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VACATION OWNERSHIP NOTES RECEIVABLE | 12 Months Ended
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Dec. 31, 2024
Receivables [Abstract] |
VACATION OWNERSHIP NOTES RECEIVABLE | VACATION OWNERSHIP NOTES RECEIVABLE The following table shows the composition of our vacation ownership notes receivable balances, net of reserves.
| December 31, 2024 |  | December 31, 2023
($ in millions) | Originated |  | Acquired |  | Total |  | Originated |  | Acquired |  | Total
Securitized | $ | 1,824 |  |  | $ | 93 |  |  | $ | 1,917 |  |  | $ | 1,764 |  |  | $ | 148 |  |  | $ | 1,912 |
Eligible for securitization(1) | 92 |  |  | 2 |  |  | 94 |  |  | 51 |  |  | 1 |  |  | 52 |
Not eligible for securitization(1) | 417 |  |  | 12 |  |  | 429 |  |  | 363 |  |  | 16 |  |  | 379 |
Non-securitized | 509 |  |  | 14 |  |  | 523 |  |  | 414 |  |  | 17 |  |  | 431 |
Total | $ | 2,333 |  |  | $ | 107 |  |  | $ | 2,440 |  |  | $ | 2,178 |  |  | $ | 165 |  |  | $ | 2,343 |
(1)Refer to Footnote 7 “Financial Instruments” for discussion of eligibility of our vacation ownership notes receivable for securitization. We reflect interest income associated with vacation ownership notes receivable in our Income Statements in the Financing revenues caption. The following table summarizes interest income associated with vacation ownership notes receivable.
($ in millions) | 2024 |  | 2023 |  | 2022
Interest income associated with vacation ownership notes receivable — securitized | $ | 288 |  |  | $ | 276 |  |  | $ | 243 |
Interest income associated with vacation ownership notes receivable — non-securitized | 43 |  |  | 36 |  |  | 41 |
Total interest income associated with vacation ownership notes receivable | $ | 331 |  |  | $ | 312 |  |  | $ | 284 |
Vacation Ownership Notes Receivable Reserve The estimates of the variable consideration for originated vacation ownership notes receivable and the reserve for credit losses on the acquired vacation ownership notes receivable are based on default rates that are an output of our static pool analyses and estimates regarding future defaults. In the third quarter of 2023, we increased our vacation ownership notes receivable reserve to reflect then-current trends in delinquencies and default rates. As a result, we increased our originated vacation ownership notes receivable reserve by $59 million. We estimated the amount of the increase in our sales reserve primarily using information from a historical period of increased defaults. The additional reserve recorded in 2023 was the result of an adjustment to our future default rate estimate to reflect then-current macroeconomic conditions, including inflation outpacing wage growth, continuing high interest rates, mixed economic indicators and increased global insecurity. During the second quarter of 2024, we increased our sales reserve to reflect increases in expected cumulative loss rates for our vacation ownership notes receivable originated during 2021 to 2024. As a result, we increased our originated vacation ownership notes receivable reserve by $70 million. Consistent with our analysis in the third quarter of 2023, we considered the cumulative impact of inflation and the mixed economic environment on delinquencies and default rates. We believed the related impact of higher than historical year-over-year increases in maintenance fees for 2023 and 2024 would continue to drive elevated delinquencies and defaults. As expected, maintenance fee increases for our points-based products for 2025, which were approved by the relevant property owners’ association, returned to levels consistent with historical experience. We have increased our sales reserve rate to reflect higher expected cumulative losses on new originations and do not expect to lower the sales reserve rate until we have sufficient evidence of improvement in delinquency and default rates. Credit Quality Indicators - Vacation Ownership Notes Receivable We use the origination of vacation ownership notes receivable and the FICO scores of the customer by brand as the primary credit quality indicators, as historical performance indicates that there is a relationship between the default behavior of borrowers by FICO score and the brand associated with the VOI they have acquired. The weighted average FICO score within our consolidated vacation ownership notes receivable pool was 725 and 723 at December 31, 2024 and December 31, 2023, respectively, based upon the FICO score of the borrower at the time of origination. Originated Vacation Ownership Notes Receivable Originated vacation ownership notes receivable represent vacation ownership notes receivable originated by Legacy-ILG and Legacy-Welk subsequent to each respective acquisition date, and all Legacy-MVW vacation ownership notes receivable. The following table shows future principal payments, net of reserves, and interest rates for our originated vacation ownership notes receivable at December 31, 2024.
