TNL - Earnings call transcript Q1 2022

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Operator

Good morning, and welcome to the First Quarter 2022 Earnings Conference Call for Travel + Leisure Co. [Operator Instructions].

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

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

Christopher Agnew

Good you, morning. Thank Leo.

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

to remarks, to with to questions. forward Following that, will call Michael the responding your I'm to we these Brown. look pleased turn over And

Michael Brown

XXXX. Central hotels, strength of leisure driven XX% recovery has slowed in observe of the The not results, course, a here only April. month sharp began most and have is our high Thank Florida, in Call. million quarter $XXX first and have is March the our elevated and, apparent strong to per of This continued of the segment, Good volume levels. This record of continued all-time in to but notably through you, by theme Earnings readily and of adjusted evident Chris. The $X.XX. Vacation first the our demand midst is EBITDA through of adjusted that travel demand guest $X,XXX, an February. morning, First also morning, not when Leisure pleased parks Quarter quarter company in the recovery in travel you resorts. in and Ownership the beyond an strength welcome of April report above we are EPS our for in the further VPGs strengthened airport, Anecdotally,

the I'd We our increases. like expect moderate performance the as the this environment. inflationary the of mix and to context months owner in to new discuss tour travel in recovery current leisure summer

model. see basis hotel compelling That levels. say for inflation rates Rising me create as rental a to increase rates points of an for rising QX an in over home upfront, XXX and even close vacation in in has our compared resulted our Let we net more value XXXX sales customers. business positive proposition value

in timeshare. great see owners Our value

to mention first Creek not of clear, per amenities. is reasons spacious guest is value with The all compared one volume proposition the proximity Bonnet July this that stay close Contrast owners in X-night flagship a stay X example, Disney For hotel our Creek with high fee to Bonnet to is kitchen, XX% of living it currently $X,XXX, room in Creek's a condominium annual higher our during in Bonnet Orlando, to cost Resort approximately maintenance in where season of $X,XXX and a pay the XXXX. Wyndham at rooms X-bedroom resort and fees. including Club quarter

existing are owners the paid base their for off that a traveling and XX% just maintenance proposition. our is fee. our are of sole cost of have As realizing It not fully ownership reminder, value owner the their

QX owner XX% are owner of New In was also the than VPGs strong. VPG quarter, new first higher XXXX.

on regards VPGs Gen in were and as Hotels points sales with typically X% of of run new XX% XX% year-over-year were coming our affinity Blue higher to over from owner close XX% increased of mix Blue Thread transaction XXX XXXX new other partner, Resorts. owner Thread new volume and millennials. to owner owner just Xers VPGs basis XX% from demographics, up and in owner XX%, Wyndham sales to in rates than New QX, to to leads nearly new a higher With result XX% of XXXX.

primarily reinforces we to the On to is our costs fraction or the years associations small cost levels. balance reflected eager costs XXXX construction recognize decision at homeowners' labor occupancy a have with We expenses our costs cost our our increasing our of side, locked made and next are do but exposure in not those they the sheet. on currently tracking That inventory because do several our inflation borne to are by the resorts for rising, previously remainder which of is expected us. In for travel own exposure. owners XXXX, above are are the the end, demand are

coming Membership. per lower and first X%. Travel challenged recognized to in transaction increased quarter be as into to owner Revenue would growth that year industry-wide. due sales now the increased recover Turning RCI's We XX% new and transactions to enrollments year-over-year the continue

years growth the Key business launch which Our in has since Club generating run launch in at booking resulted adjusted Travel of in an of not lines revenue increase last offerings and a Membership strategic XXXX element and year-over-year exchange only business contribution rate the strong highest new members decisions our non-exchange several travel Clubs, to in of and non-exchange higher per in in growth the RCI the March RCI success expanded the significant rate double was offerings of at Travel increase Travel quarter transactions. growth the offsetting transactions growth saw EBITDA to are activation revenue the of last but end were the year-over-year and the Travel the expanded XX% supplement headwinds the the the of A quarter. the XX% these bookings platform. a enrollment to and XX% transaction at through year. due who over Membership incrementally was our from XX% with first

