publicity from social media postings or media reports, which could damage our brands; • our ability to develop and maintain positive relations and contractual arrangements with VOI owners, current and potential vacation exchange members, resorts with units that are exchanged through our exchange business and timeshare property owner associations; • organized labor activities and associated litigation; • adverse economic factors impacting the financial health of customers, which has impaired and could continue to impair our ability to collect outstanding fees or other amounts due or otherwise exercise our contractual rights; • our effectiveness in keeping pace with technological developments (including with respect to social media platforms) as well as any failure to timely upgrade our technology infrastructure and efficiently manage upgrade projects to achieve our strategic planning expectations and to meet changing customer preferences and customer interfacing needs; • our ability to effectively use data to achieve market intelligence and develop, manage and grow our core operations and strategic initiatives using such data and market intelligence; • our ability to offer acceptable customer pricing for products and services, including in a time of economic uncertainty and higher borrowing costs; • our ability to identify, obtain, train and retain industry specific talent (including digital, sales, marketing, and operational leadership skills) to execute our growth strategy and to address customer satisfaction; • disruptions, including non-renewal or termination of agreements, in relationships with third parties (including marketing alliances, loyalty programs and other affiliations with third parties, including Wyndham Hotels); • owners or other developers that have development advance notes with us, or who have received loans or other financial arrangements incentives from us, who have experienced and may continue to experience financial difficulties ; • decrease in the supply of available exchange accommodations due to, among other reasons, a decrease in inventory included in the system (including as a result of severe weather events, including in 2022 and 2023, ongoing property renovations or a decrease in member deposits) could adversely affect our exchange business; • the viability of property owners' associations that we manage and the maintenance and refurbishment of vacation ownership properties, which depend on property owners associations levying sufficient maintenance fees and the ability of members to pay such maintenance fees, particularly in times of economic downturn; • decrease in or delays or cancellations of planned or future development or refurbishment projects, whether due to budgetary constraints of property owners’ associations or otherwise, and the complexity with regard to removing properties from timeshare regimes when they can no longer be sustainably maintained; • increases in maintenance fees, which could cause our product to become less attractive or less competitive; • the level of unlawful or deceptive third-party VOI resale schemes, which could damage our reputation and brand value; 20 Table of Contents • difficulties associated with obtaining required approvals to develop vacation ownership properties, liability under state and local laws with respect to any construction defects in the vacation ownership properties we develop, and risks related to real estate project development costs and completion; • private resale of VOIs and the sale of VOIs on the secondary market, which could adversely affect our vacation ownership resorts and exchange business; • disputes with owners of VOIs, property owners associations, and vacation exchange affiliation partners, which may result in litigation and the loss of management contracts; • laws, regulations and legislation internationally and domestically, and on a federal, state or local level, concerning the leisure travel industry, which may make the operation of our business more onerous, more expensive or less profitable; • our failure or inability to adequately protect and maintain our trademarks and other intellectual property rights; and • consumers increased use of third-party internet travel intermediaries and peer-to-peer online networks to search for and book their lodging accommodations, which could adversely affect our vacation ownership and vacation exchange brands, travel subscription businesses, reservation systems, bookings and rates.
Biggest changeOur business is subject to numerous business, financial, operating and other risks common to the timeshare industry and the leisure travel industry more broadly, such as adverse changes with respect to any of the following: • consumer travel and vacation patterns and consumer preferences; • increased or unanticipated operating costs, including as a result of recent inflationary pressures, and which may not be offset on a timely basis, or at all, by our ability or actions to increase our product pricing or maintenance fees; • increased energy costs, labor shortages and increased labor costs as well as increases in minimum wage and health-care related costs, which may not be fully offset by price or fee increases in our business or otherwise; • product and supply chain disruptions; • desirability of geographic regions where resorts in or affiliated with our businesses are located; • the supply and demand for exchange services and products, and travel subscription services and products; • our ability to accurately plan for, predict, and satisfy future timeshare inventory needs, including through development of new properties, and optimally manage the amount of developer owned inventory we hold for sale, which has been and may in the future be adversely impacted by events and occurrences that affect vacation ownership tours and VOI sales, such as COVID-19 or other pandemics or health-related concerns; • our ability to continue to attract customers for VOI purchases and upgrades at the levels we expect; • our ability to operate our managed resorts and conduct tours of our properties; • seasonality in our businesses, which may cause fluctuations in our operating results; • the availability of acceptable financing and the cost of capital as they apply to us, our customers, our RCI affiliates and other developers of vacation ownership resorts and timeshare property owner associations; • the quality of the services provided by affiliated resorts and properties in our exchange business or resorts in which we sell VOIs or by participants in the Wyndham Rewards loyalty program, which may adversely affect our image, reputation and brand value; • success of any actions we may take to increase our exchange membership levels; • our ability to develop and maintain relationships with marketing partners, including our Blue Thread marketing relationship with Wyndham Hotels; 19 Table of Contents • market perception of the timeshare industry and our ability to effectively respond to any reputational or brand issues that may arise from negative publicity from social media postings or media reports, which could damage our brands; • our ability to develop and maintain positive relations and contractual arrangements with VOI owners, current and potential vacation exchange members, resorts with units that are exchanged through our exchange business and timeshare property owner associations; • organized labor activities and associated litigation; • adverse economic factors impacting the financial health of customers, which has impaired and could continue to impair our ability to collect outstanding fees or other amounts due or otherwise exercise our contractual rights; • our effectiveness in keeping pace with technological developments as well as any failure to timely upgrade our technology infrastructure and efficiently manage upgrade projects to achieve our strategic planning expectations and to meet changing customer preferences and customer interfacing needs; • our effectiveness with positive messaging, through social media platforms, our brand and our timeshare resorts and those resorts with which our exchange members may exchange vacation interests, and our ability to effectively respond to any negative messaging or comments on social media; • our ability to effectively use data to achieve market intelligence and develop, manage and grow our core operations and strategic initiatives using such data and market intelligence; • our ability to offer acceptable customer pricing for products and services, including in a time of economic uncertainty and higher borrowing costs; • our ability to identify, obtain, train and retain industry specific talent (including digital, sales, marketing, and operational leadership skills) to execute our growth strategy and to address customer satisfaction; • disruptions, including non-renewal or termination of agreements, in relationships with third parties (including marketing alliances, loyalty programs and other affiliations with third parties, including Wyndham Hotels); • owners or other developers that have advance notes with us, or who have received loans or other financial arrangements incentives from us, who have experienced and may continue to experience financial difficulties; • decrease in the supply of available exchange accommodations due to, among other reasons, a decrease in inventory included in the system (including as a result of extreme weather events such as have occurred in our geographic markets in recent years, ongoing property renovations or a decrease in member deposits) could adversely affect our exchange business; • the viability of property owners’ associations and the maintenance and refurbishment of vacation ownership properties that we manage, which depend on property owners’ associations levying sufficient maintenance fees and the ability of members to pay such maintenance fees, particularly in times of economic downturn; • decrease in or delays or cancellations of planned or future development or refurbishment projects, whether due to budgetary constraints of property owners’ associations or otherwise, and the complexity with regard to removing properties from timeshare regimes when they can no longer be sustainably maintained; • increases in maintenance fees, which could cause our product to become less attractive or less competitive; • the level of unlawful or deceptive third-party VOI resale schemes, which could damage our reputation and brand value; • the cost to develop vacation ownership properties and difficulties associated with obtaining required approvals in connection with development, liability under state and local laws with respect to any construction defects in the vacation ownership properties we develop, and risks related to real estate project development costs and completion; • private resale of VOIs and the sale of VOIs on the secondary market, which could adversely affect our vacation ownership resorts, the prices at which we sell VOIs, and our exchange business; • disputes with owners of VOIs, property owners’ associations, and vacation exchange affiliation partners, which may result in litigation and the loss of management contracts; • laws, regulations and legislation internationally and domestically, and on a federal, state or local level, concerning the leisure travel industry, which may make the operation of our business more onerous, more expensive or less profitable; • our failure or inability to adequately protect and maintain our trademarks and other intellectual property rights; and • consumers increased use of third-party internet travel intermediaries and peer-to-peer online networks to search for and book their lodging accommodations, which could adversely affect our vacation ownership and vacation exchange brands, travel clubs and travel subscription businesses, reservation systems, bookings and rates.
The trading price of our common stock may continue to fluctuate depending upon many factors, some of which may be beyond our control, including our quarterly or annual earnings or those of other companies in our industry; customer acceptance and success of our strategic growth initiatives; actual or anticipated fluctuations in our operating results due to seasonality, economic conditions, including increased inflation and higher interest rates, and other factors related to our business; our credit ratings; announcements by us or our competitors of significant acquisitions or dispositions; lower than expected earnings or revenues or outlook for such financial measures, changes in earnings or revenues estimates by us or by securities analysts or our ability to meet those estimates; the operating and stock price performance of comparable companies; and overall market fluctuations.
The trading price of our common stock may continue to fluctuate depending upon many factors, some of which may be beyond our control, including our quarterly or annual earnings or earnings outlook or those of other companies in our industry; customer acceptance and success of our strategic growth initiatives; actual or anticipated fluctuations in our operating results due to seasonality, economic conditions, including increased inflation and higher interest rates, and other factors related to our business; our credit ratings; announcements by us or our competitors of significant acquisitions or dispositions; lower than expected earnings or revenues or outlook for such financial measures, changes in earnings or revenues estimates by us or by securities analysts or our ability to meet those estimates; the operating and stock price performance of comparable companies; and overall market fluctuations.
The success of our acquisitions is also subject to other risks, including, among others: • failure to realize expected technological and product synergies, economies of scale and cost reductions; • unforeseen expenses, delays or conditions related to the transactions, including those due to regulations; • adverse effects on existing business relationships with customers, partners, employees or suppliers; • potential dilutive issuances of equity securities in payment of the acquisition price; • risks associated with entering into markets in which we have limited or no prior experience such as the college sports community and environment, including less visibility into demand; • inaccurate assumptions regarding the acquired business or integration process; • financial and operational results that may differ materially from our assumptions and forecasts; • unforeseen difficulties that may arise in integrating operations, processes and systems; • higher than expected investments that may be required to implement necessary compliance processes and related systems, including information technology systems, accounting systems and internal control over financial reporting; • failure to retain, motivate and integrate any key management and other employees of the acquired business; • higher than expected costs or other impacts resulting from unforeseen changes in tax, trade, environmental or other regulations in jurisdictions in which the acquired business conducts its operations; and • issues with retaining customers and integrating customer bases.
The success of our acquisitions is also subject to other risks, including, among others: • failure to realize expected technological and product synergies, economies of scale and cost reductions; • unforeseen expenses, delays or conditions related to the transactions, including those due to regulations; • adverse effects on existing business relationships with customers, partners, employees or suppliers; • potential dilutive issuances of equity securities in payment of the acquisition price; • risks associated with entering into markets in which we have limited or no prior experience such as the college sports community and environment, including less visibility into demand; • inaccurate assumptions regarding the acquired business or integration process; • financial and operational results that may differ materially from our assumptions and forecasts, including higher than expected development costs; • unforeseen difficulties that may arise in integrating operations, processes and systems; • higher than expected investments that may be required to implement necessary compliance processes and related systems, including information technology systems, accounting systems and internal control over financial reporting; • failure to retain, motivate and integrate any key management and other employees of the acquired business; • higher than expected costs or other impacts resulting from unforeseen tax, trade, environmental or other regulations in jurisdictions in which the acquired business conducts its operations; and • issues with retaining customers and integrating customer bases.
We compete based on brand name recognition and reputation, lifetime value, location and the availability of desirable development sites for new vacation ownership properties, convenience, quality of accommodations, evolving customer travel preferences, service levels, amenities, customer loyalty and flexibility.
We compete based on brand name recognition and reputation, lifetime value, location and the availability of desirable development sites for new vacation ownership properties, convenience, quality of accommodations, evolving customer travel preferences, service levels, cost, amenities, customer loyalty and flexibility.
As a consequence, the security measures we deploy are not perfect or impenetrable, and we may be unable to anticipate or prevent all unauthorized access attempts made on our systems or those of our third-party service providers.
As a consequence, the security measures we deploy are not perfect or impenetrable, and we may likely be unable to anticipate or prevent all unauthorized access attempts made on our systems or those of our third-party service providers.
We are, and may be in the future, subject to regulatory inquiries and investigations from time to time arising under laws and regulations applicable to our business, including, among others, those governing timeshare (including required government registrations), consumer financings and 25 Table of Contents other lending, information security, data protection and privacy, credit card and payment card security standards, marketing, sales, consumer protection and advertising, unfair and deceptive trade practices, fraud, bribery and corruption, telemarketing (including do-not-call and call-recording regulations), licensing, labor, employment, anti-discrimination, health care, health and safety, accessibility, immigration, gaming, environmental (including climate change) and remediation, intellectual property, securities, stock exchange listing, accounting, tax and regulations applicable under the Dodd-Frank Act, Office of Foreign Asset Control, Americans with Disabilities Act, the Sherman Act, the Foreign Corrupt Practices Act and local equivalents in international jurisdictions (including the United Kingdom Bribery Act).
We are, and may be in the future, subject to regulatory inquiries and investigations from time to time arising under laws and regulations applicable to our business, including, among others, those governing timeshare (including required government registrations), consumer financings and other lending, information security, data protection and privacy, credit card and payment card security standards, marketing, sales, consumer protection and advertising, unfair and deceptive trade practices, fraud, bribery and corruption, telemarketing (including do-not-call and call-recording regulations), licensing, labor, employment, anti-discrimination, health care, health and safety, accessibility, immigration, gaming, environmental (including climate change) and remediation, intellectual property, securities, stock exchange listing, accounting, tax and regulations applicable under the Dodd-Frank Act, Office of Foreign Asset Control, Americans with Disabilities Act, the Sherman Act, and the Foreign Corrupt Practices Act and local equivalents in international jurisdictions (including the United Kingdom Bribery Act).
Continued geopolitical turmoil (including the ongoing conflict between Russia and Ukraine and the ongoing conflict in the Middle East) has heightened the risk of cyber-attacks. We have experienced and likely will continue to experience, such cyber-attacks.
Continued geopolitical turmoil (including the ongoing conflict between Russia and Ukraine and the ongoing conflicts in the Middle East) has heightened the risk of cyber-attacks. We have experienced and likely will continue to experience, such cyber-attacks.
Our ability to sell securities backed by our VOCRs depends on the continued ability and willingness of capital market participants to invest in such securities, which may be negatively affected by economic conditions, the credit quality of our VOCRs pools, and other market dynamics; • breach of portfolio performance triggers under securitization transactions which if violated may result in a disruption or loss of cash flow from such transactions; • a reduction in commitments from surety bond providers, which may impair our Vacation Ownership business by requiring us to escrow cash in order to meet regulatory requirements of certain states; • prohibitive or increased cost, or inadequate availability, of capital could restrict the development or acquisition of vacation ownership resorts by us and the financing of purchases of VOIs; • increases in interest rates on consumer financing to VOI purchasers could diminish our VOI sales; and • disruptions in the U.S. or global financial markets, and the failure of financial institutions that support our credit facilities, general economic conditions and market liquidity factors outside of our control, which may limit our access to short- and long-term financing, credit and capital.
