TNL - Earnings call 4 2023 | Travel + Leisure Co.

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Operator

Greetings. Welcome to Travel + Leisure Fourth Quarter '23 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Michael Hug, Executive Vice President and CFO. Thank you.

begin. may You

Michael Hug

and Sherry, to everyone. Thank good you, morning

in the to we forward-looking our that today we are indicated statements. statements as the like begin, would remind in those discussions from that release obligation results effective in results actual to this differ you are discussed of statements, made could and no update revise cause to today. We press these forward-looking could or Before Actual materially SEC our filings forward-looking earnings today only call. and our publicly accompanying undertake statements. earnings will The factors include differ

an the overview Michael you greater today's our Executive Chief of will I our call sheet reconciliation the President and available find the earnings of in the And morning, discussed full release outlook quarter, press balance measures fourth provide at Brown, outlook. and year And our year. in will website for can on Officer, and non-GAAP of provide a results then our detail financial the This on quarter rest travelandleisureco.com/investors.

open prepared over the we Brown. to will the that, up to our Following With Michael call for call I'm pleased remarks, questions. turn

Michael Brown

for joining thank and morning, Good you us.

tax had from share was $XXX quarter $X.XX, inclusive a saw release, which Adjusted a with per will earnings benefit, increase income year. Mike diluted a finish the you over year press X% adjusted to the As million, discuss. solid of we fourth EBITDA the $X.XX prior of

XX% Excluding QX this share XXXX. earnings per growth would benefit, adjusted over have been adjusted our EBITDA --

adjusted growth for our strong segment, year-over-year teams by $XXX year-over-year year. core EPS our an the delivering adjusted growth in adjusted top prior X% XX% execution and vacation intense growth, our reflecting Our over focus EBITDA full ownership, XX% great on X% reflect to demand year EBITDA million, and growth consumer product execution, XXXX line results business organic

continued our reflecting been tax share Excluding commitment growth per have part the benefit, QX repurchases. in would to strong our XX%, share earnings adjusted

second our the consecutive approximately year, $X.X since XX% That market returned capital brings of to cumulative over we shareholders our shareholders. to For return billion. capitalization to spin

the XXXX quarter and upon in from Now full and let growth how highlights year touch beyond. positioned we're for me review and the operational

with business, that a year begin demonstrated In in our business stabilization X% XXXX travel we VPG VOI ownership. year-over-year $XXX domestic laid vacation sales fully leisure out Gross of our I'll February. core to demand, a last guidance million the of the delivered that with VOI quarter fourth to increased $X,XXX. the

increased both marketing with sales year-over-year $X,XXX, of a sales For the expectations, we middle our teams. to XXXX billion at sales and or and of the VOI year, to $X.XX above full our VPG credit X% delivered gross gross a VOI VPG

great and increased year. the made sourcing fourth XX% new Tours quarter for We year-over-year last in owners. in full securing year XX% and year-over-year the progress

improving marketing As as been with additional owner in new new the quarter and basis have adding marketing fourth owner XXX we off-premise channels, as stays quarter's future well mix results both points last points mentioned in year. new on XXX for packages investing for call, marketing locations. the strong we transaction been full focusing The basis have in

ownership, average owners new X.Xx a on initial experience, the pipeline. system giving revenue an during purchase spend reliable additional in their our large, their In us

we interest well. maintaining higher offset perform standards to our portfolio are naturally while somewhat credit that portfolio to tightening The but continues receivables Our grows growth accelerating with expense. sales, help

the to remain XX%. We expect below provision

leverage future completed quarter Xrd our have that quarter adjusted business during call. $XX fully quarter our and we the we reported confident cost Turning of and $XX on execute we above realignment shared range opportunities. Membership, EBITDA the our to million, to the $XX to of rightsized We million fourth Travel plan million feel and October

we these revenue, recurring free EBITDA high flow. and Travel and margins adjusted expect grow strong With single cash in low changes, providing XXXX, to Membership digits

organic addition were Ownership represents incremental announce with the It execution we growth most an sports. in opportunity In for name September. business strong to to to in Illustrated excited of XXXX, to come Sports to Vacation in the the rights drive celebrated acquisition years the