expanded with bookings. member momentum increased members RCI to regular benefits as driving continue, these and travel We expect from incremental additional creating engagement timeshare revenue supplement their the stays

outlook. our to Turning

$XXX positive focused quarter to million the laid We the nights Through on QX XX% of to point strategy last adjusted mentioned $XXX second in and a EBITDA on XXXX is products, averaging running value books seen which of year, of of adjusted million, I seeing end X% are demand. the is strength that The and in consumer out higher are length length on between ABC Reservation currently million. our full of our another stay than stay, higher expect the we $XXX for nights data XXXX. we this simple for for the million have of increase year, marked reason to Consumers $XXX ownership. EBITDA than yet on be our we continue is call. vacation

Travel we was First, at This apparent revenue want our global A, business. our to, accelerate growth in quarter. of in growth the the Clubs our

Membership Clubs to, strengthening apparent the Clubs, X products Second, of our clubs, lastly, with C, BXB in our activated and delivered progress want broaden apparent Travel our of of and quarter, portfolio XX% and create our this in VPG strength performance. we want B, And Travel first this and our at the the transactions. new total services. we of where, BXB and the Travel record And was cornerstone brands, was we depth to,

to to Hug. I more performance, on would hand like detail the call over Mike now For our

Michael Hug

good everyone. and Thanks, to Michael, morning

million total EBITDA As will adjusted adjusted million quarter rate cash balance well EPS. per of of color adjusted $XXX first first share sheet, adjusted EBITDA earnings on to The more and We be $X.XX of diluted as provide X on quarter liquidity $XXX company quarter ago. EPS effective $X.XX tax results. negatively and and our comments compared My year XX% discussing our this results, will I impacted reported position diluted adjusted our focused flow. of primarily of

for rate we XX% our full be to However, XX% effective expect year. the between tax and

in first a XX% representing $X,XXX to increases quarter segments and in We prior the XXX,XXX and year business XX% $XXX XX%, quarter, reported segment first the and of million, our first the the respectively, first performance Vacation of and increases XX%, XXXX. over Ownership $XXX million tours of in revenue over quarter. EBITDA of Turning of of respectively, VPG quarter. adjusted the X delivered

XXXX, due a was adjusted of was $XXX $XXX for quarter the originations business. operations. our quarter, continued first in our Revenue to during of prior sale for Travel of million as above loss the in segment and our the in The million and strong up $XXX result the quarter high-quality year American the performance Membership XX% quarter first in quarter and to rental portfolio XX% loan North continued marketing provision discipline the million in compared the first

of EBITDA in increases revenue over in of year. in the was and Michael As $XX increase adjusted resulting by the increase per revenue million, prior noted, both XX% transaction transactions an driven

Travel strength from the The benefited as first in well U.S. RCI as our in Clubs. for quarter growth

strong also to and results, operating addition are sheet with our capital In allocation. balance very we pleased

Our position is our million in cumulative us approximately Centennial allow of Atlanta. Downtown We inventory inventory of new years including inventory sheet, balance this with to XXXX. through of anticipate Park strong, inventory cash will spending $XXX on X resort reduced at our drive savings level from

in closed the continued terms are the the a interest market debt business XX% of everyone Even we this a market during an strength XX% During rate was of securitization we our of of demonstrates -- and our a transaction. in transaction of with that Appreciating the important rate. March X.XX%. of are out of average million rate XX a XXXX fixed we pleased advance $XXX quarter, volatility weighted it's and to rate remind model. with that time variability, as

against But that this third And point in every of to impact fourth expect interest which our one and we a some are to as demonstrate, annualize adjusted minimal inflation earnings. rates rising interest EBITDA be in help due expected basis quarters. provide close and expect impact the rates expected costs. to We is the increase XX VPGs are timing, results higher inflation, protection and because to to

more March to per incremental rates. on first at recently the interest increased quarter. associated an with And our For headwind activity increasing quarter capital we recommend Directors repurchase to XX. allocation, regards example, continuing VPG in of a we'll common than our share dividend of $X paid Board offset share Share per million stock. the in our second $X.XX $X.XX in dividend $XX In

