WYND - Earnings call transcript Q4 2018

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Operator

Good morning. And welcome to Wyndham Destination's Fourth Quarter and Full-year 2018 Earnings Conference Call. After the speakers' remarks, there will be a question-and-answer period [Operator Instructions].

As a reminder, ladies and gentlemen, this call is being recorded.

If you do not agree with these terms, please disconnect at this time. you. Thank like call now Agnew. to turn to would over the Chris I go Please ahead.

Chris Agnew

Good and you, morning Thank Keith. welcome.

in Officer strategic statements. reconciliation differ non-GAAP morning, begin, you and This our revise can of the provide this find And forward-looking greater results that discuss today's we on release as results factors will forward-looking site that our Hug, our results our in The on Before Web measures Michael we'd and outlook. Mike And forward-looking discussions morning quarter like statements call and of effective will an fourth no Brown, statements a indicated from to earnings on are statements. detail those then materially are press to the remind Actual the in Chief results. Executive could financial made We our Investor.wyndhamdestinations.com. discussed undertake overview Financial filings. obligation cause will President these and our actual our our initiatives to our fourth today today. at our Chief Officer, and publicly you differ discussed quarter update SEC or could include provide

respond remarks, I'm your we these over available to will to be With Brown. Following that, turn Michael questions. to pleased to call the

Michael Brown

of quarter EPS Chris, you, adjusted further with results adjusted our fourth both We're and and guidance. EBITDA midpoint report further of Thank good $XXX to morning you. to above of pleased of million the each $X.XX,

$X.XX, and further $XXX to representing For of the growth reflecting further million, we X% finish adjusted with EPS year-on-year growth. XX% of pleased are full-year, adjusted EBITDA

in Destinations, laid our proud out are on have of first As out XXXX. earnings to we goals we as delivered year Wyndham we March close

and nearly billion and team operating ownership and Wyndham was in sales in and rentals $X.X revenues. gross metrics. remains key objectives on one strategic $X both ready the vacation exchange billion executed in vacation with realized leader Our destinations and our over day from exchange

and incredibly XXXX our work confidence We we all leaders, that we entered the associates and XXXX. on are hard with build of proud momentum from by our will

our Let delivered while commitment operating highlights. me mix, to few maintaining a new shift our margins. owner share on of We

we to located total will will great newest to of combined. tours. Supporting increase sales, is resort, Oregon. gross us mix owner and the end be with in total owner tours the robust millennials generation. year, June on new to of improved and shift sales our from over because to markets line margin of increased prior and way the points XXXX, under sales By to XXXX, future purchases owners were VOI and the pipeline strength in adjusted impactful year-over-year of close X% incremental goal to our strategic sales through XX% basis In new year XX% XX.X%. more provides owner new for X% XX% to in open will were nearly VPG Of delivered put XX%. gen-Xers in just we millennials X% our EBITDA XXX a portfolio. points continues being finished which new increase underlying it increase and basis pipeline sales development sales In XX% owners, XX in to Portland, creates in well our be Our for XXXX, this growth, we top our urban This our further of and

XXXX. in inventory help strong free Our deliver flow consistent capital cash efficient sourcing and

target spin. with returning share in range, adjusted above We months elements. cash our further following first full came million the dividends cash on of high-end the flow focused With to of million capital and the seven commitment For of the allocation year, several outlook $XXX leverage shareholders $XXX our demonstrated within our expectations million. at repurchases remains free to in $XXX

in increase cash shareholders to dividend commitment announced confidence free and expresses to return demonstrates our consistently to ability cash generate our flow. First, our and grow

loyalty this thread, highly our believe demographics, extremely hotel The connection a for remains share new use to commitment is of cash of their correlated transactions, to best rewards of customer powerful and demographics the to award-winning compelling Wyndham Second, our the owners marketing we making excess on Wyndham free this own absence hotels the in the our loyalty blue repurchases. owner program. guest are our that pipeline. members focus new time flow Underpinning increasing

non-affinity thread pleased our We new is are margins owner and than new XX% these important of blue owner view our underappreciated year-over-year. that is more in of channels. utilizing to The this connection to are VPGs owner the blue XXXX I'm because in higher tours, grew share XX% tours. and thread to our sales generate new strength One than our business of marketing tours aspect generated important

a that generate three competitive channels There significant marketing why are developers me diversified is platform utilize timeshare Let advantage. primary our share to sales. marketing

first existing sales owners. The is to

loan. representing owner be We new $XXX,XXX sales have owners. the fully Even about largest around XX% at Of channel owners, our of we of base total have largest the owner increase owners, after will sales. XXX,XXX paid-off this of the industry with of base XX% these mix their XXX,XXX in continue our them to

largest in of our scale the a that We to high-traffic opportunity channel theme growth tours thread. destinations. databases. from channel third this our alone known is as loyalty partners This and vacation great have requires is Hospitality where one blue for profitably. to the and destinations as and see Wyndham we new in market to strengths, core years the channel other leads The effort our several second at last their have market is And owner open hotels, which parks, malls operate marketing opportunity companies affinity acquiring marketing. are begun casinos, and our

