What changed in this filing

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Item 1A. Risk Factors

2024-02-27 compared with 2023-02-27 · 90 added, 92 removed, 343 unchanged (35% of the section changed)

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Additional risks and uncertainties that currently are not known to us or that we currently believe are immaterial also may adversely affect our businesses and operations.

Risks related to COVID-19 global or regional health concerns, outbreaks, and pandemics.

The COVID-19 pandemic has had, and may continue to have, serious adverse effects on our business, financial condition, cash flows, and results of operations for an unknown period of time and we may face similar health crises in the future.

The COVID-19 pandemic has caused and may continue to cause significant disruptions in international and U.S.

economies and markets and has had an unprecedented impact on participants in the travel and hospitality industries, including our Company.

In the future, COVID-19 or other outbreaks/pandemics could materially and adversely impact global travel, resulting in declines in our cash flows and results of operations.

As the spread of COVID-19 variants continues, both in the U.S.

and globally, there has been and continues to be significant volatility in global economies and financial markets.

The severity, magnitude and duration of the COVID-19 pandemic is uncertain, hard to predict, and can change rapidly.

Uncertainties related to health concerns, outbreaks and pandemics include, but are not limited to, an increase in the disruptive effect of the health crisis on the global, regional and local economies, supply chains, business partners, our workforce, traveler sentiment, resort occupancy and periodic mandates from governmental authorities to stay home, avoid non-essential contact and gatherings, self-quarantine or restricting travel to or from particular locations.

In 2020, we saw marked declines in occupancy, rentals, and contract sales because of the temporary closure of nearly all of our sales centers, the temporary closure of many of our resorts, the temporary closure of our branded North America vacation ownership resorts for rental stays, and the reduction in operations and amenities at all of our resorts based on government mandates and advisories.

Protocols adopted to combat the COVID-19 pandemic, such as canceling, or implementing alternatives or modifications to, in-person sales tours and customized presentations, and reductions in amenities at our resorts, have resulted, and similar measures implemented in the future as a result of regional or global health concerns, outbreaks, or pandemics could result, in less effective customer-associate interaction and diminished customer satisfaction, which could adversely impact our financial condition.

Extended or further closures in the future may be required nationally, regionally, or in specific locations in the event of a resurgence of coronavirus, new strains, or another widespread or regional health crisis.

The success of our business and our financial results depend, in substantial part, upon the health of the travel industry, which has been materially adversely affected by the COVID-19 pandemic.

As new variants of the coronavirus or other health crises make headlines from time to time, consumer fear about contracting COVID-19 or other illnesses and recommendations or mandates from governmental authorities to avoid large gatherings of people or self-quarantine, may increase.

Risks related to global or regional health concerns, outbreaks, and pandemics (each a “Health Crisis”).

The COVID-19 pandemic had, and a future Health Crisis may have, serious adverse effects on our business, financial condition, cash flows, and results of operations for an unknown period of time.

The COVID-19 pandemic caused, and a future Health Crisis may cause, significant disruptions in international and U.S.

economies and markets and have a material adverse impact on participants in the travel and hospitality industries, including our Company.

The success of our business and our financial results depend, in substantial part, upon the health of the travel industry.

Our business and financial results were materially adversely affected by the COVID-19 pandemic in 2020;

for example, we saw marked declines in occupancy, rentals, and contract sales because of the temporary closure of nearly all of our sales centers and many of our resorts and the reduction in operations and amenities at all of our resorts.

When Health Crises make headlines from time to time, consumer fear about contracting an illness and recommendations or mandates from governmental authorities to avoid large gatherings of people or self-quarantine, may increase.

These recommendations and mandates have affected, and may affect in the future, resort occupancies.

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Our rental revenue is also substantially impacted by the desire and ability of vacationers to travel.

Fear of exposure to the COVID-19 virus or other illnesses, government restrictions on travel, including quarantine requirements, low vaccination rates in some parts of the world and variants of COVID-19 that may be resistant to available vaccines have caused travelers to cancel or delay plans to travel to our resorts.

These changes in vacation and travel patterns have adversely affected our cash flows, revenues, and results of operations, and may continue to do so, particularly for our international operations, such as those in the Asia-Pacific region.

Moreover, when travel advisories and restrictions have been lifted, there has been a resurgence of the virus, and as a result, travel demand is unpredictable and could remain so for a significant period.

Adverse changes in the perceived or actual economic climate, including higher unemployment rates, declines in income levels, inflation, recession and loss of personal wealth resulting from the impact of the COVID-19 pandemic may negatively affect travel demand for a prolonged period.

Any future health crises may also adversely affect our business in a similar or more severe manner.

Fear of exposure to viruses or other illnesses, government restrictions on travel, including quarantine requirements, low vaccination rates in some parts of the world and viruses or other illnesses that may be resistant to available vaccines could cause travelers to cancel or delay plans to travel to our resorts.

These changes in vacation and travel patterns could adversely affect our cash flows, revenues, and results of operations.

Moreover, when travel advisories and restrictions are lifted, there could be a resurgence of the virus or illness, and as a result, travel demand could be unpredictable and could remain so for a significant period.

