TNL - Earnings call transcript Q2 2022

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Operator

Good morning, and welcome to the Second Quarter 2022 Earnings Conference Call for Travel + Leisure Co. After the speakers' remarks, there will be a question-and-answer period. [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. you. Thank like call now Agnew. to turn to would over the Chris I go Please ahead.

Chris Agnew

morning. Emma. Thanks, Good

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

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

Michael Brown

of morning, EBITDA Good $XXX are call. This million pleased our adjusted and morning, Chris. you, adjusted second and Thank of we highlighted results, to to welcome quarter $X.XX. by earnings report EPS strong

and inflationary quarter during value The of volume underscores the second increasing owners results demand line strength receive Our model delivered headlines. reflect bottom environment. leisure they an timeshare in business their our we value in per strength record top travel ownership see and and our the despite the macroeconomic guest the continued in

demand recognize year is travel of XX We margin EBITDA an top quarter XX.X%, beyond mind for the last everyone. second half demand points through the over adjusted and robust our sentiment the Our We travel see second leisure of results, basis over end quarter ownership XXXX. of that same XQ continued of XX basis the and improvement vacation points of was year.

are have XXXX from would is year length arrivals at for rest West I half pace June. above of X% for note, the XXXX. XXXX nights year. nights consumer to are we from XXX booking the days regions latest the March an with windows Our behavior. booking XX% for in the number South, I days second in already of the also XXX XX% in the quarter. drive-to reflect of and There in earlier The second nearly X have books room the levels, XX% share stay, has average points of on half been will increase increase an room year days most Coast that in this data a and due the modestly decreased demand second by to to international are the RCI while the lagging. and Hawaii, Southwest in travel

sentiment. These remains the consumer growing we monitor our the understand of Lastly, to are points data again. a and portfolio strong is latest few

there see, no in significant trends. is can you changes As

As such, in of performance strength value. the our realized and founded appreciation we their continued is believe consumers'

have As for their outstanding XX% traveling the loan our a price fee. are no of and maintenance reminder, of owners

in quarter of our of XXX with performance continued pleased to guidance. gives of resorts within Our is diverse distance reflected second population flexibility driving U.S. Transitioning portfolio business, results, and miles our of our that were resorts. forward we maximum with one XX% the strength owners the to the

and both VPGs. consecutive For year-over-year owner the volume record quarter, and achieved second strong in new per guest. At $X,XXX, we sequential saw we owner growth

XX%. mix XX% channel higher performance grew occurred Early points new VPG while July we owner signs continuing. XX% was quarter transaction to in Second that acquisition XXXX our customer VPGs than strength each also in XXX This VPG higher is and than XXXX. show basis by

sales new and VPGs our owner notably and most Blue owner gives a were segment XX% new growth new and new represent second run higher XX% are of now us than ownership resonating pipeline. In months, double we A our to historically of quarter, approximately percentage Thread. value mix millennials, expect of of younger underscores owner new owner affinity sales, of sales. XXXX. confidence in August sales XX% modest our of Blue July the VPG is the Thread vacation sales, key generation Gen-Xers future owner upgrade pullback that over which that with the higher Given new is owner non-affinity which and nearly due VPGs in to is the QX

sales, are we sales In percentage addition on owner driving financed. increasing of the focused new to

successful have percent that prior second from year. the We been approximately sales In increased on quarter, front. financed the XX% of XX% the in to

continue an to hotel will value to of expect basis positive our rental in We proposition borrowing above XXX raising our as FICO score model a are reason levels. rates points compelling while our vacation track The resonate continues ownership new is to this business I income create originations vacation more grow this quickly and customers. even XXXX point higher the our We we and XXX out second for quarter. see proposition interest on more value as high-margin costs. rising net stream why and to close rates for inflation doing offset about home the average net

subscription X% and Revenue X% for quarter first revenue In X% now Membership year. Travel and second declined exchange the transaction Turning the declined the half engagement increased year. second of per performance X% is to and improve member the X%. member segment. in business. the finished of continues revenue up to the the first higher pleased and months, we our of months than six revenue last with Through six quarter, are Overall,

quarter into the on the exchange the in quarter second and to highlighted year. a shift had comp the in due second we call, COVID-related difficult As first quarter prior a demand

