What changed in this filing

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Item 1. Business

2023-02-22 compared with 2022-02-23 · 158 added, 183 removed, 305 unchanged (53% of the section changed)

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Travel + Leisure Co.

is the world’s leading membership and leisure travel company, with nearly 20 travel brands across our resort, travel club, and lifestyle portfolio.

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.

Travel + Leisure Co.

has the following business lines:

• Wyndham Destinations , the world’s largest vacation ownership company with more than 245 vacation club resort locations across the globe operating under the following brands:

Club Wyndham, WorldMark by Wyndham, Shell Vacations Club, Margaritaville Vacation Club by Wyndham, and Presidential Reserve by Wyndham.

• Panorama , the world’s foremost membership travel business that includes the largest vacation exchange company, RCI, and Panorama Travel Solutions, which operates business-to-business (“B2B”) travel membership programs.

The following brands operate under the Panorama business line:

RCI, Panorama Travel Solutions, Alliance Reservations Network (“ARN”), 7Across, The Registry Collection, and Love Home Swap.

• Travel + Leisure Group , which offers travel services featuring top travel content and expertise, including Travel + Leisure Club, Travel + Leisure GO, and Extra Holidays.

has the following business segments:

• Wyndham Destinations is the world’s largest vacation ownership company with 816,000 owners and more than 245 vacation club resort locations.

• Travel and Membership includes our Exchange and Travel Club business lines.

RCI, which is the world’s largest exchange company, has 3.5 million members and more than 4,100 affiliated resorts in its network.

Our Travel Club business line includes:

our RCI travel club, which seeks to capture greater share of our members non-exchange travel budgets;

our B2B travel clubs, which offer white-label solutions to associations, organizations, and other closed user groups;

and Travel + Leisure GO, which provides a travel club offering direct to consumers.

History and Development

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The two public companies have also entered into long-term exclusive license agreements to retain their affiliations with one of the industry’s top-rated loyalty programs, Wyndham Rewards, as well as to continue to collaborate on inventory-sharing and customer cross-selling initiatives.

On January 5, 2021, we acquired the Travel + Leisure brand and all related assets from Meredith Corporation (“Meredith”).

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 Meredith, with 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.

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.

In connection with this acquisition, on February 17, 2021, Wyndham Destinations, Inc.

was renamed Travel + Leisure Co.

and continues to trade on the NYSE under the new ticker symbol TNL.

and trades on the NYSE under the ticker symbol TNL.

See Note 5— Acquisitions to the Consolidated Financial Statements for more information.

Business Strategy

We are primarily focused on leisure travel and our mission is to “Put the World on Vacation.” Travel + Leisure Co.

We are focused on leisure travel and our mission is to “Put the World on Vacation.” Travel + Leisure Co.

has been a leader in the travel membership business for over 50 years.

Our strategy is to accelerate 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 our business extensions, Panorama Travel Solutions and the Travel + Leisure Group.

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.

BUSINESS DESCRIPTIONS

We report results of operations for our three umbrella business lines in the following financial reporting segments, which are described in more detail below:

We report results of operations for the following reportable segments, which are described in more detail below:

• Vacation Ownership, comprised of Wyndham Destinations.

• Travel and Membership , comprised of Panorama and the Travel + Leisure Group.

• Travel and Membership , comprised of Exchange and Travel Club.

Our business segments generate diversified revenue streams and significant cash flow.

Prior to COVID-19, we generated 46% of our revenues from the sale of vacation ownership interests, and 40% of our revenues from our Fee-for-Service businesses.

This split was 23% and 53% in 2020 as a result of COVID-19, partially recovering to 38% and 48% in 2021.

In 2022, we generated 42% of our revenues from the sale of vacation ownership interests, and 45% of our revenues from our fee-for-service businesses.

Our businesses have both domestic and international operations.

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In addition, points-owners can vary the length and frequency of product utilization.

According to a 2021 report issued by the American Resort Development Association, domestic vacation ownership sales were $4.9 billion during 2020.

The pandemic impacted key industry performance measures in 2020 and industry sales decreased for

the first time in more than a decade.

In 2019, domestic vacation ownership interest sales were $10.5 billion and in 2018, industry sales were $10.2 billion.

Typically, developers sell VOIs for a fixed purchase price that is paid in full at closing or financed through developer-offered financing options.

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This fee represents the owner’s allocable share of the costs and expenses of operating and maintaining the vacation ownership property and providing program services.

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, common areas and other assets, such as structural elements and equipment, as needed over time.

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.

Based on published industry data, owners express the following primary reasons for buying and continuing to own their timeshare:

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Vacation Ownership Overview

Our Vacation Ownership reportable segment is comprised of our Wyndham Destinations branded business line, which is the world’s largest vacation ownership business.

