MARRIOTT VACATIONS
WORLDWIDE
NYSE: VAC (Buy)
Stock Overview
• Price: 54.95
52 week low: 40.42
• Market Cap: 1.91B 52 week high: 58.14
Beta: 1.52
Valuation
VAC
Industry
P/E
23.79 (FWD: 18.63)
241.10
PEG
1.45
N/A
P/S
1.44
2.14
P/B
1.64
3.82
P/FCF
21.30
44.80
*The stock was compared to the industry because very few companies are
separated and public from the parent company in the timeshare industry
Industry/Business Overview
• A timeshare is owning a certain property for
period of time
• Key players include Marriott, Hilton, Hyatt,
Exclusive, Four seasons, Diamond, Disney, and
Wyndham
• Key Factors are:
number and
locations of hotels,
size of customer
base, quality, &
features
Industry/Business Overview (2)
• Marriott demographic: white collar, $150K+,
college educated, 50+, with kids
• Industry demographics: $74,000 median
household income, 47% employed full time
• 83% of owners are have a good/very good
experience, 94% found their resort to be
good/very good, 79% are likely to recommend
timeshares, 66% would buy another one, 86%
would recommend their own resort to others
Thesis
• The timeshare industry was hit hard due to the
recession and Marriott Vacations is poised to
be at the forefront of the recovery
• Great expansion opportunities in Asia due to
increasing wealth there
• Also baby boomers are turning 50 in 2014
• An increasing customer base allows Marriott
to cement its position as number 1
Management
• CEO is Stephen Weiz
• President since 1996, CEO since 2011
• Joined Marriott in 1972
• Has held a variety of leadership positions
throughout his 41 year long career with Marriott
• Chairman of the Board is William Shaw
• Chairman since 2011
• Joined Marriott in 1974
• He also has held a variety of leadership positions
throughout his 39 year long career with Marriott
Key facts
• The timeshare industry as a whole benefits
from the network effect
• Marriott is the world’s largest pure-play
vacation ownership business (2012)
• Marriott has the largest customer base (from
what I could find online)
• Marriott has the second largest hotel collection
(1 hotel less than Diamond, 15 more than 3rd )
• Shifting from 60% existing and 40% new to
50% new and 50% old
Rankings and Popularity
Expansion and Brand Power
• A little less than 90% of property is utilized
• Great potential in Asia (growing wealth there)
• Most customers are concentrated in the USA
• The baby boomers are now in their 50’s
• Ritz Carlton is the most sought after brand in
its category
• In the top 10 luxury hotel Marriott has 2 (more
than any competitor)
Map
Risks
• Even one mistake could damage their brand
irreparably
• They could lose their licensing agreements
with Marriott and Ritz Carlton
• This will only happen if Marriott Vacations violates
the contract; the contract expires in 2090
• A recession would definitely hurt revenue
• Competitors could easily build more resorts
and potentially have more customers