Revenue from Contracts with Customers

12 Months Ended

Dec. 31, 2022

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 22: Business Segments below for more details related to our segments.

($ in millions)	Year Ended December 31,
Real Estate Sales and Financing Segment	2022		2021		2020
Sales of VOIs, net	$	1,491	$	883	$	108
Sales, marketing, brand and other fees	620		385		221
Interest income	235		157		141
Other financing revenue	32		26		24
Real estate sales and financing segment revenues	$	2,378	$	1,451	$	494

($ in millions)	Year Ended December 31,
Resort Operations and Club Management Segment	2022		2021		2020
Club management	$	227	$	168	$	96
Resort management	307		172		70
Rental(1)	586		315		91
Ancillary services	40		27		7
Resort operations and club management segment revenues	$	1,160	$	682	$	264

(1)Excludes intersegment eliminations. See Note 22: Business Segments for additional information.

Contract Balances

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

	Year Ended December 31,
($ in millions)	2022		2021
Receivables	$	322	$	202

The following table presents the composition of our contract liabilities:

	Year Ended December 31,
($ in millions)	2022		2021
Contract liabilities:
Advanced deposits	$	150	$	112
Deferred sales of VOIs of projects under construction	3		34
Club dues and Club activation fees	76		91
Bonus Point incentive liability and marketing package(1)	106		95
Deferred maintenance fees	14		14
Other deferred revenue	42		47

(1)As of December 31, 2022, the balance includes $51 million of bonus point incentive liabilities and $55 million for related bonus points and marketing package deferred revenue. The Bonus Point incentive liabilities are included in Accounts payable, accrued expenses and other on our 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 year ended December 31, 2022 that was included in the contract liabilities balance at December 31, 2021 was approximately $173 million. Revenue earned for the year ended December 31, 2021 that was included in the contract liabilities balance at December 31, 2020 was approximately $355 million.

Our accounts receivable 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.

Contract assets relate to incentive fees that can be earned for meeting certain targets on sales of VOIs at properties under our fee-for-service arrangements; however, our right to consideration is conditional upon completing the requirements of the annual incentive fee period. As of December 31, 2022, contract assets were $9 million. There were no contract assets as of December 31, 2021.

Contract liabilities include payments received or due in advance of satisfying our performance obligations, offset by revenues recognized. 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.

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) 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.

Deferred VOI sales include the deferred revenues associated with: the sales associated with incomplete phases or buildings; the sales of unacquired inventory; and deferred sales associated with our long-term lease product with a reversionary interest. The following table presents the deferred revenue, cost of VOI sales and direct selling costs from sales of VOIs related to projects under construction:

	Year Ended December 31,
($ in millions)	2022		2021
Sales of VOIs, net	$	3	$	34
Cost of VOI sales	1		12
Sales and marketing expense	1		5

During the year ended December 31, 2022, we recognized $98 million of sales of VOIs, net, offset by deferrals of $67 million, related to sales of projects under construction, some of which were completed during the year. We expect to recognize the revenue, costs of VOI sales and direct selling costs related to the projects under construction as of December 31, 2022 upon their completion in 2023.

The following table includes the remaining transaction price related to Advanced deposits, Club activation fees and Bonus Points as of December 31, 2022:

($ in millions)	Remaining Transaction Price		Recognition Period	Recognition Method
Advanced deposits	$	150	18 months	Upon customer stays
Club activation fees	64		7 years	Straight-line basis over average inventory holding period
Bonus Points	106		18 - 30 months	Upon redemption

Club activation fees are paid at closing of a VOI purchase, which grants access to our points-based Club. The revenue from these fees are deferred and amortized on a straight-line basis over the average inventory holding period. Deferred revenues do not include prepaid vacation packages or other prepayments for future stays at our resorts, which are included in Advanced deposits in our consolidated balance sheets.