Chris Woronka: Hey. Good morning, guys. So this is a little bit of a asking one of Joe’s questions a different way. But are you seeing any kind of difference in performance by geographic region in terms of either tour flow or close rates and what I am getting at is, have you seen any weakening, say, in the West Coast relative to East Coast and really talking about where the customer originates? Thanks.
Michael Brown: Well, we definitely saw some impact on our West Coast operations late in March, but not dissimilar from the macro commentary is, we have seen those performance metrics return in April. So our belief at this stage as it was a short-term blip and the macro consumer strength that we are seeing, not only in our results, but in the airline results and fast food results and other hospitality companies as well today seems to be intact and with 26 days of run rate in the month of April, we are just not seeing that what happened at the end of March persist beyond that sort of two-week, two-and-a-half-week period.
Chris Woronka: Okay. Fair enough. And then as a follow-up, going back to the exchange question. Michael, does it — it looks like that business is obviously never meant to be a fast high growing business, but obviously appears to have stagnated a little bit. Is there anything strategically you want to do, whether that’s lean into more marketing or look at some kind of reorg of it or do you think this is just something where there’s some macro turbulence and you have to get through it?
Michael Brown: Well, the macro trend around exchange has been intact for a decade now, which is across the industry, the industry is consolidated and many of the affiliates have evolved in internal Travel Club, which is very natural. I mean that’s nothing new this quarter or last year or even pre-COVID. That’s been going on for a decade, which has created a natural headwind against the entire exchange space. I think our team has done a great job of continuing to maintain market share, maintain revenue per transaction and it is an indirect beneficiary of the growth of new owner towards an owner. So that part stays intact from where it was historically. And when we launched the Travel Clubs and it’s just a reminder, I think, for everyone is that this was an incremental business to help us grow it.
Has it started slower than we expected? Yes. But we see positive trends. Our new Travel Club transactions are up significantly and it’s going to take some time. But again, that is an effort to incrementally add some growth rate to a segment of our business and inside the industry that’s had headwinds for now over a decade. So I think we have a plan. The level of growth is the part that we are seeing unfold and it started a little slower than we anticipated. And let me just — Mike is just going to add one other thing here.
Mike Hug: Yeah. I think, Chris, one thing we talk about spending marketing dollars and things like that, we noted it slightly in the release and in my comments about the transaction mix. On the RCI side of the business, we are able to drive incremental exchanges through going out and procuring inventory and providing additional opportunities for our RCI members to exchange. The impact of that is obviously more transactions and more EBITDA, but it does have a cost of sales benefit because we are going out and running that inventory. So that was part of the reason for the slight miss in the first quarter on the exchange side of the business and something we will continue to do throughout the year to give our owners and members more opportunities to transact.
Chris Woronka: Okay. Appreciate all the color. Thanks, guys.
Mike Hug: Yeah. Thank you.
Michael Brown: Thank you, Chris.
Operator: Thank you. Next question is coming from Patrick Scholes from Truist Securities. Your line is now live.
Patrick Scholes: Hi, guys. Good morning, Michael and Mike.
Mike Hug: Good morning.
Michael Brown: Hi, Patrick.
Patrick Scholes: Good morning. Good morning. Michael, you talked about April bouncing back from March. How would you describe how summer leisure travel is shaping up for you folks, specifically on a year-over-year basis at this point? Thank you.
Michael Brown: Well, just to frame up Q1 and then now Q2 as it relates to the majority of our VOI business. So Q1 of last year, we did 28.5% new owner business, Q1 of this year we raised that by 260 basis points up to 31.1%. So we — first of all, we are investing and we are seeing results in our new owner business that’s not only coming holistically, but also our Blue Thread is performing extremely well. I’d say that as a precursor because we have said we are going to invest and grow our new owner business in the second quarter and third quarter and given our success so far, given consumer sentiment in hospitality and beyond, we think we will continue to grow our new owner business as we head into this over time above even the 31.1% that we had in Q1.
Which leads to the second side of the business, which is our owner business is over two-thirds of our business is from our owners, and without the case, forward bookings is the greatest predictive measure that we have at this point. And our arrivals are flat to last year and with length of stay about the same as well, we have really good visibility into the summer months on our ability to drive owner sales for the upcoming summer season. So, holistically, we are positive about what’s to come this summer, and the April first 3 weeks give us an indication that what happened at the end of March was temporary and brief as opposed to something that was showing cracks. I feel good about what’s happening in April and the owner arrivals that we have already on the books for the summer give us confidence for the next 120 days.
Mike Hug: And Patrick…
Patrick Scholes: Okay.
