Q2 2023 Marriott Vacations Worldwide Corp Earnings Call
Greetings and welcome to the Merit vacations worldwide second quarter 2000 twenty-three earnings call. At this time all participants are in a listen only mode of question and answer session will follow the formal presentation if.
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As a reminder, this conference is being recorded.
Would not like to turn the conference over to your host Mister Neil Goldner, Vice President Investor Relations.
Vacations worldwide.
Please go ahead.
Thank you Melissa and welcome to the in Mary applications worldwide second quarter of 2023 earnings Conference call I am joined today by John Geller, President and Chief Executive Officer, Toni Terry Our executive Vice President and Chief Financial Officer, Jason Marino, who will be assuming the role of CFL effective September 30th when Tony.
Tires.
I need to remind everyone that many about how much they are not historical facts.
Considered forward looking statement under the federal Securities laws.
A subject to numerous risks and uncertainties as described center I C C filings, which could cause teacher results to differ materially from those expressed or implied by all comics.
If I were looking statements and a freshly sibley issued last night as well as or how much in this call or affect them only one made and will not be updated as actual events unfold.
Throughout the call, we will make references references to non-cash financial information.
Can find a reconciliation of non-GAAP financial measures are hard to ignore remarks, and the schedule is attached to a press release.
As well as the industrial relations.
Page of our website at I R M.
M D W C dot com.
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Now my pleasure to turn the call over to John Geller.
Thanks, Neil and good morning, everyone and thank you for joining our second quarter earnings call.
While we were pleased to Rodney early in 90 per cent occupancy in the quarter with the high B P. Geez, we had last year and a mixed macroeconomic environment. This year, we knew coming into the quarter that comparisons were gonna be tough.
As a result, we expected V P G to be lower on a year over year basis, they'll we expected this to be offset by higher tours. However V. P. G declined more than we expected in the second quarter and walk towards did grow 4% that was a few points below our expectations.
We believe most of the V P G differences quarter compared to what we expected was a result of the changes we've discussed in the past specifically the transition to selling a bound by Mary I vacations at most of our legacy stay on a sales centers.
And the changes we've made it the legacy welk locations for.
For example, despite the difficult comparison contract sales at locations that didn't transfer.
Gives me that didn't transition from selling a legacy the stay on a product we're only down five per cent and a quarter while sales at legacy just stay on the locations that made the change we're down double digits.
We also continue to focus on driving new owner growth with first time buyers rapper representing one third of our contract sales this quarter up 200 basis points from the prior year, which is good for the long term health of the system.
And our highest vacation ownership business, we expect to rebrand the legacy wealth resorts later this month to align them under one unified Brad hide vacation club. In addition, we will be adding more vacation options for our highest owners, including cruises and tours as we launched the beyond program in a few weeks.
Moving to our exchange in third party management segment active members that interval international were unchanged compared to the first quarter.
Inventory utilization was very strong in the quarter, an average revenue per member increased 1% compared to the prior year.
However, remember deposits remain below pre pandemic levels.
And our Aqua asking business revenue was lower compared to the prior year due to lower a D. R's in Hawaii as a result, excluding cost reimbursements and D. R. I America's which we sold last April revenue in our exchange in third party management technique declined for process compared to the prior year.
Despite the difficult quarter. It was heartening to see our vacation ownership resorts at nearly 90 per cent occupancy, reflecting that continued demand for leisure travel and I want to thank our associates, who I've been working tirelessly deliver exceptional vacation experiences for our owners members and gas.
Looking forward, while I'm not satisfied with our results. This quarter, we have some of the best brands in the hospitality industry and sought after markets and an experienced management team that has successfully integrated new businesses and launched new products in the past and I'm confident that just to the strategic changes we've made will provide long term.
Benefits in fact V. P. G improves sequentially in June and July even with an increase in first time buyer mix and while we are seeing some variability in the macro economic environment, we still expect to grow contract sales for the full year. We also expect to grow adjusted earnings per share. This year, excluding the impact of last year.