We have that scale.

for only of us. a advantage this with competitive We and company the all a presence three significant channels are in these is

meaningful to shared brands We strengths and multiple Destinations' leverage grow on marketing Wyndham markets. to competitive the ability that occasions have to the several partners include develop ability

established with this support long-term key relationships have We partners growth. strong to

by Olivier and I'm RCI. of he as us Olivier a Worldwide, of to of the past the this business Hilton new with revenue This For want Executive former underperformed example, are has welcome vacations. reigniting over XX particularly cash portfolio quarter, our the we've through grow relationship ignite our to extended watched and with proven and record to confident prior CEO lower & Grand Chavy, that Shifting has decade another I've that years brand in secure will the grow business. I more the untapped fourth Olivier we will member. was CEO ability personally exchange ability Olivier year, known of as point our spirit, led per growth we and his momentarily. Hotels potential. provide dynamic leadership by Resorts. rentals and In a grow that I our XXXX. will out to this strong track president resorts. great businesses. believe committed Mike business, us And and the flow Hilton of Mövenpick that Margaritaville and enhance help joins to successes the revenue owners delighted new he But exchange detail relationship a am to Senior to Former

focused year initiatives, further growth flow. profitability quarter for we Through we While adjusted a on EBITDA growth and further optimizing and XXXX in adjusted cost and the challenging top exchange delivered X% line X% EBITDA was for full-year. cash remain growth the in rentals,

like affiliated cost new development strong XXXX a the resorts, to that as expansion noteworthy region. XXX over Not year and Vacations been notable resorts in was addition in increase and recently but other Club, U.S. year added for In had with Shell were RCI Welk performance, only XXXX. India added we in clubs blue-chip affiliated Resorts business new there Asia achievements. a has did this XX strong XX% our

vacation a we also alternatives this North is business, a other of managed are leader exploring are overtime more to diversified core company collection a professionally at This Destinations' business opportunistic in We in our vacation allow morning of focus announced national rentals our This that intended the distinctive is footprint. with Wyndham brands on rental America. the strategic aspects of review us identity. that great for to fully and

cash steps of and realized commenting creation more and and mix, a to blue key In alternatives. the in growth increasing sales, growth; fulsome year strong we against outlook. this our have operating maximizing confident future. today on initiatives for second, margin that, by XXXX share of and owner value now of to growth Hug of first, next to strategic have detailed key overall strong to messages; a be future. our our it excited the about in turn noting thread entered return hope not commitment all than preservation; would Mike? execution We reiterate third, our to it shareholders and new our in to review value over financial EBITDA goals our With detail I delivery is specifically, gross summary, delivered will review like to metrics, and on performance the successful We flow. Mike sales other like tour near I’d the

Mike Hug

introduce our Thank our full-year and you, fourth-quarter our results I'd XXXX Today, everyone. discuss results, outlook. Michael and XXXX like good to morning

our each for Wyndham Therefore, financial are our we the as a and business As further today our would had the my periods. reported and spin metrics the of difficult. on these have outlook helpful We presenting on forward Xst performed hotels metrics noted, comments results of reported understanding makes on basis. January more focus spin-off more previously results the in believe comparisons how our financial year-on-year adjusted if primarily occurred go

find of gap complete amounts can results including adjusted earnings release, to numbers. You in our reconciliations

refer for related in and full details the X adjusted further release remove adjusted run reflect costs. Please cost for results earnings on expense results. license our corporate fees, further and our table our rate separation Our

further earnings the we Further of increase share fourth EBITDA earnings Our year. prior increase was further midpoint share X% over our range. call diluted an third our of was adjusted provided prior and the further, exceeded the $X.XX, in million, And at guidance adjusted high-end XX% adjusted diluted year. the per the adjusted an during the quarter came over per of of quarter EBITDA $XXX

