What changed in this filing

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Item 1. Business

2021-03-01 compared with 2020-03-02 · 192 added, 117 removed, 499 unchanged (38% of the section changed)

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We were incorporated in Delaware in June 2011 and have been an independent public company since our November 2011 spin-off from Marriott International (the “Marriott Spin-Off”).

($ in millions)

Segment Revenue

% of Segment Revenue

($ in millions) Segment Revenue % of Segment Revenue

Vacation Ownership $ 2,530 89%

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Total Segment Revenue $ 2,839 100%

Impact of COVID-19 Pandemic

Our results of operations from 2020 include impacts related to the COVID-19 pandemic, which have been significantly adverse for our business and our industry.

We continue to closely monitor and actively manage the ongoing effects of the COVID-19 pandemic on our business and operations, and to adapt our operations.

Vacation Ownership

We experienced an adverse impact on occupancy in our Vacation Ownership business beginning in mid-March 2020, which quickly accelerated later that month and continued throughout the remainder of 2020.

In response to quickly evolving travel restrictions and restrictions on business operations, we closed all of our sales centers in March 2020, and beginning on March 25, 2020, we closed our resorts for rental guests with stays at our branded North America vacation ownership resorts.

Due to low occupancy rates and based on various governmental mandates and advisories, we completely closed several of our resorts and reduced operations and amenities at our resorts that remained open.

The closure of our sales centers and low occupancy levels led to a material decrease in contract sales and rental revenues from our vacation ownership business beginning in the second quarter.

In late-May, as many government restrictions were beginning to be relaxed, owner occupancy at our resorts began to grow and we began reopening resorts to rental guests;

over 95 percent of our vacation ownership resorts had reopened to owners and rental guests by December 31, 2020.

We reopened certain sales centers in June and opened additional sales centers in July and throughout the rest of the year.

As of December 31, 2020, over 80 percent of our sales centers had re-opened.

Extended or further closures of our sales centers may be required if demand declines again or if we are again impacted by government regulations requiring resort closures or restricting travel.

Exchange & Third-Party Management

In our Exchange & Third-Party Management business, the closures of certain affiliated resorts and managed properties had a significant adverse impact on our business beginning at the end of the first quarter of 2020.

A large number of resorts closed or ceased taking reservations, leading to a decrease in management and exchange revenues.

As of December 31, 2020, over 90 percent of those affiliated resorts and managed properties had reopened or resumed taking reservations.

Our Aqua-Aston business was materially adversely affected by travel restrictions, as most of its managed properties are located in Hawaii.

Further resort and property closures may be required if demand declines again or if we are again impacted by government regulations requiring resort closures or restricting travel.

Starting at the end of the first quarter of 2020, the COVID-19 pandemic depressed, and continues to depress, the demand for vacation rentals due to “stay-at-home” recommendations or requirements, quarantines, and the reluctance of consumers to travel.

In late-March 2020, we drew down the remaining capacity of our $600 million Revolving Corporate Credit Facility (as defined in Footnote 17 “Debt” to our Financial Statements).

We issued $500 million of senior secured debt in May 2020, which we used to repay amounts outstanding on our Revolving Corporate Credit Facility.

As of December 31, 2020, we had $524 million in cash and cash equivalents on hand, and $597 million of availability under our Revolving Corporate Credit Facility.

Subsequent to the end of 2020, we issued $575 million of convertible senior notes in order to help finance our recently announced acquisition of Welk Resorts.

Other Measures

In addition to accessing the capital markets, we also bolstered our liquidity through cost reduction.

These efforts included reducing capital expenditures;

suspending hiring and salary increases;

reducing executive and other associate salaries;

implementing furloughs and reduced work weeks for most of our associates;

and modifying vendor and supplier payment terms where possible.

Certain of these cost reduction efforts are still in place and we continue to implement these and other cost saving measures as the situation evolves.

As a result of the COVID-19 pandemic, in September 2020 a workforce reduction plan was approved.

Approximately 3,000 associates were impacted beginning in November 2020.

During 2020 we incurred $25 million in restructuring and related charges, primarily related to employee severance and benefit costs, excluding a portion that is included in cost reimbursements, and expect to incur an additional $5 million to $10 million in 2021.

Additionally, we implemented temporary adjustments to our cancellation policies for near-term travel for customers who were unable or unwilling to travel due to the COVID-19 pandemic during the first quarter of 2020 and continued these adjustments throughout the remainder of 2020.

Health and Safety Measures

In response to the pandemic, we implemented a comprehensive, enhanced cleaning protocol entitled “Next Level of Clean” beginning in 2020 across our seven vacation ownership brands throughout the U.S., Caribbean, Europe, and Asia.

The protocol utilizes enhanced cleaning materials and technologies, including electrostatic sprayers, micro-misting sanitation machines, and hospitality grade supplies.

Our enhanced cleaning protocols reflect elevated cleanliness standards, cleaning frequency, and hospitality norms across our vacation ownership brands.

Our new enhanced cleaning program was a result of collaboration with leaders in cleaning, hygiene, air purification and infection prevention services.

These protocols also extend to our sales galleries for our vacation ownership brands, where, in addition to implementation of the new cleanliness standards and protocols, new practices have been implemented to provide presentations in a manner to allow for social distancing.

Additionally, we established safe work environment protocols for all associates across all brands and businesses.

For associates, the guidelines establish protocols that implement a work environment that takes into account the health and well-being of our associates and regulations, laws, and recommendations from government authorities and health officials.

Associates across all brands and businesses go through daily temperature screens and are given personal protective equipment, including facemasks, which are required to be worn in common areas and when social distancing is not possible.

