How Marriott Vacations Worldwide Thinks About Loyalty with President, Mike Flaskey

Alex Husner 0:01

Welcome to Alex and Annie, the real women of Vacation Rentals. With more than 35 years combined industry experience, Alex Euser and Annie Holcomb have teamed up to connect the dots between inspiration and opportunity. Seeking to find the one story, idea, strategy, or decision that led to their guests in AHA Moment. Join them as they highlight the real stories behind the people and brands that have built vacation rentals into the$100 billion industry it is today. And now, it's time to get real and have some fun with your hosts, Alex and Annie. We'll start the show in just a minute, but first, a word from our premier brand sponsor.

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Alex Husner 2:07

Welcome to Alex and Annie, the Real Women of Vacation Reynolds. I'm Alex. And I'm Annie. And we are joined today for a repeat visit that it's been a long time coming. It's been three years, but we've got Mike Fulaski, who is now the Chief Operating Officer for Marriott Vacations Worldwide. Mike, it's so good to have you back.

Why Mike returned to the industry and joined Marriott Vacations Worldwide

SPEAKER_06 2:26

Well, thank you, ladies. It's an honor to be here. I enjoy being on your show. You all do a great job. So thank you.

Annie Holcombe 2:32

Well, thank you. And the honor is completely ours. And we were just talking off camera. It's been three years since we last talked to you. And I thought you were like riding off into the sunset doing all the entertainment and traveling the world there. And then you surprised us and made a change and came back to the industry. So why don't you bring us up to speed?

SPEAKER_06 2:51

I surprised myself. I uh know, yeah. You know, look, as you know, you all may know and your listeners probably don't. I've spent, you know, more years than I'd like to um say on camera in the industry. And, you know, I sold my former company, and I had a few years that I uh couldn't work in the industry, and I did. I had a really cool little entertainment company. We were doing you know televised golf tournaments. Uh, we did uh one for Major League Baseball last November, and we've done other things uh around music and entertainment, and uh then the phone rang. And uh it was my uh it was my dear friend Matt Averill. And uh Matt was uh had been serving on the board here at Marriott Vacations worldwide. And uh he was asked to step in as the interim chief executive officer, and he reached out and said, uh, hey, uh, what are you doing? And I said, Well, uh I'm doing golf tournaments, Matt, and music shows. What are you doing? He goes, Did you not read the paper? And I said, No. And he said, Well, I'm uh I'm now the interim chief executive officer at Marriott Vacations, and I want to have breakfast with you. And I said, Well, it'd be my honor. And uh so Matt and I, we've been great friends for many years. We worked together at Starwood Vacation Ownership and uh briefly at Diamond Resorts, and here we are. We uh we we decided to put the band back together since we're talking about music, and uh I'm honored to be serving as his president and chief operating officer, been uh on the job for about nine weeks now, and uh it's exciting. So that's uh that's the short version.

Alex Husner 4:37

Very cool. And yeah, Annie's right. I remember when you were on the show the last time and you said, you know, you had sold Diamond Resorts for a billion dollars, and now you were onto this new thing. I remember us saying probably off camera, we're like, he's gonna be back. I mean, there's that time period where you you couldn't do anything, but I'm sure people were waiting for the clock to strike midnight on that day so they could come after you again. But um I'm I'm curious. So, with the role now with with Marriott, I mean, obviously one of the largest players within the space, what was what's the initiative? Besides it was your buddy that wanted to bring the band back together, but like, why did they want you now? And like, what is your main focus coming into the company?

SPEAKER_06 5:17

Well, my responsibility is really all things commercial. And so from the brand to the top of the funnel to digital communications, through traditional sales, marketing, traditional marketing and sales, I should say it in that order, um, through the homeowners associations, resort operations, rental, IRM, inventory, rental management, through the contact centers, customer service, and then finally, you know, kind of if you will, from kind of cradle to grave, kind of customer advocacy and um, you know, in dealing with that piece of it. So it's kind of awesome the way that that we have it organized here because frankly, my team, you know, has everything that touches the customer in every way possible. And so there's no excuses. We um we we have a holistic approach here. We have an amazing team, by the way. And uh yeah, we're we're we're getting after it. So, you know, there are a lot of things here that are tremendous. Um, the resorts um are as nice as I've ever had. The brands are as good or better than you know any of the brands I've ever had the opportunity to work with in my career, and then also have been reunited with, you know, some of the Starwood brands, right? Like the Sheraton Vacation Club, the West Vacation Club, which now are owned by Marriott, and uh and we have the licensing agreement to those, which is awesome and familiar. And uh so, you know, there there's a lot of things that are great here, and then there are a lot of things that created opportunity here. And there are a lot of things that created opportunity in what has kind of been my sweet spot, right? We um really been digging in uh in these first nine weeks and and evaluating kind of the customer journey, and we we really are looking at the company now from a true lifetime value perspective. And you know, the whole initiative is to make sure from the onboarding of the sales process throughout the customer journey that we're delivering the experiences along the way that keep engagement and and ultimately keep them, you know, as a um a member for a long time. And, you know, the the brand is so powerful that you know they already stay in the system here twice as long as what I've been accustomed to in some places I've worked in the past. But now with some of the exciting things that we're doing around creating tools and benefits, and um, you know, we're gonna launch an experiential event franchise that I'm excited about. Um, yeah, so so we're we're all fired up over here.

Annie Holcombe 7:58

So what are you doing in your free time? Oh I I was gonna say, yeah, I'm I'm actually dizzy. I'm dizzy at the schedule that you must be keeping. Out of curiosity, um, in the time that you were out, I know that you didn't ignore the industry. You were still paying attention. I'm sure you were still reading all the articles and people were sending you things. Like, what do you think is something I guess the biggest change that you've noticed since you've been back in the industry overall?

