Q2 2021 Hilton Grand Vacations Inc Earnings Call
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Good morning, and welcome to the Hilton Grand Vacations second quarter 2021 earnings call.
Telephone replay will be available for 7 days following the call the day.
Ireland number is 8 for 4.5.
Q2, 9 Q1 and enter pin 1 and 371 for zero 3 for.
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And I have questions you may re enter the queue to ask additional questions I would now like to turn the call over to Mark Melnyk, Vice President of Investor Relations. Please go ahead, Sir Thank you operator, and welcome to the Hilton Grand Vacations second quarter.
For 2021 earnings call.
Before we get started please note that we've prepared slides that are available to download from a link on our webcast and also on the main page of our website and investors on HCV Dot com we've.
And we may refer to these slides during the course of the call or on our question and answer session.
As a reminder, our discussion this morning will include forward.
And your such statements actual results could differ materially from those indicated by these forward looking statements. These statements are effective only as of today, we undertake no obligation to publicly update or revise these statements for.
And for a discussion on some of the factors that could cause actual results to differ please see the risk factors section of our 10-Q, which we expect to file.
We're looking for the conclusion of this call.
And any other applicable SEC filings, we'll also be referring to certain non-GAAP financial measures you can find definitions and components of such non-GAAP numbers as well as reconciliations of non-GAAP and GAAP financial measures discussed today, and our earnings press release and on our website and investors.
For a start HCV dot com.
As a reminder, our reported results for both periods in 2021, and 2020 reflect accounting rules under ASC 606, which we adopted in 2018 under ASC 606, we are required to defer certain revenues and expenses related to sales made in the period when a project is under construction.
And and hold off on recognizing those revenues and expenses until the period and when construction is completed.
To help you make more meaningful period to period comparisons you can find details of our current and historical deferrals and recognitions and table tier 1 and our earnings release for EBIT comparability and to simplify our discussion today our comments on adjusted EBITDA.
Real estate results refer to results, excluding the net impact of construction related deferrals and recognitions for all reporting periods.
And complete accounting of our historical deferral and recognition activity can be found in excel format on the financial reporting section on our Investor Relations website.
Finally, unless otherwise noted.
Results discussed today refer to second quarter, 2021, and all comparisons on a quarterly against the second quarter of 2020.
And a moment Mark Wang our President and Chief Executive Officer will provide highlights from the quarter and addition to an update of our current operations and company strategy.
After Mark's comments, our Chief Financial Officer, Dan Matthews.
We will go through the financial details for the quarter, Mark and Dan will then make themselves available for your questions with that let me turn the call over to our President and CEO Mark <unk> Mark.
Good morning, everyone I am happy to report another quarter of sequential improvement strong results that we released this morning.
We experienced a nice linear pace of contract sales recovery and Q2 with monthly sales versus 2019 levels and improving each month for the quarter.
And that's a continuation of the trend we've seen so far throughout 2021 and into our current quarter.
So we remain very optimistic about.
Business and our pace of the recovery.
But what stands out this quarter is the driver of those contract sales specifically it was a material improvement and tour flow that we saw and nearly all of our major markets.
Done a great job executing through the pandemic and I'm very proud of our.
About our games.
But as I've said in the past ultimately tour flow and customer acquisition and our key drivers of the business. So.
So, it's really encouraging to see a rebound and tours and with the release of pent up travel demand.
There are still a few pieces left to solve for namely the return.
<unk> owners and the recovery of our urban markets.
But with each passing day, we become more confident that it's just a matter of time before we see a recovery there as well.
And of course, we're maintaining our vigilance and cleaning procedures to ensure that our guests feel safe and comfortable as.
Our children and to our properties.
I'm also excited to report the results of yesterday's shareholder vote.
Which was an overwhelming approval of the Diamond acquisition.
We appreciate this vote of confidence from our shareholders and we're looking for to closing the deal and the coming days.
With today's results.