Acquisition of ILG

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Typically, a purchaser acquires an interest (known as a “vacation ownership interest” or a “VOI”) that is either a real estate ownership interest (known as a “timeshare estate”) or a contractual right-to-use interest (known as a “timeshare license”) in a single resort or a collection of resort properties.

In the United States, most vacation ownership products are sold as timeshare estates, which can be structured in a variety of ways including, but not limited to, a deeded real estate interest in a specified accommodation unit, an undivided interest in a building or an entire resort, or a beneficial interest in a trust that owns one or more resort properties.

In the United States, most vacation ownership products are sold as timeshare estates, which can be structured in a variety of ways, including a deeded real estate interest in a specified accommodation unit, an undivided interest in a building or an entire resort, or a beneficial interest in a trust that owns one or more resort properties.

By purchasing a vacation ownership interest, owners make a commitment to vacation.

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To enhance the flexibility and appeal of their products, many vacation ownership developers affiliate their projects with vacation ownership exchange service providers so that owners may exchange their rights to use the developer’s resorts in which they have purchased an interest for accommodation at other resorts in the exchange service provider’s broader network of properties.

The two leading exchange service providers are Interval International, our subsidiary, and RCI, LLC, a subsidiary of Wyndham Destinations, Inc.

The two leading exchange service providers are Interval International, our subsidiary, and RCI, LLC, a subsidiary of Travel + Leisure Co.

(formerly known as Wyndham Destinations, Inc.) (“RCI”).

Interval International’s network includes nearly 3,200 resorts, and RCI’s network includes over 6,000 affiliated resorts, as identified on RCI’s website.

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In connection with the Marriott Spin-Off, we entered into a License, Services, and Development Agreement (the “Marriott License Agreement”) with Marriott International and a License, Services, and Development Agreement (the “Ritz-Carlton License Agreement”) with The Ritz-Carlton Hotel Company, a subsidiary of Marriott International.

Under these long-term license agreements that expire between 2090 and 2096, we are granted the exclusive right, for the terms of the license agreements, to use certain Marriott and Ritz-Carlton marks and intellectual property in our vacation ownership business, the exclusive right to use the Grand Residences by Marriott marks and intellectual property in our residential real estate business, and the non-exclusive right to use certain Ritz-Carlton marks and intellectual property in our residential real estate business.

Under these long-term license agreements that expire in 2090, we are granted the exclusive right, for the terms of the license agreements, to use certain Marriott and Ritz-Carlton marks and intellectual property in our vacation ownership business, the exclusive right to use the Grand Residences by Marriott marks and intellectual property in our residential real estate business, and the non-exclusive right to use certain Ritz-Carlton marks and intellectual property in our residential real estate business.

In connection with our acquisition of ILG, we became the exclusive licensee for the Sheraton and Westin brands in vacation ownership.

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We expect to continue to generate growth through our integrated platform that provides exclusive access to the world-class loyalty programs of Marriott International and Hyatt.

We will also continue to focus on our over 660,000 owners around the world.

We will also continue to focus on our over 650,000 owner families around the world.

We are concentrating on growing our tour flow cost effectively as we seek to grow first-time buyer tours through our strategy that emphasizes new sales locations and new marketing channels, including digital and social media marketing.

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We also plan to grow our recurring revenues which tend to be less capital intensive than sales of vacation ownership.

Our recurring revenues include management of resorts and owners’ associations as well as membership, club and other revenues in both our Vacation Ownership and Exchange & Third-Party Management segments.

Our recurring revenues include management of resorts and owners’ associations, financing revenues, and membership, club and other revenues in both our Vacation Ownership and Exchange & Third-Party Management segments.

These revenues generally are more predictable due to the relatively fixed nature of resort operating expenses and, in the case of management and exchange revenues, contractual agreements that typically span many years and are often automatically renewable.

Financing revenues are relatively stable as the majority of these revenues generated in any given year come from prior year note originations.

Maximize cash flow and optimize our capital structure, including by selectively pursuing capital efficient vacation ownership deal structures

Through the use of our points-based products, we are able to more closely match inventory investment with sales pace and reduce inventory levels, thereby generating strong cash flows over time.

Through the use of our points-based products, we are able to more closely match inventory investment with sales pace, thereby generating strong cash flows over time.

Limiting the amount of completed inventory on hand and pursuing capital efficient vacation ownership inventory arrangements enable us to reduce the maintenance fees that we pay on unsold inventory and improve returns on invested capital and liquidity.

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We intend to meet our ongoing liquidity needs through cash on hand, operating cash flow, our $600 million revolving credit facility (the “Revolving Corporate Credit Facility”), our $350 million non-recourse warehouse credit facility (the “Warehouse Credit Facility”), and continued access to the asset-backed securities (“ABS”) term financing market.

We believe this will enable us to maintain a level of liquidity that ensures financial flexibility, giving us the ability to pursue strategic growth opportunities, withstand potential future economic downturns, optimize our cost of capital, and pursue strategies for returning excess capital to shareholders.

We believe this will enable us to maintain a level of liquidity that provides financial flexibility, giving us the ability to pursue strategic growth opportunities, withstand potential future economic downturns, optimize our cost of capital, and pursue strategies for returning excess capital to shareholders.

Enhance digital capabilities

A key area of focus for us is the expansion of digital tools to drive more efficient digital marketing and enhance user experience for our owners.

We intend to engage in data driven approaches to digital marketing, which we believe will lead to efficiencies in our cost of marketing.

We also believe making new and enhanced digital tools available to our owners presents revenue and cost reduction opportunities.

