Hilton Grand Vacations (HGV) has updated on the impact of the recent Maui wildfires on its business operations.
The company’s properties in the Hawaiian Islands include two properties and sales centers in Maui: Kā’anapali Beach Club in Kā’anapali, and the recently opened Maui Bay Villas in Kīhei.
HGV asserts that neither Maui property sustained physical damage, and it maintains business interruption insurance at both properties.
CEO Mark Wang highlighted that HGV has activated a Team Member Relief Fund and provided housing assistance to its team members and their families, along with first responders assisting in relief efforts.
HGV has reportedly also provided $500,000 of relief through direct support to team members and residents and donations to community organisations.
Impact on HGV hotels in Maui
CFO Dan Matthewes commented: “Currently, Kā’anapali Beach Club is not accepting guest reservations, and non-essential travel to the affected areas remains limited by regional authorities. As a result, we’re anticipating a significant decline in contract sales activity at our Maui properties for the remainder of the year.”
This decline in sales comes after HGV's expected increase in earnings on higher revenues for its Q1 2023 results in April.
In the 12 months ended June 30, 2023, contract sales in all of HGV’s Hawaii sales centers represented approximately 16% of total contract sales. In that same period, the company’s two Maui properties contributed over 20% of Hawaii’s contract sales.
HGV estimated that Hawaii, and Maui in particular, would be larger contributors to its growth in the second half of 2023 versus the first half. This was attributed to expected continuing market recovery.
Currently, the company estimates that the impact to Q3 2023 will be $20 to $25m in contract sales and $12 to $15m in adjusted EBITDA.
Matthewes continued: “Outside of the affected Maui resorts, we have not yet seen an uptick in cancellation activity at our other Hawaiian properties. Nevertheless, the situation remains fluid, and we may see some additional disruptions across our broader Hawaii portfolio as we relocate and rebook our guests.”