We develop and acquire vacation ownership resorts, market and sell VOIs, provide consumer financing for the majority of the sales, and provide property management services to property owners’ associations.

Our Vacation Ownership reportable segment is comprised of our Wyndham Destinations branded business line, which is the world’s largest vacation ownership business based on number of resorts and owners.

We develop and acquire vacation ownership resorts, market and sell VOIs, provide consumer financing for the majority of the VOI sales, and provide property management services to property owners’ associations.

As of December 31, 2022, we had more than 245 vacation ownership resorts in the U.S., Canada, Mexico, Caribbean, and Asia Pacific that represent over 26,800 individual vacation ownership units and 816,000 owners of VOIs.

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We have strong embedded revenue potential through our existing owner base:

owners upgrade as vacation needs evolve.

owners tend to upgrade as vacation needs evolve.

We earn interest revenue on our portfolio as well as club and resort management fees.

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Maximize our relationship with Wyndham Hotels.

We have a long-term, exclusive license agreement and marketing arrangements with Wyndham Hotels, the world’s largest hotel franchiser with approximately 9,000 affiliated hotels located in approximately 95 countries.

The Wyndham loyalty program, Wyndham Rewards, has over 92 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 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 9,100 affiliated hotels located in over 95 countries.

The Wyndham loyalty program, Wyndham Rewards, has approximately 99 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.

Volume per guest on affinity marketing tours is higher than other tours, helping to increase margins on new owner sales.

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.

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Maintain a capital-efficient inventory sourcing strategy to produce attractive returns and cash flow .

We have a diverse inventory sourcing model, including self-developed inventory, Just-in-Time inventory, Fee-for-Service inventory, consumer

loan defaults, and inventory reclaimed from owners’ associations or owners that allow us to generate VOI sales.

We have a diverse inventory sourcing model that allows us to generate VOI sales.

These sources include self-developed inventory, Just-in-Time inventory, Fee-for-Service inventory, inventory reclaimed from consumer loan defaults and owners’ associations or owners.

Our capital-efficient inventory sourcing strategy has significantly increased return on invested capital since 2010.

Revenues and Operating Statistics

Our vacation ownership business derives a majority of its revenues from timeshare sales, with the remainder of revenues coming from consumer financing and property management fees.

Our Vacation Ownership business derives a majority of its revenues from timeshare sales, with consumer financing and property management fees being the other main sources of revenue.

Performance in our vacation ownership business is measured by the following key operating statistics:

• Gross vacation ownership interest sales — Sales of VOIs including Fee-for-Service sales, before the effect of loan loss provisions.

• 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 tele-sales upgrades, which are non-tour upgrade sales) divided by the number of tours.

We have excluded non-tour upgrade sales in the calculation of VPG because they are generated by a different marketing channel.

• Volume per guest (“VPG”) — Gross VOI sales (excluding telesales and virtual sales) divided 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.

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 off-site sales offices.

Our resort-based sales centers also enable us to actively solicit upgrade sales to existing owners of VOIs while they vacation at our resorts.

We operate a tele-sales program designed to market upgrade sales to existing owners of our products.

Additionally, we operate telesales and virtual sales programs designed to reach and solicit upgrade sales to existing owners we were not able to market to during their vacations.

In total VOI upgrade sales represented 70% and 72% of our net VOI sales in 2022 and 2021.

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We offer financing to purchasers of VOIs which attracts additional customers and generates substantial incremental revenues and profits.

We fund and service loans through our wholly-owned consumer financing subsidiary, Wyndham Consumer Finance.

Wyndham Consumer Finance performs loan financing, servicing, and related administrative functions.

Domestically, we fund and service loans through our wholly-owned consumer financing subsidiary, Wyndham Consumer Finance.

Wyndham Consumer Finance performs loan financing, servicing, and related administrative functions, including customer service, billing, and collection activities.

We typically perform a credit investigation or other inquiry into a purchaser’s credit history before offering to finance a portion of the purchase price of the VOI.

The interest rate offered to participating purchasers is determined by an automated underwriting process based upon the purchaser’s credit score and the amount of the down payment.

The interest rate offered to participating purchasers is determined by an automated underwriting process based upon the purchaser’s credit score.

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 736 and 735 for 2021 and 2020.

During 2021, we generated $780 million of receivables on $1.31 billion of gross VOI sales, net of Fee-for-Service sales, resulting in 60% of our VOI sales being financed.

This level of financing is prior to the receipt of addenda cash.

Addenda cash represents the cash received for full payment of a loan within 15 to 60 days of origination.

After the application of addenda cash, we financed 53% of VOI sales during 2021.

We generally require a minimum down payment of 10% of the purchase price on all VOI sales and offer consumer financing for the remaining balance for up to 10 years.

