Benjamin Chaiken : And then on the Bass Pro side is, do you have any plans or can you share anything with us about how you may improve that or change or improve that experience? Just because you’ve now got a much broader product to introduce.
Mark Wang : Yes, no. Super excited about Bass Pro. I think I mentioned just a minute ago, we had our board meeting up there yesterday and had a good part of our board up there. We had an opportunity to meet with Johnny Morris, the Founder his management team. And Bass Pro is more than a retail store. It’s really a destination unto itself. We were looking at some of the data that Bass Pro was showing us yesterday, 200 million visitors there a year. And it’s not like they’re going to a normal retail outlet in and out, find something quickly. They explore the store and it’s designed to really keep you engaged while you’re there. We are working right now with Bass Pro and we brought in some outside consultants to think about how we can reimagine, how we put the Hilton Grand Vacation brand in the store.
Bluegreen did a nice job, with what they were doing and over the years, but we think we can elevate that partnership and expand the opportunities to benefit our combined customers. And it’s a great source of customer. When you look at really what’s embedded in that Bluegreen member base close to 50% of those members have been sourced through Bass Pro either through new buyers or owners upgrading. And we think, we’re going to be able to expand and use different channels beyond the in-store. We think there’s digital opportunities and we love the diversification of the customer. So super excited and I know Bass Pro is very excited too. So we’ll provide more information as we roll out new programs there.
Benjamin Chaiken : And then just a very quick follow-up on the sales and marketing side, you mentioned getting some more operating leverage moving forward. Understanding that Bluegreen has higher sales and marketing, could you maybe just dig into what maybe drove it higher in the 1Q, and then why you would get more operating leverage going forward?
Dan Mathewes: Sure. Actually if you look at it on a pro-forma basis, the sales and marketing percent year over year was relatively flat, right, at 51% up. Some of the operating leverage you’re going to see is as we expect in the back half of the year, you’re going to see not only from the seasonality perspective, but some of the initiatives we’ve talked about with VPG improving, you’ll get a little bit of scale that’ll obviously offer some leverage and some benefit from a P&L perspective. And then also from a percentage basis, we basically and I’m going to oversimplify this because there’s for some of the team members listening on the phone, I mean they’re doing a lot of work with regards to cost synergies and all of those type of items.
And it’s a bit of a heavy lift. So oversimplification though, there’s basically two tracks. Track one was focused primarily on G&A, which we started to execute on and you can see those reflected in numbers. And track two is really looking at the sales and marketing side. And as I alluded to earlier, making sure that we have the right talent, the ample level of talent to make sure we can execute on everything that we need to get done. One other element that you see that’s specific to Q1 now year-over-year would be the same, but we do have a large ultimate access event in Q1 and it’s our LPGA event that’s held in January. So that also elevates costs in Q1 relative to other quarters.
Operator: And our next question comes on the line of David Katz with Jefferies.
David Katz: Just that you’ve covered a lot of details, but I’m just curious when we look at the two acquisitions that you’ve added to your system in the past few years and the sort of corporate orientation that includes a meaningful amount of Hawaii. Just curious of those two owner groups that have added to your system, how inclined are they and are they participants in the Hawaii market and to what degree relative to their sort of activities kind of on the mainland?
Mark Wang : Yes, Diamond had I think three properties. It was three properties. We have a total of 12 properties now in Maui or Hawaii soon to be 13. They had three properties there, so the Diamond members who are already participating in Hawaii and in occupancy in Hawaii overall, Hawaii occupancy, I think is right around 90%, while in the big island are in the mid-90s and in line with what we did in 2019. And I mentioned Maui’s on the, low-90s right now and still below historical levels back in 19. So great participation in Hawaii from that Diamond member base. What I think the Bluegreen, when I looked at Bluegreen and we looked at Bluegreen for a number of years we coveted that that business and especially around some of their great partnerships and their organic growth they’ve had with their membership program.
The one missing element for Bluegreen, I always felt was Hawaii. And I can tell you that the teams and the members at Bluegreen are super excited about the opportunity now to be able to experience Hawaii. Now that won’t occur until we get HEV Max rolled out and that won’t occur until the latter part of this year. But we think, as I talked about historically, Bluegreen hasn’t upgraded the same degree as the rest of the — or the broader industry. We think Hawaii is going to help move that upgrade along as well as the HEV Max and all the Hilton benefits. Bluegreen, I know the team members are super excited to be able to talk about Hawaii in their presentation going forward.
David Katz: And if I can just follow-up on the interesting Bass Pro commentary, obviously not fishing for details we can’t have but when we think about Bass Pro as a partner and potential sort of new structure of a deal is that something that’s this year dynamic or this year conversation where we might get some more detail?
Mark Wang : We’ll provide more detail as we move forward. I mean, we have a JV, there’s two parts of the Bass Pro deal, right? We have the marketing agreement and we have the JV agreement. And we were looking at a number of opportunities from a JV standpoint really creating this experiential outdoor type of enthusiast brand. And so, we have some plans and it’s too early to discuss them at this point. But as we move through the year or into next year, we’re going to be excited to announce some of these new JV properties. And also as I talked about on a previous from a — when I was speaking to them we’re going to talk more about some of the program developments that we’re going to be doing within the stores.
Operator: Our next question comes from the line of Patrick Scholes with Truist Securities
Patrick Scholes : Mark a follow-up question not similar to what I asked last quarter on the Park Hotel’s earnings call. Now, they really came out quite optimistic on the Japanese — return of the Japanese customer again. And I think when I asked a similar question last quarter, I think you were a bit more, I would characterize as subdued about the return of the Japanese customer. What are your latest thoughts on that? And certainly, we’ve seen a sizable increase in year-over-year in returning of the Japanese customer so far.
Mark Wang : Yes. So look, I think there’s a couple pieces for us, right? When you look at the Japan business, the good news for us is our owners are coming back and they are back pretty much back to ’19 levels. The other good news is if you look at the owners that are going to Sesoko, our new property in Japan, when you combine that those arrivals in Hawaii and the arrivals in Japan, they’re well over what we saw in ‘19. So our members are traveling at a very good rate. Now, when you think about new buyers, Japanese new buyers, we’re still down. When you look at the data today, I think in ‘23 arrivals from Japan were 63% below ‘19 now year to date, they’re 53% below ‘19. So it’s getting better. Now our new buyer Japan tours within Japan is we have 13 offices over there.
Those are back almost to ’19 levels. So the good news, our Japanese members are traveling. They’re staying at our properties. The good news is the new buyer Japanese are traveling, are back in Japan. We’re still waiting for those new buyers to come back to Hawaii from the general transient business. And our expectations right now are that it’s still going to take a number of years, but it’s moving in the right direction.
Operator: Thank you. Before we end, I will turn the call back over to Mark Wang for any closing remarks, Mr. Wang?
Mark Wang: Yes. Before we wrap up, I’d like to thank all of our team members for their continued service and dedication to our owners and guests to create memorable vacation experiences. Thank you for joining us today, and we look forward to speaking with you again soon. Have a great day.
Operator: Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.