own further sales full-year year. over million, earnings For XXXX, tourists and with higher. fourth we per realized year Exchange was membership revenue products. adjusted exchange, And These growth increased an reduced were VPG prior further revenue our of America, million with X% year supply of economic compounded challenges rentals X%. number all increase reported over headwinds expected declined Latin adjusted to We foreign diluted sales in and the than over at $XXX a year. the Gross weaker offset XX% of X% the of in political increasing by $XXX mix. X% quarter prior with exchange the the RCI, member and including of X% quarter a declined EBITDA $X.XX, X%, member and had last per fourth X% share of increase

our savings our active As XXXX. from Michael very portfolio, charges adjusted further reignite XX are improved we to in margins To steps mentioned, reported sales related higher our provision. in restructuring XX.X%. offset $XX of initiatives, exchange and EBITDA cost pressure Further in business. million basis mix Growth savings initiatives we taking helped efficiencies points and operational a margin support cost to to

primarily All efficiencies out including and enhancing XXXX action severance organizational $XX was flow. operations. paid rationalizing personnel and free of focused which were cash million which related for cost This will on

of quarter look with optimize the Shifting business. well our to realized the provision portfolio, it performed to XX.X% our continue ways at performance to sales. at in of gross We

For was on call. compared our when we the third XX% favorable anticipated that had the quarter the provision to full-year, XX.X%

Our operations $XXX XXXX our free of million. to ahead million, range adjusted for was continuing from further guidance cash of flow $XXX million $XXX

our to flow. to Our just-in-time large and the free and cash us EBITDA convert swings access annual markets in inventory consistently flow model enable into support ABS cash

we cash Turning non-recourse billion had receivables. related billion, debt of and cash corporate of with of which our balance sheet, equivalents to XXst, to excludes $X.X debt December at million $X.X as securitized $XXX our

to remains target X.XXx Xx. rate within net our leverage of Our of X.X leverage times

During closed two the we transactions. fourth securitization quarter,

of rate coupon and of first X.XX% October. securitization $XXX the XX% term million that in The our with average was closed a advanced weighted

to with previous This as in private was the with in share be similar respect is our weighted in transactions. second first X.XX% as XXXX of to late beginning were our transaction this per rate of for closed Directors of shares. dividend, million price public $XXX of the December in we size dividend in leverage X.X of a eligible with was XX% $X.XX per a our transaction to total to pleased declared occurred coupon our cash the quarter receivables advanced Board rate that quarter term average million XXXX. of share are The million ABS XX%. of authorized from $XX.XX We had transaction on of advanced and the $XXX and not to our that increase stock fourth repurchased We at deal for one dividend With XX%. expected $X.XX this normal quarterly

the recent $X.XX payment of of had or outstanding share X% million repurchases continued of or two quarter of to Destinations' February through Wyndham We dividend dividends market another in XXXX, of X% we the our is spin-off have shares per Inclusive $XX the into most our first returned share December. which and XXXX. $XX trading first share million through including $XXX approximately June day in on that million repurchases shareholders repurchases, repurchasing first XXXX, of the X, XX, repurchased since of XXXX months. the capitalization spin-off, Since our Wyndham million stock Hotels, were $XXX of on our the

me let our to turn Now, outlook.

our practice, our can industry on-demand year help guidance the of annual or this variability saw year upcoming is we the the items but lead such we for color order quarter. as does tours, only on started business is that provision and the ahead the generate finished realized stronger guidance for of in to we this context the the will because a VPG year. XXXX year, provide in our metrics most inline of forward. guidance, plan As some as quarterly weaker full provide as full We this The some gross percentage metrics, for of this manage other, going and we some to sales. In detailed we navigate on in on reason but

You the mind each should our give keep year detail guidance we quarter. in that will reflects about full

to million anticipate $X.XXX $X.XX. from we the and XXXX, EBITDA billion, year to expect earnings share full range be the $XXX XXXX $X.XX to adjusted to range we in For adjusted of per

As a earnings-per-share December share additional reminder, no assumes our the XX, using repurchases outlook of share count as for XXXX.