While the minimum down payment is generally 10%, our average down payment on financed VOI sales was 24% and 25% for 2021 and 2020.

Our weighted average FICO score on new originations was 736 for both 2022 and 2021.

We typically require a minimum down payment of 10% of the purchase price on all VOI sales and offer consumer financing for the remaining balance for up to 10 years.

These loans are structured with equal monthly installments that fully amortize the principal by the final due date.

While the minimum down payment is typically 10%, our average down payment on financed VOI sales was 19% and 24% for 2022 and 2021.

The decrease in the average down payment is attributable to our efforts to increase the percentage of the VOI sale amount financed by owners in order to accelerate the growth of consumer financing revenue.

During 2022, we generated $1.14 billion of receivables on $1.79 billion of gross VOI sales, net of Fee-for-Service sales, resulting in 64% of our VOI sales being financed.

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 2022.

Similar to many other companies that provide consumer financing, we have historically securitized a majority of the receivables originated in connection with the sale of VOIs.

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Many of the receivables are subsequently transferred from the warehouse securitization facility into term securitization facilities.

Our consumer financing subsidiary is responsible for the maintenance of contract receivables files as well as all customer service, billing, and collection activities related to our domestic loans.

Wyndham Consumer Finance manages the selection, processing and servicing of loans pledged in our warehouse and term securitization facilities.

We assess the performance of our loan portfolio by monitoring numerous metrics including collection rates, defaults by state of residency, and bankruptcies.

Our consumer financing subsidiary also manages the selection and processing of loans pledged or to be pledged in our warehouse and term securitization facilities.

As of December 31, 2022, 94% of our loan portfolio was current (not more than 30 days past due).

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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.

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 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.

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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.

Our seasonality has been and could continue to be impacted by COVID-19.

Our vacation ownership business principally competes with short-term vacation options such as lodging, cruise and home and apartment sharing services, as well as other timeshare developers.

The leisure travel industry is large and highly competitive.

We compete based on lifetime value, location, convenience, quality of accommodations, service levels, amenities, 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, amenities, customer loyalty, and flexibility.

In order to compete, we incent potential new owners and existing owners to tour with us in order to better understand our products and services.

The vacation ownership industry has consolidated over the last 20 years leaving multiple well-capitalized branded companies including:

Marriott Vacations Worldwide, Hilton Grand Vacations, Disney Vacation Club, Holiday Inn Club Vacations, and Bluegreen Vacations.

Marriott Vacations Worldwide, Hilton Grand Vacations, Disney Vacation Club, and Holiday Inn Club Vacations.

As an industry, we largely source potential new owner tours from different marketing channels, but there is overlap when consumers are members of more than one loyalty program and/or travel to more than one resort within a market.

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Travel and Membership Overview

Our Travel and Membership segment is comprised of our branded business lines, Panorama and the Travel + Leisure Group, which operate a variety of travel businesses, including three vacation ownership exchange brands, travel clubs, direct-to-consumer rentals, and a home exchange network.

Our Travel and Membership segment is comprised of our Exchange and Travel Club business lines.

These businesses are primarily fee-for-service, selling third-party inventory that provides stable revenue streams and produces strong cash flow.

We operate RCI, the world’s largest vacation exchange network based on the number of members and affiliated resorts.

Within Exchange, we operate RCI, the world’s largest vacation exchange network based on the number of members and affiliated resorts.

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 84% of the exchange memberships through our RCI, 7Across, and Love Home Swap networks.

Annual member retention is high and over the last three years we have retained on average 84% of the exchange memberships through our Exchange networks.

In the vast majority of cases, we acquire new members when an affiliated timeshare developer pays for the initial term of a membership on behalf of a timeshare owner as part of the vacation ownership purchase process.

Generally, this initial membership is for either a one or two year term, after which these new members may choose to

renew directly with us.

Generally, this initial membership is for either a one- or two-year term, after which these new members may choose to renew directly with us.

We also acquire a small percentage of new members directly from online channels or direct consumer outreach.

Members receive periodicals and other communications published by us and, for additional fees, may use the vacation exchange program and other services that provide the ability to protect trading power or points, extend the life of a deposit, and combine two or more deposits for the opportunity to exchange into intervals with higher trading power and book travel services.

Our vacation exchange business has relationships with 4,200 affiliated vacation ownership resorts in approximately 110 countries and territories located in North America, Latin America, the Caribbean, Europe, the Middle East, Africa, and Asia Pacific.

Panorama Travel Solutions offers global discount travel membership clubs and custom travel technology solutions to business-to-business affinity partners including large employers, banks and retailers, trade associations and others via their operations in the U.S., Mexico, Asia, and Europe.