our Board the million a in resiliency approved business increase. of our end of $XXX We March, and and of Directors of unused increasing continue capacity repurchases. $XXX confidence million share Our had recently our

the net shareholders free purposes are time, Over we range cash Our free cash capital through to flow leverage fall. driven flow at healthy as These of our corporate X.Xx at to XX% be conversion adjusted of to to see to our adjusted returns XXXX. from continues for the deleveraged Investor adjusted generation end strong range in quarter, and EBITDA this our expect XX% was growth to at ratio XX%. covenant by decline to Day of back out XX% EBITDA up last of laid historic move EBITDA, we and to

quarter, over quarter, strong to efficiency. we and The remaining our from quarter, first be about the around primarily expect loss The full for expectations the summarized incurred into recognized in related first In we to second in to VOI second the quarter. the the to in to second restructuring that majority demand Remember in XX% results the prior quarter. recognized the loan the million more sales close charges the our expenses second At quarter $XXX in detail and some million the me the of is of million be focused in prior organizational tough VPG be XXXX, flat the year below quarter, be quarter Travel for During $X,XXX. let comparable. to year, the in first growth which provide quarter, quarter. Having COVID related $XXX gross to second provision of expected first were with range initiatives, second enhancing shifted with second quarter a initiative $X on of charges expected the year.

billion, between $X.X As full year, Michael million expected and $XXX $X to are with adjusted billion the VPG be expecting around $X,XXX. mentioned, we're EBITDA for

tours. XX% With sales VPG new us anticipated peak percent in year. new the in the the the below in of a period, be blended half owner provision over for the new second Similarly, the mix VPGs increase full loss the interest of As sales increase sales loan portfolio but for of to the we This because our expect expect for mix well the of -- respect $XXX owner corporate in and down as increasing financed owner provision travel year. into the to of percentage to quarters a rather higher expense a as we focus impacted, the million strong to to return higher growing year. the financed, remaining lean be we summer through by net bringing

up, RCI and a see So value quarter and timeshare up continue our they strength our opportunities leisure of that, are to members that vacations, vacationing pleased continue our prove current with we capitalize the to appreciate value to for the to of as ability new our be the presented call to the the please owner. well and Leo, can travel you open the in wrap take questions? owners the With as results Both us. to on as market

Operator

Joe a take We'll Instructions]. [Operator question from of JPMorgan. Greff

Joseph Greff

do how Or timeshare rate And anticipate interest Or that? you environment. you Just you're higher that? doing talk Can financing? about on given you are how the about you doing about thinking thinking that? raising potentially are broadly

Michael Hug

and for Mike -- And that you those we increasing we've were obviously, When during we about as clear. Joe, again, loud talked value an to value the transactions. inflationary our about think question. all compared Thanks the see been this comes product charged how, and over is that on low know, our through the the But rates we've steadily consumers benefit in Hug. period, time. ABS

wouldn't lift VPG charge our large to payment, that and seeing. to when rate the close a affordable, monthly that we rates increase the the the the expect we're So I in the we at in look is that product you mind, consumer, the see key in especially keeping that

So have pressures that covers a pressures basis more interest lift on I spread mentioned, we on higher but million interest with a that once might increase. VPG associated $XX do or some have XX the again, some in point than $X

little term. are trying continued So in fees than thus, to interest interest payment more in membership important monthly the the a on income, customer acquisition RCI short more that of transaction upgrades and probably get the

Joseph Greff

follow-up is question capital. on my And Great.

in in of amount at meaningfully the anything to ratio decent rest of in buybacks significantly. first is guidance accelerate end fair it a have quarter? those in reduction things there what a you've sort in the and upped leverage March X and meaningful here? interpreting the leverage impede would in where EBITDA fairly still You obviously, natural of the acceleration buybacks that relation from that and, remaining and isolation Or acknowledging it authorization of Board a year is done the this in your Is

Michael Hug

we Yes. EBITDA, payment that other we in generation using capital for can would million to have our free that look When million pay $XXX better returns. at flow we cash dividends on we provide that after in XX% have a to year, and we that absent of leisure, our things do $XXX XX%

million is quarter we repurchases the you first if leverage. and cash So off back $XX flow spent free the increasing for our in share available,

