Patrick Scholes: Okay. And another major trend here sort of long lines of normalization. Do you think it’s just sort of normalization also being caused by Americans traveling abroad, you’re primarily a domestic company or taking cruises? Do you think that’s also a driver of that and that was maybe more impactful than you initially thought?
Mark Wang: I think, Patrick, the bottom line is we — our expectations was an acceleration into the back half of the year. And what we saw is we saw some softening in arrivals but still strong arrivals better than we saw in the previous year. And as I mentioned earlier, I think there’s some compounding effects with the consumer right now around just all the information out there. So there’s a bit of moderation in the — in our VPGs and our conversion rates. And we expected that moderation but not to the level that we saw. Now we saw stabilization early in October and we also saw it in the back half of September. So yes, all in all, I think it was just very high expectations, still performing well from a relative standpoint when you look at overall transactions in tour flow. But I think at the end of the day, it was just very high expectations.
Operator: The next question comes from the line of Brandt Montour with Barclays.
Brandt Montour: Congrats on the announcement. So curious on how — if you’re willing to share Mark or Dan, how you sort of got to the price premium and if there was sort of a process that was run for Bluegreen or how that sort of came together between you two organizations?
Mark Wang: Yes, there was a process. And I think when we went through that process and we’ve known Bluegreen for a long time. And as I mentioned earlier, we think they’re a very innovative operator. And we think this deal has a lot of strategic value for us. And I talked about a lot of the value, the pipelines, the new buyer that the Bass Pro deal, etcetera. We value the business on a future cash flow and EBITDA, inclusive of the $100 million in cost synergies. So that’s how we got to the basis on the value. But Dan, if you want to any…
Dan Mathewes: Yes, Brian, just to add a little color to that. Look, when you look at Bluegreen stock how this historically traded, they’ve got the AV structure which always had some kind of impact to where it trades. When we went through a valuation process, it was based on the classic discounted cash flow structure, that then translates into the multiple that we disclosed today on a synergized basis. But as you can see, the synergies play a key role in the valuation. I think we’re very happy where we landed at 6x LTM 9/30 on a synergized basis. And it’s actually almost — actually a full turn less than what we acquired Diamond for on a synergized basis. And when you look at our 2 transactions, they are by far the lowest multiple paid for any entity in the last 5 to 7 years. So we’re pretty pleased with where we’ve ended up.
Brandt Montour: That’s excellent color, guys. And then on the synergy number, is the — how do we think about the 70 — well, 750 million-odd Bluegreen LTM sales, VOI and how that would — how would that — how do we calculate fees to Hilton on that hitting the system? And is that included in the $100 million cost synergies?
Dan Mathewes: The cost synergies does not include the license fees. So there’s — okay. So there’s a couple of components here, right? So cost synergies of roughly $100 million and then there’s revenue synergy opportunity between $75 million and $100 million which more than offsets the license fee increase to Hilton. The license fee increase at the low end of that revenue synergy would be floating around the mid-40s, just to give some color on that perspective. Mark mentioned earlier that Hilton did invest in this transaction and they did it in a very similar fashion that they did with the Diamond transaction and that’s what the fee ramp. And to oversimplify because there’s a lot of ins and outs; to oversimplify, it’s effectively a 4-year ramp at 3%, 3%, 4% and 5% which is consistent when you hit run rate where we are today. There are some ins and outs on different pieces but that’s where it boils down to.
Mark Wang: Yes. And they also invested in the Bass Pro and other partnership relationships where we have a lower license fee for those partnerships because there obviously are cost related to those partnerships that drive the deal. And I think the actual performance we’ve seen with Diamond obviously informed us around these estimates, especially around the cost side.
Operator: Our next question comes from the line of Chris Woronka with Deutsche Bank.
Chris Woronka: And also congratulations on the announcement. I guess a higher-level question for you, Mark, is when you looked at this, when you looked at Bluegreen and the customer and kind of similar to what you did a few years back with Diamond. And is there any, I guess, correlation with the fact that Hilton is also kind of shifting some of its unit growth initiatives into the, I guess, what we call kind of the more mid-scale area of the lodging business. I mean is that kind of where you see the biggest buyer pool opportunity growing, if that makes sense?
Mark Wang: Yes. No, great question. I think, look, when we looked at this deal, one of the things that was very attractive to us was the demographics, right? It’s a younger owner. 75% of the members are at Bluegreen or Gen X or younger, — still a very good FICO score above 7.25. So for us, attracting solid customers earlier in the stage of their life is important. And we have — with HGV Max and Ultimate Access, we have, over time, the ability to grow them through our system and move them through our brand portfolio. From a property perspective, the one thing that we really like about Bluegreen is just the consistency of the quality of the properties. And they do fully align with the growth of Hilton’s portfolio, as you mentioned earlier, as well as the auto member base.
So — and Hilton, as you know, they — Chris and Kevin announced last week, now 173 million members, it’s still the fastest-growing hotel-royalty program. So we thought it made a lot of sense strategically and it will really support our net owner growth and allow us to continue to build embedded value in the business.
Chris Woronka: Okay. I appreciate that color, Mark. And then kind of another, I guess, somewhat theoretical question or a higher level question for you. Obviously, Bass Pro, that’s a very unique asset. But at a higher level, do you think maybe going forward, there’s more focus on some of these retail partnerships with companies that maybe have that, whether it’s an outdoor angle or a travel angle. It seems like this is kind of becoming a new way to source customers in maybe in an indirect way. But any thoughts on that as to whether that’s going to be a new, I guess, secondary avenue for customer acquisition?
