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Marriott Vacations' (VAC) Contract Sales Improve in November

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Marriott Vacations Worldwide Corporation (VAC - Free Report) provided business update for fourth-quarter 2020. Following the business update, not much movement was witnessed in the company’s shares. However, the company’s shares have increased 41.6% in the past three months compared with the industry’s rise of 16.6%.

The company stated that quarter-to-sales contract sales were $118 million. Contract sales increased slightly in November compared with October levels. The company is anticipating contract sales in fourth-quarter 2020 between $160 million and $185 million, which indicates 15-30% improvement sequentially. Contract sales in the fourth quarter are likely to be driven by improvement in tour volume.

Hawaii, which was opened on Oct 15, is witnessing impressive occupancy rate. Moreover, exchange transactions at interval international rose 10% quarter-to-date compared with year-ago levels.

 

Occupancy Increasing Gradually

In late May, the company started reopening some of its resorts for renters and guest. When the resorts were reopened, the company witnessed very low occupancy. However, with lockdowns being lifted, occupancy rates surged back to the 70% range, highlighting people’s willingness to go on vacations. During the third quarter, the company witnessed strong occupancy rates at short-haul fly-to locations. Markedly, occupancy rates at Florida Beach resorts, South Carolina resorts and Mountain Resorts grew from mid-60%, 70% and 75% in July to 70%, 75% and 80% in September, respectively. Also, occupancy rates at Newport Coast Resort (in Southern California) averaged 80% throughout the third quarter. With occupancies beginning to improve, the company reopened 36 sales centers in July and added four between August and September. It also reopened seven Hawaii sales centers in mid-October. As of Sep 30, the company had opened more than 95% of its vacation ownership resorts and more than 80% of its sales centers.

Marriott Vacations, which shares space with Choice Hotels (CHH - Free Report) and Hilton Grand Vacations Inc. (HGV - Free Report) , has a Zacks Rank #3 (Hold).

Key Pick

A better-ranked stock worth considering in the same space includes Civeo Corporation (CVEO - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Civeo have surged 45.8% in the past three months.

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