Our travel technology platforms are powered by Alliance Reservations Network, a Panorama company, which has been operating travel booking technology since 1995.

Our vacation exchange business has relationships with more than 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.

Travel Club offers global discount travel membership clubs to consumers as well as custom travel technology solutions to business-to-business affinity partners including large employers, banks and retailers, trade associations and others via their operations in the U.S., Mexico, Asia, and Europe.

Members are acquired through affinity partnerships where the affinity partner would offer a travel club membership to affiliated groups, usually its customers, members and/or employees.

Following our acquisition of the Travel + Leisure brand, we established the Travel + Leisure Group to offer travelers a suite of products and services that bring the brand to life, including Travel + Leisure Club, a subscription travel club where members can dream, plan, book and go – all in one place.

Subscribers have access to preferred pricing on featured itineraries inspired by editorial coverage, personalized concierge service, extra savings on more than a million travel options, and exclusive experiences, along with a complimentary subscription to Travel + Leisure magazine.

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 business extensions, Panorama Travel Solutions and the Travel + Leisure Group.

To achieve this goal, we intend to pursue the following strategies:

Expand and enhance our products and services to increase wallet share, propensity, and retention within our member base.

Through the addition of more inventory options for exchange and more travel products and services, Panorama seeks to enhance its core exchange business lines’ growth through greater share of consumers’ travel spend, increased member engagement, and reduced churn.

Offer B2B travel club solutions.

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.

Expand B2B travel club solutions.

We seek to grow our membership beyond the timeshare industry, expanding B2B partnerships across multiple sectors driving incremental transaction revenue and subscriptions.

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Grow our Direct-to-Consumer (“D2C”) travel club leveraging the Travel + Leisure brand and content.

We plan to leverage Travel + Leisure, one of the world’s most influential travel brands, to expand our total addressable market and grow our subscription travel club by marketing to Travel + Leisure magazine subscribers and leisure travelers in general.

We plan to leverage the Travel + Leisure brand, one of the world’s most influential travel brands, to expand our total addressable market and grow our subscription travel club by marketing to Travel + Leisure magazine subscribers and leisure travelers in general.

Revenues and Operating Statistics

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• Average number of exchange members — Represents paid members in our vacation exchange programs who are considered to be in good standing.

• Transactions — Represents the number of vacation bookings recognized as revenue during the period, net of cancellations.

• Revenue per transaction — Represents transactional revenue divided by transactions.

• Transactions — Represents the number of exchanges and travel club bookings recognized as revenue during the period, net of cancellations.

• Revenue per transaction — Represents transaction revenue divided by transactions.

Sales and Marketing, Distribution and Customer Development

In the exchange business, we affiliate with vacation ownership developers directly through our in-house sales teams.

Affiliated vacation ownership developers sign agreements that have an average duration of three years.

Affiliated vacation ownership developers sign agreements that have an average duration of four years.

Our vacation exchange members are acquired primarily through our affiliated developers as part of the vacation ownership purchase process.

We acquire a small percentage of our members directly from online channels.

Panorama collaborates with affinity groups outside of the vacation ownership industry through our Panorama Travel Solutions business, which includes ARN.

Travel clubs collaborate with affinity groups outside of the vacation ownership industry.

These affinity groups include employee benefit plans, professional associations, and other paid membership groups that are interested in providing travel benefits to their members to enhance customer loyalty, and in many cases, generate incremental fee streams.

The Travel + Leisure Group develops relationships directly with consumers through quality travel content and by marketing to both Travel + Leisure magazine subscribers and leisure travelers in general.

Travel + Leisure GO develops relationships directly with consumers through quality travel content and by marketing to both Travel + Leisure magazine subscribers and leisure travelers in general.

We distribute our products and services through proprietary websites and call centers around the world.

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We leverage inventory comprised of VOIs and independently owned properties across our network of brands to maximize value for affiliates and members.

Through our Travel Club business, we also offer additional travel products such as flights and car rentals.

Our revenues from vacation exchange fees have traditionally been higher in the first quarter, which is generally when our vacation exchange members plan and book their vacations for the year.

Our seasonality has been and could continue to be impacted by COVID-19.

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.

Our non-exchange Travel and Membership businesses compete more broadly with the larger sector of leisure travel options including traditional travel agents, online travel agents, and travel clubs.

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.

The foregoing segment descriptions specify the brands that are used by each of our segments.

Travel + Leisure Co.

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Foreign Corrupt Practices Act (“FCPA”).

The FCPA and similar anti-corruption and bribery laws in other jurisdictions

generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or generating business.

The FCPA and similar anti-corruption and bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or generating business.