our ahead. months So XXXX. immaterial first far, locations will and is and forward we years our The universities We to to earnings of the home the announcing in in long-term leisure club XXXX have in open Alabama, announced Tuscaloosa, be look will of Illustrated expected resort which but Alabama, University to Sports more and destinations support growth. late

license Travel our Pacific Club exclusive years management the Accor providing come, and revenue grow utilizing to vacation for of a addition the executing announced trusted XX,XXX and Margaritaville agreement It great Illustrated. sales, of will Vacation for brands Leisure Asia to acquisition affirmation ownership to in The second XX our milestone Sports our multi-brand steward The global X + and development. significant to noted, groundwork vacation our finance. lays hospitality which ability we already and less in a to the benefits have the the portfolio, demonstrating This months, brand, momentum. be economic us inventory finished the core month, streams platform. ownership than strategy consumer Last region resorts, of further is as includes Wyndham, world-class from resort gives members for was

our couldn't We health more let guidance month but and expect share review in key a to will on Travel some family. consumer. be transaction brand to the Mike I me first monitor gauge the to we next moment, welcome performance the indicators close color the Leisure of pleased Accor to

volume sales performance Forward finance guest consumer resort portfolio. our of and the bookings, per

are remained XXXX XXXX books levels. demand and Investor demand. pre-pandemic pent-up consumer end continued are nights from on normalizing but XX% of range high Regarding post-pandemic of robust the VPGs forward above our Day leisure ahead the XXXX, for travel bookings, owner reflecting at

of execution pleased our XXXX. to We To mentioned And year plan quality I significant delivered $XXX growth, of organic by to full has expectations. to repurchasing of focus X% with adjusted that the These growth. intense X% our we focus amount a by and in strength resulted earlier, and and EBITDA by on our returned growth our stock. shares XX% paying perform are our finally, achieved portfolio and as capital adjusted continued EPS model around performance top business world. results million X.X execution line were credit our dividends on a in summarize, shareholders, the We in associates million continues with

of want I one them. and each thank to every

segment. to off strong future, For Travel we the in intend are cash the share with share. the supports shareholder use increase our generation This our first confidence in repurchases. continued a to increased significant for free quarter sight start ownership Board through dividend clear value of a Membership recommend dividends, to and drive M&A core to solid our flow XXXX in to line vacation XXXX, strategic foundation continued we a should our business $X.XX execution arise commitment and to per a Reflecting and opportunities action

effectively cash ability utilize track us our proven execution free The our combined record opportunities leave organic and with to excited of flow, ahead. the generate about

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

. Mike?

Michael Hug

sheet well as and provide for will fourth discussing Thanks, balance color Michael I our XXXX. outlook on more as our well quarter as cash results, flow as our

earnings to of stated. $XXX adjusted We million increases comments share diluted EBITDA XX%, will of reported All and specifically of period comparisons of same unless refer of fourth adjusted and per the X% respectively. to year, quarter my $X.XX, the prior

$X.XX to includes For $XXX . Full a EBITDA growth to and year the utilize. EPS tax was carryforwards year-over-year EPS respectively. adjusted able adjusted $X.XX, XX%, be full adjusted of expect foreign that credit year, benefit now and million representing was we X% from

the segment Looking EBITDA in $XXX the $X,XXX million revenue and at fourth tours We $XXX year. growth increased Vacation XX% X%, quarter, to compared Revenue performance to X million. the fourth delivered reported was in million, $XXX Ownership XXX,XXX adjusted our million of expectations. increase the and with VPG an business our quarter while line XX%, $XXX of quarter Membership in of in prior units, Travel of in segment was

count to a million as propensity exchange. to XXXX. EBITDA compared X%, whose Adjusted expected, reflecting continue have $XX fourth shift clubs the down transactions but lower of grow, exchange quarter mix of was the $XX Exchange were in million members continued member to

the business Michael in environment, As XXXX. rightsized the we EBITDA which growth drive current will to said, have

significantly Our and performance interest strong despite challenges these throughout offset cost disappointing partially was We compensation Membership. full the variable solid rates with reductions cuts higher and in results year and at decisive Travel year expense.