Our ability to sell securities backed by our VOCRs depends on the continued ability and willingness of capital market participants to invest in such securities, which may be negatively affected by economic conditions, the credit quality of our VOCRs pools, and other market dynamics; • breach of portfolio performance triggers under securitization transactions which if violated may result in a disruption or loss of cash flow from such transactions; • a reduction in commitments from surety bond providers, which may impair our Vacation Ownership business by requiring us to escrow cash in order to meet regulatory requirements of certain states; • prohibitive or increased cost, or inadequate availability, of capital could restrict the development or acquisition of vacation ownership resorts by us or by our third-party developers and as well as the financing of purchases of VOIs; • increases in interest rates on consumer financing to VOI purchasers could diminish our VOI sales; and • disruptions in the U.S. or global financial markets, and the failure of financial institutions that support our credit facilities, general economic conditions and market liquidity factors outside of our control, which may limit our access to short- and long-term financing, credit and capital.
Our international operations are subject to numerous risks, including exposure to local economic conditions; potential adverse changes in the diplomatic relations of foreign countries with the U.S.; hostility from local populations; political instability; threats or acts of war, hostilities, or terrorism; the presence and acceptance of varying levels of business corruption in international markets and the effect of various anti-corruption and other laws; restrictions and taxes on the withdrawal of foreign investment and earnings; government policies against businesses or properties owned by non-U.S. citizens; investment restrictions or requirements; diminished ability to legally enforce our contractual rights in foreign countries; forced nationalization of assets by local, state or national governments; foreign exchange restrictions; fluctuations in foreign currency exchange rates, including negative impacts of the weakening of foreign currencies in geographic regions in which we operate relative to the U.S. dollar; our ability to, or our decision whether or not in particular instances to, hedge against foreign currency effects, and whether we are successful in any such hedging transactions; conflicts between local laws and U.S. laws including laws that impact our rights to protect our intellectual property; withholding and other taxes on remittances and other payments by subsidiaries; and changes in and application of foreign taxation structures including value added taxes.
Our international operations are subject to numerous risks, including exposure to local economic conditions; potential adverse changes in the diplomatic relations of foreign countries with the U.S.; hostility from local populations; potential changes in the regulation of timeshare products by foreign countries, such as occurred in Australia; political instability; threats or acts of war, hostilities, or terrorism; the presence and acceptance of varying levels of business corruption in international markets and the effect of various anti-corruption and other laws; restrictions and taxes on the withdrawal of foreign investment and earnings; government policies against businesses or properties owned by non-U.S. citizens; investment restrictions or requirements; diminished ability to legally enforce our contractual rights in foreign countries; forced nationalization of assets by local, state or national governments; foreign exchange restrictions; fluctuations in foreign currency exchange rates, including negative impacts of the weakening of foreign currencies in geographic regions in which we operate relative to the U.S. dollar; our ability to, or our decision whether or not in particular instances to, hedge against foreign currency effects, and whether we are successful in any such hedging transactions; conflicts between local laws and U.S. laws including laws that impact our rights to protect our intellectual property; withholding and other taxes on remittances and other payments by subsidiaries; and changes in and application of foreign taxation structures including value added taxes.
These risks and uncertainties include requiring us to utilize and augment human capital and other resources beyond those required by our historic business offerings to source and establish relationships with new partners and to develop and market vacation ownership resorts, products, and services that meet the demands of new consumers.
These risks and uncertainties include requiring us to utilize and augment human capital and other resources beyond those required by our historical business offerings to source and establish relationships with new partners and to develop and market vacation ownership resorts, products, and services that meet the demands of new consumers.
If we are unable to maintain a good relationship with Wyndham Hotels, or if Wyndham Hotels does not perform its obligations under these agreements, fails to protect the trademarks, trade names and intellectual property that we 26 Table of Contents license from it or if these brands deteriorate or materially change in an adverse manner, or the reputation of these brands declines, our brand may be negatively affected, our profitability and revenues could decrease and our growth potential may be adversely affected.
If we are unable to maintain a good relationship with Wyndham Hotels, or if Wyndham Hotels does not perform its obligations under these agreements, fails to protect the trademarks, trade names and intellectual property that we license from it or if these brands deteriorate or materially change in an adverse manner, or the reputation of these brands declines, our brand may be negatively affected, our profitability and revenues could decrease and our growth potential may be adversely affected.
Acquisitions, dispositions and other strategic transactions may not prove successful and could result in operating difficulties. We regularly consider a wide array of potential acquisitions and other strategic transactions, including acquisitions of businesses and real property, joint ventures, business combinations, strategic investments and dispositions. Any of these transactions could be material to our business.
Acquisitions, dispositions and other strategic transactions may not prove successful and could result in operating difficulties. We regularly consider a wide array of potential acquisitions and other strategic transactions, including acquisitions of businesses and real property, brand licensing transactions, joint ventures, business combinations, strategic investments and dispositions. Any of these transactions could be material to our business.
Our B2B travel clubs business is largely dependent on the success of marketing efforts to closed user groups through partner brands and the subsequent propensity of the members of those groups to use the platform for their travel bookings and upgrade to receive premium services.
Our B2B white label travel clubs business is largely dependent on the success of marketing efforts to closed user groups through partner brands and the subsequent propensity of the members of those groups to use the platform for their travel bookings and upgrade to receive premium services.
See Note 27— Transactions with Former Parent and Former Subsidiaries to the Consolidated Financial Statements for a description of our obligations related to Wyndham Hotels. If Wyndham Hotels was to default on its obligations, we would be required to pay the amounts in default.
See Note 27— Transactions with Former Parent and Former Subsidiaries to the Consolidated Financial Statements for a description of our obligations related to Wyndham Hotels. If Wyndham Hotels were to default on its obligations, we would be required to pay the amounts in default.
In addition, any such cyber-attacks could persist for an extended period of time without detection, which could have a material adverse effect on our brands, reputation, business, financial condition and results of operations, as well as subject us to significant regulatory actions and fines, litigation, losses, third-party damages and other liabilities.
In addition, any such cyber-attacks could persist for an extended period of time without detection, which could likely have a material adverse effect on our brands, reputation, customer confidence in us, business, financial condition and results of operations, as well as subject us to significant regulatory actions and fines, litigation, losses, third-party damages and other liabilities.
There are a great number of existing competitive travel services, some of which have significantly greater financial, marketing, and other 17 Table of Contents resources than we have, and while the market is currently fragmented, existing travel service companies as well as new entrants may adversely impact our ability to achieve the level of revenues, transactions, and profitability we expect.
There are a great number of existing competitive travel services, some of which have significantly greater financial, marketing, and other resources than we have, and while the market is currently fragmented, existing travel service companies as well as new entrants may adversely impact our ability to achieve the level of revenues, transactions, and profitability we expect.
In connection with 23 Table of Contents our debt obligations, hedging transactions, securitization of certain of our assets, surety bond requirements, the cost and availability of capital and the extension of credit by us, we are subject to numerous risks, including: • the interest rates being charged on recently issued and floating rate corporate debt and securitized debt have increased significantly beginning in 2022 and higher interest costs on our debt may continue in the future, and we may not be able to pass along the full amount of such costs to purchasers of VOIs to whom we provide financing; • our cash flows from operations or available lines of credit may be insufficient to meet required payments of principal and interest, which could result in a default and acceleration of the underlying debt and other debt instruments that contain cross-default provisions; • we may be unable to comply with the terms of the financial covenants under our revolving credit facility or other debt agreements, including a breach of the financial ratio tests, which could result in a default and acceleration of the underlying debt and under other debt and financial instruments that contain cross-default provisions; • our leverage may adversely affect our ability to obtain additional financing on favorable terms or at all; • our leverage requires the dedication of a significant portion of our cash flows to the payment of principal and interest thus reducing the availability of cash flows to fund working capital, capital expenditures, dividends, share repurchases or other operating needs; • negative ratings and/or downgrades of our debt by rating agencies could increase our borrowing costs and prevent us from obtaining additional financing on favorable terms or at all; • failure or non-performance of counterparties to foreign exchange and interest rate hedging transactions could result in losses; • an inability to securitize our vacation ownership loan receivables on terms acceptable to us or at all because of, among other factors, the performance of the vacation ownership loan receivables, adverse conditions in the market for vacation ownership loan-backed notes and asset-backed notes in general, and the risk that the actual amount of uncollectible accounts on our securitized vacation ownership loan receivables and other credit we extend is greater than expected; • our liquidity, as it relates to our vacation ownership contract receivables (“VOCRs”) securitization program, could be adversely affected if we were to fail to renew or replace our conduit facilities on their expiration dates, or if a particular receivables pool were to fail to meet certain ratios, which could occur in certain instances if the default rates or other credit metrics of the underlying VOCRs deteriorate.
In connection with 23 Table of Contents our debt obligations, hedging transactions, securitization of certain of our assets, surety bond requirements, the cost and availability of capital and the extension of credit by us, we are subject to numerous risks, including: • the interest rates being charged on recently issued and floating rate corporate debt and securitized debt have increased significantly beginning in 2022 and higher interest costs on our debt may continue in the future, and although rates have fallen from their peak in 2023, we have not been able to and in the future likely will not be able to pass along the full amount of such costs to purchasers of VOIs to whom we provide financing; • our cash flows from operations or available lines of credit may be insufficient to meet required payments of principal and interest, which could result in a default and acceleration of the underlying debt and other debt instruments that contain cross-default provisions; • we may be unable to comply with the terms of the financial covenants under our revolving credit facility or other debt agreements, including a breach of the financial ratio tests, which could result in a default and acceleration of the underlying debt and under other debt and financial instruments that contain cross-default provisions; • our leverage may adversely affect our ability to obtain additional financing on favorable terms or at all; • our leverage requires the dedication of a significant portion of our cash flows to the payment of principal and interest thus reducing the availability of cash flows to fund working capital, capital expenditures, dividends, share repurchases or other operating needs and capital uses; • negative ratings and/or downgrades of our debt by rating agencies have in the past increased interest rates on some of our debt instruments and if they recur in the future would likely increase our borrowing costs and could prevent us from obtaining additional financing on favorable terms or at all; • failure or non-performance of counterparties to foreign exchange and interest rate hedging transactions could result in losses; • an inability to securitize our vacation ownership loan receivables on terms acceptable to us or at all because of, among other factors, the performance of the vacation ownership loan receivables, adverse conditions in the market for vacation ownership loan-backed notes and asset-backed notes in general, and the risk that the actual amount of uncollectible accounts on our securitized vacation ownership loan receivables and other credit we extend is greater than expected; • our liquidity, as it relates to our vacation ownership contract receivables (“VOCRs”) securitization program, could be adversely affected if we were to fail to renew or replace our conduit facilities on their expiration dates, or if a particular receivables pool were to fail to meet certain ratios, which could occur in certain instances if the default rates or other credit metrics of the underlying VOCRs deteriorate.
As a result of the completion of the Spin-off, Wyndham Hotels agreed to retain one-third of Cendant’s contingent and other corporate liabilities and associated costs; therefore, we are responsible for 25% of these liabilities and costs subsequent to the Spin-off.
As a result of the completion of the Spin-off, Wyndham Hotels agreed to retain one-third of ABG’s contingent and other corporate liabilities and associated costs; therefore, we are responsible for 25% of these liabilities and costs subsequent to the Spin-off.
Further changes to the tax laws may be contemplated both 24 Table of Contents in the U.S. and certain other countries, which could result in materially higher corporate taxes than would be incurred under existing tax law and could otherwise adversely affect our financial condition or results of operations.
Further changes to the tax laws may be contemplated both in the U.S. and certain other countries, which could result in materially higher corporate taxes than would be incurred under existing tax law and could otherwise adversely affect our financial condition or results of operations.
Further, any changes to laws or regulations, including new restrictions or requirements applicable to our business, or an increase in enforcement of existing laws and regulations, such as restricting use or sharing of consumer data, including for marketing or advertising or limiting the use of, limiting our ability to provide certain consumer data to our customers, or otherwise regulating AI and machine learning (including the use of algorithms and automated processing), could expose us to additional costs and liability.
Further, any changes to laws or regulations, including new restrictions or requirements applicable to our business, or an increase in enforcement of existing laws and regulations, such as restricting use or sharing of consumer data, including for marketing or advertising or limiting the use of, limiting our ability to provide certain consumer data to our customers, or otherwise regulating artificial intelligence (“AI”) and machine learning (including the use of algorithms and automated processing), could expose us to additional costs and liability.
In order to compete, we incent potential new owners and existing owners to tour with us to better understand our products and services. New resorts may be constructed and these additions to supply may create new competitors, in some cases without corresponding increases in demand.
In order to compete, we incent potential new owners and existing owners to tour with us to better understand our products and services. New resorts are being constructed and these additions to supply may create new competitors, in some cases without corresponding increases in demand.
The increased scope and complexity of our information 22 Table of Contents technology infrastructure and systems could contribute to the risk of future material security breaches or breakdowns, any of which could have a material adverse impact on our business, brands, reputation, and results of operations.
The increased scope and complexity of our information technology infrastructure and systems could contribute to the risk of future material security breaches or breakdowns, any of which could have a material adverse impact on our business, brands, reputation, and results of operations.
We also must continue to develop appropriate internal and disclosure controls designed to ensure that our disclosed achievements against our environmental goals are accurately reported.
We also must continue to develop appropriate internal and disclosure controls designed such that our disclosed achievements against our environmental goals are accurately reported.
Our success in these leisure travel clubs is also dependent upon our ability to efficiently customize our travel offerings to particular areas of interest and focus on the groups to which we market and promote our services and offerings.
Our success in these leisure travel clubs is also dependent upon our ability to efficiently customize our travel offerings to particular areas of interest and focus on the groups to 16 Table of Contents which we market and promote our services and offerings.
In connection with our business, we and our service providers collect and retain large volumes of certain types of personal and proprietary information pertaining to our guests, shareholders, and employees. Such information includes, but is not limited to, large volumes of guest credit and payment card information, guest travel documents, other identification documents, account numbers, and other personally identifiable information.
In connection with our business, we and our service providers collect and retain large volumes of certain types of personal and proprietary information pertaining to our customers, shareholders, and employees. Such information includes, but is not limited to, large volumes of customer credit and payment card information, customer travel documents, other identification documents, account numbers, and other personally identifiable information.
Any of these factors could increase our costs, reduce our revenues and profitability and otherwise adversely impact our opportunities for growth. Our international operations are subject to additional risks not generally applicable to our domestic operations.
Any of these factors could increase our costs, reduce our revenues and profitability and otherwise adversely impact our opportunities for growth. 20 Table of Contents Our international operations are subject to additional risks not generally applicable to our domestic operations.
We carry insurance for general liability, property, business interruption, cyber security, directors and officers (“D&O”), and other insurable risks with respect to our business operations. We also self-insure for certain risks up to certain monetary limits.
We carry insurance for general liability, property, business interruption, cybersecurity, directors and officers (“D&O”), and other insurable risks with respect to our business operations. We also self-insure for certain risks up to certain monetary limits.
We believe these provisions protect our shareholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with our Board and by providing our Board with more time to assess any acquisition proposal. These provisions are not intended to make us immune from takeovers.
We believe these provisions protect our shareholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with our Board and by providing our Board with 27 Table of Contents more time to assess any acquisition proposal. These provisions are not intended to make us immune from takeovers.
Data breaches and other serious cyber incidents have increased globally, along with the methods, techniques and complexity of attacks, including use of viruses, ransomware and other malicious software, phishing and other efforts to discover and exploit any design flaws, bugs or other security vulnerabilities.
Data breaches and other serious cyber incidents have increased globally, along with the sophistication of the methods and techniques of the intrusions and complexity of the attacks, including use of viruses, ransomware and other malicious software, phishing and other ever-evolving efforts to discover and exploit any design flaws, bugs or other security vulnerabilities.