[noise] alignment, reflecting the benefit of our share repurchases add to generate between 540 $600 million of adjusted free cashflow illustrating the strength of our leisure focus business model with that I'll turn it over to Tony.
Thanks, John .
Today I'm going to review, our second quarter results the strength of our balance sheet liquidity and our 20 twenty-three outlook starting with our vacation ownership segment. We grew tourists 4% in the second quarter to 96% a pre pandemic levels. We also grew our package pipeline by 10% from a year ago and.
Being the second quarter with more than 230000 packages. However.
However, while we expected V P G to decline due to last year's difficult comp it did come in lower than expected.
As a result contract sales declined 10% compared to the prior year, though they remained 17 per cent above 2019.
Adjusted developed an impressive decreased 20% year over year.
Two $180 million, despite lower sales adjusted development profit margin remains strong at over 30 per cent.
While we expected rental process to be down in the quarter declined more than anticipated due to lower rented and lower than expected DVR.
And with the moderation of revenue per available key we now expect rental profit could decline by $15 million to $25 million this year.
In the stickier parts of our vacation ownership business financing profit increased $3 million, excluding the 3 million dollar sales reserve pick up.
<unk> acquired notes that we recorded this quarter.
This was primarily driven by higher average notes receivable balance and a 30 basis point increase in the weighted average coupon rate, partially offset by an increase borrowing Lee.
Reserve management revenue increased five per cent and a quarter, what profit declined $2 million due to higher labor and other costs. The profit is still expect it to be a roughly 5% for the full year.
As a result, adjusted EBITDA inner vacation ownership segment decreased 11% in the second quarter to $245 million, where margin was strong at 32 per cent.
Moving to our exchange a third party management business adjusted EBITDA declined $3 million compared to the prior year, primarily due to lower 80 Ars at our class.
Operating margin was 52% for the quarter.
Finally, corporate G&A expenses, largely unchanged compared to the prior year.
As a result total company adjusted EBITDA declined 13% to $222 million in the quarter and adjusted EBITDA margin was 27%.
Moving to the balance sheet.
We ended the quarter with approximately $1 billion in liquidity, including $242 million of cash $59 million of gross notes receivable eligible for securitization and $684 million a revolver capacity.
With $3 billion of corporate debt outstanding at the end of the quarter, our net debt to adjusted EBITDA ratio stood at 3.1 times.
Roughly in line with our targeted two and a half to three times leverage range.
We ended the quarter at an average interest rate of 3.6% with no corporate debt maturities until 2025.
We have a combined $550 million of interest rate hedges that mature by next April .
However, after those had just mature or corporate debt will still be 70 per cent fixed with a pro forma interest rate of only 4.1%.
We ended the quarter with $2 billion of non recourse that related to our securitized notes receivable.
In June we reviewed our warehouse facility extending its maturity and increasing its capacity for $500 million to support growth.
Finally to sales reserve increased $8 million year over year on our two and a half billion dollars gross originated notes portfolio.
Defaults were up 50 basis points compared to the prior year in delinquencies were up approximately 70 basis points.
Delinquencies were higher than the previous year, we have seen them trend downward in the first half of 2023.
Our new guidance also assumes 100 to 150 basis points higher sales reserves compared to last year.
We continue to return excess cash to shareholders during the quarter repurchasing $82 million of common stock and paying $26 million in dividends.
Our board of directors increased our share repurchase authorization to $600 million during the quarter with $561 million remains at the end of the corner.
Moving to our 2023 guidance.
As you saw in last Night's earnings release, we now expect contract sales to be between 1.84 and $1.9 billion. This year. This is roughly five per cent lower than our previous guidance with the difference being driven by mix of lower tours and lower V. P. G.