Operator

next. Our

Unidentified Analyst

pulling of can deeper, Vacation you just these it of is into you are metric color can? proposition; best people in rates please. about XXX a being I'd that love just value heard engage and the as amount and a discussing ourselves bit indicated fair metrics, or that we versus please, on but levers up to, Ownership little the some X -- more you can you little basis go two, the of Michael, find And subjects a there, that just but points, one I -- one, capitalize close

Michael Brown

the model clear of in their your to same, is night benefit, that their who've getting apparent. in which value majority not creates rates that people ownership, Absolutely. it's is tough here is you it rooms about The if the hotel just value and that math industry current properties. And the consumer. on paid And hear and and they you get of demand. Florida. And great anecdotally the of continue And a hotel already rates, And be extremely the just number one in to mathematically, owners, we them, Orlando, always exact, find incredible, time given the to find different for it's our you every for reset value is they're do, it more XX% in the both vacation. things did the It's our are every hotel to more vast only expensive. example raises to

people -- midst look David, in when traveling how was the So to rose to the at the are pandemic, we market of drive XX%.

For to our consumers, XX%. already that's back gone of historical XX%, norms

both have we're My want in as see is year increases Our them close X% value most on this that owners and on relatively in And And stable, because now to apparent we for to, sales incredible that our value maybe rates see, when APR, the XX Because moving new it's on anecdotally fully important. that I? Mike the deciding X% are we we the is, the payables. people up, vacation's go to their and really are on to lifetime that both And years for." want hearing side. are owners enjoying owner APRs, paid so the this and pricing price, ownership, referred what's wouldn't "Why economically. XX to we to keep vacation

Unidentified Analyst

answer. helpful. Appreciate this and base for prior answer, it. what with us Specificity prior would you But interest or also headed have given will caller's be by x rates and the your have the securitizing in And you're my y? move APR, XXX you any think I there when market may direction follow-up,

Michael Hug

Yes.

So move million in basis a results point $X about impact. XX EBITDA

very significant talked A in obviously, we've have that and more the driven strongly, lift that that the those than it issuance quarter. So close about. third are close will through and, truth, covers fourth you've because, that VPG not VPGs in the $XX we rates after really lessening come be by seen

can what Keep rate, XX% it monitor ignoring just rate. control those the as of costs. corporate interest the debt mind, debt, once is ABS, in far can So at and we'll as we if you obviously, again, to look the we do fixed our

but importantly, against we seeing. we And those closely, the provide us VPGs something at more look love that. protection So some that we're quality

Operator

Patrick question of our take Securities. Truist We'll Scholes next from

Charles Scholes

you're Clubs. EBITDA tracking My and BXC Travel XX% annually you are questions in growth fall, to of expectations? pertain some Do the you line? and think your to specifically those of Day, revenue from to XXXX expectations, Last BXB XX% adjusted to out XX% How XX% versus long-term at you laid XXXX. today growth Investor

Michael Brown

both subscriptions X continued start of to of as we've BXC, from convert be with we've more confident and say and quarter, increasingly percentages Patrick, only in especially transactions, business key economic clubs and we do. September of the that, points reason contracts, pipeline to BXB that to elements I'm proof out more need see those clubs new last to the specific, those but I and activated the of once has And that, underlying we usage. last actual evolved model both September, Day. you to the in is move from the for the to we and on launched That business of not amounts laid lines, it's been as more happening that starting that Then the business end, the is indicated first and projections. we move there, that, the beginning the deals that that, we're Investor conversion to on pipeline to the

with progress it the bit would even that line, a to confident and yes, that, pleased say, and relates ahead group team is maybe I BXB the So as I'm doing. in

relates it to As the BXC.