Following the significant property and casualty losses incurred by the insurance industry due to hurricanes, fires, cyber security breaches and other events, as well as market dynamics (such as those resulting from the recent rapid increase in interest rates), insurance costs have increased and may be higher (and availability may be lower) in future periods.
Following the significant property and casualty losses incurred by the insurance industry due to hurricanes, wildfires, cybersecurity breaches and other events, as well as market dynamics (such as those resulting from the recent rapid increase in interest rates), insurance costs have increased and may be higher (and availability may be lower) in future periods.
Risks affecting the travel industry can be localized events or global in nature and may adversely impact decisions by consumers to use and consume travel services and products, including: economic factors such as economic slowdown and recession; increased cost of living and reduced discretionary income (including due to inflationary pressures and current higher borrowing costs), and potential for increased unemployment rates; terrorist incidents and threats and associated heightened travel security measures; acts of gun violence or threats thereof; war, other hostilities, and political and regional strife (including the risk that the current conflict between Ukraine and Russia or the conflict in the Middle East expands in a manner that significantly impacts our business and operations); natural disasters such as hurricanes, fires, floods, earthquakes, and volcanic eruptions; concerns with high rates of infection, increased governmental regulations or restrictions on and recommendations and warnings against travel in certain regions, and the associated economic disruption due to pandemics, contagious diseases or health epidemics such as occurred during the COVID-19 pandemic; environmental disasters; lengthy power outages; increased pricing, financial instability and capacity constraints of air carriers; airline job actions and strikes; and potential for increases in gasoline and other fuel prices such as experienced in 2022.
Risks affecting the travel industry can be localized events or global in nature and may adversely impact decisions by consumers to use and consume travel services and products, including economic factors such as economic slowdown and recession; increased cost of living and reduced discretionary income (including due to recent and potential future inflationary pressures and higher borrowing costs) and potential for increased unemployment rates; terrorist incidents and threats and associated heightened travel security measures; acts of gun violence or threats thereof; war, other hostilities and political and regional strife (including the risk that the current conflict between Ukraine and Russia or the conflicts in the Middle East expand in a manner that significantly impacts our business and operations); extreme weather conditions and natural disasters; the associated economic disruption due to concerns with high rates of infection, pandemics, contagious diseases or health epidemics, such as occurred during the COVID-19 pandemic, and the related increased governmental regulations or restrictions on and recommendations and warnings against travel in certain regions; lengthy power outages; increased pricing, financial instability and capacity constraints of air carriers; airline job actions and strikes; and potential for increases in gasoline and other fuel prices such as experienced in 2022.
If any party responsible for the liabilities described above were to default on its obligations, each non-defaulting party would be required to pay an equal portion of the amounts in default. Accordingly, we could under certain circumstances be obligated to pay amounts in excess of our share of the assumed obligations related to such liabilities, including associated costs.
If any party responsible for the liabilities described above were to default on its obligations, the non-defaulting parties would be required to pay the amounts in default. Accordingly, we could under certain circumstances be obligated to pay amounts in excess of our share of the assumed obligations related to such liabilities, including associated costs.
Our RCI exchange business depends on vacation ownership developers for new members and on existing members and participants renewing their memberships with us and engaging in exchange and non-exchange transactions.
Our RCI exchange business depends on vacation ownership developers for new members and on existing members and participants renewing their memberships with us and engaging in exchange and travel club transactions.
Although new owner sales levels have recovered from their lows in 2020, there is no assurance that they will continue to grow in the timeframe or at the levels that we expect. Developers and members also supply resort accommodations for use in exchanges.
Although new owner sales levels have recovered from their lows in 2020, there is no assurance that they will continue to result in increased new owner memberships in the timeframe or at the levels that we expect or at all. Developers and members also supply resort accommodations for use in exchanges.
In addition, as we continue to transition from our legacy systems to new, cloud-based technologies and other technology systems, we may continue to face issues that may negatively impact guests, other individuals and third parties.
In addition, as we continue to transition from our legacy systems to new, cloud-based technologies and other technology systems, we will likely continue to face issues that may negatively impact customers, other individuals and third parties.
By design, these networks decrease the propensity of owners to use external vacation ownership exchange programs, such as RCI, which in turn adversely impacts the supply of resort accommodations available for exchange through our exchange networks and reduces our related exchange revenue .
By design, these networks decrease the propensity of owners to continue their membership in and use of external vacation ownership exchange programs, such as RCI, which in turn adversely impacts the supply of resort accommodations available for exchange through our exchange networks and reduces exchange and travel club transactions and our related revenue.
An unfavorable outcome from any tax audit could result in higher tax costs, penalties and interest, thereby adversely affecting our financial condition or results of operations. We are responsible for certain of Cendant's contingent and other corporate liabilities.
An unfavorable outcome from any tax audit could result in higher tax costs, penalties and interest, thereby adversely affecting our financial condition or results of operations. We are responsible for certain of Avis Budget Group, Inc.'s contingent and other corporate liabilities.
Negative public perception regarding our industry resulting from, among other things, consumer complaints regarding sales and marketing practices, consumer financing arrangements, and restrictions on exit related to our products, as well as negative comments on social media, could result in increased regulatory scrutiny, which could result in reputational damage, more onerous laws, regulations, guidelines and enforcement interpretations in jurisdictions in which we operate.
Negative public perception regarding our industry resulting from, among other things, consumer complaints regarding sales and marketing practices, consumer financing arrangements, and restrictions on exit related to our products, as well as negative comments or messaging on social media, could result in increased regulatory scrutiny and negative customer and public perceptions of us and one or more of our brands, which could result in significant reputational damage, more onerous laws, regulations, guidelines and enforcement interpretations in jurisdictions in which we operate.
Concern with climate change may also impact customer preferences for future timeshare purchases, including potential decreased customer preference for geographic areas that may be viewed as subject to increased climate change risk.
Concern with climate change or increased extreme weather events may also impact customer preferences for future timeshare purchases, including potential decreased customer preference for geographic areas that may be viewed as subject to increased risk of extreme weather events.
In addition, as we pursue new initiatives that are designed to improve our operations and cost structure, the expansion and implementation of new technologies and systems (including artificial intelligence (“AI”) technologies) carries significant potential risks, including failure to operate as designed, potential loss of or corruption of information, changes in security processes, implementation delays, and disruption of operations.
In addition, as we pursue new initiatives that are designed to improve our operations and cost structure, the expansion and implementation of new technologies and systems (including our increasing use, and the likely increasing use by our third-party service providers, of artificial intelligence (“AI”) technologies) carries significant potential risks, including failure to operate as designed, potential loss of or corruption of information, changes in security processes, implementation delays, and disruption of operations.
Our travel clubs businesses have required us to utilize and augment human capital and other resources beyond those required by our historic business offerings and, as a result, subject us to greater risks and uncertainties than historically considered for our core timeshare and exchange businesses.
Our travel clubs businesses have required us to utilize and augment human capital and other resources in a manner different from those required by our historical business offerings and, as a result, subject us to greater risks and uncertainties than historically considered for our core timeshare and exchange businesses.
In addition, based on the water risk assessment we conducted in 2023, we identified 53 managed resorts in high or extremely high water-stressed locations.
In addition, based on the water risk assessment we conducted in 2024, we identified 59 managed resorts in high or extremely high water-stressed locations.
We currently are not subject to the 15% minimum tax, but we will continue to monitor as this could change.
We currently are not subject to the 15% 24 Table of Contents minimum tax, but we will continue to monitor as this could change.
Based upon insurable property values as of December 31, 2023, approximately 37% of our managed properties are located in Tier I windstorm exposure areas, 23% are located in high-risk wildfire-prone states, and 20% are located in areas with a high level of flood risk.
Based upon insurable property values as of December 31, 2024, 36% of our managed properties are located in Tier I windstorm exposure areas, 22% are located in high-risk wildfire-prone states, and 20% are located in areas with a high level of flood risk.
Also, the same cyber security threats exist for the third parties with whom we interact and share information, and cyber-attacks on third parties which possess or use our customer, personnel and other information have in the past adversely impacted us in the same way as a direct cyber-attack on us.
Also, the same cybersecurity threats exist for the third parties with whom we interact (such as parties providing us software or services) or share information, and cyber-attacks on third parties with which we interact or which possess, use or have access to our customer, and other information have in the past adversely impacted us in the same way as a direct cyber-attack on us.
Properties in these areas have in the past closed, and may in the future close, due to such extreme weather events and such closures may be extended for prolonged periods following such weather events while any major damage is remedied and/or major renovations are undertaken and completed.
Properties in these areas have in the past closed, and may in the future close, due to such extreme weather events and such closures have been, and in the future may be, extended for prolonged periods following such weather events while major damage is remedied and/or major renovations are undertaken and completed, whether to the resort properties themselves or to the surrounding infrastructure which supports such areas.
Further, Travel + Leisure Co. develops and manages resort properties and provides its exchange and travel club members access to resort properties throughout the world, a portion of which are in areas with greater exposure to the adverse effects of severe weather events and other natural disasters associated with climate change due to their location in coastal areas or states where wildfires are common, which could cause such resorts to suffer greater adverse effects from those events than the leisure travel industry faces in general.
Additionally, increased regulations related to climate change could have an adverse impact on the leisure travel industry generally. 18 Table of Contents Further, Travel + Leisure Co. develops and manages resort properties and provides our exchange and travel club members access to resort properties throughout the world, a portion of which are in areas with greater exposure to the adverse effects of severe weather events and other natural disasters due to their location in coastal areas or states where wildfires are common or have increased in frequency, which could cause such resorts to suffer greater adverse effects from those events than the leisure travel industry faces in general.
These liabilities include those relating to certain of Cendant’s terminated or divested businesses, the Travelport sale, certain Cendant-related litigation, actions with respect to the separation plan and payments under certain contracts that were not allocated to any specific party in connection with the separation.
These liabilities include those relating to certain of ABG’s terminated or divested businesses, including the sale of the North American and European vacation rentals businesses, the Travelport sale, certain ABG-related litigation, actions with respect to the separation plan and payments under certain contracts that were not allocated to any specific party in connection with the separation.
In addition, should we violate or not comply with any applicable laws, regulations, contractual requirements relating to data security and privacy, or with our own privacy and security policies, either intentionally or unintentionally, or through the acts of intermediaries, it could have a material adverse effect on our brands, marketing, reputation, business, financial condition, and results of operations, as well as subject us to significant fines, litigation, losses, third-party damages and other liabilities.
In addition, should we violate or not comply with any applicable laws, regulations, contractual requirements relating to data security and privacy, such as the recently adopted SEC rules requiring public companies to disclose material cybersecurity incidents to which they become subject on a Current Report on Form 8-K, or with our own privacy and security policies, either intentionally or unintentionally, or through the acts of intermediaries, it could have a material adverse effect on our brands, marketing, reputation, business, financial condition, and results of operations, as well as subject us to significant fines, litigation, losses, third-party damages and other liabilities.
While we maintain what we believe are reasonable security controls over personal and proprietary information (including the personal information of guests, shareholders, and employees), breaches of or breakdowns in our systems that result in the theft, loss, fraudulent use or other unauthorized release of personal, confidential or other proprietary information, or other data have occurred in the past and may occur again in the future.
While we maintain what we believe are reasonable security controls over personal and proprietary information (including the personal information of customers, shareholders, and employees), and our information technology staff regularly assesses and identifies vulnerabilities in our information technology and cybersecurity systems and controls, breaches of or breakdowns in our systems that result in the theft, loss, access to, fraudulent use or other unauthorized release of personal, confidential or other proprietary information, source code information, or other data have occurred in the past and may occur in the future.
Current and future international operations expose us to additional challenges and risks that may not be inherent in operating solely in the U.S. due to different social or cultural norms and practices that are not customary in the U.S., geographical distance and language barriers, including our ability to sell products and services, enforce intellectual property rights and staff and manage operations.
Current and future international operations expose us to additional challenges and risks that may not be inherent in operating solely in the U.S. due to different social or cultural norms and practices that are not customary in the U.S., geographical distance and language barriers, including our ability to sell products and services, enforce intellectual property rights and staff and manage operations. 26 Table of Contents Risks Related to the Spin-Off Our success depends in part on our ongoing relationship with Wyndham Hotels.
Many factors influence our reputation and the value of our brands, including the perception held by our customers and other key stakeholders and the communities in which we do business.
We are subject to risks related to environmental, social and governance activities. Many factors influence our reputation and the value of our brands, including the perception held by our customers and other key stakeholders and the communities in which we do business.
These actions may lead to operational delays or restrictions, as well as increased operating costs, regulatory burdens and risk of litigation. Our business is subject to extensive regulation and the cost of compliance or failure to comply with such regulations may adversely affect us.
These actions may lead to operational delays or restrictions, as well as increased operating costs, regulatory burdens and risk of litigation, and decrease customers’ willingness to buy from us or to use our travel clubs or vacation exchange platforms. 25 Table of Contents Our business is subject to extensive regulation and the cost of compliance or failure to comply with such regulations may adversely affect us.
Risks Related to the Spin-Off Our success depends in part on our ongoing relationship with Wyndham Hotels. In connection with the Spin-off, we entered into a number of agreements with Wyndham Hotels that govern the ongoing relationships between Wyndham Hotels and Travel + Leisure Co. following the Spin-off.
In connection with the Spin-off, we entered into a number of agreements with Wyndham Hotels that govern the ongoing relationships between Wyndham Hotels and Travel + Leisure Co. following the Spin-off. Our success depends, in part, on the maintenance of these ongoing relationships with Wyndham Hotels as well as Wyndham Hotels’ performance of its obligations under these agreements.
We also have successfully utilized and leveraged our relationship with Wyndham Hotels’ loyalty program and any cessation of or adverse change in that loyalty program could be expected to materially adversely impact our business, growth strategy and financial results. We are responsible for certain contingent and other corporate liabilities incurred prior to the Spin-off.
We also have successfully utilized and leveraged our relationship with Wyndham Hotels’ loyalty program, which we refer to as Blue Thread, and any cessation of or adverse change in that loyalty program could be expected to materially adversely impact our business, growth strategy and financial results.
The increase in the number of our associates working remotely has increased certain risks to our business, including increased demand on our information technology resources and systems, and greater potential for phishing and other cybersecurity attacks.
Additionally, we currently have a hybrid work environment in which many corporate associates work both in the office and remotely on an ongoing basis. The increase in the number of our associates working remotely has increased certain risks to our business, including increased demand on our information technology resources and systems, and greater potential for phishing and other cybersecurity attacks.
Climate change is also associated with extreme weather conditions and other natural disasters, such as increased frequency and severity of hurricanes, storms and floods, coastal erosion and flooding due to higher sea levels, increased temperatures, increased forest fires, and other factors that may adversely impact the accessibility or desirability of travel to certain locations, including areas where we or our affiliated resort owners have properties.
Extreme weather conditions and natural disasters, whether resulting from climate change or other factors, such as increased frequency and severity of hurricanes, storms and floods, coastal erosion and flooding due to higher sea levels, increased temperatures, increased wildfires, tornadoes, earthquakes, typhoons, tsunamis, drought, volcanic eruptions and other factors, have in the past adversely impacted, and in the future will likely continue to adversely impact, the accessibility or desirability of travel to certain locations, including those areas where we or our affiliated resort owners have existing properties or may develop resort properties in the future.
