Marriott Vacations Worldwide Corporation (NYSE:VAC) provided an impact on Thursday on the anticipated business impact of the Maui wildfires on its operations and financial results.
The company said the four vacation ownership resorts and sales centers in West Maui represent more than 10% of its annual contract sales. In addition, the company’s Aqua-Aston Hospitality property management business manages five properties in West Maui.
Marriott Vacations (VAC) said its priority is to take care of impacted associates and their families as they navigate through this difficult period. Following the wildfire devastation in West Maui, the company enacted its disaster response protocols to reinstate power, internet and cell communication as quickly as possible. However, the inability to communicate at the onset with resort leadership, owners, guests and associates proved challenging as the infrastructure around the town of Lahaina was impaired. The company is providing temporary housing, food, supplies, on-site counseling, and fiscal benefits like disaster pay.
Marriott Vacations (VAC) noted that physical damage to its resorts and sales centers is minimal, but warned that recovery efforts are ongoing in West Maui and it is a challenging environment for visitors. VAC has cancelled all owner and exchange reservations through at least September 10, and all transient rental and preview arrivals through at least the end of September.
On the financial front, VAC expects contract sales in Q3 to be adversely impacted by approximately $25M to $30M. In addition, because of lower contract sales and impacts to other vacation ownership business lines, as well as impacts to its exchange and third-party management segment, the company currently expects the Maui wildfires to negatively impact its Q3 net income by $16M to $19M and adjusted EBITDA by $22M to $27M. VAC intends to pursue relief available through insurance options, but noted it is too early to estimate any recovery. The impact of the Maui wildfires on Q4 operating results will depend on the timing of the re-opening of resorts and the pace that travel returns to the island of Maui.
Shares of Marriott Vacations (VAC) are down about 15% since the wildfires spread to populated areas of West Maui.
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