Adverse changes in the perceived or actual economic climate, including higher unemployment rates, declines in income levels, inflation, recession and loss of personal wealth resulting from the impact of a future Health Crisis may negatively affect travel demand for a prolonged period.

The onset of the COVID-19 pandemic led to an increase in payment delinquencies and defaults for our vacation ownership notes receivable.

The number of delinquencies may increase again as the pandemic continues or its effect on economic conditions and the ability and desire to travel continues and could lead to defaults on financing that we provide to purchasers of our products in excess of our estimates.

Future health crises may also have such adverse effects.

The number of delinquencies may increase as the result of a future Health Crisis’s effect on economic conditions and the ability and desire to travel, and could lead to defaults on financing that we provide to purchasers of our products in excess of our estimates.

Purchaser defaults may cause us to foreclose on vacation ownership notes receivable and reclaim ownership of the financed interests and could impact our ability to secure ABS or warehouse credit facility financing on terms that are acceptable to us, or at all.

In addition, the transactions in which we have securitized vacation ownership notes receivable contain certain portfolio

performance requirements related to default and delinquency rates, which, if not met, would result in loss or disruption of cash flow until portfolio performance sufficiently improves to satisfy the requirements.

The duration and extent of the impact of the COVID-19 pandemic or a future health crisis on our business and financial results will largely depend on future developments, including the duration and spread of the pandemic or other health crisis, the extent and severity of any resurgences of the pandemic or other health crisis in the future, the response by all levels of government in their efforts to contain the pandemic or other health crisis to mitigate the economic disruptions, the related impact on consumer confidence and spending, and how quickly economies and demand for our products and services recover after the pandemic or other health crisis subsides, all of which are highly uncertain, can rapidly change and cannot be predicted.

In addition, the transactions in which we have securitized vacation ownership notes receivable contain certain portfolio performance requirements related to default and delinquency rates, which, if not met, would result in loss or disruption of cash flow until portfolio performance sufficiently improves to satisfy the requirements.

The duration and extent of the impact of a future Health Crisis on our business and financial results will largely depend on future developments, including the duration and spread of the Health Crisis, the response by all levels of government in their efforts to contain the Health Crisis to mitigate the economic disruptions, the related impact on consumer confidence and spending, and how quickly economies and demand for our products and services recover after the Health Crisis subsides, all of which are highly uncertain, can rapidly change and cannot be predicted.

Such impacts could adversely affect our results of operations, cash flows, and capital resources for a significant period.

Further, the COVID-19 pandemic or a future health crisis may also adversely affect our cash flows and operating and financial results in a manner that is not presently known to us or that we currently do not consider to present significant risks to our operations.

Further, a future Health Crisis may also adversely affect our cash flows and operating and financial results in a manner that is not presently known to us or that we currently do not consider to present significant risks to our operations.

Risks related to our business and industry.

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A substantial amount of our sales activity occurs at our resorts, and sales volume is affected by the number of visitors at our resorts.

Fear of exposure to contagious illnesses, such as COVID-19 or other diseases, or natural or man-made disasters, and the physical effects of climate change, such as more frequent or severe storms, droughts, hurricanes, erosion and flooding, have caused and may continue to cause travelers to delay or cancel travel plans, including sales tours at our resorts, with greater frequency.

Fear of exposure to contagious illnesses, such as COVID-19 or other Health Crises, or natural or man-made disasters, and the physical effects of climate change, such as more frequent or severe storms, droughts, hurricanes, wildfires, erosion and flooding, have caused and may continue to cause travelers to delay or cancel travel plans, including sales tours at our resorts, with greater frequency.

Other factors such as weakened consumer confidence, limited availability or increased costs of consumer credit and damage to infrastructure caused by natural or man-made disasters or other causes that impede travel have caused, and may in the future cause, travelers to delay or cancel plans to tour or visit our resorts.

For example, hurricanes have caused a number of Interval International exchange network resorts and our managed vacation ownership resorts to close for prolonged periods.

For example, hurricanes and wildfires have caused a number of Interval International exchange network resorts and our managed vacation ownership resorts to close for prolonged periods.

The wildfires in Maui last year also resulted in the temporary closure of our resorts and sales centers in Maui, which had an adverse effect on our business and results of operations for 2023.

At times, beach access at our resorts and our managed resorts has been impeded by weather conditions or due to the effects of erosion.

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Our results of operations can be adversely affected by labor shortages, turnover and labor cost increases.

A number of factors may adversely affect the labor force available or increase labor costs from time to time, such as high employment levels, federal unemployment subsidies, including unemployment benefits offered in response to the COVID-19 pandemic or other health crises, and other government actions.

A number of factors may adversely affect the labor force available or increase labor costs from time to time, such as high employment levels, increasing minimum wage rates, federal unemployment subsidies, including unemployment benefits offered in response to a Health Crisis, and other government actions.

In 2021, we observed an overall tightening and increasingly competitive labor market.

As a result, we had to temporarily close outlets (e.g., food and beverage) or reduce services (e.g., housekeeping performed fewer cleans throughout the week), and we may have to take these or similar steps in the future.