Under the separation agreement and the tax sharing agreement that we executed with Cendant (now Avis Budget Group) and former Cendant units, Realogy (now Anywhere Real Estate Inc.) and Travelport, Wyndham Worldwide and Realogy generally were responsible for 37.5% and 62.5% of certain of Cendant’s contingent and other corporate liabilities and associated costs, including certain contingent and other corporate liabilities of Cendant or its subsidiaries to the extent incurred on or prior to August 23, 2006.
Wyndham Worldwide and Anywhere Real Estate Inc. generally were responsible for 37.5% and 62.5% of certain of ABG’s contingent and other corporate liabilities and associated costs, including certain contingent and other corporate liabilities of ABG or its subsidiaries to the extent incurred on or prior to August 23, 2006.
The loss of any members of our senior management team, or the failure to identify qualified successors for such positions, could adversely affect our strategic growth and customer relationships, and impede our ability to execute our business strategies. Additionally, lack of sufficient effective leadership may lead to low morale, higher turnover, and decreased ability to execute our strategy.
Brown, and on our ability to successfully implement succession plans for members of our senior management team. The loss of any members of our senior management team, or the failure to identify qualified successors for such positions, could adversely affect our strategic growth and customer relationships, and impede our ability to execute our business strategies.
We believe that our business success and future growth depends, in part, on the continued services of our senior management team, including our President and CEO, Michael D. Brown, and on our ability to successfully implement succession plans for 21 Table of Contents members of our senior management team.
The growth of our business and the execution of our business strategies depend on the services of our senior management and our associates. We believe that our business success and future growth depends, in part, on the continued services of our senior management team, including our President and CEO, Michael D.
If the quality or reach of such media properties deteriorates in the future, it could negatively impact the perception of the Travel + Leisure brand and adversely impact our business. The timeshare industry is highly competitive and we are subject to risks related to competition that may adversely affect our performance.
If the quality or reach of such media properties deteriorates in the future, it could negatively impact the perception of the Travel + Leisure brand and adversely impact our business.
Also, insufficient numbers of talented associates could constrain our ability to maintain and expand our business. We compete with other companies both within and outside of our industry for talented personnel. If we cannot recruit, train, develop and retain sufficient numbers of talented associates, we could experience increased associate turnover, decreased guest satisfaction, low morale, inefficiency, or internal control failures.
If we cannot recruit, train, develop and retain sufficient numbers of talented associates, we could experience increased associate turnover, decreased guest satisfaction, low morale, inefficiency, or internal control failures.
Our efforts to establish and grow our travel clubs businesses and add brands to our existing portfolio of vacation ownership brands, such as through the planned launch of a network of sports-themed resorts and lifestyle complexes under the Sports Illustrated Resorts brand and the expected acquisition of Accor Vacation Club, subject us to greater risks and uncertainties than 16 Table of Contents those historically considered for our core timeshare and exchange businesses.
The expected results of the transaction and the future prospects for and plans of our company more broadly, including our strategies to accelerate growth of our global businesses through the addition of new vacation ownership brands and growing our travel clubs, are subject to a number of risks and uncertainties, many of which are beyond our control, and may not be achieved in the time or at the level we expect, or at all. 17 Table of Contents Our efforts to establish and grow our travel clubs businesses and add brands to our existing portfolio of vacation ownership brands, such as through the planned launch of a network of sports-themed resorts and lifestyle resorts under the Sports Illustrated Resorts brand and the acquisition of Accor Vacation Club, subject us to greater risks and uncertainties than those historically considered for our core timeshare and exchange businesses.
Further, if we fail to assess and identify cybersecurity risks associated with acquisitions and new initiatives, we may become increasingly vulnerable to such risks. Additionally, we are subject to federal, state, and international laws and regulations relating to the collection, use, retention, security and transfer of personally identifiable information and individual payment data.
Further, if we fail to fully assess, identify and address all cybersecurity risks associated with acquisitions (such as our recent acquisition of Accor Vacation Club) or fail successfully to integrate all information technology systems of such acquired businesses into and with our existing technology framework and cybersecurity controls, we would become increasingly vulnerable to all of the above risks. 22 Table of Contents Additionally, we are subject to federal, state, and international laws and regulations relating to the collection, use, retention, security and transfer of personally identifiable information and individual payment data.
In the future, we could have to increase our loan loss allowance above average historic levels again, whether due to a public health emergency, adverse economic conditions generally, or other causes. The growth of our business and the execution of our business strategies depend on the services of our senior management and our associates.
At times we have had to, and in the future we may have to, increase our loan loss allowance above average historical levels again, whether due to a public health emergency, adverse economic conditions generally, increased customer default trends generally, or other causes.
We are subject to attack by cyber-criminals operating on a global basis attempting to gain access to such information, and the integrity and protection of that guest, shareholder, and employee data is critical to us.
We are subject to attack by cyber-criminals (including nation state-sponsored or nation state-supported organizations, terrorist organizations, criminal enterprises and other actors) operating 21 Table of Contents on a global basis attempting to gain access to such information as well as our source code information, and the integrity and protection of that customer, shareholder, and employee data and proprietary information is critical to us.
In addition, the effects of climate change, such as increased storm intensity, increased wildfires and rising sea levels, have increased and may in the future increase the cost and decrease the available coverage levels of property insurance, particularly in certain geographies. We are subject to risks related to environmental, social and governance activities.
In addition, increased storm intensity, increased wildfires and rising sea levels as well as other natural disasters, whether resulting from climate change or other factors, have increased and will likely in the future increase the cost and decrease the available coverage levels of property insurance, particularly in certain geographies which have been or may be viewed as more likely in the future to be subject to such events and natural disasters.
However, the risks and uncertainties we face are not limited to those set forth in the risk factors described below. Additional risks and uncertainties not presently known to us or that we currently believe not to be material risks may also adversely affect our business.
However, the risks and uncertainties we face are not limited to those set forth in the risk factors described below.
We principally compete with short-term vacation options such as lodging, cruise, and home and apartment sharing services, as well as other timeshare developers.
Consolidation in the timeshare industry can also lead to larger competitors with greater resources that compete with our Vacation Ownership business for customers, projects, and talent. We principally compete with short-term vacation options such as lodging, cruise, and home and apartment sharing services, as well as other timeshare developers.
Consolidation can also lead to larger competitors with greater resources that compete with our Vacation Ownership business for customers, projects, and talent. In addition, d evelopers have been creating, operating and expanding internal exchange and points-based vacation club networks to offer their respective owners travel flexibility.
In addition, developers have been creating, operating and expanding internal exchange and points-based vacation club networks to offer their respective owners travel flexibility.
In 2021, we acquired the Travel + Leisure brand and all related assets from Dotdash Meredith (formerly Meredith Corporation) and we also changed our name to Travel + Leisure Co.
Failure to successfully execute these transactions and integrate acquired businesses could have a material adverse effect on our business, financial condition, results of operations, and cash flows. In 2021, we acquired the Travel + Leisure brand and all related assets from Dotdash Meredith (formerly Meredith Corporation) and we also changed our name to Travel + Leisure Co.
Further, any failure to keep pace with new or innovative use of technologies (including digital technologies within the leisure travel and timeshare industry) could adversely impact our competitive position and future prospects. Our industry is marked by rapid technological developments and innovations (such as the use of AI and machine learning) and evolving industry standards.
Further, any failure to keep pace with new or innovative use of technologies (including digital technologies within the leisure travel and timeshare industry, as well as evolutionary changes in social media (including third-party social media sites) which consumers increasingly rely upon for assessments and decisions concerning travel and vacation information) could adversely impact our competitive position and future prospects.
Our success here is also dependent upon our ongoing ability to adjust our business models to meet changing conditions and differing customer requirements than we may have originally planned for. There is no assurance that these efforts will be successful within the timeframe or at the levels we expect.
Our success here is also dependent upon our ongoing ability to successfully adjust and restructure our business models, which we have been undertaking to meet changing conditions and customer requirements compared to those we had originally anticipated and planned for.
Failure to successfully execute these transactions and integrate acquired businesses could have a material adverse effect on our business, financial condition, results of operations, and cash flows. 18 Table of Contents Dispositions of businesses, such as our European and North American vacation rentals transactions, also pose risks and challenges that could negatively impact our business, including costs or disputes with buyers.
There can be no assurance that the anticipated benefits associated with this acquisition will be achieved. Dispositions of businesses, such as our European and North American vacation rentals transactions, also pose risks and challenges that could negatively impact our business, including costs or disputes with buyers.
These changes may increase our taxes in the applicable jurisdictions or cause us to change the way we operate our business and result in increased taxation of our international earnings. We are subject to ongoing and periodic tax audits and disputes in U.S. federal and various state, local, and foreign jurisdictions.
The OECD may continue to release guidance, and enacting legislation may continue to be implemented, that could impact our assessment as to the impact of Pillar Two on our consolidated financial statements and operations. We are subject to ongoing and periodic tax audits and disputes in U.S. federal and various state, local, and foreign jurisdictions.
A number of other countries are also implementing similar legislation. We are currently in the process of evaluating the impact of this on our consolidated financial statements, and we continue to monitor closely other countries that may enact these rules.
For the rules effective January 1, 2025, we do expect the impact to increase our effective tax rate but overall the rules are not expected to have a material impact on our financial statements. This may change as other countries enact similar legislation and further guidance is released. We continue to closely monitor regulatory developments to assess potential impacts.
Additionally, if the distribution of the common stock of Wyndham Hotels does not qualify as tax-free under Section 355 of the Code, our shareholders will be treated as having received a taxable distribution. 27 Table of Contents Risks Related to the Ownership of Our Common Stock The trading price of our shares of common stock may continue to fluctuate.
Risks Related to the Ownership of Our Common Stock The trading price of our shares of common stock may continue to fluctuate.
Removed
Risks Related to Our Business and Our Industry We may not be able to achieve the objectives of our acquisition of the Travel + Leisure brand or achieve the future prospects and strategic plans for Travel + Leisure Co.
Added
Additional risks and uncertainties not presently known to us or that we currently believe not to be material risks may also adversely affect our business. 15 Table of Contents Risks Related to Our Business and Our Industry The timeshare industry is highly competitive and we are subject to risks related to competition that may adversely affect our performance.
Removed
The expected results of the transaction and the future prospects for and plans of our company more broadly, including our strategies to accelerate growth of our global businesses by broadening the strength of our cornerstone timeshare and exchange businesses and through our travel clubs, are subject to a number of risks and uncertainties, many of which are beyond our control, and may not be achieved in the time or at the level we expect, or at all.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe IPRC is the management-level governance body that oversees our management of cybersecurity threats and data privacy risks and supports the strategic goals of our information security programs. The IPRC also oversees the appropriate remediation and response to cybersecurity incidents in accordance with applicable legal and regulatory requirements as well as our Information Security Incident Response Plan.
Biggest changeIn addition, the CTO and CISO provide the Audit Committee with timely information regarding significant cybersecurity incidents, as applicable. The IPRC is the management-level governance body that oversees our management of cybersecurity threats and data privacy risks and supports the strategic goals of our information security programs.
We describe whether and how risks from identified cybersecurity threats, including as a result of previous incidents, may materially affect, or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “ Failure to maintain the integrity of internal or customer data or to protect our systems from cyber-attacks could disrupt our business, damage our reputation, and subject us to significant costs, fines or lawsuits ” included as part of our risk factor disclosures included in Part I, Item 1A of this Annual Report filed on Form 10-K.
We describe whether and how risks from identified cybersecurity threats, including as a result of previous incidents, may materially affect, or are reasonably likely to materially affect our company, including our business strategy, results of operations, or financial condition, under the heading “ Failure to maintain the integrity of internal or customer data or to protect our systems from cyber-attacks could disrupt our business, damage our reputation, and subject us to significant costs, fines or lawsuits ” included as part of our risk factor disclosures included in Part I, Item 1A of this Annual Report filed on Form 10-K.
Assessment results feed an iterative process intended to improve our cybersecurity posture and address the constantly evolving threat landscape on an on-going basis. • Third-Party Risk Management: We maintain a risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including vendors, service providers and other external users of our systems, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems. • Education and Awareness: We provide training for personnel regarding cybersecurity threats as a means to equip our personnel with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, processes and practices. • Incident Response and Recovery Planning: We have established and maintain incident response and recovery plans for critical systems, applications and business functions that address our response to a cybersecurity incident, and such plans are tested and evaluated on a periodic basis.
Assessment results feed an iterative process intended to improve our cybersecurity posture and address the constantly evolving threat landscape on an on-going basis. • Third-Party Risk Management: We maintain a risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including vendors, service providers and other external users of our systems, as well as the 28 Table of Contents systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems. • Education and Awareness: We provide training for employees regarding cybersecurity threats as a means to equip our employees with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, processes and practices. • Incident Response and Recovery Planning: We have established and maintain incident response and recovery plans for critical systems, applications and business functions that address our response to a cybersecurity incident, and such plans are tested and evaluated on a periodic basis.
The CISO leads a team of 29 Table of Contents information security professionals in the day-to-day execution of our information security program, which is discussed in more detail above under the heading “ Cybersecurity Risk Management and Strategy. ” The CISO has served in various roles in information security and information technology for over 20 years for global travel, hospitality, casino, and energy companies along with consulting for both the U.S.
The CISO leads a team of information security professionals in the day-to-day execution of our information security program, which is discussed in more detail above under the heading “ Cybersecurity Risk Management and Strategy. ” The CISO has served in various roles in information security and information technology for over 20 years for global travel, hospitality, casino, and energy companies along with consulting for both the U.S.
The CTO holds an undergraduate degree in computer science and a master’s degree in business administration, and has served in various roles in information technology for over 30 years for global travel, hospitality, and finance companies, including serving as either the Chief Technology Officer or Chief Information Officer of Qatar Airways Group and MGM Resorts International.
The CTO holds an undergraduate degree in computer science and a master’s degree in business administration and has served in various roles in information technology for over 30 years for global travel, hospitality, and finance companies, including serving as the Chief Technology Officer for Qatar Airways Group and Chief Information Officer for MGM Resorts International.
Cybersecurity Risk Management and Strategy Our ERM program is designed to identify the top risks applicable to us and document risk mitigation plans and initiatives by management. We have identified, and we expect to continue to identify, cybersecurity threats as among the top risks that we 28 Table of Contents face.
Cybersecurity Risk Management and Strategy Our ERM program is designed to identify the top risks applicable to us and document risk mitigation plans and initiatives by management. We have identified, and we expect to continue to identify, cybersecurity threats as among the top risks that we face.
The executive sponsors of the IPRC are our Chief Financial Officer, Chief Operations Officer, Wyndham Destinations, the CTO, and General Counsel and Corporate Secretary. The IPRC members include our CISO, the senior legal officer in the privacy function, the business segments general counsel, the Chief Accounting Officer, and the Managing Director RCI North America & Global Marketing and Operations.
The IPRC members include our CISO, the senior attorney in the privacy function, the senior attorney in the corporate and securities function, the Chief Accounting Officer, and the Managing Director, Travel and Membership.
Removed
In addition, the CTO and CISO provide the Audit Committee with timely information regarding significant cybersecurity incidents, as applicable. During 2023, the Audit Committee also held an informational meeting with an external advisor regarding the cybersecurity landscape.
Added
The IPRC also oversees the appropriate remediation and response to cybersecurity incidents in accordance with applicable legal and regulatory requirements as well as our Information Security Incident Response Plan. The executive sponsors of the IPRC are our Chief Financial Officer, Chief Operations Officer, CTO, and General Counsel and Corporate Secretary.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Travel + Leisure Co. Corporate Our corporate headquarters is located in a leased office at 6277 Sea Harbor Drive in Orlando, Florida, for which the lease expires in 2025 . The lease is currently under review related to our ongoing requirements.
