Travel + Leisure Says It Is 'Open To Alternatives' For Its Shrinking Exchange And Travel Club Unit
The CFO said a sale could make sense if it unlocks more value than owning the unit, whose third-quarter revenue fell 11%.
Travel + Leisure, the timeshare company that also runs the RCI exchange network and travel clubs, is open to a deal for that unit, Chief Financial Officer Erik Hoag said on the company's third-quarter earnings call Tuesday. The travel and membership segment's revenue fell 11% to $150 million in the quarter, and EBITDA fell 12% to $51 million.
Asked about a deal, Hoag leaves the door open
A Deutsche Bank analyst asked whether anything new was afoot for travel and membership, noting a decent industry backdrop for mergers. Hoag called the unit an important contributor to EBITDA and cash flow that helps fund growth and shareholder returns.
"We remain open to alternatives," he said, and the company would weigh opportunities when a transaction "could unlock greater shareholder value than continued ownership." In the meantime, he said, the company will try to turn the revenue curve around and wring out every bit of cash flow.
The company reported that lower exchange transaction volume and a higher mix of travel club transactions drove the segment's decline.
Cost cuts reach about 300 employees
Hoag said a third-quarter cost program impacted roughly 300 employees, and that the company will keep pushing efficiency while the unit faces top-line headwinds. He said the actions take out $16 million of costs, to align the cost structure with the revenue trend; they are already built into the mid-single-digit 2027 core growth outlook. In his prepared remarks he put the annualized savings at about $16 million, with most of the benefit in 2027.
Consolidation blamed for fewer transactions
CEO Michael Brown said the decline is structural. As the industry consolidated over the past decade, clubs grew larger and owners tend to stay within them, so member counts hold steady while the propensity to transact falls year over year.
Brown said the company is making a noticeable investment in the exchange platform to allow self-service booking in 2027, similar to what it has done with Club Wyndham, WorldMark and its internal apps.
The stronger half of the company
The unit sits beside a larger vacation ownership business, which sells timeshare interests under brands such as Club Wyndham and WorldMark. Company-wide third-quarter revenue grew 5% to $1.1 billion, EBITDA rose 6%, and earnings per share rose 23% to $2.21, Hoag said. The company narrowed full-year gross sales and EBITDA guidance to the top end of its ranges and raised its earnings-per-share outlook. Its market value was about $4.0 billion at the time of the call.
Management will next update investors on its 2027 framework when it reports in February, Brown said.
Sources
- Travel + Leisure Co. (TNL) Tops Q3 Earnings and Revenue Estimates — Yahoo Finance
- Travel+Leisure beats top-line and bottom-line estimates; updates FY26 outlook | Seeking Alpha — seekingalpha.com
- Travel + Leisure Co. Reports Third Quarter 2026 Results — businesswire.com
- Vacation Lodging Breaking News and Press Releases — businesswire.com