EBITDA we across adjusted XX.X%. continue EBITDA full our coming businesses drive adjusted margin year at in with to margins XXXX our strong

Moving to our sheet. balance

continued Our the share of in remains dividend financial fourth return and to quarterly to strong. position our $X.XX quarter, through And shareholders per share. repurchases we capital

million. dividends paid at outstanding the returned year, of total million to XX% of we and for totaling $XXX repurchased shares For year the $XXX full shareholders $XXX the capital for beginning million of

in As Also senior closed X use important in million financing, and we transaction we our April. We which completed transactions timeshare the press October securitization the notes will quarter. the securitization million million a primarily pay receivable you additional agreement term in in credit a term saw December. $XXX $XXX loan release, borrowings December, we in transaction secured term X $XXX under to due fourth in

million $XXX EBITDA conversion. to for was adjusted resulting flow cash cash free a free year, XX% Adjusted flow the in

X.Xx. our leverage was for adjusted ended was investment [ we flow in ]. share to quarterly impact for ratio cash corporate levered below our what right at looking goal leverage. X.Xx year-end Remember, the and We at conversion covenant XX%. line year Sports our end our Illustrated would Excluding the of Overall, allocation the free when million, been dividend year $XX with purposes with of the capital anticipated have repurchases, XXXX net

the about XXXX. Now detail of let our first more provide some year full quarter for and expectations me

range we guidance no of at and adjusted most incremental $XX a variable million are full our ABS assumes are that our compensation XXXX. range. interest for $XXX providing expense the Note for the now, For debt of EBITDA we midpoint million of guidance in on the and comfortable to million benefit year, includes $XXX

$XX in For compensation million. comparison was purposes, benefit the variable XXXX

Turning to Ownership. Vacation

in $X,XXX range to $X.XX gross range the VOI in of billion $X,XXX. CPGs expect We $X.XX with sales to the billion, of

expect For Travel already mentioned, we grow Mike EBITDA low adjusted to in and digits XXXX. as single Membership,

expect the rate year, we full an For XX%. income tax XX% of effective to

Turning first the quarter. to

result expense a of million. Vacation year-over-year the ABS VOI $XXX quarter headwind higher as a to million EBITDA in $XXX to Ownership's million sales our adjusted interest million we We expect on in the of $XXX VPGs transactions. to range interest $XXX $X,XXX. in of and quarter of recent faces Ownership, million In Keep expect adjusted first to EBITDA $X most Vacation first $X,XXX gross expense mind,

million first our to quarter Membership, expect For adjusted tax of are Travel turning the $XX to to cash. EBITDA XX% to finally, from quarter $XX we first we rate And XX% to guiding in and range million.

cash flow have corporate the neighborhood when free adjusted Elevated set increased assumptions ABS XX%. XXXX our about conversion to interest in XXXX. We conversion rates our million approximately from expense be for our XXXX, expect out goals cash in flow of and we $XX September interest

However, are In closing, proud of return adjusted XX%. as flow our earnings expect and we to continued free and in adjusted grows rates interest capital decline, with flow conversion free we move cash to cash XXXX towards over to an of shareholders. and EBITDA we pleased the delivered ability

EBITDA guidance to our as and our no to subside, we the benefit. reflects return headwinds interest and longer [indiscernible] business adjusted resiliency digits in single XXXX, high we variable to of growth grow. our ability Long our For strength compensation term, XXXX and our confidence expect rate

to you can please call take Sherry, that, open questions. up the With

Operator

Instructions] Our Chris is with [Operator Woronka Bank. question Deutsche first from

Chris Woronka

at the the was you marketing and some hoping channels of far. And bit of could of channels [ year. Michael, the talk you a about question for some this details other little ] is looking kind really OPC Thanks I you're so sit those know adjust here evolve -- How a events in typically of of -- -- some February, have plan, new do you the as you those you some year you unfold. have your kind mix have of partners. various I through partners or these

to tour visibility the your trying partner flow improves some of whether your to the in get bookings to as a mix. Just sense with

