Mark Wang: Yes. Look, well, look, Bass Pro is extremely unique in itself, right? And I don’t know if you’ve had the opportunity to visit one of their destination superstores but they are a destination unto themselves, right? And as I mentioned earlier, I’ve had the opportunity to meet with Johnny and his team and — and they’ve done amazing work at their big seater lodges, in their stores, the quality of commitment, their focus on conservation. It’s just — it’s so impressive. And for us, we think it’s just a massive opportunity with the marketing pipeline and now being able to leverage our brand with them and they’re excited about that. And we believe we’re going to be able to do much more with Bass Pro than Bluegreen was because of our portfolio and diversification of our platform and then our ultimate access experiential platform. So yes, there could be other opportunities out there but we think we have found and are acquiring the best one for sure.
Chris Woronka: Just, I guess, kind of a quick follow-up to the quarter now, if I could. Is there any common theme and this is probably more as we look out the fourth quarter than kind of dissect third quarter? But on the lower outlook for Q4, is there any common theme geographically or if you look at the customer, where they’re not showing up or where the conversion rate is lower, whatever it might be and maybe we need to start Hawaii out of that, even though it’s obviously a big piece. Just trying to get a sense as to whether there’s anything you can pinpoint to identify the one specific area of softness.
Mark Wang: Yes. I would say that Orlando has been cost more than we had expected, right? There’s been some softening there. And we think it’s partially just driven around just some of the noise around Disney and what’s going on there. But overall, when you look at our Mainland business, though, it is strong. Tour flow has essentially recovered and were at historical levels for owners, VPGs. The real impact — one of the drags for us is, unfortunately, has been APAC. And we’ve talked about Maui, so I won’t dive into that. But we’re also continuing to wait for the Japanese to come back to Hawaii which is really important. Now our owners are coming back pretty well. And — but the Japanese in general, are still down 65%, 70% from pre-pandemic.
And really, part of that is it’s less about the pandemic now. It’s more about the currency. So all in all, I would say our mainland business is generally in good shape other than a little softness in Orlando. It’s really more around our APAC business and it will come back. And it’s just going to take longer than we expected.
Operator: The next question is a follow-up from the line of Patrick Scholes with Truist.
Patrick Scholes: Okay. Right now, Bluegreen has a licensing agreement with Choice Hotels. One, how much longer does that agreement last for? And is it realistic to expect when that expires, you’ll be dropping that agreement?
Mark Wang: Yes. We’re not going to talk about the agreement in detail here. But I would say, look, we’re excited to work with Choice. And we believe they have been a good source of incremental and diversified lead flow for Bluegreen. And we’ve been in active discussions with them about the structure and we look forward to sharing more with you as we get closer to the deal closing. But Bluegreen formed a nice partnership with them and they’ve built a nice little pipeline of tour flow and — on a relative basis and putting in context of the combined company, it’s small. It’s about 5% to 6%, what the combined company will be. But we’ve got a plan to accommodate those leads and we’re going to have the appropriate guardrails in place around the customer and the brand and all the partners are aware of the structure. And again, we’ll share more, Patrick, as we go further down the reader.
Patrick Scholes: And then my last question here. I would say the other major competitor last week talked about their maintenance fees, going up mid-teens for next year and that will be a higher cost for them for any unsold inventory. Curious what you think your maintenance fees might be going up next year? And would that be a similar challenge for you folks as well?
Mark Wang: Look, we anticipate maintenance fees going up, driven by various cost pressures mostly property insurance. But ours will not be going up mid-teens, probably mid-single digits plus in that ballpark.
Patrick Scholes: Okay. So more in line with inflation as opposed to much higher than inflation.
Mark Wang: That’s correct. Okay.
Operator: Thanks. Our next question is a follow-up from the line of Brandt Montour with Barclays.
Brandt Montour: So I just had another one. I wanted to dig in a little bit more on the synergies. The cost synergies of $100 million versus I think Diamond was $125 million at announcement. And Mark, you kind of made it sound like you feel a little bit better about these ones this time around because you have the integration platform ready to go. You’ve got all these learnings and like someone else said it was more plug and play. But is the — but it also sounds like the Bluegreen system is — the owner base is undersold, whereas we could probably argue that Diamond was oversold. And so that’s an interesting sort of dichotomy. Is that firmly on the revenue synergy side, I would expect though. So I guess, do you agree with that assessment?
Mark Wang: No. Yes, I totally agree that the revenue synergy opportunity really lies in VPGs around owners. Their new buyer of VPGs actually hold up pretty well against ours. When I think about our VPGs to owners are almost double what Bluegreen is generating today. And we’re not looking to double those. We’re taking kind of a conservative approach and somewhere in between that. On the cost synergy side, I think; we think these cost synergies are achievable in 18 to 24 months. And we have a pretty good track record now of being able to achieve those through the Diamond acquisition. And we’ve looked at it very, very carefully. And I think we’ve been very thoughtful in our approach.
Dan Mathewes: Yes. I think the only thing I’d add, Brandt, is going through the Diamond transaction, obviously, we learn different lessons. But when we talk about roughly $100 million in cost synergies with regards to Bluegreen, cost synergy is still requiring a lot of work, right? And it’s — and you have to have a thoughtful process. But roughly 65% of the cost synergies is driven by headcount which when you think about cost synergies, it’s probably the easier ones to garnish, if you will. But the thought process around who is where the redundancy is identified, that’s where the Diamond history plays in well, right? Now we’ve learned, hey, in Diamond situations, we had made certain estimates where we cut too deep here and not too much there. And we applied those learnings here and we’re really comfortable that we’re going to get to that $100 million in cost synergies, really confident. So that’s good.
Brandt Montour: And then — for those of us that don’t cover Bluegreen or maybe know that asset as well and again, contrasting with Diamond. Is it fair to say that there’s no friction that you expect from the removal of the Bluegreen brand from the consumer process, right? The consumer is always sensitive to sort of confusion and brands change around. But the Bass Pro is really where the consumer affinity lay. And so Hilton sort of cutting Bluegreen out of that process is sort of a no-risk situation. Is that right?