Clubs. Turning our Travel to

added steam this and of more Travel year continues even QX. come QX Our more clubs and and ahead. online We clubs QX we have in XXXX come will in and new expected late in of are quarter. for Many transactions several online membership announced Club QX affiliation in the pipeline this in nine to

transactions the quarter year. to end of the ramp expect current We the through the of towards end

One our between of and under is the that clients goal ability six that resonates affiliate three with months travel benefits months is the months. plan The their our takes to and get of our platform to to original customize customization to needs. four

targeting. at are X% we the already is expectation Our earliest transaction clubs an of to size the average $XXX within activation meeting range are some our and of X%

more clubs The that a in the platform but to early all value do and proof points We get robust range, proposition work show strong. is to the is have promising future.

drive so heavily is focus have come each the by transactions clubs online to more those biggest We just of single intend new will engaging to do or to months. that upcoming our Now to the do so to clubs in members. market their

to our Turning outlook.

quarter are or capital EBITDA $XXX while adjusted are to We we deployment. EBITDA million grow flow for $XXX and raising to guidance We're to invest adjusted expect we cash million, And to opportunities constantly to to between committed our looking disciplined describe, this the our full-year of shareholders. will of $XXX million Mike third expect to business, approximately million. $XXX million excess buybacks been year XX% portion capital at and market a our $XXX $XXX Between have we to we to cap returning to shareholders midpoint. healthy of million as dividends, also return

our may resiliency of are implemented of macro the improvements we strategic for We are us and to outlook combination have the of the the that and cognizant uncertainty emerge the we believe that ahead confident well meet position cornerstone our for challenges we but in economy, the the year. remainder of businesses

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

Mike Hug

Thanks, Michael, everyone. and good morning to

discussing liquidity color our as well second As results, will quarter flow. provide I position sheet, and our balance on more cash

on comments and to basis. my company reflect non-GAAP reconciliations. adjusted cash to EPS the our of and one on EPS reported million of quarter per EBITDA, million EBITDA $XXX We website $XXX and flow earnings our share EBITDA second total in ago. of compared tables $X.XX, for see earnings in Please diluted release year $X.XX All a

Vacation our $XXX segments and of second XX% increases second respectively of at of XXXX. million, $XXX the two the of revenue quarter, XX% segment reported over EBITDA performance in and quarter Looking business Ownership million the in

Excluding increased of the VPG and have the would delivered we $XX year-over-year. million XX% EBITDA increases release, a prior from year. the of respectively the XX% year COVID reserve In over quarter, tours prior and second benefit $X,XXX XXX,XXX XX% representing

for coming Travel million to line though, sales for portfolio in million in starting XXX July provision the was to Membership see to quarter XXXX, our XX%. above we Travel $XXX With FICOs delinquency, financed than second end. of our even business. for year. the loan the the changes North growth largest was we better in percent was $XX growth. in is minimum FICOs FICO in XXX individuals lower million in from are above prior we portfolio. drive with to prior $XX mind, XXXX Keep greater in with $XXX increase increase and segment of in in portfolio to million, saw results into of news are the increase the The our removing our to expectations quarter, sales with the the regards increased portfolio, In compared respect same quarter we loss and of sale million percentage rental compared the bands after Revenue the in achieving The slight delinquency to of represent million that and year EBITDA at implemented portfolio $XX at $XXX FICO Membership the a of American higher financed we the XXX. the two-thirds

sheet common even our oversubscribed, million of strong the In is very a share had a strength rate interest volatility. common closed rate times stock. quarter year, business which July, for and $XX a X.X of ABS of X.X%. regards $XXX half In the our million were and encouraged model our transaction million. capital to expected and million X.X rates, the we repurchased demand of nearly second as we increase advance shareholders. in offering second time an have of was the are we the $XXX of dividend In with in to paid of operating on addition shares a market to In the we XX XX% balance on reinforces we year, capital results, this transaction per during this of returning strong, We weighted June allocation, stock acquired strength of and $X.XX by first average of we

million And Board share per generation. $X.XX EBITDA flow of XXXX, return to recommend in repurchase program. back upcoming to of cash flow range for We $XXX capital is healthy remaining strong driven under to meeting, Board conversion third by dividend approved our the At our cash to from to free our we we of The shareholders at our will XX% Directors have our share be historic continue continue free expect XX%. our quarter.

