Hilton Grand Vacations (HGV) has experienced a decline in Japanese buyers due to the weakening of the Japanese yen against the dollar. The company, which has 13 properties in Hawaii, has seen a 53% drop in new Japanese buyer arrivals compared to 2019 levels. However, HGV remains optimistic about the market, with tours for new buyers within Japan almost back to pre-pandemic levels. Existing Japanese owners have been returning to their properties, while interest in visiting Japan among Americans is on the rise.
In January, HGV completed its $1.5 billion acquisition of Bluegreen Vacations and plans to fully integrate the company into its loyalty program and sales platform by year-end. Bluegreen members will become part of HGV Max, allowing them to use points across all properties in HGV’s network, including those in Hawaii. This unified program is expected to resonate well with Bluegreen members, who have historically not been upgraded to the same degree as HGV members.
HGV is excited about leveraging Bluegreen’s marketing deal with Bass Pro Shops, which allows for the marketing and selling of vacation packages at kiosks in Bass Pro’s 200 stores. This deal has been a significant driver of sales for Bluegreen, accounting for 16% of its timeshare sales volume last year. The agreement also adds 200,000 members to HGV’s program and expands its resort portfolio to nearly 200 properties in eight new U.S. states.
In the first quarter, HGV reported a 23% increase in revenue to $1.156 billion and a 25% rise in adjusted EBITDA to $273 million. The company remains optimistic about the future despite the challenges posed by the pandemic and the changing market dynamics. HGV’s focus on integrating Bluegreen into its operations and taking advantage of its partnership with Bass Pro Shops is expected to drive growth in the timeshare sector.
The performance of hotels and short-term rental sector stocks within the ST200 index has been volatile, reflecting the challenges faced by the travel industry as a whole. The index includes companies from global markets, including international and regional hotel brands, hotel REITs, hotel management companies, alternative accommodations, and timeshares. Despite the challenges, companies like HGV are positioning themselves for growth by expanding their resort portfolio, enhancing customer loyalty programs, and leveraging strategic partnerships with retailers like Bass Pro Shops.
Overall, the timeshare sector, particularly in Hawaii and Japan, is facing unique challenges and opportunities due to changing market dynamics and consumer behavior. While the decline in Japanese buyers poses a short-term challenge for HGV, the company remains optimistic about the long-term potential of the market. By fully integrating Bluegreen into its operations, leveraging its partnership with Bass Pro Shops, and focusing on customer loyalty, HGV is well-positioned to weather the current challenges and drive growth in the timeshare sector.