Focus on the satisfaction of our owners and guests as well as the engagement of our associates

We provide high-quality vacation experiences to our owners and guests around the world and we believe that maintaining a high level of engagement across all of our customer groups is key to our success.

A key area of focus for us is the expansion of digital tools to drive more efficient digital marketing and enhance user experience for our owners and members of our exchange and other membership programs.

We intend to build efficiencies in our cost of delivery of marketing and to enhance the experience of our owners by seeking new data driven approaches and enhancing digital tools.

Focus on the satisfaction of our owners, members, and guests as well as the engagement of our associates

We provide high-quality vacation experiences to our owners, members, and guests around the world and we believe that maintaining a high level of engagement across all of our customer groups is key to our success.

We intend to maintain and improve their satisfaction with our products and services, which drives incremental sales as customers choose to spend more time at our resorts.

Because our owners and guests are our most cost-effective vacation ownership sales channels, we intend to continue to leverage our strong customer satisfaction to drive higher margin sales volumes.

Because our owners, members, and guests are our most cost-effective vacation ownership sales channels, we intend to continue to leverage our strong customer satisfaction to drive higher margin sales volumes.

We intend to provide innovative offerings in new destinations to meet the needs of current and future customers and intend to develop new offerings to attract the next generation of travelers looking for a greater variety of experiences with the high quality standards expected from brands they trust.

Engaging our associates in the success of our business continues to be one of our long-term core strategies.

We understand the connection between the engagement of our associates and the satisfaction and engagement of our owners and guests.

At the heart of our culture is the belief that if we take care of our associates, they will take care of our owners and guests and the owners and guests will return again and again.

We understand the connection between the engagement of our associates and the satisfaction and engagement of our owners, members, and guests.

At the heart of our culture is the belief that if we take care of our associates, they will take care of our owners, members, and guests and the owners, members, and guests will return again and again.

Transform our business in connection with the integration of the ILG Acquisition

As we continue to integrate the ILG businesses, we are simultaneously working to develop new growth channels and streamline our business processes through technology.

As we continue to further integrate the ILG businesses, we are simultaneously working to develop new growth channels and streamline our business processes through technology.

We are focused on integrating functions, leveraging strengths across our businesses, and pursuing transformational opportunities that can further differentiate us from our competitors.

We intend to advance our company analytics to encourage greater points utilization, provide enhanced resort experiences, and create more relevant and high value targeted leads for tour offers and vacation options.

We intend to advance our company analytics to encourage greater points utilization and usage of our exchange and travel products, provide enhanced resort experiences, and create more relevant and high value targeted leads for tour offers and vacation options.

This is a multi-year process that is designed to achieve cost savings synergies and increase revenue opportunities.

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We believe our scale and global reach, coupled with our renowned brands and development, marketing, sales, exchange and management expertise, help us achieve operational efficiencies and support future growth opportunities.

Our size allows us to provide owners with the flexibility of a wide variety of experiences within our high-quality resort portfolio, coupled with the ease and certainty of working with a single trusted provider.

Our size allows us to provide owners, members, and guests with the flexibility of a wide variety of experiences within our high-quality resort portfolio, coupled with the ease and certainty of working with a single trusted provider.

We also believe our size helps us obtain better financing terms from lenders, achieve operational cost savings from our increased scale, and attract talented management and associates.

Our Interval International network includes members and resorts from our Marriott, Westin, Sheraton and Hyatt clubs that can attract developers and homeowners associations to affiliate with the network and provide an opportunity for their owners to exchange into our branded resorts.

The breadth and depth of our operations enables us to offer a variety of products and to continue to adapt those products to the ever changing needs and preferences of our existing and future customers.

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We have a large, highly satisfied customer base.

Owner satisfaction is evidenced both by positive survey responses and by the fact that our average resort occupancy for our Vacation Ownership segment was approximately 88 percent in 2019 , higher than the overall vacation ownership industry average.

We believe that strong customer satisfaction and brand loyalty result in more frequent use of our products and encourage owners to purchase additional products and to recommend our products to friends and family, which in turn generates higher revenues.

Owner and member satisfaction is evidenced both by positive historical survey responses and higher than industry average historical resort occupancy for our Vacation Ownership segment.

We believe that strong customer satisfaction and brand loyalty result in more frequent use of our products, increase in member retention, and encourage owners to purchase additional products and to recommend our products to friends and family, which in turn generates higher revenues.

Capital efficient business model providing strong free cash flow and financial flexibility.

We believe that our scale, recurring revenue fee streams and enhanced margin profile will enable us to maintain flexibility for continued organic growth, strategic acquisitions and debt repayment.

Following the ILG Acquisition, a higher proportion of our total revenue excluding cost reimbursements derives from sources other than the sale of vacation ownership interests.

The addition of our Exchange & Third-Party Management businesses creates ample opportunities to realize recurring higher-margin, fee-based revenue streams with modest required capital expenditures, enhancing our margins and free cash flow generation over time.

The proportion of our total revenue excluding cost reimbursements derived from sources other than the sale of vacation ownership interests has increased and

continues to increase.

Our Exchange & Third-Party Management businesses also create ample opportunities to realize recurring higher-margin, fee-based revenue streams with modest required capital expenditures, enhancing our margins and free cash flow generation over time.

Our points-based vacation ownership products allow us to utilize capital efficient structures and maintain long-term sales locations without the need to construct additional units at each location.

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Our seasoned management team is led by Stephen P.

Weisz, our President and Chief Executive Officer.