we to Our to between efforts to covenant provision the loss of million, quality net second third It for to to XX% is expected our half expectations of The note quarter a gross quarter with quarter, a times new quarter, VPG be delever for through in rather through that point below of is this our for the approximately but at increase for third me XX% XX% $XXX end is expected on owner the and mix. the the let consistent increase about be a sales strategic $X,XXX more expected important to range with year, made in and provision in decisions the to the portfolio and driven us higher over and One by corporate our continuing financed million second Having third we guidance. quarter. purchases which last was loan expect a the In the prior to $XXX is year, $X,XXX. sales full-year. to to the to provide return sales strong EBITDA growing third VOI quarter quarter and be detail expect continue the not our growth. issue, leverage of X.X summarized in ratio the some increase prior by percentage XX.X% third

the We we high XX% expect XX% to for full-year. will the range the at be the of tax end anticipate rate

generation, ranging the please revenue margins are of million of billion sales With allows the between up $X.X mid-XXs which between adjusted to $XXX Michael can VPG the and $X,XXX. in cash shareholder our Gross recurring billion to model value. strong from strength that, quarter expecting call as and by open our EBITDA strong leisure free EBITDA take you summary, full-year, travel be and VOI questions? Emma, evidenced flow the for second mentioned, As million. and drive $XXX us expected $X,XXX business to resilient $X results the streams, reflect to with we're In

Operator

take [Operator with Instructions]. question And JPMorgan. we from our Greff will Joe first

Joe Greff

mentioned in geographically what's XQ West sort comparison what was I Michael, of data of VO, there. talked you points commentary. your about and of international And XQ going in anticipating going comments, then your And you're as relegated talk drive-to you a as those lagging, what's I to the underperforming. Can what's on issue? versus you comments geography sort a you lagging. within I the to a on year-over-year in whether Can just outperforming and prepared to what's fly-to think that's about here And comments. that's U.S. sort understand And talk Western region think regionally well? then I in mentioned you see that

Michael Brown

there's Actually, points absolutely. there. a Yes, few

Let the nothing the And far of leisure share I was changing that to points. the is leisure one of It with there changing. as travel changes point because that tried lot start show strength what's significant is actually virtually commentary in a weakening, as continued me in why and broader marketplace in travel. are the behaviors today data what's the is not all to

with demand. international the forward a and do those to this International, half any surprise. the of restrictions continue it data -- year. and Vegas, the marginal. But moment. the for this pick It's year. VO there's very, And It's the as a we and The of could they're of sort remainder where West how due Washington well? individual X, talking laggard, lot California, remaining think X which Las The well the incredible our lingering the more headlines. we As anything, year. regions, I easily as Oregon. question travel at far of half of as those demand expected as two relates Coast this how are to points And up our That's it's if the any than second Florida, occupancy, combination percentage strong of of we're occupancies second of are doing I well travel for is Texas was of that's in a states points complications. clear Southwest But sales to of operations, Sunbelt bookings don't air very U.S., are Central there -- extremely sort actually for move

Joe Greff

seeing question marketing? market my you is airfares, trade VO guess to fly-to encouraging I that on drive-to Yes. given you behavior higher modifying extent anticipating are a or a are And maybe your what to from consumers market?

Michael Brown

Yes.

a So few that. -- so elements to

XX%. high at water got mark during our First the COVID, over to of drive-tos all,

this So from to move XX%. XX%

broad relatively reality spectrum the not bit amount has resorts. bit a to summer of get our really We're resorts that with simply short little do a to and drive a a a U.S. can having think time, drive-to XX% resort with drive air The complications. four-hour of of America, to sort demand I is to with little in travel such to time. that of across North do

being putting car, vacation So getting your consumers is in shifting It's result think and ease leaving which all hours it's but what the airports are the experiencing, on that, not we're an four to of And your margin. of lines front is on which sort it's resort to in naturally getting and a dramatic. door. travel, in longer of I of your groceries and within

Joe Greff

half there's segment. comparability question a How your Great. the you Membership as here? is away of expenses? some that guidance? those you know issue then first you year-over-year the in that I you do in expenses business, terms segment costs quarter, go that to second in to your Travel to implied membership answer this grow look from segment half there, see that business me. results go and Then final well. full-year What's one you revenues is in if expenses you the second and Travel grew and that mentioned And is highlighting but my as driving on highlighted those away? then my And Do anticipate incremental and are expenses not growth it? as is And that's expenses marketing staffing to nature. don't yes, the Do year? one-time a next for at business. to all launch one-time build last related what's Or Club They and really

Michael Brown

Joe. thanks, Well, Yes.

