Travel + Leisure Co. Q1 2025 Earnings Highlights

Travel + Leisure Co. ((TNL)) has held its Q1 earnings call. Read on for the main highlights of the call.

Travel + Leisure Co. Reports Strong Q1 2025 Performance Amid Challenges

The recent earnings call for Travel + Leisure Co. painted a picture of robust financial health, marked by significant growth in adjusted EBITDA and substantial capital returns to shareholders. Despite these positive financial indicators, the company faces challenges in its travel and membership segment, alongside rising delinquencies in its loan portfolio. While profitability and consumer demand remain strong, macroeconomic uncertainties and specific segment issues present potential hurdles.

Strong Adjusted EBITDA Growth

Travel + Leisure Co. reported a remarkable $202 million in adjusted EBITDA for Q1 2025, landing at the high end of their guidance range. This represents a 6% increase from the previous year, showcasing the company’s ability to drive profitability even in a challenging economic environment.

Increase in Dividend and Share Repurchases

In a move to reward shareholders, the company increased its dividend by 12% to $0.56 per share and executed $70 million in share repurchases. This resulted in a total of $111 million returned to shareholders in the first quarter, reflecting strong confidence in the company’s financial position.

High Volume Per Guest (VPG)

The company reported a VPG of $3,212, significantly above the $3,000 mark. This indicates robust consumer demand for vacation ownership, a positive sign for the company’s core business.

Positive Consumer KPIs

Despite macroeconomic uncertainties, consumer KPIs remained strong. The company noted accelerated resort bookings and a high search-to-book conversion rate via the Club Wyndham app, underscoring the effectiveness of their digital investments.

Successful ABS Transaction

Travel + Leisure Co. successfully closed a $350 million ABS transaction with favorable terms, including a 98% advance rate and a 5.2% interest rate, further strengthening their financial position.

Decline in Travel and Membership Segment

The company experienced a 7% revenue decline in their travel and membership segment, with a notable 13% drop in exchange transactions. However, there was a 3% growth in travel club transactions, offering a silver lining.

Increased Delinquencies in Loan Portfolio

The anticipated improvement in portfolio delinquencies from December to March did not materialize, resulting in a higher provision rate of 21% in the full-year EBITDA guidance, highlighting a key area of concern.

Uncertainty in Macro Outlook

The company acknowledged incremental uncertainty in the macroeconomic outlook and a decline in consumer sentiment throughout 2025, which could impact future performance.

Forward-Looking Guidance

Looking ahead, Travel + Leisure Co. remains optimistic, maintaining their full-year adjusted EBITDA guidance of $955 to $985 million. They expect Q2 adjusted EBITDA to be between $245 million and $255 million, with a focus on managing delinquencies and optimizing tour flow. The company is confident in its strong forward bookings and resilient consumer demand, supported by technological investments like the Club Wyndham app.

In summary, Travel + Leisure Co.’s Q1 2025 earnings call highlighted a strong financial performance, with significant growth in adjusted EBITDA and shareholder returns. However, challenges in the travel and membership segment and increased loan delinquencies present areas of concern. The company remains optimistic about its future, supported by strong consumer demand and strategic investments in technology.