Weisz has served as President of our company since 1996 and has over 45 years of combined experience at Marriott International and Marriott Vacations Worldwide.

Weisz, our Chief Executive Officer.

Weisz has served as our Chief Executive Officer since 2011, and as our President from 1996 through December 2020.

Weisz has over 48 years of combined experience at Marriott International and Marriott Vacations Worldwide.

Shaw, the Chairman of our Board of Directors, is the former Vice Chairman, President and Chief Operating Officer of Marriott International and spent nearly 37 years with Marriott International.

Our eleven executive officers have an average of nearly 30 years of total combined experience at Marriott Vacations Worldwide, our subsidiary companies, and Marriott International.

Our ten executive officers have an average of nearly 28 years of total combined experience at Marriott Vacations Worldwide, our subsidiary companies, and Marriott International.

We believe our management team’s extensive public company and vacation ownership industry experience has enabled us to achieve solid operating results and will enable us to continue to respond quickly and effectively to changing market conditions and consumer trends.

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We believe that our associates provide superior customer service and this dedication to serving the customer enhances our competitive position.

Approximately 65 percent of our vacation ownership contract sales in 2019 were to existing owners, which enabled them to enjoy longer stays and have greater flexibility in their vacation choices.

A significant portion of our vacation ownership contract sales are historically to existing owners, which enables them to enjoy longer stays and have greater flexibility in their vacation choices.

Sales to existing owners typically have significantly lower sales and marketing costs than sales to new owners.

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Our vacation ownership resorts typically combine many of the comforts of home, such as spacious accommodations with one, two and three bedroom options, living and dining areas, in-unit kitchens and laundry facilities, with resort amenities such as large feature swimming pools, restaurants and bars, convenience stores, fitness facilities and spas, as well as sports and recreation facilities appropriate for each resort’s unique location.

As of December 31, 2019 , our Vacation Ownership segment had more than 100 resorts and over 660,000 owners and members.

As of December 31, 2020, our Vacation Ownership segment had more than 100 resorts and over 650,000 owner families.

The Vacation Ownership segment represented 88 percent of our consolidated revenue for 2020.

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Resort management and other services 356

Financing 265

Cost reimbursements 1,124

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The Ritz-Carlton Destination Club resorts typically feature two, three and four bedroom units that usually include marble foyers, walk-in closets, custom kitchen cabinetry and luxury resort amenities such as large feature swimming pools and access to full service restaurants and bars.

On-site management and services, which usually include daily

housekeeping service, valet, in-residence dining, and access to fitness facilities as well as spa and sports facilities as appropriate for each destination, are provided by The Ritz-Carlton Hotel Company.

On-site management and services, which usually include daily housekeeping service, valet, in-residence dining, and access to fitness facilities as well as spa and sports facilities as appropriate for each destination, are provided by The Ritz-Carlton Hotel Company.

The Ritz-Carlton Residences is a luxury tier whole ownership residence brand.

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Points-Based Vacation Ownership Products

We sell the majority of our products through points-based ownership programs, including Marriott Vacation Club, Sheraton Flex, Westin Flex, Westin Aventuras, and the Hyatt Residence Club Portfolio Program.

We sell the majority of our products through points-based ownership programs, including Marriott Vacation Club Destinations, Sheraton Flex, Westin Flex, Westin Aventuras, and the Hyatt Residence Club Portfolio Program.

While the structural characteristics of each of our points-based programs differ, in each program, owners receive an annual allotment of points representing owners’ usage rights, and owners can use these points to access vacation ownership units across multiple destinations within their program’s portfolio of resort locations.

Each program permits shorter or longer stays than a traditional weeks-based vacation ownership product and provides for flexibility with respect to check-in days and size of accommodations.

In addition to traditional resort stays, the programs enable our owners to exchange their points for a wide variety of innovative vacation experiences, which may include cruises, airline travel, guided tours, safaris and other unique vacation alternatives.

In addition to traditional resort stays, the programs enable our owners to exchange their points for a wide variety of innovative

vacation experiences, which may include cruises, airline travel, guided tours, safaris and other unique vacation alternatives.

Members of our points-based programs typically pay annual fees in exchange for the ability to participate in the program.

In addition to points-based ownership programs that allow owners to access multiple destinations within a single program, we offer points programs at certain resorts in St.

In addition to points-based ownership programs that allow owners to access multiple destinations within a single program, we offer points programs at certain resorts, such as in St.

John and Hawaii, that allow owners to access that particular single site using points in a similar use fashion to the other points based products.

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Global Exchange Opportunities

All of our vacation ownership products are affiliated with the Interval International network.

We offer our existing Marriott Vacation Club owners who hold weeks-based products the opportunity to participate, on a voluntary basis, in Marriott Vacation Club Destinations (“MVCD”), an exchange program through which many of MVCD’s vacation experiences are offered.

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As of the end of 2020, approximately 182,000 weeks-based owners have enrolled approximately 287,000 weeks in MVCD’s exchange program since its launch in 2010, with more than 236,000 total owners able to use points.

The Vistana Signature Network (“VSN”) provides Westin Vacation Club and Sheraton Vacation Club owners access to its affiliated resorts as well as the opportunity to exchange their points through the new Marriott Bonvoy program to Marriott resorts, through the Interval International network, or for a cruise.

The Vistana Signature Network (“VSN”) provides Westin Vacation Club and Sheraton Vacation Club owners access to its affiliated resorts as well as the opportunity to exchange their points through the Marriott Bonvoy program to Marriott resorts, through the Interval International network, or for a cruise.

Based on the point value of the home resort interest owned, customers can choose other VSN affiliated resorts, the type of villa, the date of travel and the length of stay.