We expect V P G to improve sequentially in the third quarter, but to be down year over year, while chores are expected to be up a few points compared to last year's third corner.
However, we still expect 2023 contract sales to increase year over year, reflecting the continued demand for leisure based products.
Despite the lower contract sales guidance, we still expect 2023 full year development merging to be around 30%, even after a slightly higher sales reserve.
As I mentioned earlier, we now expect rental profit to decline this year versus being up 10% in our previous guidance and for resort management profit to be up.
We also expect financing profit to increase slightly excluding last year's alignment benefit.
We expect exchange in third party management profit declined $15 million to $20 million for the full year versus our previous guidance of roughly flat due primarily to lower transaction interval international as well as lower adr's in our class.
As a result, we now expect our 20th twenty-three adjusted EBITDA to be between 880 and $910 million, 8% lower than our prior guidance.
As a reminder, we also reported a 44 million dollar alignment benefit in last year's third quarter.
Do not expect to occur this year.
Moving a cash flow.
We have a strong balance sheet and ended the quarter with roughly $470 million of excess inventory enough to support approximately $2.4 billion in future sales.
We sold three non-core assets during the quarter generating $14 million in total proceeds, which we exclude in the calculation of adjusted free cash flow.
We also paid down $135 million over outstanding.
And of course.
With the lower expected adjusted EBITDA. This year, we now expect are adjusted free cash flow to be between 540 and $600 million or.
Capital allocation strategy remains consistent and that we continue to use our free cash flow to grow the business and in the absence of compelling acquisitions, we believe our best use of excess free cash flow remains returning it to shareholders.
As always we appreciate your interest in Maryland vacations worldwide with that will be happy to answer your questions Melissa.
Thinking at this time it will be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is into question.
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Our first question comes from the line of course.
Especially with your question.
Hey, guys things more than anything for taking the questions.
I guess, maybe we could drill down a little bit as you guys go back and unpack the quarter on on the abound I mean.
Where are you implemented it.
Was this just an issue of salespeople not having you know a lot of experience kind of selling yet or was it more pushback from consumers just trying to get a sense for what you think yeah, a little bit off.
Yeah, well yeah. The the sales folks have been well trained on on the product that sad.
Yeah. When you when you change from one product to another right and can take a little bit of time to get your sales pitch down and groove and on that so a little bit of that I I think the other is the consumer and really an education of the consumer and you know this is a little bit like when yeah. This.
Prior to us being a public stand alone company. When we went from our weeks the points product in 2010 right. The people that bought weeks were sold weeks. They were sold a specific product and now you're rolling out a new product, which arguably it's a better product in terms of options for the consumer and how they can use it and flexibility.
Witty, but it takes some time the best thing that can happen is those you know existing owners that bought into either the west and flax or the Sheraton flex product. They play in the a bound program right. They start to use or ownership. They go stay at different resorts they use different exchanges remember that.
They're bound program offers more cruise in and trips and things that were already in the Marriott program. So there is education slash getting the consumer to use the product and because you know we launched it you know call. It earlier this year a lot of those folks had already made.
Made their vacation plans right under their old product. So there there's just that it's gonna take a little bit of time education and you know the best is getting the the western and and the Sheraton flex owners using the product, which just takes a little bit of time on the transition side and Chris one add onto that is at.
Educating the owners means that there's something out there to talk to them about and they are interested in the new products. So that is a good source for us for tours.
Some something to come in the door to talk to us about.
Okay sure understood and then follow up question is just on.
Comment towards towards the end of the prepared remarks on the you know some of the reserves going up is there is it possible to get a little bit more color is that coming from any.
Specific or a particular segment or you know customer type is there any way to kind of parse through that and say you know this gives us gives you confidence that that there's not gonna be a larger problem. Later can you can you maybe give us a little more detail on it. Thanks.