BXB call, just of behind on side we launch shared that calendar X the about is and last the in to launch operation due the the months launch when I things. As

see in member the the are acquisition. We it to gain relates lot first have months and traction as a X to learned starting

side to as not as come the anything a So we're the confident show to if touch But of again, far say, the look points after maybe into that will I on the side. then say, feel I in that probably side. And better, as as material XXXX, would start economic we'll you BXB our on remainder BXC direction. would proof economic line, I

Charles Scholes

on I fairly Can question. that? in recently. into follow-up was a there saw just change that the business go some segment executive the leadership And of behind just you Okay. rationale the

Michael Brown

confident Absolutely. the X which Any to time new businesses. you launch confident not we're in is shared, that in new launching, businesses have be businesses, really that just what we both those we're only of you

open the how business And both kept what reality feel a that We is the the businesses. that launch create And to opportunity the that positioned when way was we going the BXC best development to work side, and duplicative change those we is, as had X technology to X And and execute efficient learnings to what well therefore, BXB is lot execute learning be a of and also and of duplicative I more have these lot to as be were believe to open and the of we effective really possible. we're the more a we there efforts, to and marketing segregated. that and combine take realization on efficiently to them and strategies. platforms made businesses were a execute them are great

Operator

next Oppenheimer. Ian Zaffino take We'll question our from of

Ian Zaffino

a driving And drove this us you quarter Thanks that? maybe guidance segment. give for per maybe Revenues color. up and the bit were the Travel I if consumer transaction Is product? Good us just better. dig Can What little substantially. and little wanted is into could. give feeling here. about deeper additional effectively what you it an a the example, to all Is just Membership that?

Michael Hug

Two things driving that.

the booking all, that's First available we expected, start to to affiliates, at we Solutions see Club our more of out seeing them Travel transactions Investor RCI as to Panorama just made big their associations, the exchange, and And of basically been one as lift. beyond the out our more and we of additional product the Panorama the members, lift. as laid we've Day, of timeshare Travel Solutions drivers roll then we're we

Realtors Association Alumni So transact. the to enrolled you see NFL We Association. National start the

in margins what that, the as product we affiliates, the that's growth just of more Keep We it's expect going plan And more our So transactions. love EBITDA consumers, it the to natural is remainder the EBITDA present a to that we year transaction it out drivers see roll will it's on same happen we progression through transaction. Club continue pressures the Travel future margin of Clubs. couldn't because happier as Travel do to we a RCI and one on our that. I lift we're some because we in growth, the of key out those an lift you mind that to don't to we way would the say brings. transactions the are I performing. be the in appreciate run change But the with recognizing of And businesses were very pleased with

Ian Zaffino

side. as also acquisition a are inventory, then approaching environment? pricing? you but availability, And far know land property as guys seeing you are it good how as And on follow-up And are you I relatively sort what of Good. and this in

Michael Hug

Yes.

the the why moving sheet, that the on cash had are bunch a to. But in that's -- which pricing have our already with obviously, acquisition agreed inventory. of to we'll I years happy have very our There's that business. think, we and have and of the have flow be sheet. there. already balance And of in us, up purchased. because that's inventory our several future when balance what we're we've the confident And our inventory in on as Travel great we and Clubs pressure sell the we sheet, to the we reduced spending. free acquiring of the fixed the as deals cash need is out as what grows, out free conversion little we the for as inventory we a majority We're flow sheet have go that the over definitely balance costs far then better any the strong been balance on And you conversion ability inventory for mentioned, on nature is we're EBITDA cash buy next obviously, flows look to very don't due our capital-light because, and

that there, we that the out are there's couple opportunities So like locked price the the fixed costs or we'll over in fact but balance our years. next deliver contracts through of sheet on

Operator

Stephen take question Goldman next from our We'll Grambling Sachs. of

Stephen Grambling

back existing just is, the rates, people were change any tours? question, close what get rate of said of the I in And like new you Are you to David's And new think, for make owners. in I demographics? and you a coming to cohort market are maybe peel does a I'm which, really both I onion close new would cohort this at seeing rebuild guess, more and up to you this trying bit across you seeing converting? customer to kind rethink on as