Biggest changeITEM 2. PROPERTIES Travel + Leisure Co. Corporate Our corporate headquarters is located in a leased office at 6277 Sea Harbor Drive in Orlando, Florida, for which the lease expires in October 2025 . We have executed a new lease which commences in November 2025 to relocate our corporate headquarters to 501 West Church Street in Orlando, Florida.
All leases that are due to expire in 2024 are presently under review related to our ongoing requirements. Travel and Membership Our Travel and Membership business is headquartered in Orlando, Florida, pursuant to several leases which begin to expire in 2025. The business also owns one property in Indianapolis, Indiana, and one property in Mexico.
All leases that are due to expire in 2025 are presently under review related to our ongoing requirements. Travel and Membership Our Travel and Membership business is headquartered in Orlando, Florida, pursuant to several leases which begin to expire in 2025. The business also owns one property in Indianapolis, Indiana, and one property in Mexico.
Vacation Ownership Our Vacation Ownership business has its main corporate operations in Orlando, Florida, pursuant to several leases which begin to expire in 2025. Our Vacation Ownership business also has leased space in Las Vegas, Nevada; the Philippines; Australia; and Singapore, with various expiration dates between 2024 and 2056.
The new lease will expire in 2040. Vacation Ownership Our Vacation Ownership business has its main corporate operations in Orlando, Florida, pursuant to several leases which begin to expire in 2025. Our Vacation Ownership business also has leased space in Las Vegas, Nevada; the Philippines; Australia; and Singapore, with various expiration dates between 2025 and 2056.
There are 19 leased offices located in Europe, Latin America, Asia Pacific, North America, and Africa with expiration dates between 2024 and 2029. All leases that are due to expire in 2024 are presently under review related to our ongoing requirements.
There are 18 leased offices located in Europe, Latin America, Asia Pacific, North America, and Africa with expiration dates between 2025 and 2027. All leases that are due to expire in 2025 are presently under review related to our ongoing requirements.
In addition, our Vacation Ownership business utilizes 164 marketing and sales offices with 123 locations in the U.S. and the remaining locations in Australia, China, the Caribbean, Thailand, Mexico, Indonesia, Japan, Fiji, the Philippines, and New Zealand. Of these 164 marketing and sales offices, 71 are pursuant to leases with various expiration dates between 2024 and 2056.
In addition, our Vacation Ownership business utilizes 173 marketing and sales offices with 127 locations in the U.S. and the remaining locations in Australia, China, the Caribbean, Thailand, Mexico, Indonesia, Japan, Fiji, and New Zealand. Of these 173 marketing and sales offices, 70 are pursuant to leases 29 Table of Contents with various expiration dates between 2025 and 2056.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeSee Note 19— Commitments and Contingencies to the Consolidated Financial Statements for a description of claims and legal actions arising in the ordinary course of our business and Note 27— Transactions with Former Parent and Former Subsidiaries to the Consolidated Financial Statements for a description of our obligations regarding Cendant contingent litigation, matters related to Wyndham Hotels, matters related to the European vacation rentals business, and matters related to the North American vacation rentals business.
Biggest changeSee Note 19— Commitments and Contingencies to the Consolidated Financial Statements for a description of claims and legal actions arising in the ordinary course of our business and Note 27— Transactions with Former Parent and Former Subsidiaries to the Consolidated Financial Statements for a description of our obligations regarding ABG contingent litigation, matters related to Wyndham Hotels, matters related to the European vacation rentals business, and matters related to the North American vacation rentals business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe equity plan compensation information called for by Item 201(d) of Regulation S-K is set forth in Part III, Item 12 of this Annual Report on Form 10-K under the heading “ Equity Compensation Plan Information as of December 31, 2023. ” Issuer Purchases of Equity Securities Below is a summary of our Travel + Leisure Co. common stock repurchases by month for the quarter ended December 31, 2023: ISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan Approximate Dollar Value of Shares that May Yet Be Purchased Under the Publicly Announced Plan (a) October 2023 (October 1-31) 180,438 $ 33.25 180,438 $ 204,130,249 November 2023 (November 1-30) 874,092 $ 36.04 874,092 $ 172,630,660 December 2023 (December 1-31) 60,753 $ 37.50 60,753 $ 170,352,250 Total 1,115,283 $ 35.67 1,115,283 $ 170,352,250 (a) On August 20, 2007, our Board of Directors (“Board”) authorized the repurchase of our common stock (the “Share Repurchase Program”).
Biggest changeThe equity compensation plan information called for by Item 201(d) of Regulation S-K is set forth in Part III, Item 12 of this Annual Report on Form 10-K under the heading “ Equity Compensation Plan Information as of December 31, 2024. ” Issuer Purchases of Equity Securities Below is a summary of our Travel + Leisure Co. common stock repurchases by month for the quarter ended December 31, 2024: ISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan Approximate Dollar Value of Shares that May Yet Be Purchased Under the Publicly Announced Plan (b) October 2024 (October 1-31) 431,192 $ 46.36 431,192 $ 488,990,447 November 2024 (November 1-30) 450,149 $ 53.25 450,149 $ 467,354,409 December 2024 (December 1-31) 493,311 $ 52.75 493,311 $ 441,333,148 Total (a) 1,374,652 $ 50.91 1,374,652 $ 441,333,148 (a) Includes 25,318 shares purchased for which the trade date occurred in December 2024 and settled in January 2025.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN (a) Among Travel + Leisure Co., the S&P Midcap 400 Index and the S&P Hotels, Resorts, & Cruise Lines Index (a) $100 invested on December 31, 2018, in stock or index, including reinvestment of dividends.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN (a) Among Travel + Leisure Co., the S&P Midcap 400 Index and the S&P Hotels, Resorts, & Cruise Lines Index (a) $100 invested on December 31, 2019, in stock or index, including reinvestment of dividends.
The following Stock Performance Graph compares the cumulative total stockholder return of our common stock against the cumulative total returns of the Standard & Poor’s Rating Services (“S&P”) Midcap 400 index and the S&P Hotels, Resorts & Cruise Lines index for the period from December 31, 2018, to December 31, 2023.
The following Stock Performance Graph compares the cumulative total stockholder return of our common stock against the cumulative total returns of the Standard & Poor’s Rating Services (“S&P”) Midcap 400 index and the S&P Hotels, Resorts & Cruise Lines index for the period from December 31, 2019, to December 31, 2024.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Price of Common Stock Our common stock is listed on the New York Stock Exchange under the symbol TNL. As of January 31, 2024, the number of stockholders of record was 4,076.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Price of Common Stock Our common stock is listed on the New York Stock Exchange under the symbol TNL. As of January 31, 2025, the number of stockholders of record was 4,006.
The graph assumes that $100 was invested on December 31, 2018, and all dividends and other distributions were reinvested.
The graph assumes that $100 was invested on December 31, 2019, and all dividends and other distributions were reinvested.
The Board has since increased the capacity of the Share Repurchase Program nine times, most recently in April 2022, by $500 million, bringing the total authorization under the current program to $6.5 billion.
The Board has since increased the capacity of the Share Repurchase Program 10 times, most recently in May 2024, by $500 million, bringing the total authorization under the current program to $7.0 billion.
Cumulative Total Return Fiscal year ending December 31: 2018 2019 2020 2021 2022 2023 Travel + Leisure Co. $ 100.00 $ 150.06 $ 136.48 $ 171.91 $ 117.47 $ 131.98 S&P Midcap 400 $ 100.00 $ 126.20 $ 143.44 $ 178.95 $ 155.58 $ 181.15 S&P Hotels, Resorts & Cruise Lines $ 100.00 $ 137.05 $ 101.59 $ 121.75 $ 92.23 $ 153.39 The stock price performance included in this graph is not necessarily indicative of future stock price performance.
Cumulative Total Return Fiscal year ending December 31: 2019 2020 2021 2022 2023 2024 Travel + Leisure Co. $ 100.00 $ 90.95 $ 114.56 $ 78.28 $ 87.95 $ 118.50 S&P Midcap 400 $ 100.00 $ 113.66 $ 141.80 $ 123.28 $ 143.54 $ 163.54 S&P Hotels, Resorts & Cruise Lines $ 100.00 $ 74.12 $ 88.83 $ 67.29 $ 111.92 $ 147.93 The stock price performance included in this graph is not necessarily indicative of future stock price performance.
Added
(b) Proceeds received from stock option exercises increase repurchase capacity under the plan. On August 20, 2007, our Board of Directors (“Board”) authorized the repurchase of our common stock (the “Share Repurchase Program”).

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFINANCIAL CONDITION As of December 31, (In millions) 2023 2022 Change Total assets $ 6,738 $ 6,757 $ (19) Total liabilities $ 7,655 $ 7,661 $ (6) Total deficit $ (917) $ (904) $ (13) Total assets decreased $19 million from December 31, 2022 to December 31, 2023, due to: • $268 million decrease in Cash and cash equivalents primarily driven by $400 million repayment of the 3.90% secured notes during the first quarter of 2023, $309 million of payments for share repurchases, $136 million of dividend payments, $74 million of property and equipment additions, $22 million of payments relating to debt issuances/modifications, and $15 million payment associated with the acquisition of the Travel + Leisure brand partially offset by $350 million of net cash provided by operating activities, proceeds from $300 million of borrowings on the 2023 Incremental Term Loan B facility, and $103 million of net proceeds from non-recourse debt; and a • $58 million decrease in Inventory driven by the sale of $133 million of VOI inventory and $16 million of net transfers of completed unregistered VOI inventory to property and equipment; partially offset by $88 million of inventory additions.
Biggest changeSee Note 26— Restructuring to the Consolidated Financial Statements for additional details of our restructuring activities. 41 Table of Contents FINANCIAL CONDITION As of December 31, (In millions) 2024 2023 Change Total assets $ 6,735 $ 6,738 $ (3) Total liabilities $ 7,615 $ 7,655 $ (40) Total deficit $ (880) $ (917) $ 37 Total assets decreased $3 million from December 31, 2023 to December 31, 2024, due to: • $115 million decrease in Cash and cash equivalents primarily driven by repayment of the $300 million 5.65% notes which were due in April of 2024, $234 million of share repurchases, $142 million of dividend payments, $81 million of property and equipment additions, and $44 million of net payments related to the acquisition of Accor Vacation Club, partially offset by $464 million of net cash provided by operating activities, $196 million of net borrowings on the revolving credit facility, and $62 million of net proceeds on non-recourse debt; • $64 million decrease in Property and equipment, net driven by $56 million of net transfers of completed VOI inventory from Property and equipment to Inventory; • $24 million decrease in Trade receivables, net due to net collections of $15 million of developer receivables and $11 million of property management fees; and a • $15 million decrease in Prepaid expenses driven by a $9 million decrease in prepaid maintenance fees.
The impact of any changes in estimates under the relative sales value method is recorded in Cost of vacation ownership interests on the Consolidated Statements of Income in order to retrospectively adjust the margin previously recorded subject to those estimates. There were no changes in these assumptions during 2023. Impairment of Long-Lived Assets.
The impact of any changes in estimates under the relative sales value method is recorded in Cost of vacation ownership interests on the Consolidated Statements of Income in order to retrospectively adjust the margin previously recorded subject to those estimates. There were no changes in these assumptions during 2024. Impairment of Long-Lived Assets.
If current or expected future conditions differ from the conditions in effect when the historical experience was generated, we adjust the allowance for loan losses to reflect the expected effects of the current environment on the collectability of our VOCRs. There were no changes to the assumptions used in this model in 2023.
If current or expected future conditions differ from the conditions in effect when the historical experience was generated, we adjust the allowance for loan losses to reflect the expected effects of the current environment on the collectability of our VOCRs. There were no changes to the assumptions used in this model in 2024.
The estimates used to calculate the fair value of other indefinite-lived intangible assets change from year to year based on operating results and market conditions. There were no changes in the assumptions used in this analysis in 2023. Changes in these estimates and assumptions could materially affect the determination of fair value and the other indefinite-lived intangible assets impairment.
The estimates used to calculate the fair value of other indefinite-lived intangible assets change from year to year based on operating results and market conditions. Changes in these estimates and assumptions could materially affect the determination of fair value and the other indefinite-lived intangible assets impairment. There were no changes in the assumptions used in this analysis in 2024.
For additional details regarding our credit facilities, term loan B facilities, and non-recourse debt see Note 15— Debt to the Consolidated Financial Statements. 42 Table of Contents Material Cash Requirements The following table summarizes material future contractual obligations of our continuing operations (in millions).
For additional details regarding our credit facilities, term loan B facilities, and non-recourse debt see Note 15— Debt to the Consolidated Financial Statements. Material Cash Requirements The following table summarizes material future contractual obligations of our continuing operations (in millions).
Further, we make assumptions within certain valuation techniques including discount rates and timing of future cash flows. Valuations are performed by management or independent valuation specialists under management’s supervision, where appropriate. We believe that the estimated fair values assigned to the assets acquired and liabilities assumed are based on reasonable assumptions that marketplace participants would use.
Further, we make assumptions within certain valuation techniques including discount rates and timing of future cash flows. Valuations are performed by management or independent valuation specialists under management’s supervision, where appropriate. We believe that the estimated fair values assigned to the assets acquired and liabilities assumed are based on reasonable 48 Table of Contents assumptions that marketplace participants would use.
There is no assurance that a payment of a dividend or a dividend at current levels will occur in the future. Foreign Earnings We assert that substantially all undistributed foreign earnings will be reinvested indefinitely as of December 31, 2023.
There is no assurance that a payment of a dividend or a dividend at current levels will occur in the future. Foreign Earnings We assert that substantially all undistributed foreign earnings will be reinvested indefinitely as of December 31, 2024.
Our ability to sell securities backed by our VOCRs depends on the continued ability and willingness of capital market participants to invest in such securities. Each of our non-recourse securitized term notes and the bank conduit facilities contain various triggers relating to the performance of the applicable loan pools.
Our ability to sell securities backed by our VOCRs depends on the continued ability and willingness of capital market participants to invest in such securities. 43 Table of Contents Each of our non-recourse securitized term notes and the bank conduit facilities contain various triggers relating to the performance of the applicable loan pools.
All future declarations of quarterly cash dividends and increases to the capacity of our share repurchase program are subject to final approval by the Board of Directors (“Board”). During 2023, we spent $100 million on vacation ownership development projects (inventory). We believe that our Vacation Ownership business currently has adequate finished inventory to support vacation ownership sales for several years.
All future declarations of quarterly cash dividends and increases to the capacity of our share repurchase program are subject to final approval by the Board of Directors (“Board”). During 2024, we spent $106 million on vacation ownership development projects (inventory). We believe that our Vacation Ownership business currently has adequate finished inventory to support vacation ownership sales for several years.
Cash and Cash Equivalents As of December 31, 2023, we had $282 million of Cash and cash equivalents, which includes highly-liquid investments with an original maturity of three months or less. $1.0 Billion Revolving Credit Facility We generally utilize our revolving credit facility to finance our short-term to medium-term business operations, as needed.
Cash and Cash Equivalents As of December 31, 2024, we had $167 million of Cash and cash equivalents, which includes highly-liquid investments with an original maturity of three months or less. $1.0 Billion Revolving Credit Facility We generally utilize our revolving credit facility to finance our short-term to medium-term business operations, as needed.
In addition to the amounts shown in the table above and in connection with our separation from Cendant, we entered into certain guarantee commitments with Cendant (pursuant to our assumption of certain liabilities and our obligation to indemnify Cendant, Realogy (now Anywhere Real Estate Inc.), and Travelport for such liabilities) and guarantee commitments related to deferred compensation arrangements with Cendant and Realogy.
