Consumer Financing and Interest Rates
Q: Has your outlook for consumer financing changed with interest rates?
A: Interest rates have risen about 50 basis points since March, but the impact on this year's EBITDA is minimal as remaining ABS transactions will only have a partial-year effect. We expect the interest headwind to become a tailwind over the next 18 to 24 months, though it may not happen as early as previously thought. Our corporate debt exposure to variable rates is about 30%, resulting in approximately $3 million in additional interest expense, which is not significant. The portfolio provision for the quarter was 17.4%, and while delinquencies may rise in Q2 and Q3 due to growth and a higher 37% new owner mix, we're confident the full-year provision will remain below 19%. Importantly, our average FICO score for new originations reached a record 742 in Q1.

New Owner Growth Sustainability
Q: How sustainable is your impressive new owner growth?
A: The 28% year-on-year growth in new owner tours is sustainable. We've opened over 30 new marketing locations in 2023, now benefiting from their full-year impact. Increased investment in our marketing package pipeline is starting to bear fruit. Partnerships like those with Sports Illustrated and Accor add incremental databases, providing more leads and tours. This growth is a result of strategic execution over the last 36 months.

Share Repurchases and Capital Allocation
Q: How should we think about share repurchases going forward?
A: In Q1, we spent $25 million on share repurchases, impacted by the $46 million acquisition of Accor. Our total capital allocation for the quarter was in the low $70 million range, aligning with last year's quarterly average of $77 million. We plan to request an additional $500 million in share repurchase authorization at the upcoming Board meeting, providing ample capacity for increased repurchases this year.

M&A Opportunities
Q: Are you seeing more M&A opportunities now?
A: The M&A landscape remains consistent. The industry has consolidated significantly over the past decade, with over 80% of sales from branded hospitality companies. We're committed to our organic strategy but continue to evaluate opportunities as they arise, exemplified by our recent partnership with Sports Illustrated and acquisition of Accor.

Credit Quality and Portfolio Performance
Q: How is your consumer finance portfolio performing by FICO band?
A: The portfolio is performing as expected, with more pressure on the lower end of FICO bands. Our focus on improving credit quality post-COVID is paying off, with the average FICO score reaching 742, the highest ever. The provision for the quarter was 17.4%, and we remain confident in keeping the full-year provision below 19%.

Impact of New Owner Mix on Margins
Q: How does new owner mix affect your margins this year?
A: Despite increasing new owner sales to 37%, our margins are flat year-over-year. We're covering the impact of a higher new owner mix through other areas of the business. The main challenges to margins are the $17 million variable compensation headwind and $30 million in additional interest expense.

Allegiant Air Partnership
Q: Can you elaborate on the Allegiant Air partnership?
A: Allegiant Air has 15 million loyalty members and serves 125 destinations, many overlapping with our locations. The partnership will focus on cross-promotional marketing, combining air and stay packages. While it's early to quantify its impact, we expect it to enhance our package pipeline and marketing efforts over time.

Sports Illustrated Expansion Plans
Q: Will you announce more Sports Illustrated deals before sales start?
A: Yes, we anticipate announcing additional locations before sales begin in Alabama next year. The pipeline for Sports Illustrated resorts is robust, including university towns and other locations. The economics are expected to align with our Club Wyndham model, matching inventory spend with sales production.

Leisure Travel Demand vs. Hotel RevPAR
Q: How does your optimism compare with hotel RevPAR trends?
A: We don't correlate our results directly with any hotel brand's performance. Our average FICO score of 742 signifies strong customer quality. Most owners have fully paid for their ownership, ensuring they continue to travel. Leisure travel remains strong, especially in key markets like Las Vegas, which accounts for 12% of our exposure.

Accor Vacation Club Opportunities
Q: Is there a chance to upgrade Accor's existing owners?
A: Accor Vacation Club operates independently; upgrades will keep members within Accor. There's significant potential as the existing 20,000 owner base hasn't been actively marketed to in recent years due to regional restrictions. We're reactivating and growing this side of the business, presenting opportunities for both upgrades and new owner sales.

Sales Centers and Consumer Behavior
Q: Any insights on your strongest sales centers and consumer trends?
A: Our booking window is at 120 days, typical of strong leisure periods. Drive-to destinations, which peaked at 90–95% during the pandemic, are back to the low 70%, indicating normal consumer behavior. Top destinations include Orlando, Myrtle Beach, Tennessee, and Daytona Beach. Nothing unusual stands out, reaffirming that leisure travel is robust.

New Owner Close Rates
Q: How have new owner close rates evolved recently?
A: Close rates for owners and Blue Thread have remained consistent. Open market new owner close rates have slightly declined, attributed more to scaling up—adding 28% more new owner tours year-on-year—than to consumer issues. We view the slight decline as a result of increased scale rather than changes in consumer behavior.

B2B Business Progress
Q: Update on signing companies for the B2B business?
A: We've focused on deepening relationships with existing B2B partners rather than adding many new ones. This strategy has led to 10% transaction growth year-over-year when excluding a large customer lost in Q1 last year. We're confident in achieving high single-digit growth in travel club transactions in 2024 through increased conversion within our current ecosystem.