X% to X% to We be increase to X%. and expect to X% tourists VPG up

With the will members per exchange up and to exchange exchange average will X%. flat flat business, rental we revenue to be X% in member be down believe

a we in of of be realized be Our the XXXX half XXXX. of of around pattern similar the to sales this sales. higher be will provision realized it They to to first will in expect to of similar the anticipate XXXX in We is as first expected that quarter the second gross XX.X% percentage year, lower while provision gross a year particularly the half the year. follow

XXXX, the up last locations number quarter in to scaled $X.XX marketing year at San won't back and year the May a less growing Nashville Portland, new the of wrap respectively. our Antonio our be end of centers range sales earnings For below X%. share X% Tourists in August, until profitable first and and to to $X.XX. expectation full will We quarter, of from we adjusted per expect first April,

strongest Exchange still growth see tour quarter, the of a the this the member of will from XXXX. weakest be to revenue quarter will quarter per is the and fourth As rate first third fourth in quarter year. in down the but growth year-over-year result similar improvement

EBITDA in and As to and year. because quarter the to up also believe provision, X% will first a further be the revenue result will in comparable EBITDA of adjusted flat adjusted be total prior we

$XXX for million to Our cash $XXX adjusted outlook flow XXXX free is million.

related approximately As free of the cash approximately European of our cash million anticipate half sale impacting flow. a in vacation with we room reminder, business $XXX payment XXXX to

mentioned rate well XXXX restructuring in separation had an for are million XXXX as XX%. about of very to our XXXX. with costs pleased we we $XX performance as note conclude, To tax expect $XX Please outlook our previously. of effective XX% that in costs also We million, and during

our as Keith of we Our for With initiatives open executing teams XX% growth our to growth turn call X% would questions. and adjusted continued share earnings to back company. first it do like public job to adjusted in EBITDA that, further an year per amazing the separate up strategic and further a on delivered and

Operator

from our with Morgan. Greff take question Joe We'll first ahead, open. JP line Please Instructions] go is your [Operator

Joe Greff

You of do ownership, I the this on outlook. vacation the a have margins margin a particularly the you the see mix? year? on owner even with side you great think job EBITDA light push But margin guys new new focus. How do done and segment owner know you you continue can in progress on continued

Mike Hug

out that we mix, And And we margins on flat EBITDA core lower flat Wyndham new and margins believe doing. and -- a the at do our maintain really came Destinations', That's owner maintain three-legged we're our support we when EBIT guidance. order our of stool everything really preserve growth. new year-on-year was as can to

evidence those in together XXXX through I think pay order second in we was were cost of shift. proactive for half to you the bringing can three the see organizations strategic this the find to efficiencies

opportunities see do margins. to going mix owner shift new execute I preserving So, while the forward

Joe Greff

sense just my us north, the of talk Wyndham American And just exploration that’s North and of EBITDA that And LTM segment, Can for all in for the follow-up then, you segment? rentals a alternatives about strategic question. give me. the for Vacation

Mike Hug

in of EBITDA. revenue what's seems our question X% it and it of of about the about X% which total think I order magnitude our was represents business, your the

we rental really the company, back three to As like La really I to this the have the the to our wanted separation of the acquisition the mentioned in between the we vacation wanted at were remarks, the synergies a exchange transactions opportunity evaluate evaluate and that European happening are a my business. instead time, And at vacation and of We in have all if the with some business. sale strategic rush of separation business. you large of do to I And go that's same the there chance to rental process fashion. it moment. alternatives are And why because thoughtful the really ownership post in we business natural that's real and Quinta spin,

review alternatives is it's Wyndham determine and will to what the going all review strategic have in process we're we take. ultimate This this right lifecycle end to Destinations' early at right an our the We make the time and think of decision action opportunistic review.

Operator

our David go Jefferies. take question Please from we'll ahead. next Katz with And

David Katz

nonetheless. or to straight I've for just not item, everyone's you to which of moving order back down what provision, line exactly the wanted loan you do color there? but dynamics or us for with have loss particular line us. overtime, a and downward occur has share message to attention? order I explain in that start that be What to how to and that downward to in wonder the go line-up more much the consistently could to What may heard do or bit what consumes have staying I

Michael Brown

David, this is Mike.

some I few within taking. are some actions there's involve that think and our and we're of elements control directly

The components around last larger to proactive more we But important vacation, we're involved through primarily element and and and initiatives up our need spent are the in I And two quarter point effect getting loan in how it's out owners' putting owners a reliance Wyndham proper some process a on more positive number litigation to maximizing loss it first there having voice itself, it's on vacation to having but partially the because refuel utilization. strategically actual provisions, to our the it's believe laid all bigger all this individually to the our new way in I is a and is in both reason in having that third familiar who and our call a drive linearly and think consumers we in from exist top also a affinity to name, to don't a address are the fourth of And what legislation. to did help making out lay commentary which challenge years the I exit today putting about decrease channels, that importantly a to after people around and in parties taken it our already linear and will saw down. Unfortunately, ago be the do But again talking we're it's in nice time looking all see it efforts each most are the with our allow on marketing off, have business that not do to reduce numbers. of five going activity. is and on short-term space. the a leveling owner just as owner different reason that you is really our base to really I owners plan the

conclusion. support the So in us the making the all heading I think direction to that going the efforts to fact we're right the trends to are are get ultimate