Michael Brown

be that Demographically, Stephen, change thought FICO change thought minimum is the score made see seeing a the X the is really, tours. that we're elevate made we due increased I think mix major we've we would components to perform we the our strategic to at our for marketing What is What that we due fuel we table. lift additional to a and the environment is inflationary even VPG sales FICOs. the to of the since lift in learned that ability to VPG adding would

rates opposed as to above As close higher coming mentioned is higher transactions. average that's I through and our

into makes apparent. team refueling really sales a buying get, better gives Xers to and And life you get that is a drive value an note cycle bit new for feel I the that new in head to and to where upgrade XX% that business of owners in demographic the to are it's opportunity put that and I and in demographically, tours the confident going we little important margins. And Gen either also me ownership that say, model. or So younger think the mix really continues our that result continues millennials. to not that owners, invest front are you're as that which to quality of summer beautiful would this this to speak but only is us of readily is

Stephen Grambling

Maybe as a follow up.

One pushbacks, the being down. big kind is of on typically the hear consistently owner I of guess, VOI growth we

just is or seeing actually kind the new on parse attrition owners focus flat this versus And total the could growth line? we just what to adds? seeing, owner gross the trends way any Given from you're out see you're there and number of net of

Michael Brown

Yes.

keep So shocks sort that the COVID X there's years, came mind COVID. defaults. And X the higher of system. with been in to one last is Number

member the X flatlined. owner over growing I very our to year X to mix, we XXXX and definitely That's as above back the our new because years grow strengthened XX%. continue expect the not So this XX% has for into over really toward XX% working count has move remainder owner to We're think be important to get and our committed very we that of last to the start done base. we've decreased work

see performance. forward, our to fully And count move expect. grow can again, you member our like begin in we to that You as portfolio see would and we

Operator

We'll Suisse. take of question next Credit our

Benjamin Chaiken

a clarification. Just quick

outperformance was club, non-exchange basically, I us were new Membership the think signing like saying Travel this this? transactions. the of Is you example? the, Can to T+L you members RCI use an give and booking example membership that RCI for members essentially up

Michael Hug

the is Thanks Hug. Mike for question. this Ben,

the first margins first is have Omicron well comp this were And second So the quarter very look second to X exchanges that as see. this we year, in quarter, quarter saw But which obviously, When tough from QX. last at getting helps we transactions but the in those booked to to first the we of year. Clubs, exchange quarter a pleased the the why Travel which the we pushed RCI things. business year, quarter, also

as Panoramic continue they to non-exchange And for transactions to continued of that, out that hotels in to our system. as of do value Travel growth continue access XXX,XXX growth through the and roll majority transactions, have the see in the relates do to it those see the they the ability RCI we in we members, Solutions the As that.

a but from just their great with retention that's in So additional RCI it it's also transaction terms of membership RCI. great because standpoint, member value brings to

was on goes we quarter booked of for Travel for grow. the members. So to transactions both and once back by And to again, the expect that great Clubs, the non-exchange exchange value why the first their the RCI, side

Benjamin Chaiken

lower were historical. side think than you'd obviously, margin? business, -- any that on the The Is just in Got anything it. there VOI about on that margins we Just were And That's XQ? was it parts out was VOI there call should seasonality? great. that the helpful. there moving then of cost side the EBITDA provision on impacting Is the VPGs

Michael Hug

Yes.

year. we've the do time busy of up the season. the resources frame, new owner As March summer through get marketing, mentioned, headcount to first we the transaction mix making about, remainder over it's into that on the as hope Michael XX% we to quarter, through when start the kind had -- levels of of talked And and decisions

and so we did and decisions we and to that busy some sales that make go hiring personnel start marketing season. ahead we're go So for in summer ready

standpoint. quarter quarter VOI sales first our a volume The is from lowest

put some owners because decision we to leisure and us pressures So of system. business on market the But travel allows margins. it get that it take new advantage right did think into continue the was strong to the

Michael Brown

of uniquely our billion Benjamin, with because -- let are level-set $X the on billion. down think and is size we for where just under And the me from the today, pre-COVID portfolio portfolio over just to I -- $X just we call everyone

obviously with you income. that portfolio really comes high margins net If on equalize interest the

And the Mike's actually Our in headwind up Omicron new in is that despite QX in to and began to we invest owner that channel margin point summertime. January. that this point for

versus continue the second quarter, we that expect half outperformance to for the rate So into latter year. the I'd XXXX of for that

Benjamin Chaiken

there Is there something is XQ changed helpful. Very Is it. way Appreciate seasonally? Or drag to as it any similar a in that? quantify well?