As a result, we had to temporarily close outlets (e.g., food and beverage) or reduce services (e.g., housekeeping performed fewer cleanings throughout the week), and we may have to take these or similar steps in the future.

Any such changes may harm our revenues, cash flows, profitability or customer satisfaction.

We have also incurred, and may incur in the future, additional costs for overtime wages, increased wages, enhanced referral bonuses, increased use of sign on bonuses, and increased marketing for open positions.

A sustained labor shortage or increased turnover rates within our employee base, whether due to the impact of COVID-19 global health concerns or as a result of general macroeconomic factors, could lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees, and could negatively affect our ability to efficiently operate our business.

A sustained labor shortage or increased turnover rates within our employee base, whether due to a Health Crisis or as a result of general macroeconomic factors, could lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees, and could negatively affect our ability to efficiently operate our business.

If we are unable to hire and retain employees capable of performing at a high level, our business, including our cash flows, results of operations, owner, guest and associate satisfaction and reputation, could be adversely affected.

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While we adjust interest rates on our financing programs from time to time, such changes are typically not made in lockstep with the timing and magnitude of changes in broader market rates.

As a result, our financing profit margin has declined.

As a result, our financing profit margin declined in 2023 due to general market interest rate increases, and may decline again in the future.

Increasing our financing rates could negatively impact VOI sales and financing propensity.

However, if we are unable to increase our financing rates at the same rate as our costs of funds, our financing profits will be negatively impacted.

However, if we are unable to increase our financing rates at the same rate as our costs of funds, our financing profits will be negatively impacted, as happened in 2023.

Our business is extensively regulated, and any failure to comply with applicable laws could materially adversely affect our business.

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customers or otherwise control or process personal data of E.U.

Complying with the GDPR, other international laws and regulation, and state and federal laws and regulation could subject us to increased costs;

Complying with the GDPR, other international laws and regulations, and state and federal laws and regulations could subject us to increased costs;

and our failure to comply with these laws and regulations could result in significant fines, litigation, losses, third-party damages and other liabilities, any of which may have a material adverse effect on our brands, marketing, reputation, business, financial condition and results of operations.

The cost of compliance with privacy laws in the jurisdictions in which we operate has increased and may continue to increase as laws change and we expand into new jurisdictions and become subject to the privacy laws of such jurisdictions.

If we are not able to develop adequate alternative marketing strategies, our sales may be adversely

If we are not able to develop adequate alternative marketing strategies, our sales may be adversely affected.

We also obtain access to potential customers from travel service providers and other companies with whom we have relationships.

If our access to these third-party customer lists is prohibited or restricted, our ability to develop new customers and introduce our products to them could be impaired.

Failure to maintain the integrity of internal or customer data or to protect our systems from cyber-attacks could disrupt our business, damage our reputation, and subject us to costs, fines or lawsuits.

Failure to maintain the integrity of internal or customer data or to protect our information systems from cyber-attacks could disrupt our business, damage our reputation, and subject us to costs, fines or lawsuits.

We collect large volumes of data, including social security numbers and other personally identifiable information of our customers and employees, and retain it in our information systems and those of our service providers.

It is critical that we maintain the integrity of and protect this data, which we rely on to make business decisions and which our customers and employees expect that we will protect.

The regulatory environment in the jurisdictions where we operate and the requirements imposed on us by the payment card industry regarding information, security and privacy is increasingly demanding.

Many of the laws applicable to us in different jurisdictions vary from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Our efforts to comply with these requirements may require significant additional resources and time and may not be successful.

We may be required to expend significant capital and other resources to enhance the security of our data.

Our information systems and records, including those we maintain with our service providers or licensors, may be subject to security breaches, cyber-attack or cyber-intrusion, system failures, viruses, operator error or inadvertent releases of data.

Data breaches have increased in recent years as the number, intensity and sophistication of attacks have increased.

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A breach in the security of our information systems or those of our service providers or licensors could lead to an interruption in the operation of our systems, resulting in operational inefficiencies and a negative impact to our results of operations.

A significant cyber-attack or theft, loss, or fraudulent use of our customer, employee or company data could adversely impact our reputation and result in remedial and other expenses, fines or litigation.

We and the companies we work with have experienced cyber security threats to our data and systems, including ransomware and other forms of malware and computer virus attacks, unauthorized access, systems failures and temporary disruptions.

We have experienced cyber incidents in the past, and have previously disclosed those with material operational or financial implications to the Company or our stakeholders.

A significant cybersecurity incident or theft, loss, disclosure, or fraudulent use of our customer, employee or company data could adversely impact our reputation and result in remedial and other expenses, fines, penalties or litigation, any of which may be exacerbated by a delay or failure to detect a cybersecurity incident or the full extent of such incident.

The regulatory environment in the jurisdictions where we operate, and the requirements imposed on us by the payment card industry regarding information, security and privacy, are increasingly demanding.

Many of the laws applicable to us in different jurisdictions vary from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Our efforts to comply with these requirements may require significant additional resources and time and may not be successful.

We and the companies we work with have experienced cybersecurity threats to our data and systems, including ransomware and other forms of malware and computer virus attacks, unauthorized access, systems failures and temporary disruptions.

