Vacation Ownership Stocks Sink in July, But Analysts See Contrarian Value in TNL, VAC

Monday was not a good day for travel stocks. At least 20 names made Barchart’s bearish price surprises list.

Hilton Grand Vacations (HGV) was one of those companies. It lost nearly 7% on the day on volume of 1.3 million, slightly higher than its 30-day average. 

According to CoStar Group (CSGP), the commercial real estate information company, the Baird Hotel Stock Index -- it tracks 20 large hotel brands and REITs traded on a U.S. exchange --  fell by 1.5% in July, the first down month for the index since March. The good news for hotel investors: the index in 2026 is up 19.3% through July 31. 

HGV’s former parent, Hilton (HLT), saw its stock lose 3% from the end of June through the end of July. Meanwhile, HGV was down nearly 12% last month, negating most of the vacation ownership stock’s gains for 2026. Yesterday’s decline brought it into negative territory, down 4% on the year.

Owning vacation ownership stocks hasn’t been a good bet over the past five years either. HGV is up just 7.5%, Marriott Vacations Worldwide (VAC) is down 21%, while Travel + Leisure’s (TNL) has gained 38.4%. All, however, have underperformed relative to the S&P 500, which is up 73.7% over the same period. 

Despite the lack of performance, all three of the vacation ownership stocks I’ve mentioned here could be good contrarian bets. Here’s why I feel this way. 

Why Is VAC Stock Down So Much Over Past 5 Years?

When I first decided to write about hotel and vacation ownership stocks for today’s commentary, HGV was the primary focus. Still, the lack of performance of Marriott Vacations Worldwide over the past five years made me change direction slightly. 

Marriott International (MAR) spun off its old timeshare business on Nov. 21, 2011, nearly 15 years ago. 

So, the only relationship is a contractual one where the vacation ownership business pays Marriott International a fixed annual fee (adjusted for inflation) to use the Marriott name and a variable fee based on sales volumes. VAC’s long-term licensing agreement with MAR doesn’t expire until 2095.

Marriott Vacations’ second-largest shareholder is activist investor Impactive Capital, with 12.04% of the company’s outstanding stock. 

It first revealed a 7.4% stake in April 2024. Impactive reached a support agreement with the company in May 2025. By then, the activist’s stake had grown to 9.5%. It has added 834,000 in the year since. As part of the agreement, Impactive co-founder Christian Alejandro Asmar was added to the company’s board, as well as a board committee created to advise the company on its modernization efforts. 

“I look forward to partnering with my fellow directors to support the Board and management in their efforts to drive operational efficiency, enhance free cash flow per share, and deliver sustainable, long-term returns for shareholders,” Asmar stated in Marriott’s May 27, 2025, press release. 

What’s happened on this front?

On Aug. 6, Marriott Vacations reported Q2 2026 results that were better than expected. This led the company to raise its 2026 guidance for full-year contract sales, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and adjusted FCF (free cash flow). 

Contract sales are the total amount of VOI (vacation ownership interest) sales under signed contracts during the period, with a down payment of at least 10% received. In 2026, it expects them to be $2.1 billion, up from its previous guidance of $1.85 billion. 

As for free cash flow, the company’s new guidance is for $435 million in 2026, up from $400 million previously. 

That might not seem like a lot. However, based on an enterprise value of $9.1 billion, that’s an FCF yield of 4.8%. I consider anything between 4% and 8% to be fair value. 

Both are a step in the right direction. 

How About HGV and TNL?

Hilton Grand Vacations reported its Q2 2026 results on July 30. The company’s guidance for 2026 includes contract sales that are flat to down slightly, with adjusted EBITDA of $1.25 billion, higher than Marriott’s $817.5 million estimate at the midpoint of its guidance. HGV might convert 61% of its EBITDA to FCF compared to the mid-50s for Marriott.

According to S&P Global Market Intelligence, HGV’s free cash flow estimate for 2026 is $599 million. Based on an enterprise value of $11.02 billion, that’s an FCF yield of 5.4%, 60 basis points higher than MAR. 

Travel + Leisure reported its Q2 2026 results on July 22. The company’s contract sales guidance for 2026 is expected to be $2.64 billion at the midpoint, with adjusted EBITDA of $1.075 billion.

TNL’s free cash flow estimate for 2026 is $549 million. Based on an enterprise value of $10.09 billion, that’s an FCF yield of 5.9%, 50 basis points higher than HGV, and 110 basis points higher than VAC. 

The Best of the Contrarian Vacation Ownership Bets

Of the three, there is no question analysts prefer TNL. 

Of the 14 analysts covering Travel + Leisure, 13 rate it a Buy (4.71 out of 5) with an $88.77 target price, 20% higher than its current share price. Meanwhile, seven out of 12 rate VAC a Buy (3.75 out of 5), while four out of 11 rate HGV a Buy (3.73 out of 5).

If your focus is on solid balance sheets, TNL has the best of the three, with total debt of $5.87 million, or 6.1 times EBITDA. That compares to 8.0x for HGV and 9.3x for VAC.

While both Hilton and Marriott have strong brand names, Travel + Leisure has behind it one of the most-read travel magazines anywhere. That goes a long way to attracting new vacation owners. 

If it were my money, I’d go with TNL or VAC. While the latter has far more momentum in 2026, long-term, the better buy is TNL. It’s the best of the bunch.