Michael Brown

positive the a is owners. marketing as were there very that And we very credit of was, we yes, is wanted standards. delivered one. said came And our increase the as the we to to pandemic, Chris, partners secondly new our ensure elements. Number important we question order standards, well as new out marketing wanted margins one important X

in marketing region, bigger our grow region. regional a their on will executives took lot best coming and say, basis. We out, contract But measured We're on that we locally. a of channels diversified for would we've seen some partners single do I our, evaluate regional partner. the So generate tours us. opportunities have dependent overly region therefore, OPC a each of by very approach a And not

you it the is, of new in the in year, What months. guidance months our also and typically happens VPG full your versus first big the cadence summer year in are quarter owner the see the

will So with upcoming the our for marketing deals working teams right partners up be now summer. sign to

So this year, tour you're last year of which just growth building was on And the the prior growth success from tour we're XX%. expecting year. over XX%

a partners one. basis that developing it's from a growth owners right regional at steady on just a, profit and b So will of a deliver the day new

Chris Woronka

Very Okay. helpful.

very Or is cost begin you on do of you going initiatives forward, the line Just could if business. need obviously the the Or to possible you as started. It structure. in that with And you to? have is see maintaining little a minimal growth? we expectation question do of cost it a really clubs you Travel kind and segment. said you that accelerate sounds on you've the to do expect -- Membership a follow-up. line is This bit side more But top -- couple be EBITDA level that have top growth the like will the rightsized growth

Michael Brown

yes, you line the get top can Well, growth through Yes. growth.

growth elements that One the Travel Club incremental business key driving -- of addition in the the that EBITDA modified we've is space. that is of

side is Investor growth for the a the Although meeting it's is source and we new laid not business. Day, expectations it out originally on of that providing revenue it providing of

predictable. dropped, come starting growth in think to Club, saw revenue Travel was trajectory the reflection of to the of a seen we equation seen of pandemic, we rightsizing out coming see So lot and it start we've stabilize pretty the that exchange but range really that we've into the as side is predictability to we're a of a

future top make to growth. we was So yes, revenue changes thought And some I cost see make needed Membership think can line and the the just we what space. in we in Travel the reflected sure to structure growth

Operator

Grefficiency next question Joe from is Our with JPMorgan.

Joseph Greff

variable expense that between And XXXX, rate. corporate that to Does low then is as VO, ] compensation you benefit break even your well as and hit picture that year implies the million. reference the segments? $XX [ out you my a guess single-digit year. question EBITDA through guidance Does I I that in this. mean, bigger hit growth Mike, full Can the TM corporate? that indicated EBITDA

single delta, You is how referenced there. membership the seeing year incremental rest the Would travel year-over-year as the variable expect $XX well VO expense just compensation million. interest of the incorporated flat. basically of of what's triangulate trying you digits to in grow I'm to and low you're

Michael Hug

Yes, question. the thanks for

because expect, as to ones to you and is that level expectations, original going be the compensation On would set quite variable the our the segment the compared Membership meet we biggest that the Travel at were to as they out. didn't impact

Membership -- Michael NAV, level, impact be we're Travel and most their then Travel Leisure for on, consolidated basically Brown and confident well smallest. would Destinations I'm based Wyndham consolidated performed and and Leisure at because year, going the second is on the as so to sorry, significant the be The touched impact Travel

see start terms how of QX QX. In going, evenly you things you to later July when year, those as and are year, throughout adjustments get of kind and cadence be the adjustments pretty to if spread made. the that you're that's in the of Obviously, in in [indiscernible] much any there are you through make

evenly X. in through models, can that in pretty you coming through about QX So much your think

we talked big and expense about $XX headwind exactly mentioned have far compensation, the variable today. then you're we are million the which obviously we've year-over-year that right the as that As the headwinds interest growth X rate,

already to happens X.X-year take you're long seeing back X you the we year-over-year. the reason interest about out single-digit transactions, If those X% subside. believe high the have rates picture, a to term, looking what on When the growth over growth We're they the life. get of can we basically long at up is expect about X% we do ABS that. we And term, think to

expensive XXXX. but be ended by we finally that less the middle rolled all off of we'll So the in kind of of XXXX, the did, ones truly middle

be interest a place in in 'XX in in tailwind headwind to put neutral to and we throughout off. roll more the basically then become that should 'XX that So expensive and start late 'XX as start 'XX, transactions

of item over really you gets that's that we're the next covering that even that headwind. some growth factor generate several of to high-single So into digits big years. the back that us to the long-term And growth able