| Originated Vacation Ownership Notes Receivable
($ in millions) | Non-Securitized |  | Securitized |  | Total
2025 | $ | 84 |  |  | $ | 141 |  |  | $ | 225 |
2026 | 60 |  |  | 150 |  |  | 210 |
2027 | 56 |  |  | 158 |  |  | 214 |
2028 | 49 |  |  | 165 |  |  | 214 |
2029 | 39 |  |  | 165 |  |  | 204 |
Thereafter | 221 |  |  | 1,045 |  |  | 1,266 |
Balance at December 31, 2024 | $ | 509 |  |  | $ | 1,824 |  |  | $ | 2,333 |
Weighted average stated interest rate | 11.7% |  | 13.4% |  | 12.9%
Range of stated interest rates | 0.0% to 20.9% |  | 0.0% to 20.9% |  | 0.0% to 20.9%
For originated vacation ownership notes receivable, we record the difference between the vacation ownership note receivable and the variable consideration included in the transaction price for the sale of the related vacation ownership product as a reserve on our vacation ownership notes receivable. The following table summarizes the activity related to our originated vacation ownership notes receivable reserve.
| Originated Vacation Ownership Notes Receivable Reserve
($ in millions) | Non-Securitized |  | Securitized |  | Total
Balance at December 31, 2021 | 193 |  |  | 140 |  |  | 333 |
Increase in vacation ownership notes receivable reserve | 118 |  |  | 47 |  |  | 165 |
Securitizations | (132) |  |  | 132 |  |  | — |
Clean-up call | 37 |  |  | (37) |  |  | — |
Write-offs | (136) |  |  | — |  |  | (136) |
Defaulted vacation ownership notes receivable repurchase activity(1) | 69 |  |  | (69) |  |  | — |
Balance at December 31, 2022 | 149 |  |  | 213 |  |  | 362 |
Increase in vacation ownership notes receivable reserve | 188 |  |  | 40 |  |  | 228 |
Securitizations | (211) |  |  | 211 |  |  | — |
Clean-up call | 99 |  |  | (99) |  |  | — |
Write-offs | (135) |  |  | — |  |  | (135) |
Defaulted vacation ownership notes receivable repurchase activity(1) | 105 |  |  | (105) |  |  | — |
Balance at December 31, 2023 | 195 |  |  | 260 |  |  | 455 |
Increase in vacation ownership notes receivable reserve | 218 |  |  | 53 |  |  | 271 |
Securitizations | (193) |  |  | 193 |  |  | — |
Clean-up call | 80 |  |  | (80) |  |  | — |
Write-offs | (199) |  |  | — |  |  | (199) |
Defaulted vacation ownership notes receivable repurchase activity(1) | 151 |  |  | (151) |  |  | — |
Balance at December 31, 2024 | $ | 252 |  |  | $ | 275 |  |  | $ | 527 |
(1)Reflects the change attributable to the transfer of the reserve from the securitized vacation ownership notes receivable reserve to the non-securitized vacation ownership notes receivable reserve when we voluntarily repurchased securitized vacation ownership notes receivable. The following tables show originated vacation ownership notes receivable, before reserves, by brand and borrower FICO score at origination.