Yeah, Let me starting named John has anything to say you can kind of jump in in total when you start looking at our reserves now we have a two and a half billion dollar originated notes receivable balance out there. So we're pretty big portfolio. When we took a look at the quarter. You know, we had about $11 million of corruption.
Fault and those defaults you know I came from a lot of different places, but you know we tend to take a look at those and treat them as permanent.
And that's one way that we do our calculation.
So we don't assume that it's a an acceleration of anything on our default curve. We do assume that they are permanent and they're gonna continue into the future. So we feel that we have an adequate reserved for those right now we feel that we have increased the default rate or b.
Films Reserve rate that we put against contract sales for the remainder of the year and that'll get us to the right place based on what we know today. So in a couple of other things Chris I think when you you know Tony mentioned it in his remarks, yes, while delinquencies right, which is a potential indicator of future defaults are up over last year I.
You know as we said coming out of Covid, you know a lot of our delinquency. If you looked at Adam over our historical where below right and so now you've seen one you've seen them come up there you have to go back in time, those delinquencies, yes higher than last year, but yeah arguably more in line with some of the delinquent.
We've seen over time the other key point is that the trend to those delinquencies. This year have been have been coming down right. So that's that's a positive sign as a potential future indicator to Tony's point, yeah, we and our outlook you know, including this charge.
Charge, we took in the second quarter Gotta variability range of some higher defaults, but [noise] yeah. We we feel good about kind of where we're at today.
Okay very helpful. Thanks, guys.
[noise] thinking our next question comes from the line Ah Brant Montclair with my account. Please proceed with your question.
Hey, everybody. Thanks for taking my questions I do want to.
Talk a little bit more about a bound maybe we could just start with reminding us how much of the system.
With selling under a bound in the second quarter.
How much is it and how you know what's the cadence of the roll out from here.
Sure well, what when you talk about about yeah.
Yeah.
The vast majority of the system.
Or the majority I should say is selling about right. Because you are married legacy sale centers are selling the about but the the core of the are bound program is the Marriott vacation club right now the are bound brutal allows the west in in church, and flex owners to come in and play in that broader.
They want to understand the new product the best way for them to to understand it and see the benefits are actually use the product, but we're educating them to Tony's point, it's it's helping drive owner capture owners want to come in and and as well as you know, obviously first time buyers and educate them on the product. So all that works <unk>.
On now there are some you know on the Sheraton Flex side, Yeah, we still have inventory in the Sheraton flex. So there are certain legacy this data centers that haven't transitioned over yet and those are doing you know kind of what we were expecting versus the broader so it is really the ones and you know more broadly we talked about.
The high it right even more so with the the yeah, well legacy sales centres transitioning over we've seen big impact there as well.
Okay, and you know Johnny you likened it to the transition from weeks to points, which which if I recall was it was a multi year in a in a really you know.
Really.
Disruptive.
Campaign for you guys and.
Remember that you know that that transition had tons of financial positive financial implications in the back and for balance sheet management and inventory manager and all those different things.
Is there yeah.
Can you just remind us.
What the there's there's meaningful benefits that are gonna come to you from about when do you think when you look out at this sort of playbook. When do you think that the benefits will start to override the disruption that you're seeing from from these specific.
Legacy branch.
Yeah, I I think it will build over time I you know if you go back to the you know the weeks the points I would say it was a much bigger change than what's happening here <unk> and I know you you're you're looking for this will all be behind us and you know six months or nine months, but I do think you know what we're what we're going to see is continued improve.
As we as we move forward here through this year, we obviously based on the outlook you know, we're not expecting it to bounce back, but like I talked about Big picture. You know we did C. V. P. G improved sequentially in June and July and I can tell you right now I'm not saying you know one month is is where the core.
That was gonna be but now we're running V. P. G's that are about five per cent higher than we saw in the second quarter right. So you're starting to see yeah. It won't be a straight line you know, but you're starting to see some improvements more broadly in the V. P. G. So.