<unk> and the strong momentum that Diamond has also carry and we're in a terrific position to start our journey as a combined entity.
So let's get into some of the results for the quarter.
Our contract sales for the quarter were $259 million up 86% versus last quarter.
We saw improvement.
As it was in our case against 2019, and each month of the quarter ending at 80% of 2019 levels and June <unk>.
And we've seen a continuation of that momentum thus far in July.
And if you exclude Hawaii and our urban markets, where we only recently reopened our contract sales recovered and 9.
92% of 2019 levels by June.
BTG for the quarter was just under $4400 up 29% compared to 2019, owing to process improvements and the mix shift to owners.
We also saw our first positive contribution from average transaction price.
And since 2018 due to solid sales of our new projects, which are at higher price markets like Nowy Cabo and Okinawa.
These factors enabled us to drive strong flow through again this quarter with EBITDA margins. Several hundred basis points ahead of where we were in 2019 on lower levels.
Correct sales.
As I mentioned the standout contributor to contract sales this quarter was our tour flow.
Which doubled from the first quarter levels average occupancy for the quarter was 81%.
That's a big uptick from the 50% debt, we saw on the first quarter and it isn't far below the.
And <unk>, 9% occupancy, we had and the second quarter of 2019, which is a major accomplishment considering Japanese travelers haven't yet returned to Hawaii.
As we look out for the rest of the year occupancy trends remain very encouraging and key markets like Orlando and Las Vegas, South Carolina and.
And even Hawaii, we're seeing on the book occupancy levels equal to 2019 through the rest of the year.
So it's clear that the trend of people returning to travel that we saw exiting the first quarter continued into the second quarter and in some cases accelerated.
This is a great.
89, and that bodes well for our business and the pace of the recovery.
When we combine that with our continued execution driving BTG strength and our cost efficiencies and leaves us confident that we will achieve 2019 to run rate EBITDA as we exit this year.
Looking at our markets.
Rates on our regional resorts continue to shine and we're performing well above 2019 levels on strong occupancy and tour flow, which we expect to continue.
And our 2 largest markets Las Vegas, and Orlando trends were similarly strong and by the end of the quarter had returned to 2019.
On the pace of contract sales.
And these markets, we typically have a pretty even level of occupancy across the quarter, but this year, we saw a large step up in June.
This coincided with the elimination of capacity restrictions and Las Vegas, and the lifting of mask requirements at Disney.
Disney during the month.
These are good signs about where we are and the recovery cycles. Since people are willing to returns so quickly to these high traffic markets.
And our positive and an indicator of future trends as attractions and entertainment options return.
And Japan.
And we continue to engage our owners and drive <unk> sales through our end market Japanese sales centers.
To date the government has maintained its strict stance around the pandemic, which we believe will remain in place at least through the Olympics.
But even with this headwind our contract sales in Japan.
Japan epic consistent at about 70% of 2019 for levels.
Our new social project has had great traction since we launched pre opening sales earlier this year and intervals and Hawaii have remained popular with the Japanese buyers. Despite the current travel restrictions in place.
Turning to Hawaii similar to our other markets, we saw material improvement and our contract sales this quarter driven by strong domestic occupancy and tours.
And we've had success, replacing some of their tours and that would have historically been filled by the Japanese guests.
Our contract.
Net sales to domestic buyers and both May and June were record highs and well above the same period and 2019.
And that drove a nice improvement and contract sales at our Hawaii sales centers, which exited the quarter at 2 thirds of our 2019 contract sales pace.
The Hawaii.
And as recently loosened restrictions as well.
Cleanup, all inter island travel and eliminating the testing requirements for it vaccinated inbound visitors, which should make it even easier for domestic travelers to visit the islands.
Regarding Japanese tourism in Hawaii based on copper.
<unk> with our Japanese owners, we're confident that after 2 years would be and locked out and the islands.