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In addition, we earn revenue for providing ancillary offerings, including food and beverage, retail, and golf and spa offerings at our resorts.

We also receive annual fees, club dues, settlement fees from the sale of vacation ownership products, and certain transaction-based fees from owners and other third parties, including external exchange service providers with which we are associated.

We also receive annual fees, club dues, and certain transaction-based fees from owners and other third parties, including external exchange service providers with which we are associated.

We earn interest income on loans that we provide to purchasers of our vacation ownership interests, as well as loan servicing and other fees.

We generate revenue from rentals of inventory that we hold for sale as interests in our vacation ownership programs or as residences, or inventory that we control because our owners have elected alternative usage options permitted under our vacation ownership programs.

By using Marriott.com and other direct booking channels to rent available inventory, we are able to reach potential new members that may already have an affinity for and loyalty to the Marriott, Ritz-Carlton, Sheraton and Westin brands and introduce them to our products.

By using Marriott.com and other direct booking channels to rent available inventory, we are able to reach potential new members who may already have an affinity for and loyalty to the Marriott, Ritz-Carlton, Sheraton and Westin brands and introduce them to our products.

Marketing and Sales Activities

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Efficient use of our capital is also achieved through our points-based business model, which allows us to supply many sales locations with new inventory sourced from a small number of resort locations.

We intend to continue to selectively pursue growth opportunities primarily in North America and Asia Pacific by targeting high-quality inventory that allows us to add desirable new destinations to our system with new on-site sales locations in ways that optimize the timing of our capital investments.

We intend to continue to selectively pursue growth opportunities primarily in North America by targeting high-quality inventory that allows us to add desirable new destinations to our system with new on-site sales locations in ways that optimize the timing of our capital investments.

These capital efficient vacation ownership deal structures may include working with third parties to develop new inventory or to convert previously built units to be sold to us close to when we need such inventory.

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The terms of our management agreements generally range from three to ten years and are generally subject to periodic renewal for one to five year terms.

Many of these agreements renew automatically unless either party provides advance notice of termination before the expiration of the term.

Many of these agreements renew automatically unless either party provides advance notice

of termination before the expiration of the term.

When our management agreement for a branded resort is not renewed or is terminated, the resort loses the ability to use the brand and trademarks.

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In a vacation ownership notes receivable securitization, various classes of debt securities issued by a special purpose entity are generally collateralized by a single tranche of transferred assets, which consist of vacation ownership notes receivable.

During 2019 , we completed three securitization transactions, which are discussed in detail in Footnote 13 “ Securitized Debt ” to our Financial Statements.

During 2020, we completed one securitization transaction, which is discussed in detail in Footnote 16 “Securitized Debt” to our Financial Statements.

On an ongoing basis, we have the ability to use our Warehouse Credit Facility to securitize eligible consumer loans derived from certain branded vacation ownership sales.

Those loans may later be transferred to term securitization transactions in the ABS market, which we intend to continue to complete at least once per year.

Since 2000, we have issued over $6 billion of debt securities in securitization transactions in the ABS market, excluding amounts securitized through warehouse credit facilities or private bank transactions.

Since 2000, we have issued almost $7 billion of debt securities in securitization transactions in the ABS market, excluding amounts securitized through warehouse credit facilities or private bank transactions.

We retain the servicing and collection responsibilities for the loans we securitize, for which we receive a servicing fee.

As of December 31, 2019 , our portfolio consisted of more than 100 properties with over 20,000 vacation ownership villas, also referred to as units, in the following locations.

As of December 31, 2020, our portfolio consisted of more than 100 properties with over 20,000 vacation ownership villas, also referred to as units, and over 30,000 keys in the following locations.

A “key” is the lowest increment for reporting occupancy statistics based upon the mix of non-lock-off and lock-off villas.

Lock-off villas represent two keys and non-lock-off villas represent one key.

Vacation Ownership

Mainland U.S.

Massachusetts

South Carolina

Washington, D.C.

# of Resorts # of Keys # of Resorts # of Keys # of Resorts # of Keys

Arizona 5 1,189 Massachusetts 1 84 South Carolina 10 1,864

California 14 5,264 Missouri 1 216 Texas 1 195

Colorado 13 1,037 Nevada 2 1,172 Utah 2 634

Florida 23 7,989 New Jersey 1 180 Virginia 1 276

Hawaii 12 4,768 New York 2 228 Washington, D.C.

Caribbean and Mexico

# of Resorts # of Keys # of Resorts # of Keys

Aruba 2 1,211 U.S.

Virgin Islands 3 512

Bahamas 1 392 West Indies 1 88

Puerto Rico 1 164 Mexico 3 1,456

Europe and Asia Pacific

United Kingdom

# of Resorts # of Keys # of Resorts # of Keys

France 1 202 Indonesia 1 161

Spain 3 735 Thailand 3 332

United Kingdom 1 49 Australia 1 88

# of Resorts # of Keys

Marriott Vacation Club 61 18,884

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Hyatt Residence Club 16 1,521

Sheraton Kauai Resort

The Westin Resort & Spa, Cancun*

Cancun, Mexico

The Westin Resort & Spa, Puerto Vallarta

Puerto Vallarta, Mexico

Hyatt Highlands Inn

*A portion of this hotel is comprised of vacation ownership units.