David Katz

will can that occurring? it just eventual And up, at blue how your as other defaults fair well. come the if buckets, that getting marketing are significant and to two those those meaningful to come that piece is metric that what what and point the more thread as becomes were platforms. blue I the thread the should we Correct? assume is I'm more impact difference that that on a defaults have obviously, those through have and into call And through Is follow divide we if channel there in

Mike Hug

expect thread As the of things. blue to it we how receivables relates a to perform, couple

as future better life portion from similar non-blue all, channels. that performance will improved channels. that you to the compared origination those through receivables see show to we're receivables tourist in expect expect portfolio will how to receivables. marketing that higher First we significant that non-blue for would to of we run blue But the VPG It of grows for in time the in But when remember correct the perform take early we portfolio. than would place are of the way amount of of these thread a they that thread generate thread fairly up that the

Operator

Brian ahead. from Dobson next our Nomura. question with go is And Please

open. line Your is

Brian Dobson

more affinity thread leads. you I scale do marketing become to your And blue is the Just leads your so feel could on developing, quickly guess, first what on how channel, it to those And based part a that? transfer one what mobile ability follow-up on of important you or are app be business? your working follow-up. site Web partnerships then technology And I either have transfer?

Michael Brown

first million this digital. that represented This which XX% thread sales the blue $XX large mentioned, scheme a then we'll sales. of of and year percentage things So not year, as grew to on our get I grand of total we is

at the is However, begun look years execution get that our by $XXX sustainable think to that has transfer this over it. headroom site good our what really either that Hotel call we're million we the ago. years $XXX to opportunities Web grow or only can commitment to the on all through channel rental of amount proven two the million Wyndham a encouraged of and started mid and really there. properties in this that through We We channel four the think long-term the three the is we range. ahead of to XXX a are And very potential in KPIs absolutely us for has data

important for of digital and I to that to a of one platform elements their platform. ownership on ownership doing of organization as today, most we're is the digital, our ease access As what the think book on digital through an

and our implement web variety improve world-class we our And to different then working with charge Our contracted digital CRM lead really enhanced number a operators teams are services a really of on of web recently presence. business. Internet systems system. digital our grow with We've and our with Salesforce to providers really to marketing are working to

operating it's know it's of changed we look we you under-invested. are when think going key the a as I four our to this so five investment dramatically, forward. disproportionately little years consumer favoring But at because has area success ago within capital, to the

had you a think I follow-up Brian. question,

Brian Dobson

that's Yes, right.

sunset free gives channel legacy to in this see that cash pulls channel. Should major of of out of or high-quality your one-time cash terms cash in year. you some flow, finally of anything free SBAC ILG you a from brands expenses the So you expect outlined rate organic a normalized we you resumption do as Do And expenses find following that its two opportunity think partners? on the open growth marketing marketing better then those like your open that flow? year, and

Michael Brown

the then Brian, cash let and I'll the it Mike take first question question. hand open for me channel to

the time one grow is I the of around think are think our of there ability company continue plenty of hospitality States And open Wyndham the history an I an is benefits as for United to began unbranded marketing until only channel. Wyndham's opportunities to organization That and XXXX. course in the in the execution company in of In DNA brand. this Wyndham became hospitality the open channel. really scale a marketing reliance of created a without of really that this up XXXX, company created

still at margin importantly -- market Now about this XXXX, we've that an do a is of a still channel We because talk lower source have time most we partners and fast and footprint scale, that's why it We have call. leads. generating some DNA. open incredible that forward taken margin into U.S. have marketing new is to around the with great marketing lower

with therefore, $XXX have scale. space. that this partners, we to any we distribution when with with And and of So and with sales their support the larger bring nearly nights to to competitor negotiate in ours it their match that in channel, business unlike our we ability room other go through million premiums ability

source and we question? for to to owners. is competitive that with this our us a advantage as cash new blue the continue to advantage thread we Mike, along it we grow believe look for So it love long-term

Mike Hug

free $XX expect the from million. in we XXXX flow, continuing don't these cash much payments less than On impact it be will

flow, with I'll start free the and long-term our guidance. as XXXX As far cash XXXX

to to spend our to two that were we midpoints that of EBITDA to at basis guidance to the continue cash we've combined as compared a cash free at convert our believe long-term to flow XX% years If and the the flow XX% you will XX% XXXX, look rate. conversion. And EBITDA XXXX we EBITDA EBITDA discussed at over and free

Operator

go Chris Deutsche comes next Bank. from with question Please Our ahead. Woronka

Chris Woronka

far. other to in of Were so anything I your covered customers, a a You stock them with propensity we folks or see you And and the this maybe lot how on. step if a talk outlook volatility you back or and to that? noise lot wondered guys going buy take market interact quarter that's ask fourth tours to core about terms of their pick-up you you anything core as can I changed the of on give call and and salespeople you these through had like able specifics on them.