We're setting up for a big release of pent up demand from Japanese owners and travelers once the restrictions are lifted like.
Like we've seen with the robust trends and our other markets.
And our best.
<unk> today is that we will see the beginning of return to the islands as we move into the fourth quarter ramping up through the first half of 'twenty 2.
Finally in our urban markets we.
We've seen some improved trends as restrictions have been eased, although we still.
Thats for markets to recover more slowly than the rest of our system.
We have a few properties left to reopen and New York and expect them to be back online by the end of the third quarter, marking a return to full operating capacity as a company.
Moving to our customer segment.
Owners and.
<unk> contributed to the inflection and our tour flow and solid throughout the quarter.
New buyers were particularly strong with tours up a 120% from Q1 levels and returning to 50% of 19th pace.
While owner tours were up significantly from the first quarter to.
New by 75% of 2019 levels.
This is a great sign as to new buyers return.
And we've got a robust pipeline of over 400000 packages built up to drive further improvement and that tour flow.
From a marketing perspective, our package sales case has returned.
For return to 2019 levels, which fuels that new buyer tour channel and Replenishes, our pipeline, even as we convert existing packages and the tours.
But we've also improved the quality of our pipeline over the course of the pandemic as we've learned and do more with less we focused.
Return better segmenting, our prospects and owners to make every 1 of those tours count.
Leading to both improve topline efficiencies through better close rates and reduce expenses from removing less profitable tours.
In fact, Q2 close rates for new buyers and we're still.
<unk> on day 175 basis points versus 2019 level.
And our owner close rate was up 450 basis points.
These efforts have driven the PPG outperformance, we've seen in both segments, including this quarter.
We faced very difficult comparisons.
And to the record Q2, <unk> last year, which were distorted due to the pause in the operations.
But a strong contribution from average price and our owner segment and a solid close rate performance from new buyers were key to holding our overall <unk> to nearly $4400.
And Theyre looking forward, we still expect <unk> to normalize with mix as our new buyer trend to catch up to others and trend back toward a more balanced mix of owners and new buyers sales.
But this famous forcing efficiency will carry it forward and did a post pandemic world and will be a key driver of NOG.
And which this quarter returned to growth of 50 basis points.
Looking at our other businesses.
Those new members and better activity levels drove higher revenues at our club and resort segment on.
Although it was offset by higher expenses as we balance our staffing levels to service.
Service the increased demand and we're seeing.
Our rental business performed exceptionally well due to the uptick in demand and it was only a few million dollars shy of our 2019 revenue levels.
Expenses remained higher over the medium term due to the elevated developer maintenance fees.
We've been happy with the margin performance and that business and.
And our forward bookings for the remainder of the year are still well ahead of 2019 levels, which should support trends for the rest of the year.
Overall, we're carrying great momentum across our business, which aligns well with.
Anticipated closing of the Diamond resort acquisition.
We received regulatory approval from the FCC and June along with structuring and Upsized financing package at favorable rates, which Dan will cover in more detail.
And yesterday, we received shareholder approval to proceed with the transaction.
<unk> action.
And which leaves us on track to close the acquisition in early August.
On planning has progressed well and the teams have been working diligently to prepare for day, 1 and beyond.
The longer term integration plan focuses on 2 areas, which will progress on parallel tracks.
The first area is cost efficiency driven through consolidation with the standardization of our organization systems and processes.
We expect to generate meaningful savings from the large amount of overlap between our business model as we mentioned and our announcement.
The.
Our second focus is to drive growth through expanded market presence and enhanced consumer value proposition.
We will begin rebrand and the diamond properties under our new Hilton and vacation club brand in the coming months.
And we will leverage this brand along with a wider range of price points and options.
A broader market and new buyers.
Importantly, the key is that we view these initiatives is creating material accretive growth and the coming years.
Diamond has continued to outpace the industry and their recovery and the strength they are seeing across our portfolio of.