In addition to the amounts shown in the table above and in connection with our separation from ABG, we entered into certain guarantee commitments with ABG (pursuant to our assumption of certain liabilities and our obligation to indemnify ABG, Anywhere Real Estate Inc., and Travelport for such liabilities) and guarantee commitments related to deferred compensation arrangements with ABG and Anywhere Real Estate Inc.
As of December 31, 2023, our maximum obligation under these severance plans was $199 million. Refer to the Proxy Statement for our 2024 Annual Meeting of Shareholders under the captions “Compensation of Directors,” “Executive Compensation” and “Committees of the Board” for additional details regarding executive compensation.
As of December 31, 2024, our maximum obligation under these severance plans was $204 million. Refer to the Proxy Statement for our 2025 Annual Meeting of Shareholders under the captions “Compensation of Directors,” “Executive Compensation” and “Committees of the Board” for additional details regarding executive compensation.
Our first lien leverage ratio determines the interest rate spread on revolver borrowings and fees associated with letters of credit, which subjects them to fluctuation. As of December 31, 2023, our interest coverage ratio was 4.23 to 1.0 and our first lien leverage ratio was 3.40 to 1.0.
Our first lien leverage ratio determines the interest rate spread on revolver borrowings and fees associated with letters of credit, which subjects them to fluctuation. As of December 31, 2024, our interest coverage ratio was 4.40 to 1.0 and our first lien leverage ratio was 3.32 to 1.0.
For a comparative review of the fiscal years ended December 31, 2022 and 2021, refer to the Cash Flows section in Part II, Item 7 of our Annual Report on Form 10-K filed with the SEC on February 22, 2023.
For a comparative review of the fiscal years ended December 31, 2023 and 2022, refer to the Cash Flows section in Part II, Item 7 of our Annual Report on Form 10-K filed with the SEC on February 21, 2024.
The partner may invest in new ground-up development projects or purchase from us, for cash, existing in-process inventory which currently resides on our Consolidated Balance Sheets. The partner will complete the development of the project and we may purchase finished inventory at a future date as needed or as obligated under the agreement.
We refer to this as Just-in-Time. The partner may invest in new ground-up development projects or purchase from us, for cash, existing in-process inventory which currently resides on our Consolidated Balance Sheets. The partner will complete the development of the project and we may purchase finished inventory at a future date as needed or as obligated under the agreement.
Our net cash from operations and cash and cash equivalents are key sources of liquidity along with our revolving credit facility, bank conduit facilities, and continued access to debt markets.
Our net cash from operations 42 Table of Contents and cash and cash equivalents are key sources of liquidity along with our revolving credit facility, bank conduit facilities, and continued access to debt markets.
The facility expires in October 2026 and had $998 million of available capacity as of December 31, 2023. The revolving credit facility and term loan B facilities are subject to covenants including the maintenance of specific financial ratios as defined in the credit agreement.
The facility expires in October 2026 and had $803 million of available capacity as of December 31, 2024. The revolving credit facility and term loan B facilities are subject to covenants including the maintenance of specific financial ratios as defined in the credit agreement.
We closed on securitization financings of $1.09 billion, $800 million, and $850 million during 2023, 2022, and 2021. These transactions positively impacted our liquidity and reinforce our expectation that we will maintain adequate liquidity for the next year and beyond.
We closed on securitization financings of $1.05 billion, $1.09 billion, and $800 million during 2024, 2023, and 2022. These transactions positively impacted our liquidity and reinforce our expectation that we will maintain adequate liquidity for the next year and beyond.
As of December 31, 2023, all of our securitized loan pools were in compliance with applicable contractual triggers.
As of December 31, 2024, all of our securitized loan pools were in compliance with applicable contractual triggers.
We reduce our management fees revenue for amounts paid to the property owners’ association that reflect maintenance fees for VOIs for which we retain ownership, as we have concluded that such payments are consideration payable to a customer.
We reduce our management fees revenue for amounts paid to the property owners’ association that reflect maintenance fees for VOIs for which we retain ownership, as we 34 Table of Contents have concluded that such payments are consideration payable to a customer.
We believe that our USD bank conduit facility and our AUD/NZD bank conduit facility, with a term through December 2024, amounting to a combined capacity of $752 million ($388 million available as of December 31, 2023), along with our ability to issue term asset-backed securities, provide sufficient liquidity to finance the sale of VOIs beyond the next year.
We believe that our USD bank conduit facility and our AUD/NZD bank conduit facility, amounting to a combined capacity of $738 million ($361 million available as of December 31, 2024), along with our ability to issue term asset-backed securities, provide sufficient liquidity to finance the sale of VOIs beyond the next year.
Adjusted EBITDA also excludes stock-based compensation costs, separation and restructuring costs, legacy items, transaction costs for acquisitions and divestitures, asset impairments/recoveries, gains and losses on sale/disposition of business, and items that meet the conditions of unusual and/or infrequent.
Adjusted EBITDA also excludes stock-based compensation costs, separation and restructuring costs, legacy items, transaction and integration costs associated with mergers, acquisitions, and divestitures, asset impairments/recoveries, gains and losses on sale/disposition of business, and items that meet the conditions of unusual and/or infrequent.
As such, we expect to remain below historical levels of spending for vacation ownership development projects in 2024 with anticipated spending between $105 million and $125 million. After factoring in the anticipated additional annual spending, we expect to have adequate inventory to support vacation ownership sales through at least the next four to five years.
As such, we expect to remain below historical levels of spending for vacation ownership development projects in 2025 with anticipated spending between $150 million and $180 million. After factoring in the anticipated additional annual spending, we expect to have adequate inventory to support vacation ownership sales through at least the next four to five years.
European Union member states agreed to implement the OECD’s Pillar Two rules with effective dates of January 1, 2024 and January 1, 2025, for different 33 Table of Contents aspects of the directive and most have already enacted legislation. A number of other countries are also implementing similar legislation.
European Union member states agreed to implement the OECD’s Pillar Two rules with effective dates of January 1, 2024 and January 1, 2025, for different aspects of the directive and most have already enacted legislation. A number of other countries have also implemented similar legislation.
We believe these anticipated sources of liquidity are sufficient to meet our expected ongoing short-term and long-term cash needs, including the repayment of our $300 million notes due in April 2024. Our discussion below highlights these sources of liquidity and how they have been utilized to support our cash needs.
We believe these anticipated sources of liquidity are sufficient to meet our expected ongoing short-term and long-term cash needs, including the repayment of our $350 million notes due in October 2025. Our discussion below highlights these sources of liquidity and how they have been utilized to support our cash needs.
This segment includes our Wyndham Destinations business line. • Travel and Membership — operates a variety of travel businesses, including vacation exchange brands, travel technology platforms, travel memberships, and direct-to-consumer rentals. This segment is comprised of our Exchange and Travel Club business lines.
This segment is wholly comprised of our Vacation Ownership business line. • Travel and Membership — operates a variety of travel businesses, including vacation exchange brands, travel technology platforms, travel memberships, and direct-to-consumer rentals. This segment is comprised of our Exchange and Travel Club business lines.
In determining our provision for income taxes, we use judgment, reflecting our estimates and assumptions, in applying the more likely than not threshold. 47 Table of Contents
In determining our provision for income taxes, we use judgment, reflecting our estimates and assumptions, in applying the more likely than not threshold.
Legacy items include the resolution of and adjustments to certain contingent assets and liabilities related to acquisitions of continuing businesses and dispositions, including the separation of Wyndham Hotels & Resorts, Inc. (“Wyndham Hotels”) and Cendant Corporation (“Cendant”), and the sale of the vacation rentals businesses.
Legacy items include the resolution of and adjustments to certain contingent assets and liabilities related to acquisitions of continuing businesses and dispositions, including the separation of Wyndham Hotels & Resorts, Inc. (“Wyndham Hotels”) and Avis Budget Group, Inc. (“ABG”) formerly Cendant Corporation, and the sale of the vacation rentals businesses.
Fee-for-Service commission revenues were $131 million and $116 million for the years ended December 31, 2023 and 2022. These commissions are reported within Service and membership fees on the Consolidated Statements of Income. 36 Table of Contents THE YEAR ENDED DECEMBER 31, 2023 VS.
Fee-for-Service commission revenues were $71 million and $131 million for the years ended December 31, 2024 and 2023. These commissions are reported within Service and membership fees on the Consolidated Statements of Income. 37 Table of Contents THE YEAR ENDED DECEMBER 31, 2024 VS.
As a result of these items, Net income attributable to Travel + Leisure Co. shareholders increased $39 million in 2023 as compared with 2022.
As a result of these items, Net income attributable to Travel + Leisure Co. shareholders increased $15 million in 2024 as compared with 2023.
(i) The following table provides a reconciliation of Vacation ownership interest sales, net to Gross VOI sales (in millions): Year Ended December 31, 2023 2022 Vacation ownership interest sales, net $ 1,582 $ 1,484 Loan loss provision 348 302 Gross VOI sales, net of Fee-for-Service sales 1,930 1,786 Fee-for-Service sales (1) 219 196 Gross VOI sales $ 2,149 $ 1,982 (1) Represents total sales of VOIs through our Fee-for-Service programs where inventory is sold through our sales and marketing channels for a commission.
(i) The following table provides a reconciliation of Vacation ownership interest sales, net to Gross VOI sales (in millions): Year Ended December 31, 2024 2023 Vacation ownership interest sales, net $ 1,721 $ 1,582 Loan loss provision 432 348 Gross VOI sales, net of Fee-for-Service sales 2,153 1,930 Fee-for-Service sales (1) 140 219 Gross VOI sales $ 2,293 $ 2,149 (1) Represents total sales of VOIs through our Fee-for-Service programs where inventory is sold through our sales and marketing channels for a commission.
As of December 31, 2023, we had $3.56 billion of outstanding borrowings under our secured notes and term loan B facilities with maturities ranging from 2024 to 2030.
As of December 31, 2024, we had $3.25 billion of outstanding borrowings under our secured notes and term loan B facility with maturities ranging from 2025 to 2030.
(b) Represents required principal payments on debt that is securitized through bankruptcy-remote special purpose entities; the creditors of which have no recourse to us for principal and interest. (c) Includes interest on debt and non-recourse debt; estimated using the stated interest rates. (d) Includes $533 million for marketing related activities and $133 million for information technology activities.
(b) Represents required principal payments on debt that is securitized through bankruptcy-remote special purpose entities, the creditors of which have no recourse to us for principal and interest. (c) Includes interest on debt and non-recourse debt; estimated using the stated interest rates.
(c) VPG is calculated by dividing Gross VOI sales (excluding telesales and virtual sales) by the number of tours. We have excluded non-tour sales in the calculation of VPG because they are generated by a different marketing channel.
(c) Represents the number of tours taken by guests in our efforts to sell VOIs. (d) VPG is calculated by dividing Gross VOI sales (excluding telesales and virtual sales) by the number of tours. We have excluded non-tour sales in the calculation of VPG because they are generated by a different marketing channel.
Management uses Adjusted EBITDA to assess the performance of the reportable segments. We define Adjusted EBITDA as net income from continuing operations before depreciation and amortization, interest expense (excluding consumer financing interest), early extinguishment of debt, interest income (excluding consumer financing revenues) and income taxes.
We define Adjusted EBITDA as net income from continuing operations before depreciation and amortization, interest expense (excluding consumer financing interest), early extinguishment of debt, interest income (excluding consumer financing revenues) and income taxes.
Our effective tax rate for 2023 is lower primarily due to the partial reversal of the valuation allowance related to our foreign tax credits based on our determination that it is more likely than not that the benefit will be realized.
Our effective tax rates were 26.4% and 19.4% for the years ended December 31, 2024 and 2023. Our effective tax rate for 2023 is lower primarily due to the partial reversal of the valuation allowance related to our foreign tax credits based on our determination that it is more likely than not that the benefit will be realized.
This increase was unfavorably impacted by foreign currency of $7 million (0.2%).
This increase was unfavorably impacted by foreign currency of $3 million (0.1%).
In addition to the revenue change explained above, Adjusted EBITDA was further impacted by: • $61 million increase in marketing costs in support of increased tour flow and new owner mix; • $45 million increase in property management expenses due to higher reimbursable resort operating costs and expenses; • $32 million increase in consumer financing interest expense primarily due to an increased weighted average coupon rate; • $31 million increase in sales and commission expenses due to higher gross VOI sales, net of Fee-for-Service sales; and • $8 million increase in other operating expenses due to higher VOI travel package and incentive expenses.
In addition to the revenue change explained above, Adjusted EBITDA was further impacted by: • $64 million increase in sales and commission expenses due to higher Gross VOI sales, net of Fee-for-Service sales; • $56 million increase in marketing costs in support of increased tour flow and new owner mix; • $29 million increase in property management expenses due to higher reimbursable resort operating costs and expenses; and a • $24 million increase in consumer financing interest expense primarily due to a higher average non-recourse debt balance and increased weighted average coupon rate.
The Year Ended December 31, 2022” section for a discussion of how these operating statistics affected our business for the periods presented.
Refer to “The Year Ended December 31, 2024 vs. The Year Ended December 31, 2023” section for a discussion of how these operating statistics affected our business for the periods presented.
As of December 31, 2023, the Board has increased the capacity of the program nine times, most recently in April 2022 by $500 million, bringing the total authorization under the current program to $6.5 billion. Proceeds received from stock option exercises have increased the repurchase capacity by $81 million since the inception of this program.
As of December 31, 2024, the Board has increased the capacity of the program 10 times, most recently in May 2024 by $500 million, bringing the total authorization under the current program to $7.0 billion. Proceeds received from stock option exercises have increased the repurchase capacity by $87 million since the inception of this program.
This method requires us to make estimates subject to significant uncertainty, including future sales prices and volumes as well as credit losses and related inventory recoveries.
We use the relative sales value method of costing and relieving our VOI inventory. This method requires us to make estimates subject to significant uncertainty, including future sales prices and volumes as well as credit losses and related inventory recoveries.
Property management fee revenues and reimbursable revenues are recognized when the services are performed and are recorded as a component of Service and membership fees on the Consolidated Statements of Income. 34 Table of Contents Within our Vacation Ownership segment, we measure operating performance using the following key operating statistics: (i) gross VOI sales including sales under our Fee-for-Service program before the effect of loan loss provisions, (ii) tours, which represents the number of tours taken by guests in our efforts to sell VOIs, and (iii) volume per guest, which measures the efficiency of this business’ tour selling efforts, is calculated by dividing the gross VOI sales (excluding telesales and virtual sales) by the number of tours.
Within our Vacation Ownership segment, we measure operating performance using the following key operating statistics: (i) gross VOI sales including sales under our Fee-for-Service program before the effect of loan loss provisions, (ii) tours, which represents the number of tours taken by guests in our efforts to sell VOIs, and (iii) volume per guest, which measures the efficiency of this business’ efforts in generating sales from tours, is calculated by dividing the gross VOI sales (excluding telesales and virtual sales) by the number of tours.
(e) Represents the number of exchanges and travel bookings recognized as revenue during the period, net of cancellations. (f) Represents transaction revenue divided by transactions. (g) Represents paid members in our vacation exchange programs who are considered to be in good standing. (h) Percentage change may not calculate due to rounding.
(f) Represents transaction revenue divided by transactions. (g) Represents paid members in our vacation exchange programs who are considered to be in good standing. (h) Percentage change may not calculate due to rounding.