Joseph Greff

the flows slower Got down in fourth the my earlier quarter buyback it fairly and XQ XQ, year, lower from in question was from slowed it. than is, activity? was driving substantially And then that XQ. final which the versus What's the what

Michael Hug

strategy, look that the total invest presents to going at about. if the opportunity Really, drive we make talked high talked the we in capital when once decision digit about, we've our allocation to business, again, right growth help that long-term itself we're to

these working as about marketing we that obviously, opportunity us, at that's presents to what as well opportunity So we excited looked really the Illustrated, we half Illustrated when what opportunity. to invest had think we look we're as And about. of very universities as at, as offers year that it's things M&A, opportunity relationships great that $XX we'll that million brand talk a that into the all in we the the and the got with with the we be Sports second Sports the

business, and repurchases. year, invest the in then the at obviously, use how and difference as think cash again free or growth increased long-term the where M&A the of to share ability us to our goes the we we'll dividend important very absent demonstrated is this we M&A flow, to when So it about we look

the you why first and just in that's see of Accor, because, same acquisition $XX being come we're second our share the free quarter strategy. see the of where allocation thing year Illustrated our of cash on And out flow the million will about you'll very opportunity. as then half for under this the which year had we was So excited part executed of capital really down the right, repurchases Sports in

Operator

Our Jefferies. is David with question from next Katz

David Katz

wanted and repurchases about to years. new dividends just of for in in what of and of paramount wanted enthusiasm being the change story capital sort term returns, with about I I for of channels. go just obviously, philosophy view capital back your strategies brands sure and some some policies make the the allocation is obviously to to initiatives? near capture for philosophies choices given these the new many Any or to those

Michael Brown

David. There's strategy. no change capital in allocation our

it to I we've pause our strategic region, choosing years, which that M&A and M&A it, decided on consistently in world-class think act brand does come the And are think as long-term the Pacific to Illustrated then a on is share lifestyle, you're like hospitality only capabilities foundation Sports which along with opportunities IRR with strategically and its with ability sales grow the right that of effort the what fits put marketing strategy. for anything really exactly quality Asia post-pandemic. that. combined last hospitality X to space, the a brand and leisure with and the relates Accor, for in between is, also has we'll we repurchases, dividends said into

quality an the of get make existing to to brand us. to Accor XX,XXX opportunity complete members a operation, sense the The with

this, and As in business these excited easy of to prior. an year when top invest of more of couldn't last saw through year. much On And our choice it be X single in was Mike support we the the dividends and growth repurchases this our initiatives XX% mentioned, the returned capital high same digits, we opportunities pretty it. long-term to about really us, for we share long-term to be

David Katz

it, the in like it's consumers that something Understood. question sure. or sounds the to just of I want capital or the alter And just it is ways think no, others path. And to follow up, Accor essence like I to make whether

Michael Brown

vacations far existing to XXXX size as in the our flow execution well, the system the in extremely Sports in is of opportunity And owner it in ownership. leisure business I against well. shows Accor from the of space. free in keep business, -- as have we something leisure of what to do And the immediate model look, into build vacation of business And our [ the base and in we'll of those relatively ] is use our long-term we're it's and ground that like because vacations success vacation ownership think Look, operation forward, paying increased we to more and size going an that if Illustrated is opportunities our repurchases up dividend. an decent invest their absence diving resort cash share investment which is performs

Michael Hug

Illustrated And the be a intent capital, use Accor both on David, it on would -- delivery of on have to Sports just-in-time our basis. and inventory delivered

to So sure revenue that with partners in comes work inventory when make come starts to we'll our the in.