Tradeshow properties mirrors the trends, we're seeing at ours. So clearly our goal is to minimize disruption and not impact their momentum as we integrate our 2 businesses.
And we'll provide additional details and the quarters ahead as we move through the process, but we're excited to be.
Nearing the finish line on closing this transaction.
So as we look at the business, we're very optimistic.
Trends in Q2 improved on the momentum that we saw exiting the first quarter, our largest markets have rebounded nicely and both of our customer segments.
For performing well.
While some challenges remain mainly the return on Japanese to Hawaii, and the recovery of our urban markets, we see their resolution more as a matter of when rather than.
And with regulatory and shareholder approval at the Diamond acquisition, our focus now.
For the closing of the transaction and implementing our integration plans.
We look forward to sharing the results of our combined business with you on our next call and I will now turn the call over to Dan and walk you through some of the financial details Dan.
Thank you Mark and good morning, everyone.
Turns melnyk mentioned in his introduction to our call our results for the quarter included $42 million and sales deferrals impacting reported revenue and net deferrals of 22 million and packing costs adjusted EBITDA and net income.
All references to consolidated net income adjusted EBITDA and real estate segment results on this call for current and prior periods.
So I'll exclude the impact of deferrals and recognitions.
Let's review the results for the quarter.
Total revenue and the second quarter was $376 million up 41% sequentially from the first quarter.
We saw sequential improvements and all of our business lines and.
And over 80% sequential improvement and our real estate.
Revenue for Q2 reported adjusted EBITDA was $92 million, which was up from $60 million last quarter EBITDA.
EBITDA margins for the quarter was 24, 5% and were up 230 basis points from Q2.2019 levels to.
The improvement was driven by strong results from our real estate and rental businesses is topline trends.
Improved and we maintained solid cost controls.
As we noted in our press release, we had $2 million and COVID-19 related benefits and the quarter pertaining to employee retention credit standard under government assistance programs and the U S and Japan that were included in adjusted EBITDA.
We're moving to this benefit would put your comparable adjusted.
<unk> EBITDA for the quarter at $90 million.
Net income for the quarter was $31 million.
Within real estate and contract sales for $259 million or 71% of Q2.2019 levels on tour flow that more than doubled from the first quarter.
TPG was just under $4400 and remains elevated versus.
19 levels.
And it has started to normalize and was down 6% sequentially and down 8% against all time high levels. We saw on the second quarter of last year for.
For the quarter, our total close rate was approximately 19% down 360 basis points versus the elevated levels from prior year.
Although we anticipated.
And this contraction as the business continues to recover towards historical levels. We are really pleased that we held in Dubai, our close rates flat year over year against difficult comparisons and above levels achieved historically.
And that close rate performance drove and slightly higher mix of sales and new buyers. This quarter, although it was roughly consistent with the mix of 2 third.
'twenty and under sales we've seen since the start of the pandemic.
Our fee for service mix for the quarter was 42%.
On the consumer lending side, our provision for bad debt was $28 million and our overall allowance for on the balance sheet was $203 million or 18% of gross financing receivables.
Real estate.
On G&A was $90 million for the quarter or 34, 7% of contract sales, which was down 500 basis points from Q2 and 2019.
Real estate segment profit was $51 million, which was up substantially from the 21 million and we reported in the first quarter.
Our strong contract sales performance, coupled with strict cost controls.
And as the profit margins of 29, 1% up 750 basis points sequentially and up over 75 basis points from Q2.2019 levels.
So a great job driving improved flow through and real estate this quarter.
And our financing business second quarter segment profit was $26 million with margin.
<unk> drove 70% versus a profit of $30 million and margins of 70% last year.
Profit was lower based on on lower average receivable balance of this year, although our receivables balance has bottomed and should continue to show sequential improvements from here.
Our gross receivable balance was $1.1 billion.
On.
On average cash down payment and year to date is 10, 8% and our portfolio average interest rate has increased to $12, 62% from 12, 5% to 6% last year.