We have experienced cybersecurity incidents in the past, and have previously disclosed those with material operational or financial implications to the Company or our stakeholders.

Routinely, we partner with and use third-party service providers and products that host, manage, or control sensitive data.

The failure of any such service providers or products to comply with our privacy policies or privacy laws and regulations, or any unauthorized release of personally identifiable information or other user data, could damage our reputation, discourage potential users from trying our products and services, breach certain agreements under which we have obligations with respect to network security, and result in fines and proceedings against us by governmental agencies, service providers and consumers.

To the extent our liability insurance covers claims and losses arising from cybersecurity incidents or attacks, such insurance might not be sufficient in type or amount to cover us against such claims or losses.

Any of the foregoing could materially adversely affect our business, financial condition and results of operations.

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Our operations and competitive position depend on our ability to maintain existing systems and implement new technologies.

Our information technology systems and our databases are potentially susceptible to manmade and natural disasters, as well as power losses, computer and telecommunications failures, technological breakdowns, cyber-attacks, acts of war or terrorism and other events.

Our information technology systems and our databases are potentially susceptible to man-made and natural disasters, as well as power losses, computer and telecommunications failures, technological breakdowns, cyber-attacks, acts of war or terrorism and other events.

System interruption, delays, obsolescence, loss of critical data and lack of integration and redundancy in our information technology systems and infrastructure may adversely affect our ability to provide services, operate websites, process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficient operations.

Our backup systems only relate to certain aspects of our operations;

these systems are not fully redundant and disaster recovery planning is not sufficient for all eventualities.

Projects to upgrade or replace our technologies may be extremely complex and require significant resources and time and may adversely affect our ability to provide services, operate websites, process and fulfill

transactions, and respond to customer inquiries during the upgrade or replacement process.

In addition, we may not have adequate insurance coverage to compensate for losses from a major interruption.

these systems are not fully redundant and disaster recovery planning cannot anticipate and address all eventualities.

Projects to upgrade or replace our technologies may be extremely complex and require significant resources and time, and may adversely affect our ability to provide services, operate websites, process and fulfill transactions, and respond to customer inquiries during the upgrade or replacement process.

In addition, we may not have adequate insurance coverage to compensate for losses

from a major interruption.

If our information technology systems fail to adequately support our strategic, operational or compliance needs, our business, financial position, results of operations or cash flows, as well as our disclosure controls and procedures and internal control over financial reporting, may be adversely affected.

Spanish court rulings voiding certain timeshare contracts have increased our exposure to litigation that may materially adversely affect our business and financial condition.

A series of Spanish court rulings that, since 2015, have voided certain timeshare contracts has increased our exposure to litigation that may materially adversely affect our business and financial condition.

A series of Spanish court rulings starting in 2015 increased our exposure to litigation that may materially adversely affect our business and financial condition.

These rulings voided certain timeshare contracts entered into after January 1999 related to certain resorts in Spain if a resort’s timeshare structure did not meet requirements prescribed by Spanish timeshare laws enacted in 1998, even if the structure was lawful prior to 1998 and adapted pursuant to mechanisms specified in the 1998 laws.

These rulings have led to an increase in lawsuits by owners seeking to void timeshare contracts in Spain, including certain contracts at certain of our resorts in Spain.

These rulings have led to an increase in lawsuits by owners seeking to void timeshare contracts in Spain, including lawsuits by owners at certain of our resorts in Spain which are currently pending.

However, the Supreme Court of Spain has not yet substantively opined on the issue as it pertains to the Company’s timeshare contracts.

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and materially adversely affect the results of operations of our Vacation Ownership segment, as well as our business and financial condition.

The increased ability for owners of Spanish timeshares to void their contracts has negatively impacted other developers with resorts in Spain and led to a significant decrease in the number of resorts located in Spain in the Interval International network with active sales and the loss of members who own VOIs at those resorts.

The increased ability for owners of Spanish timeshares to void their contracts has negatively impacted other developers with resorts in Spain and led to a decrease in the number of resorts located in Spain in the Interval Network with active sales and the loss of members who own VOIs at those resorts.

The industries in which our businesses operate are competitive, which may impact our ability to compete successfully.

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Through the resources of its corporate affiliates, particularly, Travel + Leisure Co., which is engaged in vacation ownership sales, RCI may have greater access to a significant segment of new vacation ownership purchasers and a broader platform for participating in industry consolidation.

In addition, Interval International competes with developers that create, operate and expand internal exchange and vacation club systems, which decreases their reliance on external vacation ownership exchange programs, including those we offer, and adversely impacts the supply of resort accommodations available through our external exchange networks.

The effects of such competition on our exchange business are more pronounced as the proportion of vacation club corporate members in the Interval International network increases.

The effects of such competition on our exchange business are more pronounced as the proportion of vacation club corporate members in the Interval Network increases.

Our businesses also compete for leisure travelers with other leisure lodging operators, including both independent and branded properties, as well as with alternative lodging marketplaces, which operate websites that market furnished, privately-owned residential properties throughout the world which can be rented on a nightly, weekly or monthly basis.

