Patrick Scholes: Okay, thank you. Yes, I just have a couple of follow-up questions. Mike, can you talk about expectations for loan loss provision going forward? I think the long term, you’ve talked about in the past around 18% to 19%. And then related to that, have you — I assume no changes to your credit standards. Let me know if there have been any? And then just if you also could provide a little bit of color on anything you’ve noticed since last earnings on customers’ propensity to pay their loans? Thank you.
Mike Hug: Yes. Thanks again for the questions, Patrick. First of all, on the provision, we’ve been consistent in terms of that being in the 18% to 19% range. Obviously, we ended up the year 2023 at the lower end of that range demonstrating, right, the good performance in the portfolio. We continue to be very happy with portfolio performance and obviously driven in large part by the move up to minimum 640 FICO. Our new originations are coming in at 739 in 2023. That’s up from 736 in 2022. So we’re very, very happy with the credit quality, and I don’t see us changing that in the near term. I just couldn’t be happier with the way the — our consumer is performing when we look at delinquencies, very happy with the level of delinquencies.
Obviously, you see more pressure on the lower end of the FICO than the higher end, but nothing that is out of the ordinary or outside of our expectations. And that’s another reason we continue to have confidence and great execution on the ABS transactions, right? Those things are something that we do very regularly and our quality portfolio makes it an easy decision for investors in those notes to jump in three times a year when we go to market. So very happy with credit quality, very happy where the provisions at. I would say that if it does end up at the high end of the range in 2024 because of the conscious decision that we make to sometimes try to generate more financing from those good quality FICOs. So we do want to get that interest income growing again, doing everything we can to offset the interest expense headwind.
And so don’t read us coming in at the high end of that range in 2024. If we do a quality issue, make sure you listen to what we say as it relates to the level of originations we have and obviously the long-term earnings growth that drives.
Patrick Scholes: Okay. Thank you. And then just shifting gears a little bit here. Michael, I know you folks have a little bit of Hawaii exposure, certainly far less than some of your peers. But could you talk about recent trends in Hawaii visitation, et cetera? And then if you have any granularity on how that might break out, say, versus Oahu versus Maui?
Michael Brown: So we have significant Hawaii exposure in Oahu, Maui and the Big Island and Kauai. We only have one resort in Maui and what I would say for our 2023 performance, there was no material change from what we performed in that market from 2022. And as it relates to 2024 bookings, they look very similar to what they were in ’23 and ’22. So for us, we really didn’t see any material variability in performance, both sales or occupancy for the year between the 3 years, ’22, ’23 and ’24. And again, we only have the one resort on the Island of Maui.
Patrick Scholes: Right. Okay. And then just shifting gears in the South Pacific or Australia. It seems like Accor is — their properties are in that region. Any plans for expansion or growth, perhaps, down the road to take that to other destinations outside of where it’s currently based?
Michael Brown: So, the key to expansion is good execution. So our first priority will be to make sure we execute against the plan we put forward. But the short answer to your future expansion question is yes. We want to establish the relationship, build a good one with Accor just like we have with Wyndham Hotels, which has proved to be highly successful. And then from there, gain the mutual respect and alignment economically to grow and do more locations, countries and regions of the world.
Patrick Scholes: Okay. I’m all set. Thank you.
Michael Brown: Thanks, Patrick.
Operator: We have reached the end of our question-and-answer session. I would like to turn the conference back over to management for closing remarks.
Michael Brown: Thank you, Sherry. We were very pleased with our fourth quarter and full year performance, particularly in our core business vacation ownership. We are effectively leveraging leisure travel momentum, which we expect to continue in 2024. As indicated by our announcement of the Accor agreement, we have great traction in executing our multi-brand strategy. We are excited by the opportunities ahead to drive earnings and adjusted free cash flow and to deliver value to our shareholders. I want to thank our teams who work tirelessly every day to put the world on vacation. And thank you for participating. Have a great day, everyone.
Operator: Thank you. This will conclude today’s conference. You may now disconnect, and thank you for your participation.
