Michael Brown: The short answer on the first question is absolutely, we anticipate announcing more locations before next year. The pipeline is as robust as it’s ever been as it relates to opportunities for Sports Illustrated both in university towns and in other locations. So we do look forward to sharing more locations as we move throughout this year. As it relates to which segment Sports Illustrated will be in, it will be in the Vacation Ownership side of the business as we start to produce results. What I would just add, although you didn’t specifically ask is, as you start to look at the economics of Sports Illustrated, our overall plan looks alike like it did with Club Wyndham as far as really aligning inventory build and spend to top-line revenue production.
Obviously, as you do your first resort, you do have some front-end investment that’s a little more intensive than usual. But once we get Sports Illustrated, the club up and running and announcing a second, third and fourth resort, our full intention is to match inventory spend with the success of sales, and the profile of the P&L should look very similar to what we see on the Club Wyndham side.
Chris Woronka: Okay. Very good. Thanks, Michael.
Michael Brown: I appreciate it, Chris.
Operator: Our next question comes from Patrick Scholes with Truist Securities. Please proceed with your question.
Patrick Scholes: Hi, great. Michael, in your remarks, you painted a pretty optimistic picture of your leisure customer. When I look at the RevPAR trends for your parent company, Wyndham, specifically domestically in 1Q, we saw some negative year-over-year RevPAR. How might one reconcile your optimism versus possibly negative RevPAR for domestic Wyndham in the first quarter? Thank you.
Michael Brown: Well, I don’t think — I don’t — first of all, I wouldn’t overly correlate our results to any brand within the hotel space, first of all. And I think secondly, I would reiterate a comment that Mike Hug made, which was our FICO in Q1 was 742, which is the highest it’s ever been for the company, which shows the results of precise decision we made several years ago to start elevating our customer characteristics. In the end, I think you have to come back to the underlying premise of Vacation Ownership, which is seven out of eight of our owners have fully paid for their ownership, which means our owners are definitely going to travel because they love the bigger accommodation. They see the value in their ownership.
And more broadly on leisure travel being based in Orlando, you see it every single day at the airport; travel is tremendous at the moment. And so I think we look more broadly at leisure travel as opposed to comping to either a hotel group, an airline or a cruise line, we just look across to the parks and what we see. You go to Vegas, one of our big markets, the one that’s over 10%. Vegas travel is very strong. And I would say our success is a combination of the overall business model, our team’s execution and third, that leisure travel is strong.
Patrick Scholes: Okay.
Mike Hug: I would note that the — sorry, just one point, Patrick. I would note that even though Vegas is over 10%, it comes in at 12%. So the diversity we have in our portfolio that we talked about many times definitely pays off. And while we noted on we want to be an over 10%, I think it’s important to understand that over 10% means really only 12%. So we don’t have anything that’s 15% or higher or even 12% or higher.
Patrick Scholes: Okay. Certainly encouraging. Michael, a follow-up question here. You do have some Maui exposure. Can you talk about how Maui is recovering, how far off you are still from, I would say, pre-fire levels? Thank you.
Michael Brown: So we are — for the state of Hawaii, have no incremental or additional exposure to Maui. We really have very, very minimal sales on Maui more of our exposures on Oahu and the Big Island. So for us, the economic impact to our P&L is non-existent for Maui.
Patrick Scholes: Okay. All right. I do have some more questions. I’ll get back in queue. Thank you.
Michael Brown: Thank you, Patrick.
Operator: Our next question comes from Patrick Scholes — excuse me, our next question comes from Ben Chaiken with Mizuho. Please proceed with your question.
Ben Chaiken: Hey everyone thanks for taking my question. Sorry if I missed it, regarding Accor, can you talk about the opportunity for upgrades from those 30,000 owners? Is there an opportunity to sell the broader system to this existing pool? And then I guess under the assumption that they do upgrade, do the owner’s legacy ownership stay with Accor? Or would that get upgraded? Have you guys find that out yet? Thanks.
Michael Brown: Good morning, Ben. You didn’t miss — you didn’t miss an answer. It’s a good question. Accor Vacation Clubs operated independently. So should they — we own Accor Vacation Club. So if they upgrade, they’re going to stay an Accor Vacation Club member, they’ll simply own more. And it is an opportunity for us. What we’re excited about that transaction beyond the quality of the resorts and the existing owner base that’s already members of the Accor Vacation Club, which is over 20,000. They really haven’t been nurtured and marketed to and part of Accor Vacation Club sales operation for several years coming out of COVID. That part of the region was especially restricted, and that was one of the great opportunities of working with the Accor team was there’s a lot of potential in the business.
We felt we were the best ones, and I think they did as well to activate that. And when we closed on the deal, March was the first month that we began reopening, reramping and growing that side of the business. So whether it’s upgrades or new owner potential, there’s a lot of opportunity going forward to grow that brand. And expanded geographically as well as replicate all the great work that’s been done with Wyndham. And creating more loyal customers and ones that are used in the Vacation Club product.
Ben Chaiken: Understood. That’s helpful. And then one quick one. This has been pretty well covered on beginning of the 4Q call, but you have a couple of things working against you this year. You’ve got the variable comp headwind. You’ve got some interest expense. Have you quantified the new owner mix margin? And obviously, these things don’t — it’s just kind of like one and done, but the new owner mix headwind either from an EBITDA or margin standpoint in 2024?