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Our business is susceptible to the effects of natural or man-made disasters, including earthquakes, windstorms, tornadoes, hurricanes, typhoons, tsunamis, volcanic eruptions, floods, drought, fires, oil spills, erosion and nuclear incidents, in the areas where some of our resorts, sales centers and exchange destinations are concentrated, such as Florida, California, South Carolina and Hawaii.

For example, properties in these markets have had to close in the past, including for extended periods, in order to repair damage caused by disasters.

Properties in these markets have had to close in the past, including for extended periods, in order to repair or assess damage caused by disasters.

For example, we temporarily closed our resorts and sales centers last year as a result of wildfires in Maui.

Depending on the severity of future disasters, the resulting damage could require closure of all or substantially all of our properties in one or more of these markets while we complete renovations.

Our insurance may not cover all damages caused by any such event, including the loss of sales of VOIs at sales centers that are not fully operational.

In addition, insurance costs may increase and coverage levels may decrease for properties in these areas as a result of the number and magnitude of recent natural disasters in these areas.

In 2023, our cost to insure our properties in these areas increased significantly.

Our insurance costs may rise again in the future and coverage levels may decrease for properties in these areas as a result of the number and magnitude of recent natural disasters in these areas.

Our business is also susceptible to the effects of adverse economic developments in these areas, such as regional economic downturns, significant increases in the number of our competitors’ products in these markets and potentially higher labor, real estate, tax or other costs in these geographic markets.

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Failure to achieve the anticipated benefits of any acquisition may adversely affect our financial condition, operating results and prospects.

Acquisitions may also significantly increase our debt or result in dilutive issuances of our equity securities, write-offs of goodwill or substantial amortization expenses associated with other intangible assets.

Acquisitions may also significantly increase our debt or result in dilutive issuances of our equity securities, impairments of goodwill or substantial amortization expenses associated with other intangible assets.

Our use of different estimates and assumptions in the application of our accounting policies could result in material changes to our reported financial condition and results of operations, and changes in accounting standards or their interpretation could significantly impact our reported results of operations.

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For example, in response to the COVID-19 pandemic, we increased our reserve for vacation ownership notes receivable due to higher default expectations and revised our estimates of the fair value of our reporting units, resulting in the impairment of goodwill.

See the “Critical Accounting Estimates” section of Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for further information.

In addition, the regulatory bodies that establish accounting and reporting standards, including the SEC and the Financial Accounting Standards Board, periodically revise or issue new financial accounting and reporting standards that govern the preparation of our consolidated financial statements.

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Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.

Companies are facing increasing and frequently evolving scrutiny globally from customers, regulators, investors, employees and other stakeholders related to their ESG practices and disclosure.

Companies are facing increasing and frequently evolving scrutiny globally from customers, regulators, investors, employees and other stakeholders related to their environmental, social, and governance (“ESG”) practices and disclosure.

Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, board and workforce diversity, labor conditions, human rights, and cybersecurity and data privacy.

Third parties have also developed proprietary ratings or analyses of companies based on certain ESG metrics.

ESG disclosure rules have been adopted by California and the European Union, and are being considered by the SEC.

Increased ESG-related compliance costs could result in increases to our overall operational costs.

Failure to adapt to or comply with regulatory requirements or investor or other stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, and stock price.

New government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence, and disclosure.

Our ESG initiatives and goals may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to change in the future.

As we report on our ESG initiatives or goals, we may be subject to heightened reputational and operational risk and compliance costs related to these matters.

Also, we do not exercise complete control over all resorts and properties that we manage;

rather, our control over these properties is generally limited by the terms of the applicable management agreements.

As a result, our ability to achieve some or all of our ESG initiatives or goals may be limited without additional support or action by the owners’ associations of the vacation ownership resorts and properties we manage.

Our corporate responsibility initiatives and goals are based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to change in the future.

As we report on our corporate responsibility initiatives or goals, we may be subject to heightened reputational and operational risk and compliance costs related to these matters.

Our control over resorts and properties that we manage is generally limited by the terms of the applicable management agreements.

As a result, our ability to achieve some or all of our corporate responsibility initiatives or goals may be limited without additional support or action by the owners’ associations of the vacation ownership resorts and properties we manage.

Complying with increased regulations could increase our costs and adversely impact our results of operations.

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These relationships are governed by various agreements, including long-term license agreements that expire between 2090 and 2095, subject to renewal.

However, if we breach our obligations under a license agreement, the applicable licensor may be entitled to terminate the license agreement and our rights to use its brands in connection with our businesses.

However, if we breach our obligations under a license agreement and remain in breach after the applicable notice and cure period, the applicable licensor may be entitled to terminate the license agreement and our rights to use its brands in connection with our businesses.

In addition, if any of our properties does not meet applicable brand standards, the applicable licensor can terminate our right to use its trademarks at the subject properties.

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Our inability to rely on the strength of the Marriott, Sheraton, Westin, or Hyatt brands to attract qualified prospects in the marketplace would likely cause our results of operations to decline and our marketing and sales expenses to increase.

Our inability to market to guests in hotels affiliated with our licensors that are located near one of our sales locations or maintain our marketing partnerships with Marriott International or Hyatt reservation centers would cause our sales to decline, which could adversely affect our financial condition and results of operations.