Sheraton Kauai Resort Kauai, HI

The Westin Resort & Spa, Cancun Cancun, Mexico

The Westin Resort & Spa, Puerto Vallarta Puerto Vallarta, Mexico

Hyatt Highlands Inn Carmel, CA

EXCHANGE & THIRD-PARTY MANAGEMENT SEGMENT

Our Exchange & Third-Party Management segment includes exchange networks and membership programs comprised of nearly 3,200 resorts in over 80 nations and nearly two million members, as well as management of over 170 other resorts and lodging properties.

Our Exchange & Third-Party Management segment includes exchange networks and membership programs comprised of nearly 3,200 resorts in over 90 nations and over 1.7 million members, as well as management of over 160 other resorts and lodging properties.

We provide these services through a variety of brands including Interval International, Trading Places International, Vacation Resorts International and Aqua-Aston.

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Alternatively, some resort developers incorporate the Interval International network membership fee into certain annual fees they charge to owners of vacation ownership interests at their resorts or vacation ownership clubs.

As a result, membership in the Interval International network and, where applicable, the Interval Gold or Interval Platinum program (as described below), for these corporate members is automatically renewed through the period of their resort’s or club’s participation in the Interval International network.

International network.

As of December 31, 2020, 55 percent of total Interval International network members were traditional members and 45 percent were corporate members.

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Exchanges in these Trading Places programs are based on like value and upgrades are available upon payment of additional fees.

Our exchange businesses maintain corporate and consumer marketing departments that are responsible for implementing marketing strategies.

We also develop printed and digital materials to promote membership participation, exchange opportunities and other value-added services to existing members as well as for the Interval International business to secure new relationships with resort developers, owners’ associations and resorts to obtain and retain members.

Our consumer marketing efforts revolve around the deepening of new and existing customer relationships and increasing engagement and loyalty of members through a number of channels including direct mail, email, telemarketing, and online distribution as well as utilizing social media channels like Facebook and Instagram to inspire vacations, share stories and promote the vacation ownership lifestyle.

Business Development

Our exchange businesses maintain corporate and consumer business development departments that are responsible for signing up new resorts, resort developers, and other businesses and implementing marketing strategies.

We also develop printed and digital materials to promote membership participation, exchange opportunities and other value-added services to existing members, as well as for the Interval International business to secure new relationships with resort developers, owners’ associations and resorts, to obtain and retain members, and with other affinity partners, to provide value added travel benefits to their customers.

Our consumer marketing efforts revolve around the deepening of new and existing customer relationships and increasing engagement and loyalty of members through a number of channels including direct mail, telemarketing, and digital distribution as well as utilizing social media channels like Facebook and Instagram to inspire vacations, share stories and promote the vacation ownership lifestyle.

Interval International also markets products and services to resort developers and other parties in the vacation ownership industry through a series of business development initiatives.

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Generally, owners’ association management services, including administrative, fiscal and quality assurance services, are provided pursuant to exclusive agreements with terms typically ranging from one to ten years or more, many of which are automatically renewable.

Revenue is derived principally from fees for management of the hotel or condominium resort, and owners’ association as well as related rental services.

Revenue is derived principally from fees for management of the hotel, condominium resort, or owners’ association as well as related rental services.

Management fees consist of a base management fee and, in some instances for hotels or condominium resorts, an incentive management fee which is generally a percentage of operating profits or improvement in operating profits.

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The sales team covers several market segments from corporate and government/military to travel agents and groups.

We offer a variety of leisure accommodations to visitors from around the world through consumer websites such as, www.astonhotels.com, www.aquaresorts.com, www.aquahospitality.com, and www.mauicondo.com.

We offer a variety of leisure accommodations to visitors from around the world through various consumer websites including, www.aquaaston.com, www.aquaresorts.com, www.mauicondo.com, and others.

CORPORATE AND OTHER

Corporate and Other consists of results not allocable to the Vacation Ownership or Exchange & Third-Party Management segments, including company-wide general and administrative costs, corporate interest expense, and consolidation of certain owners’ associations under the voting interest model, which are not included in operating segment resource allocation decision-making.

Corporate and Other consists of results not allocable to our segments, including company-wide general and administrative costs, corporate interest expense, ILG acquisition-related costs, and provision for income taxes.

In addition, Corporate and Other includes the revenues and expenses relating to property owners’ associations consolidated under the relevant accounting guidance (“Consolidated Property Owners’ Associations”), which are not included in operating segment resource allocation decision-making.

Our revenue is influenced by the seasonal nature of travel.

Within our Vacation Ownership segment, our sales and financing business experiences a modest impact from seasonality, with higher sales volumes during the traditional vacation periods.

Our vacation ownership management businesses by and large do not experience significant seasonality, with the exception of our resort operations revenue, which tends to be higher in the first quarter.

Our vacation ownership management businesses generally do not experience significant seasonality, with the exception of our resort operations revenue, which tends to be higher in the first quarter.

Within our Exchange & Third-Party Management segment, we recognize exchange and Getaways revenue based on confirmation of the vacation;

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Consolidation may create competitors that enjoy significant advantages resulting from, among other things, a lower cost of, and greater access to, capital and enhanced operating efficiencies.

Our Interval International exchange business principally competes for developer and consumer market share with Wyndham Destinations, Inc.’s subsidiary, RCI.

Our Interval International exchange business principally competes for developer and consumer market share with Travel + Leisure Co.’s subsidiary, RCI.

Our subsidiary, Trading Places International, and several third parties operate in this industry with a significantly more limited scope of available accommodations.

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and the continuity of management and its strategic relationships within the industry.

Our business is heavily regulated.

Our business is heavily regulated and compliance with regulations has a significant impact on our results of operations.

We are subject to a wide variety of complex international, national, federal, state and local laws, regulations and policies in jurisdictions around the world.