Other laws, regulations, and policies primarily affect one of our areas of business:

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These laws and regulations, some of which contain exceptions applicable to the timeshare industry, may include, among others, the Real Estate Settlement Procedures Act and Regulation X, the Truth In Lending Act and Regulation Z, the Federal Trade Commission Act, the Equal Credit Opportunity Act and Regulation B, the Fair Credit Reporting Act, the Fair Housing Act and implementing regulations, the Fair Debt Collection Practices Act, the Electronic Funds Transfer Act and Regulation E, unfair, deceptive or abusive acts or practices regulations and the Credit Practices rules, the USA PATRIOT Act, the Right to Financial Privacy Act, the Gramm-Leach-Bliley Act, the Servicemembers Civil Relief Act, and the Bank Secrecy Act.

debt collection and credit reporting practices, consumer debt collection practices, mortgage disclosure, lender or mortgage loan originator licensing and registration and anti-money laundering.

Our purchaser financing activities are also subject to the laws and regulations of other jurisdictions, including, among others, laws and regulations related to consumer loans, retail installment contracts, mortgage lending, fair debt collection and credit reporting practices, consumer debt collection practices, mortgage disclosure, lender or mortgage loan originator licensing and registration and anti-money laundering.

Property Management Regulation

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Our human resources organization manages employment-related matters, including recruiting and hiring, onboarding, compensation planning, performance management, and professional development.

Our Board of Directors (“Board”) and its committees also provide oversight on certain human capital matters, including diversity and inclusion initiatives.

Our Corporate Governance Committee periodically reviews matters of corporate social responsibility and sustainability performance, including potential trends and impacts of environmental, social, and governance issues that affect human capital matters.

Our Board of Directors and its committees also provide oversight on certain human capital matters, including diversity and inclusion initiatives.

Our Corporate Governance Committee periodically reviews potential trends and impacts of environmental, social, and governance issues that affect human capital matters.

Our Compensation Committee is responsible for periodically reviewing certain of our human capital programs, policies and procedures, including management succession planning and development.

The Compensation Committee is also responsible for periodically reviewing incentives and risks related to our compensation programs.

Furthermore, our Audit Committee discusses compliance risks related to human capital matters and periodically reviews and updates our Code of Business Conduct and Ethics to promote ethical behavior by all of our associates.

As the unprecedented events of 2020 suspended global travel, we recalibrated operations and drove agile, sustained connectivity to our worldwide team of associates, many of whom began to work remotely.

We executed a workforce transformation aligned with the closure and reduction of operations around the world.

Staffing related cost savings were achieved through a significant reduction in our workforce and the furlough of thousands of associates during 2020.

Benefits were provided to associates for the duration of their furlough and severance was provided to associates that were separated from Travel + Leisure Co.

As of December 31, 2021, we have reopened all of the resorts and sales offices in North America that we expect to reopen.

The remaining closed resorts and sales offices that we intend to reopen are located in the South Pacific and are expected to reopen in 2022, contingent upon the lifting of government imposed travel restrictions.

As a result of these reopenings the vast majority of our furloughed employees have returned to work.

As of December 31, 2021, our global team was comprised of more than 16,800 associates, more than 3,500 of whom work outside the U.S.;

14,100 associates support Vacation Ownership, 2,600 associates support Travel and Membership, and 100 associates comprise our corporate group.

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, 2022, our global team was comprised of over 18,200 associates, more than 3,700 of whom work outside the U.S.

Of our global associates 14,000 support Vacation Ownership, 2,300 support Travel and Membership, and 1,900 comprise our corporate group.

Less than 1% of our associates are subject to collective bargaining agreements governing their employment with our company.

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Examples of our employee development programs and initiatives include:

• Global Learning and Development:

• Associate Learning and Development:

Our proprietary Destination U resource is a comprehensive solution that puts the ownership of each associate’s career development directly into their hands.

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 development courses designed specifically to further their development.

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, high-potential associate development programs, executive coaching, leader onboarding plans, new leader orientation and transition training, and tuition and certification reimbursement.

Inclusion and Diversity

We understand that a culture of rich inclusion and diversity enhances our performance and ability to serve our customers.

We strive to cultivate an inclusive environment where each individual is embraced as they are, and where each associate feels appreciated, respected, and valued as a contributor at every level within the organization.

formal talent reviews, succession planning, associate development programs for all levels, executive coaching, leader onboarding plans, new leader orientation, and tuition and certification reimbursement.

Competitive Pay/Benefits

We offer a comprehensive total rewards program designed to attract and retain top talent, fuel our business objectives, and reward performance excellence.

Our total rewards package reflects our commitment to our associates and includes competitive pay, healthcare benefits, retirement savings plans, paid time off including parental leave, and other mental health and well-being support.

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 89% of our associates.

This plan allows eligible associates to purchase common shares of Company stock at a 10% discount from the fair market value at the grant date.