And is, let's it And growth future believe segment. second this the and an in think segment. Membership Travel get for the half not important I'd expect component. of level down to high-single-digits Travel year years, continued then drill pull to that's absolutely the Membership and can growth the we just I and I out in of in top us

us shift the to to grow years continued year our ramping of we rate will this we the to X%, historical we're attract the only began in and with but mid-single-digits in acceleration affiliates growing a to hope think going I be not now and transactions, growth this keep drivers for at full-year for talking call I in rate X% looking a about the EBITDA Travel and growth we you're And year segment everyone look you mind, mid-single-digits the overall and those about at only when decade. at the our of growth; coming of last X% from going now in Membership to them at that think be we're now talked can at beyond. XXXX, the X% Joe, acceleration being online on be remember, ability mid-single-digits. really strategic growth the middle this year come we and and And confident

that thing And affiliates. now be more of proud of we point exactly filled are of we our is is wanted team plan, pipeline up that way couldn't signed is that to direction and the that in which I transactions in So we and our already think the get in our up the the strategically, means they to heading this core driving against we where competency, sign continue executing people QX. just will to.

business about and this year. we've excited first really really I'm the months So this six about excited the of progress for made

Mike Hug

business, that thing we exchange far you the only the success new And business. really, more having on driving but if owners, as add the that across look is piece as industry, other one mix. increasing are Not of would great I everybody new owner RCI

the is members a that's on the to brings not over thing sales. across which lack great as because of incremental of for been entire couple the new So growth there owner industry because RCI, last owners, of owner industry had see obviously, years, new the

So driving but very owners our members. those as additional pleased not also and other only what as do the watching RCI far with results, companies closely new

Operator

Our with Jefferies. from Katz question comes next David

Michael Brown

Hi, David.

David Katz

Hi, morning, for Good including everyone. good Thanks. morning. me. Thanks

group, arms First or perspectives we're I I be any early year? speak can respect what think share question to anything is. I this for context anything data is, end the I would that yes, share But you broad with to respect to with next or mean; a T&L trying can probably later helpful. get and our economic points around to it's you Obviously, year super think

Michael Brown

go And let little a data sprinkled on Yes, of points, in few -- absolutely. few me some deeper a I those. a but

is we on those nights we nights I'll of that second our First -- had and XX% what the half share of a and books. room in XXXX, for of XXXX we room the on have more of want books year, XX% that we reiterate mentioned of a sorry, -- already we XX% in room of few then the I just point nights to all,

an that's issue. say, fine. decelerates, So But booking well, if got pace you you

to of we are XXXX that Our not of of for night confidence And very well of volatile, as the this this evening. went level our owner translate their booking is cancellation brought the not until year XXXX into consistently consistently arrival higher our home in because last arrivals us I any is to to on a means in of which stay expectations happening year. weakening up is for that latter at would cancellation of year. arrivals it half when forward-looking maybe half mean lot of lot last levels length on and the is And our with signs most COVID historical and we I'll of we low showing rates have cancellation second there. any are are says XX% gaining second has due consumer pace the at been we not signs a volatility the I as to comparison as nights then uncertainty room confidence. levels, as really far through sales of VOI we metric rates, The seeing that around of fact relates projected the our give showing resorts rates. this half the vacation consistent, And it X%

David Katz

forward talk give Perfect. those next? -- we if move year in and you Okay. early And just some scenarios might we to us volatility color about about the might this expect new in could what a fee-based as of of and later kind range businesses how you

Michael Brown

Absolutely.

will happen. yes, The it Is clearly, nine easy allowing to that it is means So the the answer key the for the demand to variables travel we the platform. value? when second was The more around customization quarter, what much the have level use? and as doing there really are I expect level say quarter, at Is some volatility the over in going in I look product we is, four there. travel and say does the a a create with, The and drive But question we demand intuitive? on of they're businesses year we're how concern to contracted it we for of is of third to mentioned, getting deliver. launched affiliates we would is get that feedback we're decreasing that it these actual ago, of platform would we

already early but that the of clubs the we're these get to in a we into propensity to X%. the of The can range expected. getting We're second is, very we memberships number question game, X%

we're one. about that feeling So good

will we variable be, above. most the slightly transaction is third The is transaction. us that's to what average one not size be? to It's exactly the drive the for expected if and piece what critical The individual last

wouldn't the be second this variable is to we'll as full most we to individual me, of progress I within even half it year, affiliates. watching that call So in volatility. our closely say the ramp would transactions these I ability

