Travel + Leisure NYSE: TNL reported first-quarter 2026 results that topped its internal expectations, driven by strength in its Vacation Ownership business and what management described as resilient owner demand despite an uncertain macroeconomic backdrop.
Michael Brown, president and CEO, said first-quarter EBITDA exceeded guidance “driven by strong execution in our Vacation Ownership business and resilient owner demand.” Brown added that the quarter’s results served as “a clear validation of that strategy and a proof point of the durability of our model, even as the macroeconomic environment remains uncertain.”
First-quarter results exceeded guidance as Vacation Ownership remained strong
Brown said the company generated revenue of $961 million, adjusted EBITDA of $225 million, and adjusted earnings per share of $1.45. He highlighted “gross VOI sales growth of 7%, EBITDA margin expansion of 180 basis points, and EPS growth of 31%.”
Erik Hoag, CFO, said the “compounding in the first quarter is clear,” with revenue up 3%, EBITDA up 11%, net income up 22%, and EPS up 31%, attributing outperformance to tour flow and operating leverage as well as capital allocation.
Within Vacation Ownership, Hoag reported gross VOI sales of $549 million, up 7% year over year, driven by tour flow growth of 5% and volume per guest (VPG) increasing 3% to $3,321. Segment EBITDA rose 20% to $191 million, which he attributed to operating leverage, improved inventory efficiency, and benefits from the company’s resort optimization initiative.
Management emphasized that demand indicators among owners were stable. Brown said first-quarter gross bookings increased year over year, the booking window remained steady at about 100 days, average length of stay was unchanged at just over four days, and distance traveled to resorts was “up slightly” versus last year.
New owner mix dipped as close rates softened, but tour growth improved
Hoag noted that new owner mix was “slightly below prior year levels,” but said the company expected it to improve as 2026 progresses and viewed the shift as related to conversion dynamics rather than underlying demand.
In response to questions, Brown said new owner tour growth was a bright spot. While total tour growth was 5% in the quarter, he said new owner tour growth was 7%. He attributed lower new owner mix to close rates that were lower in the first quarter, adding that “anytime you scale the business and grow new owner tour flow… you’re likely to suffer maybe a little bit of underperformance on close rates.” Brown said the company expects strong new owner tour trends to continue into the peak season and expects execution to improve on conversion.
On VPG trends, Brown said VPG can face “natural pressure” when new owner mix increases, and he expects new owner mix to be higher in the second and third quarters, which typically are higher-season periods. He characterized that as a mix issue rather than execution, noting that higher owner mix in the first quarter typically supports higher VPG.
Multi-brand strategy expands, with new partnerships and new resort launches
Brown said the company is making progress on its multi-brand strategy and expects combined VOI sales from newer brands to “approach 10% of our sales mix this year,” with expectations for that share to rise over time.
Brown cited several brand updates:
- Margaritaville: Brown said it is “rapidly approaching $150 million in annual VOI sales.”
- Accor Vacation Club: Brown said the company expects to nearly double VOI sales in 2026; he later told analysts the license fee structure is “roughly the same” as Wyndham’s.
- Eddie Bauer Adventure Club: Brown said early momentum has exceeded expectations, and the company opened its first Eddie Bauer Resort in Moab, Utah, in March.
- Sports Illustrated Resorts: Brown said sales are underway at a new national sales center and the company announced a new Sports Illustrated Resort location in Baton Rouge, Louisiana, which would be the brand’s fourth resort.
Discussing growth potential, Brown told Deutsche Bank that the company aims to build each of the newer brands to “about $200 million plus” in annual VOI sales, saying that “stack that level of growth” across brands can support visibility into a “6%-8% total VOI run rate for the foreseeable future.”
Brown also described Eddie Bauer as a way to “put a booster to WorldMark,” aligning the Eddie Bauer Adventure Club with the WorldMark owner base. He said the early success has been “mostly” driven by upgrades, but the company intends to “start feathering into the Eddie Bauer mix new owners” over time. He also said the brand’s full potential has not yet been realized due in part to the time it takes to complete registrations across jurisdictions and because the rollout remains limited (nine sales locations and one resort announced as of the call).
On the partnership front, Brown said Travel + Leisure renewed and expanded a five-year agreement with United Parks & Resorts, the owner of SeaWorld and Busch Gardens, building on a strategic partnership that began in 2013. The updated agreement expands the company’s presence across additional parks, which Brown said should support top-of-funnel demand and new owner growth.