Over the past 3 months, we've seen continued sequential improvement and our delinquency rate to 2% of our receivables portfolio versus 3%.
<unk> 2020 day.
Delinquency rates are now lower than those experienced in both 2018 and 2019.
Our annualized default rate was 6.5% versus 6.3% at the end of 2020.
Turning to our resort and club business on member Count with nearly 329000 members.
And non returned to positive growth at 50 basis points as of June 2021.
Revenue of $48 million was up 7% from the first quarter of 2021, driven by increased revenue per member and due to higher levels of activity on a release of pent up travel demand.
This resulted and resort revenue of $19 million, which was up versus.
Q1, as well as versus the second quarter of 2019.
Segment profit was $37 million with margins of 77% versus profit of $33 million and margins of 85% last year.
For 2020 results benefited from lower resort expenses, owing to the pause and operations in Q2 last year.
Rental and ancillary revenues were $54 million up nearly 70% from Q1, driven by significant improvement and demand for leisure travel.
And though all market experienced an uptick in demand on our properties in Hawaii and Las Vegas on the most material increases from Q1.2021.
Rental and ancillary expenses were $36 million and the quarter.
Segment profit of $18 million and margins of 33%.
Bridging the gap between segment adjusted EBITDA and total adjusted EBITDA corporate G&A was 21 million.
Which was up $6 million from last year's shutdown influence levels license fees were $19 million and JV income was $4 million.
Our adjusted free cash flow and the quarter was negative $13 million, which included inventory spend of $47 million.
As of June 30, our liquidity position and consisted of $318 million of unrestricted cash and $189 million of availability under our revolving credit facility and $450 million and capacity on the.
During the quarter, we completed several financing transactions to support our pending acquisition of Diamond resorts.
And with strong support from the credit markets, we were able to upsize, our plan and $675 million senior unsecured notes offering by 175 million to $850 million, while maintaining pricing at the Titan and have expectations 5.
<unk> on the same day, we successfully marketed a $1.3 billion term loan b at LIBOR, plus 300, and also appetite and have expectations.
And this facility will be funded upon closing of the acquisition of Diamond.
2 weeks later, we decided to launch a $425 million bond deal, which was upsized, a $500 million and price.
The $850 million notes at 4 and 7.4 and 7 this was driven by a solid order book that was just over 4 times oversubscribed.
These transactions coupled with our amended credit facility and have refreshed the balance sheet and will provide us with a solid foundation to support our integration efforts.
And as well and setting us up for success as we operate the new combined business.
Ultimately our debt balance as of June 32021 was comprised of corporate debt of $2.4 billion and a non recourse debt non recourse debt balance of $650 million.
It is important to note that the cash associated with the 2 bond offerings 130.
$5 billion on our balance sheet as a part of restricted cash.
Turning to our credit metrics at the end of Q2, our first lien net leverage for covenant compliance purposes stood at $1.6 9 times, our interest coverage ratio for covenant compliance purposes at the end of the quarter was $5.5 2 times.
And we'll now turn the call over to the operator.
And look forward for your questions operator.
Thank you ladies and gentlemen at this time, we will be conducting a question and answer session. If you'd like to ask a question you May press star 1 on your telephone keypad, a confirmation tone will indicate your line is and the question queue. You May Press Star 2 and if you would like to remove your question from the queue for participants.
<unk> using speaker equipment, and it may be necessary to pick up your handset before pressing the star key and the interest of time and if you could please limit yourself to 1 question and 1 follow up so we may get to everyone's questions and then re queue for additional.
Our first question comes from the line of David Katz with Jefferies. Please proceed with your question.
Good morning, everyone. Thanks for taking my question I appreciate it.
I wanted to ask about.
And the Diamond, we're obviously waiting with bated breath as I'm sure you are to get Diamond closed.
Can you just talk about.
The to do.