Operator

Our Patrick next with Securities. question from Truist comes Scholes

Patrick Scholes

Good first you morning. Michael, question here. for

VPG the just demand inflation that On you think mix in how and about going the pricing of on up, by economic much perhaps inflation and range driven power of is how that real do and higher better rates? just product general also driving there costs closing versus

Michael Brown

I combination it. of all a of Well, think it's

close business, our think reflection credit of biggest the ability benefit the of clear basis XXX to margins points, rates up is me and to I overall is driver by moving efficiency which and the that raise a in quality a second which which at very been our portfolio, our our clip. as of leaves good getting again successful to mentioned, portfolio us ability the we remainder really quarter grow the we've the growing to

So Investor expectations when in to where of went significant the back that sort which from $X,XXX time. was September last at we year, Day we out were of laid increase of we a VPG,

actually on to this it moderation owners, increased consumer from that bit. July. portion mix, is it I year. year, it's VPG a and we're only we're we performance I'd pent-up drive rates. a new been as even prices has say primarily, aspect. due and this continuing in And the that almost continues we're in that twice no weakness there relates into continues close to driven see But it's and and July, QX demand, think think the -- little We've further through VPG will just bring been to that's I back we'll than and It seeing expected

that So mentioned, it, rates. and there's the see a sees consumer not little lot think the that, benefit, bit as I translates back inflationary of a close significant. of they I to pricing in And value

So that's at VPG the look I'd rise. how

Patrick Scholes

loan securitization. most the that? you percentage you And for on you of recent rates then D to notes. Mike, Class Thank follow-up your thorough C the a Thank for is And a fashion, what that timely existing in customers pay any the question change related in what's those driving their that question I a discuss the Okay. saw especially now, within dropped. answer. -- portfolios you. related. propensity Of advance existing and portfolios, the on Can notes

Mike Hug

Yes. Thanks for the question.

like excess only that the reason that the to means even though was transaction, there's ABS the there's went triggers We've a advance down rates is rate higher interest the our And because had higher. provide the in rate, On or what because less or protection defaults never designed as any always any to have paid cash structure. that noteholders, notes that. anything interest

interest, the wasn't provide issue our performance we're as cash the just with excess portfolio. it So in It that more was paying less fact to protection.

but So advance rate strong that you XX%. make still rate, advance that up for excess cash by a dropping

point as additional price. out issue just a far as is would the The thing temporary cash I that's other

dollar noteholders, when rather $XX a we now pay the to $XX than collect noteholders. So principal the paying we to

$XX, throughout were they to there summer would were was X.X times, us. say cash We some in love that transactions at come will it which oversubscribed ABS the the can market great. mentioned We but back So that be times multiple execution was oversubscribed. definitely that to

we the just this volatility capacity to We if expected not it we or are skip to by to conduit to high we flexibility So third in our us don't thing want do it make higher like was whether one or And done great execution. rates. think the the one for the the getting us does decision a it the in rates gives that too all on the interest other ABS got We've year. market. one the

execution flexibility. great but -- was it really it So gives great also us

look it As say, curious know of something give back domestically, we is as sub strength I'll a FICOs. our is They end this at at about at is be with represent billion domestic the as years company. my relates I of or with was portfolio. portfolio the would we right If million. stats $X.X our prove and as than When just it to only the it's of portfolio, and about sub I $X.X and today, as few XX%. look XXX it far billion $XXX $X.X far can't XX% the December stronger the strength to below to now portfolio any of everybody portfolio, are you very June And XXXX, FICOs XX the billion the compared where at the current XXX

means decline June, XXXX we sub at weighted Currently, of of XXX as X.X%. December of delinquency loan as months, it's XX FICOs. the The average it's was When a delinquency, at there XX in huge end So only was XXXX. far end X.X%, back the months which of in the the to as XX% of when feel far look age at their keep is halfway compares in they the value on paying. your it, well currently, the reason you're That also equity that in part have but we product, XXXX. see they that, ownership. through equity might you as equity And back that XX% as

receiving support move of we a the to think down all at marketing lot at think because far as of individuals that times as been. fact at. So I about, I were the as a is start and XXX that FICO. our like And point, with at we to sub questions things pleased And were government of and that strategic decision start some got those it's ahead just might to minimum ever agree shouldn't proves Very you where go lot we're that. as portfolio performance strong hey, stay XXXs. the There