Our inability to market to guests in hotels affiliated with our licensors that are located near one of our sales locations or maintain our marketing relationships with Marriott International or Hyatt reservation centers would likely cause our sales to decline, which could adversely affect our financial condition and results of operations.

In addition, we would not be able to use the brand websites as channels through which to rent available inventory, which would cause our rental revenue to decline materially.

Our license agreements also allow us to offer points to members of the customer loyalty programs associated with the Marriott, Sheraton, Westin and Hyatt brands, which provides us with the opportunity to market directly to these members.

Our license agreements also allow us to market directly to members of the customer loyalty programs associated with the Marriott, Sheraton, Westin and Hyatt brands, and offer points in such loyalty programs as premiums for related promotional offers.

The termination of the license agreements with Marriott International or Hyatt would eliminate this valuable marketing channel.

We must also obtain the applicable licensor’s consent to use its trademarks in connection with properties we acquire or develop in the future.

If our licensors do not consent to such use, our ability to expand our business and remain competitive may be materially adversely affected.

We must obtain the applicable licensor’s consent to use its trademarks in connection with properties we acquire or develop in the future.

If our licensors do not consent to such use as required by the applicable license agreement, our ability to expand our business and remain competitive may be materially adversely affected.

Deterioration in the quality or reputation of the brands associated with our portfolio could adversely affect our market share, reputation, business, financial condition and results of operations.

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Marriott International or Hyatt could compete with our vacation ownership business in the future.

Under the license agreements with Marriott International, if other international hotel operators offer new products and services as part of their respective hotel businesses that may directly compete with our vacation ownership products and services, then Marriott International may also offer such new products and services, and use its trademarks in connection with such offers.

Under the Hyatt license agreement, Hyatt may compete with us under certain circumstances, e.g., if we fail to meet certain performance standards or if Hyatt acquires a new hotel brand that Hyatt determines to license for timeshare and we are unsuccessful negotiating license rights pursuant to our right of first offer.

If Marriott International or Hyatt offers new vacation ownership products and services under their trademarks, they may compete directly with our vacation ownership products and services, and we may not be able to distinguish our vacation ownership products and services from those offered by Marriott International or Hyatt.

Under our license agreements with Marriott International, if other international hotel operators offer new products and services as part of their respective hotel businesses that may directly compete with our vacation ownership products and services, then Marriott International may also offer such new products and services, and use its trademarks in connection with such offers.

Under the Hyatt license agreement, Hyatt may compete with us under certain circumstances, such as if we fail to meet certain performance standards or if Hyatt acquires a new hotel brand that Hyatt desires to license for timeshare and we are unsuccessful in negotiating such license rights pursuant to our right of first offer.

If Marriott International or Hyatt offers new vacation ownership products and services as contemplated under certain circumstances under their respective license agreements, they may compete directly with our vacation ownership products and services, and we may not be able to distinguish our vacation ownership products and services from those offered by Marriott International or Hyatt.

Our ability to remain competitive and to attract and retain owners depends on our success in distinguishing the quality and value of our products and services from those offered by others.

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Borrower defaults have caused, and may continue to cause, us to foreclose on vacation ownership notes receivable and reclaim ownership of the financed interests, both for loans that we have not securitized and in our role as servicer for the vacation ownership notes receivable we have securitized through the ABS market or the Warehouse Credit Facility.

If default rates for our borrowers increase, we have been required, and may in the future be required, to increase our reserve on vacation ownership notes receivable, which may reduce our earnings.

If default rates increase beyond current projections and result in higher than expected foreclosure activity, our results of operations could be adversely affected.

If default rates for our borrowers increase, we have been required, and may in the future be required, to increase our reserve on vacation ownership notes receivable, which would reduce our earnings.

If default rates increase beyond current projections and result in higher than expected foreclosure activity, our results of operations would be adversely affected.

Borrower defaults could impact our ability to secure ABS or warehouse credit facility financing on terms that are acceptable to us, or at all.

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or (3) significant unanticipated increases in sales pace.

If the inventory available for sale for a particular trust were to be depleted before new inventory is added and available for sale, we would be required to temporarily suspend sales until inventory is replenished or shift to selling an alternative product which may increase marketing and sales costs and lower VPG.

If the inventory available for sale for a particular trust were to be depleted before new inventory is added and available for sale, we would be required to temporarily suspend sales until inventory is replenished or shift to selling an alternative product, which may increase marketing and sales costs and lower volume per guest (“VPG”).

Our efforts to avoid the risk of temporary inventory depletion by maintaining a surplus supply of completed inventory based on our forecasted sales pace, and by employing other mitigation strategies such as accelerating completion of resorts under construction, acquiring VOIs on the secondary market, or reducing sales pace by adjusting prices or sales incentives, may not be successful.

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If a resort fails to comply with applicable brand standards, the applicable licensor could terminate our rights to use its trademarks at the resort, which would result in the loss of management fees, decreased customer satisfaction, and impairment of our ability to market and sell our products at the non-compliant locations.