We regularly review our design and offerings to ensure alignment with country and regional competitive practices.

We believe in performance-based variable compensation programs that support a high-performance environment.

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, 2022, 43% of our associates participate in a variable pay incentive pay program.

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.

Our plans mirror the relevant direction from the Center for Disease Control (“CDC”) and prevention guidelines for the U.S.

and other equivalent government agencies in the regions where we operate globally.

To ensure associates and contractors under our management have a safe working environment, the Corporate Safety and Security team leads our occupational health and safety management system, in compliance with Occupational Safety and Health Administration (“OSHA”) requirements and guidance.

The Corporate Safety and Security team works closely with the Business Continuity team on incident management plans and responses.

Business Continuity owns a detailed Emergency Preparedness Guide that equips each location with incident response protocols and reporting processes, an emergency response hotline, and outlines the physical requirements for handling situations ranging from natural disasters to criminal activity.

In addition to the health and well-being benefits offered to our associates, we have a variety of safety programs, including Project Opioid.

Project Opioid seeks to reduce opioid related deaths by working with leaders within the business community, law enforcement, insurance carriers, healthcare providers, researchers/educators, and faith-based organizations, one community at a time.

Project Opioid helps community leaders to build regional coalitions, collect research, and perform high-level advocacy to transform and save lives impacted by the opioid epidemic in their communities.

We signed the pledge, donate

annually, and sit on the organization’s Board of Directors.

We reinforce the importance of health and safety through frequent associate communications channels including weekly safety alerts and newsletters, active engagement on Yammer and Microsoft Teams, business line and global e-newsletters, and ongoing collaboration with other leaders and teams throughout our company.

Visit our website at travelandleisureco.com/esg-commitment for additional information about our health and safety activities and initiatives.

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.

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.

Our Full Circle strategy is recognized through the prestigious honors we have earned, including Fortune magazine’s World’s Most Admired Companies, Newsweek’s list of America’s Most Responsible Companies, the National Veteran-Owned Business Association’s Best Corporations for Veteran’s Business Enterprises, and the Human Rights Campaign’s Best Places to Work for LGBTQ+ Equality award, among others.

Environmental Progress

We are committed to sustainable business practices with a focus on emissions, energy, water, and biodiversity.

We closely partner with applicable property owners’ associations that we do not control to drive progress toward our environmental goals.

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.

As of December 31, 2021, we have reduced our Scope 1 + Scope 2 GHG emissions intensity by 39% 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.

Additionally, as of December 31, 2021 we have reduced our water withdrawal per square foot by 21%, compared to our 2010 baseline.

As of December 31, 2022, we have also planted more than 1.8 million trees through our partnership with the Arbor Day Foundation, as part of our innovative approach to increase biodiversity and sequester carbon.

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.

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.

Based upon insurable property values as of December 31, 2022, approximately 35% of our managed properties are located in Tier I windstorm exposure areas, approximately 20% are located in areas with a high level of flood risk;

and approximately 20% are located in high-risk wildfire-prone states.

In addition, based on the water risk assessment we conducted in 2021, we identified 71 managed resorts in high or extremely high-water stressed locations.

It is possible that the weather conditions and other natural disasters associated with climate change could increase in frequency and/or severity in the future which could have a material adverse effect on our managed property portfolio, operating costs, and demand for our products and/or services.

We are continuously monitoring climate change risks and taking actions to mitigate impacts wherever possible.

Inclusion & Diversity

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.

• Our inclusive talent acquisition strategy focuses on developing a diverse pipeline of candidates that includes applicants from a variety of backgrounds, cultures, and experiences.

This includes women, diverse ethnicities, veterans, LGBTQIA+, those with disabilities, generational diversity, and more.

• Our Global Inclusion and Diversity Council (“GIDC”) is comprised of an associate-led global team of diverse senior and executive leaders.

• Our Global Inclusion and Diversity Council (“GIDC”) is comprised of a CEO-led team of diverse senior and executive leaders representing our worldwide operations.

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 for our Asian/Pacific Islander, Black/African American, Hispanic/Latinx, LGBTQIA+, Veteran, and Women associates.

Diversity resource groups foster affiliation with colleagues across the business, and are designed to enable the personal growth, professional development, and retention of diverse talent.

• We host voluntary, associate-led Diversity Resource Groups (“DRGs”) for our Asian/Pacific Islander, Black/African American, Hispanic/Latinx, LGBTQIA+, Veteran, and Women associates.

DRGs foster affiliation with colleagues across the business, and are designed to enable the personal growth, professional development, and retention of diverse talent.

Participants have the opportunity to develop their careers through learning, leadership exposure, and business engagement.

Our partnerships with inclusion and diversity organizations at national and regional levels provide a platform for our associates to develop leadership skills and gain inclusion and diversity education, while executives are given the opportunity to showcase thought leadership at sponsored programs and events.