start keeping quarter to in the performance the normalize I point the had We in we're prepared sales due are our of quality there out, even for a did XX% our originations issue would some quarter, FICO which last because we consistent bands with provision quarter commitment That where very how is, make of the guidance paper is good provision as a is half I as XX.X% timing is the I in the stated though strictly lift would remarks, we XXX issue. call the we So point plus to the second again, calculation, the increase during guide at up happy to the FICOs, with And the seeing my some far they year there. movement for the in while third year, perform. expected lower quality or the is talked portfolio. would in not the increase third importantly, as in of last percent far that and third timing financed. as biggest more in with the as in

with is to portfolio the downturn. at in a where happy terms of perform ability very and confident during its So

Patrick Scholes

over in the rate new new the been quarter two that customers changes any you last have owners? or And interest charging or

Mike Hug

once consistent rate a interest of looking the kept make decision, We feel much buying payment. pretty lot when customers again. they're We that that they our the No. monthly at

the keep And recurring streams, new management sure those revenue those so fee high, have continue interest coming valuable RCI owners want pipeline get in to that to that close rates make those also we us. start keep to we the upgrade the be membership and income, to and fee, very then

held much pretty the we've that charged we've our So consumer, the level. rates same them at interest

Patrick Scholes

you for Thank you. Thank thorough the very answer. Okay.

Mike Hug

Sure.

Operator

to Woronka next of Deutsche go Bank. We’ll Chris

Chris Woronka

Hey morning. guys, good

I the in new But And your of some owners what on think terms QX you softness, on a think we see going mix. you we back? keep levers trends you're little are of that some of due VPG if how into VPG moderation do the detail pull what to system. remarks, kind longer-term that little you prepared in us to of give up? that? economic more get to the bit -- to in And expected Can a goal touched is you more

Michael Brown

first And In us the is our this have it to actually growing VPG always we wasn't. neutral case, headwind. our talk was all, QX. QX. a despite maintained owner back in Well, It QX our which is highest of for actually as new owners, positive new come QX, a about in quarter. just I think that -- to usually let's we And typically

to our is see new July drive So simply and And efforts, of August new this continue summer to business they to a see we're we end new owner -- to owner and the we We expect owners. continue all paid to at invest made and in we're this new saying off driving up. really QX, them them. commitment in

moderation VPG a in that's -- that is mix simply which So the you're seeing issue. is

Day. As a year said reminder, we Investor our last during $X,XXX

a that's In ticket not it I rates, big while of People people to of this it's a think with there's discretionary learn -- about it don't downturn, the model, dollars. that good it always is reality VPG people are a a quality. they're the people credit our them because sort as. us pullback think bit, can close XXXX our in continues to a that the most if think but maintaining going their spend vacation extent what value $X,XXX, long-term which that's would that as volatile So And moderation we're I we the market slight range. could is seeing our maintain result sort that that over industry all perceived that's downturn I And news it, projections the timeshare number. have seeing, item are of -- to $X,XXX-plus for in the be little doing there is

range as simply markets used when it's there's the XX XX think are past, going can a economy every manageable are see year. People people to I people million, enough to value Orlando more inflows a And ultimately it. the in take whole within versus like market it's inflationary come in than to think we've to towards an back. we vacation. still in million I going that times that in data go If timeshare this on or pulls still high

Chris Woronka

helpful, very Michael. Yes, that's

financing can kind know versus historically for do in Just provide of you context change how the financing expect bit among when existing third maybe quick owners? if terms I you follow-up what And on a us a they purchase? little back go a of is, second of your they or don't do cash that behavior

Mike Hug

Mike is I in their maybe we do Yes, is as down did to made higher Hug. they a they be future especially that that's see Chris, But is down purchase. this FICOs than the What what changes expect what historically encourage we've on the higher payment usually payment. won't little to a payment that think higher down to bit original high the not come on because of we've when they that seen back,

payment, finance good historically, the really upgrade that with the quality, efforts higher So us little we'd interest and have but with get place, bit net we're those high-margin income. putting a FICOs down in in high results

Operator

We'll go Chaiken to Ben with next Credit Suisse.

Ben Chaiken

Hey, how you are doing?

Michael Brown

Good morning.

