Hospitality company Travel + Leisure (NYSE: TNL) reported Q4 CY2025 results exceeding the market’s revenue expectations, with sales up 5.7% year on year to $1.03 billion. Its non-GAAP profit of $1.83 per share was 0.6% 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).
Travel + Leisure (TNL) Q4 CY2025 Highlights:
- Revenue: $1.03 billion vs analyst estimates of $996.2 million (5.7% year-on-year growth, 3% beat)
- Adjusted EPS: $1.83 vs analyst estimates of $1.82 (0.6% beat)
- Adjusted EBITDA: $272 million vs analyst estimates of $258.3 million (26.5% margin, 5.3% beat)
- EBITDA guidance for the upcoming financial year 2026 is $1.04 billion at the midpoint, above analyst estimates of $1.03 billion
- Operating Margin: -2.1%, down from 21.2% in the same quarter last year
- Tours Conducted: 184,000, up 9,000 year on year
- Market Capitalization: $4.70 billion
StockStory’s Take
Travel + Leisure’s fourth quarter was marked by ongoing strength in its core vacation ownership segment, with management attributing growth to higher tour volume and repeat customer engagement. CEO Michael Brown emphasized that “performance is driven less by short-term travel trends and more by these long-term owner relationships and our intentional approach to operating the business.” The company’s success was further supported by effective sales and marketing execution, as well as progress in expanding its brand portfolio with new resort offerings.
Looking to 2026, Travel + Leisure’s guidance is shaped by continued investments in digital experiences and a deliberate shift toward optimizing its resort portfolio. Management expects the removal of aging, low-demand resorts to result in meaningful EBITDA benefits, while new brand launches are anticipated to expand the addressable market. CFO Erik Hoag highlighted that “the guide reflects a profile where we believe downside is well contained while upside is asymmetric and driven by execution,” pointing to disciplined cost management and scalable new partnerships as key enablers of future growth.
Key Insights from Management’s Remarks
Management credited the quarter’s outcome to robust owner demand in vacation ownership and ongoing execution on brand and digital initiatives, while also addressing the impact of resort portfolio optimization.
-
Vacation ownership momentum: The company’s primary growth came from its vacation ownership segment, where increased tour flow and strong sales execution led to gross sales growth and improving margins. Management highlighted that owner engagement and upgrades continue to drive recurring demand and predictable cash flow.
-
Brand expansion strategy: Initiatives to introduce new brands—including Sports Illustrated Resorts and Eddie Bauer Adventure Club—showed encouraging early results. Management sees these as critical for capturing new travel segments and diversifying beyond legacy brands like Club Wyndham and WorldMark.
-
Digital platform investments: The launch of mobile apps for Club Wyndham and WorldMark, plus the introduction of an AI Concierge service, are part of a broader digital roadmap aimed at enhancing the customer experience and supporting owner retention.
-
Resort portfolio optimization: The company began a strategic effort to remove underperforming, aging resorts from its system, particularly those with low occupancy and high maintenance costs. Management expects this to lower inventory carry costs, improve overall profitability, and align resources with higher-demand destinations.
-
Cost discipline in Travel and Membership: While the Travel and Membership segment faced ongoing exchange headwinds and declining revenue, management responded with targeted cost controls and efforts to align expenses with the current revenue profile, seeking to maximize profitability despite external pressures.
Drivers of Future Performance
Travel + Leisure’s outlook centers on continued growth in vacation ownership, digital engagement, and operational efficiency, balanced by prudent portfolio management.
-
Growing contribution from new brands: Management is focused on increasing sales from its newer brands, aiming for these to reach a double-digit share of total mix in coming years. Early consumer response to Sports Illustrated Resorts and Eddie Bauer Adventure Club has been positive, with a strategy to further scale these offerings and capture incremental owner growth.
-
Resort optimization benefits: The removal of older, low-demand resorts is expected to drive a net EBITDA benefit through reduced expenses and improved capital allocation. This initiative is projected to improve margins in 2026, even as some revenues and management fees decrease.
-
Disciplined capital allocation: The company continues to prioritize investments in technology, digital platforms, and partnerships, while maintaining a commitment to returning capital to shareholders via dividends and share repurchases. Management sees this approach as essential for sustaining free cash flow and supporting organic growth.
Catalysts in Upcoming Quarters
As we look ahead, our analysts will be watching (1) the pace of adoption and sales mix from new brands like Sports Illustrated Resorts and Eddie Bauer Adventure Club, (2) execution on the resort optimization initiative and the resulting impact on margins and owner satisfaction, and (3) progress in digital engagement, particularly the effectiveness of newly launched mobile apps and AI Concierge services. Developments in the Travel and Membership segment’s cost controls and partnership strategies will also be key markers of sustained performance.
Travel + Leisure currently trades at $76.49, up from $72.86 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
Now Could Be The Perfect Time To Invest In These Stocks
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