Michael Hug

to No. long-term the again, QX, right our business in Once decision. which see investment expect we We the would in made QX. was go up margins

and we So those us sales marketing to which costs. leverage more sales, into should those more get tours QX, generate allows and people as

Michael Brown

you is the And in QX. hit we and move mid-XXs up we move margins historically, your into as cadence to the absolutely get in the QX. it to expect QX And as

Operator

Woronka [Operator our question next take Bank. Instructions]. We'll Deutsche Chris of from

Chris Woronka

VOI talk was question segments. little margin of the hoping the was, First your longer-term thoughts I we on maybe could a potential bit about

year, are sounds like So it your you're because beyond getting up. close going rates this

[Indiscernible] set trying next up, it. well it think like and be for charge might while you're several to level years. on rentals pretty costs going can so things more like about the You for and inventory, your that. unit And also just sounds

are where those about they thinking how track X from X, could just years really, today. So X, margins

Michael Brown

total So Chris, little then on margins. let me question just answer a broaden and it your bit let me

the become one was all right taken we marketing concluded to margins. ownership and puzzle approach made pieces correctly. decisions our of And vacation the on strategic You've changing the on more and efficient side drive

pleased it time. see we're performing that as performance, portfolio well has very some quite in and mentioned, As we with as the

as time to will as we ownership coming And we'll predictable already off margins. through of products very that enjoy on, commitments of we sales our again a the those moves cost months in improve visible cost back to the come XX would lower and move start next continue get be margins sheet. and to expect, our So balance we've see up, made, vacation that

this relates see to nature the outcome looking is single lower increase a our segment, Travel therefore, element mid-single the another. As the of be to business, of high from to But of come to is all the our the those important cash you X with in amount that rates equivalent an business. But with shareholders. digits, growth it net offset on does obviously, and to Membership we're return and should one to that digits margin of begin growth total, able for

that individual that's to EBITDA pieces the up to driving cash So more more flow ultimately link shareholders. and

Chris Woronka

or of -- seeing lot top-heavy your was, you're whether some better centers, as whether performers, of increased your your then And to deliver Okay. folks up in? coming the kind any just curious of salesman, conversely, at And interest turnover helpful. can outperformance. sales Very a they top-rated new among are you in a seeing follow I'm

Michael Brown

therefore, summer. And back And great. rush paid be rates. to what's proving are are the people to mass labor And these that's all of think, it's of and we've the as very, they reps going and I reality very but think that we off. business, our steadily But performers. fortunately, they're higher environment clients, the And they're was, a this the into very, steadily we close shortage. the it And busy not about of top very are best seeing business into was moved we don't system is a people representatives Chris, the of is a to increasing and It's intentional. centers in bringing time some our benefits But the turnover. is, a enjoying and the market invariably training in of we want sales more flow, it people. and effectively more increase to today labor did it, with tour do that spend happening and hiring lot -- you And moment difficult Well, and macro energy just a that's the really top market our labor just at highest-performing your working a ton some overload of part of difficult approach. at you of want in strategy, what's our

people So letting it's the in we for for and more investing great about generating them performance they're have the and company the enjoy themselves.

Operator

Brown concludes Thank Travel closing remarks. Q&A. for to the + like now back you. quarter call Michael That would Leisure's turn first to over I

Michael Brown

Leo. Thanks,

services remain accelerate broadening growth I thank and deliver momentum strong for in strength the focused put the our our deliver vacations clear stakeholders we and owners, products hard-working Once core associates our who to that by and vacation. of on members as each of on day. would strategy every thousands and creating to into for our like world our business again, guests we continue We XXXX, our our great

over again on Thanks weeks, today, We will have you great a your and in be and to next the lot for see person. the day. we a time hope X road

Operator

Thank question-and-answer our as conference. concludes as you. That our period well

and day. disconnect have your You may now at this wonderful a line time,

Travel + Leisure (TNL) 1 May 222022 Q1 Earnings call transcript