Geoff Ballotti: … we’re really feeling good right now about, we’ve taken our 2% to 4% up to 3% to 4%, as you’ve seen, and we’ve just finished the first quarter with a 3.7% net room growth and believe we’re firing on all cylinders. The other piece of that, of course, is retention, and we’re making just great progress. I mean, we’ve always said that moving our retention up a point moves our net room growth up a point, and our retention continues to improve, both domestically and internationally. We’ve moved over the last few years, since going public, from 93 to over 95, and we had this quarter, domestically, a retention improvement of, I believe it was 20 basis points year-over-year. And internationally, our retention improved 30 basis points. So that 2% to 4% net room growth target that’s been increased to 3% to 4% with the first quarter at 3.7%, our highest quarter ever, gives us confidence to continue to move that number higher.
Joe Greff: Great. Thank you.
Geoff Ballotti: Thanks, Joe.
Operator: Thank you. We go next now to David Katz of Jefferies.
David Katz: Good morning, everybody. Thanks for taking my question. On — pursuant to the subject of NUG, I wanted to go just a little bit farther. One of the things we’ve been seeing, and I think, the deal that you included in your announcement exemplifies it, where we’re seeing some affiliate-type deals. Can we just talk more about the NUG environment generally? Should we be seeing more of those kinds of deals? And give us a little bit of understanding about the revenue intensity of those kinds of deals, because it seems to be, more than just yourselves, more of an industry trend? Thank you.
Geoff Ballotti: Sure. I mean, I think, if you look at our pipeline, what you continue to see, David, is it be weighted more to upscale and higher RevPAR brands, like WaterWalk, which I’ll talk about in a second. I mean, if you look at our openings this quarter, we’ll always be leading in the economy segment, but when it comes to the mid-scale and above segments, our opens in the first quarter, mid-scale, upper mid-scale, upscale, they were up 30%. Our executions, in terms of what our teams are selling, was more in that revenue-intense segment. It was up 70% year-over-year in terms of executions and you’re seeing that reflected, certainly, as we’ve laid out in our IP, in our pipeline, our mid-scale and above pipeline, in the more revenue-intense segments, which not only have a higher fee PAR attached to them, but they also have a higher royalty fee, ability to drive that royalty fee higher has gone up.
In terms of WaterWalk, that’s a conversion-straight franchise agreement that we’re very, very excited about. It’s a relationship with a really strong upscale brand in the more revenue-intense segments, with a great pedigree. It’s led by the very motivated granddaughter of the late Jack DeBoer, who I think many on this call know. He was the founder of Residence Inn and Summerfield and Candlewood Suites, and just run by a very experienced group of developers. Jim Anhut, a 20-year IHG veteran, Jim Mrha, a 35-year Marriott and MGM veteran, and Jim Straughan, who is the president of WoodSpring. These guys have built a dozen really great upscale hotels in some great markets that we talked about in the script. I mean, if you look at the cover of Matt’s IP, which he put out last night, you see a picture of one of those revenue-intense hotels, which — the WaterWalk by Wyndham Boise, which just received nine out of 10 star reviews on most of the online review sites.
So this is a great upscale complement to our economy and mid-scale Extended Stay product. It’s both new conversion and convert — new construction and conversion opportunities for us and for our teams out there, talking to owners of older upscale Gen 1 Extended Stay brands that are facing PIP requirements. It does not have a pipeline today, but we expect to build one. Our Extended Stay supply is underserved and demand is building. So our franchise sales teams will look to grow this brand aggressively and it adds an upscale Extended Stay brand for us to sell that we haven’t had to sell previously. And final point of your question, are there more deals like that out there for us to do? Absolutely.
David Katz: So as the follow-up, right, just, Michele, going back to part of your commentary about the potential of reaching four-times leverage, we’re always obviously listening with a high degree of scrutiny. Does that mean that there are maybe some things in the offing that we should just keep in mind and prepare ourselves for remainder of this year or was that just setting some boundaries?
Michele Allen: I think it’s setting some boundaries, maybe a floor and a ceiling with respect to share repurchases, David. But our first priority, we’ve always said for capital allocation is to invest in our business for future growth and that can be through organic or inorganic opportunities and that would include M&A. We’re delighted with the progress we’ve made toward our net room growth and pipeline growth objectives this quarter and so our strategy is working, and we’re able to secure some really great revenue accretive long-term franchise agreements. I think WaterWalk is a good example of us executing on that strategy. But when we think about the share repurchase, I would think about we’re probably going to do a minimum of that $400 million and then we could potentially go above the $400 million, depending upon the availability and actionability of those investment opportunities.
And the only other thing I probably would say is that we believe that the stock is significantly undervalued at the current trading levels and so that represents a compelling investment opportunity, which is why our Board recently authorized another $400 million in share repurchase, which then gives us the ability to go above and beyond that $400 million.
David Katz: Gotcha. Thank you.
Michele Allen: Thank you.
Operator: We’ll go next now to Dany Asad of Bank of America.
Dany Asad: Hi. Good morning, Geoff and Michele. In your prepared remarks, you guys called out domestic occupancy Rev, like finishing at 90% of 2019. Can you maybe help us just get a sense for the remaining 10 points, where are they coming from, whether it’s geographies or segments?
Michele Allen: Good morning, Dany. The remaining 10 points of occupancy are going to come from really all over the United States and then the Southeast Asia, China regions, both of which in the U.S. and in Asia-Pac, we continue to index below the 2019 levels. We see it not just in midweek, but also in weekend today. So, we really think that there’s opportunity across the globe to improve occupancy. I think you’ll see the rest of the year RevPAR forecast assumes that we’re going to pick up another point of occupancy. I don’t think it’s specific to any one particular region.