Ben Chaiken

kind the Good just in a morning. Hey, last clarification of question. quick

slight I be -- but then I premise a new think case. sounds VPG or XQ drag owners like suggesting, that totally if can what correctly, the So sounds you a drove your word like that's -- the you're think I you were think basically it understand in maybe I a and it not sometimes even was It on And that benefit. saying to understood I was, that neutral

Michael Brown

So you're main all at let open that Blue to question real channels in we owners, sales sales non-affinity affinity Thread that The despite me look answer -- the answer positive were to equal quickly, just being is market, three being correct. and yes. QX

us new VPGs were mix. same. an owner that's with the it basically So -- aggregate, And neutral in growing the all was

actually to it mix XX%. So we would up previous if the been roughly adjusted have you quarter,

Ben Chaiken

new say, of shouldn't benefit XQ, to Do But one-time it's that a follow because and you and neutral saying? where super expect of No, thing take to or thought what kind owners. being process bit, bridge I'm coming helpful sounds new which trying of a was just little like to owner we in color. mix I'm the that just VPG it's the that then is no, kind like in That's a XQ? like slight in XQ a totally. it statement

Michael Brown

owners we us It VPG. that mix, new new VPG. is But point, Yes, we're it QX. performance. actually the QX -- not shift maybe we're we More saying back I typically -- about reinforces owner the say back as and VPGs we naturally goes will new It to just drags which back didn't grew just raise typically mix, estimating a VPG in strength of it constant. very -- it owners strength talk you it bit. little pulls does, it just a that QX that was travel we We leisure No. in -- remain benefit yes, to absolutely. simply my be in what it of well, as it grew going shows We're to

So orders expect driving benefit I imply that new going didn't a somehow we to new a, was mean should forward. that

Ben Chaiken

VPG? based seeing just is theoretical the cross that you -- that Or Yes, told you're -- a didn't reference like what far a No, the to that so that two I kind statements, that’s on it good And new last more would in no, will bring historical also owners was the no. follow-up so I were is be, so down a think quarter? in XQ, trying implying I of just is thought. the

Michael Brown

our What to shifted QX. the seeing VPG No. July is new with slight down. three VPGs has are the aggregate impact a slightly because -- we're of as new channels it to those on has staying owners, yesterday modestly mix by that in But consistent up

Ben Chaiken

Thank very you much.

Mike Hug

Yes.

up all I basically VPG over way VPGs at levels, new they're still lower. is the look is the owner think we XXXX the but

down. than it it's up again, in, as So owners more even VPG mix naturally new it And they're all once bring overall the issue higher But still it's to brings it's as a is across just down. VPG though mix up, goes that XXXX, going in the channels. come was where

Ben Chaiken

I Okay. it. your for Got have forward, it. maybe go-forward, you -- what owner kind I target but a XXXX missed new like based half current or a don't Do you And mix? it's then of on guys if expectations want back if XXXX, I'm for for know a sorry going what

Michael Brown

year. get we And QX. last We're We'll XX% three XX%. year, do handle were in well a wanted QX. between XX% this in the to It's and in We XXs. Yes.

So that XX% get to want to slowly XX% range. to we back

not reinforces at clear new path. industry Thread but I already pretty only it and think we're to XXXX stands, Blue upgrades. if channel you long-term year. where that's a the And a The as pretty for look that back the this we for much across business volumes, projecting that industry, model least is see sustainable

Wyndham with just that that Hotel So it resiliency the have affinity channel us, on owner the has Group. of been we for new great return that a source shows and

Operator

We'll Oppenheimer. go Ian to with next Zaffino

Ian Zaffino

you Hi, A them of in the touch very you much. non-VO what also for on as potential. VO the downturn. the of does a of But broad as can maybe growth businesses? some some have lot great. Thanks business Thank substantial far upon it discussion kind

So their kind at kind note you And the businesses, then about would that think? you Thanks. non-VO of important of rates to ability the how to of be business should those thinking that be other helpful. piece are we grow think any