How Marriott Vacations Worldwide thinks about loyalty

SPEAKER_06 8:25

That's a great question. Um, well, there's been more consolidation at the top of the, you know, kind of list now. There's really only, you know, five or six, you know, large key players. Several of the smaller companies were acquired. And uh so I would say aggregation has has been one thing. I think that more and more people are moving away from the fixed week um, you know, kind of beated ownership kind of mentality. I think that um the club product, the points product is a product that has certainly resonated across the system, across the industry, and and and certainly here at Marriott. And uh so I'd say those are probably you know two of the you know the key changes. I think the other thing, uh, you know, the industry's getting really proficient and really good on the rental side. Um, the rental side, I know you ladies come out of and are experts at it. And you know, it's it's pretty amazing, really, the amount of revenues that are generated in the industry now, you know, from rental. And a lot of the um developer benefits like cruises and the ability to go do these, you know, these world-class trips like the Great Wall of China and those sorts of things, you know, they're really um all powered by rental, right? Because it's kind of an opaque process to the customer. They take their points and they use their points to go have these amazing vacations, do these amazing events, go on these amazing cruises. But behind the scenes, you know, we have a whole team that goes out and monetizes that traditional resort inventory and turns it into cash. And that's how we're able to do these amazing offers for our members.

The role of Marriott Bonvoy in brand affinity and direct bookings

Alex Husner 10:07

Yeah. And it it's interesting because it's like we're technically short-term rentals and Timeshare Vacation Club, we're we're all in the same bucket, I guess you could say, of like travel and hospitality. But the differences, there's some similarities, but there are definitely a lot of differences in terms of how it's sold, how it's how it's used. I mean, the loyalty is the biggest thing, and that's an area that you know we always talk about on the show that I think short-term rentals has never gotten to that level of developing a standardized loyalty program or something that works across the board to keep it more sticky. Um, and to this date, you're the only person we've had on the show that represents your side of the industry. Um, but I'm just I'm I'm curious, like, you know, how do you guys look at loyalty long term? I mean, Marriott obviously has a lot of, you know, history and everyone knows the brand, but I mean, how do you look at loyalty these days when there's still so many options for what people can book?

SPEAKER_06 11:02

Yeah, well, I mean, if you look at, you know, I I'll cut it two ways, right? I'll I'll talk about, you know, kind of loyalty on the rental side, then I'll talk about loyalty on the kind of owner side, right? Um from the rental side of the business, you know, the Marriott Bonvoy program, um, you know, I believe is by far the largest um, you know, loyalty program in the world as it relates to health space. And there's a serious affinity um to that brand. And within our organization, our our owners, most of them were sourced from that Marriott Bonvoy database, you know, initially. And certainly, you know, in the in the larger world and the non-timeshare owners, there's a significant number of people out there that tap in and want larger accommodations. They they want the two-bedroom unit, they want the kitchen. And that's something that's been a little bit of a hidden thing, I think. You know, I mean, most of the people when they think about, you know, rentals and resort, and they think about that kind of um, you know, product, they immediately think about hotels. Now, I actually know you ladies, in particular in Myrtle Beach, because of the home ownership rental model, have been marketing that, you know, for years. But the timeshare industry was behind the curve on that. And now I think the public is starting to discover, you know, that there is a great value. Um, you know, the ADR for what we charge for our units and what they get compared to a hotel room, the value proposition is huge. So the loyalty program, as it relates to us under a specific question, we're lucky because a significant portion, the majority of our rentals come through our direct channels, you know, from MI, from the parent company, which is huge, right? We still have a portion of them and a fairly significant portion of it, frankly, if you look at it in an aggregated dollar amount, you know, that go through OTAs, go through groups, you know, through, you know, kind of the channels that I always in my past life, you know, not Starwood, but you know, at Diamond, you know, that's that's how we did it, right? So here we get the benefit of the brand, we get the benefit of the Marriott Bonvoy loyalty program, and we have a significant presence presence on their direct channel. So that's how I see this the loyalty and the stickiness on that side. On the timeshare owner side, it's totally different. And we've worked really, really hard in the nine weeks that I've been here. One of the things that we're working on is recreating, refreshing, transforming. I think that's what the smart people say. The owner benefit levels, right? Uh the loyalty program for our for our owners. And we're really on the cusp. I uh, you know, our goal is May 1st to, you know, hopefully be able to get some of these new programs in the hands of our of our sales team. But the practice is reward them like the airlines do. And, you know, the more they own with us, the more we want to reward them. And and the greater the benefits are, and you know, the greater we, you know, kind of give back, if you will, you know, as a as a thank you for them remaining loyal to us. So that's really a whole different loyalty program than we have kind of within the vacation ownership sector. So that's how I would kind of say um, you know, loyalty plays into what we're doing here at Mary.

Annie Holcombe 14:24

Yeah, and I um I had a brief stint um with the homes and villas team, um, worked with them for a while. And I thought it was interesting because, you know, that's just one other facet of being able to kind of harness that Bonvoy membership is through a distribution. And and that, you know, they did really, really well and they're doing great with it. And I think that the the vacation rental sector is starting to see how important those loyalty guests are. And and again, they're they're they're booking across the entire ecosystem of Marriott. So it's a it's a really great, a great tool to have. Do you think that I guess moving forward, there's opportunity for collaboration between the other brands within Marriott? So you've got the timeshare, you've got the hotels, you've got the apartments, you've got kind of every everything. Do you think there's any cross-collaboration between the two? Or I the two, the the three or four that you could have?