Resort optimization initiative delivering savings; Travel and Membership pressured by mix shift
Brown said the company is realizing “all the expense savings outlined” in its resort optimization initiative, which involves removing “a small number of aging, lower-demand resorts” to strengthen the resort system and improve the financial health of its club HOAs. Hoag added that the savings are showing up in the P&L, including reduced developer obligations and carry costs, and said the company has maintained strong gross VOI sales even after closing several sales centers tied to the initiative.
Travel and Membership results were weaker, reflecting an ongoing mix shift. Hoag said first-quarter transactions were flat year over year as declines in exchange activity were offset by growth in travel clubs. Exchange membership was about 3.3 million subscribers, down roughly 2% year over year. Segment revenue fell 8% to $165 million and segment EBITDA declined 13% to $59 million, which Hoag attributed to the mix shift away from higher-margin exchange and toward lower-margin travel clubs.
Asked about the exchange business and potential strategic alternatives, Brown said the company will make decisions based on what is best for shareholders. He described exchanges as in “secular decline,” but said the company is focused on organic efforts to “bend the curve” through new business lines and would evaluate strategic opportunities if they make sense.
Credit trends and capital allocation; company reaffirmed 2026 guidance
Hoag said credit performance was within expectations, with first-quarter provision rates “slightly down year-over-year.” He said the company is seeing some movement in early-stage delinquencies, particularly in more recent loan vintages, which could influence provision over time. Still, he said the company expects the full-year provision rate to be modestly below prior-year levels, pointing to weighted average FICO scores above 740, down payments trending above 20%, and a lower percentage of sales financed.
When asked about delinquencies, Hoag described the issue as early and concentrated in “the last three quarters” of originations, adding that there was not “a single attribute” such as FICO, product type, income band, or other characteristics driving the pattern. He also noted that defaults can allow the company to take inventory back and resell it “at today’s prices with a very low cost of sales.”
On the balance sheet, Hoag said leverage ended the quarter just below 3.2x and liquidity was “strong” with more than $1 billion of available capacity including cash and revolver availability. He noted the company completed its first ABS transaction of the year in March, raising $325 million at a 98% advance rate and a 5.1% coupon, which he said was well below the average interest rate on the company’s portfolio.
Travel + Leisure returned $128 million to shareholders in the quarter through dividends and share repurchases, according to Brown. He said the dividend increased 7% to $0.60 per share and the company repurchased 1.2 million shares during the quarter.
Management reaffirmed full-year 2026 guidance. Hoag said the company continues to expect:
- Gross VOI sales: $2.5 billion to $2.6 billion
- Adjusted EBITDA: $1.03 billion to $1.055 billion
- Volume per guest: $3,175 to $3,275
Hoag said the company expects to convert roughly half of adjusted EBITDA into free cash flow for the year, while noting that free cash flow will be backloaded due to inventory investments, including drawdowns in Chicago and Nashville tied to Sports Illustrated Resorts. He also reiterated expectations for a full-year adjusted tax rate of about 29% and EPS growth “in the teens,” supported by EBITDA growth, lower interest expense, and share repurchases.
For the second quarter, Hoag guided to gross VOI sales of $660 million to $690 million, adjusted EBITDA of $260 million to $270 million, and VPG of $3,200 to $3,250.
Addressing why the company maintained full-year guidance after beating first-quarter expectations, Brown pointed to geopolitical and macro uncertainty, telling Truist’s Patrick Scholes that nothing had changed in the company’s confidence in the business, but that management did not want to be “tone deaf” to broader risks. Brown said summer bookings were up year over year and VPG remained strong early in the second quarter, adding that the company would continue watching for early signals such as changes in booking windows, shifts from air to drive travel, and VPG trends.
Brown also touched on digital and AI initiatives during Q&A, describing AI efforts focused first on reducing friction in the “search and book window,” while suggesting distribution-focused AI opportunities may start with lower-priced travel products rather than high-ticket vacation ownership transactions. He cited adoption of the WorldMark app, saying 20% of bookings are already happening through it, and noted the company launched a Margaritaville app in the first quarter.
In closing remarks, Brown said Travel + Leisure had “a great start to 2026” and remains focused on disciplined execution while scaling its multi-brand strategy to drive long-term profitable growth.
About Travel + Leisure NYSE: TNL
Travel + Leisure Co NYSE: TNL is a leisure travel company headquartered in Orlando, Florida, that specializes in vacation ownership, membership programs and branded travel experiences. The company operates an extensive portfolio of vacation clubs and destination services, offering members access to resorts, hotels, cruises and guided tours in markets around the world. Through its flagship membership brands, Travel + Leisure Co provides curated vacation packages, exchange services and unique travel itineraries that cater to both individual and family travelers.
In addition to its membership offerings, Travel + Leisure Co manages a network of resort properties and hospitality assets across North America, the Caribbean, Europe and Asia-Pacific.
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