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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 collection, use and protection of personal data of

our customers, as well as the sharing of our customer data with affiliates and third parties, are governed by privacy laws and regulations enacted in the United States, such as the recently enacted California Consumer Privacy Act (“CCPA”) which became effective January 1, 2020, and in other jurisdictions around the world, such as Europe’s General Data Protection Regulation (the “GDPR”).

The collection, use and protection of personal data of our customers, as well as the sharing of our customer data with affiliates and third parties, are governed by privacy laws and regulations enacted in the United States and other jurisdictions around the world.

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

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Human Capital

We recognize that our industry leadership depends in critical part on our continued ability to recruit, motivate, and retain the talented personnel that make up our global workforce.

We maintain a set of programs and initiatives designed to attract, develop, retain and engage our associates that is focused on:

ensuring competitive, fair, and transparent compensation and benefits offerings;

supporting the overall well-being of our associates from a physical, emotional, and social perspective;

We recognize that our industry leadership depends in critical part on our continued ability to recruit, motivate, and retain the talented associates that make up our global workforce.

We maintain a set of programs and initiatives, rooted in our Core Values (Caring Culture, Integrity First, Excellence Always, Customer Obsessed, and Better Together), designed to attract, develop, retain and engage our associates that is focused on:

• competitive, fair, and transparent compensation and benefits offerings;

• supporting the overall well-being of our associates from a physical, mental, and social perspective;

• creating opportunities for associate growth, development, recognition, training, and education;

• promoting an inclusive and diverse workplace, where all individuals are respected regardless of their age, race, notional origin, gender, religion, disability, or sexual orientation.

As of December 31, 2019 , we had a global workforce consisting of over 22,000 associates.

We believe our relations with our associates are very good.

As of December 31, 2020, we had a global workforce consisting of approximately 18,000 associates, of which almost 15,500 were based in the United States and approximately 2,500 were based in international locations.

In September 2020 we announced a workforce reduction plan that was expected to impact approximately 3,300 associates worldwide as a result of the adverse impact that the COVID-19 pandemic has had on demand for the Company’s products and services.

Since November 2020, approximately 3,000 associates have been impacted by the workforce reduction plan.

We expect that fewer associates than originally anticipated will be impacted due to the increasing demand for our products and services in our Florida and Hawaii vacation ownership resort locations.

Inclusion and Diversity

As a leisure-focused company, we are in the business of bringing people together.

Like our customers, our associates come from diverse backgrounds, offering invaluably distinct perspectives.

Women comprise 53.7 percent of our worldwide workforce and men comprise 46.3 percent.

Within the United States, people of color comprise 43.1 percent of our management level positions and women comprise 45.2 percent of our management level positions.

We are striving to make progress with recruiting efforts related to the placement of women and people of color in management roles.

In 2020, our executive officers participated in an Inclusion and Diversity executive leadership course facilitated by an industry expert.

Following this course, we committed to launching an Executive Inclusion Council, which is comprised of approximately 20 senior leaders dedicated to enabling and championing Inclusion and Diversity initiatives throughout the organization.

Top priorities include providing guidance regarding our Inclusion and Diversity strategy, increasing leaders’ ability to discuss and be held accountable for driving Inclusion and Diversity outcomes, and increasing awareness and impact of initiatives.

Associate Development

We seek to cultivate a learning-rich environment where associates are prepared to succeed and are motivated to serve our Owners, Members, and guests.

Our Global Learning and Performance team develops and deploys programs and resources for all our associates.

Our learning programs are designed to help ensure our company is a desirable place to start and maintain a fulfilling career, with increased opportunities for growth.

In light of the COVID-19 pandemic, a key training focus in 2020 was to provide curriculum on returning to work safely and supporting our associates’ overall health and well-being.

Our Global Learning and Performance team is also committed to providing our leaders with the opportunity to develop their leadership skills.

With a curriculum of approximately 15 distinct courses, the Leadership Development Program provides associates the tools, resources, and practice we believe are important to becoming successful leaders.

In 2020 we converted many of our classroom training offerings to virtual courses to support training in a socially distant manner.

Collective Bargaining Agreements

We are party to collective bargaining agreements in the United States and Mexico primarily with regard to employees working in food service, laundry, and hospitality and tourism.

We maintain a human rights policy that aligns with government, business, and public concerns about issues such as human trafficking and the exploitation of children.

We do not recruit child labor, and we support programs and partnerships that help at-risk young people and their families prepare for and find meaningful employment.

Available Information

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The information set forth below is as of February 22, 2021, except where indicated.

Name and Title

Business Experience

President and Chief Executive Officer

Weisz has served as our President since 1996 and as our Chief Executive Officer since 2011;

Name and Title Age Business Experience

Chief Executive Officer 70 Stephen P.

Weisz has served as our Chief Executive Officer since 2011, and as our President from 1996 through December 2020;

he has also been a member of our Board of Directors since 2011.

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Weisz is a past Chairman of the Board of Directors of the American Resort Development Association and also a past Chairman of the Board of Trustees of Children’s Miracle Network.

President and Chief Financial Officer

has served as President and Chief Financial Officer since January 2021.

From January 2018 to January 2021, he served as our Executive Vice President and Chief Financial and Administrative Officer.

From 2009 to December 2017, he served as our Executive Vice President and Chief Financial Officer.

Geller joined Marriott International in 2005 as Senior Vice President and Chief Audit Executive and Information Security Officer.

President, Exchange and Third-Party Management 64 Jeanette Marbert has served as our President, Exchange and Third-Party Management since October 2018.