SPEAKER_06 15:15

Well, I do. I mean, I think that you know, the the great news is that we have a you know a tremendous relationship with Marriott International. And um I'm not sure if we're their largest, but we have to be, you know, at the top of the list as a licensee, one of their largest, you know, customers. So in fact, uh, I'm going up to meet with the team at Marriott here in just a couple weeks and looking forward to going up there and you know meeting with Tony and you know, meeting with his team and you know, really looking at how we can do more partnering and more collaborative type things that you talk about. Um, they're excited to host us. You know, we have a whole new leadership team here with at the with Matt as the CEO and myself as the president COO. And so it's I'm really excited about this meeting coming up. So, yes, I do is the answer. I think there's going to be a lot of opportunities in really a lot of different ways.

Alex Husner 16:09

Yeah. And you you touched a little bit on the distribution side. I want to maybe go a little bit further on that. I just think it's it's fascinating and it and it's um it's interesting to see how that has evolved as far as your side of the industry. But and that's actually where we first met at the conference in Vegas, and the the conversation was about how you know the differences between STR and Timeshare and you know, how do we work together there? And I remember the the conversations that I had with a lot of those Timeshare Vacation Club operators were we need to figure out how we can get our inventory on these platforms that, you know, Airbnb in particular, but Verbo in the last couple of years has really come along strong, that that's where a lot of people are going to book inventory. And at the end of the day, the general consumer, I mean, they're not looking at it for all the you know structured ways that we're categorizing things. They just want a nice place to stay that fits the amount of people that they have, that it's on the beach, is well taken care of. I mean, like they don't care what it is. But how do you how do you look at distribution as far as you know being on those channels? And is that something that you've you've focused on?

SPEAKER_06 17:14

I think that we have an opportunity to be better at it. I think our team is grinding away every day, really trying to crack the code and figure out, you know, how to be better at that. I mean, as I said earlier, the a significant portion of our, you know, of our rental business goes through the direct channel, you know, with Marriott, but we have a significant opportunity there. And you're right. Uh, I mean, all the customer cares about, you know, is a great place to stay, right? And and so, you know, look, I mean, it's we're looking at all of that, um, you know, whether it's, you know, the folks you talk about, whether it's the OTAs. And and by the way, you know, kind of the reverse of that, you know, is one of the things that, you know, we're getting ready to roll out in our new timeshare owner loyalty program. You know, we we're gonna private label a uh a really cool, and I don't know what our team's gonna brand it yet. So I'm I'm giving you a little glimpse into the future here. But coming very soon, you know, we're gonna be able, our our owners are gonna be able to take their points and they're gonna be able to go to destination locations and stay in an amazing, you know, four-bedroom, you know, five-bath ski-in-sky out and veil on the cliff on the side of the mountain in Hawaii, you know, over in Spain, and be able to bring the kids and the grandkids and do that big, you know, kind of blow-in-out trip that you would do like that, you know, every uh, you know, maybe three or four years, not every year, you know. And so that's you know, that's another thing that we're gonna be doing, which would be kind of the reverse of what your question was. So there's a lot in that space.

How brand standards help build guest trust

Annie Holcombe 18:53

Yeah. One of the things that we talk a lot about on the vacation rental side um is standards and kind of the lack of standards that exist in vacation rentals. But timeshare has standards because people are buying access to a uh, you know, a unit. You guys have already set what you want those units to look like and take care of them for the owners. What do you think the vacation rental side of the business can learn from the way timeshares maybe operate and service the customer, the guests staying in the properties that they might can replicate, maybe not to the same degree. But do you think there's anything that could be lessons that we can take over to the vacation rental side from you guys?

SPEAKER_06 19:30

Well, it's an awesome question. And, you know, it's it's something that, you know, more on the rental, excuse me, more on the timeshare sales side, we find ourselves dealing with that uh as an objection at the point of sale, right? Because sometimes people ask our teams, you know, well, what would we want to buy this product for when we could maybe go, you know, on Airbnb? And the answer to the question is, or I should say, you know, the way that the objection is very quickly um able to be overcome, is that safety number one, okay, brand standards number two, you know what you you know what you're gonna get if you have a Weston Vacation Club property, you know what you're gonna get if you have a Marriott Vacation Club property, campus style amenities, right? The ability to know that you have the built-in amenities that are there, frankly, you know, from a security standpoint, knowing that the keys are being changed out properly, um, at the as it relates to the linens, you know, you know that there's an industry standard and that your linens are being washed at certain temperatures, and you know that you're so I mean these are all things that I'm not trying to be negative because the really Yeah, yeah, that's fair. The answer to your question, right? Is is how does that, you know, that general independent rental world, how do they come along? And I think those are the key areas.

Alex Husner 20:56

Yeah, and no, that makes perfect sense because I think if you're somebody who's come to Myrtle Beach and you've you've had a bad experience, you went rented a short-term rental through a local vacation company, and then you happen to go to Broadway at the beach and you get approached by Marriott or Hilton and you take the tour, and I can only imagine. I mean, that makes sense completely as not even just um you know what they need to say when people kind of question it, but like it's a it's a selling proposition, really, of like you're gonna get that consistent service and and quality of product. And if for some reason you don't, you guys have the ability to fix it or move them in in typically a more flexible way than a vacation rental company could if they only have a couple units and one building and there's nothing comparable. Um, so that that that all makes sense. And I for another just from the curiosity side of things. So the timeshare vacation club sales, you guys do a great job of training your people to sell. And there's a lot of the you know, backwards writing on the on the paper and stuff like that. But any insights that you've had, because I think this is relevant to our audience, have When they're training their, you know, their reservationists and their business development people. Like, how do you look at sales training in in general?