Michael Brown

you is really KPIs, be or whether noticeable our Chris, seeing seeing been And average provide the price, of rates even the stock new the would really your short consumer when change tough volatility of pointing those conversion to guidance, one But our every from as our the metrics transaction you headlines don't it's answer have we're to what all the of day. of that market flow, although and that consistent. stayed it at what the in is really tour any this look There no. we're positive. consumer. encouraging components read And in balance hasn’t we order are against

can point. So the change any seeing consumer. at in weakness we're not Obviously, that

year of next prepare downturn. into really head ourselves to started occur. it a what lot maybe when years heightened opportunistic be preparation does side and get time think to I the even to management to for is team out of as or ready as our and spending a really two us capital be for the is next awareness fully the trying on a We're we business look our

Chris Woronka

a look bit across ask you that something And peers lot or it's of more possibly? doing of inventory portfolio I a they something want as hotels. Is then a more to guys Is some have that have of Wyndham out independent these another maybe little hotel whether I -- conversions. turn think other about towards just know question, think your you

Mike Hug

When just levels we cash our will free that make to hold think sure inventory talking the method in continue about efficient to we've been the we've in we to. we methods that that flow capital time our inventory, acquire committed about at

and you Midtown we be to XX New for in it to it's was is going dependent the on The property itself City, in hotel As a Austin the the new particular conversion. great relates property really construction. example, York have have product product,

itself on to bring the depend opportunity most that again might product to efficient marketing and being once delivered to us going And be market. be in in really these right the importantly it the our open capital can us channels we're additional right opportunity from that it's method. So presents that a perspective, whatever

Operator

Our next ahead. with go Sachs. question Stephen from Grambling Please Goldman

Stephen Grambling

couple a quick follow-ups. guess of I

and new you You I the already just to being it sell net about have successfully owner held customer base think owners flat? to ramped owner takes growth? loan I what alluded like up their seems And percentage you generally owners As off then an into. those relatively sales to of upgraded? not paid can general XXX,XXX talk guess opportunity, the puts who’ve is with

Michael Brown

then of part the I to that. Why don’t hand Mike, second I'll that half of first and the take

Mike Hug

they’ll will we be So look potential when we will the look times. upgrade base, owners at our some upgrade never and be owner opportunity. total, across upgrade they'll multiple opportunities that that at owners some really revenue In

than over five us a that continue our average across $X to trends upgrade And out we're as a XX,XXX comfortable the six the obviously on XX,XXX that do have we base upgrade looking take historical what members roll into add grow. we year percentage the And available next then well average that that to over years billion we will in new to not have year, or that, sales. So very on owner in base future. have upgraded, doing is or rather we and at

we have again, owner base. opposed future with or a our pipeline standpoint at current very look with once but So that comfortable average associated have to revenue not we that on the from have a as overall percentage upgraded, it

Michael Brown

out going our owners. susceptible of think about are loss therefore owners join of To single I reasons that owners, mix. vast of piece one ownership with growing we're loan their to conversation. about major really I feel wanted year, XX% last to buy the point misperception I paid-off new paid-off there's fully XXX,XXX our loans Stephen, us loans, this the year. It's every your out their increasing more. new are majority provision on an fully it the our the of that conversation over the was to have and well beyond And a and question that have potential vacation been there their owners and

flat. loss curve to you're Our invert seeing total the base what relatively the I loan on provision. would owner is

Over you come the got of do We've And to and our ownership. largest ownership. base. exclude clear industry very the base. We their natural, owner industry reduction need leave was owner to how the program, create that that acquisitions, Ovation, naturally the the you required to People were when an called in past the a on several been years see lead would your I that. exit of point think because first longest. we've no in very they to representations eventually supportive fees We're the

owners, to starting you're their the fact now with leveling last that of the what owner third And that off in we into actually our owner place saw owner new total that combine ownership back that is who we're flattening. and our see naturally base. are number come that year of allowing quarter initiative new owners the leave the And you're current growing seeing is our should of growth you decline. in have first the the in However, new signs

Stephen Grambling

back less other some mentioned read And impacting there what sale are Is centers those you into follow-up, profitable. one to scaling then centers? anything was that