Yeah, we're hoping we we continue to get through a lot of this and get better as as we get through this year and in the next but we're we're already starting to see some.
Some green shoots if you will as as we start this transition. So once you get hard to put a a deadline or saying yeah, they'll all be it all be back to normal, but yeah. The other transition I would point to a little bit different whereas when we bought for stand up his standup D. P. G for down twenty-five for Shat Red you know relative to marry at.
We didn't have a good sense as to how long that would take but I think we move pretty quickly there and probably even faster than we expected to get those V. P. G up and get the benefit out of there. So we got the right leadership with you know my point is we've got leaders that have been through this before they're hyper focused on getting this right as quickly as possible.
And I'm confident we're gonna get there and brand I'd add onto that that we've probably already seen a little bit of benefit here from a balance sheet perspective of the bound remember we were selling three different trust and we're running low on an inventory in the Western Trust, specifically and had we not done you're bound program, we would have probably had to.
Bill inventory in that trust over the last couple of years. So that's one of the reasons why we have lower inventory spend.
Because we have a band we knew it was coming and now we're selling one major trust to our customers instead of three separate.
All helpful color. Thanks all.
Yeah.
Thinking.
Question comes from David catch with Jeffrey. Please proceed with your question.
Hi morning, everyone your dad or.
Okay. So you know a couple of things.
You know why not have your analyst meeting Jack Open you know, which obviously has a little bit of data desk to it but it has some 20 twenty-five targets and I I suppose the assumption should be you know that those get pushed out by some amount and we'd love to get some sense about you know.
How far that could be and you know coupled with that and just listening to your comments on the last couple of questioners have we seen the worst of the pressure that you know is from Ah abound.
You know do do we feel like we.
Have the rollout of world of high at you know under good control.
Right at this point and I suppose what I'm asking is what's your what's your degree of confidence that the guidance. We have today is relatively firm versus where we might be 90 days from now with the next time, we address it.
Sure.
So taken the the second part as I said are a little bit earlier, yeah. We are seeing sequential improvement so yeah.
That said as we look at our guidance for the full year, we haven't assumed that.
We get a hockey stick up on sales at the legacy transition <unk> sites and the welk sites that are transitioning we're assuming some gradual improvement, but you know the the outlook. We we give you know that's where we that's where art in terms of.
Confident that we we should achieve that for the full year based on the the current outlook.
You know going back to the Investor day.
[noise] Yeah, we got we got a couple of years I think a lot of what happens in twenty-five is how quickly you know as you guys have asked we recover and get the about going because it is the right longer term strategic decision and some of these things. We knew was you gotta have some bump.
Two it right as you transition we talked about that anytime you make a transition or change to a product [noise]. The harder part is trying to predict you know when and how quickly. It will it will come back and get you going again, and that's where you know like I said, we got a couple of years here. So we are not giving up.
You know in terms at this point of where we're at and twenty-five will get better clarity and we've also talked about this isn't the only thing we have in the Hopper I mean, we're we're making significant investments on the technology side, where.
We're gonna be rolling out from a marketing and sales perspective Ah Salesforce out at our sites are digital marketing, how we target. So you got a lot of initiatives going at the same time as your transitioning this product so yeah, well, we'll come back at some point here and look longer.
Charm in terms of twenty-five, but the teams focused and and we're not giving up on 25 at this point.
Understood and if I can just follow up with one more perspective and in this direction, which is.
We we you you you know you certainly it's sort of been out and about you know throughout the quarter and I'm curious whether there was some acceleration in some of these pressures as we got toward the end of the quarter and and into and through June .
Or.
You know did I I guess, what I'm asking did some of this.
[noise] sneak up in some way or was this.
A vision and and you know all sort of thrown myself out there you know did I not that I not hear it clearly enough.
Well when we came in now into the quarter.