SPEAKER_06 22:06

Well, it's it, you know, when you think about it, right? We have um over a thousand commissioned sales associates here at Marriott. Wow. And you have to have not only a standardized process to train them and on board them, but you have to bring them back in every so often and make sure everybody is being updated so they stay within the guardrails and you know they they get updated as things change and that sort of thing. And so we're faced with having to scale that, right? And and so it goes back and forth for a long time. Our company has done it in a centralized fashion. And what I mean by that is we have a state-of-the-art, when I tell you it's the most amazing thing you've ever seen, it is literally, I can't overstate it, where we bring every one of our uh new associates that are going to become sales team members for us, and we put them through a process here in the Orlando area, and we got this state-of-the-art deal. We've got the most amazing cutting-edge avatar bots that are able to sit down with them and they're able to kind of go through just like they're talking to a human being, but they're actually a bot, and the bot is trained to be able to interact with them. And you can't break the bot.

Alex Husner 23:19

I mean, you literally can't break it up, it's got all the objections, I'm sure.

SPEAKER_06 23:24

Yeah, yeah, but real time. I mean, it hears what you're saying, it processes it, and then it comes back, right? So it's given us the, you know, through AI and technology, it's given us the ability to train our salespeople without having to spend, you know, seven, eight, nine hundred dollars on a live couple, you know, for them to go out and learn, right? So technology has has really been a big part of it. Now, where I was headed with the with the answer to your question is we're actually moving more now back to a regionalized model. So Hawaii will, you know, have their training, Southern California will have their training, you know, Orlando will have their training, um, you know, uh Myrtle Beach and Hilton Head will probably combine and have their training, the Northeast. And so it's it's a lot easier given the numbers of people with the growth plans that we have that we're having to staff up for seasonality purposes, and you know, you you get the big swings for the summer season. It's been real difficult um, you know, to really do it at the numbers we need to do it at as successful as we'd like by doing it centralized. So we're gonna kind of decentralize it back out, and that's that's kind of part of our strategy that we're gonna be implementing in the back half of 2026.

Annie Holcombe 24:42

That's that's interesting. And I I would imagine it's kind of like um we talk about just vacation rental management and and just when you adopt technologies or any of these things, there's there's some regionalized factors that you have to have in play. I mean, Hawaii is a very specific market. The type of customer that's both vacationing there and looking to buy there is different than the customer that's coming to the panhandle of Florida. You know, they may have the same bank account, but they're they have different, different tastes, right?

SPEAKER_06 25:09

No question. And and and when you try to centralize it, and you know, you bring you're trying to bring every new salesperson from Hawaii to Orlando, you know, to go through the training. Um, the other thing you lose is you can only do a training module like every six weeks. And so what happens is that, you know, you're kind of confined to that six-week window. And and, you know, it's a challenge because you don't get enough bites at the apple from the recruiting tree. And quite frankly, there are people that we would love to have that would love to work for us that probably can't be out of work for six weeks either, right? They they they need to be able to get their training done in a more efficient manner, a little quicker, and they need to be out making money.

Alex Husner 25:53

We'll be back in just a minute. But first, a word from our premier brand sponsor.

Sponsor Spotlight: Hospitable

SPEAKER_00 25:56

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Viewing vacation ownership as a subscription business

Alex Husner 28:20

Thinking about the guest journey or the customer journey, I guess is probably the better way to say it. So you've got when people come into the funnel that they have either signed up to do like a mini vacation or they've taken you up on an offer or they've seen you at a local attraction and they've decided to do the tour. And then they and if I'm wrong on this, please correct me. But that they kind of start one of those areas, they get in and they decide, okay, yes, I'm gonna buy in, I'm gonna do this. Now they're an owner, but then the next phase of that is keeping that owner, not just keeping it, but like upgrading them, right? So it's kind of like it do you look at it that way of like three different sections of the journey, or like how does that work in your mind?