Michael Brown

Yes. on There's touch to there. a lot

the whole VO across it's and and strokes the how So let Travel business a the some remainder broad of the across mentioned new forward see owner we'll out the re-growth been the VO. I comes positive. the Mike hit is opposite as RCI the industry earlier, the business, years. going But a in But out. the just exchange for in that is of know news which last And me plays And said industry natural Membership tailwind two you business business. it's

well, it's do the continues return forward. way of continues historical the going vacation growth levels industry, its that just a prove broad-base overall think great So to we which really to to will to

we the this starting that looking can into half have proof of year, into on those as of we're how at. about that now new turn proof businesses we to proof we've economic are as points value. get points some only But this variables are then, this the only can we going play into of of forward, first gotten has we sharing last the have call demand. these but those latter with on points. on show we've businesses to talked shared launching. a we in year, start And we're as look theoretical this the group half done actually the moved the year, out those not we've As theoretical not And viability, as And we've forward, seeing true lot

the strategic the we that enterprise our step direction business. that raise I that such back and is mid-single-digits businesses us And always to a in seeing The the of that, will especially significant Wyndham is years, second the the rate. able say to our objective in businesses overall be the our end, growth be said, and fact was which XXXX said there's overall nothing significant to it's take add for of With believe again the business. rate to three relates new meaningful they these RCI it's because and the but part be near-term from growth our about a to midpoint of it that trajectory to we're and would much that next in I'm Destinations growth high-single-digits. just in incrementally our very will go off rate, So at nice going non-VO can it not that that's cornerstone going the achieve to part we've success as all

at and our that that's both ago. Day a So looking on since my I how Investor year we're our can't say I outlook changed perspective

Operator

Bennett to We'll Barclays. go Mantua with [ph] next

Unidentified Analyst

for thanks taking everybody question. Hey my

for Just me. one

raised. So guidance VPG with pretty VOI much you unchanged gave

obviously in could right you across the underperforming different channels better ratcheting maybe your performing And then a and open are quarter market. channels being I across addressed might hone expectations. you bit give growth sense just three maybe be you on partnerships and But implies which And if OPC, which down different your just you maybe it within are missed I maybe ago, have apologize and then a than And the talk us -- channels and now? if thought about it. that a and so you where -- tour could little might lighter channels

Michael Brown

back year. comments, I we did I as, that range, guidance, it our up. our the Thanks here. well David prepared appreciate somewhat have to not ranges both our VOI that within second increasing but we can look moved within confidence number this change of half We say in Katz's as didn't And in gets actually that and as our Brent to chance [ph]. the actually address talk this to We about

the flow within changed that So we but tour back. of of again that pull aspect range the second greater it may for a the There of our haven't that one we not did component number confidence we overall and is that, year. of means the half higher range, most says have that moved tour flow

And what it's a with we're the that's bigger -- actually have less did a it's existing confidence will partner but within And markets of up more singular moved this in that issue. to think our underperform. math range relationship -- of we've going is you non-consumer-based a We year. deliver the we component that two that

with your prepared absolutely the sales But relates in We to logic owner So them amount. around and should our tour flow, Hotels. affinity it right. to where it and increased be, are our your VOI probably -- remarks math Wyndham tours is have expect clarified the partnership that our confidence owner we as

bit really -- think recover, within just question that or relationship be it year. we back half to think one tour we open off have mentioned of where I have second marketing, the unique And is ago a As two I would will there's change non-affinity -- we XXXX. that is was the I a but only for the only that's in the

Operator

Our next question comes from Patrick Scholes of Truist Securities.

Patrick Scholes

I another Hi, have question.

you. month vacation that implying called available Your competitor owner enough in your EBITDA the inventory out in available in inventory that in your business. revenue of -- there's exchange of And impacting just seeing the occupancies and business? well? folks not had your at Thank last something owner that and that Is all impacting as that is line for component business that higher usage are

Michael Brown

inventory we perform on that have of from always half second think callout. we this don't of and that the to Membership we But I laid are latter expect Travel out, there standpoint, really enough I significant a will the affect this high-single-digits that We business, growth year. Yes. to help our the good, as wide in again We continue guess for half it. elements which think us year. see

call enough we out an as issue. it's something would significant not So that

Patrick Scholes

Okay.

So not significant RCI. for

you very Thank Okay. much.

Michael Brown

Thanks, Patrick.

Operator

over concludes would closing turn like to call the now I That to remarks. Michael question-and-answer Brown for our period. back

Michael Brown

Emma. you, Thank

have thanks Our the members, our the consistent day. and to vacations people's of Thank our day. guests of timeshare to all and who everyone model. results is it leisure and great every a associates you make underscore course second of travel, outlook our performance to full-year quarter owners, persistent commitment strength This and our happen our

Operator

That quarter Thank XXXX + concludes conference Leisure's Travel you. second call. earnings

a disconnect this day. time. your lines now may wonderful Have You

Travel + Leisure (TNL) 30 Jul 222022 Q2 Earnings call transcript