Yeah things things got a little bit I think worse and May you know Directionally and then we started to see improvement in June . So you know if you look at you know kind of our mess, let's take a step back we don't guide the second quarter consensus was call at $250 million of EBITDA, we were coming into the quarter, probably around 241 too.
<unk> 42 on our own expectations of what we were gonna do right. So we missed our own internal by about $20 million of which development profit was about half of that right and and quite frankly, a lot of that was the higher sales reserve, which we didn't anticipate so notwithstanding the lower contract sales.
We still held the development margin above 30% and and the sales reserve was a bit of our miss for the quarter. The other bit of the myths was rentals and as I talked about my script. You know we had a first quarter that was pretty good and rentals in terms of occupancy and right as we as we moved into the second quarter and our outlook for the year.
You you have seen you know change in travel patterns. You have you got more U S travelers Goin' International and we're seeing that impact we have a lot of our keys higher end, Hawaii, you know those higher end markets, Florida Beach, and you know another area, where we've been able to get higher ADR specially back in 22.
And.
You are seeing you know three or four points of lower occupancy rates are down and some of those markets. So those are the other trends that kinda shifted as we went through the second quarter and we probably.
$10 million of our Miss first your expectations in the second quarter or on the rental side of the business. So and as you look at the outlook. We've got a we've flowed through you know in terms of our outlook that missing rentals.
So called another <unk>.
<unk> plus another 20 give or take for the balance of the year because you know as we look out at these markets right now and what's on the books and all that while it's strong on a relative basis. It. It the trends are similar to what we're seeing in the second quarter. So that that's where you where you have it it's Tony talked about we do expect contract sale.
To be up notwithstanding some of this noise here that we're having with a bound and H B O and we're managing the development margin to be at 30 plus percent.
So you know.
Unfortunately, these travel pattern shifts and that's a little bit on the exchange side as well, where we haven't seen the deposits come back here through the first half of the year, we weren't forecasting for them to be back to pre pandemic levels, we were expecting that they would improve year over year and we just haven't seen that and that gets you know.
At a at a broader that's travel patterns right people still using their weeks a little bit different coming out of COVID-19, where in a little bit of that environment coming out of Covid, where you know the patterns have shifted a little bit and we still expect those will continue to normalize you know back you know next year I would expect given the U S travelers go into Europe there.
Might be some pull back here to the U S. As well so yeah, we're keeping an eye on all of that but that was a little bit of the the surprised on the rental size versus what we were seeing.
David I would add when everything in there on the rental side, when you're getting into the year and especially when you get to a second quarter.
Casserole already fixed for the year. So if you think about the inventory costs, we pay unsold maintenance fees at the beginning of the year you look at the programs that are owners have that they used to do other excursions, we get that inventory back and we have to rent.
So we're not going to stop owners from participating in the explorer program, where the boundary programs. So a lot of that cost of rentals is kind of fixed so when you Miss a little bit on the ADR side or on the revenue side a lot of it that flows through to the bottom line and that's part of what we're seeing here and why rentals saw <unk>.
A bit of weakness on the bottom line.
Got it. Thank you very much I appreciate the answers.
Thanks, David.
Thinking our next question comes from nine a Patrick's close with true Securitas. Please proceed with your question.
Hi, good morning.
We break down a little bit further.
The components of the 80 million at the midpoint guidance cut you just said roughly 20 million for rentals.
It looks like you know there's three other items.
Bound and the hyatt's alignment for those tougher cop about a higher limit how much EBITDA.
Taking down would you.
Ascribed to each one of those roughly sure.
Sure Patrick.
Yeah rentals with the 10 million Miss in the second quarter and another 20, right that's about $30 million of the 80 million.
The exchange as like I said, we're we're not seeing the inventory deposits in the trends there call. It another 20 million from there. So that's about 50 of the 80.
And the balance the development is the balance caught roughly 30 million and you know that's a combination of the lower sales, but some of the higher sales reserve I just talked about so depending on where we come out for the year.