Using experiences to strengthen loyalty and engagement

SPEAKER_06 29:00

You're very wise. It's a it's a it's it's a it's a great uh question and you teed it up beautifully. So let me tell you how I look at it. Okay, I look at it a little differently. I look at our business as a subscription business. I look at our business as the vacation ownership is the product, okay? But when you think about subscription businesses, um, you know, whether it is um herbs, herbal life, whether it is a magazine, um, whether it's a uh fractional ownership of an airplane or a boat, um, you know, there are subscriptions. That's what they are, and there are different levels of them on the continuum. And so our job is to bring someone into the top of the funnel, create a value proposition, and deliver an experience and a guest service level that keeps them in the subscription as long as we can possibly keep them in the subscription as a dues paying member, and then have a process to where, from a business standpoint, we hope to gain wallet share throughout that customer journey because we're doing the things we want to do and we're delivering what we said we were gonna do along the continuum as it relates to the value proposition. Now, you know, from the guest standpoint, they're gonna vote with their wallet, right? And we don't we don't publicize this number, but we know exactly how many years on average, and it's a long time. And as I said earlier, it's double what I was used to in my past life. How long a member or an owner stays in our system? And if we do our job correctly, they will continue to stay in the system longer and longer. And one of the things that we're doing, and you all know this. I mean, you know, I was lucky, and sometimes it's better you know to be lucky than good. And frankly, I had great people around me, and you know, had an independent brand once upon a time. We were competing with the Marriottes, and we were competing with the uh the the Hiltons, and we were competing with the Disneys, and we were competing with the Hyattes, and we were just this independent. And so we challenged ourselves to be innovative, we challenged ourselves to be different, we challenged ourselves to come up with things that separated us from the brands. And the one place we got lucky was in 2013. We created these experiences and we came, we came out of the gate with them as a differentiator, and it became a home run for us. And you know, uh I am excited to be able to bring kind of 3.0, right? We did 1.0 to 2.0. Well, now we're gonna bring 3.0 to Marriott, and it's really gonna be cool. It's um it's gonna be kind of four main kind of buckets, pillars, if you will, right? You're gonna you're gonna have food, culinary, right? So we'll have like regional and celebrity chefs that come to our resorts and do these amazing productions and feed our guests, and our guests get to learn from them, you know, how they're how they're doing it. We're gonna have kind of a TV and entertainment um kind of section, you know, just to kind of give you an idea, like people that I've worked with in the past. Uh Alfonso Riberio is a great friend of mine, dancing with the stars, you know. Who knows? Maybe Alfonso comes in and brings some winners from dancing with the stars. Maybe they do a show one day or we've done a lot with Chris Harrison and The Bachelor and The Bachelorette. So Chris comes in as the host with all the roses, and you know, he brings a couple of winners from The Bachelor, and we do these kind of these amazing events on site, right? Then the third bucket that we have is music, live music. You know, some of the artists that I've you know I've worked with in the past. I mean, the Jim Blossom, Sister Hazel, Lee Bryce, Cole Swindell, Randy Hauser, you know, on and on. And so we're gonna bring live music and entertainment, you know, to our guests while they're staying, you know, on property. And uh, and so, you know, when you look at these these pillars, you know, as I said, there's there's culinary, there's television and entertainment, there's live music, and then the fourth pillar, the round it out, is gonna be sports entertainment. So think about you know, the think about the uh the 2004 Boston Red Sox. Uh, we get several members from that team, and they come to our awesome, you know, resort in the heart of Boston. And while our members are on vacation, they get to meet them, they get to have an evening with the Red Sox, right? Uh, we do something with the uh the 91 um Washington Commanders slash Redskins, you know, and we have you know uh Super Bowl MVP Mark Rippin' and he brings teammates. And now at our you know, our property in DC, we've got you know all of this tied around, you know, what's important in that community. So in their sports teams. And so that's kind of where we're headed in the whole design here, you know, because none of this when the when the owner bought was not a part of why they bought. So this is right, yeah.

Alex Husner 34:20

So this looks like massive value addressing delight.

SPEAKER_06 34:25

This is like ice on the cake, right? And so these are the kinds of things that extend that subscription, that extend that lifetime value. So that's kind of how we're looking at it.

Alex Husner 34:37

Yeah, no, and just to follow up on that, because I think I remember when you were telling us about these experiences when you were on the show three years ago, and you know, we said, oh my gosh, like there's no way a vacation rental company could afford to do something like this because it is heavy, it's it's a heavy expense. But at the same time, I think the difference is the way that you know, you you have people kind of locked in a little bit more than we do, as far as our owners are our or our guests. But your perspective on the lifetime value is is much more honed in, and like you're really seeing those metrics differently than I think our industry does. That it's like, you know, we hear from companies, if they're doing business development, that they send out one postcard and it didn't work. And so now they're just not gonna do it. But it's like, you know, it's it's things like that that are nominal compared to what you're talking about. But it's like you have to stick with things, and you also have to understand that, you know, the the cost to acquire a customer, whether it's a guest or a homeowner, is gonna be different, right? And but like, but the lifetime value of that owner is significant revenue to the company. So I'd I'd love to see events like what you're talking about, and or you know, even if it's on a smaller scale, some way to do something like that that would help companies with you know homeowner acquisition.

SPEAKER_06 35:46

So let me tell you in that vein, um, I'll share something with you that, you know, obviously before I came back and and took the role that I have now with Marriott through my you know entertainment company that my wife runs, we actually had a couple of significant uh resort management companies on the outer banks of North Carolina reach out to us. And and and it was actually fascinating once I got under the and and I really started to understand it in that market. So they don't, I don't know like the Myrtle Beach market, but in that market, there's a lot of single family homes. And when I say single family homes, to be honest, they're they're like many hotels, but they're massive, yeah, 25 bedrooms, everything else. Yeah, yeah, but there's really about only three or four. That business is aggregated, so there's really only about three or four of those companies that control the majority of that inventory down there. And there's really two customers. And I think you said it um, you know, in your opening on this topic, you know, it's the homeowner, they're a customer, they're a key customer, right? And then there's the use, the renter, right? The the person that that's in both of them, you you want to figure out in particular the renter, how you keep them sticky, coming back to your place every year, renting your place. And then you don't want to have to go, you want to keep the homeowner, you know, having their asset, you know, in your rental management property association or whatever you would call it. And so they were actually exploring doing a year-end event and a kick off the season event for all their homeowners. And they wanted me to basically put the entertainment together for them and curate the experience for them to basically, you know, keep their homeowners in their system and not going to their competitor. And it was it was a little harder for them to try to figure out how to do it with the renter because the renters are in and out of there on a weekly basis. But with the homeowners, they had a pretty good idea there. We never did it, but yeah, yeah.

Alex Husner 37:52

It Alex is something we can do. Alex, we can do that. Yeah, we we actually we just we just had um, you know, when you mentioned like there's kind of like four big players, we had one of them in the Otter Banks on our show a couple of weeks ago from Resort Realty that they've been around for 40 plus years up there, you know. And it's like, I think um, I just I think companies in our industry need to think a little bit more outside of the box. And I've seen that a little bit. I've worked with a company in Hilton Head um for the last couple of years. And last year during the Heritage uh golf tournament, they really blew it out and like did a big thing at like rented a couple different houses and you know, it was it was a big expense. I mean, they didn't have entertainment, but like it was a big expense, particularly for a vacation rental company. But at the end of the day, they got tons of owners from that that were there at the tournament and they just got to have that, you know, one-on-one time. And I think that's really what it's about. It's like creating the experience, but also creating the ability to build those relationships with people in a in a way that it's not just a postcard or not just, you know, a cold call to them. And I'm sure that's what you guys have seen.

