Michael Brown: Sure. So in the sense of how much of the — of our guidance of $910 million to $930 million, what the headwind is incorporated into that guidance? Is that the question?
Ben Chaiken: I guess so, yes. Yes, like that you’ve got the $17 million variable comp; you’ve got $30 million on the interest expense side. Yes, is there — how to maybe quantify or bracket the new owner mix?
Mike Hug: Well, basically, the way we’re looking at is kind of when we spun off and started to focus on new owners; we’re working to cover that through other areas of the business. So when we look at our overall margins for the year and you can see in the first quarter, basically, our margins are flat year-over-year despite the percent of new owner sales moving up to 37%. So when we think about margins for the year, we expect to be able to cover the impact of moving up to mid to high 30s on new owners, the part that obviously we’ve been most challenged with is covering the incremental interest and compensation expense that you mentioned. So when you think about margins overall, I would just factor in the two items that you mentioned as it relates to kind of the full year and we’ll work in other areas like we did in the first quarter to cover the impact of the growth in new owners.
Ben Chaiken: Understood. Yes. My point was more so going into 2025, like that phase. You don’t have that. It sounds like this is the new owner mix that you want to be at and so —
Michael Brown: Yes. Okay. So that you’re heading into 2025, if the year progresses like it started, we would be going into 2025 not having the commentary more than likely that we want to move up 200 basis points on new owner mix. That would be a decision we would make early in the year of where are we, do we want to put more into the new order to grow that mix or not. But coming out of Q1 at 37%, it starts 2024 in a great place so that we don’t need to face that headwind in 2025, if it continues in the remainder of this year.
Operator: Our next question comes from Ian Zaffino with Oppenheimer. Please proceed with your question.
Ian Zaffino: Hey guys, thank you very much. I know you guys touched on the FICO score a little bit. Can you maybe talk about maybe how each cohort is doing on the FICO side? Is the kind of every cohorts may be performing as expected? Are you seeing any areas of outperformance or underperformance? And I have a follow-up. Thanks.
Mike Hug: Yes. Good morning, Ian. It was a little fuzzy, but I think your question was kind of how the portfolio is performing kind of by FICO band. And as you would expect, what we’re saying is the most pressure on the lower end of the FICO bands. And as you move up, less pressure. Overall, I think the portfolio for the most part is in line with what we expected. The improvement in credit quality that we focused on as we exited COVID is definitely paying off. So the provision for the full year to 19%. We’re seeing a little bit of pressure, but you look at the provision coming in for the quarter at 17.4%. So nothing that I would say is unusual by FICO band, just the normal more pressure at the lower end and overall comfortable with where the portfolio sits as it relates to performance.
Ian Zaffino: Okay. So you’re not necessarily seeing anything notable maybe on the low end or anything like that so. And then can you also maybe touch upon some of the stronger sales centers that you saw and maybe what we could kind of define from that, whether it’s more destination areas or more kind of destination drive-throughs or Vegas and Orlando or is it other areas? Any other color you could give us there would be helpful. Thanks.
Michael Brown: So I think the question is just a little muffled, was around the regions and if there’s any specific cohort. To me, two of the data points that reaffirmed the booking window, delinquencies, VPGs, I always like to look at booking windows and our booking window of 120 days is very typical of what we’ve seen in good leisure travel times. As well, if you remember, during the pandemic, we got up to 90% to 95% drive-to locations. That number is back to 70s — low 70s, which means the consumer is behaving like they always sort of had with us. I would say, therefore, there’s nothing sticking out other than there’s a lot of reconfirmation that leisure travel is behaving like it does in good times for us. Top destinations in the first quarter for our bookings were really Orlando, Myrtle Beach, Tennessee, great drive-to destinations.
Daytona Beach was a big booking for us in Q1 as well. So nothing standing out as unusual. And with the very diversified resort system, we don’t have any other exposure. I will say, and we announced it last night, we’re — for that 28% that’s flying to the destination, we’re definitely excited about our new partnership with Allegiant Air that has about 125 destinations in the U.S. It’s a great partnership that is complementary from our combination to their mode of transportation. So we’re excited to announce that partnership last night. And another example of working with other great brands to help grow our package pipeline but also to be a positive partner to put business back into their business, in this case, air travel.
Operator: [Operator Instructions]. Our next question comes from Brandt Montour with Barclays. Please proceed with your question.
Brandt Montour: Thanks, everybody. Hi. So Mike, on that Allegiant comment, my first question was on Allegiant. Is that channel — can you just maybe size that up for us? And compare and contrast it with sort of some of the other third-party channels you have and when we can sort of extend the timing when we can sort of expect to layer into tour flow?
Michael Brown: Well, Allegiant is a great airline. They have 15 million loyalty members and 125 destinations in the U.S., getting to a lot of our — there’s a lot of overlap with where we’re located. So that that partnership, we’ve been highly successful working with Wyndham Hotels and their database tying in people with affinity. So the initial plan is to do cross-promotional marketing, air and stay. I can’t size it up today on this call because we’ve just finalized the agreement last week, but you would expect more and more Allegiant, Wyndham or Margaritaville packaged sales that combined the two brands and destinations where we have the overlap. And that’s where we’ll get. So you’ll over time, see it play out in our package pipeline and in our marketing spend back to Allegiant.