Operator

Truist Securities. is question from Patrick Scholes with next Our

Charles Scholes

tours Michael better a -- numbers, tours. looked and for for you at expectations than Street a little lighter, for sales implied versus there VOI a consensus was towards in in expectations like but maybe about growth bit because little least little Mike, your could bit us VPG It gross line bit talk rates analysts.

that... First, you about could talk

Michael Brown

years sort growth Yes, next strategic this year tour of is few direction the important our will be led. very for

which had versus nights combination results a year mentioned, be That -- up XX%, already last We'd in owner is XX%. I be number will a growth growth owner XX% As of tours. projecting to year. our mentioned incremental factors. this that over room tour we of We are expected our

broke time, sales year. million Wyndham great We for last groups relationship of that, first the have a $XXX with hotel the

our to remains then relationship And channels. question to good Chris' grow teams and marketing that profitable, expect lastly, very local as We regional productive. strong to grow incrementally, continue that is back

this And of our our we is if look because per to expected that tour -- volume of the and this to new stabilized, for long-term as with an year, to we we can those the that important once with really relates get our want growth dynamic -- we high to order guidance at us And long it number are growth up set owners. XX% As our guest, haul of on over decisions transactions will projecting put end not. range. said for XX%, we be you basis grow making new with our are a familiar start being the story, that those to to or year-on-year we of at

as implies the that beyond make on that year. -- you to decisions get this choice related XXXX, have on So should that proactively a we less unless of we impact an adjustment beyond mix

Charles Scholes

have then and fully point? the side, Okay. hop the the you it say fully here, I'll I in another you question business. on where be cost right-sized BXC that's to this Would want back at BXB, or queue,

Michael Brown

easy to business. has and you it's industry I of evolved make dramatically changes, -- never the nature structure the It's to some the the And last your XX of industry therefore, the do. years. of have over changes. change I the at think And structure point,

to exchanges that which as with Our shared, deliver you growth structurally the space, recognize year. will is, low members business in exchange teams over be we where continue this great but single-digit X.X million

to that very calls. where expectations up a should heads this which love sight of in out this achieving on the still year's have lot constant to XXXX, candidly, our along was we And you on because their call. nodding change sets performance in to result margin, high hopefully that a sight clear performance for clear these hitting the year conversation goals this line we are of us had did. and laid cash and changes, we free flow is a people what line those high that we're think with make calls We of this our And business, those which,

Operator

Brandt question from next Our is Montour Barclays. with

Brandt Montour

curious EBITDA sort Accor, at us the you sense time for a if this rate for of run the I'm of asset on give could purchase.

And there's you with your anything synergies of understand assuming 'XX sort that put incentivized see if how and guidance help of you are in and a so their you that if fee is that no, asset. with fee to structured there help to in that sort us they're also [ but If ] them Accor database?

Michael Brown

Absolutely.

$X pandemic forward. And So rate million out $X their to is million. want they coming EBITDA to take the the I efforts have their sales stalled mentioned to decide previously, is run business approximately exactly really how of they as

we deal at as have year, closing which look So year, immaterial for $X at this X/X to this means of the which means $X QX, we of we million. year, end be million should the very EBITDA this

a quality of arrangement. it. in resorts level team about the Accor reramping of it's ], There's no investment + real and XX the having it Club. this the fee our and sales But of growth excited Accor will Leisure call The know year -- focus excited to the efforts license Travel be region is Vacation on this the the doesn't the related the know [ team and and is and one similar that brand very

us member resorts destinations. top their for incented count, they're leading line So to grow at more more their to Accor ultimately and

Brandt Montour

that just you sounds want to the follow-up. X Is to? And quick that, I running guys way guess when you VPGs could great. everything be expectation accretive get it your

Michael Brown

The Accor is move against to to with a The answer needle. slightly answer an more billion VPG higher materially $X.X It's Vacation which not is short detailed upscale going tends yes. brand VPGs. bring sales. Club But it of the is

Operator

with of Asad question Our is Bank from America. next Dany

Dany Asad

flow to first out of new of about expect on tour the margins how margins, for of XXXX like the what segment where and you remixing VOI with much would you VOI compared that implied owners shake we've kind would talked so question to could, in far, driving impact is My And you just 'XX? and of 'XX. kind kind quantify, if

Michael Hug

Yes.