How Marriott Vacations Worldwide is using AI in sales training

SPEAKER_06 38:56

Well, it's funny, you know, it's funny you say that. Yeah, I mean, all of that, yes. And and um, I went pretty far down this road in the way that we were going to address the end user or the renter, and I actually thought there was so much value in it, I was gonna do it myself and and take the take the business risk was each week during the summer season of you know, July and August, right? The peak summer season, you know, whatever that eight or nine weeks where you know they're at maximum, you know, capacity. And the particular company I was talking with, you know, had I four or five, six hundred houses, you know, down there, right? Aggregated up. You know who they are. I just don't want to mention the name. And uh, and and so I actually went down there and was looking at um one of the golf courses, taking the driving range and turning the driving range into like a music festival one night a week. And what we were gonna do one night a week was we were gonna provide live entertainment for them. And I was gonna partner with the property associate, property management companies, and they were gonna promote it, you know, within their, you know, individual units, and they were gonna give a credit, you know, to book with them towards going to the so I mean I've been down this road a little bit. Yeah, yeah.

Alex Husner 40:14

I love it.

Annie Holcombe 40:15

That's that's good. That's there's so many, so many things that I think we could learn from what you've done both in your past and what you're doing in your present and probably in your future. And I wanted to, we kind of we kind of touched on it in a couple of different uh answers that you gave. Um, you talked about the AI and kind of, you know, for training people, but that's obviously a huge topic for I think anybody in any industry, but specifically um in hospitality. How are you guys, um, if you can like can tell us, how are you guys activating AI within the organization?

SPEAKER_06 40:46

Well, the greatest example that we have um that we have already brought to market, I just told you, right, through these hours and these bottoms, you know, in our training. But we're looking across every department within the organization to identify, you know, where we can find efficiencies and and and where, in fact, we have a partner, you know, that um IBM, you know, that that has come in and and really helped us, you know, try to get specific department by department. Um, one place I can tell you that we don't have to worry about AI taking jobs is timeshare salesmen. I think at the end of the earth, that'll be the last job that's still available because it's literally face-to-face, direct, you know.

Alex Husner 41:30

But does it have to be though?

How AI is changing digital search and hospitality marketing

SPEAKER_06 41:32

Because I mean well, if the avatars get real good, maybe they can do it virtually, right? Yeah, yeah. But but no, I don't know. I mean, it's uh it's interesting, Annie. And we and and look, we we are excited about what we can identify in our organization and and how we can use AI. I mean, look, everybody, you know, the co-pilot and the in the chat GPT and and those things, uh, you know, it's just fascinating, you know, what they can spit out in, you know, literally five seconds. And, you know, one of the things that um you all probably know very, very well in your world, not so much in the world of timeshare, because it's not traditional digital marketing like most of your rental customers, you know, are utilizing to try to book their units. But that our traditional digital market is being disrupted significantly by AI. And the whole world of you know, SEO and keyword search, and you know, if you get a bad review, having desktop monitoring, continuing to write white papers and push it down to the eighth page so nobody sees it when they Google you, that world's gone because 60% of the people right now are going straight to some sort of a uh like an AI application like a chat GPT. And so what people are having to figure out right now is they're having to figure out how to allocate their marketing dollars to get the robot that they need to get out of their marketing dollars. But more importantly, what they're finding out is is they're finding out how AI is the disruptor to that digital marketing space. And in order for your product to get picked up on these LLMs, what are you gonna have to do to feed the LLM, right? And so this is what people are in the that are dependent on traditional digital marketing, this is the world they're going through. This is the evolution that they're going through right now. And it's freaking scary for them because they don't know.

Alex Husner 43:36

Yeah, no, for sure. I mean, I I know with several companies that I talked to, I mean, that's that's the that's the question that everybody's trying to solve now. Of like, you know, a year ago we saw, you know, in the hundreds searches coming in on our analytics of people searching for vacation rental on a certain destination. And now it's you know it's it's coming in more, and some of them are kind of showing up, but um, nobody really knows the exact way to to offer. Optimize that. And I've I see things from two lenses of the B2C side with vacation rental companies, but then also on the B2B side with Boom, that is an AI property management system that I work with. And you know, we're we're all battling the same thing that we want to be, everybody wants to be there in the search when somebody's looking for it, no matter, no matter what it is. But I think what's going to happen is, I mean, brands are going to be more and more important, but to what ability a brand can really make an impact is going to be difficult and really hard for smaller brands. I mean, you're sitting on a good side of the table right now that Marriott is very established and people know to go to Marriott, especially if they're already a member. But I think that people are really going to, unless there's a stickiness with the brand that they're, whether it's pizza company, a vacational company, a timeshare, whatever it is, they're going to go to the LLMs because they know they can continuously refine if they ask a question. Well, what about this? What about this? And you can't do that on any of our websites or on Google. So it's like you're spot on that. I mean, the digital marketing landscape has changed significantly. And I don't know where it goes, to be honest. I mean, I think it's kind of scary for everybody, but unknown at the point.