We've already got his Tony mentioned, nine or $10 million of additional and that 30 million, but <unk> arrange on the sales deserves to some of its sales reserve and then the rest would be the more impact on the contract sales.
Okay <unk>.
And I believe you talked about 25% of the legacy astonished sell centers have.
Transition to abound.
What's the timing on the other 75%.
So yeah, it's about 20, 25%.
The the remaining ones are gonna be.
The the stay on excuse me the share can flex.
Which is probably later next year, which is really you know mostly.
Mostly sale centers in Orlando Myrtle Beach.
And then there's some you know where they just have a different product and not sell on the sheraton or western flex right. So for example in Mexico, we sell a different trust advent tour. So that won't transition right that will continue to sell the Mexican trust, our western Saint John for example, as a standalone product so.
Not all of them will transition because they don't sell necessarily the western or share can flex its the sheraton in western ones that'll continue to transition and I don't know if I have that.
Number in front of me cause that probably another you know 30, 40% and then the remainder will continue to sell their existing product. If you think about it it's going to be inventory driven we do have more inventory left in the Sheraton flex that we have to sell through so we have some of our locations still selling that old Prada.
So that we can get through that and deplete that trust. There is always going to be some inventory trickling back. So we'll always have to keep selling some of our sales centers, but you know through the end of this year and probably early into next year, you should probably see more of the shared and sales centers shifting over so but they they the nice thing.
Thing about that delay notwithstanding the sales process and all that is those owners are enrolled in the a bound program on the share can flex side for example, Patrick so they're they can start using it now and getting educated and all that so that's the good thing right. That's the that's the piece that I mentioned before.
Which is not only educating but getting your owners to use it and see the benefit of it so yeah.
Yeah, I would expect we have time will tell here a little bit when we go to transition you're gonna have a much more educated owner base about the new product.
Okay. So is it safe to I guess.
<unk>.
That that all the challenges you had out of the box with the first plug of 25% likely.
At least to the degree that you saw that first 45 per cent won't continue for that.
Mmm remaining 75 per cent.
Yeah, I mean that I think it should go smoother right. That's that's all I'm, saying and because that owner education piece and the ability for those sure can flex owners to start using the a bound program now seeing the benefits of it staying at different resorts exchanging out for cruises or tours things like that.
That will help because that's what we saw with the week space product right. You know people started to enroll their weeks in the points program use it right and then they wanted to buy more points right. So yeah, a little bit of that is yeah. It takes a little bit of transition my only point is the.
Delaying the launch on the Sheraton flex side to sell through that should be helpful. Right from Ah It should make that transition easier than starting cold.
Okay and can you remind us.
Before you started transfer transition.
Into abound.
The the legacy this Donna foreigners, you know what percentage of B O Y sales did that represent roughly I get it taken out of Covid any acquisition quite roughly.
30% to 40% I would say I'm looking at Tony here [laughter] I'd have to go confirm that number for Ya.
It should be in their proper although you can go back and look at it but I think that's that's ballparkish.
Okay.
I am all set thank you.
Alright, thanks veteran.
Thank you. Thank you can gentleman that concludes our question and answer session I'll turn to fly back to Mister Gallo for final comments.
Great. Thank you Melissa.
Melissa.
And thanks for everyone joining our call today.
Despite the uncertain macro environment or resorts again experienced high occupancy this quarter illustrating the power of vacations and while I'm not satisfied with our results this quarter that doesn't diminish my enthusiasm for the long for our long term trajectory. We have some of the best brands in the hospitality business with a portfolio of resorts.
That would be impossible to replicate and the improvements that we've made to our core Marriott branded vacation ownership product. In addition to the alignments for making on the highest side or the right strategic decisions that will propel our growth over the long term on behalf of all of our associates owners members and customers around the world I Wanna. Thank you.
You for your continued interest in our company and hope to see you on vacation soon thank you.
Thinking this concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.