Dori Kesten: Prefect. Thank you.
Operator: We will take our next question from David Katz with Jefferies.
David Katz: Hi. Good morning everyone. Thanks for taking my question. So, I wanted to just look into the owned and leased profit within the guidance versus what you just reported. It looks like it is flattish or down a bit. And I just wondered was there something in €˜22 that lifted it up, or are there some €“ if you could help us unpack that a little bit.
Leeny Oberg: Sure. Absolutely. So, a couple of things. David, I would say, first of all, we do have two really important innovation €“ renovation projects going on in €˜23. No surprise, Barbados was crushing it over the past year as you think about leisure demand. And as we really do a very full renovation of these properties, that will have an impact on un-leased profits. I would expect termination fees to be a bit lower as we look at €˜23 versus €˜22. We had a couple of other things that are close to offsetting. If you remember, in Q1, in particular, of €˜22, we had the German subsidies. So, they hit in Q1 of €˜22, and we, obviously, will not have them in Q1 of €˜23. We also had an agreement on a pack of leased U.S. hotels that involved a charge later in the year in €˜22.
And obviously, we won’t have that in €˜23. So, there will be a little bit between the quarters that moves thing around. Those two things largely offset each other. So, I really would look to both termination fees as well as the issue around renovation.
David Katz: Okay. Perfect. Thank you. And as my follow-up, I wanted to just touch on deletions quickly, because I €“ and I apologize if it sounds like a negative question. There has just been a lot of discussion about the NUG. But this 1 to 1.5 deletions going forward, is that what we should think about as kind of a normal course number?
Tony Capuano: It’s a good question. I would suggest to you that the 1 to 1.5 range is more reflective of some of the uncertainty that Leeny described in her remarks, and it resulted ultimately in us providing forward guidance on RevPAR in a wider range than we might historically have offered.
David Katz: Got it. Okay. Thank you very much. Appreciate it.
Tony Capuano: You’re welcome.
Operator: We will take our next question from Bill Crow with Raymond James.
Bill Crow: Hey. Good morning. I might as well follow-up on the NUG question. Assuming no large acquisition repeats in 2023, should we assume that 2024 is back in that kind of 3.5% range?
Tony Capuano: Well, Bill, we were excited to be able to give you some visibility into €˜23. €˜24 is probably a little ambitious. What I will tell you though is, notwithstanding some of the constriction in the debt markets, we are encouraged that we are seeing incremental acceleration of construction starts, albeit not back to where we were in 2019. We are encouraged by what we experienced both on the signings and openings front in 2022 with conversions and expect that momentum to continue to build both on an individual asset basis and a portfolio basis.
Bill Crow: Okay. And then my follow-up question would be on just the operating expense environment in the U.S. If you could just kind of give us a little bit of details on what you are seeing on the labor front, kind of year-over-year increase and then maybe all other expenses or the total expense growth expectation for this year? Thanks.
Leeny Oberg: Sure. As you have seen in our numbers, we have given you the expectation of 3% to 5% on the year. And that really, as you think about it, reflects just continuing to be more and more back-end business. So, whether it is higher travel expenses or a little bit more annualization of positions that we added in €˜21 and €˜22. But really, other than that, I would say, really quite normal. The wage pressures have moderated, Bill. And we are seeing a more normalized environment, both at the property level as well as above property.
Bill Crow: Great. Thanks Leeny.
Operator: We will take our next question from Brandt Montour with Barclays.
Brandt Montour: Hey. Good morning everybody. Thanks for taking my questions. Thank you so much. So, maybe starting with you, Lenny, if you could. You mentioned non-RevPAR fees growing €“ could grow 4% to 7%. I was wondering if you would be willing to break that out a little bit and talk about the credit card fee portion, at least in relation to RevPAR growth? And then what that would imply for residential fees and other?
Leeny Oberg: Sure. So, as you know, residential branding fees are bumpy. They really do vary depending on the timing of the opening of when a building is complete and people can actually move in and close their sales. So, they tend to vary. They have gone anywhere from $40 million to $70 million within the space of 2 years. As you have heard us say, we have a really robust pipeline of residential projects. And so while I would expect the residential branding fees to be more flattish compared to €˜22, that’s really just a reflection of timing. When I think about credit card fees, we expect them to increase both as a combination of a higher number of cardholders, and that’s partly in the U.S. and partly from the fact that we have added a bunch of other countries as well as increased spend.
I do think the average spend for an existing cardholder, that growth will moderate in €˜23 as compared to €˜22. Those are tied into how, I think generally we are seeing the economic view. So, for example, that might look more like inflation, while the wonderful terrific increase comes from more and more cardholders.