$XX terms I in mean, $XX As headwind, basis, million that business owner up on a XX.X% the bit the for a to our what's again this in We little as point, you'd impactful headwind. the little once year. the XX%. we on pressure obviously, what's for margin then down We'll VO be of EBITDA consolidated is your And because will to most move million bit. be finished generation of about does down expect, down that interest interest just bit. next on a driving have new year The little margins a

consolidated So I about comment we up cost going about mix. the variable and are continued you primarily to talked to that that earlier 'XX, VOI back high addition interest do have investment is nwe margin the in I in in we at how drop confident think long-term in the the And digits, growth to about made the level. single in owner this we headwinds if have

get have And as to on, headwind potential the that XX% a if VPG on or as decide as far marketing touched no to owner new we we higher we XX%, costs. settle the that's up pressure longer Michael as So their, mix.

Dany Asad

for we And off it. running driving from XXXX any you do capacity any yourself ways tour kind into on there's but as tour of kind we're ever kind can just capacity of you limitations levels, of flow, kind of keep Got growth? see curious see? Or like still follow-up, that issues a my

Michael Brown

capacity don't the I physical see issues.

People pace talent. to We bringing on this [ industry, and retaining and have in success are key we're the focused sales ]. very new sufficient in

is is along of and think in the with are human third today's leg I data physical key. that important capacity world most So stool the capacity

about us ability bring and Accor new loyalty as of and Illustrated degree marketing component. we are untapped Hotels it's the certain love the databases, basis a Sports So they we're Wyndham our with as give data additions the excited is relationship to the about their their and reason well reasons one the grow of excited to that growth and program

on if And margins. to X just to comment could add Mike Hug's swing back earlier I

the where we we organically to of and challenges that Yes, I our think that our XXXX. again and the in finds challenges that the case high a with to team in way rapid just great was proud think to a ownership at headwinds some of and we with plans rise once faced Membership very Travel rates, slightly. segment, of year I XXXX the margin team. against vacation beginning interest of accomplishment, the shows it deliver I'm had also margin our business business margins want And our expectations XXXX, high-margin of actually laid our out against in improves executed a but I when overall like

Operator

Zaffino Ian & from is question with Oppenheimer next Our Company.

Isaac Sellhausen

for on Sellhausen Isaac is This Ian.

just that in members are the the follow-up maybe we as transactions top maybe, Should members? the still exchange expect some move transaction growth Membership. and modest headwinds Travel First should How on about growth? exchange expectations, recovery of year? maybe then line and we think around and business a What we on through

Michael Hug

side, at This for is When business, grow. the to membership exchange Yes. members question. Hug. Michael the we the on do expect look exchange Thanks the continue to we travel

new owner continued new generation, We across seeing to in increases and the compared generation like we're owner 'XX. are in doing just 'XX industry

most count, member So propensity that to the to coming have we up. challenge one is we we've exchange. continue go growth expect which obviously is to talked a lower of about that have The clubs, in

with at look the them some pricing. we we bit in when So little be XXXX, try like up transactions, expectations we a did expect make that exchange do to for we'll for down to

the to transactions increase relates travel out clubs, it in Travel then the we do And as of Cub. expect

overall Club low segment, is the be that exchanges. a the the EBITDA as side you'll that revenue will for come on digits. of with the Travel growth for you growth as the single digits lower So does in mid-single margin compared comes and mentioned difference revenue business The in see to the RCI this reason

Isaac Sellhausen

maybe but a And are we? specific XXXX touch particularly you on resort you bookings mentioned were I'm levels. helpful. performing ahead ahead just as then then how well. Very follow-up, regions of maybe how you can sure not are far could And Okay. that get,

Michael Brown

I can.

