David Katz: Got it. And would there notionally be some refinancing required and with the cost of debt involved, are you sort of comfortable that this – where we sit today, I guess, right, the cost of debt lends itself to doing this. And before I forget, congrats on the promotion, Scott, I should really have said that at the outset.
Scott Oaksmith: Thanks, David. No, we are comfortable. There are a few when you look at our bonds that are outstanding that could be rolled over in the transaction, but there will be new debt that needs to be issued. And we’re comfortable with what we see in the marketplace as far as interest rates that we will be able to de-lever quickly. Our interest coverage ratios will be at least 3 times coming out of the gate post-combination. So we’re comfortable, again, that we can invest in the business. We’ve stressed it if we saw a recession and again, feel very comfortable that the businesses can handle the debt load and again de-lever quickly.
David Katz: Thank you very much. Appreciate it.
Operator: Thank you. Next question will be from Robin Farley at UBS. Please go ahead.
Robin Farley: Great. Just circling back to the topic of next steps, and I know you’ve discussed it a bit already. But if Wyndham continues to not engage and that’s their public stance still, is the next thing that you have to wait until May to have something in front of shareholders. Is that something you’re prepared to do sort of timing wise and that I don’t know if you feel that there would be any sort of uncertainty between now and then that can impact franchisees on either side?
Patrick Pacious: Yes. Robin, I would just say we’re well advised about what the potential options are to continue to move this ball forward and get the transaction consummated. I’m not going to speculate on sort of what will happen between now and in the next several months here. But we are confident we are going to get this done. We are going to do everything we can to drive reengagement from the Wyndham side. And as I said, we’re aware of what the opportunities are and the options are, and we’re also aware of what the calendar looks like in order to get the transaction completed.
Robin Farley: Okay. Okay. Thank you. And just as a follow-up, is there – are you expecting any more removals of Radisson when we just look at the change in the number of Radisson properties among all of the brands combined from Radisson in terms of – any more removals from that system from here forward more than maybe what you would think of as a typical rate, just looking at the change in the last couple of quarters? And then also just that kind of related on the total room count for the full year, if your expectation for that and whether that’s changed. I know the 1% increase in the revenue intense segments but just some thinking about it on a combined basis and whether that’s changed since last quarter and just looking at the Radisson removals? Thanks.
Scott Oaksmith: Yes, thanks. Yes, so in terms of net unit growth, we’re really pleased with when you look at our legacy Choice brands and our revenue-intensive units. They are up 1.6% year-over-year and our rooms are up 1.9%. So we are very pleased with that. And in terms of Radisson, all of the deletions that we’ve had at this point in time were ones we expected that we had underwritten in the deal. So no surprises at this point. We should be on the back end of that at this point in the cycle as we are now about a year on the acquisition. So we’re confident that we can grow both the flagship Radisson brand as well as the Country Inn brand. Our plans for the Radisson brand will probably – most likely be to grow through with the conversion engine.
So we believe we’ll be able to kind of bring that back to a new unit growth coming out in 2024 and beyond. But for Country, it’s going to be a mix of conversions and new construction. So the timeline for growth on that may be a little bit elongated given the new construction environment. But we’re very confident that both those brands that we can grow those into significant scale for the company.
Patrick Pacious: Yes, Rob, I would just say, too, in the Radisson brand itself, the amount of re-financings that are going to occur in the next 18 months for upscale full-service hotels is fairly elevated. And that’s a real opportunity for brands to come in and re-flag. And our development team for the upscale segment is engaged in a lot of those conversations. So we do think that sort of re-shuffling of potential financing is going to lead to more opportunities for us on that conversion, upscale full-service conversion opportunity, as Scott said.
Robin Farley: Okay. Great. Thanks very much.
Operator: Thank you. Next question will be from Meredith Jensen at HSBC. Please go ahead.
Meredith Jensen: Yes, hi. Thanks. I was wondering if you could speak a little bit about the extended stay portfolio and how we can think about segmentation between Economy and then mid-scale with Everhome and then the potential sort of white space for upscale extended stay and sort of timing or thoughts on that front? Thanks.
Patrick Pacious: Welcome, Meredith, and I’ll start and then Scott can sort of fill in. I mean, I think, when you look at the extended stay opportunity for us, we’re really excited by the four brands that we have in that segment. I think as we’ve stated publicly, we expect our compound annual growth rate over the next five years to be in the double-digits, like 15% growth going forward. We’re really excited by what we’re seeing at Everhome. We had a Developer Summit down in Atlanta a couple of weeks ago that was standing room only for that brand. And as we mentioned, we’ve got 12 under construction and a lot of developer interest for Everhome in particular. We’re also seeing a lot of conversions from transient hotels to extended stay hotels.
And if you look at our Mainstay and Suburban brands and the growth that we’re seeing there, those two are also contributing significantly. I think when you look at the white space, as you mentioned, an upscale extended stay brand is not something we have today. It is something that, as we built our upscale capabilities with Cambria and now the Radisson acquisition, and we have our already strong competency in extended stay. That’s a white space in our portfolio that could be filled with a future brand launch or potential acquisition.
Scott Oaksmith: Yes. I’ll just add to Pat. I mean, as he mentioned, we’re very excited about the opportunity. When we look at our pipeline of extended stay hotels, we’ve got over 360 hotels. The profile of that developer institutional capital. We have the systems put in place with over 60 field service people to make sure that we’re driving what they call as extended stay occupancy, which is so important in that business. So we’ve proven out our business model with the WoodSpring brand, which has really been a great acquisition for us, and we’ve been able to accelerate the growth of that. And developers have seen that, and we’re bringing that to the mid-scale segment with Everhome. So we are very pleased with where that is today with the 12 under construction and 60 in the pipeline and see an acceleration of the demand trends if you look at the infrastructure bill and re-shoring of American jobs.