SPEAKER_06 45:11

As usual, Alex, you're the tip of the spear. You get it and you understand it. And you know, one of the things that I did, I did a, I actually um hired a company to come in that was supposed to be like the cutting edge expert last year to to really analyze and and explain to me like, is this like something we could be controlling and doing better? What percentage is really disruption from AI versus us not being very good, for example, right? And um and it was fascinating what came back, the the the percentage that's disruption from AI, you know, and and and it's scary because now you're you know, your people that are in traditional media buying and and and you know, digital spin, they don't know how to allocate it. The whole row thing has been turned on its head. And there's a and there's a whole new norm. But more importantly, like you said, trying to figure out how to feed the LLMs. Now, luckily, what what what we do here at Marriott and what I've done successfully in my past life through experiences happens to be one of the things that the LLMs really like. It's a kind of a leader, it's uh it's something they pick up when they go out and you know and kind of work their magic.

Why prepaid vacations create resilience

Annie Holcombe 46:21

So yeah, well, I think that also that that the the good thing there is like that's where the consumer has gone. They're not so much looking for, they have a accommodation and they might have a market, but they're looking for experience. And so like that's where you can really capitalize. So they're gonna be saying, like, where can I go to get the best experience to go to, you know, now that you're gonna have these four pillars and looking for a tournament or a, you know, a chef experience or that, you know, those those are the kind of things. And we've seen that with customers. I think Alex and I are both have been coaching and working with is that you know, they need to become the expert in their market and they really need to talk about everything in the market, not just like what they do and what they might know. They want to, they want to be the expert in all things related to their market. And and so it is, it is going to be interesting to see where we go. Um, and I don't think anybody knows at this point. I feel like we joke about it every week. There's like, you know, in your inbox is always full with a new AI tool or expert or, you know, some company that's opened up in the last 48 hours that that can get you at the top of whatever, you know, pillar or the mountain that you want to climb, depending on the topic. So it'll be interesting. It'll definitely be interesting. I was curious, um, just kind of like moving forward um and looking at tourism as a whole. I mean, globally, I think there's some challenges just with things that are happening in different areas of the world. Um, what what do you see as the biggest opportunity for tourism globally and maybe um if you just look within the US moving forward, going into like 26 and 27?

SPEAKER_06 47:52

Well, the great news is is that you know, we're seeing a consistent flow of vacationers. We're seeing our occupancy rates, you know, where they've always been. Um, and we have a combination of drive-to properties, you know, and airlift, you know, destinations. And um we've been very fortunate that, you know, as oil prices have gone up, you know, with the you know, current war and things that are going on over in Iraq, then we've not really been impacted, which is um, which is which has been great. Now, you know, depending on how long that continues, who knows? But what we've learned through the years in timeshare is that it's a prepaid vacation. And families have already paid for it and they're gonna use it, right? I mean, we've seen it, um, it's about as um, I I won't look, I won't go as far as saying that we're recession proof, but I will absolutely tell you that we're highly recession resilient. And it's been proven over and over again. Um, you know, whether it was after 9-11, you know, whether it was after the financial crisis, whether it was after COVID. I mean, we shut these resorts down, you know, uh in March, early, mid-March when COVID came. And we were back at 75% year-over-year occupancy by June and July when we reopened in like May. And that's just um, you know, a testament to our product and people prepaying their vacations. And what we've learned through the years is is whether times are good or whether times are bad, people still want and need their vacation. Um, I don't think that that holds as true in the rental space because again, my my friends uh the outer banks, uh, they have they have definitely felt some occupancy declines, you know, when these little you know fits and starts happen, you know, whether it's the war or whether it's the election or you're not knowing what's going to happen in the current local economy and that sort of thing. They feel it a lot more than where the vacations are prepaid, is what my point is.

Alex Husner 49:59

Mm-hmm. Yeah. No, it it makes sense because it's like, and uh, you know, being in the Myrtle Beach market, I've had several friends that have worked for the companies here. And I remember early on with um one of my best friends, Bianca, asking her, 'like, how do you sell this? Like, it just seems like so, so you know, different for to me. And she explained that she's like, people want to know and they want to have that commitment, but they want to know that that price is locked in and they can always have a vacation. And it's like it's vacation security in a way. And, you know, prices are not going down in anything that we buy. So it's like, you know, the cost of going to Mexico on a trip a few years ago might have been$5,000. Now it's it's$8,000. And, you know, my husband and I have made the bad mistake of not buying the timeshare, and we get reminded of that every time we do the tour and we get the free massages. But um, but it it is, it's it's it's fascinating. Um it can help you. Well, one thing I will say. So as we were as Zanny was asking her last question, I did go to ChatGPT and I said, This has ChatGPT has no idea that we were doing an interview with you today. And I said, What is the best timeshare vacation club company? And it says there isn't a single best, but there are a few clear leaders, and the right one depends on how you travel. The top tier is dominated by three brands Marriott Vacation Club, Hilton Grand Vacations, and Club Wyndham. So you won for best overall premium experience. So that's that's that's exciting.

SPEAKER_06 51:25

I'm happy to hear that. I'm uh very, very, very proud, you know, of our brands and and our 22,000 uh associates that that bring our resorts to life every day around the world. So it is it is pretty cool. So thank you for with your audience.

Annie Holcombe 51:43

Yeah, that's exciting. So do you have any teasers that you can give us besides these new four pillars that are going to come into play? Anything, anything that we can look forward to to have you back on the show to really talk about and dig in when it goes live?