Immediately upon closing and give us a sense for.
What that might look like once you get done.
Sure David This is mark.
And you look we are extremely excited about this opportunity and.
And the teams have been working.
Working tirelessly slate to develop our plans and.
We have a very very detailed integration plan that.
The charts out how we're going to be integrating the 2 companies together, but probably let.
Let me.
Provide a little bit of color on on how.
<unk>.
We're looking at the rebranding process and.
As you know the rebranding and diamond and launching our new membership offering a really essential to driving the revenue synergies.
Our plan right now is that we're going to be introducing a new compelling membership offer.
As early as next year.
For the first part of the year.
And the plan is really to position.
All of our consumer.
Based on promotions and all of our marketing is going to be all unify and under the Hilton Grand Vacations Company brand. So as we talk to customers out there as we promote.
For our products and offerings is going to be all under sales and Greg fabrication and brand today as you know Hilton Grand Vacations has its own point based club and membership program Diamond has its own place.
<unk> based membership program that's early next year.
We're going to be offering and 1 new.
Membership program under the HCV flag, and we're going to be using 1 consistent currency for points and so.
And that's going to really help us better manage the value proposition and importantly, create a lot of value and and what we're going to be offering from a property standpoint.
HCV today has 2 brands, we've got the Hilton Grand vacation and brand, which is our upper upscale brands. We have the Hilton club brand, which is our luxury offerings as we announced earlier in the year.
We are going to be launching and converting the diamond properties over to our new upscale brand and Hilton and vacation club.
And so that will start in earnest.
As we as soon as we close we're looking to have the first tranche of properties.
Converted over the first half for next year so.
So anyway similar to Hilton honors just stepping back on the membership side.
Hilton honors works and connect all the brands and Hilton has tid 18 brands, we're creating this new membership program that is going to really.
Improve the value proposition and we're going to go to 1 single currency, it's going to allow us are members that have substantially.
And some more access and flexibility more properties. So we'll go for 100 and we'll go from 60 properties for 150 properties are.
Our customers are going to be up be able to upgrade across the brands and or they can also on multiple brands.
Other features.
Added Hilton features and <unk>.
And this enhanced honors and Hilton usage, and we're going to be introducing and events in our lifetime.
And to the program, which we have not had and the past and Thats something thats done and has been very proficient at so.
And so we're really excited so I would say the bulk of the.
The activity.
Between now and the beginning of next year as we relaunch and start rebrand and the properties and we launched our new membership program.
So hopefully hopefully that gives you a little bit of.
Color on power and we're going to.
Proceed on it.
It does and.
And while I have follow ups on your going to respect marks rules and.
Good for the back of the line. Thank you.
Thanks.
Our next question comes from the line of Patrick Scholes with <unk>. Please proceed with your question.
Hi, good morning.
Net.
Similar to the questioner asked to mirror applications.
And also on <unk>.
<unk>.
Paul yesterday.
How should we think of.
About the loan balance.
Folio.
And going into next year, and I guess right and we just use the legacy.
Portfolio.
Without the acquisition.
Should we think about that balance vs.
What you work for 2019 and as it relates to expectations for the interest income from that thank you.
Hey, Patrick it's and thanks.
With regards to our portfolio.
Sure.
And the different dynamics and.
For 2 other individuals.
Similar question too.
As you know and 2018, we announced a large inventory of investment and owned inventory, which was really shifting the mix of what percentage of our contract sales were fee for service to actually own slashed it up so.
And so from that perspective, remember that the portfolio under fee for service stays with the developer and we only.
Service those portfolios, we did not garner the benefit at the financing and the mortgages. So as we shift to owned which started in 2018.
You will see our portfolio.
<unk> start to grow and that will be consistent with diamond because all of their inventory is actually and as well. So what you'll see what I would say is we've officially bottomed out from our portfolio and we expect to grow from here now 2021.
And 'twenty 2.
<unk>, 1 is clearly not going to be back to.
