Shaun Kelley: Hi. Thank you, everyone. Hi. good morning. Thank you for taking my question. So, I’m just trying to think through a couple of the building blocks you gave for 2024. I mean, if we just start with the provision piece, if — excluding obviously the one-time kind of the one-time forward component, if we just run rate at this on a modestly higher level of provision, can you give us any guideposts for how we should think about, let’s call it, a year-on-year headwind to either the provision dollars or I think more importantly, the — just broad-based company EBITDA or margins as the results to just kind of accruing more for that going forward. Is that something you could help us with?
Jason Marino: Yes, Shaun. this is Jason. I think as John mentioned, we think we’re in a good place for the overall portfolio. I think as you look forward into Q4 and then into next year, we’ll have a tiny headwind, I would call it, maybe 50 basis points as a percentage of contract sales, something in that neighborhood. So, I don’t think it’s a big change to expect for next year going forward. but John mentioned that 9.5%, 10% area for a loan loss provision on a normalized basis, assuming the low-60s propensity. I think that’s a good place to think about it.
Shaun Kelley: Great. Thanks for that. And then, yes, just on the financing piece, I think we’re all trying to grapple with the broader rate environment. You did kind of call this out. I think one of your competitors kind of gave us a little bit of a ballpark, but give it, relative to the size of your program, again, appreciate it’s early and you’re probably still running through some of these numbers for your own budget purposes. but can you help any kind of guideposts or broad ranges you can give us to think about the financing headwind again, I believe that, T&L will talk about roughly $30 million on what I believe is a bit of a larger loan book than you guys have.
Jason Marino: Yes. So, really, Shaun, it depends on where you think rates are going to go next year. We did our deal in earlier this year, and we did a print at around 5.5%. We’re in the market here pre-marketing right now, and we’ll be doing a deal here potentially in the short term. So, we’ll see more where, where that lands, where you see where the T&L deal priced, call it a month or so ago, obviously rates have moved both in the underlying as well in the spread. So, I think that’s kind of the ballpark in terms of the movement that you can expect. And then really, it just depends on what happens next year. So, your crystal ball is probably as good as ours in terms of the rate environment.
Shaun Kelley: Okay. thank you very much.
Operator: Thank you. Our next question comes from the line of David Katz with Jefferies. Please proceed with your question.
David Katz: Hi. Good morning, everyone. Thanks for taking my questions.
John Geller: Good morning, David.
Jason Marino: Good morning.
David Katz: I wanted to — good morning. I wanted to just focus on Abound a little bit from a higher level. It’s good to see that it’s, that it’s showing some signs of improvement. but I wanted to just double back on sort of why now? What did we know about Abound going into it, that — or or what did we think we know that, that, that didn’t quite happen the way we anticipated? There obviously were some surprises with it. So, I just wanted to go back on the strategy of it, please.
John Geller: Sure. yes. So David, the thing we knew going in was that as we talked about, it’s a better product, right, the overall offering. And we always knew, because we’ve transitioned to different products before that there can be some impact. So, a part of it is educating, specifically, because the sites that we’re transitioning are your legacy Vistana sites. So, think Westin and Sheraton, we’ve transitioned most of the Westin now; the Sheraton, because we still have inventory in the Sheraton Flex product is still selling the old product. It gets you into Abound. It’s just not selling the new Marriott vacation of bound product. So, we knew, there would be some part of part of transition and there could be bumpiness. A part of it is, there’s really two things that need to happen.
One, those owners, who bought the Westin Flex or the legacy Westin V product [ph], that’s what they bought. They bought for a certain reason and that was that product fit their traveling needs. Now, we’re introducing to them a new product, right that they can enhance their traveling needs, but might be what we think is a better product, might not be a better product, or they need to experience. So, we can — we can try and educate them. We send them a lot of information online and information. but really, the best chance is when people come in and they want to take a tour and understand it. So that part of the education process. The second piece is people actually using the product. And that’s what I talked about in my comments. by the time, we launched it this year, very few people — people had elected to use their vacation, like they always had for ’23.
Now, you’re seeing about three, three and a half times more people this year for ’24 elect into the Abound program from the legacy Westin and Sheraton. So, use the product, better educate yourselves on that. And then the other piece, right, like we’ve always talked about is it is a different sales pitch, right. They were sold the Westin product a certain way based on what that product was and the offering. And now that sales team and we do all the training and then we retrain and — but there is a bit of getting the sales team experienced and confidence selling to the new product. So, we attempted to do all the things that we could to lessen, what that disruption could be in terms of lower VPGs, things like that. And it was probably a little bit more than we expected.
Now, the good news, like I talked about is you’re starting to see the rebound here in the third quarter. And while we’re not all the way back to pre-Abound launch on VPG. we’re getting pretty close, right on an overall basis. So, it looks good. Our VPGs here in October were basically flat to last year, which was probably arguably a little tougher comp than we’ve seen year-over-year, right. So, the trends today all look very positive and — but it’s going to continue to help to get those legacy Vistana owners to actually use the Abound program. And that happens with a little bit of time.
David Katz: Perfect. Thank you very much.
Operator: Thank you. [Operator Instructions] Our next question comes from the line of Ryan Lambert with JPMorgan. Please proceed with your question.
Ryan Lambert: Hi. thanks for taking my question. Just wanted to get kind of your view on the attractiveness of Maui longer term. Do you still find it to be an attractive market? I know it’s got some kind of different dynamics with the labor market and the majority of the economy being driven by tourism and you have Lahaina that was significantly impacted. So, it’s a lot different than what you might see in a kind of a Florida hurricane scenario. So just wondering, how you think about that market longer term and if your opening of Waikiki property next year has any sort of effect on that. Thank you.
John Geller: Yes. No. we’re still very bullish long-Term on Maui, obviously what happened in Lahaina, very tragic, but to your point in terms of the overall island versus a hurricane for example, that could come through and really do a lot more damage more broadly to an island’s infrastructure like we see with some of the hurricanes in the Caribbean, it is a bit isolated. As I talked about, we’ve seen our occupancies come back for October. We probably ran in our five resorts there in West Maui on the vacation ownership side, call it about a 60% occupancy, which given they just kind of reopened. So, you’re seeing the owner demand. we expect that to build going forward. Our resort operations is a couple percentage points down on being fully staffed right now, but we’re working through some of that.