SPEAKER_06 51:54

Well, we've got a lot of great things going on. Um, I think that you know, the most exciting is you know, kind of looking at we're we're analyzing our owner loyalty tiers and we're getting ready to really transform those and roll out really something new that I think our owners are gonna love, uh, you know, with a lot of great new benefits. And so I'm excited about that. Uh also, you know, uh, as I said previously, you know, we're getting ready to really launch and scale the event platform. Um we we've got, look, I mean, we've got a lot going on here. Um, you know, this company in general, uh, on the sales and marketing side in particular, is is going through a little bit of a transformation. There's an absolute insurgence of top talent that is wanting to come to work over here because not only do they know that we have the experience that ChatGPT told you, and we're powered by the brands that we're powered by, but they know that they have somebody in me that's gonna do what I say I'm gonna do, and for years, you know, I've honored that code. And, you know, it's been humbling. I um I was I was telling um some of our um our team members today, you know, after having you know been out of the industry for a few years since 2021, um, you know, doing other things. Uh it's really been heartwarming to see the the top talent at other companies that have said, oh, oh, Mike's coming back. This is where we gotta be because he's gonna, you know, he's gonna be innovative, he's gonna be creative, um, you know, they're gonna make sure that we stay in the 21st century on the cutting edge with the things that we do. You know, we're the owners are gonna be taken care of, the customer journey, they're gonna be put first. And when the owners are happy, you know, that creates an open mind, right? The new, the new members, the you know, the Marriott Bond Boy database, you know, when when we have the call transfer, when they call to book a reservation at a Marriott Hotel, and they they, you know, I mean, we do staggering numbers of families that decide to come take a preview vacation with us on an annual basis that got to us through, you know, the Marriott Hotel call transfer program. So, you know, people are starting to connect the dots. I think they're kind of saying, hey, you know, you got a really amazing branded company, really, you know, the the the top of the tier. And then now you've got some entrepreneurship that's kind of coming in and combining. And when you start thinking about that, and you start thinking about how an entrepreneur thinks about moving with speed, not getting bogged down with corporate bureaucracy and and really, you know, challenging people to think and be better and use AI and tools, you know, I can honestly say that we're gonna provide them with the greatest opportunity that they can find in this industry to make a living for their family. And fortunately, they they've voted with their feet, they're coming. So that's that's yeah.

Alex Husner 54:54

It is, and it's exciting too, because it's like a you know, I think with a big company like Marriott, I mean, it's like you know, moving the Titanic in some ways, just with any big company like that. But obviously, you know, they didn't hire you just because you look good on paper. They knew you were gonna come in and you're gonna do innovative things and they will support you, which is at this point in your career gonna be very fulfilling, I'm sure, to keep doing this again, even though you thought you were out of it.

SPEAKER_06 55:16

Yeah, well, I I don't uh be remiss and I don't want to miss the opportunity to say, you know, how excited I am to work with Matt Averill as well. You know, Matt is just an incredibly smart guy. He too has been in this industry pretty much his whole life. And, you know, as I said earlier, you know, I worked with Matt at Starwood uh vacation ownership, where he was the president. I led the marketing sales in the eastern part of the company for a few years. And so I really got to know Matt and our um our strengths are so complementary. Uh, you know, Matt grew up on the finance side of the business, and you know, he's incredible, you know, uh, with what we'll call the corporate GNA side of the business. So, you know, Matt Matt focuses on finance and accounting, he focuses on the legal side of the business, you know, he focuses on um really IT, global technology, and he's amazing at that, right? And you know, that kind of removing that from my plate to allow me the freedom and the creativity to really go focus on the revenue generation and the commercial side of the business. And as we said in the opening comments, organizing it in such a way where you, you know, I kind of have it from cradle to grade. We're gonna get there a lot faster because I have the honor to be able to work with Matt. So it's it's a it's a great team.

Annie Holcombe 56:39

So well, congratulations. We're very happy for you. And you don't look any worse for the wear, you look like you're in a great spot and you know, just enjoy like living the dream, but obviously working 40 hours a day. I don't know how you're doing it all.

SPEAKER_06 56:51

40 hours a day. You know, my uh my wife told me, she said, uh, yeah, you're not made for retirement. Not to be not to get to annoy me when you're I was gonna say, you're probably driving her crazy, huh? You find something to do anyway. Yeah, you know what? Why don't you go get paid for it? I'm not gonna go. Right, exactly.

Annie Holcombe 57:18

Wise woman, wise woman.

Alex Husner 57:20

Awesome. Well, thank you so much for joining us again, Mike. This was this was fun and a little bit of a kind of different type of an episode or interview than we typically do, but definitely enjoyable. And I hope that our listeners got something from it because I think there's a lot to learn from people doing similar things but different, and you know, how we can work together or just you know learn learn from each other. But um, if anybody wants to reach out to you, what's the best way for them to get in touch?

SPEAKER_06 57:45

Well, my email is mike.flasky at mvwc.com. Um, and obviously, uh, you know, on social media, I'm the vacation doctor uh on Instagram. Uh I don't think is kind of uh not really where I spend much time, but between Instagram and LinkedIn um and Facebook, you know, we do a good job with our community here at Marriott and our team, our social media team is incredible here. So we have a high level of engagement and we try to uh try to put good content out so they can find me there. I want to say this in closing, though. I I want to say thank you to you ladies. I um I think that you know when you started your show, you know, what is now several years ago, um, I I never thought and I have continued to follow because you've been you know nice enough to allow me to come on. You know, it's amazing what you've built. And you your brands um, you know, are crazy good. And you know, you have a great following. And you know, your your numbers and your demographics are you know, they're really strong. And so kudos to you. I hope you all are monetizing it because you deserve it.

Alex Husner 58:52

Oh, thank you. That means a lot. That means a lot. We just stumbled into this and we just kept going, but we're we're going strong and and definitely appreciate that big time. But um, we'll we'll include the links to your socials in in the show notes if anybody wants to get in touch with Mike. Um, if you want to get in touch with Annie and I, you can go to alexandanipodcast.com. And until next time, thanks for tuning in, everybody.