COVID-19 was.
Youre looking at to be and.
And a similar neighborhood and 2022, probably slightly below because you do have to build back up as youll recall, the pre COVID-19 portfolio balance was about $1.3 and went down to 131, but we anticipate gross going forward.
We're actually on on that for them.
Okay Alright. Thank you and then just a quick housekeeping follow up.
After the issuance of the shares.
With the Diamond transaction.
Just for modeling purposes, what would be the diluted.
Share count and and I know.
Yes.
The earnings release, you didn't give it for what it was at the.
For <unk> for what should we be ballpark using for among them well.
I want to say.
And just round numbers $88 million plus 34.
Okay. Okay.
Yes.
Okay.
Fair enough. Thank you.
And as a reminder, ladies and gentlemen, it is star 1 to ask a question.
Our next question comes from the line of Brent <unk> with J P. Morgan. Please proceed with your question.
Hello, everyone and good morning, and thanks for taking my questions.
Quick follow up Mark to your explanation of the.
New sort of.
While our membership program for.
For the combined.
System I guess the question is does that.
Does that program require legacy HGV deed owners to opt in or upgrade into that program or trade and into that program and do you need.
And.
On a certain level of debt activity and lets say Hawaii.
And for because there is a lot of Japanese owners and LIBOR for on a U S potential.
Buyer to buy into be able to access why you just explain that a little bit more because it's obviously pretty.
<unk>. Thank you know youre right. It is.
And <unk> brand and it was very good question. It is complex and obviously I just touched on.
Some of the complexity and some of the strategy.
And what's going to happen going forward is.
Anybody that's bought and the past whether it's HEV member for.
And for Diamond member.
Their rights.
And to what they purchase and the past will not be disrupted at all.
And so they will continue to have their current rights under their current program current membership.
And we're launching as a new membership so the new membership requirements.
The binder and the new membership as you can either buy the membership outright or if you upgrade going forward.
And whether you upgrade into any 1 of our 3 brands you will then get the new membership. So this is really incremental so we're going to be basically starting from.
Zero and building new member, we're going to be offering this new membership going forward.
So hopefully this will be and.
And incentives to drive additional.
Upgrades, we think the value proposition will be much better for our new buyers as well.
A wider price points.
And.
We also know that.
And our ability to reach even deeper into the Hilton database.
Yeah.
Okay that makes a lot of sense. Thank you for that and then also on diamond.
And what you've learned over the last 3 months about about their business and and I guess specific.
You did you did mentioned that debt their recoveries and near and yours. If you could add any and any color to that how the diamond consumers sharing and how and.
And how that business has performed and the last few months that'd be helpful.
Yes.
We showed it in our prepared remarks.
Pro forma and very well.
And the recovery is.
Based on what we have.
Over the last couple of days and.
Really at the top of the industry and and I think a lot of it has to do with first of all great execution.
But their footprint.
Dry.
5.2 and regional markets is really playing out well and this recovery as the pandemic.
And obviously after we close we will be and a better position to share more on the business and and we look forward to really updating everybody on our progress going forward, but we're very pleased with the momentum of their business and it.
Sets us up well and as the momentum for our business has also been very very positive too.
The timing couldnt be better really to put these 2 companies together and.
And Brent this is Dan just on that point.
And planning to release their quarter their second quarter earnings I believe tomorrow and posted on.
Under what's had very similar to what they did and the first quarters and you'll be able to see that directly from them tomorrow.
Perfect. Thanks, everyone.
As a reminder, star 1 to ask a question.
There are no further questions.
Really I'd like to hand, the call back to Mark Wang for closing remarks.
Alright, well, thanks to everyone for joining us this morning, and thanks again to all of our team members for their hard work and dedication and providing our guests with a safe and memorable experience when they are traveling with us and we look forward to.
And if you are talking to you on a few months. Thank you.
Ladies and gentlemen, and this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.