| Originated Vacation Ownership Notes Receivable as of December 31, 2024
($ in millions) | 700 + |  | 600 - 699 |  | < 600 |  | No Score |  | Total
Marriott Vacation Ownership | $ | 1,513 |  |  | $ | 634 |  |  | $ | 58 |  |  | $ | 365 |  |  | $ | 2,570 |
Hyatt Vacation Ownership | 210 |  |  | 75 |  |  | 2 |  |  | 3 |  |  | 290 |
| $ | 1,723 |  |  | $ | 709 |  |  | $ | 60 |  |  | $ | 368 |  |  | $ | 2,860 |
| Originated Vacation Ownership Notes Receivable as of December 31, 2023
($ in millions) | 700 + |  | 600 - 699 |  | < 600 |  | No Score |  | Total
Marriott Vacation Ownership | $ | 1,381 |  |  | $ | 609 |  |  | $ | 57 |  |  | $ | 323 |  |  | $ | 2,370 |
Hyatt Vacation Ownership | 188 |  |  | 70 |  |  | 2 |  |  | 3 |  |  | 263 |
| $ | 1,569 |  |  | $ | 679 |  |  | $ | 59 |  |  | $ | 326 |  |  | $ | 2,633 |
The following tables detail the origination year of our originated vacation ownership notes receivable, before reserves, by brand and borrower FICO score at origination as of December 31, 2024, and gross write-offs by brand for the year ended December 31, 2024.
| Originated Vacation Ownership Notes Receivable - Marriott Vacation Ownership
($ in millions) | 2024 |  | 2023 |  | 2022 |  | 2021 |  | 2020 & Prior |  | Total
700 + | $ | 529 |  |  | $ | 378 |  |  | $ | 256 |  |  | $ | 148 |  |  | $ | 202 |  |  | $ | 1,513 |
600 - 699 | 180 |  |  | 150 |  |  | 120 |  |  | 76 |  |  | 108 |  |  | 634 |
< 600 | 17 |  |  | 14 |  |  | 10 |  |  | 7 |  |  | 10 |  |  | 58 |
No Score | 176 |  |  | 88 |  |  | 41 |  |  | 14 |  |  | 46 |  |  | 365 |
| $ | 902 |  |  | $ | 630 |  |  | $ | 427 |  |  | $ | 245 |  |  | $ | 366 |  |  | $ | 2,570 |
Gross write-offs | $ | 8 |  |  | $ | 44 |  |  | $ | 49 |  |  | $ | 27 |  |  | $ | 38 |  |  | $ | 166 |
| Originated Vacation Ownership Notes Receivable - Hyatt Vacation Ownership
($ in millions) | 2024 |  | 2023 |  | 2022 |  | 2021 |  | 2020 & Prior |  | Total
700 + | $ | 94 |  |  | $ | 53 |  |  | $ | 41 |  |  | $ | 19 |  |  | $ | 3 |  |  | $ | 210 |
600 - 699 | 32 |  |  | 19 |  |  | 15 |  |  | 7 |  |  | 2 |  |  | 75 |
< 600 | 1 |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | 2 |
No Score | 1 |  |  | 1 |  |  | 1 |  |  | — |  |  | — |  |  | 3 |
| $ | 128 |  |  | $ | 74 |  |  | $ | 57 |  |  | $ | 26 |  |  | $ | 5 |  |  | $ | 290 |
Gross write-offs | $ | 2 |  |  | $ | 12 |  |  | $ | 13 |  |  | $ | 6 |  |  | $ | — |  |  | $ | 33 |
Acquired Vacation Ownership Notes Receivable Acquired vacation ownership notes receivable represent vacation ownership notes receivable acquired as part of the ILG Acquisition and the Welk Acquisition. The following table shows future contractual principal payments, net of a $9 million reserve, and interest rates for our acquired vacation ownership notes receivable at December 31, 2024.
