Why acquiring Accor Vacation Club made sense for Travel + Leisure

ORLANDO, Florida and GOLD COAST, Australia — Travel + Leisure Co. President and CEO Michael Brown said his company’s $48.4 million acquisition of Accor Vacation Club comes from a desire to bust a myth of the vacation ownership space — that a multi-brand business won’t work.

“The vacation ownership space has been characterized since the great financial crisis as being a mono-brand business,” Brown said. “But our expertise is agnostic to an individual brand. And the benefit to us — and we hope others take note of it — is that we can take great brands and help them turn them into a leisure-hospitality offering they aren’t in. And the barriers to entry are very high.”

Michael Brown

Late on Tuesday, Orlando, Florida-based Travel + Leisure Co. announced the acquisition of the Accor Vacation Club business, including 24 resorts and 30,000 members, for $48.4 million. The deal is expected to close in the first quarter. Accor will receive a percentage of vacation ownership sales revenue as part of the agreement.

The deal creates a new line of business for T+L and is added to the company’s portfolio of brand affiliations, including Wyndham, Margaritaville, and Sports Illustrated.

The company was formerly known as Wyndham Destinations and changed its name to Travel + Leisure in 2021 after acquiring that brand from Meredith.

Brown told Hotel Investment Today that the first year will involve integrating the two businesses and Accor’s 24 resorts and 30,000 members. He said to consider this deal a replica of T+L’s agreement with Wyndham, a unique vertical with separate operations and loyalty programs. He also sees plenty of growth potential in Asia Pacific.

Our expertise is agnostic to an individual brand. And the benefit to us — and we hope others take note of it — is that we can take great brands and help them turn them into a leisure-hospitality offering they aren’t in. And the barriers to entry are very high.

Michael Brown

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“We’ll be looking to partner either next to an existing Accor hotel or as a purpose-built vacation ownership product in the region,” Brown said. “So, we will invest capital, grow the business, grow the core vacation club owner base top line and ultimately profitability for the Travel + Leisure platform. One of the key excitement points for Accor is that this will drive increased loyalty and usage back into their hotel brands in the region.”

Brown said while the focus won’t be on rapid growth initially, he expects the portfolio size to grow.

“We’ll have concentrated growth in the South Pacific initially. We’ll look at the opportunities in Asia and the Middle East,” he said. “For our portfolio size, our expectation would be it’s at 24 now, and we would want to get it above 30 in relatively short order.”

T+L will focus at first on ramping up the sales and marketing efforts at two of Accor's properties in Australia (particularly because the numbers have declined at those two during Covid). Then, it’s a matter of working with Accor Vacation Club to determine which markets would make the most sense for growth.

He said the deal worked for both parties because Accor was looking to move into more of an asset-light approach. At the same time, T+L will focus on being good stewards of the Accor brand in an area where they were already successful in the vacation ownership space.

Travel + Leisure Co. acquired the Accor Vacation Club business for $48.4 million.

“We want to bring our vacation ownership platform to their brand and help them grow the Accor brand broadly, but using the Accor Vacation Club to do so,” Brown said.

We also talked to Brown about the deal’s timing, why growing first in the Asia Pacific makes sense for both parties and synergy possibilities.

Hotel Investment Today (HIT): Can you talk about the timing of the deal?

Michael Brown: We changed our name… with the goal of becoming a multi-brand vacation ownership platform. The timing is the culmination of many discussions with Accor over the past year to reinvigorate the world-class hospitality name of Accor in the vacation ownership space. This is an opportunity to add a second brand to our multi-brand strategy in the last six months.

HIT: What was your presence in the Asia Pacific region before this deal, and will this allow you to get a bigger stake in it?

Our growth opportunity is on the top line, and that’s where this deal will be successful. If we can successfully develop that relationship with Accor’s existing vacation club team and its owners and grow the top line... that’s where the success is.

Michael Brown

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Brown: Pre-COVID, we had vacation ownership sales of around $150 million. In the course of COVID, travel restrictions in the region were constrained; therefore, cross-border travel really pulled back our performance. Since COVID, you’ve seen in 2022 and 2023, cross-border travel has accelerated. 2023 was a great year for that region of the world. That gave us confidence that the product was in demand and that people enjoyed using the product. Accor Vacation Club has not had a sales and marketing operation for many years. The ideal component was to take our expertise and reinvigorate the brand and the growth of that.

HIT: The press release mentions potential growth in Asia Pacific, the Middle East, Africa and Turkey. Is that where the growth will come? Could this expand to other regions?

Brown: There’s a technical answer, and then I’ll give you the practical answer. The technical answer is that’s the geographic area that Accor Vacation Club holds…. I would say the strength of both the Wyndham business and where we think the Accor business will be first is in the South Pacific, Australia and New Zealand. There are great opportunities in Indonesia, Thailand, and greater Asia. There’s just a little bit of planning time that we will want to do with their leadership team and with their owner base to hear where they want to be… It has the potential to be worldwide. But it always start with what you know, and Accor Vacation Club was born and grew and was successful over the last two decades in that region… I laid out why this is good for both groups. They bring that brand, growth potential, and a worldwide presence. We bring a platform with proven execution in the region and worldwide. So, as the relationship grows, the possibilities are global, assuming it works out for both parties. But we are focused on [Asia Pacific] because that’s where they were domiciled, where they were born, and where they’ve grown up. That gives both parties the shortest line to success.

HIT: What kind of synergies do you anticipate with this acquisition?

Brown: Our growth opportunity is on the top line, and that’s where this deal will be successful. If we can successfully develop that relationship with Accor’s existing vacation club team and its owners and grow the top line... that’s where the success is.