Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2021

Revenue From Contract With Customer [Abstract]

Revenue from Contracts with Customers

Note 4: Revenue from Contracts with Customers

Disaggregation of Revenue

The following tables show our disaggregated revenues by product and segment from contracts with customers. We operate our business in the following two segments: (i) Real estate sales and financing and (ii) Resort operations and club management. Please refer to Note 20: Business Segments below for more details related to our segments.

($ in millions)	Three Months Ended September 30,				Nine Months Ended September 30,
Real Estate Sales and Financing Segment	2021		2020		2021		2020
Sales of VOIs, net	$	488	$	24	$	597	$	80
Sales, marketing, brand and other fees		118		52		252		171
Interest income		46		34		108		108
Other financing revenue		7		6		19		19
Real estate sales and financing segment revenues	$	659	$	116	$	976	$	378

($ in millions)	Three Months Ended September 30,				Nine Months Ended September 30,
Resort Operations and Club Management Segment	2021		2020		2021		2020
Club management	$	42	$	23	$	98	$	70
Resort management		57		16	$	94		52
Rental(1)		104		19		184		71
Ancillary services		8		1		14		6
Resort operations and club management segment revenues	$	211	$	59	$	390	$	199

(1) Excludes intersegment eliminations. See Note 20: Business Segments for additional information.

Contract Balances

The following table provides information on our accounts receivable from contracts with customers which are included in Accounts receivable, net on our condensed consolidated balance sheets:

	September 30,		December 31,
($ in millions)	2021		2020
Receivables	$	189	$	64

The following table presents the composition of our contract liabilities.

	September 30,		December 31,
($ in millions)	2021		2020
Contract liabilities:
Advanced deposits	$	116	$	117
Deferred sales of VOIs of projects under construction		—		169
Annual dues and Legacy-HGV Club activation fees		100		77
Bonus Point incentive liability(1)		51		48

(1) Amounts related to the Bonus Point incentive liability are included in Accounts payable, accrued expenses and other on our condensed consolidated balance sheets. This liability is comprised of unrecognized revenue for incentives from VOI sales and sales and marketing expenses in conjunction with our fee-for-service arrangements.

Revenue earned for the three and nine months ended September 30, 2021 that was included in the contract liabilities balance at December 31, 2020 was approximately $16 million and $106 million, respectively.

Our accounts receivables that relate to our contracts with customers includes amounts associated with our contractual right to consideration for completed performance obligations related primarily to our fee-for-service arrangements and homeowners’ associations management agreements and are settled when the related cash is received. Accounts receivable are recorded when the right to consideration becomes unconditional and is only contingent on the passage of time. Refer to Note 7: Timeshare Financing Receivables for information on balances and changes in balances during the period related to our timeshare financing receivables.

Contract liabilities include payments received or due in advance of satisfying our performance obligations. Such contract liabilities include advance deposits received on prepaid vacation packages for future stays at our resorts, deferred revenues related to sales of VOIs of projects under construction, Club activation fees and annual dues and the liability for Bonus Points awarded to our customers for purchase of VOIs at our properties or properties under our fee-for-service arrangements that may be redeemed in the future.

In addition to the contract liabilities included herein, we also have deferred revenue of $170 million and $16 million as of September 30, 2021 and December 31, 2020, respectively. These deferred revenue balances primarily include bonus points and marketing package deferred revenue, deferred property insurance, and other.

Transaction Price Allocated to Remaining Performance Obligations

Transaction price allocated to remaining performance obligations represents contract revenue that has not yet been recognized. Our contracts with remaining performance obligations primarily include (i) sales of VOIs under construction, (ii) Legacy-HGV Club activation fees paid at closing of a VOI purchase, (iii) customers’ advanced deposits on prepaid vacation packages and (iv) Bonus Points that may be redeemed in the future.

The following table represents the deferred revenue, cost of VOI sales and direct selling costs from sales of VOIs related to projects under construction as of September 30, 2021 and December 31, 2020:

	September 30,		December 31,
($ in millions)	2021		2020
Sales of VOIs, net	$	—	$	169
Cost of VOI sales(1)		—		50
Sales and marketing expense		—		25

(1) Includes anticipated Cost of VOI sales related to inventory associated with Sales of VOIs under construction that will be acquired under a just-in-time arrangement once construction is complete.

As of September 30, 2021 we have recognized all revenue, costs of VOI sales and direct selling costs previously in deferral as all projects under construction were completed in the third quarter of 2021.

The following table includes the remaining transaction price related to Advanced deposits, Annual dues and Legacy-HGV Club activation fees and Bonus Points as of September 30, 2021:

($ in millions)	Remaining Transaction Price		Recognition Period	Recognition Method
Advanced deposits	$	116	18 months	Upon customer stays
Annual dues and Legacy-HGV Club activation fees		62	7 years	Straight-line basis over average inventory holding period
Bonus Points		51	18 - 30 months	Upon redemption