She served as President and Chief Executive Officer for the Exchange and Rental Segment of ILG, Inc.

from November 2017 until September 2018, and as Executive Vice President from June 2009 until November 2017.

She was Chief Operating Officer of ILG, Inc.

from August 2008 to November 2017, and served as a Director of ILG, Inc.

from February 2015 to May 2016.

Marbert joined Interval in 1984.

President, Vacation Ownership 57 Brian E.

Miller has served as our President, Vacation Ownership since October 2020.

From October 2018 to September 2020, he served as our Executive Vice President and Chief Marketing, Sales and Service Officer.

From November 2011 to September 2018, he served as our Executive Vice President and Chief Sales and Marketing Officer.

Prior to that time, he had served as our Senior Vice President, Sales and Marketing and Service Operations since 2007.

Miller joined our company in 1991.

Lee Cunningham

Executive Vice President and Chief Operating Officer - Vacation Ownership

Executive Vice President and Chief Operating Officer - Vacation Ownership 61 R.

Lee Cunningham has served as our Executive Vice President and Chief Operating Officer - Vacation Ownership since September 2018.

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Cunningham joined Marriott International in 1982.

Executive Vice President and Chief Resort Experience Officer

Delorey has served as our Executive Vice President and Chief Resort Experience Officer since October 2012.

From May 2011 to October 2012, Mr.

Delorey served as Vice President of Operations for the Middle East and Africa region for Marriott International.

From April 2006 to May 2011, he served as our Vice President of Operations for the East region.

Delorey joined Marriott International in 1981.

Executive Vice President and Chief Financial and Administrative Officer

has served as our Executive Vice President and Chief Financial and Administrative Officer since January 2018.

From 2009 to December 2017, he served as our Executive Vice President and Chief Financial Officer.

Geller joined Marriott International in 2005 as Senior Vice President and Chief Audit Executive and Information Security Officer.

Name and Title Age Business Experience

Lori Gustafson

Executive Vice President and Chief Brand and Digital Strategy Officer 37 Lori Gustafson joined our company in November 2020 and serves as our Executive Vice President and Chief Brand and Digital Strategy Officer.

From May 2019 to November 2020, she served as Senior Vice President, Global Brands & Digital for Wyndham Destinations, where she was responsible for brand management and digital marketing.

From January 2018 to May 2019, she served as Vice President, Brand Marketing, where she was responsible for brand management, campaign development and advertising.

From July 2017 to January 2018, she served as Corporate Vice President of Digital, eCommerce, and Media at SeaWorld Parks & Entertainment, where she led the U.S.

team that oversaw the development of eCommerce, digital marketing, social media, business intelligence and digital content.

From 2015 until July 2017, she served as Senior Director, Digital Marketing at SeaWorld Parks & Entertainment, where she was the executive leader for digital transformation initiatives, including websites, mobile and digital commerce improvements and the implementation of a data and analytics program related to customer experience.

James H Hunter, IV

Executive Vice President and General Counsel

James H Hunter, IV has served as our Executive Vice President and General Counsel since November 2011.

Executive Vice President and General Counsel 58 James H Hunter, IV has served as our Executive Vice President and General Counsel since November 2011.

Prior to that time, he had served as Senior Vice President and General Counsel since 2006.

Hunter joined Marriott International in 1994.

Name and Title

Business Experience

Lizabeth Kane-Hanan

Executive Vice President and Chief Development and Product Officer

Lizabeth Kane-Hanan has served as our Executive Vice President and Chief Development and Product Officer since September 2018.

Executive Vice President and Chief Development and Product Officer 54 Lizabeth Kane-Hanan has served as our Executive Vice President and Chief Development and Product Officer since September 2018.

From November 2011 to August 2018, she served as our Executive Vice President and Chief Growth and Inventory Officer.

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Kane-Hanan joined our company in 2000.

Jeanette Marbert

President, Exchange and Third-Party Management

Jeanette Marbert has served as our President, Exchange and Third-Party Management since October 2018.

She served as President and Chief Executive Officer for the Exchange and Rental Segment of ILG, Inc.

from November 2017 until September 2018 and as Executive Vice President from June 2009 until November 2017.

She was Chief Operating Officer of ILG, Inc.

from August 2008 to November 2017 and served as a Director of ILG, Inc.

from February 2015 to May 2016.

Marbert joined Interval International in 1984.

Executive Vice President and Chief Marketing, Sales and Service Officer

Miller has served as our Executive Vice President and Chief Marketing, Sales and Service Officer since October 2018.

From November 2011 to September 2018, he served as our Executive Vice President and Chief Sales and Marketing Officer.

Prior to that time, he had served as our Senior Vice President, Sales and Marketing and Service Operations since 2007.

Miller joined our company in 1991.

Executive Vice President and Chief Information Officer

Executive Vice President and Chief Information Officer 60 Dwight D.

Smith has served as our Executive Vice President and Chief Information Officer since December 2011.

1 unchanged sentence

Smith joined Marriott International in 1988.

Executive Vice President and Chief Brand and Digital Strategy Officer

Ovidio Vitas has served as our Executive Vice President and Chief Brand and Digital Strategy Officer since February 2019.

From September 2018 to February 2019, he served as our Senior Vice President and Chief Brand and Digital Strategy Officer.

He joined our company in 2015.

From November 2013 to May 2015, Mr.

Vitas served as Director, Global Brand Communications at Reebok International Ltd.

Executive Vice President and Chief Human Resources Officer

Executive Vice President and Chief Human Resources Officer 62 Michael E.

Yonker has served as our Executive Vice President and Chief Human Resources Officer since December 2011.

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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