Michael Brown

No, not at all.

sale about marketing have We hundred to has channels. four a each centers one six and

as are that channels new aren't that our course profitable. constant goodbye and So marketing normal profitable. and there negotiating, and ones saying of part ins announcing is as to far less be going we're outs channels business of that of to Its

Operator

ahead. from Credit Cameron question next Please with Suisse. go our McKnight take we'll And

Cameron McKnight

the follow-up And rates on through days in Mike, pace earlier did at quarter Did sales just an growth December? close the of or particular things question. in a all? dark change change

Michael Brown

QX, are simply -- for is us. all. have at especially marketing in pare two keeping growth impact And December programs begin combine not in mind that not the combination opportunities items. that. we to No, And are some The on January, of not is, reflection on yes, January And and and of a to amplify just bit little back is that to and tour within in in big QX you tour growth XXXX. new owner QX tour a

about talk us Myrtle Beach. heard You've

the initiative You've And opportunities. as new XXXX. Florida in talk in us QX. about also of marketing the quarter Mike heard in Texas that Those But mentioned, we being first exist Austin, an South had we same ramped as just new up tour we dynamics don't play; you'll more of QX openings. business fact sales so nothing where and coming quarter-to-quarter into a that have consumer; that's operations be opening And the dynamics and we'll get three QX. really in moves location new in

Cameron McKnight

is else? that it business, secondly then the smaller on rental management you're it's lower return a evaluating And business. on something just Or margin review? a the What and there prompted Is time?

Michael Brown

Cameron, separation just at the that's to right it prior this a thoughtful to the of the synergies cost synergies. talk two about best We entities, European not to decision. the Destinations. La only way into transactions Quinta But began together, of what's good is the happening it. look three could revenue separation time the make And lie wasn't Rentals synergies with where reality portion but again, integrate a huge the to really and to began we Wyndham

what strategic the alternatives business actually And that few So was at business. year the really units where of now. value out It's proper that X,XXX do it to put takes see rental great coming gate, And a only North felt through the we've a that fit It's America. timing how right a of us. it look the for new the matter as to last it is the looking business. simply almost vacation was the to of review right it's at we to that decided months But maximize for in when we'll in destinations Wyndham we've a time this the of review. been review strategic

Cameron McKnight

And of rentals overtime? consistent business then the reasonably EBITDA $XX has being million that from

Mike Hug

Yes, has has. to just last growing reasonably operating It's part it and because continuing been years. it of performance. couple the acquisitions been yes, over consistent, of then in But growing drive

Operator

next Research. our question ahead. And Wolfe with Please Shojaian go from is Jared

Jared Shojaian

December the you that feel it specifically just the on coupon Or two that at and you securitizations market lower quarter, turmoil all the the private had So the because came did we during in higher nature in the month? any December in transaction a a fourth of Is market during rate. the advanced with being a pressure securitization did transaction?

Michael Hug

pressure the on transaction. December We felt absolutely no

that that out In of my XX%. had fact, we last south we did make comments rate in transaction sure we advanced was just the pointed that an

XX% little the XXXX. of when be last for signed the take The will. advanced reason great and felt our both order if to a doing what is that we for little a bit partners were and on are of that that, a the public that portfolio. So out might with transactions, stretch rate that example, that years wasn't that receivables in built-up advanced over very has transaction to But was another execution did execution we improvement the a late willing one we these aren't time this the or last so by document, over things pleased because is three or there for XX% have you had bit we're nature the different, like eligible rate parties a on we one nice taken there was

with was for opinion, team. part year, so performance we very our portfolio was actually by indication that it to in the that was was been reason million, in And believe So cash execution our and people of good our over were that pleased, that guidance actually that. happy up it flow to the able an take and $XXX the very

Jared Shojaian

your time to little X% locations. that your back X% November elaborate on on the guiding sale growth were tours I of some From you maybe guess level. those you, bit just question to the more tour going you'd what when a And I drove back in at scale from you decision reported in centers. we to tour Can be to it's heard last the think the still then just back

months of really what to guess quarter the you the for from So last changed drive I that decision? two