Increases in maintenance fees to keep pace with maintenance and other costs may make our products less desirable, which could negatively impact sales and cause an increase in defaults on our vacation ownership notes receivable portfolio.

Increases in maintenance fees to keep pace with operating expenses, maintenance and other costs may make our products less desirable, which could negatively impact sales and cause an increase in defaults on our vacation ownership notes receivable portfolio.

If the owners’ associations that we manage are unable to collect sufficient maintenance fees to cover operating and maintenance costs, the related resorts may have to close or file for bankruptcy, which may result in termination of our management agreements.

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Market forces beyond our control may limit the scope, terms, and conditions of the insurance coverage we are able to obtain or our ability to obtain coverage at reasonable rates, which may affect our ability to maintain customary insurance coverages and deductibles at acceptable costs.

Certain types of losses, generally of a catastrophic nature, such as earthquakes, hurricanes and floods, or terrorist acts, may be uninsurable or the price of coverage for such losses may be too expensive to justify obtaining insurance.

Certain types of losses, generally of a catastrophic nature, such as earthquakes, hurricanes, wildfires, and floods, or terrorist acts, may be uninsurable or the price of coverage for such losses may be too expensive to justify obtaining insurance.

The effects of climate change, such as increased storm intensity and rising temperatures or sea levels over time, may also increase the cost of property insurance and decrease our coverage levels.

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Our third-party management business depends on relationships with vacation property and hotel owners.

If we are unable to negotiate new affiliation agreements with resort developers or secure renewals with existing members or developers in our Interval International network, as has occurred in the past, the number of new and existing members, the supply of resort accommodations available through our exchange networks and related revenue could decrease.

If we are unable to negotiate new affiliation agreements with resort developers or secure renewals with existing members or developers in our Interval Network, as has occurred in the past, the number of new and existing members, the supply of resort accommodations available through our exchange network and related revenue could decrease.

The failure to secure the renewal of affiliation agreements with developers with corporate member relationships, where the developer renews Interval International membership fees for all of its active owners, has a greater adverse effect.

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and owner decisions to travel to their home resort/vacation club system or otherwise not deposit exchange inventory.

The factors that affect demand for specific destinations could significantly reduce the number of accommodations available in such areas for exchanges.

The factors that affect demand for specific destinations could significantly reduce the number of

accommodations available in such areas for exchanges.

The level of inventory in our system also depends on the number of developers whose resorts are in our exchange network, and the numbers of members of such resorts.

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Our indebtedness may restrict our operations.

As of December 31, 2022, we had approximately $3.1 billion of total corporate indebtedness outstanding and could borrow an additional $749 million under the Revolving Corporate Credit Facility.

The credit agreement that governs the Corporate Credit Facility and the indentures that govern our various senior notes impose significant operating and financial restrictions on us, which among other things limit our ability and the ability of certain of our subsidiaries to incur debt, pay dividends and make other restricted payments, make loans and investments, incur liens, sell assets, enter into affiliate transactions, enter into agreements restricting certain subsidiaries’ ability to pay dividends and consolidate, merge or sell all or substantially all of their assets.

As of December 31, 2023, we had approximately $3 billion of total corporate indebtedness outstanding and could borrow an additional $621 million under a revolving corporate credit facility with a borrowing capacity of $750 million (the “Revolving Corporate Credit Facility”).

The credit agreement that governs our corporate credit facility (“Corporate Credit Facility”) and the indentures that govern our various senior notes impose significant operating and financial restrictions on us, which among other things limit our ability and the ability of certain of our subsidiaries to incur debt, pay dividends and make other restricted payments, make loans and investments, incur liens, sell assets, enter into affiliate transactions, enter into agreements restricting certain subsidiaries’ ability to pay dividends and consolidate, merge or sell all or substantially all of their assets.

All of these covenants and restrictions limit how we conduct our business.

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Default rates may deteriorate due to many different reasons, including those beyond our control, such as financial hardship of purchasers.

In addition, if we offer loans to our customers with terms longer than those generally offered in the industry, our ability to securitize those loans may be adversely impacted.

In addition, if we offer loans to our customers with terms longer or different than those generally offered in the industry, our ability to securitize those loans may be adversely impacted.

Instability in the credit markets may impact the timing and volume of the vacation ownership notes receivable that we are able to securitize, as well as the financial terms of such securitizations.

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If any holders elect to convert their convertible notes, we may elect to settle all or a portion of our conversion obligation through the payment of cash, which could adversely affect our liquidity.

The way we account for our convertible notes may impact our reported or future financial results and the market price of our common stock.

The way we account for our convertible notes may impact our financial results and the market price of our common stock.

For example, in 2022, we adopted a new accounting standard that requires the use of the “if-converted” method for calculating diluted earnings per share, which resulted in the reduction of our reported diluted earnings per share.

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Risks related to ownership of our common stock.

Our share repurchase program may not enhance long-term shareholder value and could increase the volatility of the market price of our common stock and diminish our cash.

Our share repurchase program may not enhance long-term stockholder value and could increase the volatility of the market price of our common stock and diminish our cash.

Our share repurchase program does not obligate us to repurchase any shares of our common stock.