See Note 19— Commitments and Contingencies to the Consolidated Financial Statements for a description of claims and legal actions arising in the ordinary course of our business along with our guarantees and indemnifications and Note 27— Transactions with Former Parent and Former Subsidiaries to the Consolidated Financial Statements for a description of our obligations regarding Cendant contingent litigation, matters related to Wyndham Hotels, and matters related to the vacation rentals businesses.
See Note 19— Commitments and Contingencies to the Consolidated Financial Statements for a description of claims and legal actions arising in the ordinary course of our business along with our guarantees and indemnifications and Note 27— Transactions with Former Parent and Former Subsidiaries to the Consolidated Financial Statements for a description of our obligations regarding ABG contingent litigation, matters related to Wyndham Hotels, and matters related to the vacation rentals businesses. 47 Table of Contents CRITICAL ACCOUNTING ESTIMATES In presenting our financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the amounts reported therein.
We had $170 million of remaining availability in our program as of December 31, 2023. Under our current share repurchase program, we repurchased 7.8 million shares at an average price of $39.11 for a cost of $307 million during the year ended December 31, 2023.
We had $441 million of remaining availability in our program as of December 31, 2024. Under our current share repurchase program, we repurchased 5.2 million shares at an average price of $45.73 for a cost of $235 million during the year ended December 31, 2024.
The amount and timing of specific repurchases are subject to market conditions, applicable legal requirements and other factors, including capital allocation priorities. Repurchases may be conducted in the open market or in privately negotiated transactions. Dividends We paid cash dividends of $0.45 per share for all four quarters of 2023 and $0.40 per share for all four quarters of 2022.
The amount and timing of specific repurchases are subject to market conditions, applicable legal requirements and other factors, including capital allocation priorities. Repurchases may be conducted in the open market or in privately negotiated transactions.
Changes in our estimates of uncollectible amounts could result in a material impact to our allowance for loan losses. A one percent change in projected losses would increase our allowance for loan losses by approximately $6 million.
Changes in our estimates of uncollectible amounts could result in a material impact to our allowance for loan losses. A one percent change in projected losses would increase our allowance for loan losses by approximately $6 million. See Note 9— Vacation Ownership Contract Receivables to the Consolidated Financial Statements for additional details of our allowance for loan losses. Inventory .
While our Vacation Ownership business is benefited by the fact that the majority of our owners do not have loans and are therefore less dependent on economic conditions when making travel decisions, this business, and, to a greater extent, our Travel and Membership businesses are highly dependent on the health of the travel industry and we are subject to the other risks and uncertainties discussed in “ Risk Factors ” contained in Part I, Item 1A of our Annual Report on Form 10-K.
This business, and, to a greater extent, our Travel and Membership businesses are highly dependent on the health of the travel industry and we are subject to the other risks and uncertainties discussed in “ Risk Factors ” contained in Part I, Item 1A of this Annual Report on Form 10-K.
For a comparative review of our consolidated results of operations and those of our reportable segments for the fiscal years ended December 31, 2022 and 2021, refer to Part II, Item 7 of our Annual Report on Form 10-K filed with the SEC on February 22, 2023. 39 Table of Contents DISCONTINUED OPERATIONS During 2023 and 2022, we recognized $5 million and $1 million Gains on disposal of discontinued business, net of income taxes.
For a comparative review of our consolidated results of operations and those of our reportable segments for the fiscal years ended December 31, 2023 and 2022, refer to Part II, Item 7 of our Annual Report on Form 10-K filed with the SEC on February 21, 2024.
We plan to continue using these sources to finance certain VOCRs. On September 26, 2023, we renewed our USD bank conduit facility, extending its term through September 2025.
We plan to continue using these sources to finance certain VOCRs. On December 20, 2024, we renewed our AUD/NZD bank conduit facility, extending its term through December 2026.
Any reference to a credit rating is not intended to be any guarantee or assurance of, nor should there be any undue reliance upon, any credit rating or change in credit rating, nor is any such reference intended as any inference concerning future performance, future liquidity or any future credit rating.
Any reference to a credit rating is not intended to be any guarantee or assurance of, nor should there be any undue reliance upon, any credit rating or change in credit rating, nor is any such reference intended as any inference concerning future performance, future liquidity or any future credit rating. 45 Table of Contents CASH FLOWS The following table summarizes the changes in cash, cash equivalents, and restricted cash between 2024 and 2023 (in millions).
The tables below present our segment information, followed by a discussion of each segment’s 2023 results compared to 2022 (in millions): Year Ended December 31, Net revenues 2023 2022 Vacation Ownership $ 3,041 $ 2,835 Travel and Membership 711 735 Total reportable segments 3,752 3,570 Corporate and other (a) (2) (3) Total Company $ 3,750 $ 3,567 Year Ended December 31, Reconciliation of Net income to Adjusted EBITDA 2023 2022 Net income attributable to Travel + Leisure Co. shareholders $ 396 $ 357 Gain on disposal of discontinued business, net of income taxes (5) (1) Interest expense 251 195 Interest (income) (13) (6) Provision for income taxes 94 130 Depreciation and amortization 112 119 Stock-based compensation 36 42 Restructuring (b) 26 14 Legacy items 8 1 Loss on sale of business 2 — Asset impairments, net (c) 1 11 Loss on equity investment — 5 COVID-19 related costs (d) — 2 Fair value change in contingent consideration — (10) Adjusted EBITDA $ 908 $ 859 Year Ended December 31, Adjusted EBITDA 2023 2022 Vacation Ownership $ 729 $ 665 Travel and Membership 247 268 Total reportable segments 976 933 Corporate and other (a) (68) (74) Total Company $ 908 $ 859 (a) Includes the elimination of transactions between segments.
The tables below present our segment information (see Note 23— Segment Information to the Consolidated Financial Statements for a breakout of significant expenses related to our reportable segments), followed by a discussion of each segment’s 2024 results compared to 2023 (in millions): Year Ended December 31, Net revenues 2024 2023 Vacation Ownership $ 3,171 $ 3,041 Travel and Membership 695 711 Total reportable segments 3,866 3,752 Corporate and other (a) (2) (2) Total Company $ 3,864 $ 3,750 Year Ended December 31, Reconciliation of Net income to Adjusted EBITDA 2024 2023 Net income attributable to Travel + Leisure Co. shareholders $ 411 $ 396 Gain on disposal of discontinued business, net of income taxes (33) (5) Interest expense 249 251 Interest (income) (14) (13) Provision for income taxes 135 94 Depreciation and amortization 115 112 Stock-based compensation 40 36 Restructuring (b) 16 26 Legacy items 11 8 Asset impairments, net (c) 3 1 Acquisition and divestiture related costs 2 — Integration costs 1 — Loss on sale of business — 2 Fair value change in contingent consideration (7) — Adjusted EBITDA $ 929 $ 908 Year Ended December 31, Adjusted EBITDA 2024 2023 Vacation Ownership $ 764 $ 729 Travel and Membership 251 247 Total reportable segments 1,015 976 Corporate and other (a) (86) (68) Total Company $ 929 $ 908 (a) Includes the elimination of transactions between segments. 39 Table of Contents (b) Includes $1 million of stock-based compensation expense during 2024 associated with the 2022 restructuring plan and $2 million of stock-based compensation expense during 2023 associated with the 2023 restructuring plan.
Such agreements are generally for terms of one year or less and are renewed automatically on an annual basis. Our management agreements contain cancellation clauses, which allow for either party to cancel the agreement, by either a majority board vote or a majority vote of non-developer interests.
Our management agreements contain cancellation clauses, which allow for either party to cancel the agreement, by either a majority board vote or a majority vote of non-developer interests.
Gain on disposal of discontinued business, net of income taxes increased $4 million during 2023 compared with 2022 primarily resulting from the release of an expired guarantee related to the sale of the European vacation rentals business in 2023.
Gain on disposal of discontinued business, net of income taxes increased $28 million during 2024 compared with 2023 driven by the release of expired guarantees of $32 million, net of tax in 2024, related to the sale of the European vacation rentals business.
During 2021, we recognized a Loss on disposal of discontinued business, net of income taxes of $5 million. During 2022, we had $5 million of Net cash used in investing activities from discontinued operations on the Consolidated Statements of Cash Flows. See Note 6— Discontinued Operations to the Consolidated Financial Statements for additional information.
During 2024, we had $1 million of Net cash provided by investing activities from discontinued operations and in 2022 we had $5 million of Net cash used in investing activities from discontinued operations on the Consolidated Statements of Cash Flows. See Note 6— Discontinued Operations to the Consolidated Financial Statements for additional details of our discontinued operations.
THE YEAR ENDED DECEMBER 31, 2022 Our consolidated results are as follows (in millions): Year Ended December 31, 2023 2022 Favorable/ (Unfavorable) Net revenues $ 3,750 $ 3,567 $ 183 Expenses 3,028 2,914 (114) Loss on sale of business 2 — (2) Operating income 720 653 67 Interest expense 251 195 (56) Other (income), net (3) (22) (19) Interest (income) (13) (6) 7 Income before income taxes 485 486 (1) Provision for income taxes 94 130 36 Net income from continuing operating 391 356 35 Gain on disposal of discontinued business, net of income taxes 5 1 4 Net income attributable to Travel + Leisure Co. shareholders $ 396 $ 357 $ 39 Net revenues increased $183 million during 2023 compared with 2022.
THE YEAR ENDED DECEMBER 31, 2023 Our consolidated results are as follows (in millions): Year Ended December 31, 2024 2023 Favorable/ (Unfavorable) Net revenues $ 3,864 $ 3,750 $ 114 Expenses 3,131 3,028 (103) Loss on sale of business — 2 2 Operating income 733 720 13 Interest expense 249 251 2 Interest (income) (14) (13) 1 Other (income), net (15) (3) 12 Income before income taxes 513 485 28 Provision for income taxes 135 94 (41) Net income from continuing operations 378 391 (13) Gain on disposal of discontinued business, net of income taxes 33 5 28 Net income attributable to Travel + Leisure Co. shareholders $ 411 $ 396 $ 15 Net revenues increased $114 million during 2024 compared with 2023.
Excluding the impacts of foreign currency, the increase in net revenues was primarily due to: • $212 million of increased revenues at our Vacation Ownership segment primarily due to an increase in gross VOI sales, net of Fee-for-Service sales as a result of increased tours, partially offset by an increase in our provision for loan losses associated with these sales; higher property management revenues resulting from higher property management fees and reimbursable revenues; increased other revenues due to higher VOI travel package and incentive revenues; an increase in consumer financing revenues primarily due to a higher average portfolio balance; and increased commission revenues due to higher volume of VOI Fee-for-Service sales; partially offset by • $23 million of decreased revenues at our Travel and Membership segment primarily due to lower transactions, partially offset by increased revenue per transaction.
Excluding the impacts of foreign currency, the increase in net revenues was primarily due to: • $131 million of increased revenues at our Vacation Ownership segment primarily due to an increase in net VOI sales as a result of increased tours, partially offset by a decrease in VPG due to a higher new owner transaction mix which generally produce lower VPGs; higher property management revenues resulting from higher property management fees and reimbursable revenues; and an increase in consumer financing revenues primarily due to a higher average portfolio balance; partially offset by a decrease in commission revenues due to lower volume of VOI Fee-for-Service sales as a result of fewer commitments.
Pillar Two The Organization for Economic Co-operation and Development (“OECD”), continues to put forth various initiatives, including Pillar Two rules which include the introduction of a global minimum tax at a rate of 15%.
There is no immediate earnings impact for us, but we expect this business to drive incremental growth starting in 2026. Pillar Two The Organization for Economic Co-operation and Development (“OECD”), continues to put forth various initiatives, including Pillar Two rules which include the introduction of a global minimum tax at a rate of 15%.
These ratios do not include interest expense or indebtedness related to any qualified securitization financing (as defined in the credit agreement). As of December 31, 2023, we were in compliance with the financial covenants described above. On March 30, 2023, we entered into the fourth amendment to the credit agreement governing our revolving credit facility and term loan B facilities.
These ratios do not include interest expense or indebtedness related to any qualified securitization financing (as defined in the credit agreement). As of December 31, 2024, we were in compliance with the financial covenants described above. Secured Notes and Term Loan B facilities We generally utilize borrowing via secured note issuances to meet our long-term financing needs.
Year Ended December 31, Cash provided by/(used in): 2023 2022 Change Operating activities $ 350 $ 442 $ (92) Investing activities Continuing operations (80) (45) (35) Discontinued operations — (5) 5 Financing activities (500) (196) (304) Effects of changes in exchange rates on cash and cash equivalents — (5) 5 Net change in cash, cash equivalents and restricted cash $ (230) $ 191 $ (421) Operating Activities Net cash provided by operating activities was $350 million for the year ended December 31, 2023, compared to $442 million in the prior year.
Year Ended December 31, Cash provided by/(used in): 2024 2023 Change Operating activities $ 464 $ 350 $ 114 Investing activities Continuing operations (125) (80) (45) Discontinued operations 1 — 1 Financing activities (458) (500) 42 Effect of changes in exchange rates on cash, cash equivalents and restricted cash (11) — (11) Net change in cash, cash equivalents and restricted cash $ (129) $ (230) $ 101 Operating Activities Net cash provided by operating activities increased $114 million for the year ended December 31, 2024 compared to the prior year.
Any assessments collected from the owners of the VOIs would reduce the maximum potential amount of future payments to be made by us. Additionally, should we be required to fund the deficit through the payment of any owners’ assessments under these guarantees, we would be permitted to use that property to engage in revenue-producing activities such as rentals.
Additionally, should we be required to fund the deficit through the payment of any owners’ assessments under these guarantees, we would be permitted to use that property to engage in revenue-producing activities such as rentals. During 2024, 2023, and 2022, we made payments related to these guarantees of $13 million, $12 million, and $12 million.
Sports Illustrated Resorts Agreement On September 11, 2023, we entered into an agreement to acquire the rights to the vacation ownership business of Sports Hospitality Ventures, LLC (“SHV”), a hotel and resorts licensee for the Sports Illustrated brand.
Sports Illustrated Resorts On September 11, 2023, we entered into an agreement to acquire the rights to the vacation ownership business of Sports Hospitality Ventures, LLC (“SHV”), and introduced a new concept for a network of sports-themed resort and lifestyle complexes in popular college towns and leisure destinations under the Sports Illustrated Resorts brand.
Travel and Membership Net revenues decreased $24 million and Adjusted EBITDA decreased $21 million during 2023 compared with 2022. The net revenue decrease was unfavorably impacted by foreign currency of $1 million (0.1%) and the Adjusted EBITDA decrease was unfavorably impacted by foreign currency of $5 million (1.9%).
Travel and Membership Net revenues decreased $16 million and Adjusted EBITDA increased $4 million during 2024 compared with 2023. The net revenue decrease was unfavorably impacted by foreign currency of $2 million (0.3%) and the Adjusted EBITDA growth was not materially impacted by foreign currency.
We are not able to estimate the maximum potential amount of future payments to be made under these guarantees and indemnifications as the triggering events are not predictable. In certain cases we receive offsetting indemnifications from third-parties and/or maintain insurance coverage that may mitigate any potential payments.
We are not able to estimate the maximum potential amount of future payments to be made under these guarantees and indemnifications as the triggering events are not predictable.
We believe that Gross VOI sales provides an enhanced understanding of the performance of our Vacation Ownership business because it directly measures the sales volume of this business during a given reporting period. (b) Represents the number of tours taken by guests in our efforts to sell VOIs.