| Acquired Vacation Ownership Notes Receivable
($ in millions) | Non-Securitized |  | Securitized |  | Total
2025 | $ | 6 |  |  | $ | 23 |  |  | $ | 29 |
2026 | 3 |  |  | 21 |  |  | 24 |
2027 | 2 |  |  | 17 |  |  | 19 |
2028 | 1 |  |  | 11 |  |  | 12 |
2029 | 1 |  |  | 7 |  |  | 8 |
Thereafter | 1 |  |  | 14 |  |  | 15 |
Balance at December 31, 2024 | $ | 14 |  |  | $ | 93 |  |  | $ | 107 |
Weighted average stated interest rate | 13.8% |  | 14.2% |  | 14.2%
Range of stated interest rates | 0.0% to 21.9% |  | 0.0% to 21.9% |  | 0.0% to 21.9%
The following tables show acquired vacation ownership notes receivable, before reserves, by brand and borrower FICO score at origination.
| Acquired Vacation Ownership Notes Receivable as of December 31, 2024
($ in millions) | 700 + |  | 600 - 699 |  | < 600 |  | No Score |  | Total
Marriott Vacation Ownership | $ | 30 |  |  | $ | 21 |  |  | $ | 3 |  |  | $ | 5 |  |  | $ | 59 |
Hyatt Vacation Ownership | 34 |  |  | 22 |  |  | — |  |  | 1 |  |  | 57 |
| $ | 64 |  |  | $ | 43 |  |  | $ | 3 |  |  | $ | 6 |  |  | $ | 116 |
| Acquired Vacation Ownership Notes Receivable as of December 31, 2023
($ in millions) | 700 + |  | 600 - 699 |  | < 600 |  | No Score |  | Total
Marriott Vacation Ownership | $ | 46 |  |  | $ | 32 |  |  | $ | 4 |  |  | $ | 9 |  |  | $ | 91 |
Hyatt Vacation Ownership | 53 |  |  | 34 |  |  | 1 |  |  | 1 |  |  | 89 |
| $ | 99 |  |  | $ | 66 |  |  | $ | 5 |  |  | $ | 10 |  |  | $ | 180 |
Vacation Ownership Notes Receivable on Non-Accrual Status For both non-securitized and securitized vacation ownership notes receivable, we estimated the average remaining default rate of 13.96% as of December 31, 2024 and 13.00% as of December 31, 2023. A 0.5 percentage point increase in the estimated default rate would have resulted in an increase in the related vacation ownership notes receivable reserve of $14 million as of December 31, 2024 and $13 million as of December 31, 2023. The following table shows our recorded investment in non-accrual vacation ownership notes receivable, which are vacation ownership notes receivable that are 90 days or more past due.
| Vacation Ownership Notes Receivable
($ in millions) | Non-Securitized |  | Securitized |  | Total
Investment in vacation ownership notes receivable on non-accrual status at December 31, 2024 | $ | 171 |  |  | $ | 24 |  |  | $ | 195 |
Investment in vacation ownership notes receivable on non-accrual status at December 31, 2023 | $ | 141 |  |  | $ | 27 |  |  | $ | 168 |
The following table shows the aging of the recorded investment in principal, before reserves, in vacation ownership notes receivable as of December 31, 2024 and December 31, 2023.
| December 31, 2024 |  | December 31, 2023
($ in millions) | Non-Securitized |  | Securitized |  | Total |  | Non-Securitized |  | Securitized |  | Total
31 – 90 days past due | $ | 29 |  |  | $ | 74 |  |  | $ | 103 |  |  | $ | 31 |  |  | $ | 72 |  |  | $ | 103 |
91 – 120 days past due | 11 |  |  | 19 |  |  | 30 |  |  | 7 |  |  | 19 |  |  | 26 |
Greater than 120 days past due | 160 |  |  | 5 |  |  | 165 |  |  | 134 |  |  | 8 |  |  | 142 |
Total past due | 200 |  |  | 98 |  |  | 298 |  |  | 172 |  |  | 99 |  |  | 271 |
Current | 579 |  |  | 2,099 |  |  | 2,678 |  |  | 460 |  |  | 2,082 |  |  | 2,542 |
Total vacation ownership notes receivable | $ | 779 |  |  | $ | 2,197 |  |  | $ | 2,976 |  |  | $ | 632 |  |  | $ | 2,181 |  |  | $ | 2,813 |

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