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The existence of a share repurchase program could cause our stock price to be higher than it would be absent the program and could reduce market liquidity for our stock.

Use of our funds to repurchase shares could diminish our cash reserves, which may impact our ability to finance growth, pursue strategic opportunities, and discharge liabilities.

Our share repurchases may not enhance shareholder value because the market price of our common stock may decline below the prices at which we repurchased shares and short-term stock price fluctuations could reduce the program’s effectiveness.

Use of our funds to repurchase shares could diminish our cash reserves, which may

impact our ability to finance growth, pursue strategic opportunities, and discharge liabilities.

Our share repurchases may not enhance stockholder value because the market price of our common stock may decline below the prices at which we repurchased shares and short-term stock price fluctuations could reduce the program’s effectiveness.

Our ability to pay dividends on our stock is limited.

We may not declare or pay dividends in the future at any particular rate or at all.

Our Board of Directors makes all decisions regarding our payment of dividends, subject to an evaluation of our financial condition, results of operations and capital requirements, as well as applicable law, regulatory and contractual constraints, industry practice and other business considerations that our Board of Directors considers relevant.

Our Board makes all decisions regarding our payment of dividends, subject to an evaluation of our financial condition, results of operations and capital requirements, as well as applicable law, regulatory and contractual constraints, industry practice and other business considerations that our Board considers relevant.

Certain of the agreements governing our indebtedness restrict our ability and the ability of our subsidiaries to pay dividends, and the terms of agreements governing debt that we may incur in the future may also limit or prohibit dividend payments.

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Anti-takeover provisions in our organizational documents, Delaware law and in certain of our agreements could delay or prevent a change in control.

Provisions of our Charter and Bylaws, as well as provisions in the agreements with our licensors, may delay or prevent a merger or acquisition that a shareholder may consider favorable.

For example, our Charter and Bylaws provide for a classified board, require advance notice for shareholder proposals and nominations, place limits on convening shareholder meetings and authorize our Board of Directors to issue one or more series of preferred stock.

Provisions of our Charter and Bylaws, as well as provisions in the agreements with our licensors, may delay or prevent a merger or acquisition that a stockholder may consider favorable.

For example, our Charter and Bylaws require advance notice for stockholder proposals and nominations, place limits on convening stockholder meetings and authorize our Board of Directors to issue one or more series of preferred stock.

Delaware law also restricts some business combinations between any holder of 15% or more of our outstanding common stock and us.

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In connection with Vistana’s spin-off from Starwood and acquisition by ILG (the “Vistana Spin-Off”), ILG and Vistana entered into a Tax Matters Agreement that restricts them from actions or omissions that would cause the Vistana Spin-Off to become taxable.

Failure to adhere to these restrictions, including in certain circumstances that may be outside of our control, could result in tax being imposed on Starwood or its shareholders for which we may be obligated to indemnify Starwood.

Failure to adhere to these restrictions, including in certain circumstances that may be outside of our control, could result in tax being imposed on Starwood or its stockholders for which we may be obligated to indemnify Starwood.

Even if we are not responsible for such tax liabilities under the Tax Matters Agreement, we may be liable under applicable tax law for such liabilities if Starwood fails to pay such taxes.

For two years after the Vistana Spin-Off, the Tax Matters Agreement prohibited Vistana and ILG from taking certain actions involving their stock or Vistana’s assets because the Vistana Spin-Off would be taxable to Starwood (but not to Starwood shareholders) pursuant to Section 355(e) of the Internal Revenue Code if there was a direct or indirect 50% or greater change in Vistana’s ownership as part of a plan or series of related transactions including the Vistana Spin-Off.

The Vistana acquisition was not expected to violate this rule because Starwood shareholders held over 50% by vote and value of ILG stock (and, thus, indirectly, of Vistana) immediately after the Vistana acquisition.

However, the ILG Acquisition diluted the indirect ownership of Vistana by its former shareholders below 50%.

For two years after the Vistana Spin-Off, the Tax Matters Agreement prohibited Vistana and ILG from taking certain actions involving their stock or Vistana’s assets because the Vistana Spin-Off would be taxable to Starwood (but not to Starwood stockholders) pursuant to Section 355(e) of the Internal Revenue Code if there was a direct or indirect 50% or greater change in Vistana’s ownership as part of a plan or series of related transactions including the Vistana Spin-Off.

The Vistana acquisition was not expected to violate this rule because Starwood stockholders held over 50% by vote and value of ILG stock (and, thus, indirectly, of Vistana) immediately after the Vistana acquisition.

However, the ILG Acquisition diluted the indirect ownership of Vistana by its former stockholders below 50%.

We received an opinion from KPMG LLP that entering into the ILG Acquisition would not affect the tax-free status of the Vistana Spin-Off;

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If the IRS asserts that the ILG Acquisition is part of a plan or series of related transactions including the Vistana Spin-Off and the Vistana acquisition, and this assertion is sustained, the Vistana Spin-Off would be subject to the application of Section 355(e) of the Code, and we would be liable to indemnify Starwood (or Marriott International) for any resulting tax liability pursuant to the Tax Matters Agreement.

Unresolved Staff Comments

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 1A. Risk Factors