Dom Dragisich: And then just tactically, Dori, you would see that flow through to your royalty licensing and management fees line item on the P&L. Obviously, it’s a licensing agreement in a lot of ways, so you’ll see it flow through that top line.
Dori Kesten: Okay. And just when we think about capital allocation decisions this year, you mentioned you’re at two and half times gross debt to EBITDA, target three and four. I guess just when we think through share repurchases versus a higher dividend or brand acquisition is €“ I guess, does the acquisition of Radisson make you lean away from brand acquisitions this year as you integrate that?
Pat Pacious: No, not at all. I mean, I think if we look at the capital allocation, we’ve always been prudent allocators of capital. We entered the pandemic with the strongest balance sheet, I think, of probably anybody in our industry, and that’s helped us invest. It helped us invest in our brands, which has driven this 28% earnings increase we’ve seen over the last three years. It allowed us to do an acquisition of significant size with the Radisson deal. It allowed us to continue to pay a dividend and it allowed us to repurchase shares when we look at the marketplace and see that there’s dislocation between our intrinsic value and what we’re seeing in the marketplace. So 2022 is, interesting enough, a year where we deployed really all the levers.
We invested in our business. We invested in our people. We invested in our brands. We acquired brands, and we returned capital to shareholders through both dividends and share repurchases. And all the while, our leverage targets remained effectively below where we target. So it gives us the capacity to do more if the right opportunity from an M&A perspective or the right opportunity for an investment shows up for us this year.
Dori Kesten: Okay, thank you.
Pat Pacious: Thank you.
Operator: Your next question comes from Brandt Montour with Barclays. Please go ahead.
Brandt Montour: Hey, everybody. Good morning. Thanks for squeezing me in. I just wanted to circle back on Robin’s question and ask it in a slightly different way. Specifically with regards to Hilton’s new Spark brand, which is aimed at the upper economy, lower mid-scale for conversions, and I’m sure you know it well. I’m just curious what €“ if you’re seeing any competitive pressure early on from that brand. And if you could remind us, for your Midscale segment, how much of your gross adds in that segment is conversion related? And how those conversion-ready brands within your midscale portfolio stack up against Spark from a cost perspective or anything else you can kind of help us compare the two?
Pat Pacious: Yes. I think as we mentioned, we look at the quality of what we’re delivering to our hotels, and we look at that marketplace, be it midscale or the economy segment. We are winning the better-quality hotels that are out there, be that Econo Lodge, be it Quality Inn or any of our midscale brands. So from the standpoint of the competitive nature, we’re winning the hotels that we want to win into our system, and you’re seeing that in the selective unit growth strategy that we’re deploying. I think when you look at what owners in that segment want to do, there €“ it has to pencil for them. If you’re asking them to renovate their hotel and put capital into it, they have to be able to see the rate premium that you can drive.
