Travel demand is spiking as COVID-19 restrictions die down, and it could create big opportunities in the stock market. In this Fool Live video clip, recorded on June 14, Fool.com contributor Toby Bordelon discusses why Marriott Vacations Worldwide (VAC -1.83%) could be a particularly interesting stock to watch this summer and beyond.
Toby Bordelon: This is Marriott Vacations. They are a timeshare operator. Let me share my screen here for you guys. Timeshares. This is different from the hotel, different from the hotel chain, separate companies, just keep that in mind. They say they are a hundred percent focused on leisure and you can see how that was problematic in the past year, obviously. But it's looking like it have a good year ahead. This chart right here, this shows that 80% of their sales come from on-property guests. These are people get roped into timeshare presentations. If no one is vacationing, if no one is coming to your place in the first place, that's a problem. Your sales engine is going to really slow down and that's what we saw over the past year. But it's starting to heat up. We were already seeing a surge at these results. Just anecdotally on message boards, long-term owners are noting that it's a lot harder to get a reservation this year. Part of that was because one thing that happened, a lot of these timeshare operators now transition to a point system. It's not just like a week you have if you have a set of points and what a lot of them did were delay the expiration of those points, and so people have now more than they would have a normal year. You're seeing more bookings in 2021, in 2022. Your occupancy is up and you're seeing a lot more demand for this travel. When you get more people to the resorts, you're going to get those presentations again, that should be boosting sales. The other thing we got here that could be happening in the future, Marriott (MAR -1.43%) has talked about this. Sometime ago, Marriott Hotels bought Starwood Hotels. After that happened, Marriott Vacations acquired the Vacation Club of the Starwood brand because Marriott Hotel did not want that when they were buying Starwood, so that spun off. They have not fully integrated those brands yet. They are looking to do that. I suspect they would have already been integrated, if not for the pandemic. But now, we're hearing them say things like probably by the beginning of next year 2022, you're going to see a stronger integration between those, creating more opportunity for growth, more opportunity for people to use their stuff together and maybe even buy some more ownership products as you see this integration year. We talked about there is hesitation about whether or not business travel's going to come back. We're not quite sure what it's going to look like. That's not going to matter for this. This is not like a hotel company where you cater to business and we do travels. Timeshare leader only for the most part. That's what their focus on, that's coming back in a big way. People are flocking to these places. HVAC summer, or do you want to say, if people are going to go on vacation, they wanted to beaches, they want the Hawaii, they want the Florida resorts, it's happening. I like this company, at least for the short term, and potentially, for the longer-term, maybe as people get used to travel they did in the pandemic, having a little more space. These are two and three bedroom units sometimes, so a little more space, you need a bigger hotel that might gain steam. You might see some more people who haven't quite tried this before, get more interested in it.