Michael Brown

We and the right some facing marketing EBITDA. be our about There to the had new grow your in that make new a hit where into programs as looked knew numbers would try decisions basis XXX to where the drive elements you We've full-year And margins quarter, our and in level you that constantly to the fourth that decisions made would ultimately And monthly cost to going we just reviews quarter. margins, points, coming and maintain the given thought had growth, sold number said end, we're opportunities drive the balancing. maintain owner we the of at deliver of to goods best what what above growth we're is of we your continue do higher order we are of in owner EBITDA. performing. are the the we're

in gets this in and to as a of preemptive that his what to So provide I just phone as the full-year expect parts. although, be the lot think moving Mike mentioned the is quarter And guidance has prepared has back remarks we we try business a very with what dynamic is, to that everyone ahead. will on

we're proactive in and felt wanted full-year And full be because hit you results dynamic the KPIs Within the to be quarter, for mix we're and going ultimately more very changing margins ensure hit EBITDA. our to and that street. to year striving always that we we the marketing our to communicating that just in saw we we're quarter, our the fourth we that

Operator

Instructions] Scholes Patrick go with We'll to [Operator next ahead. Please SunTrust. go

Patrick Scholes

like and the a large on inventory exchange what revenue, Just and be business, challenges on had product want supply that a pretty other member miss mix little one. Can about granular rentals you of impacts talk you were? to exactly looks negative more

Mike Hug

number that The refer other of are a we to things. products

them year you utilized sell for want forward that. the you you charge that other have point if and where and portion points and you if we have fee exchange, will to to with combine to next do that have, able them We your want a obviously there are of we a into is product them travel carry RCI consumers in book insurance that the

So those of various There're are ownership. things. probably also the two biggest tiers

things with additional company, you to of the ownership tiers buy get you so benefits levels additional can and want into like if And of that.

was year going other late transactions were significant during the the are primary, that most in When And we happened a taking we the had the price been sources. the advantage that the that basically into and those fact pulling what to of by of announced impacted in of early the take lower revenue some So that first was quarter, increase year. members resulted there think the in our price the year. the half about

we that miss referred really to the the all driver big that was So as of relates the to. quarter it other the products in

Patrick Scholes

So it sounds January in that like there was do pull did some revenue. forward -- looking? how in you February, and there is how How is that

Mike Hug

to it are We results guidance most the discuss at to XXXX. as obviously given that’s relates and We've unable we commit this our point can to.

Michael Brown

put take in QX. and people opportunity investments to meaning the about supply really to XXXX. seen per be. in year. And headwinds that to to Patrick place developing initiatives member, three and been of in made just obviously But we it it for QX add our demand key and in aggressive to per to the success new that begin initiatives to revenue when We've hold fulfill the initiatives some RCI made, will is They've where It's to effect at expect is increase request that. we've speed the signs quite systems to support vacation. of increasing this in ultimately those has revenue early of as team order take request wanted because And made really to to had throughout got on relates we member transactions occur. get We've it, back

has proactive, in as So of from benefits And started latter half see very going last we we through think some year. to that efforts the their the been teams XXXX. move we're

Patrick Scholes

And here. question then one last

doing it timeshare on on the to back. impact their business On helping loan loss recent your people initiatives Ardo giving understand changes Ardo from seen provision? new on what and that is perhaps any you Have

Michael Brown

site or is loss It's about provision education I'm not for and very first although, will and get that clear very Web very back accurate not advocacy, initiatives a other and to lead information effort, loan it's than owners great anything And supporting of needs that general importantly, to it developer, to will Ardo authorities represents to the way in and I we and be think directly it's more it through will also the to owners else industry the that. Ardo transparency their people effort. our correct, when protect opinion, about this care my not companies consumer on right, The a and advocacy business the about collect have place all, owner. and and of be ongoing of to and putting being it is we're should also to represent are can induced exit. it ultimately That regulatory be supportive it someone are the which consumer the supportive about to and the upfront transparent that not the to what so led that into fee. think right and an legislators exit is exit vacation, But taking community exit right of doesn't to opportunity time way to about who just ultimately

Operator

further questions. remarks. I'll And no it Michael we appear floor to for does Brown closing return have the

Michael Brown

Keith. Thank you. you, Thank

on close to momentum focused me strategic to the free results, our we execution found to XXXX. great pleased cash and Let the and excited saying how shareholders, into delivered we plans. about are with our just flow heading have are ways drive XXXX we remained of We by incremental return how results operational

long As to we deliver result, goals. a are term well-positioned our

team on vacation associates focused world say today. each delivering our day. More to on putting for on strong us thank joining every their hard Thank to have importantly, outstanding I experiences and value. work you delivering for want vacations, the you shareholder and great we a focus while

Operator

today's And conference conclude year and this full call. will earnings Wyndham fourth quarter Destinations XXXX

wonderful You your and day. lines, have disconnect may now a

Travel + Leisure (TNL) 26 Feb 192018 Q4 Earnings call transcript