Michael Brown: Yes, very important sort of the strategic direction for the next few years is our growth this year will be tour led. As I mentioned, we had 18% growth last year. We’d expected our tour growth this year to be over 10%, which is a combination of a number of factors. We mentioned that our owner room nights will be — are already projecting up versus 23%. That results in incremental owner tours. We have a great relationship with the Wyndham Hotel groups that, for the first time, broke $100 million of sales last year. We expect that to grow as that relationship remains very strong and productive. And then lastly, back to Chris’ question is our regional teams continue to grow incrementally, good profitable, local marketing channels.
As it relates to the volume per guest, we are projecting at the high end of our long-term guidance range. And that really — that with our tour growth is an important dynamic to look at because with our expected new owner growth this year, this will put us over 35% of our transactions being new owners. And for those who are — those of you familiar with our story, we said once we get to 35%, we are set up for the long haul to be stabilized, and we can start making decisions on a year-on-year basis as to if we want to grow that number or not. So that implies that as we get beyond 2024, the decisions on — you should have less of an impact on VPG related to a mix adjustment unless we proactively make that choice beyond this year.
Patrick Scholes: Okay. Thank you, I have another question here, and then I’ll hop back in the queue, the B2B, B2C business. Would you say that’s fully on the cost side, fully right-sized or where you want it to be at this point?
Michael Brown: I do. It’s — it’s never easy to make changes. And I think the industry has evolved dramatically over the last 12 years. And at some point, the nature of the structure of the industry changes, and therefore, you have to change the structure of your business. Our teams continue to deliver great exchanges with over 3.5 million members in that space, but you recognize structurally where the exchange business is, which as we shared, will be low single-digit growth this year. And you have to make those changes, which is what we did. We still love the business, high margin, high free cash flow and think that this sets us up for a very clear line of sight to our performance in 2024, which, candidly, was a constant conversation that we had on these calls.
And that change along with our clear line of sight to this year’s performance should hopefully result in a lot of calls this year where people are nodding their heads because we’re hitting those expectations and achieving the goals we laid out on this call.
Patrick Scholes: Okay. Good to hear. I’ll jump back in the queue. Thank you.
Michael Brown: Thank you, Patrick.
Operator: Our next question is from Brandt Montour with Barclays. Please proceed.
Brandt Montour: Good morning, everybody. And thanks for taking my question. I’m curious on Accor, if you could give us a sort of sense for the run rate EBITDA for this asset at the time of purchase. If you put anything in your ’24 guidance and assuming no, but also help us understand sort of if there are synergies that you see in that asset. And if there’s a fee to Accor and how that — well, I am sure there is but how that fee is structured with them so that they’re incentivized to sort of help you with their database?
Michael Brown: Absolutely. So their run rate EBITDA is approximately $6 million to $8 million. And as I mentioned previously, is they have really stalled their sales efforts coming out of the pandemic to decide exactly how they want to take the business forward. So as we look at this year, we should be closing this deal at the end of Q1, which means we have three-fourth of the year, which means very immaterial EBITDA for this year, $2 million to $3 million. But our investment and real focus this year will be the re-ramping and growth of the sales efforts related to the Accor Vacation Club. There’s no one on this call that doesn’t know the brand and know the quality of it and having the level of resorts in the Region 24 the Accor team is excited about it.
The Travel + Leisure team is excited and very similar — it’s a license fee arrangement. So they’re incented for us to grow their member count, their top line and ultimately leading to more resorts at more Accor destinations.
Brandt Montour: Sounds great. And I guess just one quick follow-up. Is your expectation that, that could be accretive to VPGs when you guys get everything running the way you want it to?
Michael Brown: The short answer is yes. The more detailed answer is materially against $2.2 billion of sales. It’s not going to move a VPG needle. But the Accor Vacation Club is an upscale brand which tends to bring with it slightly higher VPGs.
Brandt Montour: Great. Thanks a lot.
Operator: Our next question is from Dany Asad with Bank of America. Please proceed.
Dany Asad: Hi, good morning, everybody. My first question is on margins, just kind of with the implied like VOI segment and kind of what we’ve talked about so far compared to ’23. And how much would you quantify, if you could, the impact of remixing new owners and kind of driving that tour flow for ’24?
Mike Hug: Yes. As you’d expect, I mean, our margins for next year for the VOI business will be down a little bit. The $30 million interest headwind, obviously, is what’s most impactful in terms of what’s driving that margin down a little bit. We finished on a consolidated basis, 24.2% this year. We’ll be down just a little bit once again because of the interest headwind. And then to your point, on the new owner generation that does have about $10 million in pressure on EBITDA as we move up to the 35%. So the consolidated drop in margin I talked about is primarily at the VOI level. And if you think about to the comment I made earlier about how are we confident in that long-term growth going back up to high single digits, in addition to the variable cost and interest headwinds that we have in ’24, we do have this continued investment in the new owner mix.