• Our roadmap to drive progress in inclusion and diversity is guided by our goals of continuing to enhance a diverse talent pipeline to increase diverse representation at the director and above level, continued focus on diverse hires at all levels, and maintaining and growing our business relationships with companies that have diverse ownership.

We remain committed to “Listen, Learn, and Act” to sustain engagement and responsiveness.

Travel + Leisure Co.

President and CEO Michael Brown signed the CEO Diversity Action Pledge in partnership with CEO Action for Diversity & Inclusion, joining more than 2,000 global organizations who have pledged to act on supporting a more inclusive workplace for employees, communities, and society at large.

Also Michael Brown was among 75 Central Florida leaders to sign the first-ever Orlando Economic Partnership Regional Corporate Pledge in 2020, committing to improve regional diversity, equity, and inclusion outcomes.

In an effort to improve employee diversity at the director-and-above level, we have implemented an approach where at least 50% of the candidate slate for any open employee position will be gender and/or ethnically diverse to the greatest extent practicable.

During 2021, we improved diversity at the director-and-above level by 8%.

During 2021, we had 6,102 active hires and our turnover rate was 62%, which is below the annual average for the industry for the proceeding five-year period per the U.S.

Bureau of Labor Statistics.

Our partnerships with inclusive, diverse organizations at national and regional levels provide a platform for our associates to develop leadership skills and gain inclusion and diversity education.

Additionally, these forums enable executives to showcase thought leadership at sponsored programs and events.

ongoing focus on diverse hires at all levels;

and maintaining and growing our business relationships with companies that have diverse ownership.

As of December 31, 2022, 53% of our global associates were women, 45% were men, and 2% were not declared.

Also at December 31, 2021, 53% of our global leaders with direct reports were men and 47% were women.

On December 31, 2022, of our global leaders with direct reports 52% were men and 48% were women.

The following table provides the global gender distribution by level:

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(a) Includes our executive officers which are 89% male and 11% female.

Our ethnic representation in the U.S as of December 31, 2021 was:

Our ethnic representation in the U.S.

as of December 31, 2022 was:

• 23% Hispanic/Latinx

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Undeclared 2% 1%

(a) Includes our executive officers which are 89% white and 11% diverse.

In addition to employee diversity, we have diverse representation on our Board, with four of our nine board members being gender and/or ethnically diverse.

Competitive Pay/Benefits

We offer a comprehensive total rewards program designed to attract and retain top talent, fuel our business objectives, and reward performance.

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 with a 10 % discount from the fair market value at the grant date available to approximately 89% of our associates.

We regularly review our design and offerings to ensure alignment with country and regional competitive practices.

We believe in performance-based variable compensation programs that support a high performance environment.

All of our managers participate in an annual incentive plan that most closely aligns with their role.

Our sales and marketing associates at all levels across our business lines participate in variable compensation plans aligned to their role.

Approximately 50% of our associates participate in a variable pay incentive pay program.

Health & Safety

The health and safety of our associates is of the utmost importance.

In response to the global pandemic, we created a COVID-19-specific plan for the safety and well-being of our associates, guests, and customers.

This plan mirrored the direction from the Center for Disease Control (“CDC”) and Prevention guidelines for the U.S.

and other equivalent government agencies in the regions where we operate globally.

As part of our response, many of our employees worked remotely.

In response to many of our employees beginning to return to the office, we have adopted a global “We’ll Be Ready” return to work plan.

This plan is a comprehensive and evolving resource outlining the protocols and actions we have taken to protect our associates including:

• Transitioning associates to work from home, or work a hybrid work schedule, wherever possible.

• Mandatory onsite temperature checks and health screenings at select locations.

• Requiring the use of masks onsite for unvaccinated associates and as required by local ordinance.

• Promotion of onsite social distancing.

• Requiring sick associates to stay home.

• Immediate contact tracing response.

• Enhanced onsite cleaning protocols in alignment with CDC, World Health Organization (“WHO”), and Occupational Safety and Health Administration (“OSHA”) protocols.

• Enhanced safety and health training specific to COVID-19.

• Vaccine education and incentive initiatives.

• Time off for associates who choose to be vaccinated.

• Required COVID-19 symptom awareness attestation.

• Certified “We’ll Be Ready” health and safety champions at all resorts and sale sites.

SOCIAL RESPONSIBILITY

We are committed to delivering stakeholder value through our Social Responsibility program, Full Circle, which remains an integral part of our company culture and global business operations.

We strive to cultivate an inclusive environment, in which our associates, customers, suppliers, and communities feel appreciated, respected, and valued.

We are committed to sustainable business practices with a focus on social responsibility.