For would and expect, a year that this Orlando return U.S. you'll to X of travel. you expect are charge. Las the the destinations the the Vegas leading are, where see year, primary half I first

we year Europe all last hot that Cruise. was know I the think in market

year. I year they bookings think X% I'm year. the on through how are not and But the the second of the hot. nights half remains of the for first trail year this ahead into year blending the full for room full X% our part sure

that continues owner XXXX to quick there's for add stay. bookings. which sort from into We're of environment anywhere is more this longer length work a related post-pandemic, to really stay continue, to to of that even a one persist longer tendency that Just our thing seeing validates length been of

Operator

question follow-up is a Our Securities. Instructions] [Operator from Patrick Truist Scholes next with

Charles Scholes

term, the XX%. questions. that, expectations about the of can long have about couple to credit XX% no follow-up then loss to forward? I Mike, have going Yes, standards. I I talk related just talked provision think past a you've in you assume loan around for And you -- to changes your

provide noticed little their customers' last on of any? then bit just anything on earnings a know me you've also Let propensity color loans. been if since to pay have And there if could you

Michael Hug

for again Thanks Patrick. questions, the

that the all, in of terms range. XX% ended we've that we on in year demonstrating at Obviously, the range the being up of of portfolio. performance lower consistent First end provision, been XXXX to good XX% in the the

with portfolio large up and continue be obviously in XXX performance to driven happy [ We ] part the minimum by move very to FICO.

at from up Our in XXX are new in coming XXXX. originations in XXX That's XXXX.

the near performing our credit with just couldn't with happy the happy level us I very delinquencies. and very, term. we're with changing -- we is don't see the consumer very the the when I quality, that way happier delinquencies, of look So in at be

in that's more see to things out ordinary another makes our lower execution nothing great to of the go investors is of jump expectations. on you very Those that and for notes easy in the something And market. an are and it the portfolio regularly confidence than right? those when that end we continue pressure or times end, we higher ABS to do Obviously, reason outside the on but our FICO we have of year quality a transactions, X the decision

the quality, the of to say at. would in decision of to quality because generate that sometimes range if the credit up those make from conscious it where happy end very that I the high very with happy try good FICOs. provisions we end does XXXX at financing So more

want headwind. get we interest income offset that the can So again, we doing expense to interest everything to growing do

coming sure of quality make level a so the earnings and If issue, XXXX. And we at drives. we do relates that originations as in we high say of us in the the range end read it growth obviously don't long-term you have that listen to what to

Charles Scholes

about bit et exposure, certainly far But you of visitation, any a out, I your cetera? might recent know Okay. bit than Hawaii could if you Maui? And that little just less Hawaii break folks Michael, trends then have peers. have And you in talk O‘ahu little here. say, versus shifting how some then gears a of versus granularity on

Michael Brown

Hawaii 'XX We material Maui no would in we relates Kauai. So in I what XXXX X And resort XXXX. Island was to they bookings, the change what were for in have say there in Maui XXXX and market they we from from and our only 'XX. performed Oahu, what and performance, and it similar that as to Big significant have very exposure look

So the sales X for in only 'XX. performance, any didn't between year of 'XX, the one 'XX we And years, see on the really variability Maui. the we occupancy material us, and both resort Island or for have again,

Charles Scholes

Right.

down that of or the perhaps, Okay. it's And currently plans for expansion properties then to the to -- Pacific Accor are where region. their is like Any destinations just Australia. shifting gears outside growth, It that South in or based. seems in other take road

Michael Brown

execution. is so good to The expansion key

the against priority But put establish relationship, expansion question has to the and the successful. future economically make first from is the highly do respect to there, yes. countries And and build we Accor regions more plan mutual answer locations, then we to of be execute we our with sure will just with world. to be one short proved good the a have like forward. Wyndham your and We to grow want gain alignment Hotels, So which

Operator

I turn back end over the to would management the reached have We our for conference question-and-answer to remarks. like of session. closing

Michael Brown

particularly vacation in core quarter you, very business with fourth Thank Sherry. and ownership. our pleased our were We full year performance,

XXXX. we momentum, continue effectively leisure are to leveraging in which We expect travel

the As our indicated in Accor great traction have multi-brand agreement, announcement strategy. executing by of our we

are by drive our vacation. for and put opportunities value everyone. free a to excited thank who participating. ahead And tirelessly the earnings day on every deliver the and great We to work teams you cash Have day, world flow to thank adjusted to want our shareholders. to I

Operator

This today's Thank conference. will you. conclude

thank You may now you your and participation. disconnect, for

Travel + Leisure (TNL) 21 Feb 242023 Q4 Earnings call transcript