Hospitality company Travel + Leisure (NYSE: TNL) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 5.1% year on year to $1.04 billion. Its non-GAAP profit of $1.80 per share was 5.2% above analysts’ consensus estimates.

Is now the time to buy TNL? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Travel + Leisure’s third quarter was marked by continued momentum in its Vacation Ownership segment and strong execution across its core operations, resulting in financial results that surpassed Wall Street’s expectations. Management attributed the positive performance to robust leisure travel demand and sustained improvements in tour quality and owner engagement. CEO Michael Brown highlighted that “this marks our 18th consecutive quarter with VPGs over 3,000 since we changed our credit quality standards in 2020,” emphasizing the resilience of the company’s customer base and effectiveness of recent investments in digital innovation and brand portfolio expansion.

Looking forward, the company’s guidance reflects confidence in maintaining growth through strategic brand launches and enhanced owner experiences. Management underscored new partnerships, including the Eddie Bauer Adventure Club and Sports Illustrated Resorts, as key avenues to attract younger and more diverse travelers. CFO Erik Hoag emphasized that continued investment in digital tools and owner engagement will be balanced by disciplined capital allocation, stating, “We remain disciplined in how we invest and allocate capital, ensuring that each decision supports shareholder value creation through sustainable growth and our consistent dividend and share repurchase program.”

Key Insights from Management’s Remarks

Management credited the quarter’s outperformance to Vacation Ownership momentum, brand diversification, and digital enhancements that improved owner engagement and operational efficiency.

• Vacation Ownership engine: The core Vacation Ownership business delivered strong volume per guest (VPG) and healthy tour flow, reflecting sustained interest in leisure travel and effective targeting of higher-credit quality customers. Management noted that “tour flow remained healthy this quarter at 200,000 tours,” and VPG exceeded $3,300, which supports recurring revenue streams.

• Brand portfolio expansion: Travel + Leisure continued to broaden its appeal with new brand launches such as Sports Illustrated Resorts and the Eddie Bauer Adventure Club. CEO Michael Brown explained that these brands are designed to “deepen engagement with younger and more diverse travelers and generate incremental VOI sales from customers seeking fresh and distinctive vacation experiences.”

• Digital and AI investments: The company increased investments in digital booking tools and artificial intelligence to streamline the vacation planning process. The Club Wyndham app reached 215,000 downloads, with 28% of bookings now coming through the app, illustrating adoption of technology by owners and boosting engagement scores.

• Travel and Membership segment dynamics: While the Travel and Membership segment saw modest revenue growth, transaction volume in Travel Clubs accelerated by 30% year-over-year, driven by refined marketing strategies targeting high-loyalty clubs. Management acknowledged a decline in revenue per transaction, but views this as a normal phase in the growth cycle.

• Operational discipline and margin expansion: Adjusted EBITDA margin expanded year-over-year, supported by cost management and leveraging scale. Management reinforced a commitment to maintaining margins in the 22–25% range, even as new owner acquisition initiatives bring some pressure.

Drivers of Future Performance

Travel + Leisure’s outlook is grounded in expanding its owner base, new brand rollouts, and ongoing digital investment, while managing mix shifts and maintaining operational discipline.

• Brand-driven owner growth: Management is focused on leveraging new brands like Sports Illustrated Resorts and Eddie Bauer Adventure Club to attract first-time vacation ownership buyers and broaden the company’s addressable market. The expectation is that these initiatives will increase the proportion of new owners, which are critical for long-term growth, though they may initially carry lower margins.

• Digital engagement and efficiency: Investments in apps and digital booking platforms are expected to drive higher owner engagement and repeat usage. Management believes that enhanced app adoption and AI-driven personalization will lead to increased lifetime value and operational efficiencies, supporting profitability over time.

• Travel and Membership mix shift: The company is actively managing the shift from traditional exchange transactions to higher-growth Travel Club offerings. Although the exchange business faces structural headwinds, the Travel Club’s growth is seen as a partial offset, and management is focused on optimizing profitability in this segment through targeted marketing and operational improvements.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be monitoring (1) the rollout and initial sales performance of new branded resorts such as Sports Illustrated and Eddie Bauer, (2) continued growth in digital engagement metrics through expanded app usage and AI-driven personalization, and (3) the effectiveness of efforts to optimize profitability in the Travel and Membership segment as the business mix evolves. Execution on these fronts will be key indicators of sustainable growth.

Travel + Leisure currently trades at $66.03, up from $60.67 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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