Our 2025 environmental goals are to reduce carbon emissions 40% and water consumption 35% at our owned, managed, and leased assets (based on square foot intensity) compared to our 2010 baseline.

We have also joined the U.S.

Department of Energy’s Better Buildings Challenge with a goal to reduce energy usage intensity 20% within U.S.

operations by 2024.

Compared to our 2010 baseline, we have reduced carbon emissions intensity 29% and exceeded our original water withdrawal goal of 25%, while increasing our overall portfolio square footage by 16%, which includes our managed resorts, corporate offices, and leased locations, including our sales and administrative offices and data centers.

During 2021, we set a new goal to reduce our water withdrawal 35% by 2025.

We have also set a goal to plant two million trees by 2025.

As of December 31, 2021, we have planted more than 1.7 million trees.

Part of our innovative approach to carbon sequestration measures is addressed through annual reforestation projects, protection of existing forests, and the sourcing of carbon neutral coffee.

Our ongoing commitment to reduce carbon emissions includes the implementation of an offsite solar project and 17 onsite solar projects to-date.

(a) Includes our executive officers which are 89% white and 11% ethnically diverse.

Beyond our diverse workforce, we have diverse representation on our Board of Directors, with four of our nine Board members being gender and/or ethnically diverse.

We remain committed to sustaining our reputation as an engaged and responsive organization.

Travel + Leisure Co.

President & CEO Michael Brown signed the CEO Diversity Action Pledge in partnership with CEO Action for Diversity & Inclusion, joining more than 2,400 global organizations who have pledged to act on supporting a more inclusive workplace for employees, communities, and society at large.

Brown was also among 75 Central Florida leaders to sign the first-ever Orlando

Economic Partnership Regional Corporate Pledge in 2020, committing to improve regional diversity, equity, and inclusion outcomes.

With a focus on improving the lives of children and families through vacations, we support charitable organizations with a similar focus and mission.

Our philanthropic efforts drive support for organizations including Give Kids the World Village, Jack and Jill Late Stage Cancer Foundation, and our Associate Relief Fund.

Our decades long history of 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, 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.

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.

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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.

We are committed to being an employer and neighbor of choice in the communities where we have a presence.

Our commitment is recognized through prestigious honors including Newsweek’s list of America’s Most Responsible Companies, the National LGBT Chamber of Commerce’s Best-of-the-Best, the National Veteran-Owned Business Association’s Top 2021 Best Corporations for Veteran’s Business Enterprises, Forbes’ America’s Best Large Employers, and the Human Rights Campaign Corporate Equality Index, among others.

We remain committed to the highest standards of ethics, integrity, and responsible business practices across our global operations.

Published in 13 languages, our associate Code of Conduct reinforces ethical practices including the equal and fair treatment of associates, owners, and guests;

health and safety;

avoiding and reporting conflicts of interest;

protecting our information;

anti-corruption;

and financial and reporting integrity.

We encourage the reporting of any concerns without fear of retaliation through channels including our 24-hour integrity internal reporting hotline.

Aligned with our stand against human trafficking, and in partnership with ECPAT International, we were the first vacation ownership company to sign the Tourism Child Protection Code of Conduct and to enforce required training and education for associates globally in order to protect children from exploitation.

Visit our website at investor.travelandleisureco.com/esg for additional information on our social responsibility activities and initiatives.

ENVIRONMENTAL COMPLIANCE

CLIMATE CHANGE

There has been public discussion that 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.

Based upon insurable property values as of December 31, 2021, approximately 35% of our managed properties are located in Tier I windstorm exposure areas, approximately 20% are located in areas with a high level of flood risk;

and approximately 20% are located in high-risk wildfire-prone states.

For detailed information about our governance practices, see Part III Item 10— Directors, Executive Officers and Corporate Governance .

Visit our website at travelandleisureco.com/esg-commitment for additional information on our social responsibility activities and initiatives, along with our 2021-2022 ESG report.

Information on our website, including our 2021-2022 ESG report, is not part of, or incorporated in, this Annual Report on Form 10-K.

KEY AGREEMENTS RELATED TO THE SPIN-OFF

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• 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.

The amount of each party’s indemnification obligations are subject to reduction by any insurance proceeds received by the party being indemnified.

The amount of each party’s indemnification obligations is subject to reduction by any insurance proceeds received by the party being indemnified.

Except in the case of tax assets and liabilities related to the sale of our European vacation rentals business, indemnification with respect to taxes are governed solely by the Tax Matters Agreement.

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The Employee Matters Agreement addresses the allocation of employees between Wyndham Hotels and Travel + Leisure Co.

as well as other employment, compensation

and benefits-related matters.

as well as other employment, compensation and benefits-related matters.

As of January 1, 2021, 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.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business