Mike Hug: Yes. Good morning, David, and thanks for the question. You’re exactly right. As far as the level of repurchases in the first quarter being impacted by the $46 million we spent on Accor, we’ve been pretty clear with our capital allocation strategy, grow the dividend, we grow the business, which we did in the first quarter, and we took the dividend up to $0.50. We then look at M&A. If we find the right strategic opportunity, which we believe we found with the Accor, then we’ll invest in that, which was about $46 million and then we spent $25 million in share repurchases. So you’re roughly in that low 70s range as far as capital allocation for the first quarter. If you look at last year, on average, our share repurchases were about $77 million.
So we utilized $72 million in the first quarter this year. Kind of puts us on track with what we averaged for each quarter last year. And your point is valid in terms of absent Accor; the level of share repurchases probably would have been higher. And then I obviously mentioned as well that our share repurchase level or authorization is down to $146 million at the end of Q1. And we will be at the upcoming Board meeting requesting an additional $500 million in authorization there. So should have plenty of capacity to do an elevated level of share repurchases compared to what we did in the first quarter.
David Katz: Perfect. And just to sort of follow that up, right, to that end, are there — how do you see the landscape of potential M&A out there and opportunities tuck-in or otherwise? Are you seeing more or less than what you might have seen one or two quarters ago?
Michael Brown: I don’t think the landscapes really changed. The industry, as we all are well aware has consolidated dramatically over the last decade. I think broadly to the favor of the entire industry. When you look at more than 80% of the industry, sales now approximately are from branded hospitality companies that the industries that are very strong balance sheet, consumer, flexibility is there, reputation is paramount, consumer protection is paramount. So I think it’s all in favor of the industry, but as it relates to M&A, there are — there continue to be a variety of companies that are out there. And as we have done since we spun in 2018, we’ll continue to evaluate them as opportunities arise. But ultimately, we’re very committed to our organic strategy.
We’ve had a nice addition through a partnership and acquisition of Sports Illustrated, which we’re happy with, and then a pure M&A with Accor International. So we think our opportunities are organic partnerships and acquisitions, and that diversified ability to grow is what really gives us what we think is a very strong foundation to solidify our VO growth going forward.
Operator: Our next question comes from Chris Woronka with Deutsche Bank. Please proceed with your question.
Chris Woronka: Hey, good morning, guys, and congratulations on another really nice quarter. I guess first question would be kind of on the new owner results for the quarter both the tour flow and the higher mix, which were pretty impressive, right? I guess, Michael, was there any — you talked about more channels contributing to that. Was there any one type or specific channel that contributed more than others or some geographic region? Just trying to get a sense as to kind of how sustainable that level of new owner growth is.
Michael Brown: Well, first of all, let me say simply the growth is sustainable. We have really three core areas that we focused on the last few years being owner growth, and the team has done a great job adding incremental arrivals and room nights to the owner mix, which means more availability for owner tours. That’s probably the smallest component, but still an important one. The partnership with Wyndham Hotels has continued to be fruitful. Both parties work very well together, and that continues to grow from what was zero to over $100 million last year as you heard grow in Q1. The steady drumbeat of our marketing team on methodically, region by region, opening new locations means that we’re not overly reliant on a singular market or a singular channel within a region.
It’s just a law of having that scale and getting one or two locations by region that add up over the course of 36 months that’s really creating that, and it’s all kicking in. And then I mentioned the more new aspect is we, at Travel + Leisure I have never been overly focused on package sales, which is pipeline generation for future tours. We’ve added that focus, which I would say is a fourth leg to the stool, and that is gaining great traction. The team does an incredible job there, and it’s been a very positive impact. You have to invest in that, and we talked about it late last year that we were investing in our package pipeline, which tends to drive costs slightly up. And we’re very early in the year starting to bear fruit on that investment.
And then what’s not in the numbers, but where I would say it’s — it will be sustainable as we go forward. As you add incremental relationships, whether it’s Sports Illustrated or Accor, they bring with them as well incremental databases and those provide incremental leads and ultimately tour. So I don’t think it’s an anomaly. I think its great execution and the result of commitment over the last 36 months of growing our new owner tours.
Chris Woronka: Great. Thanks, Michael. Very helpful. The follow-up is kind of transitioning over to the Sports Illustrated, which you’ve talked about. I know you said you expect to begin sales next year. But is it — it’s a two-part question. One, is it possible to announce other deals before the — for other markets before Alabama begin sales? And then, the second part of that is just mechanically, is all this going to go into the VOI segment? Or are there going to be components that go into the Travel and Membership segment as well? Thanks.