(b) Represents total sales of VOIs, including sales under the Fee-for-Service program, before the effect of loan loss provisions. We believe that Gross VOI sales provides an enhanced understanding of the performance of our Vacation Ownership business because it directly measures the sales volume of this business during a given reporting period.
(e) Excludes a $31 million liability for unrecognized tax benefits as it is not reasonably estimable to determine the periods in which such liability would be settled with the respective tax authorities.
(d) Includes $502 million for marketing related activities, $116 million relating to the development of vacation ownership properties, and $106 million for information technology activities. (e) Excludes a $30 million liability for unrecognized tax benefits as it is not reasonably estimable to determine the periods in which such liability would be settled with the respective tax authorities.
We generally utilize letters of credit to support the securitization of VOCR fundings, certain insurance policies, and development activities in our Vacation Ownership business. As of December 31, 2023, we had $47 million of irrevocable standby letters of credit outstanding, $2 million of which were under our revolving credit facilities.
As of December 31, 2024 and 2023, we had no recognized liabilities in connection with these guarantees. We generally utilize letters of credit to support the securitization of VOCR fundings, certain insurance policies, and development activities in our Vacation Ownership business.
The net revenue growth was unfavorably impacted by foreign currency of $6 million (0.2%) and Adjusted EBITDA growth was unfavorably impacted by foreign currency of $3 million (0.5%). 38 Table of Contents The net revenue growth excluding the impact of foreign currency was primarily driven by: • $149 million increase in gross VOI sales, net of Fee-for-Service sales, due to increased tours, partially offset by a decrease in VPG due to higher mix of new owner tours (52% in the current year compared to 45% in the same period of 2022) which generally produce lower sales volume and lower close rates; • $52 million increase in property management revenues primarily due to higher management fees and reimbursable revenues; • $22 million increase in other revenues due to higher VOI travel package and incentive revenues; • $21 million increase in consumer financing revenues primarily due to a higher average portfolio balance; and • $15 million increase in commission revenues due to the volume of VOI Fee-for-Service sales.
The net revenue growth excluding the impact of foreign currency was primarily driven by: • $224 million increase in Gross VOI sales, net of Fee-for-Service sales, due to an 8.0% increase in tours, partially offset by a 1.1% decrease in VPG due to a higher new owner transaction mix (35% in the current year compared to 33% in the same period of 2023) which generally produce lower VPGs; • $32 million increase in property management revenues primarily due to higher management fees and reimbursable revenues; and a • $23 million increase in consumer financing revenues primarily due to a higher average portfolio balance.
See Note 26— Restructuring to the Consolidated Financial Statements for additional details of our restructuring activities.
See Note 5— Acquisitions to the Consolidated Financial Statements for additional details.
Year Ended December 31, 2023 2022 % Change (h) Vacation Ownership Gross VOI sales (in millions) (a) (i) $ 2,149 $ 1,982 8.4 Tours (in 000s) (b) 663 561 18.2 Volume per guest (c) $ 3,128 $ 3,426 (8.7) Travel and Membership (d) Transactions (in 000s) (e) Exchange 959 1,022 (6.2) Travel Club 679 709 (4.2) Total transactions 1,638 1,731 (5.4) Revenue per transaction (f) Exchange $ 357 $ 341 4.8 Travel Club $ 230 $ 241 (4.4) Total revenue per transaction $ 305 $ 300 1.6 Average number of exchange members (in 000s) (g) 3,515 3,524 (0.2) (a) Represents total sales of VOIs, including sales under the Fee-for-Service program before the effect of loan loss provisions.
Year Ended December 31, 2024 2023 % Change (h) Vacation Ownership (a) Gross VOI sales (in millions) (b) (i) $ 2,293 $ 2,149 6.7 Tours (in 000s) (c) 716 663 8.0 Volume per guest (d) $ 3,094 $ 3,128 (1.1) Travel and Membership (a) Transactions (in 000s) (e) Exchange 889 959 (7.2) Travel Club 673 679 (1.0) Total transactions 1,562 1,638 (4.6) Revenue per transaction (f) Exchange $ 360 $ 357 0.8 Travel Club $ 247 $ 230 7.5 Total revenue per transaction $ 312 $ 305 2.3 Average number of exchange members (in 000s) (g) 3,427 3,515 (2.5) (a) Includes the impact of acquisitions from the acquisition dates forward.
The maximum potential future payments that we could be required to make under these guarantees was $473 million as of December 31, 2023. We would only be required to pay this maximum amount if none of the assessed owners paid their assessments.
We would only be required to pay this maximum amount if none of the assessed owners paid their assessments. Any assessments collected from the owners of the VOIs would reduce the maximum potential amount of future payments we would be required to make.
This increase in expenses, excluding immaterial foreign currency impacts, was primarily the result of: • $56 million increase in marketing costs mainly in support of increased tour flow and new owner mix at our Vacation Ownership business; • $45 million increase in property management expenses due to higher reimbursable resort operating costs and expenses; • $32 million increase in consumer financing interest expense primarily due to an increased weighted average coupon rate; • $31 million increase in sales and commission expenses at the Vacation Ownership segment due to higher gross VOI sales, net of Fee-for-Service sales; and a • $12 million increase in restructuring costs as we focused on enhancing organizational efficiency and rationalizing operations.
Excluding the impacts of foreign currency, the increase in expenses was primarily the result of: • $64 million increase in sales and commission expenses at the Vacation Ownership segment due to higher Gross VOI sales, net of Fee-for-Service sales; • $43 million increase in marketing costs primarily due to an increase at our Vacation Ownership business in support of increased tour flow and new owner mix, partially offset by cost savings at the Travel and Membership segment; • $29 million increase in property management expenses due to higher reimbursable resort operating costs and expenses; • $24 million increase in consumer financing interest expense primarily due to a higher average non-recourse debt balance and increased weighted average coupon rate; and a • $21 million increase in general and administrative expenses driven by variable compensation and other employee related costs.
These increases were partially offset by a $47 million increase in our provision for loan losses primarily due to higher gross VOI sales, net of Fee-for-Service sales.
These increases were partially offset by a $84 million increase in our provision for loan losses primarily due to higher Gross VOI sales, net of Fee-for-Service sales and a higher provision rate resulting from a slight elevation in delinquencies and defaults, and a $63 million decrease in commission revenues due to lower volume of VOI Fee-for-Service sales as a result of fewer commitments.
Total deficit increased $13 million from December 31, 2022 to December 31, 2023, primarily due to $307 million of share repurchases and $137 million of dividends; partially offset by $396 million of Net income attributable to Travel + Leisure Co. shareholders and a $37 million increase in additional paid-in capital, primarily due to stock-based compensation.
Total deficit decreased $37 million from December 31, 2023 to December 31, 2024, primarily due to $411 million of Net income attributable to Travel + Leisure Co. shareholders and a $49 million increase in additional paid-in capital, primarily due to stock-based compensation; partially offset by $235 million of share repurchases and $144 million of dividends, and $42 million of unfavorable currency translation adjustments driven by fluctuations in exchange rates, primarily the Australian Dollar, Euro, and the British Pound Sterling.
OPERATING STATISTICS The table below presents our operating statistics for the years ended December 31, 2023 and 2022. These operating statistics are the drivers of our revenues and therefore provide an enhanced understanding of our businesses. Refer to “The Year Ended December 31, 2023 vs.
Our presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies. 36 Table of Contents OPERATING STATISTICS The table below presents our operating statistics for the years ended December 31, 2024 and 2023. These operating statistics are the drivers of our revenues and therefore provide an enhanced understanding of our businesses.
We believe that VPG provides an enhanced understanding of the performance of our Vacation Ownership business because it directly measures the efficiency of this business’ tour selling efforts during a given reporting period. (d) Includes the impact of acquisitions from the acquisition dates forward.
We believe that VPG provides an enhanced understanding of the performance of our Vacation Ownership business because it directly measures the efficiency of this business’ efforts in generating sales from tours during a given reporting period. (e) Represents the number of exchanges and travel bookings recognized as revenue during the period, net of cancellations.
As of December 31, 2022, we had $34 million of irrevocable standby letters of credit outstanding, none of which were under our revolving credit facilities. We also utilize surety bonds in our Vacation Ownership business for sales and development transactions in order to meet regulatory requirements of certain states.
We also utilize surety bonds in our Vacation Ownership business for sales and development transactions in order to meet regulatory requirements of certain states. In the ordinary course of our business, we have assembled commitments from 13 surety providers in the amount of $2.38 billion, of which we had $550 million outstanding as of December 31, 2024.
This increase was primarily due to the $400 million repayment of the 3.90% secured notes during the first quarter of 2023 partially offset by higher net proceeds on non-recourse debt and decreased share repurchases in the current year. Capital Deployment We focus on deploying capital for the highest possible returns.
Financing Activities Net cash used in financing activities decreased $42 million during the year ended December 31, 2024. This decrease was primarily due to a $75 million decrease in share repurchases partially offset by a $41 million decrease in net proceeds on non-recourse debt. Capital Deployment We focus on deploying capital for the highest possible returns.
However, events that are outside of our control cannot be predicted and, as such, they cannot be contemplated in evaluating such estimates and assumptions. If there is a significant unfavorable change to current conditions, it could result in a material impact to our consolidated results of operations, financial position, and liquidity.
If there is a significant unfavorable change to current conditions, it could result in a material impact to our consolidated results of operations, financial position, and liquidity. We believe that the estimates and assumptions we used when preparing our financial statements were the most appropriate at that time.
The decrease in net revenues excluding the impact of foreign currency was primarily driven by lower transactions, partially offset by increased revenue per transaction. Transactions were impacted by an increasing mix of exchange members with a club affiliation. who have a lower transaction propensity.
Transactions were impacted by an increasing mix of exchange members with a club affiliation who have a lower transaction propensity.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+3 added−2 removed10 unchanged
Biggest changeWhile probably the most meaningful analysis, these “shock tests” are constrained by several factors, including the necessity to conduct the analysis based on a single point in time and the inability to include the complex market reactions that normally would arise from the market shifts modeled. 48 Table of Contents We used December 31, 2023 market rates on outstanding financial instruments to perform the sensitivity analysis separately for each of our market risk exposures: interest and foreign currency rate instruments.
Biggest changeThere are certain limitations inherent in the sensitivity analyses presented. While probably the most meaningful analysis, these “shock tests” are constrained by several factors, including the necessity to conduct the analysis based on a single point in time and the inability to include the complex market reactions that normally would arise from the market shifts modeled.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We use various financial instruments, particularly interest rate caps and interest rate swaps, to manage and reduce the interest rate risk related to our debt.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We use various financial instruments, particularly interest rate caps, to manage and reduce the interest rate risk related to our debt.
The primary assumption used in these models is a hypothetical 10% weakening or strengthening of the U.S. dollar against all our currency exposures as of December 31, 2023. As of December 31, 2023, the absolute notional amount of our outstanding foreign exchange hedging instruments was $61 million.
The primary assumption used in these models is a hypothetical 10% weakening or strengthening of the U.S. dollar against all our currency exposures as of December 31, 2024 and 2023. As of December 31, 2024 and 2023, the absolute notional amount of our outstanding foreign exchange hedging instruments was $72 million and $61 million.
A 100-basis point change in the underlying interest rates would result in a $4 million increase or decrease in annual consumer financing interest expense and a $9 million increase or decrease in our annual debt interest expense.
A 100-basis point change in the underlying interest rates would result in a $4 million increase or decrease in annual consumer financing interest expense and a $11 million increase or decrease in our annual debt interest expense.
The estimates are based on the market risk sensitive portfolios described in the preceding paragraphs and assume instantaneous, parallel shifts in interest rate yield curves and exchange rates. There were no changes to the assumptions used in this model in 2023. 49 Table of Contents
The estimates are based on the market risk sensitive portfolios described in the preceding paragraphs and assume instantaneous, parallel shifts in interest rate yield curves and exchange rates. There were no changes to the assumptions used in this model in 2024. 50 Table of Contents
We used December 31, 2023 market rates to perform a sensitivity analysis separately for each of our market risk exposures. The estimates assume instantaneous, parallel shifts in interest rate yield curves and exchange rates.
We used December 31, 2024 and 2023 market rates to perform sensitivity analyses separately for each of our market risk exposures. The estimates assume instantaneous, parallel shifts in interest rate yield curves and exchange rates.
Our variable rate borrowings, which include our term loan B facilities, non-recourse conduit facilities, and revolving credit facility, expose us to risks caused by fluctuations in the applicable interest rates. The total outstanding balance of such variable rate borrowings at December 31, 2023 was $364 million in non-recourse debt and $867 million in corporate debt.
Our variable rate borrowings, which include our term loan B facilities, non-recourse conduit facilities, and revolving credit facility, expose us to risks caused by fluctuations in the applicable interest rates. The total outstanding balance of such variable rate borrowings at December 31, 2024 was $377 million in non-recourse debt and $1.06 billion in corporate debt.
We have determined that a hypothetical 10% change in the foreign currency exchange rates would have resulted in an approximate increase or decrease to the fair value of our outstanding forward foreign currency exchange contracts of $5 million, which would generally be offset by an opposite effect on the underlying exposure being economically hedged.
We have determined that a hypothetical 49 Table of Contents 10% change in the foreign currency exchange rates would have resulted in an approximate increase or decrease to the fair value of our outstanding forward foreign currency exchange contracts of approximately $6 million during 2024 and $5 million during 2023, which would generally be offset by an opposite effect on the underlying exposure being economically hedged.
Our principal market exposures are interest rate and foreign currency rate risks. • Our primary interest rate exposures as of December 31, 2023, are to interest rate fluctuations in asset-backed commercial paper interest rates and SOFR interest rates due to their impact on variable rate borrowings and other interest rate sensitive liabilities.
Our principal market exposures are interest rate and foreign currency rate risks. • Our primary interest rate exposures as of December 31, 2024, are to interest rate fluctuations in asset-backed commercial paper interest rates and Simple Secured Overnight Financing (“SOFR”) interest rates due to their impact on variable rate borrowings and other interest rate sensitive liabilities.
We have determined, through such analyses, that a hypothetical 10% change in the interest rates would have resulted in a $2 million increase or decrease in annual consumer financing interest expense and $5 million increase or decrease in annual debt interest expense.
We have determined, through such analyses, that a hypothetical 10% change in the interest rates would have resulted in a $2 million increase or decrease in annual consumer financing interest expense and $5 million increase or decrease in annual debt interest expense for both the years ended December 31, 2024 and 2023.
This change became effective on March 31, 2023, for both new borrowings and rollovers of then existing USD LIBOR based borrowings (except Base Rate borrowings) and eliminated our exposure to LIBOR. In addition, interest rate movements in one country, as well as relative interest rate movements between countries, can impact us.
In addition, interest rate movements in one country, as well as relative interest rate movements between countries, can impact us.
Removed
In the first quarter of 2023, we amended the credit agreement governing our revolving credit facility and term loan B facilities to replace LIBOR with Term SOFR as the benchmark rate.
Added
The total outstanding balance of such variable rate borrowings at December 31, 2023 was $364 million in non-recourse debt and $867 million in corporate debt.
Removed
There are certain limitations inherent in the sensitivity analyses presented.
Added
A 100-basis point change in the underlying interest rates would have resulted in a $4 million increase or decrease in annual consumer financing interest expense and a $9 million increase or decrease in our annual debt interest expense.
Added
We used December 31, 2024 and December 31, 2023 market rates on outstanding financial instruments to perform the sensitivity analyses separately for each of our market risk exposures: interest and foreign currency rate instruments.

Other TNL 10-K year-over-year comparisons